Tesco Goes Local for Global Expansion

Apr 04, 2002
George Anderson

According to a case study in Strategy + Business, Tesco is applying a “think globally, act locally” strategy to expand its presence in emerging markets from Eastern Europe to Asia.

“We know shoppers in Hungary and Thailand want products tailored to the local market,” Tesco CEO Terry Leahy says. The cornerstone of the chain’s international strategy is exporting culturally customized versions of its marketing formula for hypermarkets.

Tesco is not alone in its mission to conquer the world. Many other big names, including Wal-Mart., Carrefour and Ahold, are also expanding internationally. The record for global retailers is mixed at best. Carrefour is losing market share in Spain and France and is having problems in Brazil and Argentina. Royal Ahold has said it will not enter any new countries in the near future. Even Fortune’s number one retailer, Wal-Mart, has been unable gain significant market share in Germany.

Tesco’s approach “hinges on deep understanding of and responsiveness to the cultural vagaries and habits of foreign consumers”.

Moderator Comment: Should chains grant more autonomy
to store managers?

Consumers do not shop at chains. They shop at stores.

Large chains in the United States such as Wal-Mart and
Hy-Vee have demonstrated the bottom line wisdom in giving store managers the
authority to deal with local circumstances. [George Anderson – Moderator]

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