International Business & Strategy
SALFORD BUSINESS SCHOOL
International Business & Strategy
by
Nikolaos Athanasiou
30-March-2014
Eileen Roddy: Strategic International Business
Management (CRN 33138)
Nikolaos Athanasiou 2014
1 of 10
Challenging Tesco giant in the Kingdom of Saudi Arabia
Nikolaos Athanasiou 2014
2 of 10
EXECUTIVE SUMMARY
Born and grow in UK, Tesco PLC decided in 1995 to extent its leadership in mass grocery retail market to rest of the world. By doing this at that time, based on a strategic plan that is still more-less the same in principals, has achieved to hold the 4th place in the specific market segment. With main competitors such Carrefour, WalMart and Metro, Tesco had 50% of its revenue coming from grocery market.
Nowadays and during last years, Tesco has presence in 13 countries, including cooperation with TATA in India, with more than 2000 stores in Europe, Asia and US.
From the other hand, a Kingdom such is of Saudi Arabia, grows exponentially over last decades as one of the main sources of oil. Saudi Arabia is places 8th in the world most fasten growing economies according to IMF and 6th from macro-economic stability perspective. It is forecasted for the population to reach 30 million till 2016 and the average income per capita to be $33.5k till 2020. One more significant forecast is for mass grocery retails to have an increment of 66% by 2016.
Tesco’s hypermarket stores in the Kingdom of Saudi Arabia would be promising but also challenging. Tamimi, Panda and Carrefour are the main competitors.
Hypermarkets in KSA having 18% of the total food retail share, where supermarkets have 26%. The entry strategy into the Kingdom would be ideally an introduction of their own-brand product with a “Direct Investment” and full control of its operations.
Although such a strategy has a lot of risk, in parallel provides the highest possible revenue, assuring also the brand and the business’ sustainability. Tesco giant, has the
International Business & Strategy
by
Nikolaos Athanasiou
30-March-2014
Eileen Roddy: Strategic International Business
Management (CRN 33138)
Nikolaos Athanasiou 2014
1 of 10
Challenging Tesco giant in the Kingdom of Saudi Arabia
Nikolaos Athanasiou 2014
2 of 10
EXECUTIVE SUMMARY
Born and grow in UK, Tesco PLC decided in 1995 to extent its leadership in mass grocery retail market to rest of the world. By doing this at that time, based on a strategic plan that is still more-less the same in principals, has achieved to hold the 4th place in the specific market segment. With main competitors such Carrefour, WalMart and Metro, Tesco had 50% of its revenue coming from grocery market.
Nowadays and during last years, Tesco has presence in 13 countries, including cooperation with TATA in India, with more than 2000 stores in Europe, Asia and US.
From the other hand, a Kingdom such is of Saudi Arabia, grows exponentially over last decades as one of the main sources of oil. Saudi Arabia is places 8th in the world most fasten growing economies according to IMF and 6th from macro-economic stability perspective. It is forecasted for the population to reach 30 million till 2016 and the average income per capita to be $33.5k till 2020. One more significant forecast is for mass grocery retails to have an increment of 66% by 2016.
Tesco’s hypermarket stores in the Kingdom of Saudi Arabia would be promising but also challenging. Tamimi, Panda and Carrefour are the main competitors.
Hypermarkets in KSA having 18% of the total food retail share, where supermarkets have 26%. The entry strategy into the Kingdom would be ideally an introduction of their own-brand product with a “Direct Investment” and full control of its operations.
Although such a strategy has a lot of risk, in parallel provides the highest possible revenue, assuring also the brand and the business’ sustainability. Tesco giant, has the