Tesco is one of the three major international retail chains in the market. More than 3260 stores in 13 countries ( Great Brittan, Ireland, Poland, Hungary, Czech Republic, Slovakia, Malaysia, Thailand, South Korea, Japan, Turkey, China and the U. S. (http://www. tesco. pl/o-nas/tesco-na-swiecie. php ) and therefore to remain on top position there is many aspects which Tesco has to face in its daily life. To observe strength, weakness, opportunities and threats, it is important to carry out SWOT analysis which will give a brief idea on how Tesco is performing in the market.
Strengths Tesco is a powerful retail brand. It is known as a company that is value for money, very convenient with the wide range of products, all products in one place. TESCO have very secured market position in the global market. It is the winner of the Retailer of the Year 2008 “World Retail Awards. Most of the businesses faced in 2009 effects of credit crunch however we could hear in news that Tesco is taking people on and that was because of the major increase of Tesco retail stores within UK. From about 700 in year 2001 to over 1900 stores in year 2009.
Tesco also expanded to different stores like Tesco Metro, Tesco Express which made it more convenient for the customers. Because of the size and facilities, Tesco buy in bulk which means they take benefit of economies of scale. That means they can lower prices when they want in order to keep the prices attractive and be competitive with stores such as Asda or Sainsbury. By creating loyalty packages such as club card they achieving loyal customers what is important and is as a consequence they are successful company. Weaknesses
Tesco is very big company with very wide range of products. They are selling products from food, books, clothing, and furniture to insurance or petrol. But is has its weaknesses. Tesco’s finance profit was impacted by bad debt form credit cards and too many household insurance climes. Also by trying to gain new markets other that food sector such as books they are facing obstacle because there are companies that are specializing already in this area such as Amazon that might provide better service and have more loyalty from customers in this area.
Another example is when Tesco wants to offer phone services as lack of experience and expertise may lead to debts. Tseco is not focusing on specializing in one area, they trying to enter many different markets which could have a negative effect. In recent times Tesco is trying to do some online selling. However to start online selling like other leading online stores, Tesco needs to invest a lot of cash for the new web technologies, where Tesco is lacking in free cash at the moment as they have large amount of debts which can be destructive as when interest rates is increasing. Opportunities
There are many opportunities for Tesco. Tesco should stick with the strategy that they following at the moment about entering new markets with new products. Big opportunities are on the Internet as Tesco is trying to meet the needs of the customers. Also creating brands like Tesco value or Tesco finest that is targeted to desired group of people that can afford it to buy in Tesco. In addition there is still opportunity to develop Tesco brand in Asia and other international markets. Threats Tesco also faces many threats. Being number one means that you are the target of competition.
One big threat that Tesco faces is the takeover of Asda by Wal-Mart. The reason this is a threat is because Wal-Mart is the largest Global Competitor and therefore has the necessary skills, resources experience and funds to cause Tesco problems. A major threat to Tesco current strategies of expansion is the government and the Monopoly and mergers commission. Also there is a Growing public concern and annoyance that Tesco is threatening the smaller retailer. The smaller shops are disappearing due to the growth of supermarkets and this is annoying some people. So there is a social and legal implication as well.