Tesco Plc is one of the famous retailing company of United Kingdom. The company was formed in 1919 at London. It is a multinational company operating across China, Hungary, Czech Republic, Ireland, India, Malaysia, Poland, USA, Turkey, Thailand, Slovakia, South Korea and UK. The company is headquartered in Hertfordshire, England. The company was primarily the grocery retailer, and later it got expanded in dealing with multiple items. For example: apparels, electronics, furniture, toys, books, software, telecommunication, petrol and financial services (Tesco, 2020).
Ansoff matrix is an important strategic marketing tool for planning, which looks forward for opportunities. This helps in the revenue growth for the business through product development and new markets. This model helps in increasing the sales of the company by determining different combinations of the markets and products. Here is the detailed Ansoff matrix of Tesco UK.
Market Penetration
Whenever company starts operating, it becomes necessary for it to penetrate in markets for finding new opportunities of growth. Tesco did the same, as initially it was grocery retailer, but later find different markets. Tesco started to increase its market share with the help of Tesco Clubcard points. This card scheme was the successful trump card for the company, as it helps in gaining customer loyalty. This helps the company in penetrating in new markets. There are many consumers who prefer brands rather than products. Tesco identified those customers and becomes the brand first. It entered in market with the help of self-advertising website. This was the Tesco’s property. The company promoted itself with the help of leafleting in stores (Zeem, 2012).
Product Development
Product Development is one of the major factor for the companies and opportunity to grow. Tesco UK follows this very carefully. Tesco identifies the opportunities and introduce new products in the market. For instance, organic food are offered by the company after seeing the change in consumer preference. Moreover, the company offers credit card, loans, insurance, mortgages, electronics etc. It is alos providing the one-stop solution to consumers. Tesco also understand the consumer preference of environmental friendly products and social responsibility. The company also introduced biofuel other than petrol and diesel and still working on improving the quality. Tesco is also looking forward for expansion in middle sector. The company has identified the profits and growth in Asia market. Furthermore, the company is growing more in telecommunication sector and electronic items (Blogspot, 2016).
Market Development
Market development is an important force in the model. The Tesco’s intention is to expand current business operations and it is supported with new products in the new markets. Product dimension, strategies, and distribution channels helps in attracting new customers for building new markets. Majority of the suppliers and producers of Tesco are from UK as they understand the segments’ consumers. This helps in determining new market for existing products and services of the company. Tesco took over the Scottish supermarket to identify the new market. the company has its stakes in Associated British foods, Quinn worth and the Crazy Prices. It identified the markets in Japan by purchasing Two Network. It also bought a supermarket in Poland for the market development purpose. However, for existing market development, Tesco has undergone in many changes. There were re-examining of the strategy of European and Asian markets (Zeem, 2012).
Diversification
Diversification factor in the Ansoff model deals with new products introduced by the company in new market. This helps in diversifying the risk to multiple products and markets. For every category, the company has to attract new customer base. Tesco was a grocery retailed at first but diversified its operations. It introduced non-food items at first. The company also diversified its operations in selling books, electronics, rental services, financial services, furniture, etc. It introduced its own clothing brand “F+F”, and “Cherokee”. The company has its food brands “Value” and “Finest”. Tesco diversified itself in beauty and health products. This strategy helps the company in mitigating the risk of loss in one division. As it will have other segments and product lines to earn the profit and growth (Tony, 2013).
References
Blogspot, 2016. STRATEGIC MANAGEMENT: TESCO UK PLC. [Online], Available at: https://assignmentshelpforu.blogspot.com/2016/06/strategic-management-tesco-uk-plc.html, [Accessed on: 12th January, 2020].
Tesco UK. About Tesco Plc. [Online], Available at: https://www.tescoplc.com/, [Accessed on: 12th January, 2020].
Tony, 2013. Can Diversification Power Tesco’s Growth? [Online], Available at: https://www.fool.com/investing/international/2013/04/09/can-diversification-power-tescos-growth.aspx, [Accessed on: 12th January, 2020].
Zeem, Z. 2012. Tesco assignment. [Online], Available at: https://www.academia.edu/4574511/tesco_assignment, [Accessed on: 12th January, 2020].