Tesco's in India

Extract

[...] From the business and selling point of view, we can say that the system of selling in India is different. The prices are not strict, everybody can bargain on the items to change the listed price. Le Figaro states that doing business, especially retailing is very difficult in India. Foreign retailers have often had to close businesses and sometimes they buy a local company. The attraction of India The current GPD is increasing by each year and the inflation is increasing by Services added value is about of the GDP. [...]

[...] Generally 35 days are required to start a business in India. According to the official governmental DIPP report, local investments are freely repatriable. The government is facilitating the FDI policy and that is why businesses are not restricted in any sector including the service sector. But there are a lot of limits on industrial projects (about locations, objectives, etc.) and industrialists need a license for manufacturing. According to Prakash (2007) large retailers have some trouble when they try to open a large store, for example, Reliance tried to open 300 stores but the government asked them to close because the local little shops were losing their business and they protested. [...]

[...] So, Tesco has decided to set up a new business model to invest in India. Tesco needs to assess the decision with the McKinsey Matrix which includes all factors that Tesco needs to assess. Adapted from McKinsey & Company (1970) External factors include: - Market size: India is one of the biggest markets of the future with a population of around 1.1 billion people - Market growth rate is at around according to the GPD growth - Entry barriers are low - Technology development: Thanks to IT development, lot of new technology is accessible in the large cities in India - Competitive intensity is low between large retailers and high between small business units - Distribution structure: India needs to develop on the transportation system to have benefit from a better distribution structure - Pricing trends: Prices are lower than European prices Internal factors include: - Relative brand strength: Tesco had built a really strong brand image - Quality: Tesco is retailer that ensures quality and is well known for its management of quality products - Competencies: Tesco has a high management which provides high competencies - Distribution centre: Tesco has big distribution centre over all England, it can create and provide a high efficiency distribution centre in India thanks to this - Management strengths: Tesco has proved that its management system is highly competent. [...]

[...] Tesco is driving a multi-part strategy which will add to Tesco's growth and benefit. According to studies, a lot of retailers fail when they try to market internationally by opening international stores. According to Jasor (2005), Tesco's international marketing strategy failed in 1990 and Tesco had to close down its stores in France. Le Figaro (2008) stated that Carrefour (France's largest retailer) announced that they will open « Cash and Carry » stores by 2010 in India. About India According to the World Bank India has a population around 1.1 billion with an annual growth of India is a big country, it is three times larger than the United Kingdom and has 28 states. [...]

[...] Tesco is not positioning its products as prestige products but as accessible products - Value consciousness: Tesco's prices have to show the real value of the quality of the products and of the Tesco brand - Price/quality scheme: This is the most common way that products are considered when consumers buy products Because India is an emerging country, prices have to be lower than in the UK but prices have to be linked by consumers to the quality of the products. Distribution According to the World Bank of the roads in India are paved. This is a good example of the complexity of the Indian transport network. This part of the marketing mix is very important for the back office management of Tesco's new Indian stores. Tesco's aim is to find the best way to develop the most effective distribution network in India to offer low cost products at the lowest possible cost. [...]