Question:
Discuss About The International Market Gain Competitive Edge?
This assignment is in alignment with the task 1 which included the strategies of Tesco Company to grow in the international market of Australia. The earlier report provided optimum information about the market analysis of the company and the environment in which the company is planning to expand. This task is further in adjoinment to the initial task provide the entry mode and the strategies with which the company will implement the expansion process.
Tesco PLC is a British multinational company involved in a retail business. The company is headquartered in the United Kingdom having a huge human resource of around 460,000 employees. Tesco was originated by Jack Cohen in the year 1919; the company is already conducting their business activities worldwide by managing 6553 stores globally (Tesco, 2014). Further, with the purpose of growth and expansion the company initiates to introduce their supermarket activities in Australia. The report includes the activities of the company to expand their business internationally.
From the market analysis of Australia conducted in Part A of the report, the following are the facts that came into consideration:
The best entry mode for the Company Tesco to expand in Australia would be Joint Venture. Joint Venture is an international strategy under which two businesses pool resources to accomplish a specific task; it helps a foreign company to capture the local market of other partner company. Tesco will earn well in the Australian market if they create a joint venture with any other Australia based company (Czinkota, & Ronkainen, 2013). There are various benefits which a joint venture will provide to Tesco which are explained below:
The process will share the risk of Tesco with the other company by coming in a joint venture. The fact is obvious that entrance in a business involves a huge degree of risk, with this process the risk will get shared with other company already existing in the Australian industry.
It will get easy for Tesco to enter in the supermarket industry, as the other partner of the joint venture would already have its business holding in the Australian market (Meiners, Ringleb, & Edwards, 2014). As the fact is seen as per the cultural analysis of the country, that people and market are less inclined to know new products coming in the market, due to which it gets difficult for new companies to survive in the Australian market. Thus with the joint venture, the company will face fewer difficulties in surviving.
If Tesco choose the market entry of joint venture with other company of similar profile then the company can receive benefit of economies of scale, as they pool their resources and capabilities (Morschett, Schramm-Klein, & Zentes, 2015).
With the initiation of joint venture strategy the company Tesco can clearly focus on the industry in which the company has to enter. Choosing the right strategy for the company to expand is not easy but venture will definitely assist the company in their goal expansion. The company can further involve into cooperation with other Australian company for carrying its business activities (Nahavandi, 2016). Partnership with a local company will help Tesco to survive in the Australian market and eliminate competition. With this effect, the company will get ease in purchasing raw material and recruiting human resource within the country only. If the company aligns its activities with other company which equivalently famous in Australia, then marketing process of Tesco will initiate automatically.
As Tesco has efficient employees in their outlets of UK, thus the company can transfer their employees to Australia on a temporary basis so that the company can easily manage the internal management activities and the new recruits are taught by the senior management of the company (Papadopoulos, & Heslop, 2014).
In the process of expansion in another country, the company needs to employ local people. Further as discussed earlier they also need to transfer some experienced employees from their old outlet to new organization so that they can manage the business activities efficiently. Thus, they need to manage them by communicating efficiently with the workforce. Firstly the management needs to understand the cultural sensitivity present in people, coming from the different culture the expatriates feel left alone in the organizational culture. This results in degradation in the growth of organization. Thus, Tesco shall implement group activities so as to initiate efficient communication further in order to lead the management shall effectively monitor the activities of employees and they shall make them understands the vision of the organization so that they work accordingly (Samaha, Beck, & Palmatier, 2014). An ideal leader is one who understands the vision and missions the organization and initiates their workforce to work accordingly so that personal along with professional objective is fulfilled.
(Source: Org Chart, 2017)
Tesco being a multinational company already has an efficient multinational organizational structure. As the company is retail departmental business so the organizational structure of the company is simple and efficient and effective as well. Tesco follows the hierarchical structure of an organization, the structure s further segregated in divisions which ensure that the work is circulated properly. The decentralized system of management helps the organization work in an effective manner as they now receive authority along with responsibility. The group at the top of the management holds maximum responsibility and authority. All other people are accountable to the top level of management. The board of directors of Tesco includes 10 members which include non-executive as well as executive directors (Org Chart, 2017). The business scope of the company is overlooked with the organizational structure chart, and the chart of the companies signifies an optimum growth in the international market.
(Source: Org Chart, 2017)
The above-mentioned chart is the organizational structure chart of the store. It shows that there are four levels of the management process, thus activities like bureaucracy and red tape are reduced. Managers of different stores are segregated resulting to which collaborative politics is not present in the organizational culture.
It is the duty of a human resource manager to initiate recruitment and selection process and then train the employees to achieve the organizational objective. They need to drive the focus of employees towards achievements of corporate goal. They shall take care of the interest of employees along with expatriates and motivate them so that their personal goal is also fulfilled. As they are settling in the international market, due to which the company shall take care of the culture of both the countries and then act accordingly (Samaha, Beck, & Palmatier, 2014).
In order to capture the market share, Tesco needs to advertise their product through innovative means so that people get attracted towards the brand and initiate to purchase the product. As there is cut-throat competition in the market due to which the company needs to create product differentiation so that the customer shift to buy their products. Further with the aid of joint venture, they shall aim to adopt the Australian culture and then work accordingly for better performance (Turnbull, & Valla, 2013).
Conclusion
Thus, in the limelight of aforementioned events, the facts that shall be considered are the company Tesco can easily prevail and succeed in the Australian market. Furthermore, the supermarket industry of Australia has numerous competitors existing in the market, so in order to create a brand image, the company needs to initiate joint venture so that sustainable growth is implemented.
References
Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2015). Marketing: an introduction. Pearson Education.
Aydin, R. (2016). An integrated marketing and engineering approach to product line design with consideration of remanufactured products (Doctoral dissertation, The Hong Kong Polytechnic University).
Cavusgil, S. T., Knight, G., Riesenberger, J. R., Rammal, H. G., & Rose, E. L. (2014). International business. Pearson Australia.
Czinkota, M. R., & Ronkainen, I. A. (2013). International marketing. Cengage Learning.
Meiners, R. E., Ringleb, A. H., & Edwards, F. L. (2014). The legal environment of business. Cengage Learning.
Morschett, D., Schramm-Klein, H., & Zentes, J. (2015). Strategic international management. Springer.
Nahavandi, A. (2016). The Art and Science of Leadership -Global Edition. Pearson.
Org Chart., (2017). tesco company organisational structure chart example. Viewed on September 13, 2017 from < https://www.orgcharting.com/tesco-company-organisational-structure-chart-example/>
Papadopoulos, N., & Heslop, L. A. (2014). Product-country images: Impact and role in international marketing. Routledge.
Samaha, S. A., Beck, J. T., & Palmatier, R. W. (2014). The role of culture in international relationship marketing. Journal of Marketing, 78(5), 78-98.
Tesco, P. L. C. (2014). Annual report and financial statements 2014. TESCO https://www. tescoplc. com/media/417/tesco_annual_report_2011. pdf.
Turnbull, P. W., & Valla, J. P. (Eds.). (2013). Strategies for international industrial marketing. Routledge.
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