Contents

Introduction 2

I. Tesco Environment Analysis 3

A. PESTEL Analysis: 3 1. Political and legal factors 3 2. Economical factors 3 3. Socio-cultural factors 3 4. Technological factors 4 5. Environmental factors 4

B. Porter’s Five Forces Analysis 5 1. Barriers to entry 5 2. The threat of substitutes 5 3. Competitive rivalry 6 4. The bargaining power of suppliers 6 5. The bargaining power of buyers 7

C. Opportunities and Threats 7

II. Tesco’s Resource Capability Analysis 9

A. Tesco value chain 9 1. Primary activities 9 2. Support Activities 10

B. Strengths and weaknesses: 11

III. Tesco strategic fit 13

Conclusion 15

Bibliographie 16

Introduction

TESCO is the undisputed leader in food retailing in the UK since 1995. It realized in 2006/2007 a turnover of 64.5 billion euros (+ 10.9% compared to the previous year). The core business is in the UK. Nowadays, it has 1988 outlets.
Furthermore, TESCO is increasingly becoming abroad: thus it has nearly 639 outlets in Europe (excluding UK) and 636 outlets in Asia. The expansion of the group in the coming years will take place mainly in Central Europe and in Asia (China, Japan, Malaysia, Korea, and Thailand).

The group operates through multiple store formats including Extra, Superstore, Metro, Express and hypermarkets.

In this study, we will analyze Tesco strategy in UK. First of all, we will focus on the environment in which Tesco operates and the different factors which have an influence on the market, then we will analyse Tesco resource capability, in particular the value chain, and finally we will study its strategy fit in the market.

I. Tesco Environment Analysis

A. PESTEL Analysis:

I am going to focus on the PESTEL analysis to scan the external macro environment in which Tesco operates.

1. Political and legal factors

Concerning the political factors, we can retain that the environmental