Strategic Marketing Introduction to Marketing Strategy Strategy can be defined as a long-term plan to accomplish certain objectives. Therefore, a marketing strategy can be understood as a marketing plan to achieve the desired marketing goals and objectives. In simple words, strategic marketing can be understood as the broad concept, which along with product promotion strategies also addresses issues such as market segmentation, targeting the market as well as product positioning. Attributing to this fact, it can be said that strategic marketing is the management phenomena of embedding the marketing concepts to the central point of organization Kotler,
Share via Email Tesco has been struggling in China, according to market observers. Three years ago, in his previous role as head of international, Clarke had unveiled plans to open 80 vast shopping malls, all including a tesco hypermarket, across China that would have made its retail portfolio bigger than the UK.
In its most recent quarterly trading update the company revealed that like for like sales in China had fallen 4.
Analysts generally welcomed the move, saying Tesco was unlikely to become a serious national contender without investing billions of pounds more into the country.
Mike Tattersall, retail analyst at UBS, said: Tesco has a sub-scale business in China. To achieve scale and profitability they would need to spend a lot of money, billions more.
They got the business where they wanted it to be without spending lots of money. The plans for a US sale continues, but so far no buyer has emerged and there are now suggestions that the only viable option may be to shut down the operation. The grocer opened 12 new hypermarkets last year, and is due to launch an online groceries business in Shanghai later this year.
However, Tesco has struggled to win over Chinese customers. Other British retailers have also struggled in China in recent years.
The business is now improving. Tattersall explained the difficulties with expanding into China: All the lights go green and they all pile in at the same time. Everyone is throwing capital at it so you have more and more competitors at the same time. Like-for-like growth is very difficult to come by and gross margins are tough.
The business made a profit for a couple of years, but performance slowed after the Chinese government introduced measures to cool the housing market after the infamous ghost towns started popping up. Store numbers were cut from 63 to 40 and a further 17 were downsized.
However, the store opening on the West Nanjing Road, Shanghai, did not go well, with a business model based on its Hong Kong store failing to transfer successfully to the Chinese mainland.
To make matters worse, a customer fell from the escalators and died, putting a so-called curse on the store and causing shoppers to steer clear. A year later chairman Sir Stuart Rose admitted the company "screwed up" after supply chain problems left the food hall virtually empty.
He also said they must return to "basic shopkeeping" after not stocking enough smaller sizes.CLOSING CASE: Tesco Goes Global The closing case describes Tesco’s international expansion strategy.
Tesco, the British grocer, has established operations in a number of foreign countries.
Typically, the company seeks underdeveloped markets in developing nations where it can avoid the head-to-head competition that goes on in more crowded markets, and then enters those markets via joint.
Further, in the midst of , Johnson and Johnson acquired Guangzhou Bioseal Biotechnology Co., Ltd.
for the purpose of business expansion in China. Though the market of life science is experiencing rapid growth and is sufficiently attractive, the significant legal challenges do exist at the same time. China is evolving into a consumer economy with ample opportunities for international investors to gain exposure to rapid growth markets and an expanding middle class.
But the challenges of doing business in China still remain, and businesses are well advised . A PESTLE analysis helps to assess where location wise there is a demand for expansion.
The situation is in no way being assisted by the ever expanding TESCO’s chains of store. Under EU law, there is presumption that an organisation with a large market share is dominant. Tesco plans to centralise IT applications across its stores worldwide, after signing a £m network and voice contract to support its overseas expansion programme.
Tesco is a large U.K grocery firm and retailer whose main competitors are ASDA, Sainsbury’s and Morrison’s, which are often called the Big Four in the United Kingdom. Waitrose is another large.