Tesco Case

Tesco thought they did thorough market research and detailed analyses before opening stores in the US. They conducted research of how Americans shop and what they like to eat. Tesco lived with American families to understand their wants and needs and how they shop. They worked and lived with the Americans with different backgrounds and food preferences. By doing this they were able to lay out a store model that was suited for the American consumer. Tesco has a large array of products and its own product brand. The organization is about providing excellent customer service, and ensuring the customer is satisfied. Tesco provided to the American consumer affordable fresh foods and utilized US recipes to prepare ready-made-meals for shoppers. Instead of building large scale supermarkets, Tesco opted to build smaller stores in the US market. Tesco tested a variety of store layouts discretely to decide what the most suitable shopping format for its US customers would be. They set up ‘dummy stores' with its own specialized products to test the market and accordingly adapt its operations to American preferences.

All the funds spent on research and living with American families, Tesco fell short on what Americans really wanted. Unlike British shoppers, American like their brands and like choices and Tesco did not offer a variety of brands. Building smaller stores and only offering the Tesco brand doesn’t work for most Americans. Unlike the Brits, Americans are not into the ready-made-meals as much as they are. Americans want to purchase their foods and take it home to cook, especially in the current state of obesity in America. Also, American do want things fresh and easy but a ready-made-meal is not fresh. A Potbelly sandwich is fresh. A Boston Market chicken is fresh. Although Tesco researchers lived with Americans, they missed the boat as to what Americans wanted, needed and liked as a US grocery shopper. Making shopping easy was another way Tesco differentiated themselves from other supermarkets. Easy to most Americans is not just going into a store and finding what you want. Easy is also, being able to make a quick stop near work and picking up what you need for dinner.

Tesco’s mode of entry into the US market was to test various store layouts and operational formats discretely to reach the most suitable shopping format for its US customers. In addition Tesco organized ‘dummy stores' with its own specialized products to test the market and accordingly adapt its operations to American shopper preferences. Tesco selected to build supermarkets in areas of the US where the target market was low income with