Global Strategic Planning Assignment: Case Study of TESCO
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Introduction
Overview of the study
Strategic planning refers to the procedure of setting organisational goals, set priorities and creates operational plans and policies for ensuring that work is done aligning with the business targets to derive common goals. Sound and prudent strategic planning is of huge importance to ensure right resource allocation, effective utilization and successful growth and sustainability. It also can be considered as a control mechanism which provides direction to all the members and serves as a control mechanism for the successful strategic implementation (Baylis, Owens and Smith, 2017). In the current age, corporations focus on the expansion strategies to expand their market share across all over the globe by entry into new geographical market segments. There are various international entry strategies i.e. joint venture, acquisition, establishing subsidiary, strategic alliance, licensing, direct investment and others.
Tesco Plc is UK’s leading retail business organisation that operates worldwide and aims at delivering the standard quality of products and services. Currently, it is operating in 14 countries of the world and the third largest retailer all over the world after Wal-mart and Carrefour. Huge investment in UK, multi-channel leadership and disciplined global growth are the three top strategic priorities of the business (Hay and Marsh, 2016). Its international growth strategy focuses on meeting the need and expectations of local residents in other nations via joint venture i.e. Charoen Pokphand in Thailand, Samsung Group in South Korea & many others. Such growth strategy helps entity to derive many benefits such as boost sales, profitability, market share, competitive strength and build corporate image across the world (International Strategy of Tesco Plc, 2017). Although, it is considered really beneficial for the companies to survive in the current competitive market place, still, there are number of factors that affect the market entry mode at an international level that needs to be considered by the retailer before entering into emerging economies i.e. BRICS. Currently, it is looking for the proposed expansion in Vietnam as the most suitable country to exploit overseas growth opportunities (Nair, 2014). Therefore, the thrust of the paper is to investigate the factors which influence Tesco’s international expansion strategy in Vietnam. It will also analyse that how different international strategic planning is from the domestic strategic planning.
Statement of the problem
Tesco has gained leading position in the UK retail industry henceforth, now it becomes necessary for the entity to expand their operations overseas to exploit growth opportunities in the global market. Under the worldwide expansion, its current Greenfield investment led to failure which makes it compulsory for the entity to look forward the other entry modes for entering into potential market, Vietnam. It is founded suitable for the proposed global expansion because Vietnam is one of the rapidly growing markets in South East Asia which has huge population of 94,444,200 (Vietnam Population, 2017). Undeveloped grocery sector, storming growth opportunities and government initiatives to improve political and economic reforms allowed foreign investment in the nation (Analysis of Tesco to enter Vietnam Supermarket, 2017). All the factors encourage Tesco to set up their own business in the country and achieve high growth.
Aims and objectives
Aim: To investigate and examine factors that influence international entry mode decisions of Tesco Plc in Vietnam
Objectives:
- To explore the concept of strategic planning & its significance for the global expansion
- To critically investigate the domestic and international strategic planning of Tesco Plc
- To identify factors which influence Tesco Plc’s global market entry strategy in Vietnam
- To recommend the best entry strategy for the internationalisation with respect to proposed expansion in Vietnam
Research questions
- What is strategic planning and how it helps in expanding business overseas?
- Why global strategic planning is more complex than domestic or local strategic planning process?
- What are the key factors that have a significant impact on the international expansion of Tesco Plc in Vietnam?
- Which will be the best international entry strategy for Tesco for the proposed expansion in Vietnam?
Potential significance of the study
The study will provide great assistance to the scholars who might take interest in exploring the concept of domestic and international strategic planning associated with the globalization of business activities and functions. It will be serves as a secondary resource to the investigators in review of literature. Besides this, companies who are looking for expansion overseas can gain wider knowledge of numerous factors which will assist them in successful entry into new geographical market segment in different areas of the world. It will also present a clear differentiation how global strategic planning is complex compare to domestic strategic planning and enable entrepreneurs in successful growth planning.



