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SWOT Analysis TESCO | TESCO SWOT

 

In 1919, Jack Cohen founded Tesco. Since then, it is going strong in the UK and other regions of the world. The current CEO of Tesco is Dave Lewis. It is the biggest retailer brand in the UK and the second biggest globally. Due to its offerings and services, they create a strong and robust position in a competitive market. If you want to know completely about this popular retailer, then you have to read the TESCO SWOT analysis. In this swot analysis, we will talk about its strengths, weaknesses, opportunities, and threats. It is a useful tool to understand any organization or company’s working and strategies. Let’s begin.

 

Company Name:  TESCO PLC

Founder:  Jack Cohen

Year founded:  1919, London, UK

Headquarter:   Welwyn Garden City, United Kingdom

CEO:     Ken Murphy (Oct 1, 2020–)

Industry:  Retail Company

Type: Public Limited

Area Served: UK, Ireland, Czech Republic, India, Slovakia, Hungary

Number of locations (2019): 6,800

Employees (2019): 450,000

Annual Revenue (2019): British £63.911 billion

Profit | Net income (2019): British £1.320 billion

 Subsidiaries:  Tesco BankTesco MobileTesco IrelandMORE

 

 

SWOT Analysis TESCO | TESCO SWOT

Strengths of Tesco:

 

  • Largest Grocery Seller in the UK:

Tesco is one of the leading retailer stores in the UK and second leading in the globe. Its market share and growth is far better than its rival in the UK. Its annual profit is increasing day by day due to its remarkable services and offerings.

  • Largest Market Share:

In Britain market, Tesco is at No. 1 with a 27 % market share. It is also a leading store in Ireland as well. These things make Tesco a leading brand in the retailer market and dominating the market for several years.

  • Globally Diversified:

With 6800 outlets in 14 countries, Tesco is leading the chart globally. It shows the strong global presence of Tesco. Apart from North America and Europe, it has a huge fan-following in Asian countries as well.

  • Rising Number of Outlets:

Tesco has 3750 stores in 2008; currently, it has 6967 stores locally and internationally. This is the reason its profit I rising day by day. Now, they are planning to increase their stores globally. This kind of development makes Tesco a highly competitive company.

  • Diversified Stores:

Tesco has introduced diverse stores with different names. Some of them are Tesco Homeplus, Tesco Metro, Tesco Express, Tesco Superstores, and One Stop.

  • Wide Variety of Products:

From apparel to home appliances, mobile phones, music, DVD rentals, telecom services, school uniforms, and many more, the product category of Tesco is very vast. This thing makes the brand versatile and useful for customers. You can call it a one-stop-shop.

  • Europe’s Biggest Private Player:

No doubt, Tesco is one of the biggest players in Europe. They offer approximately 743K job chances globally. That’s why it is also considered the biggest opportunity builder in the world and it’s true.

  • Award-winning Retailer:

Tesco has won many awards due to its remarkable performance in the commercial sector. From best grocer to grocer of the year, favorite supermarket retailer, and so on, they achieved several awards in different categories.

  • Highly Innovative:

Tesco is exploiting technology in a very useful way in order to make a better shopping experience for shoppers. They also introduced a barcode system to calculate the products automatically. They are also providing mobile app and M-commerce facility to online shoppers.

  • Excellent Distribution Network:

With the simple and effective business model, Tesco’s supply chain network is very efficient and reliable. They have strong relationships with dealers and suppliers that ensure the uninterrupted supply of products.

 

SWOT Analysis TESCO | TESCO SWOT

Weaknesses of Tesco:

 

  • Unsuccessful Operations in Japan and the US:

Tesco had to shut down its stores and operation in Japan and the US due to its ineffective operations. This thing has damage to the company’s revenue and image as well. This kind of exit creates a bad impact on people’s minds.

  • Accounting Scandal and Fraud Trial:

Tesco was fined in 2017 due to the misrepresentation of revenues and fake accounting statements. These things are also a big weakness of Tesco and weak its position in the market.

  • A Decline in Profits:

The share profits of Tesco are in decline due to the loss of operating profits. Almost 9 percent of shares decreased in Oct 2018. This thing shows the bad performance and working of Tesco.

  • Financial Mistakes:

Recently, Tesco has made many financial mistakes in the form of high debts and financial liabilities. These things affect the company’s profit and growth.

  • Low-priced Strategy:

Tesco is one of the leading market players in the UK, but its low-priced strategy reduced its profits and revenues. These types of strategies haven’t proved beneficial for the company.

  • Bad Performance in Specific Markets:

In certain countries, the performance of Tesco is very poor. It is necessary to improve the working of these stores otherwise they can create a bad impact on the company’s reputation.

  • Clubcard Scandal:

Recently, they switched up its Clubcard scheme without telling its customers. Due to this reason, they faced huge criticism from cardholders. It is a major weakness of Tesco.

 

SWOT Analysis TESCO | TESCO SWOT

Opportunities of Tesco:

 

  • Increasing Jacks’ Business:

They recently launched a new store named Jacks. It has the opportunity to compete with competitors that offer low-price products like Lidl and Aldi. This opportunity can give a boost to the company’s profit and revenue.

  • Strategic Alliances:

It is a fact that you can’t achieve big goals without acquisitions and alliances. Tesco should consider this matter seriously and make partnerships with other retailers in order to expand its operations and working.

  • Partnerships:

As we know that the performance of Tesco in some regions is very poor, so they should make partnerships with local marketers. In this way, they can exploit their services and increase profitability. This opportunity can be game-changing for Tesco.

  • Ecommerce Shopping:

Tesco needs to upgrade or improve its online presence in the form of online shopping. As many people prefer to purchase online, this is a major opportunity for Tesco to attract new customers and expand growth.

  • Focus on Emerging Economies:

Even though Tesco is already working globally, but they need to target emerging countries. This is the best method to increase sales and market share globally.

 

SWOT Analysis TESCO | TESCO SWOT

Threats of Tesco:

 

  • Christmas Ad Controversy:

In 2017, Tesco launched a Christmas ad that creates a huge controversy. Many people boycotted Tesco due to disrespecting the Christian faith. This kind of event can create a threat to Tesco’s profit and market share.

  • Fake Farm Legal Threat:

They also mislead the shoppers by the fake farms. They also face serious legal proceedings due to this fake farm scandal. These types of legal proceedings can create a bad impact on the reputation of the brand.

  • Brexit Referendum:

After the exit of the UK from the EU, there are several trading issues are revolving around Tesco. These threats could damage Tesco’s profitability and operations globally.

  • Stiff Competition:

Many big retailer companies are working in the market like Walmart, Aldi, and Carrefour. These rivals continuously offer better and low-priced products to their customers. These competitors can injure the image of Tesco.

  • Looming Recession:

Government policies, high tariffs, and strict regulations affect the working of Tesco. These kinds of looming recessions and economic crises create a bad impact on the company’s image.

 

Recommendations:

As we know that Tesco is a huge player in the retailer market, but they can improve their position and operations with effective decisions and strategies. They have the potential to compete with their competitors and can boost their profit game. Here are some useful recommendations for Tesco:

  1. Focus on developing economies and increase the number of stores in African and Asian regions.
  2. Address strategic issues and tackle controversies quickly with effective solutions.
  3. Invest in the research and development sector in order to find new opportunities and chances.
  4. Tesco needs to enhance its online shopping channels. In this way, people can make purchases easily which directly boosts the revenue.
  5. Involve people in their schemes and advertisements in order to gain popularity. This thing also reduces the risk of any controversy.
  6. Address financial and legal problems with the utmost care.
  7. Expand advertising and marketing activities in order to attract target customers.

 

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