Tesco’s Failure in America
In times of fast progress, in terms of economic development and globalisation, many multinational companies are extending their business overseas. One of those many firms is Tesco. This report will elaborate more about how Tesco failed in America when it encountered cultural and economic differences. Tesco is a British owned multinational grocery and general merchandise retailer that was found in 1919 by Jack Cohen in London. (Tesco PLC, 2013). Over the years Tesco has grown rapidly and now it operates in 14 countries around the world. (Tesco PLC, 2013). Tesco is now the third largest retailer in the world. (Tesco PLC, 2013). In 2007 Tesco entered the US market under the name of Fresh & Easy, opening stores in southern California, Arizona and Nevada. (Tesco PLC, 2013). Over the years social attitudes of society has changed. In any kind of market intercultural communication presents a new challenge to every multinational company. Firms that extend their business abroad have to face a challenge of cross cultural communication. Tesco faced a cultural dilemma when it expanded to America. Tesco opened up its chain of firms in America under the name Fresh & Easy, failed to become profitable over 5 year’s existence because it wasn’t famous enough or the “Americans just didn’t get it or Fresh & Easy didn’t get the Americas”. (Sonne & Evans, 2012). Tesco spent years researching but some ignored findings ended it all. Tesco never understood the American culture. For example, US shoppers are known for buying in bulk to save money, Fresh & Easy offered small pack sizes. (Tesco close American strores,2012, para 4). The store also stocked British style ready meals which was unfamiliar to American shoppers. (Tesco close American strores,2012, para 4). There were more self-service tills than actual checkouts. (Tesco close American strores,2012, para 4). Fresh & Easy had a too narrow product choice; it did not have a...
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