Tesco's Strengths And Weaknesses

Tesco plc was the UK’s top retailer in 2013 (Retail Economics, 2014) and maintains a presence in 12 countries in Europe and Asia (Tesco, 2014). To sustain its position and build profitability, Tesco must assess its strengths, weaknesses, opportunities and threats. Strengths and weaknesses focus on internal factors affecting a company; in contrast, opportunities and threats identify external issues (Collins, 2010). Thus, it is important to carry out a SWOT analysis to ascertain how the company is performing in the market (Kotler et al., 2013).

Strength

Tesco is a powerful retail brand globally, in the top 100 of the world’s most valued brands, slightly below Ikea and well above eBay (Brand Finance, 2014). It is known as a company that offers

This model has its weaknesses. It is very easy involved in product recall events because of the shortage of quality control. However, the consumer buys the products from Tesco directly. Every product recall events would damage Tesco’s reputation and trust seriously. Tesco’s profit has been impacted by bad debt from credit cards and high levels of household insurance claims (Ruddick, 2014). Another issue is Tesco’s lack of experience in some markets that it intends to enter, such as its own brand smartphones and tablets (Wood and Gibbs, 2014). Finally, Tesco needs to invest a lot of cash in new web technologies and IT, as well as store refurbishment, diverting cash from price reduction strategies (Ruddick, 2014). This is likely to have an adverse effect on sales (Bunn and Ellis,

Tesco has not stopped to explore the new non-food business. Now Tesco’ also sells clothing, tools and cosmetics, etc. For instance, Tesco has in-store beauty salons, offering cheap and fast service for the customers at three of its supermarket in the U.K. The retailer projects the beauty business to have a turnover of £15m in its first year. (Market Watch: Personal Care, 2011)

Threats

The ninth most-valued brand in the world, Wal-Mart is Tesco’s largest global competitor and therefore has the necessary skills, resources, experience and funds to cause Tesco problems (Brand Finance, 2014). The effect of town planning and consumer intolerance for out-of-town stores, as well as concern for the livelihood of small shops, can also imperil Tesco’s expansion plans (Stevenson, 2014).

Tesco failed in Asian market once in 2011. Business Source Complete (2011) notes that Tesco announced the decision of selling its whole of business in Japan, which means Tesco, could not keep the smallest market share in Japan, the most unsuccessful expanding