1. Laurie Rowbottom 07012612 Maria Park 07016946

2. Tesco plc Background 1919 Jack Cohen founded Tesco ¹ Based in Cheshunt, Hertfordshire Operates in 14 different countries ² Leading UK supermarket Executive Directors ³ CEO - Sir Terry Leahy (right) CEO - Sir Terry Leahy (right) ⁴ Non-Exec Chairman - David Reid Deputy Chairman – Rodney Chase CBE Commercial & Marketing Director – Richard Brasher Chief Exec of Retailing Services – Andrew Higginson

3. UK Grocery Retailing UK Grocery Retailing 5 12.8% of all household spending Split into 4 sectors: Convenience stores Convenience stores Traditional retail and developing convenience stores Traditional retail and developing convenience stores Supermarkets & superstores Supermarkets & superstores Alternative channels Alternative channels

4. Rob Grant’s Strategy Analysis Framework: 1. The Firm’s Goals & Values M.O.S.T. Mission: “ to create value for customers to earn their lifetime loyalty” 6 “ to create value for customers to earn their lifetime loyalty” 6 Objectives 7 : 1. To be a successful international retailer 2. To grow the core UK business 3. To be as strong in non-food as in food. 4. To develop retailing services - such as Tesco Personal Finance, Telecoms and Tesco.com 5. To put community at the heart of what we do.

5. 1. The Firm’s Goals & Values M.O.S.T. Strategy 8 : “Strategy is the configuration of the people and assets of an organisation to maximise its competitive position.” “Strategy is the configuration of the people and assets of an organisation to maximise its competitive position.” 1. What business are we in? 2. How are we going to compete? Tactics 9 : 1. Core UK 2. Community 3. Non-food 4. Retailing Services 5. International

6. 2. Resources & Capabilities Group revenue (H1 2009/10) - £27.8bn 10 Debt set at £8.5bn by end of H2 10 2,362 stores in UK 11 286,394 members of staff in UK 11 2008 - brand worth £8.6bn 12 Solid manufacturing capability Good product development Strong balance sheet 22 new stores opened in 2009 13 Tesco have 26 DC’s 14 3. Structure & Management Systems The Board The Executive Committee The Finance Committee The Compliance Committee Management

7. 4. The Industry Environment BUYER POWER High number of buyers Buyers important as collective Low switching costs Unable to dictate to Tesco SUPPLIER POWER High number of suppliers No unique products Low supplier control Need for good supply RIVALRY Highly competitive market 3 main competitors Tesco – market leader Many can ‘do what they do’ Tesco lowering prices & increasing product quality and range THREAT OF SUBSTITUTION Some alternatives:  Online  Local suppliers  Independents Overall quite low BARRIERS TO ENTRY Much time and money needed Key players well established Tesco have a strong position & can preserve it Economies of scale Regulatory boundaries

8. Competitor Analysis 15 Asda 16.3% market share Lower price range Morrisons 11.3% market share Lower price range Tesco 30% market share Sainsbury’s 16.0% market share Higher price range Source of competitive advantage Narrow Broad Cost Differentiation

9. Stakeholders 1. External CustomersCreditorsSuppliersRegulatorsCommunityCompetitorsNGOGovernment Trade Unions Media 2. Internal ShareholdersEmployees

10. Stakeholders & Communications Issues 1. Customers Economic issueTesco introduction of new discount brands confusing customers 16 2. Suppliers Economic issueTesco communicating wrongly regarding reductions 17 3. Regulators Legal issueStrained communication between Tesco and the Competition Commission 18 4. Community Social issueNo response to negative community views 19 5. Competitors Ethical issueTesco antagonise Asda with adverts 20 6. NGOEthical issue CIWF attack Tesco over £1.99 chicken 21 7. Shareholders Economic issueCommunication breakdown over pay & bonuses 22

11. Media Coverage StoryDateTitleSource 110.02.2008Tourist with pneumonia left stranded after travel policy row 23 The Observer (page 17) 227.02.2008Tesco under fire on both sides of Atlantic 24 The Times (page 54) 329.06.2008Are we falling out of love with Tesco? 25 The Observer (page 24) 402.12.2008Even Tesco feels the pinch as customers defect to Asda 26 Evening Standard (page 7) 516.10.2009Tesco replace ‘Bogof’ with buy one get one free – later 27 The Telegraph (page 13) 628.10.2009Tesco-bank-to-create-1000-jobs-in- Newcastle 28 Retail Week (online) 710.11.2009Tesco strikes partnership with DreamWorks 29 Retail Week (online)

12. Media Coverage StoryDateTitleSource 110.02.2008Tourist with pneumonia left stranded after travel policy row 23 The Observer (page 17) 227.02.2008Tesco under fire on both sides of Atlantic 24 The Times (page 54) 329.06.2008Are we falling out of love with Tesco? 25 The Observer (page 24) 402.12.2008Even Tesco feels the pinch as customers defect to Asda 26 Evening Standard (page 7) 516.10.2009Tesco replace ‘Bogof’ with buy one get one free – later 27 The Telegraph (page 13) 628.10.2009Tesco-bank-to-create-1000-jobs-in- Newcastle 28 Retail Week (online) 710.11.2009Tesco strikes partnership with DreamWorks 29 Retail Week (online)

13. Strategic Challenges & The Future of Tesco 30 Future challenges: Meet higher targetsMeet higher targets Reduce carbon emissionsReduce carbon emissions Sustainable products into mainstream Revolution in green consumption Zero carbon footprint Sustainable retail