Tesco SWOT Analysis Sample UK

Parent Company: Tesco PLC

Category: Retail

USP: Tesco is a UK-based multinational grocery and general merchandise retailer. It is the largest retailer in the world by revenue, and second largest by profit. people.

Founded: 1919

Headquarters: Welwyn Garden City, United Kingdom

Tesco was founded in 1919 by Jack Cohen as a group of market stalls. The Tesco name first appeared in 1924, after Cohen bought a shipment of tea from T. E. Stockwell and combined those initials with the first two letters of his surname. The company grew rapidly, and by 1939 had over 100 stores.

The company floated on the London Stock Exchange in 1947 as Tesco Stores (Holdings) Ltd. The first self-service store opened in St Albans in 1950, and the first supermarket in Maldon in 1956. In 1961, Tesco Leicester made an appearance in the Guinness Book of Records as the largest food retailer in Europe, and by 1966 Tesco had established itself as the market leader in the UK grocery market.

The company continued to grow in the 1970s, and by 1979 there were over 500 stores across the country. In the 1980s, Tesco diversified into non-food items such as clothing, furniture, and electrical goods, and by 1985 had become the UK’s largest retailer of these items. In 1995, Tesco opened its first overseas store in Poland, and by 1997 had stores in the Czech Republic, Hungary, and Slovakia. The company also expanded into Asia in 2003, with stores in Thailand and Malaysia.

Tesco is currently the grocery market leader in the UK, Ireland, Hungary, Malaysia, and Thailand. In 2018, the company had revenues of £51.5 billion and profits of £3.2 billion. Tesco has a workforce of over 460,000 people.

Tesco Strengths 

1. Strong brand recognition: Tesco is a well-known and respected brand, with high levels of customer awareness and loyalty. The company has a strong reputation for providing quality products and excellent customer service.
2. Diversified product range: Tesco offers a wide range of products, from food and groceries to clothing, electronics, and home furnishings. This diversification allows the company to appeal to a broad range of customers and to tap into different markets.
3. Strong financial performance: Tesco is a financially strong company, with high levels of profitability and cash flow. The company has a strong balance sheet and is well-positioned to weather economic downturns.
4. Innovative and customer-focused: Tesco is an innovative and customer-focused company, with a history of introducing new products and services that meet customer needs. The company has a strong track record of investing in its online and mobile platforms to provide a better customer experience.
5. Extensive global reach: Tesco operates in 12 countries across Asia and Europe, and is the grocery market leader in the UK, Ireland, Hungary, Malaysia, and Thailand. This gives the company a strong platform for future growth.

Tesco Weaknesses

1. High levels of debt: Tesco has high levels of debt, which leaves the company vulnerable to economic downturns and interest rate rises.
2. Dependence on the UK market: Tesco is heavily dependent on the UK market, with over 80% of its sales coming from the UK. This makes the company susceptible to economic and political changes in the UK.
3. Competition from discounters: Tesco is facing increased competition from discount retailers such as Lidl and Aldi, who are eating into Tesco’s market share.
4. Overseas expansion: Tesco’s expansion into Asia and Europe has been costly and has not always been successful. The company has had to close stores in China and pull out of the US market.
5. High levels of staff turnover: Tesco has high levels of staff turnover, which can impact on customer service levels.

Tesco Opportunities

1. Growth in online sales: Tesco is well-positioned to benefit from the growing trend for online shopping, with a strong online presence and a convenient click-and-collect service.
2. Expansion into new markets: Tesco has an opportunity to expand into new markets, both in the UK and internationally. The company has a strong brand and financial position that would enable it to enter new markets successfully.
3. Increased focus on health and wellness: Tesco could capitalise on the growing trend for health and wellness by increasing its focus on healthy eating and exercise. The company could offer more healthy food options and promote its products as being good for healthier lifestyles.
4. Partnerships and acquisitions: Tesco could look to grow through partnerships and acquisitions, particularly in the areas of online grocery delivery and convenience store operations.
5. Strategic alliances with other brands: Tesco could form strategic alliances with other brands to extend its product range and appeal to new customer groups.

Tesco Threats

1. Economic recession: An economic recession would impact on Tesco’s sales and profitability, as consumers cut back on spending.
2. Competition from online retailers: Tesco is facing increased competition from online retailers such as Amazon, who are eating into Tesco’s market share.
3. Changes in consumer trends: Changes in consumer trends, such as the move towards healthy eating and away from processed foods, could impact on Tesco’s sales.
4. Increased regulation: Increased regulation, such as the introduction of a sugar tax, could impact on Tesco’s profitability.
5. Interest rate rises: Interest rate rises could impact on Tesco’s debt levels and interest payments, putting pressure on the company’s finances.

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