Tesco’s aspiration for multinational status had proved successful. Just about any country they chose to do business in ultimately made them the world’s third largest retailer. Their niche, however, was in emerging economies and they had entered all the emerging economies of the world that they felt were of importance. Japan for many years had been an interest because it was known to be the second largest retail market in the world. When the two existing supermarket chains went up for sale, Tesco decided it was time for entry into the Japanese retail market. Eight years later Tesco would learn its lessons on the uniqueness of the Japanese culture.
Tesco’s motivation for Japan was market share, economies of scale through the changing face of Japan’s shopping and eating habits, and the shifting demographics. Tesco saw an unfulfilled market of a step above convenience store with a fresh produce twist in and around the city of Tokyo. The eating habits of the Japanese were changing, with the population growing older. Tesco spent three years investigating the food buying habits in Japan. As reported in The Guardian, by Mr. Trenchard a Tesco spokesperson states, “We very much go for the model that people [in Japan] shop two or three times a week, and tend to go to quiet neighborhood supermarkets” (McCurry, 2004, para. 11). Justin McCurry reporter for The Guardian in Tokyo attested to the fact that indeed Mr. Trenchard could be correct in the shopping habits of the Japanese population due to the fact of aging. He states, “By 2020, 34 million of its 127 million people will be age 65 and older…” (McCurry, 2004, para. 15). Tesco takes the steps necessary for entering the Japanese market.
Tesco entrance consisted of two mergers and acquisiti...
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