The paper "Reasons behind Tesco’ s International Strategy" is a perfect example of a business assignment. According to Lowe and Wrigley (2010), one of the major reasons for Tesco supermarkets going international was a problem in its local UK market. The UK had become well developed and was fast becoming saturated therefore meaning that Tesco’ s future growth would be limited. Most companies in developed countries have a growth imperative to search for new markets? Earlier other companies like FedEx which seemed to be struggling had strategically acquired flying rights over Asia a strategic move that is rewarded by impressive growth (Deresky 2006).
According to Deresky (2006), a new foreign market gives an organization a new life as it moves it to an earlier stage of its lifecycle. This proactive move to go international has been associated with the success of such firms as Avon, FedEx and McDonalds. They now perform well but had been struggling before becoming global corporations (Deresky 2006). International markets provide an opportunity for firms like Tesco which was making huge profits an opportunity to invest. It is also an opportunity to make use of other resources including technology, management and machinery. According to Herald Scotland (2005) slowing population growth rates in the UK were among the reasons for Tesco's proactive internationalization strategy.
The UK alongside other developed countries faces an aging population problem (Poulter 2009). According to Herald Scotland (2005), the Total Fertility Rate in the UK stands at 1.94 below the 2.1 population replacement level. This has the effect of the mean age of the population increasing every year and more people dying than those being born. This has the effect of meaning the market is contracting while purchasing power goes down as more people move to pension schemes. For a very long time, the UK market has been experiencing prolonged periods of low food inflation.
According to Data monitor (2010), the largest percentage of sales volumes in supermarkets is accounted for by food sales.
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