Tesco PLC: Strategy for India

As multinational enterprises expand operations in emerging economies, identifying and responding to unique marketing challenges may require strategy that focuses on local adaptation and global integration on a country by country basis. In March 2014, Tesco PLC (Tesco), the largest retailer in the United Kingdom and the third largest supermarket group in the world, has signed an agreement with Trent Hypermarkets, the retail division of the Tata Group, a leading Indian business conglomerate, for setting up a 50:50 joint venture (JV) in Indian retail. Tesco is committed to investing £85 million (US$110 million) as its share of capital. As it gets down to the basics of operating the JV, the management of Tesco, head quartered in London, United Kingdom, is facing three major dilemmas: How should Tesco sustain the advantage of being the first global multi-brand retailer to be allowed to invest in India? How should it fine-tune its tried and tested global business model to suit Indian retail? How could the company avoid the kind of failure it had experienced in the U.S. market, which it exited in April 2013?

The case can be used to discuss how MNEs may gain a foothold in emerging economies and the challenges associated with preparing for and managing joint ventures. The case can also be used in courses on international marketing and retailing to gain insight into differences in international marketing strategy adopted by the same retail MNEs in different countries in the same period of time.<br><br><ul><li>To analyze the evolution of the mandate of the subsidiary of a multinational enterprise in an emerging economy.</li><li>To evaluate the pursuit of opportunities by a subsidiary and its response to institutional changes in an emerging economy.</li><li>To develop skills in analyzing the internationalization strategy of a global retailer.</li></ul>

• Emerging markets
• joint ventures
• global business model
• India