Globalisation Management

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Study of failure’s factors of Tesco’s Fresh & Easy stores in USA |

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MAILLET Cécile 630058642

POURTAU Julien 630058643

GAÏGA Marine 630058641

Executive summary :

Tesco’s sub-brand “Fresh & Easy” failed in the United-States. It accumulated significant debts and the brand was forced to sell.

Such a failure can be explained by the unprecedented crisis which has hit the U.S, altering both the market and buying purchase. This crisis was detrimental to Tesco as it weakened its investments and thus also its benefits. However even if this could be an explanation for the failure, it cannot be said to be the only reason for it. Numerous bad choices were made by Tesco which were more fatal.

The first issue came from the entry strategy. On one hand the competition was misjudged resulting in poor positioning of Tesco among other competitors; on the other hand the implantation strategy followed by the brand was poorly chosen. Neither stores’ location nor costumers analysis were remained consistent with earlier studies. The second and last problem arises from the choice of model. Tesco wanted to keep the British model instead of adapting to a US one but the difference between the two models was too significant and therefore it failed to function as Tesco had hoped. The products and even the image of the brand were different to what the American customers were expecting. All of these issues are responsible for the failure of Fresh & Easy which lead to the sale of the sub-brand. This is why this report needs to provide advice to try and understand what could have been done to avoid this situation.

Introduction :

In 2007 Tesco, the famous British company known to be the leader among the UK’s retailers, decided to enter the US market under a new name; “Fresh & Easy Neighborhood”. Billions of pounds were invested into the project which was aimed mainly at the state of California (Graham Ruddick,...