Abstract

The case focuses on UK-based retailer Tesco’s strategies in the Turkish market. It discusses Tesco’s international ventures and elaborates on some of the strategies that it followed in the non-UK markets. Tesco entered Turkey in 2003 by acquiring the Kipa Kitle Pazarlama Ticaret ve Gida Sanayi AS (Kipa) chain of supermarkets and operated under the name Tesco Kipa. It started operating hypermarkets and then introduced other format stores in the country. It opened Tesco Express stores which were smaller than hypermarkets, and sold a wide range of food products. To cater to the needs of shoppers who preferred to shop at open air shops and small mom-and-pop stores called bakkals, Tesco Kipa opened smaller stores called supermarkets. It also operated through Kipa Extra stores, which were larger than hypermarkets. Tesco Kipa initially operated in the Izmir region and later expanded to other regions. It localized its operations by offering products preferred by the local people. In spite of its best efforts, Tesco did not manage to become one of the leading players in the market and its market share was at just 1% as of 2011. With Tesco closing its stores in Japan due to poor performance, analysts opined that it might also exit Turkey soon. However, Tesco continued to expand in the country and acquired Ardas Supermarket chain in November 2011. It remained to be seen if Tesco would be able to succeed in the market or would make an exit.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Evaluate Tesco’s globalization strategies.
• Study and analyze the entry and expansion strategies of Tesco in Turkey.
• Examine how Tesco localized its retail practices in Turkey.
• Examine the challenges faced by Tesco in Turkey.
• Understand the entry and expansion strategies of a retailer.

Keywords

Globalization, Joint Venture, Entry strategy, Expansion strategy, Retail, Retail in Turkey, Tesco, Competitors, Unorganized Retail, Market entry, Store formats, Product assortment