Corporate Governance at Tesco
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Case Code: CGOX011 Case Length: 11 Pages Period: 2004 Pub Date: 2004 Teaching Note: Not Available |
Price: Rs.300 Organization: Tesco Industry: Retailing Countries: USA Themes: - |
Abstract Case Intro 1 Excerpts
Introduction
Tesco, the UK's largest retailer, had been built on the "pile it high and sell it cheap", philosophy. Tesco's operations included convenience and gasoline retailing (Tesco Express), small urban stores (Tesco Metro), hypermarkets (Tesco Extra), and financial services. Tesco, had a profitable online business, and was also one of the more globalized companies in the retailing industry. Since 1993, the company had grown significantly outside the UK, operating more than 300 stores (including hypermarkets) in other countries. Tesco's acquisition of C Two-Network, a small Japanese convenience store operator, marked its entry into the world's second-largest consumer market.
Although food had been Tesco's core business, the company had been actively expanding its nonfood offerings, including clothing, gasoline, travel, financial services, and even residential phone service. Tesco was also challenging rivals J Sainsbury and Wal-Mart-owned ASDA on the fashion front with an exclusive agreement with US clothing brand Cherokee to supply fashions to its stores. To strengthen its presence in the convenience store market, Tesco had bought T&S Stores and had plans to bring them under the Tesco Express banner. In 2002, Tesco generated sales of $96.8 million and reported a net loss of $0.7 million. Tesco had committed itself to high standards of corporate governance by applying the principles set out in the Combined Code. In late 2003, the company introduced changes in its board structure to facilitate the long-term development of board practices...
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