Leadership Transition at Tesco – The Challenges in Store for Dave Lewis

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Excerpts

In the first decade of the 21st century, Leahy played a pivotal role in establishing Tesco as a major international retail company. He designed an ambitious growth strategy that directed the company’s expansion efforts in its core UK business, retailing services, international operations, and non-food business. Developing the non food business was a challenge for Leahy as nothing significant had been achieved earlier in this segment. Slowly, he took Tesco into other businesses like electronics, toys, sports equipment, cookware, and home furnishings. Expanding the international agenda of the company Leahy established superstores in Thailand in 1998, South Korea in 1999, Taiwan in 2000, Malaysia in 2002, China in 2004, and the United States in 2007. One of the significant steps in the expansion of the company was the acquisition of the convenience store chain T&S Stores plc, which owned 870 stores.

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Despite the huge success Leahy achieved at Tesco, he opted for voluntary retirement in March 2011. According to him, he was leaving the business in a much better condition than it had been when he took over in 1997. He made Tesco the only major international retail giant from the United Kingdom and decided in 2011 that it was time for him to leave. However, critics questioned the timing of the resignation as Tesco was not doing well in its US business........

For the year ending February 26, 2011, same store sales remained flat after dropping 0.7% during the last quarter. The trend continued and during the next quarter ending May 28, 2011, they were down 0.1%. Like-for-like sales in the UK had fallen by 0.9% in the three months ending August 27, 2011. This was the company’s worst performance in 20 years . (Refer to Table I Tesco’s Like-for-like sales)......

In September 2010, after the Shree Niketan Matriculation School had been functioning successfully for four years, Vish at his monthly meeting with the administration and coordinators discussed the feasibility of adding CBSE education also under the brand umbrella. He had seen that there was a demand for CBSE education even when he had set up the existing school, and in four years, this demand had grown many times over.......

Exhibit I:Tesco – Competitors in the UK
Exhibit II: Tesco’s Values
Exhibit III: OrTesco’s Strategy
Exhibit IV: Tesco around the World
Exhibit V: Tesco Steering Wheel
Exhibit VI: Tesco Five-Year Financial Summary (2005-2009)
Exhibit VII: Tesco Five-Year Financial Summary (2010-2014)
Exhibit VIII: UK Supermarkets – Market Share from Apirl 2013 to June 2014