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Tesco versus Sainsbury's: Growth Strategies and Corporate Competitiveness

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In 2008, the UK-based international food and general merchandising retailer Tesco reached a market share of about 30% in the UK, roughly the same as its rivals Sainsbury’s and ASDA combined. Tesco has greatly diversified, extending its business lines from food into non-food, clothing, financial services, and telecommunications. It ranks sixth in the international retail market behind Wal-Mart (US), Carrefour (France), Home Depot (US), Metro (Germany), and Royal Ahold (Netherlands).
Tesco was not always the dominant player it is today. In 1990, it was a mid-sized food chain far behind its rival, Sainsbury’s. Starting in the 1990s, it pursued a broad set of growth initiatives, steadily increasing its market share and gaining importance. In 1995, Tesco surpassed Sainsbury’s to become the UK's market leader. Today, Tesco is the clear market leader. How did that happen? Why was Tesco so successful in growing sales and profits, while Sainsbury’s could not keep pace? Where did the competitive actions of these firms differ? Let us start with a close look at their origins.
   
type book chapter (English)
   
keywords case study, corporate competitiveness, RoCC, growth, retailin, food, diversification, alliances, M&A
   
book title Strategic Management: Competitiveness & Globalization: Concepts and Cases
date of appearance 2011
publisher Cengage Learning (London)
ISBN 978-0538753111
page(s) 377-393
citation Kreutzer, M., & Lechner, C. (2011). Tesco versus Sainsbury's: Growth Strategies and Corporate Competitiveness. In Strategic Management: Competitiveness & Globalization: Concepts and Cases (pp. 377-393). London: Cengage Learning. - ISBN 978-0538753111.