Profit Models of Tesco and Carrefour - Essay Example

Cohen named the brand Tesco Tea even before the business acquired the name Tesco. The name Tesco was drawn from the initials of a partner in tea suppliers TE Stock well and Jack’s surname Cohen. The first Tesco supermarket in the UK was opened in 1929 in Burnt Oak and in 1932; Tesco became a private limited company. This enabled the company to expand its operations using the additional capital from shareholders. In 1934, Jack Cohen acquired a plot in Edmonton to establish Tesco’s headquarters and a warehouse (Tesco Plc, 2012).

Tesco’s stocks were first sold at the Stock exchange in 1947 at a price of 25p. The entry into the stock exchange was a huge step in terms of additional capital and Tesco’s competitiveness. The first Tesco supermarket was opened in Maldon in 1956. Tesco made a huge step in 1960 when the company acquired 212 stores in Northern England and 144 stores between 1964 and 1965. Tesco opened its first petrol station in 1974 and by 1982, Tesco’s annual sales had exceeded 2 billion. A plan to build 29 additional stores began in 1987 and the first Tesco Express was established in 1994.

Today, Tesco has established its operations in 14 markets in Europe, Asia, and the United States. In these markets, Tesco develops its competitiveness through pricing strategies, high-quality products, a wide range of products, and constant innovation. Tesco is the third-largest retailer globally after War-Mart and Carrefour (Tesco Plc, 2012). 1.1.2 Carrefour in China The Fournier and Defforey families established the Carrefour Company in 1959. The company opened its first supermarket in Haute-Savoie in the following year.

Carrefour explored a new concept of hypermarkets in 1963 and established its first hypermarket in Sainte-Geneva ve-des-Bois in the same year. Another hypermarket was opened in Belgium in 1969 and in the following year, Carrefour was listed on the Paris stock exchange. The first Carrefour in Spain was established in 1973, Brazil hypermarket in 1975, and in Argentina in 1982. Other hypermarkets were opened in Taiwan, Italy, Turkey, Mexico, and Malaysia in the 1990s. Carrefour entered the Chinese market in 1995 and managed to open 100 stores in a span of 12 years.

By 2006, Carrefour had 40, 000 employees, 98% of which were Chinese. Carrefour was serving over 300 million customers annually. The Carrefour group purchases products from about 22,300 suppliers from China. Carrefour entered the Chinese market through a joint venture with Zhong Chuang to form Jia Chaung (Carrefour, 2012). Changes in the Chinese market have caused Carrefour to evaluate and adjust its management strategy from time to time. The management strategy differs across various regions in China due to differences in market characteristics.

Carrefour’s aim is to be the preferred retailer in every market. Carrefour works towards ensuring that each store attracts and retains its customers. This is achieved through offering high-quality products, competitive prices, and high-quality customer service. The company analyses customers’ needs in every market and provides products and services that meet those needs effectively. Social commitment and good employee relations have also helped Carrefour to expand its client base in local and international markets.

The company has adopted a client-oriented culture that enables it to understand its customers and therefore offers better services.