Tesco in the Chinese Food Retail Market - Dissertation Example

Most importantly, I would like to take this opportunity to express my gratitude to my parents who offer me the greatest support and encouragement.Table of ContentsTable of Contents 5List of Tables 7List of Figures 81.0 Introduction 91.2 Research Question 132.0 Literature Review 142.3.1 PEST 212.3.2 SWOT 262.3.3 The Five Forces 272.4 Sustainable competitive advantage 322.5 Factors influencing strategies for achieving a competitive advantage in China 353.0 Methodology 404.0 Result 51 4.1 Carrefour Supermarkets 54Organisation Overview 54Operations and Business Strategy 55Domestic Competition 57Competitive Advantage 584.

2 Wal-Mart 58Organisation Overview 58Operations and Business Strategy 59Domestic Competition 60Competitive Advantage 605.0 Discussion 62Organisation Overview 62Operations and Business Strategy 63Domestic Competition 65Competitive Advantage 656.0 Conclusion 687.0 References 70List of TablesTable 1. The amount of sales and the amount of chain storesof Carrefour in China Page 33List of FiguresFigure 1.0 Porter's Five Forces Model (Porter 2001). Page 201.0 IntroductionChina's admittance into the World Trade Organisation (WTO) in 2001 opened up the Chinese market to the rest of the world.

From the end of 2004, the Chinese government began lifting restrictions on foreign retailers, which enabled retail operations that were 100% foreign owned to operate (LaSalle 2005, Chen 2006, Tao 2006). This opportunity was obviously seized upon by retailers like Tesco, Carrefour and Walmart who dominate the foreign-owned food retail market. The Chinese market is particularly attractive as it is not. Introduction China’s admittance into the World Trade Organisation (WTO) in 2001 opened up the Chinese market to the rest of the world.

From the end of 2004, the Chinese government began lifting restrictions on foreign retailers, which enabled retail operations that were 100% foreign owned to operate (LaSalle 2005, Chen 2006, Tao 2006). This opportunity was obviously seized upon by retailers like Tesco, Carrefour and Walmart who dominate the foreign-owned food retail market. The Chinese market is particularly attractive as it is not homogenous and encompasses numerous target markets which represent purchasing power for retailers.

This is particularly true of the markets based in the urban areas, as it is reported that there is an income disparity between rural and urban customers. The urban per capita income is three times more than that of rural areas (LaSalle 2005, Chen 2006, Tao 2006), which presents profit to the food retailers. The opening up of the markets in China has also introduced competitive advantage to the Chinese market. Prior to 2004, foreign owned companies had to form joint ventures with Chinese companies and were limited to owning a 65% stake in the business (LaSalle 2005, Chen 2006, Tao 2006).

They also had restrictions on the number of stores that could be opened in a geographical region, which gave the domestic retailers a competitive advantage. Domestic retailers had access to the entire Chinese market, and as a result they also had the monopoly on the knowledge.