Case Study 5: Future Strategic Instructions For Tesco
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5. Future strategic directions
1 Restrictive covenants in debt and Infringement claim
In fiscal dimension, Tesco’s debt and other financing obligations contain restrictive covenants, which could not be breached to keep borrowing under its credit agreements. Furthermore, Tesco is subject to some infringement claims, which should be solved to avoid having adverse effect to company’s business.
2 Acquisition – TFS and CPHC
To strengthen the market share and develop potential market, Tesco has to spend some budgets on acquisition for promising companies or suppliers in certain field. For instance, Tesco announced the acquisition of automated catwalk technology from CPHC (Custom Pipe Handlers Canada) Industry. In May 2014, Tesco would acquire the assets of TFS in technological field (Marketline, 2014).
3 Market development:
In order to change the situation of over dependence in the UK market. Opportunities for Tesco supermarket could be captured to develop foreign markets in the condition of sufficient plan and resources in the future.
6. Strategic action based on 4Ps
Product
Although Tesco has massive products diversification, its categories of product lines are still not explicit and the segmentation of business lines is relatively not sufficient compared with its rivalry Sainsbury. Tesco is suggested to segment its product lines into both vertical and horizontal orientations.
In horizontal direction, Tesco should collaborate with reliable suppliers to develop its own