THE PRINCE

The Prince

The Prince

PART A

Tesco

Tesco Plc - Brief Business Summary

The British Group, Tesco Plc is considered as the king of supermarkets in Britain (yahoo finance, 2007). Its business is related to the small grocery stores under the Tesco Metro brand name, big supermarkets outside cities (Tesco Extra) and 24-hour stores. Its stores are not limited to food sector but also to provide books, CD/DVD/mini-discs, hi-fi and household appliances, household equipment, flowers, wine, apparel and many other items. In January 2003, Tesco takes over its key competitor in the British Territory, T & S Stores. Currently, it employed 270,800 fulltime employees worldwide. Tesco has adapted rapid technological changes to boost its sales. Such as its on-line sales site - Tesco.com, is now heavily contributing to its profits in recent years. The Group currently holds almost 1,988 stores in the UK and 1265 stores outside UK (Annual Report, 2007). Today, its market capitalization has reached £36.60 bln. (Reuters, 2007)

British Operations

The British operations of Tesco's stores are divided into five formats, and are differentiated by size and the range of products sold. (Annual Report, 2007)

Tesco Extra - hypermarkets that stock all of the product ranges that are available at Tesco and are mostly out of the town with free car parks. (Totalled 147 in Feb, 07).

Tesco superstores - standard large supermarkets, stocking groceries plus a much smaller range of non-food goods than Extra and mostly located in suburbs of cities or on the edges of large and medium-sized towns. (Totalled 433 in Feb, 07).

Tesco Metro - Smaller than Tesco superstores but bigger than Tesco Express in size and are mostly located in city centres and on the high streets of small towns or villages). (Totalled 162 in Feb, 07.

Tesco Express - neighbourhood convenience shops in busy city centre districts and small shopping precincts in residential areas, and on petrol station forecourts, with stocking mainly food with an emphasis on higher-margin products. They also provide financial services: a joint venture with the Royal Bank of Scotland enables it to offer life insurance and general insurance (home, car, pet, and travel), credit cards and advantageous loan and savings schemes. (Totalled 735 in Feb, 07).

One Stop - Very smallest Tesco stores and the only category which does not include the word Tesco in its name. (Totalled 506 in Feb, 07).

Tesco Homeplus - first opened in October 2005, offer all of Tesco's ranges except food in warehouse-style units in retail parks. (Totalled 5 in Feb, 07).

Non-British Operations

Tesco Group is currently operating in 13 countries worldwide. Brief summary of its world operations is as follows:

Country

Year entered

No. of Stores

Turnover

(£ million)

China

2004

47

552

Czech Rep.

1996

84

807

France

1992

1

N/A.

Hungary

1994

101

1,180

Rep. of Ireland

1997

95

1,683

Japan

2003

109

287

Malaysia

2002

19

247

Poland

1995

280

1,135

Slovakia

1996

48

498

South Korea

1999

81

2,557

Thailand

1998

370

1,326

Turkey

2003

30

256

United States of America

2007

6

N/A.

(Broker pack, 2007)

(N/A.: Data Not Available)

Evaluation of the Financial Management Policies of Tesco Plc over the Last Five Years

A critical aspect of financial management is the management of funds which is simply meant dealing with management of money matters and requires efficient use of economic resources such as capital ...