David Paez
Explain how products and processes have
to be adapted for international markets
Product adaptation
Product adaptation is the process of modifying an existing product so it is suitable for
different customers or markets. An adaptation strategy is particularly important for
companies like Tesco that export their products or have shops in markets overseas
because it ensures that the product meets local cultural and regulatory requirements.
It is worth mentioning that adaptation is also important for companies that want to
introduce new products but do not have the funds or resources to develop
completely new items.
A clear example of what happens when a business does not adapt correctly to a new
market is Tesco’s failure in america.
There are many factors that made Tesco be unsuccessful in America:
It had a lot to do with a miss-interpretation of the data they had collected. It is always
necessary to be able to understand the context in which data is collected. Although
British and Americans share a heritage and speak the same language, this doesn’t
mean they are the same, in fact, they have wide cultural differences. It is a common
mistake of UK companies trying to break into the US market to think of the USA as
one market. Realistically, it should be viewed more like Europe, the individual states
are not different countries, but their markets can have vast differences not only in
business practices but in cultural attitudes and approach.
Tesco launched on the West Coast of America. Initially in neighborhoods across
California in areas considered to be “food deserts” full of fast food outlets. This
launch was into a society that uses their car way too much and views shopping as
part of their entertainment experience. They might have done better launching on the
East Coast, where populations are denser and there is more pedestrian traffic. Other
British companies have succeeded on the East Coast such as: ‘Topshop’ and ‘Pret’
however rather than a dash for growth which Tesco took, they have gone for a more
gradualist approach.
Analysts say in the US getting the right location is a big part in creating success,
Tesco got this very wrong. Sometimes it found itself opening aspirational stores in
low income areas. It also discovered that finding locations for stores near to its
distribution centre was a problem which suggests a lack of market research on their
part.
Explain how products and processes have
to be adapted for international markets
Product adaptation
Product adaptation is the process of modifying an existing product so it is suitable for
different customers or markets. An adaptation strategy is particularly important for
companies like Tesco that export their products or have shops in markets overseas
because it ensures that the product meets local cultural and regulatory requirements.
It is worth mentioning that adaptation is also important for companies that want to
introduce new products but do not have the funds or resources to develop
completely new items.
A clear example of what happens when a business does not adapt correctly to a new
market is Tesco’s failure in america.
There are many factors that made Tesco be unsuccessful in America:
It had a lot to do with a miss-interpretation of the data they had collected. It is always
necessary to be able to understand the context in which data is collected. Although
British and Americans share a heritage and speak the same language, this doesn’t
mean they are the same, in fact, they have wide cultural differences. It is a common
mistake of UK companies trying to break into the US market to think of the USA as
one market. Realistically, it should be viewed more like Europe, the individual states
are not different countries, but their markets can have vast differences not only in
business practices but in cultural attitudes and approach.
Tesco launched on the West Coast of America. Initially in neighborhoods across
California in areas considered to be “food deserts” full of fast food outlets. This
launch was into a society that uses their car way too much and views shopping as
part of their entertainment experience. They might have done better launching on the
East Coast, where populations are denser and there is more pedestrian traffic. Other
British companies have succeeded on the East Coast such as: ‘Topshop’ and ‘Pret’
however rather than a dash for growth which Tesco took, they have gone for a more
gradualist approach.
Analysts say in the US getting the right location is a big part in creating success,
Tesco got this very wrong. Sometimes it found itself opening aspirational stores in
low income areas. It also discovered that finding locations for stores near to its
distribution centre was a problem which suggests a lack of market research on their
part.
