SWOT Analysis of Tesco in UK: Strengths; Tescos reputation for low cost products, can gain fair-trade cotton

clothing substantial market share in the UK. Tescos growth in the insurance sector provides financial strength to Tesco in UK. Another important factor is the increasing growth of online sales and fair-trade cotton clothing could be included in these sales. The Brand recognition of Tesco in UK is an important strength and will help fair-trade cotton clothing. Weaknesses: The weaknesses of Tesco are that it is still largely dependent on UK for its sales. it is doubtful if it will support fair-trade cotton clothing objectives. The business model that Tesco is using is suitable for UK and not for the rest of the world. Even though Tesco sales are growing from low priced items there is fall in sale of non-essential and high priced products. If fair-trade cotton clothing are perceived as non-essential, its sales objectives will not be achieved. Tesco has suffered from bad debt, credit card arrears and household insurance claims. This is financially debilitating. Opportunities: Tesco can exercise a high degree of buying power to ensure that it has economies of scale in its fair-trade cotton clothing line. The growth opportunities n Europe and Asia provides excellent opportunities for growth. Most importantly, the growth of online sales shows excellent opportunity for increasing the sales of Tesco. Threats:

Increasing fair-trade cotton clothing prices can lead to lower sales and lower profits for Tesco. Change in consumer buying patterns n the UK because of change in technology can lead to loss of customers in UK.

SWOT Analysis of Tesco in Germany: Strengths; The Tesco brand recognition gives it a good start for fair-trade cotton clothing in Germany. The Germans are known to avoid uncertainness, ambiguity and unquantifiable risk. In case of Tesco they are buying from a well recognized brand. The brand value of Tesco will work very well in Germany. Further, the global market place recognition of Retailer of the Year 2008 provides substantiation to the German customer about fair-trade cotton clothing. Weaknesses: German financial industry is very circumspect and will consider the debt of Tesco in the UK before it gives finance for store expansion for fair-trade cotton clothing in Germany. The reputation of Tesco for acquiring competing store chains may also be held against the company in Germany. Acquisition is a risky move, and Germans are averse to risk. Opportunities: Fair-trade cotton clothing in Germany has good opportunity because it has the endorsement of Tesco brand; it has the marketing channels of Tesco, and

the backing of an excellent product mix. If fair-trade cotton clothing offers a good product for money it will get a good reception in Germany. Threats: The low priced fair-trade cotton clothing could lead to price wars. In addition, there can be low profitability because of competitive moves for Tesco. Finally, international competitors like Wal-Mart could add a cotton line in Germany to compete with Tesco.

BIDGET SHOING FAIR-TRADE COTTON CLOTHING LAUNCH EXPENSES Expense () In Items Product Sourcing Expense Cost of Display Cost of Advertising Cost of Public Relations Cost of Extra Sales Persons Cost of Launch Events Cost of Endorsements Total Budget for launch of fair-trade cotton clothing Millions 1.2 2.3 250 80 120 70 25 548.5

UNIT FORECAST FOR THREE YEARS BY QUARTER (millions of units) 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter 2 0.6 3 0.9 4 1.2 1 0.8 2 0.5 3 1 4 1.4 1 1.2 2 0.8 3 1.5 4 2

The method of market research used for the plan is the focus group interview. There were forty eight focus group interviews conducted of which 30 were in the UK and 18 were in Germany. Each focus group consisted of Between 12 to 15 participants. Each of these were customers that visited Tesco stores and showed interest in buying fair-trade cotton clothing. The customers were asked question relating to the type of clothing they would prefer to purchase from a Tesco store. There was a number of specific suggestions received from the participants and based on the inputs received from the focus group, the fair-trade cotton clothing line was developed. In addition, the focus group participants were asked the price they would be willing to pay for the products. The inputs from the focus groups helped Tesco in pricing its fair-trade cotton clothing line n both the UK and Germany. Since the focus groups were conducted in the vicinity of Tesco stores, the participants were asked the location in Tesco stores that would be suitable for the display of fair-trade cotton clothing. This enabled Tesco to develop a strategy for placing fair-trade cotton clothing n Tesco stores. The participants in the focus group interviews were asked which method of communications they preferred. There were suggestions received for the media an contents of advertising, internet advertising, advertising on social networking sites, and using e-mails. Further, suggestions were received on the types of promotions most favored by the participants. Ideas were generated relating to the sales persons of fair-trade cotton clothing. Finally,

the focus groups revealed their opinions about the publicity methods that were most credible for them.

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