Croatia as a Proposed New Market
According to Business Monitor International’s retail report of Croatia’s first quarter in 2014, Croatia’s retail market is looks very active and promising. With Croatia’s entrance to the European Union on July 1, 2013, many multinational companies have decided to take advantage of the growing economy of Croatia. Other European Union countries, like the Czech Republic, Slovakia, Hungary, Poland, and Turkey, have successfully welcomed TESCO. Expanding TESCO into the Croatian marketplace would have similar success and opportunities due to TESCO’s previous experiences in the region.
Macro-Environmental Characteristics of Croatia
Croatia is located in southeastern Europe, bordering the Adriatic Sea, Slovenia, Hungary, Bosnia and Herzegovina, and Serbia. The population according to the 2013 census was 4,475,611 (CIA, 2013). The majority of the population, over 40%, is between the ages of 25 - 54 years old. This age range is the target consumers for TESCO in Croatia. Croatia’s transportation systems include multiple airports, railways, paved roadways and expressways, and ports and waterways. This would give TESCO multiple options to import and export goods. According to The World Bank, the Gross Domestic Product of Croatia in 2012 was 20,964 USD. It has been increasing steadily since 2004, with the exception of a decrease between 2008 - 2010.
TESCO Plc, a British-based retail giant, founded by Jack Cohen in 1919. Today, the company operates in 12 countries and employes more than 530,000 people around the world. TESCO operates in six different formats including Tesco Extra, Tesco Superstores, Tesco Metro, Tesco Express, and Tesco One Stop.
According to Figure 1, the the total number of stores at the end of 2013 was 6,784, an increase of 735 stores from 2012. Openings in the first half of the year were similar to those in the second half of the year.
Source: TESCO Plc.
Figure 2 takes a closer look at the services provided in Europe. Each European country has multiple hypermarkets, such as Tesco Extra and Tesco Superstores. They also have smaller marketplaces, such as Tesco Metro, Tesco Express, and Tesco One Stop to meet the needs of their consumers.
Source: TESCO Plc.
The PESTEL Analysis looks at six macro-environmental factors. The factors are Political factors, Economic factors, Social factors, Technological factors, Environmental factors, and Legal factors. These factors all have an effect on the success of TESCO’s new market ventures (Parragh, B. 2011).
Croatia, as a parliamentary democratic country, is a member of the European Union, so it will have to abide by EU standards of operation. By signing the Dayton Peace Accords in 1995, Croatia has a high level of security and protection.TESCO will also have to follow employment laws and regulations set by the Croatian government. TESCO is known for employing a diverse staff, so following employment...