It is oft cited that like individuals companies can have inertia of direction or momentum. If you are successful in something then you will gain confidence, be more risk taking as a consequence & thus more likely to be successful. It is a virtuous circle. For many many years Tescos' was in this enviable position - a very well respected boss continuously rising market share and rapid international expansion. However it does not take much for this postive momentum to halt & reverse. A similar relationship can be observed in reverse; perceived lack of sucess denting confidence, reducing ethusiasm, making the retailer more cautious. This is exactly the situation Tesco finds themselves in at the moment. Their market share is falling significantly - now at it's lowest level for seven years & will have further to fall as their competitors boyed by this news increasingly find their 'mojo'.
So what was the trigger for their change in momentum. Of course only a very complicated analysis would really come close to answering this, but I don't have time for that so let me highlight two ideas. Firstly, as Tescos became more 'emboldened' (Treadgold!) in their international expansion it entered more risky markets and experienced failure (Japan & USA - silly markets for them to enter - poor decisions). & secondly while Terry Leahy was so well regarded he could maintain confidence umong the Tesco family his sucessor Philip Clarke is less well able to do so. This is a shame and doesn't reflect Phillips Clarkes ability, rather his less developed track record.
But while Tescos will diminish they for sure won't disapear - they have a lot more space in the UK than their competitors & will thus stay the UK's largest grocer for a long while yet.
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