The former Speaker of the House of Representatives Thomas "Tip" O'Neill is widely remembered for his observation that "all politics is local."
As it turns out, the CEO of Tesco, Sir Terry Leahy, has similar views when it comes to building a global retail brand. Speaking at the first World Retail Congress (www.worldretailcongress.com) in Barcelona last week, Sir Terry listed a number of important lessons learned that have enabled Tesco to achieve success in countries where it has opened stores.
Lesson number one, he said, is "recognize that customers and cultures are different. I don't try to run my business according to some blueprint drawn up at HQ. I trust local managers to manage and to know what their customers want."
To that point, he said, "Our aim is to be the best local business in each market in which we operate. Best local trumps second-rate international every time."
Tesco's adaptability to local needs extends to store formats, as well, he said. By operating stores of different formats, Tesco is able to more quickly build a presence than if it were to stick with a cookie cutter approach.
"Be prepared to spend a long time building up the brand," he said. "We, for example, don't use the Tesco brand in every country. In Thailand, we are Lotus. In Korea, Homeplus. And in the U.S., it will be Fresh n' Easy. We do what is right for each market and what our customers tell us they want."
Ultimately, he said, it always comes back to the consumer. "If you follow customers - by which I mean if you really find out what they want and work very hard day and night to give it to them - then you will automatically find your way to the new opportunities that are out there," said Sir Terry.
The move to a global economy is a positive development on the whole, according to Sir Terry. Throwing up barriers through protectionist policies ultimately wind up hurting the very people they are intended to help, he said.
"The new anti-globalization we hear about is often just very old anti-business sentiment spruced up with a lick of paint for the twenty-first century. The fact is that without profit, we cannot pay for any of the things that citizens want - hospitals, schools, welfare. All my experience is that rather than limiting the choices consumers have by deciding on their behalf what is good for them, if you give them proper information they have a pretty unerring instinct for arriving at the right decisions on their own," he said.
Discussion Questions: What is your take on Sir Terry Leahy's observations as to what it takes to build a successful global retail brand? What do you think it means for Tesco's plans for the U.S.?