TESCO, CEO Philip Clarke and Japan

January 12, 2012 | In: Kiyoko Naish

Tesco plunges on profit warning

That is a FT headline today. Why am I writing about TESCO? There is something about it. Last summer after a new CEO Philip Clarke took the place from Terry Leahy, he decided to sell its loss-making Japanese business. This news hit the headlines of many newspapers in the UK. They spent 8 years to build up the business under Sir Leahy but Philip Clarke didn’t see any sustainability and the growth in the future. He wanted to shift their focus to China, where the growth would be quickly and easily visible. That was very disappointing to me. Did he know anything about Japan/Japanese market/Japanese consumers before having made the decision? It didn’t look like so. I really admired Sir Leahy who had a vision and patience to keep the shop going in Japan for eight years. Only if they had a good research company, a business consultant and a competent team of British/Japanese management, it would have been a different story. I would like to discuss it later.

Today I see this profit warning news from TESCO and reinforced my thought; Philop Clarke may not be as good as Sir Leahy. His strategy for growth seems to me rather short-sighted. What do you think?

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