Post on 28-Mar-2015
Tesco Stores (Malaysia) Sdn Bhd
Prepared by:
Noor Ulfah Muhamad Zin 808504
Mohd Fhadli Mohd Fudzi 808493
Overview of Retail Industry in Malaysia
Tremendous growth since 1980s Around 400 retail outlets in Malaysia Foreign-owned hypermarket are fast gaining popularity in
Malaysia
1st Qtr; 7.90%
2nd Qtr; 5.60%
3rd Qtr; 9.80%
4th Qtr; 6.10%
Sales growth rate for the year 2010
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Tesco: Then and Now
Tesco History
Founder: Jack Cohen in 1919 based in UK First product: Tesco Tea First store: Opened in 1929 in Burnt Oak Fourth-largest retailer- measured by revenues (after Wal-
Mart, Carrefour and Metro) and second-largest retailer- measured by profits (after Wal-Mart)
Tesco have 14 market all over the world including UK Leader in 5 countries: UK, Korea, Ireland, Thailand and Hungary
UK
R.O. Ireland
Czech Republic
Poland
Slovakia Hungary
Turkey
Thailand
Malaysia
Japan
Korea USA China
Tesco Stores Worldwide
India
Comparison of Tesco market around the world
Tesco Stores (Malaysia) Sdn Bhd
Company Overview Incepted on 29 November 2001 Strategic alliance-Tesco PLC UK with local conglomerate, Sime
Darby Berhad of which the latter holds 30% of total shares First store in Malaysia-Puchong, Selangor (May, 2002) Currently operates 33 Tesco and Tesco Extra stores Acquired Makro Cash & Carry in Malaysia (Dec 2006) and
rebranded to Tesco Extra 2009-Tesco as the number 1 Hypermarket in Malaysia.
Overview of Tesco Stores Malaysia Sdn Bhd
Tesco partner with Sime Darby
First Tesco store opened at Puchong
Launched Tesco own brand, TescoValue
Tesco Malaysia launches its own house brand, Tesco Choice
Tesco opens 4 more stores which at Ipoh, Shah Alam Kajang and Banting
Acquired Makro Cash and Carry
Tesco launched ClubcardTesco launched Tesco Extra
Tesco launched Green Clubcard and Green BagsTesco launched 50 Basic Needs Guaranteed Not Beaten on Price
Tesco number 1 Hypermarket in MalaysiaTesco launched Tesco Light ChoicesTesco launched Tesco - RHB Credit/Debit Card to consumers
TESCO Malaysia: Adoption of strategy
• Everyday Low Price
• 50 Basic Needs guaranteed not beaten on prices
• To create value for customer to earn their lifetime loyalty
• Core UK business• Non-food
business• Community• Personal Finance
• Club card• Green club card• Own brand value• Home brand:
Tesco Choice
Low Price strategy
Customer Focused strategy
Diversify strategy
Growth strategy
TESCO Malaysia: Management
Tesco PLC has appointed Tjeerd Jegen as chief executive officer (CEO) for Malaysia from April 26 2010
Jegen replaced Chris Bush, who has taken over the helm at Tesco Thailand
Jegen will be responsible for all areas of the business, from operations to marketing, finance and corporate affairs, involving 33 stores and over 11,000 staff
To this appointment, Jegen was the chief operating officer for Thailand’s Tesco Lotus.
Jegen began his retail career in 1995 when he joined Royal Ahold as management trainee
TESCO Malaysia: Business Operation Operates retail stores for fresh food, groceries, household
needs, and apparel in Malaysia Employs nearly 13,000 employees Operates 33 stores and in two formats. These are:
i. Tesco Hypermarketii. Tesco Extra Hypermarkets
Tesco and Tesco Extra format
TESCO TESCO Extra
Current Tesco offer of:Low pricesBroad rangeGreat customer serviceProduct qualityStrong mall offer
With Extra:Provides products and services focused for small businesses Bigger pack sizesSpecial trolleys Special checkoutsDedicated business development teamEnhanced facilities
Competitors and Competitor Analysis
Hypermarket Competitor AnalysisBackground
•Offer products such as grocery product, clothing, consumer goods and household appliances besides these commodity products•Concept of fresh quality product at discounted price and direct from producer to customer
•Offer customers merchandise of better value especially on apparels•Extends to financial services, restaurantoperations and shopping centre development
•Offer variety of products at the lowest possible prices•Offer range of local merchandise, fresh local fruits, vegetables, seafood within wet markets
•Wide range discounter, single focus on low income Malays•Limited choices
Comparison of market share between hypermarket in Malaysia for 2010
30%
24%
22%
15%
9%
Market Share of hypermarkets in Malaysia
TescoGiantJuscoCarrefourOthers
Tesco
Giant
Jusco
Car-refour
Others
Source: Planet Re-tail Stars@2010
SWOT Analysis
Strengths Weaknesses
Own house brand-Tesco Choice Competitive pricing strategy Customer loyalty/relationship Acquisition of MakroStrong hypermarket format
Dependable of UK business Burden of higher cost Foreign brand
Opportunities Threats Have ready customers-low and mid-income householdsExplore into new location in MalaysiaDiversification to maintain UK business
Stiff competition within industryChanging in customer tastesGovernment policies