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, Tesco
Value
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 Clubcard
Tesco launched Tesco
Extra
Tesco launched Green Clubcard
and Green Bags
Tesco launched 50 Basic Needs
Guaranteed Not Beaten on Price
Tesco number 1 Hypermarket in
Malaysia
Tesco launched Tesco Light
Choices
Tesco launched Tesco - RHB
Credit/Debit Card to consumers
TESCO Malaysia: Adoption of strategy
Core UK business
Non-food business
Community
Personal Finance

Club card
Green club card
Own brand value
Home brand: Tesco
Choice
To create value for
customer to earn
their lifetime loyalty
Everyday Low Price
50 Basic Needs
guaranteed not
beaten on prices

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
Thailands 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 Hypermarket
ii. Tesco Extra Hypermarkets


Tesco and Tesco Extra format
TESCO TESCO Extra
Current Tesco offer of:
Low prices
Broad range
Great customer service
Product quality
Strong mall offer
With Extra:
Provides products and
services focused for small
businesses
Bigger pack sizes
Special trolleys
Special checkouts
Dedicated business
development team
Enhanced facilities
Competitors and Competitor Analysis
Hypermarket Competitor Analysis





Background


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, restaurant
operations 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
Tesco
Giant
Jusco
Carrefour
Others

Tesco
Giant
Jusco
Carrefour
Others
Source: Planet Retail
Stars@2010
SWOT Analysis
Strengths Weaknesses
Own house brand-Tesco Choice
Competitive pricing strategy
Customer loyalty/relationship
Acquisition of Makro
Strong hypermarket format
Dependable of UK business
Burden of higher cost
Foreign brand
Opportunities Threats
Have ready customers-low and
mid-income households
Explore into new location in
Malaysia
Diversification to maintain UK
business
Stiff competition within industry
Changing in customer tastes
Government policies