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Strategic	
  Management	
  
    Industry	
  :	
  Retail	
  
      Synergy	
  
     Presented	
  by	
  :	
  
    Mohd	
  Farid	
  Awang	
  
    Norhaizum	
  Sahril	
  
Strategic management - retail sector (tesco)
VISION	
  
Our	
  vision	
  is	
  for	
  Tesco	
  to	
  be	
  most	
  highly	
  valued	
  
by	
   the	
   customers	
   we	
   serve,	
   the	
   communiAes	
   in	
  
which	
   we	
   operate,	
   our	
   loyal	
   and	
   commiCed	
  
staff	
  and	
  our	
  shareholders;	
  	
  
to	
  be	
  a	
  growth	
  company;	
  	
  
a	
  modern	
  and	
  innovaAve	
  company	
  and	
  winning	
  
locally,	
  applying	
  our	
  skills	
  globally.	
  
Strategic management - retail sector (tesco)
TESCO	
  OperaAng	
  Model	
  
          (TOM)	
  
OBJECTIVE	
  	
  
  •  COMPETITIVE	
  STRATEGY	
  
  •  VALUE	
  CHAIN	
  
  •  MISSION	
  &	
  VISION	
  

   KEY	
  SUCCESS	
  FACTOR	
  
 SWOT	
   PASTEL	
   ASSIST	
  
  MACRO	
  ENVIRONMENT	
  
COMPETITION	
  ENVIRONMENT	
  
Q	
  :	
  What	
  is	
  Tesco	
  
   strategy	
  to	
  build	
  a	
  	
  
sustainable	
  	
  compeAAve	
  	
  
          advantage?	
  

        Cost	
  
     Leadership	
   DifferenHaHon	
  
Strategic management - retail sector (tesco)
TESCO	
  news	
  	
  
(IdenHfy	
  AcHon	
  &	
  AcHviHes)	
  

      •  PromoAon	
  
      •  Press	
  release	
  
      •  ObservaAon	
  
Tesco	
  aims	
  to	
  convert	
  all	
  stores	
  to	
  
‘Extra’	
  format	
                                      Friday,	
  21	
  September	
  2012	
  


                                              	
  
Tesco	
  Stores	
  (M)	
  Sdn	
  Bhd	
  (Tesco)	
  aims	
  to	
  relaunch	
  all	
  of	
  its	
  naHonwide	
  stores	
  with	
  the	
  ‘Extra’	
  
format	
  within	
  a	
  few	
  years,	
  its	
  chief	
  execuHve	
  officer	
  (CEO)	
  Sung	
  Hwan	
  Do	
  said.


The	
  “Extra”	
  format,	
  an	
  innovaHve	
  hypermarket	
  format	
  adopted	
  in	
  all	
  
Tesco	
  stores	
  worldwide,	
  supports	
  and	
  caters	
  to	
  the	
  wider	
  needs	
  of	
  
small	
  businesses	
  apart	
  from	
  our	
  end-­‐user	
  customers,	
  offering	
  extra	
  
services,	
  choices	
  and	
  faciliHes	
  to	
  Tesco	
  customers.	
  
	
  
The	
  new	
  concept	
  not	
  only	
  offers	
  new	
  range	
  of	
  products	
  at	
  low	
  prices,	
  
but	
  also	
  offers	
  an	
  array	
  of	
  shops	
  and	
  kiosks	
  in	
  the	
  mall	
  area,	
  which	
  
includes	
  a	
  new	
  food	
  court,	
  playland,	
  addiAonal	
  automated	
  teller	
  
machines,	
  WiFi,	
  mobile	
  and	
  telecommunicaAon	
  shops	
  and	
  an	
  
improved	
  car	
  park	
  system.	
  
	
  
The	
  new	
  flagship	
  Tesco	
  Extra	
  MuHara	
  Damansara,	
  which	
  first	
  opened	
  
in	
  2003,	
  had	
  undergone	
  a	
  five-­‐month	
  long	
  renovaHon	
  period	
  to	
  unveil	
  
a	
  modernised	
  look,	
  offering	
  a	
  wider	
  variety	
  to	
  customers	
  under	
  one	
  
roof.	
  
COLLABORATE	
  WITH	
  INTERNATIONAL	
  
               PLAYER	
  
  	
  The	
  Star	
  Online	
  >	
  
  Friday	
  October	
  5,	
  2012	
  
  	
  
  Samsung	
  products	
  to	
  be	
  sold	
  at	
  Tesco	
  Extra	
  
  	
  

  SAMSUNG	
  Malaysia	
  Electronics	
  has	
  partnered	
  Tesco	
  to	
  introduce	
  Samsung	
  World	
  shop-­‐in-­‐shop	
  (SIS)	
  
  concept	
  retail	
  experience	
  to	
  a	
  hypermarket.	
  
  	
  
  Aptly	
  named	
  Samsung	
  World,	
  the	
  partnership	
  culminated	
  in	
  a	
  launch	
  event	
  held	
  at	
  Tesco	
  Extra	
  MuAara	
  Damansara,	
  
  which	
  was	
  recently	
  refurbished	
  to	
  offer	
  a	
  whole	
  new	
  shopping	
  experience	
  to	
  customers.	
  The	
  strategic	
  collaboraAon	
  with	
  
  Tesco	
  Stores	
  (Malaysia)	
  Sdn	
  Bhd	
  entails	
  a	
  designated	
  area	
  within	
  Tesco	
  Extra	
  stores	
  that	
  features	
  Samsung’s	
  latest	
  range	
  
  of	
  innovaAve	
  products.	
  
  	
  
  Aimed	
  at	
  providing	
  patrons	
  of	
  Tesco	
  Extra	
  with	
  a	
  different	
  retail	
  experience	
  and	
  a	
  beCer	
  understanding	
  of	
  Samsung’s	
  
  range	
  of	
  smart	
  living	
  soluAons,	
  Samsung’s	
  trained	
  product	
  experts	
  will	
  also	
  be	
  assigned	
  at	
  Samsung	
  World,	
  facilitaAng	
  
  consumers	
  and	
  providing	
  insights	
  on	
  the	
  latest	
  Samsung	
  innovaAons,	
  ranging	
  from	
  audio-­‐visual	
  products,	
  mobile	
  phones,	
  
  digital	
  appliances,	
  digital	
  imaging	
  devices	
  and	
  IT	
  products.	
  
  	
  
  “In	
  addiAon	
  to	
  designing	
  and	
  manufacturing	
  state-­‐of-­‐the-­‐art	
  products	
  to	
  provide	
  beCer	
  soluAons	
  to	
  consumers’	
  daily	
  
  rouAnes,	
  Samsung	
  is	
  also	
  commiCed	
  in	
  ensuring	
  our	
  customers	
  receive	
  the	
  best	
  user	
  experiences,	
  be	
  it	
  ader	
  they	
  have	
  
  purchased	
  the	
  products	
  or	
  at	
  retail	
  level.	
  
  Latest	
  offerings:	
  Kwon	
  (led)	
  introducing	
  Samsung’s	
  range	
  of	
  televisions	
  to	
  Do.	
  Latest	
  offerings:	
  Kwon	
  (led)	
  introducing	
  
  Samsung’s	
  range	
  of	
  televisions	
  to	
  Do.	
  
  	
  
  “We	
  are	
  honoured	
  and	
  excited	
  to	
  partner	
  Tesco	
  in	
  providing	
  a	
  brand	
  new	
  retail	
  experience	
  through	
  Samsung	
  World,	
  
  which	
  will	
  help	
  customers	
  beCer	
  understand	
  Samsung	
  products	
  and	
  how	
  they	
  can	
  enhance	
  users’	
  lives,”	
  said	
  Samsung	
  
  Malaysia	
  Electronics	
  managing	
  director	
  Kwon	
  Jae	
  Hoon.	
  
EXPAND	
  MARKET	
  SEGMENT	
  (SMES)	
  &	
  
CONVENIENT	
  SHOPPING	
  EXPERIENCE	
  
JOINT	
  VENTURE	
  WITH	
  MALAYSIAN	
  
             COMPANY	
  
FOCUS	
  ON	
  HOUSE	
  BRAND	
  
STRENGTHEN	
  SUPPLY	
  CHAIN	
  




RM60mio	
  :	
  Fresh	
  Food	
  DistribuAon	
  Centre	
  
•  Chilled	
  environment	
  
•  Three	
   different	
   temperature	
   zones:	
   -­‐26°C	
   for	
   frozen	
   foods;	
   1°C;	
  
   and	
  12°C	
  for	
  other	
  fresh	
  produce	
  
STRENGTHEN	
  SUPPLY	
  CHAIN	
  




RM300	
  million	
  Non-­‐chilled	
  distribuAon	
  centre	
  
BUILD	
  LOYAL	
  
 CUSTOMER	
  

Aggressive	
  markeAng	
  
-­‐	
  Direct	
  aCack	
  GIANT	
  

   Focus	
  :Lowest	
  Price	
  
Tesco Stores (Malaysia) Sdn Bhd :: Tesco is #1 For Great Prices                                       http://www.tesco.com.my/html/press_release_details.aspx?ID=107&PID...


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            PROMOTIONS                    TESCO STORES                    OUR BRANDS        CLUBCARD


         Tesco is #1 For Great Prices                                                                                                                About Us
                                                                                                                                                       Our Values
         KUALA LUMPUR, April 24, 2012 – Tesco Stores (Malaysia) Sdn. Bhd. (Tesco Malaysia) today launched its #1 for Great Prices
                                                                                                                                                       Our History
         campaign to help its customers to save more. Customers will see the prices of some 600 essential items throughout Tesco’s 45 stores
                                                                                                                                                       Our Strategy
         nationwide with discounts up to 30 percent.

         Datuk Sri Ismail Sabri Bin Yaakob, Minister of Domestic Trade, Cooperatives and Consumerism was on hand to launch Tesco’s #1 for            Media
         Great Prices campaign and he was accompanied by SungHwan Do, CEO and Vivian Yap, Director of Marketing at Tesco Malaysia.                     Press Release

                                                                                                                                                       In the News
         SungHwan Do, CEO of Tesco said, “At Tesco, our core purpose is to create value for our customers to earn their lifetime loyalty. As
         the No 1 retailer in Malaysia*, we continue to lead with our “#1 for Great Prices” campaign, and helping the customer to save more            Contact the Press Office

         with lowest prices on daily essential items. To thank our customers for their support, Tesco has doubled its investment in the #1 for


                                                                                                                                                                  TESCO	
  to	
  be	
  the	
  
         Great Prices campaign from RM21 mil last year to RM40 mil this year.”

         Vivian Yap, Marketing Director of Tesco Malaysia said, “For over 10 years, Tesco has been investing in lowering prices for the



                                                                                                                                                                  Champion	
  of	
  
         customers. This year, we have made it even bigger, helping customers to spend less by cutting the prices of over 600 items for the
         long term. We are offering these price cuts above our already low prices and while still maintaining the high standards of quality and
         freshness our customers have always enjoyed. We also offer a range of Tesco Own Brands such as Tesco Choice that matches the



                                                                                                                                                                  lowest	
  price	
  
         leading brand quality but with 20% lower prices. We have over 4000 lines ranging from food to house hold items and some of the top
         selling Tesco branded items are Tesco Choice Sweetened Creamer, Tesco Choice Cola 1.5L and Tesco Choice Dishwashing Liquid.”


         Customers can look forward to even lower prices than usual for XL sized prawns, vegetables as well as grocery items like milk powder,
         diapers, detergent and many more. According to Do, “At Tesco, we get to keep our prices low given that we buy our stock in large
         quantities. We also check on our competitors’ prices for 6,000 items to ensure that we always offer the best price. We will continue to
         do our part to bring prices down and benefit our loyal customers because we care.”
                                                                                                                                                                  retailer	
  
         Just recently, Tesco Malaysia announced that it has delivered yet another strong performance with a sales growth of 12% for financial
         year 2011/2012. The double digit sales growth is a clear indication that Tesco is the shopping destination for its great prices, great
         quality and great range. Based on an independent customer panel survey conducted by Kantar Worldpanel Malaysia, Tesco is the
         Number 1 Retailer in Peninsular Malaysia, based on Market Share Value Sales.

         Back to "Press Release"


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Tesco Stores (Malaysia) Sdn Bhd :: TUKAR program proven a success!                                       http://www.tesco.com.my/html/press_release_details.aspx?ID=107&PID...


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            PROMOTIONS                    TESCO STORES                    OUR BRANDS           CLUBCARD


         TUKAR program proven a success!                                                                                                                About Us
                                                                                                                                                          Our Values
         Puchong, Friday, January 27, 2012 – It seemed to be an insurmountable task for single mother Jessica Wong, 42, to transform her
                                                                                                                                                          Our History
         seven-year-old traditional kedai runcit into a modern convenience store that is able to appeal to more customers. Nevertheless, thanks
                                                                                                                                                          Our Strategy
         to the Government’s TUKAR programme and Tesco Stores (Malaysia) Sdn Bhd (Tesco), Wong’s dream to grow her business became



                                                                                                                                                                                                         TESCO	
  is	
  a	
  
         a reality.
                                                                                                                                                        Media
         “I have been running my store single-handedly over the years. The store has changed little since the day it opened. I realised I had to          Press Release
         modernise it if I were to make a better life for me and my 14-year-old daughter but I do not have the means nor the know-how to make
                                                                                                                                                          In the News



                                                                                                                                                                                                         strong	
  
         my store more modern and appealing. That was why I was immediately drawn to the TUKAR programme when it was announced
         almost a year ago,” explained Wong, the owner of Pasar Mini Harvest Packaging Sdn Bhd.                                                           Contact the Press Office


         TUKAR (Transformasi Untuk Kedai Runcit) is one of the Entry Point Projects in the Wholesale and Retail National Key Economic Area



                                                                                                                                                                                                         supporter	
  to	
  
         of the Economic Transformation Programme. It involves large multinational retailers such as Tesco helping traditional small retailers
         modernised their stores in order to increase sales and be more competitive by streamlining the business processes and exposing them
         to best practices, enhancing customer service quality, and improving the cost effectiveness of their supply chain.




                                                                                                                                                                                                         Malaysia	
  
         Pasar Mini Harvest Packaging successfully underwent a two-month transformation exercise led by Tesco. During this period, Tesco’s
         dedicated TUKAR personnel advised Wong in terms of the shop’s layout, product range, product mix, product schematics and display,
         and training on modern store operations management.




                                                                                                                                                                                                         government	
  
         The re-opened Pasar Mini Harvest Packaging was officiated today by Tan Sri Dato’ Muhyiddin Yassin, Deputy Prime Minister of
         Malaysia. Also present were Dato’ Seri Ismail Sabri Yaakob, Minister of Domestic Trade, Cooperatives and Consumerism, and
         SungHwan Do, Chief Executive Officer of Tesco Malaysia. The revitalised Pasar Mini Harvest features a fresh coat of paint, new
         signboard and front façade, a modern store layout, improved lighting, increase staff count, introduction of new services such as
         photocopy, ePay for Touch n Go, Astro bills payment counter, mobile money transfer as well as a new cashier counter.

         “At the end of the day, it is results that matter. On this score, I am very happy to note that in the first three weeks after I reopened, I
         realised a remarkable 15% jump in sales. What’s more, my customers continue to tell me how much they appreciate the new layout,
                                                                                                                                                                                                         iniAaAve	
  
         improved convenience and enhanced ambience of my store, especially with a 30% increase in customer traffic. This alone is enough
         for me to encourage my fellow kedai runcit owners to seriously consider participating in the TUKAR programme,” Wong concluded.

         To-date, Wong’s store has seen a steady increase of 60% in sales volume.

         Tesco Malaysia has transformed 101 stores under the TUKAR Programme in 2011. These stores are located throughout nine states in
         Malaysia specifically Selangor, Wilayah Persekutuan, Negeri Sembilan, Melaka, Johor, Perak, Penang, Kedah and Pahang. Tesco
         also initiated a pilot transformation involving two shops whereby a total of RM150,000 was invested in both transformation.


         For more information on the TUKAR Programme, please visit the Ministry of Domestic Trade, Cooperatives and Consumerism website
         http://www.kpdnkk.gov.my or to email directly to tukar@my.tesco.com for a pre-consultation.

         Back to "Press Release"


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Tesco Stores (Malaysia) Sdn Bhd :: Tesco pledges to plant 500,000 trees ...                               http://www.tesco.com.my/html/press_release_details.aspx?ID=107&PID...



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             PROMOTIONS                    TESCO STORES                    OUR BRANDS           CLUBCARD


          Tesco pledges to plant 500,000 trees in Malaysia                                                                                               About Us
                                                                                                                                                           Our Values
          Kepong, Friday, January 13, 2012 – Tesco Stores (Malaysia) Sdn Bhd (Tesco) and the Malaysian Timber Industry Board (MTIB)
                                                                                                                                                           Our History
          today inked a Memorandum of Understanding (MoU) to mark its partnership for a Greener Earth Tree Planting programme.
                                                                                                                                                           Our Strategy

          The MoU, signed by Tesco Malaysia and MTIB is to establish a cooperative effort to plant 500,000 trees throughout the country within
          three years to help meet the country’s target of planting 26 million trees.                                                                    Media
                                                                                                                                                           Press Release
          According to the MoU, Tesco will spend a total of RM4 million to plant 500,000 ‘vulnerable’ agarwood trees with MTIB’s guidance and
                                                                                                                                                           In the News
          expertise in the area. The programme is part of a bigger Greener Earth initiative by Tesco Malaysia to protect our environment and
          help reduce its carbon footprint and is partly funded by the sale of plastic bags sold on No Plastic Bags Day nationwide.                        Contact the Press Office




                                                                                                                                                                                                          TESCO	
  to	
  prove	
  
          The MoU was signed by SungHwan Do, Chief Executive Officer of Tesco Malaysia and Dr. Jalaluddin Harun, Director General of
          MTIB. The signing ceremony was witnessed by Dato’ Madius Tangau, Chairman of MTIB.

          Dato’ Madius Tangau said in his speech that, “A lot of effort on planting of trees have already been initiated by several government




                                                                                                                                                                                                          they	
  concern	
  on	
  
          agencies, as well as the private sector as part of their CSR activities. All these measures contribute to keep at least half of the country
          under forest cover as well as reforested.

          “Restoring our earth with trees will create places of beauty and enjoyment; help clean our air and more importantly, it will help
          sequester the carbon dioxide that man's industry, power generation, commerce, transport and building releases into the air,” he



                                                                                                                                                                                                          Green	
  iniAaAve	
  
          added.


          Dato’ Madius Tangau lauded the partnership, and hoped it becomes the basis and foundation of many more scientific and educational
          green activities for Malaysians and calls for similar collaborations between the corporate sector and the government in the future.

          Do said, “The Greener Earth Programme is our latest initiative to protect our environment while engaging our customers to do the
          same. Tesco Malaysia to date has reduced its carbon footprint by 42 per cent since we embarked on our green initiatives in 2008.
          Every effort such as today’s MoU Signing signifies our commitment toward a Greener Earth, bringing us closer to our target of being a
          carbon neutral business by 2050.”

          Through this programme, Tesco and MTIB will plant 160,000 trees in 2012 and 170,000 in 2013 and 2014 respectively.


          Do also said that the Greener Earth programme will soon engage Tesco customers more actively to be more involved in reducing their
          own impact on the environment.”

          The first Greener Earth tree planting activity was held on December 17, 2011 where 450 volunteers from Tesco, MTIB and the public
          planted over 1000 trees in Taman Wawasan, Putrajaya. Selangor, Johor and Melaka are amongst the states identified as next
          locations for the Greener Earth tree planting activities in 2012.

          Apart from tree planting, Tesco has taken many environmental initiatives such as its Green Clubcard Points scheme in June 2008 to
          encourage and reward customers for their green behaviour by bringing their own reusable carrier bags. Through this scheme, over 10
          million Green Clubcard points have been rewarded to 100,000 of its Clubcard members and has helped to reduce more than 81 million
          carrier bags from going to landfill.


          All of Tesco stores have also been fit with energy saving lighting, air-conditioning and refrigeration system with a cumulative
          investment amounting RM43.3 million.


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Tesco Stores (Malaysia) Sdn Bhd :: China Gets a Taste of Malaysian Products http://www.tesco.com.my/html/press_release_details.aspx?ID=107&PID...



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            PROMOTIONS                    TESCO STORES                    OUR BRANDS          CLUBCARD


         China Gets a Taste of Malaysian Products                                                                                                   About Us
                                                                                                                                                      Our Values
         BEIJING, Sunday, May 8, 2011 – What better way to showcase the appeal of Malaysian-made products than by making it available to
                                                                                                                                                      Our History
         consumers in the capital of the world’s most populated country and fastest growing economy. In a bid to help enhance the
                                                                                                                                                      Our Strategy
         internationalisation of Malaysian products, primarily those produced by home-grown SMEs (small & medium-sized enterprises), Tesco
         Malaysia launched Taste of Malaysia at Tesco Store Happy Valley, Beijing here today.
                                                                                                                                                    Media
         Taste of Malaysia will be an international foods section in the hypermarket that solely features Malaysian brands and products, for a        Press Release
         two week period beginning today. There will be a total of 91 food and beverage product lines being showcased in the section. 59 are
                                                                                                                                                      In the News
         new to the section brought it especially through Tesco’s Taste of Malaysia programme. This is in addition to the 32 products already
         listed in Tesco China, paving the way for other Malaysian SME-made products. Some of the leading Malaysian brands being featured             Contact the Press Office

         include Nona, Alif, Pitaberry, Iceberry, Mascafe, Slera and Pertima, amongst a total of 18 suppliers.




                                                                                                                                                                             TESCO	
  to	
  prove	
  
         The Taste of Malaysia section will be available to Tesco Store Happy Valley shoppers from today. In addition, there will also be
         promotions for a two week period spearheaded by Tesco to entice consumers to sample Malaysian products

         YB Dato' Sri Ismail Sabri Bin Yaakob, the Minister of Domestic Trade, Cooperatives and Consumerisme, was at hand to officiate the
         launch of Taste in Malaysia this afternoon. Also present was Tjeerd Jegen, CEO of Tesco Malaysia and Sophia Zhong, Commercial
         Director of Tesco China (North).                                                                                                                                    they	
  could	
  offer	
  
                                                                                                                                                                             beCer	
  market	
  
         Tjeerd said, “Buatan Malaysia or Malaysian-made products are comparable in terms of quality and value for money to some of the
         world’s leading brands. These products will undergo a promotion period of two weeks to assess customer acceptance of the product
         and should they meet the Chinese consumers flavour, we will consider supplying these products for the long term. These very brands
         do well in Malaysia and we believe that they will do just as well here.”

         According to Tjeerd, Tesco Stores Malaysia is happy to help Malaysian brands acquire greater exposure in the international
         marketplace. “Tesco has been growing positively in Malaysia over the last decade. It has been a mutually beneficial relationship and
                                                                                                                                                                             access	
  for	
  their	
  
                                                                                                                                                                             suppliers	
  
         we want to further add value by leveraging on our international presence as one of the largest retailers in the world to help grow
         Malaysian brands,” Tjeerd concluded.

         The launch of the first Taste of Malaysia this year in China shows the significance of China in the world retail market and for Tesco.
         China holds great potential and we would like to support our suppliers to tap into this great opportunity, he added.


         The launch of Taste of Malaysia was followed by a special cooking demonstration conducted by Malaysia’s very own celebrity chef,
         Chef Muluk. In addition to showcasing his culinary skills, he also introduced Malaysian delights to curious Chinese shoppers. Most of
         the ingredients used in Chef Muluk’s recipes are featured in the Taste of Malaysia section.


         Back to "Press Release"


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         © Copyright 2012 Tesco Stores (Malaysia) Sdn Bhd. All Rights Reserved.
CLEARLY	
  STATED	
  CUSTOMER	
  RIGHT	
  


Shop	
  with	
  confidence! 	
  	
  
•  We	
  welcome	
  all	
  customers.	
  No	
  membership	
  is	
  required.	
  
•  If	
  you	
  are	
  unsaHsfied	
  with	
  your	
  purchase,	
  you	
  may	
  return	
  your	
  purchase(s)	
  together	
  with	
  the	
  original	
  
     receipt	
  within	
  7	
  days	
  from	
  the	
  date	
  of	
  purchase.	
  
•  Return	
  policy	
  does	
  not	
  apply	
  to	
  display	
  items	
  or	
  items	
  from	
  stock	
  clearance	
  promoHons	
  
•  Return	
  policy	
  does	
  not	
  apply	
  to	
  fresh	
  produce,	
  frozen	
  goods,	
  cameras,	
  mobile	
  phones,	
  computer	
  
     (including	
  peripherals)	
  and	
  undergarments.	
  
•  Tesco	
  Value,	
  Tesco	
  Choice	
  and	
  Tesco	
  Finest	
  products	
  are	
  not	
  to	
  be	
  sold	
  commercially.	
  If	
  you	
  are	
  
     unsaHsfied	
  with	
  the	
  quality	
  of	
  any	
  of	
  our	
  Tesco	
  Value,	
  Tesco	
  Choice	
  or	
  Tesco	
  Finest	
  products,	
  you	
  may	
  
     return	
  your	
  purchase(s)	
  with	
  the	
  original	
  receipt	
  to	
  us	
  within	
  28	
  days	
  from	
  the	
  date	
  of	
  purchase	
  and	
  we	
  
     will	
  either	
  make	
  a	
  replacement	
  or	
  remit	
  a	
  full	
  refund.	
  
        	
  	
  
Always	
  in	
  stock!	
   	
  	
  
	
  
Delivery	
  service	
  for	
  your	
  convenience!                  	
  	
  
•  Free	
  delivery	
  service	
  (up	
  to	
  30km)	
  is	
  available	
  for	
  electronic	
  goods.	
  A	
  charge	
  of	
  RM2.50/km	
  will	
  be	
  levied	
  
     beyond	
  the	
  30th	
  km.	
  
•  Delivery	
  service	
  is	
  offered	
  for	
  goods	
  that	
  have	
  been	
  purchased	
  in	
  bulk	
  by	
  Biz	
  Clubcard	
  members 	
  	
  
EXPAND	
  MARKET	
  SEGMENT	
                      FOCUS	
  ON	
  HOUSE	
  BRAND	
  
                        AcquisiAon	
  of	
  MAKRO	
  Cash	
  &	
  Carry	
         Produce	
  more	
  range	
  of	
  House	
  Brand	
  	
  
                                      •  To	
  tap	
  SMEs	
  market	
            •  TESCO	
  value	
  –	
  affordable	
  range.	
  
                                                                       	
         •  TESCO	
  choice	
  –	
  quality	
  products.	
  
                                                                                  •  TESCO	
   light	
   choice	
   –	
   nutriAous	
   low-­‐calorie	
  
                                                                                     food.	
  
      FOCUS	
  ON	
  PROFITABLE	
  AREA	
                                         •  TESCO	
  finest	
  –	
  premium	
  ingredients	
  
      Exit	
  non-­‐profitable	
  market	
  
      •  BanAng	
  &	
  Senawang	
  
      	
                                                                                               JOINT	
   VENTURE	
   WITH	
   LOCAL	
  
                                                                                                       PLAYER	
  
                                                                                                       Equity	
  Partner	
  –	
  Sime	
  Darby	
  
                                                                                                       •  70:30	
  
BUILD	
  GOOD	
  RELATIONSHIP	
  WITH	
  
GOVERNMENT	
  
•  MOU	
  with	
  Malaysia	
  InternaAonal	
  
     Timber	
  Board	
  
                                                                                                    BUILD	
  REPUTATION	
  AMONG	
  SUPPLIER	
  
•  TESCO	
  is	
  one	
  of	
  enabler	
  for	
  TUKAR	
  
                                                                                                    Support	
  local	
  SMEs	
  
     programme	
  
                                                                                                    •  Bulk	
  purchase	
  for	
  local	
  small	
  retailer	
  
	
  
                                                                                                    •  Introduce	
  local	
  products	
  to	
  TESCO	
  
                                                                                                       oversea	
  
       STRENGTHEN	
  SUPPLY	
  CHAIN	
  
       Established	
  distribuAon	
  centre	
                                        BUILD	
  LOYAL	
  CUSTOMER	
  
       •  Simpang	
  Pulai	
  :	
  fresh	
  products	
  	
                           •  Clubcard	
  
       •  Bukit	
   Beruntung	
   :	
   grocery,	
                                   •  Campaign	
   for	
   the	
   no	
   1	
   of	
   great	
   price	
  
           electronics,	
   high	
   tech	
   and	
                                     retailer	
  	
  
           apparel	
                                                                 •  Fresh	
  vegetables	
  

                              COLLABORATE	
  WITH	
  SAMSUNG	
                CLEARLY	
  STATED	
  CUSTOMER	
  RIGHT	
  
WHAT	
  IS	
  TESCO	
  STRATEGY	
  TO	
  BUILD	
  A	
  	
  
        SUSTAINABLE	
  	
  COMPETITIVE	
  	
  ADVANTAGE?	
  


COLLABORATE	
  WITH	
  SAMSUNG	
                                          FOCUS	
  ON	
  HOUSE	
  BRAND	
  




                          TESCO	
  FOCUS	
  ON	
  COST-­‐LEADERSHIP	
  

   STRENGTHEN	
  SUPPLY	
  CHAIN	
  
   Established	
  distribuAon	
  centre	
                  BUILD	
  LOYAL	
  CUSTOMER	
  
   •  Simpang	
  Pulai	
  :	
  fresh	
  products	
  	
     •  Campaign	
   for	
   the	
   no	
   1	
   of	
   great	
   price	
  
   •  Bukit	
   Beruntung	
   :	
   grocery,	
                retailer	
  
       electronics,	
   high	
   tech	
   and	
  
       apparel	
  
MACRO	
  ENVIRONMENT	
  
                                  Industry	
  Growth	
  




                                                                     Government	
  
 Social	
  forces	
  
                                                                   Support	
  &	
  Policies	
  

                                     RETAIL	
  
                                   INDUSTRY	
  




                                                             Rules	
  &	
  
                 Technology	
  
                                                           RegulaHons	
  
GOVERNMENT	
  NURTURE	
  INTERNAL	
  DEMAND	
  
GOVERNMENT	
  FULLY	
  SUPPORT	
  WHOLESALE	
  
                AND	
  RETAIL	
  GROWTH	
  




"  Within	
   the	
   next	
   10	
   years,	
   Malaysia	
   government	
  	
  
through	
   EPP	
   aimed	
   to	
   carry	
   RM17.4	
   billion	
  
investment	
   	
  in	
  order	
  to	
  contribute	
  RM8.5	
  billion	
  
GNI	
  and	
  create	
  68,600	
  jobs	
  by	
  2020.	
  
REGULATORY	
  POLICIES	
  TO	
  PROMOTE	
  HEALTHY	
  
      COMPETITION	
  ENVIRONMENT	
  	
  
Strategic management - retail sector (tesco)
ONLINE	
  MARKET	
  (LOCAL)	
  OPPORTUNITY	
  




Online	
  purchase	
  &	
  Virtual	
  Store	
  
ONLINE	
  MARKET	
  (GLOBAL)	
  OPPORTUNITY	
  




Online	
  purchase	
  &	
  Virtual	
  Store	
  
CHANGES	
  IN	
  SOCIAL	
  FORCES	
  


• 	
   Based	
   on	
   2010	
   Census,	
   Malaysia’s	
   total	
   populaHon	
  
stood	
   at	
   28.3	
   million	
   with	
   a	
   populaHon	
   density	
   of	
   86	
  
persons	
   per	
   square	
   kilometer.	
   The	
   naHon’s	
   capital,	
  
Kuala	
   Lumpur,	
   has	
   a	
   populaHon	
   of	
   around	
   	
   1.67	
  
million	
  and	
  a	
  much	
  higher	
  density	
  of	
  6891	
  persons	
  per	
  
square	
   kilometer.	
   Although	
   East	
   Malaysia	
   makes	
   up	
  
60%	
  of	
  Malaysia’s	
  landmass,	
  it	
  only	
  accounts	
  for	
  20%	
  
of	
  the	
  country’s	
  populaHon.	
  



• 	
   Over	
   the	
   last	
   11	
   years,	
   Malaysia’s	
   populaHon	
   has	
  
been	
  growing	
  at	
  a	
  steady	
  rate	
  of	
  2.0%	
  per	
  annum.	
  The	
  
country	
   is	
   experiencing	
   an	
   increase	
   in	
   rural	
   to	
   urban	
  
migraHon.	
   The	
   average	
   age	
   of	
   Malaysian	
   populaHon	
   is	
  
young	
  at	
  26	
  years	
  old	
  and	
  the	
  average	
  life	
  expectancy	
  
stands	
  at	
  over	
  73	
  years.	
  
INCOME/BUYING	
  POWER	
  
-­‐	
   Malaysia	
   is	
   classified	
   as	
   an	
  
upper-­‐middle	
  income	
  country,	
  
and	
   considered	
   as	
   one	
   of	
   the	
  
m o s t	
   d e v e l o p e d	
   o f	
   t h e	
  
developing	
  countries.	
  
The	
   proporHon	
   of	
   middle	
  
income	
   households,	
   defined	
  
as	
   those	
   earning	
   between	
  
RM2,841	
   and	
   MYR4,025	
   per	
  
month,	
   has	
   increased	
   from	
  
6.5%	
  in	
  2009	
  to	
  9.2%	
  in	
  2007.	
  	
  
	
  
-­‐	
  On	
  average,	
  household	
  living	
  
in	
   urban	
   areas	
   spent	
   1.5	
   Hes	
  
more	
  than	
  households	
  living	
  in	
  
r u r a l	
   a r e a s .	
   A v e r a g e	
  
h o u s e h o l d	
   	
   s p e n d i n g	
  
expenditure	
   is	
   stands	
   at	
  
RM2190	
  per	
  month	
  	
  
Strategic management - retail sector (tesco)
Strategic management - retail sector (tesco)
CONSUMER	
  BEHAVIOR	
  
Average	
  household	
  spending	
  palerns:	
  
-­‐	
  Malaysians	
  spend	
  a	
  high	
  percentage	
  of	
  their	
  household	
  income	
  on	
  food,	
  groceries	
  
and	
  personal	
  care	
  items,	
  ranking	
  third	
  out	
  of	
  the	
  ten	
  major	
  economies	
  in	
  the	
  Asia-­‐
Pacific	
  region	
  (excl.Japan)	
  
-­‐	
  According	
  to	
  ACNielsen,	
  Malaysians	
  on	
  average	
  spent	
  MYR505	
  per	
  month	
  on	
  food	
  
and	
  groceries,	
  with	
  just	
  half	
  of	
  hat	
  on	
  fresh	
  food	
  like	
  meat,	
  fruits	
  and	
  vegetables.	
  
	
  
Lifestyles/Shopping	
  habits:	
  
-­‐ Malaysia’s	
  consumer	
  lifestyle	
  has	
  been	
  evolving	
  and	
  changing	
  due	
  in	
  part	
  to	
  rising	
  
affluence	
  and	
  educaHon	
  levels.	
  
-­‐ High	
  profile	
  internaHonal	
  retailers	
  and	
  the	
  global	
  mass	
  media	
  have	
  also	
  played	
  a	
  
hand	
  in	
  shaping	
  consumer-­‐buying	
  behavior.	
  
-­‐ Malaysians	
  are	
  becoming	
  more	
  westernized,	
  sophisHcated	
  and	
  cosmopolitan.	
  
-­‐ Since	
  the	
  emergence	
  of	
  the	
  foreign-­‐owned	
  hypermarkets,	
  Malaysians	
  who	
  lived=	
  
in	
  urban	
  have	
  become	
  accustomed	
  to	
  shopping	
  for	
  groceries	
  at	
  hypermarkets	
  and	
  
supermarkets.	
  
-­‐ Meanwhile	
  rural	
  people	
  conHnue	
  to	
  purchase	
  from	
  tradiHonal	
  grocers,	
  
convenience	
  stores	
  and	
  mini-­‐marts	
  
Strategic management - retail sector (tesco)
Strategic management - retail sector (tesco)
TESCO	
  
COMPETITION	
  
ENVIROMENT	
  
MAJOR	
  RETAIL	
  PLAYERS	
  

Ran                 Group	
  Name	
                             Ownership	
                          Retail	
  Formats	
           Number	
  of	
        2011	
  Net	
  sales	
  
king	
                                                                                                                               Stores	
  
1	
        Dairy	
  Farm	
  Giant	
  Retail	
       Diary	
  Farm	
                           Supermarket/                         125	
              na	
  
                                                    InternaHonal	
                            superstores	
  (54)	
  	
  and	
  
                                                                                              hypermarkets	
  (71)	
  


2	
        TESCO	
  PLC	
                           JV	
  	
  (70%	
  TESCO	
  PLC	
  :	
     Hypermarkets	
  	
                   46	
               3.53	
  billion	
  
                                                    30%	
  Sime	
  Darby)	
  
3	
        Carrefour	
  	
  Group	
                 Carrefour	
  Group	
                      Hypermarkets	
                       26	
               1.8	
  billion	
  

4	
        Econsave	
  Cash	
  &	
  Carry	
  	
     Econsave	
  Cash	
  &	
  Carry	
          Supermarkets/                        29	
               700	
  million	
  
                                                    Sdn	
  Bhd	
                              hypermarkets	
  
5	
        MYDIN	
                                  Mydin	
  Mohamed	
                        Hypermarkets	
  (10)	
               100	
              1.5billion	
  
                                                    Holdings	
  Bhd	
                         Emporiums	
  (18)	
  
                                                                                              Bazaar	
  (3)	
  
                                                                                              Mini	
  Market	
  (54)	
  
                                                                                              Convenient	
  store	
  (9)	
  
                                                                                              Franchise	
  (6)	
  
STRATEGIC MAPPING


           High  	
  
            	
  
PRICE/QUALITY	
  




                          CARREFOUR	
                TESCO	
  
                              ECONSAV
                                                                     MYDIN	
  
                                                                                   	
  	
  	
  
                                 E	
  
           Low	
  
             	
  
                  	
                                                             GIANT	
  


                         Few	
  LocaHons
                                       	
                                        Many	
  LocaHons
                                                                                                	
  
                                  	
          GEOGRAPHIC	
  COVERAGE	
                    	
  
•  High startup cost                                        IF consumers see little
          •  Small market	
            WEAK	
  Threat	
  of	
  	
         difference between
                                       New	
  Entrants	
                  the Price - they
                                                                          will tend to choose
                                                                          on price.




                                       STRONG	
  Rivalry	
              HIGH	
  Bargaining	
  
   WEAK	
  Bargaining	
  	
            Among	
  Current	
  	
  
  Power	
  Of	
  Suppliers	
                                            Power	
  of	
  Buyers
                                                                                            	
  
                                         CompeAtors   	
  

supermarkets dictate the                                              •  If a single item too
  price they pay to the                                                  expensive in Tesco,
        supplier	
                                                       buyers will exercise
                                                                         their power and
                                        WEAK	
  Threat	
  	
             move to Giant which
                                        of	
  SubsAtute	
                can be easily access
                                            Products 	
               •  Time consuming
                                                 43	
  


                                 •  Selling similar products
                                   •  Offer similar services	
  
KEY	
  SUCCESS	
  FACTOR	
  
                1.	
  INCREASE	
  IN	
  INTERNAL	
  DEMAND	
  

                    2.	
  GOVERNMENT	
  SUPPORT	
  

      3.	
  REGULATORY	
  POLICIES	
  TO	
  PROMOTE	
  HEALTHY	
  
                 COMPETITION	
  ENVIRONMENT	
  	
  

4.	
  HIGH	
  BARGAINING	
  POWER	
  OVER	
  CUSTOMER	
  &	
  SUPPLIER	
  

                  5.	
  CHANGES	
  IN	
  SOCIAL	
  FORCES	
  

             6.	
  GOOD	
  INFRASTUCTURE	
  FOR	
  ONLINE	
  

             7.	
  GOOD	
  SUPPLY	
  CHAIN	
  MANAGEMENT	
  	
  
                     (SOFTWARE	
  &	
  HARDWARE)	
  
Opportunity	
     Threat	
  
ASSESSMENT	
  OF	
  INTERNAL	
  FACTORS	
  FOR	
  STRATEGIC	
  ADVANTAGE	
  (ASSIST)	
  
                          (RANKING	
  STRENGTH	
  AND	
  WEAKNESSES)	
  

          	
         	
        	
       	
          	
          	
          	
          	
  	
  	
  	
  Value 	
     	
  	
  Rareness 	
     	
  	
  Imitability 	
  	
  	
  	
  	
  	
  	
  Sustainability	
  
LIST	
  UNDER	
  RESOURCES	
  
S2	
  :	
  Fresh	
  DC         	
       	
   S2	
   	
          	
          	
          	
  DisAncAve 	
             	
  DisAncAve 	
        	
  CompeAAve	
                                          	
  PotenAal	
  
S3	
  :	
  Non-­‐chilled	
  DC          	
          	
          	
          	
          	
  CompeHHve	
              	
  CompeHHve	
         	
  CompeHHve	
                                          	
  PotenHal	
  
S5	
  :	
  Standard	
  lay-­‐out        	
          	
          	
          	
          	
  CompeHHve	
              	
  PotenHal 	
         	
  PotenHal 	
                                          	
  PotenHal	
  
S6	
  :	
  Tesco	
  Hypermarkets	
                  	
          	
          	
          	
  CompeHHve	
              	
  PotenHal 	
         	
  PotenHal 	
                                          	
  PotenHal	
  
S7	
  :	
  House	
  Brand 	
            	
          	
          	
   S3	
   	
          	
  CompeAAve	
              	
  PotenAal 	
         	
  PotenAal 	
  	
  	
  	
  	
  	
  	
  	
  	
  CompeAAve	
  
S8	
  :	
  Tesco	
  Extra 	
   S5	
   	
            	
          	
          	
          	
  DisAncAve 	
             	
  DisAncAve 	
        	
  PotenAal 	
  	
  	
  	
  	
  	
  	
  	
  	
  CompeAAve	
  
S9	
  :	
  Tesco	
  Clubcard	
  and	
  Biz	
  Clubcard 	
                   	
          	
  CompeHHve	
              	
  CompeHHve	
         	
  PotenHal 	
                                          	
  PotenHal	
  
S11	
  :	
  Tesco	
  VALUE	
            	
          	
          	
   S4	
   	
          	
  DisAncAve 	
             	
  PotenAal 	
         	
  PotenAal	
   	
  	
  	
  	
  	
  	
  	
  	
  	
  CompeAAve	
  
W4	
  :	
  Low	
  sales	
  volume	
  for	
  Tesco	
  Extra                  	
          	
  DisHncHve 	
             	
  CompeHHve	
         	
  CompeHHve	
                                          	
  PotenHal	
  
W5	
  :	
  Small	
  margin	
            	
          	
          	
          	
          	
  DisAncAve 	
             	
  CompeAAve	
         	
  CompeAAve	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  DisAncAve	
  
                                                                     W3	
  
W6	
  :	
  High	
  A&P	
  cost          	
          	
          	
          	
          	
  DisHncHve 	
             	
  CompeHHve	
         	
  CompeHHve	
                                          	
  PotenHal	
  
W7	
  :	
  High	
  capital	
  investment 	
                     	
          	
  
                                                                            W2	
        	
  DisAncAve 	
             	
  CompeAAve	
         	
  CompeAAve	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  DisAncAve	
  
	
  
LIST	
  UNDER	
  CAPABILITIES	
  
S1	
  :	
  High	
  bargaining	
  power              	
   S1	
   	
          	
          	
  DisAncAve 	
             	
  CompeAAve	
         	
  PotenAal 	
  	
  	
  	
  	
  	
  	
  	
  	
  CompeAAve	
  
S4	
  :	
  The	
  applicaHon	
  of	
  ERP	
  system 	
                      	
          	
  DisHncHve 	
             	
  PotenHal 	
         	
  PotenHal 	
                                           	
  PotenHal	
  
S10	
  :	
  Focus	
  on	
  customer	
  service                  	
          	
          	
  DisHncHve 	
             	
  CompeHHve	
         	
  PotenHal 	
                                           	
  PotenHal	
  
W1	
  :	
  Certain	
  supplier	
  dictate	
  price 	
                       	
   W4	
  	
  DisAncAve 	
              	
  PotenAal 	
         	
  PotenAal 	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  PotenAal	
  
W2	
  :	
  No	
  Online	
  Shopping	
  capability	
   	
   W5	
  	
                     	
  DisAncAve 	
             	
  DisAncAve 	
        	
  CompeAAve	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  PotenAal	
  
W3	
  :	
  High	
  bargaining	
  power	
  of	
  retail	
  customer 	
  DisAncAve 	
  
                                                                                 W1	
  
                                                                                                                     	
  CompeAAve	
         	
  CompeAAve	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  DisAncAve	
  
	
  
VALUE	
  CHAIN	
  FOR	
  TESCO	
  
                 (BASED	
  ON	
  PORTER	
  ORIGINAL)	
  
          W2,W3	
                              DC,	
  FINANCE	
  

                                                      TRAINING	
  

        W2	
  
                                                                              L
                                                   SYSTEM	
                   O
                                                                              W	
  
                                             SUPPLIER	
  MGT	
  
                                                                              M
                                                                              A
                                                                              R
                                                                              G
                                                                              I
                                                                              N	
  


S1,S2,W4	
                       S5,W1	
  

                                                                     S4	
  
                    W5	
  
VALUE	
  CHAIN	
  FOR	
  TESCO	
  
             (BASED	
  ON	
  PORTER	
  ORIGINAL)	
  
         W2,W3	
                               DC,	
  FINANCE	
  

                                                      TRAINING	
  

    W2	
  
                                                                              L
                                                   SYSTEM	
                   O
                                                                              W	
  
                                           SUPPLIER	
  MGT	
  
                                                                              M
                                                                              A
                                                                              R
                                                                              G
                                                                              I
                                                                              N	
  

S1	
  

                                   S5,W1	
                           S4	
  
         S2,W4	
  
                        W5	
  
S1	
   	
  High	
  bargaining	
  power	
  over	
  supplier	
  	
       W1 	
  High	
  bargaining	
  power	
  of	
  customer	
  	
  
       	
  (capabili8es)	
                                                	
  (capabili8es) 	
  	
  
S2	
   	
  Fresh	
  DC	
  (Resources) 	
           	
       	
  	
     W2 	
  High	
  capital	
  investment	
  (Resources)	
  
S3 	
  House	
  Brand	
  (Resources)               	
       	
  	
     W3 	
  Small	
  margin	
  (Resources) 	
           	
  	
  
S4 	
  Tesco	
  VALUE	
  (Resources)               	
       	
  	
     W4 	
  Certain	
  supplier	
  dictate	
  price	
  
S5 	
  Tesco	
  Extra	
  (Resources) 	
            	
  	
                 	
  (capabili8es)	
   	
  	
  
                                                                       W5 	
  No	
  Online	
  (capabili8es) 	
  	
  	
  


                                                               SW
O1 	
  Online	
  shopping	
  	
  
                                                               O T
O2	
   	
  Co-­‐operate	
  with	
  Malaysian	
  Government	
  	
  
       	
  to	
  setup	
  1	
  Malaysia	
  Mall	
  
O3 	
  Open	
  branch	
  in	
  East	
  Malaysia	
  &	
  East	
  	
     T1	
     	
  Decreasing	
  in	
  Internal	
  Demand	
  
       	
  Coast	
  (TESCO	
  EXTRA)	
                                 T2       	
  1	
  Malaysia	
  Mall	
  
O4 	
  Acquire	
  small	
  &	
  medium	
  local	
  retailers	
         T3	
     	
  Merger	
  of	
  current	
  compeHtor	
  
O5 	
  More	
  house	
  brand	
  (OEM	
  for	
  1Malaysia	
  	
        T4       	
  Entrance	
  of	
  new	
  player	
  
       	
  Brand)	
  
O6 	
  Form	
  Halal	
  Supermarket	
  	
  
	
  
RECOMMENDATION	
  
            (to	
  be	
  compeAAve)	
  


       •  COMPETITIVE	
  STRATEGY	
  
       •  VALUE	
  CHAIN	
  
       •  MISSION	
  &	
  VISION	
  

SUSTAINABLE	
  COMPETITIVE	
  ADVANTAGE	
  
COMPETITIVE	
  STRATEGY	
  

Current	
  




 Future	
     Groceries	
  -­‐	
  Online	
  
VALUE	
  CHAIN	
  FOR	
  TESCO	
  
        LOWER	
  CAPITAL	
  INVESTMENT	
  
                                                     DC,	
  STORE	
  
     REDUCE	
  MAN	
  POWER	
                                 TRAINING	
  

            UPGRADING	
  SYSTEM	
  (ONLINE)	
  
                                                                                    L
                                                           SYSTEM	
                 O
                                                                                    W	
  
                                                  SUPPLIER	
  MGT	
  
                                                                                    M
                                                                                    A
                                                                 Sales	
  &	
       R
INVENTORY	
        DISTRIBUTION	
  
                                         TESCO	
  
                                       WHOLSALE,	
  
                                                                 Services	
         G
 PURCHASE	
           CENTRE	
  
                                      TESCO	
  EXTRA	
  
                                                              (TESCO	
  VALUE	
     I
                                                                 &	
  TOM)	
  
                                                                                    N	
  
VISION	
  &	
  MISSION	
  
NEW	
  VISION	
  
Dedicated	
  to	
  deliver	
  fresh	
  and	
  quality	
  groceries	
  
at	
  the	
  lowest	
  price	
  to	
  all	
  over	
  Malaysia	
  
	
  
NEW	
  MISSION	
  
Offer	
  customer	
  a	
  whole	
  new	
  shopping	
  
experience	
  for	
  a	
  quality	
  products	
  at	
  lower	
  price	
  
SUSTAINABLE	
  COMPETITIVE	
  
           ADVANTAGE	
  
Ø Focus	
  low-­‐cost	
  strategy	
  within	
  a	
  narrow	
  
  buyer	
  segment	
  (market	
  niche)	
  –	
  Focus	
  on	
  
  suplying	
  Fresh	
  &	
  Quality	
  groceries	
  (make	
  
  use	
  of	
  Chilled-­‐DC	
  in	
  Simpang	
  Pulai).	
  
  Target	
  market	
  :	
  family	
  
Ø Introduce	
  ONLINE	
  shopping	
  
WAY	
  FORWARD	
  
"   Malaysian	
   saw	
   the	
   growth	
   of	
   the	
   large	
   format	
   retail	
   sub-­‐sector	
  
    today;	
   121	
   hypermarkets,	
   113	
   superstores	
   and	
   133	
  
    departments	
   stores	
   run	
   by	
   local	
   and	
   foreign	
   operators,	
  
    bringing	
   beler	
   quality,	
   wider	
   choice,	
   lower	
   product	
   cost,	
  
    greater	
   product	
   availability	
   and	
   new	
   retailing	
   technology	
   and	
  
    skills.	
  	
  	
  

"   Within	
   the	
   next	
   10	
   years,	
   Malaysia	
   government	
   	
   through	
   EPP	
  
    aimed	
   to	
   carry	
   RM17.4	
   billion	
   investment	
   	
   in	
   order	
   to	
  
    contribute	
  RM8.5	
  billion	
  GNI	
  and	
  create	
  68,600	
  jobs	
  by	
  2020.	
  

"   TESCO	
  sHll	
  have	
  the	
  opportunity	
  to	
  re-­‐strategize	
  their	
  business	
  
    in	
  Malaysia	
  
ATTACHMENTS	
  
ASSESSMENT	
  OF	
  INTERNAL	
  FACTORS	
  FOR	
  STRATEGIC	
  ADVANTAGE	
  (ASSIST)	
  
                          (RANKING	
  STRENGTH	
  AND	
  WEAKNESSES)	
  

          	
         	
        	
       	
          	
          	
          	
          	
  	
  	
  	
  Value 	
     	
  	
  Rareness 	
     	
  	
  Imitability 	
  	
  	
  	
  	
  	
  	
  Sustainability	
  
LIST	
  UNDER	
  RESOURCES	
  
S2	
  :	
  Fresh	
  DC         	
       	
   S2	
   	
          	
          	
          	
  DisAncAve 	
             	
  DisAncAve 	
        	
  CompeAAve	
                                          	
  PotenAal	
  
S3	
  :	
  Non-­‐chilled	
  DC          	
          	
          	
          	
          	
  CompeHHve	
              	
  CompeHHve	
         	
  CompeHHve	
                                          	
  PotenHal	
  
S5	
  :	
  Standard	
  lay-­‐out        	
          	
          	
          	
          	
  CompeHHve	
              	
  PotenHal 	
         	
  PotenHal 	
                                          	
  PotenHal	
  
S6	
  :	
  Tesco	
  Hypermarkets	
                  	
          	
          	
          	
  CompeHHve	
              	
  PotenHal 	
         	
  PotenHal 	
                                          	
  PotenHal	
  
S7	
  :	
  House	
  Brand 	
            	
          	
          	
   S3	
   	
          	
  CompeAAve	
              	
  PotenAal 	
         	
  PotenAal 	
  	
  	
  	
  	
  	
  	
  	
  	
  CompeAAve	
  
S8	
  :	
  Tesco	
  Extra 	
   S5	
   	
            	
          	
          	
          	
  DisAncAve 	
             	
  DisAncAve 	
        	
  PotenAal 	
  	
  	
  	
  	
  	
  	
  	
  	
  CompeAAve	
  
S9	
  :	
  Tesco	
  Clubcard	
  and	
  Biz	
  Clubcard 	
                   	
          	
  CompeHHve	
              	
  CompeHHve	
         	
  PotenHal 	
                                          	
  PotenHal	
  
S11	
  :	
  Tesco	
  VALUE	
            	
          	
          	
   S4	
   	
          	
  DisAncAve 	
             	
  PotenAal 	
         	
  PotenAal	
   	
  	
  	
  	
  	
  	
  	
  	
  	
  CompeAAve	
  
W4	
  :	
  Low	
  sales	
  volume	
  for	
  Tesco	
  Extra                  	
          	
  DisHncHve 	
             	
  CompeHHve	
         	
  CompeHHve	
                                          	
  PotenHal	
  
W5	
  :	
  Small	
  margin	
            	
          	
          	
          	
          	
  DisAncAve 	
             	
  CompeAAve	
         	
  CompeAAve	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  DisAncAve	
  
                                                                     W3	
  
W6	
  :	
  High	
  A&P	
  cost          	
          	
          	
          	
          	
  DisHncHve 	
             	
  CompeHHve	
         	
  CompeHHve	
                                          	
  PotenHal	
  
W7	
  :	
  High	
  capital	
  investment 	
                     	
          	
  
                                                                            W2	
        	
  DisAncAve 	
             	
  CompeAAve	
         	
  CompeAAve	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  DisAncAve	
  
	
  
LIST	
  UNDER	
  CAPABILITIES	
  
S1	
  :	
  High	
  bargaining	
  power              	
   S1	
   	
          	
          	
  DisAncAve 	
             	
  CompeAAve	
         	
  PotenAal 	
  	
  	
  	
  	
  	
  	
  	
  	
  CompeAAve	
  
S4	
  :	
  The	
  applicaHon	
  of	
  ERP	
  system 	
                      	
          	
  DisHncHve 	
             	
  PotenHal 	
         	
  PotenHal 	
                                           	
  PotenHal	
  
S10	
  :	
  Focus	
  on	
  customer	
  service                  	
          	
          	
  DisHncHve 	
             	
  CompeHHve	
         	
  PotenHal 	
                                           	
  PotenHal	
  
W1	
  :	
  Nestle	
  high	
  bargaining	
  power 	
                         	
   W4	
  	
  DisAncAve 	
              	
  PotenAal 	
         	
  PotenAal 	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  PotenAal	
  
W2	
  :	
  No	
  Online	
  Shopping	
  capability	
   	
   W5	
  	
                     	
  DisAncAve 	
             	
  DisAncAve 	
        	
  CompeAAve	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  PotenAal	
  
W3	
  :	
  High	
  bargaining	
  power	
  of	
  retail	
  customer 	
  DisAncAve 	
  
                                                                                 W1	
  
                                                                                                                     	
  CompeAAve	
         	
  CompeAAve	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  DisAncAve	
  
	
  
OPPORTUNITY	
  


       Budget	
  2013	
  

Tesco	
  to	
  JV	
  with	
  local	
  retailer	
  	
  to	
  form	
  a	
  Halal	
  Supermarket	
  
and	
  expand	
  to	
  Islamic	
  Countries	
  
THREAT	
  
1MALAYSIA	
  MALL	
  
MAJOR	
  RETAIL	
  PLAYERS	
  

Ran                 Group	
  Name	
                             Ownership	
                          Retail	
  Formats	
           Number	
  of	
        2011	
  Net	
  sales	
  
king	
                                                                                                                               Stores	
  
1	
        Dairy	
  Farm	
  Giant	
  Retail	
       Diary	
  Farm	
                           Supermarket/                         125	
              na	
  
                                                    InternaHonal	
                            superstores	
  (54)	
  	
  and	
  
                                                                                              hypermarkets	
  (71)	
  


2	
        TESCO	
  PLC	
                           JV	
  	
  (70%	
  TESCO	
  PLC	
  :	
     Hypermarkets	
  	
                   46	
               3.53	
  billion	
  
                                                    30%	
  Sime	
  Darby)	
  
3	
        Carrefour	
  	
  Group	
                 Carrefour	
  Group	
                      Hypermarkets	
                       13	
               na	
  

4	
        Econsave	
  Cash	
  &	
  Carry	
  	
     Econsave	
  Cash	
  &	
  Carry	
          Supermarkets/                        29	
               700	
  million	
  
                                                    Sdn	
  Bhd	
                              hypermarkets	
  
5	
        MYDIN	
                                  Mydin	
  Mohamed	
                        Hypermarkets	
  (10)	
               100	
              1.5billion	
  
                                                    Holdings	
  Bhd	
                         Emporiums	
  (18)	
  
                                                                                              Bazaar	
  (3)	
  
                                                                                              Mini	
  Market	
  (54)	
  
                                                                                              Convenient	
  store	
  (9)	
  
                                                                                              Franchise	
  (6)	
  

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Strategic management - retail sector (tesco)

  • 1. Strategic  Management   Industry  :  Retail   Synergy   Presented  by  :   Mohd  Farid  Awang   Norhaizum  Sahril  
  • 3. VISION   Our  vision  is  for  Tesco  to  be  most  highly  valued   by   the   customers   we   serve,   the   communiAes   in   which   we   operate,   our   loyal   and   commiCed   staff  and  our  shareholders;     to  be  a  growth  company;     a  modern  and  innovaAve  company  and  winning   locally,  applying  our  skills  globally.  
  • 6. OBJECTIVE     •  COMPETITIVE  STRATEGY   •  VALUE  CHAIN   •  MISSION  &  VISION   KEY  SUCCESS  FACTOR   SWOT   PASTEL   ASSIST   MACRO  ENVIRONMENT   COMPETITION  ENVIRONMENT  
  • 7. Q  :  What  is  Tesco   strategy  to  build  a     sustainable    compeAAve     advantage?   Cost   Leadership   DifferenHaHon  
  • 9. TESCO  news     (IdenHfy  AcHon  &  AcHviHes)   •  PromoAon   •  Press  release   •  ObservaAon  
  • 10. Tesco  aims  to  convert  all  stores  to   ‘Extra’  format   Friday,  21  September  2012     Tesco  Stores  (M)  Sdn  Bhd  (Tesco)  aims  to  relaunch  all  of  its  naHonwide  stores  with  the  ‘Extra’   format  within  a  few  years,  its  chief  execuHve  officer  (CEO)  Sung  Hwan  Do  said. The  “Extra”  format,  an  innovaHve  hypermarket  format  adopted  in  all   Tesco  stores  worldwide,  supports  and  caters  to  the  wider  needs  of   small  businesses  apart  from  our  end-­‐user  customers,  offering  extra   services,  choices  and  faciliHes  to  Tesco  customers.     The  new  concept  not  only  offers  new  range  of  products  at  low  prices,   but  also  offers  an  array  of  shops  and  kiosks  in  the  mall  area,  which   includes  a  new  food  court,  playland,  addiAonal  automated  teller   machines,  WiFi,  mobile  and  telecommunicaAon  shops  and  an   improved  car  park  system.     The  new  flagship  Tesco  Extra  MuHara  Damansara,  which  first  opened   in  2003,  had  undergone  a  five-­‐month  long  renovaHon  period  to  unveil   a  modernised  look,  offering  a  wider  variety  to  customers  under  one   roof.  
  • 11. COLLABORATE  WITH  INTERNATIONAL   PLAYER    The  Star  Online  >   Friday  October  5,  2012     Samsung  products  to  be  sold  at  Tesco  Extra     SAMSUNG  Malaysia  Electronics  has  partnered  Tesco  to  introduce  Samsung  World  shop-­‐in-­‐shop  (SIS)   concept  retail  experience  to  a  hypermarket.     Aptly  named  Samsung  World,  the  partnership  culminated  in  a  launch  event  held  at  Tesco  Extra  MuAara  Damansara,   which  was  recently  refurbished  to  offer  a  whole  new  shopping  experience  to  customers.  The  strategic  collaboraAon  with   Tesco  Stores  (Malaysia)  Sdn  Bhd  entails  a  designated  area  within  Tesco  Extra  stores  that  features  Samsung’s  latest  range   of  innovaAve  products.     Aimed  at  providing  patrons  of  Tesco  Extra  with  a  different  retail  experience  and  a  beCer  understanding  of  Samsung’s   range  of  smart  living  soluAons,  Samsung’s  trained  product  experts  will  also  be  assigned  at  Samsung  World,  facilitaAng   consumers  and  providing  insights  on  the  latest  Samsung  innovaAons,  ranging  from  audio-­‐visual  products,  mobile  phones,   digital  appliances,  digital  imaging  devices  and  IT  products.     “In  addiAon  to  designing  and  manufacturing  state-­‐of-­‐the-­‐art  products  to  provide  beCer  soluAons  to  consumers’  daily   rouAnes,  Samsung  is  also  commiCed  in  ensuring  our  customers  receive  the  best  user  experiences,  be  it  ader  they  have   purchased  the  products  or  at  retail  level.   Latest  offerings:  Kwon  (led)  introducing  Samsung’s  range  of  televisions  to  Do.  Latest  offerings:  Kwon  (led)  introducing   Samsung’s  range  of  televisions  to  Do.     “We  are  honoured  and  excited  to  partner  Tesco  in  providing  a  brand  new  retail  experience  through  Samsung  World,   which  will  help  customers  beCer  understand  Samsung  products  and  how  they  can  enhance  users’  lives,”  said  Samsung   Malaysia  Electronics  managing  director  Kwon  Jae  Hoon.  
  • 12. EXPAND  MARKET  SEGMENT  (SMES)  &   CONVENIENT  SHOPPING  EXPERIENCE  
  • 13. JOINT  VENTURE  WITH  MALAYSIAN   COMPANY  
  • 14. FOCUS  ON  HOUSE  BRAND  
  • 15. STRENGTHEN  SUPPLY  CHAIN   RM60mio  :  Fresh  Food  DistribuAon  Centre   •  Chilled  environment   •  Three   different   temperature   zones:   -­‐26°C   for   frozen   foods;   1°C;   and  12°C  for  other  fresh  produce  
  • 16. STRENGTHEN  SUPPLY  CHAIN   RM300  million  Non-­‐chilled  distribuAon  centre  
  • 17. BUILD  LOYAL   CUSTOMER   Aggressive  markeAng   -­‐  Direct  aCack  GIANT   Focus  :Lowest  Price  
  • 18. Tesco Stores (Malaysia) Sdn Bhd :: Tesco is #1 For Great Prices http://www.tesco.com.my/html/press_release_details.aspx?ID=107&PID... BUILD  LOYAL   Connect with Us CUSTOMER   STORE LOCATOR | CONTACT US 0 Find your nearest Tesco Stores PROMOTIONS TESCO STORES OUR BRANDS CLUBCARD Tesco is #1 For Great Prices About Us Our Values KUALA LUMPUR, April 24, 2012 – Tesco Stores (Malaysia) Sdn. Bhd. (Tesco Malaysia) today launched its #1 for Great Prices Our History campaign to help its customers to save more. Customers will see the prices of some 600 essential items throughout Tesco’s 45 stores Our Strategy nationwide with discounts up to 30 percent. Datuk Sri Ismail Sabri Bin Yaakob, Minister of Domestic Trade, Cooperatives and Consumerism was on hand to launch Tesco’s #1 for Media Great Prices campaign and he was accompanied by SungHwan Do, CEO and Vivian Yap, Director of Marketing at Tesco Malaysia. Press Release In the News SungHwan Do, CEO of Tesco said, “At Tesco, our core purpose is to create value for our customers to earn their lifetime loyalty. As the No 1 retailer in Malaysia*, we continue to lead with our “#1 for Great Prices” campaign, and helping the customer to save more Contact the Press Office with lowest prices on daily essential items. To thank our customers for their support, Tesco has doubled its investment in the #1 for TESCO  to  be  the   Great Prices campaign from RM21 mil last year to RM40 mil this year.” Vivian Yap, Marketing Director of Tesco Malaysia said, “For over 10 years, Tesco has been investing in lowering prices for the Champion  of   customers. This year, we have made it even bigger, helping customers to spend less by cutting the prices of over 600 items for the long term. We are offering these price cuts above our already low prices and while still maintaining the high standards of quality and freshness our customers have always enjoyed. We also offer a range of Tesco Own Brands such as Tesco Choice that matches the lowest  price   leading brand quality but with 20% lower prices. We have over 4000 lines ranging from food to house hold items and some of the top selling Tesco branded items are Tesco Choice Sweetened Creamer, Tesco Choice Cola 1.5L and Tesco Choice Dishwashing Liquid.” Customers can look forward to even lower prices than usual for XL sized prawns, vegetables as well as grocery items like milk powder, diapers, detergent and many more. According to Do, “At Tesco, we get to keep our prices low given that we buy our stock in large quantities. We also check on our competitors’ prices for 6,000 items to ensure that we always offer the best price. We will continue to do our part to bring prices down and benefit our loyal customers because we care.” retailer   Just recently, Tesco Malaysia announced that it has delivered yet another strong performance with a sales growth of 12% for financial year 2011/2012. The double digit sales growth is a clear indication that Tesco is the shopping destination for its great prices, great quality and great range. Based on an independent customer panel survey conducted by Kantar Worldpanel Malaysia, Tesco is the Number 1 Retailer in Peninsular Malaysia, based on Market Share Value Sales. Back to "Press Release" | CORPORATE | CAREERS | COMMUNITY | HALAL STATEMENT | PRIVACY POLICY | TERMS & CONDITIONS | TESCO PLC | Powered by WebLITE © Copyright 2012 Tesco Stores (Malaysia) Sdn Bhd. All Rights Reserved.
  • 20. Tesco Stores (Malaysia) Sdn Bhd :: TUKAR program proven a success! http://www.tesco.com.my/html/press_release_details.aspx?ID=107&PID... BUILD  GOOD  RELATIONSHIP   Connect with Us WITH  GOVERNMENT   STORE LOCATOR | CONTACT US 0 Find your nearest Tesco Stores PROMOTIONS TESCO STORES OUR BRANDS CLUBCARD TUKAR program proven a success! About Us Our Values Puchong, Friday, January 27, 2012 – It seemed to be an insurmountable task for single mother Jessica Wong, 42, to transform her Our History seven-year-old traditional kedai runcit into a modern convenience store that is able to appeal to more customers. Nevertheless, thanks Our Strategy to the Government’s TUKAR programme and Tesco Stores (Malaysia) Sdn Bhd (Tesco), Wong’s dream to grow her business became TESCO  is  a   a reality. Media “I have been running my store single-handedly over the years. The store has changed little since the day it opened. I realised I had to Press Release modernise it if I were to make a better life for me and my 14-year-old daughter but I do not have the means nor the know-how to make In the News strong   my store more modern and appealing. That was why I was immediately drawn to the TUKAR programme when it was announced almost a year ago,” explained Wong, the owner of Pasar Mini Harvest Packaging Sdn Bhd. Contact the Press Office TUKAR (Transformasi Untuk Kedai Runcit) is one of the Entry Point Projects in the Wholesale and Retail National Key Economic Area supporter  to   of the Economic Transformation Programme. It involves large multinational retailers such as Tesco helping traditional small retailers modernised their stores in order to increase sales and be more competitive by streamlining the business processes and exposing them to best practices, enhancing customer service quality, and improving the cost effectiveness of their supply chain. Malaysia   Pasar Mini Harvest Packaging successfully underwent a two-month transformation exercise led by Tesco. During this period, Tesco’s dedicated TUKAR personnel advised Wong in terms of the shop’s layout, product range, product mix, product schematics and display, and training on modern store operations management. government   The re-opened Pasar Mini Harvest Packaging was officiated today by Tan Sri Dato’ Muhyiddin Yassin, Deputy Prime Minister of Malaysia. Also present were Dato’ Seri Ismail Sabri Yaakob, Minister of Domestic Trade, Cooperatives and Consumerism, and SungHwan Do, Chief Executive Officer of Tesco Malaysia. The revitalised Pasar Mini Harvest features a fresh coat of paint, new signboard and front façade, a modern store layout, improved lighting, increase staff count, introduction of new services such as photocopy, ePay for Touch n Go, Astro bills payment counter, mobile money transfer as well as a new cashier counter. “At the end of the day, it is results that matter. On this score, I am very happy to note that in the first three weeks after I reopened, I realised a remarkable 15% jump in sales. What’s more, my customers continue to tell me how much they appreciate the new layout, iniAaAve   improved convenience and enhanced ambience of my store, especially with a 30% increase in customer traffic. This alone is enough for me to encourage my fellow kedai runcit owners to seriously consider participating in the TUKAR programme,” Wong concluded. To-date, Wong’s store has seen a steady increase of 60% in sales volume. Tesco Malaysia has transformed 101 stores under the TUKAR Programme in 2011. These stores are located throughout nine states in Malaysia specifically Selangor, Wilayah Persekutuan, Negeri Sembilan, Melaka, Johor, Perak, Penang, Kedah and Pahang. Tesco also initiated a pilot transformation involving two shops whereby a total of RM150,000 was invested in both transformation. For more information on the TUKAR Programme, please visit the Ministry of Domestic Trade, Cooperatives and Consumerism website http://www.kpdnkk.gov.my or to email directly to tukar@my.tesco.com for a pre-consultation. Back to "Press Release" | CORPORATE | CAREERS | COMMUNITY | HALAL STATEMENT | PRIVACY POLICY | TERMS & CONDITIONS | TESCO PLC | Powered by WebLITE © Copyright 2012 Tesco Stores (Malaysia) Sdn Bhd. All Rights Reserved.
  • 21. Tesco Stores (Malaysia) Sdn Bhd :: Tesco pledges to plant 500,000 trees ... http://www.tesco.com.my/html/press_release_details.aspx?ID=107&PID... Connect with Us BUILD  GOOD  RELATIONSHIP   WITH  GOVERNMENT   STORE LOCATOR | CONTACT US 1 Find your nearest Tesco Stores PROMOTIONS TESCO STORES OUR BRANDS CLUBCARD Tesco pledges to plant 500,000 trees in Malaysia About Us Our Values Kepong, Friday, January 13, 2012 – Tesco Stores (Malaysia) Sdn Bhd (Tesco) and the Malaysian Timber Industry Board (MTIB) Our History today inked a Memorandum of Understanding (MoU) to mark its partnership for a Greener Earth Tree Planting programme. Our Strategy The MoU, signed by Tesco Malaysia and MTIB is to establish a cooperative effort to plant 500,000 trees throughout the country within three years to help meet the country’s target of planting 26 million trees. Media Press Release According to the MoU, Tesco will spend a total of RM4 million to plant 500,000 ‘vulnerable’ agarwood trees with MTIB’s guidance and In the News expertise in the area. The programme is part of a bigger Greener Earth initiative by Tesco Malaysia to protect our environment and help reduce its carbon footprint and is partly funded by the sale of plastic bags sold on No Plastic Bags Day nationwide. Contact the Press Office TESCO  to  prove   The MoU was signed by SungHwan Do, Chief Executive Officer of Tesco Malaysia and Dr. Jalaluddin Harun, Director General of MTIB. The signing ceremony was witnessed by Dato’ Madius Tangau, Chairman of MTIB. Dato’ Madius Tangau said in his speech that, “A lot of effort on planting of trees have already been initiated by several government they  concern  on   agencies, as well as the private sector as part of their CSR activities. All these measures contribute to keep at least half of the country under forest cover as well as reforested. “Restoring our earth with trees will create places of beauty and enjoyment; help clean our air and more importantly, it will help sequester the carbon dioxide that man's industry, power generation, commerce, transport and building releases into the air,” he Green  iniAaAve   added. Dato’ Madius Tangau lauded the partnership, and hoped it becomes the basis and foundation of many more scientific and educational green activities for Malaysians and calls for similar collaborations between the corporate sector and the government in the future. Do said, “The Greener Earth Programme is our latest initiative to protect our environment while engaging our customers to do the same. Tesco Malaysia to date has reduced its carbon footprint by 42 per cent since we embarked on our green initiatives in 2008. Every effort such as today’s MoU Signing signifies our commitment toward a Greener Earth, bringing us closer to our target of being a carbon neutral business by 2050.” Through this programme, Tesco and MTIB will plant 160,000 trees in 2012 and 170,000 in 2013 and 2014 respectively. Do also said that the Greener Earth programme will soon engage Tesco customers more actively to be more involved in reducing their own impact on the environment.” The first Greener Earth tree planting activity was held on December 17, 2011 where 450 volunteers from Tesco, MTIB and the public planted over 1000 trees in Taman Wawasan, Putrajaya. Selangor, Johor and Melaka are amongst the states identified as next locations for the Greener Earth tree planting activities in 2012. Apart from tree planting, Tesco has taken many environmental initiatives such as its Green Clubcard Points scheme in June 2008 to encourage and reward customers for their green behaviour by bringing their own reusable carrier bags. Through this scheme, over 10 million Green Clubcard points have been rewarded to 100,000 of its Clubcard members and has helped to reduce more than 81 million carrier bags from going to landfill. All of Tesco stores have also been fit with energy saving lighting, air-conditioning and refrigeration system with a cumulative investment amounting RM43.3 million. Back to "Press Release" | CORPORATE | CAREERS | COMMUNITY | HALAL STATEMENT | PRIVACY POLICY | TERMS & CONDITIONS | TESCO PLC | Powered by WebLITE © Copyright 2012 Tesco Stores (Malaysia) Sdn Bhd. All Rights Reserved.
  • 22. Tesco Stores (Malaysia) Sdn Bhd :: China Gets a Taste of Malaysian Products http://www.tesco.com.my/html/press_release_details.aspx?ID=107&PID... BUILD  REPUTATION   Connect with Us AMONG  SUPPLIER   STORE LOCATOR | CONTACT US 0 Find your nearest Tesco Stores PROMOTIONS TESCO STORES OUR BRANDS CLUBCARD China Gets a Taste of Malaysian Products About Us Our Values BEIJING, Sunday, May 8, 2011 – What better way to showcase the appeal of Malaysian-made products than by making it available to Our History consumers in the capital of the world’s most populated country and fastest growing economy. In a bid to help enhance the Our Strategy internationalisation of Malaysian products, primarily those produced by home-grown SMEs (small & medium-sized enterprises), Tesco Malaysia launched Taste of Malaysia at Tesco Store Happy Valley, Beijing here today. Media Taste of Malaysia will be an international foods section in the hypermarket that solely features Malaysian brands and products, for a Press Release two week period beginning today. There will be a total of 91 food and beverage product lines being showcased in the section. 59 are In the News new to the section brought it especially through Tesco’s Taste of Malaysia programme. This is in addition to the 32 products already listed in Tesco China, paving the way for other Malaysian SME-made products. Some of the leading Malaysian brands being featured Contact the Press Office include Nona, Alif, Pitaberry, Iceberry, Mascafe, Slera and Pertima, amongst a total of 18 suppliers. TESCO  to  prove   The Taste of Malaysia section will be available to Tesco Store Happy Valley shoppers from today. In addition, there will also be promotions for a two week period spearheaded by Tesco to entice consumers to sample Malaysian products YB Dato' Sri Ismail Sabri Bin Yaakob, the Minister of Domestic Trade, Cooperatives and Consumerisme, was at hand to officiate the launch of Taste in Malaysia this afternoon. Also present was Tjeerd Jegen, CEO of Tesco Malaysia and Sophia Zhong, Commercial Director of Tesco China (North). they  could  offer   beCer  market   Tjeerd said, “Buatan Malaysia or Malaysian-made products are comparable in terms of quality and value for money to some of the world’s leading brands. These products will undergo a promotion period of two weeks to assess customer acceptance of the product and should they meet the Chinese consumers flavour, we will consider supplying these products for the long term. These very brands do well in Malaysia and we believe that they will do just as well here.” According to Tjeerd, Tesco Stores Malaysia is happy to help Malaysian brands acquire greater exposure in the international marketplace. “Tesco has been growing positively in Malaysia over the last decade. It has been a mutually beneficial relationship and access  for  their   suppliers   we want to further add value by leveraging on our international presence as one of the largest retailers in the world to help grow Malaysian brands,” Tjeerd concluded. The launch of the first Taste of Malaysia this year in China shows the significance of China in the world retail market and for Tesco. China holds great potential and we would like to support our suppliers to tap into this great opportunity, he added. The launch of Taste of Malaysia was followed by a special cooking demonstration conducted by Malaysia’s very own celebrity chef, Chef Muluk. In addition to showcasing his culinary skills, he also introduced Malaysian delights to curious Chinese shoppers. Most of the ingredients used in Chef Muluk’s recipes are featured in the Taste of Malaysia section. Back to "Press Release" | CORPORATE | CAREERS | COMMUNITY | HALAL STATEMENT | PRIVACY POLICY | TERMS & CONDITIONS | TESCO PLC | Powered by WebLITE © Copyright 2012 Tesco Stores (Malaysia) Sdn Bhd. All Rights Reserved.
  • 23. CLEARLY  STATED  CUSTOMER  RIGHT   Shop  with  confidence!     •  We  welcome  all  customers.  No  membership  is  required.   •  If  you  are  unsaHsfied  with  your  purchase,  you  may  return  your  purchase(s)  together  with  the  original   receipt  within  7  days  from  the  date  of  purchase.   •  Return  policy  does  not  apply  to  display  items  or  items  from  stock  clearance  promoHons   •  Return  policy  does  not  apply  to  fresh  produce,  frozen  goods,  cameras,  mobile  phones,  computer   (including  peripherals)  and  undergarments.   •  Tesco  Value,  Tesco  Choice  and  Tesco  Finest  products  are  not  to  be  sold  commercially.  If  you  are   unsaHsfied  with  the  quality  of  any  of  our  Tesco  Value,  Tesco  Choice  or  Tesco  Finest  products,  you  may   return  your  purchase(s)  with  the  original  receipt  to  us  within  28  days  from  the  date  of  purchase  and  we   will  either  make  a  replacement  or  remit  a  full  refund.       Always  in  stock!         Delivery  service  for  your  convenience!     •  Free  delivery  service  (up  to  30km)  is  available  for  electronic  goods.  A  charge  of  RM2.50/km  will  be  levied   beyond  the  30th  km.   •  Delivery  service  is  offered  for  goods  that  have  been  purchased  in  bulk  by  Biz  Clubcard  members    
  • 24. EXPAND  MARKET  SEGMENT   FOCUS  ON  HOUSE  BRAND   AcquisiAon  of  MAKRO  Cash  &  Carry   Produce  more  range  of  House  Brand     •  To  tap  SMEs  market   •  TESCO  value  –  affordable  range.     •  TESCO  choice  –  quality  products.   •  TESCO   light   choice   –   nutriAous   low-­‐calorie   food.   FOCUS  ON  PROFITABLE  AREA   •  TESCO  finest  –  premium  ingredients   Exit  non-­‐profitable  market   •  BanAng  &  Senawang     JOINT   VENTURE   WITH   LOCAL   PLAYER   Equity  Partner  –  Sime  Darby   •  70:30   BUILD  GOOD  RELATIONSHIP  WITH   GOVERNMENT   •  MOU  with  Malaysia  InternaAonal   Timber  Board   BUILD  REPUTATION  AMONG  SUPPLIER   •  TESCO  is  one  of  enabler  for  TUKAR   Support  local  SMEs   programme   •  Bulk  purchase  for  local  small  retailer     •  Introduce  local  products  to  TESCO   oversea   STRENGTHEN  SUPPLY  CHAIN   Established  distribuAon  centre   BUILD  LOYAL  CUSTOMER   •  Simpang  Pulai  :  fresh  products     •  Clubcard   •  Bukit   Beruntung   :   grocery,   •  Campaign   for   the   no   1   of   great   price   electronics,   high   tech   and   retailer     apparel   •  Fresh  vegetables   COLLABORATE  WITH  SAMSUNG   CLEARLY  STATED  CUSTOMER  RIGHT  
  • 25. WHAT  IS  TESCO  STRATEGY  TO  BUILD  A     SUSTAINABLE    COMPETITIVE    ADVANTAGE?   COLLABORATE  WITH  SAMSUNG   FOCUS  ON  HOUSE  BRAND   TESCO  FOCUS  ON  COST-­‐LEADERSHIP   STRENGTHEN  SUPPLY  CHAIN   Established  distribuAon  centre   BUILD  LOYAL  CUSTOMER   •  Simpang  Pulai  :  fresh  products     •  Campaign   for   the   no   1   of   great   price   •  Bukit   Beruntung   :   grocery,   retailer   electronics,   high   tech   and   apparel  
  • 26. MACRO  ENVIRONMENT   Industry  Growth   Government   Social  forces   Support  &  Policies   RETAIL   INDUSTRY   Rules  &   Technology   RegulaHons  
  • 28. GOVERNMENT  FULLY  SUPPORT  WHOLESALE   AND  RETAIL  GROWTH   "  Within   the   next   10   years,   Malaysia   government     through   EPP   aimed   to   carry   RM17.4   billion   investment    in  order  to  contribute  RM8.5  billion   GNI  and  create  68,600  jobs  by  2020.  
  • 29. REGULATORY  POLICIES  TO  PROMOTE  HEALTHY   COMPETITION  ENVIRONMENT    
  • 31. ONLINE  MARKET  (LOCAL)  OPPORTUNITY   Online  purchase  &  Virtual  Store  
  • 32. ONLINE  MARKET  (GLOBAL)  OPPORTUNITY   Online  purchase  &  Virtual  Store  
  • 33. CHANGES  IN  SOCIAL  FORCES   •    Based   on   2010   Census,   Malaysia’s   total   populaHon   stood   at   28.3   million   with   a   populaHon   density   of   86   persons   per   square   kilometer.   The   naHon’s   capital,   Kuala   Lumpur,   has   a   populaHon   of   around     1.67   million  and  a  much  higher  density  of  6891  persons  per   square   kilometer.   Although   East   Malaysia   makes   up   60%  of  Malaysia’s  landmass,  it  only  accounts  for  20%   of  the  country’s  populaHon.   •    Over   the   last   11   years,   Malaysia’s   populaHon   has   been  growing  at  a  steady  rate  of  2.0%  per  annum.  The   country   is   experiencing   an   increase   in   rural   to   urban   migraHon.   The   average   age   of   Malaysian   populaHon   is   young  at  26  years  old  and  the  average  life  expectancy   stands  at  over  73  years.  
  • 34. INCOME/BUYING  POWER   -­‐   Malaysia   is   classified   as   an   upper-­‐middle  income  country,   and   considered   as   one   of   the   m o s t   d e v e l o p e d   o f   t h e   developing  countries.   The   proporHon   of   middle   income   households,   defined   as   those   earning   between   RM2,841   and   MYR4,025   per   month,   has   increased   from   6.5%  in  2009  to  9.2%  in  2007.       -­‐  On  average,  household  living   in   urban   areas   spent   1.5   Hes   more  than  households  living  in   r u r a l   a r e a s .   A v e r a g e   h o u s e h o l d     s p e n d i n g   expenditure   is   stands   at   RM2190  per  month    
  • 37. CONSUMER  BEHAVIOR   Average  household  spending  palerns:   -­‐  Malaysians  spend  a  high  percentage  of  their  household  income  on  food,  groceries   and  personal  care  items,  ranking  third  out  of  the  ten  major  economies  in  the  Asia-­‐ Pacific  region  (excl.Japan)   -­‐  According  to  ACNielsen,  Malaysians  on  average  spent  MYR505  per  month  on  food   and  groceries,  with  just  half  of  hat  on  fresh  food  like  meat,  fruits  and  vegetables.     Lifestyles/Shopping  habits:   -­‐ Malaysia’s  consumer  lifestyle  has  been  evolving  and  changing  due  in  part  to  rising   affluence  and  educaHon  levels.   -­‐ High  profile  internaHonal  retailers  and  the  global  mass  media  have  also  played  a   hand  in  shaping  consumer-­‐buying  behavior.   -­‐ Malaysians  are  becoming  more  westernized,  sophisHcated  and  cosmopolitan.   -­‐ Since  the  emergence  of  the  foreign-­‐owned  hypermarkets,  Malaysians  who  lived=   in  urban  have  become  accustomed  to  shopping  for  groceries  at  hypermarkets  and   supermarkets.   -­‐ Meanwhile  rural  people  conHnue  to  purchase  from  tradiHonal  grocers,   convenience  stores  and  mini-­‐marts  
  • 41. MAJOR  RETAIL  PLAYERS   Ran Group  Name   Ownership   Retail  Formats   Number  of   2011  Net  sales   king   Stores   1   Dairy  Farm  Giant  Retail   Diary  Farm   Supermarket/ 125   na   InternaHonal   superstores  (54)    and   hypermarkets  (71)   2   TESCO  PLC   JV    (70%  TESCO  PLC  :   Hypermarkets     46   3.53  billion   30%  Sime  Darby)   3   Carrefour    Group   Carrefour  Group   Hypermarkets   26   1.8  billion   4   Econsave  Cash  &  Carry     Econsave  Cash  &  Carry   Supermarkets/ 29   700  million   Sdn  Bhd   hypermarkets   5   MYDIN   Mydin  Mohamed   Hypermarkets  (10)   100   1.5billion   Holdings  Bhd   Emporiums  (18)   Bazaar  (3)   Mini  Market  (54)   Convenient  store  (9)   Franchise  (6)  
  • 42. STRATEGIC MAPPING High     PRICE/QUALITY   CARREFOUR   TESCO   ECONSAV MYDIN         E   Low       GIANT   Few  LocaHons   Many  LocaHons     GEOGRAPHIC  COVERAGE    
  • 43. •  High startup cost IF consumers see little •  Small market   WEAK  Threat  of     difference between New  Entrants   the Price - they will tend to choose on price. STRONG  Rivalry   HIGH  Bargaining   WEAK  Bargaining     Among  Current     Power  Of  Suppliers   Power  of  Buyers   CompeAtors   supermarkets dictate the •  If a single item too price they pay to the expensive in Tesco, supplier   buyers will exercise their power and WEAK  Threat     move to Giant which of  SubsAtute   can be easily access Products   •  Time consuming 43   •  Selling similar products •  Offer similar services  
  • 44. KEY  SUCCESS  FACTOR   1.  INCREASE  IN  INTERNAL  DEMAND   2.  GOVERNMENT  SUPPORT   3.  REGULATORY  POLICIES  TO  PROMOTE  HEALTHY   COMPETITION  ENVIRONMENT     4.  HIGH  BARGAINING  POWER  OVER  CUSTOMER  &  SUPPLIER   5.  CHANGES  IN  SOCIAL  FORCES   6.  GOOD  INFRASTUCTURE  FOR  ONLINE   7.  GOOD  SUPPLY  CHAIN  MANAGEMENT     (SOFTWARE  &  HARDWARE)  
  • 45. Opportunity   Threat  
  • 46. ASSESSMENT  OF  INTERNAL  FACTORS  FOR  STRATEGIC  ADVANTAGE  (ASSIST)   (RANKING  STRENGTH  AND  WEAKNESSES)                        Value      Rareness      Imitability              Sustainability   LIST  UNDER  RESOURCES   S2  :  Fresh  DC     S2          DisAncAve    DisAncAve    CompeAAve    PotenAal   S3  :  Non-­‐chilled  DC          CompeHHve    CompeHHve    CompeHHve    PotenHal   S5  :  Standard  lay-­‐out          CompeHHve    PotenHal    PotenHal    PotenHal   S6  :  Tesco  Hypermarkets          CompeHHve    PotenHal    PotenHal    PotenHal   S7  :  House  Brand         S3      CompeAAve    PotenAal    PotenAal                  CompeAAve   S8  :  Tesco  Extra   S5            DisAncAve    DisAncAve    PotenAal                  CompeAAve   S9  :  Tesco  Clubcard  and  Biz  Clubcard      CompeHHve    CompeHHve    PotenHal    PotenHal   S11  :  Tesco  VALUE         S4      DisAncAve    PotenAal    PotenAal                    CompeAAve   W4  :  Low  sales  volume  for  Tesco  Extra    DisHncHve    CompeHHve    CompeHHve    PotenHal   W5  :  Small  margin            DisAncAve    CompeAAve    CompeAAve                      DisAncAve   W3   W6  :  High  A&P  cost          DisHncHve    CompeHHve    CompeHHve    PotenHal   W7  :  High  capital  investment       W2    DisAncAve    CompeAAve    CompeAAve                      DisAncAve     LIST  UNDER  CAPABILITIES   S1  :  High  bargaining  power   S1        DisAncAve    CompeAAve    PotenAal                  CompeAAve   S4  :  The  applicaHon  of  ERP  system      DisHncHve    PotenHal    PotenHal    PotenHal   S10  :  Focus  on  customer  service      DisHncHve    CompeHHve    PotenHal    PotenHal   W1  :  Certain  supplier  dictate  price     W4    DisAncAve    PotenAal    PotenAal                        PotenAal   W2  :  No  Online  Shopping  capability     W5      DisAncAve    DisAncAve    CompeAAve                        PotenAal   W3  :  High  bargaining  power  of  retail  customer  DisAncAve   W1    CompeAAve    CompeAAve                      DisAncAve    
  • 47. VALUE  CHAIN  FOR  TESCO   (BASED  ON  PORTER  ORIGINAL)   W2,W3   DC,  FINANCE   TRAINING   W2   L SYSTEM   O W   SUPPLIER  MGT   M A R G I N   S1,S2,W4   S5,W1   S4   W5  
  • 48. VALUE  CHAIN  FOR  TESCO   (BASED  ON  PORTER  ORIGINAL)   W2,W3   DC,  FINANCE   TRAINING   W2   L SYSTEM   O W   SUPPLIER  MGT   M A R G I N   S1   S5,W1   S4   S2,W4   W5  
  • 49. S1    High  bargaining  power  over  supplier     W1  High  bargaining  power  of  customer      (capabili8es)    (capabili8es)     S2    Fresh  DC  (Resources)         W2  High  capital  investment  (Resources)   S3  House  Brand  (Resources)       W3  Small  margin  (Resources)       S4  Tesco  VALUE  (Resources)       W4  Certain  supplier  dictate  price   S5  Tesco  Extra  (Resources)        (capabili8es)       W5  No  Online  (capabili8es)       SW O1  Online  shopping     O T O2    Co-­‐operate  with  Malaysian  Government      to  setup  1  Malaysia  Mall   O3  Open  branch  in  East  Malaysia  &  East     T1    Decreasing  in  Internal  Demand    Coast  (TESCO  EXTRA)   T2  1  Malaysia  Mall   O4  Acquire  small  &  medium  local  retailers   T3    Merger  of  current  compeHtor   O5  More  house  brand  (OEM  for  1Malaysia     T4  Entrance  of  new  player    Brand)   O6  Form  Halal  Supermarket      
  • 50. RECOMMENDATION   (to  be  compeAAve)   •  COMPETITIVE  STRATEGY   •  VALUE  CHAIN   •  MISSION  &  VISION   SUSTAINABLE  COMPETITIVE  ADVANTAGE  
  • 51. COMPETITIVE  STRATEGY   Current   Future   Groceries  -­‐  Online  
  • 52. VALUE  CHAIN  FOR  TESCO   LOWER  CAPITAL  INVESTMENT   DC,  STORE   REDUCE  MAN  POWER   TRAINING   UPGRADING  SYSTEM  (ONLINE)   L SYSTEM   O W   SUPPLIER  MGT   M A Sales  &   R INVENTORY   DISTRIBUTION   TESCO   WHOLSALE,   Services   G PURCHASE   CENTRE   TESCO  EXTRA   (TESCO  VALUE   I &  TOM)   N  
  • 53. VISION  &  MISSION   NEW  VISION   Dedicated  to  deliver  fresh  and  quality  groceries   at  the  lowest  price  to  all  over  Malaysia     NEW  MISSION   Offer  customer  a  whole  new  shopping   experience  for  a  quality  products  at  lower  price  
  • 54. SUSTAINABLE  COMPETITIVE   ADVANTAGE   Ø Focus  low-­‐cost  strategy  within  a  narrow   buyer  segment  (market  niche)  –  Focus  on   suplying  Fresh  &  Quality  groceries  (make   use  of  Chilled-­‐DC  in  Simpang  Pulai).   Target  market  :  family   Ø Introduce  ONLINE  shopping  
  • 55. WAY  FORWARD   "   Malaysian   saw   the   growth   of   the   large   format   retail   sub-­‐sector   today;   121   hypermarkets,   113   superstores   and   133   departments   stores   run   by   local   and   foreign   operators,   bringing   beler   quality,   wider   choice,   lower   product   cost,   greater   product   availability   and   new   retailing   technology   and   skills.       "   Within   the   next   10   years,   Malaysia   government     through   EPP   aimed   to   carry   RM17.4   billion   investment     in   order   to   contribute  RM8.5  billion  GNI  and  create  68,600  jobs  by  2020.   "   TESCO  sHll  have  the  opportunity  to  re-­‐strategize  their  business   in  Malaysia  
  • 57. ASSESSMENT  OF  INTERNAL  FACTORS  FOR  STRATEGIC  ADVANTAGE  (ASSIST)   (RANKING  STRENGTH  AND  WEAKNESSES)                        Value      Rareness      Imitability              Sustainability   LIST  UNDER  RESOURCES   S2  :  Fresh  DC     S2          DisAncAve    DisAncAve    CompeAAve    PotenAal   S3  :  Non-­‐chilled  DC          CompeHHve    CompeHHve    CompeHHve    PotenHal   S5  :  Standard  lay-­‐out          CompeHHve    PotenHal    PotenHal    PotenHal   S6  :  Tesco  Hypermarkets          CompeHHve    PotenHal    PotenHal    PotenHal   S7  :  House  Brand         S3      CompeAAve    PotenAal    PotenAal                  CompeAAve   S8  :  Tesco  Extra   S5            DisAncAve    DisAncAve    PotenAal                  CompeAAve   S9  :  Tesco  Clubcard  and  Biz  Clubcard      CompeHHve    CompeHHve    PotenHal    PotenHal   S11  :  Tesco  VALUE         S4      DisAncAve    PotenAal    PotenAal                    CompeAAve   W4  :  Low  sales  volume  for  Tesco  Extra    DisHncHve    CompeHHve    CompeHHve    PotenHal   W5  :  Small  margin            DisAncAve    CompeAAve    CompeAAve                      DisAncAve   W3   W6  :  High  A&P  cost          DisHncHve    CompeHHve    CompeHHve    PotenHal   W7  :  High  capital  investment       W2    DisAncAve    CompeAAve    CompeAAve                      DisAncAve     LIST  UNDER  CAPABILITIES   S1  :  High  bargaining  power   S1        DisAncAve    CompeAAve    PotenAal                  CompeAAve   S4  :  The  applicaHon  of  ERP  system      DisHncHve    PotenHal    PotenHal    PotenHal   S10  :  Focus  on  customer  service      DisHncHve    CompeHHve    PotenHal    PotenHal   W1  :  Nestle  high  bargaining  power     W4    DisAncAve    PotenAal    PotenAal                        PotenAal   W2  :  No  Online  Shopping  capability     W5      DisAncAve    DisAncAve    CompeAAve                        PotenAal   W3  :  High  bargaining  power  of  retail  customer  DisAncAve   W1    CompeAAve    CompeAAve                      DisAncAve    
  • 58. OPPORTUNITY   Budget  2013   Tesco  to  JV  with  local  retailer    to  form  a  Halal  Supermarket   and  expand  to  Islamic  Countries  
  • 60. MAJOR  RETAIL  PLAYERS   Ran Group  Name   Ownership   Retail  Formats   Number  of   2011  Net  sales   king   Stores   1   Dairy  Farm  Giant  Retail   Diary  Farm   Supermarket/ 125   na   InternaHonal   superstores  (54)    and   hypermarkets  (71)   2   TESCO  PLC   JV    (70%  TESCO  PLC  :   Hypermarkets     46   3.53  billion   30%  Sime  Darby)   3   Carrefour    Group   Carrefour  Group   Hypermarkets   13   na   4   Econsave  Cash  &  Carry     Econsave  Cash  &  Carry   Supermarkets/ 29   700  million   Sdn  Bhd   hypermarkets   5   MYDIN   Mydin  Mohamed   Hypermarkets  (10)   100   1.5billion   Holdings  Bhd   Emporiums  (18)   Bazaar  (3)   Mini  Market  (54)   Convenient  store  (9)   Franchise  (6)