Tesco Stores (Malaysia) Sdn Bhd

Prepared by:

Noor Ulfah Muhamad Zin 808504

Mohd Fhadli Mohd Fudzi 808493

            
 Overview of Retail Industry in Malaysia
 Tremendous growth since 1980s
 Around 400 retail outlets in Malaysia
 Foreign-owned hypermarket are fast gaining popularity in
Malaysia
Sales growth rate for the year 2010
4th Qtr 1st Qtr
21% 27% 1st Qtr
2nd Qtr
3rd Qtr
3rd Qtr 2nd Qtr
33% 19% 4th Qtr
Tesco: Then and Now
 Tesco History

 Founder: Jack Cohen in 1919 based in UK

 First product: Tesco Tea
 First store: Opened in 1929 in Burnt Oak
 Fourth-largest retailer- measured by revenues (after Wal-
Mart, Carrefour and Metro) and second-largest retailer-
measured by profits (after Wal-Mart)
 Tesco have 14 market all over the world including UK
 Leader in 5 countries: UK, Korea, Ireland, Thailand and Hungary
 Tesco Stores Worldwide

Czech
UK Republic
R.O. Ireland Poland
Slovakia
Hungary Korea
USA China
Turkey Japan

Thailand

India Malaysia
Comparison of Tesco market around the world
 Tesco Stores (Malaysia) Sdn Bhd

Company Overview
 Incepted on 29 November 2001
 Strategic alliance-Tesco PLC UK with local conglomerate, Sime
Darby Berhad of which the latter holds 30% of total shares
 First store in Malaysia-Puchong, Selangor (May, 2002)
 Currently operates 33 Tesco and Tesco Extra stores
 Acquired Makro Cash & Carry in Malaysia (Dec 2006) and
rebranded to Tesco Extra
 2009-Tesco as the number 1 Hypermarket in Malaysia.
Overview of Tesco Stores Malaysia Sdn Bhd

Tesco partner with Sime Darby

First Tesco store opened at

Puchong

Launched Tesco own brand, Tesco

Value

Tesco Malaysia launches its own

house brand, Tesco Choice

Tesco opens 4 more stores which at

Ipoh, Shah Alam Kajang and
Banting
Acquired Makro Cash and Carry

Tesco launched Clubcard

Tesco launched Tesco
Extra

Tesco launched Green Clubcard

and Green Bags
Tesco launched 50 Basic Needs
Guaranteed Not Beaten on Price

Tesco number 1 Hypermarket in

Malaysia
Tesco launched Tesco Light
Choices
Tesco launched Tesco - RHB
Credit/Debit Card to consumers
 TESCO Malaysia: Adoption of strategy
● Everyday Low ● To create value for
Price
customer to earn
● 50 Basic Needs
guaranteed not their lifetime
loyalty
beaten on prices
Customer
Low Price
Focused
strategy
strategy

Growth Diversify
strategy strategy

● Club card ● Core UK business

● Green club card ● Non-food business
● Own brand value
● Home brand:
● Community
● Personal Finance
Tesco Choice
 TESCO Malaysia: Management

 Tesco PLC has appointed Tjeerd Jegen as chief executive

officer (CEO) for Malaysia from April 26 2010
 Jegen replaced Chris Bush, who has taken over the helm at
Tesco Thailand
 Jegen will be responsible for all areas of the business, from
operations to marketing, finance and corporate affairs,
involving 33 stores and over 11,000 staff
 To this appointment, Jegen was the chief operating officer for
Thailand’s Tesco Lotus.
 Jegen began his retail career in 1995 when he joined Royal
Ahold as management trainee
 TESCO Malaysia: Business Operation
 Operates retail stores for fresh food, groceries, household
needs, and apparel in Malaysia
 Employs nearly 13,000 employees
 Operates 33 stores and in two formats. These are:

i. Tesco Hypermarket
ii. Tesco Extra Hypermarkets
 Tesco and Tesco Extra format

TESCO TESCO Extra

Current Tesco offer of: With Extra:

Low prices Provides products and
Broad range services focused for small
Great customer service businesses
Product quality  Bigger pack sizes
Strong mall offer Special trolleys
Special checkouts
Dedicated business
development team
Enhanced facilities
 Competitors and Competitor Analysis

Hypermarket Background Competitor Analysis

•Offer variety of products at the lowest possible prices
•Offer range of local merchandise, fresh local fruits,
vegetables, seafood within wet markets

•Offer customers merchandise of better value especially

on apparels
•Extends to financial services, restaurant
operations and shopping centre development

•Offer products such as grocery product, clothing,

consumer goods and household appliances besides
these commodity products
•Concept of fresh quality product at discounted price
and direct from producer to customer
•Wide range discounter, single focus on low income
Malays
•Limited choices
 Comparison of market share between hypermarket in
Malaysia for 2010
Market Share of hypermarkets in Malaysia

Others
9%

Tesc Tesco
30%
15%
Carrefou o Giant
r Jusco
Carrefour
Others

22%
Jusco
24%

Source: Planet Retail Giant

Stars@2010
 SWOT Analysis

Strengths
Own house brand-Tesco Choice
 Competitive pricing strategy
 Customer loyalty/relationship
 Acquisition of Makro
Strong hypermarket format
Weaknesses
 Dependable of UK business
 Burden of higher cost
 Foreign brand

Opportunities Threats
 Have ready customers-low and Stiff competition within industry
mid-income households Changing in customer tastes
Explore into new location in Government policies
Malaysia
Diversification to maintain UK
business