Strategic	  Management	      Industry	  :	  Retail	        Synergy	       Presented	  by	  :	      Mohd	  Farid	  Awang	  ...
VISION	  Our	  vision	  is	  for	  Tesco	  to	  be	  most	  highly	  valued	  by	   the	   customers	   we	   serve,	   th...
TESCO	  OperaAng	  Model	            (TOM)	  
OBJECTIVE	  	    •  COMPETITIVE	  STRATEGY	    •  VALUE	  CHAIN	    •  MISSION	  &	  VISION	     KEY	  SUCCESS	  FACTOR	  ...
Q	  :	  What	  is	  Tesco	     strategy	  to	  build	  a	  	  sustainable	  	  compeAAve	  	            advantage?	       ...
TESCO	  news	  	  (IdenHfy	  AcHon	  &	  AcHviHes)	        •  PromoAon	        •  Press	  release	        •  ObservaAon	  
Tesco	  aims	  to	  convert	  all	  stores	  to	  ‘Extra’	  format	                                      Friday,	  21	  Se...
COLLABORATE	  WITH	  INTERNATIONAL	                 PLAYER	    	  The	  Star	  Online	  >	    Friday	  October	  5,	  2012...
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	   d...
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...
BUILD	  LOYAL	  CUSTOMER	  
Tesco Stores (Malaysia) Sdn Bhd :: TUKAR program proven a success!                                       http://www.tesco....
Tesco Stores (Malaysia) Sdn Bhd :: Tesco pledges to plant 500,000 trees ...                               http://www.tesco...
Tesco Stores (Malaysia) Sdn Bhd :: China Gets a Taste of Malaysian Products http://www.tesco.com.my/html/press_release_det...
CLEARLY	  STATED	  CUSTOMER	  RIGHT	  Shop	  with	  confidence! 	  	  •  We	  welcome	  all	  customers.	  No	  membership	...
EXPAND	  MARKET	  SEGMENT	                      FOCUS	  ON	  HOUSE	  BRAND	                          AcquisiAon	  of	  MAK...
WHAT	  IS	  TESCO	  STRATEGY	  TO	  BUILD	  A	  	          SUSTAINABLE	  	  COMPETITIVE	  	  ADVANTAGE?	  COLLABORATE	  WI...
MACRO	  ENVIRONMENT	                                    Industry	  Growth	                                                ...
GOVERNMENT	  NURTURE	  INTERNAL	  DEMAND	  
GOVERNMENT	  FULLY	  SUPPORT	  WHOLESALE	                  AND	  RETAIL	  GROWTH	  "  Within	   the	   next	   10	   years...
REGULATORY	  POLICIES	  TO	  PROMOTE	  HEALTHY	        COMPETITION	  ENVIRONMENT	  	  
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	  ...
INCOME/BUYING	  POWER	  -­‐	   Malaysia	   is	   classified	   as	   an	  upper-­‐middle	  income	  country,	  and	   consi...
CONSUMER	  BEHAVIOR	  Average	  household	  spending	  palerns:	  -­‐	  Malaysians	  spend	  a	  high	  percentage	  of	  ...
TESCO	  COMPETITION	  ENVIROMENT	  
MAJOR	  RETAIL	  PLAYERS	  Ran                 Group	  Name	                             Ownership	                       ...
STRATEGIC MAPPING           High  	              	  PRICE/QUALITY	                            CARREFOUR	                TE...
•  High startup cost                                        IF consumers see little          •  Small market	            W...
KEY	  SUCCESS	  FACTOR	                  1.	  INCREASE	  IN	  INTERNAL	  DEMAND	                      2.	  GOVERNMENT	  SU...
Opportunity	     Threat	  
ASSESSMENT	  OF	  INTERNAL	  FACTORS	  FOR	  STRATEGIC	  ADVANTAGE	  (ASSIST)	                            (RANKING	  STREN...
VALUE	  CHAIN	  FOR	  TESCO	                   (BASED	  ON	  PORTER	  ORIGINAL)	            W2,W3	                        ...
VALUE	  CHAIN	  FOR	  TESCO	               (BASED	  ON	  PORTER	  ORIGINAL)	           W2,W3	                             ...
S1	   	  High	  bargaining	  power	  over	  supplier	  	       W1 	  High	  bargaining	  power	  of	  customer	  	        ...
RECOMMENDATION	              (to	  be	  compeAAve)	         •  COMPETITIVE	  STRATEGY	         •  VALUE	  CHAIN	         •...
COMPETITIVE	  STRATEGY	  Current	   Future	     Groceries	  -­‐	  Online	  
VALUE	  CHAIN	  FOR	  TESCO	          LOWER	  CAPITAL	  INVESTMENT	                                                       ...
VISION	  &	  MISSION	  NEW	  VISION	  Dedicated	  to	  deliver	  fresh	  and	  quality	  groceries	  at	  the	  lowest	  p...
SUSTAINABLE	  COMPETITIVE	             ADVANTAGE	  Ø Focus	  low-­‐cost	  strategy	  within	  a	  narrow	    buyer	  segm...
WAY	  FORWARD	  "   Malaysian	   saw	   the	   growth	   of	   the	   large	   format	   retail	   sub-­‐sector	      toda...
ATTACHMENTS	  
ASSESSMENT	  OF	  INTERNAL	  FACTORS	  FOR	  STRATEGIC	  ADVANTAGE	  (ASSIST)	                            (RANKING	  STREN...
OPPORTUNITY	         Budget	  2013	  Tesco	  to	  JV	  with	  local	  retailer	  	  to	  form	  a	  Halal	  Supermarket	  ...
THREAT	  1MALAYSIA	  MALL	  
MAJOR	  RETAIL	  PLAYERS	  Ran                 Group	  Name	                             Ownership	                       ...
Strategic management - retail sector (tesco)
Strategic management - retail sector (tesco)
Strategic management - retail sector (tesco)
Strategic management - retail sector (tesco)
Strategic management - retail sector (tesco)
Strategic management - retail sector (tesco)
Strategic management - retail sector (tesco)
Strategic management - retail sector (tesco)
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Strategic management - retail sector (tesco)

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The presentation is focusing on understanding the Macro environment of retail industry in Malaysia and sustainable competitive advantages for TESCO.

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Strategic management - retail sector (tesco)

  1. 1. Strategic  Management   Industry  :  Retail   Synergy   Presented  by  :   Mohd  Farid  Awang   Norhaizum  Sahril  
  2. 2. 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.  
  3. 3. TESCO  OperaAng  Model   (TOM)  
  4. 4. OBJECTIVE     •  COMPETITIVE  STRATEGY   •  VALUE  CHAIN   •  MISSION  &  VISION   KEY  SUCCESS  FACTOR   SWOT   PASTEL   ASSIST   MACRO  ENVIRONMENT  COMPETITION  ENVIRONMENT  
  5. 5. Q  :  What  is  Tesco   strategy  to  build  a    sustainable    compeAAve     advantage?   Cost   Leadership   DifferenHaHon  
  6. 6. TESCO  news    (IdenHfy  AcHon  &  AcHviHes)   •  PromoAon   •  Press  release   •  ObservaAon  
  7. 7. 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.  
  8. 8. 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.  
  9. 9. EXPAND  MARKET  SEGMENT  (SMES)  &  CONVENIENT  SHOPPING  EXPERIENCE  
  10. 10. JOINT  VENTURE  WITH  MALAYSIAN   COMPANY  
  11. 11. FOCUS  ON  HOUSE  BRAND  
  12. 12. 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  
  13. 13. STRENGTHEN  SUPPLY  CHAIN  RM300  million  Non-­‐chilled  distribuAon  centre  
  14. 14. BUILD  LOYAL   CUSTOMER  Aggressive  markeAng  -­‐  Direct  aCack  GIANT   Focus  :Lowest  Price  
  15. 15. 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.
  16. 16. BUILD  LOYAL  CUSTOMER  
  17. 17. 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.
  18. 18. 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 mans 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.
  19. 19. 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.
  20. 20. 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    
  21. 21. 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  
  22. 22. 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  
  23. 23. MACRO  ENVIRONMENT   Industry  Growth   Government   Social  forces   Support  &  Policies   RETAIL   INDUSTRY   Rules  &   Technology   RegulaHons  
  24. 24. GOVERNMENT  NURTURE  INTERNAL  DEMAND  
  25. 25. 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.  
  26. 26. REGULATORY  POLICIES  TO  PROMOTE  HEALTHY   COMPETITION  ENVIRONMENT    
  27. 27. ONLINE  MARKET  (LOCAL)  OPPORTUNITY  Online  purchase  &  Virtual  Store  
  28. 28. ONLINE  MARKET  (GLOBAL)  OPPORTUNITY  Online  purchase  &  Virtual  Store  
  29. 29. 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.  
  30. 30. 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    
  31. 31. 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  
  32. 32. TESCO  COMPETITION  ENVIROMENT  
  33. 33. 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)  
  34. 34. STRATEGIC MAPPING High    PRICE/QUALITY   CARREFOUR   TESCO   ECONSAV MYDIN         E   Low       GIANT   Few  LocaHons   Many  LocaHons     GEOGRAPHIC  COVERAGE    
  35. 35. •  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  
  36. 36. 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)  
  37. 37. Opportunity   Threat  
  38. 38. 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    
  39. 39. 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  
  40. 40. 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  
  41. 41. 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)       SWO1  Online  shopping     O TO2    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      
  42. 42. RECOMMENDATION   (to  be  compeAAve)   •  COMPETITIVE  STRATEGY   •  VALUE  CHAIN   •  MISSION  &  VISION  SUSTAINABLE  COMPETITIVE  ADVANTAGE  
  43. 43. COMPETITIVE  STRATEGY  Current   Future   Groceries  -­‐  Online  
  44. 44. 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  &   RINVENTORY   DISTRIBUTION   TESCO   WHOLSALE,   Services   G PURCHASE   CENTRE   TESCO  EXTRA   (TESCO  VALUE   I &  TOM)   N  
  45. 45. 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  
  46. 46. 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  
  47. 47. 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  
  48. 48. ATTACHMENTS  
  49. 49. 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    
  50. 50. OPPORTUNITY   Budget  2013  Tesco  to  JV  with  local  retailer    to  form  a  Halal  Supermarket  and  expand  to  Islamic  Countries  
  51. 51. THREAT  1MALAYSIA  MALL  
  52. 52. 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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