Business Enterprise
Part 1
Where it all started
Tesco Merchants (Malaysia) Sdn. Bhd started its business on the 29th November 2001 as being an ideal alliance among Tesco Plc British Isles along with the nearby conglomerate, Sime Darby Berhad. Tesco opened its initial store in Malaysia in February 2001 located in the town of Puchong, Selangor and later bought over Makro Cash and Carry in December 2006. Now Tesco operates over a 100 outlets in Malaysia which includes its subsidiary supermarket known as Tesco Extra.
2012
On top of that, in November 2012, the children of Yayasan Chow Kit were filled with smiles when Tesco decided to contribute a van to the charity home located near Tesco Kepong Village Mall. This initiative was a two year fund raising efforts by Tesco Malaysia as part of its charity of the Year Programme. This fund raising on effort commenced on 15 July 2010 which was aimed to raise funds for the Yayasan Chow Kit in providing a safe and healthy environment for the underprivileged children in the Chow Kit area. The programme managed to contribute a total of RM 300,000 with inclusive of a van which was an eleven sweater 2.5L Turbo Toyota Hiace.
2010
Humanitarian Service 2.0
In addition to that, in November 11 2010 Tesco Malaysia provided humanitarian service aid for the victims of the Kedah Flood by dispatching lorries full of food and water. The aid was the primary form of food and other basic necessities and the cooperation was a joint effort between Tesco, the government and other non-profit organization (NGO) such as Yayasan Prihatin Kemiskinan dan Pendidikan Kedah (YPKPK).
Young Graduates Capabilities
Besides providing humanitarian help and donations, Tesco Malaysia has also offered training for graduates from University Tunku Abdul Rahman (UTAR) in February 2010. Tesco had offered many of the fresh graduates from UTAR a nine-month long Commercial Graduate Management Trainee programme in Tesco Kuala Lumpur. The purpose of carrying this training programme was to groom the young talents into the retail industry and train them early in a structured way so that they acquire the necessary operational, commercial and leadership skills required to be in Junior Management Positions. Besides that, this was also a platform where more job opportunities were created for all fresh graduates out there in Malaysia.
Part 2
Car Park
Car Parks are always a major concern for all the customers and as a solution do this problem, Tesco provides free car parks for all its customers as an added advantage towards drawing in more volume to the hypermarket. Now this free car space is normally located outside of the supermarket which further ranges into two types of parking which are the covered basement parking and also the open car park. As Tesco provides the free car park space, most customers feel very convenient to shop at Tesco and furthermore they do not have to pay any overhead cost besides petrol when shopping at Tesco. These car parks are also very safe, reliable and easy to be used by the public as the designated parking are divided by parking lanes for smooth and easy parking for all customers. In the safety aspect, Tesco has also placed panic buttons in specific areas around the car park for the safety of the customers in case of any emergencies.
Trolley and Basket Services
Besides that, Tesco also provides trolley and basket services at the entrance of the hypermarket for free to be used by the customers so that they can easily shop around Tesco by simply placing all specific items needed into the trolley rather than holding them with their hand which could be troublesome when the no of goods needed are sometimes too much. The trolley is also equipped with a small space dedicated to place infants with a maximum weight of 1.5 KG as some customers may feel troublesome holding their babies when shopping around Tesco.
What are the facilities provided by the company to their consumers ?
Private Lockers
Tesco has prepared special safety lockers for all customers that shop at Tesco. These lockers are specially provided so that customers can utilise them to place valuable items such as handbags, personal belongings and prohibited items such as cameras. Now this locker is safe as every locker comes with a personalised key that will be kept be the customer who placed their items and therefore theft issues will never be a catastrophe for the customers. The lockers are also placed at the entrance of the hypermarket which is a strategic location as it’s being monitored by a security personnel.
Customer Services Counter
Tesco also provides a Customer Service Counter also located at the entrance of the hypermarket. This service counter provides all necessary assistance for all customers in many ways from the latest promotions up to any queries that requires further assistance, “Clubcard applications”, redemptions up to any special assistance are also entertained by the customer service representative.
Express Counter
Tesco Malaysia provides special express counters for the use of all the customers. This express counter is dedicated to customers who buys a small amount groceries and also wishes to skip the long queues as the counter only accepts a maximum of 10 goods for every of its customers. This ensures that there will be a balanced amount of customers in every of the counters for a smooth and faster service.
Price Scanning Kiosk
Some of the items sold in the hypermarket may not be well labelled at times as the crowd at Tesco is sometimes overwhelming. Therefore, Tesco has placed price scanners at relevant areas like the household items section and also towards the food and beverage section so that all customers can check the price of any specific goods without having to wait for the last minute payment at the cash counter. The machine displays all the price through its LED screen which is found to be clear especially for the elders. There are about a total of two price scanners located in the hypermarket.
Retail Lines
Tesco Malaysia is involved in a retail business and are further divided into two types of retail lines which are Tesco Hypermarket and Tesco Extra. Tesco Hypermarket provides customers with comprehensive shopping experience under one roof. Goods sold in the hypermarket varies from groceries, household items and electronic goods. Tesco Extra focuses more towards small businesses, families and individual taste and preference. These value-added services include bigger pack sizes, special trolleys and checkouts, and a dedicated business development team to support small business owners with their orders.
Franchise Business
Tesco Malaysia is also directly involved in the franchise business whereby there are 47 other Tesco stores and Tesco Extra Stores across the whole of Malaysia. Tesco Merchants (Malaysia) Sdn. Bhd started its business on the 29th November 2001 as being an ideal alliance among Tesco Plc British Isles along with the nearby conglomerate, Sime Darby Berhad. Tesco opened its initial store in Malaysia in February 2001 located in the town of Puchong, Selangor and later bought over Makro Cash and Carry in December 2006. Now Tesco operates over a 100 outlets in Malaysia which includes its subsidiary supermarket known as Tesco Extra.
The type of business(s) that the company is currently involved in ?
International Expansion Strategy
As a one of Malaysia largest Hypermarket, Tesco also is involved in various other business. Their main business includes being a major part of the International Expansion Strategy managed by Tesco PLC, a multinational corporation based in England, United Kingdom. Tesco PLC was first introduced by Jack Cohen in 1919 when he began selling surplus groceries in the East End of London. Over a specific period of years, his business grew and expanded overwhelmingly to over 100 Tesco stores across the country and later on widen the business to 12 different countries which include Malaysia, China, South Korea, India and many more. With its domination in grocery and merchandise retailing in England, Tesco PLC has become the main party in every domestic grocery retail across the world.
Under the PEST analysis, students are to analyze only Social and Technological factors of the company and share your findings
Social Factors
Customer Satisfactory and Loyalty
As part of a huge hypermarket business, customer satisfactory and loyalty are the utmost importance for Tesco. Therefore, they practice the concept of 5P’s which include price, promotions, people, place and product. In addition to that Tesco believes that when the cost of a product is competitive, customers are more likely to be comfortable and will trust your brand. In addition to that, they also make sure that quality and healthy products are being sold as Malaysians take health issues as their main priority plus mainly halal foods are to be sold as it’s a major requirements by the government and muslim customers. Tesco Malaysia also gain their customer loyalty or connection with the introduction of “CLUB GREETING CARD PLAN” or known as “TESCO CLUBCARD”. “Clubcard” is a way of how Tesco rewards customers for choosing them. Customers can earn “Clubcard” points every time they shop with Tesco. With the “Clubcard”, they will receive 1 point for every RM2 spent in Tesco stores, plus a lot more rewards.
Competetive Pricing
Through the social aspect, Tesco mainly emerges in the local market as compared to other supermarkets because of their competitive pricing strategies. The planned price cuts are one of Tesco’s added strategy advantage to draw in more customers as compared to their competitors. It shows that Tesco practices the opportunity cost concept where they sacrifice from overpricing their goods in order to increase the volume of customers.
Under the PEST analysis with reference to only Social and Technological aspects, Tesco Malaysia practices many social and technological controls in their daily business.
Patents
As part of selling quality and cheap products, Tesco also has implemented by selling their very own local product in their business. With Tesco’s logo embedded on some of the products, it shows how they try to implement their product as a substitute to other products of the same kind. Products sold under this category are mineral water, serviettes, frozen foods and many more. This situation also indirectly proves that Tesco can reduce the cost of buying a specific product from other suppliers and on the other hand produce their own product with a cheaper cost.
Technological Aspect
Maturity of Technology
Tesco Malaysia has implemented Malaysia’s first Hypermarket Online shopping. With this implementation, Malaysians can now enjoy buying all their goods online without having to go to any of the Tesco stores plus with an added advantage that all their goods will be sent right to their doorstep with the free delivery service provided by Tesco. Besides online shopping Tesco Malaysia also uses the Electronic Point of Sales (Epos) system in every of their hypermarkets where all transaction involved when purchasing a good is done through this system whereby all the price is automatically displayed by scanning every good and it also calculates the total purchase price and the change that needs to be returned to the customers. Customers who wish to use their debit card or credit card may do so as Tesco also uses the Electronic Funds Transfer System (EFTPos) to transfer cash from an bank account.
Customer Preferences
Tesco Malaysia’s retail business directly deals with the customers therefore the Customer Relationship Management (CRM) is very important for the business. Tesco Malaysia’s CRM is a strategic organisation that enriches and enhances the relations of Tesco with their customers by understanding and learning more about their needs and behaviour towards a specific product and purchase habits, influences on them when they are shopping in Tesco which includes all sectors in the hypermarkets.
Through Tesco’s initiative, the Customer Relationship Management helps by providing better customer service and their products can be sold efficiently. The CRM simplifies the marketing and sales promotion in their daily business as it makes the understanding for customer behaviour and preference easier and clearer. Tesco gets to know what are the interest of the customers are and also at the same time explore new marketing strategies to improve the business. Everyday many different types of customers come and shop at Tesco and through the CRM initiative, Tesco gets to know how do customers feel and think when they are shopping at Tesco. It clarifies the customer thinking process and their reasoning while making purchase decisions. The psychology of the customers is influenced a lot by their environment and related factors. When purchasing any goods, the CRM identifies the factors that concerns the customers when shopping such as customer’s knowledge about the product and market, their budget, family values, background, purchasing power of the customer, marketing influence on the customers, limited knowledge of the customers, friends’ and family influence, impulsive decisions at the point of purchase etc. are various factors that affect the customer’s purchases.
Collaborations
Tesco Malaysia is already known to be a very successful hypermarket in Malaysia. Nevertheless there are many ways where Tesco can interpret in their business to achieve sustainability. Collaborations are found to be the key to some of the successful business out there and may be also vital in some of the business. Therefore, Tesco Malaysia can collaborate with many of the active NGO’s in Malaysia. Collaborations does not have to be related to the business directly as it can be in a different aspects. To maintain a quality and a healthy hypermarket, Tesco Malaysia can collaborate with many of the private health orientated NGO’s like National Cancer Organisation, National Diabetes Institute where they can provide peer to peer assistance on the current health status and how Tesco can help by providing healthier products for Malaysians.
Tesco's Business Sustainability
Conduct a research on the CSR initiatives/programs that has been adopted by Tesco Hypermarket for the past 3 years.
2013
Firstly, in December 2013, all the people throughout the region of Terengganu had suffered the worst flooding in 40 years. All the man and women had to be evacuated and many more faced all sorts of challenges when it comes to cleaning up homes and the external drainage and water pipeline which were clogged by mud and silt. Tesco helped this community by putting collection boxes on every checkout. They also helped to provide flood relief to over a 1000 families in the hardest hit areas. There was an exceptional effort from volunteers of Tesco Malaysia to reach 12 families in Kampung Meragih Kuantan who had been completely cut of from all relief centers. The aid Tesco delivered was the first to reach them on over a week
From my group’s visit to Tesco Puchong we have observed Tesco’s business in many aspects and how we can relate whatever required for the Integrated Project in each of the modules. For the Business Enterprise module, the Integrated Project report was done by Gajaindren Nair and Reven Nath A/L Nithielingam.
Advertising
In order to deliver their monthly promotions, advertising is an important element in Tesco’s business. In order to draw in customers, Tesco normally use several methods like promoting transmission equipment which includes advertising on giant billboards, digital screens in the highways, and through giant posters in many of the advertising boards found in shopping malls. Now this is an effective method as all consumers are present in these types of location and they can get to know about Tesco’s sales and promotions and further spread to news to others who are not present in these locations. On top of that, they often advertise through media related resources such newspapers, brochures, and many more. This is another effective method as media is the number one source of advertising and Tesco also utilise this platform to give out promotional vouchers and rewards to be used by everyone.
The trolley carts are located in one section so it can be easily used by Tesco's customers
Lockers services are provided for the customers to keep their things safe so its easy for them to navigate around Tesco
Teso always prioritise their customer and takes their opinion and complaints very seriously. This Customer Service counter is established for these purposes.
Not all the customers would purchase more than 10 products and due to this Tesco provided an Express Checkout Counter with a limit of 10 items and below to help saves those customers time
Some of the products might not have a pricetag and customers can check the product's price by using the Price Scanning Kiosk
Tesco's carpark at the main entrance .
