Unstoppable Thoughts of LNH: TESCO MALAYSIA

ACKNOWLEDGEMENT

In the name of Allah, we are very grateful for His blessings because make this task easy for us to complete it.

Besides, we want to give our special thanks to our lecturer of MGT300, Tuan Syed Mazlan bin Syed Mat Dom for gave us guidelines on how to do this task successfully. He inspired us greatly to work in this project. His willingness to motivate us contributed tremendously to our project. We also would like to thank him for showing us some example that related to the topic of our project.

Next, a very special thanks also to Puan Khamimi Chik binti Mohd. Khalid as Human Resource Manager of TESCO Malaysia for gave us a chance to interview her in a way to get information for our group assignment.

1.0 BODY

1.1 COMPANY BACKGROUND

Tesco is a company from United Kingdom and it is established for almost 10 years in Malaysia. It is first opened in February 2002 with 46 stores around Malaysia from Kedah to Johor. In nationwide, there are 31 Tesco Hypermarket, 8 Tesco Extra and 1 Tesco Supermarket. Their staff in Malaysia reached 15000 person. It is a number one retailer in Malaysia following by Giant Supermarket, Carrefour and etc.

In Malaysia, Tesco Headquarters previously at Mutiara Damansara and now at Bandar Manjalara, Kepong. Each stores have their own administration like Human Resources Department and etc. Their biggest stores were located Malacca, Ampang and Puchong. Their weekly sales can achieve almost RM 2 million for one store.

In Johor Bahru, there are 4 biggest stores which is located at Tebrau, Plentong, Kulai and Bukit Indah and including two small store at Seri Alam and KSL City(3K store- 3000 square feet).

Tesco overtake business of Macro and named it as Tesco Extra and sell their product to the wholesaler in Malaysia.

1.2 TESCO’s HISTORY

· 2001

§ Tesco partner with Sime Darby

· 2002

§ First Tesco store opened at Puchong followed by Malacca and Klang

· 2003

§ Mutiara Damansara and Sungai Petani stores opens.

§ Launched Tesco own brand, Tesco Value.

· 2004

§ Tesco Malaysia launched its own house brand, Tesco Choice.

§ Tesco Penang open.

· 2005

§ Tesco opens 4 more stores which at Ipoh, Shah Alam Kajang and Banting.

· 2006

§ Tesco Ampang and Seri Alam opens.

§ Acquired Macro Cash and Carry.

§ Prawns price to RM 9.99.

· 2007

§ Tesco launched Clubcard.

§ Tesco launched Tesco Extra.

· 2008

§ Tesco launched Green Clubcard and Green Bags.

§ Tesco launched 50 Basic Needs Guaranteed Not Beaten on Price.

· 2009

§ Tesco number one hypermarket in Malaysia.

§ Tesco launched Tesco Light Choices.

§ Tesco launched Tesco – RHB Credit/Debit Card to consumers.

§ Ambient Distributions Centre opens.

§ Launched Clubcard Bonus Day.

· 2010

§ New Electrical and Seafood Department.

§ Introduced F&F Clothing range.

§ Kepong Village Mall opens.

2.0 BODY

2.1 ADVANTAGES AND DISADVANTAGES OF INFORMATION TECHNOLOGIES BY TESCO

Information Technologies ( IT ) helps companies to gain advantages in all departments. Information Technologies assist us to get faster information, reduce in numbers of workers and make an easy connection between each other.

First, the uses of IT can helps companies to get faster information from others. IT system can provide information with only using less time and accurate data. For example, we can e-mail to other branch in Malaysia and also to the headquarters to place an order or any problems about Tesco.

IT system requires only a few staff to excess data. This system also only required at least one staff to manage it. For example, Tesco is using a system named Payroll, which is a system that enable them to check the data and information about their staff from their personal details to their salary and etc.

. The internet system will link to each others. Their system can connect with ordering places and all the Tesco stores in Malaysia including Headquarters in United Kingdom (UK). With the uses of this system, distribution centre the workers do not need to fax and it will save time. no need to use a lot of documents and also in the same time can save space for their documents.

Other than that, there is also a disadvantage of IT for Tesco. They face problem when their internet server is down. They can’t access their data through internet and they have to do it manually. This will take their time longer to distribute the data than when they are using the system.

2.2 SUPPLY CHAIN MANAGEMENT IN TESCO

Tesco sources its goods from overseas manufacturers in United Kingdom who are more competitive on prices and volumes. Since before, Tesco has been supporting British jobs and expertise by encouraging large branded suppliers to develop exclusive production facilities. But, nowadays, the company has realized the need to look abroad for products no longer available in UK, but tried to do it through long-established UK partners. The foods continued to be heavily UK-based due to the very successful range of prepared foods.

As a major retailer selling diverse product range in, they work with many suppliers around the world. Therefore, it is the company policy and and company’s main approach to have unique relationships with suppliers. Applying advanced technology in its communications and cooperation with the suppliers, the company aims to control the work of its suppliers and heavily relies on their efficiency. Their customers also experiences the checkout process, meaning that their systems can go through the stock level at the time. Their systems and processes at the tills need to be simple, smart and at the same time sophisticated.

2.3 HUMAN RESOURCE (HR) DEPARTMENT IN TESCO

Human Resources is one of department in Tesco. They are using a few technology in their management.

As we can see, at other store or work place in Malaysia, such as Pacific Sdn. Bhd. And Parkson Malaysia are using punch card system to record the attendance of their staff. But, at Tesco Malaysia, they are using an advanced technology to record the attendance of their staff by using a thumbprint system. With this technology, they are only using fingerprints to record the time and date their staff in, out and recess time.

Other than that, the department also using technology in making decisions. They are using e-mails to connect with all their staff, and other staff at other Tesco branch. They are using e-mails to spread information and etc.

This department also using other electronic pages to promote and connect with their customers such as using Facebook and Twitter. Through Facebook, they give the electroniv voucher to their customers. The customers only need to like the pages, download the voucher and print it. The voucher is unlimited and can be print by anyone who like the pages. Tesco also updating their latest information through Twitter. So, the customers can keep up-to-date with latest Tesco information such as sales and etc.

Human Resources department also use technology to gain feedback and complaint from customers whether through Facebook or its official web page.

This department also have other server in case if their internet server is down. They also have back-up information if the problem occurred.

2.4 COMPETITORS WITH INFORMATION TECHNOLOGIES

Compared to other competitors, they are mostly not using technology. They are only using medium such as newspaper to promote their products and spread information about their offer. The marketing department of Tesco do the analysis about the products through newspaper. They also can be aware of price fluctuations in market. Other than that, the staff of Tesco survey to other store to get information about their products and prices.

Technology is a major macro-environmental variable which has influenced the development of many of the Tesco products. The new technologies benefit both customers and the company: customer satisfaction rises because goods are readily available, services can become more personalised and shopping more convenient.The launch of the Efficient Consumer Response (ECR) initiative provided the shift that is now apparent in the management of food supply chains (Datamonitor Report, 2003). Tesco stores utilise the following technologies:

· Wireless devices

· Intelligent scale

· Electronic shelf labelling

· Self check-out machine

· Radio Frequency Identification (RFID).

The adoption of Electronic Point of Sale (EPoS), Electronic Funds Transfer Systems (EFTPoS) and electronic scanners have greatly improved the efficiency of distribution and stocking activities, with needs being communicated almost in real time to the supplier (Finch, 2004).

3.0 CONCLUSION

Tesco have to understand that international marketing is a complex process. With the aim of effective entering of foreign market, the company have to make sure that all their resources are prepared to encounter the risks of such investment . As well, the Tesco have to be capable of identifying diverse factors that may possibly have an effect on the entry of the business to the market. Tesco have to be able to make use of a strategy which allows it to gain competitive advantage both in local and foreign market.

Testing of the technology such as Radio Frequency Identification ( RFID ) by Tesco has been underway for over a decade. With such a huge prize to be won, it is a key long term objective. The reality is that this process is likely to take another few years of testing. With an expected role out in circa 2010, there is still much left to do.

At the end of the day it is only a matter of time before the technology is used widespread by Tesco and many other retailers. The benefits of such technology are vast, with the ability to deliver less waste and maximise availability, but at the same time reducing waste and keeping stock levels under control. The only fly in the ointment will be the cost and the time taken to make it work, and the real challenge will be the campaigners who are that this technology will be used to manipulate the customer.

4.0 RECOMMENDATION

IT systems have played a key role in helping Tesco deliver strong profits. Praising the success of its web sales operation, Tesco will open a second “dot.com only” which will solely exist to pick online orders. This follows the success of its Croydon online store, which serves much of south-east London and is now trading at over £1 million per week.

Advanced in-store queuing systems had improved shopping for 26 million of its customers by reducing checkout lines. The supermarket chain is using heat-sensing technology to monitor lines at tills.It also improved scanners, better self service tills, and checkout cameras were helping it reduce queues. Self-service checkouts now account for a fifth of all of Tesco transactions.

Having invested heavily in its supply chain, Tesco on-shelf availability, measured through the in-store picking of tesco.com orders, had also been strengthened.Tesco has an ongoing efficiency programme, known as Step Change and involving IT improvements as well as general process efficiencies.

Tesco also has a long running application development deal with Steria-owned outsourcer Xansa, targeted at ensuring its systems are up to date and in line with business needs.

5.0 APPENDICES