Business Enterprise

Tesco Hypermarket is one of the largest hypermarket in Malaysia for all the Malaysians. Tesco does not only focus on the profits benefiting their company in running their business but also involving themselves in contributing to the society by participating in different kind of CSR initiatives. My group members and I visited Tesco Hypermarket ( Paradigm Mall ) branch the other day and understood how does Tesco run their business. For the past 3 years, Tesco has put effort on contributing to the society for which they can do their best not to only focus on running their business ethically but to serve the community as well.

PART 1 - CORPORATE SOCIAL RESPONSIBILITIES (CSR)

Conduct a research on the CSR initiatives/programmes that had adopted by Tesco Hypermarket for the past 3 years.

2013

In 2013, Tesco hypermarket countered environmental issues by going dark for earth hour. During earth hour, all the stores in Tesco turned off 70% of sales lights, pylon lights, display TVs, computers and non-essential lightings. Tesco customers were encouraged to go dark for earth hour via posters and announcements. Tesco also encourages its 11,000 employees to participate by switching off their lights in their own homes. Tesco updates its social media page and website to display messages that will spread awareness regarding environmental issues. Tesco claimed that they will ensure a sustainable future for generations to come.

Under Tesco’s campaign to help Children with Leukemia since August 2012, Tesco has organized its annual “walk for life “campaign in 2013 whereby its goal is to raise RM1 million to help 100 children from underprivileged backgrounds suffering from leukemia. Funds raised will be used to cover treatment costs, fund equipment for patients and special medication for those deserving children. These efforts can be life saving for the children. Additionally, Tesco has agreed to sponsor beverages for leukemia patients and their visitors.

(Source : Tesco Malaysia website)

Besides that, Tesco contributed over RM40,000 worth of school necessities to schools and over 400 children in selected states. Underprivileged school children received RM100 to shop for their school needs at the hypermarket.

2010-2012

Since 15th July 2010, Tesco has launched its “Charity Of The Year”(COTY) program. Its main goal is to raise funds to support Yayasan Chow Kit in providing a safe and comfortable environment for the underprivileged children in the chow kit area. Children registered with the center are provided with shelter, food, education and even health and recreational activities. The program has raised over Rm 300,000 from 2010 to 2012. Tesco has also contributed RM446000 to Majlis Kanser Nasional.

2012

Tesco Malaysia has collaborated with the Malaysian Timber Industry Board (MTIB) to organize a Greener Earth Tree Planting program. Its main goal is to counter environmental issues by planting 500,000 trees throughout the country within three years. Tesco is expected to spend Rm 4 million and this is partly funded by the sale of plastic bags on the “No Plastic Day” campaign

(Source : Tesco Malaysia website)

2010

Tesco aided flooded flood victims in Kuala Nerang and Kedah. Lorries containing food and water were dispatched to help the victims. 100 Tesco employees were also affected by the flood. Therefore, Tesco provided emergency aid in the form of money as well as food to the affected employees. Apart from this, a special fund was set up to enable everyone at Tesco to contribute and help.

Tesco prioritizes greener living. It set up its first recycling center in Ampang and has given the opportunity to the disabled to manage this recycling center. It was a successful project as they managed to collect more than 300, 000 kilogram worth of recyclable items.

(Source : Tesco Malaysia website)

PART 2 – BUSINESS SUSTAINABILITY

Question A) What are the facilities provided by the company to their consumers? (Example: free parking space)

The facilities provided in Tesco are as follows.

Trolley. Trolleys and shopping baskets are always available for customers as it provides convenience. Customers are not required to pay for this facility. This will not trouble customers as they do not have to carry heavy items. Therefore, customers can shop in a more comfortable way.

Price checkers. Customers can easily check the price of the products without any hesitation. The price checker can immediately display the current price of the products. Therefore, there is no need to ask employees of Tesco for current prices of products.

Information counter. Customers can easily obtain information here if they are lost or if they have any enquiries. Tesco’s friendly employees are ready to help and solve customer’s problems at any time of the day.

Free parking. Tesco has provided ample parking lots for customers. Tesco customers will be able to enjoy free parking for the first hour with purchase of RM30 and above. Tesco also provides reserved parking lots for the disabled customers. This will attract more customers to Tesco outlets.

Tesco provides lockers. It only costs Rm0.50 for customers to use the lockers provided. This prevents stealing, loss of belongings and provides relief for customers who wants to store valuable items.

Next, free wifi is available in Tesco supermarkets. Customers can access the internet easily to obtain information and updates. As technology advances and develops, Free Wifi would satisfy technology savvy customers who needs it badly.

A Food court can also be found in Tesco. It sells a wide variety of food that is able to satisfy consumer’s taste and preference. The price of food sold here is reasonable and affordable to customers. Consumers do not have to go out of Tesco supermarkets to find for food to eat. Therefore, after eating, consumers can resume their shopping spree in the supermarket.

A children’s playground can be found in Tesco. Most parents can spend quality time with their children here after shopping. The fees to enter this playground is fairly reasonable

(Source : Tesco Malaysia website)

Telephone booths can be found in Tesco. This allows customers to make emergency calls if needed.

Next, ATMs can be found in Tesco. This will be convenient for customers who want to withdraw money before shopping.

Escalators are found in Tesco. This will be very useful for the disabled customers compared to the normal staircase.

Customers on wheelchairs will be able to move easier to higher floors. When pushing trolleys, customers can push it on the escalator instead of carrying the heavy items.

Next is baby changing rooms and improved toilets. This facility makes it more convenient for parents who brings their baby to Tesco while shopping.

(Source : Tesco Malaysia website)

Question (b) The types of business(es) that the company is currently involved in. (Example: Laundry)

Tesco is a global grocery and general merchandise retailer. It purchases items and goods in large quantities from manufacturers directly and will then sell them in smaller quantities to consumers for a profit. Tesco Malaysia sells over 60,000 type of products, including 3,000 Tesco Brands of non-food products and food. It sells many categories of products such as electrical appliances, furniture, clothes, food and household products.

Next, Tesco plans to be a franchised business for its stores outside United Kingdom. This is to share the high cost of the business startup with the franchisee. This will also allow rapid expansion and growth of Tesco’s business. Therefore, this is a win-win situation

Tesco Malaysia’s other business includes “Tesco Extra” whereby it sells its products at a cheaper price to cater for the small businesses in Malaysia. Here, products are sold in bulk. Tesco offers bigger pack sizes, special checkouts, special trolleys and a trained business development team to satisfy business owners with their orders.

Lastly, Tesco Malaysia rents out its mall’s space to other businesses to generate more revenue. Example, in Tesco Puchong, there are food, fashion, health and services outlets such as Mc Donald’s, KFC, Poh Kong and many more. Tesco also rents out advertisement space for small business which wants to advertise in Tesco malls.

(Source : Tesco Malaysia website)

Question C ) Under the PEST analysis, students are to analyse only Social and Technological factors of the company and share your findings. (Refer to lecture slides).

Social Factors

Ethnic and religious factors

Citizens of all races which includes Malay, Chinese and Indians shopped in Tesco. Some of the Malays were wearing their traditional outfits such as “Baju Kurung” and some Indians were dressed in “Sari” A few number of foreigners were spotted shopping at Tesco too. Also, most of the food products were labelled either “halal” or “non halal” for easy identification. The non-halal section was separately located from the halal section.

Advertising scenarios.

There were many promoters promoting their drinks and biscuits at the food section in Tesco. Stands were set up and promoters offered free samples of their products to the shoppers. Discounts of items sold were also displayed throughout the entire supermarket. Stacks of brochures were also located at the entrance for customers to take. This will enable customers to be aware of items that are on discounts.

(Source : Tesco Malaysia website)

Health factors.

Tesco has nutritionally labelled its food products. A “guideline daily amount of nutrition” is included in the label to provide advice on the total amount of Sugar, saturates, fat, salt and calories an adult should consume in a day. Therefore, customers are more aware of the food that they should consume for a balanced diet. A health pharmacy can also be found in the supermarket itself. Here, medicine and health supplements can be bought.

Consumer buying patterns.

It was observed that there were more customers at the start of the month and the end of the month compared to the middle of the month. More customers with their family members were seen on weekends and Friday nights.

Consumer/customer opinions and attitudes

Some consumers were spotted complaining to Tesco’s employees at the information counter. Tesco’s employees were handling the situation calmly while the customer looked angry and unsatisfied.

Major world events

World events such as the World cup makes an impact on Tesco. Tesco sells more World Cup related products such as football balls, jerseys, and sports equipment. More customers were also seen wearing jerseys of countries that they support.

Technological factors

Technology development.

Tesco’s technological development has progressed over the years. Many price checkers are now available throughout the supermarket. Price checkers can be found at nearly every 70 meters radius. My team waited approximately 15 minutes at separate price checkers and observed that an average of 2 customers used the price checker. The customers who used the price checkers were mostly children and man. They brought their trolley next to the price checker and scanned items such as sugar, flour, peanut butter and carbonated drinks. At the cashiers, bar code scanners are used to enhance accuracy and efficiency. There is also a conveyor belt to move items closer to the employee at the counter. There are security scanners at the counters that would sound the alarm if shoplifting were to occur. Tesco is also equipped with CCTVs to monitor and prevent shoplifting. Employees of Tesco uses walkie talkies to communicate with one another for convenience.

Trend in global technological advancements.

In Tesco, it is observed that most customers were using smartphones and very few were using the old type of phones. Children were also seen using their mobile phones while having earplugs in their ears. Some customers were using tablets and Ipads while waiting for the queue at the counters. Free WiFi is also available in Tesco supermarkets. This proves that technology has evolved and information can be accessed conveniently.

Tesco consumer’s buying trend has changed.

Their way of buying products from Tesco is different now as they can now shop online through Tesco’s website. Payment can be made via online banking services. Consumers can also compare prices of products with other supermarkets easily online to save money. Tesco offers online delivery services for its customers and Tesco’s app is now available on android phones. This saves consumer’s time, travelling cost and reduces environmental harm. Tesco has also set up a Facebook page to provide more information and updates on its latest products and promotions. Therefore, customers will not miss any good bargains.

Information technology

It is observed that the payment made by customers were mostly done through credit card instead of cash. Some customers also swiped their Tesco clubcard to gain more points . All information will be linked to their account accurately.

Question (D) Recommend one way for the business chosen to achieve sustainability

To achieve sustainability, Tesco must prioritize its customer’s needs, desires and satisfaction. Constant research, improvements and innovations must be made to match customer’s preference and demand which are constantly changing.

Example, Tesco must keep up with customer’s buying trend, whereby it needs to provide online services and mobile applications for customer’s convenience as this generation of customers is more technology savvy. Online delivery services is a must to satisfy busy customers. Tesco should constantly ask for feedbacks from its customers through surveys to further improve their technology systems and soft wares.

Tesco must also supply trendy items on demand to satisfy customers. Example, during the world cup season, most customers seek for football balls, jerseys and sports shoes. Also, if demand for products such as flour and seafood increases during festive seasons, Tesco must ensure that they have sufficient stock to avoid frustration. Tesco must supply these items to avoid losing customers to its peer competitors.

Tesco must reward its loyal customers with membership cards or benefits to avoid losing them to other supermarkets. This category of customers would ensure stable long term profit’s for Tesco. . The customer service center plays an important role in Tesco’s business sustainability. It must be extremely professional when handling customer’s complaints and dissatisfactions as a tiny error may cause Tesco to lose its customer permanently.

Tesco must consistently maintain the quality of its products sold. All food products must be fresh and safe for consumption. This will maintain customer’s confidence and trust with Tesco. Its good reputation will not be damaged if quality is maintained.