Basic Info About Tesco Malaysia Essay Example

as market specialization. Typically, demographic factors such as age, gender, location and socio-economic status are considered. Companies analyze reports containing demographic data to identify and map their target markets in order to create effective marketing strategies. Tesco stores tend to be situated in remote areas due to their need for expansive premises that average 2,827 square metres in size, providing an advantage when it comes to site selection.

Although some Tesco stores are situated in unplanned business districts, our focus for this assignment will be on four main stores in Selangor. Specifically, we will examine Tesco Puchong as an example of a store located in an unplanned business district. Despite the fact that there is a planned business district across the highway, developed by IOI Properties, the area where Tesco is located lacks this planning and development. As a result, there is minimal pedestrian traffic and no other facilities in the vicinity. Tesco Puchong is situated on the Damansara-Puchong (LDP) highway.

Both Tesco Puchong and Tesco Kajang have unique reasons for their locations. Tesco Puchong was able to establish in an undeveloped area before Puchong became a fully developed city. On the other hand, Tesco Kajang is situated in an isolated location due to the saturation of hypermarkets in the town. To make up for this, Tesco Kajang is located along the Cheras-Kajang highway, providing high visibility for the store and easy access for customers. The isolation of the store also allows for lower rental costs, leading to ample parking and bigger aisles for shopping.

The Tesco Klang branch is situated in an isolated location, providing the company with flexibility in store design. However, despite its proximity to

the developing Botanical Gardens residential area, Tesco Klang still incurs significant advertising expenses, including flyers and billboards. Similar to Tesco Kajang, Tesco Klang is also located along the Klang Banting Trunk Road.

The Tesco store layout is designed to facilitate impulse buying by customers and ensure that prime products are easily accessible at eye level on the shelves. The layout aims to prompt customers to browse the entire store, even if they only need one item, such as eggs. This means that customers will need to pass through sections for electronics and dry goods. The store map below displays the layout for the Shah Alam Tesco branch.

Below are clearly labeled categories of products offered in hypermarkets. While groceries are the most commonly purchased items, customers must navigate through various departments such as men's wear and shoes, as shown in the store layout plan above, even when buying just a few groceries. This presents an opportunity for customers to discover and purchase items they like or need beyond their initial purchase. This store plan is consistent across all hypermarkets, including the Shah Alam branch.

Below is the store layout for Tesco Seremban branch, highlighting the location of the grocery section on the far right from the entrance. Similarities in store layout will be discussed. The planners of this layout understood that customers rarely use the lane along the checkout counter due to congestion caused by customers lining up to pay. Additionally, walking against the flow of 'traffic' while pushing a large trolley to get to the grocery section can be a difficult task for customers.

By not providing clear signage, customers end up taking a longer route

through various sections and departments. However, customer services, such as a free carpark, surau, wheelchair service, drinking water, trolleys, 7-day return policy, cashier counter, ATM service, delivery of big appliances, baby changing room, food court, gift vouchers, BonusLink redemption, Pos Malaysia, money changer and car wash are available. Tesco's core business activity is selling groceries on a wide scale. To inflate their business, they may diversify or specialize in their core business activity. Diversification requires understanding and establishing the most important and income-generating activity of the business.

By diversifying the activities of the business, it is possible to reduce the risk of a single area struggling and damaging the profitability of the company as a whole. This is a way to spread the risk and achieve greater stability. Avoiding specialization is key.

Business diversification involves reducing the number and types of activities a business undertakes due to unprofitability or high costs. Boots is an example of a diversified business model where it has introduced Wellbeing services such as reflexology, aromatherapy, dentistry, etc. This diversification has attracted a wider target market that includes men and increased the business's profitability. On the other hand, EasyJet has specialized its commerce by expanding its empire with EasyCar for car rentals, easyMoney for loans and credit cards, and easy.

While EasyJet's owner's success in diversifying its products is unverified, the airline still offers a free email service. On the other hand, Tesco continuously expands its business to maintain competitive advantage. It is crucial for Tesco to invest in new services and products to fulfill customer demands as they are one of the most important stakeholders. As stakeholders, customers have an

interest in the business and their actions can impact it directly.

In summary, Tesco must decide between diversifying their business or specializing in their current commerce. While there is no risk to the overall business when diversifying, specializing can result in a loss of profits. However, Tesco is financially successful, so there is no need to cut down on their current activities. Instead, they should introduce an innovative business activity that will satisfy their customers and stakeholders. Currently, Tesco offers electronic goods and services but lacks affordable laptops, which are dominated by Dell and PC World. In order to increase productivity and sales, Tesco must purchase quality laptops at a competitive price.

Maximizing sales and productivity is paramount to Tesco. To achieve this, they target specific markets. Tesco recognizes that middle-class customers can afford pricier, high-tech laptops, so they aim affordable laptops at the working class customers in need of good quality assurance. It is essential to differentiate the target market and ensure availability of the right brand and specifications of laptops. Some customers prefer popular brands such as Sony, Toshiba, Advent, etc.

It is crucial for Tesco to fulfill the demands of customers who either prioritize affordability or quality. In order to do so, Tesco should set small goals related to sales, productivity, and cost reduction prior to implementing any changes. The success of new and improved stocks will ultimately depend on their ability to generate maximum sales, as any failure to do so will result in decreased profits. To determine the level of recommendation for business activity, Tesco must decide whether to test the popularity of goods in a single local store or sell them

on a national scale. The advantage of starting with a small-scale recommendation is that it allows for easy evaluation of success and inventory management. However, the limited bulk purchasing of goods may result in lower profits.

By opting for small-scale business activity, there are advantages such as purchasing in bulk at competitive prices, leading to profitable returns. Additionally, sales and productivity of goods are likely to reach maximum levels, covering business costs. However, a disadvantage is direct competition against established companies such as Dell, PC World and eBay, who could potentially lower prices, making competition unsustainable.

As a strategy to outshine competitors, Tesco can opt to make its business activity recommendation appear exclusive by limiting its duration. This exclusive perception leads to a surge in impulse buying which ultimately results in stock depletion. This technique effectively solves competition and criticism from rivals, while also generating immense profit for Tesco within a short time frame. This success paves the way for future business endeavors for Tesco.