Strengths And Weaknesses Of Tesco
Serving nine states in Malaysia, Tesco has strategically placed its hypermarkets in a very conducive manner for both its suppliers and customers. This allowed Tesco not to be in a short run for shortage of outlets and not to over expand by over-flooding cash flow and other resources.
It has outlets strategically placed as a standalone building to accommodate both urban and rural customers with essential amenities such as free parking, food and beverage outlets, Automated Teller Machines (ATM) and many …show more content…
This eventually led to a form of internal strength and weakness which became the norm and eventually, internal culture.
Fundamentally, Tesco (M) is dependable on UK business. Business model that Tesco uses approaches for the United Kingdom, instead for other part of the world. This could be the weaknesses for Tesco (M) to expand its business widely as it is a foreign brand in Malaysia and has to adapt to local market, followed by the burden of higher advertisement cost. Since Tesco (M) launched “Everyday Low Price” campaign, all the cost including papers, printing, human resources, distribution and marketing promotion has to be absorbed by Tesco (M).
In addition, the most common internal weakness impacted was the high turnover rate of employees, especially in the operation department. Many employees resign after working for almost one or two months. However, the actual root causes are vague, but for obvious reason, it could be due to workload, pay grade or perhaps a better offer from other …show more content…
By default, the cost of training and human development for new employee is a burden to Tesco (M) while its operating cost drained for other functions.
Such impacts are too micro to be noticed on a bigger scale, but these are the types of factors that will directly contribute to Tesco’s impact in its customer loyalty and the decline in its sales revenue. In such conditions, a form of turbulence arises with the breakage in the supply chain system – regardless of a tool, data, human error and structural issues.
Major impact was caused due to the adaptation of high similarity on the operational concept as its parent, Tesco PLC, UK. Such operational concept may be applicable for short-term period but definitely will not succeed in achieving its strategic fit in Malaysian market. This is purely due to the highly fragmented market segment for both grocery and non-grocery products. Moreover, the work ethics of the employees differs significantly – lack of discipline, dedication and sincerity in job assignments.
On the fragmented market segment, customer demographics and preference highly promotes loyalty towards brands, quality, pricing and to certain extend, a form of