Question on :Marketing environment analysis – Internal factors
Internal Environment
The internal environment of the business includes all the forces and factors inside the organization which affect its marketing operations. These components can be grouped under the Five Ms of the business, which are:
§ Men
§ Money
§ Machinery
§ Materials
. Markets
GSRM7223 Marketing Management FORUM ONE Instruction: Read Article 1 and 2 for current updates on Tesco Malaysia. Answer the following questions. Describe how these marketing environmental factors, such as demographic, economic, socio cultural and technological forces, affecting the supermarket and hypermarket industries, that influence Tesco to divest its business in Malaysia and Thailand, given that Tesco is one of the pioneers to introduce online purchase and delivery among other hypermarkets through its Grocery Home Shopping Service. Support your answer with examples. 5 3-4 1-2 0 Total Marketing environment 1: Excellent answer with complete facts Acceptable answer with basic facts Correct but no Supporting facts Wrong answer Marketing environment 2: Excellent answer with complete facts Acceptable answer with basic facts Correct but no Supporting facts Wrong answer Marketing environment 3: Excellent answer with complete facts Acceptable answer with basic facts Correct but no Supporting facts Wrong answer Marketing environment 4: Excellent answer with complete facts Acceptable answer with basic facts Correct but no Supporting facts Wrong answer Article 1 Tesco sells businesses in Thailand, Malaysia for US$10.6b • CORPORATE NEWS • Monday, 09 Mar 2020, 3:14 PM MYT, By Joseph Chin KUALA LUMPUR: Tesco, Britain's biggest retailer, is selling its businesses in Thailand and Malaysia to Thailand's CP Group entities for an enterprise value of US$10.6bil. The disposal involved Tesco’s entire shareholding in Tesco Stores (Thailand) Ltd, Tesco Stores (Malaysia) Sdn Bhd, it said in a statement on Monday. The companies under the CP Group are C.P. Retail Development Company Ltd, Charoen Pokphand Holding Co., Ltd, CP All PLC and C.P. Merchandising Co., Ltd. “The disposal will simplify the Tesco Group, enabling a stronger focus on its retail businesses in the UK and Ireland and in Central Europe. The disposal also realises material value for Tesco’s shareholders and allows the Tesco Group to further de-risk the business by reducing indebtedness through a significant pension contribution of £2.5bil, ” it said. https://www.thestar.com.my/tag/corporate+news https://www.thestar.com.my/authors?q=Joseph+Chin GSRM7223 Marketing Management Tesco said the disposal represents an enterprise value of US$10.6bil (equivalent to £8.2bil) on a cash and debt free basis, representing an EV/EBITDA multiple of 12.5 times. The net cash proceeds are expected to be US$10.3bil (£8bil) before tax and other transaction costs. To recap, Tesco began operating in Thailand in 1998 through Ek-Chai, which operates under the name “Tesco Lotus”, a network of stores comprising various formats across Tesco Thailand as well as an online shopping platform and third-party applications such as Lazada and Happy Fresh. Tesco Lotus generated approximately £4.1 billion in revenue (excl. VAT, incl. fuel) in the financial year ended 23 February 2019, operates a network of 1,967 stores across Tesco Thailand and serves over 13 million customers each week. As part of its offer to customers and to support the core grocery business, in many large freehold and leasehold stores Tesco Thailand has developed an attractive and profitable mall business, which in its own right is one of the largest such operators in the market. As for Malaysia, Tesco began operating in the country under the name Tesco Malaysia in 2002, as part of a joint venture with Sime Darby Bhd. Tesco Malaysia is a leading grocery retailer in the Malaysian market and one of the most recognised retail brands in Malaysia. “It generated approximately £800mil in revenue (excl. VAT, incl. fuel) in the financial year ended 23 February 2019 and operates a network of 68 stores across Malaysia. Tesco Malaysia supplies its stores from two distribution centres in Malaysia, with its stores and distribution centres located on and within land and buildings either owned, leased or tenanted by Tesco Malaysia, ” it said. As in Thailand, Tesco Malaysia operates a highly successful mall business alongside its retail stores from its freehold and leasehold estate. Tesco said the consideration payable to Tesco after the disposal represents an enterprise value of US$10.6bil on a cash and debt free basis, representing an EV/EBITDA multiple of 12.5 times. The transaction values Tesco Thailand at an enterprise value of US$9.9bil, including US$400mil of net cash. The transaction values Tesco Malaysia at an enterprise value of US$700mil, including US$600mil of net debt. “Following completion, the board intends to return c.£5bil to shareholders by way of special dividend, ” it said. Source as on 31 March 2020 https://apicms.thestar.com.my/uploads/images/2020/03/09/597604.jpg https://www.thestar.com.my/business/business-news/2020/03/09/tesco-sells-businesses-in- thailand-malaysia-for-us106b https://www.thestar.com.my/business/marketwatch/stocks/?qcounter=SIME https://apicms.thestar.com.my/uploads/images/2020/03/09/597604.jpg https://www.thestar.com.my/business/business-news/2020/03/09/tesco-sells-businesses-in-thailand-malaysia-for-us106b https://www.thestar.com.my/business/business-news/2020/03/09/tesco-sells-businesses-in-thailand-malaysia-for-us106b GSRM7223 Marketing Management Article 2 Malaysia Tesco opened its first store in Malaysia in May 2002 with the opening of its first hypermarket in Puchong, Selangor. Tesco Malaysia currently operates 49 Tesco and Tesco Extra stores. Tesco has partnered with local conglomerate Sime Darby Berhad, which holds 30% of the shares.[31] In 2007, Tesco acquired the Malaysian operation of the wholesaler Makro, which was then rebranded as Tesco Extra and provides products for local retailers. There has been plans to relaunch all its stores in Malaysia to Tesco Extra. Besides giving the store a contemporary design and a brighter look, the new Tesco Extra brand features a shop-in-shop concept with an optic shop, pharmacy, bistro and phone shop. Till date, 7 out of the 52 outlets have been rebranded to the new format namely: Tesco Extra Mutiara Damansara, Tesco Extra Bandar Bukit Puchong, Tesco Extra Ara Damansara, Tesco Extra Seberang Jaya, Tesco Extra Desa Tebrau, Tesco Extra Bandar Bukit Tinggi in Klang, Tesco Extra Mutiara Rini and Tesco Extra Ipoh Garden. Tesco Malaysia offers a value range, its own branded range, electronic goods, the loyalty clubcard and clothing. Tesco Malaysia's Clubcard introduced Green Clubcard Points in 2007 making Tesco Malaysia the first Tesco international business to introduce the Green Clubcard Points scheme.[32] In April 2013, Tesco Malaysia launched the Grocery Home Shopping Service, where it delivers groceries ordered via the Internet to consumers, with no minimum purchase imposed. There will be a RM10 service charge for each delivery and online customers may choose a delivery time slot from 10 am to 10 pm daily. Payment is made via credit or debit card. The service is currently offered to customers living within the 20 km radius of Tesco Extra outlets.[33] The Malaysian operation of Tesco also includes a convenience store, Tesco Pernama Ekspres, which began its operation in February 2015.[34] Source: https://en.wikipedia.org/wiki/Tesco_International_operations THE END https://en.wikipedia.org/wiki/Puchong https://en.wikipedia.org/wiki/Selangor https://en.wikipedia.org/wiki/Sime_Darby https://en.wikipedia.org/wiki/Tesco_International_operations#cite_note-31 https://en.wikipedia.org/wiki/Makro https://en.wikipedia.org/wiki/Bandar_Bukit_Tinggi https://en.wikipedia.org/wiki/Bandar_Bukit_Tinggi https://en.wikipedia.org/wiki/Klang_(city) https://en.wikipedia.org/wiki/Tesco_International_operations#cite_note-32 https://en.wikipedia.org/wiki/Tesco_International_operations#cite_note-33 https://en.wikipedia.org/wiki/Tesco_International_operations#cite_note-Tesco_Pernama-34 https://en.wikipedia.org/wiki/Tesco_International_operations