Tesco is an international retailer with sales in excess of $50$ billion, operating around $4,000$ stores worldwide, employing almost half a million people and serving millions of customers each week. It sells a wide range of items including groceries, petrol, financial services, electrical goods, household items, toys and even furniture. Although based in the UK Tesco now trades all over the world. One of its big successes is Thailand, where it has $476$ stores and employs over $36,000$ people. Tesco$$s expansion strategy is founded on the need to provide quality products, convenient locations and opening hours and value for money. The company has come to realize that international markets need differing local approaches, with local supply chains, different store formats and sensitivity to local traditions. So how does Tesco $($branded $$Tesco Lotus$$ in Thailand$)$ adapt its operating practice to local conditions?

Some things are relatively straightforward. For example, those stores with limited opening hours open at $9\mathrm{.}09$ precisely, as Thais believe these numbers bring good fortune. Other things are based on a thorough understanding of local customers. They discovered that around $5\%$ of their customers were actually small family$-$run stores taking advantage of Tesco$$s lower prices. Rather than discourage this they developed their $$Club Pack$$ products that shopkeepers could break up and sell in their own stores at a good profit. They also investigated the shopping experience their Thai customers really want. $$We started out by asking our customers what they want our stores to sell and look like. From the responses that we received, we realized that the optimal solution would be best delivered by Tesco Lotus constructing its own malls$($Mrs Veena Arunyakasem, Mall and Media Director, Tesco Lotus$).$

So$,$ they developed two new concepts, the Lifestyle Shopping Mall and Community Mall. Lifestyle Shopping Malls contain the flagship hypermarket stores and other shops, including restaurants and banks, promoting high$-$quality local brands rather than expensive imported brands. $$These $$lifestyle shopping malls$$ provide better service and increased convenience to our customers.

The biggest beneficiaries will be our upcountry customers who have previously lived a long way from the nearest cinema$($Gwyn Sundhagul, Tesco Lotus Director and Chief Marketing Officer$).$

Community Malls are smaller and emphasize easy access to local neigbourhoods.

Other local developments take account of cultural sensitivities$.$ Thais greatly admire individuals and organizations that help the poor. So Tesco set up $$Tesco for Thais$,$ a non$-$profit charitable foundation.

The green agenda is also important in Thailand and large organizations are expected to lead the way. In $2004$ Tesco opened its first $$green$$ superstore in Bangkok.

This store includes a range of energy$-$saving initiatives including recycling and the use of rainwater, with its air conditioning run by solar panels, the size of three football pitches, on the roof.

Instructions: Answer all questions

QUESTION ONE

Develop the supply chain model for Tesco$$s Lifestyle Shopping Mall $(10$ Marks$)$

QUESTION TWO

Explain the demand side factors that Tesco would consider when locating Community Mall $(10$ marks$)$

QUESTION THREE

With the issues of environmental protection becoming more important, Supply chain designers have to take account of $$green$$ issues. Interest has focused on some five fundamental issues. Discuss these issues explaining how Tesco can be environmentally sensitive in its operations