Tesco Economic Factors

1. INTRODUCTION OF THE COMPANY

Tesco Public Limited Company is one of the largest companies known worldwide, they are the multinational grocery and general stores that has many branches around the Europe as well as Asia. They have been labeled as the grocery market leader in the UK and the third biggest retailer due to its profit measures. Tesco was originally founded in the year 1919. The founder of Tesco was a person by the name Sir John Edward Cohen or also known as Jack Cohen, he was a market stall holder in Hackney, London and soon started a wholesale business.

Not until the year 1924, Jack Cohen officially created the Tesco brand name from a tea supplier initials, by the letters, T & E Stock well, and combine the T E with his first two

As this plays an important part because as the income level is relatively lower, the income per capita of Malaysians will result in a low purchasing power that makes Malaysia a price sensitive market. So the solution is that Tesco may have to change the products, such as lowering the quantity, lowering the price so that consumers can spend the product that they can afford in relation with their income levels.

The increase in unemployment level of citizens in Malaysia has been a major concern for the government. Therefore the Malaysian government appoints employment restrictions for all the multinational companies in Malaysia to hire their local people. Tesco may take this as a challenge due to the pressure of hiring Malaysians and train them in comparison to foreign employees. As they know foreign employees is more skillful in handling the management of the company and much more efficient. By taking the local people at Malaysian, Tesco will have an increase in operational cost due to training the local to meet their skills requirement. Providing training for the local staff will be expensive and it is a time consuming

In Malaysia the concept of Halal food is strictly monitored. The Halal and non-halal of product consumption is an important issue in any Muslim country, such as Malaysia. Malaysia is an Islamic country and the demand of Halal food is quite high compared to the non-halal ones. First thing consumers look for is the certified Halal label. Tesco will need to have a certified Halal certification on all of its products and they will have to show the logo of Halal on each of the certified halal product. To get the Halal certification it will cause a rising of its operating cost on every product that they certified on. With a short term of validation only for one year, Tesco will have to manage the cost of the operating cost of Halal certification every