Tesco Lotus’ Outsourcing to Linfox (Thailand)
Tesco Lotus’ outsourcing to Linfox (Thailand)
Case Study Write-Up for Strategic Management
I. Tesco Lotus background relevant to the subject
According to the British Chamber of Commerce Thailand, Ek-Chai Distribution System Co., Ltd, known as Tesco Lotus, was formed in 1998 with only 14 “Supercenters” in key regional locations[i]. Today, Tesco Lotus, as it claims on its website[ii], is the leading retailer in Thailand with running retail business from over 660 Tesco Lotus stores, 88 of which are hypermarkets, provides over 36,000 full-time jobs and have been investing 107 billion baht into Thai economy since 1998.
Its retail multi format business platform includes Hypermarkets and Express Stores, in various sizes, with respectively over 36,000 and 2,600[iii] varieties of products in the category of food and non-food grocery, fresh food, apparel, electronics and daily needed items. Tesco Lotus is also operating shopping malls, example of which is so called “Community Malls" platform that emphasizes easy access at 2-5 minutes driving from home for customers. Where customers can come to do their shopping, relax with a cup of coffee, as well as do their personal errands such as make utility payments or mail their letters.[iv]
In retail business a retailer buys goods or products in large quantities from a manufacturers or wholesalers, and then sells smaller quantities to the end-user. Distribution Centre (DC) is the vital part of retail business, the order processing element. As per Tesco Lotus ' website[v] its order processing takes place in 3 Distribution Centers (DC); in Wang Noi is one of the most advanced DC in Southeast Asia, which is capable of processing 2.2 million cases per week; in Bang Bua Thong, DC Express, handles up to 1.3 million cases and 6.5 million unit packs per week; in Sam Khok, designed to handle 2 million cases per week across 25,000 different product lines. Over 228,000 tons of vegetables and fruits were purchased
Case Study Write-Up for Strategic Management
I. Tesco Lotus background relevant to the subject
According to the British Chamber of Commerce Thailand, Ek-Chai Distribution System Co., Ltd, known as Tesco Lotus, was formed in 1998 with only 14 “Supercenters” in key regional locations[i]. Today, Tesco Lotus, as it claims on its website[ii], is the leading retailer in Thailand with running retail business from over 660 Tesco Lotus stores, 88 of which are hypermarkets, provides over 36,000 full-time jobs and have been investing 107 billion baht into Thai economy since 1998.
Its retail multi format business platform includes Hypermarkets and Express Stores, in various sizes, with respectively over 36,000 and 2,600[iii] varieties of products in the category of food and non-food grocery, fresh food, apparel, electronics and daily needed items. Tesco Lotus is also operating shopping malls, example of which is so called “Community Malls" platform that emphasizes easy access at 2-5 minutes driving from home for customers. Where customers can come to do their shopping, relax with a cup of coffee, as well as do their personal errands such as make utility payments or mail their letters.[iv]
In retail business a retailer buys goods or products in large quantities from a manufacturers or wholesalers, and then sells smaller quantities to the end-user. Distribution Centre (DC) is the vital part of retail business, the order processing element. As per Tesco Lotus ' website[v] its order processing takes place in 3 Distribution Centers (DC); in Wang Noi is one of the most advanced DC in Southeast Asia, which is capable of processing 2.2 million cases per week; in Bang Bua Thong, DC Express, handles up to 1.3 million cases and 6.5 million unit packs per week; in Sam Khok, designed to handle 2 million cases per week across 25,000 different product lines. Over 228,000 tons of vegetables and fruits were purchased