Subject : Welcome to Tesco and Homeplus’s Business Report 2021

Dear Managing Director of Tesco,

With this email, I would like to introduce myself as Homeplus’s CEO. I am thrilled to welcome
you on board and I’m excited about the things that we will be working on the near future.

As Tesco is Homeplus’s parent company, we care about giving our team every information
they need to perform at their very best. As you can see attached below, we have prepared
Homeplus’s Business Report of 2021 to help you prepare for your first week and give you a
better understanding of our company and operations.

Homeplus continues to work and committed to becoming a leading discount store and retail
chain company in South Korea. Homeplus is a customer-oriented company and we are
capable to expand our business every year. Hence, we are very happy to have a joint venture
with Tesco in the early 2000s.

However, every company will encounter turbulence and problems when responding to new
challenges and market trends, we as a team will always be ready to respond to problems that
will arise. Therefore, I also present several solutions for our current problems that are written
in the business report that I sent to you. I am very open for your input and suggestions if you
wish to convey. This business report will always be updated and I will make sure that you will
always in the loop of the email so the records can be maintained, you are also allowed to
discuss this business report with your management team and other teams.

If you need any further information prior to the report, please do not hesitate to contact me
via email or call me and I will be more than happy to help you.

I’m looking forward to working with you and seeing you achieve great things!

Best Regards,

Aisha Cinintya, S.E

Chief Executive Officer of Homeplus
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Table of Content

• Table of Content ……………………………………… 2

• Executive Summary ……………………………………… 3
• Introduction ……………………………………… 4
• Main Body: Business
Report 2021 ……………………………………… 5
o The problem ……………………………………… 5.a
o The solution ……………………………………… 5.b
o Key to success ……………………………………… 5.c
• Conclusion ……………………………………… 6

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Executive Summary
Overview – The Quick Pitch
Behind the success of the Homeplus brand is a company called Tesco, a tea retailer founded in
1919 from London, United Kingdom. Tesco has started a joint venture with Samsung, one of the
biggest chaebols (business group) and has successfully entered the Korean market. Homeplus is
Tesco's plan to seek international expansion in the early 1990s.

However, the joint venture business faced various problems such as cultural differences,
language barriers and communication problems. After applying the principles of inclusive
strategy, localized marketing and globalized management, Homeplus continued to grow rapidly
in Korea.

The company continues to experience ups and downs, the management team are trying
earnestly to follow market trends and remain a leading company in Korea, for example various
problems that arise with government regulations, disputes with mom-and-pop markets during
the transformation to SSM, and also the developments in the digital world.

With this business report, we will present the various problems we are facing in 2021, how we
respond to them, and also we present the various solutions that we have prepared for the
company, and forecasts for the problems that we may face in the future.

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Introduction
Homeplus is one of the leading giants in the Korean retail industry. This report describes the
Homeplus business journey in 2021 since Homeplus was founded in a number of branches with
25,000 employees across South Korea.

Homeplus has entered the Korean retail industry with a wide variety of products, emphasizing
customer relationships that have served as a competitive advantage for Homeplus. Homeplus
has achieved exceptional results across the Korean market by supporting customers with high-
quality products at low prices and providing excellent customer service to their customers. This
allowed the company to gain customer loyalty and sustainably expand its customer base. It is
another competitive advantage of Homeplus.

Recently, in the face of slowing discount store growth in 2003, the company's management
considered diversifying its business structure into different types and retail-style structures. The
company has diversified its retail format from discounted retail to super-supermarkets (SSMs).
In addition, SSMs were relatively smaller than large discount retailers but larger than traditional
retailers.

As the SSM was a new idea and customer-centric, the SSM industry grew strongly over time and
many discounters saw the great potential of the industry as a whole and moved to SSM. This
intensified the overall competition of the SSM market, which also had a negative impact on mom
and-pop shops (Korean traditional small grocery stores). With SSM, mom-and-pop shop sales
decreased by approximately 42.29% as customers moved to SSM. Therefore, the mom-and-pop
shop has seriously protested against SSM to regain the market. Legislators find ways to protect
small store owners while South Korean consumption is changing rapidly with online orders, and
Homeplus faces new challenges and market trends to sustain future growth and find the right
strategy.

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Business Report 2021
The Problems
After experiencing various setbacks and progress in business, Homeplus is faced with new
problems in 2021 namely government regulations on SSM and intense competition in the online
shopping world. Homeplus must also be alert to face several challenges in 2022 that are likely to
occur.

The Solutions
The solution that must be implemented immediately, it is to join various communities with local
residents, so that Homeplus can offer cooperation in the form of a franchise that benefits both
parties.

While improving relations with the community, Homeplus can seek approval from the
government to remain SSM and obtain a long-term solution for all parties.

In addition, Homeplus must offer delivery services that can send ordered goods from anywhere
to the desired destination with a swift delivery time so that Homeplus can win the competition
in the online world.

Key to Success
To be a company that is always at the forefront of innovation, Homeplus must always be alert to
problems that may occur in the future. One of them may be the problem with the local
community that is growing because they are still persistent about their mom-and-pop store
rather than having to franchise because it will cost them more. To address this problem,
Homeplus can use a method by creating a decision-making system that can provide self-direction
to local store owners to make decisions about what items to sell at local stores or mom-and-pop
up stores.

In Homeplus, we believe the important success factor is also related to organizational leadership
and strategy. It's about how we aligns our behaviour, corporate brand, and governance structure
with corporate goals. In order for an organization to remain profitable over the long term, we
need to define long-term goals and develop a viable plan to achieve them. Strategic focus
includes assessing customer needs, market conditions, and other external factors to set and
achieve business goals.

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Conclusion
Recommendations
The conclusion from the Homeplus 2021 business report is that Homeplus is a company never
loses its strategy and reason to solve problems that come unexpectedly. It doesn't break the
management spirit to be better, instead it improves the mindset and sharpens the knowledge of
the entire team and management at Homeplus.

Indeed, every year Homeplus always faced various challenges as trials for its success. Since the
early 1990s, the company had experienced cross cultural problems, the team and management
worked together to solve the existing problems and barriers. The confidence and persistence of
the employees have kept Homeplus moving forward in the 2000s era until now.

However, we recognize that a problem is a test that we must overcome in order to become
stronger and more successful.

Therefore, the obstacle that Homeplus have overcome together in 2021 are as the following:

1. Difficulty with new government regulations that forced us to be patient to seek SSM
approval and find the best solution in the long term for every party,
2. Difficulty that arises with local stores that make us more familiar with small
entrepreneurs in the community,
3. Difficulty that arises due to strong competition in the digital world, which makes
Homeplus expanding with home delivery services so that people can shop with just
one click away from home,

With this we are grateful that with the difficulties that occurred in 2021, it taught us to rise again
and to become a stronger company, we are enthusiast to solve various problems that might arise
in the foreseeable future, we are happy to develop new strategies for the next few years and are
ready to provide the best for customers.

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