Posted at 11.15.2018
This paper is a company examination on Giant Hypermarket Malaysia generally, but specifically concentrating on Large Hypermarket Sabah. Large Hypermarket is a major supermarket and retailer string in Malaysia. It really is a subsidiary of Dairy products Farm International Holdings (DFI) and it is headquartered in Shah Alam, Selagor. Within this paper, firstly we concentrate our research in discovering the Strength-Weaknesses-Opportunities-Threats (SWOT) of Large; in addition, we designed a SWOT Matrix for Large where we discovered the SO, ST, WO and WT strategies, which we think Giant should apply to enhance their competitiveness. Next we concentrate our analysis on the external as well as the inner analysis on Large. In the exterior analysis, we center our analysis based on two instruments this is the Standard Environment which is also known as the PESTLE research to help us to understand the external environment where the organization runs, and also Porter's Five Pushes Model to recognize their industry competitiveness. Alternatively, in the internal analysis, we also used two musical instruments to analyze Giant, which is by doing an evaluation on the Value Chain as well as by identifying their market development and market talk about in BCG Matrix. Finally, we conclude our research with some advice that we suggest Giant should concentrate on to better improve their supermarkets.
Giant Hypermarket, which is owned by Giant Capital Holdings (GCH), is one of the largest hypermarkets in Malaysia. It was founded in 1944 by the Teng family in Kuala Lumpur. It's headquarter is situated at Shah Alam, Selagor, on the other hand Sabah-Sarawak-Brunei Regional headquarter is positioned in Kolombong Shop, Kota Kinabalu. The key people to the success of Large Hypermarket will be the Teng Family themselves, and CEO Dato' John Coyle.
Giant is functioning under the retail industry. Its main opponents are Servay, Milimewah, and Chua Kah Seng in Sabah, while Mydin for the american part of Malaysia. Giant's mission was always been to provide a wide variety of products at the cheapest possible price. Their slogan which says "Everyday Low Prices, big Variety and Great Value" communicates the company's mission to the public.
Although Giant Hypermarket have been long operating at the traditional western part of Malaysia, its procedure is fairly not used to the local people of Sabah. Knowing this fact, Giant has included states such as Sabah, Sarawak, and countries such as Brunei in their proper plan for expansion. In order to implement their tactical plan, their strategy includes figuring out stores to takeover (i. e. Likasmart in Sabah), and adding low prices insurance agencies staffs surveying competitor's prices at major supermarkets retailers.
Giant Hypermarket currently has around 1, 000 staff in Sabah itself, and 10, 000 employees in total nationwide. Some of the employee benefits that Large employee receives for working in Giant are worker insurance, a 10% discount when purchasing within group (i. e. Giant Hypermarket, Guardian Pharmacy, and Cold Storage space).
Besides having plenty of wall socket stores around Malaysia, Large also has shop stores surrounding the Southeast Asia countries such as Singapore, Indonesia, Vietnam, India and also Hong Kong. Information about Giant Hypermarket and campaigns details can be reached through Giant's Official Website which is www. giant. com. my.
Below is the price comparison we performed during our interview visit to Large Kolombong, between Giant house brand products with other major brands. It is clear that Giant house brand products are cheaper in comparison to other major brand which is really as the following:
Product Giant Brand
(RM) Other Brands
Baby diapers (M) 27. 49 35. 99 (Pampers)
Dish washer 3. 79 4. 39 (Natural light)
Liquid Softener 6. 29 6. 99 (Softlan)
Sos Ketchup Chili 1. 99 2. 29 (Maggi)
Box Tissue (4's) 6. 99 7. 89 (Premier)
Mineral Normal water (1 L) 0. 89 2. 19 (Spritzer)
(500 ml) 0. 69 1. 19 (Spritzer)
BACKGROUND FROM THE COMPANY
Giant Hypermarket is a significant supermarket and merchant chain in Malaysia. It is a subsidiary of Dairy Farm International Holdings (DFI).
The Large store brand was founded by the Teng family as a straightforward grocery store in another of the suburbs of Kuala Lumpur in 1944. Its quest was to provide a wide selection of products at the cheapest possible prices. As its reputation grew, so do its business.
Dairy Farm, which acquired Giant in 1999, accepted that the key to Giant's success had been its ability to continually offer affordability products. It maintained this core concept even as it began changing Large into a countrywide and international brand.
After six many years of effort, which included redesigning the stores, the introduction of the non-food products into the Giant hypermarkets, the execution of international retail requirements that includes basic safety, cleanliness, organised training, and a captivating shopping environment as well as centralized buying functions and upgraded operations, Dairy Plantation has made Giant the undisputed leader in Malaysia's retail sector.
In 1999, the first Giant Hypermarket store opened in Shah Alam, Selangor. By 2007, the company had grown to operate a complete of 85 hypermarkets/ supermarkets in Malaysia with wall socket size ranging from the 350, 000 sq. ft hypermarket in Shah Alam to the 11, 000 sq. foot supermarket in Bangsar, Kuala Lumpur. The string also contains 7 stores in Singapore and 15 hypermarkets in Indonesia. Large hypermarkets offer an array of local merchandise, such as fresh local fruits, vegetables, and seafood in a wet market environment.
A SWOT research summaries the main element issues from the business environment and the strategic capability of a business that are most likely to impact on strategy development. It is also useful as a basis against which to create strategic options and evaluate future classes of action. The goal is to identify the magnitude to that your current power and weaknesses are relevant to and capable of working with the changes taking place in the business environment.
Here, we will assess the strength-weaknesses-opportunities-threats of Giant one at a time in order to totally understand the problems Huge face. First, we will discuss about their strengths. Giant indeed is one of the greatest players of the retail industry in Malaysia, having over 85 branches disperse throughout the united states making them one of the most significant supermarket chains in Malaysia, which is good because this way they can take the market show and over time space out their rivals. Unlike TESCO and Carrefour which only focuses their customers in major towns, Giant's 85 branches are situated near commercial establishments throughout the country and expresses, making them more attractive with their customers.
Besides that, having their own house brand is an excellent way of marketing their brand name to their customers. Large house brand is quite cheap in comparison to other major brands available in the market, which can make them more sellable to their consumers. In addition, Giant has a reputation of value for money, that provides low prices, sometimes even less than cost, which is good in the attention of the customers.
Giant also has a good marketing team whom are in charge in marketing and promoting Large brand name to the public. The principal marketing tools with their marketing team is by buying billboards space, advertising in magazines and by distributing flyers and brochures. These methods is shown to be useful particularly when Giant first created their stores in Sabah, because relating to their professional, increasingly more customers will their supermarket in comparison to before when they in the beginning opened. Another strength of Giant is that, they have a good marriage using their suppliers where in the recent recognized opening of these store in Kolombong, they made a offer with their distributor to provide them free products when they purchased more for the starting day. The free products are subsequently promoted for only RM0. 10 on the opening day which causes many to carefully turn up to buy the products, and indirectly also purchased other products in their store.
The main weaknesses for Large are that, they are simply experiencing a higher turnover rate with their worker especially in the operation department, many of their employee resigns after only working one or two a few months in their supermarket, which is bad to them as they'll need to find and employ new employees. Besides that, running a supermarket especially the hypermarket in Kolombong requires high maintenance, if they are unable to match the maintenance, it will destroy their reputation. For instance, their store in Karamunsing which is not managed well, the store has a certain smell which comes from their previously iced section and the store product are not established well for the capability of their customers.
Another weakness is the fact large size contributes to inefficiency in bureaucracy; their decision making is centralized in their headquarters. Therefore, anything occurred or anything they do, they need to first seek advice from their management team in Shah Alam. Also, Large is experiencing a high advertising cost, especially in Sabah, where they need to introduce their brand name to get their customers and take market talk about.
Furthermore, in costing their products, Large does use the traditional sticker type costing, they uses the shelf type prices which is confusing with their customers, because the price list on the shelf are not frequently updated and often wrongly place. There are several incident whereby a customer found a different price of the merchandise they want to purchased however when they grows to the counter, they are really asked to pay another price which is a lot higher, this create unhappiness and dissatisfaction among their customers.
There are several opportunities for Giant. Firstly, they have ready customers, households now are increasing and everyone must buy household products, this creates a good demand for them. Another chance for them is to explore into new location in Malaysia, which is also in conjunction with their current proper plan which is to open up to 40 branches throughout Sabah, Sarawak and Brunei. Besides that, they can make an effort to boost the variety of their house brand, as well as adding other products for his or her house brand to compete with their competition.
The threats experienced by Large are that there is stiff competition within the industry, there are other major supermarket chains, such as Tesco, Servay, Milimewah, etc. in Malaysia which is contending alongside with Large in the retail industry.
Another threat is the fact that although their house brand is known to their customers, but it isn't their customers preferable brand, their customer still prefers other founded brand name products compared to theirs. Also, review done by Large shows that initially Sabahan cannot acknowledge Giant due to varied reasons, this can be scary for these people because if their customers still cannot admit them for a long-tem period, thus less people will shop in their store and sales will decreases.
Lastly, the threat faced by Giant is online shopping. We are actually in the IT time, people are becoming used of using personal computers to do their daily process, for example to settle payments, copy money, as well concerning buy things. Websites which provides online shopping are such as www. ebay. com. my, www. lelong. com. my, and etc. Thus, online shopping can create risks for Giant standard brick-and-mortar kind of business.
On the other side, the SWOT matrix can be an important matching tool that helps professionals builds up four types of strategies: SO (Strength-Opportunities), WO (Weaknesses-Opportunities), ST (Strength-Threats), and WT (Weaknesses-Threats).
SO strategies use a firm's internal strengths to adopt advantage of exterior opportunities. For the case of Large, their SO strategies might be to explore into the areas in Malaysia, such as with Tawau, Semporna and Miri, as well as to develop internationally in Southeast Asia countries like the Philippines, Thailand, and etc. Also, to increase variety and add products to their existing house brand product to get customer's attention.
WO strategies purpose at improving inner weaknesses by firmly taking advantage of exterior opportunities. For their WO strategies, we think that Large should provide sufficient training and even more employee benefits to their staff especially in the procedure department, to lessen their turnover rate in the future. Besides that, they should also renovate or renovated their bought supermarkets to resemblance their Huge concept and reputation and to continue maintenance of the wall plug. (E. g. Giant Karamunsing wall plug is not maintained well)
ST strategies use a firm's strengths to avoid or decrease the impact of exterior threats. ST strategies that might be appropriate for Giant is always to continue strategy to start more branches to increase market share and to eliminate competition. Besides, to increase marketing