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Mydin Expansion And Expansion Strategy Analysis

Mydin Mohamed Holdings Bhd is an area business organization in retail industry under the authority of leader, Datuk Ameer Ali Mydin. The business starts its procedure since 1957 in retail and inexpensive. In the economical environment, Mydin face concern from other key players such as Large, Tesco, Carrefour and Econsave. Presently Mydin has 4 hypermarkets and its total stores are 55 which located at Klang Valley, Terengganu, Kota Bharu, Seremban, Nilai, Johor, Alor Setar, Melaka, Penang, Pahang and Kelantan. To compete, the company designs to develop their business and expand organically. Mydin enforced low prices strategies and provide economically price goods to its customers. Surely, the growth and progress will influence the business goal. Below is the comparison data of sellers with its number of stores in Malaysia.

Retailer

Number of stores

Giant.

40(hypermarket/superstores)

Total Large stores: 100

Tesco.

35(hypermarket)

Carrefour.

23(hypermarket)

Econsave.

38(supermarket & hypermarket)

Mydin.

4 hypermarkets.

Total Mydin stores : 55

Hypermarket list is not exhaustive.

[Business Times, Saturday, July 31, 2010]

Therefore I'd like to investigate whether Mydin's expansions and growth strategy is viable to the business to get market share and emerge as market leader.

RESEARCH Track record.

This commentary will be based on these following supporting documents;

MYDIN EXPECTS 10pc Climb IN Revenue,

Q&A with Datuk Ameer Ali (Mydin)/SKORCAREER

Mydin to built its biggest hypermart in Kota Baru/Business Times.

New logo, motto for Buy Malaysian Plan/mydin. com. my

INTERNAL CENTRE OF LEADERSHIP(ICLIF)-2009/MYDIN RESEARCH STUDY.

Microsoft Works with Malaysian Retailer's Ambitious Strategies to Expend.

Malaysia mulls bar-code system for halal, products Business Times

MARKETING.

Marketing Planning.

As a retail company in Malaysia, Mydin had put into practice several marketing planning to enhance their sales and obtaining bigger market talk about. Therefore, this commentary will study the marketing mixture approached by Mydin to successfully market their product and formulate their online marketing strategy. Therefore, Mydin can techniques towards learning to be a market head.

Marketing mixture:

Product.

Mydin has a wide range of products such as food range, soft collection, hard-line and household items. Due to the wide selection of product, Mydin will advantages from larger customer platform. This will give positive gain to Mydin as its customer can buy all products needed at lower and cheaper price. As a local player, Mydin provide items which are complement with its customers need. Majority of Malaysian are Muslims. Therefore, Mydin provide local prayer mats, prayer garment for ladies and traditional product which are rarely found anywhere else. However, Mydin should think about its non-Muslim customers because of the image of where only Muslim shops.

Place.

Besides, Mydin happens to be expending their business into different format particularly hypermarkets, emporium, and My Mart (24 hour convenience stores). As referred to development of Mydin's chain by the year 2009 to 2020, the business enterprise forecasted to possess 26 Hypermarket, 60 Convenience Store, 20 Emporium and 5 My Mart. This investment cost the business a large sum of money which is RM 200million for supermarket and 60 million for the building of hypermarket. The managing director attempts to emulate the development strategies of Kmart with My Mart although Kmart experience individual bankruptcy. This development can help Mydin, reachable for its customers with various channel of distribution. For example, the choice to make the largest hypermarket in Malaysia at Kota Baharu is because of high demand and greater land available. However, Mydin should think about their large growth as they might be affected by diseconomies of size.

Promotion.

In conditions of advertising Mydin apply 'me-to-promotion' where Mydin follow and react to their competitors marketing strategies such as purchasing similar advert board and article from newspaper. One of its stores in Subang Jaya has an electronic billboard, controlled digitally from its office. This provides fast response toward its rival's advert. Besides, Mydin should think about having other marketing strategies such as advertisements through website or radio to provide complete information and knowing of their lifestyle.

Price.

Mydin is well-known for retailing its product at general price (40% of its business is inexpensive). When compared with its rival, (Large, Tesco and Carrefour) Mydin is a favorite place for shopping especially in amount of economic down flip. They gain RM 1. 3 billion in '09 2009 from RM 1. 1. in 2008. This demonstrates that as Mydin develop naturally, they gain power in volume level, thus can sell cheaper when compared with its competitors. Therefore, the situation is inciting its marketing target.

Positioning.

Market positioning is essential to portray a good commercial image and differentiate Mydin's product over rivals. The unique selling point (USP) of Mydin that makes the business stand out from others is the embracing the concept of Halal (following the dietary laws in Islam). As most Malaysian are Muslim and incredibly particular in Halal product, the USP can be an added advantage.

Mydin popular slogans: "Where everybody can purchase" provide a notion towards the customers that in retail industry, you can purchase product cheaper at Mydin. But Mydin need to maintain the image by giving items cheap and not providing cheap items with low features. Mydin can understand its brand to be always a bargain brands (at high quality but with good deal) although it's hard to maintain. Therefore, with the expansion and growth strategies, Mydin is moving from Overall economy brands towards Great buy brands.

Quality

High

Low

High

Premium brands

Cowboy brands

Low

Bargain brands

Economy brands

Price

Figure 1: Belief map showing relationship between price and quality.

The slogan is consistent with government's campaign, 'Buy Malaysian" which educates Malaysian to buy local product (Mydin provide local product on its cabinets). Mydin's store at Subang Jaya has been chosen as the area for exhibition attends by Perfect Minister to kick off the plan. Besides, Mydin as well as Halal Development Council (HDC) arranged Halal training curriculum course for small- and medium-sized entrepreneurs (SMEs). The organization social responsibilities (CSR) done by Mydin improve its image and can attract customers to choose Mydin rather than others.

OPERATION MANAGEMENT.

Product Planning.

As Mydin grow, the business enterprise may influenced by overtrading due to stockpiling. This situation can increase cost and later absorb on the price of product. Hence, Mydin choose Microsoft Dynamics AX for Retail to applied Just-In-Time stock management. The program provides information because of its suppliers and decision-makers so the distribution of companies runs effortlessly from stores to provide chain. By this, Mydin can become more responsive to its customers, reduce their break-even point, and improve cashflow and the working capital pattern. Consequently, provide competitive advantage towards its rival.

HUMAN RESOURCES.

Organizational Structure.

Besides, Mydin interfere coordination issue of its managers as the business grow hierarchal taller and wider period of control. Communication over the organizational structure will become frustrating and using case may be distorted. To beat this, Mydin decide on Microsoft Office SharePoint Server 2007 that allows substantial information to be provided to all or any layer of the organization and its own suppliers.

Motivation.

In becoming a market innovator, Mydin must have a beneficial employees to generate larger working capital. 16. 2% of its workers are foreigners and the rest of the are locals. To set-up sense of owned by work and generate teambuilding between employees, the business provides financial and emotional support. Corresponding to Maslow's hierarchy of needs, people are encouraged more than simply money. Mydin satisfies the sociable needs of its employee by performing birthday parties, ethnical boogie and inter-branch sports.

CONCLUSION.

Mydin has executed huge growth and organic expansion of its company. They make an effort to gain their market talk about by becoming more competitive toward its rival. In becoming so, a change throughout the organization is done. Based on the marketing planning completed, Mydin happens to be on the right direction towards its corporate objectives. We are able to notice how Mydin develop tactical marketing mix to successfully market their product. However, you can find some areas that needs to be improved and focus on. In terms of product, Mydin can try to appeal to non-Muslim customers with a advertising or creating an image of Mydin as a place for anybody.

Besides that Mydin has wide channel of distribution. However, Mydin also needs to consider coping with diseconomies of scales. One of the alternatives is by adding measures to remove fruitful inefficiencies. Mydin might matter the potency of each of the business format. The marketing strategies indicate that Mydin can gain higher market talk about from its competitive edge in promotion and price.

In positioning their product, Mydin possessed done it well through their USP, slogan and CSR enjoyed. They manage to give clear perception of the business enterprise to public. Hence, they can gain more customers in the future. In operation management and human resources, Mydin try to centralize their management to hinder business goes at loss also to make efficiencies. Their decision to cooperate with Microsoft Corp. is a right choice to place Mydin at top among other key players. Also, without neglecting its employees needs and needs.

Overall, predicated on the research of marketing planning, procedure management and people resource Mydin expansion and growth strategies is viable for the business enterprise to be always a market innovator in retail industry.

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