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Parkson Company Analysis

The objectives of the report is to present the studies of the tactical evaluation conducted for Parkson Organization Sdn Bhd and recommend the main element strategies that the organization should implement in order to against with the competitor. So, the survey begins by analyzing the overall environment that affect the progress of corporation, industry condition by using Porter's Five Makes Analysis. The discussion part will illustrate the three stakeholders that affect the decision making of company and organization direction. Next, review the strength, weakness, opportunities and threats which can call SWOT examination. The SWOT examination determines and specifying the objective of the business endeavor or task and identifying the internal and external factors that are advantageous and unfavorable to achieve that goal for company. Finally, discuss about the key selection requirements and advice for Parkson Firm Sdn Bhd. to recognize their ways of against their main competitive and keep maintaining its market talk about, market value and also their company reputation.

1. 3 Opportunity of the report

This report possessed covered the functions of Parkson Company in China, Vietnam and Malaysia. For information, the article had analyzed the internal and external environment and also its industrial conditions and competition which will be the factors of procedure expansion for Parkson Organization Sdn Bhd. Furthermore, the online research such as online article, online mag, online magazine that related to Parkson Firm Sdn Bhd is the major information resources for the evaluation.

1. 4 Limitations

Parkson Company Sdn Bhd has their limitation too. Firstly, not absolutely all customers know the strategy of Parkson Corporation Sdn Bhd. It triggers them to reduce their self-assurance towards the business. For instance, from the functions of Parkson Company in China, it was proved that the market shares drop significantly. It highly depend on China causes customers to lose confidence because of their lack of the info about the company. Besides, the business sometimes revealed some uncertain of their real performance and problems. The real reason for is sometimes the activities do not represent what the report have stated so called transparency issues. Furthermore, Parkson Corporation Sdn Bhd cannot purchase their products through online. It show the inconvenient to the clients when they aren't free or occupied. In addition, it has their limited target market. They only target more on the high income women. Therefore, it shows that it has no obvious competitive edge equate to other rivals. Thus, minus the important information, the business will face a lot of difficult problem. In order to solve their problems for his or her company, they need to try to enhance their operation management.

2. 0 Track record OF THIS Organization

Parkson was one of the popular shopping malls. There is a whole lot of Parkson wall plug can be found round the world. In other country such as China and Vietnam, there is a whole lot of Parkson shop were available to be shop. Parkson was one of the major section store company in China and Parkson currently has 35 stores in Malaysia. Parkson brand department stores was split into 36 brand and 2 Xtra brand. Parkson was founded in the year of 1987. In Malaysia, the creator of Parkson was the retailing arm of the Lion Group which is speedily became one of the greatest shopping malls in Malaysia. As an example, we will get Parkson outlet in Kuala Lumpur such as Subang Parade, Pavilion and other explained as well in Malaysia. Inside the Parkson, they have divided into few departments. The departments were strategically divided into different market sections and locations. The primary purpose of the segmentations was avoiding the customer to be challenging as the stores are classified into 3 tiers depending on suitability of market and location. Because the Parkson was one of the successful shopping mall, it's been given a lot of achievements as their growing from power to strength. Parkson always make an effort to get rid of the conventions and bring a brand new perspective to the retail industry. As an example, Parkson has been given a title of Malaysia Most Valuable Brands in 2009 2009 or known as MMVB. MMVB is a part of a national brand valuation study commissioned by an Association of Accredited Advertising Providers Malaysia and conducted by Interbrand. Other achievement such as Certificate of Excellence Given to Parkson Pavilion being the entire Best Retail Outlet in 2009/2010 and successes that had attained by Parkson. Parkson has its moving forward concentrate on or quest. Parkson will constantly stays true to the needs and aspirations of the consumers. It includes promises to continue to boost themselves to be able to stay relevant. Parkson has emergence of younger time consumers who are well travelled, brand or image conscious and lifestyle-oriented would be the key of Parkson factors which will lead Parkson lead the Parkson brand strategy.

4. 0 Strategic Options

Based on the problem analysis conducted, several proper options or alternatives are proposed for the organisation. These tactical options include:

1. Set goal customer higher

We suggest Parkson Holdings up grade their operation system and relocation their business way by place their target customer among medium school income and upper course income customer. Parkson Holdings also can invite more branded company such as Gucci, LV and other come place their shop lot. There are few shopping mall that sell luxury goods in Malaysia and previously Parkson Holdings' image in public already is a higher cost expenses shopping mall. So now, we suggest Parkson Holdings try to up grade their image and specific their customer portion, which medium and high classes' income customers.

2. Refurbishing and Construct a fresh building

For example, Parkson renovate the whole complexes by upgrade its store image and profile. Parkson can refine all the item to higher income products and brand mixture. This indirectly can boost the efficiency of retail space.

Besides revamp the complete buildings, we'd suggest that Parkson re-construct the building for case let Mahkota Parade to be the Parkson Holdings shopping complex. Parkson will do almost all their business activities inside the shopping organic. Besides that, they also can lease their shop a lot to other suppliers or clients to earn earnings.

3. Conserving cash for potential M&A opportunities and retail property acquisition

Table 1. Major M&As Announced During 2006

Value (RM Billion)

Parkson Retail Group, Lion Diversified Holdings Bhd, and Amalgamated Storage containers Bhd

4. 3

Source: PWC Research

As we can see from the Table 1 above, when Parkson Retail Group merged with Lion Diversified Holdings Bhd, and Amalgamated Storage containers Bhd, it can create the value of RM4. 3 billion. Thus, we claim that Parkson can make to preserve some money for potential mergers and acquisition opportunities and retail property acquisition. As mentioned in the first strategy, we suggest Parkson concentrate on medium and high classes' income customers. Therefore, Parkson can pick to combine with Cold storage space makers that sell high quality products like organic foods and used organic production method. We choose organic and natural foods as green products and services are now becoming the center attention of consumers.

4. Diversified product line to other industry and Retail space

We suggest Parkson to invest in hotel industry other than just Parkson shopping centre organic. For instance: we can refer to Hatten square which have their own structures for retail shopping complex and also hospitality service suites in addition come out the ideas of Information Technology (IT) in their properties. In addition, relating to Parkson, it'll target to extend its retail space by 15% - 20% every year or 9-12 new stores in the countries where it functions. Hence, we suggest that Parkson can aim for country like India as India now is a fast growing country. If globalization success, this indirectly can helps in the formation of international financial system.

5. Live green projects

For example, we can express to Parkson Subang Parade, Parkson Corporation Sdn. Bhd. by executed the 'No Plastic material Carrier Day Every Sunday' green campaign to reduce plastic material hand bags in response of Environmental Community Responsibility (ESR). However, this strategy only addresses in Selangor State. Thus, we claim that this plan can be further executed to all elements of Malaysia. Furthermore, we also could follow the step of just one 1 Utama retail center in Petaling Jaya by come out a technique garden which includes the machine that reduces its usage of treated pipe water by 30%, and a building automation system with sensors that automatically modify lighting and heat range. Moreover, we can also could implemented the step of Tesco Greener Living by turn out green presents which using recycle material to handmade products.

6. Involve in Charity

Apart from that, money that we earn from the Green assignments will contribute to the world for charity work. Parkson can also become a member of charities and organizations that focus on eco-friendly standards of living and options. Parkson can contribute items to schools, churches, city night clubs and organizations. Parkson can promote themselves at eco-friendly occasions and give away items like free gifts or sample at college fairs, carnivals, or local places farmers market. Involved in such events and can help people can become aware of contributing to the fitness of our planet and indirectly to help Parkson build a superior images in market.

Key selection criteria

According to Brundtland Commission rate (1987), ecological development is development that satisfies the needs of the present without compromising the power of future generations to meet their own needs. Ecological development is a suitable goal for small and big businesses almost everywhere, especially for globalization organization. As members of varied communities, we know that society, the environment, and the economy are interconnected. In order to maintain lasting image and income, Parkson will appear few strategies that try to create and much more focus on consciousness, reputation, make profit and efficiency when coming up with strategies.

Profit maximisation is the aim of the owners and shareholders. Company will try to make the most profit as you can. Among the essential factors for Parkson needs to concentrate its sales expansion. Parkson need make as many sales as it can be. This may be because we think that the survival of the business enterprise depends upon being large. Large businesses can also benefit from economies of scale. To be able to this conditions, Parkson will attempt to up grade its store image and account, diversified product line to other industry and also can merger or joint-venture with other sector industry. When Parkson battle to merger with other sector industry or use differentiation strategy, it can help Parkson create good reputation by thrust business in to the limelight and open up entrances for Parkson. Besides, it also can assist Parkson to spouse with a larger company such as Lion Diversified Holdings Bhd, and Amalgamated Pots Bhd to gain access to their large set of customers and it will honestly improve Parkson success and EPS. Parkson can talk about the potential risks with partner and help gain higher competitiveness; nonetheless it can be rigid Parkson to type in the new market and it'll become hurdle to accessibility for Parkson.

Pay attention to environmentally friendly impact of your economic practices, and make an effort to ensure our neighborhoods are healthy, pleasant places to have. Nowadays, organizations began to attending to and actively producing greener products and services to create a focal point consumers. Parkson Company Sdn. Bhd. actively involved in lasting development and follows the pace to adopt environmentally reasonable business concepts and translate these into action. Parkson Corporation CEO raises recognition and reputation at this time, and he feels that the positive impact for the surroundings is enormous for 2011 and well into the future. He take up this approach because he believe that and aware that functioning a green business is not only good for the environment but best for their business's important thing because conserving resources and cutting down on waste will save you money However, Parkson Firm Sdn. Bhd. promotes "No Plastic Bag Day" only includes in Selangor State first, it haven implement in other says. Environmentalism is not any enough for certain places; it will engage numerous urban centers and every branch in promoting the utilization of friendly to the environment bags in order to get more effective and successful effects. Even thorough Parkson Corporation Sdn. Bhd. experienced implement eco-friendly, nevertheless it still no enough to adding to a wholesome world and more healthy place for us and for the future. Parkson should put more improvement and development to execute eco-friendly. For instance, we can follow the step of Tesco Greener Living by come out green gifts which using recycle materials to handmade products. We can also put more focus of store on the eco-friendly category. Parkson can let customers see that we now have exercising what their sell. If customers feel like you have a true passion about the surroundings, it will help them purchase these items confidently. If customer is interested in an item, try to offer them a similar item that is eco-friendly. It not only can make contribution to making the planet an improved place; it also straightforwardly can enhance and create awareness to customers and build customer loyalty.

In order to determine where it is certainly going, the organization must know exactly where it stands, then determine where it wants to go and exactly how it will get there. Parkson need to carefully set up unique value proposition and strategies in comparison to competitors, carried out through operations offering different and tailored value to customers and drives continual improvement within the business and steps it toward its eyesight to be remembered as market leaders in market.

6. 0 Recommendation

Key Questions

Option/Hypothesis/ Recommendation

Decision Criteria



(i)Parkson had started to focus on the environmental impact of the economic routines, and try to ensure that our neighborhoods are healthy, pleasurable places to reside.

(i)Parkson should propose the shop electric outlet to truly have a zero plastic tote day to be able to archive a green environment target.

(ii)Zero vinyl on Saturday was not enough to impact the client to become more renewable environmental minded but should connect with other day as well.

(i)No plastic carrier was given to the customer whenever the customers purchase their products in Parkson during Sunday period.

(ii)The clients who really or ask for the plastics carrier will be fee for 20 cent each.

(i) A green business able to provide a much better environment and also a good for their business's bottom line because conserving resources and reducing waste preserves money.

(ii) In a position to prevent damaging the surroundings from the chemicals in cleaning products that are sprayed out into the air.

(i)You will see some of the customer dislike the strategy of the Parkson

(ii)The client might be dislike to shop on Sunday.

(iii)The non given clear plastic bag strategy might cause the sales of the Parkson drops.

(iv)Other competitors might profits advantages on Parkson strategy and increase their sales.

Since everyone of the shopping mall had began to give consideration on the green environment activities, the Parkson also acquired began the move on it. A lot of the shopping complex experienced their own strategy like no plastic carrier will be provide to the customer who purchase products or item on Sunday. We believe it isn't enough for Parkson to active upon this program. Because of this, Parkson can improve it insurance firms more zero plastic bag days for the week. Nevertheless, it is important for the shop store in Parkson to be corporate and business with them as well. The shop wall plug can also propose never to provide plastic carrier to the customer. In directly, it can benefit our environment to be an improved place and can also help them to save their cost.

(ii) How Parkson time for you to times change enhance their Parkson images and environment of the shopping complex?

(i) Parkson can create their own excellent market and no need other very market or hyper market such as Freezing Storage. With this, Parkson can have a much better environment and gain more competitive advantages.

(ii) Once Parkson have their own brand name, they can try to sell their product at other retail center in order to truly have a different shopping environment for the customer.

(i)Parkson always build or refurbish their building As an example in Malacca( Mahkota Parade acquired relocate the shop location and coloring their building.

(i) Parkson able has a much better management for the shop.

(ii) Parkson in a position to generate new image, give new shopping feels and appeal to more customer to shopping.

(iii) In addition they can rent their shop tons to other suppliers or clients to earn profits.

(v) Parkson upgrade their operation system and relocation their business direction.

(i)It might comsume a lot capital for the renovation and building engineering in order to truly have a new building.

(ii)Is difficult to find a fresh place or location to create a fresh building

(iii)When there is a renovation, it could disturb the businesses which are going on.

(iv)When there is a renovation, A whole lot of space consuming will be required. Like the location to store the renovation stuffs and parking lots.

When time past, the customer might be started to get bored due to the unchangeable environment or shop in the Parkson. As a result, Parkson had began to change their image and the shopping environmental. Once we can see, most of the Parkson acquired reconstructs their building, painting their building etc. I believe that it is not enough to gratify the client needs. Parkson can try to create their own super market or hyper market instead of hiring their space to the Freezing Storage or Large. It can benefit them to gain more competitive benefits and have an improved shopping environment for the clients. It might include a whole lot of capital but we believe Parkson in a position to generate more profit in the future. By that time, Parkson no longer hinge to other ultra market or hyper market but it offers it own brand or name of the ultra market.

(iii)What capabilities should Parkson develop to ensure the success?

(i)High diversification to raise the profit.

(ii) Since Parkson have their own member card or member day, Parkson must have more attractive reward which can redeem by the client with the reward link point.

(iii) Parkson should draw in more investor to invest in to their share as well. With an enormous capital provide from the buyer, Parkson can form more their shopping more or maybe have an improved management.

(i)High diversification.

(ii)Differentiation strategy.

(iii)Focusing on their product line.

(i)Less risk with the top quality prices and increase retail consumer market.

(ii) Parkson in a position to gain more competitive advantages.

(iii) With a interesting or attractive praise, it can indirectly influence the customer to invest more on their products.

(i)Economic downturn.

(ii)Competitor strategy to counter the Parkson strategy.

(iii) If investment by the Parkson fail may cause the buyer occurs reduction.

(iv) The expense of the praise to member might include a huge capital.

Parkson was one of the famous retail center. In every office of the Parkson, we can find a whole lot of product sell by them and it has show Parkson product is highly varied. It really is one of your good technique to increase the revenue. But there's a weakness among them. Most of the product sell by them were more to the female department assessing with division. Parkson should apply differentiation strategy and make the diversification directly into more wide area. Emphasis more on the merchandise lines and make it balance well be one of the great solutions because of this matter.

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