Research Paper On Who Are They?
Type of paper: Research Paper
Topic: Company, Strategy, Management, Singapore, Business, Marketing, Environment, Competition
Introduction to Management
The management of operations has its own significance and importance for an organization; in fact management of operation is the only thing through which organizations can attain serious effectiveness within their services (Chernev, 2012). Planning, Leading, Controlling and Organizing are some of the major elements of management that should have been considered while applying the contemporary evaluation concepts. It is extremely important for an organization to manage their well being and effectiveness with the help of powerful and intact strategies. It usually happens with the providence of effective services to the consumers of the company (Doyle & Stern, 2006).
In Strategic Management, there are numerous concepts that can be taken into account by the companies to analyze the power of their organization as well as its management to take powerful and timely decisions against it. Two of the major strategic management models are PESTLE analysis and Porter’s Five Forces Analysis. In this assignment, it is required to apply the strategic management concepts on a public listed company of Singapore. The company chosen for this analysis is NTUC FairPric, while both of the aforementioned strategic management techniques will be considered for the analysis. There is a prescribed structure that needed to be applied over this analysis.
NTUC FairPric Co-Operative is a supermarket chain located in Singapore. It is known as the largest supermarket chain of the country. The company has a Co-operative body of the National Trades Union Congress (NTUS). Currently, the group has more than 100 supermarkets across the country, with more than 50 outlets under their name.
ExxonMobil is the partner of NTUC FairPric to run several of their stations. The company was founded in the year 1973, and it is working under the Retail Industry of Singapore. Bobby Chin is the current Chairman of the company, and the company is growing magnificently.
What they Do?
NTUC FairPric Co-Operative is operating in the retail industry and runs a supermarket in which different products can be found. Some of the major products in which the company deals are alcoholic beverages, dairy, deli, general grocery, poultry, pharmacy, seafood, snacks and much more. Precisely, it can be said that the company is providing all household solutions under one roof. NTUC FairPric Co-Operative is the only superstore of Singapore that started a central distribution system to change the entire way of goods that were delivered to the store merely to enhance the level of convenience to the customers. NTUC FairPric has the accolade to build, own and operate its own fresh food center of distribution. The collaboration of NTUC FairPric with ExxonMobil will certainly give a positive node to the company in the near future, and the company launched number of operations like FairPrice Xpress, FairPrice Extra and others just to enhance their relationship with that of ExxonMobil.
External Environmental Analysis
External Environmental Analysis is all about analyzing the external factors that will have an effective over the productivity and the level of efficacy of an organization (Fifield, Gilligan, Gilligan, Wilson & Fifield, 2000). There is an incredible tool of strategic management that can be used exclusively for the same function, known as PESTLE Analysis. It is basically an analysis of Political, Economical, Social, and Technological, legal and Environmental analysis of a company or a country to get an idea about their future aspects and possession in the industry.
Singapore with an official name of Republic of Singapore is a Sovereign State and Island based country located in Southern Asia. The country lies off the Southern tip of the Malay Peninsula north of the Equator. Singapore is a parliamentary republic with a perfect and democratic political system. Singapore comes on the 4th position on the Democracy Indexes of the world, showing the real significance of the country in terms of gaining advantages through fair elections.
NTUC FairPric has been operating in the Singaporean region from the last four decades and enjoying their existence in the country. The political situation of the country is sound with very low crime rate and a high health development index (HDI). The government of the country is very helpful and in the favor to harmonize the development of the companies, found interactive to work in the region.
Singapore has now emerged as one of the major financial and commercial hubs of the world with an existence of fourth biggest financial center in the region along with one of the five busiest ports of the world. Singaporean economy termed as a globalized and diversified economy that depends heavily over trade and manufacturing, which accounts for around 26% of the total Gross Domestic Product (GDP) of the country. Singapore is known as one of the largest economies of the Asian region, with high GDP and GDP per Capita Income. In the year 2013, the country reported net GDP of US$ 297.941 billion with per capita income of US$ 55,182 in the same year, showing high amount of wealth of the citizens of the country.
NTUC FairPric is having a great time while working in such a region, wherein the purchasing power parity (PPP) of the individuals is on such a higher rank. NTUC FairPric is a financially sound company of the Singaporean region, as the country provides all sort of confidence to them as far as doing business in the region included very low prevailing interest rate which is only 0.2%. Both private and public sector can get sufficient advantages from this lowest amount of interest rate.
Singapore is a multi ethnic country of the world in which people belongs to different races, mindsets and religion lives there. Buddhism, Christianity and Muslim are the three dominating religions found in the country with a major proportion of 34%, 18% and 14% respectively. Every person has the right to raise their voice against any injustice or biasness.
The government of Singapore is very dedicating for their people, and doesn’t allow any company to make fun of the religion of any community. NTUC FairPric is a supermarket, therefore there is no association of making fun of any race or religion, however the management of the company has to aware with the fact that all of such things, brands and products that can harm the ethical beliefs of any religious community should be banned from the market. It is important to initiate this step to maintain the current momentum of political stability within the country.
The current era has been termed as the era of technological efficiency, and organizations are now operating with high amount of technological efficiency (Fifield, Gilligan, Gilligan, Wilson & Fifield, 2000). Singapore, is one the largest economies of the world which has a remarkable technological efficiency. The country has a great technological structure in the world which has been appreciating largely in different marketplace.
NTUC FairPric, though don’t required any sort of sophisticated technological efficiency in their operations, however they can use the technological efficiency to have a record of their inventory and their core operations accordingly.
The legal situation of Singapore is perfect and very strict. Organizations have to comply with all the legal requirements and standards made by the Singaporean Government. The current corporate tax rate of Singapore is comparatively very lower than that of other countries of the world, seems like a tax and investment heaven for the investors. The current corporate tax rate of Singapore is 17%.
NTUC FairPric is enjoying their operations with the country, and the company is complying effectively with all the legal situation of the country prescribed by the Government.
Environmental Situations are very important for the organizations. Singapore is one of those countries of the world that promote the Green Environment and against all the carbon CO2 Emission and Toxics. NTUC FairPric is required to have a proper recycling system of the packaging they used to contribute their part in providing a healthy and green environment.
Micro Environment Analysis
Micro Environment Analysis has been referred as the analysis that usually associated with the internal well being of an organization. The tool which is used for the same analysis is Porter’s Five Forces Analysis. Porter’s Five Forces Analysis is yet another important strategic management tool that used to assess the level of competitiveness of a company from five different angles (McLoughlin & Aaker, 2010).
Rivalry among the Competitors (high)
Retail Market here in the region of Singapore is a mature industry, in which number of companies have already maintained their positions. There are numerous supermarkets which are directly competing with NTUC FairPric to give them a tough job. Some of the close competitors of the company are Giant Singapore, Cold Storage and Sheng Siong. NTUC FairPric has to become competitive in terms of quality and pricing from these companies to have a high market share in the industry.
Bargaining Power of Buyers (high)
As mentioned above, there are number of identical companies are currently operating in the region which are creating fierce competition for NTUC FairPric along with providing extensive opportunities to the buyers to buy their products from the companies. Due to the existence of high amount of companies in the retail market, the bargaining power of the buyers are increasing heavily, because consumers have number of cost efficient options to do business with them.
Bargaining Power of Suppliers (Low)
This particular element lies in the favor of NTUC FairPric, as there are number of suppliers already working in the region that can provide cost efficient products and solutions to the companies. NTUC FairPric will be getting products in lower price in the future as well, that will positively impact over the bottom line of the company in an effective manner.
Threats of Substitute Products (Medium)
The products which NTUC FairPric is selling to their consumers can be found easily from other stores, but NTUC FairPric is providing such a shopping solutions to the individuals from which they can have a perfect shopping experience under one roof, therefore the power of substitute products are medium
Threats of New Entrants (High)
Barriers to Entry: The Barriers to Entry in the retailing industry is not high, any person with relative amount of investment can get the license to enter in the industry to have a competition with NTUC FairPric
Barriers to Exit: The barriers to exit from the industry is high, which is again not in the favor of NTUC FairPric
Conclusion & Recommendations
Apart from the financial functions, there are some non financial functions that will become essential and effective for the organizations from different slants. Strategic well being usually focus on Macro and Micro Environment analysis through the strategic management tools that can deliver future effectiveness for the companies.
This particular analysis is all about analyzing an existing company of Singapore with the help of some dominating strategic management concepts. PESTLE analysis and Porter’s Five Forces Analysis models of strategic marketing management have been considered to complete this particular analysis. This entire analysis reveals that the financial and strategic position of NTUC FairPric is perfect, however there are two major problems that have been highlighted within the operations of the company that may impact over the market position of the company, and it should be overcome as soon as possible through powerful and effective strategies or recommendations.
Firstly, there is a problem with high competition. The management of the company is recommended to revise their current pricing strategy. The current pricing strategy of the company is COMPETITIVE, in which the company is charging the same price as charging by their competitors. However, this particular technique will not work for the company anymore, and it is essential for NTUC FairPric to have a pricing strategy of COST PLUS, in which the company is obliged to charge a little more than their original cost. Apart from this, it is also recommended to the company to give quality base products to their customers in order to have a definite edge over their competitors.
Secondly, there is a need to revise the current promotional strategy of the company. The company has now the option to use Social Media Marketing as well. It is recommended to the company to completely eradicate anything that may hurt the religious and ethical belief of the individuals. With the help of this particular strategy, the company will become able to get an upper hand from their competitors.
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Doyle, P., & Stern, P. (2006). Marketing management and strategy. Harlow, England: Financial Times Prentice Hall.
Fifield, P., Gilligan, C., Gilligan, C., Wilson, R., & Fifield, P. (2000). Strategic marketing management. Oxford: Butterworth-Heinemann.
McLoughlin, D., & Aaker, D. (2010). Strategic market management. Hoboken, N.J.: Wiley.
Wilson, R., & Gilligan, C. (2005). Strategic marketing management. Amsterdam: Elsevier/Butterworth-Heinemann.