UBMM3013 Strategic Management

Cheetah Holdings Berhad

INTRODUCTION

• Established in year 1979• Involved itself in diversified activities• Has three small business unit (SBU).

Cheetah Corporation (M) Sdn BhdCheetah Reality Sdn Bhd Cheetah Marketing Sdn Bhd

• Has casual wear under its own brand name• Facing internal and external challenges

Remote Environmental Analysis

• Inflation rates– Affecting apparel industry

• Export oriented growth– High demand from major trading partners such as USA, Singapore, Japan, Thailand, HK, Taiwan & Indonesia– Contributed 72.5% of M’sia’s total trade (2007 annual data)

1. Economic factor

Opportunity & threat for

apparel industry

2. Social factor• Age distribution– M’sia population stood at 28.3 mil. (2010)– Annual population growth rate is 2.0%– Age 15-64 is the highestamong other age range(67.3%)

• Income level– Monthly gross income per household increased from RM 2472 to RM3011– Monthly gross income per household has the average growth of 6.8% perannum.

Opportunity for apparel

industry

Industry Analysis• Strong Rivalry among the Existing Firms

Low product differentiation Similar products offered

Differentiation basis – quality and design

Marketing effort needed to differentiate the products

Numerous competitors Growing local brands

Padini, Miki, P&Co., Vinci, Seed, Rope, La Primavera and Monaco

International licensed brands

Nike, Reebok, Adidas

Online retailers

• High Threat of New Entrants

Low capital requirements Simple and insignificant scale factors and technology Retail outlet set up cost is relatively low

Easy access to the distribution channel Selling online Specialist store Store in shopping center ( increasing in number)

• Low Bargaining Power of Supplier Numerous suppliers

(Suppliers to the apparel industry) China, India, Vietnam and Indonesia

(Apparel industry as a supplier) Retail sector order in large quantities, switching cost is minimal

• High Bargaining Power of Buyers Low switching cost

Many close substitutes brands offering similar products High volume purchase

United State (RM 2.27 billion), United Kingdom (RM 435 million), Japan (RM 221 million), and Singapore (RM 218 million)

Marketing and Sales• Correct target of psychographic and demographic segment

• High accessibility in Malaysia

• Different brands to serve different markets

Operations• Achieved cost leadership in manufacturing its goods

• Low labor costs

• Outsource

Internal Analysis: Primary Activities

Internal Analysis: Supportive Activity

General Administration • Based on the mission: increase shareholders’ profitability.

• Expansion plan: signed a trademark licence agreement with

Woolworths plc of Britain

Human Resource Management• Mandatory Accreditation Program (MAP)

• Continuous Education Programme

• Employee Provident Fund

• Employees’ share option scheme (ESOS)

• Effective management team

Cheetah Holdings Berhad’s Strategic Group Map

•Targeting all age group •Both gender•Mid end consumers•Targeting all age group

•More focus on young's market

•Targeting young and kid market

•Cloth•Open new range

•Clothing for infants and toddlers

•Fashion accessories•eyewear

•Casual, sports, golf and leisure garment•Wide range of T-shirt

•Antioni•Sportwear and casual wear

•Botton•Causal wear

•B.U.M Equipment and Diesel•Apparel, eyewear, innerwear, footwear and carry wear

•485 outlets located in department stores•Own boutique•Will widen its retail network

•The garden and Pavilion

•3 retail outlet•150 consignment outlets

•550 to 600 shop in 2007

Conclusion• Economies of scale & cost leadership

• Huge retail network

• Strategic management of the organization

• Government needs to provide assistance

• Implement bold, new strategies