Pisces Group of Singapore

Presentation Flow

Evolution of Retail

Case Introduction

Strategy Approach

Strategic alternatives

Conclusion

Shandy Market Place

Convenient Stores

Discount Stores

Departmental stores

Evolution of Retail

Small shop in Night market

1970Single

retail store in a shopping

district

1986

Diversified into manufacturing

1989 Established 3 more

stores,deal with Happy

department store

1992

Retail chain with total 16 stores,

75% stake in an optical firm

1993

First large Discount

Store, PMart,

1994

S$ 50billion

Introduction to Case

Approach• Business • Competitive

Strategic intent• Vision • Mission • Objectives • Goals

Strategic Alternatives• Stability • Growth/Expansion • Retrenchment • Combination

Strategy

Rivalry

Customers

Suppliers

New Entrants

Substitutes

Cost leadership strategy can be analysed with the help of Porter’s 5 forces model

• Only importer of low cost products from China• No price competitor

• Willing to buy low end and cheap products

• Suppliers from less developed countries manufacturing low cost garments

• Power to bargain stays with Pisces

• Tough market conditions repelled new entrants • Pisces had early mover advantage and was a price leader

• Product prices were itself substitutes for high end products

Business Approach

Strategy Approach

Expansion or Growth Strategy

Integrated

Horizontal

Verti

cal

Diversified

Concentric

Conglomerate

Extreme Growth

Merger&Acquisition

Strategy Alternative

Announced an investment of 7.6million dollars in a joint venture with a Singapore firm to set up

a transporting and chartering business

Integrated

Vertical (Backward) integration

In 1993: by the end of 93 opened 16 stores

Horizontal

• 1993: acquired 75% stake in Kingdom corp. that traded optical frames and glasses(acquisition)

• Sept 1994: 40% in circuit plus and opened new subsidiary as PHT • By the end of the year 1994, expanded its real estate efforts in making

following three hotel investments in China: -S$4.6 million in Zhejiang Province -S$4.9 million to purchase a hotel on Hainan Island from Five Rings; and -S$8 million to purchase 54 per cent of a 400-room hotel on Qingdao Island.

Diversified

Concentric

Conglomerate

• 1992: Saudi Arabia’s Happy dept. store allowed them to display their goods worth $3m

• 1993: acquired 75% stake in Kingdom corp. that traded optical frames and glasses(acquisition)

• dec 1993: made a joint venture, Q in traces Resource for bilateral trading & investment

• May 1994: second joint venture with 5 ring to be run by Quintraco.

• Aug 1994: Pisces land(subsidiary of Pisces) joint venture with china based Bei Hai port authority to build & operate for 50 years as industrial park in Guangxi province.

Extreme Growth

Mergers & Acquisitions

Retrenchment

Divestment

• Swapped 30% shares Pisces then signed a preliminary agreement for its third technology acquisition, for 30 per cent of Hongguan Technologies through a share swap

• The links between Pisces and TTI were further strengthened by TTI’s subsequent announcement that it planned to sell to Pisces 10 per cent of its subsidiary garment company, Lu Thai Textiles. The intention was to receive for a stock listing in China

Why the Growth Strategy?With

developing Singapore night

markets ceased to exist by late 70s.

Need to find an alternative

business, and their relative success in

selling clothes

Capable of higher economies of scale

Great opportunities in

Convenient stores High Customer

Demand (only retailers)

Great margins

Poor economic situation in the home

country

Conclusion

• Garment being the core competency helped them compensate when pisces group or any other subsidiary faced losses due to economic situations in homeland. This helped them Grow without any concern.

• Pisces had to be very picky about the businesses they acquire which was hard for them so they conducted market feedback to analyse which firms should they acquire or fund

• Pisces also indicated that it intended to continue its aggressive expansion and faced relatively few constraints. Funding its acquisitions was not a problem, as internal sources, other shareholders, venture capital companies and investors were ‘more than willing’ to fund projects. Instead, the problem was to find suitable acquisitions.

• With the uniqueness in its competitive advantages, both financially well stable and the ability to manufacturing low cost product to meet its customer needs, Pisces is able to implement its business level strategies to custom to its core competencies to generate above average returns.

• The successfully implementation of business strategies include the understanding of their core competencies and will help to sustain their high competitive ranking in the market.

Thank You!

Presentation By:Vitthal Dhingra