strategic management

1DRM 3173 STRATEGIC THEORY APPLICATION IN MANAGEMENT

INTRODUCTION

The automotive industry in Malaysia can be considered as one of the most important and

strategic industries in the manufacturing sector. Compared with other industries in the

manufacturing sector in Malaysia, the automotive industry is hoped to boost the industrialization

process so that Malaysia can be a developed nation by 2020.

The deregulation of the industry and introduction of strong affordable regional automotive

brands from Japan, Korea and China has made the industry to be more competitive. About 90 per

cent of the cars sold in Malaysia are produced by the local manufacturers, namely PROTON and

PERODUA. The automotive industry has played an important role in the development of the

manufacturing sector in Malaysia. With the successful implementation of the first National Car

Project, the industry has to widen its perspective to take on the challenges ahead by moving

towards an international level. Besides gearing up its operation to meet the anticipated growth in

the sector, the industry has to strengthen its competitiveness through greater emphasis on

product and market development. The industry also has to carve a niche in the export market

and foster closer linkage with the target destinations.

The prime reason that backed the growth in Malaysian auto market is higher orders from the

consumers wishing to buy new vehicles accompanied by the launch of latest makes across a

larger part of the segments. The good sales displayed by car models like PERODUA and

PROTON supported the overall vehicle sales. Also, the productive steps like the technological

enhancements introduced by the Malaysian automobile industry to assist the auto sector helped


the market to grow significantly over the years. In 2008, MAA President Datuk Aishah Ahmad

expected passenger vehicles to boost vehicle sales due to the backlog of orders to be supplied.

By looking to the cars demands in Malaysia automotive market,IXDA intend to join in this

automotive sector. The owner is involved in the Scheme Business Promotion Training 2006

organized by Government Employees Ministry of Entrepreneur and Cooperative Development

(MECD) and MARA for the purpose of increasing management skills in business. Through this

scheme, the owner was able to gain a lot experience and knowledge that is useful about the ins

and outs business in terms of financial management and management tool or machines involved

in the business of transport. Businesses will begin with loan from RM1,500,000 of Bank Negara

Malaysia and own capital of RM150, 000. Through this modal, the owner can start a business

with the purchase of fixed assets and needs to carry the business.


MISSION

Our general mission is to maintaining supply products in the highest quality, reasonable price

and customer satisfaction. Furthermore, the specific mission is to :

Always work hard to meet the target or goal of the organization

Always try something different like sound of theory, develop fresh ideas, and make the

most effective use of time

Always feel enjoy while working and encourage open communication

Strive constantly for a harmonious flow of work

Be ever mindful of the value of research

VISION

As a car manufacturer, there are nothing than becoming and remaining the

world's best motor manufacturer. So, the corporate management was stated

some vision to our organization.

Quality in all jobs

-it about the process to learn, think, analyze, evaluate and improve

Reliable products

- Our supply product must on time, with excellence and consistency

Better communication

-Must build up our communication skill like listen, ask and speak up


COMPANY BACKGROUND

IXDA Sdn. Bhd. are build to manufacture, assemble and sell motor vehicles and related

products, including accessories, spare parts and other components.

IXDA Sdn. Bhd. was publicly listed on the Kuala Lumpur Stock Exchange (KLSE) in

2010 and its shareholders include Khazanah Nasional Berhad, Petroliam Nasional Berhad,

Mitsubishi Corporation, Mitsubishi Motors Corporation, Employee Provident Fund Board

and other local and foreign investors.

IXDA Sdn. Bhd. had some major challenges in the recent years, with new competition

and the deregulation in the industry. IXDA has swung into the black in 2008 with a

cumulative net profit of RM202.9 million, compared with the loss of RM589.5 million it

registered in 2007. The national carmaker's revenue rose 14.6 per cent to RM5.63 billion

from RM4.91 billion a year earlier. One of the reason of this achievement is due to the

introduction of new models with higher profit margins, stronger sales volume, savings from

group-wide cost-reduction initiatives, income from the sale of rights for use of Intellectual

Property Rights relating to a vehicle platform (for the China market) as well as the R&D

grant.

For the year 2008, IXDA’s focus would be in the core areas of product, quality, cost

efficiency and distribution network. IXDA aims to have a strong product portfolio by

introducing “the right car, for the right market, at the right price and at the right time”. This

was reflected in the organisation’s newly introduced MPV.


Background of business

Name of business : FIZISAN Enterprise

Address : Ampang, Kuala Lumpur

No. of business : In process

Date of start business : 2014

Modal : RM 13,000

Business types :

Sole Proprietorship Sdn. Bhd.

Partnership Corporation

Enterprize Cooperative

MANAGEMENT STRATEGY

1. Organization structure

x


IXDA SDN. BHD.

a) Operations Manager

The operations manager is responsible for the all aspects of business management and in

addition also serves to adjust the management and operation business. Operations

manager went to work to make sure workers employed on a table file that has set or SOP.

b) Marketing Manager / Quality

Director

Mohamad Zulhilmi Zulkefli

Marketing Manager

Nur Ideatul Atiqah Md Sayed

Finance Manager

Syuhaidah Masturah Abdul Jalil

Reference of Employees

Nurul Farhana Hazimi

Nurnaddia Ishak

Mohd Huzaifi Faiq Alias

Mohd Idris Yunos


Its main role is the marketing manager increase business with search new marketing.

Quality products that are should always meet customers' taste.

c) Finance and Administration Manager

Administrative and financial aspects of a matter main which involves the purchase of

supplies and stock control operations. Preparing a budget and identify financial resources

and financial control of the business. Keep attendance and ordered employees and

operations in company.

d) Terms of Reference of Employees

Responsible for ensuring the cleanliness and with store security duties in wise, efficient

and creative high that a satisfactory level of quality that this business will thrive.

2. Management Strategy

Business operations and staff also very important in an effort to grow the business. By the

merchant, had arranged some management strategies such as: -

Provide guidance to employees in order to establish the employee responsible and

dedicated.

There is a good relationship between employer and employee and the spirit of

cooperation for the mutual benefit of produce work that is more efficient and

competitive developed.

Provide monetary bonuses to employees every year if a profit.

Caring for the welfare of workers, such as illness, death and family problems.


PROBLEM IDENTIFICATION

Business Model

It is hard to see IXDA ever making money consistently with the current business model that

it operates. At the heart of the car business is all about two basic things: cost structure and

product. General Motors failed because it messed up on both counts.

The lessons from GM are simple - make products that people want, and make them in a cost-

efficient way. Margins are generally so thin in the auto business that car factories really only

make money when they are running at or near full capacity


Given that the vehicle market here is worth half a million units annually, even if we roused

enough patriotic fervor to get every car buyer to choose a IXDA’s over any other brand, that

would still soak up only half of the total capacity.

Quality Control

IXDA's major problem is quality control. Complaints typically relate to failures in power

windows, doors and alarm systems. It’s not unusual (very common, to be precise) to hear public

complaint about the overall poor quality vehicles by IXDA over the years and indirectly

affecting the financial result of the company, when its sales dwindled tremendously and

continuously losing market share and subsequently, the profit margin eroded substantially too.

IXDA's head of body engineering once told a local newspaper that the benchmark for world

quality class cars is two defects per car but from our observation, world class quality car

manufacturers have been aiming for zero defects all this time. "DO IT RIGHT THE FIRST

TIME" – slowly but surely the learning curve must show positive result. Most successful

companies are.

Economic factors

Deregulated market

The ever-increasing cost of manufacturing and raw materials


IXDA’s, in February 2010 had made net profits for two quarters in a row due to lower operating

costs and increased sales.

However, it still booked a net loss of 32.92 million ringgit (10 million dollars) for the nine

months to December, although it was smaller than the 590.448 million ringgit loss a year earlier.

The IXDA’s chief said the car maker would proceed with expansion plans despite the soaring

cost of raw materials.

Shaken consumer confidence stemming from the threat of global economic slowdown and

an over-crowded operating environment

Despite the challenges that persistently impact the industry, which include the ever-

increasing cost of manufacturing and raw materials, shaken consumer confidence stemmed from

the threat of global economic slowdown as well as an over-crowded operating environment.

Globally, the automotive industry is going through a period of change, reflecting both the rapid

change of technology, increasing need to comply with continually more stringent regulatory

requirements and increasing liberalization of markets. Higher petrol prices and increased cost of

raw materials and manufacturing resulting in lower profit margins, also posed a challenge. In

addition, the declining trend for vehicle sales commenced in early 2006, because the macro-

economic factors, higher interest rates and stricter lending practice.


Policy

Staff and Vendors

IXDA’s Managing Director, Tan Sri Mohamad Zulhilmi Zulkefli , was once quoted

saying that 60 percent of defects in FIZISAN cars were due to poor quality components from

vendors, but admitted the rest of the blame fell on the firm’s workforce.

If the management is serious in bringing the IXDA’s back to a profitable entity, they

should run it like a proper conglomerate and not as a charity organization, which means

incompetent vendors and vendors which were being overlooked, contributing hiccups and

downturn of sales performances and do not adhere to the standard set must be removed and

replaced.

To retain a competitive edge in term of skills-set and technical know-how in this industry,

IXDA needs to ensure that their human capital is continuously nurtured with the right training

and tools. Consistent and relevant training is crucial to ensure that their employees have the

knowledge and tolls to help drive IXDA forward.

The Choice of Decision Faced by the Key Person

IXDA’s Managing Director, Tan Sri Mohamad Zulhilmi Zulkefli, has taken a turn for the

better. He has held the reins for some two years and has instituted a host of reforms, addressing

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many of the quality control issues, and vendor and marketing problems faced by IXDA in the

past.

IXDA’s realizes that strong customer orientation and competitively priced products are the

foundation of the company’s business. Performance targets have been developed to maintain

market leadership, to continue to develop innovative products, to satisfy customer’s needs better

and to enhance profitability.

Primary factors that contributed to the resurgence of the industry included the introduction of

new models at highly competitive and consumer-friendly prices; attractive and creative financing

schemes for car buyers as a result of aggressive sales campaigns; and a strong economic growth

of 5.75% in 2008 (FR 2009). To change the attitude and mindset of employees, best practices are

applicable via effective training. Upon realising the concept, IXDA’s provided training to all

employees to help them understand the company’ ethical principles and how those principles can

help them make decisions. Human capital development programmes become more structured

which helps to strengthen competitive edge. IXDA’s had developed extensive vendor

programmes to ensure they adhere to the expected quality which previously was overlooked.

This has led to reduction of 23% direct-vendors, and a more structured and manageable direct-

vendor networks.

SERVICE STRATEGY

First of all, IXDA’s will analyze its SWOT.


SWOT Analysis

Strengths

• Competitively priced products

• Extensive nationwide distribution

network

• Good corporate governance

• Influence of patriotism as Proton is

national car-maker

• Government support

Weaknesses

• Reputation of poor product

performance and functionality

• High cost to expand their operation

by advanced technology

• Short history in automotive

industry

• Vulnerable to increasing material

cost (steel, etc)

Opportunities

• High demand on the products

• Opportunity to grow their business

globally

• R&D Development

• Government support

• After-sales services

• Collaborations within automotive

industry

Threats

• Competitors - local & international

brands

• A lot of substitute products in

market

• Fast changing and advanced

engineering technology

• Economic downturn – decrease of

car sales

Between the strategies of the service as arranged by IXDA Sdn. Bhd. is as follows:

Producing a high quality service and deal with all the problems and customer complaints

as a guide to increasing the knowledge and expertise in this field.

Receiving the work on capability and capacity completed only able to maintain the

quality and ensure customers receive shipments clothing according to a preset schedule

and reasonable price.


MARKETING STRATEGY

1. Marshal Adequate Resources

IXDA Sdn. Bhd. must aware that operation can be sustained by invest adequate

resources. From that, we will make sure there is no excess stock because it will make a

full warehouse. It mean here, the good cycle must be on the exact time so the company

not expose to another management cost such us warehouse rent, transportation cost, water

and electricity supply cost.

Financial problem always become business problem. To avoid side spending on business,

ecoefficiency is the term used by some businesses to describe their goal with respect to

the environment. The World Business Council on Sustainable Development, an

association of some of the world’s largest corporations, defines ecoefficiency as “as

being achieved by the delivery of competitively priced goods and services that satisfy

human needs and bring quality of life, while progressively reducing ecological impacts

and resource intensity throughout the life cycle, to a level at least in line with the Earth’s

estimated carrying capacity”. This definition is impressive in its reference to human

needs and quality of life, which could be interpreted as a move away from the mere

acquisition of material goods for their own sake and an emphasis on their contribution to

meeting needs in the service of human well-being. This is also an impressive definition

from a scale perspective in its reference to carrying capacity. This implies recognition of

limits, the core of the scale perspective.


2. Make Your Time Ally

The key for success is to become rapidly effective and efficient. In order to make time

as ally, we have a few issues that are important. Such as:

i) As a rule, earlier is the best and time saved is time gained.

ii) The later you start, the more you require.

iii) The more urgent the need for a decision, the longer it takes.

iv) Rapid decision making produces rapid execution.

v) Rapid action is simultaneous action.

vi) Delayed decision inevitably lose their positive quality.

vii) All the positive consequences of speed accrue to the early offensive.

viii) The less you delay:

The less apt you are to be surprised

The less ready will be your competitor

The greater the probability your time of attack will be earlier than

expected

As a result, your opponent will be surprised and the consequences will accrue in your favor.

3. Everyone Must Profit From Victories

Strengthen human resources and material assets with each victory. In companies

funded through private equity that have not yet declared an Initial Public Offering,

employees sign up for below-market salaries in the hope of large payouts when the

company goes public. The opportunity to profit from victories also applies to internal


recognition and reward program. Think about providing opportunities for everyone to

win. Make the award cycle short and issues rewards immediately after the event. So,

everyone will gain profit from victories.

4. Know Your Craft

The key to being successful in the business is mastering your craft, being the

absolute best you can possibly be. Success is a few simple disciplines practiced everyday

repeatedly. There is three discipline to be mastered if you like to master your craft that is

dedication, desire, and diligence.

The definition of dedication is the quality of being dedicated or committed.

Devoting oneself, time, and/or efforts to a particular task or purpose. The definition of

desire is a strong feeling of wanting to have something or wishing for something to

happen and the definition of diligence is a careful and persistent work or effort.

Success is earned, not given people, no one is entitled to greatness, everyone in

the past, everyone in the now, and everyone in the future will have or has had to have an

outrageous amount of dedication in their specific field of expertise, an extraordinary

burning desire to win, and must diligently execute their detailed plans toward their idea

of success.

This is a few point you should focus mastering if you truly want to be the absolute best

services selling transport professional.


Communication(s) – As a sales professional, you need to be an effective communicator.

You need to be able to clearly articulate your message and you have to do so with passion

and style.

How can you master this skill?

By mastering the “Science of Communication”. Its about 55% of communication is

visual perception and body language, 38% is tone and inflection and only 7% is the actual

words that you use.

Video Record (or audio) yourself with prospects in the showroom or on the phone or in

the BDC. Record yourself engaging a prospect, working a deal, dealing with objections /

rebuttals etc. Then REVIEW the Video / Audio footage. Study it, be critical of what you

sound like, what your body language is, what your prospects sound like, what their body

language is. Try to identify loss opportunity, identify areas that you can improve and or

utilize a different strategy or approach in a particular situation.

Product Knowledge–

You should truly be a master of your product(s). Study your product. Test your

product and get familiar with them. Not just conceptually but literally know your

products inside an out.

Competition knowledge. Not just know about your own product. You also need to

know everything about your competitor. For example if you are a Ford sales


consultant and you sell a ton of Ford f-150s then you need to know everything about

the Chevy Silverado and why your f-150 is better than the Silverado.

Self Education –

Read as much as you can about everything related to your career as you can. If you

don’t like reading, then buy the audio CDs.

In general, the most admired companies have strong and stable leadership people who

know their business well. In marketing strategy, we must know what are our company

provide to others.


CONCLUSION

IXDA’s still has tremendous potential and capacity to perform better in offering its customers

products and services of premier quality.

The new concept of IXDA MPV that had been launched early this year , it give hope that the

enhanced and new brand images and recommendations will be able to help IXDA establish a

positive response in the consumers’ memory which will lead the company to achieve its vision .

This will eventually enhanced and strengthen it sources of brand equity in order to compete

ahead.

Based on its recent performance, IXDA’s has indeed working very hard to live up of

producing the right car at the right time, for the right market, at the right price.

Hopefully the business can be developed. IXDA Sdn. Bhd. really hope it is given the

opportunity to participate become part of the Community Trade and Industrial Community

(MPP) successful in the country.

strategic management

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