Hung Seng industries strategic plan analysis

This report consists of a strategic plan for the Hup Seng industries that deals with the manufacturing of biscuits, coffee mix among other foodstuffs.This report will cover factors affecting the strategic plan management by analyzing the internal and external environment. The following sections in the strategic analysis include;

• Mission, objectives, and goals
• Analysis of the macro-environment
• Industry analysis
• Capability analysis
• Proposed strategy
• Strategy evaluation and recommendation
  • Hup Seng company profile

Hup Seng is a manufacturing company that is located in Johor Bahru, Malaysia that was established early in 1958 as an investment company (ISLAM, 2018). So far, the company has attained broad recognition and distributes its products to a wide consumer coverage. Hup Seng has a wide market coverage including Africa, North America, Asia, Europe, and Oceania. In 2005, his company was awarded the quality excellence certificate, to verify its outstanding quality management skills that resulted in the production of quality products. After five years of its establishment, the company hadincreased its annual income by 21% indicating an outstanding performance and increase in market share(Mole,2018).

• Strategic challenge

Hung Seng company has been experiencing low sales turn over just after the 2015 peak that had resulted in a revenue increase of 28%. The demand for biscuits drastically dropped especially in the local markets of Sabah and Sarawak. According to a statement by the executive director Kerk Chian Tung, there was a drastic reduction of foreign workers in the majority of the shop lots, which resulted in the disruption of the group’s agents’ sales activities. During this period the net profit fell from RM24.03 million to RM20.60 million, an average reduction of 14.3 % of the gross revenue (Hing& Ping, 2003). This problem was further accelerated by the increased price of raw materials such as wheat flour, palm oil, and sugar that are essential for the production of biscuits.

• Vision, Mission, Goal, and Objectives

1.4 .1 Critical evaluation of Vision, Mission Statement

A vision statement refers to the plans and desires that the company strives to achieve within a specific period (Mole,2018). This statement works to motivate and inspire employees and the general team to work hard towards the fulfillment of the agreed vision.

Hung Seng company strives to achieve the following goals;

• To provide the best service to customers by producing quality products that meet customer demands.
• To create strong inter-relationships with partners and stakeholders to enhance business expansion through promotion.
• To maintain and encourage shareholders by enhancing the sustainable growth of the business.
• To provide the best working environment for its employees.
• To work together with the surrounding communities in the protection of the environment and sustainable uses of natural resources.

The group’s major objectives include the is to ensure that the products are of the preferred quality and can be freely shared anywhere in the world (Davidson, 2018). Hung Seng cream cracker has managed to achieve this major objective, through their effective slogan, “Quality is our promise”.

The mission statement outlines the company’s dedication to continuously improve the quality of the products, to meet the demands of the existing markets as well as expand to new territories through exposure.

1.4.2 Revised Vision Statement

Due to daily improvements that the company strives to achieve, the vision statement is frequently revised to include any elements of new changes. The statement states that “To be the leading biscuit manufacturing company, in terms of packaging, taste, and quality”.

• Environmental analysis
  • Macro environment analysis

This refers to the analysis of the external environmental factors that affect the stability of the Hung Seng company operation. These factors can be categorized into, social, ecological, economic, political and technological factors.

The table below outlines the factors and analysis of their corresponding effects on the future of the industry;

Factors	Analysis
Social-ecological	Hup Seng has the responsibility of caring for the community and ensuring there is a reduction of carbon footprints by minimizing gas and diesel usage during manufacturing. The company also supports the community through the provision of funds to the local schools and universities and this raises the company profile and increases shareholders’ participation and interest.
political	The Goods Sold Tax (GST) that was recently imposed following the 2014 budget, has drastically affected the production of goods and services in Malaysia(Mole,2018). The new taxation system has resulted in increased selling prices as a result of the increased cost of production.
economic	There is a slow growth of the economy according to the reports from the United Nations on matters about the World Economic Situation and prospects 2013. This shows that there will be a sluggish trend in the company exports in the coming years.
Technological	Hup Seng company utilizes highly advanced methods of technology for faster and efficient business operations. However, this technology is expensive and to cover these costs, the prices for company products have gone high in comparison to the competitor’s products. This is a negative sign that may affect brand loyalty and scare away potential customers.

• Industry analysis

Several forces determine the company’s competitive position in the market. Porter’s 5 Forcesmodel is used to analyze the company’s competitive advantage and allows the company to further enhance its strengths to counter challenges (Jaafar,Nuruddin & Bakar, 2018). These forces include;

• The bargaining power of suppliers

Hup Seng suppliers have a low bargaining power which is advantageous to the company as this ensures that the product delivered is reasonably priced.

• Threats of new market entrants

There is a high risk that this market will soon be flooded by other biscuit manufacturing industries that will result in the availability of cheap substitutes.

• Capability Analysis
  • Value chain analysis

This is a tool that is used to analyze the internal factors that are affecting the industry and establish sustainable strategies that will increase the competitive advantage of the firm (Toety, 2016). This is broadly divided into two categories; the primary activities and the support activities.

Primary activity	Description
Logistics (inbound and outbound)	Inbound logistic activities include the management of the supply chain and the selection of raw materials for production. Outbound logistics deals with activities such as store operation.
Marketing	Occasionally sampling is carried out to test the market for the products.

Support activity	Description
Infrastructure	Hup Seng has an interconnected relationship with the government and other relating firms that provide strong support financially.
Human resource management	Hup Seng ensures that the employees are qualified and trained to acquire all the necessary skills for successful production (Atan & Mahmood,2019).

• Proposed strategy

Based on the above findings, the favorable proposed strategy is the market penetration strategy ranging from local retailers to international markets. Since Hup Seng has already acquired a wide distribution channel,expansion into the global market is easy and can increase customers’ purchasing power. Besides the establishment of Malaysia External Trade Development (MARTRADE) has enhanced the gathering of market information through the creation of a network of corporate program participation.

• Strategy evaluation and recommendation

The above strategy is capturing more markets through the capitalized network both in the domestic and international industry. The expanded market will consequently raise the company profile and net worth. Today, Hup Seng has emerged as the leading company in the manufacturing of biscuits in Malaysia and other regions beyond.

References

Atan, J., & Mahmood, N. (2019). The role of transformational leadership style in enhancing    employees’ competency for organization performance. Management Science Letters,           9(13),   2191-2200.

Davidson, I. (2018). Biscuit, Cookie and Cracker Production: Process, Production and           Packaging Equipment. Academic Press.

Hing, L. K., & Ping, L. P. (2003). Malaysian Chinese business: who survived the crisis?.         Kyoto Review  of Southeast Asia, (3).

ISLAM, M. R. (2018). Production baked products of Well Food & Beverage Limited.

Jaafar, M., Nuruddin, A. R., & Bakar, S. P. S. A. (2018). Business Sustainability Model for     Malaysian Housing Developers. Springer Singapore.

Mole, S. S. (2018). Food Processing and Value Addition: Pathway to Agricultural       Sustainability. SCMS       Journal of Indian Management, 15(1), 86-95.