DRM 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

DRM 3173 STRATEGIC THEORY APPLICATION IN MANAGEMENT

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.

DRM 3173 STRATEGIC THEORY APPLICATION IN MANAGEMENT

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

DRM 3173 STRATEGIC THEORY APPLICATION IN MANAGEMENT

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, IXDAs focus would be in the core areas of product, quality, cost efficiency and distribution network. IXDA aims to have a strong product portfolio by

DRM 3173 STRATEGIC THEORY APPLICATION IN MANAGEMENT

introducing the right car, for the right market, at the right price and at the right time. This was reflected in the organisations newly introduced MPV.

Background of business Name of business Address No. of business Date of start business Modal Business types : FIZISAN Enterprise : Ampang, Kuala Lumpur : In process : 2014 : RM 13,000 : Sole Proprietorship Sdn. Bhd.

Partnership

Corporation

Enterprize

Cooperative

DRM 3173 STRATEGIC THEORY APPLICATION IN MANAGEMENT

MANAGEMENT STRATEGY 1. Organization structure IXDA SDN. BHD.

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 Idris Yunos

Mohd Huzaifi Faiq Alias

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.

DRM 3173 STRATEGIC THEORY APPLICATION IN MANAGEMENT

b) Marketing Manager / Quality 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.

DRM 3173 STRATEGIC THEORY APPLICATION IN MANAGEMENT

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 costefficient 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

DRM 3173 STRATEGIC THEORY APPLICATION IN MANAGEMENT

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 IXDAs 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. Its 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

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The ever-increasing cost of manufacturing and raw materials IXDAs, 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 IXDAs 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 an over-crowded operating environment

slowdown and

Despite the challenges that persistently impact the industry, which include the everincreasing 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 macroeconomic factors, higher interest rates and stricter lending practice.

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Policy

Staff and Vendors

IXDAs 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 firms workforce. If the management is serious in bringing the IXDAs 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 IXDAs 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. IXDAs realizes that strong customer orientation and competitively priced products are the foundation of the companys business. Performance targets have been developed to maintain market leadership, to continue to develop innovative products, to satisfy customers 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, IXDAs 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. IXDAs 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 directvendor networks.

SERVICE STRATEGY First of all, IXDAs will analyze its SWOT.

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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 industry Vulnerable to increasing material cost (steel, etc) history in automotive

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.

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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 worlds 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 Earths 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.

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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) ii) iii) iv) v) vi) vii) viii) As a rule, earlier is the best and time saved is time gained. The later you start, the more you require. The more urgent the need for a decision, the longer it takes. Rapid decision making produces rapid execution. Rapid action is simultaneous action. Delayed decision inevitably lose their positive quality. All the positive consequences of speed accrue to the early offensive. 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

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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.

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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

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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 dont 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.

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CONCLUSION IXDAs 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, IXDAs 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.