ACKNOWLEDGEMENT

This assignment would not have been possible without the useful information from
Madam Norelissa Idayu binti Zainal Abidin, founder of Sahi Elements Resources. We are
especially indebted to Dr. Nooriha binti Abdullah, lecturer for Strategic Management at UiTM
Puncak Alam Campus for all her guidance, knowledge and support in completing this
assignment. As our lecturer and mentor, she has taught us more than we could ever give her
credit for here. Many people, especially our classmates and team members ourselves (Abdul
Hakim Fathurrahman bin Rohaizad, Muhammad Danial Hakim bin Ahmad Buhairi, Haneem
binti Muhamad Anuar, Nur Najihah binti Zainal Abidin and Shazana Mahfuza binti Semail)
have made valuable comment suggestions on this proposal which gave us an inspiration to
improve our assignment. Finally, an honourable mention goes to our families for their
understandings and supports on us in completing this project. Without helps of the particular
person mentioned above, we would face many difficulties while doing this assignment.

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 INTRODUCTION

Sahi Elements Resources is a small business under beauty and health industry. Sahi
Elements Resources is basically selling supplements that focus on fixing the health from the
inside and provides beauty at the outside. Sahi Elements Resources had come out with two
products that are Sahi Sarang Burung dan Aloe Vera and Krasa where both of these
supplement are in chewable tablet and powder milk drinks respectively.

Sahi Elements Resources had started operating since December 2016 with three
founders. At first, Sahi Elements Resources is known as Pastel Mind Cube where it first
product was Ederra. Ederra is also a beauty and health supplement where the main ingredient
of the product is seaweed. Ederra is no longer in the market since one of the founder had
withdrawn from the company because of certain reasons. The idea of Ederra was come from
the withdrawn founder. The operation of Ederra had stopped since that and no longer can be
found anywhere in the beauty and health market.

The two remaining founders that are Norelissa Idayu binti Zainal Abidin and Noor Aimi
Yusuf changed their company name from Pastel Mind Cube into Sahi Elements Resources
where their first product together is Sahi Sarang Burung dan Aloe Vera. These two founders
met each other through their friends recommendation. The official launching of the company

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had been made on February 2017 with two products, Sahi Sarang Burung dan Aloe Vera and
Krasa.

Sahi Elements Resources headquarter can be found in Ipoh, Perak. Meanwhile, the
factory is at Negeri Sembilan. So far, this company only have one staff at headquarter named
Mira where she is in charge for postage and collecting customers data based. Both founders
are in charge in marketing the products. Noor Aimi Yusuf personally in charge in organizing
production at the company such as make sure all ingredients for the production of their
products are correct and enough.

The main ingredients of Sahi Sarang Burung dan Aloe Vera are bird nest and aloe
vera. Sahi Sarang Burung dan Aloe Vera comes in chewable tablet candy form. Bird nest is
popular with its benefits to the humans health but pricy. Sahi Elements Resources provide
healthy supplement with zero collagen in affordable price. Mostly nowadays healthy and
beauty supplement contained collagen where collagen is not good if been taken too much.
Collagen had side effects such as dry skin and loss hair. Collagen been added to most of
beauty supplement because of its effect in brightening the skin and reducing wrinkles in a
short period of time. Taking too much collagen will cause problems from the inside. The
founders want their customers to be healthy and pretty started for the inside in a healthy way.
Some of the benefits of Sahi Sarang Burung dan Aloe Vera are it can reduce scars because
of acne, strengthen the root of hair to prevent hair loss and natural energy booster. When the
founders came out with the idea of Sahi Sarang Burung dan Aloe Vera, their target market is
women from the range age of thirteen years old and above. After a while, founders realize it
is suitable also for men since the benefits of taking Sahi Sarang Burung dan Aloe Vera did not
specifically only for women.

As for Krasa, it is a supplement in powder based milk. It is made from milk goat and
other healthy ingredients such as dates, honey, bird nest, aloe vera, olive leaves, habatus
sauda and tomato. All these ingredients are well known of its benefits. Some of the benefits
of Krasa are it helps to moisturize the skin, strengthen the bones and teeth, help to enrich the
produce of milk for breast feeding and for a better women menstrual. Krasa is suitable for
women.

Sahi Elements Resources did not have fix workers at their head quarter but they open
jobs for promoting their products at Instagram and Facebook where Instagram and Facebook
are the only social media for them to meet their customers. This company usually made
promotion for their products during festival and the end of months. The founders right now are
trying to come out with another product using bird nest and aloe vera as their main ingredient.

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 Their target market is suitable for all races. For example, bird nest is famous among
Chinese. Mostly Chinese consume bird nest for their health. Sahi Sarang Burung dan Aloe
Vera and Krasa are suitable for Chinese desire to be healthy with bird nest benefits. As for
Indian, generally Indian did not consume any meat especially cow meat. It is against their
religion and believes. Sahi Elements Resources products contain no animals so it is suitable
for Indian if they want to consume this companys products as their health supplement. As for
Malay where mostly Malay are Muslim, whole ingredients used in Sahi Sarang Burung dan
Aloe Vera and Krasa are Sunnah food as thought by Islam such as habatus sauda, goat milk
and dates. These ingredients are not just Sunnah but also healthy to the body.

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 COMPANYS VISION AND MISSION

VISION

Sahi Elements Resources vision is to help people to be healthy and beautiful starting from
inside with zero collagen.

MISSION

Sahi Elements Resources mission is to be peoples number one choice in taking additional
supplement in a healthy ways not just among Malaysians but also worldwide. We seek to keep
on providing healthy supplements using the best ingredients with affordable price. We will lead
our company in the application of appropriate and advance technology. We aim to sell our
products in fewer margins with affordable price to make sure customers will keep on buying
our product in order to maintain our sales and profit.

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 COMPANYS OBJECTIVES

Long term objectives

Sahi Elements Resources long term objectives are the founders want people out there at least
had tried their products and talk about their products and their products not only can be found
at Malaysia but also worldwide where so far their products, Sahi Sarang Burung dan Aloe Vera
and Krasa already available at Brunei and Singapore.

Short term objectives

Sahi Elements Resources short term objective is their products users gained the benefits of
taking their products. They want all Malaysian at least had tried their products and talk about
it although they did not continue taking their products as their everyday supplement.

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 INTERNAL FACTORS OF THE COMPANY

The Internal Factor Evaluation IFE Matrix is a summary to the internal strategic-management
audit. This strategy-formulation tool summarizes and evaluate the major strength and
weaknesses in functional areas of business which is Sahi Elements Resources. It is also
provide a basis for identifying and evaluating relationship among those areas. An intuitive
judgment had being done to Sahi Elements Resources. Those elements being identified
during the interview with one of the founder of the company and she also mentioned how she
and her team overcome any weaknesses and what are their major strength. Five strength and
five weaknesses had being identified and discussed with the founder.

STRENGTHS

1. Increase the company revenue by rewarding the Sahi products agent.

Sahi Elements Resources was a profitable organization where it tries to maximize their profit
every year and also to reduce the production cost. The founder was an amazing woman that
not only focus on the profit and cost but also the motivation on the agent who become their
important distribution channel. This is because to ensure the product become available to the
consumer and to avoid consumer to switch product. The rewards that the company offer are
in the form of cash and other non-financial form. This reward was drive the motivation for an
agent to ensure that they achieve their target sales. By doing this, the performance of the
agent increasing and the sales of the company also increasing. Hence, as the company sales
increase the revenue. It was a worth investment for the company to give reward to the agent.

2. Inventory turnover increase every 4 months.

As the sales of the company increasing, the company must ensure that the product is
available. The company was as mentioned by the founder will order their product with the
manufacture if the quantity of the product are 150 boxes. This means that the company already

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had it reorder point. Many factors that will affect the availability of the product for example the
manufacture delay in production, and other transportation delay. The 150 boxes of the product
is to ensure that the product is always available for any consumer to purchase.

3. Increase in popularity by conducting marketing review from public figure.

Nowadays, people are depending on other peoples review on anything though social media
on the internet. This was one of the latest trend of the consumer behaviour where they gain
any knowledge about the product through the internet. By using the popularity of an actor or
a singer to announce the benefit of using their product, it is one of their strategy to market their
product. This public figure had their own followers in the social media as the company was
using a social media as their medium to become closer with the consumer. The public figures
followers will depend with the review of the product by them. Hence, this how they capitalize
the popularity of the actor or the singer. The public figure that this company used are usually
Elfira Loy or famous blogger such as Sharifah Rose.

4. Conduct promotions to loyal customers.

The company want to encourage their customer spend more to minimum amount of RM180.
They encourage their customer by giving a lot of benefits and promotional price if they
purchase more than RM180. The benefit is more to a customer who spend more than RM180
but if the customer by just purchasing two item they will get a free postage. The benefit for
customer who purchase more than RM180 are porch bag, free postage and also special
discount. By this, the customer will feel the product that they spending was affordable and
reasonable.

5. Sell cheaper price to the agent and achieve companys objective.

The existing of Sahi Elements Resource not only profitable but also give jobs for people who
want to start a business with small capital. They are giving cheaper price to the agents

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compare to the market price. They are trying to ensure the distribution channel of the product
are at all areas around Malaysia and also Brunei and Singapore. The encouragement was to
make sure the company are making their profit and archived their objective that is to make
sure every person had consume their product.

WEAKNESSES

1. The distance between both of the founders.

The founder of the Sahi Elements Resource did mentioned to us about her difficulties on
managing the company with her partner because of her distance with the HQ. For now, the
head office was manage by her partner. The problem with the distance was the interaction in
managing the company as a team. For her, it is important to have a face-to-face interaction
with the partner and the staff to ensure the successful of the company to achieve its objective.
In order to overcome the problem, she used an indication to use the technological method
whereby she used a live streaming video meeting will all the staff and also other fast delivering
mechanism such as email, text and phone calls. Those mechanism not only successful but
also reduce the cost an overhead cost.

2. The space in the HQ office is not fully utilized.

As for a company to be more efficient, the space is important. All the areas should be utilized.
As the founder mention the HQ office spaced are not occupied yet. The only equipment that
the HQ office had was only the basic things such as the computer, printer and working desk.
There still an empty rooms that are useful to company to become more efficient. She also
mentioned that the space was on being used for now, but in future the empty spaces in the
office will be fill up by all the functional department to ensure the process of the company will
run smoothly with a standard operating procedure.

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3. The method of data based collecting are not up-to-date.

The technique used for the data collecting the information of the company was a format excel
program. This was the basic and the hard way of collecting the data. For a company who
wants to become competent to their others competitors, that should invest some amount of
money in the development of the latest technology. There was a plan on the development of
the latest data collecting which is by using Store Hub. The Store Hub will provide more
efficient, fast and organized data based for the company. Thats why the company willingly to
spend some amount of money for the application.

4. The staff at customer service department are not well performed.

The founder did mention about her staff that did not perform well back in the previous years.
The staff performance was keep on decreasing. Her job description should be involving in
broadcasting the latest news of the company to the customer, reply all the question asked
from the customer, an also fast respond to any situation that involve directly to the customer.
The staff probably lack of motivation and determination hence the staff was terminated for the
organization.

5. The number of non-active part time agent are high.

Last year, the company did a screening to the all agents including the part time agents. This
screening is to ensure all the agents are performing their work. During the screening, the
company was able to identify the several of the non-active agents which most of it was part
time agents. Hence, the company was giving a chance to the all non-active agent to be more
active and productive but there are still no improvement from the non-active agents. The final
solution was terminating the agents.

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Table 1.0 Internal Factor Evaluation Matrix

Key Internal Factor Weight Rating Weighted score

Strengths

No

1. Increase the company revenue by

rewarding the Sahi products agent.
0.10 4 0.40

2. Inventory turnover increase every 4 0.07 3 0.21

months.
3. Increase in popularity by conducting 0.05 3 0.15
marketing review from public figure.
4. Conduct promotions to loyal customers. 0.23 4 0.92

5. Sell cheaper price to the agent and 0.08 3 0.24

achieve companys objective.

Weaknesses

1. The distance between both of the 0.12 2 0.24

founders.
2. The space in the HQ office is not fully 0.02 1 0.02
utilized.
3. The method of data based collecting are 0.10 1 0.10
not up-to-date.
4. The staff at customer service department
are not well performed.
0.15 2 0.30

5. The number of non-active part time 0.08 1 0.16

agent are high.

Total 1.00 2.74

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 EXTERNAL FACTORS OF THE COMPANY

The External Factor Evaluation EFE Matrix is a summary to the external strategic-
management audit. This strategy-formulation tool summarizes and evaluate the major
opportunities and threats in functional areas of business which is Sahi Elements Resources.
Those elements being identified during the interview with one of the founder of the company
and how to overcome the threats and what are their major opportunity. Five opportunities and
threats had being identified and discussed as explained below.

Opportunities

Opportunities are useful approach to look at companys strengths and whether these
open up any opportunities. Alternatively, look at the company weaknesses also could open up
opportunities by eliminating the weaknesses of Sahi Elements Resources Company.
Opportunities can be in technology, markets, social, cultural, demographic and others.
Examples are changes in social patterns, population profiles, lifestyle changes, and etc.

The competitive advantage of this company that the other competitors do not have
chewing products. This will attract more customers because customers always like to buy a
product that are easy to consume. Buyers a more preferred to consume a healthy life product
because they want to take care of their body and health.

Usually customer will have a social media. The company had to use this media and
post about their product and promotion to the customers. The promotion also will be conducted
in every early of month since the demand on that particular period is high. This is because,
the early of the month is the period which they have gotten their salary. From here also we
can see the improvement of customers loyalty since the promotion and the period of
promotion that has been taken by this company compatible with the condition of the
customers. Another opportunity of this company is Sahi Elements Resources had conducted
promotions on worldwide celebration days such Mothers Day, Nurses Day and others. This
will increase the amount of people consume Sahi product since they will well appreciated.

Price competition can be an opportunities because it will protect the company market
share against competitors by offering lower prices, develop a strategy based on the company
cost or product strengths. Sahi Elements Resources may has cost advantages against other

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competitors and the company use that ability to reduce the companys own prices without
damaging profit levels. The company use outsourcing manufacturing to a lower cost producer
to reduce the cost base. The company also overcome price challenges by offering customers
products that represent added value. For example, the company will give a free postage if the
buyers or customers buy two or more products from Sahi Elements Resources such as Sahi
Sarang Burung dan Aloe Vera or Krasa.

Weaknesses in Sahi Elements Resources company product and service portfolio,

skills, distributions channel network or supply chain can increase the vulnerability and make it
difficult to respond to external threats. When the weakness has been overcome it may lead to
the opportunities. For example, a public figure do not want to be their ambassador to this
product again because nowadays they tend to make their own product and the cost for hiring
them is high. Because of this situation, Sahi Elements Resources want to collaborate with the
orphanage and others.

Threats

Threats can take a number of forms, including the emergence of new competitors or
low-cost competitors, new products that offer better performance, slow market growth, barriers
to market entry, changing customer needs or regulatory changes that increase cost or make
it difficult to comply. Besides, Sahi Elements Resources Company may also face the impact
of changes in the political, economic, social or technological environment market trends,
outside funding, customer demographics, suppliers, and other factors. External factors are
typically outside of company control. Anticipating these factors early can help company to plan
ahead and stay flexible when they occur. Part of the analysis is to examine how external
opportunities and threats relate to internal strengths and weaknesses in order to determine
whether an objective is even attainable and create a strategy for moving forward.

The pace of change in the economy means that Sahi Elements Resources Company
must continuously monitor threats that will occur in the business and be prepared to adjust the
current strategy as new threats emerge. Use the Internet to monitor the activities of existing
and emerging competitors. Price comparison sites will help to know the lowest and the highest
price in the market and the company can set the price that will help to gain profit and attract
customers, consumers or buyers to come to buy for their products. Besides the economy
changes can be look at the income of citizens in Malaysia because the disposable income will

13
influence the buyers to buy the company products. For example, economy recession in
Malaysia.

Sahi Elements Resources has try to get a public figure to be their ambassador of their
product but they decline because nowadays the public figure like to make their own products.
Plus, some of the public figure may imitate or sell the similar products as Sahi product which
may be one of the threats of this company. This is because, their product may be easily getting
popular among consumers since they are already a public figure.

Other than that, there a some customers that are allergic to the product because of the
material that a being used to make the product such as lychee. The side effects are not come
directly from Sahi product since some of the ingredients are not compatible with the
consumers antibody themselves. Plus, there are also consumers experiencing healing
process by consume this product which result in acne of their skin. This will cause one of the
threat of this company since there are several people that experiencing indirect side effects
from this product.

Price of oil increases due to the government has taken back the subsidy. This will affect
the company transportation cost to transport the goods from the factory that the Sahi Elements
Resources has ordered. There are also threat from the government since they has tighten the
procedures of this type of product because they want to know what the material that being
use. There are some company that use illegal material such as mercury to make their products
which may affect customers perspectives to buy beauty and health products. Form this case
that is why the Ministry of Health in the help of the government tighten the procedures.

If Sahi Elements Resources company face threats from new products that offer
superior performance to your existing range, incorporate new product development plans in
your long-term strategy. You can overcome the threat in the short term through a strategy of
sourcing or licensing new products from business partners.

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Actions already taken to take advantages of opportunities and overcome threats

Sahi Elements Resources Company make use of external factor of technology as their
marketing effort. Currently the company actively engaging with social media such as
Facebook, Instagram, and Twitter to spread the information on company and also any
promotion that company had made. Besides that, company used these medium of social
media to post some of customer positive feedback about the product that they had bought
from the company. This helps company in gaining confident from potential customer about the
product that company offer. Thus, it will increase the sales of the company and contribute to
the companys profit.

Sahi Elements Resources also provides special promotion and discount of selected
items to their customer. These strategies works because people prefer to buying things on
sale, thus discount will serve as a ploy to attract more customer to buy the product. In addition,
it is also part of competitive advantage to cater the threats of increase in the rivalry of the same
industry. The other competitive advantages will be the product itself because Sahi Elements
Resources is the first one who has a chewing tablet for the bird nest product.

New competitors with a strong market offering can threaten to reduce Sahi Elements
Resources market share. Protect customer base by developing a customers loyalty strategy
or increasing the barriers to entry for competitors. In the company 50% of the buyers are
repeat purchase for every month of the product. This will be good advantages to the company.
Introduce a customer loyalty program that rewards customers for maintaining or increasing
levels of business. Increase barriers to entry by forming strategic alliances with suppliers of
essential components or raw materials to restrict access for competitors.

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Table 2.0 External Factor Evaluation Matrix

Key Internal Factor Weight Rating Weighted score

Strengths

No

1. Competitors dont have chewing 0.08 3 0.24

products.

2. High follower in social media. 0.20 4 0.80

3. Improvement in customer loyalty.. 0.13 3 0.39

4. Consumer demand every early of the 0.06 2 0.12

month.

5. Collaboration with orphanage and 0.05 1 0.05

others.

Weaknesses

1. Imitate products by the public figure. 0.14 2 0.28

2. Some customers are allergic to this 0.10 4 0.40

product.

3. Transportation cost increases due to 0.08 3 0.24

price of oil.

4. Income in Malaysia citizens decrease 0.07 3 0.21

due to economy recession.

5. Government has tightened the 0.09 2 0.18

procedures of chewing and tablet
goods.

Total 1.00 2.51

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 SWOT MATRIX

STRENGTHS WEAKNESSES

1. Increase the company 1. The distance between both of

revenue by rewarding the the founders.
Sahi product agent.
2. The space in the HQ office is not
2. Inventory turnover increase fully utilized.
every 4 months.
3. The method of data based
3. Increase in popularity by collecting are not up-to-date.
conducting marketing review
4. The staff at customer service
from public figure.
department are not well
4. Conduct promotions to loyal performed.
customers.
5. The number of non-active part
5. Sell cheaper price to the time agent are high.
agent and achieve
companys objective.

OPPORTUNITIES SO STRATEGIES WO STATEGIES

1. Competitors dont have 1. Increase promotion to gain 1. Improved the performance of

chewing products. more consumers from the customer service in social media.
followers in social media. (W4,O2)
2. High follower in social
(S4,O2)
media. 2. Build new branch/office in Kuala
2. Reward the Sahi product Lumpur. (W1,O3)
3. Improvement in customer
agent and make the product
loyalty.
easily delivered to the
4. Consumer demand every customers. (S1,O3)
early of the month

5. Collaboration with
orphanage and others

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THREATS
1. Imitate products by the
public figure
2. Some customers are
allergic to this product
3. Transportation cost
increases due to price of oil
4. Income in Malaysia citizens
decrease due to economy
recession
5. Government has tightened
the procedures of chewing
and tablet goods
Table 3.0 SWOT Matrix
ST STRATEGIES WT STRATEGIES
1. Increase promotion and 1. Hire new staff for customer
spread awareness about the service department. (W4,T2)
advantages of Sahi product.
2. Build new branch/office in Kuala
(S4,T2)
Lumpur. (W1,T1)
2. Decrease price so that it is
compatible with Malaysian
citizen income and
economy. (S5,T4)
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 PORTERS FIVE-FORCES MODEL OF COMPETITION

Porters Five-Forces Model of competitive analysis is a widely used approached for

developing strategies in many industries. For this assignment, we used Porters Five-Forces
Model in order to determine those strategies for this company. There are five forces which
indicate the nature of competitiveness in this beauty and health industry. In order to determine
whether the company can earned an acceptable profit, the company must follow the steps
which include identifying key aspects or elements of each competitive force. Then, evaluate
how strong and important each element is for the firm. Lastly, decide whether the collective
strength of the elements is worth the firm entering or staying in the industry.

The first Porter Force Model of competition is the rivalry among competing firms. This
element will be placed in the middle of the diagram which shows that it is the most powerful of
the five forces. This element focus on the competitive advantage of strategies over other firms.
Changes in strategy by one firm may be met with retaliatory countermoves such as lowering
price, enhancing quality, increasing advertising or others. There are a lot of conditions that
may cause high rivalry among competing firms. The first condition that relate to the rivalry
among competing firms to this company is similar size of firms competing. Nowadays, there
are too many entrepreneur started their business in this beauty and health industry. Even
though their product is not as commercialize as Qu Puteh, Aura White or DHerbs, but they

19
can get into the industry and gain profit from there. These entrepreneur is include under small
enterprise which is similar to Sahi Element Resources firm. Therefore, those firms products
will be competing with Sahi Sarang Burung and Aloe Vera since they were include in similar
size of firms which small medium enterprise firms.

The second element which can cause the high rivalry among competing firms is the
similar products which they provided. Those firms that carries similar size firm as Sahi Element
Resources firm may also carries similar product. For example, V-Sireh firm which produced
product named Oly Candy carries similar type of product to Sahi Sarang Burung and Aloe
Vera which a chewable tablet candy that can provide good beauty and health to the consumer.
The similarities may be a great rival to Sahi product since it is the demand of the consumers.
But, Sahi product is unique in terms of its contents since the goodness in this product is the
first bird nest chewable tablet candy in Malaysia. Plus, Sahi product contain zero collagen
compare to the other beauty products including Oly Candy product.

The last element is the barriers to enter the market are low and the fixed cost are high
among the competing firms. The barriers to enter the market are low which means it is easy
to easy for the competing firms to enter the market. This is because, any beauty and health
product which are not related to the pharmaceutical product are easily to be declared and pass
by the Ministry of Health in Malaysia. Therefore, there will be more products to enter the
industry and compete with Sahi product. Other than that, the fixed cost are high among the
competing firms which means that the similar product may charge for a similar cost. For
example, Sahi products price is RM49 per unit for peninsular Malaysia and RM55 per unit for
Sabah and Sarawak. Meanwhile for Oly Candy, the price is RM59 per unit for Peninsular
Malaysia and RM63 per unit for Sabah and Sarawak. Those fixed and similar cost will make
consumer have their own decision to buy the best product for them. If the rivalry among
competing firms are strong, industry profit may decline and may make the industry becomes
inherently unattractive. When the rival sense weakness, they will slowly take over marketing
and production efforts and make them as their opportunity.

The second Porter Forces Model of competition is the potential entry of new
competitors. When there are new firms can easily enter the beauty and health industry, the
competitiveness among firms will be increases. There are a lot of barriers to enter the industry
which include the need to gain in technology, lack of experience, strong customer loyalty, large
capital requirements and others. But, because of the barriers to enter the industry are low,
there are a lot of factors which will encourage the new competitor to enter the industry. One
of it is because, any health oriented tablet candy that are not involving pharmaceutical will
easily pass by the Ministry of Health in Malaysia. Next, lower prices. The new competing firms

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may produce the similar product as Sahi product and sell them at the lower price to attract
Sahi customers. Then, substantial marketing resources. Nowadays, there are a lot of
marketing resources that the new competing firms can explore in order to commercialize their
product such as creating websites, advertisement on the internet or billboard or even through
social media. For Sahi product, they only have Facebook and Instagram account that act as
the medium of sell and purchase between the seller and the consumer. Other than that, they
also have advertised their product on different medium. Because there is no official website
for Sahi product, therefore, it will be an advantage for the competing firms in more marketing
their products. Sahi Element Resources firm must identify the potential new firms that may
enter the market and monitor their strategies plus counterattack as needed in order to
capitalized Sahi Element Resources companys own strengths and opportunities. This is
because, if the threats from the new competing firms is strong, the company will fortify their
position and take action to prevent the entrance of new competing firms such as lowering price
or adding features to the product.

The third Porter Forces Model of competition is potential development of substitute

products. In the industry, the substitute product are the close competition to the actual product.
For example, since Sahi product was based on bird nest and aloe vera, their nearest
competitor of substitute product is the pure bird nest itself. But, the opportunity that Sahi
product have is it is low in price compare to the pure bird nest that has been sell in the industry.
For example, My Wallet Bird Nest which were owned by an actress named Fouziah Gous is
much more expensive and cost at RM128 per set. Other than that, there is also product named
Bio Essence Bird Nest which is a facial cosmetic product that produced mainly from a bird
nest which is very expensive in the market. From here we can see that the potential
development of the substitute product will not affect Sahi product since Sahi product was lower
in price. Furthermore, Sahi product is easy to consume compare to its substitute product. Sahi
product is Malaysia no. 1 bird nest chewable tablet candy which easy to consume compare to
consume bird nest purely. Consumption of the pure bird nest is unattractive compare to in a
state of a chewable candy bird nest. Lastly, in comparison with Bio Essence Bird Nest, the
facial product contain bird nest and collagen in its product. In Sahi product, it do not contain
any collagen which is much healthier to consume. Therefore, those potential development of
substitute product are not pressured Sahi Element Resources firm in competing with other
firms.

The fourth Porter Forces Model is the bargaining power of suppliers. The bargaining
power of suppliers affects the intensity of competition in an industry especially when there is
large number of suppliers, only few good substitute of raw materials or high cost of switching
raw material. It is common to have both suppliers and producers that can assist each other

21
with reasonable price, improved quality, just-in-time deliveries and reduced inventory costs.
Sahi Element Resources produce their product and have a strong and good relationship with
the supplier. It is because, Sahi product have 50% chance for their customer to repeat order
in every month. Therefore, there are 50% out of the overall of their customer is their loyal
customers. From this we can see that the demand of Sahi Element Resources to the supplier
is very constant ever month. This good relationship with the supplier has led to reduce of
inventory and logistic costs. The supplier of Sahi Element Resources serve them with just-in-
time deliveries. Sahi Element Resources and its suppliers also had enhanced the quality of
the parts and components being supplied and reduce the products defect rates. As we all
know, Sahi product is a chewable tablet candy which is brought too many good effect for skin
and health. It has approved by Ministry of Health in Malaysia but it is a non-pharmaceutical
product. Therefore, Sahi product was being produced through an advised of one of the
qualified chemist which is also the supplier. After a few months of Sahi product establishment,
the qualified chemist and Sahi themselves enhanced the product quality plus reduced its
defect rates. Lastly, both of them also squeeze out important cost savings for both Sahi
Resources Elements and their suppliers.

The last Porter Forces Model is the bargaining power of consumers. Consumers
bargaining power represents a major force affecting the intensity of competition in the industry.
Whenever there is a bargaining power of consumer in the industry, the rival firms may conduct
many strategies just to gain customer loyalty for their product. The bargaining power of
consumers will be high when the product purchased was standard and undifferentiated. The
consumer gain an increasing in bargaining power if they are particularly important to the
sellers. For Sahi Element Resources, they have their own agent or also known as Team Sahi
which will buy limit of 10 bottles a month from them. Sahi Element Resources will offer them
in a lower price which is RM35 per bottle and sell it to the other consumer. Other than that,
Sahi product will have promotions every month and also promotions during worldwide
celebration such as Mothers Day, Nurses day and others which their main objective is to serve
back to the society. From here we can see that the consumer have their bargaining power
which lead to several strategies conducted in order to gain the customer loyalty since the
consumer are important to the seller.

From the Porter Five-Forces Model of Competition elements we can see that there are
several competitive advantage in the industry itself which may lead for Sahi Element
Resources to stay in the industry. Those competitive elements is worth the firm enter and stay
in the industry since the elements are not strong enough to make this company leaving this
industry. Therefore, the strategies that we will identified for this company is the strategies that

22
will make this company sustain and grow stronger among their competitors in this beauty and
health industry.

23
 RESOURCE-BASED VIEW (RBV)

The resource-based view (RBV) is an organizations resources & capabilities. RBV is

a competitive advantage that can be gained through acquisition and value of organizational
resources. The company can identify, locate and acquire key valuable resources. The
resource-based view (RBV) is a model that sees resources as key to superior firm
performance. If a resource exhibits VRIO (valuable, rare, imitable, organize) attributes, the
resource enables the firm to gain and sustain competitive advantage. There are two types of
resources and that are tangible and intangible.

Tangible assets are physical things such as land, buildings, machinery, equipment and
capital and all these assets are tangible and must have this thing in the company. Physical
resources can easily be bought in the market so they have a little advantage to the companies
in the long run because rivals can soon acquire the identical assets.

Intangible assets are everything else that has no physical presence but can still be
owned by the company. For example, Sahi Elements Resources has a brand reputation and
trademarks. Unlike physical resources, brand reputation is built over a long time and is
something that other companies cannot buy from the market. Intangible resources usually stay
within a company and are the main source of sustainable competitive advantage.

The two critical assumptions of RBV are that resources must also be heterogeneous
and immobile. Heterogeneous is a skills, capabilities and other resources that organizations
possess differ from one company to another. If organizations would have the same amount
and mix of resources, they could not employ different strategies to outcompete each other.
What one company would do, the other could simply follow and no competitive advantage
could be achieved. This is the scenario of perfect competition, yet real world markets are far
from perfectly competitive and some companies, which are exposed to the same external and
competitive forces, are able to implement different strategies and outperform each other.
Therefore, RBV assumes that companies achieve competitive advantage by using their
different types of resources.

The competition between Sahi product and Oly Candy is a good example of how two
companies that operate in the same industry are exposed to the same external forces but they
can still achieve different organizational performance due to the difference in resources. Sahi
product and Oly candy produce chewable tablet candy which easy to consume but Sahi is

24
mainly being made from bird nest while Oly Candy were being made by different types of
ingredients.

The second assumption of RBV is that resources are not mobile and do not move from
company to company, at least in short-run. Due to this immobility, companies cannot replicate
rivals resources and implement the same strategies. Intangible resources, such as brand
equity, processes, knowledge or intellectual property are usually immobile.

VRIO framework

Although, having heterogeneous and immobile resources is critical in achieving

competitive advantage, it is not enough alone if the firm wants to sustain it. Barney (1991) has
identified VRIN framework that examines if resources are valuable, rare, costly to imitate and
non-substitutable. The resources and capabilities that answer yes to all the questions are the
sustained competitive advantages.

Organized to
capture
Rare? value?
If yes, next
stage
If yes next
If yes, next If If yes, next
stage Sustained
stage no,temporary stage
If no,
competitive If no, competitive If
no,temporary
Competitive
competitive advantage
disadvantages competitive Advantage
parity advantage
Valauable
? Costly to
imitate?

Resources are valuable if they help organizations to increase the value offered to the
customers. This is done by increasing differentiation or decreasing the costs of the production.
The resources that cannot meet this condition, lead to competitive disadvantage.

25
 Resources that can only be acquired by one or few companies are considered rare.
When more than few companies have the same resource or capability, it results in competitive
parity. A company that has valuable and rare resource can achieve at least temporary
competitive advantage. However, the resource must also be costly to imitate or to substitute
for a rival, if a company wants to achieve sustained competitive advantage. The resources
itself do not confer any advantage for a company if its not organized to capture the value from
them. Only the firm that is capable to exploit the valuable, rare and imitable resources can
achieve sustained competitive advantage.

Sahi Elements Resources Company has a competitive advantage because all they
have all the element that been stated above because their products a valuable item, it is rare
to get the material, if the other competitor want to imitate it will be costly and the company has
organized to capture value and because all of this it will lead to the competitive advantage of
the company.

26
 QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM)

STRATEGIC ALTERNATIVES

BUILD NEW EXPAND THE EXISTING

BRANCH/OFFICE IN BRANCH/OFFICE IN
KUALA LUMPUR IPOH

KEY FACTORS WEIGHT AS TAS AS TAS

OPPORTUNITIES

1. Competitors 0.08 - -
dont have chewing
products.

2. High follower in 0.20 - -

social media.

3. Improvement in 0.13 4 0.52 2 0.26

customer loyalty.

4. Consumer 0.06 4 0.24 2 0.12

demand every
early of the month

5. Collaboration 0.05 3 0.15 2 0.10

with orphanage
and others

THREATS

1. Imitate products 0.14 - -

by the public figure

2. Some 0.10 - -
customers are
allergic to this
product

27
3. Transportation 0.08 4 0.32 1 0.08
cost increases due
to price of oil

4. Income in 0.07 3 0.21 2 0.14

Malaysia citizens
decrease due to
economy
recession

5. Government has 0.09 - -

tightened the
procedures of
chewing and tablet
goods

TOTAL 1.00

STRENGTHS

1. Increase the 0.10 1 0.10 3 0.30

company revenue
by rewarding the
Sahi products
agent.

2. Inventory 0.07 4 0.28 3 0.21

turnover increase
every 4 months.

3. Increase in 0.05 - -
popularity by
conducting
marketing review
from public figure.

4. Conduct 0.23 - -
promotions to loyal
customers.

28
 5. Sell cheaper 0.08 1 0.80 3 0.24
price to the agent
and achieve
companys
objective.

WEAKNESSES

1. The distance 0.12 4 0.48 1 0.12

between both of
the founders.

2. The space in the 0.02 1 0.02 4 0.08

HQ office is not
fully utilized.

3. The method of 0.10 - -

data based
collecting are not
up-to-date.

4. The staff at 0.15 2 0.30 3 0.45

customer service
department are not
well performed.

5. The number of 0.08 4 0.32 1 0.08

non-active part
time agent are
high.

TOTAL 1.00 3.74 2.18

Table 4.0 Quantitative Strategic Planning Matrix (QSPM)

29
 As shown in the SWOT Matrix table above, there are four strategies that can be gained
by combining SO, WO, ST, or WT strategy. From the combination of SO strategy, we can
conclude that this company is in need in increase the promotion in order to gain more
consumers from the followers in the social media. This is because the company strength is
they conduct promotions every end of month. Other than that, this company also offer
discounts if the customer buy more than four bottles plus free postage. Sometimes, this
company extend their promotion by broadcasting it in WhatsApp Messenger. On the other
hand, one of the opportunity of this company is the increasing in the amount of followers in
the social media. Therefore, the company must increase the products promotion to increase
their sales and target the sales to the online followers.

The second strategy that we gain from combination of SO is by reward the Sahi product
agent and make the product easily delivered to the customers. The company strength is the
founders reward their Sahi product agent and increase their company revenue. The reward is
to encourage the agents so that they can achieved their targets in every month. When the
sales are consistent or increase every month, the revenue will also increase. Agents also act
as a distribution channel that make the product easily reach by the consumer. Meanwhile,
their opportunity is the improvement of the customer loyalty. This is because, 50% of the
customer repeat purchase every month. Other than that, the demand of this product include
from the customer that are concern of their health and also customers that are very particular
about ingredients in a product. Since this product contains zero collagen, there are
improvement in customer loyalty to this product because they prefer to start consume Sahi.
Therefore, the strategy that suitable for this combination is by reward Sahi product agent and
make them easily delivered the product to the consumers since there is an improvement of
customer loyalty to this product.

Through WO strategies that has been identified by combining the companys

weakness and opportunity, one of the strategy is by improved the performance of customer
service in social media. The weakness of this company is the staff at customer service
department are not well performed. Meanwhile, the opportunity of this company is they were
having large number of social media followers. The staff that do not well performed best
explained in the social media itself. The staff is not consistent posting any promotions in order
to promote the product. They were also do not reply direct messages from the customers and
do not provide additional advice in order to gain the customers trust. Therefore, this company
is in need in improvement of customer service staff in social media since they have large
number of followers.

30
 Another strategy that has been identified is by build new branch/office in Kuala Lumpur.
This because one of the weakness of this company is the distance between the two founders.
Madam Norelissa Idayu live in Kuala Lumpur while Ms. Noor Aimi are living in Ipoh, Perak.
They both commonly communicate through phones and they will meet at least twice a month.
At the moment, the main headquarter for this company is at Ipoh and they have staff there.
Since it is a long distance between Ipoh and Kuala Lumpur, it is difficult for the founders to
hire a new staff. On the other hand, there are improvement in customers loyalty. Since most
of the customers are in Kuala Lumpur and it is easier to reach by the customers if the
headquarter is in the centre of Malaysia, one of the strategy that can be conducted is by build
new branch/office in Kuala Lumpur. One of the advantage of this is the consumer can have
the product directly without paying the postage.

By combining strength and threat in ST strategies, the first strategy that we identified
is by increase the promotion and spread awareness about the advantages of Sahi product. As
mentioned above, the company strength is they conduct promotions every end of month. They
also offer discounts and sometimes extend their promotion to the loyal customers. But, there
are customers that are allergic to this product. It is not because of the lack of inspection from
Sahi product, but, their antibody themselves cannot accept Sahi ingredient. Sometimes, Sahi
may have side effect but it is one of the healing process of the healthy ingredients consumed.
Therefore, the promotion must be increased by spread more awareness about the advantages
of Sahi product since the side effect is not directly from Sahi product.

The second strategy is by decrease the price so that it is compatible with Malaysian
citizen income and economy. The strength of this company is it can sell cheaper to the agent
in order to achieve the companys objective. The agent that top up their product monthly, the
company will only sell RM35 per bottle by buying at least 10 bottles. This is to achieve the
companys objective which the product must be well delivered to all the consumers. On the
other hand, income in Malaysia citizens decrease due to economy recession. Therefore, the
company must decrease the price so that more consumer will capable to buy this product.

Last but not least, through weakness and threat combination, we identified that the
company need to hire new staff for customer service department. As mentioned above, the
staff are not update the social media consistently in order to promote the product. Plus, the
staff also do not response and give positive advice to the customer regarding the product. The
customer service department must improve their performance in social media but if there are
any staff that are not committed to their work, the company should terminate them and hire a
new staff. The company also should terminate them if they do not give positive advice to

31
customers since there are customers who cannot consume some of the ingredients contain in
this product.

The same strategy as before we have discovered in this WT strategy is by build a new
branch/office in Kuala Lumpur. As we all know, both of the founders are far apart and
commonly communicate through phones. Plus, they will meet at least twice a month. Since
they are far, it is difficult for them to discover the potential rival firm around them. There is a
possibility if the rival firm try to imitate the product. On the other hand, there are some public
figure that produced a product that are similar to Sahi product. One of them is My Wallet Bird
Nest product which were owned by an actress named Fouziah Gous. Therefore, this company
is in need in to build branch/office in Kuala Lumpur so that the founders are easier to
communicate and discover their rivals. From there, they can improved their strategy in terms
of gaining customers trust and maintaining the customers loyalty.

The best alternative strategy that we have discovered is whether the company has to
build new branch/office in Kuala Lumpur or expand the existing branch/office in Ipoh. After
conducting the Quantitative Strategic Planning Matrix (QSPM), we have rate the attractive
score and total it up. We discover that the best strategy for this company is by build new
branch/office in Kuala Lumpur. The total attractive score for this strategy is 3.74. By build the
branch/office in Kuala Lumpur we can see that it is easier for the consumer to reach the
founders and buy the product. Other than that, it is also easier for both of the founders to
communicate with each other and improve more in order to expand their business.

32
 WAYS TO IMPLEMENT STRATEGIES

From the strategy that has been chosen above, the detail planning to implement it by
plan to open new office/branch in Kuala Lumpur from January to February. After that,
throughout March and April, the project planning has been started by conducting market
research and demand of customers at the centre of Malaysia which is Kuala Lumpur.
Meanwhile, throughout April and May the company has to improve their software and
database in preparation for an opening of a new office/branch in Kuala Lumpur so that the in
and out of product will be more smoother and systematic. After developing the positive result
from the market research, in the month of June the company can started to rent an office in
Kuala Lumpur. Throughout June until August, the company can started to seek for workers
and hire few different staffs in few specific functional areas. In September and October, the
company can review back the test of the project plan. In November, after gaining customers
from Kuala Lumpur area, the company can test result of the market. On December, the
company can collect data that has been planned. The successful data can be as the users
documentation in conducting this strategy.

Gantt chart

JAN FEB MAR APR MAY JUNE JULY AUG SEPT OCT NOV DEC

PROJECT PLANNING

MARKET RESEARCH

IMPROVE SOFTWARE

RENT AN OFFICE IN
KUALA LUMPUR

HIRE STAFFS
ACCORDING TO
FUNCTIONAL AREAS

TEST PLAN

TESTING RESULT OF
MARKET

USER DOCUMENTATION

33
 OVERCOME THE POTENTIAL PROBLEMS

Every successful company tailors its own strategy to fit its specific situation. An
alternative strategies that an enterprise could pursue can be categorized into many actions
which include forward integration, backward integration, horizontal integration, market
penetration, market development, product development, related diversification, unrelated
diversification, retrenchment, divestiture and liquidations. Each alternatives strategy has
countless variations.

Many organizations simultaneously pursue a combinations of two or more strategies

but a combination strategy can be exceptionally risky if carried too far. No organization can
afford to pursue all the strategies that might benefit the firm. Difficult decisions must be made
and priority must be established. Organizations, like individuals, have limited resources. Both
organizations and individuals must choose among alternatives strategies and avoid excessive
indebtedness. Sahi Elements Resources strategies is to open a new branch and get a head
quarters (HQ) in Kuala Lumpur.

Sahi Elements Resources Company in term of integration strategies this companies

should use horizontal integration refers as a strategy of seeking ownership of or increased
control over a firms competitors. Horizontal strategies is horizontal integration and will
mergers, acquisitions and takeovers among competitors allow for increased economies of
scale and enhanced transfer of resources and competencies. Horizontal integration is
accomplished by expansion into additional business activities that are within the same level of
the value chain.

These five guidelines indicate when horizontal will be an effective strategy by when an
organizations can gain monopolistic characteristic in a particular area or region without being
challenged by the federal government for tending substantially to reduce competition.
Secondly, when an organization competes in a growing industry. Besides, that is when
increased economies of scale provide major competitive advantages and when an
organizations has both the capital and human talent needed to successfully manage an
expanded organization. Last but not least, when competitors are faltering due to a lack of
managerial expertise or a need for particular resources that an organization possesses.

Second types of strategies is intensive strategies. Market penetration, market

development and product development are referred to as intensive strategies because they

34
require intensive effort if a firms competitive efforts if a firms competitive position with existing
products is to improve.

Sahi Elements Resources Company will use market penetration and market
development for the best alternative or intensive strategies for the company. Market
penetration strategy seeks to increase market share for present market through greater
marketing effort. This strategy is widely used alone and in combination with other strategies.
Market penetration includes increasing the number of sales persons, increasing advertising
expenditures, offering extensive sales promotions items, or increasing publicity efforts. These
five guidelines indicates when market penetration may be an especially effective strategy. The
guidelines include when current markets are not saturated with a particular product or
services, when the usage rate of present customers could be increased significantly, when
the market shares of major competitors have been declining while total industry sales have
been increasing, when the correlation between dollar sales and dollar marketing expenditures
historically has been high and finally when increased economies of scale provide major
competitive advantages.

Under the intensive strategies, Sahi Elements Resources will use market development
strategies. Market development involves introducing present products or services into new
geographic areas. Sahi Elements Resources company will increase their product to northern
ways since now they just distribute their product in south area only include Selangor, Melaka,
Johor and Pahang.

These six guideline indicate when market development may be an especially effective
strategy which include when new channels of distribution are available that are reliable,
inexpensive and of good quality, when an organizations is successful at what it does, when
new untapped or unsaturated markets exist, when an organization has the needed capital and
human resources to manage expended operations, when an organizations has excess
production capacity and when an organizations basic industry is rapidly becoming global in
scope.

The last strategy is diversification strategies. There are two general types of
diversification strategies which is related diversification and unrelated diversification.
Businesses are said to be related when their value chains possesses competitively valuable
cross-business strategic fit. Companies favour related diversification strategies to capitalize
on synergies as transferring competitively valuable expertise, technological know-how or other
capabilities from one business to another, combining the related activities of separate
businesses into a single operation to achieve lower costs, exploiting common use of a well-

35
known brand name and cross- business collaboration to create competitively valuable
resource strength and capabilities.

Diversification strategies has an advantages such as lessen the risk of being in a single
industry and for disadvantages by diversification is more difficult to manage. Sahi Elements
Resources will use related diversification since they must keep remind what product they have.
Related diversification a process that takes place when a business expands its activities into
products line that are similar to those it currently offers. Related diversification is either through
acquisition of competitors or through internal development of new products or services.

Six guideline for when related diversification may be an effective strategy are as when
organization competes in a no-growth or a slow-growth industry, when adding new but related
products would significantly enhance the sales of current products, when new but related
products could be offered at highly competitive prices, when new but related product have
seasonal sales level that counterbalance an organizations existing peaks and valleys, when
an organizations products are currently in the declining stage of the products life cycle and
lastly when an organizations has a strong management team.

Sahi Elements Resources must spend resources and focus on a finite number of
opportunities in pursuing strategies to achieve an uncertain outcome in the future. Strategic
planning is much more than a roll of dice, it is a wager based on predictions and hypotheses
that are continually tested and refined by knowledge, research, experiences and learning.
Organizations cannot do too many things well because resources and talent get spread thin
and competitors gain advantages. In large diversifications companies, a combinations strategy
is commonly employed when different divisions pursue different strategies.

36
 CONCLUSION

In conclusion, from our research of this company, this company have a great strength
but they also have some weakness that they can improve. If they can improve their weakness
and follow the suggestion that we give, they can enlarge their business and enter into
worldwide market.

The company also can use the strategies that we have given to them. Nowadays, to
sustain in the beauty and health industry is very hard if your company do not have unique,
rare and inimitable product. In order to sustain in this business the company must adapt
quickly to compete with other rival firms.

For instance, the company could use the market penetration strategy by advertise
widely. For example, by having their own website. With this, customer will be more aware with
the establishment of Sahi product. When people have aware of the product, they will be more
confident to consume the product which directly will increase the companys sales and profit.

Overall, in order to enlarge the business of this company, the company must follow the
chosen strategy that we have identified which opening new branch/office in Kuala Lumpur
since Kuala Lumpur is the center of Malaysia. Centre of Malaysia may have larger customer
demand to consume this product.

In the nutshell, we can say that, this company have the potential to grow further if they
take steps early to adapt with the changes that happen around them. This will make them to
be the most successful product consume in the industry.

37
 REFERENCES

David, F. R. (n.d.). Strategic Management Concepts and Cases. Pearson.

Linton, I. (n.d.). Strategies to Overcome Marketing Threats. Retrieved from Small business:
http://smallbusiness.chron.com/strategies-overcome-marketing-threats-38186.html

Moazum, M. (2013, November 9). Resource based view of firm. Retrieved from Slideshare:
https://www.slideshare.net/soaim/resource-based-view-of-firm

Patrick M. Wright, B. B. (2001, September 20). Human resources and the resource based
view of the firm. Retrieved from Pergamon:
http://journals.sagepub.com/doi/pdf/10.1177/014920630102700607

Resource Based View - The VRIN Characteristics. (n.d.). Retrieved from Management Study
Guide: http://www.managementstudyguide.com/resource-based-view.htm

Yusmar, Z. (2015, December 12). J.CO Donut & Coffee Marketing ( Principles of Marketing
). Retrieved from Slideshare: https://www.slideshare.net/zulfadliyusmar/jco-donut-
coffee-marketing-principles-of-marketing

38
APPENDICES

39
Madam Norelissa Idayu with her companys products, Sahi Sarang Burung dan Aloe
Vera and Krasa

Our group members with the founder during interview session

40
Interview session with founder, Madam Norelissa Idayu binti Zainal Abidin

41
Articles from newspaper after the launching of Sahi product

42
Public figure that review the product in order to market it

43
Competitor that also produced bird nest based product supplement

44
 Sahi Elements Resources celebrated Nurses Day

Speech delivered by another founder of Sahi Elements Resources, Noor Aimi Yusuf,
during Nurses Day

45