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GSM 5160

STRATEGIC MANAGEMENT
1

Perodua: Improving Customer


Satisfaction through Efficiency
focused internal changes

GROUP MEMBERS:
HASLINA HASSAN
SHAMINI SELVARAJ
NOR SHAMRI ITHNIN
DR RAIMOND SELKE

GM05320
GM05289
GM05312
GM05322

CONCLUSION
RECOMMENDATION
ANALYSIS
ASSUMPTIONS

PERODUA BACKGROUND
INTRODUCTION

6
5
4
3
2
1

CONTENT

INTRODUCTION
ISSUE!!
IT TAKES THREE MONTHS FOR CUSTOMERS TO GET
THEIR CARS ONCE ORDERS HAVE BEEN PLACED.
WE WILL IDENTIFY AND ADDRESS RELEVANT
INTERNAL AND EXTERNAL ISSUES AND TO RESOLVE
THIS MATTER ACCORDINGLY.
OBJECTIVE: TO ENSURE THAT THE
CUSTOMERS WILL GET THEIR ORDERS WITHIN
ONE MONTH ie 50% REDUCTION IN WAITING
TIME.

PERODUA BACKGROUND
4

ESTABLISH

GROUPS

Perusahaan
Otomobil
Kedua Sdn
Bhd
(Perodua)
was set-up in
1992
2nd national
car

Perodua
Manufacturing Sdn Bhd
(Manufacturer)
Perodua
Sales sdn
Bhd (Sales &
distribution
arm)
Perusahaan
Otomobil
Kedua Sdn
Bhd
(Holding co)

CAPITAL
Authorized:
RM500Mil
and paid-up
capital:
RM140Mil

PRODUCT
5 different
products
thats
affordable,
compact and
practical car
for growing
motoring
population.

ASSUMPTIONS
Financial institution has certain limitation on
aggregate amount of loan given out to buyers.
About 80% or orders were obtained during month
end - rush to register vehicles with local authorities.
Computer Systems the databases between the
retailers and production warehouse are not link ie
lack of communication between warehouse and
retailers.
Inexperience in handling deliveries to places
especially in rural areas. No third party service
providers are hired.

BCG MATRIX
6

MOVING FORWARD

PRE & POST PERODUA POSITION

TOWS MATRIX
TOWS MATRIX

Internal Strength
1. Producing compact cars, value for money
and affordable price. 7
2. Excellent reliability and build quality.
3. Impressive standard equipment
specification.
4. Fuel saving cars.
5. Easy to drift for beginners.
6. Suitable for couples.
7. Low cost leader in Asia.

Internal Weakness
1. Weak distribution system.
2. Low productivity.
3. Delay in receiving spare parts.
4. Poor or standard design.
5. Notorious for low safety standards.
6. Excessively dependant on Toyota for
upgrade.
7. Low research and development.
8. Not innovative.
9. Over dependence on the domestic market
and weak brand image in the international
market.

External Opportunities
1. Financial market
2. New technology
3. New market as home market is saturated.
4. Increasing fuel price will drive people to
prefer smaller cars.

SO
SO 1. Acquire the core technical competency
to design and manufacture its own
automobiles, and eventually propel
Malaysia into the international arena as a
full-scale manufacturer of motor vehicles.

WO
WO 1. Computerized network, which would link
Perodua 's operation starting from getting
the order from customer to manufacturing,
to invoicing and to prompt delivery.
WO 2. Hire and train people with required
technical capabilities and expertise.
WO 3. Invest more on research & development
on design, technology and system.

External Threats
1. Economic crisis
2. Competitor like proton have higher
investment capabilities.
3. Competitors can overtake R & D
investment.
4. Low cost substitutes being marketed by
Chinese manufacturer.
5. Macro-economic situations leads to lower
sales for all automobile manufacturer.

ST
ST 1. innovative advertising and sales
promotion campaign so as to create a 'pull
sales environment

WT
WT 1. Improve customer service through
integrated facilities, which include the setting
up of a registration center, a pre-delivery
inspection center, customer service center,
and delivery center altogether under one
roof.

ST 2. To maintain low cost leadership and fuel


saving car at affordable price.

WT 2. More expose to safety hazards.

ISHIKAWA DIAGRAM
EXTERNAL
SYSTEM

GOVERNMENT
Redundance
requirement

MARKET
Loan provider
requirement

Bureaucracy

Ineffective
communication

Inconsistent
demand pattern

Agencies involve
Less customer
satisfaction

Ineffective
communication
Late in
delivery

Lack of training
Lack of incentive

Excessive hierarchy

Excess inventory
SYSTEM
PEOPLE

Poor condition
Transportation
Peripheral area

Conflict situation

Limited storage space

LOCATION

INTERNAL

Lack of efficiency

MANAGEMENT

POOR DISTRIBUTION
/DELIVERY

PARETO ANALYSIS
9

No

Problem (step 1)

Cause (step 2)

Score (step 3)

1.

Ineffective distribution

Late in delivery of
cars, Over demand,
Insufficient raw
material, Ineffective
communication,
Location

18

2.

Wrong delivery of cars (specs)

Ineffective
communication

3.

Surplus in inventory

Late in delivery of
cars, Ineffective
communication

4.

Increase in customers
complaints

Late in delivery of
cars, Ineffective
communication

12

* Scores are based on verbal survey done on 30 Perodua clients.

PARETO ANALYSIS
45

100

10
90

40

80

35

70

30

60
25
50
No of people
Cumulative %
40

20
15

30

10

20

10

0
Ineffectiv e communication

Late in deliv ery

Insufficient raw material

Location

Causes of poor distribution of cars in Perodua


By handling ineffective communication having a effective communication, Perodua can solve 80% of
problem such as distribution of cars (specs), surplus in inventory and customers complaints. One
solution (20%) to solve many problems (80%).

IFE MATRIX
INTERNAL STRENGTH

WEIGHT
(Market)

11

RATING
(Company)

WEIGHTED SCORE

1.20

1. Strong market player

30%

2. Supplies compact and


affordable cars

10%

0.30

3. Good reputation and image

6%

0.18

4. Excellent reliability and build


quality

4%

0.12

5. Low cost leader

10%

0.40

6. Strong marketing and


promotion

4%

0.12

WEIGHT

RATING

WEIGHTED SCORE

1. Supply on-time delivery


decreased

6%

0.06

2. Low productivity

6%

0.06

3. Poor or standard design

6%

0.06

4. Notorious for low safety


standards.

6%

0.12

5.Sensitive to oil prices

8%

0.16

6. Customer complaint increases

4%

0.04

INTERNAL WEAKNESSES

Total

100%

2.82 (internal position)

EFE MATRIX
OPPORTUNITY

WEIGHT
(Market)

12

RATING
(Company)

WEIGHTED SCORE

1. New technology

15%

0.60

2. Supplier from local

10%

0.40

3. Newer market favorable of


small cars

8%

0.24

4. Internationalization

10%

0.30

5. Decline in customer loyalty

6%

0.18

WEIGHT

RATING

WEIGHTED SCORE

1. Competitive price of other


brand in the market

15%

0.45

2. Decline in customer loyalty

6%

0.18

3. Multiple and diverse


regulatory environment to
contend with from
international and domestic

8%

0.16

4. Macro-economic situation

10%

0.30

5. Low cost substitutes

12%

0.24

THREATS

Total

100%

3.05 (strong external position)

IE MATRIX
13

EFE
3.05

IFE
2.82
Suggestion Grow and Build strategy
The strategies should focus on market penetration, market development, and product
development. From the operational perspective, a backward integration, forward
integration, and horizontal integration should also be considered.

STRATEGY MAP
FINANCIAL

CUSTOMER

INCREASING MARKET SHARES FROM 14% (1995) TO 35%


(2020)
Domestic Direct
Foreign Direct
Investment
Investment
Investment
PIONEER E-COMMERCE
14 IN THE AUTOMOTIVE
SECTOR
e- Daftar

INTERNAL
PROCESS

LEARNING &
GROWTH

e- Excise

PIONEER THE PROJECT VIA JOINT EFFORT


& TECHNOLOGY IMPROVEMENT
Electronic data
interchange
SMART PARTNERSHIP
Entreprene
-urial Dev

University
/Industry staff
Bridging gap

Internship
Industry
Advisory Panel

RECOMMENDATION
15

Improve computer mainframe capacity to cope with peaks


submission

Empower organization change via: Online excise duties


payment Online vehicle registration to RTD HQ

Outsource the delivery activities to third party

Negotiation with Local Authorities in expediting car registration

Switch from Batching system submission from outlets to


Online vehicle registration to RTD HQ

MOU with Financial Institutions on the aggregate amount of


loans to buyers.

CONCLUSION
16

We have looked into the issue in the introduction stage


distribution/delivery

We have studied the BCG Matrix of Perodua - at cash cow


quadrant that aimed to be in star.

We have identified the causes to the issue by using Ishikawa


cause and effect Diagram

We have done Pareto Analysis and identified that ineffective


communication is a major issue for Perodua.

We have looked into EFE and IFE that shows weak internal
position while EFE shows strong position to overcome the issue.

We have studied the Strategic Map and Perodua will be able to


reach its target market shares if the distribution/delivery issues
be handled accordingly.