STRENGHTS, WEAKNESSES, OPPOURNITIES AND THREAT ANALYSIS

SenHeng Electric has several powerful strengths on which to build, but their major weakness
is difficult to manage the service quality standard for all its outlets, difficult to manage level
of quality and high staff turnover. The major opportunity is the alternate channel for ECommerce, increase in value of currency and increase in consumer income. We also face the
threat of new entrants, rivalry among competitor and parallel importing.
A. Strengths of the Company
SenHeng Electric can build on these important strengths:
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Supply Chain Management

SenHeng Electric has installed a comprehensive supply chain management system into the
day to day operations of its business. This system allows the company to gauge and manage
product flow seamlessly. Furthermore, it allows the company to continuously maintain
optimum stock of goods within all their outlets. This will ultimately reduces excessive cost on
overstocking and eliminate low supply upon consumers demand is rise. The system was
designed in the way of centralized order that liked online directly to its suppliers.
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Branding

Given the long history of the company in household electrical appliances business, SenHeng
electrical is a well known branding in Malaysia. The company continues to execute its brand
building strategies by creating more streamlined look and feel for all its branches. This new
identity spans across the board, its marketing brochures, posters as well as uniform for its
employees. With the companys trademark green, these stores are brighter that the usual
electrical store. This exercise has given SenHeng electrical a friendlier image and enabled the
company to provide more professional service to its customers.
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Loyalty Card

The company has implemented PlusOne loyalty card, a unique plan to reward its customers.
The card members of PlusOne are allowed to enjoy extra thirteen months of product warranty
as well as thirty percent off on all service or repairing labor costs. In additional to that, those
products that purchased by card members will be delivered to their doorstep with no charge.
Every purchased item is rewarded with specific points to its member card and these points
will be used to redeem for other goods.

Fixed price policy and flexible payment scheme

To standardize the service standard and eliminate poor experiences by customer in the
companys outlet throughout the nation, the company has implemented a fixed price policy
and the product offered by its outlets carried the same price. The company has partnership
with more than ten major banks for flexible payment methods where customers are allowed to
make payment via cash or credit and opt for their preferred installment plan with interest free.
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Varieties of products

To provide conveniences for its consumers and enhancing their shopping experience, the
company has offered varieties of electrical products for different brands. It covers home
appliances, digital imaging, computer, audio video, office automation and those electrical
appliances from bedroom to kitchen. Product testing and demo facilities are provided to its
consumers to learn on the products prior to purchase.
B. Weaknesses of the Company
SenHeng Electric has learned from the successes and mistakes of others by entry the retailer
market in Malaysia. Nonetheless, we have these weaknesses:
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Difficult to manage the service quality standard for all its outlets

Consumer is the kind in todays market. In order to retain existing customer and convert them
into loyal customer, the company needs to listen and understand their consumer needs.
Despite SenHengs effort in providing training to improve the service standard of its
employees, however, it is still difficult to manage the service quality standard for all its outlets
due to the large number of the outlets spread throughout the nation. Customers feedback is
therefore important to the company to gauge the service standard of respective outlet and put
in appropriate preventive measure which SenHeng needs to focus on it.
-

Difficult to manage level of quality

SenHeng owns difficult location for their outlets, but they dont operate completely free from
other outlets. Because of this, different level of quality, inconsistency in branding, poor
service, shabby locations or inferior products delivered by other outlet can impact the entire
chain. This so-called coattail effect means that outlet with less oversight and corporate control
may allow irresponsible outlets manager to harm the companys brand.

High staff turnover

High turnover can harm SenHeng's ability to retain customers and provide highquality customer service. Customers may feel more comfortable talking to the same
employees and customer service representatives over time. High rates of turnover
lead to higher costs related to recruiting and training new employees. It costs
businesses money to hire human resource workers to interview and hire candidates
and training new workers can be a costly process that diverts skilled workers from
revenue-generating activities. In addition, high turnover can lower employee morale
and cause a flood of people leaving SenHeng because they see their peers doing the
same thing. High turnover can also make the remaining employees more stressed out
because they have to fill in the gaps until a new employee is hired and trained.

C. Opportunities
SenHeng Electric can take advantage of these market opportunities:
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E-Commerce

According to euro money latest statistic, the internet users in Malaysia have continues to grow
from 14 million in 2007 to 17 million in 2011. E-commerce served one of the most popular
tools for many organizations to tackle the fierce competition in the market. It will untapped
the potential business market segment and increase the sales of their products in a cost
effective manners. With the emerge popularity of smart phones, M-commerce becomes
another potential channel for business to promote their products or promotion effectively.
- Increase in value of currency
If the value of currency Malaysia is worth increase in international market, then the foreign
goods and services come relatively cheaper. This will be make the price of products imported
in Senheng more cheaper, such as Samsung, Toshiba and more, thus many consumers will buy
their products.
- Increase in consumer income
If consumer income increase, it is for certain that consumer's disposable income also

increases. This means that the consumer has more money to freely spend on products. The
more money a person has the more they are willing and able to buy products in SenHeng.
D. Threats
We face these main threats with the introduction of SenHeng Electric:
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Threat of new entrants

Currently there are large numbers of small or medium size companies in Malaysian electrical
retailing market. Not to include large departmental stores like Giant or Tesco. Thus, the profit
margin is rather tiny due to the stiff competition in the market. With the maturity level for
electrical retailing business, its very unlikely that new entrants would step in without a new
business models. However, in view of the rising internet penetration, online shopping may be
the novel trend in Malaysia. With the increase trend for consumer to shop online, online
retailer may be one of the threats which will potentially slide off the market share of
SenHeng.
-

Rivalry among competitor

Although SenHeng Electric is one of the largest electrical chain stores in Malaysia, the
company still facing stiff competition from its competitor The Court whom continues to
slide the market share of SenHeng Electric. To avoid cutthroat pricing competition and sustain
its market present, service differentiation is one of the key areas for the company work on.
- Parallel importing
According the increase of import taxes, this will make the price of product imported increase,
thus many consumers will not buy them in SenHeng, because major products sold in SenHeng
are imports from foreign countries. When the parallel imports appear on the market, many
consumers buy them. Parallel imports are imports of a patented or trademarked product from
a country where it is already marketed. Sometimes referred to as grey market imports,
parallel imports often takes place when there is differential pricing of the same product either
brand-name or generic drugs in different markets, they usually owing to local manufacturing
costs or market conditions. Parallel imports can reduce the price of electric products by
introducing competition. However, they can also affect the negotiation of tiered pricing
regimes with SenHeng.

OBJECTIVES AND ISSUES

We have set aggressive but achievable objectives for the first year of retailing market.
A. Objectives
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To increase the professional looks of the company and brand awareness to its potential
consumers in the market.

To conduct consumer survey and served as a channel for consumer to escalate

feedback/complaint for its products and services.

To provide alternate channel where consumers are allowed to place their order anywhere
anytime. Customers can trace their order online easily without calling the outlets for
assistance.

To increase its sales volume by 20 percent from second years onwards after the webpage
enhancement. Assumption make that progressive incremental in sales order which will
generate yearly gross revenue of RM100,000.00 starting from the second consecutive year
onwards after e-commerce website launched.

B. Issues
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The partnership will see the country's integrated media giant tapping into Senheng
Electric's RM30 million-per-month share of the smartphones and digital devices market in
Malaysia, to broaden its reach.

The partnership between both parties will see Senheng tapping its more than one million
PlusOne members with attractive Media Prima's digital newspaper package deals. MEDIA
Prima Bhd's digital arm, Media Prima Digital (MPD), expects its more than 10,000 epaper subscribers to grow substantially from its partnership with Senheng Electric (KL)
Sdn Bhd.