2.2.

5 Strategy used by UMW holdings

Based on the analysis, suggest which industry/ business that UMW should focus on provide
suitable strategies to be deployed?

Based on our analysis, we suggest the business for UMW should focus is oil and gas drilling
because UMW can monopoly the industry because there is not many company that produce
the service.

The strategies to be deployed is differentiation strategy. Differentiation strategy is an

approach under which a firm aims to develop and market unique products for different
customer segments. Usually employed where a firm has clear competitive advantages, and
can sustain an expensive advertising campaign. It is one of three generic marketing that can
be adopted by any firm.

This strategy means identifying the most important criteria used by buyers in the market and
then designing product, service or other offerings in a way that best meets those criteria.
Offering the highest-quality product, the best solution, an exclusive feature or tool or organic
materials are examples of ways to differentiate on certain criteria. Differentiation strategies
coincide with higher price points than low-cost providers because it costs more money to
provide a better overall solution.

Since there is not many company which produce oil and gas drilling service, there are several
advantages for UMW for implementing this strategy which are brand loyalty, non-price
competition and no perceive substitute. The buyer will focus on their services since they are a
sole supplier. In addition, UMW does not need to face price competition with the other
competitor and there is no substitution. That is why we choose the strategy and we believe
that this differentiation strategy is suitable for UMW.

https://sarahshariff.wordpress.com/2014/12/11/part-2-umw-holdings-sustaining-a-centennial-
corporation-application-of-business-strategies/
The UMW Group currently has four core businesses: Automotive, Equipment, Manufacturing
& Engineering and Oil & Gas. Strategic alliances with global players have positioned the
Group as a leader in the industries it serves. UMW has operations overseas in Singapore,
Thailand, Vietnam, Myanmar, Papua New Guinea, China, Australia, India, Turkmenistan,
Indonesia, Taiwan and the Middle East.

CORPORATE STRATEGY

UMW Group has a clear Mission Statement that translates into effective management
strategies. In addressing a highly competitive environment both in Malaysia and in the Asia-
Pacific region the group approach to strategy is simple but flexible:

Strategic alliances: UMW group build successful, long-term business partnerships with
leading global companies.

Regional focus: To achieve the necessary size to compete effectively, they aim for growth
within the Asia-Pacific region which is both organic and/ or developed in partnership with
their highly regarded partners.

Customers: The customer is at the core of our business vision. They intend to strengthen
their core business in Malaysia and regionally by delivering value par excellence to their
customers.

Business merit: Older businesses are continuously reviewed and new business proposals are
evaluated against strict financial and strategic criteria to ensure optimal resource utilisation.

This is evident in their multi-dimensional strategy that focuses on four main segments the
marketplace, the workplace, the environment and the community

http://www.umw.com.my/doc/20080801%202007%20CSR%20Report.pdf
2.2.6 Social responsibilities and ethical issues faced by UMW holdings.

Social Responsibility

Community Development

UMWs CSR partnership with MERCY Malaysia continued for the fifth consecutive year in
2013. Along with manpower support from its employees, UMW has provided MERCY
Malaysia with more than RM2.5 million in funding to conduct mobile clinics, alcohol misuse
intervention groups, fire-risk reduction activities, as well as disaster relief efforts for remote
or vulnerable communities in Malaysia. UMW is also one of the first corporations to
establish a Payroll Giving Scheme, in benefit of MERCY Malaysia. The scheme, which took
effect in 2012, provides employees with the opportunity to contribute to MERCY Malaysia
on a regular, monthly basis. Other community development programmes carried out by
UMW in 2013 include

Chinese New Year Celebrations with the residents of Persatuan Kebajikan Ci Hang
Chempaka, an old folks home at Kampung Melayu Subang on 23 February 2013.

A visit to the paediatric ward of Hospital Tuanku Fauziah in Kangar, Perlis, in conjunction
with Minggu Saham Amanah Malaysia on 4 April 2013.

1Malaysia Programme with Yayasan Chow Kit on 23 March 2013.

Motivational Workshop for Pertubuhan Kebangsaan Orang Kerdil Malaysia on 27 April

2013.

Buka Puasa & Raya Shopping programme with Rumah Amal Kasih Bestari on 22 July
2013.

Majlis Sambutan Hari Raya Aidilfitri with the disabled from the Society of the
Orthopedically Handicapped, Malaysia on 24 August 2013.

Visit to Pusat Jagaan Nur Hassanah in conjunction with Hari Warga Emas Kebangsaan on
12 October 2013.

Safari Deaf Awareness Day programme at Zoo Negara with students from Sekolah
Menengah Pendidikan Khas Vokasional Shah Alam on 19 October 2013.

Deepavali shopping with children from Rumah Kebajikan Karunai Ilam on 26 October
2013.
 Balik Kampung programme with children from Rumah Amal Al-Firdaus and Rumah
Shalom on 23 and 24 November 2013.

Christmas shopping with children from Shepherds Centre Foundation on 21 December

2013.

UMW Toyota Motor Sdn. Bhd. (UMW Toyota Motor) held the 22nd Toyota Classics,
featuring the North Czech Philharmonic Teplice at Dewan Filharmonik PETRONAS on 12
November 2013. Proceeds from the concerts ticket sales and corporate donations were
channelled to three organisations - The Society for the Advancement of the Blind, Malaysian
Federation of the Deaf and the Malaysian Liver Foundation.

EDUCATION

UMW continued its participation in PINTAR - a school adoption programme that aims to
foster excellence among youths in underserved communities. In 2012, UMW took seven
national and vernacular primary schools under its wing. The Group provided funding for
motivational camps, tuition classes as well as additional educational materials for these
schools. To date, nine (9) schools have graduated from the UMW-PINTAR programme.

The UMW-PMR Clinic, first launched in September 2012, was held for the second time in
2013. The 2013 clinic is a collaborative effort between UMW, Petaling Perdana Education
District and Utusan Malaysia. Students who attended the five (5) day clinic were given a
motivational talk and also intensive coaching on four (4) core PMR examination subjects -
English, Science, Mathematics and Bahasa Malaysia.

During the year under review, UMW also sponsored the JustSpeak English Communication
Camp for Maktab Mahmud students in Alor Star, Kedah. The camp was held on 21 and 22
June 2013.

ENVIRONMENT

The Toyota Eco Youth (TEY) programme, organised by UMW Toyota Motor, completed its
13th successful year in 2013. The programme has since reached close to 200 schools nation-
wide, involving approximately 2,000 students and teachers. It has also earned a reputation for
being a sustainable eco-programme with several schools still conducting the projects that
were initiated under TEY many years ago. This includes SMK Sri Muda, Penang, and SMK
(Agama) Maahad Hamidiah, Kajang, Selangor, which participated in 2007, 2010 and 2011.

On 16 November 2013, 35 UMW Community Champions participated in a River Cleaning

and Qua-Qua programme at Serendah, Selangor. This programme marked the third of such
collaboration between UMW and Lembaga Urus Air Selangor.

UMW was the main sponsor of the Shah Alam Trees For Life 2013 programme, organised by
Majlis Bandaraya Shah Alam at Laman Kemerdekaan on 14 December 2013. A total of 44
UMW Community Champions were also there to lend a hand, alongside volunteers from
other companies, universities and Non-Governmental Organisations.

Ethical issued

Board Charter

The Board Charter, which was adopted by the UMW Board on 21 January 2008, is aimed at
ensuring that all Directors acting on behalf of the Company are aware of their duties and
responsibilities as Board members and the various legislations and regulations affecting their
conduct. It also ensures that the principles and practices of good CG are applied in all their
dealings in respect of and on behalf of the Company. The Directors of all operating
subsidiaries in the Group constantly adhere to the Code of Ethics and Board Charter which
provide guidance to Directors to recognise and manage ethical issues, provide mechanisms to
report unethical conduct, and help foster a culture of honesty and accountability. The Board
Charter has been revised to align it with recent changes in regulations and best practices. On
24 April 2014, the revised Board Charter was adopted by the Board. A copy of the Board
Charter is published on the Companys website.

http://www.financialreport.biz/File/AR/2014/5/27/4588%20-%202250181116472.pdf