MASTER IN BUSINESS ADMINISTRATION

SEPTEMBER 2021 ASSIGNMENT 1

COURSE: STRATEGIC

MANAGEMENT COURSE CODE: MGT

6303

STUDENT NAME: SHEN GONG LUAN

STUDENT ID: SUKD1703218

 Table of content

PART A
1. Introduction -----------------------------------------------------------------------------------3
2. Alternative strategies
2.1 Forward Integration -- Tencent --------------------------------------------------------3
2.2 Horizontal Integration strategy -- Top Glove ----------------------------------------4
2.3 Market Penetration -- H&M ------------------------------------------------------------4
2.4 Product development strategy -- Hilton -----------------------------------------------5
2.5 Related Diversification strategy -- AirAsia ------------------------------------------5
2.6 Retrenchment -- ZARA -----------------------------------------------------------------6
PART B
1. Introduction -----------------------------------------------------------------------------------7
2. Internal factor evaluation (IFE) matrix ---------------------------------------------------7
3. External factor evaluation (EFE) matrix --------------------------------------------------8
4. SWOT analysis matrix ----------------------------------------------------------------------9
5. The Quantitative Strategic Planning Matrix- QSPM Matrix
Table 5.1 -------------------------------------------------------------------------------------10
Table 5.2 -------------------------------------------------------------------------------------12
6. Conclusion ----------------------------------------------------------------------------------13
7. Reference ------------------------------------------------------------------------------------14
PART A

1. Introduction
Under the influence of covid-19, agglomeration social industries such as retail and
catering will be greatly adversely affected. For companies, how to deal with the crisis
brought about by the epidemic, operate healthily during the epidemic, quickly recover
after the epidemic, and change the previous strategy to adopt an alternative strategy is
the most important issue. Part a will introduce six different combination strategies
adopted by six companies for analysis.

2. Alternative strategies
2.1 Forward Integration -- Tencent
Tencent is a world-leading Internet technology company that uses innovative
products and services to improve the quality of life of people around the world
("Home | Tencent Careers", 2021) .

After the outbreak, in order to support large-scale online activities, Tencent's

conference solution included a number of Tencent self-developed basic technical
support. Tencent meeting urgently deployed, quickly expanded capacity in the first
time. In 8 days, the Tencent Conference has expanded the capacity of more than
100,000 cloud hosts, invested more than one million cores of computing resources,
and completed service coverage in more than 100 countries and regions around the
world (Shen, 2021).

Through the use of forward integration strategies to create multi-party audio and
video collaboration capabilities, Tencent Conference has completed the mission of
"Technology for Good" and the vision of "Building a networked community on a
global scale."
 2.2 Horizontal Integration strategy -- Top Glove
Top Gloves is the world's largest manufacturer of rubber gloves. The stock prices
of top glove companies have been closely watched during the global epidemic,
because the outbreak of the epidemic has pushed up the demand for gloves and
increased profits (Kee et al., 2021).

Horizontal integration can enable enterprises to concentrate their strengths to form

core competitiveness, and rely on their respective professional capabilities and
advantages in different fields to expand market share and reduce costs. Top glove
adopts a horizontal integration strategy. The company focuses on its own core
competitiveness, outsourcing the work that is least good at, and looking for
professional external suppliers to coordinate most of the work in the supply chain
（LEE, Y, 2021) .

Top Glove concentrates its core competitiveness through horizontal integration,

which means "owning excellent quality glove products and services, enriching and
protecting mankind" vision and "continuous improvement by providing high-quality
products and excellent world-class glove manufacturers Innovation” mission.

2.3 Market Penetration -- H&M

H&M is a clothing brand founded by Erling Persson in Sweden in 1947. The
products in the H&M store are diversified, providing basic clothing popular among
men and women and children (Bogari, 2021).

To combat the economic impact of the epidemic, H&M proposed market

penetration strategy. Move the marketing scenario from the current store to the online,
and promote e-commerce business globally: For example, in the Chinese market,
H&M opened up online shopping channels by opening a flagship store on Tmall. At
the same time, H&M launched the next-day delivery service and tried the same-day
delivery service in some regions. Last year, the group added more than 100 online
markets, and stated that online channels will be the key development direction of the
group (Al-Dehlawi, 2021).

H&M has realized the vision of "transforming shopping methods and improving
lives" through market penetration strategies. The transformation of consumption
patterns has also better fulfilled the mission of "investing in employees and innovative
ideas".

2.4 Product development strategy -- Hilton

Hilton Worldwide Hotel Group was founded in 1919. At present, it has developed
into a famous international hotel group with 18 brands and nearly 6,100 hotels in 118
countries and regions around the world.

To meet the ever-changing expectations and needs of consumers during the

epidemic, Hilton announced that it will launch the “Hilton CleanStay” strategy in
Hilton hotels worldwide to promote industry-leading cleaning and disinfection
standards. Hilton cooperated with Reckittmann Group and Mayo Clinic to use
existing products and services to develop an upgraded hotel sanitation and
disinfection operation workflow and conduct team member training. Let Hilton guests
enjoy a cleaner and safer accommodation experience from check-in to check-out
("Hilton CEO Discusses Impact of COVID-19, Plans for Future", 2021).

This strategy embodies Hilton's vision of "Let the guests live with peace of mind,
live with peace of mind, and focus on enjoying the unforgettable experience we
provide." At the same time, this strategy also better achieves the mission of
"protecting the Hilton team members who serve in the hotel's frontline".

2.5 Related Diversification strategy -- AirAsia

AirAsia was established in 2001. It is Malaysia’s second international airline and
the first low-cost airline in Asia.

Under the impact of the epidemic, rumors of AirAsia Japan’s closure, the sale of
AirAsia’s shares in India have emerged. The AirAsia Group officially announced on
October 8, 2021, “"AirAsia is no longer an airline, but an upgraded one-stop travel
platform". The diversified airasia.com will not only continue to sell all tickets, but
will also use its 75 million users and more than 15 product lines to build a digital
ecological platform to provide a full range of travel products and services (Kaur,
2021).

This strategy uses cross-business cooperation to create AirAsia's digital advantages,

consolidating related activities of independent businesses into a single business,
reducing costs. The corporate mission of "everyone can fly" and the vision of "making
travel cheap, simple, convenient and fun" have been realized.

2.6 Retrenchment -- ZARA

ZARA is a subsidiary of Inditex Group established in Spain in 1975. It is not only a
clothing brand but also a chain retail brand specializing in ZARA brand clothing
(Shabir, 2021).

The global epidemic broke out and international fast fashion brands with businesses
all over the world were hit hard. The core of many companies to cope with the
negative impact is to maintain cash flow and cut costs. ZARA has adopted measures
such as layoffs and store closures to reduce the negative impact of the epidemic
("Bloomberg - Are you a robot?", 2021). During the epidemic, ZARA has closed
3,785 stores in 39 countries and regions around the world, and laid off approximately
25,000 store employees in Spain (Shabiri, 2021).

The strategy of retrenchment strategy adopted by ZARA embodies the vision of

"sustainable development". Closing some stores and turning them into online sales
cuts costs while also making it easier for customers staying at home in the epidemic.
It embodies the mission of "give customers what they want and get it to them faster
than anyone else"

PART B

1. Introduction
Part b determines and discusses two suitable strategies by formulating Top Glove’s
internal factor evaluation matrix, external factor evaluation matrix and SWOT
analysis matrix, as well as the production of a quantitative strategic planning matrix.

2. Internal factor evaluation (IFE) matrix

The approach of the IFE matrix is to find the key factors affecting the future
development of the company from two aspects: advantages and disadvantages (David,
2013). The following is the IFE matrix of top glove companies：

Internal Environment factors Weight Rating Weighted

Score
Strength
1 Strategic location 0.10 4 0.40
2 Occupy 25% of the global market 0.15 3 0.45
share
3 Efficient production technology 0.10 3 0.30
4 Low cost 0.10 4 0.40
5 Good customer service 0.05 3 0.15
Weakness
1 Employee dormitory collectively 0.10 1 0.10
infected with covid-19
2 Low control efficiency 0.15 2 0.30
3 Lack of consortium support 0.10 2 0.20
4 Decline in employee performance 0.15 1 0.15
Total 1.0 2.45

The company's main advantage lies in its geographical advantage is that it is

located close to the rubber plantation park, so the cost is greatly reduced; the
company's main weakness is that the imbalance of fixed wage workload leads to
uneven work distribution among workers, which leads to a decline in employee
performance. The total weighted score of 2.45 indicates that the company's overall
internal strength is below average (2.50).

3. External factor evaluation (EFE) matrix

The EFE matrix method is to find the key factors that affect the company's future
development from two aspects: opportunities and threats (David, 2013). The
following is the EFE matrix of top glove companies:

External Environment factors Weight Rating Weighted

Score
Opportunities
1 Increased demand 0.20 4 0.80
2 Brand awareness 0.10 1 0.10
3 Government support 0.15 3 0.45
4 The rise of online sales channels 0.10 2 0.20
Threats
1 Competitors build new factories 0.15 3 0.45
2 In short supply 0.10 1 0.10
3 The instability of covid-19 0.10 2 0.20
4 New alternative products appear 0.10 4 0.40
Total 1.0 2.70

The above table can be analyzed, Top Glove has responded to existing
opportunities and threats in the entire industry, and has more effectively used existing
opportunities to resist the adverse effects of some external threats. 2.70 is higher than
the average score of 2.5, indicating that the company has huge market potential to
avoid risks.
4. SWOT analysis matrix
SWOT draws a series of decision-making conclusions through matching analysis of
the company's main strengths, weakness, opportunities and threats ("What is SWOT
Analysis?", 2021) .The following is Top glove's SWOT analysis matrix :

Strengths: Weakness:
1) The world's largest 1) Product technology
glove manufacturer； research and development
2) Have the largest glove is not outstanding in the
market share； industry；
3) Good product quality 2) The profit margin has
and reputation； been in the single digits for
4) Substitution in the glove the past 5 years.
industry is very low.
Opportunities: S-O Strategy/Analysis W-O Strategy/Analysis
1) Increased demand for 1）Use brand advantage to 1) Strengthen enterprise
gloves； increase repeat product research and
2) High potential for future customers； development technology;
development; 2) Give full play to the 2) Open up a broad
3) Malaysian government's best advantages of product market,including overseas;
policy to promote rubber quality to meet the needs 3) Increasing demand for
products. of consumers ； gloves promotes rising

3) Government support to profit margins.

increase the international
influence.
Threats: S-T Strategy/Analysis W-T Strategy Analysis
1) Increasing companies in 1) Give full play to its 1) Reduce costs from
the glove industry； global position among transportation, suppliers,
2) Competitive pressure； many competitors and etc., and invest in product
Thailand is also one of the demonstrate a strong brand research and development
largest rubber growing effect； technology；
countries； 2) Prepare budgets in 2) Add other similar
3) The increase in advance and conduct retail products to highlight
production capacity may price surveys to avoid corporate advantages；
lead to a price war. corporate risks. 3) Enhance employee
retention and avoid
unnecessary employee
costs.

5. The Quantitative Strategic Planning Matrix- QSPM Matrix

--Not Attractive 1
--Highly Attractive 4
Table 5.1:
Key Factors Weight Market Penetration Add other
in the World similar products
AS TAS AS TAS
External Factors
Opportunities
1 Increased demand 0.20 4 0.80 4 0.80
2 Brand awareness 0.10 4 0.40 2 0.20
3 Government support 0.15 4 0.60 2 0.30

Threats
1 Competitors build new 0.15 3 0.45 4 0.60
factories
2 In short supply 0.10 0 0 1 0.10
3 The instability of covid- 0.10 3 0.30 0 0
19

Internal Factors
Strengths
1 Strategic location 0.10 4 0.40 2 0.20
 2 Occupy 25% of the 0.15 4 0.60 2 0.30
global market share
3 Efficient production 0.10 3 0.30 2 0.20
technology
4 Low cost 0.10 0 0 2 0.20
5 Good customer service 0.05 4 0.20 0 0

Weakness
1 Employee dormitory 0.10 3 0.30 0 0
collectively infected
with covid-19
2 Low control efficiency 0.15 0 0 0 0
3 Lack of consortium 0.10 0 0 4 0.40
support
Total 4.35 3.30
It can be seen from the above figure that 4.35>3.30, so enhancing market
penetration in the national market has a more far-reaching impact and greater value
than opening up other businesses. After the market has entered a mature period, the
relative competitive position among enterprises has basically stabilized,. Top Glove
can use the market penetration strategy to expand sales volume and share in the
international market, and further enhance its international competitive position.

Table 5.2:

Key Factors Weight Investment product Improve employee

development retention

technology
AS TAS AS TAS
External Factors
Opportunities
1 Increased demand 0.20 3 0.60 2 0.40
2 Brand awareness 0.10 0 0 2 0.20
3 Government support 0.15 0 0 2 0.30

Threats
 1 Competitors build new 0.15 3 0.45 3 0.45
factories
2 In short supply 0.10 4 0.40 4 0.40
3 The instability of covid- 0.10 4 0.40 4 0.40
19

Internal Factors
Strengths
1 Strategic location 0.10 0 0 0 0
2 Occupy 25% of the 0.15 0 0 0 0
global market share
3 Efficient production 0.10 3 0.30 1 0.10
technology
4 Low cost 0.10 0 0 1 0.10
5 Good customer service 0.05 0 0 3 0.15

Weakness
1 Employee dormitory 0.10 0 0 4 0.40
collectively infected
with covid-19
2 Low control efficiency 0.15 3 0.45 2 0.30
3 Lack of consortium 0.10 2 0.20 2 0.20
support
Total 2.80 3.40

From the above table, it can be concluded that 3.40>2.80, so increasing the
employee retention rate is better than investing in product research and development.
Increasing employee retention can not only save costs, but also enhance Top Glove’s
attractiveness to existing and potential employees, thereby enhancing corporate
cohesion.

6. Conclusion
The significance of the strategic management of an enterprise to the direction of the
enterprise's development. A person has great ambitions. At present, competition in the
international market is undergoing drastic changes. If an enterprise wants to further
develop and grow, it is an indispensable task to predict and evaluate the future form
and formulate a long-term strategic plan.

7. Reference
Bogari, N., & Al-Dehlawi, S. (2021). Strategies for Vaccination: Conventional
Vaccine Approaches Versus New-Generation Strategies in Combination with
Adjuvants. Pharmaceutics, 13(2), 140. doi: 10.3390/pharmaceutics13020140

David, F. (2013). Strategic Management. Old Tappan: Pearson Education UK.

Hilton CEO Discusses Impact of COVID-19, Plans for Future. (2021). Retrieved from
https://www.travelpulse.com/news/hotels-and-resorts/hilton-ceo-discusses-impact-of-
covid-19-plans-for-future.html

Home | Tencent Careers. (2021). Retrieved from https://careers.tencent.com/m/en-

us/home.html

Kaur, D. (2021). How AirAsia pivoted its airline business to survive a pandemic.
Retrieved from https://techwireasia.com/2021/02/heres-how-airasia-pivoted-its-
airline-business-to-survive-the-pandemic/

Kee, D., Lee, J., Lee, Y., Lim, P., Loh, Y., & Hoe, Y. (2021). How Top Glove
Becomes the Largest Glove Producer. Journal Of The Community Development In
Asia, 4(2), 1-12. doi: 10.32535/jcda.v4i2.1077
Shabir, S., & AlBishri, N. (2021). Sustainable Retailing Performance of Zara during
COVID-19 Pandemic.

Bloomberg - Are you a robot?. (2021). Retrieved from

https://www.bloomberg.com/opinion/articles/2020-06-10/zara-s-online-shopping-
strategy-could-be-a-hit

Shen, D. (2021). Analysis on Marketing Strategies of Tencent Games—Take Honor

of Kings as an Example. E3S Web Of Conferences, 235, 03028. doi:
10.1051/e3sconf/202123503028

What is SWOT Analysis?. (2021). Retrieved from https://www.visual-

paradigm.com/guide/strategic-analysis/what-is-swot-analysis/