MAF661 TUTORIAL TOPIC 1 & 2

Group
Presentation
Presented By Group 3

Prepared for: Madam Siti Jeslyn Binti Hasan

 QUESTION 1
Smart Books Distributor (SBD)
QUESTION 1 A

A) Given the many

challenges and opportunities
in the industry, SBD must
have good strategic
management to remain
competitive. Briefly explain
the four (4) key attributes of
strategic management.
ANSWER
i) Directs the organization
toward overall goals and
objectives
Effort must be directed at what
is best for the total
organization instead of just a
single functional area.
Example: SBD operations may
decide to schedule long
production runs of similar
products to lower unit costs
but for marketing department,
it is appeal to a demanding
target market.
ii) Includes multiple
stakeholders in decision
making
Multiple Stakeholders: Encik
Fahmin (CEO), top management,
client, employee, customer,
supplier.
Any decision made by the
company in the future will have an
influence on the stakeholders.
Stakeholders' perspectives need
to be considered in order for the
decision implementation to be
successful.
Example: SBD needs to consider
the point of view of all parties in
the organization to avoid negative
effects on the company.

ANSWER

iii) Needs to incorporate short- iv) Recognizes trade-offs

term and long-term between efficiency and
perspectives. effectiveness
Managers must maintain both a Managers need to recognize the
vision for the organization’s future difference between “doing the
and a focus on its current right thing” (effectiveness) and
operational needs. Therefore, “doing things right” (efficiency)
SBD needs to consider decision based on the organization
making in the short term period needs.
and in the long term period as to
keep the company survive in the Example: SBD must wisely
industry. allocate and use resources
while simultaneously focusing
Example: Downsizing the their efforts on achieving overall
employees may assist to reduce organizational objectives.
costs and increase profits in the
short term, however the If managers only focused on the
consequences for employee short-term and efficiency, the
morale and customer effectiveness of the
relationships may be suffered in organization’s long-term goals
the long-term. may fall short.

QUESTION 1 B

B) Do you think a vision

statement is an instrumental
force for SBD to excel in
business or can SBD still
excel without a vision
statement? Support your
answer with one (1) reason.

ANSWER

SBD’s vision:
To be the nation's premier book and magazine
distributor’ reflecting its values and
aspiration

Yes, vision statement is an instrumental force for SBD to excel in

business.
Vision statement is a benchmark that give inspiration to the
company.
When SBD have a clear vision, the organization will have excellent
performance of their bookstore in the country and easy to achieve
their goals.
SBD can be a forward-looking company and growth in every
community.
SBD also must plan to implement their vision statement in advance
and prioritize the company’s resources.

QUESTION 1 C

C) Discuss in detail the

possible favorable impact of
the following segments of
the general environment on
SBD's vision to be the
nation's premier book and
magazine distributor through
its new SBD.com initiative.

ANSWER
i. Technological Segment
The opportunity to have another
initiative to sell books via online on
their website SBD.com will give
favorable impact to the
environment on SBD’ vision which
are the books can be access
worldwide and provide
convenience to customers as they
do not have to queue at the
bookstore to buy the books
anymore. Besides, it can minimize
the usage of papers thus lead to
decreasing pollution. It will also
help them to save money because
they will no longer be obligated to
pay their utility bills, shop rent, or
other physical store expenditures.
ii. Sociocultural Segment
Sociocultural forces influence the
values, beliefs, and lifestyles of a
society. SBD believes by
launching a new website
SBD.com, it will help to cultivate a
new norm for people to love to
read book. Online books is easy to
access as they can use their
mobile phone or ipad without need
to withdraw any cash. As a result
of the new norm, the country will
be able to produce intellectual new
generations.
QUESTION 1 D

D) Discuss three (3) entry

barriers that may pose
problems for SBD.com as a
new entrant to compete with
eBook.com.

 ANSWER
i) Economies of Scale
Economies of scale make it hard
for new entrants like SBD to
compete with incumbents
eBook.com especially on price.
SBD will face several risks when
they establish their business as an
online bookstore, including the
necessity to bear a high cost per
item. As newcomers, they may not
be able to give customers a lesser
price compared to existing online
bookstores. If SBD tries to cut its
pricing, it will be at a disadvantage
and result in a loss.
ii) Product Differentiation
As a newcomers, SBD will have a
problem to dedicate loyal
customers. They have to advertise
their business and compete with
established businesses to promote
their book sales. Therefore, it will
encounter a number of challenges,
including gaining customer
attention. For example, SBD might
lose some existing customer when
they change to e-book due to
some customers may prefer
physical books rather than virtual
one. Thus, SBD must create a
unique product and offer a variety
of attractive services that will
appeal to consumers in order to
gain customers.
iii) Switching Costs
SBD will face a significant amount
of switching costs due to the
transition. Making a new website
requires a number of actions,
including hiring a web designer
and a web developer, as well as
ensuring the website's privacy and
security are safe. A new marketing
cost will be required since they
need to spread awareness about
SBD's new website. Sometimes,
some social platforms such as
Facebook, may request an
additional charge if SBD wish to
advertise their online e-books to
the society.
QUESTION 1 E

E) Do you think that SBD

should continue with Encik
Fahmin’s suggestion to
change its business strategy
in order to remain as the
market leader in the book
and magazine distribution
industry in Malaysia.

ANSWER

Yes, I think that SBD should continue with Encik Fahmin’s suggestion to
change its business strategy in order to remain as the market leader in
the book and magazine distribution industry in Malaysia. SBD would
benefit greatly from the use of e-book technology in terms of reduced
storage and delivery costs. Moreover, selling e-books can assist to
conserve the environment because no trees are chopped down to
produce the books. E-books also make it easier for people to get
information as there are wider internet access. As we know, nowadays
Malaysia are having a 5G coverage. This coverage has advantages
since it supports the latest wireless technology, which may assist
company owners in ensuring that their website is accessible to all of
their customers.

However, not everyone prefer to read books via online thus i would
recommend for SBD to continue selling their physical books. Some
people are not familiar with technologies and more satisfied to use
physical books when gaining information. As myself is a person who
loves to read books, physical books gives more satisfaction and
happiness to me when i read the books.
 QUESTION 2
Sejahtera Edar Enterprise
QUESTION 2 A

A) Do you think Azzam should

have analyzed the external
environment first before he
started Sejahtera Minda
Buku? Support your answer
with three (3) reasons.

ANSWER

Yes, I think that Azzam should have analyzed the external

environment first before he started to open new bookstore
which is Sejahtera Minda Buku. This is because he will
discover the advancement of technology and its reducing
costs has changed the way teachers and students learn.

By analyzing these changes, he would not order large

quantities of stocks of workbooks that can cause loss for
him as the sales dropped tremendously. As a result, by
focusing on the external environment, such as
environmental scanning, environmental monitoring, and
competitive intelligence, Azzam will be able to maintain a
competitive advantage. .
 ANSWER

Azzam should then conduct

Firstly, Azzam should start by Finally, Azzam should perform
environmental monitoring to track
scanning the environment of his competitive intelligence to have a
evolution of environmental trends.
newbookstore, Sejahtera Minda deeper understanding of the book
Azzam was able to stream of
Buku. This is crucial for Azam to industry and to identify the
trends in his town, as well as the
forecast the environmental strengths and weaknesses of his
sequences of measurable events,
changes that will occur in his town competitors. Furthermore,
by doing so. Then, if he opens a
in order to suit the requirements competitive intelligence helps
new bookshop in his town, he will
and interest of his consumers. businesses in avoiding unforeseen
be able to select the trends to be
From this action, Azzam was able surprises and reducing the
observed as well as evaluate the
to determine early on that just response time. As a result, Azzam
impacts of the trends. For
15% of the people in the area had would not be surprised if he
example, by watching the trends in
formed a reading habit, and that discovered through a local survey
his area, Azzam can discover that
90% of them preferred to read on reading culture in his area then
the younger generation who are
books in Malay. This will enable he might be able to improve his
IT-savvy prefers to watch
Azzam to be more proactive in his bookstore by analyzing his own
television, play computer games,
environmental efforts before competitive intelligence.
or simply spend time surfing the
deciding to open a new bookstore
internet, and he will change his
in order to better serve his
strategy to cater to their interests
customers in town.
and needs.
QUESTION 2 B

B) Explain the way

demographic and
sociocultural analysis can
help Azzam in operating his
new business, Sejahtera
Minda Buku.

ANSWER

General environment is composed of factors that can have

dramatic effects on firm strategy.
One of the factors is demographic. In demographics, it includes
the elements of aging population, rising or declining affluence,
disparities in income level and the changes in ethnic
composition. In this case, by using demographic analysis,
Azzam could analyse the aging population in his town in order to
know what types of books he can put up in his store based on
the aging population in that area. In fact, the disparities in
income level is also important to be analysed as it can help him
come out with the strategic control of the price of the books.
Thus, it is important for Azzam to know the rising level of
affluence in that area, so that he will not repeat the same
mistakes by selling the books at the lower price. Next, Azzam
can use demographic analysis to analyse the ethnic composition
in his town to predict what consumers need and want. For
example, if most of the population speaks and reads in Malay
then he can prioritize books in Malay to be sold in his store.
ANSWER

As for sociocultural analysis, Azzam has to understand the

sociocultural in his town such as the values, beliefs and lifestyles of
people there. For example, Azzam can use this analysis to analyse
the lifestyles of people in his town. If people in his town have greater
concern about diets and physical fitness, then Azzam can put up
books about health and food at his store as it will increase the need
for knowledge for people in his town to know how to live in a healthy
way. Furthermore, if most of the people in his town is Muslim, then he
can choose Islamic books as one of the stocks to sell such as prayer
book, iqra and so on[NS1] . As in this case, it states that 90% prefer to
read in Malay compared to English, so it is much better for Azzam to
stock Malay books more than English books in his store. Besides, it
shows that only 15% of the people have reading habits, so for this
case Azzam should find a way to cultivate the reading habit among
people in his town. For example, he can create a program like the
NILAM reading programme and award them with the prizes.
QUESTION 2 C

C) Do you think it is wise of

Azzam not to have a vision
and a mission for Sejahtera
Minda Buku since he is a sole
proprietor and not a large
company? Support your
answer with three (3)
reasons.

 ANSWER

I think it is not wise for Azzam to not have a vision and a mission for Sejahtera Minda Buku, his new bookstore since it is
a sole proprietor and not a large company. I have three reasons why is it not wise for Azzam’s Sejahtera Minda Buku.

Firstly, vision and mission are Next, vision and mission also Lastly, the third reason is
really important in strategic important for the coherence in vision and mission are play a
management, which are two strategic direction. Coherence very crucial role in a company.
important things in an in strategic direction is This is because every
organization or business. organizations express company no matter how big or
Strategic management is the priorities best through stated small the company must have
analyses, decisions and goals and objectives that form their own purpose of being
actions an organization a hierarchy of goals. With the establish as a company. By
undertakes in order to create hierarchy of goals, the having a clear purpose, it will
and sustain competitive organization's strategic drive the owner action to strive
advantages. So, from this case direction will be driven by it. the business toward achieving
study, Azzam should have a From this case study, Azzam’s their company purpose that is
clear vision and mission for Sejahtera Minda Buku should being visualized in their vision
Azzam’s Sejahtera Minda always focus their direction in and mission. From this case
Buku because it will make accordance to their goals and study, Azzam do not learn
Azzam always fail to excel in should organize strategic from his past mistake and now
strategic management. planning to overcome the he looks like a little bit lost
obstacle in the business. because he is not yet to set a
clear vision and mission for his
company.
QUESTION 2 D

D) Discuss the impact of the

threat of substitute products
on the sales of Sejahtera
Minda Buku

ANSWER

The impact of the threat of substitute products on the sales can limit the
potential returns of Sejahtera Minda Buku especially when the performance of
the substitute products are more attractive and efficient. In this threat, the
substitutes can come from another industry with the same function as what
Sejahtera Minda Buku offered. For Sejahtera Minda Buku, the threat that they
face is the advancement of technology. As for now, many people prefer to use
technology as their main sources such as tablets and laptops as it is easy to
use and more efficient with more options to choose from. The effect that arises
from this is that the use of books and paper is declining and the use of
technology is increasing. Furthermore, the current trends also become the main
factor of the substitution of the book industry with technology industry which has
led to the changes in taste of the consumers. By using the advancement of
technology nowadays, people can get anything by going through the internet to
get any information they need. Because of that, the more substitutes, the more
competitive the market will be. So for Sejahtera Minda Buku to stay in the
industry, they have to come up with the strategic price control and ensure the
quality of its products is always in a high quality so that they can satisfy the
customers' needs as it can help the business to remain relevant in the industry.
 GROUP 3 AC2206C

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