CONFIDENTIAL 20222 JUN/OPM770

FACULTY OF BUSINESS AND MANAGEMENT

MIDTERM TEST

COURSE : OPERATIONS MANAGEMENT

COURSE CODE : OPM770
TEST 1 : JUN 2022
TIME : 2 HOURS

PLATFORM : UFUTURE / GOOGLE FORM

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of (1) case studies.

2. Answer ALL questions. Start each answer on a new page.

3. Answer ALL questions in English.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 4 printed pages
CASE STUDY 1: MANAGING GLOBAL SUPPLY CHAIN TO DIFFERENT SEGMENT
IN HELLO KITTY

Hello Kitty is an idea based on a cartoon character of a small cat that looks kind and
cute, with a button nose, two black dot-eyes, six whiskers, and a ribbon or flower in its
hair. The cat has no mouth, and this represents a major source of emotional association
for buyers, as they can project many different feelings onto the little cat. The owner and
the cat can be happy, sad, thoughtful or any other feelings they want to feel together.
Hello Kitty is actually 25 years old but has perpetual youth.

For Japanese company Sanrio Co, a stationery producer, she has become a major
brand success, multiplying profits in the financial year ended March 31, 1998 by thirteen

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times-during a recession. Adored by many demographic segments of the market, Hello

Kitty's main target audience, as expected, is children, but Sanrio says it has now
successfully extended the brand to teenage women from above 20 years.

Hello Kitty has become an icon with global appeal. As the girls, who first bought her
when they were young, grow older, they nostalgically buy Hello Kitty products as
adults. There are Hello Kitty tea sets, toasters, mobile telephone cases, erasers,
motorcycles, mouse pads, spectacles, and other products. For bedtime, there are Hello
Kitty pajamas and bedsheets. The company apparently adds 600 new products a month
to the 15,000 items or so already available. Hello Kitty has taken Asia by storm, and has
over 40 stores in the U.S. with subsidiaries in Brazil and Germany.

Sanrio runs Hello Kitty cafes in Japan, and has started to franchise theme restaurants,
the first of which is Maxim's Caterers Ltd in Hong Kong, with more to follow. Franchises
in Seoul and Taipei are also on the horizon. Apart from these brand extensions, Sanrio
intends to introduce new cartoon characters including a hamster and a rabbit.
Financially, the brand has been phenomenally profitable, even during the recession.
Recently the brand has become a target for co-branding, but in some cases, such as
the cobranding exercise with McDonalds in Singapore - Hello Kitty eclipsed the brand
partner, with thousands of people buying burgers and then throwing them away but
keeping the Hello Kitty promotional items. With the pandemic of COVID19 still possess
a threat to the global business, assist Hello Kitty in solving their problems by answering
the questions below.

Questions
(a) Explain factors that can be considered as threat to Hello Kitty based on the
above case. [25 marks]

Answer

In my opinion, based on the above case, factors can be threat to hello kitty are:

1) New Entrants Competitor

 As the industry have high profits, many new entrants will try to enter into the
market. However, the new entrants will eventually cause decrease in overall
industry profits. Therefore, it is necessary to block the new entrants in the
industry.
 Following are some of barrier to the new entrants. Copy rights and patents,
Customer loyalty to established brands.

2) Threat Of Substitutes

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
This describes the threat to company. If the goods are not up to the standard,
consumers can use substitutes and alternatives that do not need any extra effort
and do not make a major difference
 Example, there has many same product cartoon theme like hello kitty in market,
so let say other product can offer better quality and price because of the good
management in operation to control supply of good material and can reduce cost
and price. So it possible to be threat to hello kitty.
 The potential factors that made customer shift to substitutes are as follows, Price
performance of substitute, Reduction of quality and switching cost of buyers.
 For now sale for the original product of Hello Kitty also drop, this maybe because
of many new substitute product in the market. Hello kitty product customer is
from the childhood that has a nostalgia.
3) Degree Of Industry Rivalry
 The lesser money and resources are required to enter into any industry, the higher
there will be new competitors and be an effective competitor. It will also weaken
the company’s position.
 Potential factors that will influence the company’s competition are Continuous
innovation, Level of advertising and Competitive strategy.
4) Bargaining Power Of Suppliers
 This refers to the supplier’s ability of increasing and decreasing prices. If there are
few alternatives of supplier available, this will threat the company and it would
have to purchase its raw material in supplier’s terms. However, if there are many
suppliers’ alternative, suppliers have low bargaining power and company do not
have to face high switching cost. That why supply chain is important.
 The potential factors that effects bargaining power of suppliers are the following.
Impact of cost on differentiation, Strength of distribution centre and Input
substitute’s availability.
5) Bargaining Power Of Buyers
 It deals with the ability of customers to take down the prices. It mainly consists
the importance of a customer and the level of cost if a customer will switch from
one product to another
 The buyer power is high if there are too many alternatives available. And the
buyer power is low if there are lesser options of alternatives and switching

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 Following factors will influence the buying power of customers. Bargaining

leverage, Switching cost of a buyer, Buyer price sensitivity and Competitive
advantage of company’s product

(b) Explain the major strengths that Hello Kitty has to support its expansion plan to
growth worldwide with regards to operations management. [25 marks]
Answer
In my opinion, the major strengths that Hello Kitty has to support its expansion plan to
growth worldwide with regards to operations management are:
1) Target Market
 Initially this company target children as a potential market. However because of
the good operation management under the design of goods and services. This
company successful to create this product as a nostalgia product that make this
product demand durable in long times. As we know when our target market are
focussing in children stage, this product will become a nostalgia, so when the
children growth there still will know the product, because of that this product still
have a demand for teenager’s stage. This can be seen in MILO product.as a result
Hello Kitty has strong fan base and loyal customers.
2) Product Innovation
 While the hello kitty demand growth, the operation management team of
organisation implement product innovation with producing new product
apparently adds 600 new products a month to the 15,000 items such as Hello
Kitty tea sets, toasters, mobile telephone cases, erasers, motorcycles, mouse pads,
spectacles, and other products. For bedtime, there are Hello Kitty pyjamas and
bedsheets. Because of that the operation managers must have certain skill like
great planning abilities and good common sense.
3) Good supply chain.
 Supply chain also one of the important in the organization or business. Once the
hello kitty growth and expend to worldwide, they must have a good supply chain
to ensure their supply and price can be controlled. With the opening Hello Kitty
café also make the operation management become important.
 By this supply chain company also can identify the operation flow, so can
minimize wastage and cost efficiency.
 Price also can be manage by the organisation through the supply change.

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4) Good Product Strategy and Quality Control

 Hello kitty also has good product strategies such as
 Differentiation: They make their product unique, we can see based on the
above case study .The cat has no mouth, and this represents a major source
of emotional association for buyers, as they can project many different
feelings onto the little cat. The owner and the cat can be happy, sad, and
thoughtful or any other feelings they want to feel together.
 Rapid response: Once their target customer become teenager’s Hell kitty
rapidly produce new product such as Hello Kitty pyjamas and bedsheets.
 One of the reason why our product have loyal customer and fan are
because of our quality product. Hello kitty successful because of the
product has a quality. Because of that their product not only success in
japan but also can penetrate US market. This reason also can be support
while Hello kitty has become a target for co-branding. Hello Kitty eclipsed
the brand partner, with thousands of people buying burgers and then
throwing them away but keeping the Hello Kitty promotional items.

5) Good Branding
 Based on the above case study, we can conclude that hello kitty has good
branding and well known not only at japan but also global such as united states. It
also opening café with hello kitty theme starting in Japan then opening their
franchise to Hong Kong, Korea and Taipei.
 With their good branding also make many company want to collaborate. For
example McDonald collaborate with Hello kitty. The result show Hello Kitty
eclipsed the brand partner, with thousands of people buying burgers and then
throwing them away but keeping the Hello Kitty promotional items.

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 CONFIDENTIAL 20222 JUN/OPM770

FACULTY OF BUSINESS AND MANAGEMENT

MIDTERM TEST

COURSE : OPERATIONS MANAGEMENT

COURSE CODE : OPM770
TEST 1 : JUN 2022
TIME : 2 HOURS

PLATFORM : UFUTURE / GOOGLE FORM

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of (1) case studies.

2. Answer ALL questions. Start each answer on a new page.

3. Answer ALL questions in English.

NAME: Muhammad Zulhilmi Bin Sahabudin

STUDENT ID: 2021404362

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 4 printed pages

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CASE STUDY 2: QUCIK RESPONSE IN FASHION INDUSTRIES

As a teenager Surin always had been fond of fashion industries. She remembered
reading all the fashion magazines to look at the fabulous fashions made by various
designers all over the world. She also made sure to know all the various stories behind
the successful of a fashion group companies or what made certain fashion items failed
to captured the market despite their quality products so when she had been offered a
position in one of the popular fashion group companies, Surin is in dilemma.

She has been invited to join the board of the troubled Marlow Fashion Group as a non-
executive director, but is uncertain as to the level and nature of her contribution to the
strategic thinking of the Group. The Marlow Fashion Group had been set up by a
husband and wife team in the 1970s. They produced a comprehensive range of
women’s clothing built round the theme of style and elegance. The Group had the
necessary skills to design, manufacture and retail its product range. The Marlow brand
was quickly established and the company built up a loyal network of suppliers, workers
in the company factory and franchised retailers spread around the world.

Marlow Fashion Group’s products were able to command premium prices in the world of
fashion. Rodney and Betty Marlow ensured that their commitment to traditional values
created a strong family atmosphere in its network of partners and were reluctant to
change this. Unfortunately, changes in the market for women’s wear presented a major
threat to Marlow Fashion.

Firstly, women had become a much more active part of the workforce and demanded
smarter, more functional outfits to wear at work. Marlow Fashion’s emphasis on soft,
feminine styles became increasingly dated. Secondly, the tight control exercised by
Betty and Rodney Marlow and their commitment to control of design, manufacturing and
retailing left them vulnerable to competitors who focused on just one of these core
activities.

Thirdly, there was a reluctance by the Marlows’ and their management team to
acknowledge that a significant fall in sales and profits were as a result of a fundamental
shift in demand for women’s clothing. Finally, the share price of the company fell
dramatically. Betty and Rodney Marlow retained a significant minority ownership stake,
but the company had had a new Chief Executive Officer every year since the last ten
years. If Surin accept the offer, she need to know all the details on Marlow Fashion
group especially on their synchronous supply chain before making a suggestion to help
the company in overcoming their problems.

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Questions

(a) Describe what are the operations management strategies implemented with
regards to Marlow Fashion group.
[25 marks]
Answer
Based on the above case study, in my opinion Marlow Fashion Group implemented operation
management strategies.

1) Provide Better Product and Service Management

 Product and service management is referring to what good or service do we offer
and what is the design of it. In term of Marlow Fashion Group, they have the
necessary skills to design, manufacture and retail its product range.
 In the beginning this company successful provide product that meet customer
need. This proven when The Marlow brand was quickly established.
 The problem that facing by Marlow Fashion Group are their fashion is outdated
fashion due to customer need are change from the feminine fashion to the simple
fashion. So, by offering goods or service based on customer need will make this
company survive.
 Previously this brand is successful with many franchises. But lately they have
problem with their design that not following new era. Because of that maybe this
brand can improve their design or focusing in retail only rather than commit in
design, manufacture and retail.

2) Organization supply chain management.

 In operation and supply chain management are referring either should we make
or buy what we need to produce our good or service, if we purchase it, who can
supply it.
 The supply chain is a critical piece in an organization's success. There is
significant benefit to moving or locating new facilities in countries that are close
to unique resources, such as expertise, materials, or workforce.
 In term of supply chain, Marlow Fashion Group successful create the good
supply chain, due to the company built up a loyal network of suppliers, workers
in the company factory and franchised retailers spread around the world.

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Example of supply chain

3) Learn to Improve Operation.

 Learning does not happen in isolation. It is best served when encouraging the free
flow of ideas. Customers benefit from this the most, as do the firms that actively
participate. Look for opportunities to partner or exchange one strength for
another. One country may excel at production, while your firm has excellent
inventory control. Working together on a product line may improve efficiency for
both parties.
 Marlow Fashion Group implement hiring Chief Executive Officer (CEO), it
shows that this company seriously in improving their operation. By hiring CEO
they can learn the new think.
 To get the better improve operation, maybe Marlow Fashion Group can
collaborate with other brand also, this is because fashion has always been about
looking forward and never being stuck behind. By combining existing brand
vision, collaboration have sought to offer fresh perspectives for brand supporters
as well as evoke a sense of curiosity and uncertainty of what’s to come.
 Example of successful collaboration is Balmain Collab with H&M. As a result,
H&M reaches people who would willing to pay more for luxury brand.

4) Human Resources and Job hiring

 Human Resource are important in the organization, HR are in charge of arranging
interviews, coordinating hiring efforts and onboarding new employees.
 In term of HR and Job Hiring, Marlow Fashion Group successful in job hiring or
recruited, this is due to they are necessarily have highly skills workers to design,
manufacture and retail its product range. They also successful in create loyal
workers.

5) Premium Price/ Good product Quality

 In operation management strategies, one of the strategies are penetrate market
and be the price setter. In term of Marlow Fashion Group, the successful as
premium price fashion product. It proven when in the above case study said
Marlow Fashion Group’s products were able to command premium prices in the
world of fashion.

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 This premium price must come with a good product quality, in this case, Marlow
Fashion Group product must have quality control as in operation management.

(b) As halal industries keep growing with the estimated sales from various industries
up to USD 1 trillion, do you think Marlow Fashion Group need to join the
bandwagon? Provide three (3) reasons for Marlow Fashion Group about the need
to apply for halal certificate in their fashion items. [25 marks].

Answer

In my opinion, since Marlow Fashion Group has many franchise in global it good for them to
join the halal certificate. Halal certificate can categories as a bandwagon. Bandwagon is the
tendency of people to follow an opinion or buy a product because it has majority support or
because it is popular. Halal is an Arabic word used to indicate something to be lawful, legitimate,
and legal. Nowadays almost country have their own halal certification such as United Kingdom
also has their own Halal Certificate Europe. The Reason for Marlow Fashion Group to apply for
halal certificate in their fashion items are:

1) To Increase Sales Value and Public Awareness

 Instead of Marlow Fashion Group sale has been drop due to changes of customer
need and demand. With the halal certificate, Marlow Fashion Group can
penetrate new market that focusing in country that consent regarding halal
certificate.
 Halal certificate also make Marlow Fashion Group different from other fashion
product that make their product become unique than other.
 Then Marlow Fashion Group market also will growth in market share of the
Islamic economic due to the halal certificate.

2) Increase Product Quality

 With halal certificate, quality of product will
become more quality. To get the halal certification
they have some term that need to fulfill. Start from
the input, process until their end product to the

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consumer. That mean all supply chain must be amend to fulfil halal certificate
term as show.
 One of the important elements in the business word is providing value to
customers which does not only include objects that are tangible but also objects
that are intangible, that is including packaging, brand name as well as
performance quality. Customer’s satisfaction and value is thus linked to a
product’s quality which has a significant impact towards product. So once
product quality is good, customer will satisfy and create loyal customer.
3) National & International Acceptance
 Halal certification not only acceptance by Muslim consumer only. Non-Muslim
also accept halal certification. Market acceptance on halal food could be due to
several determinants. It is believed that consumers accepted a product when they
have the intention to use, have used the product and continue using it. Consumers
respond positively and accept products with high quality.
 With the halal certificate, organization can get huge demand of consumer on
both, non-Muslim and also Muslim.
 In international also have their own body that are Halal International Certification
Icc. Many of country have halal certificate. The consumers of the Halal (namely,
“licit”) certified products/services keep soaring. In Europe, there are about 25
million consumers, in France about 6 million, in Germany more than 4 million
and in Italy over 2 million.

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END OF QUESTION PAPER

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