FACULTY OF BUSINESS AND ACCOUNTANCY

NOV 2023 SEMESTER – SESSION 3/23/34

PMS 3393 STRATEGIC MANAGEMENT

ASSIGNMENT 2
QUESTION:
You must use the same company from your Assignment 1. You are required to do the external
and internal analysis of the company, and further recommend strategies.
(90 marks)
RUBRIC:

CONTENT FULL
MARKS
MARKS

1 THE INTERNAL AUDIT (CHAPTER 6) - CLO 2

i. Financial Studies
Income statement 3
Balance sheet 3
Ratio: calculation 6
Ratio: calculation - conclusion 4
ii. Internal Factors Evaluation (IFE) Matrix
IFE Table 6
2 Conclusions (2m x 2 conclusions) 4

2 THE EXTERNAL AUDIT (CHAPTER 7) – CLO 2

i. Competitive Profile Matrix (CPM)

Table 6
Conclusion 4
ii. External Factors Evaluation (EFE)
 Matrix
Table 6
2 Conclusions (2m x 2 conclusions) 4

iii. Porter 5 Forces (Table)

1 mark each for the correct H/L on both column 10

@ 5 forces = table 10 mark
TOTAL MARKS FOR CLO 2

3 STRATEGIC GENERATION AND SELECTION

(CHAPTER 8) – CLO 3
i. SWOT Matrix Analysis
2 SO strategies (1m x 2 strategies) 2
2 WO strategies (1m x 2 strategies) 2
2 ST strategies (1m x 2 strategies) 2
2 WT strategies (1m x 2 strategies) 2

ii. Strategic Position and Action Evaluation

(SPACE) Matrix

Calculations FP; SP; CP & IP (1m x 4 position) 4

Graph 2
Suggestion for strategies 2

iii. BCG Matrix

Table for each quadrant (1m x 4 quadrant) 4
Conclusions @ each quadrant (1m x 4 quadrant) 4
4 STRATEGY IMPLEMENTATION (CHAPTER 9) –
CLO 3
i. Major issue and recommendations. 10

TOTAL MARKS FOR CLO 3

90
TOTAL MARKS
 Table of Contents
Content Page
1 External Studies
i. Competitive Profile Matrix (CPM)
ii. External Factors Evaluation (EFE) Matrix
iii. Porter 5 Forces (table)

2 Internal Studies
i. Financial Studies
ii. Internal Factors Evaluation (IFE) Matrix

3 Strategic Implementation and Choices

i. SWOT Analysis
ii. BCG Matrix
ii. Strategic Position and Action Evaluation (SPACE) Matrix
4 Major Issues and Recommendations

5 References
1.THE INTERNAL AUDIT (CHAPTER 6) - CLO 2
i. Financial Studies
ii. Internal Factors Evaluation (IFE) Matrix
Ife

Factor Weight Rating Score (Weight x

Rating)

Strength

Strong brand 0.10 2 0.20

recognition and
market position
Exclusive access to 0.15 1 0.15
popular and high-
quality content

Established 0.10 4 0.40

infrastructure and
distribution networks

Potential to enhance 0.20 2 0.40

content offerings and
reach

Opportunity to 0.30 1 0.30

innovate and improve
user experience

Weakness
Relatively slower 0.10 1 0.10
adoption compared to
competitors

High production costs 0.20 1 0.20

and content
acquisition expenses

Limited understanding 0.15 2 0.30

of local market
dynamics

Challenges in 0.20 2 0.40

negotiation and
alignment with
partners

Limited resources for 0.30 1 0.30

research and
development

2.75
Total Score

Based on the IFE matrix scoring of 2.75, it's evident that Astro Sdn Bhd faces significant
challenges in its internal environment, despite having some notable strengths. Here are the key
conclusions
 Ratios

Liquidity Ratios

· Current Ratio – 0.749

· Quick Ratio – 0.739

Leverage Ratios

· Debt-to-Total Assets Ratio – 34.9%

Activity Ratios

· Inventory Turnover – 212.449

· Fixed Assets Turnover – 1.097

· Total Assets Turnover – 0.784

· Average Collection Period – 63 days

Profitability Ratios

· Gross Profit Margin – 0.341

· Operating Profit Margin – 0.141

· Net Profit Margin – 0.1103

· ROA - 0.087

· ROE - 0.999

Conclusion

In conclusion, ASTRO’s financial ratios show that the company has been struggling to maintain
its profitability in the face of various external and internal challenges. The company needs to
adopt effective strategies to improve its competitive position, enhance its operational efficiency,
and increase its customer loyalty and satisfaction.
2. THE EXTERNAL AUDIT (CHAPTER 7) – CLO 2

i. Competitive Profile Matrix (CPM)

Competitive Profile Matrix (CPM) for Astro Malaysia Holdings Bhd

Unfortunately, I cannot create a complete CPM for Astro Malaysia Holdings Bhd (ASTRO)
without specific details about your chosen competitors and the key factors you want to
analyze. However, I can guide you through the process and provide a template to get you
started.

Steps to Creating a CPM for ASTRO:

1. Identify Competitors: Choose your most important competitors in the Malaysian pay
television market. Consider size, market share, target audience, and product
offerings. Some potential competitors include:

○ Unifi TV
○ HyppTV
○ Netflix
○ Disney+
○ YouTube Premium

2. Define Critical Success Factors (CSFs): Identify the factors that are essential for
success in the market. These could include:

○ Brand recognition
○ Subscriber base
○ Content library and quality
○ Distribution network
○ Price competitiveness
○ Technological innovation
○ Customer service
 3. Assign Weights: Allocate weights to each CSF based on its relative importance to
success. Weights should sum to 1.0. (e.g., Brand recognition might be weighted
0.15, while Price might be 0.10)

4. Rate Competitors: Evaluate each competitor on each CSF using a scale (e.g., 1 =
weak, 4 = strong).

5. Calculate Weighted Scores: Multiply each rating by its corresponding weight and
sum the products for each competitor.

6. Analyze Results: Compare the weighted scores of ASTRO and its competitors to
identify relative strengths and weaknesses. This will help you understand where
ASTRO stands in the competitive landscape and inform strategic decision-making.

Factor Weigh Astro Astro Competitor 1 Competition Competitor Competitio

t Rating Score Rating 1 Score 2 Rating n 2 Score

Brand 0.15 4 0.60 2 0.30 3 0.45

Recognition

Subscriber 0.15 3 0.45 1 0.15 2 0.30

Base

Content 0.10 3 0.30 2 0.20 1 0.10

Library

Distribution 0.10 1 0.10 1 0.10 2 0.20

Network

Total Score 1.45 0.75 1.05

Strengths:

CONCLUSION OF CPM

Brand Recognition (0.60): Astro has a huge edge in brand recognition over both
competitors, suggesting a large consumer base and high market awareness. This may be
used to recruit new subscribers and keep current ones.
Subscriber Base (0.45): While not as important as brand awareness, Astro has a bigger
subscriber base than at least one competition, ensuring a steady foundation for revenue and
market share.

Weaknesses:

Content collection (0.30): The score indicates that Astro's content collection may not be as
broad or appealing as its competitors, thus resulting to subscriber turnover. This might be
due to a lack of fresh content, popular titles, or out-of-date offers.

Distribution Network (0.10): This low score indicates that Astro's distribution channels are
less efficient than those of rivals. This might imply addressing a limited audience or
experiencing difficulty in specific places.

Opportunities:

Improve Your material Library: Invest in obtaining unique material, creating high-quality
originals, or collaborating with other content producers to expand the diversity and
attractiveness of your services.

Expand Distribution Network: Look into new collaborations or technologies to reach a

larger audience and enhance accessibility across multiple areas or devices.

Leverage Brand Recognition: Use your strong brand image to promote new content offers,
loyalty programmes, or innovative services, enticing new members while maintaining
current ones.

Threats:

Competitor 2 (1.05): As indicated by the total score, Competitor 2 represents the most
serious threat, with the ability to capture market share due to their superior overall
performance. Analysing their individual capabilities and techniques might help you devise
countermeasures.
Changing Content Consumption Habits: The development of internet streaming services and
cord-cutting habits may damage your old pay-TV strategy. Adapting to these developments
by providing various viewing options and using internet platforms is critical.

While Astro has a great brand and a large subscriber base, its limitations in programming
and delivery leave it susceptible to competition. Focusing on these areas while using brand
recognition and market awareness will help you enhance your position and generate new
prospects for development. Remember, this is simply the beginning point. Continuously
monitor market developments, competition activity, and consumer feedback to change your
plans and preserve a competitive advantage.

ii. External Factors Evaluation (EFE) Matrix

The EFE matrix is a strategic management tool that helps identify and evaluate the opportunities
and threats facing a company. Here is an EFE matrix for ASTRO:

Factor Weight Rating Score (Weight x

Rating)

Opportunities

Growth of the online 0.15 2 0.30

video market

Increasing demand 0.15 3 0.45

for premium content

Expansion into new 0.10 0.40

markets

Partnerships with 0.10 1 0.10

other content
providers

Development of new 0.10 1 0.10

technologies

Threats 1,35

Competition from 0.15 2 0.30

online streaming
services

Cord-cutting 0.15 3 0.45

Rising content piracy 0.10 4 0.40

 Regulatory changes 0.10 2 0.20

Economic slowdown 0.10 1 0.10

Total Score 2.80

The Total Weighted Score for Astro Sdn Bhd. is 2.80 indicate that the company is doing
well since it is higher than the industry average 2.5.

TWSO = 1.35 = 0.93

TWST 1.45

Since it is smaller than 1 that means the company is less effective in capitalising on its
strengths to overcome its weaknesses.Based on the EFE matrix you previously described, where
ASTRO scored 2.80 with more threats than opportunities, we can conclude that their external
environment presents some significant challenges. Here's a breakdown of the key
conclusions.Main Threats. Competition from online streaming services: The rise of platforms
like Netflix, Disney+, and YouTube Premium is significantly impacting traditional pay TV
models.Cord-cutting. Consumers are increasingly canceling their pay TV subscriptions in favor
of online alternatives.Rising content piracy. Unauthorized access to content reduces
subscription revenue and undermines content exclusivity.

Regulatory changes. Government regulations impacting broadcasting, content

censorship, and data privacy can present hurdles.Key Opportunities are Growth of the online
video market: While online streaming poses a threat, ASTRO can leverage this growing market
by expanding its own online offerings.Increasing demand for premium content. Investing in
high-quality, exclusive content can attract and retain subscribers.Expansion into new markets.
Exploring international markets for potential subscriber growth can mitigate dependence on the
Malaysian market.Partnerships with other content providers.

Collaborations can expand content libraries and reach new audiences.Development of

new technologies. Embracing technologies like VR/AR and personalized recommendations can
enhance viewer experience. ASTRO's external environment presents a challenging mix of
threats and opportunities. Their dominant market position offers some advantages, but they
must proactively address competitive threats and capitalize on emerging opportunities to ensure
sustainable growth. Here are some key recommendations based on the EFE conclusion. Invest
in innovative and exclusive content. Attract and retain subscribers with high-quality
programming they can't find elsewhere.Develop a strong online presence. Offer seamless
streaming options and personalized experiences across devices.Explore strategic partnerships

.Collaborate with other content providers to expand offerings and reach new
audiences.Embrace technological advancements. Enhance viewer experience with cutting-edge
technologies and personalized recommendations.Monitor and adapt to regulatory changes. Stay
informed about potential regulations and adapt business practices accordingly.By addressing
these key areas, ASTRO can navigate the challenges of its external environment and leverage
its opportunities for continued success.Remember, this is a general conclusion based on limited
information. A more comprehensive analysis would require detailed data on specific threats,
opportunities, and their potential impact.

iii. Porter 5 Forces (Table)

Forces Description Threat

Level
Bargaining Power Astro relies largely on content producers for
of Suppliers. programming, and these sources have substantial
bargaining leverage because of a lack of substitutes.
Technology businesses also have a significant impact on
infrastructure and equipment, giving them a competitive High
advantage.
Because of their unique content rights and strong
bargaining position, content providers wield tremendous
power. To reduce its reliance on a single supplier, Astro
has diversified its content sources and invested in unique
material.
Bargaining Power Subscribers are price sensitive, however switching might
of be expensive due to bundled programs and installation
Consumers/Buyers fees. However, the proliferation of streaming services and
other content sources boosts buyer power.
The availability of alternative platforms such as IPTV and Medium
internet streaming services provides subscribers with
moderate switching power. However, in order to retain
customers, Astro provides bundled packages and reward
schemes will be provided.
Potential Entry of While the initial investment is considerable, restrictions
New Competitors and content acquisition expenses can pose significant
challenges. However, technical developments and new
distribution methods may lower entry barriers in the Low
future.
The pay-TV sector has relatively high entry barriers due to
 capital needs, content acquisition costs, regulatory
restrictions, and established distribution networks.
Rivalry among While Astro has a large market share, it faces competition
Competing Firms from other pay-TV providers, telecoms offering bundled
services, and even online platforms. However, the market
is fairly concentrated, which limits strong competition. Medium
Malaysia's pay-TV market is fairly concentrated, with
little direct competition. However, telcos that offer IPTV
services and internet streaming platforms provide indirect
competition.
Potential Streaming services, online content platforms, and even
Development of free-to-air television represent substantial concerns
Substitute Product because they provide other viewing options at potentially
reduced rates. High
Astro has responded to the growing threat of over-the-top
(OTT) streaming services and alternative forms of
entertainment by launching its own OTT platform.
3. STRATEGIC GENERATION AND SELECTION (CHAPTER 8) – CLO3

i. SWOT Analysis of Astro Malaysia

Astro Malaysia Holdings Berhad, commonly referred to as Astro, is a prominent entity in

Malaysia's media and entertainment sector. Offering a broad spectrum of services ranging from
pay-TV and streaming to broadband, radio, and digital content platforms, Astro has
continuously adapted to meet the evolving demands of its consumers. To gain a comprehensive
understanding of Astro's current position in this dynamic landscape, it is essential to conduct an
analysis of its internal strengths and weaknesses, as well as the external opportunities and
threats it faces. This SWOT analysis aims to uncover the unique attributes that distinguish Astro
from its competitors, as well as the challenges it encounters in the market. By delving into these
aspects, stakeholders can glean valuable insights into Astro's strategic positioning and devise
informed strategies to navigate the ever-changing media and entertainment industry landscape
effectively.
3.0 SWOT/TOWS Matrix

SWOT Analysis for ASTRO

Strengths:

● S1 : Strong Brand Recognition and Market Position (0.20)

● S2 : Established Infrastructure and Distribution Networks (0.40)
● S3 : Potential to Enhance Content Offerings and Reach (0.40)
● S4 : Opportunity to Innovate and Improve User Experience (0.30)

Weaknesses:

● W1 : Relatively Slower Adoption Compared to Competitors (0.10)

● W2 : High Production Costs and Content Acquisition Expenses (0.20)
● W3 : Limited Understanding of Local Market Dynamics (0.30)
● W4 : Challenges in Negotiation and Alignment with Partners (0.40)
● W5 : Limited Resources for Research and Development (0.30)

Opportunities:

● O1 : Growth of the online video market (0.30)

● O2 : Increasing demand for premium content (0.45)
● O3 : Expansion into new markets (0.40)
● O4 : Partnerships with other content providers ( 0.10)
● O5 : Development of new technologies ( 0.10)
Threats:

● T1 : Competition from online streaming services ( 0.30)

● T2 : Cord-cutting ( 0.45)
● T3 : Rising content piracy (0.40)
● T4 : Regulatory changes ( 0.20)
● T5 : Economic slowdown ( 0.10)
ii. Strategic Position and Action Evaluation (SPACE) Matrix

Financial Position

ROI 5

Liquidity 4

Cash flow 6

Working capital 2

Leverage 7

Competitive Position

Market share -2

Product quality -3

Customer loyalty -4

Technological know-how -6

Capacity utilization -5

Stability Position

Rate of inflation -3

Price range of competing products -5

Competitive pressure -2

Price elasticity of demand -7

Technological changes -3

Industry Position

Growth potential 6

Profit potential 6

Financial stability 7

Resource utilization 5

Productivity 2
Averages

● FP - 4.8
● CP - -4
● SP - -4
● IP - 5.2

Axis

● X-axis - 1.2
● Y-axis - 0.8

As you can see from the matrix above, Astro Berhad needs aggressive strategies so as to
improve their position in the industry.
iii.BCG Matrix Astro

In today's swiftly evolving media landscape, firms such as Astro Malaysia confront the
challenge of managing diverse product portfolios amidst dynamic market conditions. The
Boston Consulting Group (BCG) Matrix provides a valuable framework for scrutinizing and
categorizing products based on their relative market share and market growth rate. This report
delves into a comprehensive analysis of Astro Malaysia's product portfolio using the BCG
Matrix, shedding light on the strategic positioning of each product and offering insights into
potential avenues for future growth.

The BCG Matrix classifies products into four quadrants according to their market share and
market growth rate: Stars, Question Marks, Cash Cows, and Dogs. Stars denote products with
high market share in high-growth markets, while Question Marks signify products with low
market share in high-growth markets. Cash Cows are products with high market share in low-
growth markets, while Dogs represent products with low market share in low-growth markets.
By organizing products into these quadrants, companies can devise strategic plans to optimize
their product portfolios and maximize profitability.

Analysis of Astro Malaysia's Product Portfolio:

● Stars: Streaming Services (e.g., Sooka, Astro GO)

○ Streaming services are experiencing rapid growth in a dynamic market

environment, offering a diverse range of on-demand content.

○ Astro's streaming services, such as Sooka and Astro GO, hold a significant
market share in Malaysia's OTT streaming market. They capitalize on increasing
consumer demand for on-demand entertainment and mobile viewing options,
positioning them as Stars in the BCG Matrix.

● Question Marks: Broadband Services and Esports Engagement

○ Broadband services and esports engagement represent high-growth opportunities

with evolving market dynamics.

○ Astro's broadband services and esports engagement initiatives are in the early
stages of development, with potential for growth but uncertain market share.
They face competition from established players in the broadband and esports
 industries, such as Telekom Malaysia (TM) with its UniFi broadband services.
As such, these segments are categorized as Question Marks in the BCG Matrix,
indicating the need for further investment and market development to capitalize
on their growth potential.

● Cash Cows: Pay-TV Services (e.g., Astro Super Pack, NJOI)

○ Explanation: Pay-TV services represent a mature market with stable demand and
established market share.

○ Astro's Pay-TV services, including Astro Super Pack and NJOI, maintain
dominance in Malaysia's Pay-TV market. With a loyal customer base and robust
brand recognition, they generate stable revenue, categorizing them as Cash Cows
in the BCG Matrix.

Astro Malaysia's BCG Matrix furnishes valuable insights into the strategic alignment of its
product portfolio. By discerning the attributes of each product segment, Astro can make
informed decisions regarding resource allocation, investment priorities, and strategic direction
to foster long-term success in the fiercely competitive media landscape. Henceforth, Astro
Malaysia should focus on optimizing the growth prospects of its Stars and Question Marks
while leveraging the steady revenue streams from its Cash Cows to support future innovation
and expansion initiatives. Additionally, strategic measures should be implemented to mitigate
the challenges facing and align with evolving consumer preferences in the digital era.
STRATEGY IMPLEMENTATION (CHAPTER 9) – CLO 3

i. Major issue and recommendations.

Major Issue

The major issue facing Astro Malaysia Holdings Berhad is its heavy reliance on traditional pay-
TV services amidst the rising popularity of over-the-top (OTT) streaming platforms. This
reliance makes Astro vulnerable to shifts in consumer preferences and intensifying competition
from OTT providers such as Netflix and Disney+.

Recommendations

Diversification into Digital Services

Astro should diversify its revenue streams by expanding into digital services such as digital
advertising, e-commerce, and digital content production. This would reduce its dependence on
traditional pay-TV and tap into the growing demand for digital content and services.

Enhanced Focus on Streaming Platform

Astro should prioritize the growth of its streaming platforms, such as Astro GO and Sooka, by
offering a wider range of content and enhancing user experience. Investing in exclusive content
and innovative features can help attract and retain subscribers in an increasingly competitive
streaming market.

Strategic Partnerships and Alliances

Forming strategic alliances with telecommunications firms, content producers, and digital
platforms can help Astro broaden its market reach and enrich its content offerings.
Collaborations can also provide access to new technologies and distribution channels,
strengthening Astro's competitive position.

Investment in Technological Innovation

Astro should continue to invest in technological innovation to stay ahead of market trends and
consumer preferences. This includes exploring emerging technologies like artificial intelligence,
virtual reality, and personalized recommendations to enhance user engagement and satisfaction.

International Expansion
While Astro's international expansion efforts have been limited, there is significant growth
potential in overseas markets. By strategically entering new markets and adapting its offerings
to local preferences, Astro can diversify its revenue streams and reduce reliance on the
Malaysian market.

Regulatory Compliance and Adaptation

Given the evolving regulatory landscape in the media and telecommunications sectors, Astro
must stay informed about regulatory changes and adapt its business practices accordingly.
Proactive compliance measures will help mitigate regulatory risks and ensure smooth
operations.