CASE STUDY:
ETTIJAR ENTERPRISE SDN BHD
NUR AMIRAH BINTI AMIR
ISLAMIC SCIENCE UNIVERSITY OF MALAYSIA
CASE STUDY:
ETTIJAR ENTERPRISE SDN BHD
Nur Amirah binti Amir
Case study submitted in partial fulfilment for the degree of
MASTER OF MUAMALAT ADMINISTRATIVE
ISLAMIC SCIENCE UNIVERSITY OF MALAYSIA
March 2021
ACKNOWLEDGEMENTS
First of all, praise to Allah SWT and His Messenger Muhammad SAW for giving His blessing
to me to be able to finish my case study as a partial fulfilment for my Master of Muamalat
Administrative.
I would like to express my deep gratitude to Associate Professor Dr Khairul Akmaliah binti
Adham for her supervision and guidance given to me throughout the process of writing my
case study. Her guidance really helps me a lot in achieving the targeted requirement for this
course where I be able to learn a lot from her during conducting this case study project.
Without her guidance I might not be able to finish this case study as required by the university.
I believe her passion to guide me throughout the case study help me to improve myself and
gave me a lot of information, valuable knowledge and encourage me to do better for this
project.
I also very thankful to Mrs Nur Diana binti Dzulkiply director of Ettijar Enterprise Sdn Bhd
for giving me opportunity to conduct my interview for her company and all of her information
and time given to me were extremely helpful and valuable for my case study. Her kindness
and generosity for giving me information and spend her time for interview really contribute at
most of my work in process. I am also very thankful to Ettijar Enterprise’s employee who is
continuously contact me and arrange everything for me started from the first stage of
arranging interview until I be able to collect all information needed.
I am extremely grateful to my parents who always support me and encourage me to do better
for my study. I am so thankful for their love, prayers, encouragement and scarification given
to me especially for my education purpose. It’s really helps me a lot and give me passion to be
able to finish this last semester project.
For my friends especially my classmate who always share knowledge and being with me
throughout the learning process, I would like to thank them for being generous and help me in
my study. The knowledge that was shared with me are very useful and without them, I won’t
be able to success in my study.
TABLE OF CONTENTS
PART 1 ...................................................................................................................................... 1
1. Company overview .......................................................................................................... 2
1.1 Company’s background .......................................................................................... 2
1.2 Products offerings ................................................................................................... 3
1.3 Organization structure ............................................................................................. 7
2. Industry environment ..................................................................................................... 10
2.1 About footwear ..................................................................................................... 10
2.2 The history ............................................................................................................ 12
3. Competitors ................................................................................................................... 14
3.1 Footlink ................................................................................................................. 14
3.2 Medi-feet ............................................................................................................... 16
4. Issues and challenges ..................................................................................................... 17
5. Marketing strategies ...................................................................................................... 20
6. External environment .................................................................................................... 22
7. Conclusion ..................................................................................................................... 24
8. References ..................................................................................................................... 25
PART 2 .................................................................................................................................... 27
1. Synopsis of the case ....................................................................................................... 28
2. Issues and problems ....................................................................................................... 28
3. External environment analysis....................................................................................... 29
3.1 PESTEL tools........................................................................................................ 29
3.2 Five forces analysis ............................................................................................... 30
3.3 EFA table .............................................................................................................. 32
4. Internal environment analysis ........................................................................................ 38
4.1 Vision and mission statement ............................................................................... 38
4.2 Company’s objectives ........................................................................................... 39
4.3 IFA table ............................................................................................................... 39
5. Generating alternative strategies ................................................................................... 46
5.1 SWOT-TOWS Matrix ........................................................................................... 46
5.2 SPACE Model ....................................................................................................... 49
5.3 Big Think Strategy ................................................................................................ 56
6. Consolidated strategies .................................................................................................. 63
7. Prioritizing strategies ..................................................................................................... 66
8. Implementing the strategies ........................................................................................... 70
8.1 Strategic action plan .............................................................................................. 70
8.2 Strategic annual action planning ........................................................................... 71
8.3 Successful implementation phase ......................................................................... 74
8.4 Monitoring and re-evaluating the strategies.......................................................... 77
9. Projected financial statement ......................................................................................... 82
9.1 Projected income statement .................................................................................. 82
9.2 Projected balance sheet ......................................................................................... 85
9.3 Projected cash flow ............................................................................................... 87
10. Conclusion ................................................................................................................... 88
11. References ................................................................................................................... 90
PART 1
(Case Study of Ettijar Enterprise Sdn Bhd)
1
Synopsis
This case study focuses on a Strategic Management Analysis which consist of two (2)
parts which part 1 is about the case study on a company which is Ettijar Enterprise
Sdn Bhd and part 2 is about strategic management analysis and new strategy
implementation. Footwear manufacturing had been evolved years ago and many types
of footwear had been introduced in the market. Each type of footwear has their own
design, characteristics and materials used that differentiate them from one another.
Each of the design and materials use vary depending on the benefits and features of
the footwear. Not many footwears' manufacturer involves in medical types of
footwear where it helps to reduce pain and sore heels of the wearers. However, Ettijar
Enterprise Sdn Bhd introduced Medshoe in 2009 and offer various types of medical
footwear and becoming the first medical footwear manufacturer in Malaysia. The
footwears are designed with care together with expertise in medical to help those who
are looking for something ‘healthy’ beside of medicines. COVID-19 did not affect
Ettijar significantly. However, the change in trend and lifestyle require Ettijar to adapt
new strategies to create awareness about the products and brand.
1. Company overview
1.1 Company’s background
After graduated in 2007 Degree in Law from Faculty of Shariah and Law,
Universiti Sains Islam Malaysia (USIM), Mrs Hajah Nur Diana binti Dzulkiply
started her own business. She started with a small business where she sold many
products from other sellers. She established her own company Ettijar Enterprise Sdn
Bhd in 2009 that few years later, manufactured medical footwear. However, after she
started her own business, she involved in trading business where she sold other
people’s products and do tender with government in supplying nurses’ products such
as disposable items, nurses hijab, cap and uniform. During that time (2009-2016), her
‘customers’ were from government sectors where she supplied products according to
Kementerian Kesihatan Malaysia (KKM)’s specifications.
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In 2015, after a few years involved in government tenders, Mrs Diana went to
China to meet her business partner. After realized that she has strengths in business
after few years involving in this job since her studies, plus customers’ database that
she gained, she took this opportunity to establish her own business called Ettijar
Enterprise Sdn Bhd. Ettijar Enterprise Sdn Bhd was established in 2009 and started
with enterprise, sole proprietorship which in 2021, 75 percent of its job were focusing
on manufacturing medical shoes under the brand Medshoe. The other 25 percent was
for government tenders involving by Ettijar Enterprise.
In 2016, Medshoe was
founded, and the first factory was built in China. In March 2021, Ettijar Enterprise
opened a new factory in Ipoh to support medical footwear manufacturing. Despite
having a new production line in medical footwear, Ettijar Enterprise still continues
supplying nurses’ products to governments.
In the year 2020, the Medshoe vision is “To provide the most quality products,
management and have a good procedure for manufacturing so that we can deliver the
best product to our customers” while the mission is “We want everyone to wear our
shoes and we want the nurses wear our shoes and our uniform”. Within six (6) years
involving in medical footwear, Medshoe succeed in achieving few awards such as
Super Health Brand for years 2019 and 2020 for their insole products which include
soffysole, Medshoe and Poron. Medshoe also have been awarded
Super Women
Award for two (2) consecutive years.
1.2 Products offerings
Until 2021, Medshoe offers seven (7) types of product offerings which are
shoes for women, men, unisex, uniform shoes, sport shoes, Medshoe and medshoe
style. All these products offering has a different design to differentiate between
each of them. However, they are still focusing on health matters of the wearers.
1.2.1 Women shoes
Most shoes in ‘women’ category have one similar characteristic
which is most of them have high heels. This is because Medshoe want
the customers to be able to enjoy the fashionable design yet did not
ignore the health matter. Medshoe developed shoes for women who
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enjoy looking trendy and elegant while they be able to feel comfortable
walking a long day on heels. This is because wearing high heels for
hours can cause back pain because the spine was unable to absorb
shock (P.A, 2018). In 2021, customers can enjoy a comfy shoe with
price in between RM89 to RM 139. In 2021, there are twelve (12)
types of women shoes offer by Medshoe which are:
i.
Meilyne
ii. Novalady Lisa
iii. Lovelylady Aster
iv. Unilite strap
v.
Kasut Nurse Medshoe
vi. Flexilady Type C
vii. Hasanah
viii. Elmas
ix. Charisma
x.
Chanelia
xi. Heels Charming
xii. Golady Jenny
1.2.2 Men shoes
In 2021, Medshoe offered five (5) types of shoes under men
shoes category. In 2021, Medshoe for men only available in three (3)
colours which are brown, black and white. The main raw materials
used for Medshoe men shoes are microfiber, which known as a good
material that can protect feet from cold and resistant to mildew since
men always active and sweaty (Kyshli, 2021). Most of the men shoes
offer by Medshoe is suitable to wear for formal occasion. In 2021, the
price for men shoes is all at RM129.
i.
Unilite Strap
ii. Eameer
iii. Thoar
iv. Eazyz
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v.
Eahsan
1.2.3 Unisex shoes
In 2021, Medshoe also offered shoes for both genders which
price at RM129. This type of shoes has a design that is suitable for
both genders and can be used for different occasions. Since the shoes
are for both genders, the colours available also consist of black, brown
and red which these colours are suitable for both genders. In 2021,
there are eight types of shoes that offer by Medshoe under this
category which are:
i.
Robeth
ii. Moccasin
iii. Unilite strap
iv. Soukaer vol 2
v.
JYSM
vi. Eyftayh
vii. Shahaed
viii. Khafeyfah
1.2.4 Uniform shoes
In 2021, Medshoe offered six (6) types of shoes that is suitable
for nurses which available in three (3) colours which are black,
white and brown. With one (1) inch heels, these shoes are very
suitable for formal and elegant look. According to Mrs Nur Diana,
the wearer will not feel pain wearing heels shoes and can enjoy
looking good even after a long hour of walking.
i.
Meilyn
ii. Kasut nurse Medshoe
iii. Flexilady type C
iv. Eameer
v.
Heels charming
vi. Flexilady type B
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1.2.5 Sport shoes
In 2021, there were three (3) types of sport shoes offer by
Medshoe which is also suitable to be used for both genders and have
four (4) different colours which are black, grey, red and dark blue.
According to the company, the insole is very soft and using
microfiber, which is suitable for active use and also anti-shock which
can reduce sore heels.
i.
Reyh
ii. Reyh 2.0
iii. JYSM
1.2.6 Medshoe category
The company also offered shoes under Medshoe category, the
shoes are suitable to be used for daily use and not formal. With a
simple design, Medshoe shoes can be used for any outdoor activities.
Apart from that, Medshoe also offer insole which can be put inside
the shoe for more comfortable feelings. The insoles are suitable to be
used to reduce any foot problems, including osteoarthritis, heel spurs
and claw feet. Apart from that, it is also suitable to be used especially
for pregnant women and overweight people because it is soft and
anti-shock.
1.2.7 Medshoe style
Most of the medical shoes sell by Medshoe are priced above
RM100. In order to offer an affordable medical shoe, Medshoe
produced few shoes under Medshoe style which are more affordable
and comfortable as other Medshoe products. Medshoe style offer an
affordable shoe for women for casual use. In 2021, the price offering
is the cheapest among other shoes which is RM89. Customers still
can enjoy a healthy shoe with affordable price. Apart from that, these
shoes are suitable for women at various age range whether teenagers
or elderly because there are many design customers can choose from.
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Many women always faced the problem such as blister when wearing
stripper shoes. Stripper shoes are high heels shoes that some of them
can be six (6) inches to ten (10) inch high which to give high to the
wearers (Urban Dictionary, 2021). In order to reduce the problem,
Medshoe using Polyurethane as the upper part of the shoe which is
soft and can avoid blisters (Blister prevention, 2015)
1.3 Organization structure
Figure 1 show Ettijar Enterprise structure which Ettijar divided its
structure into two (2) different businesses which are Medshoe and government
tender which supply nurses’ uniforms, caps, hijab and disposable items under
the brand Nurve. Even though there are two (2) different operations, Ettijar
Enterprise is using the same organizational structure to manage both
operations. However, Ettijar are mostly focusing on Medshoe operation rather
than Nurve.
E T T I JA R E N T E R P R I S E S D N B H D
Nurve
Medshoe
Nurve
25%
Medshoe
75%
Figure 1: Ettijar Enterprise Sdn Bhd structure
In 2009, Ettijar only hired one (1) employee who helped in managing
the government tender and trading. During that time, Ettijar hired SPM and
Diploma level. However, in 2021, Ettijar already hired 32 employees with
Degree level and form an HR department to monitor all the employees since
7
there are many job scopes and issues arise regarding employees’ matter.
However, currently, Ettijar trying to avoid hiring more employees as a part of
a strategy to reduce the cost of expenses of salary. In addition, employees who
are kept working with Ettijar since early of the establishment, are becoming an
important worker for Ettijar since they have more knowledge and experience
with this company. Employees who are working in Ettijar must have the
willingness and motivation to work. There are six (6) departments in Ettijar
that manage both Medshoe and Nurve operations, which are Human
Resources, Finance, Production, Operation, Media and Retail.
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Director
(Mrs Hajah Nur Diana
binti Dzulkiply)
Human Resurces
department
Finance
Department
Production
department
Operation
department
Media department
Figure 2: Ettijar Enterprise Sdn Bhd Organization chart for year 2021
9
Retail department
2. Industry environment
2.1 About footwear
According to Merriam-Webster, footwear can be defined as wearing apparel
for the feet such as shoes or boots. The Cambridge American dictionary defines
footwear as shoes, boots or any other outer coverings for the feet. Footwear consists
of garments wear on feet for various reasons specially to protect from harm and for
hygiene purpose. Footwear can be made from leather, plastic, rubber or even woods
depend on its design and characteristics. Footwear is a set of little parts that that
combined, which consist of the grommet (small round leather or cloth that used to
prevent the sheet or panel from being thorn), sole, heel, laces, tread and many other
things which also may vary according to the types of footwear. According to
Wikipedia, footwear is divided into seven (7) types which are boots, shoes, sandals,
slippers, specific footwear, traditional footwear and socks.
2.1.1
Boots
Boots are a footwear that covers up foot, ankle, lower calf and most of
its cover up to the knees. Boots usually made from rubber and leather and
some boots only use for specific occasion such as for working purposes as it
can protect from water, chemical or any harmful materials or tools. But as
years passed by, many boots had been developing its function and becoming
more fashionable and become a trend which used by most of the celebrities.
Different types of boots made from different materials and design. Boots for
women usually made up by having spike heels, pointed toes and zipped
(Wikipedia, 2021). On the other hand, speciality boots or boots made for work
purpose are made from leather, and it is insulated and water resistant which to
protect from extreme cold and hazard.
2.1.2
Shoes
Shoes are designed for style and comfort of the wearers. It’s come in
two (2) forms which are flat shoes and high heels. During the early of shoes
manufacturing, shoes were made from leathers, woods and canvas. But after
10
the use of technology and various raw materials' discovery, some shoes are
made from rubber, plastic and petrochemical-derived materials. Most of the
shoes consist of eight parts which are sole, insole, outsole, midsole, heel,
upper vamp, medial and toe box.
2.1.3
Sandals
Sandals are an open-type footwear which consist of straps to give
support between the feet and the sandals. Sandals usually being worn during
hot weather because it is the most exposure footwear compared to the others
and usually very cheap and simple. Sandals are usually being used for casual
occasion and not suitable for hazard protection purpose as it does not cover the
whole feet.
2.1.4
Slippers
Slippers are the most common footwear that everyone own, which
intended to be used indoor to protect feet. It is not suitable to be used for any
special occasion or formal use as the design is too simple and does not
represent any ‘formalities’. There are five (5) types of slippers which are open
heel slippers, closed slippers, slippers, boots, sandal slippers and evening
slippers. Most of the slippers were made from rubber which is to protect the
feet from daily use.
2.1.5
Specific footwear
Specific footwear is designed for only a specific purpose and cannot be
used for other daily activities. This kind of footwear usually quite expensive as
its designed and materials are only for the particular use or activities. There
are many types of specific footwear and the popular one is ballet shoes which
design for ballerinas. Another type of specific footwear is surgical shoes and
designed for surgical purpose. The materials used must be according to the
specification and suitable to be used in hospitals. There is also specific
footwear that design for diabetic people, which is ‘diabetic shoes’. This kind
of footwear mostly uses soft and anti-shock materials to prevent sore heels of
the wearers. Climbing shoes is also one of the specific footwears which
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designed with anti-slip features to protect the wearers and reduce harm to the
wearers.
2.1.6
Traditional footwear
Traditional footwear was any kinds of footwear that designed years
ago, before any development of technology and manufacturing. Usually,
traditional footwear is handmade and required an expert to design. It took a lot
of time and effort to design one traditional footwear and some designs are not
being used anymore and displayed in museum of historical relics. But these
traditional footwears are the first step towards the current development and
design of the footwear. Most of the traditional footwear is made from
materials that easy to get during that era which are woods and leathers.
2.1.7
Socks
Apart from shoes, socks also included in the footwear category. Socks
are a clothing that use on the feet to cover the ankle and part of the calf. Socks
usually made from leather or even matted animal hair. These materials are
being used for socks manufacturing because it can absorb sweat from the feet,
and it is soft and suitable to use to protect from blister from using shoes all day.
Socks can also use to protect from frostbite and keep our feet warm. After
certain years, socks design is slightly changed from regular socks to toe socks,
flip-flops sock and socks that is worthy friendly for Muslim wearers.
2.2 The history
A footwear manufacturing industry first started in years 1870s by Jan
Matzeliger who was born in 1852 in Suriname, northeastern Atlantic coast of South
America (KYAAML, 2021). During that time, manufacturing of footwear required a
lot of hard work where sewing, sticking and every process of making shoes were
handmade. It required a lot of time and efforts to do so. Despite taking a long time for
making any footwear, the manufacturing of footwear focused on long-lasting products
and believe that it can be achieved by using a machine and focusing on its features
planning. As years passed, Lasting Machine had been used to manufacture footwear
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and evolved footwear industry by focusing on productivity and resources. Before this,
sticking sole onto the shoes itself required about 15 minutes process. However, after
the evolving of machines, the time taken reduced to 1 minute.
In 2014, under the successful supported and promotion made by Malaysia
External Trade Development Corporation (MATRADE), Malaysia is a one of the
largest footwear exporters in Asia countries which is due to the high quality of
products with reasonable price offerings made by Malaysian manufacturers in other
countries (Malaysia Insight, 2014). Until 2014, most of the Malaysia footwears were
exported to the South East Asia, but after realizing the ability and opportunity in
expanding footwear industry, MATRADE supported the exportation to European
market and hope for more economic contribution from this industry. One of the
significant successes of Malaysia in footwear industry was where Malaysian
exportation to Germany rose by 16%, which is 2.9 million pairs in 2013 and ranked
20th position in terms of imported source rankings. In 2014, Malaysia also recorded a
significant increase in exports of Malaysian footwear to other European countries
such as Norway, Belgium, Ireland, United Kingdom and United Arab Emirates
(Malaysia Insight, 2014). This show that there has been a significant transaction
globally in the footwear industry and Malaysia in a middle of expanding this industry.
In Malaysia, footwear industry had changed from commodity based to
industry based where it is to reduce the dependency of imported raw materials to
increase the import work in process or finish products into Malaysia. (Docplayer,
2014). Since the evolving of other industry such as tourism, and government tried to
promote Malaysia as a shopping centre, which lead to the reduction of duty import on
raw materials use in footwear manufacturing imposed to manufacturer and thus
caused the revenue that gained from footwear industry were expected to reach RM1.4
billion in 2021 with annual growth of 16.9 percent (Statista, 2020). This might result
due to the significant usage of e-commerce since the pandemic outbreak of COVID19. If this trend is consistent throughout the years, consumer penetration might
increase from a projected 23.6 percent in 2021 to 34.7 percent in 2025 (Statista,
2020). According to Malaysian Industrial Development Authority (MIDA), there
were 1,000 footwear manufacturers in Malaysia which consist of 30,000 employees
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and about 100 manufacturers are cantered in Seri Kembangan while others are mostly
in Johor and Perak (Malaysia Insights, 2014).
Malaysia owned many footwear fashion icons that contributed towards
evolvement in the Malaysia footwear industry. These human capital skills and ideas
gained recognition not only in Malaysia but also from other countries for their
brilliant work. The top ten (10) most popular icons in designing footwear is Datuk
Jimmy Choo, Dato Lewré Lew Fong Voon, Christy Ng, Mohd Faizol aka Zul Mohd,
Xavier Mah and Alfred Hor, Zaid Arif, Hidayah Hassan, Nelissa Hilman, Yoke Sin
Theam and Yokie Yoke Git Theam and Ung Yiu Lin (Top 10 of Malaysia, 2019).
The very first footwear icon was Datuk Jimmy Choo, who established Jimmy Choo
brand in 1996 with the concept of luxury and sexy cut, which can be seen wearing by
many of the celebrities. This is when in 1996 the footwear industry in Malaysia
started to be well known globally and contribute to the Malaysian economy.
The reason for Malaysia being able to emerge in footwear industry other than
supported by the government, was Malaysia owned a few footwear icons who
designed footwear and contributed towards emerging of footwear industry locally and
globally. In 2012, there was also a festival conducted by Malaysia Ministry of
Tourism to promote local industry globally and shoes sales had been recorded as 17
percent of money spent by tourists in Malaysia and contributed about 325 million US
dollars in the economy (World Footwear, 2013). About 150 brands were displayed
during the festival and Datuk Jimmy Choo designed series had been one of the most
attractive footwear during the festival.
3. Competitors
3.1 Footlink
Footlink is a medical health footwear that offers medical shoes for
people who are facing heels pain, arch pain diabetic and lower back pain.
Footlink dedicates its efforts to serve its customers a comfortable, functional
and fashionable shoes while focusing on the health issues faced by most of the
consumers who work for long hours (Footlink, 2021). Footlink really focusing
on health issues and work together with specialized person in certain areas
14
such as foot care doctors, nurse and craftsmen where the purpose of
combining health and fashion can be met together through shoes to serve the
customers.
“It makes Us Happy to make shoes that makes People Happy" - Footlink
Footlink can be found at all states in Malaysia and also, they have few
outlets in Singapore. Most of the outlets can be found in Tesco, Giant and
many other supermarket or retailer. Not only shoes, Footlink also offer
accessories such as socks and insoles. The price of most of the footwear
products are started from RM100 with various colour to choose from.
Consumers can find the products not only in-shop but also through website.
In order to fulfil the demand and preference of consumers towards
‘healthy’ shoes, Footlink designed its shoes according to the bio-mechanical
and healthy footwear guide where it is to fix arch pain, heel pain, ball of foot
pain, ankle pain, knee pain, lower back pain, swollen foot and diabetic foot
(Footlink, 2021). In order to gain knowledge on how to overcome the pain,
Footlink work closely with therapist doctors, diabetic foot care nurses,
podiatrists and physiotherapists throughout the manufacturing process and
quality checking stage to ensure the objectives can be achieved.
The insole, which is made from Poron, which is an urethane foam
material that are imported from the US in order to make the high-quality shoes
which can stand up to 10,000 steps for each day used (The Star, 2014). It’s
also have been highlighted that the shoes are most suitable for professional
occupations or in other words, for formal use such as for police, nurse and
teacher. On average, Foot link sold 50,000 pairs each year and the shoes were
sold at 50 stores located in government and private hospitals in Malaysia.
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3.2 Medi-feet
With more than forty (40) products categories offer, Medi-feet become
one of the companies that offer shoes for health purpose (Medi-feet, 2021).
Medi-feet not only focusing on its benefits for health, but also looking forward
to the stylish design of the shoes that will attract the customers. With the
collaboration with Podiatrists, Physiotherapists and Pedorthists, it is to ensure
that the features of the shoes were perfectly fit with the customers’ expectation
of improving their health. By using the advance technology and finest
materials with high-grade memory padding and contoured orthotics systems to
create a comfort feeling by the wearers to make the wearer be able to walk for
a long time without feeling hurt on the feet. The removable Footbeds is
designated for diabetic wearers which can absorb shock to reduce pain and
uncomfortable feeling.
“Feet is our second heart” - Medi-feet
Medi-feet are designated to make sure that the shoes can be used for
long-distance walk and for customers who require special need or care, they
also offer custom-made shoes. People can have their own personal design of
shoes that will have a perfect size and fulfil every single need for their feet.
American Podiatric Medical Association (APMA) and Australian Podiatric
Association are the corporate partners for Medi-feet to help in designing shoes
that fit with feet problems. Using poron, which is a high fabricating material
that have low stress, compressibility and soft that is using a technology made
in the USA which is known as a performing cushioning made Medi-feet offer
the best shoes that can reduce stress for feet.
According to Medi-feet, in 2021, this brand was recommended by
doctors, podiatrist and healthcare professionals as a good brand for better feet.
The types of shoes they offered are based on the medical features of the shoes
such as anti-shock, orthotic system, three-point support, bunion guard and
many more which make it easier for customers to look for shoes that they need
(Medi-feet, 2021)
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4. Issues and challenges
The challenge started when Mrs Diana lack of capital to establish her
own business. In 2009, Mrs Diana started her business with her own saving
and family’s financial help. During that time, RM10, 000 already enough to
establish a business. However, Mrs Diana only used RM5, 000 of her savings
to establish a business by selling other sellers’ products such as products from
Medi-feet and Footlink. At the same time, she also faced rejection from a few
of her own family members and friends who did not agree with her decision to
establish her own business after she decided to resign from her job as Sharii
lawyer. Regardless of the issues faced in early of the establishment of Ettijar,
Ettijar still managed to gain profit in the first year of the establishment.
In 2016, when she established Medshoe, she faced rejection from
customers because most of the customers did not aware and familiar with
medical shoes. Lack of awareness of people about medical shoes made
Medshoe quite hard to be accepted in the market. People did not know the
advantages of medical shoes and rejected the products because of its
expensive price. Besides that, during that time, online platform is not widely
used by Medshoe for selling and promoting purpose. So, Medshoe only
hoping for people to come to the retail and try the shoes by themselves. On top
of that, other normal shoes are penetrated in the market with many latest
designs and cheaper price. Since people did not aware with medical shoes,
they prefer to choose normal shoes and did not realize the value added in the
medical shoes. Plus, people also have limited choices of medical shoes in
terms of its design and style since only three (3) companies dominated medical
footwear in Malaysia, thus, people have limited knowledge and interest on
medical footwear.
COVID-19 first case was in Wuhan, China in December 2019.
Malaysia recorded a first case was in January 2020 from a man age 41 years
old (BH Online, 2020). Since the pandemic outbreak, the government has
announced a new norm that had to be followed by all Malaysian in order to
reduce the number of cases. On 18th March 2020, government implemented
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the first Movement Control Order (MCO) since the recorded cumulative cases
are 553 people who were infected (Astro Awani, 2020). Since then, most of
the activities are restricted, especially that required a group of people staying
in one place. Most of the shopping complex were required to close the
operation and only supermarkets or shops that sell necessity products can
operate. People are prohibited to visit other countries to avoid more cases.
Until 2nd April 2021, Malaysia recorded 1,294 new cases which still
considered high with five (5) deaths. Since Medshoe’s factory are in China,
they faced difficulties during that time. Mrs Diana cannot visit the factory for
monitoring purpose. Interstate movement also had been restricted which make
people cannot go anywhere for shopping. The first implementation of MCO
effected the businesses in many ways.
On 10th June 2020, after the number of infected cases were slightly
dropped, the government implemented Recovery Movement Control Order
(RMCO). Most of the businesses can operate as usual, but under the Standard
Operating Procedure (SOP) highlighted by government which is to help to
recover Malaysian economically. During the MCO, people were restricted to
travel overseas and even interstate which is to avoid the number of infected
cases. The statistic from Tourism Malaysia shown that the number of tourist
arrivals in Malaysia is declining, which are 25.83 million in 2018, 26.10
million in 2019 and 4.33 million in 2020 (Malaysia Tourism, 2021). On 22nd
June 2020, Arab Saudi announced that people are not permitted to enter Arab
Saudi for Hajj and Umrah purpose which is to prevent from the infected case
to arise. However, Arab Saudi later announced that pilgrims for Hajj and
Umrah will be allowed starting from 17th to 22nd July 2021 with Malaysia was
successfully secured additional of 10,000 places for Malaysian quotas (NST,
2021)
During the RMCO, Medshoe faced a slightly dropped in their sales
during this time. In order to avoid more sales drop, Medshoe implemented
affiliate system and online shopping platform. There are two (2) objectives of
affiliate system which are to reduce the number of employees and using more
system and technology rather than workers and also to create an entrepreneur
18
among Malaysian while helping them to gain income. “So why we want to
waste our money to open up retail when people cannot have contact with each
other. So why not we use this affiliate system to sell our products and at the
same time making money” — Mrs Diana in regard to the implementation of
affiliate system. Most of Medshoe customers can accept the changes of buying
online, but as for elderly, they still cannot adapt to the changes and facing
difficulties in buying online especially in terms of measuring sizes of shoes
and online banking. Most of the elderly Medshoe’s customers, they prefer to
shop in retail rather than online.
“Before the pandemic, marketing is the biggest focus for Ettijar to
promote their products. However, the focus is depending on company strategy.
Our company focus on positioning and branding. If that the case, we focus on
marketing. Then we focus on production. I don't know concept from book. I
just follow rationale. So, in my opinion people need to know about medical
shoes first before you go for global. Since people in Europe also still did not
aware on these products” — Mrs Diana.
After the significant dependent on online promotion and shopping,
Medshoe faced problems in creating awareness about the products to potential
customers since the customers need to touch and feel the shoes in order to feel
comfortable and value added to the shoes themselves. Online making the
purchase and promotion easier for sellers. However, for Medshoe, since
medical shoes need to be felt and touch, it is quite hard for them to reach their
potential customers. Regardless of all the issues Medshoe faced during the
pandemic, Medshoe still managed to gain millions of profits in a year and
every month they still managed to gain profit whether the profit is increasing
or not compared from the previous month.
Until 2020, the average rate of tariffs imposed by the government is
6.1 percent (International Trade Administration, 2020). The government
imposed high tariffs in order to control the number of imported products in
Malaysia. Imposed high rate of tariffs is one of government strategies to
reduce the number of imported products to Malaysia in order to encourage
19
exportation and increase the production of domestic industries. Medshoe
manufacturing is highly dependence on imported products from other
countries. Thus, higher tariff rate and duty import are highly affecting the
Medshoe manufacturing cost of production. However, Medshoe own one local
supplier for rubber which is Kossan Rubber Industry Bhd. Other suppliers are
mostly from overseas since overseas’ companies offer much cheaper price of
materials and higher-quality products than local materials.
Even though Medshoe’s sales are increasing during the first MCO, but
in terms of operation in China, they faced difficulties to monitor and manage.
This is why in March 2021, Medshoe opened a factory in Ipoh were much
easier to monitor and visit and become the first medical shoes manufacturer in
Malaysia. According to Mrs Diana, despite having fluctuation in profit during
COVID-19, Ettijar still manage to survive by having a business from Nurve
brand which is a tender with the government to supply nurses’ products.
According to Mrs Diana, “Before MCO, we already educate our customers to
purchase online. We educate our customers on how to choose shoes through
online. So, they already know how to measure the size and they accept this
method”. Thus, Medshoe did not face critical issues in acceptance of ecommerce among most of their customers.
5. Marketing strategies
In early of Medshoe establishment in 2016, Medshoe promoted their
brand through retailers. People can see, touch and feel the shoes and see the
comfort offered by the products. Medshoe also promoted its products through
television and radio to create awareness to people about the medical shoes and
their benefits. Most of the company products were sold through retailers and
people preferred to purchase a walk in as they can try on the shoes and
measured the sizes. During the promotion, Medshoe also highlighted the fact
that Medshoe products are made using USA technology and have accreditation
from the American Podiatric Medical Association (APMA). The raw materials
being imported from various countries such as Japan, Korea, India, China,
20
Vietnam, Thailand and Pakistan made Medshoe offering the high-quality
products to the customers.
According to The Sun Daily, Malaysians spend 3.7 hours per day
online before the pandemic. However, the hours spend for online increase to
4.8 hours during the pandemic (The Sun Daily, 2020). Apart from that, ecommerce contributed towards Malaysia significant growth at 87 percent (The
Sun Daily, 2020). After the implementation of MCO 1.0, Ettijar changed the
marketing strategies to online platform where Medshoe are promoted through
FB lives and Instagram. As for Nurve products, they did not face any
difficulties since the products are selling through tenders to the government.
However, as for Medshoe, they need to adapt with the digitalization as more
people choose online platform rather than walk-in store. Medshoe promotes
the products through various platforms such as Shopee, website, Facebook and
Instagram. However, most of the medical shoes sell in Shopee are from Medifeet and few from other brands which are not dominant in the market.
After the implementation of MCO2.0, started in March 2021, Medshoe
added another strategy which is affiliate system. This strategy is to reduce the
cost of hiring employees but at the same time to create a new business owner
apart from helping Malaysian to gain income. This is because, according to
Department of Statistic Malaysia, there are increase in number of Malaysian
who lost their income from 1.3 percent in December 2020 to 4.9 percent in
January 2021 which is about from 9.7 thousand people to 782.5 thousand
people (DOSM, 2021). Besides that, in 2020, the impact of COVID-19
towards declining income of the Malaysian also increases in a few sectors. In
agriculture, 70 percent of employees facing a drop in monthly income while
46.7 percent in the industry sector and 54.2 in the services sector (DOSM,
2020). Looking at the current issue at unemployment rates and dropping in
monthly income, Ettijar wants to help the Malaysian to gain income from
affiliate system. Medshoe goals is to go about positioning and branding as
many people still did not aware about medical shoes. Apart from that, even the
European countries also still did not aware about these products. Ettijar first
prioritized revenue allocation on marketing which is about 50 percent of the
21
revenue gain for marketing in order to position and brand their products.
Started in 2020, Ettijar focus on productions since people are getting aware of
the Medshoe brand.
Medshoe also offered ‘Medshoe style’ which is a product that offered
medical shoes, but with cheaper price which is RM85. This product uses
microfiber, which is much cheaper and imported from China. So, people still
can enjoy medical shoes with cheaper price. Even though Ettijar have a good
logistic to import the raw materials to Malaysia, Ettijar faced difficulties to
manage the import materials especially during MCO. Apart from that, they
also face difficulties with custom in terms of the regulations and rules that
need to be followed. It is hard for Ettijar to manage the import of raw
materials and looking for good quality but cheaper materials because medical
shoes is a niche market. So, it is quite hard for them to look for expertise to
produce and supply the products for them.
6. External environment
According to National Health and Morbidity Survey 2011, about 15.2
percent, which consists of 2.6 million Malaysian adults are facing diabetic
disease and half of them did not realize they have the disease until they were
diagnosed by a doctor. Three quarters of diagnosed diabetics do not have their
blood sugar levels under control and have a higher chance to develop
complications such as loss of sensation in their feet, which also known as
peripheral neuropathy and one of the treatments required the patients to wear
insole (The Star, 2015). Foot ulcers and blister problems come from walking
all day using improper shoes and lack of daily foot care. However, people start
to concern about their personal health, especially during COVID-19. There are
various ways people can do to avoid or reduce the chance of getting feet
problems which are getting professional assessment and using a proper
footwear such as sock, the insole and the best choice is wearing a custom
diabetic shoe (The Star, 2020).
22
People who are working as a nurse, doctor, teacher and others which
require standing for hours usually facing feet problems. Some of them already
realize the importance of taking good care of their feet by using a proper
footwear. However, not many footwears manufacturing offers medical
footwear in Malaysia. Medshoe is the third medical footwear brand that
established in Malaysia after Medi-feet and Footlink. However, Medshoe is
the first medical footwear brand that opened a manufacturing plant in
Malaysia. Even though not many business ventures in this industry, but it is
quite hard to venture in this industry since this industry requires expertise in
medical footwear making and professional consultant on health issues. Apart
from that, most of the competitors in this industry import their raw materials
from overseas, especially China because of cheaper price offerings.
Apart from that, the best technology that provides medical footwear is
in the USA which require a high cost. Plus, the cost of imported raw materials
from other countries also high and require a lot of procedure from Customs.
Besides that, in terms of duty import that imposed by a government on
imported product need to be taken care of by Ettijar most of their raw
materials are imported from other countries. All transactions were made using
US Dollar and Ettijar will go for ceiling rate, which is 4.5 in order to expect
the higher cost of imported products.
“I have some discussion with MATRADE, but we need to settle on production
first. But we need to comply with international requirements like ISO and
everything. Our company needs to be strong first before becoming a vendor to
other countries, so that government can help us in terms of export.” — Mrs
Diana.
In the early in 2021, Ettijar already conducted a discussion with
MATRADE to discuss exportation requirements and ISO that need to be
complied by Medshoe. Since Ettijar have good reputation among banks, it
makes it easier for Ettijar to apply for financing and increase the chance for
Ettijar to expand their business globally.
23
7. Conclusion
Ettijar are looking forward to grow their business in future especially in
exportation. However, Ettijar believed that in order to do so, they need to promote
their brands to people and create more awareness.
According to Mrs Diana, she is
looking forward to list Medshoe in Bursa as she believes it can make Medhoe brand
more well known by people and dominate the market. Since medical footwear
industry is still have a lot of space to be venture, Medshoe is trying to use various
types of platforms to market their products. Most of the Medshoe strategies is to
create awareness on the product's features in order to make people familiar with
medical shoes.
24
8. References
Bernama. (2020). Kronologi COVID-19 Di Malaysia Sehingga 16 Mac 2020. Astro
Awani.https://www.astroawani.com/berita-malaysia/kronologi-covid19-dimalaysia-sehingga-16-mac-2020-233933
Dan Gartlan. (2020). 5 SMART Goal Example For Business Development.
Attraction Marketing. October 2020. stevens-tate.com/articles/5-smartgoal-examples/
Elan Perumal. (2014). Company's Work With Shoes For Diabetics Leads To
Expansion.
The
Star.
July
2014.
https://www.thestar.com.my/business/sme/2014/07/26/put-your-bestfoot-forward-companys-work-with-shoes-for-diabetics-leads-toexpansion
Fraderica. (2014). Overview of Malaysian Footwear Market. Docplayer.
https://docplayer.net/21571318-Overview-of-malaysian-footwear-market.html.
Lin Lean Lim. (2020). The Socioeconomic Impacts of COVID-19 in Malaysia:
Policy Review And Guidance For Protecting The Most Vulnerable And
Supporting
Enterprises.
International
Labor
Organization.
http://ilo.org/wcmsp5/groups/public/---asia/---robangkok/documents/publication/wcms_751600.pdf
Luqman Arif. (2020). Kes Pertama 2019-NCov Babitkan Rakyat Malaysia. BH
Online.
https://www.bharian.com.my/berita/nasional/2020/02/652501/kespertama-2019-ncov-babitkan-rakyat-malaysia
Merriam-Webster. (n.d.). Footwear. In Merriam-Webster.com dictionary. Retrieved
March
16,
2021,
from
https://www.merriamwebster.com/dictionary/footwear
n.a. (2021). Jan Matzeliger Dan Sejarah Pengeluaran Kasut. KYAAML.
HTTPS://MS.KYAAML.ORG/HISTORY-OF-SHOE-PRODUCTION1991309-5606
n.a (2020). Footwear. Statista.
https://www.statista.com/outlook/dmo/ecommerce/fashion/footwear/malaysia
n.a. (2014). Malaysia’s Shoe Industry Steps Up. Malaysia Insight.
https://www.malaysia-insights.com/malaysias-shoe-industry-steps-up/
n.a. (2019). Malaysia’S Top 10 Talented Shoe Designers. Top 10 of Malaysia.
http://top10malaysia.com/main/malaysias-top-10-talented-shoe-designers/
n.a. (2013). Local Shoe-Making With Big Importance To Malaysia Footwear. World
Footwear. https://www.worldfootwear.com/news/local-shoe-making-with-bigimportance-to-malaysia-footwear/134.html
n.a. Cambridge Dictionary. Retrieved March 17, 2021.
https://dictionary.cambridge.org/dictionary/english/footwear
n.a. Footwear Definition. Retrieved March 17, 2021.
https://www.apparelsearch.com/definitions/clothing/footwear_definition.htm
n.a (2021). Wikipedia. Retrieved March 17, 2021.
https://en.wikipedia.org/wiki/Footwear#Shoes
n.a. (2018). What Are The Disadvantages Of Wearing High Heels?. Florida Foot and
Ankle Group. P.A. https://www.flafoot.com/blog/item/267-what-are-thedisadvantages-of-wearing-high-heels.html
n.a. (2021). What Are The Advantages And Disadvantages Of Microfiber Leather?.
25
Kyshli. http://www.kyshli.com/en/h-nd-19.html
n.a (2021). About Us. Footlink.
https://www.footlinkonline.com/index.php?route=information/information&in
formation_id=4
n.a (2020). Import Tariffs. International Trade Administration.
https://www.trade.gov/knowledge-product/malaysia-import-tariffs
n.a (2021). Stripper Shoes Definition. Urban Dictionary.
https://www.urbandictionary.com/define.php?term=stripper%20shoes
n.a (2021). Malaysia Tourism Statistic By Brief. Tourism Malaysia.
https://www.tourism.gov.my/statistics
Neelakanta Reddy. (2020). Foot Ulcers Cost The Most Among All Diabetic
Complications.
The
Star.
December
2020.
https://www.thestar.com.my/lifestyle/health/2020/12/24/foot -ulcerscost-the-most-among-all-diabetic-complications
n.a (2020). Internet usage in Malaysia spikes as COVID-19 pushes more people to
go
online.
The
Sun
Daily.
Nov
2020.
https://www.thesundaily.my/business/internet-usage-in-malaysia-spikes-asCOVID-19-pushes-more-people-to-go-online-BN5087012
n.a (2021). Key Statistic of Labor Force In Malaysia January 2021. Department
of Statistics Malaysia Official Portal.
Rebecca Rushton. (2015). How Cushioning Your Feet Can Help Blisters.
Blister Prevention. https://www.blister-prevention.com/cushioning-yourfeet/
Tan Shiow Chin. (2015). Walk This Way: Common Feet Problems Many Folks
Face.
The
Star.
February
2015.
https://www.thestar.com.my/Lifestyle/Health/2015/02/08/Walk -thisway/
Teoh Peh Ying. (2021). Association hopes for early announcement if Haj allowed for
Malaysians
this
year.
New
Straits
Times.
https://www.nst.com.my/news/nation/2021/03/673550/association-hopesearly-announcement-if-haj-allowed-malaysians-year
26
PART 2
(Strategic Management Analysis)
27
1. Synopsis of the case
Ettijar Enterprise Sdn Bhd was established in 2009 and venture in tender with
government to supply nurses’ products such as uniforms, caps, shoes, hijab and
disposable items under the brand Nurve. In 2016, Ettijar established Medshoe which
manufacturing medical shoes. Before the pandemic, Ettijar used to promote Medshoe
through retails, television and radio. After the pandemic outbreak, Medhsoe were
promote through online platform such as Facebook lives, Instagram and Shopee as
COVID-19 changed how people behave and their preferences. Medshoe also in the
middle of establishing affiliate system to help Malaysian who loss job during
pandemic to gain income while reducing the number of employees in the company.
During the MCO1.0, Medshoe gained high profit compared to the MCO2.0. Despite
gaining profit during the pandemic, Medhsoe are still looking forward to create
awareness about their products. There is a potential for this industry to grow in the
market since people started to realize the importance of health in lives
2. Issues and problems
Medshoe also faced rejection from the customers since medical shoes are still
not well known in the market. People preferring to purchase regular shoes rather than
medical shoes because of the cheaper price. Medhsoe tried to use various platforms to
create awareness about the products such as using television, online platform and ecommerce. However, in Shopee platform, Medhoe is still overshadowed by Medi-feet.
Medshoe still need to create awareness about the brand to customers since this
industry is not familiar by the people.
Other issue started arising in Medhsoe was during the COVID-19 outbreak
where people started to change their lifestyle to be more techno-savvy by adapting
technology and digitalization is most of the daily activities. Due to this change,
Medshoe faced issues when most of their elderly customers are failed to adapt with
the changes especially in terms of ordering and paying online. This issue had caused
the reduction in sales from elderly customers as these customers preferring to
purchase in retail.
28
Apart from that, Mrs Diana faced difficulties to monitor her Medshoe
manufacturing factory in China because of the restriction to travel overseas.
Managing overseas operation during COVID-19 is not easy as Mrs Diana was
restricted to travel. Due to this issue, Ettijar decided to open a new factory in Ipoh,
Malaysia.
Since most of the materials use by Medshoe are imported from overseas,
Medshoe faced difficulty to comply with the government regulations regarding the
Customs and tariffs. Government restricted the import products in order to encourage
domestic industry by increasing the tariff and restricted the regulation for imported
products. Medshoe faced difficulties to comply with the requirement since they
depend on imported material from various countries such as Vietnam, Korea,
Thailand, Pakistan and Japan. Another issue regarding imported materials is the
fluctuation of currency. Since all the transactions were made using US Dollar,
currency fluctuation playing a big role in Medshoe imported materials cost. Based on
the issues faced by Ettijar, the objective that can be focus to be achieve is to create
more awareness about the products and brand in order to increase profit and create a
brand image for the company since the medical footwear are still not popular among
people. A part from that, there are still space for this industry to be penetrate as the
number of competitors are still low domestically and internationally.
3. External environment analysis
3.1 PESTEL tools
External environment analysis is to identify the external factors that
affect directly or indirectly to the company or any other company that exist
within the industry or not (Strategic management 2nd ed, 2014). In strategic
management, external environment analysis is used to identify the
opportunities and threats that exist which might affect the business. There are
four (4) different types of external factors which are Political, Economic,
Socio-cultural and technological or also known as PEST. Extended from the
PEST factors, there are another two (2) factors which are Environmental and
Legal which combine and known as PESTEL.
29
3.2 Five forces analysis
Threat of
new
entrants
Bargaining
power of
suppliers
Bargaining
power of
buyers
Competitive
rivalry
Threat of
substitute
products
Figure 1: Michael Porter Five Forces Model
i.
Competitive rivalry
In medical footwear industry, the number of market players are quite limited in
Malaysia. There are only three (3) companies that compete in this industry. Even
though Medshoe is the third brand that establish after Footlink and Medi-feet, but in
term of size, the three companies are almost the same and compete for the same target
market. It is quite hard to compete using pricing strategies because this industry
requires high production cost because of the technology and materials used in
production. So, all the market players are competing through diversify of products
offering. Apart from that, they also compete through brand awareness campaigns to
position their brands in customers’ mind.
ii. Bargaining power of suppliers
The bargaining power of suppliers for Medshoe is low since there are only three (3)
medical footwear company in Malaysia including Medshoe, Medi-feet and Footlink.
30
Medshoe only have one (1) supplier from Malaysia and prefer to import most the
materials from other countries such as China, Japan, Thailand, Vietnam, US, UK and
Korea. This is because, even though the suppliers are from overseas and require high
logistic cost and duty import imposed by government, but the price of materials are
cheaper and high quality compared to Malaysia’s suppliers. Apart from that, only few
companies that venture in medical footwear industry and all of them are mostly
import their materials from China. Besides that, Malaysia did not own a technology
for making medical insole like what US did. Therefore, Medshoe prefer to choose to
import materials from other countries.
iii. Threat of new entrants
Currently, there are only three (3) brands that are dominant in the medical footwear
industry. New entrants in medical footwear industry are highly possible because this
industry is not penetrating yet and have opportunity to be expended in future. Most of
the medical footwear manufacturer are focusing on diabetic problems faced by
customers but there are many other health issues that can be focus by the medical
footwear manufacturer.
iv. Bargaining power of buyers
Since medical footwear is a niche market, most of the market players focus on
specific area of expertise such as diabetic footwear and posture footwear. Buyers have
low bargaining power because of the limited numbers of medical footwear companies
that offer the products and the products offering are almost the same in price and
features. Apart from that, buyers have limited access to the information about the
products since many are still not aware about this industry.
v.
Threat of substitute products
Threat of substitute products are low in this industry because not many companies
offer medical footwear. Plus, the price also almost the same for all companies and it is
usually quite expensive because of the benefits offer by the products. Besides that, the
products offering by all market players in this industry are quite undifferentiated.
Customers also lack in information about the industry to make comparison about the
products and its features.
31
3.3 EFA table
No
Factors
Political factors
1 Implementation of MCO by government during Covid19
2 Regulations by Customs on imported products
Relative
importance
rating (A)
(1-10)
Weight (B)
Capability
Score (C)
(1-10)
Weighted score Opportunity (A-C) Threat
(D) (BxC)
(E) largest
(F)
(D)
largest
(A-C)
7
0.02
5
0.11
2
9
0.03
7
0.20
2
3
Control of imported products by government to
encourage domestic industry
9
0.03
3
0.09
6
T1
4
People are restricted to travel overseas which effected
tourism industry in Malaysia.
8
0.03
4
0.10
4
T3
5
Tariffs imposed by government on imported products
9
0.03
4
0.12
5
T2
6
Implementation of social distancing especially in retail
shops
MATRADE support footwear industry exportation
7
0.02
5
0.11
2
7
0.02
6
0.13
1
10
0.03
7
0.22
3
7
Economic factors
1 Duty import imposed by government on imported
products to the Malaysian manufacturer.
32
2
Decrease in monthly income of Malaysian
10
0.03
8
0.26
3
4
5
6
Increase in unemployment rate
Increase in globalization
Currency fluctuation
Most of Malaysia footwear are exported to South East
Asia
Malaysia footwear industry changed from commoditybased to industry based.
6
7
8
10
0.02
0.02
0.03
0.03
5
6
4
8
0.10
0.13
0.10
0.26
6
0.02
4
0.08
2
8
Revenue gain from footwear industry is expected to
increase from 23.6% in 2021 to 34.7% in 2025 due to
increase in the use of e-commerce
7
0.02
7
0.16
0
9
Cheaper price of raw materials from China
9
0.03
7
0.20
2
9
0.03
8
0.23
9
0.03
6
0.17
3
3
Elderly customers hard to adapt with technological
changes
Change in trend and fashion by consumers
8
0.03
8
0.21
0
4
Lack in customers awareness on medical footwear
9
0.03
8
0.23
5
Lack of awareness on the importance of footcare by
people
9
0.03
7
0.20
7
Social factors
1 Increase in customers concern toward health issues
2
33
O3
2
O2
1
1
4
2
O4
O5
T4
1
1
2
T5
6
Lack in awareness on medical footwear in European
countries
Technological factors
1 Increase in the use of online platforms for selling
7
0.02
7
0.16
10
0.03
9
0.29
Lack of medical footwear manufacturing technology in
Malaysia
Increase in number of internet users in Malaysia
9
0.03
8
0.23
1
8
0.03
7
0.18
1
Advance technology use from US supplier in medical
footwear
Environmental factors
1 Increase in the numbers of Covid-19 cases
9
0.03
8
0.23
1
7
0.02
6
0.13
1
2
3
4
0
O1
1
2
High number of diabetic patients in Malaysia
7
0.02
8
0.18
-1
3
Low in competition among medical footwear industry
8
0.03
8
0.21
0
4
5
Restriction of travelling overseas
Long working hours in most of the occupations
7
9
0.02
0.03
5
7
0.11
0.20
2
2
8
0.03
6
0.15
2
10
0.03
6
0.19
4
Competitive factors
1 Own the first medical footwear manufacturing in
Malaysia
2 Low number of competitors in market
34
3
Most competitors are using US technology that have
accreditation from American Podiatric Medical
Association (APMA)
8
0.03
9
0.23
-1
4
Ettijar own government customers through contract for
Nurve
Customers have limited choices of design and style for
medical shoes in market compared to regular shoes
8
0.03
7
0.18
1
7
0.02
6
0.13
1
6
Limited choices for local supplier in medical footwear
because of its high cost and lack of technology
8
0.03
6
0.15
2
7
Malaysia recorded a significant increase in exports of
Malaysian footwear to European countries with support
by MATRADE which encourage footwear exportation.
9
0.03
8
0.23
1
312
1
5
Table 1 : External Factors Analysis
35
Table 1 show an external factors analysis which indicates the factors that
might be opportunities or threats to the company. The first factors for external
factors analysis are political factor. Political factor is where the government
intervention or decisions might affect the business or any other businesses in the
industries. Political factor is including policy, degree of political stability, tax
policy, laws, trade restriction and foreign trade policy (B2U, 2016). As for Ettijar
Enterpise Sdn Bhd, there are few political factors that might affect the business
which the first one is the government decision on the implementation of MCO.
There are two (2) stages of MCO which are MCO1.0 which started in March 2020
and MCO 2.0 which started in the early of 2021. There are many rules and
regulations stated under the implementation of MCO which are restricted to travel
whether overseas or interstates, restriction of visitors allowed in one place and
requirement to wear mask at all time in public places. As Ettijar used to promote in
retail, the implementation of MCO really effect the business as customers cannot
go for shopping as usual. As Medshoe production depend heavily on imported
products, government rules on Customs requirements and tariffs effect Medshoe
especially on the cost of imported products and logistic.
The second factor is on economic factors which is looking on the economic
growth of the country such as inflation rate, unemployment rate, exchange rate and
household income (B2U, 2016). During the pandemic outbreak, there are many
changes happened in the Malaysian economic where the economic is not stable as
many people lost job and many businesses failed to survive. Despite of economic
downfall, the footwear industry is expected to grow in year 2025 because of the
increase in the globalization and digitalization. Besides that, Medshoe also rely on
the China products for most of their materials use in production because of the
cheaper price offered. However, increase in unemployment rate and decrease in
household income effect the customers buying behaviour where the disposable
income of customers also decreases, and people tend to save more for emergency
use.
The third factor is social factor where this factor is focusing on the
demographic characteristics, norms and values of the people. These are including
the age distribution, income distribution, safety emphasis, health awareness,
36
lifestyle and culture barriers (B2U, 2016). Since Medshoe is related with medical
footwear which this industry is still consider new in the market, people still lack
awareness about the products even though people started to care about their health
especially during the pandemic. Apart from that, the evolving use of digitalization
make it easy for online purchasing, however, the elderly people still having a hard
time to adapt with the changes especially in term of choosing shoes size through
online and online payment.
The fourth factor is a technological factor where technology incentives,
level of innovation, R&D improvement and technological awareness are
considering to the factors that affect the business performance (B2U, 2016).
During the pandemic, the awareness on online platform are increasing and many
people started to change their lifestyle by using more internet and online platform
in daily life. Apart from that, Medshoe main collaboration is with the US where
they use US technology to make the medical footwear specifically the insole
because Ettijar believe that US are using the best technology for medical shoes
compared to the others.
The fifth factor is on environmental factor. These factors include ecological
and environmental aspects such as weather, climate, environmental offsets and
climate change (B2U, 2016). As for Medshoe, the environmental factor that might
affect the business is where there are in increasing number of diabetic people in
Malaysia. Medshoe should take this opportunity to promote their products to these
target market as many people still not aware about the existence of medical
footwear for diabetic people. Besides that, the long working hour for many jobs
really made the people feel uncomfortable in their regular shoes. So Medshoe
should create awareness to them to wear Medshoe and expand their market.
The last factor is on competitive factor which according to Strategic
Management book second Edition, competitive factor involves analysing the
competitors’ strategies and capabilities along with the strengths and weaknesses
which can be used to identifying the competitors’ behaviour. Competitive factors
that can be found in Ettijar is that Medshoe is the first company that own medical
footwear manufacturing in Malaysia. Other competitors import the products from
overseas especially China. Apart from that, Medi-feet and Medshoe use
37
technology from US with the accreditation from American Podiatric Medical
Association (APMA) because US own the best technology in medical shoes
especially in manufacturing insoles.
4. Internal environment analysis
4.1 Vision and mission statement
4.1.1 Current Vision and mission statement
Vision statement is a statement about what the organization wants to
become (Strategic Management 2nd Ed, 2014). Vision statement should reflect
the organization’s capability and provide direction for the organization while
giving motivation to the organization and also people around them. As for
Ettijar, their vision statement is:
“To provide the most quality products, management and have a
good procedure for manufacturing so that we can deliver the best product
to our customers”.
Mission statements reflect how the organization is managed today
(Strategic Management 2nd Ed, 2014). A good mission statement should
comprise of nine (9) elements which are customers, products or services,
markets, technology, concern for survival, growth and profitability,
philosophy, self-concept, concern for public image and concern for employees.
As for Ettijar, their mission statement is:
“We want everyone to wear our shoes and we want the nurses
wear our shoes and our uniform.”
4.1.2 New vision and mission statement
Vision
:
To become a well-known medical shoes manufacturing and medical
attires supplier in Malaysia and global.
38
Mission
:
To manufacture the high-quality shoes and medical attires
to
all
customers and becoming a brand that is most concern towards
customers’ health through the adaptation of technology advancement
in manufacturing while providing the best service for all for now and
future.
4.2 Company’s objectives
It is very important for an organization to have an objective. Objectives
indicate what the expected outcome that the organization want to achieve
within a specific time frame. Objectives is to ensure that all strategies are align
across the departments in an organization so that the goals can be achieve.
SMART objective was first introduced by George Doran, Arthur Miller and
James Cunningham in 1981. SMART was introduced as a guideline for
constructing objectives and goals which consist of S(Specific), M
(Measurable), A (Attainable), R (Realistic) and T (Timely).
People are still lack of awareness and information about medical
footwear whether in Malaysia or other countries. Since 50 percent of Ettijar
revenue are allocate for positioning and branding, Ettijar are looking forward
to creating more awareness about their brand and expand the market globally.
Ettijar objective is to be the most well-known brand for medical footwear and
medical attires in ten (10) years locally and globally by making their products
available at most of the online platforms.
4.3 IFA table
Internal factor analysis is used to identify any factors that exist within
the company that might be the strengths and weaknesses for the company.
According to Maddy Mirkovic, internal analysis is to determine the
organizations’ resources, competencies and competitive advantages that can
be used for decision making process and strategic planning (Cascade, 2019).
Under internal factor analysis, there are four (4) factors that should be
investigate which are management, marketing, finance and operation.
39
The importance of identifying list of IFA is to identify the resources
and capabilities that company own which can be used to counter the threats
and weakness that occur in the company or industry. IFA also can be part of
competitive advantage for the company which carry a unique value for the
company that differentiate the company with the competitors.
40
No
1
2
3
4
5
6
7
1
2
3
4
5
6
Factors
Management
Own customers database
75% of Ettijar operation are focusing on
Medshoe
Formed a HR department that comprise of
employees that is expertise in HR matter
Hired a degree level for employees
Good leadership by management
Mission of company is too general
Have 6 departments in company's
organization
Marketing
Offer shoes that is affordable under
'Medshoe style' category
Offer footwear that is suitable for long hours
walking
Introduced affiliate system
Use social media such as FB lives and
Instagram to promote products
Offer shoes for diabetic people and for other
foot problems
Overshadow by Medi-feet in Shopee
platform
Importance in
the industry
(1-10) (A)
Weighted
(B)
10
5
0.047
0.023
8
8
0.0017
0.0009
7
0.033
6
0.0009
1
7
5
7
5
0.033
0.023
0.033
0.023
6
5
4
8
0.0009
0.0005
0.0006
0.0009
1
0
3
-3
9
0.042
7
0.0014
2
10
0.047
8
0.0017
7
9
0.033
0.042
6
7
9
0.042
9
0.042
41
Capability Weighted Strength
(1-10) (C)
(D)
(largest D)
(E)
S4
(A-C)
Weakness
(largest AC) (F)
2
-3
S5
2
0.0009
0.2930
S1
1
2
8
0.0016
S2
1
4
0.0008
5
W5
W1
7
1
2
3
4
5
6
Sell products through website and Shopee
Finance
Gain millions of profits in a year
Gain profits every month during the
pandemic
Easy to apply for financial aids because of
good reputation with bank
50% of revenue allocate for branding and
positioning
Decline in retail sales
Decline in sales from the elderly customers
8
0.037
6
0.0010
2
9
9
0.042
0.042
8
7
0.0016
0.0014
9
0.042
7
0.0014
2
7
0.033
6
0.0009
1
7
7
0.033
0.033
3
4
0.0005
0.0006
4
3
8
0.037
8
0.0014
0
6
0.028
7
0.0009
-1
S3
1
2
2
Operation
Involve in government tender for nurses’
products
Own medical footwear factory in China
3
Open new medical footwear factory in Ipoh
6
0.028
7
0.0009
-1
4
Achieved awards for Super Health Brand
and Super Women Award
Offer various types of products offering
such as men shoes, uniform shoes, unisex
shoes, etc
Using Poron and microfiber as materials to
made footwear
7
0.033
8
0.0012
-1
5
0.023
8
0.0009
-3
5
0.023
6
0.0006
-1
1
5
6
42
W2
W3
7
8
9
Depend on imported materials from
overseas such as US, Japan, India, Pakistan,
Korea, etc
Hired 2 professional shoemakers
Own a good logistic
8
0.037
5
0.0009
3
7
8
215
0.033
0.037
1
7
8
0.0011
0.0014
0
0
Table 2 : Internal Factors Analysis
43
W4
Table 2 shows internal factors analysis of Ettijar Enterprise Sdn Bhd.
As for Ettijar organizational management, they have six (6) departments
which are operation, media, retail, finance, human resources and production.
The existence of these departments made it easier for Ettijar to manage the
jobs as Ettijar own two (2) businesses which are Medshoe and Nurve.
However, 75 percent of the job are focusing on Medshoe while another 25
percent is on Nurve. Since Ettijar are expanding widely, they hired a degree
level for their employees rather than SPM level during the early of the
establishment. Ettijar are looking for motivated people to work for them and
willing to learn new things. Besides that, Ettijar also own a customers’
database which make it easier for them to do the market research and know
their customers well.
For marketing factor, Medshoe basically try to adapt with the latest
online shopping platform such as Shopee, Facebook live, Instagram and
website. However, the Shopee platform are still dominated by Medi-feet and
other small businesses. Apart from that, other than promoting a medical shoe
that suitable for long hours walking, Medshoe also offer an affordable medical
shoe under the brand Medshoe style which offer the cheapest price among the
others. Recently, Medshoe try to help the Malaysian who are losing job and
income by offering an affiliate system to help them gain income while
reducing the number of employees working in the company.
As for finance, Ettijar have a good finance situation as they manage to
gain profit even during the pandemic. Medshoe faced declining of sales from
the elderly customers as these market segments are having a hard time adapt
with the technology changes especially for choosing sizes and online payment.
Besides that, Medshoe also faced declining in retail sales during the MCO
because of the restrictions from the government especially requirement for
applying social distancing in crowded places. Despite of having those
problems, Medshoe manage to gain millions of profits in a year and having a
good reputation with bank which make it easier for them to apply for financial
aids in future.
44
Most of Ettijar operations are involving other countries. It is because
they rely heavily on the imported materials such as Poron and microfiber from
Japan, Korea, Vietnam, Thailand and China. They also adapt the technology
from US for making insole since the quality is good compared to other
countries. Since most of the materials are imported, Ettijar ensure that they
have a good logistic to import all the materials. In March 2021, Ettijar open a
new factory in Ipoh since it is easier for them to monitor the factory compared
to the factory in China especially during the pandemic. Medshoe also hired
two (2) professional shoemakers that work for them to made and design all the
shoes according to the demand of customers. Not only in medical shoes,
Ettijar also involve in production of nurse’s products such as uniforms, caps,
hijabs and disposable items. These products are selling through tender with
government under the brand Nurve.
45
5. Generating alternative strategies
5.1 SWOT-TOWS Matrix
Strengths (S)
Weaknesses (W)
1. Use social media such as FB lives and 1. Overshadow by Medi-feet in Shopee platform
Instagram to promote products
2. Decline in retail sales
2. Offer shoes for diabetic people and other foot
3. Decline in sales from the elderly customers
problems
3. Gain millions of profits in a year
4. Depend on imported materials from overseas
such as US, Japan, India, Pakistan, Korea, etc
4. Own customers database
5. Mission of company is too general
5. Offer footwear that is suitable for long hours
walking
Opportunities (O)
SO strategies
WO strategies
1. Increase in the use of online 1. Export footwear to South East Asia countries
platforms for selling
such as Indonesia, Vietnam, Thailand, Laos etc.
(S4, S3, O2)
2. Most of Malaysia footwear are
exported to South East Asia
2. Promote footwear for Hajj and Umrah. (S5, O1,
O2, O4)
3. Decrease in monthly income of
Malaysian
3. Hire brand ambassador to promote and create
awareness about the product to market. (S1, S4,
46
1. Perform in Shopee lives regularly which can
assist on lives purchase especially in term of
choosing size (W1, O1, O4, O5)
2. Introduce Cash on Delivery system (COD).
(W2, W3, O1, O3)
3. Target adult (20-39 years old) and middle age
adult (40-59 years old) which this age range are
4. Increase in customers
toward health issues
concern O1, O3, O5)
mostly working and doing activities. (W3, W5,
O1, O4)
4. Provide testimonies from existing Medshoe
5. Lack in customers awareness on users in social media (S1, O1, O5)
4. Use video in FB, Instagram and website to
medical footwear
promote products in order to enhance the features
5. Introduce dropshipping programme to create and benefits of the products (W2, O1, O4, O5)
awareness and provide job for Malaysian. (S1, S4,
O1, O3, O5)
5. Close retail store that has low sales (W2, O1)
Threats (T)
ST strategies
WT strategies
1. Control of imported products by 1. Export footwear to overseas. (S1, S3, S4, T1,
government to encourage domestic T3)
industry
2. Promote using pamphlets and poster in
2. Tariffs imposed by government on hospital, pharmacy and clinic (S2, S5, T5)
imported products
3. Collaborate with health and fitness company
3. People are restricted to travel and develop application that is user friendly and
overseas which effected tourism have customer support to assist on the purchase
industry in Malaysia.
which is available for customers to track diabetic
level and purchase shoes via apps (S2, S3, S4, T5)
4. Currency fluctuation
4. Open shop for Medshoe in private hospitals
5. Elderly customers hard to adapt with (S2, S3, S5, T1, T5)
technological changes
5. Promote existing products using television ads
(S2, S3, S4, S5, T1)
Table 3 :SWOT-TOWS Matrix
47
1. Change to local suppliers (W4, T1, T2, T4)
2. Hire agents/affiliate in each region to be
incharge for promoting, ordering and delivery.
(W2, W3, T5)
3. Offer coupons via email to retain existing
customers (W1, W2, T5)
4. Promote through home shopping platform such
as Wowshop to enhance the products benefits and
features (W1, W2, W3, T1, T5)
5. Reduce the number of countries that supply
materials to reduce cost of logistic, tariffs and
currency fluctuation. (W4, T1, T2, T4)
Table 3 is a SWOT-TOWS analysis is one of the business tools that been used
widely in order to come out with strategies based on the internal and external factors
that highly related with the business (Mind Tools, 2020). Strength (S) and Weakness
(W) represent internal factors that affect the business while Opportunities (O) and
Threats (T) represent external factors that affect the business and other industries as
well. External factors analysis is a set of threats and opportunities facing by the
company and even might affect other business in the same industry or other industries
while internal analysis helps the company to identify its strengths and weaknesses
which is also can help the company to understand which of the resources owned by
the company that are likely to be the competitive advantage (Journal of International
Social Research, 2017).
According to Samriti Kapoor, TOWS analysis is crucial in order to facilitate
cross-matching among strengths, weaknesses, opportunities and threats and come out
with a relevant strategy (Journal of Business Perspective, 2017). Under TOWS
analysis, there are SO, WO, ST, WT which resulting from a cross-matching of SWOT.
SO indicate how the company use its strengths to take advantage of the opportunities
that arise in the market. WO indicate the strategies that can be implement by company
to take advantage of the opportunities in order to overcome the weakness of the
company. Combination of ST is a list of strategies that company can implement to use
its existing strengths to avoid the potential threats of the market. The last analysis is
on WT where the company can minimize the weakness and avoid threats.
48
5.2 SPACE Model
5.2.1
SPACE table
No
Aspect
Factors
Impact score
Capability
Calculation of
1-10
score 1-10
(ES) and (IA)
-3.81
Environmental stability factors
1
Environmental
Increase in the numbers of Covid-19 cases
6
6
2
Environmental
High number of diabetic patients in Malaysia
7
8
3
Environmental
Restriction of travelling overseas
5
5
4
Environmental
Long working hours in most of the occupations
7
7
5
Technological
Increase in the use of online platforms for selling
9
9
6
Technological
Lack of medical footwear manufacturing technology in Malaysia
8
8
7
Technological
Increase in number of internet users in Malaysia
9
7
8
Social
Elderly customers hard to adapt with technological changes
7
6
9
Social
Change in trend and fashion by consumers
6
8
10
Social
Lack in customers awareness on medical footwear
7
8
11
Economic
Duty import imposed by government on imported products to the
8
7
6
8
Malaysian manufacturer.
12
Economic
Decrease in monthly income of Malaysian
49
13
Economic
Increase in unemployment rate
5
5
14
Economic
Increase in globalization
5
6
15
Economic
Currency fluctuation
7
4
16
Political
Implementation of MCO by government during Covid-19
8
5
17
Political
Regulations by Customs on imported products
6
7
18
Political
Control of imported products by government to encourage
5
3
5
4
domestic industry
19
Political
People are restricted to travel overseas which effected tourism
industry in Malaysia.
20
Political
Tariffs imposed by government on imported products
6
4
21
Political
Implementation of social distancing especially in retail shops
6
5
Total
130
Average
6.19
Industrial attractiveness factors
1
Competitive
Own the first medical footwear manufacturing in Malaysia
5
6
2
Competitive
Low number of competitors in market
7
6
3
Competitive
Most
8
9
competitors are
using
US
technology
that have
accreditation from American Podiatric Medical Association
50
7.08
(APMA)
4
Competitive
Ettijar own government customers through contract for Nurve
7
7
5
Competitive
Customers have limited choices of design and style for medical
5
6
8
6
4
8
Low in competition among medical footwear industry
6
8
shoes in market compared to regular shoes
6
Competitive
Limited choices for local supplier in medical footwear because of
its high cost and lack of technology
7
Competitive
Malaysia recorded a significant increase in exports of Malaysian
footwear to European countries with support by MATRADE
which encourage footwear exportation.
8
Environmental
9
Social
Increase in customers concern toward health issues
7
8
10
Social
Lack of awareness on the importance of footcare by people
4
7
11
Social
Lack in awareness on medical footwear in European countries
4
7
12
Economic
Most of Malaysia footwear are exported to South East Asia
5
8
13
Economic
Malaysia footwear industry changed from commodity-based to
4
4
5
7
industry based.
14
Economic
Revenue gain from footwear industry is expected to increase
from 23.6% in 2021 to 34.7% in 2025 due to increase in the use
of e-commerce
51
15
Economic
16
Political
17
Technological
No
Cheaper price of raw materials from China
9
7
MATRADE support footwear industry exportation
7
6
Advance technology use from US supplier in medical footwear
6
8
Total
92
Average
7.08
Aspect
Factors
Impact score
Capability
Average score
1-10
score 1-10
of (FS) and
(CA)
Financial stability factors
1
Finance
Gain millions of profits in a year
9
8
2
Finance
Gain profits every month during the pandemic
9
7
3
Finance
Easy to apply for financial aids because of good reputation
8
7
with bank
4
Finance
50% of revenue allocate for branding and positioning
7
6
5
Finance
Decline in retail sales
5
3
6
Finance
Decline in sales from the elderly customers
6
4
Total
35
52
5.83
Average
5.83
Competitive advantage factors
1
Management
Own customers database
9
8
2
Management
75% of Ettijar operation are focusing on Medshoe
8
8
3
Management
Formed a HR department that comprise of employees that
3
6
is expertise in HR matter
4
Management
Hired a degree level for employees
4
6
5
Management
Good leadership by management
4
5
6
Management
Mission of company is too general
5
4
7
Management
Have 6 departments in company's organization
2
8
8
Marketing
Offer shoes that is affordable under 'Medshoe style'
9
7
category
9
Marketing
Offer footwear that is suitable for long hours walking
8
8
10
Marketing
Introduced affiliate system
6
6
11
Marketing
Use social media such as FB lives and Instagram to
5
7
promote products
12
Marketing
Offer shoes for diabetic people and for other foot problems
7
8
13
Marketing
Overshadow by Medi-feet in Shopee platform
9
4
53
-3.24
14
Marketing
Sell products through website and Shopee
8
6
15
Operation
Involve in government tender for nurses’ products
3
8
16
Operation
Own medical footwear factory in China
4
7
17
Operation
Open new medical footwear factory in Ipoh
7
7
18
Operation
Achieved awards for Super Health Brand and Super
8
8
5
8
Women Award
19
Operation
Offer various types of products offering such as men shoes,
uniform shoes, unisex shoes, etc
20
Operation
Using Poron and microfiber as materials to made footwear
5
6
21
Operation
Depend on imported materials from overseas such as US,
5
5
Japan, India, Pakistan, Korea, etc
22
Operation
Hired 2 professional shoe makers
7
7
23
Operation
Own a good logistic
9
8
Total
115
Average
6.76
Table 4 : SPACE Matrix
54
Table 4 ia a SPACE Model were first introduced by Rowe et al in 1982
which this model comprised of four (4) dimensions which are industrial
attractiveness (IA), environmental stability (ES), financial strengths (FS) and
competitive advantage (CA) (Strategic Management 2nd ed, 2014). SPACE
Model also divide each of the dimensions into two (2) factors which are
internal and external. IA and ES were classified as external environment factor
while FS and CA were classified as internal factor. SPACE matrix is
represented by two (2) axis which are X-axis and Y-axis which also including
positive and negative scale range. SPACE matrix is chosen as one of the
models to determine an appropriate strategy is because SPACE matrix consist
of four (4) quadrant that can help to determine whether the suitable strategy to
implement are falls under conservative, aggressive, competitive or defensive.
Intercept points
: (Average of CA-IA) =1.83 - X-axis
: (Average of ES-FS) =1.01 - Y-axis
FS
5.83
Aggressive
(1.83,1.01)
CA
IA
7.08
-3.24
-3.81
ES
Figure 2: SPACE matrix quadrants
55
Figure 2 is a SPACE matrix quadrant which consist of four (4) quadrants.
According to the result of SPACE matrix, the average points lie on quadrant between
FS and IA which indicate an aggressive strategy. Aggressive strategy promotes
expansion of the market share, horizontal integration, market penetration, market
development and acquisition (Strategic Management 2nd ed, 2014). This quadrant is
more towards strategies to expand the business line on e-commerce, develop
marketing strategies and promotions as the company have good financial
position
to
overcome
its
weaknesses
and
take
advantage
of
the
opportunities.
5.2.2 SPACE strategies
i.
Send promotional emails to subscribers in order to ensure
they did not miss any new products and promotions.
ii.
Offer discounts to existing customers during birthday to
retain customers’ loyalty and lead to promotional through
word-of-mouth about the products.
iii.
Conduct giveaways and contest to attract new customers and
create awareness.
iv.
Offer new products line in footwear accessories such as shoes
polish,
shoes
lace,
socks
and
dubbin
(to
soften
and
waterproofing) leather shoes to penetrate the market.
v.
vi.
Launch new products through television advertisement.
Conduct a strategic alliance with shoes designer to improve
products development and design.
5.3 Big Think Strategy
Big think strategy is relating with a process of brainstorming a list of ideas that
is creative as an initiative for market-changing within the companies (Schmitt. B,
2007). Big think strategy is chosen as one of the tools to generating ideas is
because this strategy can promote creative ideas and using “think out of the box”
approach. In order to execute big think strategy, a few processes must be done in
order to ensure the capabilities of the company to execute the strategies. The first
56
step in implementing big think strategy is through idea generation. The second
step is by evaluating the ideas which is to see the ability of the company to
implement the ideas. The next step is refining alternatives where during this stage,
all the ideas that been generate through brainstorming activities can be implement
using the existing resources of the company. Then, the process will be going
through the implementation and lastly is monitoring where it is to see whether the
action plan is being implement accordingly.
57
5.3.1
Ideas generation and requirements
No Strategies
Requirements
1. Implement Corporate Social Responsibilities
i.
Adequate funding
(CSR) during COVID-19 by charitable giving ii.
Good in social media promotion
of shoes to doctors and nurses
iii.
Have support from third party. Ex: Hospitals and
Ministry of Health
2.
List Medshoe in Bursa Malaysia main market
to ensure support and assist on capital raising
needs
i.
Profit of 3-5 financial years must be at least RM20
million
ii.
Have operate in same core business prior of the
submission
iii.
Must have the right to build and operate an infrastructure project
within or outside Malaysia, with costs not less than RM500
million
(Bursa Malaysia, 2021)
3.
Introduce personal design shoes to attract
influencers in order to promote style and
healthy shoes
i.
ii.
iii.
4.
Introduce own company’s logistic for delivery
to ensure the best services provided
i.
Adequate funding
ii.
Obtain proper licenses
iii.
Develop logistic department
(Startup Magazine, 2021)
58
Hire shoes designer
Adequate funding
Good in social media promotion
5.
Collaboration with shoe designer to join
i.
Adequate funding
‘Kuala Lumpur Fashion Week’ to be the first ii.
Outsource shoes designer
medical footwear that launch products in iii.
Application to organizer
Fashion Week events to create awareness (KLFW, 2021)
among influencers, celebrities and medias.
Table 5: Big think ideas generation and requirements
5.3.2 Evaluating the ideas
No
Strategies
1.
Implement
Corporate
Social
Responsibilities (CSR) during COVID-19
by charitable giving of shoes to doctors
and nurses
Evaluating
classifications
‘Good to have idea’
Expected results
i.
ii.
iii.
2
List Medshoe in Bursa Malaysia main
market to ensure support and assist on
capital raising needs
‘Good to have idea’
i.
ii.
3.
Introduce personal design shoes to attract
influencers in order to promote style and
Differentiation strategy
from competitors
i.
59
Create good image for the brand while
contribute to the society
Create awareness to potential customers lead
to market penetration
Can be achieve within 1-2 years
Promote external financial aids and support
Require 5-6 years to achieve
Venture
in
‘premium’
products
introducing high end products
by
healthy shoes
4.
5.
ii.
Introduce own company’s logistic for
delivery to ensure the best services
provided
‘Good to have idea’
Collaboration with shoe designer to join
‘Kuala Lumpur Fashion Week’ to be the
first medical footwear that launch
products in Fashion Week events to
create awareness among influencers,
celebrities and medias.
‘Wow idea’
i.
ii.
Table 6: Big think evaluating ideas
60
i.
ii.
iii.
iv.
Strengthen the brand’s image
Control company’s logistic to ensure good
service provided
Reduce risk from logistic
Require collaboration
Strengthen company’s image and brand
Create awareness to public
Penetrate market and market expansion
5.3.3 Refining ideas
Refining characteristics
No
Strategies
1.
Implement Corporate Social Responsibilities
(CSR) during COVID-19 by charitable giving of
shoes to doctors and nurses
List Medshoe in Bursa Malaysia main market to
ensure support and assist on capital raising
needs
Introduce personal design shoes to attract
influencers in order to promote style and healthy
shoes
Introduce own company’s logistic for delivery to
ensure the best services provided
Collaboration with shoe designer to join ‘Kuala
Lumpur Fashion Week’ to be the first medical
footwear that launch products in Fashion Week
events to create awareness among influencers,
celebrities and medias.
2
3.
4.
5.
Have adequate
resources
(financial/skilled
workers)
61
Need for
collaboration
Have value
added
(social/employ
ment/uplift
land value)
Require
assistant/suppo
rt from others
(Etc: Tourism
ministry)
Refining stage is where to see which from all of the strategies are possible to
be implement according to the existing resources that Medshoe own and any
additional requirements that need to be fulfil in order to implement the strategies.
According to the requirements and expected results that Medshoe might get if they
implement those strategies, after considering existing resources and requirements
needed to implement the strategies, the best strategies to be implement are
implementing CSR during COVID-19 by charitable giving of shoes to
doctors and nurses, introduce personal design shoes to attract influencers
in order to promote style and healthy shoes and introduce own company’s
logistic for delivery to ensure the best services provided.
Since currently Malaysia in the middle of pandemic outbreak, Ettijar can take
this opportunity to create brand image by involve in CSR especially which that related
with supporting and assisting the control of the pandemic activities. Ettijar can
implement this strategy by charitable giving of shoes to doctors and nurses.
Even though this strategy seems to cost money to Ettijar, however, Ettijar
have good financial record and made millions of profits each year.
Conducting CSR is one of the ways that Ettijar can use to publicise their
Medshoe brand. A part from that, CSR are not only give positive impact
on Medshoe image but also contribute to the society and benefits to all.
Medshoe try to promote healthy shoes that is also stylish to be wear
for all stages of ages. In order to do so, Medshoe can collaborate with
shoe designer to design more stylish shoes which can offer healthy shoes
with stylish design to customers. Since Medshoe already own two (2) shoe
makers, this strategy is quite easy to implement because they already own
a skills worker for operation purpose. A part from that, this strategy can
help Medshoe to attract high end customers which these shoes can be sell
for higher price and targeted for more loyal customers.
Logistic usually comes with high risk. The risks are usually come
from the logistic company that sometime did not perform their job as
expected which cause Ettijar need to bear for the loss that unsatisfaction
among customers. In order to avoid risk of logistic, Ettijar can come out
62
with own logistic where it’s not only to avoid risk but also to provide job
employment to Malaysian. It will benefit the society a part from ensuring
the best services can be given by Ettijar to customers. Besides that, having
‘Medshoe logistic’ help to reassure the trustworthiness of the customers
and can create awareness about the brand to the public.
6. Consolidated strategies
No
Strategies
1.
Export footwear to overseas.
2.
Export
From
Group
SWOT
Seek
footwear
to
South
East
Asia
SWOT
for
new
overseas market
countries such as Indonesia, Vietnam,
Thailand, Laos etc.
3.
Collaborate with health and fitness company
SWOT
and develop application that is user friendly
and have customer support to assist on the
4.
purchase which is available for customers to
Outsourcing
for
track diabetic level and purchase shoes via
products
and
apps
services
Conduct a strategic alliance with shoes
designer
to
improve
SPACE
products
development and design.
5.
Promote existing products using television
SWOT
ads
6.
Promote through home shopping platform
SWOT
such as Wowshop to enhance the products
benefits and features
7.
Offer coupons via email to retain existing
SWOT
customers
8.
Perform in Shopee lives regularly which can
SWOT
assist on lives purchase especially in term of
choosing size
9.
Send
promotional
emails
63
to
SPACE
development
subscribers in order to ensure they did
Increase
not
share
miss
any
new
products
and
promotions
10.
various
Offer discounts to existing customers
SPACE
market
through
marketing
tools
during birthday to retain customers’
loyalty
and
through
lead
to
word-of-mouth
promotional
about
the
products.
11.
Conduct giveaways and contest to
attract
new
customers
and
SPACE
create
awareness.
12.
Use video in FB, Instagram and website to
SWOT
promote products in order to enhance the
features and benefits of the products
13.
Change to local suppliers
SWOT
14.
Reduce the number of countries that supply
SWOT
Reduce
cost
on
overseas suppliers
materials to reduce cost of logistic, tariffs
and currency fluctuation.
15.
Hire agents/affiliate in each region to be in
SWOT
charge for promoting, ordering and delivery.
Incentive to ensure
enough
sales
personnel to create
16.
Introduce drop shipping programme to
SWOT
awareness
create awareness and provide job for
Malaysian.
17.
Close retail store that has low sales
SWOT
18.
Open shop for Medshoe in private hospitals
SWOT
Move away from
low
profitable
platform
change
and
to
high
profitable platform
19.
Target adult (20-39 years old) and middle
SWOT
age adult (40-59 years old) which this age
range are mostly working and doing
64
Penetrate a specific
activities.
target market
20.
Promote footwear for Hajj and Umrah.
SWOT
21.
Offer new products line in footwear
SPACE
accessories such as shoes polish, shoes
lace, socks and dubbin (to soften and
Market
waterproofing)
through concentric
leather
shoes
to
penetrate the market.
22.
Launch
new
expansion
diversification
products
through
SPACE
television advertisement.
23.
Implement
Corporate
Responsibilities
Social Big think Conduct CSR for
(CSR)
during
brand image
COVID-19 by charitable giving of
shoes to doctors and nurses
24.
Introduce own company’s logistic for Big think
delivery to ensure the best services
Improve
provided
services
25.
Introduce Cash on Delivery system (COD).
SWOT
26.
Hire brand ambassador to promote and
SWOT
logistic
create awareness about the product to
market.
27.
Provide testimonies from existing Medshoe
SWOT
users in social media
28.
Introduce personal design shoes to Big think
attract influencers in order to promote
style and healthy shoes
Table 7: Consolidation table
65
Create brand image
7. Prioritizing strategies
Selection criteria 1-10
High
No
Strategies
ROI
(max 6)
1=low, 10=high
Low risk
Low cost
(Not require (To reduce
high
expenses)
investment)
1
Seek for new overseas market
2
Outsourcing
Impact on
Adequate
Compatible
creating
number of
with current
awareness
employees
environmen
about the
(Avoid hire
t during
product and
more
COVID-19
brand
employees)
pandemic
Total
6
3
3
5
2
5
24
services
6
4
4
5
7
6
32
Increase market share through various
6
9
10
10
9
10
54 (1)
for
products
and
development
3
marketing tools
4
Reduce cost on overseas suppliers
4
7
8
2
6
5
32
5
Incentive to ensure enough sales personnel
5
7
7
9
6
9
43 (2)
4
6
6
7
5
7
35
to create awareness
6
Move away from low profitable platform and
66
change to high profitable platform
7
Penetrate a specific target market
8
Market
expansion
through
concentric
4
5
6
7
6
4
4
5
4
5
6
8
4
32
diversification
9
Conduct CSR for brand image
3
8
4
8
8
7
38 (3)
10
Improve logistic services
3
7
4
4
5
8
31
11
Create brand image
3
9
5
5
8
6
36
Table 8: Prioritization strategies
67
Table 8 shows a list of consolidated strategies which had been groping into
eleven (11) different strategies. Among eleven (11) strategies, three (3) is chosen as
the most possible strategies to be implement by Ettijar. In order to choose the most
prioritize strategies, a set of criteria is chosen as a guideline to indicate the most
important strategy to be implement.
“Increase market share through various marketing tools “strategy can
contribute towards high ROI which is six (6) as the cost spend on the strategy is not as
high as other strategy. Besides that, the result from the strategy is expected to be
significant as the current environment and lifestyle are supporting the digitalization
promotion apart from the businesses are competing between each other. As for
“Incentive to ensure enough sales personnel to create awareness” strategy, the ROI is
five (5) which is slightly lower than “Increase market share through various marketing
tools”. It is because, hiring agents through dropship or affiliate system might not
contribute towards high return as it is quite hard to control the agents or the agents
might not fully efficient in promoting the products.
The first criteria in choosing the most prioritize strategy is low risk. Low risk
is very important to be take into account in implementing any strategies especially
during the uncertainty economic situation where the COVID-19 are still within the
society which can affect the businesses any time. It is important for Ettijar to remain
low risk as the business even having low number of competitors among medical
footwear companies, but the size and products offering in the industry are
undistinguishable. A part from that, risk is determined and influence the company’s
performance (Fiegenbaum. A & Thomas. H, 2004). This is why choosing the low-risk
strategy is important to ensure that the risk is not affecting the company’s
performance in any way such as market risk, liquidity risk or operational risk
especially during this COVID-19 pandemic.
Second criteria are on low cost where Ettijar should always ensure that they
always have enough liquidity for the company. The amount spends on strategy should
adequate and not waste. Since COVID-19 shows no sign of ending, Ettijar should
always ensure the amount of money spending on strategy is not excessive. A part
from that, the competitors itself are using low-cost marketing strategies which is
68
through online marketing. However, the “Incentive to ensure enough sales personnel
to create awareness” strategy is scored as seven (7) due the cost that might incur when
there is a need for providing promotional materials to the agents.
Ettijar are trying to focus on creating awareness about medical shoes since the
medical shoes are still not popular among people. Refer to Part (1) section (7), which
mentioned why impact on creating awareness about the brand and products are very
important to ensure that people recognize Medshoe as a medical shoes’ provider.
Besides that, creating awareness can lead to many other advantages such as increase
in sales of domestic industry, expansion in sales of international market and
possibility of sustaining in the market for longer time. The second prioritize strategy
is scored as nine (9) for creating awareness since there might be a possibility of the
agents did not fully optimize in creating awareness about the product.
Since Ettijar is trying to not hiring more employees within the company but
instead hiring more affiliate agents in order to reduce cost of fixed salary expenses as
mentioned in Part 1 section (1.3)- organization structure, it is important to ensure that
the new strategies are not using too many employees which require Ettijar to hire
more employees. A part from that, optimizing the existing number of employees can
increase efficiency and reduce cost of hiring new employees and paying inefficient
employees.
Since the COVID-19 outbreak, the lifestyle of people started to change into
more techno-savvy lifestyle where everything is depending on digitalization as
mentioned in Part (1) section (4)-issues and challenges paragraph (6). This trend will
keep evolving and it is important for Ettijar to adapt with the current lifestyle and
trend of the public. Not only the competitors, but also the industries are changing
towards digitalization. So, the strategy that will be implement must also adapting the
current digitalization so that it is up to date and compatible with current environment
and lifestyle. As for “Incentive to ensure enough sales personnel to create awareness”
strategy, nine (9) which almost as same score as the first prioritize strategy. It is due
to the hiring agents might help in providing job to the people during the pandemic
especially in term of working online. However, it also less favourable compare to the
69
first prioritize strategy as it is not a permanent job to the people and only focusing on
gaining additional income.
8. Implementing the strategies
8.1 Strategic action plan
According to table 8, the highest scoring for strategy prioritization that Ettijar
can implement is by increase market share through various marketing tools. In order
to achieve the strategy and ensure the strategy is align with the objective, a strategic
objectives, tactical strategy and tactical objectives need to be identified. Strategic
objectives provide the company with a set of goals that are intended to be achieve
(Uraidi.N, 2016). Tactical strategy is important before implementing any strategy
because it contains a set of moves a company will make which can help to improve
its market share, competitive pricing, customer service or others that lead to
advantages to the company (Johnston.K, 2021). While tactical objectives can be
defined as the short-term desired result from the given activity, task, or mission
(SHRM, 2021).
i.
Chosen strategy:
Increase market share through various marketing tools
ii.
Strategic objectives:
“Place brand image in customers’ mind by increase the three (3) social
media and two (2) digital platforms impressions among target
audience in order to achieve an additional of 20% of new customers
and 20% increase in revenue within three years”.
iii.
Tactical strategy:
Organically strategy (company using own strengths and resources
without intervention of other companies in the same industry)
iv.
Tactical objectives:
Identify and analyze at least two (2) suitable e-commerce and three (3)
social media platforms to create digitalization traffic and create
awareness about the products and brand through achieving higher
Customer Satisfaction Score (CSAT) percent for each year.
70
8.2 Strategic annual action planning
Quarterly objectives
Tactical action
Date finished
Non-financial
Financial resources
resources
Q1: Identify and
•
Media department
analyze all available
identify all social
social media and e-
media and e-
commerce platform
commerce platform
through online
that use by public
survey and other
•
research method
Identify the pros and
•
31/7/2021
Customers’
charge
RM3,000
database
Seek data and
Media department
information
•
30/9/2021
•
31/10/2021
cons of each
platforms including
cost
Q2: Identify target
•
Conduct research on
audience and their
statistic
core interest in
audiences
social media
social
platform
platform
of
Department in
Customers’
database
target
preferred
Time
media
71
RM5,000
•
Identify the key to
•
30/11/2021
•
31/12/2021
•
31/1/2022
Media department
attractive posting in
social media
•
Finalize
the
effective
most
social
media platform to be
use
Q3: Create
•
Create few sets of
Software
RM10,000
Media department
engaging contents
posting contents for
and finance
to be publish
each of the selected
department
platform
•
Reevaluate
and
•
16/3/2022
proofing all contents
•
Select contents
•
31/3/2022
Q4: Create pre-
•
Publish contents
•
15/4/2022
posting to see the
•
Monitor
•
31/5/2022
acceptance of target
feedback
Time
Customers’
from target audience
72
RM7,000
and e-commerce
•
and social media
platforms are
identified
Collect feedback data
•
17/6/2020
•
30/6/2020
feedback
for postmortem
•
Identify
alternative
strategy
for
improvement
Table 9: Strategic annual action planning
73
Media department
8.3 Successful implementation phase
There are seven (7) factors that significantly can affect the successfulness of
the strategies that need to be taken into account by Ettijar. The seven (7) factors
are included organization structure, leadership role, the reward system, allocation
of resources, managing change, corporate culture and having a sound strategic
planning system (Strategic Management 2nd ed, 2014).
Organization structure plays a crucial role in order to ensure that the
strategies that will be implement align with the roles and expertise of available
departments in the company. Organization structure act as for influencing the
strategy implementation because it assists the communication and information
flow and assigns duties for selected department that in charge of each of the
activities involve (Veasey, 2001). The strategy chosen from prioritization
strategies which is ‘Increase market share through various marketing tools’ (refer
table 8) are related with marketing activities. Reasons for this strategy suitable to
be implement in Ettijar is because Ettijar already have media department which
specifically focus on all marketing activities and promotions. This department
already have knowledge and information about customers and existing
promotional activities which can assists for further marketing strategy
improvement. A part from that, Ettijar prefer not to hire more employees in the
organization. So, it is important for any strategy that will be implement are using
the existing personnel.
A poor leadership, has been identified as one of the major factors to an
effective strategy implementation (Jooste.C, 2009). Leadership role is as to guide
the employees and lead employees towards achieving the targeted goals. It is to
ensure that all activities perform are not fall far from the target. Ettijar promotes
flat organization structure which this kind of structure is suitable to promotes
employees’ creative and to solve problems by teams (Griffin.D, 2019). Strategy
chosen require employees to be creative and communication between top
management and employees. Apart from that, Ettijar usually have direct
communication between employer and employees which easy for information
74
flows and leading. A good communication in Ettijar can boost ideas generation
among employees. Besides that, the selected strategy and activities involved
require the employees to work as a team and have good communication and
leading within the organization where the top management will be able to explain
the new strategy to the employees.
Reward system is known as one of the alternatives to help the company to
create competitive advantage (Hsieh, Y. H, 2011). Reward system can be any
forms that is valuable for employees that can motivate them to work for achieving
the target. Reward systems can be in two (2) forms which are financial reward and
non-financial reward (Omolawal. S. A, 2017). During this COVID-19 pandemic
outbreak, people are struggling with the high standard of living and income
deficits. So, it is suitable for Ettijar to offer financial reward for the perform
employees which not only can motivate them but also to reduce their financial
burden. Besides that, Ettijar having millions of profit each year. So, it is not an
issue for Ettijar to implement financial reward system for their employees.
Financial reward system can be in form of giving bonus to the high-performance
department and financial department who work hard to achieve the targeted new
customers which is 20% at the end of each year. The new reward system is to
encourage the employees to focus on achieving the goals and strategy.
In implementing any strategies, adequate resources are very important to
ensure the smoothness of the strategy implementation. Resources which include
technology, employees, and finances help the organizations to run and allocating
the resources should be done carefully through planning (Ganley, 2010).
According to Ganley, all three (3) elements of resources are available to be use in
implementing strategies in Ettijar. In order to implementing ‘Increase market
share through various marketing tools’ strategy, Ettijar require information about
e-commerce and social media platform which some of the information can be find
through internet. Plus, the strategic objective for first quarter is collecting
information through online survey which all customers’ database already owned
by Ettijar. In term of finance, as mentioned, Ettijar gained millions of profit each
year and also have a good reputation with bank which easier for Ettijar to apply
for financing. On top of that, some of the marketing tools that will be use is free
75
which can reduce cost for Ettijar such as Facebook, Instagram and Shopee. Ettijar
already have media department which is in charge for marketing activities and
finance department which will monitor the expenses and profit gain from the
strategy. Ettijar does not require to establish new department which cost more
expenses in term of salary, recruiting and training. To be conclude, all needed
resources are already available in Ettijar to be utilize.
Accept the new strategy are mean to be able to accept the changes. Lack of
managing change can cause issues in implementing any strategies. A potential
crisis arises during managing change is divided into four (4) segments (STIRS)
which are consist of strategy, structure and system, individual roles and
technology (Strategic Management 2nd ed, 2014). ‘Increase market share through
various marketing tools’ strategy is not totally a new strategy to Ettijar as Ettijar
already use e-commerce platform for promoting currently. So, it is not a big
change for Ettijar. However, Ettijar still require to fully utilize the use of all these
platforms to make their promotion more effective. As discuses before, the
availability of all of the resources and the readiness of the organization structure
indicates the ability of Ettijar to manage changes.
Based on figure (2) SPACE matrix quadrants, Ettijar’s suitable strategy is
aggressive strategy. Aggressive strategy requires speed and innovativeness
(Strategic Management 2nd ed, 2014). In relation to that, Ettijar have a flat
organization structure and promoting direct interaction between employer and
employees which the information is fast to deliver. Culture of Ettijar for being
direct communication between employer and employees are suitable with the
selected strategy as it promotes innovation from employees and good leading from
employer.
The last factor is on having a sound strategic planning system. It is
important to have a sound strategic planning system to ensure the process of
implementing strategy can run smoothly without any issue. Ettijar are always
ready to adapt with the changes and instead, they already work towards it since
the pandemic outbreak. ‘Increase market share through various marketing tools’
strategy require innovative and creative thinking by employees and a good leading
76
from employer. Besides that, all needed resources are already available in Ettijar
which made Ettijar already prepare for the changing needed. All requirement
regarding implementation of new strategy is available in Ettijar and ready to be
utilize to ensure that it can gain more awareness from potential customers and lead
to higher profit.
8.4 Monitoring and re-evaluating the strategies
Process of monitoring and evaluating the strategies is to ensure that companies are
in the right direction during the implementation of strategic planning. Monitoring and
evaluating strategies require a top management to conduct an ongoing review,
analysis and study on the performance of a strategy implementation to identify the
successfulness of the strategy (Thomas.N, 2020). Ettijar strategic objective is to
“Place brand image in customers’ mind by increase the social media and other digital
platform impressions among target audience in order to achieve an additional of
20% of new customers at the end of each year”. In order to ensure that Ettijar are
moving towards achieving this objective, a monitoring and re-evaluating process
need to be implemented to see the successfulness of the strategy at the end of the
year.
Before monitoring the end result, quarterly strategies also need to be monitor to
ensure that each quarter process are following the flow to achieve the intended
result. First quarter strategy can be monitor by identifying the target audience of
each of the social media and characteristic of each social media available for
promoting products. The media department should be able to list the advantages
and disadvantages of each of the social media and marketing tools available for
promotion including the platforms that competitors use. It is to ensure that Ettijar
be able to compare each of the marketing tools that is suitable to be use and can
reach the customers effectively. The monitoring process can be done through
conducting an online survey or through internet research to identify the most
popular online platform use by people. Ettijar can monitor the effectiveness of each
digital platform by using Google Analytic which is to help track of the website
traffic. Apart of the ‘free’ factor, this features by Google can help to analyze the
audience attribute; age, gender, interest, etc of the audience.
77
Second quarter strategy which is to ‘Identify target audience and their core
interest in social media platform’. For this strategy, Ettijar will monitor through the
current customers which by identifying which platform that most use by the
customers to reach Ettijar. Besides that, Ettijar can also conduct an online research to
see the core interest of people to see whether they are more towards video advertising
or testimonies before decide to make any purchase.
For the third quarter, Ettijar can monitor the strategy by conducting a step-tostep checking on the contents to be publish and also conducting a proof reading.
Content’s checking should be done continuously to ensure that there will be no
mistake in the message that will be publish. It is also to ensure that all relevant
information is provided for customers. A part from that, contents checking also to
ensure that the highlighted information such as products benefits and company’s
contact information are not left out as it is one of the most important information to
be provide to customers to ensure that customers can get an adequate information
for making purchase or relay any inquiries.
During last quarter of implementing the strategy, Ettijar can monitor through
pre-posting the contents to see the reaction and feedback given by customers. It is
to see customers’ acceptance towards the message and Ettijar can identify which
platform are most effective to be focus with many target audiences. On top of that,
Ettijar can also monitor the effectiveness of the strategy through calculating
Customer Satisfaction Score (CSAT). CSAT is to analyze the customer's immediate
reaction towards the message and the efficiency of the platforms use. CSAT can be
calculate by dividing the total of positive response with total number of response and
multiply by one hundred.
CSAT (%) = Total of positive response
X 100
Total number of responses
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Quarterly objectives
Q1: Identify and
Monitoring
•
List the advantages and disadvantages of each of the
analyze all available
social
social media and e-
promotion including the platforms that competitors use
commerce platform
•
media
and
marketing
tools
available
for
Conducting an online survey or through internet
through online
research to identify the most popular online platform use
survey and other
by people.
research method
•
Use Google Analytic which is to track the digital
marketing effectiveness.
Q2: Identify target
•
Monitor through the current customers which by
audience and their
identifying which platform that most use by the customers
core interest in social
to reach Ettijar
media platform
•
Conduct an online research to see the core interest of
people
Q3: Create engaging
•
contents to be
Conducting a step-to-step checking on the contents to be
publish and also conduct a proof-reading process
publish
Q4: Create pre-
•
posting to see the
acceptance of target
Pre-posting the contents to see the reaction and feedback
given by customers
•
Calculate Customers Satisfaction Score (CSAT)
audience and ecommerce platforms
are identified
Table 10: Summary of quarterly strategies
After monitoring the quarters strategies, Ettijar should know how to monitor the
end result in order to identify whether the chosen strategy is effective or not. One
way of monitoring and re-evaluating the strategy is by reviewing the number of
sales. This can be done for each month to ensure that there is an increasing in the
number of sales either from existing customers or new customers. It is indicated
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that the existing customers are loyal towards Ettijar products which might due to
the effective loyalty program; e-coupon, birthday rewards, etc. Apart from that, it is
also indicated that the promotion and advertising messages through the chosen
marketing tools reached the potential customers effectively. Monitoring and reevaluating through number of sales can be done by finance and production
department. Finance department can see clearly the percentage of increasing or
decreasing in sales for each month while production department is to see the stock
turnover which to identify the products that have the highest demand by customers.
In the case of decreasing or consistent in sales, Ettijar should change the messages
in social media to be more attractive and informative by highlighting the benefits
and advantages of the products. Ettijar can also change the platform used to the
more effective platform that have more target audience that can be potential
customers of Ettijar. Besides that, Ettijar can create more marketing campaign that
can retain existing customers and create word of mouth to the potential customer to
increase the number of sales.
Another monitoring and re-evaluating strategy is by monitor customers
response in all marketing platforms used. It is to identify the reactions shows by
audience in response to the message created in the social media. It is either through
the comments in social media or the feedback given by customers for every
purchase made through email or website. Apart from identifying audience response
on the marketing created, it also helps to improve Ettijar services for future
improvement by understanding customers concern and critiques to promote a good
after sales services. This can be done by media department who is mostly deal with
the creating message and response of audience towards the advertisements. To
ensure that audience complains or requirement being handle efficiently, a daily
monitoring is required for checking customers response. If Ettijar received negative
feedback from audience or customers, Ettijar should respond to the complains by
giving solution to them to show credibility of Ettijar handling a problem. It is also
act as a after sales services to customers to retain their trust. Besides that, Ettijar
should also respond on positive feedback to show appreciation towards the
customers and add more satisfaction to them.
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No
1.
Monitoring
Departments
actions
in charge
Reviewing
Finance and
number of sales
production
Frequency
Monthly
Corrective actions
•
Create more attractive
advertisement messages
•
department
Change
effective
to
more
marketing
platform
•
Create more marketing
campaign
such
as
competition or lucky
draw.
2.
Monitor customer Media
response
Daily
•
department
Response to customers’
feedback
•
Take action on every
negative feedback by
provide solution.
•
Customer
Satisfaction
Score (CSAT)
Table 11: Summary monitoring the end result of the strategies
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9. Projected financial statement
9.1 Projected income statement
Ettijar Enterprise Sdn Bhd
Projected Income Statement from year 2021 to 2023
Years
Previous year
2020
RM
Total revenue
Cost of goods sold
Gross profit
RM
2021
Projected year
2022
2023
Percentages: +10%
RM
RM
Percentages: 20%
RM
RM
Percentages: 15%
RM
RM
2,013,065
2,214,371
2,657,245
3,055,832
131,376
130,752
135,111
140,272
1,881,689
2,083,619
2,522,134
2,915,560
Expenses
Marketing and
advertising
17,000
16,124
37,815
427,162
Salaries
26,472
26,472
26,472
26,472
Logistic expenses
13,253
13,253
13,253
13,253
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Utilities
Supply expenses
Import tax (10%)
Total supply
expenses
12,723
12,723
12,723
12,723
50,162
50,162
50,162
50,162
5016
5016
5016
5016
55,178
55,178
55,178
55,178
Maintenances of
machine
Miscellaneous
expenses
9,030
9,030
9,030
9,030
12,354
12,354
12,354
12,354
Total expenses
146,010
145,134
166,825
556,172
1,735,679
1,938,485
2,355,309
2,359,388
Tax payment
392,082
404,006
522,988
524,929
Net income
1,343,597
1,534,479
1,832,321
1,834,459
Earning before tax
Table 12: Projected income statement for Ettijar for year 2021, 2022, 2023
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Table 12 shows a projected income statement for Ettijar for the next three (3)
years; 2021, 2022, 2023. Projected income statement shows profits or losses of the
company for a required future period. In the income statement also included all
expenses that incur in Ettijar such as
Marketing and advertising, salaries, logistic
expenses, utilities, supply expenses, maintenances of machine and miscellaneous
expenses. Since Ettijar depending on overseas suppliers, the expenses of logistic is
also one of the most significant money spend in their operation a part from
suppliers’ expenses after including a 10 percent of import tax imposed by
government. Besides that, the expenses also including maintenance of machine use
to made the footwear because Ettijar is depending on machines to made their shoes
and it is important to have a regular maintenance check up for the machines to avoid
any problem during operation. Miscellaneous expenses are all including expenses
for purchasing office items such as paper, stationaries, internet subscription and
many more.
There is a 10 percent increment of revenue from year 2020 to 2021 as
digitalization is starting to fully utilize by people. During this year, Ettijar can fully
utilize the use of digitalization for promotion and create awareness. Apart from that,
people also started to aware about the importance of health and purchase more
‘healthy’ products. For the year 2022, Ettjar might have another 20 percent increment
in their revenue because of the implementation of new strategy where Ettijar will
focusing on choosing a most effective marketing platform and deliver new marketing
message and campaigns to their customers and potential customers. During the year
2022, Ettijar will conduct a massive digitalization marketing to achieve 20 percent of
new customers and expected to gain increment of 20 percent company’s revenue.
However, in the year 2023, the revenue is expected to decline about 5 percent from 20
percent (2022) to 15 percent (2023). This is due to the expected in the change of
customers preference during that year as consumers’ taste towards fashion can change
drastically within few years. Apart from that, in 2023, Ettijar might need to change
the marketing platform used as the current platform might not effective anymore
during year 2023. Thus, change in platform, delivering message method and products
development need to be done in year 2023 afterward to keep pace with the changes.
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9.2 Projected balance sheet
Ettijar Enterprise Sdn Bhd
Projected Balance Sheet from year 2021 to 2023
2020
RM
2021
RM
2022
RM
2023
RM
Cash
483,686
1,040,712
1,465,782
1,759,948
Account receivable
451,005
59,041
276,172
942,521
7,805
34,523
4,624
37,812
455,003
455,003
139,205
135,901
1,397,499
1,589,279
1,885,783
2,876,182
Accounts payable
3,902
4,800
3,462
101,723
Salaries payable
50,000
50,000
50,000
940,000
Total Liabilities
53,902
54,800
53,462
1,041,723
Retained earning
1,343,597
1,534,479
1,832,321
1,834,459
Total liabilities &
shareholders'
1,397,499
1,589,279
1,885,783
2,876,182
Assets
Current assets:
Inventory
Non-current assets:
Property and equipment
Total Assets
Liabilities
Shareholder's Equity
Table 13: Projected balance sheet for the year 2021, 2022 and 2023
Table 13 shows projected balance sheet for the previous year 2020 and projected
years from 2021 until 2023. Balance Sheet is included in one of the financial
statements for the company which stated the assets, liabilities and equity for specific
years. Balance sheet is use to represent the conditions of a company's financial to see
85
the balancing of assets and liabilities. Assets are divided into two (2) types which
current assets and non-current assets. Current assets are assets that can easily be
converted into cash which only took less than one (1) year. Meanwhile non-current
assets took more than one (1) year to be converted into cash.
Liabilities indicate the amount of money that a company owes to third parties than
need to be pay at specific time. The same concept applies as assets, current liabilities
should be pay within one while non- current liabilities are due at any time that exceed
one (1) year. Shareholders' equity is the amount that can be attribute to shareholders.
However, in the case of Ettijar, which is a non-listed company that have no
shareholders, the equity is only including retained earnings.
Based on table 13, it can be seen that retained earnings for Ettijar is expected to
increase up until year 2023. Retained earnings can be defined as net earnings that
company gain which can be use either to reinvests in the business or to pay debt. As
the strategy suggested is expected to be achieve within three (3) years, the earnings
for Ettijar also expected to increase due to the increase in sales after implementing the
strategy. Ettijar can use the earnings earned to reinvest in the business for the next
three (3) years because the strategy is expected not to be efficient anymore after the
three (3) years. Thus, Ettijar need to ensure that the earnings are increase continuously
through the increase in sales of the business.
Meanwhile the liabilities for Ettijar are not high in the first two (2) projected years.
It is because during that year, the strategy implement is under implementation and
might not show significant result. So, Ettijar might not want to focus on paying its
liabilities during these years and focus on spending on the marketing and promotion.
However, in the third year, the account payable for Ettijar is the highest among other
years. This is due to the increase in the amount of assets which can help Ettijar to pay
for debts in the previous years. Besides that, in the year 2023, the salaries payable
also increase as Ettijar need to allocate for bonus given to the employees who achieve
targeted goals for Ettijar.
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9.3 Projected cash flow
Ettijar Enterprise Sdn Bhd
Projected Cash Flow from year 2021 to 2023
2020
2021
2022
2023
RM
RM
RM
RM
1,343,597
1,534,479
1,832,321
1,834,459
Plus: Depreciation & amortization
919,500
18,150
75,372
23,563
Less: Changes in working capital
1,932,399
1,234
1,383
12,724
330698
1,553,863
1,909,076
1,870,746
15,000
995,000
923,457
547,344
235,636
103,204
814,865
Operating cash flow
Net earnings
Cash from operations
Investing cash flow
Investments in property
Equipment
Principle of loans
457,345
Cash from investing
15,000
1,230,636
1,484,006
1,362,209
Financing cash flow
Issuance (repayment of debt)
Issuance (repayment of equity)
167,988
Borrowing
233,799
Less: Repayment loans
(214,371)
Cash from financing
167,988
233,799
Net increase (decrease) in cash
483,686
557,026
425,070
294,165
483,686
1,040,712
1,465,782
1,040,712
1,465,782
1,759,947
Opening cash balance
Closing cash balance
483,686
214,372
Table 14: Projected cash flow for year 2021, 2022, 2023
The last financial statement for company is cash flow statement which indicate
the cash inflow and outflow of the company. Table 14 shows the projected cash flow
for Ettijar in the upcoming three (3) years 2021, 2022 and 2023. There are three (3)
components in cash flow which are cash flow from operational activities, investing
87
activities and financing activities. Cash flows from operating activities which include
all money movement that incur from all business activities. In the other hand,
investing cash flow is resulting from investment gains and losses such as cash outflow
that spent on property, buildings and equipment or other investment platform (Adam.
H, 2020). The last component is cash flow from financing activities which indicate
the cash used in business financing that measures the cash flow between a company
and creditors.
Ettijar cash flow is expected to increase within three (3) years due to the
increase in earnings. The closing balance in the three (3) years are all positive which
are RM483,686, RM1,040,712, RM1,465,782 and RM1,759,947 respectively. The
earnings also made it possible for Ettijar to pay for the debts and have excess cash for
other use such as investing and operational use. Ettijar need to ensure a positive cash
flow at all time by maintaining high cash inflow from operations to pay for debts and
invest for property and equipment. Ettijar should also ensure the investment for noncurrent assets is being made accordingly because of the non-current assets is nonliquidity. Since the pandemic cannot expected to be end in short time, Ettijar should
always ensure the liquidity of assets at a safe level to be able to use the cash for
paying debts and implement contingency plan if any worst case happened.
10. Conclusion
This case study is using a strategic management concepts and study and focus
on providing suggestion to the chosen company which is Ettijar Enterprise Sdn Bhd
which based on internal and external factors that have been identify at the early phase
of part 2 (refer table 1 and 2). By using three (3) strategic management tools which
are SWOT-TOWS (refer table 3), SPACE (refer table 4) and Big Think strategy (refer
table 5), a strategy is successfully identify which is “Place brand image in customers’
mind by increase the social media and other digital platform impressions among
target audience in order to achieve an additional of 20% of new customers within
three years”. The strategy is also fit with the desire of Ettijar which is to ensure that
88
as many as possible people to wear Medshoe (refer part 2 section 4.1.1-vision and
mission statement).
According to the current state of economic and change in customers behaviors
towards digitalization and concern towards health, implementing strategy that related
with utilizing digitalization is seem to be the best choice for Ettijar because of the
high acceptance among public and the low-cost factor compared to other factors. A
good financial condition is also supporting the implementation of this strategy by
looking at the positive and increment in earning for the projected financial statement
for the next three (3) years (refer table 12, 13 and 14).
In the nut shell, strategy that to be suggested to Ettijar are hoping for the
increase in the Customer Satisfaction Score (CSAT) as mentioned in monitoring and
re-evaluating part (refer table 10). The high number of CSAT indicate that projected
financial statement is achieved successfully.
89
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