Running head: HUP SENG STRATEGIC PLAN
HUP SENG STRATEGIC PLAN
2
Table of Contents
1.1.
Purpose of the report........................................................................................................................3
1.2.
The industry profile.........................................................................................................................3
1.3.
Strategic challenge...........................................................................................................................4
1.4.
Vision, Mission, Goal, and Objectives.............................................................................................4
1.4 .1 Critical evaluation of Vision, Mission Statement...........................................................................4
1.4.2 Revised Vision Statement...............................................................................................................6
2.0.
Environmental analysis....................................................................................................................6
2.0.
2.1.
Macro environment analysis........................................................................................................6
Industry analysis..............................................................................................................................8
2.1.1.
The bargaining power of suppliers...........................................................................................8
2.1.2.
Threats of new market entrants................................................................................................9
3.0.
3.0.
Capability Analysis..........................................................................................................................9
Value chain analysis.....................................................................................................................9
3.2 Resources Audit...................................................................................................................................11
3.3 VRIO Analysis Model.........................................................................................................................12
4.0 KPI and benchmarking........................................................................................................................13
4.1 Market Capitalization..........................................................................................................................14
5.0
Strategy evaluation and recommendation......................................................................................15
5.1 TOWS Analysis...................................................................................................................................15
5.2 Porter’s generic strategy......................................................................................................................17
6.0 Evaluation of the proposed strategies..................................................................................................19
Suitability..................................................................................................................................................19
Feasibility..................................................................................................................................................19
Conclusion.................................................................................................................................................20
References.................................................................................................................................................20
1.1.
INTRODUCTION
1.2.
Purpose of the report
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This report consists of a strategic plan for the Hup seng Company that deals with the
manufacturing of biscuits, coffee mix among other foodstuffs. This report will cover factors
affecting the strategic plan management by analyzing the internal and external environment. The
following sections in the strategic analysis include;

Mission, objectives, and goals

Analysis of the macro-environment

Industry analysis

Capability analysis

Proposed strategy

Strategy evaluation and recommendation
1.3.
The industry profile
The industry is a manufacturing industry that is located in Johor Bahru, Malaysia that was
established early in 1958 as an investment industry (ISLAM, 2018). So far, the company has
attained broad recognition and distributes its products to a wide consumer coverage. The industry
has a wide market coverage including Africa, North America, Asia, Europe, and Oceania. In
2005, his company was awarded the quality excellence certificate, to verify its outstanding
quality management skills that resulted in the production of quality products. After five years of
its establishment, the industry had increased its annual income by 21% indicating an outstanding
performance and increase in market share (Mole, 2018).
1.4.
Strategic challenge
Company has been experiencing low sales turn over just after the 2015 peak that had
resulted in a revenue increase of 28%. The demand for biscuits drastically dropped
especially in the local markets of Sabah and Sarawak. According to a statement by the
HUP SENG STRATEGIC PLAN
executive director Kerk Chian Tung, there was a drastic reduction of foreign workers in
the majority of the shop lots, which resulted in the disruption of the group's agents’ sales
activities. During this period the net profit fell from RM24.03 million to RM20.60
million, an average reduction of 14.3 % of the gross revenue (Hing & Ping, 2003). This
problem was further accelerated by the increased price of raw materials such as wheat
flour, palm oil, and sugar that are essential for the production of biscuits.
1.5.

Vision, Mission, Goal, and Objectives
To provide the best service to customers by producing quality products that meet customer
demands.

To create strong inter-relationships with partners and stakeholders to enhance business
expansion through promotion.

To maintain and encourage shareholders by enhancing the sustainable growth of the
business.

To provide the best working environment for its employees.

To work together with the surrounding communities in the protection of the environment
and sustainable uses of natural resources.
1.4 .1 Critical evaluation of Vision, Mission Statement
4
HUP SENG STRATEGIC PLAN
A vision statement refers to the plans and desires that the industry strives to achieve within a
specific period (Mole, 2018). This statement works to motivate and inspire employees and the
general team to work hard towards the fulfilment of the agreed vision.
Industry strives to achieve the following goals;
The group’s major objectives include the need to ensure that the products are of the preferred
quality and can be freely shared anywhere in the world (Davidson, 2018). The industry cream
cracker has managed to achieve this major objective, through their effective slogan, “Quality is
our promise”.
The mission statement outlines the company’s dedication to continuously improve the quality of
the products, to meet the demands of the existing markets as well as expand to new territories
through exposure (Bakar et al, 2018).
Focus
This is a statement that focuses on attention and practical decision making tools that a
company does to ensure its achieving the set goals and objectives. The company has been
focused on improving product quality and diversity to attract new clients and further convert
them to becoming frequent and potential clients. Hup Seng Company has become the leader in
modifying the products in a way that suits different clients and their needs.
5
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Motivation
The statement, goals, and objectives are unique and realistic. The organization strive to
motivate employees to perform their duties and as a result this increases growth and productivity.
Hup Seng mission and vision statement are written well in that, it considers personal and
company`s growth. The industry is aware that employees are the driving force for the
organization performance and by motivating them, they create a strong sense of belonging and a
pleasant atmosphere.
Clarity
The mission, goals, and objectives are well understood and simple. The Hup Seng vision
statement is quite clear in terms of the goals to achieve and ways in embracing that growth.
1.4.2 Revised Vision Statement
Due to daily improvements that the company strives to achieve, the vision statement is
frequently revised to include any elements of new changes. The statement states that "To be the
leading biscuit manufacturing industry, in terms of packaging, taste, and quality".
2.0.
Environmental analysis
2.1.
Macro environment analysis – PESTEL
This refers to the analysis of the external environmental factors that affect the stability of the
Industry operation. These factors can be categorized into, social, ecological, economic, political
and technological factors.
The table below outlines the factors and analysis of their corresponding effects on the future of
the industry;
HUP SENG STRATEGIC PLAN
Political
7
Social-ecological
Environmental
Technological
Legal
Economic
The Goods
The industry has
The company has
The industry
The industry
There is a slight
Sold Tax
the responsibility
designed its
utilizes highly
adheres with the
and consistent
(GST) that
of caring for the
products on
advanced
laws and
growth of the
was recently
community and
environmental
methods of
regulations
economy
imposed
ensuring there is
expectations and
technology for
regarding the
according to the
following the
a reduction of
standards and thus,
faster and
pollution of the
reports from the
2014 budget,
carbon footprints
safeguarding the
efficient business environment.
United Nations
has
by minimizing
environment.
operations.
Other laws
on matters about
drastically
gas and diesel
There is great
Through these
include the
the World
affected the
usage during
awareness among
technological
health and safely
Economic
production of
manufacturing.
clients on the need
advancements,
law, the
Situation and
Factors
HUP SENG STRATEGIC PLAN
8
goods and
The industry also
to protect the
the company
consumer law
prospects 2013.
services in
supports the
environment and
produces high
and the export
This shows that
Malaysia
community
this puts the
quality products
law.
there will be an
(Mole,
through the
industry to adhere to that are preferred
The legal
upward trend in
2018).
provision of
standards that
environment is
the industry
The new
funds to the local
protect the
generally
exports in the
taxation
schools and
community from
favorable for the
coming years.
system has
universities and
environmental
industry growth.
(Bakar et al,
resulted in
this raises the
issues.
increased
industry profile
The concept of
selling prices
and increases
recycling is
as a result of
shareholders'
emerging as a
the increased
participation and
norm in
cost of
interest.
Malaysia
production
Therefore, the
economy and as
There are no
overall social
a result, the
disruption of
factorst have
industry is
wars making
created a
making plans to
trade
conducive
adhere to
unrestricted.
environment for
expectations and
The overall
the industry to
regulations in
political
thrive.
the consumer
environment
sector.
is favorable
for the
industry.
Summary of PESTEL Analysis
by consumers.
2018).
HUP SENG STRATEGIC PLAN
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Based on above summary, It Political is indicating potential competitive advantages in
the industry. By producing new products, Stock market stock price will rise.
Model
Forces
Rating
Political
Very favorable
Favorable
Economic
Favorable
Favorable
Favourable
Favorable
Envionmetal
Favorable
Neutral
Legal
Favorable
Neutral
PESTEL Tecnological
2.2.
Overall Industry rating
Industry analysis – PORTER’S Forces
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Porters Five Forces
Forces
1. Entry Barrier
Details
 There have been threats of new
entrants in food processing industry
and as a result, the industry has been
forced to lower its products ‘price to
cope up with stiff competition in the
market.

Needs high capital to achieve its
economic scale given many entry
levels in the market.

The industry needs highly skilled and
expensive infrastructures to penetrate
the industry and dominate the market.

Multiplicity of food laws

High taxes thus, deterring the growth
of the industry.
2. Bargaining power of suppliers

The principal raw material are wheat
flour, sweet jelly, starch, glucose,
volatile, salt, and shortenings.

There is high supplier concentration
across the country for the supply of
salt, sugar, and wheat flour.

Imports are relied on supply of raw
materials such as sweet jelly and
starch.
3. Bargaining Power of Buyers

Overall the bargaining power of

supplier is high.
There is availability of numerous
substitutes.

There are strong distribution channels.
HUP SENG STRATEGIC PLAN
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
Prices of most biscuits are kept with
the reach of the ordinary man in both
rural and urban areas.

Overall, the power of buying is high
and thus, providing opportunities for
4. Competitive Rivalry

growth.
The intense competition has made it
difficult for the industry to earn
sustainable profits because of sharing
clients.
5. Threat of Substitute

There are numerous substitutes in the
biscuit industry.

The industry is extremely price
sensitive.

Profits constrained by the presence of
alternatives especially when one brand
decides to increases its price.
Several forces determine the industry's competitive position in the market. Porter’s 5 Forces
model is used to analyze the industry's competitive advantage and allows the industry to further
enhance its strengths to counter challenges (Jaafar, Nuruddin & Bakar, 2018). These forces
include.
HUP SENG STRATEGIC PLAN
3.0.
12
Capability Analysis
3.1.
Value chain analysis
Value chain analysis is a tool used to analyze the strengths and weaknesses of an industry's
activities. It evaluates the availability and utilization of resources to ensure a leader in
competitive advantage. In an analysis, if the value chain is greater than an industry realizes
higher profits through an increase in production. The industry being one of the leading biscuits
producing industries in Malaysia, a positive result is expected.
Primary activity
Logistics inbound
Description
Inbound logistic activities include the management of the
supply chain and the selection of raw materials for production.
Outbound logistics
Outbound logistics deals with activities such as store operation.
Marketing
Occasionally sampling is carried out to test the market for the
operations
products.
This deals with generals operation of the business. The
operation should be done in line with the demands of the
business (Food & Council, 2014).
HUP SENG STRATEGIC PLAN
Services
13
Deals in al services that concerns the business operations. Here,
different services are closely monitored for the sake of the
business.
Support activity
Description
Infrastructure
The industry has an interconnected relationship with the
government and other relating firms that provide strong support
Human resource
financially.
The industry ensures that the employees are qualified and
management
trained to acquire all the necessary skills for successful
procurement
production (Atan & Mahmood, 2019).
The industry will need to develop the best procurements
procedures in order to ensure efficient operations
3.2 Resources Audit
Resources audit in Industry gives a range of performance of critical sectors and how it can create
value.
Thresh hold resources
Financial cash flow
Activity performed by
How does it create
Strength/weaknes
the industry
value?
s
Improvement in
High cash flow
Strength
revenue generated was
ensures growth and
realized from a figure of expansion of the
Skilled Guest Workers
3,486,747 in 2013 to
factory. (Annual
revenue of 6,246,519 in
report,2018)
2018
A high standard is set
With qualified
for recruitment and
workers, the
hiring of workers in the
efficiency of work
industry biscuit factory
tends to improve and
thus quality output is
Strength
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obtained from the
Processing Mills
The management
factory
This ensures a
believes in adhering to
reduced cost in
the best practices of the
frequent mill’s
industry to enhance the
breakdown.
Weakness
efficiency and
effectiveness of its
operations. (Annual
report,2018)
3.3 VRIO Analysis Model
This model is used to evaluate an industry's essential resources and whether the competitive
advantages involved are sustainable not.
Primary
activities
Valuable?
Rare
Inimitable?
Organizatio
n oriented?
Competitive
Advantage?
Operation
Inbound
Yes
Yes
Yes
No
Yes
No
Yes
Yes
Sustainable
Sustainable
HUP SENG STRATEGIC PLAN
logistics
Sales and
Marketing
Outbound
logistics
Service
Supporting
activities
Infrastructure
Human resource
Management
Technology
Procurement
15
Yes
No
No
No
Sustainable
Yes
No
No
No
Temporary
Yes
Valuable?
Yes
Rare
No
Inimitable?
No
Organizatio
n oriented?
Temporary
Competitive
Advantage?
Yes
Yes
No
No
No
Yes
Yes
No
Sustainable
Sustainable
Yes
Yes
Yes
No
Yes
No
No
No
Sustainable
Temporary
3.3.2 VRIO Analysis Model Rationale
Is it valuable?
All the primary and supporting activities
are
valuable. They have a positive impact
on performance of the industry such as
Is it rare?
improving scales.
Operations, Service and technology are
rare activities in the factory. This grants
them a great competitive advantage among
other competitors. For instance, the
technology used in the processing of the
Difficult to imitate?
crackers is unique.
A greater portion of the primary and
supporting activities can easily be imitated
by competitors. The strategy used for
marketing and sales of its products is a
general one that is similar to its
HUP SENG STRATEGIC PLAN
Is it organization oriented?
16
competitors.
1/3 of the primary and secondary activities
are organization oriented. The industry’s
operation procedures are in line with the
company’s set guidelines
4.0 KPI and benchmarking
The industry has invested on food safety, workforce diversity, training and development among
other to ensure their KPI score is above average.
4.1 Market Capitalization
Market capitalization measures the worth of an industry in the outside market and its
concern for the firm’s future. The industry having adequate experience in the food industry has
production lines of a utilization rate above 70%. In high season, the rates can shoot to 100%. Due
to its quality products, the industry has been granted the International Quality Award by Monde
HUP SENG STRATEGIC PLAN
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Selection Belgium. (Food & Council, 2014) The industry holds annual assessments of needs to
identify weaknesses in the employee's productivity. Needs assessment enables the factory to
polish its gaps hence outdoing another competitor's in the market. The industry also provides a
conducive working environment for their workers. They perform to their best in the factory
leading to quality companies output and hence a high market capitalization is realized. The worth
of the factory in comparison to other similar producers tends to be high due to the certification it
has by TQCSI, Australia. Also, they have obtained HACCP and GMP certification through the
Ministry of Health of Malaysia. (Yew, L &Gomez, 2014)
5.0 Strategy evaluation and recommendation
The above strategy is capturing more markets through the capitalized network both in the
domestic and international industry. The expanded market will consequently raise the industry
profile and net worth. Today, the industry has emerged as the leading industry in the
manufacturing of biscuits in Malaysia and other regions beyond.
5.1 TOWS Analysis
INTERNAL FACTORS
EXTERNAL
FACTORS
Opportunities
 The industry
has a good
reputation
which it has
built for the
longest time.
Strengths (S)
 The organization is
has a considerably
larger market share.
 The industry uses the
latest technology in
the production
process.
Weaknesses(W)

The industry lacks a good
marketing strategy and this
has impacted on its level of
competitiveness in the
industry.
Strengths/opportunities(SO)
 The industry can
access a considerably
wider market share
due to the ease of
transportation.
 Enjoys the advantages
Weaknesses/opportunities(WO)
The industry uses poorest
distribution channels in the market
making it less competitive
compared to the other organization
which are competing.
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Threats
 Faces the
threats of
competition
from other
biscuit
producing
companies
in the
region
where is
competition
for the
same share
of the
market.
of the scale of
production due to its
sizes and proximity to
the raw material for its
products
Strengths/Threats(ST)
 Has one of the best
wheat are raw
materials that they
use in the production.
The quality of the raw
materials that the
industry uses makes
its production quite
superior to the other
competing
companies.
Weaknesses/threat(WT)
 The industry has one of
the strongest competitors
in the industry which is
dominated by other large
companies
 The industry has a
relatively poor technology
support system which
leaves it at no mercy of
the competitors in the
market.
5.2 Porter’s generic strategy
Cost focus
benefits
analysis
This rest on the chosen
The cost focus for this
The key aspect of this strategies
of the major
industry is that it seeks a cost
will be based on the best
competition scope in
advantage in Since the
application of the marketing
the industry where the
industry has already acquired
tools that enable the penetration
HUP SENG STRATEGIC PLAN
industry operates.
19
a wide distribution channel,
of the market in the already
expansion into the global
dominated market is possible
market is easy and can
(Ansoff et al, 2018).
increase customers’
Differentiation
purchasing power.
The target segment, in reality,
The industry exploits the social
In the differentiation
must either have buyers with
need of the buyers in the specific
focus, the organization
the unusual need or else the
segment that the industry, in this
seeks differentiation
production system which best
case, is aiming to satisfy with its
between the focuser's
serves the various interest of
products (Ansoff et al,
main target segment
the customers and that of the
2018). The cost focus used by
and others which exist
entire market.
the industry exploits the
in the industry.
differentiation in the cost
behaviors in some of the key
segments.
6.0 EVOLUTION OF THE PROPOSED STRATEGIES
6.1 evolution of suitability , acceptability and the feasibility
Industry has the mandate of changing their different strategies in meeting the demands of
h ever changing business environment. Johnson’s anD Scholes suitability, acceptability
and the feasibility SAF as selection criteria for the GPB in determining the optimal
strategic choice.
Generic
strategies
Cost focus
suitability
Feasibility
Acceptability
Benefits
It is suitable
The industry
Has a higher
This has
The industry’s cost
for the
has developed
acceptability
enabled it to
leadership stool is
industry In a
a mean of
rate compared
too achieves
based on the pursuit
bid to
exploiting all
to the other
and sustain the
for the economies of
remain a
he source of
overall cost
HUP SENG STRATEGIC PLAN
20
scales, property
lower-cost
cost
leadership and
technologies and the
producer.
advantages to
has at the
preferential access to
remaining
same time
the organizational raw
very
kept it above
materials factors.
competitive in
the performer
the market.
in the
industry,
provided it
can still
command its
price (Ansoff
et al, 2018).
aids in general
The industry used is
To achieve
It is rewarded
All members in
unique aspect of the
this, it has
for the
the industry can operation
operation to be unique
selected one
uniqueness
learn from this
elaboration in
along some
of the
with a
and use the
the industry
dimensions that are
unique
premium price
information to
widely used.
position
and one which
improve the
itself to
is very
quality of their
meet the
convenient for
services.
various
its clients.
needs of its
clients.
Conclusion
Organization strategic management is the continuous planning, monitoring, analysis and
assessments of all the aspect of the organization which are key in the organization
development and all that is key for the organization to be able to meet the goals and the
objectives. Its necessitates the commitments to the strategic planning for the organization
which represents an organization ability to set both the short and the long terms goals of the
HUP SENG STRATEGIC PLAN
21
organization then coming up with various aspects of decisions making. For the industry, the
most important aspect of strategic management particularly focuses on the ability to maintain
competitive advantages and the various aspect of its production that meets the demands of
the customers in the market.
HUP SENG STRATEGIC PLAN
22
References
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