strategic plan for green myanmar dragon limited

8/10/2019 Strategic Plan for Green Myanmar Dragon Limited

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Strategic Plan for Green Myanmar Dragon Limited

Students are required to write a report of 2500 words on preparation of strategic

plan for a company of their own choice.

The Vision of Green Myanmar Dragon Limited is to become No.1 most

sellable soap products in entire Myanmar. Our mission is to provide the

most affordable and refreshing soap to the whole Myanmar. We will do all

the possible steps, techniques, and tactics available to reach our mission

and vision. In this analysis, we will evaluate corporate vision and mission

statements, perform an external factor analysis and suggest 5 opportunities

and threats, perform an internal factor analysis and suggest 5 strengths and

5 weaknesses, perform SWOT analysis, perform SPACE analysis, perform

BCG analysis, perform blue ocean analysis and suggest a blue ocean to the

firm and I will group my suggested strategies and prioritize them.

Evaluate corporate vision and mission statements

There are about top 5 local brands running to be no.1 soap position in

Burma. There are many others many foreign brands. Some are under

Unilever, P&G coming too. There can be China, Thailand, Indonesia, and

India cheaper brand market products coming in too. They may have same

mission that is to provide affordable products to entire Myanmar and other

developing countries. All the soap products are with refreshing odour and

mind-compelling smell that could attract mind and body apart from some

really heavy strong products come from India but that again even depends

on customers preference and taste.

Perform an external factor analysis and suggest 5 opportunities and 5

threats

The opportunities can be merger with an established organization such as

Unilever or P&G. The opportunities can be strategic alliance between

three shwe wah, carbolic using government trademarkNG shwe wah,

MSW shwe wah, GSW shwe wah. Another opportunities can be

purchasing a different type soap manufacturing plant. Another

opportunities can be finding a foreign partner or international joint

venture. There can be opportunities such as finding foreign original

equipment manufacturers if we want to expand shampoo, detergents, hand

sanitizers, if we do not have enough money or find partner to invest in.


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Threats

The threats can be due to technological change, entry of foreign soap

products and local soap product brand emergence occurred. There can be

more type of soap productsliquid soap, detergent, hand sanitizer. The

threats can be in terms of demographic trends such as rivalry of foreign

soap products and local brands with cheaper and better quality soap brand.

The threats can be in terms of cultural trends such as substitutes

detergents and liquid soaps. The threats can be change of political

conditions. The threats can be dependent over change of price in

complementors.

Perform an internal factor analysis and suggest 5 strengths and 5 weaknesses

Strengths

The strengths are customers are loyal to the brand which is

government shwe wah and carbolic. The price is affordable. The

scale of economies is large which is distributed entire Burma. The

organization is regulated semi-government, hence, it is more

systematic. The soap can provide a good value which is foaming

and of good quality.

Weakness

The product is not rare. If the resource is not rare, then perfect

competition dynamics are likely to be observed. That is, if there is

no competitive advantage, there will be no above normal profits.

The product is imitable. That means the product has imitability.

Imitability means the temporary competitive advantage of valuable

and rare resources that can be sustained only if competitors face a

cost disadvantage in imitating the resource. It has been borrowed

from government and the monthly expenses are expensive and

regular. It can be taken back any time the monthly fee cannot bepaid. The competition is fierce - High competition.

In assessing Internal Factors of Assessment, we need to look at -

1. Financial (Liquidity, Leverage, Activity, Profitability, Growth)

2. Physical (Plant & Equipment, Geographic Location)

3. Human (Skills & Abilities of Individuals)

4.

Organizational (Reporting Structures, Relationships)

5. Technology and Skills


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SWOT Analysis of Green Myanmar Dragon Limited

Strengths

Recognise as a National Government Soap BrandShwe Wah and Carbolic

There are only three recognized companies who is able to manufacture

using the brand name of Shwe Wah. One is privateby the ownership of

NG companies, government rental of industries by the A&T company &

Green Myanmar Dragon Company. Shwe Wah and Carbolic brand name

has been established over 50 years and has been gained customer

loyalty.This has enabled Green Myanmar Dragon Limited to break entry

barriers into some very competitive markets and knock out strong

competitors.

Strong brand portfolio

Green Myanmar Dragon Limited has established a very strong relationship

with wholesalers and retailers by offering them good margins and

incentives. Good Margins and Incentives, which would not deviate

customers buying from competitors.

Strong relationship with wholesalers and retailers

Green Myanmar Dragon Limited has established a very strong relationship with

large wholesalers throughout Burma by offering good margins and incentives. Not

only do they provide good value to wholesalers, they as well provide fair and

reasonable value to retailer, that provides strength to reach to the ultimate

consumer market.

Economies of scale

Economies of scale occur when increased output leads to lower long run average

costs. As a nationwide distribution company, Green Myanmar Dragon Limited

could purchase the raw materials with cheaper price compared to other smaller

competitors out there in the market. Because of its mass scale production it has

ability to overcome the bargaining power of suppliers, which results in lower cost

of production. Thus, it leads Green Myanmar Dragon to provide wholesalers and

retailers with better pricing than small competitors.


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Research and development

Green Myanmar Dragon Limited started to put an effort over research and

development for new products and brands. It is because products have life cycle.

Each and every product can be star, cash cow, question mark, or dog. For thecurrent two body soap Carbolic, and washing soap Shwe Wah, we carefully

developed to research over and maintain to provide better color, better smell,

better density and so forth.

Excellent management and human element

Green Myanmar Dragon Limited is operated based on half government

employees, and half private company employees. Since half of them are

government organization trained, Green Myanmar Dragon Limited has received a

pool of managerial capabilities in the form of its human resource capital in the

entire Burma. Its top management are from foreign-trained and multilingual. This

helps Green Myanmar Dragon Limited to understand and manage the local needs

of customers, employees and stakeholders.

Merger and acquisitions

Green Myanmar Dragon Limited has taken acquisition over smaller soap

industries such as Shwe Ohn Thee, Sein Ohn Thee, Good, Like which are

produced by Tet Nay Company.

Weaknesses

No direct connecting with customers

Because of nature of business, Green Myanmar Dragon Limited has no directconnection to its ultimate consumers. The consumers are mainly from rural

villages and middle-class to lower-class city people. So, It has to rely on its

wholesalers and retailers.

Internal conflict between Industry

Since it is in Yameithin, top level management cannot really stay there but

monitor from Yangon. So, it has to solely rely on middle level management.

Hence, it leads to two divisions. Government-based staffs want to rule on its own

without following company rules and orders. The middle level manager from


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company wants to show his power against the upper level management. Since it is

rent from government, both the salaries of government-based staffs, and

company-based staffs are paid by company itself.

Reduced spending for R & D

Since Shwe Wah washing soap and Carbolic body soap are at the point ticking

from cash cow to dog. The company does not want to spend much over two

products. Instead, they would like to think about joint venture, merger or strategic

alliance.

Fall in revenues

Due to high competition and emergence of foreign detergents, soaps and

toothpaste, it has led us with lower profit margins. Decrease in revenue has

directly affected profit margins and market value of shares.

Opportunities

Economic Crisis

Where current economic crisis have made small companies with liquidity

problems to find way for exit, there it has created opportunities for Green

Myanmar Dragon to acquire these demising companies at a very cheap price and

enter into new markets.

Increasing need for healthy affordable products

Since Myanmar is one of the least developed country, it is important to provide

the product with lowest cost. Only by means of cost leadership strategy, it can

penetrate into entire market.

Developing markets

The market share of Green Myanmar Dragon Limited is relied over suburbs and

rural areas. 90% of Shwe Wah washing soaps and Carbolic body soaps are used

by those who do not have washing machine at their house, who do not use

detergents at their home. So, it is important to penetrate more to developing

markets and large wholesalers in the different towns.

Potential Joint Venture/Partnership/Strategic Alliance

It is government recognized brand so it is more likely to invest in this brand than

other smaller brands.

Threats


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Strong Competition

Since the entry to soap market is not high. The creation of soap plant is medium.

The entry barrier is not high. Thus, it leads to strong competition. Green Myanmar

Dragon Limited has two competitors, NG company, A&T company which uses

Government shwe wah and carbolic brand, in addition to other large soap brands

Godzilla, shwe toe ka lay and other foreign soap products. These competitors led

Green Myanmar Dragon to provide better pricing and better incentives to

consumers with lower profit margins.

Increasing brands

Availability of different brands and emergence of different companies, and

foreign soap products have led customers to switch for cheaper products.

Tougher Business ClimateOverall business climate is tougher today because of economic crisis, tough

Government regulations and competitive environment. It has led the companies to

focus more their liquidity instead of profitability. So, most companies sell with

low profit margin. It is hard that when getting money back from wholesalers and

retailers, some of them they do not want to pay money even after assigned period.

Complex Organisational Structure

Green Myanmar Dragon Limited is formed with 4 different companies and joint

with government. A wrong corporate strategy can be a single point of failure of

business.

The SPACE Model

SPACE model looks at Industrial attractiveness (IA), Environmental Stability

(ES), Financial Strength (FS), Competitive Advantage (CA). There are so many

brands in the market. However, just to compare and contrast better NG Shwe Wah

and MSW Shwe Wah in the market, Dinosaurs, Shwe Toe Ka Lay, Our large 4

competitors, we are at competitive region. It is because we do not have advantage

over both external factors and internal factors. We do not have advantages in

terms of industrial attractiveness (IA)i.e. industry growth, environmental

stability (ES), i.e. overall economic condition, GDP growth, technology & barriers

to entry. The environmental stability is the same for my 4 competitors I have

mentioned above. Government have been lowering restrictions against entry

barriers against foreign soaps and imports. Environmental stability is unstable

compared to before. Industrial attractiveness that is industry growth is slowing

compared to before due to more intense competition. Financial strength of a

company is not as strong as other competitors, it is because it is made up of only

three shareholders, other companies are made up of group of shareholders, and

NG is a group of companies, thats a reason why he can purchase a government

soap factory when reign change in 2010.

Competitive advantage with NG Shwe Wah, and MSW Shwe Wah is limited

because it is both using Shwe Wah and Carbolic brand and customers are loyal to


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the brand. We can only advance by better packaging, better delivery service,

better marketing system, better market penetration to nearby towns where the cost

of delivery for them is expensive. It is because the allocation of industries are NG

Shwe Wah is in Yangon, MSW Shwe Wah is in Mandalay, GSW Shwe Wah is in

Yameithin. Therefore, the suggested strategy type is competitive.

In Competitive environment, we need to do product development, market

development, market penetration, backward, forward and horizontal integration.

Product developmentmanufacture of soap powder, liquid soap, Market

developmentnearby towns where the competitors cannot penetrate in, backward

integrationpurchase of palm oil plantation, forward integrationcombine or

merger with Unilever or established organization, horizontal integration

strategic alliance between NG Shwe Wah, MSW Shwe Wah, and GSW Shwe

Wah.

In terms of BCG Strategies, It used to be a cash cow business, which is high

market share and low growth rate. Due to intense competition recently, it hasbecome a dog business, it is becoming low market share and low growth rate. It is

better to divest in the future. In the dog business, the retrenchment, divestiture,

liquidation to stronger investor is better for the company.

Blue Ocean Strategy : Joint Venture with Foreign Strong Company and establish

hand sanitizer company with cheaper price than those that are importing from

abroad with heavy advertisements. In this way, it can compete local competitors,

none of the local competitors have produced hand sanitizers yet. Blue Ocean

Strategy is industries not in existence, the products that are unknown in the market

space. Since no competitors in the market have hand sanitizers industry, since

there are washing soaps and water not available everywhere, hand sanitizer isrequired for hygiene, we can seek to gain a dramatic, competitive advantage by

abandoning efforts to beat out competitors in existing market and inventing a new

industry or distinctive market segment to render existing competitors largely

irrelevant and allowing a company to create and capture altogether new demand.

In evaluating the strategies, we need to look at organization capabilities,

workability, appropriateness, acceptability of the strategy, return on investment,

supported by organizations culture, employee compatibility, affordability and

payback period. It is better to do backward integration, forward integration,

backward integration and horizontal integration. Forward integration is to invest

in the plants and machines. Backward integration is to invest in the palm oilplantation. Horizontal integration is to acquisition over the smaller companies.

That is the first strategy. Merger and Acquisition over smaller detergents and soap

powder factories is second prioritized strategy. In this way, it can also do product

development strategy as well. It is to penetrate in nearby markets where the

transportation costs for competitors are high in terms of allocationconvenience,

market penetration strategy. More effort and focus on marketing campaigns and

advertising has been done on the products. Another strategy is to produce products

with superior quality. The last but not least to produce hand sanitizerthe first in

Burma, that is competitive and cheaper than foreign hand sanitizer.

References


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Wit, B. and Meyer, R. (2010) Strategy Synthesis: Resolving Strategy Paradoxes to

create competitive advantage, 3rdedition, Hampshire.

strategic plan for green myanmar dragon limited

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