full version Giant Supermarket Case Analysis Essay

Giant Supermarket Case Analysis

Category: Business

Autor: Antonio 11 March 2010

Words: 6184 | Pages: 25

EXECUTIVE SUMMARY


This paper is a company analysis on Giant Hypermarket Malaysia in general, but specifically focusing on Giant Hypermarket Sabah. Giant Hypermarket is a major supermarket and retailer chain in Malaysia. It is a subsidiary of Dairy Farm International Holdings (DFI) and is headquartered in Shah Alam, Selagor. In this paper, firstly we focus our analysis in identifying the Strength-Weaknesses-Opportunities-Threats (SWOT) of Giant; in addition, we constructed a SWOT Matrix for Giant where we identified the SO, ST, WO and WT strategies, which we think Giant should apply to improve their competitiveness. Next we focus our analysis on the external as well as the internal analysis on Giant. In the external analysis, we center our analysis based on two instruments that is the General Environment which is also known as the PESTLE analysis to help us to understand the external environment in which the organization operates, and also Porter’s Five Forces Model to identify their industry competitiveness. On the other hand, in the internal analysis, we also used two instruments to analyze Giant, which is by doing an analysis on their Value Chain as well as by identifying their market growth and market share in BCG Matrix. Lastly, we conclude our analysis with some recommendations that we suggest Giant should focus on to better improve their supermarkets.



INTRODUCTION


Giant Hypermarket, which is owned by Giant Capital Holdings (GCH), is one of the largest hypermarkets in Malaysia. It was founded in 1944 by the Teng family in Kuala Lumpur. It’s headquarter is based at Shah Alam, Selagor, meanwhile Sabah-Sarawak-Brunei Regional headquarter is located in Kolombong Outlet, Kota Kinabalu. The key people to the success of Giant Hypermarket are the Teng Family themselves, and CEO Dato’ John Coyle.

Giant is operating under the retail industry. Its main competitors are Servay, Milimewah, and Chua Kah Seng in Sabah, while Mydin for the western part of Malaysia. Giant’s mission was always been to offer a wide variety of products at the lowest possible price. Their slogan which says “Everyday Low Prices, big Variety and Great Value” communicates the company’s mission to the public.

Although Giant Hypermarket had been long operating at the western part of Malaysia, its operation is fairly new to the local people of Sabah. Knowing this fact, Giant has included states such as Sabah, Sarawak, and countries such as Brunei in their strategic plan for expansion. In order to implement their strategic plan, their strategy includes identifying stores to takeover (i.e. Likasmart in Sabah), and introducing low prices by having staffs surveying competitor’s prices at major supermarkets outlets.

Giant Hypermarket currently has around 1,000 employee in Sabah itself, and 10,000 employees in total nationwide. Some of the employee benefits that Giant employee receives for working in Giant are employee insurance, a 10% discount when purchasing within group (i.e. Giant Hypermarket, Guardian Pharmacy, and Cold Storage).

Besides having plenty of outlet stores around Malaysia, Giant also has outlet stores around the Southeast Asia countries such as Singapore, Indonesia, Vietnam, India and also Hong Kong. Information about Giant Hypermarket and promotions details can be accessed through Giant’s Official Website which is www.giant.com.my.

Below is the price comparison we did during our interview visit to Giant Kolombong, between Giant house brand products with other major brands. It is clear that Giant house brand products are cheaper compared to other major brand which is as listed below:

Product Giant Brand
(RM) Other Brands
(RM)
Baby diapers (M) 27.49 35.99 (Pampers)
Dish washer 3.79 4.39 (Sunlight)
Liquid Softener 6.29 6.99 (Softlan)
Sos Ketchup Chili 1.99 2.29 (Maggi)
Box Tissues (4’s) 6.99 7.89 (Premier)
Mineral Water (1 L) 0.89 2.19 (Spritzer)
(500 ml) 0.69 1.19 (Spritzer)

BACKGROUND OF THE COMPANY


Giant Hypermarket is a major supermarket and retailer chain in Malaysia. It is a subsidiary of Dairy Farm International Holdings (DFI).

The Giant store brand was founded by the Teng family as a simple grocery store in one of the suburbs of Kuala Lumpur in 1944. Its mission was to offer a wide variety of products at the lowest possible prices. As its reputation grew, so did its business.

Dairy Farm, which acquired Giant in 1999, recognized that the key to Giant's success had been its ability to continuously offer value for money products. It retained this core principle even as it began transforming Giant into a national and international brand.

After six years of effort, which included redesigning the stores, the introduction of the non-food products into the Giant hypermarkets, the implementation of international retail standards that includes safety, cleanliness, structured training, and a vibrant shopping environment as well as centralized buying functions and improved operations, Dairy Farm has made Giant the undisputed leader in Malaysia’s retail sector.

In 1999, the first Giant Hypermarket store opened in Shah Alam, Selangor. By 2007, the company had grown to operate a total of 85 hypermarkets/ supermarkets in Malaysia with outlet size ranging from the 350,000 sq. ft hypermarket in Shah Alam to the 11,000 sq. ft supermarket in Bangsar, Kuala Lumpur. The chain also includes 7 stores in Singapore and 15 hypermarkets in Indonesia. Giant hypermarkets offer a wide range of local merchandise, such as fresh local fruits, vegetables, and seafood within a wet market environment.

SWOT ANALYSIS


A SWOT analysis summaries the key issues from the business environment and the strategic capability of an organization that are most likely to impact on strategy development. It is also useful as a basis against which to generate strategic options and assess future courses of action. The aim is to identify the extent to which the current strength and weaknesses are relevant to and capable of dealing with the changes taking place in the business environment.

Here, we are going to analyze the strength-weaknesses-opportunities-threats of Giant one by one in order to fully understand the challenges Giant face. First, we will discuss about their strengths. Giant indeed is one of the largest players of the retail industry in Malaysia, having over 85 branches spread throughout the country making them one of the largest supermarket chains in Malaysia, which is good because this way they can capture the market share and little by little space out their competitors. Unlike TESCO and Carrefour which only focuses their customers in major cities, Giant’s 85 branches are strategically located throughout the country and states, making them more attractive to their customers.

Besides that, having their own house brand is a good way of marketing their brand name to their customers. Giant house brand is quite cheap compared to other major brands available in the market, which will make them more sellable to their consumers. In addition, Giant has a reputation of value for money, which offers low prices, sometimes even lower than cost, which is good in the eye of their customers.

Giant also has a good marketing team whom are in charge in marketing and promoting Giant brand name to the public. The primary marketing tools of their marketing team is by buying billboards space, advertising in newspapers and by distributing flyers and brochures. These methods is proven to be useful especially when Giant first introduced their stores in Sabah, because according to their executive, more and more customers are going to their supermarket compared to before when they initially opened. Another strength of Giant is that, they have a good relationship with their suppliers where in the recent official opening of their store in Kolombong, they made a deal with their supplier to give them free products when they purchased more for the opening day. The free products are in turn promoted for only RM0.10 on their opening day which causes many to turn up to buy the products, and indirectly also purchased other products in their store.

The main weaknesses for Giant are that, they are experiencing a high turnover rate with their employee especially in the operation department, many of their employee resigns after only working one or two months in their supermarket, which is not good for them as they will need to find and employ new employees. Besides that, running a supermarket especially the hypermarket in Kolombong requires high maintenance, if they are unable to keep up with the maintenance, it will destroy their reputation. For example, their store in Karamunsing which is not maintained well, the store has a certain smell which comes from their previously frozen section and the store product are not arranged well for the convenience of their customers.

Another weakness is that large size leads to inefficiency in bureaucracy; their decision making is centralized in their headquarters. Therefore, anything happened or anything they do, they need to first consult their management team in Shah Alam. Also, Giant is experiencing a high advertising cost, especially in Sabah, where they need to introduce their brand name to attract their customers and capture market share.

Furthermore, in pricing their products, Giant does use the conventional sticker type pricing, they uses the shelf type pricing which is confusing to their customers, because the price list on their shelf are not frequently updated and often wrongly place. There are several incident whereby a customer saw a different price tag of the product they want to purchased but when they reaches the counter, they are asked to pay a different price which is much higher, this create unhappiness and dissatisfaction among their customers.

There are several opportunities for Giant. Firstly, they have ready customers, households now are increasing and everyone needs to buy household products, this creates a good demand for them. Another opportunity for them is to explore into new location in Malaysia, which is also in conjunction with their current strategic plan which is to open up to 40 branches throughout Sabah, Sarawak and Brunei. Besides that, they can try to increase the variety of their house brand, as well as introducing other products for their house brand to compete with their competitors.

The threats experienced by Giant are that there is stiff competition within the industry, there are other major supermarket chains, such as Tesco, Servay, Milimewah, etc. in Malaysia which is competing alongside with Giant in the retail industry. Another threat is that although their house brand is known to their customers, but it is not their customers preferable brand, their customer still prefers other established brand name products compared to theirs. Also, survey done by Giant shows that initially Sabahan cannot accept Giant due to numerous reasons, this can be scary for them because if their customers still cannot accept them for a long-tem period, thus less people will shop in their store and sales will decreases.

Lastly, the threat faced by Giant is online shopping. We are now in the IT era, people are becoming used of using computers to do their daily task, for example to pay bills, transfer money, as well as to buy stuffs. Websites which provides online shopping are such as www.ebay.com.my, www.lelong.com.my, and etc. Thus, online shopping can create threats for Giant conventional brick-and-mortar type of business.

On the other hand, the SWOT matrix is an important matching tool that helps managers develops four types of strategies: SO (Strength-Opportunities), WO (Weaknesses-Opportunities), ST (Strength-Threats), and WT (Weaknesses-Threats).
SO strategies use a firm’s internal strengths to take advantage of external opportunities. For the case of Giant, their SO strategies might be to explore into other areas in Malaysia, such as in Tawau, Semporna and Miri, as well as to expand internationally in Southeast Asia countries such as the Philippines, Thailand, and etc. Also, to increase variety and add product line to their existing house brand product to gain customer’s attention.

WO strategies aim at improving internal weaknesses by taking advantage of external opportunities. For their WO strategies, we think that Giant should provide adequate training and more employee benefits to their employee especially in the operation department, to lessen their turnover rate in the future. Besides that, they should also renovate or refurbished their acquired supermarkets to resemblance their Giant concept and reputation and to continue maintenance of the outlet. (E.g. Giant Karamunsing outlet is not maintained well)

ST strategies use a firm’s strengths to avoid or reduce the impact of external threats. ST strategies that would be appropriate for Giant would be to continue strategy to open more branches to increase market share and to eliminate competition. Besides, to increase marketing effort to gain customer awareness on their house brand products so that it can be a customer preferable brand in the future. In addition, Giant should add more variety on all the existing product line in their supermarkets, because this way, it will attract more customers as they will enable to buy everything under one roof, therefore make Giant their favorite and preferable shopping place.
WT strategies are defensive tactics directed at reducing internal weakness and avoiding external threats. An organization faced with numerous external threats and internal weaknesses may indeed be in a precarious position. Therefore it is crucial for Giant to come up with good WT strategies to overcome future obstacles. The WT strategies as suggested by us is to ensure cleanliness of outlets and freshness of their products to enable them to compete with their competitors, as nowadays consumers are particular in their comfort ness when shopping in certain supermarket, if they liked a certain supermarket, they will continue to shop or their goods their for a long-term period.

Besides that, it is essential for Giant to introduce a well organized pricing system to enable their customers to easily locate product price. This is also related to the comfort ness and convenience that most customers nowadays find essential. If they find it difficult to shop in your store, they can always move and shift to other store to shop, as the retail industry’s threats of substitute are high, we think that Giant should not compromise on this matter.

Lastly, for Giant to overcome their high cost of advertising, they should introduce other means of advertising such as by using electronic methods to send electronic advertising as well as promotions through electronic newsletter to their customers email addresses. This in a way reduces their advertising cost but also able to attract attention as nowadays most of the people spend hours a day in front of their computers, therefore it is an easy way to gain their attentions.

EXTERNAL ANALYSIS


In external analysis, we used two tools to analyze Giant Hypermarket. They are PESTLE Analysis and Porter Five Forces in order to make us understand the environment more clearly.


i) General Environment (PESTLE)

PESTLE can be defined as management technique to help us to understand the external environment in which the organization operates. It is also a popular method of examining the many different external factors affecting an organization – the outside influences on success or failure. These factors may be differentiated in six ways:

• P – Political - The current and potential influences from political pressures.
• E - Economic - The local, national and world economy impact.
• S - Sociological - The ways in which changes in society affect us.
• T - Technological - How new and emerging technology affects our business?
• L - Legal - How local, national and world legislation affects us.
• E - Environmental - The local, national and world environmental issues.

In analyzing Giant Hypermarket external environment, this model is sufficient to let us know the external impact to the business. Firstly, the Political factor has much affect the company in doing business particularly outside the home country. As the parent company of Giant which is Dairy Farm International (DFI) located at Hong Kong, they need to access the political environment in the particular country to make sure that they can run the business without any influences from political pressures. For example, by operating retail business Giant in Indonesia and India, Giant needs to monitor the potential of any terrorism or war so that their business will not be affected badly.

Secondly, the Economic factor the only factor that will generate profit to Giant. Giant in this case need to observe the economic trend of the local, national and even world environment to determine the suitable cost involve and setting up plant. For example, Giant is expecting their newest branch in Sandakan and Tawau on March 2007. According to the information that we got from our interview, they need to study the cost associated in developing a new plant since they are not acquiring any company like in Kota Kinabalu. Besides that, they may also want to gather data regarding the spending habit of the local communities and also their purchasing power so that they can determine the best price compared to their competitors. As mentioned by Mr. Rizam in our interview, he said that Giant will refund their customer money if their customer can find other similar product that offer lower price than Giant.

Thirdly, the Sociological factor involves the ways in which changes in society affect us. In order to survive in the industry, Giant needs the society support to purchase their product. This is where the profit comes and eventually will help Giant to survive. For instance, the product offered by Giant should always meet the lifestyle and also the preferences of today customer. Their house brand products should be well design to cater the opportunities available without scarifying any customer value in it.
Fourthly, the Technological factor, basically it associated with new and emerging technology that affect the business operation from day to day basis. Since today market is keep on emerging, every company strive for technology advancement which they believe that it will help to lower down the cost while speeding the task to achieve higher margin. For example, since Internet era now become the needs rather than want to most of the community. Giant had created their own website in order to reach their customer more effectively. Even the latest promotion can be downloaded from the website while customer can search for the more information about the company background. Patent act has become more crucial in today market since everything possible to be copied by the competitor. For instance, Giant should be careful with their house brand product as it is very rigid to paten protection of the other product.

Fifthly, the Legal factor refers to how local, national and world legislation affects Giant. Giant should be very careful as legal can be very tricky from one country to another. For example, in providing wages to employees Giant should always refer to the authority since each county will have their own labor ordinance which restricts minimum range. Based on our interview, the major problem face by Giant in Sabah is to determine the wages for their staff. This is because the labor ordinance in Borneo is different from West Malaysia. In order to restraint from any problem occurring, Giant’s Employee Relations Executive, Mr. Rizam told us that they have to constantly refer to the Sabah Labor Ordinance department for any information and advise, because previously Giant is only operated in West Malaysia, and they are not that familiar with Sabah’s labor Ordinance.

Finally, the Environment factor which refer to the local, national and world environmental issues. Public nowadays are more consent of their environment, using too much plastic bag will lead to pollution. Giant for the time being is planning to educate the public of the important ness of taking care of their environment; they will soon use paper bag rather than plastic bag.


ii) Porter’s Five Forces Model



Figure 1 – Porter’s Five Forces Model of Competition
Michael Porter described a concept that has become known as the "five forces model". This concept involves a relationship between competitors within an industry, potential competitors, suppliers, buyers and alternative solutions to the problem being addressed. We used the five-force model as a basic structure and built on it with concepts from the works of many industries.

Any business requires inputs—labor, parts, raw materials, and services. The cost of Giant inputs can have a significant effect on the company’s profitability. Whether the strength of suppliers represents a weak or a strong force hinges on the amount of bargaining power they can exert and, ultimately, on how they can influence the terms and conditions of transactions in their favor. Suppliers would prefer to sell to Giant at the highest price possible or provide it with no more services than necessary. If the force is weak, then Giant may be able to negotiate a favorable business deal for itself. Conversely, if the force is strong, then Giant are in a weak position and may have to pay a higher price or accept a lower level of quality or service. From our analysis, we have identified that the Supplier’s Bargaining Power for Giant’s retail industry is high. It is wielded by supplier demanding that it’s pay a certain price for their goods. If Giant does not pay the price, they won’t get the goods to sell. And Giant won’t dare not to pay the price, because when they have nothing to sell, their customers will go to their competitors.

The bargaining power of buyer describes the effect that Giant customers have on the profitability of the business. The transaction between the seller and the buyer creates value for both parties. But if customers have more economic power, Giant ability to capture a high proportion of the value created will decrease, and they will earn lower profits. Therefore, it is clear here that the bargaining power of buyer in this type of industry is high. For instance, if rice is too expensive in Giant, buyers will exercise their power and buy from their competitor (e.g. Servay or Milimewah). This will lead to lower profit margin and slowly will have a smaller portion of market share.

Giant may have the market cornered with their product, but the success may inspire others to enter the business and challenge its position. Analyzing the threat of new entrants involves examining the barriers to entry and the expected reactions of existing firms to a new competitor. Barriers to entry are the costs and/or legal requirements needed to enter a market. These barriers protect the companies already in business by being a hurdle to those trying to enter the market. Anyone starting up a new supermarket chain has barriers imposed on them, implicitly or explicitly, by the existing supermarkets. For instance, Giant may have cornered the market for certain goods; the new supermarket will not be able to find cheap, reliable suppliers. Giant also has the advantage of economies of scale. The amount it pays suppliers, per-item, is a lot less than the corner shop. It achieves this, partly, through buying large volumes of goods. A small supermarket chain can only buy a relatively small volume of goods, at greater expense, therefore, the threats of new entrants for the retail industry, especially hypermarkets and low.

Substitute products are those that can fulfill a similar need to the one your product fills. If Giant house brand is undifferentiated, customers can easily switch away from Giant brand product to a competitor’s product with few consequences. In contrast, there may be a distinct penalty for switching if its product is unique or essential to their customer’s business. For Giant house brand, it has high threats of substitute product since almost all products in town are available within almost the same price range. The threats of substitute not only high within their house brand, but also with all other products they sells in their supermarkets, because there are few other major supermarkets chain in Sabah, which can be considered their competitors, when customers don’t buy in their supermarkets, they can always go to other supermarkets because the products sold in most supermarkets are identical.

Last but not least, competition is the foundation of the free enterprise system, yet with small businesses even a little competition goes a long way. Because Giant is in an industry that is mutually dependent, actions by them will usually invite competitive retaliation. An analysis of rivalry looks at the extent to which the value created in an industry will be dissipated through head-to-head competition. It is clear that Giant has a high rivalry among established firm, as we can notice through the newspapers, especially the local ones, when Giant advertises promotion from their supermarket, one or two days later we can see that Servay and even Pacific Ngui Kee will also advertise promotions in their supermarkets, and the promotions item will almost be the same. In our opinion, having high rivalry among existing firms is not healthy for the industry, as everyone will compete to offer the lowest price, which in turn will hurt them in the long run. Classical economics predicts that rivalry between companies should drive profits to zero.

INTERNAL ANALYSIS


For the internal analysis, we used two methods to analyze Giant Hypermarket internal factors, that is, by using value chain and BCG Matrix.


i) Value Chain Analysis


Figure 2 – The Basic Value Chain



The idea of the value chain is based on the process view of organizations, the idea of seeing a manufacturing (or service) organization as a system, made up of subsystems each with inputs, transformation processes and outputs. Inputs, transformation processes, and outputs involve the acquisition and consumption of resources - money, labor, materials, equipment, buildings, land, administration and management. Most organizations engage in hundreds, even thousands, of activities in the process of converting inputs to outputs. These activities can be classified generally as either primary or support activities that all businesses must undertake in some form.

Influential work by Michael Porter suggested that the activities of a business could be grouped under two headings:

(1) Primary Activities - those that are directly concerned with creating and delivering a product (e.g. component assembly); and

(2) Support Activities, which whilst they are not directly involved in production, may increase effectiveness or efficiency (e.g. human resource management). It is rare for a business to undertake all primary and support activities.

Value Chain Analysis is one way of identifying which activities are best undertaken by a business and which are best provided by others ("out sourced").

Giant Value Chain can be divided into 2 which are the primary and secondary activities. Below are the explanations for both of the activities:


a. Primary Activities
Primary Activity Description
Inbound logistic All those activities concerned with receiving and storing externally sourced materials. E.g.: Giant receives all the raw material and product to be sold at their premises.

Operations The manufacture of products and services - the way in which resource inputs (e.g. materials) are converted to outputs (e.g. products). For example, Giant normally received a big bulk of raw material and product from the supplier. They will break it into several small entities to be distributed to the whole branch.

Outbound logistic All those activities associated with getting finished goods and services to buyers. The products are now ready to be assembled to the final customer by sending it to the branches all over Malaysia.

Marketing and sales Essentially an information activity - informing buyers and consumers about products and services (benefits, use, price etc.). Giant usually will do the advertisement through billboards and radio. The house brand will not be promoted to the other store since it can only be purchase from Giant Hypermarket store.

Service All those activities associated with maintaining product performance after the product has been sold. Giant provide a customer service counter and also money back warranty if something happen to their product during the warranty period. For instance, if customer spot other supermarket offer lower price for a particular product than Giant. Giant will return the differences back to them


b. Secondary Activities

Secondary activities Description

Procurement This concerns how resources are acquired for a business (e.g. sourcing and negotiating with materials suppliers. In order to gear up Giant in Kota Kinabalu and the latest location namely Sandakan and Tawau, Giant need to settle up the entire basic tasks before establish itself to the public.

Human Resource Management Those activities concern with recruiting, developing, motivating and rewarding of the workforce of a business. As a Hypermarket, most of the retail functions were done by Giant itself. Specialization in production and department means Giant need to assign and control their manpower efficiently so that they can produce the maximum outcome (higher profit)

Technology Activities concern with managing information processing, and the development and protection of “knowledge” in a business. As new era (technology) conquering the business environment, all Giant system were manage by digital devices such as scanner, internet, and online database system. We may also find the latest promotion through their website.

Infrastructure Concern with wide range of support systems and function such as finance, planning, quality control and general senior management. In managing such a big Hypermarket which involves almost 75 branches in Malaysia, Giant needs a team to manage all the secretarial works. Based on our interview, we found out that Giant is consist of Administration, Legal, Human Resource, Finance, Operation etc.






ii) BCG Matrix


Figure 4 – The BCG Matrix


One of the most common and long-standing ways of conceiving of the balance of a portfolio of businesses is in term of the relationship between market share and market growth identified by the Boston Consulting Group (BCG). After analyzing Giant Hypermarket in Sabah, we found that Giant Hypermarket falls under the Questions Marks category, which shows that Giant’s market growth is high but their market share is slow. We say this because our retail industry in Malaysia has a big potential to grow, households are increasing and thus people will need to buy household products for their daily needs. Moreover, there are Giant Supermarkets branches scattered all over, besides offering many varieties in their supermarket will make their market growth to grow.

On the other hand, we say that their market share is low because Giant is quite new in Sabah, and just started their expansion strategy about half a year ago. Even though Giant has about seven branches in Kota Kinabalu itself, but they are quite new and people need to adjust to get to know them better to familiarized with their supermarket structure and slowly accept them. However, it can be seen that, Giant market share is slowing increasing over the time as more people are starting to accept them, besides the effort from their marketing team and company strategy to offer low price and great value to their customers.

Question marks are growing rapidly and thus consume large amounts of cash, but because they have low market shares they do not generate much cash. The result is large net cash consumption. A Question mark has the potential to gain market share and become a star. If the question mark does not succeed in becoming the market leader, then after perhaps years of cash consumption it will degenerate into a dog when the market growth declines. Question marks must be analyzed carefully in order to determine whether they are worth the investment required to grow market share.

Giant have big potential to grow and gain market share and become Stars but in becoming in a Star, it can eat up investment and likely to be yielding low margins in seeking to beat competition and gain market share. This is due to the high advertisement cost as experienced by Giant now to try their best to introduce and familiarize their customers with their supermarkets, especially in places such as Sandakan and Tawau where they are expected to open their branch in this year.

According the Mr. Rizam, who comes from Giant West Malaysia, who is here in Sabah to oversee the expansion plan of Giant, says that initially when they opened Giant here, they found that the locals especially the elderly are not that fond of shopping at Giant, this is proven by their effort acting as normal people going around asking people what they think of the new supermarket opening in Kota Kinabalu, which is Giant.

Therefore in overcoming this problem to increase their market share, their marketing team had to come up with new ideas of marketing their brand name, that is by buying billboard spaces in busy roads, especially those which are quite near to their stores. In addition, is to offer promotions bi-weekly to attract customers to their stores and offering knock-down prices e.g. RM0.10 for several products during their official store opening. This is their way of attracting customers and slowly trying to gain market share.

In our opinion, Giant will indeed become Stars one day, because of their strategic expansion plan especially in East Malaysia and Brunei where they targets to open about 40 stores, besides their strong marketing team effort in introducing many ways of attracting existing and new customers.

RECOMMENDATIONS


Giant Hypermarket is deemed to be one of the largest and fast growing players in the retail industry. Customers come and go by the minute to purchase something from its store. One of the tedious parts of shopping is to search for the pricing tag of the product. Some of the pricing tags at the Hypermarket are not properly pasted on the storage rack. This may cause some confusion to the customer. The management should either provide price stickers on their products such as those being used by other supermarkets, or ensuring that the price tags are right-placed, updated constantly, and are clear to lessen customer confusion.

Some of Giant Hypermarket outlets such as those at Karamunsing, and King Fisher Park are not properly maintained. These outlets, from observation seem to be quite dirty, smelly, and disorganized. The management should make this an effort to oversee and ensure that their outlets are clean, and products offered are fresh and of good quality.

Giant has their own training centre which is located at West Malaysia. Thus, the company must try to improve employee benefit to avoid high turnover of their employees. What the company can offer to its customers are annual leaves, medical expenses, and so on. Another area that Giant can improve on is their counter service. What the management can do is assign more counter crew especially during peak time in order to avoid jam in that area. The trolleys should be arranged on time, and placed right at the entrance. It should not be left scattered at the parking lot.

Since Giant has their own house brand product, Giant should take the opportunity to introduce their brand to their customers. This is because for the time being, many Sabahans are still not familiar with the many house brand product of Giant.

By improving on these weaknesses, Giant can prosper more in the coming years. Satisfying customer’s needs and taking care of employees’ welfare are two important aspects that cannot be overlooked by Giant. If these aspects are not taken care of properly, Giant will face its consequences sooner or later.






CONCLUSION


In conclusion, we think that Giant has the potential to grow in Malaysia. With their wise extension strategy, it is not surprise if one day, they would be the leading and the biggest supermarket chains in Malaysia. It is expected that Giant will keep on opening new store either by acquiring small company or set up their own plant such as in Sandakan and Tawau (Sabah).

In our opinion, Giant’s tag line of “Everyday Low Prices, Big Variety and Great Value” has boosted its brand name among Malaysians. Offering variety of products and with cheaper price compared to other supermarkets will certainly make them one of consumer’s most preferable places to shop for their daily groceries. This indirectly will improve the Malaysian lifestyle, since now they only need to pay less for better quality products. However, Giant has to be alert about their advertising and promotions, because their brand image will suffer if their advertising and promotions are not well developed.

It is also expected that Giant will soon be introducing or penetrating their house brand products to their customers. Now, they are slowly trying to market their house brands to their customers by emphasizing on quality with a cheaper price, which indeed is working as now more people are starting to buy their house brands. It will be no surprise if one day, Giant house brand products will soon be one of Malaysian trusted brand. Nevertheless, Giant still need to extensively market their house brands to push it harder to their customers, so that more people will get to know their products and therefore eventually buying them, because most Malaysians still cannot accept their house brands due to lack of knowledge.

Finally, Giant still have a long way ahead to strengthen their market share. With Mydin as the main competitor in West Malaysia and Milimewah and Servay in East Malaysia, they must design a survival strategy as their competitor is slowly catching up the market share.

REFERENCES


David, F. R. (2005) Strategic Management: Concept and Cases, 10th ed. Pearson Education International.

Giant Hypermarket Official Website
http://www.giant.com.my

Hitt, M.A., Ireland, R. D., & Hoskisson, R. E. (2005) Strategic Management: Competitive and globalization, 6th ed. Cincinnati: South-Western College Publishing.

Johnson, G., Scholes, K., & Whittington, R. (2005) Exploring Corporate Strategy, 7th ed. Prentice Hall.

Pitts, R. A., & Lei, D., (2006) Strategic Management: Building and Sustaining Competitive Advantage, 4th ed. Thomson South-Western.

Wheelen, T., Hunger J. D., & Hunger D. (2003) Strategic Management and Business Policy, 9th ed. Prentice Hall.