NTUC Fair Price Company Analysis Assignment

NTUC Fair Price Company Analysis 1
NTUC Fair Price Company Analysis
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NTUC Fair Price Company Analysis 2
NTUC Fair Price Company Analysis
Internet has resulted an overhaul to everyday activities in almost every sector in the
economy (Laudon, 2016). In both retail and wholesale sector, investors are forced to adopt the
current technologies in ensuring they remain relevant in the market. Companies such as Amazon,
Peapod, eBay and NTUC Fair Price have realized and discovered this secret and they have
revamped to online platforms for massive and easier sales as compared to customers physically
attending their stores. Through developing websites, applications and incorporation of other
robust technological features especially in packaging, storing as well as ensuring the products
remain fresh throughout (Llana et al, 2017). These companies have reaped vastly from these
innovations for a while as more and more companies venture into the online retailing business.
NTUC Fair Price is one of the largest supermarket chain store in Singapore that enjoys
largest economies of scale from its sales (Pangarkar, 2018). It started years ago through
collaborative efforts by labor unions. In a bid to remain relevant in this sector, the management
of this chain have incorporated innovative ideas into its operations. Most of these ideas revolve
around lining up the company with the current trends in the world; going online. The company
has its own website, online shopping application as well as an integrated computer system for its
warehousing operations to ensure efficient storage of goods in compressed storages. In this
paper, we will analyze the problems that NTUC Fair Price faces in this online retailing business,
offer some possible solutions to them as well as use business scorecards to offer ideas on how to
make it more efficient in its operations.
NTUC FairPrice Company has its foundations well built in Singapore market (Crawford,
2017). For sustainability, the company needs to create value for the customer through different
essential business operations management components. Business is dynamic and companies need

NTUC Fair Price Company Analysis 3
to regularly make updates on their operation components. In ensuring these, some of the key
components may include having a vivid, clear and a concise vision statement, have strategic
plans for operations, making reasonable budgeting, adopting honest metrics as well as ensuring
speedy execution of roles and plans for the organization. As part of its operations in Singapore,
NTUC has all these measures and components in place and they continually reap benefits from
having high customer value. In addition to these, NTUC has ensured regular supply of
commodities for its customers, efficiency in production and delivery, offering high quality goods
through quality control and ensuring availability and reliability of goods and services.
A clear vision statement unites all employees in an organization towards a higher goal.
Large organizations have vivid vision statements that inspire their teams to work towards
achieving the purpose (Smith, 2015). A bold vision statement is the starting point of everything
in a firm. For an effective vision statement, it must be accompanied by clear guidelines, expected
behaviors as well as values for the statement to drive the organization towards excellence. NTUC
Fair Price’s vision is to be Singapore’s leading world-class retailer with a heart. It aims at
offering quality products, excellent service, become the most preferred employer and serve all
the needs of a common Singaporean and the entire community. To ensure that the whole
organization abides to this statement, the company has safety measures for its products as it
checks on their qualities before releasing them for consumption by the customers. All goods are
of robust standards, its facilities regularly audited and ensures that its products advocate for
healthier eating to ensure its hearty retailer promise to its customers. The company sells
products that are transfat-free as it mediates with its suppliers to use transfat0free ingredients. In
relation to this, the company has received awards for selling healthy cooking oil and other

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household products that demonstrate its social responsibility its dedication to care for its
customers.
Having a strategic planning for your customers is essential to any organization that aims at
improving and retaining its quality customer value (Tomczak, 2018). It defines the ‘how’ in a
business vision as it provides a clear mapping of the organization’s vision. The plan should offer
solutions to the weaknesses of the organization as well as define some of its strengths in
combating issues relating to vision achievement. The strategic plan should be timely, clear and
concise on measures to be undertaken in order to achieve the set targets.
Normally, any organization aims at having higher customer base and offer satisfaction to
their needs (Hill, 2017). Easily understood guidelines by all employees in any firm assure high
customer satisfaction and this correlates with any company’s intentions of developing higher
customer value. NTUC Fair Price takes all these into considerations. The company has a large
base of policies, standards as well as charters that ensures correspondence by all employees.
These policies are all aimed at ensuring effective services, reliability and high quality products
thus preserving their brand. It has also partnered with companies such as Nestle in offering free
breakfast to families as well as Abbott in distributing bags to needy families. In ensuring that the
organization retains its relations with the community, whose people are their customers, the
company has adopted four great pillars that are aimed at directly or indirectly creating a higher
customer value namely; sustainable environment, wonderful workplace, community care and
responsible retailing.
Singapore market is huge and therefore hyper and supermarkets are ever in competition to
outdo each other in having and retaining the largest customer base. NTUC Fair Price
supermarket chain takes pride in being the largest in the entire country (Doan, 2016). This does

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not however offer a smooth opportunity to face no competition. Amazon, Prime and Paragon
supermarkets also possess their share of the same market. Are associated to the large customer
base of this huge super chain. From customers themselves, NTUC Fair Price supermarkets offer
high quality products and in particular, fresh foods. Goods are perfectly arranged in good layout
and therefore customers spend little time looking for items they need. The supermarket has
everything neatly shelved in their spacious layout thus cutting down wasted time looking for
these products. In addition, it has the freshest vegetables, fish and meat. In ensuring sustainable
environment, the supermarket has campaigns aimed at ensuring customers carry their own bags
every Wednesday to reduce the effects of plastic bags. Lastly, customers prefers shopping at
NTUC as they not only offer fresh items but also organic foods along other customer friendly
offers such as discounts and low prices as well (Heng, 2018).
The variety, volume, variation a swell as visibility of products and raw materials of the
entire organization will be affected. Going hybrid will necessitate larger volume of goods and
raw materials for certain products. In turn, it will take time before returns substantiate and
exceed the cost of production and delivery. To ensure they obtain and sustain customers, NTUC
will be forced to be more flexible and offer varieties than the rest using low costs. The
organization will have to incur costs in training employees who will be responsible for dealing
with the customers to ensure high visibility.
NTUC Fair Price is perhaps one of the largest supermarket in Singapore with more than a
hundred and thirty outlets. In as much as it enjoys huge profits from a set of its advantages that it
reaps from the large customer base, the organization faces a number of problems. Most of these
problems have been redefined through the decision of the company to venture online retailing.

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In addition, business operational management must ensure constant supply of primary data
(Mamic, 2017). For manufacturing companies, they have to ensure constant supply of raw
materials. The supply of these primary data should be dependable for any organization.
Efficiency should also be among the components for effective operational management. It ranges
from how supply chains are organized to the way distribution channels are coordinated. NTUC
Fair Price ensures total dependability of its suppliers who are paid on time and engaged in
making decisions (Potluri, 2017). They also engage in ensuring that suppliers offer products with
low fat contents as well as ensure they use ingredients with low fat content for the sake of their
customers. This has seen the organization receive awards for being the best in offering high
customer value products. Most of the outlets belonging to NTUC Fair Price run for all hours.
This ensures reliability of the organization as well as improves its efficiency in handling
customers at all times of the day.
Currently, NTUC Fair Price caters for approximately three thousand orders a day (Prakash,
2014). Compared to other huge retailers such as Amazon, this is such a small proportion for the
big supermarket. Amazon makes thirty five orders a second transforming to more than a million
orders a day. Considering that Singapore has one of the fastest internet connectivity, NTUC Fair
Price has little to blame on its low turnovers in a day. However, it faces some huge issues that
contribute to its low sales.
Firstly, NTUC Fair Price earns less from its online sales as it has to ensure low prices for
the commodities offered with inclusion of delivery prices accompanied (Kwon, 2018). In reality,
offering online services is expected to have huge returns for any company but this is overrated.
Online shopping includes having a team of staff handling deliveries who are expected to be paid
from the company’s profits. This does not take into account that customers prefer online sellers

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that do not charge delivery fees. Therefore, companies end up making less profits from these
online services.
Secondly, NTUC Fair Price is likely to face a problem of handling online shopping and
deliveries of perishable products (Gee, 2016). These products may go bad easily even before
deliveries are made. In Singapore, NTUC is famously known for organic products, groceries,
perishable products as well as other commodities highly consumed by the Singaporean
population. Online shopping by consumers at the comfort of their homes is limited to non-
perishable products. It is hard for Fair Price to deliver these products to their consumers since
they may go bad easily during transportation.
Also, NTUC faces stiff competition from other online retailers (Wirtz, 2016). In Singapore,
there are more than twenty online retailers stiffly competing with Fair Price over its population.
Therefore, it has to ensure incorporation of innovative ideas that outmatch their competitors. To
do this, they are tasked with great challenges as they have to stand unique, charge relatively low
prices while still maintaining their profit margins or even scaling them higher.
In its latest advance of going online, NTUC Fair Price will also face the management
problem. In its model, it will require a new set of team that will be tasked with the responsibility
of managing the online platform, handling complaints, demands as well as being in charge of
ensuring complete customer satisfaction from their online services. The tem will attract salaries,
rebates and other charges that will hardly be met by these online profits. The structural structure
of the organization will also be disoriented as a manager will have to be appointed to spearhead
the department. Venturing into online retailing will therefore attract NTUC Fair Price numerous
problems as well as reap it some benefits.

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Part Two
In going hybrid, NTUC will face numerous problems associated to online buying and
selling of commodities. To solve them effectively, they will need clear and concise plans at
combating them effectively. For this to be done efficiently, the organization will require root
definitions, CATWOE, and ‘AS IS’ and ‘TO BE’ business process plans (Hindle, 2017).
C Customers The people benefiting from the online services
A Actors People responsible for offering services such as
supplies.
T Transformation
Process
Converting the inputs to output
W Weltanschauung Making the services more meaningful and acceptable
O Owners Responsible for running the business services
E Environmental
Constraints
Outside factors that may affect the operations of the
organization e.g. competition.
Root definition names the particular system that supports the transformations in a business
set-up (Roome, 2016). In NTUC case, the management needs to define the exact problems that
they speculate to face as they go hybrid. In a day, NTUC Fair price makes three thousand orders.
Comparing this to a million orders a day that Amazon has or Alibaba, Fair Price has a major
problem facing it regardless of having over four hundred thousand subscribers to its online
platform. This is the main problem that NTUC should intend to focus on increasing its sales in a
day.
As per this year, Fair Price has continued to enjoy numerous benefits associated to large
economies of scale. These profits have not however reflected in the online platform. In as much

NTUC Fair Price Company Analysis 9
as it is continually making huge profits, the supermarket chain requires to adopt measures that
will certainly cause an overhaul in its operations, profit margins as well as customer satisfaction.
To achieve this, there will be the need to introduce changes in management models,
incorporation of new structural systems as well as rescheduling of roles in the organization.
Also, the issue of prices of commodities to ensure it reaps profits even after paying for the
delivery of commodities should be addressed. Most customers prefer shopping from online
stores that offer frees shopping in addition to low prices (Wang, 2015). In ensuring that Fair
Price still benefits from the price modifications, they should adopt measures aimed at reducing
their transport, handling and storage costs.
The supermarket chain also needs to come up with technological means of regularly
checking up on perishable commodities even before they get bad (Heizer, 2016). Perishable
commodities need regular checking to ensure they remain fresh and edible to consumers without
cases of poisoning. Delivery trucks or modes for these items also need modifications to ensure
they are fresh and intact during delivery. Lastly, NTUC ought to consider stocking their online
platforms with vast varieties of products as well as services as Amazon has done to maximize on
their sales.
Part Three
In solving these already identified issues, NTUC needs to adopt certain measures,
incorporate changes as well as cause an overhaul in some of its operations. In increasing its sales
from three thousands a day to more, it needs to increase its staff training hours from twenty five
annually to more than that. Learning and growth are two correlated issues that go hand in hand.
Ensuring the staff handling these online platforms are skilled will result in increased customer

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satisfaction from shopping with Fair Price (Richards, 2017). The staff will be well equipped with
necessary skills to be in hand with the competitive advantage over the industry.
In addition, NTUC Fair Price should evaluate the way its products are manufactured
(Chew, 2016). Having control over these management will offer the organization a chance to
track any shortages and wastes to ensure maximum customer satisfaction due to reduced prices
and enhanced customer services. NTUC has made tremendous achievements over the last few
years. The financial position of the company is and has been stable over the last few years. The
company continues to leap numerous profits from its partnership deals as well as from its vast
network and customer base that it enjoys in Singapore and in markets abroad. In using the
balanced scorecard to measure performance of NTUC Fair price, it is evident that the
organization has made efforts to ensure that it accomplishes sits targets as well as meets it set
standards. A business scorecard has four main perspectives that are addresses in details; financial
perspective, customer perspective, internal process perspective and finally learning and growth
perspective (Sánchez, 2015).
Financial perspective Application in NTUC situation
In most organizations, money is the first
motive. In particular, almost all profit oriented
institutions are concerned with the amount of revenue
and profit to be reaped from any investment of model
change.
NTUC Fair Price is similar. Almost all their
models are aimed at being the leading supermarket
chain in Singapore as well as outdo all other players
in the sector in profit making. Despite having
Paragon and Prime as well as Amazon as their
competitors, they are still able to award a hundred
and seven million dollars as dividends to their

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shareholders depicting their large financial base.
Customer perspective Fair Price Scorecard
Every business is aimed at having, attracting
and sustaining customers. The objectives of any
firm must revolved around having higher customer
satisfaction rate, have higher market share of
customers as well as ensure they are well aware of
their brands.
NTUC Fair Price takes pride in being the
most popular supermarket chain in Singapore
(Ling, 2017). The chain ensures constant
advertising to ensure awareness as it strives to
maintain their high customer base.
Internal process perspective Scorecard as per NTUC
This aims at the requirements that are
necessary to ensure customers are satisfied
and the process of ensuring the smoothness
of operation is achieved. It aims at capacity
utilization. Quality optimization as well as
process improvements.
NTUC regularly launces new
products tailored for their customers almost
every year. Since its conception, the chain
has been making improvements in its
operations at the same time maximizing
their output while utilizing their capacities

NTUC Fair Price Company Analysis 12
maximally.
Learning and growth perspective Fair Price Scorecard
In any firm’s scorecard, the learning and
growth perspective focuses on human capital
and their skills, the information levels,
organizational capital, that focuses on culture
and teamwork and alignment of staffs.
NTUC Fair Price has its own college
where all of their employees attend at least
twenty hours of training every year (Chew,
2017). This ensures richness in information
capital as well as boosts the skills of the staff
in handling customers.

NTUC Fair Price Company Analysis 13
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