BUS 344 Project Report: NTUC Fairprice Myanmar Business Plan

This report examines the potential of NTUC FairPrice in the Myanmar market. It begins with an executive summary and an introduction to the retail market, focusing on the competitive landscape and industry lifecycle. The report provides a detailed company description, including its business types, legal structure, history, mission, objectives, and principles. Product and service factors are analyzed, including customer profiles and competitive situations. Environmental factors, such as the host country's business climate, SWOT analysis, government constraints, and legal aspects, are also evaluated. The core of the report focuses on business strategies, including product positioning, pricing, distribution, and promotion, along with financial planning and management considerations. The report concludes with recommendations for NTUC FairPrice to enter the Myanmar market, emphasizing the importance of a joint venture strategy and diversification to mitigate risks and capitalize on market opportunities. The report recommends focusing on import and export business and the use of diversification strategies to enhance business potentiality.

BUS 344 PT – B
Company Name: NTUC Fairprice
(Word Count)
Team Members:
Lim Jing Heng (Eddie) 32519023
Bavani d/o Jayakumaran 33042764
Thio Kwan Liang Brian 32799198
Tan Hui Lin (Alex) 33162264
Rachel Ong Mei Ying

Content Page
1.0 Executive Summary
2.0 Introduction
2.1 Use of Integrative and Protective Defence Techniques
2.2 Identification of Industry Lifecycle Stages
2.3 Positioning using Perceptual Map
3.0 Company Description
3.1 Business Types
3.2 Legal Structure
3.3 Company History
3.4 Company Mission
3.5 Company Objectives
3.6 Company Principles
3.7 Ownership Structure
4.0 Product/ Service Factors
4.1 Customer Profile/ Demand Analysis
4.2 Geographic Segmentation
4.3 Demographic Segmentation
4.4 Psychographic Segmentation
5.0 Environmental Factors
5.1 Host Country Business Climate
5.2 SWOT Analysis
5.3 Government Constraints/ Incentives
5.4 Laws/ Regulations/ Administrative Practices
6.0 Business Strategies (1100 words) ALEX
6.1 Distribution and Logistics
6.2 Distribution & Logistics
6.3 Promotion and Advertising
6.4 Service Strategies
7.0 Justification of Recommendation
7.1 Cost Analysis/ Funding/ Cash Flow
7.2 Projected Profit and Loss statement
7.3 Other Financial Statements/ Data
8.0 Implementation, Control and Follow-Up
8.1 Personnel/ Sales force factors
8.2 Business Advisers
8.3 Contingency Plans
9.0 Conclusions/ Recommendations
1

1.0 Executive Summary
The aim of this report is to discuss about the potentiality of NTUC FairPrice in
doing business in Myanmar. In this report, the company profile of NTUC FairPrice is
being extensively discussed and critiqued. This includes the discussion of the history of
them and their current operations and portfolio. In addition, this report also discussed
about the segmentation strategies being followed by them. There are number of
segmentation variables being identified for NTUC FairPrice in this report. Furthermore,
the business strategies of NTUC FairPrice are being discussed along with the evaluation
of the legal formalities of doing business in Myanmar. The projected profit and loss
statement is also being discussed and it is identified that NTUC FairPrice is having fair
potentiality in doing business in Myanmar. This report concludes that NTUC FairPrice will
have favorable market opportunities in Myanmar due to the fact that demand is
increasing in the country. It is also recommended that they should opt for joint venture
strategy in having less risk in their foreign market operation. A few challenges also
being identified in this report, which should be mitigated in order to enhance their future
business potentiality. This report recommended that NTUC FairPrice should focus more
on their import and export business due to the reason that it will help them to cater to
the larger market segments in the global business scenario. In addition, this will also
help them in properly utilizing the resources and assets in Myanmar. On the other hand,
this report also recommended that NTUC FairPrice should also initiate diversification
strategy to enhance their business potentiality. This is due to the reason that initiation of
the diversification strategy will help them to have their market presence in different
business sectors and less dependency on a single market or single customer segment.
2

2.0 Introduction
The retail market can be considered as one of the most competitive and highly potential
sectors in the current time. The main reason was that of the large numbers of retail
brands that are foraying in this sector along with offering huge diversity of products. On
the other hand, the retail sector was also witnessing massive inflow of customers across
different price level. However, it should also be noted that different countries are having
different sets of the business scenario and situations in regards tothe retail sector
(Kumia et al., 2015). For instance, the retail sector of Singapore was facing a
substantial amount of issues and challenges due to various reasons. It was reported
that the significant problems with the retail industry in Singapore were raising the
operational cost, reduction in sales revenue and onslaught by the online marketplace
(Ivanauskiene, Neringa, & Justina Volungenaite, 2015). Thus, leading to the closure of
several global retail brands such as GAP and Carrefour in the Singapore market. It was
reported that online sales were rapidly increasing in Singapore with being reported that
Singaporeans were the topmost online shoppers in the South East Asian region (Lee &
Boom, 2013).
2.1 Use of Integrative and Protective Defensive Techniques
There was a couple of brands already operating in the Singapore market by having
different sets of strategies. However, determination of the common approaches initiated
by the entire Singapore retail industry would help to identify their suitability of global
integration and the degree of responsiveness (Roll & Martin 2015). In this case,
integrative and protective-defensive techniques by Luthans and Doh would be used.
The following section will graphically represent the industry approaches of the
Singapore retail industry.
3

Fig 1. Industrial Approach for Singapore Retail Industry
Source: Done by the author
Thus, from the above representation, it was identified that Singapore retail industry was
the more responsive in nature. The reason was due to that of the dynamic high
technology element was more inclined towards integrative techniques. This denotes that
integration was highly evident in the Singapore retail industry to have access to the
latest technology. This was also denoting the greater extent of global integration of the
industry.
2.2 Identification of Industry Lifecycle Stages
Determination of the industry lifecycle stages was important because the attractiveness
of the industry would get determined by their lifecycle stages. According to the
information identified, Singapore retail industry was currently standing in the maturity
stage (Wang et al., 2014). This was due to the reason that Singapore is a small country
4

with having limited market potentiality. This potentiality was further getting limited with
the entrance of the number of more retail firms in the market. It was noted that
Singapore is one of the most developed countries in the South East Asian region and
was having a globalized retail scenario from their initial stage (Tavassoli& Sam, 2015).
Thus, they have completed the growth stage and going through the maturity stage.
According to the current reports, Singapore retail market was showing a reduction in
customers demand, which was the impact of maturity stage and incoming of decline
stage.
Fig 2. Customer Demand Chart
Source: Done by the author
2.3 Positioning Using Perceptual Map
5

Fig 3. Perceptual Map
Source: Done by the author
According to the above perceptual map of National Trades Union Congress (NTUC)
FairPrice, it was identified that the positioning of them was based on their lower price
points and higher-level product assortments. The price point of NTUC FairPrice was
their primary unique value proposition, and this has in turn help to attract more
customers over their competitors through cost leadership (Sirianni et al., 2013). The
above map has shown the unique positioning of NTUC FairPrice was helping them to
have a lower range of competition in the market.
3.0 Company Description
NTUC FairPrice is one of the leading retailers in the Singapore market. It was
reported that they were having more than 100 supermarkets across the country.
Therefore, making them the largest retailer in Singapore (Fairprice.com.sg, 2018).
Recently, they have ventured in Vietnam and Chinese market further increasing their
foothold in the Asian market. The National Trades Union Congress is running NTUC
FairPrice and thus they are being operated as a cooperative rather than a single private
entity.
3.1 Business Types
6

Business type of NTUC FairPrice could be considered as a retailer. This was due
to thesimilarities in comparison to other retail brands; they were also reselling the
manufactured products to the end customers. The branded manufacturers were
manufacturing all the commodities offering by them and NTUC FairPrice was reselling
them just like any other retail marketers. On the other hand, it was also identified that
NTUC FairPrice had their house brands under which they were offering private label
products to the customers (Dawes et al., 2013). These products were manufactured by
them and sold through their stores across the country. Thus, they could also be
considered as manufacturers of the consumer goods. In the case of NTUC FairPrice,
the house products were manufactured by them but with the collaboration of third-party
vendors (Koschate-Fischer et al., 2014). The manufacturing process was being
outsourced to these third-party vendors, and end products were selling under the brand
name of NTUC FairPrice. However, this also denotes that NTUC FairPrice is a
manufacturer as well as a retailer.
3.2 Legal Structure
The legal structure of NTUC FairPrice can be termed as cooperative due to the
reason that the national trade union congress founded it and there was neither a single
proprietor for them nor were they having partnerships. NTUC FairPrice is incorporated
under the companies act, and they were considered as a separate legal entity other
than of their founders. The corporation or cooperative legal structure of NTUC FairPrice
was having multiple advantages for both the internal as well as external stakeholders
(Perlmutter & Howard, 2017). One of the significant benefits to be gained by the
management from the legal structure of cooperative was the limited liability. This was
due to the reason that cooperative or corporation was considered a separate legal entity
and management was not responsible for its entire value. On the other hand,
corporation structure is also helping the external stakeholders including customers to
have the right quality in the right price (Eisenberg & Melvin Aron, 2017). It was due to
the reason that corporate business structure was highly regulated in nature with more
7

number of legal formalities. Thus, the interest of all the stakeholders was taken into
consideration.
3.3 Company History
NTUC FairPrice was founded in Singapore in 1973 with the major mission of
mitigating the rising price of the necessary items due to the continuous phenomenon of
inflation. In the initial stage, they had one of a kind concepts in the form of a
supermarket. It was reported that in 1983, NTUC and Singapore Employees
Cooperative got merged to form the present day NTUC FairPrice. They wereestablished
not just for maximization of profit instead they were set up to check the rising cost of the
commodities and maintain the cost of living in Singapore. In 2003, NTUC FairPrice
partnered with ExxonMobil in having their convenience stores in the fuel stations.
Currently, they are positioned as the largest retailer in Singapore with multiple brands to
cater to the needs of different customers by offering them a variety of products.
3.4 Company Mission
The mission statement of NTUC FairPrice is to provide the best quality products
with right value to the customers along with providing the best possible services.
Besides, their mission statement also states that they target to be the most preferred
employer in Singapore. It could be concluded that the mission statement of NTUC
FairPrice depicting their social orientation over the profit maximization (David et al.,
2014). This also helped them in positioning themselves as a socially responsible brand
in the market. The mission statement of NTUC FairPrice also include stating about
fulfilling the needs of their members. This denotes that they were considerable towards
managing the interests of the stakeholders and paying their value.
3.5 Company Objectives
8

Primary objective of NTUC FairPrice is to become the leading world-class retailer
by having social approach. Thestrategic business intent of maximizing their profit
without involving the community or society. They also aim to become a global retailer by
entering in more potential countries and maximizing their market presence (Aier&
Stephan, 2014). These represent their long-term business goals and strategic intent.
Thus, it could be concluded that the business objectives of NTUC FairPrice were
targeted towards becoming a more socially responsible retail brand in the world.
3.6 Company Principles
According to the information available on the official website of NTUC FairPrice,
there was a few values based on which, they were operating. One of their major
principle was being customer orientated. This helped them to design their business
strategies in accordance to the need and requirements of the target customers.
Also,helping them to enhance the satisfaction level of the customers. Another major
principle for NTUC FairPrice is teamwork which applies to their internal stakeholders
and indicates the level of coordination and cooperation was maintained in the
workplace. This aided NTUC FairPrice to have more effective strategic tool of resolving
the issues with the employees and maximize their productivity.
3.7 Ownership Structure
NTUC FairPrice is a publicly traded company with having 51 percent shares with
National Trade Union Congress and NTUC Enterprise Co-operative Limited. The rest of
the shares were traded in the stock market, leading to multiple ownerships. This was
evident in the presence of directors in the board from different entities for NTUC
FairPrice.
4.0 Product and Service Factors
NTUC FairPrice believes in providing their customers with the best value quality
products and excellent service to consumers. Providing high-quality products,
exceptional service standards and maintaining a customer-centric approach has been
9

deemed to be the best brand identity for NTUC FairPrice.
According to Nielsen Emerging Market Insights Survey 2014, Myanmar’s “Fast Moving
Consumer Goods” (FMCG) sector had experienced an increase of 15% in the past few
years and 47% of the consumer’s monthly expenditure was largely based on
necessities such as food and groceries, household products and personal care products
(Figure 1). With this rising demand, potential investors were optimistic about future
opportunities in the supermarket industry in Myanmar.
Myanmar’s middle-class population has shown a growing increase in their spending
power and the ability and willingness to purchase non-locally produced products.
Currently, the majority of FMCG imports are from Thailand and China. These
opportunities assisted NTUC FairPrice in entering the Myanmar market.
4.1 Customer Profile and Demand Analysis
Over the last ten years, the income of the middle-class population in Myanmar has been
rapidly increasing. According to McKinsey Global Institute’s report from June 2013,
Myanmar’s middle class would reach 19 million people, and their spending power could
grow to US$100 billion by 2030. Naturally, this would have an impact on consumers’
preference towards purchasing international products, especially if NTUC FairPrice
decides to venture into Myanmar’s domestic market.
Although households still go to traditional markets to buy fresh meat and vegetables,
changes to lifestyles and trends had change rapidly resulting in consumers visiting
supermarkets and convenience stores more often.
However, Myanmar consumers were still familiarizing themselves with the abundance of
10

international brands flooding into the market. Hence foreign companies need to devote
resources to ensure the marketing of their products to be reliable and trustworthy.
4.2 Geographic Segmentation
Yangon is the capital city of Myanmar with a population of 3,874,000. The other portion
of Myanmar was divided into four topographic regions that are mainly mountainous
area.
Myanmar is located in a prime geographic location between China and India. With the
new enactment of a new Foreign Investment Law (FIL) along with other economic
reforms, many foreign companies have seen Myanmar as an opportunity to venture
into. It means that NTUC FairPrice’s consideration ofentering into the Myanmar market
would be welcomed.
Myanmar has been distanced from the world for five decades. Hence consumers are
looking forward to the exposure of international products and services.
Labor in Myanmar is still relatively low, which provides the investor a great advantage to
hire more employees and keep their quality of service.
4.3 Demographic Segmentation
According to the United Nations, Myanmar has a population of about 5.5 million of
which 5% of the population is over 65 years old and 29% below 15 years old. Myanmar
has a large youth population with an average age of 27, and about 55% are under the
age of 30. They are fairly educated which is an opportunity for international markets to
enter into Myanmar.
When NTUC FairPrice is considering to enter the Myanmar market, they will need to
understand this growing segment of youth and their needs. Currently, Myanmar already
11