Strategic Management of Giant Hypermarket

This report discusses the strategic directions followed by Giant Hypermarket in the past 5 years, analyzes the external environment of the company, and suggests future strategies. It also provides insights into the company's vision, mission, and strategic capabilities.

STRATEGIC MANAGEMENT
ASSESSMENT 1

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
The strategic directions that the Giant Hypermarket has followed along with the way in which
it has developed strategic thinking.........................................................................................3
TASK 2............................................................................................................................................6
Review the external environment of the company.................................................................6
TASK 3............................................................................................................................................9
Further analysis......................................................................................................................9
TASK 4..........................................................................................................................................11
Possible strategies that Giant supermarket could follow to defend its core business..........11
TASK 5..........................................................................................................................................12
Evaluation the resources' implication of recommendations.................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Strategic management is the process of constant planning, supervising, analysing and
examination of all that is necessary for an organisation to meet its goals and objectives. It is the
technique that is used to plan for the future. Organisation creates vision by developing long term
strategies (Ansoff and et.al., 2018). It helps to identify necessary processes as well as resource
allocation in order to achieve desired objectives and goals. This present report is context to Giant
Hypermarket of Malaysia. It is a type of market which is doing business as Giant Hypermarket
and retailers chain in Malaysia, Vietnam, Brunei, Indonesia and Singapore. Company was
founded by Teng Family with a small grocery store but now having 84 store outlets. In Malaysia,
Giant is the largest supermarket. This report is all about the strategies directions that the
company followed in past 5 years, a detailed analysis of the industry in which the company
works and future possible strategies that organisation could follow.
TASK 1
The strategic directions that the Giant Hypermarket has followed along with the way in which it
has developed strategic thinking
Background of the company
Giant supermarket was founded in the year of 1944. At initial stage it was at small level
& expanded its business by opening its Teng mini market centre in Bangsar in the year of 1974.
It had approximate 8 Giant hypermarkets, 10 supermarkets and 3 cold storage supermarkets.
Today this company is known as GCH retail Sdn Bhd. Dairy firm acquired Giant in the year of
1999 as it was known as the best supermarket who focuses on providing qualitative products &
value for money products (Background of Giant's supermarket, 2011). Its vision statement is to
become pioneer of mass market retailing. Mission statement is to offer the highest and purest
qualitative products with affordable prices to customers.
In the context of shareholders, company provides value for customers by offering them
variety of products, extra post selling services which can improve customers experience like free
parking, home delivery, kids self check out etc. Some of its branches are also opened for 24
hours. The main aim of providing all these services is to make stakeholders happy and motivate.
After performing well & so many efforts it redesigned its products and offered non-food
products like cleanliness, safety & structured training. Rapidly this company had grown &
operate a total 86 number of supermarkets in Malaysia. On March 2008, Giant supermarket

Brunei Darussalam was opened at Tasek Rimba and these openings show its rapid growth in this
industry.
Statistics & graphs
Illustration 1: Financial values
Sources: (Financial performance of Giant supermarket, 2017)

Core competencies & resources
There are several principles and resources which are being used by this company. It
strongly believes in its core values, effectiveness of team work, continuous innovation that drive
to the company growth and provide sustainable results. It has effective short term and long term
business plan that is its core competencies. In the context of short term plan it wants to offer the
best prices products as compared to other hypermarkets. On the other hand it also wants to target
a new market and wants to serve them & it is its long term business plan.
Strategies adopted by this company
In the context of strategies and tactics Giant had used several strategies which was the
main reason of their success and growth. On the other hand, it is also stated that some of all
strategies got failed and due to those failure strategies Giant had to face several challenges. Giant
focused on becoming lowest cost producer in the industry and provided its products at lower
prices. It is called its best and effective strategy. In addition, it also focuses on creating internal
efficiency that help this company to protect itself against external factors and pressure. It focuses
on continuous interacting with environmental suppliers as well as government sector (Strategies
used by Giant hypermarket, 2014).
Illustration 2: Distribution % of supermarkets
Sources: ( Number of outlets of Giant supermarket, 2013)

It can be said that if Giant uses differentiation strategy then it could create loyalty to
customers through their products & unique features offerings.
Organisational analysis: It is a process by which the company review work
environment, personnel and operations of is business. In the context of Giant supermarket, it uses
several strategies as it has some strengths which makes it able to take advantages against similar
companies which includes Tesco stores. Its mission was to offer a broad assortment of
merchandises at the lowest possible monetary value. It has several strengths such as it had
branches in several Asia countries and have high credibility. Some of its stores in Singapore
provide 24 hours services. It focuses on several programmes whose main aim to pamper its
shareholders. It has approximate 1,000 employees in total nationwide (Organizational analysis,
2018).
TASK 2
Review the external environment of the company
Environmental analysis
1 Reason of using tool: There are several external factors that can have positive and negative
impacts on the performance and growth level of Giant supermarket. In order to remove all
negative impacts it makes an effective use of PESTLE analysis model. This model helps out this
company to analyse all factors and take competitive advantages.
2. Meaning of findings: PESTLE includes all elements of macro environment. It stands for
political, economic, social, technological, legal and environmental analysis. In overall findings
this company can also be expanded through products brand extension, service experience &
coupon promotion (Findings of environmental analysis, 2013.).
3. Trends: It is in trend and are using by several companies. It is being used for informing other
business management tools like risk analysis, SOAR analysis etc.
4. Competitiveness: In the context of competitiveness regarding this model and environmental
analysis it can be said that there are several companies who are making an effective use of this
model. With this help they can easily analyse all external factors.
Political factors:
It is stated that people of Malaysia are becoming more health conscious so they only
prefer fresh and healthy foods. Thus, the government embodied the rule for all retailers that to
increase standards of products quality. For following this rule, Giant hypermarket requires

investing in equipments like facilitation, increase supply chains' efficiency etc. Giant has not yet
used advanced technology by which this factor impact on its financial sheet for the year. Political
stability of this company is not so good, so there is a big risks of riots and strikes. These
conditions can have negative impacts as it can decrease its sales (Nandonde, 2019).
Economic Factors:
It is stated that economy of Singapore is experiencing economic slowdown. There are
several factors like declining and ban of non-oil domestic export. In the context of Giant, it is
reported that this supermarket is already offering qualitative products at cheap price, so
economic factors do not have significant impacts. On the other hand inflation rates, GDP of this
particular country impacts on its operations. It offers in Asia and economic rate is increasing
rapidly so it becomes difficult for Giant company to operate effectively in other countries.
Social Factors:
Social factors like changes in needs, preferences of people. These factors impacts on
Giant supermarket in both positive and in a negative manner. It is reported that many people and
Singaporeans visit supermarkets approximate 8 times in a month & visit hypermarket only 2
times in a month. It is beneficial for Giant because it operates both hypermarket & supermarket.
On the other hand, now many people wants to get their products delivered directly. They prefer
online shopping which has some negative impacts because it requires hiring a staff who maintain
online delivery and oversee all functions.
Technological Factors:
In the context of technology, Giant is now more investing and focusing on satisfying all
needs of its customers like home delivery, online shopping, RFID tag in order to simplified
supply chain. It can increase its overall cost, otherwise there is no negative impacts of
technological factors (Masih and et.al., 2019).
Legal Factors:
Legal factors include some employment and other rules and laws related to retail
industry. There are mainly 2 laws that can impact on its growth and profitability. The first law is
food hygiene law through NEA & second regulation for alcoholic beverages. According to the
hygienic law there is a requirement for this supermarket to upgrade its system of delivery and
follow each & every guideline. According to the alcoholic beverage law, Giant can not sell
alcoholic beverage before 10.30 PM. Both laws can decrease its sales and increase its costs.

Environmental Factors:
In the context of environmental factors it is stated that Giant is more focusing on
maintaining the sustainability of environment by decreasing usage of electricity and using
recyclable bags. In addition, it also focuses on saving fuel by offering home delivery and free
shuttle services to all its customers.
Competitive Analysis of Giant Hypermarket.
There are some forces that can impact in the company as it can provide several threats.
So it is important for this company to analyse all these factors. Competitors factors includes:
Threat of Competition: Competition among existing retailer supermarkets is the main
big threat for Giant. There are several competitors that provides similar and variety of products
to consumers. This competition among existing players can decrease sales and profitability of
Giant. It is clear that Giant supermarket has high competition among existing and established
companies. It is also stated that Giant offers qualitative products at lower prices as compare to its
competitors (Competitive analysis of Giant supermarket, 2013). It can be said that by focusing
on low cost with good quality of products it can decrease it can take competitive advantages.
Bargaining power of customers: Customers have more power in some conditions.
There are several substitute products which are being provided by other companies. Customers
wants qualitative products at affordable prices and for that they go to several shops. They put
pressure on companies and Giant hypermarket to offer products at lower prices.
Bargaining power of suppliers: It is stated that suppliers prefer to sell raw materials and
other goods to Giant at the highest possible price. Profitability and productivity of this company
is all depends on bargaining force of suppliers. This power of suppliers in the context of Giant
retail industry is high. Suppliers demand to Giant to pay a certain price and Giant have to pay for
selling its items to customers.
Threat of substitute products: It is stated that Giant hypermarket has a high threat from
substitute products. Products which are being sold by this hypermarket are imitable and are
available at same prices. When customers find and get same features of products at another
supermarket with same prices then they often prefer to go there. So it can be said that, this threat
of substitute products is high.
Threat of new entrants: Giant offers its services and products at lower prices with the
best quality. There are several opportunities & advantages for this hypermarket to gain

competitive advantages and attract wider range of customers. The threat of new entrants in retail
industry is low as other entrants can not provide their products at lower prices. It is difficult to
compete with Giant, so this threat is low.
TASK 3
Further analysis
Vision & Mission
Giant hypermarket is the largest hypermarkets in Malaysia. The cardinal people to the
success of this hypermarket are Teng family and CEO John Coyle. Its mission is to provide it's
all products and services at the lowest possible prices to its customers and give value for money.
With the increasing its brand image and reputation, its business also developed. The main key of
success of this hypermarket is called its ability to provide value for money products.
Vision statement of this hypermarket said that it wants to become the pioneer of mass
marketing retailing in Singapore. By delivering the fresh and finest quality of food and non food
products with the lowest price in enormous quantity to all its consumers it wants to become the
market leader in this retail industry (IRNAWATI and SURYANI, 2018).
Strategic capabilities
Strategic capabilities refers the overall strengths of the company which makes it able in
accomplishing its pre determined goals.
Internal and Domestic Presence: Gaint hypermarket has internal presence as it is
recognised as one of the top brand in retail industry of Malaysia. Company is operating as a
subsidiary of Dairy Farm International Holding LTD. However, In Malaysia, Gaint is one of the
biggest supermarket in the nation. It has its strong presence and retailer chain in Indonesia,
Brunei, Cambodia etc.
Culture and Human resource management of firm: Gaint Hypermarket is focusing on
human resource management in order to maintain the best culture within the workplace. They are
planning to make the culture like that company can able to fulfil the demands of 21st century. It
employs approximate 1,000 employees of different culture, so it is essential for this retailer to
focus on HR management for developing collaboration.

Research and Development Strength: Gaint Hypermarket is investing huge amount in
R&D in order to gain the complete knowledge and understanding of customers demands,
competitors strength, recent trends and others valuable information.
Effective Supply Chain: Gaint has effective network of supply chain as they use multi
models management of logistic. The effective supply chain is the biggest strength of the
company as it reduces the entire cost of logistic, bring efficiency by deploying technologies and
expand the strategic toolkit.
Stores and Outlets: The stores and outlets are very well designed and completely
hygienic. They are using advance technologies that attract customers towards thee stores like
Robotic devices, innovative payment machines and many such machines that makes there stores
SMART. E-wallet payment option is also being given by giant to its customers to make payment
more easy. If people do not have cash on hand then they can pay for their groceries by this
(Strategic capabilities of Giant hypermarket, 2019).
RESOURCES VALUE RARITY INIMITABLE ORGANISED IMPLICATION
Internal and
Domestic Presence
YES YES NO YES Temporary
Competitive
advantages
Culture and
Human resource
management of
firm
YES YES NO YES Competitive
rewards
Research and
Development
Strength:
YES YES NO YES Temporary
Competitive
advantages
Effective Supply
Chain:
YES YES NO YES Temporary
Competitive

advantages
Stores and
Outlets:
YES YES NO YES Competitive
rewards
So, it can be said that strategic capabilities of Giant are effective and no other companies
can imitate these strategies. So it can take competitive advantages by making an effective use
and development of all these strategies.
TASK 4
Possible strategies that Giant supermarket could follow to defend its core business
In order to gain competitive advantages and defend core business there is an effective &
well-known strategy called as Ansoff matrix. This strategy is made up of 4 different strategies
such as market penetration, product development, market development & diversification. It can
help out to Giant hypermarket that what strategies can support it to defend its core business.
Product development: This is a growth strategy. According to this strategy company
can take competitive advantages as it requires introducing its new product in its existing market.
For making this strategy successful, there is requirement to invest in research and development
about its new product & its demand.
Market development: According to this strategy, company needs to focus on new
market by introducing and developing its existing products to new target customers. The focus of
the company in this strategy should on new market rather than new products.
Market penetration: This strategy believes that if Giant company wants to increase its
market share then it requires focusing on selling its existing or current products in existing
market. There is no requirement to develop new product and in new market. It is comparatively
cheap and time consuming strategy (Schawel and Billing, 2018).
Diversification: This is the growth strategy that states where company tends to raise
there sales and customer base by introducing new products in new market. It is comparatively
expensive and time consuming strategy to others.

From the above discussion, it can be stated that the best possible strategy that Gaint
Hypermarket could follow to defend its core businesses is Market penetration strategy as they
can focus in products and markets. This strategy has possibility to have an enough information
about there competitors as well as the needs of customers. In addition to this, it also does not
require investment in R&D.
TASK 5
Evaluation the resources' implication of recommendations
It is recommended that the Giant company should focus on market penetration strategy. It
could focus on market penetration to defend its core business.
Here are the key resources of supermarket which are discussed below-
Human Resource: Gaint Supermarket should focus on hiring human resources within
organisation as it the key competencies of this company being a healthy culture within
organisation. They should focus on cultural diversity to have the best effective diversified culture
within organisation.
Operations: It is important that company should have strong operational department
where they can provide the products which they have make commitment with the customers. It is
all important to have good quality standard because Gaint is one of recognised brand across the
world. Operations also include the supply chain networks, so company should focus have
effective supply chain sop that products can reach to end users without any delays.
Finance: By following market penetration strategy, it is important that company should
have proper and enough fund so that Gaint can undertake sales promotion, conduct market
campaign and improve the advertising strategies so that they can raise the profitability in existing
market. They should hire an expert in Finance so the budget can be monitor and can be evaluated
effectively (Schu, Morschett and Swoboda, 2016)
.
Technology: The role technology play in the expansion of the business is incredible.
Gaint Super market should use advance technologies so that they can attract customers like

advertising on social media. They should make there pages on social networking sites and they
should post advertisement of product as well as it also keep the customers in touch and aware.
Use of Business Canvas Model: This is also one of the bes way to achieve the desire
goals and objectives where company can identify how they can deliver and acquire the within the
operative industry with the customers.
CONCLUSION
From the above study it has been summarized that different types of strategies and
models played a vital role in taking competitive advantages. With the help of using PESTLE
analysis model, VRIN model, Porter's 5 forces model, the selected company made itself able to
accomplish its vision and objectives. It has also shown importance of Ansoff matrix model and
strategy, by which the selected company can take several opportunities and advantages. It can
also be stated that strategies of the business should be aligned with the mission and vision to
execute the plans and desired goals and objectives

REFERENCES
Books and Journals:
Ansoff, H.I. and et.al., 2018. Implanting strategic management. Springer.
IRNAWATI, D. and SURYANI, T., 2018. The effect of perception justice and perceived value
to satisfaction and its impact on giant hypermarket customer's response in surabaya and
sidoarjo.
Masih, J. and et.al., 2019. Market Capturing and Business Expansion Strategy for Gluten-Free
Foods in India and USA Using PESTEL Model. Sciences. 10. pp.202-213.
Nandonde, F.A., 2019. A PESTLE analysis of international retailing in the East African
Community. Global Business and Organizational Excellence. 38(4), pp.54-61.
Schawel, C. and Billing, F., 2018. Ansoff-Matrix. In Top 100 Management Tools (pp. 31-33).
Springer Gabler, Wiesbaden.
Schu, M., Morschett, D. and Swoboda, B., 2016. Internationalization speed of online retailers: A
resource-based perspective on the influence factors. Management International
Review. 56(5). pp.733-757
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