Strategy Management of General Electric And Air Conditioning Items

STRATEGY MANAGEMENT

Executive Summary
Gain City offers general electric and air conditioning items. The company collaborate with
supplier, provisions, and manufacturing of installation services related to electric products to
conduct its business activities. The report draws a strategic analysis through appropriate
management tools such as SWOT analysis, Porter`s five forces model, and VRIO framework.
SWOT analysis examines the internal factors, which the company already possess that can be
either strengths, weaknesses, threats, or opportunities. Porter’s five forces model examines
the pressure of electronic industry on Gain City. Pestle analysis of the Singapore depicts that
there is upsurge in technological advancement so there is an opportunity to innovate Air
conditioner facilities because nation is dominated by moderate temperature ranging between
“25-37 degree Celsius.”

Contents
Introduction................................................................................................................................3
Macro environmental analysis...................................................................................................3
Porter`s five forces model..........................................................................................................4
VRIO framework.......................................................................................................................6
SWOT analysis...........................................................................................................................7
Conclusion..................................................................................................................................8
References..................................................................................................................................9

Introduction
Electronic store Gain City was founded in 1981, which strived to improve customer`s
lifestyles and become a trusted retailer. The company has been growing strengthened in
consumer electronic retailing business. The organisation offers huge range of electrical
appliances, which includes home appliances, IT products, audio-visual items, and air
conditioner (Lim, 2015).
Financial status of Gain City for 2015 is estimated at $200 million and employee based of
750 people (Todayonline, 2020). 90 percent of revenue is from sale of electric goods,
installation events, and repair work. Key competitors are Philippine long distance, M1
limited, Sell2World Inc., and Starhub.net.sg. The report brings out a discussion on strategic
analysis of Gain City by examining it through Pestle analysis, SWOT analysis, Porter`s five
forces model, and VRIO model with an aim to examine the threats and opportunities of
environment (Indartono, and Wibowo, 2017).
Macro environmental analysis
Pestle analysis is a tool utilised by the marketers to keep a check macro-environmental
factors and their influence on organisation. A Pestle analysis considers factors such as
political factors, economic factors, social factors, technological factors, environmental
factors, and legal factors.
Political factors-
It consider the factors, which shows the level of intervention in economy. It will include
political instability, taxation policy, labour law, trade restriction, and foreign trade policy.
Singapore is politically stable nation but currently it suffer from lower oil prices, currency
depreciation, and low fiscal balance. Singapore is expected to foresee recovery of economic

activity, and strengthening of economic growth in coming years. Nation`s stability has
transformed threats in opportunities (GuideMeSingapore Hawksford, 2018).
Economic factors-
Economic factors often have significant impact on how the organisation conduct business to
become profitable. The factors will include interest rate, inflation rate, personal disposable
income, and economic growth. The GDP of Singapore is $585.055 billion in 2019. The
inflation rate is 1.4 percent in 2019. The unemployment rate is estimated at 2.3 percent in
2019 (Tradingeconomies, 2019). E-commerce threats in Singapore in consumer electronic
space is not huge as compared to larger markets including Australia and China. Singapore is
well connected to the small markets where these retail outlets are accessible in a feasible way
(Rastogi, and Trivedi, 2016).
Social factors-
The sale of Gain City depends on the perception of the people in Singapore. It comes under
experiences where there is an increase in housing boom, disposable income, and people
spending on the luxury items. The culture of Singapore is based on knowledge, which attracts
multinational investments. It has open trade policies, excellent infrastructure, and
communication links, which sharply demand of City Gain products (Laverty, Thompson,
Cetateanu, and Filippidis, 2018).
Technological factors-
Gain City electronics will be supported through open and connected, free trade agreements,
human capital and their talent, data friendly, and digital trade. Internet plays an important role
in advancement of electronic items in Singapore. The penetration rate for broadband is more
than 70 percent through which one can flourish the use of air conditioner dealing in retail
selling (Laverty, Thompson, Cetateanu, and Filippidis, 2018).

Environmental factors-
The company has to invent relative technologies or measures so that use of their products do
not cause water pollution, air pollution, and deforestation. Organisation has no control over
the external environmental factors, which measure market trends to understand. Law implies
on climate change, green agenda, pollution, availability of the natural resources and waste
disposals.
Porter`s five forces model
Porter`s five forces model is a management tool to analyse competition of business. Porter`s
five forces need to check the re-assess the marketplace and its change in the industry.
Organisations will consider facing horizontal competition including threat of substitute
services and products, threat of new entrants, threat of rivalry, bargaining power of customers
and suppliers (Varelas, and Georgopoulos, 2017).
Bargaining power of buyers-
It depicts the ability of Gain City`s customers to drive the prices of the household appliances
depending on price sensitivity. Core deciding factors include ease of switching to rivalry, and
deriving buyer`s information in regards to prices of appliance makers (Yudiono, Wilopo, and
Iqbal, 2019).
The bargaining power of buyers is considerably high because it has been constrained by the
customer loyalty to differentiation efforts with the importance of appliances and products. It
can induce customers and maintain sales but the cost of switching to competitors is high for
similar products such as televisions, microwaves, and refrigerators, and Air conditioner
(Yudiono, Wilopo, and Iqbal, 2019).
Bargaining power of suppliers-

Suppliers to Gain City is composed of manufacturer, which has key inputs used to make
home appliances and other electronic items. The company has a variety of goods to offer
most importantly air conditioners with a host of numerous home appliances with the nation
share of 20-25 percent (Hussain, and Terziovski, 2019).
Threat of new entrants-
As the industry earns super profits, so it attracts new organisations looking to diversify by
creating it more competitive. It will further lower the profits for all the players. Most
common barriers in the industry includes economies of scale, product differentiation,
accessibility to the distribution channels and government legislations. This concludes that the
company faces low threat of entry, as it has remained and strengthened in consumer
electronic retailing business. Although, the company has the advantage of favouring
legislations by the Singaporean political markets (Miller et al., 2016).
Threat of competitive rivalry-
The intensity of the competition between the numbers of factors include high level of
differentiation between products and the organisation. Company faces high competition from
Philippine long distance, M1 limited, Sell2World Inc., and Starhub.net.sg. Although the
company has achieved a state of great player in electronic and home appliance. This often led
to price wars, product innovations, and intense advertisements (Yudiono, Wilopo, and Iqbal,
2019).
Threat of substitution-
Substitutes do not mean that products are the direct rivalry but they are the similar products,
which performs as substitutes. For example- substitutes for the Gain City`s air conditioners
can be obviously fans as being used in offices and workplace for aeration (Tresna, and
Raharja, 2018).

VRIO framework
VRIO analysis is a framework, which is used to determine competitive potential of
organisation. The dimensions used include value, imitability, rarity, and organisation
(Shopsinsg, 2020).
Parameters Rare Costly to
imitate
Organisation Valuable
Geographical
penetration
No No Yes Yes
Advance
technology
Yes Yes Yes Yes
Human
resources
No Yes Yes Yes
Domain
practises
Yes No Yes Yes
Strategic
appliances
No Yes No Yes
Company does not generate direct revenues as it not avail only services but also it avail
products. It demonstrate growth with a variety of growth strategies, which is implemented in
the organisational structure. Market development places venturing foreign markets with the
use of existing innovative services and products (Tresna, and Raharja, 2018).
SWOT analysis
Strengths Opportunities
 Currently, Gain City is the largest air  The company has 10 locations in

conditioner retailer in Singapore.
 It is one of the largest number of
servicing vehicle chain enabled in
providing efficient services, home
appliances, and IT products (Basset,
Mohamed, and Smarandache, 2018).
Singapore, which include Gain City
Megastores (Gupta, Gupta, and
Gupta, 2019).
 This indicates that the company has
the opportunity to expand its
business to other nations
(Todayonline, 2020).
Weaknesses Threats
High cost of labour leads to poor quality of
workforce and insufficient investments in
needed in diversification (Gautam, Sharma,
Gautam, and Gautam, 2019).
Due to limitation in product line and special
online deals, the organisation is not able to
grow (Todayonline, 2020).
 Company suffers from threats
related to information technology
infrastructure (Phadermrod,
Crowder, and Wills, 2019).
 Company suffer from denial of
services, and drive by attack.
 There is an increase in the level of
competition from new companies.
The competition is severe due to
presence of substitute goods in
services and products in home
region (Blanco, and Cohen, 2017).
Conclusion
From the above discussion, it can be demonstrated that Gain City has appropriate strengths to
overcome the threat and weaknesses of lying in the market. The organisations has maintained
its services extension since the time it started as it served people and became most trusted

among the retailers. As an opportunity, there is a need to extend its products and services to
the regional and international markets. The organisation has to continue recording in relation
to its outstanding results and also calculate a sustainable level of growth by maintaining it in
all the sectors of business enterprises. The report carried out VRIO analysis to determine the
factors on basis of which Gain City`s growth will be determined. Pestle analysis reveals that
there is a greater support on the part of the government policies, which allow them to grow.

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