Hup Seng Company Case Analysis

Topics: Economics

What competitive advantages this company has? Hup Seng has a pretty simple business model with simple products. It has 3 subsidiaries one which is a biscuit confectionery, the other is to distribute and sells and the one it acquires, Incomix. It is not a great business and some of its product F&B business industry against the likes of Kraft and Nestle. Hup Seng ’s competitive advantage is its relatively lower price or maybe some customers who prefer its taste better than the other.

SWOT Analysis Strengths 1. Currently in a good financial position (few debts, etc) 2.

Skilled workforce (little training required) 3. Company name recognized on a National/Regional/Local level 4. Own premises (no additional costs for renting)| Weakness 1. Less customer 2. Too much waste 3. Low customer retention 4. Low production quality compared to other brands. 5. Low integrity of annual report| Opportunities 1. Skilled workforce means that they can be moved and trained into other areas of the business 2. Competitor going bankrupt (Takeover opportunity) 3. Moving a product into a new market sector| Threats 1.

Large and increasing competition 2.

Increase in tax 3. Rising cost of Wages (Basic wage, etc) 4. Possible relocation costs due to poor location currently held 5. Local authority refusing plans for future building expansion 6. New distribution channel| How the financial Performances & Profitability trends are appear? Picture shown above is the financial highlights of 5 years analysis of Hup Seng Industries Bhd. * From the perspective of turnover of the company is stable during year 2006-2007 shows that the product produces by the company is sold very quickly in the 5 years operation.

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It also shows that company is efficient in selling their products. * Profit after tax means the net profit receive by the company is surprisingly increase from year 2006-2009 but then have slightly decrease. The increase of net profit showed that company have expand their product from time to time according to customer’s taste and lead to increase in sales * Net earnings per share of the company also increase surprisingly from year 2006-2009 but then also decrease a bit at year 2010.

This is because when the sales of the company increase it leads to greater profit of company. Lots of profit gives effect to the retained profit of the company that is used to pay for the shareholders. 12. Can it sustain its profitability and competitiveness, in this export business in the long run? No, company cannot sustain its profitability and competitiveness in the long run in this export business because there’s a lot of competitors nowadays who export their products which is in the same industries that is consumer products.

To be more specific, company which selling biscuits too. Their profit might fluctuate from time to time if they do not maintain their relationship with customers and their supplier. Understand customer’s needs are very crucial in business. 13. Make appropriate recommendations on how to: (International market) There are 3 elements to sustain or enhance its long term survival Consulting – Company needs to get consultant to manage the daily operation so that everything going smooth and activities perform by the company will generate more income.

Technology – Import technology from outside in order to increase the efficient production of the company. Outsourcing – Outsourcing is the act of one company contracting with another company to provide services that might otherwise be performed by in-house employees. Often the tasks that are outsourced could be performed by the company itself, but in many cases there are financial advantages that come from outsourcing. By outsourcing some products in this case, company can give attention on producing new products without worrying about the product that they outsourced.

Now with the advent of information systems and technology, competitive information gathering in deed can to some large extent make a difference to a Hup Seng Industries Bhd position in an industry and for that matter affect its competitive advantage one way or the other. This company can either use their own database or informational gathering software to track its operations and get the required information like inventory, customers, and trends of competitors’ performance and about the fast moving products.

If a firm can keep or maintain its lead on creating value, leveraging strategic assets for example access to efficient distribution channels, maintain market position and may be low cost advantage then it can be said to have a sustainable competitive advantage. This is absolutely not possible in this dynamic business world. From innovation center, part of that commitment to innovation involves embracing new and disruptive ideas. Another important aspect is leveraging open innovation and open sourcing methods that bring together suppliers, partners, employees and management.

Companies that effectively commercialize innovation also develop more risk tolerance when scanning for opportunities outside their immediate business environment. They become more willing to cannibalize products and services when investigating new growth platforms. They become more adept at the operational requirements of their winning concepts, leveraging current partners, networks, assets and distinctive capabilities to help drive growth through innovation

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Hup Seng Company Case Analysis
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