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Hartalega – producer of synthetic rubber gloves Paper

Words: 2170, Paragraphs: 173, Pages: 8

Paper type: Essay , Subject: Customer

MGM 3101: PRINCIPLES OF MANAGEMENT

ENVIRONMENTS OF HARTALEGA SDN. BHD

DR. RAJA NERINA BINTI RAJA YUSOF

GROUP MEMBERS:

? NAME ? MATRIX

NUR SYAIDA NAJWA BINTI FAUZI EX03611

IMAN FATIHA BINTI NOR AZMI EX03565

VAAGINISWARY A/ P RAJENDRAN EX03579

MELLISSA A/ P PHILIPMOSES EX03602

TA BLE O F C O NTEN T

NO CONTENT PAGE

1.0 Company Background 1

2.0 Vision, Mission and Goals 2

2.1 Core Values 3

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3.0 Board of Directors 4

4.0 Components of The General Environment

4.1 Political Factors

4.2 Economic Factors

4.3 Social Factors

4.4 Technology Factors

5.0 Components of The Task Environment

5.1 Effect of Supplier

5.2 Effect of Competitor

5.3 Effect of Distributers

5.4 Effect of Customers

6.0 Issues and Potential Solutions

7.0 Financial and Strategic SWOT Analysis

8.0 References

1 ?.0 COMPANY BACKGROUND

Hartalega is the world’s largest producer of synthetic rubber gloves, used mainly in the

healthcare industry. Besides its own brand, the company is also an original equipment

manufacturer that makes high-quality surgical and laboratory gloves.

The company was founded in 1988 by Kuan Kam Hon, who is now executive chairman. He is an

entrepreneur who built his fortune as a house builder, and later by dealing in woven labels and

badges. Annual production capacity of the company is over 13 billion gloves, which was nearly

30% of Malaysia’s exports in 2013. Its products are exported to about 40 countries. Sales in the

U.S. make up about half of the company’s revenue, followed by Europe and Asia.

Like Top Glove, its rival, which is the leader in natural rubber gloves, Hartalega was able to

grow rapidly, especially in the mid-2000s, when hospitals in developed economies such as the

U.S. and Europe began to switch from latex to nitrile gloves. Nitrile gloves cause fewer problems

with skin allergies. Ownership in Hartalega is controlled by the Kuan family, which was led by

second-generation Managing Director Kuan Mun Leong.

2.0 V IS IO N, M IS SIO N A ND G OALS

Hartalega has enjoyed many successes over the years, yet e will never be content. We aim to

push the boundaries of technology and practice a culture that is driven to deliver.

VISION

To be the Number One glove company that produces and delivers the best and most innovative

gloves in the world and to be recognised as a caring company to the community and

environment.

MISSION

To deliver the best possible protection to people who work with their hands in exposed and

challenging environments by providing consistently superior, safer, and more convenient gloves

in chosen product markets.

GOALS

To develop the capabilities of our people, and to expand our workforce with fresh talent. A key

initiative implemented is our Competency Development Programme (CDP). The various

components of the CDP enable us to equip employees with the necessary skills and knowledge.

This also subsequently allows us to create a talent pipeline of potential future leaders for the

Group.

2.1 C O RE V ALU ES

Our Core Values are embodied in the acronym, SHIELD, which stands for:

These values represent the qualities that Hartalega incorporates in all that we do, in order to

propel the Group forward and enable us to realise our Vision and Mission to deliver the best

possible protection via our high quality gloves.

3.0 B O ARD O F D IR EC TO RS

Mr. Kuan Kam Hon

Executive Chairman

Mr. Kuan Mun Leong

Managing Director Mr. Kuan Mun Keng

Executive Directors Dr. Danaraj A/L Nadarajah

Executive Directors

4.0 C O M PO NEN TS O F T H E G EN ER A L E N VIR O NM EN T

4.1 P olit ic a l F acto rs ( p art i m an )

4.2 E co n om ic s F acto rs ( p art i m an )

4.3 S ocia l F acto rs

Hartalega ’s groundbreaking achievements are a result of their seamless production systems, and

uncompromising efficiency. They cultivate a culture of correct practice, resourcefulness and

drive to be the best attributes which have supported the company throughout its growth to

become the world’s largest supplier of Nitrile gloves.

The leaders and innovators guiding Hartalega through its many successes, are renowned for

turning challenges into opportunities, and have demonstrated this with their stand out decision

making from day one. The inspiring decision to engineer production lines in house rather than

import unreliable ones from overseas, was the first of many brave business moves made by

founder Mr Kuan Kam Hon, and sets the precedent for today’s global success.

The ingenuity and resourcefulness demonstrated by Mr Kuan, and actioned by his team of

specialist engineers formed a benchmark in Hartalega ’s history, and signified the beginning of

an era where all key production systems and technologies were developed in house. In this way,

Hartalega improved efficiency and surpassed industry standard.

This philosophy of innovative excellence is steeped into the culture of hartalega today and drives

them to push the boundaries of invention and technology in order to produce the best clinical

gloves in the world.

As consumer demand increase and market trends evolve, Hartalega will endeavour to adapt,

grow and deliver excellence in order to sustain their pole position at the head of the industry.

4.4 T ech nolo gy F acto rs

The Next Generation Integrated Glove Manufacturing Complex (NGC) project was accorded the

Entry Point Project (EPP), as part of the Government Economic Transformation Program (ETP)

due to its high economic impact. NGC will contribute significantly to the transformation of the

glove industry in Malaysia from one that is regarded as low-tech and foreign labour intensive, to

one that is acclaimed to as high-tech and innovation driven with large number of skilled

workforce. Hartalega company use the following technologies:

7 High-Tech Production plants

? High level automation with implementation of industry 4.0

? Fastest production lines in the world running at 45,000 pcs/hr

Centre of Excellence (R&D)

? Advanced R&D facilities

? Employment of scientists to carry out research and development

Renewable Energy

? Environmentally friendly clean energy technology

? State of the art technology in fuel management system and also highest standard in

population control

At the core of Hartalega ’s expansion, is passion for product innovation and engineering

technologies. The new innovation model concentrates on science-based R&D and proprietary

engineering technologies that will generate patents and tacit company know-how. This new

generation of science-based R&D will create opportunities for new sources of market growth.

5.0 C O M PO NEN TS O F T H E T A SK E N V IR O NM EN T

5.1 E ffe ct o f S upplie r

Establishing the value or the contribution made by the supplier in meeting for buying firm’s

needs. It can also relate to the determination of the supplier’s worth in Hartelega’s supply base

structure. In order to effectively, the evaluation of supplier performance due to price, quality and

delivery.

The relationships that includes such as qualitative factors and high trust levels. Buyers captive

arises when the buyer has one source to buy from such as when there is only one supplier or

manufacturer of product. So, both firm’s to reduce cost and share profits.

5.2 E ffe ct o f C om petit o r

A competitiveness is increase the demand for control and coordination within an organization.

The competitor for an organization interacts with production technology, the number of products

and the extent of product design. They generate understanding about the past, present and future

strategies.

How to monitor the way competitors do business:

1. The products and services they provide and how they market them to customers.

2. The prices they charge.

3. How they distribute and deliver.

4. The devices they employ to enhance customer loyalty and what back- up service they

offer.

5. Their brands and design values.

5.3 E ffe ct o f D is tr ib u to rs

Distributors are sell the products and acquire and assimilate new knowledge to improve their

services and consequently, the sales of manufactured products. Distributers tend to focus on

organization which supports them well. They also support, reduce costs and optimize processes,

as well as manage inventories which creates value for manufacturers and customer alike.

The distributor is most often the relationship manager in term of aftercare, troubleshooting and

dispute resolution. This emphasizes why a distributor needs to service it’s customer well if it

wants to maintain a healthy consumer demand.

5.4 E ffe ct o f C usto m ers

Customers are helping Hartalega Sdn Bhd by meet its goals and they maintain close contact with

them. They can get close to customers by conducting marketing research and other feedback

methods that encourage customers to share their thoughts and feelings.

Customers reaction to the design of a product may influence the type of raw materials used in the

product. Finally, customers are the reason an organization is in business. Customers are not only

key to revenue and profits, they are also key to creating and maintaining jobs within the

organization.

6.0 ISSUE AND POTENTIAL SOLUTION

Introduction Hartalega Holdings Berhad is a gloves manufacturer and began their business with

the vision of produce gloves that protect life (Hartalega 2013). Hartalega has experienced

tremendous growth in the market and there are many issues and problems that faced by them.

The first issue that faced by Hartalega is issue about labor. The recent governments policies

about foreign labor have cause a great concern for the gloes industry. The gloves industry has

voice out their concerns towards the issue because hired labor would have an impact on the

manufacturer’s costs. Besides, more and more glove manufacturers are using automation and it

will decrease the reliance on manpower.

Next, pollution is one of the most important issues that faced by Hartalega as their company’s

reputation has affected by the negative news or rumors. Hartalega was received complaints from

the Deputy Minister in the Prime Minister’s Dept and a few residents of Taman Suria and claim

that they are causing air and water pollution. Hartalega deny all the accusation and declare that

they are operating legally according to the Malaysian environment regulatory standard. This

might affect the reputation and the creditworthiness of Hartalega and might cause the market

share decrease in this particular time frame.

Furthermore, the economic have influence glove industry will continue to be unstable due to

rises in material and production costs. Moreover, high latex price also is one of the issue that

faced by Hartalega. Latex prices continue to be volatile would bring an effect to its margin.

Supply of latex may be reduced due to the weather conditions. During the dry season in Thailand

and Malaysia, it would decrease production latex. Thus, price of latex during dry season will be

slightly higher compare to other season.

Besides that, issue that faced by Hartalega is fluctuation of US dollar. USA is a key market for

glove industry and has contributing part of the market share of Malaysian industries. Fluctuation

on US dollar has affected the margins of the company.

Potential Solutions

Remote environment is that factors affect a form of decision making abilities, but are beyond its

control. Political, economic, sosial, technological and ecological factor are the factors that

include in the remote environment. The first factor is political factor. Hartalega has exports

almost all of their products mainly to the developed countries such as USA, Brazil, Japan,

Germany, Europe, Malaysia and others. Hartalega also has expanded its business successfully to

China and India. Gloves sales have increase but a little drop in the selling prices. Major output of

the company is made up by nitrile gloves.

The total costs of the gloves increases due to the high output and increase in labor costs. Besides,

the recent governments policies about foreign labor have cause a great concern for the industry.

Hartalega have to adjust the wage structure of their workers due to the minimum wage ruling that

regulate by the government. Stringent government regulatory also is the threat for Hartalega.

There are many government regulations and policies need to be follow by the company such as

minimum wage legislation, guidelines on buffer zones and more.

If the companies fail to follow or break the rule that enforce by government , it may bring them

into trouble, such as they might receive penalty from the government. Next is economic factor.

Fluctuation of US dollar, raw materials prices increase and fuel costs rising has bring an impact

towards the gloves industry with challenging economic conditions. Fluctuation on US dollar has

affected the margins of the company. The nitrile gloves have experienced declining its margins

due to high raw materials price and face competition with their competitors.

Furthermore,

8.0 R EFE R EN CES

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About the author

This paper example is written by Benjamin, a student from St. Ambrose University with a major in Management. All the content of this paper consists of his personal thoughts on Hartalega – producer of synthetic rubber gloves and his way of presenting arguments and should be used only as a possible source of ideas and arguments.

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