School of Management University Sains Malaysia ACADEMIC SESSION 2014/2015

SCHOOL OF MANAGEMENT
UNIVERSITY SAINS MALAYSIA

ACADEMIC SESSION 2014/2015
SEMESTER II
COURSE NAME
: Strategic Management
COURSE CODE
: ATW 393E/4
YEAR OF STUDY
:3
PREPARED FOR
LECTURER: Dr. Hasliza Abdul Halim

PREPARED BY:
Group 4C
Group Assignment
: KOSSAN
NAME
Gan Lay Ying
MATRIC.NO
115204
IC.NUMBER
920912-07-5454
Koo Yaw Loong
115229
920904-08-5505
Lim Gaik Xian
115246
921013-08-5696
Tan Yik Min
115361
921231-08-6144
ATW 393 E/4 Strategic Management
Acknowledgement
First of all, we would like to express our deepest appreciation to our respected
Strategic Management lecturer, Dr. Hasliza Abdul Halim for providing us valuable
information and experience views in completing this assignment. She inspired us
greatly to work in this project. Dr. Hasliza is always ready and willing to assists us in
handing all sorts of problems we are facing in this project. With assisted and guided
from Dr. Hasliza, we are able to complete this project successfully and submit on time.
Continuously, we would like to grab this opportunity to express our great
appreciation to University Sains Malaysia for provide us with a good environment
and facilities such as speedy wifi and computer available in library for us to complete
this project.
Lastly, we are great that we have a chance to involve in this project because
through this project we had learned different method to deal with problem that we
face in this project. In addition, we also appreciate the cooperation of the group
members throughout this project and all of us have given our best and show our high
commitment in completing this project on time.
Page 2
TABLE OF CONTENT
No.
1.
2.
Title
Acknowledgement
Table of Content
Pages
2
3
Chapter 1
3.
4.
5.
6.
1.0
1.1
1.2
2.0
7.
8.
2.4
2.5
9.
3.0
10.
3.4
11.
4.0
12.
13.
14.
15.
16.
4.5
Company Background
Vision Statement of Kossan
Current Vision Statement of Kossan
Discussion on Vision Statement of Kossan
Formulate New Vision Statement
Mission Statement of Kossan
Current Mission Statement of Kossan
Discussion on Mission Statement of Kossan
Formulate New Vision Statement
Chapter 2
Kossans SWOT Analysis External Analysis
2.1 Opportunities
2.2 Threat
2.3 Kossans Opportunity and Threats (Company Profile
Matrix)
Kossans Competitive Profile Matrix (CPM)
Kossans Strategic Group Map
Chapter 3
Kossans SWOT Analysis- Internal Analysis
3.1 Strengths
3.2 Weaknesses
3.3 Kossans Strengths and Weaknesses (Company Profile
Matrix)
Weighted Competitive Strength Assessment
Chapter 4
Kossans Financial Ratio Analysis
4.1 Part 1: Profitability Ratio
4.2 Part 2: Liquidity Ratio
4.3 Part 3: Leverage Ratio
4.4 Part 4: Market Analysis Ratio
Comparison of Financial Performance in the Malaysian

Rubber Glove Industry
Chapter 5
5.0 Formulate Strategies
5.1 SWOT Matrix
5.2 SPACE Matrix
5.3 Boston Consulting Group (BCG) Matrix
Chapter 6
References
Appendix
Soft Copy
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7-8
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9-11
11-13
13-14
15-17
18
19-20
20-21
22-23
23-25
26-29
30-33
33-35
36-37
38-42
43-46
47-49
50-52
53-55
56
Page 3
Chapter 1
Company Background & Formulate Vision and Mission Statement of Kossan
1.0
Company Background
Kossan Rubber Industries Bhd had emerged as one of the worlds largest
manufacturers for industrial rubber products and disposable latex gloves nowadays.
Kossan Rubber Industries Bhd was established in year 1979, headquartered is located
in Wisma Kossan in Klang. Besides, Kossan was one of the companies in Malaysia to
venture into glove manufacturing and Kossan had introduced the first glove
production line on August in year 1988.
Kossan is currently under management of Dato Haji Mokhtar Bin Haji Samad
(Chairman) and the current Chief Executive Officer is Dato Lim Kuang Sia a
Malaysia aged 62 was appointed as CEO of Kossan on 22 February 2002 and Mr. Lim
Kuang Yong was appointed as executive director which currently oversee the Gloves
Division.
Moreover, Kossan had joined the Main Board of Bursa Malaysia in year 1996
and had classified as one of the fastest growing companies in Malaysia. Kossans
possessed strong reputation of high quality product had made Kossan extends its
business networks to more than 160 countries around the world. In other words,
Kossan products mainly distributed in countries such as United Stated of America,
United Kingdom, Japan, Korea, Europe, China, Middle East, Scandinavian countries,
Australia, Canada, Asia Pacific and Latin America.
Besides, Kossan had continuously improved its company business process and
enhance its business strategic with a group of employees and good management teams
to ensure that they able continuously deliver good value to its entire shareholder. With
all of these afford, Kossan had achieved numerous key awards including Malaysia
Investors Relations Award in year 2011 and SME Recognition Award in year 2010.
In the same year, Kossan was also awarded The Edge Billion Ringgit Club for the
highest Return on Equity over three years in the industrial products. Lastly, Kossan
had be recognized as Asia Pacifics most reputable companies and gained award in 9th
Asia Pacific International Honesty Enterprise Keris Award 2010.
In a nutshell, in year 2014, Kossan is ranked at 50th in the most valuable
Malaysia brands.
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1.1
Vision Statement of Kossan
a.
Current Vision Statement of Kossan

Vision statement defined as a set of ideas of organization aimed to achieved
and accomplished in the future. Basically, a vision statement prioritizes the current
status of the organization and point the direction of where the organization wishes to
go. Therefore, it set as a long term statement and a well- conceived vision statement
able inspire employees and motive them so that they commit themselves to
accomplish the organization goals.
The corporate vision statement of Kossan is to be the world class market in

rubber products driven by technological advancement, people value and continual
improvement to deliver long term and sustainable growth. The vision of Kossan
reflect that Kossan dedicated to provide an professional and excellent services of
technical rubber products and glove products to valued customer with good quality
assurance of product and timely delivery to ensure that all valued customer are
satisfied with Kossans products and services presented.
b.
Discussion on Vision Statement of Kossan

In our opinion, there are several effective elements that Kossans vision
possessed which are directional, focused, desirable and easy to communicate. First of
all, the vision statement of Kossan is directional because Kossans vision statement is
forward looking. We can understand that the direction of Kossan aimed to provide the
high quality medical gloves through anticipate the needs of the medical healthcare
community and continuously make improvement in every aspect of products and
service so that Kossan can gain integrity from valued customer in order to recognized
as a trusted company by valued customer. Therefore, we can understand that Kossan
keep on moving themselves toward world class market leader by continuously invest
in improvement programs such as cost reduction, product quality improvement,
develop unique products in order to enhance its company internal strength. For
example, Kossan had implemented automation such as Automation Stripping of
Gloves, Packaging Automation for Sterile Gloves and upgrading the R&D facilities
such as used High-Performance Liquid Chromatography (HPLC) test and Fourier
Transform Infrared Spectrophotometer (FTIR) test on their production lines to ensure
Page 5
high productivity and consistency quality of glove product with lower reject rate by
optimizing the input resource to meet the current and future trends of healthcare
community.
Besides, in the vision statement of Kossan, we can grasp that Kossan is much
focused. This can be further explained that Kossan is strive to providing diverse glove
products in various field such as home care, medical examination, emergency,
chemotherapy, surgical procedure, dental care, diagnostic& laboratory and industry
glove strive to meet the needs of healthcare community. Therefore, we can understand
that Kossan had clearly classified its glove product where the classification of the
glove product is specific enough for manager as a guideline in making decision and
allocate the company resources. A good classification of the healthcare and medical
gloves enables Kossan manager makes decision and allocates the resource well in
order to optimizing the production of glove.
Moreover, Kossan current vision is desirable which indicates that the
directional path makes good business sense. We can understand that Kossan is always
concern the products solution in order to continuously deliver good medical gloves to
safeguard its users and Kossan also always concern the benefits of every party and
consistently enrich its shareholder. This enables Kossan continuously build strong
relationships with its customer, employees, shareholder and business partner.
Last but not least, the current vision of Kossan is easy to communicate
because it clearly states the intention and the goal of the company to be achieved in
the future. In other words, we can understand that Kossan wanted to be the leader in
the glove industry and based on the vision statement Kossan have successfully
presented its companys vision to the decision makers and employees which all of the
employees of Kossan hold the mutual goals to assists Kossan achieved the vision
company goals. In brief, a distinct vision statement can bring all of the employees
focus and accomplished the organizational goals.
Below is the new vision statement that we formulate:
To become preeminent player in rubber glove industry that bring
customer to the highest degree satisfaction for every aspect in order to maintain
long term sustainability growth.
Page 6
1.2
Mission Statement of Kossan
a.
Current Mission Statement of Kossan

A mission is a written declaration of a companys core purpose and usually
remains the same over time. The mission should lead the decisions and actions of the
company where it stated the overall goal of the company. The mission also describes
the companys present business scope and purpose which are who we are, what we
do and why we are here.
The current Kossans mission statement is:
i.
Keeping a healthy growth through teamwork
ii.
Opting to be competitive through the provision of good services and quality

innovative products
iii.
Striving towards our own vision with full commitment and dedication
iv.
Stepping up the welfare, competency and professionalism of our employees
v.
Aspiring creativity and innovation in our entire business process
vi.
Navigating towards a sustainable low carbon footprint environment
b.
Discussion on Mission Statement of Kossan

In our opinion, the mission statement of Kossan is specific because the
mission statement able to convey who we are, what we do and why we are here.
Kossans mission statement is able convey the meaning of who we are which
Kossan is a rubber glove manufacturer that produce rubber or medical gloves to the
customer and distribute its rubber glove products to 160 countries around the world.
Furthermore, Opting to be competitive through provision of good services
and quality innovative products and Aspiring creativity and innovation on our
entire business process had convey the meaning of what Kossan do. Moreover,
Striving towards our vision with full commitment and dedication and Navigating
towards a sustainable low carbon footprint environment indicated that Kossan
dedicated to provide a superior quality of rubber glove to its customer and reduce
environment effect through effort of all of the employees in Kossan.
Last but not least, the mission of Kossan Keeping a healthy growth through
teamwork is directional and these statements provide direction to managers, decision
Page 7
makers in order to archived long term success in rubber glove industry. On overall,
we can conclude that the mission of Kossan is able to convey who are we, what we
do and why we are here.
However, there is one shortcoming on the mission statement of Kossan which
is the mission mostly focus on the shareholders value and employees value. This
indicated that Kossan should highlight on the customers value in future.
Below are the new mission statements that we formulated:
K- Keeping a healthy growth through team work
O- Opting to maximize customer value and employee welfare
S- Shaping an environmental friendly rubber product industry
S- Striving to be leader in rubber industry in the world
A- Aspiring to develop more creative and high technology products
N- Navigating towards Malaysia's vision 2020
In overall, Kossan is trying their best in deliver the best services and rubber
glove products to its valued customer where they implement the best technologies to
ensure the high quality rubber gloves.
Page 8
Chapter 2
Kossans SWOT Analysis (External Analysis); Kossans Company Profile
Matrix; Competitive Profile Matrix and Strategic Group Map
2.0
Kossans Opportunities and Threats (External Analysis)

SWOT analysis is a strategic planning tool and useful technique that examines
the strengths, weaknesses, opportunities and threats that affecting the business
operation. The SWOT analysis assists company evaluates issues within and outside of
the company and provides an outline for strategic decision making. Strength and
weaknesses are considered as internal factors to a company while opportunities and
threats as external factors.
External analysis comprises opportunity and threats which considered as
external environment to the company. Thus, opportunity is the external characteristics
which company can use it to achieve successful and gain competitive advantages
while threats are the external factors which may be potential source of failure to the
company.
2.1
Kossans Opportunity
Opportunities are beneficial situations in the external environment and arise of

opportunity enables business gain competitive advantages by making use of
opportunities.
i.
World demand for rubber gloves is growing

Nowadays, the world demand for rubber gloves is growing in every corner
around the world. Based on the Global Rubber Gloves Market Report 2014 edition,
we notice that the demand for rubber gloves around the worlds is increase
continuously. The key factors that driving the growth of the global rubber gloves
includes rising the number of ageing population, rise in hygiene standards, improved
healthcare awareness, improvement in global economic growth and increasing
potential of emerging markets. For instance, according to the Malaysian Rubber
Glove Manufacturers Association (MARGMA) expected that global demand for
rubber gloves at healthy industry will continue to grow at the rate of 8% to 10% per
annum. This indicates that Malaysia faces healthy increase in rubber gloves demand
for following year which providing a growing opportunity for Kossan company.
Page 9
ii.
Expand production capacity in Malaysia and emerging market.

Currently, Malaysia is one of the largest supplier of rubber products especially
gloves to 120 countries around the world. Due to the resilient global demand for
rubber gloves, glove manufacturers have responded by boost up capacity expansion as
well as improve product mix to remain competitive. In year 2014, the production
capacity of gloves was approximately 20 billion pieces where the actual gloves
production is 16 billion pieces and this indicates that demand is outstrip supply.
However, the volume of gloves will grow to 29 billion pieces in 2016 and 32 billion
pieces in year 2017 and the growing volume of gloves provides an opportunity for
Kossan to expand its production capacity. For instance, Kossan expects to double its
gloves production capacity to 32 billion pieces in year 2017 to meet the rising demand
and the
production expansion is also expected to sustaining Kossan earning growth
by 20% to 25% for next three years. In addition, Kossan aims that Vietnam as another
country for its expansion plan because Vietnam is one of the emerging rubber
producers in the world. Moreover, the reasons of Kossan choose Vietnam is due to the
availability of tax incentives and lower labor costs in the country.
iii.
Landbank expansion
Currently, Kossan had completed two land acquisitions in year 2013 which
comprising 9.3 acres in Kapar and 56 acres in Batang Berjuntai. This land banking is
a long term plan for Kossans expansion strategy especially for the plans of adds
another new plant in the future. This indicates that Landbank expansion provides an
opportunity to Kossan to boost up its production capacity. In brief, Kossan is planning
to build up 8 new plants in order to achieve its targeted production capacity of 32
billion pieces of gloves in year 2017.
iv.
Decrease in prices of Latex

As we know Malaysia remains the largest supplier of rubber gloves with an
estimated global market share of 62% and we know that supplier always seek for
cheaper raw material for the purpose of reduce the production costs of gloves. In
related to this, decreasing the prices of raw material such as latex provides an
opportunity for Kossan to boost up its sales value by offered the cheaper selling prices
due to the lower raw material costs and its helps Kossan reduce production costs as
well. According to Malaysia Rubber Board, the natural rubber latex price had dropped
from RM 8.89/kg in year 2011 to RM 4.60/kg in year 2015. This indicates that
Page 10
Kossan potentially achieved the greater sales value in following year (2015) as the
lower raw material costs enables Kossan offer cheaper selling prices of gloves where
cheaper selling prices of glove able attract more buyers which directly helps boost up
the revenues of Kossans glove division.
2.2
Kossans Threats
Threats are unbeneficial situations in the external environment and arise of threats
able jeopardize the reliability and profitability of the organizations business.
i.
Strong completion in rubber glove industry

Strong competition in rubber glove industry is one of the threats for Kossan
Company. Malaysia is the largest exporter and producer of rubber gloves in the world
which is supplying 60.65% of the global requirements to rubber gloves. There is
strong competition between Kossan and other rubber glove industry in Malaysia such
as Latexx, Supermaxx, Hartalega and Top glove to differentiate own company in
terms of good bargaining power, branding and high value product. Top glove become
giant supplier with more bargaining power through gaining the highest market share
which is 27% among rubber glove industry in Malaysia and is planning to step up its
capacity to 43.1bn pieces in 2014. Supermax is the largest Original Brand
Manufacturer (OBM) rubber glove maker in Malaysia with 68% of its revenue
coming from its own brand. More and more glove maker shift toward premium
segment which includes powder frees nitrile gloves and nitrile gloves. Hartalega is the
world's largest nitrile glove producer which enjoys the highest profit margin among
its peers. There is also strong competition between Kossan and other rubber glove
industry in foreign country such as Thailand and Indonesia. This is because Thailand
and Indonesia offer cheaper labor cost and abundance of latex to produce rubber
glove compare to Malaysia. Thus, Kossan should produce high quality of rubber
glove to be competitive advantage among competitors.
ii.
Government policy factor

Government policy factor is another threat for Kossan Company.
Implementation minimum wage policy by government on July 2013 and increase in
electricity tariff by 17% effective January 2014 increase production cost of rubber
glove industry. There is another expected worst factor for Kossan which is 20%
Page 11
increase in natural gas price in May 2014. Kossan face high pressure arising from
escalating production cost which give them a tough operating environment. This is
because rising production cost indirectly lead them face pricing pressure in this rubber
glove industry and will affect their operating profit. Thus, Kossan have to put much
effort on conduct some improvement program to minimize production cost and
improve quality of their rubber glove product.
iii.
High bargaining power of buyers

High bargaining power of buyers is the main threat for Kossan. Kossan are
predominantly original equipment manufacturers (OEM) with 95% in rubber glove

industry Malaysia who mainly sell their products to multinational healthcare
corporates (MNCs) such as Ansell, Kimberly Clark, Cardinal Health, Medline and
Microflex. All of these international brands have been establish a very strong foothold
in global healthcare market. This situation making Kossan face difficulties to build
their own brands, especially in some established western countries. High dependence
on MNCs eventually increases buyer bargaining power. Brand owners easily to switch
their orders for rubber glove from manufacturer to manufacturer or from one country
to another country especially on the period that capacity surplus is rising.
iv.
Pricing competition
Pricing competition is a threat for Kossan too. All glove makers in rubber
glove industry are boosting up their supply and want to produce more balance product
mix to take advantage from the rising demand for nitrile glove on the global. This
situation will lead to oversupply of rubber glove and potentially trigger a price war.
Thus, glove makers should halt certain production line and regulate their production
output to avoid oversupplying that cause price war.
v.
Foreign exchange rate risk

Foreign exchange rate risk is also the main threat for Kossan Company.
Currency fluctuation is a domestic issue and totally outside the control of exporter.
Currency fluctuations could hamper the growth of rubber gloves. A stronger RM
against US dollar is negative for the glove manufacturer given that more than 90% of
their revenues are from export businesses and their products are denominated in US$.
Therefore, Kossan Company is more emphasized more on export business thus
stronger ringgit against U.S. dollar will eventually hurt their business profit. Thus,
Page 12
Kossan can mitigate the risk of currency fluctuation through forward contract which is
fix exchange rate against fluctuation.
2.3
Kossans Opportunities and Threats (Company Profile Matrix)

Opportunities
1 World demand for rubber gloves is growing

2 Expand production capacity in Malaysia and
emerging market
3 Landbank expansion
4 Decrease in price of Latex
5
6
7
8
9
Threats
Strong Competition
Government Policy Factor
High Bargaining power of Buyers
Price Competition
Currency Malaysia Fluctuation
Total
Table 1: Kossans Company Profile Matrix
Weight
Score
0.20
0.10
Kossan
Rating
Total
Score
4
0.80
3
0.30
0.10
0.10
3
4
0.30
0.40
0.20
0.05
0.10
0.10
0.05
1
2
1
2
2
1
0.40
0.05
0.20
0.30
0.05
2.80
Rating score: 4 - Major Strength; 3 - Minor Strength; 2 - Major Weakness; 1 - Minor

Weakness
Justification:
In overall, Kossan obtain the total score of 2.80. According to the table above,
we can know that world demand for rubber gloves is growing achieved the second
highest weight score which is 0.20 from the overall weight scores. This indicates that
the growth demand of rubber gloves provides an opportunity for Kossan to achieved
consistent growth in revenue and earnings in future which its rate as major strength.
Moreover, expand production capacity in Malaysia and emerging market, Landbank
expansion and decrease in price of Latex gained the weight score 0.10 respectively.
This is because Kossan aimed to meet the rising demand of gloves which is supply
meet with the demand of global needs, thus capacity expansion and Landbank
expansion also consider as important factor for Kossan and its is minor strength got
Kossan. Besides, decrease in prices of Latex achieved the weight score of 0.10 and
rate as minor strength for Kossan. This is because decrease in prices of Latex will
lower the raw material costs of Kossan and reduce the production costs.
Page 13
On the other hand, from the table above, strong competition is the highest
weight score which is 0.20 and following by high bargaining power of buyers and
price competition which is 0.10 and then the lowest weigh score are government
policy factor currency Malaysia fluctuation which is 0.05. Strong competition, high
bargaining power of buyer and price competition also rate as major strength. This is
because Kossan has many rubber glove industrys competitors in and outside country
to compete gaining market share to become top leader in this industry. High
bargaining power of buyers lead to buyer easily switches to competitors. Price
competition leads to oversupply of rubber glove. Government policy factor and
currency Malaysia fluctuation are minor weaknesses for Kossan. Government
implement minimum wage policy has increasing production cost of rubber glove.
Kossan try to minimize this problem by conduct some improvement program for cost
reduction on products. Currency Malaysia fluctuation leads to unstable exchange rate
that will affect Kossans business profit.
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2.4
Kossans Competitive Profile Matrix (CPM)
Critical Success Factors
Weight
Score
Kossan
Top Glove
Supermaxx
Rating Total Rating Total Rating Total

score
Score
Score
1. Quality/product/performance
0.20
1.60
1.80
1.60
2. Reputation and Image
0.10
0.80
0.90
0.80
3. Global expansion
0.15
1.35
1.35
1.20
4. New product innovation
0.15
1.05
1.20
0.90
5. Technological skills
0.15
1.20
1.35
1.20
6. Financial Performance
0.15
1.20
1.20
1.20
7. Global Distribution Network
0.10
0.80
0.90
0.70
capability
Total
8.00
8.70
7.60
Table 2: Kossans Competitive Profile Matrix

1 Very weak 10 Very strong
Justification:
1.
Quality/ product/performance
Quality/product/performance has the highest weigh score which is 0.20 shows
that this is an important critical success factor. Top Glove scored 9 whereas Kossan
and Supermaxx scored 8. Top Glove gets the highest rating score because it placed a
lot of emphasis R&D to produce a wide and diversified range of high quality products
and is the largest rubber glove manufacturer. Kossan and Suppermaxx score 8
because have less product line and production capacity compare with Top Glove.
2.
Reputation and Image

Reputation and image had the weigh score of 0.10. Top Glove scored highest
which is 9 compare to Kossan and Supermaxx which is rated as 8. Top Glove is world
class leader and biggest market share in rubber glove industry so its reputation and
image must be high. Kossan and Supermaxx also has a good reputation and image
because both of this company also ranked as top four in rubber glove industry
Malaysia which can deliver quality products for customer.
Page 15
3.
Global Expansion
Global expansion had the weigh score of 0.15. Top Glove and Kossan scored
highest which are 9 whereas Supermaxx scored 8. Top Glove is exporting to 195
countries and produces 40.3 billion pair of glove annually which is located at
Malaysia, Thailand, and China. Kossan is exporting to 160 countries and producing a
stunning 3.9 billion pieces of gloves per annum. Both of these companies have strong
global expansion. On the other hand, Supermax currently exports to over 145
countries worldwide in the regions of America, has six own distribution centre United
States of America, Brazil, Europe, Australia and Canada. Supermaxx focus more on
export instead of expansion in foreign country.
4.
New product innovation capability

New product innovation capability had the weigh score of 0.15. Top Glove
scored the highest which is 8, followed by Kossan scored 7 and the lowest is
Supermaxx which is 6. Top Glove has invested substantially in machineries to ensure
that they can fully adopt the latest manufacturing techniques to produce good quality
of new products. Kossan carried out R&D and use high technology to innovate new
product such as invention of the industrys lightest weight NBR powder free glove (3
gram). Supermax continues its efforts on niche marketing and creates brand
differentiation through product innovation. Top Glove still is the best in product
innovation because Top Glove is largest manufacturer in the world and invested
heavily on technology on new product innovation.
5.
Technological Skill
The technological skill is weighted as 0.15. Top Glove is ranked as 9 in this
aspect while Kossan and Supermaxx are ranked as 8. This is because overall three of
the company has continuous improvement on the technology to improve the quality of
their products. Besides that, they have put efforts in implementing automation
technology to their production line to increase the efficiency.
6.
Financial Performance
Moreover, the financial performance is weighted 0.15 and three of the
companies are ranked as 8. According to the financial ratio that we have calculated,
Top Glove and Kossan still need to improve their management in liquidity of the
Page 16
company because their ratio are extremely higher than other company while the
earning per share of Supermaxx is dropped year by year.
7.
Global Distribution Network

Global distribution network is weighted as 0.1 and Kossan, Top Gloves and
Supermaxx ranked as 8, 9 and 7 respectively. Kossan products are exported to more

than 160 countries worldwide; Top Glove products are exported to more than 195
countries worldwide; while Supermaxx products are exported to more than 145
countries worldwide. These three companies are putting efforts in exploring the new
market.
Page 17
2.5
Kossans Strategic Group Map
High
Top Glove
Kossan
Distribution
Coverage
Latexx
Supermax
Hartalega
YTY
Brightway
High
Low
Competitive Pricing
Two key factors: (i) Distribution Coverage (ii) Competitive Pricing

Company Name
1.
2.
3.
4.
5.
6.
7.
Top Glove
Hartalega
Kossan
Latexx
YTY Group
Brightway
Supermaxx Manufacturing
Total
Revenue in year 2013

(RM in Billion)
RM 2,313,234,000
RM 1,032,035,687
RM 1,307,292,000
RM 427,387,154
RM 523,391,000
RM 193,219,100
RM 1,048,150,699
RM 6,844,709,640
Market Share (%)

33.80
15.08
19.10
6.24
7.65
2.82
15.31
100
*Assume that the revenue of the seven companies made up the overall revenue (100%)
of the industry in year 2013.
**All of the revenues mentioned above are quoted from respective companys annual
report 2013.
Page 18
Chapter 3:
Kossans SWOT Analysis (Internal Analysis), Kossan Company Profile Matrix
(CPM) and Weighted Competitive Strength Assessment
3.0
Kossans Strength and Weaknesses (Internal Analysis)

An internal analysis is a review of an organizations strength and weaknesses.
A specific and detailed internal analysis allowed company have a good sense on its
basic competencies. Identify a companys strengths and weaknesses are important for
achieving goals which to help meet the requirements of potential customers and also
accomplish the organizations objectives.
3.1
Kossans Strength
Strengths are the beneficial aspects of the organization or the internal capabilities of
an organization that enables business to accomplish the organizations mission. Thus,
identify the characteristics and analyzing the strengths of a business is important
because these are the basis of pursue continued success in competitive business
environment.
i.
Profit Margin increase year by year

Based on the financial data that we have calculated we found that profit
margin of Kossan is increasing year by year. This is a very good strength of Kossan
because it is a good sign of improvement for Kossan. Profit margin is the differences
between net revenue and total expenses. Therefore, when profit margin increased, it
shows that either increasing of net revenue or decreasing of total expenses or
combination of both. A higher profit margin indicates that Kossan has a better control
over its costs compared with the competitors.
ii.
Good financial performance

Next, we noticed that Kossan has a good financial performance after review
the annual report of Kossan. Despite the challenging operating environment, it was
reported that the Kossan has achieved record growth in revenue and earnings for the
year 2013. During the year, Kossan reported a 30.1% growth in earnings which tops
all its peers within the glove manufacturing industry. In this current market
environment, this is a strong validation of Kossans business strategies.
Page 19
iii.
Optimization of Production Process

Furthermore, Kossan has strength of optimization of production process. The
improved performance in overall profitability was significantly attributed to higher

glove demand across all Kossans product-mix, more effective cost control and better
production efficiency coupled with coordinated efforts in capacity expansion and
continuous research and development. Now, Kossan has 9 new production lines to
meet the demand of the market. This will increase the competitive advantages of
Kossan to fulfill the demand and compete with the rivals.
iv.
Variety of rubber glove products

In addition, Kossan has produced variety of products. Besides gloves, Kossan
also has produced other rubber products such as roller, PU product, colored EPDM
granules and so on. Variety of products lines is strength for Kossan because when one
of the product lines is down, Kossan still has other product line to support the
operation. It will not bring a huge effect for the financial and operation. If Kossan too
dependable to one product line, they will be meet bankrupt when there are serious
problem in that product line.
v.
Practice Corporate Social Responsibilities

Moreover, Kossan is also practicing Corporate Social Responsibilities (CSR).
This very encourageable because we should not only focus on driving sustainable
profit growth and interrupted returns for the shareholders but also need to caring
about the social and the environment. Kossan had organized many activities to
encourage the CSR such as charity visit to caring home in Klang, employees
engagement program, and so on. This will attracts the investors to invest in Kossan
and increase the loyalty of employees and customers.
vi.
Investing in human capital and Research and Development (R&D)

Last but not least, Kossan has put efforts in investing of human capital and
R&D. Human capital is a very important asset for a company because they are the
people who manage the operation. Besides that, R&D can help to improve the
production line and help to reduce the cost of production. Kossan was doing well in
this part. Therefore, Kossan can maintain its Top 5 in the rubber industry.
Page 20
3.2
Kossans Weaknesses
Weaknesses are the internal attributes that prevent business form accomplish the
organizations mission. These weaknesses are the factors that will deteriorate
influences on the organizational success and growth. Therefore, analyzing the
weaknesses of organization enables business minimize and eliminate its weakness as
weaknesses are controllable.
i.
Increase of production cost

Based on the analysis, we notice that increase of production costs considered
as one of the weakness that Kossan faced. Basically, the increase of Kossans
production costs are resulted from the increase of utilities cost such as gas and
electricity. As we know Kossan is a manufacturer company that produces rubber
gloves, therefore a lots of electricity was required during the manufacturing process
and this causes Kossan have to undertake the higher production costs of rubber gloves.
For instance, based on the data that we founded, Malaysias current average tariff rate
is 33.5 sen per kWh (kilowatt-hour) which is 8.5 sen or 25.3% that below the real cost
which 42 sen per kWh. Therefore, if government gradually remove the fuel
subsidiaries, the indicative tariff rate would be increase to around 42 sen per kWh.
This
indicated
that
Kossan
will
face
the
increase
of
utilities
costs.
Moreover, minimum wages policy was established on 1 January 2013 by government

had incurred increases of the Kossans labour cost which also contributes to the
increase of production cost. Lastly, the natural gas price was approximately increase
around 20% in year 2014 also risen the production costs of Kossan.
ii.
Shortage of worker
Expansion of capacity requires more workers to run the production process.
On the other hand, Kossan lacks of skilled foreign worker, especially in production
process, as foreign labor constitutes a big portion of glove manufacturers workforce.
Besides, efficiency of technology has prompted glove manufacturers to reduce the
using of manpower and move towards automation. This will allow Kossan to enjoy
the benefits of economies of scale.
Page 21
iii.
Low Automation
"We're looking to transform our operations to another level. That's why we
need to build high efficiency plants and have extra capacity to include far more
automation and to do away with foreign workers. The glove industry will no longer be
labour intensive going forward and the output per worker can be high as the whole
production line, including packing, can be automated. For the next two years, workers
in the glove industry could be cut down by some 40%." the CEO Lim Kuang Sia said.
This shows that Kossan has great dependence on workers and that contributes to
higher labor cost. Higher degree of dependence on worker may cause worker to have
more bargaining power against employer. We can also know that Kossan has not yet
ready for optimize automation and not yet greatly benefit from technology.
3.3
Kossans Strength and Weaknesses (Company Profile Matrix)
Strength
1
2
3
4
5
6
Weight
Score
Increase of Profit Margin

Good financial performance
Optimization of Production Process
Variety of Product
Practice Corporate Social Responsibilities
Investing in Human Capital and R&D
Weaknesses
4 Increase of Production Cost
5 Shortage of Worker
6 Low Automation
0.20
0.15
0.10
0.10
0.05
0.10
0.15
0.15
0.10
Total
Kossan
Strength
Total
Rating
9
1.80
8
1.20
8
0.80
8
0.80
7
0.35
7
0.70
8
7
6
1.20
1.05
0.60
8.50
1 Very weak 10 very strong
Justification:
In overall, Kossan obtain the total score of 7.9. From the table above, the
strength which is increase of profit margin was weighted 0.2 scores and Kossan gains
9 scores because the profit margin of Kossan is increased from year 2011 to 2013 and
this indicated that Kossan has a good control over its costs and able to generate more
income with each dollar of sales. Good financial performance is set a weight of 0.15
and Kossan gains 8 scores because from the overall financial management Kossan
Page 22
was done well in this area. Next, optimization of production process, variety of
product and investing in human capital and R&D are set at weight of 0.1 and Kossan
gains 8 scores, 8 scores and 7 scores respectively. This is because Kossan had put
efforts in innovation in those areas so that they can maintain Top 5 in the rubber
industry. Lastly, practice corporate social responsibilities is set at weight of 0.05 and
Kossan gains 7 scores because Kossan had been involved in CSR contribution since
many years ago.
In addition, based on the table above, increase of production cost, shortage of
labor and low automation of Kossan has been weigthed 0.10 respectively. Increase of
production has been rated the highest score, which is 8, among the three weaknesses
because higher production cost will have greater impact on company, such as lower
profit and lower market share. Shortage of worker was rated 7 and low automation
rated the least score, which is 7, among the three weaknesses. The last two
weaknesses have smaller impact than that of production cost.
3.4
Weighted Competitive Strength Assessment

A competitive strength assessment is important for a company this is because its act
as a tool for a company to assess the companys competitive situation.
KSF/Strength
Measure
Quality/Product
performance
Reputation and Image
Financial Resources
Technological skills
Global Distribution
Network
Global Market Share
New Product
Innovation
Sum of Weights
Overall Strength
Rating
Weight
Kossan
Strength
Score
Rating
Top Glove
Strength
Score
Rating
Supermaxx
Strength
Score
Rating
0.20
1.60
1.80
1.60
0.15
0.15
0.10
8
8
8
1.20
1.20
0.80
9
8
9
1.35
1.20
0.90
8
8
8
1.20
1.20
0.80
0.15
1.20
1.35
1.05
0.10
0.80
0.90
0.70
0.15
1.05
1.20
0.90
1.0
Rating Scale: 1 Very weak
7.85
8.70
7.45
10 Very strong
Page 23
Justification:
i.
Quality/products performance
Quality or product performance is a very important key success factor for a
company and hence it is weighted 0.20. Kossan and Supermaxx are rated 8 while Top
Glove is rated 9 as its products performance outperforms its competitors. Kossan and
Supermaxx have relatively same quality of products.
ii.
Reputation and image

Reputation and image is weighted 0.15.Kossan and Supermaxx having the
almost same level of reputation and image so they are rated 8. Top Glove gained the
greatest market share in Malaysias rubber industry. This has built up its strong
company reputation and image. Thus, Top Glove is rated 9. These companies are one
of the top 10 companies in Malaysias rubber industries.
iii.
Financial Resources
Financial resource is important for a company to keep operating so it is
weighted 0.15. Kossan, Top Glove and Supermaxx are rated 8 as they have different
strengths in their financial performances. They are able to use the financial resources
available to generate higher than moderates net profit margin.
iv.
Technological skill
Technological skills in a key towards cost effectiveness and it is weighted 0.10.
Kossan and Sopermaxx are rated 8 while Top Glove is rated 9. Top Gloves
technological skill has outperforms its competitors and thus it is able to lower its cost
and achieve higher profit than its competitors do.
v.
Global Distribution Network

Global distribution network gained the weigh score which is 0.15 shows that it
also plays an important role for company to operate its business. Top Glove had
scored 9; Kossan scored 8 and Supermaxx get the lowest scored which is 7. The
reason that Top Glove gets the highest score is because Top Glove had distribute its
product over 195 countries and this indicates that Top glove have strongest distributes
network against Kossan and Supermaxx which is 160 countries and 145 countries.
Page 24
vi.
Global Market Share

Global market share weighted the score of 0.10. Top Glove gained the highest
score which is 9; followed by Kossan 8 and the lowest score is Supermaxx which is 7.
The bigger market share means the greater performance had done by the company
against others company in the industry. The market capitalization of Top Glove
achieved RM 2,313,234,000 billion, Kossan achieved RM 1,307,292,000 billion and
Supermaxx achieved RM1, 048,150,699 billion. This indicated that Top Glove
achieved the highest market share in rubber glove industry as Top Glove gained the
high profit in rubber glove compare to Kossan and Supermaxx.
vii.
New Product Innovation

New product innovation is important for company to sustain themselves in this
competitive business environment. Thus, new product innovation had weighed score
of 0.15. Top Glove scored the highest score of 8; followed by Kossan 7 and
Supermaxx gained the lowest score of 6. The reason that Top Glove gained the best in
the product innovation is because Top Glove always upgrades its current rubber glove
products which Top Glove had around 19 rubber gloves with different quality and
function compare to Kossan and Supermaxx.
Page 25
Chapter 4:
Kossans Financial Ratio Analysis and Comparison of Financial Performance in
the Malaysian Rubber Glove Industry
4.0
Kossans Financial Ratio Analysis
There is several purpose of company to calculate financial ratio. Financial ratios can
be an important tool for business owners and managers to measure their progress
toward reaching the company goals. Besides that, financial ratios can enable company
to examine the relationships between items and measure that relationship.
4.1
PART 1: Profitability Ratios

Kossan
Year/ RM
Operating Profit Margin
2011
MYR
(RM 000)
43,930
139,414
= 0.32
Net Profit Margin
42,954
139,414
= 0.31
Return On Assets
42,954
233,806
= 0.18
Return On Shareholders
42,954
Equity
215,969
= 0.20
Earnings Per Share
89,192
318,644
= 0.28
Table 1:
Kossans Profitability ratios
2012
MYR
(RM 000)
2013
MYR
(RM 000)
46,888
153,140
= 0.31
45,595
153,140
= 0.30
45,595
258,291
= 0.18
45,595
232,888
= 0.20
102,163
318,620
= 0.32
166,268
286,444
= 0.58
166,426
286,444
= 0.58
166,426
381,236
= 0.44
166,426
362,229
= 0.46
136,422
639,468
= 0.21
Page 26

70%
60%
50%
40%
30%
20%
10%
0%
2011
Figure 1.1
1.
2012
2013
Kossans Operating Profit Margin
Operating Profit margin

Operating profit margin is calculated by using operating income divide sales
revenue. It is a measure of profitability and it is also a measure of managerial

flexibility and competency. The higher the operating margin, the more profitable a
companys core business.
Operating profit margin shows the profitability of current operations without
regard to interest charges and income taxes. Higher is better and the trend should be
upward. Kossans operating profit margin dropped from year 2011 to 2012 which is
from 32% 31% and increase back to 58% in 2013. This shows that Kossan operated
well in year 2013.
Net profit margin

70%
60%
50%
40%
Net profit margin
30%
20%
10%
0%
2011
Figure 1.2
2.
2012
2013
Kossans Net profit Margin
Net Profit Margin

Net profit margin is calculated by using net income divide net sales. It also
known as net income as a percentage of net sales is to measure the profitability of

sales. It is to evaluate how efficient a company is and how well it controls its costs.
Page 27
Net profit margin shows after-tax profits per dollar of sales. Kossans net
profit margin had also decreased from 31% in year 2011 to 30% in year 2012 and
increased back to 58% in 2013. While net profit margin indicates how well a
company can generate net income from revenue, we can see that Kossan did well in
generating net income, may be resulted from expansion of capacity.
Return on assets
0.5
0.4
0.3
Return on assets
0.2
0.1
0
2011
Figure 1.3
3.
2012
2013
Kossans Return on Assets
Return on Assets
Return on assets is the ratio of annual operating income to the average total
assets of a company. This ratio is important in measuring the productivity of assets by

the returns provided.
Return on assets of Kossan remain stable at 0.18 in year 2011 and 2012 and
increased to 0.44 in year 2013. Kossan did well in utilizing its assets while increasing
its assets.
Return on shareholders' equity

0.5
0.4
0.3
Return on shareholders'
equity
0.2
0.1
0
2011
Figure 1.4
2012
2013
Kossans Return on Shareholders Equity
Page 28
4.
Return on Shareholders Equity

Return on equity is the amount of net income returned as a percentage of
average shareholders equity. This ratio is used to measure the rate of return on
stockholders' investment that shows the efficient management of a company at using
its assets to generate earnings.
Kossans return on shareholders equity also remain stable at 0.20 in year
2011 and 2012 and climbed back to 0.46 in year 2013. Kossan has had improvement
in financing its shareholders investment.
Earning Per Share

RM0.35
RM0.30
RM0.25
RM0.20
Earning Per Share
RM0.15
RM0.10
RM0.05
RM0.00
2011
Figure 1.5
5.
2012
2013
Kossans earning per share
Earnings Per Share(EPS)

Earnings per share can be obtained by dividing the profits after taxes by the
weighted average number of issued ordinary shares. These shows that the earnings
available to the owners of each share of common stock. This ratio serves as an
indicator of a company's profitability in determining the market share's price.
Earnings per share (EPS) shows the earnings generated from the share.
Although Kossans EPS had increased from RM0.28 in year 2011 to RM0.32 in year
2012, but it dropped to RM0.21 in year 2013. Kossan has to revise its business
strategy to generate more income from its shares.
Page 29
4.2
PART 2: Liquidity Ratios
Kossan
Year/ RM
Current Ratio
Quick ratio
Cash Ratio
Working Capital
2011
MYR
(RM 000)
2012
MYR
(RM 000)
2013
MYR
(RM 000)
174,553
13,203
= 13.22
174,553- 16,753
13,203
= 11.95
33,084
13,203
= 2.51
174.553- 13,203
= 161,350
202,433
20,771
= 9.75
202,433- 14,678
20,771
= 9.04
68,344
20,771
= 3.29
202,433- 20,771
= 181,662
322,464
14,801
= 21.79
322,464- 15,100
14,801
= 20.77
50,976
14,801
= 3.44
322,464- 14,801
= 307,663
Table 2:
Kossans Liquidity ratios
Figure 2.1
Kossans Current Ratio
Current Ratio
25
20
15
Current Ratio
10
5
0
2011
1.
2012
2013
Current Ratio
Current ratio can be calculated by using current assets divided by current
liabilities. Basically, current ratio is used to test the liquidity of a company ad measure
the ability of the company to pays its short-term obligation. The higher the ratio, the
more capable the company is paying its obligations. Figure 2.1 had shown that the
current ratio of Kossan from year 2011 to year 2013.
Kossans current ratio has decreased from 13.22 in year 2011 to 9.75 in year
2012 and increased to 21.79 in year 2013. The current ratio above 1 shows better
Page 30
liquidity of company because its means total current assets are exceed total current
liabilities. However, based on the ratio that we calculated, Kossan current ratio shows
abnormally high value of current ratio which indicated existence of underutilized
resources in the company.
Quick Ratio
25
20
15
Quick Ratio
10
5
0
2011
Figure 2.2
2.
2012
2013
Kossans Quick ratio
Quick ratio
Quick ratio can be calculated by using current assets- inventories divided by
current liabilities. Basically, quick ratio is an indicator of a company short-term

liquidity and it used for measures a companys ability to meet its short-term
obligations with its most liquid assets. Figure 2.2 had shown the quick ratio of Kossan
from year 2011 to year 2013.
In year 2011 the quick ratio of Kossan was 11.95 and decrease to 9.04 in year
2012. However, it was increase again to 20.77 in year 2013. This means that in year
2011, 2012 and 2013 Kossan has 11.95, 9.04 and 20.77 of liquid assets available to
cover the current liabilities in each year respectively. This means that Kossan has no
problem in meeting its financial obligation.
Page 31
Cash Ratio
4
3
Cash Ratio
2
1
0
2011
Figure 2.3
3.
2012
2013
Kossans Cash Ratio
Cash ratio
Cash ratio can be calculated by using cash divided by current liabilities.
Basically, cash ratio is measure the ability of company to repay its current liabilities
by only using cash. Figure 2.3 had shown the cash ratio of Kossan from year 2011 to
year 2013.
Cash ratio that above 1 means that the company able pay all its current
liabilities. Kossan had achieved cash ratio of 2.51 in year 2011, 3.29 in year 2012 and
3.44 in 2013. This shows that Kossan cash ratio had increased year by year which
mainly due to the company having more cash and cash equivalent asset over the year.
Working capital
350,000
300,000
250,000
200,000
Working capital
150,000
100,000
50,000
0
2011
Figure 2.4
4.
2012
2013
Kossans working capital
Working Capital
Working capital can be calculated by using current assets minus current
liabilities. Positive working capital means that company has enough capital to run its
day to day operations and has sufficient short-term financial term to cover current
Page 32
liabilities. Figure 2.4 had shown the working capital of Kossan from year 2011 to year
2013.
The working capital of Kossan had increased from 161,350 in year 2011 to
181,662 in year 2012. However, the working capital in year 2013 had increased into
307,663. In brief, the working capital of Kossan increase by year and its indicated that
Kossan have sufficient short term assets to cover its short term liabilities.
4.3
PART 3: Leverage Ratios

Kossan
Year/ RM
2011
MYR
(RM 000)
17,837
Total debt-to-assets
233,806
ratio
= 0.076
17,837
Total debt-to-equity
215,969
ratio
= 0.083
14,859
Average
Collection
139,414/365
Period
= 38.90 (39 days)
Table 3:
Kossans Leverage Ratios
2012
MYR
(RM 000)
25,403
258,291
= 0.098
25,403
232,888
= 0.109
19,878
153,140/365
= 43.38 (44 days)
2013
MYR
(RM 000)
19,007
381,236
= 0.050
19,007
362,229
= 0.052
24,571
286,444/365
= 31.31 (32days)
Total debt-to-assets ratio

0.1
0.08
0.06
0.04
0.02
0
2011
2012
2013
Total debt-to-asset ratio
Figure 3.1
1.
Kossans Total debt-to-assets ratio
Total Debt-to-assets ratio

Total debt-to-assets ratio is an indicator of financial leverage. It was calculated
by dividing companys total liabilities by its total assets. If the ratio is less than 1,
Page 33
most of the companys assets are financed through equity. On the other hand, if the
ratio greater than 1, most of the companys assets are financed by debts. Therefore,
the higher the ratio, the higher the financial risk will be associated with the company.
Based on Figure 3, the ratio is increased from year 2011 to 2012 then dropped
in year 2013. This means that Kossan had inquired assets through debts in year 2012
while in year 2013 Kossan inquired most of the companys assets through equity.
However, the ratio of Kossan is less than 1 so the financial risk that associated with
the company is low. Kossan is managed their assets well.
Total debt-to-equity ratio
0.12
0.1
0.08
0.06
0.04
0.02
0
2011
2012
2013
Total debt to equity ratio
Figure 3.2
2.
Kossans Total debt-to-equity ratio
Total debt-to-equity-ratio
Total debt-to-equity ratio measure the riskiness of a companys financial
structure. It was calculated by dividing the companys total liabilities by the total
equity. A high total debt-to-equity ratio indicated that a company was aggressive in
financing its growth with debt.
Based on Figure 3.2, the ratio is increased from year 2011 to 2012 and
decreased in year 2013. The ratio shows that Kossan was done well in managing its
equity and financial issues because Kossan did not need to acquire more debt to
manage the cash shortfall or use the debt to repurchase stocks.
Page 34
Average Collection Period
45
40
35
30
25
20
15
10
5
0
2011
2012
2013
Figure 3.3
3.
Kossans Average collection period

The average collection period defined as the average number of days that
needed to collect the invoiced amount from the customers. This is used to measure the
effectiveness of companys credit granting policies and collection effort.
It is
calculated by dividing the average accounts receivables by the average credit sales per
day (annual sales divided by 365 days).
From the Figure 3.3, the average collection period increased from 2011 to
2012 and decreased in year 2013. The increasing of average collection period maybe
due to looser credit policies, worsening economy and reduced of collection effort. On
the other hand, the decreasing of average collection period maybe due to tighter credit
policies, reduced of term and increased of collection effort. However, Kossan
maintains the period among 30 days to 45 days and this is considered good
management in the collection debts.
Page 35
4.4
PART 4: Market Analysis Ratio

Kossan
Year/ RM
2011
MYR
(RM 000)
Dividend Yield
0.08
1.625
= 4.92%
Price Earning Ratio
1.625
0.28
= 5.8
Table 4:
Kossans Market Analysis Ratio
2012
MYR
(RM 000)
2013
MYR
(RM 000)
0.04
1.65
= 2.42%
1.65
0.32
= 5.16
0.07
4.32
= 1.62%
4.32
0.21
= 20.52
Dividend yield
6.00%
5.00%
4.00%
3.00%
Dividend yield
2.00%
1.00%
0.00%
2011
Figure 4.1
1.
2012
2013
Kossans Dividend yield
Dividend Yield
Dividend yield can be calculated by using annual dividend per share divided
by its market price per share. Dividend yield means the percentage of after tax profit
paid out as dividends. The higher the dividend paid out, the more mature and well
establish of a company. Figure above shows dividend yield from years 2011 until
2013.
Dividend yield of Kossan shows unstable growth throughout years 2011 to
years 2013. Dividend yield in 2011 was 4.92% and decreased to 2.42% in 2012 and
then continued dropped to 4.92% in 2013. This trend indicates that Kossan has
unstable earnings growth due to strong competition from its competitor in rubber
glove industry that lead to Kossan paid out lesser and lesser from year to year.
Page 36
Price earning ratio

25
20
15
Price earning ratio
10
0
2011
Figure 4.2
2.
2012
2013
Kossans Price earnings ratio
Price Earnings Ratio

Price-earnings ratio can be calculated using market price per share divided by
annual earnings per share. A faster-growing or less risky firm tends to have higher
price-earnings ratios than slower growing or more risky firms. P-e ratios above 20
indicate strong investor confidence in a firms outlook and earnings growth whereas
firms whose future earnings are at risk or likely to grow slowly typically have ratios
below 12.
Price-earnings ratio of Kossan in 2013 was the best among three years. P-e
ratio in 2011 was 5.8 and decreased to 5.16 in 2012 but suddenly boost up to 20.52 in
2013. This shows that Kossan has a strong firms outlook that increases investor
confidence and more stable future earnings growth due to its good technology and
variety of product line in 2013.
Page 37
4.5
Comparison of Financial Performance in the Malaysian Rubber Glove
Industry.
Part 1: Profitability ratio
2012
Kossan
Top Glove
Supermaxx
Net Profit Margin
0.30
0.96
Return On Assets
0.18
0.32
0.01
Return On
0.20
0.32
0.01
0.32
0.35
0.18
Shareholders Equity
Earnings Per
Share(EPS)
In year 2012, Top Glove got the highest net profit margin, 0.96 or 96%,
among the three companies compared followed by Kossan 0.30 or 30% while the data
of Supermaxx is not available here. This shows that Top Glove has better operating
system and sales than the other two companies do.
Top Glove got 0.32, followed by Kossan, 0.18 and then Supermaxx, 0.01. Top Glove
has stronger capability in utilizing its assets than Kossan and Supermaxx do.
Supermaxx did very poor in this part that may result from its excess assets which are
not utilized.
The return on shareholders equity of Top Glove is the highest, 0.32, followed
by Kossan, 0.20 then Supermaxx, 0.01. Top Glove has well used its shareholders
equity at the right places such as investment and assets while Supermaxx did not do
so. Supermaxx may hold too much equity in hand and did not use it wisely.
The EPS of Top Glove highest among the companies compared, which is 0.35
followed by Kossan, 0.32 and Supermaxx, 0.18. The amount of ordinary share was
just enough for the companies to generate greater earnings.
Page 38
2013
Kossan
Top Glove
Supermaxx
Net Profit Margin
0.58
0.95
0.68
Return On Assets
0.44
0.19
0.03
Return On
0.46
0.19
0.04
0.21
0.23
0.18
Shareholders Equity
Earnings Per
Share(EPS)
Net profit margin of Top Glove has dropped to 0.95, yet did not bring much
impact and it is still the highest score among the three companies compared. The net
profit margin of Supermaxx and Kossan has increased to 0.68 and 0.58 respectively.
This shows that they have tried hard in improving their business performance
especially in their products variability and performance.
Return of assets of Top Glove has dropped to 0.19 while Supermaxx and
Kossan have experienced an increase in that, which are 0.03 and 0.44 respectively.
Kossan has increased and well used its assets in year 2013 and thus has the highest
return on assets among the three companies. The decrease of return on assets of Top
Glove may result from its decrease in its assets.
Return on shareholders equity of Top Glove has decreased to 0.19 which may
due to decrease in equity provided by shareholders. Supermaxx and Kossan have had
improvement. They got 0.04 and 0.46 respectively. Kossan had its equity increase in
year 2013.
Top Glove and Kossan have experienced decrease in EPS, which are 0.23 and
0.21 respectively, while Supermaxx still maintaining at 0.18. In year 2013, both Top
Glove and Kossan were unable to generate greater EPS that may due to increase in
ordinary share.
Page 39
PART 2: Liquidity Ratio

2012
Kossan
Top Glove
Supermaxx
Current Ratio
9.75
4.79
10.66
Cash Ratio
3.29
0.84
0.02
In year 2012, we noticed that the current ratio of Top Glove gained the lowest
current ratio that is 4.79 which indicates that Top Glove had sufficient ability to pays
its obligations. However, based on the table above, we also noticed that Kossan and
Supermaxx current ratio shows abnormally high value which is 9.75 and 10.66
respectively. This showed that this two company is too liquid and they had
underutilized its resources which is they do not uses its assets effectively.
Moreover, the cash ratio of Kossan showed the highest among Top Glove and
Supermaxx. Kossan had achieved cash ratio of 3.29 which indicated that Kossan able
repay its current liabilities by using cash where Top Glove and Kossan are less
capable to its current liabilities by using cash.
2013
Current Ratio
Cash Ratio
Kossan
Top Glove
Supermaxx
21.79
21.93
5.10
3.44
1.28
0.01
In year 2013, we noticed that the current ratio of Top Supermaxx gained the
lowest current ratio that is 5.10 which indicates that Supermaxx had sufficient ability
to pays its obligations. However, based on the table above, we also noticed that
Kossan and Top Glove current ratio shows abnormally high value which is 21.79 and
21.93 respectively. This showed that this two company is too liquid and they had
underutilized its resources which is they do not uses its assets effectively.
Moreover, the cash ratio of Kossan showed the highest among Top Glove and
Supermaxx. Kossan had achieved cash ratio of 3.44 which indicated that Kossan able
repay its current liabilities by using cash where Top Glove and Kossan still less
capable to its current liabilities by using cash.
Page 40
PART 3: Leverage Ratios

2012
Total
debt-to-asset
ratio
Total debt to equity
ratio
Kossan
Top Glove
Supermaxx
0.098
0.00178
0.22
0.109
0.00178
0.28
In year 2012, the total debt-to-asset ratio for Top Glove is the lowest among
the three companies. However, the total debt-to-asset ratio for Kossan, Top Glove and
Supermaxx is less than 1 and the data shows that most of their assets are financed
through equity. Three of the companies are considered as have low financial risk
associated with company.
On the other hand, the total debt-to-equity ratio for Top Glove is the lowest
among the three companies. The ratio for total debt-to-asset and debt-to-equity of Top
Glove are same because Top Glove financed their assets and equity equally through
debts. However, Supermaxx shows that they are more aggressive in financing the
companys growth with debts.
2013
Total
debt-to-asset
ratio
Total debt to equity
ratio
Kossan
Top Glove
Supermaxx
0.050
0.00202
0.23
0.052
0.00202
0.30
In year 2013, the debt-to-asset ratio for Top Glove is still the lowest among
three companies but the ratio has increased compared with year 2012 and this
condition also happen in Supermaxx. Kossan is the only one company where the ratio
has decreased. This means that Kossan has improved their management on financing
and reduced the financing assets through debt.
Furthermore, the debt-to-equity ratio for Supermaxx is the highest among the
three companies. The ratio for Top Glove and Supermaxx are increased from year
2012 to 2013. It shows that they are increasing the financing of equity through debt
while Kossan reduce the depending on debt to finance the growth of company. This
means that Kossan is managing their growth better than Top Glove and Supermaxx.
Page 41
Part 4: Market Analysis Ratio
2012
Dividend Yield
Kossan
Top Glove
Supermaxx
2.42%
2.70%
2.7%
5.16
17.20
11.0
In year 2012, Top Glove and Supermaxx had same dividend yield which
was2.70% whereas Kossan dividend yield was 2.42%. It showed that Supermaxx and
Top Glove were more matured, well established and more stable earning growth
compare to Kossan because both of these companies had higher dividend point than
Kossan. Besides, Top Glove achieved the highest price earnings ratio which was
17.20, and then followed by Supermaxx, 11.0 and Kossan had the least price earnings
ratio which was 5.16. Top Glove was the fastest growing and less risky company
compared to Supermaxx and Kossan because it had the higher price earnings ratio
compared to both of these companies.
2013
Kossan
Top Glove
Supermaxx
Dividend Yield
1.62%
2.80%
3.1%
20.52
17.90
9.8
In year 2013, dividend yield of Kossan had decreased to 1.62% whereas

dividend yield of Top Glove and Supermaxx had increased to 2.80% and 3.10%
respectively compare to 2012. Supermaxx had the highest dividend yield among 3
companies. It shows that Supermaxx experiencing a more matured and stable earnings
growth in 2013 whereas Kossan experiencing unstable earnings growth due to strong
competition in rubber glove industry that lead to Kossan paid out lesser and lesser
dividend from year 2012 to year 2013. Besides, Kossan achieved the highest price
earnings ratio among 3 companies among 2013 which was 20.52 and it was totally
different with 2012 which Kossan had the lowest price earnings ratio, 5.16 in 2012
whereas Supermaxx had decreased to 9.80% and Top Glove had increased slightly to
17.90%. It shows that Kossan had a stronger firms outlook that increases investor
confidence and less risky company in 2013 compare with other 2 competitors.
Page 42
Chapter 5:
Formulate Strategies SWOT Matrix; SPACE Matrix and BCG Matrix
5.1
SWOT Matrix
SWOT Analysis is a useful technique that use for evaluate companys
strengths, weaknesses, opportunity and threats. In order to examine the companys

SWOT where these technique assists our group to come out construct strategies for
Kossan Company. A SWOT Matrix for Kossan is constructed as below.
Internal Strength (S)
Internal Weakness (W)
1. Profit Margin increased

year by year
2. Good financial performance
3. Optimization of production
process
4. Variety of product
5. Practicing Corporate Social
Responsibilities
6. Investing of human capital
and R&D
1. Increase of production
cost
2. Labour Scarcity
3. Low Automation
External Opportunity (O)
SO Strategies
WO Strategies
1. World demand of
rubber gloves is
growing
2. Expand production
capacity in Malaysia
and emerging market.
3. Landbank expansion
4. Decrease in price of
Latex
1.
1. Build plants in emerging

country
( W1,W2,O1,O2,O3,O4)
2. Acquire the technology
knowhow from other
rubber industry
(W1,W3,O1,O2,O3)
External Threats (T)
ST Strategies
1. Strong competition in
rubber glove industry
2. Government policy
factor
3. High bargaining power
of buyers
4. Price competition
5. Currency Malaysia
fluctuation
1.
2.
2.
Conduct research and

development (R&D)
continuously
(S3,S4,S6,O1,O2)
Market expansion
(S1,S2,S4,S6,O1,O2,O3,
O4)
WT Strategies
Maintain the current

i.
competitive strengths in
domestics with products
innovation
(S1,S2,S3,S4,S5,
ii.
S6,T1,T3,T4)
Innovative and follow the
market trend in order to
stay in line with
government and world
regulations.
(S4,S5,T2,T5)
Strengthen company
competitive strength
(W1,W2,W3,T1,T4)
Alert to the changing
environment
(W1,W2,W3,T1,
T2,T3,T4,T5)
Page 43
Strength-Opportunity Strategies (SO):

Based on the SWOT matrix that we had carried out, for the part of strength
and opportunities strategies, we had suggest that Kossan to conduct research and
development (R&D) continuously.To further enhance the strengths of Kossan, which
are optimization of production process, variety of products and human capital and
R&D, it is important to conduct R&D continuously. The external opportunities that
allow Kossan to do so are the growing world demand of rubber glove and expand
production capacity in Malaysia. R&D is required to reduce cost and achieve
economic scale. When Kossan achieves cost effectiveness, it is able to generate higher
profit margin. Besides, R&D is especially important in producing high quality of
products.
Moreover, we also suggest that Kossan can continuously pursue market
expansion in future.The increase of profit margin and good financial performance
provides financial resources for Kossan to expand its market. On the other hand, its
variety of products, human capital and R&D enables them to be able to survive in new
market. The growing world demand, expansion of capacity in Malaysia and emerging
market, land bank expansion, and decrease in price of latex are the motivators of
choosing market expansion. Kossan can grab the opportunity of growing world
demand and expansions of production capacity by expand its market according to the
geographical area.
Strength-Threat Strategies (ST):
In the strength and threat strategies, we had pointed out two strategies for
Kossan. First of all, Kossan should maintain the current competitive strength in
domestics with products innovation; this indicated that Kossan take advantages of
its capability of produce variety of product to introduce variety new and innovative
products. Besides, continuously make innovative product able help in developing
Kossan unique selling point this is because customers often view that innovation as a
distinct element where it will add values to Kossans rubber gloves products.
Therefore, SONY has to pay attention on R&D development (R&D) so that product
innovations created and brought to the market.
On the other hand, we suggest that Kossan should follow the market trend in
order to stay in line with government and world regulations. This indicates that
Kossan should always conduct market analysis and pay attention on the current
Page 44
market trend of rubber gloves industry. Besides, Kossan should make innovate rubber
gloves product without infringe the government and world regulation. This indicated
that Kossan have to produce the rubber glove product that is saves to use.
Weakness-Opportunity Strategies (WT):

In the weakness-opportunity part, we have suggested two strategies for Kossan
to improve the weakness and grab the opportunities. First strategy that we suggest is
building plants in emerging country such as India, China, Thailand and Indonesia.
This is because these countries are full with abundant resources. For example, India
and China are abundant in labour resources while Thailand and Indonesia are
abundant in latex resources and labour resources. Latex is the major cost component
for rubber glove manufacture. Although the market price of latex is decreasing but we
still need to prevent the scarcity of Latex. Therefore, we need to build plant in the
country which has abundant of latex to ensure the supply of latex. Besides that, the
labour in China and India are much cheaper than other country so if we build plant
there we can solve the problem of labour scarcity and reduce the production cost.
However, Kossan need to concern about the exchange rate of these countries to avoid
extra costs on the shipping fee and tariff. If the production cost (including tariff and
shipping fees) in these countries are higher than the production cost in Malaysia, then
this strategy can be put aside and consider other strategy.
On the other hand, we suggest that Kossan can acquire the technology know
how from other rubber industry such as Supermaxx and Top Glove. Technology
know how means that the knowledge and skills required to accomplish something.
Now, Kossan has automated stripping of gloves and packaging automation of sterile
gloves. Kossan actually already put many efforts in implementing of automation
technology but the production cost is still increasing year by year. Kossan is
continuously looking into the future to bring out the latest technology in packaging
solutions with enhanced quality and benefits. Learning from the competitors is a good
way to improve the weakness. For example, Top Glove has automated most of their
manufacturing process and they still able to control the production cost so that it
wont increase continuously in dramatic. However, Kossan also may refer to the
technology using by the rubber industry in other country such as Shun Tai Rubber
Glove Industry in Thailand. They can carry out innovation to their production line so
that they can reduce the waste or defection during the production process.
Page 45
Weakness Threats Strategies (ST):

For the part of weakness and threat, we have suggested two business strategies
for this part. First, Kossan should strengthen its company competitive strength such as
maintain good financial performance, optimization of production process, produced
variety of products and investing in human capital and R&D. All of this strength can
overcome the weaknesses of increasing production cost problem, labour scarcity, and
low automation and also minimize the threat of strong competition in rubber glove
industry and price competition. Good financial performance can be strengthening by
new capacity expansion that lead to higher earnings growth so that Kossan can take it
as competitive advantage to compete with other strong competitors. Optimization of
production process can be strengthening by invested in various technologies,
sophisticated equipment and human resources to optimize and bring down the
consumption of utilities and raw materials that can bring advantage in price
competition. Variety of products can produce many product lines to strengthen
company position. Human capital and R&D should be invested in long term so can
develop and train employees in order to defend leading position in the glove industry.
Second, Kossan should alert to the changing environment in order to

strengthen its position in rubber glove industry. Kossan should has the ability to
predicts business strategy that competitor will implement so that Kossan can carry out
a better business strategy to compete with them. Kossan should be elastic and
adaptable to government policy factor and currency fluctuation Malaysia. For
example, Kossan should invest in advance technology and optimize its production
process to minimize the side effect of minimum wage policy that lead high production
cost. Besides, Kossan should exporting more glove when weaker RM against US
dollar to gain profit as much as possible. Kossan should reduce exporting its products
to minimize the risk facing the loss of business if stronger RM against US dollar.
Thus, Kossan should always flexible and adaptable to various changes of outside
environment so that can meet the demand of customer easily on global and become
leader of rubber glove industry in one day.
Page 46
5.2
SPACE Matrix
The Strategic Position and Action Evaluation Matrix or the SPACE Matrix is a
strategic management tool that used to analyze a company. The SPACE Matrix is used
to identify what types of strategy that company should pursue (conservative,
aggressive, defensive or competitive).
A set of variables are chosen to be used to examine SONYs competitive
advantage (CA), industry strength (IS), environmental stability (ES) and financial
strength (FS). The rating scale of competitive advantages (CA) and environmental
stability (ES) from -1 (best) to -6 (worst) whereas the rating scale of industry strength
(IS) and financial strength (FS) from 1 (worst) to 6 (best).
Axis X
Internal Strategic Position

Competitive Advantage (CA)
-2 Product quality
-2 Brand and image
-2 Technology
-2 Customer loyalty
External Strategic Position

Industry Strength (IS)
5 Profit Potential
5 Growth potential
4 Financial Stability
4 Resource utilization
Average: -2
Axis Y
Average: 4.5
Total axis X score: -2 + 4.5 = 2.5
Financial Strength (FS)
Environmental Stability (ES)
5 Return On Assets
-3 Currency
5 Leverage
-2 Competitive Pressure
2 Liquidity
-2 Demand elasticity
4 Earnings per share
-2 Resources price
Average: 4
Average: -2.25
Total axis Y score: 4 - 2.25 = 1.75
Page 47
Financial Strength
Conservative
-6
-5
-4
-3
-2
Competitive Advantages
Defensive
-1
Aggressive
-1
-2
-3
-4
-5
-6
Industry Attractiveness
Competitive
Environmental Stability
Based on the Space matrix that we had plotted out, we found out that Kossan
is under Aggressive area with 2.5 in X-axis and 1.75 in Y-axis. It shoes that Kossan is
an attractive and relative stable rubber glove company and Kossan also possesses own
competitive advantages to compete with other competitors in this rapid growth rubber
glove industry.
Therefore, Kossan should continuously improve its market and
product development so that Kossan able compete in this market penetration with
other rubber gloves company. Thus, Kossan should use its strength to develop more
relative diversification.
Aggressive Growth Strategies recommended by Space Matrix:
a.
Market development
Kossan had distributed its rubber gloves product to 160 countries and Kossan
plan to expand its production capacity and plants in emerging market. Therefore,
Kossan should continuously invest in innovation and build competitive advantages in
order to obtain sustain growth in rubber gloves industry. For example, Kossan should
Page 48
implement and conduct R&D on the competitors products and environmental

position.
b.
Product development
Kossan should continuously make innovation which innovation enable Kossan
introduce new rubber gloves products to customers. Besides, Kossan also can make
enhancement on existing products for the purpose of enhance its products quality.
Based on the annual report of Kossan, we found out that Kossan continuously invest
in technology and R&D to develop the rubber gloves products. For example, Kossan
can invest in advance technology to reduce the reject rate of manufacture the rubber
glove products.
Page 49
5.3
Boston Consulting Group (BCG) Matrix

BCG Matrix is a useful tool to assists Kossan to analyze its current business
segments. It able differentiate the business segments of Kossan in term of market

growth rate and relative market share and this allows Kossan able manage its different
business segment by examining the industry growth rate of each business segment and
relative market share position. Thus, BCG matrix helps Kossan to understand which
business segments should be invest where it has potential to growth and which
business segments should be divest where it does not generate revenue.
We had analyzed and constructed the 4 business segment of Kossan which are
Rubber Glove, Technical Rubber products, Clean product and others. There are two
important elements that required for construct BCG matrix which is the relative
market share and the market growth rate for each segment.
Each element had
calculated as below:
Relative Market Share =
Segment net income in year 2013

Total Segment net income in year 2013
Market Growth Rate = Segment net income in year 2013 Segment net income in year 2012
Segment net income in year 2012
Business Segments
Technical Rubber Products
Net
Net
income of income of
2013
2012
(RM 000) (RM 000)
160,268
141,317
Gloves
1,117,401
1,068,478
85.47
4.58
29,533
22,145
2.26
33.36
Others
90
2,061
0.01
-95.63
Total
RM
1,307,292
RM
1,234,001
100%
Cleanroom products
Relative
Market
Share
(%)
12.26
Market
Growth
Rate (%)
13.41
Page 50
Relative Market Share
Market Growth (%)
Star
Question
Marks
Clean products
Cash Cow
Dog
Glove
Technical Rubber
Product
Based on the BCG matrix that we had carried, there are 4 business segments
that Kossan operated. Based on the chart above, the business segment of Kossan are
fall under cash cow which is Rubber Glove. However, technical rubber is fall under
Dog whereas clean product is fall under Question Marks.
The business segments of Kossan that fall under cash cow which is Rubber
Glove and it also the most profitable segments. Glove business unit is at mature stage
and experienced the least market growth rate among the four business units but with
high market share. Moreover, cash cow represents the main business unit that
generate income for company. In year 2012, glove products have helped Kossan
generated net income of RM 1.06 billion while in year 2013, it has generated RM 1.11
billion. In these two years, it generated the highest income among the four business
units. Therefore, the best strategies options for cash cow are product diversification
and development.
Furthermore, technical rubber product segment falls under at the Dog area.
This is because technical rubber products of Kossan have a low relative market share
and low market growth. Technical rubber products hold low relative market share
compared to other product line and operate in a slowly growing market. In general,
they are not worth investing in because they generate low cash returns. However,
Page 51
technical rubber product may be profitable after a period; they may provide synergies
for other products or simple act as a defence to counter competitors moves. Therefore,
Kossan can make further analysis on this product segment to decide that whether this
product needs to be divested.
Last but not least, cleanroom products is falls under Question Marks which it
holds high growth and low market share; and its has potential to become Star.
Question marks are growing rapidly and thus consume large amount of cash.
Therefore, Kossan should pay close attention on this segment as this segment may
gain high market share and growth rate in future. Thus, Kossan have to invest a lot of
money in order to grow the market share in this segment. In brief, market research
and continuous R&D should be conduct in this segment by knowing the changing in
outside environment to make it has big possibilities to become star.
In conclusion, rubber gloves products of Kossan are under good and stable
positions which its able generate the most revenue and also gained the highest market
share. Therefore, Kossan should continue to pay close attention and maintain the
strong position of the rubber gloves segment in order to maintain its position which is
Top 5 in the rubber gloves industry in Malaysia.
Page 52
REFERENCES
1.
2.
3.
4.
5.
6.
7.
8.
http://www.kossan.com.my/GloveDivision/our_facilities.html
http://www.kossan.com.my/GloveDivision/market_segment.html
http://www.kossan.com.my/RubberDivision/ir/directors.html
http://www.kossan.com.my/RubberDivision/ir/profile.html
http://www.kossan.com.my/glovedivision/contact_us.html
http://www.stepstone.de/stellenangebote--Gloves-Division-CHIEFENGINEER-Malaysia-Klang-Selangor-Kossan-Rubber-Industries-Bhd-3282081-inline.html
http://www.kossan.com.my/RubberDivision/ir/directors.html
http://brandirectory.com/league_tables/table/malaysia-100-2014
Financial ratio analysis:

9.
http://accounting-simplified.com/financial/ratio-analysis/current.html
10.
http://accounting-simplified.com/financial/ratio-analysis/quick-acid-test.html
11.
http://accountingexplained.com/financial/ratios/cash-ratio
12.
SWOT:
13.
Opportunity:
14.
http://www.kppk.gov.my/index.php/news-cutting/3076-rubber-industrymalaysia-expected-to-eksport-rm15b-rubber-products-in-2014.html
15.
http://globenewswire.com/news-release/2015/04/13/723963/0/en/DGAPNews-Bio13-04-2015-Malaysian-Rubber-Glove-Manufacturers-AssociationMARGMA-expects-Malaysian-glove-companies-to-achieve-a-global-marketshare-of-65-in-all-glove-sectors-by-202.html
16.
http://www.prnewswire.com/news-releases/global-rubber-gloves-market-tosee-demand-shift-says-a-2014-research-report-272680211.html
17.
https://researchnews.affininvestmentbank.com.my/Research/DailyReports/201
40710/Glove%20SU%2020140710%20Affin.pdf
18.
http://www.bursamarketplace.com/index.php?ch=46&pg=170&ac=2662&bb=
research_article_pdf
19.
http://www.bloombergtv.my/natural-rubber-glove-export-volume-increased-64-2014/
Threats:
20.
file:///C:/Users/toshiba/Downloads/ALLIANCE%20RUBBER%20GLOVE%20-%20120208%20-%20INITIATION.PDF
21.
http://webcache.googleusercontent.com/search?q=cache%3A0JyhVVbFzGMJ
%3Awww.supermax.com.my%2Fhtml%2Ffiledownload.aspx%3Ffile%3D200
90727%2520CIMB%2520RUBBER%2520GLOVES%2520%2520PACKING%2520A%2520PUNCH.PDF+&cd=2&hl=en&ct=clnk
Weaknesses:
22.
http://m.thesundaily.my/node/208282#sthash.T8rb9G5j.dpuf
Page 53
23.
24.
http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad
=rja&uact=8&ved=0CC4QFjAC&url=http%3A%2F%2F
www.themalaysianinsider.com%2Fmalaysia%2Farticle%2Felectricity-tariffup-15-next-year-ministerannounces&ei=V6xJVfTFOoK6uATSpoCYAQ&usg=AFQjCNELF2D0jEJd0
6jn--sl26vCMwDXHg&bvm=bv.92291466,d.c2E
25.
http://www.ukessays.com/essays/marketing/top-glove-corporation-berhadmarketing-essay.php
26.
http://www.asean-investor.com/valuation-gap-to-narrow-with-regionalexpansion/
Page 54
Chapter 3: Financial Ratio Anaylsis
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
PART 1: Profitability Ratios

Operating profit
Sales Revenue
Net Profit Margin
Profit After Taxes
Sales Revenue
Return On Assets
Profit After Taxes
(ROE)
Total Assets
Return On Shareholders Equity
Profit After taxes
(ROE)
Total Shareholders Equity
Earnings per Share
Profit After Taxes
Number of shares of common stock
outstanding
PART 2: Liquidity Ratios
Current Ratio
Current Assets
Current Liabilities
Quick Ratio
Current Assets Current Liabilities
Current Liabilities
Cash Ratio
Cash
Current Liabilities
Working Capital
Current Assets Current Liabilities
PART 3: Leverage Ratio
Total Debt-to-Assets Ratio
Total Liabilities
Total Assets
Total Debt-to-Equity Ratio
Total Liabilities
Total Shareholders Equity
Account Receivable
Total Sales / 365
PART 4: Market Analysis Ratio
Dividend Yield
Annual dividend per share
Market Price per share
Market Price per share
Earnings per share
Page 55
APPENDIX
Page 56

School of Management University Sains Malaysia ACADEMIC SESSION 2014/2015

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SCHOOL OF MANAGEMENT

UNIVERSITY SAINS MALAYSIA

LECTURER: Dr. Hasliza Abdul Halim

Koo Yaw Loong

Lim Gaik Xian

Tan Yik Min

ATW 393 E/4 Strategic Management

ATW 393 E/4 Strategic Management

Comparison of Financial Performance in the Malaysian

ATW 393 E/4 Strategic Management

ATW 393 E/4 Strategic Management

Vision Statement of Kossan

Current Vision Statement of Kossan

The corporate vision statement of Kossan is to be the world class market in

Discussion on Vision Statement of Kossan

ATW 393 E/4 Strategic Management

ATW 393 E/4 Strategic Management

Mission Statement of Kossan

Current Mission Statement of Kossan

Keeping a healthy growth through teamwork

Opting to be competitive through the provision of good services and quality

Stepping up the welfare, competency and professionalism of our employees

Aspiring creativity and innovation in our entire business process

Navigating towards a sustainable low carbon footprint environment

Discussion on Mission Statement of Kossan

ATW 393 E/4 Strategic Management

ATW 393 E/4 Strategic Management

Kossans Opportunities and Threats (External Analysis)

Opportunities are beneficial situations in the external environment and arise of

World demand for rubber gloves is growing

ATW 393 E/4 Strategic Management

Expand production capacity in Malaysia and emerging market.

production expansion is also expected to sustaining Kossan earning growth

Decrease in prices of Latex

ATW 393 E/4 Strategic Management

Strong completion in rubber glove industry

Government policy factor

ATW 393 E/4 Strategic Management

High bargaining power of buyers

predominantly original equipment manufacturers (OEM) with 95% in rubber glove

Foreign exchange rate risk

ATW 393 E/4 Strategic Management

Kossans Opportunities and Threats (Company Profile Matrix)

1 World demand for rubber gloves is growing

Rating score: 4 - Major Strength; 3 - Minor Strength; 2 - Major Weakness; 1 - Minor

ATW 393 E/4 Strategic Management

ATW 393 E/4 Strategic Management

Kossans Competitive Profile Matrix (CPM)

Critical Success Factors

Rating Total Rating Total Rating Total

2. Reputation and Image

4. New product innovation

7. Global Distribution Network

Table 2: Kossans Competitive Profile Matrix

Reputation and Image

ATW 393 E/4 Strategic Management

New product innovation capability

ATW 393 E/4 Strategic Management

Global Distribution Network

Supermaxx ranked as 8, 9 and 7 respectively. Kossan products are exported to more

ATW 393 E/4 Strategic Management

Kossans Strategic Group Map

Two key factors: (i) Distribution Coverage (ii) Competitive Pricing