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MGT300-Individual Project

Define Competitive Advantages

Competitive advantage is a feature that gives a company an edge over its rivals. It is
something that helps it compete more effectively. A competitive advantage could be a
superiority that a company gain. For example, perhaps it can provide the same value as other
companies can, but at a lower price. It may also offer more attractive credit terms than its
competitors. Some companies with a competitive advantage can charge more. They charge
more by providing greater value through differentiation. Differentiation refers to the results of
efforts to make a brand stand out to customers. Specifically, it stands out as a provider of unique
value.

Hence, competitive advantage can be defined as a product or service that an


organization’s customers place a greater value on the similar offerings from a competitor

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MGT300-Individual Project

Company Background

99 Speedmart is a fast-growing chain of refreshing 'new and improved' mini-markets


that meets consumers' needs for groceries, offering unsurpassed value and absolute
convenience. logo represents the shopping environment in 99, completes with trolley and doing
our best to achieve 99 marks.

99 Speedmart shows a fast, easy & convenient store that focuses on quality and fast
customer service as well as cleanliness, tidiness and safety.

Back in time in the year of 1987, 99 Speedmart was known as ‘Kedai Runcit Hiap Hee’.
It was open in residential area, which is in Jln. Tepi Sg. Selangor so that many people around
that area can easily go there and buy their personal needs. Lee Thiam Wah, The CEO of
99Speedmart sees that, opportunity in going further in retailing business is there. Hence, he
keeps on going expanding his small mini markets so that more product can get in and
consumers can have a variety of selection on the product line.

In 1992, the know ‘Kedai Runcit Hiap Hee’ changes their name to ’99 Mini Market’ in
Klang, Utama. This is the start of revolutionary steps of this company because during this time,
this company is starting to get peak in sales. More to it, this company are slowly starting to
change the way it looks, the way of managing the company and even to the little, they have air
conditioner applied in the outlets. This will be not only a step of trying to lure the customer to
their mini market hence to give the consumer the feeling of comfortable while doing a little
grocery shopping at their mini market.

In the year of 2000, the name ‘99Speedmart’, registered company came true as this
company yet steps into improvising their company background and style. As time goes on, they
have already open 164 outlets throughout the Klang Valley with their slogan ‘Near ‘n’ Save’.
This slogan basically means that, 99Speedmart is near and you don’t have to travel far in buying
your daily needs hence, saving you expenses.

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MGT300-Individual Project

In the year 2002, a new head office and distribution centre was completed in October
2002 at a cost of RM6.5 million. This warehouse is an 80,000 square feet facility, complete
with centralizes stacking, storage and warehousing capabilities. After 11 years of operating,
they had almost 450 branches and 3 distribution centres around the Peninsular Malaysia

Mission

" Our goal is to fulfill customer's needs by supplying various types of daily use products with
reasonable price

Vision

" We strive to provide customers an 'ideal shopping environment' that incorporates with the
elements of time and money saving. Therefore, our slogan is NEAR' n SAVE."

As shown above, 99Speedmart is an award-winning mini market. 99Speedmart has won ‘Brand
Impact Award’ in the year of 2008 and “Best Mini Market Award” in the year of 2009. The
awards were given by Kementerian Perdagangan Dalam Negeri (KPDN) for their successful
year in being the best mini market among them all in the same category. With both of this
award, it shows that 99Speedmart is already far ahead in being the best mini market in
Malaysia.

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MGT300-Individual Project

SPEEDMART BUSINESS PROCESS

Centralize Purchase and Delivery

Speedmart use Distribution Centres, they can meet the demands of the rapidly
expanding chain of 99 Speedmart outlets. Well-organized and managed distribution centre
have provided complete order cycle such services as transportation, labelling, packaging and
order-fulfilment. Speedmart distribution centre’s sole mission is to provide outstanding service
to 99 Speedmart outlets, with the most efficient and cost-effective methods which makes 99
Speedmart able to achieve economies of scale and reduced costs.

With this process speedmart can provide fast and good service for its customer. With
Distribution Centres, speedmart can sure its product delivered on time to all its branches and
arrived to customer fast. Its process starts from purchasing department issue purchase order to
suppliers. Next, Suppliers deliver goods to 99 Distribution Centre and then 99 Distrbution
Centre distribute goods to the outlets.

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MGT300-Individual Project

Small-pack size to meet customer More than 250 trucks and lorries for
requirements and needs transport and quick delivery

Total of 1,000,000 square feet Automated computer system

of warehouse capacity to increase efficiency

labelling
Put-away facilities

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MGT300-Individual Project

This is how speedmart selling process is: -

Supplier

Purchase
Customer
Department

99
Outlet Distribution
Centre

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MGT300-Individual Project

SPEEDMART COMPETITVE ADVANTAGES

Products

The Speedmart offered a quality in their business. The company focused in selling only the
essential products and daily use product to fulfil and satisfy customer needs. The company
concept consists providing a quality items to the customers. Each of 99 Speedmart stores is
stocked with an array of groceries. There are more 3,000 items, from fresh milk to rice that suit
consumer’s needs and cravings in daily basis. Making life become simpler, 99 speedmart is a
chain of mini-markets that fulfil customer’s needs by providing quality groceries conveniently
and efficiently. This make speedmart is the most popular opinion among other convenience
store and make Speedmart’s is one the most success convenience store in Malaysia

Speedmart’s have thousands of items in their store

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MGT300-Individual Project

Price

The 99 Speedmart has a strong strength in its pricing aspect. The company can provide goods
in a cheaper price to consumers. The pricing tactics enable consumers to enjoy low prices and
makes consumers feel reasonable to purchase the daily use product at 99 Speedmart. They
offered lower price compare to its competitors. Almost every product in 99 Speedmart is
cheaper compared Tesco, Giant, Carrefour, Jusco etc. Their idea linked with economies of
scale where they purchased goods in bulk and able to provide cheaper price for consumers.
Besides that, their low overhead cost enables them to pass the cost savings to consumers by
reducing the price. According to one of the inside sources, the owner is getting tax privileges
due to his condition as a handicapped person. This enables him to keep the price low.

Speedmart offer cheaper price than its competitors

Place

The secret of 99 Speedmart’s convenience is linked to its strategic location to ensure that this
company is accessible almost anywhere. Each outlet is in most neighbourhood centres. ‘Near
n Save ‘concept save the valuable time of consumers by just getting the goods from their nearest
99 Speedmart. The outlets are usually located in commercial centres in housing area and easy
to shop so it easy for customer to shop at speedmart because of it have many branches across
Malaysia, the small shop and less manpower help to decease the overhead cost which is
ongoing expense for operating a business. The cost whichever saved, will pass to the consumer.

Speedmart have thousands of branches across Malaysia

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MGT300-Individual Project

Speedmart Loyalty Program

Since it established, Speedmart 99 have do lots of loyalty program for its customer, this
programme is important for business growth and development. Attracting and retaining
customers provides businesses with an upper hand in their markets, as those customers
ultimately purchase their products instead of competitors. For example, Promotions, Contest.
That is the examples for Speedmart loyalty program to ensure the customer loyal to Speedmart

Promotions

This are the example of speedmart’s promotions. First, Promotion during “Merdeka &
Malaysia Day”. Next is speedmart’s promo during its celebration the 30th anniversary.

This will attract more customer to shop in speedmart especially during its promotions. This is
good strategy because customer will choose the cheapest price among its competitors’ price
that offer higher price. Speedmart do this promotion every year to attract more customer and
increase it customer loyalty. They offer greatest value of money when buying in their store

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MGT300-Individual Project

Contest

To gain customer loyalty speedmart makes a contest for its customer, every speedmart
customer can join this contest by spending RM15 and pay using visa and send it into the
WhatsApp. There is lot of gift have been offering to the lucky customer

‘My Debit Dan Menang’ Contest

This kind of contest will bring more loyalty of customer to speedmart, this contest was held to
attract speedmat customer and make them loyal to one brand and always choose speedmart
rather than its competitors such as 7-Eleven and KK Mart.

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MGT300-Individual Project

Porter Five Forces Model

1. Threat of New Entrants

High. Because it’s difficult to enter the market due to it high cost and strict requirement and
regulations to enter the market. To open your own speedmart you must have knowledge and
experience in convenience store business to open your own business. Beside that in Malaysia
there is many convenience shops, so it will be difficult to a new company to enter this market
and gain trust from the customer

2. Threat of Substitute Products or Services

High. Because of speedmart have many competitors/ many branches in the market that offer
cheaper and variety of product or service that offer similar product or service. Such as 7-eleven
offer similar product as speedmart at similar price, therefore customer have many choices to
choose either speedmart or 7-eleven. So, this threat to speedmart and speedmart must have
different strategies to attract customer to shop at their shop

3. Supplier Power

Low. Due to many choices of supplier that can supply the product. Speedmart can choose either
supplier A or supplier B to sure the supply enough for customer. For example, speedmart have
many suppliers that enough to supply all the demand from the customer.

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MGT300-Individual Project

4. Buyer Power

High, because speedmart offer variety of product and service. For example, speedmart doesn’t
focus on one specific type of product it also sells variety of product consist of home product,
toiletries, and necessity product from many of brands from local to international brand. So,
customer have many choices when shop at speedmart according to their budget and interest

5. Rivalry Among Existing Competitors

High, because the speedmart itself have many branches so the speemart need to compete with
the other branches itself and other competitors such KK Super mart and 7-Eleven which offer
something that speedmart doesn’t have for example 24 Hours service and E-pay for online
purchase. If we buy something Lazada we can pay at the 7-Eleven. So, this is an advantage to
speedmart competitor.

Reference

http://www.99speedmart.com.my/

https://www.businessnewsdaily.com/5446-porters-five-forces.html

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