GSM 5160

STRATEGIC MANAGEMENT
1

Perodua: Improving Customer

Satisfaction through Efficiency
focused internal changes
GROUP MEMBERS:

HASLINA HASSAN GM05320

SHAMINI SELVARAJ GM05289
NOR SHAMRI ITHNIN GM05312
DR RAIMOND SELKE GM05322
 6
CONCLUSION
5
RECOMMENDATION
4
ANALYSIS
3
ASSUMPTIONS
2
PERODUA BACKGROUND
1
INTRODUCTION
2
CONTENT
INTRODUCTION

ISSUE!!
IT TAKES THREE MONTHS FOR CUSTOMERS TO GET
THEIR CARS ONCE ORDERS HAVE BEEN PLACED.

WE WILL IDENTIFY AND ADDRESS RELEVANT

INTERNAL AND EXTERNAL ISSUES AND TO RESOLVE
THIS MATTER ACCORDINGLY.

OBJECTIVE: TO ENSURE THAT THE

CUSTOMERS WILL GET THEIR ORDERS WITHIN
ONE MONTH ie 50% REDUCTION IN WAITING
TIME.
PERODUA BACKGROUND
4
ESTABLISH GROUPS CAPITAL PRODUCT

Perusahaan Perodua Authorized: 5 different

Otomobil Manufactu- RM500Mil products
Kedua Sdn ring Sdn Bhd and paid-up thats
Bhd (Manufactu- capital: affordable,
(Perodua) rer) RM140Mil compact and
was set-up in Perodua practical car
1992 Sales sdn for growing
2nd national Bhd (Sales & motoring
car distribution population.
arm)
Perusahaan
Otomobil
Kedua Sdn
Bhd
(Holding co)
ASSUMPTIONS

Financial institution has certain limitation on

aggregate amount of loan given out to buyers.

About 80% or orders were obtained during month

end - rush to register vehicles with local authorities.

Computer Systems the databases between the

retailers and production warehouse are not link ie
lack of communication between warehouse and
retailers.

Inexperience in handling deliveries to places

especially in rural areas. No third party service
providers are hired.
BCG MATRIX
6
MOVING FORWARD

PRE & POST PERODUA POSITION

 TOWS MATRIX
TOWS MATRIX Internal Strength
1. Producing compact cars, value for money
and affordable price. 7
2. Excellent reliability and build quality.
3. Impressive standard equipment
specification.
4. Fuel saving cars.
5. Easy to drift for beginners.
6. Suitable for couples.
7. Low cost leader in Asia.
External Opportunities SO
1. Financial market SO 1. Acquire the core technical competency
2. New technology to design and manufacture its own
3. New market as home market is saturated. automobiles, and eventually propel
4. Increasing fuel price will drive people to Malaysia into the international arena as a
prefer smaller cars. full-scale manufacturer of motor vehicles.
External Threats ST
1. Economic crisis ST 1. innovative advertising and sales
2. Competitor like proton have higher promotion campaign so as to create a 'pull
investment capabilities. sales environment
3. Competitors can overtake R & D
investment. ST 2. To maintain low cost leadership and fuel
4. Low cost substitutes being marketed by saving car at affordable price.
Chinese manufacturer.
5. Macro-economic situations leads to lower
sales for all automobile manufacturer.
Internal Weakness
1. Weak distribution system.
2. Low productivity.
3. Delay in receiving spare parts.
4. Poor or standard design.
5. Notorious for low safety standards.
6. Excessively dependant on Toyota for
upgrade.
7. Low research and development.
8. Not innovative.
9. Over dependence on the domestic market
and weak brand image in the international
market.
WO
WO 1. Computerized network, which would link
Perodua 's operation starting from getting
the order from customer to manufacturing,
to invoicing and to prompt delivery.
WO 2. Hire and train people with required
technical capabilities and expertise.
WO 3. Invest more on research & development
on design, technology and system.
WT
WT 1. Improve customer service through
integrated facilities, which include the setting
up of a registration center, a pre-delivery
inspection center, customer service center,
and delivery center altogether under one
roof.
WT 2. More expose to safety hazards.
 ISHIKAWA DIAGRAM

EXTERNAL

SYSTEM GOVERNMENT MARKET

Loan provider
Redundance
requirement
requirement Bureaucracy
Inconsistent
Ineffective
Agencies involve demand pattern
communication

Less customer
satisfaction
POOR DISTRIBUTION
Poor condition /DELIVERY
Ineffective Lack of training Lack of efficiency
communication Transportation Conflict situation
Lack of incentive
Late in
Excessive hierarchy Limited storage space
delivery Peripheral area
Excess inventory
SYSTEM PEOPLE LOCATION MANAGEMENT

INTERNAL
PARETO ANALYSIS
9

No Problem (step 1) Cause (step 2) Score (step 3)

1. Ineffective distribution Late in delivery of 18
cars, Over demand,
Insufficient raw
material, Ineffective
communication,
Location
2. Wrong delivery of cars (specs) Ineffective 6
communication
3. Surplus in inventory Late in delivery of 4
cars, Ineffective
communication
4. Increase in customers Late in delivery of 12
complaints cars, Ineffective
communication

* Scores are based on verbal survey done on 30 Perodua clients.

PARETO ANALYSIS
45 100
10
40 90

80
35

70
30

60
25
50
No of people
20 Cumulative %
40

15
30

10
20

5 10

0 0
Ineffectiv e communication Late in deliv ery Insufficient raw material Location

Causes of poor distribution of cars in Perodua

By handling ineffective communication having a effective communication, Perodua can solve 80% of
problem such as distribution of cars (specs), surplus in inventory and customers complaints. One
solution (20%) to solve many problems (80%).
 IFE MATRIX
INTERNAL STRENGTH WEIGHT RATING WEIGHTED SCORE
(Market) (Company)
1. Strong market player 30% 11 4 1.20

2. Supplies compact and 10% 3 0.30

affordable cars
3. Good reputation and image 6% 3 0.18

4. Excellent reliability and build 4% 3 0.12

quality
5. Low cost leader 10% 4 0.40

6. Strong marketing and 4% 3 0.12

promotion
INTERNAL WEAKNESSES WEIGHT RATING WEIGHTED SCORE

1. Supply on-time delivery 6% 1 0.06

decreased
2. Low productivity 6% 1 0.06

3. Poor or standard design 6% 1 0.06

4. Notorious for low safety 6% 2 0.12

standards.

5.Sensitive to oil prices 8% 2 0.16

6. Customer complaint increases 4% 1 0.04

Total 100% 2.82 (internal position)

 EFE MATRIX
OPPORTUNITY WEIGHT RATING WEIGHTED SCORE
(Market) 12 (Company)
1. New technology 15% 4 0.60

2. Supplier from local 10% 4 0.40

3. Newer market favorable of 8% 3 0.24

small cars
4. Internationalization 10% 3 0.30

5. Decline in customer loyalty 6% 3 0.18

THREATS WEIGHT RATING WEIGHTED SCORE

1. Competitive price of other 15% 3 0.45

brand in the market
2. Decline in customer loyalty 6% 3 0.18

3. Multiple and diverse 8% 2 0.16

regulatory environment to
contend with from
international and domestic
4. Macro-economic situation 10% 3 0.30

5. Low cost substitutes 12% 2 0.24

Total 100% 3.05 (strong external position)

IE MATRIX
13

EFE
3.05

IFE
2.82
Suggestion Grow and Build strategy

The strategies should focus on market penetration, market development, and product
development. From the operational perspective, a backward integration, forward
integration, and horizontal integration should also be considered.
 STRATEGY MAP

FINANCIAL INCREASING MARKET SHARES FROM 14% (1995) TO 35%

(2020)
Investment Domestic Direct Foreign Direct
Investment Investment

CUSTOMER PIONEER E-COMMERCE

14 IN THE AUTOMOTIVE
SECTOR
e- Daftar e- Excise

INTERNAL PIONEER THE PROJECT VIA JOINT EFFORT

PROCESS & TECHNOLOGY IMPROVEMENT
Electronic data
interchange

LEARNING & SMART PARTNERSHIP

GROWTH
Entreprene Internship
University
-urial Dev Industry
/Industry staff
Advisory Panel
Bridging gap
RECOMMENDATION
15

Improve computer mainframe capacity to cope with peaks

1
submission

Empower organization change via: Online excise duties

2
payment Online vehicle registration to RTD HQ

3 Outsource the delivery activities to third party

4 Negotiation with Local Authorities in expediting car registration

5 Switch from Batching system submission from outlets to

Online vehicle registration to RTD HQ

MOU with Financial Institutions on the aggregate amount of

6
loans to buyers.
CONCLUSION
16

1 We have looked into the issue in the introduction stage

distribution/delivery

We have studied the BCG Matrix of Perodua - at cash cow

2
quadrant that aimed to be in star.

We have identified the causes to the issue by using Ishikawa

3
cause and effect Diagram

4 We have done Pareto Analysis and identified that ineffective

communication is a major issue for Perodua.

We have looked into EFE and IFE that shows weak internal
5
position while EFE shows strong position to overcome the issue.
We have studied the Strategic Map and Perodua will be able to
6 reach its target market shares if the distribution/delivery issues
be handled accordingly.