Management Information Systems in Organizations

Individual Assignment
Technology Park Malaysia

CT053-3.5-2 MISO

Management information system in organisation

UC2F-1005-IBM

INTAKE NO- TP023154

HAND OUT DATE-21 FEB 2011

LECTURER- THAM HOONG CHING

WORK COUNT- 3200

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Management Information Systems in Organizations

MANAGEMENT INFORMATION SYSTEM

IN THE ORGANISATION

TO DISCUSS THE CURRENT MARKET AND IT POSITION OF GIANT

MALAYSIA.

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Management Information Systems in Organizations

TABLE OF CONTENT PAGE

INTRODUCTION 5

BACKGROUND OF STUDY 6

SWOT ANALYSIS 7

PORTERS FIVE FORCES 9

IT POSITION 11-15

CONCLUSION 16

REFERNCES 17

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EXECUTIVE SUMMARY

This paper is a company analysis on Giant Hypermarket Malaysia in general, but

specifically focusing on Giant Hypermarket Sabah. Giant Hypermarket is a major
supermarket and retailer chain in Malaysia. It is a subsidiary of Dairy Farm
International Holdings (DFI) and is headquartered in Shah Alam, Selagor. In this
paper, firstly we focus our analysis in identifying the Strength-Weaknesses-
Opportunities-Threats (SWOT) of Giant; in addition, we constructed a SWOT Matrix
for Giant where we identified the SO, ST, WO and WT strategies, which we think
Giant should apply to improve their competitiveness. Next we focus our analysis on
the external as well as the internal analysis on Giant. In the external analysis, we
center our analysis based on two instruments that is the General Environment which is
also known as the PESTLE analysis to help us to understand the external environment
in which the organization operates, and also Porter’s Five Forces Model to identify
their industry competitiveness. On the other hand, in the internal analysis, we also
used two instruments to analyze Giant, which is by doing an analysis on their Value
Chain as well as by identifying their market growth and market share in BCG Matrix.

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INTRODUCTION

Giant Hypermarket, which is owned by Giant Capital Holdings (GCH), is one of the
largest hypermarkets in Malaysia. It was founded in 1944 by the Teng family in Kuala
Lumpur. It’s headquarter is based at Shah Alam, Selagor, meanwhile Sabah-Sarawak-
Brunei Regional headquarter is located in Kolombong Outlet, Kota Kinabalu. The key
people to the success of Giant Hypermarket are the Teng Family themselves.

Giant is operating under the retail industry. Its main competitors are Servay,
Milimewah, and Chua Kah Seng in Sabah, while Mydin for the western part of
Malaysia. Giant’s mission was always been to offer a wide variety of products at the
lowest possible price. Their slogan which says “Everyday Low Prices, big Variety and
Great Value” communicates the company’s mission to the public. 

Although Giant Hypermarket had been long operating at the western part of Malaysia,
its operation is fairly new to the local people of Sabah. Knowing this fact, Giant has
included states such as Sabah, Sarawak, and countries such as Brunei in their strategic
plan for expansion. In order to implement their strategic plan, their strategy includes
identifying stores to takeover (i.e. Likasmart in Sabah), and introducing low prices by
having staffs surveying competitor’s prices at major supermarkets outlets. 

Giant Hypermarket currently has around 1,000 employee in Sabah itself, and 10,000
employees in total nationwide. Some of the employee benefits that Giant employee
receives for working in Giant are employee insurance, a 10% discount when
purchasing within group (i.e. Giant Hypermarket, Guardian Pharmacy, and Cold
Storage).(THETIMES100)0

Besides having plenty of outlet stores around Malaysia, Giant also has outlet stores
around the Southeast Asia countries such as Singapore, Indonesia, Vietnam, India and
also Hong Kong. Information about Giant Hypermarket and promotions details can be
accessed through Giant’s Official Website which is www.giant.com.my. 

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BACKGROUND OF THE COMPANY

Giant Hypermarket is a major supermarket and retailer chain in Malaysia.

The Giant store brand was founded by the Teng family as a simple grocery store in
one of the suburbs of Kuala Lumpur in 1944. Its mission was to offer a wide variety
of products at the lowest possible prices. As its reputation grew, so did its business.

Dairy Farm, which acquired Giant in 1999, recognized that the key to Giant's success
had been its ability to continuously offer value for money products. It retained this
core principle even as it began transforming Giant into a national and international
brand.

After six years of effort, which included redesigning the stores, the introduction of the
non-food products into the Giant hypermarkets, the implementation of international
retail standards that includes safety, cleanliness, structured training, and a vibrant
shopping environment as well as centralized buying functions and improved
operations, Dairy Farm has made Giant the undisputed leader in Malaysia’s retail
sector.

In 1999, the first Giant Hypermarket store opened in Shah Alam, Selangor. By 2007,
the company had grown to operate a total of 85 hypermarkets/ supermarkets in
Malaysia with outlet size ranging from the 350,000 sq. ft hypermarket in Shah Alam
to the 11,000 sq. ft supermarket in Bangsar, Kuala Lumpur. The chain also includes 7
stores in Singapore and 15 hypermarkets in Indonesia. Giant hypermarkets offer a
wide range of local merchandise, such as fresh local fruits, vegetables, and seafood
within a wet market environment.

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SWOT ANALYSIS

A SWOT analysis summaries the key issues from the business environment and the
strategic capability of an organization that are most likely to impact on strategy
development. It is also useful as a basis against which to generate strategic options and
assess future courses of action. The aim is to identify the extent to which the current
strength and weaknesses are relevant to and capable of dealing with the changes taking
place. (JOHN)

Here, we are going to analyse the strength-weaknesses-opportunities-threats of Giant

one by one in order to fully understand the challenges Giant face. First, we will
discuss about their strengths. Giant indeed is one of the largest players of the retail
industry in Malaysia, having over 85 branches spread throughout the country making
them one of the largest supermarket chains in Malaysia, which is good because this
way they can capture the market share and little by little space out their competitors.
Unlike TESCO and Carrefour which only focuses their customers in major cities,
Giant’s 85 branches are strategically located throughout the country and states.

Besides that, having their own house brand is a good way of marketing their brand
name to their customers. Giant house brand is quite cheap compared to other major
brands available in the market, which will make them more sellable to their
consumers. In addition, Giant has a reputation of value for money, which offers low
prices, sometimes even lower than cost, which is good in the eye of their customers. 

Giant also has a good marketing team whom are in charge in marketing and promoting
Giant brand name to the public. The primary marketing tools of their marketing team
is by buying billboards space, advertising in newspapers and by distributing flyers and
brochures. These methods is proven to be useful especially when Giant first introduced
their stores in Sabah, because according to their executive, more and more customers
are going to their supermarket compared to before when they initially opened. Strength

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of Giant is that, they have a good relationship with their suppliers.

The main weaknesses for Giant are that, they are experiencing a high turnover rate
with their employee especially in the operation department, many of their employee
resigns after only working one or two months in their supermarket, which is not good
for them as they will need to find and employ new employees. Besides that, running a
supermarket especially the hypermarket in Kolombong requires high maintenance, if
they are unable to keep up with the maintenance, it will destroy their reputation. For
example, their store in Karamunsing which is not maintained well, the store has a
certain smell which comes from their previously frozen section and the store product
are not arranged well for the convenience of their customers. 

Another weakness is that large size leads to inefficiency in bureaucracy; their decision
making is centralized in their headquarters. Therefore, anything happened or anything
they do, they need to first consult their management team in Shah Alam. Also, Giant is
experiencing a high advertising cost, especially in Sabah, where they need to introduce
their brand name to attract their customers and capture market share. 

Furthermore, in pricing their products, Giant does use the conventional sticker type
pricing, they uses the shelf type pricing which is confusing to their customers, because
the price list on their shelf are not frequently updated and often wrongly place. There
are several incident whereby a customer saw a different price tag of the product they
want to purchased but when they reaches the counter, they are asked to pay a different
price which is much higher, this create unhappiness and dissatisfaction .

There are several opportunities for Giant. Firstly, they have ready customers,
households now are increasing and everyone needs to buy household products, this
creates a good demand for them. Another opportunity for them is to explore into new
location in Malaysia, which is also in conjunction with their current strategic plan
which is to open up to 40 branches throughout Sabah, Sarawak and Brunei. Besides
that, they can try to increase the variety of their house brand, as well as introducing
other products for their house brand to compete with their competitors. 

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The threats experienced by Giant are that there is stiff competition within the
industry, there are other major supermarket chains, such as Tesco, Servay,
Milimewah, etc. in Malaysia which is competing alongside with Giant in the retail
industry. Another threat is that although their house brand is known to their
customers, but it is not their customers preferable brand, their customer still prefers
other established brand name products compared to theirs. Also, survey done by
Giant shows that initially Sabahan cannot accept Giant due to numerous reasons, this
can be scary for them because if their customers still cannot accept them for a long-
term period, thus less people will shop in their store and sales will decreases. 

Lastly, the threat faced by Giant is online shopping. We are now in the IT era, people
are becoming used of using computers to do their daily task, for example to pay bills,
transfer money, as well as to buy stuffs. Websites which provides online shopping
are such as www.ebay.com.my, www.lelong.com.my, and etc. Thus, online shopping
can create threats for Giant conventional brick-and-mortar type of
business. (ECONOMY TIMES)

Porter’s Five Forces Model

Competition between the rival companies: The French retail industry is highly
competitive and in the past few years major acquisitions had taken place. The top
retailers are Intermarche, the world’s 6th largest retailer (1998 Sales: US$ 32.5
billion, Number of stores: 3,819, with presence in Belgium, Germany, Italy, Portugal
and Spain), Promodes, number 7 worldwide (1998 Sales: US$ 28.6 billion, Number of
stores: 4,921, with presence in Belgium, Dubai, Germany, Greece, Italy, Mauritius,
Morocco, Taiwan, Turkey, Portugal and Spain), and Carrefour, which is the eighth
largest global chain (1998 Sales: US$ 28.3 billion, Number of stores: 4,921, with
presence in Argentina, Brazil, China, Colombia, Hong Kong, Indonesia, Italy,
Malaysia, Mexico, Poland, Portugal, Singapore, South Korea, Spain, Taiwan,
Thailand and Turkey).

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Especially Carrefour and Promodes are considered to be close to being global

companies. Carrefour, for instance, has introduced its hypermarket (big stores with an
average area of 250,000 square feet) concept to Spain as early as 1973. In 1997,
Carrefour had total sales of USD 28 billion and a net income of USD 595 million.
The return on equity for that year was 18.8%, the current ratio 0.69 and the quick ratio
0.36. Carrefour strength is that it pursues international expansion with such strong
determination than few other retailers. It operates 369 hypermarkets in 20 countries
and 600 supermarkets. Carrefour also owns discount and convenience stores and
frozen food outlets. Promodes had total sales of USD 18.4 billion and a net income of
269 million. The return on equity was 19.87%, the current ratio 0.82 and the quick
ratio 0.53. Daniel Bernard, chairman of Carrefour, believes market share and volume
are the keys to future success. Metro AG, a German company, the second largest
retailer in the world, with $ 32.6 billion in sales, also has entered France. Food retailer
Promodes has been acquiring food chains for nearly two decades. A leading food
retailer in France and Europe, it operates more than 4,700 hypermarkets,
supermarkets, convenience stores, and discount stores.

Threat of new entrants: France is a big market experiencing significant growth in

retail industry in recent years. Strong economy, stable government, favourable
government policies for foreign investment and well-developed infrastructure and
with introduction of EURO as a common currency and same international laws,
makes France a very attractive place to be in. But at the same time the entry and exit
levels are high and it is getting mature quickly and have low profit margins.

Substitute products: As the retail industry sells products of daily common use, there
are no direct substitutes; the only substitute products that can be threat are the
products from grey market, which can harm the sales of branded products.
Department and discount stores also faces stiff competition from specialized retail
shops such as garments, electronics etc.

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Suppliers: Because of the diverse product range that is distributed by retailers there
are many different suppliers. Suppliers include both domestic and international
manufacturers and as the products are more or less standardized in nature, retailers
and wholesalers have low switching costs, the powers of supplier are moderate to low.

Buyers: The consumers are now more sophisticated and mature. As said by
Carrefour,
”they want it now and they want it with the best service and the best quality”.
Consumers enjoy increasing choice of products and increased price competition, and
they demand better and wider choices. They also exert pressure on manufacturers and
retailers to give more relevant product information.

(REFRENCES 2, 3)

IT POSITION

The current it position of giant stores in Malaysia helps it a lot to frame itself a good
establishment among other competitive forces, at present they have all sorts of IT
regulatory forms

Camera

They have the entire latest visualised camera of 3D aspect and this gives rise of clear
view of every nook and corner from one room and it helps to analyse every security
form and helps it in large scale.

Bar code reader

They have all sorts of barcode readers from the individual price detector to the price
analysing sector at the end of the counter this helps in giving clear view of price and
at times they also help to find where exactly a product is located

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IT software

The software they use are basic visual computing languages prepared manually for
their own sector it stores all sorts of information from product price listing to
attendance of employees

IP positioning

They have their own ip positioning address and use their own links in order to
communicate outside region and so this would result very useful, reduce any threat of
theft or e-hacking etc.

Theft analyser

This can be seen everywhere in every small retain store or supermarket but the one
that actually works are found rarely. Some have the working chip very delicate and
expires fast while others detect at the speed f light and hands over the culprit or the
thief whomsoever attempts.

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How IT can be used to underpin business future strategy

Today's companies want to see demonstrable value and return on investment for their
IT purchases from the outset, as the recognition sets in that technology is not a fashion
accessory but an enabler of both immediate bottom-line benefits.

There is much more experience now about how IT fits into business, particularly
when it comes to implementing certain types of system. But there is much less
evidence of companies that have made a concerted attempt to link their overall
business strategy to technology, rather than the odd tactical development.

The latest DTI International Benchmarking Study (for 2004) - which covers
information and communication technologies - provides evidence of encouraging
trends for UK businesses. The survey confirms that there has been a significant
increase in the proportion of businesses that are measuring the benefits of IT using
core financial metrics such as return on investment, internal rate of return and net
present value. It also reports that UK businesses are among the most likely to have
both written business plans and documented IT strategies.

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The first principle of aligning IT with the business is a

Crystal clear understanding of the business itself

The most frequently overlooked aspect of IT strategy

Definition is the cultural analysis of the organisation

Understanding value chains is paramount because

These represent the relationships and touch-points

Between the business functions and the IT estate

You need to know what pressures will shape and

Influence your business, perhaps imposing change

When you least welcome it

STEPS OF ALLIGNMENT
Gather intelligence from a number of sources, both

Internal and external, to determine how any change

May affect existing business functions, culture, IT

Estate and value chains

Successfully balancing sometimes disparate needs is

At the core of IT and business strategy alignment

Where necessary adjust schedules to accommodate

Proper alignment with established resource cycles

Business units need to move at different speeds – so

Each business unit should have its own, dedicated

Programme of IT work, showing when, where and

Why activity will be taking place.

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IMPORTANCE OF SYSTEM RISK, SECURITY AND

RECOVERY

Data security is critical for most businesses and even home computer users. Client
information, payment information, personal files, bank account details - all of this
information can be hard to replace and potentially dangerous if it falls into the wrong
hands. Data lost due to disasters such as a flood or fire is crushing, but losing it to
hackers or a malware infection can have much greater consequences

Securing Data

Once you draw up a plan and assess your risks, it is time to put your data security
system into action. Since data can be compromised in many ways, the best security
against misuse or theft involves a combination of technical measures, physical
security and a well-educated staff. You should implement clearly defined polices into
your infrastructure and effectively present them to the staff. Here are things that you
may do:

· Protect your office or data centre with alarms and monitoring systems

· Keep computers and associated components out of public view

· Enforce restrictions on internet access

· Ensure that your anti-malware solution is up to date

· Ensure that your operating system is up to date

RECOVERY

Organizations must plan for the recovery of key business functions, using priorities
and timescales derived from assessed risks and accompanying data. Business
Continuity Plans must cover perquisites for IT, data and voice communications as
well as for essential personnel and offsite locations. In today's world, it is no longer
sufficient for an organization to recover its technology and communications
infrastructure; it must have people available and accommodations in which they can
work.

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CONCLUSION

This assignment gives an idea about what is the current position of Giant stores in
Malaysia and also the IT position of the company. This company was an early result
of amalgamation and is quite successful around Malaysia and in other parts of the
world too. They have upgraded themselves and been updated in the market always.
This report would give a contrast on how the positioning is been done and what
necessary measure have been and should be taken in order to keep the company one
among the best.

In the end I would recommend the company to go for the latest gadgeteering in the
market in order for better profit mobility and good establishment which is possible for
them and would also like to add on the words of sir Richard Crawford-“The company
must aspire to acquire the desire they admire even if in the process they perspire they
must not retire but refine to acquire that desire they admire”

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REFERENCES

1. Marketing, 8th edition, Kerin Hartley Berkowitz Rudelius, 2006, McGraw-Hill

Irwin.

2. Marketing, 12th edition, Michael J. Etzel, Brice J. Walker, Willaim J. Stanton,

2007, McGraw-Hill Irwin.

3. The Marketing Plan, second edition, John Wesrwood, 1996, Kogan Page
Limited.

4. Contemporary Management, 4th edition, Gareth R. Jones, Jennifer M. George,

2006, McGraw-Hill Irwin.

5. Management, second edition, James A. F. Stoner and others, 1994, Prentice Hall
Australia.

6. www.12mange .com

7. www.times100.com

8. Positioning the battle of your mind – by al raies, jack trout

9. Guide to enterprise IT architecture – by col perks, tony beviridge

10. 3D position tracking for all stores- by pierre lamon

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