MAF 661 STRATEGIC MANAGEMENT

CASE STUDY
MUTIARA HATI SDN BHD (MHSB)

NACAB11A

PREPARED BY:

NORDINA KAMALIA BINTI SAIHO 2015451102

FARAH RAHIMAH BINTI ABDUL RAHIM 2016554367
NOORSURIANI BINTI MOHAMAD 2016116877
SITI NUR ATIQAH BINTI SYED RAMLI 2016403242
RAFIDAH BINTI ARIFFIN 2016759107

PREPARED TO:

MADAM ROHANA BINTI MOHD NOOR

 CASE STUDY MUTIARA HATI SDN BHD

TABLE OF CONTENTS

CONTENT PAGE

ACKNOWLEDGEMENT 3

QUESTION 1 4

QUESTION 2

QUESTION 3

QUESTION 4

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ACKNOWLEDGEMENT

In the name of Allah, the Most Gracious and the Most Merciful. Alhamdulillah, all praises to
Allah for the strengths and blessing in completing this project. Special appreciation goes to
our lecturer, Madam Rohana Binti Mohd Noor for the valuable guidance and advice. She
inspired us greatly to work on this case study. Her willingness to motivate us contributed
tremendously to our project. We also would like to thank him for showing us some example
that related to the case study.

Beside, we would like to take this opportunity to thank to the all of our team members
for willingness to spent time to finish this project. It gave us an opportunity to understand and
have knowledge about the importance of internal audit and the process of producing a good
quality of internal audit report. Finally, an honourable mention goes to our families and
friends for their understandings and supports on us in completing this project. Without helps
of the particular that mentioned above, we would face many difficulties while doing this.

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QUESTION 1
What is the difference between the demographic segment and the sociocultural segment in
the list of general environment factors that impact the strategy and performance of a firm?
Relate to the case to support your discussion.

1) Demographic
Demographic segment is a genetic and observable characteristics of a population, including
the levels of growth of age, density, race, ethnicity, education, geographic, region and
income. This segment consists elements of aging population, rising affluence, changing in
ethnic composition, geographic distribution of population and greater disparities in income
levels. MHSB is widely known as one of the manufacturing company that has been awarded
with GMP and they strictly ensure that their manufacturing processes are shariah compliance.
MHSB practice the same value chain activities as other manufacturing companies. It involves
inbound logistic, operations, outbound logistics, sales and marketing and after sales services.
In order to ensure the smooth running of the operations, these main activities are supported
by Human Resources Department, Finance Department and Administrative Department. This
is to sustain the quality of all of their products especially in acquiring the materials which are
halal and toyyiban for the products. That is how MHSB remains in the market over the years
and maintain the people’s identification of MHSB with halal and toyyiban products.

2) Sociocultural
Sociocultural forces influence the values, beliefs and lifestyle of a society. Personal care and
grooming is something that is essential and embedded in our daily routine. Thus, it is part of
our lifestyle. Due to the usage of halal and toyyiban materials in their products, MHSB is able
to attract many customers. Most of their customers are Muslims, who really concern about
halal and toyyiban products. Even the non-Muslims show their interests and preferences to
use MHSB products, most probably because of the information that they obtain on halal and
toyyiban products which result to increasing in the trust towards halal and toyyiban products.

MHSB also concern about the resources that they own. They have a few employees in the
management team that plan and strategize on leveraging their core competencies. MHSB
always ensure that all their resources are being use effectively and efficiently. MHSB
understand that human resource is one of the resources that are vital in an organization. This
contributes to motivate the employees in MHSB, the management prepares attractive

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remunerations and benefits to attract and to ensure low employees turnover in MHSB. Bonus
will be given at the end of the year based on the performance of the company and also the
employees.

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QUESTION 2

There are two levels of relationships among value-chain activities. Discuss the differences
based on the activities in MHSB.

Value-chain analysis is a strategy tool to analyse an organization that uses value creating
activities. While value is quantity or price buyers willing to pay for what a business provides
them and this is measured by total revenue, a reflection of the price a firm’s product
commands, and the quantity it can sell. The firm is considering profitable if its value exceeds
total costs involved in creating its product or service. Creating value for buyers that exceeds
the costs of production is a key concept used in analysing a firm’s competitive position.
Primary activities are sequential activities of the value chain that refer to the physical creation
of the product or service, its sale and transfer to the buyer, and its service after sale, including
inbound logistics, operations, outbound logistics, marketing and sales, and service. There are
few ways that the primary value chain activities of inbound logistics and operation could
create value for both business and customers.

a) Inbound Logistics

Inbound logistics is where all the processes that involved in the receiving, storing, and
internal distribution of the raw materials or basic ingredients of a product or service. The
most critical part of this process would be when the raw material is received as the
relationship with the suppliers is essential to the creation of value. This part includes mainly
two third parties that are suppliers of the raw material and the transportation part which may
be handled by another third party. Any delay that may incur during this process will clearly
affects the entire value chain which resulting delay in delivering the final product to the end
customers. The way to create and increase value in this part of process includes two key
elements which are reducing the lead time in delivery and reduce cost. In reducing the lead
time in delivery, the business needs the raw material to be delivered from supplier warehouse
to their warehouse with the priority of to bring the raw materials as quick as possible.

The management team needs to come out with efficient and effective delivery term with
supplier. Cost will be always high when involving more parties in deliveries instead of only
one. If the business nominate a single agent for delivering the goods from the given port to
their warehouse, they can to deliver the goods with a less lead time and with a less cost. This
will create and increase value to the inbound logistic process since it reduces the
transportation lead time and cost of raw material delivery which ultimately affects the final
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value of the product. According to MHSB case, MHSB owns a few warehouse and
distribution centre especially in Malaysia. They are really particular in choosing suppliers and
of course the finished product quality. This shows that MHSB has an efficient and effective
inbound logistics management in choosing suppliers that can supply a good raw material with
an affordable price.

b) Operations Operations

There are all activities associated with transforming inputs into the final product form. In this
activity, the most crucial part would be the operation management have to ensure the quality
control of the production and operation. They have to make sure that products of the business
are produced efficiently and effectively and avoid any wastage of business’s resources. This
will resulted in more competitively priced product reaches consumers due to production costs
being reduced without compromising on the quality of a product. Other than controlling the
current operations and resources, the operation management needs to come up with long-term
planning.

Long-term planning will contribute to sustainability of the company, products and

relationship with customers. This is essential for better financial and operational health of
business. This involves recognizing and planning for new product innovations, product
redevelopment, product enhancement, and complementary products that can be sold with an
existing successful product and service. These will create and increase value to the operations
since product will be produced in good quality with a long-term planning for the product
from the operation management. According to MHSB case, MHSB has several advance
facilities as well as numbered of skilful manufacturing processes are shariah compliance to
achieve efficient operation that are located at MHSB’s in Malaysia. Moreover, MHSB also
create such a quality of all of their products especially in acquiring the materials which are
halal and toyyiban for the products to compare its product effectiveness with competitor’s
product so that they can improve their product performance.

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QUESTION 3

Discuss the four criteria that the resources of a firm must possess to maintain a sustainable
advantage in the context of MHSB.

a) Short-term perspective

1) Is the product valuable?

Currently MHSB’s product is considers valuable since the product’s attribute is neutralize
their products especially in acquiring the materials which are halal and toyyiban for the
products. It is considered valuable when MHSB enable to formulate and implement the
product that improve its efficiency and effectiveness. MHSB can enjoy the economies of
scale since they received a very good demand in the market and the competitor also feels the
pain of the success of the product. It can see on MHSB since 2018 where the profit of MHSB
is increasing and it reflect the valuable of MHSB’s products to company. Besides that,
MHSB’s product are most are supported by Human Resources Department, Finance
Department and Administrative Department. Therefore, MHSB’s product is valuable since it
has been well recognised by the human resources.

2) Is the product rare?

Currently MHSB’s product is considers rare since MHSB is widely known as one of the
manufacturing company that has been awarded with GMP and they strictly ensure that their
manufacturing processes are shariah compliance. The product of MHSB is rare since who
really concern about halal and toyyiban products. Other than that, MHSB’s product which is
the non-Muslims show their interests and preferences to use MHSB products, most probably
because of the information that they obtain on halal and toyyiban products which result to
increasing in the trust towards halal and toyyiban products.

3) Can the product be imitated easily?

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For short-term perspective, MHSB’s product is concern about the resources that they own to
imitate since MHSB always plan and strategize on leveraging their core competencies.
MHSB always ensure that all their resources are being use effectively and efficiently. MHSB
understand that human resource is one of the resources that are vital in an organization. In
order to motivate the employees in MHSB, the management prepares attractive
remunerations and benefits to attract and to ensure low employees turnover in MHSB.
Therefore, MHSB’s product are different compare to others competitors for short-term
perspective.

4) Are substitutes readily available?

The substitute for MHSB’s product is a readily available since there is the strategically
equivalent valuable resources or capabilities. Other competitors did to find any way to imitate
or make a substitute for halal and toyyiban product of MHSB.

Therefore, MHSB’s product would be a source of competitive advantage to MHSB in the

short-term perspective due to the above sustainability competitive advantage criteria.

b) Long-term perspective

1) Is the product valuable?

The MHSB’s product is still considers valuable since 2018 it has been awarded with GMP. It
can be shown when the information that they obtain on halal and toyyiban products which
result to increasing in the trust towards halal and toyyiban products. These indicate that
MHSB’s product are valuable in long-term perspective since it has its own patent and loyal
customers.

2) Is the product rare?

In long-term perspective, MHSB’s product is has longer rare since lots of competitors also
produced the halal and toyyiban for the products. Based on case, we can that MHSB is able to
attract many customers. Most of their customers are Muslims, who really concern about halal
and toyyiban products. Even the non-Muslims show their interests and preferences to use

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MHSB products. For MHSB’s product to have sustain competitive advantaged in this
industry, they need to ensure that their product will always unique and differentiate from
other competitor’s product.

3) Can the product be imitated easily?

The MHSB’s product can be imitated easily in the long-term perspective. MHSB also
concern about the resources that they own. They have a few employees in the management
team that plan and strategize on leveraging their core competencies. MHSB always ensure
that all their resources are being use effectively and efficiently. MHSB understand that
human resource is one of the resources that are vital in an organization.

4) Are substitutes readily available?

The substitutes of MHSB’s product are readily available in the long-term perspective. The
competitor will start to think to come out with the same product, even though it may be
impossible for a firm to imitate exactly another firm’s resource but it may be able to
substitute a similar resource that enables it to develop and implement the same product. The
competitor might even produce better product than existing products. Based on the case the
management team that plan and strategize on leveraging their core competencies. MHSB
always ensure that all their resources are being use effectively and efficiently. Another
example is MHSB understand that human resource is one of the resources that are vital in an
organization.

Therefore, MHSB’s product would not be a source of competitive advantage to MHSB in the
long-term perspective due to the above sustainability competitive advantage criteria.

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QUESTION 4

If financial rewards are a vital organizational control mechanism (whether in the form of
salary, bonus, stock options or the like), why is paying people more seldom the most
important factor in attracting and retaining human capital?

Two approaches to attract human capital are:

1) Consider branding as part of recruitment

Branding of the company means the value of the company in the eyes of potential employees
and outsiders. Branding is used as an attraction for potential employees to be interested in
working with the company. Employers who have ‘high employer brand value’ are perceived
by potential employees as more attractive than those with lower employer brand value. It will
attract them because of wanting to acquire the experience and to develop their career by
working with good reputations company. A potential employee’s appraisal of an employer
brand is prompted by factors including their awareness and perceptions of the employer
brand which may be developed through word of mouth, personal experience and marketing
strategies The brand should be promoted with telling people regarding company’s
commitment to an employee-cantered work environment and broadcast the ways that the
organization engages and responds to the interests of employees. Branding also can reduce
cost of recruitment. If the company have a well-known brand, then the company does not
need to spend as much on the recruiting costs. Potential candidates will find the company and
apply the positions naturally.

2) Getting feedback on attraction strategy

Feedback is used to describe the helpful information or criticism about prior action or
behaviour from an individual, communicated to another individual (or a group) who can use
that information to adjust and improve current and future actions and behaviours. Getting

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feedback on attraction strategy is important to find out what works and what doesn't.
Assessing the most successful strategies and matching the cost against actual performance
whether the cost incurred are worth with the actual performance by the employees. Feedbacks
are valuable information to be used to improve the strategies. Unsuccessful strategies should
be stopped to cut the cost as they were not effective in attracting human capital into the
company.

Two approaches to retain human capital are:

1) Recognition and rewards systems

Recognition and rewards means that the company recognizes employees’ works and give
rewards to them accordingly. By recognizing and rewarding them, employees will felt
appreciated and motivated to repeat the behaviour and meet their role description and
objectives. Recognizing the efforts of employees and encouraging their morale results in
increased productivity and decreased resignation rate. It is a documented fact that an
encouraged and dedicated workforce can change the fate of a company. For team
accomplishments, it is important to reward the whole team, otherwise it will create
competition, not cooperation. Still, there are always some team members who give more
effort, and sometimes there are members who coast along on the efforts of others. When the
coasters get the same reward as the doers, resentment builds. Some companies are meeting
this challenge with a double-tiered system of team and individual rewards. What ties it
together is that for individual rewards, the assessors are fellow team members.

2) Set a mission and vision

A mission and vision gives an employee meaning and purpose. It is important to make an
employee feel like they are belong, and their contribution are valued. A clear vision will help
the employees to stay motivated and continued to stay in the company. A clear vision also
helps companies run more efficiently because it keeps everyone on the same page. If the
employees don't know what the company hopes to achieve, they can't help the company
achieve it. Company’s vision must be something the company and its employees believe in,
both intellectually and emotionally. The vision also needs to be a constant focal point. In
order for the vision to be visible to employees everywhere, it needs to be concise and
relatable to every employee at every level.

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