UNIVERSITI TEKNOLOGI MARA

CASE STUDY/2019

COURSE : STRATEGIC MANAGEMENT

COURSE CODE : MGT657
CASE STUDY :2020

NAME: _____________________________________________________

METRIC CARD NO.: __________________________________________

PROGRAMME: _______________________________________________

LECTURER’S NAME: _________________________________________

INSTRUCTIONS: PLEASE ANSWER ALL QUESTIONS AND USE YOUR OWN

PAPERS (10 MARKS EACH).

Supermax eyes high growth

Glove maker Supermax Corp Bhd is set to “grow strongly” next year as it expands
distribution of its own brand manufacturing (OBM) products in India, China, and Japan, said
executive chairman and group managing director Datuk Seri Stanley Thai(P1S1). Only 6% of
its total exports was (Q4-market development) to Asia currently, Thai told Starbiz on the
side-lines of the International Rubber Glove Conference and Exhibition recently(P1S2). The
group is looking to increase the penetration of its gloves in the region as other glove
manufacturers paint a rosy picture (Q1.GOOD issues) glove demand in emerging markets,
with growth seen as high 100% in some countries (P1S3). Japan, the world’s third largest
economy would be a key market for Supermax(P1S4).Over the past 14 years, Supermax have
established a strong distribution network (Q3-integration(forward)) in the Western
Hemisphere, but not in Asia(P1S5).

Thai emphasized that Supermax has a sizeable distribution (GOOD ISSUE) centre in Chicago
and it is the largest and most popular glove brand in Brazil, where its market share stands at
35% to 40%(P2S1). Supermax have a good product, which we market well, and consistent
quality(P2S2).(GOOD ISSUE) Supermax also have spent a lot of money (Q3-market
penetration) on advertising and promotion(P2S3). “In the US, Supermax has been voted the
top 2 (Q1-GOOD ISSUE) most popular brands in the dental industry and laboratory
market(P2S4). We are neck and neck (Q1-GOOD ISSUE) with the other American brands
and are able to compete with them without having to undercut prices,” he said(P2S5).

The group plans to set up its European headquarters in London next year to oversee all its
marketing and distribution activities in the UK and Ireland, as well as manage its European
investments(P3S1). Some 70% of its production is OBM, in contrast to other domestic glove
producers which supply mostly to the original equipment manufacturing market(P3S2). Thai
had previously said profit margins for nitrile gloves, which enjoy a premium to gloves made

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 UNIVERSITI TEKNOLOGI MARA
CASE STUDY/2019

of latex or natural rubber, were headed to single-digit territory amid aggressive capacity
growth in the synthetic rubber glove segment(product development)(P3S3). “Those with high
margins will be hard pressed, as Malaysia is not the only one increasing its glove
capacity(P3S4).

“OBM manufacturers will be the hardest squeezed in terms of pricing(P4S1). Competition

(step C) will only get more intense next year, especially for nitrile,” he said(P4S2).
Supermax’s own capacity expansion would be driven by demand, Thai said(P4S3). “We
don’t depend heavily on the OBM market” (P4S4). RHB Research Institute said in the note
last month that while Supermax’s earnings in the first half were dragged by losses (BAD
ISSUE) resulting from a fire at its factory in Alor Gajah during the fourth quarter of last year,
the affected plant was returning to normal operations(P4S5). The commissioning of new lines
at its plants in Meru, Klang, with capacity coming on stream progressively since August,
would also double Supermax’s nitrile production to 12.3 billion pieces of gloves per annum
from 5.4 billion currently shifting its production mix to 53% nitrile and 47% latex(P4S6).
(PRODUCT DEVELOPMENT)

Adapted from Starbiz, September 2014.

QUESTIONS

1. Explain the issues experienced by Supermax for the past few years. (give 3)

2. Identify and explain any three (3) external factors (chapter 3) social. demographic,
political that influenced Supermax in managing strategically.

Technology-affected
Economy- affected (currency)
Political-affected (
Competition-affected (

3. Examine three (3) management strategies (chapter 5-14 strategies) that contribute
towards the successful performance of Supermax.

4. Develop IFE Matrix (chapter 5) for Supermax with a total of 10 factors.

Strength and weeknesses (do own your own)