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Strategic Management Essays

Describe the company’s background and purpose The Kumpulan Karangkraf is undoubtly the biggest and most successful bumiputra-owned magazine publishers in Malaysia; consists of Karangkraf Company, Alaf 21 and Ultimate Print. Their factory is now the former Ericsson plant that has been taken over. Looking at its expansive 12. 5 acre spread in a peaceful part of Shah Alam and 1,200-strong staff, it is hard to remember that Karangkraf started its business in a humble little shop lot in 1978. But the truth is that founder and CEO Dato’ Hussamuddin bin Hj.
Yaacub was born with a simple dream of interpreting white pages into great opportunities. He had been born in a bookshop, after all; so perhaps publishing was in his blood. Whatever the case, he has certainly proven to any doubters that Malay publications are a hugely profitable enterprise. Almost 30 years ago, long before the age of information technology exploded upon them, this ambitious man organized a small workforce to begin publishing the company’s maiden magazine called Mingguan Kanak-Kanak.
This was soon followed by weekly tabloids Bacaria and Watan as well as magazines Media Hiburan, Remaja and Nona. It was a bold effort for the local publishing market but these magazines became extremely popular and circulation grew in leaps and bounds. This led to the acquisition of a printing press (Ultimate Print Sdn Bhd) that broadened Karangkraf’s capacity to handle the increasing needs of customers by taking on large-scale print jobs.
Thus, although Karangkraf publications are the most popular of the Kumpulan Karangkraf business, Ultimate Print is actually their biggest earner, accounting for up to 70 percent of revenue. 1. 1PURPOSE Dato’ Hussamuddin bin Hj. Yaacub was raised in a bookshop, so he has always loved books and since there weren’t many Malay books or magazines, he felt that a publishing house made perfect sense. It was also his dream since young to become a publisher because he instinctively knew the trade – what people want, what they enjoy to read and so it was a natural thing for him.
It was his early love for reading that inspired him to dive into the world of printing and publishing. Other purposes of the Kumpulan Karangkraf’s are: ? To give priority to customer satisfaction. ? To maintain discipline, politeness and trustworthiness. ? To have teamwork and good communication between all staff. ? To be highly productive and efficient. ? To be informative and skillful. ? Hardworking and conscientious. ? Concern for quality in all aspects and levels. 2. 0Identify the company’s vision, mission, short and long term objectives. . 0. 1Vision statement An established publication and printing firm and distributor of magazines, books and printed materials in South East Asia that meets world quality standards. 2. 0. 2Mission statement Money is not merely the bottom line. Business continually is by emphasizing on a strong foundation in good basic human values and practiced by everyone within the organization. Constantly identifying new publishing opportunities and keeping the business integrity intact. 2. 0. 3Short term objective
Short term objective of Karangkraf is increase sales or distribution of the books, magazines and newspaper and maintain target which is can distribute thousand copies per day. 2. 0. 4Long term objective Long term objectives of Karangkraf are take care welfare employees; keep it strong company business and last long company. Other than that, to be highly productive and efficient, to be informative and skillful and to give priority to customer satisfaction. 2. 1Develop New Mission Statement for the Organization (Comprising all nine elements). 3) We will continue to pursue our marketing and sales activities, (8) build on efforts to strengthen brand equity and distribution channels, improve our operational efficiencies, implement margin enhancing strategies, tightening cost controls and (5) continuous research into improving our merchandise mix, (2) providing better quality products at competitive pricing to (1) satisfy our customer by continuously improving our own designs with special emphasize on quality, durability and comfort to ensure that an in everything we do, (6) we strive to act with honesty, openness, fairness and integrity, and (7) always provide service with a friendly greeting and a smile. (9) We engage in conduct that enhances our corporate reputation and employee’s morale and (4) the next revolution in our retail technology will create the dynamic shopping for the kids’ satisfaction 2. 1. 1Develop New Vision Statement for the Organization To be the world leader in established publication and printing firm and related services. 2. 1. 2Develop Short Term Objectives
In the short run, books, magazines and newspaper sales figures are a key indicator of success, enabling Karangkraf to assess growth and market share performance and compare its progress with that of its competitors. Karangkraf also should be highly productive and efficient and concern for quality in all aspects and level. 3. Develop Long Term Objectives In the longer term, it is also necessary to gain market research information on consumer perceptions. Consumer attitudes constantly change over time. If books, magazines and newspaper is going to maintain its brand leadership, it must be aware of and adapt to these changes. The market never forgives complacency. Karangkraf also should give priority to customer satisfaction and to have teamwork and good communication between all staff. 3. Provide an overview of the company’s management and environment (current news). 3. 1Company’s Management: SBU Organization Chart [pic] Group of Karangkraf Magazine publishes 27 magazine titles and reaches 4 million readers collectively, with magazine titles published monthly, bi monthly and weekly. Mingguan Wanita is the flagship magazine of Group Magazine with a weekly circulation of 160 000 copies. Group magazine is the largest national language (Malay language) magazine publisher. Covering a diverse range of genres from, fashion & lifestyle, education, entertainment, health, religious, travel, interior design as well as other special interest genres, just to name a few.
The magazine segmentation covers the ages of 7 years old all the way through the 40 year old plus readers. Basically most Malaysian has in one time or another been exposed to one of our 27 titles which can be easily found in any newsstand and bookstores throughout Malaysia. Group of Karangkraf Books has been the preferred reading staple for Malaysians from all walks of life for the past 10 years. Currently we have published well over 1000 titles and the reading trend looks very positive in Malaysia that we have to publish even more titles to meet this healthy demand. Our success lies with the fact that we are committed towards nurturing and publishing the best literature by our local writers.
What was once a very fragmented local book industry in Malaysia has now transformed tremendously into burgeoning business due to these local writers. Group Books publishes an average of 20 titles every month and is regarded as f the leading premiere publishing houses in Malaysia. Under Group Books are three main imprints; Alaf 21, Karya Bestari and Buku Prima. Group of Sinar Karangkraf publishes a daily newspaper known as Sinar Harian which is the only 100% hyper local national newspaper in the peninsula. With journalists embedded in districts in each state, Sinar Harian is a community newspaper that caters to the local readers and emphasizes on unbias news reporting.
Sinar Harian hopes to influence positive changes throughout Malaysia’s news scene which will lead to a more fair and just society. Currently there are eight Sinar Harian editions which is Sinar Kelantan, Sinar Terengganu, Sinar Pahang, Sinar KL & Selangor, Sinar Melaka & Negeri Sembilan, Sinar Perak, Sinar Utara and Sinar Johor. Group of Ultimate Printing is the largest commercial printer in Malaysia and prides itself as the number one printing solution provider boasting the latest printing technology and expertise offering its services to multinational companies providing quality and timely service. Grup Percetakan Ultimate provides a wide range of services to meet the needs of today’s very customized orders.
Our service does not end at just the printing service but also extends to the delivery to the desired destination for users. In 2004, Group Printing Ultimate was awarded the ISO: 9001:2000 Quality Management Standards. To date, the majority of hypermarkets in Malaysia are part of Group printing Ultimate’s clientele. Group of Karangkraf Digital is Kumpulan Media Karangkraf technology arm which focuses on the digital business. Having a vast archive of writing materials and photos from magazine, books to newspaper, these resources are currently being consolidated to provide digital reading experience like no other. The constant yearly internet penetration growth has also contributed towards the increase traffic of Karangkraf magazine web and social sites.
This phenomenon has resulted in steady online income growth as Group Digital provides customized advertising platforms for clients. The introduction of new hardware such as tablets, smart phones as well as e-readers is creating new opportunities for the digital division to expand its services. Group Digital also works closely with other third party technology developers to come up with new exciting products to cater the young digital generation. 3. 2Company Environment 3. 2. 1Policies issue Karangkraf practice traditional discipline to ensuring subordinates work by impose strictly  rules and punishment. The fear of punishment works as a deterrent in the mind of the subordinate. Disciplinary policies and penalties should have as it is objective the prevention .
Karangkraf ensure and motivate their employees by impose certain policies as a guidance to achieve objective. For example karangkraf put a memo in each department to give alert to them ,so that they it will lead them to do their job at the best result without doing any mistake and to avoid from punishement. There are several value core value or policies should be practise by employees which : |To give priority to customer satisfaction | |To maintain discipline, politeness and trustworthiness | |To have teamwork and good ommunication between all staff | |To be highly productive and efficient | |To be informative and skillful | |Hardworking and conscientious | |Concern for quality in all aspects and levels | | | |Below are example of memo to motivate karangkraf’s employees: | |[pic][pic][pic] | 2. Culture issue Each organization and firm have different culture in term of their values, beliefs, symbols, , behaviours, visions, norms and working environment. Organizational culture is the workplace environment formulated from the interaction of the employees in the workplace. or define, culture is an observable, powerful force in any organization. Most of worker in Karangkraf are Bumiputera worker.
More than 90% of Bumiputera worker are employed by Karangkraf. However, even though most of the karangkraf ‘s workers were bumiputera but karangkraf did not depending on subsidies from government . The fund raise through debt financing and equity financing offered by conventional bank. “To me, because Karangkraf is the only publishing company of this size that is not owned by government-related or political party-related companies, we felt there was a need for us to produce a truly independent newspaper” Datuk Hishammudin Said. 3. Environmental concern Today, Malaysia faces problems of deforestation, pollution of inland and marine waters, soil and coastal .
Health issues caused by environmental problems such as global warming, pollutions and natural . we hear and read so much about protecting and saving the planet Earth. Therefore, Organization is one of the party that should concerned to protecting environment surrounding Malaysian consumers, perceive environmental issues, and to see whether they become outcome of this is the increased concern for the environment among the public. Karangkraf Environmental Care – Environmental Health bequeath to protect environment and reduce pollution in Malaysia. This program is really important has it is a wake call to all Malaysian from all walks of life to do their bit in conserving and protecting the environment around them.
For Kumpulan Media Karangkraf, contribution towards this cause is via: a) A Green Work Program at Group of Ultimate Printing whereby environment friendly work process is being practiced to ensure a clean working environment and minimal wastage via recycling process b) The magazine divisions is also active in their efforts to spread the green message by co-organizing a variety of programs such as Program of Educator Environmental Concern to educate green awareness among teachers and students. 4. Research and Development Present-day Research and development is of great importance in business as the level of competition, production processes and methods are rapidly increasing . So it’s important to direct research and development (R&D) activities at an early stage towards meeting the needs and requirements of future users in order to meeting specific need of customer, able to take advantage of external opportunities and eliminated external threat. Karangkraf have always invested heavily in R&D and for the past 20 years.
Moreover, Karangkraf have made certain to plough every cent back into the company itself, which keeps strong. Karangkraf currently have 30 titles and hope to launch one or two new titles each year. Now, Karangkraf looking for new categories to break into as want to ensure that all readers are cateres for. Through good of research and development Karangkraf produce three new product this year which is Maskulin , Umpan and Hijabista. [pic][pic][pic] 5. Customer Social Relationship (CSR) With all these monetary successes, Dato’ Hussamuddin realizes the importance to give back to the people who has made Karangkraf what it is today. That is Karangkraf Media Group is are very committed owards this positive cause and have created a very comprehensive CSR programme to ensure that the community around will benefit from actions for the betterment of tomorrow’s generation in terms of social as well as their economical well because of its simple yet strong meaning which is to care. Karangkraf Peduli is divided into 5 core principles i. Karangkraf Care Duafa – Defend Fortunately, Building Hope (Karangkraf Peduli Duafa – Membela Nasib, Membina Harapan) The creation of “Yayasan Nur “in 2002 is to being Karangkraf Peduli is a CSR program that was initiated by Kumpulan Media Karangkraf’s Managing Director Dato Husammuddin Yaacob in 2009. This is too streamline all the CSR programs which has been ongoing for the group since year 2002.
This is to ensure a more systematic approach is adopted to ensure better coordination and execution since the group’s operations has increased tremendously over the years. The word ‘PEDULI” was chosen for this CSR program ensure the plight of the poverty stricken is aided in the form of financial as well as physical goods. The segment that we emphasize in aiding are the single mothers as well school children. Yayasan Nur also organizes free skills classes (entrepreneurship, handicraft, etc) to ensure the women are given the opportunity to upgrade themselves in terms of knowledge to better face the world in sustaining their families. As of 2101, Yayasan Nur has raised approximately close to RM250,000 since its inception. The source for the funds are from: ) Direct donation from Kumpulan Media Karangkraf b) Royalty from sale of each Majalah Nur (A product of Grup Majalah Karangkraf) at 10cents from cover price c) Donations from Yayasan Nur members ii. Karangkraf Care Consensus – Strengthening the Unity Nations (Karangkraf Peduli Muafakat – Memantapkan Perpaduan Bangsa) Being a company that fully supports the 1 Malaysia vision of our Prime Minister in creating a harmonious and united nation, we have organized a variety of programs to ensure this vision is realized. Our programs can be divided on those organized by our newspaper, Sinar Harian as well as our magazines.
As Sinar Harian is synonymous of being a community newspaper, the programs which we organize reaches the hearts of Malaysians everywhere. Among the monthly programs which we constantly organize are to enhance the spirit of 1 Malaysia are: a) Program Jelajah Desa: Visiting the kampongs in the heartlands of Malaysia to create Better rapport via dialogues. b) Pesta Sukan Kampong: A social programs with villagers to enhance the spirit of “Gotong Royong”  c) [email protected]: Visiting offices throughout Malaysia and creating fun activities for all races d) [email protected] Malam: A program that provides direct interaction to all races iii) Karangkraf Care-Nurturing Iqra’- Reading and Lifelong Education Karangkraf Peduli Iqra’- Membudaya Pembacaan Dan Pendidikan Sepanjang Hayat) One of the measures taken in terms of aiding the society in education is by creating an education scholarship fund. The Dana Pendididkan Karangkraf was initiated in 2008. Each year Kumpulan Media Karangkraf allocates RM2Million for the scholarship fund (RM1Million per college). Approximately 80 students are sponsored each year to further their tertiary education either in Segi College or University Tun Abdul Razak. Another approach that we adopt is by donating approximately 5,000 copies of magazines to NGOs, associations as well as schools every month for activities purpose iv) Karangkraf Environmental Care – Environmental Health bequeath Karangkraf Peduli Alam – Mewariskan Persekitaran Sihat) This program is really important has it is a wake call to all Malaysian from all walks of life to do their bit in conserving and protecting the environment around them. For Kumpulan Media Karangkraf, our contribution towards this cause is via: a) A Green Work Program at Kumpulan Percetakan Ultimate whereby environment friendly work process is being practiced to ensure a clean working environment and minimal wastage via recycling process b) The magazine divisions is also active in their efforts to spread the green message by co-organizing a variety of programs such as Program Warga Pendidik Prihatin Alam to educate green awareness among teachers and students ) Karangkraf care Honest – Continuous Fighting Corruption (Karangkraf Karangkraf Peduli Jujur – Melawan Rasuah Secara Berterusan) Corruption is something that is filthy! Those who practices it no matter if you are the giver or receiver, action must be taken to ensure all that are involved is punished! We at Kumpulan Media Karangkraf is strongly against corruption, that is why we emphasize on the need to be honest (JUJUR). We have allocated pages in our magazines and newspapers in the form of advertisements and articles to combat these issues with the cooperation of Suruhjaya Pencegahan Rasuah (SPR) Malaysia. 2. Current Issue ISSUE 1: Karangkraf expects new magazines to boost ad revenue
Current issue of Karangkraf is expects new magazines to boost ad revenue published by The Star online at Saturday April 14, 2012 and the writer is Eugene Mahalingam. This articles were discussed of : Karangkraf focus on market segmentation Market segmentation referring to the aggregating of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action. Market segmentation enables companies to target different categories of consumers who perceive the full value of certain products and services differently from one another. Organization should expand their business into sufficient size market in the growth potential area.
According to this articles, Karangkraf published its magazine into the different type of magazine into different categories of customer which is : a. Maskulin (a magazine for car enthusiasts) b. Umpan (a fishing magazine) c. Hijabista (a magazine targeted at contemporary Muslim women) i. Karangkraf gain higher revenue According to Nielsen, advertising spending in magazines in Malaysia fell 3. 7% last year. However, even though print advertising is slowly dropping, but Karangkraf success to eliminated the treat. The company can certainly attest to this, having recorded a RM5mil increase in advertising revenue for its print publications last year.
Kumpulan Media Karangkraf  believes that demand for print will always remain strong with the right products. In terms of market share, Firdaus says Karangkraf commanded about 50% of the total magazine market. ii. Facing higher competition Apart from coming up with new magazines, Karangkraf had to come up with other means of staying ahead of the competition. “We have to stay competitive and need to do a lot of promotions. You have to stay visible in the market,” Firdaus Kammarudin said. Adding that Karangkraf regularly participated at book fairs and carnivals to promote their products as well as their writers. iii. Enhance new product development
Product development is a broad field of endeavour dealing with the design, creation, and marketing of new products. ,with new or different characteristics that offer new or additional benefits to the customer. There are three of new magazine product produce by karangkraf which is : a) Auto Maskulin (a magazine for car enthusiasts) Karangkraf was still awaiting feedback on how well Auto Maskulin was being received. “It’s a car magazine, but we’re targeting the masses, namely owners with vehicles priced below RM150,000. We want to be realistic. Those who own BMWs and Ferraris will usually go for Top Gear. ” Said Karangkraf’s publishing executive director Firdaus Hussamuddin. b) Umpan (a fishing magazine)
She says Umpan has been very well received. -“We did thorough research before launching the new magazines. Umpan, despite being a niche, was 90% sold when it was first launched,” Firdaus says. c) Hijabista (a magazine targeted at contemporary Muslim women) “Hijabista will be the first of its kind and is mainly for those between 21 and 35 years old. Once they’re over 40, they can’t be changed any more,” Firdaus enthuses. d) Produce online product to meet customer preferences Most youths prefer to go online these days and many of them don’t even read the newspapers. But that’s why we have to constantly innovate and produce content that people like.
Karangkraf need to have more products online so as to be able to attract the younger generation of readers. JK is karangkraf digital division (Grup Digital Karangkraf). It is only a year old and still new. According to this articles that are several new product online plan by karangraf which is: a. Pa & Ma (parenting) magazine recently went digital on the iPad and will soon be available on Android devices b. Nona magazine will also be making the transition to digital c. Karangkraf going for e-books in the near future ISSUE 2: Karangkraf joins fight against corruption Published by The Star online on Monday May 28, 2012 Accurate and transparent manner in publishing
Media information is play important role to publish accurate information because the information separated will change human value,perspection and belief. Therefore karangkraf ensure the information publish is against corruption and fair in publishing. The Malaysian Anti-Corruption Commission (MACC) has recognised Kumpulan Media Ka-rangkraf as an ally in the ongoing war against corruption at the Rasuah dan Maruah seminar held recently. There is some action taken by karangkraf to fight against corruption which is: a. MACC chief commissioner Datuk Seri Abu Kassim Mohamed said the media group would provide updates to the public on the Commission’s developments in the fight against graft through its publications in an accurate and transparent manner. b.
MACC also acknowledged the support of the other participating non-governmental organisations (NGOs) which attended the seminar. c. NGOs cooperated with the MACC by discreetly providing the Commission with information for its investigations. He said discretion was important for investigations to be carried out without alerting the suspects. ISSUE 3: Carnival Karangkraf 2012 Carnival Karangkraf 2012 that lasted for three days from 27 to 29 January this year, the carnival was lauched in new building parking Karangkraf Media Group is flooded with more than 300,000 visitors. [pic] i. Market penetration Strategy Karangkraf Carnival 2012 is one of the marketing efforts lauched by karangkraf.
This is one of the strategies to promote the company new moto which is “Membarakan Jiwa dan Minda” . It is successfully incorporated into the souls of all faithful Karangkraf readers. The customer served with variety forms of promotion that promises great prizes for every purchase magazine gifts including vouchers REMAJA. Variety food, personal care products and lucrative prizes for those who subscribe for three months, six months to a year is provided as a token of appreciation. In addition, Karangkraf also invited popular artist such as: Aliff Aziz , Izara Aisyah , Siti Nurhaliza, Aaron Aziz, Nur Fazura, Dynas and others. 4. An analysis of its external and internal audit. 4. 1. INTERNAL AUDIT 1. Marketing The maiden magazine published under Karangkraf was Mingguan Kanak-Kanak, and this was soon followed by with weekly tabloids Bacaria, Watan, Media Hiburan and later Seri Dewi & Keluarga, Remaja and Nona. They also publishes the newspaper Sinar Harian while the books division produces books under Alaf 21, Karya Bestari, Buku Prima and Oasis Buku imprints. Today, Karangkraf boasts 30 titles including Pesona Pengantin, Nur, MIDI, Rasa, Dara. com, Fokus SPM, Bintang Kecil, Majalah PC, Maskulin and Laman Impiana, to name a few. This diverse range spans genders, age groups and even social standing – a Malaysian marketer’s dream.
Furthermore, Karangkraf was recognised by the Malaysian Book of Records for having the largest number of Malay publications and has also won numerous awards for its popular publications. Plus, many small entrepreneurs, such as local cosmetic brands, have become multimillionaires by using Karangkraf magazine to reach their target audience, and while they’ve moved into TVCs and radio ads now, they still advertise with Karangkraf. They also have their online version of Sinar Harian, but it is not their emphasis. They have found that Malaysians still prefer the physical newspaper. 2. Finance The Kumpulan Karangkraf has annual sales of RM400 million. The company has experienced continuous yearly growth of 20% and continues to expand whilst keeping abreast with modern lifestyles, market trends and consumer demands.
Kumpulan Karangkraf is fully bumiputera owned company where the authorized capital is RM10 Million and the paid-up capital is RM7 Million. 3. Production/Operations The process to produce a magazine is not easy. It involves several complex and long process where it involves the process of editorial (involve the editor, reporter and other), graphic (involve designer, photographer and other) and printing. They do everything in-house (printing, distribution, etc) which make the other competitors cannot compete with them in terms of costs and such. 4. Research and Development Kumpulan Karangkraf has always invested heavily in R&D and for the past 20 years, they have made certain to plough every cent back into the company itself, which keeps them strong.
They currently have 30 titles and they hope to launch one or two new titles each year. They are now looking for new categories to break into as they want to ensure that all readers are catered for. 5. Management Karangkraf Company has about 1,400 employees. Their employees are dedicated; work as a team, honest, and sincere. In addition, the Karangkraf management very appreciates their employees. Investment in developing excellent staff is also being considered as important. 6. Management Information Systems Vital information that could improve business decision making was often kept within departments. Key staff members, who make vital business decisions, often did not have access to this information.
But then the company implemented Microsoft Office SharePoint Portal Server 2003 with Microsoft Office Professional Edition 2003. This resulted in information working environment across the company. 1. EXTERNAL AUDIT 1. Economic Forces Dato’ Hussamuddin bin Hj. Yaacub started his business about 30 years ago as Malay publishing was nearly non-existent. The Malays were also not very interested in reading. But he happened to come at the right time. When he produced his books and magazines, it was very popular. So his timing was good and he could ride on the wave – the economy was better, people were more interested in learning and it all came together perfectly.
He was also much focused – he started with books and then moved into magazines. Despite the four economic crises that they have encountered, they at Karangkraf found ways to make it work to their advantage. For example, when money is short, people spend less on things like movies and shopping, but books and magazines are still popular because they are relatively cheap. 2. Social, Cultural, Demographic and Natural Environment Forces Shah Alam industrial area is dominated by foreign companies known as Toyota, Volvo and others. Since Karangkraf also has buildings and factories there, it was shown that the Malays could be successful in business.
In July 2006, Kumpulan Karangkraf took a brave step forward by publishing Sinar Harian, a community based daily newspaper focusing only on Kelantan and Terengganu. It is as if it has brought a new light to the East Coast community. Sinar Harian then conquered Pahang in June 2007. Beginning September 2007, Sinar Harian expanded its horizons to Selangor and Kuala Lumpur, followed by Melaka and Negeri Sembilan in June 2008. As a company that never rests on its laurels, Karangkraf will not stop there. This humble community newspaper plans to conquer Penang, Kedah and Perlis in October and Perak in November. 3. Political, Government, and Legal Forces Karangkraf is the only publishing company that is not owned by government-related or political party-related companies.
Only 5% of the Karangkraf project is a project from the government. Meaning, many other companies use the services of Ultimate Karangkraf and Printing to print brochures, books and others. This means that Karangkraf can be successful without subsidies and government assistance. In addition, KarangKraf never face dilemmas about what to publish because they believe in self-censorship. That is what they practice and it works. In this manner, they have avoided having any problems with either side of the fence. Their Sinar Harian newspaper differs greatly from other mainstream papers as it reports the voice of the people, who were previously rather neglected by the mass media.
Sinar Harian is neutral, transparent and always attentive to any problems or issues of the people that need to be highlighted to the relevant authorities in order to reach positive outcomes. 4. Technological Forces Grup Digital is Kumpulan Media Karangkraf technology arm which focuses on the new media business. Having a vast archive of writing materials from magazine to books to newspaper, these resources are currently being consolidated to provide an online reading experience like no other. The introduction of new hardwares such as tablets, smartphones as well as e-readers is creating new opportunities for the digital division to expand its services.
Grup Digital also works closely with other third party technology developers to come with exciting new products to cater for the digital generation. 5. Competitive Forces When they started their business about 30 years ago, there was only Dewan Bahasa dan Pustaka and a few small publishers of Malay books. There was never as much competition for them as the English publications, where they would have to compete with international publishers who often have similar publications. They are very clearly ahead of their competitors. In terms of magazines, they control about 60 to 70 percent of the Malay market. In terms of books, they do not publish educational books, but other than that (general books and fiction) they are definitely very strong. 5. Provide an analysis of the company’s SWOT (use any matrix). STRENGTHS • The strengths of the Karangkraf Company are it has a strong brand name which is everyone knows and noticed it. It is because this company has produced variety sources of reading. Other than that, this company also get high profit obtain per day and distribute its product in peninsular Malaysia without Sabah and Sarawak. Moreover, Karangkraf’s strength is they produce product within specific target market which is children, teenager and adults. Furthermore, Karangkraf was recognised by the Malaysian Book of Records for having the largest number of Malay publications and has also won numerous awards for its popular publications.
The company has experienced continuous yearly growth of 20% and continues to expand whilst keeping abreast with modern lifestyles, market trends and consumer demands. Thus, Kumpulan Karangkraf stands as a publishing force to be reckoned with and now holds the proud mantle of leader in a challenging and demanding industry. Other than that, Karangkraf produces its product to the diversification places and services. For example, Sinar Harian has newspaper for every country. Lastly, higher policies in company to act fairness and justice. For example, company should train their employees to distribute accurate information because it can avoid bad image for the company.
WEAKNESSES • All company also have their weakness, so the Karangkraf Company’s weakness are this company is not of the strong company because unlisted in Bursa Saham and it also not get subsidy from government. Other than that, this company also lack of advertising and people usually not noticed at all. Moreover, high cost and high maintenance of product if equipment damaged, it is because if one of their machine damaged there have to bear a high loss because their production will disturb. Karangkraf produce 100,000 newspaper copies per day which means if the agent returned back the product because did not sold, they should bear loss. OPPORTUNITIES Karangkraf’s opportunities are when during recessions, they expand business because other competitors at that time were down, but Karangkraf take these opportunities to expend their business so this is the strategy Karangkraf to success. For example, when money is short, people spend less on things like movies and shopping, but books and magazines are still popular because they are relatively cheap. Also, there was never as much competition for us as the English publications, where we would have to compete with international publishers who often have similar publications. Other than that, lack of competitors which is at that time only two competitors that available and having their independence company because they do not depend on government. Moreover, the opportunities that Karangkraf has are they produced the product that all age levels can buy and read the material.
Moreover, increase number of foreigner in Malaysia also can give the opportunities to the Karangkraf , besides can reduce cost to hire the worker it can rise up workforce in the company. THREATS • Threats for the Karangkraf Company are to compete between international and local company. As we know, international company is hard to challenge in terms of their product, quality and capital, but they still can compete between them. Other than that, they have two competitors that they compete. Karangkraf was lucky [when they started this business about 30 years ago] as Malay publishing was nearly non-existent. There was only Dewan Bahasa dan Pustaka and a few small publishers of Malay books. The Malays were also not very interested in reading. But Karangkraf come at the right time.
When they produced books and magazines, it was very popular. So their timing was good the economy was better, people were more interested in learning and it all came together perfectly. Another threat for the Karangkraf Company is lack of technology in Malaysia. As we know Karangkraf company is a publication and printing firm, so they should use a high quality brand of the machine so that it can produce more copies per day, so they should import machine from foreign country . However, Karangkraf do all the strategy and find opportunities to get a place in the market. 5. 1MATCHING KEY EXTERNAL AND INTERNAL FACTORS TO FORMULATE ALTERNATIVE STRATEGIES. Key internal Factor |Key External Factor |Resultant Strategy | |Strong Brands Name |+ Can be a well known company in the future |= Increase sale and distribute | |(SO) | |more product | |Higher policies in company to act fairness and justice |+ Political issue |= Distribute accurate information on | |(internal strength ) (ST) |(external threat) |citizen not based on their middleman | |Lack of capital opportunity |+ Increase number of foreigner in Malaysia. |= Hire worker from Vietnam and Myanmar| |(internal weakness) |(external opportunity) |to reduce cost. |(WO) | | | |Lack of technology + |Lack of technology in Malaysia |= Buy machine from NST when company | |(Internal weakness) |(external threat) |facing machine breakdown | |(WT) | | | 5. 3EFE MATRIX FOR A LOCAL THREAT KARANGKRAF COMPANY Key External Factors | Weight | Rating | weighted score | |Opportunities | | | | |1. During recessions, expand business | 0. 10 | 4 | 0. 40 | |2. Lack of competitors | 0. 07 | 3 | 0. 21 | |3. Having their independences company |0. 05 |3 |0. 15 | |4. All age levels can buy this product |0. 4 |2 |0. 08 | |5. Increase number of foreigner in Malaysia |0. 04 |2 |0. 08 | |6. Strong financial position |0. 11 |4 |0. 44 | |7. Increase standard of living among Malaysian |0. 08 |3 |0. 24 | |8. Growing Malaysia GDP |0. 10 |2 |0. 0 | |Threats | | | | |1. Threats between international and local company | 0. 12 | 4 | 0. 48 | |2. Downturn economy condition |0. 12 |4 |0. 48 | |3. Has two competitor to challenge |0. 08 |2 |0. 16 | |4. Political issue |0. 09 |3 | 0. 7 | |TOTAL |1. 00 | | 3. 19 | | | | | | |Key Internal Factors | Weight | Rating | Weighted score | |Strengths | | | | |1. Strong brands name |0. 5 |3 |0. 45 | |2. High profit obtain per day |0. 10 |4 |0. 4 | |3. Distribute product in peninsular Malaysia |0. 08 |3 |0. 24 | |4. Specific target market |0. 06 |2 |0. 12 | |5. Promote Malay Publication |0. 07 |3 |0. 1 | |6. Diversification place and services |0. 05 |2 |0. 10 | |Weaknesses | | | | |1. It is not of the strong company because unlisted in Bursa Saham. |0. 11 |3 |0. 33 | |2. Not get subsidy from government |0. 12 |4 |0. 48 | |3.
Lack of advertising |0. 04 |2 |0. 08 | |4. High maintenance of product if equipment damaged |0. 10 |3 |0. 3 | |5. Incurred loss if product has been returned |0. 05 |2 |0. 10 | |6. Lack of technology |0. 07 |3 |0. 21 | |Total |1. 0 | |3. 02 | 5. 4Competitor of Karangkraf | Oxford Fajar Sdn. Bhd |[p| | |ic| |BACKGROUND |] | |Oxford Fajar Sdn. Bhd a subsidiary of OUP, is one of the oldest publishing houses in Malaysia. Established in 1969, it has grown to become one of the largest | | |publishers in Malaysia today with its own custom-built office and warehouse in Shah Alam and representatives in every state. | |Like other OUP branches throughout the world, Oxford Fajar propagates the liberal objectives of Oxford University-to further education, learning, and cultural | | |excellence, through publication, and it does so in a fashion that reflects the specific needs of the country that it serves. | | |Besides managing its own extensive local publishing programmed of books for different subjects in a variety of languages, from pre-school to tertiary, Oxford Fajar | | |markets and distributes Oxford titles imported from the UK and the USA. Committed to upholding its mission statement ‘To be the first-choice publisher of the best | | |educational materials in Malaysia’, Oxford Fajar has made substantial investments in its editorial resources, production technology, and design facilities to ensure | | |that its books reflect the Oxford tradition of excellence. Oxford Fajar has a representative office in Singapore. | | | | | | | | | | | | | |  | | | | | SWOT OF THE COMPANY OXFORD FAJAR STRENGTHS Oxford Fajar is one of the most successful publishers in Malaysia with an established reputation for quality, authority, and integrity. It publishes 300 titles a year in a variety of languages (Malay, English, Chinese, and Tamil) for different market sectors from pre-school to tertiary.
Its diverse publishing programmed includes educational books for schools and colleges, dictionaries, and academic and trade books. Oxford Fajar is the market leader in many sectors and categories of publishing. Other than that, Oxford Fajar propagates the liberal objectives of Oxford University-to further education, learning, and cultural excellence, through publication, and it does so in a fashion that reflects the specific needs of the country that it serves and Oxford Fajar also has a representative office in Singapore. Weakness The weakness of Oxford Fajar is lack of technology and the modern equipment. Other than that this company is not a printing firm but a publishing firm.
Oxford Fajar Bakti is a firm that only publish education book such as dictionary, textbook, children’s encyclopedia, ELT dictionaries, English-Malay dictionaries and others so it is no attracted customer to buy this product. Opportunities Oxford Fajar Sdh Bhd. is the subsidiary of OXFORD UNIVERSITY PRESS, which is One of the oldest and finest of publishers. We are one of Malaysia’s leading publishers, committed to the liberal objectives of OUP—to further education, learning, and cultural excellence through publishing. Moreover, they place great emphasis on recruiting quality staff, as well as on training and staff development. Threats The threats for the Oxford Fajar Sdh.
Bhd are when the economic downturn of the late 70s and 80s and the Asian economic crisis of the 90s revealed how vulnerable we were to global economic changes. Textbook publishing and examination guides alone were not enough. OUP had to move up the value chain (publishing atlases, children’s encyclopedia, ELT dictionaries, English-Malay dictionaries) and selling more OUP and ABRSM publications. Moreover, the publishing pattern in Malaysia was changing rapidly and OUP KL had to compete with local and foreign publishing houses. 6. 1Identify alternatives strategies and choices. The Kumpulan Media Karangkraf is already makes divisions on their management of product.
The divisions are Grup Majalah Karangkraf, Grup Buku Karangkraf, Grup Percetakan Ultimate, Grup Sinar Harian, and Grup Digital Karangkraf. The specified strategy that the company uses first is product development. Product development strategy means that seeking increased sales by improving present product or services or developing new ones. Product development usually entails large research and development expenditures. Earlier of this year, this company launched Auto Maskulin (a magazine for car enthusiasts) and Umpan (a fishing magazine). Later this month, Karangkraf will be launching Hijabista, a magazine targeted at contemporary Muslim women. They believe that there was a need to have more products so as to be able to attract the younger generation of readers.
This company also believes that the new magazine will boost ad revenue. With a product development strategy, they have the advantage of understanding the business and of knowing what the industry opportunities and threats are, yet a number of related acquisitions fail to provide the benefits or returns originally predicted. Second strategy is Product Segmentation Strategy. A market segmentation strategy is a method of creating products specifically for target markets. Product segmentation strategy refers to the design of the product itself. Based on the Kumpulan Media Karangkraf, they applied this strategy because their entire products have their own segmentation of customer.
The segmentation of the product is for women segment, youth segment, education segment, male segment, entertainment & humor segment, decor segment, family segment, general interest segment, travel & lifestyle segment, and daily segment. A company performs a product differentiation strategy to distinguish a product in one market segment from competitors’ products, as well as its own products available in other market segments. Third strategy is Market Development Strategy. Market development involves introducing present products or services into new geographic areas. As we can see in July 2006, Kumpulan Karangkraf took a brave step forward by publishing Sinar Harian, a community based daily newspaper focusing only on Kelantan and Terengganu.
It is as if it has brought a new light to the East Coast community. Sinar Harian then conquered Pahang in June 2007. This newspaper differs greatly from other mainstream papers as it reports the voice of the people, who were previo usly rather neglected by the mass media. Beginning September 2007, Sinar Harian expanded its horizons to Selangor and Kuala Lumpur, followed by Melaka and Negeri Sembilan in June 2008. As a company that never rests on its laurels, Karangkraf will not stop there. This humble community newspaper plans to conquer Penang, Kedah and Perlis in October and Perak in November. Now, Sinar Harian are available in Peninsular Malaysia trough the step of Market Development Strategy.
Forth strategy that the company uses is Market Penetration Strategy. The advantages of the company when using this strategy is it will increase the market share for present products. Furthermore, it will seek for more potential customers of the product. However, there also have disadvantages when the company implements the strategy. First is it incurs a higher cost and second is the company will cannot survive in new market. For this company, they implement this strategy for launch their Karangkraf Carnival 2012. Karangkraf spends thousands on the carnival to attract their customer in reading culture campaign. 6. 3Competitive Profile Matrix (CPM) |Karangkraf Media Group |Utusan Group |Oxford Fajar Sdn. Bhd | |Key Success |Weight |Rating |Weighted Score |Rating |Weighted Score |Rating |Weighted Score | |Factors | | | | | | | | |Financial Position |0. 08 |4 |0. 32 |3 |0. 24 |3 |0. 24 | |Advertising |0. 12 |2 |0. 24 |3 |0. 36 |2 |0. 4 | |Market Share |0. 12 |3 |0. 36 |3 |0. 36 |3 |0. 36 | |Brand Image |0. 10 |4 |0. 40 |3 |0. 40 |4 |0. 40 | |Customer Loyalty |0. 10 |4 |0. 40 |3 |0. 30 |2 |0. 20 | |Product Quality |0. 12 |4 |0. 48 |3 |0. 36 |4 |0. 48 | |Product Range |0. 08 |3 |0. 24 |2 |0. 16 |3 |0. 4 | |Distribution |0. 10 |3 |0. 30 |3 |0. 30 |4 |0. 40 | |Price Competition |0. 08 |4 |0. 32 |3 |0. 24 |2 |0. 16 | |Geographical |0. 10 |3 |0. 30 |3 |0. 30 |4 |0. 40 | |Expansion | | | | | | | | |Total Score |1. 00 | |3. 36 | |3. 2 | |3. 12 | The competitiveness of a company can be accessed on the basis of its general strengths rating. If the dissimilarities among firm’s overall ratings and the points of lower rated rival is greater than the firm have greater net competitive advantage. Alternatively, if the dissimilarity among a firm’s overall rating and the points of higher rated rivals is larger than the company has net competitive disadvantage. From the above example, CPM matrix demonstrates that the Karangkraf Media Group is the market leaders and dominates its rival with highest points of 3. 36. Oxford Fajar Sdn. Bhd is the runner up with 3. 2 and Utusan Group is the weakest rival among these three with the score of 3. 02. This matrix also shows that Karangkraf Media Group is strong in all aspects of rivalry and has strong position in the market place. 6. 5Quantitative Strategic Planning (QSPM) |Key Factors |Weight |Product Development |Market Penetration | |Opportunities | |AS |TS |AS |TS | |1 |Strong financial position |0. 08 |4 |0. 32 |3 |0. 4 | |2 |Higher Standard of Living Among Malaysians |0. 05 |2 |0. 10 |1 |0. 05 | |3 |Growing Malaysia’s GDP. |0. 05 |3 |0. 15 |1 |0. 05 | |4 |Increase number of foreigner in Malaysia |0. 10 |1 |0. 10 |2 |0. 20 | |5 |During recessions expand business |0. 10 |3 |0. 30 |3 |0. 30 | |6 |Government encourage reading campaign |0. 1 |2 |0. 02 |3 |0. 03 | |Threats | | | | | | |1 |Downturn economic condition |0. 03 |3 |0. 09 |2 |0. 06 | |2 |Competitors |0. 05 |3 |0. 15 |3 |0. 15 | |3 |Political Issue |0. 04 |1 |0. 04 |3 |0. 2 | |Strengths | | | | | | |1 |High profit |0. 10 |3 |0. 30 |2 |0. 20 | |2 |Specific target market |0. 10 |4 |0. 40 |3 |0. 30 | |3 |Promote malay publication |0. 09 |2 |0. 18 |4 |0. 36 | |4 |Diversification place and service |0. 04 |1 |0. 04 |3 |0. 2 | |Weaknessess | | | | | | |1 |Lack of technology |0. 05 |2 |0. 10 |1 |0. 05 | |2 |Lack of advertising |0. 03 |1 |0. 03 |1 |0. 03 | |3 |High maintenance of product if equipment damage |0. 06 |3 |0. 18 |2 |0. 12 | | |Focusing too much on cost efficiency | | | | | | |4 | |0. 02 |2 |0. 4 |4 |0. 08 | | | |1. 00 | |2. 54 | |2. 46 | 7. 0Identify the critical risks and contingencies facing the company (issues). 7. 1. 1 Political risks Sinar Harian is the only 100% regional (State) newspaper in the Peninsula. The information and news distributed should be fair and neutral and considering the new political environment. Political issue facing by Malaysia caused some of newspaper might published information to support particular party. Some people were tired of all the propaganda in the newspapers.
Many offers have been received for karangkraf to become public-listed or bought by large corporations or political parties, but Dato’ Hushamuddin and his partners have always resisted because they relish having their independence and freedom, and they recognize that it is part of why Karangkraf has been such a runaway success. It certainly doesn’t hurt that this giant publishing house is helmed by a man who loves to keep things simple and steadfastly maintains a “no frills” family atmosphere. To solve political risk problem, Sinar Harian as a truly grassroots and community paper do not just focus on the stories of the leaders, but of the rakyat too. Karangkraf is the only publishing company of this size that is not owned by government-related or political party-related companies. Therefore, karangkraf produce a truly independent newspaper. Karangkraf practice Karangkraf Peduli which is divided into 5 core principles.
One of the core principles is Karangkraf Care Honest – Continuous Fighting Corruption, action must be taken to ensure all that are involved is punished. Kumpulan Media Karangkraf is strongly against corruption, which is why emphasizing on the need to be honest (JUJUR). karangkraf allocated pages in our magazines and newspapers in the form of advertisements and articles to combat these issues with the cooperation of Suruhjaya Pencegahan Rasuah (SPR) Malaysia. “We haven’t face dilemmas to publish politics issues because we believe in self-censorship. That is what we practice and it works. In this manner, we have avoided having any problems with either side of the fence. Politics can be left to the politicians – that’s their job, after all! ” said Datuk Hussamuddin Yaacub. 7. 1. 2Economic risks
In 2007 Malaysia facing economic crisis which is lead to the unemployment increase,interest rate increase,price of good and services increase and money supplier in the market is higher. Karangkraf encountered economic crisis and found ways to make it work as advantage. During economic downturn Karangkraf take opportunity to expand their business. For example, when money is short, people spend less on things like movies and shopping, but books and magazines are still popular because they are relatively cheap. Also, there was never as much competition for us as the English publications, where we would have to compete with international publishers who often have similar publications. 7. 1. 3Technologies risks
Lack of technologies advancement in Malaysia caused Karangkraf using technological innovation and has to spend a lot of money imported product machine from abroad in order to introduce some advanced technology, high efficiency, and sets of high precision production line. For example: In 2007,Karangkraf encountered machine breakdown problem and need to stop the operation for a day . Karangkraf can produce 80,000 pieces for Sinar Harian newspaper per day . the sale price for a newspaper is RM 1. 20. Karangkraf facing losses of RM 96,000 per day . The problem is Karangkraf difficult to buy the machine immediately from its supplier,It is because supplier of Machine was imported from international company which is Hybrid German.
Therefore, Karangkraf bought the machine from The Star to continue the operation, which it is one of company publishing newspaper . Company should achieve highest sale for long run . However,short term problem facing,would be impact financial cash flow and slow down sale of Karangkraf . 4. Social, Demographic and Culture risks When Karangkraf started business about 30 years ago, not many competitor publishing books in Malaysia and it is nearly non-existent. There was only Dewan Bahasa dan Pustaka and a few small publishers of Malay books. The Malays were also not very interested in reading. Culture of Malaysians people not interested in reading books is one of the risk and contingencies for Karangkraf to enter into the publishing books industry.
Karangkraf take risks to enter into unpopular industry and publish books across Malaysia to create interest of Malays in reading books. However,Karangkraf was quite lucky ,when karangkraf started business about 30 years ,There was only Dewan Bahasa dan Pustaka and a few small publishers of Malay books. Furthermore, When Karangkraf produced books and magazines, it was very popular. So Karangkraf timing was good and could ride on the wave – the economy was better, people were more interested in learning and it all came together perfectly. 7. 1. 5Higher Competition Competition are constantly encourages institutions and companies to take the risks necessary for innovation and efficiency. Companies in Malaysia compete each other to be a strong and good reputation.
Karangkraf has to survive in the competitive market . Karangkraf have to facing competition from several publishing company such as: Pertubuhan Berita Nasional Malaysia, New straits time, The star and Dewan Bahasa dan Pustaka. However, Karangkraf are very clearly ahead of their competitors. In terms of magazines, Karangkraf control about 60 to 70 percent of the [Malay] market. In terms of books, do not publish educational books, but other than that (general books and fiction) Karangkraf are definitely very strong. On a related note, Karangkraf did try to branch into English publications a while back, but realised that it just wasn’t the right fit for karangkraf .
The entire concept is different with English publications as compared to Malay because English is much more advertisement-based while Malay magazines are circulation-based. So in terms of getting the ads, it is quite a struggle . As a result, Karangkraf decided it was not worthwhile. Karangkraf just focus in certain niche, which is in Malay publications; that is Karangkraf strength and will continue to capitalize on that area. 8. 1Suggestion and recommendation For suggestion and recommendation, Karangkraf Media Group should enhance the advertising of their company through the product and their business even though their product already knows in the market.
The Karangkraf Media Group also need to integrates with other companies, acquisition of potential competitor businesses, innovation in branding and aggressive marketing strategy that can bring long term profitability. As the conclusion, The Karangkraf Media Group has a very rich history and spread over the peninsular Malaysia, the study in this report shows that Competitive Profile Matrix tells us that Karangkraf Media Group still lead to the strong position in the market. The Karangkraf Media Group has a strong competitive position in the market with rapid growth. It needs to use its internal strengths to develop a market penetration and product development strategy.

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