One of the successful supermarkets in Singapore is Sheng Siong, established in 1985 by Lim brothers (Hock Eng, Hock Chee and Hock Leng). Since the early years, Sheng Siong set the mark by selling quality and low quantity product. From a daily turnover of S$3,000, it grew to S$19,000 within short years of being in business. Sheng Siong opened second outlet in Bedok in 1987 and third store in Woodlands followed in 1995 and sales at two outlets grew to around S$50,000 daily. In 2008, its objective had achieved such as S$600million in sales and ranked third-large retailer in Singapore by sales analysis in survey.
Sheng Siong firstly corporate as private company named “Sheng Siong Group Pte. Ltd” but on July 4, 2011 it was changed to public company “Sheng Siong Group Ltd”. They have total of 23 supermarkets and hypermarkets that provide consumers with both “wet and dry” shopping options arranging from a wide assortment of fresh and chilled product, such as groceries to packaged and processed food products. Nowadays, they have over 300 products under 10 retailers with qualified brand name, portfolio of well-recognised house brands, global sourcing network, and good quality on assortment.
The Environment Factors That Affect The Operations and Business Demographic Trends The population characteristics and trend may have big impact to supermarket current and future business. Total Singapore’s population reached 5. 3 million which mean the annual growth increase approximately 2. 5% on population. In addition, 45. 4% of Singapore’s populace are foreigners, which is the around sixth highest proportion of foreigners in worldwide (The Business Times, 2012). Therefore, Sheng Siong products are determined by the increase of growth.
Political/Legal Forces Government actions take place also has impact on firm by issue a regulations. Sheng Siong Supermarket need to register a license from International Enterprise Singapore in order to import and carry on wholesale dealings in rice, and Sheng Siong need to register for a license to operate meat or fish processing establishment from AVA (“Agri-Food & Veterinary”). Legislation such as Wholesome Meat and Fish Act, Control of Plants Act, Animal and Birds Act has to be governed by AVA. (Cited www. ava. gov. sg/ , 29
November 2012) In facts, Singapore taxation include corporate income tax with 17% and GST(“Good & Service Tax”) with standard-rate of 7% must be paid by all company and the price of the products as per taxes need to be changed. Economic Condition Somehow, success of a company is depending on economic environment. Singapore is known for pro-business environment, attracting foreign investment and business entrepreneurs to increase the economic environment. In 2012, the economy grew by 0. 3% compared with the same period in 2011 and the growth is supported by business service sectors.
The consumer price index increased 4. 2% compared to 2011 which bring benefits to Sheng Siong profits. On the other hand, gross domestic product in Singapore has contracted 1. 5% last quarter of 2012 as the global market is slowing down due to Europe’s debt crisis (Karl Lester M. Yap, 2012). Instead Sheng Siong Company still shows a good result of 48. 1% year-on-year increase in net profit of S$9. 8 million for the 3rd quarter of 2012 which compare with 2nd quarter 2012, Sheng Siong earned higher profit. Socioculture Condition Socioculture forces have a big impact on what product that is in the supermarket.
Sheng Siong Company has responds for consumer preferences and tastes with wide selection of quality products. Instead of selling the fresh groceries, Sheng Siong supermarket also provides some products that are uncommonly to be found in other supermarkets such as spices, sauces, and other canned products. Therefore, consumers have more choices and good quality product with cheaper prices. By the way, operating hours start from 7. 00am to latest 11. 00pm which allow consumer to purchase groceries and other necessities at their convenience. Technological Changes
Nowadays, technological environment has creating different kind of products, processes and materials with new knowledge. Sheng Siong supermarket use new high-tech approach which is CASIO IT-500M30R as front-end ordering system with backend ERP (“Enterprise Resource Planning”) as the solutions in solving the problems in changing the price tag. This system helps to revolutionize the stock management by enabling a direct computer-based link to various product suppliers of the supermarket which save a lot of time and money in terms of paperwork’s and manpower.
Major Factors That Affect Critically to Business and Operations Consumer and Landlord Complaints Sheng Siong supermarket need to take notes about complaints from consumers which will make consumers lose their confidence in quality of products due to consumer report. It might affect the financial performance and lower the sales because consumers may be discourage to buy such products from the supermarket. In addition, complaints from landlords regarding to hygiene matters such as unclean meat and fish, mosquito breeding and unclean washrooms that will subject to fines.
It may affect the renew of leases of the store and causing the supermarket to move out the land. Difficultly On Information Technology Systems Sheng Siong facing a problem with complex information technology systems which make difficult to business operations. It is costly to keep the system up-to-date or implement system maintenance and interrupt the business. Interrupt causes damage to data centres and technology infrastructure. It could reduce the customer satisfaction and affect the reputation, operation and future growth. Natural Disasters And Weather Conditions
External factors, including weather conditions and natural disasters such as floods, earthquakes in the areas in which Sheng Siong has stores may also result in interruption of store operations, food transportation delays and even decreasing the selection of products. Weather conditions affect the quantity and quality of agricultural output by food producers and affect the availability of certain products. Planning/Strategising Function One of Sheng Siong’s primary strategic objectives is becoming preferred retailer in the market by providing quality products at reasonable prices with good customer’s service.
Good customer service will create value to the customers. Therefore, Human Resource has plan for demand forecast in order to know company need and conduct job specification to evaluating the knowledge, skills, and abilities need for good performance. Job analysis organizing the information about the task and responsibilities for candidates and job description defines the duties and responsibilities. Human Resource wills recruits candidates by application forms, interviews and personality tests to determine whether candidates have talent and motivation to be part of Sheng Siong family.
Motivating staff is the key to producing an efficient workforce; therefore Sheng Siong provided training employees upgrade their skills sets. Human Resource department will offer program such as role playing to test employee’s customer service which is important for the company. Sheng Siong Company create compensation programs that attract high quality employees, keep the company’s best employees, motivate them to work harder that help the company to achieve its strategic objectives. Salaries differ depending on an aggregate basis and in remuneration bands. Organising Function
Organization of Sheng Siong Company has divided into four functions which are Management, Administration, Store activities, and Logistics. Supermarket is more slightly to be mechanistic organization because they are not innovative company type. Vertical control with rigid hierarchical relationships help employee to avoid from confusion because they can only report to one supervisor. Other than that, the higher the layer of key position has the larger authority to give orders to employees. Organization still using the top-down method to command and control the staff as communication channels.
Because of big firm, they are using higher degree of formalization such as using E-mails to communicate with the employees. Departmentalization that Sheng Siong using now is functional structure which mean group the area in specialization type. With this functional structure, the efficient to get the job done is high due median-sized company in stable business environment. The disadvantage of functional structure is conflicts between departments will happen because of low communication barriers. It may be difficult to coordinate products and services, which could reduce the responsiveness of the consumers need.
By the time this problems may cause the revenues for potential sales lost. As the company growing bigger, Sheng SIong need to change the structure into divisional approach that can allows for better and faster communication and service and accountability. Leading Function Every company need an effective leader to lead and motivate the employees to work harder which bring benefit to the companies. Manager has to influence the employees by rewarding them, by meeting the need of employees, and helps employees to achieve their objectives.
Sheng Siong Company provides role models that are effective leader, they are flexible to adapt to the uniqueness of each employees. This may help to make employees accept the influence of role models they respect and believe. Teamwork is important for both of employee and company. Employees in Sheng Siong company work as a team which likely to be effective because the leader enable to coordinating the activities of the team and meeting. Leader has provided leadership to create the activities of the group.
This involves setting objectives, dividing task to be completed, setting procedures and rewarding to individual contribution. All the members need to participate in this process to allow the employees to achieve their best performance. The effectiveness of the team depends on its ability to lead itself. This gives very effective and efficient to company. Controlling Function Luis R. Gomez-Mejia and David B. Balkin (p. 481) states that “Control is the measurement of employee’s, divisions, or company’s performance against established standard and make correction action as needed”.
A manager can use the feedback loop to get information that need to make corrections to quality on the spot. For example, set the standards such as do not exceed more than 10 complaints about service for a day. Then measuring the performance by determines how many consumer complaints about services were proceeding in a day. Next step is compare the actual performance with the set standard to determine where is the variation. Let say that performance did exceeds the standard, then Sheng Siong need to take action for training and coaching employees to ensure they make correction immediately.
Sheng Siong usually use concurrent control and feedback control for bureaucratic control. Mosquito larvae found breeding in Sheng Siong wet market at Elias Mall that makes Sheng Siong takes place as the problem is already occur. (Cited www. channelnewasia. com/stories/singaporelocalnews/view/1087846/1/. html media, 1 December 2012) This causes Sheng Siong to waste time and resource on there. Feedback control is common in every companies as well as Sheng Siong, but it is the least useful type of control.
Feedback from consumer is giving Sheng Siong the information from past performance. Consumer complaints about quality of product are common type of feedback control. General Conclusion Environmental changes such as demographic, political, technological, and economic developments might affect the strategic perspectives. Therefore, Sheng Siong need to increase the productivity, economies of scale, quality and profitability. It also needs to increase the strong and well-established relationships with the suppliers and contract manufacturers.
Other than that, Sheng Siong also need faces those factors that can hardly affect the company and find solution to solve it. Sheng Siong can achieve a good corporate social responsibility by having the activities and event for recycling and the use of environmentally friendly products. Good corporate social responsibility can influence stakeholder to become loyal customer and become supportive of company’s products. Company with good planning, organising, leading, and controlling the overall of system can also easily achieving the mission and vision. General Recommendations
Sheng Siong can open more store in overseas which can enhance economies condition and capitalize on Sheng Siong Company. It also can provide more training programs such as job rotation to learn some knowledge from different kind of job that can motivate employee with strong drive. Information technology system needs to be upgrade in order to manage the operation well. Other than that, increase the purchase direct to product sources which to eliminate the middleman expense and reduce the costs, as well as increase the quality and freshness of the products.
Other than that, selection of house brand products can be expand by establish relationship with new contact manufacturers to increase different new selection and types of house brands products. Feedback from consumers needs to be control in order to get satisfaction from them. Sheng Siong can also hired more key management personnel with extensive experience in grocery retailing industry. Company need to take more action to solve the problem happen in wet market by manage the cleanness of market and stop the mosquito breeding.
