Executive Summary
Gain City is a general electric and air conditioning item, which consists of suppliers, provisions, and manufacturing of installation services related to electric products. The report draws a strategic analysis through appropriate management tools such as SWOT analysis, Porter`s five forces model, and VRIO framework. A SWOT analysis examines the internal factors, which the company already possesses that can be either strengths, weaknesses, threats, or opportunities. Porter’s five forces model examines the pressure of the electronic industry on Gain city. Pestle analysis of Singapore depicts that there is an upsurge in technological advancement so there is an opportunity to innovate Air conditioner facilities because the nation is dominated by moderate temperature ranging between “25-37 degree Celsius.”
Contents
Introduction
Electronic store gain city was founded in 1981, which strived to improve customer`s lifestyles and become a trusted retailer. The company has been growing strengthened in consumer electronics retailing business. The organization offers a huge range of electrical appliances, which include home appliances, IT products, audio-visual items, and an air conditioner (Lim, 2015).
The financial status of Gain City for 2015 is estimated at $200 million and employee-based of 750 people. 90 percent of revenue is from the sale of electrical goods, installation events, and repair work. Key competitors are Philippine long-distance, M1 limited, Sell2World Inc., and Starhub.net.sg. The report brings out a discussion on strategic analysis of Gain City by examining it through Pestle analysis, SWOT analysis, Porter`s five forces model, and VRIO model with an aim to examine the threats and opportunities of the environment (Indartono, and Wibowo, 2017).
Macro environmental analysis
Pestle analysis is a tool utilized by the marketers to keep a check macro-environmental factors and their influence on the organization.
Political factors-
Singapore is a politically stable nation but currently, it suffers from lower oil prices, currency depreciation, and low fiscal balance. Singapore is expected to foresee the recovery of economic activity and the strengthening of economic growth in the coming years. Nation`s stability has transformed threats in opportunities (GuideMeSingapore Hawksford, 2018).
Economic factors-
The GDP of Singapore is $585.055 billion in 2019. The inflation rate is 1.4 percent in 2019. The unemployment rate is estimated at 2.3 percent in 2019. E-commerce threats in Singapore in consumer electronics space are not huge as compared to larger markets including Australia and China. Singapore is well connected to the small markets where these retail outlets are accessible in a feasible way (Rastogi, and Trivedi, 2016).
Social factors-
The sale of Gain city depends on the perception of the people in Singapore. It comes under experiences where there is an increase in the housing boom, disposable income, and people spending on luxury items. The culture of Singapore is based on knowledge, which attracts multinational investments. It has open trade policies, excellent infrastructure, and communication links, which sharply demand City Gain products (Laverty, Thompson, Cetateanu, and Filippidis, 2018).
Technological factors-
Gain city electronics will be supported through open and connected, free trade agreements, human capital and their talent, data-friendly, and digital trade. The Internet plays an important role in the advancement of electronic items in Singapore. The penetration rate for broadband is more than 70 percent through which one can flourish the use of air conditioner dealing in retail selling.
Environmental factors-
The company has to invent relative technologies or measures so that the use of their products do not cause water pollution, air pollution, and deforestation.
Porter`s five forces model
Porter`s five forces model is a management tool to analyze the competition of a business. Porter`s five forces need to check the re-assess the marketplace and its change in the industry. Organizations will consider facing horizontal competition including the threat of substitute services and products, the threat of new entrants, the threat of rivalry, bargaining power of customers and suppliers (Varelas, and Georgopoulos, 2017).
Bargaining power of buyers-
It depicts the ability of Gain city`s customers to drive the prices of the household appliances depending on price sensitivity. Core deciding factors include ease of switching to rivalry, and deriving buyer`s information in regards to prices of appliance makers (Yudiono, Wilopo, and Iqbal, 2019).
The bargaining power of buyers is considerably high because it has been constrained by customer loyalty to differentiation efforts with the importance of appliances and products. It can induce customers and maintain sales but the cost of switching to competitors is high for similar products such as televisions, microwaves, and refrigerators, and Air conditioners (Yudiono, Wilopo, and Iqbal, 2019).
Bargaining power of suppliers-
Suppliers to Gain City is composed of the manufacturer, which has key inputs used to make home appliances and other electronic items. The company has a variety of goods to offer most importantly air conditioners with a host of numerous home appliances with a national share of 20-25 percent (Hussain, and Terziovski, 2019).
The threat of new entrants-
As the industry earns super profits, so it attracts new organizations looking to diversify by creating it more competitive. It will further lower the profits for all the players. The most common barriers in the industry include economies of scale, product differentiation, accessibility to the distribution channels and government legislations. This concludes that the company faces a low threat of entry, as it has remained and strengthened in the consumer electronics retailing business. Although, the company has the advantage of favoring legislation by the Singaporean political markets (Miller et al., 2016).
The threat of competitive rivalry-
The intensity of the competition between the numbers of factors includes a high level of differentiation between products and the organization. The company faces high competition from Philippine long-distance, M1 limited, Sell2World Inc., and Starhub.net.sg. Although the company has achieved a state of a great player in electronics and home appliances. This often led to price wars, product innovations, and intense advertisements (Yudiono, Wilopo, and Iqbal, 2019).
The threat of substitution-
Substitutes do not mean that products are the direct rivalry but they are similar products, which performs as substitutes. For example- substitutes for Gain City`s air conditioners can be obviously fans as being used in offices and workplaces for aeration (Tresna, and Raharja, 2018).
VRIO framework
VRIO analysis is a framework, which is used to determine the competitive potential of the organization. The dimensions used include value, imitability, rarity, and organization (Shopsinsg, 2020).ParametersRareCostly to imitateOrganisationValuableGeographical penetrationNoNoYesYesAdvance technologyYesYesYesYesHuman resourcesNoYesYesYesDomain practicesYesNoYesYesStrategic appliancesNoYesNoYes
The company does not generate direct revenues as it does not avail only services but also its avail products. It demonstrates growth with a variety of growth strategies, which is implemented in the organizational structure. Market development places venturing foreign markets with the use of existing innovative services and products (Tresna, and Raharja, 2018).
SWOT analysisStrengthsOpportunities· Currently, Gain city is the largest air conditioner retailer in Singapore.
· It is one of the largest numbers of servicing vehicle chain enabled in providing efficient services, home appliances, and IT products (Basset, Mohamed, and Smarandache, 2018).· The company has 10 locations in Singapore, which include Gain City Megastores (Gupta, Gupta, and Gupta, 2019).
· This indicates that the company has the opportunity to expand its business to other nations (Todayonline, 2020).WeaknessesThreatsThe high cost of labor leads to poor quality of workforce and insufficient investments in needed in diversification (Gautam, Sharma, Gautam, and Gautam, 2019).
Due to limitations in the product line and special online deals, the organization is not able to grow (Todayonline, 2020).· The company suffers from threats related to information technology infrastructure (Phadermrod, Crowder, and Wills, 2019).
· Companies suffer from denial of services and drive-by attacks.
· There is an increase in the level of competition from new companies. The competition is severe due to the presence of substitute goods in services and products in the home region (Blanco, and Cohen, 2017).
Conclusion
From the above discussion, it can be demonstrated that Gain City has appropriate strengths to overcome the threat and weaknesses of lying in the market. The organizations have maintained the extension of its services since the time it started as it served people and became most trusted among the retailers. As an opportunity, there is a need to extend its products and services to the regional and international markets. The organization has to continue recording in relation to its outstanding results and also calculate a sustainable level of growth by maintaining it in all the sectors of business enterprises. The report carried out VRIOI analysis to determine the factors on the basis of which Gain City`s growth will be determined. Pestle analysis reveals that there is greater support on the part of the government policies, which allow them to grow.
References
Abdel-Basset, M., Mohamed, M. and Smarandache, F., 2018. An extension of neutrosophic AHP–SWOT analysis for strategic planning and decision-making. Symmetry, 10(4), p.116.
Blanco, J.M. and Cohen, J., 2017. Macro-environmental factors driving organized crime. Using Open Data to Detect Organized Crime Threats (pp. 137-166). Springer, Cham.
Gautam, S., Sharma, N.L., Gautam, B. and Gautam, D.K., 2019. Strategic Analysis Models and Strategic Analysis for Edible Oil Industry. International Journal of Research and Analytical Reviews E-ISSN, pp.2348-1269.
GuideMeSingapore Hawksford, (2018) Quality of Life in Singapore. Available on: https://www.guidemesingapore.com/business-guides/immigration/get-to-know-singapore/quality-of-life-in-singapore [Accessed on 07/02/2020]
Gupta, A., Gupta, N. and Gupta, M., 2019. British Airways-A SWOT and PESTLE Analysis-The The impact of Europe 2020 policy. NOLEGEIN-Journal of Corporate & Business Laws, pp.1-11.
Hussain, S. and Terziovski, M., 2019. Appropriation of Intellectual Property: A Multiple Cross-Case Analysis of SME Practices in Technology-intensive Industries. Journal of Management Policy and Practice, 20(2).
Indartono, S. and Wibowo, F.W., 2017. VRIO and THES based development of university competitive advantage model in formulating university strategic plan. International Information Institute (Tokyo). Information, 20(10A), pp.7275-7283.
Laverty, A.A., Thompson, H., Cetateanu, A., and Filippidis, F.T., 2018. Macro-environmental factors and physical activity in 28 European Union countries. The European Journal of Public Health, 28(2), pp.300-302.
Lim, J., (2015) Restless spirit paid off for Gain City founder. Available on: https://www.straitstimes.com/singapore/restless-spirit-paid-off-for-gain-city-founder [Accessed on 07/02/2020]
Miller, C., Bakos, A., Packham, G., Pickernell, D. and Thomas, B., 2016. Internal electronic information as a competitiveness-enhancing resource in German automotive industry suppliers. Strategic Change, 25(1), pp.61-80.
Nurlansa, O. and Jati, H., 2016. Analysis of porter’s five forces model on Airbnb. Elinvo (Electronics, Informatics, and Vocational Education), 1(2), pp.84-96.
Phadermrod, B., Crowder, R.M. and Wills, G.B., 2019. Importance-performance analysis based SWOT analysis. International Journal of Information Management, 44, pp.194-203.
Rastogi, N.I.T.A.N.K. and Trivedi, M.K., 2016. PESTLE technique–a tool to identify external risks in construction projects. International Research Journal of Engineering and Technology (IRJET), 3(1), pp.384-388.
Shopsinsg, (2020) Gain City Electronics Stores in Singapore. Available on: https://shopsinsg.com/gain-city-electronics-stores-in-singapore.html [Accessed on: 07/02/2020]
Todayonline, (2020) Gain City uses downturn to fortify market position. Available on: https://www.todayonline.com/business/gain-city-uses-downturn-fortify-market-position Accessed on: 07/02/2020]
Tresna, P.W. and Raharja, S.U.J., 2018. Analysis of the Sustainable Competitive Advantages of the Creative Industry in Bandung City. Review of Integrative Business and Economics Research, 7, pp.225-231.
Varelas, S. and Georgopoulos, N., 2017. Porter’s competitive forces in the modern globalized hospitality sector–the case of a Greek tourism destination. J Tour Res, 18, pp.121-131.
Yudiono, N., Wilopo, W. and Iqbal, M., 2019. VRIO Analysis to Measure E-Business Readiness in the Automotive Industry in East Java (Study on Otobus Company Kalisari and Otobus Company Menggala). WACANA, Jurnal Sosial dan Humaniora, 22(2).
Kommentare