Strategic Plan for Green Myanmar Dragon Limited

Students are required to write a report of 2500 words on preparation of strategic

plan for a company of their own choice.

The Vision of Green Myanmar Dragon Limited is to become No.1 most
sellable soap products in entire Myanmar. Our mission is to provide the
most affordable and refreshing soap to the whole Myanmar. We will do all
the possible steps, techniques, and tactics available to reach our mission
and vision. In this analysis, we will evaluate corporate vision and mission
statements, perform an external factor analysis and suggest 5 opportunities
and threats, perform an internal factor analysis and suggest 5 strengths and
5 weaknesses, perform SWOT analysis, perform SPACE analysis, perform
BCG analysis, perform blue ocean analysis and suggest a blue ocean to the
firm and I will group my suggested strategies and prioritize them.

Evaluate corporate vision and mission statements

There are about top 5 local brands running to be no.1 soap position in
Burma. There are many others many foreign brands. Some are under
Unilever, P&G coming too. There can be China, Thailand, Indonesia, and
India cheaper brand market products coming in too. They may have same
mission that is to provide affordable products to entire Myanmar and other
developing countries. All the soap products are with refreshing odour and
mind-compelling smell that could attract mind and body apart from some
really heavy strong products come from India but that again even depends
on customers preference and taste.

Perform an external factor analysis and suggest 5 opportunities and 5
threats

The opportunities can be merger with an established organization such as
Unilever or P&G. The opportunities can be strategic alliance between
three shwe wah, carbolic using government trademark NG shwe wah,
MSW shwe wah, GSW shwe wah. Another opportunities can be
purchasing a different type soap manufacturing plant. Another
opportunities can be finding a foreign partner or international joint
venture. There can be opportunities such as finding foreign original
equipment manufacturers if we want to expand shampoo, detergents, hand
sanitizers, if we do not have enough money or find partner to invest in.





Threats
The threats can be due to technological change, entry of foreign soap
products and local soap product brand emergence occurred. There can be
more type of soap products liquid soap, detergent, hand sanitizer. The
threats can be in terms of demographic trends such as rivalry of foreign
soap products and local brands with cheaper and better quality soap brand.
The threats can be in terms of cultural trends such as substitutes
detergents and liquid soaps. The threats can be change of political
conditions. The threats can be dependent over change of price in
complementors.
Perform an internal factor analysis and suggest 5 strengths and 5 weaknesses
Strengths
The strengths are customers are loyal to the brand which is
government shwe wah and carbolic. The price is affordable. The
scale of economies is large which is distributed entire Burma. The
organization is regulated semi-government, hence, it is more
systematic. The soap can provide a good value which is foaming
and of good quality.

Weakness
The product is not rare. If the resource is not rare, then perfect
competition dynamics are likely to be observed. That is, if there is
no competitive advantage, there will be no above normal profits.
The product is imitable. That means the product has imitability.
Imitability means the temporary competitive advantage of valuable
and rare resources that can be sustained only if competitors face a
cost disadvantage in imitating the resource. It has been borrowed
from government and the monthly expenses are expensive and
regular. It can be taken back any time the monthly fee cannot be
paid. The competition is fierce - High competition.
In assessing Internal Factors of Assessment, we need to look at -
1. Financial (Liquidity, Leverage, Activity, Profitability, Growth)
2. Physical (Plant & Equipment, Geographic Location)
3. Human (Skills & Abilities of Individuals)
4. Organizational (Reporting Structures, Relationships)
5. Technology and Skills


SWOT Analysis of Green Myanmar Dragon Limited

Strengths

Recognise as a National Government Soap Brand Shwe Wah and Carbolic
There are only three recognized companies who is able to manufacture
using the brand name of Shwe Wah. One is private by the ownership of
NG companies, government rental of industries by the A&T company &
Green Myanmar Dragon Company. Shwe Wah and Carbolic brand name
has been established over 50 years and has been gained customer
loyalty.This has enabled Green Myanmar Dragon Limited to break entry
barriers into some very competitive markets and knock out strong
competitors.




Strong brand portfolio
Green Myanmar Dragon Limited has established a very strong relationship
with wholesalers and retailers by offering them good margins and
incentives. Good Margins and Incentives, which would not deviate
customers buying from competitors.


Strong relationship with wholesalers and retailers
Green Myanmar Dragon Limited has established a very strong relationship with
large wholesalers throughout Burma by offering good margins and incentives. Not
only do they provide good value to wholesalers, they as well provide fair and
reasonable value to retailer, that provides strength to reach to the ultimate
consumer market.

Economies of scale
Economies of scale occur when increased output leads to lower long run average
costs. As a nationwide distribution company, Green Myanmar Dragon Limited
could purchase the raw materials with cheaper price compared to other smaller
competitors out there in the market. Because of its mass scale production it has
ability to overcome the bargaining power of suppliers, which results in lower cost
of production. Thus, it leads Green Myanmar Dragon to provide wholesalers and
retailers with better pricing than small competitors.

Research and development

Green Myanmar Dragon Limited started to put an effort over research and
development for new products and brands. It is because products have life cycle.
Each and every product can be star, cash cow, question mark, or dog. For the
current two body soap Carbolic, and washing soap Shwe Wah, we carefully
developed to research over and maintain to provide better color, better smell,
better density and so forth.


Excellent management and human element

Green Myanmar Dragon Limited is operated based on half government
employees, and half private company employees. Since half of them are
government organization trained, Green Myanmar Dragon Limited has received a
pool of managerial capabilities in the form of its human resource capital in the
entire Burma. Its top management are from foreign-trained and multilingual. This
helps Green Myanmar Dragon Limited to understand and manage the local needs
of customers, employees and stakeholders.


Merger and acquisitions

Green Myanmar Dragon Limited has taken acquisition over smaller soap
industries such as Shwe Ohn Thee, Sein Ohn Thee, Good, Like which are
produced by Tet Nay Company.


Weaknesses

No direct connecting with customers
Because of nature of business, Green Myanmar Dragon Limited has no direct
connection to its ultimate consumers. The consumers are mainly from rural
villages and middle-class to lower-class city people. So, It has to rely on its
wholesalers and retailers.

Internal conflict between Industry
Since it is in Yameithin, top level management cannot really stay there but
monitor from Yangon. So, it has to solely rely on middle level management.
Hence, it leads to two divisions. Government-based staffs want to rule on its own
without following company rules and orders. The middle level manager from
company wants to show his power against the upper level management. Since it is
rent from government, both the salaries of government-based staffs, and
company-based staffs are paid by company itself.


Reduced spending for R & D

Since Shwe Wah washing soap and Carbolic body soap are at the point ticking
from cash cow to dog. The company does not want to spend much over two
products. Instead, they would like to think about joint venture, merger or strategic
alliance.

Fall in revenues

Due to high competition and emergence of foreign detergents, soaps and
toothpaste, it has led us with lower profit margins. Decrease in revenue has
directly affected profit margins and market value of shares.

Opportunities

Economic Crisis
Where current economic crisis have made small companies with liquidity
problems to find way for exit, there it has created opportunities for Green
Myanmar Dragon to acquire these demising companies at a very cheap price and
enter into new markets.

Increasing need for healthy affordable products
Since Myanmar is one of the least developed country, it is important to provide
the product with lowest cost. Only by means of cost leadership strategy, it can
penetrate into entire market.

Developing markets
The market share of Green Myanmar Dragon Limited is relied over suburbs and
rural areas. 90% of Shwe Wah washing soaps and Carbolic body soaps are used
by those who do not have washing machine at their house, who do not use
detergents at their home. So, it is important to penetrate more to developing
markets and large wholesalers in the different towns.

Potential Joint Venture/Partnership/Strategic Alliance
It is government recognized brand so it is more likely to invest in this brand than
other smaller brands.

Threats

Strong Competition
Since the entry to soap market is not high. The creation of soap plant is medium.
The entry barrier is not high. Thus, it leads to strong competition. Green Myanmar
Dragon Limited has two competitors, NG company, A&T company which uses
Government shwe wah and carbolic brand, in addition to other large soap brands
Godzilla, shwe toe ka lay and other foreign soap products. These competitors led
Green Myanmar Dragon to provide better pricing and better incentives to
consumers with lower profit margins.

Increasing brands
Availability of different brands and emergence of different companies, and
foreign soap products have led customers to switch for cheaper products.

Tougher Business Climate
Overall business climate is tougher today because of economic crisis, tough
Government regulations and competitive environment. It has led the companies to
focus more their liquidity instead of profitability. So, most companies sell with
low profit margin. It is hard that when getting money back from wholesalers and
retailers, some of them they do not want to pay money even after assigned period.
Complex Organisational Structure
Green Myanmar Dragon Limited is formed with 4 different companies and joint
with government. A wrong corporate strategy can be a single point of failure of
business.

The SPACE Model
SPACE model looks at Industrial attractiveness (IA), Environmental Stability
(ES), Financial Strength (FS), Competitive Advantage (CA). There are so many
brands in the market. However, just to compare and contrast better NG Shwe Wah
and MSW Shwe Wah in the market, Dinosaurs, Shwe Toe Ka Lay, Our large 4
competitors, we are at competitive region. It is because we do not have advantage
over both external factors and internal factors. We do not have advantages in
terms of industrial attractiveness (IA) i.e. industry growth, environmental
stability (ES), i.e. overall economic condition, GDP growth, technology & barriers
to entry. The environmental stability is the same for my 4 competitors I have
mentioned above. Government have been lowering restrictions against entry
barriers against foreign soaps and imports. Environmental stability is unstable
compared to before. Industrial attractiveness that is industry growth is slowing
compared to before due to more intense competition. Financial strength of a
company is not as strong as other competitors, it is because it is made up of only
three shareholders, other companies are made up of group of shareholders, and
NG is a group of companies, thats a reason why he can purchase a government
soap factory when reign change in 2010.
Competitive advantage with NG Shwe Wah, and MSW Shwe Wah is limited
because it is both using Shwe Wah and Carbolic brand and customers are loyal to
the brand. We can only advance by better packaging, better delivery service,
better marketing system, better market penetration to nearby towns where the cost
of delivery for them is expensive. It is because the allocation of industries are NG
Shwe Wah is in Yangon, MSW Shwe Wah is in Mandalay, GSW Shwe Wah is in
Yameithin. Therefore, the suggested strategy type is competitive.
In Competitive environment, we need to do product development, market
development, market penetration, backward, forward and horizontal integration.
Product development manufacture of soap powder, liquid soap, Market
development nearby towns where the competitors cannot penetrate in, backward
integration purchase of palm oil plantation, forward integration combine or
merger with Unilever or established organization, horizontal integration
strategic alliance between NG Shwe Wah, MSW Shwe Wah, and GSW Shwe
Wah.
In terms of BCG Strategies, It used to be a cash cow business, which is high
market share and low growth rate. Due to intense competition recently, it has
become a dog business, it is becoming low market share and low growth rate. It is
better to divest in the future. In the dog business, the retrenchment, divestiture,
liquidation to stronger investor is better for the company.
Blue Ocean Strategy : Joint Venture with Foreign Strong Company and establish
hand sanitizer company with cheaper price than those that are importing from
abroad with heavy advertisements. In this way, it can compete local competitors,
none of the local competitors have produced hand sanitizers yet. Blue Ocean
Strategy is industries not in existence, the products that are unknown in the market
space. Since no competitors in the market have hand sanitizers industry, since
there are washing soaps and water not available everywhere, hand sanitizer is
required for hygiene, we can seek to gain a dramatic, competitive advantage by
abandoning efforts to beat out competitors in existing market and inventing a new
industry or distinctive market segment to render existing competitors largely
irrelevant and allowing a company to create and capture altogether new demand.
In evaluating the strategies, we need to look at organization capabilities,
workability, appropriateness, acceptability of the strategy, return on investment,
supported by organizations culture, employee compatibility, affordability and
payback period. It is better to do backward integration, forward integration,
backward integration and horizontal integration. Forward integration is to invest
in the plants and machines. Backward integration is to invest in the palm oil
plantation. Horizontal integration is to acquisition over the smaller companies.
That is the first strategy. Merger and Acquisition over smaller detergents and soap
powder factories is second prioritized strategy. In this way, it can also do product
development strategy as well. It is to penetrate in nearby markets where the
transportation costs for competitors are high in terms of allocation convenience,
market penetration strategy. More effort and focus on marketing campaigns and
advertising has been done on the products. Another strategy is to produce products
with superior quality. The last but not least to produce hand sanitizer the first in
Burma, that is competitive and cheaper than foreign hand sanitizer.
References
Wit, B. and Meyer, R. (2010) Strategy Synthesis: Resolving Strategy Paradoxes to
create competitive advantage, 3
rd
edition, Hampshire.