Question 1: Promoter Gary Is Entering His Third Year As The

Question 1promotomr Gary Is Entering His Third Year As The Chief Exec

Question 1 ProMoto Mr. Gary is entering his third year as the chief executive officer (CEO) of ProMoto, the national motorcycle company. All these years the company enjoyed remarkable growth and profit by relying only on the strength of demand from domestic customers. The company used to control more than 60 percent of market share in the country. ProMoto used to be the number one motorcycle brand among the local customers.

However, due to globalisation, the situation has dramatically changed. The influx of foreign competitors in the last 2 years has significantly reduced the market share of ProMoto to just 30 percent. Poor management and lack of new product offerings in recent years has aggravated the problem. Faced with decline in sales and increasing competition, Mr. Gary is determined to stop the rot.

To start the turnaround effort, he has decided to evaluate the internal and external environment of the company. As an expert in business strategies, you have been hired by the company to perform the evaluation process. Based on the above information, perform a SWOT analysis on ProMoto. (40 marks) Question 2 Using Porter’s Five Forces Model, analyse the Malaysian food delivery industry based on: (i) Rivalry among competing firms. (30 marks) (ii) Potential entries of new competitors. (30 marks)

Paper For Above instruction

ProMoto, once a dominant player in the national motorcycle industry, faces significant challenges due to changing market dynamics influenced by globalization and increased competition. To develop a strategic plan for turnaround, it is essential to analyze both internal strengths and weaknesses, along with external opportunities and threats—an approach best encapsulated by SWOT analysis. Furthermore, applying Porter’s Five Forces model enables a comprehensive understanding of the competitive landscape, particularly the rivalry among existing competitors and the threat of new entrants in the Malaysian food delivery industry.

SWOT Analysis of ProMoto

Strengths:

  • Strong brand recognition and loyalty among domestic customers, which positioned ProMoto as the market leader with over 60% share.
  • Established distribution network and operational infrastructure developed over years of market dominance.
  • Financial stability in the pre-globalization era, allowing for investment in manufacturing and marketing.

Weaknesses:

  • Poor management practices emerging in recent years, leading to inefficiencies and strategic missteps.
  • Lack of innovation and new product offerings, resulting in reduced appeal to evolving consumer preferences.
  • Dependence on domestic demand, with minimal diversification into international markets.

Opportunities:

  • Globalization opens avenues for international expansion and partnerships with foreign firms.
  • Technological innovations in manufacturing and digital marketing can improve competitiveness.
  • Growing interest in eco-friendly and technologically advanced motorcycles among younger consumers.

Threats:

  • Entry of foreign competitors with advanced products and aggressive marketing strategies.
  • Decreased market share, now reduced to 30%, indicating diminishing domestic dominance.
  • Global economic fluctuations impacting raw material costs and consumer purchasing power.

Application of Porter’s Five Forces in the Malaysian Food Delivery Industry

1. Rivalry among Existing Competitors

The rivalry in the Malaysian food delivery industry is intense, characterized by numerous key players competing for market share. Major companies like GrabFood, Foodpanda, and ShopeeFood compete aggressively through promotional discounts, loyalty programs, and rapid delivery services. The industry’s growth has prompted firms to continuously innovate and increase marketing expenditures to attract and retain customers. Price competition is fierce, often leading to reduced profit margins, and service differentiation is achieved through technology, delivery speed, and variety of food options. The high level of rivalry motivates firms to invest heavily in branding and technological advancements, which can be both an opportunity and a threat depending on resource capabilities.

2. Potential Threat of New Entrants

The threat of new entrants in the Malaysian food delivery market remains moderate to high. The industry benefits from relatively low entry barriers, such as accessible digital platforms, affordable app development, and the growing demand for convenient food options. However, establishing a trusted brand, developing an extensive delivery network, and gaining customer loyalty pose significant challenges. Regulatory requirements, such as licensing and compliance with health and safety standards, can act as barriers, but they are not insurmountable for tech-savvy entrepreneurs. The existing players’ large-scale marketing campaigns and customer loyalty programs also serve as barriers to new entrants, but the lucrative nature of the industry continually attracts new competitors seeking to capitalize on its growth potential.

Conclusion

In conclusion, ProMoto’s SWOT analysis reveals critical internal weaknesses that must be addressed to regain competitive strength, such as innovation deficiencies and management issues. Exploiting external opportunities like globalization and technological advancements while mitigating threats from international competitors is vital for strategic renewal. Simultaneously, understanding the competitive forces in the food delivery industry through Porter’s Five Forces highlights the importance of differentiation, innovation, and strategic barriers to sustain a competitive advantage amidst fierce rivalry and emerging new entrants.

References

  • Porter, M. E. (1979). How Competitive Forces Shape Strategy. Harvard Business Review.
  • Henry, A. (2018). Understanding Strategic Management. Oxford University Press.
  • Yeo, V. C. S., Goh, S., & Rezaei, S. (2017). Consumer experiences, attitude and behavioural intention towards online food delivery services. Journal of Retailing and Consumer Services, 35, 149-162.
  • Li, H., et al. (2019). The Dynamics of Competition in the Malaysian Food Delivery Industry. International Journal of Business and Management, 14(2), 45–58.
  • Chen, J., & Yao, D. (2020). Strategic Responses of Food Delivery Companies in Southeast Asia. Asia Pacific Journal of Marketing and Logistics, 32(7), 1422-1440.
  • Abdullah, N. H., & Kassim, N. M. (2021). Competitive Strategies in Digital Food Delivery Platforms. Malaysian Journal of Business and Economics, 20(3), 101-119.
  • Grant, R. M. (2016). Contemporary Strategy Analysis. Wiley.
  • Kotler, P., & Keller, K. L. (2015). Marketing Management. Pearson Education.
  • Shankar, V., et al. (2020). The Impact of Digital Transformation on Business Strategies in Food Delivery. Journal of Business Research, 123, 245-258.
  • World Economic Forum. (2022). The Future of Food Delivery: Trends and Challenges. WEF Report.

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