8/11/2019 November Common Test 1
1/2
MAF640 STRATEGIC MANAGEMENT
Answer all questions in 1 hours
Mamat runs Pembekal Buku Murah in a high-populated residential
town. He is the only
distributor of workbooks to all the schools in this town for the
last decade. Schoolchildren
use the workbooks for exercises to enhance their proficiency.
Mamat works from home and
will go about doing his business leisurely at his own pace
without a vision or a mission for his
business. Most of the schools seek for his service since they
find him to be such a
benevolent businessman. He does everything by himself from
getting the supplies to
distribution. Mamat sells the books at fixed prices and also
allows needy students to pay by
installments. He has captured !""# of the market share in his
town and in fact has built
high entry barriers for his business in the form of economies of
scale as well as hisreputation as a trusted and a kind
businessman.
Mamat started $edai Buku Murah with minimal capital investment
and did not put any
additional capital into the business over the years. He at times
struggled to settle his
financial commitments when faced with cash flow problems. He has
been advised by the
local entrepreneurial unit that it is important for him to
undertake strategic planning to
prepare his business for bigger challenges ahead but Mamat does
not agree. Mamat has
ignored strategic planning all the years as he is confident that
his business would not be
affected by the changes in the external environment. Mamat truly
believes that his
customers will remain loyal to him. He is satisfied that his
business is able to provide for the
minimal needs of his customers so he does not see the need to
improve his business to
serve them better.
However% Mamat is in for a shock. $edai Buku !Malaysia will be
opening its doors in his
town next month. He learned that $edai Buku !Malaysia is part of
the government&s
!Malaysia initiative that will serve the same consumer segment
as Mamat does. 'nder the
$edai Buku !Malaysia pro(ect% the Ministry of )ducation
collaborated with a number of
established publishers and came out with workbooks that are
tailored to meet the demands
of the education curriculum. *he collaboration allowed $edai
Buku !Malaysia to save on
printing and publishing costs and thus able to sell the
workbooks at low prices. +ll the items
sold at $edai Buku !Malaysia are printed with the !Malaysia logo
and the workbooks are
available in the shop all year round so parents need not buy
them all at once at the
beginning of the school-year. *hey can buy the workbooks as and
when their children need
them and spend within their means. ,n top of that% Mamat also
discovered that besides
facing competition from $edai Buku !Malaysia% his business is
also threatened by the
substitute. Schools nowadays are using * in teaching and
learning% thus reducing the need
for printed learning materials. Schools are keeping up to date
with the young school-going
children who are *-savvy and prefer to surf the internet for
information and knowledge.
Mamat is so upset as he does not know what to do.
8/11/2019 November Common Test 1
2/2
Required
a /o you think it is wise for Mamat to ignore strategic planning
for his business%
which
is the only distributor of workbooks to all schools in the town0
Support your answer
with three 12 reasons.1!" marks
b /iscuss the impact on Pembekal Buku Murah and the bargaining
power of
buyers
when $edai Buku !Malaysia opened its doors in the town.
1!" marks
c 3hich segment in the general environment has enabled $edai
Buku !Malaysia to
open in the town despite Mamat building high entry barriers for
his business in the
form of economies of scale as well as his reputation as a
trusted and a kind
businessman0 Support your answer with one 1! reason.
14 marks
d n your opinion% do you think Mamat should also be afraid of
the threat of substitute
that may harm the sales of printed learning materials0
14 marks
1*otal5 2" marks
