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Art for art sake

Art for art sake

Thursday, May 16, 2013

Defensive Market Strategy of Hyper Markets in Malaysia

The aim of defensive strategy is to reduce the probability of attack, divert attacks to less-threatened areas, and lessen their intensity. Speed of response can make an important difference to profit. A dominant firm can use six defense strategies summarized in: 1- Position Defense: (Carrefour) Position defense means occupying the most desirable market space in consumer's mind, making the brand almost impregnable, as Carrefour has done with hyper market industry. Carrefour is the preferred retailer means having stores where customers are naturally drawn to shop, and to which they are loyal. It means having the trust of customers: trust in product quality, price and service. It means being able to satisfy and anticipate customer needs and giving customers the best special offers. It means respecting producers and the environment. It means earning customer preference through social commitment and action. It means making our staff proud to work for us. Being the preferred retailer means making customers want to visit, and keep visiting, our stores. It means making customers happy by making their lives easier. 2- Flank Defense: (Mydin) Mydin’s emergence as a hypermarket has posed stiff local competition to major players such as Carrefour, Giant, and Tesco. Even as a hypermarket offering groceries similar to the international hypermarket range, Mydin is able to undercut prices by a reasonable percentage. Mydin outlets first opened in less developed states where competition was close to nil and when costs were extremely low. Currently, they place themselves in areas that are accessible to homeowners and traders, such as in small residential towns as well as the congested Kuala Lumpur. Some of their stores are placed in more aggressive positions than others. The variation of locations represents the mass product range and target market that Mydin have worked towards. 3- Preemptive Defense: (Carrefour) A more aggressive maneuver is to attack first, perhaps with guerrilla action across the market, hitting one competitor here another there, and keeping every one off balance. Another is to achieve broad market envelopment that signals competitors not to attack. If Carrefour announces plans for entering a new market, smaller hyper markets may choose to concentrate their spread in other directions to avoid head-to-head competition. 4- Counter Offensive: (Jusco) In a counteroffensive, the market leader can meet the attacker frontally and hit its flank, or lunch a pincer movement so it will have to pull back to defend it-self. The success factors that had stood Jusco well during the economic crisis had also been the main reasons for the significant growth this year. Strong management, suitably located shopping centers with good layouts, right tenant mix and strong anchor tenants that provide a wide and deep variety of merchandise plus excellent customer services are contributing factors in our success. Jusco's target market of middle to lower income level amidst the suburban vicinity has also proven to be the contributing success factor. 5- Mobile Defense: (Tesco) In mobile defense, the leader stretches its domain over new territories through market broadening and market diversification. With 38 stores and over 14,000 staff Tesco has become a considerable force in the local hypermarket scene. The prospects for Tesco going forward given the keen competition, because 80% of all the food sold in Malaysia is sold in traditional shops i.e. small shops, wet markets etc. Only 20% is sold in hypermarkets. Tesco appears prominent because it is big in Klang Valley, but overall we are still small, since countrywide most Malaysians still buy their food in the traditional outlets. This is a very unusual number and unlike most other markets in Europe or Asia where modern retail makes up about half or sometimes 60 per cent. 6- Contraction defense: (Giant) Sometimes large companies can no longer defend all their territory. In planned contraction (also called strategic withdrawal), they give up weaker markets and reassign resources to stronger ones. In Malaysia, Giant is synonymous with everyday low prices, big variety and great value and recognized for offering the most vibrant, comfortable and complete shopping environment. Giant, which turned 65 in 2009, pioneered the concept of modern supermarket shopping – buying everyday groceries, fresh produce and fresh foods under one roof and in a hygienic environment. As the pioneer, Giant sets the pace and standards for the industry with innovative marketing, store design and product pricing and variety.