Om 201 Operations Management: Analysis Assessment Answers

This assignment is require to do an export proposal on the export practice of Royal Selangor Pewter to One of the listed countries.

Q1.  Discuss the SWOT analysis of Royal Selangor in pewter industry. It may also require to draw a table of SWOT analysis.

Q2. Conduct a specific PEST market analysis of target marketing. This may also require a table of PEST analysis. 

Answer:

Introduction

Royal Selangor (RS) is at far the leading producer and exporter of pewter products not only in Malaysia but also all over the world (Thomason 2016). RS export over one thousand pewter products to more than 20 countries, with most favored nations (MFN) being United States of America, Australia, Hong Kong, Japan, and Canada among others. This report covers an export proposal to France.

In its operations, RS enjoys some advantages and face some threats in both local and international markets. Strengths weakness opportunities and threats (SWOT) analysis will, therefore, reveal those elements (Ha & Coghill 2008).

Strengths

RS enjoys massive economies of scale benefits from the large-scale operation. Producing more than 1000 products enable them to conquer the market and dictate prices (Ng 2015). The company also enjoy history in the pewter industry spanning over 132 years of operations. As such, many customers and traders believe they are the best in that sector and thus can enjoy more exports to France than any other company can. Pewter is made from tin, and by data available from Malaysian statistics department shows an opportunity to expand their exports, possible France.   

Source: The Malaysian tin products newsletter  

Weaknesses

RS is identifying itself with prestige. Most of their domestic clients include non-profit organizations, sports and recreation clubs, associations, government agencies, private companies, and tourists. As such, many people perceive their products as expensive and only accessible to high and middle class. However, this move is an edge for high valued clientele, they are actually missing to tap the low-class customers who are the majority. This local effect can follow RS to France since they only target royal customers instead of the middle and low class who are the majority.

Opportunities

RS is so far the leader in pewter designing, manufacturing, and exporter in the world. Such iconic status is a good ground for an expansion to France. Data Group Asia, a data mining company reveals a market potential to RS in several countries which include Afghanistan, Algeria, Burma, Ecuador, Nepal, France and many more that RS has an edge in. The government of Malaysia is also providing an incentive for exporters which is a good avenue for expansion to other untapped markets, more so France. The company is also embracing modern technology in designing and manufacturing her products which have helped it improve on quality and design which can appeal to French nationals.

Source: The Malaysian tin products newsletter

With low domestic consumption, more of the pewter products can be exported to France.

Threats

So far, the company is receiving some threats on local competition in terms of prices. Since RS is well established and majors on quality and prestige, some local competitors are pricing their products lower which may create a negative turnover in the local market in the long run. Even though they control the market now, locals may switch to cheaper products that are available to them. More low and middle-income earners like prestige but at slightly lower prices.

PEST analysis

Political factors

The current legislations on exports are favorable for business growth and expansion with tax subsidies and exemptions. The political climate in France can enable expansion of RS manufacturing and distribution services.  Currently, France is politically stable considering their recent national elections. In particular, France offers modern technology which RS can take advantage of. As RS has set up distribution outlets in other countries, France is also politically stable to welcome new investors.  

Economic factors

The Malaysian government is providing incentives in form of loans, subsidies, export promotions, and tax exemptions to companies that wish to export. Such economic initiatives can motivate RS to set up shops in France, and possibly start manufacturing. Generally, RS export pewter products to all the countries mentioned in the figure, and French market can be part in the category of other countries.

Source: Malaysia External Trade Development Corporation

Socio-cultural factors

The history of pewter is rooted in the culture of Malaysian people, extending to other Asian nations. This culture that embraces pewter has promoted the sector a great deal. RS has survived in pewter business for over 130 years, courtesy of culture of the native. Moreover, tourism and export promotion has spread the culture to other countries such as France, who can be loyal customers since they value prestige and royalty which is the focus of RS.

Technological factors

RS is embracing technology in their designing and manufacturing process. Using the three-dimension technique to produce goods is selling and receiving support from the public. Again, France is a tech city where RS can get more thrilling technologies to boost production and design.

Bibliography

Data Group Asia, 2017. Tactical and strategic report on Royal Selangor Pewter Ltd. Retrieved [online] from https://www.swfinvestments.org/PureData/UK-123/Royal-Selangor-Pewter.html  Accessed 31-05-2017.

Ha, H. and Coghill, K., 2008. E-Government in Singapore-A Swot and Pest Analysis. Asia-Pacific Social Science Review, 6(2), pp.103-130.

Malaysia External Trade Development Corporation, 2017. Top ten major export countries, 2017. Retrieved [online] from https://www.matrade.gov.my/en/28-malaysian-exporters/trade-statistics/3791-top-10-major-export-country-2017 Accessed 31-05-2017.

Ng, K., 2015. How Royal Selangor became the largest pewter maker in the world. (Online) Malaysia Tatler.

The Malaysian Tin Products Newsletter, 2016. A Publication of the Malaysian Tin Products Manufacturers’ Association

Thomason, S.J., 2016. Tin: Resource of Malaysia.