Learning Issues Chapter 1 (OKB) a) There was some mention about stakeholders in the problems, who are the stakeholders and what their stakes?
1. Capital market stakeholders In this case, the capital market shareholder of a firm is bank and shareholder. In this case the shareholder who gives OKB financial resources for OKB business. The stake of these shareholders is to ensure the OKB businesses continues their operation and can meet the expectation on the capital they had given.
2. Akar Enterprise (supplier)
Is a major supplier for OKB Bhd. They supply herbs and roots from the forest of Perak. Their stakes is whether they able to meet the demand of OKB to continue supply raw material.
We know that The Guardian approached OKB to supply its medicinal products to them. If that thing happen the sales would increase since consumer prefer use OKB products
We notice that the OKB’s production process is carried out manually by the “kampung folks”. If OKB accept the offer from The guardian, the process will change to the machine since they will change it to mix of pills, capsules and liquid-compound forms. If this happen, they no longer can work for OKB in a manufacturing the products.
Ministry of health is a body who observe and monitor the quality and the safety of products. It is already mention about the latest markey surveys conducted by them, OKB is still the first choice among consumers. It shown that the product is safe to be used.
b) What do you think of the comment made by the management about OKB’s Vision & OKB’s achievements? I think the old vision may not be suitable anymore to face the changes of economy nowadays. This is because, OKB more relies in traditional approach and they should come out with a new vision that promote abouts its products quality and attract customer. With a good vision, OKB can be more success and achieve their targets. They should change their vision not only based on customer need but also based on environment changes and also satisfied their employees. OKB Bhd can be more competitive to the real world and they can easily adapting the changes that have taken place on the industry.
Learning Issue Chapter 2 Explain to Datin Timah about the importance of getting to know the external environment. Discuss the possible impact of the DPEST & G factors and the Competitive Forces (The 5 Forces) on her business.
The DPEST & G analysis segmented the external environment into 6 segments which are demographic, political or legal, sociocultural, technological, global and environment segments. The first segment is political or legal segments. This segment focuses on organization to aware of any changes. Management must aware of consumer tastes and buying power. Any changes must be consider in the management’s strategies as changes on political or legal segments affect direct or indirectly on the demands of the market. Sociocultural segment need to be considered by management.
These refer to the consumers concerns regarding the market, as there were negative views from the customer. Customer view the product should be revamping into modern pills and capsules rather than traditional packaging. They should be innovative in market their products and use the resources for best effectiveness and efficiently strategies. OKB Bhd can use technological advance thus creating competitive advantages of organization in the market. Advance in technologies can increasing the efficiency of productions and increase the value of product. Next is economic segment.
This refers to the nature and direction of the economy in which a firm competes. This can help the management to create decision what suitable time to production. Last segment is global segment. Datin should know the global environment where existing markets are changing and thus taking the opportunity to make OKB Bhd well known by expanding the business and making improvement and innovative improvement on their products that are different from other competitors.
The five forces of competition model are threat of new entrants, bargaining power of the supplier, bargaining power of the buyer, threat of the substitute products and intensity of rivalry among competitors. The threat of new entrants is important factors to identify since it can threaten the market share of the existing competitors. In this case, OKB must have their own strategy, vision and mission in order to compete with new entrant by improving their products image, packaging and make some innovation in order to create competitive advantage. Next is threat of substitute products. In this case, OKB have another competitor that provide and sell same products for consumer such as Guardian.
Therefore, OKB must make a study and research how to faced this problems and attract their customer. Bargaining power of supplier is a situation when the supplier use to expert power over firms competing within industry. OKB major supplier is Akar Enterprise. In order to have enough resources and fulfill the demand, OKB should buy the resources from other supplier so that they are not facing problem such as insufficient material and high price of resources charges by supplier.
Next is bargaining power of the buyer. Buyer mostly more attract with product that offer a lower price and give them a higher benefit and satisfied their interest. OKB should improve their product in taste and product image and give a reasonable price in order to attract customer. Last forces is intensity of rivalry among competitors. The competitors always alert and beware about their competitor. This is because any changes by another company made can affect their business. So they must take a action in order to ensure customer will loyalty to them.