Critical Success Factor

Issue

Ways to improve

The sales of the company are decreasing but operating cost is increasing. This is because players in FMCG industry faced pressure to reduce prices that stemmed from market. Due to low entry barriers, the existences of multiple private labels that make consumers prefer quality products. Rising raw material prices also one of the factors why operating cost increasing.

1) Increase sales; the company needs to increase their product marketing on social media. Company also needs to do promotion or discount on their product to attract the consumer to buy their product.

2) Reduce operating cost; cut all unnecessary cost such as expel inefficient staffs. The company also needs to stop wasteful use of water and electricity.

In 2008, as well as the preceding years, the company had been having negative cash flows. This was due to the mismanagement of inventory, poor asset management, and poor credit control as company’s overall account receivable showed an average overdue of more than 90 days.

1) Improve credit control; Give credit sales to selected buyers only. Company also must strict with all debtors such as give penalty for the late payment. Give discount also can encourage early payment.

2) Improve asset and inventory management; Auditing regularly on asset and inventory. Besides that, the management also needs to make a proper system for inventory.

Struggling to capture for consumers “brand loyalty. This is due to the emergence of competitors. The company had to compete based on quality, cost and service.

Issue

1) Added value to the product; The company need to do research and development to their product to ensure their product always cater with consumer demand.

2) Effective promotion; Discount, free gift, and good advertisement will ensure consumers stay with their products.

Ways to improve

There were a number of empty factories with old steel structures intact for the last 10 years. Azmi also found heaps of obsolete spare parts left untouched in the store room. This show the company has many of unutilized of assets.

1) Lease the empty factories; The company can lease the empty factories to the third parties. This can generate extra income to the company.

2) Sold unused asset; Sent all unutilized assets to scrapyard to get some money.