Giant Supermarket Case Analysis

EXECUTIVE SUMMARY

This paper is a company analysis on Giant Hypermarket Malaysia in general, but specifically focusing on Giant Hypermarket Sabah. Giant Hypermarket is a major supermarket and retailer chain in Malaysia. It is a subsidiary of Dairy Farm International Holdings (DFI) and is headquartered in Shah Alam, Selagor. In this paper, firstly we focus our analysis in identifying the Strength-Weaknesses-Opportunities-Threats (SWOT) of Giant; in addition, we constructed a SWOT Matrix for Giant where we identified the SO, ST, WO and WT strategies, which we think Giant should apply to improve their competitiveness. Next we focus our analysis on the external as well as the internal analysis on Giant. In the external analysis, we center our analysis based on two instruments that is the General Environment which is also known as the PESTLE analysis to help us to understand the external environment in which the organization operates, and also Porter's Five Forces Model to identify their industry competitiveness. On the other hand, in the internal analysis, we also used two instruments to analyze Giant, which is by doing an analysis on their Value Chain as well as by identifying their market growth and market share in BCG Matrix. Lastly, we conclude our analysis with some recommendations that we suggest Giant should focus on to better improve their supermarkets.

INTRODUCTION

Giant Hypermarket, which is owned by Giant Capital Holdings (GCH), is one of the largest hypermarkets in Malaysia. It was founded in 1944 by the Teng family in Kuala Lumpur. It's headquarter is based at Shah Alam, Selagor, meanwhile Sabah-Sarawak-Brunei Regional headquarter is located in Kolombong Outlet, Kota Kinabalu. The key people to the success of Giant Hypermarket are the Teng Family themselves, and CEO Dato' John Coyle.

Giant is operating under the retail industry. Its main competitors are Servay, Milimewah, and Chua Kah Seng in Sabah, while Mydin for the western part of Malaysia. Giant's mission was always been to offer a wide variety of products at the lowest possible price. Their slogan which says "Everyday Low Prices, big Variety and Great Value" communicates the company's mission to the public.

Although Giant Hypermarket had been long operating at the western part of Malaysia, its operation is fairly new to the local people of Sabah. Knowing this fact, Giant has included states such as Sabah, Sarawak, and countries such as Brunei in their strategic plan for expansion. In order to implement their strategic plan, their strategy includes identifying stores to takeover (i.e. Likasmart in Sabah), and introducing low prices by having staffs surveying competitor's prices at major supermarkets outlets.

Giant Hypermarket currently has around 1,000 employee in Sabah itself, and 10,000 employees in total nationwide. Some of the employee benefits that Giant employee receives for working in Giant are employee insurance, a 10% discount when purchasing within group (i.e. Giant Hypermarket, Guardian Pharmacy, and Cold Storage).

Besides having plenty of outlet stores around Malaysia, Giant also has outlet stores around the Southeast Asia countries such as Singapore, Indonesia, Vietnam, India and also Hong Kong. Information about Giant Hypermarket and promotions details can be accessed through Giant's Official Website which is www.giant.com.my.

Below is the price comparison we did during our interview visit to Giant Kolombong, between Giant house brand products with other major brands. It is clear that Giant house brand products are cheaper compared to other major brand which is as listed below:

Product Giant Brand

(RM) Other Brands

(RM)

Baby diapers (M) 27.49 35.99 (Pampers)

Dish washer 3.79 4.39 (Sunlight)

Liquid Softener 6.29 6.99 (Softlan)

Sos Ketchup Chili 1.99 2.29 (Maggi)

Box Tissues (4's) 6.99 7.89 (Premier)

Mineral Water (1 L) 0.89 2.19 (Spritzer)

(500 ml) 0.69 1.19 (Spritzer)

BACKGROUND OF THE COMPANY

Giant Hypermarket is a major supermarket and retailer chain in Malaysia. It is a subsidiary of Dairy Farm International Holdings (DFI).

The Giant store brand was founded by the Teng family as a simple grocery store in one of the suburbs of Kuala Lumpur in 1944. Its mission was to offer a wide variety of products at the lowest possible prices. As its reputation grew, so did its business.

Dairy Farm, which acquired Giant in 1999, recognized that the key to Giant's success had been its ability to continuously offer value for money products. It retained this core principle even as it began transforming Giant into a national and international brand.

After six years of effort, which included redesigning the stores, the introduction of the non-food products into the Giant hypermarkets, the implementation of international retail standards that includes safety, cleanliness, structured training, and a vibrant shopping environment as well as centralized buying functions and improved operations, Dairy Farm has made Giant the undisputed leader in Malaysia's retail sector.

In 1999, the first Giant Hypermarket store opened in Shah Alam, Selangor. By 2007, the company had grown to operate a total of 85 hypermarkets/ supermarkets in Malaysia with outlet size ranging from the 350,000 sq. ft hypermarket in Shah Alam to the 11,000 sq. ft supermarket in Bangsar, Kuala Lumpur. The chain also includes 7 stores in Singapore and 15 hypermarkets in Indonesia. Giant hypermarkets offer a wide range of local merchandise, such as fresh local fruits, vegetables, and seafood within a wet market environment.

SWOT ANALYSIS

A SWOT analysis summaries the key issues from the business environment and the strategic capability of an organization that are most likely to impact on strategy development. It is also useful as a basis against which to generate strategic options and assess future courses of action. The aim is to identify the extent to which the current strength and weaknesses are relevant to