Rental 7 Business Expansion

CONTENTS

Page

Topic.................................................................... 3

Introduction - Company Profile..................................... 3

Research Purpose...................................................... 4

Contextual Context.................................................... 5

Research Question..................................................... 9

Research Method and Validity....................................... 11

Quantitative research......................................... 11

Qualitative research.......................................... 12

Appendix 1 (Time & Resources Requirement).................... 14

Appendix 2............................................................. 15

Appendix 3............................................................. 16

References.............................................................. 17

Bibliography............................................................ 18

Topic

To grow Multistates rental business and leverage on its success for expansion into southern Peninsula Malaysia and Batam Island in Indonesia.

Introduction - Company Profile

With a history of about twenty-seven years, Multistates started as a partnership in 1975, and converted into a Private Limited Company in 1979. Multistates commercial activities are divide into four areas, namely:

a) Rental - In the rental and trading department, Multistates are dealing with equipment such as generators, air compressors, welding machine, aerial work platform, light and heavy construction equipment, and more.

b) Service and Repair - Service and repair department cater to both commercial and governmental clienteles, undertaking service and repair of vehicles and construction equipment.

c) Fabrication works - This department undertakes refurbishment works on old construction equipment, industrial vehicles, and special vehicle.

d) Machining department - involve precision machining of materials ranging from high tensile steel, stainless steel to soft material such as copper and aluminium and composite fibre.

Multistates is a small family owned business, which are classified under the Small and Medium Enterprise (SME) category. Being a typical local Chinese owned family business, the manner its is being manage is very conservative. Although in business since 1975, their businesses have not expanded since then, currently serving only a niche market. With the current economic downturn and intense competition, especially in the local rental market, which contribute about sixty percents of the company annual turnover, this research will look into ways Multistates can grow its business and look into other areas for expansion, to avoid being caught in a situation of 'having all the eggs in a single basket'.

Research Purpose

The objectives of this research is firstly to investigate and identify Mulitstates capabilities, i.e. factors that set Multistates apart from other companies in its field: such as the qualities of its solutions, the quality of its service delivered, the quality of its people, and the quality of its equipment. The understanding will help the company to formulate a draft growth plan for the local market.

Secondly, the purpose of this research will look into why Multistates, whose name is synonymous with quality equipment and services, should leverage on its name as a brand. In a McKinsey article on brand leverage by David C. Count et al, they suggests that at least three factors appear to be driving the superior economics of diversified brand leverage. By leveraging a brand widely tend to spread brand management support costs among the products range, thus helping to bring down the costs per product line.

Thirdly, relationship benefits seem to have growing importance for customers, whereby building relationship through loyalty program, better service and better understanding of customers are providing more than functional benefits.

The research purpose is also to suggest an operating model for expansion and look into mean of building a strong management team to meet the short and long-term growth challenges face by Multistates.

The practical purpose is that this research could be a vessel for Multistates's management to conduct further research into area of interests to fit into its business expansion strategy.

Joining the equipment rental industry since the early 80's, and having worked in American and European MNC, as well as a local rental organization with regional operations, it will be my personal purposes to try and apply my working experiences, together with the knowledge acquire through the MBA program into this area of research and identify areas suitable for improvement and application which might be of interests to an SME organization.

Conceptual Context

This research proposal will follow an deductive approach to the critical review of theories. The purpose of the review is to develop a good understanding and insight into relevant previous research and the trends that have emerged.

`

SWOT Analysis

My research will use SWOT to identify those factors that influence the organization. Also known as 'WOTS up', SWOT is the acronym for strengths, weaknesses, opportunities and threats. Ansoff has referred to the analysis of strengths and weakness of organizations following the formulation of objectives, and to threats and opportunities in the process of strategic change . A SWOT analysis summarises the key issues from an analysis of the business environment and the strategic capability of an organization. The aim is to identify the extend to which the current