Supply Chain Management

1. SEGi UNIVERSITY
EXPORT & SUPPLY CHAIN
MANAGEMENT
Tutor:
Students:
Dr. Shaheen
Mahsan Bazazan (SCM 018003)
Azamat Ospanov (SCM 019903)
Ning Yue (SCM 018246)
Alisher Mamedov (SCM 021951)

2. TOP GLOVES
Background
∗ Established in 1991
∗ Operates in 180 countries
∗ Has 23% of global market
∗ 20 factories worldwide
∗ 13 types of gloves

3. Target country:
KAZAKHSTAN

4. PESTEL analysis

5. POLITICAL
∗ Political stability
∗ From 1991 attracted $180 bln. of investments
∗ Member of more than 10 international
organizations
∗ 59th of “Ease of doing business index”
∗ Government controls 80% of medical institutions

6. ECONOMICAL
∗ Healthcare sector has 3,2% of GDP
∗ TOP 10 most improved countries (7,5%)
∗ Free trade practices promotion
∗ Foreign direct investment encouragement
∗ Small and medium-sized businesses
support

7. GOVERNMENT SPENDINGS
(USD, billion)

8. Taxation
∗ The income tax for
corporate is 20%
∗ The Value Added Tax (VAT)
is 12%
∗ The nonresidential give 15%
additional tax on their net
profit, but this can be
reduce by 5% after proving
double tax treaties .

9. SOCIO-CULTURAL
ASPECTS
∗ Young country
∗ Immigration policy (oralman)
∗ Geographic location (Central Asia)
∗ High level of oncological diseases
∗ The concept of demographic policy
and strengthening the family

10. TOTAL FERTILITY RATE
2005-2009

11. HEART OF EURASIA

12. TECHNOLOGICAL
∗ Less manufacturing
experience
∗ Developing country
∗ Imported equipment
∗ Basis for the production of
medical equipment

13. LEGAL
Import Regulation
∗ Medical equipment, Medicines, Petroleum
exploitation equipment, chemical product can be
imported without license in Kazakhstan
∗ Minimum time for export is 77 days
∗ 11 documents required for this
∗ The cost of import is US $2600 (per container)
(Trading Across Borders)

14. PORTER’S FIVE FORCES

16. STRENGTHS
∗ Size and wide product range
∗ Technical know-how
∗ Capacity to maintain or expand market share
∗ Experience
∗ High product quality (BRAND NAME)
∗ Low cost structure
∗ Infrastructure and reliable energy supply

17. WEAKNESSES
∗ Price controlled by purchaser
∗ Long-term brand
∗ Size and strong growth
∗ No long-term contracts
∗ Some products have dependence for oil price

18. OPPORTUNITIES
∗ Strong government support
∗ Comfortable regulations
∗ Rising government expenditure on healthcare.
∗ Strong expansion
∗ Outsourcing by MNCs/local companies
∗ Merge (TOP GLOVES with local firm)
∗ Market segmentation
∗ Exporting gloves to neighbor countries
∗ Ability for future M&As

19. THREATS
∗ Custom Union (Kazakhstan, Russia and
Belarus).
∗ Highly competitive market
∗ Volatility of profit (price for oil)
∗ Subject to price war
∗ Insufficient supply

20. SWOT analysis: localization
∗ Why Localize
∗ Decrease tax rate
∗ Decrease transportation and management
cost
∗ Quick reaction(supply, management,
market, legal issues)
∗ Material solution

21. SWOT analysis: OBM
∗ OEM(original equipment manufacturer)
manufactures products or components
that are purchased by another company
and retailed under that purchasing
company's brand name
∗ OBM(original brand manufacturer)
OBM, is typically a company that sells an
product made by a second company or
including a component thereof from a
second company sources as its own branded
product

22. SWOT analysis: OBM
∗ OEM transfer to OBM
OBM
OEM

23. Strategy of TOP GLOVES
∗ Indirect export
∗ Union with local firm
∗ Open factory after 1-2 years
∗ Expand production lines

24. CALCULATIONS
∗ Cost of pack of medical gloves = $5
∗ Transportation costs = $7430
∗ 1 cargo = 500,000 packs = $ 2,5 mln.
∗ Size of cargo = 26 tonnes
∗ Klang (Malaysia) – Qingdao (China) – Almaty
(KZ)
∗ Delivery = 40 days
∗ Cost of import = $ 2600

25. Why Almaty city?

26. EXPECTED PROFITS
∗ Overall spending =
= $ 2,510,030
∗ Profit = + $1 per pack = $
1,000,000

27. CONCLUSION
Kazakhstan is ideal to export, because
1.Political stability
2.Economic situation
3.Geographical location

28. Thank You
For Attention!