Equity Contribution Executive Summary This report focuses on developing corporate strategies for Holcim Singapore to sustain its competitive advantage over the next five years. Using findings from assignment 1 and TOWS analysis, we would have a greater understanding of the strategic dilemma of Holcim Singapore and its resource capabilities, hence making strategic recommendations accordingly. Relevant theories and frameworks would be used to support the proposed strategic recommendations. The strategic recommendations would include the proposed actionable plan and proposed corporate level strategies over the next five years. The proposed actionable plan for Holcim Singapore would be the supplying of building materials for four major public sector construction projects under the National Development Plan (NDP), specifically Master Plan-Cross island line, Jurong Innovation District, Mediapolis and Woodlands General Hospital.   The corporate level strategies implemented over the next five years focuses mainly on growth and stability. The proposed growth strategies for Holcim Singapore would be concentric diversification and backward vertical integration. Concentric diversification would be carried out through horizontal integration by acquisition. Backward vertical integration is done through joint venture. Advantages and disadvantages of the strategies would be taken into account for a more holistic approach. The five year plan would encompass both the corporate level strategy and actionable plan. Stability strategy would be carried out in the first two years for proper planning to be done. Growth strategies would then be carried out over the next three years for NDP and implementation of acquisition and joint venture. Retrenchment strategy would be used only for contingency. To support implementation of strategic plan, we would propose to redesign, support and monitor the organisational processes of Holcim Singapore through change management and strategic control systems. Finally, the measurement and evaluation of recommendations would be conducted through balanced scorecard and thus, building blocks of competitive advantage. Strategic Dilemma As derived from our assignment 1, with the Porter’s 5 forces analysis and the PESTEL of Holcim in Singapore’s environment and industry, we can conclude that Holcim (Singapore) faces certain threats, for instance: Firstly, there is an increase in aging population of 65 years old and above over the years from 2007 to 2015 with latest statistic of 11.2 percent of total resident population in 2014 and 11.8 percent of total resident population in 2015 (Singstats 2016). The increase in an ageing population would lead to an increase in the demand of construction of infrastructures such as hospitals. Secondly, there is a shortage of labor due to the reduced government quota in attempts to decrease over-reliance on foreign workers. This caused employers fewer solutions to their labor shortage an ...

1. Equity Contribution
Executive Summary
This report focuses on developing corporate strategies for
Holcim Singapore to sustain its competitive advantage over the
next five years. Using findings from assignment 1 and TOWS
analysis, we would have a greater understanding of the strategic
dilemma of Holcim Singapore and its resource capabilities,
hence making strategic recommendations accordingly. Relevant
theories and frameworks would be used to support the proposed
strategic recommendations. The strategic recommendations
would include the proposed actionable plan and proposed
corporate level strategies over the next five years.
The proposed actionable plan for Holcim Singapore would be
the supplying of building materials for four major public sector
construction projects under the National Development Plan
(NDP), specifically Master Plan-Cross island line, Jurong
Innovation District, Mediapolis and Woodlands General
Hospital.
The corporate level strategies implemented over the next five
years focuses mainly on growth and stability. The proposed
growth strategies for Holcim Singapore would be concentric
diversification and backward vertical integration. Concentric
diversification would be carried out through horizontal
integration by acquisition. Backward vertical integration is done
through joint venture. Advantages and disadvantages of the
strategies would be taken into account for a more holistic
approach.
The five year plan would encompass both the corporate level
strategy and actionable plan. Stability strategy would be carried
out in the first two years for proper planning to be done. Growth

2. strategies would then be carried out over the next three years
for NDP and implementation of acquisition and joint venture.
Retrenchment strategy would be used only for contingency.
To support implementation of strategic plan, we would propose
to redesign, support and monitor the organisational processes of
Holcim Singapore through change management and strategic
control systems. Finally, the measurement and evaluation of
recommendations would be conducted through balanced
scorecard and thus, building blocks of competitive advantage.
Strategic Dilemma
As derived from our assignment 1, with the Porter’s 5 forces
analysis and the PESTEL of Holcim in Singapore’s environment
and industry, we can conclude that Holcim (Singapore) faces
certain threats, for instance:
Firstly, there is an increase in aging population of 65 years old
and above over the years from 2007 to 2015 with latest statistic
of 11.2 percent of total resident population in 2014 and 11.8
percent of total resident population in 2015 (Singstats 2016).
The increase in an ageing population would lead to an increase
in the demand of construction of infrastructures such as
hospitals.
Secondly, there is a shortage of labor due to the reduced
government quota in attempts to decrease over-reliance on
foreign workers. This caused employers fewer solutions to their
labor shortage and as they would not be able to spare the
workers for training and upgrading due to shortage of hand and
limit to the degree that they can automate (AsiaOne 2015).
According to MOM (2015), Foreign employment continued to

3. grow, but slightly lower as of 2014, with a moderate paced of
an estimated of 2.0% in 2015. This percentage is significantly
lower than in 2011 to 2013.
Lastly, the banning of sand from Thailand has resulted to major
issues for Holcim. Sand is an essential element required for
concrete, thus, there were concerns raised by the construction
sector, especially in Singapore, where it do not have much
availability of sand. The banning would disrupt projects such as
the Mass Rapid Transit (MRT) system (NLB 2007).
Hence, we will be performing TOWS to determine if Holcim
will succeed or fail in the upcoming years, due to strategic
dilemma.
External-Internal Analysis
According to R.G. Dyson (2004), SWOT analysis targets to
identify an organization internal appraisal through strengths and
weaknesses as well as the environment external appraisal of
opportunities and threats. After identifying these factors,
strategies are developed to build on the strengths, eliminate the
weaknesses, exploit the opportunities or counter the threats.
After analysing the SWOT, TOWS matrix conceptual framework
are being used. It combines the external factors with those
internal of an organisation then strategies are developed based
on this matrix. The matrix is used by managers to analyse the
situation of the organisation and to develop strategies, tactics
and actions for effective execution of the organisation
objectives and mission, (H. Weihrich 1982). There are four
proposed strategies: ‘Maxi – Maxi’ (S-O) – to maximize Holcim
strengths by taking advantage of external opportunities. ‘Mini –
Maxi’ (W-O) - to minimize Holcim weaknesses by taking
advantage of external opportunities. ‘Maxi – Mini’ (S-T) – by
using Holcim strengths to avoid or reduce the impact of external
threats. ‘Mini – Mini’ (W-T) - utilising defensive tactics

4. directed at reducing internal weaknesses and avoiding external
threats.
External
Internal
Opportunities(O)
1. Government funding and incentives would allow Holcim to
produce more sustainable materials.
2. Population growth would increase the demand for Holcim
services and products for future National Development Plan
(NDP).
3. Concern for climate change
4. Focus on rationalization to reduce cost of operation
Threats(T)
1. Banning of sand will reduces the resources required for the
country and Holcim’s building project.
2. Low barrier of entry
Strength(S)
1. Holcim SG is the only manufacturer of grey cement
2. Holcim is able to make use of mass production to reducing
costs and achieving economies of scale
3. Focuses on sustainable and eco-friendly environment
4. Innovation drive to ensure new services and products (EARN
framework)
5. Centre of Excellence (COE) and Customer Service Centre
(CSC)
SO
· Holcim send employees to training in order to improve
themselves and achieve efficiency

5. · Using Conwood to improve quality of living for building of
flats
· Funding for more innovative
· Sales ability to mass produce allow them to cater the
increasing demand to build flats
ST
· Holcim patents rights for their value-added and innovative
solutions which protect them against new competitors
· Developed Product Development and Technical Services
department to focus on developing innovative value-added
solutions and products
· Gain Market Share
· Innovate ‘Turning Black into Gold’ by salvaging waste copper
slag from the ship repair industry into effective sand substitute
which reduces transportation and imports.
· Holcim Green for construction projects as it has lower carbon
footprint, improved
material strength and reduced need for sand.
Weaknesses(W)
1. High transportation costs of raw materials
2. Lack of Rare products and Lack of Inimitable.
WO
· Make use of Government fundings for Research and
Development (R&D)
· Outsource delivery to reduce cost by transferring duty to
outside supplier.
WT
· Develop a product that uses less sand which is rare and
inimitable
· Develop rare and inimitable product to secure project for new
entries
Strengths – Opportunities

6. Holcim always sends their employees to standardized training to
learn about the best practices, appropriate processes and share
their personal frontline processes so as to improve themselves
and achieve maximum efficiency. The government also offers
grants and funds such as Initiatives in New Technology
(INTECH, Economic Development Board 2016) for companies
to generate more innovations. Sales ability to mass produce its
products and services allows Holcim to cater the increasing
demand to build flats due to population growth.
Strengths – Threats
Holcim has attained patents rights for their value-added and
innovative solutions since 2011 which gives valuable means to
newly-invented products by preventing imitations as well as
generating monopoly rents. Holcim also has Product
Development and Technical Services department to focus on
developing innovative value-added solutions and products,
which is a vital element to safeguard its tangible and intangible
assets against competition in the market. Singapore’s
government is encouraging the usage of Holcim Green for
construction projects as it has lower carbon footprint, improved
material strength and reduced need for sand. It’s other
innovative capability ‘Turning Black into Gold’, works by
salvaging waste copper slag from the ship repair industry into
effective sand substitute which reduces transportation and
imports. All in all, Holcim will be able to gain more market
share too.
Weaknesses – Opportunities
Holcim makes good use of the government’s fundings and
grants for their Research and Development (R&D) purposes.
Holcim has outsources delivery to reduce cost by transferring
duty to external supplier. Adding on, Holcim also focus on
rationalization to reduce cost of operation.
Weaknesses – Threats
With regards to the banning of sand which leads to reduction of
resources required for the country and Holcim’s building
project, Holcim should develop a product that uses less sand.

7. With regards to the low barrier of entry, Holcim should develop
rare and inimitable product to secure project for new entries. In
addition, Holcim can attempt to look for solution to gain access
to sand.
Conclusion
Concluding on the strengths and weaknesses of Holcim, we can
observe that there are far more strengths than weaknesses.
Adding on, comparing on the strengths’ opportunities and
threats of Holcim, we can notice that there are slightly more
threats than opportunities. Therefore, utilizing their strength,
Holcim can take advantage of these opportunities and creates
solutions to resolve the threats, thus, achieving sustainable
competitive advantage and succeed in the industry.
Overview of Actionable Plan
According to Singapore Budget (2016), it is expected that the
total government spending in 2016 will increase by 7.3% as
compared to 2015, amounting to $5.0 billion. It will be mainly
spent on Education, Healthcare and Urban development.
To safeguard the long-term necessities of Singapore’s populace
and sustain the competitive advantage of Singapore’s economy,
Building and Construction Authority (BCA) has placed its focus
on large public sector infrastructure projects. The average
construction demand is expected to be maintained between $27
billion to $36 billion in 2016 and 2017 and $26 billion to $37
billion in 2018 and 2019.
We have highlighted four major public sector construction
projects from the National Development Plan (NDP) that
Holcim Singapore can engage in:
Digital Media
Firstly, Holcim Singapore can engage in providing building
materials in constructing Singapore’s first digital media hub,
Mediapolis. Mediapolis will contain a media ecosystem,
involving R&D activities, digital production, industry-
responsive education and etc. It focuses on the R&D in

8. interactive digital media and the development of high-quality
media content. This project involves a 19-hectare development
and is expected to be completed by 2020 (AHK 2014).
Jurong Innovation District
Secondly, Holcim can engage in providing innovative resources
for Jurong Innovation District (JID). JID, a government
initiative designed to encourage innovation, is projected as the
futuristic industrial park of Singapore (Singapore Budget 2016).
JID will cluster students, innovators, researchers and businesses
to innovate and develop revolutionary products and services,
thus, creating an environment that offers various activities
within a single next-generation industrial district. The initial
construction phase is estimated to be completed by 2022.
To develop innovative and sustainable infrastructure solutions,
Jurong Town Corporation (JTC), a national developer of
industrial infrastructure, has launched an Open Innovation Call
to invite innovative technological companies in the private
sector (Singapore Budget 2016). Hence, Holcim Singapore can
apply and be part of the project by developing innovative
solutions, and transform Singapore to a future of innovation for
enterprise, learning and living.
Transport
Thirdly, Holcim Singapore can engage in providing building
materials to support the MRT Master Plan-Cross island line.
Being the longest underground automated train in Singapore,
this project involves the construction of a 40km fully-
underground Downtown Line (DTL) with 34 stations.
This DTL will connect the eastern and northwestern parts of
Singapore to the Central Business District (CBD) and Marine
Parade. Currently, the first two phases of the project is
completed as of 2016 where 18 stations are newly-opened. As
for stage 3, it is expected to be completed by 2017, connecting
between Fort-canning to Expo, with an opening of the final 16
stations. The final completion of this project is expected to be

9. completed by 2025, with an extension of the current East-west
and lines that connects to Marine Parade (AHK 2014).
Hospital
Lastly, Holcim Singapore can engage in providing eco-friendly
and innovative building materials to aid the construction of
Woodlands General Hospital (WGH). According to ST (2013),
there will be an increase in healthcare institutions by 2030, with
up to 12 polyclinics and 4 more public hospitals.
WGH is an integrated healthcare facility that comprises of a
small hospital, nursing home and community hospital. Due to
the aging population, there is an increase in projected demand
for healthcare services. Hence, this project will aid Singapore in
catering to the demand. This project will be constructed on a
land area of 7.7 hectares that can accommodate up to 1,800
beds. This construction is expected to begin from 2020 to 2030.
Hence, Holcim can engage in this project and provide resources
suitable to build an eco-friendly healthcare infrastructure (MOH
2014).
Corporate Level Strategy
According to Johnson, Scholes and Whittington (2006),
corporate strategies aids an organization in achieving its
corporate objectives. By utilizing its resources and
competencies and capabilities, an organization can develop
corporate strategies to take advantage of the opportunities, and
protect themselves from the possible threats (Schuler and
Jackson, 2007). Hence, the following corporate strategies are
selected to promote the success of the business level strategy, in
order to achieve sustainable competitive advantage which leads
to higher profitability.
According to Hunger & Wheelen (2012), growth strategies
expand the company’s activities, stability strategies make no
changes to the company’s current activities and retrenchment

10. strategies reduces the level of company’s activities.
Growth Strategies
Vertical Integration
Vertical integration (VI) is a risky, complex and expensive
strategy. It involves expanding Holcim’s current business
forward or backward its production path. The decision to
vertically integrate stems from Holcim being in an industry
chain where it is not beneficial to perform bilateral trading.
Holcim produces building materials and need sand constantly.
Given the fixed asset technologies and frequent transactions,
buyer and seller often have to mediate an ongoing stream of
transactions. Thus, combining these two stages in the
production path will result in lower risk, cost and is more
effective (Stuckey, J., & White, D. , 1993).
Below is a figure which shows criteria for integration decisions,
indicating the kind of cost, risk and coordination that need to be
ironed out before making an integration decision.
The advantages of choosing this strategy typically includes
lower costs by eliminating market transaction costs; better
quality of supplies; attaining critical resources via VI;
coordination in supply chain refines; expansion of market share;
distribution channels are stable; enables investment in
specialized assets (site, physical-assets and human-assets); new
competencies.
Equally, the disadvantages could be higher costs if the company
is incompetent in managing new activities; the ownership of
supply and distribution channels cause a lack of competition
which could lead to lower quality products and reduced
efficiency; inflexibility from increased bureaucracy and higher
investments; higher potential for legal repercussion as Holcim

11. may become a monopoly; lack of commonality in new and old
competencies may result in competitive disadvantage. Vertical
integration tends to minimize risks and transaction costs, but
demands heavy setup costs, and its coordination effectiveness is
typically dubious.
The proposition is for Holcim to integrate its business by
entering an area serving as a supplier, in a process called
backward vertical integration. Three practical reasons to
vertically integrate as firstly, the supplier has more market
power than Holcim. Secondly, it creates market power and raise
barriers to entry. Thirdly, this responds to the industry life
cycle.
Backward Integration
The reason for choosing a backward integration varies. In this
case, Holcim is believed to be paying more for buying materials
than it would producing its own, thus addressing the inclination
to improve its dependability of supply of raw materials.
Purchasing a supplier may effectively improve efficiency and
cost savings through cutting transportation costs, improving
profit margins that ultimately makes the company more
competitive. As a backward integration requires Holcim to
produce a commensurate return on its investment, as integration
into raw materials like sand in particular Singapore may require
an enormous investment. Therefore, there are two reasons
Holcim should choose to enter a joint venture. Firstly, it helps
Holcim pursue more strategic opportunities than it could alone,
and gain sustainable competitive advantage in the building
materials industry. Additionally, it can help lower costs,
increase revenues, gain access to partner’s technology and even
expand their reach.
There is a need to address the risk resulting from an expansion,
as strategic managers have to improve their band of

12. competencies and gain more responsibilities in the vertically
integrated firm. Ensure critical complementary assets
specialized for the needs of the firm are owned for Holcim to
successfully commercialize and profit from their innovation.
For example, the sand company may lack the necessary
complementary assets to commercialize their innovations.
Therefore, form a collaborative partnerships with Holcim who
possesses the necessary complementary assets such as
manufacturing capabilities, marketing channels, brand
name(Rothaermel, 2001).
Implement through Quasi Integration Strategy: Joint Venture
Quasi-integration is the use of long term relationships in place
of full ownership of operations backward the supply chain. The
importance of a quasi integration strategy prevents Holcim from
“over-integrating” by addressing the problems of vertical
integration which creates a strategic fit. The strategic fit is
determined by the degree to which Holcim matches its resources
and capabilities to the opportunities present in its external
environment. To achieve a dynamic strategic fit, Holcim will
have to predict the timing, direction and magnitude of strategic
changes based on a the specific environmental forces and
organisational resources(Zajac, Kraatz and Bresser, 2000).
As Singapore is not allowed to import sand directly, the
intention here is to pair up with a firm which has the know-how
for sand import. A JV is to mitigate the threats of the sand ban
lower the capital costs and offer more flexibility than a vertical
integration. One such company would be Templeton Resources
Inc., a company from The Philippines but owns an office in
Singapore called Templeton Resource Ptd Ltd. The firm produce
the best quality of construction Sand, Reclamation Sand and
magnetite iron sand, which is used as raw material for making
steel and high quality sand suitable for reclamation and
construction(TEMPLETON · Home, 2013). This way, through a
joint venture with the Singapore office, Holcim can gain access

13. to sand.
A joint venture would be formed and sustained successfully
when both companies have assets to offer each other. Being a
large company, Holcim Singapore has the financial capability to
order large quantities of sand. Hence, what Holcim Singapore
can offer to its joint venture partner is the high sales revenue
from its large purchases of sand. On the other hand, what the
sand company offers for Holcim Singapore would be the supply
chain efficiency and technical knowledge. Joint venture is a
safer strategy as Holcim Singapore would not have to incur high
risk and heavy investment costs of entering a market that they
are unfamiliar with. By working together on this joint venture,
Holcim and the sand supplier can both gain access to partner’s
technology and technical knowledge and even expand their
reach and pursue more strategic opportunities than they achieve
on their own, which allows them to lower costs and increase
revenues.
Thus allowing both firms keep their corporate identities,
potential win-win situations are maximised, and the typical
dispute in trade relationships are minimised. This facilitates the
exchange of expertise, information, services and goods between
firms while maintaining a formal trade relationship(Fulton,
Popp and Gray, 1998). This strategy provides sufficient
protection against a vertical market failure and market power
held by the sand supplier.
Last but not least, it is always important to be adaptive and look
out for changes in the market structure in order to decide if
there’s a need to change Holcim’s vertical integration strategy.
Also, in the case the strategy turns out to be wrong.
Diversification
The more mature Holcim’s business gets, the more difficult it
becomes to increase profits or market share, especially when

14. exponential growth is a goal. Holcim’s current business
activities are incapable of reaching the desired level of
performance by their strategic objectives. Therefore, Holcim
should enter into other businesses to increase profitability
through diversification. A diversification growth strategy
suggest moving into a clearly differentiated business because of
synergy possible from the new business. Adding a new product
can increase sales and revenue as there remains little room for
new customer acquisition in Holcim’s current marketplace.
However, it is important when considering a diversification
opportunity to examine the effects it will have on production,
information technology, human resources, finance and
marketing. For instance, how operational stress may affect
productivity if employees have to multitask.
Related Diversification
We have chosen related diversification as one of our corporate
growth strategy, where Holcim expands its operations beyond
existing markets and products but operate within the same value
network. Moving into the prefabricated building materials
industry, Holcim will use its capital resources to acquire an
industry competitor.
Related diversification achieves the competitive advantage
which arises from having a larger size and scope of operation.
However, that static exploitation of economies of scope alone is
nearsighted. The main contribution of related diversification to
long-run, competitive advantage; namely the potential for
Holcim to expand its stock of strategic assets and create new
ones more rapidly and at lower cost than rivals who are not
diversified across related businesses (Markides and Williamson,
2007). Choosing to pursue a moderate-to-high level of
diversification, Holcim will apply a related-linked strategy and
share resources and activities between its business. For
example, Holcim generates more than 30 percent of its revenue

15. outside cement business as its other businesses are related to
each other in some manner using a related diversification
corporate-level strategy.
This aligns with Holcim’s current business level strategy which
converts into concentric diversification. Where the company
acquires new products or services to reach more consumers.
Holcim becomes more diversified in terms of products and
services as adding prefabricated business provides another
opportunity to share resources and activities for creating
shareholder value.
Horizontal Integration
Holcim seeks to diversify through horizontal integration to
lowers the cost structure of increasing product differentiation
and leverages at least one competitive advantage the acquired
company has. This ultimately reduces the amount of external
competition.
Holcim can reduce rivalry within the industry and increase
bargaining power over suppliers and buyers. Then by taking
advantage of strong commonalities between their value-chain
function, increase competitive advantage by allowing Holcim to
use organisational competencies it already possesses. Therefore,
it is proposed for Holcim to horizontally integrated and acquire
a company in the same industry value chain. This is a process
Holcim acquires a competitor, resulting in industry
consolidation.
Nonetheless, (Spengler, 1950) states that the decision to
integrate horizontally brings along the potential of antitrust
issues with the Singapore government, expected economic gains
never realised, less flexibility and destroy value instead of
creating it.
Implement through Acquisition

16. A principal way to enter into a new industry, the prefabricated
materials industry, is to perform an acquisition to pursue
horizontal integration and diversification. Through resource
sharing, operational combinations and knowledge transferring
promote the success of concentric diversification in the pursuit
of growth and increasing shareholder value.
In our opinion, the strategic rationale behind an acquisition, is
creating value by getting skills and technologies faster than
they can be built, as the company acquired will allow Holcim to
assemble a broad line of building materials, turning them into a
key player in the industry(Koller et al., 2005). There are
currently five suppliers (Swee Hong / Unitised Building
Australia, Moderna Homes, Sembcorp EOSM, Unitised Building
Australia / UB RUSH and Teambuild) for PPVC in
Singapore(Ura.gov.sg, 2014).
However, even if we base the acquisition on these reason, it
would not create value if Holcim overpays. Preferably, buying
cheap would mean at a price below intrinsic value but those
opportunities are rare. The possibility that Holcim pays too
much during an inflated market is a cause for serious
concern(Koller et al., 2005).
Stability Strategies
A stability strategy arises because of uncertainties, and the
company chooses not to change the company’s current
activities. It is a strategy by which Holcim stops the
expenditure on expansion, neither venture into new markets nor
introduce new products.
When Holcim plans to consolidate its position in the building
materials industry in the event of a recession or there is a
slowdown in the economy then it wants to have more cash in
their balance sheet rather than investing that cash for expansion.
When Holcim has an intolerable amount debt in the balance

17. sheet, it stops or postpones expansion plans because if it takes
more debt for expansion than it would not able to pay interest
rate, especially rise ones, on such debt and create a liquidity
crunch for the company.
When Holcim realises it operates in an industry which reached a
maturity phase and unforeseeable growth, then the company
should adopt the stability strategy. Once the gains from
expansion plans are less than the costs involved, Holcim applies
the stability strategy.
Retrenchment Strategies
As Holcim Singapore’s main strategies are growth and stability,
retrenchment strategies would be in the form of contingency
plans. Holcim Singapore adopts retrenchment strategies such as
re-engineering, restructuring and outsourcing of delivery of
building materials.
When it’s time to enhance productivity, it’s time for
reengineering. Reengineering can be done in the form of
outsourcing of delivery of building materials. The days of the
cement trucks are over as it becomes harder for Holcim to
perform Just in time(JIT) due to restrictive transport regulations
on cement trucks which impedes the ability to forecast demands
accurately. Holcim can opt to use a company with its own fleet
of crane like Pollisum Engineering Pte Ltd and outsource the
delivery of prefabricated building materials(Pollisum, 2016).
This approach of a partnership-like arrangement offers great
value to organizations engaged in strategic outsourcing, as it
best allows the parties to address key business considerations
during the term of the relationship(Chamberland, Chamberland
and Bio, 2016).
Holcim Singapore can also re-engineer its business processes.
Holcim Singapore’s reengineering process would be supported
by strategic control system, which encompasses the alignment

18. of proper structures and set control targets. The balanced
scorecard framework would be used to support the
reengineering process too. Internal Business process perspective
from the balanced scorecard framework helps prioritises which
business processes that produces greatest value to customers
and measures the effectiveness of business processes in order to
achieve core competences and maintain sustainable competitive
advantage. Hence, through strategic control system and
balanced scorecard framework, Holcim Singapore can
effectively and efficiently realign business processes, which
helps streamline operations and cut costs and become more
financially stable.
A critical success factor in shaping business process
outsourcing arrangement is the degree to which the customer
and the outsourcing provider have achieved alignment around
business objectives.
Retrenchment strategies can be in the form of withdrawing from
certain markets or the discontinuation of selling certain
products or service in order to make a beneficial turnaround.
Another retrenchment strategy would be restructuring. Holcim
Singapore would monitor and assess departments, and retrench
those who are underperforming according to the value chain.
Thus, planning process which takes the first two years of the
five year plan cannot be neglected, as goals, performance
targets and assigning of roles and performance checklists would
be discussed and agreed upon. All of these would be used to
assess the effectiveness of departments and help in
retrenchment decisions.
Proposed and Evaluate a Corporate Level Strategy (over the
next 5 years)

19. FIVE-YEAR PLAN
Year
Corporate Strategy
Proposed Action Plan
2017
Stability
As Holcim Singapore has the financial and organisational
capability, planning and implementation for joint venture and
acquisition can be done concurrently.
1) Planning for joint venture
· Establish understanding of need for joint venture for Holcim
Singapore
· Conduct market research for potential joint venture partners
· Screen and select suitable joint venture partner
The criteria for selecting a compatible partner would be high
financial capability, similar size and mutual dependency.
2) Discussion of terms of joint venture agreement
· Establish common aim of joint venture
· Establish what each party contributes to this joint venture
· Termination terms
3) Planning for acquisition
Just like joint venture, acquisition requires a long planning time
too. The planning is to ensure that Holcim Singapore does not
overpay or acquire too big a company that it have difficulty
operating in the future. Research would be done on potential
companies to acquire before screening and selection.
2018
Stability
1) Continued discussion of terms of joint venture agreement
The other terms to be discussed includes:
· Timeline of joint venture activities
· Assigning of roles for both partners

20. · Establish proper communication channels
· Plan for foreseeable problems and how to resolve them, in
order to be responsive and reduce hindrance of operations in
future
2) Legalisation of joint venture agreement
An attorney would be present. Both parties would read through
the terms of the joint venture agreement and sign to legalise it.
3) Continued planning of acquisition
4) Planning for horizontal integration
Searching and screening before selection of potential
competitors for horizontal integration
2019
Growth
1) Implementation joint venture and acquisition and horizontal
integration
Holcim Singapore can start selling prefabricated materials and
sand to construction projects.
2) Supplying of existing products and services and newly-owned
building materials (sand, prefabricated materials) for NDP
Projects
Media: Mediapolis by 2020
2020
Growth
Supplying of existing products and services and newly-owned
building materials (sand, prefabricated materials) for NDP
Projects
Jurong Innovation District (JID) by 2022
2021
Growth
Supplying of existing products and services and newly-owned

21. building materials (sand, prefabricated materials) for NDP
Projects
· Healthcare: Woodlands General Hospital by 2030
· MRT: Master Plan-Cross island line by 2030
CONTINGENCY PLAN
2017-2021
Retrenchment
Throughout these five years, Holcim Singapore might
experience uncertainties such as economic downturn or
breakdown of joint venture. Hence, Holcim might engage in
these retrenchment contingency strategies to cut costs.
1. Restructuring and Reengineering
Holcim Singapore would monitor and assess departments, and
retrench those who are underperforming. Or Holcim Singapore
might realign business processes.
2. Outsourcing of delivery of building materials
Supporting and monitor the implementation of Strategic Plan
For Holcim to successfully implement the above corporate level
strategies, the following organizational processes must be
redesigned: Organizational change, organizational structure,
organizational culture and strategic control system.
Organizational Change
For the above strategies to be in place, change management
must occur. Change management comprises various efforts to
introduce new processes while observing a systematical method
of reducing commotion to the existing processes (Lawler and
Sillitoe 2010).
The process of change involves planning, organizing,
coordinating and directing of processes through which change is
implemented (Gill, 2002). For Holcim Singapore to successfully
enact organizational change, it ultimately requires
transformational leadership (Eisenbach, Watson, & Pillai,

22. 1999), which aims to motivate and influence employees
(Spicker, 2012).
Holcim’s Chief Executive Officer (CEO), Dr. Sujit, as well as
the management can display transformational leadership through
conveying vision, promoting the acceptance of group goals and
altering followers’ fundamental beliefs, values and attitudes of
followers (Conger 1999). This would motivate employees to
perform above what is required of them (Bass, 1999).
According to Kurt Lewin’s model of change (Lewin 1947), it
consists of three distinct phases: Firstly, Holcim Singapore must
unfreeze the current work culture or processes. Secondly,
Holcim Singapore can introduce change by switching to a new
system. Lastly, Holcim Singapore must freeze the practices and
attitudes at the new system level. It is essential for management
to ensure that employees are aware of the new expectations or
processes for proposed changes to be incorporated.
Organizational Culture
One of the foremost driving and influential factor of a business
is the organizational culture (Smircich 1983). It reflects the
methods of allocating tasks, setting and achievement of goals
and influences the decision-making and response to threats and
opportunities (Stare 2012). Organizational culture is essential as
it defines the beliefs, values and work systems that facilitates
organizational learning as well as effective knowledge
management (Alavi and Leidner 2001).
Based on the contingency model, the organizational culture
must be consistent and support the choice of strategy (Klein
2011). The following are the methodologies that Holcim can
practice to align culture and the proposed strategies (Badovick
and Beatty 1987): (1) Identify the current organizational
culture, (2) Compare the social norms and beliefs to the
leadership style and tasks required so as to implement the
strategy type and (3) Develop organizational methods to
respond to inappropriate structures in the culture-strategy
relationship.

23. Strategic Control System
The critical factor in implementing the above strategies is
developing a strategic control system.
According to Bungay and Goold (1991), many large
organizations have created a strategic control system that
enables them in managing their long-term position. It focuses
on the level of strategy, key success factors and facilitates the
building of trust by imposing both parties (organization and
employees) to be explicit about achieving organizational goals.
The control system consists of 4 stages:
Firstly, Holcim must align appropriate structures. For effective
business strategies to be developed, organization must first be
reorganized. There are five sub-elements for organizational
structure: locus of decision-making, level of communication,
nature of formalization, number of layers in hierarchy and level
of horizontal integration (Plugge and Bouwman (2013). These
sub-elements support Holcim in organizing its tasks, processes,
resources and offers constructive influences to establishing
capabilities effectively (Nahm, Vonderembse and Koufteros
2003).
Secondly, Holcim must emphasize in building skills. An
introduction of a formal control system enables management
develop a simple tool and skills, dubbed a responsibility for the
future plans and the analysis which goes into them.
Holcim must place its focus on the evaluation of its businesses
and competitors. This enables Holcim to segregate the crucial
success factors and determine the required direction of change.
Thirdly, Holcim must set control targets for the organization.
Through a formal discussion, targets should be agreed and
established between the operating executive and shareholders of
the organization. A planning document must be prepared before
the discussion and comprises of recommendations for suitable
controls. It should also indicate the importance of key measures
of success and determine methods of measurement, for instance,
the balanced scorecard.
Lastly, once the process of strategic planning is well-

24. established and strategic controls are consistently agreed, the
bureaucracy of control must be dismantled. Formal requirements
can be less-strict and plans can be less-elaborated. This would
empower employees to explore various methods to achieve
organizational goals efficiently and effectively.
According to McKinsey 7Ss framework (Peter and Waterman
1980), there are seven interrelated S-elements to determine an
organizational efficiency: Strategy, Structure, Systems, Staff,
Style, Skills and Shared values. These elements highlight the
importance of the proposed new strategies for Holcim to build
on its sustainable competitive advantage by achieving
organizational efficiency, quality, innovation and customer
responsiveness.
Measurement and Evaluation of Recommendations
Balanced scorecard
Adopting the balanced scorecard as a strategic management and
planning system, it provides a broad perspective on Holcim
Singapore’s organisation. It shows four sets of perspectives to
understand a business, Financial Perspective, Customer
Perspective, Internal Business processes perspective and
Learning and Growth perspective (Kaplan & Norton 1992).
The balance scorecard uses these 4 perspectives to evaluate an
organisation's performance and allows the organisation to cater
its goals and targets to the strategy (Atkinson 2006). Viewing
Holcim Singapore from these four perspectives, the
identification of where Holcim Singapore’s strategic goals can
be examined and subsequently align business activities to its
strategy.
Learning and Growth perspective
This perspective seeks for innovation and learning, to create
value and continuity for improvement. A company’s value is

25. derived from its ability to learn and innovate so that it can
improve. To create more value, existing products and processes
must be improved continually as well as developing the ability
to come out with new products. Innovative measures includes
trainings for employees and the attitudes of corporate culture
for self-improvement. In the present climate of quick
technological development, the importance of competent and
resourceful workers having a continuous drive for learning is
significant to the success of firms. Kaplan and Norton (1992)
has added that learning is not just training but also consisting of
mentors for staff.
As such Holcim Singapore’s must establish infrastructures for
sustainable organisational growth through procedures and
employees as well as continually devote resources to updating
technologies and training employees.
Employee satisfaction and retention
The value of employees is ever more important especially when
there is an environment of labour shortage and increasing aging
population. Talent skilled workers have to be nurtured and
retained. Armitage (2013) reflected Holcim Singapore focus in
innovation and adopting sustainable practices. The on-going
vision for innovative solutions would lead to the improvement
and further trainings for employees when adopting and
improving technologies. Armitage (2013) also added an
emphasis on creating value for stakeholders, inclusive of
employees where Aon Hewitt has certified Holcim Singapore as
‘Best Employer 2014’ with regards to its exceptional employee
engagement and good leadership (Holcim.com.sg 2016).
Through the development of sustainable and innovative
practices, employees are able to progress in skills with good
leadership and guidance, where the satisfaction and retention of
competent employees are met.
Align personal Goals with company goals

26. Goal alignment of employees to the organisations can be a
decisive factor to the productivity and performance of the
organisation. By aligning employees to the company’s goals, the
firm can achieve higher performance. Thus measuring the
organisational culture in terms of adaptability will help in
employing new strategies for employees to work towards.
Implementing a culture set for dealing with different and
unclear situations leads to employees striving to solve complex
problems and face greater decision-making. Holcim Singapore
strategy implementations, require employees to follow the
organisational changes especially through joint ventures and
acquisitions where personal goals of growth can be realised
with the company’s growth in the new joint venture and
acquisitions of competitors lead to employees learning and
competitor’s knowledge and resources. With the alignment of
individual goals to the Holcim Singapore’s, motivation and
higher satisfaction will be fulfilled to grant Holcim Singapore
greater efficiency.
Internal Business process perspective
This perspective grants the management measures to assess the
efficiency of the business, where the products and services of
Holcim Singapore have to be tailored to the requisites and
demand of customers. It focuses on what the business should
excel at, where exemplary customer service and performance
can be achieved through the internal processes when customer’s
expectations are met. Theriou, Demitrades and Chatzoglou
(2004) has suggested business processes involving vital
technologies had to be identified to create further organizational
success. Holcim Singapore must identify business processes that
possesses the largest results to attaining customer satisfaction
as well as its core competencies and critical technologies to
remain competitive as a market leader.
Improve operational efficiency
In order to further maximize resources for operations in

27. Singapore, Holcim Singapore’s business units were integrated in
its SAP system. Information Technology department had
consolidated local applications and servers which allowed
savings in acquiring servers and reducing network providers to
solely one for streamlining of operations. Through internal
business processes, this efficiency helped cut off excessive
wastages (Providing platforms for sustainable construction,
2010).
Customer perspective
The focus of companies are placed upon the customer, with the
notion that customer satisfaction is tied to the success of a
business. The customer's’ perspective on how well a company is
performing can amount to the acquiring or loss of business
deals and contracts. The balanced scorecard appeals for a
strategy that adopts measures to achieve greater customer
fulfilment. There are certain measures which Holcim Singapore
can pursue to do so, enhancing performance and service,
quality, time and lastly cost. Therefore Holcim Singapore’s
focus in this perspective must meet an increase in customer
satisfaction and retention of key customers.
Increase customer satisfaction
By diversification into prefabricated building materials, Holcim
Singapore moving into newer products offer a greater variant of
choices to customers. The new products Holcim Singapore
possesses advantages of decreased time in the completion of
project developments and saves the time taken in processing
mixed concrete on site. The improvements in time would benefit
both customers and Holcim Singapore where greater and more
projects can be undertaken, leading to achieving higher
performance not only in the customer perspective but also
inclusive in the financial aspect.
High quality service
Customer system implementations by Holcim Singapore for

28. redefining and comprehension of customers wants leads to an
increase in customer gratification and better customer service.
The customer systems gives insights to the demands of
customers so that Holcim Singapore can meet expectations and
render greater service to them. Implementations of Holcim
Singapore systems take account of customer information and
provides a platform for customers to be in touch with current
orders. It identifies the customer’s projects and orders for them
with a quick and effective channel. Through such systems,
feedback and solutions are provided to customers, and bringing
a higher satisfaction in customer demand and customer service
standards.
Financial perspective
The financial performance of an organization discerns the
ability of firms strategy and execution to achieving greater
financial progress. The measures of financial perspective is
relevant to determine the joint venture’s economic outcomes in
market share, sales growth and profitability.
Financial result and growth
Revenue and Financial goals are dependent and measured
according to the sales growth, cash flow and expansion of
greater market share. Having a shareholder value analysis,
Holcim Singapore looks at forecasts of cash flow and returns it
back based on concessions to an appraised current value.
Through the joint venture, acquiring greater pool of resources
permits Holcim Singapore to expand and increase net sales and
dominance in the market where competitors are subject to
limitations of sand supply. The focus on financial result and
growth would be actualize by the increase in Holcim
Singapore’s market share.
Higher profit margin
For profits to rise, a growth strategy of diversifying products is
adopted. Holcim Singapore’s plans of diversification is vital to

29. increasing revenue and sales. Diversification by acquiring a
competitor, allows Holcim Singapore to gain and use competitor
knowledge for an increase in sales. The acquisition reduces a
competitor and increases market share assuming that it retains
competitor customers after acquisition. Diversification into
prefabricated building materials enhance Holcim Singapore’s
operations and offers a larger product line gaining a new share
of market and avenue for greater profit.
Lower bad loans
Bad loans hamper the results of the bottom-line where
provisions must be made to cover the un-repaid debt. There are
a number of debt types which Holcim Singapore uses bond loans
and more. To ascertain credibility of debtors and partners,
greater enforcing and validity of the guaranty have to be
analysed and evaluated. Sharing financial information of
suppliers and customers can prove significant to developing a
strong business relationship with Holcim Singapore by
cultivating trust and reductions of bad loans. Implementing
usage of borrower’s qualifications by financial reports or data
protects Holcim Singapore from the adverse losses from bad
loans.
Building Blocks of Competitive Advantage
From the above strategies and implementation plans, Holcim
will be able to improve the effectiveness of the organization’s
operations as well as its ability to attain superior efficiency,
quality, innovation and customer responsiveness.
Organizational efficiency is achieved with the combination of
culture norms and structural systems by evaluating their
possible combinations and examines correspondence with the
strategies of organization (Quiros 2009). By adopting adhocracy
culture, it motivates and influence employees to achieve
organizational goals, improve production through economies of
scale, Research and Development (R&D), and proper human
resource management.

30. Products with high quality increases the demand and profits for
organization and create greater competitive advantage (Foster
and Effrey 2008). When there is improve in quality, it reduces
cost and improves productivity. Hence, Holcim can focus on
providing premium quality for customers and thus increasing
profits. Human resource department must institute quality
improvement training programs to ensure that employees are
equipped with required skills.
Innovation is the most essential source of competitive
advantage as organizations can discover innovative ways to
manage capabilities and eventually gaining competitive
advantages (Weerawardena and Mavondo 2011). In addition,
Holcim can differentiate its products from competitors and
charge premium price to its customers, thus lowering its cost
structure. Through the above strategies, Holcim practiced
product, process and technological innovation.
Further enhanced with CSC, Holcim is capable in providing
customer responsiveness by being readily-available for
communication. According to Barney (1991), resources enables
organization implement appropriate strategies to meet the needs
of customers and enhance its effectiveness and efficiency.
Conclusion
Holcim Singapore has incorporated the 3 types of strategies for
the following years, as growth strategy being the fundamental
leading movement for the firm while stability and retrenchment
act as a contingency proposition for planning and restructuring.
Therefore the comprehensive assessment of Holcim Singapore
strategies shows what the firm should focus on and actionable
measures to take within the 5 years and beyond. Should any
unfavourable circumstances arise, the contingency strategies are
in place to lead Holcim singapore with the measures described.
Through these strategies, Holcim Singapore will be able to
possess sustainable competitive advantage in the long-run from
diversification into pre-fabricated building materials which
these new products offer greater productivity and areas for a
new market for Holcim Singapore to compete in and develop.

31. The banning of sand would no longer be an immediate threat
with a joint venture for sand imports present. The growth
strategies provide solutions to mitigate threats and deliver
competitive advantages. However Holcim Singapore must
continually analyse the industry and its environment to keep a
sustainable competitive advantage over competitors and always
be prepared for new threats and opportunities so that it employs
the most suitable strategies in the market.
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Strategic Map
Properties of Carbon Graphite
Physical Properties
Of Graphite
Atomic number is 6. Melting point is 3773.15K. Boiling Point is
5100.5K. Atomic mass is 12.01 amu. Crystal structure is
hexagonal and cubic. Color is black or grey. Density is -2.26
g/cm³. Specific gravity is 1.9-2 (Azom, 2001).
Mechanical properties of Graphite
Compressive strength is 50.038 ksi. Bulk modulus is 2.21 10^6
psi. Ductility is 0.0018. Elastic limit is 11.02 ksi. Endurance
limit is 2.61 ksi. Hardness is 47.2 ksi. Poisson’s ratio is 0.23.
Tensile strength is 11.02 ksi.
Environmental properties of graphite
Resistance factor of flammability is 3. Fresh water is 5. Organic
Solvent is 5. Sea water is 5. Strong acid is 4. UV is 5. Wear is 3
(Properties and characteristics of graphite, 2015).
Electrical Properties of graphite

39. Value of arc resistance for graphite is 8 ohms. Dielectric
constant for graphite is 1 MHz at 25 degrees Celsius. Thermal
conductivity of graphite is 107-340.0 W/mK. Dielectric strength
is 6.35mm. Flexural Strength for graphite is 40-300 MPa.
Chemical Properties of Carbon graphite
It has very low toxicity. It shines brightly when exposed to
sunlight. It is highly reactive towards acids like HCL and nitric
acid. It is used as a catalyst for the alkali reactions. When
subjected to petroleum based things it is toxic, as it contains
carbon which does not support burning. When placed in
saltwater it forms graphene.
Thermal properties of graphite
Thermal conductivity of graphite is measured at a temperature
range of -191 degrees to 100 degrees. It ranges from 9-12
(W/m.C
ͦ ). It is increased by increasing temperature. Coefficient
of thermal expansion of graphite is 2-6 (10^-6m/(m K))*.
Hardness of carbon graphite ranges between 65-85. Modulus of
elasticity for graphite lies between 14-17 GNm^-2. Flexural
strength of carbon graphite lies between 52-63 MNm^-2.
Apparent density of graphite lies between 1.72-1.75 (g.cm^-3).
Temperature limit in air for graphite is 315 degrees Celsius.
Transition in graphite is so slow that this temperature is not
noticeable.
Metallurgical properties of graphite
Graphite is a highly malleable material. It consists of hexagonal
rings of carbon. Its layers are very weak and they can easily
slide over each other. Graphite is machinable but it is very
sensitive. Machining of graphite requires precision and
accuracy. It needs anodes, boots, crucibles, electrodes, fixtures
and heating elements (Kourtides, 1990).
Material Overview

40. Sometime before 1565, large deposits of graphite were first
discovered in Barrowdale parish, England. Graphite is
completely made of carbon. It has a hexagonal structure and its
color is grey or dark black. Synthetic graphite was discovered
during an accident by Edward Goodrich Acheson when he was
trying to make silicon carbide by the reaction of silica and
amorphous carbon in an electric furnace. Such types of furnaces
are still being used to manufacture synthetic graphite, and that
process is also named after Mr. Acheson (Tamashausky, 2006).
Natural graphite mostly occurs during metamorphism in
metamorphic rocks. During the reign of Elizabeth, graphite was
used for lining the molds of cannonballs. Graphite had great
military importance at that time. Its movement and usage were
strictly observed by only the Crown. Since sixteenth century
graphite pencils were used for paper writing. In present era,
graphite is being used in the manufacture of battery anodes.
These batteries are being used in laptops, mobile, vehicles, etc.
The dies which are used for the extrusion of hot steel also use
graphite as lubricant. Graphite is successfully being used a
replacement for asbestos in making brake shoes of heavy
vehicles. Railroad and parts of rail engines which are directly
exposed to sunlight are protected from corrosion using the
liquid mixture of graphite and waste lubricants. It is also being
used in the field of medicine. For example, the valves which are
used in the transplant of hearts are being made of graphite these
days. Graphite has many advantages which make it unique. It is
the only material right now whose mechanical and thermal
properties are increased with temperature. It is highly shock
absorbent and resistant. It can easily remove hard materials
much better than copper. However, Graphite is expensive.
Synthetic graphite is mostly inert and does not damage human
organs. Graphite is not very harmless. It can cause severe
irritation to skin, eyes and nose. It can cause watering of eyes
and skin itching.
Recommended Application of Carbon graphite

41. It is dry lubricant and can be used to replace wet lubricants like
oil, etc.
It is the only non-metal element which is a good conductor of
electricity. It could be used in devices where heat is a big issue,
as its thermal properties are enhanced with increased
temperature.
It could be used for isolation and coating of big ships and
planes in order to protect from corrosion and wear and tear as
the mechanical properties of graphite are also increased with
increase in temperature.
Graphite is used as a steel hardener. It could be used in die
making processes. The outer and inner layers of the dies are
coated with a layer of graphite in order to protect them from
excessive wear and tear. It should be used during the
manufacturing of the dies. Dies are mostly made of stainless
steel and if graphite is added during their formation, it would
provide strength and hardness.
References
Azom. (2001). Carbon-Graphite Materials. AZO Materials, 7.
Kourtides, D. A. (1990). Review of Thermal Properties of
graphite composite materials. NASA Technical Memorandum
100049 , 50.
Properties and characteristics of graphite. (2015). POCO
GRAPHITE, 42.
Tamashausky, A. V. (2006). An Introduction to Synthetic
Graphite., 12.
Executive Summary
1. State the purpose of the project/report
2. Summarises what you’ve DONE that are covered in the main

42. contents of the report
3. Therefore, write in the present or past tense
4. DO NOT write in the future tense, e.g.,”…this report will
then propose a strategy…”
Identify and Discuss Current Business Strategy
5. MUST examine strategy statement or value chain. Strategy
statement is NOT mission or vision statement
6. Discuss at least FIVE activities in-depth, and the remaining
more generally.
7. Identify evidence of cost leadership or differentiation in at
least on activity, preferably more. The less activities you
identified, the deeper you must investigate. This evidence is
about Myer engaging in these activities in a different way or a
better way compared to competitors, thus providing them with
competitive advantage in terms of cost leadership or
differentiation.
8. If strategy statement is available, should examine it as well.
9. Must then argue that the evidence points to one of Porter’s
generic strategies. There are 6 possible options.
Strategic Position Review or SWOT (short to medium length
section)
10. State the purpose of this section, which is to provide the
essential background to the proposed strategic initiative in the
next section.
11. Provide key findings of your Assignment 1 analysis,
specifically the SWOT.
12. Discuss them. DO NOT present entire section in a table.
13. But you may summarise the SWOT in bulleted points in a
table.
The Proposed Strategic Initiative
14. State at the outset, what your proposal is about. Should be
limited to a short paragraph of not more than 5 medium length
sentences.
15. Discuss the theoretical support or basis for your proposal.
Use TOWS, Ansoff’s Matrix or Value Chain. Can use me than
one if it is deemed applicable.

43. 16. Discuss your proposed strategic initiative in full details
17. Provide theoretical support for competitive advantage of
your proposal through Porter’s generic strategies, Bowman’s
clock, or Blue Ocean. Can use more than one if deemed
appropriate.
18. Optional: Use VRIO to argue further for competitive
advantage.
Justification of Proposed Strategic Initiative
19. Use the SAFe framework – make sure your discussions are
in line with the section on Strategic Position Review.
20. Optional: Use VRIO to justify further
Implementation Plan
21. Identify and discuss changes that need to be made – e.g.,
new work processes, re-organise existing work processes, new
people, new assets, new structure (e.g., new management, re-
organise structure, new or re-organise control systems.
22. Use change management theories in your discussions, e.g.,
types of change, change levers, management change resistance.
23. In line with the changes, what new resources or capabilities
will be needed. How will they be obtained – organic
development, alliance or M&A?
24. Provide an implementation schedule/time-table. Time
division by quarterly period over 3 years is enough. Think:
Operations; HR; IT; Marketing; Procurement, etc.
Measurement/Assessment of the Strategic Initiative
Performance
25. Determine the items to be measured following guidelines in
Balanced Scorecard.
26. Insert identified items into the strategy map. The map is a
MUST.
27. Discuss and explain WHY those items are chosen for
measurement and HOW they relate in the hierarchy of the BSC.
Conclusion
Again, summarise the report. You can repeat some of the things
you said in the executive summary.

44. Executive Summary
This report will enable us to conduct a strategic analysis of
Myer in the retail industry. Firstly, it will examine 6 macro-
environment factors and impact on future growth of industry
using PESTEL analysis. Secondly, it will examine 5 competitive
forces and attractiveness on the industry using Porter’s Five
Forces. Finally, it will examine which strategic capabilities
allows Myer to gain unfaltering competitive advantage using
activity systems and VRIO.
Table of Contents
Executive

45. Summary……………………………………………………………1
1. Background
Information…………………………………………...…………3
2. Macro-Environment
Analysis………………………………………………3
3. Industry
Analysis……………………………………………………………5
4. Internal Strategic Capabilities
Analysis………………………………………7
5.
Conclusion……………………………………………………………
………9
6. Reference
List………………………………………………………………10

46. MYER
1. Background Information
Myer (2017) is the biggest department store company in
Australia with 11 main product sections and about 60 over retail
establishments at strategic area in the country. Myer is fixed on
being an inspiration to all stakeholders. Myer has many
unparalleled stores stocked with prominent brands, assisted by
its e-commerce platforms. This allows Myer to introduce a
noteworthy omni-channel experience for customers regardless
of shopping preferences. Myer’s strategy is aimed at providing
a modern presentation of its brand, a pertinent and re-vitalised
range of products, improve customer service and enhance retail
experience via a solid omni-channel (Myer 2017). Myer’s
profits in 2016 is $60.5 million (News.com.au 2016).
Conversely, David Jones’s profit is about $168 million
(McCauley 2016). Thus, David Jones has a competitive
advantage over Myer.
2. Macro-Environment Analysis
According to Johnson et al. (2013), macro-environment
comprises of six environmental aspects that affects almost every
organisation. Thus, PESTEL framework will assist in examining
issues arising from environments that will impact on
organisation hereafter.
Political
According to Powell (2015), Trans-Pacific Partnership is
formulated for commerce and growth of economy in Australia
and 11 nations. It is a substantial free-trade agreement that
reduce financial levies and duties of products, facilitating
investments and growth of cross-border industries through
minimising regulations (Powell 2015). The TPP ensure that
products manufactured by foreign suppliers meets U.S.
standards, and eliminates high toll of business transactions with
TPP nations (National Retail Federation 2016). Thus, TPP

47. presents Myer an opportunity to save trading costs and ensure
foreign supplier provide quality goods.
However, TPP provide a threat to retailers, as it popularises e-
commerce, prohibits forced localisation and provides e-
commerce businesses greater access to Australia’s consumers
(Thumm 2015). Thus, the prospect of increased online
competition will threaten Myer’s profitability from its retail and
online businesses.
Economic
Over the last few years, Australia has been experiencing steady
economic growth. As reported by Australian Government
(2016), real GDP growth has increased by 2.8% and rate of
unemployment has decreased to 5.6% in 2016. This shows that
Australia’s economy is in good position and therefore not much
changes in consumers’ purchasing power, therefore presenting a
good opportunity for Myer to maintain its sales revenue.
However, exchange rate has dropped due to declination of
Australia’s trade associating with export to import price ratios
(Australian Government 2016). This presents a threat to Myer as
imports will be costlier, and affects profitability because Myer
source most of its products overseas. In light of US withdrawal
of TPP, it might culminate in trade wars among TPP nations,
making imports even more expensive.
Social
Consumers are highly concerned with environmental issues
nowadays, and this altered their shopping habits, because they
would sub-consciously avoid a product or brand that harms the
environment (Kennell 2015). This presents a threat to Myer as
issues culminating from foreign suppliers’ products might affect
Myer’s reputation. Therefore, Myer should ensure their products
do not present a risk to environment.

48. As the world becomes more developed, more people are
connected to internet, leading to rise of e-generation, who are
people that grew up with internet and generally more tech-savvy
(AMP Capital 2013). This presents both an opportunity and
threat to Myer, as market shifts to capitalise online market
affects sales in brick-and-mortar outlets.
Technological
Technological changes will affect retailers’ business operations,
as society embracing of technology via smartphones and
internet, will compel retailers to adapt and be competitive, by
doing businesses online, while not neglecting performance of
retail outlets (Mack 2016). As customers reside in a
homogenous world between online and offline, retailers are
mandated to ensure their presence in medium where these
people exist (Abidi 2012). Therefore, Myer must adapt retail
strategy to a modern business method, through integration of
retail and online experiences via omni-channel.
Environment
Environmental issues have moderate impact on retail
businesses, as it depends on level of Corporate Social
Responsibility that businesses partake. Some businesses focus
on profit maximisation whereas others are more environment-
friendly. CSR is a debatable but Myer have excelled in this
aspect as they incorporated green practices into business
benefiting all stakeholders. As stated in Myer (2016) annual
report, Myer is concerned with quality and ethical sourcing of
products. Myer also take initiatives to reduce energy usages and
is a champion of recycling programmes. Therefore, Myer’s
focus on environmental issues is good opportunity to show they
are ‘green company’ while reducing costs of running businesses
through energy savings.
Legal
Exclusivity clauses are sometimes stipulated in written

49. contracts to prevent suppliers from providing products to
competitors (Arts Law 2013). According to Ruel (2013), this
form of contract is prevalent in retail industry, as Myer and
David Jones entice brands to supply products exclusively for
them. Thus, a department store that stocks exclusive brands
could lure shoppers to patronise their stores, resulting in higher
sales. This provides good opportunity for Myer to differentiate
from its competitors, leading to higher profitability. However,
Sydney fashion designer, Kym Ellery, breached an exclusivity
contract with Myer, by provided apparel collection to Myer’s
competitor David Jones (ABC News 2013). This present a threat
to Myer as they might lose a popular brand to its rival.
Overall Conclusions and Implications
After analysing all the factors, only social and technological
factors have a significant impact on Myer, as they revolutionise
the way retailers do businesses. Political, economic and
environment factors present a moderate impact as it depends on
circumstances. Legal factor presents no significant impact as
supplier breach of exclusivity contract is uncommon. Overall,
environmental factors present no significant impact on Myer.
Therefore, Myer should focus on its business online as the retail
industry grows towards e-commerce.
3. Industry Analysis
According to Porter (1979), an industry level of competition is
dependent on five fundamental forces, whereby the cumulative
strength of these forces determines attractiveness and
profitability of an industry. He proposes that weak cumulative
forces allows a company to attain higher level of performance
and vice versa. Hence, Porter’s five forces framework is used
by corporate strategist to identify company’s strategic position
in the industry, to safeguard against or influence these forces to
its advantage, and also understanding the root cause of
competitive pressure (Porter 1979).

50. Rivalry Between Competitors
As reported by Smith (2015), department stores in Australia are
in a highly competitive industry, with Myer and David Jones
firmly establishing their retail presence in Australia. Both Myer
and David Jones have reduced the number of fashion apparel
brands, as a major transformation of their strategies, that
pinpoint a targeted group of consumers for greater industry
growth (Carrington 2015). However, retail industry is in mature
phase and faces prospect of competition with international
brands and e-commerce, a huge blow to major retailers (Smith
2015). Therefore, high rivalry in retail industry will affect
profitability for Myer.
Threat of Entry
According to Smith (2015), leading department stores in
Australia are able to create high entry barriers, as they utilised
economies of scale to cement a strong industry concentration
and ensure financial stability. As a department store need
sizable retail spaces in prominent areas to gain competitive
advantage, scarcity of retail spaces that new entrants faced, will
discourage them from entering the retail industry (Smith 2015).
A new entrant is unable to replicate a similar scale as
established department stores to realise comparative cost
advantage (Luenendonk 2014). Thus, Myer should invest a lot
of money to create a high barrier of entry and reduce threat of
new entrants.
Threat of Substitutes
A department store faces low threat of substitutes, as they stock
a variety of branded manufactured goods in various product
categories (Channon, Henley & Neel 2015). Wilkinson (2013)
describes substitute goods as goods coming from different
industry that deliver identical advantages to customer as goods
manufactured within the industry. As Myer is a department store
in up-market retail industry, they have an assortment of
products, and therefore do not face threat of substitutes outside

51. of the industry.
Bargaining Power of Buyers
Even though prices of retail outlets products are fixed, buyers
could still exert their bargaining power through decision to
purchase product from a certain store or to patronise another
competitor’s store, and this affect retailers’ profit (Zhuang,
Herndon & Zhou 2003). Chanon, Henley and Neel (2015) claims
that buyers are fixated on real bargain of product instead of
what a particular retail offer, and since retail competitors
operate outlets around same shopping malls, there is low
switching costs involved for buyers. This shows that buyer’s
bargaining power is relatively high compared to Myer, as
alternative purchases affects Myer’s profitability.
Bargaining Power of Suppliers
Suppliers have to come to terms with unequal relationship in
dealing with dominant retailers in retail industry (Sutton-Brady,
Kamvounias & Taylor 2015). Chanon, Henley and Neel (2015)
states there are average close to 170 different suppliers for
department store. This means if supplier pitches its products to
department store at an uncompetitive price, department store
might drop interest in their products. Hence, suppliers have to
price products lower to entice retailers, as department stores
have many suppliers and do not rely on a few to operate
(Channon, Henley & Neel 2015). Therefore, low bargaining
power of suppliers made retail industry more attractive for
Myer, resulting higher profit margin.
Overall Conclusions and Implications
The mature retail industry is attractive for Myer and
unattractive for new entrants in future. As porter’s competitive
forces show, Myer’s main concerns are competitive rivalry and
bargaining power of buyers, whereas conditions are
unfavourable for new entrants. Myer have resources to compete
while new entrants lack capital to scale their business. Thus, the

52. retail industry is good for existing players and bad for new
entrants.
4. Internal Strategic Capabilities Analysis
The activity system of organisation can assist in understanding
how resources are utilised in an organisation, are actually
developed from activities that organisation engaged in (Johnson
et al. 2013).
Features of Products and/or Services Provided
As reported in Myer (2016) annual report, Myer has an
assortments of products and stocks many desirable brands. They
have 60 over retail outlets in strategic locations, and provide
customers with smooth continuous shopping experience,
integrating retail and digital platforms experiences via omni-
channel. Myer’s customer loyalty program has more than 5
million registered members, and is the most successful retail
membership in Australia, accounting for estimated 70% of total
sales (Smith 2013).
Value Chain Activities and Processes
Myer’s supplier management has implemented “New Myer”
strategy in consolidating number of desirable brands via a
method of measuring sales figure (sales/m2) for decision-
makings in allocating retail spaces and eliminating undesirable
brands from portfolio (Greenblat 2015). Meanwhile, Myer’s
logistic management have a dedicated warehouse for online
logistics purposes enabling faster delivery, giving them an edge
over its competitors (Cummins 2013).
Resources and Competences
According to Barney (1991), a firm’s capacity to maintain
prolong competitive advantages is dependent on four criteria of
resources: 1) there ought to be a value involved to capitalise on
opportunities or nullify threats, 2) rareness among competitors,
3) inability to copied and 4) non-equal substitution. However,

53. Jay Barney developed VRIO in 1995, replacing ‘non-
substitutability’ with ‘question of organisation’, meaning for
firms to achieve prolong competitive advantage, it needs to
organised to capitalise on its resources and competences
(Barney 1995).
Applying the VRIO Framework (Barney & Hesterly, 2008, p.92)
Myer’s Supplier Management and Competitive Advantage
Valuable: Yes; Provides faster delivery for customers.
Rare: Yes; Not every department store has a warehouse to
support online logistics.
Costly to imitate: Yes; Requires a warehouse.
Exploited by organisation: Yes; Myer is organised to support
these capabilities.
Competitive implications: Sustained competitive advantage.
Myer’s Logistic Management and Competitive Advantage
Valuable: Yes; Provides desirable brands to customers while
removing unpopular brands.
Rare: Yes; Unique method of measuring sales figures as part of
“New Myer” strategy.
Costly to imitate: Yes; “New Myer” strategy.
Exploited by organisation: Yes; Myer is organised to support
these capabilities.
Competitive implications: Sustained competitive advantage.
5. Conclusion
The strategic analyses for Myer allow us to examine
opportunities, threats and strength of organisation. Through
this, Myer will discover its weaknesses and seek to turn it into
an advantage. An examination of Myer’s mission statement
states that Myer provides high quality service and often meet
customer’s expectations, therefore this will bode well for Myer
in the future.

54. (Word Count: 2099)
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59. BUSM3200 Strategic Management Assignment marking criteria
Semester 1 2017 SIM (45%)
Report Element High Distinction
80-100
Distinction
70-80
Credit
60-69
Pass
50-59
Fail
0-49
Identification of current
business strategy (5%)
Demonstrates an excellent
understanding of concept of business
strategy and insightfully discusses the
general type of business strategy that
the company/SBU implements by
examining its strategy statement and its
value chain activities. a wide range of
relevant information sources and
theories are critically analysed and
synthesised to support the discussion.

60. Demonstrates a good understanding of
the concept of business strategy; by
examining its strategy statement and its
value chain activities, general type of
business strategy that the
company/SBU implements is clearly
identified and logically discussed; a
range of relevant information sources
and theories are critical analysed and
synthesised to support the discussion.
Demonstrates the understanding of the
concept of business strategy; by
examining its strategy statement and its
value chain activities, general type of
business strategy that the
company/SBU implements is identified
and discussed; some relevant
information sources and theories are
used to support the discussion.
Demonstrates a basic understanding of
the concept of business strategy; is able
to identify the general type of the
company/SBU’s strategy by using some
relevant information sources and
theories.
Demonstrates a poor understanding of
the concept of business strategy; unable
to use relevant information to identify
the general type of business strategy for
the company/SBU; the discussion is
poorly presented.

61. Proposal of ONE new strategic
initiative for the organisation to
implement (10%)
Proposes a strategic initiative that
indicates full comprehension of the
company’s strategic context. It is
sensitive to contextual factors as well as
all of the ethical, logical, and cultural
dimensions of the problem. Justification
of the proposed strategic initiative is
complete (for example, contains
thorough and insightful explanation)
and exhibits the following:
logic/reasoning, examines feasibility,
and weighs impacts of initiative
proposed.
Proposes a strategic initiative that
indicates full comprehension of the
company’s strategic context. It is
sensitive to contextual factors as well as
all of the ethical, logical, and cultural
dimensions of the problem. Justification
of the proposed strategic initiative is
complete (for example, contains
thorough and insightful explanation)
and exhibits the following:
logic/reasoning, examines feasibility,
and weighs impacts of the initiative, but
may miss some subtle points.
Proposes one generic strategic initiative
that is rather than one that is

62. individually designed to address the
specific contextual factors of the
problem. Justification of the proposed
initiative is superficial but includes the
following: logic/reasoning, examines
feasibility, and weighs impacts of the
initiative proposed.
Proposes an initiative that is difficult to
evaluate because it is vague or only
indirectly addresses the problem
statement. Justification of potential
solutions is superficial and does not
include the following: logic/reasoning,
examines feasibility, and weighs impacts
of the initiative proposed.
Proposes a partial initiative that is
inappropriate for the problem or
context. Justification of the initiative is
poorly done, may be irrelevant, or is
inappropriate.
OR (Serious fail)
Doesn't propose a complete solution or
proposes a solution that is unrelated to
the problem or context. Justification of
solutions is not done and/or fails to
address the following: logic/reasoning,
examines feasibility, or weighs impacts
of the initiative.
Development of a strategy
implementation plan (10%)