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Case Study (Naza Group)

The document discusses a case study on the Naza Group. It describes four strengths of the Naza Group including maintaining a low employee count to increase productivity, being an early entrant in partnerships, strong management, and resources from partnerships with companies like Kia Motors. It outlines Naza Group's vision to be a leading automotive dealer in Malaysia. External factors that contributed to Naza Group's success include supportive government policies, utilizing new technologies, and operating in a growing automotive market. Key strategies implemented were forward integration through new partnerships, backward integration by building an assembly plant, and unrelated diversification into construction, telecommunications, agriculture, and other industries.

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hazwan amin
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2K views

Case Study (Naza Group)

The document discusses a case study on the Naza Group. It describes four strengths of the Naza Group including maintaining a low employee count to increase productivity, being an early entrant in partnerships, strong management, and resources from partnerships with companies like Kia Motors. It outlines Naza Group's vision to be a leading automotive dealer in Malaysia. External factors that contributed to Naza Group's success include supportive government policies, utilizing new technologies, and operating in a growing automotive market. Key strategies implemented were forward integration through new partnerships, backward integration by building an assembly plant, and unrelated diversification into construction, telecommunications, agriculture, and other industries.

Uploaded by

hazwan amin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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DECEMBER 2018

CASE STUDY: NAZA GROUP

QUESTION 1

Describe four (4) strengths of the Naza Group (8 marks)

According to the case study, first strength is Naza Group has about 3000 staff and
staying efficient is one of its main priorities by keeping its number of employees low and
improves productivity. Next strength is Naza Group first mover, the collaboration with
Groupe PSA is further strengthened when a share sale and joint-venture agreements with
Naza Corp Holdings Sdn Bhd was signed early 2018 to acquire 58% stake in Naza’s NAM
assembly plant in Gurun. However, good management also the strength for Naza Group,
The Brother focus then was to instill professional into the Naza Group by putting a
framework of corporate governance and professional CEOs with performance-based Key
Performance Index to achieve in place at the key business divisions of the group. This
measure is to allow for proper organisational structure, diligence and auditors. Lastly,
resource Naza Group from Kia Motors Corp, Naza being appointed by South Korea’s Kia
Motor Corp as franchise holder for the brand Kia in Malaysia and Naza became the
assembler for completely-knocked-down packs for Kia. Went Naza Automotive
Manufacturing Sdn Bhd was established, with a workforce close to 450 and an annual
production capacity of 50000 cars, has built 200000 cars as of October 2017.

QUESTION 2

a) Describe vision statement (2 marks)


A vision statement is a company's road map, indicating what the company wants to
become in the futures. It outlines the direction of the company in the next 5 to 10
years. As for Naza Group their vision is to be a successful and leading in automotive
dealer in Malaysia.
b) Summarize the facts and information in the case into a vision statement for
Naza Group (6 marks)
Naza Group vision is to provide quality business and becoming a leading dealer in
automotive business that operating in Malaysia. They use latest technology to
developing consistent profitability and venture its business in all ASEAN market with
their partnership as well as staying efficient to be the number one main priorities by
keeping the number of their employees low and improves productivity as the main
focus in the group.

QUESTION 3
Describe three (3) external factors that contributed towards Naza Group’s success.
(12 marks)
The first external factors that contributed towards Naza Group’s success is political,
governmental and legal forces. The increasing global interdependence among economies,
markets, governments, and organizations makes it imperative that firms consider the
possible impact of political variables on the formulation and implementation of competitive
strategies. Naza Group depend heavily on government contracts or subsidies, political
forecasts can be the most important part of an external audit. Malaysian government gave
approved permits which allow for the importation of cars to them as they hopes to that they
would graduate to become bigger businesses and partner foreign car manufacturers.
Business-friendly government are the main reasons some companies choose to invest in
Malaysia including Naza Group.

The second external factors that contributed towards Naza Group’s success is
technological forces. Rapid technological advances and variety of new technologies are
fuelling innovation in many industries, and impacting strategic-planning decisions as the
team work together to ensure that information needed to formulate, implement, and evaluate
strategies is available where and when it is needed. Started by becoming the assembler for
completely-knocked-down packs for Kia, they are capable to maximize the use of technology
from the leading automotive industries. Naza has established other core business set up
such as Naza Engineering & Construction Sdn Bhd (Naza EC) as they have necessary
licenses and technology to offers complete construction solutions in civil engineering and
infrastructure works. Naza Communications Sdn Bhd also introduce the engineering designs
and solutions to top telecommunication such as Maxis, Celcom Axiata, Digi and U-Mobile.
The third external factors that contributed towards Naza Group’s success is economic
forces. Economic forces have a direct impact in the potential attractiveness of various
strategies. Naza Group’s automotive business remains the focus of the groups, which
accounts for 60% of group revenue. They stayed efficient by keeping its number of
employees low and improves productivity. Vehicles sales have been forecasted by the
Malaysian Automotive Association to grow 2.3% to 526,500 units in 2018. The collaboration
with Groupe PSA is further strengthened when a share sale and joint-venture agreements
was signed thus makes Malaysia as manufacturing hub for ASEAN with a forecast volume of
21,000 unit by the year 2020. It has RM 1.1 billion to RM 1.2 billion worth of external work in
its order book.

QUESTION 4
Explain three (3) strategies implemented by the Naza Group. (12 marks)
The first strategies implemented by the Naza Group is forward integration. It involves
gaining ownership or increased control over distributors or retailers. It occurs when an
organization competes in an industry that is growing and the present distributors or retailers
have high profit margins. For example, Naza Group being appointed by Kia Motors Corps as
the franchise holder and the collaboration with Groupe PSA has further strengthened when a
share sale and joint venture agreements was signed. The deal also saw Naza group as the
sole distributor of Peugeot, Citroen and DS Automobiles in domestic market and potentially
ASEAN.

The second strategies implemented by the Naza Group is backward integration. It


involves seeking ownership or increased control of a firm’s suppliers. It occurs when an
organization has both capital and human resources and an organization needs to quickly
acquire a needed resource. In this case, Naza Group went on invest heavily in showrooms
and later built an automotive assembly plant. Nasimuddin had about 100 active companies
without a holding company. The chart of new future of the Naza Group are to streaming only
its potential business into Tier-1 or Tier-2 to ensure longevity of the business.
The third strategies implemented by the Naza Group is unrelated diversification. It
involves adding new but unrelated products or services. Value chains are so dissimilar that
no competitively valuable cross-business relationships exist. When revenues derived from
an organization's current products would increase significantly by adding the new, unrelated
products. In this case, Naza Group set up Naza Engineering & Construction Sdn Bhd (Naza
EC) as they have necessary licenses and technology to offers complete construction
solutions in civil engineering and infrastructure works. They also formed Naza
Communications Sdn Bhd also introduce the engineering designs and solutions to top
telecommunications such as Maxis, Celcom Axiata, Digi Telecommunications and U-Mobile.
Naza Group other venture is into the food and agriculture business, Wood Vision Sdn Bhd to
managing and maintaining oil palm plantations with livestock such as cattle and goat
breeding, as well as bird’s nest farming.

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