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0Embed DocCopy LinkReadcastCollectionsCommentGo BackDownloa d PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 1CASE SYUDY ON PROTONIndividual Assignment(BLB20058-M)Hand in Date:-14/Dec/2011Hand ou t Date:-13/Oct/2011Submitted To: - Submitted By:-Mr. Nidhi Khurana Prerna Shree( Lecturer) (PTM1101002)(MBA 1styear) PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 2CERTI FICATEThis is to certify that is PRERNA SHREE Roll No. PTM 1101002 of MBA streamha d completed her assignmenton CASE STUDY ON PROTON on 14DECEMBER 2011.Submitted To: - Submitted By:-Mr. Geetainder Handa Prerna Shree(Lecturer) (PTM1101002)(MBA 1s tyear) PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 3ACKNO WLEDMENTI am very Thankful to Miss. Nidhi Khurana to providing such opportunity to prepare suchtype of assignment which helped me to enhance my skills. I had a lot of difficulty during myassignment but she guided me continuously and also he lped me out to solve them. I wouldlike to thank to A.P.I.I.T SD INDIA for giving me an opportunity to work on this project. Atlast but not the least I would lik e to thank to everyone who helped me out to accomplish thisproject.Warms & regar dPrerna shree. PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 4TABLE OF CONTENTSSr. No. TitlePage No.1. Acknowledgement 3-32. Background 53. Introdu ction 6-94. Analysis ( Internal and External environment) 11-225.Conclusion27-30 6.References31-337.Appendix33-47 PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 5BACKG ROUND STUDYStrategic products are generally obtained from one supplier where the short and long-termsupply is not guaranteed and represents high value in the co st price of the end product. Thestrategy is to strive for a partnership-like rel ationship with the suppliers in order to obtainsignificant improvement in qualit y, cost, delivery, product development and innovation.Before the establishment o f PROTON the component parts manufactured locally were fewand catered basically for the replacement market. However, with the introduction of specificlocalizati on programs for the industry, in the mid of 1980s, by PROTON through itsSupplier s Development Program (PVDP), more components were produced to cater to thedomes tic as well as export markets. Many suppliers were born, and later developed and grewsolely as a result of this PVDP. There were only 17 suppliers supplying 52 parts whenPROTON commenced operations in 1985, most of which were low-tech tradi tional localparts like batteries, tires, and the like. To date there are 182 sup pliers supplying more than 4,000 parts to PROTON (Interview with the President P ROTON Suppliers Association, 2006).In 1986, PROTON established the Procurement a nd Suppliers Development Division (PVD)whereby the objective is to develop its o wn group of suppliers in order to formulate andimplement the local content progr am for the national car. It was envisaged that with theimplementation of this lo cal content program the automotive parts industry would expand.This expansion wa s much needed not only by PROTON in its end favors to build a strongindustrial b ase to depend on, but also by the Government as a source of employmentabsorption and reduction of imports.OBJECTIVE OF STUDYTo evaluate whether the protons new s trategic plan can boost its competitiveness. PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 6INTRO DUCTIONVISION STATEMENTProton has their vision to have a very strong presence in the domestic market. As ja carManufacturer in a national economy you must domin ate that economy. MISSION STATEMENT Driving Malaysias transformationinto a leader in technology and quality. Proton are apassionate group of people working toget her, creating exhilarating products and servicesfor global markets, synonymous w ith great styling, innovation and leading technology.PROTON PERUSAHAN AUTOMOBIL NATIONALBERHADINCORPORATED 7 MAY 1983TYPE PUBLIC SECTORHEADQUARTER SUBANGJAYA AN D SHAH ALAMMANAGING DIRECTOR MR.SYED ZAINAL ABIDINREVENUE RM8.23 BILLION MYRSUBS IDIARIES LOTUSPROTONMALASIYAS FIRST CAR MAIN PLANT SAHA ALAMCAPACITY 80000 UNITS PER YEAR PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 7MARKE T OF PROTONProton Holdings Berhad is the holding company which is listed on the

Bursa Malaysia. Itexports cars to the United Kingdom, South Africa, and Australi a and the company isaggressively marketing its cars in several other countries i ncluding the Middle East. It hasnever succeeded to export their car to the US, b ecause the cars required many changes tomeet American safety standards in order to secure coverage from auto insurers and satisfylegislative requirements. In so me countries, Protons cars suffer somewhat from a poorpublic image because of the ir designs.14,706 Proton cars were exported in 2006 to othercountries. Proton ca rs have also been exporting a small volume of cars to other countries like:Singa pore, Brunei, Indonesia, Nepal, Sri Lanka, Pakistan, Bangladesh, Taiwan, Cyprus andMauritius.LIST OF PRODUCTS PROTONSAGA(1985 - 2011):- Among all products proton ,The Sagais thelongest surviving model, soldiering on for nearly 22 years. The S aga continued toreceive minor updated until 2008, when a second generation Saga was introduced as asub-compact model instead. PROTONINSPIRA-(2010-2011) PROTONWIRA - (1983 - 2006) PROTONSATRIA GTI- (1994 2007) PROTONPERDANA- (1995 - 1998) PROTONTI ARA- (1996 - 2007) PROTONJUARA- (2001 - 2003) PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 8PROTO N NEEDS TO REVAMP ITS STRATEGY BECAUSE Proton is facing pressures byAsean Free Tr ade Agreement(AFTA) and WorldTrade Organization (WTO) in which Malaysia is a mem ber of these two organizationson the issues of lowering or removing tariffs and other non-trade barriers. Proton is unable to match thequality of foreign competi tors- something theexposed with the lowering of import barriers. Proton cars are facingcompetitionarising fromimport tariffs. Proton is unable to competewithout the shield of tariffsdue to itslow technology. Proton is unable to improve its en tirenetworks ability to operatein a moreproductive to reduce wastage or unnecessa ry cost. It has lostits Chinese joint venture asof in 2006 it has four joint vent ure withChinese partners. By 2002 Proton had amarket share of over 60% inMalaysia , which was reduced tobarely 30% by 2005 and is expected to reduce further in 20 11 whenAFTAmandatesreduce import tariffs to a maximum of 5%. Proton is unable toc ommunicate with its consumerabout their expectations fromcar. Company is lacking intheir R&D, quality, innovationand also productdifferentiation in comparison to other competitors. PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 9Apart from the mentioned current strategy we can say thatProton is not working proper lyin all of the above areas i.e. up to the benchmark that is why it is losing it s market share.After analysis of overall performance of proton, we found that it is very poor. We haveshown it in the figure given bellow:COMPETITION The existe nce within amarketfor some good orserviceof a sufficient number of buyers and se llers such that no single market participant has enough influence to determine t he goingprice of the good or service. (E, Robert. 2009)(On the basis of porters f ive forces framework i.e.entry of competitors, threat of substitutes,bargaining power of suppliers, bargaining power of buyers and rivalry)(Appendix-4)SUCCESS C RITERIA PERFORMANCE (COMPARISION WITH COMPETITIORS) HIGH LOW JUSTIFICATION MARK ET SHARECOST STRUCTUREPRODUCTQUALITYFINANCEDISTRIBUTIONTECHNOLOGYOWN BRAND FALL D OWN TO 80% GOES UP TO 30%77% LESS THAN OTHERS 60% MORE THAN OTHERS20% MORE SUPPLIE RSFALL DOWN TO 70%100% IN HOME COUNTRYOVERALL EVALUATIONPERFORMANCE IS VERY POOR PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 10THE MAJOR COMPETITORS OF PROTON ARE 010,00020,00030,00040,00050,00060,00070,00080,00 090,000JanJune 2009JanJune 2010JanJune 2009JanJune 2010 VehiclesSales UnitMarket Sha reDOMESTIC COMPETITIORS1. Perodua. 2. Nissan3. Mitsubishi GLOBAL COMPETITIORS1. Daimler AG 2. Fiat S.P.A3. Ford motor company 4. Toyota5. Suzuki6. Honda PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 11ANAL YSIS OF EXTERNAL ENVIRONMENTAll external environmental forces which can affect h ow a company operates but which arebeyond its control. These includes: political , Economical, social and technological.(H, jones, 2009)PEST ANALYSIS: - APEST an alysisis one of them that is merely a framework thatcategorizes environmental in fluences as political, economic, social and technological forces.Sometimes two a dditional factors, environmental and legal, will be added to make aPESTELanalysi s,but these themes can easily be subsumed in the others. The analysis examines t heimpact of each of these factors (and their interplay with each other) on the b

usiness. Theresults can then be used to takeadvantageof opportunities and to mak e contingency plans forthreats when preparingbusiness and strategic plans(R, Dua nd. 2009)PEST ANALYSIS (APPENDIX (1) POLITICALOne of the important factors to c onsider is the presence of AFTAor ASEAN Free Trade Area. Currently, most of ASEA N region are free trade or 96% of the entire ASEAN trade.AFTA was established in January of 1992 in order to eliminate tariff barriers among theSoutheast Asian countries. It planned to reduce tariffs to zero to 5% in 15 years among the sixn ations through acommon effective preferential tariff (Ghani & Zainuddin 2008). B ecauseMalaysia has two national carmakers which areProton and Peroduaand the gov ernmentwants toprotect their interests. Unfortunately, they said development cou ld prove to be atemporary solution. If we are going to check on the high selling prices of the national cars of Malaysia because of high production costs and la ck of vendor efficiency, there is a bigpossibility that the local market will be ruled by imported cars. As a result, there will beincrease in the number of the vehicles on the road and there will be a glut of used cars in themarket, becaus e people will tend to trade their cars for cheaper and imported brands. On theot her hand, the issue regarding theenvironmentis vital because it is considered as one of themost talk about topics in the world. Theenvironmental regulationin Ma laysia can be traced PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 12back during the colonialism of British which introduced the environmental standards aboutthe mineral and agricultural resources to Europe. AND In terms of internati onal trade, Over 5years, Malaysia more than doubled its exports from US$29.416 b illion. Historically, theUnited States has long been one of Malaysia s largest t rading partners, its exports to theUnited States reaching 21.9 percent in2010.EC ONOMICAL The vehicle sales in the country are expected to fall by 12.4% due to d ifferent economicaspect, primarily the issue of global financial crisis, which a ffected thelocal financialstatusof the country (Asean One Monitoring 2009). As a result, the government of thecountry is expecting a slow economic growth for th e country, which can affect thebuyingbehavior of the customers. Furthermore, due to the AFTA, it had increased the competition,which will impact the performance of Proton. However, the performance of the automobileindustry will be maintaine d and managed due to the huge total labor force. Despite of theslower economic g rowth in the unemployment rate can be reduced to only 3.5%, which canshows an al most full em PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 13SOCI ALThegrowing population in the countryis one of the factors which can affect the automobile industry. In 2010, the country had a total of 27.5 million citizens ( US Departmentof State n.d.). This will give a greater number of markets. Further more, the ratio of carownership in the country is somewhat high or total of 1:5, which signifies that people areconsidering cars as important things in their li ves. Furthermore, people will alsoset on big-ticket itemsorconsumers are expecte d to put off buying different motorvehiclesbecause of the employment market unce rtainty because of the global and localfinancial crisis. Another factor to consi der is thegrowing knowledge and concern of thepeople regarding different environ mental issues. Furthermore, theimpact of the imagetothe loyalty of the customer is also another factor.TECHNOLOGICAL Technology is considered as one of the most important factor in the automotive industry. Dueto the increasing competition, thedevelopment in technologyis growing and affecting theperformance and position of each and every company in the automobile industry. It is alsoimportant to co nsider thematurity of technology,together with thematurity andcapacityof manufac turing, which affect the innovation process of any company. Theintellectual prop erty is also important factor, because it is considered as a sign of authenticit yand uniqueness. Due to the different technologies, primarily the help of comput er and theInternet, thepotential for innovation and developmentis increasing PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 14Afte r PEST analysis, these are the opportunities and threats of Proton:On the basis of Porters diamond model (Appendix 6)OPPURTUNITIES Available government support Eco nomic of scale Available technological innovations New product development toimpro ve the capability of theexisting models Strategic alliances Improve customer servi

ce Brand image, and Building world-class vendorTHREATS Slow growth Economic crises C hange in the consumer lifestyle Changing technology New competitors entering thema rket Threat of substitute product Threat of trade disputes PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 15ANAL YSIS INTERNAL ENVIRONMENTTheconditions,entities,events,andfactorswithin an organ ization that influence its activities and choices, particularly thebehaviorof th eemployees.Factors that are frequently considered part of the internal environme nt include theorganization smissionstatement,leadership styles, and itsorganizat ional culture.(S.Janat,.2009) According to value chain (Appendix- 2), we can ident ify strengths and weakness of proton.STRENGTH strong support from thegovernment Pr oton has over 20 years of experience Experience of exporting cars Availability of funds Popular in domestic country WEAKNESS Over reliant on the government Lack of successful operationinternationally Limited product line Quality constraint Less h uman resource Lack in R&DCORE COMPENTENCIES CORE COMPENTENCIES refers to strength s or strategic advantages of a business. Corecompetencies are the combination of pooled knowledge and technical capacities that allow abusiness to be competitiv e in the marketplace. (Johnson, at el, 2008) PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 16BUIL DING SENARIO PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 17Expe rtisePROTON expertise is focused around three axes: An industry/sector view, a g eographicview, and a functional view.1. Industry/Sector Areas of ExpertiseProton Advisors has working knowledge in these two business sectors:Financial Services It is expertise in the global securities markets; including deep expertise in a ll aspects of electronic trading, market data, order routing, execution manageme nt, order management,order matching and execution. We also have substantial expe rtise in independent/automatedresearch technologies, including internet technolo gies such as semantic search and analysis.We have worked for market data and inf ormation vendors, brokerages, stock exchanges, andasset managers, advising on an d delivering solutions for electronic trading.Networking and TelecommunicationIt has extensive experience in global telecommunications, with a strong focus on b usiness-to-business IP services and low latency networking for high-speed tradin g strategies. We haveworked for network and telecommunications companies, been c ustomers of those companies,and have advised network and telecommunications comp anies as well as network andtelecommunications hardware and software suppliers.2 . Geographic ExpertiseProton Advisors has worked with clients to deliver solutio ns around the world, withparticularly strong experience in the major financial m arkets.3. Functional ExpertiseProton Advisors has working experience in the foll owing functional areas:Business Strategy PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 18The foundation of your success is a business strategy that recognizes the strengths that youbring to the marketplace, and deploys your assets optimally to exploit t hose strengths. Wecan help you develop and refine your strategy.Operational Exec ution It doesnt matter how brilliant your strategy is unless it is effectively ex ecuted. Your goalsand objectives must flow from that strategy, and be supported by the right measurements,reward systems, and business processes. We can help yo u implement your strategy andtroubleshoot your current operations.Marketing Stra tegy and Product Development A core element of any strategy is an understanding of what the market will pay for, and anability to deliver products that customer s will value. We can help you implement aneffective, market driven product devel opment methodology, and develop an effective go-to-market approach.Information T echnology and Business Process Underlying the success of any business strategy t oday is a set of information systems that aredriven by and aligned with your bus iness goals. You must have effective systems to manageyour order-to-cash cycle, your customer service interactions, and to provide you with theinformation you n eed to support timely and quality decision making. We can assess yourinformation technology systems, business processes, and organization, and recommend howto i mprove them so that they effectively support your business goals.PROTON was focu sing on the above area before 2006(PERODUA entered in market) butnow the scenari o has been changed because it is not working up to the benchmark. So, at thispoi

nt of time we can find that proton does not have any core competencies.BUT,in or der to get a sustainable competitive advantage, proton should gofor:(On the basi s of Competitive advantage Appendix-5)Vehicle DevelopmentVehicle Development inc ludes strategic alliance, value added partnership with Lotus, MVAgusta and Mitsu bishi. PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 19Inno vation Capacity Building at PROTON- It includes Engineering and R&DProcess, Skil l Building, Knowledge Management, Manufacturing, Quality Certification asper sta ndards. Knowledge Sharing Culture: Proton Engineers Technical Partners Venders Suppl iersFlexible Production Attained through optimizing the resources Standardized Wor k-Implemented by JIT and Pull system Overall Equipment Effectiveness (OEE) Monitor ing-That includes availability, performanceand quality of PROTON cars throughout at optimum level. Proton is also working on LEANMANUFACTURING Lean Manufacturin g is the process of improvement and wasteelimination undertaken by PROTON by avo iding unnecessary processes in car manufacturingand unnecessary stock.Fuel effic iencyProton knows the price of fuel isnt getting any cheaper. The Proton Savvy us es just 5.7liters per 100km combined city and highway driving (as per ADR81/01)C ustomer serviceAll new Protons come with a competitive warranty to give you adde d confidence. All Protonvehicles are backed by a comprehensive 3 year warranty. Plus you will also receive freeroadside assistance in the case of a breakdown. P roton also guarantees your car againstcorrosion. Each Proton vehicle comes with a minimum 5 year comprehensive corrosionwarranty for peace of mind against corro sion. Proton vehicles undergo a Pre DeliveryInspection by its Proton Dealer in a ccordance to the recommended inspection schedule set byProton Cars. PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 20Stra tegy Alternatives and RecommendationTOWS ANALYSISTOWS Matrix is a relatively sim ple tool for generating strategic options. By using it, we canlook intelligently at how we can best take advantage of the opportunities, at the same timethat we minimize the impact of weaknesses and protect us against threats. Used after de tailedanalysis of threats, opportunities, strength and weakness, it help us to c onsider how to use theexternal environment to our strategic advantage, and so id entified some of the strategicoptions available. (Johnson, et al, 2008)The TWOS Matrix is an important matching tool that helps managers develops four types of strategies:SO strategies use a firms internal strengths to take advantage of ext ernal opportunities.WO strategies are aimed at improving internal weaknesses by taking advantage of external opportunities.ST strategies use a firms strengths t o avoid or reduce the impact of external threats. WT strategies are defensive ta ctics directed at reducing internal weaknesses and avoidingexternal threats. PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 21TWOS MATRIX OF PROTONINTERNAL STRENGTH1. Commendable experience of 20years.2. Govern ment support.3. Experience of exporting cars. 4. Availability of funds INTERNAL WEEKNESS1.Over reliant on the government2.Lack of successful operationinternatio nally3.Limited product line4.Quality constraint5.Less human resourceEXTERNAL OPP URTUNITY1. Worldwide demand of product2. Collaboration with Asiancompanies may b oost up the sales.3. Proton is evaluating a plan tobuilt a manufacturing plant i sEgypt.4. Economic of scaleS O1. They can enter in new globalmarket because it h as goodexperience. (INTERNATIONALlevel strategy)2. It has government support, so they can provide quality service atbest price.(BUSINESS levelstrategy)3. Company can go for jointventure or collaboration.(INTERNATIONAL levelstrategy) W O1. Tr y to increase the productionwhile working on worldwideoperation.(international l evelstrategy)2. The manufacturing plant inEgypt may increase its productline.( I nternational level strategy)EXTERNAL THREAT1. Slow growth2.Economic slow down3.C hange in the consumerlifestyle4.Changing technology5.New competitors entering th eS T1. Try to manufacture fuel efficientcar to increase sales.((operationallevel strategy)2. By their well qualified andtechnical R&D department they canattract more customers and can leadin terms of quality, cost andinnovation amongst thei rcompetitors.(operational levelW T1. Reduce the price of cars as muchso it can b e affordable for everycustomer.(Business level strategy)2. Always try to increas e the salesas it has good experience in export.(Business level strategy)

PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 22mark etstrategy)ALTERNATIVE STRATEGY: Here we are referencing the method and directio n of strategic development beyond the scope of TWOS matrix but within the scope of companysdirection. 1. CAPTURE THE MARKET Proton cancapture the market, but com peting at a local level should not be the concern forProton thus for competing a t a global level it should have some strategy that involves itsstrengths and opp ortunities so that it can overcome its weaknesses and threat.2. MAINTAINING COST LEADERSHIPIt needs to have acost cutting strategyso that it can invest in globa l market as it can alsomanage low cost of its car3. ATTRACT CUSTOMERSIt can also have some expert people to build some international strategy to know the custom sand attract the customer segment of the countries in which it is going to expan d its market.4. UNIQUE DESIGNIn order to sustain in the current scenario of mark et, Proton must move towards uniquedesign. It will give an advantage to compete with its domestic as well as global competitors.5. HYBRID CARProton should go fo r hybrid as it will lead to low cost with a product differentiation in termsof p roduct development as presently their products are not going well and with the h elp of well experienced and trained employees they can generate economies of sca le by examiningcustomer needs. PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 23CURR ENT STRATEGY1. Vehicle PlatformThis department is responsible for vehicle develo pment programmers covering: Product Strategic Planning. Styling. Supplier Developm ent Programmer. Natural Gas Vehicles (NGV) Hybrid car PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 242. P rototype Centre Its leading-edge facilities and high precision tools allow error -freeprototypes to be built with extremely short lead times. The prototype centr e is made up of thefollowing:- Clay Modeling 3D scale models allow designers and e ngineers to conduct feasibility studies onpreliminary designs. Rapid Prototyping E xtremely fast production of prototype samples is possible during the development timing. Prototype Shop .Full functioning prototypes are developed, as per vehicle designspecifications. This enables testing to be carried out. PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 253. E ngineering Development & Services This Department will help proton to perform a regulatory and management function: Vehicle Architecture Maintaining a product eng ineering parts database for Vehicle Development plan Managing data communication related to engineering designs with vehicle programsand PROTON vendors4. Proton lifecycle management (PLM)As PROTON grows beyond the local market, we continue t o employ innovative technologywhich will help us to accelerate the development o f our products in a more timely, and costeffective manner. Product Lifecycle Man agement (PLM) solution is an initiative thatPROTON has adopted, to manage the en tire product lifecycle processes right fromconceptual design through to after sa les support. The program is being carried out togetherwith the support of Hewlet t-Packard (HP) and Siemens PLM. PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 26RECO MMENDED STRATEGYAfter doing this study I found that among Protons strategies, It should go for followingstrategy:(1)Attaining cost leadershipanddifferentiation s trategiesby improving the R&D sectorand accelerating investment in product devel opment.(2) Exploring newniche marketandstrategic alliancein order to expand the distributionchannels.(3) Providingnew brand imagesto accelerate public confidenc e andbrand loyaltyin thedomestic and international market(4)Diversifying parts c omponentsources and selectingreputable supplierswould help inachieving cost redu ction effort of the company.(5) Creatingstrategic allianceto improvetechnical Ca pabilityas well as to penetrating newmarket andacquiring faster transfer of tech nologyand technical-know-how.(6) It should go for morecustomers responsiveness.(7 ) To rationalizing its operations particularly intechnological internalizationef forts andoncontinuous improvementprograms inMalaysia and Thailandit should incre ase itscompetitiveness. (8) They should look at thepossibility penetrating of di rect exportsto other assemblersoutside and within ASEAN, such as Japan (possibly through strategic alliance withKatayama), and the growing markets such as in In dia and Turkey.(9)According to BCG Analysis Proton falls under Question mark in a result of which it cango for investing in new opportunities likeJoint Venture.

To be in capable of adapting theLean Manufacturing it should go with Toyota. PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 27CONC LUSION This research conducted focused on the current and future strategy of pro ton with theobjective of obtaining better understanding of the current practices in the Current marketscenario of the Malaysian automotive industry.COMPAYS TIME FRAME PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 28TIME FRAMEThis will help proton to identify the area of improvementACCORDING TO THE ANALYSIS OF TIME FRAME OFPROTON, JUST AFTER 3 -4 YEARS, COMPANY WILL BE ABLETO B OOST ITS COMPETITIVENESS ACROSS THE WORLD. PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 29STRA TEGIC ACTIVITY MAP OF PROTONThis is an activity mapping tools that allows you to plot lower & higher order thinking skillsagainst application in a unit of work, a subject or cross circulation across several subjects.Then in predictable & un predictable real world situation and scenarios which almostuniversally call on k nowledge, process and skills from many area. This map can be helpful ininforming managers what they can do to preserve and strategic capability. PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 30LEVE LS OF STRATEGYNow, we can conclude that PROTON has indeed working very hard for total qualitymanagement, customer responsiveness, product development and strate gic collaboration. Dueto the hyper competition in market it will be important to focus on the Best Productpositioning. To have this they must have a good R&D at their inbound logistic. In order to getsustainability in market they must focus on low cost or differentiation of the products. Inorder to maintain the process of engineering and designing passenger cars which will suit thetaste and prefer ences of the customers this is affected by different demographics, economicsand social factors. Apart from this, managing key risks and identifying emerging ris ksespecially in export markets will also play an important role for being a majo r internationalplayer. Thus, Company should go for right product, at right place , at right price and righttime. PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 31REFR ENCESBOOKS C,Sunil,M,Peter,and D,Kalara,2010,Supply chain management, 4thEdition, SouthAsia,Dorling Kindersley. Kotler, P. and Keller, K.L, 2009, Marketing Managem ent, South Asia, New Jersey,(pp 53, 77-84) A. Pierre, et al 2007, International s upply chain management, Canada, Nelson. D, Garry and W, Margareta, .2007, The man agement of technology and innovation,1stEdition, Canada, Nelson. G,Vipin,G,Kamal, R.srinivasan.,2009,Business policy ad strategicmanagement,India,PHI Pvt Ltd. H, J ones, 2009, Essentials of management, Canada, Nelson. Johnson, Schools, K and Whi ttington.richard, 2011, Exploring corporate strategy,seventh Edition ,India, Dor ling Kindersley K, Azhar., 2010,Strategic management and business policy,India,T ata Mc Graw. K, Philip, 2009, Marketing management, 13th Edition,South Asia,Dorli ng Kindersley. NL, Charles. 2010,.Integrated approach to strategic management, So uth Asia,Pearson. Prahalad, C. K, and Hamel, .1990, The core competence of the or ganization.HARVARD BUSINESS REVIEW, (90, 79 93) R,Duane et al, 2009,Strategic man agement,Canada,Nelson. S, Janat, 2009, Supply chain management, South Asia, Pears on. S, Robbins,. 2007, Management, 9th Edition,Us,Prentice Hall. Tyagi.R., Availab le from: www.ProcessExcellenceNetwork.com/,[Accessed: 12thNov, 2011]( BALANCE SC ORE CARD) PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 32JOUR NALS Garth, S, at el, 2008,Strategic Management , Delhi: John Wiley and Sons Inc. Hax, A. and Wilde II, D, 2003, The Delta Model-A New Framework of Strategy. Journa l of Strategic Management Education ,vol. 1, no. 1. Availablefromhttp://pesona.m mu.edu.my/~wruslan/MISP2/Readings/detail/Reading-37.pdf. Kuemmerle, W., 2001, Ho me base and knowledge management in internationalventures. JOURNAL OF BUSINESS V ENTURING, 17, 99 122; Lorenzoni, G.,&Lipparini, A. 1999. Prahalad, C. K., and Ham el, G, 1990, Thecore competence of the organization, Harvard Business Review, 90 , 79 93.ARTICLE 2003, LG CNS Automotive Consulting Service 2010, Market Watch 2010 ,T he Malaysian Automotive and Supplier Industry, p34- 46. Abidin A.S.Z., 2011, Expl oratory Study: Design Capabilities Development forMalaysian Vendors in Automotiv e Industry,Proceedings of the 2011 InternationalConference on Industrial Enginee

ring and Operations Management Kuala Lumpur, Malaysia,p45-46. Abidin, A., 2011, P roceedings of the World Congress on Engineering, Assessing Protonand Vendors Des ign Capabilities towards Internationalization, 1 (2), p5-6. Arshad, S., 1996,The history of the Malaysian automotive industry, p67-69. Mokhtar, M., 2010, Proton A nnual Report. PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 33WEBS ITE Strategic Management, Availablefrom:http://www.emeraldinsight.com/products/jo urnals/journals.htm?id=jsma,[Accessed- 11thOct, 2011] Business Strategy, Availabl e from:http://tutor2u.net/business/strategy/ansoff_matrix.htm[Accessed- 25thOct, 2011] Proton, Available from:www.proton.com,[Accessed-17thOct, 2011] Proton, Avai lable from:www.proton-edar.com.my,[Accessed- 23thOct,2011] Investopedia, Availabl efrom:http://www.investopedia.com/terms/v/valuechain.asp#axzz1daBEIoBh,[Accessed - 01stNov, 2011] Businessdictonary, Available from:http://www.businessdictionary. com/definition/capability.html,[Accessed- 07th Nov,2011]. Proton, Available from: http://www.hoovers.com/proton-holdings/--ID103957-- /freeuk-co-factsheet.xhtml,[ Accessed-26nd Oct, 2011]. Investopidia, Available from: http://www.investopedia .com/terms/1/80-20-rule.asp#ixzz1deOo97Pb,[Accessed- 11th Nov, 2011]. Trading Eco nomics, Available from:http://www.tradingeconomics.com/malaysia/inflation-cpi,[A ccessed- 12th Nov,2011] PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 34APPE NDIXAppendix-1PEST ANALYSIS Factors Could includePolitical e.g. International t rade, the euro, taxation policy, government traderegulationsEconomical e.g. Inte rest rates, exchange rates, national income, inflation,unemployment, stock marke t,Social culturalfactorse.g. Ageing population, attitude to work, income distrib utionTechnological e.g. Innovation, new product development, rate of technologic alobsolescence , R & DEnvironmental e.g. Global warming, environmental issues, w aste disposal, energyconsumptionLegal e.g. Competition law, health and safety, e mployment law, product safety PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 35APPE NDIX-2Value chain analysi: Value Chain Analysis describes the activities that ta keplace in a business and relates them to an analysis of the competitive strengt h of the business.Influential work by Michael Porter suggested that the activiti es of a business could begrouped under two headings:(1)Primary Activities- those that are directly concerned with creating and delivering aproduct (e.g. compone nt assembly); and(2)Support Activities, which whilst they are not directly invol ved in production, mayincrease effectiveness or efficiency (e.g. human resource management). It is rare for abusiness to undertake all primary and support activ ities.Value Chain Analysis is one way of identifying which activities are best u ndertaken by abusiness and which are best provided by others ("out sourced").Lin king Value Chain Analysis to Competitive Advantage What activities a business un dertakes is directly linked to achieving competitive advantage.For example, a bu siness which wishes to outperform its competitorsthroughdifferentiatingitself th rough higher quality will have to perform its value chainactivities better than the opposition. By contrast, a strategy based on seekingcostleadershipwill requi re a reduction in the costs associated with the value chain activities, or aredu ction in the total amount of resources used.Primary Activities Primary value cha in activities include:PrimaryActivity Description Inbound All those activitie s concerned with receiving and storing externally sourced PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 36logi stics materials Operations The manufacture of products and services - the way i n whichresourceinputs(e.g. materials) are converted tooutputs(e.g. products) Ou tbound logistics All those activities associated with getting finished goods and services tobuyers Marketing and sales Essentially an information activity informing buyers and consumers aboutproducts and services (benefits, use, price etc.) Service All those activities associated with maintaining product performa nce afterthe product has been soldSupport Activities Support activities include: SecondaryActivity Description Procurement This concerns how resources are a cquired for a business (e.g. sourcing andnegotiating with materials suppliers) Human Resource Management Those activities concerned with recruiting, developin g, motivating andrewarding the workforce of a business Technologyevelopment Act

ivities concerned with managing information processing and thedevelopment and pr otection of "knowledge" in a business Infrastructure Concerned with a wide ran ge of support systems and functions such asfinance, planning, quality control an d general senior managementSteps in Value Chain Analysis Value chain analysis ca n be broken down into a three sequential steps:(1) Break down a market/organizat ion into its key activities under each of the major headingsin the model; PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 37(2) Assess the potential for adding value via cost advantage or differentiation, or identifycurrent activities where a business appears to be at a competitive disad vantage;(3) Determine strategies built around focusing on activities where compe titive advantage canbe sustainedAPPENDIX-3 SWOT analysis: SWOT analysis is a met hod for analyzing a business, its resources, and itsenvironment.SWOT is commonly used as part of strategic planning and looks at: Internal strengths Internal weak nesses Opportunities in the external environment Threats in the external environme nt PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 38SWOT can help management in a business discover: What the business does better than t he competition What competitors do better than the business Whether the business i s making the most of the opportunities available How a business should respond to changes in its external environmentThe result of the analysis is a matrix of po sitive and negative factors for management toaddress: Are internal to the busines s Relate to the present situationOpportunities and threats Are external to the bu siness Relate to changes in the environment which will impact the businessUsing S WOT analysisThe key words arematch and convert:A key challenge for any business is to convert weaknesses into strengths. For example:Weakness Possible Response Positive factors Negative factors Internal factors Strengths Weaknesses External factors Opportunities Threats PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 39Outd ated technology Acquire competitor with leading technologySkills gap Invest in t raining & more effective recruitmentOverdependence on a single product Diversify the product portfolio by entering new marketsPoor quality Invest in quality ass uranceHigh fixed costs Examine potential for outsourcing or off shoringAPPENDIX4Porter s Five Forces Model: analyzing industry structureDefining an industry An industry is a group of firms that market products which are close substitutes f or each other(e.g. the car industry, the travel industry).Some industries are mo re profitable than others. Why? The answer lies in understanding thedynamics of competitive structure in an industry.The most influential analytical model for a ssessing the nature of competition in an industry isMichael Porter s Five Forces Model, which is described below: PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 40Port er explains that there are five forces that determine industry attractiveness an d long-runindustry profitability. These five "competitive forces" areThreat of N ew Entrants New entrants to an industry can raise the level of competition, ther eby reducing itsattractiveness. The threat of new entrants largely depends on th e barriers to entry. High entrybarriers exist in some industries (e.g. shipbuild ing) whereas other industries are very easy toenter (e.g. estate agency, restaur ants). Key barriers to entry include1. Economies of scale2. Capital investment r equairements3. Customer switching costThreat of Substitutes The presence of subs titute products can lower industry attractiveness and profitabilitybecause they limit price levels. The threat of substitute products depends on:1.The relative price and performance of substitutes2.The costs of switching to substitutesBarga ining Power of Suppliers Suppliers are the businesses that supply materials & ot her products into the industry.The cost of items bought from suppliers (e.g. raw materials, components) can have asignificant impact on a company s profitabilit y. If suppliers have high bargaining power overa company, then in theory the com pany s industry is less attractive.Bargaining Power of Buyers Buyers are the peo ple / organizations who create demand in an industryThere are few dominant buyer s and many sellers in the industry.Buyers threaten to integrate backward into th e industry

PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 41Supp liers do not threaten to integrate forward into the buyer s industry.The industr y is not a key supplying group for buyers.Intensity of Rivalry The intensity of rivalry between competitors in an industry will depend on:The structure of compe tition- for example, rivalry is more intense where there are manysmall or equall y sized competitors; rivalry is less when an industry has a clear market leaderT he structure of industry costs- for example, industries withhigh fixed costsenco uragecompetitors to fill unused capacity by price cuttingDegree of differentiati on- industries where products are commodities (e.g. steel, coal) havegreater riv alry; industries where competitors can differentiate their products have less ri valrySwitching costs- rivalry is reduced where buyers have high switching costs - i.e. there is asignificant cost associated with the decision to buy a product from an alternative supplierStrategic objectives- when competitors are pursuing aggressive growth strategies, rivalry ismore intense. Where competitors are "mil king" profits in a mature industry, the degree of rivalry is lessExit barrierswhen barriers to leaving an industry are high (e.g. the cost of closing downfact ories) - then competitors tend to exhibit greater rivalry.APPENDIX-5Competitive Advantage: Acompetitive advantage is an advantage over competitors gainedby offe ring consumers greater value, either by means of lower prices or by providing gr eaterbenefits and service that justifies higher prices. Competitive Strategies: Following on from his work analyzing thecompetitive forces in anindustry,Michael Porter suggested four "generic" business strategies that could be adopted inord er to gain competitive advantage. The four strategies relate to the extent to wh ich thescope of businesses activities are narrow versus broad and the extent to which a businessseeks to differentiate its products. PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 42The fo ur strategies are summarized in the figure below:The differentiation and cost le adership strategies seek competitive advantage in a broadrange of market or indu stry segments. By contrast, the differentiation focus and costfocus strategies a re adopted in a narrow market or industry.Differentiation This strategy involves selecting one or more criteria used by buyers in a market - and thenpositioning the business uniquely to meet those criteria. This strategy is usually associat edwith charging a premium price for the product - often to reflect the higher pr oduction costsand extra value-added features provided for the consumer. Differen tiation is about charging apremium price that more than covers the additional pr oduction costs, and about givingcustomers clear reasons to prefer the product ov er other, less differentiated products.Examples of Differentiation Strategy:Merc edes cars;Bang & OlufsenStrategy - Cost Leadership With this strategy, the objec tive is to become the lowest-cost producer in the industry. Many(perhaps all) ma rket segments in the industry are supplied with the emphasis placedminimizing co sts. If the achieved selling price can at least equal (or near)the average for t hemarket, then the lowest-cost producer will (in theory) enjoy the best profits. This strategy isusually associated with large-scale businesses offering "standa rd" products with relatively PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 43little differentiation that are perfectly acceptable to the majority of customers. Occ asionally, alow-cost leader will also discount its product to maximize sales, pa rticularly if it has asignificant cost advantage over the competition and, in do ing so, it can further increase itsmarket share. Examples of Cost Leadership:Nis san;Tesco;Dell Computers Strategy - Differentiation Focus In the differentiation focus strategy, a busine ss aims to differentiate within just one or a smallnumber of target market segme nts. The special customer needs of the segment mean thatthere are opportunities to provide products that are clearly different from competitors whomay be target ing a broader group of customers. The important issue for any businessadopting t his strategy is to ensure that customers really do have different needs and want s - inother words that there is a valid basis for differentiation - and that exi sting competitorproducts are not meeting those needs and wants.Examples of Diffe rentiation Focus: any successful niche retailers; (e.g.The Perfume Shop);or spec

ialist holiday operator (e.g. Carrier)Strategy - Cost Focus:Here a business seek s a lower-cost advantage in just on or a smallnumber of market segments. The pro duct will be basic - perhaps a similar product to thehigher-priced and featured market leader, but acceptable to sufficient consumers. Suchproducts are often ca lled "me-too s".Examples of Cost Focus: Many smaller retailersfeaturing own-labe l or discounted label products. Culture and attitudes.APPENDIX- 6Balance score c ard:This method is very much effective to analyze the position of Protonwhen com pared to its competitors on different scale like holdings from share holders,cus tomer satisfaction level. According to balance score card (appendix) it is impor tant forproton to revamp its strategy as in many a cases Proton is stronger but in some it is weak too.Ithas a good position in share market but it is losing it because of Peroduas low cost productand with good quality. PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 44Balanc eScoreCardShareholder Look OperationalEffectiveness Organizational Learning Cust omer targeting Proton Volume, revenue, grossmargin by technologysegment and mark etsegmentRevenue and turnover bygeographical segment(Asia, Europe, MiddleEast, A frica and Pacific)Wholly-ownedsubsidiary LotusEngineering UK leading automotive engineeringconsultancy companyApplication of InformationTechnology in the R&D% o f sales fromnew technologyand models;Training as a % of sales;Customer market sh are bytierProfitability by customertierCustomer satisfaction bytierStrategicandI ntegratedPartnercompanies Volume, revenue,turnover, gross marginby individual cl ientYear over year sales andturnovers growth byindividual clients;Cost to serve clients;Number of clientson each countryand partner;Return oninvestment oncollab orationtools per selectedclients;Customer satisfaction;Joint revenue andturnover fromcomplementaryrelationshipRelationshipBodyShopper Volume, revenue,turnover, gross marginby individual clients;Return on investment perhead;% revenue and sal esfrom new clientsTime needed in order tocomplete thetransactionfrom start to fi nish permodel or project;Returnon investment oncollaboration;Directselling.Cost of thecollaboration toolin order tofacilitate transferof knowledgeCost to serve clients perchannel;Customer satisfaction onthe models, relationshipand cost of p roducts.APPENDIX-7Porter Diamond ModelAccording to Porter, as a rule competitive advantage of nations is the outcome of 4interlinked advanced factors and activi ties in and between companies in these clusters. Thesecan be influenced in a pro -active way by government. PORTER argued that a nation cancreate new advanced fa ctor endowments such as skilled labor, a strong technology andknowledge base, go vernment support, and culture. PORTER used a diamond shaped diagram PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 45as a b asis of a frame work to illustrate the determinants of national advantage. The d iamondrepresents the national playing field that the countries establish for the ir industries. The pointsof the diamond are described as follows 1. FACTOR CONDI TIONS-a country creates its own important factors such as skilledresources and t echnological base. These factors are upgraded / deployed over time to meetthe de mand. Local disadvantages force innovations. new methods and Hence comparativead vantage.2.DEMAND CONDITIONS-A more demanding local market leads to national adva ntage.A strong trend setting local market helps local firms anticipate global tr ends.3.RELATED AND SUPPORTING INDUSTRIES-Local competition creates innovationsan d cost effectiveness. This also puts pressure on local suppliers to lift their g ame. 4. FIRM STRATEGY, STRUCTURE AND RIVALRY-Local conditions affect firmstrateg y. Local rivalry forces firm to move beyond basic advantages.APPENDIX-8The Bosto n Consulting Group Box ("BCG Box") BCG MATRIX OF PROTON MARKET SHAREHIGH LOW PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLOGY Page 46Using the BCG Box (an example is illustrated above) a company classifies all its SBU s according to two dimensions:On the horizontal axis: relative market share- this serves as a measure of SBU strength inthe marketOn the vertical axis: market gro wth rate- this provides a measure of market attractivenessBy dividing the matrix into four areas, four types of SBU can be distinguished:Stars -Stars are high g rowth businesses or products competing in markets where they arerelatively stron g compared with the competition. Often they need heavy investment to sustainthei r growth. Eventually their growth will slow and, assuming they maintain their re

lativemarket share, will become cash cows.Cash Cows- Cash cows are low-growth bu sinesses or products with a relatively high marketshare. These are mature, succe ssful businesses with relatively little need for investment. Theyneed to be mana ged for continued profit - so that they continue to generate the strong cashflow s that the company needs for its Stars.STARSProton can use its cash cow position to reach up to this category as it hasnow started to bring on newtechnology to i ncrease its marketshare in new global market.QUESTION MARKSProton can invest in increasing itsmarket share in that country where thegrowth of market is high as currentlydoes not fall in this category to moveitself to STAR.CASH COWProton sho uld work to get position inthis cell. It has less percentage in thiscell as the growth of otherautomobile industry has now startedincreasing and the holding mar ketshare.DOGIn this category Proton should investmore on those product that are very oldin technology and have poorperformance, as it is bringing up newversion of Exora (Exora 2) M A R K E T G R O W T HL O W H I G H PROTON HOLDING BHD ASIA PACIFIC INSTITUTE OF INFORMATION TCHNOLO GY Page 47Question marks- Question marks are businesses or products with low mar ket share butwhich operate in higher growth markets. This suggests that they hav e potential, but mayrequire substantial investment in order to grow market share at the expense of more powerfulcompetitors. Management have to think hard about "question marks" - which ones shouldthey invest in? Which ones should they allo w to fail or shrink?Dogs- Unsurprisingly, the term "dogs" refers to businesses o r products that have low relativeshare in unattractive, low-growth markets. Dogs may generate enough cash to break-even,but they are rarely, if ever, worth inve sting in.APPENDIX-9ACTIVITY MAP:strategic involves continuity of direction.(port er 2001,p.71).inessence porter argues that strategy involves defining a company will and will not do to themarket place making the hard trade off replicate fit among parts of the activity system thefirm constructs to deliver value to custom ers al with a view to making a superior return oninvestment Graphic represent fo r representation to business modlesand strategy are importantto this paper porte r has develop three representation of strategy. First is five fame work Activity map show that how the company. Activity system map show a companys strategicposi tioning in contained in a set of trailed activities designed to deliver it