Parkson Holdings Berhad

Parkson Holdings Berhad (PHB) was incorporated under the Companies Act, 1965 on 26 August 1982 as a private limited liability company under the name of Amalgamated Cement Mills Sdn Bhd. On 27 August 1988, it changed its name to Amalgamated Containers Sdn Bhd. It was converted to a public company on 17 August 1992 and assumed its present name on 19 September 2007. PHB was listed on the Main Market of Bursa Malaysia Securities Berhad on 28 October 1993. PHB is an investment holding company with stakes in Parkson Retail Asia (PRA) and Parkson Retail Group Limited (PGRL), listed on the Singapore Stock Exchange and Hong Kong Stock Exchange respectively. It also owns and manages KL Festival City mall located in Setapak, Kuala Lumpur. PRA which was listed on 3 November 2011, operates a total of 52 department stores in Malaysia, Vietnam and Indonesia. Under the Parkson brand name, it has 37 and 8 stores in Malaysia and Vietnam respectively; and in Indonesia, it has 7 stores under the brand name of Centro Lifestyle Department Store and a Kem Chicks Supermarket. PRGL, which made its debut listing on 30 November 2005 is one of the premier retail operators in the People’s Republic of China (PRC) having an extensive network of 49 department stores covering 31 major cities in 23 provinces across PR

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DEFINITION OF GLOBAL BUSINESS MANAGEMENT

Global business consists of transactions that are devised and carried out across national borders to satisfy the objectives of individuals, companies, and organizations. These transactions take on various forms, which are often interrelated. Primary types of international business are import export trade and foreign direct investment (FDI). The latter is carried out in varied forms, including wholly owned subsidiaries and joint ventures. Additional types of international business are licensing, franchising, and management contracts.

As the definition indicates, and as for any kind of domestic business, “satisfaction” remains a key tenet of global business. Beyond this, because transaction environmental factors, to different constraints, and to quite frequent conflicts resulting from different laws, cultures, and societies. The basic principles of business still apply, but their application, complexity, and intensity vary substantially. To operate outside national borders, firms must be ready to incorporate international considerations into their thinking and planning, making decisions related to questions such as these:

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● How will our idea, good, or service fit into the international market? ● Should we enter the market through trade or through investment? ● Should I obtain my supplies domestically or from abroad? ● What product adjustments are necessary to be responsive to local conditions? ● What threats from global competition should be expected and how can these threats be

counteracted? When management integrates these issues into each decision, international markets can provide growth, profit, and needs satisfaction not available to those that limit their activities to the domestic market place.

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PUSHING AND PULLING FACTORS

PUSHING FACTORS · Experience working Many workers Parkson has more than 5 years working with Parkson. Staff are our greatest asset a company in which the operation will be more easily managed by them.The staff is committed and this can prevent the occurrence of large errors in the operation. The company also invested time and money in recruiting and permanent intheir forms.

· The location is good All Parkson stores are located in strategic areas, particularly in urban and residential areas. Customers can access to Parkson stores easily. Most of Parkson stores located in the buy - side with part of it is strong and tenants in the complex.

A strong financial background At this time, Parkson has a strong financial position and is supported by the Lion Group.With a strong financial position, management may open new branches in Malaysia.

· Product Quality Goods Parkson has been known retail brands in Malaysia. At this time, Parkson has been selling quality goods to customers. Retail goods offered products are branded materials at affordable prices. Goods - merchandise was ordered from local suppliers and international suppliers.

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· Support from vendor Parkson has a strong relationship with the vendor since it operates. Good support fromvendors is very important for companies to succeed in the industry where companies can get the lowest price and at the same time the company also helps vendorsindirectly

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PULLING FACTORS Alfred Cheng, managing director of Parkson Retail Asia was said , according to market consultancy Euromonitor, retail sales by value in the department store sector are projected to grow 4.5%, 9.1% and 10.7% for Malaysia, Vietnam and Indonesia respectively between now 2015. Establish 24 years ago in Malaysia, Parkson is now the nation’s second largest department store operator, with chain 0f 36 stores in 24 cities in a market share of about 20% . Is also operates sores in Vietnam, where it controls about 36% of the department store sector. Earlier this year, it entered the Indonesian market through the acquisition of Centro Retail, a local chain of department store focused on the middle class.Cheng expect to see “dramatic growth” in Indonesia over the next few years, and plan have already been drawn up for more Parkson stores across a dozen cities in the country. Indonesia expansion With a current market share of just 2.5% in Indonesia, however, Parkson Retail Asia could face a tough time stabling a foothold in the middle-to upper-middle-class consumer market there. Indeed, it faces head-on competitionwith other department store operator such as Sogo, Debenhams and Metro as well as local players such as Matahari and Ramayana and other speciality stores or standalone outlets offering the same product. That could see Parkson Retail Asia struggle to gain headway in the world fourth most popular nation. Cheng isn’t worryyied, though. To take on his rivals, he intends to have the compony focus on fashion and cosmetics for a young, contemporary market, particularly in Jakarta and Bali.

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Meanwhile, he plans to pursue a dual-brand strategy in Indonesia, ehich will see it leverging on the widely known Centro brand to capture the “underserved” middle-class market and expand its network to at least 12 or 13 cities in Indonesia. Cheng will also open new Parkson department stores to meet the demands of the Indonesia upper class in first-tier cities such as a Jakarta, Medan and Surabaya. Cheng believes that Parkson’s size and reputation will enable it to attract a wider base of international brands into its fold. “Also,the Indonesians already know our brand, since they tend to travel a lot in Malaysia and they have been asking for our brand for a while now. So, that will shorten our brand-building process in Indonesia.

Lesson From China To successfully enter the Indonesian market, Parkson can also use the experience gained from its operations in Chna, which is controlled under a separate compony listed in Hong Kong – Parkson Retail Group – of which is also managing director. Parkson is the first department store operator to up set its store in 1994 in Beijing and nw operates 50 outlets in 23 provinces across the country. How did Cheng manage to build this Malaysians brand into most successful department store operator in China? “ One of our advantages was being there early” he says. To be sure, when Cheng brough Parkson to China, the department stire sector in the country comprised a handful of fragmented operators “We were the first to introduce a brand with a personality and, over the years, we have developed standard of consistency and service that set us apart from our rivals”

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Parkson also hires mainly local talent, which allows it to better understand the needs of each market and tailor the merchandise according to customer demands. Indeed, even difference in the weather in each city in China plays a part in influencing the size and colour of the apparel customers look for. Parkson currently hires some 13,000 staff across China, of whom just 40 are expatriates. “At the end of the day, it’s the merchandise that draws the consumer and we have platform experience to offer our customers what they need” says Cheng “Understanding your customers better than your competitors is the key to success in this sector. Coming out on top in the Chinese market gives us the confidence to operate in other countries” That experience will certainly help Singapore-listed Parkson Retail Asia, which will hold all of its department stores outsides China. Indeed, Parkson is also exploring opportunities for growth in other Southeast Asia markets and will become the first department store operators to enter Cambodia when it opens its first outlets in Phnom Penh in 2013. In total, Parkson runs about 50 outlets across Southeast Asia, with profits hitting S$36 million for FY ended June 30, up about 60%year-to-year (y-o-y) on the back of S$367 million in revenues, up 10% y-o-y. “We have branded ourselves as a fashionable,family department stire targeting the middle to upper-middle classes in the markets that we in” Chengs says “In each country we have tailored our merchandise to appeal to the local consumer, even though certain more high-profile stores such as the Parkson outlets in KLCC and Pavilion Kuala Lumpur see a higher volume of tourist”

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Parkson Retail Asia closed its first day trading at S$1.13, with 35.5 million shares changing hands. At these levels, the stock has a market capitalization of S$765 million, or 18 times earnings. After the listing, parents compony Parkson Holdings Bhd- which is controlled by Parkson Retail Asia chairman Cheng Heng Jem- will hold a 70.5% stake in the compony. “listing is Singapore at this time is the right thing to do because we have just entered Indonesia and announced a new store in Cambodia ” “Based on our growth profile and ability to execute, we are bullish on longe term and believe our equity vqlue will be roth a lot more than the market recover ” The Edge Singapore

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SUCCESS RECIPE AND FORMULA According to Parkson, there is. Especially in knowing who the “relevant shoppers” are and how to reach them. Parkson has been a household name in Malaysia for the last 20 years, but to to help propel the chain toward becoming a premier retail brand, Parkson needed the right tools to turn its masses of data into accurate and significant information.

The Parkson chain Established in 1987, Parkson Corporation Sdn. Bhd. (Parkson) is the retailing arm of the diversified Lion Group, and has rapidly become one of the largest retail chains in Malaysia. Parkson operates on the tiered store/labels concept with three different store formats selected based on the retail market for each location. To date, Parkson boasts 31 stores operating nationwide in Malaysia. Its premium brands, Parkson Pavilion and Parkson Suria KLCC, offer a whole new store environment with contemporary retail presentation, while its Parkson Grand department stores cater to middle- and upper-income families with a selection of merchandise focused on style, quality and variety. For those in the middle- to lower-income tier, Parkson Ria provides variety and quality at affordable prices. Parkson is also present in Vietnam and China. In China, it is one of the largest foreign-owned retailers, with operations in prime locations across 26 major cities.

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Understanding the customer In the effort to maintain its status as a household name, Parkson is always looking for ways to optimize its market reach, customer understanding and revenue. To take its business to the next level, the company needed insight into customer behavior. After several months of extensive evaluation, Parkson chose SAS Customer Intelligence to help achieve its objectives. SAS had already demonstrated itself as the best business intelligence vendor with global brands such as Office Depot, 1-800-FLOWERS.COM, Staples and Federated Department Stores. So Parkson embarked on a three-year investment to implement SAS Customer Intelligence throughout its stores across Peninsular and East Malaysia. The SAS solution uses data mining for predictive analysis of customer trends and behavior (customer segmentation), allowing the retailer to have a clearer understanding of customer behavior. Armed with this information, Parkson is able to enhance its marketing campaigns in a three-pronged approach, including recency, frequency and monetary analysis, in an effort to increase shopper visits and encourage greater spending at its various outlets.

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Reaping from intelligence Since the implementation of SAS, Parkson has successfully undertaken several campaigns to identify and reach its relevant shoppers. Parkson’s General Manager – Management System, Lee Kong Huat, shares that it is always the intention of the retailer to minimize the cost of running marketing campaigns, but strive for optimal results.

“An example of how SAS helped Parkson achieve this was during the Parkson Members Day promotion, when mailers were sent to pre-selected members of BonusLink (Malaysia's premier multipartner consumer rewards program). Using SAS, Parkson was able to identify the best pool of shoppers to send the mailers to,” says Lee.

Upon implementation of the SAS solution, the number of shoppers responding to Parkson’s mailers increased by 40 percent against the annual average. In addition, Spending per shopper amongst those who responded to the mailers was also an average of 20 percent higher than those who did not receive the mailer. SAS also helped Parkson in a churn campaign targeting members who had stopped shopping at Parkson. With SAS, the company was able to identify members who could potentially be retained and helped Parkson reverse their churning behavior. As SAS helps single out the relevant shoppers for Parkson – those who visit their outlets frequently and have greater spending power – the company can now understand each of the customer segments better, including information about their favorite brand, spending power, types of purchases and more.

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“The SAS model provides us with a much more comprehensive and systematic way of analyzing the data we have. It points out methods to increase our mailer response rates and the efficiency of our routine campaigns -- with the same budget,” says Lee, adding that the customized reports provided by SAS have helped the company speed up its decision-making process.

“We are definitely seeing significant ROI from Parkson outlets nationwide as SAS allows us to better understand our shoppers and craft more effective campaigns that focus on customers’ needs, habits and push-points.”

Moving forward, Parkson plans to implement several campaigns tailored to the different segments and needs of existing and potential customers.

“Armed with SAS, we can identify the best opportunities for us and are looking forward to exciting times ahead as we move forward with plans to provide a richer shopping experience with the right choices, variety and great ambience and to attract both planned and impulse buys,” adds Lee.

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CONSTRAINTS & OTHER CONSIDERATIONS,SUMMARY & CONCLUSION In overall, a lot of factors to support Parkson throght globalization. That because Parkson pulling factors are very efective. For example, Parkson has establish in malaysian markets more than 20 years, has over 30 branches throughout the country. This is showns that Parkson has a strong organization structure and the potential to expand further. The other factor is pulling factor are exits from a few contry around south east asia. With economic condition are different in every country,that will support this organization to more direcly proactivly exstand the business empire. For example in Vietnam and Indonesia, this country has a lot of people and will open up many job opportunities to the people of the country. For the future, I am sure that Pakrson will be another big global brand in the world.

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REFERENCE

http://www.lion.com.my/WebCorp/phb.nsf/Intro Czinkota, Michael R., Ilkka A. Ronkainen and Michael H. Moffett. Fundamentals of International Business. Mason: South-Western, 2004. http://sbaer.uca.edu/publications/international_business/pdf/01.pdf http://www.sas.com/success/parkson.html http://wwwnorismaieja.blogspot.com/2009/04/objektif-utama-analisis-perniagaan.html http://wwwnorismaieja.blogspot.com/2009/04/parkson.html http://www.theedgemalaysia.com/features/195919-parkson-retail-asia-bullish-on-growth.html The Edge Financial Daily, Novermber 10, 2011

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