Yee Lee Corporation Bhd group ( YLC ) is a keeping company which is the comestible oil repacker in Malaysia in 1968.Through its subordinates, it operates in four sections which are fabricating, plantation, trading and others which related to touristry services and investing retention. YLC non merely manufactures cooking oils and besides as a selling and distribution company which helps to make marketing on drinks and administering to clients. Its direct subordinates are Yee Lee Trading Co.Sdn.Bhd. , Yee Lee Palm Oil Industries Sdn.Bhd. , Yee Lee Edible Oils Sdn.Bhd. , South East Asia paper Products Sdn.Bhd. , Canpac Sdn.Bhd. , Intanwasa Sdn.Bhd. and Yee Lee Marketing Sdn.Bhd. In 1993, YLC was listed on the KLSE.
In order to increase the demand of utilizing palm oil, Malaysia authorities provides subsidies for that domestic usage merely since the cookery oil crisis in January 2008. This state of affairs encourages more Malayan to utilize cooking oil that produced by palm oil. During the deficit clip, authorities negotiates with cooking oil makers to increase their production capacity by utilizing palm oil to bring forth cooking oil. Because of this, it encourages those homemakers who prefer palm oil than others. Therefore, this has created an chance for Yee Lee Corporation Berhad to bring forth cooking oil in low cost. This besides good to YLC Berhad because utilizing palm oil to bring forth cooking oil can cut down the cholesterin in the nutrient while cooking. Hence, their merchandises are the first pick for those who want cook with low fat oil.
Malaysia had gone through two recessions and two crisp lags since 1970s. Each had its ain causes and features. The first downswing was in 1975 triggered by the 1973-74 ‘s oil daze, followed by the 1985 recession, which was dragged down by a crisp lag in planetary growing. The 3rd was a steep recession in 1998 which caused by the Asiatic currency crisis, followed by the downswing in 2001, which was hit by the bursting of the dotcom bubble and terrorist onslaught on the US. The GDP besides dropped about 45 % since the crisis. So, in order to promote more people to utilize palm oil cookery oil, authorities launched a run “ Palm Oil Reduces Cholesterol ” to promote people to utilize more cooking oil that made by palm oil. Besides, authorities besides provides the subsidies for those low income households who are utilizing this cooking oil. By making this run, people can larn about the importance of the GDP growing and besides the economic system will be recovered as a whole.
Malaya is considered one of the most developed among the developing state. There are many exported goods originated from Malaysia, particularly palm oil. Palm oil is one of the universe ‘s most popular veggie oils. In Malaysia, about 80 % palm oil is exported to other state. Recently, there are some issues about the oil industry which resources are limited. Due to the limited oil, local authorities encourages Malayan purchase the cookery oil which is made by palm oil. Therefore, YLC produces the cookery oil by implementing the construct of palm oil-made cookery oil. Besides that, bring forthing cooking oil with thenar oil are more cheaper than those are non utilizing palm oil. So, YLC besides uses this chance to aim those homemakers who want to purchase cheaper cookery oil.
Due to the betterment of engineering, oil industry in Malaysia has used the most and efficiency machinery to bring forth cooking oil. Therefore, YLC has introduced AUM cooking oil machinery which is suited to pull out and bring forth cooking oil. Besides that, one of the YLC subordinates merchandises which are baseball mitts, are produced with multiple utilizations together with the state-of-the-art engineering and rigorous in-house quality confidence processs. By utilizing this new engineering, the baseball mitts that are produced are non-sterile, two-handed, and disposable.
Porters 5 Forces
The competition between bing Sellerss in the market
In today ‘s industry, many companies have increased their sizes in order to competitively suit. When they are viing among each other in term of sizes, they are still viing in term of their trade names image, merchandise quality, pricing or market portion. This would ensue in a high competition and menaces Lee Yee Corporation Bhd. Since LYC ‘s rivals like Lam Soon Group and PPB Group have a well-established trade name names, so YLC has to supply good services and good pricing scheme in order to cut down the competition and menace every bit good as increase their market portion in Malaysia.
The power exerted by the clients in the market
The shift cost for Yee Lee is low because their merchandise ‘s monetary value does n’t hold large differences compared with their rivals. Cooking oil is concern about how good quality it has and how utile it is. Therefore, Yee Lee has to make more R & A ; D and set some new natural stuff in order to increase the use.
The impact of the providers on the Sellerss
The power of providers has influences in all the industries. It besides can impact the cost of bring forthing a merchandise for peculiar house. Lam Soon and PPB has ain providers so they can command the cost and acquire a good monetary value to purchase the natural stuffs. So Yee Lee has to set up its ain providers in order to take down the cost of production. Buying natural stuff from other providers is hard to acquire lower monetary values because they are selling based on market monetary value and the monetary values besides affected by the demand-supply clients.
The possible menace of new Sellerss come ining the market
The grade of barriers entry is of import to a house in a market portion. It can curtail other house to come into this market. In order to keep a market portion, Yee Lee, Lam Soon and PPB has established a good know trade name name. This brands besides recognized by all the people in Malaysia. Besides that, they besides have a good relationship with their providers and the most of import is their merchandise distinction. So this is really hard for a new house to come into this market
The menace of replacement merchandises going available in the market
The menace of replacement merchandises is one of the concerns for all the industry. It can assist to maintain a merchandise in long clip in a market. If the degree menace of utility merchandise is high, means the merchandises easy to replace by others merchandise. Like presents, many cookery oil industries are utilizing palm oil to bring forth cooking oil. Palm oil is easy to acquire and it has many use for us. Not merely palm oil, some house besides use maize to bring forth cooking oil. All of this stuffs are healthy to people. So the menace of utility merchandise in this industry is low.
Strategic Group Map
Lam Soon Group
Lam Soon Goup is a group of companies which operates in plantations, detergent and soap fabrication, selling and distributing branded consumer merchandise. It was incorporated in August 1950 by Ng Keng Soon. In 1995, his boies Whang pitch Choung and Whang Tar Liang took over the direction after his decease. Its operations non merely in Singapore and besides in overseas like Malaysia, Vietnam, Thailand and Hong Kong. However, its chief operation is in Singapore which operates in fabrication of cooking oil and wash soap. Lam Soon ‘s cookery oil has approximately 40 % to 45 % market portion in Malaysia. It besides has its ain mill in Malaysia which produces cookery oil and soap. The strengths possessed by Lam Soon are it has a good design and strong value on its trade name like ‘Knife ‘ was awarded as the best trade names in consumer cookery oil in 2010. Besides that, ‘Bio Home ‘ , one of the Lam Soon ‘s trade name, was awarded as a good design in family attention class ‘s trade name.
PPB Group Berhad
PPB Group Berhad starts its nucleus concern with the initial concern of sugar cane cultivation and refinement in 1968. It besides includes in fabricating comestible oil, selling and administering consumer packaged goods, every bit good as be a dominant participant in the grains trading, flour and animate being provender milling processing. PPB Group has its operations in China, Vietnam, Indonesia, Myanmar, Thailand and Singapore. The strengths of PPB Group Berhad are it has well-established trade name names like ‘Neptune ‘ for cooking oil and ‘Seri Murni ‘ nutrient processing every bit good as a stable market for nutrient industry in Malaysia. It besides becomes a leader in sugar refinery, flour milling and movie exhibition. However, the failings of PPB Group Berhad are the net incomes are affected by the monetary values of CPO, natural sugar and wheat. Since the sugar and flour are controlled points in Malaysia, it is really hard for PPB Group Berhad to prolong the increasing of cost in those controlled points. This will has some impacts during the economic system downswing.
Based on the strategic group map, we can cognize that Lam Soon has a high market portion in the industry because it has highest degree of trade name consciousness among these three trade names. So, the monetary values for Lam Soon ‘s cookery oil are besides really high. For PPB, it has moderate trade name consciousness compared with Lam Soon and Yee Lee. Therefore, the monetary values of PPB ‘s cookery oil are cheaper than Lam Soon. However, Yee Lee has lowest trade name consciousness in the industry so the monetary values for its cookery oil are lower than Lam Soon and PPB.
Recommendations and decision
The one of Key Success Factors ( KSFs ) of Yee Lee are its merchandise ‘s quality. Yee Lee manufactures cooking oil with good quality and it was awarded Certificate Excellent by International trade and Minister Industry. For illustration, Red bird of Jove was voted as a Trusted Brand Gold by the readers of Reader ‘s digest because it is more stable compared to others trade name and is able to defy high heat when after the nutrient is heated and it can be remained safe and healthy when ingestion. Red bird of Jove is considered as healthy cookery oil which is cholesterol-free and of course rich in Vitamin E.
Another factor that Yee Lee can successful in its concern is its pricing scheme. Many homemakers like to purchase Yee Lee ‘s cookery oil is because the monetary value is cheaper than others trade names and clients can hold similar maps by utilizing their cookery oil.
Besides that, Yee Lee has a good advertisement in its ain merchandise. For illustration, Lee Yee has its ain selling and administering channel in its concern. By holding ain selling and distributing channel, Yee Lee can salvage a batch of cost in term of happening publicizing company or engaging salesman to advance its merchandises.
Furthermore, the invention of engineering brings a batch of benefits for Yee Lee ‘s company. This engineering helps the company to bring forth its merchandise in efficiency and efficaciously manner and at the same clip it can assist in cost decrease. By holding these benefits, Yee Lee can vie with its rivals in the concern.