STRATEGIC PLANNING OF ROBINSON GROUP

QUESTION

Introduction of company
Vision, Mission and Values
Situational Analysis
3.1 Pestle analysis
3.2 Porter’s model of competition
3.3 SWOT Analysis
3.4 BCG matrix
Robinsons Group Strategy
Evaluation
Recommendation
Conclusion
Reference

company i choose is Robinson group from singapore

SOLUTION

A Study of the Robinsons Group, Singapore

1. 1.     Introduction

Robinsons Group is a retail company having operations in Singapore and Malaysia. The Robinsons Group manages five retail entities under the following brands: Robinsons, John Little, Marks & Spencer, Coast and River Island (Robinsons Company Website). Robinson & Co was founded in 1858 in Singapore by Philip Robinson. The company was initially started by John Spicer and Philip Robinson under the name of Spicer and Robinson and eventually became Robinson & Co (Robinsons Company Facebook Profile). In 2006, the Lippo Group consortium acquired 29.9% of Robinson and Company limited for €100M (BNP Paribas). Robinsons expanded to Malaysia in 2007 (Company Facebook Profile).

Presently, the Robinsons Group is a part of the Al-Futtaim Group, which owns a diverse range of companies in the Gulf region. Companies under the Al-Futtaim Group range from automotive to retailing to insurance.  Under the aegis of Al-Futtaim Group, Marks & Spencer stores have been opened in Dubai, Kuwait, Bahrain and Qatar (Al-Futtaim Company Website).

1. 2.     Vision, Mission & Values

The Robinsons Group’s mission statement is “offering quality, value and service”.

The Group vision is “to be a uniquely inspirational 21^st century retail organization in the regions it chooses to operate”.

Some of the values that the Group believes in are trust, integrity and proactive.

1. 3.     Situational Analysis

3.1.PESTLE

The primary market in which the Robinsons Group operates in is Singapore. The PESTLE analysis has hence been done keeping in mind Singapore as the primary environment.

Political and Legal: Singapore is a politically stable country. Singapore Government keeps unhealthy competition under control through laws like Commercial law, Company law, Labor law, Tax law and Environment law. The Government has been very careful with foreign players operating in Singapore; there are only 2 Carrefour and 4 Malaysian retail chain outlets. Moreover, to combat the pressure of cheap goods available from China markets due to globalization, the Government has taken initiatives (like controlling electricity costs) to reduce cost of operating business here (Hoon, 2009).All in all Singapore is an enterprise friendly country. Thus, the political environment is very suitable for Robinsons.

Economic: The Singapore Economy is an example of ideal free market economy. It has the highest per-capita income in the ASEAN region. Corruption free business environment and a high quality workforce contribute to Singapore being one of the best economies to operate a business in. Retail Sales has been showing a steady increase over the years. Fig. 1 shows the retail sales index with 2010 as base. The growth in retail sales has not grown much over the years though. And the arrival of specialty stores and newer concepts like hypermarket has resulted in losing prominence of department stores like Robinsons (PWC).

Fig. 1: Retail Sales Index with 2010 as base (Source: Business Statistics: Department of Statistics, Singapore, Feb 2012)

Socio-Cultural:Singaporeans are very hard-working individuals with traditional family values. Primary education is compulsory; parents not enrolling their children in schools are considered a criminal offence. The younger generation has started adopting western culture, hence the boost in the retail sales. The good education system of Singapore is responsible for the high-quality workforce present in the country. For Robinsons, who has been a part of Singapore for more than 150 years, the socio-cultural context presents very little challenge. Moreover, the fact that Singapore has one of the highest living standards in Asia is good news for any high-end retail chain. Singaporeans are very brand-conscious; and shopping and dining are generally considered two favorite pastimes of Singaporeans (PWC).

Technological:Singapore is technologically advanced and gives a lot of importance to R&D. The country is a leader in technological advancement in the ASEAN region. With a well-qualified workforce, the country is all set for innovations and inventions. This can be a good thing for Robinsons as it can leverage upon the technological advancements for its own operational efficiency. R&D will also be helpful in researching fabrics and food products.With the number of internet users on rise, e-business is a great option for the retail chains.

3.2.Porter’s model of competition

Threat of Potential New Entrants: FDI has been increasing over the years with the Singapore Government very encouraging about FDI. This has been attracting various foreign retail chain giants to come to Singapore. Carrefour is already present in the Singaporean market, although it caters to the grocery requirements of the public. TESCO is planning to move to the country soon; so are other brands. This will increase the level of competition for Robinsons.

Threat of Substitute Products/ Services: Specialty stores and Hypermarkets have resulted in decreasing prominence of supermarket stores like Robinsons. Moreover, the creation of budget airlines offering affordable access to cheap shopping destinations like Thailand and HongKong, have resulted in many Singaporeans doing foreign trips for shopping.

Bargaining Power of Supplier: The suppliers to the retail industry are becoming increasingly competitive, with some of them going forward to start their own distribution channel.

Bargaining Power of Buyers: Although having one of the highest per capita incomes in the world, Singapore also faces large household indebtedness.The Singaporean buyer is brand conscious, at the same time they are price-sensitive too. With the increase in the number of supermarkets, hypermarkets and specialty stores, there is increasing pressure to decrease the margin to attract more buyers. Moreover, Singapore consumers are very attracted by promotions and sales. To attract the consumers through sales and promotion also cuts into the retailer’s margins.

Rivalry among Current Competitors: The key competitor of Robinsons Group in Singapore is Takashimaya. It’s one store had revenues of $253M in 2003 compared with $197M of Robinsons’ 17 stores. Other major players are Metro, Isetan, Tangs and Seiyu.

3.3.BCG

The BCG matrix for Robinsons Group (Fig. 2) has been prepared with only qualitative data as guide, as very little quantitative data is available for analysis.

Fig.2. BCG Matrix for Robinsons Group

Robinsons, Marks & Spencer and John Little are popular brands under Robinsons Group. Robinsons is a well-known name among the households in Singapore. Marks & Spencer carries the usual charm of its parent brand in UK, and hence is popular among the younger generation. John Little has also been in Singapore for a long time for it to become a loved family store. These are the best performers, with large customer base. However, the retail market is a slow-growing market (refer Fig. 1). Hence these have been placed under ‘Cash Cows’.The newer brands like River Island and Coast are yet to generate big buzz in Singapore markets. River Island is popular among the high society and it will eventually generate good turnover.The position of Coast is unclear; hence, the category is Question marks.

3.4.SWOT analysis

Strengths:

• A loved house-hold name since 150 years.
• Brands are well recognized.
• Newer brands like River Island to cater to the high-end customer needs, with the luxury- market growing (Calderon, 2011).
• Good promotional schemes and customer loyalty schemes in place.

Weakness:

• High Operating Costs: High rental costs and labor costs accompanied by labor shortage is causing very high operating costs for Robinsons.
• Till now Robinsons is not into e-business.

Opportunities:

• Retail Academy: The Retail Academy of Singapore, established by the State, is catering to the need for  retail executives (retailacademy company website)
• Late night shopping spree: Singaporeans love to shop at night; this can be a big opportunity for the supermarkets like Robinsons (PWC).

Threats:

• Labor Shortages: Retail industry has one of the highest attrition levels. Educated job seekers generally avoid retail jobs (PWC). There is a lack of experienced and trained retail executives.
• Indebtedness of Singaporean Customers: Singapore households have large debts; with the number of personal bankruptcies increasing over the year (PWC).
• Competition: As more and more retail chains open in the country, with newer concepts like hypermarkets gaining prominence, the market share of supermarkets like Robinsons is bound to dwindle if they don’t take up proactive marketing.

1. 4.     Group Strategy

The Robinsons Group’s strategy has been along the lines of their Vision and Mission statements. Their strategies have kept in view that quality and value are not compromised. Some of the key strategies of the Group have been:

• Domestic Expansion: The Group has focused on domestic expansion rather than international expansion. It has increased the number of stores in Singapore, and acquired brands like Marks & Spencer, River Island and Coast over the years.
• Service Quality Improvement: Robinson & Co has always given importance to the quality of service. It has won various awards in Service Excellency. They take special care in appointment and training of the staff (Robinsons Company Website).
• People Development: To provide quality service, Robinsons has high focus on People Development. They conduct training sessions called FISH! And POSH! To train the staff and recognize and continuously encourage desired service behaviors in the stores (Robinsons Company Website).
• Customer Loyalty Programs: Robinsons have come up with excellent customer loyalty programs. Robinsons is very famous for its sales and promotional activities; and has continued to conduct two sales annually.
• Social Media Promotion: Robinsons Group has been very active in social media platforms like Facebook and twitter; and has been generating positive buzz through active promotion in these websites.

1. 5.     Evaluation

Robinsons Group is a healthy company which is moving in tandem with the retail-sector trends and consumer sentiments. It has made wise decisions by moving into the luxury retail segment, which is growing due to good economic conditions. Although, now under the Al-Futtaim Group, The Robinsons & Co have a unique reputation in Singapore because of their continued focus on providing value and quality service. The brands like Robinsons, Marks & Spencer and John Little are performing well, although there is danger from new entrants and new concepts like hypermarkets and specialty stores. In the future, River Island and Coast may generate good revenues for the Group. The company is yet to enter into e-business. With the increasing number of internet users and creation of many e-business websites, e-business is a promising arena to enter into. All in all, the company’s evaluation comes out good, with certain weak areas like international expansion and e-business and low operational efficiency.

1. 6.     Recommendations

• Enter into e-business: E-business is a promising opportunity. The steadily growing number of internet users is an indicator of the scope of e-business. Robinsons should enter into e-business to limit the competition from hypermarkets and specialty stores. If not on own, it should enter into collaboration with e-business portals.
• Attracting the Metrosexual Customers: Robinsons needs to improve its male-category products and marketing techniques to attract the increasing metrosexual population.
• Late-night Opening of Stores: As shown by statistics, 54% of Singaporeans stay awake till midnight (PWC).  Mustafa Centre which offers 24 hours shopping since 2003 has been a success in Singapore. New malls are coming up with 24 hour shopping systems. Robinsons should take up the opportunity by at least keeping the shops open till midnight.
• International Expansion: Robinsons should consider expanding into the nearby countries of Thailand and HongKong. This will not only increase the customer base, but also give it learning experience for further expansion in ASEAN countries.
• Using Technology to improve Operational Efficiency: Robinsons should make more use of technology to increase its operational efficiency. As the operating costs are already high due to high retail and labor costs, Robinsons can increase its profits by improving its operational efficiency.

1. 7.     Conclusion

The Robinsons Group of Singapore is a healthy company, operating on the values of ‘no compromise in quality of customer service’. Although the new entrants into the markets pose a threat to the company’s business, its 150- year old association with Singapore gives it an edge. The good promotions in social media websites are creating a good buzz about the company. Although the brands Robinsons, Marks & Spencer and John Little are good performers, the performance of River Island and Coast is yet to be seen.

References:

Al-Futtaim Company Website, http://www.al-futtaim.ae

BNP Paribas, 2006, ‘Corporate Finance – Lippo Group consortium acquires 29.90% of Robinson and Company, limited for €100m’, http://www.bnpparibas.com.sg/en/corporate_institutional_services/news.asp?Code=NAID-6R6HYJ

Calderon, L. 2011, ‘Singapore’s strong economic growth to drive up luxury retail’, channelnewsasia, Accessed on 29 April 2012, Available at http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1141814/1/.html

Hoon, L.Y. 2009, ‘Assignment-PEST Singapore Business Environment’, Available at http://www.scribd.com/doc/21331604/PEST-Singapore

PWC, 2006, ‘From Beijing to Budapest Winning Brands Winning Formats’, PriceWaterHouseCoopers, 4^th Edition, Accessed on 29 April 2012, Available athttp://www.pwc.com/en_GX/gx/retail-consumer/pdf/singapore.pdf

RetailAcademy Company Website, http://www.retailacademy.com.sg/

Robinsons Company Website, http://www.robinsons.com.sg/index.php#

Robinsons Company Facebook Profile, http://www.facebook.com/RobinsonsSingapore

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