2.

0  SWOT ANALYSIS  

SWOT stands for Strengths, Weaknesses, Opportunities and Threats. SWOT analysis is a
technique for identifying these four aspects of an organization as its current position
before the managers making any decision and strategy. Strengths and Weaknesses are the
internal factors that can affect the organization while Opportunities and Threats are the
external factors.

2.1 SWOT ANALYSIS TABLE FOR BOTH COMPANIES.

TABLE 1: SWOT ANALYSIS FOR SASBADI HOLDING BHD

STRENGTHS WEAKNESSES
1) Market leader in its market 1)  Focused only in domestic market 
segment 2) weak competitiveness of price
2) Has economies of scale 3) many substitute products
3) Experienced management 4) risk of return book
4) Has a clear goal that follow current
wants.
5) experienced writers

OPPORTUNITIES THREATS
1)  Many Mergers and acquisitions 1) Many small private players in this
(M&A) opportunities market
2) Direct selling has huge potential 2) Low barrier of entry in this market
3) Combining education and 3) Change in the government
technology (follow the trend of 21st education system
century) 4) Caused illegal activities
4) cooperate with government (get (photocopy)
contract) 5) Market shares has matured
5) enrolment rate increase (increase 6) number of buyers
the dd)
 TABLE 2: SWOT ANALYSIS FOR PELANGI PUBLISHING GROUP

STRENGTHS WEAKNESSES
1) Strong competitiveness of price 1) liabilities ratio increase
2) Economic of scale 2) high operating cost (rent
3) High local responsiveness increases the p)
4) Liquidity and Financial Resources 3) many substitute products
5) Brand recognition 4)  the risk of return book
6) international business

OPPORTUNITIES THREATS
1) Education rate increase (increase 1)  foreign exchange rate
in dd, exp thailand and malaysia) 2) change in government
2) cooperate with government education system
3) regional expansion...develop in 3) competition from local
ASEAN publisher 
4) international market (large market) 4) fluctuations in the price of
5) Huge coverage in country (2000 paper
over 13 states)  5) Government policy (tax
system increase price like gst and
sst)
6) Number of buyers

2.2 STRENGTHS FOR BOTH COMPANIES

Strengths are the internal factors that can help in develop and bring advantages
to the individual, firm or industry. The strengths of a company are the resources and
capabilities that can be used as a foundation for developing competitive advantages.

2.2.1 STRENGTHS OF SASBADI HOLDING BERHAD

a) Market leader in its segment. The large market shares for the company
has contributed the high demand for SASBADI’s books. According to the
2019 annual report of both companies, the revenue in 2019 of SASBADI
(Rm 87 727 000) higher than (6.48%) the revenue of PELANGI (Rm82 389
000). Although SASBADI revenue just higher (1.06%) than PEANGI, but
the revenue of PELANGI included many countries sales, for Malaysia local
sales just Rm57 487 000 (52.60% lower). This data shows that the SASBADI
is the leader in Malaysia publishing market.

b) Economics of scale. SASBADI enjoy the benefit of economic of scale

by using advanced technology help to increase the productivity and quality of
the products, minimize the risk of damage the product. Mass production and
purchase inputs in a large amount such as paper at low price can reduce the
cost production as well. The economic of scale help SASBADI achieve
competitive advantage and survive in the market.

c) Experienced management. The board of director of SASBADI are

experienced. An experienced management group can lead the company
achieve goals. They are responsible to making the decision and establishing
the strategy and goals that affect the entire organization. For the example, the
independent Non- Executive Chairman (Dato’ Salleh Bin Mohd Husein) used
to a teacher who experienced in education. In 1992, he was promoted to the
Perak State Education Department as Principal Assistant Director in charge
of administration and state education financing.

d) Has a clear goal that follow current wants. SASBADI has a very clear
mission and goals to achieve. They know the current wants in the market.
The current goals they build always followed the 21st century trend which is
focus on the STEM education. They come out with nice strategies to achieve
it like cooperating with third parties. For the example, SASBADI cooperate
with Huawei Cloud to develop the intelligent education solution,
empowering teachers and student to digitalise and transform in the domain of
Artificial Intelligence (AI). This strategy will help SASBADI increase the
demand for their products in the future and make their brand more popular.
(http://www.insage.com.my/Upload/MediaNews/SASBADI/SASBADI-Huawei-
30062020.pdf)

e) Experienced writer. SASBADI only work with the experienced writer

like teachers and experienced writers to ensure the company always supply
quality education materials and always keep the content updated with current
 education systems. A quality content will attract readers because the readers
trust the content in books. This will immediately increase the demands for
SASBADI books and maintain the demand for their product.

2.2.2 STRENGTHS OF PELANGI PUBLISHING GROUP BHD.

a) Strong competitiveness of price in market. The price of the PELANGI

product always lower than the rivals. A lower price in market will make
PELANGI products more competitive and relative more cheaper and help to
increase the demand for the products as well. Consumers will always try to
obtain products at the lowest price. For example, according ot website of
both companies, the price of STPM Ekonomi Penggal 2 for PELANGI cost
Rm30.95 and SASBADI cost Rm34.90. (http://sasbadisb.com/book/detail/teks-pra-u-
stpm-penggal-2-2017/ekonomi-penggal-2)
(https://store.pelangibooks.com/index.php?route=product/product&product_id=333&search=STPM&d
escription=true&page=2)

b Economic of scale. The benefit of economic of scale also enjoys by

PELANGI as involved in mass production. PELANGI is the first company to
use computerised desktop publishing system in Malaysia and Singapore. The
use of advanced technology and machine help the company maximize the
productivity and utilize of resource as well. This will immediately help the
company reduce the cost of production and reduce the price of product in the
markets that can in increase the competitiveness of their products. Economic
of scale also help PELANGI survive in market cause the entrant can fight
with them in the market.

c) High local responsiveness. PELANGI has many subsidiaries in many

countries such as Indonesia, Thailand, Singapore, United Kingdom and
China. The advantage of this is maximizing the competitive response for the
local market. A better know of the local market is important for PELANGI in
order to keep the contents updated to the education system of the country and
match the response to the market.

d) Operational excellence.

e) Liquidity and financial resources

 2.2.3 COMPARISON BASED ON STRENGTH

i) PPG and SSB achieved economic of scale by minimizing their cost per
unit. Among these two company, PPG has enjoyed greater economic of scale
since PPG is a multinational company. PPG has a greater number of
customers, using more efficient workers, and more, resulting in more lower
cost per unit than SASBADI.

ii) PPG and SASBADI products are substitutes, an increase in the price of
one will increase the demand of other. Conversely, a decrease in the price of
one will decrease the demand of other. PPG products have lower price than
SASBADI products. Consequently, the demand for PPG products will more
than SASBADI products due to the self-interest of consumers and law of
demand.

iii) SASBADI is the market leader in local market. This mean SASBADI
has a greater market share. A greater market share results in a greater number
of buyers in the local market compare to PPG. Besides, a larger market share
always comes with more opportunities.

2.3 WEAKNESSES OF BOTH COMPANIES.

Weaknesses are the internal negative factors that detract the ability of an individual
or organization to compete with rivals. These are the factors that organization should
pay more attention and effort to overcome in order to achieve competitive advantage
and survive in market.

2.3.1 WEAKNESSES OF SASBADI HOLDING BERHAD.

a) Focussed only in the domestic market. SASBADI didn’t involves in

the global arena. The company only focus in the domestic market so far. The
size of the local market (population of Malaysia is 31.53million) is limited and
lacks of opportunity to develop compares to the international market. Beside,
the domestic market one day will become saturated. The freedom of the
market and disruptive innovation in technology provide many opportunities for
small, upstart companies to take a long standing and well-established
businesses. Market competition will become increasingly fierce.
 b) Weak competitiveness of price. The price of the SASBADI products
higher than the rivals in the market. Consumers will always try to obtain
products at the lowest price. This causing SASBADI loss competitiveness in
term of price and brings substitution effect which mean the products of
SASBADI relative more expensive. For example, according to website of both
companies, the price of STPM Ekonomi Penggal 2 for PELANGI cost
Rm30.95 meanwhile SASBADI cost Rm34.90. (http://sasbadisb.com/book/detail/teks-
pra-u-stpm-penggal-2-2017/ekonomi-penggal-2) (https://store.pelangibooks.com/index.php?
route=product/product&product_id=333&search=STPM&description=true&page=2)

c) Availability of substitute. There are many substitute products in the

market for SASBADI’s product. This will make the price of SASBADI’s
product inelasticity. Consumers can easily find substitute products in the
market. A little price increase will reduce many quantities demanded. For the
example, in the market the same book like STPM economy also produced by
others publisher like PELNGI, OXFORD, NUSAMAS.

d) SASBADI subjects to risk of books being returned due to changes in

Malaysia’s education policy. The returned book will negatively affect the
revenues and increase the costs of SASBADI. The change in the school
curriculum will make the content of the education materials unsuitable.
SASBADI force to take down the related education materials in the market
and make change to fit the new curriculum. For example, the changed in
teaching language from Malay to English of Science and Mathematics in 2003
caused SASBADI had to adjust to the changes by producing educational
materials in English instead of Malay Language. The previous batches of
reference books that use Malay Language as medium of in struction were no
longer in demand.

2.3.2 THE WEAKNESS OF PELANGI PUBLISHING GROUP.

a) Liabilities ratio increase.

b) High operating cost. PELANGI has over 2000 book shops in 13 states
which mean the operating cost is high. PELANGI has to pay the rent and
 utility bills monthly. This will increase their cost and reduce the net revenue of
PELANGI. q

c) Many substitute products in the market. There are many substitute

products in the market for PELANGI’s product. This will make the price of
PELANGI’s product inelasticity. Consumers can easily find substitute
products in the market. A little price increase will reduce many quantities
demanded. For the example, in the market the same book like STPM economy
also produced by other publisher like SASBADI, OXFORD, NUSAMAS.

d) Change in consumer tastes. A change in consumer tastes will directly

affect the demand of the product. Unfavorable change in consumers
preferences will decrease the demand. For example, the change in teaching
language from Malay to English of Science and Mathematics in 2003 caused
the Malay version books no longer demanded by consumers in the market.

2.3.3 COMPARISON BASED ON WEAKNESS

i) SASBADI only focuses on the local market, and PPG has entered the
international market. The international market usually has a larger size
market, and greater number of buyers compared to the local market. Besides,
the local market becomes matured over time.

ii) PPG has over 2000 book shops located in 13 states of Malaysia. This
means PPG has higher cost compare to SASBADI which focus on indirect
sales. In short terms, the fix cost of PPG is higher than SASBADI.

iii) PPG and SASBADI products are substitutes, an increase in the price
of one will increase the demand of other. Conversely, a decrease in the price
of one will decrease the demand of other. SASBADI products have higher
price than PPG products. Consequently, the demand for SASBADI products
will less than SASBADI products due to the self-interest of consumers and
law of demand.