FACULTY OF BUSINESS AND MANAGEMENT

UNIVERSITI TEKNOLOGI MARA

BACHELOR OF BUSINESS ADMINISTRATION IN INTERNATIONAL BUSINESS

(BA 246)

STRATEGIC MANAGEMENT
(MGT 657)

ASSIGNMENT:
CASE STUDY NAZA (DEC 2018)

PREPARED BY:

NAME NUMBER MATRIC GROUP

NURULHUSNA BINTI MOHAMAD ADNAN 2019564439 BA2465D
NURUL LIYANA FARHANAH BINTI AZHARI 2018262052 BA2465D

PREPARED FOR:
NOORAIN BINTI MOHD NORDIN

SUBMISSION DATE:
15 NOVEMBER 2020
CASE STUDY: CHARTING NAZA’S DIRECTON

Question 1

Describe four (4) strength of the Naza Group.

For the strength of the Naza Group is first Naza Group have is the best professional
management. The brothers’ focus then was to instil professionalism into the Naza Group by
putting a framework of corporate governance and professional CEOs with Performance-
Based Key Performance Index (KPI) to achieve in place at the key business divisions of the
group. This measure is to permit for a correct organisational structure, diligence, and
auditors.

Second strength the employee, Naza Group have 3000 staff and staying efficient is
one of its main priorities by keeping its number of employees low and improves productivity.
Naza Group’s automotive business remains the main focus of the group, which accounts for
60% of group revenues.

Next, strength Naza Group is a resource when Naza being appointed by South
Korea’s Kia Motors Corp as the franchise holder for the brand Kia in Malaysia. In 2001 Naza
became the assembler for completely-knocked-down packs for Kia and in 2003 Naza
Automotive Manufacturing Sdn Bhd (NAM) was established a workforce close to 450 and
annual production capacity of 50,000 cars, has built 200,000 cars as of October 2017.

The last strength is competitive advantages when Naza Group is doing the
collaboration with Groupe PSA. A share sale and joint-venture agreements with Naza Corp
Holdings Sdn Bhd was signed in early 2018 to acquire 56% stake in Naza’s NAM assembly
plant in Gurun, Kedah.
Question 2

a) Describe vision statement.

A vision statement is a business’s path guide, suggesting what the company wants to
become in the futures. It outlines the charge of the company in the next 5 to 10 years. As for
Naza Group their vision is to be a successful and leading in automotive dealer in Malaysia.

b) Summarize the facts and information in the case into a vision statement for
Naza Group.

The Naza Group vision is to be successful and in order to be successful they need to
provide quality business and Naza Group is putting a framework of corporate administration
and professional CEOs with performance-based Key Performance Index (KPI) to instil
professionalism. Besides, this measure is to take into account for a proper organisational
structure, diligence and auditors.

As well, the brothers also had to chart a new future for the Naza group to guarantee
the longevity of the business by streamlining only its potential business into Tier-1 or Tier-2.
Besides that, Naza group has approximately 3000 staff and staying efficient is one of its
main priorities by keeping its number of employees low and improves productivity and Naza
Group’s automotive business remains the main focus of the group, which accounts for 60%
of group revenue.

Next, the vision of Naza Group of leading in automotive in Malaysia is when Naza’s
success to be ranked in the top-three among Kia distributors in ASEAN and following
another successful 10-year franchise collaboration since 2008 between Nasim Sdn Bhd of
the Naza Group and France’s Groupe PSA.

The share and joint-venture agreement with Naza Corp Holdings Sdn Bhd make
Malaysia as Groupe PSA’s manufacturing hub for ASEAN. The deal also saw the Naza
group as the sole distributors of Peugeot, Citroen, and DS Automobiles in domestic market
and potentially ASEAN.
Question 3

Describe three (3) external factors that contributed towards Naza Group’s success.

Firstly, the political government and legal forces is the external factors. The
increasing global interdependence among economies, markets, governments, and
organizations makes it imperative that firms consider the possible impact of political
variables on the formulation and implementation of competitive strategies. In relation,
Malaysia have their own import-export regulations that firms must followed. For example, to
assist bumiputera car traders, Malaysian government gave approved permits (AP-which
allow for the importation of cars) to make them become bigger businesses and partner
foreign car manufacturers. This force contributed towards Naza Group’s success when the
late father of three brothers, Tan Sri SM Nasimuddin succeeded in applying and receiving
his own APs to import used luxury cars. From this achievement, his company then went on
to invest heavily in showrooms and later built an automotive assembly plant.

Other than that, economic forces are another external factor that have a direct impact
on the potential attractiveness of various strategies. A few important economic variables that
often represent opportunities and threats for organizations are shift to service economy,
price fluctuations, income differences by region and consumer group, availability of credit,
import and export factors and many more. This can relate with Naza Group’s success when
their doing import of used Japanese cars in 1975 and in 1996 Naza has being appointed by
South Korea’s Kia Motors Corp as the franchise holder for the brand Kia in Malaysia. In
2001, Naza became the assembler for completely-knocked-down packs for Kia. Naza Group
success also can be seen when it is ranked in the top-three among Kia distributors in
ASEAN.

Lastly, other external factors are competitive forces. These forces have important
part of an external audit when must to identifying rival firms and determining their strengths.
weaknesses, capabilities, opportunities, threats, objectives, and strategies. By these forces it
contributed towards Naza Group’s success when they make collaboration with Group PSA to
further strengthened by share sale and make joint-venture agreements for acquire 56%
stake in Naza Group assembly plant in Gurun, Kedah. This will give benefit to Naza’s plant
as it would improve the utilisation rate and bring down cost. This deal also make Naza Group
as the sole distributor of Peugeot, Citroen, and DS Automobiles in domestic market and
potentially ASEAN.

Question 4

Explain three (3) strategies implemented by the Naza Group.

Forward integration is one strategy that involves gaining ownership and increased
control over distributors and retailer. This can be look when an organization has both capital
and human resources to manage distributing their own products. These strategies also
implement when the availability of quality distributors is so limited as to offer a competitive
advantage. Naza Group implemented these strategies when the three brothers’ children of
late Nasimuddin focus instil professionalism into Naza Group by putting a framework of
corporate governance and professional CEOs with performance-based Key Performance
Index (KPI) to achieve in place at the key business divisions of the group. This measure is to
allow for a proper organisational structure, diligence, and auditors. The brothers also makes
drive strategy while leaving operations to management and the board of directors of the
individual divisions within the group. Naza Group has about 3,000 staff only for stay efficient
because is one of main priorities by keeping its number of employees low and improves
productivity.

Next, backward integration that is strategy of seeking ownership or increased control

of a firm’s suppliers. By this strategy, an organization’s present suppliers are especially
expensive or unreliable. Its also when an organization needs to quickly acquire a needed
resource. Based on this strategy, Naza Group implemented through late Nasimuddin when
he went to invest heavily in showrooms and built an automotive assembly plant. In relation,
Naza Group has been appointed by South Korea’s Motors Corp as the franchise holder for
the brand Kia in Malaysia. Naza Group has made collaboration with Group PSA for further
strengthened when share sale and joint venture agreements to acquire 56% stake in Naza’s
NAM assembly plant in Gurun, Kedah. This give benefit to Naza’s plant as it would improve
the utilisation rate and bring down cost. By this deal Naza Group has be sole distributor of
Peugeot, Citroen, and Ds Automobiles in domestic market and potentially ASEAN.
 Lastly, unrelated diversification strategy that value chains are so dissimilar that no
competitively valuable cross-business relationship exist. This strategy happen when revenue
derived from an organization’s current products would increase significantly by adding the
new or unrelated products. Naza Group implemented this strategy by establish other core
businesses such as property development via Naza TTDI Sdn Bhd and Naza Engineering &
Construction Sdn Bhd (Naza EC). Naza EC has all the necessary licenses, and offers
complete construction solutions, specialising in civil engineering and infrastructure works.
Naza Group also have Naza Communications Sdn Bhd that be a Network Facilities Provider
and Network Service Provider to provide engineering designs and solutions to top telcos
such as Maxis Bhd, Celcom Axiata Bhd, Digi Telecommunications Sdn Bhd and U-Mobile
Sdn Bhd. Naza Group’s other venture is into the food and agriculture business.