Question:
Discuss about the Theory and Practice for Business Financial management.
Genting Malaysia is a private company that came into force in 1980 but soon was converted into a public company in 1989. The organization of Genting Malaysia and Genting Berhad went through a restructuring phase by getting into a merger (Gentingmalaysia.com, 2016)
Genting Malaysia Berhad is a partnering firm that is mostly involved in leisure as well as partnership business. However, it has been recently collaborating with American film studio to open a theme park, which is set to open up in early 2017. However, there is a need to develop a business plan that needs to be established in accordance with the internal team so that the viability of the new strategy is established in new partnership (Burns, 2014).
Summary of Business Department
Twentieth Century Fox is collaborating with Genting Malaysia Berhad to open a theme park that is film-inspired in the early 2017. Moreover, it ought to bring an overall new experience of entertainment with magic as well as adventure. The theme park adds to the marketing and growth of increasing globalisation. The business department of Genting Malaysia is required to redesign the total allocating operating expenses with the efforts made in different departments to establish the identity of the industry (Mitrasinovic, 2006). Nevertheless, it is important that a business department analyses all the opportunities, relationships and the profitability of the venture. Moreover, there should be proper planning, scheduling and management of directions and operations such as production, finance, human resources and administration (Wheelen & Hunger, 2011). Although, business department of Genting Malaysia Berhad will maintain business network but will also initiate participation from Twentieth Century Fox.
Problem Statement
The problem statement highlights the concept of weaknesses and threats that the company is facing in micro as well as macro environment. The following problems that highlight the growing nature of Genting Malaysia for a theme park in collaboration with 20th century fox are on the issue of marketing and promotion that is not able to capture the local as well as international market based target segmentation. The third issue is the workforce that is not able to meet the business requirement which is turn is hampering the sustainability and the satisfaction of the customers. On the other hand, the threats the company has been facing is the risk from the international environment based on the new infrastructure followed by competition from the international competitors in entertainment and the current economic situation that is incurring more development as well as operational cost on the pricing system (Genting Malaysia, 2015). However, there is a need to devise policies that not only further increase the market share but also helps in implementing those strategies like operational and marketing strategy.
The objectives that have been highlighted in the proposition of the new strategy are the following.
Internal Strategy – SWOT Analysis
|
Strengths Strategic location (Derrick & Soren, 2010) Infrastructure (Marmon, & Shaun Elizabeth, 2009) Strong brand name (Riley & Michael, 2006) |
Weaknesses Promotion (Ramon & Joan, 2011) Marketing (Hoyland, & Robe, 2006) Workforce (Ariely, & Kathleen Vohs, 2009) |
|
Opportunities New venture (Derrick & Soren, 2010) Tourism (Ramon & Joan, 2011) High Revenue |
Threats Financial Risk (Derrick & Soren, 2010) Competitive (Marmon, & Shaun Elizabeth, 2009) Economic (Ramon & Joan, 2011) |
Strength
Strategic Location
The major strength has been strategic location of the company because Malaysia itself has been known for education and one of the prominent locations in Asia region for business. Malaysia has also one of the strong tourism destinations that not only strengthen the encouragement to new venture but also is the best place for 20th century fox to start up a new venture (Burack, & Elmer, 2008). The partner of Genting Malaysia with 20th century fox comes under the high ranked hospitality and leisure corporations. Both the corporations have been listed on Malaysia Bursa with $7.7 market capitalization. However, with incorporation of new venture, the organization has been investing $300 million in 20th century fox supplementary to the casino that has been operational since 35 years based on Resorts World Genting destination (Brzeski, 2013). However, the new venture is a feasible dealing in gaming, as it will highlight the marketing perspective of the organization.
The infrastructure holds strategic importance because on a yearly basis, the organization has been updating its technological spheres as per the requirements that have to be met by the technological interface on the global level. Although, the technology upholds and is referred to as the backbone of Genting Malaysia Berhad infrastructure the information communication also substitutes to provide an essential base. The organization has been known for tourist attraction as well (Lisa & Bolton, 2010). The infrastructure of the company is well accustomed with communications, transports and also in accordance with the accommodation in international standards (Yan, et al., 2013) which means that the research and development management of the organization is an added advantage.
Overall, the company offers five hotels namely Maxims Genting, Highlands Hotel, Theme Park Hotel, Resort Hotel, and First World Hotel. These hotels comprises of more than 8,000 rooms, 50 fun rides, 200 shopping and dining outlets. Out of the five, First World Hotel is the world’s largest hotel accompanying casino, beverage and retail shopping, concert shows and theme parks (Derrick & Soren, 2010; Burack & Elmer, 2008). It has seaside properties that not only provides a strong presence in tourism but also internally upgrades the profit and revenue level of the group.
Strong Brand name
The group holds a strong brand value due to its marketing strategies that strengthens the customer’s perception (Stephen, Robbins Bruce & Millett Terry, 2004). An organization is only known through the brand value it creates and the business strategy that it adopts to maintain the recognition level till a later stage (Kapferer, 2012). The brand name holds to be a reason for any new venture like 20th century fox to stand internationally in a competitive market for the company’s revenue achievement (Ramon & Joan, 2011).
Weaknesses
Promotion
The company has not been an active participant in promotional activities because as depicted in annual report of the company, it has been incurring losses such that the debts have increased from 1618RM million in 2014 to 4624RM million (Lisa & Bolton, 2010; Stephen, Robbins Bruce & Millett Terry, 2004). The business functions on the normal system and does not have any additional promotional system that could benefit the company. Moreover, promotion is an important criterion when it comes to entertainment industry so that more customers as well as the markets are involved (Aaker & Joachimsthaler, 2012). However, this creates a major impact on the income growth of the Genting Malaysia Berhad group and company.
Solution: The Genting Malaysia Berhad should adopt different promotional techniques in marketing like sales promotion, advertisements in social media and digital marketing followed by word of mouth expression. However, opting social media marketing will capture the Generation Y that will not be confined to local but will go global as well because theme parks on gaming is [popular among kids, teenagers and young adults. On the other hand, management should adopt different packaging styles.
Marketing
The marketing of the Genting Malaysia Berhad is weak and has not been able to match up with the growing needs because the company has not developed a proper marketing strategy based on target segmentation and positioning. However, marketing techniques are not affective to the local and international market because according to the annual report 2015, the revenue is termed to be lower and has not increased substantially from 2014. As depicted in 2014, 5185.6RM million to 5345.8Rm million in 2015 as it only accounts to be a change of 3.64% that is considered negligible when there is a need to invest in the new venture with 20th century fox (Genting Malaysia- Annual Report, 2015).
Solution: There is a need for adoption of proper marketing methods that can enhance the company’s globalization strength. The new ventures will enable new technology like electronic and information technology through electronic hoardings, publicity in a mall theatre that will help in advertisement of the theme park with 20th century fox (Lisa & Bolton, 2010; Stephen, Robbins Bruce & Millett Terry, 2004). Even more, new innovative technology like unmanned (remote controlled, remote guided or autonomous) flying objects in the air which is lighter than air machines, amazing concept of art using 3D technology, aerial buttons to create laser ionizing of the molecule to display in air, kinetic lights as well as series of winches of light bulbs that can move up and down such that each light can represent a timing that can be programmed with music (Young, 2015).However, adoption of marketing based on geographical area will spread the idea of theme park to the customers. However, marketing through different partners will attract more customers as well as existing customers in response to the company’s loyal customers. Lastly, the segmentation needs to be identified in the target segmentation so that it does not remain a challenge in the marketing management (Ramon & Joan, 2011).
Workforce
The rate of turnout of workforce in the organization pertaining to human resource management has been more because the company does not give sufficient benefits. As a result, it is considered to be a big issue because event management requires more of manpower (Burack, & Elmer, 2008; Lisa, & Bolton, 2010). Ultimately, the lack of workforce results in uncompetitive business operations.
Solution: The new venture of Genting Malaysia Berhad is in need of skills, experience and technology because the workforce strength is equally important as technology to manage the 20th century fox for venture. However, whether the system will lead to effectiveness or not directly depends on the strength of the workforce (Hoyland & Robe, 2006; Riley & Michael, 2006). Nevertheless, there is effective need to provide proper benefits to sustain the workforce. Moreover, with changes made in the existing structure, there is a need to establish diversity with employment benefits and rewards to maintain sustainability in the organization.
New Venture
Any new venture that uplifts the condition of the organization is considered to be a boon for the organization which not only brings more income or enhance revenue but also attracts the target market of international and domestic customers (Marmon & Shaun Elizabeth, 2009; Stephen, Robbins Bruce & Millett Terry, 2004). In all, the new venture, also affects the changes in the organization in accordance with the needs of the current generation, which makes Genting Malaysia Berhad competitive enough to improve its growth in future. Moreover, the company enters into a new venture to diversify its new business in the four categories namely organizational, economic, strategic and political.
Organizational factor helps in competence and learning building that not only helps in internalization of tacit but also improves performance with legitimation.
Economic factors helps in sharing cost and pooling of resources. There is marginal risk reduction as well as risk diversification and obtaining economies of scale.
Strategic factors helps in competitive shaping by gaining access to new products and technology and following the bandwagon effect through industrial trends.
Political factors helps in market development while overcoming legal and regulatory barriers (Kaats & Opheij, 2013).
Tourism
The tourism in Malaysia is an added advantage to Genting Malaysia Berhad because of the continuous development in business, infrastructure, education and food. That adds volume to the new venture. Overall, Malaysia has become one of the largest countries in Asia ranking in first 5 positions on 2017 on the principle of the global financial crisis (Hoyland & Robe, 2006; Riley & Michael, 2006). It cannot be overlooked that Malaysia is a country with promising potential. However, rigid management system is considered to be better than the changes in demand and supply forces in a developing country for the continuous growth in the government sector as well. Moreover, tourism opens the door to rest of the people because the country is multicultural, multilingual and multi colored country and mainly contain Malayan, Indian and Chinese population (Hoyland & Robe, 2006; Burack & Elmer, 2008). Furthermore, the citizen possesses high economic capability and purchasing power to travel around the world.
Revenue
The new venture can boost the revenue performance of the company as it is more attractive and related to and possess new rides and entertainments for generations. However, to adapt to the new strategy company needs to invest additionally 400 million to replace the old theme park Resort World Genting, Genting Highlands that had been started in 2016. Chairman and CEO Tan Sri Lim Kok rightly said that the supplementing to the total investment, investment of 3 billion has been made on refurbishment programme that includes additional 1300 rooms with First World Hotel (Derrick & Soren, 2010; Lisa & Bolton, 2010). However, international tourism has been increasing and Malaysian government is actively promoting tourism industry such that both the factors combine together to give an excellent opportunity to the organization, Genting Malaysia Berhad (Hall & Page, 2014).
Financial Risk
The company’s financial risk is the huge investments that the company is investing in the new venture. The investment done on infrastructure and changed outlook of the theme park still pose a great threat to the organization as it can be counted in the immediate risk (Ramon & Joan, 2011).
The company maintains a conservative capital structure and a healthy profile with the strong cash flow position that is measured with acquisition growth. However, the funds generated from operations averaged to 64% in the last three years which terms to favorable when compared with peers industry (Hoyland & Robe, 2006; Burack & Elmer, 2008). In contrast with Star Cruises, the Genting Malaysia Berhad is facing issues because the three year averaged debt of Star Cruise is only 32.4% with interest cover amounting to 10%. Moreover, the main revenues and costs are the labour and materials that ensures high risk if it is not considered to be economically viable.
Solution: The Genting Malaysia Berhad needs to identify its finance allocations so that corrective measures can be taken accordingly on planning, designing, testing and installations. The perfect financial analysis will always minimize the risk while measuring the feasibility of particular investments on technology (Marmon & Shaun Elizabeth, 2009; Ramon & Joan, 2011). However, the partnership with 20th century fox is important so that proper financial allocations are done that are essential to predict revenues. In addition, the financial risk can be mitigated if the more of fixed costs are changes into variable costs which will not only lower the breakeven point but will also reduce the likelihood of failures due to the lower anticipated sales (Brigham & Ehrhardt, 2013)
The competition is rising and the main competitors that Genting Malaysia Berhad is facing from Singapore and Hongkong entertainments (Lisa, & Bolton, 2010). The basic competitive factors include promotion, packaging and other related advantages. However, the ganmong market of Singapore and Macau is also facing tough competition. Nonetheless, Genting derives most of its revenue from the steady grind market at home, which is more resistant to competition (Ramon & Joan, 2011; Lisa & Bolton, 2010). However, SDingapore has schedules development of two resorts and casinos that can divert the cutomer’s attention which may impact the tourism in Malaysia. Singapore leader announced that the potential developers would therefore be asked to submit bids that will be applied to integrated resorts at Marina Bayfront and Sentosa.
Solution: It is important that the company recognizes its immediate competitor so that essential strategies can be constructed for competitor strength assessment for business (Hoyland & Robe, 2006; Ariely & Kathleen Vohs, 2009). Therefore, the strategy that needs to be undertaken is in relevance to competitors by the pricing and promotional systems and attractive events.
Economic Position
The current economic position is not beneficial for the company to enter into a new venture because the developmental cost is high (Ariely & Kathleen Vohs, 2009; Ramon & Joan, 2011). However, with more additional technology, systems and manpower the budget may rise and may result in unfavorable position of the cost.
Solution: The new business needs to understand the customers as well as the pricing systems on the GST. Moreover, other operational cost needs to be effective on customers so that the packages made are efficient and attractive and could also cover the cost of the company.
Implementation Strategy
The management needs to decide the customers’ service towards mar4keting mix which holds important for Genting Malaysia Berhad entertainment business. The customer service needs to effective so that the business can be influenced for long term (Marmon & Shaun Elizabeth, 2009; Burack & Elmer, 2008). Although, the new business will attract customers but will require proper effective service system which is essential for the Genting Malaysia Berhad entertainment business
Marketing is one of the concepts that need to be helpful in increasing the revenue of the company. The challenges of the organization are to analyse the marketing mix effectively that specially highlights the price, promotion and services (Ramon & Joan 2011; Lisa & Bolton, 2010). However, as a matter of fact any organization, in this case Genting Malaysia Berhad would require different strategies to be applicable for the new business.
Product design and product introduction are the two main challenges that the manager needs to look forward to; followed by the way the new product serves the customers (Li, et al., 2013). However, marketing management strategies and tools are important to be implemented on customer service for the new product in the new business with standard product quality and product availability (Marmon & Shaun Elizabeth, 2009). Price marketing strategies like cost plus, demand based, skimming, penetration and competitor indexing with discounts and allowances will be helpful. However, the implementation will be valuable responsibilities will be assigned with incentives and training methods of the employees. The month by month agenda with adjustment mechanism can be one strategy that will keep a track of the program evaluation of the theme park (Fleisher & Bensoussan, 2015).Overall pricing system poses a challenge because it directly relates to the market strengths of the company (Derrick & Soren, 2010). However, the price structure adopted needs to be competitive in nature.
On the other hand, the Genting Malaysia Berhad new venture with 20th century fox business management requires recognition in the community talks so that the community’s message can be spread through word of mouth to attract more customers in the new business (Riley and Michael, 2006). The other factor physical evidence also plays a crucial role because the promotional activities done through social media marketing will enable their feedback in evaluating the product to attain maximum customer satisfaction (Lovelock, Patterson & Wirtz, 2014).
The operations strategy primarily focuses on role of the people, skills and customer service that are significant in a new venture. Therefore, the company should indulge in activities like training and upgrading the new staff acquired through recruitment and selection. However, on account of delay in customer service, certain strategies needs to be undertaken that accounts to serve customer service efficiently (Derrick & Soren, 2010; Ariely & Kathleen Vohs, 2009). The strategies that can be taken in building a strong customer service are training employees with proper knowledge of the product in this case the theme park and its aspects of service charges, ticket, etc. Secondly, the customer service should be build with proper infrastructure like ticket tracking, call-backs and FAQ’s; thirdly, solving the query of the customer at the first point through live chat support contact or feedbacks through emails or phone calls. Lastly, the organization should make it a point to deliver on promises and making it personal through apologies to customers for delay in work and asking for feedbacks for future assistance (Kansky, 2012). Conversely, if the customer service is served properly then it may enhance the value for the long-term business. However, delivering without delay should be the basic motive of Genting Malaysia Berhad entertainment business. Customer needs should be served with top priority for the company (Ramon & Joan, 2011; Stephen, Robbins Bruce & Millett Terry, 2004). Nonetheless, the company needs to implement different strategies, process and techniques in different departments to enhance the customer service quality at all levels.
The operational strategy highlights that the partnership should follow a unique trajectory that only increases the likelihood of success but also reflects the decisions made in agreement based on strategic alliance (Johnson, et al., 2015). On the event of venture, the key element that needs to be included is as following.
Strategic goals and objectives – The goals of the new venture on the theme park should be shared as well as individual such that decision undertaken should be in collaboration with each other bit there should be no interference of the allotted task to each other from the other party.
There should be level of required institutional commitment from each of the two partners that is 20th century fox and Genting Malaysia Berhad.
Roles and responsibilities should be shared by utilizing each other’s strength to draw the “core complementary competencies” (van Tulder & Pfisterer, 2013).
Specific Commitments should be made on agreed roles and different departments needs to be allocated according to the resource abilities from each other such as no one firm is responsible for any work.
Decisions making principles and processes are done through the strategic alliance in Malaysia that is primarily done to gain capabilities that not only accompanies expansion but also incorporates the benefits of knowledge, technology and expertise. In addition, as this strategic alliance is based on joint venture in Malaysia where contractual negotiation is active such as each partner namely 20th century fox and Genting Malaysia Berhad will refine their roles according to their contribution and rewards as well as protect and proprietary information based on the degree of arbitration procedures (IšoraitÄ—, 2009)
Mechanisms of accountability in the strategic alliance acts like partnership were boards, adherence to codes of conduct, oversight committees and accounting standards need to be met.
Suitable channels for propagation of outcomes should be carried out as the decisions made are confidential and there should be sense of privacy in the joint decisions made with the top management.
The procedure of communication or resolving disputes with each partner of organization should be followed through a proper procedure (Osterwalder & Pigneur, 2013).
Viability Assessment – The viability assessments can be achieved when there is operation and performance evaluation criteria that could be characterized by higher level of commitments, collaboration and communication (Ray, 2013).
Figure: Factors influencing strategic alliance
Source: (Ray, 2013)
The management strategies undertaken in this new venture should solve different issues like finance allocations, time managements, operation managements, and inventory management. The management strategy at each step will overturn the new venture’s weakness to strengths and the threats identified could be minimized (Ramon & Joan, 2011; Ariely & Kathleen Vohs, 2009). However, the management strategies may also serve as a benchmark in solving political and economic challenges and situations.
The management strategy is specifically aligned for the senior line managers and executives that are directly responsible for cross company collaborations. Moreover, they are responsible to take care of the day-to-day operations taking place in the new venture (Vachon, 2012).
The management strategy on customer service can be applied through promotional strategy for every category of customers. Hence management challenge is promotion implementations at Genting Malaysia Berhad entertainment business (Hoyland & Robe, 2006; Riley & Michael, 2006). In addition, the time taken for the promotional strategy to serve the new venture of Genting Malaysia Berhad and 20th century fox is also important. The promotion strategies like advertising, theme, media, sales promotion, publicity, product relations and word of mouth marketing will extend the business to be known. The electronic promotion through direct as well as e-marketing will provide effectiveness in the strategy.
On the other hand, promotion place of the product on various platforms also terms to be significant to attract local and international customers (Ariely, & Kathleen Vohs, 2009). However, the other promotional platform can be social search engines that can be beneficial for magnetizing the potential customers as well (Atras & Lykova, 2013).
References
Aaker, D. A., & Joachimsthaler, E. (2012). Brand leadership. Simon and Schuster.
Atras, A. & Lykova, A., (2013). Driving the markets in the 21st century: How to enhance proactive market orientation using social media.
Brigham, E., & Ehrhardt, M. (2013). Financial management: Theory & practice. Cengage Learning.
Burns, P. (2014). New Venture Creation: A Framework for Entrepreneurial Start-Ups. Palgrave Macmillan.
Fleisher, C. S., & Bensoussan, B. E. (2015). Business and competitive analysis: effective application of new and classic methods. FT Press.
Genting Malaysia. (2015). Annual Report 2015. Available at: https://www.gentingmalaysia.com/annualreports/2015/17.pdf [Accessed 1 Jun. 2016].
Genting Malaysia. (2015). Sustainability Report. Available at: https://www.gentingmalaysia.com/annualreports/2015/12.pdf [Accessed 30 May 2016].
Gentingmalaysia.com. (2016). Genting Malaysia Berhad – Profile. Available at: https://www.gentingmalaysia.com/profile.htm [Accessed 30 May 2016].
Hall, M. C., & Page, S. J. (2014). The geography of tourism and recreation: Environment, place and space. Routledge.
IšoraitÄ—, M. (2009). Importance of Strategic Alliances in Company’s Activity. Intellectual Economics, 1(9), 39-46.
Johnson, G., Whittington, R., Scholes, K., Angwin, D., & Regnér, P. (2015).Fundamentals of strategy. Pearson.
Kaats, E., & Opheij, W. (2013). Creating Conditions for Promising Collaboration: Alliances, Networks, Chains, Strategic Partnerships. Springer Science & Business Media.
Kansky, M. (2012). 7 customer service strategies to help you beat the competition.LiveHelpNow Blog. Retrieved 9 June 2016, from https://blog.livehelpnow.net/7-customer-service-strategies-to-help-you-beat-the-competition/
Kapferer, J.N., (2012). The new strategic brand management: Advanced insights and strategic thinking. Kogan page publishers.
Li, Q., Maggitti, P. G., Smith, K. G., Tesluk, P. E., & Katila, R. (2013). Top management attention to innovation: The role of search selection and intensity in new product introductions. Academy of Management Journal,56(3), 893-916.
Lovelock, C., Patterson, P.G. & Wirtz, J., (2014). Services marketing. Pearson Australia.
Mitrasinovic, M. (2006). Total landscape, theme parks, public space. Ashgate Publishing, Ltd..
Osterwalder, A., & Pigneur, Y. (2013). Business model generation: a handbook for visionaries, game changers, and challengers. John Wiley & Sons.
Ray, S. (2013). Strategic alliance in India under globalized economic scenario. Advances in Asian Social Science, 4(2), 824-835.
Vachon, C.J. (2012). Scratch My Back, and I’ll Scratch Yours: Scratching the Surface of the Duty of Care in Cross Sector Collaborations–Are For-Profits Obligated to Ensure the Sustainability of Their Partner Nonprofits?. Hastings Business Law Journal, 8(1).
van Tulder, R., & Pfisterer, S. (2013). Creating Partnering Space. Social Partnerships and Responsible Business: A Research Handbook, 105.
Wheelen, T. L., & Hunger, J. D. (2011). Concepts in strategic management and business policy. Pearson Education India.
Yan, Y., Qian, Y., Sharif, H., & Tipper, D. (2013). A survey on smart grid communication infrastructures: Motivations, requirements and challenges.Communications Surveys & Tutorials, IEEE, 15(1), 5-20.
Young, J. (2015). Cool New Technology That Could Come to a Theme Park Near You! – Theme Park University. Theme Park University. Retrieved 10 June 2016, from https://themeparkuniversity.com/theme-parks-101/cool-new-technology-that-could-come-to-a-theme-park-near-you/
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download