Case Study : Qian Hu Corporation

Limited Done by : Team 3

Toh Wanning (033296D)

Wom Li Ling (035811T)

Chia Yan Li Jacqueline (034183Z)

Ang Soon Lee Kelvin (032438G)

Ng Tse Hsiung (033425B)

Objectives

•Background of Qian Hu Corporation

•Kenny Yap’s Leadership Style and its Impact on Organization Behaviour

•Qian Hu Corporation’s Global Business Strategy via Wider Distribution Network

Background of Qian Hu Background of Qian Hu Corporation LimitedCorporation Limited

Qian Hu’s Beginnings

• Started in 1985 as a pig farm

• Suffered many setbacks

– Government’s move to stem pollution in 1985

– Guppies were washed out by a thunderstorm in 1989

– 4,000 of their high-fin loaches dying in one swoop

Present Condition of Qian Hu

• More than 4% of the global ornamental fish market

• Multinational with subsidiaries across Asia

• Last year making $1.8 million

• Establishes Singapore as the leading exporter over the past few years

Future Plans of Qian Hu

• Widen their distribution network to other countries

• Setting up retail chain stores across Asia under “Qian Hu- The Pet Family”

• Expand to more than 100 stores within the next 5 years

Competition in the Ornamental Fish Industry

• High growth business

• 6 farms registered with AVA for breeding of Dragon fish other than Qian Hu

• Leading exporter of ornamental fish despite of the competition

Key Competitive Strengths

• Was first to:– Received ISO 9002 and ISO 14001 certification

for having effective quality management system

– Integrated ornamental fish service provider to achieve Singapore Quality Circle status

• “one-stop” centre as their unique business model

Kenny Yap’s Leadership Kenny Yap’s Leadership Style and its Impact on Style and its Impact on Organization BehaviourOrganization Behaviour

Type of Leadership Style Kenny Yap Adopted

• Exceptional drive towards his work

• Humble and have integrity

• A visionary and democratic leader

Tools Used to Assess Effectiveness of Leadership

•Employee Opinion Survey

•Customer feedback

•Self assessment

The Pros and Cons of His Leadership Style

• Drive for his work

• Take employees suggestion into consideration

• Provides rewards

• Gives direction

• Achievement oriented person

• Goal setter

• Honest and have integrity

Effectiveness of This Approach

• Possesses great foresight

• Visionary leader

• Set a challenging and realistic goal

• Build good rapport with employees

Qian Hu Corporation’s Global Business Strategy

via Wider Distribution Network

Qian Hu Distribution Network

Growth Strategy Approach

- Wholesaling

- Direct Retailing

- Direct Exporting

- Joint venture

• Singapore market small

• Learn from past failure

• More control on market movement

• Enhance market movement

Reason for the Approach Adopted

The Pros and Cons of the Growth Approach

• Distribution of ornamental fish and Distribution of ornamental fish and accessories through:accessories through:

1.1. Direct ExportingDirect Exporting

2.2. WholesalingWholesaling

3. Retailing3. Retailing

The Pros and Cons of the Growth ApproachProsPros ConsCons

1. Export of 1. Export of ornamental ornamental fish and fish and accessoriesaccessories

1. Foreign markets 1. Foreign markets provide a provide a

better profits better profits opportunities opportunities

than local marketsthan local markets2.2. Require a larger Require a larger

customercustomer base to achieve a base to achieve a

economics of scaleeconomics of scale3.3. Reduce independence Reduce independence

on on any one marketany one market4.4. Require less Require less

investment investment 5.5. Able to maximize Able to maximize

potential profit returnspotential profit returns

1. Fail to understand 1. Fail to understand foreign customers foreign customers preferencespreferences

2. Failure to understand 2. Failure to understand thethe

foreign business foreign business cultureculture

3.3. Underestimate foreign Underestimate foreign regulationsregulations

4.4. Lack of talent mangers Lack of talent mangers with international with international experienceexperience

5.5. Foreign country might Foreign country might change its commercial change its commercial lawslaws

The Pros and Cons of the Growth Approach (Cont..)

ProsPros ConsCons

2. Wholesaling2. Wholesaling

1. Less decision 1. Less decision making making

2. Able to cover a 2. Able to cover a larger trade arealarger trade area

3. Deal with business 3. Deal with business customer onlycustomer only

4. Deals differently on 4. Deals differently on legal regulations and legal regulations and taxes compare to taxes compare to retailingretailing

5. More efficient to 5. More efficient to perform the tasksperform the tasks

1. Wholesale business 1. Wholesale business might dwindle might dwindle somewhat in the somewhat in the futurefuture

2. Retailer bypass the 2. Retailer bypass the wholesaling to direct wholesaling to direct buy programs from buy programs from the manufacturersthe manufacturers

3. Failure to carry out 3. Failure to carry out customers’ customers’ requirementrequirement

The Pros and Cons of the Growth Approach (Cont..)

ProsPros ConsCons

3. Retailing3. Retailing

1. Achieve economics 1. Achieve economics of scaleof scale

2. Wider brand 2. Wider brand recognitionrecognition

3. Able to gain 3. Able to gain potential potential

returns in long returns in long termsterms

4. Able to differentiate 4. Able to differentiate its servicesits services

5. Diversify their range 5. Diversify their range of productsof products

6. Able to gain the 6. Able to gain the process of owning process of owning the customers and the customers and not the business.not the business.

1.1. In short term, it In short term, it might occur huge might occur huge losseslosses

2.2. It is more risky and It is more risky and requires huge requires huge investmentinvestment

3.3. Require a lot of Require a lot of carefully planning carefully planning and decision makingand decision making

4.4. Faced intense Faced intense competition from competition from same retailersame retailer

Effectiveness of the Strategy

Strategy on Exporting,

Wholesaling and Joint Venturing

Strategy on Retailing and Manufacturing

Net Profit of S$7.016 million

in 2003

Dip in Net Profit of

S$1.6 million in 2004