1.

0 Introduction to the Industry

1.1 Description
1.1.1 Description of Food and Beverage Industry
Global market forces are driving the continual evolution of the food and beverage industry.
Consolidation, changing customer preferences and increasing government regulations are
dramatically impacting manufacturing and business strategy. In this fiercely competitive market
place, the manufacturer must offer a greater variety of products to meet consumer demand. At
the same time, the manufacturer must consistently and cost-effectively produce high quality
products. To be successful, the manufacturer should focus on three key business issues:
financial performance, sustainability and brand equity.
1. Financial Performance
In todays global market place, where growth via acquisition is prominent, the key to sustained
positive financial performance is the ability to understand and respond to consumer demand
and competitive pressures while reducing cost of production.
2. Sustainability
Manufacturers want to have a positive impact on society and the environment. In addition, they
want to turn sustainability program is the belief that the corporate investment in environmental
and social responsibility must strength business performance to be successful. It must reduce
environmental impact, achieve genuine economy in the use of resources, deliver a return on
investment and enhance the equity of their company.
3. Brand Equity
Customer loyalty is the key to success of manufacturer business and maintaining customer
loyalty is achieved through consistently manufacturing high-quality products, batch after batch.
In doing so, the manufacturer need to add value on into their brand.

1.1.2 Description of Key Stakeholders

Definition of stakeholder is a person, group, or organization that has direct or indirect stake in an
organization because it can affect or be affected by the organization's actions, objectives, and
policies. The explanation below establishes that Mamee-Double Decker Bhd product market
stakeholders have the greatest stake in the firm's strategies and success.
Key stakeholders in a business organization included creditors, customer, directors, employees,
government (and its agencies), owner (shareholders), suppliers, unions, and the community
from which the business draws its resources. Although stakeholder is usually self-legitimizing
(those who judge themselves to be stakeholders are stakeholder), all stakeholders are not equal
and different stakeholders are entitled to different considerations. For example, a companys
customers are entitled to fair trading practices but they are not entitled to the same

consideration as the companys employees.

Stakeholder power is an important factor to consider whenever you are asked to write about the
relationship between a business and its stakeholders. In the context of strategy, what is
important is the power and influence that a stakeholder has over the business objectives.
Stakeholders can be classified in to 3 main group which is product market, capital market and
organization stakeholders.
Each group have their own roles, benefits and some might affect companys objectives. Product
market stakeholders are people who benefit directly from the business without necessarily
investing money, such as consumers, suppliers and host community.
Besides, organizational stakeholders are employees who work for the company and depend on
survival for income. While, capital market shareholders are the shareholders and lenders who
expect the firm to preserve and enhance the wealth they have entrusted to the company and
returns should be commensurate with the degree of risk to the shareholder.
1. Product Market Stakeholders
(a) Consumer
As stakeholders, consumer generally demands reliable products at the lowest possible prices.
Mamee-Double Decker Bhd's customers will ultimately determine if the company succeeds
based on satisfaction measures such as product taste, product function or nutrition, interesting
packaging, and also level of service.
As consumer sentiment gets more favourable in light of the improving economic climate,
Mamee-Double Decker Bhd hope to capitalise on it by getting closer to the consumers' minds
and hearts so as to better respond to their needs.
(b) Suppliers
Suppliers typically seek loyal customers who are willing to pay the highest sustainable prices for
their goods. Driven by the opportunity to move large volumes of product through the distribution
chain, suppliers have accepted Mamee-Double Decker Bhd's rigid terms and continuous
pressure to reduce costs to support its low price strategy.
However, supplier reaction to company's "strong-arming" should be monitored, and they need to
understand the types of actions required by suppliers to meet its demands.
Beside, Mamee-Double Decker Bhd needs to measure successful relationships with suppliers
not by cost alone and minimize the unintended consequences of its relentless quest for lower
prices. By partnering more closely with suppliers, Mamee-Double Decker Bhd can help them
achieve mutually-beneficial goals without the abuse of resources or damage to the environment.
(c) Host community
Mamee-Double Decker reiterates their Corporate Social Responsibility values and goals in
helping to create a better Malaysia for all. While the needs of the less fortunate will always
remain their priority, will also look at ways and means in which they can improve the lives of

their most precious resource, and employees.

Creating better workplaces and giving them opportunities to give back to the community will
feature in their Corporate Social Responsibility plans moving forward, and they look forward to
sharing their progress.
2. Organization Shareholders
(a) Employees
Basically, employee are expecting in a dynamic, stimulating and rewarding work environment.
Besides, they are satisfied by a company that is growing and actively developing their skills.
Mamee-Double Decker Bhd employees' development programme is seen as a strategic
investment for the future success of this company.
In year 2008, they have been constantly challenging the status quo by conducting various ongoing activities from external and internal best practices based on our employees' development
programme as above.
Mamee-Double Decker Bhd shall continue sourcing for talented graduates and professionals
through various career programmes, such as Malaysia Student Internship Programme,
Management Trainee Programme, Trainee Executive Programme and Applied Skills
Development Programme. If employees got the ability, company must have the opportunity to
success.
(b) Board of Director (BOD)
The Mamee-Double Decker Bhds board has overall responsibility for the Group's system of
internal control and for reviewing its the role of management is to implement the board's
policies on risk and control.
The system of internal control is designed to manage rather than eliminate the risk of failure to
achieve business objectives. In pursuing these objectives, internal controls can only provide
reasonable and not absolute assurance against material is statement or loss.
The board confirms that there is a continuous process for identifying, evaluating and managing
the significant risks threatening the Group during the financial year under review and prior to the
date of approval of the annual report and financial statements.
(c) Internal Audit
The Mamee-Double Decker Bhd Group's internal audit function was outsourced to an
independent audit firm who report directly to the Audit Committee. The outsource audit firm
perform regular reviews of business processes to assess the effectiveness of internal controls
and highlight significant risks impacting the Group.

The Audit Committee conducts annual reviews on the adequacy of the internal audit firm's
scope of work and resources. The Audit Committee regularly reviews the internal auditor's
reports and discusses the highlighted issues with the Management to ensure every issue has
been properly resolved.
3. Capital Market Shareholders
(a) Shareholders
Shareholders and lenders expect financial returns that exceed industry performance and the
potential returns from alternative investment opportunities. A look at Mamee-Double Decker
Bhd financial performance helps to identify measurements that determine the success of
Mamee-Double Decker Bhd strategy for capital markets:
Net profit of RM43.6 million, an 84.7% increase from the RM23.6 million in the preceding year.
Revenue was at RM411.5 million in 2009, up from RM397.0 million previously.
In 2009, 10.2% improvement in sales contributions from the domestic market to RM285.3
million in sales, from RM259.0 million in the previous year.
Net Profit to Shareholders in 2009 was increase from 10,296million up to 9,225million and the
changes were 11.6%.
Earnings per share (EPS) for the quarter ended 31 December 2009 was 11.87 cent. This
brought the yearly EPS up to 50.31 cent in 2009, a 73.0% increase from 29.05 cent in the
previous financial year.

1.2 Segments
1.2.1 Demographic Segment
According to a survey, Mamee-Double Decker has invested in football fans. There are more
than five million Manchester United football fans and they have a similar profile to its target
consumers, mainly young adults and families. Mamee-Double Decker strongly believed that
football is a wholesome event that brings friends and family together. They cheer for their team
together and when their team wins, they celebrate together.
So, Mamee-Double Decker want to be the favorite snack to watch football with, and become
part of the special moments only Manchester United can provide. They also believe that Mamee
product will be elevated by Manchester United partnership and the football fans will love Mamee
product just as they love Manchester United. And also, sports was one of the key elements that
promotes unity among the people and as a responsible Malaysian company, Mamee-Double
Decker wishes to use the event to bring the different races and families together in a
wholesome way.
Mamee-Double Decker (M) Berhad, an investment holding company, engages in the
manufacture and marketing of food and dairy products, and soft drinks. It products include
instant noodles, snacks, dairy products, chilled products, beverages, and confectionery. The
company also provides information systems management and motor vehicle rental services.

It has operations in Malaysia, Myanmar, and other Asia countries. The company was
incorporated in 1971 and is headquartered in Ayer Keroh, Malaysia. Under income distribution,
Mamee-Double Decker expects to see export sales contribution improve to as much as 50%
from some 30% currently over the next few years on the back of its sponsorship deal with
Manchester United Ltd.
1.2.2 Economic Segment
In a filing to Bursa Malaysia today, Mamee-Double Decker said the profit
reduction was caused by the increase in raw material and other commodity prices, as well as
higher advertising and promotional expenditure. Meanwhile, the increase in revenue was
contributed by higher sales from the foreign markets with better pricing structure.
"The board will continue to strengthen its operations, not only by implementing continuous
improvements in selling and distribution channels, but also by investing capital expenditure to
increase and enhance the group's production capacity," the group said. Bernama. From the
economic segment, Mamee also has a strong balance sheet. Net cash and short-term
investments totaled RM73.1 million as at end-2010.
This and the expected cash flow from operations would allow it to comfortably fund the planned
expansion and maintain a 50% profit payout. Indeed, we forecast the company will stay in a net
cash position, albeit marginally so, after paying for its planned capital expenditure this year.
They estimate single-tier dividends totaling 15 cent per share, which translate into a net yield of
4.2% based on its pre-announcement price of RM3.60. Mamees latest privatization proposal
appears to highlight the fact that the market does, at times, fail to fairly value stocks for their
underlying fundamentals. This has been one of the factors prompting controlling shareholders to
take their companies private in recent years.
1.2.3 Political / Legal Segment
In political or legal segment, Mamee is facing Greening program which launch by the
government and also the NGOs. This program has restricted the usage of plastic in industrial.
Since plastic is the main raw material for Mamee to produce bottle for Nutrigen, Mamee has to
think of other way to reduce using of plastic in the company. Other than this, Mamee also may
face some environmental care policy.
1.2.4 Socio-Cultural Segment
Malaysia is a multi cultural country which built up by multi nations.Mameehas to be focus on
different nations customers. There are 3 main and others nations in Malaysia which is the
Malays, Chinese, India, Iban and more. Mamee has to produce a suitable taste of products in
order to gain more market shares. Mamee found that Malaysian are getting health concern now
a days, so Mamee starts to diverse it product line by having healthier snacks which is Nutrigen,
Lite Yeo yogurt and so on. This may gain more market shares on Mamee products. Mamee
produce Nutrigen with various kinds of tastes to suit the Malaysians multi nations demand.

1.2.5 Technological Segment

Mamee has invested in the integrated SAP applications. MySAP, a product of the German
software company SAP, is an e-business software integration tool that delivers content to the
user based on their roles in the enterprise. This system enables them to analyze their costs in a
way that was not possible before. They can report on all the cost components of each product
from raw ingredients through to the proportion of overheads allocated.
All could be done in less than three days. The data is convenient to them by highlighting areas
where costs are rising, showing them the effect of administration costs, and allowing them to
calculate the volumes that they need to sell. The SAP solutions have removed the delay in
production planning, as they automatically prompt the sales teams for regular, updated figures.
SAP has improved in forecasting accuracy and the production plans help them to identify likely
manufacturing bottlenecks that could prevent them from fulfilling a customer order on time.
Similarly, the quality management process has been fully transferred to the SAP applications.
Should a quality issue arise, Mamee is able to track and trace every ingredient, manufacturing
and delivery stage. This is an essential capability when selling internationally, since most
customers require full audit data.
1.3 Caveat

1.3.1 Global
In global, the Mamee have to face a problem with the environmental issues where the majority
of the company product packaging is using a plastic. Nowadays government and majority of the
country in this world are trying to reduce the usage of plastic bag in order to keep the health
environment due to the plastic are very difficult to be destroy.

1.3.2 Physical
In physical, Mamee have to pay more for the cost of electricity consumption per tonnage of steel
and the natural gas that currently used in the rolling mill operations. Mamee also must
concerned with petrol price increases as it would affect the price of plastics, a by-product of
petrol which they use a lot for bottles of beverage products and other products. Besides, they
must also manage well to settle the garbage from their production to keep the environment
clean and leave no environmental footprints. Other than that, Mamee have difficulties to create
an awareness of their workers to encouraging their workers to protect the environment by save
the usage of electric current and also water.

2.0 Socio- Economic

2.1 Relevant Government or Environmental Factors

2.1.1 Infrastructure and Support Services

Slaughter, processing and support facilities for halal products will be expanded and upgraded.
This will include the establishment of centralized slaughter facilities with veterinary supervision
to replace the current wet slaughter market. There will also be infrastructure at entry points for
exporting and importing halal products including storage systems.

Cold rooms, warehouses, and containers will be built and better transportation system will
developed for proper distribution purposes.

Skilled manpower will be developed through accredited training schemes. Industry funded
training programs will be encouraged to complement training provided by Government
institutions and the academia.

2.1.2 R&D and Food Processing Technology

Government involvement in R&D will be strengthened and consolidated to increase overall

institutional capacity and efficiency to support the industry. The R&D are carried out by several
institutions, especially MARDI, DVS, UKM and UPM, on new product development, food
biotechnology, halal food ingredient, disease diagnostic, and prevention and control on
livestock.

According to the director of MARDI, Dr. Abu Bakar Hussin (1999), MARDI has a very strong
team of food specialists and technologists contributing to the food processing technology, such
as creating a new supplement for halal ingredient such as the vegetable-based gelatine to
substitute the meat-based gelatine. The advancement of food biotechnology has instigated new
issues to halal food production.

For example, if the swine DNA is transplanted to the yeast cell for producing a kind of protein, is
the new protein halal or non-halal. The fermentation of soy sauce, which produces very low
level of alcohol in the final product, is it halal.

These types of issues will be forwarded to the Majlis Fatwa of JAKIM to determine the halal
status of the product. MARDI is trying to develop proper processing methods, new technology,
new ingredients, and material that are safe, clean, healthy, and halal.

2.1.3 Laws and Regulations

Ministry of Domestic Trade and Consumer Affairs has some authority to regulate halal food in
Malaysia. Trade Description 1972 (Use of Expression Halal Order 1975 and the Marking of
Food Order 1975) has stated clearly the condition of using the halal expression and the labelling
of halal food, as well as the penalty of misuse of the halal expression and marking.

However, as explained by Encik Mohd. Rabani of Ministry of Domestic Trade and Consumer
Affairs, the use of halal and the marking of halal are voluntary, which mean that halal products
do not need to be marked halal. However, if a manufacturer uses the halal expression and the
halal logo and the products are found to be non-halal, they will be penalized.

2.1.4 Capital and Financial Support

Public and private financial institutions are helping halal food manufacturers to get adequate
funding in investing to be halal food producers. According to Ms Lilywati (1999), Deputy
Director, Agro Industries Division of MIDA, several banks such as Bank Negara, Bank Islam,
and Agro Bank have special packages to help manufacturers get sufficient funding

In addition, suitable incentives for automation investment will be provided, and import tax on
specialized livestock farm and processing equipment will be abolished. The main incentives for
the investment in manufacturing and agriculture sectors are provided for in the Promotion of
Investment Act, 1986 and the Income Tax, 1967.

MIDA is also providing incentives to food processors and manufacturers in the form of import
duty exemptions for raw ingredients and tax incentives to encourage investments in
infrastructure development to attract local and foreign investors.

The NAP3 comes with RM32.4 billion Plan of Action for a 13-year period (Singh, 1998). Since
promoting Malaysia as an international halal food hub is under the medium-term measure,
sufficient amount of fund is expected to be allocated in this action plan.

2.1.5 Institution of Accreditation and Standards

Besides JAKIMs official logo, the Veterinary Health Logo is another accreditation to enhance
the halal product. This DVS logo ensures the meat and meat product is safe to consume and
disease free.

The food quality division of MOH is the agency in charge of the HACCP accreditation in
Malaysia. The Guidelines for HACCP Certification Scheme (1998) is ready and available to
assist food manufacture to oversee the food manufacturing and practice the GMP.

2.1.6 Promotion

MATRADE is the agency responsible for promoting Malaysian halal food under the Malaysia
brand name. Ministry of International Trade and Industry (MITI) is also playing an important role
in the international arena to promote Malaysia as an international halal food hub.

Both these agencies also conduct trade exhibitions, seminars, and conferences to promote and
sell our halal food worldwide especially to United States, European Nations, Middle East, and
OIC countries where there are substantial Muslims populations. MITI also facilitates efforts in
identifying new halal export markets such as Commonwealth of Independent States (CIS) and
Russia.

2.2 Economic indicators relevant for this industry

(a) Producer Price Index

It is a weighted index of prices measured at the wholesale, or producer level. The producer
price index show trends within the wholesale markets, manufacturing industries, food and
beverages industries and commodities markets. It does not represent prices at the consumer
level.

(b) Durable Goods

Durable goods reports provides data on new orders received, which are generally defined as
higher priced capital goods orders with a useful life of three years or more. This data provides
forward looking data such as inventory levels and new business, which count toward future
earnings.

(c) Consumer Confidence Index

Consumer Confidence Index (CCI) is a monthly release from the conference board which is a
non-profit business group that is highly regarded by investors and the Federal Reserve. It is a
unique indicator designed to gauge the relative financial health, spending power and confidence
of the average consumer.

3.0 Porters Five Forces Analysis

Mamee Double Decker (M) Bhd is mainly focus on snack and food products since 1971. Those
products are Mamee monster snack, instant noodles, Mamee Double Decker Prawn Cracker
and so on. Later on 1996, Mamee-Double-Decker started taken significant steps to diversify its
product range and develop more functional food and healthy snack options for their
customers. They targeting on children between ages 10-15 and also the adult. So they try to
enter in the range of beverage product like Nutrigen, Nutri Yo Yoghurt, Yoghurt drink, Nutrigen
IQ3 and so on. Mamee Double Decker (M) Bhd may face challenge in this new field since there
are many barriers of entry in the market.

3.1 Threat of New Entry

Plastic is the main raw material using to produce products like bottles, plastic wrapping, labels
and more. In the controlled of government policy, MAMEE is currently facing greening program
which set up by the government and also the non government organization. The greening
program has been enforced to be use in beverage manufacturing industry.

The consumption of plastic in each industry has been limited. Plastic which use to make bottles
for Nutrigen or yogurt drink couldnt be produce in a large quantity. In order to support the

market demand, MAMEE has changed the thickness of the bottle for their beverage products.
This may reduce the needs of plastic use in the company in order to fulfill the requirement which
setup by the government and NGO.

Besides, any food and beverage that sell in Malaysia should be certified by HALAL. HALAL
foods are foods that are allowed under Islamic dietary guidelines. Nutrigen will have to get a
HALAL certificate to gain market share on Muslim consumers. Besides, there are several act
and regulations like Prevention of Food Adulteration Act, ISO and SIRIM approval and more
rules should be followed by food and beverage manufacturer. This is not only to show the
quality of the companys products but also to build a good reputation for the consumers.

Mamee Double Decker (M) Bhd has invested equipment on processing their new products in
million. The most significant investment is Mr. Pang, managing director of Mamme company has
invested a 2000HA land to plant fruit tree in Indonesia for getting fruit juice and extract to make
produce beverage drink like Nutrigen, yogurt drink and so on. Mr. Pang has also invested on
latest IT system to be more flexible to access information on their operations to be better
understanding the market and address subtle changes in industry.

This may be the cost for manufacture a new product in the market. Other than government
policy controlled and capital requirement of the company to enter a new market, MAMEE also
facing products differentiation. There are several competitors which is Vitagen and also Dutch
Lady Yoghurt drink. The consumers may believe that drinking Vitagen or Dutch Lady Yoghurt
drink may good for their health rather than a new brand, Nutrigen which is consider a new
comer in the industry.

To overcome this problem, MAMEE has set a lower price than their competitors. Besides,
MAMEE also invest some in advertising in television with animation advertisement to target on
young children consumer. MAMEE also hired some buses to go along the primary school to
introduce their products to the primary school children. They let the children try their new
products and also having promotion for their parents to purchase in a lower price compare to
shopping complex.

3.2 Bargaining Power of Suppliers

In bargaining power of suppliers, MAMEE is facing problem while they are trying to look for new
land for fruit tree plantation. This may consider the suppliers good are critical to buyers
marketplace success since fruit juice and extract is one of the main ingredients for producing
beverage products.

According to Mr. Pang, he said that it is difficult to acquire a new land in peninsular or Sabah
and Sarawak. Since there are many land owner sell their land in a higher price and also most of
the land were already with other companys plantation for example Sime Darby. This has
caused MAMEE having problem to produce their product since they are lack of fruit extract and
also the puree. Mr. Pang turned his target in Indonesia to search for new land to invest. He
finally get it in Central Kalimantan as the area was less densely populated with many large
tracts of lands still available for plantations, unlike other provinces in Kalimantan and Sumatra.

Moreover, the price also lowers than the price in Malaysia. This may be a Win Win condition for
MAMEE since they got their land in lower price and could also cut down their cost of
manufacture in the company. Besides, MAMEE also facing shortage of milk to produce cultured
milk products in Malaysia because the supply of milk couldnt meet the demand. MAMEE have
to buy this raw material from the neighbor country, Australia.

This may increase the cost of producing since the exchange rate is not good for Malaysian and
also the freight cost is high. In addition, MAMEE also facing plastic bottles shortage from the
plastic producer cause of greening program which set up by the government and the NGOs.
MAMEE and the bottles producer have taken action to produce a bottle which is thinner to
reduce the plastic consumption.

MAMEE also organized 3R program which is Recycle, Reduce and Reuse in their company to
minimize the use of new bottle. They use recycle plastic to produce bottles and also plastic
wrapping or label in their products in order to reduce the consumption of plastic.

3.3 Bargaining Power of Buyers

Consumers are playing the main role in bargaining power of buyers, MAMEE has lowered their
beverage prices in the market to gain more market share. The prices are as Table 1.1

Brand Nutrigen Yakult Vitagen LiteYo Nestle

Yoghurt Yoghurt
Price RM3.19 RM4 RM3.99 RM1.59 RM1.79

TABLE 1.1

From the table above, we can see that price offered by MAMEE is far cheaper than its

competitors. Consumers are bargaining for lower price, higher quality and greater level of
service. MAMEE has done one of the conditions which are the lowered price to attract more
consumers. Besides, for greater level of service, MAMEE has wide range its retailer. There are
many places to that sell its products. For example, we can see Nutrigen selling in 7 Eleven, mini
mart, Giant, Tesco and so on. This may ease the consumers to buy what they want from
MAMEE.

In addition, they also hired part time promoter to promote their products besides their product in
the shopping centre in order to explain the benefits of drinking their products and what are
different compare to their competitors products. In higher quality of products, MAMEE has
offered 0% Fat LiteYo Yoghurt Drink in the market to deliver a healthier yogurt drink for diet
consumers and also cultured drinks for kids and also health concerned consumers. MAMEE
also use gift toy to promote its Nutrigen and other beverage for kids consumers.

3.4 Threat of Substitute Products

There are tons of substitute products for MAMEE beverage products in the market especially
Vitagen from Marigold Company which establish since 1977. It has had built up its reputation in
the market for young children and also adult who have health concern. MAMEE has fight for
more cultured milk market share with Vitagen in Malaysia market by using promotion and
advertising.

Nutrigen is setting in a lower price compare to Vitagen, it may attract price savvy customer to
purchase Nutrigen. Besides, MAMEE also invest lots on TV advertisement on golden hour.
Animation advertisements and toys have attracted kids consumers. Since kids are not concern
about what they purchase, they are more attracted to the toys which included in the Nutrigen
pack.

Meanwhile, there is a new competitor existing in the market few years ago which is Yakult. It
was set up in Japan since 1935 and starts selling in Malaysia few years ago. In just a short time,
Yakult has switch from new comer to be a main competitor because it has a strong supporting
firm from Japan which is an advance nation. Besides, Yakult also invest lots in media
advertising and promotion. Consumers start switching from drinking Nutrigen to Yakult. MAMEE
has encountered this problem by developing its products. MAMEE labeled they have improved
their formula, now they add in good live bacteria in Nutrigen.

MAMEE also invest their advertisement on Manchester United partnership to attract more
football fans to consume their products. They believe that Mamee product will be elevated by
Manchester United partnership and the football fans will love Mamee product just as they love
Manchester United. Sport is one of the key elements that promote unity among the people and

as a responsible Malaysian company.

3.5 Intensity of Competitive Rivalry

In the structure of competition for Nutrigen, it is very intense since there are many competitors in
the market. The main competitors are Vitagen, Yakult and Nestle Yogurt Drink. Vitagen is a
product under Malaysia Milk Sdn. Bhd. since 1977. It is very old brands in Malaysia which can
be considering an experienced competitor for new cultured drink. It is a first cultured drink
introduce to Malaysian consumers.

Vitagen has built a strong reputation in the consumers mind by telling the consumers they are
certified by the health ministry of in Singapore because Singapore is strict on food and beverage
products. It was always the first choice for the consumer during that time because there is no
appearance of substitute products. Several new cultured drinks try to enter the market but they
couldnt sustain long time enough. It is because they couldnt differentiate their product clearly to
the consumers like what Vitagen does.

Since then, MAMEE try to enter this field with the name Nutrigen in the year 1996. MAMEE has
placed a lot of effort to gain market share by media advertising. For example, Nutrigen advertise
them in golden hour, it is between 5pm to 8pm in the television when everyone is going for
dinner.

Nutrigen has to place more effort to differentiate them because it is competing with a
experienced brands with good reputation in the market. They try to differentiate them by telling
the consumers they are a better cultured drink with live cultured bacteria. Besides, they also
offer more flavors to the consumer. Nutrigen offers original, grape, orange, green apple, lychee,
kiwi and also strawberry. Compare to Vitagen, Vitagen only offer 4 favors to the consumers.
Consumers who like the favors of Strawberry may switch to drinking Nutrigen.

Other than this, Nutrigen also try to gain market share by promoting their products to the school
children with buses travel along the primary school and let the students to taste their products
free. They also offer promotion for the primary school students parents. Toys are offer upon
purchase of Nutrigen to attract more young customers.

Later in year 2004, a strong foreign brand, Yakult cultured drink joined in the market in Malaysia.
Yakult can be considering a strong competitor because this cultured drink was discovered and
set up in the year 1930 by Japanese professor. Yakult has been selling throughout the world for
a long time and come in Malaysia 7 years ago.

Yakult doesnt offer much favors like what Nutrigen does. It only offers 2 favors which is the
original and the less sugar. Yakult is more focus on consumers health other than targeting on
other segment. Yakult clearly differentiate them by telling the consumers they are brands which
chosen and trusted throughout the world and they are more concentrated with live cultured
bacteria. Yakult claims that in each bottle of Yakult contains 30 billions of live cultured bacteria.

Moreover, Yakult also invite live consumers to share their experience of how they feel and what
has changed in their health while drinking Yakult. Yakult challenges the consumers to drink their
product continuously in 2 weeks time and say goodbye to constipation. Health concern
consumers have attracted with all this information given by Yakult and start switching to drink
Yakult. In addition, Yakult put more effort on gaining market share by providing delivery service
to their customers house by house. With all this advertisement and services has turn Yakult from
a new comer to become a strong competitor in a short time.

In order to gain more market share, several actions has been taken by Vitagen and Nutrigen.
Vitagen starts provide several of favors other than the old favors. Vitagen realize people
nowadays are concern on aging, so they start provides Vitagen collagen to attract more
consumers who care for the wrinkles on the face. Besides, Vitagen also copy its competitor,
Yakult by providing less sugar Vitagen drink to target on those customers who having high blood
sugar. Nutrigen has changed their packaging with more attractive colour and clear label.
MAMEE has placed effort on R&D in Nutrigen. Nutrigen is now with more live cultured bacteria
in each bottle. This may attract their customers who are switching to Yakult since Yakult claimed
that each bottle of Yakult contains 30 billions of live cultured bacteria.

In the field of yogurt drink, Nutri Yo yogurt is facing international competitors from the Nestle
yogurt. Nestle is considering a strong competitors for Nutri Yo yogurt since Nestle is an
international brands which set up since 1867. Nestle has a good reputation throughout the world
for a long period. Consumers are more confidence to purchase Nestle products other than the
new brands.

Besides, Nestle also offer a wide range of products. Other than chilled dairy, it also offers
cereals, ice cream, culinary products and more. Consumers who used to consume Nestle
products may choose Nestle yogurt without other thought of trying new products. This may let
Nutri Yo yogurt facing great pressure since it is competing with an experienced international
competitor.

In order to survive in this competition, Nutri Yo offer a much lower price compare to Nestle
yogurt. Nutri Yo offer a price of RM1.59 each cup in the market while Nestle yogurt is offering

RM1.79 each cup. This action may help Nutri Yo yogurt to grab some price savvy consumers in
the market. Other than this, Nutri Yo yogurt also hires promoters to promote Nutri Yo yogurt in
the shopping complex. Promoters are taught provide service to answer health questions ask by
the consumers upon Nutri Yo yogurt. It may let consumers to understand clearly what Nutri Yo
yogurt may help them.

4.0 Critical Success Factors

4.1 Global expansion for food and beverage industry

Malaysias food and beverage industry are known as halal food. This is muslim peoples need in
their daily life. Malaysia Government itself had planned to expand halal food to the global
market. So, any muslim peoples especially from Malaysia can easily find the halal food at the
non-muslim countries such as America, Australia and many more. According to the New
Zealand Trade & Enterprise blog, when Malaysia wants to expand their food and beverage
industry globally, it can provide the opportunity to the New Zealands exporters to cooperate with
Malaysia and participate in this plan too. To expand this industry globally, the industry itself must
make sure they produce a good quality food so that our industrys product can get nice market
place.

4.2 Food quality

Food quality is the quality characteristics of food that is acceptable to consumers. This includes
external factors as appearance (size, shape, color, gloss, and consistency), texture, and flavor;
factors such as federal grade standards and internal (chemical, physical, microbial). Food
quality is an important food manufacturing requirement, because food consumers are
susceptible to any form of contamination that may occur during the manufacturing process.
Many consumers also rely on manufacturing and processing standards, particularly to know
what ingredients are present, due to dietary, nutritional requirements or medical conditions.
Food quality also deals with product traceability, e.g. of ingredient and packaging suppliers,
should a recall of the product be required. It also deals with labeling issues to ensure there is
correct ingredient and nutritional information. In Malaysia, food processing is an important
sector within the healthcare industry. The Food Safety and Quality Division, Ministry of Health
was established to ensure that food processing activities are managed according to the required
hygiene and safety standards

5.0 Current Situation

5.1 Firm history and financial performance

5.1.1 History
Mamee Double-Decker was incorporated in 1971 with production commencing on the following
year. Mamee is currently listed on the Bursa Malaysia. They began with a single product but
have consistently grown to the current range of around 50 products and the number keeps on
growing. Many of their products are already household names, including Mamee Monster,
Mamee Instant Noodles, Mister Potato Chips, Nutrigen, Yogurt and also IQ3.

5.1.2 Financial Performance

Mamee-Double Decker will continue to grow core businesses and focus on talent management.
Today, Mamee-Double Decker works as a strong team and all the employees are given clear
direction to execute business plans and strategies. Mamee-Double Decker expect every
business unit to under promise but to over deliver.

Comprehensive human resource plans are developed to nurture and attract talented people
who are passionate about their work. Mamee-Double Decker hire and build employees to link
with the internal culture winning value I.e. the four Is Integrity, Intensity, Innovation and
Involvement. Continuous employment and retention program shall bring fresh set of ideas in
pursuit of nurturing innovation at work.

Over the next three to ve years, Mamee-Double Decker believe that it will be well positioned to
increase market share and continue delivering double-digit growth both in turnover and return
on equity.

Mamee-Double Decker are committed to deliver attractive and sustainable value to

shareholders, and condent that this nancial performance, coupled with attractive dividend
payout, will result in consistent, double-digit returns to shareholders. Mamee-Double Decker are
invested some of earnings in nancial year 2006 to fund the research and development,
products innovation and consumer-directed marketing. Indeed, overall advertising expenditure
of the Group in nancial year 2006 had increased signicantly, including a surge during secondhalf media support for Mamee Sllrrrp and Mister Potato brand.

In financial year 2006, Mamee-Double Decker had invested RM18 million in capital projects to
support future business growth and productivity initiatives and believe these investments
strategy will help to sustain momentum in the nancial year 2007 and will underpin consistent
good growth and returns in the years ahead.

5.2 Strategic Posture

5.2.1 Vision and Mission

The Mamee Company has set up their vision and mission in order to achieve their goal. The
vision is Mamee-Double Decker is to be recognized as the provider of nutritious and tasty food
products that everyone loves, everyday, the world over while their mission of this company is
Mamee-Double Decker is committed to build long-term growth in volume and profit and to
enhance its leadership position.

5.2.2 Current Porters Generic Strategy

Mamee Double Decker strategy is to be the number one or two brand in every market segment
in which their operate by providing nutritious food products of superior value and taste and offer
a trendy, innovation, yet sensational eating experience with emphasis on very high quality
products. Mamee- Double Decker will accomplish this through their strong management and
employee commitment in order to satisfy their ever-changing consumer needs and expectations

Porters Five Generic Strategy

1. Cost Leadership Strategies (Type 1 and Type 2)

Mamee-Double Decker have striving to be the low-cost producer in an industry can be

especially effective when there are few ways to achieve product differentiation, when buyers do
not care much about differences from brand to brand, or when there are a large number of
buyers with significant bargaining power.

Mamee-Double Decker produces the lowest cost goods tend to be cost leader and get the most
profit. It is undeniable that consumers tend to be attracted by low prices.

In this case, Mamee-Double Decker are able to produce goods which are at least meet the

general market standard or that of competitor, consumers tend to choose the cheapest ones.

However, it does not mean that Mamee-Double Decker implements cost leadership strategy will
have the low price product all the time. It just reduces the as much cost as possible in producing
the products.

Example: Mamee instant noodle are lower price than Maggi instant noodle.

2. Differentiation Strategies (Type 3)

Differentiation strategy idea is contrast to cost leadership. While cost leadership aims to set the
lowest prices as possible for the product while differentiation aims to offer consumers goods
which are unique in term of quality and characteristics more than lowest price.

The company will be able to charge premium prices for premium products which satisfy the
specific need of the consumer. The price must exceed the total cost of the product.

Mamee-Double Decker is doing many ways to differentiate their products to compete with the
rival and the strategy should be not easily imitated by the rival. The purpose of differentiate are
to attract the consumer attention or to attract buyers.

Mamee-Double Decker diverse the buyer needs, uses and do more differentiating features into
a unique product that features the desired attributes.

A successful differentiation strategy allows a firm to charge a higher price for its product and to
gain customer loyalty because consumers may become strongly attached to the differentiation
features.

Example : Mister Potato come out with many flavour such as barbeque, tomato, hot & spicy,
original, union, vegetables, grill, and crispy.

3. Focus Strategies (Type 4 and Type 5)

A successful focus strategy depends on an industry segment that is of sufficient size, has good
growth potential, and is not crucial to the success of the success of other major competitors.
Focus strategies are most effective when consumers have distinctive preferences or
requirements and when rival firms are not attempting to specialize in the same target segment.

The focus strategy of Mamee-Double Decker are concentrates on a narrow segment in order to
completely understand and satisfy its market well and within that segment attempts to achieve
either the cost advantage of differentiation. Mamee-Double Decker believed that if each group
of consumers is focused and understood, so it will be able to better produce products and
services which answer their needs. Mamee-Double Decker are focuses on the consumers or
buyers needs, wants and preferences in order to give them the best in term of prices and
quality.

Example: Mamee Monster are the first product of Mamee-Double Decker on 1991 and still have
the high demand until today.

6.0 External Environment (Opportunities and Threats)

6.1 Socio-Cultural
Malaysia is a multi cultural country which built up by multi nations. Mamee has to be focus on
different nations customers. There are 3 main and others nations in Malaysia which is the
Malays, Chinese, India, Iban and more. Mamee has to produce a suitable taste of products in
order to gain more market shares. Mamee found that Malaysian are getting health concern now
a days, so Mamee starts to diverse it product line by having healthier snacks which is Nutrigen,
Lite Yeo yogurt and so on. This may gain more market shares on Mamee products. Mamee
produce Nutrigen with various kinds of tastes to suit the Malaysians multi nations demand.

6.2 Task Environment

Corporate Social Responsible is the greatest value of a company is its image and brand. By
attempting to fulfill the needs and wants of many different people ranging from the local
population and customers to their own employees and owners, companies can prevent damage
to their image and brand, prevent losing large amounts of sales and disgruntled customers, and
prevent costly legal expenses. While the stakeholder view has an increased cost, many firms

have decided that the concept improves their image, increases sales, reduces the risks of
liability for corporate negligence, and makes them less likely to be targeted by pressure groups,
campaigning groups and NGO.

7.0 Internal Environments (Strengths and Weaknesses)

SWOT ANALYSIS

(a) Product Market Stakeholders

In general, product market shareholder is satisfying the needs of customers, suppliers, host
communities, and unions in the product market. This means that the needs should receive the
company's full attention to define their expectations and meet their measures of success. In this
SWOT analysis product market shareholder, we focus on a specific product which is Nutrigen.
Nutrigen is a cultured milk brand introduced by Mamee-Double Decker Bhd in 1996, targeted at
children between 10 to 15 year old and adults who are health conscious in the vision to create
more cultured milk consumption rate in Malaysia.

Strengths
Mamee Double Decker has achieved many awards and certificates previously such as Halal
and SIRIM certification, ISO 9002 and China Award certificates. In 2003, this company was
awarded the chief Minister Award for Promising Local Company Award in recognition of MDDs
contribution to local industries. In addition, the main biggest award that Mamee-Double Decker
Bhd is Malaysia Most Valuable Brand in 2007. Based on the product namely NutrigenLiteyo, it
was awarded the Malaysian Star Award 2003 by Federation of Malaysian Manufacturer
Packaging Council of Malaysia.So, this achievement was building the good reputation and
create brand image for Mamee-Double Decker Bhd.In 2006, Mamee-Double Decker Bhd
introduced Nutrigen IQ3, a cultured milk product and it claimed to be the first synbiotic cultured
milk in Malaysia market. Because of this development, Nutrigen became more recognize by the
consumer and this product became the main choice of the user.

Health seemed to be the main focus within cultured milk industry due to the consumers
awareness towards healthy product. The shape of the industry for cultured milk in Malaysia is
expected to grow as cultured milk considered as a healthy drink, not only for children but adults
as well. In term of the preferences of the customer health lifestyle, Nutrigen was achieved high
value of customer satisfaction because of the product they produce was completely obtain all

the customers needs, such as Nutrigen rich of the nutrition and feature diversity of flavour.
Besides, in term of pricing strategy, Mamee-Double Decker Bhd set up their price in a lower
price to attract customer loyalty.

One of Mamee-Double Deckers strength lies in its extensive distribution network, whereby the
Groups fleet of 150 vans make deliveries from 13 distribution centres to about 1,000 points of
sales. Its local manufacturing facilities are held under 3 companies according to their respective
lines, for example snack food and chilled products, instant noodles, and beverages. The Group
has a centralized marketing and distribution system, with domestic sales handled by MameeDouble Decker Berhad Distribution SdnBhd and Milk Specialities Distribution Sdn Bhd. Besides,
this company a well-established distribution network comprising modern trade (hypermarkets,
supermarkets, convenience chain store) as well as lower trade (mom-and-pop shops and single
retail outlets).

Mamee-Double Decker Bhds emphasis on Resarch & Development (R&D) has always been of
strategic significance in establishing its position a market leader in the food industry. More than
RM2 million is invested in R&D annually. The ultimate objective is to improve the excellent
quality of their current range of products and to innovate new products that meet with changing
consumers taste in order to stay ahead of their competitors. R&D activities are mainly focus on
using natural ingredients in developing new products, which offer specific functional benefits.
R&D team has always been committed and dedicated to ensure steady stream of new
developments. In the chilled division, the team developed functional cultured milk with new
formulation enriched with DHA (major substance in Omega3), was proved in their Nutrigen
cultured milk. This company firstly introduced, NutrigenLiteYo yoghurt and yoghurt drink in 2003,
and after 3 years, they released a new product named Nutrigen IQ3. This product containing
DHA and Inulin which can stimulate mental development, vision and improve the digestive
system. In 2009, Nutrigen was newly improved cultured milk, NutrigenPlus Choline.
NutrigenPlus Choline is a local brand of cultured milk with improved formula that contains
Choline to enhanced healthy lifestyle.

Weaknesses
Although the cultured milk industry is in the growing stage, but the NutrigenPlus Choline is
currently experiencing a sales decline in the cultured milk market compared to the previous year
which results in lower market share compared to other competitors. The company realise that
external market forces, largely increase of competitor factors and the change of consumer
behaviour that may be affecting this issue. The three major brands that are competing under the
same industry are Vitagen (43%), Yakult (24.8%) and Solivite (10.9%). So, due to the high
market share in the industry, Mamee-Double DeckerBhd was faced a sales decline in a short
term period.

In term of their marketing, promotion that they were implements of cultured milk is not really
successful because of the lack of consumer awareness created todays. In 2008, MameeDouble Decker Bhd invested about RM40million in advertising and promotion, and this is a main
impact on the marketing, because over 73.5% of the customers in Malaysia are not really
concern about to their healthy lifestyle.

Opportunities
Nutrigen has long been in Malaysia and received encouraging response from customers.
Nutrigen Mamee Double Decker was exported to foreign countries such as Asia countries, such
as Hong Kong and Brunei. They actually bold enough to penetrated export market to increase
their sales in long term to achieve their goals and objectives.

Industry trend upward Nutrigen is based on market trend nowadays because of the customer
preferences to enhanced healthy lifestyle. Market trend is a putative tendency of a financial
market to move in a particular direction over time. Traders identify market trends using technical
analysis, a framework which characterizes market trends as a predictable price tendencies
within the market when price reaches support and resistance levels, varying over time. So, this
is a good opportunities for Mamee-Double Decker Bhd to develop their company in future.

Threats
Mamee Double-Decker facing the rival branding such as Vitagen, Solivite and Yakult that
occupy significant shares of the culture milk in Malaysia. These companies have the advantage
of familiarity with dietary and cultural preferences along with sophisticated, locally tailored
marketing and packaging. For example, Vitagens strength supported by an efficient distribution
and sales network covering key market centres located throughout the country. Special
refrigerated delivery trucks and vans travel the length and breadth of Malaysia to ensure
products reach retail outlets as fresh as the day they leave the Malaysia Milk plant. This is in
keeping with commitment to quality. In additions, Vitagen success in Malaysia and include
Brunei and Singapore. Besides, Yakult is a high quality probiotics in the form of a cultured milk
drink. Yakult contains the probiotic bacteria "Lactobacillus caseiShirota" (popularly known as the
"Shirota strain"). Born from the research of a doctor in 1935, we have over 75 years of research
experience. Yakult has spread around the world, and is loved by 28 million people from 32
countries and regions.

Sometimes, the situation around causes disruption to the environment and the potential to affect
operation during the manufacturing Nutrigen process. For example, the factory experienced
black out that may affect the manufacturing Nutrigen until the last process. This can cause the
quantity of production to decrease and will delay the distribution to distributors. Besides that,
damage to the machines also had an impact. Such incidents cannot be expected and should
always be prepared for the possibility.

Mamee Double Decker must follow all policies set by the government before making any
decision on the nation. These policies should be followed to avoid some negative effects that
have been noted in the organization. Due to the strict policy, it can cause the product export of
Nutrigen will be slow until get approval from the government.

(b) Capital Market Stakeholders

Strengths
The determinants of Mamee-Double Decker Bhdscorporate performance - strategic,
managerial, and organizational, are complex and interrelated, and in the last decade other
determinants may have cancelled the positive effect of board activism. Additionally, from outside
the corporation looking in, it is difficult to determine whether active boards have actually been
making decisions that could improve managerial performance. An active and independent board
of directors working for shareholders clearly would seem to benefit the corporation by reducing
the losses from misdirected "agency" inherent in the separation of ownership from control that is
fundamental to the modern corporation.

Weaknesses
The rise in euro against US Dollar also has a slight impact on Mamee-Double Deckers earnings
given some of its ingredient for products such as Mister Potato crisps are imported from Europe.
The increase in vegetable oil, starch and flour has added pressure on profit margins to the
company. Foreign currency may give a big impact toward Mamee-Double Decker sales and
profits.
(c) Organizational Stakeholders

Strengths
Good in the companys management team can affect the success of a business. Leader plays
an important role to determine the direction of the company. Leaders need to know how to
manage the company. Effective leadership is based upon ideas, but will not happen unless that
idea can be communicated to others in a way that engages. Put even more simply, the leader is
the inspiration and director of the action. He is the person on the group that possesses the
combination of personality and leadership skills that makes others want to follow his direction.

Opportunities
Corporate Social Responsible is the greatest value of a company is its image and brand. By
attempting to fulfil the needs and wants of many different people ranging from the local
population and customers to their own employees and owners, companies can prevent damage

to their image and brand, prevent losing large amounts of sales and disgruntled customers, and
prevent costly legal expenses. While the stakeholder view has an increased cost, many firms
have decided that the concept improves their image, increases sales, reduces the risks of
liability for corporate negligence, and makes them less likely to be targeted by pressure groups,
campaigning groups and NGO.
Summary Of Situation Analysis
In summary, Mamee is analyzed as a company which heavily depended on its product market
stakeholders. Although organizational and capital market also plays an important role in shaping
Mamees achievements and strategies, their core competencies which allows them to strive in
the industry for 50 years has been the product-oriented marketing.

8.0 Firm Critical Success Factors

8.1 Adaptation to Locality

Mamee-Double Decker are using marketing network to ensure their products adaptation to the
locality. Marketing will do customer analysis, planning on how to selling their products/services,
pricing, distribution, research and opportunities analysis. Furthermore, marketing will help
Mamee-Double Decker to anticipating customers needs, wants and preferences that fulfilling
the desired. So, by having this, Mamee-Double Decker has no problem on acceptance or
adaptation of their products to the locality.

8.2 Place
Apart from being the largest snack player in Malaysia, Mamee also actively exports its products
to more than 80 countries, of which the top five in 2010 were Australia, Singapore, Russia, Hong
Kong and Netherlands. Mamees manufacturing facilities are located in five locations in
Malaysia, and one in Myanmar, all of which have ISO:9000s, HACCP and Halal certifications.
Mamee intends to focus on strengthening its distribution network in neighbouring countries such
as Thailand and Indonesia. It is also planning increase advertising and promotional activities to
support sales in these countries.

9.0 Strategic Problem

Snacks and candies producer Mamee Double Decker (M) Berhad found that paper-based
production planning and quality management processes were error-prone, wasteful and
relatively slow. To maximize efficiency and manufacturing throughput, the company wanted to
introduce the latest edition of SAP ERP and implement new components but the existing
infrastructure was not capable of supporting the expanded workload. The company needed
a trusted advisor to help them integrate their systems more fully

Mamee engaged with IBM Global Business Services to roll out new SAP functionality, most
importantly SAP ERP production planning, to link up the manufacturing plants and their
beverages arm. In phase two, IBM also helped the company implement costing and quality
management components, roll out SAP ERP to the beverages plant in Kuantan, and implement
SAP NetWeaver Business Warehouse.

10.0 Strategic Analysis and Alternative

Based on the organizations internal, external and current environmental conditions of Mamee,
we proposed three (3) options on which their organization can consider to opt for their future
strategies. The strategies are product line extension, joint venture and acquisition.
10.1 Product line extension
Basically one of the strategic options that is appropriate for Mamee to implement in order for a
better growth is to extend its product line. Basically , a product line is a group of products that
are closely related because they function in a similar manner and are sold to the same customer
groups , are marketed through the same types of outlet and also fall within a given price range .
For example Mamee Double Decker offers various kinds of snacks ranging from Mr Potato ,
Mamee Monster and etc.

Basically , the managers of Mamee should analyze their product lines periodically in order to
assess each items sales and profits in order to understand how each item would contribute to
the lines overall performance. Company should also take in consideration in terms of its
objectives and resources available . Mamee can expand its product line by line filling or line
stretching . Line filling involves adding more items within the present range of line . Basically ,
the reasons for this move is in order to reach for extra profits and satisfying dealers and also
encourage the company to use its excess capacity. An example of line filling is that Mamee has
increase in product variety of Mr potato ranging from Mr potato Casava chips , Mr potato
Mexican Wave and also Mr Potato Rice Crisps. Basically those items falls within the same price

range but it is noticeably different .

Product Line Stretching occurs when the company lengthens its product line beyond its current
range . Company can stretch line downwards , upwards or both ways . It can stretch downwards
in order to form a market hole or otherwise attracting new competitors . Low end products can
be added in order to find for a faster growth in the low segments. During the past , Mamee had
been producing various snacks and beverages but right now they are releasing products that
are healthier approach such as Nutrigen , Fruit Nation and also Mr Potato Rice Crisps that
is 20 % lower in fats and also cholesterol free.

As a whole , in order to sustain growth and increase its market share value . Mamee can
extend its product line by releasing with more range of healthy beverages and snacks that are
low in trans fats and cholesterol free as globalization during this era has lead to many
consumers being more health conscious . No doubt , organic products are being very common
nowadays among consumers . As to fit in this general environment , Mamee could utilized this
opportunity by producing Potato Chips that are made of organic potatoes . Mamee should
consider producing beverages and juices that are made of organic fruits and etc .

Basically for every action , there definitely a cost to consider . In order to implement a strategy
such as to extend a product line , Cost , Time , and Capacity should be put into consideration. In
our opinion , it is a must for Mamee Double Decker to cough up certain amount of cost for the
purchase of new technology/equipment and also RND. Newer equipments and better research
and development would anticipate the company in producing better extended products and thus
leading to high customer value and satisfaction . Once customers value and satisfaction are
met , excess purchase and demand would lead to a higher revenue that would lead the
company to a break-even cost in the investments on RND , new equipment , marketing
campaigns, advertising and etc. In the long run of the product growth , profit gains would lead
to a better company growth.

Basically the time frame in implementing this strategy would not be that long as company would
just have to acquire better equipments and technology and also newer supplies for the extended
products . In the short term company would have to also develop a good marketing and
advertising campaign in order to reach for the customers regarding the new product released.
More or less , the company would have to undergo and open tender in order to attain the best
supplies of raw material and new equipment/technology at its best price.

Cost - Purchase of Equipment , Research and Development , New supplies , Advertising of new

products , Marketing and Promotions.

Cost are assumed to be slightly costly but somehow , Returns on investments(ROI) are able to
breakeven the costs if the product could gain high customers satisfaction.
Time Frame -Takes a short time to implement as company would just have to search for newer
equipments and supplies , the RND department would work in order to make a slight
modification in the products . Marketing efforts would be run in the short term in order to reach
for customers and also for promotional reasons.

Besides , theres an exception . It would take slightly longer period of time for the company to
create a new product line instead of stretching it . For e.g it would take a shorter time for Mamee
to release a new range of snacks that falls in the same product line but a longer time would be
taken if Mamee were to try to develop a new Healthy Cereal Product which they are not familiar
with yet.
Capacity -Mamee exports to more than 80 countries, making them widely accessible to target
markets. Mamee is optimist that they will 5 folds in the 5 year plan through the implementation
of various growth strategies which was with full support of the Group's staffs, including
enhancing their distribution channel locally and
overseas, developing and launching new products, as well as undertaking
marketing efforts to build their brands

Hence, this would enable new product line to be distributed and exported easily . Presence of
accessible market allows product to meet its customers easily.

10.2 Joint Venture

Joint venture is the cooperation of two or more individuals or businesses in which each agrees
to share profit, loss and control in a specific enterprise. Besides of that, it is to share some of
their resources and capabilities to develop a competitive advantage. It can also involve any type
of business transaction and the person involves can be individuals, groups of individual,
companies, or corporations.
Mamee-Double Decker Bhd should joint venture with organization which is doing the healthy
product. This is because different organization has different knowledge about the healthy, it can
improve and innovation the product and attract more different background of customers.

The advantages of joint venture are to provide the companies with the opportunities to gain new
capacity and expertise. Joint venture is also allowing the company to enter related business or
geographic markets or gain new technological knowledge. Besides of that, it is sharing of risks
with a venture partner and access to greater resources, including specialised staff and
technology. Moreover, joint ventures can be also flexible. For example, joint venture can have a

limited life span and only cover part of what you do, thus limiting both your commitment and the
business exposure.

This is why Mamee-Double Decker Bhd should joint venture with any other relating
organization. This is also the reason and it can improve the weaknesses such as lack of
promotion, sales decline due to high market share and customer awareness. In addition, joint
venture also can have few opportunities to make the industry trend upward, penetrate new
market and established local taste and distribution channel. Furthermore, joint venture is kind of
sharing of risk and cost with a partner.

Cost Share the same cost with the partner

Timeframe Limited to a specific time frame.
Capacity Help to further optimize the manufacturing network, and increase production capacity
and satisfy rapidly growing demand.

10.3 Acquisition
Acquisition is a firms strategy of buying another firms shares in order to have a total control of
the buyout firm or with the intent of making the acquired firm a subsidiary business within its
portfolio. There are many reasons for acquisitions which bring along advantages and
disadvantages towards it. Some advantages of acquisition includes the increase in the acquirer
market power, ability to overcome entry barriers for new upcoming firms, reduced cost of new
product development and also increased speed of earning profitable return. However,
acquisition alone is not the ultimate strategy that every firm should pursue. Research shows that
some 60 percent of acquisition strategy produces disappointing results and some which end up
with failures. The reason behind it is partly because of integration difficulties which includes
resource sharing, different working culture and ineffective vertical and horizontal chain
management. Apart from that, the large debt that a target firm withheld can serve the acquiring
firm with big liabilities and also possible bankruptcy. Acquiring firms may also face difficulties in
achieving synergy within working units. If there is no synergy within a firm, it is likely the
employees overturn is high.

On 6th June 2008, Mamee Double-Decker (Mamee) announced that it had acquired 100
percent of equity interest of Charmille Private Limited for $3.3 million by Rosedale Investment
Private Limited. Rosedale Investment Private Limited is a wholly owned subsidiary of Mamee.

From this acquisition, Mamee obtained 10000 hectares of land. The land will allow Mamee to
invest in assets such as factories, plantations, R&D facilities and also leasing revenues. Besides
that, the acquisition of land from Charmille allows them to save thousands of dollars in terms of
property taxes, agreement fees and such.

Apart from that, the board of directors (BOD) were also pleased to announce earnings, net
assets, gearing, share capital and substantial shareholders' shareholding of the Company has
increased by 60 percent. This simply means that their capital and marketing power is now
greater. All supply chain under Charmille now will have new sets of agreement which put them
under Mamees supply chain management. In simpler words, former Charmille supply chain is
now working for Mamee.

Charmille Pte Ltd. is a subsidiary firm of Golden Seed Holding Company also a snack and
beverage company like Mamee. With the acquisition of the subsidiary firm of a competitor,
Mamee has proven its dominance within its industry by acquiring its rivals before they became a
threat to Mamee. Hence for Mamee, this acquisition also serves as a purpose to establish its
brand positioning in the customers perspective. Thus, whenever Malaysians ought to think of
snacks, they will think of Mamee.

In order to understand if Mamees acquisition strategy will serve them better for the long run, it
is important to measure 3 factors which is the cost, the timeframe and the capacity of its
operation.

Cost Mamee just made a 50% Mamee dividend payout ratio policy. Mamee had financial
assets more than RM100 million in 2011
Share price went up. A stock now (as of June 2010) cost RM 4.39
To fund the capital expenditure, the group may need to incur higher bank borrowings and this
may result in higher borrowing costs which will then affect the dividend payment capability of
Mamee in the immediate term
Timeframe 5 years plan starting from 2010
The privatisation plan may take about 6 months time
Capacity Mamee is undergoing a capital reduction and repayment exercise under Section 64
of the Companies Act, 1965
Mamee BOD members were concerned about the trend of increasing raw material prices as
well as the foreign exchange volatility amidst the uncertain economic environment.
Mamee exports to more than 80 countries, making them widely accessible to target markets.
Mamee is optimist that they will 5 folds in the 5 year plan through the implementation of various
growth strategies which was with full support of the Group's staffs, including enhancing their
distribution channel locally and
overseas, developing and launching new products, as well as undertaking
marketing efforts to build their brands

11.0 Recommendation

If we looked at Mamees history, they did all strategies mentioned above, and have been
successful in maintaining the happiness of their stakeholders of BOD members, suppliers and
also their customers. However, the one strategy that Mamee has yet to implement is joint
venturing with another company. The many benefits of joint venture have been highlighted
above. From any joint venturing, Mamee would definitely be able or in fact is a must for them to
extend their product line.

A company which is likely to have a strategic partnership with Mamee can be any company at
all since a joint venture always opens new market opportunities. And on top of it, Mamee has its
own investment company which is the Pacific United Group Venture Limited. Pacific United has
been sealing deals for Mamee including the recent acquisition of Charmille. If Mamee were to
consider a joint-venture with another company, they could do so thru Pacific Group, and the
best company for the joint venturing is non-other than Yakult Japan.

The recommendation of joint venture with Yakult Honsha Limited has been our highest
recommendation after much deliberation on the path that Mamee has started to undertake
following their product line extension of healthy drinks, including Nutrigen Liteyo and IQ3. With
more than 75 years of research which initially was meant to treat contagious disease from World
War II, the production and sales of Yakult has reach nationwide of 32 countries.

Yakult strengths include a number of core competencies on which Mamee can utilize or set to
exploit if the joint venturing plan is executed. First of all, Yakult is already an established name
which pioneered the probiotic health drink. A probiotic health drink is a cultured drink filled with
over 30 billion Shirota strain that helps to improve intestinal environment. With such expertise
and knowledge, Mamee will save much cost on doing research and developments on its healthy
products. Mamee can capitalize and further enhance the market for its Nutrigen and IQ3
product. They could also come up with a new product line if they wish so.

Besides that, all members of Yakult group has their own working culture named Shirota-ism,
which strive for the ideas of preventive medicine, longer life and committed to provide products
at affordable prices. For all this, Yakult has been working with the leading scientists in Japan
and Europe for more than 30 years. Mamee on the other hand could use this opportunity to
expand its networking in terms of drugs and health field or even marketing field in Europe.
Yakult has penetrated the market of more than 32 countries of which most of them are

European nations. Whilst Mamee has been championing the South East Asian and Australian
region market in food industry, Mamee has yet to set a firm ground in Europe. This is because
the barrier of entry and stiff competition from the existing competitors in Europe itself. However,
if Mamee and Yakult have a joint venture, both of them will be able to reach even broader
customer segment and each company will have opportunity to promote their brand and products
to each other customers.

The joint venture of Yakult and Mamee also serve to benefit Yakult too. Yakult has been facing
difficulties in acquiring land assets to set up factories, laboratories, and plantation for
themselves. However, Mamee, with the acquisition of certain companies in Indonesia especially
in Kalimantan through a couple of basic agreement (BA), have been able to acquire thousands
of hectares of land thru investments of RM20 million. The land are meant for palm oil plantation,
however Yakult should be able to use some of the land as their own under leasing terms.

12.0 Bibliography

1.
http://announcements.bursamalaysia.com/EDMS/subweb.nsf/7f04516f8098680348256c6f0017a
6bf/1807ef878dc83ffe48256e9f00164ead/$FILE/Mamee-ChairmanStatement%20IV
%20(965KB).pdf
2. http://www.investlah.com/forum/index.php?topic=10605.0
3. http://www.jpvpk.gov.my/html/news/archives/Malay/Jul06%2024b.htm
4.
http://announcements.bursamalaysia.com/EDMS/subweb.nsf/7f04516f8098680348256c6f0017a
6bf/47b59d19df8fdea9482578a3000ad6ba/$FILE/MAMEE-Page%2026%20to%20ProxyForm
%20(2.1MB).pdf
5.
http://announcements.bursamalaysia.com/EDMS/subweb.nsf/7f04516f8098680348256c6f0017a
6bf/9433bce9e37a1611482575ae000e8119/$FILE/MAMEE-Page%2013%20to%20ProxyForm
%20(3.2MB).pdf
6. http://www.iss-consulting.com/pdf/Success%20Stories/Mamee%20Double%20Decker
%20Success%20Story.pdf
7. http://www.theedgemalaysia.com/in-the-financial-daily/165178-mamee-aims-to-outperforminfy10.html
8. http://www-01.ibm.com/software/success/cssdb.nsf/CS/STRD-8H7D57?
OpenDocument&Site=default&cty=en_us
9. http://www03.ibm.com/systems/resources/systems_express_casestudies_Mamee_Double_Decker.pdf
10.

http://announcements.bursamalaysia.com/EDMS/subweb.nsf/7f04516f8098680348256c6f0017a
6bf/1807ef878dc83ffe48256e9f00164ead/$FILE/Mamee-ChairmanStatement%20II
%20(950KB).pdf
11. http://investor.net.my/pdf/5282_Mamee_4Q09_PR_Final_100224.pdf
12. http://www.scribd.com/doc/38018015/22/Brands-Major-Products-and-Services
13. http://www.rpemery.com/articles/advantages_and_disadvantages_jv.htm
14. http://www.healthguru.sg/learn-about-food/nutrition-info-mamee-monster-noodle-snack/
15. http://www.hdcglobal.com/publisher/bhi_halal_agencies
16. www.daganghalal.com
17. www.mamee.com
18. http://www.healthguru.sg/
19. 2010_food_beverage_and_consumer_products_industry.pdf
20. http://www.mamee.com/Mamee_Newsletter_Aug_07_-_Draft_5.pdf

Mamee Double-Decker, better known simply as MAMEE is a Malaysian based company with
interests in the manufacturing, marketing and distribution of snack foods, beverages, and other
products, that exports to around 100 international country's, under the slogan "A World of Good
Taste" and is very popular in Australasian areas like Singapore, Indonesia and Australia. As of 2015
the company headquarters is in the Air Keroh Industrial Estate in Malacca, Malaysia and it has an
office in Subang, Selangor in Greater Kuala Lumpur.[1] As of 2008, it has its registered office in City
Plaza in Johor Bahru.[2] It distributes the Mister Potato and Mamee Noodles brands.
he company was founded by Datuk Pang Chin Hin in 1971, who also serves as the company's
Executive Chairman.[3] Mamee was incorporated on 3 August 1991 and was listed on the Kuala
Lumpur Stock Exchange's main board on 18 March 1992.[4] Mamee-Double Decker was delisted
from Bursa Malaysia on 9 January 2012.[5]

MAMEE-Double Decker (M) Sdn Bhd was founded in 1971, and has since established itself as a
household name for food and beverage serving over 50 products, including favourites such as
MAMEE Monster snack, Mister Potato Chips, and MAMEE Chef. These products are exported to
over 100 countries around the globe, and to keep up with the high demand, production has also
reached across international borders as well.
MAMEE-Double Decker has set up manufacturing facilities in Myanmar and Indonesia in addition to
our production location here in Malaysia. All facilities have been awarded ISO 9000s, HACCP and
Halal certifications. Dedication to the industry has led MAMEE-Double Decker to win the Frost &
Sullivan Award for Best Home-Grown Packaged Food Company (2013 & 2014), and a Putra Brand
Award under the Foodstuff Category (2014). Last but not least, MAMEE Chef has been rated in the
Top Ten Instant Noodle category consistently by the Ramen Rater (www.theramenrater.com)