Introduction

Parkson Holdings Berhad (PHB) was incorporated under the companies Act, 1965 on 26
August 1982 as a private limited liability company under the name of Amalgamated Cement
Mills Sdn Bhd. On 27 August 1988, it changed the name to Amalgamated Containers Sdn Bhd.
It was converted to a public company on 17 August 1992 and assumed its present name on 19
September 2007. PHB was listed on the main market of Bursa Malaysia Securities Berhad on
28 October 1993 the name of Parkson Holdings Berhad has been resolved on 19 September
2007 and it is used until now. Basically, Parkson Holdings Berhad (PHB) is an investment
holding organization and running on business in retailing industry (Rohan, 2017).
Question 1

Parkson started in 1987 with the opening of its first store in Sungai Wang Plaza. Parkson
Holdings Berhad (PHB) was incorporated in August 1982 as a private limited company and
was listed on the main market of Bursa Malaysia Securities Berhad on 28 October 1933, with
over 25 years of experience in the retail industry it is well established recognized name. PHB
has since created Parkson Retail Asia and Parkson Retail group Limited, listed on the Singapore
Stock Exchange respectively. Parkson Retail Asia is currently the arm that oversees and
operated a total of 67 department stores in Malaysia, Vietnam, Indonesia and Myanmar.
Moreover, under the Parkson brand name, it has 43 stores in Malaysia, 9 in Vietnam, in
Indonesia and one in Myanmar. In Indonesia, it additionally has 11 stores under the brand name
of Centro Lifestyle Department Store and a Kem Chicks Supermarket. Parkson Retail Group
Limited is the China retail arm, which made its debut listing on 30 November 2005. It is
currently one of the premier retail operators in china having an extensive network of 60
department stores covering 33 major cities in 22 provinces across China (Basri & Sarif, 2017).
In 2005 Parkson entered in Vietnam through a store at Saigon Tourist plaza Ho Chi Minh City.
Moreover in 2007 Parkson Pavilion flagship store was launched in Malaysia and it was one of
the anchor tenants in Pavilion Kuala Lumpur. After that in 2011 they entered to Indonesia
through acquisition of Centro department store network and in 2012 they were listed on SGX-
ST.

This organization has managed their retail business by opening two listed subsidiaries, which
is Parkson Retail Group Limited and Parkson Retail Asia Limited. These two subsidiaries are
both operating in in various location and nations. As for Parkson Retail Group Limited, it
operates Parkson department stores in China while the other one is operating the retail stores
in Southeast Asia. The stores provide their clients with a range of international brands of
fashion and lifestyle related merchandise that concentrated on around four main classifications.
Those categories are fashion and apparel, cosmetics, accessories, household, electrical,
groceries and perishables.

Parkson’s retail presence in various nations across Asia enables to be in a unique or different
position of understanding the consumption pattern of the diverse customers across various
countries. Parkson’s strong branding and strategic positioning in Asia has empowered to
develop strong relations over the years with regional and international brands. Such a unique
position allows Parkson to continually introduce strong brand and product mix tailored to the
various markets to satisfy the goals of the clients and keep up relevance in each of the nations
(Parkson, 2013).

Parkson established their presence in Myanmar in May 2013, with the opening of first Parkson
store which is in FMI Centre in the Pabedan Township of Yangon. Parkson is venturing into
new grounds in Indonesia with the new stores planned outside of traditional bases in the islands
of Java and Bali. The occupancies for these new stores have been signs and the stores were
opened in 2014 in the towns of Medan and Pekanbaru on the Sumatra Island. In 2015 Parkson
also open stores in the towns of Manado on the Sulawesi Island, and Balikpapan in Kalimantan.

Despite the challenges that Parkson faced this past year, specific in the last quarter it stays
committed to the growth strategy. Parkson will proceed the hard work of improving store
productivity and operating efficiency through continual remodeling and renovating of existing
outlets, upgrading of brand mix and targeted promotional activities. In the meantime, Parkson
remain steadfast to the expansion plans, with ten new stores planned in the next financial year,
to widen the store network across the region. With Parkson’s strategic brand positioning in
Asia it is believed Parkson is well placed to harness the rising consumption growth in this
region.

In January 2016, they have launched Parkson’s first gourmet grocery store FoodPark in the
Maju Junction mall which offers the clients choices of grocery shopping and dining. In may
2016, Parkson opened its first edutainment focus in Maju Junction shopping centre. Which
involves of a theme park, education and nursery centres.
Five Porters

Threat of new entry

The competitors of Parkson can be described into two types which are direct and indirect
competitors. Direct competitors of Parkson are like Isetan and Carrefour while the indirect
competitors of Parkson are like Mydin, Jusco and Tesco. It is hard for competitors to venture
into this business as the barrier of entry is very high. It is high because these businesses have
already been well established in the market place. Other than that, it requires a lot of funding
to start a similar business. Since it has already been established from 1987, the image of the
organization is very strong. Hence it is believed that even though the market is attractive, it is
difficult for the new competitors to venture into the business.

Competitive rivalry
The competition in the market palace can be considered as strong because basically these firms
focus the same group of people which are the high-income ladies. There are several brands like
as Laniege are only accessible in Parkson but not other retailers. It helps the competitiveness
of Parkson towards its competitors. Despite the fact it mainly targets the high-income ladies, it
does not give up on other target markets. For example, people can see ‘for her’, for kids, ‘for
him’ and for ‘home’ in Parkson’s website. It demonstrates that it has a lot of target groups, but
it focuses more on ladies as their main clients.

Threat of substitute products or services

Rather than purchasing from Parkson, the customers might change in their taste to try different
products. Other than that, manufacturer normally will offer a lower price product as compare
to Parkson, it may move purchase goods from the manufacturers rather than Parkson. Parkson
essentially are giving a spot with the goal for vendors to do their business in it. Subsequently,
Parkson should always need to know what’s going in the market so that the competitors will
not offer products in low price to attract the vendors from the Parkson to move to their
competitors.

The bargaining power of customers (buyers)

In Parkson it is believed that there are two types of purchasers. One type is the vendors because
they are leasing place of Parkson to begin their business. The other types of purchasers are the
normal shoppers. In Parkson the bargaining power for the customers are low it is because the
prices of all the products are generally non-negotiable or fixed. Beside that for sellers, it is
believed that the better the brand name, the better the bargaining power it is because Parkson
needs famous organisations to add variety in Parkson. Moreover, when big organizations
venturing into Parkson, it will increase the value of Parkson in the eyes of the customers.

The bargaining power of suppliers

The bargaining powers of suppliers are for the merchants as well it is because the goods of
Parkson come from them. Accordingly, it identifies with the better brand name, the better
bargaining power for the suppliers as well because the Parkson needs them and vice versa.

Moreover, it is not all vendors are permitted to just venture into Parkson. Parkson will learn
about the organisations first, for example history, financial report, reputation and others first
before permitting a particular organization venturing into it. However, to maintain the brand
name of Parkson, the vast majority of the tenders in Parkson are well established. Therefore,
these tenders will also have strong distribution channel.