Sheng Siong: An Essay on Company Introduction

Introduction of the company (sheng siong )

provide PESTEL ( Political , Economic , Social , Technological , Environment , Legal ) analysis,  including all factor

Porter's five forces analysis of the company competitive environment

Recommendation to avoid problem uncovered from the porter's or PESTEL analysis

provide a general conclusion of the current status states of the company and its operating environment.

Sheng Siong is one the biggest retailer chain in Singapore which is part of Sheng Siong group Ltd. It was established in 1985 with focus on groceries, “dry” as well as “wet” food items, household products, packaged food items, meat, fruits, vegetables, etc. It acts as a one stop shop for the shoppers looking for convenient shopping option of their groceries. With 400+ products in its portfolio, it is established across 40 locations in Singapore. It was listed on Singapore exchange in 2011 and over time it has introduced around 10 house brands too in its portfolio. Being third largest chain of supermarket in Singapore after NTUC and Giant (DFI group) it is competing not just against these brick and mortar stores but also the upcoming e-commerce players. The company’s vision and mission focus on high quality service at low prices. Unlike its peers its focus is not on providing different goods but on providing goods at low prices. (Lee, E. and Ang, S., 2013). Look at figure 1, which talks about how the company is placed as compared to its competitors in low cost segment but with industry wide product range.

The company has been expanding since inception and is keen on expanding further by looking for more retail spaces to increase its presence in the country. It has been reporting good financial performance which has kept the sentiments pretty positive on their stock.

PESTEL framework

It is a tool of relevance that helps us understand the environment in which organization is operating in better with major focus on the country of operations. Our focus would be onn Singapore, the country of operations of Sheng Siong.

Political Aspect

For an organization politics of the country it is operating in plays a big role in smoothness of its operations. The intervention of Government of the country is an area of concern as that decides how the companies are controlled and are affected. Singapore is a stable company and democratic in nature with very low political risk. But recently some laws have come up which restricts the Non-Singapore people hiring and has led to increase in the labour cost at Sheng Siong and other rivals. All suppliers need to adhere to regulations of import and export. Government is providing subsidy to e-commerce activities in the form of direct subsidy and fiscal incentives like eBusiness industry development scheme. It will strengthen adoption of e-Business also help in increasing electronic transactions among businesses in Singapore. (Tong, Y., 2016)

Economic Aspect

Economics of a country like how GDP is progressing, spending power of population, inflation rates, foreign currency and domestic currency movements tell about health of the country on population of which the demand of business depends upon. Singapore is a booming economy with government’s focus moving towards diversification. But the business model depends on Brick and Mortar stores which need big investment in space as well as labour. Hence, Sheng Siong’s model and sustainability will be determined by these parameters of hikes in the land and labour cost.