NTUC Fair Price Company Analysis

Challenges in Online Retailing Business

Discuss about the NTUC Fair Price Company Analysis.

Internet has resulted an overhaul to everyday activities in almost every sector in the economy (Laudon, 2016). In both retail and wholesale sector, investors are forced to adopt the current technologies in ensuring they remain relevant in the market. Companies such as Amazon, Peapod, eBay and NTUC Fair Price have realized and discovered this secret and they have revamped to online platforms for massive and easier sales as compared to customers physically attending their stores. Through developing websites, applications and incorporation of other robust technological features especially in packaging, storing as well as ensuring the products remain fresh throughout (Llana et al, 2017). These companies have reaped vastly from these innovations for a while as more and more companies venture into the online retailing business.

NTUC Fair Price is one of the largest supermarket chain store in Singapore that enjoys largest economies of scale from its sales (Pangarkar, 2018). It started years ago through collaborative efforts by labor unions. In a bid to remain relevant in this sector, the management of this chain have incorporated innovative ideas into its operations. Most of these ideas revolve around lining up the company with the current trends in the world; going online. The company has its own website, online shopping application as well as an integrated computer system for its warehousing operations to ensure efficient storage of goods in compressed storages. In this paper, we will analyze the problems that NTUC Fair Price faces in this online retailing business, offer some possible solutions to them as well as use business scorecards to offer ideas on how to make it more efficient in its operations.

NTUC FairPrice Company has its foundations well built in Singapore market (Crawford, 2017). For sustainability, the company needs to create value for the customer through different essential business operations management components. Business is dynamic and companies need to regularly make updates on their operation components. In ensuring these, some of the key components may include having a vivid, clear and a concise vision statement, have strategic plans for operations, making reasonable budgeting, adopting honest metrics as well as ensuring speedy execution of roles and plans for the organization. As part of its operations in Singapore, NTUC has all these measures and components in place and they continually reap benefits from having high customer value. In addition to these, NTUC has ensured regular supply of commodities for its customers, efficiency in production and delivery, offering high quality goods through quality control and ensuring availability and reliability of goods and services.

Possible Solutions

A clear vision statement unites all employees in an organization towards a higher goal. Large organizations have vivid vision statements that inspire their teams to work towards achieving the purpose (Smith, 2015). A bold vision statement is the starting point of everything in a firm. For an effective vision statement, it must be accompanied by clear guidelines, expected behaviors as well as values for the statement to drive the organization towards excellence. NTUC Fair Price’s vision is to be Singapore’s leading world-class retailer with a heart. It aims at offering quality products, excellent service, become the most preferred employer and serve all the needs of a common Singaporean and the entire community. To ensure that the whole organization abides to this statement, the company has safety measures for its products as it checks on their qualities before releasing them for consumption by the customers. All goods are of robust standards, its facilities regularly audited and ensures that its products advocate for healthier eating to ensure its hearty retailer promise to its customers.  The company sells products that are transfat-free as it mediates with its suppliers to use transfat0free ingredients. In relation to this, the company has received awards for selling healthy cooking oil and other household products that demonstrate its social responsibility its dedication to care for its customers.

Having a strategic planning for your customers is essential to any organization that aims at improving and retaining its quality customer value (Tomczak, 2018). It defines the ‘how’ in a business vision as it provides a clear mapping of the organization’s vision. The plan should offer solutions to the weaknesses of the organization as well as define some of its strengths in combating issues relating to vision achievement. The strategic plan should be timely, clear and concise on measures to be undertaken in order to achieve the set targets.

Normally, any organization aims at having higher customer base and offer satisfaction to their needs (Hill, 2017). Easily understood guidelines by all employees in any firm assure high customer satisfaction and this correlates with any company’s intentions of developing higher customer value. NTUC Fair Price takes all these into considerations. The company has a large base of policies, standards as well as charters that ensures correspondence by all employees. These policies are all aimed at ensuring effective services, reliability and high quality products thus preserving their brand. It has also partnered with companies such as Nestle in offering free breakfast to families as well as Abbott in distributing bags to needy families. In ensuring that the organization retains its relations with the community, whose people are their customers, the company has adopted four great pillars that are aimed at directly or indirectly creating a higher customer value namely; sustainable environment, wonderful workplace, community care and responsible retailing.

Business Scorecards for Efficiency

Singapore market is huge and therefore hyper and supermarkets are ever in competition to outdo each other in having and retaining the largest customer base. NTUC Fair Price supermarket chain takes pride in being the largest in the entire country (Doan, 2016). This does not however offer a smooth opportunity to face no competition. Amazon, Prime and Paragon supermarkets also possess their share of the same market. Are associated to the large customer base of this huge super chain. From customers themselves, NTUC Fair Price supermarkets offer high quality products and in particular, fresh foods. Goods are perfectly arranged in good layout and therefore customers spend little time looking for items they need. The supermarket has everything neatly shelved in their spacious layout thus cutting down wasted time looking for these products. In addition, it has the freshest vegetables, fish and meat. In ensuring sustainable environment, the supermarket has campaigns aimed at ensuring customers carry their own bags every Wednesday to reduce the effects of plastic bags. Lastly, customers prefers shopping at NTUC as they not only offer fresh items but also organic foods along other customer friendly offers such as discounts and low prices as well (Heng, 2018).

The variety, volume, variation a swell as visibility of products and raw materials of the entire organization will be affected. Going hybrid will necessitate larger volume of goods and raw materials for certain products. In turn, it will take time before returns substantiate and exceed the cost of production and delivery. To ensure they obtain and sustain customers, NTUC will be forced to be more flexible and offer varieties than the rest using low costs. The organization will have to incur costs in training employees who will be responsible for dealing with the customers to ensure high visibility.

NTUC Fair Price is perhaps one of the largest supermarket in Singapore with more than a hundred and thirty outlets. In as much as it enjoys huge profits from a set of its advantages that it reaps from the large customer base, the organization faces a number of problems. Most of these problems have been redefined through the decision of the company to venture online retailing.

In addition, business operational management must ensure constant supply of primary data (Mamic, 2017). For manufacturing companies, they have to ensure constant supply of raw materials. The supply of these primary data should be dependable for any organization. Efficiency should also be among the components for effective operational management. It ranges from how supply chains are organized to the way distribution channels are coordinated. NTUC Fair Price ensures total dependability of its suppliers who are paid on time and engaged in making decisions (Potluri, 2017). They also engage in ensuring that suppliers offer products with low fat contents as well as ensure they use ingredients with low fat content for the sake of their customers. This has seen the organization receive awards for being the best in offering high customer value products. Most of the outlets belonging to NTUC Fair Price run for all hours. This ensures reliability of the organization as well as improves its efficiency in handling customers at all times of the day.

Vision Statement

Currently, NTUC Fair Price caters for approximately three thousand orders a day (Prakash, 2014). Compared to other huge retailers such as Amazon, this is such a small proportion for the big supermarket. Amazon makes thirty five orders a second transforming to more than a million orders a day. Considering that Singapore has one of the fastest internet connectivity, NTUC Fair Price has little to blame on its low turnovers in a day. However, it faces some huge issues that contribute to its low sales.

Firstly, NTUC Fair Price earns less from its online sales as it has to ensure low prices for the commodities offered with inclusion of delivery prices accompanied (Kwon, 2018). In reality, offering online services is expected to have huge returns for any company but this is overrated. Online shopping includes having a team of staff handling deliveries who are expected to be paid from the company’s profits. This does not take into account that customers prefer online sellers that do not charge delivery fees. Therefore, companies end up making less profits from these online services.

Secondly, NTUC Fair Price is likely to face a problem of handling online shopping and deliveries of perishable products (Gee, 2016). These products may go bad easily even before deliveries are made. In Singapore, NTUC is famously known for organic products, groceries, perishable products as well as other commodities highly consumed by the Singaporean population. Online shopping by consumers at the comfort of their homes is limited to non-perishable products. It is hard for Fair Price to deliver these products to their consumers since they may go bad easily during transportation.

Also, NTUC faces stiff competition from other online retailers (Wirtz, 2016). In Singapore, there are more than twenty online retailers stiffly competing with Fair Price over its population. Therefore, it has to ensure incorporation of innovative ideas that outmatch their competitors. To do this, they are tasked with great challenges as they have to stand unique, charge relatively low prices while still maintaining their profit margins or even scaling them higher.

In its latest advance of going online, NTUC Fair Price will also face the management problem. In its model, it will require a new set of team that will be tasked with the responsibility of managing the online platform, handling complaints, demands as well as being in charge of ensuring complete customer satisfaction from their online services. The tem will attract salaries, rebates and other charges that will hardly be met by these online profits. The structural structure of the organization will also be disoriented as a manager will have to be appointed to spearhead the department. Venturing into online retailing will therefore attract NTUC Fair Price numerous problems as well as reap it some benefits.

Strategic Planning

In going hybrid, NTUC will face numerous problems associated to online buying and selling of commodities. To solve them effectively, they will need clear and concise plans at combating them effectively. For this to be done efficiently, the organization will require root definitions, CATWOE, and ‘AS IS’ and ‘TO BE’ business process plans (Hindle, 2017).

C	Customers	The people benefiting from the online services
A	Actors	People responsible for offering services such as supplies.
T	Transformation Process	Converting the inputs to output
W	Weltanschauung	Making the services more meaningful and acceptable
O	Owners	Responsible for running the business services
E	Environmental Constraints	Outside factors that may affect the operations of the organization e.g. competition.

Root definition names the particular system that supports the transformations in a business set-up (Roome, 2016). In NTUC case, the management needs to define the exact problems that they speculate to face as they go hybrid. In a day, NTUC Fair price makes three thousand orders. Comparing this to a million orders a day that Amazon has or Alibaba, Fair Price has a major problem facing it regardless of having over four hundred thousand subscribers to its online platform. This is the main problem that NTUC should intend to focus on increasing its sales in a day.

As per this year, Fair Price has continued to enjoy numerous benefits associated to large economies of scale. These profits have not however reflected in the online platform. In as much as it is continually making huge profits, the supermarket chain requires to adopt measures that will certainly cause an overhaul in its operations, profit margins as well as customer satisfaction. To achieve this, there will be the need to introduce changes in management models, incorporation of new structural systems as well as rescheduling of roles in the organization.

Also, the issue of prices of commodities to ensure it reaps profits even after paying for the delivery of commodities should be addressed. Most customers prefer shopping from online stores that offer frees shopping in addition to low prices (Wang, 2015). In ensuring that Fair Price still benefits from the price modifications, they should adopt measures aimed at reducing their transport, handling and storage costs.

The supermarket chain also needs to come up with technological means of regularly checking up on perishable commodities even before they get bad (Heizer, 2016). Perishable commodities need regular checking to ensure they remain fresh and edible to consumers without cases of poisoning. Delivery trucks or modes for these items also need modifications to ensure they are fresh and intact during delivery. Lastly, NTUC ought to consider stocking their online platforms with vast varieties of products as well as services as Amazon has done to maximize on their sales.

In solving these already identified issues, NTUC needs to adopt certain measures, incorporate changes as well as cause an overhaul in some of its operations. In increasing its sales from three thousands a day to more, it needs to increase its staff training hours from twenty five annually to more than that. Learning and growth are two correlated issues that go hand in hand. Ensuring the staff handling these online platforms are skilled will result in increased customer satisfaction from shopping with Fair Price (Richards, 2017). The staff will be well equipped with necessary skills to be in hand with the competitive advantage over the industry.

Customer Care and High Quality Products

In addition, NTUC Fair Price should evaluate the way its products are manufactured (Chew, 2016). Having control over these management will offer the organization a chance to track any shortages and wastes to ensure maximum customer satisfaction due to reduced prices and enhanced customer services. NTUC has made tremendous achievements over the last few years. The financial position of the company is and has been stable over the last few years. The company continues to leap numerous profits from its partnership deals as well as from its vast network and customer base that it enjoys in Singapore and in markets abroad. In using the balanced scorecard to measure performance of NTUC Fair price, it is evident that the organization has made efforts to ensure that it accomplishes sits targets as well as meets it set standards. A business scorecard has four main perspectives that are addresses in details; financial perspective, customer perspective, internal process perspective and finally learning and growth perspective (Sánchez, 2015).

Financial perspective	Application in NTUC situation
In most organizations, money is the first motive. In particular, almost all profit oriented institutions are concerned with the amount of revenue and profit to be reaped from any investment of model change.	NTUC Fair Price is similar. Almost all their models are aimed at being the leading supermarket chain in Singapore as well as outdo all other players in the sector in profit making. Despite having Paragon and Prime as well as Amazon as their competitors, they are still able to award a hundred and seven million dollars as dividends to their shareholders depicting their large financial base.

Customer perspective	Fair Price Scorecard
Every business is aimed at having, attracting and sustaining customers.  The objectives of any firm must revolved around having higher customer satisfaction rate, have higher market share of customers as well as ensure they are well aware of their brands.	NTUC Fair Price takes pride in being the most popular supermarket chain in Singapore (Ling, 2017). The chain ensures constant advertising to ensure awareness as it strives to maintain their high customer base.

Internal process perspective	Scorecard as per NTUC
This aims at the requirements that are necessary to ensure customers are satisfied and the process of ensuring the smoothness of operation is achieved.  It aims at capacity utilization. Quality optimization as well as process improvements.	NTUC regularly launces new products tailored for their customers almost every year. Since its conception, the chain has been making improvements in its operations at the same time maximizing their output while utilizing their capacities maximally.

Learning and growth perspective	Fair Price Scorecard
In any firm’s scorecard, the learning and growth perspective focuses on human capital and their skills, the information levels, organizational capital, that focuses on culture and teamwork and alignment of staffs.	NTUC Fair Price has its own college where all of their employees attend at least twenty hours of training every year (Chew, 2017). This ensures richness in information capital as well as boosts the skills of the staff in handling customers.

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