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Kossan Rubber Industries Berhad: Stretching to its Maximum Potential through an Expansion Strategy
內容大綱
Kossan is a publicly listed company in Malaysia that produces rubber gloves for industrial, medical and household uses. The industry is oligopolistic and the products are basically homogenous. Thus far, its competitive strategy has relied on low cost, low profit margin, and high volume production. This cost-based competitive industry, as a whole, has been growing at 6-8% per annum and the industry prospect seems promising. In February 2016, the issues facing the company were about its expansion plan and future competitive strategy. Kossan's top management needed to address these concerns: -Should Kossan invest in the expansion plan, amidst similar expansion by its competitors and therefore, potential over-supply scenario in the market? -What should be the product mix of Kossan, given the changes in market demand and competitors' production? -Given the homogenous products and possible expansion by competitors, what were possible strategic options for Kossan to consider to prepare itself for a potential over-supply? -Given that the US market is one of its largest markets, the company also worried about the rising Trump's protectionist sentiment, although it was not certain if and by how much the rubber gloves industry would be affected.