Part 1 E- Business usage in sports retailer between Al-Ikhsan Sports Sdn Bhd from Malaysia and JJB Sports Plc from UK.

2011

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Literature Review Al-Ikhsan sdn bhd

Al-Ikhsan is one of the famous brick and mortar that transform to brick and clicks business in Malaysia. The Company started as a single sole proprietorship and each new store that was opened was individually registered as sole proprietorships also. Later on, for tax and administrative purposes, a Private Limited Company, Al-Ikhsan Sports Sdn Bhd was set up. Today, the name Al-Ikhsan is synonymous with football. In 1993, Al-Ikhsan Sports was formed with a single store in Holiday Plaza, Johor Bahru. Initially, the business started off as a general sportswear outlet. As the business grew, En Ali found that there was a demand for specialty shops, dealing in soccer, basketball and other sports. As a result, he began to set up stores catering to these niche markets. It has since grown to 61 stores in every country within Peninsular Malaysia.

The main activities of Al-Ikhsan are stores or retails activities. First it increase the ROI by identify non-moving stock across the chain, transfer them to where they are selling and/or return them. Also, identify and return non-moving stock at purchase value to avoid any loss on non-moving stock return. Such effective stock transfers coupled with purchase returns increase the ROI. Next, it lower the inventory investment by consolidated view of inventory including the need at each point of sale facilitates optimum inventory at each point of sale. Also ensures that stock can be transferred to the point of sale at short notice.

They also lower pilferage by continuous stock audit based on ABC

classification of items instead of periodic full stock verification helps to identify mismatch between physical stock & system stock early. Such continuous stock audit helps lower pilferage. It also made a best purchase as store pool its requirements; the volume of purchase goes up. This allows store better negotiating leverage. Combining this with the analysis of their sales, purchase and inventory data, allows store keeper source products from the cheapest and best. Then they lower the operating cost by optimal utilization of man power, optimal utilization of store space, effective inventory management and leads to lower operating costs. Al – Ikhsan also centralized the financial control

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as store’s business moves to a model of depositing the entire receipts/collections with the HQ and all payments are made from HQ, store get better financial control over its business. The fraud prevention by Real-time / Periodic upload of point of sale data to the HQ prevents any tampering with data at the point of sale. This builds better awareness among point of sale staff and prevents fraud. Subsequently, prevent poor practices from becoming bad habits by audit trail to help HQ know the activities done at the point of sale and identify the poor practices such as stock updating, temporary stock addition etc. Corrective action for such poor practices can be taken by training the personnel at the point of sale. The other activities for Al Ikhsan are they provide discount to customer by making a big sale or promotion in press. They offer a reasonable and appropriate price for all our products that will benefit to all kind of level customers with a better purchasing environment. Al –Ikhsan trained their staff well in their product and technology as well to give a very good service to help customer. Their staff also must have a good knowledge about the product and to assist customer by giving the information about the product. Their concept as customer always right and provide value added service like assistance in purchasing.

AL- Ikhsan products are quality and up to date product. They also

launch new schemes time to time like customer cards, free items on purchasing. For their valued customer, they provide voucher services worth RM50. This voucher enable customer to purchase their product at all Al-Ikhsan’s outlet and it also can be a present. Other than that, they provide information about new products to customers by emails, telephone calls, messages etc. This will help customer to update every single latest product that arrived at Al-Ikhsan.

Others service that they provided for their customer is in choosing appropriate product. Al-Ikhsan often involve in other activities like sponsorship of any mega event. They also choose appropriate distribution channel. They followed the business ethics in terms of customer services. They had directed and supervised employees engaged in sales, inventory-taking, reconciling cash receipts, or in performing services for customers.

Al - Ikhsan also monitor sales activities to ensure that customers receive satisfactory service and quality goods. They have their own brand authorized dealer such as Nike, Adidas Lotto as their supplier. They always ensure their staffs are calibre in customer services by instruct staff on how to handle difficult and complicated sales. The company hire, train, and evaluate personnel in sales or marketing establishments, promoting or firing workers when appropriate. This is to make sure all staff must have good job behaviour and very disciplined.Lastly, their account department have to plan budgets and authorize payments and merchandise returns to make sure company gain profit and to ensure company’s running business very well. As a result, Al-Ikhsan today has expanded aggressively towards the goal to be the biggest sports chain-retailer nationwide. From a single outlet, Al-Ikhsan has learnt to remain competitive in difficult market conditions, while growing pace by pace. It is a major concern for the Government that Bumiputera retailers are a minority in almost all Shopping Malls and well-developed areas as is evident from the fact that Al-Ikhsan has been chosen to be a Nominated Franchiser by the Government, Al-Ikhsan meets all the criteria for a highly successful Bumiputera retailer. Truth is, not many make it, as Bumiputera retailers are perceived to be lacking in retailing skills. Al-Ikhsan is one of the rare breed that should be accorded the highest marks in your selection process. A recent survey by our suppliers showed an astonishing 8 or 9 out of 10 respondents in the soccer industry recognising the name Al-Ikhsan.

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JJB Sports Plc

JJB Sports plc is one of the UK's leading e-business sports retailers. JJB was originally formed in 1971 to acquire the business of a single sports store in Wigan. The original store was established by JJ Broughton in the early 1900s and was then bought by JJ Braddock and then JJ Bradburn. When David Whelan bought the store from John Bradburn he maintained the JJB name. Trading from four stores in 1976, the store portfolio grew to 120 stores in 1994, at which point the Company was floated on the London Stock Exchange. In 1998 JJB Sports acquired the business of Sports Division. The acquisition then made JJB the largest sports retailer in the UK. Since 1998, the Sports Division business has been fully integrated within the JJB group. JJB now operates in most major towns and cities of the UK as well as on the internet and other channels. The product ranges include sports textiles, footwear, replica shirts, equipment, accessories, cycles and golfing products.

The interesting thing about JJB is about their employment which is freely chosen, there is no forced, bonded or involuntary prison labour. Their employees have the right to collective bargaining. They also have a working condition with safe and hygienic. Other than that their living wages are paid, working hours are not excessive, no discrimination is practised and regular employment is provided.

In this E-business, they provided disabled persons should enjoy

equal opportunities within the workplace. JJB take the training and deployment of all colleagues within all the stores in UK and Eire and its Retail Support Centre in Wigan very seriously. The trainers within the group have responsibility for the induction of store personnel in new procedures, and new techniques and processes. Training methods vary from daily job training to weekly training sessions, video training, team briefings; supplier led training and residential training courses.

Shopping online is the most simple, quick and fun way to buy the

latest sports products at JJB sport. Whether customer using a pc, laptop, smart phone or the latest touch screen gadget customer can now shop with them in the comfort of customer own home and when customer on the move. Here at JJB Sports, customer will find the latest

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clothing, footwear, equipment and accessories for sports fans. With their biggest range of products online and exclusive products just for their website, they will soon find out why they are so serious about sport.

When customers are on their homepage customer can browse

their products by selecting a category from their drop-down menus. They could view the latest footwear, clothing, equipment, shop by sport or by brand otherwise click on any banner or image to take to direct to some of their best product ranges. Customer can also shop at www.jjbsports.com anytime, anywhere and any day and with the best sports products online today. They also provided standard delivery from shop to house with delivery charges. All online orders will delivered by Home Delivery Network (HDNL). First customer online order must go to the address of the registered card holder. They also provided online and JJB Sports store for free returns. Others service provided for nearest store by using Store Finder.

Lastly, JJB Sports also provide an affiliate programs to any

customer who wants to join and be an affiliate for the company for making money. They can be part of JJB Sport team in order to market or advertise the JJB Sport product via online or in any website and blog. For the reward, they will get some commission by doing the affiliate program which their payment will transfer directly into their bank’s account. The commission are base on their performance in online marketing or E-Business. They also involve in social media network such as facebook, twitter and Youtube to promote their company.

Accordingly, E-business is one of the famous online businesses nowadays. Even it still a new thing and new comers in this industry, but because of there are so many benefits and advantage rather than the store retails, and it becomes the pioneer in the new technology of this decade. The traditional business (brick and mortar) must look forward to enter into this online business because besides they can promote their product; they also can close with customer and can buy the customer right. This will help company increase their services as long as the quality of their products sales.

Why Al-Ikhsan Sports Sdn Bhd vs JJB Sports Plc? As we can see Al-Ikhsan is only brick and mortar company but they have develop become an brick and clicks company; however they still young in this technology rather than JJB Sports that in early 1994 already have 120 stores while Al-Ikhsan have setup 1 store only in 1993. It is quite hard nowadays to get totally Brick and Mortar Company. Modern lifestyle with an advanced technology, Al-Ikhsan pursuit of measures to be consistent with other well established Sports Company as JJB sports Plc.

BUSINESS STRATEGY

Johnson and Scholes define strategy as follows:

"Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations”.

Strategy at Different Levels of a Business

Any of organisations have their on level strategy for ranging the overall business (or group of businesses) through to individuals working in it. There are divided in 3 categories: -

TOOLS OF BUSINESS STRATEGY

How Strategy is managed? - Strategic Management

Three main components in systematic strategic management process shown in the figure below:

1. Strategic Analysis

To analyse the strength of business position and considerate the crucial of external factors that may influences the position of business. There are a number of tools of analysis could process the strategic analysis, such as:-

2. Strategic Choice

This process is to choose the correct and suitable choice by

Understanding the nature of stakeholder expectations (the "ground rules")

Identifying strategic options Evaluating and selecting strategic options.

3. Strategy Implementation

The tough part for the business strategy is implementation. After all strategy has been analysed and selected, the critical task is then to interpret it into organisational action.

SWOT Analysis

In SWOT Analysis it’s an extremely useful tool for understanding and decision-making for all sorts of situations in business and organizations. SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. The SWOT analysis headings provide a good framework for reviewing strategy, position and direction of a company or business proposition, or any other idea.

SWOT analysis use for business planning, strategic planning, competitor evaluation, marketing, business and product development and research reports. Strengths and Weaknesses are 'mapped' or 'graphed' against Opportunities and Threats. Strengths and Weaknesses are regarded distinctly as internal factors - the situation inside the company or organization that tend to be in the present, whereas Opportunities and Threats are regarded distinctly as the external environment - the situation outside the company or organization when factors tend to be in the future.

Al – Ikhsan SWOT Analysis

JJB Sports SWOT Analysis

Porter's Five Forces

Porter's Five Forces

The second strategy is Porter's Five Forces of Competitive

Position model. It provides a simple perspective for assessing and analysing the competitive strength and position of a corporation or business organization. The porter’s five forces are:-

1. Threat of new market entrants which is entry ease or barriers, to

enter match with the marketplace and routes to the market. 2. Supplier power which is band reputation is the important factor.

3. Substitute which is alternative price and quality of the product

attract more customer and buyers.

4. Buyer power is customer not a consumer. Which is company needs to look at buyer choice needs such as product, services, demands, cost, frequency, JIT schedule etc.

5. Competitive rivalry. This is the strong factor because company have to compete with other companies which is they need to take seriously.

PEST Analysis

The third strategy should be considered is PEST Analysis Template. It is very important that an organization considers its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning this strategy is very useful for brick and mortar and E-business Company. This strategy has 4 factor effect the business, including:-

Political Factor: The political factor has massive impact in the regulation of businesses, the spending power of consumers and other businesses.

Economical Factor: consider the state of a trading economy in the short and long-terms when planning for international marketing.

Social Factor: The cultural and social influences on business vary from country to country.

Technological Factor: Technology is a major driver of globalization and a crucial for competitive advantage.