You are required to identify an appropriate competitive position that MPH Bookstores should adopt based on the prevailing circumstances: Strategy and Innovation, Case Study, TU, Malaysia

Part A

Case Study (Part A)

MPH Bookstores – Competing within the Retail Book Industry

Overview of MPH

From a humble beginning ashttps://www.malaysiaassignmenthelp.com/case-study-help/ a small bookshop selling general titles, MPH Bookstores has grown to become one of the leading bookstore chains in Malaysia. Currently, the firm operates through 10 physical outlets across Malaysia. Furthermore, MPH has ventured into the digital space by launching their very own e-commerce store in 2000 which has allowed the firm to reach customers in places where they have no physical presence. Since then, their online bookstore has succeeded in delivering the retail experience right to the doorsteps of customers, fulfilling the need for convenience, speed, and efficiency.

Market Landscape

The retail book industry in Malaysia is a dynamic and evolving sector that has witnessed significant changes over the years, including the rise of technological advancements, shifting consumer preferences, and economic factors. The proliferation of e-books and digital reading devices has reshaped the reading habits of Malaysians. Moreover, the shifts in consumer preferences, particularly among younger generations caused by the increasing usage of digital media and social media content, have influenced the reading formats and content in demand.

Furthermore, the industry is a highly competitive environment with both traditional brick-and-mortar bookstores and online retailers vying for market share. This has led to the closure of approximately 95 bookstores and branches of bookstore chains between 2018 and 2023. Some market analysts had attributed the closures to be due to the inability to compete with low-cost business strategies. Others had attributed the closures to the possible shrinking demand for books in general. However, the president of Malaysian Booksellers Association had argued that contrary to widespread perception, the print industry is holding its ground, citing that the annual Kuala Lumpur International Book Fair (KLIBF) visitorship numbers has been increasingly steadily.

Current State of MPH Bookstores

In light of the competitive and dynamic nature of the retail book industry, MPH has faced several setbacks as well. During the Covid-19 pandemic, nine outlets were closed. Since then, more closures have been announced, with the latest closure being their flagship outlet at Mid Valley Megamall after 25 years of operation. In a statement, the company explained that these were a result of its strategy to channel more of its resources towards their e-commerce and digital business division.

Nevertheless, the opening of its new flagship store at The TRX Exchange in 2024 had attracted much praise from its customers, which highlights the strong brand reputation it has built over its long history in Malaysia. It is widely recognized for its commitment to quality books, diverse selection, and excellent customer service. Furthermore, MPH has developed expertise in curating book selections tailored to the preferences and interests of Malaysian readers. Its diverse range of offerings spans various genres, including fiction, non-fiction, academic, children’s books, and local literature. These have all been augmented by customer loyalty programs and initiatives to foster repeat business and enhance customer engagement, which have been expanded to include its e-commerce customers as well.

Strategy Dilemma

While e-commerce was previously thought to be the future of the retail book industry, such perceptions had been voided with the high-profile openings of physical retail outlets by new entrants into the Malaysia market such as Tsutaya Bookstore and Eslite Spectrum Bookstore. Even low-cost retailers such as Book Xcess, who had previously focused more on online retailing, had started opening large physical outlets as well. Hence, MPH’s board of directors are currently rethinking their existing strategic approach of pursuing an e-commerce and digitalized ecosystem. Moreover, they are deliberating whether there are uncontested market spaces that the firm can exploit and potentially venture into as a “Blue Ocean Strategy”.

Bibliography

Birruntha, S. (2024, May 16). New store at TRX Exchange a step towards MPH’s revival. New Straits Times.
https://www.nst.com.my/business/corporate/2024/05/1051427/new-store-trx-exchange-step-towards-mphs-revival
Jalal, M. A. (2024, January 31). Closure of bookstores due to inability to compete, adapt. The Sun.
https://thesun.my/local_news/closure-of-bookstores-due-to-inability-to-compete-adapt-IH12046349
Moey, M. (2020, June 10). MPH Bookstores chain is closing down multiple outlets across Malaysia. AsiaOne.
https://www.asiaone.com/malaysia/mph-bookstores-chain-closing-down-multiple-outlets-across-malaysia

Question 1.A

Work Required: You are required to identify an appropriate competitive position that MPH Bookstores should adopt based on the prevailing circumstances.

Question 2.A

Work Required: You are required to prepare a strategy presentation to MPH Bookstores’ management team to convince them on the optimal business-level strategy to adopt. The presentation should include the following:

1- Based on the competitive position identified in Question 1.A, apply the Value Chain Analysis to identify two business strategies.

2- Next, use the SWOT matrix to analyze the strategic fit of the two identified business strategies. You are also required to highlight which category within the matrix (SO, ST, WO, or WT) does each of the identified business strategies belong to.

3- Finally, you must apply the QSPM (Quantitative Strategic Planning Matrix) tool to evaluate and select the most appropriate business strategy to adopt.

Question 3.A

Work Required: You are expected to prepare a proposal document for MPH Bookstores’ management team on the strategic innovation approach for the firm. The proposal document should include the following:

1- First, apply the Strategy Canvas and the Buyer Utility Map to identify a “Blue Ocean” offering that proposes a new uncontested market space for the firm.

2- Next, a Business Model Canvas should be prepared to capture details of the innovative strategy. All nine elements of the Business Model Canvas should be filled.

3- Finally, the report should be concluded by identifying two key areas where “value is captured” within the business ecosystem.

Part B

Case Study (Part B)

MPH Bookstores – A New Revival

Strategic Venture

To create a sustainable competitive advantage within the competitive retail book industry, MPH Bookstores’ board of directors had approved the strategic venture into a new revenue model.

The new revenue model will encompass a subscription-based book service whereby customers are offered a personalized and curated selection of books delivered to their doorstep on a monthly basis. The extent of offerings will be tailored according to the subscription tier, which caters to various customer preferences and budgets. Moreover, customers are allowed to exchange the books that they receive if it is not suitable to their tastes.

Based on early analysis, the strategy team assesses that MPH will require the following capabilities to provide the new offering.

Curation Expertise: MPH will need the ability to curate high-quality book selections tailored to the preferences and interests of subscribers.

 Procurement and Supplier Relationships: MPH will need to have the capability to negotiate favorable terms, source exclusive titles, and ensure timely delivery of books to meet subscriber demand.
 Logistics and Fulfillment: MPH will need to have robust systems and processes in place to handle inventory, shipping logistics, and customer support inquiries effectively.

 Technology and E-commerce: MPH will need to have a user-friendly platform that supports subscription management, as well as marketing and customer engagement.
 Customer Insights & Personalization: MPH will need to have capabilities in data analytics, customer segmentation, and predictive modelling to understand subscriber preferences and tailor offerings accordingly.

Question 1.B

Work Required: You are required to be part of the brainstorming session with your team to select the optimal “exploitation strategy” that MPH Bookstores should adopt to enter into the innovative strategic venture.

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