4. Small shop in
Night market
1970
Single
retail store in
a shopping
district
1986
Diversified into
manufacturing
1989 Established
3 more
stores,deal with
Happy
department
store
1992
Retail chain with
total 16 stores,
75% stake in an
optical firm
1993
First large
Discount
Store, PMart,
1994
S$ 50billion
Introduction
to Case
6. Rivalry
Customers
Suppliers
New
Entrants
Substitutes
Cost leadership strategy can be analysed with the help of Porter’s 5 forces model
• Only importer of low cost products from China
• No price competitor
• Willing to buy low end and cheap products
• Suppliers from less developed countries manufacturing low
cost garments
• Power to bargain stays with Pisces
• Tough market conditions repelled new entrants
• Pisces had early mover advantage and was a price leader
• Product prices were itself substitutes for high end
products
Business
Approach
Strategy
Approach
8. Announced an investment of 7.6million dollars
in a joint venture with a Singapore firm to set up
a transporting and chartering business
Integrated
Vertical (Backward) integration
In 1993: by the end of 93 opened 16 stores
Horizontal
9. • 1993: acquired 75% stake in Kingdom corp. that traded optical frames and
glasses(acquisition)
• Sept 1994: 40% in circuit plus and opened new subsidiary as PHT
• By the end of the year 1994, expanded its real estate efforts in making
following three hotel investments in China:
-S$4.6 million in Zhejiang Province
-S$4.9 million to purchase a hotel on Hainan Island
from Five Rings; and
-S$8 million to purchase 54 per cent of a 400-room
hotel on Qingdao Island.
Diversified
Concentric
Conglomerate
10. • 1992: Saudi Arabia’s Happy dept. store allowed them to display their goods
worth $3m
• 1993: acquired 75% stake in Kingdom corp. that traded optical frames and
glasses(acquisition)
• dec 1993: made a joint venture, Q in traces Resource for bilateral trading &
investment
• May 1994: second joint venture with 5 ring to be run by Quintraco.
• Aug 1994: Pisces land(subsidiary of Pisces) joint venture with china based Bei
Hai port authority to build & operate for 50 years as industrial park in Guangxi
province.
Extreme Growth
Mergers & Acquisitions
11. Retrenchment
Divestment
• Swapped 30% shares Pisces then signed a preliminary agreement for its third
technology acquisition, for 30 per cent of Hongguan Technologies through a
share swap
• The links between Pisces and TTI were further strengthened by TTI’s subsequent
announcement that it planned to sell to Pisces 10 per cent of its subsidiary
garment company, Lu Thai Textiles. The intention was to receive for a stock
listing in China
12. Why the Growth Strategy?
With
developing
Singapore night
markets ceased to
exist by late 70s.
Need to find an
alternative
business, and their
relative success in
selling clothes
Capable of higher
economies of scale
Great
opportunities in
Convenient stores
High Customer
Demand
(only retailers)
Great
margins
Poor economic
situation in the home
country
13. Conclusion
• Garment being the core competency helped them compensate when pisces group or any
other subsidiary faced losses due to economic situations in homeland. This helped them
Grow without any concern.
14. • Pisces had to be very picky about the businesses they acquire which was hard for them
so they conducted market feedback to analyse which firms should they acquire or fund
• Pisces also indicated that it intended to continue its aggressive expansion and faced
relatively few constraints. Funding its acquisitions was not a problem, as internal
sources, other shareholders, venture capital companies and investors were ‘more than
willing’ to fund projects. Instead, the problem was to find suitable acquisitions.
• With the uniqueness in its competitive advantages, both financially well stable and the
ability to manufacturing low cost product to meet its customer needs, Pisces is able to
implement its business level strategies to custom to its core competencies to generate
above average returns.
• The successfully implementation of business strategies include the understanding of
their core competencies and will help to sustain their high competitive ranking in the
market.