Malaysian National Car; Proton Holding Strategic Marketing Management as Cases Study

1. 1
UNIVERSITY OF TECHNOLOGY MARA JOHOR
SEGAMAT CAMPUS
BACHELOR IN BUSINESS ADMINTRATION (HONS) IN
(MARKETING)
STRATEGIC MARKETING MANAGEMENT
MGT 652
MAJOR ASSINGMENT:
MARKETING PLAN
Perusahaan Automobile National Bhd. (PROTON)
Prepared For:
PM MOHD ZAINAL BIN LODE
PREPARED BY:
YANG IZHANI BINTI ITHNIN 2006211286
AHMAD AKMAL BIN MOHHID 2005655098
MOHD AKIB BIN MOHD ZIN 2005655066
MUHAMAD ZULHANIF BIN BAHARUDDIN 2005655041
AZMI BIN MOHD NOOR 2006848206
CLASS: BMB5M1
SUMMITED DATE: 11TH
April 2008

2. 2
DECLARATION OF ORIGINAL WORK
BACHELOR OF BUSINESS MANAGEMENT (MARKETING)
FACULTY OF BUSINESS MANAGEMENT
UNIVERSITI TEKNOLOGI MARA
JOHOR CAMPUS
“DECLARATION OF ORIGINAL WORK”
Hereby, declare that,
 This work has not previously been accepted in substance for any degree
program locally or overseas and is not being concurrently submitted for
this degree program or any other degree program.
 This project paper is the result of our independent work and investigation,
except where otherwise stated.
 All verbatim extract have been distinguish by quotation marks and sources
of our information have been specifically acknowledged.
Signature: _______________ Date: ___________
1. YANG IZHANI BINTI ITHNIN 2006211286
2. AHMAD AKMAL BIN MOHHID 2005655098
3. MOHD AKIB BIN MOHD ZIN 2005655066
4. MUHAMAD ZULHANIF BIN BAHARUDDIN 2005655041
5. AZMI BIN MOHD NOOR 2006848206

3. 3
ACKNOWLEDGEMENT
In the journey making this report they are many difficulty and best moment in our
life. Friends and lecture all of them play a part in this report. It is our pleasure to
say something for all the effort from the group members and others.
First of all, we would like thank and praise to Allah S.W.T. The Al-Mighty and
Merciful because give us an opportunity to complete this project paper in time.
Without the grace and help from Him, it is impossible for us to have greater
endurance, courage and spirit in order to complete this project paper.
We would also like to thank our advisor, PM Mohd Zainal Bin Lode who has
constantly guide, encourage and advise us during the completion to this project
paper.
We would also like to thank to all friends, especially to our classmate in BMB5M1
and everybody who help us directly or indirectly in completing this project paper.
Special thanks also to the librarian of UiTM Johor campus, for their cooperation
and help throughout the success of this study.
We would be forever thankful to them. Only the Allah can replay them
Thank you,

4. 4
TABLE OF CONTENTS
Declaration of Original Works i
Acknowledgement ii
Table of Contents iii
Executive Summary Latter iv
1. Company Background 1-2
2. Proton Vision And Mission 3
3. Proton Existing Objectives 4
4. Proton Strategies 5-6
5. SWOT Framework 7-10
6. SWOT Matrix for Proton 11-14
7. Financial Ratio Analysis of Proton 15-19
8. BCG Matrix (Boston Consulting Group) 20
9. The Internal-External (IE) Matrix 21
10.Long Term Objective 22
11.Recommendation 23-25
12.Time Phase Plan 26
13. Cost Estimates for Recommendation 27-28
14. Conclusion 29
15.Reference 30-32
16.Appendix

5. 5
Executive Summary Letter
By study of Strategic Marketing Management, we are enabling as marketers to
understanding and predict the real situation in the developing the marketing plan.
It also concerned not only with what company strategic plan but also with why,
when, where, how and how often they used it in selling their product. At the end
to give clear view to inform the potential customer to notice about product line
and mix and at the end will buy, used and loyalty with the product and the
company for long term period.
The field of the report is rooted in the marketing plan and the strategic objective
for Proton Berhad. to selling and distributing the variety of the product brand in
Malaysia. Next, in this report we will determine such the marketing strategy,
SWOT analysis that determined the competition position, the variety product and
the key of success in their marketing strategy.
In created and understanding Mission better, the third segment we will focus on
the organization external opportunities by critical analysis with Proton Bhd
marketing objective, target market, positioning and marketing research and mix.
Understand Proton Bhd strategic in financial analysis also be include in this
report. And in last segment we will go throw recommendation and conclusion that
we have learn by adoption the theory in the subject with the Proton Bhd
Marketing Plan.
We hope that this executive summary give you better understanding about our
report and please enjoy our research on Marketing Plan by Proton Bhd

6. 6
1.0 BACKGROUND OF THE COMPANY
PROTON was incorporated on 7 May 1983 with three primary national policy
objectives: to spearhead the development of component manufacturing
industries, to acquire and upgrade technology and industrial skills within the
automotive manufacturing industry and to strengthen the international
competitiveness of Malaysia’s industrial capability.
Today, PROTON is the clear market leader of the Malaysian automotive industry
with the largest domestic market share and a distribution network that spans the
globe. The business of the Group has been expanded to include engineering
consultancy, manufacturing, distribution, financial services and property
investment. With a turnover exceeding RM10 billion in 2002, it is one of the
largest companies listed on the Bursa Malaysia Berhad.
The Group design and produces cars for diverse consumer preferences.
PROTON portfolio includes the world-renown sports cars Lotus Elise and Lotus
Esprit, the sporty Satria Gti, the stylish Gen.2 and the versatile Jumbuck. These
cars are manufactured in Malaysia and UK. The Group also has manufacturing
joint ventures in Vietnam, China and Indonesia.
The engineering consultancy business is led by PROTON wholly owned
subsidiary, Lotus Group, which has offices in the UK, USA, Malaysia, China and
Germany. Lotus Group is a leading sports car manufacturer and engineering
services consultancy with numerous international awards for innovation and
design including the Sir Henry Royce Award for engineering excellence.
The Group conducts research in its centers in the UK and Malaysia for new
technologies with the ultimate aim top put these innovations into production
through partnership with Tier One Suppliers or OEM customers. A number of
these patents have been licensed to leading car manufacturers.

7. 7
Currently, the Group has almost 10000 employees who are involved in the whole
spectrum of the business from research, design, development, testing, stamping,
casting, machining, and assembly to marketing, distribution and after-sales.
Strong customer orientation and competitively priced products are the foundation
of the business and essential to the success. Proton aim to maintaining the
market leadership by continuing to develop innovative products and satisfying the
customers better and more profitably than the competitors.

8. 8
2.0 PROTON’S VISION AND MISSION
2.1 Vision
To become a successful Malaysian automotive engineering and manufacturing
company globally by being customer oriented and producing competitively priced
and innovative products.
2.2 Missions
2.2.1 To Customer
PROTON strives to deliver total customer satisfaction through the provision of
quality automobiles and related products and services more efficiently and
effectively than the competitors.
2.2.2 To Shareholder
PROTON strives to generate good earning with steady growth through the
efficient management of resources.
2.2.3 To Employees
PROTON is committed to promote a conducive working environment while
focusing on human resource development and long-term employment.
2.2.4 To Business Associate
PROTON strives to develop and maintain mutually-beneficial, value-added
relationship of the highest degree.
2.2.5 To Nation
PROTON shall be a responsible corporate citizen and shall be the impetus
towards the realization of Vision 2020.

9. 9
3.0 PROTON’S EXISTING OBJECTIVES
1. Produce excellent products and services to conduct business and expand
to enhance returns.
2. To seek new opportunities to add value to the business with investment
from local and foreign investors.
3. Enhance corporate culture and align corporate goals with the interest of
shareholders and other stakeholders.
4. Drive a success as a transparent, accountable and ethical organization.

10. 10
4.0 PROTON’S STRATEGIES
Product and Services
I. Customer orientation product and services.
II. Developing new innovative product features.
Research and Development
I. Conduct projects through collaboration with Malaysian and UK
universities with some funding provided by the Malaysian government.
II. Development of new low cost flexible engine.
III. Development on an aluminum-bodied vehicle and increased fuel
efficiency.
Manufacturing
I. Flexible manufacturing system installed to changing customer demand
with faster changeover of models.
II. Joint venture plant with other countries such as Indonesia and
Vietnam.
Quality Management
I. Adopt three-stage line inspection – 1. Static evaluation on fitting and
appearance exterior and interior cars. 2. Dynamic evaluation on
function and drivability. 3. Final inspection before approved fit for
delivery to customers.
II. Vendor quality addressed at source by using Advance Product Quality
Planning (APQP) teams.

11. 11
Sales and Distribution
I. Strengthening of domestic sales and service network to improve
customer service and maintain market share.
II. Launched Customer Management Center known as “Proton I.Care” for
customer to contact with Proton Edar for product and service enquiry
as well as 24 hours emergency breakdown assist.
III. International expansion plants and distributors to oversea countries
such as Middle East countries, Australia, United Kingdom, Indonesia
and Singapore.
Shareholders
I. Investor relations program involves the participation of the Board and
senior management.
Business Associate
I. Over 100 Malaysian manufacturers were appointed as Simultaneous
Engineering Partners in development of new range of products.
II. Select alliance opportunities that enable to deliver better ideas into
market place include Asian, European, North America and South
American companies.
III. Formed a joint venture with Miyazu of Japan to develop Malaysian
capabilities in die design, manufacturing and maintenance.
Human Resources
I. Recruit, reward and retain the best employees.
II. Internship program for graduate trainees’ implementation.
III. Development communication of policies affecting employees.

12. 12
5.0 SWOT FRAMEWORK
5.1 Opportunities
1. China economy is growing faster after they had opened their
market to foreign company. China is a big market for
automobile industry.
2. Increase demand for cars in developing countries as it
becomes a necessity and part of modern lifestyle especially
in ASIA country.
3. Increase demand because of high marriage rate in ASEAN
region and new family is seeking cars for their daily usage.
4. New technology such biodiesel, hybrid cars, hydrogen as
alternative fuel and more efficient cars had create new
demand in automobile industry.
5. Implementation of AFTA (Asian Free Trade Area) and
liberalization with United States and Europe country had
establish new market segment internationally to be serve.

13. 13
5.2 Threats
1. The increase of oil price up to US68 per barrel had slow the
growth of automobile industry.
2. Intense price competition among the car manufacturer had
push up higher quality level and competitiveness of each
new car model been produces.
3. The increase of steel price had increase cost of production
and minimizes profit gained by manufacturer.
4. Well establish car makers had launch hybrid car and
sophisticated car that use fuel economically thus reducing
demand for ordinary types of cars.
5. Most of Resources, Distribution network, High Technology,
Brand Preference, International market share and
engineering expertise is own by foreign car makers.

14. 14
5.3 Strengths
1. Proton is a market leader in domestic market and acquire up
to 70% of market share of car sales in Malaysia.
2. Proton has develop the engineering expertise, own engine
and own manufacturing and research and development
platform through the years.
3. Proton had own Lotus engineering expertise who is a leader
in sport car segment worldwide thus increase proton
reputation and ability to compete in global market.
4. Proton own Proton city at Tanjung Malim (2004) which is an
integrated information city, super high speed networking,
smart homes, and sophisticated e-commerce thus possess
the ability to design, test, produce and market cars from the
scratch.
5. Proton business including providing engineering consultancy,
manufacturing, distribution, financial services and property
investment worldwide.
6. Proton own manufacturing facilities in Malaysia, United
Kingdom, Vietnam, China and Indonesia.

15. 15
5.4 Weaknesses
1. Image projected by Proton is perceive as ordinary brand not
exclusive brand (in term of quality of cars been produced)
especially in domestic market.
2. Proton car not popular in international market because of
Proton’s lack of networking, aggressive marketing and brand
power advertising campaign.
3. Lack of high quality car model thus lowered its brand power
and less competitive with foreign car maker such Honda,
BMW and Hyundai.
4. Bureaucratic and ‘play it safe’ management style had hold
Proton potential and performance from becoming sensitive
towards the shift of customer wants and competitors new
technology and new car model thus decrease its domestic
market share.

16. 16
6.0 SWOT MATRIX FOR PROTON
STRENGTH
1. Proton is a market leader in
domestic market.
2. High Engineering expertise, own
engine and manufacturing and R&D.
3. Own Lotus engineering expertise
thus increase its reputation and
ability to compete in global market.
4. Owned Proton city at Tanjung Malim
(2004) thus possess the ability to
design, test, produce and market
cars from the scratch.
5. Operate in Engineering consultancy,
manufacturing, distribution, financial
services and property investment
worldwide.
6. Owned plant in Malaysia, United
Kingdom, Vietnam, China and
Indonesia.
WEAKNESS
1. Low Brand Power and Brand
Image.
2. Lack of networking, aggressive
marketing and brand
advertising campaign.
3. Lack of high quality car model
thus lowered its brand power.
4. Bureaucratic and ‘play it safe’
management style.

17. 17
OPPORTUNITY
1. China economy growth and
large populations.
2. Owning cars in developing
countries becomes a
necessity and part of
modern lifestyle especially
in ASIA country.
3. High marriage rate in
ASEAN region and new
family is seeking cars for
their daily usage.
4. New technology such
biodiesel, hybrid cars,
hydrogen as alternative fuel
and more efficient cars had
create new demand.
SO – STRATEGY
1. Developing high technology,
sophisticated and exclusive cars
applying hybrid system, using
biodiesel fuel and economical fuel
consumptions. (S1,S2,S3,O4)
2. Focusing in China Market and other
developed country, establish brand
power and produce more cars that
suit foreign customer needs and
wants. (S6,O1,O2,O5)
WO – STRATEGY
1. Developing new car models
that high quality and unique
design and sell at affordable
price. (W1,W3,O2,O3)
2. Penetrating new market in
developed countries where
price sensitive is high and sell
cars at premium price to
Establish Market Share.
(W3,O2,O3)

18. 18
5. Implementation of AFTA
(Asian Free Trade Area)
and liberalization with
United States and Europe
country.
THREAT
1. The increase of oil price up
to US68 per barrel.
2. Intense price competition
among the car
manufacturer.
3. The increase of steel price
had increase cost of
production and minimizes
profit.
4. New Hybrid car and
sophisticated car that fuel
economically thus reducing
demand for ordinary types
of cars.
ST – STRATEGY
1. Develop and produce cars that
economical fuel consumptions, high
performance engine, nice design
and giving more added value to
customers. (S3,S4,S5,T1,T4)
2. Outsourcing Proton expertise,
operations and networking through
joint venture, acquisitions and
strategic alliances. (S3,S4,S5,T2,T5)
WT – STRATEGY
1. Establish strategic alliances
with global player in automobile
industry to increase the
distribution channel, marketing
ability and R&D capacity.
(W2,T2,T5)
2. Applying cost leadership
strategy in management and
productions by using new
technology and methods.
(W3,W4,T1,T2,T3)

19. 19
5. Resources, Distribution
network, High Technology,
Brand Preference, market
share, engineering
expertise is own by foreign
car makers.

20. 20
7.0 FINANCIAL RATIO ANALYSIS OF PROTON
RATIO 2007 2006
LIQUIDITY RATIO
1) CURRENT RATIO
Current Asset
Current Liability
2) QUICK RATIO
Current Asset – Inventory
Current Liability
RM3,502,203
RM1,533,075
= 2.28 times
RM3,502,203 –
RM374,149
RM1,533,075
= 2.04 times
RM4,352,605
RM1,908,142
= 2.28 times
RM4,352,605 -RM372,458
RM1,908,142
= 2.09 times
LEVERAGE RATIO
1) DEBT TO TOTAL ASSET
RATIO
Total Debt
Total Asset
2) DEBT TO EQUITY RATIO
Total Debt
Total Stockholder Equity
3) LONG TERM DEBT TO
EQUITY
Long Term Debt
Total Stockholder Equity
4) TIMES INTEREST EARNED
RATIO
Profit Before Interest and Taxes
Total Interest Charges
RM1,703,001
RM6,668,476
=25.54%
RM1,703,001
RM4,965,475
=34.30%
RM169,926
RM4,965,475
=3.42%
RM344,174
RM14,604
= 23.57 times
RM 2,130,410
RM6,865,855
=31.02%
RM2,130,410
RM4,735,445
= 44.99%
RM222,268
RM4,735,445
= 4.69%
RM946,598
RM12,565
= 75.34 times

21. 21
ACTIVITY RATIO
1) INVENTORY RATIO
Sales
Inventory
2) FIXED ASSET TURNOVER
Sales
Fixed Asset
3) TOTAL ASSET TURNOVER
Sales
Total Asset
4) ACCOUNT RECEIVABLE
TURNOVER
Sales
Account Receivable
5) AVERAGE COLLECTION
TURNOVER
Account Receivable
Sales/365 days
RM4,825,658
RM374,149
=12.90 times
RM5,259,781
RM3,166,273
=1.66 times
RM5,259,781
RM6,668,476
= 0.79 times
RM5,259,781
RM252,581
= 20.82
RM252,581
RM5,259,781/365
days
= 17.53 day
RM6,466,738
RM372,458
= 17.36 times
RM7,674,265
RM2,513,250
= 3.05 times
RM7,674,265
RM6,865,855
=1.12 times
RM7,674,265
RM455,479
=16.85
RM455,479
RM7,674,265/365 days
= 21.66 day
PROFITABILITY RATIO
1) GROSS PROFIT MARGIN
Sales – Cost of Goods Sold
Sales
2) OPERATING PROFIT
MARGIN
Earnings Before Interest and
Taxes
Sales
3) NET PROFIT MARGIN
Net Income
Sales
RM434,123
RM5,259,781
= 8.25%
RM329,570
RM5,259,781
= 6.27%
RM321,836
RM5,259,781
= 6.12%
RM1,207,257
RM7,674,265
= 15.73%
RM934,033
RM7,674,265
= 12.17%
RM772,286
RM7,674,265
= 10.06%

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4) RETURN ON TOTAL ASSETS
(ROA)
Net Income
Total Asset
5) RETURN OF
STOCKHOLDERS
EQUITY (ROE)
Net Income
Total Stockholders Equity
6) EARNINGS PER SHARE (EPS)
Net Income
Number of Shares of Common
RM321,836
RM6,668,476
= 4.83%
RM321,836
RM4,965,475
= 6.48%
RM321,836
RM1,000,000
=RM0.32 per share
RM772,286
RM6,865,855
= 11.25%
RM772,286
RM4,735,445
= 16.31%
RM772,286
RM1,000,000
=RM0,77 per share
GROWTH RATIO
1) SALES
-Annual percentage growth in
total
Sales.
2) NET INCOME
- Annual percentage growth in
profits.
RM5,259,781 -
RM7,668,748
RM7,668,748
= -31.41%
RM321,836 -
RM772,286
RM772,286
= -58.33%

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ANALYSIS
Liquidity Ratio
The liquidity ratio is the measure of the overall ability of the firm to meet its
maturing obligation by relying on its current assets, in other words. It measures
the ability of the firm’s liquid resources to pay current and maturity on items. For
current ratio for Proton Holdings Berhad is also same. This indicates that the
ability of the asset to be liquid into cash is same.
Leverage Ratio
Leverage ratio is concern with how much the company owes outsider in relation
to assets value of the company and to the company’s long term capital structure.
Higher borrowing indicates risk because the firm needs to finance the interest
charge imposed on them. As measure in Proton Holdings Berhad financial
statement, the Debt Ratio is decreasing from 31.03% to 25.54%. its show that the
ability of the one unit of total asset to pay the debt is decreasing.
Activity Ratio
Activity ratio use to measure the efficiency of the management in utilizing the
assets of the company as well as managing the overall operation of Proton
Holdings Berhad. The account receivable turnover indicates the ability of this
company stock to be sol is increase from 16.85 times to 20.82 times. This
indicates that the ability of the company to charge its stock over the year is
increasing to 3.97 times per year.
Profitability Ratio
The profitability ratio measure the relative success of the firms that is combine
the effect of liquidity activity and leverage management on the firm’s overall
operating result. It relates to the firm’s ability to obtain returns relative to sales,
assets and equity. Profitability ratio gives an insight into the company policies and
is regarded as an important ratio by the auditors to detect any errors or unusual
fluctuation as due to error of fraud. The Profit Margin, its indicates by the ratio we

24. 24
found out that the Net Profit Margin for Proton Holdings Berhad decrease from
15.73% to 8.25%.

25. 25
8.0 BCG Matrix (Boston Consulting Group)
RELATIVE MARKET SHARE POSITION
ANALYSIS
From our analysis, Proton is in the Question Marks quadrant because Proton
possess low internal market share in the high growth automobile industry.
Division in Quadrant I have a low relative market share position, yet they
compete in a high-growth industry. Generally this firm’ cash needs are high and
their cash generation is low. These businesses are called Question marks
because the organization must decide whether to strengthen them by pursuing
an intense strategy (market penetration, market development or product
development) or to sell them.
STAR
II
QUESTION MARKS
I
CASH COWS
III
DOGS
IV
Medium
0.50
Low
0.00
High
1.00
Low
-20
Medium
0
High
+20
INDUSTRY
SALES
GROWTH
RATE
% .Proton

26. 26
9.0 THE INTERNAL –EXTERNAL (IE) MATRIX
THE IFE TOTAL WEIGHTED SCORES
STRONG AVERAGE WEAK
3.0 to 4.0 2.0 to 2.99 1.0 to 1.99
4.0
3.0 2.0
1.0
High
3.0 to 4.0
3.0
Medium
2.0 to
2.99
2.0
Low
1.0 to
1.99
1.0
ANALYSIS
The IFE total weighted score on the x-axis and the EFE total weighted scores on
the y-axis for the Proton company are 3.15 and 3.35, so that the prescription for
division falls into cells I,II,IV that can described as grow and build. Intensive
(market penetration, market development and product Development) or
integrative (Backward Integration, forward integration and horizontal integration)
strategies can be most appropriate for these divisions.
1 11 111
1V V V1
V11 V111 1X

27. 27
10.0 LONG TERM OBJECTIVE
1. To implement and strengthen more on the marketing strategies in order to
become world class service manufacturing.
2. To develop more on designing and supporting for component of services
advanced technology.

28. 28
11.0 RECOMMENDATION
Proton has excessive resources, backward, forward or horizontal integration may
be effective strategies. If Proton too heavily committed to a single product, then
concentric diversification may reduce the risks associated with a narrow product
line. Proton can afford to take advantage of external opportunities in several
areas: they can take risk aggressively when necessary.
From our analysis, Proton we recommend the strategies as below: -
11.1 Repositioning
Repositioning can be used to aim diversity away from existing market by
uncovering new applications, uses or market segment for current product.
In Proton situation repositioning means Proton can niches their
segmentation to be more focus and realistic. By using the same objective,
should Proton repositioning their product more toward the middle segment
people? The answer will be yes. Persona is the best example of
repositioning but it limited in long destination to European and China
market. Proton should develop new services that not only capture sub
domestic market but also future market in Middle East such as UAE, Qatar
or Arab Saudi in addition to increasing better image about quality
automobile industry from Asia.
11.1.1 Advantages
By implemented this strategy Proton can achieve as below advantages in
their performance and operation:
 Strategic decisions involving services and product-which product lines
should be continue, which to add and which to delete.
 Can identified and select the potential market in which Proton will have
competitive advantage.
 Such statement of focus can drive the operations of a firm.

29. 29
11.1.2 Disadvantages
By implemented this strategy Proton should also consider several problem
that may occur such as:
 Product and services that provide small and limited growth rate will be not
notice as potential market
 Limitation in terms of management power and financial cost
11.2 New Product Lines or Additional
New product lines means Proton develop such product (1) new to the
provider as opposed to the market place (2) be additional to the product
range already on offer. For example, Proton can provide service such as
van and buses to tack customer from the local transport to airport or
having travel tour in stop destination for customer during the waiting time
in local destination. This develop new lines in Proton service and other
development can Proton done such as selling Insurance cover to the
passenger.
11.2.2.1 Advantages
By implemented this strategy Proton can achieve as below advantages in
their performance and operation:
 It helps in the task of the long term objective
 Differentiation, can be based on product quality, product features,
innovation, service, distribution, or strong brand name
 Lost cost strategies can be based on an experience curve, which links
cost reduction to cumulative production volume, or on other factors such
as no-frills products or automated production processes.
 A preemptive move attempts to generate a “first-mover” advantage.

30. 30
11.2.2.2 Disadvantages
By implemented this strategy Proton should also consider several problem
that may occur such as:
 Difficult to coordinate various functional are strategies so that Proton don’t
work at cross-purpose.
 Focus strategy will direct its effort toward narrow part of either the product
line or the market.
From our research we had find out that proton had develop engineering
expertise and sophisticated manufacturing facilities and have all the ability to
compete in the global market. Step taken by Proton in buying Lotus Engineering
(leader of sports car industry in the world) is a good strategy in order to boost its
capacity in designing and developing its own technology.
Recent strategy under process is establishing distribution channel world
wide with Volkswagen and other well establish corporation that possess the
ability to market the Proton car worldwide. By 5 years from now we believe that
Proton is able to design, develop, test, produce and market its own cars by using
its own expertise and technology worldwide as Honda and BMW do.

31. 31
12.0 Time Phase Plan
Implementation Phase 1 Phase 2 Phase 3
Who Cooperate Level Functional Level Division Level
When 1 to 3 month 6 Month to 1
years
1 years to 5 years
Control Tools 1. Benchmarking
2. Budgetary
Control
1. Corrective
Action
1. Benchmarking
2. Budgetary
Control
Evaluation Process The Balanced
Scorecard
Effective and
efficient operation
and management
evaluation
The Balanced
Scorecard
Problems 1. Changing the
culture of
management
2. Power conflict
3. Legal and law
Differentiation
4. Pricing not
parallel with quality
service
1. Difficulty to
adopt the new
culture
2. Conflict with
personal interest
1.Large numbers
of Customers
2. Huge Area to be
Recover
3. Longer Time to
be Acceptable
4. Not satisfied
with the quality
services
How To Overcome Contingency
Planning
Contingency
Planning
Supporting
Final Results 1. Adopts the
differences
2. Reducing
Conflict
3. Adopts the
new cultures
1. Changes by
Time
2. Adopts the
differences
1. Increasing the
numbers of sales
2. Position as
number one
company in
Consumer product
n more markets

32. 32
13.0 Cost Estimates for Recommendation
In order to adopt product development strategy, which involves introducing the
new or modified services to the present markets, we expect the sales and
marketing expenses increase by 11.27%, property, plant, and equipment
increase by 57.4%, administrative expenses decrease by 41.22%, other
operating expenses increase by 59.54%, investing activities increase by 35.62%,
financing activities increase by 29.3%. Income and expenses for each income
statement are translated at average exchange rates.
The estimated useful lives and residual values of property, plant and equipment
based on factors such as business plan and strategies, expected level of usage,
future technological developments and market prices.
Future results of operations could be materially affected by changes in these
estimates brought about by changes in the factors mentioned. A reduction in the
estimated useful lives and residual values of property, plant and equipment in
particular the residual value of aircraft frames and engines would increase the
recorded depreciation and decrease the property, plant and equipment.

33. 33
Projected Cost for Automobile Industry
Additional Expenditure
Estimate
Money
(RM’000)
Operating activities 250,904
Investing activities 1,575,636
Financing activities 1,140,602
TOTAL AMOUNT 2,967,142
Recommendations for Proton are to enhance its quality of service after sales to
parallel with other automobile from Japan or Korea from aspect safety,
worthiness, technology, and punctuality. Although it provides a cheaper price than
others automobile competitor but more customers not satisfied with their
services. So, Proton must be develop their services to attract and satisfied their
customers.
Another recommendation is Proton should be use a Seven-S Method to improve
their operation system or their structure. Proton also should be done a more
promotion to advertise their services and also image of the company. It can
invest in other country to get higher profit.

34. 34
14.0 CONCLUSION
From this study, we can conclude that Proton have a potential in order to perform
well in the global market. With the strengths that they have, they can perform in
the global market if they used all the strengths that they have. Those strengths
can also become competitive advantages to Proton in competing in this industry.
Although there are many competitors for Proton, we believe that Proton can
compete with their competitor effectively with the help of their strengths.

35. 35
REFERENCE
Journal and books:
Proton financial statements 30 June 05, 30 June 2007 and 31 December 2007
Christy Harvey, “Greeting lifetime customers”, Customer Relationship
Management, October 2001, page 25-26
Christy Harvey, “Greeting lifetime customers”, Customer Relationship
Management, October 2001, page 25-26
Fred R. Dvid, “Strategic Management Concept and Cases”, Eleventh Edition,
Pearson Education, New Jersey,2007
Kotabe Helsen, “Global Marketing Management” WIJEL, Fourt edition, United
Stated of America, 2008
Lamb, Hair, McDaniel, “Marketing”, Seventh Edition, 2004, page 292-315
Mark Steeling, “An Empirical Analysis of Sponsorship”, Journal of Consumer
Research, June 97
Martin Christopher, Adrian Payne and David Ballantyne, “Relationship Marketing;
Bringing quality, customer service and marketing togethet.” Second Edition,
Butterworth-Heinemann Ltd, Oxford, 1994
Sarah Ellison, “On Cloud Blue”, Operating on the low rate but high frills concept,
Wall Street Journal, 12February 2002
Seelan Sakram and Bhupinder Singh, “All System Go”, A look At Malaysian
General and Commercial Aviation, Asian Economic, February 2004, page 107-
109

36. 36
Newspapers and Magazines:
Australia’s Number One Industry Newletter January 2006
Azli Ayob, “Proton tarik balik Savy”, Berita Harian, 3 Mac 2008
David Wolfer, “Proton IPO Price Disappoint”,
Fazailah Ptd dan A Precila Shantini. “Proton kuasai semula pasaran tempatan”
Berita Harian. 7 Mac 2008
Fazli Ayub, “Bank Negara kekal Kadar Faedah” Berita Harian 5 Mac 2008
Francica Tan, “Proton plans entry to automobile in Thailand Market”
Business News, 25 July 2005
Gina Imperto, “Proton in sponsorship deal”, The Star, 22 February 2005
Ismail Jalaluddin, “Proton launches new generation of Saga” The Star, 3 March
2005
Mastura Hamid, “Proton launches persona” New Strait Times, 23 August 2005
Sharizan Salian, “Proton umum tiga lagi kerata baru”, Berita Harian 6 Mac 2008
Tong Gok Chong, “Proton: When the business of doing business comes first”
Malaysian Business, July 2005

37. 37
Website:
Financial Report 2005, Mac7 008, 15:00 www.proton.com.sg/financialreport05/
Financial Report 2005, November 2005,14.20
www.proton.com/financialreport05/
KLSE Quates Sorted By Counter, Tuesday, Dec27 05,20.40 www.klse.com.my
KLSE Quates Sorted By Counter, Tuesday, Mac7 08, 14:05, www.klse.com.my
Organizational structure of Proton Company in 2005. 14350,
www.proton.com/investorRelations