Beer is the most widely consumed alcoholic beverage and it is oldest prepared beverage in the world; the beer is third most popular after water and tea. The big breweries that are Scrabbles Brewery Malaysia Bertha(CB) and Guinness Anchor Bertha(GAB) in Malaysia. Strengths and weakness of Scrabbles Brewery Malaysia Bertha The strengths of Scrabbles Malaysia are that brand image, strong financial position quality and distribution network. The Scrabbles Group has a long tradition for sponsorships that can be positively associated with Scrabbles brands.
The Scrabbles Malaysia has financially powerful to be protected from the fluctuating fortunes of the Malaysian market. The weakness of Scrabbles brewery is face a largely Muslim population in Malaysia so the government has used the alcoholic drinks industry as a source Of revenue generation and accordingly excise hikes are large and frequent. The cost of beer brands in Scrabbles Malaysia is getting higher, due to the consumption tax. Strengths and weakness of Guinness Anchor Bertha The strength of Guinness Anchor Bertha is the joint venture of the winning brands companies such Guinness, Tiger, Anchor and Heinlein.
In general, a low asset turnover ratio suggests problems with excess production capacity, poor inventory management, or lax collection methods. In general, the company can use ‘small profit quick return way’ to accelerate turnover of assets, the absolute amount of increase profits. 8. Non-current asset turnover ratio Non-current assets including held to maturity investments, long-term receivables, long-term equity investment, engineering goods, investment real estate, fixed assets, construction in progress, intangible assets, long-term prepaid expenses, available for sale financial assets.
The GAB uses its investment in non-current assets is 0. 56 times and CB investment in encounter assets is 0. 23 times. 9. Debt ratio The GAB is financing approximately 28. 92% of its assets with borrowed funds and the CB financing approximately 37. 39% of its assets with borrowed funds. A lower debt ratio usually implies a more stable business with the potential of longevity because a company with lower ratio also has lower overall debt. The CB face financial risk is higher than GAB. 10. Long term debt to total capitalization page 4 of 16 The GAB long term debt to capitalization ratio is 38% higher than CB, CAM only have 8. 6%. If the percentage is higher, it means that the finance f the company mainly comes from the debt which can be quite risky and is sometimes a reason for bankruptcy and shows how weak the company is financially. In general, a decrease in the long term debt to capitalization ratio would mean that there is an increase in the stock holder’s equity. 11. Net profit margin The net profit margin of GAB is 11. 23% and CB is 9. 8%. The amount of net profit margin depends on two factors: First, total profit and the second is the income tax rate.
The net profit margin is the percentage of revenue remaining after all operating expenses, interest, taxes and preferred stock dividends eve been deducted from a company’s total revenue. For ever RMI . 00 of sales, GAB earns approximately 0. 1 1 cents for their shareholders and CB earns approximately 0. 09 cents for their shareholders. 12. Return of total assets The return of total assets is measure of how effectively a company uses it assets and the total assets are based on the carrying value of the assets.
A higher return of total assets is better; Return of total assets depends on the company, the industry and the economic environment. The GAB return of total assets is 23. 04% and CB is 14. 28%. 13. Return on equity ratio CB Return on equity ratio is 22. 78% and GAB is 32. 43% higher than CB. Return on Equity is indicator of how effective management is at using equity financing to fund operations and grow the company. If the percentage higher means more money a company is able to generate for the same dollar amount spent.
This is an important measurement Because investors want to see how efficiently a company will use their money to generate net income. Return on equity is also an indicator of how effective management is at using equity financing to fund operations and grow the company. Page 5 of 16 3. Recommendation Nowadays the adult prefer have a relax and enjoying lifestyle so they will drink beer to relax themselves and a lot of people admit they turn to alcohol to help them cope after a stressful day, so after work they will go pub, disco, bistro with friends, colleagues even boss.
In term of opportunities, option 1 , Scrabbles flagship store in Malaysia. The term “flagship” refers to a ship which is the largest, fastest, newest, most heavily armed, most well known, or the lead ship in a fleet. When applied to a particular retail store, the designation of ‘flagship” is given to a retailer’s primary location, a store in a prominent action, a chain’s largest store. The flagship store has a key role to play in the company’s brand strategy. The flagship store is a showcase for the brand. The purpose of a flagship is not to generate a profit.
Instead, it has a particular job to do in drawing attention to the brand, broadcasting its brand status and marking itself out against its competitors. Flagship shopping itself is more about shopping for leisure and pleasure. The flagship store provides an opportunity for customers to experience the brand in an innovative and memorable way, so raising brand awareness on a truly personal level. The flagship store making a strong brand statement, it may be used to test the market, re-position the brand, trial new products, assess retail store design concepts or act as host venue for a range of PR activities.
Flagship stores generally have the best of everything. Store design and layout is luxuriously spacious, the best products are on display some unique to the flagship, merchandising is innovative with stock maintained at Optimum levels, window display IS stunning, lighting is perfect, the store is spotlessly clean and meticulously tidy, and customer service is second to none. Scrabbles flagship tore of basic facilities also added a new element. The new element is combine flagship store and sport bar. This idea is from Scrabbles Sports Bar London the Casino at The Empire.
Except casino, facilities in Scrabbles flagship store including: Scrabbles sport bar, icon balcony bar, the shadow bar, vapor bar and restaurant. Scrabbles Sport Bar is State of the arts screens; slick design and wall to wall sport live from where it’s happening in any sports, such as: football, golf, formula 1, basketball, baseball and other sport etc. Icon Balcony Bar is also an interconnecting private cinema making it specially perfect for presentations, conferences and award ceremonies. Shadow Bar is a stunning and truly versatile space.
The illuminated dance floor, private bar and sink in your seat loungers make it an obvious choice for performances or events with dancing and music. Vapor Bar is the perfect place to enjoy exquisite cocktails & major sporting events in dramatic surroundings. In restaurant can watch chefs work the woks in on show kitchen as create affordable, authentic Asian dishes, mocking (alcohol free) and enjoy an exotic tea while meal comes together, most important is this restaurant serve for Muslims. This concept must attract over 18 years old Malaysian and tourists to come over here.
Option 2, the CB can invest in Taiwan. Compare with Taiwan The current population of Malaysia in total is 30,267,367 and Malay is over 50%. The current population of Taiwan in total is 23,373,517 in Taiwan CB no need to face largely Muslim population. Page 6 of 16 The beer market in Taiwan is estimated to be four times larger than Malaysia. In Taiwan, younger generations are more inclined towards western diets such as burgers, bread and pizza, making this group of consumers a good target for imported beers from other countries. In Taiwan threats of Scrabbles is domestic beer production in Taiwan.
Local beer production accounts for over 80% of total beer consumption in Taiwan. Page 7 of 16 4. Capital Investment Analysis & Sources of Financing Recommendations Capital investment analysis Capital investment decisions essentially include the commitment of large sums of money which affect the business for several years. These decisions require purchasing of items such as land, machinery, buildings, or equipments, which is one of the most important decisions that a business manager undertakes. In addition, purchase of a capital item requires immediate payment, whereas the income or benefits need time to increase.
Since the benefits are reliant on future events, an intensive evaluation Of investment options becomes inevitable. The goal of this process aim is to pinpoint the option that is most likely to be the most profitable for the business. Business manager may use techniques such as discounted cash flow analysis, risk-return analysis, risk-neutral valuation and utility theory in a capital investment analysis. Capital investments are risky because they involve large, up-front expenditures on assets intended for many years of arrive and that will take a long time to pay for themselves.
If a capital investment is financed, it must earn an even greater return, to compensate for the interest the company must pay on the financed funds. Furthermore, a poor investment decision may not be reversible. Thus, an investment decision, a financing decision, and a dividend decision form a capital investment analysis. Unlike some other types of investment analysis, capital budgeting focuses on cash flow rather than profits. Capital budgeting involves identifying the cash in flows and cash out flows rather than accounting venues and expenses flowing from the investment.