Table of Contents

1.0 Company Background............................................................................................1

1.1 Company Logo....................................................................................................1

1.2 Company Profile.................................................................................................1

1.3 Vision and Mission..............................................................................................2

1.4 Core Business.......................................................................................................3

1.5 Board of Director................................................................................................4

1.6 Share Capital.......................................................................................................4

2.0 General Environment Analysis.............................................................................5

2.1 Political Factors...................................................................................................5

2.2 Economic Factors................................................................................................5

2.3 Social Factors.......................................................................................................6

2.4 Technological Factors.........................................................................................6

2.5 Environmental Factors.......................................................................................8

2.6 Legal Factors.......................................................................................................8

3.0 Task Environment Analysis.................................................................................10

3.1 Porter Five Forces Model Analysis..................................................................10

3.1.1 Rivalry among Competing Firms.............................................................10

3.1.2 Threats of Substitute Products.................................................................11

3.1.3 Threats of New Entrants...........................................................................11

3.1.4 Bargaining Power of Buyer.......................................................................12

3.1.5 Bargaining Power of Suppliers.................................................................13

4.0 S.W.O.T Analysis..................................................................................................14

5.0 T.O.W.S Matrix....................................................................................................16

6.0 Ratio Analysis........................................................................................................18

7.0 Strategic Decision..................................................................................................23

8.0 Best Strategies Recommendation........................................................................25

9.0 References..............................................................................................................26

1.0 Company background

1.1 Company Logo

1.2 Company Profile

Yi-Lai Industry Berhad is a Malaysia-based tile production company founded in 1990.

Yi-Lai Industry Berhad was listed on Bursa Malaysia in year 2002 (The holding company

of Yi-Lai Industry Berhad) and over the years it has grown to become one of the most

established companies in the Asia Pacific region.

In November 1991, Yi-Lai Industry Berhad was registered as the proprietor of the

“ Alpha Tiles” trademark and began the production of a single Italian tile line in it factory

that located at Kulai, Johor.

To stay ahead in the tile production industry, Alpha Tiles has adopted forward

thinkingstrategies and policies based on Italian business models. Italy is the global leader

in tileexpertise and production technology, and Alpha has incorporated both into its

ownbusiness. Alpha Tiles began production of its first Italian tile series in November

1991, with the products well received and quickly adopted by a fast-changing Malaysia

construction industry demanding novel, practical and adaptable tiling solutions.

Today, the company continues to command a high percentage of the Malaysia

tile market. As of 2006 the factory had about 700 employees and currently has seven

production lines with production capacity of about 13,000,000m2 of ceramic,

homogeneous and porcelain tiles annually.

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Yi-Lai Industry Berhad have also been successfully certified to MS ISO

9001:2008 Quality ManagementSystem and MS ISO 13006:2003 for Product Quality

Certification.

1.3 Vision and Mission

1.3.1 Vision

To be the leading supplier of quality ceramic and porcelain tiles, not only

in Malaysia but throughout Asia Pacific and the rest of the world.

1.3.2 Mission

Stylish Living.

These are the things we want our surroundings to reflect.

These are the things we want our lives to reflect.

It all starts with a dream.

WHO better understands this than ALPHA?

Back in 1991, one man had a vision which is “One man. One factory. One

goal.” that provide quality products to meet his customers’ design needs.

With few decades of experience, ALPHA understands that people have

varying interests, tastes and product needs. Trends are always evolving.

And through the years, ALPHA products offer you all the need to

transform the creative ideas into reality.

Fulfilling the dream.

It all starts with a dream, the dream of the perfect home, the perfect lift.

ALPHA understands your dream. Today our company runs by dedicated

staffs who continue the dream, producing and distributing high quality

products that exceed our customer’s needs.

What’s your dream? Let ALPHA makes it a reality.

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1.4 Core Business

Yi-Lai Berhad is a Malaysia-based investment holding company. The business activities

of the Group are mainly relating to the manufacture and sale of ceramic and

homogeneous tiles. The Company operates in Malaysia. The company offers digital print,

wall, floor, alpha porcelain, and homogenous/porcelain tiles. It is also involved in the

trading and distribution of tiles. The Company's subsidiaries include Yi-Lai Industry

Berhad, which is engaged in the manufacturing and sale of ceramic and homogeneous

tiles; Yi-Lai Marketing Sdn. Bhd., which is engaged in the trading and distribution of

tiles, and Yi-Lai Trading Pte.Ltd., which is also engaged in the trading and distribution of

tiles. Its products are exported to Australia, Brunei, Belgium, India, Japan, Pakistan, New

Zealand, Thailand, Taiwan, and others. The company was incorporated in 2000 and is

headquartered in Kulai jaya, Malaysia.

Figure 1 – YI LAI is capable of producing multi-effect homogeneous tiles that bear

finishes equivalent to surfaces of natural stones.

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1.5 Board of Director

In general, every incorporated company would have its own board of directors. Board of

directors normally make up by a group of individuals elected to act or decide on behalf of

shareholders to look after their interests.

Name Board of Director

EncikZabidi bin MdZain Independent Non-Executive Chairman

Mr Lim OonKok Managing Director

Mr Hsieh Yu-Tien Executive Director

Ms Lim Yun-Li Non-Independent Non-Executive Director

MrOngKhengSwee Independent Non-Executive Director

MrOng Chin Lin Independent Non-Executive Director

MrSooChoonSiong Executive Director

1.6 Share capital

Authorized Share Capital : RM500,000,000

Issued and Paid-up Capital : RM80,000,000 divided into 160,000,000 shares of

RM0.50 each

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2.0 General Environment Analysis

2.1 Political Factors

Malaysia is a politically stable country. The government has been headed by the UMNO

since independence, while the ruling coalition, the Barisan Nasional (BN), has won every

general election. The ruling Barisan National party has been in power over 25 years. (The

fact provided the country with a high degree of stability, which is important factor for

businesses investing in the country)

Corruption does exist in the country. The may be a barrier for foreign country to

invest in Malaysia. But the Government has also pledged to implement the appropriate

policies and provide its support for the creation of a conductive environment for business

and investment.

Next, foreign exchange rates will have impact on the cost of materials. In other

words, unfavorable foreign exchange movement against Ringgit Malaysia (RM) would

have a negative impact on the profitability of Yi-Lai Industry Berhad.

2.2 Economic Factors

Economic factors are referring to factor the outside economic issues that can play a role

in a company's success. For example, economic growth, exchange, inflation and interest

rates, the current business cycle of the country where the company is located in and

unemployment policies.

The ceramic and homogenous tile manufacturer acknowledged that the operating

is becoming increasingly challenging with the hike in electricity and natural gas tariffs,

and intense competition amongst local tile manufacturers and from imported tiles

Due to uncertainties surrounding the recovery of the global economy, particularly

the economic growth in China, which has led to softening of international tile prices and

volatile raw material prices, the operating environment for the tileindustry, is expected to

remain challenging On the domestic front, tilesdemand remain to grow for the medium-

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range ceramic tiles in Iskandar Malaysia with affordable housing projects by state-owned

and the government-linked companies.

2.3 Social Factors

Social factors are referring to the demographic and cultural aspects that can help

determine whether a business can compete in the current market. These factors help

businesses examine consumer needs and what pushes them to make purchases. For

example, country demographics, population growth rates, age distribution, attitudes

toward work, lifestyle changes, education and environmental and health consciousness.

Annually, the Group has been making contributions financially to various

charitable organizations with the hope of making a positive difference to the lives of the

less fortunate. The Group also donated ceramic tiles to schools, orphanage homes, and

religious places in order to fulfill their needs for expansion or improvement of their

premises. In year 2013, the Group sponsored ceramic tiles to a secondary school for their

assembly hall with floor area of about 10,000 sqft, which was destroyed by fire.

The Group also acknowledges that employees are its best assets and will continue

to invest in staff development programmed so as to equip and develop our work force

with both technical and soft skills. In addition, the Group also presented achievement

awards to our employees' children who excelled in the government examinations. Sports

and other activities were carried out with the full support and commitment of our

employees, through the Group's sports club, with a view of providing a healthy lifestyle

for our employees and their families.

2.4 Technological Factors

Technological factors are referring to the issues that impact how an organization brings

its product or service to the marketplace. Depending on the technology available, it can

make it easier or harder to enter the industry and increase production level. For example,

new technology advancements, government spending on technology research, the life

cycle of current technology, the role of the Internet and any changes to it play and the

impact of potential information technology changes.

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Malaysia technology has improved over time, many researches and development

had made in order to improve the current technology that the country owed. The

advanced technology is helps in goods manufacturer. The productivity is increasing due

to the production are all based on machine. In economic theories, an increasing in

productivity will lead to a lower cost of goods because the cost of bulk purchase of raw

material becomes cheaper. Besides that, the machine that using in production is utilize

hence the cost that used in labor recruitment is decrease because everything is done by

using machines. In the long run, it decreases the cost of production and increase the profit

of the company.

Alpha Tiles searched for specialized tile production technologies. Alpha Tiles was

the first in Malaysia to offer Slate Effect Homogenous Tiles, and today remains one of

the few manufacturers of these beautiful and strong tiles in Malaysia. Alpha Tiles are also

found in many important commercial structures, including:

• Penang’s tallest building, the Komtar Tower

• The plush Rockman Regency Hotel in Kuala Lumpur and

• The Macro Hypermarket in Ipoh .

The Government of Malaysia has chosen Alpha Tiles for several key public

facilities, such as:

• The new Sungai Buloh Hospital in Selangor

• KotaBahru General Hospital in Kelantan

• The Malaysian Islamic University-College in Nilai.

Besides that a new method of printing using digital techniques in which data and

image are printed directly from a computer onto tile. This technology allows them to

create an unlimited number of high-quality patterns and decorations, with fewer

materials, less waste and less development and production time than conventional

processes.

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2.5 Environmental Factors

Environmental Factors are referring to all those that influence or are determined by the

surrounding environment. For example, climate, weather, geographical location, global

changes in climate, environmental offsets etc.

In the course of conducting its business operations, the Yi-Lai Industry Berhad is

committed to identifying, managing and minimizing the environmental impact of their

business activities. Yi-Lai Industry Berhad works closely with their environmental

management consultants to help them manage the impacts and ensure that they comply

with all relevant environmental legislations.

Group subscribes to the safety, health and environmental regulations with a

systematic approach reinforced by constant training and monitoring to ensure the safety

and well-being of the company employees.

2.6 Legal Factors

Legal factors are referring to certain laws that affect the business environment in a certain

country while there are certain policies that companies maintain for themselves. Legal

analysis takes into account both of these angles and then charts out the strategies in light

of these legislations. For example, consumer laws, safety standards, labor laws etc.

In accordance with the requirements of the Companies Act, 1965 in Malaysia, Yi-

Lai Industry Berhad report the following:

a) In our opinion, the accounting and other records and the registers required by the

Act to be kept by the Company and its subsidiary companies of which we have

acted as auditors have been properly kept in accordance with the provisions of the

Act;

b) We have considered the accounts and the auditors’ reports of the subsidiary

companies of which we have not acted as auditors, as indicated in Note 46 to the

financial statements;

c) We are satisfied that the accounts of the subsidiary companies that have been

consolidated with the financial statements of the Company are in form and

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content appropriate and proper for the purposes of the preparation of the financial

statements of the Group and we have received satisfactory information and

explanations as required by us for those purposes; and

d) The audit reports on the accounts of the subsidiaries did not contain any

qualification or any adverse comment made under Section 174(3) of the Act.

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3.0 Task Environment

3.1 Porter’s Five-Forces Model Analysis

Porter’s five forces analysis consists of five forces, which are threats of new entrants,

rivalry among competing firms, threats of substitute product and services, bargaining

power of customers, bargaining power of suppliers and relative power of shareholders.

3.1.1 Rivalry among competing firms

Rivalry refers to the degree to which firms respond to competitive moves

of the other firms in the industry. One firm only can be success compete

with others competing firms through pursue a competitive advantage

strategies. Competitive rivalry is likely to be based on dimensions such as

price, quality, and innovation.

Moreover, technological advances also protect companies from

competition. Companies that are successful with introducing new

technology are able to charge higher prices and achieve higher profits.

Therefore, rivalry within the industry is relatively low due to the Alpha

Tiles have the specialized tile production technologies which was the first

in Malaysia to offer Slate Effect Homogenous Tiles, and today remains

one of the few manufacturers of these beautiful and strong tiles in

Malaysia.

With that said, there are only a handful of competitors within the

ceramics industry. Yi-Lai Industry Berhad ceramics virtually faces no

completion in the local market and some competition from countries such

as China and Thailand, due to cheaper sources of labour, raw materials

and imports, sacrificing high quality.

Furthermore, the Yi-Lai Industry Berhad is known for having

strong strategies to remain competitive such as setting international

competitive standards and joint ventures with other companies in order to

utilize technological advances to create better line of ceramic goods.

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3.1.2 Threat of substitute products

A substitute product is a product that appears to be different but can

satisfy the same need as another product. The existence of products

outside of the realm of the common product boundaries increases the

propensity of customers to switch to alternatives.

The ceramic industry faces intense competition with low priced

goods such as tiles, sanitary and table ware that are majorly produced and

imported from China due to lower costs. In addition, the industry faces

completion from substitute products offered by companies in other

industries.

Like Yi-Lai Industry Berhad, other companies within the ceramic

and tiles industry are facing competition from manufacturers of substitute

products, thereby decreasing annual profits. Consumers often purchase

substitutes of ceramic products due to the convenience in terms of

availability and the attractiveness of lower prices. These substitutes

include several variations of tiles, crockery and wares such as melamine,

steel, glass, aluminium, stones such as marble, wood, and most commonly,

plastic wares.

Furthermore, imports of such substitutes have rapidly increased in

the past decade to a soaring fourfold. Manufacturers of these goods have

expanded their operations and capacities due to this to keep up with fierce

competition and exportation, thereby introducing more product lines to

attract a broader range of consumers.

3.1.3 Threat of new entrants

Profitable markets that yield high returns will attract new firms. This will

results in new entrants, which eventually will decrease profitability for all

the firms in the industry.

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Threat of new entrants to Yi-Lai Industry Berhad is relatively high.

This is because, Yi-Lai Industry Berhad has the advantage of not having

local competitors, but the ceramic and tiles industry has large amounts of

fixed costs involved, therefore the industry is capital intensive, making it

an entry barrier that limits potential threats of new entrants. In addition,

the need of automation and large investment in technological advances

pose as further entry barriers.

There has been significant growth in the demand for ceramic

products over the years and countries such as Bangladesh that enjoy cheap

labour, ease of access to raw materials needed coupled with duty free

exports to countries in Europe due to lack of quota restriction from a

generalised system of preference, increasing the gap between demand and

supply, it poses a threat of entry to the international ceramic market.

Imports of ceramic products coming from countries such as China

also pose a threat of new entry due to low import costs as they have

manufacturing plants of their own that produce large quantities of ceramic

goods, sacrificing quality.

3.1.4 Bargaining power of buyers

Bargaining power of buyer for Yi-Lai Industry Berhad which means the

ability of customers to influence the price and terms of purchase is near to

moderate. This is because, the present scenario of buyers demand is

changing relatively big size tiles are now in fashion as customers are

making now their home look aesthetics and giving it luxurious and the per

capita consumption of ceramic tile in Malaysia is low.

Moreover, demand for ceramic tiles is primarily led by an increase

in construction activities globally. Demand for construction in housing as

well as commercial sectors is rising due to growing economies,

urbanization, higher per capita income and spending, population

expansion and other such factors that are increasingly being witnessed in

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emerging economies. Additionally, usage of ceramic tiles fulfills the

demand for better aesthetics, structural reliability and sustainability

without a significant increase in prices. This has led to construction of a

higher number of buildings with usage of ceramic tiles in walls and floors.

These factors have collectively boosted the overall demand for ceramic

tiles.

3.1.5 Bargaining power of suppliers

The other relative power for Yi-Lai Industry Berhad is the suppliers.

Suppliers can affect an industry through their ability to raise prices or

reduce the quality of purchased goods and services.

As with other high quality ceramic and tiles competitors, Yi-Lai

Industry Berhad needs to import high quality raw materials for producing

quality ceramic and porcelain tiles. The raw materials such as potash

feldspar, soda feldspar and clay from countries such as Thailand,

Malaysia, Indonesia and India, glazes and fritz from European countries

such as Spain. Furthermore, other imported high quality materials include

vitrified high alumina porcelain from mines of Germany and UK which

are of the highest quality. Therefore the raw materials alone account for

most of the total production, apart from manufacture and technology. With

that said, it is evident that the base of suppliers within the ceramic industry

is big enough to weaken the bargaining power of suppliers.

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4.0 S.W.O.T Analysis

SWOT analysis is a structured planning method used to evaluate the Strengths,

Weaknesses, Opportunities, and Threats involved in a project or in a business venture. A

SWOT analysis can be carried out for a product, place, industry or person. It involves

specifying the objective of the business venture or project and identifying the internal and

external factors that are favorable and unfavorable to achieving that objective. Table

below shows SWOT analysis of Yi-Lai Industry Berhad;

Strength Weakness

Established a strong trusted brand

in tile industry.

experienced

Specialized Tile production

technology

Efficient management, specialist

and educated focus

High quality of the product

High material cost

Deep dependency on the local

market and little international

experience

Dependence on foreign suppliers

in the supply of parts, raw

materials and equipment

competitive market

Weak international competitive.

Opportunity Treat

High demand in the country for

tile and changing the culture of

society toward consumerism

Adapt strategic to consumer needs

Access to new markets.

Technology advanced

Constantly changing demand

interest of consumers

Importing products from China

High inflation rate might raise

operating cost significantly

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demand to grow for the medium-

range ceramic tiles in Iskandar

Malaysia with affordable housing

projects by state-owned

rising cost of raw materials

Global trend towards improvement

of the overall products quality.

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5.0 T.O.W.S Matrix

TOWS matrix is a commonly used strategic planning matching tool that provides

structure or clarifies strategic analysis. This technique guide complex decision making by

effectively removes subjectivity and emotion from the decision process, and help in

generate of several options or strategies for Yi-Lai Industry Berhad.

Strength

S1. Established a strong trusted

brand in tile industry.

S2. experienced

S3. Specialized Tile production

technology

S4. Efficient management,

specialist and educated focus

S5. High quality of the product

Weakness

W1. High material cost

W2. Deep dependency on the local

market and little international

experience

W3. Dependence on foreign

suppliers in the supply of

parts, raw materials and

equipment

W4. competitive market

W5. Weak international

competitive.

Opportunity

O1. High demand in the

country for tile and

changing the culture of

society toward

consumerism

O2. Adapt strategic to

consumer needs

O3. Access to new markets.

O4. Technology advanced

O5. demand to grow for the

medium-range ceramic

Market Development

SO1. Introducing the brand

company in neighboring

countries and provide diverse

and high quality products

according to their cultural

characteristics(S5,O3)

SO1. Using experience company

and information management

systems to improve

efficiency, quality and variety

of products to compete in

Product Development

WO1. Provide distinctive and

unique

products to dominate certain

sectors and markets with high

profitability

Market Development

WO2. Institutionalize a culture of

customer orientation and

teamworkto succeed in

domestic and foreign

markets

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tiles in Iskandar

Malaysia with

affordable housing

projects by state-owned

and the government-

linked companies..

markets abroad (S4, O2)

Product Development

SO2. Use of specialized and skilled

personnel to innovation in

manufacturing and marketing

products. (S1,S2,S3,01,O5)

Treat

T1. Constantly changing

demand interest of

consumers

T2. Importing products

from China

T3. High inflation rate

might raise operating

cost significantly

T4. rising cost of raw

materials

T5. Global trend towards

improvement of the

overall products

quality.

Market Penetration

ST1. Support innovation in order

to response identify and

respond to the diverse and

changing needs of customers

(S2, S4, T1, T5)

Market Development

ST2. development of Interaction

with external and

professional sellers

international marketing

(S2, S5, T5)

Strategic Alliance

WT1. Collaboration with suppliers

and Benchmarking of

competitorsto reduce the

problems oftechnology,

reduce costs andenhance

quality (W1, W2, W3, W4,

W5, T2, T3, T4, T5)

Product Development

WT2. Continuous improvement of

quality and cost structure to

increasing international

competition(W4, W5, T2, T5)

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6.0 Ratio Analysis

Formula 2012 20131) Current ratio =

Current assetsCurrent liabilities

139,302,01818,618,727

= 7.48 : 1

145,740,02621,831,037

= 6.68: 1

2) Quick ratio =

current asset−InventoryCurrent liabilities

139,302,018−54,123,29918,618,727

= 4.57 : 1

145,740,026−44,608,75321,831,037

= 4.63 : 1

3) Average collection period = [ 39,896,485+35,871,9702

]

130,965,368×365days

= 105,58 days

[ 43,545,467+39,896,4852

]

157,487,515×365days

= 96.69 days

4) Receivable turnover =Annualcredit sales

Average Accounts Receivable

130,965,368

[39,896,485+35,871,970

2]

= 3.46 times

157,487,515

[43,545,467+39,896,485

2]

= 3.77 times

5) Payable turnover =Annual credi t sales

Average Accounts Payable

130,965,368

[18,538,548+18,290,963

2]

= 7.11 times

157,487,515

[19,965,764+18,538,548

2]

= 8.18 times

6) Inventory turnover =Cost of good sold

Inventory

106,726,189

[54,123,299+52,529,960

2]

= 2 times

128,540,211

[44,608,753+54,123,299

2]

= 2.60 times

7) Total assets turnover =Sales

Totalassets

130,965,368

[223,032,124+222,815,751

2]

= 0.59 : 1

157,497,515

[225,186,444+223,032,124

2]

= 0.7 : 18) Fixed assets turnover =

Sales¿assets

130,965,368

[83,730,106+86,149,815

2]

= 1.54 : 1

157,497,515

[79,446,418+83,730,106

2]

= 1.93 : 19) Debt ratio =

TotaldebtTotalassets

26,373,727223,032,124= 0.12 : 1

28,603,037225,186,444= 0.13 : 1

10) Debt equity ratio =Total liabilitiesTotal equity

26,373,727196,658,397= 0.13 : 1

28,603,037196,583,407= 0.15 : 1

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11) Times interest earned =OperatingincomeInterest expense

13,681,0453,623,456

= 3.78 times

16,259,7924,126,972

= 3.94 times

12) Gross profit margin =Net sale−COGS

Net sales

14,296,231130,965,368

×100 %

= 10. 92%

16,769,783157,497,515

×100 %

= 10.65%

13) Operating profit margin =Operatingincome

Net sales

13,682,045130,965,368

×100 %

= 10.45%

16,259,792157,497,515

×100 %

= 10.32%

14) Net profit margin/Return on Sales(ROS) =

Net profitNet sales

10,672,775130,965,368

×100 %

= 8.15%

12,642,811157,497,515

×100 %

= 8.03%

15) Return on assets(ROA) =Net income

Average total assets

10,672,775223,032,124+222,815,751

2

×100 %

= 4.79%

12,642,811225,186,444+223,032,124

2

×100 %

= 5.64%

16) Return on equity(ROE) =Net income

Average totalequity

10,672,775196,658,397+196,560,291

2

×100 %

= 5.43%

12,642,811196,583,407+196,658,397

2

×100 %

= 6.43%17) Earnings per share(EPS) =

Net income−¿Dividends onpreferred sharesWeighted averagenumberof commonsharesoutstanding

10,672,775155,719,000

×100 %

= RM 6.85 per syer

12,642,811155,086,000

×100 %

= RM 8.15 per syer

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A) Current Ratio

Current Ratio 2012 2013 Changes

7.48 6.68 Down 10.70%

By this ratio we can see that, this company’s current ratio is 7.48 in the year of 2012 and

6.68 in the year of 2013 which is lower than 2012. So company’s current ratios change is

decrease 10.70%.

B) Quick Ratio

Quick Ratio 2012 2013 Changes

4.57 4.63 Up 1.32%

By this quick ratio, we can see that in the year of 2012, this company’s quick ratio is

improved than the year of 2013 & its percentage change is grow up to 1.32%. That is

better for this company.

C) Total Debt Ratio

Total Debt Ratio 2012 2013 Changes

0.12 0.13 Up 8.33%

Here, we find that, in year 2013 percentage of total debt ratio grows up from 0.12 to 0.13

than the year of 2012. For this increasing of the total debt ratio, this company is now in a

bad position.

D) Total Equity Ratio

Total Equity Ratio 2012 2013 Changes

0.13 0.15 Up 15.38%

By this ratio we can analyses that, this company’s debt equity ratio is grow up in 2013

than 2012. So, it is not favorable for this company.

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E) Return On Assets (ROA)

Return on Assets

(ROA)

2012 2013 Changes

4.79 5.64 Up 17.75%

By this ratio we can see that this company’s return on asset is increase in the year of 2013

than 2012 & its percentage change is growing up to 17.75%.

F) Return on Equity (ROE)

Return on Equity

(ROE)

2012 2013 Changes

5.43 6.43 Up 18.42%

This company’s return on equity is also growing up in 2013 than 2012 which is 18.42%.

G) Earnings per share (EPS)

Earnings per share

(EPS)

2012 2013 Changes

6.85 8.15 Up 18.98%

It can be say that the EPS are increase from year 2012 to 2013 which is 18.98%,

therefore, it become more dividens can be received after each shares owned.

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H) Cash Conversion Cycle

Inventory Turnover 2012 2013 Changes

2 2.60 Up 30%

Receivable Turnover 2012 2013 Changes

3.46 3.77 Up 8.96%

Average Collection 2012 2013 Changes

Period 105.58 96.69 Down 8.42%

Payable Turnover 2012 2013 Changes

7.11 8.18 Up 8.96%

Formula 2012 2013

Collection Period 365Receivable Turnover

105.49 96.82

Inventory

Conversion

365Inventory Turnover

182.5 140.38

Payment deferral

period

365Accounts PayableTurnover

51.34 44.62

Cash Conversion Cycle = (Collection period + Inventory conversion period) – Payment

deferral period

Cash Conversion

Cycle

2012 2013 Changes

236.65 192.58 Down 18.62%

So, it is efficient for this company.

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7.0 Strategic Direction

In order to conclude the TOWS and SWOT analysis we will say that Yi-Lai Industry

Berhad needs to consider many aspect of its current way of doing business and try to

combine its strength with the opportunities arising from the external environment. One

the other hand, the company must be aware of the weak side of its current strategy and try

to minimize the risk coming from outside threat. There are quite few of strategies that can

be used:

A) Market Development

• Adapt strategies to consumer needs

It’s an important task for Yi-Lai Industry Berhad to better understand the habits of

customers, their lifestyle tastes, colour preferences, social patterns, as well as

environmental conditions and other contributing factors that help us determine the

best designs for each target market. This would help Yi-Lai Industry Berhad to

steal more market share if the products supply is over demand by the customer

due to their needs.

B) Strategic Alliance

Strategic alliance is a new concept in the lodging industry which involves strategic

collaboration and working relationships with one or more partners to create joint

authority and structure to carry out a common mission. Strategic alliance often formed

with competing firms that possess complementary skills and resources. For example, if

Yi-Lai Industry Berhad collaboration with other country ceramic tiles company. Both

company can shared expertise, more clout, and a greater range of knowledge and also

open the opportunity of international market. Hence, enhance the overall quality of good

produce,and reduce costs .

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C) Product Development

Product development can be defined as improving an existing product or developing new

kinds of products. Product development is important to ensure that the products or

services remain competitive. The company can be benefited from this strategies and it is

important to increase uniqueness and competitive position in their arena.

Yi-Lai Industry Berhad continues innovating in order to become the leaders in

Malaysia's tiles industry. Reconstruction and modernization of existing technology of

Ceramic Tiles to meet the international standard by improving the quality and develop it

into international marketThe consultant should identify types and quantities of equipment

necessarybetter facilities and test equipment.

Thus, constant investments in high quality and efficient production processes,

cleaner technologies, logistics systems and innovative products, while maintaining a

trained and motivated workforce, must be continued and encouraged.

D) Market Penetration

Strategies that are formulated from the TOWS analysis are market penetration.

Market penetration can be defined as seeking increase market share for present products

or services in present market through greater marketing efforts. The company needs to

penetrate the market by advertising or promoting. This strategy will help the company

with greater opportunities destination marketing and benefits that derived from

economies of scale. For example, Yi-Lai Industry Berhad may launch an advertising

campaign to generate greater brand awareness or implement a short-term promotion with

a finite ending date. A promotion is often linked with pricing, such asadvertising a special

sale price for a limited period. A competitor may counter a successful promotion with

one of its own in an attempt to regain lost market share.

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8.0 Best Strategies Recommendation

Within these 4 strategies, Market Development, Strategic Alliance,Product Development

and Market Penetration, we recommend that the Product Development strategy is the

most suitable for Yi-Lai Industry Berhad operation.

Product Development strategic occurs if company willing to invest more in the

Research and Development to produce a new product or improve existing products. Yi-

Lai Industry Berhad need to capable in this strategic technology that consistently focus in

Resource and Development process. The Resource and Development help a company to

invest in new products or innovative products and services. Having world control facility,

Yi-Lai Industry Berhad need to do more in Research and Development and to be strong

in this field to using the facility to control and produce the products. For example, Alpha

Tiles already specialized the tile production technologie and it was the first in Malaysia to

offer Slate Effect Homogenous Tile that today only remains one of the few manufacturers

that can produce beautiful and strong tiles in Malaysia.

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9.0 References

a) Bain, J. S., (1956), Barriers to New Competition, Cambridge, Harvard University

Press, US. Conference, 4-5 September.

b) Chaghooshi, Ahmad J.,Rahmani, M. and Zarchi, Mohammad K. (2012) Proposing

a Framework for Strategic Positioning in Tile and Ceramic Industry (Integrated

Approach), Journal of American Science, 8(6): 91-99.

c) David, Fred R. (2011) Strategic management: concepts and cases, Upper Saddle

River, N.J. : Pearson/Prentice Hall.

d) EC (2007a), Reference Document on Best Available Techniques in the Ceramic

Manufacturing Industry, August 2007. Conference,4-5 September, Tehran.

e) Hunger, J. David and Wheelen, Thomas L. (2011) Essentials of strategic

management, Upper Saddle River : Prentice Hall.

f) Hill, Charles W. L. and Jones, Gareth R. (2009) Theory of Strategic Management,

Canada, South-Western Cengage Learning.

g) Hosseini SM, Panahi M. 2007 .creating competitive advantage in the tile industry

with approach of key factors of success (case study of Iran tile industry ) Website

SID.

h) Jalilians J, Akbari P.2013. A comparative study of strategic management and

strategic planning . Studies and Research Center of Joseph.

i) Lipczynski, J., and Wilson, J., (2001), Industrial Organisation: An Analysis of

Competitive Markets, Pearson Education Limited, UK.

j) Office for National Statistics (2007), Quarterly Energy Prices December 2007, A

National Statistics Publication.

k) Panahi M. 2006. International market entry strategies for the ceramic tile industry

of country , International Marketing Management.

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l) Peterson (2003), S. H., the Craft and art Of Clay, A Complete Potter’s Handbook,

Fourth Edition, Laurence King Publishing.

m) Porter, M. E., (1996), ‘What is Strategy?’, Harvard Business Review, Nov-Dec

1996, pp 61-78.

n) Sutton, J., (1991), Sunk Costs and Market Structure: Price Competition,

Advertising, and the Evolution of Concentration, The MIT Press.

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