1.0 Background of Sheng Siong
Founded in 1985 by the Lim brothers (Mr Lim Hock Eng, Mr Lim Hock Chee and Mr Lim Hock Leng), Sheng Siong is one of Singapore's largest retailers with 48 supermarket stores located all across the island. They aim to provide customers with both “wet and dry” shopping options ranging from a wide assortment of live, fresh and chilled produce, such as seafood, meat and vegetables to packaged, processed, frozen and/or preserved food products as well as general merchandise, including toiletries and essen al household products. They have also developed a selection of house brands to offer their customers quality alternatives to national brands at substantial savings. To date, they have over 900 products under their 17 housebrands.
2.0 Roles of Family Business Members
Mr Lim Hock Eng is the Executive Chairman. His areas of responsibility include business strategy and planning and business administration. He manages their day-to-day operations, which includes overseeing the setting-up process for new stores, supervising the preparation and submission of bids and tenders for new premises, as well as the renovation works, equipment purchases and installations required to fit out such premises.
Mr Lim Hock Chee is the Chief Executive Officer and is responsible for overseeing their operations, setting the direction for new growth areas and developing business strategies.
Mr Lim Hock Leng is the Managing Director. He is responsible for overseeing their operations and developing their business in alignment with consumer preferences and consumption patterns. Mr. Lim also manages their day-to-day operations, including overseeing various aspects of the seafood business of their supermarkets.
Ms Lin Ruiwen, the daughter of Executive Chairman, Mr Lim Hock Eng, is the Executive Director. She is responsible for identifying, charting and implementing sustainable business strategies in new growth areas. Especially in merchandising, marketing, management and business development for fresh fruits and vegetables.
Mdm Lee Moi Hong, the wife of Chief Executive Officer, Mr Lim Hock Chee, is the Director/Head - Dry Goods.
Mdm Tan Bee Loo, the wife of Executive Chairman, Lim Hock Eng, is the Director/Head - Fruits and Vegetables.
3.0 Uniqueness of Sheng Siong
Sheng Siong offers quality goods at the lowest prices. It also strongly believes in offering customers quick and efficient service, and reckons it has the fastest cashiers and shortest queues.
4.0 Business Model and Practices of Sheng Siong
Sheng Siong's business model is one of low cost offerings and efficient customer service. CEO, Mr Lim Hock Chee reviewed the company's growth in 1998 after attending a management course. He developed a manifesto that identified employees as a key component of company culture. Employees are trained to work quickly, offer competent, polite service, execute stock-taking proficiently with Sheng Siong's suppliers, and manage supplier invoices promptly. This provides for an efficient process, which, together with bulk purchases, allows Sheng Siong to offer lower retail prices. Sheng Siong channels up to 60 percent of its profits towards bonuses, and employees can be rewarded with bonuses of up to 10 months' pay.
In 2006, the chain underwent a branding exercise in which its logo was revamped and the slogan “Sheng Siong…all for you!” was introduced. The Sheng Siong Show, a Chinese-language games-and-variety television show broadcast on Channel 8 since 2007, has been used for publicity and sales promotion.
5.0 Family and Business Relationship
Although Mr Lim Hock Eng, the Executive Chairman, Mr Lim Hock Chee, the CEO, and Mr Lim Hock Leng, the Managing Director, are siblings and Ms Lin Ruiwen, the Executive Director, is the daughter of Mr Lim Hock Eng, their roles in managing the day to day operations of the company are clearly defined. They know what is expected of them within the company. This allows them to understand, respect and value the unique contributions of one another and work harmoniously together.
Sheng Siong is also committed to achieving high standards of corporate governance. Some of its corporate practices are independent directors making up at least one-third of the Board, so there is a strong independent element that sufficiently enables it to exercise objective judgement, in spite of the Executive Chairman and CEO being siblings. No individual or group of individuals dominate the Board's decision-making process.
1. Low-cost strategy. Sheng Siong buys its products in bulk and looks to open stores with no competition and cheap rent. This allows the firm to offer affordable prices to its customers.
3. Proximity to customers. Sheng Siong aims to open its stores within dense residential catchments. This allows them to be near their customers.
4. Value-for-money image amongst consumers
5. Ability to provide a wide range of fresh products, which draws traffic and provides better margins.
6. Strong logistical capability, with its own distribution centre. The Mandai Distribution Centre allows Sheng Siong to perform direct sourcing and bulk handling. This effectively drives down input costs, resulting in cost savings and better margins.
1. Dependency on domestic market. Presently, Sheng Siong derives most of its revenue from Singapore. Although Sheng Siong has opened its first store overseas in Kunming, China it is still a wildcard as it has not yet proven to be successful.
2. Location constraint. Customers tend to visit grocery stores near their house.
3. Reliant on lower rent locations. As Sheng Siong outlets are mostly under HDBs. They are largely dependent on the supply of new supermarket retail space released by HDB and their ability to secure the tenders for store expansion.
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