E.F.R Group of CompaniesE.F.R Group of CompaniesAnnual General Meeting – 2007Annual General Meeting – 2007

Presented by Logistics Presented by Logistics ( Gold Shipping )( Gold Shipping )

Presentation OutlinesPresentation Outlines

Vision, Mission & Core ValuesVision, Mission & Core Values ObjectivesObjectives StrategiesStrategies

VisionVision

To be the To be the leaderleader in any industry in any industry where our group of companies choose to where our group of companies choose to operate either within Myanmar or operate either within Myanmar or OverseasOverseas

MissionMission

We are anWe are an innovative innovative organization and organization and continuously improvecontinuously improve our process, products and resourcesour process, products and resources

We are We are committedcommitted to meet our customer’s needs including to meet our customer’s needs including reliability, quality, service and efficiency in a manner that anticipates reliability, quality, service and efficiency in a manner that anticipates and and exceeds their expectationexceeds their expectation

We endeavour to provide We endeavour to provide challenging career developmentchallenging career development to to our employees through training, employee involvement and human our employees through training, employee involvement and human resource planningresource planning

We believe in the spirit of co-operation and co-ordination and We believe in the spirit of co-operation and co-ordination and intend to earn the confidence and respect of our member companies intend to earn the confidence and respect of our member companies by providing support, guidance, and share of information and thereby by providing support, guidance, and share of information and thereby survive and prosper togethersurvive and prosper together

Core ValuesCore Values

Honesty and IntegrityHonesty and Integrity

Trust worthinessTrust worthiness

TransparencyTransparency

AccountabilityAccountability

Team workTeam work

Staff DevelopmentStaff Development

HappinessHappiness

ObjectivesObjectives

Financial Objectives Strategic Objectives

Outcomes focused on Outcomes focused on improving improving financialfinancial performanceperformance

Outcomes focused on Outcomes focused on improving improving long-term, long-term, competitivecompetitive business business positionposition

$

To gain 30% market share in 2008

StrategyStrategy

??

The Five TasksThe Five Tasksof Strategic Managementof Strategic Management

Craft aStrategy

to AchieveObjectives

SetObjectives

Develop aStrategic

Visionand

Mission

Implementand

ExecuteStrategy

Improve/Change

Revise asNeeded

Revise asNeeded

Improve/Change

Recycleas Needed

Task 1Task 1 Task 2Task 2 Task 3Task 3 Task 4Task 4 Task 5Task 5

Monitor,Evaluate,and Take

CorrectiveAction

Crafting a StrategyCrafting a Strategy

Strategy involves determining Strategy involves determining whetherwhether toto• Concentrate on a single business or several Concentrate on a single business or several

businesses (diversification)businesses (diversification)• Cater to a broad range of customers or focus on Cater to a broad range of customers or focus on

a particular nichea particular nichePursue a competitive advantage based onPursue a competitive advantage based on

Low cost Low cost oror Differentiation Differentiation oror Unique organizational capabilitiesUnique organizational capabilities

Involves deciding Involves deciding howhow toto• Respond to changing buyer preferencesRespond to changing buyer preferences• Respond to new market conditionsRespond to new market conditions• Grow the business over the long-termGrow the business over the long-term• Achieve performance targetsAchieve performance targets• Outcompete rivalsOutcompete rivals

Crafting a StrategyCrafting a Strategy

The The HowsHows That ThatDefine a Firm's Strategy Define a Firm's Strategy

HowHow to grow the business to grow the business

HowHow to fulfill customers needs to fulfill customers needs

HowHow to outcompete rivals to outcompete rivals

HowHow to respond to changing to respond to changing market conditionsmarket conditions

HowHow to manage each functional unit of the to manage each functional unit of the business and develop needed organizational business and develop needed organizational capabilitiescapabilities

HowHow to achieve strategic and financial objectives to achieve strategic and financial objectives

Why Do Strategies Evolve?Why Do Strategies Evolve? There is There is alwaysalways an ongoing need to react to an ongoing need to react to

• Shifting market conditionsShifting market conditions• Fresh moves of competitorsFresh moves of competitors• New technologiesNew technologies• Evolving customer preferencesEvolving customer preferences• Political and regulatory changesPolitical and regulatory changes• New windows of opportunityNew windows of opportunity

Three Strategy HorizonsThree Strategy Horizonsfor Sustaining Rapid Growthfor Sustaining Rapid Growth

Source: Adapted from Eric D. Beinhocker, “Robust Adaptive Strategies,” Sloan Management Review 40, No. 3 (Spring 1999), p.101.

Portfolio of Strategy Initiatives

• “Short-jump” initiatives to fortify and extend current businesses

• Immediate gains in revenues and profits

Time

• “Medium-jump” initiatives to leverage existing resources and capabilities to pursue growth in new businesses

• Moderate revenue and profit gains now, but foundation laid for sizable gains over next 2-5 years

• “Long-jump” initiatives to sow the seeds for growth in businesses of the future

• Minimal revenue gains now and likely losses, but potential for significant contributions to revenues and profits in 5-10 years

Evaluation on current shipping industryEvaluation on current shipping industry

Slowing demand breeds stiffer competitionSlowing demand breeds stiffer competition More sophisticated buyers demand bargainsMore sophisticated buyers demand bargains Greater emphasis on cost and serviceGreater emphasis on cost and service International competition increasesInternational competition increases Industry profitability fallsIndustry profitability falls Mergers and acquisitions reduce the number of Mergers and acquisitions reduce the number of

industry rivalsindustry rivals

Characteristics of Industry MaturityCharacteristics of Industry Maturity

Strategy Options for CompetingStrategy Options for Competingin a Mature Industryin a Mature Industry

PrunePrune marginal products and models marginal products and models Emphasize Emphasize innovationinnovation in the in the value chainvalue chain Strong focus on Strong focus on cost reductioncost reduction Increase salesIncrease sales to present customersto present customers Purchase rivalsPurchase rivals at bargain prices at bargain prices Expand Expand internationallyinternationally Build new, more Build new, more flexible competitiveflexible competitive capabilitiescapabilities

Understanding a Company’s Strategy Understanding a Company’s Strategy What to Look ForWhat to Look For

Patternof Actions

That DefineStrategy

Actions to strengthen Actions to strengthen resources & resources & capabilitiescapabilities

Actions to diversifyActions to diversify Actions to outcompete rivals

Responses tochanging externalcircumstances

Actions to alter geographic coverage

Actions to form strategic alliances and collaborative

partnerships

How functional activities are managed

Efforts to pursue Efforts to pursue new opportunities or new opportunities or defend against threats defend against threats

Actions to merge or acquire rival companies

When Does DiversificationWhen Does DiversificationStart to Make Sense?Start to Make Sense?

Strong competitive Strong competitive

position, rapid market position, rapid market

growth -- growth -- NotNot a good a good

time to diversifytime to diversify

Strong competitive Strong competitive position, slow market position, slow market

growth -- Diversification growth -- Diversification is is top prioritytop priority considerationconsideration

Weak competitive Weak competitive

position, rapid market position, rapid market

growth -- growth -- NotNot a good a good

time to diversifytime to diversify

Weak competitive Weak competitive position, slow market position, slow market

growth -- Diversification growth -- Diversification merits merits considerationconsideration

When to Diversify?When to Diversify?

Diminishing growthDiminishing growth prospects in present business prospects in present business Opportunities to Opportunities to add valueadd value for customers or for customers or gaingain

competitive advantagecompetitive advantage by broadening present by broadening present business to include complementary productsbusiness to include complementary products

Attractive opportunities to Attractive opportunities to transfertransfer existing existing competenciescompetencies to new businessesto new businesses

Potential Potential cost-saving opportunitiescost-saving opportunities to be realized by to be realized by entering related businessesentering related businesses

AvailabilityAvailability of adequate financial and organizational of adequate financial and organizational resourcesresources

Actions to diversifyActions to diversify

Diversify into Related BusinessesBuild shareholder value by capturing cross-business strategic fitsTransfer skills and capabilities from one business to anotherShare facilities or resources to reduce costsLeverage use of a common brand nameCombine resources to create new competitive strengths and capabilities

Actions to strengthenActions to strengthenresources & capabilitiesresources & capabilities

Intellectual CapitalCareer development to our employees through training, employee involvement and human resource planning

Providing supports, guidance and share of information and thereby survive and prosper together

The Five TasksThe Five Tasksof Strategic Managementof Strategic Management

Craft aStrategy

to AchieveObjectives

SetObjectives

Develop aStrategic

Visionand

Mission

Implementand

ExecuteStrategy

Improve/Change

Revise asNeeded

Revise asNeeded

Improve/Change

Recycleas Needed

Task 1 Task 2 Task 3 Task 4 Task 5

Monitor,Evaluate,and Take

CorrectiveAction

Implement & executive strategyImplement & executive strategy

PDCA ( Plan, do, check, act )PDCA ( Plan, do, check, act ) TQMTQM Balanced scorecard Balanced scorecard BenchmarkingBenchmarking BPR ( Business Process Re-engineering )BPR ( Business Process Re-engineering ) Learning OrganizationLearning Organization

Monitor, evaluate & corrective actionMonitor, evaluate & corrective action

Thank YouThank You