SCG: Thriving Since 1913 - Southeast Asia's Oldest and Largest Cement Provider

Siam Cement public organization is the oldest and largest building material and cement in Southeast Asia and Thailand. The organization was developed in 1913, and it has been thriving due to favourable government policies and monetary conditions (Khan, 2017). SCG cement-construction materials segment is involved in the sale and manufacture of ready-mixed concrete, grey and white cement, dry mortar, ceramic tiles, sanitary fittings and wares as well as roof tiles. The company chemical segment comprises of gypsum, securities document and corrugated boxes, writing and printing paper. However, Siam cement group faces challenges due to the increasing cost of energy and unexpected expenses of crude materials. Thus, the company utilizes a strategic business approach to cope with the dynamic situation of the economic market. The SCG rebuild the company to improve business execution and set standards to boost production and operations. The transformative methodologies attained increases efficiency, streamline tasks, improve incomes and reduces expenses. Therefore, the paper analyzes the Siam Cement Group strategic plan prioritizing selection, implementation and evaluation.

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Alternative Strategy Generation

The market development rate of Siam Cement Company is moderate, although it proceeds to flow as time changes due to the expansion of infrastructure. The major SCG cement competitors are SimCity Cement and TPI Polene (Kim & Mauborgne, 2017). In 2015, Thailand joined AEC to expand its business efficiently in the nations under AEC membership. The distribution systems helped SCG companies both internationally and domestically, giving it a competitive advantage. Thus the extensive analysis of macro and microenvironment factors affect the cement industry.

Macro-Environmental Factors

Political and Legal Factors

SCG is closely connected with legislative and governmental offices in the tax collection. The administration can provide charge impetuses that are vital to the organization like exception charge for hardware that assists vitality production. Reducing tax collection in the Siam cement company improves its revenue but raising tax may bring an adverse impact on the business expansion (Khan, 2017). Political stability has contributed to the improvement of the company in terms of asset expansion. Also, permit and licenses make the Siam cement organization to manage various legislative offices to acquire necessary declarations and permits. Such as concession authentication of mining construction materials like limestone and shale from governments department of industrial work, forest, environment and natural resources, zero interest encourage individuals to invest in assessing more.

Economic Factors

Economic factors like current exchange rate fluctuation affect the Siam cement company. Bond makers manufacture concrete top measure for homestead utilization. For example, in the year 2010, the bond creation was estimated to 56 million tons, where 14 million was sent out (Khan, 2017). Currency exchange affects the company in terms of the balance sheet, sales forecast, supplier payment and USD conversation. Besides, global economic forces also affect the company. For instance, the exchange boundaries that is concrete levies on non-exchange obstruction and import. The evaluation showed that Thailand has a bond duty of 10 per cent, Vietnam 40%, and Philippines 0% (Kim & Mauborgne, 2017). Thus, the company intend to come up with proper ideas to select the business methodology regardless of whether to contribute cash on or to send out a concrete organization.

Technical Factors

Italcementi Corp created a friendly environment for innovation. For example, in the year 1999, the company developed TX technology. In case the cement was introduced in direct sunlight, the reaction could take place, minimizing air pollution by almost 45% (Garrido, Mora, & Gutierrez, 2016). The company is expected to improve more technical skills to meet the green consumer demand. The electrical plant which incorporates coal as the primary source of energy has introduced a system to supplement sulphur with limestone. In ecological factors, the increase in new import minerals and metals in ASEAN (Association of South-East Asian Nations) affects the Siam Cement Group.

Social Factors

People are the primary aspect concerned when a company intend to develop new market mostly in foreign nations, although few Thai individuals desire to work in foreign countries. Majority of persons are conservatives imposing challenges to SCG to send workers to ASEAN nations. Consumer behaviour has been dynamic depending on preferences on eco-friendly commodities. Thus, the company stress the necessity of high-value products and services where it introduces SCG Eco-value to enhance market segment.

Micro-Environmental Factors

Strength

The company has more than 100 companies and works in five business groups

It is the prominent concrete company in Thailand since 2000

Weakness

Low product mindfulness in countries outside Thailand

Putting into customers situated store and administration network

Lesser high proximity concerning the contenders

Opportunities

It has ventured into various countries

It can gain a competitive advantage over European and Asian countries

It has maintained loyalty among clients

Increased benefits in economies of scale Threats

Experiences changes in governmental policies

Dynamic in preference and taste

Change in environment, economic downturn and bond rivalry

Faces stiff competition in the cement industry and different portions

Siam Cement Company has been performing well, unlike other competitors such as TPI Polene and SimCity cement. However, the SCG has a weakness, which needs redress since the SCCC has become the top competitor for the company. SCG is trying to maintain the position as it expands the market to earn shares. Hence, the organization proper managed the strategic plan, and financial strength enables it to gain a competitive advantage in the industry.

Based on internal and external factors of SCG Company, three alternative strategies are generated that would improve the performance of the company.

Reducing the cost of production is essential for competitive advantage in the industry because cement contains low differentiation. SCG should build the market and prevent other companies from incorporating defensive strategy position. It should increase distributors to boost weak distribution channels. Connecting opportunities with the company strength and promoting weaknesses and avoiding threats is an excellent beginning to company performance. Secondly, changing the company leadership or management with proper problem-solving skills would help in coping with changes in government policies, alteration in inclination and perception, economic downturn, foreign exchange fluctuations and other threats facing the SCG. The last alternative is technological advancement. The company need to embrace modern technology and train employees the new method of doing business digitally. Innovation is a key strength which can improve the production of any business (Stewart, Schatz, & Khare, 2017). Hence the SCG should allocate its budget for technical skills to give better services to the customers.

Cultural and Organizational Factors that Influence Alternative Strategies

Organization culture determines the failure or success of the plan. It is the assumptions that company members share in common that is a systematic method of doing things. Various studies suggested that culture may affect both managers and the decision about the organization relationship with the surrounding environment and its strategy (Garrido, Mora, & Gutierrez, 2016). For instance, the company may intend to expand its business in other nations, but the employees may not be willing to work in new countries. Hence it is upon the leadership of the company to align organizational culture with a strategy to improve the business performance. Secondly, the mission and vision of the organization play a significant role in the strategic choice. What the company exist for might define the decision towards its objectives. The strategic choice may differ from one company to another since the vision and mission determine it. The company must know the purpose of its establishment and how it would attain its mission to incorporate and embrace in daily activities. Also, resource availability determines the company strategic choice. As managers select the strategy, they need to know how much budget is required for a particular plan. Change in policy needs resource shifting and budget allocation (Suehiro, 2017). Decision-making methods are vital since competence management team makes the company attain a competitive advantage. Thus, the availability of financial enables the company to choice crucial strategies as well as staff hired. Lastly, the organization structure is a significant factor which categories the work people need to do, where and when the decision is made. It influences, responsibilities and duties, division of labour, and distribution of decision-making procedures and power. Various companies implement their strategies via organization structures. Individuals working within the company should relate with others to support the plan. Hence, organization structure influences the strategy choices since corporate centres handle the decisions of the entire business.

Strategy Prioritizing

Innovation strategy may reshape the company structure leading to growth. These include venturing into a new market and building loyalty and trust with clients by offering the best products and services. Innovation means the SCG Company should have leaders who are risk-takers and implement the change once they happen. Another prioritized strategy is employee involvement. Engaging workers in decision-making improves the performance of the company. Teamwork performs well in roles and responsibilities hence assigning tasks to group members, scheduling work, and engaging in operating decisions, helps in establishing a relationship with customers and suppliers. Employees' involvement in the organization increases productivity because they feel comfortable since their opinions are valued. They help in sharing and discovering of new ideas as well as getting more insights on how to handle the customers. Finally, an adaptation of the organization design that allows the employees to change, learn and adapt new ideas improves the performance of the business. The Siam cement company needs to hire knowledgeable workers, willing to share their skills or knowledge with others that are applicable in the working environment to attain a learning organization. The learning organization design would benefit company culture since the staff with similar goals would share as a team (Garrido, Mora, & Gutierrez, 2016).

Strategy Selection

The first step in choosing a strategy is to evaluate other strategies used by competitors in the market place since gain an opportunity to acquire a competitive advantage. The next is to estimate the execution requirement and selecting the policy which will give long-term results. Finally, the worker's buy-in needs consideration because they are the ones to execute and implement the plan.

The best strategy recommended is expanding the business in the new market. Siam cement group has become stagnant in the rural demand and saturate in urban areas within Thailand without exploring new nations. Leadership and management need to venture to other areas to improve the market share. The trend of customers relocating more finished products gives Siam cement an incredible opportunity to build productivity. However, the trade relations among China and the United States can affect the developm...