In today life style people are looking for new innovations and the willing to pay how much money for buy and use the product for fulfill and satisfy their need and want. Organizations are producing more innovative product to their customers to gain profit. Some organizations are producing the similar product but the still having their own customers and they gain their profits. But some of them become the cost leader for that particular product. What is cost leader? Cost leader is an organization is become a major part in that particular product by producing their product in low cost but they have high quality and they have more customers compare from other competitors. They will get their row material or other supply in low cost compare from other competitor or they have major share in the product in that country so they become the cost leader compares others. For example the organization is produce that product 60% in that country and other organizations are produce that familiar product in 30%, so the organization the produce 60% of that product became the cost leader. And the government will support them by reducing tax because of that organization is playing a major part for improving or increasing the country economic in higher compare to other country. Also the organization can get their supply in less price because they are producing more product compare to other industries that producing the same product because they will buy more supply compare others so the suppliers will reduce the price of the metrical compare to other company price if they didn’t give that price that demanded by the cost leader he will find other suppliers for his productivity. So cost leader is playing a important part in the business world. In this assignment we have been ask to identify two very different organizations that compete on cost leadership strategy. And identify how they to their business and become the cost leader. The two organizations that we chose are Proton and Perodua.
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Proton is an organization that produce car or we can call motor vehicle product in our country. Proton (Perusahan Otomobil Nasional Berhad) was started in 7 of May 1983 and they produce motor vehicle in Malaysia. Proton is the 1st company that produce Malaysians first car. Proton saga was the first car that produces by proton and it was lunch by Tun Dr. Mahathir Mohamed on 9 of July 1985. Perusahan Otomobil Nasional Berhad or proton is an organization that linked with GLC (government linked company). Proton has his ranked in market as national car in Malaysia.
Perodua
Perusahaan Automobile Kedua Sdn Bhd (PERODUA), established in 1993, is a joint venture company between Malaysian and Japanese partners. Perodua is the second large automobile company in Malaysia after Proton. The first car that produces by perodua is Perodua Kancil at the year of 1992. The shareholders of Perodua are UMW Corporation Sdn Bhd 38%, MBM Resources Berhad 20%, Daihatsu Motor Co. Ltd 20%, PNB Equity Resource Corporation Sdn Berhad 10%, Daihatsu (Malaysia) Sdn Bhd 5%, Mitsui & Co. Ltd 4.2% and Mitsui & Co, (Asia Pacific) Pte Ltd 2.8%. The company started operations in 1994 and the ever so popular Perodua Kancil was introduced to the Malaysian market in August the same year. As of 30 September 2010, Perodua has sold some 1.85 million units of vehicles of various models. Perodua Auto Corporation Sdn Bhd (PCSB) was established in the final quarter of 2001. Besides Perodua, the two other joint venture partners of PCSB are Daihatsu Motor Co. Ltd. and Mitsui & Co. Ltd both of Japan. The manufacturing operations of the Perodua Group are being managed by PCSB.
How both Proton and Perodua is compete on their cost leadership.
Proton was the first motor vehicle company that formed in Malaysia and our Malaysian government has 53 present of share in proton. So for proton they don’t need to wary about capital because the background or support for their productivity is covered by the government of Malaysia. Proton has varies type of car models like proton saga, proton iswara, proton wira and more. They also combine with Lotus Car manufacturing company from British and the produce Campro engine for their proton cars. These are making advantage for the Proton Company to improve or increase their productivity. Also proton producing bigger car compare to perodua and it make an advantage for family members because if they buy a proton car they can have a comfort felling because the car have more species so people can fit more compare to perodua cars. And they also producing proton car with higher performance or higher capacity of power to support the care go in to faster compare to preodua.
Perodua is the second motor vehicle company that formed in Malaysia and they are mainly producing smaller car compare to proton. Perodua is producing their car engines with the help of Daihatsu Motor Co., Ltd from Japan. The capacity of the engine is less compare to proton cars because perodua cars are smaller and they can’t have high power for their engine it will be a problem for the productivity and also in will cues problem for the user. Perodua is producing smaller care because the cost of care leaser compare to proton. Because proton car are normally bigger and more convenient compare to perodua and also the price of the car is more expansive compare to perodua. Perodua is lesser price compare to proton because the capacity is lower compare to proton.
Top 10 National Vehicles
No. of car
Top 10 non-National Vehicles
No. of car
Perodua Myvi
7433
Toyota Vios
3192
Perodua Viva
6533
Honda City
1901
Proton Saga
5924
Toyota Hilux
1480
Proton Persona
4461
Nissan Grand Livina
1193
Perodua Alza
3210
Honda City
1016
Proton Exora
2866
Toyota Avanza
924
Proton Waja
499
Toyota Camry
901
Proton Satria Neo
481
Mitsubishi Triton
786
Proton Gen2
208
Honda Accord
728
Proton Savvy
46
Honda CR-V
800
Above table is identifying the top 10 National vehicle and top 10 non national vehicles that sold by the car companies at last year. From the table we can identify that Perodua Myvi is the fast sealing national car in Malaysia. Second place also is taken by another Perodua product that is Perodua Viva. The 3rd and 4rt place is taken by Proton Saga and Proton Persona from Proton Company. From this we can identify that Perodua is the cost leader for car sealing in last year. Whey perodua is become the cost leader whiter Proton is have more support by the government. Because the prices of the perodua cars are lesser compare to proton. People are buying perodua cares because the price is lesser, the mentanan charges are chaper. A full tank of petrol for Perodua is cheaper than full tank for Proton cars. The performance of Perodua car also fulfills the customers. Another reason why perodua get high market because in this economical world people don’t have the money for fulfills their needs. A car is a major par for a person or a family for their daily uses. So perodua produce a car that can be buy by everyone in Malaysia. Also perodua give more than one type of car at the same time and the price also not higher. So people have choices and the amount of the car cheaper so they can buy. For proton they produce a car with high performance and also the price is high so people can afford to buy the care. So they compare with both car company and they prefer to the less cost care that fulfill they dally rotten life. Also the price of the perodua car is lesser but the performens of the car is in good condition compare to other competitor so the customers prefer to buy their car. Also perodua have their outlet every war in Malaysia so the user of perodua can serves their care in the serves center.
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