How many golden decades can a person have in a lifetime?
Most athletes get to enjoy up to two decades before having to retire. For entrepreneurs, the first decade is typically spent laying the groundwork for the coming two decades. As for Chinese SMEs, their average lifespan is only three years.
Over the past 3 decades, Senheng has managed to keep pace with the times and bounce back despite the dips in performance.
In the last chapter of New Retail + New Platform, we reflect back on the four waves of transformation that has managed to set Senheng apart - ensuring their golden years never end.
First: Reflect and improve
Second: Selection of suppliers
Third: Build identity and unify
Fourth: Supply chain management
After his “awakening” in Chapter 11, Managing Director Lim Kim Heng was determined to implement a full enterprise reformation.
Of course, change is not always pleasant. After implementing the “WANTED” poster in effort to resolve a mountain high of problems, many employees left the company. Only those with the same vision held on and continued to weather the storm hand in hand with the company.
The second wave of reformation was on the suppliers. Lim wanted Senheng to be associated with high-quality brands, leading to the difficult decision to phase out low-end suppliers that did not match its brand direction.
Initially, the company lost a group of customers who were loyal to lower-priced items. In the long run however, Senheng succeeded in their vision and were unaffected from the hypermarket fierce price wars.
Customers who were looking for lower-priced items turned to Carrefour and Tesco, while Senheng continued to enjoy eleven more years of prosperous growth with premium products.
Lim believes that “In order to build a brand with longevity, the customers must always think of you when they think about a specific category.”
It has been the norm for retailers to stock multiple brands and place all the brands signage in front of their shop. Despite this, Senheng underwent a corporate identity transformation, replacing the suppliers’ names on their signboards with a single Senheng brand.
The bold move elevated the company above its peers, resulting in the Senheng we know and love today.
The last wave of transformation was by way of Senheng’s supply chain management. As a retailer, being able to optimise your inventory is paramount to success.
In the early 2000s, Lim decided to implement “order on demand” – that is, only place an order with the supplier when it is necessary. This is far from the common purchasing practice in the industry, where the retailer purchases a large amount of goods at the beginning of the month.
Senheng on the other hand, orders its inventory according to computerised sales records, estimation and safety stock level to improve its inventory planning. As a result of stocks being replenished on a daily basis, the company is easily more aware of price fluctuations, allowing them more time to take the lead in pricing strategy.
The first decade of your business will be full with challenges, but also exponential growth. Despite its maturity as a company, Senheng is always being injected with new ideas, resources and transformations.
“It’s like going back to the first golden decade during which our performance had continued to grow for eleven years” Lim puts it.
Senheng is like a sturdy bamboo. While it may bend from harsh economic winds, it will always rebound strongly thanks to its forward-looking business model and timely transformations to be the forerunner in the consumer electronic industry.
If you haven’t been following us through our New Retail + New Platform journey, click here to start from Chapter 1.
Keen to learn how to implement the same transformations for your company? Find out more about our corporate training packages here - gleaned from the same methods used by Senheng.