Sourcing Strategies of Genting Group
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3.0 Sourcing Strategies of Genting Group
3.1 Acquisition
Star Cruise, another brand name under Genting Group acquired a large-than-itself Norwegian Cruise Lines (NCL) in March 2000. Now, it become the third largest cruise line in the world and the leading cruise line in Asia-Pacific, with a current fleet of 17 ships and over 200 destinations (Genting Group, 2014). Acquisition of the NCL allowed Star Cruise to enter into the sea-based business in several market such as North and South America, Europe, Australia and Hawaii.
Genting Group is a conglomerate company which carries different portfolio across businesses in Malaysia and international platform. Genting Group expanded from its core business which is leisure and hospitality to plantation, power supply and property development through acquisition of other companies. Despite that, its core business is still operated by themselves under Genting Malaysia Berhad and Genting Singapore P.L.C with the Resort World brand (Genting Group, 2014). At a later time, Genting Malaysia Berhad then stepped into the international stage acquiring other businesses and forming Genting UK in October 2010 (Genting Malaysia Berhad, 2014). Genting UK is now one of the leading casino operator in UK which provides high quality and customer focused gaming (Genting UK, 2014). Acquisition of Genting Malaysia Berhad in UK is the foundation which allowed Genting Malaysia Berhad continue to expand its business in UK. The first Resort World brand established on 1 July 2013 in UK is Resorts World Bimini located in the Bahamas and Resorts World Birmingham is the second resort which is still under construction; scheduled to open in mid-2015 (Genting Malaysia Berhad, 2014).
Moving from leisure and hospitality business, Genting Plantation also commenced its plantation business successfully through the acquisition of The Rubber Trust Group in 1980. Acquisition did not stopped there only as Genting Plantation continued to acquire Ko Rubber Companies in 1981 (Genting Plantaion Berhad, 2014). The acquisition of Ko Rubber Companies lead to 9,944 hectares of these plantation and 30 tonne per hour oil mill transferred to Genting Plantation. These acquisitions would have now proven to be the most astute decisions judging by the development potential of some of the land and the capital appreciation that has since taken place, particularly the 3,200 hectare out of 23,700 hectare to develop into residential area in Johor (Genting Plantation Berhad, 2014). Indirectly, this has marched Genting Group to start and move into property and construction business. Genting Group acquired Asiatic SDC Sdn Bhd in Sabah thus allowing Genting Group to takeover Tanjung Bahagia Sdn Bhd.
Acquisition strategy that is undertook by Genting Group is not just due to the group have sufficient cash, but it is also about the integration of brand and brand management practice. Such acquisition practice will not just give Genting Group a variety of brands but it will also pave new pathways for Genting Group to have variety of advantage and leverage from human resource, suppliers and even policies perspective.
3.2 Group Centralised Procurement via E-Sourcing
With the development of the Internet, it shifted the way Genting Group operate its business today. Internet now plays an indispensable role in bringing in new businesses via the virtual world, by using network to link people, assets and ideas all under one roof; removing the traditional organisational boundaries. The Internet bloom has encouraged e-sourcing to be done across the globe to help an organisation to add value to its operation chains. Genting Group’s Group Centralised Procurement via E-Sourcing provides real-time trading platform among Genting Group and the suppliers virtually. Intesource (2014) states that such procurement solution was only able to be used by Genting Group because both trading partner must clearly outline the qualities, quantities, designs, trading terms, conditions and other specification throughout the entire process.
Genting Group has a unit that manages the group centralised procurement via e-sourcing. Genting (2014) also stated that the group has also hired Ariba’s as the service provider to further increase the speed, efficiency and effectiveness of the sourcing activities. Ariba is a SAP company that provide spend management solutions to over thousand companies across the worldwide (Ariba Inc, 2014). The Software-as-a-Service (Saas) provided has enabled Genting carried out a competitive and best-value agreements with the suppliers. Ariba’s e-sourcing system also