Investigation of an SME in Singapore – One.99 Shop
1. Nanz Chong-Komo, one of the most successful models in Singapore in the 1990s, was the founder of One.99 Shop in 1997. By the end of six years of operations, the entrepreneur had already opened more than 10 stores whose merchandise sold at a uniform price of $1.99. By 2001, the entrepreneur’s turnover hit $14 million (Chong-Komo and Theresa Tan 2012). However, like in any other business, Mrs. Chong-Komo experienced significant challenges that made her exit the business. For instance, in 2003, Mrs. Chong-Komo learned that she was suffering from severe acute respiratory syndrome (SARS). When the disease struck, the success of One.99 Shop was badly injured to the point where the founder owed her bank and creditors approximately $3 million (Lee and Malcolm 2008). Soon thereafter, Mrs. Chong-Komo filed for bankruptcy to which she was declared. The unfolding events eventually forced the founder of One.99 Shop out of the business environment.
However, even during this period of difficulty, Mrs. Chong-Komo practiced business as a coach and motivational speaker. Mrs. Chong-Komo maintains that she learned several lessons from her experience with One.99 Shop, which points to the question of the alternatives that were available to the business entrepreneur instead of exiting. For instance, immediately SARS epidemic hit Singapore and Mrs. Chong-Komo became a victim, she had the choice of handing over the management of the stores by outsourcing such management services. By doing this, the business could run well even though the founder could be in quarantine. Secondly, as soon as the business operations expanded to over 10 stores, Mrs. Chong-Komo could seek investors to ensure propel the expansion of the business, thereby minimizing the risks that could result from various uncertainties. According to Godse (2013), sole proprietorship is always susceptible to internal and external business risks. As such, Mrs. Chong Komo had the alternative for seeking partnership by introducing other entrepreneurs into the One.99 Shop business.
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2. Lifestyle 1.99 Pte Limited was the major business competitor for One.99 Shop. In their behaviors, these competitors sought to ensure a significant expansion of their stores in order to improve their resilience against market forces. With a strong financial base and adequate resources, the competitors could also outsource most of their services, thereby bringing various management approaches that could not be afforded by the ‘small’ Mrs. Chong-Komo’s One.99 retailer (Chong-Komo, Wee, and Tan 2006). Similarly, using various pricing strategies, these competitors sought to improve their competitive advantages by luring customers through attractive product prices (Slabbert, Roodt, and Theron 2001). Branding was another behavior taken seriously by these giant competitors. For instance, Lifestyle 1.99 Pte Limited sought to make potential consumers confuse the name One.99 Shop with theirs.
By setting their prices exactly as that of ‘small’ companies such as One.99 Shop, the competitor organizations offered customers with a variety of options in the retail market. Promotional programs are other business behaviors used by Mrs. Chong-Komo’s competitors. Since business promotional is costly, small and developing organizations such as One.99 Shop with low financial capacity are likely to face a stiff competition (Freemantle 2011). In this sense, organizations such as Lifestyle 1.99 Pte Limited could use their resources to finance their marketing and promotional strategies, thereby improving their brand awareness more than small organizations struggling to build their resource and financial capacity.
With the foregoing explanation, it is evident that many organizations face several challenges by ‘being small.’ Among these challenges include the inability to outsource various services, inability to withstand strong competition due to poor financial capacity for promotional programs, and susceptibility to internal and external forces in the business environment (Freemantle, 2011). Before realizing growth and profitability, small businesses have the greatest challenge of building its brand. However, brand marketing requires a lot of investment in terms of time and finance.
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