SmartBingkai Enterprise operates five custom framing outlets. The five outlets offer a variety of services including matting prints and mounting print; framing photos, paintings, posters, and prints; and sales of posters and frames. About 85% of the business is the service of matting, mounting and framing of photos, prints and paintings. The main goals of the founder, Dato' Hamzan are growth and profitability; growth now and profitability later. He sees the business as a commodity-business in which other frame shops provide essentially the same services, and the competition is on price and quality. From his seven years in the business, he knows that any frame outlet's work has to be high quality or it will lose customer promptly. Therefore, he maintains quality as a necessary component of his business, and uses price and customer services to gain competitive advantage. The strategy has worked well for Dato' Hamzan as he has been able to grow from a single outlet five years back to five outlets at present. The additional outlets are managed by his extended family. To achieve a competitive price, Dato' watches his costs carefully and limits the amount of profit margin that he expects from each customer transaction. He looks for only an 8% markup over the total costs of the service. This policy has meant that initially his take home profits were not great, but the low price has enabled him to attract customers and to grow the business. Total profits have increased as the business has grown. To enhance his low-price approach, he has devised efficient techniques to provide his service, and he instructed his employee to follow his Techniques to be very efficient to their time and use of materials. He also has a profit-sharing plan that rewards each outlet employee when cost-per- service declines at that outlet. Required: a) Briefly explain the strategy that Dato' Hamzan use his business. (4 marks) b) Dato' Hamzan's pricing and employee-incentive policies support this strategy. Comment on the statement. (4 marks) c) Discuss the potential problems SmartBingkai may encounter despite the above statement in (b) above.