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Company Analysis of Old Chang Kee

Old Chang kee which is situated in Singapore employed in the creation and distribution of foods in Singapore, Malaysia and Republic of China. It is famous for its Curry Puff and later diverse into as much as 30 products which could be found in its network of shops distributed around Singapore, Malaysia and Republic of China.

Company History

The Starting of Old Chang Kee dated back again to 1956 which start in a small stall in the restaurant located outside the former Rex Movie theater along McKenzie Highway. Crowd of individuals were drawn to the scrumptious pastry stuffed full of curried potatoes, rooster, and a slice of egg and fried with several natural remedies and spices, to create Curry Puff. Every individual Curry Puffs were meticulously handmade to ensure the aroma was locked within the Curry puff. In 1986, Han Willing Juan take over the small treat shop upon facing winding up and bring the vision to turn the snack shop into an effective enterprise.

SWOT Analysis

Strength

Strategic location

The company has more than 80 retailers around Singapore, Malaysia and Republic of China, which 70 retailers are based in Singapore. The company market its selection of foods from kiosks along the street to supermarket shops and shopping malls at every corner of Singapore, thus allowing consumers to gain quick access to its outlet stores.

Price and Variety of Food products

All products of Old Chang Kee were priced between $1 to $2. The affordable cost range would even allow children as young as seven to have the ability to afford to get food products from the retail store. Keeping the price affordable would also welcome consumers who were still not full after their meals to acquire any foods from the outlet stores.

The Company provide a selection of over 30 foods. It allows the consumers to have the luxury to choose over a variety of food products, beside their famous Curry Puff such as Sotong Onstik, Pineapple Pie, and Yam Wedding cake. Thus, it might be able to get in touch with many other consumers besides Curry Puff enthusiast and at the same time, the company can increase its source of revenues and boost the group's profits.

Quality Control

The company is focused on maintain high standard and higher level of quality control to deliver foods which are safe to take for our consumers

In the company's production facility, the business acquired obtained HACCP qualification for the developing of currying puffs, starting from handling of recycleables to processing, storing and delivery of the products. Some quality control steps were carried out which relate to hygiene control, maintenance of equipment, cleaning and sanitation, raw materials control and product quality control.

In the retail outlets, the employees had to endure training that will equip them with food-handling, baking and cleanliness control. To keep the same standard of the food products, the employee had to adhere to the cooking methods directed at them in the form of operation manual.

Either A or B level were obtain by all the business's food stores for food cleanliness and safety specifications.

Management of Retail Outlets

All of the shops will be oversee and monitored by Our Basic Manager, Chow Hui Shien who is assisted by the 10-man team comprising one manager, executives and supervisor. The retail outlets are grouped into five area categories located in their location. A location supervisor will control one specific area group and a maintenance team which includes four users will perform regular maintenance work and health maintenance for all your retail outlets. A team head is appointed in each retail outlets and their job is to control the procedure of the shop and the employee in the shop. Depending on the size and volume of each shops, the employee counts for every shop will range between two to eight employees who work either both shifts or solitary shift.

Financial Performance

The company revenue shows hook increase from $24. 8 million in first fifty percent season 2009 to about $26. 3 million in the first half of the year 2010. The retail portion is the key contributor with revenue increase from $24 million in first one half calendar year 2009 to $25. 3 million in first one half year 2010. The business's cash and cash equivalents total $8. 7 million as at 30 June 2010. The full total assets of the business stand at $24. 807 million when compared with the total liabilities of $ 6. 616 million as at 30 June 2010. The full total equity of the company is $ 18. 199 million. The characters reflect that the business has a wholesome balance sheet.

Accreditations and Achievement

In 2004, the business possessed received the Halal documentation by Majlis Ugama Islam Singapura that allows its business to gain accessibility to the Muslim Community.

In 2004 and 2005, the Company was awarded "Singapore Promising Awards", "SPBA- Heritage Brand Prize "and the "SPBA- Distinctive Brand Award "by the Connection of Small and Medium Enterprises Singapore and Lianhe Zaobao.

In 2007, the Company was Honored "Lifelong Learner Prize Corporate Category" by MediaCorp, Singapore Workforce Development Agency, Country wide Trade and Unions Congress and Spring Singapore. May 2007-obtained Risk Research Critical Control Point (HACCP) recognition for the production of curry puffs and put into practice a quality assurance programme.

In 2009- Revenue of the group surpassed $50 million.

Weakness

People and Service

The worker stationed in the meals outlets were usually middle-age, thus it leave an impression of old-timers.

The company's employees could be found mingling and chatting heartily among themselves even though there are long queues across the shop. These behaviours leave down an undesirable impression to consumers in term of bad servicing.

Products

Most of the food products from our shops undergo deep-frying before reselling to consumers. For now, more folks are being health-conscious, so they will usually avoid greasy food.

Opportunities

Changing Lifestyle of Consumers

In a modernised and fast-paced Singapore, the lifestyle of working people and stress-stricken students were so occupied and hectic that they can only use convenience food or takeaway to lessen the time reduction in eating as time is never enough. Old Chang Kee is well-positioned to drive on the upwards trend of convenience food and takeaways with its Old Chang Kee Take 5 retailers and over 70 outlet stores well-positioned shops in heartland, stores, kiosks and supermarket.

Business development

In Singapore, the company had also migrated into the food delivery services called the "Old Chang Kee Delivers". The delivery services focus on the consumers in the central business district area and other determined area in Singapore. The purpose of the delivery service is to offer an added convenience to consumers and also to offer an easy route to provide finger food for event, reaching and celebrations.

Regional Expansion

Upon reaching saturation point in Singapore, the business acquired ventured into international market and setup shops through joint endeavors, immediate investment or franchise arrangement. The company now have three shops in People Republic of China(immediate investment), Indonesia franchisee in Jakarta got four outlets, Philippines franchisee in Manila acquired two retail outlets and in Associated Company (Old Chang Kee Malaysia) got two retail outlets in Kuala Lumpur.

Threats

Risk Factor

The Company will be damaged by any outbreak of food-related diseases. In 2004, through the outbreak of avian influenza, resources of chicken meat and egg which will be the ingredient in making our curry puffs possessed dropped drastically. Due to the shortage of source to meet the demand, the costs of chicken meats and eggs were raised, which improve the cost of raw materials of your company. The business had to endure with the excess expenses as the company could not copy the increase of cost in raw materials to the customers which greatly influenced the financial performance of the business in 2004.

Due to the worsening of the avian influenza, the government of Singapore totally banned the import of chicken meats and egg from Malaysia. THE BUSINESS have to displace fresh chicken meat with frozen chicken meat and the company's foods were being served without egg. Thus, it offers greatly damaged the sales and earnings of the financial time of 2004.

Labour makes and salary

The food and drink (F&B) industry in Singapore is very competitive and labour intense. In Singapore, since there's a scarcity of Manpower in the F&B sector; many companies will increase salaries term to entice workers. The meals industry will take part in a price-bidding battle, and hurt the gains of the F&B sector in the end.

Competition

The company got a string of rivals who are Bengawan Solo, Breadtalk, Polar Puffs and Cake, Prima Deli and bakeries and food retails outlets near to our retail outlets. Those rivals have many retail outlets located island-wide. Thus the level of competitiveness will depend on factors such as food prices, taste, branding, hygiene standards and common of foods.

Future of the Company

Expansion of existing international operation

Currently the company has generated brand presence in Indonesia and Philippines through franchisee in both of these two countries as stated. The group acquired subsidiaries located in People republic of China, three retail outlets in Chengdu and a dormant one in Australia. The business plan to open at least three more shops in other parts of China such as Chongqing next one year. Currently the company is sourcing for appropriate production center in Australia and intend to open up at least two retail outlets in Australia. The business had put aside $1 million elevated from world wide web proceeds for the growth plan. .

Increase and Refurnish Singapore retail outlet

Since the main procedure of Old Chang Kee is within Singapore and the actual fact that the key sources of revenue were also produced from Singapore. THE BUSINESS need to pay focus on the Singapore's operation too. The company plan to create new retail outlets in tactical location which include Take 5 retail outlets and drive-through facilities. The company hope to boost the number of retail outlets by five in the next two years. The business intend to relocated a few of it poor performance retail outlets to a much better location to spur progress and at the same time to refurnish some of its existing shops to light up the look of Old Chang Kee. The company had reserve $1 million lifted from net proceeds for the proposed plan.

Expansion through strategic alliances, acquisitions, joint venture and franchises

Besides gathering popularity from Local, many foreigners experienced give encouraging opinions on the product of Old Chang Kee would love to see our company's shops in their home country too. Some individuals even have strategies to go over joint ventures with this company. The business will consider the whole above scenarios and decided to consider Old Chang Kee aboard through acquisitions, direct investment, joint venture and franchises. Online proceeds of $500, 000 have been set aside for the program.

Reflection

After doing the research on Old Chang Kee, I noticed that the steps taken by Old Chang Kee in growing the business was designed very meticulously. The business focus on its main market and build up its strong presence and branding in Singapore. When the business enterprise was on track and the income generated was secure in Singapore, then it commences looking to international for expansion. Despite the fact that the procedure in Singapore have been stabilised, the business has been slow in entering rising markets unlike competitor like Bread Have a discussion that includes a fast growing presence in market in China and Middle East. Thus the company has been getting rid of its competitive border in term of earnings from international business. In the long term, the company should give attention to overseas business and acquire almost all of its revenue from international as Singapore Market has reached its saturation point.

Although the meals products of Old Chang Kee were fascinating for Singapore, proper market review and research into the new market should be done before stepping into the market. The new market might not suit to the flavor of the meals products offer by the business after all. With proper market study and research, the business can experiment and come out with the new flavor to cater to the flavor of the new market segments and thus reduce the risk of declining in the venture.

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