Upload
alyssa-jialing
View
7.727
Download
2
Tags:
Embed Size (px)
DESCRIPTION
Analyze Ya Kun Kaya Toast's current operation and propose a 3 year international strategic plan
Citation preview
Bay Wan Ting | Chan Li Feng Carissa |Eu Sin Yi| He Jia Ling |Cyndy Lin Xin Yi | Hena Suhail
Operation Analysis and Strategic Plan
360°Consultancy Team
2
OVERVIEW OF YA KUNCurrent Operations
Overall align with Ya Kun’s strategic vision of being a household name in Singapore and Asia
77 Stores in 7 Countries in 2012
Expansion into 4 New Countries in 2013 (in process)
3
CONTEXT
✗Specific operation details i.e. site selection and potential franchise partner✗Relations with existing franchisees✗Exporting/ trading to neighboring countries
✓Focus on Singapore ✓ Remains the core business✓Analyze café industry trends and identify opportunities✓Propose recommendations
Existing markets
New market(s)
✓ Focus on expanding its international presence in other Asian markets beyond Singapore✓Leverage on franchise success model
• Industry: Chained Cafes• Timeline: 5 years (2014 to 2018)• Objective: Expand in Asia• Focus: Long-term strategic direction
4
APPROACH
Strengthen
Expand
Explore
Existing Markets
6
SINGAPORE
7
CAFÉS INDUSTRYMarket Performance
7
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20180.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
0
50
100
150
200
250
300
Units of Chained Cafes in Singapore
Years
Gro
wth
Rate
(%
)
Unit
s
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20180.0%
5.0%
10.0%
15.0%
20.0%
25.0%
0
50
100
150
200
Sales of Chained Cafes in Singapore
Years
Gro
wth
Rate
(%
)
Sale
s (
S$ m
illion)
Market Projection for 2014 to 2018
8
COMPETITORS ANALYSIS
Key Competitors identification: Similar product offering Brand shares Overseas Operations
9
PERFORMANCE EVALUATION
2008 2009 2010 2011
Ya Kun 0.038 0.047 0.044 0.047
Toast Box 0.052 0.057 0.059 0.075
Killiney Kopitiam 0.023 0.025 0.021 0.027
0.5%2.5%4.5%6.5%
Brand Shares of Chained Cafes in Singapore
ToastBox
Ya Kun
Killiney Kopitiam
10
OPERATION EVALUATION
Factory Under-capacity Opportunity to
expand
No of Outlets ToastBox (50) Ya Kun (41) Killiney (20)
11
PROPOSED STRATEGIC DIRECTION
Market Penetration
Market Deployment
Product Development
Market Diversification
New Products Existing Products
New
Mark
ets
Exis
ting M
ark
ets
The Ansoff Growth Matrix
1
432 1
2
Convenience Grab-N-Go concept @ Tertiary Institutions
Convenience Grab-N-Go concept @ MRT
3
4
New stores at Tourist Spots
New Beverage-Tea
12
TREND: Convenience High percentage of takeaway for specialized coffee shops Increasing busy lifestyles in Singapore
PROPOSED STRATEGIES
Market Penetration (Existing Products, Existing Market)Location: New Downtown MRT line
Objectives: Cater to Singapore consumers takeaway trend Faster expansion to gain greater market presence and brand
awareness
Convenience Grab-N-Go concept @ MRT1
13
\\
Reasons cited for eating out Source: Ang, K.L., & Foo,S. (200a2)
PROPOSED STRATEGIESTREND: Convenience
Location: Tertiary Institutions (Polytechnics and Universities)
Objectives: Gain brand acceptance and capture the youth market
Market Deployment (New market, Existing products)
Convenience Grab-N-Go concept @ Tertiary Institutions 2
14
PROPOSED STRATEGIES
Market Penetration (existing products, existing market)Location: i.e. Integrated Resorts At Sentosa, Marina Bay Sands, Gardens by the Bay and Botanic gardens
Objectives: Reach out to the tourist to get Ya Kun’s brand known before venturing to other countries.
New Stores at Tourist Spots
TREND: Increased Tourists Arrivals Tourists are growth driver for consumer foodservice
Tourist arrivals 48.4% from 2009 to 2012 Tourism expenditure on 81.8% from 2007 to 2012
Consumers spend the highest in sales per outlet and are willing to spend more on F& B in leisure retail outlets
3
15
TREND: Wider food menu Serve all day product offerings Food expenditures increased to 31% of value shares
TREND: Healthy Menu Singapore consumers seek healthy quality meals Coffee and tea based beverages can easily be positioned as
healthy
TREND: Shift of focus from Coffee to Tea Singaporean consumers are becoming more sophisticated in
their choices of drinks Expansion of independent cafes specializing in tea e.g. Twinings
4. New Product Tea Drinks
Objectives: To target the health conscious consumers who seek a healthier
drink To introduce new varieties e.g. Flower Tea, Ginger Tea, Herbal
Tea
4
PROPOSED STRATEGIES
16
Singapore Strategies 2014 2015 2016 2017 2018
1. Convenience Grab-N-Go concept @ MRT
Source & Selection of Franchisee
Tender for Locations
Accept: Launch Outlet
Reject: Tender for other Locations
Accept: Launch Outlet
Reject: Tender for other Locations
2. Convenience Grab-N-Go concept @ Tertiary
Institutions
Source & Selection of Franchisee
Tender for Locations
Accept: Launch Outlet
Reject: Tender for other Locations
Accept: Launch Outlet
Reject: Tender for other Locations
3. Open stores at Tourist Spots
Source & Selection of
Franchisee
Tender for Locations
Launch Outlet
Evaluate performance
IMPLEMENTATION TIMELINE
17
RISKS & MITIGATIONSType of Risk Risk Solution
Unmanaged growth
Shortage of manpower due to sudden increase in production
Reduction in quality Transportation problem due to
over expansion Uncontrollable Franchise
management due to overwhelming number of franchisees
Brand Dilution
Hire part-time staff Standard quality control
procedures Source for additional logistic
support Monthly meetings & updates Managing of Brand message
through Public Relations
Unanticipated events
• Fire in Ya Kun’s Singapore Factory • Implement work safety rules
Operation Risk • Poor management by Franchisees • Updated Franchisee contract with Documentation and procedures for start-up & on-going process
Relationship Risk • Miscommunication/lack of clear communication channels with Franchisee
• Conflicting objectives
• Have clear goals & communicate the goals
• Embrace short term pain & long term gain
18
SCREENING EXPANSION OPPORTUNITIES
Positive Chained Café Unit Growth
OBJECTIVE
Positive Chained Café Sales Growth
Existing Operations
KEY PARAMETERS
To identify the countries with most potential for further franchising expansion
CONSIDERATION SET
19
SCREENING INDICATORS
* A Country@Rating indicator was used to assess the country risks across different countries.Measure the prospective business environment quality
Key Indicator Weight
Chained Cafes Growth 5
Country Growth 1.4
Country Risk* 1.6
Business Costs 2
Total 10
20
COUNTRY SCREENING GRID
Key Indicator Weight China Indonesia
South Korea
Chained Cafes Growth 5 126.5 128.7 244.8
Country Growth 1.4 48.9 59.7 31.4
Country Risk* 1.6 53.3 26.7 80.0
Business Costs 2 73.5 90.2 36.3
Final Scoring 302.2 305.3 392.5
Rank 3 2 1
New Market
22
COUNTRY SELECTION
Distance ProximityNew Markets with
no existing presence
Emerging MarketsExpertise in franchising
business model
Singapore's Free-trade partners
Countries That Passed The Key Parameters
Malaysia Thailand Brunei
KEY PARAMETERS
23
COUNTRY SCREENING
* A Country@Rating indicator was used to assess the country risks across different countries.Measure the prospective business environment quality
Key Indicator(s) Weight (Out of a total sum
of 10)
Ease of doing business 0.5
Ability to operate efficiently
in the country
2.5
Attractiveness of the local
market
3
Market Forecast of demand 2.5
Country Risk* 1.5
24
COUNTRY SCREENING GRID
Summary
Key Indicators Weights Malaysia Thailand Brunei
Ease of doing business
0.50
19.31 12.476 18.21Ability to operate efficiently in the country
2.50
110.65 111.72 70.55Attractiveness of the local market
3.00119.30 132.16 42.74
Market Forecast 2.50 93.01 66.43 90.55Country Risk 1.50 37.50 37.50 25.00Final Scoring
10.00 932.96 904.36 577.58
25
THAILAND
26
COUNTRY ANALYSIS Strategic Location
Linked with other SEA Infrastructure
Significant number of interconnected highways and a reliable internet broadband connection
Government Initiatives for SMEs “One-start-one-stop”
centers cater to ease setting up business
Thai Insurance Catastrophe fund
Import Duties Faster and cheaper
import comparison to other East Asia regions
Demand for Franchises Continued growth at an
average of 15%
27
INDUSTRY TRENDS
Coffee growth forecast of a total volume CAGR of 4%
30% of Thai consumers report that the drink coffee regularly
Increase consumption of fresh coffee
Price-conscious seek lower price per cup (E.g. mid-priced fresh coffee THB 40 to THB 60)
Import tariffs for coffee beans were held at under 5%
28
DEMAND
YEAR
VOLUME/Tonnes
2011 2012 2013 2014 2015 2016 2017 2018
Fresh Coffee 2989.4 3122.5 3251.8 3376.7 3499.7 3639.8 3764.16666666666
3892.98095238095
Jams and Preserves (Tonnes)
7717.7 7949.2 8148 8310.9 8460.5 8579 8794.54666666665
8966.06952380951
500
1500
2500
3500
4500
5500
6500
7500
8500
9500
29
Hai Yai
CITY SELECTION
Availability of infrastructure at
the ports
Presence of international
airports
KEY PARAMETERS Northern
Central
Northeastern
Eastern
Southern
*Not covering 1. The exact location
in the city and/or which mall to locate the outlets
2. Exact franchisee to work with
3. Exporting/Trading to neighboring countries
30
To capture 0.5% of the total chained cafes’ industry market share
To further expansion and gain constant market penetration into other cities in Bangkok and beyond Bangkok
OBJECTIVES FOR EXPANSION
31
Indicators Weightage
Bangkok
Phuket Hat Yai
Population0.2 92 5 3
No. of coffee house and shop 0.25 16.67 50 33.33
Consumer Expenditure on
Food(USD, Million)
0.25 42.96 38.24 18.80
Cost of setting business (Labour
and Rental)0.2 17.00 50.00 33.00
Political stability 0.1 40.00 40.00 20.00
Total score1 40.61 37.16 22.24
CITY SCREENING GRID
32
890 coffee shops and cafes(mostly not serving the same food concept as Ya Kun)
Top two indirect competitors -Starbucks -Black Canyon Coffee
Westernized café concept Existance of a Singapore
homegrown Toast Café competitor: Toastbox
Ya Kun’s Point of differentiation Traditional Café concept Totally new concept from existing competitors
47%
13%
41%
Brand Shares of Café
Starbucks
Black Canyon Coffee
Others
COMPETITIVE LANDSCAPE
33
Located in
high-human mall in Bangk
ok
Operating hours:
830am to 0930pm (Include weekend
s and exclude 20 PHs)
Number of
seats per
outlet: 45
maximum
One person approximately spend
45 mins in the outlet
Targets at
Mass Market
Each outlet only sell
kaya toast and
coffee
OPERATION DETAILS
34
Methodology
Step 1• Determine the average of number
of transactions per café outlet in year 2011
Step 2• Determine the average market
share per café (%) in year 2011
Step 3
• Based on estimated market share (%) for Ya Kun, identify the average number of transactions in year 2011 for Ya Kun
Step 4• Calculate total revenue of
transactions in year 2011
Step 5• Used as a base point to project sales
revenue from 2011 to 2018
MARKET & SALES REVENUE FORECASTING
35
One transaction is consists of 1 coffee and 1 kaya toast 100% market share is shared among the 890 cafes in Bangkok as
dated 2011 All of the transaction comes from Bangkok, the capital of the city Close proximity between provinces of Bangkok There is equal density in different province of Bangkok Periodic fluctuations of the number of people patronising the shop
is presumed to be accounted Net inflation effect is going to be constant for years forecasted An incremental of 0.1% market share is used to buffered against
the effect of under-recording the number of transaction of café in Euromonitor International 2012 data
The franchisee’s upfront tenure fee of SGD 50,000 off and franchisee fees of USD 200,000 (overseas) are paid from the franchisee’s own capital
Ya Kun’s market share remains constant in the 5 years
ASSUMPTIONS
36
Most Likely situation
*Context: 1) Election is going to happen in 2015
2) Big players such as Starbucks and McCafe are opening more outlets till 2017
3) There is a moderate ongoing competition among chained cafes in Thailand
GROWTH RATE
Year 2011 2012 2013 2014 2015 2016 2017f 2018f
Chained café 11.9 12.2 12.6 12.9 13.3 13.8 14.09 14.47
Growth Rate 2.52% 3.28% 2.38% 3.10% 3.76% 2.13% 2.66%Reduction: Competition by Starbucks and True Coffee opening more outlets 1.40% 1.40% 1.40% 1.40%Reduction: Election aftermath effect 7.00%
Addition: 1 1 1 1 1 1 1
Net growth rate(%): 1.03 1.03 1.01 1.03 1.03 1.01 1.03
37
*Context: 1) Election is going to happen in 2015
2) There will not be new competitors offering the same products as us in the first year of operations
3) Competitors will employ slower rate of expanding more units
GROWTH RATE
Best SituationYear 2011 2012 2013 2014 2015 2016 2017f 2018fChained café 11.90 12.20 12.60 12.90 13.30 13.80 14.09 14.47Growth Rate 2.52% 3.28% 2.38% 3.10% 3.76% 2.13% 2.66%Reduction: Slower rate of competitors (Taking 50% of the
competition intensity that exist in the most likely
case) 0.70% 0.70% 0.70% 0.70%Addition: 1 1 1 1 1 1 1
Reduction: Election aftermath effect 7.00%
Net growth rate(%): 1.03 1.03 1.02 0.95 1.03 1.01 1.03
38
* Context: 1) Intensive promotions from competitors such as starbucks and true coffee
2)
Election happens earlier, the year we enter in, and aftermath prolong for another year(2016)
3) Rapid cafe outlets expansion by competitors
GROWTH RATE
Worse Situation2011 2012 2013 2014 2015 2016 2017f 2018f
Chained café 11.90 12.20 12.60 12.90 13.30 13.80 14.09 14.47Growth Rate 2.52% 3.28% 2.38% 3.10% 3.76% 2.13% 2.66%Reduction: Competition by Starbucks and 94 c café opening more outlets 1.40% 1.40% 1.40% 1.40% 0.00%Reduction: Intensive promotion set by competitors 1.35% 1.35% 1.35% 1.35% 1.35%
Reduction: Election aftermath effect 7.00% 7.00%
Net growth rate: 1.03 1.03 0.93 0.93 1.01 0.99 1.01
39
Sales Revenue Forecasting
Sales Revenue Forecast
2014 2015 2016 2017 2018
Most Likely Case (THB)
117883.957266591
121538.359941855
126108.202275669
127028.792152281
130407.758023532
Best Case (THB)
237402.273163926
226481.768598385
233412.110717496
236749.903900756
243047.451344516
Worst Case (THB)
48600.28998 45368.3707 45826.59124 45542.46638 46139.07268
65,000
115,000
165,000
215,000
265,000
Most Likely Case (THB)
Best Case (THB)
Worst Case (THB)
Am
ount
in T
HB
40
Type of Risk
Risk Solution
Unexpected emergency
Natural disaster (e.g Flood, earthquake)
Political Risk (e.g. riots, bombs, protest, labour strike)
“Catastrophe Insurance Policy “
Draft formal procedures
Relationship Miscommunication/lack of clear communication channels with Franchisee
Documentation and procedures for start-up
Value-proposition
Foreign exchange risk
Fluctuations in the value of the trading and buying currencies
Foreign currency deposit account
RISKS & MITIGATIONS
41
CONTINGENCY PLAN
Unanticipated event
Course of Action Future Alternatives
Singapore Factory unable to send shipment due to unforeseen circumstances (e.g factory on fire etc)
1. Approach existing network of suppliers to source for supplies
2. Form a database of suppliers for future reference
1. Explore into building new more factories in Singapore and Malaysia
42
Justification for when it is time to exit: Changes in market trends, the indicators that illustrate these
could be: Characteristic 1: Inability to breakeven in 3 years Characteristic 2: The degree of loss is inflating each year Characteristic 3: Even after intense promotion and pricing
strategies does not appeal to the consumers Characteristic 4: Human-traffic at Ya Kun Outlets in Bangkok
fare poorly as compared to other F&B outlets within close proximity
In any of the above scenarios, Ya Kun should try to intervene into understanding the forces and reasons behind such failures.
Guidance, in the form of financial, training and skilled expertise should be translated. A buffer time of 1.5years will be given since
the time of guidance.
EXIT STRATEGY
43
Step 1• During these 1.5 years, Ya Kun will
monitor their progress and have constant feedback and reviewing sessions
Step 2
• If there is no progressive changes seen from failed franchisee, Ya Kun will access whether they should change franchisee and exiting from the market
Step 3
• Exit from the market only if:• 1) Weak market forecast of demand• 2) Uprising of direct competition• 3) No availability of suitable
franchisees
EXIT STRATEGY
44
StrengthenSingapore
Increased Tourists Arrivals
Consumers seeking convenience
Shifting coffee to Tea
Recommendations:
New stores at Tourist Spots
Convenience Grab-N-Go concept @ MRT/ Tertiary
New Beverage-Tea
Explore Growing café culture and
coffee consumption
Local’s strong preferences for sweet food
Recommendations:
High potential new market: Bangkok (Thailand)
Future expansion: Phuket and Hat Yai
CONCLUSION
Expand
45
Q & A
Thank You
46
Back up slides
47
48
49