PPT on Tao Heung

8/13/2019 PPT on Tao Heung

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TH Catering Holdings

Ltd.

3 Jun 2013


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Summary

Chinese restaurant is a traditional industry in

which there are many inherent shortcomings

and flaws.

However, our client is renowned for the use ofinnovative marketing strategies and modern

management techniques in running this

traditional business.

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Background

Vision:

Commit ourselves to enhance the image of Chinese

catering

We endeavor to advance abreast for a common goalwhere this business becomes the most esteemed

Chinese restaurant group, and lead to open up a new

direction for Chinese dining

Mission: to offer Delicious Food With Superior Value for Money

()

Cost leadership strategy3


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Background

The first restaurant at Sai Wan

was established in 1990

Has built a network of more

than 102 restaurants in Hong

Kong (76+) and SouthernChina (26+)

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Organization Chart

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Problem Found Flu scare

The bird flu scare sparked by the emergence of a new

strain of the disease in Shanghai and adjacent provinces

While the Group's "$1 chicken" has been its signature

dish in the territory since 1996

Depressed consumer sentiment in the mainland is

concerned

Annual profit fell 14.5 percent last year

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http://www.thestandard.com.hk/news_detail.asp?art_id=132707&con_type=1


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Problem Found Cost

Increase Minimum-wage Ordinance

11% increase from last year, 29% of cost of goods sold.

Landlords has huge influence in the catering business

17% increase from last year, 27% of cost of goods sold.

Extra rent may be charged based on the restaurant's profit.

Landlords are more aggressive in neogiating terms when

compared with the SARS economic downturn.

Landlords may even suggest name changes, changes to the

dcor, the menu etc. for the prospective tenant. Landlords may discontinue the tenancy with

underperforming businesses.7

http://eileen-lian.com/?paged=35

Annual Report 2013 of the Group


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Removing non-value-adding procedures and Centralize

production

https://www.youtube.com/watch?feature=player_detailpage

&v=WCN1zDaEuu4#t=34s


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PESTEL

Political Factors

Government of Guangdong province intended to change the

manufacturing-based economy into high-value-added economy.

Food plants of livestock farms in Guangdong may need to

relocate

Economical Factors

Rental and labour market pressure because of severe inflation

Sociocultural Factors

Specialty recipes, quality of service, excellent atmosphere andfood safety

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PESTEL

Technological Factors

ERP system for better supply chain management and profit

analysis

Benchmark gross profit each shop is around 60%

Rectify on shops with too much profit, to align with their objectives. Accredited for Environmental system & quality system

Environmental Factors

Sewage charges due to polluted water when washing foods &

dishes

Legal Factors

Minimum wage legislation

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Porters Five Forces

The Bargaining power of suppliers

The raw materials are not unique and restaurants havealmost no switch costs to change suppliers. Substitutes arealways readily available

As a centralized food processing is established, largerpurchasing quantity can facilitate their negotiations on costadvantage

The Group can supply itself, lowering power of othersuppliers.

The Bargaining power of buyers Due to free of switch costs, the restaurants have to create

greater product and service differentiation by introducinginnovative recipe, and leveraging quality foods and services,in order to erode the bargaining power of buyers

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Porters Five Forces

The Threat of potential new entrants

High expectation from consumers, in term of price,

quality, cuisine experience

Most of the investment is spent for decoration,facilities, and marketing activities. They are all sunk

costs that cannot be recovered. Economies of scale

also help establish barriers to entry.

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Porters Five Forces

The Extent of competitive rivalry

Maxims Caterers, Federal Restaurants (), Ho

Choi Restaurant Group ()

The Threat of substitutes

various cuisineswestern, Japanese, South-east

Asian, fast food restaurants, or even at home etc.

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Long Term Objectives

To be at prime locations hence enjoy high customer

flows and draw patronage of primarily affluent middle-

end diners.

To adopt a successful multi-brand strategy, with 15 key

brands under the Group. Each brand represents a

unique dining style and targets a specific clientele or

dining preference. As such, they can profitably co-exist in

popular dining areas.

Groups restaurant brands are also differentiated bytheir fine style and dcor, including staff uniforms,

tableware and interior decoration14


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Active in their business

strategy Balance between Quality and ProfitThis is also related

to the restaurants mission and aim.

Consumer Concern versus Profit ConcernThe

restaurants management is dedicated in serving the

masses by maintaining very satisfactory customer

service.

(https://www.youtube.com/watch?feature=player_detai

lpage&v=WCN1zDaEuu4#t=160s)

Marketing and ResearchThe structured method of

marketing research has enabled countless of producers

and consumers alike to better understand their

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Recommendations (Cost

Control) Acquire livestock and plantation farms. Then

implement their own quality managementsystem in order to have fully control quality,better supply chain and confidence of

consumers;

Well used current strength - Centralized foodprocessingrelease space (~12% area) in therestaurants for profit-generation

Make use of utility rates discount

Management System for efficiency

5S Management16


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5S Management

Sort (Seiri)

Straighten (Seiton)

Scrub (Seiso)

Standardize (Seiketsu) Sustain (Shitsuke)

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Maslows Theory

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Motivation

In order to retain staff, the company has a fair and well-structured

promotion platform, offers comprehensive training and links

salaries to achieving company objectives

Performance of junior chefs are concerned in appraising senior chefs.

With these policies, the Group hopes to emphasize long-term career

development, help our staff improve their skills and knowledge and

increase staffs morale and motivation

The Group attracts newcomers by offering higher salary levels for

front-line staff, -generally 10 to 15 per cent higher than industry

average.

Fulfill staff's drive to learn by encourage a learning culture

Staff is often less-educated in catering industry.

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Q & A

Thank you!22

Documents

PPT on Tao Heung