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ock.docx1.0 Executive summary
Starting a business with a curry puff, Old Chang Kee now has established itself as the leader in the local food provider‟s market in Singapore. The usage of cost leadership is their basic strategy to combat competition with their immediate competitors. The ever flourishing food market in Singapore has had in numerous food chains opening up and closing yet Old Chang Kee has made its footprint all over since 1956 and has survived. This report explores the brand awareness along with comparison of their brand inventory for measuring brand equity of Old Chang Kee along with recommendations for Old Chang Kee for its future benefits. Online surveys and direct interviews were conducted to evaluate Old Chang Kee‟s brand awareness, the level of quality satisfaction it provides, judgement, and brand-feel, brand image, and last but not the least the brand loyalty. Both Qualitative and Quantitative data analysis has been done to get information about the company as well as its customers. Customer based brand equity (CBBE) model and brand knowledge model were the theories used to evaluate brand equity. When we compared the brand exploration, it was evident that Old Chang Kee was leading in its brand awareness though it‟s lacked in brand resonance. Old Chang Kee is quite strong when its connection comes with its customers and it‟s quite ahead in brand inventory and awareness compared to its competitors. After the analysis, the report lays down marketing program and solutions for the challenges that Old Chang Kee faces today to improvise their customer loyalty and internal management consistency. Old Chang Kee needs to concentrate on its internal management of employees in their training. To conclude Old Chang Kee needs to strengthen its brand loyalty for its customers using more loyalty programs
2.0 Introduction
Old Chang Kee Ltd., an investment holding company, engages in the manufacture and distribution of food products. The company’s products include curry puff, fishballs, chicken nuggets, and chicken wings, as well as mushroom chicken, roast chicken, and sardine. It also provides laksa, mee siam, nasi lemak, and curry chicken. In addition, the company engages in the food and beverage management and consultancy activities, as well as operates retail food outlets and provides catering services. As of December 31, 2009, it operated 76 outlets located in shopping malls, petrol stations, and outdoor kiosks. The company primarily offers its products under the Old Chang Kee brand name. Old Chang Kee Ltd. was founded in 1956 and is based in Singapore, Singapore.
Old Chang kee which is based in Singapore engaged in the manufacturing and distribution of food products in Singapore, Malaysia and Republic of China. It is famous for its Curry Puff and later diverse into as many as 30 products which could be found in its network of outlets distributed around Singapore, Malaysia and Republic of China. Old Chang Kee had its humble beginnings in 1956 in a small stall in a coffee shop near the then Rex Cinema along Mackenzie Road. It was set up by Chang Chuan Boo, a Hainanese immigrant who sold the business to Han Keen Juan in 1986. Mr Han revamped and modernized the business to the Old Chang Kee known today for its authentic curry puff and wide variety of savory snacks. Old Chang Kee (OCK) was founded by Mr Chang in 1956 in a small coffee shop known for its chicken curry puff. In 1986, Mr. Han Keen Juan, bought over the control of Old Chang Kee business and transform into a household brand today. For over 56 years, OCK specialise in the production and sales of a variety of affordable and quality finger food directly to consumers in Singapore. Most of their sales are on a takeaway basis and their 76 outlets in Singapore today are located at different areas to cater wider group of customers. OCK sub brands include Curry Times, Pie Kia and Mushroom which offers dine in concept restaurants carrying a range of local delicacy such as nasi lemak and laksa. Catering services are also provided in selected areas in Singapore.
OCK is part of the savory snack industry which is a division of food and beverage industry. It is now a well-known brand that operates at over 70 locations in Singapore and also has developed operations overseas in Malaysia, China, Indonesia and the Philippines. OCK specializes in curry puffs and other local pastries. It now markets its range of snack products, including its signature curry puffs, through the kiosks along the road and retail outlets at petrol kiosks and shopping malls. OCK’s key business development strategy is to identify and acquire strategic locations in order to establish new retail outlets and thereby cater to a wider range of customers. Having relied on its brand name, OCK leverages its branding by savouring for a new distribution channels. The affordable price range makes a wide range of customers. All products of Old Chang Kee were priced between $1 to $2. This means that Old Chang Kee can serve its food to the young children even down age into the kids. The customers would be the seven-year-old children. Notably, the wide range of customers that are able to afford to purchase food products from the retail outlet would also welcome consumers who were still not full after their meal to purchase any food products from the outlets (Mynewsdesk.com, 2013). The several menu of food product at least 30 menus tempts the consumers to choose the new style not only the Curry Puff. This , then , becomes the advantage of Old Chang Kee that is able to keep the puff lovers, old consumers, with the new product to increase source of revenues and increase the group’s revenues (Oldchangkee.listedcompany.com,2012) Quality Control is remarkable. The company is committed to maintain high standard and high level of quality control to deliver foods which are safe to consumers. Old Chang Kee obtained HACCP certification. This was to certify that the manufacturing of currying puffs, starting from handling of raw materials to processing, storing and delivery of the products. Quality control procedures are not only the quality of high standard, but hygiene control, maintenance of equipment, cleaning and sanitation, raw material control are the most important which Old Chang Kee cares to serve consumers.
3.0 Current Company Situation
Revenue for the reporting quarter was $18.8 million, down 1.8% compared to the same quarter a year ago.
Profit for the period did worse, falling by more than a third to $1.23 million.
Subsequently, earnings per share (EPS) for the quarter fell from 1.56 cents a year ago to 1.01 cents.
Cash flow from operations came in at $1.96 million with capital expenditure clocking in around $2.6 million. This puts the food purveyor in negative free cash flow territory to the tune of nearly $0.7 million. This is a step backwards from the positive free cash flow recorded in the same quarter last year, though it should be noted that the curry puff seller’s operating cash flow from operations in that period was just $1.45 million.
As of 31 December 2015, Old Chang Kee had $18.8 million in cash and equivalents and borrowings of about $8.5 million. A year ago, the figures were $20.1 million and $8.2 million, respectively.
In summary, Old Chang Kee’s top-line had stalled while its bottom-line shrank on the back of higher operating expenses. There was also no free cash flow generated for the quarter, in part due to larger capital expenditures. The higher spend was due to renovation needs and construction costs related to the company’s new factory.
A positive is that the curry puff company managed to maintain a strong balance sheet with a net cash position.
Operational highlights
Revenue declined mainly due to store closures related to mall revamps. As of 31 December 2015, Old Chang Kee operated a total of 82 outlets in Singapore, compared to 79 outlets a year ago. This is a decline from the 84 outlets it reported in the fiscal second quarter though.
The company’s management team gave the following commentary for the current year and the outlook ahead:
The Group’s new factory in Iskandar Malaysia and expanded factory facilities in Singapore at 2 Woodlands Terrace are expected to be fully operational in the coming months. These will provide the platform for the Group to grow its business both locally and regionally.”
In short, Old Chang Kee is investing for its future expansion, despite the temporary closures of some of its outlets.
10.0 Evaluation and Control
OCK faces its own challenges common to other savory snack firms operating during these rapid changing environmental elements, competitive threats and coping with changing customer tastes and lifestyles. This illustrates the importance of the firm’s continuous monitoring and adaption to changes in its macro and competitive environments to achieve long-term sustainability in the market. For other similar savory snack firms, the competitive situations have become more intense, with other rivals offering competitive snacks and more increased number of new players offering similar like savory snack like products as substitutes
Although the food products of Old Chang Kee were appealing for Singapore, proper market survey and research into the new market has to be done before entering the market. The new market might not suit to the taste of the food products offer by the company after all. With proper market survey and research, the company can experiment and come out with the new taste to cater to the taste of the new markets and thus reduce the risk of failing in the venture.
After the completion of Old Chang Kee analysis as well as the business strategy, Old Chang Kee steps in developing had planned meticulously. Company focuses on its core markets and builds its strong presence and building a reputation in Singapore. Old Chang Kee was on track and generates stable profits in Singapore and then as a springboard in order to it began looking to overseas to expand. Next to its strengths, the weaknesses still need to be overcome so that the brand becomes more complete, and attacks on more customers. Old Chang Kee now markets its range of snack products with signature Curry Puffs, through from kiosks along the road to shopping malls, peat center and supermarket. Travel & Leisure magazine of the United States based on published in 2012, Old Chang Kee has been selected as one of 20 best fast food chains in the world.
References List:
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7.Old Chang Kee (1997) . Corporate Profile Old Chang Kee. Retrieved fromhttp://oldchangkee.listedcompany.com/profile.html.
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