Grill D Burgers - International Marketing Group Project PDF

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Summary

Group Project...

Description

Expansion into Singapore 3rd June 2015

Table of Contents Executive Summary....................................................................................................................................... 5 Preliminary Analysis – Singapore .................................................................................................................. 6 2.1

Target country and Market Area .................................................................................................. 6

2.2

Definition of Product and Service Opportunity ............................................................................ 6

2.3

Evaluation of Key Environment Influences ................................................................................... 7

2.3.1

Key Political Issues ................................................................................................................ 7

2.3.2

Key Economic Factors ........................................................................................................... 8

2.3.4

Legal Issues and Structures of the Market ............................................................................ 8

2.3.5

Cultural Issues and Factors ................................................................................................... 8

2.3.6

Social Issues........................................................................................................................... 9

2.3.7

Technological Issues and Structures ..................................................................................... 9

2.4

Business Model to be used for Entry into the Target Country ................................................... 10

2.4.1

Main options ....................................................................................................................... 10

2.4.2

Preferred option ................................................................................................................. 11

Situation Analysis ........................................................................................................................................ 12 3.1

Market Segment Structure, Evaluation and Analysis.................................................................. 12

3.1.1

Market Segment ................................................................................................................. 12

3.1.2

Segment Size ....................................................................................................................... 13

3.1.3

Segment Buyer Criteria and Hierarchy ...............................................................................13

3.1.4

Key Segment Trends and Forecasts .................................................................................... 14

3.1.5

Key Competitors.................................................................................................................. 15

3.1.6

Evaluation of each Segment................................................................................................16

3.1.7

Identification and Validation of the Target Market Segments ........................................... 17

3.2

Firm Capabilities, Experience and Expertise “Gap” Analysis ...................................................... 17

3.2.1

Current Firm Capabilities, Experience and Expertise .......................................................... 17

3.2.2

Required Capabilities, Experience and Expertise ................................................................ 18

3.2.3

Evaluation and discussion of ‘gaps’ .................................................................................... 18

SWOT Analysis.............................................................................................................................................20 4.1

Weighted SWOT.......................................................................................................................... 20

4.2

Implications of Analysis............................................................................................................... 22 2

Competitive Advantage and Strategy Evaluation ....................................................................................... 23 5.1

Positioning analysis ..................................................................................................................... 23

5.2

Competitive Capabilities and Characteristics ............................................................................. 25

5.3

Creating and Building Competitive Characteristics in Singapore................................................ 26

5.4

Strategy enacted in Target Market Segments ............................................................................ 27

5.5

Value Chain Analysis ................................................................................................................... 28

5.5.1

Primary Activities ................................................................................................................ 28

5.5.2

Secondary Activities ............................................................................................................ 29

Business Objectives..................................................................................................................................... 32 6.1

Objectives....................................................................................................................................32

6.1.1

Marketing Objectives .......................................................................................................... 32

6.1.2

Finance and Sales Objectives .............................................................................................. 33

6.1.3

Operations Objectives......................................................................................................... 33

6.1.4

Human Resources Objectives..............................................................................................34

Marketing Plan | Franchisee ....................................................................................................................... 35 7.1

Restated Target Market Segments for the Plan ......................................................................... 35

7.2

Final Product Specifications ........................................................................................................ 38

7.3

Pricing Structures and Strategy Analysis..................................................................................... 39

7.4

Distribution Model and Key Logistic Issues and Management. .................................................. 40

7.5

Promotion Strategy and Plan ...................................................................................................... 41

7.6

Final Positioning Plan .................................................................................................................. 42

Financial Evaluation .................................................................................................................................... 44 8.1

Franchisee | 3-Year Profit and Loss Statement .......................................................................... 44

8.2

Franchiser | 3-Year Profit and Loss Statement ........................................................................... 45

8.3

Assumption Specifications when creating the Profit and Loss Statement. ................................ 46

8.4

Calculation of 1st Year Sales. ....................................................................................................... 46

8.5

Calculation Changes to the Revenue across Y1, Y2 and Y3. ........................................................ 47

8.5.1

Franchisee ........................................................................................................................... 47

8.5.2

Franchisor............................................................................................................................ 47

8.6

Calculation Changes to the Expense Figures across Y1, Y2 and Y3 ............................................. 48

8.6.1

Franchisee ........................................................................................................................... 48

8.6.2

Franchisor............................................................................................................................ 49 3

8.7

Discussion of resultant Profit and Loss Statement ..................................................................... 49

Appendix ..................................................................................................................................................... 51 9.1

Project Gantt Chart ..................................................................................................................... 51

9.2

Key contacts ................................................................................................................................ 51

9.3

Market Research Brief ................................................................................................................52

9.4 Sample Research Survey - Sample Questionnaire ............................................................................ 53 9.5

Other Relevant Support Information .......................................................................................... 56

9.5.1

Franchisee ........................................................................................................................... 56

9.5.2

Franchisor............................................................................................................................ 56

References .................................................................................................................................................. 57

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Executive Summary Grill’d Burgers is an Australian-based restaurant chain known for its focus on delivering quality, healthy burgers to its consumers and its embodiment of a lifestyle essence successfully incorporated into the brand. Founded and established in 2004 by owner Simon Crowe, the company has now grown in operations to include over 70 restaurants across the country. Now at the peak of its success and showing no signs of slowing down in its extensive spread, the brand will look to the overseas market of Singapore as its first target for foreign expansion. The firm will adopt the business model of franchising for its expansion, with the franchisee being hired locally for an easier integration of the brand into the foreign culture. Grill’d will be introduced in Singapore as an Australian-originated burger restaurant that centers on rebranding the negative image of the burger as a fast food by serving a health-conscious menu that boasts a fresh and nutritious range of ingredients. The brand currently holds a competitive advantage in the Singapore industry by introducing a new and foreign culture into the market and bringing along with it a fresh taste. In addition, by integrating the characteristic aspect of its local community donation program ‘Local Matters’, Grill’d is able to provide an extra service to customers and encourage practice of one of its core values of getting involved with the society. The company will aim for a primary target audience of consumers between the ages of 16 and 30 who are foodies at heart, enjoy the social scene, and appreciate exploring foreign foods within Singapore. Main competitors include major fast food brands like McDonald’s, KFC and Burger King, and the more direct rivals are the niche burger restaurant outlets serving the same target market with similar goals and product standards. The main business objective of Grill’d Burgers’ establishment in the Singapore fast food industry is to aim for a 5% share of the market by the end of its first twelve months of establishment and reach 25% of its target audience before the end of that period. An annual growth in revenue by 13% is expected after its second year breaking even and thereafter stabilization in the market.

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Preliminary Analysis – Singapore This report focuses on the expansion of Grill'd into the Singapore fast food market. This section of the report seeks to provide an overview of Singapore as well as the political, economic, socio-cultural, environmental, and legal aspects of Singapore that will affect the expansion of Grill'd into the Singaporean market.

2.1

Target country and Market Area

Singapore, in terms of geographic size, is a relatively small city-state located in South-East Asia that has a population of 5.4 million and a geographic size of 718 square kilometres, making it the third most population dense country in the world (DSS, 2015). Singapore is a highly prosperous free market economy with one of the world's largest per-capita income sitting at over 55 thousand US dollars in 2014 (World Bank, 2015). Singapore's total GDP for 2014 was 307.1 billion Singaporean dollars, a growth rate of 3 percent year-on-year (CIA, 2015). Service based industries contributed over 74 percent of the GDP figure while industry contributed over 25 percent (CIA, 2015). Due to it small geographic size and lack of rural area, Singapore does not have an agriculture sector (CIA, 2015). Singapore's main industries are tourism, biomedical services, logistics, banking and finance, chemicals, and construction (Contact Singapore, 2015). The official language of Singapore is Malay, however English is the language of business and instruction (Contact Singapore, 2015). For the past three years, Singapore has been ranked the top place to do business in the world (World Bank, 2015). Singapore ranks in the top percentile for starting a business, getting credit, paying taxes, and enforcing contracts (World Bank, 2015).

2.2

Definition of Product and Service Opportunity

The fast food industry in Singapore is growing rapidly with a specific interest in outlets serving burgers. In recent years, there has been a growing trend towards more healthy options such as soups, salads, and healthy burger ranges. The size of the fast food industry in Singapore in 2014 was 1.2 billion Singapore dollars (Euromonitor, 2014). The industry saw an an average year-on-year growth rate of 5.76 percent (Euromonitor, 2014). Within the Singaporean fast food market, there are ten main specialities: Asian fast food, Bakery fast food, Burger fast food, Chicken fast food, Convenience Store fast food, Fish fast food, Ice Cream fast food, Latin American fast food, Middle Eastern fast food, and Pizza fast food (Euromonitor, 2014). Within the Singaporean fast food market, outlets that specialise in the service of burger fast food accounted for just under half of the market (Euromonitor, 2014). There are currently two hundred and eleven fast food outlets that specifically focus on burgers in Singapore, a 17.9 percent increase from 6

2008 levels (Euromonitor, 2014). The growth rate in revenue, between 2008 and 2013, for speciality burger outlets was 38.6 percent, the highest growth rate across the industry (Euromonitor, 2014). The future for speciality burger fast food chains in Singapore looks bright. Massive investment in new shopping malls and food centres, that are due to open in the coming months and years, creates a unique opportunity for Grill'd to expand into this growing pool of real estate in a notoriously property scarce market.

2.3

Evaluation of Key Environment Influences

Grill'd must consider the differing environmental conditions that will affect its entry into the Singaporean market. Below lists the different political, economic, socio-cultural, environmental, and legal aspects that will must be considered when expanding.

2.3.1

Key Political Issues  Singapore is a parliamentary republic with President Tony Tan Keng Yam as Head of State and Prime Minister Lee Hsien Loong as Head of Government  Political conditions are stable with the People's Action Party remaining in power since 1959 which has allowed for long-term planning of society and the economy  Government pursues stable and consistent policy making in regards to the business environment  Low level of political corruption  Favourable attitude to FDI – makes up just under 20 percent of GDP  Tax incentives for foreigners setting up business in Singapore  Political and bureaucratic positions are appointed on a meritocracy system leading to efficient governance  One party system raises concerns about political freedom of residents  Restrictions on freedom of speech  Strong political and economic ties with China, including Free Trade Agreement  Racial tensions between Chinese-born majority and ethnic Malays  Strong support by Government for small-to-medium enterprises

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2.3.2

Key Economic Factors  Private firms have a low level of gearing  Strong banking system with well capitalised banks and strong liquidity buffers  High sensitivity to global conditions due to high reliance on trade for GDP make-up which affects domestic consumption  Low levels of labour productivity  High levels of household debt affecting disposable incomes and thus discretionary spending  High rent costs affecting disposable incomes and thus discretionary spending  Rising labour costs  Extremely low business tax rate

2.3.4

Legal Issues and Structures of the Market  Legal system based on English common law  Seventh most transparent nation in terms of perceived level of corruption  Low non-salary cost of employment  High level of protection of investor rights  Double taxation agreement with Australia  Medium level of political interference in justice system  Business account confidentiality is at risk due to forced disclosure of accounts  Starting a company is Singapore requires a resident or Singapore Employment pass holder as one of the directors

2.3.5

Cultural Issues and Factors  High number of Chinese-born residents  Chinese 74.2%, Malay 13.3%, Indian 9.1%, other ethnicities 3.3%  Malay and English are official languages. Most Singaporeans speak English 8

 Business is normally conducted in English  Main religions are Buddhism, Islam, Christianity, Taoism and Hinduism  High level of foreigners from different backgrounds creates differing demand and cultural norms

2.3.6

Social Issues  Strong education system  Low population growth rate – 1.92 percent  High level of income disparity  Low unemployment rate – 1.9 percent  Oppressive government  Xenophobi...