Swnov 6-3 - INDIVIDUAL ASSIGNMENT: THE SUGAR BUN’S FORMULA: INNOVATION AND RENOVATION PDF

Preview

Summary

INDIVIDUAL ASSIGNMENT: THE SUGAR BUN’S FORMULA: INNOVATION AND RENOVATION...

Description

INDIVIDUAL ASSIGNMENT: THE SUGAR BUN’S FORMULA: INNOVATION AND RENOVATION

Executive Summary SugarBun is a Malaysian giant in fast food and Asian cuisine industry. The study has been carried out to provide information about the success of the company in local and global markets. A detailed analysis of the company's success and globalization has been done based on the findings. The success strategies of the company have been briefly discussed in the study. Global expansion strategies, as well as methods for market penetration, have been discussed in the study as well. Potential for new market acquisition has been analysed in thoroughly in the study along with the issue generated concerning globalisation and product development has been discussed. A list of suggestions has been recommended in the study for mitigating the generated issues in the study.

Table of Contents 1. Introduction..................................................................................................................................3 1.1 Background of the company..................................................................................................3 2. Findings and Analysis..................................................................................................................3 2.1 Success of Sugar Bun in Entertainment and Food Business..................................................3 2.2 Sugar Bun expansion (Global)...............................................................................................5 2.3 Sugar Bun's New-Market potential (Utilization of cultural aspects).....................................6 2.4 Current Issues with SugarBun & Recommendations.............................................................7 3. Conclusion...................................................................................................................................8 References........................................................................................................................................9

1. Introduction SugarBun is a food chain based on Malaysia which started their business by selling ice cream through an ice cream parlour. SugarBun has a various interrelated business associated with it. The study aims to provide information regarding the success of SugarBun in food and entertainment industry. The study will also evaluate the expansion of SugarBun in the global arena. Sugar Bun's capitalisation on finding new markets by utilizing the cultural aspect will be discussed briefly. Current issues about organisational and operational working principles along with sales and revenue generation of Sugar Bun will be analysed along with recommendations for improvement on the current issues. 1.1 Background of the company SugarBun was established in the year 1979 as an ice cream parlour and then innovated further into the beverages and food franchise [ CITATION Sug181 \l 1033 ]. With just 12 restaurants in the year 1993, SugarBun's original owner handed over the duties to a new shareholder and 4 years later in 1997, the parent company of SugarBun, Borneo Oil was sitting second in the stock exchange list of Kuala Lumpur [ CITATION Sug181 \l 1033 ]. The company originally started selling Asian foods in 2001 and experienced a drastic and rapid increase in sales. In the year 1999, SugarBun was listed as a member of the Malaysia Franchise Association (as per the case study).

2. Findings and Analysis 2.1 Success of Sugar Bun in Entertainment and Food Business SugarBun is one of the most popular names in Malaysia and it is famous for outstanding eco fish meals and other special Asian cuisines. SugarBun is a huge success with high sales and revenue generated consistently every year. The company which initially started as a fast food outlet is now standing equivalent with McD (as per case study). After the introduction of Datuk Joseph Ambrose Lee in 1997, the company has been expanding globally since then and the company even believes to thrive globally as well. Based on the views of [ CITATION Vir15 \l 1033 ], a company can only thrive with a great leader. SugarBuns

introduction to its new shareholder has provided ample opportunities to grow locally with the help of immense promotions and attractive offers for the public. The company's success completely depends on their vision for the betterment of society and also a contribution to product innovation and customer satisfaction (as per case study). SugarBun offered a wide range of savoury treats which includes foods based on Asian and western cuisine along with beverages and pastries. The company also incorporated some of their special foods which included grilled tilapia and Assam pedals (as per case study). The company also depended on few technologies which included Friends for Life (FOS) loyalty programs for their existing customers which they further upgraded into magnetic strip cards for WincorNixdorf System and CRMS (Customer Relationship Management System). Introduction to these methods has increased the effectiveness and efficiency for managing a huge amount of member database which includes loyal customers and fans which furthered enhanced customer satisfaction and brand awareness (as per case study). Success for SugarBun also includes their introduction to bonus shopping for loyal customers and introduction to incentive programs which further rewarded the customers. The introduction to ‘Friends of Sugar Bun’ program for loyal customers included privileges to convert the reward points from a single party reward into a multiple party reward (as per case study). SugarBun also experienced huge success through community service programs and sponsorship of such programs. According to the study by [ CITATION Vir15 \l 1033 ], promotion on large scale events and cultural programs can increase the brand value of an organisation by a huge margin as the promotion is not only being done locally but globally as well. Sponsorship of MERC (Marine Ecological Research Centre) at a community service event in Gavana brought huge success to SugarBun. SugarBuns not only promoted their brand through sponsors but also offered customers free vouchers when the customer would buy any meal for or more than RM30.00. With the FOS membership cards, the customers can enjoy a discount of 10% on the effective price every time they visit SugarBun restaurants.

2.2 Sugar Bun expansion (Global) With the huge success of SugarBuns locally, the company aimed to take their business global with a vision of opening 150 news outlets in just 5 years (as per case study). According to the reports of [ CITATION Sug18 \l 1033 ], SugarBuns aims to open various restaurants in Malaysia and outside Malaysia as well. SugarBun is the only Malaysian franchise to open restaurants globally [ CITATION Lin19 \l 1033 ]. SugarBun started from West Malaysia and has expanded to international markets of India, Australia, China, United States, Bangladesh and Indonesia. The reason for aiming to global expansion is largely based on the fact that SugarBun accelerated their domestic business by 83% in 2011 when compared to 2010 [ CITATION Lin19 \l 1033 ]. By the end of 2011 SugarBun has already opened restaurants in Chin and Bangladesh. The expansion of the company was not as small as the company's restaurant in China had a seating capacity of 200 people which was way larger than domestic Chinese restaurants. By the second half of 2012, the company aimed at launching more than 12 restaurants domestically and 6 restaurants globally which included one outlet in Brunei, 4 outlets in China and one in Melbourne, Australia [ CITATION Lin19 \l 1033 ]. The expansion of a company on a global level is solely based on the popularity of the company in the domestic market as well as their strategy for each market based on customer satisfaction and preferences [ CITATION Cir16 \l 1033 ]. Since SugarBun is a fast-food chain and Asian dining specialist, the demand for quality Asian food in the global markets increased rapidly and SugarBun took the correct advantage of it by doing the right research and market study, the company established various restaurants depending on customer demands. With expertise in franchise business modelling and 30 years of experience in the food industry SugarBun has developed Information System, Training operations, Quality Assurance, marketing and research development team which increased their potential for global success [ CITATION Lin19 \l 1033 ]. Marketing and promotion of an organisation's goals and achievements can play a huge role in global expansion of the particular company [ CITATION Gol15 \l 1033 ] Global expansion also became easy for SugarBun as they acquired the MS ISO 9002 (Malaysian written standard for International standard organisation) certification which is globally identified as the

highest standard for an operating industry. SugarBun also promised an average return of 15% depending on the amount of investment for any acquisitions of the franchise such marketing and financial strategies are the reason for SugarBun’s global expansion. 2.3 Sugar Bun's New-Market potential (Utilization of cultural aspects) SugarBun is a huge name in the Malaysian market. SugarBun acquired the highest standard of authentication from ISO and also are globally popular for their Asian and Western cuisines. Organisational achievement can only help the company to thrive in existing markets, to acquire and stand on a completely new market, market penetration strategy along with expertise in local product development is very important [ CITATION Bos15 \l 1033 ]. The company is a domestic giant wanted to expand and discover new markets for global expansion. SugarBun's potential for the new market has always been crucial for their business, adding of proactive strategies for customer engagement has been the key for SugarBun (as per case study). The introduction to FOS card and Magnetic strip cards for loyal customers has been a popular thing for the company. Introduction of SugarBun into the Chinese market with these strategies has proved to be helpful as the company just didn't introduce two new cards, but there were 12 separate card designs based on the customer's loyalty in China (as per case study). SugarBun also used the power of media by promoting its brand through memorable and interesting radio advertising in China. Few of the Audio advertising included phrases like “za Shu law, JI lou pau, ping chi ling ping chi ling, ping chi ling! Siaw di ni le? Wo you chik sugar bun bun bun bun bun bun bun bun, haha!” which attracted the customers towards the brand (as per case study). Utilization of the cultural aspect is very important for an organisation as it directly reaches out to the local people who further help the company to correctly position their goods and products [ CITATION Bos15 \l 1033 ]. Another customer-centric strategy for the Chinese market by SugarBun was to focus on prosperity based food which they advertised as prosperity Fish Meal with the tagline saying "Prosperity in every bite" (as per the case study). The specific approach to make a product customer-centric by stressing on the point which will hit the customer emotionally was an excellent strategy adapted by SugarBun. SugarBun also adapted the technique to wish their customers in Chinese saying “wishing you nien Nien yu yee” which stated that the customers get

fish throughout the year (as per the case study). The advertisement also focused on the brand's concern towards the environment as SugarBun always advertised their restaurants as “will have enough food to eat every year” which raised appreciation about their sustainable development. Use of the number 8, which is a lucky number for the Chinese people, SugarBun advertised their platter for large fried fish with steamed rice and vegetables as RM8.88 (as per the case study). 2.4 Current Issues with SugarBun & Recommendations Issues With the introduction of numerous food businesses nowadays, a company cannot only survive by serving their specials only [ CITATION Jes17 \l 1033 ]. SugarBuns global expansion has led to humongous success for them but also came with a threat from rival companies. The company serving Asian special foods and eco fish meals which is not enough as other companies are coming through all these ways to copy such meals is a threat to the company. A company going global has to face a lot of challenges which includes political and social factors based on various country’s trade and political relations [ CITATION Das17 \l 1033 ]. SugarBuns being a Malaysian company doing business in both China and the US may be a point of concern as the trade relations between the two countries is not good. SugarBuns dealing only in Asian and Western cuisine is also a point of concern as the amount of globalisation that the company is aiming requires more effort in market penetration and product development. Extra marketing and promotion of the company can be a point of concern as over promotion may lead to negative customer satisfaction. Recommendations It is suggested that the company should follow basic strategies for market penetration and product development. Development of a product based on customer demand is essential [ CITATION Mun17 \l 1033 ]. SugarBuns should create few new products other than their special Asian cuisine as the customers outside of Asia wants other options apart from just Asian cuisine.

Political scenarios play a very important aspect of the rise and decline of a large organisation. SugarBuns doing business in both the US and China can prove fatal if the cold war among the two countries takes a negative turn [ CITATION Rah17 \l 1033 ].

3. Conclusion SugarBun is a huge Malaysian restaurant chain which focuses on Asian and western cuisines. The success of SugarBun came from the company's extensive marketing intelligence and customer-centric product design and promotion. The FOS loyalty program of the company enhanced customer satisfaction by a huge margin as the customers are largely benefitted by getting offers and free meals in return. SugarBuns community service promotions have played a significant role in their success. SugarBun's aim to thrive globally has helped the company to overcome several boundaries. The company aimed to open several restaurants outside Malaysia, China being one of the main focus points for the company. The domestic popularity of the company and acquisition of the ISO's highest product standard has pushed the company further ahead form other competitors. SugarBun's new market potential has included the promotion of their products in cultural languages which largely helped them attract customers. Few issues regarding the political scenario and product development are present, appropriate suggestions to mitigate such issues have been discussed in the study.

References Boskou, G. K. (2015). Compliance of Food and Beverage Companies as to the Requirements of Internal Audit. HAICTA , 551-562. Ciriminna, R. F. (2016). Pectin production and global market. Agro Food Ind. Hi-Tech, 27(5) , 17-20. Dass, S. C. (2017). Food factory genomics: where big data drives quality and food safety. Food Protection Trends, 37(5) , 368-374. Gollnhofer, J. F. (2015). Cultural distance and entry modes: implications for global expansion strategy. Cross cultural management, 22(1) , 21-41. Jespersen, L. M. (2017). Development and validation of a scale to capture social desirability in food safety culture. Food Control, 82 , 42-47. Lindsay, E. (2019). SugarBun franchise a local success story. Retrieved October 21, 2019, from theborneopost.com: https://www.theborneopost.com/2012/07/24/sugarbun-franchise-alocal-success-story/ Munro, A. (2017). Practical succession management: How to future-proof your organisation. Routledge. Rahimifard, S. W.-G. (2017). Forging new frontiers in sustainable food manufacturing. International Conference on Sustainable Design and Manufacturing , 13-24. Sugar Bun. (2018). About Us. Retrieved from Sugar Bun: http://www.sugarbun.com/about-us thestar.com. (2018). SugarBun on expansion mode. Retrieved from thestar.com: https://www.thestar.com.my/business/business-news/2018/02/26/sugarbun-on-expansionmode Viren, P. P. (2015). Social network participation and coverage by tourism industry sector. Journal of Destination Marketing & Management 4(2) , 110-119....