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Transcript of IMT Report
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BM 007-3-1-IMT
Introduction to Management
Group Members:
Yan Hui Xin (TP 021174)
Saw Kah Chiun (TP 021226)
Nadia Nadjib (TP 020298)
Wei Ling (TP 023748)
Yang Kai (TP 023749)
Lecturers Name: Thilageswary Arumugam
Submission Date: 10th
December 2010
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Table of Contents
1. Introduction ....................................................................................................................... 32. Economical ......................................................................................................................... 43. Legal - Political ................................................................................................................. 6
3.1Political ..........................................................................................................................63.2Legal .............................................................................................................................63.3 Halal Certification ........................................................................................................7
4. Customer and Clients ........................................................................................................85. Competitors ..................................................................................................................... 106. Conclusion ....................................................................................................................... 127. References ......................................................................................................................... 13
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1. Introduction
The OLDTOWN story began in 1958, in Ipoh Town Perak, Malaysia. It all started at the
White Caf a classic coffee shop. The owner, inspired with a vision and the passion to make
and serve fine coffee, created a secret white coffee blend. White Caf can be traced back in 1999,
which the co-founder and Executive Directors, Mr Goh Ching Mun and Mr Tan Say Yap
produce their own 3-in-1 instant white coffee.
Old Town White Coffee currently in November 2010 has 177 outlets which had rapidly
increasing Malaysia include in Singapore and planning to have more. Old Town White Coffee
tagline is Take Your Time, Savor Every Moment, this idea come from Ipoh, the origin, people
living in a small town, which has a slower life beat. Citizen savor every moment just like the way
they drink White Coffee, every cup is taken one sip at a time which will positive encounter for
consumers who will return over and again.
The purpose this assignment is to understand diversity of the scope of management in
organizations and concepts and principles related to entrepreneurial activities and their
management.
This assignment focused in two mega environment; Legal-Political Element and
Economic Element, two task environment; Customer and Clients and Competitors. The mega
environment is the general environment which reflects the broad conditions and trends in the
societies within which an organization operates. The task environment is that segment of the
external environment made up of specific external elements (usually organizations) with which
an organization interfaces in the course of conducting its business.
Legal-political is about the legal and governmental systems within which an organization
must function, and for economic element is about, did Old Town affected if economic crisis and
economic activity is governed by market forces. Customer and clients is how Old Town attract
customer by giving promotion and how to stay loyal. For competitors is about the S.W.O.T
between the companies.
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2. Economical
Totality of economic factors such as employment, income, inflation, interest rates,
productivity, and wealth that influence the buyer behavior of consumers and firms.
(www.businessdefinition.com)
Figure 1, Economic definition (Self-Made)
Old Town White Coffee business was equally focused on its three-in-one coffee mix
retail business, which started a decade ago, and the food and beverage chain, which took off in
2005,
Being the pioneer white coffee brand with roots in Ipoh, the Old Town White Coffee brand at
present has about 40 per cent of the market share for the white coffee mix retail market. The rest
is believed to be shared by more than 20 other brands. The expansion of the Food&Beverage
business was based on three models -- fully owned outlets, joint ventures and licensing. Theirstrategy was to expand as fast as possible to capture market share.
Economic
How the economy affects a business in terms of taxation, government spending, general demand,
interest rates, exchange rates and global economic factors.
Some examples include:
Economic growth
Interest rates
Exchange rates
Inflation
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During economy crisis, Old Town White Coffee is still making money. The price of
foods for Old Town White Coffee are cheap and reasonable, as a result the profit is not
decreasing. Promotion of breakfast set or set meal help a lot in profit gaining because the price is
cheaper than other restaurants
The Economic conditions affecting old town white coffee company in easiness or difficulties is
to be successful and profitable at any time because its affect both capital availability and cost,
and demand, hence, customers play a very important role in organizations in gaining profit.
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3. Political and Legal environment
As part of the macro forces of the external environment, the political and legal factor
affects a business. In Old Town White Coffee, this element is applied through its nature of
business and its industry, food and beverage industry.
3.1 Political
The basic understanding of the political legal environment is when the government
implement's laws and or regulations which affect the way a business operate.(www.answer.com)
In Malaysia, competition of the food and beverage industries between local and
international industries are high .Political decisions can impact on many vital areas for business
such as the education of the workforce, the health of the nation and the quality of the
infrastructure of the economy such as the road and rail system. It is a component of the
marketing environment that consists of laws & their interpretations, requiring firms to operate
under competitive conditions and set to protect consumer rights.
The political factor does not really have much influence on the company but Old Town
White Coffee outlets are situated at politically stabled places.
3.2 Legal
All businesses have to abide the laws of the country which includes Old Town White
Coffee in Malaysia. The customers are able to savor the original White Coffee in the Old Town
White Coffee Food and Beverage Outlets, served fresh and true. In 1998, the launch of the Old
Town White Coffee Classic 3-in-1 instant fulfilled their dream to let people bring OLDTOWN
back into their homes. The Company has the obligation to submit their annual report of their
financial statements every year in order to pay tax which comes under the Sales Tax Act 1972.
Besides that, they are ordered to follow the laws within the Employment Act 1981 which
includes rights of employees, contract issues as well as working hours.
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3.3 HALAL CERTIFICATION
In 2008 subsidiaries dynasty confectionery and squire chef obtained HALAL
certification from Islamic religious department of Perak for the processing of various food, and
the other food processing subsidiary, emperors Kitchen obtained HALAL certification from the
IFRC ASIA. In the further affirm old town white coffee adherence to international food safety
standards, the subsidiary white coffee achieved ISO 22000:2005 certification and ISO
9001:2000 from BM department of public health, Ministry of health Malaysia in the same
year.(http://www.oldtown.com.my/)
Figure 2 Halal Certification (www.oldtown.com.my)
In addition to supporting political candidates, old town engages with government officials
in all levels on issues that impact at corporation and its operations. In year 2002, white coffee
obtained a HALAL certification from Islamic religious department of Perak for the group
beverages. This is part of intentions, which is produce beverages in accordance with the Islamic
law.
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4. Customer & Clients
Organization today builds customer relationship and ensures customer satisfaction so that they
stay close to a customer to build rapport and receive continuous buying. In order to gain
customer loyalty, Old Town White Coffee provides a lot of promotion and facilities, for example
every outlets of Old Town White Coffee provide free Wi-Fi connection. It has different range of
customer but businessman seems to favor to go Old Town White Coffee because they can hold a
meeting there as it is a very cozy place and easy access to internet.
Figure 3 Categories of Old Town White Coffee customers. (self-made)
Old Town White Coffee has a whole day promotion that attracts customers, which is set meals
such as My Breakfast, My Lunch, My Tea and My Dinner. Every set of meal has time limit, for
example, My Breakfast is available to 11am during weekdays.
Type Of Customers (Old Town White Coffee)
Businessman
Students
Families
Foreigners
44%
29%
18%
9%
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Figure 4 Menu of My Breakfasat (www.oldtown.com.my)
Not all kopitiam operates 24 hours, but certain branches of Old Town White Coffee does. The
main reason Old Town White Coffee open 24hours is to get more customers and satisfy their
needs.
Figure 5 Old Town White Coffee that operates 24hours (www.oldtown.com.my)
To maintain customer loyalty, Old Town White Coffee offers membership card. The advantages
of members privileges includes members get 50% discount for 2nd
main meal dinner order,
every Monday from 6pm to 9pm. Old Town White Coffee Day falls on every last Thursday of
the month and members will get one free white coffee with any purchase of rice or noodle meal.
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5. Competitor
Old Town White Coffee is part of the food and beverage industry and the competitor have
already created rivalry between them, whether in term of products or services. Its main
competitor is PappaRich. They compete with Old Town White Coffee with their coffee varieties
and local delights. Both serve Malaysia local delights. Old Town White Coffee on the other hand
is famous with their ready 3-in-1 instant white coffee and white coffee can drink.
Figure 6 Old Town White Coffee Can Drink(www.oldtown.com.my)
Old Town White Coffee successfully commercialized instant 3-in-1 white coffee in 1999, and
slowly spread to Singapore, Hong Kong and China. Old Town White Coffee believes that it is
easier to hit the market by releasing instant white coffee and can drinks. As their target market is
white-collars, they release can drinks that are available solely or in dozen. Old Town White
Coffee slowly immersed to the market after releasing instant white coffees and can drinks.
It is known that Old Town White Coffee has a high rivalry because of high competitors in the
industry. It is important to identify, due to the varieties of food served and services offered by
competitors are equally same. Competitors between existing players are likely to be high when:
There are many players of about the same size, Players have similar strategies There is not much differentiation between players and their products, hence, there
is much price competition
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Low market growth rates Barriers for exit are high.
On the other hand, PappaRich still remain its target as local consumers
with tight budgets on food and beverage. Both of the caf have similar
menu but the taste varies accordingly. PappaRich thinks that its better to
remain to the olden recipe when first started its business. Customers compare and contrast
menus, taste and prices of both caf and decide which to go base on their own preference.
Figure 7 Categories of Old Town White Coffee customers (provided by Old Town White
Coffee, Sri Petaling Branch)
0% 10% 20% 30% 40% 50%
Businessman
Students
Families
Foreigners
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6. Conclusion
Old Town White Coffee has gone through a rapid growth and immerges to the market rapidly.
Using local delights as their main dishes has attracted more customer and foreigners. Base on
Old Town White Coffee 2009 financial analysis, they expect 25% business increment. Although
in earlier stage, Old Town White Coffee failed to obtain Halal certification, there are still
Muslims customers as the food served does satisfied Halal conditions. Refer back to Figure 7,
majority of Old Town White Coffee customers are businessman due to comfortable environment
and wireless connection. Both Old Town White Coffee and its competitor have the same
customer scope.
Do you think the chosen organization will be successful under the current leader in the future?
Why or why not?
We think that Old Town White Coffee will be successful under the lead of Mr. Goh Ching Mun.
As of now, after 11 years of operation, they did not report any financial loss nor need of further
investment from public. Furthermore, it can be seen that Starbucks is spreading within Asia after
opening their first branch in Singapore. Likely, Starbucks merchandises, instant white coffee and
canned white coffee has successfully immerge to Singapore, China and Hong Kong. They
successfully embark in Asia Coffee industry, just like their mission to be Asia Pacifics Leading
White Coffee Producer providing high quality products to customer globally.
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7. References
1. Customer satisfaction, W.M. hughes R.J. kapoor. 2009.
2. Economic environment. Available at: www.businessdefinition.com. [Accessed on 1st
December 2010]
3. Elements of the Mega Environment. Available at http://googledefinition.com/definition-
of/elements-of-the-mega-environment[Assessed on 8th December 2010]
4. Management, W. Heinz, 2009
5. Old Town White Coffee official website. Available at:www.oldtown.com.my[Accessed on
15th
November 2010]
6. Old Town White Coffee Thread. Available at
http://www.joomcool.com/forums/showthread.php?8665-OLDTOWN-White-Coffee-Thread
[Assessed on 8th December 2010]
7. Old Town White Coffee children fund care. Available atwww.oldtown.com.my [Accessed on
2nd December 2010]
8. Old Town White Coffee. REINFORCES BEST HALAL PRACTICE IN ALL
OUTLETS. Available at: http://malaysia.news.yahoo.com/bnm/20100812/tts-old-town-white-
coffee-993ba14.html. [Accessed on 4th
December 2010]
9. The Task Environment and Its Elements. Available at http://googledefinition.com/definition-
of/the-task-environment-and-its-elements[Accessed on 7th
December 2010]
http://www.businessdefinition.com/http://www.businessdefinition.com/http://googledefinition.com/definition-of/elements-of-the-mega-environmenthttp://googledefinition.com/definition-of/elements-of-the-mega-environmenthttp://googledefinition.com/definition-of/elements-of-the-mega-environmenthttp://www.oldtown.com.my/http://www.oldtown.com.my/http://www.oldtown.com.my/http://www.joomcool.com/forums/showthread.php?8665-OLDTOWN-White-Coffee-Threadhttp://www.joomcool.com/forums/showthread.php?8665-OLDTOWN-White-Coffee-Threadhttp://www.oldtown.com.my/http://www.oldtown.com.my/http://www.oldtown.com.my/http://googledefinition.com/definition-of/the-task-environment-and-its-elementshttp://googledefinition.com/definition-of/the-task-environment-and-its-elementshttp://googledefinition.com/definition-of/the-task-environment-and-its-elementshttp://googledefinition.com/definition-of/the-task-environment-and-its-elementshttp://googledefinition.com/definition-of/the-task-environment-and-its-elementshttp://www.oldtown.com.my/http://www.joomcool.com/forums/showthread.php?8665-OLDTOWN-White-Coffee-Threadhttp://www.oldtown.com.my/http://googledefinition.com/definition-of/elements-of-the-mega-environmenthttp://googledefinition.com/definition-of/elements-of-the-mega-environmenthttp://www.businessdefinition.com/