PREPARED BY :

BUN()

AMZAR()

IFFA ATIQAH ()

AZRIN ASYRINI BINTI MOHD ATHZAHA (62211115694)

MAJOR STRATEGIC ISSUES THAT THE COMPANY FACE

1. FRANCHISING

• Achieve the rapid and low-cost market expansion

• Inflow of franchise fees

• Achieve global presence quickly

• Reduce the risk and cost of doing business via franchising

• Establish as master franchisee in other markets

ISSUES THAT COMPANY FACE THROUGH FRANCHISING

• Many laws and regulations implied on franchising

• The franchisor shall satisfy the '2+1' requirement in order

to develop a franchise in china

• Franchisor need to own two outlets of the franchise

business for more than one year.

• Franchising is a new business concept in Kazakhstan and

is not leveraged to its full extent.

• The Kazakhstani entrepreneurs find it easier to work with

Russian franchisors instead of other countries franchisors

• This is due to both Kazakhstan and Russian share the

same language and similar tastes, ultimately reduce the

localization costs in setting new franchise

• would be a threat for Old Town to expand its franchise

into Kazakhstan

2.EXPORTING

• Mode of entry to expand to other countries.

• Success to expand its brand

• Commenced the first export of 'OLDTOWN' brand of 3-in-

1 instant coffee mix to singapore in 2001.

• Success to expand the export markets to over 13

countries

• To increase sales and profits by fully utilize the use of existing

capacities

• Gain new knowledge and experience about the foreign countries

technologies, marketing techniques and foreign competitors

• Obtained the HALAL certification from the islamic religious

department of perak for the group's beverages in 2002

• Provides extra opportunity for old town to export the coffee mix

to islamic countries.

ISSUES THAT COMPANY FACE THROUGH EXPORTING

• To handle all the logistic of the transaction and spend

extra costs to export the products

• Need to pay attention on the costs from high tariff

barriers which set by the particular nation.

STRATEGY APPLIED TO THE COMPANY

1. Product Strategy

2. Major Brand Strategy Decision

3. Pricing Strategy

4. Promotions

5. Place

Product Strategy

• Product Classification

• Product and Service Decision

Major Brand Strategy Decision• Position their brand at the level of product attributes and belief and

values.

• Brand name selection

• Can use in many foreign countries and easy to pronounce, recognize and

remember

• A manufacturer's brand

• Using line extension as their brand development

• Is introducing many different flavor of white coffee in an existing category.

Pricing Strategy

• Skimming pricing

• Implement the competitive pricing in order to gain the

competitive advantages and market share

• Promotional pricing strategy

• Temporary reduce the price to attract more consumers.

Promotions

• Serving the coffee in package to be selling in those

supermarket and convenience stores

• Advertising on facebook to advertise their new outlet's

location as a reminder to customers.

Place

• Using direct channel to establish a sales contract by carries

goods

• Using retailer channels

• Selective distribution of channel intensity as a market

coverage strategy

• Strategic location

ISSUES THAT THE COMPANY MUST TACKLE NOW TO PLACE INTO THE BETTER POSITON IN FUTURE

1. JOINT VENTURES

• Establishment of a firm that is jointly owned by two or more

otherwise independent firms

• With chatime in Australia

• Getting local partner's knowledge

• Will face lots of barrier to entry to the new market

• Costs and risks of opening a foreign market are shared

• Reducing the necessary costs

• Allows Old Town to learn about a new market environment

• Can success to become an insider in the country

• Improve the image and reputation

• Can penetrate to other foreign market in future with easier

way and reduce lots of entry barriers

• Building up their brand name

2. STRATEGIC ALLIANCES

• As an entry mode to foreign countries

• With China

• China businesses are stable and growing

• Intends to replicate the popularity of its coffee brand

• Demands of Old Town FMCG products remain tough

• Prospects seem capable at this point in time for penetration

• Ensure its company foundation can be strongly build

• Forming a strategic alliance with Secret Recipe in China

• Gaining extra knowledge