Bpmn3023 Strategic Management Berjaya Food Berhad

BPMN3023 STRATEGIC MANAGEMENT
BERJAYA FOOD BERHAD
SCHOOL OF BUSINESS MANAGEMENT
COLLEGE OF BUSINESS
UNIVERSITY UTARA MALAYSIA
BPMN 3023 STRATEGIC MANAGEMENT
SECOND SEMESTER SESSION 2018/2019 (A182)
GROUP D
Berjaya Food Berhad (BFood)
Submitted to:
Dr. Yusmani Mohd Yusoff
Prepared by:
MATRIC. NO. NAME

1 245479 Chan Phooi Yee
2 245932 Lau Yan Ping
3 246445 Heng Yong Hui
4 248492 Sivatarsini murugesu
Contents
Berjaya Food Berhad (BFood)...............................................................................................................4
Introduction...........................................................................................................................................4
Company Profile................................................................................................................................4
The List of Board of Directors (BODs).............................................................................................5
The List of Top Management Team...................................................................................................11
Product or Services..........................................................................................................................12
Company Structure..........................................................................................................................13
Company Vision, Mission and Objectives.......................................................................................13
Vision..........................................................................................................................................13
Mission Statements......................................................................................................................13
Strategic Issues....................................................................................................................................17
PESTEL Analysis............................................................................................................................29
Political factors............................................................................................................................29
Economic conditions...................................................................................................................29
Sociocultural factors....................................................................................................................30
Technological factors...................................................................................................................30
Environmental forces...................................................................................................................31
Legal and regulatory factors........................................................................................................31
Porter’s Five Forces Analysis..........................................................................................................32
Bargaining Power of Supplier......................................................................................................32
Threat of New Entrants into the Market.......................................................................................33
Rivalry among Competing Sellers...............................................................................................33
Threat of Substitutes....................................................................................................................34
Bargaining power of buyers.........................................................................................................35
Group Mapping...............................................................................................................................36
SWOT Analysis...................................................................................................................................37
STRENGTH....................................................................................................................................39
WEAKNESSES...............................................................................................................................41
OPPORTUNITY.............................................................................................................................43
THREAT..........................................................................................................................................45
Strategic Propose.................................................................................................................................48
Strength-Opportunities (SO strategy)..............................................................................................50
Weaknesses-Opportunities (WO strategy).......................................................................................52
Strength-Threat Strategy (ST)..........................................................................................................53
Weaknesses-Threat (WT Strategy)..................................................................................................55
STRATEGIC SOLUTIONS.................................................................................................................58
Solution to First Issue: Labour Shortage in Retail Sector....................................................................58
Solution to Second issues: Low Profitability.......................................................................................60
Solution to Third Issue: Weak ringgit impacted its gross profit margins.............................................61
Solution to Fourth Issue: Number of Competitors Increased Due to Changes of Government’s Policy
............................................................................................................................................................. 62
Solution to Fifth Issue: The Weakening of Consumer Purchasing Power............................................63
Conclusion...........................................................................................................................................64
References...........................................................................................................................................65
Berjaya Food Berhad (BFood)
Introduction
Company Profile
Berjaya Food Berhad (BFood) is a public limited company. It is one of the subsidiaries
company under Berjaya Corporation Berhad, where it was founded in 1984 by Tan Sri
Vincent Tan Chee Yioun. On 21 October 2009, BFood was incorporated in Malaysia. In 3
December 2009, BFood converted into public limited company and in 8 March 2011, it listed
on the Main Market of Bursa Malaysia Securities Berhad.
In January 2011, Berjaya Roaster (BRoasters) was became wholly owned subsidiary under
BFood. In early year, BRoaster was involved in the development of the Kenny Rogers
Roasters restaurant chain in Malaysia. On 26 July 2011, BFood signed a conditional joint
venture agreement with PT Mitra Samaya, Indonesia, PT Harapan Swasti Sentosa, Indonesia
and PT Boga Lestari Sentosa, Indonesia ("PT Boga") to develop and operate KRR franchises
in Java and Bali, Indonesia under PT Boga.
While on July 19, 2012, BFood completed the acquisition of 11,500,000 ordinary shares of
RM1.00 each, representing 50% equity interest in Berjaya Starbucks Coffee Company Sdn
Bhd ("BStarbucks") for a cash consideration of RM71.7 million. The remaining 50% equity
interest was held by Starbucks Coffee International, Inc. ("SCI"). On 9 August 2012, BFood
completed its Rights Issues and 115,081,760 new shares and 115,081,760 warrants arising
from the Rights Issue were listed on the Main Market of Bursa Malaysia Securities Berhad on
13 August 2012. On 18 September 2014, BFood completed the acquisition of 11,500,000
ordinary shares of RM1. 00 each, representing the remaining 50% equity interest in
BStarbucks not owned by BFood for a cash consideration of USD88,000,000 (equivalent to
about RM279.52 million). BStarbucks is now a 100% owned subsidiary of BFood.
On 7 December 2012, BFood acquired 100% equity interest in Jollibean Foods Pte Ltd,
Singapore ("Jollibean Foods") for a cash consideration of RM19.02 million.
The List of Board of Directors (BODs)
Chairman
DATO’ TUNKU SHAZUDDIN BIN TUNKU SALLEHUDDIN
Dato’ Tunku Shazuddin Bin Tunku Sallehuddin 48 years. On 4 December 2017, Tunku
Shazuddin appointed as the Chairman of the Berjaya Food Berhad. He is one of the sons of
the Sultan of Kedah Tan Sri Tunku Sallehuddin Sultan Badlishah also a member of the
Employees’ Share Scheme Committee. Tunku Shazuddin was graduated from Kansas
Wesleyan University, United States of America in the course of Design and Marketing. After
graduate, he began his career with Johan Design Associates. Tunku Shazuddin managed
numerous design projects from graphic, interior design to branding for various corporate and
private clients.
He furthers his career in the same industry with the other companies such as Hewlett Packard,
Data One and Keppel Group of Singapore until year 2001. In 2002, Tunku Shazuddin venture
into the design business and formed an agency in 2005, subsequently became its major
shareholder for Rethink Sdn Bhd and Reka 3 Sdn Bhd.
Currently, Tunku Shazuddin is a shareholder and managing director of Seri Libana Sdn Bhd,
a company involved in interior fit-outs and project management specifically handling
government contracts and the Chairman and a Director of Naza Italia. Moreover, he provides
consultancy services to the government departments including acquisition of new technology.
Tunke Shazuddin are funding for various agricultural and tourism initiatives.
Chief Executive Officer
Sydney Lawrance Quays
On 12 January 2017, Sydney appointed as Executive Director and 1 June 2017, he

subsequently appointed as the Chief Executive Officer of the Berjaya Food Berhad. Sydney is
the Chairman of the Employees’ Share Scheme Committee and the member of the
Sustainability Committee. Sydney graduated with Honors from the American Hotel and
Lodging Association United States of America majoring in Hospitality Management and
Marketing.
He is a Director of Berjaya Food Trading Sdn Bhd and is responsible for the growth of
BFood Trading, which operates the fast-moving consumer goods (“FMCG”) business,
overseeing the expansion of the FMCG business into different channels and other retail
sections as well as new products implementation. Moreover, Sydney is a Director of
BRoasters, Berjaya Jollibean (M) Sdn Bhd, Berjaya Food (International) Sdn Bhd and holds
directorships in several other private limited companies in the Berjaya Corporation group of
companies. Currently, he oversees the day-to-day operational decisions for Berjaya
Starbucks, Berjaya Roasters (M) Sdn Bhd, Jollibean Foods Pte Ltd and BFood Supreme. He
responsible for developing the business strategies and directions for business growth and new
market expansion as well as preparing and implementing comprehensive business and
marketing plans, bringing new and innovative ideas to build sales, elevate brand status,
profitability, financial performance and future prospects of the business.
Sydney started his career in the hotel industry. He was moving through different divisions and
subsequently joined the Quick Service Restaurant industry. In 1989, Sydney had been
working for McDonald’s Malaysia as a trainee manager. In 1998, he was a pioneer with
Berjaya Starbucks Coffee Company Sdn Bhd (“BStarbucks”) holding the position as
Marketing and Merchandise Manager.
On 31 October 2012, he was appointed as Managing Director of Berjaya Starbucks and

Berjaya Food Supreme Sdn Bhd (“BFood Supreme”) on 24 September 2013. In 2014, he has
been awarded “The Asia Pacific Entrepreneurship Award” and 2016 awarded “The Asia
Responsible Entrepreneur” in 2016.
Non-Independent Non-Executive Directors
Tan Thiam Chai
On 20 May 2010, he was appointed to the Board as a Non-Independent Non-Executive

Director. He is also a member of the Nomination Committee, Audit and Risk Management
Committee, Remuneration Committee and Sustainability Committee.
Currently, he is the Chief Financial Officer of Berjaya Corporation Berhad and Executive
Director of Berjaya Land Berhad, a Director of Atlan Holdings Bhd, Indah Corporation
Berhad, Cosway Corporation Berhad, Berjaya Vacation Club Berhad, Tioman Island Resort
Berhad, Berjaya Starbucks Coffee Company Sdn Bhd and Cosway Corporation Limited
(Hong Kong).
He graduated from Kolej Tunku Abdul Rahman (now known as Tunku Abdul Rahman
University College) majoring Diploma in Commerce (Financial Accounting). In 1981, he
completed The Association of Chartered Certified Accountants (UK) professional course. He
is a Fellow member of the Association of Chartered Certified Accountants (UK) since 1990
and also a member of the Malaysian Institute of Accountants.
Furthermore, he started work with an accounting firm in Kuala Lumpur for about 2 years and
served in various Finance and Accounting positions with the Hong Leong group of
companies in Malaysia as well as in Hong Kong for about 8 years.
In early 1991, he joined Berjaya group of companies as a Finance Manager of an operating

subsidiary and was promoted to Operation Manager later that year. In 1992, he was
transferred to the Corporate Head Office of Berjaya Group Berhad to head the Group Internal
Audit function and subsequently. In 1993, he was promoted to oversee the Group Accounting
function of Berjaya Group Berhad.
Non-Independent Non-Executive Directors
Chryseis Tan Sheik Ling
Chryseis Tan graduated from Waseda University, Tokyo with a Bachelor of Arts in Liberal
International Studies 2012. In 2010, she also did an exchange programme in Accounting and
Finance in London School of Economics, United Kingdom.
Currently, Ms Chryseis Tan is the Chief Executive Officer of Berjaya Times Square Sdn Bhd,
a wholly owned principal subsidiary of Berjaya Assets Berhad, she mainly involved in the
marketing and overall management of Berjaya Times Square Mall, Kuala Lumpur.
Moreover, Ms Chryseis Tan is a Director and Chairman of Natural Avenue Sdn Bhd
(“NASB”), a subsidiary of Berjaya Assets Berhad since 1 August 2014. NASB is the
exclusive agent for Sarawak Turf Club’s Special Cash Sweep Number Forecast Lotteries in
Sarawak.
BERJAYA FOOD BERHAD
Independent/Non-Executive Directors
Datuk Zainun Aishah Binti Ahmad
On 20 May 2010, Datuk Zainun was appointed to the Board as an Independent Non-
Executive Director. She is the Chairman of the Audit and Risk Management Committee,
Nomination Committee and Sustainability Committee. Moreover, she is a member of the
Remuneration Committee and Employees’ Share Scheme Committee.
She graduated from University Malaya majoring in a Bachelor of Economics degree. She
started her career and worked with Malaysian Industrial Development Authority (“MIDA”),
the Malaysian government’s principal agency for the promotion and coordination of
industrial development for 35 years. Datuk Zainun has held various key positions in MIDA as
well as in some of the country’s strategic councils, notably her pivotal role as the National
Project Director in the formulation of the first Malaysian Industrial Master Plan in her 35
years of service,.
Moreover, she was the Director-General of MIDA and Deputy Director-General for 9 years
and 11 years. In MIDA, she also sat on various committees/authorities at national level,
including being a member of the Industrial Coordination Act Advisory Council, Defence
Industry Council and National Committee on Business Competitiveness Council, Malaysia
Incorporated and the National Project for Majlis Penyalarasan Perindustrian before retiring in
September 2004. Currently, she is a Director of Degem Berhad, Boustead Holdings Berhad,
British American Tobacco (Malaysia) Berhad and Pernec Corporation Berhad.
Dato' Mustapha Bin Abd Hamid
On 20 May 2010, Dato' Mustapha was appointed to the Board as an Independent Non-
Executive Director. He is the Chairman of the Remuneration Committee and the member of
the Nomination Committee, Audit and Risk Management Committee and Sustainability
Committee.
In 1972, Dato' Mustapha graduated from the Royal Military College. In 1977, he went to
obtain a Bachelor Degree (Honours) in Social Science from Universiti Sains Malaysia,
Penang and a Diploma in Public Management from the National Institute of Public
Administration Malaysia in 1978.
He started his career as an Administrative and Diplomatic Officer of the Research Division in
the Prime Minister’s Department and was posted as the First Secretary of the Malaysian
Embassy in Paris, France (1982-1985).
During his 16 years in the public service sector, he was the Consul of Consulate General
Malaysia in Medan, Indonesia in the year 1990 until 1993. Then Dato' Mustapha was a
Principal Assistant Director in the Prime Minister’s Department in the year 1993 until 1994.
In April 2018, he was appointed as Chancellor of Saito University College and at the same
time was awarded an Honorary Doctorate in Education.
Currently, he is a Director of Teo Guan Lee Corporation Berhad, Acmar FHP Group Berhad
and Lii Hen Industries Bhd. He also holds directorship positions in several other private
limited companies.
BERJAYA FOOD BERHAD
The List of Top Management Team
SENIOR INDEPENDENT NON- EXECUTIVE DIRECT

Zainun Aishah binti Ahmad
CHIEF EXECUTIVE OFFICER & EXECUTIVE DIRECTOR

Sydney Lawrance Quays
NON- INDEPENDENT NON- EXECUTIVE DIRECT
LingTan Sheik
CHAIRMAN
unku Shazuddin bin Tunku Sallehuddin
CO-SECRETARY
Lai Heng Tham
CO- SECRETARY
Poo Tyng Wong
CO-SECRETARY
Siew Guek Wong
Product or Services
Berjaya Food Bhd. is an investment holding company, which engages in the development and
management of restaurant chains and retail outlets. Its businesses include Kenny Rogers
Roasters, Starbucks Coffee, and Jollibean Foods. The company was founded on October 21,
2009 and is headquartered in Kuala Lumpur, Malaysia.
KENNY ROGERS ROASTERS – Has a healthy concept of less fat…less salt…less calories
by serving healthy meals.
BERJAYA STARBUCKS COFFEE COMPANY SDN.BHD- The leading specialty coffee

company and the industry benchmark in Malaysia.
JOLLIBEAN FOOD Pte Ltd - Jollibean's product offerings include Soy Beancurd, Mee
Chiang Kueh and pancakes with an assortment of delicious fillings.
Location & Contact Details
ADDRESS: Registered Office

Lot 13-01A, Level 13 (East Wing),
Berjaya Times Square,
No. 1 Jalan Imbi,
55100 Kuala Lumpur, Malaysia.
TEL: (603) 2149 1999 (General)
FAX: (603) 2144 0935
WEBSITE www.berjaya.com/berjaya-food
Company Structure
Company Vision, Mission and Objectives
Vision
To be the leading Food and Beverage organisation with a portfolio of reputable brands that
will enhance profitable and sustainable growth and stakeholder returns.
Mission Statements
1. To provide quality products and excellent services that differentiates us from others.
2. To be the preferred partner and promote win-win business relationships.
3. To achieve sustainable growth and returns for our shareholders over the long term.
4. To be the employer of choice.
5. To be a good corporate citizen in harmony with the environment and the communities
we serve.
Company’s Vision
To be the leading Food and Beverage organization with a portfolio of
reputable brands that will enhance profitable and sustainable growth and
stakeholders return.
Berjaya Food Berhad’s fundamental purpose is to be leader in Food and Beverage Industry.
Futhermore, the vision statement shows that BFood quite focus on brand management, profit
and growth. The most crucial part is BFood emphasize their stakeholders return in vision
statement.
Analysis:
1) Customers: Not stated
2) Products or services: Food and Beverage
3) Markets: Not stated
4) Technology: Not stated
After discussion, our group found that BFood did not stated clearly about their target
customers, markets and technology advance in their vision statement. However, we opined
that BFood should state these three major components in their vision statement in order to
make it clearer and complete.
In the product and service part, BFood only mention that they are providing food and
beverage without any further discussion. Although BFoodis well-known for their famous
outlet such as Kenny Rogers Roaster, Starbucks and Jollibean, BFood still have to mention
them in the vision statement to make it more specific and particular.
Company’s Mission
1) To ensure we provide a people culture that is performance driven and built on the
foundations of personal development, diversity and mutual respect for each
other.
2) To ensure total customer satisfaction.
3) To generate a profitable rate of return for all our shareholders.

Berjaya Food Berhad’s mission is to improve
4) To carry out our business in ways that are socially and environmentally responsible.
Analysis:
Berjaya Food Berhad’s mission statement would be analysed into components as followings:
1) Customers: Not stated

BFood do not mention their targeted customers in mission statement. BFood only state ‘to
ensure total customer satisfaction’ in its statement. We opined that BFood should clarify on
who will be their target customer before they aim to satisfy their customers.
2) Products or services: Not stated

BFood do not state which kind of products and services provided by them. However, they
should included this part in their mission statement. For example, they can aim to improve
the quality of food and beverages they provided in their restaurant chain (Kenny Rogers
Roaster, Starbucks and Jollibean).
3) Markets: Not stated

BFood do not mention their targeted market in mission statement. We opined that BFood
should clarify on which market segments they are expanding their business currently to let
customers and shareholders know to which extend BFood penetrate the Asian market.
4) Technology: Not stated
BFood do not state their technology used in mission statement. BFood only state ‘to carry out
our business in ways that are socially and environmentally responsible’ in its statement. We
considered that BFood are using technology which is environmentally friendly. However, we
are not sure on which type of technology they are using in their business.
5) Concern for survival, growth, and profitability: Profitable rate of return for
shareholders
BFood stated in mission statement, they aim to generate profitable rate of return for
shareholders.
According to BFood, currently there are still two non-performing businesses such as Kenny
Rogers Roasters (KRR) and Jollibean in BFood industry. It can be said that the profitability
of both restaurants dragged down BFood overall profitability. In other hand, Starbucks gain
huge profit where this chain organization is able to balance the financial deficit of BFood
industry. However, although BFood had lowered the expansion of its KRR restaurants,
BFood still expending this business as they feel that this organization might has opportunity
to surpass Starbucks’ revenue in future at Malaysia.
6) Philosophy: To provide a people culture that is performance driven and built on

the foundations of personal development, diversity and mutual respect for each
other.
The mission statement show BFood’s philosophy is to provide a people culture. BFood
claimed they are performance driven business and built on the foundations of personal
development, diversity and mutual respect for each other.
7) Concern for public images: Environmental Friendly

Stated that BFood carry out our business in ways that are socially and environmentally
responsible in their mission statement.
BStarbucks built the strategy of environmental friendly by promoting reusable cup and
container to their customer to increase the recycling and reduce the waste associated with
their cups by organise the programme “Bring Your Own Tumbler”.
BRoaster introduce “i.Care Box” for the on-going customer to reduce the plastic. Customers
will be given discount for return the “i.Care Box”
8) Concern for employees: Not stated

In mission statements, BFood do not mentioned concern for employees. Unlike vision
statement stated the stakeholders’ return, in mission statement, BFood only mention about
shareholders’ return.
Strategic Issues
1. Labour Shortage in Retail Sector
BFood chief executive officer Datuk Francis Lee Kok Chuan said the shortage of labour in
the retail sector, particularly the F&B business, is the main issue.
According to him, “Nowadays, it is not easy to get people. As an F&B player, we have to hire
a lot of people. People are now looking for an easy job, and they think working in the F&B is
tiring,”
2. Low Profitability
Its profitability has been under pressure, dragged down by non-performing businesses such as
Kenny Rogers Roasters (KRR) and Jollibean.
According to analysts, the KRR chain of restaurants in Malaysia and Indonesia continue to
disappoint, as consumer sentiment remains weak and competition rife. But its strategy to
close loss-making outlets of the famous restaurant chain will help improve profitability.
Hong Leong Investment Bank (HLIB) reported that short-term prospects do not look
promising for the group. However, the group continues to close non-profitable Kenny Rogers
Roasters Malaysia and Kenny Rogers Roasters Indonesia outlets, which bodes well for the
future.
3. Weak ringgit impacted its gross profit margins
BFood expects its Starbucks operations to maintain its revenue growth momentum and drive
the group's financial performance going forward. However, the raw material used is
purchased from Starbucks Corporation in US. The research firm reckons that the weakening
of the ringgit against the US dollar is the main reasons the declining of profits.
4. Number of Competitors Increased Due to Changes of Government’s Policy
The call for SMEs to adopt Industry 4.0 technologies is growing louder. With technology
rapidly evolving and converging, there is a stronger urgency for SMEs to leverage new
developments to enhance efficiency and increase productivity to better compete and grow
moving forward.
The tabling of Budget 2019 as well as the launch of the National Policy on Industry 4.0
(Industry4WRD) last week show the government’s commitment in assisting small businesses
toward this end. Under the Budget, the government has set aside over RM20bil to help
businesses embrace the Industry 4.0 age.
For example: RHB Banking Group aims to approve loans worth RM100mil for small and
medium enterprises (SMEs) in the next 12 months with the launch of its online financing
platform targeting the sector. Most of the SMEs that involved in F&B accelerate the
competitive environment.
5. Weakening of Consumer Purchasing Power
The retail sector is hurting as consumers have become cautious about their spending in view
of the slowing economy, as well as rising costs of living partly due to the weakened and
weakening ringgit.
BFood is not spared by the slowdown in the retail sector, and has lowered the expansion of its
KRR restaurants. Instead of opening 10 to 12 KRR outlets a year, it will probably just open
seven to eight outlets now. However, the group expects its Starbucks operations to maintain
its revenue growth momentum and drive the group's financial performance going forward.
Furthermore, based on Berjaya Food Berhad annual report, for the financial year ended 30
April 2018, its revenue decreased to RM6.7 million from RM7.5 million in the financial year
2017. The decrease in revenue was mainly due to overall slower retail market conditions in
Brunei and the weakening of local consumer purchasing power.
BERJAYA FOOD BERHAD
Company’s Internal Analysis
3.1 BERJAYA FOOD SDN.BHD Competitive Advantages

Intangible Berjaya Food Old Town The Chicken Rice Shop Competitive Advantage
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BERJAYA FOOD BERHAD
Tangible Berjaya Food Old Town The Chicken Rice Shop Company Advantage
Resource (TCRS)
Physical Bstarbuck: 40 stores, coffee Old Town products are being -101 stores in Malaysia Starbucks had introduced
resources equipment are Mastrena High exported to more than 14 -1 store in Brunei “Third Place” environment.
Performance Espresso countries worldwide. They -3 stores in Myanmar The “Third Place”
Machine have more than 200 café environment refers as the
- Location at all nation at outlets throughout Asia. place other than workplace
Malaysia except Perlis, The Group’s F&B segment and home that an individual
Kelantan and Terengganu has a total of 234 café outlets can visit to relax, gather or
BRoasters: comprising 197 in Malaysia, socialize with friends and
Wifi- service 8 in Singapore, 25 in family. Therefore, Starbucks
Indonesia, 1 in Australia, 2 in store is often decorated and
China and 1 in Hong Kong as filled with warm and
at FYE2017. comfortable climate such as
nice sofa, Wi-Fi services,
music and books offered to
consumer.
Financial Bfood in 2018 revenue RM The Group recorded higher Overall in 2018, The Chicken In term of revenue, BFood
resources 639.7 million compared to revenue of RM425.2 million Rice Shop generates 249.5 has the highest value which is
2017 which is RM 605.4 with 8.1% rise for 2017 as million in revenue per 639.7 million (2018).
million compared to RM393.4 employee In term of Profit before tax,
- Profit before tax in 2017 million in the financial year Compared to 130 million Old Town has the highest
was RM 24.3 million, in 2018 ended 2016. MYR (2017) value is RM80.2 million
is RM 19.2 million Profit before tax (“PBT”) (2017).
audit reports post to the registered RM80.2 million for
ARMC for review the financial year compared
to RM68.2 million in 2016,
show an increase of 17.6% or
RM12.0 million growth.
Technological BRoaster using SAP Old Town using ‘first-in first- -Modern processes, cooking BFood and its competitors
assets inventory system out’ method for inventory technology and high-tech seem like having same level
Berjaya Starbuck using Single tier method for tax retail systems. of technological assets. But
Point Of Sales stsyem(POS) purpose. -Comprehensive franchisee Starbucks Malaysia
and Inventory Management training programs. introduced Starbucks Card in
system Malaysia where customers
able to enjoy cup of coffee
with just a swipe at anytime
and anywhere. The Starbucks
Card Mobile Application was
introduced in 2014, making it
the fastest and most
convenient way to pay.
Organizational - Effectiveness of the risk Employees are the backbone The founder of TCRS, Gaik BFood has strong network of
resources management and internal of the business. Wong was awarded “The suppliers and retail. Due to its
control system Datuk Dr. Ahmed Tasir Bin Innovative Woman stable and reputable
Dato' Tunku Shazuddin Bin Lope Pihie as Independent Entrepreneur of the Year performance, suppliers are
Tunku Sallehuddin as Non-Executive Chairman- an Award” in 2004. willing to provide supplies in
Chairman of Berjaya Food. equal opportunity employer Other restaurants of Gaik advance without full
- other company with same and does not practice Wong & Wong Kah Lin payment.
industry include Hewlett discrimination of any form, -Sepiring BFood also has strong
Packard, Data One, Keppel whether based on age, gender, -Pancake House network with other
Group race or religion, throughout -DubuYo. companies in the industry.
- Shareholder in Seri Libana the organisation.
SDN BHD.
3.2 BERJAYA FOOD SDN.BHD FINANCIAL STATEMENT ANALYSIS
RATIO ANALYSIS YEAR 2018 YEAR 2017 YEAR 2016

(RM’000) (RM’000) (RM’000)
1. CURRENT RATIO
94,341 89,806 115,944
CURRENT ASSETS 276,256 279,198 180,545
CURRENT LIABILITIES
= 0.34 = 0.32 = 0.64
2. QUICK RATIO
94,341-34,068-18,259 89,806-37,752 -6,744 115,944-35,170-3,222
CURRENT ASSETS– 276,256 279,198 180,545
INVENTORIES-PREPAID
EXPENSES = 0.15 = 0.16 = 0.43
CURRENT LIABILITIES
3. CASH RATIO
28,782 2 1,256 33,354
CASH AND CASH 276,256 279,198 180,545
EQUIVALENTS
= 0.10 = 0.08 = 0.19
CURRENT LIABILITIES
4. PROFIT MARGIN
ANALYSIS
(639, 741 - 357,562) (605,441.0- 342,007.0) (554,363.0 - 307,483.0)
GROSS PROFIT MARGIN x 100 x 100 x 100
REVENUE – COGS 639, 741 605,441.0 554,363.0
X 100 = 44.11 % = 43.51 % = 44.53 %
REVENUE
OPERATING PROFIT (282,179 - 238,849.0) ( 263,434 - 224,830.0) (246,880 - 207,952.0)

MARGIN x 100 x 100 x 100
OPERATING PROFIT 639, 741 605,441.0 554,363.0
X 100 = 6.77 % = 6.38 % = 7.02 %
SALES
1175.0 11,435.0 21,290.0
x 100 x 100 x 100
NET PROFIT MARGIN 639, 741 605,441.0 554,363.0
NET INCOME = 0.18 % = 1.89 % = 3.84 %
X 100
REVENUE
1. RETURN ON ASSETS
1,175.0 11,435.0 21,290.0
NET INCOME 813,663 789,035 746,654
= 0.144 = 1.45 = 2.85
TOTAL ASSETS
2. RETURN ON EQUITY
1,175.0 11,435.0 21,290.0
NET INCOME 393,506 391,917 399,503

= 0.30 = 2.92 = 5.33
EQUITY
1. DEBT RATIO :
426,474 415,909 358,151
813,663 790,239 746,654
TOTAL LIABILITY
TOTAL ASSET = 0.52 = 0.53 = 0.48
2. DEBT EQUITY
RATIO: 426,474 415,909 358,151
243,232 240,617 189,144
TOTAL LIABILITY = 1.75 = 1.73 = 1.89
SHAREHOLDER’S EQUITY
3. FIXED ASSET
TURNOVER:
3,509 3,882 16,932
(700,433+719322) (650,833+700,433) (607,057+650,833)
NET SALES 2 2 2
AVERAGE FIXED ASSETS
(Beginning + Ending net fixed = 0.005 = 0.006 = 0.03
asset/ 2)
1. OPERATING CASH
FLOW RATIO 63,302 75,093 42,613
276,256 279,198 180,545
= 0.23 = 0.27 = 0.24

OPERATING CASH FLOW
CURRENT LIABILITIES
2. CASH FLOW
COVERAGE RATIO 63,302 75,093 42,613
426,474 415,909 358,151
= 0.15 = 0.18 = 0.12

OPERATING CASH FLOW
TOTAL DEBT
BERJAYA FOOD BERHAD
Company’s External Analysis
PESTEL Analysis
PESTEL analysis (politic, economy, sociocultural, technology, environmental and
legal) describes a framework of macro-environmental factors that is used in the
environmental scanning, one of the components in list of strategic management. It is
known as a part of an external analysis when conducting a strategic analysis or
sometimes doing market research. To be taken into consideration, it gives an overview
of the different macro-environmental factors. PESTEL Analysis known as a strategic
tool for understanding market growth or decline, company position, potential and
direction for operations.
Political factors
Government regulations and legal issues will affect on BFood to gain the profitable
and successful, and this factor will look on how that things can happen. The issues
that must evaluate as the political will affect several things include political stability,
tax guidelines, property and law enforcement, trade regulations, social and
environmental policy, employment laws and safety regulations. As illustration, on
2018, the new Malaysian government decided to replaced GST with SST where GST
standard rate has been revised to 0% beginning 1st of June and implement SST tax on
services at 6%, sale of goods 10% starting from September.
Based on statement above, BFood has to follow the rules and regulation intervened by
the government on the price of products produces. According to BFood industry, the
three-month "tax-free" period will no doubt be a boost to short-term earnings, but it
does not address the structural problems facing the industry. This is because the
industry believes that BFood’s revenue was cut by 1.2% under the previous GST
regime, as the company absorbed the cost instead of passing this on to its customers.
Economic conditions
According to analysts, the KRR chain of restaurants in Malaysia continue to
disappoint, as consumer sentiment remains weak and competition rife in 2017. This
probably because the weak ringgit had also impacted its gross profit margins of
BFood in recent quarters. Meanwhile, the ringgit rate is affecting by the inflation rate
and Malaysia inflation rate is 2.08% during 2016 but boosted to 3.8% in year 2017.
Although the Food and Beverage industry can be considered as basic needs of locals,
there were many other competitors which producing the products with a lower price.
When the BFood meet situation where the company is undergoing inflation, they need
to produce more products relying upon on the demand of people surrounding area
with some promotions to attract potential customers. In addition, most of the raw
materials and machines used BFood were purchased from US and the other supplier’s
country. The research firm reckons that the weakening of the ringgit against the US
dollar is the main reasons the declining of profits in Malaysia.
Sociocultural factors
The social factors are the areas that involve the shared belief and attitudes of the
population involved. The social factors include the cultural aspects and health
consciousness, population growth rate, age distribution, career attitudes, emphasis on
people safety, role of woman and many others.
Before entering a market, BFood analyse the demographic and cultural characteristic
of Malaysia and they found that HALAL product is a must. According to the annual
report of in 2018, BFood ensure that 100% of their food products adhere to the
“Halal” requirements from JAKIM. The suppliers also required to self-declare and
provide an updated certification and the audits and compliance are conducted
regularly to ensure that local regulatory hygiene practices are in place.
Technological factors
The most famous organization under BFood is Starbucks. Therefore, BFood started
with introduced the mobile apps such as Mobile Order & Pay on Starbucks as a
method to enable the customer to order the food via online. Besides help to increase
the efficiency level, this mobile app enables the customer to enjoy their Starbuck
coffee in anytime at everywhere.
Next, to ensure that their employees are able to produce the freshest coffee at a short
time, BFood imports the Mastrena High Performance Espresso Machine. This coffee
maker is the most used in all branches of Starbucks. It’s manufactured by Thermoplan
AG, a Swiss company located in Weggis, Switzerland. The price of this espresso
machine is about $17,625 each. Therefore, the machine can be operating automatic
and was equipped with a computerized menu which makes lattes and cappuccinos
easy and fast to prepare by Starbucks baristas. Nevertheless, to enable fresh soy milk
to be produced daily at each Jollibean outlet, BFood is using the high-pressure soy
milk extracting machine in every Jollibean outlet.
Environmental forces
Starbuck manage the resource efficiently by using the solar panels in US. The solar
energy is environmentally friendly compare to other energy sources and the top
management of Starbucks planned to implement technology to the other country.
In addition, there is a Sustainability Statement in every Annual Report proposed by

BFood. This section is proposed by the Sustainability Working Committee oversees to
plan and implement the sustainability practices in a continuous and systematic
manner. This shows that BFood not only care about the Economic Sustainability,
Environment Sustainability and Social Sustainability, besides they have mature plan
and agenda about how to take care of the environment of local.
In our opinion, the BFood action to sustain the local economic, environmental and
social in Malaysia is a excellent strategy as most of Malaysians cares about the place
that they live in.
Legal and regulatory factors

BFood was incorporated on 21 October 2009 in Malaysia and converted as a public
limited company on 3 December 2009. on 8 March 2011, BFood was listed on The
Main Market of Bursa Malaysia Securities Berhad. Under Berjaya Listing Scheme,
Berjaya Roaster Sdn Bhd became wholly-owned subsidiary Berjya Food Berhad in
Januar 2011.
Being a responsible organisation, BFood develops its employees’ capabilities and

skills to ensure that they understand “Halal” compliance at work and how it helps
them to answer questions on the “Halal” certification. Product safety is also an
integral part of the Company’s commitment in terms of ensuring that its food and
beverage offerings are safe for consumption and adhere to Halal requirements by
JAKIM.
Next, BFood ensures its customers’ privacy and data are protected through the
relevant guidelines and practices under its Data Protection Policy. In compliance with
the Personal Data Protection Act 2010, a terms of use agreement have been published
on the Starbucks and KRR websites which states clearly the methods and purpose of
collecting customers’ personal information. In our opinion, customers privacy is an
important aspect especially in nowadays most of the customers are buying or paying
the products through online transaction or e-wallet.
Porter’s Five Forces Analysis

Berjaya Food Berhad is in the food business and it operates a number of franchises
namely Starbucks, Kenny Rogers Roasters (KRR) and Jollibean. Therefore, we must
take into account all these franchises when we analyse the company using Porter’s
Five Forces Model.
Bargaining Power of Supplier

Raw materials and other ingredients used in KRR are supplied by different suppliers.
KRR order its marinated chicken from Dinding Poultry Sdn. Bhd, muffin mixture
from English Hotbread Sdn Bhd, Vegetables from Ven Trading, the Gravy mixture
from PAP marketing and others. In fact, the bargaining power of suppliers is differing
from one to another. The suppliers of raw chicken and vegetables will have higher
bargaining power because they are well established company with their own
trademark in providing the required number of items that is ordered by KRR.
Suppliers to Starbucks have lower bargaining power because Starbucks is too big to
ignore. Securing a contract with the coffee shop chain is very lucrative, and Starbucks
is so established that payment is guaranteed. As we know, there are many other
companies to whom those suppliers could sell their wares but there are few that order
in that huge quantity and guarantee their payment. As time goes on, Starbucks’
relationships with those suppliers become more solidified and stable, many suppliers
may have become content with the business Starbucks provided them and stopped
courting new clients. In this case, the bargaining power of the suppliers is minimal. In
addition, many of Starbucks product are made with common ingredients which other
suppliers could also provide the same, so the possibility of a very unique supplier is
minimal.
Threat of New Entrants into the Market
KRR is a restaurant which foothold in Malaysia by franchising and nowadays there
are a lot of similar restaurants enters Malaysia in the same method. Malaysia
Government welcome franchises by providing financial support, less regulations and
give guidance to encourage more of them enter the market in Malaysia. Since food
industry is an easy access industry and it has a potential market growth especially in
Malaysia, many new entrants would like to penetrate Malaysia’s market. KRR faces a
serious threat from new entrants because they are sell similar food but maybe more
innovative and bringing up products at lower price compare to KRR.
For Starbucks, the threat of new entrants is moderate. The convenience beverages
industry is heavily saturated, and so is the market. Opening a new coffee shop means
competing with Coffee Bean & Tea Leaf, Chattime, Tealive and many other locally
owned coffee shops. It seems like coffee is served everywhere, and that makes it
difficult to form a unique product offering. Besides, the switching cost of a customer
changing preferred coffee shops is minimal but changing their habits and associated
brands is more complex and difficult. In a saturated market, it becomes difficult for a
new entrant to make an impact.
There are also economies of scale that would make competition difficult for a
newcomer. Starbucks has over 100 stores in Malaysia. It has more negotiating power
than a new brand, that means offer lower prices, get higher profit margins or both. For
example, a locally owned coffee shop may have to charge RM10 for a cup of latte to
cover the cost of high-quality coffee beans, milk, equipment and overhead, but
Starbucks may be able to exploit economies of scale and buy the supplies in bulk to
bring the cost down to RM5. The new entering coffee shop may be able to compete,
while Starbucks can generate an exceptional profit.
Rivalry among Competing Sellers

KRR has many competitors which provide similar menu in the same industry, for
example, Chicken Rice Shop, Nando’s and KFC. Even though chicken is one of the
Malaysians’ favourite food but there are variety of choices of chicken meals that is
cheaper than KRR. Some of the restaurants do not charge surcharges like service tax
as KRR does. Besides, there is no switching cost involved for the customers to choose
other restaurants. They can choose any food according to their preference.
Furthermore, KRR does not show its uniqueness from its competitors, such as
Nando’s is famous for its peri-peri sauce and KFC serve fast and everyone is familiar
with it.
Starbucks is practicing the differentiation strategy. Starbucks is well known for its
quality of coffee, it has its high-quality sources of coffee bean and plantation. These
made Starbucks different from the local coffee shops that do not serve quality but
price as their main advantage. The company is differentiating the nature of the
business from local coffee shops such as Old Town White Coffee and Coffee Bean &
Tea Leaf. Starbucks had positioned its brand of a quality-oriented product and
services. Quality product refers to its finest coffee beverages and service refers to its
environment, professionalism of its barista in brewing the finest coffee and the way its
treat the customer.
Starbucks had positioned the brand into the mindset of its consumer as “Third Place”
environment. The “Third Place” environment refers as the place other than workplace
and home that an individual can visit to relax, gather or socialize with friends and
family. Therefore, Starbucks store is often decorated and filled with warm and
comfortable climate such as nice sofa, Wi-Fi services, music and books offered to
consumer.
Due to the brand positioning, Starbucks has a very loyal customer base and
maintaining its competitive advantage over its rivalry.
Threat of Substitutes
Starbucks Company experiences a strong strength or threat of replacement. This force

is concerned with the impact of alternative goods or services on the business and its
external environment under the Five Forces analysis model. The following external
factors contribute to the strong threat of Starbucks replacement which are high
substitute availability (strong force), low switching costs (strong force) and high
affordability of substitute products (strong force). This part of the Five Forces
analyses shows that alternatives have a strong potential to have a negative effect on
the business in Starbucks Coffee. The high availability of replacement products
facilitates the purchase of these replacements by consumers rather than Starbucks.
Other products are available, such as ready-to-drink drinks, immediate-drinking
powders, purées, food and other drinks, from several shops such as fast foods and fine
dining restaurants, sales machines, supermarkets and food stores.
The threat of substitute also describes the company's threat. Unless the goods
and services meet the standard, consumers can use alternatives that do not require any
extra effort and make no significant difference. For instance, Pepsi is used to replace
tap water with Aquafina and Coca Cola alternative. The potential factors that made
customer shift to substitute in the perception of KRR are price performance of
substitute, switching costs of buyer, products substitute available in the market,
reduction of quality and close substitution are available.
Bargaining power of buyers
Starbucks Coffee Company has a strong strength or negotiating power between

purchasers or clients. This force builds on the influence of individual clients and
customer groups on the international business environment in Porter's Five Forces
analysis model. The following outside factors contribute to the strong negotiating
power of customers in the case of Starbucks Corporation which are low switching
costs (strong force), high substitute availability (strong force) and small size of
individual buyers (weak force). The negotiating power of the buyer is among the main
forces affecting the company in this component of the Five Forces analysis model.
Due to the low changeover costs, custodians can easily move to other brands from
Starbucks. The high availability of replacement products also allows customers to be
kept away from Starbucks if they want, as many substitutes are available like
instantaneous drinks from sales machines.
The fact that individual purchases are small compared to total revenues of the firm is
overlooked by these strong factors. The small size of each purchase equates to
individual purchasers ' weak influence on the company. The two other external
factors, despite this, are strengthening customers ' negotiating power. This component
from the Five Forces analysis therefore demonstrates that the negotiating power of
customers is a strategic priority. The buyer's negotiating power addresses the
customers ' ability to lower prices. The importance of a customer and the level of
costs when a customer moves from one product to another are mainly important. If
too many alternatives are available, buyer power is high. And if there are fewer
alternatives and switches, the buyer power is low. KRR have their factors that will
influence the buying power of customer which are bargaining leverage, switching cost
of buyer, buyer price sensitivity and competitive advantage of company’s product.
Group Mapping
Based on the graph (x-axis reflects variety of products and y-axis reflects price), we
can clearly state that Berjaya Food Sdn. Bhd company has produce variety of products
and their products are mostly with high price or we can say it’s expensive. However,
Old Town also have many types of products but not as Berjaya Sdn. Bhd but the
prices of their products are not so expensive and its quite reasonable for the
customers. The Chicken Rice Shop has high level in terms of the type of products
compare with Old Town. Although, this company is similar with Berjaya Food Sdn.
Bhd in products type, the price level is differ for both the companies where The
Chicken Rice Shop products are very much cheaper compare to Berjaya and Old
Town.
SWOT Analysis
Great showcasing plan dependably begins with SWOT analysis. SWOT is a mix of
abbreviations for the words Strength, Weakness, Opportunity and Threat. This SWOT
investigation is frequently utilized in showcasing efforts and other key arranging, for
example, advertising to advance the item in the market to achieve the customer or
purchaser's learning. Furthermore, SWOT can likewise be utilized to review the
general adequacy of a business or association whether it has accomplished focused on
benefit or misfortune. Clients of a SWOT examination frequently request that and
answer questions create significant data for every class to make the apparatus valuable
and recognize their upper hand. SWOT has been portrayed as the attempted and-
genuine apparatus of vital investigation (Dess and Gregory, 2018).
Strength Weakness
 Diverse Revenue models  Lack of strengths or capability

 High profit margins resources
 Strong brand recognition over 
High turnover of lower-level
the world workers

 Social Sustainability Supplier’s level of loyalty is low

 New product implementation Low product affordability and
meet the customer preference  standard

The company’s business model is
being easily imitated
Opportunity Threat
 Online Marketing And Social  Local government policy

Platforms  The boots of market competitor
 Expanding Into New Market with strategies
Segment  Shortage of expert labour
 More Demand On Premium  Limited raw material supplier
Coffee  The change of the political
 Understand Market for Tourist
 High growth potential for single- environment
serve coffee market
STRENGTH
Strengths are those features of an organization where can perform better than its
competitors in the industry. Strengths are internal and positive factors that help to take
advantage of opportunities in the external environment. Strengths are internal and
controllable factors, such as the firm's capabilities and resources that it can use to
design, develop, and sustain competitive advantage in the marketplace.
I. BFood has diverse revenue models
Berjaya Food has ventured into various businesses but not only focusing in one sector.
As we know, BFood operates a number of franchises which are Starbucks, Kenny
Rogers Roasters and Jollibean. This has enabled the company to develop a diversified
revenue stream and not only relying on one of the business.
II. High profit margin
The other strength of BFood is it able to maintain a high profit margin even though it
faced downward pressure on profitability, BFood took cost-cutting measures by
shutting down unprofitable KRR outlets. For example, there were 23 KRR outlets in
Indonesia in the year 2016. BFood is also continuing to close the non-performing
businesses like KRR and Jollibean. BFood recognized that Starbucks is their main
sorce of revenue. Therefore, BJFood is increasing the number of Starbucks outlets
until today. Hence, BFood able to maintain a good profit margin.
III. Strong brand recognition over the world
Berjaya Food Berhad has strong brand recognition in the Food and Beverages
industry. As we can see, BFood build its good reputation and wide geographic
presence in the world. It means many countries have BFood franchises and the people
from many countries know this company. With the popular name of the company, it
enabled the company to charge a premium compare to its competitors in Restaurants
industry. Furthermore, BFood can save cost when doing advertisement for its
franchise. For example, Starbucks, one international advertisement can be used for so
many outlets in the world.
IV. Social Sustainability
Furthermore, social sustainability defines as dealing with the public and customers
according to the good market practices and commodity engagement though the
initiatives that involve in the company monetary and non-monetary resource. Berjaya
Food SDN BHD do many social sustainability. Berjaya Food has formed a
Sustainability Working Group represent from the various business units and team.
Berjaya Food and the subsidiary Berjaya Starbuck recognized the sustainability
practice at the Asia Corporate Excellence & Sustainability Awards (ACES) has
increase the revenue, brand reach and the resources maximization. [ CITATION
Sun17 \l 17417 ]. Berjaya Starbuck is a well-known in young generation and
customers request to open the new outlet that close to them as the customers are
accept with the Starbuck brand and the food and beverages industry such as Berjaya
Roaster and Jollibean. Berjaya Food SDN BHD has strong brand recognition in the
premium segment represent the great opportunity to increase the profitability.
[CITATION Ber18 \l 17417 ]
V. New Product Implementation Meet The Customer Preference
Starbuck, Jollibean and Berjaya Roaster always develop the new product
implementation to meet the customer preference as the customer preferences are fast
changing. The variety of choice such as main course dishes, appetizers, deserts and
the beverages in the Kenny Rogers Roasters’ menu. Nowadays, customer easy to
access to information, the rising of the lifestyle and the fast adoption of technological
products make the customer want to experience and try the new product in the food
industry. Berjaya Food Berhad continue to increase the CPG business by develop new
product which can give the new experience for the customers beyond the stores and
potentially reach out more outlets. So, Berjaya Food has the opportunity to wider and
develops the new product. This initiative helps the firm to increase the profit and at
the same time increase the efficiency of the cost and increase the brand recognition.
WEAKNESSES
Weaknesses also constitute an internal factor for a company to receive revenue and
feedback from users and buyers including its customer complaint area, low sales
figures and a low level of morality. Financial losses can also be a fault in any
company. Berjaya Food weaknesses can either be lack of strengths or capability
resources that are required, but the organization does not currently have them.
Managers must be sure if the weakness is due to lack of strategic planning or strategic
decision.
Lack of Strengths or Capability Resources
Weaknesses also constitute an internal factor for a company to receive revenue

and feedback from users and buyers including its customer complaint area, low sales
figures and a low level of morality. Financial losses can also be a fault in any
company. Berjaya Food weaknesses can either be lack of strengths or capability
resources that are required, but the organization does not currently have them.
Managers must be sure if the weakness is due to lack of strategic planning or strategic
decision.
High Turnover of Lower - Level Workers
The Berjaya Food also cares for the high turnover of lower - level workers. It
can result in higher pay to keep the talent in the company. Berjaya Food's decreasing
market share with increased revenues – the restaurant industry grows faster than the
company. Berjaya Food must analyse the various trends in the Services sector and
identify what it needs to do in order to promote future growth in such a scenario.
Supplier loyalty is also low due to Berjaya Food's history, new developments have
been developed to reduce the supply chain prices. Low investment in customer-
oriented services from Berjaya Food is also one of the weaknesses. In the near future,
that can lead to competitive advantages. In particular in customer service-oriented
applications Berjaya Food has to increase investment in research and development.
Supplier’s level of loyalty is low
Next, the supplier loyalty is also low due to Berjaya Food’s history, new
developments have been developed to reduce their supply chain prices. In addition,
low investment in customer-oriented services from Berjaya Food is also one of the
weaknesses. In the near future, that can lead to competitive advantages. In particular
in customer service-oriented applications, Berjaya Food has to increase in research
and development.
Low product affordability and standard
In essence, weakness are internal factors that reduce or limit business capacity.
Berjaya Food has high price points that maximize profit margins but decrease its
products ' affordability. This internal strategic factor is a weakness because it limits
the market share of the company, particularly in areas where disposable incomes are
relatively low. This SWOT analysis also identifies that the products of Berjaya Food
are generalized standards that are a weakness that limits the flexibility of the products
of the business. The generalized standards of the Starbuck for its crafted beverages,
for example, reduce the cultural alignment of these products with local target markets
and related consumer preferences.
The company’s business model is being easily imitated
Berjaya Food's business model can easily be imitated by the industry

competitors. Berjaya Food needs to create a platform model which integrates
suppliers, suppliers and end users in order to overcome these challenges. There are
fast - disappearing niche markets and local monopolies like Berjaya Food. Berjaya
Food is increasingly less efficient in its customer network. The products of Berjaya
Food Company are limited. Beverages that are not the same as but similar to the
products of the company could be developed by small local competitors. Even the
design and atmosphere of the cafés of the company is imitable. Competitors are
empowered by this business environment condition. In this part of Starbucks Coffee
Company's SWOT analysis, the internal factors show that the business needs to
develop strengths to reduce the adverse effects of imitation and the influence of high
price points on the market share of the company in the global industry.
OPPORTUNITY
Opportunity defined as an external factor that are favourable and organization wish to
develop for achieving organization’s objectives. There are several opportunities for
BFood gain for future use and gain the maximum profits. Analysing business
competition will be able to determine the same kind of business and look for
opportunities to produce a similar service or product. (Bush, 2016)
I. Online Marketing and Social Platforms
Berjaya Food Berhad has the positive on online marketing and social platforms. In
this era of technological revolution, all industries must adapt to the use of technology
in their businesses. Online space enables Berjaya Food to provide new offerings to the
customers. Starbuck have introduced the Starbuck App for the customer to online
order and pay by using smartphone. The developed of the Starbuck App bring
convenient to the customer. Customer can easily to use by order-and-pay system, time
saving for the customers.[CITATION Kat \l 17417 ] Berjaya Roaster stopped using
traditional advertising such as TV and now the firm focused on the online marketing
and radio to engage with the generations. Berjaya Roaster (M) SDN BHD promotes
the latest meal and offering the package by using Facebook. Finally, the advantages
brought by the online marketing and social platforms are not only the benefits that
Berjaya Food should achieve, but also to gain more competitive advantages.
II. Expanding into New Market Segment
Berjaya Food Berhad started to introduce the ready-to-drink Starbuck product in

Malaysia. Starbuck also expand the fresh juice product to the customers. Then
Berjaya Food began to introduce the new favored of soy milk drink which is Fast-
Moving Consumer Goods (FMCG) in the Joybean brand. The new soy milk currently
distributed in 7-Eleven stores and other grocery outlets will be the opportunity for the
Berjaya Food to increase the profit in the future. They believe that with the FMCG
product, the Jollibean could be stronger the brand reputation. The introduction of
FMCG product into Berjaya Food Berhad will become the product portfolio and this
also the new stage of the Bfood.
Moreover, Bfood also expand the Jollibean which is introduction to franchising. The
Jollibean participated in Singapore with the franchising and licensing trade show. This
is the opportunity for Bfood because Bfood want to promote the healthy food and
increase the interest from several numbers of companies from different country such
as Singapore, Philippines, India and Maldives. The introduction of the Jollibean for
franchising will increase the 4 until 5 per cent of the royalty fee. In the other word,
Jollibean can gain 4-5% on the franchisee’s revenue. So, the opportunity for Jollibean
in the franchising will increase the profitability. [ CITATION CIM19 \l 17417 ]
I. More Demand on Premium Coffee
Berjaya Starbuck well-known as largest premium coffee chain in Malaysia. According

to the Edge Financial Daily, Berjaya Food realize that Malaysia citizen become more
affluent and changing the tastes from traditional kopitiam into the premium coffee. So
the premium coffee and Western-style cafes are growing fast across cities. Berjaya
Starbuck especially has the higher economic growth and gain larger profit. The more
demand on premium coffee shows that the opportunity growth for the Starbuck.
[ CITATION Jef14 \l 2052 ]
II. Understand Market for Tourist
According to Quays, the increasing number of tourists has stronger the sales growth
for the Starbuck about 6% until 8%. Berjaya Food has RM100 million capital
expenditure on reserve concept store for Berjaya Starbuck. The differentiation of the
Starbuck such as outlets at transportation hubs and drive-thought stations give the
convenient for the customers. The reserve concept increases the consumer sentiment.
Moreover, the strategic of the locations that place in the tourist destination such as
airport has the opportunity for the Berjaya Food focus for the Starbuck on expansions.
The tourist numbers will increase as well for Starbuck. Kenny Rogers Roasters (KRR)
also built the express stores at the rest and relaxation (R & R) stations easier for the
tourist enjoy their meal while travel along highways. The new products develop by
KRR meet the customer’s preference. Jollibean in Singapore improve the brand by
implementing new initiatives. [ CITATION Tan19 \l 2052 ]
III. High growth potential for single-serve coffee market

According to the Fior Markets, the Global Coffee Pod and Capsule Market expect the
growth rate in 2018 to 2025 from 15.23 billion dollars to 29.2 billion dollars. This is
the largest share in the coffee and capsule market. The increasing of the market share
will lead the Starbuck which have the greater opportunities on developing the new
product and increase the venture capital investment. [ CITATION Mar191 \l 2052 ]
Moreover, Berjaya Starbuck forms a new market share through partnership with
Nestle. Partnership with Nestle to distribute the market share such as the coffee
chain’s consumer and food service product can positive the earning per share and
increase the target. Starbuck can increase the sales of $2 billion as Nestle pay $7.15
billion for Starbuck for the business. The high consumption of coffee among people
enabled Starbuck to launch new coffee pod that will growth of market.
THREAT
Threat is another external factor that every business should consider when analysis its
market potential. Threats can include areas where competitors are growing, and your
business is struggling to stay on the market. Analysing the threats can help a business
or organization look at the big picture and foresee future issues that may arise
(Michele, 2018).
I. Local government policy
Malaysia Government welcome franchises by providing financial support, less

regulations and give guidance to encourage more of them enter the market in
Malaysia. Since food and beverage industry is an easy access industry and it has a
potential market growth, many locals and outsiders start choosing Malaysia market to
penetrate. For example, after the competitor such as TCRS found that Malaysia has a
suitable market for them to expand or build up their business, they offer a lower price
for their product, chicken rice in order to attract the potential customers. Therefore,
BFood meets deficit when they try to offer a promotion price too often.
II. The boots of market competitor with strategies
The boots of market competitor with strategies to tackle the potential customers.
Besides the competition on price tag, and promotions many competitors also start to
providing comfortable environment, WiFi facilities and decorated their restaurant with
amazing themes. The strategies that implemented by competitor had increasing the
bargaining power of the customer. Therefore, when the switching cost from the
BFood product to other competitor such as TCSR, and the old town decrease, the
income of BFood will be affected. For example, starting June 2016, every 18th of the
month is Chicken Rice Day and every customer can get one (1) 1/4 Chicken at ONLY
RM1.80 when you bring a friend to any of The Chicken Rice Shop’s outlets.
III. Shortage of expert labour
Next, the shortage of expert labour in F&B retail sector is a big issue for food industry
especially BFood to expand their business. According to the BFood chief executive
officer Datuk Francis Lee Kok Chuan the shortage of labour in the retail sector,
particularly the F&B business, is the main issue. According to him, “Nowadays, it is
not easy to get people. As an F&B player, we have to hire a lot of people. People are
now looking for an easy job, and they think working in the F&B is tiring.” Therefore,
the turnover rate in the BFood industry also considered high and they need to pay out
more money to remain the expert and provide training to new staff.
IV. Limited raw material supplier
Next, limited raw material supplier also poses a threat to production and consequently
affect BFood profits. To ensure that Starbucks produce coffee that different from the
local coffee shops, the coffee beans used were high quality sources of coffee bean
from U.S plantation. In addition, every coffee machine in Starbucks were
manufactured by Thermoplan AG, a Swiss company located in Weggis, Switzerland.
Therefore, BFood need to spend high cost in purchasing the raw material and the
espresso machine that cost about $17,625 each.
V. Change of the political environment
Lastly, the change of the political environment in the world especially during the trade
war starting January 2018 between US and China. Since the US and China are large
economies, their trade disputes not only affect each other, but also the global
economy. The country such as Malaysia which engage in intermediary trading
between US and China would face the negative impact of the dispute (Datuk Dr Mad
Nasir, 2018). In our opinion, the trade war might must be responsible for the
weakening of ringgit Malaysia and the fluctuating price of raw materials and
machinery purchase by BFood. This statement is supported by Richards (2018),
where in overall instability in the middle east can impact Berjaya Food business both
in local market and in international market.
Strategic Propose
Berjaya Food Berhad used TOWS matrix in order to analyses their strategy
formulation and strategy implementation. TOWS matrix is involving systematic and
evaluation on the internal and external factor that can identify the current competitive
position and growth of the BFood.
Therefore, TOWS matrix is chosen because it can help to determine the suitable
strategic alternative that BFood could proceed. Below are few strategies recommend
by our group in taking the strategic planning by using TOWS matrix which are
strengths-opportunities strategy (SO strategy), weaknesses-opportunities (WO
strategy), strengths-threat (ST strategy) and weaknesses threats (WT strategy).
[ CITATION Pat18 \l 2052 ]
Among all the strategies that proposed to Berjaya Food after SWOT analysis and
TOWS matrix, the three best strategies that most appropriate to strengthen the Berjaya
Food competitive position, future strategic and financial performance.
TOWS Analysis
TOWS MATRIX STRENGTHS WEAKNESS

1. Lack of strengths or
1. Diverse Revenue
capability resources
models
2. High turnover of lower-
2. High profit margins
level workers
3. Strong brand
3. Supplier’s level of
recognition over the
loyalty is low
world
4. Low product
4. Social Sustainability
affordability and
5. New product standard
implementation meets 5. The company’s business
the customer model is being easily
preference imitated
OPPORTUNITY SO WO
1. Online Marketing 1. New product 1. Social Platforms to
and Social implementation meet the strengthen the capability
Platforms customer demand on resources (W1, O1)
2. Expanding Product premium coffee (S5, O3) 2. Technology advance to
Mix and Offerings 2. Diverse revenue models overcome the high turnover
3. More Demand on with producing new of worker and increase the
Premium Coffee product offerings (S1, O2) supplier loyalty (W2, W3,
4. Understand 3. Utilize the strong brand O1)
Market for Tourist recognition over the world 3. Using online marketing to
5. High growth to build a stronger online strengthen the product
potential for single- marketing and social affordability (O1, W4)
serve coffee market platforms (S3, O1)
THREAT ST WT
1. Local government 1. Diverse revenue models to 1. Build partnership with local
policy overcome the competitors government to improve the
2. The boots of in current market (S1, T2) entity’s resources. (W1, T1)
market competitor 2. Excellent social 2. Set and review the right
with strategies responsibility to attract compensation/ benefits
3. Shortage of expert expert locals’ labor (S4, packages at least annually
labor T3) by giving attention to the
4. Limited raw 3. Implement new product industry pay packages
material supplier that need different raw among competitors (W2,
5. The change of the materials (S5, T4) T2, T3)
political 3. Fair dealings with suppliers
environment and customers (W3, W4,
T4)
4. Company’s products and
services, processes and
operations must be
relatively safe (W5, T5)
Strength-Opportunities (SO strategy)
SO strategies is an approach on how the company using the strength to take the
advantage of the opportunities or use internal strengths to maximise external
opportunities. SO strategies also known as “Maxi-Maxi Strategy”
1. New product implementation meet the customer demand on premium

coffee (S5, O3)
Starbuck, Jollibean and Kenny Rogers Roaster always develop the new product
implementation to meet the customer preference as the customer preferences are fast
changing. The variety of choice such as main course dishes, appetizers, deserts and
the beverages in the Kenny Rogers Roasters’ menu. According to the Edge Financial
Daily, Berjaya Food realized that Malaysia citizen become more affluent and
changing the tastes from traditional kopitiam into the premium coffee.
Therefore, I think Berjaya Food could improve their menus, not only provide the
choices of premium coffee in Starbucks but also could make premium coffee
available in Kenny Rogers Roaster and Jollibean. Berjaya Food might not provide
much choices of premium coffee in KRR restaurants and Jollibean, in order to ensure
the uniqueness of Starbucks. However, they could provide one or two choices for the
coffee lovers who dine-in KRR restaurants and Jollibean food stall.
2. Diverse revenue models with producing new product offerings (S1,O2)
Berjaya Food has diverse businesses and not only focusing in one sector. BFood
operates franchises including Starbucks, Kenny Rogers Roasters and Jollibean. All of
these franchises only serve food and beverages for dine-in and take-away. However,
Berjaya Food Berhad has successfully introduce the ready-to-drink Jollibean product
in Malaysia, Jollibean soy milk currently distributed in 7-Eleven stores and other
grocery outlets.
Berjaya Food can also introduce canned Starbucks coffee to the market. They could
innovate new flavor coffee which is stable and suitable to be canned, so that the taste
of coffee remains good even though they are not made and serve instantly. In addition,
Kenny Roger Roasters also can introduce freeze marinated chicken which can be
easily grilled or microwaved. This freeze marinated chicken can be sold at
hypermarket or 7-Eleven stores so the consumers can purchase the chicken and try to
make grill chicken at home.
3. Utilize the strong brand recognition over the world to build a stronger
online marketing and social platforms
Berjaya Food Berhad has strong brand recognition in the Food and Beverages
industry because it builds its good reputation and wide geographic presence in the
world. This mean Berjaya Food had established so many franchises in many countries
and the people from different countries also know this company.
Starbuck have introduced the Starbuck App for the customer to online order and pay
by using smartphone. The developed of the Starbuck App bring convenient to the
customer. Customer can easily to use by order-and-pay system, and save time during
making orders. Kenny Rogers Roasters promotes the latest meal and offering the
package by using Facebook and do online marketing. However, Kenny Rogers
Roasters and Jollibean are still not using App like Starbucks does. Berjaya Food
should develop App for KRR and Jollibean customers as well.
Berjaya Food should make the App available in different country, for example, a
Malaysian customer can download Starbuck App and he can use the App in
everywhere all over the world. The points can be collected, and the promotion can be
redeemed even when he is not in Malaysia.
In addition, Berjaya Food should do the same to Kenny Rogers Roasters and
Jollibean, no matter the customer is dine-in in Philippines franchise or Singapore
franchise, you still able to use the same App and it should not require customers to
install another App. This strategy can make the promotion and advertisement more
standardized and can attract more customers to install their App because it is user-
friendly.
Weaknesses-Opportunities (WO strategy)
WO strategy is an approach on how the opportunities can overcome the weaknesses

that the company experiencing. WO strategy also known as “Mini-Maxi Strategy”
which is improve the weaknesses of firm solve by the external opportunities such as
reduce the weaknesses and maximize the opportunities.
1. 1. Social Platforms to strengthen the capability resources (W1, O1)
The WO strategy that used to minimize the weaknesses and avoids the threats of
Berjaya Food is doing online marketing and social platforms. Firstly, the weaknesses
of Berjaya Food are lack of receive feedback such as complaint area, low sales figures
and low level of morality from the customer. So, Berjaya Food must use the
technology or applications to provide new offering to the customers and on the other
hand, the application enables the customers to rate and give feedback for the services
and the product from Berjaya Food.
2. Technology advance to overcome the high turnover of worker and

increase the supplier loyalty (W2, W3, O1)
The new technology “Mobile Pour” is introduced by Starbuck allows customer
preorder coffee and pays their drink on smartphone. This technology is easier for the
customer as they can immediately to the order pickup area. The order-and-pay system
can build the customer community build the honesty in communications. The review
and rating on the Starbuck Apps increase the trust of supplier. The apps should allow
the customer visibility into inventory. So, the supplier can track the information of
Starbuck. Hence, this will increase the supplier loyalty.
3. Using online marketing to strengthen the product affordability (O1, W4)
Internet and online marketing are an extremely useful marketing channel to reach
their target market. Nowadays, people are surrounding with internet as daily and
routine part of their lives. Therefore, this is the most approach way to market their
product quality and brand to customer such as Facebook, Instagram and Youtube.
Social media marketing is powerful tool to foster relationship with Berjaya Food
customer.
With the online marketing, the market share of the Berjaya Food increase and expand
the new market segment to the areas where high disposable incomes. Moreover, the
introducing of the ready-to-drink Berjaya Starbuck and Fast-Moving Consumer
Goods (FMCG) in Berjaya Jollibean can meet the needs to the area that people in
lower income through online advertisement.
Strength-Threat Strategy (ST)
ST strategy is an approach on how strengths is using to minimize threats that an

organization faced. ST strategy also known as "Maxi-Mini" Strategy which the
internal strength of an organization is practised to overcome or reduce the external
threat that faced by the organization. Below are three ST strategy that suitable for
BFood:
1. Diverse revenue models to overcome the competitors in current market

(S1, T2)
Nowadays, besides the competition on price tag, and promotions, many competitors
also start to provide comfortable environment, WiFi facilities and decorated their
restaurant with amazing themes in order to attract customers. All of the restaurant and
café work so hard which raise the competition of BFood industry. Therefore, to solve
this threat, BFood had done very well by ventured into various businesses but not
only focusing in one sector. As we know, BFood operates a number of franchises
which are Starbucks, Kenny Rogers Roasters and Jollibean.
This strategy enabled the company to develop a diversified revenue stream and not
only relying on one of the business. Moreover, Berjaya Industry also focused on other
industry such as land, and media industry and 7-Eleven Malaysia Holdings Berhad,
Bermaz Auto Berhad, Berjaya Sports Toto Berhad and REDtone International Berhad
are the business that Berjaya Cooperation Berhad invested.
2. Excellent social responsibility to attract expert locals’ labor (S4, T3)
Next, BFood found that they meet difficulty to hire local expert workers. The turnover
rate in the F&B industry was considered high and sometimes BFood need to pay out
more money to remain the expert and provide training to new staff. Besides providing
a higher salary to remain the expert and to solve this threat, BFood must increase the
employees’ benefit and involve in Cooperate Social Responsibility (CSR). CSR
actually can help BFood to increase their image and attract more expert that interested
to apply the position.
Therefore, starting 2015, Berjaya Food has formed a Sustainability Working Group
represent from the various business units and team. BFood proposed their plan in
every annual report followed the Berjaya Starbuck recognized the sustainability
practice at the Asia Corporate Excellence & Sustainability Awards (ACES) has
increase the revenue, brand reach and the resources maximization. [ CITATION
Sun17 \l 17417 ]
3. Implement new product that need different raw materials (S5, T4)
The main threat faced by BFood industry is limited raw material supplier. This
problem effects the BFood production and consequently affect BFood profits. As
illustration, the main income of BFood is Starbucks but the raw material and
machinery of the Starbucks is limited as the coffee beans used were high quality
sources of coffee bean from U.S plantation and every coffee machine in Starbucks
were manufactured by Thermoplan AG, a Swiss company located in Weggis,
Switzerland.
Therefore, BFood tried to overcome this problem by constantly implement a new

product in the Starbuck, Jollibean and Berjaya Roaster. The example for the products
development action includes the increment in main course dishes, appetizers, deserts
and the beverages in the Kenny Rogers Roasters’ menu. In addition, Starbucks also
introduce new breakfast packages in Malaysia starting January 2016.
Weaknesses-Threat (WT Strategy)
WT strategy is an approach on how the company can minimize the weaknesses and
avoid threats. WT strategy also known as “Mini-Mini Strategy”.
1. Build partnership with local government to improve the entity’s

resources. (W1, T1)
In the absence of strong local institutional capacity and adequate revenue, companies
can face community pressure to assume the responsibilities of government to deliver
social services. Building partnerships with local governments and other stakeholders
to enhance revenue management, social service delivery, and public infrastructure
management capabilities is an excellent way for businesses to respond. Partnerships
between the public and private sectors can deliver substantially better results for all
parties.
Transparent capacity building investment and collaboration and local government

building help build better relationships and long-term business-friendly development
outcomes. If they become an entity that runs under government, Berjaya will be given
full support and guidance. For example, Berjaya Food can create a competitive policy
that is intended to prohibit companies from entering into an agreement with each
other that disrupts, impedes or manipulates the normal market forces, such as price
fixing, market division and supply restriction or other factors. The policy of the
Company requires that all employees adhere strictly to the Competitive Policy and
Anti-Monopoly Laws in all countries where they conduct their business. It is the
responsibility of local and other supervisory leadership to ensure that employees
comply with this policy.
By controlling international business trade, Berjaya Food can also improve its
resources. Company employees engaged in cross-border trade must comply with
specific laws and regulations governing the import / export of goods or services. This
includes adhering to international regulations in all of the Company's geographic
locations.
2. Set and review the right compensation/ benefits packages at least

annually by giving attention to the industry pay packages among competitors
(W2, T2, T3)
The remuneration policy of Berjaya Food Berhad should be designed to

attract, motivate, retain and reward managers and key senior managers who manage
and drive the success of the company. It is in the interest of the Company that this
remuneration policy should provide fair support to managers and key senior
management in carrying out their responsibilities and fiduciary duties in steering the
Group to achieve their long-term goals and enhance the value of shareholders. This
strategy will help the entity beat the strategy of the competitor to increase lower-level
workers ' turnover. They should also have the key principles that through periodic or
appropriate market benchmarking exercises, the remuneration policy must ensure that
total remuneration packages remain competitive with the relevant market and industry.
3. Fair dealings with suppliers and customers (W3, W4, T4)
The success of the company depends on developing and maintaining a productive

relationship based on integrity and ethical behavior with its suppliers and customers.
The Company recognizes that for the success of its business, its suppliers are valued
partners. Using criteria such as total value, including quality, service and price,
suppliers are preferred on an arm length and competitive basis. Terms and conditions
shall be determined with any changes and modifications agreed upon at the beginning
before the contract is awarded to a supplier. The Company's procurement policies
regarding product specification, payment terms, confidentiality and labor practices
must be included in the standard terms and conditions.
Supplier diversity is key to the business strategy of the company as customers and
suppliers in terms of their needs and capabilities are becoming more diverse. In order
to meet the company's purpose, values and principles, diversity embraced throughout
the organization and across different geographies as uniqueness, broad perspectives
and value can be generated from suppliers to employees to corporate officers.
The Company is also committed to buying materials from local suppliers wherever
possible to support local industries. The vendor selection process of the company is
instrumental in ensuring that it delivers the best product and service quality,
integrating sustainability values, preferring local industries and also providing a self-
sustainable basis for adding value, reducing costs and creating a more efficient supply
chain.
4.0 Company’s products and services, processes and operations must be

relatively safe (W5, T5)
The use of computers and electronic devices should be restricted by Berjaya Food.
Employees should not send or receive copyrighted materials, business secrets,
proprietary financial information or similar information and/or material without the
company's permission. Press freedom is also one of the political factors affecting the
imitation of the company's product. When communicating about the products of the
Company, employees shall endeavour to communicate information accurately,
effectively and correctly and/or to promote the products of the Company in an ethical,
fair and balanced manner. Employees of the company should not participate in any
forum in false or misleading advertising or promotion concerning the products of the
company. Furthermore, employees of the company should not provide any
information or make any claims that may not reflect approved company product
communications as this may be considered false or misleading.
STRATEGIC SOLUTIONS
Solution to First Issue: Labour Shortage in Retail Sector

BFood chief executive officer Datuk Francis Lee Kok Chuan said the shortage of
labour in the retail sector, particularly the F&B business, is the main issue. According
to him, “Nowadays, it is not easy to get people. As an F&B player, we have to hire a
lot of people. People are now looking for an easy job, and they think working in the
F&B is tiring.” Therefore, regarding the issue faced by BFood, researcher proposed
several solutions that might able to solve the problem.
Firstly, offering a higher salary to remain the expert in the organization. Since BFood
able to maintain a high profit margin even though it faced downward pressure on
profitability, researcher suggested that BFood should increase the overall income of
an employee based on their contribution for the organization. As illustration,
Starbucks employees were wearing different colour of apron which represent their
level of professionality (Whitaker, 2017). Therefore, instead of giving same base
salary to the employee, the experienced and expert deserve to get higher pay.
Next, BFood must increase the employees’ benefit. Besides the increment on the base
salary, BFood should also provide monetary and non-monetary benefit to their
employees. The example for the monetary benefit is bonus, over-time pay, and
incentive while the researcher suggested that the non-monetary benefit must include
childcare and counselling services. This is because the percentage of female involved
service industry is higher than male where they might hope that they are able take care
of their children during working hours (Institute for Woman Research, 2019). In
addition, the researcher also feel that the counselling service is important for the
employees who work in service industry especially who involved in the frontend.
Starting 2015, Berjaya Food has formed a Sustainability Working Group represent
from the various business units and team and involve in Cooperate Social
Responsibility (CSR). BFood proposed their plan in every annual report followed the
Berjaya Starbuck recognized the sustainability practice at the Asia Corporate
Excellence & Sustainability Awards (ACES) has increase the revenue, brand reach
and the resources maximization. (Sun Media Corporation Sdn. Bhd, 2017). Based on
the researcher understanding, the CSR and Sustainability plans helps BFood to
increase their image and attract more expert that interested to apply the position. This
is because when the locals understand about the contribution of BFood to the society,
many of them interested to apply a position and will be proud to work in BFood.
Solution to Second issues: Low Profitability
According to Hong Leong Investment Bank (HLIB) had reported that short-term
prospects do not look promising for the group. However, the group continues to close
non-profitable Kenny Rogers Roasters Malaysia and Kenny Rogers Roasters
Indonesia outlets, which bodes well for the future. Its profitability has been under
pressure, dragged down by non-performing businesses such as Kenny Rogers
Roasters (KRR) and Jollibean. According to analysts, the KRR chain of restaurants in
Malaysia and Indonesia continue to disappoint, as consumer sentiment remains weak
and competition rife. But its strategy to close loss-making outlets of the famous
restaurant chain will help improve profitability. Therefore, based on this issue faced
by Bfood, researchers suggest that diverse revenue models with producing new
product offerings to overcome this problem.
Firstly, BFood has diverse business and operate several franchises. The Jollibean had
successfully introduces the product ready-to-drink in Malaysia. Now, Jollibean soy
milk also distributed in 7-Eleven stores and other grocery outlets. Therefore, Berjaya
Food should understand the tourist market by diverse revenue models by producing
new product offerings.
Berjaya Food can also introduce canned Starbucks coffee to the market. They could
innovation the new flavour coffee which is stable and suitable to be canned, so that
the taste of coffee remains good even though they are not made and serve instantly. In
addition, Kenny Roger Roasters also can introduce freeze marinated chicken which
can be easily grilled or microwaved. This freeze marinated chicken can be sold at
hypermarket or 7-Eleven stores, so the consumers can purchase the chicken and try to
make grill chicken at home. So, the new product diversity can attract new customers
and expand the new product to new market. This can increase the sales revenue and
increase the profitability.
Solution to Third Issue: Weak ringgit impacted its gross profit margins
The Berjaya Starbucks Coffee Company Sdn Bhd profit carry a high percentage in the
overall income of BFood. BFood expects its Starbucks operations to maintain its
revenue growth momentum and drive the group's financial performance going
forward. However, the raw material and machinery used is purchased from Starbucks
Corporation in US. The research firm reckons that the weakening of the ringgit
against the US dollar is the main reasons the declining of profits in Starbucks.
Therefore, regarding the issue faced by BFood, researcher proposed several solutions
that might able to solve the problem.
Firstly, Bfood can introduction franchising to other countries in order to increase their
profit. As illustration, there were still opportunity for BFood to penetrate other
countries’ market. For instance, the Jollibean recently participated in Singapore with
the franchising and licensing trade show. This is because Bfood want to promote their
healthy concept product to increase the interest from several numbers of companies
from different country such as Singapore, Philippines, India and Maldives.
Next, BFood can have partnerships or alliances with other firms. Based on the
researcher understanding, Berjaya Starbuck strengthens the market share through
partnership with Nestle. The advantage of being partnership with Nestle were to
distribute the market share such as the coffee chain’s consumer and food service
product, this strategy boosts the earning per share of BFood. Overall, the slaes of the
Starbuck increased $2 billion as Nestle pay $7.15 billion to Starbuck for the business.
Last but not least, due to the weakening of Ringgit Malaysia effect the price of the
raw material, researcher suggested that BFood can buy raw material in bundle when
the Ringgit Malaysia increase while when the Ringgit Malaysia decrease against US
dollar, BFood can promote other product which the raw material can easily found in
locals with a promotion price to attract consumer.
Solution to Fourth Issue: Number of Competitors Increased Due to Changes of
Government’s Policy
Berjaya Food can beat the competition by having high brand recognition. Even
though the government has set aside over RM20bil to help small businesses embrace
the Industry 4.0 age, Berjaya Food have competitive advantage because it has strong
brand recognition which create a barrier for its competitors.
Starbucks is practicing the differentiation strategy. Starbucks is well known for its
quality of coffee, it has its high-quality sources of coffee bean and plantation. These
made Starbucks different from the local coffee shops that do not serve quality but
price as their main advantage. Starbucks had positioned its brand of a quality-oriented
product and services. Quality product refers to its finest coffee beverages and service
refers to its environment, professionalism of its barista in brewing the finest coffee
and the way its treat the customer.
Starbucks has a very loyal customer base and maintaining its competitive advantage
over its rivalry. Starbucks very emphasize the importance of human assets. It
addressed its customers as partners of Starbucks. Starbucks had introduced its
consumer a mindset of “Third Place” environment. The “Third Place” environment
refers as the place other than workplace and home that an individual can visit to relax,
gather or socialize with friends and family. Therefore, Starbucks store is often
decorated and filled with warm and comfortable climate such as nice sofa, Wi-Fi
services, music and books offered to customers.
The launch of the National Policy on Industry 4.0 (Industry4WRD) show the
government is assisting the small businesses. To solve this threat, BFood had a very
good strength which is it ventured into various businesses but not only focusing in one
sector. As we know, BFood operates a number of franchises which are Starbucks,
Kenny Rogers Roasters and Jollibean. This strategy enabled the company to develop a
diversified revenue stream and not only relying on one of the business.
BERJAYA FOOD BERHAD
Solution to Fifth Issue: The Weakening of Consumer Purchasing Power
The retail sector is hurting as consumers have become cautious about their spending in view
of the slowing economy, as well as rising costs of living partly due to the weakening ringgit
that became the main issue of weakening of consumer purchasing power. Therefore, BFood
release the new product such as Fast-Moving Consumer Goods (FMCG) in the Joybean brand
and distributed in 7-Eleven stores and other grocery outlets so the costumer enables to buy
the product in a suitable price for the local consumer.
Furthermore, the strong brand recognition such as Berjaya Starbuck has built the good
reputation and the environment convenient for the consumer. The consumers feel that the
prices are suitable for the service and product. Moreover, with the internet of things, the
customer can see the latest promotion meals that offering by Berjaya Food Berhad.
Therefore, regarding the issue faced by Bfood, the solution that might able to solve this
problem is provide the promotion on the application that developed by Starbuck and the
online marketing by BRoaster such as promotes the latest meal and offering the package by
using Facebook.
Conclusion
In Conclusion, we used Financial analysis method, SWOT analysis, PESTEL, Porter 5

forces and TOWS analysis because Berjaya Food Berhad has a long and impressive history of
growth, and while we believe that its growth will be moderate, we assume that it will be able
to maintain high growth for next 10 years. Based on our analysis, the revenue of the entity
has increase 65.09% over the past five years ending 04/30/2018(Fiscal year). The capital
spending of Berjaya had also increase about 42.99%. However, the net income decreases to
18.96%.
The Company recognizes the importance of being a good corporate citizen in the
communities where it operates. Forging a close relationship with the local charitable
organisations and stakeholders, the Company supports various programmes addressing the
different areas of social needs which enable it to create social value for the business and the
community. Among the programmes include providing support for the underprivileged
community, literacy and education, sporting events and environment development. The
Company believes that providing support for literacy and education is a critical element in the
sustainable development society. Over the years, the Company continued to bring about
positive difference in the lives of those in need by extending monetary support and in-kind
contributions through various means for social initiatives at home and abroad. The Company
also encourages its employees to volunteer their time and make charitable contributions to
organisations within their communities as a means to bring about positive impact where it
operates.
The Company is committed to achieving economic, environmental and social

sustainability in all its business operations, whether locally or abroad. By doing so, the
Company strives to promote and create Sustainable Development in its business and
operations and adopts a management system to ensure that such practices are being monitored
and controlled.
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BPMN3023 STRATEGIC MANAGEMENT

BERJAYA FOOD BERHAD

SCHOOL OF BUSINESS MANAGEMENT

UNIVERSITY UTARA MALAYSIA

BPMN 3023 STRATEGIC MANAGEMENT

SECOND SEMESTER SESSION 2018/2019 (A182)

Berjaya Food Berhad (BFood)

Dr. Yusmani Mohd Yusoff

MATRIC. NO. NAME

DATO’ TUNKU SHAZUDDIN BIN TUNKU SALLEHUDDIN

Sydney Lawrance Quays

On 12 January 2017, Sydney appointed as Executive Director and 1 June 2017, he

On 31 October 2012, he was appointed as Managing Director of Berjaya Starbucks and

Non-Independent Non-Executive Directors

Tan Thiam Chai

On 20 May 2010, he was appointed to the Board as a Non-Independent Non-Executive

In early 1991, he joined Berjaya group of companies as a Finance Manager of an operating

Non-Independent Non-Executive Directors

Chryseis Tan Sheik Ling

Datuk Zainun Aishah Binti Ahmad

The List of Top Management Team

SENIOR INDEPENDENT NON- EXECUTIVE DIRECT

CHIEF EXECUTIVE OFFICER & EXECUTIVE DIRECTOR

BERJAYA STARBUCKS COFFEE COMPANY SDN.BHD- The leading specialty coffee

Location & Contact Details

ADDRESS: Registered Office

TEL: (603) 2149 1999 (General)

FAX: (603) 2144 0935

Company Vision, Mission and Objectives

To be the leading Food and Beverage organization with a portfolio of

1) Customers: Not stated

2) Products or services: Food and Beverage

3) Markets: Not stated

4) Technology: Not stated

foundations of personal development, diversity and mutual respect for each

2) To ensure total customer satisfaction.

3) To generate a profitable rate of return for all our shareholders.

1) Customers: Not stated

2) Products or services: Not stated

3) Markets: Not stated

6) Philosophy: To provide a people culture that is performance driven and built on

7) Concern for public images: Environmental Friendly

8) Concern for employees: Not stated

3. Weak ringgit impacted its gross profit margins

4. Number of Competitors Increased Due to Changes of Government’s Policy

5. Weakening of Consumer Purchasing Power

3.1 BERJAYA FOOD SDN.BHD Competitive Advantages

RATIO ANALYSIS YEAR 2018 YEAR 2017 YEAR 2016

OPERATING PROFIT (282,179 - 238,849.0) ( 263,434 - 224,830.0) (246,880 - 207,952.0)

NET INCOME 393,506 391,917 399,503

= 0.23 = 0.27 = 0.24

= 0.15 = 0.18 = 0.12

In addition, there is a Sustainability Statement in every Annual Report proposed by

Legal and regulatory factors

Being a responsible organisation, BFood develops its employees’ capabilities and

Porter’s Five Forces Analysis

Bargaining Power of Supplier

Rivalry among Competing Sellers