Case Study Answer ALL questions based on the case below (100 marks)

Remark: Of its nature, the case questions dont lend themselves to model answers. What we are looking for in the answers to these questions is a level of maturity, and the theory and logic that they present to support your discussion. Classification of marks is based largely on how a student shows evidence of critical or evaluative thinking, evidence of synthesis, etc.

*You are required to find additional information on the company to aid the strength of your arguments.

In 1989, Mr Chan Wing On and Mr. Yuen Chi Ming among others founded their first restaurant under the Tai Hing brand in Sai Wan Ho, Hong Kong. Through years of development and integrating traditional and innovative business philosophies, Tai Hing Group Holdings () gradually expanded from a humble siu mei style restaurant to one of the largest multi-brand casual dining restaurant operators in Hong Kong and established a chain of over 200 restaurants across Hong Kong, Mainland China, Macau and Taiwan. By adopting a multi-brand business model when expanding the market, in addition to the flagship Tai Hing brand restaurant, the group has grown their brand portfolio through a mixture of in-house development, acquisitions and licensing including the Taiwanese themed TeaWood, Trusty Congee King, Men Wah Bing Teng, Ph L, Tokyo Tsukiji, Fish & Farmer, Rice Rule , Hot Pot Couple , King Fong Bing Tengand "Asam Chicken Rice". With its core values of People Oriented, Value Every Customer, Focus on Quality, and Create New Chances and its implementation of a stringent 5-S management system aimed to Structuralize, Systemize, Sanitize, Standardize, and Self-discipline, Tai Hing has been the recipient of numerous awards as recognized by professional judges and the general public for its quality products, friendly services, and comfortable dining environment.

To facilitate and streamline food production across its restaurants in Hong Kong, Tai Hing Group owns its own independent production and logistic center that sets a highly standardized production process and allows employees to provide close control over product development and production process to achieve the highest quality in its food products. In 2008, Tai Hing Group established a large food factory in Fo Tan in 2008 that boasts an area of approximately 158,414 square feet and currently supports all of their restaurants in Hong Kong. In 2016, to improve the standardization and effectiveness of the operations in Mainland China, the Group commenced construction of the Mainland China Food Factory, which commenced operation in October 2018 and houses an approximate gross floor area of 253,430 square feet. It mainly produces cured meat, frozen products and canned milk tea. It is estimated that the Mainland China Food Factory is able to support approximately 200 restaurants in Mainland China and the production of certain products for its restaurants in Hong Kong.

The Groups Food Factories enables the centralization of the food ingredients and supplies purchasing, food processing, quality control of raw materials, semi-processed or processed food ingredients, as well as packaging, warehousing and distribution functions. Additionally, as food safety and quality are the Groups highest priorities, the Group applies the food safety and quality management principles embodied in various quality standards issued by the ISO in the Food Factories quality control system, and has quality assurance personnel implementing quality control policies and procedures. For example, the siu mei production unit of Tai Hing Groups Hong Kong Food Factory has obtained ISO 22000 accreditation for food safety and quality management system in 2013. The Groups quality control team oversees quality control at each stage of food processing in accordance with the formulated food processing procedures and HACCP (Hazard Analysis Critical Control Point) standard to ensure food safety.

In local Hong Kong, although customers typically have a high demand for good quality casual dining experiences, Tai Hings Hong Kong business has been challenging since late May of 2019 due to political unrest and the subsequent emergence of Covid-19. Weak market sentiment impacted the quick service restaurant business and casual dining brands, particularly the dinner segment and weekend sales, as well as outlets located in shopping and commercial areas. In the year ended December 31 of 2019, although Tai Hings revenue increased by approximately 4.0% to HK$ 3,252.3 million (2018: HK$ 3,126.1 million), due to increased staff costs, depreciation and amortization, and other increased costs and expenses, the net profit for the year ended 31 December 2019 was only HK$76.9 million (2018: HK$304.9 million).

According to figures published by the Census and Statistics Department, the value of total restaurant receipts in July to September decreased HK$3500 million compared to the same quarter in 2018. Although the fast food restaurant sector still recorded incremental growth, the economic hardships inflicted by the coronavirus pandemic predict tough times ahead for the casual dining industry. Given customers increasing sensitivity to price, the Tai Hing Group will be very cautious on price adjustment.

The Tai Hing Group expects market sentiment may take some time to improve, especially in a highly competitive restaurant industry in Hong Kong. Whilst taking a prudent approach in managing cash flow, controlling costs and improving productivity, they will continue to focus on customer service and dining experience, as well as product quality, which will drive same store sales growth. Hong Kong is the Groups key market, and Tai Hing Group is committed to striving to incorporate innovative methods to support its industrys development by actively exploring opportunities to adopt automated food processing machines in restaurants, creating a safer and healthier working environment, and increasing operational efficiency to ensure consistency in dish portion and quality.

Questions:

1. Identify (with reasons) Tai Hing Groups corporate level strategy and evaluate how this strategy has created value for the company. (30 marks) (Maximum: 500 words)

2. Tai Hing is considering further expansion into international markets such as Singapore and Malaysia as a potential avenue for company growth. First, discuss and explain Tai Hings potential for success in the new international market. Based on your analysis, recommend one international strategy that you think Tai Hing should adopt to maximize their strategic competitiveness. Support your reasoning with well-developed arguments and examples. (30 marks) (Maximum: 500 words)

3. Given the background and position of Tai Hing Group, use your knowledge of different types of strategies to make 3 strategic recommendations for Tai Hing Group Holdings to achieve strategic competitiveness. Support your recommendations with well developed arguments and appropriate examples. (40 marks) (Maximum: 1000 words) *Answer should not repeat the recommendation as given in Question 2.