Business Proposal for Lee Kum Kee
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BUS 460 Business Strategy – Group Project[pic 1][pic 2]Table of ContentsChapter 1: Introduction 2Chapter 2 Background 3Chapter 3: Problems Identification 4Section 1: EFAS Analysis External factor analysis summary 4Section2: IFAS Analysis Internal factor analysis summary 5Problem 1 : Promotional issuses and suggestion 6Problem 2 : Sales distribution of Lee Kum Kee and suggestion 9Problem 3: Product Design and suggestion 12Section 3: Evaluation of the strategies 16Chapter 4: Conclusion 18Appendix 19References 21Chapter 1: IntroductionThe objective of this project is to examine Lee Kum Kee International Holdings Ltd’s strategic performance through problem identification and we will give suggestions to solve problems for increasing profits and sustainable business development. As regards the research methodology, primary data is collected through observation in the different aspects of Lee Kum Kee and its competitors’ brand; and secondary data are collected and analyzed from journals, reports, textbooks and newspaper. [pic 3][pic 4]In applying the following Strategic Management Model, it is used as framework in environmental scanning of EFAS & IFAS Analysis, investigating problems, researching solutions, implementing strategies into programs and conducting evaluation and control.Chapter 2 BackgroundLee Kum Kee was established in 1888 when its founder Mr. Lee Kum Sheung invented oyster sauce in Nanshui, Zhuhai, Guangdong Province of China. With a history of 128 years, Lee Kum Kee has become a household name as an ethnic Chinese enterprise as well as an international brand and a symbol of quality and trust. As a century-old ethnic enterprise, Lee Kum Kee substantiates its core value of “Considering Others’ Interests” in every aspect of its business operations. Lee Kum Kee has also lived by the principles of “Pragmatism, Integrity and Constant Entrepreneurship”. The Company has two missions, one is “Promoting Chinese Cuisines Worldwide” and the other is “Advocating the Premium Chinese Health Regimen and Nurturing Healthier Lives with Balance, Affluence, and Harmony” (Lee Kum Kee, 2016).Euromonitor data shows that Lee Kum Kee enjoys the best global sales of the Oyster sauce brand from 2007 to 2012. According to a Nielsen survey, Lee Kum Kee in the Hong Kong market share as high as 70%. Maxim Group, cafe, Cathay Pacific is one of our corporate customers (陳詠欣, 2013). Nowadays, Lee Kum Kee distributed over 200 sauces in more than 100 countries.Chapter 3: Problems IdentificationChapter 3 consists of three sections. Section 1 is the EFAS analysis on external environments to identify opportunities and threats of Lee Kum Kee. Section 2 is the IFAS analysis to identify strengths and weaknesses of Lee Kum Kee. Based on the results found in EFAS & IFAS analysis, we can identify the problems and give our suggestions relating to the strategic management of Lee Kum Kee. Section 3 is evaluation of the strategies.
Section 1: EFAS AnalysisExternal factor analysis summaryExternal FactorsWeightRatingWeighted ScoreCommentsOpportunitiesGiant market in China0.240.8Keep growing sales in ChinaGoing up standard of living of people0.140.4People requires higher quality of food including sauceGrowing demand in new market in Malaysia0.0530.15Launched the new Mahsuri sauce to Malaysia Many potential young customers 0.120.2Do not focus on young market Only small market share in many potential new markets in different countries, e.g India, Japan, China0.0530.15Keep creating more sauce Expand business in different new marketsThreatsLower price of other brands0.140.4Excellent quality products with higher price provided by Lee Kum Kee Trend to have fixed customers0.1520.3Old loyal customers may loss as time passes or in the futureStrong competition0.0530.15Many other competitors using cost leadership strategy, e.g. Amoy, Tung Chun、Pearl River BridgeWater pollution affect the quality of raw material0.1540.6Choose unpolluted raw materialSaturated market in Hong Kong0.0520.1Difficult to gain more market share in HKTotal Score13.25The overall score is 3.25 which mean Lee Kum Kee responses to External opportunities and threat is above average.