INDIVIDUAL ASSIGNMENT: THE SUGAR BUN’S FORMULA:

INNOVATION AND RENOVATION

 Executive Summary
SugarBun is a Malaysian giant in fast food and Asian cuisine industry. The study has been
carried out to provide information about the success of the company in local and global markets.
A detailed analysis of the company's success and globalization has been done based on the
findings. The success strategies of the company have been briefly discussed in the study. Global
expansion strategies, as well as methods for market penetration, have been discussed in the study
as well. Potential for new market acquisition has been analysed in thoroughly in the study along
with the issue generated concerning globalisation and product development has been discussed.
A list of suggestions has been recommended in the study for mitigating the generated issues in
the study.
 Table of Contents
1. Introduction ................................................................................................................................. 4

1.1 Background of the company ................................................................................................. 4

2. Findings and Analysis ................................................................................................................. 4

2.1 Success of Sugar Bun in Entertainment and Food Business ................................................. 4

2.2 Sugar Bun expansion (Global) .............................................................................................. 6

2.3 Sugar Bun's New-Market potential (Utilization of cultural aspects) .................................... 7

2.4 Current Issues with SugarBun & Recommendations ............................................................ 8

3. Conclusion .................................................................................................................................. 9

References ..................................................................................................................................... 10
1. Introduction

SugarBun is a food chain based on Malaysia which started their business by selling ice cream
through an ice cream parlour. SugarBun has a various interrelated business associated with it.
The study aims to provide information regarding the success of SugarBun in food and
entertainment industry. The study will also evaluate the expansion of SugarBun in the global
arena. Sugar Bun's capitalisation on finding new markets by utilizing the cultural aspect will be
discussed briefly. Current issues about organisational and operational working principles along
with sales and revenue generation of Sugar Bun will be analysed along with recommendations
for improvement on the current issues.

1.1 Background of the company

SugarBun was established in the year 1979 as an ice cream parlour and then innovated further
into the beverages and food franchise (sugarbun.com, 2018). With just 12 restaurants in the year
1993, SugarBun's original owner handed over the duties to a new shareholder and 4 years later in
1997, the parent company of SugarBun, Borneo Oil was sitting second in the stock exchange list
of Kuala Lumpur (sugarbun.com, 2018). The company originally started selling Asian foods in
2001 and experienced a drastic and rapid increase in sales. In the year 1999, SugarBun was listed
as a member of the Malaysia Franchise Association (as per the case study).

2. Findings and Analysis

2.1 Success of Sugar Bun in Entertainment and Food Business

SugarBun is one of the most popular names in Malaysia and it is famous for outstanding eco fish
meals and other special Asian cuisines. SugarBun is a huge success with high sales and revenue
generated consistently every year. The company which initially started as a fast food outlet is
now standing equivalent with McD (as per case study).

After the introduction of Datuk Joseph Ambrose Lee in 1997, the company has been expanding
globally since then and the company even believes to thrive globally as well. Based on the views
of (Viren, 2015), a company can only thrive with a great leader. SugarBuns introduction to its
new shareholder has provided ample opportunities to grow locally with the help of immense
promotions and attractive offers for the public. The company's success completely depends on
their vision for the betterment of society and also a contribution to product innovation and
customer satisfaction (as per case study).

SugarBun offered a wide range of savoury treats which includes foods based on Asian and
western cuisine along with beverages and pastries. The company also incorporated some of their
special foods which included grilled tilapia and Assam pedals (as per case study). The company
also depended on few technologies which included Friends for Life (FOS) loyalty programs for
their existing customers which they further upgraded into magnetic strip cards for Wincor-
Nixdorf System and CRMS (Customer Relationship Management System). Introduction to these
methods has increased the effectiveness and efficiency for managing a huge amount of member
database which includes loyal customers and fans which furthered enhanced customer
satisfaction and brand awareness (as per case study).

Success for SugarBun also includes their introduction to bonus shopping for loyal customers and
introduction to incentive programs which further rewarded the customers. The introduction to
‘Friends of Sugar Bun’ program for loyal customers included privileges to convert the reward
points from a single party reward into a multiple party reward (as per case study).

SugarBun also experienced huge success through community service programs and sponsorship
of such programs. According to the study by (Viren, 2015), promotion on large scale events and
cultural programs can increase the brand value of an organisation by a huge margin as the
promotion is not only being done locally but globally as well. Sponsorship of MERC (Marine
Ecological Research Centre) at a community service event in Gavana brought huge success to
SugarBun. SugarBuns not only promoted their brand through sponsors but also offered
customers free vouchers when the customer would buy any meal for or more than RM30.00.
With the FOS membership cards, the customers can enjoy a discount of 10% on the effective
price every time they visit SugarBun restaurants.
2.2 Sugar Bun expansion (Global)

With the huge success of SugarBuns locally, the company aimed to take their business global
with a vision of opening 150 news outlets in just 5 years (as per case study). According to the
reports of (thestar.com, 2018), SugarBuns aims to open various restaurants in Malaysia and
outside Malaysia as well.

SugarBun is the only Malaysian franchise to open restaurants globally (Lindsay, 2019).
SugarBun started from West Malaysia and has expanded to international markets of India,
Australia, China, United States, Bangladesh and Indonesia. The reason for aiming to global
expansion is largely based on the fact that SugarBun accelerated their domestic business by 83%
in 2011 when compared to 2010 (Lindsay, 2019).

By the end of 2011 SugarBun has already opened restaurants in Chin and Bangladesh. The
expansion of the company was not as small as the company's restaurant in China had a seating
capacity of 200 people which was way larger than domestic Chinese restaurants. By the second
half of 2012, the company aimed at launching more than 12 restaurants domestically and 6
restaurants globally which included one outlet in Brunei, 4 outlets in China and one in
Melbourne, Australia (Lindsay, 2019).

The expansion of a company on a global level is solely based on the popularity of the company
in the domestic market as well as their strategy for each market based on customer satisfaction
and preferences (Ciriminna, 2016). Since SugarBun is a fast-food chain and Asian dining
specialist, the demand for quality Asian food in the global markets increased rapidly and
SugarBun took the correct advantage of it by doing the right research and market study, the
company established various restaurants depending on customer demands.

With expertise in franchise business modelling and 30 years of experience in the food industry
SugarBun has developed Information System, Training operations, Quality Assurance, marketing
and research development team which increased their potential for global success (Lindsay,
2019). Marketing and promotion of an organisation's goals and achievements can play a huge
role in global expansion of the particular company (Gollnhofer, 2015) Global expansion also
became easy for SugarBun as they acquired the MS ISO 9002 (Malaysian written standard for
International standard organisation) certification which is globally identified as the highest
standard for an operating industry. SugarBun also promised an average return of 15% depending
on the amount of investment for any acquisitions of the franchise such marketing and financial
strategies are the reason for SugarBun’s global expansion.

2.3 Sugar Bun's New-Market potential (Utilization of cultural aspects)

SugarBun is a huge name in the Malaysian market. SugarBun acquired the highest standard of
authentication from ISO and also are globally popular for their Asian and Western cuisines.
Organisational achievement can only help the company to thrive in existing markets, to acquire
and stand on a completely new market, market penetration strategy along with expertise in local
product development is very important (Boskou, 2015).

The company is a domestic giant wanted to expand and discover new markets for global
expansion. SugarBun's potential for the new market has always been crucial for their business,
adding of proactive strategies for customer engagement has been the key for SugarBun (as per
case study). The introduction to FOS card and Magnetic strip cards for loyal customers has been
a popular thing for the company. Introduction of SugarBun into the Chinese market with these
strategies has proved to be helpful as the company just didn't introduce two new cards, but there
were 12 separate card designs based on the customer's loyalty in China (as per case study).

SugarBun also used the power of media by promoting its brand through memorable and
interesting radio advertising in China. Few of the Audio advertising included phrases like “za
Shu law, JI lou pau, ping chi ling ping chi ling, ping chi ling! Siaw di ni le? Wo you chik sugar
bun bun bun bun bun bun bun bun, haha!” which attracted the customers towards the brand (as
per case study). Utilization of the cultural aspect is very important for an organisation as it
directly reaches out to the local people who further help the company to correctly position their
goods and products (Boskou, 2015).

Another customer-centric strategy for the Chinese market by SugarBun was to focus on
prosperity based food which they advertised as prosperity Fish Meal with the tagline saying
"Prosperity in every bite" (as per the case study). The specific approach to make a product
customer-centric by stressing on the point which will hit the customer emotionally was an
excellent strategy adapted by SugarBun. SugarBun also adapted the technique to wish their
customers in Chinese saying “wishing you nien Nien yu yee” which stated that the customers get
fish throughout the year (as per the case study). The advertisement also focused on the brand's
concern towards the environment as SugarBun always advertised their restaurants as “will have
enough food to eat every year” which raised appreciation about their sustainable development.
Use of the number 8, which is a lucky number for the Chinese people, SugarBun advertised their
platter for large fried fish with steamed rice and vegetables as RM8.88 (as per the case study).

2.4 Current Issues with SugarBun & Recommendations

Issues

With the introduction of numerous food businesses nowadays, a company cannot only survive by
serving their specials only (Jespersen, 2017). SugarBuns global expansion has led to humongous
success for them but also came with a threat from rival companies.

The company serving Asian special foods and eco fish meals which is not enough as other
companies are coming through all these ways to copy such meals is a threat to the company. A
company going global has to face a lot of challenges which includes political and social factors
based on various country’s trade and political relations (Dass, 2017).

SugarBuns being a Malaysian company doing business in both China and the US may be a point
of concern as the trade relations between the two countries is not good. SugarBuns dealing only
in Asian and Western cuisine is also a point of concern as the amount of globalisation that the
company is aiming requires more effort in market penetration and product development.

Extra marketing and promotion of the company can be a point of concern as over promotion may
lead to negative customer satisfaction.

Recommendations

It is suggested that the company should follow basic strategies for market penetration and
product development. Development of a product based on customer demand is essential (Munro,
2017). SugarBuns should create few new products other than their special Asian cuisine as the
customers outside of Asia wants other options apart from just Asian cuisine.
Political scenarios play a very important aspect of the rise and decline of a large organisation.
SugarBuns doing business in both the US and China can prove fatal if the cold war among the
two countries takes a negative turn (Rahimifard, 2017).

3. Conclusion

SugarBun is a huge Malaysian restaurant chain which focuses on Asian and western cuisines.
The success of SugarBun came from the company's extensive marketing intelligence and
customer-centric product design and promotion. The FOS loyalty program of the company
enhanced customer satisfaction by a huge margin as the customers are largely benefitted by
getting offers and free meals in return. SugarBuns community service promotions have played a
significant role in their success. SugarBun's aim to thrive globally has helped the company to
overcome several boundaries. The company aimed to open several restaurants outside Malaysia,
China being one of the main focus points for the company. The domestic popularity of the
company and acquisition of the ISO's highest product standard has pushed the company further
ahead form other competitors. SugarBun's new market potential has included the promotion of
their products in cultural languages which largely helped them attract customers. Few issues
regarding the political scenario and product development are present, appropriate suggestions to
mitigate such issues have been discussed in the study.
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