3.

0 Decide market entry strategies

3.1 Franchising

Based on the analysis above, Secret Recipe can use a few market entry strategies in
entering a new foreign market. One of the best ways is to using franchising which is
direct exporting entry mode. Secret Recipe is recruiting master franchisee to overseer
their foreign territories (The Star 2011). Master franchisee is well versed in the culture
as well as customers' preferences and purchasing patterns in their respective countries.
This is especially important in creating the perfect localization and adaptation strategy
that can capture the taste of the locals. For instance, the language using in Saudi
Arabia is Arabic and culture is Islamic heritage and Bedouin traditions which are
differed from Malaysia. By hiring a master franchisee, they are more knowledgeable

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about the culture and language used in Saudi Arabia.

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Master franchisees also assist in the navigation of the country’s rules and regulations,
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lowering the risk of international expansion. Through master franchisee, Secret
Recipe will be able to achieve rapid international expansion as a master franchisee are
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motivated to build their network of individual franchisees, to rack up the earnings.

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Master franchisee also will be tasked to provide support to the sub-franchisees,

allowing Secret Recipe to turn their attention to another country. While selecting
Saudi Arabia, Secret Recipe should maintain a good connection between two parties
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to ensure strong management. In this pandemic time which is COVID-19 had affected
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all the way how consumer buying behavior and store operating, it needs to be
considered by Secret Recipe to determine a suitable timing to enter the market by
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using franchising (Regan Leggett 2020). It is because physical travel is important to

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avoid unprofessional which able to affect reputations, although communication

technology had revolutionized such as Zoom, text message, or email face-to-face
communication will be making sure Secret Recipe does not being misinterpreted.
According to appendix 1, a survey conducted by Nielson global premiumization
study, most of the global consumers will pay more for high quality and superior
performance. Therefore, Secret Recipe should also maintain its standard and quality in
different franchises globally to be successful by continuing franchising to expand the
market.

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 According to iFranchise Malaysia, Secret Recipe will support its franchisee through
advertising and promotion, continuous training and advice, research & development,
field agent visits, and site & design suggestion (Appendix 2). Through training,
franchisees will be able to build up a good foundation in managing daily business
operations but also learning the philosophy behind Secret Recipe brand name. A
strong foundation will lower the risk of failing and allow franchisees to be more
resilient to the harsh business environment but also lowering the probability in
franchisee tarnishing the brand name of Secret Recipe. By winning a reward of
MRCA international exponential growth award 2020, Secret Recipe believes that
taking control of advertising and promotional campaigns enables consistency across

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all stores, creating a similar customer expectation when entering restaurants in

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different locations (Secret Recipe 2020). For instance, the special attention to the

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consumption and media habits of its audience, as well as the influence of technology

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and food trends, "Secret Recipes" is at the forefront of consumer thinking throughout
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the company's changes. By using iFranchise Malaysia, a franchisee in Saudi Arabia
able to adapt the needs of a new market with its digital and social media participation,
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Secret Recipe can also expand their brand within its market.
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Moreover, the field agents of Secret Recipe will ensure all Secret Recipe branches are
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following the established standard of operations as well as monitoring the

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performance of each franchisee but also enabling an in-depth investigation regarding

franchisees’ problems. If Secret Recipe plans to franchise their business to Saudi
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Arabia, the locations must fit the concept and locational strategy that is bustling with
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customers' traffic. According to Thinnosha A/P et al., Secret Recipe is targeting

independent adults who are working and young teenagers which means the interior
design of the outlets much be well-designed to attract the customer with modern
facilities. The identity of the restaurant chain should carry the red color theme of
Secret Recipe and need to make sure the place is hygiene to attract customers have a
preference dining in the outlets. In short, Saudi Arabia franchise will be easier as it
was supported by the franchisor in research and development to uphold the standard

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 of the dishes created are in line with their localization strategy as well as the theme of
Secret Recipe.

3.2 Strategic Alliance

Moreover, Secret Recipe could adapt co-operation strategies which are strategic
alliances as a market entry mode. Informing an agreement between two parties can
maintain their autonomy while gaining a new opportunity. Secret Recipe did succeed
in this strategic partnering with Fosun International Limited to expand its market in
China (SME 2014). Strategic brings out the mutual benefit that the Malaysia brand of
Secret Recipe being recognized by Chinese consumers in China and Fosun company

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able to expand into the Asian market.

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Secret Recipe can collaborate with Aujan Group Holding (AGH), a conglomerate’s
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Saudi Arabia company that has an interest in manufacturing, hospitality, trading, and
real estate. AGH had successfully leveraged its geographical footprint becoming a
regional corporate powerhouse (Aujan group holdings 2020). The success example
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strategic alliance is between AGH and Coca Cola company of the formation of two
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new world-class beverage companies. Therefore, Secret recipe can alliance with Rani
Pulp Drinks which is a fruit-based beverage in Saudi Arabia by AGH. Rani Pulp
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Drink is a famous drink that only available in Saudi Arabia, it comes with different
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flavors that available in the tin as well as glasses and the best seller is the mango and
orange flavor. They can develop innovative products that benefit both companies and
enhancing their profit. For example, Secret Recipe starts its first outlet in the capital
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Riyadh such as Granada mall and Riyadh Gallery by introducing the new localize
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menu with Rani Pulp drinks. It could better match local preference and let them
recognize the brand of Secret Recipe. Customers are more willing to visit and
experience a new store in the mall because of the well-known brand of Rani Pulp in
Saudi Arabia that alliance with the Secret Recipe. To conclude, it can avoid the initial
hardship of new business by getting alliance with already existing companies to speed
up the progress of a foreign company’s entry into the new market.

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 Apart from a strategic alliance with a conglomerate company, Secret Recipe could
also have an alliance with Kaiian, a local homegrown Saudi Arabia taxi services app.
Kaiian provides transportation in dozens of Saudi towns such as Jeddah, Riyadh,
Makkah, and Tabuk. Kaiian understanding the local market and enter 30 towns in 2
months and becoming one of the three biggest on-demand companies (Onde app
2018). By signing the agreement between two parties, it can be done by the Kaiian
ads. For instance, a mobile billboard is a car wrap to draw attention to the Secret
Recipe’s brand and message while on the move. Moreover, in-car engagement or in-
app opportunities could also build awareness. There is a success story by Grab
Holdings incorporate, an alliance of car wraps and in-car sampling drive Garnier
Micellar hit the highest sales in 4 weeks times by attracting 9.8 million impressions

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and 61% of brand recall in Singapore (Grab car 2020). If Secret Recipe adapting this

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alliance with Kaiian, it can open up with new distribution channels and increase the

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reachability of their products and services once open up an outlet in Saudi Arabia. The

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drawbacks of these strategies are the partners may misrepresent or lie about their
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competency, therefore Secret Recipe needs to do in-depth research before they choose
to alliance with a different company in Saudi Arabia.
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Reference
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Grab car 2020, ‘Success story of Grab ads’, viewed 21 Aug 2020,
<https://www.grab.com/my/business/ads/>.
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Aujan group holdings 2020, ‘About us’, viewed 2020, <https://www.aujan.com/>.

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Onde app 2018, ‘Kaiian: “Starting a taxi business is a social move”’, viewed 20 Aug
2020<https://onde.app/blog/how-to-grow-a-taxi-business-kaiian>.
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SME 2014, ‘Secret Recipe and Fosun Announce Strategic Partnership in China’,
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viewed 22 Aug 2020, <https://sme.asia/secret-recipe-and-fosun-announce-strategic-

partnership-in-china/#:~:text=During%20a%20press%20conference%20held,minority
%20stakeholder%20in%20Secret%20Recipe.>.

The Star 2011, ‘Secret Recipe to expand to India and Cambodia’, viewed 15 August
2020, <https://www.thestar.com.my/business/business-news/2011/12/21/secret-recipe-
to-expand-to-india-and-cambodia>.

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 Regan Leggett 2020, ‘QUALITY AND EFFICACY MAY BEAT OUT PRICE
SENSITIVITIES AMID CORONAVIRUS CONCERNS’, viewed 15 Aug 2020,
<https://www.nielsen.com/us/en/insights/article/2020/quality-and-efficacy-may-beat-
out-price-sensitivities-amid-coronavirus-concerns/>.

Secret Recipe 2020, ‘Our story, Recognition of secret recipe’, viewed 20 Aug 2020,
<https://www.secretrecipe.com.my/our-story/>.

Thinnosha A/P Thambyraja , Daisy Mui Hung Kee, Patmapriya A/P Morali,

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Thaneshweri A/P

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Thangesvaren, Vejaydarssni A/P Pushpagaran, Abdulmohsen Alnassar, ‘Research

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focus-issues in Asian company (Secret Recipe)’, International journal of tourism &

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hospitality in asia pacific, viewed 20 Aug
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2020,<http://ejournal.aibpm.org/index.php/IJTHAP/article/viewFile/526/529>.
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Appendix
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Appendix 1

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Appendix 2

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