UNIVERSITI TEKNOLOGI MARA CAWANGAN SABAH

KAMPUS KOTA KINABALU

BA240
BACHELOR OF BUSINESS ADMINISTRATION (HONS.) MARKETING
OCTOBER 2020 – FEBRUARY 2021

OPM530
INTRODUCTION TO OPERATIONS MANAGEMENT
INDIVIDUAL ASSIGNMENT 1 : ARTICLE CRITIQUE

PREPARED BY:
MUHAMMAD DANIAL ZHARFAN BIN AIDIL (2020449384)

GROUP: BA240 1A1

PREPARED FOR:
NURAFIZAH AHMAD
DATE OF SUBMISSION:
27 NOVEMBER 2020
ABSTRACT

Nowadays, the development of food trucks business has become fashionable among Malaysian.
Food trucks are often categorized from Small to Medium Enterprise (SME) since the business solely
desires some individuals to handle it. The value to create up the business isn’t as much as the business
supported brick and mortar stores. The existence of food trucks business has grown up within the SME
industry by leaps and bounds. Since the idea is comparatively new in Malaysia, it’s problems and
challenges as well as difficulty in obtaining operational license and permit from native authorities, finding
strategic locations to park trucks in addition as comparatively unknown consumer perception towards
such unorganized food sector. The aim of this study is to seek the issues arise in this business area in
order to understand the food truck business in Malaysia. Regardless, the food truck business has currently
resurfaced with a fast progress despite the fact that there are plenty of threats have to be compelled to be
faced including the competition and license issue. Looking through these challenges, the food trucks’
owner’s perspective and courageousness to require risks may be a positive action which should be
emulated by alternative entrepreneurs in Malaysia.
INTRODUCTION

In Malaysia state of affairs, a food business operational from specially-equipped trucks have
appeared in Klang Valley and this food truck development become fashionable among urban life across
the cultures and countries recently. Food truck business are often seen as a preferred vendor especially in
big cities like in Selangor and Kuala Lumpur. Selangor, for example, has about 130 licensed food truck
operators and also the numbers can double in 2018 and the government gears up to issue around 1,000
licenses to operators by the end of the year. Averages of five food trucks open every month in Klang
Valley and to activate the industry to ensuing, promising level. Kuala Lumpur can presently open 6 new
food trucks parks (The Star,Feb 21,2017).

Food truck may be a transformation of street food and has contributed to the vitality of urban life
across cultures for centuries. It is the culinary business owner’s ability that presently becomes the
worldwide business trend. The truck is often containing cooking facilities to arrange food. It is also
known as the emerging enterprise that serves variation of foods from simple, comfort food to gourmet
food. The business activities from taking order, dine in to payment is conducted in this vehicle which is
specially designed to attract customers. Since its unique conception, the food truck has become popular
and it offers great opportunity and profits. Besides, customers claimed that food trucks meet their
expectations as a result of they want fast service, healthy food, sorts of food that dissent from home and
friendly environment. Food reviewer delineated food truck business as a fast-catching trend, hyped by the
time period and Generation Y with the urban setting food trucks run smaller, a lot of simply manageable
kitchens than restaurants. It is conjointly pictured as a service to fulfill the need for fresh, local, quality
food served quickly and conveniently and that they can try new products real-time with daily menus. It’s
an area for expertise urban street dining right within the heart of the town and has already become the
right ‘lepak’ spot for urbanites.
MAIN IDEA

One of the problems for food truck owners is that the street food red tape which includes
obtaining seller’s permit, health department certification, permits and license for the food truck itself and
others from the varied government authorities. Although in Malaysia, there are numerous requirements
for food distribution like health department, certificates, truck permits, and parking restrictions. Lack of a
licensing framework governing food trucks in Malaysia, which implies that the food truck operators don’t
have the licenses to park their vehicles in most public areas even once they have all other licenses
concerning the business vehicle license also all the required certifications to run a food outlet.

According to Ahmad Tarmizi Baharom, the senior assistant director of Licensing & Small
Traders Management Department of DBKL, confirms that food trucks are considered to be operating
illegally. Due to this reality, several food truck operators face the problem of their trucks get towed away
every day at public areas. Completely different places have different details of permit and licenses. The
food trucks’ driver can’t simply park wherever they want. Some food truck parks lease the spots.
Alternative need a percentage of their sales. Typically there are area unit for waiting lists for parking
spots at lunch spots, fairs, farmers’ markets, and other events. It’s quite merely finding an open parking
lot and setting up shop, especially if they need a spot in the extremely trafficked areas.
EVALUATIONS OF MAIN IDEA

Food truck owners lament that there has not been enough government help in one crucial aspect:
location. At present, food trucks are required to get permits from city halls or municipal councils to
operate in an exceedingly specific area. For an example, if a food truck wants to try and do business in
Subang Jaya, it would get to acquire a permit from the Subang Jaya Municipal Council. They are not
allowed to do business in any part of the real except for their allotted spot, which shackles their quality
hugely.

The problem with this arrangement? These spots area unit reportedly allocated based on wherever
the municipal council or city hall believes traffic would be least affected — as against to locations where
food trucks would receive optimum exposure. Mr. Azharul cites an example, when his truck was given
permission to operate within the compound of a wet market at nighttime. “It was pointless! The area was
so dark,” he noted, before highlighting how bubble tea purveyors are allowed to open their stores on one
particular street in Subang Jaya’s SS15 area — that has ironically caused huge traffic congestion.
Responding to CNA’s queries, Mr. Ken Chia, a counselor at the Subang Jaya Municipal Council
aforementioned it absolutely was a matter of balancing the interests of food trucks and other mobile
traders. While food truck operators and mobile traders like hotspot places such as SS15, allowing all of
them to operate there would cause serious traffic congestion, he said. “Some food trucks would somewhat
be fined by the enforcement team for operating in an exceedingly hotspot than to stay to their selected
spots as declared in their permits,” he discerned.

Even those that who can secure government grants and subsidies - which may be a tedious
process involving the municipal council and city hall - are not guaranteed sensible locations. Mr Iskandar
of Eight Street Cafe said: “The locations these government grants trucks area unit allowed to operate is
not good, definitely not in central Kuala Lumpur where we tend to get a decent mixtures of tourists and
locals testing the food”.

Summing up his experience in the food truck industry, Mr Kee of Gotta C Music & Ice Bingsu
said: “(The native governments) have tried their best to assist food truckers find the best spots to do
business. I would say the atmosphere for food trucks has improved greatly”. He added: “In reality,
operating a food truck has a lot of hardship than happiness. “We are exposed to the cruel weather,
however on the other hand, we tend to enjoy flexibility and quality. The business risks are lower.”
METHODOLOGY

Methodology that been used is entailed mixed method. Qualitative data collection entailed semi-
structured interviews firstly with four food truck owners in the Klang Valley to gather feedback on issues
faced and secondly personal interview with two local authorities at Shah Alam and Subang Jaya towards
food truck matters such as licensing and permits. The quantitative approach utilized survey questionnaires
to 200 food truck and would-be customers distributed during Food Truck Festivals held in KL and at two
universities in Shah Alam and Petaling Jaya. The fieldwork took a duration of three weeks as it involved
different locations of the events which were only held at specific times. Quota sampling was used to
predetermine the proportion of respondents from different groups in three locations but samples were
selected conveniently within the quota set. The final respondent response rate was 87%.
FINDINGS

Every district has its own policies on how to start a food truck business. The problem arises when
the food truck owner wants to get the license to start the business. In Malaysia, there is lack of clear
specific regulations for food truck businesses as they are still new in the industry. According to Shah
Alam City Council (MBSA) and Subang Jaya City Council (MPSJ), it was found that there is no specific
license for mobile food truck businesses as the owners can get the license under “Temporary Hawker”
license. From the personal interview with food truck owners, it was found that food truck businesses fall
under the category of ‘Temporary Hawker’ where the license must be renewed every 3 months for
example at Shah Alam which can be cumbersome.

Another issue is choosing suitable locations to operate their business and parking issues. Even
though food truck business is mobile, however, having the right location to settle down is a difficult task.
Food truck owners cannot park anywhere and at some places they need to lease the spots. It is more
convenient to find an open parking lot and set up the truck, especially if they want a spot in mostly highly
traffic areas. However, such spots may be restricted areas for street food vendor and cause congestion.
USEFULNESS AND APPLICABILITY OF THE ARTICLE

In terms of perception, food appearance, hygiene, food safety and risk as well as pricing affected
WTP for food from food trucks. Results were similar to another study by Harith et al. (2014) and further
supported by Ajobo (2012). Food truck operators must adhere to the quality of food, cleanliness,
consistency, manner and hospitality. Similarly, Lee et al. (2012) also found cleanliness, safety and food
hygiene affected WTP. Findings is corroborated by Choi et al. (2013) that perceived risks in terms of
hygiene, environmental and health risks negatively affected consumer attitude toward street food.
Authorities need to plan food truck management just like night market management as practiced in
countries like Taiwan. The hygiene knowledge and practices of food vendors to ensure hygienic
preparation of street foods is important to get vendors to obtain food-related certificates to increase
knowledge of and techniques for food preparation as well as to improve the confidence of consumers
towards street food (Sun et al., 2012). For customer attitude, food variety is important for preferences of
food truck similar to findings by Carvalho (2013). Further support on similar findings was found in Choi
et al. (2013) where perceived benefits of street food in terms of convenience and value benefits positively
affected attitude. Consumer attitude toward street food in terms of trustworthiness, liking and satisfactory
food from vendors affected behavioral intention to purchase.

For customer acceptance, product knowledge and innovativeness influenced WTP. Food truck
operators should emphasize on food innovation which may require food branding and new product
development strategies to sustain business and the use of social media networking. A strong marketing
presence in terms of not only great recipe but establish a strong food truck brand increases public
recognition. Strategies include setting up a food truck website and engaging in social media. They can
capitalize on innovation in terms of using social media networking as a promotion channel. However,
using social media networking by simply posting via Twitter and Facebook to announce upcoming food
truck stops is insufficient. They need engage with competitors and potential food truck customers via
social conversation is vital for success (Myrick, 2017). Networking with other local agents to check on
upcoming entertainment and other events nearby to get exposure to new customers in new strategic
locations as well as teaming up with other local food trucks on food variety are ways to gain customer
acceptance in food truck marketing (Food truck marketing, 2017).
POINT OF VIEW

Several strategies are recommended to advocate food truck business into a legal and organized
sector. In terms of policy making, local authorities need to be proactive to draw up new guidelines and
regulations for food truck operators. Currently there are no regulations for food truck operators
throughout Malaysia which comes between laws for static and mobile hawkers. To date local authorities
in Selangor have drawn up 13 laws to facilitate them.

Hence this is good initiative and other local authorities should follow suit. Other policies such as
ease of operation permit and vehicle certification should be provided as well as approval to hold food
truck festivals. Food truck carnivals remain as a major way to promote culture and even support tourism,
hence collaboration with tourism authorities and local councils is vital. It was reported that food truck
business could boost tourism in the food tourism subsector, which is gaining popularity among local and
foreign tourists in Malaysia (Food trucks to serve tourism, 2016, December 27). However, it must be
managed properly.
CONCLUSION

The food truck business has exaggerated its quality in Malaysia. Although it shows awfully
positive growth, the food trucks owners in Malaysia are still endeavor legal problems with the authorities
with yet, nearly unreliable solutions relating to licensing. This is often one out of several other problems
that make the legal food trucks business isn’t as simple as it looks if it’s not directed on a right track.
Most of the food truck does not have a special license as a merchant, however they are doing business
with the permission from the authorities such as Kuala Lumpur City Hall, KPDNKK and other authorities
concerned. However, the government still plays a role in building a reputation for food truck business to
the whole country by serving the traders in terms of capital and also the provision of special places to try
and do business under the 1MMH. Moreover, the government also will make sure that every merchant of
food truck performs the operations accordance with the standards of hygiene issued by the ministry of
health Malaysia in guaranteeing the quality of the food provided is safe and hygienical. Finally, food
truck in Malaysia may be a business that could grow if it keeps receiving continuous attention and support
from the government in promoting this business globally. Although other countries are ahead of us in this
industry, it’s not an obstacle for the food truck business in Malaysia to form its mark within the
international market.
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