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Table of Content

1.1 Table of Contents

1.1 Table of Contents............................................................................................................2
1.0 Introduction.....................................................................................................................3
1.1 ACKNOWLEDGEMENT..............................................................................................4
1.2 Asset Management Ratio with Interpretation.................................................................5
1.2.1 The Old Town product's quality....................................................................................5
1.3 Internal Factors:..............................................................................................................6
1.3.1 Product...........................................................................................................................6
1.4 External Factors:.............................................................................................................9
1.5 Asset Management Ratio with Interpretation................................................................11
1.6 Debt Management Ratio with Interpretation.................................................................12
1.7 Ratio with Interpretation...............................................................................................14
1.8 Market Value Ratio with Interpretation.........................................................................14
1.9 Conclusion.....................................................................................................................15
Appendices (Financial Statements Report)..............................................................................15
References................................................................................................................................15

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 1.2 Introduction

Globalization has altered the nature and scope of strategy to support most of the business
in these era. All firms property can help increasing market liberization and to improve the use
of information supply to all management practices. By adopting the above mentioned, when
the OLDTOWN White Coffee Classic 3-in-1 instant was introduced in 1998, their wish for
customers to be able to bring OLDTOWN back into their homes was realised. Numerous
Asian nations have adopted this product widely. The retail chains of OLDTOWN F & B
Outlets are a result of the OLDTOWN Brand's evolution and foray into the food and
beverage industry. The Ipoh flagship has successfully expanded into a full-fledged franchise
business, which as of July 2010 included 166 locations in Malaysia and Singapore. For the
majority of businesses, globalisation has changed the type and reach of strategy and
competitiveness (Melin, 1992; Zahra & George, 2002). All businesses now have more
opportunities to become global because to greater market liberalisation, the use of
information and communication technology, and innovative supply chain management
techniques (George et al., 2005; Westhead et al., 2001). To compete successfully in global
marketplaces, businesses must have adequate resources (Dunning, 2000; Eriksson et al.,
1997; Peng, 2001).

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1.3 ACKNOWLEDGEMENT

First and foremost, praises and thank you to the God, the Almighty, for His
blessings for me to complete the assignment given by our lecturer.

I would like to express my gratitude to my lecturer, ……………….. because of her

patience while guiding and acknowledge me to complete the assignment. His/her guidance
really helps me to succeed and complete this assignment within the time given. I also want
to express my gratitude to my husband, En. Mohd Adam for his contribution to help me
complete the assignment. Without his contribution, it will be difficult for me to complete
the assignment within the time given.

Lastly, I also want to thanks to my family, my kids and friends for their motivation,
advices, support and encouragement during completing this assignment. Their supports
and encouragement are really help me. Since that, I am motivated and I did complete the
assignment successfully.

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1.4 Asset Management Ratio with Interpretation
1.2.1 The Old Town product's quality
When discussing product quality, the word "environmental condition" or "operational
condition"conditions that are searching for what they need in Malaysia's surroundings. First,
the majority of Malaysians are Muslims. Before launching new stores, Old Town must first
obtain a Halal certification from the Islamic religious administration. Even though this white
coffee's founders are Chinese, they must ensure that they can win over Muslim customers by
employing a Halal certification. This will help them maintain their customers' trust and dispel
any questions they may have.

In the US, white coffee is sometimes referred to as coffee with milk or cream. A cup
of instant coffee with a splash of cold milk is also referred to as white coffee. However, the
term "white coffee" in this context refers to coffee that has been substantially
underroasted.While the individuals selling this product won't disclose how it is created, the
advertising that goes along with it would support this supposition. Unroasted beans are quite
difficult to grind, hence a specialised grinder is needed. Compared to regular coffee, white
coffee contains more caffeine.

In addition to maintaining their outlet's hygiene, they must maintain the Halal
certificate's approval. The Ministry of Health Malaysia is one of the government agencies in
responsibility of conducting periodic spot checks to ensure that every restaurant in Malaysia
is hygienic and serving nutritious meals. Old Town is protected from customer or competitor
complaints regarding security because a government authority has already approved that their
establishment is sanitary and secure. As a result, Old Town's reputation will grow and clients
won't be wary of its products.

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1.5 Internal Factors:
4Ps Analysis

1.3.1 Product
 As what we mentioned in the Introduction and Company Profile, there are two

segments of business the Old Town is currently involving, which are Operation of

Café Chain and Manufacturing of Beverages.

 Thurs, there have wide ranges of the products manufactured and marketed by the Old

Town.

 The products under the Café Outlets include My White Coffee (11 products such as

White Coffee and White Coffee Mocha Freeze), My Drinks (37 products such as

Enriched Chocolate and Honey Lemon Juice), My Asian Favorites (34 products such

as Curry Mee and NasiLemak) and My All Time Favorites (38 products such as Kaya

& Butter Toast and Omega Soft Boiled Eggs).

 Besides that, there are 6 different types of instant coffee mix manufactured and

marketed by Old Town, it includes 3 in 1 Classic White Coffee, 3 in 1 White Milk

Tea, White Coffee Can Drink and so on [Old Town White Coffee, 2011].

 Furthermore, the continuous innovation is the hallmark of this company’s ability to

gain customer loyalty and increase same store productivity over time. For instance,

the Old Town café outlets are offering high-speed internet connectivity and

dynamically refine its menus and product offerings to capitalize on consumer trends.

So that the company can continuously improves the customer experience.

 As we known, the product quality is critical to the success of business. The Old

Town’s product quality is excellent; it can be proved by the awards and certificates

that were acknowledged by several bodies. For example, the company was awarded
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with the Product Excellence Award in Industry Excellence Award 2010, the Best
 brands Food and Beverage Kopitiam 2007 by the Brand Laureate and so on [Old

Town White Coffee, 2011].

 When we’re talking about the product under the 4Ps, we will also mention about the

branding of the product. It provides the company with a key competitive advantage to

compete effectively in the F&B industry. It goes without saying; the branding of the

Old Town is a very strong and reputable in Malaysia. However, there are more and

more companies like PappaRich, George Town entry into this industry, the foods and

beverages produced by Old Town is easily replaced by other competitors.

1.3.2 Pricing

 According to the Old Town Berhad Corporate Presentation, it mentions that their

integrated business model enables them to control majority aspects of the value-added

chain hence allowing them to have exceptional pricing power.

 It is supported by its own centralized food processing centers and a distribution centre

for product quality control and hence it reduces the cost and provides customers a

much reasonable price [Old Town White Coffee, 2011].

 Not only that, it can help to be more cost effective to compete against other service

providers as well as other coffee beverage resellers.

 Its pricing and product mix appeal to a wide market vs. premium brands like

Starbucks. For example, the price of the product offered by Old Town is higher than

the traditional coffee shop, but lower than the Starbucks. It shows that the company

differentiated their products and services by higher price, at the same time they also

take affordability of customers into consideration, so it makes the products offered at

a very reasonable level.

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  From our very personal observation, we found that Old Town is adopting a Value-

Added Pricing strategy that emphasizes on the services and environment.

1.3.3 Place

A way of getting the product to the consumer and/or how easily accessible it is to

consumers

 All the stores of Old Town White Coffee are located at a very high traffic location.

High traffic location is a good sign of business volume, whenever there is high traffic

it is high business opportunity area.

 At the same time, Old Town White Coffee is mostly located at very visible locations

as well. Visibility is the most prominent criteria for a business to generate

extraordinary profit volume. The easiest to be seen or noticed, the higher chances of

getting business compared to the less be seen.

 As we all know, Old Town White Coffee is founded in Malaysia meanwhile it is

expanded into foreign market like China in the form of franchisees. This is to gain

competitive advantage for Old Town White Coffee in the foreign market.

 Besides, Old Town White Coffee adapts master franchise as its form of franchising.

This type of franchising allows company to retain the economies of scale and a large

chain meanwhile minimizing the meticulous management of geographically

dispersed individual stores. This method of franchising allows company to enter into

a distant and cultural dissimilar market.

 Other than coffee shop business, it distributes its product such as Old Town White

Coffee 3-in-1 blends, Nanyang White Coffee, Simply Pure White Coffee and Ready

to drink products through distributor and wholesaler such as supermarket. Again, this
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provides competitive advantage to the company.

 1.3.4 Promotion

 First promotion strategy is through advertising, we have noticed that the OldTown

White Coffee advertises through various media. Firstly, it is through internet social

media such as YouTube, Facebook and OldTown White Coffee official website. Other

media that has been used to promote Old Town White Coffee is radio such as MyFM,

print media and billboard.

 Second way of promotion is through public relation. This type of promotion is via

certain sponsorship deals, conference, exhibitions, trade fairs and events.

 Word of mouth is apparently another informal communication about the product by

oridinary individuals in which I aware OldTown did have this indirect promotion as

well.

1.6 External Factors:

i) PEST Analysis

Political

 Government policy- the increment of government tax will somehow affect the

revenue of company. For example, GST has been increased from 5% to 6% in the

past few years.

 According to aseansources.com [2004], Malaysian manufacturers are moving

towards the adoption of ISO 9000 and Quality Assurance Programmes(QAP).

Besides, Malaysian food products can be consumed by Muslim only it certified

“halal”.

 Malaysia government offering tax incentive to business that implementing Corporate

Social Responsibility program(CSR) which the requirement are supporting arts and
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 cultural programs, reduction in greenhouse gas emissions and investing in local

communication.

 Malaysia government doesn’t change frequently, in a way that, the political condition

in Malaysia is considered stable and it is good for operating business as well as

giving positive effect to company.

 According to Human Resources DatukDr S. Subramaniam, the government hopes to

announce the minimum wages before end of the year [asiaone, 2011]. After the

announcement, it might affect or increase the burden of company as the labor cost

increase.

Economic

 According to Malaysian-German Chamber of Commerce & Industry [2010],

Malaysian current population is around 27millions and it is growing steadily with an

annual rate of about 1.95%. Besides, the standard of living and purchasing power are

also steadily increase with it (per capital income exceeds RM19, 739 or US$5,681).

 In 2009, food processing industry accounts for 10% of the country's domestic

manufacturing output with a total trade over RM21 billions and exports over RM12

billions to more than 80 countries worldwide [Food Future 2011, 2011].

 Recent financial crisis caused by US and Europe countries affect worldwide economy;

it might affect customer spending power and give negative impact to the food

industry.

 When economy is good, people are more afford and willing consume as their personal

disposable income increased. Thus, company can get benefit from higher spending

power of consumers.
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  In term of labor forces, company is easier to get labor to work with cheaper cost when

economy is bad, because unemployment rate is high during bad economy. On the

other hand, company is harder to get labor to work and cost might be higher when

economy is good.

 As recent exchange rate of Malaysia Ringgit to US Dollar become stronger, the export

companies in Malaysia will suffer due to the products they are selling are more

expensive. However, import companies can enjoy higher purchasing power of

Ringgit.

Social

 Standard of living. As the standard of living of people increase, people are willing to

spend on high quality of foods and beverage to satisfy their needs.

 Social stability. There is no war or any catastrophe happened in Malaysia which is

very good for operating business. For example, there is no earthquake or tornado

happen in Malaysia.

 In term of demographic factor, Malaysia is built up by many races and religion (One

Malaysia), such as Malay, Chinese and Indian. Besides, Islam is the largest religion,

comprising 61.4% Muslims and they can eat foods only stated “halal”.

 Some cultures and consumer taste are smoothly accepted by each other. For example,

most people in Malaysia like to eat NasiLemak regardless you are Malay or Chinese.

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1.7 Asset Management Ratio with Interpretation

Sales
 Per month
40 Min $0.00
40 Max $1,866.00
25 Range 1,866.00
25
30
30 Variance 356401.29
35
35 Std deviation 596.99354
25
25
45
45
50
50
20
20
30
30
35
35
40
40

1.8 Debt Management Ratio with Interpretation

Total
shar
ehol
ders
40
40
25
25
30
30
35 PAGE 12
35
25
 25
45
45
50
50
20
20
30
30
35
35
40

Gross Annual Income

$75,000
$47,000
$40,000
$30,000
$60,000
$80,000
$10,000
$43,000
$130,000
$89,000
$50,000
$13,462
$85,000
$60,000
$200,000
$44,000
$26,000
$46,100
$15,000
$15,288
$58,000
$10,000
$85,000
$20,000 PAGE 13
 Debt / equity Total liabilities / total shareholders' equity
=
0

1.9 Ratio with Interpretation

Gross Annual Income

$75,000
$47,000
$40,000
$30,000
$60,000
$80,000
$10,000
$43,000
$130,000
$89,000
$50,000
$13,462
$85,000
$60,000
$200,000
$44,000
$26,000
$46,100
$15,000
$15,288
$58,000
$10,000
$85,000
$20,000

1.10 Market Value Ratio with Interpretation

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 Market capitalization / book value

1.25629
5

1.11 Conclusion

According to several analyses, it appears that Old Town White Coffee is a powerful

company in Malaysia with a sizable market share and plenty of chances for both

employees and franchisees. OldTown has a special market-driven model where they

create their brand in a strategic approach to gain a competitive edge. As a result, Old

Town must thoroughly understand all the prospects and barriers of a nation before

investing there in order to avoid operational failure.

Appendices (Financial Statements Report)

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References
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https://www.carbase.my/tool/car- market-value-guide

Eleanmarkets. (2020). Investment Planning. Retrieved from elean markets:

https://www.elearnmarkets.com/blog/investment-planning/

Kagan, J. (2020). Estate Planning Definition. Retrieved from Investopedia.com.

Kagan, J. (2020). Retirement Planning Definition. Retrieved from

https://www.investopedia.com/terms/r/retirement-planning.asp

Kalkulator Zakat KWSP. (n.d). Retrieved from Pusat Pungutan Zakat-MAIWP:

https://www.zakat2u.com.my/kiraan/zakat/kwsp

Nota Penerangan BE 2019. (n.d). Retrieved from LHDN Malaysia:

http://lampiran1.hasil.gov.my/pdf/pdfam/Nota_Penerangan_BE_1.pdf

Personal Loans. (n.d). Retrieved from Maybank2U:

https://www.maybank2u.com.my/maybank2u/malaysia/en/personal/loans/
personal_loan_ listing.page
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https://www.ppa.my/

Why Do I Need Insurance? (n.d). Retrieved from Great Eastern Life:

https://www.greateasternlife.com/my/en/personal-insurance/understand-
insurance/why- insurance.html

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