Toaz - Info Old Town PR

BFNPI MGT 4201 8P1 Group Assignment
Table of content
Page
1.0 Chapter1: Introduction and Company Profile -------------------------------------------------------2

1.1 Vision and Mission of Old Town -------------------------------------------------------------3
1.2 Social Responsibility ---------------------------------------------------------------------------4
2.0 Chapter 2: Internal and External Analysis ------------------------------------------------------------5
2.1 Internal Factor -----------------------------------------------------------------------------------5
2.2 External Factors ---------------------------------------------------------------------------------9
2.3 SWOT Analysis --------------------------------------------------------------------------------15
3.0 Chapter 3: Strategic Issues and Recommend Options----------------------------------------------19
4.0 Chapter 4: Conclusion ---------------------------------------------------------------------------------25
5.0 Bibliography --------------------------------------------------------------------------------------------26
Strategic Management Page 1

1.0 Chapter1: Introduction and Company Profile
The History Of OLD TOWN – the simple and humble beginnings. The first Old Town`s
special brew was created in 1958 OLD TOWN, in a small town in Malaysia and we called it
Ipoh Town. It all started at a traditional white coffee shop, the owner who maintains a belief in
provides the best and unique coffee. Besides, he began serving this unique white coffee to the
residents of Ipoh and Old Town, this aromatic white coffee soon gained popularity within the
two townships and news of its unique taste spread to other flourishing towns. White coffee and
Old Town Kopitiam became recognized as one entity with its creator renowned as a pioneer and
entrepreneur. The legacy of white coffee continuous to this day, customers can enjoy the original
and unique white coffee in Old Town Café or purchase it from supermarket.

1.1 Vision and Mission of Old Town:
Goal
To let everyone enjoy every sip of authentic Malaysian Ipoh White Coffee, anytime, anywhere!
Vision & Mission
 To be Asia Pacific’s Leading White Coffee Producer providing high quality products to
customers globally.
 To promote our Unique Malaysian Taste-the authentic Ipoh white Coffee and continue
White Coffee Legacy through continuous improvement and innovation that exceeds
customer expectations.
 As a Market leader, we take pride in distinguishing ourselves to be ahead of the pack. By
setting precedence, we have made a standard that equals excellence, pushing others
brands to do the same.
 In this vein, we embrace diversity, accept challenges, adopt international standards and
good business practices and at the same time, hope to inspire the rest to follow suit.
 We strive for continuous improvement, incorporate innovations and technology in our
commitment to create customer value in our both products and services.
 Aligned with transparent policies and achievable targets, together with our core values,
we are able to move forward as one responsive team and deliver our best.
 These continuing efforts maintain and reinforce our market leader status and move us
forward to become a leading white coffee producer in Asia Pacific (Old Town, no date).

1.2 Social Responsibility:
Child Care Fund (OCAF) Earth Care
Established on 14th June 2008 for Educate community to have
giving a helping hand to the society environmentally intelligent practices
Goal: To accommodate 100 children with a variety of green initiatives.
homes Engage in green events and activities to
Allocate funds to the Old Town reach out, share and educate
Children Care Fund (OCAF) community to be environmentally
Encouragement to those children who conscious ( Old Town, no date)
lives in children homes of wellbeing
where having directly impacts on them
Actively search for approach to help up
to those underprivileged children from
different children homes around
Malaysia to have better lives

2.0 Chapter 2:Internal and External Analysis
2.1 Internal Factors:
4Ps Analysis
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 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.
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.
 From our very personal observation, we found that Old Town is adopting a Value-Added
Pricing strategy that emphasizes on the services and environment.
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
provides competitive advantage to the company.
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.
2.2 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
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.
 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.
Technology
 Internet technology allows customers getting information from internet and company
enable to make announcement on its website. For example, spreading the news of
promotion to potential customers through internet.
 Internet technology giving company an alternative way to advertise its products rather
than only through traditional channels like newspaper, television and radio, in which
advertise through internet is cost saving.
 Due to the advance product and logistic technology, company’s production can be
more effective, efficient, cost saving and environmentally friendly. Also, products can
be delivered to customer faster or even achieve globalization.
 E-commerce allows customers to purchase products and make payment through
online, which make them feel more convenient and time saving. Besides, company
can also enjoy from higher sales.
ii) Porter’s 5 Forces:
Bargaining Power of Buyers

According to Porter’s Five Forces Model, an industry is less attractive if the bargaining
power of buyers is strong. Firms in the industry also will be limited in how high they able to set
the prices. In food and beverage industry, the product that provided actually is undifferentiated.
For example, NasiLemak provided in Old Town Café is actually same as other café which has
not big difference in the food. Buyers’ switching costs are low also. Customers can easily switch
to the café that able to provide what they need without incurring any costs. There are many café
in food and beverage industry which causes customers have many option to choose which café to
go. Customers also can get the information about the hygiene, taste of foods, services and others
through internet easily. Customers will eliminate those cafes that provide poor services.
Bargaining Power of Suppliers
Bargaining power of suppliers refers to the degree of supplier in an industry have the power
to decide the prices, quality of products and other terms and conditions. If bargaining power of
suppliers is strong, buyers may pay higher price for finished goods or raw materials. In food and
beverage industry, the supplied products like flour, egg, chickens are important input for cafés
but suppliers don’t have high bargaining power as cafes owner able to get the raw materials from
other suppliers easily. There is also has law and regulation to prevent suppliers earn extravagant
profits. The buyers switching costs are low also because the raw materials are largely
undifferentiated.

Threat of Entry
There are barriers to entry and barriers to exit in this topic. Barriers to entry make other people
difficult to enter the industry while barriers to exit make players already operating inside the
industry hard to exit the industry. Barriers to entry in food and beverage industry include:
1) Economics of Scale
Firms can enjoy the benefits of economics of scale if they able to produce or buy in a big volume.
For example, Old Town has over 100 franchise café in Malaysia so they able to buy raw
materials in a huge volume and receive discounts.
2) Expected retaliation
The existing cafés may react negatively or band together to keep out new players in the area.
Retaliation can be price cutting or promotion.
The barrier to exit may only be the psychological barrier. Founder of the business has strong
sentimental attachment to the business. Even the firm is making losses, the founder still not
willing to give up the business.
An attractive industry is the entry barriers are high and exit barriers are low. So poor performing
firms can exit easily and few firms can join the industry.
Threat of Substitutes
Substitutes refer to a different type of product that can replace the original product. There are
many substitutes in food and beverage industry. But for certain circumstances there is no

substitute. For example, people who addicted to coffee and they must drink a cup of coffee every
day. They have no substitutes as they are already addicted to coffee.
Competitive Rivalry
The nature of competition in an industry is strongly affected by the other four forces above. The
strongest of the four forces, the more intense the competition is. The competition is intense will
cause the firms compete away much of the profit and the rivalry between existing firms is high.
Balance of competitors is the factor affect the intensity of competitive rivalry. When competitors
are roughly equal size, competition may become intense if one competitor suddenly sets out to
dominate the others. For example, one of the cafés in the area start doing promotion, the other
cafés has been forced to do promotion also in order to get the market shares.
2.3 SWOT Analysis
Strengths:
i) Old Town is a leading company in the café chain industry. The company has been in the
Malaysian market since 1999 and has built an excellent brand reputation. Currently there
are total of 190 café outlets operating in Malaysia, Singapore and Indonesia. The
company has a stable market share capitalization in Malaysia.
ii) The company has manufactured and marketed wide range of products. Its beverages were
sold in approximately 5,002 retail outlets nationwide in Malaysia, approximately 730
retail outlets in Singapore and approximately 2,335 retail outlets in Hong Kong. These
retail outlets include hypermarkets, supermarkets, minimarkets, Chinese Medical Halls,
petrol kiosks and other retail outlets [Old Town White Coffee, 2011].

iii) Old Town has a large sales and distribution network for our in-house manufactured
coffee and other beverages, which will provides them with significant advantages to
ensure their products are conveniently accessible to as many consumers as possible.
Thurs, it is a key competitive advantage that enables the company to cover wider markets
locally and overseas, to provide business growth opportunity.
iv) Based on the size of the company, Old Town has enjoy the economies of scale which will
enable them to improve profit margins as well as possessing stronger bargaining power to
obtain better commercial terms from suppliers including product costs, credit terms,
logistics arrangements and others.
v) Old Town has an abundance experience in terms of franchise business. It is a key
advantage in the expansion of the café network and minimizing capital expenditures to
set up new cafes.
vi) In term of promotion, the name itself makes very much sense to Malaysian as most of the
Malaysian has the sense of familiarity toward the company name. This can create an
effect of word of mouth easily from people to people.
Weaknesses:
i) There are many other providers can provide the substitutions for the products offered by
Old Town in the market.
ii) The quality of human resource cannot easily controlled by the company due to the wide
network. So that, it may affect the quality of service provided by the staff. In addition,
most of the staffs who work in Old Town café outlets are foreign worker, not local people,
so it make the customers perceived that it is a foreign worker shop, and the sanitation is
concerned by customers as well.

iii) We found that wherever there is an Old Town White Coffee there will be several
competitors such as Papparich. Therefore, in term of location Old Town does not have an
outstanding competitive advantage as compared with its competitors.
Opportunities:
i) Malaysia polity is considered stable and there are no wars or severe disasters occur in
Malaysia. So, Malaysia providing good opportunity to start up business and company
established in Malaysia is safer compared with other countries which occur natural
disasters frequently.
ii) The CSR program supported by government is offering tax incentive to company
which participant on it. Thus, it could be an opportunity for Old Town to get tax
incentive by fulfilling requirement at above.
iii) The increasing standard of living and the purchasing power of Malaysian can actually
predict the growing demand of quality foods in the future, which Old Town can offer
its unique white coffee to enhance its brand name and company’s image from now.
iv) White coffee is a very popular product that gradually accepted and consumed by
more and more people especially in China. Therefore, there is a golden opportunity
for Old Town to introduce its renowned white coffee to this large market.
v) Advanced logistic technology allows Old Town to distribute its coffee to worldwide
but not only Malaysia. For example, Old Town is exporting its branded white coffee
to 13countries worldwide [Old Town White Coffee, 2011].
vi) The new technology of packaging design and types are offering simplicity, cost-
reduction and material saving while the benefit of quality, convenience,

environmentally friendly are maintained. So, Old Town can design its packaging with
new advanced technology and increase customer purchasing desires.
vii) Old Town Group chairman DatukDr Ahmed Tasir Lope Pihie said Old Town
restaurants had acquired the “halal” certificate from Islamic Food and Research
Council Asia [the malay mail, 2010]. Thus, it is a great opportunity for Old Town to
expand its business to Muslims’ market.
viii) Old Town is providing Franchising to seek business partner. This is actually a useful
method in expanding business and increase market share. Other examples of using
Franchising to expand business are McDonald and KFC.
ix) The increasing awareness of nutritious and healthy foods is an opportunity for Old
Town to design and develop healthy foods to meet health-conscious customers’ needs.
This will be the trend in future and Old Town should focus on quality of foods as well
as low fat healthy products.
x) Strong bargaining power to buyers might be achieved through providing value added
services and quality products at competitive prices. By achieving it, customers are
loyal in buying and drinking Old Town white coffee due to trusted brand name and
they will not simply switch to another brand or substitute products.
Threats:
i) Malaysia labor cost is considered low compared with developed country; therefore it
attracted foreigners to set up business here. However, the announcement of minimum
wages might increase labor cost and giving negative impact to Old Town.

ii) The threat of the occurrence of financial crisis may give negative impact to the whole
world and affect trading and service industry in Malaysia. If it happened, people will
be pessimistic to future and probably reduce their spending; this will affect Old
Town’s profit eventually.
iii) Food price inflation is a major problem to food industry where it will reduce
consumer’s purchasing power and affect company’s profit. Thus, national
government should find out remedy to reduce food price and keep it on a reasonable
level. For example, more research and investment on agriculture sector to increase the
supply of foods or set some restrictions on speculating commodity.
iv) Food industry has low barriers to entry compared with other industry that may need
advanced technology or huge startup capital. In a way that there are plenty of
competitors in this industry and competition is intense.
v) Basically, people who are not used to drink Old Town white coffee will simply
switch to buy another brand of white coffee if the price increases. Therefore, Old
Town bargaining power to buyers is weak and switching costs are low.
vi) Threat of substitutes is another issue faced by Old Town that other beverages are
grabbing its white coffee market share such as Tea and Milo. By boosting healthy
lifestyle, the nutritious products may also give negative impact and only people who
are used to drink white coffee have less impact on substitute products.
vii) Competition rivalry is high in food industry as low barrier to entry, weak bargaining
to buyer, product undifferentiated, threat of substitutes is high and the competition
will be intense. Therefore, if one starts to do certain changes, the rest have to follow

or it might lose market share. For example, one company introduce a new healthy
lunch set to the attract customers and other may have to follow.

3.0 Chapter 3: Strategic Issues and Recommend Options
Strategy Issues:
1. Existing in an intense competitive environment.
2. Quality control problem on its products.
3. The low bargaining power to buyers will leads to the issue of being easily replaced by
competitors.
Strategy Priorities:
Issue 3: Low Bargaining Power to Buyers.
Strategy Options for Issue 3:
1. OldTown can enhance existing products and services quality as well as
production process to reinforce market share, invent and launch new product to
attract new market segment.
- Reinforce core product
2. OldTown may launch new promotion and events to attract customer.
- Everyday most valued
3. OldTown should carefully expand their business to adjacent markets
- Franchising
4. OldTown has to improve on human capital training system.
- Incentive scheme
5. Rebranding OldTown image for new segment

Option 1: Enhance existing products and services quality to reinforce market share as well as
launching new product to penetrate into new market segment.
 Resource: The cost of research and development will be substantially high, for instance
time, money, human resource, however it cost very much but product development is an
anchor for the company to succeed. (Rating=6)
 Acceptability: The stakeholder of the company regardless of internal customers or
external customers is always welcome the launching new product, initiative in inventing
new product is a good sign for a company to being competitive in the industry. (Rating=8)
 Consistency: To continuously improve on quality of Old Town’s products is the first
intention of its founder to provide the finest coffee in town. (Rating=8)
 Effectiveness: In food and beverage industry, what make a company stand out among
others is always its foods and services provided. R&D in this area will give company a
huge advantage over its bargaining power eventually. (Rating=9)
 Sustainability: By implementing this strategy, reinforce existing products and develop
new market such as providing service like delivery will definitely enhance the company
sustainability in the industry. (Rating=3)
 Evaluation: This strategy is effective to solve the current issue at the time being however
products and services in food and beverage will be substituted easily by competitors.
(Total rating=34)

Option 2: Launch new promotions to attract customers, such as everyday most valued.
 Resources: OldTown having sufficient resource to introduce everyday most valued meals
to its customers. (Rating=8)
 Acceptability: OldTown management and employees might accept this move as the
benefit is larger than cost. (Rating=7)
 Consistency: Company’s image and goal will be consistent which is to promote and let
everyone enjoy every sip of authentic Malaysia Ipoh White Coffee. (Rating=7)
 Effectiveness: By adapting everyday most valued, it will attract customers not only just
taste the valued meals but they may also order other foods and beverages with normal
price. (Rating=8)
 Sustainability: New promotions will create value to OldTown but it may easily copied by
competitors. (Rating=2)
 Evaluation: Worth considering as the resource is adequate and the result might be
effective.(Total Rating=32)
Option 3: OldTown should carefully expand their business to adjacent markets.
 Resources: Old Town has sufficient resources in business expansion, but they should
carefully provide the resources (such as Franchise Consultancy, Outlet design and
construction, Outlet Set Up, Menu and recipes, Kitchen/ Toast/ Beverage training) to
those franchisees who want to buy the OldTown franchising. (Rating=7)
 Acceptability: Old Town management and shareholders might accept that increase the
minimum requirement (such as investable net worth of RM1 million for each outlet with

strong team to manage outlet) in franchise opportunity will filter out those low quality
franchisee candidates, and improve the branding. (Rating=5)
 Consistency: This strategy is considered as fairly consistent with the company major
objective as to maintain its company goods and services’ quality by expanding the
franchise with due diligence. (Rating=6)
 Effectiveness: Franchising is one of the most effective ways to expand business.
(Rating=8)
 Sustainability: Franchising business has recognized as a sustainable business model by
many entrepreneurs and corporations as long as the company can continuous
sustainability to preserve their competitiveness while carefully expanding the business to
adjacent markets. (Rating=8)
 Evaluation: This is a considerable strategy if it is done cautiously through franchising
and it is deemed to be a sustainable option. (Total rating=34)
Option 4: Old Town has to improve on its human capital training system as well as motivate its
employees through the implementation of incentive scheme.
 Resources:Old Town has the competences to fund the training program, and the
bonus only occupy small amount. (Rating=8)
 Acceptability: Some employee may don’t want to join the training program.
(Rating=5)
 Consistency: It can help Old Town build the image and reputation. (Rating=7)
 Effectiveness:It may take long time to train the employee, after trained employee
may leave the company. (Rating=4)
 Sustainability: It is easy to be copied by other competitors. (Rating=2)

 Evaluation: This option can be considered as a possible component of a broader

package (Total Rating=26)
Option 5: Rebranding Old Town image for teenagers market.
 Resources: Old Town needs a lot of resource to renovate the outlet shop to attract
teenagers. It is because Old Town is only for old ages people to go in many people
perception. (Rating=3)
 Acceptability: Old Town management team and stakeholders might consider this option.
(Rating=5)
 Consistency: Company’s image will be consisting with other company strategies and
objective. Company also enter a new market segment and get new customers base.
(Rating=7)
 Effectiveness: After adapting this option, company will has a new image and it might
attract teenagers to consume in Old Town. (Rating=5)
 Sustainability: It is sustainable if Old Town has the resources to advertise, renovate
outlet and rebrand. Other competitors might not have enough resources to copy this
strategy. (Rating =5)
 Evaluation: It is an achievable option and the return is acceptable also. (Total Rating=25)

RACES Rating
Options R A C E S Total Rating Option Suitability
1-R&D 6 8 8 9 3 34 68%
2-Promotions 8 7 7 8 2 32 64%
3-Franchising 7 5 6 8 8 34 68%
4-Training system 8 5 7 4 2 26 52%
5-Rebranding 3 5 7 5 5 25 50%

4.0 Chapter 4: Conclusion
After our intensive evaluation and analysis onto the company SWOT analysis, we found out that
the first and foremost critical issue of Old Town that need immediate attention will be “The low
bargaining power to buyers will leads to the issue of being easily replaced by competitors”. As
we have discerned the core issue, then we come to a conclusion of implementing option 1, 2 and
3 concurrently. The reason behind of this implementation is due to its advantage onto the
company overall performance as the options are complementing each other. Meanwhile, these 3
strategic options are not contradicting with each other at all in addressing the issue of Old Town.
Let us put it in this way, the very prior issue of Old Town is its low bargaining power to buyers.
Therefore, research and development on its products and services will be the kick start of this
whole integrated strategy. However, without effective promotion, any new or devised products
will be doomed to fail. Moreover, a very careful and thorough examination due diligent is
needed on its current as well as coming franchises will be the cornerstone of the whole strategy.
Last but not least, we believe that this integrated strategic option will bring Old Town to another
new height in the near future.

5.0Bibliography
 BERNAMA (2010), Old Town White Coffee open to Jakim check on ‘halal’ status
[online] accessed on 7 Nov 2011, available at: http://www.mmail.com.my/content/46243-
old-town-white-coffee-open-jakim-check-halal-status
 Food Future 2011 (2011), Overview [online] accessed on 6 Nov 2011, available at:
http://www.mifb.com.my/2011/foodfuture/
 Maybank IB Research (2011), OldTownBerhad[online] accessed on 3 Nov 2011,
available at: http://maybank.xinhua08.com/yjbg/201106/P020110630455870976339.pdf
 Malaysia-German Chamber of Commerce & Industry (2010), Market Watch 2010- The
Food Industry [online] accessed on 3 Nov 2011, available
at:http://malaysia.ahk.de/fileadmin/ahk_malaysia/Dokumente/Sektorreports/Market_Wat
ch_2010/Food_2010__ENG_.pdf
 OldTown White Coffee (n.d.), Company Profile [online] accessed on 3 Nov 2011,
available at: http://www.oldtown.com.my/
 OldTown White Coffee (n.d.), Social Responsibility [online] accessed on 3 Nov 2011,
available at: http://www.oldtown.com.my/

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BFNPI MGT 4201 8P1 Group Assignment

1.0 Chapter1: Introduction and Company Profile -------------------------------------------------------2

Strategic Management Page 1

1.0 Chapter1: Introduction and Company Profile

Strategic Management Page 2

1.1 Vision and Mission of Old Town:

Vision & Mission

 As a Market leader, we take pride in distinguishing ourselves to be ahead of the pack. By

brands to do the same.

 We strive for continuous improvement, incorporate innovations and technology in our

commitment to create customer value in our both products and services.

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1.2 Social Responsibility:

Child Care Fund (OCAF) Earth Care

Established on 14th June 2008 for Educate community to have

giving a helping hand to the society environmentally intelligent practices

Goal: To accommodate 100 children with a variety of green initiatives.

homes Engage in green events and activities to

Children Care Fund (OCAF) community to be environmentally

Encouragement to those children who conscious ( Old Town, no date)

lives in children homes of wellbeing

where having directly impacts on them

Actively search for approach to help up

to those underprivileged children from

different children homes around

Malaysia to have better lives

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2.0 Chapter 2:Internal and External Analysis

2.1 Internal Factors:

Butter Toast and Omega Soft Boiled Eggs).

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

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continuously improves the customer experience.

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

chain hence allowing them to have exceptional pricing power.

reasonable price [Old Town White Coffee, 2011].

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providers as well as other coffee beverage resellers.

Pricing strategy that emphasizes on the services and environment.

business opportunity area.

compared to the less be seen.

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

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meanwhile minimizing the meticulous management of geographically dispersed

cultural dissimilar market.

provides competitive advantage to the company.

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

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

2.2 External Factors:

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

food products can be consumed by Muslim only it certified “halal”.

 Malaysia government offering tax incentive to business that implementing Corporate

cultural programs, reduction in greenhouse gas emissions and investing in local

positive effect to company.

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

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

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

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

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

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

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