Chew, Kee Heng
Competing with the Big Boys - Strategies for Growth for a Startup Company in the Singapore Food Industry.
[Dissertation (University of Nottingham only)]
Entrepreneurship provides the basis for satisfying of personal goals and possibly profit maximization; Singapore has a good infrastructure in place to facilitate new business setup and other business functions. Being one of the first few industries that have promoted trade and main revenue drivers, the Singapore Food Industry is in its mature state and entrenched with established big-name global, regional and national players with long histories. But because of its ability to innovate, and with consumers constantly looking for new refreshing tastes, the Food industry continues to be earmarked by the government as the few pillars of growth and therefore has an abundance of opportunities for the entrepreneurially adventurous and hungry (Tan 2002).
But with only a small market of 4.9 million local dwellers, competitive environment in the Food Industry is not for the faint hearted (Ranken, Kill & Baker 1997), while increasingly sophisticated consumers are demanding improved services, varieties, quality and value from food companies. New niche players would thus still be able to carve out a space and enjoy a fairly lucrative amount of return with Singapore’s robust and fairly resilient economy.
This study involves a particular new entrant to the food landscape, Preferred Choice Food Company (PCFC). Supporting only institutional customers, PCFC manages and caters to staff or employee cafeterias, creating a niche for itself in small to medium sized companies, choosing not to go head on with established competitors. Since its inception in 2008, it has steadily increased its food service portfolio to 5 cafeteria outlets and recently expanded its operations to serve the Muslim clientele which makes up about 10% of the overall staff community. With a stable operational footing and resource base, PCFC is now positioned to take the next step forward, focusing on growth and expansion opportunities in the vast food service industry. But being a new startup, immediate growth priorities would have to be conservative, organic and the most natural; which is to be able to maximize current resource capabilities to achieve a competitive advantage in a market that will incur low investment outlay but yet provide good return on investment.
PCFC’s competitive environment was evaluated and through SWOT and Value Chain Analysis, PCFC core competencies of pre-packed sauces, value added activities and ability to keep overheads low was found to have led to its competitive advantage. Added capability requirements were also identified to provide sustained competitive advantage. Expansion opportunities in the food industry from service provision to manufacturing were applied to a competitive analysis matrix derived from Michael Porter’s 5 forces, opportunities were subsequently ranked to determine the most promising path of growth to follow (Tan 2002).
Based on the findings, commercial catering for consumers was the most obvious short term growth plan while packed condiments manufacturing and direct food retail would provide vast and promising opportunities for the longer term. As any startup where preservation of capital and speed of inflow of revenues is the key, the implementation strategy for immediate expansion plans would have to consider activities with the lowest outlay but with the greatest possible return (Ranken, Kill & Baker 1997). Plans for implementation include the most applicable marketing mix, operational and financial requirements for the added capabilities and resources required.
Finally this study provides information on the future steps that PCFC may embark on that could pave the way for sustainable and continued growth required in the Singapore Food Industry.
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