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4. Economies of scale (e.g. inflation) 5. Small scale competitors 6. Legal Implications ST Strategies Be consistent with CSR, service and food standard to boost branding and to prevent smaller companies from gaining foothold in this industry and become a potential competitor [S1, T1, T2, T5] Retraining of all staff to ensure protocol is met and customer service standards should not be compromised. [S6, S8, T3] Maintain regular spot checks on quality control at production plants. [S6, S10, S11, T3, T6] WT Strategies Form strategic alliances with strong companies in other countries, to expand into new markets (W1, T4, T6)In-depth market and industry analysis to ensure brand image will not be tarnished when franchising outlets. [W1, T4]
22 6.Objectives Long-term goal: 1) To achieve a significant value in the mind and heart of the consumers such that it becomes the number 1 sushi choice. 2) Continuously gains brand recognition and market presence globally. Short-term goal: 1) To increase net profits by 10% within 1-5 years. 2) To enhance competitive edge by brainstorming on new products that other competitors do not offer. Profit and Loss2011S$’0002012S$’0002013S$’000Sales89,16995,86099,976Will increase Cost of goods sold(26,359)(27,116)(27,817)Likely to increase Gross Profit62,81068,74472,159Will increase Less: ExpensesAdministrative expenses:(36,708)Other operating expenses:(25,373)Non-operating expenses:-Total: 62,081Administrative expenses:(39,427)Other operating expenses:(24,710)Non-operating expenses:-Total: 64,137Administrative expenses:(42,308)Other operating expenses:(24,899)Non-operating expenses:(1,589)Total: 68,796Will increaseDue to the incurred of non-operating expenses starting from year 2013.Net Profits7294,6073,363Likely to decreaseSakae Holdings has to increase their net profits to achieve the long-term goals. As such, the firm has to decrease their cost of goods sold and non-operating expenses. Due to the non-operating expenses incurred in 2013, Sakae Holdings’ net profit dropped in year 2013 when it has been steadily increasing. Thus, it would be ideal if Sakae Holdings decrease their non-operating expenses as much as possible to maintain their increasing net profits. The increase in profit surplus can be used to create new values; thus giving Sakae Holdings a competitive advantage. The profit surpluses could be invested in marketing such as contracting a marketing consultant to analyse consumer’s purchasing trends, and design an advertising campaign which creates a distinctive image of Sakae Holdings to the consumer mind. Therefore, the surplus profits for innovation will be able to attract consumers and in turn, achieve the long-term goals. Good. Well justified objectives
23 7.Recommended Strategy 7.1.DIRECTIONAL STRATEGY - International Expansion As Singapore’s market provides limited further opportunitiesfor growth for Sakae Holdings, they can look to expanding overseas to increase their market share, and work towards the attainment of their long-term goal of gaining mindshare and heart share; as well as to spread their brand awareness globally.