Mie Ayam Muti Business Plan, Assignments of Business Strategy

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Strategic Management: Essay 1

Bayu Pranandito

R2008D

Mie Ayam Muti: Halal & Healthy Chicken Noodle

Dr. Bijay Kandel

February 14th, 2021

1. Company Business Overview Bite & Slurps Corporation is a company that own “Mie Ayam Muti” brand that focus on providing food especially noodles with the best and fresh ingredients mainly from local market and innovative menu that would be offered as special menu outside the regular menu every month with the best presentation and full of taste that attract people to try and come back again. The delicious menu would also being supported by dynamic and fun restaurant atmosphere with modern touch of technologies. With those selling points, it would offer different experience for customers especially in Indonesia. 2. Company Vision and Mission In Bite & Slurps Corporation, we believe that company vision and mission are important part to describe and introduce company value, identity and the purpose why the company do the business (Tankovic; 2013). Bite & Slurps Corporation have a mission to be one of chicken noodle restaurant benchmark in Indonesia then continue to Asia market and with vision to bring and introduce Indonesian chicken noodle into new form that will be recognized internationally. As Balmer (2001) mentioned in Ingenhoff and Fuhrer (2010), we believe that the company reputation plays important role in creating competitive market value along with stake holder expectation on company performance. Bite and Slurps operation scope would cover from dine in meal, take away, delivery and special order for special events with wide market range from child to adult, man and women and vegan and non-vegan. The scope Company revenues will result from:

1. Dine in: is where customer come to restaurant and order the menu they like
2. Take away: customer can order the menu and with simple but special packaging, customer can enjoy the same quality and taste of the menu at anywhere else
3. Online order: As technology become more advance, Bite & Slurp Corporation also adapt to make customer become easier to get every product that being provided by the company
4. Special event order: company also accept order for special event with minimum order required Most of the product will focus on variety of Indonesian chicken noodle. As one of the most favorite food in Indonesia, we believe with consistent improvement and correct strategy, Indonesian chicken noodle can go international as Japanese ramen noodle.

Despite there were several limitations in Bite & Slurps, the company will always seek for opportunity to gain the market share in noodle restaurant industry and keep growing as company. For example, noodle consumption in Indonesia is the second highest in the world that shown on below figure:

With people awareness of healthy food from year to year, Bite and Slurps is confident can fulfill the demand of noodle fans in Indonesia with correct product and marketing strategy. The company will categorize the products based on the taste such as sweet, spicy, salty and combination of three flavors to expand the scope of potential customers. When company can sustain the business in Indonesia, the business will continue to expand to other high noodle consumption country. There will be special market research team to study opportunity for overseas business. As a new business, the threat from competitor will always exist. Bakmi GM as one of main competitor always innovating and upgrade their menu but still maintain the quality of flavor. Bite & Slurps will learn from Bakmi GM case as motivation to internal team to accept the challenges as Bakmi GM has done in the past. The leak of secret receipt of the product is also a threat for business. Therefore, the company applied rule that only head chef who know the secret receipt and whoever proven tried or leaked the secret receipt would directly being fired and facing law sue from company. To be effective on operational scale and limitation of financial resources, the company would not operate in huge organization structure. The needs of new department will be considered or use third party sources. The current organization chart could be seen on below figure:

Global Demand for Instant Noodle Updated on May 11, 2020 In Milion 2015 2016 2017 2018 2019 1 China/Hong Kong 40,430 38,520 38,960 40,250 41, 2 Indonesia 13,200 13,010 12,620 12,540 12, 3 India 3,260 4,270 5,420 6,060 6, 4 Japan 5,540 5,660 5,660 5,780 5, 5 Viet Nam 4,800 4,920 5,060 5,200 5, Source: https://instantnoodles.org/en/noodles/market.html

Country/Region

Source: Author

4. External Analysis In modern business era, the expectations of high quality of product, value for added, services and continuous innovation became the nature of business along with globalization, technology development, competition and culture change (Loukis, Kyriakou, Pazalos, Popa, 2017; Strakova, 2017). The external factors of business would combine and affect whether it was direct or indirect on company performance. Isiac (2014) cited in Jankovic, Mihajlovic and Cvetkovic (2016) mentioned several external factors of company that cannot be controlled from internal side and had impact on company efficiency level such as economy, social, politic, legal, technical and demography. Bite & Slurps as company was realized that external factors change would impact how company would run the business or adapt with new business environment. Bite & Slurps consider political, economy, social, technology, legal and environment analysis or PESTLE analysis is the tools to study how external factor would or could affect company business. PESTLE analysis being chosen because the method has been proved to be used even in strategic industry area. For example in study conducted by Kolios and Read (2013) about renewable energy using tidal energy in UK, it was mentioned to make tidal energy become reality, research and technology aspect played the main role along with the stake holder as the social aspect. The stake holder and industry need to consider from many aspects and calculate the risk. For noodle industry, focusing on restaurant, the PESTLE analysis would be described as follows:

Bite & Slurps Main Chart of Organization

CEO

Administration^ General Mgr Marketing Mgr^ Sales & Head Chef

Special Event Staff Campaign Staff Marketing Line Cooks Preparation Cooks Waitress

Purchasing^ Logistic &

Finance Staff^ Accounting Staff

HR Assistant Mgr

management to avoid pollution. Bite and Slurps only use fresh nature ingredients that easily biodegradable in nature.

5. Management Strategy 5.1. Long Term Objective Bite and Slurps dividing the long term objective into 3 phases. First phase is to read and following market trends in noodle market with unique value of Bite and Slurps corporations in 5 years. The second phase is penetrating market by offering new innovative special menu and way to enjoy noodle. For examples, Bite and Slurps would introduce fushion cuisine between Japanese ramen with Indonesian chicken noodle and Chinese dan- dan mien with Indonesian chicken noodle that will create new sensation of flavor while eating noodle. The third phase is expanding to overseas by opening shop outside Indonesia region. The market will be chosen carefully based on noodle consumption per year, political and economic condition within the country, how local people divine their taste of food compare with corporate product to be modified. To support the plan, company has set financial strategic plan that can be seen in attachment 1 in this business plan. 5.2. Corporate Grand Strategy To achieve long term objective, Bite & Slurps has set company grand strategy. According to Pearce (2011) general strategy is “general approach which guides the major actions designed to accomplish long-term objective of a business”. Therefore, Bite & Slurps is concentrating that the grand strategy must bring output such as:  Bringing good unique value and image for market that attract new people to try the products  Bringing good services that made people come back again to shop  Cost efficiency in operational sector  Increase revenue for company sustainability  Become one of employees most favorite place to work in Indonesia Bite & Slurps believe that product development strategies were align with company objective and would bring maximum result in the future. However, company was saw several type of product development as Anoff and Stewart (1967) cited in Yi-Chan, Tsai, Wei-Jaw and Wen-Chin (2006) stated 4 types of development product as follows:  Pioneer of the market: the company must have proper capability in conducting market research and development in specific product market.

Technological advantages often become the key point to become pioneer of the market.  Follow the market leader: the market leader often is the one who have leading resources in research and development. When the markets for the products show the signal to grow or the demand become higher and higher, the followers of market leader will respond quickly to follow the trend of market.  Application and improvement: when the market has reached its maximum potential, the product would be modified along with customers demand and not so many innovations to maintain cost efficiency for manufacturing and kept the original market.  Imitation: copying the most selling or high demand product as our product as the core strategies. As the new player in Indonesia noodle market and the limitation on financial resources, Bite & Slurps realized it would be very difficult to become pioneer. Therefore, company has chosen the second option to follow market leader for the first 5 years. The company believed 5 years was enough time to really built company strength and value added product which would lead to one of big player in Indonesia noodle market, with advancing technology in production and marketing. 5.3. Short Term Strategies As the long objective mentioned that the company would bring Indonesia chicken noodle to international level, the more detail about operational strategy would be as follows:  The unique value of products were came from internal competition every month where all employee can propose new receipt to be demonstrated and judge by head chef, if the food meet company standard, the winner will get incentive  The server would have training first before start facing real customer, after the training, trainee will have a test about the material they have learned  Cost efficiency were came from reducing waste because of mistake while cooking, negotiation with supplier to get best price and using software system to reduce usage of papers, the comparison between purchased material and product sales will determine how much cost efficiency has been done

 CEO will tell the General Administration Manager and HR Assistant Manager for Head of other departments criteria, and each Head Department will determine the staff criteria to HR Assistant Manager  Finance accounting will strictly record the transaction data whether it is purchase or sales for comparison indicator between Head Chef and Logistic and Purchasing Department. Finance and Accounting also responsible for price calculation including the tax for product price competitiveness consideration  HR Assistant Manager will set up company rules for employee based on discussion with each department and approved by General Administration Manager and CEO  The Sales team is looking for partner on each province in Indonesia and convince them to have cooperation with the company

7. Policies, Control and Continuous Improvement Policies of authorizations in Bite & Slurps are adopting decentralized system, which mean up to some limit, the head department could make decision without CEO approval. For the constructive flow of decision and controlling would be explained as mentioned below:  For purchased goods value not more than $1,000 could be directly without CEO approval by filled form of purchasing application to Logistic & Purchasing Department and approved by General Administration Manager. All original documents including invoice from vendor must be given to accounting department to be recorded in system and documented  Any cooperation with external entity must be based on contract written and approved by both side (Bite & Slurps CEO with client) and already reviewed by Finance team for financial and tax perspective  For stock of goods will be checked by finance team and the actual data must be same as stock record data from Purchasing department  Financial data would be the benchmark for decision making and only actual data with evidence that can adjust the financial data

For continuous improvement, the company would conduct yearly financial audit using external resources in order to get independent suggestion from professional. The company would consider the suggestion and communicate with related department as real action of continuous improvement.

8. Conclusions In today’s era, the company strategic management plays the key role. The company vision and mission became the general road map about why the business existed and what company wanted to achieve in the coming years. The long term and short term strategies are the interpretation of company vision and mission from the timeline until operational level. Bite & Slurps was the cases about new company that saw the opportunity from external environment where Indonesia was the second largest noodle consumptions, the regulation was not so complicated and the society that look for more healthy food. Bite & Slurps strategy also depend on cross functional between departments to strengthen company from the inside. The delegation of authorization and policies that applied would have significant impact to how smooth operational could be done, while it was also as the controlling tools for internal organizations in order to provide continuous improvement. However, the calculation that provide in this business plan might not cover all variable cost that might occur during the process of operational of company. It also did not consider PDB for specific area in Indonesia and also inflation rate. The calculation used really conservative method to eliminate too many variables that might cause confusion for decision making. In the simulations, the company left many cash from beginning investment due to rate advantages where the author converted Indonesia local current price from IDR to USD.

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