PREPARED BY :

BUN()
AMZAR()
IFFA ATIQAH ()
AZRIN ASYRINI BINTI MOHD ATHZAHA (62211115694)

MAJOR STRATEGIC ISSUES

THAT THE COMPANY FACE

1. FRANCHISING
Achieve the rapid and low-cost market expansion
Inflow of franchise fees
Achieve global presence quickly
Reduce the risk and cost of doing business via
franchising
Establish as master franchisee in other markets

ISSUES THAT COMPANY FACE

THROUGH FRANCHISING
Many

laws

and

regulations

implied

on

franchising
The

franchisor

shall

satisfy

the

'2+1'

requirement in order to develop a franchise in

china
Franchisor need to own two outlets of the
franchise business for more than one year.

 The Kazakhstani entrepreneurs find it easier to work

with Russian franchisors instead of other countries
franchisors
This is due to both Kazakhstan and Russian share
the same language and similar tastes, ultimately
reduce the localization costs in setting new franchise
would be a threat for Old Town to expand its
franchise into Kazakhstan

2.EXPORTING
Mode of entry to expand to other countries.
Success to expand its brand
Commenced the first export of 'OLDTOWN'
brand

of

3-in-1

instant

coffee

mix

to

singapore in 2001.
Success to expand the export markets to over
13 countries

 To increase sales and profits by fully utilize the use of

existing capacities
Gain new knowledge and experience about the foreign
countries technologies, marketing techniques and foreign
competitors
Obtained the HALAL certification from the islamic religious
department of perak for the group's beverages in 2002
Provides extra opportunity for old town to export the
coffee mix to islamic countries.

ISSUES THAT COMPANY FACE

THROUGH EXPORTING
To handle all the logistic of the transaction
and spend extra costs to export the products
Need to pay attention on the costs from high
tariff barriers which set by the particular
nation.

STRATEGY
APPLIED TO THE
COMPANY

1.Product Strategy
2.Major Brand Strategy Decision
3.Pricing Strategy
4.Promotions
5.Place

Product Strategy
Product Classification
Product and Service Decision

Major Brand Strategy

Decision
Position their brand at the level of product attributes and belief
and values.
Brand name selection
Can use in many foreign countries and easy to pronounce,
recognize and remember
A manufacturer's brand
Using line extension as their brand development
Is introducing many different flavor of white coffee in an existing
category.

Pricing Strategy
Skimming pricing
Implement the competitive pricing in order to gain
the competitive advantages and market share
Promotional pricing strategy
Temporary reduce the price to attract more
consumers.

Promotions
Serving the coffee in package to be selling in
those supermarket and convenience stores
Advertising on facebook to advertise their new
outlet's location as a reminder to customers.

Place
Using direct channel to establish a sales contract
by carries goods
Using retailer channels
Selective distribution of channel intensity as a
market coverage strategy
Strategic location

ISSUES THAT THE

COMPANY MUST
TACKLE NOW TO
PLACE INTO THE
BETTER POSITON IN
FUTURE

1. JOINT VENTURES
Establishment of a firm that is jointly owned by
two or more otherwise independent firms
With chatime in Australia
Getting local partner's knowledge
Will face lots of barrier to entry to the new market
Costs and risks of opening a foreign market are
shared

 Reducing the necessary costs

Allows Old Town to learn about a new market
environment
Can success to become an insider in the country
Improve the image and reputation
Can penetrate to other foreign market in future
with easier way and reduce lots of entry barriers
Building up their brand name

2. STRATEGIC
ALLIANCES
As an entry mode to foreign countries
With China
China businesses are stable and growing
Intends to replicate the popularity of its coffee
brand

 Demands of Old Town FMCG products remain

tough
Prospects seem capable at this point in time for
penetration
Ensure its company foundation can be strongly
build
Forming a strategic alliance with Secret Recipe in
China