Red Crab Group Case Study by Crissy Cruz

Red Crab Group Case Study by Crissy Cruz

The Red Crab Group started as a small restaurant in Clark Pampanga known for its Crab Recipes and Kapampangan and Filipino Food. When the owners decided to expand their business in Manila and set-up shop in Malate, they discovered the shortcomings of the business particularly the brand's lack of identity. In spite of the initial success experienced by the Malate and the Tomas Morato branches, the owners found out that their product offering lacks focus.

After doing some market research, Mr. Raymund Magdaluyo – Red Crab's owner, decided that to reposition his brand and be known as a Seafood restaurant rather than a Filipino restaurant. Soon after, Red Crab's Seafood and Steaks were able to yield success in its three branches in Manila,

The opportunity to open in Greenbelt and Rockwell has pushed Mr. Magdaluyo to think of novel ways of creating a crab and seafood restaurant that would fit the tastes and expectations of the high-end market. For Greenbelt 3. Mr. Magdaluyo came up with Seafood Club, a casual festive themed restaurant. He envisioned a casual seafood restaurant where guests are relaxed and happy while enjoying their crabs. On the other hand, Crustasia in Rockwell, was born out of Mr. Magdaluyo's vision of forming an enchanting and transformative bistro that serves oriental inspired dishes. More than just a seafood restaurant, Mr. Magdaluyo wanted Crustasia to be a classy place where people will not only appreciate the food but the whole dining experience.

After conquering the high-end market, the Red Crab group turned their attention in developing Blackbeard's Seafood Restaurant which targeted not only the families but also the after-work group of works or the barkada crowd. This restaurant became a place wherein groups of friends can hang out for drinks and top quality grilled seafood and barbecue for pulutan.

With the right formula of proper location, good food, ambiance and value for money propositions, the success of the Red Crab group can also be attributed to effective Public Relations activities. Mr.Magdaluyo established good relations with Celebrities and sponsored their shows and events. He banked on the credibility and popularity of the celebrities that once they say rave reviews about his restaurants, they will be able to positively influence customers to try their restaurants. 

The Red Carab Group has successfully developed a One-Product, Multi Concept approach based on the portfolio of restaurants they have developed over the past years. However, based on their most recent venture, Heaven 'n Eggs – an all day breakfast place, the Red Crab Group is moving on and expanding their horizons. They are now looking into becoming more than a Crab and Seafood Group and evolve into a successful chain of top dining restaurants.

This Case Study has notable points in putting up and managing not just a restaurant business but an enterprise in general. The story of the Red Crab Group has established insightful ideologies to follow:

1. It is important that one must identify the market and what he is selling. A brand should have focus and a clear identity.

2.  There is a challenge to create your own segment and answer the following questions:

•        Where are we going operate?
•       What we are going to serve?
•        What influences them to buy my products or get my services?

3. Given clear market segments, we draw out marketing position of the brand.

4. Based on the story of the Red Crab group it proves that it is easier to look for a perfect location, and then develop the product from there.

5. In developing a One-Product, Multi-Concept Approach, prices are differentiated because of the location of your store.

With the success of the Red Crab Group on its Crab and Seafood chain, I think the main concern that the group is facing is their strategy on sustaining and expanding their business. The challenge is creating new concepts outside of the Crab and Seafood chain and capturing a larger market.

With the addition of Heaven 'n Eggs, the Red Crab Group is now faced with developing and implementing new strategies that can duplicate the successes of the Crab an Seafood restaurants to other concept stores.

I feel that the formula used by Mr. Magdaluyo to propel the growth of the Red Crab Group can be applied to other restaurant concepts. However, their strategy of finding a location first and then developing the business idea afterwards can be a double-edged sword. Without having any concrete business plan in mind, all the work only happens once the location is specified and finalized. Now that they are starting to create new business concepts that is outside of the comfort zone of the Crab and Seafood restaurant, Mr. Magdaluyo should extend more effort in doing market research before jumping the gun on a new concept.

I would still encourage Mr. Magdaluyo in expanding his restaurant portfolio and add more non-Crab and Seafood restaurants. Taking a cue from the Friday's group which include, TGIF, Fish and Co, Italliani's, and Crazy Garlic among others, the Red Crab Group also has the potential to develop individually themed restaurants and be a success. If they will continue sticking to Crab and Seafood themed restaurants, the room for growth is already very limited. 

Fwd: Three Entrepreneurial Clans in Asia Case Study by Crissy Cruz

Three Entrepreneurial Clans in Asia Case Study by Crissy Cruz

The Case Study of the Three Entrepreneurial Clans in Asia featured 3 Family conglomerates from different Southeast Asian countries.

First there was the Raiva Siblings and Spouses of Thailand who had a restaurant and bakery empire. The Raiva's S&P mainly focused on food related enterprises that would support their core business of managing their restaurants and bakeries. For example they ventured into developing the technology of making and distributing frozen food products in order to reduce wastage and extend the shelf life of their food products. S&P had a They also partnered and operated with well-known international food chains and brands such as Pizza Hut, Swensen's in Thailand and Haage-Dazs Ice Cream.

The Second Family featured is Tunku Abdullah and his Royal Brood from Malaysia. Tunku Abdullah enjoyed the advantages of being a royal and had lots of connections that enabled his family to establish Melewar Corporation as one of the biggest conglomerates in Malaysia. Melewar Corporation has diverse interests that range from property development and construction, tourism, transportation, advertising, marketing and public relations, and TV broadcasting.

Finally, the Third family is Indonesia's Ibu Mutiara Djokosoetono and the rest of his clan. Ibu Mutiara Djokosoetono established the Blue Bird group which initially featured transportation services and later expanded to non-transport services like manufacturing of engines and spare parts of their fleet vehicles in order to stretch their supply chain and resorts that are considered as passenger destinations therefore boosting their transport services business.

The Case Study rationalized the actions of these three conglomerates and discussed them according to theories of Multiplication, Subtraction and Division process in managing their businesses.

All conglomerates practiced addition and multiplying their business ventures in various manners. The Raivas have done it in a more focused and concentrated manner that supports their core business of restaurant and bakery operations. The Melewar group had a "shotgun approach" and grabbed every opportunity that seems viable. They classified their businesses into industry groups, Travel and Tourism, Insurance, Manufacturing, Shipping, Security, Property Development, and TV broadcasting.  For the Blue Bird group of Ibu Mutiara Djokosoetono, it can be noted that their businesses don't really have market focus but instead just a common denominator. All enterprises are related to various modes of transportation and anything that supports its operations and possible expansion.

Out of the three conglomerates, the S&P group didn't had to prune much of their collection of enterprises since they have been very conservative in their expansion activities and only choosing to add companies that would be beneficial to their original core business. However, the Melewar group's shotgun approach had le them to encounter some failed ventures in computer manufacturing and agriculture. These two businesses required heavy R&D and complicated production process, In order to recover losses the Melewar group decided to let go of these businesses and further sell their TV broadcasting company.  The Blue Bird group also weeded out their agribusiness which is a far-fetched business concept from their transportation related businesses. This only goes to show the importance of venturing into enterprises that are outside of the organization's core competencies and other strengths.

As a conglomerate ran by families, the different companies had their own styles of management that involved immediate family members.  Expanding the business was done not only to ensure further income and growth for the company but also to make sure there is enough to divide among family members. It provides opportunities for everyone to participate, pass on the legacy and perform specific areas of responsibility.

With all these in mind, which among the three families has exercised the best strategies in expanding their businesses. I admire the Raiva's S&P group in sticking to what they do best and building the foundation of their business empire based on the requirements or what compliments their bakery and restaurant business. This shows an example of good personal mastery. The Melewar and the Blue Bird group took a different route and expanded their business with investments in fields not part of the same market. Not all the risks they took paid off and some enterprises had to be cut. Those failures do not merit a conclusion that Raiva's S&P group made better management decisions. I believe that entrepreneurship is about taking risks. Melewar and the Blue Bird Group grabbed opportunities and made the most out of them.  The failures that they encountered were just bumps on the road and what's important was they knew how to let go of the things that operated below their expectations. Again, this is another example of self-mastery. We learn by knowing ourselves and by the mistakes that we have done.

In the Philippines, it is evident among the big conglomerates made up by the Sy's, Gokongwei's and the Tan's that their interests are all diverse but in a way related to one another. It is not imperative for conglomerate to just stick to one core business as long as they are able to manage well their enterprises and are adding to the over all profitability of the group. Diversification can also protect the company in losing a lot of resources once one of the industries collapses. A diversified conglomerate would give them power and control over more markets. In return, these interests will pay off by opening new doors and opportunities for them to grown as a conglomerate and be one step ahead of competition.