Spentrep Case Analysis: Entrep families in Asia by Nel Canta

Entrepreneur Families in Asia

Situation:

                S & P

                Patara and Suthisada, sisters,  and sisters-in-law, Pontipa and Pornpilai, has put up an icecream parlor, S & P Ice cream parlor  in Bangkok. A few years later, S & P has expanded its product line to bakery goods and different restaurants. Kachorndej and Varakon, brothers joined the business during it was starting to expand. The business involves, icecream, breads, Thai restaurant, Chinese restaurants in different areas and Thailand, London, Singapore, Taiwan.

                Melewar Corporation

                Construction company, travel and tours , transportation, manufacturing of computers and investment holding companies established by former politician, Tunku Abdullah. He turned over his legacies to his children.

                Blue Bird and Big Bird, Cassava and Compressed Natural gas

                Ibu Matiara, owner. Ibu strived hard to raise her children since his husband died. Fortunately, the businesses she started has grown.

Problem:  -no major problem and issue at all.

Analysis:

Family conglomerates have their own core gifts that should put on the right character.

Decision:

Follow the arithmetic of family conglemerates

Action:

S & P

 Lessons from the arithmetic of family conglomerates; The Entrepreneurial clans of asia case study by Prof. Eduardo Morato

"Add enterprises to provide opportunities and elbow room for the family members"- a family business that has grown into different industries gives opportunities in terms of new products and innovations in the market, job opportunities and areas to grow more.

"Multiply to create critical size, market clout and competitive advantage"- go into branches to different strategic areas. The brand presence in different areas creates a strong clout, and competitive advantage.

"Subtract to rationalize, cut losses.." – lessen the losses by cutting it, before its too late. A takes risk should also be carefully calculated. Know when to stop already.

"Divide to keep peace and unity among the family, pass on the legacy to the next generation and demarcate distinct areas of responsibility and accountability"- sharing and turning over the legacy of a successful business to the next generations is building a brand which will last long and that people will continuously trust. Delegate to the capable and more talented others. Every entrepreneur has their own core gifts. Let the family members with fitted talents on respective businesses handle it and thrive it more.

Three Entrepreneurial Clans in Asia: The Addition, Multiplication, Subtraction and Division of Family Conglomerates

Situation Analysis

The case described three prominent families in the Southeast Asian region – two matriarchs from Thailand and Indonesia and a patriarch from Malaysia. The case started at the founding times of the conglomerates and showed its roller coaster-like ride throughout the years.

First is the matriarch food business giant S&P. It started as a hobby of the Raiva sisters. The Thai market proved to be a fertile ground for their business. They reaped exponential returns and used it to expand their business. Their strategy was to expand vertically – expand throughout their supply chain. It gave them more focus, control and dominance in their market.

The second family discussed in the case was the Royal patriarchal family of Tunku Abdullah. Although blessed to have been born with a royal blood, he still tried to make a name of his own.  He entered business and politics. Later on he quit politics and focused more on building his business empire. He invested and founded a diverse range of businesses. He journeyed to many business endeavors - the travel industry to the high-tech computers manufacturing industry and almost everything else in between.

The last family featured was the matriarch family of Ibu Mutiara. Their businesses were related to transportation. They started out as a taxi operator then ventured to other related and non-related businesses.

All the families seemed to have close family ties considering their high-profile status in life. They were able avoid serious feuds within their family who are also the top management in their respective companies. All of the succeeding generations were highly educated thus continuity of their businesses was no longer a problem.

Problem Analysis

With conglomerates as big as theirs, strategic decisions are very important. They might have all the resources they need to start any business they want but they need to also consider their current roster of companies to have a more synergic effect. A lack in the strategic planning and placement of their businesses often result in “subtraction” or liquidation like what happened to the Malaysian family who ventured in very diverse and risky businesses. The Indonesian family also experienced this problem when they ventured into agriculture when they were best at managing their transportation-related business. The Thai family showed a good example of how to strategically establish complementing businesses. Lack of market study and knowledge of the technicalities of the business also played a big role. With unlimited resources at your finger tips, it’s very tempting to invest it in any possible business or to anyone with a good proposal.

Alternatives Generation

Here are the alternatives I have thought of:

1.)    Always conduct heavy market research especially when the business is beyond your core competency. With businesses as large as those, growth within your current market is limited. You’re already a dominant player and expanding in your current market might not reap you exponential returns. Having said those, it’s really hard to limit the entrepreneurial spirit of those families especially if they have the drive to expand their money-making empires.

2.)    We see tycoons venture in unknown business territories. It’s what differentiates a tycoon from a regular businessman; you cannot just stop a tycoon or entrepreneur from exploring new ideas and business concepts. To provide them with more confident analysis of their new business idea, they should either conduct heavy market research, as mentioned above, and hire consultant and industry experts or partner with current industry players. Exploring in an unfamiliar territory is tricky and you need help from industry experts and players to get you moving. With their extreme wealth they can definitely afford to hire consultants and invite industry partners easily.

3.)    Do not move into industries they are not familiar with. To save them from unfamiliarity which often leads to high losses, only operate in a market you know very well.

Decision and Action Analysis (Deciding on best alternatives)

It is not impossible to thrive in different industries and markets. In fact, we’ve seen many tycoons become market leaders across diverse industries. John Gokongwei, for instance, has successfully established and managed a leading airline (Cebu Pacific), consumer foods manufacturing company (URC), telecommunications company (Sun Celluar, before it was acquired by Smart) and property development (Robinsons mall and residences) among others. It is possible to operate in industries as diverse as that and still become one of the main drivers and players in each industry. All you need to do is find the right people to help you understand and jumpstart your idea and business. Options one and two above are what I think the three families need to further expand their conglomerates. It’s not wrong to start a company totally unrelated to your previous one. You just have to know the relevant information, technical know-how or just have consultants and industry experts guide you. Stopping at where you are and what industry you play in is not what an entrepreneur aims to achieve. The unending learning and exploring of possibilities will ultimately fulfill a real entrepreneur’s heart; being scared of the unknown is not a characteristic of an entrepreneur. They just have to be cautious in making tough decisions especially when big investments are involved.

I admire how the matriarchs and patriarch of the featured families brought up their children and grandchild. They were able to instill discipline and rapport within their family members. Having weak family bonds and lacking knowledge and education of the succeeding generations will cause their conglomerates to collapse eventually. Good thing they groomed the next generation to become tomorrow’s best tycoons.

Submitted by: The Great White

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. 

Case Analysis – Three Entrepreneurial Clans in Asia – Joseph Cunanan

The entire case talks about how 3 entrepreneurial clans in Asia managed to grow their business through
addition, subtraction, multiplication and division process within their family conglomerates. I like how
the facts of the case were presented in details in terms of how these 3 clans achieved growth within
their line of businesses and penetrated the market of Thailand, Malaysia & Indonesia.

During the addition process, we can tell that entrepreneurs use different approaches in determining the
necessity to expand their business. For instance, if your existing business can be supported by another
product, then it makes sense for you to pursue this product. This is what S&P Ice Cream Corner did.
They started out as an ice cream parlor which offers limited ice cream menus, then slowly transitioned
to manufacturing bakery products then eventually forwarded to distribution and franchising. On the
other hand, some entrepreneurs add new businesses as opportunities come. The new business or
product offering may have nothing to do with the existing one, but since an opportunity comes to take
on a new endeavour, they end up grabbing it. This is what exactly Melewar group did in their business
expansions. Some companies tend to expand their businesses by finding a common denominator with
their business offerings. For instance, if a company caters to clothing lines, then they can expand to
underwear, kids wear etc. In the Philippines setting, i think the perfect example would be Bench, which
started out in offering clothes for males. Then they eventually added up HerBench for women, Bench
Body for underwear, and Bench Kids for infant and children. With relevance to the case, Blue Bird take
on business expansions to anything that has wheels, like cabs, buses, truck s and trailers to cater both
the passenger and non-passenger needs of transportation in Indonesia.

In terms of the multiplication process, this comes to play if your business venture was so successful,
you can end up multiplying in terms of your number of branches and increase in supply chain. In the
Philippines setting, perfect example would be SM and Jollibee where in they have tremendously grown
in number in terms of the nationwide branches. I think wherever you go in Metro Manila, there is a
Jollibee store around the corner, there are even stores located just few kilometres away from the same
street. In terms of SM, all key major cities in Metro Manila has it, like Makati, Manila, Las Pinas, Bicutan,
etc. The growth in number is supported by the level of success in penetrating the target market. In
terms of the case, S&P and Blue Bird both of them have grown in number in terms of supply chain and
number of units (cabs for instance) to gain a full competitive advantage in the market.

When business owners encounter failure in their new ventures, it is important to consider the option
to let go of this business, rather than let it stay longer for so long which might eventually impact your
other businesses or worse, pull down the entire company. This is what Melawar did when they stopped
operating their technology ventures and I think they did a great job in determining this soon. The lesson
learned in this aspect, is to ensure that before you start up a new line of business, you will be able to
address all challenges n the future, and the key is to determine your current strengths and assets and
measure the feasibility to succeed.

In terms of the division of the company, I must say that all clans were successful in dividing the
ownership and accountability of each family member with their line of businesses. They have considered
factors such as function, interests, location and proximity to handle the business and stay successful in
the future. Not only that they focus on the current state, but they also prepare their young children to
take on the responsibility moving forward.

Case Analysis – Red Crab – Joseph Cunanan

I like the way that the case was presented in terms of how the business owner Raymond
Magdaluyo tried to position his restaurants in the market and come up with new and fresh
ideas to innovate his services.

It was very evident that it all started with Red Crab Clark, which back then was primarily being
managed by his mom. I must say that one learning experience of Raymond as an entrepreneur
was when they agreed to open another branch in Malate without doing any market research
or profitability study. This affected his sales revenue in the said branch, but was able to recover
after reinventing the place and call it Red Crab Seafood and Steaks.

I’m very impressed with how Raymond tried to come up with new concepts out of the same
product which is seafood and crabs. I think as an entrepreneur, it is really a must to always
come up with fresh, bright & innovative ideas to capture new market segment and at the same
time win the business proposal to investors or mall owners.

When Raymond opened the Seafood Club in Greenbelt, it was very evident that he made it a
totally different dining experience compared to what he normally offers in Red Crab Seafood
and Steaks. I also like the way that he adapted an idea from the US and bring it home here in
the Philippines.

If there’s one restaurant idea I am most impressed about, that is how he came up with the
concept of Crustasia. It is very clear that Raymond has all the ideas of an entrepreneur in terms
of identifying his target market, the foot traffic in the chosen location, and the strategy to make
the business successful. In terms of making sure that Crustasia becomes successful, he really
focused on the quality of the food. The steps he took to make this happen was amazing. He
went as far as asking culinary experts to come up with at least 300 dishes, have it tasted and
rated by friends, family members and Rockwell goers, and from there identified the best tasting
cuisines to offered as a menu in Crustasia.

Overall, Raymond was very successful in making his company known as the best chain of
seafood restaurants. Each restaurant has their own concept to offer and above all provide not
just quality food, but an extraordinary dining experience. He achieved this by staying true to his
promise of serving the best and freshest seafood coupled by innovative concepts which makes
him a stand out in the market.

SPADA
Situation Analysis (Relevant Facts)
Red Crab – Clark
Red Crab Seafood and Steaks – Manila
Red Crab Seafood and Steaks – Tomas Morato (celebrities)
Red Crab Seafood and Steaks – Alabang young (26-35)

Seafood Club – Greenbelt 3 (awarded thru business proposal
Crustasia – oriental dining experience (Rockwell)
Blackbeard Seafood Island

Problem Analysis
- How to best position their company

Alternatives Generation

Decision Analysis (Deciding on best alternatives)

Action Analysis (This the “tuya” “lait” portion where probing questions determine soundness of
decision made.

Case Analysis - The Red Crab Group - Camille A. Dela Cruz

ENTREP S20

Mr. Jorge Saguinsin

Case Analysis – The Red Crab Group

Camille A. Dela Cruz

I.               Situation Analysis (Relevant Facts)

·       The first restaurant established by Raymond Magdaluyo’s mother and him in Mimosa Pampanga – Red Crab Seafood and Steaks, was very successful despite of no market/ research study.

·       The family of Raymond Magdaluyo adapted the same planning and execution (no market/research study) when they took the opportunity to open a restaurant in Malate.  

·       When the sales significantly declined in the Malate restaurant, it pushed Raymond to do a market research study both in the Alabang and Tomas Morato restaurant. This is to identify who are the customers the restaurant truly caters, to identify what is the real positioning of the restaurant  and to recalibrate his menu to follow his new positioning.

·       Raymond brought his new learning when he was given the opportunity to open a restaurant in Greenbelt 3 – do a market research study before entering into a new venture.

·       The Seafood Club success story was not only because of the food but also because of the experience that comes with it. The restaurant sold its crabs with all the complete paraphernalia.

·       Raymond was again given an opportunity to open a restaurant in Rockwell Power Plant Mall, and he again did a market research study and at the same time used his learning in The Seafood Club, which is not only to sell food but also sell the whole experience. He focused on these four experiences; liberating, enchanting, fulfilling and transformative.

·       His last seafood restaurant concept – The Blackbeard’s Seafood Island, focused on the target market that was identified in the market/research study Raymond did.

·       All of Raymond’s successful restaurants were due to all his learning from his past experiences but also from what he learned in AIM which focusing on a single product, multi concept approach. He focused on seafood but used different restaurant concepts and formats.

·       He also used his most enlightening marketing lesson in AIM, which is the importance of creating his own segment, and to own this segment, he had to define it in finer detail the elements in that segment. He adapted this learning by making all the elements of his restaurants work around the concept/position he has placed.

·       Raymond believed that change is inevitable so he opened up a different restaurant concept which is Heaven N’ Eggs.

II.              Problem Analysis

I believe that the main problem of Raymond was he ventured into the Malate business without doing what was vital and important before starting a business – do a market/research study. The lack of the study reflected on the significant decline of the Red Crab Seafood and Steaks in the month of April. When he started to plan his execution and thoroughly did a market/research study it definitely turnaround the business in Malate, Alabang and Tomas Morato and eventually led to the success stories of his other restaurants. 

III.            Alternatives Generation

Of course there were several alternatives to be done to address the problem Raymond was encountering.

A.     First alternative, he can create a market research study to identify who are the customers the restaurant truly caters, to identify what is the real positioning of the restaurant and to recalibrate his menu to follow his new positioning.

B.     Another alternative is to create a different concept restaurant other than seafood. This concept could be more adaptable to the Malate target market.

IV.            Decision Analysis (Deciding on best alternatives)

In my opinion, it is important to do a market/research study before entering a business venture. The importance of a study is to identify all elements – goal, objectives, concept, positioning, target market, location, pricing strategy, promotion and advertising strategy and staff, needed to identify to create a business that will definitely work and live for a long time. Market/research study is equal to planning and planning is vital to make an execution work perfectly. Planning gives the person a view of the new business as a whole and prepares the entrepreneur for any possible failure. This view provides the entrepreneur to address the seen potential problems and gives him/her to avoid such.

V.              Action Analysis

The decision was definitely the best decision Raymond could have done. In the case, he took time to do a market/research study before his business would fail in Malate. The market researched helped him identify what was wrong in the business. He then created strategies that will help fix and solve the problems of the business, which eventually led to the turnaround of the business. He used the learning in the Malate case and started to plan and create a market study first before venturing into the opportunity presented to him. This led to the other success stories of his businesses.