Case analysis by Alvin Bilolo - The Entrepreneurial Clans in Asia

THE ENTREPRENEURAL CLANS IN ASIA: The Addition, Multiplication, Subtraction and Division of Family Conglomerates - Alvin Bilolo

Situation Analysis

The three entrepreneurial clans in Asia gives us a lot of ideas and insights with what was happening in a usual family conglomerates. There are indeed additions, multiplications, subtractions, and divisions that are happening within those corporations. These corporations should then be united in order to maintain the ownership of the businesses that was established by their forefathers.

The Raiva siblings and their spouses of Thailand, Tunku Abdullah and his royal brood of Malaysia, and the three generation lineage of Indonesia’s Ibu Mutiara Djokosoetono ‘s stories gives us an insight that indeed businesses were passed on to their next generations in order to maintain ownership and control of the company. This is also done since the name of the founder usually serves as a trademark of their businesses in the long run. This is true for an instance since the successes of their forefathers are usually associated with the success of the successors in particular fields.

Problem Analysis

The usual problem for a family conglomerate that is common with the three entrepreneurial clans in Asia is the challenge of keeping the business alive and within the control of the members of the family (their supposed to be successors). For once, businesses such as the one tackled in this case were established to last for the benefit of next generations. There is indeed a problem of transferring the management of the business to their successors and keeping it alive and productive.

Another thing that is worth noting here is the challenge of improving the current set up of the business, its operations, managements, and products by its successors. Those successors usually have a greater responsibility to meet the expectations of the public – expectations that was set by the founders of their conglomerates.

Alternative Generation

The three families have different strategies in transferring the businesses to their next generation. The Raivas added more enterprise to their conglomerate by exploring different related industries such as restaurant and bakery business. They have their focus in business and they prosper what they know to improve the operations. They have multiplied their business in a more concentrated manner and focus on their core restaurant and bakery operations. They have eliminated those cost that will tend to pull business operations and put more emphasis on effectiveness and efficiency. They disseminate their businesses according to functions and product lines. In this way, members of the family can freely choose as to what department they are willing to handle. With this, they will have what they want and will be able to focus on their line of interest.

The Melaware group on the other hand adds enterprise using a shotgun approach. They are getting every opportunity that came their way wherever they may be coming. Tunku Iskandar and Tunku Yaacob expanded their respective empires through acquisitions and natural growth. This opportunistic and aggressive approach bound them to some failed projects. Nevertheless, this family conglomerate had the strategy of keeping the ownership of their companies within by holding 80 percent of industry groupings that they have. They were able to obtain additional capital by selling 20 percent of their company to others, which will then benefit them as a whole since new ideas may come up. In times of need, they may then immediately buy the 20 percent minority stocks from others.

The conglomerate of Ibu Mutiara which is ‘Blue Bird’ then straddles on the two extremes. This family really has no focus on what business they want to stand on. Their businesses just lay on common denominator which is wheels and whatever is attached to it. Growth is then limited and not diverse. Because of the focus that they have, they prosper and multiply a lot. Unlike the two families earlier, Ibu Mutiara ensures that every member of the family will have a piece of the pie. Everyone will benefit from the business. Though her three children are all professionals and need not manage the business, she still pursues and even trains her grand children to manage the business. She strives hard to transfer the ownership to her next generations.

Decision Analysis

The entrepreneurial clans in Asia are all successful in their own rights. However, to continually improve their operations and businesses, as well as to transfer it to their next generations, they should focus on their market and strength. They should not go beyond their competency and should continue to transfer their vision and mission to next generations. All members of the family should keep their focus and think of ways to improve and prosper the business ideas that they have. With this, family conglomerates will then be sustained for long period of time.

Action Analysis

At the end of every alternatives and decisions enumerated above, family conglomerates will always be influenced directly and indirectly by the charisma of patriarch and matriarch. This is the first factor that may cause success or failure of the existence and transfer of conglomerates. This will also be influenced by the education and professional independence of the second generation, as well as proper briefing and transfer of knowledge that they have to the next generations. It is very vital then that all knowledge and techniques be transferred and honed. This will keep the business going and will keep the ownership to the family for a long period of time. Everyone should take personal accountability and should not take for granted the effort and strategies set by our forefathers.

Three Great Entrepreneur Guests of MBAH 10B, March 23, 2013 all agree - new ideas propel business

Rm 210, APS Building, Rockwell Center Makati City March 23, 2013

                                 Nelly See -from Mom to Mall retail tycoon


The MEntrep Class of MBAH 10 B on its last session had three great entrepreneur guests:   Nelly See of Pink Box,  Dr. Gary Bunagan of  Green Bean Organic Coffe Corp, and Raymund Arnold S  Alberto of RASA Surveying

They were all great entrepreneurs who had something great to share with the entrepreneur wannabees in the class.  It was too bad it was the last day of class.  Each one should have at least 3 sessions with the class;  but then again we had to pay them.

Nelly See did not have any power point nor notes but she was very comprehensive and very detailed on how she started her business out of desperation just to sell/get rid of  P762,000 worth of hair accessories that were mistakenly ordered due to language difficulty.  She said she applied to MBE.  My remark was that she did not need this.  She might need it for certification purposes.  But the fact that she has 30 corporate store and more than 40 franchise means she does not need MBA. { Maybe ACE/MBE should give her instead a doctorate honoris causa instead)

Dr. Gary Bunagan seem to be approaching his coffee beans like a serious hobby.  Still he could not leave the opthalmologist profession behind.  But the amount of time and the study that he put into the green coffee beans, and the kind of expansion they had undergone: to TMC, to H2 hotels, having SPA on the second floor of a building.  Having branches in Davao, exporting Cacao to Europe, giving jobs to San Isidro farmers in Isidro Davao Oriental (fortunately I saw the large cacao plantation there and Nestle purchasers told me, it is not worth their while to buy cacao from there)

RASA headed by Raymund Arnold S Alberto, brod of Bong Villamor at UP ME frat is the leader in surveying in the PHL, even employing a drone to conduct aerial survey.  He has a gone a long way from just dreaming to set up his own business on the way home to Ilocos after graduation. That was his only resource:  his Dream and his Passion to Achieve it.

Did the class note something very common among the three?  Yes it is about innovation.  New ideas daily... Nelly had to sometimes wake up her GM during the unholy hours lest she forget the new idea. Gary had to think of other opportunities to increase revenues and expand.  RASA always attend conventions abroad to be abreast of leading technology.  And yet we only have one new idea weekly....

Thank you guest entrepreneurs for great sharing.

Nelly See 

                                    Nelly See poses with her sponsoring group

                               Nelly See - are entrepreneurs born or made?

Dr. Gary Bunagan, eye Doctor at St Lukes Medical Center

                                Nelly See listens to Dr Gary

                                  Learning from great stories and books

 

                        Other book mentors of Dr. Gary;  try to read them esp Rules of Thumb

                      Awarding of Certificate of Appreciation and tokens, Dr. Tamayo is an investor

Raymund Arnold  S. Alberto

                                  UP brods:   RASA and Bong

                                   Picture with the sponsoring group (sorry it is blurred)

Sentrep CASE ANALYSIS: The Red Crab Group – Kevin Toledo

CASE ANALYSIS: The Red Crab Group – Kevin Toledo

Situation Analysis – Relevant Facts

Red Crab Group started from the first restaurant opened by Raymond’s mother in 1998 at Clark, Pampanga. Red Crab eventually expanded to Metro Manila and has been successful in developing its business of chain of restaurants.

 1998: Raymond’s mother opened the Red Crab & Sea Food Restaurant at Clark, Pampanga in the Mimosa Leisure Park. The price of the food was in the high end as its market was golfers, casino players and high rollers.  

1999: Red Crab and Seafood Steaks was opened at Malate. There was no market research done and sales went below 30% 

2001: Red Crab Seafood & Steak at Tomas Morato was opened where surprisingly it captured the “celebrities” as its market.

Another Red Crab and Seafood & Steaks branch was opened at Alabang. This time, Raymond started to do market research. In this venture, he realized that his market was in the 26-35 years age bracket. He then adjusted the ambience of the Alabang & Morato branch to fit younger crowds. 

Raymond also did repositioning of the brand where he downplayed the Filipino branding and focused in the “International seafood restaurant feel”. He also recalibrated the menu.

2003: Seafood Club was opened at Greenbelt 3. This required Raymond to develop a new concept where the restaurant was intended to be a happy place to entertain customers.

2004: Crustacia was opened at Rockwell. Raymond was also required to develop a new concept for this restaurant where he focused on the restaurant to be Asian themed fine dine. Raymond did an intensive product development & market research in order for the restaurant to be aligned in it concept. Crustacia  was awarded later the “Best Asian Restaurant in the Philippines”.

2005: Blackbeard Seafood Island was opened with a concept of being an “inuman place” for the young professionals who would like to unwind to have a good dinner and a couple of beers after a tiring day from office.

2005: Heaven n’ Eggs was opened at Tomas Morato. This concept was entirely different as it deviated from the original seafood theme of Red Crab.

Raymond was very successful in expanding the business of Red Crab by capitalizing in his mastery of identifying market & what he is selling – Single Product, multi-concept approach.

        

Problem

The problem is business growth and sustainability as Red Crab had been known in developing new concepts where the brain is actually Raymond. Red Crab group must be able to find a way on how they could sustain developing new concepts the way Raymond did.      

Alternatives

1.    1. Red Crab Group will hire internally product development experts.

2.    2. Red Crab Group to create a product development team within their organization which will develop a list of different new concepts they could offer to lessors.

3.    3. Red Crab Group must stick to the single product-multiple concept approach, and relinquish their ownership from non-seafood related products.  

4.    4. Red Crab Group will just have to focus on the restaurant brands they have developed

5.    5. Red Crab Group to keep its position and further develop their management team by investing in trainings in order for the Group to be independent from Raymond in terms of developing new concepts.

Decision

Alternative #3 would be the soundest decision I can think of. Red Crab Group, having its “mother brand” already developed, must just focus on the single product multiple concept approach. They have already created a market for their brands related to seafood and have proven their mastery on that approach. All they need is to do is focus on expanding the market they have created and just further improve the brand. Red Crab Group has been known to be a chain of seafood restaurant concepts and they must maintain to capitalize on it and further improve on it.

      

Action Analysis

Raymond was successful at developing Red Crab as a company with a chain of different seafood restaurant concepts. However, I think he made a wrong decision with the latest move he has done for the company where he ventured into an entirely new concept and deviated from the seafood theme, most especially taking into consideration that the name of the Group is clearly associated with seafood.