Sichuan Haidilao Catering Corporation Ltd - Strategic Directions

HONG KONG SHUE YAN UNIVERSITY

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BUS 460 Business Strategy Group Project

Topic: Sichuan Haidilao Catering Corporation Ltd - Strategic Directions

Submitted To: Dr. Adolphus Y. Y. Wan

Section: 2      Group: 3

144128 Wu Yue

144134 Chow Wai Yi

144137 Yim Sze Wan

144143 Li Wing Tung

144145 Li To Yan

Date:7th December 2017

Table of Contents

Chapter 1: Introduction        3

Chapter 2: Background        5

Chapter 3: Problems Identification        5

Section 1: SWOT Analysis        5

Section 2: TOWS Matrix        6

Problem 1 (S2O2):        6

Problem 2 (W3T3):        6

Problem 3 (W2O1): Limited of corporate culture        6

Problem 4 (W1T1):        8

Problem 5 (S1T2):        8

Chapter 4: Recommendations        8

Section 1: Strategy Formulation        8

Section 2: Strategy Implementation        8

Part I: Programs        8

Part II: Budgets        10

Part III: Procedures        10

Chapter 5: Conclusion        10

Reference        10

Appendices        12

Appendix I: List of Figures        12

Appendix II: Division of Labor        12

Appendix II: Tutorial Schedule        14

Chapter 1: Introduction

The objective of this project (“Project”) is to help Sichuan Haidilao Catering Corporation Ltd (“Haidilao”) to review its strategic directions through the problem-identification-and-solution approach. The reason for choosing Haidilao because it has become a great craze in the hot pot industry before, but with the rapid changes in the competitive market of the hot pot industry, such as, Korean Kim-Chi Hot Pot, Japanese Seafood Hot Pot, and one person one pot. It is difficult to keep good track of operating performance if it continues to rely on the original strategies. As regards the research methodologies, we use primary and secondary data collection and analysis. We went to Haidilao to collect the primary data. And the secondary data is collected from official website, journals, reports, and the internet. For the purpose of identifying problems and designing solutions about the strategic directions of Haidilao, the following Strategic Management Model (Wheelen et al., 2015) is applied.

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Figure 1: Strategic Management Model

Wheelen et al., 2015

 In the project, it includes five chapters. This chapter (Chapter 1) is the introduction. Followed by this chapter is Haidilao’s background information in Chapter 2. In Chapter 3, it is identifying the problems of Haidilao in the environmental scanning by using SWOT analysis and develops TOWS matrix. Chapter 4 is divided into three sections: (1) strategy formulation; (2) strategy implementation; (3) evaluation and control/feedback and learning process. These sections help Haidilao to (a) develop the long-range plan by identifying its mission, objectives, strategies, and policies; (b) putting the strategy into actions via formulation of programs, budgets and procedures; and (c) monitoring performance by comparing actual results to the performance yardsticks. Chapter 5 serves to conclude the whole project.

 The major limitation of the Project is the information collected not comprehensive enough. We could not collect all the primary information when we visited the Haidilao. For example, look at the environment of the kitchen, interview with the staff, and experience all service. Second-hand data collection is another limitation. A large quantity of secondary data come from China and few academic articles and references about Haidilao. The project could only be prepared for our observations and assumptions which require verifications by Haidilao. While these limitations are well acknowledged, they do not detract from the significance of findings. We can look at others comment on Haidilao for further research.

Chapter 2: Background

Sichuan Haidilao Catering Co., Ltd.was founded in 1994 which is a direct-sale catering chain enterprise focusing on Sichuan style hotpot. Over the past 23 years, it applies the service differentiation strategy and takes innovation as the core value, it changes the traditional standardized services and provides innovative and personalized featured services. The goal of Haidilao is “Sustainable Maintenance of Customers’ Degrees of Satisfaction”, so that it provides attentive, warm and comfortable services for customers (Haidilao, 2012). For example, the employees give toothbrush and toothpaste for the customers when they finished the meal. Also, some employees provide the baby care services so that it is convenient for the customer to enjoy the dinner. Moreover, Haidilao provides interesting Sichuan style performance such as Sichuan opera and face changing.

Haidilao owns 7 logistics factories and 2 production factories in China which plants the healthy vegetables and produces types of the hotpot condiment. It hires more than twenty thousand employees in the world. Nowadays, Haidilao has 202 locations in Singapore, Japan, USA, Korea, Taiwan and China (Source: Haidilao, 2012). It gained the First-class Catering Management Group in China in 2008 and the First-Class Fashionable Hotpot Brand in China in 2011 (Source: Winshang.com, 2015). It is the major player and leader in the hotpot market. Its hotpot condiment accounting for 34.7% of the market shares (Frost&Sullivan, 2015).

Chapter 3: Problems Identification

Section 1: SWOT Analysis

Section 2: TOWS Matrix

Problem 1 (S2O2):

Haidilao has failed to use its strength of strong branding in China to take advantage of business trend in globalization.

Brand is the assets, including customers’ perceptions of a product’s benefits and value, positive past experiences and loyalty over time, linked to a brand’s name and symbol (Kotler & Armstrong, 2013). The strength of Haidilao is powerful branding in China, since its strong brand has a long history of 23 years in hotpot industry in China (Haidilao, 2012). Haidilao promotes itself as Chinese brand by providing hotpot in the globe. Haidilao has built up its strong brand image in China. A brand represents the feelings of customers about the service which is strong enough to obtain customers’ awareness and loyalty (Kotler, 2008). Also, a good brand helps differentiate its goods from other competitors. As local brand, Haidilao provides service quality assurance that has gained customers’ awareness and loyalty (Shandwick, 2012).