The Garden Company Limiteds performance in the hong kong market

The garden Company Limiteds performance in the hong kong marketIntroductionharmonize to the assignment guidelines, students are tout ensembleowed to choose either a service lodge or a manufacturing company for this report. I eat up chosen a manufacturing company in Hong Kong with global tag on durance the garden Company Limited (hereinafter c eached Garden). Their major upstream suppliers are from the US, Canada, and Australia whereas their two biggest downstream suppliers in Hong Kong are supermarkets Wellcome and ParknShop. Although Garden products are in like manner being sold outside Hong Kong and China, including the Northern American, Canadian, Australian markets, I would focus this report self-colored on its market in Hong Kong. cathode-ray oscillos bring off schooling of the organic lawThe Garden Company Limited is a Hong Kong-based bakery and confectionery manufacturer. The company was one of the first Chinese owned business as created to sell Western-style nutr ient products in Hong Kong, but besides has a global write out chain network. Founded in 1926, Garden has experienced rapid societal changes and scientific advancement in the one- judgment of conviction(prenominal) 80 historic period. Today, they are still persisting with their paramount values in quality, founding and advancement.Garden supplies thousands of food products to todays retail and tag on markets, with some(prenominal) of their products multination all toldy awarded. As one of the largest bakery production corporations in Hong Kong, they are well equipped with state-of-the-art large- eggshell equipment. Their technology, quality, output and market discipline require long reached International Standards. Gardens wide assortments of products, senior high sales volume and extensive market penetration fool long been broadly recognized.To further cope with rising market demand, they continue to inject large sums of investment into product research and organise ment as well as upgrading their technology and production hardware. The assorted production procedures are completed with the c support sophisticated equipment in their factory. Computer automation is integrated in all the processes from production to packaging, fully manifesting the remark adequate results brought close by scientific solicitude. Furthermore, their principal factory in Sham Tseng with a total area of 70,000 square meters carries out the production lines for bread, cakes, biscuits, candies etc.Unlike most firms in Hong Kong, Garden was a pro-China company and had been supplying bread to Chinese army during World War II. The firm closed its mental processs during the Japanese contrast of Hong Kong from 1941 to 1945. The company string outed with the growth of Hong Kong before and after World War II and benefited from the influx of immigrants from Mainland China. In the 1980s and 1990s, Garden products were shipped oversea to Chinese communities somewhat the wo rld. Besides their major business in Hong Kong, Garden has also been actively taping into the Mainland China market since the 1980s. Factories had been set up in Dong Guan and Yang cream puff to introduce the advanced technology into the food manufacturing diligence of the Mainland.Achieving the ISO9001 certification in 1997 was a milestone in their history. It demonstrates that Garden, with its world-class corporate management and modern operation system, is a globally acclaimed food manufacturer. Today, the company remains a privately owned family (Cheung family) business with several joint ventures with mainland Chinese firms. It is one of the few Hong Kong firms with manufacturing trading operations still in Hong Kong.All Garden products are made of the finest ingredients selected from all around the world, for example their barley is from Australia, flour from the United States, milk and butter from new-fashioned Zealand, just to name a few. Their long-standing experience, fully-automated technology and packing equipment together with careful quality control guarantee that both product of theirs can meet unappeas fit quality testing and safety standards in many a(prenominal) countries.With the past 80 years of excellence, Garden has successfully constituted itself as a distinguished patsy supported and favored by many consumers around the world. Their products electric currently reach many major Chinese communities in as far as europium and America. Today they are actively developing overseas markets in order to walk their quality foods to consumers in divers(prenominal) corners of the world. With more than eight decades of experience in food production, the Garden Companys determination in offering quality products and service and its innovative spirit are as toughened as ever. Looking ahead, they willing continue with their commitment to producing nutritious and quality food with the pursuit of perfection.QIE, which stands for Quality, c onstruct, Efficiency, serves as Gardens corporate mission with the objectives to lead their staff to pursuit of superb quality, continuous innovation and achieve efficiency enhancement. It is through the implementation of QIE that the recognition and reputation of their reproach feel been with child(p)ly elevated. To realize their goal of QIE, the Company puts LTC Learn, Think, and Communicate into practice with all their working together to continuously reform the manufacturing of quality products, developing new technologies and new product values so as to satisfy the ever-heightening leases of consumers. organize (Strengths, Weaknesses, Opportunities, and Threats) psychoanalysisStrengthsGarden has a global brand, it is a strong brand, strengths including brand recognition, brand quality, economies of scale, strong distribution network, strong distribution chain, supply chain, strong international operations, online growth, good reputation, reputation management, market sh are leadership, effective marketing strategy, experienced personnel, strong management team, effective communion, extensive customer base, loyal customers, follow advantage, asset leverage, competitory pricing, original and unique products, high research and development, advanced equipments, innovation, etc. Apart from all these company strengths, they are famous in Hong Kong. I view that all households in Hong Kong consume their products, one or the other on a regular al-Qaida. They are considered second to none in the bakery diligence.Weaknesses referable to Gardens huge ladder of products, coupled with a substantial global retail network, bad communication is unavoidable, it happens from time to time. Furthermore, they experience diseconomies to scale, at times over leveraged financial position, and weak corporate governing practice. Since Gardens run of products is for the public in general, many of their competitors go to the upper end market, for example to high clas s customers such as hotels and delis, and leave Garden in the lower end market for many years.OpportunitiesGarden basically has a healthy financial position. They did some acquisitions, merger and takeovers on a small scale basis. They also tie up with international events to capitalize on synergism opportunities for growth of the operation. They continuously look for new markets expand in Asia, expand into online shopping decrease its taxation through donations to charity organizations. In the era of emergence of international middle class, and change in consumer lifestyles, they are constantly ever-changing their products to expand their customer base, and their service lines like new products such as drinks and snacks, and new service such as mail order.ThreatsAlthough Garden has a lion share in the bakery industry, they drop many competitors in the high end sector. With Hong Kong returning its sovereignty to Mainland China, Garden is facing many financially strong competitors from the Mainland. There are new competitors from the Mainland entering into this relatively small market. As far as their foreign business is concerned, foreign switch over rate changes affect its imports/exports strategies. The volatility in fuel costs, rising costs of business, pricing pressures, potentially slowing global economy, changes in demographics, change in consumer lifestyles, changing to cheaper technology, substitute products, changing consumer patterns, growing power of customers to set the price etc. are possible threats Garden has been facing during the past few years.Porters Five Forces analysisCompetitive Rivalry within an industrySince multi-market competition exists, rivalry mingled with competitors in the industry is extremely intense. Companies in the industry have started new businesses to maturation the level of competition with one a nonher and compete heavily for geographic markets. There is no clear dominant market share player in the industry. Thoug h the industry currently has relatively high growth, often of the business is cyclical, which leads to intensified competition in economic downturns. High fixed costs also contribute to intense competition. More recently, the continued growth of online shopping, mail orders, combined with increasing awareness of door to door logistics arrangements have been giving Garden headaches and they have been streamlining their services in this competitive environment. A few remarks are listed below to introduce some of Gardens international and local rivalries.Sara Lee slewSara Lee Corporation is a global consumer products company with food, beverage, and household and body care lines of business. With powerful brands, such as Ambi Pur, Ball Park, Douwe Egberts, Hillshire Farm, Jimmy Dean, Kiwi, Sanex, Senseo and its namesake, Sara Lee, the company has leading positions in many categories in the more than 180 markets in which it competes.In Hong Kong, Garden has two main competitors in it s frozen and new breads. For frozen breads, it major rivalries are Maxims, Sara Lee. For heady breads, Garden is facing numerous small size competitors, in particular in the western style restaurants which bake on an everyday basis for its good afternoon tea customers.Competitive Rivalry is a strong rack in the bakery industry because the competitors use price cuts to compete, there is a low cost product range and there is ease in switching brands, and the companies in this industry can diversify and acquire other companies for strategic growth and for synergy purposes.Threat of New EntrantsThe threat of new entrants into this industry is relatively low because of the scale required to make companies in the industry competitive. Capital demands to fund all of the assets required in the industry are extraordinarily large, making competition from entrepreneurs or small companies very difficult at this level of market competitiveness. Economies of scale are necessary for the busines s to be profitable and because of the intensity of rivalry, customers are difficult to sop up. While the basic service of shipping goods would be relatively unaffixed for new entrants to imitate, the competitors in the industry have created value and high switching costs for their customers through proprietary technologies.Threat of New Entrants is a weak force in this industry. Each company currently in the industry has strong brand images, leaving a harder job for new companies. The capital expenditures to start a bakery company are large, and the companies currently are achieving economies of scale by going global. Any smaller company will non be able to achieve these right away, not allowing them to compete on prices. Another factor threatening potential entrants is trade tariffs and international regulations. Most companies currently in the industry have already established relations with foreign countries. New companies will have to prove themselves to foreign companies, su ppliers, and customers.Threat of Substitute ProductsThe threat of substitutes is currently high for the industry, but major technological or governmental foods regulations could change that. As mentioned above, although Garden has a lion share in the bakery industry, they have many competitors in the high end sector, for example Maxims, Saint Honore, Tai Pan Bakery etc. Garden is also facing many financially strong competitors from the Mainland. The latter(prenominal) produce substitute products such as dumplings, dim sums to suit the changing consumers taste. This is one of the many reasons why Garden has been continuously modifying the ingredients and packaging of their products during the past few years.Threat of Substitute Products is a strong force in this industry. There are plenty of substitute products in the market. Bakery retail outlets such as Maxims, Saint Honore, Tai Pan Bakery etc are conveniently located in all the 18 zones. One can literally pay back either one of t hem in almost every main street in Hong Kong. These competitors also offer very competitive prices which make potential consumers lose their brand loyalty and easy to switch to another brand.Bargaining Power of SuppliersSuppliers bargaining power is fairly low in the industry, but different suppliers have slightly different pricing strategies to fight for their survival. Competitors are also on the same footing with suppliers, as they are all subject to the same prices, although they whitethorn have hedged differently. Labour is a major factor of production in the industry and differences between companies regarding labour contracts subjects them to varying degrees of supplier power. Suppliers of raw materials, components, labor, and services (such as expertise) to the firm can be a source of power over the firm, when there are few substitutes. Suppliers may refuse to work with the firm, or, e.g., commission excessively high prices for unique resources.This is a strong force if the suppliers serve different industries with their raw materials. If a supplier only has accounts or the majority of their accounts with different companies, they will not be able to control prices and supplies.Bargaining Power of BuyersCustomers in the industry initially have power, but once they commit to a bakery, their bargaining power decreases significantly. New customers can easily shop around for price or level of service in the beginning, but once they have chosen a bakery and buy their product, they are usually loyal to them. Customers are likely to become loyal to a certain go forthr because of long-standing relationships or personal interaction with the company.This is a moderate force in this industry because competition keeps prices alike among the companies. The only difference is degree in loyalty. Also, the buyers of the services in this industry are reactionary. They do not know the technology before it happens. They become dependent on the technology, service and speed offered by the companies in this industry and will pay for it.SCOR (Supply-Chain Operations Reference) ModelPlanning activitiesGardens butt end customers are the public in general, whether they be as young as 2 years old, to as old as 99, they could be Gardens customers. Their pricing strategy is value for money. Their marketing slogan has been nutrition you need every day with the highest quality. These planning activities have proved to be most successful and made Garden the leading supplier in the bakery industry, in particular in the breads, biscuits and cakes sectors.Sourcing activitiesAccording to the reading materials I searched and found, Garden has been purchasing all the baking ingredients directly themselves. However, they do outsource through logistic companies in their deliverance activities. Locally, they need to deliver their fresh breads every early morning to hundreds of retail outlets. They also need to deliver fresh buns to all McDonalds franchisees. Furth ermore they also deliver a range of fancy breads to airline caterers, hotels and restaurants. Internationally, they outsource transportation companies as well as freight forwarders for special orders such as wedding and birthday cakes. Internally, they outsource breeding technologies, finance and accounting, sales and marketing, foods testing etc. just to name a few.Make or production activitiesGardens upstream suppliers are worldwide. These included but not limited to flour, sugar, milk, cocoa, vanilla, wheat, soda powder, etc. again just to name a few. Countries included but not limited to (in alphabetical order) Australia, Canada, China, Europe, Latin America, and the United States. profits ProductionGardens bread production lines operate on a 24-hour basis, of which one is the first fully-automated line for hamburger buns in Asia. Apart from the retail market, they provide a huge volume of wholesale goods, which include bread, pastry and frozen dough products to major fast food chains, restaurants, hotels and airline catering services in Hong Kong. With their far-ranging businesses, they are committed to providing consumers with better choices with continuous innovations.Biscuit productionGarden possesses diverse expertise, equipment and automated production lines to produce a wide variety of biscuits including wafers, cookies, prepare biscuits, saltine, crackers and assorted biscuit gift packs to meet market demands.Cake productionTheir wide range of cakes has long been famous for its high quality and great taste. To cope with market demand, Garden produces cake products with highly efficient production lines, of which one is fully computerized for producing mini-cakes. With a wholehearted contribution from over 1,200 employees, Garden has established itself as the most reputable manufacturer in the local industry.Order processing information systemsAll market interactions, from the ascertaining of aggregate demand to the fulfillment of each order ar e not done wholly by Garden internally themselves. Some logistics are being outsourced, in particular for the overseas markets in Northern and Latin America, Australia, Europe, and Canada.Garden normally receives their orders through phone, fax and e-mail or e-order. Its IT incision uploads orders to the printing invoice system. Automatically, these invoices pass to its distribution department for manner of speaking. After deliveries, these invoices will be, again automatically, sent to its accounting department. The latter department then issues credit notes to the appropriate customers. Currently they are still using the information systems designed by IBM.Quality Control foremen in Garden are made responsible to ensure that expiry date, and appearances are powerful done, and presentable. All pitch shot vans must have the correct temperatures for the different kinds of products.Delivery activitiesDifferent transportation teams are required for different products. Fresh breads, frozen breads, biscuits are being delivered by the China and Hong Kong transport teams. Fresh bread team has intimately 60 vehicles to deliver 4,000 orders per day. These trucks are recognizable easily on the streets. Frozen breads and biscuits teams have about 20 vehicles to deliver 400 orders per day. Three trailers are being outsourced for the Mainland China and Hong Kong markets.As mentioned above, Garden does outsource through logistic companies in their delivery activities. Locally, they need to deliver their fresh breads every early morning to hundreds of retail outlets. They also need to deliver fresh buns to all McDonalds franchisees deliver a range of fancy breads to airline caterers, hotels and restaurants. Internationally, they outsource transportation companies as well as freight forwarders for special orders such as wedding and birthday cakes. Not only that Garden wants to manufacture the best products, they also want to provide their best delivery service.Return act ivitiesGarden guarantees its products are fresh and proper. They promise their retailers that they will stand in any damaged or rotten items, that is if that happens. Garden has agreed with their retailers that they will pick up any expired items on their shelves.Assess how well the organization implements the supply chain managementAs mentioned right at the beginning of this report, Gardens major upstream suppliers are from the US, Canada, and Australia whereas their three biggest downstream suppliers in Hong Kong are supermarkets Wellcome, ParknShop and Mcdonalds. As far as this report is concerned, I would focus in the downstream supply chains and before I go into how well Garden implements the supply chain management, I would like to introduce Gardens major downstream supply chains Wellcome, ParknShop and Mcdonalds.Wellcome Wellcome is Hong Kongs longest-established supermarket chain, they have an overall staff of 5,000 in more than 240 stores and serves more than 14 million c ustomers every month.ParknShop ParknShop is one of the two largest supermarket chains in Hong Kong (the other is Wellcome Supermarket). ParknShop operates more than 260 outlets in Hong Kong, Macau, and Mainland China. ParknShop has more than 200 stores and 9,000 employees in Hong Kong.Mcdonalds McDonalds Corporation is one of the worlds largest chains of hamburger fast food restaurants, serving nearly 47 million customers daily. Most of their breads in Hong Kong are supplied by Garden.Although Garden does supply their products to airlines catering companies, hotels and restaurants, as well as supply chains such as 7 Eleven, Circle K and etc., I am not going to introduce these supply chains on a one on one basis.Basically these supply chains are owned by substantial and listed companies with well-trained management teams. pennant management, as well as middle management personnel at Garden have very good business relationships with their supply chains. They have properly done lega l contracts specifying all the details in supplies and payments. I have not been able to find any past news regarding any communication breakdowns between Garden and its supply chains. I have neither been able to find any past law suits about Garden suing any of its supply chains for non-payments, nor any company suing Garden for not delivering its responsibilities although there have been rumors that Garden has been finding it more and more difficult to get their payments on time during the past few years. Based on these findings, I believe Garden has been successful in its supply chains management activities.Suggest solutions/ways to improve the organization business especially by improvements on supply chain management of the organizationSupply Chain Management (SCM) is not created to suit for every company. It can succeed only with top management commitment and managers loyalty in executing those management strategies. Gardens management teams need to spend time in evaluating wh ether new SCM, inclusive of international networks, is suitable to be implemented into their company and how it could be successful.Garden bread has long history in Hong Kong that the fundamental target market should be the mass public served as the stable diet. With the increasing awareness of healthy eating, the variety of healthy soul products have been promoted like multi-grained, whole wheat, high calcium low fat breads. It is the general social trend and also serves as one of the marketing strategies that focus on the targeted middle-class, office-ladies and health consciousness customers. The relative advantage of Garden obviously is its long history and well-developed manufacturing factories, well-connected distribution channels, competitive retailing price and, of course, the well-known and long established brand name. On the other hand, these relative advantages might contribute some shortcomings in terms of the flexibility of market positioning and variety of products i n response to the ever-changing and ever-increasing market force.Personally I am disappointed with Gardens decade-long use of coconut oil as an ingredient for their biscuits production. According to certain food magazines, too much consumption in coconut oil is bad for our health. Although all the reading material I found have been saying good things about Garden, until now Garden is not a listed company, it is a privately owned company. They do not have to disclose any of their operation details to the public. Particularly, they do not have to disclose their financial position apart from to the Inland Revenue. My perception of Garden is that it is a very old style traditional company. Its top management includes family members of the founder. It is purely family business. Its image is not catching up with the young generation. Their product range is also conservative. It does not give any modern flare to attract those expats from the west. They focus on Asians so far, that means t here is a huge expats market for them to develop. Garden reminds me of the Green, Yellow and White Arrow brands chewing gum company. The latter company has been too conservative and has not been innovative to catch up with the new entrants. Hence, Green White Arrow chewing gums have been losing market share. Until today, they have not been able to gain back what has been lost.The image of Garden should shift to focus more clearly on each market segment. For instance, Garden should develop a Gourmet production line which emphasis on the finest ingredients, the innovative design, for example in its packaging, and its advertisements. They could consider making more choice of breads, land cakes similar to those recipes from Italy and France, or from Europe at large. In order to shave off the old stable diet image, instead, the building up of the delicate and professional crafted food and to state that not only the five stars hotels can produce but Garden can also make and even better.T he efforts to make sure managers do well in the SCM program and not treat it as another flavor-of-the-month include but not limited to the followings. Firstly, Garden has to ensure that the companys SCM strategies are specifically designed. Secondly, the SCM program need to meet their customers demands and reduces the companys costs. Thirdly, the management team must buy-in the program. Also, all the benefits included from the program such as customer responsiveness, more consistent on-time delivery shorter order fulfillment lead times reduced inventory costs lower cost of purchased items high product quality faster product innovation and etc. must be clearly explained to all the concerned managers so that they know the importance of the program. Garden must ensure that the staff concerned understand the objectives of the program, for example to better utilize the company resources and yet with higher product quality. Finally, if managers do well in implementing and executing the program, the company should consider giving them fillip such as bonus or additional rewards other than their normal compensation. This will give them more motivation to continue to run the program.Garden has to do detailed surveys and researches to find out what are the products that their customers demand. They should listen to the voice of their customers. Their views and suggestions could in turn help the company to produce specifically the range of products the customers need. The company could also utilize their findings for meetings and discussions with their suppliers, both upstream and downstream and production managers to reduce the order processing time and inventories. The company would also be able to produce higher quality products with lower prices and less order processing time. In this way, the company would be more responsive to both their customers and suppliers. By doing the above, the company would be able to expand its market share from other competitors.Furthe r possible improvements can be capitalized in the advances in technological and informational environment. These improvements have major implications for all industries, peculiarly logistics. If used effectively such advances may be a key source of competitive advantage. The technology listed below may become a competitive edge advantage for Garden in the future.Radio-frequency identification (RFID) not ready to implement?Radio-frequency identification (RFID) is the use of an object (typically referred to as an RFID tag) applied to or co-ordinated into a product, animal, or person for the purpose of identification and tracking using radio waves. Some tags can be read from several meters away and beyond the line of sight of the reader. It works like a barcode, but instead of having to be passed in front of a scanner for recognition, tiny transponders (known as tags or chips) send out radio signals. Each tag is small, robust and unique so any one item can be tracked independently t hroughout the supply chain.Logistics and transportation are major areas of implementation for RFID technology. For example, yard management, shipping and freight and distribution centers are some areas where RFID tracking technology is used. merchant marine companies around the world value RFID technology due to its impact on the business value and efficiency.The new technology is currently seen as too pricy to put on individuals products, but large companies already use it to track shipping items. RFID trials have met with mixed customer reactions. As with many such good advances the effects can be both positive and negative. RFID technology is currently unsophisticated and largely applied to logistical operations. Training of staff and informing all internal stakeholders as to how RFID technology works and can benefit the company, stating the impact on customers so that companies are able to improve their operations.Global Positioning ashes (GPS)The Global Positioning System ( GPS) is a U.S. space-based global navigation satellite system. It provides reliable positioning, navigation, and timing services to worldwide users on a continuous basis in all weather, day and night, anywhere on or near the Earth which has an unobstructed view of four or more GPS satellites. GPS has become a mainstay of transportation systems worldwide, providing navigation for aviation, ground, and maritime operations.Installing GPS systems for delivery vehicles can increase the efficiency and effectiveness in delivering products.Even though transportation companies offer tracking and insurance services to their customers, there are still prognosiss that the customers packages might be lost or stolen. Imagine a GPS chip attached to the delivery packages it can then be tracked anytime. Adding this technology can boost the customers confidence about Garden.ConclusionGardens supply chains are owned by substantial and listed companies with well-trained management teams. Garden has ve ry good business relationships with their supply chains. Garden has been successful in its SCM activities. For further improvements, Garden should keep themselves abreast of the current important trends being developed in the business arena, for example electronic commerce has been widely used. Experienced users reveal that e-business reduces costs and time. It creates less conflict between suppliers and consumers. Garden must realize that very few industries are protected geographically competition is getting more and more fierce. Gardens determination to change as the contents mentioned-above is critical for its advancement.With Gardens top management teams commitment, together with managers efforts, I believe that Gardens staff is more willingly to change and Garden has a good chance of success in improving its current SCM program.During the process of finding reading material for this exercise and thereafter digesting the material, I became more familiar with what