Managing Organization Change Group Member: Christy, Lau Kar Nei Heidi, So Wai Shan Rick, Tsang Kin Yip

Background Information The 1 st Fairwood was established in December 1972 in Chung On Street, Tsuen Wan The 2 nd Fairwood opened in 1977 in Fuk Wing Street, Sham Shui Po In 1981, a major restructuring exercise was undertaken for the rapid expansion Central food processing facility was established to ensure consistence of food quality and to maintain close control of costs

The 1 st Fairwood was established in December 1972 in Chung On Street, Tsuen Wan

The 2 nd Fairwood opened in 1977 in Fuk Wing Street, Sham Shui Po

In 1981, a major restructuring exercise was undertaken for the rapid expansion

Central food processing facility was established to ensure consistence of food quality and to maintain close control of costs

Background Information In 1991, Fairwood expanded rapidly from 8 restaurants to a total of 52 , serving over 100,000 customers daily Within the same year, Fairwood made an initial public offering of its shares in the Stock Exchange of Hong Kong

In 1991, Fairwood expanded rapidly from 8 restaurants to a total of 52 , serving over 100,000 customers daily

Within the same year, Fairwood made an initial public offering of its shares in the Stock Exchange of Hong Kong

Background Information In 1993-1994, Fairwood opened the Mainland China market In 1995, suffered a Loss of 47 million Downsized the business in China for a wide margin, from 29 restaurants to 4 restaurants Profit was made back

In 1993-1994, Fairwood opened the Mainland China market

In 1995, suffered a Loss of 47 million

Downsized the business in China for a wide margin, from 29 restaurants to 4 restaurants

Profit was made back

Before Re-engineering Had NO Market Segmentation to Focus on Target Customers Had NO Sharp Brand Image Scenario is tough Changes had to be made to survive Short-term strategies is not effective Mid-term or long-term planning actions are needed for company

Had NO Market Segmentation to Focus on Target Customers

Had NO Sharp Brand Image

Scenario is tough

Changes had to be made to survive

Short-term strategies is not effective

Mid-term or long-term planning actions are needed for company

Understanding Customers After the Scenario Analysis of Fairwood , CEO understood the Weaknesses and Opportunities It is Not Enough to provide fast food with low prices Customers are pursuing A Quality of Life

After the Scenario Analysis of Fairwood , CEO understood the Weaknesses and Opportunities

It is Not Enough to provide fast food with low prices

Customers are pursuing A Quality of Life

Take Action In November 2003, Fairwood launched “ Three-year Brand Re-engineering Program ” A Brand New Image included Alteration of Trademark , Improving the Quality of Food , Innovation of the Menu , and Restaurant Furnishing

In November 2003, Fairwood launched “ Three-year Brand Re-engineering Program ”

A Brand New Image included Alteration of Trademark , Improving the Quality of Food , Innovation of the Menu , and Restaurant Furnishing

Take Action Brought in Creative Series of Food with Higher Price to gain profits in short term Improve the image of Fairwood in customers’ mind Changing the Logo, Furnishing the Layout, Requesting staff to say “Welcome” to Customers

Brought in Creative Series of Food with Higher Price to gain profits in short term

Improve the image of Fairwood in customers’ mind

Changing the Logo, Furnishing the Layout, Requesting staff to say “Welcome” to Customers

Change of Image Invited actor To Man Zaak, Chapman as a spokesperson to make the image become Younger and Energetic

Invited actor To Man Zaak, Chapman as a spokesperson to make the image become Younger and Energetic

Change of Menu Menus are designed around four time segments: Breakfast, Lunch, Afternoon Tea and Dinner

Menus are designed around four time segments: Breakfast, Lunch, Afternoon Tea and Dinner

Change of Menu Each segment are different and priced differently to fit the Eating and Spending Habits of customers Allow a Choice of Sauces and Side Dishes Rotate Twice a week

Each segment are different and priced differently to fit the Eating and Spending Habits of customers

Allow a Choice of Sauces and Side Dishes

Rotate Twice a week

Change of Menu Some menus are changed seasonally Dishes that are able to hold their temperature longer, such as Hotpot and Clay Pot Rice , are served in winter months Most seasonal specialties are presented in specially designed containers to enhance their appeals and their perceived value to the customers

Some menus are changed seasonally

Dishes that are able to hold their temperature longer, such as Hotpot and Clay Pot Rice , are served in winter months

Most seasonal specialties are presented in specially designed containers to enhance their appeals and their perceived value to the customers

Increase Customer Flow Many of the customers are used to buy a cup of drink, have a smoke, and stay in the restaurant for such a long time All Fairwood restaurants are Non-Smoking Areas . Customer flow has increased rapidly

Many of the customers are used to buy a cup of drink, have a smoke, and stay in the restaurant for such a long time

All Fairwood restaurants are Non-Smoking Areas . Customer flow has increased rapidly

Achievement Maintain the traditional efficiency of fast food restaurant, and provide Café-like style and Comfortable Environment to Customers Used to be looked as a follower-image of Café de Carol Brings brand new image to customers Well-acceptable change brought 751 Million net profits last year

Maintain the traditional efficiency of fast food restaurant, and provide Café-like style and Comfortable Environment to Customers

Used to be looked as a follower-image of Café de Carol

Brings brand new image to customers

Well-acceptable change brought 751 Million net profits last year

Achievement The positive achievement represents the successfulness of the reengineering According to the report of Fairwood , it is going to launch a three-year program again It proves that changing management is Important to companies to overcome uncertainties and to be expanded

The positive achievement represents the successfulness of the reengineering

According to the report of Fairwood , it is going to launch a three-year program again

It proves that changing management is Important to companies to overcome uncertainties and to be expanded

Change Indicator The CEO of Fairwood , Dennis Lo Hoi Yeung, was planning to change the Trademark only

The CEO of Fairwood , Dennis Lo Hoi Yeung, was planning to change the Trademark only

Change Indicator The CEO invited a Hong Kong Famous Designer, Alan Chan , to Take Charge of the New Trademark Design

The CEO invited a Hong Kong Famous Designer, Alan Chan , to Take Charge of the New Trademark Design

Change Indicator Alan Chan advised that it is not adequate to change the Trademark only as a Branding Strategy It would be more effective that a company should Strengthen its Advantages to attract Larger Customer Base He also suggested Re-furnishing the Restaurants Layout

Alan Chan advised that it is not adequate to change the Trademark only as a Branding Strategy

It would be more effective that a company should Strengthen its Advantages to attract Larger Customer Base

He also suggested Re-furnishing the Restaurants Layout

Change Indicator Alan Chan invited Japanese Designer Yasumichi Morita and Hong Kong Architect Steve Leung to Re-design the Interior layout of all Restaurants Completely

Alan Chan invited Japanese Designer Yasumichi Morita and Hong Kong Architect Steve Leung to Re-design the Interior layout of all Restaurants Completely

Change Indicator Reformed to be an orange-based decoration layout Provide Happiness, Relaxing, and Comfortable Surrounding to customers through matching up with Four Different Period of Time of Lamplight Adjustment

Reformed to be an orange-based decoration layout

Provide Happiness, Relaxing, and Comfortable Surrounding to customers through matching up with Four Different Period of Time of Lamplight Adjustment

Change Indicator The Old Trademark of a Clown has been change to be a Younger and Animated Human-shaped Logo by Alan Chan The Trademark has brought a Happy and Energetic Image to Customers

The Old Trademark of a Clown has been change to be a Younger and Animated Human-shaped Logo by Alan Chan

The Trademark has brought a Happy and Energetic Image to Customers

Leadership Effectiveness The Improvement of Total Quality Management (TQM) had been Leaded by the CEO, Dennis Lo He Understood that the Quality of Food , Services , and the Dinning Environment are the Keys to Success

The Improvement of Total Quality Management (TQM) had been Leaded by the CEO, Dennis Lo

He Understood that the Quality of Food , Services , and the Dinning Environment are the Keys to Success

Leadership Effectiveness The CEO has proved his Leadership Skills to the Organization The company could NO longer generate Strategic Thinking to Survive and Losing Money Incessantly The company could only have a Frame-Breaking instead of Frame-Bending to Survive

The CEO has proved his Leadership Skills to the Organization

The company could NO longer generate Strategic Thinking to Survive and Losing Money Incessantly

The company could only have a Frame-Breaking instead of Frame-Bending to Survive

Leadership Effectiveness Willingness to Take Risk Took the Correct Move to Change the Old Logo Empowerment – He authorized Alan Chan to Take Charge Found the New Vision and Direction for the Organization

Willingness to Take Risk

Took the Correct Move to Change the Old Logo

Empowerment – He authorized Alan Chan to Take Charge

Found the New Vision and Direction for the Organization

Leadership Effectiveness The CEO involved in the Change Processes completely -- From the Trademark , Furnishing of Restaurants , to the Quality of Food Gave Big Effort Accepted Opinions from Stockholders, Designers, and Restaurant Employees

The CEO involved in the Change Processes completely -- From the Trademark , Furnishing of Restaurants , to the Quality of Food

Gave Big Effort

Accepted Opinions from Stockholders, Designers, and Restaurant Employees

Leadership Effectiveness Fast Learner Suffered from Bad Experiences of Rapid Expansion Should be Cautious of Expansion and Listen to Others Excellent Leader

Fast Learner

Suffered from Bad Experiences of Rapid Expansion

Should be Cautious of Expansion and Listen to Others

Excellent Leader

Resistance to Change 4 Types of Change Resistance: Psychological , Systemic , Institutionalized , and Cultural The Fairwood Restaurant faced Cultural and Systemic Resistance

4 Types of Change Resistance: Psychological , Systemic , Institutionalized , and Cultural

The Fairwood Restaurant faced Cultural and Systemic Resistance

Resistance to Change Shareholders Doubted about the Suggestion of Changing Logo Change would affect in all aspects - Food, Concepts , and Method of Working Management and Employees had to face the New Working Challenge and the New Environment

Shareholders Doubted about the Suggestion of Changing Logo

Change would affect in all aspects - Food, Concepts , and Method of Working

Management and Employees had to face the New Working Challenge and the New Environment

Evaluation of the Change 3 Ways to measures change: Conventional Financial Measures , Strategy-Driven Measures , Benchmarking We Use the Conventional Financial Measures to evaluate the Change Process of Fairwood

3 Ways to measures change: Conventional Financial Measures , Strategy-Driven Measures , Benchmarking

We Use the Conventional Financial Measures to evaluate the Change Process of Fairwood

Evaluation of the Change In 1995, Fairwood had lost 47 million HKD In 2003, Fairwood gained about 3 million HKD after the Change process In 2006, the Fairwood recorded a turnover of 577 million HKD for the period under review An increase of 22.5% from 471 million HKD booked in the same period the year before

In 1995, Fairwood had lost 47 million HKD

In 2003, Fairwood gained about 3 million HKD after the Change process

In 2006, the Fairwood recorded a turnover of 577 million HKD for the period under review

An increase of 22.5% from 471 million HKD booked in the same period the year before

Evaluation of the Change 2 Factors drove Fairwood to Success – New Environment of Restaurants and Improvement of Food Color Black and Orange make People feel Fresh and Motional New Logo and Color attracted People walk into the Restaurant

2 Factors drove Fairwood to Success – New Environment of Restaurants and Improvement of Food

Color Black and Orange make People feel Fresh and Motional

New Logo and Color attracted People walk into the Restaurant

Evaluation of the Change The Change in Attitude of Employees makes the service became more Effective and Efficient The Changes in Quality of Food brought New Style and Cultural Food to Customers

The Change in Attitude of Employees makes the service became more Effective and Efficient

The Changes in Quality of Food brought New Style and Cultural Food to Customers

Evaluation of the Change New menu made the profit increased e.g. Normal spaghetti costs around 20 HKD; New chain with more Creative Materials on the spaghetti, like seafood - can sell for 30 HKD

New menu made the profit increased

e.g. Normal spaghetti costs around 20 HKD;

New chain with more Creative Materials on the spaghetti, like seafood - can sell for 30 HKD

Evaluation of the Change The compliment of service and the quality of food had made Fairwood received: - HKMA/TVB award for Marketing Excellence 2004 – Certificate of Merit - 2004 Super Brand Award

The compliment of service and the quality of food had made Fairwood received:

- HKMA/TVB award for Marketing Excellence 2004 – Certificate of Merit

- 2004 Super Brand Award

Psychological Adjustment Overall, Reaction of the change from Customers and Employees are Positive

Overall, Reaction of the change from Customers and Employees are Positive

Psychological Adjustment Compare with Maxim and Café de Coral , the Sharp Colors of the Restaurants catch Attention from most of the Customers Even when people are only walking on the street, they would still see the logo of Fairwood

Compare with Maxim and Café de Coral , the Sharp Colors of the Restaurants catch Attention from most of the Customers

Even when people are only walking on the street, they would still see the logo of Fairwood

Psychological Adjustment The Taste and Quaintly of Food decide the Success Because of the New Menu offers differ choices and good tasting food , Customers choose Fairwood over Maxim and Café de Coral

The Taste and Quaintly of Food decide the Success

Because of the New Menu offers differ choices and good tasting food , Customers choose Fairwood over Maxim and Café de Coral

Lesson Learned Necessary changes save the organizations from disappearing, and drive the competitions in the industry The CEO of Fairwood said, “ Fairwood ’s new dining experience that sets the standard in food quality and restaurant design has revolutionized the culture of fast food in Hong Kong .” It proves Innovation is the Root of the Business

Necessary changes save the organizations from disappearing, and drive the competitions in the industry

The CEO of Fairwood said, “ Fairwood ’s new dining experience that sets the standard in food quality and restaurant design has revolutionized the culture of fast food in Hong Kong .”

It proves Innovation is the Root of the Business

Conclusion In order to ensure and enhance its Competitiveness , Fairwood continuously Reviews , Updates and Improves the Products To this end, Fairwood constantly seeks to introduce new food products , increase its variety , keep the interest of customers in order to build up Loyalty

In order to ensure and enhance its Competitiveness , Fairwood continuously Reviews , Updates and Improves the Products

To this end, Fairwood constantly seeks to introduce new food products , increase its variety , keep the interest of customers in order to build up Loyalty

Conclusion Nowadays, Fairwood has sought to be Innovative in both the Development and Presentation of its Fast Food Products We believe that the Future of Fairwood should be Brilliant

Nowadays, Fairwood has sought to be Innovative in both the Development and Presentation of its Fast Food Products

We believe that the Future of Fairwood should be Brilliant

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