Business Strategy Formula For KTBR in Vietnam
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Business Strategy Formula For KTBR in Vietnam

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This document is a business strategy formula for KTBR if they intend to expand to Vietnam. This document is based on internet research only.

This document is a business strategy formula for KTBR if they intend to expand to Vietnam. This document is based on internet research only.

Thank you, Jesmin Manalu

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Business Strategy Formula For KTBR in Vietnam Business Strategy Formula For KTBR in Vietnam Document Transcript

  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. BUSINESS STRATEGY FORMULATION FOR KEBAB TURKI BABA RAFI IN VIETNAM 1. INTRODUCTION TO KEBAB TURKI BABA RAFI (KTBR) 1.1 Introduction to Kebab Turki Baba Rafi Kebab Turki Baba Rafi is a company established by Hendy Setiono, a drop out student of Information Technology in 10 November Institute of Technology. He was a 19 years old boy when he started to open his first outlet in the corner of Surabaya city. His mother, Endah Setijowati, a government officer, and his father, Ir H Bambang Sudiono, is an engineer in an oil company in Qatar, Middle East. 1.2. History of Kebab Turki Baba Rafi It all started when Hendy went on holidays to visit his father who worked for an oil company in Qatar. When he arrived, he noticed plenty of Kebab shops around town and was amazed with just how popular these fast food shops were with the locals and tourists alike. Hendy couldn‘t resist his own curiosity and just had to try this strange looking sandwich. Even in the heat of the Arabian Peninsula, he was very impressed with the simple yet tasty local delicacy and immediately his mind flashed to open a kebab shop in Indonesia, as kebabs were unknown to the general population back then. Back from Qatar, Hendy thought to try his luck and wanted to start selling kebabs in Surabaya. However, he did not want open his business carelessly so he created a business strategy. Firstly, he needed to find a business partner so he met with Hasan Baraja, an old friend who happened to be in the culinary industry. Initially, they began research by trial and error and to explore business opportunities, product development and market segments. Given that the original Middle Eastern kebabs are large in size, they realized that they needed to modify it to be more accepted with the people of Indonesia. Also, in the matter of taste, cardamom and clove flavors were made lighter in such a way that the strength of that taste did not seem too strong or overwhelming. With a capital of only 4 million rupiahs, which he borrowed from his younger sister, Hendy started the business in a plain white push cart. He opened the stall near his University. As it turned out, it was very difficult to start selling kebabs on the streets and not as exotic as the dream he had while he was in Qatar. Employees would call in sick after just one week of work, leaving Hendy to push his own cart and when it rained, he would earn a measly 30,000 Rupiahs equivalent to only $3.00. Also, money disappeared with replacement employees. However, this young man from Surabaya pushed on unyielding. With the support and dedication of his then fiancé Nilamsari, the kebab business continued. Not to be half-hearted with his efforts, Hendy decided to quit university even though he had already finished four semesters (2 nd year) at the Department of Computer Science, Sepuluh November Institute of Technology, Surabaya. His parents, Bambang Sudiono and Endah Setijowati
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. opposed the decision from the eldest of the two brothers as they deemed his business more of a hobby than a career choice but Hendy wouldn‘t budge. ―Looking back, the abrupt end of my studies was probably one of my biggest blessings even though I had to start from the bottom which was both physically and emotionally draining‖. The feisty youngster realized that without a degree he needed to push himself even harder so what he lacked in education, he made up with hard work and determination. It didn‘t take too long before he opened up another stall. As his business grew, he knew he needed to create a brand name and change the look of his carts to be more attractive (than just plain white). Hence, the business was named ―Kebab Turki Baba Rafi‖. The name Kebab Turki is from where he tasted the best tasting kebab when he was in Turki (Turkey). Baba means father in Arabic and the name Rafi was inspired by the name of his first son Rafi Darmawan, to continue his legacy. Red and yellow are bright colours and was chosen to attract people who would pass by. By September 2003, pushcarts selling Kebab Turki Baba Rafi kebabs first began operations with the help of Hendy‘s now wife, Nilamsari and one employee. Patience, dedication and hard work began to pay-off. Gradually, they started to supply corporate customers and Kebab Turki Baba Rafi was increasingly being recognized in the City of Heroes, Surabaya. Turnover continued to climb, from hundreds of thousands to millions of rupiahs per month. Eventually, he triumphed against the odds and has chartered quite an impressive record ever since. Attending various marketing and management seminars helped Hendy‘s business jump into the fast lane and in 2004, Kebab Turki Baba Rafi was developed into a franchise business. This strategy was successful and Hendy‘s business boomed. In just ten years of becoming a franchisor, 1000 Kebab Turki Baba Rafi (KTBR) outlets were opened across 3 Countries in Indonesia, Malaysia, and Philippines under the company name Baba Rafi Enterprise. In 2013, KTBR had reached total number of employees exceeding thousand people and turnover soared to Billions Rupiah per month Hendy has built such a successful business that he has been recognized in various business and media circles. For example, in 2006 Tempo Magazine chose Hendy as one of the top 10 leaders who is able to transform Indonesia. International Business Week magazine also named Hendy as ―Asia‘s Best Entrepreneur Under 25″ and he won ―Indonesian Small and Medium Business Entrepreneur Award‖ (ISMBEA) by Ministry for Cooperation &SME of Indonesia . In 2007, Hendy won the title of ―Best Young Entrepreneur‖ held at Bank Mandiri, in 2008 he got “Asia Pasific Entrepreneurship Awards 2008” –Most Promising Category – by Enterprise Asia from Malaysia. and in 2009 he won the ERNST & YOUNG Entrepreneur Of The Year. According to Hendy, he has always wanted to be an entrepreneur ever since he was young. ―I‘ve always been interested in making extra money from my interests and hobbies. When I was in primary school, I finished a video game called ―Mortal Combat‖ and my friends used to ask me how the way I did that game, so I wrote down the tricks and tip and sold it to them. When I was in high school, I had an interest in cars and audio stereo systems, so I started a little business specializing in car stereos
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. and installations. Then I was in University, I loved the taste of good food and now, well, you know the story‖. 1.3. Vision and Mission The mission of KTBR is to strive to be the lasgest, the profitable and the most influental Kebab Chain in the world. The mission of KTBR is striving to be the world‘s biggest kebab chain by upholding high quality affordable meals with superior service to our franchisees and customer and devoted improving our human resources and consistently implementing socially responsible programs that support our communities and shareholders. What is the principle Hendy in business? Hendy had a motto LATEM, which is the opposite of METAL (Indonesian slank that represents someone who brave to break the rules for a better things) L – See opportunities. (Lihat peluang yang ada) A – Observe the way and do. (Amati caranya & Lakukan !) T – Imitate the way that might be adopted. (Tirukan cara yang mungkin dapat diadopsi) E – Evaluate the opportunity. (Evaluasi peluang tersebut) M – Modifications have been that way. (Modifikasi cara yang telah dipilih itu ) 1.4. Introduction to Product Doner kebab is a Turkish dish made of meat cooked on a vertical spit, normally veal or beef but also a mixture of these with lamb; a cheaper version of chicken is also found. The dish is also widely known by its Arabic name, shawarma, or Greek, gyro. The sliced meat of a Doner kebab may be served wrapped in aflatbread such as lavash or pita or as a sandwich instead of being served on a plate. It is a common fast food item in the Balkans, Middle East, Europe, Australia, and New Zealand. Seasoned meat in the shape of an inverted cone is turned slowly against a verticalrotisserie, then sliced vertically into thin, crisp shavings. Toppings include tomato, onion, lettuce, pickled cucumber and chili. As far as kebab wraps go, the döner is the daddy. Having originated in Turkey during the nineteenth century (the word 'döner' means 'rotating') , the basic presentation has remained largely unchanged, though adaptation can be found across Turkey's neighbouring regions (if you're ever in the Middle East, reach for a shawarma – a smaller, more compact version of the döner, heavy on the potatoes and tahini sauce). The beef, chicken or lamb are stacked high on a rotating spit so that their natural juices cascade and filter down, ending up in a heavenly, fatty pool, into which the freshly cooked meat is sliced and allowed to bathe. The meat is scooped up and usually served in a pita bread, along with freshly sliced vegetables and a choice of sauces, although — back in its home region — the döner meat is often presented, undressed, on a plate, possibly with french fries or a side salad.
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. He then tells the beginning of the business that they do kebabs. Kebab is a typical Middle Eastern food (Middle East) made of roast beef, blended with fresh vegetables, and a seasoned mayonnaise, then rolled up tortillas. Actually, kebab many in Qatar and other Middle East countries. However, Hendy said, most delicious kebab is from Istanbul, Turkey. Because of that, he uses the ―trade mark‖ Turkey to attract prospective customers. These are the products of Kebab that KTBR offers today: 1. Original Kebab 2. Unyu Kebab 3. Piscok Kebab 4. Chicken Kebab
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. 5. Mini Chicken Kebab 6. Chijeu Kebab
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. CHAPTER II BUSINESS ISSUE EXPLORATION 2.1. Profile of Vietnam The Gross Domestic Product per capita in Vietnam was last recorded at 3434.97 US dollars in 2011, when adjusted by purchasing power parity (PPP). The GDP per Capita, in Vietnam, when adjusted by Purchasing Power Parity is equivalent to 16 percent of the world's average. Vietnam GDP per capita PPP averaged 1495.64 USD from 1985 until 2011, reaching an all time high of 3434.97 USD in December of 2011 and a record low of 494.71 USD in December of 1985. The GDP per capita PPP is obtained by dividing the country‘s gross domestic product, adjusted by purchasing power parity, by the total population. From data GDP of Vietnam, we can explain that Vietnam is still developing to more higher GDP and still continue today. One point that we can translate that, economically, Vietnam is more prosper and more people will buy more to fullfill their needs because they have money to buy those things include their basic need such as food and Kebab Turki Baba Rafi will grab this opportunity to provide foods and beverages as their life style. GDP PER CAPITA PPP | Notes The GDP per capita PPP given on this page shows PPP GDP at purchaser's prices divided by midyear population. Purchasing Power Parity GDP is gross domestic product converted to international dollars using purchasing power parity rates. Using a PPP basis is more useful when comparing generalized differences in living standards between nations because PPP takes into account the relative cost of living and the inflation rates of the countries, rather than using just exchange rates which may distort the real differences in income.
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. Consumer Price Index (CPI) in Vietnam increased to 150.37 Index Points in June of 2013 from 150.29 Index Points in May of 2013. Vietnam Consumer Price Index (CPI) averaged 75.44 Index Points from 1995 until 2013, reaching an all time high of 150.64 Index Points in February of 2013 and a record low of 41.66 Index Points in January of 1995. In Vietnam, the Consumer Price Index or CPI measures changes in the prices paid by consumers for a basket of goods and services. From the table of CPI, we can see that the power Vietnam Population on buying goods and services has rised significantly over the years but in the first quarter of 2013, CPI remain stable in 150 index points and this point is the higher point in Vietnam. CONSUMER PRICE INDEX (CPI) | Notes The Consumer Price Index or CPI measures changes in the prices paid by consumers for a basket of goods and services. 2.2. Vietnam Population The total population in Vietnam was last recorded at 88.8 million people in 2012 from 34.7 million in 1960, changing 156 percent during the last 50 years. Population in Vietnam is reported by the General Statistics Office of Vietnam. Vietnam Population averaged 61.12 Million from 1960 until 2012, reaching an all time high of 88.78 Million in December of 2012 and a record low of 34.74 Million in December of 1960. The population of Vietnam represents 1.27 percent of the world´s total population which arguably means that one person in every 79 people on the planet is a resident of Vietnam. This page includes a chart with historical data for Vietnam Population. Base on data Vietnam population, we can see the growth of population can be translated to the need of food and beverage will be higher yearly and Kebab Turki Baba Rafi should expand their business to Vietnam.Table Vietnam population can be seen below.
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. Tabel 2.2 Vietnam Population POPULATION | Notes Population estimates are usually produced by a country´s statistical office or Census Bureau. The Population Census provides the most reliable picture of a country's population because the data is collected at a specified time from the entire population; in contrast to other surveys, in which information is collected from only a small part of the residents. When monthly population estimates are required, the population count is updated by adding births, subtracting deaths, and adding net international migration since the census date. 2.3. Vietnam Work Force Vietnam work force can be explain in the table below. Population 91,519,289 (July 2012 est.) Age structure 0-14 years: 24.9% (male 11,924,283/female 10,824,773) 15-24 years: 19% (male 8,974,221/female 8,400,162) 25-54 years: 44.1% (male 20,130,321/female 20,205,400) 55-64 years: 6.6% (male 2,720,235/female 3,281,666) 65 years and over: 5.5% (male 1,940,755/female 3,117,473) (2012 est.) Median age total: 28.2 years male: 27.1 years female: 29.2 years (2012 est.) Population growth rate 1.054% (2012 est.) Birth rate 16.83 births/1,000 population (2012 est.) Death rate 5.95 deaths/1,000 population (July 2012 est.) Net migration rate -0.34 migrant(s)/1,000 population (2012 est.) Urbanization urban population: 30% of total population (2010) rate of urbanization: 3% annual rate of change (2010-15 est.) Major cities - population Ho Chi Minh City 5.976 million; HANOI (capital) 2.668 million; Haiphong 1.941 million; Da Nang 807,000 (2009) Sex ratio at birth: 1.12 male(s)/female under 15 years: 1.1 male(s)/female
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. 15-64 years: 1 male(s)/female 65 years and over: 0.62 male(s)/female total population: 1 male(s)/female (2011 est.) Infant mortality rate total: 20.24 deaths/1,000 live births male: 20.61 deaths/1,000 live births female: 19.83 deaths/1,000 live births (2012 est.) Life expectancy at birth total population: 72.41 years male: 69.95 years female: 75.16 years (2012 est.) Total fertility rate 1.89 children born/woman (2012 est.) HIV/AIDS - adult prevalence rate 0.4% (2009 est.) HIV/AIDS - people living with HIV/AIDS 280,000 (2009 est.) HIV/AIDS - deaths 14,000 (2009 est.) Sanitation facility access improved: urban: 94% of population rural: 67% of population total: 75% of population unimproved: urban: 6% of population rural: 33% of population total: 25% of population Major infectious diseases degree of risk: high food or waterborne diseases: bacterial diarrhea, hepatitis A, and typhoid fever vectorborne diseases: dengue fever, malaria, Japanese encephalitis, and plague water contact disease: leptospirosis note: highly pathogenic H5N1 avian influenza has been identified in this country; it poses a negligible risk with extremely rare cases possible among US citizens who have close contact with birds (2009) Nationality noun: Vietnamese (singular and plural) adjective: Vietnamese Ethnic groups Kinh (Viet) 85.7%, Tay 1.9%, Thai 1.8%, Muong 1.5%, Khmer 1.5%, Mong 1.2%, Nung 1.1%, others 5.3% (1999 census) Religions Buddhist 9.3%, Catholic 6.7%, Hoa Hao 1.5%, Cao Dai 1.1%, Protestant 0.5%, Muslim 0.1%, none 80.8% (1999 census) Languages Vietnamese (official), English (increasingly favored as a second language), some French, Chinese, and Khmer, mountain area languages (Mon-
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. Khmer and Malayo-Polynesian) Literacy definition: age 15 and over can read and write total population: 94% male: 96.1% female: 92% (2002 est.) School life expectancy (primary to tertiary education) total: 10 years male: 11 years female: 10 years (2001) Education expenditures 5.3% of GDP (2008) Maternal mortality rate 59 deaths/100,000 live births (2010) Children under the age of 5 years underweight 20.2% (2008) Health expenditures 7.2% of GDP (2009) Physicians density 1.224 physicians/1,000 population (2008) Hospital bed density 2.87 beds/1,000 population (2008) Obesity - adult prevalence rate 0.5% (2000) 2.4. PEST Analysis 2.4.1. Political Vietnam, a one-party Communist state, has one of south-east Asia's fastest-growing economies and has set its sights on becoming a developed nation by 2020. It became a unified country once more in 1975 when the armed forces of the Communist north seized the south. This followed three decades of bitter wars, in which the Communists fought first against the colonial power France, then against South Vietnam and its US backers. In its latter stages, the conflict held the attention of the world. The US joined the hostilities in order to stem the "domino effect" of successive countries falling to Communism. The war produced heavy casualties on both sides, atrocities against civilians, and the indiscriminate destruction and contamination of much of the landscape. Vietnam struggled to find its feet after unification and tried at first to organise the agricultural economy along strict collectivist lines. But elements of market forces and private enterprise were introduced from the late 1980s and a stock exchange opened in 2000. Foreign investment has grown and the US is Vietnam's main trading partner. In the cities, the consumer market is fuelled by the appetite of a young, middle class for electronic and luxury goods. After 12 years of negotiations the country joined the World Trade Organization in January 2007. But the disparity in wealth between urban and rural Vietnam is wide and some Communist Party leaders worry that too much economic liberalisation will weaken their power base. Vietnam has also struggled to restrain its trade and budget deficits. Its inflation rate reached double digits at the start of 2010 and approached 20% by the end of 2011, as food prices doubled, before falling back in 2012.
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. Despite pursuing economic reform, the ruling Communist Party shows little willingness to give up its monopoly on political power. Vietnam actively suppresses political dissent and religious freedom. Rights groups have singled out Hanoi's treatment of ethnic minority hill tribe people, collectively known as Montagnards. The human rights advocacy group Amnesty International says in a 2011 report that ''more than a dozen activists were convicted in faulty trials simply because they had peacefully voiced criticism of government policies''. A new wave of subversion trial began in 2013. 2.4.2. Economical Vietnam had an average growth in GDP of 7.1% per year from 2000 to 2004. The GDP growth was 8.4% in 2005, the second largest growth in Asia, trailing only China's. Government figures of GDP growth in 2006, was 8.17%. According to Vietnam's Minister of Planning and Investment, the government targets a GDP growth of around 8.5% for 2007. On January 11, 2007, Vietnam became WTO's 150th member, after 11 years of preparation, including 8 years of negotiation. Vietnam's access to WTO should provide an important boost to Vietnam's economy and should help to ensure the continuation of liberalizing reforms and create options for trade expansion. However, WTO accession also brings serious challenges, requiring Vietnam's economic sectors to open the door to increased foreign competition. [4] Although Vietnam's economy, which continues to expand at an annual rate in excess of 7 percent, is one of the fastest growing in the world, the economy is growing from an extremely low base, reflecting the crippling effect of the Second Indochina War (1954–75) and repressive economic measures introduced in its aftermath. Whether rapid economic growth is sustainable is open to debate. The government may not be able to follow through with plans to scale back trade restrictions and reform state-owned enterprises. Reducing trade restrictions and improving transparency are keys to gaining full membership in the World Trade Organization (WTO), as hoped by mid-2006. The government plans to reform the state-owned sector by partially privatizing thousands of state-owned enterprises, including all five state-owned commercial banks. 2.4.3. Social Cultural in Food’s Vietnam Food is a very important part of Vietnamese culture. The Vietnamese not only enjoy eating but believe eating good food can bring harmony and closeness to the family and relationships. The types of foods are chosen to bring luck and these vary from province to province. Shopping daily for fresh food is essential for all Vietnamese cooking. In general, Vietnamese people are not as concerned about nutrition as Western people. They are more concerned with the food’s texture, flavour, colour and aroma. Vietnamese cuisine is known for using fish sauce, soy sauce, rice, fresh fruits and vegetables and herbs and spices including lemon grass, lime and kaffir lime leaves. Throughout all regions of Vietnam, the emphasis is always on serving fresh vegetables and herbs as side dishes along with dipping sauce. The most common meats used in Vietnamese cuisine are pork, chicken, shrimp, cockles and various other kinds of seafood. Beef is usually used for one of the most popular dishes in Vietnam, ‘pho soup’ and the ‘seven course beef’ dish. A typical meal for
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. the average Vietnamese family could include individual bowls of rice; boiled, grilled steamed, stir fried or stewed meat, fish or other seafood; a stir-fried, raw or steamed vegetable dish; soup and fish sauce or soy sauce for dipping. Meal in Vietnam can be classiffied such as : 1. Breakfast - is preferably rice or noodles with milk, and some older people enjoy a bread roll prepared from rice flour. 2. Lunch - could consist of pork, chicken or fish with noodles or rice. (Vietnamese people do not eat lamb.) Soup for lunch is desirable but preferably separate containers for the soup and rice. 3. Afternoon tea - should be checked with the resident They might be interested in eating a piece of cake and drinking herbal or green tea. 4. Dinner - is the main meal and should be rice, a meat dish and vegetables and should not be a sandwich. The most popular Vietnamese dishes include: 1. Noodle dishes - Special Vietnamese noodles should be used which are extremely thin and woven into intricate bundles (e.g. Banh Hoi, Bun cha, Mi Quang or Bun thit nuong). 2. Noodle soups - A common characteristic of many of these soups is the rich and very tasty broth e.g. Pho, Bun bo Hue, Bun Mang, Bun Oc or Bun rieu). The most popular is pho - a noodle soup. There are many varieties of pho made from different types of meat but it is most commonly beef and chicken. 3. Rice dishes - There are numerous types of meat prepared in various ways that are served with the broken rice. The rice and meat are served with various greens and pickled vegetables, sometimes with a prawn paste cake and grilled prawns (e.g. Com chien Duong Chau, Com hen or Com tam). 4. Sticky rice dishes - The general idea is sticky rice with coconut milk, cooked the same way as the rice or steamed for a firmer texture and more flavour (e.g. Banh chung or Xoi ). 5. Wraps and rolls - Rice flour rolls are stuffed with ground pork, prawns and wood ear mushrooms (e.g. Banh cuon or Banh trang are made from ‗rice paper‘ - thin rice flour sheets). 6. Meat dishes - examples of these include beef and vegetables stew with spicy herbs (Bo kho),and cubed , marinated beef served with green vegetables, onion and tomato (Bo luc lac ).
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. 2.4.4. Technological Technology application wich is applied in Vietnam can be explain in the table below. Based on the tabel above we can see the total number internet user is developing from year 2009 to year 2010. The growth of internet user will be higher through the next year since the government of Vietnam has a plan to apply advance technology that is included in government program in Vietnam‘s goal 2020. The advantage growth of internet subscriber for food business can be explained the more the growth of internet user the easier for food business owner to advertise their food products to Vietnamese. KTBR will take a part in these particular advantage to advertise KTBR‘s products across Vietnam.
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. 2.5. Five Porter’s Analysis Five Porter‘s Analysis can be explained based on the pictures below. 2.5.1. The competitive rivalry in Kebab Food. Doner kebab is increasingly becoming popular in Vietnam among the locals. Throughout Hanoi and Ho Chi Minh City, many doner kebab stalls can be found, contributing to the local street food variety. Bánh mi doner kebab, the Vietnamese version of the doner kebab, has some fundamental differences with the original doner kebab. First of all, pork is used instead of beef and lamb. Second, the meat is served in a Vietnamese baguette, which is widely available in Vietnam. Thirdly, the meat is topped with sour vegetables and chili sauce. On contrary with many other countries in Asia, the doner kebab in Vietnam has been localized and is primarily consumed by the locals, while in other countries in the Far East kebabs are primarily sold to expats, tourists and the middle class, and the original recipe is used. New Entrants BuyersSuppliers Substitutes Industry Competitors Intensity of Rivalry Threat of Substitutes Threat of New Entrants Bargaining Power of Suppliers Bargaining Power of Buyers Determinants of Buyer Power Bargaining Leverage • Buyer concentration vs. firm concentration • Buyer volume • Buyer switching costs relative to firm switching costs • Buyer information • Ability to backward integrate • Substitute products • Pull-through Price Sensitivity • Price/total purchases • Product differences • Brand identity • Impact on quality/ performance • Buyer profits • Decision maker’s incentives Determinants of Substitution Threat • Relative price performance of substitutes • Switching costs • Buyer propensity to substitute Rivalry Determinants • Industry growth • Fixed (or storage) costs / value added • Intermittent overcapacity • Product differences • Brand identity • Switching costs • Concentration and balance • Informational complexity • Diversity of competitors • Corporate stakes • Exit barriers Entry Barriers • Economies of scale • Proprietary product differences • Brand identity • Switching costs • Capital requirements • Access to distribution • Absolute cost advantages Proprietary learning curve Access to necessary inputs Proprietary low-cost product design • Government policy • Expected retaliation Determinants of Supplier Power • Differentiation of inputs • Switching costs of suppliers and firms in the industry • Presence of substitute inputs • Supplier concentration • Importance of volume to supplier • Cost relative to total purchases in the industry • Impact of inputs on cost or differentiation • Threat of forward integration relative to threat of backward integration by firms in the industry
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. Cart Kebab in the corner of the street in Vietnam Kebab in Vietnam 2.5.2. The threat of Kebab Food Actually, KTBR is a new entrant in Kebab, and we compete in the existing Kebab Food in Vietnam. Kebab franchise is not exist in Vietnam and this opportunity can be grabbed by prensenting Kebab Franchise in Vietnam. Kebab is usually sold by individual owner that be brought by outsider and be developed with local taste. Raw material is easy to access because beef, as the main raw maerial for Kebab, is always in the market. Sour vegetable and chili sauces is used to be eat in Vietnam and is easy to find in the local market, traditional or non traditional market. 2.5.3. The Threat of Substitute Products Other substitutes that can be threathened to KTBR is chicken. Today, people usually tends to change their lifestyle to be healthier. One of our competitor that have been existed in Vietnam is Kebab Cafe. Kebab Cafe prepare and deliver high-quality and healthy kebab and crêpes, respecting Western hygiene standards while keeping the price reasonable. Pierre, Frenchmen, is the person who iniated this kind of Kebab business while he visited Vietnam as a businessman in big C, a foreigner hypermarket company. Vietnamese usually see Kebab as a junk food with full of fat. The meat is full of fat, the souce is full of fat, and then you stuff the whole thing with french fries. Pierre offers a new kind of Kebab wich is more fresh and healthy. Imagine indulgence sans guilt.
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. Kebab wich is more fresh and healthy Pierre, Frenchman, who initiated Fresh and Healthy Kebab in Vietnam All generations are kebab-happy The other products wich is more popular now in Vietnam is Pho. Pho is arguably the most popular food in Vietnam. It is served both at restaurants and in families, eaten for breakfast, lunch or dinner. This famous dish is basically rice noodle soup but the broth is seasoned in a very unique way that appeals to almost everyone. You can try pho in one of the street corners where every local gather or at more upscale restaurants such as Pho Vuong or Pho 24. Pho 24 also has a vegetarian option for pho, replacing beef and chicken with a variety of mushrooms.Pho is different kind of segment with Kebab because Pho is a noodle. So, we still have a market that can be developed to oppose Pho as the most popular food in Vietnam. Actually, Pho is a Vietnamese noodle soup consisting of broth, linguine-shaped rice noodles, a few herbs, and meat. It is a popular street food in Vietnam and the specialty of a number of restaurant chains around the world. Pho, the most popular dish in Vietnam.
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. 2.5.4. The Bargaining Power of Suppliers The Government's Livestock Development Strategy targets production of 5.5 million tonnes of meat and poultry in 2020, up from the estimate of around 3.8 million tonnes in 2008. It also envisages per capita consumption increasing to 57 kilograms in 2020, up from around 40 kilograms today. The strategy also foresees that meat and poultry will also become significantly more important within Vietnamese agriculture, with its output rising from about 30% of total agricultural output today, to 38% in 2015 and 42% by 2020. The underlying goal within this strategy is foreseen as the opportunity to substitute as much imported meat and poultry as is possible with local products. The strategy includes policies and programs covering: 1. Modernisation of the animal husbandry and poultry sectors, and shift more production from household-based farms to industrial farming. 2. Improving hygiene and food safety aspects of the meat and poultry distribution channels, including upgrading slaughterhouses and the cool chain. 3. Improving the genetic quality of herds and flocks, and breeding standards. 4. Reducing disease outbreaks to minimise the supply disruptions that have occurred on a fairly frequent basis over the past 5 years or so. 5. Establishing more cost effective animal feed formulations, and a more efficient animal feed industry. Vietnam‘s import of selected meat and poultry items in 2008
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. 2.5.5. The Bargaining Power of Customers Bargaining can be encompassed throughout the process of deal. The following are some these areas where a customer can bargain :  Obviously on the product price or any package of products what they buy. Obviously, customer buy Kebab because they need food to eat and Kebab is one of those kind of alternatives that have a special taste but the ingredients consists of what people need in their body such us carbohydrate, protein, vegetable, and most of Vietnamese choose food basicly for their taste, color, flavour, and vegetable.  On provision of services whether it is pre deal service or post deal. Most of vietnamese buy Kebab in restaurant and mobile cart that we can find it in most of food area such in and today in Singapore, Vietnam food is really one of favorite food that can be found there. The Vietnam Singapore Industrial Park (VSIP) is a flagship project initiated by the governments of Vietnam and Singapore. The maiden VSIP project is located in Binh Duong province's Thuan An district. The 500-hectare development is zoned primarily for industrial use.  On performance and efficiency. Kebab is always made when customer come and ask for Kebab. Cart Kebab is the cheapest and moveable so the seller of Kebab is usually prepare and sell Kebab where they think the targeted customer is there and they go to that place to sell it while the other kiosk is permanent building where the customer enjoy eating Kebab in a kind of small reaturant or maybe for take away option. This kind of selling types will give an advantage for seller and buyer to meet and their performance can be seen more directly to sell Kebab and to enjoy eating Kebab.  On technical aspects of process, products and system. The technical process of how to make Kebab is very simple. We just slice and chop the meat, chop the vegetable, put it on tortilla, and combine them, then flush with sauces. All the preparation of meat, vegetable, sauces, tortilla, is done before they get in store.  On product modification according to the changing technological trends. Today, Vietnamese is still looking of the taste, color, flavor, and vegetable in their food. The substitution of product is used to adapt local taste and attract consumer from other foods. More vietnamese also more aware of healthy life style and they aware of Kebab is a kind of food that most the ingredients from fat such as meat and sauces. Then, they change their habit and be a vegetarian. This life style should be understand for seller of Kebab and they must create an innovation to understand the need of consumer of Kebab by providing Kebab for Vegetarian or to substitute meat with chicken, fish, shrimp, or other meat that is less of fat.
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. 2.6. Internal Analysis 2.6.1. SWOT Analysis Strength S1-Hendy is a successful and experienced businessman who started business from zero. S2-KTBR has been developed more than 1000 branches. S3-Hendy is a successful leader S4-KTBR is a successful franchisee in Indonesia. S5-KTBR is a good management in developing franchisee in Indonesia. S6-KTBR is the first and the biggest franchisee in Indonesia. Weakness W1-KTBR is still need to be developed that can be brought to a higher segment level. W2-KTBR restaurant segment can be improved to be more comfortable hang out place. W3-The product of KTBR is less of menu provided while we can add other menu based on what customer needs. W4-The price of meat is higher for a certain season and need substitution. Opportunities O1-Market of Kebab is not yet saturated and Kebab is still one of the customer choice in Vietnam. O2-KTBF can join other business to expand such restaurant, hospital, dormitory, and in a cluster area. O4-The need of Kebab will be higher since Vietnam is developed their tourism. O5-KTBF can merger and acquisition with the existing Kebab in Vietnam to grab market. O6-Since government of Vietnam is supporting the tourism and develop infrastructure, Kebab is the best cuisine have ever known in several countries in the world. Threads T1-Shortage of capital to expand the business. T2-People should learn how to cook before they open KTBR. T3-There are many competitors with the existing Kebab and other restaurant that provide the same menu. T4-People do not know how to manage the business and how to advertise KTBR. T5-KTBR business is in bankrupt. T6-The change of business regulation in Vietnam if the leader of government is transfer to another leader. CHAPTER III BUSINESS SOLUTION This chapter will discuss about the analysis of internal and external analysis using business solution for this research. The detail of business solution describe in this chapter covers what should be implemented to enter Vietnam. Analysis customers inside provide to make sure the strategic will affect to the customer. 3.1. Generic Business Strategies KTBR‘s core competencies should be focused on satisfying customer needs or preferences in order to achieve above average returns. This is done through Business-level strategies. Business level strategies detail actions taken to provide value to customers and gain a competitive advantage by exploiting core competencies in specific, individual product or service markets. Business-level strategy is concerned with a KTBR's position in an industry, relative to competitors and to the five forces of competition. Customers are the foundation or essence of KTBR's business-level strategies. Who will be served, what needs have to be met, and how those needs will be satisfied are determined by the management. Who are the customers? Based on data in Vietnam Work Force, the customer of KTBR in Vietnam is all ages except for babies who can not eat Kebab. Their life style is usually busier or might be lazy so they need food that is easy, cheap, fast to make, delicious, full of vegetable and sauces. For people who eat pork, fish, chicken, or other meat, could be an optional one to meet the local taste and this option would attract more Vietnamese to eat Kebab as their life style. For vegetarian life style, we can provide Kebab for
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. Vegetarian person that is more fresh and healthy choice. Kebab could be a dished as a breakfast, lunch, suffer, dinner, or might be just a snack while you are working in your busy office. Vietnamese who eat Kebab could be a house wife, an employer of working office, student, or even a teenager. So, our consumer segmentation is huge. What are the goods that potential customers need? Our customer is classified as a low to medium class. As we see in the purchasing power of Vietnamese is the higher point ever. We predict, as the economy of Vietnam is still developing today and one of the fastest growing country in the ASEAN region, Vietnam will need food higher to the next decade. Today, as the developing economy of Vietnam, more people will change their life style from just eat food for a hunger reason to be eat food for a healthier reason. KTBR see this opportunity to develop our product to be healthier without changing our basic product, Kebab. How to satisfy customer needs? How customers choose to reach out to your business is an important piece of data to note. The rea- son why they‘re reaching out is even more important. They also desire to be acknowledged, listened to and understood, and treated with respect. KTBR will satisfy customer through: a. Customers Need To Be Acknowledged How do we acknowledge of Vietnamese? We usually understand the difference characteristic of Indonesian and Vietnamese. We must learn the habit of food consumption of Vietnamese and then we served Kebab to be the most popular food in Vietnam. b. Customers Need To Be Listened To and Understood What we sell in Vietnam is food, so we must listen to what they require. The specification of raw material, inventory of food, food preparation, and food served will be our concern to serve our customer in Vietnam. c. Customers Need To Be Treated With Respect Vietnamese food is not related in any way to the Chinese ‗yin‘ or ‗yang‘. Older people usually avoid eating yellow cheese and scrambled eggs because they contain fat and milk. Check with the residents as to their preferences as some Vietnamese people do not eat lamb or veal. Also check preferences regarding the use of chopsticks or other utensils. It is important to establish each person‘s food preferences, cooking style (e.g. fried or steamed rice), amount and timing of meals and record this as part of their care plan. Based on the explanation above, our strategies to expand KTBR are: 1. Continue to seek ways to develop franchise with the franchisee or designate continued 2. Introducing kebab products through promo - promo 3. Using the internet as a means of promotion 4. Open up new markets with different consumer interest 5. Prioritize flavor and quality 6. Obtain satisfaction from customers
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. 7. Provide the best service Our market segmentation: This product is sold in all circles and walks of life who love the flavor is believed to be typical of Kebab. Our target market: All Vietnamese people. 3.2. TOWS Matrix Weaknesses W1-KTBR is still need to be developed that can be brought to a higher segment level. W2-KTBR restaurant segment can be improved to be more comfortable hang out place. W3-The product of KTBR is less of menu provided while we can add other menu based on what customer needs. W4-The price of meat is higher for a certain season and need substitution. Strengths S1-Hendy is a successful and experienced businessman who started business from zero. S2-KTBR has been developed more than 1000 branches. S3-Hendy is a successful leader S4-KTBR is a successful franchisee in Indonesia. S5-KTBR is a good management in developing franchisee in Indonesia. S6-KTBR is the first and the biggest franchisee in Indonesia. Opportunities O1-Market of Kebab is not yet saturated and Kebab is still one of the customer choice in Vietnam. O2-KTBF can join other business to expand such restaurant, hospital, dormitory, and in a cluster area. O3-The need of Kebab will be higher since Vietnam is developed their tourism. O4-KTBF can merger and acquisition with the existing Kebab in Vietnam to grab market. O5-Since government of Vietnam is supporting the tourism and develop infrastructure, Kebab is the best cuisine have ever known in several countries in the world. WO strategies Create integrated relationship system in W1, W2, O2, O3, O4, O5. Create marketing team for W1, W2, W3. Increase capital for developing product diversification W3. SO strategies Create marketing strategic for O2, O3, O4, O5. Create R&D for O2. Innovation for O1. Threats T1-Shortage of capital to expand the business. T2-People should learn how to cook before they open KTBR. T3-There are many competitors with the existing Kebab and other restaurant that provide the same menu. T4-People do not know how to manage the business and how to advertise KTBR. T5-KTBR business is in bankrupt. T6-The change of business regulation in Vietnam if the leader of government is transfer to another leader. WT strategies Join with angel investor for T1. ST strategies Provide Training for T2, T3, T4, T5. Create R&D for T6. Innovation for T3.. 3.3. Distribution Channel Kebab Turki Baba Rafi (KTBR) is fast-food business that is well known in Indonesia. Since its opening in 2003, it is still rapidly and constantly expanding. With the delicious and unique kebab flavour being the main product of company, Kebab Turki Baba Rafi has successfully proven that is not merely a trend but a strong and constant business that has far-reaching potential beyond Southeast Asia.
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. KTBR is the largest local kebab franchise in Indonesia under management of PT. Baba Rafi Indonesia. It is managed by a young team made up of energetic and integral workers who are relentless in thier innovation. The Product has spanned over 8 years with over 1000 outlets across Indonesia. Winning numerous prestigious awards and proving over time thier professionalism and integrity, PT.Baba Rafi Indonesia is now ready to take KTBR to new heights globally with KTBR Go International. INKY SDN BHD is current Master Franchise Holder of KTBR in Malaysia, bringing the opportunity for Malaysians to become part of the biggest ever-growing local kebab franchise in Indonesia. Facilities And Terms Recruitment as a Franchisee : 1. Interested as a franchisee 2. Interested in kebab food products 3. Willing to work hard and take an active role in operating the business of KTBR 4. Committed to comply with standardized business of KTBR 5. Committed to developing the brand/product of KTBR 6. Have sufficient investment funds 7. Facilities You Need 8. Strategic locations to be rented : campus,shopping centres,malls,etc 9. Spacious lot to fit outlet 10. Labour (operators) that are qualified and trained by KTBR management 11. Freezer 12. Initial raw material 13. Housing for employees (if not local) 14. Facilities Offered 15. KTBR Management team will assist in survey for optimum location 16. Recruitment and training for employees 17. Complete pakage inclusive of equipments 18. Manual booklet (SOP) 19. Sales Software 20. Operating System that has been proven 21. Future cooperation of 4 years or 5 years 22. Support from a solid Management Team 10 Reasons why you should be a franchise of Kebab Turki Baba Rafi : 1. Strong research and development team 2. This is the largest local kebab franchise in Indonesia with over 1000 outlets and more then 8 years of experince. 3. You will have strong support from the management team in Malaysia and Indonesia. 4. We have an innovative menu - new products will be constantly introduced. 5. 50 : 50 Profit Sharing Investment Scheme (PROSIS). 6. Access to the Baba Rafi Academy training centre in Indonesia. 7. Located survey by our team to recommend the best location possible for your business. 8. Low and affordable start-up cost 9. Attractive kiosk design and unique taste of KTBR will capture and mantain custemer loyalty,in addition to the constant marketing promotions. 10. Food and beverage business generates revenue from day one (1) of business. 3.4. Revenue Stream KTBR revenue stream can be seen in the pictures below. We can classified base on the investment types, they are:
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. 1. Gerobak Type 2. Syariah Type
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. 3. Kedai Type 4. Booth Type
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. 5. Indoor Type 6. 25 Hours Type 3.6. Step to Implement the Business Model Our expansion to Vietnam is based on our valuation and assessment that is used to find out what is the advantage and disadvantage while we are move outside Indonesia. The proximity, Asian culture, market condition, are several reason we plan to go to Vietnam. To implement the business, we can do that by step by step that we can explain on the diagram below.
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. Social network preparation  Decide Penetration Area  Recruitment And Traning  Open Pilot Kiosk  Marketing and Sales Activities  Review and Evaluation 4. PROPOSE SOLUTION AND RECOMENDATION 4.1. Solution 1. KTBR expands their business to Vietnam based on the proximity, ASIAN culture, the life style of Vietnamese, and market of Kebab situation in Vietnam. 2. As a new market for KTBR, Five Porter‘s analyst explain that Kebab is not as popular as Pho, so KTBR has a rivalry in Vietnam. An innovation should be applied to attract a new market. 3. As a new market for KTBR, a SWOT analysis explain that KTBR should create a training program for the new franchise member and for the market expanding, KTBR should create team to assess a new market. From the product, KTBR should create a team to create R&D and innovation. 4. KTBR with its franchise system in Vietnam is the best option to expand their business. 4.2. Recommendation To implement and expand KTBR in Vietnam, there are several things that must take into accounts: 1. A first step to create a pilot project is a must. KTBR then by creating an R&D, marketing, innovation team can formulate market knowledge in Vietnam. 2. The fastest way to grab the market of Kebab is by merger or acquisition the existing Kebab Company in Vietnam.
  • business strategy formulation for kebab turki baba rafi in vietnam, jesmin manalu, sbm itb, july 2013. BIBLIOGRAPHY 1. http://sukses-biz.blogspot.com/2009/04/hendi-setiono-presiden-direktur-kebab.html 2. http://khodijahumah.wordpress.com/2013/03/24/hendi-setiono-president-director-kebab-turki- baba-rafi/ 3. http://www.timeout.jp/en/tokyo/feature/2371/5-to-try-D%C3%B6ner-kebabs 4. http://www.slideshare.net/teamcouncil/product-market-study-on-ict-industry-in-vietnam-feb- 2011?from_search=5 5. http://www.vietnamonline.com/faqs/what-is-the-most-popular-food-in-vietnam.html 6. http://kebab-cafe.com/ 7. http://www.impactlearning.com/how-to-satisfy-customer-needs/ 8. http://ika-marlina.mhs.narotama.ac.id/2013/04/10/analisa-kondisi-eksternal-eksternal-melalui- strengths-dan-weaknessess-pt-baba-rafi-indonesia/ 9. http://www.bfsmagazine.com.my/index.php?option=com_content&view=article&id=1626:busin ess-opportunities-kebab-turki-baba-rafi&catid=226:video&Itemid=1520 10. http://babarafi.com/new/en/investment-types/