Marketing Offering first quality meat. The products composed of various basic needs of household plus other complementary items. Kem Chicks had only one shop Operations Total labor count of 500 employees. Finance Kem Chicks is liquid. Internally generated funds are fully committed. Human Resource Training is made by Director. Reshuffling of personnel. Recruitment of younger personnel with higher education background. V. STATEMENT OF THE PROBLEM How will Kem Chicks expand its supermarket by its own investment while sustaining its growing operations?
VI. STATEMENT OF OBJECTIVES Short Term Objectives: a. To train its personnel in their careers. b. To produce high quality product. Long Term Objectives: a. To formulate a strategy in order to gain economies scale for existing supermarkets. b. To maintain and develop a competitive position in the growing industry. c. To expand its supermarket business. VII. SWOT ANALYSIS Strengths Weakness First quality meat Valuable human assets Harmonious relationship between employer and employees. Good personnel management Caters the needs of immediate community.
Lack of Marketing Strategies. Kem Chicks had only one shop. Weak long term strategic planning. Difficulty with over-the-counter communication Lack of internal control. No particular designation of job. Opportunities Threats Expansion of the business. Acquisition of rival terms. Diversification of the business Customers’ word of mouth. Rising interest rates. Declining price at all. Investment risk is at high level Increasing Competition Natural calamities Declining price of oil Government regulations, rules and policies Change in customers preference
VIII. ALTERNATIVE COURSES OF ACTION Given the facts examined, the alternative course of action will then focused on the types of franchising alternatives since it is stated that franchising has been thoroughly studied by group of individuals for Kem Chicks existing problem. 1. Indah Chaidir should come up with the Product Distribution type of franchising. 2. Indah Chaidir should enter into a franchising agreement called Entire Business Format franchising. 3. Indah Chaidir should consider the Product licensing arrangement type of franchising.
It Will not cater development of Kem Chicks internal management thus it does not support the supermarket as a whole. 2. Indah Chaidir should enter into a franchising agreement called Entire Business Format franchising. ADVANTAGE DISADVANTAGE Kem Chicks will have full control of the business. Mistake of one franchisee will bear to the image of the company
Security in the protection of the rights and property of the company. 3. Indah Chaidir should consider the Product licensing arrangement type of franchising. ADVANTAGES DISADVANTAGES Improve its quality control policies. No assurance of success. Right to manufacture or modify Kem Chicks in a certain area of distribution Will pre-empt all important position in the organization X. DECISION STATEMENT Considering that the industry is reaching toward the peak of its growth phase, Kem Chicks faces tough competition with a limited choice of land and location.
Also, an increasing bargaining position on the part of the shoppers, each element of the key success factors should therefore not be neglected. Since the profitability of the investment in a new outlet is highly dependent on the level of sales and cost, each of the success of this investment. Therefore, The group have concluded that the best solution to the problem is alternative course of action number 2 which is to enter into a franchising type called entire business format franchising because of the following reasons: • Franchisee operates exactly the same as franchisor because the entire franchise was provided by Kem Chicks.
• Kem Chicks will generate different types of income such as management fee, training fee, reporting system fee and other from the franchisee. • Privacy of their field of expertise or specialty will be maintained by Kem Chicks on their own because under this type of franchise, Kem Chicks is the sole provider of all information and needs of the franchisee upon proper payment. The group did not choose Alternative Courses of action number 1 . ” Indah Chaidir should come up with the Product Distribution type of franchising. ”because it will not cater development of Kem Chicks internal management thus it does not support the supermarket as a whole. The group did not choose Alternative courses of action 3 “Indah Chaidir should consider the Product licensing arrangement type of franchising” because there is no assurance of success and it will pre-empt all important position in the organization. XI. IMPLEMENTATION PROGRAM Short- Range 1. To build a franchise relationship founded upon a contract, which should contain all the terms agreed upon. 2.
To develop first a successful business format (the system), which is identified with a brand name, be it a trademark, service mark and/or trade name. 3. To initiate and set a period wherein they will train the franchisee in the operation of the system prior to the opening of the business so that the franchisee is equipped to run the business effectively and successfully. Kem Chicks must also assist with the opening. Long-Range 1. To maintain a continuing business relationship with the franchisee to provide the franchisee with support in the operation of the business. 2.
To permit the franchisee, under the control of the franchisor, 3. To operate under the branding and the business systems developed and owned by the franchisor and to benefit from the goodwill associated therewith. 4. To make a significant capital investment from own resources. 5. To make the franchising of the supermarket business successful, we should consider the key success factors. These factors consist of: a. Sufficient capital for investment. b. Managerial Skill/Human Resource c. Location d. Quality of Service e. Image ( brand and product image) f. Quality of exclusive product and assuranceg. Atmosphere and security h. Accessibility (parking, supporting and facilities) i. Layout and design XII. PROPOSED OPERATIONAL PLAN Management Develop the various strategies to attain long term and strategic planning Recommend training on each division Convey a sense of family unity in the organization Decisions and full responsibilities are made by the directors Marketing Offering first quality meat Promotional activities are decided by the Kem groups Its product compose of various basic needs of household plus other complementary items Kem chicks had only one shop
Operations Distributing sausages through Jakarta and surrounding areas Total labor count of 500 employees PT Kem foods that processed meet supply Has a current capacity to produced 900 tons of meet a year Finance Internally generated funds are fully committed Kem chicks is liquid Leading among the cumulative value of transaction of non major supermarkets Human Resource Recruitment of higher educated your personnel Reshuffling of personnel Training courses are made by the director XIII. OTHER PROBLEMS AND RECOMMENDATION Problems Recommendations 1.
What will be the Kem Chicks franchise agreement? The franchise agreement grants to the franchisee the right to operate a Kem Chicks supermarket, at a single address, for a period of 10 years. These rights include the use of Kem Chicks trade name and trademarks, proprietary products, store design, signage , and use of Kem Chicks methods of operation. In return the franchisee agrees to operate the business in accordance with the Kem Chicks established standards of quality, service, cleanliness and customer service. The Franchisee is expected to do hisutmost best to operate his store to achieve the fullest potential of the store in terms of profitability and customer delight. 2. What does Kem Chicks look for in a prospective Franchisee? Kem Chicks looks for a franchisee applicant with the following characteristics: Highly motivated and shares the same values as Kem Chicks in terms of commitment to human resources, quality and service. Dedicated to running the business on a full time basis, not as an investor but as a hands-on operator. Financially capable of meeting the financial requirements.
With an entrepreneurial drive willing to take calculated risk, and with the strong desire to succeed. With business management skills preferably with food or retail experience. Very good interpersonal relationship skills. Willing to operate within the Kem Chicks system. 3. How much is the franchise fee? The franchise fee, which is paid upon the signing of the franchise agreement, is for the rights to use the franchisor’s trademark and business system as well as for the activities at the start of the franchise agreement such as site evaluation, assistance in recruitment and training for the initial store team. 4.
Does Kem Chicks provide financing? No, Kem Chicks does not provide financing. 5. How long is the Franchise Term? The Franchise term is for ten (10) years. 6. How much is the royalty fee? The royalty fees are paid on a monthly basis for the on going use of the Kem Chicks name and systems as well as for the continuing support activities of Kem Chicks. a) Full Supermarket- 10% of purchase goods. b) Meatshop- 25% of total monthly gross sale. 7. How much is the Advertising fee? The advertising fee is 2% of the total sales derived from both supermarket and meatshop and is paid on a monthly basis. 8. Will training be provided?
Kem Chicks will provide training for one Managing Director, the management team and the crew who must all successfully complete the Store Operations Training Program. The training for the initial batch of hires will be free of charge but all succeeding training for new employees will be charged. Training excludes salaries, meals, transportation, lodging cost of the employees and out of pocket expenses of trainers for training activities conducted outside of Jakarta. The Franchisee’s Managing Director and store crew will also be required to attend trainings during the duration of the franchise term to upgrade their skills.
A Kem Chicks Operations Manual will also be provided for the reference purposes and will be updated as needed. 9. Will Kem Chicks provide the manpower to operate the store? Kem Chicks team will assist the franchise in the recruitment of its personnel free of charge for the initial store team but recruitment cost will be charged for succeeding hires. The store personnel will be directly hired by the franchisee and will be responsible for their salaries and benefits. 10. Who looks for the location?
When you apply for the Kem Chicks franchise, you may propose a site location, together with an initial market study of the proposed site, which will include the foot and vehicular count, competitive business establishments, and demographics (area profile). Our site selection Department will assess the site and validate the market study. 11. What continuing support will I receive? Ongoing support includes regular in – store visits to help you identify areas of improvement, assistance in the development of marketing and customer relations programs and activities, new operating procedures, and much more.12. What will my return in investment be? Although the brand name of Kem Chicks is a strong sales inducing factor, the amount of money a franchisee can expect to make will greatly depend on the ability of the franchisee to manage the business, drive sales volume, and control operating costs. 13. Is there territorial or area exclusivity? Kem Chicks does not grant territorial exclusivity. Stores may be situated depending on market and customer needs. 14. How can I apply for a franchisee? 1) Fill out completely the Franchise Application Form. 2) Prepare the following:
Letter of intent addressed to the Franchise Relations Manager Address, location, and vicinity map of proposal (to include site description, including business establishments within 1 km. radius) Comprehensive resume of the applicant (personal background information credit references, latest ITR, fixed assets and liabilities, proof of billing address, list of membership organizations, 2×2 colored photograph) XIV. MANAGEMENT LESSON LEARNED 1. Thorough knowledge on franchising business can choose among a wide range of distribution and expansion strategies, the group learn about the history of franchising and how it affects the industry.
Franchise system played a big role in expanding businesses. 2. Economics of scale in order to stay in the industry, growing your business is a must. Growth can make good business sense better brand recognition, building value in the business for employees and customers, offering a wider range of products and services to a larger geographical markets, and creating “economies of scale”. 3. Develop your people – They prioritize their human resources development. Developing the capability and potential of your people is a key leadership and management competency.
It shouldn’t be optional. 4. Franchising offers business owners a vehicle to quickly expand their businesses and increase market share without a major capital investment. 5. Franchising is a business partnership between a franchisor and a franchisee. The franchisor is the current legal owner of a franchising enterprise while the franchisee is the party interested to replicate the business in another location. 6. Systematic planning can result in the consideration of new products, new markets and new ways of doing business.
A company considering expansion into a new market segment must plan all facets of this endeavor from manufacturing needs to marketing support. 7. Effective staff management is essential to ensuring your workplace runs smoothly and efficiently, and that the right employees are in the right positions. Employees who are well-managed and receive continuing training and evaluation are better prepared to do their jobs and to serve your customers. This can lead to better profits, more satisfied clients and an increase in repeat business.