Managing Small & Medium Enterprise

Company: KWONG CHEONG THYE

Group Members:
Kor Qi Min Crystal
Lee Yan Kang
Ng Yong Jian
Sahil Jethi
Tham Jia En Bridget
Yeo Si Hian
Tutorial Class: T01
Tutor: Mr Boh Thye Joon

Contents
Page
1. Kwong Cheong Thye.......1-4
1.1 Brief History
1.2 Industry Research
1.3 Critical Factors that led to success
2. External Environment Analysis4-7
PEST approach
3. Industry Analysis..7-9
Michael Porters 5 Forces
4. SWOT Analysis9-14
5. Business Expansion Plan..14215.1 Overseas Expansion
5.2 Local Expansion
5.3 Marketing Plan
5.4 Resource Management Plan
5.5 Funding Plan
6. Conclusion......21-22
7. Appendix

Kwong Cheong Thye

The Small and medium enterprise I have selected is Kwong Cheong Thye. Kwong
Cheong Thye qualifies as an SME as their annual sales turnover does not exceed
S$100 million and have an employment size of roughly 70 workers.
Industry type/Core business
Their company is in the food manufacturing industry and has a core business in the
manufacturing of soya sauce. Under their belt, there is more than just soya sauce. They
have a complete range of seasoning and cooking sauces, condiments, moon cake,
Yusheng, noodles, as well as pastry paste. By trying to be the top player in their league,
they adhere to authentic recipes and use top quality raw materials so as to produce the
finest products.
1.1 Brief history
Mr Choo Wai Luens grandfather, who migrated from China to Singapore, founded
Kwong Cheong Thye. With meager savings, he set up a shop manufacturing soya
sauce to food suppliers. From a humble shop in Jalan Sultan producing soya sauce,
Kwong Cheong Thye has come a long way. With a factory situated in Senoko, equipped
with up to date machinery, their products are consumed and are well sought after by 90
percent of top hotels and restaurants in Singapore. Kwong Cheong Thye also has a
specialty shop in Aljunied, carrying a complete range of their product line, catering to
non-industrial consumers. In 2001, Kwong Cheong Thye had a vision for expansion and
therefore took a risk to venture into overseas markets. With time, all their risk paid off
and as of present, they are one of well known/main exporters to over 10 countries. The
major markets of their export business are in China and Dubai.
1.2 Industry research/ Reasons for choosing this SME
According to statistics, the food manufacturing sector has been growing well in the past
five years, experiencing an 11 per cent average growth in sales(Appendix A). A growth
in the food industry together with an increase in consumer spending (Appendix B)

enhances the demand for Kwong Cheong Thyes products domestically. Since Kwong
Cheong Thye supplies key ingredients in food preparation, a growth in the food industry
would only mean a boost in output for the company. Furthermore, the lack of time and
cooking abilities of many Singaporean working adults would boost the sales of Kwong
Cheong Thyes ready-made condiment and cooking paste (For e.g. chicken rice paste
and Kway Teow mix) since it is an ideal alternative solution to the preparation of home
cooked meals. Being childhood friends of Mr. Choo Wei Luens son, we deliberately
chose Kwong Cheong Thye as our selected SME as we could obtain first-hand
business insights and key information needed for my report.

1.3 Critical Factors that led to business success

1.3.1 Support by IE Singapore
International enterprise (IE) is a government agency that is responsible for promoting
international trade and overseas growth for Singapore based companies. When Kwong
Cheong Thye decided to venture overseas 11 years ago, IE assisted the company by
subsidizing the majority of the expenses-70%, for holding Food Fairs abroad. Thus,
Kwong Cheong Thye as an infant company was able to enhance its brand name and
recognition, which served as the driving force behind the increases in product
awareness of the company Internationally. Furthermore, these subsidies also enabled a
product innovation to be carried out which was the catalyst of the vast improvement and
diversity of products produced. IE also recommended Kwong Cheong Thye to display
prominently the contents of their products in nutrition labels, which eased businesses in
making more informed choices. This allowed Kwong Cheong Thye to secure many
partners abroad. Furthermore with the initial backing of IE, a government agency,
Kwong Cheong Thye was able to gain recognition, which improved their export
competitiveness.
1.3.2 Support by Spring Singapore
Spring Singapore is a subsidiary of the Ministry of Trade and Industry, which aids the

growth of Singapore Enterprises and aims to build trust in Singapore goods and
services. It helps partners with their various economies, which in turn allows partners to
reap internal economies of scale. Spring Singapore has helped Kwong Cheong Thye in
various ways. For example, they aided them during their initial stages of production by
covering the interest payments on the bank loans that had to be taken out on capital
goods such as machinery. This helped ease the problem of a shortage in short-term
capital and allowed Kwong Cheong Thye to operate more efficiently and effectively with
a higher quality and quantity of machinery. Thus Spring Singapore can be regarded as a
success driver for Kwong Cheong Thye during its infant years of development.
1.3.3 Product Differentiation
Kwong Cheong Thye has also recognized the need for its products to be differentiated
in order to serve different consumer bases. Different consumers have different taste and
preferences and Kwong Cheong Thye has taken this factor as one of the most
important factors in their production processes and has made an effort to capitalize on
these varying preferences by carrying out research and development in order to gain
niches in different markets. For example in terms of Kwong Cheong Thye`s exports,
they have varied the products in countries such as Japan and Dubai. The products
made available in Japan are less spicy compared to the products sold in Dubai. This is
due to consumers in Dubai being accustomed to spicy delicacies and the products of
Kwong Cheong Thye serve as vital ingredients in order enhance the taste of these
delicacies. Thus, product differentiation and innovation has benefited the company and
its consumers in terms of firm attaining dynamic efficiency.
1.3.4 Executives` Entrepreneurial Mindset
Mr Choo Wai Luen and his wife have acknowledged the need to constantly diversify
their products in order to remain competitive in the food manufacturing industry. Their
market position has constantly been under threat by other companies such as Lee Kum
Kee, Tai Hua and Primadeli Sauces. This has spurred the company to seek to develop
new and improved products in order to retain his share of the market. Furthermore,
Kwong Cheong thye are also on the constant lookout for prospective suppliers of their

product both abroad and locally and serve to venture into overseas market. This
enabled economies of scale to be reaped, allowing the company to earn a higher profit
margin. This in turn fueled the company to carry out more Research and Development,
which has allowed it to produce better quality products.
2. External Environment Analysis (P.E.S.T)
2.1 Political-Legal
Low political risk
What makes Singapore the top financial hub in Southeast Asia is its high demand for
cash management and trade finance (Appendix C). Therefore, the political risk in
Singapore is very low for SMEs because the Singapore government mq is able to offer
a safe and secured business environment for small and medium enterprises. The
Ministry of Trade and Industry (MTI) is tasked with anticipating problems and identifying
opportunities for growth. Kwong Cheong Thye can turn to an agency under MTI known
as SPRING Singapore for loans of up to $15 million to expand their business(Appendix
D).
Free Trade Agreement
Since the signing of its first Free Trade Agreement (FTA) under the ASEAN Free Trade
Area (AFTA) in 1993, Singapore's network of FTAs has expanded to cover 18 regional
and bilateral FTAs with 24 trading partners(Appendix E). Local companies like Kwong
Cheong Thye can benefit from privileges under the FTA agreements. These privileges
include faster custom clearance, lower import costs, and elimination of duplicate testing,
export competitiveness and faster time to market.
Foreign worker policy
However, from August 2014 onwards, firms that want to hire foreign professionals must
first prove that they have tried to hire Singaporeans through advertising in a national
jobs bank administered by the Singapore Workforce Development (Appendix F).
Otherwise, the foreigners employment pass application would be rejected. This would

be a disadvantage towards Kwong Cheong Thye since they would not be able to take
advantage of the lower wages that they pay their foreign employees.
2.2 Economic
Economic trend
The current economic trend in Singapore would give an indication of the future
economic trend so that KCT can decide whether to further develop their business. The
GDP at market prices for the manufacturing industry increased from S$53,999.8 million
in 2009 to S$67,189.7 million in 2012 which shows that the manufacturing industry is
doing well and producing at a higher output (Appendix G). A higher GDP indicates good
health in the economy and that there are a higher amount of demands to meet the
growing economy. Therefore, it is safe to say that the manufacturing economy is quite
stable and that it is a good time for Kwong Cheong Thye to expand because there will
definitely be demand and in general, people can afford to spend.
Currency
Singapores strong currency rate has a significant consequence on the companys
profitability. With Singapores strong currency, Kwong Cheong Thye has an increased
purchasing power since the materials imported for production would be less expensive.
This would in turn have a positive impact on the cost of production. However, the
downside of a strong currency is its negative impact on Kwong Cheong Thyes
international business importers. Making payment with a weaker dollar, they would incur
a higher purchasing cost. They may substantially reduce their buying quantity if they
look for a cheaper alternative import destination.
Aid International Trade
International Enterprise (IE) Singapore is the leading agency under the Ministry of Trade
and Industry spearheading the development of Singapore's external economic wing. Its
mission is to promote the overseas growth of Singapore-based enterprises and
international trade. Kwong Cheong Thye can rely on IE Singapore to help them I in
promoting the export of Kwong Cheong Thyes goods and services aiding their

expansion. International Enterprise (IE) Singapore can also help Kwong Cheong Thye
to grow by organizing trade fairs and exhibitions. For example, Singapore based SMEs
can attend SIAL (Salon International de I'Alimentation), a trade fair as part of the
Singapore Pavilion, bringing local food manufacturers and distributors to one of the
largest food and beverage exhibitions in the world (Appendix H).
2.3 Social-Cultural
Competitive Culture
Singaporeans have a natural competitive culture, which makes them unwilling lose out
to others. This has increased Singapores productivity to some extent because
Singaporeans work extremely hard to retain or fulfill their materialistic desires.
Therefore, the business sectors can expect a higher purchasing power from domestic
customers. With confidence in the domestic market, Kwong Cheong Thye can further
introduce new product to satiate the local consumers.
Requirements of different ethnic groups
Due to Singapores ethnic diversity, Kwong Cheong Thye has to always adhere to the
various requirement of each ethnic group. Since the company is already halal certified,
it must also ensure there is no beef or beef constituents to cater to Buddhist and Hindu
population. Following this principal will give Kwong Cheong Thyes products vast
international acceptance.
2.4 Technological
Technologically Advance
The level of technology in a country can determine the life cycle of a product or service
in its industry. Since Singapore is fast paced with all relevant technology, Kwong
Cheong Thye would not face problems upgrading and attaining relevant machinery.
Also, Kwong Cheong Thye can depend on technology to further expand its business.
For example, they can market their products and services on social networking sites,

instead of other conventional marketing methods. This would help to save cost, and
interact with a broader consumer segment.

3. Industry Analysis: MICHAEL PORTERS 5 FORCES

3.1 Supplier Power (High)
Kwong Cheong Thye has numerous loyal customers who are in constant demand of
their products. Kwong Cheong Thyes soya sauce, seasonings and cooking sauces
(which include the famous laksa and chicken rice paste) are much sort after ingredients
for numerous Asian delicacies. Therefore, their products are instrumental in the
preparation of dishes in many households and restaurants. This results in Kwong
Cheong Thye having a huge consumer base. Furthermore, the good public relations of
Mr Choo Wei Luen and his wife have established the company as the to go to
company for food preparatory ingredients for its customers ranging from average
households to high-end hotels and restaurants. This has allowed the company to gain
significant market share and have significant control of prices.
3.2 Buyer Power (Low)
Due to the nature of their products being a necessity in food preparation, there will be a
large number of buyers in the market for Kwong Cheong Thye. The change in demand
of one buyer is unlikely to affnect the prices of the products on a whole as the individual
demand of each buyer only forms a small proportion of the entire market demand.
Furthermore, many buyers would be unwilling to worsen their relations with Kwong
Cheong Thye as they may not be offered the current discounts that they are presented
with.

3.3 Competitive Rivalry (Mid)

Although there are many other firms in the food manufacturing industry, Kwong Cheong
Thye has been able to differentiate its products such that they favor the taste of its
consumers. For example, Singaporeans tend to enjoy a tinge of spiciness in their food
and Kwong Cheong Thye has innovated its products as such. The threat of competition
by other firms is also reduced by intense loyalty of Kwong Cheong Thye`s customers.
The firms loyal customers appreciate the undeviated uniqueness of Kwong Cheong
Thyes flavors. Although there still exists rivalry of competitive firms, Kwong Cheong
Thye successfully eliminated the possibility of extreme rivalry in supply for products in
the food manufacturing industry.
3.4 Threat of Substitution (Low)
The products sold by Kwong Cheong Thye are not easily substitutable as they carry
with it a unique taste and contents. Furthermore, consumers are unable to simply make
these products at home as most are unaware of the preparation methods of the sauces
and also it is not feasible to replicate the products. In addition, customers are too busy
to create their own food preparatory products and they are contented with simply
purchasing them from Kwong Cheong Thye.
3.5 Threat of Entry (Low)
The Food Manufacturing industry has high barriers to entry in terms of brand loyalty,
high capital outlay and economies of scale being reaped at only a high output level. The
entry of new firms into the industry will not attract buyers to switch to purchasing from
these new firms, as they are contented with the products produced by Kwong Cheong
Thye and its existing competitors. Furthermore, there is a need for expensive capital
goods to be purchased in order to produce goods. A large sum of money has to be
allotted to conduct research and development to produce goods that are comparable to
the standard of products offered by Kwong Cheong Thye and its existing competitors. It
is difficult for firms to attain this initial capital and hence this would deter them from
entering the industry. Key players in the food manufacturing industry, such as Kwong

Cheong Thye, would also be able to adopt predatory pricing due to their large market
share, which will drive out the new firms from the industry. Thus, it is difficult for firms to
enter the industry and erode the market power of Kwong Cheong Thye.
4. SWOT Analysis
4.1 StrengthsImmense loyal customer base
Over the years, Kwong Cheong Thye has built a strong and trusted relationship with its
customers. It has a vast number of loyal customers ranging from ordinary homemakers
to chefs of high-end restaurants. Mr Choo Wei Luen himself verified from the continuous
feedback from his customers that they think of no other substitution in their food
preparation except Kwong Cheong Thye sauces and products.
International market attractiveness
Globally Singapore had made a niche in the international food industry. It adheres
strictly to high standards of hygiene, optimum standards of production, as well as strict
food safety standards. As Kwong Cheong Thye is a Singapore home grown brand, it is
easier for it to penetrate new international markets. Furthermore, being equipped with
HACCP, Halal certification, ISO22000 and other trusted brand awards have paved a
smoother road for Kwong Cheong Thye to enter the international market front.
Product differentiation
Kwong Cheong Thyes strength in their market penetration lies in their product
differentiation through customization. They keep in mind the different palate
preferences of their customers without compromising on the quality of their product.
Adopting product differentiation has proved successful for Kwong Cheong Thye,
allowing the company to clinch many overseas clients.

4.2 WeaknessLack of focus on household consumer market

Kwong Cheong Thye and its key competitors, Lee kum kee and focus heavily on the
industrial consumers (Hotels and restaurants). Lee kum kee and Woh hup, however, set
themselves apart from Kwong Cheong Thye by targeting predominantly on nonindustrial consumers. They reach out to vast consumers through various channels, for
example supermarkets. At the same time, they enhance their product visibility by paying
for priority (eye level) shelf space. The extensive product lines (ranging from sauces to
ready made mixes) that Lee kum kee, prima sauces and Kwong Cheong Thye other
competitors carry are prominently displayed at supermarket shelves. On the contrary,
Kwong Cheong Thye only displays a few out of their vast range of products at
supermarkets (Appendix I). The companys extensive range of products is displayed at
their sole flagship store, narrowing their product awareness to a limited clientele.
Management issue
Kwong Cheong Thye, being a family run company, does not have a proper
organizational structure. It relies on traditional business methods, which is inadequate in
todays technological age. (no database for customers) Since the roles and
responsibilities are not clearly defined in Kwong Cheong Thye, the companys
productivity tends to be lower. Mr and Mrs Choo oversee the entire business
singlehandedly since there are no specific departments. It leaves them no time to
identify new markets and expand the existing business.
Lack of advertising and promotional activities
After the year 2002, Kwong Cheong Thye has not advertised its products. The
companys rivals, such as Lee Kum Kee, are however aggressively advertising their
products on local television media channels during Primetime hours, 6pm-10pm,

therefore marketing and raising awareness of their product line to a generous number of
viewers. Lee kum kee, competitors of Kwong Cheong Thye, have also assertively gone
to the extent of creating an IPhone app (Appendix J) and organizing cooking contest
(Appendix K) to promote their brand awareness. Following Lee kum kee closely is Woh
Hup. Woh Hup, too, participates in attractive promotional activities such as offering
overseas holiday getaway contest and supermarket vouchers (Appendix L). As a result
of not giving much heat to the intense advertising and promotional efforts of their rivals,
Kwong Cheong Thye suffers from low brand recognition and product awareness.

4.3 OpportunityRoom for local expansion

As more women are entering the workforce, there is a change in the mindset of ready
made sauces and meals. With time constraints, household consumers (non industrial)
are more receptive to readymade products (Appendix M).Traditionally, Kwong Cheong
Thye has not placed much importance on targeting the potential market of domestic
household users. They primarily focus both domestically and internationally on the
wholesale business with major clienteles such as top hotels and top restaurants. Kwong
Cheong thye can take advantage of the present receptive perception towards ready
made sauces and time constraints of Singaporean households by targeting this
upcoming and growable market. Moreover, Kwong Cheong Thye can focus on
advertising, as it would inadvertently raise the awareness and knowledge of their vast
range of products to a broader segment of household consumers.
With stiff competition, Kwong Cheong Thye has to keep evolving by understanding
consumer trends. Singapores fast aging population will open an opportunity for Kwong
Cheong Thye to produce ready made meals that is compatible to the sensitive stomach
of the elderly. The company can also diversify into the restaurant business, given
Singaporeans passion for dining out.

Room for overseas expansion

In order for Kwong Cheong Thye to have a strong foothold in the export business, it
needs to look beyond its main export markets.
India
With Globalization, India is ready to aware and ready to embrace new cuisines, with
Chinese food gaining rapid popularity. Many Indo-Chinese restaurants have
mushroomed in the last few years. Indian Chinese food isnt just served by restaurants
big and small, but also by handcart owners, highway food stalls and mobile Chow Mein
vans. (Appendix N)
United States
Over the years, Americans have visited China and more Chinese have migrated to the
States. As of this day and age, America has moved away from the limited selection of
American Chop Suey and fortune cookies to a more diverse authentic Chinese food.
(Appendix O)
People are more receptive towards Chinese food therefore it is a wise move to tap the Indian
and American market. Since the nature of Kwong Cheong Thyes products are essential in the
preparation of Chinese food, the company can benefit from the overwhelming demands of
these overseas economies.

4.4 Threats Difficulty in attracting skilled labor

The key to success and expansion of the company lies in a good organizational
structure (Appendix P). Without the structure, a company would face inefficiency and
stifled expansion. Since Kwong Cheong Thyes business expansion is in the pipeline, it

would need to maintain corporate productivity during times of growth. This would mean
that the company would have to compensate its lack of organizational departments i.e.
Human Resource by hiring skilled labors. However, predominantly family run
businesses like Kwong Cheong Thye face an uphill task in attracting skilled labor and
professionals. Job seekers still tend to view employment in SMEs as second choice
due to lack of training opportunities, long-term career prospects and unattractive
benefits. This same viewpoint is being shared by Mr Lim kee choon,director of
partyware and food packaging retailer SKP.

5. Business Expansion PlanKwong Cheong Thyes business expansion plan capitalizes on their companys
strengths, counters their weaknesses, seizes their companys opportunities and reduces
their current threats
5.1 Overseas expansion plan
Kwong Cheong Thyes history traces back to a humble shop in Jalan Besar producing
Soya Sauce. Though it has come a long way, there is still room for its expansion. With
globalization, Chinese cuisine has steadily gained interest internationally. Thus, it is
timely and significant in preparing Kwong Cheong Thye to expand into new untapped
overseas food markets.
Venturing overseas expansion plan
Kwong Cheong Thye can consider widening its overseas market presence. The
company can harness present consumer trends and tap on large high potential markets
such as India and The United States.
The first springboard into the American and Indian market should start with proper
business networking and knowledge. Kwong Cheong Thye can participate in Tasty
Singapore Culinary Mission (TSCM), held annually by IE Singapore, to provide an

excellent opportunity for the company to build a strong business network and alliance in
America (Appendix R). Simultaneously with showcasing its capabilities to prospective
buyers, Kwong Cheong Thye could also gain an insight on the American market through
interactions. As for the targeting the vast Indian market, Kwong Cheong could
participate in Government-led trade missions to India (Appendix S). These trade
missions can introduce Kwong Cheong Thye to local food distributors and agents.
Through the trade missions market briefings, networking events and visits to specific
businesses/government agencies, Kwong Cheong Thye will be able to spearhead its
movement into the potential Indian market.
Products to market (India)
Though Chinese food is gaining popularity in India, the Indian palates will still have
some reservation and hesitation towards truly authentic Chinese flavors. Certain Kwong
Cheong Thyes products like their plum sauce, steam fish sauce and other authentic
Singaporean mixes (e.g Sambal Kang Kong/ Char Kway Teow mix) may need a while to
coax the Indian population into trying it. Kwong Cheong Thye can start penetrating the
Indian market with their basic products such as their light/dark soya sauce and Chili
sauce without much consideration. Given the immense vegetarian population, Kwong
Cheong Thye can also market its vegetarian oyster sauce, vegetarian rojak paste as
well as their range of vegetarian noodles.
Products to market (United States)
America, being the quintessential melting pot of different ethnic groups, is more openminded towards exotic cuisines of diverse cultures. Kwong Cheong Thye would have a
ready market for its pre-made Singaporean mixes since majority of the people in the
United States are willing to prepare a Singaporean meal with pre-packed ingredients at
home. Also, since Chinese food topped Americans Asian food preferences (Appendix
R), Kwong Cheong Thye can market its wide range of essential products, such as plum
sauce and Hoi Sin sauce, necessary in Chinese food preparation

5.2 Local expansion

Supermarket expansion
Kwong Cheong Thyes products found in major supermarkets are limited to their Soya
Sauce. Though they have an immense range of products, many household consumers
are unaware of its extended range. Since supermarkets have heavy human traffic, it is
advisable for Kwong Cheong Thye to buy more prominent shelf space in major
supermarkets to effectively display their wares. More shelf space would get more
consumer attention and also have a driving impact on the sales of Kwong Cheong
Thyes products, refered to the phenomenon of space elasticity (Appendix T).This
allows the company to emerge itself from its shadow and portray itself as a competitor
to Woh Hup and Lee Kum Kee, to fight for the market share of domestic household
consumers. From time to time, the company should also engage in personal selling
through sales promoters. These promoters would build product awareness, provide
information and stimulate demand to potential consumers(Appendix U).

Diversify into the restaurant business

According to a survey conducted by MasterCard, Singapore surfaced as the top
spender in the region on dining (Appendix V). Since Kwong Cheong Thye has been in
the food manufacturing business for decades, it can diversify its business by venturing
into Singapores thriving restaurant business scene. Ms Choo, the brainchild behind
various recipe innovations for the companys sauces/paste, has a wide networking in
the food and beverage industry. Having fostered strong customer relations with chefs
from top hotels and restaurants, finding a chef to helm the kitchen would not be an
obstacle. Furthermore, Kwong Cheong Thye would be the sole supplier of essential
Chinese cooking sauces, paste and noodles to the restaurant. Attaining cost efficiency
from using their factory-produced products allows Kwong Cheong Thye to secure a

higher profit margin.

Extended product line to cater the aging population
With Singapores fast aging population, there has been a segment in the food industry
that has been ignored. With the food industry preoccupied with product innovations,
customization and continuous line extensions that cater to the mass population, not
much has been focused on the elderly. With special dietary requirements and easy to
prepare meals, Kwong Cheong Thye can produce a new range of products that cater to
the elderly. Having a head start with readymade Bah Kut Teh soup (Pork Rib Soup), the
company can specialize in nutritious readymade authentic Chinese soups such as
Birdnest soup, Watercress soup, Winter melon soup, ginseng soup and many more.
These low sodium soups tailored to the elderly needs would make Kwong Cheong Thye
the pioneer in carving a niche amongst consumers of the aging population.

5.3 Marketing Plan

Digital Marketing
With advancements in technology, digital marketing has revolutionized into the preferred
media platform for firms. Social media platforms have high viewership and the ability to
reach out to a broad consumer segment. Kwong Cheong Thye can jump into the wagon of
social media by creating a Facebook page. Setting up an interactive Facebook page has
numerous advantages. Firstly, Kwong Cheong Thye can reach its target market for a fairly
affordable price. Through this medium, customers can interact directly with Kwong Cheong
Thye. They can provide feedback, share their experience about the companys products
and simultaneously get updates on relevant events. On the part of Kwong Cheong Thye, it
can offer a vibrant array of information about new product launches, kitchen tips, food facts,
recipes, promotional activities and even recipes suggested by their loyal customers.
Product placement in popular shows/ advertisements in local channels
Another method for Kwong Cheong Thye to reach out to its consumers is through

product placement. Unlike other conventional advertising methods, product placement

can strengthen brand recognition more effectively and serve as a long-term reminder
advertisement. The company can place its products in local popular television
series/dramas on Singapores quintessential Mediacorp channels. If Kwong Cheong
Thye were able to impressively revamp its Facebook page and successfully market its
products through personal selling at supermarkets, product placement in local television
would be viewed as part of a total marketing plan in which it complements other
techniques in the promotional mix. Apart from product placement, the alternative
method of conventional television advertisement should not be overlooked. Mediacorp
channels offer easy value packages at affordable rates, with high advertisement
frequencies (Appendix W).
5.4 Resource management
The proposed resource management plan changes the leadership style from
entrepreneurial to leadership management. This transition is crucial for SMEs during
the growth/expansion phase of business. Kwong Cheong Thye has to move forward
from a husband-wife team dominant entrepreneurially managed firm to one run by
functional organizational structures.
Kwong Cheong Thyes first step starts with restructuring its company into organizational
departments (i.e. human resource/marketing departments) followed by attracting skilled
labor to fill in the positions. The company can attract talent by participating in SPRING
Singapores Management Associate (MA) Initiative program, under the Capability
Development Grant (appendix X). The MA program helps to recruit outstanding fresh
graduate talents via the Careers @Enterprise job portal. Mr and Mrs Choo have to
submit a comprehensive training and development plan to SPRING, based on building
each MAs capabilities, aligned to the companys growth plan. The initiative also helps to
defray up to 70 % of qualified training cost, covering both on and off the job training.
Through this channel, Mr Choo Wei Luen and his wife can additionally attend the MA
initiatives talent management workshop to improve their Human Resource abilities.

Another alternative is for Kwong Cheong Thye to participate in SPRINGs Executive

Development Scholarship (EDS) program. SME-SPRING Joint EDS is a scholarship
offered jointly by SPRING and Kwong Cheong Thye, with the objective to attract talents,
who aspire to be future business leaders to join the industry (Appendix Y). These
scholarships are given to students during their universities/ polytechnic years to entice
them to take up a career in the food manufacturing industry
5.5 Funding (Financial) Plan
With restructuring of the company, Kwong Cheong Thye needs to look into its
manpower cost. Though the expense of the company may escalate, these cost incurred
would certainly benefit the company in the long run. We also have to understand that Mr
Choo and his wife have expressed their desire in remaining a privately owned company.
Though funding the expansion may be an uphill task, the strategic goals can be
achieved to a certain extent through government subsidized loans and training
programs.
By participating in the MA initiative and EDS scholarship program, Kwong Cheong Thye
can benefit from hiring a large pool of fresh graduates. The benefits constitute of cost
effectiveness, as the starting pay of fresh graduates are not in the higher bracket.
These are the proposed vital positions that the initial expansion plan would
require(Appendix Z).

Job Role

Qua

Startin Monthly Cost

ntity

g pay (SGD)

incurred (SGD)

Quality Control Manager

$2200

$2200

Food Technologist

$2100

$4200

Accountant

$2200

$2200

Human Resource Manager

$2000

$2000

Logistics Manager

$2100

$2100

Sales Manager

$2000

$2000

Marketing Manager

$2000

$2000

In this proposed manpower recruitment plan, Kwong Cheong Thye would incur an
annual wage expense of $200,400. This minimalistic recruitment plan focuses on
Kwong Cheong Thyes vital manpower requirements. Furthermore, the plan is cautious
and takes into consideration MA Initiative Grant Support requirements .
Upon hiring of fresh graduates, training programs would be required. The MA initiative
would support the training programs, by covering 70 % of the training cost. In the
financial context, Kwong Cheong Thye annual training expenses would only amount to
30 % of its actual cost, keeping overhead low. Furthermore, many companies are urging
the government to up the grant to 80 % together with other proposed rebates.
(Appendix Z extended part 1)
Since an advertisement spot in local channels come at the charge of $3900(appendix
W), Kwong Cheong Thye would incur a yearly marketing expense of $93,600. Assuming
that product placement advertising cost the same, the marketing expense would be
hefty $187,200. Taking into account training, employee wage expense and marketing
efforts, the company would incur approximately $480,000 yearly.
Mr Choo Wei Luen would not want to fundraise through public listing, expressing his
desire to remain privately owned. Mr Choo felt that by being privately owned, he would
have the complete authority over the operational decisions of Kwong Cheong Thye,
without having to be answerable to various third parties(Shareholders and investors).
Furthermore, Mr Choo can determine the amount of profit to reinvest towards fueling the
companys growth. Lastly, Mr and Mrs Choo have worked exceptionally hard to nurture
the company into a prominent food manufacturer, therefore, to relinquish the complete

ownership is unfathomable. In order to finance this expansion plan, the company would
have to look into Loans from financial institutions or SPRING Singapores local
enterprise finance scheme.
6. Conclusion
In the process of evaluating Kwong Cheong Thye as an SME, We learnt that there are both
dependent and independent factors that lead to business success. Many independent factors
attribute to the success and fame of Kwong Cheong Thye. Firstly, it is the vision to expand,
which both Mr Choo Wei Luen and his wife adhere ardently. Both of them are constantly
seeking new markets for their products. Simultaneously, they kept innovating and introducing
new products to keep up with industry trends. Least to say, business success would not be
possible without the utmost important dependent factor, the support by government bodies.
SPRING and IE Singapore aided them financially and actively promoted their brand name
through food fairs locally and internationally. All these factors together with Kwong Cheong
Thyes good public relations has catapulted them into one of the top purveyors of fine food
products in the food manufacturing industry in Singapore.
Even though Kwong Cheong Thye is well established as of today, it should constantly
innovate itself. The innovation does not have to be the big bang type of changes or tied to
technological advancement, it can come in small packages quoted Acting Manpower
Minister Mr Tan Chuan Jin. (Appendix Z extended Part 2). In line with Mr Tans statement,
Kwong Cheong Thyes business expansion plan helps boost its company innovation through
simple avenues such as marketing and domestic advertising. With expansion, Kwong
Cheong Thye throws a wider net on the domestic household consumer market. It innovates
its products by adhering to the shifts in demographic factors including the aging population,
increasing number of women in the workforce as well as shifts in food consumption towards
away-from-home dining. The companys expansion plan also features taping into high
potential international markets. With each successful step of expansion and innovation,
Kwong Cheong Thye will move up the ladder of success.

Personal Interview with Mr Choo Wei Luen(Owner)

Q1. Mr Choo, Kwong Cheong Thye started as a simple Soya Sauce manufacturer and
has progressed into a well-established brand name in the food-manufacturing scene.
What were the critical factors that led to your success?
They were many critical factors that aided Kwong Cheong Thye during its infant phase.
Firstly, it was SPRING Singapores help in financing the interest payments for the loans
our company needed to purchase the machinery. Secondly, it was Mrs. Choo
entrepreneurial mindset. She constantly innovated new recipes and extended our
companys product line. When our company made the decision to export in 2001/2002,
she spearheaded our companys growth by always looking out for potential overseas
buyers.
Q2. How did you manage to find overseas markets?
I would say that IE Singapore played an important and crucial role. It advised Kwong
Cheong Thye to include nutrient labels on our food packaging. It was an important step
in entering the overseas market. IE also subsided the expense, up to 70%, for holding
food fairs abroad.
Q3. Do Kwong Cheong Thyes products fit the adage of one size fits all?

No, our company customizes our product offerings. For example consumers in Dubai
have high spiciness tolerance level. However, Japan does not. As such, one size fits all
does not apply here. We customize our products and deliver Dubai a spicier version of a
sauce/paste then Japan.
Q4. Who are Kwong Cheong Thyes major clientele?
Domestically, our major clienteles are top hotels and restaurants. Internationally, we
have secured various business partners but our major markets are in China and Dubai.

Q5, Who are your key competitors?

Lee Kee Kum and Prima sauces, being long established food manufacturers, are
Kwong Cheong Thyes main rivals. However, to have competition in business is healthy.
It keeps Kwong Cheong Thyes on its toes.

Q6 Do you believe in constant innovation of your product line?

Yes, I do. There are many food manufacturers in Singapore, each trying to reach out to
broader consumer markets. Therefore, it is important to regularly come out with new
products to differentiate our brand from competitors and harness consumer trends. Just
Last month we launched our new ready-made Bah Kut Teh Soup, targeting at
Singapores elderly population.

Q7. Does Kwong Cheong Thye aggressively advertise its products?

I did not pay much importance to advertising. We receive a good business from our
existing loyal customer base and many established international business partners.
Therefore we do not pay much attention on advertising locally since we focus mainly on
industrial consumers. The last time Kwong Cheong Thye advertised on television was in
the year 2002
Q8. Does Kwong Cheong Thye face difficulties in the aspect of human resource?
Yes it does. Singapores strict foreign policy impedes our ability to hire foreign unskilled
workers to run our manufacturing plant. Due to Singapores mandatory 5;1 Singaporean
to foreigner ratio, Kwong Cheong Thye has to limit its foreign workers. This could also
mean hiring Singaporean workers who demand a higher salary.

Kwong Cheong Thye also faces difficulty in attracting skilled labour and professionals.
Many skilled Singaporean workers still view employment in a SME as a second
choice.

Appendix A
Reference: http://www.asianewsnet.net/news-52441.html

Appendix B

Reference: http://www.tradingeconomics.com/singapore/consumer-spending

Appendix C
Reference:http://sbr.com.sg/financial-services/news/heres-what-makes-singapore-topfinancial-hub-in-southeast-asia

Appendix D
Reference:http://www.spring.gov.sg/Enterprise/Loan/Pages/Local-Enterprise-FinanceScheme.aspx#.UufrmhCwrIV

Appendix E
Reference: http://www.fta.gov.sg/sg_fta.asp

Appendix F
Reference: http://www.singapolitics.sg/news/firms-must-try-hire-sporeans-tryingforeigners

Appendix G
Reference: http://www.singstat.gov.sg/statistics/browse_by_theme/national_accounts.html

Appendix H
Reference:http://www.enterpriseone.gov.sg/en/Topics/Venture%20Abroad/Partners%20and

%20Opportunities/va_partopp_trademission.aspx

Appendix I
Kwong Cheong Thyes limited range of products displayed at supermarkets

Competitors (Woh Hup, Lee Kum Kee and Prima) diverse range of products displayed

Appendix J
References: http://www.hot-mob.com/wp/lee-kum-kee-iphone-app-download-promotion/
http://www.pixopunch.com/lee-kum-kee-your-best-cooking-assistant/#1

Appendix K
Reference:http://www.straitstimes.com/breaking-news/singapore/story/cooking-contestaims-promote-family-and-community-bonding

Appendix L
Referance: http://blog.wohhupfood.com

Appendix M
Reference:http://www.straitstimes.com/the-big-story/case-you-missed-it/story/the-

decline-home-cooking-20130409&

Appendix N
Reference: http://travel.cnn.com/mumbai/none/indian-chinese-food-598134

Appendix O
Reference: http://topics.nytimes.com/top/reference/timestopics/subjects/c/chinese_food/

Appendix P

Reference:http://smallbusiness.chron.com/impact-organization-structure-productivity21902.html

Appendix Q

(newspaper article cutout)

Appendix R
Reference: http://www.iesingapore.gov.sg/Venture-Overseas/Browse-ByMarket/Americas/United-States-of-America/News/mc/Speeches/2008/6/Openingaddress-by-Mr-Ted-Tan-Deputy-Chief-Executive-Officer-International-EnterpriseSingapore

Appendix S
Reference:http://iesingapore.eventshub.sg/Events/EventDetailView.aspx?EventID=5550

Appendix T
Reference:http://modeledbehavior.com/2010/02/06/the-economics-of-supermarketshelves/

Appendix U
Reference: http://www.knowthis.com/personal-selling/objectives-of-personal-selling

A
ppendix V
Reference:http://business.asiaone.com/news/singaporeans-are-top-spenders-dining-

region-mastercard

Appendix W

Appendix X

Reference:http://www.spring.gov.sg/CareersScholarships/ss/Pages/abouteds.aspx#.UueXLpFm4b1

Appendix Y

Reference:http://www.spring.gov.sg/CareersScholarships/ss/Pages/abouteds.aspx#.UuifBZFm7L8

Appendix Z
Reference: http://myjobstreet.jobstreet.com.sg/career-enhancer/basic-salary-report.php
http://www.fst.nus.edu.sg/programmes/Undergraduates/Prospectus/FAQ.html#salary
QA Manager

Food Technologist

Accountant

Human Resource Manager

Logistics Manager

Sales Manager

Marketing Manager

Appendix Z Extended (Part 1)

Appendix Z Extended (part 2)