Project 6 - New Market Entry Strategy for Fast Food/Coffee Chain

Intro:

This was a project for leading F&B company aiming to expand their fast food and coffee chain operations in Southeast Asia. The scope of the project included a detailed analysis of the market, including consumer trends and an understanding of the competitive landscape, an entry strategy, and also a prospective business model, including the entire offerings that was suited to the market in question. Were it not for the Covid situation, this was a definitely project that would have required us to travel to the prospective markets to understand the markets, and benchmark the leading players, both global and local. However, since that was not an option, we had to really rely on existing market data, and a logical approach to recommend new business models to the client. There was actually a good deal of actually proposing what kind of businesses the client should pursue from an offerings standpoint (such as, the type of coffee, new menus for their fast food chain, and new methods of delivery,etc.)

Duration/Members/W&L Balance:

Although a pure strategy project, this was way shorter than was required for the scope. The project itself started as a 4-week project, but due to everyone involved coming down with covid, we had no choice but to lengthen the duration of the project by one week. Because of the sheer scope of the project, with multiple modules, W&L balance was in the worse side, working around ~90 hours a week on average. However, we did try to ‘improve‘ our lives by cutting short our lunch/dinner times, mostly just eating at the office while working, to try to reduce actual working hours at the office.

For this project, it was 1+4, with 2 seniors and 2 juniors. The modules were split into the business units of client, so 1. Coffee 2. Fast Food. I participated in the fast food module, as the other consultants already had much prior experience in the coffee industry; it made more sense to put them there to leverage their experience.

Thoughts on Industry (Fast food):

As expected, fast food requires a good understanding of changing consumer behaviors, and of the brand’s own reputation in the market. In order to differentiate from global brands, including McDonald’s or KFC, you really needed to understand the culture of the market in question (Vietnam) and analyze the consumer preferences change over time in similar markets. The degree of localization would be a very important balance to find, and efforts to jump-start initiatives that were successful elsewhere might not be appropriate, given the state of the economy and norms are present in more westernized markets.

Vietnam’s Coffee industry

This project included a new market entry for both a fast food chain, and a coffee chain; unlucky for us, Vietnam is a country where international brands have difficulty in entering, due to their strongly engraved local traditions, and localized value chains; even Starbucks has not fared very well - so far.

There never seems to be a ‘right answer‘ in consumer industries and retail, so there is a lot of difficulty in aligning strategy with the needs of the client, as one approach can always seem better than the other, with there being sufficient logic and rationale to support each argument. It comes down to the approach that is most robust in its structure, and the one that is most in line with the thinking of the leadership of the client, and also supported by data in the market.

Most consultants tend to have fun in such retail projects, as they concern everyday products, and also because they contain elements of strategy that really are inculcated from the minds of consultants, born from scratch. It’s difficult to get the clients onboard with the team’s chosen strategy, but once we are all aligned, the next phase of the project can really be fun, as you really design the strategy to implement a successful business in a new market, with a high likelihood that the client would really implement the recommendations from the project.

Project Details:

Interestingly, Vietnam was going through a whole ‘chicken‘ phase, with KFC and Jollibee’s being the main players in the fast food market, while McDonald’s and Burger King, with mainly a Beef patty line-up, lagged behind, in terms of market share. We decided to change the menu composition to have accommodate local tastes,

Drive-thru’s possible in Vietnam?

In order to explore other methods of increasing competitiveness in the fast-food industry, we looked into the possibility of incorporating different kinds of drive-thru’s for the emerging economy of Vietnam.

Also, as one of the fastest growing economies of South East Asia, Vietnam had a growing proportion of car-owners, leading to a potential for growing demand in the drive-thru market.

Lastly, with a growing millennial and Gen-Z consumer base, the business would definitely have to be more digital-friendly, as well as having marketing campaigns more in line with the younger customers.

Put all these into a growth strategy, then you have to also go through brief financial modelling to estimate the revenue impact of all these levers you want to introduce, and construct the necessary work plan and tasks for the clients to implement.

Personal Thoughts:

To be completely honest, this was probably one of the hardest projects I’ve done up to date. I’m actually not too fond of the consumer/retail practices, as sometimes I feel like the direction of the strategy can swerve too often, and most of the ideas are really ‘flashy‘, unlike the heavy industrial projects, which have more of a defined area of where strategy can come from. I tend to prefer projects that require a deeper dive into the semantics and workings of the industry, as I get a better kick from tackling a long unsolved issue from a different angle. However, as for trying to sell more burgers, it seems like there needs to be more multi-faceted approach, including many marketing campaigns that may or may not be successful. There are too many factors that influence the success of consumer products, and it’s difficult to switch from one strategy to another multiple times throughout the duration of an already short project. However, this is a skill that consultants truly need, so I definitely took this project as a good learning experience.

Consulting Lingo:

-  New Market Entry Strategy

-  Growth Strategy

-  Financial Modelling

-  Market/Competitive Landscape Analysis

-  Customer Segmentation

-  Product Offering