A case study of Ya Kun Kaya Toast
Introduction
Ya Kun Kaya Toast is a chain of cafes in Singapore that specialize in the toast products, commonly known as the Kaya toast, boiled eggs, and coffee (2012 Ya Kun kaya toast). Though it started as a small-scale family business in 1994, it has boomed to a span of fifty stores across the neighboring countries such as the China, Japan, and South Korea among others. The business model of the toast chain draws from the rich Chinese culture and traditional colorful identity. It is important to note that the company operates under a limited menu that encompasses such products as the peanut butter as well as ice cream alongside the three main products listed above.
Ya Kun Kaya Toast business is further split into two companies with varied roles to increase the management efficiency. The first company, Ya Kun Singapore, which specializes in the management of Ya Kun factory (it produces the kaya and coffee powder using ingredients kept secret by the family members) and overseeing the operations of corporate outlets. The second branch, Ya Kun International focuses on the large chains together with the franchising programs. The fact that the business operates under family full ownership makes it easy to expand on the values and traditions upon which the company if was found.
The company faces stiff competition from the local business that offers similar products such as the Tong Ah Kopitiam, Chin Mee Chin Confectionary, and Coffee Kaki among others. As such, the essay performs research on the marketing structures of the Ya Kun Kaya Toast business. After that, the study will conduct the SWOT analysis to evaluate the feasibility and viability of prospects of the business.
SWOT analysis
A SWOT analysis an evaluation tool used in determining the strengths, weaknesses, opportunities and threats in a business venture to aid in the management plan (Pahl and Richter 2007). Below is a table listing a point from SWOT analysis of the Ya Kun Kaya Toast business
Strengths
Ya Kun Kaya Toast marketing strategy have numerous strengths due to its comprehensiveness and the unique approach to the market. Operating on limited menu aids the customers in identifying with the business owing to the unique products that are prepared. This has the led the company to be the Singaporean cultural icon as it represents a culture (Koh 2015). Besides, the company has an ingenious approach to expanding its customer base; it incorporates favorite foreign substitute products such as the French toasts and the toast witches. Likewise, the company has a wide distribution chain in different countries while maintaining its conservative corporate culture. This serves as a marketing tool since it makes the business stand out due to culture and superior products.
Additionally, the company charges lower prices than the foreign companies in Singapore, this act as price promotional strategy to tap into the local market. Consequently, the company has secured a sizable market share due to customers’ loyalty owing to the amazing products at fare prices. Besides, the company sources input from same trustworthy suppliers, which help in eliminating the cost drivers associated with the suppliers. Moreover, the marketing done by the suppliers’ benefits the Ya Kun Kaya Toast Company since the clients that identify with the supplier will tend to favor its products. Finally, the company applies people-centric corporate culture. Hence, the productivity of the sales team improves since they do not fire or retrench their workers.
Weakness
However, despite the fact that the Ya Kun Kaya Toast Company enjoys sizable strengths, it faces several weaknesses. Firstly, the limited menu may limit its income especially in countries where they prefer western products to its toast and coffee. Moreover, franchising of the business may lead to dilution of corporate culture and production of substandard products. Eventually, the customers will identify the whole chain with ineffectiveness and poor menu. The prices of Ya Kun Kaya Toast Company products have also been relatively high in the overseas market, which may reduce the sales volume as customers might prefer the Western coffee houses. It is important to note that the company does not employ the aggressive marketing techniques to increase its market share to avoid conflicts with competitors. Therefore, the competitors may exploit this practice to increase its sale and the company will lose its customers. Finally, the company maintains a lot of secrets that inhibits the company from determining its real strengths.
Opportunities
The Ya Kun Kaya Toast business has large opportunities due to its excellent approach to marketing as well as the products it offers. Firstly, it has indicated a plan to expand its operations by opening stores to countries such as the India, Thailand and United Arab Emirates among other nations. The large population in these markets, especially India with the population of over one billion, will increase the sales volume exponentially. Moreover, since the business bases its business model in the Chinese family values and culture, it is apt to attract many Chinese customers. Considering that the Chinese population is the highest in the world the company will expand its empire, eventually, the market size it will command will give it an edge over the Western coffee houses. More importantly, the Singapore Tourism Board has engaged in the brand promotion, the kaya toast as a ‘Singaporean cultural icon’ as a promising tourist attraction. Subsequently, this will market the brand of the company to foreign countries, including those that the company has planned to open a branch, which creates product brand awareness (Pride and Ferrell 2014). Moreover, the promotion will also attract talents and skilled labor due to the positive corporate image as well as lower expenses due to lower the cost of marketing.
Threats
The largest immediate threat to the company is both the local and international food and beverage competitors with operations in the Singapore. For instance, Tong Ah Kopitiam, which has high-skilled workers who offer condensed milk and salted butter, will slice the market share of the Ya Kun Kaya Toast business since they offer substitute products (Saxena 2009). Similarly, Chin Mee Chin Confectionary offers excellent products such as the custard and curry puffs as well as fruitcakes. Therefore, the competition is fierce, and since the Ya Kun Kaya Toast does not engage in aggressive competition, it might lose a large number of customers. There is also competition from the western coffee houses, which offers a wide range of products in comparison to the limited menu in Ya Kun Kaya Toast. Notably, the food and beverage are quite volatile industry to the affects the business cycles in the economy. As such, the company will experience fluctuations in their income due to fluctuating currency, which may harm its strategic plans. In the recent past, there has been a trend in the industry, customers are more attracted to health and wellness, which has increased the demand for vegetables and fruits. Therefore, this shift in demand will adversely affect the company revenues in the long term. Finally, the food and beverage industry is saturated, and the company can only increase its income by offering unique products.
Conclusion
Ya Kun Kaya Toast is a chain of cafes in Singapore specializing in the toast products, commonly known as the Kaya toast, boiled eggs, and coffee. The business model of the toast chain draws from the rich Chinese culture and traditional colorful identity. The company’s strengths include low prices, limited menu, foreign substitute products, corporate culture and the trustworthy customers. The limited income and the franchise dilution are among the weaknesses. Large market and extension plans are the possible opportunities for the company. The threats include the possible competitions and the fluctuations in the currency.
References
(2012). Ya kun kaya toast. [Place of publication not identified], Book on Demand.
Koh, W. (2015). The top toast: Ya Kun and the Singapore breakfast tradition.
Pahl, N., & Richter, A. (2007). SWOT analysis: idea, methodology and a practical approach. [Munchen], GRIN Verlag.
Pride, W. M., & Ferrell, O. C. (2014). Marketing. Australia, South-Western Cengage Learning.
Saxena, R. (2009). Marketing management. New Delhi, Tata McGraw-Hill.
