Old Town White Coffee: Malaysia

1. Background- Old Town White Coffee

The Old Town White Coffee is a famous coffee that most of the people prefer in Malaysia. In year 1999, Old Town White Coffee has established in old town, Ipoh. The Old Town White Coffee‘s co-founders and Executive Director are Mr Goh Ching Mun and Mr Tan Say Yap.

Old Town White Coffee has expanded to 137 cafe outlets in Malaysia and Singapore as at 31 October 2009. In order to focus on different areas and states in Malaysia, they had established their own subsidiaries, namely Old Town Kopitiam, such as: Old Town Kopitiam Butterworth, Old Town Kopitiam Kuala Lumpur and Old Town Kopitiam Cheras. They also run café chain to expand their own business such as café outlet, franchised outlets and food processing rather than manufacturing traditional coffee powder. They serve a wide variety of Malaysian delicious cuisines from white coffee to toasts, rice, noodles. Besides that, they have successfully produced the Oldtown 3-in-1 instant coffee mix for the retail sectors. To date, the white coffee products are exported to more than 200 café outlet throughout Asia.

1. Reasons to enter London, United Kingdom

The reason for Old Town White Coffee to enter the London market is due to the high standard of living in London. Based on the study, the GDP of London has increased rapidly from 1.3 to 3.4 at year 2013 to 2015. The immense improvement in the standard of living in London has increased the life expectancy of the people in London. The purchasing power of the people in London has increased and they are more willing to spend money such as indulging themselves with food. The ideal consumer economic profile of Old Town White Coffee is considered upper middle class and it would make an advantage due to the high consumption of the people by operating the kopitiam in London.

The vision of Old Town White Coffee is ‘To be the Asian Pacific’s leading white coffee producer providing high quality of products to customers globally.’ Hence, Old Town White Coffee is pioneer in introducing Asian cuisine to London. The company tends to introduce the ‘kopitiam’ concept which the ambience is different from the local cafes in London. The company will run the shop based on the traditional Malaysia coffee shop. At the same time it can promote the Malaysian unique, traditional breakfast and coffee to the people in London. This will create a market opportunity to the company.

Another reason is the company wants to expand its market share by selecting the target market. The target markets are the Asian people and the foreigners. There is less choices for Asian cuisine in UK, most of the Asian living in England can hardly find Asian food. As so when they are craving for Asian food they can always visit the kopitiam in London which provides them a variety of cuisine. For foreigners they can try on the unique taste of coffee and traditional Malaysian food.

The forth reason for Old Town White Coffee entering the London market is its political factor. The UK government practices an open market. Anyone can engage in an open market freely. London is considered as a comparatively open market. Therefore, Old Town White Coffee business can enter into London without any barriers and could carry its business without any aversion as the open market practiced in London welcomed outsiders to invest in their country.

3.0 Malaysia Market Analysis

The Old Town White Coffee has a monopolistic competition market. They have intense competitors. This is because there are many high substitutable products since many firms are producing highly similar product in the industry. For example: Coffee Bean, Paparich and Starbucks. Their ways of doing business, food and the decoration are very similar with Old Town. Coffee Bean is one of the main competitors to the Old Town White Coffee as Coffee Bean sells quite similar coffee even though the taste of coffee is different. They also provide food such as breakfast set which allows unlimited refill on coffees and dinner set.

One of the strengths of Old Town White Coffee is having variety choices of food and drinks. Customers can choose the food that they preferred. Besides that, Oldtown offers reasonable and affordable prices for its coffee. This will increase the satisfactions of their target market especially students as the buying power of student is lower compared to the business man. Furthermore, Old Town White Coffee provides free Wifi and some outlets are 24 hours operated. People can enjoy the coffee at the same time they can do their job in the coffee shop as free wireless connection for internet access.

3.1 The product and services chosen

Old Town White Coffee provides various types of food and drink for customer to make a choice. This will increase the customer satisfaction as they have more variety to choose and food that they love.

Old Town White Coffee food is divided into three categories that are noodle, rice and western series. The noodles series consists of Ipoh chicken hor fun, white curry pan mee, asam laksa. The rice series contains nasi lemak, chicken chop rice, meatloaf and egg bowl. Besides that, there is western platter, mixed grill, chicken chop in the western series. The beverages provided in Old Town White Coffee included white coffee, teh tarik, honey lemon juice, lime yogurt smoothie and rose float.

Old Town White Coffee concentrates on service and leisure concept. They create a very relax environment to grab customer’s attention by its shop design, decoration, provide comfortable facilities such as table, chair, socket and wifi. This is because Old Town White Coffee wants to provide a comfortable and good ambience for their customers so that they feel relaxed to enjoy their meals and refreshing drinks in the shop. Besides that, Old Town White Coffee enhances the concept of relaxing lifestyle. People can hang around the cafe and enjoy their free time in the shop. This is a good place for customer to chill and have gatherings with friends and family. With this concept, the Old Town White Coffee can be expanded to UK market.

4.0 PEST Analysis: comparison between Malaysia and United Kingdom

Malaysia 

Political

According to Inland Revenue Board of Malaysia, the government has announced that the company has more than RM2.5 million paid-up capital, they have to pay 25% corporate tax. The amount of corporate tax is based on the net income of the companies’ business activities. Moreover, Malaysia is exercising free trade policy that promotes continued global development. Free trade policy can reduce the barriers of trade in goods or services between the countries and it encourages business in long term stability. The political condition in Malaysia is considered developing and less political stable as the current government’s ability has significantly reduced.