Title: Management Concept: Case Study 2

Name:

Task Code: 201504090101

Date: 4th of April, 2015

Word Count: 698 Words

Contents
1.0 Introduction.......................................................................................................... 3
2.0 Issue Identification............................................................................................... 3
3.0 Critical Discussion................................................................................................ 3
4.0 Conclusion............................................................................................................ 4
Reference................................................................................................................... 5
Appendix.................................................................................................................... 6

1.0 Introduction

Chatime the Taiwanese milk and tea specialist globally consists of more than 500 stores
including 42 outlets in Australia alone. Chatime has successfully done business in Asian markets
and is now looking to expand in other markets. The launch of Chatime faces some important
challenges in view of global expansion due to entering the Australian Market. The case study
shows that highlights strategic management issues, Chatime will have to address in order to have
a better chance to enter the Australian market and to sustain in the long run with relation to their
products and services.

2.0 Issue Identification

Chatime is looking forward with its expansion and differentiation strategies to grow with quality,
sustainability and prosperity and is growing with new stores targeting Asian and Australian food
markets. The companys expansion targets are to escalate the amount of franchises by 50%
annually (Barkema & Vermeulen, 1998). In the start, marketing and franchising experts doubted
on the strategies that were implemented by Zhao. The management issue that occurs here is that
there is need for adequate planning to serve long term goals (Quinn, 2013). Chatime needs to
first identify its core competencies and resources and the amount of resources they have at their
disposal. Through following planning process, the company can fully understand and make
appropriate plans for every factor that can provide hindrance from gaining a position in the
Australian Market. Chatime Management need to address management issues in order to execute
a particular marketing strategy which is ideally suited to the given market. KFC, a premier fast
food chain did a lot of planning and launched their recipe Vegetable Burger in India to tailor the
needs of the market.

3.0 Critical Discussion

Chatime needs to address strategic management issues to enter the Australian Market to improve
their chances of being successful. The main theory that is most relevant to the particular case of
Chatime is the model of participatory planning process. Chatime previously did concentrate in a
particular niche market which consists of Asian population. Chatime needs make a considerable
change in their plans in terms of formulating a complete planning process that will incorporate
all the necessary elements to be studied before making a plan of execution to gain a strong
foothold in the Australian market. The model of participatory planning process clearly is linked
to the issues faced by the Chatime. A participatory planning process is in which all the key
stakeholders have the freedom to express their opinions and concerns in a particular management
issue (Cummings & Worley, 2014). Chatime management needs to incorporate all local
franchises and other interested clients to take part in the planning procedure. The planning
process in which all the stakeholders take part will provide the necessary information on driving
forces of Australian market such as healthy drinks preference of Australian consumers .It is one
of socio-cultural forces driving the Australian Market. The local franchises collaboration will
provide them necessary business intelligence report about the trends and change in tastes of
Australian consumer. The theory of participatory planning is relevant in the case of Chatime due
to reasons such as lack of local knowledge of the market and the lack of collaboration with local
franchises
Synergy is an advantage to Chatime which can be achieved by aligning the existing resources
with the new product and market.. The company should identify core competencies in terms of
products and constantly diversify its milk and tea products and markets as well. An effective
strategic plan could be devised to purchase new equipments, usage of existing production and
marketing to successfully enter and operate in the new markets with a view of rapid global
expansion (Ireland, Hitt & Hoskisson, 2015).The following procedures will hold Chatime and its
managerial staff in a good position to gain a strong presence in the Australian market.

4.0 Conclusion
The case study proves that Chatime in order to improve its chances of global expansion need to
address the strategic management issues by formulating a participatory planning process that will
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incorporate all the necessary stakeholders such as local franchises and others to provide
necessary knowledge and input in terms of gaining more presence in the Australian market.

Reference
5

Barkema, H., & Vermeulen, F. (1998). International expansion through start-up or acquisition: a
learning perspective. Academy of Management Journal, 41(1), 7-26.
Quinn, J. B. (1999). Strategic outsourcing: leveraging knowledge capabilities. Sloan
management review, 40(4), 9-21.

Ireland, R.D., Hitt, M., & Hoskisson, R. (2015). Strategic Management: Competitiveness and
Globalization, Concepts. Cengage Learning.
Cummings, T., & Worley, C. (2014). Organization development and change. Cengage learning.

Appendix
SWOT Analysis:
(a) Internal Appraisal of the company identifies the shortcomings in the current resources
and the strengths that the company should seek to exploit.
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Strenghts
Weakness
es

Escalated Diversity
Launch of new products (for e.g.
soy milk , pearl milk tea and skim
milk)
Strategic plans for expansion and
improvment
Limitaions in the flavours of the
products
Lack of experiencee in the main
stream markets

(b) External Appraisal of the company identifies the profitability oriented opportunities
which can be further exploited by the companys strengths and can also anticipate
environmental threats as well.

Opportuniti
es

Effective comparative
performance
Expansion plans into new market
segments
Distribution rate is improving

Threats

Social attitudes can be a threat

Recession might imply poor sales
Rising competition (Gongcha,
Cinnabon)