Foreign market entry of a food processing manufacturer

History and development of Ajisen

Our concern was founded by Mr. Poon Wai with the constitution of Shenzhen Factory on 25th December 1995. We ab initio established Shenzhen Factory with the purpose of fabrication and administering our packaged noodle merchandises to consumers in Hong Kong. Recognizing the potency for our noodle nutrient merchandises in the Hong Kong market, we decided to vertically spread out our concern operations in Hong Kong

In May 1996, we opened our first Ajisen eating house in Causeway Bay, Hong Kong. Between 1996 and 1998, an extra seven Ajisen eating houses were added to our eating house portfolio in Hong Kong. In 1998, in order to standardise and centralise nutrient readying for all our Hong Kong Ajisen concatenation eating houses, we set up a nutrient processing installation in Hong Kong for the readying and distribution of semi-cooked and cooked nutrient points to them.

Following the success of our Ajisen concatenation eating houses in Hong Kong, we decided to venture into the PRC market to tap its big consumer market potency. In March 2001, we besides established Shanghai Factory in Minhang District, Shanghai, PRC. Since so, we have continued to widen our market presence in the PRC and have set up Ajisen concatenation eating houses in a figure of major metropoliss:

aˆ? In June 2003, we established Shanghai Lead Food to get eating houses in

Shanghai so as to have, operate and pull off the eating houses under our “ Ajisen ”

trade name name.

aˆ? In August 2003, we entered into a joint-venture to put up Fuzhou Weiqian to

ain, operate and pull off our Ajisen concatenation eating houses in Fuzhou, PRC.

aˆ? In November 2003, we established Hangzhou Weiqian to have, operate and

pull off our Ajisen concatenation eating houses in Zhejiang Province, PRC.

aˆ? In February 2004, we established Nanjing Weiqian to have, operate and manage

our Ajisen concatenation eating houses in Jiangsu Province, PRC.

aˆ? In August 2004, we established Shandong Weiqian to have, operate and manage

our Ajisen concatenation eating houses in Shandong Province, PRC.

aˆ? In December 2004, we established Beijing Weiqian to have, operate and manage

our Ajisen concatenation eating houses in Beijing, PRC.

aˆ? In July 2005, we established Chongqing Weiqian to have, operate and manage

our Ajisen concatenation eating houses in Chongqing, PRC.

In November 2004, we relocated Shenzhen Factory to the Shenkeng Industrial

Zone in Longgang District, Henggang Town, Shenzhen.

PESTLE analysis on Thailand

Political factors

The political relations of Thai has been ever conducted by constitutional monarchy, the Prime Minister of Thai is the caput of the authorities and the familial sovereign is the caput of province. The bench is comparatively independent of the executive and the legislative subdivisions.

The Thai lands are ever under absolute regulation of the male monarchs.

However, after the democratic revolution in the twelvemonth of 1933, which is led by the some of the westernized administrative official and besides the traditional military. The state is eventually become like others in the universe, which is under a constitutional monarchy with a premier curate as the leader of authorities. Right after publishing the written fundamental law. One of the spheres of contending cabals is the political relations. Many Bureaucrats and generals are traveling to coup and putschs are ever go oning, it is frequently to conveying the state under the regulation of another junta. Nowadays Thai has had 17 charters and fundamental laws, it is known as reflecting to high grade of political instability. Merely after cooption of Thai, dialogue is traveling on all the politicians. Work force of influence and besides the generals has ever become the premier factor for Restoration stableness. On the other manus, this sort of stableness was of all time an aim. Alternatively elites frequently used the authorities as a tool to functionaries its position.

Economy factors

Factor of economic system in Thai is besides know as emerging economic system, which is a to a great extent export dependant. The economic system of exports counts for more than 70 % of GDP. And the exchange rate of Thai is Baht 33.00 to 1 USD.

Thailand has a GDP worth 8.5 trillion Baht ( on a buying power para ( PPP ) footing ) , or US $ 627 billion ( PPP ) . This classifies Thailand as the 2nd largest economic system in Southeast Asia after Indonesia. Despite this, Thailand ranks halfway in the wealth spread in Southeast Asia as it is the fourth richest state harmonizing to GDP per capita, after Singapore, Brunei and Malaysia.

It functions as an ground tackle economic system for the adjacent developing economic systems of Laos, Burma, and Cambodia. Thailand ‘s recovery from the 1997-1998 Asiatic fiscal crisis depended chiefly on exports, among assorted other factors. Thailand ranks high among the universe ‘s automotive export industries along with fabrication of electronic goods.

Most of Thailand ‘s labour force is working in agribusiness. However, the comparative part of agribusiness to GDP has declined while exports of goods and services have increased. [ 2 ]

Tourism grosss are on the rise. With the instability environing the recent putsch and the military regulation, nevertheless, the GDP growing of Thailand has settled at around 4-5 % from old highs of 5-7 % under the old civilian disposal, as investor and consumer assurance has been degraded slightly due to political uncertainness.

The officeholder elected civilian disposal under Samak Sundaravej in power from January 29 to September 9, 2008 stated that the economic system will hold grown by 5.5 % to 6 % by the terminal of 2008. Due to lifting oil and nutrient monetary values, the one-year rising prices rate for 2008 shooting up to 9.2 % in July ; a 10-year high, but it will unlikely make dual figure rates later this twelvemonth as oil and nutrient monetary values are stabilising.

Social factors

Thailand has a prevalence of Buddhism that ranks among the highest in the universe. The national faith is Theravada Buddhism. Harmonizing to the last nose count ( 2000 ) 94.6 % of the entire population are Buddhists of the Theravada tradition. Moslems are the 2nd largest spiritual group in Thailand at 4.6 % [ 61 ] [ 62 ] . Thailand ‘s southernmost states – Pattani, Yala, Narathiwat and portion of Songkhla Chumphon have dominant Muslim populations, dwelling of both cultural Thai and Malay.

The southern tip of Thailand is largely ethnically Malay, and most Malayans are Sunni Muslims. Christians represent 0.5 % of the population. A bantam but influential community of Sikhs in Thailand and some Hindus besides live in the state ‘s metropoliss, and are to a great extent engaged in retail commercialism. There is besides a little Jewish community in Thailand, dating back to the seventeenth century.

Tai civilization has been shaped by many influences, including Chinese, Lao, Burmese, Cambodian, and Indian.

Its traditions incorporate a great trade of influence from India, China, Cambodia, and the remainder of Southeast Asia. Thailand ‘s national faith Theravada Buddhism is of import to modern Thai individuality. Thai Buddhism has evolved over clip to include many regional beliefs arising from Hinduism, animism every bit good as ascendant worship. The official calendar in Thailand is based on the Eastern version of the Buddhist Era, which is 543 old ages in front of the Gregorian ( western ) calendar. For illustration, the twelvemonth AD 2010 is 2553 BE in Thailand.

Several different cultural groups, many of which are marginalized, populate Thailand. Some of these groups overlap into Burma, Laos, Cambodia, and Malaysia and have mediated alteration between their traditional local civilization, national Thai and planetary cultural influences. Overseas Chinese besides form a important portion of Thai society, peculiarly in and around Bangkok. Their successful integrating into Thai society has allowed for this group to keep places of economic and political power.

PESTLE analysis on Indonesia

Political factors

Indonesia is a republic with a presidential system. As a unitary province, power is concentrated in the cardinal authorities. Following the surrender of President Suharto in 1998, Indonesian political and governmental constructions have undergone major reforms. Four amendments to the 1945 Constitution of Indonesia [ 42 ] have revamped the executive, judicial, and legislative subdivisions. [ 43 ] The president of Indonesia is the caput of province, commander-in-chief of the Indonesian National Armed Forces, and the manager of domestic administration, policy-making, and foreign personal businesss. The president appoints a council of curates, who are non required to be elected members of the legislative assembly. The 2004 presidential election was the first in which the people straight elected the president and frailty president. [ 44 ] The president may function a upper limit of two back-to-back five-year footings.

Economy factors

Indonesia has a assorted economic system in which the authorities plays a important function. [ 86 ] It is the largest economic system in Southeast Asia and a member of the G-20 major economic systems. [ 87 ] Indonesia ‘s estimated gross domestic merchandise ( nominal ) , buying power para aside for 2008 was US $ 511.7 billion with estimated nominal per capita GDP was US $ 2,246, and per capita GDP PPP was US $ 3,979 ( international dollars ) . [ 88 ] The services sector is the economic system ‘s largest and histories for 45.3 % of GDP ( 2005 ) . This is followed by industry ( 40.7 % ) and agribusiness ( 14.0 % ) . [ 89 ] However, agribusiness employs more people than other sectors, accounting for 44.3 % of the 95 million-strong work force. This is followed by the services sector ( 36.9 % ) and industry ( 18.8 % ) . [ 90 ] Major industries include crude oil and natural gas, fabrics, dress, and excavation. Major agricultural merchandises include palm oil, rice, tea, java, spices, and gum elastic.

Social factors

Dutch east indies has about 300 cultural groups, each with cultural individualities developed over centuries, and influenced by Indian, Arabic, Chinese, Malay, and European beginnings. Traditional Javanese and Balinese dances, for illustration, contain facets of Hindu civilization and mythology, as do wayang kulit ( shadow marionette ) public presentations. Fabrics such as batik, ikat and songket are created across Indonesia in manners that vary by part. The most dominant influences on Indonesian architecture have traditionally been Indian ; nevertheless, Chinese, Arab, and European architectural influences have been important.

PESTLE analysis on Vietnam

Political factors

The Socialist Republic of Vietnam is a single-party province. A new province fundamental law was approved in April 1992, replacing the 1975 version. The cardinal function of the Communist Party of Vietnam was reasserted in all variety meats of authorities, political relations and society.

Merely political organisations affiliated with or endorsed by the Communist Party are permitted to contend elections. These include the Vietnamese Fatherland Front, worker and trade unionist parties. Although the province remains officially committed to socialism as its specifying credo it is progressively capitalist, [ 31 ] harmonizing to The Economist it is presently run by “ ardently capitalist Communists ” . [ 32 ]

The President of Vietnam is the titular caput of province and the nominal commanding officer in head of the armed forces of Vietnam, chairing the Council on National Defense and Security. The current Prime Minister of Vietnam, Nguyen Tan Dung, is the caput of authorities, presiding over a council of curates composed of three deputy premier curates and the caputs of 26 ministries and committees.

The National Assembly of Vietnam is the unicameral legislative assembly of the authorities, composed of 498 members. It is superior to both the executive and judicial subdivisions. All members of the council of curates are derived from the National Assembly. The Supreme People ‘s Court of Vietnam, which is the highest tribunal of entreaty in the state, is besides answerable to the National Assembly.

Economy factors

he economic system of Vietnam is a developing market economic system. Since the mid 1980s, through the “ A?a»•i Ma»›i ” reform period, Vietnam has made a displacement from a centrally planned economic system to a Socialist-oriented market economic system. Over that period, the economic system has experienced rapid growing. Nowadays, Vietnam is in the period of incorporating into universe ‘s economic system, as a portion of globalisation and is in passage from a planned economic system to a market-oriented assorted economic system under one-party regulation. Almost all Vietnamese endeavors are SMEs with some countrywide hallmarks such as VNPT, Vinamilk, Trung Nguyen, Kinh Do and others. Vietnam has been lifting as a taking agricultural exporter and an attractive foreign investing finish in Southeast Asia.

In 2009, the nominal GDP reached $ 92.439 billion [ 1 ] , with nominal GDP per capita of $ 1,060 [ 1 ] Harmonizing to a prognosis in December 2005 by Goldman-Sachs, Vietnamese economic system will go the 17th largest economic system in the universe with nominal GDP of $ 436 billion and nominal GDP per capita of 4,357 USD by 2025. [ 4 ] Harmonizing to a prognosis by the PricewaterhouseCoopers in 2008, Vietnam may be the fastest growth of emerging economic systems by 2025, with a possible growing rate of about 10 % per annum in existent dollar footings that could force it up to around 70 % of the size of the UK economic system by 2050

Social factors

The Culture of Vietnam, an agricultural civilisation based on the cultivation of wet rice, is one of the oldest in East Asia ; the antediluvian Bronze age Dong Son civilization is considered to be one of its most of import primogenitors. [ 1 ] Due to the long-run Chinese influence on its civilisation, in footings of political relations, authorities and Confucian societal and moral moralss, Vietnam is considered to be portion of the East Asiatic Cultural Sphere.

Following independency from China in the tenth century AD, Vietnam began a southbound enlargement that saw the appropriation of districts once belonging to the Champa civilisation ( now Central Vietnam ) and parts of the Khmer imperium ( today southern Vietnam ) , which resulted in minor regional discrepancies in Vietnam ‘s civilization due to exposure to these different groups.

During Gallic colonial period, Vietnamese civilization received merchant influences from the Europeans, including the spread of Catholicism and the acceptance of Latin alphabet-to this twenty-four hours, Vietnam is the lone non-island state of Indochina which uses the Latin alphabet to compose the national linguistic communication.

In the socialist epoch, the cultural life of Vietnam has been profoundly influenced by government-controlled media and the cultural influences of socialist plans. For many decennaries, foreign cultural influences were shunned and accent placed on appreciating and sharing the civilization of communist states such as the Soviet Union, China, Cuba and others. Since the 1990s, Vietnam has seen a greater re-exposure to Asian, European and American civilization and media.

Some elements by and large considered to be characteristic of Vietnamese civilization include ascendant fear, regard for community and household values, handcrafts and manual labor, and devotedness to analyze. Important symbols present in Vietnamese civilization include firedrakes, polo-necks, Nelumbo nuciferas and bamboo.

Comparison in three states

In order to compare with these three states, we would utilize GDP growing, Political stableness, Population Growth and Education degree to do an overall marking. The state that gets the highest brand in the marking would be our first pick to entry in the market

GPD Growth in three states

Political stableness

states

Dutch east indies

Siam

Vietnam

Stability

Lowest

Lower

Highest

Population Growth

Education degree ( per centum of population in university pupil )

Overall Scouring of three states with 10 points in Max

For the above grounds, Vietnam have the highest point in overall considerations, therefore we have chosen Vietnam as the foreign market for us to entry.

Reason for the pick

VIETNAM is altering

for all of the investors ; A VietnamA has been changed a batch and looks really different in many ways from about 15 old ages ago. These differences are legal reforms, the new and set up market and a ace GDP growing record, which is systematically, exceeded 9 % since 2000. Largely, there is a apprehension among the top leaders which means the state needs to prosecute instead than fiddle from the international universe, as the consequence of its recent attempts by set abouting many twisting structural reforms necessary in order to fall in into the WTO.

Exciting in VIETNAM:

A recent study from South China Morning Post estimated that Vietnam will go one of the fastest turning state in Asian of the about following 20 old ages, and it is besides far more excite than Thailand and Indonesia and besides far more than anyplace else in Asia.

At last September ‘s crowned head bond which issued the underline of optimism. Originally planned as a US $ 500 million floatation, the introduction trade attracted $ 4.5 billion worth of existent orders, spuring investment bankers to increase the issue to $ 750 million to soak up the extra demand. Similarly, the January initial public offering of Vinamilk, a state-run dairy pudding stone, was to the full subscribed, forcing the equity market ‘s entire value past $ 1.1 billion. The planned listings of other state-owned endeavors promise to force the stock market ‘s capitalisation even higher.

All the good economic and fiscal intelligence gave international evaluations bureau Moody ‘s adequate ground to upgradeA Vietnam ‘s crowned head evaluation for the first clip in seven old ages, from B1 to Ba3.

INFRASTRUCTURE DEVELOPMENT

VietnamA is now naming for $ 25 billion in foreign direct investing ( FDI ) to exceed up the humongous $ 115 billion the authorities has provisionally earmarked over the following five old ages for a broad scope of undertakings, including large capital spendings for substructure development.

Reforms

There have already been several notable reforms, many offering foreign investors greater legal protection than of all time before. Changes to the legal model, specifically the Unified Enterprise Law ( UEL ) and the Common Investment Law ( CIL ) , promise to level the competitory playing field for foreign and domestic concerns.

Previously, foreign investors were limited by the concern theoretical accounts that were available to them, which in kernel consisted of either joint ventures with province endeavors or concern cooperation contracts that were to a great extent and at times randomly regulated by the authorities. Now, foreign houses can diversify into other concern theoretical accounts, most notably 100 % entirely foreign-owned concerns, every bit good as limited and joint stock companies.

EQUITIZATION PROCESS

VietnamA is besides giving particular accent to the equitization procedure, opening the manner for foreign concerns to purchase portions in province concerns. Sectors that were antecedently off bounds to aliens, peculiarly in the fiscal services, have late opened up in expectancy of entry to the WTO. Standard Chartered, ANZ Bank and HSBC have all late taken bets in local commercial Bankss, and there are presently 28 different foreign bank subdivisions now runing inA VietnamA – possibly the most seeable indicant of how deeply capitalist economy has taken root here over the past decennary.

Beefed-up inducements and greater ownership rights have late paved the manner for a figure of high-ticket foreign investings. On February 28, A USA engineering elephantine Intel announced $ 300 million investing programs to construct a bit testing and assembly works inVietnam. As Intel enters the market, its providers, service and support spouses are likely to follow to cut down transportation and transit costs, company executives indicated.

Support

Microsoft caput Bill Gates besides visitedA VietnamA in April 2006 and met with Prime Minister Phan Van Khai, signaling that his house might be the following major planetary participant to put in the state ‘s newcomer but arguably energetic package sector. The Vietnam Software Association ( VINASA ) , with support from the authorities, has late stepped up its selling activities and put a end to procure 10 % ofA Japan ‘s package outsourcing market by 2010.

FDI

Japan, Asia ‘s largest andA Vietnam ‘s third-biggest foreign investor, has late warmed to the chances on offer. Since 2003, notably in the aftermath of the anti-Japanese public violences inChina, A VietnamA has benefited from a new inclination among Nipponese houses to diversify their investings across the part. Rising labour costs inA ChinaA – now twice every bit high as inA Vietnam- and power deficits have driven some large new Nipponese investings off fromA Chinaand towardA Vietnam.

In January, A Japan ‘s Nidec raised its investing in the Ho Chi Minh engineering park to $ 1 billion, about dual the $ 500 million it had antecedently committed. Nipponese investors have besides committed combined financess of more than $ 250 million to industrial Parkss inA Haiphong, Long Binh, and Dong Nai states. Camera shaper Canon, meanwhile, has late shifted its planetary production toA Vietnam. Yamaha and Mabuchi Motors, excessively, have late invested to a great extent in fabrication installations here.

Vietnam ‘s call to foreign investors comes at a clip thatA ChinaA andA IndiaA still consume the king of beasts ‘s portion of Asia-directed FDI.A ChinaA is progressively the locomotor ofA Asia ‘s economic growing, whereby its turning appetency for imports and willingness to shoulder trade shortages is assisting to fuel the growing of its smaller regional neighbours. But as Asia ‘s emerging division of labour comes into clearer position, A VietnamA has plentifulness of comparative advantages to leverage in pulling new investings.

VIBRANT YOUNG WORKFORCE

Wagess inA VietnamA represent some of the least expensive – albeit low-skilled – labour in all ofAsia. With 60 % ofA Vietnam ‘s 82 million population born after 1975, the state has a vivacious immature work force, with an extra 1.5 million workers each twelvemonth, taking to 20 % per annum growing in domestic ingestion in recent old ages.

Entry schemes

OUR ENTRY STRATEGIES

We aim at go oning to turn and spread out our concern as a taking FCR operator selling ramen and Japanese-style dishes in Hong Kong and the PRC. In order to heighten the “ Ajisen ” trade name incursion and consciousness, we have identified the following as our major growing drivers in order to prosecute our growing aims:

aˆ? Expand our FCR web

aˆ? Diversify our merchandise offerings and distribution channels

aˆ? Embark on a multi-brand scheme

Expand our FCR web

Our Ajisen concatenation eating houses are our chief beginning of gross. Hence, we expect our concatenation eating houses to play an built-in portion in our gross and net incomes coevals. As we see huge potency in the Vietnam market.

We intend to spread out our FCR web in these countries. We aim to set up a lower limit of 200 concatenation eating houses by the terminal of 2015 and a sum of 320 by 2020.

In order to achieve our mark figure of eating houses, we have adopted 3 methods

to turn our FCR web

( 1 ) Organic growing ;

( 2 ) Sub-franchise agreements ; and

( 3 ) Amalgamations and acquisitions or coaction with 3rd parties.

Organic Growth

We intend to concentrate our organic growing in bing markets such as

Ho Chi Ming metropolis and Hanoi. We intend to open 35 flagship-size eating houses, 170 standard-size eating houses and 62 economy-size eating houses by 2015.

Sub-franchise agreements

Although our chief focal point will be on the enlargement of self-owned eating houses in the PRC market, we believe that selective sub-franchise development will complement our growing schemes and heighten operational efficiency, trade name incursion and consciousness every bit good as regional footmark. We plan to concentrate our sub-franchise web in the second-tier and third-tier metropoliss in the PRC as they are presently undergoing development and are increasingly turning in importance. We have entered into a consultancy understanding with Link-C, an Independent Third Party, to help us in beef uping our web substructure and standardising our operational processs, every bit good as to help us in puting out an uniform and scalable sub franchise concern theoretical account. Link-C is a Subsidiary of Link Consulting Associates-

Japan, which is one of the larger consulting houses in Japan with about 40 old ages ‘ of experience in confer withing. We have paid Link-C a sum of HKD350 000 for consultancy services during the Track Record Period. We aim to set up an extra 10 sub-franchise eating houses by 2020 and another 40 by 2025.

In order to guarantee the Ajisen dining experience is consistent throughout our web, we need to hold a standardized and scalable system to back up the bomber franchise growing.

We therefore program to set up an Ajisen preparation institute in Hanoi to supply professional preparation for our sub-franchisees to run “ Ajisen ” eating houses under our stringent control on trade name use every bit good as the quality of nutrient and services. The mark sub-franchise campaigners will typically be established local operators with good logistics capablenesss because it will cut down our investing hazards as we expand into new geographical locations.

Amalgamations and acquisitions/collaborations with 3rd parties

As portion of our enlargement programs, we will see geting suited companies which will complement our current concern theoretical account or enter into joint ventures with local spouses and foreign eating house ironss to set up new “ Ajisen ” eating houses or new trade names at strategic locations. We will measure whether the acquisition mark offers possible turnaround chances which we can leverage on by utilizing our trade name equity to better the mark ‘s operations and therefore give a positive part to the Group. Collaboration with other nutrient makers is another avenue which we are interested in researching as we seek to further spread out our merchandise offerings.

In regard of our investing programs in Ho Chi Ming metropolis, on 2016, we entered into an investing understanding with our Franchisors.

This joint venture company will have as to 20 % by us, as to 80 % by our Franchisors.

Marketing Mix

Merchandise and services

We have a strong trade name name

We have successfully established an image as a supplier of modern, high quality, healthy and reliable Nipponese nutrient. We adopt a consistent high degree of quality control to guarantee excellence in nutrient merchandise quality and service for maximal client satisfaction. We seek to distinguish ourselves from our rivals by functioning a assortment of ramen and Japanese-style dishes that cater for the different gustatory sensations and penchants of our clients. Since get downing concern in 1995, we have successfully built a repute for our Ajisen ramen as a premium quality, healthy, reliable and delightful merchandise. In acknowledgment of this, the Hong Kong Cuisine Association has certified our nutrient merchandises as healthy and alimentary. Over the old ages, we have obtained legion awards and acknowledgments from assorted organisations.

As a consequence, we have been able to pull new clients and heighten client trueness with our strong trade name name.

Our focal point is to supply efficient and friendly service. Some of our service staff have had anterior experience working in other F & A ; B companies and each of our

Ajisen eating house is staffed with experient direction forces who invariably supervise and provide on-the-job preparation to our staff.

Our strong trade name name has given us a purchase to successfully set up our eating house web in strategic locations such as premier locations with high prosaic traffic and easy handiness for clients. We besides believe that we are a valued and preferable renter for shopping promenades, leting us to negociate favourable leasingnterms with these landlords.

Our ramen and bill of fare

We market and sell our ramen with a alone white soup made from porc ribs.

In Japan, ramen is by and large served with three basic sorts of soups, categorized by their spirit:

( 1 ) White soup ;

( 2 ) miso soy bean paste soup ; and

( 3 ) Soy sauce soup.

We have chosen to function our ramen in white soup as we feel that this soup is non merely tasty but besides most familiar and suited to the culinary wonts and gustatory sensation penchants of our local consumers in Hong Kong and the Vietnam. Our Ajisen concatenation eating houses ‘ bill of fare characteristics interesting creative activities that showcase assortments which capture the gustatory sensations and spirits that our clients can place with. We have revolved around our particular Nipponese white soup base and ramen in making new formulas to accommodate to the local gustatory sensation of our clients in different parts. All our ramen dishes are served in the white soup and topped with different nutrient points such as porc, deep fried poulet, beef and ear-shell, depending on single client ‘s penchant and order. Our particular Nipponese white soup is derived from a alone secret formula formulated and produced by our Franchisor. Some of our nutrient merchandise offerings and best-sellers include tenderous ribs ramen, our hallmark Ajisen ramen dwelling of char siew ( barbeque porc ) , kimchi, bean sprouts and braised egg, Nipponese panfried dumplings and beef enoki axial rotation ( aureate acerate leaf mushroom wrapped in beef ) .

Our bill of fare is farther supplemented by other Japanese-style dishes typically found in most Nipponese restaurant bill of fares such as rice sets, stone-pot sets, barbecued nutrients, side dishes and sweets. We presently have more than 60 regular nutrient picks in our bill of fare for our clients to take from. Our pork-rib soup ramen dishes have been tested and certified as healthy and alimentary by the Hong Kong Cuisine Association.

We review our bill of fare on a regular basis and revamp it when necessary. As we innovate new formulas to provide to the gustatory sensation penchants of our consumers in Hong Kong and the PRC, our bill of fare in different parts may change somewhat in content. In order to provide to the assortment of gustatory sensations and penchants of the big consumer market, we will, from clip to clip, develop and present some new formulas to our Ajisen concatenation eating houses. We would foremost carry on a market tasting of each new formula by presenting it to certain selected eating houses to estimate our clients ‘ credence of the new formula. These dishes would so be introduced to the remainder of our Ajisen concatenation eating houses if client feedback proves satisfactory.

We have a proven eating house direction and concern theoretical account which can be easy adopted in other parts of the Vietnam

Having accumulated about 10 old ages of experience in the FCR market in

Hong Kong and, the Group has developed a direction and concern theoretical account which we believe would let us to easy spread out to other parts in Vietnam. We have established and implemented a set of systematic processs and direction guidelines which we apply when opening a new Ajisen eating house. We have organised our Group in such a mode that our Subordinates, viz. Ho Chi Ming City. and Hanoi act as independent divisional direction offices to run and pull off our Ajisen concatenation eating houses established in their several countries.

Furthermore, we will hold 2 divisional direction offices. We believe this concern and operational theoretical account will let us to spread out at a faster and more efficient gait since these regional caput offices will hold the local expertness to ease our enlargement programs. We intend to retroflex our direction theoretical account in running all our new Ajisen concatenation eating houses.

We have an experienced and professional direction squad

Our senior direction has extended managerial experience from a diverseness of background. We believe that our Group ‘s path record demonstrates the ability of our senior direction to develop our Group ‘s concern efficaciously. Prior to fall ining our Group, several members of our senior direction squad have held senior places in other nutrient service or nutrient service related organisations. We believe that their industry and direction experience will supply important parts to our success and future promotion.

Logisticss and Inventory Control

Equally far as operable, we try to centralise our stock list direction system in the Shenzhen Factory and the Shanghai Factory. Due to the perishable nature of some of our natural stuffs, we are unable to set up a to the full centralized location to hive away all our natural stuffs. Our providers will present all our natural stuffs to the Shenzhen Factory and the Shanghai Factory which in bend are responsible for the bringing of natural stuffs to the other nutrient fabrication and processing installations or Ajisen concatenation eating houses.

For the part which it is supervising, each of the six divisional direction offices is besides responsible for its ain logistics and stock list direction of natural stuffs with a short shelf-life. Our providers will present the perishable natural stuffs straight to the nutrient fabrication and processing installation which has placed the order. After scrutiny and review by our quality control sections, our natural stuffs will be stored in our warehouses or infrigidation installations. As our natural stuffs are of a perishable nature, we have refrigerated storage installations for the storage of our natural stuffs. We have implemented the ERP package to help us in the direction of our purchase orders, monitoring of stock degrees and logistics direction. We will present the processed nutrient merchandises and ramen to our Ajisen concatenation eating houses by our ain bringing vehicles. Occasionally, when we are running on a tight agenda, we will outsource the bringing of our packaged noodle merchandises to a pre-approved list of logistics companies. Food ingredients which are of a perishable nature are delivered by our bringing trucks within the same twenty-four hours they leave our mills. All nutrient ingredients, processed nutrient merchandises and/or goods delivered to each of our Ajisen concatenation eating houses and nutrient fabrication and processing installations are checked against the bringing order for measure. As at the Latest Practicable Date, we owned a fleet of 14 bringing trucks and lorries.

Our logistics and stock list control sections monitor the stock in our warehouses and will carry on a stocktake of the stock list in our concatenation eating houses and nutrient fabrication and production installations at the terminal of every hebdomad and at the terminal of every month severally. We have late implemented the ERP package to streamline our procedures and help us in our logistics and stock list direction.

Topographic point

Diversify our merchandise offerings and distribution channels

We intend to diversify our merchandise offerings. In order to retain clients and pull new 1s, we plan to constantly innovate and review our bill of fare to provide to our clients ‘ altering gustatory sensations and penchants. Consumer gustatory sensations and penchants are invariably germinating and the demand for fresh new assortment is invariably increasing as urbanisation continues. The success of our concern therefore depends on our ability to continuously better and spread out our merchandise offering to provide to the altering consumer penchants.

The sustainability of our concern besides rests upon our ability to construct an

Ajisen civilization which extends beyond our FCR eating houses into our clients ‘ day-to-day life. We plan to diversify our bing merchandises in our distribution web and give our clients wider offerings than packaged Japanese-style ramen by presenting new merchandises such as specialised soup condiments for noodles. Furthermore, we intend to present Ajisen-branded trade goods such as bowls and other dining utensils for sale at our eating houses, section shops, supermarkets, shopping centres and distributers as portion of our trade name sweetening attempt.

Monetary value and client

Embark on a multi-brand scheme

We intend to leverage on our know-how in Nipponese nutrient and Nipponese nutrient production engineering to spread out our client base and make out to different consumer sections along the insouciant dining value concatenation. Presently, our “ Ajisen ” trade name is targeted at the mass market with an mean disbursement of around HK $ 50 per caput for Hong Kong. We intend to cultivate other trade names with the appropriate channels and merchandises to make out to clients in the higher-spending every bit good as the lower-spending groups in Vietnam.

Based on the above concern schemes, we estimate our capital outgo for the fiscal twelvemonth ended 2012 to be about HK $ 65.0 million and for the fiscal old ages stoping of 2015 and 2020 to be about HK $ 209.0 million and HK $ 414.7 million severally.

Our eating house clients

Our mark clients are clients between the ages of 20 and 40 who are looking to dine in a comfy and aesthetically pleasing environment at low-cost monetary values. We believe that these groups of people are the 1s who have a comparatively higher degree of passing power, given that their instruction and income degrees have been steadily increasing over the old ages. As our Ajisen concatenation eating houses are involved in retail gross revenues, none of our clients accounted for more than 30 % of our turnover in the Track Record Period. Our clients are walk-in clients and regular frequenters, whose single one-year outgo at our assorted Ajisen concatenation eating houses do non represent a important per centum of our turnover. Most of our gross revenues are paid at the clip of purchase by hard currency. Our gross revenues in the Vietnam are denominated in Renminbi and Vietnamese dollar severally.

Promotion

Brand consciousness

All our concatenation eating houses and packaged noodle merchandises are marketed under the “ Ajisen ” trade name and logo. Our selling section is responsible for the advertisement and publicity of our Ajisen concatenation eating houses and packaged noodle merchandises. Since the F & A ; B industry is a extremely competitory industry, we recognize the importance of developing public consciousness of our trade name and corporate image of our

Ajisen concatenation eating houses and packaged nutrient merchandises, and to cultivate trueness of our clients. We believe these factors are important for us to keep our competitory border.

We have sought to make a repute for our nutrient merchandises as healthy, reliable and delightful. We have been recognized as a “ Famous F & A ; B Brand Enterprise ” for 2004/2005 by the International Restaurants Association. We will endeavor to beef up our trade name by go oning to develop new merchandises and formulas to run into the ever-changing gustatory sensation penchants and demands of our clients.

Presently, we market ourselves through periodic telecasting advertizements.

We besides advertise in lifestyle magazines. We maintain web sites:

hypertext transfer protocol: //www.ajisen.com

For our clients in Hong Kong, Vietnam and the others.

For each of the three fiscal old ages ended 31st December 2008 and the nine

months ended 30th September 2009, our selling and publicity disbursals were about HKD3.2 million, HKD6.6 million, HKD6.9 million and HKD7.5 million, severally stand foring about 8.0 % , 8.6 % , 6.2 % and 6.6 % , severally of our distribution and merchandising disbursals for those periods. To increase the trade name consciousness of our Group, we intend to concentrate some of our resources and seek more advertisement channels to better the populace ‘s consciousness of our trade name.

Decision

We aim to go on to turn and spread out our concern as a taking FCR operator selling ramen and Japanese-style dishes in Vietnam.

We continuously assess hereafter chances every bit good as identify and measure possible locations for our new Ajisen concatenation eating houses. We intend to leverage on our strong trade name name and extended experience to go on developing our concern in our chosen markets.

We propose to adhere to our concern theoretical account in prosecuting our hereafter programs. By following our hereafter programs and the proposed schemes, we believe that we will be able to further beef up our “ Ajisen ” trade name every bit good as enhance profitableness and returns.

Looking frontward

Our scheme of acquiring into Vietnam is to leverage on our competitory strengths so that we can go on spread outing our web. We planned to hold a lower limit of 20 eating houses by the terminal of 2015 in Vietnam and besides a lower limit of 32 eating houses by the terminal of 2025. This will be achieved through a combination of planes, which is including organic growing ; sub-franchising and where executable ; amalgamations and acquisitions. We are besides planned to diversify our merchandise offerings and distribution channels in order to appeal to more and more clients and develop other trade names or merchandise lines in order to widen our client base.

Looking frontward, we are confident that we can and will be able to accomplish these aims, in order to consolidate our place as the taking operator of nutrient maker in Vietnam.