Background of Company – Old Chang Kee
Background of Company
In today’s world, businesses are going through tremendous and rapid changes as the world go through globalisation. Companies have to constantly update and go through various methods to make sure that their businesses are always on par with their competitors and one of the businesses that have went through countless changes to dominate the food industry in Singapore is Old Chang Kee.
Old Chang Kee started out in 1956 from a small stall in a coffee shop along McKenzie Road. The speciality was its handmade curry puff, filled with generous fillings of curried potatoes, egg slice, chicken chunks and it was fried to perfection (Old Chang Kee, 2005a). Up till today, it is unmistakably one of Singaporeans favourite delicacy when it comes to Old Chang Kee.
Old Chang Kee prominently grows into a very successful company in Singapore and besides curry puffs, more delicacies were added into the menu which were mainly deep fried snacks consisting of fishballs, chicken wings, chicken nuggets and many others. Throughout the years the company won awards including the Singapore Promising Brand Award by ESME and Lianhe Zhaobao in 2004. Old Chang Kee also opened an extension branch called Take 5 and Pie Kia, selling ready hot meals and pies with different fillings in 2006 and 2007 (Old Chang Kee, 2005b).
External Environmental Analysis
External Environmental Analysis is conducting a strategic analysis and gives a certain overview of the different macro environmental factors that the company has to take into consideration. It includes political, economic, social and technological factors.
Political factors
Corporate income tax in Singapore is currently 17% after the Year of Assessment 2010. (IRAS, 2012a) Lower income tax generally means companies pay lesser tax to the government and hence resulted in more savings for other useful investments or better cash flow in the company. The government also introduced a new tax rebate scheme for Year of Assessment 2012 and the scheme grants new start-up companies with a one-off 5% SME Cash Grant. This cash grant is given to companies to compensate for the high costs during slow business periods. (IRAS, 2012b) Companies like Old Chang Kee can definitely benefit from the cash grant.
Economic Factors
According to Trading Economics (2012), from 1988 until 2012, Singapore interest rate averaged 1.7% reaching an all time high of 20.0% in January of 1990 and a record low of -0.8 Percent in October of 1993. High interest rates are definitely a good sign for investors but it has a bad effect on overall economy in the long run. Higher interest rates are often associated with inflation of the economy, which will result in consumers spending less, leading to lower