Business Proposal for Lee Kum Kee
Autor: Maryam • September 7, 2018 • 3,362 Words (14 Pages) • 923 Views
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Section2: IFAS Analysis
Internal factor analysis summary
Internal Factors
Weight
Rating
Weighted Score
Comments
Strength
- Strong Distribution Network
0.15
5
0.75
Distribution network of Lee Kum Kee covered 60 countries
- Product differentiation
0.1
4
0.4
Provide steam fish soy sauce other than general purpose soy sauce provided by its competitors
- High quality of product
0.15
4
0.6
Attract more customers with high requirement on sauce
- Brand name
0.1
4
0.4
Enjoy powerful brand name
- Wide range of sauce
0.1
4
0.4
Satisfied different needs of customers
Weakness
- Lack of promotion in social media channel
0.1
2
0.2
Cannot attract and target the younger customers
- Unattractive package of products
0.1
2
0.2
Package with old fashion design
- Highly rely on the natural resource and raw material, e.g oyster, chili
0.1
3
0.3
Less supply when bad harvest year
- Facing difficulty in International market
0.05
3
0.15
Have difficulty to expand China market
- Higher price than other competitors
0.05
3
0.15
Customers may choose other brands
Total Score
1
3.55
The overall score is 3.55 which mean Lee Kum Kee responses to internal strengths and weaknesses is above average.
Problem 1 : Promotional issuses and suggestion
Although Lee Kum Kee International Holding Limited has high quality products and lot of product types, their main customers are limited to the Asian countries and middle-aged people. In other word, the brand development of Lee Kum Kee International Holding Limited is restricted from their insufficient promotional strategy and it can be divided to three parts, 1) Content, 2) Channel and 3) CSR.
Lee Kum Kee is now providing more than 200 kinds of products, while the television commercial we can find in Hong Kong were only introduced the soy sauce and oyster sauce. Moreover, the main content in those commercial is they are free from preservative only. The promotional plan ignores the Company’s modern facilities, quality assurance, industrial safety and environmental hygiene, which are the important factors to the customers also.
Also, Lee Kum Kee did not use well the internet advantages which can touch more types of customers, like teenagers. Apart from the traditional television commercial, Customers, especially teenagers are also paying close attention to the social media, like YouTube, Facebook, Instagram and Twitter.
YouTube
Subscriber
14,367
46,297
-
919
From the table, however, we can see that the social media subscriber for Lee Kum Kee is relatively low, especially for an international company providing product to more than 100 countries. For some examples, the active users in Instagram in June 2016 was around 500 millions people (Boy, 2016), while Lee Kam Kee have not pay any effort in it. Also, the last uploaded video in YouTube was four months ago, which loss numerous chances to reach the new customers in a fast information propagation world. (Stavrianea, 2015)
Lastly, people are willing to pay a premium price to the products with social responsibility. (Fagerstrøm, 2016) Lee Kam Kee has used the product differentiation but not the cost leadership to differentiation itself to other similar products in Hong Kong, like KONGIG Hong Kong, Yummy House and Kikkoman HK. However, the higher price makes Lee Kam Kee loss the customers who have higher price sensitivity to the condiment.
However, It is found that customers now are willing to pay a premium price to the products with social responsibility. In 2016, Lee Kam Kee has pay lot of efforts and subsidy to care the community, involving educational subsidy, elderly care, catering development in HK and environmental protection. (Lee
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