Cafe de Coral Business to Europe

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Cafe de Coral

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Strategic issue: Should Cafe de Coral expand their business to the European market?

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Photo: Cafe de Coral at Uptown Plaza, Tai Po, Hong Kong Source of image: Wikipedia user - Wing1990hk

Student Name: Kam Wing Chi (10430181)

Background
Cafe de Coral is a well-known fast food restaurant group in Hong Kong. It owns and operates fast food chains and restaurants including Cafe de Coral, The Spaghetti House, Ah Yee Leng Tong, etc. Cafe de Coral group is also recognized as the world largest Chinese fast food restaurants, its business has grown to operate over 580 separate stores across its brands all over Hong Kong, Mainland China, Southeast Asia, North America, etc.

Since 1968 Cafe de Coral opened its first restaurant in Causeway Bay, Hong Kong. There were 11 Cafe de Coral restaurants until 1980, but somehow, they were not all fully self-serving as nowadays. Since the consumer behavior back to the 1970s was traditional, self-serving was a new idea in the market, these caused a big impact to their business. Cafe de Coral management did a lot of hard works like promotion on how does the self-serving mean and work, arranging stationary staff to help the necessary customers. All these public relationship works had gained their business be back on track.

In 1979, Cafe de Coral established its first food processing plant in Yau Tong, a move commonly taken to lower costs and ensure consistency. In 1986, it became the first restaurant group to be a listed company in The Hong Kong Stock Exchange. Until now, Cafe de Coral operates over 100 chain stores in the Hong Kong region.

Throughout all the Cafe de Coral products til now, there are many signature dishes. Such as the “Baked Pork Chop Rice”, “Grilled Unagi (eel) Rice”, “Roasted Spring Chicken”, “Grilled Steak”, “Barbecue Meat”, etc. Many of them are still the most popular dishes among their business. Also, these products’ ingrediants are mostly imported from Europe and South America.

Beside their business strategic, they developed scientific managment mainly improving economic efficiency, especially in labour productivity. They created numbers of detailed and strict working regulations. The aim was to ensure foods in any chain restaurant share the same quality. Also, their bureaucracy is working as formal structure. Every restaurant is individual to the others, and each store is described as a team, the store manager is the leader and his responsiblity is to plan, organize, lead and control in Cafe de Coral in order to reach the goals.

Back to the 1990s, Cafe de Coral made its first acquisition by buying the Ah Yee Leng Tong chains for $14 million HKD. A year later in 1991, it acquired The Spaghetti House, a popular chain that served HK-style Italian food. In 1996, Cafe de Coral opened up its first Bravo le Cafe restaurant and at the same year, it acquired Scanfoods, a ham processing and food distribution business. In 1998, it started another restaurant chains called Super Congee & Noodle. In the 2000s, Cafe de Coral acquired China Inn, New Asia Dabao, and Oliver's Super Sandwiches. Those restuarants are mainly Hong Kong based business. Beside those localized acquisitions, Cafe de Coral group also acquired their first oversea business, Manchu Wok. It is a Chinese fast food chain restuarant in United States and Canada, and operates over 200 stores. Most of the stores are in shopping mall locations.

From the business strategic of Cafe de Coral group, it seems successful in the Hong Kong market. According to a statistics of Census and Statistics Department in 2011, it owned 20% of market share, which was the highest percentage among local fast food restaurants in Hong Kong. Until November 2012, the net profit of the Cafe de Coral group was HKD474 millions in 2012. However, comparing to the last 2 years of revenue, their financial net profits were remained almost same...
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