Case 1 Bauhinia Case 2014
Bauhinia
© Martinsons & Associates 2009
Licensed exclusively for use at the City University of Hong Kong.
Unauthorized use or reproduction of this case is strictly prohibited.
This is a composite case that integrates the experiences of several companies.
In the early 1970s, the Chan family pooled together $30,000 and set up a small dairy processing plant in Hong Kong. Bauhinia Dairy initially produced only fresh milk and sold it through limited distribution channels. It has subsequently modestly extended its business scope and now employs nearly 400 people. It remains a family-owned enterprise that values its traditions and relies mostly on verbal communications. Face-to-face meetings are still more common than memos, e-mails or other forms of communication. Bauhinia has gradually adopted a more formal management structure, but has remarkably few written policies, procedures or job descriptions given its size. At the operational level, many work processes are being documented and standardized as part of an ISO 9000 certification process.
Industry characteristics and business performance
Food suppliers in Greater China have traditionally had modest profit margins and limited consumer loyalty. However, the region’s economic development since the 1980s has increased the demand for healthier foods and exotic items from all over the world. Recent market research found significant increases in both the demand for and the willingness to pay premiums for food items that are perceived to be nutritional, sophisticated and/or exceptional.
Bauhinia was one of the first locally-owned dairy processing firms in Hong Kong. A few large grocery retailers now account for most of the industry’s revenue, which is defined to include both liquid and powdered milk, yogurt, cheese and dairy desserts, but not ice cream. In contrast to the deteriorating performance of many other “small fish”, Bauhinia has remained competitive by limiting its activities and distribution channels in order to
© Martinsons & Associates 2009
Licensed exclusively for use at the City University of Hong Kong.
Unauthorized use or reproduction of this case is strictly prohibited.
This is a composite case that integrates the experiences of several companies.
In the early 1970s, the Chan family pooled together $30,000 and set up a small dairy processing plant in Hong Kong. Bauhinia Dairy initially produced only fresh milk and sold it through limited distribution channels. It has subsequently modestly extended its business scope and now employs nearly 400 people. It remains a family-owned enterprise that values its traditions and relies mostly on verbal communications. Face-to-face meetings are still more common than memos, e-mails or other forms of communication. Bauhinia has gradually adopted a more formal management structure, but has remarkably few written policies, procedures or job descriptions given its size. At the operational level, many work processes are being documented and standardized as part of an ISO 9000 certification process.
Industry characteristics and business performance
Food suppliers in Greater China have traditionally had modest profit margins and limited consumer loyalty. However, the region’s economic development since the 1980s has increased the demand for healthier foods and exotic items from all over the world. Recent market research found significant increases in both the demand for and the willingness to pay premiums for food items that are perceived to be nutritional, sophisticated and/or exceptional.
Bauhinia was one of the first locally-owned dairy processing firms in Hong Kong. A few large grocery retailers now account for most of the industry’s revenue, which is defined to include both liquid and powdered milk, yogurt, cheese and dairy desserts, but not ice cream. In contrast to the deteriorating performance of many other “small fish”, Bauhinia has remained competitive by limiting its activities and distribution channels in order to