Bsc (Honours) Hospitality Business Management
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Faculty of Organisation and Management BSc (Honours) Hospitality Business Management Title: The study of the success of the fast food industry in Hong Kong Name: Chan Kai Wah, Eric Student No: 91203406 Month Year April 2009 Sheffield Hallam University Faculty of Organisation and Management Title: The study of the success of the fast food industry in Hong Kong FULL NAME: Chan Kai Wah STUDENT No; 91203406 Supervisor: Professor Ray Pine In partial fulfilment of the requirements for the degree of Bachelor of Science in Hospitality Business Management. Month Year April 2009 1 Abstract The aim of this research study was to analyze the success of fast food industry in Hong Kong. The objectives were to define the relationship between Hong Kong eating culture and the success of fast food industry, and to give suggestions to “cha chaan tengs” , the Hong Kong style restaurants, which were under the thread of fast food restaurants. This research study provided the basic history and information of fast food restaurants and “cha chaan tengs”, and the keys to their success and its relationship to Hong Kong culture. The research result was come from the collection and analysis of quantitative data from a questionnaire. The questionnaire consisted of thirty-eight questions including twelve likert scale questions. The Questionnaire were taken place in interviewer-administered interview and self-completion surveys.The results of conducting this questionnaire may help to find out if our eating culture was linked to the success of the Hong Kong fast food industry. For example, sixty five percent of the participants like eating fast food. It may be an effective strategic initiative that enables long-term success, enhances value, and helps to increase an organizations competitive advantage. It can also provide “cha chaan teng” some suggestions to improve their own management, such as, improving the hygiene level of the restaurant and reduce the waiting time for the food production. It may let them know how to survive in the economic environment nowaday. 2 Contents Abstract 2 Contents 3 List of Figures 6 List of Tables 6 Chapter 1: Introduction Rationale 9 Aim of research 10 Objective of research 10 The subject area & the areas in which the research will cover 10 The overall structure of the report 12 Chapter 2: Literature Review Introduction 13 Culture 13 Success 14 Fast food 15 Cha chaan teng 16 History of fast food industry in Hong Kong 17 Factors make fast food become success 20 3 The link between culture and the success of fast food industry in 24 Hong Kong Chapter summary 29 Chapter 3: Methodology Research method 30 Primary research 31 Secondary research 31 Research instrument 32 Target interviewee 32 Sampling 33 Data collection media 34 Questionnaire design 35 Data analysis 36 limitations 36 Chapter summary 37 Chapter 4: Results Introduction 38 Quantitative data collection 38 Questionnaire-Part A 39 4 Questionnaire-Part B 52 Questionnaire-Part C 55 Questionnaire-Part D 59 Chapter summary 63 Chapter 5: Conclusions and Recommendations Conclusions 64 Recommendations 65 Recommendation for further research 67 References 68 Appendices Appendix 1. The final questionnaire 78 5 List of Figures Figure 1: Monthly purchase frequency for fast food and drinks in Hong 28 Kong List of Tables Table 1: Top ten global markets for weekly fast food consumption 27 Table 2: Frequency Distributions-Demographic Questions 40 Table 3: Frequency Distributions-Monthly Income & Occupation 42 Table 4: Frequency Distributions-Do you like eating fast food? 42 Table 5: Cross tabulation of Length of Stay in Hong Kong & ‘Do you 43 like eating fast food?’ Table 6: Frequency Distributions- ‘Have you visit fast food restaurant 44 before?’, ‘Could you find a fast food restaurant near your working place or school?’ &‘How often do you visit a fast food restaurant?’ Table 7: Cross tabulation of Occupation & ‘How often do you visit a 46 fast food restaurant?’ Table 8: Frequency Distributions-‘Which meal do you usually have in 47 fast food restaurant?’ 6 Table 9: Frequency Distributions- ‘How much time do you have for 48 meal?’ & ‘How much do you usually spend on each time?’ Table 10: Cross tabulation of Respondent's Age & ‘How much time do 49 you have for meal?’ Table 11: Frequency Distributions- ‘Do you think that the new fast food 50 products can attract you to visit fast food restaurants?’ Table 12: Frequency Distributions-‘What is the most important thing 50 when you choose a fast food restaurant to dine?’ Table 13: Cross tabulation of Respondent's Age & ‘What is the most 51 important thing when you choose a fast food restaurant to dine?’ Table 14: Descriptive Statistics-Questionnaire Part B-means 52 Table 15: Frequency Distributions-Questionnaire Part C 56 Table 16: Frequency Distributions-‘In your opinion, why is fast food so 60 popular among Hong Kong?’ Table 17: Frequency Distributions-‘What thing do you think the fast 61 food restaurants need to improve most?’ Table 18: Frequency Distributions- ‘Which places do you prefer to have 61 meal, fast food restaurant or cha chaan teng?’ 7 Table 19: Cross tabulation of Occupation & ‘Which places do you prefer 62 to have meal, fast food restaurant or cha chaan teng?’ Table 20: Frequency Distributions- ‘Have you ever been affected by the 62 financial tsunami?’ Table 21: Cross tabulation of ‘Have you ever been affected by the 63 financial tsunami?’ & ‘What is the most important thing when you choose a fast food restaurant to dine?’ 8 Chapter 1 Introduction Rationale All people need to eat. Eating is an essential need for people’s life. The Hong Kong economy is now influenced by the financial tsunami. Many restaurants are now facing their own financial problems and some of them choose to close their business to avoid further loss. According to Wong (2008), a Japan chain restaurant was closed because of the financial problems. Although the financial tsunami affected the Hong Kong economy, it seemed not having much effect on the fast food industry. According to the Standard (2008), 1,000 companies included the Fast food companies planned not to cut manpower in the coming year and provided more than fifty thousand jobs to the unemployed people. The fast food industry was challenged with complex and dynamic operating environments. The restaurant location, taste of food, eating culture of people, price and etc influenced the success of the fast food industry. According to Lumpur (2005), the type of cuisine, price and convenient location were found to be the most important choice criteria across around the globe. Because of the Firebaugh (2006) said that success depended on what you were searching for in life, and searching for in business. “Ongoing development and improvement is essential if the catering industry is to continue its positive growth trend.” (First 9 National Bank, 2009). Aim of the research The aim of the research is to discover why the fast food industry is successful in Hong Kong. Objectives of the research The objectives of the research are to find out how Hong Kong culture is linked to the success of the fast food industry and to provide some recommendations to the “cha chaan teng”, the traditional Hong Kong style restaurant. The subject area & the areas in which the research will cover The subject area of the research was to find out how the Hong Kong eating culture is linked to the success of the fast food industry. It was because many restaurants chose to close their business or cut their budget but only the fast food restaurants chose to expand their business during this hard time. According to Scent (2008), the senior investment strategist of DBS Bank (Hong Kong), Daniel Chan Po-Ming said that only the fast food industry could have a good performance. According to the Café de Coral Final Report to Shareholders (2008), they have planned to build a new food 10 processing plant and open new branches. The success of fast food industry was not only because of the price of food and the large financial support. It was also because of the eating culture of the Hong Kong people. According to Goodman et al (1991), fast food first appeared in 1950. Due to a long history of establishment in Hong Kong, the fast food industry must have its own key factor to be successful. According to the Swiss Association for Nutrition (2003), the success of the fast food was related to the living conditions of people, such as, more working people, short meal time and etc. Other area of the research is to provide some recommendations to “cha chaan teng”, the traditional Hong Kong style restaurant. The recommendations were in chapter 5. Understanding what the key factors to success are can help the fast food companies to make improvement. The fast food companies may know more about what they need to do more to cater the customers’ needs. It may also help “cha chaan teng” to know what they need to improve. It was because learning from the strengths and weaknesses of the competitors can help the company to find out which strategy they need to choose. Also, it can help to boost the economy of Hong Kong because of the keen competition among the industry. 11 The overall structure of the report The report was divided into five chapters. Chapter one was the introduction. It was to introduce the overall structure of the report. It included the aim and objectives of the research and the rationale and the areas in which the research would cover. Chapter two was the literature review. The information in this chapter was collected from the internet, chapters in books, newspaper, statistical digests and research report from the agent.