International Experience Final Paper ______GBM 685: International Business

CALIFORN IA STATE UN IVERSITY SAN MARCOS

PROJECT SIGNATURE PAGE

PROJECT SUBMITTED IN PARTIAL FUFI LLM ENT OF THE REQU IREMENTS FOR TH E DEGR EE

MASTER OF BUSINESS ADMIN ISTRATION

PROJECT TITLE : International Busi ness Final Paper

AUTHOR : Jalen Fields

th PRESENTATION DATE : August 8 , 2018

THE PROJECT HAS BEEN ACCEPTED BY THE COMMITTEE IN PARTIAL FUFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION.

Name of Project Advisor: William Byun

/JV IL-l-f A Project Advisor (Full Name) Signature Date ame of Second Reader: Mohammad Oskoorouchi /4 Project Second Reader (Fu ll Name) 7 Signature Date International Experience Final Paper ______GBM 685: International Business

Prepared By: Jalen Fields

8/9/2018 Table of Contents Executive Summary ...... 4 Introduction ...... 6 Economics ...... 7 Inflation ...... 7 Exports ...... 8 Imports ...... 8 Import Tariffs ...... 8 Trade Barriers ...... 8 Market Entry Strategy ...... 9 Market Challenges ...... 10 Financials ...... 11 Risk Assessment ...... 12 Culture...... 13 Gender ...... 13 Religion ...... 13 Class ...... 13 Ethnicity ...... 13 Black Model ...... 14 Brake Model...... 14 Rosen Model ...... 15 Keong Saik Bakery ...... 17 Company Overview ...... 17 Recommendations ...... 18 Focus on healthier desert options ...... 18 Industry Overview ...... 18 Competitor Analysis ...... 19 Internal competition ...... 19 External Competition ...... 19 Singapore’s competitive landscape ...... 20 Successful Strategies ...... 21 Market Trends ...... 21 SWOT Analysis ...... 23 Industry Risk ...... 23 Health and Wellness in Singapore ...... 24 Catering Project ...... 26 Competitor Catering Analysis...... 26 Keong Saik Catering Packages ...... 26 Breads ...... 26 Singapore Vs United States ...... 28 Similarities ...... 28 Differences ...... 28 Conclusion ...... 29 Appendix A ...... 30 Appendix B ...... 31 Appendix C ...... 32 Appendix D ...... 33 Appendix E ...... 34

3 Executive Summary

The purpose of this thesis is to implement the various skills and techniques learned while studying in the Master of Business Administration program taught at California State San Marcos. This report analyzes Singapore, and potential opportunities that exist within this country from a business perspective. The motivation of this report is to analyze how business is conducted internationally outside of the United States. To gain insight on Singapore’s business opportunities, I conducted research on the economic, financial, and cultural aspects of the country. I also spent two weeks in Singapore working with a small local bakery called “Keong Saik Bakery”. While there I analyzed the local bakery industry and worked on a project to help the bakery gain more market share and compete with larger competitors. The limitations of this report were time spent in the actual country. Due to the short time I was spent in the actual country, I was only able provide limited first-hand experience of the countries business culture. Singapore is currently ranked in second place on the ease of doing business scale. They are classified as a high-income economy. The country is in the developing stages but growing at a very fast rate. Singapore has been highly ranked as having the most open, least corrupt, and most pro-business economy in the world. Their consumer price inflation rose up to .6% in June 2018, this was an increase from .4% in May 2018. One of Singapore’s major strengths is in the development of high value-added sectors such as new technologies, finance, chemicals, and pharmaceuticals. One weakness of Singapore is that their economy is very dependent on exports. They are generally a free port and open economy, more than 99% of imports into the country enter duty-free. Singapore levies a 7% goods and services tax. Singapore has maintained a very liberal trading regime in the world, but the United States faces several trade barriers. The government of Singapore estimates that more than 4,200 U.S. firms, both large and small have established businesses in the country. Many U.S. exporters use agents or distributors to serve to the Singaporean and other Southeast Asian markets. A key challenge for American companies operating in Singapore is competition with global suppliers. U.S. companies can expect increased operating cost and less availability of foreign labor due to the countries attempts to restructure its economy. The GDP per capita in Singapore is $93,905, much higher than the US GDP per capita of $59,531. Singapore has shown an annual GDP growth rate of 3.619% over the last 5 years, which is greater than the U.S.GDP growth rate of 2.273%. The main driver in Singapore’s economy is the services industry, this industry makes up for 70.44% of the country’s GDP. Singapore is classified as “very low risk” from a political and economic perspective. While they have a high level of public debt, it is made up for by the size of their financial assets held by the sovereign funds. Singapore is still a male-centric society at some levels. Singaporean males who marry foreigners, their spouse will be eligible for citizenship. This does not apply for female Singaporeans who marry a foreign male. Singapore is officially a secular state, meaning they are not connected with any religious or spiritual matters. There are three main ethnicities within Singapore; Chinese, Malay, and Tamil Indian. Chinese and Indian are at the top of the economic and political standings, Malays are significantly behind. Yuzhong Tan is the owner of Keong Saik Bakery located on Keong Saik Rd in Singapore, Singapore. They provide cakes, bread, cookies, pastries, breakfast items, and drinks. There are many local competitors within the baking industry in Singapore. Singapore’s economy has evolved away from a manufacturing economy into a service economy. Yuzhong is looking to scale up his bakery and expand by focusing on the new young urban consumers. He is a master engineer receiving degrees from both Michigan and Cal Berkeley. He himself is an example of how traditional industrial Singapore is shifting

4 into a younger service industry. Keong Saik bakery aims to be a symbol of the new industrial evolution of the Singaporean business model. The global baking goods industry has shown a moderate increase over the past five years and is anticipated to continue at a steady growth rate. Artisanal producers continued to dominate retail value sales of baked goods in 2017. The overall food and drink industry within Singapore is heading towards more health-oriented options. The Singaporean government is making many efforts to implement rules that limit the sugar content within food drinks that consumers are purchasing. Flatbreads have shown to be a growing healthy option among consumers. The government started a “War on Diabetes” in Singapore in 2016. In August 2017, major players signed an agreement with the Health Promotion Board to reduce the sugar content of their drinks to no more than 12g per 100ml by 2020. The direction the market is heading is very clear, the government is trying to reduce the overall sugar consumption among Singaporean consumers. When I first arrived at Keong Saik bakery I presented my findings and recommendations with Yuzhong. I showed him the latest market trends and where I believed he could find a niche in the baking industry. He informed me that he had actually tried to develop healthier food items for a while. The food items were unsuccessful, and he decided to focus on his regular items. Although the market trend is heading in the direction of healthier food items, he believed that the demand was not quite there and maybe in a few years it would become more popular. He was not interested in creating healthy food options for consumers at this moment in time Yuzhong had been looking into creating catering packages that he could offer to larger corporations as a way to improve his volume of sales and compete with the larger chains. He tasked me with helping him create carious catering packages for the bakery that consumers could purchase. To first get an idea of what packages I wanted to create for Keong Saik Bakery, I decided to conduct research on the local competitions catering packages they currently offered. I emailed one of the largest local competitors “Bread Talk” and was able to get them to send me a full list of their catering options. I created 3 different packages for his bread items based on the items prices. The regular package contained items ranging from (S$ 1.60- (S$ 2.50); Premium package items ranged from (s$2.60- (S$ 3.40) and Super Premium items ranged from (S$ 3.50 – (S$ 4.50). I also created a “Custom” package that allows the customer to select multiple items from each package. To come up with a price for each package, I took an average of the price of each item within the package, then multiplied it by the minimum number of items that must be purchased (this number was selected by Yuzhong). The price of the custom package is a weighted average of all three packages multiplied by the minimum number of items that must be purchased. Yuzhong plans actually to implement the catering packages I created and help Keong Saik bakery gain additional market share. I was pleasantly surprised with some of the similarities that Singapore has in relation to the US. Their culture is extremely diverse, and almost everyone their spoke English. One factor that I found to be very different was that in Singapore there seemed to be a limit on the amount of food someone could order. On multiple occasions while we were eating at local restaurants we either stopped receiving service, or we told we could not order any more food. During my time in Singapore I have been able to get a first-hand look at the various business opportunities that the country has to offer. The country is in the developing stages and growing at a very fast rate. This experience has taught me much about how to analyze and view aspects of a country from a business perspective. I would recommend starting a business in Singapore. The country’s economy has showed continued growth and there are many opportunities to have successful businesses within this economy. They are ranked second in ease of doing business and have a very low risk rating. Singapore has the political and economic stability that business owners are looking for.

5 Introduction

The goal of this thesis is to examine various aspects of a country in regard to its potential business opportunities. The country I will be focusing on is Singapore, located in Southeastern Asia. Singapore is an island country located just off the southern portion of the Malay Peninsula. The capital city in Singapore is Singapore. The country’s land consists of one main island along with 62 other islets. Since gaining their independence, extensive land reclamation has increased its overall size by 23%. Singapore has a strategic location for Southeast Asian Sea Routes. The standard currency used is the Singapore Dollar (S$). The conversion ratio of Singapore dollar to US dollars is S$1 to $.73. The current government system in Singapore is a parliamentary republic. The chief state is President Halimah Yacob and the head of government is Prime Minister Lee Hsien Loong. Singapore has a highly free market economy in which the economy is open and corruption-free. The Republic of Singapore, an independent member of the Commonwealth, achieved independence in 1965. The president is elected for a six-year term by the people (Euromonitor, 2018). The prime minister and the cabinet are appointed by the president and are responsible to parliament (Euromonitor, 2018). Parliament has up to 96 members, 87 members elected for a five-year term in single-seat and multi-seat constituencies and up to nine members appointed by the president and up to three Non-Constituency MPs from opposition political parties appointed to ensure a minimum number of opposition representatives (Euromonitor, 2018). Singapore is currently a part of the Asia-Pacific Economic Corporation (APEC). APEC is a regional economic forum made up of 21 members with the goal of leveraging the growing interdependence of the Asia Pacific. Their aim is to increase quality of life for the people of the region. The way they achieve this is by promoting balanced, inclusive, sustainable, innovative, and secure growth. Also, accelerating regional economic integration plays a major role. Singapore is also a member of the Association of Southeast Asian Nations (ASEAN). The aims and purposes of ASEAN as listed on their website are as follows: To accelerate the economic growth, social progress and cultural development in the region through joint endeavors in the spirit of equality and partnership in order to strengthen the foundation for a prosperous and peaceful community of Southeast Asian Nations; To promote regional peace and stability through abiding respect for justice and the rule of law in the relationship among countries of the region and adherence to the principles of the United Nations Charter; To promote active collaboration and mutual assistance on matters of common interest in the economic, social, cultural, technical, scientific and administrative fields; To provide assistance to each other in the form of training and research facilities in the educational, professional, technical and administrative spheres; To collaborate more effectively for the greater utilization of their agriculture and industries, the expansion of their trade, including the study of the problems of international commodity trade, the improvement of their transportation and communications facilities and the raising of the living standards of their peoples; To promote Southeast Asian studies; and To maintain close and beneficial cooperation with existing international and regional organizations with similar aims and purposes and explore all avenues for even closer cooperation among themselves. The currency used in Singapore is the Singapore Dollar (SGD). Currently 1 SGD is equivalent to $.75. Singapore currently ranks 2nd out of 190 on an ease of doing business scale, as shown in Figure 1.

6 Economics

Figure 1: Ease of Doing Business Rank

The World Bank ranked Singapore the second easiest place to do business in the world. U.S. companies should consider exporting to Singapore for the following reasons: Major ICT, distribution, and logistics hub; as such, many consider it the gateway to the ASEAN region (Export, 2018). Lack of corruption Favorable tax codes Strong intellectual property protection English speaking population

Singapore is currently classified as a high-income economy. They are in the developing stages but growing at a very fast rate. Singapore has been ranked as having the most open, least corrupt, and most pro-business economy in the world.

Inflation

Singapore's consumer price inflation rose to 0.6 percent year-on-year in June 2018 from 0.4 percent in the previous month, matching market consensus (Treadingeconomics,2018). It was the highest rate since last November, mainly boosted by higher prices of food and transport while housing deflation eased (Treadingeconomics,2018). Inflation Rate in Singapore averaged 2.60 percent from 1962 until 2018, reaching an all time high of 34 percent in March of 1974 and a record low of -3.10 percent in September of 1976 (Treadingeconomics,2018). Food inflation increased to a four-month high of 1.5 percent in June, from 1.3 percent in the prior month (Treadingeconomics,2018). Among food excluding food servicing services, cost went up mainly for: bread & cereals (2.1 % vs 1 %); meat (0.5 % vs 0.1 %); fish and seafood (3.5 %vs 1.8 % milk, cheese & eggs (1.8 %vs 1.3 %); oils & fats (4.1 % vs 3.4 %); and fruits (1.2 % vs 1.4 %) (Treadingeconomics,2018). By contrast, vegetables prices continued to drop (-1.5 %vs -1.1 %) (Treadingeconomics,2018). Among food servicing services, inflation was unchanged for all categories: hawker food including food courts (at 1.6 %); restaurant food (at 1.7 %); fast food (at 0.1 %); and catered food (at 0.3 %) (Treadingeconomics,2018). Additional upward pressure came from: transport (0.3 % vs unchanged in May) driven in particular by private road transport cost (0.4 % vs 0.1 %); recreation & culture (1.4 % vs 1.2 %) due to holiday expenses (2.4 % vs 2.1 %) and recreation & entertainment (0.6 % vs 0.5 %); education (2.9 %, the same as in May); healthcare (2.4 % vs 2.3 %); miscellaneous goods & services (1.2 % vs 1.1 %); household

7 durables & services (0.9 % vs 0.8 %); communication (0.2 % vs -0.8 %); and clothing & footwear (1.5 % vs 0.6 %) (Treadingeconomics, 2018).

Exports

In 2017, Singapore maintained its position as the United States’ 13th largest export market and advanced one rung to 18th largest trading partner (Export, 2018). Appendix A provides a list of Singapore’s top ten export countries. U.S. goods exports to Singapore were $29.8 billion, up 11.3 percent ($3.0 billion) in 2016, reflecting the sixth largest goods trade surplus of US$10.4 billion (Export, 2018). Singapore is an important partner of the United States with a bilateral, gold standard, Free Trade Agreement (FTA) signed in 2003 and implemented January 1, 2004 (Export, 2018). It was the first U.S. FTA signed in Asia (Export, 2018). Singapore’s gross domestic product grew 3.6% in 2017 and the Singapore government expects growth to be 2.5% to 3.0% in 2018 (Export, 2018). The U.S. position as Singapore’s third largest source of imports was unchanged and China and Malaysia retained their first and second position respectively, followed by Taiwan, Japan, South Korea, Indonesia, Germany, Saudi Arabia and Switzerland (Export, 2018).

Imports

Companies must make an inward declaration for all goods imported into Singapore (Export, 2018). All imports require an import permit although this is largely a statistical requirement for most goods (Export, 2018). The import of trade samples that is below US$300 is not subject to payment of duty and/or GST (Export, 2018). In addition, no permit is required for their import (Export, 2018). Bona fide trade samples (excluding liquors and tobacco) may be imported for the following purposes: solely for the purpose of soliciting orders for goods to be supplied from abroad; for demonstration in Singapore to enable manufacturers in Singapore to produce such articles to fulfill orders from abroad or by a manufacturer for the purpose of copying; and for testing or experimenting before producing such articles in Singapore (Export, 2018). Singapore’s top 10 Import countries can be found in Appendix B.

Import Tariffs

Singapore is generally a free port and an open economy (Export, 2018). More than 99% of all imports into Singapore enter the country duty-free (Export, 2018). For social and/or environmental reasons, Singapore levies high excise taxes on distilled spirits and wine, tobacco products, motor vehicles and petroleum products (Export, 2018). All U.S. exports to Singapore under the FTA are duty-free (Export, 2018). Singapore levies a 7% Goods and Services Tax (GST). (Export, 2018). For dutiable goods, the taxable value for GST is calculated based on the CIF (Cost, Insurance, and Freight) value, plus all duties and other charges (Export, 2018). In the case of non-dutiable goods, GST will be based on the CIF value plus any commission and other incidental charges whether or not shown on the invoice (Export, 2018). If the goods are dutiable, the GST will be collected simultaneously with the duties (Export, 2018). Special provisions pertain to goods stored in licensed warehouses and free trade zones (Export, 2018).

Trade Barriers

8 Singapore maintains one of the most liberal trading regimes in the world, but U.S. companies face several trade barriers (Export, 2018). Singapore maintains a tiered motorcycle operator licensing system based on engine displacement, which, along with a road tax based on engine size, adversely affects U.S. exports of large motorcycles (Export, 2018). In 2017, Singapore further discouraged motorcycle imports by introducing a tiered system of additional registration fees, which serve as a de facto additional tax on motorcycles and significantly increases their price (Export, 2018). Compared to the previous flat rate of 15 percent, motorcycle owners must now pay a rate of 50 percent on excess value above approximately $3800 and a rate of 100 percent on excess value above approximately $7600 (Export, 2018). Singapore also restricts the import and sale of non-medicinal chewing gum (Export, 2018). For social and/or environmental reasons, it levies high excise taxes on distilled spirits and wine, tobacco products, and motor vehicles (Export, 2018). Services barriers include sectors such as pay TV, audiovisual and media services, licensing of online news websites, legal services, banking, and cloud computing services for financial institutions (Export, 2018). While Singapore’s Agri-Food and Veterinary Authority (AVA) follows OIE and Codex guidelines, AVA can be overly strict and risk averse (Export, 2018). This has generated several ongoing trade barriers issues- mostly SPS - with the United States (Export, 2018). AVA requires health certification for a wide range of uncooked meats, poultry and shellfish; food inspectors regularly pull samples off the shelves of retail stores for laboratory testing of preservative and additives; and all meat imports are visually inspected and subjected to regular testing for a range of food hazards such as chemical contaminants (e.g. pesticide residues and drug residues such as antibiotics), and microbial contaminants (e.g. harmful bacteria such as E. Coli, Salmonella and Listeria) (Export, 2018). Regarding Pathogen Reduction Treatments (PRTs), AVA now allows nine instead of eight out of the 41 antimicrobial washes currently allowed in the United States (Export, 2018). FAS Singapore is working on approval of additional PRTs into Singapore (Export, 2018). As for U.S. pork and pork products, AVA requires U.S. fresh and chilled pork products to be tested for trichinae even though Trichinella spiralis in U.S. commercial swine rarely shows up as U.S. pork producers practice stringent biosecurity protocols (Export, 2018). The Trichinella testing is both expensive and time consuming, and thus creates a barrier to international trade (Export, 2018). AVA also imposes strict shelf life requirements on chilled, frozen, and processed meat and poultry products that limit the time after slaughter/ manufacture that a product must enter Singapore (Export, 2018). There are no restrictions on foreign ownership of business in Singapore, except for national security reasons and in particular areas such as air transportation, public utilities, newspaper publishing, and shipping (Export, 2018). Singapore is an open economy and encourages trade and investment into the country (Export, 2018).

Market Entry Strategy

The Singaporean government estimates more than 4,200 U.S. firms, large and small have established operations in the City State (Export, 2018). Many U.S. exporters successfully use agents or distributors to serve the Singapore and other Southeast Asian markets (Export, 2018). Singapore firms are aggressive when it comes to representing new products and usually respond enthusiastically to new opportunities (Export, 2018). Price, quality, and service are the three main factors for Singapore buyers (Export, 2018). U.S. exporters should be aware that competition is strong and buyers expect good after-sales service (Export, 2018). Selling techniques vary according to the industry and product and are comparable to the techniques used in most other sophisticated markets (Export, 2018). It is also important for U.S. firms to

9 visit their representatives in Singapore and maintain close contact with them (Export, 2018). A well- developed social media strategy is growing in importance as Singapore and ASEAN consumers are heavy users of on-line channels (Export, 2018).

Market Challenges

U.S. companies face technical import barriers for beef, pork and poultry products, and services barriers that include restrictions on the use of satellite dishes, direct-to-home satellite TV services, pay television, legal services, banking, and healthcare procedural transparency (Export, 2018). Competition with global suppliers is a key challenge for American companies operating in Singapore (Export, 2018). As the nation continues to restructure its economy, U.S. companies doing business in the City State can expect increased operating costs and continued tightening availability of foreign labor (Export, 2018). The next 50 years will present new challenges to Singapore in the form of a greying workforce, maturing economy, growing influence of social media, and increasing competition from other trade agreements and ASEAN partners (Export, 2018). To counter the challenges, the Singapore Government’s Committee on the Future Economy released a report that identified strategies to meet these and other challenges (Export, 2018).

10 Financials

Currently Singapore has a GDP of $527,020,998,479. This is much less than the current GDP of the United States ($19,390,604,000,000). The country has shown an annual GDP growth rate of 3.619%, which is higher than the GDP growth rate of the United States (2.273). The GDP per Capita in Singapore is $93,905, which is much higher that the US per capita (59,531).

The line chart above shows Singapore’s GDP growth over the past 5 years. Singapore has shown steady GDP growth and is expected to continue that trend throughout 2018.

Note: GDP composition percentage may exceed 100. Manufacturing is included in the Industry figures and is also reported separately because it plays a critical role in many economies. The main driver in Singapore’s economy is the services industry. The service industry makes up for 70.44% of the country’s GDP. Singapore’s large private savings and conservative fiscal policies have resulted in a huge stock of net assets (Euromonitor, 2018). These provide an ample cushion against exogenous shocks (Euromonitor, 2018). Small budget surpluses have been recorded for several years, the surplus was 3.3% of GDP in 2016 and it rose to 6.0% in 2017 (Euromonitor, 2018). The budget target for 2018 is a surplus equal to 2.3% of GDP (Euromonitor, 2018). The public debt amounted to S$ 502,022 million in the year

11 2017, which was equivalent to 112% of the country’s GDP (Euromonitor, 2018). Public expenditure on defense amounted to 19.1% of government expenditure in 2017, followed by spending on economic services (19.0%) (Euromonitor, 2018).

Risk Assessment

Singapore is currently classified as having very low risk (Globaledge, 2018). The budget situation for Singapore is expected to remain intact due to increased receipts by the sovereign funds, the country will continue to record a budget surplus while maintaining its expansionary budget policy (Globaledge, 2018). While Singapore has a high level of public debt, this is more than made up for by the size of the financial assets held by the sovereign funds (Globaledge, 2018). The bond issues are not used to finance the public debt but to develop a local State bond market and to support the Central Provident Fund, the leading Singaporean pension fund (Globaledge, 2018). In 2018, the current account balance will run a large surplus (Globaledge, 2018). While the surplus in the balance of trade will increase, in particular, thanks to the slight uplift in energy prices, this trend will be counterbalanced by a deterioration in the balance of services and income (Globaledge, 2018). In addition, the opening of the City-State, and the matching role as a regional and international trading hub, explains why the downwards trends in exports are mirrored by fluctuations in imports, and thus the constancy of the current account balance (Globaledge, 2018). In this context, the level of foreign currency reserves will remain high, at around 7 months of imports in 2018 (Globaledge, 2018). While the banking sector is exposed to property market risks, its granting of mortgages has been cautious and remains in line with the regulatory requirements: the rapid expansion of credit, combined with very high property prices, is not expected to present a risk for 2018 (Globaledge, 2018). Singaporean banks are also exposed to risks associated with the high level, although deemed sustainable, of household indebtedness (the equivalent of 75% of GDP in 2017), the slowdown in the Chinese economy through trade finance operations, and the pressures associated with low oil and gas prices (Globaledge, 2018). However, the levels of capitalization and liquidities, the stabilizing of bad debt levels, as well as strong performances in the resistance tests carried out by the Singaporean financial authorities would indicate that the banking sector will be resilient in 2018 (Globaledge, 2018).

12 Culture

Gender

Singapore is still a rather male-centric society at some levels, if you are a male Singaporean and you marry a foreigner, your spouse will be eligible for citizenship but not if you are a female Singaporean (International, 2018). However, attitudes have changed tremendously in the last few decades and it is now the norm for females to work (International, 2018). In fact, the rate of female participation in the workforce is probably higher in Singapore than in Canada. At the social level, males and females are treated very equally (International, 2018). The older generation still thinks of the man as the head of the household, but this belief is not shared among the younger generation. In the workplace, it is unusual to see a woman in the upper levels of management, but the culture is shifting towards more gender equality and it is likely that more women will be seen in management positions.

Religion

Singapore is officially a secular state, meaning they are not connected with any religious or spiritual matters. Many among the Chinese are Christians (Protestant more than Catholic) or Buddhists; most Malays are Muslims; Indians are either Hindu or Christian (International, 2018). Many people have no religion and are very comfortable with that (International, 2018). Religion should play no role in the workplace at any time (International, 2018).

Class

Singapore prides itself on being a "meritocratic" society, for example, the garbage collector’s son stands just as good a chance of becoming a doctor as the prime minister’s (International, 2018). The idea of class in the British sense of entitlement through descent is an alien concept. However, people with good academic qualifications definitely form a loose "privileged class" and hold all key appointments in business and politics, but their descendants are not automatic members of that club (International, 2018).

Ethnicity

The three main ethnicities are Chinese, Malay and Tamil Indian (International, 2018). Indians and Chinese are at the top of the political and economic standings; Malays are substantially behind (International, 2018). The Chinese view Malays as friendly but unambitious people who are content with making ends meet (International, 2018). Malays view Chinese as cut-throat money-minded gamblers and business people (International, 2018). The fundamental differences between Malay and Chinese attitudes to life form the basis of continuing tensions between Singapore and Malaysia, which have Chinese and Malay majorities respectively (International, 2018). Apart from the three races mentioned above, there is a very large population (in the hundreds of thousands) of workers from much other countries such as Indonesia, the Philippines, and Sri Lanka (International, 2018). Most manual work (e.g. construction, cleaning) is carried out by laborer’s from these three countries, who work under very harsh conditions with very low pay (International, 2018).

13 There are also large numbers of women from these countries working as domestics (International, 2018). At the managerial level, you will find mostly Chinese and Indians; jobs such as drivers, clerks and security guards are generally filled by Malays; other jobs are left to the migrant workforce (International, 2018).

Black Model

The center triangle of the Black Model is Inquisitiveness. It displays the ability to look at new and different experiences as opportunities for variety, change, and learning. This ability has been something that was gifted to me starting at a very young age. As a child I was very active in sports and also had many interests. I had the opportunity to travel around the US with sports teams, and school trips. These opportunities gave me experience in meeting new people and learning new things. I always try to take advantage of opportunities to grow. I view my life as a test from a higher being, and I am able to get through the trials and tribulations I face then I will be rewarded. Keeping this is mind is what drives me to continue to work hard no matter what issues come in my way. The GCI survey scored me at a seven in this category, this was a confirmation in the beliefs I had about myself prior to taking this survey. In Singapore looking directly into someone’s eye is considered very rude and arrogant, specifically in regard to communication between a junior and senior person. If someone is communicating to a person of higher power, people generally avoid having direct and continuous eye contact. In the US it is the exact opposite, it is polite and proper to keep eye contact when someone is talking to you. I am going to have to try hard to remember this while I am working in Singapore, so I do not accidentally offend someone. I believe that my Inquisitiveness is going to be very useful for my travel to Singapore. I am very eager to travel abroad and learn about different cultures, I have not had the opportunity to travel to many places outside of the US, so I am nervous about what I am going to experience.

Perspective is another one of the categories under the Black Model. Sometimes I struggle with managing tensions. I tend to jump to conclusions very fast, which is why I scored such a low score in the nonjudgmental category on the global competencies survey. It is also sometimes not easy for me to work with people who are totally opposite of me. I think these two go hand in hand, sometimes I pass quick judgment on people who are opposite of me. Most of Singaporeans are shy, they do not talk much, and they hardly ask questions unless necessary. I have always believed that if someone doesn’t have much to say then they must not know much about the subject. The Singaporean culture is much quieter and reserved, and I am aware that I tend to judge people quickly. This trip to Singapore will be an excellent opportunity to work on becoming less judgmental. I have to keep in mind that these people may know a lot about a subject or topic, but because of their culture they may not speak much.

Brake Model

Personal Effectiveness is a component of the Brake Model, it reflects the ability to attain increasing levels of maturity to perform at high levels during strenuous conditions. A sub category in Personal Effectiveness is Improvisation. Improvisation demonstrates adaptability to changing situations and an ability to come up with creative responses that add value under conditions of high uncertainty. Optimism is defined as the positive mental outlook towards people and situations, this is one of the strongest qualities that I poses. I have always found it easy find light in the darkest situations. I

14 believe Improvisation is a major component of being optimistic. It requires creativity when coming up with a positive way to analyze a situation. It is much easier to focus on the bad sometimes when there is no immediate answer to the problem. I have an ability to come up with creative ways to find a positive outlook on situations. Singapore is going to be a brand-new experience for me in a foreign country. I am certain that I will face many situations where I feel uncomfortable or have a bad experience. I am confident enough in myself to know that I will be able to handle any situation that I come across and find a positive outlook.

Non-Stress Tendency measures your innate capacity to respond with peacefulness and internal calmness to potentially stressful situations or circumstances. It evaluates the degree to which you feel stressed by unexpected events and demands. I scored a 2 in this category on the GCI survey. Although I am good at dealing with change and optimistic, I still get very frustrated when the unexpected occurs. I have been known to react quickly due to anger or frustration and it can cause issues. Knowing this about myself, I will try to remember to remain calm in stressful situations. I am learning how to respond with more calmness to sudden changes. I am extremely optimistic, and I want to become great at responding with optimism and calmness to uneasy situations. Maturity is one component of the Brake Model. One aspect of maturity is the ability to recover from mistakes or failure, without being defensive or defeated, and to persist in moving toward the desired objective. Maturity will play a big role improving in the non-stress tendency category. With more time and experience, I will become more comfortable with adapting to sudden. I am still very young and have a lot to learn, so as time goes on I believe I will continue improving in this area. During my time in Singapore I am certain to encounter tons of stressful situations that I may not know how to handle immediately. I will be in a country where the culture and traditions are unfamiliar. I know that if I get frustrated quickly I may accidentally offend someone. It is vital that I remember my tendencies and try to make sure that I react with calmness to any circumstances that I may face. Doing so, I will ensure that I am respectful of their culture and not make rash decisions.

Rosen Model

Self-confidence is having the belief in the ability to succeed through hard work and effort. This category is an area that I feel I am very strong. Discipline and effort were instilled in me at a very young age through sports. I was always smaller than everyone, so if I wanted to get noticed and play I had to work harder than everyone else. I have constantly had to overcome obstacles that were placed against me. The way that I always succeed is by giving my best effort, doing so usually always rewarded me in some way. People always appreciate when someone puts their maximum effort into a task, especially when that person is self- motivated. I have an innate ability to push myself. I wasn’t always the biggest or the strongest athlete, so I had to find a way to stand out from others. I accomplished this is by working harder than everyone around me. I believe strongly that no matter what, if someone gives their best effort there is no way they will fail. One category of the Rosen Model is “Confident Humility”. This is the ability to be confident and secure, yet humble enough to listen and learn from others. This is an area that I excel in. Throughout my sports career one thing all of my coaches have said about me is that I am extremely “coachable”. I have an ability to take constructive feedback from others and apply that feedback to improve. In Singapore, education, experience and age are mostly regarded as superior. Education represents the knowledge they’ve acquired while age represents the wisdom they have. I believe that I have superior education and will fare well in Singapore in that regard. I am only 23 years old, but I have

15 had a lot of experiences through my lifetime at a very young age. These experiences have made me much wiser than the average 23-year-old. In Singapore my age will cause people to believe that I am not very wise because I am young, but I will surprise many people with the wisdom I poses for my age.

Cosmopolitanism refers to someone’s natural interest in and curiosity about foreign countries, cultures, and geography, as well as current world and international events. The GCI survey categorized me as a 1 for this area. I think that this is a very accurate representation of me due to the fact that I have not had many opportunities to travel abroad during my lifetime. Up until December 2016 after I completed my undergrad, my life has been very scheduled, I have constantly balanced school and athletics. There has not been an opportunity for me to travel internationally so my interest in the area decreased greatly. International events, foreign countries, and foreign cultures had no real relevance to my life. After starting this MBA program and learning more about international business interest in foreign activities has increased greatly. This program has opened my eyes to a lot of potential opportunity in an overseas market. Inquisitive Internationalist is a component of the Rosen Model. Inquisitive internationalists know they must be literate about other cultures. Insatiably curious and sensitive about people and places, they analyze their own cultural biases and act like polite guests when traveling abroad, always respecting local customs. This ties directly into Cosmopolitanism, it comprises of understanding other cultures and being curious about learning more. I have been conducting a lot of research and learning about the culture and traditions within Singapore. I will be well prepared for my trip to avoid making any mistakes due to lack of understanding their culture.

16 Keong Saik Bakery

Company Overview

Yuzhong Tan is the owner of Keong Saik Bakery, they provide cakes, bread, cookies, pastries, breakfast items, and drinks. There are many local competitors within the baking industry in Singapore. Yuzhong is interested in finding a way to control more of the market share and compete with some of the larger local bakery chains. Singapore’s economy has evolved away from a manufacturing economy into a service economy. Yuzhong is looking to scale up his bakery and expand by focusing on the new young urban consumers. Keong Saik Bakery is a small business looking to expand into bigger markets. They are currently located on 41 Keong Saik Rd in Singapore. The bakery is strategically located near Chinatown, this location attracts a young urban demographic. There are also many tourists that frequent this area, there are many temples nearby that attract much attention. This particular area is surrounded by various restaurants, shops, and small local businesses. It is an ideal location for a small business due to the high volume of consumers frequenting this area. Yuzhong received his master engineer receiving degrees from both Michigan and Cal Berkeley. He himself is an example of how traditional industrial Singapore is shifting into a younger service industry. Keong Saik bakery aims to be a symbol of the new industrial evolution of the Singaporean business model. He created the bakery with the goal of creating deserts and pastries appealing to the taste and interest of the local Singaporean consumers, and also providing unique European style bakery items. They provide cakes, bread, cookies, pastries, breakfast items, and drinks. They also have “Viennoiserie” which are baked goods made from a yeast-leavened dough in a manner similar to bread, or from puff pastry, but with added ingredients (particularly eggs, butter, milk, cream and sugar) giving them a richer, sweeter character, approaching that of pastry. Keong Saik Bakery has a very unique blend of menu items that appeal to young urban consumers, as well as the older generation. They currently have a rating of 4.3 out of 5 stars on yelp, and many reviews on their Facebook page highlighting their unique menu items and excellent customer service. Even with their current success, there are many other competitors within the market. Bigger chains like “Gardenia Breads”, “Twelve Cupcakes”, and “Bread Talk” are bigger bakery chains located throughout Singapore. Yuzhong is looking for additional strategies and ideas to help Keong Saik Bakery compete with some of the other larger local bakeries in Singapore’s market.

17 Recommendations

Focus on healthier desert options

There is much more awareness of nutritional value and healthy living, Singaporeans health consciousness growing each year among young consumers. This saw more presence of wholegrain and whole meal products over the past review period (Euromonitor, 2018). The health and wellness trend is expected to continue over the forecast period, especially as the government announced in 2017 that it will allocate more resources to tackle diabetes over the forecast period (Euromonitor, 2018). This is likely to lead to a greater prevalence of healthier baked goods, especially bread, such as those using whole meal/wholegrain or lower in GI (Euromonitor, 2018). Additionally, with more consumers facing digestion problems, manufacturers are expected to launch high-fiber products, or those added with pre- or pro-biotic content (Euromonitor, 2018). White bread remained the dominating type of packaged bread in Singapore. However, it is losing value share to healthier variant whole meal/wholegrain bread, as consumers become more health-conscious (Euromonitor, 2018). In addition, the Singapore Health Promotion Board is also encouraging Singaporeans to opt for whole meal/wholegrain bread in an attempt to tackle the high diabetes rate in Singapore (Euromonitor, 2018). The overall health consciousness of Singaporeans is increasing rapidly. The government is making strides to create a healthier food options and reduce the amount of health-related issues in Singapore. This is a great opportunity for Keong Saik Bakery to start developing healthier options for consumers, this health movement is being supported by the government, so I believe it is an excellent opportunity for a new trend in the market.

Industry Overview

The Global Bakery Goods Manufacturing industry has had a moderate increase over the past five years, despite numerous challenges (IBISWorld, 2018). Despite tepid demand growth, global disposable income levels have risen, and consumers have increasingly turned to high-priced, premium baked goods, including organic and gluten-free options (IBISWorld, 2018). IBISWorld is anticipating industry revenue to increase at an annualized rate of 0.6% to $419.4 billion over the five years to 2017 (IBISWorld, 2018). This includes a forecast increase of 0.5% in 2017, as healthier options continue to grow in popularity (IBISWorld, 2018). Industry profitability has also expanded over the period, as input costs have fallen, and sales values have risen (IBISWorld, 2018). While the demand for industry products has been slowed in saturated markets, there has been a growth for these particular goods in emerging markets and developing countries. This has helped manufacturers create an organic growth within these new markets. Bakery goods manufacturers are anticipated to grow stronger over the next five years, supported by growth in emerging markets. As consumers around the world obtain greater discretionary income, the leading global bread and bakery goods manufacturers will expand their operations in Asia, the Middle East, Eastern Europe and Africa, driving the growth of the industry in these regions (IBISWorld, 2018). While demand for traditional baked goods is expected to stagnate in mature markets, producers will focus on introducing a greater variety of premium products in Western Europe and North America. Consequently, industry revenue is expected to rise at an annualized rate of 2.4% to $471.5 billion over the five years to 2022 (IBISWorld, 2018).

18 Competitor Analysis

The industry has a low level of concentration, with the three four players estimated to account for less than 10.0% of the market (IBISWorld, 2018). The industry is characterized by numerous small commercial bakeries operating in a highly mature and fragmented market, with nearly 120,000 establishments operating worldwide (IBISWorld, 2018). The market leaders include food manufacturing giants, such as Grupo Bimbo and Mondelez International. Over the past five years, the leading manufacturers have increased their share of the market for bakery goods (IBISWorld, 2018). Rising market share concentration can be attributed to merger and acquisition activity in the industry (IBISWorld, 2018).

Internal competition

Across most countries, the bread and bakery products industry is characterized by a high level of competition in a highly fragmented market with diverse products and producers (IBISWorld, 2018). In addition, low barriers to entry with minimal capital requirements have kept industry concentration low, restricting the ability of any one manufacturer to obtain significant market share (IBISWorld, 2018). Producers also benefit from the relatively easy access to production inputs and raw materials, although prices of key inputs can be volatile (IBISWorld, 2018). Price and quality are two important bases of competition. The industry has a large number of small operators that specialize in generic products, which are priced significantly lower than branded goods (IBISWorld, 2018). The price sensitivity of consumers also varies between product segments. Although the market has many well-established brand names, consumers are still price sensitive and can easily switch their preferences to a lower-priced substitute (IBISWorld, 2018). In addition, the growing popularity of affordable private label brands has intensified price-based competition (IBISWorld, 2018). The quality of product or brand equity is a large factor in determining the price consumers are willing to pay. Quality is arguably the most important factor in regard to bakery and bread products. This includes factors such as freshness and taste, which determine a company’s ability to stay competitive within this industry. Typically, retail, craft and artisanal bakeries are known to stock and sell more fresh products than supermarkets or convenience stores (IBISWorld, 2018). The ability to be innovative and differentiate a product/brand also forms a key basis of competition within the industry (IBISWorld, 2018). Considering the limited opportunities for growth within the industry, it is imperative for manufacturers to distinguish themselves to maintain market share and stimulate demand (IBISWorld, 2018). Maintaining and developing strong relationships with upstream and downstream suppliers is also an important area of competition. Guaranteed access to high quality inputs and ingredients and the ability to secure coveted grocery store and supermarket shelf space has conventionally set market leaders apart from their competitors (IBISWorld, 2018). Brands with the most recognizable products or packaging placed visibly at strategic locations, have the best chances of maximizing sales at the retail level (IBISWorld, 2018). As competition intensifies, more manufacturers are expanding their traditional distribution networks to include convenience stores, drug and discount stores, shopping mall kiosks and other venues with high pedestrian traffic (IBISWorld, 2018).

External Competition

Bakery goods manufacturers also compete with producers and processors of substitute goods, such as rice and alternative desserts (IBISWorld, 2018). Due to growing health consciousness in North

19 America and Europe, industry participants have experienced intensifying competition from producers of healthier snacks, including granola, nuts and Greek yogurt, among other goods (IBISWorld, 2018). Conversely, producers also compete with consumers who can make bread and other baked goods at home (IBISWorld, 2018).

Singapore’s competitive landscape

Artisanal producers continued to dominate retail value sales of baked goods in 2017 (Euromonitor, 2018). This includes chained artisanal baked goods specialists such as BreadTalk, Four Leaves, Bengawan Solo and Twelve Cupcakes, which are strategically located across Singapore near transport hubs and in shopping malls (Euromonitor, 2018). They also frequently launch new flavors to entice consumers (Euromonitor, 2018). Gardenia Foods (S) Pte Ltd remained the leading player in baked goods after artisanal producers, with a retail value share of 24% in 2017 (Euromonitor, 2018). Due to its long establishment, wide range of products and promotional activities, consumers have high brand awareness and loyalty to Gardenia in packaged bread (Euromonitor, 2018). The company also takes the lead to innovate and launch new products to meet consumers’ changing preferences over the review period, such as softer texture of wholegrain and whole meal bread, which is usually the factor deterring many consumers from opting for

20 this product over white bread (Euromonitor, 2018). It also constantly engaged in promotional activities such as a free loaf of bread with a minimum purchase (Euromonitor, 2018).

Successful Strategies

Successful company strategies include frequent new innovations to attract consumers. These include new flavor variants as well as offering more types of baked goods (Euromonitor, 2018). BreadTalk introduced the MaLa Mushroom Chicken bread to ride on the MaLa trend in foodservice establishments (Euromonitor, 2018). Twelve Cupcakes extended its menu range from just cupcakes to whole cakes in 2017. Domestic players accounted for the lion’s share of baked goods in 2017 (Euromonitor, 2018). This can be attributed to its offering, which better caters to the preferences of Singaporean consumers in terms of flavors and texture (Euromonitor, 2018). Local players offer popular local flavor bread such as pork floss bread or Chendol cupcake, with a texture usually softer than that of Western bread (Euromonitor, 2018). As mentioned above, numerous new products launched in 2017 see both artisanal and industrial bread manufacturers compete to appeal to consumers’ changing preferences (Euromonitor, 2018). Besides launching new flavors, it is also noted that manufacturers are putting more focus on whole meal/wholegrain bread to attract health-conscious consumers (Euromonitor, 2018). Private label players include supermarket/hypermarket chain NTUC FairPrice Cooperative Pte Ltd and Dairy Farm International Holdings Ltd, and it targets budget conscious consumers (Euromonitor, 2018). However, with increased spending power and more aggressive competition from other players, the value share of private label products is expected to decrease in 2017 (Euromonitor, 2018). Unpackaged baked goods from bakery specialists such as BreadTalk and Four Leaves continued to steal value share from packaged baked goods in 2017 (Euromonitor, 2018). This can be attributed to their wide range of offerings in terms of product types and flavor variants, coupled with stores being located at strategic locations with high traffic flow (Euromonitor, 2018). Japan-originated bakery specialist Châteraisé gained popularity at the end of the review period due to its affordable pricing, and the fluffy and light texture of its baked goods (Euromonitor, 2018).

Market Trends

21 The value and volume growth of 2017 was in line with the respective CAGRs seen over the review period as a whole, indicating a stable performance (Euromonitor, 2018). Within baked goods, bread remains as a staple to many Singaporeans, and is normally consumed during breakfast and tea breaks (Euromonitor, 2018). Cakes and pastries are typically consumed as snacks or desserts (Euromonitor, 2018). With greater awareness of nutrition and healthy living, Singaporeans are becoming increasingly more health-conscious (Euromonitor, 2018). This saw more presence of wholegrain and whole meal products over the review period (Euromonitor, 2018). For example, both new products offered by leading player Gardenia in 2017 are whole meal bread – Gardenia Whole meal Banana Walnut Bread and Gardenia Dual Cream Whole meal Cream Rolls (Euromonitor, 2018). Second-leading brand Sunshine also offered the Sunshine Smart Carb bread, positioned to be low GI and higher in wholegrains, in the last quarter of 2016 (Euromonitor, 2018). Packaged flat bread was the fastest-growing baked goods type in 2017, albeit from a low base (Euromonitor, 2018). Types of flat bread include naan, wraps, pita and focaccia (Euromonitor, 2018). This gained popularity over the review period as consumers gain greater awareness of flat bread from foodservice establishments, such as McWrap from McDonald’s and burrito from Stuff’d (Euromonitor, 2018). Flat bread is perceived as more versatile and less filling than traditional sliced bread, especially if consumers want to include more types of vegetables and meat fillings instead of spreads (Euromonitor, 2018). The average unit price of baked goods continued to increase marginally in 2017, due to more consumers trading up to more premium and healthier variants, such as wholemeal/wholegrain bread, or products fortified with vitamins and minerals (Euromonitor, 2018). There is also a shift towards unpackaged baked goods offered by bakery specialists and artisanal players, as they are perceived as fresher and come with a wider range of popular and innovative flavors (Euromonitor, 2018). Unpackaged baked goods from bakery specialists such as BreadTalk and Four Leaves continued to steal value share from packaged baked goods in 2017 (Euromonitor, 2018). This can be attributed to their wide range of offerings in terms of product types and flavor variants, coupled with stores being located at strategic locations with high traffic flow (Euromonitor, 2018). Japan-originated bakery specialist Châteraisé gained popularity at the end of the review period due to its affordable pricing, and the fluffy and light texture of its baked goods (Euromonitor, 2018). White bread remained the dominating type of packaged bread in Singapore (Euromonitor, 2018). However, it is losing value share to healthier variant whole meal/wholegrain bread, as consumers become more health-conscious (Euromonitor, 2018). In addition, the Singapore Health Promotion Board is also encouraging Singaporeans to opt for whole meal/wholegrain bread in an attempt to tackle the high diabetes rate in Singapore (Euromonitor, 2018).

22 SWOT Analysis

Singapore’s high rankings in major indices point to a very favorable business environment, which encourages innovation through generous incentives (Euromonitor, 2018). Low unemployment and high tertiary educational attainment rates characterize its labor market (Euromonitor, 2018). However, restrictions on hiring foreign workers are adding to skills shortages and corruption has plagued the private sector recently (Euromonitor, 2018). Nevertheless, its superior infrastructure is being boosted by new projects that will help construction activity (Euromonitor, 2018). A liberalized and highly open economy has helped Singapore consistently achieve superior rankings for its business landscape (Euromonitor, 2018). In the Index of Economic Freedom, Singapore achieved the second highest ranking globally in 2018, its position unchanged since 2012. Its high ranking is attributable to its open economy, lack of corruption, and transparency within its judiciary and business environment (Euromonitor, 2018). Although Singapore is an extremely open economy, some restrictions on foreign investment exist in telecommunications, broadcasting, financial services, ports and airports, and legal and accountancy services (Euromonitor, 2018). In the World Bank’s Ease of Doing Business (Doing Business) 2018 report, Singapore achieved the second highest ranking globally (Euromonitor, 2018). Its ranking improved since 2016, owing to improvements in infrastructure at ports that has facilitated imports and exports, as well as reforming procedures that eased resolving insolvency (Euromonitor, 2018). However, ‘Trading Across Borders’ is its worst-performing category, owing to higher import and export costs than the OECD High Income average (Euromonitor, 2018). According to Doing Business 2018, the total tax and contribution rate of 20.3% of profit compared favorably with the OECD High Income average of 40.1%, indicating a beneficial tax regime for businesses (Euromonitor, 2018).

Industry Risk

Potential threats to the growth of bread, which is typically consumed for breakfast, include the rising number of toast shops in foodservice establishments, such as Toast Box, YaKun and Fun Toast, as well as more breakfast value sets offered by foodservice players such as McDonald’s and Starbucks (Euromonitor, 2018). . On the other hand, a potential threat to cakes and pastries is the unhealthy image of such products, with their high sugar content (Euromonitor, 2018). In constant terms the average unit price is expected to increase marginally over the forecast period, as consumers trade up to more

23 premium and sophisticated baked goods as their spending power increases (Euromonitor, 2018). This includes those products that are more nutritious, higher quality, or branded (Euromonitor, 2018). Packaged flat bread is expected to see the fastest growth baked goods both in volume terms and at constant 2017 prices over the forecast period (Euromonitor, 2018). With an increasing number of consumers being familiar with flat bread such as naan through foodservice establishments, they are more likely and comfortable with purchasing packaged flat bread to prepare at home (Euromonitor, 2018). Moreover, its base is still small in 2017, hence there is still much potential for growth (Euromonitor, 2018). Over the forecast period, manufacturers are expected to consolidate their product portfolios to focus on projected growth areas (Euromonitor, 2018). New product developments in the better for you, fortified/functional, and naturally healthy categories are anticipated (Euromonitor, 2018). However, given the sales performances of existing better for you and fortified/functional beverages, only naturally healthy and organic are predicted to see positive retail value growth at constant 2017 prices in HW beverages over the forecast period (Euromonitor, 2018). Many consumers still believe that only naturally healthy or organic packaged products can be considered authentically healthy options (Euromonitor, 2018).

Health and Wellness in Singapore

The government started a “War on Diabetes” in Singapore in 2016. Furthermore, in August 2017, major players signed an agreement with the Health Promotion Board to reduce the sugar content of their drinks to no more than 12g per 100ml by 2020 (Euromonitor, 2018). The direction the market is heading is very clear, the government is trying to reduce the overall sugar consumption among Singaporean consumers. Beverage industry players are also being encouraged to follow these health initiatives. The government is expected to increase its efforts to reduce sugar consumption amongst Singaporeans over the forecast period (Euromonitor, 2018). While such efforts may diminish in terms of effectiveness, they have proven to be potent in decreasing the demand for non-alcoholic drinks (Euromonitor, 2018). Meanwhile, health and wellness sales are likely to be adversely affected unless companies utilize their resources to change consumer perceptions of packaged products (Euromonitor, 2018).

In response to the worsening consumer perception of packaged food and beverages, manufacturers are introducing better for you versions of existing products (Euromonitor, 2018). Suntory Beverage & Food Asia released two new plain versions of Lucozade (sports drinks), which was originally fruit-flavored and contained coloring (Euromonitor, 2018). In addition, F&N Foods released Seasons Ice Lemon Tea Reduced Sugar, a variant that claims to contain 36% less sugar than its regular Ice Lemon Tea (Euromonitor, 2018). The market is responding to changing consumer preferences, although interest in reduced sugar variants may be short-lived if consumers continue to believe that packaged beverages are unhealthy (Euromonitor, 2018). Over the forecast period, market players are expected to release more reduced sugar variants of existing products and to develop naturally healthy options (Euromonitor, 2018).

25 Catering Project

When I first arrived at Keong Saik bakery I presented my findings and recommendations with Yuzhong. I showed him the latest market trends and where I believed he could find a niche in the baking industry. He informed me that he had actually tried to develop healthier food items for a while. The food items were unsuccessful, and he decided to focus on his regular items. Although the market trend is heading in the direction of healthier food items, he believed that the demand was not quite there and maybe in a few years it would become more popular. So he was not interested in creating healthy food options for consumers at this moment in time Yuzhong had been looking into creating catering packages that he could offer to larger corporations as a way to improve his volume of sales and compete with the larger chains. He tasked me with helping him create carious catering packages for the bakery that consumers could purchase.

Competitor Catering Analysis

To first get an idea of what packages I wanted to create for Keong Saik Bakery, I decided to conduct research on the local competitions catering packages they currently offered. I emailed one of the largest local competitors “Bread Talk” and was able to get them to send me a full list of their catering options. Appendix C is a table of the catering options offered by “Bread Talk”. I also conducted research on other local bakeries like “Twelve Cupcakes” and “Toast Box” to get a general understanding of the local competitions catering options.

Keong Saik Catering Packages

Breads Appendix D provides an example of the catering packages I created for all of the breads offered at Keong Saik Bakery. I created 3 different packages based on the items prices. The regular package contained items ranging from (S$ 1.60- (S$ 2.50); Premium package items ranged from (s$2.60- (S$ 3.40) and Super Premium items ranged from (S$ 3.50 – (S$ 4.50). I also

26 created a “Custom” package that allows the customer to select multiple items from each package. To come up with a price for each package, I took an average of the price of each item within the package, then multiplied it by the minimum number of items that must be purchased (this number was selected by Yuzhong). The price of the custom package is a weighted average of all three packages multiplied by the minimum number of items that must be purchased. Appendix E provides an example of the catering package I created for the cakes. Because the selection of cakes was much smaller that the bread selection, he only wanted one standard package for the cakes. I used the same technique to come up with the pricing for the package. I took the average of all the cake prices and multiplied it by the minimum number of items (10).

27 Singapore Vs United States

Similarities

During my time in Singapore I was pleasantly surprised with some of the similarities that the country has in relation to the United states. The advancement in specialty and novelty food items was one area that I found to be similar to the US. The younger demographic seems to be the new target for specialty bakery items, and that trend is also something currently happening within the US. More food items are being catered towards new innovative flavors and taste that are popular among the younger generation. Keong Saik Bakery had well over 100 different food options that they provided. The location and demographic of the are fit along with the trendy innovative flavors that Keong Saik Bakery Provided. I also noticed how extremely diverse the culture was within Singapore. It reminded me a lot of the United States in the sense that it was very culturally diverse. Most everyone I encountered spoke English, and all of the signs located throughout the country are written in English made it very easy to navigate around. The services industry within Singapore is very large, similar to the United states. There were tons of stores and local restaurant chains that are common In the United States.

Differences

One factor that I found to be very interesting was that in Singapore there seemed to be a limit on the amount of food someone could order. On multiple occasions while we were eating at a local restaurant we stopped receiving service at some point. We went out to eat in large groups of about eight and would consume large amounts of food, as we ordered more food the service staff would get irritated with us, and even told us that we could not order anymore food. This was very surprising to me because from a business perspective the more food that a customer orders, the more money that the restaurant is making. It seemed as if in their culture they had a limit to how much each person should eat. I believe the reason for this may be due to health consciousness, or possibly portion control. In the United States food is served in very larger portions, in Singapore each dish is not very big, so to a group of Americans with a large appetite, we needed to consume many to satisfy our hunger. It seems as if in Singapore the food service is responsible for controlling the amount of food that the consumer eats. Similar to how a bar tender in the United States is supposed to regulate how much alcohol a customer intake, in Singapore the waiter or waitress controls the amount of food intake. Although Singapore is a small country, it is extremely evident that this country is very wealthy. The country is made up of huge skyscrapers and enormous malls. A major difference in Singapore was the sizes of the malls and amount of luxury department stores each one contained. There were malls that contained giant versions of Gucci, Louis Vuitton, Prada, and Chanel. Some malls were so large that they contained multiple of the same stores.

28 Conclusion

I would recommend starting a business in Singapore. The country’s economy is growing at a fast pace and there are many opportunities to have successful business within this economy. They are ranked second in ease of doing business and have a very low risk rating. Singapore has the political and economic stability that business owners are looking for. During my time in Singapore I have been able to get a first-hand look at the various business opportunities that the country has to offer. The country is in the developing stages and growing at a very fast rate. This experience has taught me much about how to analyze and view aspects of a country from a business perspective. Prior to this experience, I possessed a very narrow view of how businesses operated on a global scale. Coming from a non-business background, my perspective on business was very limited. The little knowledge I had on business was constricted to business in the United States. This International program has given me much insight on how the world of business actually functions and operates on a global scale. The opportunities that exist outside of the United States are unlimited, gaining this insight to the international business world has been life changing for me. I believe a major factor that hinders some entrepreneurs and other business people within the United States is the fear and lack of understanding of how business is conducted internationally. I see this ignorance as an opportunity, the amount of resources and profit that can be earned by conducting business internationally is unbelievable. I was able to experience first-hand how successful international companies are, and how large these international corporations really are. I was also able to gain an understanding of how various aspects of my personality would mesh with the Singaporean culture. Singaporeans are a more reserved and naturally I am very extraverted and outgoing. This experience taught me how to adapt conduct business in different cultures that are very opposite than what I am used to. I had to learn how to be more patient and take time to build relationships with people before conducting business. I have learned the importance of being able to adapt to various business culture, because this ultimately decides the success of the business when conducted internationally. Working with Keong Saik Bakery gave me a great opportunity to get hands on with a small local business. I got the opportunity to see how small businesses operate their day to day activities and come up with a way to help them grow and compete with some of the larger competitors located throughout Singapore. I analyzed the local trends within the market and find a way to cater to the young demographic that Keong Saik Bakery attracts. Yuzhong is actually going to implement the catering packages that I created for the bakery, I was able to use my research and industry analysis to come up something that will help the success of the bakery. Overall, this MBA program has helped me grow and mature as a young adult. Looking back to where I was prior to this program, I believe my life has been changed completely. The way I look and analyze various situations and problems is completely different. I now view everything I encounter in life with a business mindset. My critical thinking and problem-solving skills have grown exponentially, and I have learned many useful business tools and techniques to continue growing and teaching others. I am now well prepared to start my life with a new mindset, armed with resources and techniques I learned throughout this program. I am eager to start my journey in life and become a very successful businessman.

29 Appendix A – Top 10 Export Countries

30 Appendix B – Top 10 Import Countries

31 Appendix C – Bread Talk Catering Options Bread Talk Catering Options

Pcs Price No. Price Items Per Per of Per Pc Box Box Boxes Savory Sausage Standard $1.80 15 $27.00 Cheese Sausage $1.90 15 $28.50 Ham & Cheese $1.70 15 $25.50 Get Cheesy $1.70 18 $30.60 Bacon Cheese $1.70 15 $25.50 Curry Chicken $1.70 12 $20.40 Chicken Parmesan $1.90 12 $22.80 Tuna Bun $1.70 15 $25.50 Otah Oleh $1.90 12 $22.80 Ikan Bilis $1.90 12 $22.80 Marble Chocolate $0.52 30 $15.60 Tom Yam Naan $2.20 12 $26.40 Sweet Cranberry Cream $1.80 12 $21.60 Cheese Pumpkin Sunflower $1.80 8 $14.40 Pillow Raisin $1.90 9 $17.10 Raisin Cream Cheese $1.70 12 $20.40 Anpan $1.65 12 $19.80 Coconut Ball $1.70 12 $20.40 Black Pearl $1.60 12 $19.20 Chocolate Muffin $1.00 20 $20.00 Green Tea Muffin $1.00 20 $20.00 Raisin Muffin $1.00 20 $20.00 Blueberry Muffin $1.00 20 $20.00

32 Appendix D – Suggested Bread Packages Bread Packages

Appendix E – Suggested Cake Packages

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ic_sg.aspx?lang=eng#cn-2

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Requirements-and-Documentation

Singapore - Import TariffsSingapore - Import Tariffs. (n.d.). Retrieved July 15, 2018, from

https://www.export.gov/article?id=Singapore-Import-Tariffs

Singapore - Market Entry StrategySingapore - Market Entry Strategy. (n.d.). Retrieved July 15,

2018, from https://www.export.gov/article?id=Singapore-Market-Entry-Strategy

Singapore - Market OpportunitiesSingapore - Market Opportunities. (n.d.). Retrieved July 15, 2018,

from https://www.export.gov/article?id=Singapore-Market-Opportunities

Singapore - Market OverviewSingapore - Market Overview. (n.d.). Retrieved May 14, 2018, from

https://www.export.gov/article?id=Singapore-Market-Overview

Singapore - Trade BarriersSingapore - Trade Barriers. (n.d.). Retrieved July 15, 2018, from

https://www.export.gov/article?id=Singapore-Trade-Barriers

2018, from https://tradingeconomics.com/singapore/inflation-cpi

Singapore: Introduction. (n.d.). Retrieved May 15, 2018, from

https://globaledge.msu.edu/countries/singapore