External and Internal Analysis of Tung Lok Restaurant

This article provides an analysis of Tung Lok Restaurant using Porter's five forces and PESTLE analysis. It also includes a value chain analysis and discusses the megatrends affecting the restaurant industry.

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Name of the student
Name of the university
Author note

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1. External factors of Tung Lok restaurant
1.1 Porters 5
Figure 1: Porter’s five force analysis
(Source: Kolios & Read, 2013)
1.1.1 Competitive rivalry
The organization, Tung Lok , faces a high competitive rivalry from the different firms
that operates in the regions. However, the major competitor of the business is Moi Lum
Restaurant Ptd, which generates more than $373.6K as its revenue. The tough competition that
is being faced by the organization in the market has helped the same in bringing forth different
levels of modification to gain a competitive edge in the market.
1.1.2 Bargaining power of the customers
The bargaining power of the customers of the organization is dependent on the high
availability of the substitute products in the market. The high availability of the substitute
seafood providers creates a tough competition in the Singaporean markets. The identification of

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the different substitute products and enhancing the quality of the product of the business will be
helping the same to bring in enhancements in the market situation.
1.1.3 Bargaining power of suppliers
The bargaining power of the suppliers of the business is based on the large number of
suppliers of the organization. The suppliers of the business help the same in facilitating the
smooth performance of the business in the international markets.
1.1.4 Threats of substitutes
The organization suffers from a high performance- to- cost ratio as the expenses and the
investments that were made by the organization is comparatively higher than the output of the
same while operating in the Singaporean markets (Tunglok.com., 2018). The differences in the
ratio and the units have affected the smooth performance of the business due to lack of
motivation and the lower retention of the workforce, thereby affecting the productivity of the
same.
1.1.5 Threat of new entrants
The high cost of brand development has affected the functioning of the business in the
markets. On the other hand, the new entrants in the market poses a serious threat to the
expansion of the units of the organization in the Singaporean markets. It has affected the
productivity of the organization in the market.
1.2 PESTLE analysis of the organization
Elements Analysis
Political Policies that are implemented by the governments

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against the fast foods which has resulted to the
limitation of the fast food industry
Economic The rate of unemployment and the fluctuations in
Singapore has affected the functioning of the
organization. It has affected the growth of the
organization in the Singaporean markets.
Social Multicultural consumer background requires the
greater cultural sensitivity, which has affected the
proper functioning of the organization in the
market.
Technological The utilization of the social media platforms helps
in maintaining the different levels of changes in the
systems and the functioning of the business as per
the needs of the organization to market its products
(E. Dobbs, 2014)
Environmental The disposal of the varied solid wastes in the
environment has affected the performance of the
organization in the market
Legal Updated to the different employment laws that are
implemented by the government of Singapore
2. Internal - Value Chain Analysis

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Value Chain Analysis
Primary Activities
 Inbound Logistics
Operations- Tunglok Restaurant has company owned restaurants and 80% of them are
owned and operated by independent franchisees. The franchisee restaurants have a
developmental license format.
Developmental license: This includes license that offers capital for the overall business and
in this license agreement no capital is invested by Tunglok Restaurant.
 Outbound Logistics: Tunglok Restaurant operates business in two formats such as sit-
down restaurants and counter service outlets. Process of obtaining meals in sit-down
restaurant format is conventional that includes dining out in restaurant involving

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water//waitress taking order and delivering food. Moreover, counter service outlets of this
restaurant have self service facility.
 Marketing and Sales: Tunglok Restaurant employs advertising channels such as print
and media advertising in order to communicate its marketing message to the
representatives of the target customer segment. Along with spending on media and print
media advertising, marketing budget is also set for events, sales promotions, public
relations along with events and experience (Zalengera et al., 2014).
 Service: High speed of the consumer service and offering the best fusion seafood in
Singapore is one of the major competitive advantages attained by Tunglok Restaurant.
Conversely, attempts of this restaurant to provide excellent consumer service contradicts
the restaurants practice of paying less wages or salaries to its employees.
Support Activities
 Firm Infrastructure: Infrastructure of Tunglok Restaurant is observed to be modern and
sophisticated as they use modernized IT along with implementing green activities. The
restaurant strives to offer eco-friendly restaurants that indicates its sustainability goals
and elaborates environmental stewardship within the workplace (Lee, Kim & Park,
2012).
 Human Resources: Working in Tunglok Restaurant can offer several benefits to its
employees those desire flexible hours and are involved within several activities as well as
responsibilities. The restaurant provides fairly secure employment and the employment
relationship is managed by bureaucratic controls to the subjectivity management.
 Technology Development: Tunglok Restaurant is focused on modernizing all its
restaurants, evolving the menu and enhancing the engineering value. Menu optimization

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focuses on offering nutrition based seafood platters along with offering innovative dishes
made out of core items and premium seafood.
 Procurement: Tunglok Restaurant uses e-procurement system that involves internet
procurement site that makes the restaurant to attain competitive advantage of being faster
and highly convenient for franchisees. The procurement site also facilitates the restaurant
owners to purchase materials and supplies at a discounted price.
3. To match external and internal
modernized IT
green activities
e-procurement
system
sit-down
restaurants
counter
offers several
benefits to its
employees along
with consumer
advantages
High speed of
the consumer
service and
offering the
best fusion
seafood
High speed of
consumer
service offering
best fusion
seafood in
Singapore
Multicultural
consumer
background
requires the greater
cultural sensitivity
Utilization of the
social media
platforms helps
in maintaining
the different
levels of changes
in systems and
functioning
Policies
implemented by
the governments
against the fast
foods

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3. Megatrends
The megatrends that are affecting the world’s economic conditions are the rise in the
demand of the fossil fuels and globalization, which has helped in connecting the different
platforms and markets in the form of a global village. Globalization has helped in expanding the
scopes of undertaking business in the different international markets. On the other hand, the
identification of the needs of conserving the non- renewable sources of energy has helped in
maintaining the different CSR activities and sustainability of the business organizations. The
major trends that are affecting the proper performance of the businesses and their likelihood to
expand in the international markets is dependent on the identification of the needs of
conservation.

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References
E. Dobbs, M. (2014). Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), 32-45.
Kolios, A., & Read, G. (2013). A political, economic, social, technology, legal and
environmental (PESTLE) approach for risk identification of the tidal industry in the
United Kingdom. Energies, 6(10), 5023-5045.
Lee, H., Kim, M. S., & Park, Y. (2012). An analytic network process approach to
operationalization of five forces model. Applied Mathematical Modelling, 36(4), 1783-
1795.
Tunglok.com. (2018). Our Restaurants – Tung Lok Group. Retrieved from
https://www.tunglok.com/en/our-restaurants
Zalengera, C., Blanchard, R. E., Eames, P. C., Juma, A. M., Chitawo, M. L., & Gondwe, K. T.
(2014). Overview of the Malawi energy situation and A PESTLE analysis for sustainable
development of renewable energy. Renewable and Sustainable Energy Reviews, 38, 335-
347.