Case Study: Radix Fried Chicken, ENT530, Business Strategy

This case study analyzes Radix Fried Chicken (RFC), a Malaysian fast-food restaurant, as part of an Entrepreneurship (ENT530) course. The report covers RFC's background, organizational structure, products, and business strategies. It includes a SWOT analysis, examining RFC's strengths (unique, halal-focused), weaknesses (brand presence, technology), opportunities (halal market, globalization), and threats (competition). The study also explores the company's environment, applying Porter's Five Forces and identifying key stakeholders. The purpose is to understand the business environment, apply strategic management knowledge, and provide recommendations for RFC's business management, including potential expansion strategies. The report highlights RFC's challenges in a competitive market dominated by established fast-food chains and its reliance on its parent company, HPA, for supplies.

RADIX FRIED CHICKEN
PRINCIPLES OF ENTREPRENEURSHIP (ENT530)
CASE STUDY
FACULTY & PROGRAMME : FACULTY OF BUSINESS AND MANAGEMENT
BA243 BACHELOR OF BUSINESS ADMINISTRATION
(HONS) HUMAN RESOURCES MANAGEMENT
SEMESTER : PART 1
PROJECT TITLE : WRITTEN REPORT ON CASE STUDY
GROUP MEMBERS : 1. HAIRULNIZAM BIN JAMIL (2017343719)
2. IKHMAL HELMI BIN AZRI (2017134639)
3. IQBAL BIN AKHMARUL NIZAM (2017338277)
4. NUR AMIRAH BT MOHD BASHEER (2017910919)
5. NOOR SHAWATUL BINTI NON (2017718183)
LECTURER : SIR MOHD FAZLY BIN MOHD RAZALI

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TABLE OF CONTENT
PAGE
TITLE PAGE i
ACKNOWLEDGEMENT ii
TABLE OF CONTENT iii
LIST OF FIGURES iv
LIST OF TABLE v
EXECUTIVE SUMMARY vi

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TITLE PAGE
Page
1. INTRODUCTION ------------------------------------------------------------------------------ 4 - 8
1.1 Background of The Study
1.2 Problem Statement
1.3 Purpose of The Study
2. COMPANY INFORMATION --------------------------------------------------------------- 9 - 14
2.1 Background
2.2 Organizational Structure
2.3 Products/Services
2.4 Business, marketing, operational strategy
2.5 Financial achievements
3. COMPANY ANALYSIS --------------------------------------------------------------------- 15 - 17
3.1 Business Model Canvas (BMC)
4. FINDINGS AND DISCUSSION ----------------------------------------------------------- 18 - 20
5. CONCLUSION -------------------------------------------------------------------------------- 21
6. RECOMMENDATION AND IMPROVEMENT ---------------------------------------- 22 - 23
7. REFERENCES ------------------------------------------------------------------------------- 24
8. APPENDICES -------------------------------------------------------------------------------- 25 - 26

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1. INTRODUCTION
1.1 Background of The Study
Scope of Report
➢ This report covers the background of the organisation, situation analysis, strategic
options for the organisation, key selection criteria and recommendations for the
organisation.
Limitations of Report
➢ This report may not be entirely credible and may not be very detailed. This is since
we have difficulty obtaining information and details on Radix Fried Chicken as the
information we gather online is limited and our interviewee, who is the supervisor
of Bandar Laguna Merbok, Sg. Petani RFC branch, could not answer most of our
questions with eloquence and could not provide us with the details we wanted.
Furthermore, certain parts of our report are written based on our observations,
knowledge, understanding and analysis.

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1.2 Problem Statement
SWOT Analysis
SWOT analysis is a method of strategic planning used to evaluate the strengths,
weaknesses, opportunities, and threats involved in a project or in a business venture.
SWOT analysis also involves specifying the mission and vision of the business
venture. It can also be a tool for auditing an organization and its environment. SWOT
analysis is generally used by businesses or organizations to identify the key internal
and external factors that are important to achieve objective in the particular company.
Basically, the internal factors mean that the strength and weaknesses in the internal
management to the organization. For example, the firms must identify their strengths
and weaknesses in resources, capabilities and core competencies so that they can
able to identify whether their organization have core competencies in areas required
to achieve a competitive advantages. Alternatively, they could decide to outsource
their weak function or activity in order to improve customer's value towards the firm's
products or services. Inversely, external factors are the opportunities and threats
presented by the external environment to the organization. An opportunity is a
condition in the general environment that if exploited effectively can help an
organization achieve strategic competitiveness in the market. However, a threat is a
condition in the general environment that may hinder organization efforts to achieve
strategic competitiveness which may cause trouble for the business.
The SWOT analysis of RFC is summarized as follows:
Strengths:
Their foods are unique and different compare to other fast-food restaurants as natural
herbs and spices are used as ingredients in their food. For example, their Radix Cola
and fried chicken are made from herbs.
Good customer service. RFC has excellent customer service as the staffs are polite
and will patiently listen to their customers' demands. They are also efficient in the
serving of their food as food is served to customers within a short period of time upon
ordering.

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Has a good reputation for the excellent quality control in their food.
Good balance of budget. RFC managed to balance their budget well in order to achieve
their low-cost strategy where they try to minimize their costs and price their food at a
relatively lower price compare to their competitors.
Weaknesses:
Weak brand presence and image. Many people do not know about the existence of
RFC.
Insufficient used of technologies. RFC does not use much technology in their
production or service.
Financial constraints. RFC does not have much financial resources.
Does not have many outlets. Besides that, the locations of RFC outlets are not situated
at strategic locations.
Skills of employees. The employees are not equipped with insufficient skills as most of
them are SPM leavers.
Inefficient inventory management. RFC often experienced a shortage in stocks and
supplies which cause them losses at times.
Opportunities:
The halal or Muslim market. RFC is the one and only Muslim -based restaurant in
Malaysia and this gives them an advantage over other fast-food restaurants as
Malaysia is a Muslim country.
Globalization. RFC is planning to expand their business overseas to countries such as
China, Indonesia, Arab and other Middle-eastern countries.
Threats:
Stiff competition. RFC has to compete with other fast-food restaurants with a strong
customer base such as McDonald's, Kentucky Fried Chicken and Pizza Hut.

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Summary of Situation Analysis
The Situation Analysis is divided into four topics, which are the General Environment,
Industry Conditions, Stakeholders and the SWOT Analysis.
There are seven general environments for the Radix Fried Chicken; Demographic,
Economic, Political/Legal, Sociocultural, Technological, Global and Physical
Environment. This topic focuses on the environment that Radix Fried Chicken (RFC)
is in. In demographic forces, it describes the target market of RFC which is mostly
Muslims. For economic forces, RFC is operating in an economy where the growth rate
is slow. As for the political or legal, RFC must abide the rules and regulations set by
JAKIM. In sociocultural forces, more people are dining out and the preference for fast-
food is high among young people. As for the technological forces, RFC uses posiflex
at the cash register so the money is more secure. Other than that, RFC uses a
robotcoup for making coleslaw. The global forces mention that RFC is planning on
opening a branch in Indonesia, Saudi Arabia, China and Middle Eastern countries. As
for physical environment, RFC uses organic chicken in their fried chicken.
In the Industry Conditions, the Michael Porter's Five Force Analysis is used. The first
force in the framework is the threats of new entrant. As we all know that RFC is a new
fast food restaurant. So it faces competition from other restaurants that are more
established like KFC or McDonalds. Next is the bargaining power of the suppliers. RFC
gets most of its products from their parent company which is HPA. So switching cost
would be really high for RFC to consider due to the effectiveness of the supplier. In
bargaining power of customers, RFC offers cheaper prices than their competitors,
which is an advantage for customers. Next is the threat of substitute products, which
is a disadvantage for RFC because they sell the same products as their competitors
who provide many substitute products in the market. The last force in the five forces
framework is the intensity of rivalry between RFC and other fast food restaurants. RFC
main competitor, KFC has an advantage on them because they are globally known
and winning over their loyal customers is a difficult task.
RFC has three key stakeholders, which are; customers, employees and suppliers.
RFC's customers are generally Malaysians but they more focus on Muslims because
their main objective is to provide halal food. As for the employees, all of them are
Muslims. So, the culture and all the practices and regulations are based on Islam's
Syariah Law. RFC's main supplier is HPA, where they obtain all their raw materials
from.

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The SWOT Analysis identifies RFC's strength and weaknesses, threats and
opportunities. For strength, RFC is different from its competitors because their
products are herbs-based. For example is their fried chicken and Radix Cola. They
also offer high quality products and good services at a cheaper price compare to their
competitors. As for the weaknesses, we have identified that RFC does not have a
strong brand name because many did not know about their existence. Apart from that,
RFC lacks in technology, financial resources, and employee's skills and has a poor
inventory management. As RFC is a halal fast-food restaurant, they have an
opportunity to break into the Muslim market and expand their business to Islamic
countries like Saudi Arabia and Middle-eastern countries. Lastly, operating in an
industry with strong competitors that are globally recognized like KFC, McDonalds and
Pizza Hut is a threat to RFC.
1.3 Purpose of The Study
The objectives of doing report is to study and understand the whole business
environment better, to apply our knowledge of management of strategy in a real
business environment by analysing the general environment and using the appropriate
strategies in a business situation. Besides that, this report is also done with the motive
of guiding Radix Fried Chicken (RFC) in the management of their business.

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2. COMPANY INFORMATION
2.1 Background
Radix Fried Chicken (RFC) was established by Tuan Haji Ismail on the 26th of
May 2008. The first RFC branch, which was opened in Lagenda Heights, Sungai
Petani, Kedah, started its operations on 1st June 2008. The opening of RFC is 100
percent owned by Islamic Bumiputra’s.
RFC is one of the subsidiary companies under HPA industries Sdn Bhd and is a fast-
food based concept restaurant based on the Islam Syari'ah law. All requirement
aspects of the Syari'ah ensure RFC's quality from its storage of raw materials, its halal
quality and cleanliness.
The management and operations aspect of RFC practices the ethical principal of
Islamic workers such as Muslim culture, discipline and the practice of praying before
the beginning of each working day.
In the current situation, the market and demand for fast-food is high. It is found that the
fast-food concept market in this country is monopolized by the non-Islam community
and 90 percent of their brands originated from overseas. Upon the realization and
responsibility how, important halal food choices are, RFC is established to give halal
food choices to Islam people, especially Islam people in Malaysia. With the opening of
their first restaurant in Sungai Petani, RFC is determined to open 400 more restaurants
in the whole of Malaysia.

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2.2 Organizational Structure
Radix Fried Chicken Bandar Laguna Merbok
No. 38, Lorong BLM 1/2, Bandar Laguna Merbok, Sungai Petani 08000 Kedah.
Executive Management
At the highest level of the employee chain is the general manager, who is responsible directly
to oversee the operation of the whole restaurant. Managers need to ensure that operations
reflect corporate culture, make company policy sure to be followed and see that customers
are satisfied with their experience. They usually make decision-taking and dismissal, as well
as those involving starting to compensate and cause. Critical responsibilities include budget,
salaries, schedules and inventory, and also purchase supplies such as food, fried oils,
condiments and toiletries. In larger restaurants, there may be one or more assistant managers
on site to help carry out these tasks.
Shifts Supervisor
Shift supervisors work under executive management and are directly responsible for providing
guidance, motivation and support to employees under them. Unlike the store manager, shift
supervisors perform all the same duties that regular associates do and work alongside them.
In addition to leadership by example, shift supervisors handle complex issues such as

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addressing customer complaints and meeting refund requests. In some cases, shift
supervisors may help make schedules or count out register drawers during shift changes or at
the end of business. Shift supervisors report directly to the store manager
Sales Department
Sales department are the front-line sales team members responsible for running cash
registers, manning the drive-through window, cooking orders and keeping restaurants clean.
Fast-food sales department positions have very low entrance requirements, making them
good jobs for high school students or people seeking immediate temporary employment.
Sales department usually start off close to minimum wage and can work based on
performance and length of service.
Store Manager
Store manager are actively involved in hiring, firing and compensation decisions, as well as
setting the tone for the unique cultures of their stores. Store managers generally either lead
by example or coercion to ensure front-line employees follow all company policies, but they
are rarely involved in day-to-day supervision. Additional store manager tasks include
purchasing, budgeting and auditing inventory for their stores.
Frontline Department
These employees help customers when they go to the restaurant to order. They must
welcome customers warmly, take orders accurately, communicate them with team prep
food and answer any simple questions. Frontline partners also handle orders ringing in the
list. They must know the basic functions of the POS system used in restaurants, how to
handle credit cards and checks and how to make changes. Frontline employees sometimes
walk back to filling drinks, grab side dishes or bring orders to the counter. Frontline
employees report directly to the same investigator.
Chefs and Cooks
Live under the chef sous's chef. chef sous are second-in-command, and there are usually only
one chef sous working during any given transit. Others who work in the kitchen are cooks and
take orders from both chef sous chef and head. All backline employees respond to those
responsible for chef's chief and chef sous.

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2.3 Products/Services
Products
This restaurant served fast food that specializes in fried chicken. The product is
typically available in either two or three piece individual servings, or in a family size
which we called bucket, typically holding between 6 and 16 chicken pieces. Moreover,
this restaurant is serve side dishes include french fries, coleslaw, mashed potato, rice
and also sweet bun. Other than that, cold drinks such as soft drinks and hot drinks
such as coffee also had been served. They also have different limited-time products to
cater to different festive seasons such as satay with honey for Ramadhan season.
Service
Service that had been provided is self-order and self-pickup at the counter and delivery
service to customer place.