1.

Executivesummary
TsuiWah,asthemarketleaderofHongKongChaChaanTengindustry,hasextendedits
businesstothemainlandhowever,theperformanceofTsuiWahinmainlandisnotreallysatisfying
indicatedbytheannualreport.FacingstrongcompetitioninpriceandbrandimagefromTaiHing,Tsui
WahwalkontheedgeofanagingChaChaanTengmarketinHongKong.Whilegeographicexpansion
canbeanoutstandingchoiceforTsuiWahtoavoidthecompetition,TsuiWahhaveyetfoundawayto
establishpopularityamongmainlandconsumergroupsduetolackofstrategiestomanagefood
consumptionattitudesinChina.
Majorityofthemiddleandupperclassofcitizensinmainlandareundertheheavypressurefrom
bothworkandenvironmentandarelongingforaplaceandmomenttoescapefromthestressfulcity
life.Teaway,atailormadeproducttosatisfythisincreasingdemandandhelpwithTsuiWahs
expansioninmainland,willbeintroducedinthisreport.Itreferstopremiumteashopthattargetsthe
uppermiddlesegmentanddifferentiatesinofferinghighqualityteaandtherelaxingatmosphere.The
uniqueexperienceofdiningawayfromallthenoise,pollutionandstresswillbedeliveredtoevery
customerthroughtheinnovativeconstruction,besttea,dimsumsandservices.
Basedontheclearmarketobjectivesandpositioning,industryanalysisandcompetitoranalysis
areconductedtoprovethepotentialofthemarketandthefeasibilityofTeaway.TheSWOTanalysis
willalsobeappliedtofigureouttheimportantexternalandinternalfactorsthatcouldaffectthelaunchof
Teaway.ImplementationplanandrecommendationwillthenbegivenwiththeinsightsfromTeaways
4Panalysis.AdetailedpromotionplanwillalsobeintroducedtofacilitatethelaunchofTsuiWah
Teaway.Atlast,aconcretebudgetplanwillbeprovidedtoshowthecashadequacyandprofitabilityof
thewholeplan.
Supportedbythecomprehensivesituationalanalysisandtheoptimalrecommendation,Teaway
isgoingtohelpTsuiWahseekgreatfortuneinthemainlandmarket.

2. Introduction and Current Situation

Withmorethan50yearsdevelopment,TsuiWahhasgrownfromasmallIceCafeinMong
KoktotheNo.1ChaChaanTengchaininHK.
HongKong

ItcanbeobservedfromtheAnnulReport(2013)thatTsuiWahhasdevelopedsteadilyin
HongKongwithacontinuousrevenuegrowthinthepastfewyears.However,withmorethanthree
thousandChaChaanTenginHK,thegrowthpotentialisquitelimited.AreportreleasedbyFrost&
Sullivanin2011predictedthatthewholerevenueofHongKongChaChaanTengindustywillincrease
by90billionfrom2012to2016,however,only1/9ofitiscontributedbyhighendChaChaanTeng,
whereTsuiWahbelongingto.Sowecanseethatthefuturegrowthinthisindustryismainlyfromthe
middleendChaChaanTeng,whichwillmaketheindustrymorecompetitiveandbringmorepressure
toTsuiWah.

MainlandChina
Inrecentyears,TsuiWahhaspaidmoreattentiontothepotentialcateringmarketinMainland
China.ItopeneditsfirstChaChaanTenginShanghaiin2009.AfterlistedonSEHKasthefirst
companyinChaChaanTengindustryin2012,TsuiWahhasopenedsixmorecateensinMainland.
TakingadvantageofTsuiWahsgoodreputationandhighqualityfood,theexpansionshouldbe
asuccess.Butitturnsoutthatthecompanyisntdoingwellenough.

Revenue from External Customers

2013(Million

HongKong

Mainland

Totalrevenue

870

203

Quantity

24

Revenueper

36.25

29

HKD)

restaurant
SincethepotentialcustomeramountandthefloorspacearelargerinChina,therevenueper
restaurantshouldbehigherthanthatinHKgiventhesimilardishprice.Frost&Sullivansreportalso
showsthatTsuiWahdidntdowellinMainlandmarket.ComparedwithothertopChaChaanTeng
chaincompanies(e.gTaiHing)inChina,theyearlyrevenueofTsuiWahisrelativelylow.Thelow
revenueshowspeopleslowacceptancetotraditionalTsuiWahmode.

Asmentionedabove,withthelimitedgrowthspaceinHongKongmarketandlessprofitable
modeinmainland,TsuiWahneedstoadjustaccordingtocustomersdifferentdemandinordertobe
theleaderinChaChaanTengmarket.

3. Customer demand analysis

DuetothedevelopmentofeconomicsandincreasingnumberofmiddleclassinChina,
especiallyinthebigcitieslikeShanghai,customersaskformorethanthefoodtasteandquality.
TakingShanghaiasanexample,accordingtoasurveyconductedbyShanghaiNormal
Universityin2012,36.2%ofShanghaipeoplethinktheyhaveaheavylivingpressure,while55.7%
thinkthatthelivingpressure,whichis91.9%intotal.Atthesametime,airpollutionisathreatoflivingin
bigcities.WiththegrowthofmiddleandupperclassinChina,peoplearerequiringthequalityoflifeand
lookingforaplaceinbusycitieswheretheycanenjoytheirpeacefulmealhavearealrestandseparate
themselvesfromthenoisyandstressfullifeforaperiodoftime.
Inaconclusion,thecurrentTsuiWahChaChaanTenginmainland,whichisnoisyand
encouragesfasteating,cannotsatisfycustomersneedsforpeaceandrelaxation.

3.1.CurrentMainlandCustomerAnalysis
Throughouttheyears,TsuiWahhasaccumulatedalargegroupofloyalHongKongcustomers.
ThepublicityofTsuiWahinHongKonginternationalairportandkeytouristlocationsoftencreatethe
firstimpressionforChaChaanTengwhenforeignersthinkofChinesefood.However,thebrandimage
forTsuiWahinthemainlandmarketismuchlowerbecausetherestaurantchainhasyetknowawayto
capturethecustomers.UnlikeHongKongcustomerswhoneededspeedandefficiency,mainland
customersaremorefocusedontheenjoyment,priceandqualityoffood.Throughresearch,wecome
upwiththreekeydistinctionbetweenMainlandcustomersandHongKongcustomers.Basedonthese
differences,webelieveTeawaywillbeouridealnewproduct.

3.1.1.Dineouthabit
ThepacesofdinningforHongKonglocalsaresignificantlyfasterthantheoneforMainlanders.
Thekeydifferenceliesintheattitudetowardfood.HongKongpeopleareusedtogoodqualitydishes
thatpassedmultiplefoodexambeforecateredtothem.FoodsafetyinHongKongisassumed,
especiallyinreputablefoodchainlikeTsuiWah.HongKonglocalspaylessattentiontoqualityand
moretowardtasteandingredients.However,inmainland,foodsafetycannotbeassumed.According
toFoodSafetyreportpublishedbySustanalyticsin2012,majorityofChinesefooddistributorshadlow

ratingininvestment,exposureorprepareness.Fromtheyearsofdegradingexperiencefromdinningout,
mainlandcustomerslacktheexcitementfornewrestaurants,especiallyChineserestaurantschain.
Mainlanderavoideatingoutasoftenaspossible,whichmakesthefoodbusinesssodifficult.Yet,drinks
anddesserthousehaveflourishedinthepastfewyears.Perhaps,eatingsmallpromotesthebeliefthat
littleamountcanbetolerated.

3.1.2Consumersocialclass
Asalabormanufacturingsite,mostmainlanderslivedalifewhichtheirwagesareminimumto
theirsurvival.Since2010,foodcostsinChinafarexceededconsumerlevel.UnlikeHongKongwhere
mostpeoplegetlunchfromlocalrestaurantstosavetime,mainlandlaborstrytosavemoneybycutting
dineout.ComparetoHongKong,onlymiddlehighorhighclassmainlandershavethetimeandmoney
tovisittheirfavoriterestaurantsduringlunchorafternoon.Withtheadequateincomeandsocialstatues,
thesecustomersdemandforrecognitionandtailormadeproducts.Therefore,thedealchoicerestson
themerestaurants.TsuiWahmenustargetforbothlowendandhighendcustomers,whichdilutesits
imageintomassmarketer.Whenthehighendmainlandcustomersseekforanicemeal,ChaChaan
Teengcomestonearthebottomofthelist.KnowingTsuiWahhaslimitedbrandrecognitionand
popularityinmainland,itneededanotherproductthatcanenterlessmaturemarketinthecafeindustry.

3.1.3Diversityintaste
Inamoreculturalhomogenoussociety,HongKongChaChaanTeengreachedsuccessthrough
creatingatypeoffoodeveryHongKongpeoplelike.WhileHongKonghasitsuniquefoodcultureand
lifestylewhichforeignersfeelobligatedtofitin,majorcitiesinmainlandchinaalsocontainlargeamount
offoreignerswhomaintainedtheirownlifestyleandmainlycomeforwork.Therefore,accordingtothe
FoodandDietsectionoftheChineseCulturevaluereportpublishedbydiversicaresinch2006,there
existalargevarietyoftasteandfoodexpectationforwhatconsidertobeChinesefood.Adjustingthe
menuortasteforeachcustomerisvirtuallyimpossibleforlargefoodchain,whichputTsuiWahCha
ChaanTenginavulnerableposition.WhilemostChinesehaveperceptiononfood,TraditionTeaand
teapastries,ontheotherhand,canbelessfamiliarbecausetheyarenotservedascommonly.Utilized
thisfact,TsuiWahcanrethinkandmodernChineseTeaculture.

1.Industryanalysis
ChaChaanTenindustryisoneofHongKong'stypicalindustrywhichenjoyshighpopularitybutlowprofitspace
duetofiercecompetitionandgeographicalrestrict.TsuiWahcompanymainlyfocusesonChaChaanTen
businessinHongKonginthepastfewyearsandnowengaginginMainlandChinamarketbuthavingproblemsin
makinglargeprofitduetothefollowingChaChaanTenindustrycurrentsituation.
Atthesametime,theforecastofTsuiWahTeawaycanbewitnessed.
1)FromtheoverlookofChinesemarket
Chinahastheworlds'largestpopulationandisbiggestfoodconsumptioncountry.Cateringindustryisalwaysthe
nucleusofChineseretailsalesofsocialconsumergoods.Itmakesgrossprofitof2,000billionin2011,which
takesthepercentageof11.3%inthewholeconsumptionofRetailsalesofsocialconsumergoods.InNovember
16,2011,theDepartmentofCommercereleased"Guidingopinionsduringthetwelvefive"topromotethescientific
developmentofthecateringindustry,whichpointsoutthatthecateringindustryshouldwithholdtheannual16%

incrementspeedandreach3,700billionin2015.SothatthecurrentcateringindustryinChinaisquiteoptimistic
andissuitableforTsuiWahtoenterinwiththesupportofpolicy.However,theChaChaanTenindustrytakesnot
highpercentageinChina'sctaeringindustry.
ChaChaanTenisatraditionalHongKongcateringformandhaven'tenterMainlandChinesemarketforalong
time.Sowewitnessthefollowingdisadvantagesinitsrunningpattern.
MostoftheChaChaanTen,includingTsuiWah,inMainlandmarketchoosetocarryonthetraditionalHong
Kongformofcatering,whichdoesn'tsuittheMainlandmarketthatwell.Becauseofthefirstimpression,it
aggravatesthedifficultyforthesubsequentChaChaanTentochangetheexistingimageofChaChaanTeninthe
customers.
ThemenuofChaChaanTeniscomparativelydullandwithoutmanychange,whichmaygraduallyleadstothe
lossofcustomers.
ChaChaanTendoesn'thavefixedcutomersinMainlandChinaasaexoticandthereforetheincomeisnotfixed
toasteadylevel.
ConnectingwiththefactthatourTsuiWahChaChaanTendoesn'tmakesuccessinMainlandmarketinthepast
fewyears,it'snotagoodideaforustocontinueexpandinginMainlandmarketbyChaChaanTenestablishments.
However,recently,withthedevelopmentofChina'saveragepersonalincomeandpeople'srequirementofliving,
thegrowthofpeople'sconsumptiontowardsgreenandhealthyfoodanddrinksisalsogrowingrapidly.Asaresult,
theteamarketiskeepingoptimisticundertheconditionofworldfinancialdepressionandinflation.Accordingto
InstitutionofFinanceandTradeEconomics,ChineseAcademyofSocialScience,Chineseteamarketindexis
106.27and105.11in2010and2011,whichholdsteadilyupon100andthereforeimpliestheenergyofChinese
teamarket.Asthemaincarrierofteaconsumption,teahouseandourTsuiWahTeawaywhichsellteaasamain
service,alsoenjoysoptimisticexpectation.IncurrentChinesemarket,thereare5pointssupportingus.
Thereisatendencyofthisindustryduetothedemandoftheproductandtheshortnessofprofessionalstaffand
technologyofmanagement.
Themarketislargewithnotmuchcompetitorsandthereisnoleadingestablishmentsothatit'srelativelyeasy
toenterthisindustry.
Thecostofrunninganestablishmentlikethiswillnotbehighandthereforelowertheriskoflosing.
Thespaceofprofitisquitelarge.
Thereisnoneedfortoomuchadministrationandaftersellwork.
Atthesametime,ourTsuiWahTeawayhasauniqueadvantageintheChinesemarketwhichiscombing
traditionalChineseteawithtraditionalHongKongteacultureandmayattractmorecustomersunderthecondition
ofinternationalculturecombination.
2)Fromthespeedofconsumptiongrowth
AccordingtoreportsbytheDepartmentofCommerce,wewitnessasteadygrowinChinesecateringincome.
However,thepercentageofwholeconsumptionofRetailsalesofsocialconsumergoodsisgoingdowninthe
pastthreeyears.


ThisimpliesthatunderthehighgrowthpaceofChineseaverageincomeandconsumption,thecateringindustry
isfacedwithgrowingpainscomparingwithothersocialconsumergoods.Fromthispointofview,ignoringthe
supportingpolicy,itwillnotbewiseforTsuiWahtoenterthecateringmarketintheformofChaChaanTen,which
isafastfooddining,facedwiththefiercecompetitionfromotherlocalcateringindustry.Onthecontrary,itwillbea
goodchoicetoenterthemarketinanotherformasaserviceofbeverageandcolddrink.Ontheonehand,thiscan
enjoythefinancialsupportfromthepolicy.Ontheotherhand,thisavoidsthemarketsaturation.
ConsideringtheideaofTsuiWahTeaway,sincethespeedofChineseteaconsumptiondevelopmentisfaced
withaquiteembarrassedsituationduetothegrowthofteaconsumptionis10%20%inthepastfewyearswhile
theproductiongrowthofteainChinais48%forcultivationand76%foroutput,whichcausessevereimbalance.
However,thismaybeagoodnewsforourTsuiWahTeawaybecausetheoverproductionofrowmaterialimplies
lowcostofpurchasing.Atthesametime,thegrowthofteahouseisnotrapidwiththehighspeedgrowthofneed
forteaandteahousecultureconsumption.

1.1BuyingPatterns
ThebuyingpatternnowinTsuiWahChaChaanTenisinaformofcasualdining,whichmainlyattractscustomers
bytheconvenienceandfoodtaste.However,thismaynotberegardedasadvantagesinMainlandmarket.The
reasonsarethatpeopleinmainlanddon'teatoutasfrequentlyasHongKongpeopleandtheymaynotbeableto
completelygetusedtoHongKongstylefastfood.Also,TsuiWahChaChaanTendon'tofferthetakeoutservice,
whichdoesn'tsuitthehabitofMainlandofficeworkers,whicharethemainlytargetcustomersofTsuiWahCha
ChaanTen.However,thissituationcanbeimprovedalotbyofferingtheTsuiWahTeawayestablishment.
ThemajorreasonforthecustomerstoreturntoourTsuiWahTeawayisgreattastingtea,considerateserviceand
pleasantatmosphere.Although,teaandsumdimsconsumptionisuniformacrossdifferentincomesegments,we
willpriceitsproductofferingscompetitively.Westronglybelievethatsellingteaordimsumswithagreatservicein
anicesettingwillhelpusbuildastrongbaseofloyalclientele.Besides,asacharacteristic,Chineseteaculture
combingwithHongKongteaculturewillbeagreatattractivepoint.

1.2ProducingPatterns
TheproducingpatternofTsuiWahChaChaanTeninMainlandmarketistohaveafastlineofproductionwiththe
existingcombinationofmenu,whichisnotcompetitiveenoughwiththeassaultofotherlocalchainfastfood
cateringestablishmentwithhighvarietyofdishes.Also,therowmaterialofChaChaanTendishescomefrom
foreland,whichcausesdifficultiesforestablishmentininlandtogetmaterialsinlowpriceandhighfrequency.
Also,thefreshdegreewillbeinfluenced.However,thesimilarpredicamentwillnothappeninTsuiWahTeaway.

Themaintargetweplantoachieveinproducingistoreducethecostandhighertheproduceefficiency.As
reported,teainChinaismainlyproducedlocally.However,therearedifferentteaproducingareaanddifferent
kindsoftearowmaterialswhichcanbehighlydiversifiedsothatthechoiceofmaterialsiscrucial.Consideringtea
asnotonlyakindofdrinkbutalsoasymbolofidentityandculture,weneedtosolvetheproblemofensuringthe
qualityofourteaandmakeitawayofreducingcost.Ontheotherhand,weneedtoattracthighendcustomers,so
thatit'salsonecessarytobuyhighgradematerials.Duetotheoverproductionofteaasstatedbefore,it'sefficient
tobuyinteafarmlandwithlowpriceandthereforefurtherlowerthecost.Lastly,thedecorationoftheshopshould
beadaptedwiththepositionofthetargetcustomers.

4.Competitoranalysis
TsuiWahisfacingseverecompetitioninbothmainlandandHK.
4.1TsuiWah,asthemarketleaderofChaChaanTengindustryinHK,ishavingahardtimetokeepits
leadingposition.Thetop10ChaChaanTengchainsespeciallyTaiHingischallengingTsuiWahs
position(Seeappendix).TsuiWahandhismajorcompetitorTaiHingsperformancewillbe
comparedinthefollowingthreeaspects.
4.1.1Profitability
Withthehighestturnoverrateandtheaverageprice,theperformanceofTsuiWahsaverageCha
ChaanTengissatisfying.However,thisgreatadvantageisdilutedbythehighproportionofoperating
costandthesmallnumberofChaChaanTengs.TaiHingontheothersideisexpandingrapidlyandthe
totalrevenueofitstwocorebrandshasexceededTsuiWah.
4.1.2Portfolio
TsuiWahfocusesontheChaChaanTengmarketandhasalreadybecomesthemarketleaderwith
almostonethirdofthemarketshare.SincetheChaChaanTengindustryinHKhaslongbeeninthe
matureperiodwithmorethan3000restaurantssharingthelimitedpie,TsuiWahmaynothavemuch
potentialinthisindustry.However,TsuiWahscompetitorTaiHinghasamorediversifiedportfolio.
InsteadoftraditionalChaChaanTeng,italsooffershotpot,sushi,barbecueandawildvarietyoffoods
underdifferentsubbrand.
4.1.3Reputation
TsuiWahhasactuallywonalotofreputationandhasbetterratingthanTaiHingandothercompetitors.
However,thegoodreputationhasntbeenusedwell.TaiHingpaysmoreattentiontothepromotion

andthestoryofTaiHingshistoryandhighqualityfoodcanbethroughalotofmagazines,newspapers
andnewmedia.TsuiWahaimstoattractthecustomersdirectlyanddoesnotspendalotonpromotion.
AccordingtothesurveyonChaChaanTengindustryinHK,morethan60%ofcitizensregardTaiHing
astheNo.1ChaChaanTenginHK.
AnotherimportantissuethatTsuiWahshouldpayattentionisthefoodsafetyproblem.In2012,10
accidentsrelatedtothefoodsafetyofTsuiWaharereportedwhilethenumberforTaiHingisonly
three.Thoughthefoodproblemsareallfromthesuppliers,itcanstillmakegreatharmtothereputation
ofTsuiWahwiththecustomersincreasingawarenessonfoodsafety.
4.2Inmainland,TsuiWahsdifferentpositioningleadstodifferentconcerns.
Inmainlandmarket,TsuiWahscompetitorsincludenotonlyotherHKChaChaanTengs,butalsoalot
ofChinesetraditionalcasualrestaurantandforeignCaf,whichalsotargetthemiddleclassasTsui
Wah.
TsuiWahenteredthemainlandmarketin2009,whichis5yearbehindhiscompetitorsTaiHing.Also
allthesixChaChaanTengsareinShanghaiandinotherfirsttiercitiesTaiHingcanbefoundbutitisa
blankforTsuiWah.
Gladly,thereisnosignificantmarketleaderinmainlandmarketandTsuiWahstillhasthechanceto
expandinmainlandandgainmoremarketshare.
4.3TsuiWahalsohasitsuniqueadvantagesoverothers.Byelaboratingmoreonthem,TsuiWahcan
havemuchbetterperformanceagainstitscompetitors.
AsthefirstChaChaanTengtobelistedinHKstockexchange,alotofcapitalsareraisedandthegood
sharepriceshowspeoplesconfidenceonTsuiWahsfurthergrowth.Moreimportant,itmakesit
possibleforTsuiWahtoopenmoreChaChaanTengstostabilizetheleadingpositioninHKandgain
moremarketshareinmainland.
Apartfromthat,theuniquecentralkitchensystemcanalsogiveTsuiWahalotofadvantagesoverthe
competitors.Leveragingtheeconomyofscale,therawmaterialcostisaboutfivepercentlowerthanTai
Hingandatthesametime,thehighqualityandconsistenttasteofdishescanbeguaranteed.
5.Marketanalysis
5.1TsuiWahisinthetraditionalHKChaChaanTengindustry.Thoughitisoneofthemostimportant
partsofHKcateringindustry,itisgraduallylosingitshonoredpositionandattractivenessduetothelow

profitability,unhealthyeatinghabitandrisingalternatives.
5.1.1Lowprofitability
Themarketseemstobeappealinghowever,theviolentcompetitionandrisingmaterialcosthavedriven
theprofitdownbyalargedegree.Alowprofitmargincomparedwithotherrelatedindustriesis
observed(SeeAppendix).Ontheonehand,therawmaterialcostandrentalexpenseareexpectedto
keeprisingandtheCOGSwillremainahighproportion.Ontheotherhand,reductioninbonusoreven
alayoffmightdiscouragethecurrentemployeesalot.Inaconclusion,itishardforthecompaniesinthis
industrytoincreasetheprofitmargin.
5.1.2Unhealthyeatingstyle
ThenewgenerationmaynotpreferTsuiWahandotherChaChaanTengsbecausetheunhealthyeating
style.ThemaindishfortraditionalChaChaanTengisChineseBarbecue.Andthisoilyandunhealthy
foodgoesagainstthecustomersdemandforhealthylifestyle.Besides,inordertohaveafasterturnover
rate,customersareoftenencouragedtoeatasfastaspossibleandthiscouldbotherthecustomersas
well.
5.1.3Risingalternatives
Nowadays,forChaChaanTengindustry,thereareactuallyalotofalternatives.Forthepremium
segment,alotofwesternrestaurantsareavailableandthepriceisalmostthesameasTsuiWah.Asfor
thecheapalternatives,therearealotofChinesefoodrestaurants,competingagainstTsuiWahwitha
muchappealingprice.
5.2Meanwhile,therearealsoalotofrisingopportunities,addingnewlivestothisindustry.
5.2.1Largemarketpotential
Withsomanyyearsdevelopingafterreformandopen,Chinaeconomyimprovessharplyaswellas
personalincome.AccordingtoFrost&Sullivan,theaveragepersonalincomeisforecastedas26,664.1
RMBin2013andthisnumberisgoingtoincreaseto36,210.9RMBin2016(SeeAppendix).
Significantly,theoutflowforfoodisestimatedas6520.7RMBin2013,whichoccupiesalmosta
quarterofpeoplestotalincomeandindicatesastrongconsumepoweroffoodamongChinesepeople.
Inthesametime,Chineserestaurantindustrygrasped21,000billionin2012witha13.3%average
increasingrate.Thisnumberismeasuredtobe13.6%in2016withestimatedtotalindustryrevenueof
40,000billion.Inthisindustry,thepercentageofleisurerestaurantswasonly14.7%in2012,however,
thecompoundingincreaseofwhichreachedthehighestpoint,amongotherrestaurantcategories,of
27.2%,showingastronggrowingpossibilityofleisurerestaurantindustry.
5.2.2DemandforHealthFood

FoodsproducedinChinaarenowadaysfacingseveresafetyscandals.Fromthefoodproducers,
suppliers,distributorsallthewaytorestaurantsandhotels,thereareallsomeuglyscenesoccurred
duringtheseyears.Therefore,thisisnodoubtthatpeopleinChinaarelookingforwardtoasafer
circumstancestoenjoytheirmeals.TsuiWahscentralkitchenisintroducedtobeabletosolvethese
problemswithareliablechanneltoguaranteeitshighqualityfood.
6.SWOTAnalysisCharles
SWOTisappliedtosummarizeandsupplementtheresultsfromaboveanalysis.Aprofileof
TsuiWahscurrentbusinessisshownandTsuiWahTeawaysvalueisemphasized.

Strength

Internal&External

Opportunity

The mainland
casual
restaurant
market is of great
potential in terms of
scale and growth
rate.

The medias
recent report of
Starbucks
high

Thereisenough
capitalforthe
aggressiveexpansion
sincealmost0.7
billionisraised
throughtheIPOone
yearago.
TsuiWahsunique
centralkitchensystem
canincreasethe
efficiencyandtake
advantageofthe
economiesofscale.
Thehighqualityand
affordableHong
Kongtraditionalfood.
SO
Leveraging the capital
to expand business in
mainland.
Introducing
HK
traditional dim sums
andhighqualitytea.
Providing
the
desirable environment
for customers through

Weakness
Thevarietiesof
dishesarelimitedand
theintroductionofnew
dishesisratherslow.
Thecompanylacks
experienceinmainland
operationandthe
currentperformanceis
notsatisfying.
Thebrandawarenessis
relativelylowin
mainlandandthegood
reputationhasntbeen
builtyet.

WO

Investing more in
makingnewdishes.
specialized in offering
more
flavor
and
varieties of tea and dim
sums.

Making adjustment to
both the management
team and operation

pricing and Taiwan

poison starch in
milktea.
Customers
preference towards
peaceful
and
comfortable dining
conditions.
Threat
Tsui Wah is far
behind
its
competitors in the
mainland market due
to late entrance and
slow
expansion
speed..
Mainlandhighend
customers do not
enjoy the noisy
atmosphere
of
traditional
Cha
ChaanTeng.
Mainland customers
inadaption
to
traditional
Hong
Kongfood.

decoration
services.

and

ST

form

WT
Grabbingalarger
marketsharein
mainlandbyquickly
establishingmore
restaurants.
Takingadvantageof
the reputation of Tsui
Wah in HK Cha
ChaanTenindustry.
Operating in a new
form and creating
cozy and comfortable
atmosphere for our
customers.

Improving the
efficiency
and
effectiveness in the
mainlandexpansion.

Repositioning is
needed to adjust to the
mainlandmarket.

ThemainlandmarketispromisingandisessentialforTsuiWahssustainabledevelopment.
ThoughtheoperationnowinmainlandisnotthatsatisfyingandTsuiWahisbehindhiscompetitors,the
capitalinjectionalongwithTeawaycanbringgreatchanges.specializedinofferingteaanddimsums
canbemuchmoreefficientandguaranteesahighexpandingspeedandscale.Thenegativenewsabout
StarbucksandTaiwanmilkteacanhelpTsuiWahcapturemorepotentialcustomersandhaveasmooth
entrance.
Inaconclusion,withhighefficiencyandquality,TsuiWahTeawayistheoptimalchoiceforthe
companytoleadthispotentialmarketinmainland.
7.Recommendations
7.1.MarketingObjectivesandProductProfile

TheperformanceofcurrentTsuiWahChaChaanTenginMainlandisnotaswellasweexpect,which
showspeopleslowacceptancetotraditionalTsuiWahmode.SoTsuiWahneedstoadjustaccording
tocustomersdifferentdemandinordertobetheleaderinmainlandmarket.Toachievethisgoal,
TeawaycouldbeintroducedasanewentitytoTsuiWahsoperationinmainland.
TeawayasamixtureofeasternteahouseandwesternCafeisspeciallydesignedtosatisfythe
customersneedfornotonlyhighqualityfoodbutalsothesuperiorrelaxingandpeacefulexperience.
Itpayscautiousattentiontodeliveraspaceawayfromsoundpollutionanddistractioninorderforour
customerstoenjoyourspeciallymadefamoustea,dimsumandChinesepastryinanaturalandrelaxing
environment.ItoffersavarietyoffamousTea:dragonwell,springsnail,BigRedRobe,MelonSeed
andetceterauponcustomersdemand.ItalsoprovidestraditionalHKmilkteaanddimsums,which
standsfortheHKChaChaanTengculture.Weaimtodeliverthebestatthemostreasonableprice.
Thedesignoftheshoparisesofsimplicityandtransparency.Theexterioroftheshopwillbebuiltwith
hightechnologyantisoundglassincylindricalshapewhichmoreeffectivelyblockssoundinorderto
promotethedifferentiationbetweentheenvironmentoftheshopandtherealworld.Theshopwill
furtherdividedinto6sections,whereeachsectionhastwotofourtables.Eachsectionwillbeseparated
withthinnersoundglassaswelltopromoteasenseofownershiporgroupbelonging.Ontheother
hand,theinterioroftheshopwillbebuiltwithlightreflectingglasssolightcanstayinsidetheshopto
saveenergyandpreventlightpollutionatnight.Weaimtobeasustainablebusiness.
Asmentionedabove,therevenuegeneratedbyTsuiWahChaChaanTenginChinaisnotasmuchasit
inHongKong.ItcanbeseenthatTsuiWahinChinahasalargespacetoimprove.Theoperationof
TeawayisagoodwaytoexploreandgainmoremarketshareinMainland.
7.2.Targetingandpositioning
Thetargetingcustomerscanbesummarizedintothreegroups.ThefirstgroupistheexistingTsuiWah
customers.Teawaycanbeagoodplaceforthemtohavedimsumsandenjoyfreetimeafterhaving
mealsatTsuiWahChaChaanTeng,allowingmoreprofitscapturefromcurrentcustomers.Thesecond
partiscustomersfromCafes.WithmorecozyandcomfortableenvironmentandtraditionalHKand
Chinesefood,TsuiWahTeawayhasthepotentialtograbasignificantnumberofcustomersfromother
Cafes.ThethirdtypeofcustomersispeoplewhodonothavethehabitsofCafeorteaconsumption.
Triabilitybecomesanimportantfactortoattractthesenewcustomers.Webelieveourshopdesigns
andfocusescanwinusfavorability.Thelastgroupofpossiblecustomerswillbetourist,whichwillbe
discussedinLandmarksection.
Webelievelaunchingshouldstartfromthenichemarketingstrategy.Mostcustomersinthemainstream
consumingmarketwillnotbewillingtospendafterofficialmeals.Therefore,wewilltargetthemost
readycustomerswhohavetheneedtogosomewhereelseafterdinnerorlunch.Ourgoalistoprovide
arelaxingenvironmentforthemforworkordateandenjoytheirtimewhilebeingatanothersegmentof
TsuiWah.Astheideaofaftermealbecomesmorepopular,weexpectevennonTsuiWahcustomers
andotherCafecustomerstocomeintoTeawaybecauseweprovidethemostcomfortingworking
spaceforthem.Whethertheycomeforfoodandbeveragesorourshopdesign,wewillcapturegreater
spendingfromcurrentTsuiWahcustomersandworkourstepsuptheCafeindustrytosecurea

dominantposition.
7.33PAnalysisVincent
7.3.1Product
Brand:Theutopiaofthemetropolis
TsuiWahestablisheditslongtraditionmakingtheHongKongpeoplesfood.Reusingthe
nameswithTeawaycansharesomeoftheculturalreputation,makinggreaterprofitthroughthebrand
equity.Inresponsetothepossiblecannibalizationeffect,webelievethisisnotabigdealbecause
Teawaydoesnotactuallyservefullmeal.TheconceptsofChaChaanTengandCafeshopdiffer
fundamentally.ChaChaanTengcannotprovidetheperfectenvironmentforwork,andthink,which
inspiresustocreateoneforcustomerswhodemandromance,classy,peaceandabreakfromthe
reality.Onthepositiveside,Teawaymaygenerategreaterrevenuesfromcurrentcustomers,providinga
placefordessertdrinks,datingandrelaxationafterofficialmeals.Customerswhoseeklunchordinner
willstillgototheTsuiWahChaChaanTeng.
Ultimately,Teawaytakestheeffortwithhightechnologytocreateanutopiaawayfromnoise
andairpollution.Ourproductfocusestobringsubtlesensationstothemindsofcustomers:calmness,
relaxation,sharpness,andreminiscence.Ourenvironmentistheplaceforselfrealization,creative
thinkinganddesign.TheartofteabearsaspecialmeaningtoChinesesincetheemperorage.The
ChinesepastriesandoldteaontheTeawaymenulinksaharmonybetweentheshopandour
customers,takingustorediscoverpeaceofthecity.Thetransformationofteaartintomodernsociety
comestoTeaway.Wecreateaplacetoseethecityinanotherway.Thewisdomneverbelongedtous,
weonlymadeitpossible.

7.3.2Price
MarketSkimmingPricing
Highqualitydimsum,teaproductsandelegantenvironmentareourmajorpromotionalcalls.
SincewearetheinventoroftheseteashopsinShanghai,weshouldestablishastrongimagesofour
standardstolocalcustomers.Bypricingourserviceandproductshighinitiallywilltriggerpsychological
productsuperiorityamongotherpossiblesubstitutes.Customerswhorefertotheirpreviousexperience
maybemadetobelievepricetellsaboutthequality.Theteaproductsaresoldtocustomerswhohave
themoneyandadventurousmindtoseeknewexperience.Inthemeantime,wewilloffersetmenusso
customerscanmakemorepurchaseseveniftheydifferinproductpricingopinions.
Dependingontheneedtolowerthepricetoattractmorecustomers,wewilllowerthepriceof
ouroldproducts,andintroducenewteawithdiscountdeals.Inthisway,TsuiWahTeaskimsthe
maximumamountofrevenuefromthevarioussegmentsofthemarket.Atthisstage,wealsotryto
developagroupofloyalcustomers.WecanprovideTeashopregistrationformatthebackoftheir
receiptsforthemtoregisterasmembersforfree.

7.3.3Place
Landmarksstrategy

ForpopulartouristcitylikeShanghai,itishighlyprobablythatwecanestablishanewlandmark
ofthecity,byhaveinnovativedesignoftheshop.Teawayshopallowsitscustomerstohave
comfortablespottospectatethecityofShanghai.Thecylindricalstructurewithhightechnologysound
proofglassesoftheshopoffersanear360degreerevolvingtour,separatingtouristsfromthenoiseof
busycrowdsandhotairfromcarengines.WhileenjoyingafilteredcityofShanghai,bothwesternand
easterntouristscanenjoythemostculturalpastriesandteaoftheChinese.Webelievesuch
combinationgoesbeyondaplaceforlocalstoworkorrelax.Itcanbeaverysuccessfultourist
attractionatthelocationsofbusystreets,citygovernment,museumanduniversities.

7.3.4MarketChannels
ThenatureoftheTsuiWahTeashopbornsfromtheappreciationofteawiththeproper
environmentsatthemostaffordablepriceinShanghai.SincethefreshnessoftheTeaisimportantas
wellasthecost,theTsuiWuashouldhaveitsownstoragetopreservetheteasothatitcansendthe
urgentrawteamaterialstotheTeashopaccordingly.Expensiveteashouldbehandledwithmachinesso
thepropertreatmentcanbedone.Sinceusuallygoodrawteaislimited,acontractualverticalmarketing
systemshouldbeimplementedtoguaranteetheamountoftealeafsandteacostswhentheTeaShop
firstenterstheShanghaiTeamarket.
WhileTsuiWuaisbasedinHK,theTeawayshopshouldpositionitselfatthewellknown
districtofShanghai.Theshopdoesnothavetobebig,becausethequalityoftheenvironmentismore
importantattheintroductionstage.Atthereputabledistrict,itismorelikelytoattractwealthypeopleto
theshop.Withthesocialelitesstartusingtheshopasaplacetochatwhichleadthetrend,thismay
motivatethemiddleclasstojoinin.

8.CustomerAdoptionAnalysis
Inordertolaunchasuccessfulproduct,itisnecessarytoanalysishowourproductsinnovation
diffuseacrosstheconsumergroup.Thegoalistodevelopasenseofriskaswellas
expectationcomparingTeawaytoothershopsundercompatibility,relativeadvantages,triability,
observability,andcomplexity.
Accordingtoourconsumerresearch,Shanghaipeoplehaveemergingdemandsforsuitable
environmenttothinkandsitquietly.Restaurants,canteens,homeandevenmostcafesrarelymeetthose
meansduetothelackoftechnologyimplementation,andhumancontrol.Weplantoinvestinadvance
soundprooftechnologyforconsumersinourinteriorandexteriordesigntominimizenoiseinsideand
outsideoftheshoptoprovidethecozyandquietenvironmenteffectiveforstudyingandthinking.
Besidesqualitysettingenjoyment,wealsomakeconsistenthighqualityteaandteapastriestomeetthe
tasteexpectationofourcustomers.
TheeconomicriskoftryingoutTeawayislowbecausepeoplecanwalkinandfeelitbefore
theydecidetoorderandsitdown.Havingextraconsumerswalkingintotheshoparebeneficialbecause
theydonotincreaseourcosts.Regardlessofthepurchases,ourcustomerscanenjoythefulllengthof
thetimeperiodconsumingourteaandpastries.Weconsideredtheproblemoftablehawking,which

onepersonisnotwillingtogiveuphisseat.Unlessitisnecessary,customersmaybeaskedtoleavedue
totheendofhistermofconsumption.Fortunately,Shanghaiisratedoneofmostpolitecityinthe
world,andwewonthavetodoitoften.
ThereisvirtuallynodifficultyinvaluingandnotingtheserviceTeawayprovidebecause
everythingcanbefeltinstantaneously.Consumerswouldimmediatelysensethedifferenceinsideand
outsidetheshopduetothesoundproofsystemourshophas.Intheprocessofinnovation,we
discoveredtwotypesofkeyconsumersfoodconsumersandenvironmentconsumers.Onemaynot
feelthetheneedfortheothersasessential.However,thedemandsforthesetwoconsumersarenot
contradictory.Wecanprovideexcellentsettingandoutstandingproducts,becausebotharetechnology
based.Ourmachinesforteawillbecustomizedtoeliminatecopying.Ourfixedcostsmayincrease,but
itissomethingtobeloved.

9.Promotion
9.1.Identifythetargetaudience
Thetargetaudiencesaremoderncitizensfrombothuppermiddleclassandupperclasswhoare
seekingfortheelegantandcomfortablerelaxingenvironmenttoenjoytheirmealsandescapefromthe
stressofthenoisyandpollutedcitylife,likegoldencollars,whitecollars,publicservants,
businessmen,lawyersandsoon.
Thesetargetcustomersmainlyhavetwodemands.Ontheonehand,theyareboredwiththemodern
noisycitylife,andwanttoenjoysomeleisurelyandcomfortablemomentsinthebusylife.Theyarea
groupoffashionpeople,whoaresearchingforthequalitylifeandboredwiththestressfulandnoisycity
life.Sotheypreferacozyenvironmenttorelax,notthenoisyandcrowdedonesastraditionalchachaan
ten.ThepeacefulexperienceprovidedbyTeawaycandirectlysatisfytheirneeds.Ontheotherhand,
theylikeChinesetraditionalfoodanddrinksespeciallytheChineseTeaanddimsum.Whentheyneed
tochatwithfriendsorhaveashortrelax,theywouldliketofindaplacewhichcanprovidethemsome
Chinesetraditionalsnackfoodanddrinks.
Asoursearch,wefindthattherearefewplaceinMainlandwherebothdemandscanbesatisfied.
However,thispartofcustomerstakealargepercentageinthemoderncity,especiallyforthebigcity
likeShanghai.TsuiWahTeawaycombiningtheexquisiteChineseteadrinksandtraditionalfoodsina
cozyenvironmentcanappealtoalargenumberofcustomers.
9.2.BuyerreadinessstagesandCommunicationobjectives:
Teawayisatotallycreativeandattractiveformofleisurediningroom,soourbuyerreadinessstagesat
thebeginningistobuildawarenessandknowledge.Andourobjectiveinthistwostagesisarousing
awarenessandcreatingthedesireofourtargetcustomers.
Afterhalfyearsintroductionperiod,thefocuswillshifttolikingandpreferencestages,andmakeitbe
thoughtofandcomparedwhentheychooseplacetorelaxandletthetargetcustomershavethewilling
totryourproduct.
Andthen,theconfidencewillbemovedtotheconvictionandpurchasestagessuccessfully,andtryto
attractthematthefirstexperienceandmakethemlovethisstyleofrelax.

Forthesecondyear,wewillmovetotherepurchase,andthemostimportantthinginthisstageisto
buildloyaltyandrelationshipwiththecustomers,whichcanmakeitbeapopulartrendamongthe
upmiddleandupclasspeople.
9.3. Designthemessage
9.3.1Thebigidea:fullwithtranquility
Ontheonehand,fullmeansyoufullyourstomachaftereatingourhighqualityteaandDim
Sum.Ontheotherhand,fullmeansyoufeelsatisfiedwithatotallynewandtranquilselfafterenjoy
suchanmagicexperienceinTeaway.
A:
customersexpectationoraspirationsThedesiretoescapethenoisyandpollutedcityand
haveaquiteandcozyenvironmenttorelax&theloveforhighqualityChinesetraditionalteadrinksand
foods&thefashionandhealthlifestyle.
B:
CategoryConsumptionDriversHealthasadriverforcateringindustryFoodsafetyishighly
beingconcernedbythemiddleandupperclassofChinesepeopleDininginacozyenvironment.
C:
BrandDNAtheuniqueexperienceensuredbytechnologyandhumancontrolThesafety
andhighqualityfoodprovidedbycenterkitchenTheprestigiousoldbrandfromHongKong.(show
bypicture)
9.3.2CreativeStrategy:combinetheRationalAppealandtheEmotionalAppeal
Firstlywewillusetheemotionalappealtoshowthemodernpeopleinthelargecityisvery
stressfulandhavenowheretoescapefromthenoisyandpollutedcity.Bythesekindofnegative
emotionstofindthesamefeelingwithourtargetcustomers,andenticetheirwantsoffindingthesolution.
Andthen,wewillusetherationalappealandintroduceTeawaysbenefitsandattributes.Bythestriking
contrast,showTeawayisexactlythesolutiontheyarefinding.Attheend,wewillaskthequestionthat:
areyoustillhesitatetohavethisfullwithtranquility?
9.3.3MessageFormat:
ourmessageformatwillmainlyusecontrasttocatchtargetcustomersattention.Theactualstateofthem
arelivinginthenoisyandpollutedcitywithaveryprofitablebutmorestressfuljob.Thedreamstateof
themishaveahighqualitylifeandenjoytheirexquisitedrinksandfoodsinacozyplace.Afterthiskind
ofcontrast,theywillthinkourTeawayisthebridgetakingthemfromrealitystatetodreamstate,and
havethewillingtotry.

9.3.4Communicationchannel
wewillcombinebothpersonandnonpersoncommunicationtopromote,however,wewillmainlyuse
thechannelofnonpersonal.Forthepersonalchannel,wewilltrytoattracttheopinionleadersby
settingaMarketSkimmingPricefortheoneswhohavethelargestwillingtotry.Aftertheirtry,theywill
introduceTeawaytotheirfriendsorclients.Becauseofthehugerallyingpointoftheseopinionleaders,
ourproductscanbecameapopulartrendamongtheupperclassgroups.
Forthenonpersonalchannel,firstly,ourpublicrelationdepartmentwillarrangetheopening
ceremony,publicexhibitsandothereventstoshowourcanteenforthetargetcustomers.
Secondly,wewillusethetechnologytodesignouruniqueenvironmenttobuildthecozyatmospheres.

Thirdly,whichisalsothemostimportantpart,wewillusethemajormedia,includingGourmet
Magazines(somepositivecommentfromfamousfoodwriters),broadcastmedia(setadvertisingon
TV),displaymedia(largepostersonthewalloflargeshoppingmalls)andonlinemedia(Teawaywebsite
&someonlinesocialandsharingnetworks,likeWebo,whichisveryfamousinChina)toletmore
peopleknowusandcausemorepersonalcommunication.
Byallthesethreechannels,wecanfirstlyflowourmessagethetheopinionleaders,andthenfromthese
opinionleaderstoothers,justlikewhatwehavementionedbefore.
5.Integratedmarketingcommunicationstrategy
BasedonthecharacteristicsofTeaway,wemainlychoosethemasscommunicationmethod,
whichhasthreespecificways:advertising,salespromotion,andpublicrelations.
Atthebeginning,afterthelaunchoffirstTsuiWahTeaway,masspromotioncampaignwillbe
conductedtointroduceitandincreasethecustomerawareness.
Inhalfayearstime,CommercialsfocusingonthegreatexperienceofferedbyTeawaywillbe
shownonsomecarefullychosenTVprograms.Programsabouthighqualityfoodandstressreleasing
canbegreatcarriersofourmessage.Inaddition,moreandmorecitizensnowtakesubwaystoworkin
Shanghai.Featuredpostercanbepostedinthesubwaystation.Thegreatcontrastbetweenthenoisy
andbusystationandquietandpeacefulTeawaycanexpressthegreatfoodandatmosphereofTeaway
intensivelyandvividly.Theapproachofnewmediawillalsobeleveragedtoattracttheyoung
generation.Thecombinationofwebpage,facebookgroup,microblogandphoneappcanbeoneofthe
mostcostefficientwaytoraisesales.
Forthesecondhalfofthefirstyear,salespromotionwillbewidelyapplied.Discount,coupon,
premiumandavarietyofcreativewayswillbeused.Theaimistogetalargermarketshareby
attractingmorenewcustomersanddelivergoodcustomerexperience.
Forthesecondyear,themainpurposeistoincreasethecustomerloyaltyandpromotethe
specialexperienceofdiningatTeaway.Ontheonehand,agoodreputationcouldbebuildthroughthe
greatpublicrelations.Toreachthisgoal,theseniormanagementshouldbewillingtoacceptthe
interviewofmagazinesandnewspapertotellthestoryofthemselvesandTeaway.Theemployees
shouldworkhardandsmarttoserveeverycustomers.Teawayshouldalsotrytowinthetitlefor
food,serviceandenvironmentaswelltofurtherbuildthereputation.Ontheotherhand,a2ndround
salespromotionwillalsobeused.Forthistime,theprivilegewillbegiventotheloyalcustomers.VIP
andpurchasepointssystemwillbemadetocultivatethecustomerloyalty.
Sowithintwoyears,Teawayisexpectedtocontinuouslyattractnewcustomersandmaintaina
significantnumberofloyalcustomers.6.Budgetplanandcontingencyanalysis
Withthe700millioncapitalraisedintheIPO,TsuiWahwillnotfacecashinadequacywhen
carryingouttheplanwherelessthan50millioninitialinvestmentisneededandgoodcashmanagement
canbemaintained.
SothecrucialpointistoexaminetheprofitabilityofTeaway.Thefinancialforecastoftheoperationhas
suggestedthatTsuiWahTeawaycouldgeneratearound50millionprofitsintwoyearstime.
AnothersignificantadvantageofTeawayistheflexibility.TsuiWahTeawayandTsuiWahCha

ChaanTengarehighlyconvertibleandthecostincurredinredecorationandchangesinmenuanddishes
couldbesmall.Withagreatchance,TeawayisgoingtobeagreatsuccessandTsuiWahcantransform
moreChaChaanTengtoTeawaytocapturemoreprofits.Incasethereisafailure,TsuiWahcanstill
operateinthetraditionalwayofChaChaanTengtowaitforanotherchance.

Conclusion
Withtheambition,capital,capacityandreputation,TsuiWahhasalmosteverythingtocapture
greatfortuneinthepotentialmainlandmarket.Ourproducttailorstoneedofcitypeoplewhileitalso
deepenschinesecultureinthesociety,promotingrecognitionofasianarteventotourists.TsuiWah
Teawayisnotonlyashopthatcatersqualityenvironmentandgoods,butalsoresponsibletothesociety
inthepreventionoflightandnoisepollution.Webelieveoursuccesswillbearesultofenthusiasmsand
goodefforts.

Indust
ry
Averag
e

CO
GS

Rental
Expen
se

Wage
Expen
se

Other
Expen
se

Profit
Marg
in

Cha
Chaan
Teng

31%

18%

26%

11%

14%

Cafe

17%

26%

14%

20%

23%

Fast
food

23%

15%

17%

145

31%