KOOLKES SENDIRIAN BERHAD: How Cool Can The Fridge

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Koolkes Sdn Bhd: How Cool Can the Fridge Be?“Thank God that despite the economic crisis, there is stillpolitical stability in this country and this would allow thefood retail industry to ride through the recession and perhaps,experience a minimal growth,” commented Mr. P. K. Gong.The European hypermarket operators such as Carrefour, Makro, Royal Ahold,Continent and Casino were all moving into Asia. In Malaysia, Carrefour and Makrowere interested in establishing new outlets. Among the factors that influenced thisventure were low cost of start-up operations (i.e. property value had gone downin price), availability of cheap labour, a large and growing population that wouldprovide a potentially attractive market, appreciation of the foreign currencies overthe Asian currencies and no restriction on total ownership of their business if theywould bring in funds and invest in the host country. However, the Philippines wasnot in the list as regulations forbade foreigners to set up stores so as to supportand protect their own companies from strong competition from foreign ownedcompanies.“The population growth rate in Malaysia and several otherASEAN countries is about 2.5% per year. This provides a goodprospect for the food retail industry and companies like ours,”Mr. P. K. Gong commented to a customer.The leading British food retailer, Tesco had taken advantage of opportunitiescreated by the Asian economic crisis by buying into one of Thailand’s keyhypermarket chains. The deal with Lotus encompassing 13 hypermarkets, wouldnot have been possible under normal economic conditions. Tesco planned todouble the number of Lotus stores in the next four years. The deal also allowedTesco to enter other Asian markets including China where there were already 2Lotus superstores with 3 others scheduled to be opened in 2004. Lotus planned toopen 50 more Lotus hypermarkets in China over the next 10 years.Carrefour had 24 hypermarkets in Asia with new openings in South Korea,Thailand, Hong Kong and Malaysia. Taiwan was Carrefour’s first Asian marketwhen it entered the region in the late 80’s and had 18 outlets opened to date.Worldwide, the Carrefour hypermarkets numbered 275 (179 in Europe, 72 inAmerica and 24 in Asia).The retail industry in Indonesia, after the devastating rioting and looting inmid May 2004, with 43 stores burned to the ground and 53 stores looted anddamaged, suffered an estimated loss of US$ 413 million. The industry would takeseveral years to be restored.159
Asian Journal of Case Research (AJCR)EPILOGUE:Having had the opportunity to analyse the industry and the national environment,Mr. P. K. Gong needed to call some of his senior staff to gather some ideas so thathe will have some basis for what he would present in the boardroom, especiallywith the types of analysis which the board members would like to see before theycome up with some strategic decisions. He needed to call them by tomorrow asthere was only four days before the board meeting.APPENDIX AList of Products Sold and The Brand Names.The products offered by KoolKes were mainly refrigerated display showcase equipmentsuch as:i. Multideck Wall Chiller / Freezer display Showcaseii. Island Chiller /Freezer Display Showcaseiii. Service Counter Display Showcaseiv. Self-contained Chiller CasesThe others were evaporators, compressors and spare parts of the refrigeration system.The product brand names were:i. Sanyo - Japan (Exclusive agency products), showcaseii. Costan - Italy (Exclusive agency products), showcaseiii. New Mc Air - Local supplier ( Free market ), evaporatorsiv. DWM Coupeland - Germany ( Free market ), compressorsv. Electrolux - Sweden, showcasevi. Hussman - USA, showcasevii. Bonnet Neve - European (France), showcaseviii. Linde - European (Germany), showcaseix. Fukushima - Japan, mixedx. Nakano - Japan, showcasexi. Arneg - Italy, showcasexii. Crosbanc - Italy, showcasexiii. Kohxa - Spain, showcase160
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KOOLKES SENDIRIAN BERHAD: How Cool Can The Fridge

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