Question

Founded in 1968, Café de Coral Holdings ( TRA ) is one of the largest Chinese fast food restaurant group in Hong Kong and in the world. It owns and operates quick service restaurants (e.g. Café de Coral, Super Super), casual dining chains (e.g. The Spaghetti House, Oliver's Super Sandwiches, Shanghai Lao Lao), institutional catering (e.g. Asia Pacific Catering, Luncheon Star) and others. As of September 2019, Café de Coral Group operates 368 outlets in Hong Kong and 107 outlets in Mainland China. With its corporate motto of "A Hundred Points of Excellence" (100))", Café de Coral Group continually strives for excellence and staying ahead in a rapidly changing world, focusing on uncompromising standards when it comes to product quality, creative innovation and service excellence. Since its establishment, the Group has been through transformations which continuously lead to multiple achievements in performance and net asset value. For example, since the 1980's Café de Coral Group has consistently recognized the value of a strong Central Food Processing Centre which enables a streamlined standardization of food quality and ensures total control over an ever-increasing volume and range of products and ingredients. Using state-of-the-art technologies, much of the food sold in restaurants is portioned and processed in a main facility where produce, ingredients and packaging materials undergo strict hygiene and safety checks on arrival, before processing and distribution to individual restaurants. In 2013, a significant investment was made into a 140,000-square foot plant located in Tai Po that is equipped with advanced facilities to enhance the control of food quality and overall productivity. Café de Coral Group has also recognized the potential in the Greater Bay Area. In striving to "become the best-loved and most competitive catering group in Greater China with leading brands across all major market sectors", Café de Coral Group acquired ScanFoods as a strategic step in integrating food distribution and manufacturing in Greater China. One of Hong Kong's leading processed meat suppliers, Scan Foods owns a 40,000-square foot production base in Dongguan. From here, it processes and distributes ham, sausages and bacon products to institutional customers all over Hong Kong and Mainland China. Furthermore, Café de Coral continued to leverage their proven business platform and operations by opening a Central Food Processing Centre in Guangzhou in 2011. In the latest interim report by Café de Coral for the six months ended on September 30th of 2019, it was noted that the Southern China fast food business performed well in the first half of the fiscal year. Revenue increased 9.6% to RMB516.0 million, and the business experienced a 6% rise in same store sales growth, driven by enhanced product quality, successful marketing and the continual growth of 020 take-away services. The group also invested in store renovation to further enhance the brand image: 6 stores were renovated in the first 6 months, with a target of 14 old stores to be re-imaged within the year.

Answer 1

Cafe de Coral Holdings, the world's largest Chinese fast-food chain, plans to expand rapidly into the mainland by opening one restaurant there every five weeks for the next three years

Café de Coral has attained “true international stature with the group’s restaurants branching out into overseas and the larger China market”. The first offshore Café de Coral branch has been formed in Macau since 1992. Other branches are successfully established in the southern cities of Mainland China as well as in Guangzhou.

The product positioning of Café de Coral in Mainland China rests primarily in the up-market menu range of sizzling steak and spring chicken dinner sets which appeal to the prestige driven local preference for an up-market western restaurant experience.

The development of Café de Coral in Mainland China is concentrated mainly in the rich Kwangtung provinces. Branches are distributed at major special economic zones and coastal cities of Shenzhen, Zhuhai and Guangzhou, and regional town centres of Foshan and Jiangmen.

Café de Coral (China) has a total staff number around one thousand, of which 96 percent is local staff from Mainland China. Potential local staffs with outstanding performance have the opportunity to attend training at Café de Coral Management Academy to take up managerial positions. Café de Coral has become the synonymy of quality restaurant management in China. Café de Coral has long been a household name among the Chinese population given its Hong Kong television advertisements are well covered throughout the southern China provinces. As such, any new product launch or premium redemption has always become an instant success.

Café de Coral has developed an amicable working relationship with the local China government officials. The adopted mode of co-operative joint venture and wholly foreign-owned enterprise has provided the group the necessary management freedom and total management control needed for restaurant operations in China. Owing to the uprising Chinese economy, it is part of the group’s strategic plan to steadily develop the China market to tap the vast potential which this market can offer.