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RAMLY FOOD PROCESSING SDN

BHD
Ahmad Afif Muhamad Atiff1, Abdullah Izzuddin Abdul Hamid2, Amir Abdul Rahim3,
Abdul Rahman Ahmad Dahlan4
1,2,3,4
Kulliyyah of Information and Communication Technology, International Islamic University
Malaysia

Abstract: The purpose of this paper is to analyze Malaysia’s local huge frozen food company current
performance and propose a digital transformation business model for the company. Literature Reviews,
benchmarking, Business Model Canvas (BMC), 4 Lenses of Innovation, and Value Proposition Design
(VPD) have been used as the methodologies for this paper.

Index Terms: queue, QMS, 4 Lenses of Innovation, BMC, VPD, EM

I. INTRODUCTION

Fast food continued to grow in 2016 despite consumers showing cautious spending behavior.
Existing players continuously introduce new products and value set meals to attract price-
conscious consumers through various marketing campaigns to create brand awareness. Side
menus like desserts were launched to attract consumers [1]. For example, McDonald’s
introduced Cheesecake Delights and Hot Cakes Groovy Lime in November 2016 much to
consumer fanfare. QSR Stores, which operates KFC, is the leader in fast food and recorded a
42% value share in 2016. The company introduces ongoing new products and value set meals
supported by ongoing media advertisements through newspaper and television. However, our
local giant Malaysian based company who provide high quality fast food had not emerge as
one of great competitor to these foreign companies despite having operated in Malaysia for
almost 35 years.

II. BACKGROUND

Ramly Food Processing Sdn Bhd (doing business as Ramly) is a Malaysian frozen and fast
food company founded by Haji Ramly Mokni through Pemasaran Ramly Mokni Sdn Bhd.
The company produces burger patties, frankfurter, nuggets, meat ball, fried chicken, buns and
sauces like chilli and mayonnaise as well as operates burger stalls widely in Malaysia.

The company was founded by Haji Ramly Mokni in 1984, with the aim of developing a clean
and good-quality halal Western fast-food chain in Malaysia. Ramly started a business selling
burgers with his wife from street food stalls in 1979. While working as a butcher in a market,
he discovered that it is unknown whether most fresh-meat sources were halal or not, leading
to Ramly's decision to produce a halal-certified meat source for all Muslim consumers in
Malaysia.
III. PROBLEM STATEMENT

While other fast food companies are making great progress and venture into the new rapid
economic growth, Ramly Burger however seems to be stagnant and are not making any
significant profit. The company still rely on their traditional business model which to open
tender for small stall franchise across Malaysia. If Ramly fail to recognize its current position
in the market and made significant changes to harness the current business trend, they might
as well lose up in the run and worst, prone towards bankruptcy. Thus, it is believe that
making digital transformation and improvement to the current business model would
empower the company and even make it a huge multinational company in Asia.

IV. LITERATURE REVIEW

There are many other similar food franchises that are worth to be comparing about with
Ramly. The examples are Mcdonald's Corporation, Burger King and FoodPanda. Although
all the companies have about similar premises, but their business model are quite different
from each other.

The first things to look upon is the products of all the food franchises stated before.
Mcdonald's produce fast food products such as burgers (chicken, beef and fish), chicken
products, french fries, soft drinks, wraps, desserts and so on. The foods are all pre-made to be
served quickly for customers. In contrast with Mcdonald's, Ramly produces frozen foods such
as burger patties (chicken and beef), frankfurters, nuggets, meatballs (chicken and beef), fried
chicken and complimentary products like buns, sauces (chilli and tomato) and mayonnaise.
All items are available in majority of groceries, hypermarket and cold storage chains in
Malaysia. On the other hand, Foodpanda does not produce any food products at all. The firm
focused on its food delivering service, which give its customers many choices of foods from
local restaurants near them. Customers only have to place the order through the Foodpanda
mobile application and website, and Foodpanda will deliver it in front of their door house.

The revenue generated by these companies are also different. McDonald Corporation and
Burger King are focusing its business on their fast food restaurants, which their revenues
come from the rent, royalties and fees paid by the franchisees, as well as sales in company-
operated restaurants. While Ramly Group is focusing on its frozen foods products as well as
other complimentary food products as the primary business. Ramly also gain revenue from
the vendors which purchasing their license to operate a Ramly Burger stall. While the Ramly
Burger Restaurants are the newest venture which started in 2014, and has opened 8
restaurants since. The business model of Foodpanda is not similar to the formal two
businesses as the firm focused on its on-demand delivering service and does not own any
restaurants or food products at all. According to questionnaire asked in Quora, Foodpanda’s
revenue come from the delivery fees that they charge their customers. They also generate
their profit by earning commissions from the restaurants that they get their foods from, for
every online order. Other than that, they also make use of the ads in their ads as part of their
revenue model [2].

Talking about globalization, Mcdonald's franchise has reached many countries in the world,
starting in 1967 when the American company opened their first franchise in Canada. By the
late 1970s, Mcdonald's can be found in five out of seven continents in the world. [3]
Mcdonald is also noted for their effort to cater with the local taste in different countries, for
example only Mcdonald's’s spicy products can be found in Asian countries, while in
European and American there are hardly produce new menus with such spiciness. Mcdonald's
is very successful that their market share in 2009 outpacing other fast food franchises such as
KFC and Burger King by a large margin. [6] The comparison chart can be referred in
Figure3. Ramly Group has also gone global recently where they have been exporting the
frozen food products to Singapore, Thailand, Indonesia, Myanmar, Cambodia and
Bangladesh. Ramly also plan to expand the market to other Southeast Asian countries such as
Vietnam and Philippines while also eyeing the market in Middle East and East Asian
countries. [4] Foodpanda also has experienced globalization. As a food delivering service
originated from SIngapore which launched in 2012, they have expanded their coverage to 23
countries all around the globe. [5] As in Malaysia itself, Foodpanda has only covered their
networks of restaurants and delivery services in six regions, which are currently only
available in Kuala Lumpur, Penang, Petaling Jaya, Subang, Shah Alam and Cyberjaya.

Next, to compare the initiative taken by these businesses using Industry 4.0 technology
platform in order to transform, Mcdonald's might be the most progressive business to do so.
One of the aspect in Industry 4.0 is the automation of everything. CNBC reported that
Mcdonald's will upgrade it’s 2,500 restaurants to a new technology, which is the humanless
cashier but instead with a fully digital and automated ordering and self-serving kiosk. [7]
With the new technology which will be realised by Mcdonald's in the end of the year 2017,
customers won’t have to queue anymore. They will only need to order online beforehand or
to order at the designated machine and the orders will be finished and delivered much faster.
This way, it will give more values to the customers. Other business which has been affected
by the Fourth Industrial Revolution as well is FoodPanda. The idea of connecting all the
restaurants and customers over the Internet is revolutional. By doing this, FoodPanda is able
to fulfill the demand, satisfying the changes in customers tastes and at the same time
following the correct food handling procedure for safety measures. Ramly Burger has yet to
implement the Industry 4.0 in their business. The company might still be in the Industry 3.0
where all the food processing is using the computer and automation system with human
resources as well.
Figure 1 McDonalds’ Business Model Canvas

Figure 2 Foodpanda’s Business Model Canvas


Figure 3 Burger King’s Business Model Canvas

Figure 4 Comparison chart between Mcdonald's, Burger King and KFC in 2009
V. STRATEGY CANVAS

For Ramly Group to be able to compete with a larger food franchise, the company needs to
rethink and apply a new and improved methodology and approach for the transformation. It
has to happen now, because every other businesses are keep changing from day to days.
Digital trends and Industy 4.0 technology platform specifically has changed the world itself
for the past years.

Ramly has to realise the Opportunity that they have which would not be replaced by
whatever coming to their burger products which has been a staple to the Malaysians since
long ago. Malaysians preferred the local stall burger rather than the western burger at the
restaurant. Many believed that the taste of the classic street burgers has its unique taste which
are not the same as the premium burger at the restaurants, which are proven true by some of
the tourists that had tried the street burgers in Malaysia. To tackle this opportunity, Ramly
may need to start a delivery services of foods for customers. This can be done via the online
channel where customers will place their orders and the nearest Ramly Burger stall will
processes the order and deliver it in front of their door house. It can be done easily since the
Ramly Burger stall has opened nearly everywhere in every states in Malaysia.

The next step after Ramly has gone online, the things that needs to be revamp is the Digital
marketing which is very important to reach the customers. Ramly needs to reevaluate their
outdated website which has last been updated in 2009. The website will be used to promote
food menu, spread promotions and events to reach the customers. Ramly also may need to
invest in the development of their mobile application in order to reach a wider range of
customers since people in the modern days are always fast and they want things fast. The
mobile application will makes things faster and more convenient for the customers.

In order to make it easier for customers to reach the products anytime and anywhere, Ramly
Burger also has to offer Omni-channel in their business model. There are many platforms
that Ramly can cover, one of them is the brick-and-mortar which is the old food stalls as well
as the newly introduced Ramly Restaurants. For this platform, customers can simply walk-in
to order and get foods in one go. Another platform is the website. It would act as a guide for
customers to get more information about menu, prices, promotion and events. To order foods,
customers may place their order in the website itself. Some customers may prefer the good
old platform, which is through telephone call. This platform not only provide the ordering
food and delivering services, but it also provide customers services.

Talking about customer services, Ramly Burger also need to focus on their Customer
Insight. This is very important for Ramly to understand the customers in order to improve
their services. Ramly also need to create a new menu based on customers’ preferences and
current trends, just like McDonalds do in order to keep the menu fresh and prevent the
customers from tired with the old same menu. With this method, Ramly would also reaching
new customers as well as keeping the current customers loyal.
VI. INITIAL BUSINESS MODEL CANVAS

Figure 5 Initial Ramly Burger Business Model Canvas


Figure 6 Initial value proposition canvas for individual

Figure 7 Initial value proposition canvas for franchise


Figure 8 Initial value proposition canvas for event

Figure 9 Initial value proposition canvas for poor people


VII. ALTERNATIVES BUSINESS MODEL CANVAS

Key Partners Key Activities Value Customer Customer Segments


Proposition Relationships
Local and foreign Manufacture & Food stalls vendors
farmers (suppliers) selling food product Increase job Customer care
opportunities hotline services Frozen food retailers
Government agencies Warehousing & for food stalls
logistics vendors Low-middle income
Private Agro- families
industries Quality checking High
nutritional Young people
Local food vendors foods
Housewives
Frozen store retailers

Key Resources? Channels

Suppliers Frozen food stores

Physical warehouse Fast food stalls

Machines Website
Human resources (outdated)
Brand

Cost Structure Revenue Streams

Manufacturing cost Marketing Government subsidies


Shipping Direct sales
Annual maintenance Reseller sales

Figure 10 Alternative BMC for frozen food manufacturing


Figure 11 Food mart

VIII. VALIDATION OF INITIAL BUSINESS MODEL

QUESTIONNAIRE RESULT

As part of the information gathering for this research, the questionnaire is important to be
conducted, as to know the real problems from the real people concerning their difficulties
experienced about food services. The questionnaire prepared beforehand is mostly about the
preference of fast foods, availability of food in market, the on-demand food delivery services
and also about the affordability of the foods. The type of people that participated in this
questionnaire is students with minimal budget to spent on foods in their daily life. Over the
50 respondents, the results are as follows.

About the preferences of fast foods, most of the students choose Ramly Burger over
Mcdonald's, KFC, Burger King and A&W. The reason for which the outcomes are like so is
because burgers from Ramly stalls are much cheaper and the stalls are also abundant and
reachable everywhere, even in campus itself. For the occasional reason, such as outing in the
weekend, the students preferred to try other fast foods such as Mcdonald's and KFC since the
restaurants are often introduced many new menu and varieties compared to Ramly burger
stalls. But in the end the Ramly burger still stapled in the heart of students.
Figure 12 Preferred fast food choices

About the on-demand food delivery services, many of the respondents choose Domino
Pizza’s and Pizza Hut over the likes of KFC, Mcdonald's and FoodPanda. The reason why the
pizza’s delivery is popular is because the affordability and coupon reward offered by the
restaurants, as well as the time it being delivered as well without have to wait long. While the
reason the FoodPanda only got a few responses is because the brand is still new for most of
the students. The prices of foods are also high considering that FoodPanda only delivering
premium foods from top restaurants.

Figure 13 Preferred food delivery services comparison


Another finding also found out that in suggestion segment, many of the respondents hope that
Ramly burger will do the delivery service in the future as in-demands like many other similar
businesses. It is because it will be a lot easier to get burgers from Ramly stalls without going
out of the room at the night so that the students will be able to focus on studying.

X. CONCEPTUAL SOLUTION

ENHANCEMENT BUSINESS MODEL CANVAS

Key Partners Key Activities Value Customer Customer Segments


Proposition Relationships
Local and foreign Manufacture & selling Food stalls vendors
farmers (suppliers) food product Increase job Customer care
opportunities for hotline services Frozen food retailers
Warehousing & food stalls
Government agencies logistics vendors
Automated Low-middle income
Private Agro- Quality checking Burger on- families
industries demand
Platform development
Young people
Cash free order
Local food vendors Stall owner onboarding
Easy to order Housewives
Frozen store retailers
Short waiting On-the-go people
Delivery man Key Resources? time Channels

Suppliers No queue
Frozen food stores
Physical warehouse Fast food stalls
Machines High nutritional
Banner
Human resources foods
Mobile apps
Brand
Social media
Ramly application marketing
platform
Website

Cost Structure Revenue Streams


Manufacturing cost Sales & Marketing
Shipping Commission payment Government subsidies
Platform development Delivery cost Food stalls licensing fees
Annual maintenance Platform maintenance Direct sales Reseller sales

Figure 13 Enhanced BMC


XI ENHANCEMENT VPD

Figure 14 Frozen food manufacturing VPC

Figure shows the value proposition canvas for the frozen food manufacturing segment. In this
segment, customers always experienced pains because of the popular products/stocks always
run out in the store. Example of products that are fast selling are the chicken/beef burger
patties, chicken sausages and chicken/beef mashed meats. Another reason for the frequent out
of stocks of these products is because the fast food vendors always buy these products in
bulk, which resulted the normal customers to not able to buy. To overcome this problem,
Ramly Food Manufacturers must surveys the market, identify the critical products and
increase the manufacturing of the products. Second pain is that there are very few frozen food
outlets in rural town, so customers from there need to go to the urban city’s mall and market
to get the products. In order to overcome this problem, Ramly need to expand their market in
rural town and in local hawker stalls as well.
CONCLUSIONS

In order to transform the business of Ramly Burger, the company has to embrace the fast
changes in the current trend in order to compete with other similar businesses such as
Mcdonald's, Burger King and FoodPanda. The current trend also demanded that all the
businesses to enter the Industry 4.0 technology platform in order to provide high quality
service with the least cost while achieving as much performance as possible to increase the
profits. Ramly Burger is an established business of serving people’s favourite burgers and
frozen foods in Malaysia for years, but the company has much greater opportunities to
transform further which of course will satisfy the customers better.
REFERENCES

[1] http://www.euromonitor.com/fast-food-in-malaysia/report/ Assesed on 17 October 2017


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AUTHORS

First Author – Ahmad Afif Muhamad Atiff, Bachelor of Information Technology, Kulliyyah of Information
and Communication Technology, International Islamic University Malaysia, afifatiff94@gmail.com

Second Author - Abdullah Izzuddin Abdul Hamid, Bachelor of Information Technology, Kulliyyah of
Information and Communication Technology, International Islamic University Malaysia,
abdullahizzuddin94@gmail.com

Third Author – Amir Abdul Rahim, Bachelor of Information Technology, Kulliyyah of Information and
Communication Technology, International Islamic University Malaysia, amerrahim94@gmail.com

Correspondence Author – Abdul Rahman Ahmad Dahlan, arad@iium.edu.my, 019-2202032