Consultancy Project 1 Final

A) Summary
FUJI BAKERY SUPPLIES (M) SDN. BHD. was founded by Mr. Tan Hook Chuan in
1997 as a town-based bakery shop which later on relocated to a modern new factory
plant based in Puncak Alam, Selangor in 2008. This relocation and upgrade allows
Fuji Bakery Supplies automation development hence enhancing operation in fast,
efficient and effective in a strategic location. As of 2019, they are producing over 100
products to over 5,000 outlets across Peninsular Malaysia and Singapore. Swiss roll,
baguettes, sliced cakes are amongst the vast variety of production by Fuji Bakery
Supplies.
B) Analysis
Resource Based View
Resource-based view is an analysis tool, which allows firms to fully utilize their
resources in the most efficient manner to gain competitive advantage. (Andersén,
2010) The main tangible assets of Fuji Bakery include workers and machinery
.Although the production of the organization is not fully automated, it allows them
flexibility of producing more unique products as compared to a fully automated
machine that can produce a singular type of product. However, this heavily relies on
labour as it is required for more workers to be stationed around the machine and
heavily dependent of the efficiency of workers. With the nature of manufacturing
industry of high employee turnover rate, this will present as an obstacle for Fuji
Bakery (Sleger, 2019). The intangible asset of Fuji Bakery would be their brand
reputation built since 1997 and their ability to produce a vast variety of products with
over 200 unique products. However, if the labour issue is not resolved, they will be at
risk of cutting down on products and tarnishing their brand image.
Porter’s 5 Forces
Figure 1 Porter’s Five Forces (Source: https://thecimastudent.com/)
I) Industry Rivalry
There is a moderate rivalry among the bakery-manufacturing sector in Malaysia. With
the likes of Massimo Bakery and Gardenia in the market, Fuji Bakery is constantly
diversifying products to capture market share.
II) Bargaining power of suppliers

The main raw material for bakery manufacturers is flour hence; Fuji Bakery does not
heavily rely on only one supplier. They have multiple suppliers as mass supplies are
needed each day for production. However, suppliers might have high bargaining
power in certain circumstances when high quantity is needed urgently (Tan, 2019).
III) Bargaining power of buyers - retailers

The client background of Fuji Bakery is mainly grocery outlets and retailers.
Customers have a low bargaining power as the prices given by Fuji Bakery are at a
very low price. Retailers are also allowed a fair amount of price mark-up when selling
the items.
IV) Threat of substitute
There is a high threat of substitute for Fuji Bakery; consumers can easily change their
preference of taste and brands of bakery products. This directly affects the sales of
retailers and in turn lowering orders on certain items from Fuji Bakery.
V) Threat of entry
There is a low threat of entry in the bakery industry as the capital is high for new
entrants. According to Mr. Tan, there is a high set up cost for a bakery manufacturing
companies, as it requires plant, machinery and delivery truck, which would need an
investment of RM200million (The Star Online, 2017).
SWOT analysis
Strength
Fuji Bakery has heavily invested in R&D to keep up to date of the demand of
products in the market and finding ways and machinery to produce them in the most
efficient manner. Their ability to produce vast variety of products and selling at a low
cost provides them with a competitive advantage.
Weakness
The biggest weakness for Fuji Bakery is their labour issue, inefficiency and high
turnover rate in staff heavily affects their productivity, which directly affects sales and
revenue. Long hours and repetitive work under hot working environment is the direct
cause for this issue.
Opportunity
As previously mentioned, the manufacturing industry relies heavily on labour. Fuji
Bakery can seize the opportunity of retaining workers through restructuring
management style; offering them incentives to boost performance and upgrading their
factory facilities allowing hard labourers to work in a more comfortable environment.
This will in turn, retain skilled workers and able to attract more new workers at the
same time.
Threats
Fuji Bakery relies heavily on labour for production and especially on foreign workers.
Malaysia’s strict foreign worker policy further worsen the company’s staffing issue,
with plans to cut down as many as 130,000 foreign worker (mainly low-skilled
workers) within 5 years, this will heavily impact Fuji Bakery’s when there is
restriction on employing foreign workers (Bloomberg, 2019)
C) Recommendation
The demand of labour is high in Fuji Bakery, hence retaining trained and skilled
workers is vital for the organization. It is identified that long, repetitive work and hot
working environment is the main cause of high worker turn over rate. Employee
recognition and incentive base reward can be deployed to solve this issue.
Recognition such as best employee of the month and higher bonus in monetary
reward can encourage workers to stay and work harder all whilst attracting new
workers (Volper, 2019). Upgrading the factory facility would then provide a more
comfortable work environment is also key to solving high employee turnover rate.
D) Conclusion
In conclusion, the result of the analysis tool is constant with the labour issue being the
most crucial challenge in the organization. There must be a change in the
management structure and upgrade in facility in order to retain workers and attracting
new work force in order to stay competitive in the industry. More analysis and
solutions will be provided in the later part of this report.
References:
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A) Summary

Figure 1 Porter’s Five Forces (Source: https://thecimastudent.com/)

II) Bargaining power of suppliers

III) Bargaining power of buyers - retailers

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