Yeo Hiap Seng

Introduction

Founded in 1900, Yeo Hiap Seng started as a Soy sauce manufacturer in the district of China Fujian and has since expanded its product line to include canned food, culinary sauces and beverages (Yeo Hiap Seng Limited, n.d.a). Of these products, its Asian Drinks beverages are perhaps the most important of its line, including Chrysanthemum Tea, Winter Melon Tea and Soy Bean Milk. The company has since been involved in property development after a hostile takeover by Far East Organisation, led by its previous chairman Ng Teng Fong (Xiang, 2010). It has since launched numerous luxury property developments, including condominiums and landed properties, many of which situated along Bukit Timah road (Yeo Hiap Seng Limited, n.d.c).

The brand has widespread recognition in Singapore. It won the ‘Singapore Prestige Brand Award’ recently in 2015 (Yeo Hiap Seng Limited, n.d.b) for its brand equity among Singaporeans. In addition, the company has also won numerous awards for its business excellence including the ‘Singapore Productivity Award’ and ‘Food Excellence Safety Platinum Award’.

This report will look into the macro and industry environment to provide Yeo Hiap Seng’s management with four strategic recommendations. This report will only focus on the Food & Beverage business of Yeo Hiap Seng.

PESTEL Analysis

Political Analysis

Signing of paris agreement – In 2016, Singapore is among the 175 countries who have signed the Paris Agreement that seeks to reduce greenhouse gases emissions (Abdullah, 2016). The Singapore government subsequently introduced a Climate Action Plan, which involves numerous regulations and policies, to meet its targets of reducing greenhouse gas emissions by at least 16 per cent by 2020 and stabilise emissions by 2030 (Abdullah, 2016).

Economic Analysis

Slow economy growth forecasted – Singapore has experienced the weakest economy growth in 2016 at 1.8 per cent, since the global economic crisis in 2009 (xiang, 2017). This trend is expected to continue in 2017 as analysts have pointed at uncertainties involving global trade and China’s similar slowdown in growth as the main reasons. This trend is expected to influence consumers into becoming more price sensitive with products.

Social Analysis

Consumers increasingly conscious about healthy diet - Singaporeans are well informed consumers and are concerned with how healthy they are eating (Ng, 2016). This is helped by the numerous initiatives set up by the government agency, Health Promotion Board, to encourage people into adopting healthy eating habits (Euromonitor International, 2016). One such initiative is the “Healthier Choice” label that is presented to food products that meet the HPB stringent criteria for healthier food. The number of “Healthier Choice” food products has also increased over the years, from 300 in 2001 to more than 2500 in 2016 (Ng, 2016).