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This assignment provides a detailed account for a contemporary Singaporean Entrepreneurship that has occurred within the previous two decades and the chronicle of successes and failures of the entrepreneur being identified and discussed. Discussion and analysis was derived with the support of the internet as a tool for secondary research. This assignment also revealed the important elements of managing rapid growth and overcoming obstacles in an entrepreneurial environment.
For the reader's information, the group will be discussing and analysing on a prominent Singapore entrepreneur, Mr Ip Yiu Tung (Ip), group chairman and chief executive officer (CEO) of restaurant chain Crystal Jade Culinary Concepts Holding. With regards to the research findings and information consolidated, the group has related some school of entrepreneurial thoughts into this assignment as well. The group has recognised and evaluate the creative approach used to identify and develop the idea.
Lastly, in this assignment, the group will also talk about the legacy of Entrepreneur left to society as well as whether there is an opportunity for the idea to be further exploited in the future.
Managing Rapid Growth
In general, rapid growth is a process that involves a quick boost on the sales, volume, people and costs of a company on a relatively short period of time. These features, when they take place suddenly, it can bear certain side effects that risk the profitability and future of the company. Rapid growth reflects on the solidity and the atmosphere of the company. (Wickham, P. Strategic Entrepreneurship. England. 1998).
As for managing rapid growth of a business, it usually involves thorough planning, reinforcement of the objectives and an organisational-wide operation. During this period of time, decision-making and managing skills becomes very vital when the growth becomes fast. Entrepreneur's ability to recognise the indications and to commence the medication on time is an ability of an effective management skill.
There are several aspects that an entrepreneur should be attentive to in terms of managing rapid growth in an entrepreneurial environment because the environment of the business changes very quickly in today's business world. Based on research done, the group has recognized a few elements that could be valuable in managing the rapid growth of the business. Elements of managing rapid growth are as follows:
Know the clients that is right for your business
Entrepreneurs should be really clear about their clients in order to be selective when there are numerous business opportunities and when time is limited to accept them all. By understanding and knowing the client that are important to the business survival, entrepreneur could easily identify them without going through the hassle of filtering clients and attracting them.
Have a specialty for which you are known
Although it is always recommended that entrepreneur should diverse their business into other areas that are related to their core business so that it could support the core business in certain ways. However, when the business is going through the rapid growth stage, entrepreneur should specialise so that will be more efficient an effective in what they are doing. Hence, being able to service more clients with lesser time needed.
Off load routine tasks to others
As business is growing rapidly, entrepreneurs should be focusing more on the strategic part of the business instead of the daily routine administrative tasks. In order to off load those administrative tasks, entrepreneurs can hire someone who does the work efficiently and pays a certain amount of salary. Example, a company secretary could probably perform services such as bookkeeping, accounting, preparing income statement, balance sheet, income tax returns etc.
Provide GEMS service
Although the business is growing, not every client are the entrepreneur's ideal clients. Otherwise, it could be the entrepreneur's ideal client but they are unable to afford the fee that the entrepreneur will be charging. Thus, the variation occurs. If that is the case, entrepreneur could Go-the-Extra-Mile for service (GEMS) by referring the client to other business owners whom the entrepreneur can refer. This may generate an impression to the client that entrepreneur is not only concerning about making profit but also spare a though for the client's needs even though it is not the ideal client.
Success always comes after obstacles and is dependent on growth. In order to be successful, entrepreneurs have to be able to overcome all kinds of obstacles that they encountered. A good business strategy is crucial for a business success. Hence, a successful entrepreneur makes use of their inadequacy to develop successful business strategies. Past failures will serve as an instrument to assist the entrepreneur in discovering what works well and what should be avoided in the future.
Discovering ways to improve products or services
Similar products, service and even business concepts can be copied by competitors in any industry. In order for entrepreneurs to overcome such obstacle, entrepreneurs have to discover ways to improve their products or services to meet the changing needs of their clients. Hence, to achieve growth, business strategies have to be improving in an effort to lead the business to the next stage of success.
Constantly seeking opportunity
An entrepreneur knows that opportunity does not come knocking on the door. Entrepreneurs have to actively pursue their dreams. In order to improve the products or services, entrepreneurs have to actively seek new opportunities that offer the potential for growth and taking the business to the higher level of success. Recognising their weaknesses and seek ways to transform the weaknesses into productive new ways to achieve success.
Factors Influencing Entrepreneurial Activity
Private-sector entrepreneurs had contributed to Singapore's pre-independence development. After the 1985 recession, an economic committee was established and it identified local entrepreneurship as being a vital element for Singapore's sustained growth. (Ministry of Trade and Industry, 1985) This led to the first Small and Medium-Sized Enterprise (SME) Master Plan in 1989 that introduced measures and assistance schemes and an entrepreneurial infrastructure (Tan, Tan & Young, 2000). The recession in 2001, has also led to a renewed interest in and urgency to encourage entrepreneurship in Singapore. (Wee Liang Tan, 2002)
Entrepreneurs can be described as venturesome individuals who stimulate economic progress by finding new and better ways of doing things. Joseph Schumpeter had called entrepreneurs as the innovators who drive the "creative-destructive" process of capitalism. Peter Drucker sees entrepreneurs as exploiting the opportunities that change creates. That an entrepreneur always searches for change, responds to it, and exploits it as an opportunity.
Back in 1992, business at the Crystal Jade restaurant in Cairnhill Hotel was losing money and the eatery was close to shutting down. Mr Ip Yiu Tung, then a customer, couldn't bear the thought of one of his favourite Chinese eateries closing. "I never imagined I would own a restaurant, but the chance came and I grabbed it," he said. So he saved it by investing S$2 million in the business and became the restaurant's single largest shareholder.
Ip had grasped this opportunity instead of seeing this as a risk. In 1992, he became chairman and chief executive officer of Crystal Jade Culinary Concepts Holding.
Singapore's socio-cultural environment favors entrepreneurship. Being recognised as a business owner gives a high social status. People look up to those running a business. Society also places high value on innovativeness and successful entrepreneurs are respected; the social status of entrepreneurs and the value of innovativeness were two socio-cultural factors that influence this desirability.
"Just dedicate yourself to the job and encourage and inspire your staff to work for you," says the businessman who shuttles between China and Singapore. "I love the business. Crystal Jade is a restaurant that customers have come to respect and appreciate, and it's very rewarding being a part of It." said Ip (Asiaone, 2008)
Singapore has a pro-business environment. In Singapore, there is a competitive environment where there is no protection accorded to small businesses and SMEs, who have to compete with large corporations. (Wee Liang Tan, 2002)
Singapore has a growing F&B sector with a turnover of about S$ 3.6 billion annually. It contributes about 1% to Singapore's GDP and it is a vital component of the tourism industry.
The F&B sector is characterized by low entry barrier, high risk; high business cost primarily in rental, labour and materials and high churns of concepts. In terms of consumer spending, Singaporeans are eating out more than at home. According to a recent survey conducted by Sydney-based Research Company, BIS Shrapnel, an average Singaporean spent some $1,900 at hawker stalls, cafes and restaurants last year. Eating out has become a lifestyle amongst Singaporeans. Singapore has also been ranked alongside Hong Kong and Australia as one of the three major eating capitals in the Asia Pacific region. (Ministry of Trade and Industry, 2010)
To stay competitive, Ip frequently introduces new dining concepts to the group's eateries, such as opening a Western-style tapas restaurant, A Presto, in Jakarta. After Crystal Jade closed the restaurant at Cairnhill Hotel, it opened two new outlets; Crystal Jade Kitchen and Crystal Jade Palace which quickly became famous for quality cuisine and good service, and in 1998 the group expanded beyond its traditional Cantonese cuisine, opening Crystal Jade Shanghai Restaurant, Crystal Jade Golden Palace (Teochew cuisine) and Hu Cui (Shanghainese cuisine).
The casual dining concept of Crystal Jade Kitchen, featuring simpler décor and a more affordable menu proved to be popular, and by 2003 the group had 10 Kitchen outlets and five La Mian Xiao Long Bao eateries serving handmade noodles and dumplings. (Alvin Chua, 2010)
Access to Financing
Since the Asian financial crisis of 1997-1998, Singapore has liberalised its financial sector, allowing foreign competitors to compete with domestic banks. The liberalisation of this sector has forced the largest banks to become more proactive and accessible to their customers. Capital is readily available through bank credit, equity sales and corporate debt issues, but SMEs and start-ups still complain of inadequate access to financing. (Wee Liang Tan, 2002)
At Crystal Jade, expansion is largely funded internally. While the company utilises banking credit lines, it is keen to avoid significant debt. Ip has advocated a philosophy of expanding when market conditions are right rather than for the sake of expansion. Thus, Ip has not publicly listed Crystal Jade or accepted investment from private equity sources.
Impact of Globalisation on SMEs
Singapore has embraced free trade and globalisation, and this decision has obvious implications for its local enterprises.
Under Ip's executive direction, a training division for staff was set up in Singapore, and further diversification of the company's dining concepts followed. The group grew to over 80 restaurants and eateries in nine countries, with a turnover of over S$240 million in 2009. The group had overseas outlets, in Shanghai, Hangzhou, Hong Kong, Ho Chi Minh City, Jakarta, Seoul, Tokyo, Bangkok and Kuala Lumpur.
In 2001, the group introduced Crystal Jade Cakery, a bakery featuring Hong Kong and Taiwanese-style bread and cakes. The bakery evolved into the Crystal Jade My Bread chain, and is the only facet of the group's businesses that is available for franchising. (Alvin Chua, 2010)
Government Support/Promotion of Entrepreneurship
With its two SME master plans, Singapore has a spectrum of some 63 assistance schemes to assist local enterprises. The first SME Master Plan led to the formation of a multi-agency network which is responsible for one particular aspect of the SMEs' needs. International Enterprise Singapore (IE Singapore) is the statutory board responsible for taking SMEs overseas with an array of schemes and tax incentives. SPRING, provides a first-stop for all SMEs, which are then directed to the relevant agencies. In addition to the government agencies, there are private sector institutions, tertiary institutions and non-governmental organisations that are in the multi-agency network to which SMEs have access.
The government has realized that in order to encourage entrepreneurship, business failure should not be stigmatized. The bankruptcy law was amended in 1995; the Official Assignee was accorded the discretion to permit qualifying bankrupts to serve as a director or manager of the company or to run the business. In moving the amendment, the Minister of State for Law noted, "the amendments will help to create a climate more conducive to entrepreneurship and responsible risk-taking while preserving commercial morality and financial discipline."
There has been increased public awareness of entrepreneurs as role-models. There are television programs on the making of entrepreneurs. There also is an award to recognize the entrepreneurs who emerged from the ashes of failure to succeed, aptly named the Phoenix Award. The most significant signal of encouragement came from Senior Minister, Lee Kuan Yew in February 2002 when he delivered the Singapore Management University Ho Rih Hwa lecture, setting the tone for efforts to change the environment and mindsets for entrepreneurship. (Wee Liang Tan, 2002)
In Crystal Jade's case, it has won various awards over the years and Ip also received the 2009 Rotary-ASME Entrepreneur of the Year award which serves to acknowledge outstanding local entrepreneurs who demonstrate excellence and drive in their field of business, while making social contribution a significant part of their business philosophy.
Identifying and Describing the Entrepreneur
There has been a general misconception that Crystal Jade is a Hong Kong-based chain of restaurants that specialise in Shanghainese and Cantonese cuisine, and are famous for their steaming hot baskets of xiao long bao (soup-filled dumpling) and la mian (hand-pulled noodles). (thestar online, 2008) It is actually a Singaporean brand that was acquired by a Hong Kong native and food lover, Ip Yiu Tung. Coincidentally, Crystal Jade was owned by his brother-in-law, Alfred Leung. When he learnt that the restaurant was in financial trouble and about to close, entrepreneur Ip Yiu Tung decided to save it and invested S$2 million in Crystal Jade.
Crystal Jade started in Singapore, although it was by 3 HK-born brothers: Alfred, Vincent & Jimmy Leung. They opened the original Crystal Jade restaurant at Cairnhill Hotel in 1992, offering undoubtedly the most authentic Hong Kong cuisine in Singapore at the time. In the following years, Alfred was credited as the mastermind behind the group's vast expansion, diversified concept lines and money-spinning success.
When Alfred left the group in 2004, Ip, who was born to parents who owned a small business, took over the operations of the Crystal Jade. Ip was already an established entrepreneur. He had spent many years managing a clock and watch manufacturing company before branching into making pianos in Shanghai.
Ip prefers to leave the finer details to his senior management and makes macro business decisions. However, he is thoroughly involved in the concept, design of the restaurant and the menu. Analytical and soft-spoken, he also believes 'Engaging the media is good exposure for the brand.' He also finds the food and beverage business "more enjoyable because of its fast pace and competitiveness, and once a restaurant becomes successful it becomes a huge pride and joy." (thestar online, 2008). Ip's go-getter attitude, business skills and drive in building the restaurant chain helped him clinch the 2009 Rotary-Association of Small and Medium Enterprises (ASME) Entrepreneur of the Year award.
Mr Ip, 61, now oversees over 80 Crystal Jade outlets across Asia. They are spread out across Singapore, Hong Kong, Beijing, Shanghai, Hangzhou, Tokyo, Seoul, Bangkok, Ho Chi Minh City, Jakarta and Kuala Lumpur. The outlets offer everything from high-end Cantonese and Teochew cuisine to affordable noodles, porridge and dim sum.
Evaluating Entrepreneur with Reference to School of Entrepreneurial Thought
Entrepreneurship contains various approaches, which is able to increase one's understanding of the business. Kuratko, D. (2008) stated that theory development is essential to be considered in order to understand the nature of entrepreneurship. Entrepreneurial school of thoughts can be separated into two main sections; a "Macro" view or a "Micro" view and these are directed to the nature of entrepreneurship. The group has further breakdown these two views into six distinct schools of thoughts, which three are within each entrepreneurial view. Below diagram illustrates the breakdown of the two views mentioned above.
Overview of School of Thoughts Approach
Environmental School of Thought
Financial/Capital School of Thought
Displacement School of Thought
Entrepreneurial Trait School of Thought
Venture Opportunity School of Thought
Strategic Formulation School of Thought
The Macro View
In general, the macro view of entrepreneurship reviews factors that narrate the success or failure in current entrepreneurial ventures. It displays external process or environment that is beyond the control of the individual entrepreneur, which are part of the external locus of control. The macro view is basically broken down into three schools of entrepreneurial thought: 1) the environmental school of thought, 2) the financial/capital school of thoughts and 3) the displacement school of thought.
The Environment School of Thought
The Environment School of Thought emphasize that the external environment factors that affect the entrepreneur's lifestyles. A social political environment framework can be either positive or negative force, which directly influence the entrepreneurial desire. Social group may also be another environmental factor that often to be another influence to the development of the entrepreneur. Another factor that can trigger an individual to become entrepreneur is from family atmosphere, relatives and friends.
The Financial/Capital School of Thought
The Financial/Capital School of Thought depends strongly on the capital seeking process. The main focus for the entrepreneur career is based on a financial management point of view. The planting of seed and growth capital is the one of the important focus point for the entrepreneur. The business capital process is the most critical and important to an entrepreneur's development. (VENTUREDIG, 2009) further states that entrepreneurs must know how to grow it, and knows how to manage it.
The Displacement School of Thought
The Displacement School of Thought looks at the negative side in which the person feels out of place, displaced or being "left-out" from a group. For instances that the group of friends are career successful in the corporate world and the "displaced" individual might have another vision of pursuing an entrepreneurial venture out of his or her own motivations to succeed. Ronstadt. R. (1984) has noted, individuals will not pursue a venture unless they are prevented or displaced from doing other activities. There are three major types of displacement that further illustrate this school of thought are: (1) Political displacement, (2) Cultural displacement and (3) Economic displacement.
The Micro View
The micro view of entrepreneurship discusses the factors, which are part of the internal locus of control, which is the reverse of the macro view. Having to say this, the entrepreneur has the power to control, to steer the direction of venture or make changes to the business plan. This approach is again broken down into various definitions and school of thoughts: 1) the entrepreneurial trait theory, 2) the venture opportunity theory, and 3) the strategic formulation theory.
The Entrepreneurial Trait School of Thought
The Entrepreneurial Trait School of Thought is identifying traits common that are to successful entrepreneurs. Kuratko, D. (2008) states that study has shown that successful people, who copied similar characteristics, would increase success opportunities for them. They usually demonstrate achievement, creativity, determination, and technical knowledge in themselves. Family development and educational development may also influence their success.
However, there are different views against educational development of entrepreneur where it may either increase or slow down the creative and challenging nature of entrepreneur. In addition, family nurturing and support within the home environment may also restrict creatively development. It is a belief that certain traits established early in life will eventually lead to entrepreneurial success.
The Venture Opportunity School of Thought
The Venture Opportunity School of Thought focuses on the opportunity position of venture development. It is almost a mixture of macro and micro school of thoughts. The important and interesting area in this school of thought is the seeking of idea sources, the development of concept and the implementation of venture opportunities. Additionally, creativity and market awareness are seen as essential as well. It is stated that an entrepreneur is able to develop the right idea at the right time for the right market is the critical path to his or her success. New opportunities will occur that steer entrepreneurs to different directions. Seizing these opportunities when it appears and to implement the essential plan for action are very important.
The Strategic Formulation School of Thought
George Steiner (1979) once stated, "Strategic planning is inextricably interwoven into the entire fabric of management; it is not something separate and distinct from the process of management." The strategic formulation school of thought approach to entrepreneurial theory emphasises the planning process in successful venture development, mentioned by Marjorie A. (1993).
Ronstadt. R. (1984) mentioned that there is one way to view strategic formulation is as a leveraging of unique elements. The elements are either being unique markets, unique resources, unique people or unique products that are identified into successful venture formations. Michael A. (2001) concludes that the strategic formulation school encompasses a breadth of managerial capability that requires an interdisciplinary approach.
Summary of Schools of Entrepreneurial Thoughts
It is always possible to place together all the knowledge and research found in the emerging stage of the entrepreneurship and describe current school of thoughts in the field. These enable the team to view them as a foundation for entrepreneurial theory. However, these theories are only able to use as a basis for understanding the field, and even more theories are to be found in its growth and development.
Reference to School of Entrepreneurial Thought
The group has reference Ip to the Financial/Capital School of Thought. Reason being, this thought is the most relevant upon referencing to IP. As mentioned above, Crystal Jade was in danger of closing down when it is managed by Leung. Ip decided to invest S$2 million in the business, solely by his decision after being approached to invest where the venture capital process is vital to Ip's business development. It has clearly shown that the entire entrepreneurial venture is from a financial management standpoint. This school of thought has logically explained the nature of the entrepreneurship and recognizes how the field has developed. Moreover, it also helps to form a foundation upon which one can build an understanding of the process and practice of entrepreneurship.
Besides the Financial/Capital School of Thought mentioned above, the group has also identified that two more school of thoughts that Ip can be related to as well. They are namely: (1) The Environmental School of Thought - He was influenced by his parents who owned a small business. (2) The Entrepreneurial Trait School of Thought - As a risk-taker, he has high degree of courage to invest a huge amount of S$2 million into the dying business. He is also committed to the business as he remains hands-on by working together with the employees. For instance, Ip travels to his restaurants and discuss with the chefs in setting the menu price.
Entrepreneur's Mentor & Role of Mentor
A mentor is a person who guides, tutors, facilitates another person. Fundamentally a mentor is someone who is prepared to spend his or her time and know-how to guide the development of another person. In this assignment, the group has identified that the entrepreneur, Ip Yiu Tung do have a mentor, but is being mentored indirectly. The reason of saying being mentored indirectly is because the mentor the group talks about is Ip's brother-in-law, Mr Albert Leung.
Leung is the founder of the restaurant Imperial Treasure. Before the restaurant Imperial Treasure was established, Leung was the managing Crystal Jade restaurant where he seeks help from Ip to invest in the restaurant business if not it will be in the danger of folding up the business. As Leung was Ip's brother-in-law, Ip had invested a sum of money into the dying business holding 49% share for that investment.
After Ip joined Crystal Jade restaurant, he learnt the operational aspects of the food and beverage industry from Leung fast although he managed the strategic areas of the business. As Leung was in the food and beverage industry much longer than Ip, he will have a better experience in terms of dealing with suppliers, deciding and setting menu prices etc. Therefore, the role of being a mentor to Ip, Leung probably has demonstrated the way he liaises with the suppliers, setting the menu prices etc to Ip.
The group believed that although Leung have showcase his expertise in food and beverage industry, it is the initiative and fast learning attitude that have shaped Ip into today's success in managing Crystal Jade restaurant. By saying that, Leung has partially fulfilled what a mentor should do but to Ip, it can be considered as an indirect mentoring technique used.
Describing and Evaluating the Innovative Approach Used to Identify, Develop & Exploit the Idea
Generally the idea for Ip in Crystal Jade is to have five stars quality at four star prices in its menu as well as expanding the Crystal Jade restaurants chain domestically and overseas. By trying to achieve these ideas, Ip has great vision and strong believe on this business will succeed. His way of innovative approach were created basically by his 'can do attitude' with his hands-on in the business as well as keeping up-to-date with the trends.
One of the ideas is to provide good quality with reasonable price. By trying to achieve this idea, Ip actually will have to readjust the menu pricing and at the same time keeping the freshness of the ingredients and quality of the food served. However, saying this is so much simper than doing it personally. In order to have reasonable price and quality food, managing his staff is very crucial. With his "can do attitude", Ip naturally influence his staff the in way he thinks and being hands-on in the business, he demonstrates the level of expectation he desired.
For instance, Ip do visits to all the restaurants to meet up with the chefs and managers to decide on the price to set on the menu. Moreover, in an interview done by the local radio station 89.9, The Business Station, Ip mentioned that the chef he employs is also very important. Ip said: "They not only need to cook well, instead they have to manage the whole restaurant and maintain the same quality every time." (The Business Radio interview, 2009)
The second idea is to expand the restaurant chain both domestically as well as overseas. With such an idea in mind, Ip has diversified his Crystal Jade's concept to encompass other types of cuisines. For instance, Ip has branched out into serving Korean cuisines, Shanghai cuisines, etc. The group in consensus with Ip, has noticed the increasing trend in these types of cuisines; hence he seized the opportunity and started a specialty restaurant that serve both Korean and Shanghai cuisines. With that, Ip is keeping up-to-date with the current trends and environment of the business
Successes and Weakness
Ip Yiu Tung has achieved success through the following initiatives. Firstly, Ip has created an environment that his employees will like to work in, secondly, an environment whereby his customers would like to re-patronize and thirdly, a concept which won him and the company recognition.
Ip has won the overall winner of year 2009 Rotary-ASME Entrepreneur of the Year Award. The Rotary-ASME Entrepreneur Award seeks to recognize and inspire local SME community entrepreneurship.
Ip Yiu Tung has successfully build Crystal Jade Culinary Concept Holdings from a single restaurant into a chain of 80-outlets across Asia. In addition to his success, Ip is fortunate to have an experienced team of dedicated executive employees who assist in the micro parts of managing the company as well as the business finances. With regards to food quality, Ip recruits the best chef, with most of the senior chefs from Hong Kong as well as attracting talented chefs from other restaurants.
The group has identified one weakness that Ip Yiu Tung might have overlooked. As he is trying to expand domestically and overseas, currently Crystal Jade Restaurant is not a Halal certified restaurant by Majilis Ugama Islam Singapura (MUIS). Most of Crystal Jade's dishes feature pork. With that, it can't be considered as a Halal restaurant.
However, the team believes that since Ip has the ability to keep up-to-date with the current trends, he should also cater to the Muslim community as well. For instance, setting up a Halal restaurant or Muslim themed restaurant, just like what he did for the Korean and Shanghai restaurant. Ip could take the current Halal Food Court "Food Heaven" as a reference. For the readers' information, Food Heaven is a casual food court but the concept is all the stalls are Halal certified by MUIS. Though it is a Halal certified food court, it sells popular local fare like; Yong Tau Fu, Fishball Mee Pok, Laksa and Wan Ton Noodle etc.
The only difference now is that Ip has to declare that this newly set up restaurant will not use any pork and lard in it. As an ingredients substitute, pork can be replaced by chicken meat or turkey bacon. By doing so, Ip could have achieved the first mover advantage because currently those non-halal restaurants do not have the intention in expanding or diversifying its business concept into this new area. Moreover, with the strong repute and popularity of the restaurant, customers are given more choices to continue their support.
Legacy Left to Society & On Future Entrepreneurs
Ip Yiu Tung is the group chairman and chief executive officer of restaurant chain Crystal Jade Culinary Concepts Holding. He has taken a majority stake in Crystal Jade and the chairmanship in 1992 after which he assumed executive control by becoming managing director of the company in 2004, after the departure of Mr Leung. Under his charge, there was further diversification of Crystal Jade's culinary concepts domestically as well as for overseas expansion.
In 1992, Ip was approached to invest in the financially troubled Crystal Jade restaurant at the Cairnhill Hotel in Singapore. The restaurant was managed by Leung was in danger of closing down. Ip decided to invest S$2 million in the business, taking a 49% shareholding in the process.
It was solely Ip's decision to invest $2 million into a dying business. His decision has resulted in Singapore having one of the finest authentic Cantonese restaurants. Without Ip's vision that he could rescue the business, today we would be without many of the Cantonese delicacies. He also made many changes to the outlet's location; one major move was moving out from the original Cairnhill Hotel and opening a flagship outlet at Ngee Ann City (Crystal Jade Palace). If Crystal jade had been left with Leung, the restaurant would probably have ceased operations and Singapore would have lost 20 restaurants.
The loss of not only the original fine dining concept but the casual diners such as the CJ express, the Hong Kong Dim Sum, the confectionary, the specialty restaurant which serves Korean BBQ and cuisines from other regions of China such as Shanghai and Teochew cuisines. There is also a huge chain of restaurants that would not have opened in other parts of Asia.
After a long partnership, Ip and Leung had differences in the management of the organisation and Leung left Crystal Jade in 2004, along with his wife Hera and Brothers Jimmy and Vincent. Leung went on to form the rival Imperial Treasure chain. Ironically this decision created another chain of restaurants to cater to Cantonese food lovers. If Crystal Jade had not survived, Imperial Treasure would not have been born.
Ip has left an invaluable message to budding entrepreneurs, which is never to belittle a dying business and never to let an opportunity slip by as Ip has turned a failing restaurant into an empire with over 80 restaurants in 9 countries, with a turnover of over $240 million. "I never imagined I would own a restaurant, but the chance came and I grabbed it." Said Ip. (Chua Alvin, 2010)
Entrepreneurs interested to venture into the restaurant can follow his philosophy of "letting the food speak for itself".
"We do not compromise on quality, five star qualities at four star prices. We are a superbrand because of the consistently high quality of our food and service."
(Chua Alvin, 2010)
Thoughts about Idea Being Further Exploited In The Future
A strong economic outlook, burgeoning middle class population and the impact of globalisation has led to greater consumer affluence and sophistication, and in turn, an increased demand for premium lifestyle products and services. Along with this, there is an increasing popularity of cosmopolitan eateries and restaurants across the region. In addition, the community of PMEBs, tourist arrivals and business travellers to Singapore and other regional cities has also grown as a result of economic development and urbanization.
Consumers are becoming more discerning and Crystal Jade's strategy of providing high quality food at affordable prices has proved successful. Ip's insistence on top quality ingredients and service has helped it to maintain its reputation. In his expansion in the region, he has adopted a localisation strategy where the selections of foods are tailored to the tastes and demands of each market.
Though this idea had been imitated countless times, the reaction levels to change in demographics and preferences will make the difference between success and failure. Further growth areas can be to new emerging markets where consumers are inexperienced and untested. Though the taste and preferences of consumers will change with time, further innovation and diversification in culinary concepts based on the same strategy can be accomplished. Building up a brand name and further capitalisation on its reputation, is a strong receipt for success.
Ip Yiu Tung has demonstrated true entrepreneurship in his transformation of Crystal Jade into a regional powerhouse. He was an opportunity seeker, when he took a calculated risk and invested initially in the business. An innovator, when Crystal Jade diversified from Cantonese fine-dining to a multiplex of different culinary styles. And a leader, with his determination and commitment to the business, with a focus on quality and providing inspiration to his staff to achieve the organisation's goals. This culminated in him being awarded the prestigious 2009 Rotary-ASME Entrepreneur of the Year award. He has shown budding entrepreneurs that success is possible with the right attitude and the ability to adapt quickly to changing conditions. The concept is not new, but his business strategy "of 5-star food at 4-star prices" has transformed Crystal Jade into a reputable brand, synonymous with quality and value.