A Strategic Analysis of Yeo Hiap Seng Limited
This was the first strategy report for a business strategy module (BUS490), done as a group project.
Key Objectives
1
To analyse the external and internal environments of the company and identify meaningful issues and opportunities.
2
To evaluate the firm’s existing strategies and propose relevant improvements (my part)
Approach
My approach can be summarised as such:
Information Sources (Input)
1) Micro: Firm
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Company history
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Operating network
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Products & services
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Business model
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Key business activities
2) Macro: Industry, Geopolitics
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Current geopolitical conditions
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Shifts in buyer behaviour, consumer trends and sentiments
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Regulatory changes
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Identified risks and opportunities
Process
Identify existing strategies
Based on the firm's outlook on future business operations
Align business activities to each strategy
E.g., Strategic acquisitions, marketing campaigns,etc
Analyse metrics to evaluate strategies
E.g., Operating costs, triple bottom line, etc
Propose suggestions to improve strategies
These should align with identified opportunities
Strategic Analysis (Output)
My strategic analysis starts with identifying the firm’s strategies through its annual reports and presentations.
I delve into the company's background, focusing on:
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Revenue and cost drivers
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Marketing strategies
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Key business activities
I ensure they align with the trends identified via PESTEL and industry analyses within the broader geopolitical and regulatory context. These analyses are done by my teammates in earlier sections of the report.
Here's an example:
Considering the rising health consciousness among consumers. I studied Yeo's response to this trend - they reformulated all of their drinks to fall under Categories A and B under Singapore's new Nutri-Grade grading system, qualifying as "Healthier Choice" products under the Health Promotion Board.
The effectiveness of such strategies is then evaluated against financial performance metrics and ESG contributions, as part of a Triple Bottom Line analysis, to determine their overall impact. I ensure that my ratio interpretations align with my teammate's financial analysis in our Internal Analysis.
Skills Applied
Critical and Interdisciplinary Thinking
Developed a methodical approach to synthesise and analyse different information sources across different disciplines, to identify and evaluate Yeo's strategies.
E.g., Strategy, financials and sustainability
Communication and Collaboration
Had to communicate and coordinate as a team to ensure that the strategy section aligned with the trends, financial performance, issues, and opportunities highlighted.
Key Insights
From this project
Yeo's uses a multifaceted strategy:
differentiation
Emphasise growth of higher-margin products
Strategic price increases, targeted campaigns, reformulated drinks
Cost Reduction
More water-efficient facilities, transitioned to LED lighting systems,
switched to natural gas boilers
Improve operational efficiency
Tracking euipment performance, enforcing culture of safety at work, investing in their people
low-cost
The financial impact:
S$354m
Core F&B sales highest in 2022
1.46%
2022 Operating Margin at (2.5%)
0.3%
2022 Gross Margin at 30%
We thus suggest 2 strategic improvements:
Diversify into plant-based products
Consider developing almond/rice drinks to diversify product portfolio - e.g., Matcha almond milk.
Aligns with health-conscious consumers.
Invest in technology to further enhance supply chain resilience
Use of big data and AI capabilities to provide real-time insights on how and where production workflows can be automated.
Reflection
The Good and The Things I Would Have Done Differently
It was my first time analysing business strategies in such a rigorous manner. Frameworks like Porter's Generic Strategies and Five Forces from an earlier module came in handy!
I also got to practice the financial analysis skills that I learned from the Wealth Management Institute, which makes the project engaging.
We were complimented by our professor on our presentation, where she cited that our strategic analysis was very "to the point".
I look forward to the next 2 strategic reports.
As fun as it was, not all was smooth sailing.
I could have established a stronger, clearer link between Yeo's strategies and the opportunities we've identified. That is something I would apply to the next report!
