Noorazah Business Report

CHAPTER 1

1.1 Introduction

Just like many other industries, the growth of the restaurant industry in Malaysia has been overwhelming in the past decade with different types of restaurants burgeoning everywhere and ranging from fine dining, specialty, fast food, casual, theme, ethnic restaurants and even a combination of more than one category. (Othman, Zahari, Hashim & Ibrahim 2009).
It is notable that the basic needs like food, water, clothing and shelter, but also sanitation, education and healthcare. Food is everyone’s is favourite and we need it for our daily living. Thus the food the industry has been flooded with several kinds of food from all over the globe. You will find almost every cuisine in Malaysia and people still enjoy it from every culture. The food service industry today is perceived as worldwide economic industry, with producers and consumers extend as far and widely as possible (Hanafiah et al. 2010). Kong and Jogaratnam (2007) stated that most of successful restaurants able to deliver a good service, fulfilled the needs and satisfied the experience of their customer. Unable to convey a wonderful experience to customer may lead to service failure.

“One cannot think well, love well, sleep well, if one has not dined well.” – Virginia Woolf

“People who love to eat are always the best people.” – Julia Child

1.2 Analysis objective

The objective of this project is to analyse Noorazah caterers’ problem and recommend solution by providing suggested strategies that could be implemented for radical changes in order to have competitive advantage.

To identify the problems of Noorazah caterers, we shall employ compressive analysis focusing on the internal and external environment such as PESTLE analysis and SWOT analysis, financial statements, ratio analysis and Boston consultation group matrix (BCG Matrix)
For this particular business project, Noorazah caterers has been chosen. Its located in IIUM Gombak Kuala Lumpur Malaysia, this study will conclude the overview of economy analysis, industry analysis and potential problems.

Lastly, recommendations with strategies to implement so as to transform Noorazah caterers to be on top amongst its competitors.

CHAPTER 2

2.0 BACKGROUND OF NOORAZAH CATERERS

2.1 Background of Noorazah Caterers

Noorazah is local catering enterprise located in International Islamic University Malaysia (IIUM), Gombak.
In year 2001, Noorazah Caterers managed to get tender from Facilities Food and Services Department (FFSD) at IIUM department to start its services at Mahallah Ali. Noorazah caterers was formerly known as “café 75” among the students. Workers at the café consisted of 28 people, and majority of them are Indonesian workers and a little number from Bangladesh and Bosnian.
The founder is Datin Noorazah. She has built a good looking restaurant that offers best food in IIUM, one of largest public universities with students. International students and local students.

Figure 2.0: Noorazah caterers’ logo and slogan

2.2 Overview Noorazah Caterers

Noorazah caterers have mastered the art of giving best food services and every kind of drinks (beverages) to the students. With the experienced owner and charismatic manager, they, make sure the all their customers get unrivalled services. The cheerful employees offer good customer care

Noorazah caterers is popular for the traditional hot Malay foods, side dishes like kuih keria, kuih, karipap, cucur pisang. These are served in every quantity at very affordable prices. Besides the Malay traditional food, Noorazah caterers offer western food, Bangladeshi food and the Somali food which makes a wide range of African foods.

Working hours 7am to 1am every day of the week except when there is maintenance works which are always notified beforehand to students.

2.3 Noorazah Caterers

Company name: Noorazah Caterers

Established: 17th August, 2001

Owner: Noorazah Binti Diam

Address: International Islamic University Malaysia
Mahallah Ali

P.O. Box 10, 50728 Kuala Lumpur

Contact number: 017 6498875

Company vision: To provide affordable delicious, all round food and a good ambiance that will bring students back again and again.

Company mission: To build a growing, profitable restaurant business in which the highest standards of quality, value and hospitality are expressed.

Company objective: To ensure good customer care for our clients as well as serving the best food and drinks in accordance with restaurant’s established policies of catering.

2.4 Background of the owner

Figure 2.1: Datin Noorazah Bt. Daim owner of Noorazah caterers

Owner

Name: Noorazah Binti Daim
Date of Birth: 02/ 04/ 1970
Working Experience: 20 years of working in Food, beverages and catering

Manager
Name: Saimi Bin Ghani
Date of Birth: 23/ 07 / 1966
Working Experience: 12 years Food, Beverages and 5 years of banking sector

2.5 Product and service specialist

Noorazah caterers is basically a mainly a food and beverages. Catering of any sorts is undertaken inside the restaurant premises or outdoors.
Malaysian cuisine, Bangladesh, western cuisine, Somali and African cuisine. What makes Noorazah better than its competitors is the dedication to provide food in time, fresh and served in its rightful quantity.

As for the beverages, we provide fresh made juices that remain a favourite for our customers. The restaurant also has a loan scheme for customers, they can eat on loan, write in a book and pay later.

On special days when we have more clients, we have special offers with free drinks and fruits at discounted prices. Besides only eating and enjoying the nice artistic place, we provide giant screens to show cast sports shows on TV mainly football.

NOORAZAH CATERERS CLASSIC MENU

Table 2.0: Noorazah caterers classic Menu

CHAPTER 3

3.0 MALAYSIA’S ECONOMIC ANALYSIS OVER 10 YEARS

3.1 GDP (RM)

The average gross national product of Malaysia was 151.57 RM billion which is recorded lower of 127.10 RM billion in 2005
The gross national product was 176.90 RM billions in third quarter of 2012 from 167.10 RM billion in second quarters of 2012.

Figure 3.0: Malaysia GDP (RM) 2008 – 2018

GDP constant prices in Malaysia increased to 311,704 RM million in the third quarter of 2018 from 300,089 RM million in the second quarter of 2018. GDP constant prices in Malaysia averaged 214,864.29 RM million from 2005 until 2018, reaching an all-time high of 311,704 RM million in the third quarter of 2018 and a record low of 130,630 RM million in the first quarter of 2005.

3.2 GDP Growth (%)

In Malaysia, in the third quarter of 2012, the gross domestic product was 5.20 percent the average rate of Malaysia GDP annual growth rate is 4.6 percent which is reaching at 10.1 percent in 2010 and it is moving toward -6.2 percent in 2009. The annual growth rate measures the change in the value of goods and services which is produced by the Malaysian economy during a year.
The gross domestic product expanded 3.30 percent in the third quarter of 2012. The average GDP growth rate of Malaysia was 1.3 percent which is reaching at 5.9 percent in September 2009 Malaysia is a middle income country.
GDP growth rates for 2010 are estimated at 4.2% and 3.30 % in the 3rd quarter of 2012.

Figure 3.1: Malaysia GDP Growth (%) 2008 – 2010

3.3 GDP per Capita (USD)

The GDP represents the national income and the output of Malaysia‘s economy.
The Gross Domestic Product per capita in Malaysia was last recorded at 11521.45 US dollars in 2017. The GDP per Capita in Malaysia makes it 91 percent of the world’s average. Between 1960 to 2017, the GDP per capita of Malaysia averaged at 5158.48 USD, reaching an all-time high of 11521.45 USD in 2017 and lowest record at 1408.60 USD in 1960.(Tradingeconomics.com, 2018)

Figure 3.2: GDP per capita of Malaysia 2008-2018 (source: tradingeconomics.com)

In Malaysia, in 2011, the GDP (Gross Domestic Product) was worth 278.67 billion US dollars. The average rate was the GDP was 59.9 USD billion dollar and it was recorded low of 2.4 USD billion dollars in 1960.
The average rate of GDP per capita PPP was 7,690.8 USD dollars which was lowest recorded at 2,323.7 USD dollars on 1980. (Tradingeconomics.com, 2018)

3.4 Inflation Rate

In Malaysia, the inflation measures a broad use or fall in prices that consumer pay for a quality standard of goods.
Malaysia inflation rate averaged 3.59 percent from 1973 to 2018, highest ever of 23.90 percent in March of 1974 and lowest recorded at -2.40 percent in July of 2009.

Figure 3.3: Malaysia inflation rate 2008 – 2018

In October 2012 inflation rate was recorded 1.70 percent, the average inflation rate of Malaysia was 2.66 percent which is reaching 8.50 percent in 2008 and it was recorded low of -2.40 percent in 2009.

Malaysia’s consumer price inflation hit a high to 0.6 percent year-on-year in October of 2018 from 0.3 percent in the previous month while matching market expectations at the same time. A jump in prices of food caused highest inflation rate since July. (Tradingeconomics.com, 2018)

3.5 Interest Rate

Interest rate decisions are taken by the central bank of Malaysia (Bank Negara).
From 2004 until 2018 Malaysia interest rate averaged 2.99 percent, reaching an all-time high of 3.50 percent in April of 2006 with a record low of 2 percent in February of 2009.

The central bank of Malaysia preserved its benchmark interest rate unaffected at 3.25 percent on November 8th, 2018, as widely expected.. (Tradingeconomics.com, 2018)

Figure 3.4: Malaysia interest rate between 2008- 2010

The interest rate was recorded at 3 percent, it is also in the books that the average interest rate of Malaysia was 2.9 percent and by 2006 it was reaching 3.5 percent. In 2009 Malaysia recorded the lowest interest rate of 2.0 percent.

3.6 Population

The current population of Malaysia in 2018 is estimated around 32.04 million, a significant increase from 2013’s estimate of 29,791,949. In 2014, the number of births in Malaysia was 511,865 and the deaths recorded were at 145,648.
According to the last population census conducted in 2010, the population of Malaysia was 28,334,135. This made Malaysia the 42nd most populated country in the world. Malaysia consists of people of different cultures (majorly Malay, Chinese, Indians and other minorities) and religions; Islam, Buddhism, Christianity among others.

Figure 3.5: Population of Malaysia 2008-2018

3.7 Unemployment Rate

Unemployment rate in Malaysia was 2.80 percent in august 2012 which is increased 3.30 percent in September 2012. The average rate of Malaysia was 3.3 percent which is reaching 4.5 percent in 1999. The rate measures the numbers of employee or people actively looking for a job as a percent of the labour force. (Tradingeconomics.com, 2018)

Figure 3.6: Unemployment rate for Malaysia 2008-2018

3.8 Balance of Trade

Malaysia’s trade surplus widened sharply to RM 16.3 billion in October of 2018 from RM 10 billion in the same month of the prior year and far above market expectations of a surplus of RM 12.5 billion. It was the largest trade surplus since October 1997, when trade balance posted a deficit RM 0.15 billion, mainly due to a surge in exports.

Figure 3.7: Malaysia balance of trade 2008 – 2010

Year-on-year, exports grew by 17.7 percent to RM to RM 96.4 billion, after a 6.7 percent rise in September and far above consensus of a 6.2 percent rise. Imports rose by 11.4 percent to RM 80.1 billion, above expectations of a 2.8 percent gain and after a 2.7 percent fall in a month earlier. A look at the first ten months of the year, the trade surplus increased steadily to RM 102 billion from MYR 81.2 billion in the same financial year 2017. Balance of Trade in Malaysia averaged 3382.34 RM million from 1970 to 2018, highest recorded being 16323.97 RM Million in October 2018 whereas the lowest recorded was -2880.61 RM Million in June 1997.

3.9 Current Account

Malaysia’s current account surplus narrowed sharply to RM 3.8 billion in the third quarter of 2018 from RM 12.8 billion in the same period of the previous year. It was the smallest current account surplus since the second quarter of 2016, as the goods surplus declined to RM 26.6 billion from RM 31.7 billion a year ago and the primary income deficit increased to RM 15.0 billion from RM 9.6 billion. Meantime, the services account gap fell to RM 3.3 billion from RM 4.8 billion a year earlier, while the secondary income deficit was little-changed at RM 4.5 billion. (Tradingeconomics.com, 2018)
Malaysia current account averaged 15308.15 RM million from 1999 to 2018, with all time high at 39982 RM million in the third quarter of 2008 while lowest was 978 RM million in the second quarter of 2013.

Figure 3.8: Malaysia current account 2008 – 2010

3.10 Government budget

Government budget is an itemized accounting for the payments government receives in the form of taxes and other fees and the payments made by government such as purchases and transfer payments.

Malaysia recorded their top individual income tax rate being 25 percent; the top corporate tax rate is also 25 percent. Other taxes include a capital gains tax. The overall tax burden equals 13.8 percent of total domestic income. In the past three years, government spending has reached to 24.9 percent of total output (GDP), and budget deficits have averaged 2.8 percent of GDP. Meanwhile public debt equalling to 56.3 percent of GDP.

It is one of the 20 largest trading nations worldwide and was headed of Taiwan, Sweden, Canada, Australia, the United Kingdom, and Switzerland.

Figure 3.9: Malaysia government budget from 2008 – 2018 (source: Tradingeconomics.com)

However the highest ever recorded was 2.40 while the lowest was -6.70 percent of GDP Malaysia recorded a government budget deficit equal to 3 percent of the country’s Gross Domestic Product between financial years 1988 to 2017.

3.11 Government Debt to GDP

A budget deficit occurs when a government spends more money than it takes in. The opposite of budget deficit is budget surplus. Budget surplus is a rare case in a country’s budgeting.

Figure 3.10: Government debt to GDP from 2008 – 2018 (source: Tradingeconomics.com)

50.90 percent was recorded to be government debt of the Malaysia Gross Domestic Product in 2017. Government Debt to GDP averaged 48.50 percent from 1990 to 2017, with the highest being 80.74 percent in 1990 and lowest recorded 31.80 percent in 1997.