RBV & VRIS

Figure 8. RBV for Shih Chen Foods Company

(I). Definition

A. HRM

In the company of 3:15PM, Shih Chen has a good human resource management.

Separated into two parts, first is their employee training. The company thinks it is important that their employees should always update knowledge. Through the inside training and other speeches of professional advisors, they can get more power to reach new goals which include R&D innovation, production differentiation, talent

specialization and safety of manufacture. Second, Shih Chen keeps that benefit sharing, share weal and woe in mind. Viewing employees as family members.

Employees are their biggest assets. Therefore, they have perfect welfare system include health insurance, allowance, health check, gifts and travel. Different from other companies in Taiwan, their power distance is lower, they encourage employees

Capability

HRM

Quality management Vertical integration

Resource

Intangible

Tangible

Land Equipment

Brand Patent R&D Marketing

to provide personal opinion and get along as families.

B. Quality management

To achieve the goal of promoting Taiwan all over the world, most of the material is from own produce and must to meet the standard-quality. First is their tea leaves.

Their farms need to be checked about environment pollution and use record of pesticide, time control of spraying pesticide. Then in good time pick tea leaves by specialized people. Second, they make the record of product periodic and packaging materials to attain health management and traceability before their tea being final commodity. The biggest purpose of those strict managements is making sure their consumers have good production.

C. Vertical integration

Different from other tea brand companies, Shih Chen have vertical integration

capability. From the material to the final product are totally by themselves. They have their own raw material manufacturer, own brand and tea shop. Although they still need some retailer to help them sell product, compare to another tea company their capability of vertical integration is higher.

D. Land

Along with increasing international markets, Shih Chen Food Company establishes a long-term reliable relationship with tea farmers to stabilize our source and quality of tea leaves. Currently, Shih Chen Food Company has more than forty tea farmers to provide an adequate source of tea leaves. For European and American Pesticide Regulations and our tea plantation health management, we regularly send the experts to counsel, educate, and audit our tea farmers. Although our management is in strict compliance, we ensure that we can purchase tea leaves all seasons. In addition, we purchase at a higher price than the market price to protect our farmers’ rights and livelihood, therefore raise their willingness to cooperate with us. This establishment of tea safety management brings the guarantee for our consumers. The supports of our excellent farmers assure us to pass down our traditional tea making technique and promote Taiwan's high-quality Oolong tea to worldwide.

E. Equipment

In order to let foreigners to slowly adapt to the taste of Oolong tea, the first one step is a combination of European and American people who love to drink flower tea. To make the perfect combination of fragrance of flowers and tea rhyme, R & D team spent a full four years of hard work, and finally, 3:15PM team relying on many years

of professional production technique and hard work, biotechnology in the "NGO transplanting technology" will pull away bitter Oolong tea, implanted fragrance of flowers, creating Oolong tea that only one in the world.

In equipment Shih Chen Food Company, in addition to have a general system of tea and packaging equipment, because of its Oolong flower tea is the use of

biotechnology in the "NGO transplanting technology," so the device is also customized for this series of products a set of equipment, which is currently Shih Chen Food Company's most advanced equipment.

F. Brand

Milk tea, and bubble teas, have been around for decades in various forms. The most popular style of milk tea originated in Taiwan back in the 1980s and it is a simple blend of black tea, creamer and sugar. Since then, however, this one simple drink has turned into a revolutionary tea culture that has allowed tea lovers to pair their favorite teas with a myriad of creamers, flavors and sweeteners. But that is not even the best part. It’s also incredibly popular and provides phenomenal profit margins for tea retailers.

Since 2006, China has ranked No.1 in tea consumption for nine years. From the above information we can see that the Brand awareness at 3:15PM is high in the Chinese market.

From 1994 3:15PM start sold their products to China. In 2017, 3:15PM ranked fourth on tea drink list in China, it is synonymous with afternoon tea in Taiwan and the tea market spokesman, the sales tentacles even more to Europe. 3:15PM milk tea emphasizes "four-dimensional space three-dimensional taste," milk tea will have different flavors due to the length of immersion, you can adjust the immersion time according to personal preference to meet different tastes.

G. Patent

With 100-year experience of planting tea, Shih Chen Food master tealeaves in high accuracy. Therefore, they created the first patented tea-bag milk tea in the world.

H. R&D

As mentioned before, they have a 100-year experience of planting tea, so they can master tea leaves in high accuracy. Furthermore, they have plentiful tea knowledge.

Thus, they can combine black tea, unfermented Oolong tea with high water-contented sugar. Making the first tea-bag milk tea successfully. This kind of milk tea is different from other milk tea. Its tea flavors are stronger. Furthermore, they use unfermented Oolong tea leaves inside, its tea flavor will change with time and can re-brew it twice.

In addition, to meet European needs, they developed nature Oolong flower tea with different flavors. The nature flower Oolong tea is made by unique NGO bio-tech to eliminate the biter of Oolong tea and transfer into flower fragrance. Besides, to keep the trend of health, they also developed life cultivation series.

I. Marketing

Their marketing strategy is to meet each area’s needs, so in Taiwan, 3:15pm invite an new idol drama actress-Hsin-Ying Hsieh(謝欣穎) to be the brand representative. In Mainland China, they create Chowder series that let the people there can have their meals conveniently. Chinese people love Sun Moon Lake black tea, so they apply Sun Moon Lake black tea to make milk tea. In Europe, they European love herbal tea, so they combine herbal tea and oolong tea to make oolong flower tea. In Korea, they want to maintain young and fashion image of the brand, they also hire young idol to be their one day clerk, make a advertise video and in March 2017 they open their first teashop in gangnam-gu(江南). In addition, they creates bottle milk tea to meet “fast”

culture in Korea. So far, we know the ambition of 3:15pm that they want to be

international. However, there is some questions that they want to be international, but they adopt the strategy “meet each area’s needs”. This strategy make their reputation won’t be high. Because in Taiwan, some people still don’t know who is Hsin-Ying Hsieh, let along in foreign countries. Take Lipton for example, Lipton is an

international brand and its reputation is very high, it adopt super star Lee-hom Wang (王力宏) to be their brand representative.

(II). The framework for appraising resources and capabilities

Figure 9. The framework for appraising resources and capabilities

A. Key strengths:

a. Vertical Integration:

Because they have their own manufacturer, they can maintain their produce quality, produce schedule, assigns key resources. Use own brand to spotlight in the world.

Although spend more costs to coordinate but also get more benefit.

b. Quality management

Shih Chen also put many efforts on their quality management. We can see relative information on their website. So that we can ensure we can use their products with peace of mind.

c. Land

Shih Chen Food Company establish a long-term reliable relationship with tea farmers to stabilize our source and quality for tea leaves.

d. Equipment

Shih Chen Food Company have the most advanced equipment of "NGO transplanting technology" and no others company have the equipment.

e.

Their patented tea-bag milk tea not only help them open the market, but also bring them go into internationalization.

f. Marketing:

There is no denying that they made a lot of efforts on their products, including “meet each area’s needs” so that they created and developed many different series of

products. However, we know Shih Chen Food Company’s target is to promote Taiwan tea all over the world, so their goal is international market. In this case, their

advertisement of “meet each area’s needs” strategy may run counter to build international brand. Who they invite are all local young idols, maybe they can

maintain the young and fashion image but most people don’t know them. In addition, most of their videos are in Chinese. That will make their efficiency lower. Therefore, we think their marketing is their weakness. But we can not erase their success on instant drink market. They are one of the few instant drink which open international market successful. Thus, we classify marketing in their key strength.

B. Key weaknesses:

a. Brand

The brand of 3:15PM is famous in Taiwan, China, and Korea, but compared with other brands such as Unilever or Twining, 3:15PM at a disadvantage position.

C. Superfluous strengths:

(a). HRM

In recent years, more and more companies pay attention to the rights of personnel. It is good to let them have more motivations to work for company. Shih Chen did this one but this kind of thing is thought as basic by public.

(b). R&D:

Owing to plentiful tealeaves experience and knowledge background, so they have strong power to support their R&D. Their two famous R&Ds in Shih Chen Food Company is tea-bag milk tea and NGO bio-tech oolong flower tea. The first one help

them open the markets and go into internationalization. The second one help them open Europe market and increase their reputation in foreign countries. However, what consumers care about is not a firm’s R&D skills, what they care is taste and price. As a result, we think R&D is their superfluous.

(III). VRIS

Table 4. VRIS of Shih Chen Foods Company

A. HRM: In HRM, although it has value, but we think it doesn’t have rareness, imperfect imitability and substitutability. It can easy to be substituted and be imitated and each company also have good human resource management. It was seen as the basic thing in companies.

B. Quality management: In quality management, it have value and rareness, it is seldom to see those kinds companies will put lots dedication on it. But it is easy to imitate and be substituted. Therefore, HRM and quality management only are competitive parity and average returns.

C. Vertical management: Be different with other company, their vertical integration have value, rareness, imperfect imitability and substitution. It is seldom to one-stop company to sell instant drinks so that in this industry 3:15PM have sustainable competitive advantage and above average returns.

D. Tangible-land: The value of Shih Chen Food Company’s land is they establish a long-term reliable relationship with tea farmers to stabilize our source and quality of tea leaves.

The rareness and imperfect imitability of Shih Chen Food Company’s land is more than forty tea farmers to provide an adequate source of tea leaves in all season.

Shih Chen Food Company’s land doesn’t have substitutability because they don’t have too many own land to control.(3:15PM)

E. Tangible-equipment: Shih Chen Food Company’s equipment have

biotechnology in the "NGO transplanting technology" will pull away bitter Oolong tea, implanted fragrance of flowers, creating Oolong tea that only one in the world. Though their equipment is hard to replace until now.

F. Intangible-brand: The value of Shih Chen Food Company’s brand has ranked No.1 in tea consumption for nine years in China.

But 3:15PM has many competitors in milk tea powder industry, compare with them 3:15PM doesn’t have substitutability, rareness and imperfect imitability.

G. Intangible-patent: It meets all criteria so it is a sustainable competitive advantage. However, it is a little bit contradictory for us, a study talked about business model (Teece, 2010), in his study, he explained: once a new business model be started, it will be imitated in the near future. Even if it is a patent, it

will also be substituted in the future. We also found some evidences that the tea-bag milk tea of 3:15pm it is a patented package, however, it has been imitated by many brands, such as Chatime, Kugi Foods, and so on. Therefore, in here we cannot say that patent is not rare, value, imperfect imitate and unsubsitituability even sustainable competitive advantage. But in this case, patent here is not a complete sustainable competitive advantage.

H. Intangible-R&D: we also classified it into sustainable competitive advantage.

About R&D it rely on their employee and company construct supported by plentiful making tea experience background. This background is a big energy database to support their R&D. Obviously, this kind of R&D is hard to imitate, substituted, also it is rare and value with no denying.

I. Intangible-marketing: in this case, marketing just meets one criteria-value.

Although in the rule of VRIS, marketing is not a sustainable competitive advantage, its contribution is not less than the other two intangible resources.

Patent and R&D are energy to support their product developed. But the most important role is marketing to carry Shih Chen to international market. Even though it not rare, can be imitated, substituted. A good marketing manner can help a company successful.