Value chain

(I). Primary activity A. Inbound:

In Shih Chen, most materials are from own produced which have meet the

standard-quality. Materials will be sent to their manufactory and wait for delivery. So they can control materials by themselves. Separated two parts, cost and quality management. Although they have their own land to produce leaves, sometime the yield of leaves is not enough for their output. Therefore, they turn to find small farmers for contracting so that they can control their cost. In quality management, they have experience of growing tea leave, it is easy to decide their quality of each output.

B. Operator:

Before growing tea leaves, they will do tea garden environmental assessment and check whether the garden is suitable. They have own wild-natural garden to grow leaves. If the garden is contracting with other, they will control pesticide products which should be in standard. In order to avoid the herbicide hurt the quality of leaves, Shih Chen use artificial weeding and choose the safe time to harvest. Each harvest will be recorded for consumer viewing. The other process of tea production include sunlight withering, indoor withering, wave cyanine, static fermentation, frying, ball rolling and baking drying. Finally package it and deliver to consumers.

C. Outbound:

In part of outbound, we infer from 3:15pm story that they are good at warehousing management. When facing full warehouse of tealeaves and the tealeaves is unsalable.

Their CEO came up with a good idea-combining tealeaves with milk powder and made it into milk tea. This is an evidence that their ability of warehousing

management is good. Mr. Chu, their CEO ever said that: I won’t give as many as sellers want. They want to protect their sellers from excessive competition and

fluctuate price. CEO of Taifoods (台湖食品開發股份有限公司) said that 3:15pm pay attention on their market management, and control the price between different sellers.

This is the key to hold the lead. Furthermore, Shih Chen Food Company have a special strategy- focusing on global Chinese supermarket which include U.S., England, Australia and Canada. That let domestic consumers in foreign countries can feel the warm form home country.

D. Marketing

3:15 pm is classified experiential marketing, they want to let their customer try their milk tea first and experience the difference from other brand of milk tea.

Their marketing strategy separate into domestic and foreign market, and their

common point is meet each area’s needs. In domestic country they focus on promote city image milk tea, such as Kinmen army (金門軍), Taipei 101. In foreign market, taking Korea for example. The dealer in Korea concentrate on convenient store as their marketing channel and develop bottle milk tea, this way not only increase reputation of the brand but also meet “fast culture” of Korea. As we mentioned in prior presentation that consumer trust is a critical factor for a firm’s or a brand’s success. Therefore, they built a physical teashop, let consumers experience fresh milk tea at cheap price and see the process of making a cup of milk tea. After their

consumers trying milk tea and trusting them, the consumers will buy their products. In addition, keeping the pace of Taiwan trend, 3:15pm also export many Taiwan product to attract Korean’s eye. As we mentioned in other presentation, they open Europe market by oolong flower tea, U.S. market by tea-bag milk tea, Chinese market by chowder series. It seems that they are audacious corporate, they adapt different ways and products to meet the market need and we know that R&D is very burning up money (燒錢). However, their CEO ever said that we will develop the products depend on what we have, and it doesn’t matter for something not done, but something we done, maybe the enterprise will collapse. Thus we can infer that their strategies are remain in the middle.

E. Service

Shih Chen Food Company established the website of 3:15PM, Facebook fan page, and provided their email and toll-free phone numbers for consumers.

Customer Service Department of Shih Chen provide efficiently and courteously service, for example, when you call their toll-free phone numbers you do not wait for long time, and their customer service specialists are friendly, patient and they deal with things efficiently.

(II). Support activity A. HRM

Shih Chen has a good and complete human resource management. For example, their employee training is important to their employees should always update knowledge.

Through the inside training and other speeches of professional advisors, they can get more power to provide experiential marketing to consumers and have knowledge to

answer questions. Second is viewing employees as family members. Also, they have a 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 to provide personal opinion and get along as families.

B. R&D

Product Design：In the beginning, Shih Chen food Company wants to help tea farmers resolve the rest of tea, and they observed lots of people like to drink milk tea and lots of milk tea bags are mixed tea powder and milk powder. Through observing the fact, Shih Chen food Company decided to sell milk tea bag that put tea leaves. The idea for product design not only deal with farms product much more tea leave, but also let customer drink more high quality milk tea powder than other brands.

Testing：In order to put tea leaves in a tea bag, Shih Chen food Company through several testing to eliminate the bitter and acerbic(澀味) of tea

Market Research：Shih Chen food Company want to market Taiwan tea to others country, they researched new flavor tea, Oolong flower tea, that mix two different flavors of tea together which meets the need of Chinese and Western people in the world.

C. Procurement

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

Nowadays, Shih Chen Food Company has more than forty tea farmers to provide an adequate source of tea leaves.

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.

Through these ways to keep in right vender, right quality, the right quantity, and right price.

(III). Where is the value come from?

We think the value comes from marketing and quality, maybe in their website, we will infer that their value come from R&D. But customers don’t matter the part of R&D, not the quality itself. Few customers know the real quality of tea. What they consider is favor and trend. Therefore, marketing is a critical factor. They invite idol drama

actress to be their brand representative, using city image, meeting the different culture habits and so on, to attract customers. Furthermore, few companies can expand their foreign market, but Shih Chen Food make it. They adopt different products and series to catch different group’s interest. We also want to explain the importance of another aspect of quality here. It seems a slap in our face(打臉) that we ever mentioned what customers matter not “quality” itself, because few consumers know the real quality it is. But we also said that we want to describe “another aspect” of quality. Nowadays, people pay lots of attention on food safety. Furthermore, it is easy to acquire many relative information. Shih Chen have a good system to get information of food safety management in public. They have their own tea farm and also have long contract with some Taiwanese tea farmers and control it with quality management systematically, such as farm chemical testing regularly. With this kind of system, they can get customer’s trust, as we mentioned before, customer’s trust is very important, once company get trust from customers, they can increase their selling. To sum up, the value of Shih Chen Foods Company comes from marketing and quality.

(IV). Differentiation or low cost strategy

At the first sight of any products of Shih Chen, you can see 3:15pm on it or when you search one of Shih Chen’s brand, you must can see 3:15pm is the part of topic. It is obviously that 3:15pm is a very successful brand in Shih Chen. Therefore, when promote other brands, they will use 3:15pm to increase other’s visibility. About 3:15pm, as we mentioned in previous content, they have 6 product lines and over 20 kinds of commodities. These products are developed with the trend or taste change of consumers, such as Sun Moon lake milk tea, flower oolong tea and so on.

Furthermore, they are not satisfied with their success of 3:15pm, they want to catch consumers’ eyes in other levels. Therefore, they create tea master and brewing, enhancing the quality and price of products to touch the customers of middle and higher levels. As far, we can make a conclusion that the strategy of Shih Chen is differentiation.