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A-1 Bakery Expands into Southeast Asia with Tech-Driven Approach
A-1 Bakery expands business in Southeast Asia, learning from previous setbacks. CSL in Kuala Lumpur has been acquired in order to build a franchise expansion strategy. A-1 plans to develop a bread plant and open shops in Malaysia before going further.
With the recent acquisition of a Japanese-affiliated software company, CSL, in Kuala Lumpur, A-1 hopes to build a strong infrastructure for extending its franchises throughout Asia.
An A-1 bakery, located near a crowded tube station in central Hong Kong, serves a regular stream of clients, including schoolchildren and office workers. The bakery serves a variety of European-style breads, Japanese-style deli breads, pastries, and more. One pleased customer, a young woman in her twenties, praised the bakery's convenience and reasonable rice cake loaded with delicious bean paste, which costs 13 Hong Kong dollars ($1.66).
Motonobu Yanai, the company's chairman and CEO, created A-1 Bakery in Hong Kong in 1985 after it was founded in Osaka in 1948. The Hong Kong business, A-1 Bakery Co. (HK), has effectively grown local markets and reached an excellent yearly turnover of 24 billion yen ($155 million). With a network of around 110 outlets in Hong Kong, A-1 intends to expand even further, maybe to 150 locations. However, the corporation intends to expand beyond Hong Kong before reaching saturation on the island.
CSL, which joined the A-1 group in April, will play a critical role in developing a system that is consistent with local traditions and practices. CSL's primary focus is on designing systems for Japanese-affiliated enterprises in Malaysia, and its geographical location in Kuala Lumpur allows easy access to a pool of competent software developers. A-1 plans to speed up system development by outsourcing orders under CSL's direction. Malaysia's attempts to cultivate tech expertise, along with the lower cost of hiring them compared to Hong Kong, make it an appealing location for A-1's expansion goals.
A-1 understands the value of harnessing technology for efficient management and operations, based on previous experiences. The company intends to build a bread factory and launch stores in Malaysia before expanding into other ASEAN member countries. A-1 has already achieved tremendous progress in technology integration, deploying factory automation before its competitors in the 2010s. The recent implementation of the "bakery scan" technology, which automatically detects products, calculates pricing, and permits payment, has freed up personnel to focus on improving bakery operations.
Yoshikazu Tabuchi, chief operating officer of A-1 (HK), recognises the difficulties in adapting Japan's standard approach to staff education and management in other cultural situations. However, he is confident in A-1's potential to flourish in Southeast Asia by using their existing knowledge and building a work structure specific to the region.
A-1's acquisition of CSL intends not just to improve its own system, but also to provide Japanese companies with good products to help them expand internationally. A-1 intends to pave the road for the commercialization of their technology by designing systems that address the specific demands of these companies.
A-1 Bakery expands operations in Southeast Asia, learning from past setbacks
Acquisition of CSL in Kuala Lumpur to develop a system for expanding franchises
A-1 envisions building a bread factory and opening shops in Malaysia before expanding further
Source: NIKKEI ASIA