Insights of Snack Shops in Jagna Business Center

By: Angeline Hong

Theme: Business Consulting

It was after summer break when I returned to Hong Kong after a service trip in Thailand. As much as I met amazing people and gained so much during the trip, one small regret was that my contribution to the local community was not proportional to what I learnt due to the nature of work I did. A few friends were catching up about what we did during summer break when I first learnt about the course “BUSI2816 Transformative Business Immersion in Developing Countries” – a friend shared that she provided business consulting to a local business in Philippines. I was immediately interested to join since I will be able to provide knowledge learnt in university and add value to the local businesses.

Fast forward one year later, I am in a town called Jagna in the Philippines, assigned to consult a local business – Lodi Snack Shop located in Jagna Business Center which is the busiest market in town. Before meeting Lodi, owner of the snack shop, I was excited yet nervous because I did not know what to expect. I was worried I could not contribute to the local community again, contributing to humanitarian douchery.

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Jagna Business Center in town

On the first day of work, Jax, my business partner and I went to Jagna Business Center, as we were approaching the row of shops where Lodi Snack Shop is located, we were greeted with many shops selling similar snacks. However, we could not find Lodi Snack Shop and I thought we were at a wrong location. We decided to ask someone at one of the snack shops and she kindly directed us to Lodi Snack Shop. Upon arriving, I realized we missed the shop because the shop does not have any displayed name – which is somewhat an important thing in a business! My first impression of the shop was that it is bright and clean, compared to other shops.

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Lodi Snack Shop

Jax and I introduced ourselves to Lodi and we chatted casually with her regarding her business operations. Lodi Snack Shop, which was established by Lodi’s mother 60 years ago sells snacks such as cake, sticky rice and hot chocolate. Although the row of snack shops sells similar products, she is satisfied with her business as it is profitable. However, the actual profitability of the business is unknown since she does not keep any records of the business. The reason is food such as sticky rice, cake and bread would usually be sold out at the end of the day and the cash received would be used to purchase ingredients for the next day hence she does not realize the need of record-keeping.

Besides, we learnt that these snack shops seem to have some kind of “collusive agreement” as they sell products at uniform prices. While this would be illegal in many countries, in this small town, competitors set very affordable prices for the community and not to exploit the market. Also, every snack shop has same supplier for raw ingredients such as rice and cocoa which means their cost would be similar as well. Through my observation, most of Lodi’s customers are her friends as she would greet them with a great smile and a short conversation would be exchanged when they enter.

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Row of snack shops

We identified a few issues to tackle including marketing strategies, record-keeping and reaching out to an untapped market. For the past few days, Jax and I visited other snack shops and tried the famous traditional snacks – “putu maya” (sticky rice) and “sikwate” (hot chocolate). We wanted to investigate the differences between each snack shop and how could Lodi differentiate to perform better than its competitors.

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Putu maya & sikwate

Actually, seeing Lodi happy and satisfied with her simple business is a great sight as people in big cities like Hong Kong are constantly under pressure in pursuing greater success. One question which troubles me is that should we help these business owners to be more competitive which might affect the relationship between each other or do we leave them in their satisfied and happy condition yet without much business growth? Or can both be achieved simultaneously? I hope our business plan for Lodi Snack Shop can achieve the balance and make an impact not only to the business, but also the community and economy of Jagna.

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