NORAINI’S COOKIES WORLDWIDE SDN BHD “Cookies to the...

“Cookies to the World”

Case Study

NORAINI’S COOKIESWORLDWIDE SDN BHD

Cookies To The World

Roseleena Hashim

Nor Hafizah Mohd. Arop

“From the spectacle of my office, I monitor the work-in-progress of my upcoming cookies automated production line which will boost my output and sales to 5 times from the existing ones. My other plan is to establish a spice production line on the second floor of my factory. My new three-storey factory is designed to house all my production capacity, right from the production line to packaging line, including administrative and marketing office, as well as a cafe and lounge for my staff. I realise that I have come a long way from a backyard beginning. Today I am still working harder to deliver my cookies to all parts of the world, well known for its delicious taste, aroma and beautiful features as well as value for money. How do I extend my outreach? Where shall I begin? What kind of skills should I provide for my people to meet this impending expansion? Who shall I seek for advice and guidance in terms of product development? What kind of investment should I make to expand my R&D capability?”

Noraini’s Cookies

Noraini’s Cookies is a homemade–recipe brand name which was first established in 1984 selling varieties of Malay and Nyonya delicacies. The journey began when its founder, Pn. Hjh. Noraini Hj. Ahmad, demonstrated her cooking potential professionally when she was approached by a 5-star hotel chef who was looking for a traditional Malay kuih supplier for his hotel. At that time, there was a limited number of suppliers for the Malay kuih and the chef was duly impressed with her creation.

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COOKIES TO THE WORLD

So she started operating from her house, allocated a designated area for her kuih making operation. She prepared the kuih herself with the assistance of several workers initially. Business was good and she received more orders from other hotels as well as restaurants around the city. She soon hired more hands and still maintained the home-based operation. She was juggling her time between her job, her kuih making business and supplying textiles as well, while taking care of her growing family.

As the demand for her kuih grew, she realised that she had come to a crossroad, either her job or her business. She was very fortunate to have a strong support from her dear husband as well as her parents. They gave their blessings for her to pursue her business venture, and so she resigned from her comfortable job and turned herself into a full time entrepreneur.

Despite facing difficulties such as shortage of skilled workers, she explored the possibility of sourcing cookies from home-based operators, repackaged them and supplied them to a local supermarket. She managed to run this new operation smoothly as demands kept coming in for these homemade cookies. Her constant worry then was the inconsistent supply from these suppliers which affected her capability to fulfill her expanding market, notwithstanding their refusal to invest in more efficient machineries. There was a time when she had to resort to preparing the cookies herself as the suppliers could not fulfil their deliveries.

The Brand is Born

By then, she had enough of this nonsense and lackadaisical attitude of her suppliers. She decided to venture on her own cookies production and marketed them under her own brand name, thus “Noraini’s Cookies” was born. Despite operating a home-based production, she managed to assert herself as one of the leading cookies suppliers among the more established biscuit producers based on her increasing sales from RM10,000 to RM500,000 per year.

She attributed this achievement to the three principles which she held when she ventured into business. They are embodied in Noraini’s corporate values (Exhibit 1). She strongly believes that a good entrepreneur must have these basic qualities: negotiating skills, managing capital, and marketing strategy.

110Case Book on Transformation, Innovation and Partnership

In 1994, she registered her operation as a private limited company as well as appointing her family members to head the company (Exhibit 2). In the same year too, she built and operated her own factory, in a shophouse corner lot in Shah Alam. With that milestone achieved, she then started to produce varieties of cookies, hand-down family recipes as well as her own creation.

CHAIRMAN/MANAGING DIRECTORHjh. Noraini Hj. Ahmad

BOARD OF DIRECTORS

Management

Executive DirectorDr.Helmee Effendee

Norsham, MD

DirectorEn. Hezir Effez Norsham

Computer Engineering USA

DirectorEn. Hezlee Ezha Norsham,

Sains Aktuari

DirectorCik Shuhaila Norsham

Exhibit 1:Noraini’s Corporate Value

Exhibit 2:Noraini’s Organisation Chart

Administrative Operation

Chief Executive OfficerDr.Helmee Effendee Norsham, MD

Finance En.Azizi Ahmad,

DiB

Marketing Appointed

agents

General ManagerHj.Mohd. Shamshi Hj.Ariffin

Human Resource

Pn. Ena Bai

Research Hjh. NorainiHj. Ahmad

Distribution En. Zulkafli

Production Cik Sarhiyyah

Supervisor

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Noraini’s Vision:To make known that Malaysia is one of the famous food producers in the world

Noraini’s Mission:To produce high quality Malaysian traditional food products with international packaging

Noraini’s Value:N = No Additives,O = Organics,R = Recognised,A = Advance,I = Islamic,N = Nourishing,I = Improved recipe,S = Safety guaranteed


Facing tough local competition such as J’s Cookies, S Delight and the likes, she decided to market elsewhere. Further challenges compounded her worries, such as the never ending problem with foreign workers, coupled with lukewarm support from major hypermarkets to market local products for budding entrepreneurs like her. She set her eyes on Vietnam to market Noraini’s Cookies. Her effort in tapping this new market paid off where demand for Noraini’s Cookies was growing day by day where she then expanded her production by building another factory in Vietnam.

Do you know?A chocolate chip cookie is a drop cookie that originated in the United States and features chocolate chips as its distinguishing ingredient. The traditional recipe combines a dough composed of butter and both brown and white sugar with semi-sweet chocolate chips. Variations include recipes with other types of chocolate or additional ingredients, such as nuts or oatmeal.

HistoryIt was found that the chocolate chip cookie was accidentally developed by Ruth Wakefield in 1934. She owned the Toll House Inn, in Whitman, Massachusetts, a very popular restaurant in the 1930s. The restaurant's popularity was not just due to its home-cooked style meals; her policy was to give diners a whole extra helping of their entrées to take home with them and a serving of her homemade cookies for dessert. Her cookbook, Toll House Tried and True Recipes, was published in 1936 by M. Barrows & Company, New York, and included the recipe "Toll House Chocolate Crunch Cookie", for what have been widely called Toll House cookies.

Common variants• The M&M cookie, or party cookie, replaces the chocolate

chips with M&M's candies. This recipe uses shortening as fat. • The chocolate chip cookie uses a dough that is chocolate

flavoured by the addition of cocoa or melted chocolate. Variations on this cookie include replacing chocolate chips with white chocolate or peanut butter chips.

• The macadamia chip cookie has macadamia nuts and white chocolate chips. It is a signature cookie of Mrs. Fields bakeries.


The 1997 Asian financial crisis had created a major dent to her business operation in which not only her cookies sales dropped tremendously but also her bank loans repayment were creeping into whatever profit she may have had at the time. She needed a backup plan to steer her business away from this mess. As an alternative, she and her husband participated in various fairs organised by a government agency in order to boost her cookies sales. During these fairs, she prepared kuih bahulu on-site. She received an unexpected warm response where she managed to generate a revenue of about RM1,000 a day from this bahulu-making sale. She still operates this bahulu-making stall at its original spot in a southern city to this day.

She took another big step in 2004 in which she established Noraini’s Cookies Worldwide to supply festival cookies to the masses for major festivals as well as for daily needs. Her outreach includes TESCO, Carrefour, Jusco, Giant, Pasaraya Bintang and Uda Ocean, besides venturing into Singapore, Vietnam, Dubai, the United Kingdom, Brunei, Hong Kong, South Africa, Mauritius and Nigeria. Due to this aggressive promotion, her sales increased to RM2 million in 2008 from RM1.5 million in 2007. In addition, she has accumulated a total of RM2.8 million worth of assets in 2008.

“A soft knock on the door interrupts my train of thoughts. My eldest son, Helmee, who is also CEO of Noraini’s Cookies, is showing me the proposed design of a product catalogue for Noraini’s festival cookies. I smile and nod to let him in. I am very fortunate indeed to have the full support of my husband and my four children to oversee the running of Noraini’s Cookies. Helmee, a medical doctor by profession, has joined me to further spearhead Noraini’s Cookies expansion. We discussed at length on how best to advertise Noraini’s Cookies in order to boost its sales of festival cookies. We exchange ideas on what kind of design that would portray Noraini’s brand to its best”.

• The chocolate chip peanut butter cookie replaces the vanilla flavoured dough with a peanut butter flavored one.

• Other variations include different sizes and shapes of chocolate chips, as well as dark or milk chocolate chips. These changes lead to differences in both flavour and texture. There are also vegan chocolate chip cookies.

Source: http://en.wikipedia.org/wiki/Chocolate_chip_cookie

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She moved a step further by expanding her products through establishing several companies under the Noraini’s umbrella, among them are (Exhibit 3):

• Noraini’s Enterprise Sdn Bhd• Noraini’s Cookies Worldwide Sdn Bhd• Noraini’s Marketing Sdn Bhd• Noraini’s Farm House Sdn Bhd• Noraini’s Shcuzinskii Sdn Bhd

As her operation diversified from cookies to bahulu and to cakes, she sought another opportunity to produce traditional dishes comprising laksa and noodles as well as ready-to-cook ingredients or premix such as sambal tumis, curry and asam pedas, plus ketupat (mini rice cake) (Exhibit 4). She combined these products with a food outlet with café style, named Noraini’s. She set up a kiosk at SOGO as well, selling cookies and confectionaries.

Exhibit 3:Noraini’s Umbrella of Companies

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Noraini’s Farm House Sdn Bhd

Noraini’s Shcuzinskii Sdn Bhd

Case Book on Transformation, Innovation and Partnership

At this point of time, she realised the importance of protecting her brand name, Noraini’s Cookies. She registered the name under the intellectual property category as she realised certain quarters are duplicating her brand name and trademark. She managed to sort this issue legally as she proved that the Noraini’s brand had been in existence since the last fourteen years. The patenting of Noraini’s brand has helped the company to expand further (Exhibit 5).

In 2006, during an international exhibition in KL, she was approached by a delegation from Kazakhstan, expressing their interest in Noraini’s Cookies and offering their factory in Almaty, Kazakhstan to be used in the production of cooking. After much negotiation and deliberation,

Exhibit 4:Noraini’s marketing brochure describing its range of products

Exhibit 5:Noraini Local Brand and Trade Mark

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Noraini’s International Brand and Trade Mark


she agreed to have Noraini’s Cookies operating there under the name Noraini’s Shcuzinskii Sdn Bhd and appointed one of her sons as Noraini’s representative there. This arm of Noraini’s will produce specially made Noraini’s cookies for the Eastern Europe market, making Almaty, the focal point of Noraini’s distribution and marketing activities.

Expanding market outreach

Relationship building with customers is crucial for a business to sustain as Noraini’s cookies is currently capturing the local market share for cookies between 2% to 3%. This includes identifying specific customer requirements for all aspects of food and delicacies preparation and service. In so doing, Noraini’s Cookies uses various media to create public awareness of its reputation as well as the value which Noraini’s Cookies provides to the public. Promotional mechanisms include television, radio, magazine, and web-based advertising; among which sponsoring a local television series “Akademi Polis” (Exhibit 6).

Kuih BahuluIngredients6 eggs175g castor sugar120g plain flour120g self-raising flour1 tsp baking powder1 tbsp corn oil2–3 kuih baulu moulds

Method• Lightly grease the baulu moulds with corn oil and place them

in a preheated oven at 250°C. • Beat eggs and sugar with an electric hand beater until the

mixture is creamy and fluffy. • Sift both types of flour and baking powder into the egg

mixture. Stir well to mix then add corn coil into the batter. • Spoon just enough batter into the preheated moulds and

bake for 10 minutes or until kuih bahulu is golden brown.

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Source: kuali.com/recipes/viewrecipe asp?r=2444


Publication : NSTDate : 18/07/2007 Headline : Sweet successByline : By Kasmiah Mustapha

DETERMINATION, willpower, and hard work saw Noraini Ahmad through hardtimes and good times. KASMIAH MUSTAPHA finds out how this entrepreneur made it.

Noraini Ahmad is tasting sweet success. But it took 20 years, hard work and determination, through ups and downs to make it happen.

Today, Noraini owns 6 companies, 12 cookie shops and cafes, exports cookies to seven countries, and is taking on the Russian market through Kazakhstan.

A business empire is never built overnight. It takes strong will, hard work and sheer determination to make it happen. Not counting the tears and pain when failure comes along the way.

That is exactly what Noraini Ahmad had to go through.

Noraini began her journey in 1984 like many other women, starting small. Working with an insurance company then, she began to sell Malay kuih at her office and to some of the hotels around Klang Valley as well as during the Umno general assembly.

After 10 years, Noraini decided to venture into baking Hari Raya cookies and became a supplier to stalls around the Chow Kit area.

Business was good, and she resigned from her job. "But then the financial crisis happened in 1998 and my mother, like everyone else, suffered badly," says Noraini's eldest son, Helmee Effendee Norhisham, 30.

"First she had to stop supplying Malay kuih as most of the buyers did not pay their bills." She had to concentrate only on making the cookies.

"That business, too, barely survived. My parents had to work extra hard to ensure the business stayed afloat so that they could pay off their debts," said Helmee who was at that time studying medicine in Indonesia.

Noraini's determination paid off.

Exhibit 6:Promoting Noraini’s Cookies

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In 2000, she got an offer to set up a kiosk in Plaza Angsana in Johor Baru selling freshly baked cookies. Slowly but surely the business started to take off.

Seeing an opportunity to expand the business, Noraini decided to set up Noraini's Fresh Baked cafe in Plaza Shah Alam.

There was no turning back and now there are 12 Noraini shops throughout the country including Tesco Klang, Tesco Puchong, The Mall, Jusco Taman Universiti in Johor Baru and Jusco Ipoh.

The Noraini Fresh Baked cafe in Plaza Shah Alam has grown by leaps andbounds over the years.

In the beginning, there was just a small kiosk at the entrance selling home made cookies, bahulu and other Malay delicacies.

Now the shop has next to it, a cafe, Laksa Paradise, offering curry mee, mee bandung, several types of laksa and drinks. It is a favourite eating place in Shah Alam.

"We are planning to set up more Noraini Fresh Baked shops and Laksa Paradise in other parts of the country. We are opening up in Sogo in August," Helmee said.

Helmee is executive director of Noraini Cookies Worldwide Sdn Bhd, and his younger brother also helps with the business.

"We need to do more to promote Noraini's products in the market. Now itis difficult for us to market the cookies at local sundry shops because customers have this perception that they are expensive. So we will change the packaging and branding of the cookies."

With a factory located in Taman Pinggiran Subang for large-scale production of the cookies and ensure quality, Helmee said they are also looking at expanding the export markets.

Noraini Cookies Worldwide is involved in producing and marketing home-made cookies - chocolate chip, cornflake and raisin, oat and walnut, ginger and almond, mix fruit, peanut butter and jackfruit.

The cookies are also exported to Dubai, Cambodia, Vietnam, Singapore as well as Hong Kong, Mauritius and Taiwan.


Her main worry in view of reaching out further is the insufficient volume of Noraini’s cookies, coupled with high cost of materials and depending on foreign labour to operate the production line. She hopes that with new investment in machineries to produce cookies to be materialised by 2010, she will be able to increase production capacity to five tonne per week from the current one tonne per week, albeit still far from that of its competitors’ capacity of five tonne per day (Exhibit 7). In lieu of this automated production line, Noraini’s is looking at repositioning and reskilling her shopfloor staff to concentrate on the packaging line instead.

Other companies owned by Noraini include Noraini Farm House Sdn Bhd, which produces the herbs and spices for cafes; Noraini Shuchinskii Sdn Bhd, a joint venture company set up in Kazakhstan to produce and distribute cookies for the Russian market; Noraini Enterprise Sdn Bhd and Noraini Marketing Sdn Bhd.

Helmee said the success that his mother has achieved would not have happened if she had given up during the bad times.

"It was not all easy. There was a time when the business was really bad. The debts were piling up, and my parents had to struggle to ensure that the business survived despite all this. But my mother's philosophy is to never give up, even when everything seems hopeless."

Source: NSTP e-Media

Exhibit 7:Noraini’s Production Line

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Future expansion (clockwise): the new automated production line with a capacity of 5 tonne/week; the packaging area; the spice production area.


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Existing manual production line with a capacity of 1 tonne/week.


Perspectives On Multi-Skilling

Job enlargement – refers to increasing an employee’s workload horizontally by allowing him or her to be exposed to more varied tasks, using multiple skills, with a similar level of difficulty.

Job enrichment – refers to the vertical expansion of workload by letting staff learn more about the pre- and post-stages of a job in terms of planning, organising, co-ordinating as well as controlling his own work.

Job rotation – allows employees to go through cross-training in different sections within the same department, or to learn jobs in other departments that have a relationship with their existing job.

Source: MPC, 2006, Multi-Skilling -Practical Implementation for the Industry

In terms of product development, Hjh. Noraini is very much involved as she heads the R&D outfit herself. She is transforming her passion for cooking since her childhood days to constantly search for breakthrough ideas to improvise her recipe and her cookies. As a result of these initiatives, Noraini’s has a wide range of cookies from chocolate chip, cornflake and raisin, oat and walnut, ginger and almond, mix fruit, peanut butter, to jackfruit. It has two distinctive cookies brand, the festival cookies “Noraini’s Cookies”, and the all season cookies “Good Kiss” (Exhibit 8).

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Exhibit 8:Noraini’s Cookies and Good Kiss product range

She also realises that there is a lot more opportunities if she were to sell her Noraini’s laksa paste via small kiosks ala the night marker hawker’s style instead of the existing café style. All she has to do is to find an operator and a financier. The source of fund could come from government agencies providing soft loans such as TEKUN or MARA. These 2 parties will then form a profit-sharing venture in running Noraini’s laksa kiosk. As for Noraini’s, she will provide the raw materials, equipment, as well as providing the training and motivation talk and guidance technical for the kiosk operators.

Noraini’s is also expanding her overseas market further, into the Middle East, by participating in trade promotion in both Dubai and Jeddah respectively. Her involvement with a group of local manufacturers, Konsortium Usahawan Industri Asas Tani or KOMITA, majority of whom are SMEs will see Noraini’s products being marketed in London (Exhibit 9).


Through KOMITA too, Noraini’s is aiming for the North America’s market next. Regionally, Noraini’s is also set to penetrate the huge Indonesian market via the signing of an MoU with Koperasi AGRO Jawa Barat; as well as strengthening Noraini’s presence further in Ho Chi Minh City and Hanoi,Vietnam. With these expansions, Noraini’s is targetting to capture the export market of 20% by 2010 from the present 5%.

Exhibit 9:Noraini’s Marketing Profile for the London Market through KOMITA

Forward looking in product development, Hjh. Noraini is contemplating to produce and popularise the love letter cookie. She has observed that this cookie is widely popuIar during major celebrations such as Eid-ul Fitri and Chinese New Year. She sees the opportunity to ride on her Noraini’s brand name as well as capturing a portion of this cookies market. However, she needs to inject more capital into operationalising an automated production of the said cookie. This would require her to source about RM1 million worth of investment in the form of advanced machineries.

As it is, she is not keen on acquiring more bank loans as she is already tied up with paying existing ones. Her best option at the moment is to seek an R&D grant from the related agency. Initial effort was not

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encouraging as she could not convince the agency that she is reinventing the process of love letter making by utilising the machine.

“I take a deep breath and stare at the grant application form, pondering on whether to pursue this new venture. I have yet to look at the grant application. Should I reapply for the grant? Should I seek another loan instead? Do I have to restrategise my business approach in expanding into the new market? How adaptable is the company to face the prospect of upcoming ventures? Is the Noraini’s branding reputable enough to penetrate into the Western markets that are more familiar with Famous Amos and Marks & Spencer cookies? Am I destined to be a global entrepreneur? Do I have what it takes to become one?”

Key Learning Points

Discuss the important elements of becoming an entrepreneur.

What are the qualities expected to ensure that the business will succeed?

Discuss the approach undertaken by Noraini’s Cookies to remain a market player in the industry.

Deliberate on the needs for Noraini’s Cookies to review its business model in its new market venture.

How best can Noraini’s Cookies expand her workforce capabilities?

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Questions for Discussion

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Unique entrepreneurship traits in developing a company brand and image.Agile and flexible to respond to emerging challenges.Creative and innovative ideas to reposition the company globally.

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