Abstract
In 2020, the prolonged lockdown imposed due to the COVID-19 pandemic caused considerable disruption to the F&B industry, forcing food operators to move their business operations to digital platforms. Dominated by small and medium enterprises (SMEs), F&B industry players have found it challenging to embrace digital technologies with the limited resources they possess. Underpinned by the business model articulated by (Teece, Long Range Planning 51:40–49, 2018a), this chapter illustrates how F&B businesses have used their dynamic capabilities to sense and seize new opportunities and subsequently transform the way they operate. This study adopts a constructivist grounded theory approach as its methodology, based on media and online reports on the F&B industry published between January 2020 and June 2021. The findings reveal that some food operators have revised their value propositions by altering their product portfolio, some have formed synergies with external partners (e.g., GrabFood and FoodPanda) to create a seamless customer journey experience, while others have embraced transformative change through the emergence of cloud kitchens. The findings also show that the extent of change is strongly influenced by a firm’s entrepreneurial and organizational competencies, which it uses to orchestrate resources and execute operational strategies to embed digital technologies in its business operations. Indeed, the pandemic has become a force for change that has revolutionized F&B business operations by encouraging the industry to embrace digitalization.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Afandi, H. (2020, September 28). #Tech: Malaysia has the most digital consumers in the region. New Straits Times. https://www.nst.com.my/lifestyle/bots/2020/09/627994/tech-malaysia-has-most-digital-consumers-region
Ardolino, M., Rapaccini, M., Saccani, N., Gaiardelli, P., Crespi, G., & Ruggeri, C. (2018). The role of digital technologies for the service transformation of industrial companies. International Journal of Production Research, 56(6), 2116–2132.
Baines, T., & Lightfoot, H. W. (2014). Servitization of the manufacturing firm: Exploring the operations practices and technologies that deliver advanced services. International Journal of Operations & Production Management, 34(1), 2–35.
Benito-Osorio, D., Guerras-Martin, L. A., & Zuñiga-Vicente, J. A. (2012). Four decades of research on product diversification: A literature review. Management Decision, 50(2), 325–344.
Boey, E. (2020, August 16). From bricks & mortar to online—Retaining the all-important human touch. The Edge Markets. https://www.theedgemarkets.com/article/bricks-mortar-online-retaining-allimportant-human-touch
Bragg, T. (2018, July 20). Digital transformation: The recipe for success in Malaysia’s F&B industry? Tech Wire Asia. https://techwireasia.com/2018/07/digital-transformation-the-recipe-for-success-in-malaysias-fb-industry
Bresciani, S., Ferraris, A., & Del Giudice, M. (2018). The management of organizational ambidexterity through alliances in a new context of analysis: Internet of Things (IoT) smart city projects. Technological Forecasting and Social Change, 136, 331–338.
Busch, R., & Kick, T. (2009). Income diversification in the German banking industry (Deutsche Bundesbank Discussion Paper, No. 09/2009).
Chakravothi, B., Bhalla, A., & Chaturvedi, R. S. (2020, December 18). Which economies showed the most digital progress in 2020? Harvard Business Review. https://hbr.org/2020/12/which-economies-showed-the-most-digital-progress-in-2020
Chalil, M., & Hassandarvish, M. (2020, April 17). FashionValet, Foodpanda launch Ramadan online bazaar for home cooks, food vendors to generate income. Malay Mail. https://www.malaymail.com/news/life/2020/04/17/fashionvalet-foodpanda-launch-ramadan-online-bazaar-for-home-cooks-food-ven/1857687
Charmaz, K. (2006). Constructing grounded theory: A practical guide through qualitative analysis. Sage.
Charmaz, K., & Henwood, K. (2008). Grounded theory. In C. Willig & W. Stainton Rogers (Eds.), The SAGE handbook of qualitative research in psychology (pp. 240–260). Sage.
Chesbrough, H. (2010). Business model innovation: Opportunities and barriers. Long Range Planning, 43(2–3), 354–363.
Chesbrough, H., & Rosenbloom, R. S. (2002). The role of the business model in capturing value from innovation: Evidence from Xerox Corporation’s technology spin-off companies. Industrial and Corporate Change, 11(3), 529–555.
Chesbrough, H. W. (2007). Why companies should have open business models. MIT Sloan Management Review, 48(2), 22–28.
Choo, J. (2020, April 7). How Kuala Lumpur’s F&B industry is responding to the COVID-19 crisis. Channel News Asia Luxury. https://cnaluxury.channelnewsasia.com/experiences/kuala-lumpur-food-beverage-industry-covid-19-174066
Choo, J. (2021, July 10). One year after the MCO, how are Malaysia’s top restaurants faring? Channel News Asia Lifestyle. https://cnalifestyle.channelnewsasia.com/experiences/malaysia-s-best-restaurants-penang-kuala-lumpur-johor-bahru-251721
Corbin, J., & Strauss, A. (2008). Basics of qualitative research: Techniques and procedures for developing grounded theory (3rd ed.). Sage.
Creswell, J. W. (2013). Qualitative inquiry and research design: Choosing among five approaches (3rd ed.). Sage.
Dong, A., Garbuio, M., & Lovallo, D. (2016). Generative sensing: A design perspective on the microfoundations of sensing capabilities. California Management Review, 58(4), 97–117.
Durai, A. (2020a). F&B pandemic trends. The Star. https://www.thestar.com.my/food/food-news/2020a/08/03/fb-pandemic-trends
Durai, A. (2020b). The cloud kitchen model is gaining traction in Malaysia. The Star. https://www.thestar.com.my/food/food-news/2020b/08/06/the-cloud-kitchen-model-is-gaining-traction-in-malaysia
Durai, A. (2020c). Personal chefs are in demand now with diners looking for curated meals. The Star. https://www.thestar.com.my/food/food-news/2020c/09/21/personal-chefs-are-in-demand-now-with-diners-looking-for-curated-meals
Eggers, F. (2020). Masters of disasters? Challenges and opportunities for SMEs in times of crisis. Journal of Business Research, 116, 199–208.
Elmuti, D., & Kathawala, Y. (2001). An overview of strategic alliances. Management Decision, 39(3), 205–217.
Giotopoulos, I., Kontolaimou, A., Korra, E., & Tsakanikas, A. (2017). What drives ICT adoption by SMEs? Evidence from a large-scale survey in Greece. Journal of Business Research, 81, 60–69.
Grand View Research. (2021). Meal kit delivery services market size, share & trends analysis report by offering (heat & eat, cook & eat), by service (single, multiple), by platform (online, offline), by region, and segment forecasts, 2021–2028. Grand View Research. https://www.grandviewresearch.com/industry-analysis/meal-kit-delivery-services-market
Hew, L. (2021). Grab Malaysia to launch new programme in June to help small food businesses. The Edge Markets. https://www.theedgemarkets.com/article/grab-malaysia-launch-new-programme-june-help-small-food-businesse
Idris, A. N. (2020, November 11). Brahims, focus dynamics team up for digital kitchen project. The Edge Markets. https://www.theedgemarkets.com/article/brahims-focus-dynamics-team-digital-kitchen-project
Ireland, R. D., Hitt, M. A., & Vaidyanath, D. (2002). Alliance management as a source of competitive advantage. Journal of Management, 28(3), 413–446.
Jacobs, J. (2020a). The new digital normal for F&B operators. The Edge Markets. https://www.theedgemarkets.com/article/new-digital-normal-fb-operators
Jacobs, J. (2020b). F&B moving forward purposefully. The Edge Markets. https://www.theedgemarkets.com/article/fb-moving-forward-purposefully
Kanagaraj, P. (2020, May 27). Part 1: Malaysian restaurants are facing uncharted waters. Business Today. https://www.businesstoday.com.my/2020/05/27/part-1-malaysias-restaurants-are-facing-uncharted-waters/
Khoo, D. (2020, June 21). How local restaurateurs and fine-dining restaurants are adapting to the new normal. Options. https://www.optionstheedge.com/topic/food/how-local-restaurateurs-and-fine-dining-restaurants-are-adapting-new-normal
Kim, D. J., & Kogut, B. (1996). Technological platforms and diversification. Organization Science, 7(3), 283–301.
Köbnick, P., Velu, C., & McFarlane, D. (2020). Preparing for Industry 4.0: Digital business model innovation in the food and beverage industry. International Journal of Mechatronics and Manufacturing Systems, 13(1), 59–89.
Kotler, P., Brown, L., Burton, S., Deans, K., & Armstrong, G. (2010). Principles of marketing (8th ed.). Pearson Australia.
Kowalkowski, C., Gebauer, H., & Oliva, R. (2017). Service growth in product firms: Past, present, and future. Industrial Marketing Management, 60, 82–88.
Lim, J. (2021, January 25). Digitalisation: Pandemic pushes tech upgrade in last old-school frontier. The Edge Malaysia. https://www.theedgemarkets.com/article/digitalisation-pandemic-pushes-tech-upgrade-last-oldschool-frontier
Lindgardt, Z., Reeves, M., Stalk, G., & Deimler, M. (2009). Business Model Innovation. Boston Consulting Group.
Malay Mail. (2020, April 15). Data expert shares tips to empower SMEs in surviving MCO. Malay Mail. https://www.malaymail.com/news/money/2020/04/15/data-expert-shares-tips-to-empower-smes-in-surviving-mco/1856966
Man, T. W., & Lau, T. (2000). Entrepreneurial competencies of SME owner/managers in the Hong Kong services sector: A qualitative analysis. Journal of Enterprising Culture, 8(3), 235–254.
Matarazzo, M., Penco, L., Profumo, G., & Quaglia, R. (2021). Digital transformation and customer value creation in Made in Italy SMEs: A dynamic capabilities perspective. Journal of Business Research, 123, 642–656.
Murugiah, S. (2020, November 24). Cloud kitchen the new norm, says foodpanda director. The Edge Markets. https://www.theedgemarkets.com/article/cloud-kitchens-new-norm-says-foodpanda-director
Osterwalder, A., & Pigneur, Y. (2010). Business model generation: A handbook for visionaries, game changers, and challengers. Wiley.
Paschou, T., Rapaccini, M., Adrodegari, F., & Saccani, N. (2020). Digital servitization in manufacturing: A systematic literature review and research agenda. Industrial Marketing Management, 89, 278–292.
Rapaccini, M., Saccani, N., Kowalkowski, C., Paiola, M., & Adrodegari, F. (2020). Navigating disruptive crises through service-led growth: The impact of COVID-19 on Italian manufacturing firms. Industrial Marketing Management, 88, 225–237.
Ritter, T. (2014). Alignment 2: Driving competitiveness and growth through business model excellence. CBS Competitiveness Platform, Frederiksberg.
Rogers, K., & Cosgrove, A. (2020, April 16). Future consumer index: How COVID-19 is changing consumer behaviors. Ernst & Young. https://www.ey.com/en_gl/consumer-products-retail/how-covid-19-could-change-consumer-behavior
Russo, A., & Perrini, F. (2010). Investigating stakeholder theory and social capital: CSR in large firms and SMEs. Journal of Business Ethics, 91(2), 207–221. https://doi.org/10.1007/s10551-009-0079-z
Schneider, S., & Spieth, P. (2013). Business model innovation: Towards an integrated future research agenda. International Journal of Innovation Management, 17(1), 1340001.
Schön, O. (2012). Business model modularity—A way to gain strategic flexibility? Controlling & Management, 56(2), 73–78.
Scuotto, V., Arrigo, E., Candelo, E., & Nicotra, M. (2019). Ambidextrous innovation orientation effected by the digital transformation. Business Process Management Journal, 26(5), 1121–1140. https://doi.org/10.1108/BPMJ-03-2019-0135
Sheth, J. (2020). Business of business is more than business: Managing during the COVID crisis. Industrial Marketing Management, 88, 261–264.
Sirmon, D. G., Hitt, M. A., & Ireland, R. D. (2007). Managing firm resources in dynamic environments to create value: Looking inside the black box. Academy of Management Review, 32(1), 273–292.
Tan, J. (2021, July 4). 4 friends with a cloud kitchen & mission to help older M’sian hawkers go digital. Vulcan Post. https://vulcanpost.com/754482/keatchen-pj-cloud-kitchen-hawker-street-food-delivery/
Teece, D. J. (1986). Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy. Research Policy, 15(6), 285–305.
Teece, D. J. (2006). Reflections on “profiting from innovation.” Research Policy, 35(8), 1131–1146.
Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319–1350.
Teece, D. J. (2010). Business models, business strategy and innovation. Long Range Planning, 43(2–3), 172–194.
Teece, D. J. (2018a). Business models and dynamic capabilities. Long Range Planning, 51(1), 40–49.
Teece, D. J. (2018b). Dynamic capabilities. In M. Augier & D. J. Teece (Eds.), The Palgrave Encyclopedia of Strategic Management. Palgrave Macmillan.
Teece, D. J., & Leih, S. (2016). Uncertainty, innovation, and dynamic capabilities: An introduction. California Management Review, 58(4), 5–12.
Teece, D. J., Peteraf, M., & Leih, S. (2016). Dynamic capabilities and organizational agility: Risk, uncertainty, and strategy in the innovation economy. California Management Review, 58(4), 13–35.
Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509–533.
The Edge Markets. (2020, May 13). Special report: Operating in the new normal. The Edge Markets. https://www.theedgemarkets.com/article/special-report-operating-new-normal
Tronvoll, B., Sklyar, A., Sörhammar, D., & Kowalkowski, C. (2020). Transformational shifts through digital servitization. Industrial Marketing Management, 89, 293–305.
VASE. (2020, July 1). How are Malaysians getting their daily meals during the RMCO period? Vase.ai. https://vase.ai/resources/consumer-food-purchase-and-eating-habits-during-the-rmco/
Verhoef, P. C., Broekhuizen, T., Bart, Y., Bhattacharya, A., Dong, J. Q., Fabian, N., & Haenlein, M. (2019). Digital transformation: A multidisciplinary reflection and research agenda. Journal of Business Research, 122, 889–901. https://doi.org/10.1016/j.jbusres.2019.09.022
Wang, C. L. (2008). Entrepreneurial orientation, learning orientation, and firm performance. Entrepreneurship Theory and Practice, 32(4), 635–657.
Wirtz, J., & Lovelock, C. (2018). Essentials of services marketing (3rd ed.). Pearson.
World Bank. (2020). Pacific island and countries in the era of COVID-19: Macroeconomic impacts and job prospects. World Bank. https://documents1.worldbank.org/curated/en/835131608739709618/pdf/Pacific-Island-Countries-in-the-Era-of-COVID-19-Macroeconomic-Impacts-and-Job-Prospects.pdf
Yeow, A., Soh, C., & Hansen, R. (2018). Aligning with new digital strategy: A dynamic capabilities approach. The Journal of Strategic Information Systems, 27(1), 43–58.
Zikri, A. (2021, January 18). After social media apology, myBurgerlab is giving free meal vouchers to customers whose orders were cancelled. The Malay Mail. https://www.malaymail.com/news/life/2021/01/18/after-social-media-apology-myburgerlab-is-giving-free-meal-vouchers-to-cust/1941609
Zott, C., Amit, R., & Massa, L. (2011). The business model: Recent developments and future research. Journal of Management, 37(4), 1019–1042.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2022 The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd.
About this chapter
Cite this chapter
Jahari, S.A., French, J.A., Ismail, A.S. (2022). COVID-19 and the Metamorphosis of the F&B Industry in Malaysia. In: Kwok, A.O.J., Watabe, M., Koh, S.G. (eds) COVID-19 and the Evolving Business Environment in Asia. Springer, Singapore. https://doi.org/10.1007/978-981-19-2749-2_7
Download citation
DOI: https://doi.org/10.1007/978-981-19-2749-2_7
Published:
Publisher Name: Springer, Singapore
Print ISBN: 978-981-19-2748-5
Online ISBN: 978-981-19-2749-2
eBook Packages: Business and ManagementBusiness and Management (R0)