THE REPORT OF MICROECONOMICS PROJECT ÔNG bầu TAKE AWAY COFFEE

THE REPORT OF MICROECONOMICS PROJECT ÔNG BẦU TAKE – AWAY COFFEE Group 01 – Class CC02: Trần Bảo An - 2153149 Nguyễn Hoàng Minh Anh - 2210084 Trà Lâm Anh - 2052849 Cao Thiên Bảo - 2153197 Lê Thụy Ngọc Châu - 2252088 Lecturer: Dr Trần Duy Thanh HCM City, 02/12/2022 THEORETICAL BASIC Demand Demand is an economic concept that relates to a consumer's desire to purchase goods and services and willingness to pay a specific price for them Determinants of demand:  Price of good or service  Income of Buyers  Price of related products  Taste of consumers  Expectations Supply Supply is a fundamental economic concept that describes the total amount of a specific good or service that is available to consumers Determinants of supply:  Price of the Commodity  Firm Goals  Price of Inputs or Factors  Technology  Government Policy  Expectations  Prices of other Commodities  Number of Firms I Description of the event - Ong Bau coffee is a famous name in the field of coffee Among the prominent names today, it is impossible not to mention the “Ong Bau Coffee” brand with a rapid development speed, which is quietly spreading its branches across the country - Compare to other brands, the differences of Ong Bau compare to others are:  Own the CADA farm: Supply their own high-quality coffee beans  Marketing campaign: Digital marketing and receiving promotion support from many famous football players  Stable materials with low cost: With support from NutiFood company, Ong Bau coffee chain ensure the best cost for raw materials, while minimizing losses during operation  Opportunity for franchising: For the mobile bar model, it will be more flexible for those who are just starting out with insufficient finance, the required area is about - m2 with an investment of about 102 million  Reasonable price: 16.000 VND - 35.000 VND per cup of drink  Variety of drinks: Coffee, Milkshake, Yogurt, Tea, (with lots of toppings)  Has a special taste and aroma  Impressive slogan: “Real Coffee, Real Life” - Three big advantages strategies that help Ong Bau take away coffee reach a sustainable development of products and services:  Clean coffee: Have their own farm (CADA) to grow coffee beans And the quality of coffee also affects the reputation of big names owners of football clubs  Low price: Positions itself in the popular segment, therefore it’s easy to reach a wide range of customers  Vietnamese have a deep passion for football, and their nation is frequently cited as one of the football-loving nations in the world In order to support the development of Vietnamese youth football, this new business has pledged to donate 1,000 VND for every product it sells from the very first days of its inception II Problem statement - There will be a significant adverse effect on the environment as a result of utilizing 100% plastic cups to serve consumers - The plastic cups used for iced drinks are also problematic Most are made from polypropylene which is not accepted in many curbside recycling programs Plastic lids might prevent spills but the single-use items are typically made from polypropylene or polystyrene, a petroleum-based plastic that is difficult to recycle When coffee cups are tossed into the recycle bin with their lids attached, the components have to be separated before they can be processed in separate recycling streams - Plastic has a devastating effect on the ecosystem There is a ton of information demonstrating how it is affecting animals, from habitats tremendous their food supplies Global warming and pollution, it not only affects animals but also many other areas of the planet It has been disproven that it is sufficient to merely put your plastic garbage in a recycling container - In landfills and the ocean, it takes 450–1,000 years for each cup to decompose into microplastics Toxic chemicals seep into the surrounding soil as polystyrene decomposes at a landfill Human neurological systems, livers, and reproductive organs can be harmed by exposure to the major compounds that come out of polystyrene, styrene and benzene - To make matters worse, individuals who work and live close to these hazardous dumps are those who are most at danger, which means minority groups in the US are disproportionately affected by the serious health concerns For instance, 1.2 million people reside within two miles of hazardous waste plants in Los Angeles These people comprise 91% of minority communities This implies that cutting back on your use of plastic is also a matter of racial justice in addition to the environment - Inadvertent ingestion of these harmful plastic pieces by animals is also a concern 43% of all marine animals and 86% of sea turtles, respectively, have plastic debris detected by researchers Animals suffer because they can't digest the food they need to survive when their stomachs are full of plastic Over time, it's possible that people will consume these plastics once they pass through the food chain Between 39,000 and 52,000 microplastic particles may be ingested by people annually, say experts We use these red plastic cups for 15 minutes and then they are on earth for 450+ years - Governments, corporations, and people must thus take action and seek a more sustainable solution to the plastic problem Future generations and the earth as a whole will undoubtedly benefit from our common obligation to take essential actions III Objectives The objective of this research was to: - Determining the current practices of the organization - Determining the problems brought about by the current practices of the organization - Evaluation of the current practices IV Finding - The unique name “Coffee Ong Bau” comes from the cooperation of three powerful businessmen: Mr Doan Nguyen Duc (elected Duc), Chairman of the Board of Directors of Hoang Anh Gia Lai Group; Mr Vo Quoc Thang (elect Thang), Chairman of the Board of Directors of Dong Tam Company and Mr Tran Thanh Hai, Chairman of the Board of Directors of NutiFood Company Famous as the “boss” of the heart in the sports world of the country, besides the common passion for football, all three of these entrepreneurs are attached to and have a love for Vietnamese coffee beans - The brand “Coffee Ong Bau” was established with the biggest purpose of bringing real value to Vietnamese coffee beans The value here is not only economic value, but also quality and brand value For that reason, the business philosophy associated with the word “real” is set by the bosses for their brand - “Whatever I do, I pursue two things: Clean and real Playing football must be clean and drinking coffee must be real Every cup of coffee Mr Bau sells is one less cup of unreal coffee”, said Mr Duc shared this on the opening day of the 100th store of the “Ong Bau” coffee chain - The attraction of the franchise business model - Trading in clean coffee, real coffee, but “Ong Bau Coffee” is surprised by the extremely reasonable price in the current price storm From the sidewalks to the “5-star” premises, the quality and price of the “Coffee Ong Bau” brand are always the same with the price of only 16,000 – 28,000 VND/cup, suitable for a wide range of customers and customers always accompanies many partners who wish to cooperate with franchising and choose a reasonable price frame according to each intended business area - Up to now, the brand chain “Coffee Ong Bau” has expanded across the country Not only thanks to the quality and attraction of famous businessmen, the rapid expansion of “Ong Bau Coffee” also comes from the effective franchising method - Besides the desire to bring clean cups of coffee, the managers also want to cooperate and bring business opportunities to people who are like-minded, love real coffee, and want to start a real coffee business but are limited in terms of capital and facing difficulties because of a lack of experience in preparation - After a process of research and experimentation, “Coffee Ong Bau” is currently providing its partners with coffee shop models with flexible capital while still ensuring business efficiency Accordingly, for a group of partners with small capital, the car model “CART” With a low investment cost of 102 million, will be a completely suitable choice According to a representative of the “Coffee Ong Bau” brand, if placed in the right position, the “CART” model can bring an average monthly sales of 50-60 million VND - For partners with abundant capital, it will be suitable for a fixed store model, with an area of 70-220m2 with an investment cost of only VND 205 million This is also the model favored by partners when cooperating with “Ong Bau Coffee” Many famous football players of the national team such as Van Toan, Cong Phuong, and goalkeeper Kieu Trinh,… have all chosen this model and now own their own “Coffee Ong Bau” - Ong Bau is economies of scale: In general, economies of scale depend on the size of the company The amount of cost reductions increases with business size Scale economies might be internal or external While external economies of scale are influenced by external circumstances, internal economies of scale are dependent on management decisions - With more than 150 locations spanning from the North to the South, Ong Bau is delighted to offer unique coffee flavors in more than 35 provinces and cities An astonishing amount for a business that started out on the pavement In the upcoming years, Ong Bau plans to open 10,000 points of sale throughout Vietnam since, when the system is vast and broad enough, authentic coffee can easily reach lots of customers - The market structure of Ong Bau Coffee is monopolistic competition, a monopolistic competitive industry has minimal entry requirements, and actions made by any one business not immediately impact those of its rivals The price and marketing choices made by the rival firms serve as their points of differentiation - Market competition: The chain coffee especially the takeaway coffee market is considered a fierce game, many brands entered, but they quickly retreated But it's still a desirable and viable market  Compete with different brands that are the same type of business, or nearby competitors (Lyon Coffee, Gogo coffee, Rovina Coffee, Ava Coffee, )  The threat of substitution  Compete about the price; quality of the products, service; location; marketing campaigns, and facilities, The impact of specialization - Specialization by products: Ong Bau coffee concentrates on the production of beverages alone  Increased efficiency: Ong Bau coffee focuses on drinks for a market segment, so their production processes may become more efficient over time Team members may optimize production by finding ways to use fewer resources and accelerate manufacturing speed after becoming experienced in the position  Reduced production costs: Ong Bau coffee saves money because they don't have to manage and supply a diverse range of products  Reduced product costs: Specialization allows Ong Bau coffee to reduce the costs of its products because it also reduces the cost of production This often doesn't affect the quality of the products and may give the company a competitive advantage in the market The impact of government policy intervention on the market - Production support policy  Restructuring activities for the Tây Nguyên province in the period 2014 – 2020  Input support (irrigation fees, seeds, fertilizers, ): exemption and reduction of agricultural land use tax, exemption of irrigation fees for households and individuals that have land and water surface together into production agricultural export  Institutional renewal policy: Establishment of sectoral coordination committee, Establishment of production association, Consultancy on construction and innovation, Research on selection, breeding, application of varieties, economical irrigation system, Study of current map Status and causes of death in replanting, Research on building replanting process, intensive farming process according to GAP - Trade Policy  Financial support for processing and construction projects of infrastructure, traffic, electricity, water, machinery  Land rental tax exemption for the project of building temporary storage of agricultural products 10  Decision 1684/QD-TTG: "Focusing on major agricultural products" (rice, vegetables, fruits, seafood, coffee, tea, rubber, cashew, pepper, timber, and products from timber, animal husbandry ) with general and specific solutions to promote the development of the main markets of these industries - Policy on production association:  Support and encourage businesses and farmers to associate production with processing and consumption in large fields:  Enterprises:  Exempt from land use fees and land rent when building processing factories and warehouses serving large fields  Priority is given to agricultural product export contracts  Support the cost of planning implementation and improvement  Organization, support, and technical training for farmers  Farmers:  Thorough training on production and free market information on agricultural products  Support up to 30% to buy quality varieties  100% storage fee Government policy to remedy market failures - Decree 08/2022/ND-CP: banning the production and import of nonbiodegradable plastic bags for domestic consumption will start in 2026 - Gradually reduce the production and import of SUP products until the final ban will be in place in 2031 - Charge for a plastic cup to take away - Apply high-tech technology to treat coffee waste Firm interaction in different market structures - Market structure: Monopolistic Competition 11  The market has many small firms, and there are no barriers to entering the market These firms compete with one another in areas such as product performance/results  Each firm has an insignificantly small share of the market, and therefore its actions are unlikely to affect its rivals to any great extent  Each firm produces a product or provides a service in some way different from its rivals As a result, it can raise its price without losing all its customers Thus its demand curve is downward sloping  Firms are often in fierce competition with other (local) firms offering a similar product or service and may need to advertise on a local basis, to let customers know their differences V Conclusion - Ong Bau Coffee got a high rating in the market survey, for the taste & quality of their products If they work on this aspect, there is huge potential for them to attract customers, just based on the taste and quality of products Ong Bau coffee has a value for money proposition and strong youth orientation Ong Bau coffee has a strong brand image, but they still need to work hard on improving its customer perception - Franchise stores “Ong Bau Coffee” are not only supported in-store setup, and equipment system, provided and guided on drink recipes, but also benefited from the source of coffee ingredients from the legendary CADA farm over 100 years old and other quality ingredients provided by NutiFood Company - Ong Bau coffee brand chain is rapidly expanding its system and cooperating to develop more partners and attractive incentive programs 12 VI The responsibility of members in the group STATUS NAME EVALUATE ROLE Done Late Good - Research for the information Trần Bảo An - Host the meetings - Make the video X X X X X X X X X X - Support other members - Research for the information Nguyễn Hoàng Minh Anh - Write a report - Present - Support other members - Research for the information - Summarize and filter the Trà Lâm Anh information - Support other members - Present - Research for the information Cao Thiên Bảo - Make a Powerpoint - Support other members - Present Lê Thụy Ngọc Châu - Research for the information - Write a report - Support other members 13 Bad - Present VII.References http://thitruongnongsan.gov.vn/vn/tID24992_Chinh-sach-nganhhang-ca-phe-.html https://thoibaotaichinhvietnam.vn/giam-thieu-rac-thai-nhua-bangcong-cu-chinh-sach-va-co-che-tai-khoa-109627-109627.html https://www.cask.vn/tin-chi-tiet/chien-luoc-nao-cho-ca-phe-ongbau https://ipos.vn/chuoi-ca-phe-nhuong-quyen-ong-bau/ https://vnexpress.net/suc-hut-tu-chuoi-ca-phe-nhuong-quyen-ongbau-4448352.html https://thanhnien.vn/giai-ma-ca-phe-ong-bau-post1001948.html https://batdongsanproject.com/ai-dung-sau-ca-phe-ong-bau/ https://www.investopedia.com/terms/e/economiesofscale.asp https://www.investopedia.com/terms/m/monopolisticmarket.asp 10 http://thitruongnongsan.gov.vn/vn/tID24992_Chinh-sach-nganh- hang-ca-phe-.html 11 https://thoibaotaichinhvietnam.vn/giam-thieu-rac-thai-nhua-bang- cong-cu-chinh-sach-va-co-che-tai-khoa-109627-109627.html 12 https://foodprint.org/blog/environmental-impact-coffee-cup/ 13 https://cooleraid.co.uk/cooleraid_blog/what-is-the-environmental- impact-of-plastic-cups/ 14 https://supcups.com/pages/the-plastic-problem#:~:text=Plastic %20cups%20take%20450%2D1000,low%20income %20communities%2C%20and%20wildlife 14 ... drinking coffee must be real Every cup of coffee Mr Bau sells is one less cup of unreal coffee? ??, said Mr Duc shared this on the opening day of the 100th store of the “Ong Bau” coffee chain - The attraction... Board of Directors of Dong Tam Company and Mr Tran Thanh Hai, Chairman of the Board of Directors of NutiFood Company Famous as the “boss” of the heart in the sports world of the country, besides the. .. sustainable development of products and services:  Clean coffee: Have their own farm (CADA) to grow coffee beans And the quality of coffee also affects the reputation of big names owners of football clubs