University of EconomicsHo Chi Minh City BUSINESS SCHOOL ACCOUNTING FACULTY ESSAY SUBJECT MICROECONOMICS Topic Mon Hue in the F&B market Microeconomic perspective Lecturers Master Nguyễn Hữu Lộc Class[.]
University of EconomicsHo Chi Minh City BUSINESS SCHOOL ACCOUNTING FACULTY ESSAY SUBJECT: MICROECONOMICS Topic:Mon Hue in the F&B marketMicroeconomic perspective Lecturers: Master Nguyễn Hữu Lộc Class code:22C1ECO50100184 Student: Trần Nguyễn Hồng Ngọc Lock – Grade: K48 - KNC03 MSSV: 31221026727 PROLUGE Today, F&B is always a potential and growing field True proof is that every year hundreds and thousands of restaurants and eateries are opened to meet the dining needs of customers According to market research firm BMI, Vietnam has become one of the most attractive F&B markets globally The F&B industry contributes 15.8% to the country's total GDP (in 2021) and total food spending Food and beverage accounted for the highest proportion with about 35% of the target This market is currently becoming a "delicious bait" for investors, young startups are also appearing more and more because of the huge profit margins Because the cost of the product is not high, it usually only accounts for 30% of the product value, so with only a small amount of capital, if you know how to business, the profit brought is not inferior to any other industry This leads to an increasingly expanding market, F&B will be in the TOP of the industry groups that have the greatest influence on the market economy However, this is a highly competitive industry, the elimination rate is extremely fast and the behavior of customers will be greatly determined by the brand, so businesses and individuals at any time should not be subjective Otherwise the consequences will be very bad A good example of a failure in the F&B industry is the bankruptcy of Mon Hu 2019 TABLE OF CONTENTS Heading Problem: Researchobjectives Research subjects 4 Practical significance Content Overview 2.Database .6 2.1 Production cost 2.2 Organizational behavior 2.3 Corresponding graph 2.4 The reason Mon Hue went bankrupt .7 3.Recommendations on production cost 4.Conclusion Heading Problem: To be successful in the F&B industry is not an easy thing, it takes many factors Some typical factors such as products, locations, and business methods In addition, business people also have to understand the market, customer market, how to manage and operate the store, marketing strategy and many other components Just missing one of these important factors, shops, restaurants of businesses and individuals are very easy to close or go bankrupt The typical story here is the collapse of the Mon Hue restaurant chain of Huy Vietnam in 2019 The failure of the Mon Hue restaurant chain has awakened many different perspectives on this issue To better understand, let's find out the issue: "Hue dishes in F&B market - Microeconomic perspective" Research objectives: Find out the cause of the failure of Mon Hue chain in the F&B market, propose solutions on production costs to help businesses re-enter the F&B market in Ho Chi Minh City Research subjects: Cuisine chain of Mon Hue Practical significance: Analyze the causes of failure and propose solutions for Mon Hue businesses to re-enter the Ho Chi Minh City F&B market Content 1.Overview: Mon Hue food chain appeared on the market in 2007, receiving 30 million USD from foreign investors, Huy Vietnam, the owner of Mon Hue restaurant chain, was a cult name in the F&B field for a while American investor Mark Mobius, who poured 15 million USD into Huy Vietnam, once affirmed: "I will pour more capital whenever this company needs it" In the beginning, the business strategy has achieved certain success After overcoming the harsh period of the restaurant industry, Mon Hue quickly expanded its chain Only in 2014 and 2015, this restaurant chain successfully raised capital with a total value of 30 million USD from Malaysian, Hong Kong, Korean and American investors Not to mention that before this restaurant chain was injected by many different investment funds with a total capital of 65 million USD (about 1,500 billion VND) Therefore, the owner of Mon Hue restaurant chain, businessman Huy Nhat, has set a goal to issue shares to the public to raise capital up to 100 million USD In the three years from 2016 to 2018, the Mon Hue restaurant chain has a revenue of around 200 billion VND But this source of revenue could not bear the costs, leading to a loss of 50 billion VND/year in the past two years, but by the end of 2018, the accumulated loss was 107 billion VND By 2019, the food chain was officially closed, leading to bankruptcy, and at the same time owed wages to employees and companies that provided ingredients Database 2.1 Production cost Notion: Production cost is the total waste of materialized labor, living labor and other costs that an enterprise needs to spend to create products and services in order to generate profits as expected in a given period of time determined 2.2 Organizational behavior Notion: Organizational behavior is the study of the performance and functioning of groups and individuals within an organization This study examines human behavior in the work environment and determines its impact on work structure, performance, communication, motivation, leadership, and more 2.3 Corresponding graph Based on the picture above, we see that the selling price (P0) is lower thantheaverage total cost, leading to a loss Continuing to prolong the status quo leads to business bankruptcy → The reason the Mon Hue restaurant chain went bankrupt in 2019 despite having a large capital contribution 2.4 The reason Mon Hue went bankrupt ● Restaurant chain expansion too fast, while management capacity can not keep up:F&B chain owners are willing to pay higher prices than the market to compete for a beautiful space even though they don't really need it, or hire dozens of employees for a store that should only need people to operate smoothly.Increasing costs too quickly, while operating efficiency not increasing accordingly could be the cause of this restaurant chain's collapse ●Building the wrong business model : Mon Hue often choose prime locations, with large premises and many floors However, the typical dishes on the menu of this chain are often processed for a long time, the number of guests entering the time frame is not too much, leading to the waste of ingredients.The quality of Hue dishes is quite bad, even worse than many popular restaurants, not commensurate with the price and expectations The price of food in Mon Hue is often twice as high as that of popular restaurants ( 70.000 vnd vs 35000 vnd).Moreover, the service quality of Mon Hue is quite poor ●Business channel: Recently, food delivery services such as Grab, Now have exploded, changing the competitive landscape Revenue through food delivery can be as high as 30% or more for existing restaurants Many restaurants not need premises but compete for "virtual" positions on food delivery applications Mon Hue not catch up with the trend, cannot compete with thousands of online Hue restaurants 3.Recommendations on production costs Getting back to market is a huge challenge, the recommendations for Mon Hue include: ● Focus on improving the quality of dishes at a price suitable for the customer segment ● Adjust the number of personnel accordingly ● Adjustment of the management system ● Expand advertising on social media platforms: Facebook, Tiktok, Instagram, ● Optimize production and operation processes 4.Conclusion The article analyzes the causes of Mon Hue's failure and gives recommendations to help Mon Hue re-enter the F&B market in Ho Chi Minh City Founded with large amounts of capital, but because of mistakes stemming from quality issues, financial resources and organizational behavior during rapid expansion, Mon Hue fell into a state of closure, bankruptcy and debt The failure of Mon Hue is still an event that everyone mentions This is also a great lesson for businesses in the F&B industry Reference source Phương Hà (2019,25 10) Lí Món Huế đóng cửa - câu chuyện quản lí từ nhà điều hành Easyedu From https://easyedu.vn/li-do-vi-sao-mon-huedong-cua-cau-chuyen-quan-li-tu-nha-dieu-hanh/ ( 2022,12 06) Minh Sơn (2019,10 26).‘Gót Asin’ Món Huế VnExpress From https://vnexpress.net/kinh-doanh/got-asin-cua-mon-hue-4002388.htm 06) (2022,12 ... understand, let''s find out the issue: "Hue dishes in F&B market - Microeconomic perspective" Research objectives: Find out the cause of the failure of Mon Hue chain in the F&B market, propose solutions... needs it" In the beginning, the business strategy has achieved certain success After overcoming the harsh period of the restaurant industry, Mon Hue quickly expanded its chain Only in 2014 and... businesses re-enter the F&B market in Ho Chi Minh City Research subjects: Cuisine chain of Mon Hue Practical significance: Analyze the causes of failure and propose solutions for Mon Hue businesses