final project implementing digital transformation solutions for newa group

The history of formation and development NEWA group's starting point is the mattress industry, in particular Wean - a company that manufactures bedroom furniture and gadgets in March 20

Implementing Digital Transformation solutions for

VIET NAM NATIONAL UNIVERSITY HO CHI MINH CITY UNIVERSITY OF ECONOMICS AND LAW

FINAL PROJECT

NEWA Group

Class: Digital transformation and artificial intelligence

Lecturer: Nguyen The Dai Nghia

Class code: 222MI5216

Group members:

Ho Chi Minh city, April 29, 2023

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IMPLEMENTING DIGITAL TRANSFORMATION SOLUTIONS

FOR NEWA GROUP

I Overview of Enterprise

NEWA Group can be considered as one of the most influential multi-industry investment units in the Vietnamese market today and is continuingly on the rise Formerly known as Wean Company (established in March 2012), a company specializing in the production of bedroom furniture and utilities After certain successes, the founder has gradually expanded the business field with the desire to provide consumers with a new experience, “Elevating life - Launching the future”- he always says this slogan with utmost confidence

1 The history of formation and development

NEWA group's starting point is the mattress industry, in particular Wean - a company that manufactures bedroom furniture and gadgets in March 2012, laid the foundation for the start-up process, its main business products include popular mattress lines such as pressed cotton mattresses, spring mattresses, natural latex mattresses The company was strict with themselves, demanding for each product made to build trust in consumers The beginning of 2014, marked a big step in the company's material revolution NEWA is proud to be the leader in bringing mattress products made from artificial rubber to the market The company learned and improved production techniques from European rubber factories, creating a soft mattress with high durability but the price is 20% cheaper than natural rubber When just launched, Wean natural latex mattress has resonated and gained many positive responses from consumers This leading innovation in product design and function has helped the brand gain the trust of consumers In 2015, from a small supplier, Wean promoted to a main distributor, with 2 high-end showrooms located in the most prime locations in Ho Chi Minh City

In addition to the soft mattress and warm blanket, the founder decided to elevate Wean into the NEWA group and continued his life-making journey with the Supplements Business Product sources are mainly imported directly from Europe and Korea Along with that is the development of the bird's nest industry The policy of building a modern “swallow-making" line; creating products of superior quality, bringing a new breeze to the market The next industry was bird's nest - a fertile land

in the food market Vietnam possesses a climate and many favorable conditions for raising oats, creating an abundant supply From that premise, NEWA built our own bird's nest factory in parallel with outsourcing for like-minded business partners

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Today's achievements are the result of many years of unremitting efforts NEWA Group sets itself the mission of "Creating the future, giving people a new and happy life experience", with 3 groups of activities: Technology — Industry, Trade, and Service

10 years of efforts and achievements

On this journey, NEWA Group also faced many difficulties from finding investors, industry competition, economic crisis, etc But with the solidarity and determination combined helped the company to overcome its challenges and reap many sweet fruits

Having accumulated many years of experience in the import and export industry, NEWA Group International Investment Group was officially established in

2020 with seven affiliated companies Strengths are in consumer goods such as nutritious food, furniture, and household appliances By the end of 2021, NEWA Group has built 7 branches in Ho Chi Minh City Ho Chi Minh City and associated with more than 20 agents nationwide As of December 2021, the consumer goods industry alone has reached the milestone of 3,000,000 customers

To be precise, NEWA scaled up into an Investment Group, owning 7 subsidiaries, distributing the scope of activities to the following categories: Production and Trade, Import-Export, Real Estate, etc has greatly influenced the Vietnamese market The two most typical brands are Wean - Providing sleep care products and Vinnest - Premium bird's nest; welcomed by millions of customers

2 Vision and Mission

2.1 Vision

NEWA — NEWA (New Age — New Area) aspires to open a new era, a new space; towards a more modern lifestyle The only way to keep up with the times is to keep moving forward, constantly improving With available strengths, NEWA Group always strives to bring breakthrough products to serve consumers’ lives in the best way

A in NEWA is also the leading character - Representing the aspiration to become a leading company in quality and expand its scale to many other fields The founders want to build NEWA group into a business

Steadfast in the various industries, NEWA continues to expand its business scope and realizes its ambition of elevating the Vietnamese brand name in the domestic and international markets

2.2 Mission

“Setting big goals here is how I motivate myself.”

If the orientation is too high, is it called far-fetched? This problem is always a big concern, when any company wants to scale bigger Many businessmen still have the mindset of following the old-fashioned way or imposing rigid theories that forget the "compromise" law in the marketplace NEWA always encourages employers to think bigger- while managing their dreams within reach

“There is no best, only better”

NEWA Group's staff is always actively learning new things and saying no to the way of thinking The main goal is to improve the quality of products and services to bring satisfaction to customers For example, the real estate market is sure to attract many investors, and the latecomers will use the experience of their predecessors as a basis for competition So, the only key to standing in the market is this: Continuous improvement Good orientation will help us have the motivation to strive and discover more new potentials

Additionally, as the human factor plays a huge role in the development foundation of the company, NEWA’s motto is "Make the company a second home for employees" with a professional working environment, freedom to express individual abilities and views as well as promote solidarity and mutual support Besides, NEWA also organizes many training programs to improve professional qualifications and open up many promotion opportunities

In addition to business goals, NEWA Group also focuses on building higher social values through charity or relief activities In 2021, the company was also one of the frontline units to support local soldiers in their fight against the COVID-19 epidemic with more than 500 gifts sent to each household

3 Business model and Revenue model

3.1 Business model

NEWA Group is a multi-industry investment enterprise with a diversified business portfolio The company operates in various sectors including nutritious food, furniture, household appliances, and most recently, real estate The business model of NEWA Group is primarily based on investment, development, and management of various businesses The company invests in different sectors and develops businesses that are profitable and sustainable in the long run NEWA group aims to create value and grow its businesses while maintaining its reputation and brand image

In the nutrition culinary sector, NEWA has their own factory Self-reliance in production will help businesses control input and output quality easily, as well as be flexible in improving quality and design The factory owns modern production lines,

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applying European technology, for high productivity and synchronous product quality

In addition, the preliminary processing and distillation process are closely monitored and manually managed to ensure that the nutritional composition of the bird's nest is preserved However, this direction also brings many challenges because of high operating costs and the need for continuous upgrading of expertise to keep up with the times In the mattress and warm blanket sector, all machines and equipment used apply modern technology, meet international standards and the raw materials are 100% produced in Vietnam This is to replace previously imported products, helping customers save costs and easily check quality or apply warranty policy NEWA is one

of the leading companies in manufacturing, processing and supplying furniture, bedroom gadgets and nutritious food In the real estate sector, the company invests in land and property development projects, and provides property management services The company has developed and owns several residential and commercial properties

in Vietnam Not only that, the Group is still on track to expand its business scale and encroach into industries such as Commercial Services and others

Overall, the business model of NEWA Group is focused on identifying and developing opportunities in various sectors, investing wisely, and creating value for stakeholders and customers

3.2 Revenue model

NEWA Group's revenue comes mainly from Modern trade sources: supermarkets and small retailers, online platform retailers and commissioners (although admittingly, NEWA only partnered with one big online sales channel- Shopee)

With mattress revenue stream, NEWA group’s most common ones are: + Direct to consumer: The company earns revenue by charging a markup on the cost of manufacturing the mattress and selling mattresses directly to consumers through a website or physical store

+ Wholesale: This model involves selling mattresses to retailers at a discounted price The retailer then sells the mattress to the end consumer at a markup, and the mattress company earns revenue from the wholesale price

+ Subscription: NEWA offers a subscription service where customers pay a monthly fee for access to a new mattress every few years The company earns revenue

by charging a monthly fee and manufacturing and delivering new mattresses as needed

The revenue model of the bird nest final product typically similar mattress income stream, however with processed/raw materials revenue model typically involves the following as extras:

+ Value-added products: NEWA manufactures their own value-added products, such as bird's nest soup or bird's nest skincare products These products can help the company generate additional revenue streams and may be sold directly to consumers or through retailers

+ Membership programs: NEWA does offer membership programs that provide access to exclusive products or discounts on purchases for other businesses or the franchisers This can be a way to generate recurring revenue and build customer loyalty

The revenue model of NEWA real estate sector typically involves the following:

+ Sales commission: This is the primary source of revenue for NEWA’s real estate sector - the sales commission earned from buying and selling properties NEWA earns a percentage of the sale price as a commission for facilitating the transaction + Property management fees: NEWA also charges property management fees for managing properties on behalf of property owners This can include services such

as tenant screening, rent collection, and property maintenance

+ Property development: The company seldom generates revenue through property development too This can involve purchasing land, building properties, and then selling or leasing them

Overall, the revenue model of NEWA group relies heavily on human resources, with great room and potential for incorporating Al technology into its operation systems at any levels

4 Business operation

As NEWA eroup has many industries and different kinds of products, these are the overall business operation system of the all 7 company in NEWA system: 4.1 Business operation of mattress sectors

Product Development: This department is responsible for designing, testing, and manufacturing new mattress models They also work on improving existing products by incorporating customer feedback and new materials

Marketing and Sales: This department is responsible for promoting NEWA's products and generating sales through various channels, such as e-commerce

platforms, retail stores, and social media They also work on developing marketing campaigns and strategies to reach new customers

Customer Service: This department is responsible for ensuring that customers are satisfied with their purchases and resolving any issues that may arise They handle customer inquiries, complaints, and returns

Supply Chain and Logistics: This department is responsible for managing the flow of materials and products throughout the company's supply chain They work on sourcing materials, managing inventory, and coordinating transportation and shipping

Finance and Operations: This department is responsible for managing the company's finances, accounting, and reporting, as well as ensuring smooth operation throughout the company They work on improving operational efficiency by automating processes, reducing waste, and improving customer service

Sales and Marketing: This department is responsible for generating leads, promoting properties, and closing deals with potential buyers, sellers, or tenants They work with a variety of marketing channels including digital advertising, social media,

or events

4,2 Business operation of real estate sectors

Property Management: This department takes care of the day-to-day operations

of rental properties, such as collecting rent, managing repairs and maintenance, and handling tenant requests They also perform tenant screening and _ lease administration

Property Development: This department 1s responsible for identifying and developing properties that have potential for investment, such as land acquisition, zoning, and construction They also work on improving the value of the company's

current real estate assets

Finance and Operations: This department is responsible for managing the company's finances, accounting, and reporting, as well as ensuring smooth operation throughout the company They also work on improving operational efficiency by automating processes, reducing waste, and improving customer service

Legal and Compliance: This department ensures that the company is compliant with all relevant laws and regulations, such as real estate laws, tax laws, and data privacy regulations They also handle disputes and legal matters that arise from the

company's operations

4.3 Business operation of bird nest sectors

Harvesting and Processing: This department is responsible for harvesting bird's nests from natural and man-made structures and processing them into various forms such as dried nests or ready-to-use bird's nest products

Quality Control and Assurance: This department is responsible for ensuring the quality and safety of the bird's nest products before they are released for consumption They also work on developing and improving existing quality control standards as well as procedures

Sales and Marketing: This department 1s responsible for promoting and selling bird's nest products to various markets such as restaurants, traditional Chinese medicine shops, and direct-to-consumer channels They also work on developing effective marketing campaigns to reach new customers

Research and Development: This department is responsible for conducting research to develop new bird's nest products and improve existing ones They also work on identifying potential markets for bird's nest products and developing new ways to enjoy them

Supply Chain Management: This department is responsible for managing the flow of materials and products throughout the company's supply chain They work on sourcing high-quality bird's nests, managing inventory, and coordinating transportation and shipping

Il Analysis

1 SWOT

1.1 Strengths

® Established player in the Vietnamese real estate market with a growing portfolio of high-end residential and commercial properties

® NEWA Mattress has a range of high-quality and affordable products that cater

to the growing demand for comfortable bedding solutions

¢ NEWA Bird Nest has a reputation for producing high-quality bird's nest products that are popular in Asia due to their health benefits

e Experienced management team with a deep understanding of the local market and consumer preferences

1.2 Weaknesses

® Dependence on the Vietnamese market, which can be affected by economic, political, and regulatory risks

Limited international presence and brand recognition compared to established competitors in the industry

Limited product diversification compared to other companies in the industry 1.3 Opportunities

Expansion into new markets in Southeast Asia or other regions to increase market share

Investment in research and development to enhance product offerings and improve customer satisfaction

Potential for partnerships with other companies in the industry to create product synergies, expand reach, and diversify product offerings

Growing demand for eco-friendly and sustainable products, which NEWA could cater to by incorporating more sustainable materials in mattresses and properties

1.4 Threats

Increasing competition from not only established companies but also new entrants in the industry

Economic instability and regulatory changes in Vietnam and other markets, which could impact consumer spending and demand

Rapidly changing customer preferences and market trends,which could require NEWA to adapt its products and services to meet demand

Supply chain disruptions caused by geopolitical events or natural disasters, which could impact the production and distribution of NEWA's products

2 Porter’s Five Forces

Threat of new entrants: The threat of new entrants in the mattress, real estate, and bird's nest industries in Vietnam can be considered relatively low These industries require high initial investments and substantial knowledge and expertise,which can act

as barriers to entry However, there are still some smaller players that could potentially enter the market and compete with NEWA Group in the future

Bargaining power of suppliers: The bargaining power of suppliers is low for NEWA Group, as it has established relationships with its suppliers and has a strong reputation in the market However, the availability and cost of raw materials,such as latex for mattresses and bird's nest for the bird's nest industry, can have an impact on the company's profitability

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