Business plan for food products of nova consumer group in the period 2022 2025

TASKS AND CONTENTS: Preparing the Business Plan including the resources, competitive advantage, SWOT analysis, production, marketing, HR, and financial plan for Food Products of Nova Co

DOAN HAI DANG

BUSINESS PLAN FOR FOOD PRODUCTS

OF NOVA CONSUMER GROUP

Instructor: Assoc Prof Dr Pham Quoc Trung

The Examiner 1: Dr Phan Trieu Anh

The Examiner 2: Dr Do Thanh Luu

Master’săthesisăisădefendedăatăHCMăcityăUniversityăofăTechnology, VNU- HCM City on 22 July 2022

TheăboardăofătheăMaster’săThesisăDefenseăCouncilăincludes:

(Please write down the full name and academic rank of each member of the Master Thesis Defense Council)

1 Dr Nguyen Vu Quang, Chairman

2 Dr Le Thi Thanh Xuan, Secretary

3 Dr Phan Trieu Anh, Reviewer 1

4 Dr Do Thanh Luu, Reviewer 2

5 Assoc Prof Dr Pham Quoc Trung, Member

VerificationăofătheăChairmanăofătheăMaster’săThesisăDefenseăCouncilăandătheăDean of School of Industrial Management after the thesis being corrected (If any)

CHAIRMAN OF THE COUNCIL DEAN OF INDUSTRIAL MANAGEMENT

VIETNAM NATIONAL UNIVERSITY

HO CHI MINH CITY

HO CHI MINH CITY UNIVERSITY

OF TECHNOLOGY

SOCIALIST REPUBLIC OF VIETNAM Independence – Freedom - Happiness

T HE TASK SHEET OF MASTER’S THESIS

Full name: DOAN HAI DANG Student code: 2070610

Date of birth: 13/09/1992 Place of birth: Vinh Long

Major: Business Administration Major code: 8340101

I THESIS TOPIC:

Business Plan for Food Products of Nova Consumer Group in The Period

2022-2025 / K Ho ch Kinh Doanh Cho Các S n Ph m Th c Ph m C a T p oàn

Nova Consumer

II TASKS AND CONTENTS:

Preparing the Business Plan including the resources, competitive advantage, SWOT analysis, production, marketing, HR, and financial plan for Food Products

of Nova Consumer Group in The Period 2022-2025

III TASKS STARTING DATE:

March 1st 2022

IV TASKS ENDING DATE:

June 30th 2022

V INSTRUCTOR:

Professor Pham Quoc Trung

HCM City, date month year

INSTRUCTOR

(Full name and signature)

HEAD OF DEPARTMENT (Full name and signature)

DEAN OF INDUSTRIAL MANAGEMENT

(Full name and signature)

I would like to acknowledge my colleagues from my company at Novagroup and Nova Consumer Group for their wonderful collaboration They provided me with the tools that I needed to choose the right direction and successfully complete my dissertation

Finally, I could not have completed this dissertation without the support of my parents Their wise counsel and sympathetic ear are always there for me

SUMMARY OF MASTER’S THESIS

This thesis presents the business plan for food products of Nova Consumer Group

in the period 2022 to 2025 in Vietnam, including raw meat (pork, beef, chicken, eggs), processed foods including sausages, canned goods, and rice cakes

To establish Nova Consumer's business plan, the writer analyzed macroeconomic indicators to analyze their impact on consumer spending and prices of feed, fertilizer, and raw materials In addition, the writer has analyzed micro-economic indicators to position the company in the relevant market and give appropriate development strategies Through the research process, the writer analyzes the business concept of Nova Consumer, which is the closed production model called 3F Feed - Farm - Food Accordingly, Nova Consumer owns technologies for manufacturing vaccines, veterinary drugs, and animal feed Then, they use them to grow livestock and poultry on their farms After that, they simultaneously sell raw meat products to the market and uses them as input materials for the production of processed foods such as sausages and canned goods

As Vietnam's meat consumption market is growing well following the recovery of GDP growth rate after the pandemic, Nova Consumer can reach potential customers who are households and young people In particular, with the expansion of online shopping activities due to the impact of the pandemic, Nova Consumer has the opportunity to reach

49 million online shopping customers in Vietnam Nova Consumer also can easily cooperate with other members of Novagroup to distribute and retail food products These are the unique advantages of Nova Consumer compared to competitors such as Masan Meatlife, and CP Group

From 2022 through 2025, the writer proposes that Nova Consumer can accelerate the development and business expansion by continuing the 3F model by expanding the number of herds and poultry on farms; upgrading, expanding, and building new food processing factories Besides, the writer recommends that Nova Consumer can take advantage of the development of online marketing channels according to the combined method of 4P and 4C In addition, the writer proposes that Nova Consumer coordinate with other member companies of Novagroup to expand the market, boost sales, and achieve an expected net profit after tax of up to VND 660 billion and expected revenue

to reach 9,450 billion by 2025

Lu năV nătrình bày K ăho chăkinhădoanhăcácăm tăhàngăth căph măc aăCông Ty

C ăPh năNovaăConsumer giaiăđo nă2022ăđ nă2025ăt iăVi tăNam,ăbaoăg m cácăs năph m

th tăs ngă(heo,ăbò,ăgà,ătr ng),ăth căph măch ăbi nănh ăxúcăxích,ăđ ăh păvàăbánhăg o

ăthi tăl păK ăho chăkinhădoanhăcho Nova Consumer, tácăgi đãăphânătíchăcácăch ă

s ăkinhăt ăv ămôăđ ăphânătíchătácăđ ngăđ năchiătiêuăc aăng iătiêuădùngăvàăgiáăth că n,ăphânăbónăvàănguyênăli u.ăNgoàiăra,ătácăgi c ngăphânătíchăcácăch ăs kinhăt ăviămôăđ ă

đ nhăv ăcôngătyătrênăth ătr ngăliênăquanăvàăđ aăraăchi năl căphátătri năphùăh p

Quaă quáă trìnhă nghiênă c u,ă tácă gi phân tích mô hình kinhă doanhă c aă NovaăConsumerălàămôăhìnhăs năxu tăkhépăkínămangătênă3FăTh că nă– TrangăTr iă– Th că

Ph m.ăTheoăđó,ăNovaăConsumerăs ăh uăcông ngh ăs năxu tăv căxin,ăthu căthúăy,ăth cănăch nănuôi.ăSauăđó,ăh ăs ăd ngăchúngăđ ăch nănuôiăgiaăsúcăvàăgiaăc mătrongătrangătr iă

c aămình.ăSauăđó,ăh ăv a bánăcácăs năph măth tăs ngăraăth ătr ngăvàăv aăs ăd ngăchúngălàmănguyênăli uăđ uăvàoăđ ăs năxu tăth căph măch ăbi nănh ăxúcăxích,ăđ ăh p

Doăth ătr ngătiêuăth ăth tăc aăVi tăNamăđangăt ngătr ngăt tătheoăđàăph căh iăc aă

t căđ ăt ngătr ngăGDPăsauăđ iăd ch,ăNovaăConsumerăcóăth ăti păc năđ iăt ngăkháchăhàngăti măn ngălàăcácăh ăgiaăđìnhăvàăgi iătr ă căbi t,ăv iăvi căm ăr ngăho tăđ ngămuaă

s mătr cătuy nădoă nhăh ngăc aăđ iăd ch,ăNovaăConsumerăcóăc ăh iăti păc nă49ătri uăkháchăhàngămuaăs mătr cătuy năt iăVi tăNam.ăNovaăConsumerăc ngăcóăth ăd ădàngăh pătácăv iăcácăthànhăviênăkhácăc aăNovagroupăđ ăphânăph i vàăbánăl ăcácăs năph măth că

ph m.ă âyălàănh ngăl iăth ăriêngăc aăNovaăConsumerăsoăv iăcácăđ iăth ănh ăMasanăMeatlife, CP Group

T ăn mă2022ăđ năn mă2025,ătácăgi đ ăxu tăNovaăConsumerăcóăth ăđ yănhanhăvi căphátătri năvàăm ăr ngăkinhădoanhăb ngăcáchăti păt cătri năkhaiămôăhìnhă3Făb ngăcáchăm ă

r ngăs ăl ngăđànăgiaăsúc,ăgiaăc măt iăcácătrangătr i;ănângăc p,ăm ăr ngăvàăxâyăd ngăm iăcácănhàămáyăch ăbi năth căph m.ăBênăc nhăđó,ătácăgi khuy năngh ăNovaăConsumerăcóă

th ăt năd ngăl iăth ăc aăvi căphátătri năcácăkênhăti păth ătr cătuy nătheoăph ngăth căk tă

h p gi aămôăhình 4Păvàă4C.ăNgoàiăra,ăng iăvi tăđ ăxu tăNovaăConsumerăph iăh păv iăcácăcôngătyăthànhăviênăkhácăc aăNovagroupăđ ăm ăr ngăth ătr ng,ăđ yăm nhădoanhăs ,ă

đ tăl iănhu năsauăthu ăd ăki nălênăđ nă660ăt ăđ ngăvàădoanhăthuăd ăki năđ năn mă2025ă

đ tă9.450ăt ăđ ng

COMMITMENT

I hereby declare that the topic: "Business Plan For Food Products Of Nova Consumer Group In The Period 2022-2025" is an independent research work under

the guidance of my supervisor: Associate professor Ph.D Pham Quoc Trung

This topic is the product that I have made efforts to research during my study at the

Ho Chi Minh City University of Technology as well as the internship at the Nova Consumer Group

The data and results presented in the report are completely honest, I would like to take full responsibility and discipline of the subject and the school if there are problems

AUTHOR

DOAN HAI DANG

TABLE OF CONTENTS

THE TASK SHEET OF MASTER’S THESIS i

ACKNOWLEDGEMENT ii

SUMMARY OF MASTER’S THESIS iii

COMMITMENT v

TABLE OF CONTENTS vi

List of tables ix

List of Figures x

I INTRODUCTION 1

1.1 Background 1

1.2 Business Opportunity 2

1.3 Objective of the thesis 3

1.4 Introduction of methodology 4

1.5 Key contents of the thesis 4

II METHODOLOGY FOR BUSINESS PLAN ANALYSIS 6

2.1 Frameworks to analyze economic, industry, and market environment 6

2.2 Methods to collect data to measure market potential 9

2.3 Methods to do feasibility business analysis 10

III BUSINESS CONCEPT INTRODUCTION 13

3.1 Introduction of the food products of Nova Consumer Group 13

3.2 Industry 15

3.3 Key partnerships 17

3.3.1 Supply chains partner 17

3.3.2 Financial institutions 18

3.4 Ethical and legal considerations 18

3.5 Economic and market analysis 19

3.6 Economic environment analysis 21

3.6.1 Inflation 21

3.6.2 Interest 22

3.7 Industry analysis 23

3.8 Market potential analysis 24

3.8.1 Target customer 24

3.8.2 Customer behavior 26

3.9 Business model 27

3.9.1 The competitive landscape 27

3.9.2 Business Canvas Model 29

IV BUSINESS PLAN 33

4.1 Business Resources 33

4.2 Competitive advantage 38

4.3 SWOT analysis 39

4.3.1 Strength 39

4.3.2 Weakness 41

4.3.3 Opportunity 41

4.3.4 Challenge 42

4.4 Growth strategy 42

4.5 Production plan 44

4.6 Marketing Plan 44

4.6.1 The combination strategy of 4Cs and 4Ps 44

4.6.2 Applying e-marketing 46

4.7 Human resource plan 49

4.8 Financial projection and analysis 50

V SUSTAINABILITY ANALYSIS 53

5.1 Risks 53

5.1.1 Identify the risks 53

5.1.2 Analyze the impact 55

5.1.3 Prioritize risks based on business objectives 57

5.1.4 Respond to the risk 57

5.1.5 Monitor results 58

5.2 Business plan’s limitations 58

5.2.1 Potential competitors in the future 58

5.2.2 Potential impacts of climate change and epidemic 59

5.2.3 Potential impacts of economic crisis 59

CONCLUSION 61

REFERENCES 63

APPENDIX 68

Table 4.2 The animal feed factories of Nova Consumer 35

Table 4.4 Nova Consumer's Audited consolidated financial statements for

Figure 3.3 Pork consumption per capita in Vietnam from 2019 to 2021

with forecasts until 2029

I INTRODUCTION

In the first chapter of this thesis, we will briefly introduce Nova Consumer’săhistory and its current business activities In detail, we will have an overview of Nova Consumer's business opportunities in the food industry as a member of the Novagroup Furthermore, we also present the objectives of this thesis as well as the methodology to carry out this thesis

1.1 Background

Nova Consumer Group is a member of the multi-industry enterprise named Novagroup Novagroup was established in September 1992 and has been investing in many industries like real estate, technology, food & beverage, travel, agricultural, food, and consumer goods As a member of Novagroup, Nova Consumer Group has gained a top position in the agricultural and food sector, which includes providing wide-ranging and ideal solutions for farmers and products for the food market, including veterinary medicine, vaccines, animal feed, and livestock (pork meat, beef, chicken, egg) Besides agricultural and fresh food products, since 2019 Nova Consumer Group has started investing in the consumer goods industry and has become a reliable supplier of safe and quality products in the market via their acquirement processed food manufacturing company, tea farm, and coffee producer However, like other companies, Nova Consumer Group confronted the year

2021 with lots of difficulties as the negative impact of the Covid-19 pandemic In the context of the Delta variant caused the fourth coronavirus wave triggered in late April

2021, Vietnam not only faced serious consequences in the health sector with a high number of people infected with the virus and death but also serious impacts in every sector of the economy

record-The pandemic has left businesses suffering Economic indicators did not meet expectations due to the simultaneous and comprehensive implementation of blockade and isolation measures to prevent epidemics and, the overall economy of Vietnam recorded its largest decline in GDP in more than two decades (Viet Nam News, 2021)

Particularly, In the third quarter of 2021, Vietnam witnessed a negative GDP growth rate for the first time in many years (Tomoya Onishi, 2021)

Figure 1.1 Vietnam’s GDP and CPI in H1/2022 (Minh Son & Tien Thanh (2022)

As an important part of the economy, the consumer goods sector also faced a difficult year with a low growth rate As government data, growth in Vietnam's real gross domestic product slowed to 2.58% in 2021, dropping from 2.91% the year before as the coronavirus pandemic casts a long shadow over one of Southeast Asia's key economies (Tomoya Onishi, 2021)

1.2 Business Opportunity

Even in the pandemic, Nova Consumer Group has archived a significant milestone as its official participation in the consumer goods industry with the launching of many nutritional products, beverages, and food products in Vietnam during the year 2021

During the long lockdown period, customers of Nova Consumer Group were forced to adapt to the unexpected situation, leading to significant changes in their daily routines They have reevaluated what matters the most to them and reprioritized

their needs towards safety and essential products and people prefer to stay more at home rather than go out (Minh, Jimmy, Binh 2021) This is a great opportunity for Nova Consumer Group to reach a large number of potential customers via the internet, e-commerce platform, and social network In detail, over 49 million people purchased consumer goods online in 2019 making Vietnam one of the most attractive e-commerce in Asia (Ha Thanh, 2021)

Given the new coronavirus variant, the pandemic will continue affecting Vietnam's economic development and consumer lives at least for the next 6 months, posing both challenges yet emerging opportunities for businesses to revive and grow

2022 has been an even more challenging year than its predecessor The good news is that things are slowly rebounding At the end of 2021, 97.9% of the population over

18 years old has been provided the first vaccine, with over 86.3% receiving both doses (Ministry of Health's 2021) This is so important to avoid any further breakouts Vietnam’săreboundăisălikelyătoăbeăaăgradualăone,ăwithătheăimpactăfeltăinto 2022 as we look to a new normal life next year Despite the continued rollout of vaccination, Vietnamese people remain very concerned about the economic recovery as well as their financial situation, which is likely to impact their spending power and behaviors, especially the food products The higher food prices made most households worse off Average welfare was found to increase because the average welfare loss of households whose welfare declined (net purchasers) was smaller than the average welfare gain of those whose welfare increased (Vu & Glewwe, 2011) Therefore, preparing a business plan that reflects the changing opportunities and challenges of the food business market is essential and important for the Company

1.3 Objective of the thesis

Analyzing the food industry and market in Vietnam and the strengths, weaknesses, opportunities, and threats of Nova Consumer and its key partnerships Make the business context diagnosis and build the appropriate business plan for the food products of Nova Consumer Group, especially the 3F models and the cooperation with other members of Novagroup

Revealing and analyzing the potential risks and the limitations of Nova ConsumerăGroup’săbusinessăplan for the period 2022-2025

1.4 Introduction of methodology

In order to establish and analyze factors that can affect Nova Group's food business plan, the writer analyzed macroeconomic and microeconomic indicators Macroeconomic indicators need to be studied and evaluated to be included in the business plan because they are related to consumer spending, and the prices of basic commodities such as animal feed, fertilizers, and raw materials Besides, microeconomic indicators need to be analyzed when planning a business plan because

it will help position the company in the relevant market and develop appropriate development strategies

The data collected to analyze for this thesis includes public data from the government, business data (financial report, annual report, sales results, etc) of the company and other companies in the same industry; news and public announcement

of the company and other businesses; experience from local partners and/or experts via the journal, interview, newspaper

The feasibility business analysis will be made with varied contents from both financial issues such as interest rates, costs and human issues such as human resource management, internal marketing, etc The making of a feasibility business analysis shouldă applyă aă “mixă andă match”ă appropriateă methodsă that vary for each of its categories, including Organic strategic planning methodology, Goal-based Strategic Planning Methodology, Scenario Strategic Planning Methodology, and Business Canvas model

1.5 Key contents of the thesis

This thesis presents the business plan for food products of Nova Consumer Group in the period of 2022 to 2025 in Vietnam This thesis consists of 5 chapters: (i) In Chapter I - Introduction,ăweăintroduceătheăbackgroundăofăNovaăConsumer’săbusiness, their opportunities, and the objective of this thesis

(ii) In Chapter II - Methodology For Business Plan Analysis, we introduce the frameworks to analyze the economic, industry, and market environment, methods to collect data to measure market potential, and the way to do feasibility business analysis

(iii) In Chapter III - Business Concept Introduction, we introduce the food products

of Nova Consumer, the outlook of the food-industry in Vietnam, key partnerships of Nova Consumer; Ethical and legal considerations; Economic, industry, and market analysis; Economic environment and industry analysis; Market potential analysis;ăandăNovaăConsumerăGroup’săbusinessămodel (iv) In Chapter IV - Business Plan was prepared with the following components: Business resources; competitive advantage; SWOT analysis; business strategy; Growth strategy; production, marketing, HR plan, and financial projection (v) In Chapter V - Sustainability Analysis, we take the forecast on risks and review the potential limitations of the Business plan

To sum up, we can see that the Covid-19 epidemic situation in Vietnam has passed a dangerous period and the Vietnamese economy is recovering from the Covid-19 pandemic This is a good opportunity for Nova Consumer to expand its business activities with food product lines In particular, with the expansion of online shopping activities due to the impact of the pandemic, Nova Consumer has the opportunity to reach 49 million online shopping customers in Vietnam

II METHODOLOGY FOR BUSINESS PLAN ANALYSIS

In the second chapter of the thesis, we examine the framework analysis of the situation of the Vietnamese economy, the food industry, and the food market environment At the same time, the author also clarifies how to collect data to evaluate the market potential and prepare a feasibility business analysis

2.1 Frameworks to analyze economic, industry, and market environment

The objective of this thesis is to develop a complete business plan for food

productsă ofă Novaă Consumeră Groupă (hereinafteră referredă toă asă “the Company” or

“Nova Consumer”) in the Vietnamese market from 2022 to 2025 To make this plan

effective and feasible, it is necessary to establish a plan based on a comprehensive methodology of both macroeconomic and microeconomic parameters

To analyze the Vietnamese economy, we have to look at the macroeconomic data Specifically, we need to analyze parameters of macroeconomics that are likely

to affect the Company's consumer goods business In particular, the indicators to be collected for evaluation include:

- Nation's Income: it is important to acknowledge the significance of just measuring a Nation's Income It helps us to understand how the economy is doing as we go about our lives as well as helps the economists and the policymakers use concrete data on which to base their judgments (Mankiw, 2017) A nation's Income might measure by Gross domestic product (GDP), the market value of all final goods and services produced within a country in a given period; Grossănationalăproductă(GNP),ătheătotalăincomeăearnedăbyăaănation’săpermanent residents; and GDP per person, the income and expenditure of the average person in the economy

First, the writer will collect information about the GDP growth forecast from 2022-2025 from state agencies and economic experts in Vietnam The GDP growth in Vietnam will be an important basis for Nova Consumer's leadership

to make investment decisions and business strategies Then, the author evaluates

whether Vietnam pass the period of slow and negative growth due to blockade measures and whether consumption and foreign direct investment flow increased again As a result, the author will propose that Nova Consumer can rely on GDP growth signals to expand production scale, and market products to catch the wave of consumption that has just recovered The author can also devise strategies for Nova Consumer to attract investment capital from the public and foreign investors during the period of GDP growth up to 7% in Vietnam from now to 2025 (Ministry of Planning and Investment, 2020)

- Measuring the Cost of Living: This indicator helps us to understand how economists measure the overall level of prices in the economy and how they use price indexes to correct economic variables for the effects of inflation Price indexes allow us to compare dollar figures from different points in time and,

therefore, get a better sense of how the economy is changing The Cost of Living might measure by the consumer price index (CPI) is a measure of the overall

cost of the goods and services bought by a typical consumer

First, the writer will collect information about the CPI forecast for the

2022-2025 period from state agencies and economic experts in Vietnam The price of food and the price of essential goods and services increased in line with the price

of raw materials was the main reason why Vietnam’s CPI in May 2022 increased by 0.38% (Song Ha, 2022) Vietnam’săCPIăină2022 is forecasted to continue to rise as domestic commodity prices continue to rise, putting great pressure on production and business activities After evaluation, the author proposes that Nova Consumer needs to monitor these indicators in its business plan to devise an appropriate growth plan, and control input costs to limit the increase in selling prices of food products, making it difficult to attract customers

- Inflation rate: Risks in corporate finance are often associated with inflation in the economy Though according to published data, Vietnam is handling inflation very well compared to previous years (Van Anh, 2021) The domestic

price of petroleum and LPG products increased due to the impact of the strong increase in world prices when the general demand in the world increased (Thu Nguyen, 2022)

First, the writer will collect information about Vietnam's inflation forecast for the 2022-2025 period Economists have said that Vietnam's inflation in 2022 will be around 3.8-4% (Song Ha, 2022) From now to 2025, the economy will still be volatile, and the price of crude oil and input materials for production will increase After evaluation, the author proposes that Nova Consumer needs to monitor these indicators in its development plan to be proactive in backing up input materials for food production such as fertilizers, animal feed, veterinary drugs, etc., and control the selling price of products to limit negative impacts

To analyze the food industry and market environment, we have to look at the microeconomic data such as firm behavior and the organization of the industry In particular, the indicators to be collected for evaluation include:

- Costs of Production: The writer will collect this information from sources from the Ministry of Agriculture and Rural Development, articles, and research on Vietnam's agricultural industry, especially the pig farming industry because pigs are the main products of the Nova Consumer as well as the main raw material for sausage and canned food products After understanding the proportion of production costs, the writer will put into the business plan recommendations to optimize production costs, and limit the variable costs of inputs of the livestock industry such as animal feed and veterinary drugs to help Nova Consumer maintain its competitive position by controlling input prices

- Firms in relevant markets: Through reports of the livestock industry from state agencies, and economic experts, the writer will identify companies in the same relevant market as Nova Consumer From there, it will help locate the size of the industry, and its development potential, and make specific recommendations for Nova Consumer's growth, marketing, and production plans

- Market share and Competition: Through reports on the livestock industry from state agencies, and economic experts, the writer will determine the market share

of the food industry and the competition of companies in the industry From there, the writer will compare the advantages and disadvantages of Nova Consumer compared to rival companies Finally, the writer will make comments

on the competitive advantages of Nova Consumer compared to competitors to propose optimal business plans

The collection of macroeconomic and microeconomic data will be conducted through reviewing and synthesizing the above data from sources of government agencies such as the annual or monthly reports of the General Statistics Office, the Ministry of Agricultural, the Ministry of Planning and Investment, the Ministry of Trade, other authority organizations, NGOs, and reports of reputable market research units such as Nielson, Kantar In general, the above data will be carefully analyzed and used as a reference when analyzing the indicators of the Vietnamese economy in general as well as the food industry in Vietnam in particular

2.2 Methods to collect data to measure market potential

The market potential is an estimate of the amount of money that the Company can expect to make from the product or service they plan to market Their estimate will only be as good as the information they use and the assumptions they make There are seven steps to estimating market potential (Karen & Gary, n.d.):

a) Define the market segment

b) Define the geographic boundaries of the market

c) Define the competition

d) Define the market size

e) Estimate market share

f) Determine the average annual consumption

g) Estimate an average selling price

The data required for the above steps might include:

- Research sales results that have been achieved by other companies in the same industry The lessons of them looking to sell into the new markets can reveal the optimum routes, the barriers to adoption, and the appetite for new brands

- News or public announcements of other businesses that contain their experience

of adapting to the new market, in the busy and slow seasons

- Experience from local partners and/or experts via interview It is probably one

of the best ways of calibrating expectations As the Company will be working with many different counterparties, this can span everything from local professional services firms such as lawyers and accountants, to warehousing, distribution, or media buying agencies

The parameters will be processed to assess Nova Consumer's position in the food industry in Vietnam, and estimate market share and competitors From there, Nova Consumer can use these data to build competitive advantages, product marketing strategies, and production plans in line with its capabilities

2.3 Methods to do feasibility business analysis

A feasibility business analysis will have varied contents from both financial issues such as interest rates, and costs and human issues such as human resource management, internal marketing, etc Therefore, there is no single optimal method for creating a feasibility business analysis The making of a feasibility business analysisăshouldăapplyăaă“mixăandămatch”ăappropriateămethodsăthat vary for each of its categories Possible methods when constructing them include:

- Organic strategic planning methodology uses an approach called storyboarding This approach allows business owners to develop unique business ideas and stay

on top of important business matters such as the business’ă culturală valuesăthrough dialogue and storyboarding techniques Next, the strategic planning methodology focuses on articulating a company's vision In the case of Nova Consumer, this approach can be implemented through a combination of two

stories There are the story of a closed food production model from input materials, and qualified farms to product food production according to modern processes, and the story of the symbiosis and mutual development between Nova Consumer and other members of Novagroup

- Goal-based Strategic Planning Methodology is suitable for established organizations or businesses seeking more complex strategic planning methodologies (Jason Westland, 2020) It is the most frequently used strategic planning model, which startsă withă ană analysisă ofă aă business’ă strengths, weaknesses, threats, and opportunities In the case of Nova Consumer, we can use the strategic planning model to identify issues and goals which Nova Consumer should prioritize for their business objectives, such as expanding the 3F production model, implementing online sales and digital marketing activities, and co-development with other member companies of Novagroup

- Scenario Strategic Planning Methodology is another common strategic planning methodology to consider, which is highly effective in identifying issues, goals, and external environments (Jay Ogilvy, 2015) It is useful for Nova Consumer

to prepare for a variety of scenarios that are the result of external forces of changes in the business environment The strategic planning model starts with establishing vulnerabilities that could affect NovaăConsumer’săbusiness such as high inflation rate, fluctuations in raw material prices, and competition in the market After identifying possible vulnerabilities, the company can look into strategies that can use for responding to the prevailing vulnerabilities

- The Business Canvas Model is a well-designed model, simple yet powerful which represents content, structure, and transaction management designed in such a way so that it can create values through the exploitation of business opportunities A business model canvas is also used to describe, visualize, evaluate, and change the existing business model (Amit & Zott, 2001)

Macroeconomic indicators such as GDP, GNP, CPI, and inflation rate need to

be studied and evaluated to be included in the business plan because they are related

to consumer spending, and prices of basic commodities such as animal feed, fertilizers, and raw materials Besides, micro-economic indicators such as production costs, competitors, and market share also need to be analyzed when planning a business plan because it will help position the company in the relevant market and develop appropriate development strategies The market potential and feasibility business analysis also need to be completed and applyăaă“mixăandămatch”ăappropriateămethods that vary for each of its categories to assess Nova Consumer's position in the food industry in Vietnam and its business canvas From there, Nova Consumer can use these data to build competitive advantages, product marketing strategies, and production plans in line with its capabilities

III BUSINESS CONCEPT INTRODUCTION

In the third chapter on introducing the business concept, the author will present the key products in the food industry of Nova Consumer At the same time, this chapter will also provide a detailed look at the food industry, the company's potential competitors, supply chain partners, as well as the growth opportunities of this industry through different analysis segments on the economy, markets, customers, and business models

3.1 Introduction of the food products of Nova Consumer Group

Nova Consumer Group is a member of the multi-industry Novagroup In the beginning, Novagroup was established in September 1992 with the original name

Currently, Nova Consumer Group has been operating effectively and sustainably in many business areas The Company always plays a key role in providing wide-ranging and ideal solutions for farmers and products for the food market, including veterinary medicine, vaccines, animal feed, and livestock (pork

meat, beef, chicken, egg) In which, Nova Consumer Group is holding the number one position in the veterinary medicine and aquatic medicine trading market These businesses all comply with the highest international standards in the industry such as HACCP, WHO-GMP, GLOBAL G.A.P, and the entire business is integrated and managed by ERP-Oracle software

Besides agricultural and fresh food products, since 2019 Nova Consumer Group has started to invest in the consumer goods industry In 2020-2021, Nova Consumer Group archive a significant milestone as its official launching of many foods, nutritional, and beverages products, including (Nova Consumer Group, 2021):

 Food Products: pork meat, beef, chicken, egg, and processed food (the processed sausage under the brands: Xuxifarm, Be Khoe, Xuc xich Vua, the rice cake under the brand Te Te, the canned foods under the brand Master T)

 Beverages Products: Rock Energy – energy drinks, PhinDeli – instant coffee, Cau Dat Farm – tea;

 Nutritionăproducts:ăN’Joyă– nutrition drinks with fruit-flavored milk, YenDeli – bird nest products, FruitDeli – packed fruits

Figure 3.1 List of products of Nova Consumer (Nova Consumer Group, 2021)

3.2 Industry

Vietnam has a great geographic advantage bordering many Asian countries such

as China and the emerging markets of Indochina, giving it a massive advantage as a country with both local consumption and a hub to reach other food markets The country is the sixth most populous in Asia behind China, India, Indonesia, Japan, and the Philippines Nelson Woo, regional commercial director, Worldpanel Division Asia, Kantar, said with its population of more than 90 million, Vietnam remains a primeă marketă foră bothă locală andă regională FMCGă players:ă “Aă relativelyă youngăconsumer base, growing per capita income, and increasing sophistication of use in both mobile and tech puts Vietnam high on the attractiveness index for investors, brandsăandămanufacturers.” (Viet Nam News, 2021)

As an agricultural country, the livestock industry is considered a strategic sector

of the Vietnamese economy and is receiving active support from the State in the development of policies and legal corridors to support the agricultural sector Enterprises in the industry have outstanding growth conditions, contributing to competitiveness with imported agricultural products as well as making a significant contribution to the GDP growth of the country in the coming period Agricultural enterprises are becoming more enthusiastic about investing in agriculture and rural areas, which is contributing to the growth of the sector's overall value chain In 2021, 1,640 new agricultural enterprises opened and the total number of agricultural enterprises exceed 14,400 In addition to the investment and development of SMEs, some large companies and enterprises continue to promote agricultural investment, especially high-tech agriculture, such as Nafoods, TH, Dabaco Vietnam, Masan, Lavifood, and CP Group (Ministry of Agriculture and Rural Development, 2021) However, compared with other countries in the region, the level of meat consumption per capita in Vietnam is still low at 16.5kg/person/year in 2018 compared to the highest country in the region at 57.5kg/person/year (SSI Securities Corporation, 2021)

(kg/person/year) Figure 3.2 Meat consumption per capita in Southeast Asian countries in 2018

(SSI Securities Corporation, 2021)

Vietnam is considered a populous country with a young population structure, in addition to the increasing per capita income of Vietnam, these factors will contribute

to the growth of meat consumption of the Vietnamese people in the future This is the basis for the growth of the livestock herd, including pigs, chickens, etc to ensure the rapidly growing consumer demand of the Vietnamese people As a result, the Company's closed agricultural production chain will have plenty of room to develop strongly in this field in the future

Figure 3.3 Pork consumption per capita in Vietnam from 2019 to 2021 with

forecasts until 2029 (Minh Ngoc, 2022)

Therefore, after completing its closed 3-F chain, Nova Consumer Group can supply food products originating from their own farms to the market with high absorption potential due to high demand

3.3 Key partnerships

3.3.1 Supply chains partner

As a closed food production company and self-sufficient in raw materials, ensuring animal health is very important to the Company Therefore, the Company currently has two major partners, namely Navetco - a Vietnamese enterprise that has successfully researched a vaccine against African swine fever, and Vetvaco - a unit specializing in the production of vaccines in the agricultural sector:

- NAVETCO National Veterinary Joint Stock Company is formerly known as the National Institute of Microbiology Now the company is under the Ministry of Agriculture and Rural Development and was established in 1995 with 3 main missions: Research - Production - Trading of veterinary medicines and aquatic veterinary medicine Currently, Navetco has developed and become one of the leading manufacturers of vaccines and veterinary medicines in Vietnam with a total charter capital of up to VND 160 billion Currently, to enhance the cooperation between the two companies, Nova Consumer Group already acquired 11,7% charter capital of NAVETCO (Huyen Trang, 2022)

- Vetvaco Veterinary Medicine Joint Stock Company: formerly known as the National Veterinary Medicine Factory of the committee, was established in

1956 With total charter capital of VND 63 billion, the company now focuses

on business sectors as below:

 Producing and trading in vaccination vaccines for cattle and poultry

 Producing and trading veterinary medicine, and antiseptic medicine for disease prevention in the veterinary sector

 Producing and trading in veterinary biological preparations

 Research cooperation with partners who apply for technology and technology transfer in the field of veterinary medicine production

Currently, to enhance the cooperation between the two companies, Nova Consumer Group already acquired 23,84% charter capital of Vetvaco (Hong Anh, 2022)

3.3.2 Financial institutions

As a large enterprise with high capital needs to invest in farms, raw material areas, breeds, machinery, production lines, etc., Nova Consumer Group also maintains cooperative relationships with financial institutions, and banks to ensure the maintenance of stable financial and capital sources Below is a list of the Company's financial partners

Figure 3.4 List of the Nova Consumer Group's financial partners (Nova

Consumer Group, 2021)

In addition, during the stock IPO process, Nova Consumer also received advice from PWC Company, one of the Big 4 companies in finance and auditing, and SSI Securities Company as a stock distribution agent (SSI Securities Corporation, 2021)

3.4 Ethical and legal considerations

Nova Consumer Group Joint Stock Company is a joint-stock company operating under the Enterprise Law, the Securities Law, and other relevant

specialized legal documents Any changes in the law and related legal environment will have an impact on the Company's production and business activities

The company operates under the model of a joint-stock company, all activities

of the Company are supervised by a system of state agencies including the Ministry

of Finance, the State Securities Commission (SSC), and the Stock Exchange Ho Chi Minh City Stock Exchange (HOSE), Hanoi Stock Exchange (HNX), Vietnam Securities Depository Center (VSD), and General Department of Taxation and is regulated by a system of legal documents including Enterprise Law, Securities Law, legal documents, decrees and related guiding circulars

Laws and sub-law documents in the securities sector are also in the process of being finalized, so any policy changes will more or less affect the management and business activities of the Company 2020 is a year marking a big step forward in the Vietnamese legal system when the National Assembly has passed a series of Laws, Codes, etc with positive changes to help regulate the production and business activities of enterprises However, this process may lead to untimely updating of enterprises, affecting the strict compliance outlined in the Company's business activities

3.5 Economic and market analysis

With gross domestic product (GDP) in the second quarter of 2021 increasing by 5.64% over the previous year, Vietnam is among the countries with the highest growth in the world

Financial assets and real estate have appreciated relatively high in the past period (thanks to the policy of low-interest rates and abundant money supply) Besides, trade tensions continue to escalate, which may positively affect domestic export activities In the context of the Covid-19 epidemic negatively affecting all socio-economic fields, this is a great success for Vietnam

However, the return of Covid-19 in some regions from the end of June 2021 until now has posed many challenges in the management, direction, and

administration of economic development and social security, requires the efforts and consensus of the Government, the entire people, and the business community to overcome all difficulties and challenges in order to achieve the growth target in 2021 The free trade agreement between Vietnam and the EU took effect on August

1, 2020, creating a growth engine for the economy In the general growth of the whole economy in 2021, the agriculture, forestry, and fishery sector increased by 3.82%, contributing 8.17%; the industry and construction sector increased by 8.36%, contributing 59.05%; the service sector increased by 3.96%, contributing 32.78% Regarding GDP use in Q2/2021, final consumption increased by 3.18% over the same period last year; accumulated assets increased by 6.05%; exports of goods and services increased by 29.81%; imports of goods and services increased by 28.53% Based on the positive growth in the past year, in 2021, Vietnam sets a target of GDP growth of about 6% and in the period of 2021-2025, the average GDP growth rate of about 6.5%- 7% However, to achieve this expected growth, Vietnam will have

to face many difficulties and challenges

Figure 3.5 Vietnam's GDP growth from 2011 to 2021 with forecasts until 2022 (Dat

Nguyen, 2022)

3.6 Economic environment analysis

3.6.1 Inflation

Average CPI in the third quarter of 2021 increased by 2.51% Generally, for the first nine months of 2021, CPI increased by 1.82% over the same period last year, the lowest increase since 2016 Core inflation in nine months increased by 0.88% From the beginning of the year until now, the market price level has increased/decreased, with a high increase in some commodities due to the impact of factors and world prices The cause of pressure on the price level is that several essential commodities have increased prices due to the influence of input material costs, and increased logistics costs such as animal feed, fertilizer, and raw materials construct; The domestic price of petroleum and LPG products increased due to the impact of the sharp increase in world prices when the general demand in the world increased Besides, the reasons for reducing pressure on the price level such as aggregate demand of the economy have not yet recovered in the context that the second and third quarters were greatly affected by the epidemic situation; several areas are still strongly affected by the epidemic, such as cultural services, entertainment, and tourism, with a sharp decrease, basic consumption at a low level; prices of basic food items were stable, including pork, which decreased compared to the same period last year due to abundant domestic supply; macroeconomic foundation, the stable exchange rate with flexible and prudent monetary and fiscal policies

In the context of many challenges, the management and administration of prices have been carefully implemented by the Government and the Prime Minister to ensure that the objectives are harmonized In general, while ensuring the market price level, controlling inflation, and removing difficulties for businesses As a result, the average CPI in 2021 is within the target set by the National Assembly

In 2021, it is expected that inflation will continue to be controlled at 4.0% according to the Resolution on the socio-economic development plan in 2021 of the National Assembly These indicators are built based on the calculation and balance

of resources associated with the forecasting context for 2021, especially in the situation of the Covid-19 epidemic These fluctuations will more or less affect the business situation and profit of the Company in the coming time

Figure 3.6 Core inflation of Vietnam from 2010 to 2021 with forecasts until 2023

Deposit and lending interest rates continued to decline compared to the end of the previous year mainly due to:

(i) Late effects of the State Bank's continuous reduction of 3 times interest rates in

2020 (Anh Minh, 2020);

(ii) The State Bank of Vietnam continues to keep the operating interest rates unchanged, at the same time, flexibly and synchronously operating monetary

policy tools to ensure smooth liquidity for the system, stabilizing the money market currency, creating conditions for credit institutions to access capital from the State Bank at low cost, thereby reducing lending interest rates to support customers to restore production and business;

(iii) Besides, the State Bank has also directed credit institutions to actively balance their financial capacity to apply reasonable lending interest rates; thoroughly reduce operating costs, and concentrate all resources to reduce deposit and lending interest rates to support and accompany businesses and people to overcome difficulties

Interest rates in the interbank market continued to increase slightly, due to: (i) Faster credit growth than capital mobilization;

(ii) State Treasury collects taxes

To serve production and business activities, the Company uses loans from the Bank Currently, debt capital accounts for only 48.4% of total assets and is expected

to fluctuate around this figure when the Company plans to supplement working capital for business activities This is a fairly safe capital structure, so the variables

3.7 Industry analysis

The number of agricultural enterprises has tripled so far Vietnam in general as well as the agricultural industry in particular is also in the process of deep integration into the world economy with the basic foundation of small-scale production The EU-Vietnam Free Trade Agreement (EVFTA) officially took effect, helping many agricultural products exported to the EU enjoy great tax incentives The Regional Comprehensive Economic Partnership (RCEP) has just been signed, opening up a positive situation because of the expanded market, preferential tariffs, and higher economic efficiency when faced with the opening opportunity

The flow of investment, technology, exchange, and cooperation is also enhanced However, integration also means increasing competitive pressure for countries in the region, accepting the fierceness of the market If tariff barriers are

removed, there will be technical barriers Non-tariff barriers were erected, even trade protectionists Meanwhile, the level of logistics development and the level of management has not been completed, these are the big challenges the Company has

to face Moreover, the world market is open but the structure changes rapidly in the direction of reducing cereals, increasing livestock products, aquatic products, and vegetables; reducing direct consumption of cheap raw products, and increasing consumption of refined, deep-processed, and high-grade products Consumers also tend to use more and more products that are environmentally friendly, safe, and beneficial to human health Prices of raw agricultural, forestry, and fishery products fluctuate more frequently and more strongly than before The market has many potential risks, the world agricultural product prices may be subject to many unexpected events

In the future, Nova Consumer has the orientation to expand into the field of food production and distribution In Vietnam, the field of food production is one of the sectors with the active competition Nova Consumer may have to compete with many competitors in building brand image, pricing, the distribution system, and product variety like CP Group, and Masan Group In addition, the entry of foreign brands and companies makes the competition more fierce Competition can lead to increased advertising and after-sales costs, or direct price competition policies to increase market share Therefore, Nova Consumer will have to invest more in product research and development as well as after-sales and advertising strategies These expenses may reduce the profit margin and negatively affect the Company's business results

3.8 Market potential analysis

3.8.1 Target customer

In general, the target market of Nova Consumer Group is individual customers and organizational customers in Vietnam Their customer segment might include: (i) Individual customer

 Family with young children: This segment can use all product lines of Nova Consumer, from livestock to processedăfood,ăespeciallyătheiră“BeăKhoe”ăandăXuxifarmăsausageăwhichăis targeted at children

 Young people: Their processed food Te Te rice cake, Xuc Xich Vua sausage, and Master T canned food are convenient, saving the food-preparing time Thus, such products are targeted at young Vietnamese that regularly practice sports, work, and study hard with a limit of free time

 NovaăGroup’săcustomer:ăThisăisătheămostăimportantăsegment.ăAsăNovaăConsumer Group is a part of Nova Group, they have a chance to get the data and channel to reach a million customer that uses the products and services of Nova Group in general, in which, there are lots of loyal customerăwithă“Nova”ăbrand.ă

Nova Consumer Group should expand their e-business to this group as both of these segment customers is the one who uses the internet regularly Rising Internet and smartphone penetration coupled with a large young population will propel the Vietnamese e-commerce market Over 49 million people purchasing consumer goods online in 2019 made Vietnam one of the most attractive e-commerce in Asia This is

a great opportunity for Nova Consumer Group to reach a large number of potential customers via the internet, e-commerce platform, and social network

(ii) Organizational customers:

The other targets group of Nova Consumer Group are organizational customers

or their business partners in the supply chain:

 Distribution agents: in this segment, they also can inherit the distribution system from the Nova Distribution Company, the member of the same parent company – Novagroup, or the distribution chains with over 10 years

of operating across Vietnam with thousands of points of sale from Anco Family Food, the company that Nova Consumer just bought share recently

 Retailers (supermarkets, convenience stores): in this segment, they can develop a strategic partner with Nova Market, a member of the same parent company – Novagroup.ăNovaăMarket’săgoalăisătoăopenă300ăNovaăMarket stores in 2022 and 2,000 stores by 2025 (Ngoc Diem, 2022) Other potential partners in the retail market are Big C/Go, Coopmart (supermarket), Circle K, 7-Eleven, Family Mart (convenient stores), Bach Hoa Xanh, Winmart (grocery chains)

 Horeca (Hotel – Restaurant – Catering) clients may include Nova FnB, the restaurant operator with a dozen famous bistro brands, such as Jumbo, Dynasty, Crystal Jade, Au Lac Do, Shri, Sushi Tei, Don Chicken, etc They can also provide raw meat, beef, milk, and egg for restaurants in hotels and resorts, which are operated under Nova Group, such as Centara Mirage Mui Ne resort, Mercure Da Lat, Mercure Vung Tau, and iBis Style Nova Consumer Group should also expand their e-business to this group This target group will need discounts, sales bonuses, and orders, and deliver them on schedule Thus, applying the e-business to this customer like a data warehouse, cloud computing, etc can help the supply chain run smoothly with appropriate inventories

3.8.2 Customer behavior

In the food sector, the top concern of Vietnamese consumers is food safety (Thanh, Shamim, Kim, 2019) In the future, Nova Consumer plans to expand into the food business to gradually close the value chain from farm to fork The company believes that this strategy will help the company to reduce some of the market risks from livestock activities in particular because a large part of livestock products has become inputs for the food business As a result, Nova Consumer may face customer accusations related to food safety and hygiene issues, which may result in litigation costs, and reduce the Company's profit margin company There is no guarantee that Nova Consumer will not face accusations and lawsuits related to the food safety and hygiene quality of Nova Consumer's products In addition, Nova Consumer's business may be severely impacted by public information disclosures due to industry reports

or health research reports containing negative information regarding Nova products Consumer These adverse disclosures will reduce sales of Nova Consumer's products

in both the long and short term and affect Nova Consumer's revenue in the long term Quality control policies and food safety standards are always strictly applied by Nova Consumer to each workshop and factory to minimize this risk

3.9 Business model

3.9.1 The competitive landscape

With a market capitalization of more than VND 1,000 billion, Nova Consumer

is one of the largest agricultural companies in Vietnam and ranks 357 in the group of

500 largest companies in Vietnam according to VNR's report In terms of market share and operating time in the food industry, Nova Consumer is somewhat less than the top enterprises in the industry such as CP Group (ranked 16th out of 500 largest companies), Masan Meatlife (ranked 77th), Dabaco (ranked 127th/500 largest companies) (VNR, 2022) Like Nova Consumer, agricultural companies such as CP Group, Masan Meatlife, and Dabaco have all developed under the 3F model to be able to provide fresh meat products and processed foods according to a closed process, ensuring food meets international standards on food hygiene and safety Despite having a lower ranking than companies in the agricultural sector, Nova Consumer has long-term strengths to catch up with and surpass competitors in the next few decades such as:

 Nova Consumer is the only unit that owns the technology of vaccines and veterinary drugs While the above companies can only control the material inputs of animal feed, Nova Consumer is the strategic partners and shareholder

of shares in 2 vaccine manufacturing companies and the largest veterinary medicine in Vietnam This advantage helps them to control input costs more closely than competitors, be proactive in production plans and not be afraid of shortages of veterinary drugs and vaccines when there are diseases, especially African swine fever

 Nova Consumer has strong support from its unique ecosystem Only Nova Consumer and Masan Meatlife are parties that can take advantage of their parent Group's ecosystem for development Specifically, the parent group of these two companies both has retail systems, namely Nova Market and Winmart CP Group and Dabaco do not have the same competitive power Thus, this advantage makes it easy for Nova Consumer to plan production and distribution, limiting large inventories

 Besides, if Masan MeatLife only focuses on developing raw pork product lines1,

CP Group and Nova Consumer also develop chicken and egg products In addition, both CP Group, Dabaco, and Nova Consumer are involved in the production of processed foods such as sausages and canned food However, the products of Nova Consumer and CP Group are diverse and popular in the market through retail establishments Dabaco's main products are also mainly raw meat such as Masan Meatlife

 Nova Consumer and Masan Meatlife are also two units with more marketing activities in the digital environment with the connection to online shopping platforms, able to reach many customers of many ages and locations geographical location, stimulating demand through various online promotions Meanwhile, CP Group and Dabaco mainly distribute products through traditional retail channels

Table 3.1 The competitive landscape of Nova Consumer

Nova Consumer Masan Meatlife Dabaco CP Group