Essay subject microeconomics topicmon hue in the fb market microeconomic perspective

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

market-Microeconomic perspective

Lecturers: Master Nguyễn Hữu Lộc Class code:22C1ECO50100184 Student: Trần Nguyễn Hồng Ngọc Lock – Grade: K48 - KNC03 MSSV: 31221026727

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 do

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. 4

1 Problem: 4

2 Researchobjectives 4

3 Research subjects 4

4 Practical significance 4

Content 1 Overview 5

2.Database 6

2.1 Production cost 6

2.2 Organizational behavior 6

2.3 Corresponding graph 6

2.4 The reason Mon Hue went bankrupt 7

3.Recommendations on production cost 8

4.Conclusion 8

1 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"

2 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

3 Research subjects:

Cuisine chain of Mon Hue

4 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

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

2 Database

2.1 Production cost

Notion : P roduction 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 4 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

do not need premises but compete for "virtual" positions on food delivery

applications Mon Hue do 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 do vì sao Món Huế đóng cửa - câu chuyện quản

lí từ nhà điều hành Easyedu From

https://easyedu.vn/li-do-vi-sao-mon-hue-dong-cua-cau-chuyen-quan-li-tu-nha-dieu-hanh/ ( 2022,12 06)

Minh Sơn (2019,10 26).‘Gót Asin’ của Món Huế VnExpress .From

https://vnexpress.net/kinh-doanh/got-asin-cua-mon-hue-4002388.htm (2022,12

06)