Management report external environment of pizza 4p’s company

FOREIGN TRADE UNIVERSITY SCHOOL OF ECONOMICS AND INTERNATIONAL BUSINESS ----00000---- MANAGEMENT REPORT EXTERNAL ENVIRONMENT OF PIZZA 4P’S COMPANY Lecturer : PhD... Our team has dec

FOREIGN TRADE UNIVERSITY

SCHOOL OF ECONOMICS AND INTERNATIONAL BUSINESS

00000

MANAGEMENT REPORT

EXTERNAL ENVIRONMENT OF PIZZA 4P’S COMPANY

Lecturer : PhD Đỗ Hương Giang

Group ;14

Students’s fullname : Hoàng Phương Anh - 2213530004

: Nguyễn Ngọc Ánh - 2214530007

: Nguyễn Linh Chí - 2212530009 : Phạm Linh Chi - 2212530010

: Nguyễn Phương Nguyên - 2212530035

: Phạm Thị Thanh Thuy - 22135300 Class Module : QTRE3031.2

Ha Noi, September 2023

TABLE OF CONTENTS TABLE OF FIGURES 2 2.12012212212101 121221121 1511111112711 1112111201111 1 g1 HH 1 J§N:{9)9)6i 9N ®hãidđiđdđdẻddắảảẢ 2 Chapter | Characteristics of the industry and p1zza 4p”s 5222-2222: 3 1.1 Brief review of the IndUStFV 2 20 2011221112211 1211112111121 1 1122111111881 1 1111k 3 IWANin ni vi n0: 1ä Ă 3 Non ca an 5 3 1.2.2 Brand philosophyy - - 2c 2 0020122201110111131 1113111111111 1 111111111111 11 1 t2 4 Chapter 2 External environment analysis of Pizza 4P”s - 2 2c S22 se 5

PC 09i 2 eầ 5 2.1.1 The Political/Legal Segmetit 2 2 22221110111 1111311 1112111111211 k2 5 2.1.2 The Economic SegImefit + 2 022111101 11131 1131111111111 11111 1111111 se 5 2.1.3 Soclo-culture SeØImefit - c1 201110111101 11101 111 11111111111 1111111111111 1 11k 6 2.1.4 Technological Segmeiit - - 2 221020111101 1111111 1111111111111 1111111111 k2 8 2.1.5 Environmental SegImetit 2c 222 11222122211 151 112111111511 1111181111132 g2 10 2.1.6 Demographie Segmeiit - - - 2 1 20102201120 11201 1111511111 1551 1111115811 k cay 11 2.1.7 Globalization aad II 2.2 Industry ennvIronn€Iit - 1 2 0222111111111 111112 1110111101118 1111122111111 1k II 2.2.1 Bargaining power Of buyeFS - c0 0 2010202111011 1111 1112111111111 1111 1 xk 11 2.2.2 Power of Suppliers towards P1zza 4P”s TQ 0102201120111 2 11111 key 13 2.2.3 Threats of Substitutes on P1zza 4P”s Q22 122011211121 111112211 r Hà 15 2.2.4 Rivalry between PIzza 4P”s and other companes - 5 5 15 2.2.5 Threats oŸ new eIiFAHFS c0 2211211121121 1 12 1101111011 111111 11201111811 kg 16 Chapter 3 Threats and opportunitiles of pIzza 4p ”S 5c nà 2v 2é 18 3.1 Opportunities 18

Ki - 18 EEh - in AA 19 CONCLUSION Q.0 021211121 121221121 22111112122 111 82115110111 1111111111 T11 re 20 REFERENCE Lice cee

TABLE OF FIGURE

Figure 1 The proportion of Revenue in VNR500, 2019 — the Industries with High Potential Growth (unIt: ⁄9) 5 2 0 221115111311 111 11211111111 111011 101111 1111011101111 1kk 4 Figure 2 Vietnam GDP Growth Rate 2011 - 2021 - 2 2221221122112 1121112125111 x 6 Figure 3 Vietnamese Expenditure ÀT€as§ c 1 c1 211 11H 2111211111111 111181118811 kg 8 Figure 4 Quantity comparison: euests, pIzza and cheese (2020 - 2022) 10 Figure 5 Quantity comparison between the number of stores and total pizzas baked between 2019, 2020, and 2021 respectiveÌy - L2 2220112111121 1 1121121111811 11k 12 Figure 6 Revenue ofsome restaurant cha111§ - 20 2c 222 22212211211 151 1222121122112 x52 13 Figure 7 The number of restaurant chains of some brands in 2020 16

INTRODUCTION

A company's survival and development are invariably influenced by the external environment and Pizza 4P’s is no exception In the meanwhile, it is only through meticulous market research and planning that these factors can be anticipated

To ensure smooth operations, the Pizza 4P’s must effectively address the ever- changing external environment that may impact their business By doing so, they can develop optimized solutions to mitigate or even eliminate the effects of these environmental factors It's crucial to prevent these factors from hindering the 4P's seamless functions

Our team has decided to craft this report to thoroughly analyze how Pizza 4P’s navigates the external environment and pinpoint potential opportunities and threats that may arise during its operations Our objective is to present initial solutions to mitigate any detrimental effects that external factors may have on Pizza 4P’s

This report includes three main chapters:

LI Chapter 1: Characteristics of the industry and Pizza 4P’s

LI Chapter 2: External environment analysis of Pizza 4P’s

1 Chapter 3: Threats and opportunities of Pizza 4P’s

Despite our best effort in searching and delivering this report, there will still be lacking in aspects that we fail to find more concrete evidence, as well as some other mistakes that we may fail to recognize outside our knowledge span We are grateful for PhD Do Huong Giang's guidance, which has navigated us on the right track and helped us to work for the best possible result

CHAPTER | CHARACTERISTICS OF THE INDUSTRY AND PIZZA 4P’S 1.1 Brief review of the industry

In recent years, the food and beverage (F&B) industry has always been one of Vietnam's most important and potential economic sectors Vietnam is the third fastest- growing country in Asia in terms of food expenditure The F&B sector accounted for 7.8% of Vietnam's revenue in 2019 according to the VNR500 ranking and is

considered the fastest-growing industry in quantity and quality

Figure 1 The proportion of Revenue in VNR500, 2019 — the Industries with High

Potential Growth (unit: %)

As Vietnamese cities become more highly urbanized, the middle class and the youth are becoming more open to trying new products This presents positive

opportunities for foreign brands to enter the market Food culture is rapidly developing

in the country, and Vietnam’s F&B industry is becoming more interesting In cities like Hanoi and Ho Chi Minh, restaurants serving cuisines like Japanese, Korean, Spanish, Italian, and Greek create a vibrant scene for international food culture

1.2 Introduction to Pizza 4P’s

1.2.1 Pizza 4P’s overview

Pizza 4P’s was founded in 2011 in Ho Chi Minh City (HCM) by Japanese couple Yosuke and Sanae Masuko after learning to make the Italian staple in a DIY wood- fired pizza oven

Along with the love for pizza, the first Pizza 4P's opened its doors to start the journey to conquer diners in 2011 Artfully blending Japanese technical precision and attention to detail with traditional Neapolitan pizza recipes and techniques, Pizza 4P’s has become mega-popular with both its consummate renditions of classic Italian pizzas and flavorful new versions of ingredients as toppings — insatiably devoured by daily crowds of both locals and visitors As of April 2020, the main restaurant business has a total of 28 restaurants (including food trucks) in Vietnam 4P’s currently have 5 business units: Restaurants, Cheese production, Cheese wholesale, Dairy retail, and the latest Cafe 4P’s

1.2.2 Brand philosophy

The name 4P’s means “For Peace” - Peace pervades the world The brand and logo of 4P’s embody the desire to bring rich experiences to help guests entering their world reap something positive and exciting The brand focuses on quality ingredients The idea of “Farm to table” was put into practice

“Delivering Wow, Sharing Happiness” - “Bringing Wow, Sharing Happiness” It describes a delightful surprise, an experience that can make your heart dance, an abundance of positive energy, and an uplifting spirit The 4P’s believes that happiness will spread and fill the world The message of Pizza 4P’s is to bring rich experiences to help each customer who enters the restaurant They create smiles, and those smiles are the “catalysts” that help people taste the taste of lasting happiness and inner peace

CHAPTER 2 EXTERNAL ENVIRONMENT ANALYSIS OF PIZZA 4P’S 2.1 General environment

2.1.1 The Political/Legal Segment

2.1.1.1 Taxation laws

From 1/7/2023, there’s a regulation in VAT that reduces tax from 10% to 8%, applying for industries including the F&B industry Consequently, people will be more willing to pay for the meal and come over more frequently This makes a tremendous distribution to 4P’s revenue as well as searches for more potential customers

2.1.1.2 Labour laws

In 2022, 4P’s have increased their salary structures by 8.33% for entry level, 3.7% for Junior & Senior and 5.88% for Trainer Not only providing benefits that comply with Vietnamese labor code for annual leave, parental leave, maternity leave, holiday paid time-off, 4P’s also offer partners discount on company products and services, free set of uniforms yearly after the first year and 24/7 accident insurance

2.1.2 The Economic Segment

Except for the recession period of Covid 19, the GDP from 2011, the year 4P’s was founded, stayed strong which allowed 4P’s to develop as they can hire more workers, afford higher salaries and wages as well as attract more investments

In 2021, the F&B industry contributed 15.8% to the national GDP Total spending on food and beverages accounted for the highest proportion with about 35%,

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with the spending on food at more than 360 USD/month This figure is higher than most countries in the region such as Indonesia, Thailand, Philippines, Malaysia 2.1.2.2 Recession

Customers’ purchasing attitudes may shift as a result of an economic downturn (of any size), forcing businesses to lower prices or clear lesser amounts

2.1.2.3 Unemployment rates

The increase in the unemployment rate will have a significant influence on the amount of money spent on goods and services When unemployment is low, consumer spending rises, which is beneficial to businesses and promotes growth

2.1.2.4 Inflation rate

In the midst of rising inflation rates in the world, the financial ministry predicts that the inflation rate of VN will witness a decrease in the next few years It will create opportunities for B&G corporations to grow

In conclusion, the rapid economic growth of Vietnam is an opportunity for Pizza 4P’s to thrive and increase the stability of its restaurant chain business in the future On the other side, 4P’s should consider some economical aspects as they may cause some threats to the company’s prosperity

entertainment and traveling, etc

b) Consumer trends

@ Health and Wellness

In these years, cases of food poisoning and reports of restaurants using

unqualified materials were already prompting consumer trends towards health and wellness COVID-19 has bolstered these trends considerably Understanding these, Pizza 4P's has chosen the "Good For Health" as the main message throughout all of its marketing campaigns

In order to win customer trust and serve as a testament to the brand's product quality, Pizza 4P's has provided specific information on closed operating processes to customers All dishes are made from organic ingredients This is also one of the core factors that creates a unique identity of the brand

e@ Digital Landscape

According to Digital 2021 Vietnam, the country is highly connected to the internet Although the company did not sell takeaway to ensure product quality previously, the epidemic has forced Pizza 4P's to open delivery for all establishments

in the chain During the first epidemic, thanks to the take-away sales channel, Pizza

4P's recorded a revenue of 30 billion VND, delivered more than 60,000 orders monthly After that, the brand continued to develop on e-commerce platforms such as Shopee, Lazada , which is a modern step to help Pizza 4P's revive its business activities in the future

2.1.3.2 Cultural values

a) Respect

This is the guiding principle of all relationships Pizza 4P's understands that not only the people who order pizza are their customers, but also the employees and people who directly manage the system Pizza 4P’s calls their employees partners, accompanying the company throughout challenges to achieve business success Moreover, the company always pays attention to the opinions of the staff to make necessary changes in the systematic operation process

b) Harmony

The real key to creating 4P’s culture is leadership What has been found out after interviewing nearly 50 managers at all levels in 4P’s is that Values and Vision are alive and strong Once a manager simply told the team to ‘be Omotenashi’, they knew exactly what to do and acted accordingly For any company, the front line team being able to take direction by saying ‘be a core value’ is an incredible accomplishment Pizza 4P’s leadership has done it, simply just by being themselves

c) Education

Education is the pillar of the culture Regarding the age group, gen Z makes up the majority of the partners with 86% Seeing the potential of Gen Z in Vietnam, Pizza 4P’s provides them with the necessary resources to help them reach their goals and cultivate a sustainable working environment Each waiter and waitress is trained for 2 -

3 months and it takes 3 - 6 months to train a kitchen staff and pizza staff

2.1.4 Technological Segment

2.1.4.1 Status quo

The company has recognized the benefits of technology in providing an

Intriguing experience to diners, therefore two prominent products were introduced and are currently being used in pizza 4P’s restaurants:

a) Runner Robots: this runner robot has different deltvery modes and is very safe with built-in 3D obstacle avoidance sensors

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b) Al Camera technology: these are used at 4P’s to check the shape of pizza, the baking condition like edge pizza is not enough swollen, burnt baking, sauce covering

on the edge, or uneven topping, etc

2.1.4.2 Impact

a) Ensure the quality of food and customer service

By using modern AI technology, the employees can supervise the manufacturing process and adjust the information in time to avoid faults Besides that, customers can reduce the time waiting by ordering via Runner Robots and having the food delivered carefully to the tables

b) Enable the company to control remotely and provide timely solutions

As COVID-19 hit Vietnam and people relied on online platforms for services, the company first introduced its own website for online order services in 2020 By owning the website, the company actively manages the delivery through its touchpoints and improvement in operating process In addition, other processes at Pizza 4P's are managed by a 100% "home-made" technology system, from electronic invoices to building feedback processes with customers, partners, and employees

c) Attract more customers

Item 2020 2021 2022

1,707,318" (Total) 3,548,668" (Total) 1,677,351 (Vietnam) 3,443,306 (Vie 29,967 (Cambodia) 105,362 (Cambodia) Total Guests 2,018,314

(Vietnam)

154 (Vietnarr 3,195,960 (Vietnam) 29,967 (Cambodia) 105,362 (Cambodia)

Figure 4 Quantity comparison: guests, pizza and cheese (2020 - 2022)

Pizza 4P's Sustainability Report 2022 The development of 4.0 technology enabled the company to meet customer’s demand by controlling the manufacturing process remotely amid the pandemic and has contributed considerably to the rise in total guests afterwards In 2022, the number of users ordering service doubled compared to 2021 Many restaurants have been expanding their business models on online platforms, selling food to customers through mobile applications

2.1.5 Environmental Segment

At Pizza 4P's, sustainability is the guiding light towards a vision of making the world smile for peace Therefore, the company pays great attention to increasing sustainability via methods such as reducing waste in packaging, recycling used jars and using fresh ingredients

2.1.5.1 4P’s Retail (B2C) - Packaging

In 2022, the number of renewables and compostable items were the same as

2021, with 66.67% of the delivery packaging came from renewable sources including bamboo, wood, or bagasse and 27.78% was compostable However, 4P’s still use plastic packaging such as plastic pouches and zip bags

2.1.5.2 4P’s retail (B2B) - “Jar return program”

The collecting jars for recycling program of 4P’s is still expanding with the recollection of 744 jars from their business clients in 2021 and 5487 in 2022 This has shown a growing trend of sustainability awareness among businesses in Viet Nam 2.1.5.3 Sourcing

With the commitment to quality and safety, every ingredient has a traceable origin from certified food safety producers For instance, 4P’s cheese is produced locally from their organic farm in Don Duong, Lam Dong The cheese production also releases wastewater that cannot simply be discharged to the drainage system 4P’s has therefore developed a circular recycling process: the whey water is collected by the organic farm, then being used as fertilizer for vegetables or for salad sauce at the restaurant because it contains a lot of nutrition

The company also purchases ingredients flexibly between local farms and others with a view to reducing cost and increasing sustainability

2.1.5.4 Climate change

Greenhouse gas (GHG) emissions from 2021 to 2022 are measured from direct source (diesel, gasoline ) and indirect source (electricity) In 2022, the greenhouse gas emissions increased 1.5 times more than that in 2021 as Pizza 4P’s increased its business activity The company did not calculate supply chain emissions due to lack of data, though the emissions have the largest impact on greenhouse gas emissions Therefore, the total emissions did not reflect the reality of the company