Bachelor of Business Accounting Seminar

Individual Assignment Name: Le Vinh Hoang Minh Class: BBus 1

Section A. Strategic Planning Define the industry that Nhu Lan operates in. Based on your definition of the industry that Nhu Lan operates in, analyze the competitive environment faced by the industry in which your company operates in. Use Porters 5 Forces model. How attractive is this industry? Answer: In my opinion, Nhu Lan mainly operates in Vietnamese fast food industry. Originally, Nhu Lan is famous for its banh mi, which is a Vietnamese fastfood. Although Nhu Lan has been expanding its business in recent years with many types of food but all of them are prepared and served very quickly.

Threat of New Entry: Not too expensive to enter the industry Experience is needed, but training easily available No cost advantage

Competitive rivalry: A lot of competitors Low switching costs Low customer loyalty Low cost of leaving the market

Supply powers There are many suppliers Uniqueness is low Cost of switching supplier is low

No technology protection
Low barriers to entry there for new entries quite easy Porters five forces analysis.

In conclusion, Vietnamese fast food industry is very attractive.

Buyer Power: Section B. Scorecard

Threat of substitution:

A lot of buyers
Switching cost is low, nearly none

A lot substitutions for banhmi: Pho, Bun Bo, also foreign fast food like KFC, McDonald,

Balanced

What are proposition customers?

suitable value for Nhu Lan to its

From the value proposition, identify strategic internal business processes which are essential for Nhu Lans strategy. Provide a clear description of the strategic internal business processes suitable for Nhu Lans value proposition to its customers.

Using the four perspectives from the Balanced Scorecard approach to strategic planning, propose three (3) objectives for each perspective in relation to Nhu Lan. The objectives must have units of measurement and complete with targets. Answers: a. Value proposition: Nhu Lan brings you delicious Vietnamese traditional foods at international level.

Who is the intended customer?

What will the customers experience be of the offering and the company, and what price will they pay?

Vietnamese who want to enjoy traditional fast food

Delicious and hygiene food which are served quickly and politely at a reasonable price (~1.5$)

What offerings will we create to deliver the intended experience to the intended customer? What purchase or usage of offerings do we want from the intended customer? What benefits will the customer derive from the experience and at what cost?
What competing alternatives do the customers have? How are we different?

Hygiene kiosks, well-trained employees Well-prepared foods

Delicious, healthy meal at an international standard

46-year experience, high quality and tasty traditional foods

How will we substantiate our ability to deliver the resulting customer experience measurably and specifically?

Balance scorecard objectives

b. Internal business processes

Factors Quality Nhu Lan products are known for its taste. However, there is still room for improvement. Because most of Nhu Lan products are hand-made, therefore quality

control is very important. Products must be at the same quality. Safety There are a lot of complains about the food safety at Nhu Lan. Therefore re-decoration is compulsory. Open space with tidy arrangement are required. Employees must wear gloves while serving foods. Brand recognition system has to be restructured. Logo, theme of the kiosks need to be redesigned as well At rush hour, customers usually have to wait for a long time because of short-staffed. The recruitment of new employees are required

Brand management Productivity

c. Balance scorecard

Perspective Customer perspective: How do customers see Nhu Lan? -

Goal Customer satisfaction Fast service Increase brand recognition Service innovation Employees improvement Product innovation Unit cost reduction Waste reduction Hygiene improvement Revenue growth Profit increase Market position -

Measurement Occupancy ratio Serving time

Innovation and Leading perspective: Can Nhu Lan continue to improve and create its value? Internal business perspective: What must Nhu Lan excel at?

Investment in facility upgrade Training courses and tests Number of new products Costs at % of revenue Expense at % of profit Hygiene standards, ratings DEA efficiency scores DEA efficiency scores % market shares

Financial perspective: How does Nhu Lan look to its shareholders?

Section C. Budgeting An investor will invest USD300,000 to establish a new Nhu Lan bakery outlet, and asked for 25% Return on Equity

Assuming sales is targeted at USD1,000,000 per year and we can use Kinh Dos performance as the benchmark, tabulate the budgets for the outlet: Net profit Gross Profit Operating Profit

What is the maximum allowed Sales, General & Administrative expenses for the new outlet? Assume that the new outlet is financed by 100% equity and tax rate in Vietnam is 22%. Answer:

Net income = 25% * $ 300,000= $ 75,000 (*) Based on Kinh Do's performance, we can calculate the cost of good sold. COGS = [(1,129,500 - 431,978)/1,129,500 + (1,068,076 - 436,129)/1,068,076 ]/2 = 0.6046

(**)

Sales Cost of good sold (60.46% of sales) Gross profit Selling & administration costs Operating Profit Interest Profit before tax Tax (22%) Net income

$ 1,000,000 604.609 (From**) $ 395,391 299.237 $ 96,154 0 $ 96,154 21.154 $75,000 (From *)

So, the maximum allowed sale, general and administrative expenses is: $ 299,237