McDonalds' Franchise in Vietnam

Group Project Written Report

McDonald's franchise in Vietnam

Subject: LB5207 Managing Entrepreneurial Enterprises

Lecturer: A/Professor John Vong

Mr. Morgan Swamy

StudentA: Nguyen Thanh Long - 12718871

Nguyen Kim Ngan - 12654382

Ardantha Grendyosa - 12717084

Nguyen Duy Bac - 12657169

Table of Contents

Executive summary 3

I. Overview of the business 5

1. The business 5

2. The product 5

II. Market analysis 6

1. Market and opportunity 6

2. Competition 7

3. Strategy 8

III. Operation plan 9

1. Locations and facilities 9

2. Ingredients 10

3. Opening Hours 10

4. Production 11

5. Other issues 11

IV. Marketing plan 11

1. Product 11

2. Price 12

3. Promotion 12

4. Place 13

V. Human resource plan 13

1. Recruitment and job description 14

2. Training program 15

VI. Financial plan 15

1.Investment 15

2.Expenses 16

3.Sales expectation 17

4.Income statement 17

5.Break-even point 18

VII. Sustainability plan 19

1.Nutrition and Well-Being 19

2.Sustainable Supply Chain 20

3.Environmental Responsibility 20

4.Social responsibility 20

References 22

Appendix 24

Executive summary

The fast food market in Vietnam is currently witnessing a booming, with fast growth rate and many international famous brands entering one after another. Vietnam, with a young population, is more and more welcoming the entering of Western styled fast food chains. The fast food industry has over a decade of development, with the trend of fast food consuming has become popular and the establishment of experienced supplier network. Vietnam is now considered a potential and profitable destination for Western fast food brands.

Realizing attractive opportunities for a famous brand like McDonald's to join Vietnam fast food market, we compose this business plan to propose a business with the objective to bring the McDonald's brand to enter Vietnam market. The business model proposed will be a private limited company which would purchase the franchise right to open McDonald's restaurant chains in Vietnam.

Mostly based on McDonald's standards for franchisees, we also propose customized plans to suit Vietnam's localized market. The operation plan consists of the decision of choosing locations for the two first stores in Ho Chi Minh City, dealing with the ingredients for the foods provided, as well as other operation-related issues. The marketing plan is composed based on the strategy of combining standardization and customization, whereas we offer famous iconic foods of McDonald's, while introducing customized food to suit Vietnamese's local taste as well as promoting a healthier image of McDonald's foods. A consistent strategy of differentiation will be executed throughout the marketing plan, from the intimacy of the stores, the uniqueness of the foods, the competitiveness of the price and community-friendliness of the promotion strategy. In the human resource plan, we propose the needed staff for the first two stores, their detailed daily responsibilities as well as plans for staff training, based on the standardized process of McDonald's.

For the capital needed for the business, we start with the owner's equity of S$1,400,000. But in order to raise enough funding for the company, we will have to make bank loan of S$800,000. Despite large initial investment, detailed financial analysis shows that we will make profit in the first year of operating:

Other financial ratios also show optimistic signals, with the net present value after 5 years is S$4,451.56 (with the discount rate of 10.5%) and the payback period is 4 years 1 month.

For a big business like the McDonald's franchise, the sustainability of the business is always among our top priorities. Our focus on developing and maintaining the sustainability of the business is mainly in four aspects: nutrition and well-being, sustainable supply chain, environmental and social responsibilities.

I. Overview of the business

1. The business

This is the business plan for a newly established company in Vietnam. The new company is named VietBurger and is located in Ho Chi Minh City, the biggest economic-financial center of Viet Nam. The legal form for the company that we, the founders, choose is a private limited company.

VietBurger's main business is in the food and beverage industry of the domestic market of Viet Nam. The detail business for the company is the fast food industry. This is a new industry within the food and beverage industry in Vietnam, started by Yum! Brand's KFC fried chicken restaurant chain in 1997 (Clark, 2012).

2. The product

VietBurger's main objective is to become a franchisor for the United States-based famous hamburger fast food restaurant chain, McDonald's Corporation. Although the fast food industry has started in Vietnam since 1997 with the appearance of KFC, McDonald's has not entered the market yet. Thus, VietBurger Company