Chapter 1: Innovation - The clever country

LO 1.1 - Understand the meaning of innovation, six aspects of innovation, and

innovation and entrepreneurship.

Innovation = Invention * Commercialization.

=> generates value for the world (faster, better, cheaper, greater satisfaction).

=> the process of creating value from ideas + successful implementation of creative ideas
within an organization.

Innovation is driven by Entrepreneurship = energy, vision, passion, commitment,

judgment and risk-taking.

6 aspects of innovation:

1. Identifying/ creating opportunities: completely new possibilities. (e.g., Mobile

phones and tablets have revolutionized the way we communicate).
2. New ways of serving existing (established/mature) markets (e.g., Coles,
Woolworths online shopping).
3. Growing new markets: where & how new markets can be created & grown. (e.g.,
the auction market with eBay).
4. Rethinking services: new entrants & radical change opportunities. (e.g., Online
banking and nor more queues).
5. Meeting social needs: for the public sector, more & better services w/o increasing
the tax burden. (e.g., Facebook and LinkedIn as social platforms).
6. Improving operations: ability to keep the business running & productive. (e.g.,
using robotics in manufacturing, mining and medicine).

LO 1.3 - List some sources of innovation, both from within companies or industries
and in the social environment.

I. Within a company or an industry

1. Unexpected occurrences: unexpected successes and failures. (e.g,

catastrophes)
2. Incongruities (ko thích nghi): a gap between expectation & reality =
unserved needs.
3. Process needs: demand arises => innovate to answer a particular need.
4. Industry and market changes: change in consumer attitudes, advances in
tech & industry growth.
 II. Within social & intellectual environment

5. Demographic changes
6. Perceptual changes: change the interpretation of facts & concepts => new
opportunities.
7. New knowledge: scientific, tech, social, etc.

LO 1.4 - Discuss different types of innovation.

Incremental innovations = make existing products or services better (e.g., new

McDonald healthy menu)

Disruptive innovation:

● Change the value proposition.

● Cause fundamental changes in the marketplace.
● Innovator's dilemma = innovations that create new markets by discovering new
categories of customers. (Harnessing new technology + developing new business
models.)

=> Established companies: Holding onto existing markets vs. Capturing new markets.
=> Enable more flexible, entrepreneurial companies to capitalize on industry growth.

Cost innovation:

● Consider the “value for money” segment.

● 3 ways:
1. Selling high end products at mass-market prices.
2. Offering choice or customisation => value customers.
3. Turning niches => mass markets.
LO 1.5 - Understand the key practices of successful innovators and entrepreneurs.

1. The 4 P's of Innovation

2. Innovation process = (1) recognising opportunities, (2) finding resources, (3)

developing the venture, (4) capturing value.

3. Create Innovation strategy

1. Strategic analysis: what could we do? where could we innovate and why would it
be worth doing so?
2. Strategic selection: what are we going to do, and why?
3. Strategic implementation: how are we going to make it happen?
Chapter 2: Creativity, innovation, opportunities and
entrepreneurship

LO 2.1 - Understand the nature of creativity

Creativity = the production of new and useful ideas.

=> Fulfill a need in the marketplace & generate profit $$$.

Successful, innovative companies systematically encourage the development of ideas.

Creativity = thinking process.

Innovation = productive process. Innovation is creativity implemented, which adds

value to the idea.

Creativity involves the following:

1. Associations between (unconnected) problems or ideas: Not random connections

but this requires a serious goal at the end.
2. Incremental and radical ideas: light bulb moments followed by long periods of
incremental improvement around those breakthrough ideas.
3. Divergent thinking: making associations, exploring around the edges of the
problem vs. Convergent thinking: focus, homing in on a single “best” answer.
4. Left and right brain thinking: enable the interconnection between the two.

Left brain: logical thinking, language, calculation.

Right brain: associations, patterns, emotional links.

5. Pattern recognition: recognizing a similarity between a new problem & something

like it which we have seen before.
6. Individual and group creativity: we see problems and solutions from different
perspectives, so when we interact and collaborate, we can amplify creativity.

LO 2.2 - Understand the creative process

Creativity = purposeful, not accidental + an underlying process which starts long way
before the light bulb moment.

1. Recognising a problem to solve

2. Incubation (ủ idea): let the brain consciously + unconsciously play around to
create new connections
3. Insight is born: the right solution
 4. Validation/refinement: prototyping and developing the idea.

Incubation:

● Start projects early.

● Involve the unconscious mind.
● Creativity occurs over time.
● Stress is not good for creativity.

LO 2.3 - Understand the components of creativity, use a series of creativity

techniques, and identify factors influencing creativity

3 components of creativity:
1. Creative thinking
 How people approach problems & solutions.
 Individual personality, way of thinking and working.
 People are more creative when they feel comfortable disagreeing with each
other.
1. Knowledge
 Knowledge = everything a person knows & can do.
 Acquiring thru: formal education, practical exp, interaction with other ppl.
2. Motivation
 Determines what a person will actually do.
  2 types of motivation:
 Intrinsic: from the inside (e.g., enjoyment of work)
 Extrinsic: from the outside (e.g., financial rewards)

5 creativity techniques

Technique Definition Examples/Rules

1. Problem ● Attributes, concepts, or ideas are 1. State the problem in reverse: try
reversal meaningless without its opposite. to improve customer service =>
● Lao Tzu (Lão Tử): list all the ways one could make
○ See opposites all around. customer service.
○ Action thru inaction (wu wei) = 2. Figure out what everybody else
letting go & not resisting nature’s is not doing: Apple provided a
way of achieving balance. graphical user which IBM did not,
○ Be upright without being Japanese made small, fuel-
punctilious. Be brilliant without efficient cars while American
being showy. focused on large cars.
● See things backwards, inside out & 3. Change the direction/location of
upside down. perspective: examine the problem
from the perspectives of the
producer, distributor, and client.
4. Turn defeat into victory: 3M
post-it note was originally
considered a failure.

2. Forced analogy ● Takes a fixed element => forces it to Olson described the problem of
take on the attributes of another examining a corp organizational
unrelated element. structure by comparing it with a
 ● Free flow of associations from which matchbox. (Table 2.2)
new ideas may emerge.
● One of the most effective methods of
generating new solutions and new
insights.

3. Attribute listing ● Ensures that all possible aspects of a Improving a torch. (Table 2.3)
problem have been examined.
● List all the major
characteristics/attributes.
● For each attribute, list how it could be
changed.
● Then evaluate each idea.
● Useful for complicated products, can
be used with brainstorming.

4. Mind maps ● Effective method of note-taking and

useful for generating ideas by
association.
● Write down a central idea and think
up new and related ideas that radiate
out from the center.
● Useful in brainstorming sessions.

5. Brainstorming ● Generating ideas in a group based on 4 rules:

the principle of suspending 1. Suspend judgment: no critical
judgment = the generation phase is comments allowed.
separated from the judgment phase of 2. Think freely: every idea is
thinking. accepted and recorded.
3. Encourage people to build on the
ideas of others.
4. Quantification of ideas is
important: generating a large
stock of ideas so that they can be
refined later on.
5 factors influencing creativity

1. Encouragement of creativity
● Organizational encouragement
● Encouragement from Supervisors
● Encouragement within a group itself
2. Autonomy
● High autonomy in everyday conduct of work + a sense of ownership and
control over their own work and ideas.
● Having a choice in how to accomplish the tasks given.
3. Resources
● Affect what can be accomplished.
● Affect people psychologically by affecting their beliefs about the intrinsic
value of the projects undertaken.
4. Pressures
● Excessive workload pressure: negative influence on creativity.
● Pressure of challenge: positive.
What innovation management lessons can we take from this?
● Create the challenge. Build a compelling vision, something to engage the energy.
● Construct the sense of crisis. Construct the sense of crisis. Bring the constraints to
the fore and demand a solution in spite of them.
● Coach the team. Many famous crisis innovation teams have leaders — like Kelly
Johnson — whose roles are working as coaches, challengers and guides.
● Cultivate the team. Diversity helps, so teams can draw on different core knowledge
as well as on different personalities, perspectives and angles.
● Enable co-operation. Networking can often fill much of the resource gap. For
example, 3M’s famous ‘bootlegging’ model is at heart a social process, depending
on the community from which entrepreneurs can beg, borrow and otherwise pull
together the resources they need.
5. Mental blocks:
● Prejudice: preconceived ideas about things.
● Functional fixedness: seeing objects in terms of its name, rather than in
terms of what it can do. (E.g.: people go to shopping centers not only to buy
but also to entertain themselves.)
LO 2.4 - Explain the link between creativity, innovation, and entrepreneurship, and
outline the steps for screening opportunities

1. Knowledge development during the entrepreneurial process

● Creativity stage: knowledge in a very raw form.

● Innovation stage: knowledge is further refined + initial idea passes the
“feasibility test”.
● Entrepreneurship stage: knowledge is embedded in the product/service sold.
● Common point: Knowledge development.

2. Developing and disseminating knowledge through social networks

● Networks impact on: social + emotional + material support.

● 3 features of social networks: diversity, affective strength, structural equivalence.

3. From creativity to entrepreneurship: Screening opportunities

● Identifying & evaluating opportunities.

● Assess business ideas => determine if they represent an entrepreneurial
opportunity, i.e., sustainable value & wealth can be created.
Steps for screening opportunities
Chapter 3: Marketing, the environment and market
analysis
LO 3.1 - Provide an overview of marketing, the marketing process, and the exchange
of value
● Marketing = creating, communicating, delivering, and exchanging offerings that
have value for stakeholders.
● Marketing process = understanding the market => create, communicate, and
deliver an offering for exchange.
● Value = assessment of the utility of an offering based on what is received + what is
given = total offering.
● Value = Quality/ Price or Value = Benefits expected/ Benefits received.
● Lifetime Value = what the firm offers in exchange for customer loyalty.
The market = a group of consumers with different (heterogeneous) needs & wants. (=/=
Target market = similar (homogeneous) needs & wants).
1. Customers = purchase products for their own/ someone else’s use.
Consumers = use the goods/services.
2. Clients = customers of not-for-profit orgs or social mkters (i.e., encourage social
changes) (customers of Medicare, Centrelink, public hospital, viewers of anti-drug
ads).
3. Partners = orgs/individuals who are involved in the exchange process. (ad
consultant hired to develop mkt communications, supplier of raw materials,
retailer in the distribution channel).
4. Society = individuals living as members of a community.
Marketing History:
● Late 1800s/early 1900s: product orientation.
● 1930s: sales orientation.
● Mid to late 1900s: market orientation.
● The 2000s: societal market orientation.

LO 3.2 - Describe the marketing environment and the purpose of environmental

analysis

Mkt envi = internal + external forces that affect a marketer’s ability => create,
communicate, deliver and exchange offerings of value. => Internal envi, micro envi &
macro envi.

1. Internal envi = organization itself + the factors that are directly controllable by
the org (people, processes).
 2. Micro envi = forces & factors at play inside the industry in which the mkter
operates. => Suppliers, distributors, customers & competitors.
3. Macro envi = larger-scale societal forces that influence all industries. (Political,
econ, sociocultural, tech, envi & legal forces = PESTEL).

Environmental analysis = analytical approach, breaking the mkt envi into smaller parts
=> better understanding.

LO 3.3 - Explain the factors at work in the organization's internal environment

Internal environment = people + processes used in the exchange process. => Directly
controllable by the organization.

=> Understand the organizational strengths and weaknesses.

Internal marketing = cultural framework & process => strategic alignment between
the marketing strategy and the front-line staff.

1. Internal communications = ensure that employees’ actions are aligned with

company’s goals.
2. Internal market research = understand the employees’ needs & wants.
3. Provide training => reach the company’s goals.

External environment = outside of the organization and cannot be directly controlled

by the organization. => Marketers can seek to influence it.

E.g., Movie studios cannot prevent ppl from copying/file-sharing movies & TV shows w/
their friends => Lobby government to introduce legal penalties for doing so + include
warnings about piracy on DVD, Blu-ray packaging, and films.

● Outsourcing: transferring an internal function => an external provider.

● Opportunities & threats: positively/negatively affect the org’s ability to serve the
mkt.
LO 3.4 - Understand the importance of the different micro-environmental factors

● Forces within the industry that are not directly controllable by the organization.
● Marketers can exert influence on the micro-envi. (E.g., Jetstar can’t directly control
a customer => influence satisfaction by improving its complaint handling
procedures)

1. Customers & Clients

● understand what their customers value now

● be able to identify any changes in customer preferences
● be willing and able to respond to changes
● anticipate how needs and wants might change in the future
● be able to influence customer preferences.

2. Partners

● logistics firms — storage and transport

● financiers — banking, loans, insurance and electronic payment
infrastructure
● advertising agencies
● retailers
● wholesalers — storage and distribution
● suppliers = existing & potential suppliers’ cost, availability, time
frames & planned innovations => determine how they can best create
value. Identify, assess, monitor & manage risks to supplies & risks to
the price of supplies

3. Competitors

● Value > competitor’s offerings.

● Understand competitors’ mkt mix, sales volumes, sales trends, mkt
share, staffing, sales per employees & employment trends.
LO 3.6 - Understand the components of marketing planning
 Chapter 7: Profit, cost, and revenue

The meanings of the total cost, average cost, average variable cost, marginal cost and fixed
cost (7.3)
• Total revenue (TR) is the amount of money generated by selling some quantity
of output (Q) at some price (P): TR = P x Q
• Average revenue (AR) is the amount of money generated per unit by selling some
quantity of output. AR = TR / Q = (P x Q) / Q = P
• Marginal revenue (MR) is the amount of money generated from the sale of an
additional small increment of output. MR = ΔTR / ΔQ
• If price (AR) falls then marginal revenue will fall twice as much.
Graphically, this means that the flatter [or steeper] the AR curve is, the flatter [or steeper] the
MR will also be.

Accounting profit: total revenue from sales over and above the total explicit cost of
production
Explicit cost (chi phí hiện): monetary payments made to acquire the inputs needed to
produce goods/services
Implicit cost (chi phí ẩn): the opportunity cost equal to what a firm must give up in order
to use a factor of production for which it already owns and thus does not pay rent
Normal profit: the amount of money needed to cover the entrepreneur’s implicit costs of
running their business
Economic profit (supernormal profit): total revenue over and above the total explicit cost
and implicit costs of production

Economic profit vs accounting profit:

Scenario 1: Total revenue 3000

Mặc dù on paper accounting profit cty đẻ ra 1800$, tuy nhiên thằng economic profit
mới là đứa take into account implicit cost (thằng công ty này đã có thể đang make
1000$ ở nơi khác), vì vậy profit thực tế của nó chỉ có 800$ thôi.

Scenario 2: Total revenue 2000

Ở scenario 2 này thì mặc dù accounting profit của nó vẫn đang make money, nhưng
nó đang thật sự suffer 200$ economic loss in a form of opportunity cost
=> Economic profit is more rational for an entrepreneur

4 types of inputs: land, capital, labor, material

Short-run : a situation where at least 1 of 4 inputs is fixed in quantity
Long-run: all of the inputs are variable
Fixed, variable, total cost curves:
Fixed cost: do not depend on the level of output
Variable cost: rise with the level of production
Total cost: Shape y change variable cost nhưng cao hơn = amount của fixed cost

(Increasing slope of the curve indicates a sign of diminishing return)

Marginal cost (chi phí biên): Extra cost corresponding to each additional unit of production
Average cost: Total cost / Quantity
Average variable cost: Variable cost (TAC) / Quantity

Chapter 8: Market Structures

Chapter 10: Entrepreneurship - Definition and Evolution

Chapter 11: Starting an Enterprise - The Entrepreneurship Alternatives

 Exercises:
CHAP 1: Question 1

a. What is Innovation? Give example?

- Innovation is a process of creating value from ideas and successful implementation of

creative ideas within an organization.

- For example, Trung Nguyên Legend Capsule is one of the first coffee capsules in the
world that has the ability to store independently and is completely environmentally
friendly.
b. What is the company’s overall business strategy (where it is trying to go as an
organization) and how will innovation help it get there?
⇒ This innovation supports the company’s business strategy in which the company wants
to be creative in the way it sells the unique Vietnamese high-end coffee taste and
experience not just nationwide but also worldwide while ensuring responsibility and
harmony and sustainable development as a top coffee brand of Vietnam.

c. Apply 4Ps of innovation (Product, Process, Position and Paradigm) and give your
own examples - Car industry – 4 dimensions (4Ps)

Product:
Product innovations involve changes in the product or services the start-up or organization
has to offer. Product innovation can involve a change in the design of an existing product
or changing the entire product or service.
For example, autonomous vehicles are designed with integrated mechanical, visual, and
sensor technology to enable them to drive independently on the roads. Moreover, this
robotic technology will have significant implications for future travel. General Motors has
taken the lead in developing self-driving cars without steering wheels. Many other
companies such as Tesla, BMW, and Mercedes Benz have also rolled out partially
autonomous cars, especially in the luxury vehicle segment.

Position:
Position-based innovations also relate to changes in how a specific process or product is
perceived or used.
For example, it introduced changes to its business strategy and announced a new corporate
vision, the central premise of which was Toyota’s repositioning from a car manufacturer
to a mobility company. Despite changes in the brand’s positioning and messaging, the set
of principles developed by Toyota’s founders, which focus on quality, reliability and
responsibility, still guide brand development.
 Process:
Process innovation refers to innovations helping companies in aligning their processes in
a customer-oriented manner to ensure their business is successful in the long term.
For example, Radical process innovation fundamentally changed car makers' approach to
building cars. Placed much greater emphasis on team working, reduced waste, and on ‘just-
in-time ‘pull systems rather than trying to forecast demand and holding large inventories ‘
just in case'

Paradigm:
Paradigm Innovation refers to the shift in the underlying mental model via a change in the
business status quo.
For example, The paradigm shift has redefined the car to become less of a transportation
tool and more of a mobility experience. With more and more workers working remotely,
people are now having more time and freedom to live and travel to any place they like. The
car represents this dynamic lifestyle, offering a private space that feels like home, with all
the enjoyment, convenience, and comfort of home.
d.

Innovation Aspect of Source of Type of Dimension of

innovation innovation innovation innovation (4Ps)

Vinfast Vinbus: Meeting social Industry and Radical Product,

Operating using a needs market changes, Paradigm
non-profit model, Perceptual https://vinbus.vn
the biggest goal of changes /gioi-thieu
VinBus is to
contribute to
building a
civilized and
modern green
public transport,
thereby reducing
air and noise
pollution in urban
spaces of
Vietnam.
Kia Kia EV9 - Identifying or Industry and Incremental Position
Electric car creating Market changes,
opportunities Perceptual
changes

New brand Identifying or Industry and Incremental Paradigm

strategy - battery creating Market changes,
electric vehicles opportunities New knowledge
(Source)

CHAP 3: Question 2
- Why is the micro-environment important for marketing managers?
- Micro-environment factors affect all parties in the industry, including suppliers,
distributors, customers, competitors and the internal environment
+ The internal environment refers to the people and the processes are used to create,
communicate, deliver and exchange offerings that have value. A thorough understanding
of the internal environment ensures that marketers understand the organization's strengths
and weaknesses. Typically, marketers seek to minimize weaknesses and maximize
strengths.
+ Suppliers form an important link in the company's overall customer value delivery
network. Any problems occurred with suppliers that can dramatically affect on marketing.
Moreover, Supply shortages or delays, natural disasters and other events can cost sales in
the short run and damage customer satisfaction in the long run. Therefore, increasing
supply costs may force price increases that can harm the company's sales volume.
+ Competitors motivate the company to work hard for better competitive advantages. On
the other hand, this factor can harm the company's sales and profits. A company must
provide greater customer value and satisfaction than its competitors do. Moreover, each
company should consider its own size and industry position compared with those of its
competitors.

- For example: Mc Donald's Company

+ Customers: Customers are a major environment factor for McDonalds. Everyday nearly
54 billion customers served by McDonalds and are mainly young generation. That's way,
company always conscious about their choice. For this reason, customers demand, their
choice, their liking, everything is impacting McDonalds
+ Competitors: McDonald's main competitors are Wendy's, Burger King or Pizza Hut. So
McDonalds always needed to treat competitors carefully. That's way the factor related with
competitor like competitors product quality, service, price competition, market, sales and
everything is impacting Mcdonalds
+ Supplier: If suppliers have strong bragaining power, competitive pressure will be greater.
McDonald's works in partnership with most of their suppliers to protect the quality of their
foods and minimise the bragaining power of suppliers.

Macro Environment
- Political Factors are all about how and to what degree a government intervenes in the
economy. This can include – government policy, foreign trade policy, tax policy, labor law,
environmental law, and so on.
- Economic factors have a significant impact on how an organization does business
and also how profitable they are. Factors include – economic growth, interest rates,
exchange rates, inflation, disposable income of consumers and businesses, and so on.
- Socio-cultural factors are the areas that involve the shared belief and attitudes of the
population. These factors include – population growth, age distribution, career attitudes,
and so on.
- Technological factors determine the level of innovation, research, and development
within an industry and the potential impact it could have such as mobile technology, R&D
capacity, digital technology, and so on.
- Environmental factors are that the business community began to recognize that changes
to our physical environment can present material risks and opportunities for organizations
such as carbon footprint and climate change impacts.
- Legal factors are those that emerge from changes to the regulatory environment, which
may affect the broader economy, certain industries, or even individual businesses within a
specific sector such as consumer protection laws, health and safety regulations,
employment laws and so on.

Example: PESTEL of McDonald’s in Viet Nam

Political
The government is paying more attention to the benefits and interests of customers.
Moreover, many laws have been passed to define the responsibilities of business firms.
Economic
Viet Nam is a member of WTO in 2007 and has had steady economic growth. Many
employees decide to get more jobs with high salaries.
Social
Vietnamese like to buy at a low price and are careful in their buying decisions. Moreover,
Vietnamese prefer to try products by themselves than believe salespersons.
Technology
 HCM City has evolved from a traditional agricultural city to a technological society. The
standard of living has improved due to people living in more convenient conditions and
being offered various products and services on demand.
Environment
Environmental problems in Viet Nam include water, air, and solid waste pollution.
However, environmental sustainability is part of Vietnam’s Comprehensive Poverty
Reduction and Growth Strategy.
Legal
Vietnam is constantly passing progressive laws that are making it more open for foreign
investors to do business. Moreover, potential government interference to satisfy their own
agenda.
CHAP 7 – Question 3: The meanings of the total cost, average cost, average variable
cost, marginal cost and fixed cost
CÂU TÍNH TOÁN: Cho Output, Average fixed cost, average variable cost=
TVC/output

● Calculate fixed cost (do not change)

● Identify the level of output and detail how the average total cost
● If you produce a certain output, how about the average total cost?
● If not production, how about the cost = Fixed cost
● If the company decide to increase the output, how the total costs increase ⇒
marginal cost calculate: the change of the resulting from each unit increase in
output)

Fixed cost (FC) = AFC * output

Variable cost (VC) = AVC * output
Total cost (TC) = fixed cost (FC) + variable cost (VC)
Marginal cost (MC): Extra cost corresponding to each additional unit of production =
Change in total cost/ Change in output
Average Total Cost (ATC) = Average / output
Average Variable Cost (AVC) = Variable cost / Quantity
Average Fixed Cost (AFC) = Total fixed cost/Output

Output AFC ($) AVC ($) FC VC TC ATC

1 300 120 300 120 420 420

2 150 75 300 150 450 225

3 100 70 300 210 510 170

4 75 73 300 292 592 148

5 60 80 300 400 700 140

6 50 90 300 540 840 140

10 30 160 300 1600 1900 190

B1: Tính FC (Fixed cost) = AFC * output

B2: Tính VC (Variable cost) = AVC * output
B3: Tính Total Cost = FC + VC
B4: Tính ATC = Average / output
B5: Tính MC = Change in total cost/ Change in output.
AVC= 500:6= 83

AFC= ATC-AVC= 80-46=34

ATC= TC:Q= 4000:55= 73

TC= (25*60)+ 3000=4500

MC= change in cost/change in quantity =

(5000-4500)/(62-60)=250
 CHAP 11: Question 5

Explain the Advantages & Disadvantages.

Start-up Purchase Franchise

Advantages ● Ability to determine ● Can begin trading ● New business owner does
business direction immediately not have to develop their
● Flexibility ● Easier to arrange finance own operating, staffing,
● Cost minimisation for the venture marketing systems
● Lifestyle goals ● Established track record, ● Less time wasted ‘learning
customers, brand by mistakes’
● Product/service is already
well established
● Lower costs of raw
materials and supplies
● Raising capital can also be
easier

Disadvantages ● Raising capital ● Less flexible than a start- ● More expensive than start-
● Lack of an established up up ventures
customer base ● Difficult to establish ● Purchase price is often
● Cash flow shortages purchase pri quite high
● Learning curve ● May ‘inherit’ existing ● Must comply with
expenses liabilities franchisor directions
● Limited duration of the
franchise agreement

Beer industry: is Sabeco a franchise/start-up/purchase?

● Sabeco JSC., most famous for brands like Bia Saigon and 333 Beer, was originally
a small brewery by a French man in Saigon 1875.
● In 1927, the factory was merged into BGI managed by French colonists, before
being nationalized in 1977 as a state-owned business managed by the Vietnam
government.
● In 2018, Bangkok-based ThaiBev bought a majority of shares in Sabeco for 4.8
billion US dollars, ending Sabeco's domestic ownership.
● It can be said that Sabeco was a start-up before being purchased by larger
companies.
What is the entry mode (start-up, purchase, franchise) that you recommend for
entrepreneurs to choose when entering the Vietnamese market of the DAIRY
MILK/COFFEE/CAR industry? And explain why.
→ When considering the Vietnamese car industry, the entry mode can be a start-up. This
is because the automobile industry in Vietnam is one of the fastest-growing sectors in the
country. The country and its automobile industry are heavily reliant on domestic sales for
sustainability and growth. The automobile industry in the country is heavily dominated by
foreign brands and there is intense competition. However, an entrepreneur can choose a
startup automobile company because it can allow better strategic growth. There are various
favorable aspects that can ensure that the Vietnamese automobile car startup can be
successful. It includes the Vietnamese government intervention that focuses on protecting
domestic manufacturing and fewer taxes on this production. This can ensure that a startup
can be considered favorable if it is innovative and has the potential to cater to the needs of
the customers in the Vietnamese automobile industry market.

Give an example for each advantage & disadvantage of a start-up company

 Advantage: Many startups like Momo, Tiki or Sendo in Viet Nam offer employees
the opportunity to work flexible hours, and they even allow employees to work from
home if they choose. This is a great perk for professionals with an active home life
or with regular responsibilities outside of work.
 Disadvantage: Unsure job security - For these reasons, working at a startup often
does not guarantee job stability or security. For example, some employees work
with Tiki Corporation that's only in business for three years, and after that period of
time, they have to find other work due to the startup shutting down.
Give an example for each advantage & disadvantage of a franchise company
 Advantage: In Viet Nam, we have many franchise companies such as Trung Nguyen
Legend, Burger King, Phở 24 or Pizza Hut. One of the many benefits of franchising
is increased brand awareness. The more locations the brand has, the more people
who are aware of the brand. And the more these customers come to know and love
the brand, the more profitable and successful the brand can be.
 Disadvantage: You own the franchise and are your boss, but creativity and
independence are limited because you must adhere to franchise rules and
regulations.