group assignment potential investments for acecook

Acecook''''s products on the market have become the leading food not only in Vietnam but also reaching out to the world.. Acecook occupies a large market share of instant noodles in Vietnam

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GROUP ASSIGNMENT POTENTIAL INVESTMENTS FOR ACECOOK

Subject: MGT103 Group: 3 Class: MKT1805 Lecturer: Nguyễn Tú Th ảo

No Name of group members Student ID

5 Phạm Nguy n Thúy Hi n ễ ề SS181040

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Acknowledgements

First of all, we would like to thank Ms Nguyen Tu Thao for her enthusiasm for students like us She wholeheartedly guided us to give us suggestions to make our report complete

in the best way I also thank my team members for working together enthusiastically to make this report in the most thorough manner The period of time is not too short nor too long It helped me learn useful knowledge from her and we can successfully complete this subject We would like to express our sincere gratitude to Ms Thao for her comments and best completion of this report

Table of contents

1 Executive Summary 5

2 Introduction 5

3 SWOT analysis 5

3.1 Strength 5

3.2 Weakness 6

3.3 Opportinity 6

3.4 Threats 7

4 Market analysis 8

5 Analysis of investment decisions 9

5.1 Identify three potential types of investment 9

5.2 Analyze advantages and disadvantages of each alternative 9

6 Evaluate each alternative in terms of feasibility, satisfactoriness and consequences 11

7 Select the best alternative 12

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The opening is the introduction of Acecook Vietnam company The company was established in 1993 As a long-standing enterprise that has made a name in the market and grasped its product advantages Acecook's products on the market have become the leading food not only in Vietnam but also reaching out to the world Acecook always brings

to the market diverse products with high quality, better taste, creating a rich and diverse cuisine, contributing to the development of the world's "kitchen" In order to maintain the current position, it requires careful research on the market, competitive potentials in terms

of products and the trend of catching up with the market to achieve maximum efficiency Facing fierce competition, pressure on rivals Acecook has made investment decisions to upgrade its products They have given potential that need to be developed to invest in their business They then provide an analysis of the advantages and disadvantages of having to replace investment decisions about a business Finally, include objective assessments of the proposed options in terms of feasibility, customer satisfaction with the product and the selection of the best option to implement the product investment to become the leading consumer product in the world This essay will analyze “potential investment opportunities for Acecook”

2 Introduction

As a leading manufacturing enterprise in the world in Japan, Acecookk pioneered investing in the market by forming a joint venture between Acecook Japan and a food company in Vietnam on the 15th December 1993 and officially operated in 1995 Acecook brand has constantly grown to become a leading food company and has always stood firm

in the Vietnamese market Acecook is considered a leading name in the field of packaged food with the third position in the Top 10 prestigious food companies in 2022 With the export market, Acecook Vietnam's products are now present to more than 40 countries around the world, in which countries have strong export market shares such as the US, Australia, Russia, Germany, etc Acecook always offers high quality products, creating a rich culinary culture With the goal of bringing delicious and fast meals but still paying attention to health and nutritional value, Acecook has promoted high-end products with vegetables, eggs, meat, and Acecook is developing more products with high nutritional value to ensure the health of consumers, that created the name for Acecook, and has a strong position, this is also the most consumed product thanks to the campaign, marketing strategy that Acecook enterprise has invested in The fact that Acecook guarantees 100%

of product quality to meet quality standards and ensure the health of consumers has hit the customer's psychology, increasingly asserting its name

3 SWOT analysis

3.1 Strength

- Acecook is the most bought instant noodle brand: Acecook has been voted "The most chosen instant noodle manufacturer in 2021" for the fourth time in a row, according to a survey by Kantar Worldpanel Division - Household Panel

Acecook occupies a large market share of instant noodles in Vietnam: holds a market it share of 35.4% in revenue, as per the data from Retail Data statistics for the first nine months of 2020 In 2019, Acecook led the market share with net revenue of VND 10,648 billion, net profit of VND 1,660 billion, a ratio of nearly 16% In 2018, Hao Hao noodles even set a record of "the most consumed instant noodle product in Vietnam in 18 years"

2018)

- Products are diverse, with a combination of traditional and modern: Acecook's most successful product is Hao Hao instant noodles In recent years, Acecook Vietnam has expanded its product portfolio beyond Hao Hao, which can be mentioned as Thai hot pot noodles, De Nhat noodles, Do Do, Mikochi, Bistro spaghetti or Phu Huong vermicelli

- Modern technology, advanced production line: Acecook Vietnam has been fully transferred the instant noodle production technology from Acecook Corporation of Japan

to produce products according to Japanese standards, ensuring criteria for quality, nutritional value and food safety and hygiene Each factory of Acecook Vietnam has an investment cost of more than 50 million USD, with an automation rate of more than 80%

On average, every minute the factory will produce 600 packages of noodles and 420 cups

of noodles The factories are designed according to Japanese standards, using advanced equipment, all stainless steel

3.2 Weakness

- Haven't made an outstanding performance in the high-end market: A few years ago, the mid-segment instant noodle market was considered attractive and stable for manufacturing enterprises, but since 2017, the high-end segment is considered to have a lot of potential power Over the years, the high-end segment has grown very quickly, Acecook is gradually approaching but still lags behind its main competitor, Masan with its main brand Omachi

- Market share decreased slightly: In 2020, Acecook's instant noodle sales reached VND 11,531 billion, up 8.29% compared to 2019, accounting for 32% of the total market revenue Meanwhile, Acecook's instant noodle sales in 2019 and 2018 accounted for 35% and 36.6% of the total market revenue, respectively

- Media crisis incident: On 20/08/2021, The Food Safety Authority of Ireland (FSAI) announced that a number of batches of Hao Hao branded instant noodles and Good vermicelli are being recalled due to the presence of ethylene oxide

3.3 Opportinity

- The market for instant noodles in Vietnam is huge: According to data from the World Noodle Association (WINA), during the two years of the Covid-19 pandemic, consumption

of instant noodles in Vietnam skyrocketed Overcoming India and Japan, in 2020, Vietnam becomes the third country in terms of consumption of instant noodles with 7 billion packages (up 29%) By 2021, Vietnam will consume more than 8.5 billion packages of noodles (up 22%) In terms of growth rate, no market in the Top 10 can surpass Vietnam

- Consumers are increasingly interested in the quality of products, their own health, as well as green consumption: According to the survey of Herbal Life Nutrition, 94% of consumers in Vietnam believe that having good health is a journey and 94% are taking steps to improve health in 2021

- The market for instant noodles in Asia in general and the Philippines in particular is huge According to the World Instant Noodles Association, in 2018, the consumption of noodles

in the Philippines ranked 7th in the world with 3,980 servings This is a potential market for Acecook to approach to get more new customers

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Source: World Instant Noodles Association

- Electricity from biogas has become a major trend in many countries According to Biogas World, there exist approximately 2691 biogas projects worldwide Thanks to the readily available and economical supply of feedstocks, biogas is an environmentally sustainable and financially viable source of energy that is also quite competitive

3.4 Threats

- Competitive market: According to a report by market research company Kantar Worldpanel, every 2 days, an instant noodle product is born in Vietnam The instant noodle industry, including cup noodles and instant noodles, achieved revenue of VND 28,000 billion in 2020, with 85% from instant noodles and the rest from cup noodles Acecook's biggest competitor is Masan with 2 main products, Kokomi and Omachi Mason's market share saw an increase of 3.1% from 2019 to 2020, reaching 27.9% In contrast, Acecook's market share decreased by 1.4% Besides, there is the competition of domestic (Uniben, Asia Foods, Miliket, Vifon) and foreign brands ( Samyang, Indomie, )

Source: Retail Data

- Raw material prices increase: The main raw materials of instant noodle such as flour, shortening oil, rice, palm oil, rice husk, coal bran have all increased in price over time Another pressure is that many imported goods also increase in price

4 Market analysis

a) Apply biogas technology from rice husk and sawdust to generate energy for factories

Evidence:

- Masan Consumer started the "Energy Saving Innovations" campaign by reducing their production process and using less energy

- They utilized biogas manufacturing from rice husks and sawdust waste to create electricity for their factories

- In addition to being an economical and environmentally friendly energy source, biogas also generates income and jobs for the community

Achievement of Masan:

They consumed more than 297 million tons of steam in 2021, including biomass or diesel steam (sawdust, rice husk, etc.)

- With to strong sales growth across the board for most different business segments, Masan increased revenue of more than VND 88 trillion in 2021, an increase of 14.8% from the previous year

Potential for Acecook

- The Mekong River Delta, Red River Delta, and Central Coastal Plain are the locations of most of Vietnam's rice husk and straw reserves The distribution of Acecook's branches throughout the world is a benefit for lowering delivery costs

- The Mekong Delta may be reached by car in just one hour from the Vinh Long branch

b) Developing Noodles from whole wheat flour

Statistic of market share

- Omachi instant noodles dominate the high-end segment, according to data from VNDIRECT Securities Company's analytical study, with 45% market share Sales of noodles by Masan Consumer would total VND 8,800 billion in 2021, an increase of 28% and 72% of Acecook's revenue

- Vietnamese customers in particular and global consumption trends in general are preferring healthy products in the face of the COVID-19 pandemic

- The avoidance of obesity (particularly in women) and improvement of the body's metabolism are two of wheat flour's main benefits

c) Invest in marketing and promotion in new market

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- Of the top 10 nations that consume the most instant noodles worldwide, the Philippines comes in at number seven People in this region consume instant noodles to save money for the future because this region frequently experiences natural disasters

- Filipino cuisine is a well-balanced combination of sweet, sour, and salty ingredients Filipino cuisine always combines the flavors of salt, sweetness, and sour in a satisfying way The sour and sour Hao Hao noodles from Acecook are appropriate for this market You should visit Greenbelt Mall and Ayala Center Cebu Market because they are both large retail malls with a high amount of international visitors who make Hao Hao noodles more accessible

5 Analysis of investment decisions

5.1 Identify three potential types of investm ent

- Apply biogas technology from rice husk and sawdust to generate energy for factories

- Development of premium noodle product line (Noodles from whole oat flour)

- Invest in marketing and promotion in new markets

5.2 Analyze advantages and disadvantages of each alternative

a) Development of premium noodle product line (Noodles from whole wheat flour) Advantages:

- It can offer consumers a healthier alternative to the conventional noodles In addition, the company will be able to position itself as a leader in its industry by offering customers

a healthier alternative to its other products in the market This will also help increase sales and profitability of the company

- It will be able to cater to the needs of consumers who prefer healthier products This segment of customers is growing in number and the company can tap into this market by providing them with a healthier alternative

Disadvantages:

- It will require significant investment in research and development, including testing the product on customers to ensure that they are satisfied with it This can be quite costly and will lead to a decline in profitability in the short term as well as long term

develop a unique product, it may find itself at a disadvantage against its competitors

b) Apply biogas technology from rice husk and sawdust to generate energy for factories

The process of generating biogas from organic waste materials is relatively simple and cost-effective The organic waste is first collected and then fed into a digester, where it is broken down by bacteria in the absence of oxygen The gas produced is then captured and used as fuel to generate electricity or heat Biogas technology has the potential to provide a cost-effective energy solution for factories, especially those that generate large amounts of organic waste

Advantages:

- Save a portion of the production costs

- Environmental friendliness

- Create jobs and raise revenue for local residents

- Reduce waste management costs

- Generate electricity for factory operations

- Reduce dependence on fossil fuels

- Sustainability and green energy production

Disadvantages:

- Rice husk is an organic waste material that can be used to make biogas The process of making biogas from rice husk involves decomposing the organic matter in a closed system, which produces methane and carbon dioxide as byproducts

- High investment cost:

The investment cost includes the cost of machinery, equipment and the site development The cost of installing a biogas plant and the overall operation is expensive because the technology is new and requires high-level skills to run properly

The technology involves a long process that requires a lot of time to generate biogas from organic waste materials such as sawdust or rice husk

- It requires a large amount of space for installation, which makes it impossible for factories

to implement this technology

c) Invest in marketing and promotion in new markets

Advantages:

- Increased visibility and brand recognition: By expanding into new markets, businesses can introduce their brand to a broader audience, which can increase their reach and visibility This increased visibility can help businesses establish themselves as a reputable brand and build trust with potential customers

- The ability to target specific demographics and tailor marketing strategies appropriately: Different markets have different preferences and needs, and a tailored approach can help businesses connect with potential customers more effectively By researching and understanding the target audience, businesses can create targeted campaigns that are more likely to resonate with potential customers

- Increased sales and revenue growth through an expanded customer base: By entering new markets, businesses can access new customers who may not have been aware of their products or services before This can lead to increased sales and revenue growth over time, which can help businesses achieve their growth objectives

Disadvantages:

- The increased cost: Entering a new market requires a significant investment of time and