THE REPORT OF MICROECONOMICS PROJECT

ÔNG BẦU TAKE – AWAY COFFEE

Group 01 – Class CC02: 1. Trần Bảo An - 2153149

2. Nguyễn Hoàng Minh Anh - 2210084

3. Trà Lâm Anh - 2052849

4. Cao Thiên Bảo - 2153197

5. Lê Thụy Ngọc Châu - 2252088

Lecturer: Dr. Trần Duy Thanh

HCM City, 02/12/2022

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THEORETICAL BASIC

1. Demand
Demand is an economic concept that relates to a consumer's desire to purchase
goods and services and willingness to pay a specific price for them.

Determinants of demand:
 
 Price of good or service

 Income of Buyers

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  Price of related products

 Taste of consumers

 Expectations

2. Supply
Supply is a fundamental economic concept that describes the total amount of a
specific good or service that is available to consumers.

Determinants of supply:
 Price of the Commodity.

 Firm Goals.

 Price of Inputs or Factors.

 Technology.

 Government Policy.

 Expectations.

 Prices of other Commodities.

 Number of Firms.
I. Description of the event

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- Ong Bau coffee is a famous name in the field of coffee. Among the
prominent names today, it is impossible not to mention the “Ong Bau
Coffee” brand with a rapid development speed, which is quietly spreading its
branches across the country.

- Compare to other brands, the differences of Ong Bau compare to others are: 

 Own the CADA farm: Supply their own high-quality coffee beans  
 Marketing campaign: Digital marketing and receiving promotion support
from many famous football players
 Stable materials with low cost: With support from NutiFood company,
Ong Bau coffee chain ensure the best cost for raw materials, while
minimizing losses during operation
 Opportunity for franchising: For the mobile bar model, it will be more
flexible for those who are just starting out with insufficient finance, the
required area is about 2 - 5 m2 with an investment of about 102 million.
 Reasonable price: 16.000 VND - 35.000 VND per cup of drink
 Variety of drinks: Coffee, Milkshake, Yogurt, Tea,... (with lots of
toppings)
 Has a special taste and aroma
 Impressive slogan: “Real Coffee, Real Life” 

- Three big advantages strategies that help Ong Bau take away coffee reach a
sustainable development of products and services:

 Clean coffee: Have their own farm (CADA) to grow coffee beans. And
the quality of coffee also affects the reputation of 3 big names owners of
football clubs. 
 Low price: Positions itself in the popular segment, therefore it’s easy to
reach a wide range of customers. 
 Vietnamese have a deep passion for football, and their nation is
frequently cited as one of the football-loving nations in the world. In

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 order to support the development of Vietnamese youth football, this new
business has pledged to donate 1,000 VND for every product it sells from
the very first days of its inception.

II. Problem statement

- There will be a significant adverse effect on the environment as a result of
utilizing 100% plastic cups to serve consumers.
- The plastic cups used for iced drinks are also problematic. Most are made
from polypropylene which is not accepted in many curbside recycling
programs. Plastic lids might prevent spills but the single-use items are
typically made from polypropylene or polystyrene, a petroleum-based plastic
that is difficult to recycle. When coffee cups are tossed into the recycle bin
with their lids attached, the components have to be separated before they can
be processed in separate recycling streams.
- Plastic has a devastating effect on the ecosystem. There is a ton of
information demonstrating how it is affecting animals, from habitats
tremendous their food supplies. Global warming and pollution, it not only
affects animals but also many other areas of the planet. It has been disproven
that it is sufficient to merely put your plastic garbage in a recycling
container.
- In landfills and the ocean, it takes 450–1,000 years for each cup to
decompose into microplastics. Toxic chemicals seep into the surrounding
soil as polystyrene decomposes at a landfill. Human neurological systems,
livers, and reproductive organs can be harmed by exposure to the major
compounds that come out of polystyrene, styrene and benzene.
- To make matters worse, individuals who work and live close to these
hazardous dumps are those who are most at danger, which means minority
groups in the US are disproportionately affected by the serious health
concerns. For instance, 1.2 million people reside within two miles of

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 hazardous waste plants in Los Angeles. These people comprise 91% of
minority communities. This implies that cutting back on your use of plastic
is also a matter of racial justice in addition to the environment.
- Inadvertent ingestion of these harmful plastic pieces by animals is also a
concern. 43% of all marine animals and 86% of sea turtles, respectively,
have plastic debris detected by researchers. Animals suffer because they
can't digest the food they need to survive when their stomachs are full of
plastic. Over time, it's possible that people will consume these plastics once
they pass through the food chain. Between 39,000 and 52,000 microplastic
particles may be ingested by people annually, say experts. We use these red
plastic cups for 15 minutes and then they are on earth for 450+ years. 
- Governments, corporations, and people must thus take action and seek a
more sustainable solution to the plastic problem. Future generations and the
earth as a whole will undoubtedly benefit from our common obligation to
take essential actions.

III. Objectives
The objective of this research was to:

- Determining the current practices of the organization.

- Determining the problems brought about by the current practices of the
organization.
- Evaluation of the current practices.

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 IV. Finding
- The unique name “Coffee Ong Bau” comes from the cooperation of three
powerful businessmen: Mr. Doan Nguyen Duc (elected Duc), Chairman of
the Board of Directors of Hoang Anh Gia Lai Group; Mr. Vo Quoc Thang
(elect Thang), Chairman of the Board of Directors of Dong Tam Company
and Mr. Tran Thanh Hai, Chairman of the Board of Directors of NutiFood
Company. Famous as the “boss” of the heart in the sports world of the
country, besides the common passion for football, all three of these
entrepreneurs are attached to and have a love for Vietnamese coffee beans.

- The brand “Coffee Ong Bau” was established with the biggest purpose of
bringing real value to Vietnamese coffee beans. The value here is not only
economic value, but also quality and brand value. For that reason, the
business philosophy associated with the word “real” is set by the bosses for
their brand.

- “Whatever I do, I pursue two things: Clean and real. Playing football must
be clean and drinking coffee must be real. Every cup of coffee Mr. Bau sells
is one less cup of unreal coffee”, said Mr. Duc shared this on the opening
day of the 100th store of the “Ong Bau” coffee chain.

- The attraction of the franchise business model

- Trading in clean coffee, real coffee, but “Ong Bau Coffee” is surprised by
the extremely reasonable price in the current price storm. From the sidewalks
to the “5-star” premises, the quality and price of the “Coffee Ong Bau” brand
are always the same with the price of only 16,000 – 28,000 VND/cup,
suitable for a wide range of customers and customers. always accompanies
many partners who wish to cooperate with franchising and choose a
reasonable price frame according to each intended business area.

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- Up to now, the brand chain “Coffee Ong Bau” has expanded across the
country. Not only thanks to the quality and attraction of famous
businessmen, the rapid expansion of “Ong Bau Coffee” also comes from the
effective franchising method.

- Besides the desire to bring clean cups of coffee, the 3 managers also want to
cooperate and bring business opportunities to people who are like-minded,
love real coffee, and want to start a real coffee business but are limited. in
terms of capital and facing difficulties because of a lack of experience in
preparation.

- After a process of research and experimentation, “Coffee Ong Bau” is

currently providing its partners with 2 coffee shop models with flexible
capital while still ensuring business efficiency. Accordingly, for a group of
partners with small capital, the car model “CART” With a low investment
cost of 102 million, will be a completely suitable choice. According to a
representative of the “Coffee Ong Bau” brand, if placed in the right position,
the “CART” model can bring an average monthly sales of 50-60 million
VND.

- For partners with abundant capital, it will be suitable for a fixed store model,
with an area of 70-220m2 with an investment cost of only VND 205 million.
This is also the model favored by partners when cooperating with “Ong Bau
Coffee”. Many famous football players of the national team such as Van
Toan, Cong Phuong, and goalkeeper Kieu Trinh,… have all chosen this
model and now own their own “Coffee Ong Bau”.

- Ong Bau is economies of scale: In general, economies of scale depend on the

size of the company. The amount of cost reductions increases with business
size. Scale economies might be internal or external. While external
economies of scale are influenced by external circumstances, internal
economies of scale are dependent on management decisions.

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- With more than 150 locations spanning from the North to the South, Ong
Bau is delighted to offer unique coffee flavors in more than 35 provinces and
cities. An astonishing amount for a business that started out on the pavement.
In the upcoming years, Ong Bau plans to open 10,000 points of sale
throughout Vietnam since, when the system is vast and broad enough,
authentic coffee can easily reach lots of customers.

- The market structure of Ong Bau Coffee is monopolistic competition, a

monopolistic competitive industry has minimal entry requirements, and
actions made by any one business do not immediately impact those of its
rivals. The price and marketing choices made by the rival firms serve as
their points of differentiation.

- Market competition: The chain coffee especially the takeaway coffee market
is considered a fierce game, many brands entered, but they quickly retreated.
But it's still a desirable and viable market.

 Compete with different brands that are the same type of business, or
nearby competitors (Lyon Coffee, Gogo coffee, Rovina Coffee, Ava
Coffee,... )
 The threat of substitution
 Compete about the price; quality of the products, service; location;
marketing campaigns, and facilities,...

The impact of specialization

- Specialization by products: Ong Bau coffee concentrates on the production

of beverages alone.

 Increased efficiency: Ong Bau coffee focuses on drinks for a market

segment, so their production processes may become more efficient over
time. Team members may optimize production by finding ways to use

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 fewer resources and accelerate manufacturing speed after becoming
experienced in the position.

 Reduced production costs: Ong Bau coffee saves money because they
don't have to manage and supply a diverse range of products.
 Reduced product costs: Specialization allows Ong Bau coffee to reduce
the costs of its products because it also reduces the cost of production.
This often doesn't affect the quality of the products and may give the
company a competitive advantage in the market.

The impact of government policy intervention on the market

- Production support policy

 Restructuring activities for the Tây Nguyên province in the period 2014 –
2020
 Input support (irrigation fees, seeds, fertilizers,...): exemption and
reduction of agricultural land use tax, exemption of irrigation fees for
households and individuals that have land and water surface together into
production agricultural export
 Institutional renewal policy: Establishment of sectoral coordination
committee, Establishment of production association, Consultancy on
construction and innovation, Research on selection, breeding, application
of varieties, economical irrigation system, Study of current map Status
and causes of death in replanting, Research on building replanting
process, intensive farming process according to GAP
- Trade Policy
 Financial support for processing and construction projects of
infrastructure, traffic, electricity, water, machinery
 Land rental tax exemption for the project of building temporary storage
of agricultural products

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  Decision 1684/QD-TTG: "Focusing on major agricultural products" (rice,
vegetables, fruits, seafood, coffee, tea, rubber, cashew, pepper, timber,
and products from timber, animal husbandry...) with general and specific
solutions to promote the development of the main markets of these
industries.
- Policy on production association:
 Support and encourage businesses and farmers to associate production
with processing and consumption in large fields:
 Enterprises:
 Exempt from land use fees and land rent when building processing
factories and warehouses serving large fields.
 Priority is given to agricultural product export contracts.
 Support the cost of planning implementation and improvement.
 Organization, support, and technical training for farmers.
 Farmers:
 Thorough training on production and free market information on
agricultural products.
 Support up to 30% to buy quality varieties.
 100% storage fee.
Government policy to remedy market failures.
- Decree 08/2022/ND-CP: banning the production and import of non-
biodegradable plastic bags for domestic consumption will start in 2026.
- Gradually reduce the production and import of SUP products until the final
ban will be in place in 2031
- Charge for a plastic cup to take away
- Apply high-tech technology to treat coffee waste

Firm interaction in different market structures.

- Market structure: Monopolistic Competition

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  The market has many small firms, and there are no barriers to entering the
market. These firms compete with one another in areas such as product
performance/results.
 Each firm has an insignificantly small share of the market, and therefore
its actions are unlikely to affect its rivals to any great extent. 
 Each firm produces a product or provides a service in some way different
from its rivals. As a result, it can raise its price without losing all its
customers. Thus its demand curve is downward sloping
 Firms are often in fierce competition with other (local) firms offering a
similar product or service and may need to advertise on a local basis, to
let customers know their differences.

V. Conclusion
- Ong Bau Coffee got a high rating in the market survey, for the taste & quality
of their products. If they work on this aspect, there is huge potential for them to
attract customers, just based on the taste and quality of products. Ong Bau
coffee has a value for money proposition and strong youth orientation. Ong Bau
coffee has a strong brand image, but they still need to work hard on improving
its customer perception.

- Franchise stores “Ong Bau Coffee” are not only supported in-store setup, and
equipment system, provided and guided on drink recipes, but also benefited
from the source of coffee ingredients. from the legendary CADA farm over 100
years old and other quality ingredients provided by NutiFood Company.

- Ong Bau coffee brand chain is rapidly expanding its system and cooperating to
develop more partners and attractive incentive programs.

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 VI. The responsibility of members in the group

STATUS EVALUATE
NAME ROLE
Done Late Good Bad

- Research for the information

- Host the meetings
Trần Bảo An X X
- Make the video
- Support other members

- Research for the information

- Write a report
Nguyễn Hoàng Minh Anh X X
- Present
- Support other members

- Research for the information

- Summarize and filter the
Trà Lâm Anh information X X
- Support other members
- Present

- Research for the information

- Make a Powerpoint
Cao Thiên Bảo X X
- Support other members
- Present

Lê Thụy Ngọc Châu - Research for the information X X

- Write a report
- Support other members

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 - Present

VII.References
1. http://thitruongnongsan.gov.vn/vn/tID24992_Chinh-sach-nganh-
hang-ca-phe-.html
2. https://thoibaotaichinhvietnam.vn/giam-thieu-rac-thai-nhua-bang-
cong-cu-chinh-sach-va-co-che-tai-khoa-109627-109627.html
3. https://www.cask.vn/tin-chi-tiet/chien-luoc-nao-cho-ca-phe-ong-
bau
4. https://ipos.vn/chuoi-ca-phe-nhuong-quyen-ong-bau/
5. https://vnexpress.net/suc-hut-tu-chuoi-ca-phe-nhuong-quyen-ong-
bau-4448352.html
6. https://thanhnien.vn/giai-ma-ca-phe-ong-bau-post1001948.html
7. https://batdongsanproject.com/ai-dung-sau-ca-phe-ong-bau/
8. https://www.investopedia.com/terms/e/economiesofscale.asp
9. https://www.investopedia.com/terms/m/monopolisticmarket.asp
10. http://thitruongnongsan.gov.vn/vn/tID24992_Chinh-sach-nganh-

hang-ca-phe-.html
11. https://thoibaotaichinhvietnam.vn/giam-thieu-rac-thai-nhua-bang-

cong-cu-chinh-sach-va-co-che-tai-khoa-109627-109627.html
12. https://foodprint.org/blog/environmental-impact-coffee-cup/

13. https://cooleraid.co.uk/cooleraid_blog/what-is-the-environmental-

impact-of-plastic-cups/
14. https://supcups.com/pages/the-plastic-problem#:~:text=Plastic

%20cups%20take%20450%2D1000,low%20income
%20communities%2C%20and%20wildlife.

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