Business Plan: The Organics Limited, Organic Products in Vietnam

This business plan details the establishment of "The Organics Limited," a retail venture focusing on organic skincare and food products in Vietnam. The plan encompasses a comprehensive market analysis, highlighting trends in the organic food and skincare sectors, competitor analysis, and market segmentation strategies. It outlines the company's products, including both domestic and imported organic goods, and describes the business's size, operational plans, marketing strategies, and organizational structure. The financial plan includes pro forma statements, cash flow projections, and break-even analysis. The plan addresses potential risks, contingency plans, and the need for a strong financial foundation, suggesting the company consider listing to compete with established multinational companies. The company aims to cater to both middle and upper-class consumers, offering a range of products at varying price points. The document emphasizes the importance of employee training, risk management, and expansion into foreign markets like China. The business plan also includes appendices with market research data and references.

Running head: BUSINESS PLAN
BUSINESS PLAN
Name of the student
Name of the university
Author Note:

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Table of Contents
II. Executive Summary:...................................................................................................................1
III. Industry Analysis.......................................................................................................................1
A. Future outlooks and trends:.....................................................................................................1
Organic food market trends:........................................................................................................1
Organic skincare products market trend:.....................................................................................2
B. Analysis of competitors:.........................................................................................................3
C. Market segmentation:..............................................................................................................3
Demographic segmentation:....................................................................................................3
Psychographic segmentation:..................................................................................................4
D. Industry and market forecasts:................................................................................................4
IV. Description of Venture:.............................................................................................................5
A. Product(s) or Service (s) OR both:.........................................................................................5
Products (goods):.........................................................................................................................5
Skincare products:...................................................................................................................6
Food products:.........................................................................................................................6
Services:.......................................................................................................................................7
B. Size of business:......................................................................................................................7
C. Office equipment and personnel:............................................................................................8
Office equipment:....................................................................................................................8

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Personnel:................................................................................................................................8
D. Background of entrepreneur(s):..............................................................................................9
V. Production Plan:..........................................................................................................................9
A. Manufacturing process (amount subcontracted):....................................................................9
B. Physical plant:.........................................................................................................................9
C. Machinery and equipment:....................................................................................................10
D. Names of suppliers of raw material:.....................................................................................10
VI. Operations Plan:......................................................................................................................10
A. Description of company’s operations:..................................................................................10
B. Flow of orders for goods and/services:.................................................................................11
C. Technology utilization:.........................................................................................................11
VII. Marketing Plan.......................................................................................................................11
A. Pricing:..................................................................................................................................11
B. Distribution:..........................................................................................................................12
C. Promotion:.............................................................................................................................12
D. Product forecasts:..................................................................................................................12
E. Control:..................................................................................................................................12
VIII. Organizational Plan:.............................................................................................................13
A. Form of ownership:...............................................................................................................13
B. Identification of partners or principal shareholders:.............................................................13

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C. Authority of principals:.........................................................................................................13
D. Management team background:............................................................................................13
E. Roles and responsibilities of members of organization:.......................................................13
IX. Assessment of Risk:................................................................................................................14
A. Evaluate weakness (es) of business:.....................................................................................14
B. New technologies:.................................................................................................................14
C. Contingency plans:................................................................................................................14
X. Financial Plan:..........................................................................................................................14
A. Assumptions:........................................................................................................................14
B. Pro forma income statement:................................................................................................14
C. Cash flow projections:..........................................................................................................15
D. Pro forma balance sheet:.......................................................................................................15
Break-even analysis:..................................................................................................................15
Sources and applications of funds:............................................................................................15
XI. Appendices:.............................................................................................................................16
Market research data:.................................................................................................................16
References:....................................................................................................................................17

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I. Introductory page:
Name and Address of business: The Organics Limited
Headquarters: Trang Tien Plaza, Số, 23K Hai Bà Trưng, Hoàn Kiếm, 110116, Vietnam
Names and address (es) of principals:
Mr Li Cheng, Mr John Wilson and Ms Leena Shaw, Hanoi, Vietnam
Nature of Business:
Retail of organic skincare and food products, both indigenous as well as imported.
Statement of Financing needed: Attached
Statement of confidentiality of report:
The document and the information provided in it are sole properties of The Organics Limited.
The same would be used only for the purpose of The Organics Limited. Breach of confidentiality
of the information or its use by any identity without proper authorization of the management of
The Organics Limited or its appointed representatives, or successor(s) would attract severe legal
action.

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II. Executive Summary:
The organics products market is one of the growing segments in the fast moving consumer goods
markets. Consumers today prefer to consume products which are eco-friendly and contain less
amount of preservatives. The trend is stronger in developed and emerging markets. However, the
less developed markets are adopting the trend very fast. Vietnam is one such markets which is
experiencing growth in the organic food and skincare segments. The consumers in the country in
the country, especially the upper class consumers purchase organic products. However, the
country is dependent on foreign nations like China and Australia to meet its premium organic
products’ demands. The organic food and skincare industry is dominated to a great extent by
multinational companies like Bellami and L’Oreal. Thus, the organic products in the country are
generally priced extremely high since they have to be imported. Vietnam is a less developed
nation in Asian compared to the giants like China and India, which already have strong organic
products markets with fair mixes of indigenous and foreign companies. Thus, the larger portion
of its consumers cannot afford organic products owing to the high price. Moreover, the local
organic products shops, in general prefer to market foreign organic products brands at the
expense of Vietnamese brands. The new business described below namely, The Organics
Limited would offer organic skincare products and food products. It would sell organic products
of both foreign origin and Vietnamese origin. The firm would market both average priced and
premium priced. This would enable it to cater to the middle class consumers and upper class
consumers respectively. The organic products of Vietnamese origin would generally be priced
low and the imported products would in general attract high price since the latter have to be
obtained from overseas markets by paying heavy customs duty. New business ventures should
enter the emerging markets like Vietnam. The business plan shows that they should enter

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markets like organic products which are experiencing growth in demand for goods. The Organics
Limited as shown in the plan should enter the Vietnamese market with its ranges of food
products and skincare products. The company should market products aligned with the
expectations of customers. As the organic products market of Vietnam is already denominated by
global companies, the company should concentrate on retailing products in order to gain
sufficient funds required to launch its own brands in order to dominate the market in the future.
The Organics Limited should not only introduce new products but also create new employment
opportunities. The firm should employ manpower to operate in the country. It should acquire,
manage and retain skilled manpower. The company should offer legitimate salary, incentives and
other entitlements like paid leaves to the employees. The company should train its employees to
improve their skills and competencies. The report below already shows that the market
conditions in the Vietnamese organic products market is extremely competitive with presence of
overseas multinational companies. These companies mostly are listed and have immense capital
strength. This means that The Organics Limited should enter the Vietnamese market as a listed
company. This would give the company the financial strength required to compete with these
giants like L’Oreal. The report also points out two very important considerations which The
Organics Limited should take into consideration right from its inception stage, contingent plan
and risk management. The company should maintain a strong contingent plan which would
include contingent stock. The company should maintain contingent stocks of finished goods,
manpower and financial resources which would help the company tide over situations like
shortage of finished goods supply on temporary basis. Similarly, the management of the The
Organics Limited would recognize the risks which the company would likely face while
operating in the market of Vietnam. The management should form risk management strategies to

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mitigate or at least minimize these risks to the feasible extent. The company should train its
employees to identify and report risks. The company should also aim to expand into the foreign
markets like China in the long run.

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III. Industry Analysis
A. Future outlooks and trends:
Organic food market trends:
As per Voice of Vietnam, the national broadcaster of the country, the demand of organic
food products in the country is increasing. The country of Vietnam has a high population which
means that the country is capable of providing an immense consumer base to the firms marketing
organic food products (M-english.vov.vn, 2018). The consumers in the country are increasing
growing aware about the harmful effects on the health posed by fast food. They are consequently
showing interests in substituting fast food with healthier food options like fruit juice. However,
fruit juices contain added sugar which add to their sugar intake (Nguyen, 2019). Thus, there is a
growing demand for food products in Vietnam which are organic in nature sans excess sugar.
One can point out in the light of these trends in the food market in Vietnam, there are immense
business opportunities in the country for companies which would market organic and healthy
food products. It finally transpires from the analysis of these trends that The Organics Limited
should capitalize on this growing demand for organic and healthy food products to enter the
market of Vietnam and establish itself as a leading organic food marketing company in the
country.
Organic skincare products market trend:
The organic skincare products market in Vietnam is showing several positive trends.
First of all, the country is experiencing high GDP. The GDP of the country stood at USDbn
244.95 in 2018 compared to VNDbn 4770399.28 in 2016. The GDP per capita experienced by
the country in 2018 was VND 54450594.12 in 2017 (Tradingeconomics.com, 2020). This shows
that the country is experiencing increase in the production of goods and services. This means that

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firms in the country would require more manpower to meet their increasing productivity needs
which would generate more employee opportunities for the people in the country. This means
that the consumers in Vietnam would have more disposable income to afford organic skincare
products which generally more expensive compared to their inorganic counterparts. This increase
in disposable income available to consumers is reflected in the increase in the amount consumers
spend on skincare products. The consumers in the country on average spend around $100 a year
in purchasing skincare products (Chi, 2018). The second trend in the skincare market in Vietnam
is growing demands for organic skincare cosmetic products. Consumers in the country prefer
skincare products made ingredients like coconut, honey and rose. The third trend in the skincare
industry is that it is largely dominated by foreign brands like L’Oreal. The local skincare
products manufacturing firms are usually small scale firms which cannot allocate sufficient funds
to market their products aggressively in the market. The skincare products retail chains in
Vietnam usually advertise the foreign organic skincare brands owing to their greater profitability
at the expense of the local brands (Vietnamnews.vn, 2019).
B. Analysis of competitors:
An analysis of the competitors which The Organics Limited would face in the market of
Vietnam can be divided into two categories namely, international brands and local brands. The
main international competitors of the company in the food products segment are companies like
Nestle and Bellami. The main international competitors of The Organics Limited in the skincare
segment are global companies like Unilever and L’Oreal. The company would also face
competition from the local firms based in Vietnam both the food and skincare segments.

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C. Market segmentation:
The Organics Limited in order to establish itself very strongly in the Vietnamese organic
food and skincare products market right in the initial stage would have to adopt very strong
segmentation strategies. The following are the main segmentation strategies which TOL would
adopt to position itself strong in the Vietnamese market:
Demographic segmentation:
The Organics Limited would segment its consumer segments based on demographic
segmentation. The company would segment its products based on age and gender of the
consumers. For example, there would be a ranges of both food products and skincare products
which would target children specifically while others would target adult consumers. Again, as far
as skincare products are concerned, certain products like creams would target the female
consumers while the products like shower gels would target both the gender groups. The
company would segment its consumer base based on income which would refer to economic
segmentation. For example, certain skincare products and food products which TOL would
market would be of premium range and target upper class as well as upper-middle class
consumers. They would be high priced. Other products which the company would market would
be low priced and would be affordable to lower as well as lower-middle class customers. The
economic segmentation strategy of TOL would also cover the imported products as well. The
premium quality food products and skincare products imported from other markets would be
available at high prices. This appropriate segmentation of consumers on the basis of income and
consequent pricing of products would enable the company market its products to all the three
economic classes namely, lower class, middle class and upper consumers which would generate
high revenue.

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Psychographic segmentation:
The psychographic segmentation strategy of The Organics Limited would be based on the
lifestyle of the consumers and their frequency of consumption of organic products. As far as the
lifestyle of the consumers are concerned, the company would market certain products which
would target working professionals. For example, the company would market a range of protein
bars, cereal bars and shakes which would enable working people to consume these products
while at work. Similarly, the protein bars would target people who work out or are involved in
sports profession. Similarly, the skincare products like foundation would target female
consumers who are involved in outdoor work like site visits or have to spend a lot of time
travelling. Thus, the products which The Organics Limited would market would largely be
aligned to the lifestyle of the consumers.
D. Industry and market forecasts:
The organic products industry in Vietnam is experiencing growth owing to rising
demands for organic goods among the consumers. The current market size of the organic food
market in the country is estimated to be around VNĐ3.5 trillion. Around 80% food products
produced in the country is regarded as organic by the EU (Euromonitor.com, 2020). Operating in
the organic products industry requires immense capital investments, manpower, innovation and
technological strength which are generally possessed by the international companies. The local
firms in the country generally have limited resources which prevent them from carrying out large
scale innovations required to develop organic products. Moreover, the supplies of raw materials
like milk and coconut produced within Vietnam which go into manufacturing of organic
products are far below the demand for these products. That is why the organic products industry
in the country is largely dominated by Nestle capable of importing products from foreign