Entrepreneur Interview s3210262 Group2 Revised

8/6/2019 Entrepreneur Interview s3210262 Group2 Revised

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ENTREPRENEUR INTERVIEW 2010

Dang_Binh_ P huong_Linh-s3210262 P age 1

TABLE OF CONTENTS

I. OVERVIEW ............................... ....................... ................................ ....................... .......................... 2

II. THE ENTREPRENEUR S BACKGROUND, MOTIVATIONS AND CHALLENGES IN GROWING THE

VENTURE ................................................................................................................................................. 2

III. VALUE PROPOSITION OF THE FIRM .......................... ................................ ...................... .............. 5

IV. SUCCESSFUL REASONS ............................ ............................. ...................... ................................ .. 6

V. LESSONS DERIVED AND RECOMMENDATIONS ....................... ................................ ...................... ..... 7

VI. REFERENCES ............................. ........................ ................................ ...................... ...................... 8

VII. APPENDICES ............................ ......................... ................................ ....................... ..................... 9





I. OVERVIEW Awareness improvement of the society about food safety among the chaos of food,

especially vegetable, poisoning cases happening almost everywhere from mid 90¶s; the gradualpopularization of supermarket as a reliable retail channel in distributing fresh and safe food andvegetable in the beginning of the 20th century; in addition with the underlying long-nurtureddream of a man who wanted to contribute his knowledge and his love for a healthy life havecreated the first company ever in Vietnam that applied hydroponic system in growing vegetablesand selling them- Vinh Phuc Company (Tan Viet & Thanh Nha, 2001). It has been providinggreen and clean leave-consuming vegetables for large supermarket chains in Ho Chi Minh Citylike Maxi Mart, Cong Quynh, Nhat Nam and Co. Op Mart for nearly ten years since its firstestablishment in 2000 as a family business.

From the short interview conducted with Mr. Nguyen Huu Dung- an agricultural engineer and also the current owner of the company, the process of shaping this business idea hasturned up clearly and will be discussed in detail in the next part. Coming up next will be theevaluation of the firm¶s value proposition, the analysis of successful reasons and the lessonderived.

II. THE ENTREPRENEUR¶S BACKGROUND, MOTIVATIONS ANDCHALLENGES IN GROWING THE VENTURE

Although having aced the entrance examination to Ho Chi Minh Cyclopedia Universityafter finished high school, he stopped to cross Vietnam border for the American dream just likemany others at that time did hoping for a brighter future. Unluckily, the voyage did not succeedand he had to come back entering university- this time was Agriculture 4 School (today knownas Nong Lam University).

Being one of the first-class honored graduators after successfully defended their graduation project on fungal micro in 1992. Just after the year of graduation, he hired a piece of 500m2 land in Hoc Mon and started growing vegetable and sold to normal market but the profitearned was just merely met daily need (Phuong Tinh, 2000). The future road seemed to bepaved for them when a French company agreed to sponsor the student group a fungal growingproject in East Africa for five years. However, when the group almost finished their researchafter 2 years, a coupe staged in the country had led the project to zero effort. But still our entrepreneur paid attention to quite new technology ± the hydroponic- and dreamed of the day





he can own his business applying that system- let say, around twenty years ago. Set aside thedreams, the team scattered and each one lived their own life since then.

Our entrepreneur had been doing lots of works for a living and also once run a small

garment workshop for a short time and went bankrupt. The current family economic conditionwas the first factor motivated him to do something to get out of the current crisis. Moreover,there was frustration in the society toward food poisoning for over a decade since mid 90¶s: 600cases of pesticide poisoning allegedly due to eating contaminated vegetables were reported in1993-1994 and it had come a deadly trend with increased cases of food poisoning which alsoled to 277 deaths in 2003- reported by Nguyen (Vien & Hoi, edited by Umegaki, Thiesmeyer &Watabe, 2009) that had become a warning to society¶s awareness of health and food safety,especially clean vegetable. From that fact, he felt an urge to bring his knowledge about

agriculture from school; his interest in hydroponic system since 1993- a method of growingvegetable by nutrition water (Phuong Tinh, 2002) and experiences from works to build up thecurrent vegetable sprout camp. This time, he took things slow to avoid prior failure with thegarment workshop. He had investigated other clean vegetable growers in the city to see howthey operate their business and figured out the reason for the disqualified products: it was notfrom the production but from the outsourced distribution process since the producers could notensure the vegetable¶s freshness when they reached consumers¶ hands. They failed for losingconsumers¶ trust. He also went observing in supermarket chains to understand buying pattern of

the consumers.

Starting with those information and knowledge, he began to write a business plan,completed it with a financial plan, a long-prepared research on applying and experiment thehydroponic technique plan with a passion of building up a business type that he could effectivelytake charge from start to end. He chose to follow the direct supply without middlemen methodand took supermarket chains as his customers since 90% of modern distribution outlets¶customers decided to shop for vegetables there for the safety of produce (Cadilhon, Moustier,

Giac Tam & Fearne, 2006).

The required initial capital was 15 million dong. Since he had carefully investigatedconsumers¶ behavior and quite confident about the growing demand of the market, hepresumed to borrow a hot loan (Phuong Tinh, 2002).





The company was named after his son- Vinh Phuc. Since the very first start, things werenot like a piece of cake. He used to ride his bicycle to small markets and supermarkets for selling Vinh Phuc vegetables every day. The current owner of Maxi Mart 3/2- Ms. Hong- finallyallowed him to hire a small up-stair stand in the store and he started the business officially. Tobegin, he brought his products- not yet been harvested- to the shop, so call it, to directly showthe consumers how the vegetables being planted and harvested. Finally, the consumers startedto accept his price at 1.5 times higher than market vegetables. The consumption graduallyincreased from 10kg to 50kg per day after six months since the products first being introducedon the market (Phuong Tinh, 2002). The business method also changed since thesupermarkets started to offer selling his products and receiving discounts. Real challengesbegan.

Larger demand grew along with many other requirements to fulfill: more land, moreemployees and improved technology to increase the productivity. He hired workers, taught themthe nurturing and harvesting technique, including a motorbike delivery team in charge of distributing vegetables to supermarkets every day before 6AM to avoid traffic congestion in theearly morning. However, land is still a real tough challenge. Since the business¶ nature isagriculture industry, the rate of return was not as high and profitable as manufacturing industryin many people¶s perception. Therefore, borrowing land has become a matter. Including 500 m2 he already contracted, he has been able to use just around 1000m 2 for cultivation, contracted

annually until now (Thanh Dy, 2002). To handle the supply for larger demand with just a humbleland area, he first continued to research to find the appropriate nutrition amount for plantingdifferent kinds of leave-consuming vegetables and improve the technology for shortening thereproductive cycle (now, sprouts have weekly reproductive cycle and that of rau muong (water spinach) is 15 days). However, the demand was too high for the firm and it had to regretlyrefuse some beneficial contracts with Metro Cash & Carry, Masan mart and an import-exportunit (Thanh Dy, 2002).

The firm currently provides only leave-consuming vegetables with the core product iswater spinach. Mr. Dung is aiming to expand into tuber-consuming vegetables in the futurethrough a series of researches he is experimenting and also to upgrade the current technologyin growing current products, as he stated, to both producing the products more effectively bysalvaging the materials to save costs and maintaining the stable price level. But at last, land isstill the most concern.





III. VALUE PROPOSITION OF THE FIRM Gradually, the reputation of the firm has been upgraded to a new level: reporters from

many newspapers (Nguoi Tieu Dung Newspaper, Tuoi Tre Newspaper and Sai Gon Tiep ThiNewspaper) (Appendix 2- Attached newspapers) sought to study about the firm; it wasbroadcast on television (VTV3) and the facilities it possesses were also approved by the Ho ChiMinh Plant Protection Branch. That has contributed to the upgraded living standard of a majorityof vegetables market in Ho Chi Minh City. Hence, people start to know and confidently use itsproducts. The market itself has been expanding from premium income housewives group tolower income housewives group in Ho Chi Minh City along with better economic condition andimproved living standard.

The firm has also gained customers¶ trust and loyalty by focus on the important of the

product characteristics to attract final consumers¶ attention since it was opened to meet theurgent need of safe and clean vegetables.

He said, at first, the consumers usually observed carefully before they picked onevegetable bundle but now they choose Vinh Phuc products as a habit (changed from limiteddecision making to habitual decision making process- Quester, Neal, Pettigrew, Grimmer, Davis& Hawkins, 2007) and that makes the owner feel happy.

They also willingly pay higher price (about 30% to 40% higher) for fresher, safer Vinh

Phuc¶s vegetables (Figure 1).

Figure 1: Value Proposition Model ( Adapted from Phillip, K 1994, Marketing management : analysis,

planning, implementation, and control ).





IV. SUCCESSFUL REASONS Unlike the rivals, Vinh Phuc Co. has shown that they dare take responsibility toward

their products by being the first business in vegetable industry to paste company¶s name,address and contacts in the packages; also, the self- delivery system helps ensure products¶quality and maintain good name for the firm.

Moreover, although hydroponic system had been successfully researched, developedand widely used in many developed countries for a long time; it had been completed in manyUniversities and Research Centers in Vietnam twenty years ago, and the AVRDC (AsianVegetable Research and Development Center) had passed the technology, it had not yet beenapplied on a large scale (Tan Viet & Thanh Nha, 2001). Being the first to apply the technology,Vinh Phuc Company has gained the very first attention of the market it targets.

The excellent factor was the µvisibility ¶ of the service to the consumers while there wasdoubt in the market of vegetables growing process with pesticide overuse. According to Dao,2002, the pesticides used per hectare on vegetables was 5.52kg- the highest among other cashcrops (Duc Vien & Van Hoi, edited by Umegaki, Thiesmeyer & Watabe, 2009).

The owner also directly takes charge the business¶s whole value-chain: from the inboundto service of primary activities (buying seeds, growing vegetables, packaging, delivering ,marketing and selling to customers service); enhancing the technology improvement of

supportive actitiies as well (Figure 2).

Figure 2: The Generic Value Chain (Adapted from Porter, M 1998,Competitiv e Ad vantag e:

Creating and Sustaining Super i or Performanc e).

The decisive element was his ability to see and catch the right opportunity throughobserving and appropriate concern and awareness about the society. He knew when he had tobe quick and decisive and he had done it right.





V. LESSONS DERIVED AND RECOMMENDATIONS The interview was a valuable experience. To be successful, one should not be afraid of

making mistakes and take them as failures but rather consider them as learning opportunities.The circumstances¶ discouragement: sponsored project¶s broke and garment workshop¶s failurewere just obstacles that he had come over to this victory by leering them.

His excellent patience was the most impressive: he has been waiting and preparing for almost ten years to achieve his dream. Despite many ups and downs in time, that desire justgrew stronger.

The passion to learn is necessary, he has learnt to be a scientist, a business man anda role model to the employees, colleagues and his children. Until now, at the age of over fifty, toenrich the knowledge, he still takes time studying English in order to read reference books inEnglish while the majority at his age engaging in doing business and parenting alone.

To come up with one simplified sentence that holds the whole story ± a µspecial pocketexperienceµ: ³Luck will come sooner or later after a really good preparation´. Last but not least of the good thing, the entrepreneur is the one that takes responsibility for one¶s own dream andthe process of making it come true.

Besides, there is one dangerous point need to be seriously considered: the sprout campwas in the temporary competitive stage at first for the valuable products it offered and the newtechnology it used . However, the availability of this method has been spreading, many other enterprises and industrial establishments has tested and applied it throughout the nation. Thathas resulted in the loose to its current µcompetitive parity¶ stage (Figure 3). Registering for technology patent or exclusive distribution right might help but only after land matter beingsolved which ( is currently out of his control) could be lossen by creating better relationship withthe Community People's responsibles since Vietnam market, like many other relationship-oriented markets such as China or Spain, depends heavily on people's connection and benificial





mutual relationship.

Figure 3: Criteria for Sustainable Competitive Advantage and Strategic Implications (Adapted from Gilbert, D &Tan, C 2009, BU SM4052 Appli ed E nt repreneur shi p).

VI. REFERENCES - Cadilhon, J, Moustier, P, Poole, Giac Tam, T & Fearne, A 2006, µTraditional vs. Modern

Food System? Insights from Vegetable Supply Chains to Ho Chi Minh City (Vietnam)¶,D ev el opment Policy Revi ew, 2006, vol. 24, no. 1, pp. 31-49.

- Gilbert, D & Tan, C 2009,BUS M4052 Applied Entrepreneurship, McGraw Hill, Australia. - Philip, K. 1994, Marketing management : analysis, planning, implementation, and control , 8 th

edn, Prentice Hall, U.S.A.- Ph ng T nh 2002, µNg i tiên phong trong công ngh th y canh¶, T u i T r New s pa per,

24 January, Kh i s doanh nghi p.- Porter, M 1998, Competitiv e Ad vantag e: Creating and Sustaining Super i or Performanc e,

Free Press, New York, America.- Quester, P, Neal, C, Pettigrew, S, Grimmer, M, Davis, T & Hawkins, D 2007,Consumer

B ehavi our Implicati ons For M arketing St r at egy , 5th edn, McGraw Hill, Australia.- Tan Viet & Thanh Nha 2001, µRAU S CH tr ng b ng ph ng pháp th y canh¶, N g i

tiêu dùng New s pa per, 9 August, p. 10, Tiêu dùng muôn m t.- Thanh Dy 2002, µRau an toàn: không bán!¶, Sài GònT i p T h New s pa pe, 25 April, p.

20, S Tay.- Umegaki, M, Thiesmeyer, L & Watabe, A 2009,Human insec ur ity in E ast Asia, United

Nation University Press, Tokyo, Japan.







. As a youth, have you ever done entrepreneurial works?

When we were at university, we had completed a school project of applying microorganismtechnology on growing vegetables. I did not know whether it was entrepreneurial thing.

. When did you know you want to start a business? How?

10 years ago but I had dreamt of it since I just graduated from the uni. At that time, foodpoisoning happened a lot. A large quantity of pesticide was imported to Vietnam and thefarmers just used them recklessly. I knew the society was just vulnerable and so was I, thatworrisome thing made me think a lot: how could I do differently with normal farmers; how could Iuse my knowledge to do something. That was when I decided to take risk thanks to my familywarm¶s support since it was not so long after my garment workshop business failed; I decide to

borrow money and started.

Entrepreneur At The Time He/She Started The Venture

. What were the factors that led him/her to start the venture?

- 3 main factors:- economic- the most critical one; the concern about healthy life with somuch dangerous food poisoning cases around and my family¶s encouragement.

. Did you seek to establish a µlifestyle´ business, a ³fast growth´ business, or what? Did

their growth orientation change over time?

I think this is a lifestyle business. It helps fulfill a society awareness of a healthier life, it meetsthe demand of green and clean vegetable consumption and it really does.

. What sort of resources (not just financial) did you have when they started the venture?

What resources did you not have and wished they had it? What source of network did

you have? Were there any especially creative things you did to come up with the needed

resources?

A happy family was the main resource for me since they have encouraged me to continue myresearch and business idea whenever I was down. You know, any kind of technologyexperiments takes time and costs money. Without them I might be quit this job under muchpressure.

. Did you write the business plan?





Of course yes. I¶m a cautious person. Carefully preparing things before doing is part of mypersonality. I wrote project business plan, financial plan and a plan of hydroponic technologyapplication and improvement.

. How did you research the market before starting the venture?

Before starting this business, I went through a lot of researches: I saw how other sprout campswere doing, why they were not so successful, what were their main difficulties and I found outthat most of them were fail just because they could not distribute their products directly toconsumers but outsourced the distribution. Although the products they made were really in goodquality, but they were not any more when they reach the final consumers.

Besides, I went to the market so many times to observe how the housewives choosing and

buying vegetables, understand their concern and buying behavior helped me a lot.

. Did you feel prepared to start the venture at the time he/she started it?

Everything I could, my knowledge, my experiences and the plans.

. How long was a typical work day and work week when you first started the venture?

This I could not tell because it has been much fluctuated. When I do research and experiment,time was very constraint, I have spent most of the day experimenting.

Entrepreneur As He/She Grow The Venture

. How have your goals and values changed since starting the venture?

They have been improved a lot. Since people start noticing and the business has to satisfylarger demand, I have to find a way to increase the produced quantity and reduce theunnecessary costs while still keep our products at stable and improved quality. That is when Ido more experiments, more research both about technology and ways to run the business moreeffectively.

. Did the typical work week change as the venture grew? (In terms of how much time the

venture required and in terms of how the entrepreneur allocated his/her time)?

This I cannot tell with the same reason. Usually, the typical work day begins at 3 AM when our harvesters collect the sprouts, pack them and by 5AM we deliver to supermarkets by motorbike





groups for fast and easy transport (We do not use trucks since the city often gets crowded verysoon, the trucks might get stuck and we cannot deliver our sprouts on time and ensure thefreshness.) Then I come home, whether do paper works, receive orders through phones, doresearch and at times I do experiments to reduce time and improve the technology we appliedin production. Usually we only have 5 days off a year when Lunar New Year comes officially.However, our family members still work during Tet holiday taking care of the sprouts sincegrowing sprouts like this is a closed process requires us to work continuously on a daily basis.

. Did you make assumptions when you first started out that subsequently proved to be

wrong? What sorts of insights were gained?

I sure did. I once thought that I would have receive many support for this idea since it benefitsthe society and meet current demand of clean and green vegetables. It has turned out totallywrong, I did not receive any support from the outsiders, and no one seemed interested in theplan. I have made any effort for borrowing land but no one helped. Till today, even when peopleare aware of our sprouts and we have made our name in newspaper (The Consumers, TheYouth and The Saigon Giai Phong) and television (VTV 3), the land borrowing process is still amisery.

. What key mistakes did you make along the way? What were some of the key lessons

learned?

I usually planned everything in advance; there are sure mistakes but not any kind of serious. Iassumed to be helped by others with the business idea and I realized that I cannot rely onanyone but myself. Your plan, your dream is your responsibility.

ENTREPRENEUR TODAY AND TOMORROW

. What would you do differently if you had it all to do over again?

I think no. I will still go the same way as I did.

. What key personal characteristics do you see in yourself that were especially critical for

achieving success with this particular venture?

The patience comes first and after that the eagerness to learn new things. I always try to learnas much as possible in order to find new way of doing things and learn to be creative.





. What kind of leader do you think you are?

Care for others, especially the youth. I appreciate anyone who has the will to learn and is notafraid of making mistakes.

. What are your plans for the future in terms of the venture?

I am working on how to apply current system to grow tuber-consuming vegetables in aproductive and efficient way. I also experiment to lessen the reproductive cycle of currentproducts in order to deal with lack of land problem.

. What advice do you have for a student interested in starting a venture today?

I have a lot to advice a young student in that but in brief I just want to say:

- First, be patient.- Second, try to choose a career that related to what you have been taught in the

university since many youth today have been wasting their time studying things that theyare not going to apply.

- Finally, be creative. Learn as much as you can. VALUE PROPOSITION

Product/ Service

. What products and/or services are provided? What are the major features?

Currently we provide leave-consuming vegetables, the core one is water spinach. We apply thehydroponic system which uses nutrition water instead of land with fertilizer and pesticide toensure the safety of the products and also save the water used ± we can save up to 1/3 water volume compare with traditional land growing crops- and selling vegetables by this method canhave quicker rate of return since they possess short reproductive cycle. Also, the vegetables areplanted in green house that help avoiding insects and dust from the wind and lessen the harm

form ultraviolet rays of the sun.

. How is the product/service produced and delivered?

Our products reach the final consumes- the housewives in Ho Chi Minh City with average topremium income through supermarket retail channel. We have our own delivery team, using





motorbikes to collect and deliver vegetables to supermarket in the very early morning, usuallyby 6AM.

2. ATTACHED NEWSPAPERS ( 3 pages)

3. CEO STATEMENT (1 page)

Documents

Entrepreneur Interview s3210262 Group2 Revised