Pizza2go Case Study

Background:

 The Vietnamese pizza brand whose name is Pizza2Go was launched in 2005 with more than 50 retail stores over the country. After ten years running in fast-food sector, it has become one of the best business in both the market and making affluent people because of increasing more than 2500 per cent in shares. In 2016, the total revenue of this business has reached at 202 million VND. Due to the competition in recent years, Pizza2Go has met many complex problems which should be reviewed carefully and handled pointedly.    

Problems Analysis:

The weariness in the working area:

In the working area of Pizza2Go, both the behavior and the expression of workers have worsened and reached the warning level in management system. The benefits of fair wage and clean, supportive working environment for workers in the whole time are not followed up the standard of Labor Code of Vietnam. The two important questions which are made to look at are the reason why workers have suffered low wage, worked significantly hard in the extreme conditions, they are not only no work normally but also maintain this bad job in the depth fear and anxiety in most every day? And what has forced or pressed them for working to nearly death in the long time. To be clear about the first quest, according to Central Committee of the Vietnam Federation of Trade-Unions (2003), the unskilled workers are mostly the passive no-voice and do not use reasoning or intellectual abilities in their work. These workers usually do not require education and can be accepted by the majority of large individuals. Due to that fact, unskilled workers tend to earn lower than the average salaries when compared to other skilled workers (Flynn M, 2006). Unskilled workers often work in environments where they are exposed to unsafe conditions on a regular basis.

The conflict between branch and head office:

The following serious problem has happened from the percent profit split between branch and the head office in the few years recent. Ten years ago, the head office took royalty for each product instead of taking royalty from financial revenue report every month because it was the time fast food sector was not common or various so the ratio selling of Pizza2Go was viable successfully without many competitors. Hence, the large revenue for every month could pay for both royalty and many fees at each branch with no any troubles at that time. But in the dynamic modern life, this kind of business is just the same as thousands fast food store with different brand name so the royalty cannot work as well as the past. “199 of sample network of franchises (48 per cent) do not include a royalty rate in the retail contract.” (Muriel F, 2013). Others head office deny adding royalty so no reason for Pizza2Go not fixing their financial model system. Moreover, the price for each pizza has to be cheap because of the competitive fast food sector while many ongoing fees go up dramatically. The real profit for a pizza will be less than the past time because if franchisees increased the pizza price, they will lose in the market price with the same product. And with that less real profit in the long time, franchisees will be get in the situation that even though the branch sell amount of pizzas a day, they are still got loss because all revenue in month might not pay for running this branch perfectly. To illustrate, in the article, some of franchisees managers said that they even lost hundreds of millions of VND instead of profit. Furthermore, head office is thought so dictatorial with demands target of profits when using the legitimate power to running their business.

Solution:

Recommendation:

Conclusion:

Reference: 

Name _, 2003, Role Of The Vietnamese Working Class And Tasks Of The Trade-Unions At The Present Time, [online] Marxists.org, Available at: https://www.marxists.org/reference/archive/le-duan/works/1966/12/28.htm [Accessed 26 Oct. 2018].

O'Brien, P, 2014, Why Strong Employee/Employer Relationship is Important and How to Achieve This? Read more at https://www.business2community.com/strategy/strong-employeeemployer-relationship-important-achieve-0876781. [online] www.business2community.com. Available at: https://www.business2community.com/strategy/strong-employeeemployer-relationship-important-achieve-0876781#5vExhqUi9pYkwR16.97 [Accessed 9 May 2014].