mgt group assignment group 3 mixue bingcheng company

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<b>INTRODUCTION TO MANAGEMENT</b>

Group Assignment

<b>Page</b>

<b>1. Introduction</b>

<b>a. Background and history ………4b. Mission, Vision and Core Value ………6</b>

<b>2. Analysis of the main factors in the management of company</b>

<b>a. Planning ………6i. Analysis of the general environment of the company ………7</b>

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<b>ii. Analysis using BCG matrix & explain ………..9</b>

<b>b. Organizing ………10</b>

<b>i. The company’s organizational structure ………10</b>

<b>ii. Company’s organizational culture ………12</b>

iii. How do the organizational structure and culture influence thecompany’s human resource management and its approach to<b>innovation and change? ………12</b>

<b>c. Leading & Controlling ……….15</b>

i. How does the Mixue Bingcheng company's leadership use differenttypes of power? Can a leader be considered an effective or "good"<b>leader? ………15</b>

ii. The Mixue Bingcheng company’s leadership and how does theleader of the company use different types of power to influence the<b>employees and achieve organizational goals? ………..16</b>

<b>3. Conclusion ………20</b>

<b>List of references ………21</b>

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ABOUT MIXUE BINGCHENG

The milk tea industry in China is getting very popular now. Mixue Ice Cream &Tea is one of the most well-known milk tea brands in China. This report willfocus on analyzing the Mixue Ice Cream & Tea. The contents will include thecompany background and history, statement of mission, vision, and corevalues; as well as analyze the key factors in the company’s managementthrough its planning, product/service portfolio, and a deeper look into thecompany’s organizational structure, its leadership, and conclusion about thecompany overall management issues.

Mixue Bingcheng, founded in 1997 by brothers Zhang Hongchao and ZhangHongfu from rural Henan province, is a shop selling ice cream, drinks, andfast food. Since then, the brand has grown into the largest and perhaps mostprofitable ice cream and bubble tea empire in China, with over 20,000 stores,located mostly in second-tier provinces/cities, suburbs, and studentquarters. Low cost, good product quality, and innovative franchise policy arethe most notable factors in Mixue's core strategy.

Through the PEST model, it can be deduced that the general environment ofMixue and the entire milk tea & ice cream market in the world is developingat a relatively fast rate and certainly won’t stop anytime soon, which makesfor a promising future company's main products line. With the BCG model,we can also see that Mixue has one of the most decisive advantagescompared to its adversary, which is cheap product pricing compared to itsrelatively good quality. Therefore the company should definitely focus oncapitalizing on its advantage even more with the use of new technology andthe humans behind it.

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Mixue Bingcheng's corporate culture and organizational structure play animportant role in shaping human resource management policies andpractices. Being mostly a franchise brand, the company definitely has itsvarious unique and flexible elements when it comes to managing andleading, particularly when it comes down to individual store infrastructure.Mixue's franchise model is quite special as a combination of framework andfreedom. To join a franchise, the following requirements must be met. Thefirst is to adopt the business philosophy, and corporate culture and ensurecompliance with business rules. Investors are also required to participate inthe operation of the store for at least 90 hours/per month. In addition, it isalso necessary to attend Mixue's management training classes. If the aboveconditions apply, the franchise store can be opened after half a month.Second, Mixue does not participate in profit sharing. The entire operation ofthe store is completely under the management of the owner. Franchisees areresponsible for their own profits and losses.

With such a franchise model, Mixue's main revenue comes from thecompany acting like a logistics company even more than a brand known forits cheap but exciting product. In 2021, Mixue Ice Cream & Tea achieved salesof 10.35 billion yuan, in which the franchise management fee is only about2% of the total profit, just to show how successful this business model canbe.

<b>1. Introduction</b>

<b>a. Company Background and History:</b>

In 1997, founder Zhang Hongchao was a fourth-year college student,and that summer he worked part-time at a cold drink store, specializing in making

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shaved ice. In the course of his part-time job, he discovered business opportunitiesand had the idea of starting his own business.

When Zhang Hongchao’s grandmother learned of this, she took outher life savings of 4,000 RMB (About $483 in that year) to support her grandson’sbusiness. So after he graduated from college, he returned to Zhengzhou and founda city village, set up a stall to start selling shaved ice. This store named “cold streamshaved ice” is the predecessor of Mixue Bingcheng, Zhang Hongchao’s

entrepreneurial journey began.

Because of the limited start-up capital, the store’s equipment is alsoextremely simple, with only a freezer, a few benches, and folding tables. Even theshaved ice machine for producing shaved ice is assembled by Zhang Hongchao withbought motors, turntables, and cutters. The store’s main products are also verysimple, mainly shaved ice, ice cream, and smoothies. After business graduallybecame better, he began to sell milk tea in the store.

With this business, Zhang Hongchao can earn more than 100 RMB aday, but he gradually found a problem: the shaved ice business will be affected bythe season, business is hot in summer, but in winter it will become a gap. In orderto make ends meet, he had to find a sales job in the gap, but this first storeeventually closed down.

Zhang Hongchao was not discouraged, after 1 year he opened asecond store and changed the store‘s name to Mixue Bingcheng. The name inChinese means “An ice castle built with sweet snow”.

After this, Zhang Hongchao also opened Chinese and Westernrestaurants, and home-cooking restaurants in partnership with others, but forvarious reasons, most of them failed to operate. This history is now drawn as acomic strip and placed on the official website of Mixue Bingcheng.

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By 2000, Mixue had opened up stores and also sold sundaes at a much cheaperprice than the market average.

They explored the franchise model in 2007 and built their own factoryin 2012. In 2014, Mixue took it a step further and took a step to open its ownwarehouse and logistics center. In 2018, Mixue set up its first store outside China,in Hanoi, Vietnam, and quickly expanded into other Southeast Asian countries.

Currently, they have more than 20,000 stores in China and more than1,000 stores in Southeast Asia – and are still expanding.

<b>b. Mission, Vision, and Core Values:</b>

<b>Corporate Mission: A corporate mission statement contains the goals and</b>

visions that a company has set for itself and that it strives to achieve. Itdefines values that the company identifies with and which serve as guidelinesfor customer relations: Strengthen our brand. Enriching our partners.Bringing high-quality and affordable products to everyone around the world.Visions arise from the ambition to create a unique product or innovativeservice. Ultimately, it is these visions that help companies to create theirentrepreneurial mission statement and unique corporate identity, with whichthey position themselves in the market and differentiate themselves fromtheir competitors.

<b>Corporate Vision: Concise and dedicated, we strive to be a respectable</b>

business thriving for over 100 years.

<b>Core values: Providing authentic products with genuineness and devotion.</b>

No shortcuts. No deceiving

<b>2. Analysis of the main factors in the management of company</b>

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The draft consultation on the milk tea industry is a major benefit, simplysimplifying documents for food business licenses and compressing thetimeframe for processing food business licenses. In particular, the licensingdepartment makes the time limit for administrative licensing decisionscompressed to 10 working days; The food licensing department limits thecompression period to 5 working days. This will accelerate the rapiddevelopment of the whole market while reducing the burden on businesses,a better business environment. Nanjing City's Xuanwu District FoodDepartment Chief Luo Yaling explained that "food business projects werepreviously divided into several categories, but we found that in practice lawenforcement did not make much sense, there were some instead of addingtrouble to the operator." This also shows that changes for the milk tea

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industry as a whole are very likely beneficial, but also for the convenience ofthe entire market.

<b>● Economics</b>

Milk tea belongs to mass consumption. Among all customers, teens after 80and after 90 are the main ones, and they account for 87% of the milk teamarket. Sixty-four percent of people buy milk tea between $15-24, a pricethat is not a big burden for teenagers and lies in their psychological stamina.This price is not too high and also makes milk tea an affordable drink, whichalso promotes the development of the dairy farm industry.

Until 2019, the number of milk tea shops has greatly increased in big cities,and third-tier cities even grew by 138%, which shows the rapid developmentof the milk tea industry, and also boosts the economy of the entire dietindustry.

<b>● Society</b>

According to research by CITIC Securities, nearly 60% of milk tea shopcustomers will be women by 2020. This directly affects the marketingstrategy of most bubble tea shops and how they communicate with theircustomers. For example, Hey Tea focuses on attracting female customers bymixing drinks in different colors to attract customers and incite them to buyand photograph products. This has allowed HayTea to receive more heat andratings in 2019 than any other peer (Figure 5). CoCo milk tea ranked fourthand Alittle Tea's drinks ranked fifth were significantly more unobtrusive thanHey Tea's drinks.

<b>● Technology</b>

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Ten years ago, most milk teas were brewed with milk tea powder, so the onlyequipment needed to make milk tea was a water heater and sealingmachine, and only a handful of stores could have ice machines. Today, milktea shops basically eliminate the preparation powder and choose to brewfresh tea, and the equipment is more complex because of the improvementin technology.

Today, a milk tea shop can have more than ten machines, including asteam-type water boiler that can effectively control the temperature of thebeverage, a smoothie machine, a juice extractor, a water purificationprocessor, etc. Even some machines that replace manual labor includefructose dispensers and fruit cutters. All of this effectively reduces the needfor staff in the store.

<b>ii. Analysis using BCG matrix & explain:</b>

As for product and price, most Mixue Cream & Tea products pursuehigher cost performance and are located somewhere between SBU Star andCash cow. The products of Mixue Ice cream & Tea are mainly divided into icecream and beverages. The company offers quite a few ice creams and teaformulas with good quality to approach premium quality levels whilemanaging to keep prices low. The price of ice cream is 3 yuan to 10 yuan, ofwhich 3 yuan ice cream is the main product of the brand, which has thehighest sales. In addition, the price of fresh fruit tea and milk tea is also 4-15yuan, which fully demonstrates the cheap marketing concept of Mixue Icecream & Tea.

In 2021, Mixue Ice Cream & Tea achieved sales of 10.35 billion yuan. Inparticular, the sale of solid syrup drinks, jams, tea and other ingredients tofranchise partners reached 7.23 billion yuan, accounting for 70%. Sales ofpackaging to franchisors reached 1.78 billion yuan, accounting for 17%. Sales

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of equipment and operating supplies reached 1.05 billion yuan, accountingfor about 10%. The franchise administration fee is only about 2%.

With the current success, Mixue Bingcheng should continue to investheavily in R&D, and hire and train professional R&D teams to provide evenbetter products in the future. Moreover, the company can also optimize andgrow its logistics further as one of the key components of Mixue's

achievement as a B2B franchise brand. With the current pace oftechnological development (the Fourth Industrial Revolution), it is alsoimportant to incorporate many new high-tech elements to ensure thesuccess of the company in the future.

<b>b. Organizing:</b>

<b>i. The company’s organizational structure:</b>

Organizational structure provides the necessary foundation within which anorganization functions. Organizational structure exists as a social tool in thatthey match human actions in a social system

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<b>● Chief Executive Officer: The CEO is always the highest-ranking</b>

executive manager in an organization and has responsibility for theoverall success of the organization, and is the ultimate decision-makerfor a business. While the daily tasks of each chief executive vary, it isthe overall vision of the position that provides the framework for thefunctionality of all departments.

<b>● Group Executive Officer Discusses: important matters relating to the</b>

business execution.

Because of being a franchise company, factors that could influenceMixue Bingcheng structure can be described with two dimensions,organizational and environmental as internal and externalrespectively. These two dimensions influence organizationalinnovation that focus on programs, processes, practices, and systemsrelated to the strategic management process of the organization. Thestrategic management process maintains that the organization shouldanalyze the external environment for threats and opportunities andscan their capability for strengths and weaknesses. Therefore, MixueBingcheng’s strategy drives from different perspectives reflectinginternal and external factors in the organization.

Adopting innovation by Mixue Bingcheng is an essential mechanismfor reconciling the organization and its environment to achieve thestrategic aim. Thus, to understand the environment and organizationthat influence innovation is important to understand the

organizational structure.

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<b>ii. Company’s organizational culture:</b>

Corporate culture refers to the values, beliefs, and behaviors that determinehow a company's employees and management interact, perform, and handlebusiness transactions. Often, corporate culture is implied, not expresslydefined, and develops organically over time from the cumulative traits of thepeople that the company hires.

A company's culture will be reflected in its dress code, business hours, officesetup, employee benefits, turnover, hiring decisions, treatment of employeesand clients, client satisfaction, and every other aspect of operations

<b>iii. How do the organizational structure and culture influence thecompany’s human resource management and its approach toinnovation and change?</b>

Without specific information about the Mixue Bingcheng company'sorganizational structure and culture, it is difficult to provide a detailedanswer. However, in general, the company's organizational structure andculture can influence human resource management and its approach toinnovation and change.

● How do the organizational structure and culture influence thecompany’s human resource management?

The organizational structure and culture of Mixue Bingcheng company canhave a significant impact on human resource management practices. Theorganizational structure defines how the company is organized, including thehierarchy of authority and the allocation of responsibilities. The culture of a

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