Sử dụng mô hình Five Forces của M.Porter, để phân tích sức hấp dẫn nghành tiêu thụ cà phê, cụ thể là đối với các mô hình quán cà phê hiện đại như Starbuck, The Coffee House, Urban Station,... Bài được nhìn nhận dưới góc độ chủ quan của tác giả Người thực hiện: Chí.NĐ - FPT University Student

1. STUDENT: NGUYỄN ĐĂNG CHÍ | ID: SB60664
CLASS: SB0864 | FPT UNIVERSITY
LECTURE: NGUYỄN QUỐC CƯỜNG
Using Porter’s Five Forces Model to
analysis coffee shop industry in Vietnam
(Focus on the urban market)

2. 1 | P a g e
I. Overview of Vietnam’s coffee shop industry
Vietnam's coffee consumption is expected to grow industry in the coming years as the population Continues to
expand. Their incomes have increased over time, they have become to care about health, wanted to meet partner,
friend and relatives, entertain, relax and express themselves more. Coffee consumption is increasing, besides
coffee tastes of Vietnam is different from others. Moreover, the rural’s demand is also different in quantity and
quality from urban’s.
Besides, Vietnam is a producer and exporter of the world's leading coffee, has large quantity of suppliers but
quality supplier is limited, the production process is not standardized. Realizing the potential of Vietnam market,
the international coffee brands have appeared more and more in recent years, along with the available and new
brand of Vietnam that make Vietnam coffee shop market become more bustle.
II. Porter’s Five Forces
To assess Vietnam's coffee shop industry a competitive industry or not, we use Porter's Five Forces
2.1 Threat of new entrants
The biggest obstacles of this attractive market are branding and the cost of premises, marketing
& branding and materials. Brand plays a big role in the selection of customers. Starbuck is a
giant one in the industry. At the first day openning in Ho Chi Minh City, consumers have to
queue to buy a cup of coffee that shows the strength of the brand. Cost of renting in Vietnam has
always been difficult problem for each business, especially big business, they always find the
most expensive location which is also convenient and populous place, cost for it accounts to

3. 2 | P a g e
about from 30 % to 50% of total revenue, typically 2 brands which have the good premises are
Starbuck and Highland Coffee. Other major expenses may include the marketing & branding.
The brands have spent about 20-30% for marketing and branding to attract customers. Raw
materials is also an important factor with the big brands, they often choose famous coffee-
growing region famous such as Buon Me Thuat, Da Lat, Gia Lai, so on and make it with
standardize process like Nestle, Starbuck. For small and medium brands are difficult to emphasis
on it because of cost, they buy from partners or purchasing raw coffee that meets their demand
and requirement, to reduce costs. Cost of labor, raw coffee materials are the advantages of
Vietnam market, usually in the form of brand hired part-time to reduce costs. In particular,
customers in this sector in Vietnam is quite loyal to the favorite brand, however they are also
price sensitives, specially the young, but also the story Starbuck after 5 days of buzz openning,
number of customers also dropped significantly.The big businesses usually focus on the other
products, not coffee, shop space, service quality, the number of shops. It is difficult for customer
to find the difference between a cup of Epresso of coffee’s brand A and B.
In terms of legislation, the Vietnamese brand is easier to penetrate the market, policies and
regulations on foreign direct investment is in the process of finalizing and looser.
Thus, the ability of entrance of new brand is medium to high (3/5).
2.2 Bargaining power of customers
Table 1. Vietnam is a potential big coffee consumption market because amount of the consumption is
smaller than others.
Vietnam’population is large and increasing over time. According to the General Statistics Office,
Vietnam's population reached 90.7 million people in 2014, ranked 3rd in Southeast Asia and 13th in the
world, including 15-64 age group accounted for 70 percent. Coffee consumption market reached 287.34

4. 3 | P a g e
million USD Vietnam in 2012. Mintel predicts this figure will reach 573.74 million in 2016 which made
Vietnam become be top 5 of coffee consumption in Asia- Pacific.
According to VHLSS 2002, a Vietnamese consumed about 1.25 kg coffee per year. The domestic
consumption also had differences between urban and rural areas in both volume and value. In urban
areas’s consumption per person was 2.4 kg that was higher 2.72 times than rural ‘s (0.89 kg).
The brands locate mainly in the big cities such as Ho Chi Minh, Ha Noi, Da Nang and some travel cities
with the number and density of fairly dense. Besides, there are a lot of the small coffee shops every
street and corner. Customers have too much choices. However, in the countryside, customer do not
usually have choices because of limitation of number of coffee shop.
One more problem, Vietnamese is quiet price sensitive. They can buy a coffee of Passio, ignore one of
Urban if Passio has a promotion. However, a part of customer has a strong loyalty, they have good
income and have own hobbies and tastes, so they usually become a loyal member of a or some certain
brand. They usually choose the coffee shop which they love. In rural, level of price sensitive is high
because low income. However, there are a lot of alternative products such as tea, instant coffee, making
coffee themselves, so on.
Thus it can be concluded that customers in the bargain of customer in the city is high (4/5)
2.3 Bargaining power of supplier
Vietnam is the world’s second largest coffee producer and exporter. Key provinces plant coffee bean
are Daklak, Lam Đong, Gia Lai, Kom Tum, Dak Nong, Binh Phuoc, Dong Nai, Ba Ria - Vung Tau, Son
La, Quang Tri, Dien Bien. Most coffee bean growers in Vietnam are small private farmers, which
provide 95% of the total production. Around 85% of those farms own less than 1 hectare. Only 1% of
farms have more than 5 hectares. After the coffee is harvested, farmers will sell their crop directly to
collectors, who will re-sell to larger coffee processors. The relationship and mutual trust between the
growers and the collectors determine how the buying process will go. Usually, collectors will select the
coffee beans according to their own criteria, such as smell, moisture level, and appearance. The
collectors may process the beans by drying and grading them, to ensure the moisture content and size of
the coffees beans are better suited to the standard. Vietnam currently has about 150 registered coffee
processors and exporters. They consist of thousands of small local businesses, as well as join ventures
with international companies. (Ipsos Business consulting 2014)
Although Vietnam has a lot of suppliers, having a good supplier is difficult. They must have adapt
enough brand’s standards including areas, quality, quantity, using fertilizers and pesticides
requirements, so on if big brands have signed the contract with them such as Nestle and Starbuck. If the
brand pay enough price for supplier, they can break the contract easily. If brand do not have the raw
materials, the cost increases that is big problem with new brand, special small brand. As a result,
bargaining power of supplier is medium to high (3/5).

5. 4 | P a g e
2.4 Threat of substitutes
There are a lot of business models of coffee as substitutes and there are a lot of products to alternate
coffee.
Coffee shop is only one of business model of coffee. Some new coffee business models are coffee and animals,
coffee garden (Du Mien Garden, Country House, Thuy Truc, S Coffee, Tram Coffee, Tee Coffee, Love Garden,
Them Xua Coffee, Soi Da Coffee, The Myth, Legend Coffee, Dang Xua, Oasis,…), coffee & book ( Ciao Book
Café, FYI Book Cafe Hub Book Cafe, Slowee Coffee & Books, Chieu Book Café, 1 Monologues,…), cofffee &
working, coffee & hobby (music, learning), so on. They are strong rival because they target on the nich segment.
Some coffee models are very successful like Du Mien and Country House. They have good view and a lot of
product to choose. However, in Ha Noi, people like sit down a small coffee shop to enjoy in a certain time, not all
day like Ho Chi Minh City.
Indirect substitutes are new modern space such as modern supermarket (AEON mart, Sai Gon Co.opmart, Emart,
Vincom,… ), fast food store (Texas Chicken, KFC, Pizza Hut, Lotteria, Hot & Cold,…), so on.
Alternative products are tea, fruit juice, buble, bottle water, soda, energy drink, so on everywhere. In the
modern society, people select fresh and heathy products. Some people do not like coffee because of
caffein and lack of sleep. In the evening, a lot of people go to there to eat and drink, buy or even watch
film. Besides, consumer can buy available roasted coffee in supermarket, small shops, so on, they can
serve themselves.
However, Vietnam usually have hobbies to drink coffee, they usually select coffee shop to drink more
than finding other place. As a result, coffee shop usually have a certain loyal customer.
Threat of substitutes in big city is medium to high (3/5).

6. 5 | P a g e
2.5 Rivalry among existing competitors
Table 2. Statistics some information about poppular coffee brand in Vietnam
Along with the brand fast food row penetrate the Vietnam market, the major brands in the industry
coffee drinks also goes to Vietnam as Starbucks, Gloria Jean's Coffee, Dunkin 'Donut's, Coffee Bean &
Tea Leaf, inside next to the major brands of Vietnam's Central Highlands, Highland Coffee, the coffee
chain emerging as Passio, Urban Station, Phuc Long, The Coffee House, Cong Coffee, The Kafe,
Milano cheap coffee chain.
As you can see that each brand has a competitives and develop over time. Some brand is new, just
founded years ago. It means that new brand can access this market if having a right strategy.
Rivalry among existing competitors is high to very high (4/5)
III. Conclusion and recommendation
From Brand Founded
Branches
( HCM: Ho Chi Minh city
HN: Ha Noi)
Price of basic
coffee
(thousand VND)
Differentation
Marketing
Expense
Foreign Starbuck 2013
15
(11 HCM- 04 HN)
70-80
Good initial positioning for the
successful and high class people, high
customer service and quality of
goods
High
Gloria Jean's
Coffee
2006 6 55-80
Where customer worth experiencing
for young people, foreigner and
traveler, good brand
High
Coffee Bean &
Tea Leaf
2009
15
(13 HCM - 2 HN)
45-60
Take-away and has its own favor
coffee & tea
High
Dunkin' Donut's 2013
15
(10 HCM - 5 HN)
40-60 Coffee and donut High
Vietnam Trung Nguyen 1996 1259 50-60
Coffee for the connoisseurs, good
quality and distribution
High
Highland Coffee 2002
98
(45 HCM - 30 HN...)
45-60 Coffee for active businessman High
Phuc Long 1957
13
(12 HCM - 1 Bien Hoa)
50
Famous for the true value of tea and
coffee
Medium
The Coffee House 2014
17
( 15 HCM - 2 HN)
40-50
Share happiness with your relatives
and friend in the friendly space
Medium
Passio 2006
18
( 13 HCM - 5 HN)
40-50
Take-away coffee, young and active
attitude
Medium
Urban Station 2010
38
(31 HCM - 5 HN - 1 Da Lat - 1
Bien Hoa)
15-30 Shop space and cheap price Medium
Cộng Coffee 2007
19
（ 18 HN - 1 Da Nang)
35
where capture traditional value of Ha
Noi
Low
The KAfe 2015
11
( 6 HCM - 5 HN)
40-50 Coffee & fresh and delicous food Medium
Milano 2005
About 100 stores, most allocated in
HCM
10-12 Very cheap and real coffee favor Very low

7. 6 | P a g e
Based on the above table, we can assess the competitive of coffee shop market in Vietnam. It is medium
to high competition.
Coffee is a service sector than a product sector, so brand should care about the service quality, focus on
the customer. You should find out at least a compitive advantage to compete with others such as good
or new product, a special policy, good marketing, so on. It is also a good time to enter the Vietnam
market because Vietnam is openning for new capital and one of the most developing economic in the
world, average income is increasing. Besides, if you are a small business, you can save a lot cost in
Vietnam because of available raw materials and cheap labor. If you are a big brand, you should care
about complete process of business, including material area, production, selling and customer service.
IV. Reference
Porter five forces analysis, (wiki article) 12 January 2016. Available from: <
https://en.wikipedia.org/wiki/Porter_five_forces_analysis >. [29 January 2016].
2015 Vietnam Coffee Industry Report, Available from: <http://www.marketintello.com/en/news/2015-vietnam-
coffee-industry-report/4 >. [29 January 2016].
Linh Mai 2015, Market entry plan for trung nguyen coffee company in
finnish market, Bachelor’s thesis, International Business Programme, KARELIA University of Applied Sciences.
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[29 January 2016].
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phe-viet-nam-qui-i-nam-2015-phan-2.html Available from: < >. [29 January 2016].
Nguyen Toan Thu Nha 2012, The business potential for vietnamese
coffee in scandinavian market, Bachelor’s thesis, Degree Programme in International Business
Option of Financial Management, Tampere University of Applied Sciences. Available from: <
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[29 January 2016].
General Statistics Office of Viet Nam, Government of Vietnam. Available from:
<https://www.gso.gov.vn/default.aspx?tabid=714 >. [29 January 2016].
Vietnam Trade Promotion agency 2015, Thị trường cà phê Việt Nam Quí I năm 2015 - Phần 2. Available from:
< http://www.vietrade.gov.vn/ca-phe/4322-nganh-hang-ca-phe-viet-nam-mua-vu-201415-va-mot-so-du-bao-
phan-2.html>. [29 January 2016].
Bargain of customer 4/5
Bargaining power of supplier 3.5/5
Threat of substitutes 3/5
The ability of entrance 3/5
Rivalry among existing competitors 4/5
Porter's Five Force of Coffee Shop Market In Vietnam

8. 7 | P a g e
General Statistics Office of Viet Nam 2015, Thông cáo báo chí của ASEANstats: Dân số Việt Nam 2014 vượt
mốc 90 triệu người, Government of Vietnam. Available from: <
https://www.gso.gov.vn/default.aspx?tabid=382&idmid=2&ItemID=15148>. [29 January 2016].
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1, Government of Vietnam. Available from: <http://www.vietrade.gov.vn/ca-phe/4321-nganh-hang-ca-phe-viet-
nam-mua-vu-201415-va-mot-so-du-bao-phan-1.html >. [29 January 2016].
H.NHƯ 2013, Người Việt tiêu thụ trung bình 1,15kg cà phê/năm, Tuoi Tre, 14 March. Available from: <
http://tuoitre.vn/tin/kinh-te/20130314/nguoi-viet-tieu-thu-trung-binh-115kg-ca-phenam/537848.html >. [29
January 2016].
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