Trungnguyen coffee

UNIVERSIDAD POLITÉCNICA DE MADRID
Joint Masters in Management & Engineering of Environment & Energy
(2016-2018)
Introduction to Organizations and Corporate Strategy
Trung Nguyen Coffee
by
Nguyen Cong Tri
submitted to
Professor Carlos Rodriguez Monroy
January 9, 2017

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TABLE OF CONTENTS
ABSTRACT............................................................................................................................... 4
I. COFFEE PRODUCTION IN VIETNAM .......................................................................... 5
II. TRUNG NGUYEN COFFEE COMPANY .................................................................... 7
II.1 Brief history ..................................................................................................................... 7
II.2 Key milestones................................................................................................................. 7
II.3 Trung Nguyen´s coffee products ..................................................................................... 8
II.4 Organizational structure of Trung Nguyen...................................................................... 9
II.5 CEO of the company...................................................................................................... 10
II.6 Business philosophy....................................................................................................... 10
III. MARKET ANALYSIS ................................................................................................. 11
III.1 PESTEL analysis .......................................................................................................... 11
III.2 SWOT analysis............................................................................................................. 13
IV. TRUNG NGUYEN MARKETING PLAN – 4Ps MODEL............................................. 15
V. TRUNG NGUYEN AND ITS GLOBAL EXPANSION ................................................. 17
V.1 Competitor analysis - Trung Nguyen and Starbucks..................................................... 17
V.2 Porter´s Five Forces for Trung Nguyen to entry US markets........................................ 18
VI. CONCLUSION ............................................................................................................. 22
REFERENCES......................................................................................................................... 23

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LIST OF FIGURES
Figure 1. Coffee production by countries in 2015-2016 season ............................................... 5
Figure 2. Vietnam´s coffee export structure by market in first 6 months of 2014..................... 6
Figure 3. Organizational structure of Trung Nguyen................................................................. 9
Figure 4.Vietnam is the world’s lowest cost coffee producer ................................................. 14
Figure 5. Starbucks holds more cash than many banks ........................................................... 18
LIST OF TABLES
Table 1.Some products of Trung Nguyen coffee in online market in the US.......................... 20

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ABSTRACT
Today, coffee is one of the major exported productions that have directly contributed to
promote the positive transformation of Vietnam´s economy. According to information from
Vietnam trade promotion agency, in 2016 Vietnam’s coffee export income represents 1.5 %
of national GDP, providing a livelihood for more than 2 million people, most of them are
farmer and from the minority ethnic groups. However, Vietnam has been mostly exporting
green (unroasted) coffee which is has much lower price than processed coffee in market
commodity. Aware of this problem, some Vietnamese roasted and packed-coffee retailer and
exporting enterprises have launched to exploit the cheap domestic coffee supply and cheap
labour. Among of these, Trung Nguyen must be mentioned as the biggest and the most
successful roaster and packaged-coffee retailer in a country.
Trung Nguyen was founded in 1996, based on Ho Chi Minh City. This company was
the pioneer in applying franchising model in Vietnam and they succeeded indeed. From 2012,
brand Trung Nguyen has become the number one coffee brand nationwide. The company now
has 1000 franchised shops within Vietnam and 8 foreign countries which are: the US, Japan,
Singapore, China, Thailand, Cambodia, Poland and Ukraine. The company’s coffee products
have been exported in 60 different countries in the US, EU and Asia. The company’s revenue
in 2016 was about 170 million USD.
The aim of this report is to introduce about status of Vietnam’s coffee industry, the
Trung Nguyen company itself as well as to explain how they succeeded by using some
marketing models including: PESTEL model, SWOT, 4Ps, Porter’s five forces model.
Finally, I did an analysis of the opportunities and threats for Trung Nguyen when they expand
their products internationally in the future.
Key words
Vietnam´s coffee industry, Trung Nguyen company, franchised coffee shops, PESTEL
analysis, SWOT analysis, 4Ps, Porter’s five forces model.

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I. COFFEE PRODUCTION IN VIETNAM
Coffee was introduced to Vietnam in 1857 by the French colonist and the country grew
slowly as a producer in Asia. After economic reform 1986, the coffee production has
increased dramatically about 20-30% each year in 1990s. Today, Vietnam is the second
largest coffee producer in the world – 165,000,000,000 kilograms in 2015 alone [1].
Vietnam is also the largest coffee producing nation in terms of Robusta output. This
type of coffee grows mostly in Vietnam due to the fact that Robusta is best adapted to low
attitude (under 1000 m above sea level) and it fits well to warm, wet tropical climate of the
country.
Figure 1. Coffee production by countries in 2015-2016 season [2]
Robusta coffee makes up more than 95% of total nation´s output while Arabica coffee
accounts for most of remaining 5 % [3]. Robusta contains more caffeine than Arabica, making
it tastes more bitter which is the reason why green beans of Robusta is about haft the price of
Arabica green beans on commodity market. As part of the strategy to produce higher-quality
coffee production, the Vietnamese government has planned to increase the output of Arabica,
with a target for this type of bean to account for 8 % of the total coffee plantation by
2020(Some areas of Vietnam also have excellent potential for cultivating of Arabica coffee).
According to the Vietnamese Ministry of Agriculture and Rural Development, the
country’s total coffee plantation at 650,000 hectares, with high-yield production areas for

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high-quality coffee focused in four key provinces of Vietnam´s Central Highland where most
ethnic minorities with low –income reside in. Coffee is one of the main products which have
been changing the living standard of the locals and it has directly contributed to promote
economic growth, creating job for ordinary labour as well as solving the problem of hunger
eradication and poverty reduction for Vietnam in general and its Central Highland areas in
particular.
The main import markets of Vietnamese green bean coffee are the US, the European
Union and Asian countries. According to official statistic, in 2013 Vietnam exported to the
EU countries reached 568 thousand tons with a turnover of 1.2 billion USD. Asian market
became the second largest importer of Vietnamese coffee with 269 thousand tons and a
turnover of 598.9 million USD in 2013. [4]
Figure 2. Vietnam´s coffee export structure by market in first 6 months of 2014
Source: General Department of Vietnam Customs
According to the estimation by Vietnam Coffee and Cocoa Association, there are
currently about 500 Vietnamese enterprises participating in the manufacture and export of
coffee, most of them are small and medium-sized enterprises. Out of these there are more than
150 enterprises with full qualification and capacity to participate in coffee exporting. [4]

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II. TRUNG NGUYEN COFFEE COMPANY
II.1 Brief history
As mentioned before, Vietnam had become one of the major players in international
coffee market commodity by mid-1990s. Much of coffee produced, however, was low quality
and sold unroasted beans at cut-price overseas. These challenges are big for the industry itself,
but opportunities are even bigger for manufactured and processing green coffee domestic
enterprises. Trung Nguyen (Vietnamese: Trung Nguyên) is the one of those companies which
were established in 1996. Nowadays, it is known as the most popular domestic coffee brand
within Vietnam.
Trung Nguyen is a group business specializing in production, distribution and
processing of coffee. It contains subsidiaries :Trung Nguyen Corporation JSC, Trung Nguyen
Instant Coffee Company JSC, Trung Nguyen Coffee Co.,Ltd, G7 Commercial Services
Company, Dang Le Tourism Company JSC, Trung Nguyen Franchising Company JSC and
Coffee Hypermarket. [5]
Its chairman and CEO is Dang Le Nguyen Vu who has been described as “Vietnam
Coffee King”, “Philosopher King” or best well-known as “Zero to Hero”.
II.2 Key milestones
 1996: Trung Nguyen (roughly translated as Central Highlands) was founded in Buon
Me Thuot city which is known as Vietnam´s coffee capital city. Its initial capital
investment was only an old bike with faith and strong will of youth as well as a desire
to create a famous coffee brand, bringing the flavour of Viet´s coffee to the world.
 1998: First small coffee shop was introduced its products to consumers in Ho Chi
Minh City which is the biggest city in Vietnam.
 2000: Trung Nguyen was the first company in Vietnam applied franchising model in
domestic and regional markets.
 2001: Announcing new slogan “Explore creative inspiration”, Trung Nguyen had
well-earned reputation for its products in nationwide market, Trung Nguyen´s
products were presented in all 64 provinces of domestic market and expanding its
franchise model to neighbours countries such as Singapore, Thailand and Cambodia.
 2003:G7 instant coffee was introduced and exported to the some developed countries.

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 2008: First step to conquer the world – Trung Nguyen established first office in
Singapore with intention to turn Singapore market into a base for both its regional
market expansion in Asian as well as global markets.
 2010: Its products were exported to over 60 countries in the world such as the U.S,
Canada, Russia, England, Germany, Japan, China, ASEAN, etc.
 2012: Trung Nguyen Coffee is the number one brand in Vietnam with the largest
number of coffee consumers.
 2013: According to an official estimation, 13,265,826,449 cups of coffee were
consumed domestically up to 2013. [5]
The company now has a system of around 1000 franchised coffee shops in Viet Nam
and 8 foreign countries which are: the US, Japan, Singapore, China, Thailand, Cambodia,
Poland and Ukraine. [6] [7]
II.3 Trung Nguyen´s coffee products
There are several ways to classify the Trung Nguyen coffee product lines that the
company has. According to information from Trung Nguyen Trade channel site, it has six
main groups of product. [8]
 Weasel (better known as Kopi Luwak in Indonesia) is the most premium product of
Trung Nguyen coffee. The price of this product is about 16 million VND (800 USD
proximately) for 250 grams. The reason behind the high price is that the coffee beans
are produced in very unique way. These beans were eaten by the small mammal called
Asian Palm Civet and coffee beans were partly digested by its digestive tract. After
gathering, thorough washing, sun drying, light roasting, and brewing, these beans
yield an aromatic coffee with much less bitterness. [9]
 Legendee is brand coffee simulating Kopi Luwak product. The coffee beans were
processed by using synthetic enzymes to mimic the civet's gastric acid, producing
effects on flavour similar to natural Kopi Luwak. By doing so, they are reducing the
demand rely on the civet, which is now endangered in Vietnam due to excessive
hunting.
Trung Nguyen Legendee coffee has been chosen as a drink serving to members of global
Conferences held in Vietnam such as APEC, ASEM, etc. In addition, this product was also
chosen as a gift dedicated to head of states and kings by the government. [10]

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 Roasted and ground coffee
Filter Coffee (1,2,3,4,5), Creative Coffee (1,2,3,4,5,8), Espresso, Blend (I, S, N, Premium
Blend, Gourmet Blend, House Blend).
 G7 instant coffee
This group of product is the most popular product lines in domestic market because the
price of these products is quite reasonable for most Vietnamese people.
This product lines includes: G7 3in1, G7 2in1, G7 Strong X2, Pure Black, Cappuccino,
Passiona, White Coffee.
Passiona is a special product that targets women. It contains low caffeine, antioxidants,
oriental herb, collagen supplement and sugar diet [11].
 Fresh coffee
 Green bean coffee (unroasted coffee)
II.4 Organizational structure of Trung Nguyen
The chart of organization is divided into 3 ranks.
Figure 3. Organizational structure of Trung Nguyen
CEO Dang Le Nguyen Vu
Human resoure manager
Administration
department
Human resoure
department
Local marketing and sale
manager
Marketing department
Sale department
International marketing
and sale manager
Marketing and sale
department
Financial manager
Accounting department
Financial department
Logistics

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The company now has nearly 2000 employees and it also has created indirectly jobs
for 1500 people who work in 1000 franchised cafes in the country. The management teams
are mostly young people who were trained by consultants having working experiences in
foreign corporations [12].
II.5 CEO of the company
Dang Le Nguyen Vu was born in poor family, his parents were famers. He was a
student – turned – entrepreneur. He established his company when he was still studying
medicine in Central Highland, which is the Vietnam´s coffee capital. [25]
Without much business experiences but with a strong love of coffee and strong desire
to explore coffee´ economic potential, Mr. Vu established the first small coffee Trung Nguyen
shop in Buon Ma Thuot. By his love for coffee and his efforts as well as his creative mind, he
has helped to create a giant coffee company of Vietnam today.
In August 2012, Forbes called Vu 'Vietnam's Coffee King' and he also was described
by journals National Geographic as 'Zero to Hero' [26] [27] .Mr.Vu is known as an “idea-
generating man” due to his “Doctrine of Coffee” whereby he has developed a secular
philosophy named 'Coffeeism' (Coffee Tao or Coffee Ceremony), including 'Coffee Zen'. It's
described as an “all-comprehensive, all-dimensional, all-global”, approach to healing,
success, fortune, well-being and enlightenment; in which "Coffee is the 'Treasure of Earth and
Heaven, Heritage of Humankind and spot-on Solution to the Future"[28].
It is can be said that his success has inspired a new generation of pioneers in Viet Nam,
which is still poor and emerging country.
II.6 Business philosophy
Belief: Coffee brings strength, wealth and true happiness
Mission: Connect and develop communities coffee lovers with a passion for creative coffee in
order to achieve a prosperous and suitable world
Vision: To become the world’s coffee leader
Core value:
 Big aspirations
 National and global spirit
 Persistent breakthrough innovation

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 Superior implementation
 Creating value and sustainable development[5]
III. MARKET ANALYSIS
III.1 PESTEL analysis
Political
The VN Government has issued number of policies to support coffee sector. They have
reduced 50% land tax for agricultural enterprises. This policy aims to support the enterprises
to invest in agriculture and encourage them using land for cultivation. Government also has
some policies about direct payment, credit policy, supporting to apply the programs for
training and education for farmers, encouraging the scientific and high technologies in
producing and processing coffee, etc. [17]
On June 2012, the Ministry of Industry and Trade banned the foreign entities from
directly purchasing coffee from farmers and establishing coffee buying network in Vietnam
[3].
Economy
After economic reform, Vietnam´s economy has grown quickly for decades, it is
sometimes called as a “new tiger” of Asian economies. Economic growth has been
accompanied by the improvement of living standard. When people life is improved, they are
also more demanded on quantity and quality of foods, drinks so on and so forth, and of course
demanding on coffee is no exception. That is the reason why during the period from 1990to
2012, the coffee consumption per capita of Vietnamese people increased dramatically from
over 100 grams in 1990 to 1750 grams in 2012, and also raising in ways of enjoying coffee,
types of coffee, etc.
Economic growth has attracted foreign investment including capital, technologies. For
this reason, Trung Nguyen also gains benefits from investment and by applying high
technologies in producing and processing coffee.
By opening the economy, many foreign coffee companies have appeared in domestic
market and they will be the direct competitors of Trung Nguyen coffee.
Social

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Vietnam has a population of over 93 million people in 2016[13], providing a cheap
labour and abundant and cheap human resources (GSO 2015). The number of people in
working age has increased dramatically, accounts for 67% of nationwide population. The
labour working in coffee industry accounts for 2% of the total labour force [14]. These
characteristics of social environment support to the growth of Trung Nguyen because the
company become more competitive.
Vietnamese people are very hard-working, skilled work force. In addition, they have
long tradition for cultivating coffee products as well as others agricultural products so they
have a lot of know-how in this field.
Vietnamese people traditionally drank tea and do still .It is obvious that tea is one of the
main beverages nationwide. However, since coffee was introduced to Vietnam in 19th
century
it became more in more popular in community, especially for young modern people, office
workers. Statistic of coffee consumption per capita of Vietnamese people showed that there
was a dramatic increase in amount of coffee (gram) consumed from 1990 to 2012. The
consumption was over 100 gram per capita in 1990 to 1750 gram per capita in 2012[19].
Technology
They have been investing in its network of coffee farms by importing and installing
high tech irrigation systems and utilizing quality fertilizer.
Trung Nguyen has been enhancing the skill of producers (household farmers in Central
Highland) helping them to reduce pesticide use, etc. [13]
Environment
Vietnam’s coffee in produced in the Central Highlands where has many relevant
conditions for growing coffee, especially Robusta coffee. Other than that, this area also has
many regions where Arabica can fit well.
However, expansion of coffee farm also has its own drawbacks. Recently,
environmentalists also warn that deforestation for cultivating coffee has negative effects on
land, making land steadily exhausted and destroying ecological system of rain forest in
Central Highland. [18]
Legal
Trung Nguyen products have been supported by a number of international verification
and certification systems such as EUREPGAP – a common standard for farming practices

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created by a conglomerate of European supermarkets (GAP is the acronym for Good
Agricultural Practices, a method of agriculture that ensures the safety of produce) and Utz,
etc. As the company’s founder said, “We expect to get certification from international
organizations for the quality of our inputs […] so that we can easily sell our coffee to
selective markets, and leading American and European food retailers.” [25]
III.2 SWOT analysis
Strengths
 Trung Nguyen has firm relationship with domestic costumers
As mentioned earlier, it was established in 1996, therefore, they have long period of
time to build solid relationship toward their locals. In 2012, it is the number one coffee brand
in Vietnam. According to the information from its official site, there are nearly 10 million of
17 million Vietnamese households bought Trung Nguyen´s coffee products to enjoy at home
in this the period from 2009 to 2011. [5] One of the main reasons for that is their products
captured the domestic costumer´s mentalities, since all of the products express the stronger
ethnicity than other brands in domestic market commodity.
 The company also has strong relationship with high-standard coffee suppliers
According to Saigon Times Daily, Trung Nguyen coffee Corporation organized a
training course for 1500 coffee farming households in Dak Lak province, which is one of four
key coffee cultivating provinces in Central Highland, how to cultivate coffee in 2500 hectares
in accordance with Utz Certified. By doing so the company hopes of protecting environment,
meeting the requirements of international markets and they will be proactive in supply of
high-standard raw coffee beans. [13] [23]
 Abundant human resources and cheap labour
Vietnam has a population of over 93 million people in 2016[13], is the 13th
of the most
populous country in the word and 3rd
in Southeast Asia, providing a cheap labour and
abundant and cheap human resources (GSO 2015). The number of people in working age has
increased dramatically, accounts for 67% of nationwide population. The labour working in
coffee industry accounts for 2% of the total labour force [14].
According to the international coffee trade, Vietnam is the world’s lowest cost coffee
producer.

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Figure 4.Vietnam is the world’s lowest cost coffee producer [29]
 Trung Nguyen was a pioneer in Vietnam who applied franchising model and
succeeded.
 Good and wide distribution channels
Weaknesses
 Implementing massively the strategy of franchising
The company has implemented massively the strategy of franchising, sometimes it is
hard to control the quality of coffee sold in the franchised shops. According to information
from Mr. Nguyen Tran Quang - Marketing Director of the company, some coffee shops (these
shops are mostly located in small towns and villages) have not signed any contract with Trung
Nguyen to be a franchise, yet they used sign trademark and symbol of Trung Nguyen [15] On
the other hand, in some real franchised shops do not keep their image that desired by the
company. So there is a problem of homogeneity.
 So many ambitions at the same time
 Adapting in competitive environments
The company needs to adapt in competitive environments with different languages,
cultures, laws and business practices. The name Trung Nguyen itself is hard to pronounce for
many people in non-Vietnamese speaking countries. It is really mouthful. “So we may have to
change it” said Dang (2002).

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Opportunities
It has been holding the largest market coffee share in Vietnam and there is no
opponent equal with Trung Nguyen in Vietnam´s market.
Threats
 Competitors
Domestic market:
Losing its market shares to High land, Nescafe, Vinacafe and recently Starbucks
International market:
Starsbuck, Gloria Jeans Coffee, Nestle, Maccoffee
 Not enough capital to rotate, losing prestige with partners (international market)
The company relies on its franchisees and partners in others countries to provide
sustainable upfront payments. It also has less accounting experiences and legal to deal with
more developed and more complicated financial and costumer markets. [16]
IV. TRUNG NGUYEN MARKETING PLAN – 4Ps MODEL
Product
It gives more choices for their customers by providing variety of products. For
example, Passiona coffee has added collagen and vitamin P, targeting women. Women now
can drink their coffee comfortably without worry about the harm of coffee a lot [11]. Weasel
coffee is another product targeting upper class and foreign costumer who wants to discover
the unique favour of the King of coffee. It is obvious that Trung Nguyen satisfies their
customers from all classes with different jobs.
Understanding, quality is one of the key factors to conquer customers, Trung Nguyen
(2010) states that they “chooses four different regions where the most delicious coffee grown:
Robusta in Buon Ma Thuot, Vietnam, coffee from Ethiopita, Arabica from Jamaica and coffee
from Brazil. With the support of the cutting-edge technology and the secret of Oriental
making coffee in grounding, Trung Nguyen coffee products are so special and different from
another one”.
Price

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In general, the price of Trung Nguyen coffee products are quite high compared to
others coffee products of local companies. Although its products have medium price in
international markets [22], it has some luxury products such as Weasel, Legendee (about 3000
USD per kg) appealed to both domestic and export markets. By doing so, the company
persuaded the home market that its expensive product offered value, and convinced overseas
customers that Vietnam could produce gourmet coffee. Its products price depends on the
markets. For example, Trung Nguyen coffee has higher prices than others coffees in Japan
which is one of the most famous countries with traditional of tea ceremony. Japan is also very
strict market of enjoying coffee. Although almost franchising stores of Trung Nguyen set a
price of each cup that is higher 50% than Starbucks, Trung Nguyen still achieved a lot of
success in Tokyo. [16] [22]
Place
Locally, it cooperated with Tan Son Nhat airport, which is the second biggest airport in
Vietnam, having a Trung Nguyen coffee store on the third floor. Furthermore, they also
opened in some of the most tourist attractions such as Ho Chi Minh museum of Fine Art,
Saigon Railway Station, shopping mall centre.
Internationally, they opened some retail stores with cooperated with local brand. A
good example of that is G7 Mart chain retail store which cooperated with Japanese brand-
Ministop, known as G7-Ministop Convenience Store Chain.
In domestic market, Trung Nguyen designs their coffee shops with the style of Central
Highland where coffee is derived from. In international market, Mr. Vu once said: "I visited
some Starbucks outlets in the United States. I think Starbucks and Trung Nguyen share some
similarities. But we are planning to make Trung Nguyen coffee shops with typical
Vietnamese features, which reflect our culture, design and service style." [24]. In Trung
Nguyen shop costumers can expose into the original coffee environment and try the different
tastes of coffee. On the other hand, the customers can compare and give feedbacks about the
tastes coffee. By this point, customers feel very interested in Trung Nguyen brand.
Promotion
The company supported a film about its CEO Mr.Vu, the title of the film was “Giot
Dang”. The plot of the film was about his tough life in the past and how hard he tried to build
the company and present brand. [20]

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Furthermore, CEO Mr.Vu has usually shocking conversation. By doing so, these
speeches gave company some marketing benefits. A good example of that is what he said
when giving an interview to a Reuters’ reporter while he was in Switzerland "They
(Starbucks) are great at implanting a story in consumers' minds, but if we look into the core
elements of Starbucks, what they are doing is terrible. They are not selling coffee, they are
selling coffee-flavored water with sugar in it [21].
On the other hand, the company have held many events to PR brand, promoting its
products via industry fairs and festivals – such as the Buon Ma Thuot Coffee Festival, held in
the Central Highlands, opening coffee village and there were some scholarships named Trung
Nguyen for poor students, holding some free training courses for household farmers to
cultivate coffee with new technologies, etc.
They have advertised their products by social networks like Facebook, publisher
websites, local newspaper and magazines.
V. TRUNG NGUYEN AND ITS GLOBAL EXPANSION
Trung Nguyen has great ambitions to conquer the world´s coffee products market. It
has been negotiating with many international markets to open franchising shops, some says it
has been chasing Starbucks dream. Recently, it has opened 2 coffee shops in Dubai (UAE).
[30]. Hereafter, I will analyse the difficulties that Trung Nguyen may face when it enter
international coffee markets. Company´s CEO and chairman has great ambitious to conquer
US market. He once said: "If we can take on and win over the US market we can conquer the
whole world". Hereafter some aspects of US coffee market will be taken to account.
V.1 Competitor analysis - Trung Nguyen and Starbucks
There is no doubt that one of the biggest rival of Trung Nguyen when it enters
international market is a giant Starbucks.
 In term of brand, Trung Nguyen is indeed much younger brand than giant Starbucks,
which was established in 1971 while Trung Nguyen established in 1996.
 Franchising systems
Starbucks and Trung Nguyen are both famous in applying franchising model.
However, Starbucks has more than 18000 retail stores in 60 countries while Vietnamese
company has just 1000 franchised shops in Vietnam and 8 shops outside Vietnam.

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 In term of product diversity, Starbucks has more diversified and innovated products
with professional employees while Trung Nguyen coffee products focus on
Vietnamese style. However, the difference is also considered as an advantage to enter
the new market with power existing rivals.
 Size
Revenue of Trung Nguyen was 151 million USD compared to 11,7 billion USD in
2011. According to information from Statista, Starbucks even holds more cash than many
banks.
Figure 5. Starbucks holds more cash than many banks [31]
V.2 Porter´s Five Forces for Trung Nguyen to entry US markets
Rivalry among existing competitor
The rivalry between competitors in US coffee market is relatively high, including
major companies such as International Coffee & Tea (The Coffee Bean & Tea Leaf), Peet’s
Coffee & Tea, and Starbucks (all based in the US), as well as Costa (part of hospitality firm
Whitbread) and Caffè Nero (both based in the UK).

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At the present time there are approximately 24,000 Coffee Shops across the country.
Statistics show there will be approximately 50,000+ Coffee Shops within the years to follow.
[32]
Bargaining power of suppliers
Status: Average
There are many coffee suppliers in the US from Brazil, Vietnam, Columbia, etc.
However, each country usually has its own products with different styles.
Bargaining power of buyers
Status: Average
According to information from Statista, the coffee consumption per capita in the US
was 1.85 cups per day in 2015 and decreased slightly at 1.64 cups per day in 2016. Among
coffee drinkers the average consumption in the United States is 3.1 cups of coffee per day.
There are not so many options for substitutions for consumers, thus the buyer power
stays at an average level.
Threat of new entrants
Status: Average (current), It could be high in the future
Vietnamese coffee is now trying to explore the US market since the boom production
in Vietnam in the last ten years. Trung Nguyen Coffee Company is now facing with other
coffee contenders from Asia such as India and Indonesia, moreover from China and Vietnam
also.
Threat of substitute products and services
Status: Average
Threat of alternative products to coffee could be soluble coffee or different kinds of
drink such as tea, energy drink, or soft drink with fast food.

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Table 1.Some products of Trung Nguyen coffee in online market in the US
Product Type and Price Photo example
Weasel Bantai Civet Coffee and French
Press Gift Set*
Pure, Authentic Civet Coffee,
whole bean, 4 oz, in gift bag, with
12 oz French Press: $68.95
Pure, Authentic Civet Coffee,
whole bean, 2 oz, with 12 oz
French Press: $44.95
Legendee
Legendee gold*
Ground, 250g: $22.95
Ground, 250g, with Gold Fabric
Gift Bag: $23.95
Ground, 500g, (Two 250-gram
bags in free Gift Box): $47.95
G7 instant coffee Bag of 20 sachets: $6.25
Two-Pack: 2 bags of 20 sachets
each, total 40 sachets: $12.50
Five-Pack: 5 bags of 20 sachets
each, total 100 sachets: $28.50

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Roasted and
ground coffee
Creative Five - Culi Arabica*
Ground, 9oz (250g): $8.75
Ground, 12oz (340g): $12.50
Green coffee
(unroasted)
Green (Unroasted) Vietnamese
Coffee Kit*
6oz Stainless Steel Phin Filter with
Trung Nguyen logo, 14oz
Sweetened Condensed Milk, and
your choice of coffee:
1 lb unroasted Dalat Blend beans:
$17.95
3 lb unroasted Dalat Blend
beans:$33.95
2 lbs each of unroasted Dalat
Bourbon Arabica and Dalat
Peaberry Robusta beans: $35.95
*
This is one of many types in product lines.
Source: http://trung-nguyen-online.com/g7-gourmet-instant-coffee.php

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VI. CONCLUSION
In conclusion, there success of Trung Nguyen case is undeniable. In only several years,
Trung Nguyen from a small shop became most popular coffee brand over Vietnam. By using
marketing models PESTEL, SWOT, 4Ps, the clear picture of Vietnamese coffee market was
drawn. It can be realized that leadership, customers, social factors and legal policy supported
Trung Nguyen coffee to expand domestically and regionally. However, there are some
difficulties which Trung Nguyen needs to consider in order to expand its size in global scale.
It is still a small and young company from a developing country. However, there is no doubt
that Trung Nguyen coffee has its own styles that can be taken as an advantage to enter the
global market.

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REFERENCES
[1]Worldatlas (September 2016). Top Coffee Producing countries. Retrieved from:
http://www.worldatlas.com/articles/top-coffee-producing-countries.html
[2] Espresso King undercut as Brazil currency rout spurs bean export. Retrieved from:
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export/11/582693.epi
[3]Ipsos business consulting (July 2013). Vietnam´s coffee industry. WEBSITE
www.ipsosconsulting.com
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months of 2014. Retrieved from:
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am-coffee-export-in-the-first-6-months-of-2014&catid=270:vietnam-industry-
news&Itemid=363
[5]Trung Nguyen official website http://www.trungnguyen.com.vn/en/
[6]Trung Nguyen Corporation. Retrieved from: http://www.vietaz.com/store/512/about.htm
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and Challenges in developing franchise Sector. Retrieved from:
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[8] Cà phê Trung Nguyên và Tập Đoàn Trung Nguyên Retrieved from:
http://bancaphetrungnguyen.com/ca-phe-trung-nguyen-va-tap-doan-trung-nguyen-
31315u.html
[11] Cafe hòa tan Passiona. Retrieved from: http://weaselcoffee.com.vn/cafe-hoa-tan-
passiona-266349.html
[12] University of Economic Ho Chi Minh City, Faculty of Business Management(
September 2015). Company and Sales Trung Nguyen
[13]Minh Nhat (May 2011). Trung Nguyen trains coffee farmers in Daklak. Retrieved from:
http://english.thesaigontimes.vn/Home/business/other/17216/
[14]Nguyen Thi Hoang Nhien (March 2016). Bachelor´s thesis - Centria University of applied
sciences. THE COMPETITIVENESS OF VIETNAMESE COFFE INTO THE EU
MARKET.

24
[15]Vietnam Economic Times (October 2005). When others use your name. Retrieved from:
http://gaocenter.blogspot.com.es/2005/10/when-others-use-your-name.html
[16]Tim Larimer (2003) Chasing Starbucks Dreams: Trung Nguyen and its global expansion.
[17]Tran Cong Than and Vu Huy Phuc (July 2016) Vietnam´s Coffee Policy Review
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[18]Chris Summers (January 2014) How Vietnam became a coffee giant Retrieved from:
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[19]STATISTA Per capita coffee consumption in Vietnam from 1990 to 2012 (in grams per
capita) Retrieved from: https://www.statista.com/statistics/315005/vietnam-per-capita-coffee-
consumption/
[20]VNEXPRESS Giot dang Retrieved from: http://giaitri.vnexpress.net/phim/giot-dang-
1475.html
[21]Vietnamnet (December 2015) Trung Nguyen vs Starbucks: what is the status of the
battle? Retrieved from: http://english.vietnamnet.vn/fms/business/148586/trung-nguyen-vs-
starbucks--what-is-the-status-of-the-battle-.html
[22] Retrieved from: http://timtailieu.vn/tai-lieu/tieu-luan-phan-tich-chien-luoc-marketing-ca-
phe-trung-nguyen-12479/
[23]GlobalCoffeeReport (December 2013) Vietnam, Buon Ma Thuot - a coffee success story
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success-story
[24]Tini Tran (May 2002) Success Begins to Brew in Vietnamese Cafes Retrieved from:
https://www.washingtonpost.com/archive/politics/2002/05/19/success-begins-to-brew-in-
vietnamese-cafes/62919eda-4bc1-4f6a-a92a-3472a644c7ce/?utm_term=.550496c56d06
[25] The Coffee Scented Dreams of a Young Entrepreneur Retrieved from:
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[26] Katherine Karnow (21 February 2012). "My Time with the Coffee King of Vietnam"
Retrieved from: http://intelligenttravel.nationalgeographic.com/2012/02/21/my-time-with-the-
coffee-king-of-vietnam/

25
[27] Scott Duke Harris. "Chairman Vu, Vietnam's Coffee King" Retrieved from:
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vu/#32200fd55eea
[28]Phan Quoc Viet (July 2013) Cà phê với Đặng Lê Nguyên Vũ Retrieved from:
http://thanhnien.vn/gioi-tre/ca-phe-voi-dang-le-nguyen-vu-21157.html
[29]Vietnam A business case for Sustainable Coffee Production (December 2013)
[30]Sanada Sahoo (November 2014) Vietnamese coffee chain Trung Nguyen to enter UAE
market Retrieved from: http://www.thenational.ae/business/retail/vietnamese-coffee-chain-
trung-nguyen-to-enter-uae-market
[31] Retrieved from: https://www.statista.com/chart/5393/starbucks-holds-more-cash-than-
many-banks/
[32] Retrieved from: http://www.e-importz.com/coffee-statistics.php

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