08 proposing coffee export market for anthai joint stock company

Understanding that, along with market research, standing on the stance of An Thai Joint Stock Company, our group together proposed a new project "exporting An Thai coffee to the German m

INTRODUCTION 2

1 Company background 3

1.1 Introduction to An Thai Joint Stock Company 3

1.2 Advantages and disadvantages of the company Joint Stock 3

2 Reasons to find new foreign markets and choose potential foreign markets 4

2.1 Select new foreign export markets 4

2.2 Choosing potential markets 4

3 PESTEL 5

3.1 Political 5

3.2 Economic 6

3.3 Social 6

3.4 Technological 7

3.5 Legal 8

3.6 Environmental 8

4 Select a method of entry and explain: 8

4.1 Penetration through direct exports 8

4.2 Advantages and disadvantages of direct export 9

4.3 Direct export to the German target market is the best choice of An Thai because 10

5 Conclusions 10

REFERENCES 11

In the context of globalization integration and the increase of international cooperation and investment, international trade has gradually become an important factor in the economic development policies and strategies of most countries in the world gender International trade is the exchange of goods-services in the form of buying and selling of goods-services and accompanying services such as shipping, international transportation, international payment, assembly, warranty, insurance Insurance or warranty by a business entity of one country with another country or an international organization It stimulates consumption, production expansion, technology transfer, and investment between countries, thereby creating a premise for the economic growth and development

of countries

Along with the strong movement trend of the world economy, especially the deepening impact of the trend of regionalization and globalization of the national economy and the world economy, the Exporting has become a strategy to serve the national development goals, is the door to open the economic transaction activities of a country, of a country

On the path of economic integration, Vietnam advocates to expand economic trade with friends around the world, especially for export activities, which has made great progress

in both quality and quantity

Coffee is Vietnam's main export product and is the second largest export agricultural product in terms of turnover after rice Thanks to coffee production and export, Vietnam has gradually created jobs for workers while expanding the development of the household and farm economy from purchasing and producing coffee for export , and also contribute a great source of revenue to export sales of the country However, the export

of coffee still has many shortcomings that require each enterprise and the state to find the right direction to improve export efficiency for coffee in particular and other export products in general

The choice of export market also plays a decisive role in the success or failure of enterprises in that market Understanding that, along with market research, standing on the stance of An Thai Joint Stock Company, our group together proposed a new project

"exporting An Thai coffee to the German market"

1 Company background

1.1 Introduction to An Thai Joint Stock Company

AnThaiGroup is one of the leading corporations in the production, distribution and export

of coffee Established in 1996, AnThaiGroup has been constantly striving to develop and build experience

An Thai Joint Stock Company currently owns the brands: AnThaiCafe, HiupCoffee, An Thai Vietnam, Anmix with a nationwide distribution system and more than 40 countries around the world An Thai Group has been selected by famous coffee companies in the world as a strategic partner and official supplier for many years

Main products: spray-dried instant coffee, freeze-dried instant coffee, 3-in-1 instant coffee, powdered coffee, roasted coffee beans, extracted coffee, paper filter coffee,

1.2 Advantages and disadvantages of the company Joint Stock

Company A joint stock company is a type of legal entity with limited liability, which is

established and exists independently of its owners The capital of the company is divided into equal parts called shares and is issued to raise the participation of investors

 Advantages and disadvantages of joint stock companies:

- Advantages:

+ Investors only have limited liability in proportion to the capital contribution ratio in the company;

+ Large scale of operation and easy business expansion from raising equity capital; + Investors have the ability to transfer investment capital from one place to another, from one field to another easily through the form of share transfer, purchase and sale;

+ The operation of the company achieved high efficiency due to the independence between management and ownership

- Disadvantages:

+ Relatively high tax rate because in addition to taxes that the company has to fulfill obligations to the state budget, shareholders are also subject to additional income tax from dividends and dividends in accordance with the law;

+ The cost of setting up a business is quite expensive;

+ Limited business and financial security because the company must disclose and report to shareholders;

+ The ability to change the scope of business as well as in business activities is not flexible because it must comply with the provisions of the company's charter, for example, it must be decided by the General Meeting of Shareholders of the Company, decision shares

2 Reasons to find new foreign markets and choose potential foreign markets

2.1 Select new foreign export markets.

For a business, crossing borders and making the leap to internationalization is a growth opportunity The expansion of the market will help the economy of that country develop and reduce dependence on a single market The development of the domestic coffee market has achieved certain successes and achievements Therefore, exploring and learning a new market abroad will significantly increase the following factors

+ Increase sales and profits

+ Diversify your market, making you less dependent Greater exposure to any market + Greater access to resources and talent

+ Scale economies and better margins as your production increases

+ Gain brand recognition as a brand How to be an international business

2.2 Choosing potential markets

- Coffee is one of the most important contributors to the revenue of Vietnam's Agriculture in particular and to the entire national GDP in general Over the past several decades, Vietnamese coffee production has developed as an export-oriented industry The German market is a potential and open market Germany is also one of the major importers of green coffee in the world In addition to serving the consumption demand in

the domestic market, Germany is also Europe's third largest coffee export market Therefore, Germany is considered as a great potential market for coffee producing countries However, besides that, there are still disadvantages and different barriers in choosing a new market like Germany But on the contrary, it will help An Thai Joint Stock Company better understand the new market that it is about to export a large source

of goods to

- Germany with 82 million people, is the largest and most important market in the European Union (EU) With a GDP of up to EUR 2.2 trillion and a per capita income of EUR 29,455, Germany is the leading economy in the world and has a leading role in the EU's economy, being the largest coffee consuming country in Europe with a per capita consumption of about 6.5 kg/person/year German consumer demand for specialty coffees is growing due to increasing awareness and knowledge of the product

It is expected that Germany's coffee consumption demand in the period 2021-2025 will grow at an average of 3.09%/year Currently, the German market consumes the most light-roasted and high-quality Arabica coffee The Arabica coffee segment is the fastest growing segment and is forecast to witness major improvements in the coming period In terms of product type, the ground coffee segment holds the largest market share due to convenience in consumption and in line with the preferences of German consumers Over the years, Germany has always been one of Vietnam's important trade partners According to data from the General Department of Customs, in the first 11 months of

2021, Germany is the largest export market of Vietnamese agricultural products in the

EU with a turnover of USD 641.15 million, a sharp increase of 24.4% compared to the same period last year period of 2020

It is forecast that Vietnam's coffee exports to the German market will recover in 2023

3 PESTEL

3.1 Political

Germany is federal Which means that the political apparatus of Germany is divided into two levels: the federal level, which represents the country in terms of foreign affairs and the state level has its own administrative: executive, legislative, judicial

Germany is a member of EU, NATO, the G8, the G20, OECD, WB, IMF

The German state model follows the parliamentary-federal system In the regime, political balance is created, creating stability by the right to share and control interests and power among influential political groups, as well as when the parties need to compromise This system helps to reduce conflicts of political interest

=> Germany is one of the safest countries in the world in terms of political stability and social security Therefore, this place is considered a relatively safe environment for businesses to invest and do business

Vietnam and the EU have signed the EVFTA, opening up vast cooperation opportunities, contributing to promoting trade and investment activities for the business community and people

Over the past 45 years, Germany has always been a major trading partner of Vietnam in Europe, accounting for about 20% of Vietnam's exports to Europe and also an important transshipment gateway for Vietnamese goods to other markets in Europe

3.2 Economic

Over the years, Germany has built a modern industrial, agricultural, service and trade economy with advanced technology and high efficiency Germany is considered one of the leading industrialized countries in the world and has great potential

Within the organic food market, the demand for organic coffee in Germany continues to grow The sales volume of organic coffee increased by 14% between 2018 and 2019 The organic share in the total German coffee market reached around 4.3% in 2019

Sales of sustainably certified coffee on the rise in Germany

3.3 Social

Vietnam is Germany’s largest Robusta supplier Asia is mainly known for its Robusta production, particularly Vietnam, which is the world’s second-largest coffee producer Approximately 95% of Vietnamese coffee exports consist of Robusta coffees

On average, each German consumes 150 liters of coffee per year1 The annual demand for coffee of Germans is increasing and most Germans have a preference for coffee 85% of all Germans aged 46 and over drink coffee

63% of young Germans between the ages of 36 and 45 like to drink coffee every day

27% of elderly Germans and 17% of middle-aged Germans prefer to drink pure black coffee, without added sugar or milk

28% of people in different age groups have a preference for drinking black coffee with milk and sugar added

When it comes to social impact, German consumers care most about child labor, fair wages and good working conditions In 2019, more than 50% of German coffee consumers said they were willing to pay more for sustainably sourced coffees

Germany is the largest trading partner of most European countries The main trading partners are France, the US, the UK, Italy and the Netherlands

Germany has a high unemployment rate Germany's workforce is generally highly skilled, educated, disciplined and efficient Although the labor market is specialized due to structural problems, Germany is one of the countries with the highest wages and allowances in the world

3.4 Technological

Germany is also a world leader in the chemical industry Furthermore, among Germany’s most innovative sectors with above average growth rates are those of technologies for the use of renewable energies as well as information technology and bio-technology

Germany is well known for its advancements in the field of science and technology Globally, Germany is considered the 5th most technologically advanced nation, with expertise across multiple sectors such as engineering, medicine and infrastructure, just to name a few The country is also a leading nation in terms of information technology and has already made significant advances in the fields of AI and machine learning

Single-serve coffee machines become more popular in Germany

In recent years, the German coffee market has been dominated by sales of ground coffee, followed by whole beans and single serving methods, such as capsules and pods

Demand for whole beans and capsules in particular is growing due to the cost of ground coffee Sales of single-serve machines, such as capsule coffee machines and espresso machines, grew steadily over the period About 20% of German coffee drinkers own an

espresso machine In Germany, the use of fully automatic coffee machines has increased

by 10%

3.5 Legal

Coffee is not an import ban in Germany

However, coffee products need to comply with and meet the needs of the government Coffee products are required to have traceability, high quality, have geographical indications, enforce the EVFTA Agreement's processes, and are controlled from exporters and importers Germany has its own specific Ochratoxin A limit depending on the type of coffee (unroasted, roasted or instant) Businesses need to know the allowable residues for each type of pesticide in each type of coffee to avoid being unable to clear customs or produce but not export, for example: 1 kg of coffee beans does not contain more than 1 mg of carbofuran (contained in pesticides)

3.6 Environmental

In recent years, the German government has stepped up environmental protection campaigns, especially limiting the use of plastic bags Germans are increasingly aware of the importance of environmental protection For example, single-use coffee pods have damaging effects on the environment That is the stance the German city of Hamburg is taking, banning the capsules from council-run buildings As the first city in the world to ban coffee pods, Hamburg’s decision is part of an attempt to reduce waste and find more environmentally friendly alternatives

Therefore, businesses can create coffee packaging that is both suitable with the German consumer market culture and shows goodwill to protect the environment Instead of using plastic bags, we can replace them with boxes, glass, cardboard, metal boxes can be recycled

4 Select a method of entry and explain:

4.1 Penetration through direct exports

An Thai coffee brand has crossed the border of Vietnam and received the support of the Vietnamese community abroad as well as the loving attention of international friends

The export of coffee brings more profit, foreign currency income to invest in buying machinery and equipment to expand and improve production, thereby increasing the company's business efficiency

Participating in the coffee export business helps An Thai improve the reputation of the brand in the world market, thereby helping the company create a competitive advantage, expand the market, increase market share and profit

The export also receives support from the State and preferential policies such as investment credit policy, export credit, trade promotion as well as policies to support research and development

Since An Thai is a large corporation with strong financial resources, prestige and high market image, direct export is the method that An Thai chooses to penetrate the German market

4.2 Advantages and disadvantages of direct export

Through negotiation, direct

communication with the units that the

two sides can easily come to general

agreement, there are few

misunderstandings, so that:

- Increase profits and revenue for the

business because it minimises costs for

intermediaries

- Facilitate the promotion of the

independence of enterprises

- Be active in the consumption of goods

and products produced by the enterprise

- Timely grasp the change in demand of

- The implementation costs for the transaction are quite high so the volume

of exported goods must also compensate for the costs

- It is prone to risks because if the staff

is not qualified and experienced in handling the work, performing the contract procedures will be able to make unfortunate mistakes

- The company needs to find more partnerships, slower global expansion, and face the risk of declining sales