global strategic management enfinal individual essay

Competitors of Trung Nguyen coffee in the US market IV.. Overview of Trung Nguyen Legend Born in the middle of 1996, Trung Nguyen is a small coffee shop founded by Mr.. 6 member companie

FINAL INDIVIDUAL ESSAY

Lecturer in charge : PhD Nguyén Tién Ding Student name : Tran Thanh Thuy

Ho Chi Minh City, June 4th, 2023

Table of Content I Introduction

1 Overview of Trung Nguyen Legend 1.1 Field of activity

1.2 Product 1.3 Development history 2 Objectives of the essay II Analysis of the macro environment in America 1 Economy

2 Business environment 3 Attractiveness of US 4 Societies - Culture III Analysis of coffee competitors in US 1 Coffee market in the US

2 Competitors of Trung Nguyen coffee in the US market IV The global strategy of Trung Nguyen Coffee 1 Global ambition

2 Global positioning 3 Global business system 4, Entry strategy (entry modes) of Tring Nguyen Coffee 4.1 Export

4.2, Franchise V Conclusion References

I Introduction 1 Overview of Trung Nguyen Legend

Born in the middle of 1996, Trung Nguyen is a small coffee shop founded by Mr Dang Le Nguyen Vu in Buon Ma Thuot - the coffee capital of Vietnam Trung Nguyen main activities in the field of: production, processing, trading of coffee and franchising Trung Nguyen coffee brand Within 10 years, Trung Nguyen Coffee has gradually become one of the leading famous brands in Vietnam

6 member companies: Trung Nguyen Joint Stock Company, Trg Nguyen Instant Coffee Joint Stock Company, Trung Nguyen Coffee Company Limited, G7 Trading and Service Joint Stock Company and Vietnam Global Gateway Joint Venture Company (VGG) (bancaphetrungnguyen, n.d.)

1.1 Field of activity © Coffee production, processing and trading

The Group has typical products such as: high-class Trung Nguyen coffee (Weasel weasel coffee, Legendee weasel coffee, creative 8), roasted and ground coffee, pure coffee beans, G7 instant coffee, coffee fresh coffee Up to now, Trung Nguyen's products have been exported to more than 60 countries around the globe, typically: USA, Canada, Russia, UK, Germany, Japan (MISA AMIS, 2022)

® Franchising Trung Nguyen Franchising Joint Stock Company was established in 2011 to manage Trung Nguyen coffee space chain Pioneering in applying the franchise business model in Vietnam, Trung Nguyen currently has a network of nearly 1000 franchised cafes nationwide and 8 overseas such as: USA, Japan, Singapore , Thailand, China, Cambodia, Poland, Ukraine (academia, n.d.)

e Distribution, retail In order to deliver products to consumers, Trung Nguyen has cooperated with 3 distribution levels: wholesalers (distributors, system of large and small supermarkets), retailers (small selling points, shops selling goods) retailers, grocers) and finally consumers Trung Nguyen has also built a system of more than 1000 convenience stores and G7Mart distribution centers nationwide

1.2 Product Coffee is a drink known to help reduce fatigue and increase energy Indeed, the use of coffee is more than that, coffee can help fight liver diseases and cancer, support asthma, enhance memory, (Thanh nién, 2019),

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- Instant coffee

Ca phé Trung Nguyén cao cap Ee

Ca phé Chén weasel Ca phéchonlegend Cà phê sáng tạo 8

Dong thong thvong = _ hê Chir |, Sva House Blend

Ca phé rang ay Trung Nguyén

The No.1 Coffee

Chế | SEN 1,2,3,4,5 _ TAP DOAN CA PLE Oil WhO SANG TAO Cà phê hòa tan G7

= Siva Dac Brother a

Picture 1 Product of Trung Nguyen

Nguồn: Thông Lâm, 2022

1.3 Development history e 1996: Trung Nguyen was established in Buon Ma Thuot - the coffee capital of

Vietnam

e 1998: The first coffee shop in HCM City, starting the system of Trung Nguyen shops in the provinces

e 2001: Franchising in Japan, Singapore Announcement of the slogan "Inspire creativity"

e 2003: G7 instant coffee product was born e 2010: Trung Nguyen coffee exported to more than 60 countries and regions @ 2012: Become the most favorite coffee brand of Vietnamese consumers @ 2013: G7 celebrates its 10th anniversary, marking the 3-year milestone of

leading the market e@ 2016: Celebrating 20 years of establishment, launching Trung Nguyen Legend

Cafe ® 2018: Inauguration of World Coffee Museum in Buon Ma Thuot e 2020: Launching experience show promoting 3 coffee civilizations: Ottoman -

Roman - Zen @ 2022: Launching Zen coffee line and aiming to create "Coffee of philosophy"

In the issue of August 2022, Forbes Vietnam honored Trung Nguyen Legend as "Awake Brand" in a special article about leading F&B company brands in 2022 (Thanh Nien, 2022)

e 2023: - Opening Representative Office in Korea - Accompany to build Buon Ma Thuot City to become the Coffee City

of the world - Launched the hotel complex "La Forét en ville" and the conference

center "The world coffee center", groundbreaking for the construction of the "Loving" and "Happy" school zones in the Coffee City urban area

- Celebrating the 20th anniversary of the G7 brand conquering the world

(Trung Nguyen Coffee, n.d.) 2 Objectives of the essay

- Understanding Trung Nguyen Group - Understand the US macro environment to determine the appropriate

penetration strategy

- Analyze the global strategy of Trung Nguyen Group to see if the success and penetration strategy meets the Company's expectations

- Lessons learned from the article

Il Analysis of the macro environment in America A federal constitutional republic, the United States of America has fifty states, one federal district, and sixteen overseas territories, five of which are inhabited on a permanent basis It is the third biggest country in the world by land mass and is virtually completely on the North American continent Although New York is the largest metropolis and California is the most populated state (Alaska is the largest by mass), Washington D.C is the nation's capitol The United States is frequently seen as the world's top superpower due to its widespread impact, whether it is in politics, economics, warfare, or culture (O'Neill, 2022)

1 Economy The United States is a leading industrialized country in the world, with modern industries, agriculture and services, a strong competitive economy, the number one export power and also an import market the largest and most diversified in the world

The United States dollar (USD) is the most used currency in international transactions and the most popular reserve currency in the world, backed by advanced science and technology, superior military, confidence in the ability of the US government to repay its debt

With a gross domestic output of just about 25.5 trillion dollars in 2022, the United States possessed the largest gross domestic product in the whole planet (O'Neill, 2023)

From around 5.9 trillion dollars in 1990 to nearly 25.46 trillion dollars in 2022, the United States' GDP has about tripled (Statista Research Department, 2023)

18,100.04 japan

Germany

India

2,215.29 Canada 2,139.84 Italy 2,012.01 1,924.13

Nguồn: ONeill, 2023

Picture 2 The gross domestic product (GDP) in 2022 With its economic, scientific, technical and industrial and military might, the United States is dominating international economic and political life As a member of many international economic and financial organizations as well as organizations of the United Nations system, the US has an important position and in many places has a decisive voice

2 Business environment Setting up a company in the US is the first step to building a global brand Famous companies like Google, Apple, Facebook, Twitter, Uber, AirBNB and many more were founded in the US and then expanded globally Some other companies have their roots abroad, like Uniqlo, which, after its success in the US, has become a global brand If you are still considering investing or setting up a company in the US, here are some reasons why you should make your plan a reality

According to the latest figures from the United Nations The population of the United States currently accounts for 4.19% of the world's population The United States is ranked 3rd in the world in the ranking of the population of countries and territories (Dan sé, 2023) It creates a huge amount of demand, especially with a high average income, so spending on necessities as well as relaxation and entertainment is high In addition, the

developed economy and advanced applications of science and technology have created many great opportunities for the expansion of international business methods in the US with other countries

3 Attractiveness of US e Market

The United States is the country with the largest economy in the world with a gross domestic product of over 14 trillion USD/year, also one of the richest economies in the world with an average income of over $47,000/year person/year At the same time, the United States maintains free trade relations with 17 countries around the world and trade turnover reaches 5 trillion USD (according to 2010 statistics) This is a great opportunity for investors who want to expand trade relations with the global economy In addition, the United States is a high consumer of goods with a population of over 310 million USD, ranking third in the world (USis Group, n.d.)

Large domestic market: The United States offers investors unique opportunities whether you are selling to a single niche or all of the supply chain In the United States, everyone speaks the same language, follows the same legal system, and this single business model can reach thousands of miles away and millions of people Businesses operating in the niche US market can grow bigger, more dynamic And given the size and scope of the US economy, the opportunities for these business models are even wider

e Resources The United States has six unusually rich natural resources: a vast expanse of land, two long coastlines, a vast expanse of fertile land, abundant freshwater, vast oil and coal reserves, and a population diverse numbers (Brock, 2022)

e Labor force The United States has a highly trained and productive Workforce - a highly skilled workforce with over 40% of the population aged 24-60 having completed an education after high school, ranking second among developed countries

The US has 4,000 universities and colleges across the country with more than 800,000 international students (Daniel, 2021) Community colleges and technical schools are committed to training people at all levels No matter what industry your business is in, you can easily recruit qualified and skilled personnel

e Political stability

America is a politically stable country This is what makes the US the most attractive market for venture capitalists and private equity funds, according to the well-known Ernst and Young firm

e Ease of doing business Out of all the countries involved in international trade, the US have a regulatory environment is more conducive to the starting and operation of a local firm is ranked sixth for ease of doing business (The World Bank, n.d.)

The US now has more than 50 Trade and Investment Framework Agreements (TIFAs) and more than 40 bilateral investment treaties (BITs) with nations across the world to expand trade connections, safeguard foreign investment interests, and support exports and market-oriented policies Additionally, the government offers grants, loans, grants, tax credits, tax exemptions, and other incentives to help start-ups and current businesses grow (acclime, n.d.)

e Country risks Credit rating agency Moody's released a report in which it said that inflation and political risks will hold back economic growth in Latin America until 2023

According to Moody's, the ongoing crisis in the supply chain is accelerating inflation and reducing the purchasing power of Latin American consumers This forced governments to take measures to adjust monetary policy and tighten credit conditions, causing financial markets to face many fluctuations (Ngoc Tung, 2022)

America in recent years has witnessed many changes in the political arena: extreme political polarization, divisions of values, the state of democracy in crisis as well as its sustainability in the world background of events in the US election 2020 (TS LE THI THU MAI & TS PHAN DUY ANH, 2023)

Global variables including the continuing epidemic, the Russian war with Ukraine, and potential shutdowns in China will have an influence on US economic prospects Additionally, the longer inflation is high, the greater the chance that inflation expectations will rise, which will have a negative feedback effect on wages and prices (Hodge, 2022),

Federal funds rate Real GDP growth

(percent) (Q/Q, annualized, percent)

Source: IMF staff estimations IM F

Source: IMF staff estimations Picture 3 Tackling stubborn inflation

4 Societies - Culture e Residential

The US is the third most populous country in the world after China and India The natural population growth rate in recent years is 0.91%, the population density is unevenly distributed, mainly concentrated in big cities

11 The population composition of the US is very diverse, originating from all over the world, the number of Vietnamese living in the range is also quite large, about 2 million people, living mainly in the West of the United States

Because of the diversity of ethnic groups, it also entails religious diversity English is used as the official language of the United States However, in some southern states, there are still a few people who speak Spanish

e American way of life Americans are very "playable" and buy ready-made when they grow up, but there are two things that Americans save a lot: labor and time Americans are very conscious of respecting the law Oil can easily be offered at ht In terms of intelligence, Americans are considered to be open, straightforward, warm-hearted and easy to make friends Americans are not vulnerable to criticism, shunning or opposing rulers because they attach great importance to the right to freedom of speech

e The needs and tastes of the people Americans are considered the largest consumer base in industrialized countries In addition, the US mayor is also very diverse with many classes of population, not too strict about quality

IH Analysis of coffee competitors in US 1 Coffee market in the US

Most Americans have a habit of drinking coffee and consider coffee as a very important drink in daily life The US is the largest coffee consumer and importer in the world, the US does not grow coffee, so all coffee consumed in the US is imported

According to the National Coffee Association of America (NCA), up to 63% of adults consume coffee daily, of which 59% are specialty coffees, up sharply from 9% in 1999, and is expected to increase to 61% by 2019, the customer driving this increase is the young In addition, the development of small coffee shops has had a strong influence in driving demand for specialty coffee (Vietnam Ministry of Industry and Trade, 2019)

Coffee is the most loved beverage in the United States, playing a very important role in the economy According to statistics, in 2015, the economic impact of the coffee industry on the United States was 225.2 billion USD, of which consumers spent 74.2 billion USD on coffee, the industry also generated nearly 1 million USD 7 million jobs and contribute up to $28 billion in taxes According to the United States Department of Agriculture, the United States is the second largest importer of coffee in the world, after the