Strategies to improve bussiness performance of the highlands

Lunghwa University of Science and Technology Department of Business Administration Thesis for a Master’s Degree STRATEGIES TO IMPROVE BUSSINESS PERFORMANCE OF THE HIGHLANDS Researcher:

Lunghwa University of Science and Technology Department of Business Administration

Thesis for a Master’s Degree

STRATEGIES TO IMPROVE BUSSINESS PERFORMANCE OF THE HIGHLANDS

Researcher: Pham Khac Hieu Supervisor: Associate Professor Ya- Chi Huang

July 2018

Lunghwa University of Science and Technology Approval Certificate of Master's Degree Examination Board

This is to certify that the Master’s Degree Examinations Board has approved the thesis STRATEGIES TO IMPROVE BUSSINESS PERFORMANCE OF THE HIGHLANDS published by Mr Pham Khac Hieu in the Master Program of Graduate School of Department of Business Administration

Master’s Degree Examination Board

Board Members：

Advisors： Associate Professor Ya- Chi Huang

Chair：

Date： 2018 ／ 07 ／

ABSTRACT

Thesis Title：STRATEGIES TO IMPROVE BUSSINESS PERFORMANCE OF THE

HIGHLANDS

Pages：77

University：Lunghwa University of Science and Technology

Graduate School：Department of Business Administration

Date：July, 2018 Degree：Master

Researcher：Pham Khac Hieu

Advisor：Associate Professor Ya- Chi Huang

Keywords：Sales performance, Strategy,

This thesis is dedicated to investigate the factors affecting the business performance

of Highlands and provide relevant potential solutions to improve the business performance of Highlands

ACKNOWLEDGEMENT

It is a great pleasure for me to work with this dissertation I would especially like

to thank all teachers, professors for all knowledge, skills and information I received It

is very wonderful chance to work with so excellent and enthusiastic professors

I am also very grateful to my tutor, Associate Professor Ya- Chi Huang, for his support I appreciate all his time and efforts to encourage and guide me during my dissertation writing

I would like to thank my colleagues, my customers for helping me to support me information to complete this dissertation and answer the questionnaire for my research This thesis cannot be done without their help

Finally, I would like to thank and dedicate this dissertation to my family for the unconditional support, who consistency motivated me to complete the thesis

Best regards,

Thank you!

Pham Khac Hieu

TABLES OF CONTENTS

ABSTRACT iii

ACKNOWLEDGEMENT iiv

TABLES OF CONTENTS v

LIST OF TABLES vii

LIST OF FIGURES vii

1 INTRODUCTION 1

1.1 Rationale of the study topic of thesis 1

1.2 Objectives of thesis 1

1.3 Study questions 2

1.4 Research Methodologies and Data 2

1.4.1 Research process 2

1.4.2 Data 3

1.4.3 Handling collected data 3

1.5 Plan of thesis 3

2 BACKGROUND OF THE HIGHLANDS AND ITS CONTEXTS 5

2.1 Introduction 5

2.2 Overview of Highlands Company 5

2.2.1 Historical development 5

2.2.2 Vision and mission 7

2.2.3 Products and Customer segmentation 7

2.2.4 Business performance 9

2.3 Business environment 10

2.3.1 Internal analysis 10

2.3.2 External analysis 13

2.4 Chapter conclusion 16

3 LITERATURE REVIEWS 18

3.1 Strategy concept and definition 18

3.2 Strategy formulation 18

3.3 Strategy process 19

2.3.1 Strategy process and stages 19

2.3.2 Hierarchy of strategy 21

2.3.3 How to make business strategy to perform 21

3.4 Factors affecting the Strategy making 23

3.4.1 Keys to successful global strategy 23

3.5.2 Developing the core strategy 26

3.5 Conclusion 26

4 DATA ANALYSIS RESULTS AND DISCUSSIONS 27

4.1 Introduction 27

4.2 Survey Results 28

4.2.1 Profile of responders 28

4.2.2 Customer satisfaction assessment 28

4.2.3 Staff satisfaction/assessment 33

4.2.4 Manager satisfaction 35

4.3 Finding of survey 42

4.3.1 Findings from the overviews with staffs 42

4.3.2 Findings from the Survey with managers 43

4.3.3 Findings from the overview of customers 43

4.3.4 SWOT analysis 45

4.4 Conclusion 52

5 RECOMMENDATIONS TO HIGHLANDS TO IMPROVE ITS BUSINESS PERFORMANCE 54 5.1 Summary of challenges facing Highlands 54

5.2 Strategy to enhance business performance 54

5.2.1 Conducting staff retention programs to keep highly qualified staffs and stabilize human resources 54

5.2.2 Signing option contracts with suppliers to keep input costs under control 55

5.2.3 Renting additional parking spaces to increase the number of customers can be served at a time 56

5.2.4 Creating additional marks in decorating style to renew image 56

5.2.5 Conducting regular working climate surveys to understand potential issues, recognize quickly problems to be addressed 57

5.2.6 Marketing development for lauching a new product line 57

5.3 Limits of thesis 58

5.4 Conclusion 59

LIST OF REFERENCES 60

LIST OF TABLES

Table 3-1: SWOT matrix (Winer, 2006) 23

Table 4-1: Profile of responders 28

Table 4-2: Customer satisfaction 28

Table 4-3: Frequent attendance of customers 32

Table 4-4: The number of years staffs work at Highlands 35

LIST OF FIGURES Figure 2-1: Organizational structure 6

Figure 2-2: Production lines 8

Figure 2-3: Porter’s value chain 10

Figure 2-4 Porter’s five forces 13

Figure 3-1: The New Business HR Agenda 22

Figure 4-1: Customers’ assessment on Product diversification 29

Figure 4-2: Customers’ assessment on theme 30

Figure 4-3: Customers’ assessment on product quality 30

Figure 4-4: Customers’ assessment on rush-hour service quality 31

Figure 4-5: Customers’ assessment on promotional activities 31

Figure 4-6: Customers’ assessment on comparative advantage 32

Figure 4-7: The compensation policy valuation 33

Figure 4-8: The working environment 34

Figure 4-9: Assessment on Training 34

Figure 4-10: Evaluation of the training program for the management 39

Figure 4-11: Evaluation of remunerations 40

Figure 4-12: Assessment of the factors affecting the operation of the Highlands 41

Figure 4-13: Evaluate the level of adaptation to highlands programs 41 Figure 4-14: SWOT analysis 45 Figure 4-15 SO, WO, ST, WT strategies 52

1.INTRODUCTION

1.1 Rationale of the study topic of thesis

Highlands is a business operating in the cafeteria industry Highlands has a number

of strengths First, Highlands stores is mostly located at center of city or famous shopping malls, crowded areas Second, Highlands also has a flexible shipping service combinated with Delivery now app Third, coffee bean materials are purchased from the original and qualified coffee farms Finally, the strength of Highlands comes from its bargaining power; the ability of Highlands to exert influence over suppliers in a negotiation in order to achieve a deal which is favorable to themselves as every year Highlands collects and purchase a lot of input stuffs (Dũng, 2015; Tran, 2016)

However, recent development of the market shows a number of threats to the company including growing competitors, growing entrants, brand loyalty, competitive price, increasing cost of rent, high rate of staff turnover, etc That makes changes in strategy to keep up with business environment

Business strategy plays an important part in the survival and development of each business In competitive market, good strategies can help businesses more successful than many competitors and create its place in the marketplace The purpose of this study

is to learn about the business strategies of specific businesses based on the study of Highlands To evaluate strategies, finding strengths and weaknesses, and ultimately developing strategies to improve the company's strategy play important role A good business strategy will help the company capture the opportunities as well as combat threat in order to develop business Besides, Highlands should learn the lessons of business strategies from domestic and foreign enterprises to improve and develop business strategies of enterprises This is the reason that I choose the topic of “Strategies

to improve business performance of the Highlands” for my thesis

1.2 Objectives of thesis

The primary objective of this thesis is to investigate the current performance of Highlands company and recommend relevant solutions to improve the performance

1.3 Study questions

This thesis will discuss the questions below:

 What are strengths and weakness of Highlands?

 What are opportunities and threats of Highlands?

 How to improve the performance of Highlands?

1.4 Research Methodologies and Data

1.4.1 Research process

The thesis is going to use Data Collection, Comparison, Qualitative, and Quantitative Analysis

 Information are collected to get background; literature review to support analysis

 Comparison experiences of e-commerce from some countries, combine with the facts in Vietnam to provide optimal solutions

 Qualitative analysis: Indicating to the written data is known as qualitative approach which collects, describes, and analyses the characteristic of the subject matter This form of method specializes to empirical reasoning and theoretical creation which used interpretation outlook and does not prove anything but explaining through the tectonic theory in the research Although the qualitative method can be carried out via the survey, the inquiry must be in open question

 Quantitative analysis: refers to the process of gathering, analyzing and presenting the information from raw data in any phenomenal issues of the research that mainly related to numbers The quantitative inquiry is based mainly on the theories which can be demonstrated in practice and by subjective aspect because of the principle in numbers In this case, the quantitative research amplified mostly to the closed questionnaire in the survey The statistical result is used to test the truly hypothesizes through table, chart, and graph indications

1.4.2 Data

This thesis will get data from two sources, primary and secondary

1.4.2.1 Primary data

Data can be collected via 3 ways:

 In-depth interviews with customers to identify customer demands and customer impressions on the quality of Highlands;

 Direct interview with internal employees to get overall picture on the match of current capacity with current and future requirements to Highlands;

 Survey by questionnaire: Use a electronic form sent to a large number of targeted customers to gather their assessment about the quality of product and service at Highlands coffee

1.4.2.2 Secondary data

 Reports published by the Government regulatory bodies;

 Research reports from a group of students in international school- VNU

1.4.2.3 Handling collected data

Using statistical and synthesis methods and Microsoft Excel software

1.5 Plan of thesis

Date Tasks

11/2017 Proposal submission

12/2017 Tutor comments proposal

4/2018 First Draft of thesis

5/2018 Second Draft of thesis

5/2018 Turn in final thesis 6/2018 Thesis defense

2 BACKGROUND OF THE HIGHLANDS

AND ITS CONTEXTS

2.1 Introduction

In this chapter, we are going to introduce a coffee brand in Vietnam It is, Highlands which embraced Vietnamese traditional decorations and favor coffee Some aspects we are going to discuss include the establishment of Highlands chain, markets and customers target, the structure of organization and some emphasized performance

2.2 Overview of Highlands Company

2.2.1 Historical development

In the late 1980s and early 1990s, David Thai, a founder of Highlands, made a decision on opening a coffee chain as he found out the expansion of the Starbucks coffee chain from a small company in his hometown of Seattle to a multinational corporation Highlands is the first private company registered in Vietnam, the two years later, the company legally recognized as a joint stock company (Wikipedia, 2017)

The products of Highlands are just sold in supermarkets, hotels, restaurants, and cafés in the time of its foundation In 2002, the first Highlands shop was established in Notre-Dame Cathedral in Ho Chi Minh City 2009 is a milestone year to Highlands as it marked a strong development; the increase up to 80 coffee shops in six cities and provinces across Vietnam such as Hanoi, Ho Chi Minh City, Hai Phong, Da Nang, Vung Tau and Dong Nai is a valid evidence

Until May 2010, Highlands focus on 5 blended roast, ground and neat coffee beans included Heritage Blend, Traditional Blend, Gourmet Blend, Moka Blend, Culi Supreme, and

4 espressos in ground and pure beans: Full City Roast, Arabica Supreme, a water-process DeCaf espresso produced at their in-house water process decaffeination facility, and Cinnamon Roast espresso The espresso line also included ESE-compatible 45mm espresso

pods packaged in Malaysia In December 2009 the company introduced a Ready-To-Drink (RTD) "Iced Coffee" in an 8-ounce can, in two versions, one labeled "with Milk" and the other labeled "Black"

In 2011, Highlands purchased the Pho 24 from Ly Qui Trung for about 20 million USD, and a year after, Highlands sold 50% of its shares to Jollibee Worldwide for 25 million USD with the purpose of raising customer’ brand awareness internationally

Additional to traditional coffee products, Highlands researched and developed new products such as GreeKe products in 2014 and Tea-Milktea products in 2015

Figure Error! No text of specified style in document.-1: Organizational structure

District ManagermentStore Directors 1

Staff

Securities

Director n

2.2.2 Vision and mission

Highlands’s vision is to become Vietnam’s favorite coffee and proudly share this with the world Its ambition is to become a Vietnamese champion coffee brand and develop beyond domestic market This is one of the reason why Highlands sold a half of stock to Jollibee to develop the brand to the world and Philippine is the first country Jollibee said that they would add products of Highlands in the other systems of the Jollibee restaurants in Asia besides continuing to develop this coffee chain in Vietnam Because Vietnamese coffee has gained worldwide recognition for top quality, it will help to be a significant added value for Jollibee.This is extremely a strong movement for Highlands in the future

Highlands’s mission is to champion deliciously affordable modern Vietnamese coffee and café lifestyle experience Indeed, Highlands always do research and develop many kinds of products and target to each customer segmentation Coffee chains were located in commercial centers or in center of the cities with luxurious style that helps them easily approach many kinds of customers (Highlands, 2014)

2.2.3 Products and Customer segmentation

Highland coffee offers diversified menu which consists of bread, pho, yogurt shake, ice blender, etc besides catering coffee and other special drinks The coffee beans used

by Highlands are Arabica and Robusta in that Robusta is the type coffee bean planted in Vietnam because of the features about terrain, weather and altitude The other one requires being planted in higher places and cooler and needs longer time to get ripe and although it is less in quantity, it has more flavor than Robusta Therefore, there is no surprise when Arabica ‘s price is twice higher than the price of Robusta

Moreover, Highlands owns two famous favors which are international and traditional By combining two features, Highlands left an impression on customers by outstanding formulas:

 Espresso- Full City Roast

 Espresso- cinnamon Roast

 Espresso- Arabica Supreme

 Espresso- Decaffeinated

The process of collecting coffee beans is careful and preserved in right way especially; the packing process is also observed closely, and the product packaging has designed to keep the fresh of coffee (CRAM, 2013)

Figure Error! No text of specified style in document.-2: Production lines

(Source: Highlands, 2014) The targeted customers of Highlands is middle classes who are office staffs and the active young generation This is one of reasons to help the research and development team in Highlandss find the appropriate locations that usually located at center of city or famous shopping malls, crowded areas When coming in Highlands stores in luxury buildings such as Vincom, Parkson, customers may be attracted by Highlands decoration that is designed with wooden floor separating from the surrounding area The first impression is a luxury space with two main colors: red and black That the red lanterns are strongly attached to Highlands store network creates a warmness and orient Moreover, the indoor stores are also equipped with high tables with swivel chairs like bar and faced street to serve those wishing to watch the busy streets in Vietnam

Highlands business

Caramel Phin Freeze

Green tea Freeze

Other drinks

Espresso,cappuccino & latte

Tea, juice

Food

Banh mi, cake

Packaged coffee

Roast & Ground Coffee

Ready-to-drink

Besides Vietnamese targeted customers, Highlands also aims at customer groups which are young businesses, the foreigner living and working in Vietnam and who used

to study and live abroad so they are familiar with the style of European-American like drinking coffee at a chic restaurant and enjoying coffee with pastry-the Western style, and Highlands wants to bring them an interesting relax time with the style of the place they used to live Additionally, Highlands put emphasis on the big white umbrellas in front of stores which reminds of outdoor coffee shops in Italia or France

In order to respond the demand of customers, the allocation of different areas of Highlands is noticeable near the tall buildings or universities Furthermore, that the preparation counter is equipped with modern coffeemakers makes the area look more professional and formal

In 2011, Highlands purchased Pho 24 from Ly Qui Trung for an estimated 20 million USD The next year, that Jollibee Group of the Philippines spent up to $25 million buying Highlands is an noticeable merge This has brought more opportunities to promote Highlands not just in local country but all over the world In the merge, it is win- win as on one hands this will be a significant added value for Jollibee; on the others hands Vietnamese coffee has gained worldwide recognition for top quality The evidence is that after buying Highlands, Jollibee also integrated this coffee brand in its restaurant chain outside Vietnam Moreover, Highlands has taken big steps in the Philippines ever since, there will have a lot of new shop at Eton Emerald Lofts in

Ortigas, Timog and Katipunan Avenues in Quezon City and Pioneer Road, Shaw Boulevard in Mandaluyong (Thắng, 2011)

In March 2012, under a partnership with Philippine Internet café company Digital Paradise, the first hybrid Highlands/Netopia internet café and coffee shop was opened in the Philippines Beside traditional coffee products, Highlands researched and developed new products such as GreeKe products in 2014 and Tea-Milktea products in 2015 (Essinger J, and Rosen J, 1991), (Website, Highlands, 2014), (Lộc, n.d.)

2.3 Business environment

2.3.1 Internal analysis

The Porter’ value chain is a good framework to analyze internal resources, capabilities, and competences The Porter’s value chain model is are showed in the picture below

Figure Error! No text of specified style in document.-3: Porter’s value chain

Porter developed the value chain to identify which activities within the firm were contributing to a competitive advantage and which were not The approach involves distribution the firm into five 'primary' and four 'support' activities, and then considers each factor to see if they give a cost advantage or quality advantage (Porter, 2012)

The components of Porter’ value chain model

The primary activities: is the list of activities including inbound logistics,

operations, outbound logistics, marketing and sales, service

Inbound logistics – is the process of receiving, storing and handling raw material

inputs For example, a just-in-time stock system could give a cost advantage Coffee beans are transported from Dac Lac, Lam Dong, and Buon Ma Thuot to the Highlands warehouse for storage and distribution to small businesses

Operations - transformation of the raw materials into finished goods and services

The beans after being imported from the Highlands will be processed through the production line into coffee powder and grains and discarded for distribution to domestic chains and partially packaged for export

Outbound logistics - storing, distributing and delivering finished goods to customers

Highlands uses a multi-channel delivery method that uses two or more different distribution systems in parallel to cover the market, targeting the best possible target customers Aside from distributing products (coffee powder and coffee bean) to Highlands shops, highlands are also looking to third parties: retail chains such as Vinmart, Coopmart, Lotte mart Even more impressive, with the merger of the Jollibee Group, the highlands have expanded their distribution network not only at home and

abroad

Marketing and sales: Highlands marketing strategies utilize the edge with other

companies

 Eye catching decoration: The Highlands shop is decorated in a mixture of

Eastern culture traditional Vietnamese and Western culture to create a sense of closeness bringing highland breath between the pace of modern cities

 Merger: Merging with Jollibee has created a highlands attraction for local media and customer attention

 Purchasing Vietnamese raw materials: Highlands to the high value and the spirit

of writing using the Vietnamese coffee beans, that has hit the national interest of the Vietnamese people

 Service: Provides online ordering through App Deliverynow, a self-service method that uses a service bell when ordering drinks or food in a restaurant

Secondary activities include the following activities such as firm infrastructure, technology development, human resources development, procurement

Firm infrastructure:

 Finance: With the investment capital, the Highlands are clearly the largest in the coffee chain Financial capacity is a great advantage to help the Highlands occupy beautiful sites and rapidly expand its chain stores

 Location: The Highlands locations are highly homogenous, all in good locations or at the fisrt floor of office buildings This helps the customers to clearly and uniquely identify the brand image of the Highlands

Technology development: Highlands uses self-service through high technology

When employees complete the order, the bell will ring and customers will automatically pick up

Human resources development: Highlands invests heavily in training programs for

both experienced and inexperienced staffs to match the company's unique working environment

Procurement: obtaining raw materials, designing products, building manufacturing

facilities, developing co-operative agreements, providing customer services

In conclusion, from the analysis of Highlands chain, it can be seen that Highlands has strength at operation Although it has a lot of stores throughout Hanoi and Ho Chi Minh city, it still manages successfully in operation from purchasing input materials to selling them in the market On the other hand, with the scale of operation, Highlands

finds difficult in keeping loyal customers and attracting to the new ones while it has to compete against to entrances and other famous brand names

Highlands has following strength:

 Be able to analyze both the behavior of costs as well as the existing and potential sources of differentiation

 Be able to identify and address all activities that are not adding value to improve

so they do add value or outsourced if this is not possible (i.e., activities such as guarding, parking control)

 Be able to emphasize the importance of (re)grouping functions into activities to produce, market, deliver and support products, to think about relationships between activities and to link the value chain to the understanding of an organization's competitive position

2.3.2 External analysis

Figure Error! No text of specified style in document.-4 Porter’s five forces

Rivalry in the industry

 Growing number of competitors between Viet Nam companies

o Trung Nguyen: Besides delicious drinks, the space is cozy rather than other high-class coffee Moreover, Trung Nguyen owns a coffee farm to supply raw materials; therefore, they ensure transportation costs and purchase costs are the possible lowest (Report, 2013)

o Cong cafe: the unique style looks back on the old years by the ways use

"đồng nát" furniture to decorate By combination of traditional and old elements are extremely attraction for customers (Bowyer, 2016)

o The coffee house: The coffee house concept in every store must be an integral part of the community Therefore, in their déign, Coffee House always tries to bring the localism to each of its stores and make customers to feel that they belong to this place from the first time coming

 Growing entrants from foreign

o Starbucks: They have an available number of customers who can tap to become key customers because this client groups know Starbuck before this brand come to Viet Nam market This client group includes foreigners living and working in Vietnam, oversea students, and foreign tourists who have used Starbucks coffee in foreign This is not large group but they have stable income to be easy will become a regular customer at Starbucks (website s , 2016)

o The Coffee Bean & Tea Leaf: Carrying out the care of your customers in any way through programs that link and support the image of Vietnam Typically, it is the cooperation with Vietnamese designers to change the costumes for employees in the whole chain, change the menu, suitable for more pure Vietnamese, especially with more reasonable price (website T c., n.d.)

Potential of new entrants into the industry

The coffee industry is always an attractive market for many investors in Vietnam Besides the business services, there are many potential companies that can easily expand their fields of coffee

Nescaffe of Nestle

It is the leading instant coffee brand in the world with 70 years of history In Vietnam, this brand has become familiar to most people and it is one of the brands with high market share in Vietnam At the moment, Nescafe has a factory producing instant coffee with a capacity of 1000 tons per year which allows the company to meet the

needs of the consumer (tư, 2010)

Vinacafe Bien Hoa Joint Stock Company

They started production in 1979, with the experience of its own they make up a high market share in Vietnam Vinacafe also has instant coffee factory with the capacity of

3000 tons per year The company is the largest of producer and market leader in instant coffee production technology (Tư, 2011)

Power of suppliers

Highlands set their belief in giving customers the most exquisite experience of coffee Therefore, all stages are strictly implemented and standardized Highlands also select the best seeds With a commitment to quality that begins with the purchase of coffee beans, Highlands only works with reputable suppliers Because there are many suppliers in the market, the supplies are plenty, and Highlands can select the best sources Highlands have higher power to suppliers in negotiating business supplies contracts Highlands is not dependent to any supplier

Power of customers

Highlands always focuses on enjoying the cafe atmosphere that bring to customer comfortable and inspiration for them For young people need a place for meetings, group meetings or appointments, Highlands is an ideal place for many clients Moreover, young customers also catch up trends easily and love creative innovations This is the reason why Highland need to care about the power of customers that is the ability customers have to drive prices down It is affected by how many buyers or

customers a company has, how significant each customer is, and how much it would cost a customer to switch from one company to another

Threat of substitute products

Substitute products are one of the important factors affecting the process of consuming products of the business The advance technology will create the ability to increase the number of alternative products In order to reduce the impact of substitute products, the company need to have specific solutions such as: invest in technology innovation to improve the quality of products and compete with alternative products, always pay attention to the differentiation of products or promote the alternative products stronger (Modorintelligence, 2018)

The women always be attractive by fruit drinks because vitamins and juices are a great option for them who do not have time or condition to eat enough greens or fruits

to ensure adequate nutrition This is also a good alternative for those who do not like to eat vegetables directly This beverage is very popular and a potential substitute product (H.Case, 2017)

In conclusion, the analysis shows that Highlands faces many threats from growing competition (i.e., from Trung Nguyen, Cong, etc.), from increasing number of foreign entrants (Starbucks, The Coffee Bean & Tea Leaf, Letteria), from substitute products (i.e., Nescaffe, Ding tea, Tocotoco, etc.) However, Highlands has many opportunities to grow The first is growing demands accompanied growing young customers The second is the higher living standards would lead to higher demands of relax spaces The third is Highlands places often close to business and residential areas, thus receive many customers Those opportunities will keep Highlands up with the competition

2.4 Conclusion

In general, Highlands possesses the elements to make the success of a Vietnamese brand The company has been successful for some factors such as good customer care services, the use of Vietnamese coffee beans available in Vietnam, or the creation of a shop decoration which combines Eastern with West and as some of the points mentioned above, Highlands increasingly proves itself as a big player in the competitive

beverage market In addition, with ambition to bring its brand to customers not only in the country but also abroad, Highlands has caught up with the Jollibee corporation to realize their dreams However, there are still some difficulties ahead such as the participation of startups with modern caffeine technology and competitive prices, or competition with the longer coffee companies like Trung Nguyen These are the challenges that Highland must address and deal with

3 LITERATURE REVIEWS

3.1 Strategy concept and definition

There are many definitions of Strategy

L.J Boujeios defines strategy as follow “the concepts of strategy and environment can be achieved by categorizing environment into its objective and perceived states, and

by subdividing strategy according to content (outcomes) or process “ (L J Bourgeois, 1980) Henry Minzeberg contended that “By defining a strategy as “a pattern in a stream of decisions,” we are able to research strategy formation in a broad descriptive context Specifically, we can study both strategies that were intended and those that were realized despite intentions” (Mintzberg, 1978)

Whenever a business enterprise is established, it either explicitly or implicitly employs a particular business model that describes the design or architecture of the value creation, delivery, and capture mechanisms it employs The essence of a business model is in defining the manner by which the enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit It reflects the significance of business management model connect with the business strategy

Business strategy can be defined as “a plan, method, or series of maneuvers or stratagems for obtaining a specific goal or result” (Toni-Matti Karjalainen, 2011, p 77)

3.2 Strategy formulation

Strategy formation can be considered a conscious process through which a future plan is created and then acted upon ( (Banbury, 1994, pp 251-69).; (Al-Thani, 2011, pp 341-62); (Jeffrey G Covin, 1997, pp 189-209) , which is not to suggest that it is independent of strategy implementation ( (Mintzberg, The design school: Reconsidering the basic premises of strategic management, Strategic Management Journal 11, 1990,

pp 171-95).; (Frank.V.Cespedes, 2010, pp 135-60) Research has long since recognized that strategy formation is a process founded upon a pattern or stream of

decisions ( (McHugh, 1985, pp 160-97) reflecting phases of identification, development and selection.( (Charles.R.Schwenk, 1995, pp 471-93)

3.3 Strategy process

Most strategy process typologies such as this (for instance, Gerbing et al.’s study (1994 cited in Morgan et al., Morgan R E., McGuinnes T and Thorpe E R (2000) The contribution of marketing to business strategy formation: a perspective on business performance Gains, Journal of Strategic Marketing (Robert E Morgan, The contribution of marketing to business strategy formation: a perspective on business performance gains, Journal of Strategy Marketing 8, 2011, pp 341-62) , this evaluating administration support in technique development) embrace the supposition of decision rationality where a methodical process is followed in setting up an intelligent and consecutive example of choices

In addition, strategy formation refers to the setting of objectives and the investigations that underline the generation, assessment and collection of strategies essential to accomplish these organizational objectives Therefore, strategy formation is concerned with both the allocation of resources and the development of organizational processes necessary to achieve the long-term goals of the organization ( (Waters, 1995) Fredrickson (Fredrickson, 1984, pp 399-423) considered strategy formation in terms of the comprehensiveness of the forms included and portrayed it as the ‘extent to which an organization endeavors to be comprehensive or comprehensive in making and integrating strategic decisions’ strategy’ A firm's business procedure is intended to include the ideal designation of its assets keeping in mind the end goal Simply put, a firm’s business methodology is implied to include the ideal allotment of its assets in arrange to accomplish a competitive advantage (Fulop, 1999)

3.3.1 Strategy process and stages

Strategy process is concerned with the how, who and when The strategy process looks at how it is made, analyzed, created, applied and accomplished ‘Who’ means who is complicated in the strategy process and ‘when’ refers to when the essential

activities need to take place Strategy content can be focus on in terms of a product of the strategy process – this is what is, or should be, the plan for the company Strategy context is the set of circumstances under which the both the strategy process and the strategy content are resolutely decided It can be looked at as the ‘where’ of plan – where being which firm and which environment

Meanwhile, there are also three stages of strategy that can help business to make use of the process more professionally: evaluation, development and application (De Wit, 1998) argue that the foregoing are not period, segment or factors of the strategy process that can be understood in separation; all these isolation phases are powerfully interconnected and they are always overlapping The nature of the economic and noneconomic construction it refers to make to its shareholders, employees, customers, and organizations In an organization of any size or variety, 'corporate strategy' usually affect to the whole company, while 'business strategy, ' less wide-raging, explain the select of product or service and market of individual enterprises within the firm Business strategy, that is, is the purpose of how a company will take part in a given business and situation itself among its competitors Corporate strategy defines the businesses in which a company will compete, preferably in a way that concentration sources to change distinctive capability into competitive advantage Both are product of a continuous procedure of strategic administration that we will later analyze in detail The strategic decision construction to this model is one that is affective of long stage of time, influences the enterprises in many variety ways, and supports and obligate a important point of its resources to the expected results The model resulting from a cycle of such resolution will probably define the central character and illustration of a business, the separately it has for its members and various publics, and the position it will live in its industry and markets It will permit the specification of particular objectives to be accomplished through a timed arrangement

of investment and execution decisions and will govern directly the deployment or redeployment of resources to make these decisions effective

3.3.2 Hierarchy of strategy

A business normally considers a hierarchy of strategy There is, first of all, a strategy for the entire enterprises which covers all its business units and this is referred to as corporate strategy There is a strategy for each individual business the company has diversified into and this is known as business strategy Then, there is a strategy for each important occupation unit within a business (functional strategy) And, finally, there are still limited plan for simply operating units – plants, sales districts and regions, and sector within utility areas, which are commonly called operating strategy (Strickland, 1996)

The corporate, business and functional strategy hierarchy has been created as a useful structure within which to circumstantial argument of approach issues within enterprises (Hill, 1998; Baylis, 1997)

Having express briefly characteristic of business strategy, it is appropriate here to discuss about the most important strategy in business model - HR strategy

3.3.3 How to make business strategy to perform

According to Ap Eigenhuis (Ap Eigenhuis, 2012), business manager need to understand the relationship between business strategy, enterprises and people to connect them to make a high-performing company The connection would help to align all resources to add value to the organization

The work to make business strategy to perform include nine sections:

Figure Error! No text of specified style in document.-5: The New Business HR

Agenda

An other way to make business strategy is to using SWOT ANALYSIS:

SWOT Analysis is one of many strategic tools using to analaysing four aspects of

any projects They are strenghth, weakness, opportunities and threat

ƒ Strengths are internal attributes of the organization that are helpful to the

achievement of the objective

ƒ Weaknesses are internal attributes of the organization that are harmful to the

achievement of the objective

ƒ Opportunities are external conditions that are helpful to the achievement of the

objective

ƒ Threats are external conditions that are harmful to the achievement of the

objective

In theory, SWOTs are used as effective tools to produce possible strategies, by

asking and answering the following four questions numerous times:

ƒ How can we Use each Strength?

ƒ How can we Stop each Weakness?

ƒ How can we Exploit each Opportunity?

ƒ How can we Defend against each Threat?

To find out the full benefits of SWOT analysis, it is necessary to use this tool in the

right way Firstly, the analysis has to collect enough usefull information that helps in

Section 4:

Strateg framework

Section 5:

Aligned and lean organizatio n

Section 6:

performing empowere

High-d teams

Section 7:

Coaching:

develop yourself and others

to win

Section 8:

Create a winning organizatio nal climate

Section 9: Deliver results and reward

decision making Consequently, laundry-lists of strengths, weaknesses, etc are not in themselves very useful It is only when the potential implications of this information on the organization/discipline are assessed that meaningful analysis emerges Secondly, it

is more useful to look at both the strengths and weaknesses originating within (i.e., internal to) the organization For example, what do we do better than anyone else, what/where could we improve, what are others likely to see as weakness? On the other hands, opportunities and threats should be externally focused i.e., what trends could you take advantage of, how can you turn your strengths into opportunities, what trends could

do you harm? (Mindtools, 2006)

Table Error! No text of specified style in document.-1: SWOT matrix (Winer, 2006)

Helpful

to achieving the objective

Harmful

to achieving the objective

Internal (attributes of the

organisation) Strengths Weaknesses

External (attributes of the

environment) Opportunities Threats

3.4 Factors affecting the Strategy making

3.4.1 Keys to successful global strategy

Adapting a global strategy isn't a simple undertaking, however numerous would try

to apply it There are numerous measurements and environmental aspects to be considered different creators have created typologies of worldwide system that can be separated into three primary classes

 Focus on the organization’s generic strategies and its competitive positioning

as the sources of competitive advantage (Porter, 1990) As indicated by this school of though, it is the capacity of the business to choose the fitting nonexclusive methodology for its industry, and to arrange its esteem including chain in help of it, which will create upper hand Strategic fits must

be made amongst opportunities and dangers in nature and qualities and shortcomings of the business itself

 Focus on assets, capacities and capabilities as sources manages predominant execution (De Wit, 1998) (Porter, 1990) Organizations are seen as open frameworks associating with their surroundings to obtain assets and convey yields (items) Superior execution depends on the capacity of the business to create center skills which are not controlled by its rivals, and which make apparent advantages for buyers

• Focus on coordination and incorporation of topographically scattered tasks in the quest for worldwide intensity (Yip, 1995) (Bartlett, 2004)) There are critical points of interest to be picked up from the worldwide degree, setup and coordination of the association's universal activities As indicated by (Yip, 1995)the worldwide methodology must be custom-made to coordinate every one of the globalization drivers

in the business It is against the possibility of worldwide standardization focusing on that worldwide technique must be adaptable Research has identified various sources of effective behind the enterprises’ internationalization business strategy They include:

1 secure key supplies in various geographical locations around the world

2 access to low-cost factors of production

3 the ability to reduce costs – economies of scope and scale, together with focused production, reduce the cost of products and services

4 the ability to provide higher quality (because of economies of scope and scale)

5 enhanced customer awareness and loyalty due to the interaction of three forces: global availability, serviceability and recognition

6 expanded use over contenders by presenting assets of the overall system as a powerful influence for the focused circumstance in singular nations

7 greater access to human skills and knowledge, because global companies can access the best people in the world, irrespective of nationality

8 increased access to financial resources and capital, including more frequent access to a variety of world stock exchanges

9 increased availability of information resources is often the competitive edge

10 longer and more expanded utilization of hardware and innovation, which incorporates adaptable assembling utilizing PC helped outline and assembling (CAD/CAM) Correspondence innovation is at first costly yet has almost no support costs after establishment

11 broader customer base, so global companies do not rely too heavily on one market, such as the original domestic market

12 geographic flexibility offers choice regarding market and factory sites

13 bargaining power becomes enhanced because of the ability to switch production between a variety of manufacturing sites

14 cultural synergies mean that cultural diversity is seen as a major source of

If first and second factors provide perspectives on the various sources of the competitive advantage generally available to all businesses, the third framework explores the issues specific to transnational or global companies

According to Yip (Yip, 1995), there are three separates directly factors of the business strategy:

1 developing core strategy – this is the basis for an organization's competitive advantage;

2 internationalizing the core strategy – the international expansion of activities and the adaptation of the core strategy; and

3 globalizing the international strategy – integrating the strategy across countries

3.4.2 Developing the core strategy

The core strategy is the simply and the fundamental component in thinking of a focused plan It expresses the business depiction, mission design, its business sectors and center skills It is the thing that the business is doing and what it is fit for accomplishing In being aware of these, the group can build methodologies on a strong establishment

According to Bartlett (Bartlett C A., 2006), we need to taking a closer look at the elements of the core strategy, an organization is faced by the identity and make of the business These comprise the following:

 type of products and services that the business offers;

 types of customers that it serves;

 specific geographic markets that the enterprise covers;

 the business may have major sources of sustainable competitive advantage;

 it may have function strategy for each of the value-adding activities;

 business has a distinct competitive posture, including the selection of competitors to target, and it has a clearly formulated investment strategy

An insight regarding the formation of a core strategy is that it is better and more effective if it is focused on the core competencies or strengths of the business organization (Bartlett C A., 2006)

4 DATA ANALYSIS RESULTS AND DISCUSSIONS

4.1 Introduction

In addition to data analysis using Five-Force and SWOT frameworks with the data collected from different sources available online, I conduct an analysis on the interview presented in a previous research report of students from VNU’s International School (Trang, Trang, Anh, & Oanh, 2018); There are three objectives of survey They are customers, Highland coffee staffs and managers During the survey via online and face

to face coversation, I collected 280 responses coming from customers, near 60 responses of managers and 90 responses of staffs Then I also made directly conversations with those objectives which relates to the designed question table of the student group; statistics from these interviews help to understand the opinions of differ stakeholder groups In addition, we have created online surveys for all three groups These questions are varied, cover a diverse range of topics, and can be asked in multiple formats The survey questions achieved strategically planned and structured in the best way possible in order to receive the most accurate data.Online data sources bring richer and diversity survey results for the research report From the survey results collected the online questionaire and face to face conversations, We have structured five levels to assess the most appropriate performance of three main groups : poor, medium, average, good , excellent A rating question asks survey respondents to compare different items using a common scale Structured questions make data collection and analysis much simpler and they take less time to answer The choice of method is influenced by the data collection strategy, the type of variable, the accuracy required, the collection point and the skill of the enumerator Links between a variable, its source and practical methods for its collection can help in choosing appropriate methods The main data collection methods are questionnaires, interviews, direct observations and other online data sources

4.2 Survey Results

The data below is collected from the research report of Trang at all (Trang, Trang, Anh, & Oanh, 2018) and additional valuation on product and service through manages and customers conversation

4.2.1 Profile of responders

Profile of responders is summarized in the below table

Table Error! No text of specified style in document.-2: Profile of responders

Male

Female

4.2.2 Customer satisfaction assessment

The satisfaction is reported in the table below This table gives the proportion, not the absolute count

Table Error! No text of specified style in document.-3: Customer satisfaction

of every 5 customers, state that the products of Highlands are not diversified enough

Figure Error! No text of specified style in document.-6: Customers’

assessment on Product diversification

Regarding the quality of the theme of Highlands area, just under a quarter (24%) stated neutral, while 64% says Highlands have stated that HL has well in themed space However, there are still a minority (12%) say that themed space is not creative enough

Figure Error! No text of specified style in document.-7: Customers’

assessment on theme

The bar chart below shows the quality of the product of Highland, slightly more than fifth (24%) evaluate that is medium level, while 60% appreciate quality in the product that bring satisfaction for them Nevertheless, just under a fifth (16%) say that the product quality is not good On the other hand, regarding the service quality, the number

of neutral (40%) and the number of high quality (48%) in evaluation are almost similar However, a few (12%) customers are not pleased about the service quality of Highland

In general, both product quality and service quality get high standard to bring satisfaction for the customers

Figure Error! No text of specified style in document.-8: Customers’

assessment on product quality

Regarding the rush-hour service quality, more than a half (57%) stated neutral, while some customer opinions say that quality of service at rush hour are not good (22%), which are equal to a number of clients evaluate highly in quality service of rush hour

Figure Error! No text of specified style in document.-9: Customers’

assessment on rush-hour service quality

The bar chart represents the promotional activities of High land coffee Slightly more than fifth (24%) have a neutral opinion that mean no under no over standard in promotional activities Just over a third (36%)say that promotional activities are good

As many as 40% contended that the Highlands is weak at promotion activities

Figure Error! No text of specified style in document.-10: Customers’

assessment on promotional activities

The bar chart below illustrates the data about the comparative advantage with two fields are price and service quality Just under a half (40%) stated neutral (no over no under-standard), while 36% declares Highlands have stated that Highlands has well price in comparative advantage, it means their charge match with customer satisfaction However, slightly more than a fifth (24%) say that price of Highlands are exetremely high to associate with the competitors.In addition, regarding service quality in comparative advantage, just over a fourth (28%) stated neutal ,more than a half (56%) agree that service quality is better than their rival.However, a minority (16%) does not evaluate highly the service quality of Highlands when comparing with competitors.Ịn conclusion, Highlands are still highly regarded in overall

Figure Error! No text of specified style in document.-11: Customers’

assessment on comparative advantage

Table Error! No text of specified style in document.-4: Frequent attendance of

customers

Age interval Count % Count % Count Total %