report group assignment group 3 highlands cofe

This report will introduce about Highlands Coffee in detail, analyze the currentsituation of Highlands according to Business context, SWOT, competitor and PESTLE.Then, research on Highla

P R E P A R E D B Y :

01 Introduction

Table of Contents

SUMMARY

"From the love of Vietnam and the passion for coffee, in 1999, the Highlands Coffee®brand was born with the aspiration to elevate Vietnam's long-standing coffee heritage andspread the spirit of pride and harmonious connection between traditional with modern"(Highlands Coffee, 2021) However, Highlands Coffee is still facing some marketingproblems This report will introduce about Highlands Coffee in detail, analyze the currentsituation of Highlands according to Business context, SWOT, competitor and PESTLE.Then, research on Highlands's target customers, Key Insights and the challenges andproblems that the coffee shop chain is currently facing In addition, Highlands Coffee'scurrent 7Ps marketing strategy will also be analyzed in this report and give somerecommendations

Highlands Coffee is currently a coffee brand with a huge revenue of VND 2,200 billion a year andhas the highest profit margin today (iBar, 2021) The reason why Highlands Coffee attracts a largenumber of customers is the design of the space In addition to the drinks with rich flavors, customersare also impressed with the luxurious, polite and cozy design With the main color is warm and cozyred, along with the interior are mainly wooden tables and chairs with traditional Vietnamese style,combined with sofas to create a variety of styles, which is the intersection between traditional andmodern features (iBar, 2021).

Highlands Coffee is not only attractive because of the main color and interior, but also because thecontext is in harmony with the space of the shop "Usually, Highlands Coffee will decorate withdecorative lights made from rattan, knitting, bamboo, with a country style, or truncated ceiling lights,made from pleated fabric." (iBar, 2021)

Besides these factors, the quality of drinks and quality of service are still the leading factors thatdetermine the success of Highlands Coffee "Highlands Coffee is famous as a brand that alwaysfocuses on using clean ingredients, selecting coffee beans by hand, combined with unique recipes,giving Highlands a menu of drinks rich and suitable for all types of customers" (iBar, 2021).Highlands Coffee always tries to give customers the best service experience Customers coming toHighlands Coffee are warmly welcomed, advised to choose drinks and served enthusiastically

C O M P A N Y C O N T E X T

INTRODUCTION

Highlands Coffee was founded in 1999 by an overseas Vietnamese businessman named DavidThai (SunOffice 2021) "Starting with packaged coffee products in Hanoi in 2000, HighlandsCoffee has rapidly grown and expanded into a famous coffee shop brand and has continuouslyexpanded domestic and international operations since 2002" (Highlands Coffee, 2021)

In 2012, Highlands Coffee was sold to fast food company Jollibee of the Philippines(retailnews.asia, 2018) and so far Highlands Coffee has more than 300 stores across 20 provincesand cities across Vietnam and is number one franchise brand in Vietnam (SunOffice 2021)

"Highlands Coffee has a clear and consistent

positioning from the beginning, with strong image

associations as 'coffee for businessmen' and 'coffee for

high-income intellectuals' (Dieu, 2015)

"Highlands Coffee has the strongest brand association

with their customers at a rate of 100% (understood as

an 'on spot' coffee shop chain, excluding 'coffee-to-go'

or 'take away')” (Dieu, 2015)

Good products and services

"Highlands Coffee is one of the few brands that can

exploit traditional cultural values into products"

(lynhuasaigon.com, 2020)

Located in prominent locations such as shopping

centers, universities, etc., helping customers improve

the brand identity of Highlands

The market share is still very large: The market value of

Vietnamese coffee and tea is approximately 1 billion

USD, but no brand has won an overwhelming market

share The total market share of popular brands such as

Starbucks, Highlands Coffee, The Coffee House, Phuc

Long and Trung Nguyen is less than 20% of the market

share (Nhan and Anh, 2021)

"More and more people are giving priority to enjoying

coffee in the chain of stores and branded cafes rather

than spontaneous, roadside shops Because the product

origin can be traced, safety is ensured food"

(VietnamPlus, 2021)

"The chain of stores and cafes has become a familiar

place and a cultural routine of people in their lives

People come to chain stores and cafes to entertain, meet

friends; work, exchange change jobs" (VietnamPlus,

There are many domestic competitors with fiercecompetition such as Cong Ca, Phuc Long, The participation of foreign competitors such asStarbuck (USA), The Coffee Beans & Tea Leaf(USA), Gloria Jeans Coffee (Australia), Caffe Bene(Korea),

Taxes in Vietnam are relatively high

The Covid-19 pandemic has impacted the globaleconomy

Drink prices are quite high, not suitable for manyclasses of customers

There are no stores in the countryside, areas outsidethe city center

Service performance is not high

Didn't pay much attention to marketing

High cost of premises and employees affectsrevenue

"The quality of products and services is on adeclining trend" (academia.edu, 2016)

"The franchise system does not guaranteeuniformity in quality" (academia.edu, 2016)

✦Trung Nguyen coffee can be a chain of restaurants providinggood service and a strong competitor to Highlands Formed in

1966 at Buon Me Thuot Trung Nguyen is currently one of theleading coffee brands in Vietnam

Trung Nguyen also has brands in many countries around theworld such as China, Singapore And in terms of instant coffee,Trung Nguyen is quite successful with the G7 coffee product lineand now expanding in many countries and Trung Nguyen has theadvantage to hit the pride of Vietnamese people

✦ About customers: Trung Nguyen provides services to allcustomers, but mainly customers with low income AndHighlands provides services focusing on customers with higherincomes and business people

✦Regarding the location of Highlands, only choose places withbeautiful facades in the city This shows both classes and helpsHighlands Coffee to position itself as a luxury and stylish coffeecompany As for Trung Nguyen, you can find them anywhere ifyou want

✦ For the cultural part, coffee itself is a cultural feature and theFounder of Trung Nguyen is Nguyen Vu has books on themeanings of coffee expressing the desire for power and nationalspirit, enhancing cultural levels Therefore, Trung Nguyen issuperior to Highlands in this regard

As for service quality: Highlands has a very high quality ofservice, friendly staff, professional way of working with theadvantage of Wifi and Jazz music, so it is very popular withcustomers, but Trung Nguyen has not done it yet Do this well

✦ In terms of price: Trung Nguyen will cost less because the use

of service supply is not much, so it can reach more customers

✦ About product service: Highlands Coffee will diversify thissegment more because they serve coffee and fast food and

COMPETITOR

ANALYSIS

Currently, Highlands Coffee restaurant

service chain is the second largest in the

Vietnam market and behind Trung Nguyen It

can also be understood that Trung Nguyen is

the strongest competitor of Highlands

Coffee

Or just like in recent times, the giant

competitor Starbucks in the US has

penetrated the Vietnamese market and is

considered a formidable opponent of the

Highlands

Moreover, there are also competitors such

as The Coffee House or Phuc Long that

Highlands must consider carefully

Starbucks is very good at processing and

serving customers: within 3 minutes, 2

receptionists and 1 waiter can serve up to

220 customers/hour, the drinks are very

diverse and delicious Eye-catching, showing

the modern and unique personality of this

business.

With such professional style advantages,

Highlands also needs to pay attention to this

opponent.

COMPETITOR ANALYSIS

Through a formidable competitor, Trung Nguyen,

we can't help but mention that Starbuck is also a serious competitor when it comes to Vietnam from the US market.

PESTLE ANALYSIS

There are many factors that have a dramatic impact on a business Those long-term factors will be Economic,Social, Technological, Legal, and Environmental or we can call them PESTEL analysis (Cheverton, 2005, p, 72).PESTEL will help us in analyzing all external factors that influence Highland Coffee

P O L I T I C A L F A C T O R S : E C O N O M I C A L F A C T O R S :

✦Vietnam's accession to the WTO in 2007 has offered up

new commercial prospects

Implementing policies to discourage monopolistic behavior

and create favorable conditions for the coffee industry's

development

✦To combat inflation, the government chose to institute a

tight monetary policy in early 2015

✦In 2012, the government published Resolution No 13 on

a number of initiatives to alleviate production and

commercial issues and to strengthen markets

✦Vietnam has now joined the international economic

integration process In addition, the company can

strengthen its competitiveness by partnering with more

global companies, allowing the product to improve over

time It might provide Highland Coffee with a good

opportunity to expand its stores not only in Vietnam but

also in other nations International integration, on the other

hand, poses certain challenges for Highland Coffee as the

number of competitors grows

✦From 2011 through 2022, Vietnam's GDP is expected

to increase at a rate of 6.2% per year on average.Meanwhile, the F&B market alone will increase at acompound annual growth rate of roughly 10% per year by

2022, outperforming the total growth rate (DTQV, 2021)

✦The Covid-19 pandemic will have a detrimental impact

on high-end coffee chains like Highland, Starbuck, andTrung Nguyen, which operate in the industry However,

by adopting the mindset of an emerging market, oureconomy will have more room to grow in the long run As

a result, the Highland still has a bright future

✦In Vietnam, there are presently 540,000 food andbeverage outlets, 22,000 coffee shops and bars, and over80,000 chain restaurants In 2019, revenue was 200billion dollars, increasing 34.3 percent from 2018 By

2023, it is expected that this industry would generate

$408 billion in sales Highland is a high-class coffeebusiness that caters to high-income clients, with averagesales increasing by 32 percent every year HighlandsCoffee has the most outlets in Vietnam, with 240locations and sales of 1,628 billion VND The economicclimate in this field is favorable, which provides manyopportunities for enterprises to grow Large revenue,particularly for Highland, allows them to have a largercash source in the future year However, because theyoperate a huge number of stores, and because the storesare strategically positioned around major large roads andintersections, the chain's input costs are also relativelyexpensive (Foodnhotelhanoi, 2021)

PESTLE ANALYSIS

S O C I A L F A C T O R S : T E C H N O L O G I C A L F A C T O R S :

✦With 96.46 million populations in 2019, Vietnam is the

world's 15th most populous country, with a population

growth rate of 1.14 percent According to 2020 figures,

people between the ages of 20 and 34 make up the

majority of the population The workforce is vast, allowing

for the exploitation and production of coffee As a result,

firms should seize this opportunity to redirect their growth

✦However, while some studies have concluded that coffee

is not "unhealthy," it does contain a significant amount of

caffeine Many people are choosing to give up caffeinated

beverages as part of the health consciousness trend in

order to improve their mood, sleep, and other aspects of

their lives This could lead to a decrease in coffee demand

(and equally, a greater demand for decaffeinated coffee

products) (Tuoitre, 2019)

✦Another significant change in the coffee industry is theintroduction of new coffee-specific equipment Everyelectronics store now sells coffee grinders, drippers, andespresso equipment These machines make it easier thanever to enjoy coffee, encouraging people to brew theirown at home This will have little effect on the total size

of the coffee industry, but it may encourage more people

to brew and enjoy coffee at home There will also befewer customers drinking coffee outside of HighlandsCoffee outlets, as well as other coffee companies

E N V I R O N M E N T A L F A C T O R S :

L E G A L F A C T O R S :

✦Vietnam is confronted with a slew of environmentalconcerns While some of these challenges aren't directlytied to the food and beverage industry such as car CO2emissions others are Unsustainable farming practices, inparticular, can lead to deforestation

✦Other concerns about farming include the usage ofpesticides and fertilizers, as well as water consumption Inthe end, this is likely to increase consumer costs, therebyharming the coffee business

✦Highlands produces coffee drinks for the development

of restaurant services and consumption and is always

subject to the regulations on food and beverages that

must be legal according to the Vietnam Food Safety and

Hygiene Control Department This means that many laws

must be followed regarding storage, transport, and

incubation

✦Moreover, coffee has a large amount of caffeine As a

result, these standards only get tighter over time, but safe

coffee handling is so easy to get right that it shouldn't be

too much of a problem for Highlands Coffee

CONSUMER RESEARCH

Primary Research

Survey

This survey refers to the satisfaction

and perception of customers about

Highlands Coffee's services and

products

In which, 74.3% of survey respondentsare in the age group of 19 to 25.18.3% of people under the age of 18completed the survey

6.4% of people between the ages of

26 and 35 completed the survey.the remaining number of surveyrespondents over 36 years old is notsignificant

There are 109 survey respondents:

Of the 109 people who completed the

survey, 72.5% of the respondents were

students

30.3% are self-employed

26.6% are sales people, small businesses

19.3% are people who produce services,trade business

Office workers for 7.3% of the insignificantnumber

Through the survey, it can be seen that the ratio of male

and female sex is not too different

More than 80% of customers care about product quality when coming to HighlandsCustomers care about service quality more than 65%

More than 50% of customers choose reasonable prices

Customers who sometimes use Highlands coffee products up to 73.4%

Rate of regular visitors accounted for 22%

The remaining 4.6% are customers who often use Highlands Coffee's products

The rate of using Highlands coffee products in chain stores over 5 times accounts for 37.6%From 1 to 5 times accounted for 62.4%

=> Therefore, it can be seen that the number of customers returning to use Highlands Coffee'sproducts is not too much

90% of respondents prefer to drink coffee immediately after waking up orduring breakfast

The majority of respondents prefer to drink hand-made coffee at thestore