Project Report Subject Scm201 Trung Nguyen Coffee Overview.pdf

PROJECT REPORT

Subject: SCM201

Teacher: Bùi Thùy Dương

Group: 2 -

Group memberNguyễn Xuân Tùng - HS160884

Phan Thu Hiền - HS160874Nguyễn Ngọc Lan - HS160578

Trần Việt Dũng - HS160773An Văn Hải - HS160618Nguyễn Duy Vương - HS163053

A TRUNG NGUYEN COFFEE OVERVIEW:I General introduction of the company

Trung Nguyen is one of the pioneering brands of Vietnamese coffee The brandwas born in 1996 by Mr Dang Le Nguyen Vu After more than 20 years ofdevelopment, Trung Nguyen currently owns many expensive brands: TrungNguyen Legend Cafe, Trung Nguyen E-Coffee, G7

Within 10 years of development, Trung Nguyen quickly rose from a small Buon Ma Thuotcoffee brand to a powerful corporation Currently, Trung Nguyen Group consists of 5member companies.

● Trung Nguyen Joint Stock Company.

● Trung Nguyen Instant Coffee Joint Stock Company.● Trung Nguyen Coffee Co., Ltd.

● G7 Trading and Service Joint Stock Company.● Vietnam Global Gateway Joint Venture Company.Besides, Trung Nguyen also owns 3 factories.

● Trung Nguyen Coffee Factory (Di An - Binh Duong).

● Saigon Coffee Factory (My Phuoc - Binh Duong), acquired by Vinamilk.● Bac Giang factory, the largest instant coffee factory in Asia.

In addition, Trung Nguyen is also a pioneer in applying the franchise business model inVietnam Trung Nguyen's business strategy helps the brand own a network of nearly 1,000franchised cafes across the country and international markets Trung Nguyen's products havebeen present in more than 60 countries around the world In particular, Trung Nguyen is alsopresent in key markets such as the US and China.

II Vision, mission and core values1 Vision:

Becoming a corporation that promotes the rise of the Vietnamese economy, maintains thenational economic autonomy, and arouses and proves a desire for Dai Viet to discover andconquer.

2 Mission:

Building a leading brand by giving coffee drinkers both creative inspiration and pride inTrung Nguyen style imbued with Vietnamese culture.

3 Core Values:

Inspired creativity

Brand development and protectionFocusing on the consumerStrong human resource developmentTake efficiency as the foundationBuild success with partnersContribute to community building

B SUPPLY CHAIN MODEL OF Trung Nguyen Coffee1 Analyze the company's supply chain

a Provider:

Suppliers are the first important link in the supply chain of each enterprise, they provide inputmaterials for the production process, thereby affecting the quality and price of outputproducts For Trung Nguyen, coffee beans are the main raw material Trung Nguyen selectsfrom 4 regions of the best ingredients: Buon Ma Thuot Robusta coffee beans, JamaicanArabica beans, coffee from the original homeland of Ethiopian coffee, Brazil.

With the advantage of being located right on the coffee capital of Vietnam, Trung Nguyenhas many advantages in purchasing raw coffee The company has 2 forms of purchasing,which are purchasing through private enterprises, traders and purchasing directly fromfarmers With the first form, when currently private enterprises or purchasing agentsface many difficulties, many agents default, directly affecting the supply that does not meetboth quantity and quality, so Trung Nguyen limits the use of this supplier Instead, thecompany has found a new direction for input materials, which is to invest and directlymanage farmers' coffee farms, making coffee farms a part of the business, therebyhelping the company to be proactive in strategic raw materials, contributing tostrengthening the relationship between businesses and coffee farmers Trung Nguyen saidthe coffee beans it uses are purchased from small coffee farmers with certificates ofsustainable farming practices and the company buys preferential prices from thesehouseholds.

Trung Nguyen Company also has packaging suppliers such as Phuong NamPackaging Trading Co., Ltd., Vinapackink Vietnam Packaging and Printing Ink Company.- Company supplying machinery and equipment to Trung Nguyen: Neuhaus Neotec company– The world's leading coffee processing equipment manufacturer in Hoykenkamp – Germanyb Manufacturers:

The combination of the most modern technology and mysterious Oriental secrets are uniquefeatures only in Trung Nguyen.Trung Nguyen is transferred technology and environmentallyfriendly by the world's leading corporations From a small coffee roasting facility,Trung Nguyen has now grown into a corporation with a solid infrastructure system TrungNguyen currently has 3 factories producing roasted coffee:

- Factory in Tan Dong Hiep A Industrial Park, Binh Duong Province.+ Capacity: capacity of 3,000 tons of coffee

+ Total investment capital is over 10 million USD - Factory in Buon Ma Thuot City, DakLak.

+ Investment is about 711.72 billion VND (40 million USD).

+ Capacity of 60,000 tons / year - Roasted coffee processing plant in Buon Ma Thuot, DakLak

+ Capacity of 10,000 tons / year.

+ This factory is the largest in the Highlands, 80% of the output is for export.And 2 instant coffee processing plants:

- Saigon Coffee Factory: acquired by Trung Nguyen from Vinamilk Vietnam Dairy JointStock Company in 2010.

Bac Giang factory with a total investment of VND 22000 billion, the first phase focuses onprocessing and packaging G7 instant coffee products With the main commodity beingcoffee, Trung Nguyen has taken advantage of both traditional and modern forms ofdistribution to achieve the greatest results.

c Distributor:

● Traditional distribution system

With the traditional distribution system, the finished product will be distributed todistributors, retail supermarkets (BigC, FiviMart, Co.op Mart ), retailers, then to the endconsumer Trung Nguyen has developed an extensive distribution system, helping thecompany's products to always be available to customers The company has established asystem of 121 distributors, 7000 points of sale and 59000 retail stores nationwide and manycountries around the world Some examples of Trung Nguyen's distributors such as:Blueway Joint Stock Company, Ngoc Ha Trading and Service Joint Stock Company Modern distribution intermediaries: G7 Mart System:

+ This is the first franchise retail system in Vietnam

+ There are 200 suppliers for the entire G7 chain of stores across the country + The mostoutstanding feature of G7 mart, according to Trung Nguyen's vision, is to meet the small andretail shopping habits of Vietnamese people and often buy close to home.

- Therefore, G7 marts are often staged on a small scale like 1 grocery store and are locatedbetween alleys However, G7 mart overcomes the disadvantage of the traditional formof distribution as grocery stores when the price is low, homogeneous, guaranteed like1 supermarket and IT application in the management process.

- The launch of the G7 mart system demonstrates the strategic vision and ambition to gain afoothold on Vietnam's distribution system.

Costly, with fewer intermediaries and as a result, consumers benefit from reduced productcosts In the long run, in this way, all consumer products and services will be rotated on onesystem, creating a high professionalization.

Trung Nguyen is the first unit to apply Franchise to Vietnam since 1998, only two years afterappearing on the market Currently, the Company maintains a franchise system includingmore than 1,000 cafes across Vietnam and 8 overseas ones such as USA, Japan, Singapore,

Thailand, China, Cambodia, Poland, Ukraine There is no denying the benefits that franchisebrings to Trung Nguyen in terms of economy as well as brand With such a wide distributionsystem, Trung Nguyen has been present in 63 provinces and cities, over 50 countries aroundthe world and promises to continue to reach further d Customers:

The customers that G7 coffee in particular and Trung Nguyen Group in general are all coffeeenthusiasts around the world regardless of age or geographical location or job income.In Vietnam, the instant coffee market in the North has a stronger growth rate than otherregions, because consumers here are trending switching from the traditional drink ofpay to coffee With its nationalistic promotion, the G7 has attracted a lot of customers(mostly in the North).

d Consumer market

Trung Nguyen's customers are quite diverse with all kinds of subjects: from youngpeople, traders, freelancers, non-workers to office workers, high-income people, older people.The most consumed coffee quantity and value fall into the middle-aged (35-50 years old) andold (over 50 years old) groups, the younger groups (15-35 years old) are the groups that tendto increase consumption strong coffee receptors.

Occupation: Technician, management leader, professional, office worker and service industryemployee The style and habits of each person when drinking coffee are not the same:

Stay awake at work or studyRelax, entertain after hard workEnjoy the taste of coffeeCome to coffee to receive partners

Because the company's famous brand → more stylish, more professional style, o Weaknesses:Trung Nguyen's strategy targets the majority of Vietnamese consumers, not clearlyidentifying target customers.

Solution: Find out the mayor gap, mayor segment, target customer segmentMarkets of organizations

Organizations, schools, hospitals, non-governmental organizations, non-profits e Inventory:

For distributors, Trung Nguyen requires to pay first and then ship later With supermarketsand stores with great consumption, Trung Nguyen allows pre-pickup and deferred paymentwithin 45-60 days So Trung Nguyen's inventory is in production warehouses anddistributors.

f Competitors (Nescafe, Vinacafe)❖ Nescafe by Nestle

- Higher imitation than Trung Nguyen's product of the same type

- Because it belongs to a foreign company, it is difficult to reach customers who have the ideaof "Vietnamese people using Vietnamese goods" Not using a modern distribution system

- Only sell ready-to-drink packaged coffee, but there is no instant coffee shop system.❖ Vinacafe of Bien Hoa Joint Stock Company

- Facilities are weak, technology is outdated.- Roasted coffee occupies a small market.

- Venture Marketing Strategy And Vinamilk Cafe of Vietnam Dairy Joint Stock Company– Vinamilk, Maccoffee of Food Empire Holdings.

Indirect:- Golden Sting

- Monster Energy Drink Implicit: Besides 4 direct competitors such as TrungNguyen coffee is facing potential domestic competitors such as Thai Hoa, An Thai, PhuThai, CADA, VICA However, the above 5 brands have become familiar to consumers fora long time, changing habits is very difficult So the barrier to entry for potential competitorsis not high.

7 Minimize supplier training costs

8 Expanding more suppliers in 4 famous coffee regions2 What is a supply chain map?

3.Potentialrisksofthesupplychain:A Potential supply chain risks:

● Political risk● Market risk● Sourcing risk● Financial risk● Supplier risk

B Supply chain risk management:- Solutions to reduce political risks

Obey and strictly enforce the law; full tariffs Document documentsrelated to the production of full import and export business

- Solutions to reduce risks in the market

Extend the sale period; Direct sales; Output product sale agreementand purchase input products; forward pricing; Get information aboutexam prices  school.

Increase cash liquidity of farmers; Managing investment phases; Build up contingencies;Insurance.

- Solution to reduce supplier risk

Establishing a production team; Encourage production households to participate incooperatives; transfer the process to the supplier to achieve uniformity of quality

IV 5 products or services

A Introductionproductionorservice1 Sugar

Bourbon Tay Ninh Sugar Factory is a sugar factory with large output and supplies for mostconfectionery and beverage processing factories and especially Trung Nguyen Company.Bourbon Tay Ninh Sugar Factory belongs to Bourbon Tay Ninh Sugar Joint Stock Company(SBT), formerly a joint venture between Bourbon Sucreries Group (G.B) and Tay Ninh SugarUnion SBT currently owns the most modern sugarcane production line according to Bourbon.Group technology with afully automatic control andcontrol system.

The factory has a pressingcapacity of 8,000, the designcapacity of phase 2 is 16,000tons of raw sugarcane perday SBT also activelyresearched and applied manymeasures to support farmersin terms of seeds, capital,fertilizers, etc., investing inin-field irrigation works inlarge raw material areas toexpand the source of rawmaterials Towards operatingat maximum capacity, reducing costs, increasing competitive advantages in the market Up tonow, Bourbon Tay Ninh sugar factory is the largest sugar factory in Vietnam Sugar factoryprovides a diameter for Trung Nguyen company to produce outstanding instant coffee such asg7 or capuchino, etc In addition, Trung Nguyen company also chooses two other sugarsuppliers, QFV Sugar Company - QFV Co., Ltd · HAISONCO Tapioca Starch - Hoa SonAsia Joint Stock Company · Soc Trang Sugar

2 Packaging

Coffee products sold on the market today usually come in two forms: powder and granules,the product is packaged in a variety of bags with weights of 16-500gr (instant coffee), 100gr,250gr, 500gr and 1kg (coffee beans/coffee powder) The main material of this type of

packaging is the roll film for instant coffee, which has the following effects: preventingexternal influences from affecting the taste, anti-oxidation, anti-mold to help prolong theshelf life of coffee instant coffee as well as maintaining product freshness After agreeing onthe information on the package with the customer such as: basic information, specifications,appropriate design Next supply the finished product in rolls to create retail packaging forinstant coffee.

Instant coffee packaging or any other type of packaging also has its own standards, and forcoffee packaging alone, it must fully meet quality standards:

● Food safety system certification according to FSSC 22000● Food safety management system according to ISO 22000:2018● Quality management system products according to ISO 9001:2015● Food safety and hygiene management system according to HACCP standards

3 Factory system

a) Trung Nguyen currently has 3 coffee roasting factories:

- Factory in Tan Dong Hiep A Industrial Park, Binh Duong Province The factory covers anarea of 3 hectares The entire plant's equipment and technology lines are manufactured andtransferred directly from FEA s.r.l - an Italian company specializing in manufacturing foodprocessing equipment and instant coffee.

Capacity: capacity of 3,000 tons of instant coffeeTotal investment capital is over 10 million USD.- Factory in Buon Ma Thuot City, Dak Lak.Invested about 711.72 billion VND (40 million USD).Capacity 60,000 tons/year.

- Roasted coffee processing factory in Buon Ma Thuot, Dak LakCapacity 10,000 tons/year.

This factory is the largest in the Highlands, 80% of its output is for export.b) 2 instant coffee processing factories:

- Saigon Coffee Factory: acquired by Trung Nguyen from Vietnam Dairy Products JointStock Company Vinamilk in 2010 with a total investment of more than 17 million USD.According to information from Trung Nguyen, Saigon Coffee Factory is located at Lot A,NA7 Road, My Phuoc 2 Industrial Park, Ben Cat District, Binh Duong, on an area of 6ha.The factory has technology to produce all kinds of products such as roasted coffee beans,roasted ground coffee, instant coffee powder, canned coffee this factory can increase TrungNguyen's total capacity to 30,000 tons of finished coffee products every year.

- Bac Giang factory with a total investment of VND 22,000 billion, the largest instant coffeefactory in Asia[10] The factory is divided into 2 phases, the first phase focuses on processingand packaging G7 instant coffee products The second phase is to invest in a processingtechnology system to meet the growth of the export market.

4 Coffee tree

- Buon Ma Thuot is also the core city of the world famous coffee raw material region, theplace where delicious Robusta coffee beans are born, favored by the global coffee enthusiastscommunity Dak Lak - The land of sunshine and wind, also known as the "coffee capital" ofthe country because it has more than 200,000 hectares of coffee growing area Coming to thered basalt land, there are 2 coffee cultural addresses with particularly impressive open spacesthat visitors cannot ignore, especially coffee lovers: "Trung Nguyen Coffee Village" and"Truong Nguyen Coffee Village" Coffee World Museum” for interesting practicalexperiences From proactively selecting ingredients in the 4 best coffee regions, investing andcontrolling production activities with the most modern technology, to flexible distributionusing both traditional methods and modern, wide distribution network to customers Fromdelicious coffee beans that are processed according to a separate recipe but still retain a