After more than 20 years of development, Trung Nguyen currently owns many expensive brands: Trung Nguyen Legend Cafe, Trung Nguyen E-Coffee, G7 Within 10 years of development, Trung Nguy
Trang 1PROJECT REPORT
Subject: SCM201
Teacher: Bùi Thùy Dương
Group: 2
-Group member Nguyễn Xuân Tùng - HS160884 Phan Thu Hiền - HS160874 Nguyễn Ngọc Lan - HS160578 Trần Việt Dũng - HS160773
An Văn Hải - HS160618 Nguyễn Duy Vương - HS163053
Trang 2A TRUNG NGUYEN COFFEE OVERVIEW:
I General introduction of the company
Trung Nguyen is one of the pioneering brands of Vietnamese coffee The brand was born in 1996 by Mr Dang Le Nguyen Vu After more than 20 years of development, Trung Nguyen currently owns many expensive brands: Trung Nguyen Legend Cafe, Trung Nguyen E-Coffee, G7
Within 10 years of development, Trung Nguyen quickly rose from a small Buon Ma Thuot coffee brand to a powerful corporation Currently, Trung Nguyen Group consists of 5 member 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 in Vietnam Trung Nguyen's business strategy helps the brand own a network of nearly 1,000 franchised cafes across the country and international markets Trung Nguyen's products have been present in more than 60 countries around the world In particular, Trung Nguyen is also present in key markets such as the US and China
II Vision, mission and core values
1 Vision:
Becoming a corporation that promotes the rise of the Vietnamese economy, maintains the national economic autonomy, and arouses and proves a desire for Dai Viet to discover and conquer
2 Mission:
Building a leading brand by giving coffee drinkers both creative inspiration and pride in Trung Nguyen style imbued with Vietnamese culture
3 Core Values:
Trang 3Inspired creativity
Brand development and protection
Focusing on the consumer
Strong human resource development
Take efficiency as the foundation
Build success with partners
Contribute to community building
B SUPPLY CHAIN MODEL OF Trung Nguyen Coffee
1 Analyze the company's supply chain
a Provider:
Suppliers are the first important link in the supply chain of each enterprise, they provide input materials for the production process, thereby affecting the quality and price of output products For Trung Nguyen, coffee beans are the main raw material Trung Nguyen selects from 4 regions of the best ingredients: Buon Ma Thuot Robusta coffee beans, Jamaican Arabica beans, coffee from the original homeland of Ethiopian coffee, Brazil
With the advantage of being located right on the coffee capital of Vietnam, Trung Nguyen has many advantages in purchasing raw coffee The company has 2 forms of purchasing, which are purchasing through private enterprises, traders and purchasing directly from farmers With the first form, when currently private enterprises or purchasing agents face many difficulties, many agents default, directly affecting the supply that does not meet both quantity and quality, so Trung Nguyen limits the use of this supplier Instead, the company has found a new direction for input materials, which is to invest and directly manage farmers' coffee farms, making coffee farms a part of the business, thereby helping the company to be proactive in strategic raw materials, contributing to strengthening the relationship between businesses and coffee farmers Trung Nguyen said the coffee beans it uses are purchased from small coffee farmers with certificates of sustainable farming practices and the company buys preferential prices from these households
Trung Nguyen Company also has packaging suppliers such as Phuong Nam Packaging 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 – Germany
b Manufacturers:
The combination of the most modern technology and mysterious Oriental secrets are unique features only in Trung Nguyen.Trung Nguyen is transferred technology and environmentally friendly 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 Trung Nguyen 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, Dak Lak
+ Investment is about 711.72 billion VND (40 million USD)
Trang 4+ Capacity of 60,000 tons / year - Roasted coffee processing plant in Buon Ma Thuot, Dak Lak
+ 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 Joint Stock Company in 2010
Bac Giang factory with a total investment of VND 22000 billion, the first phase focuses on processing and packaging G7 instant coffee products With the main commodity being coffee, Trung Nguyen has taken advantage of both traditional and modern forms of distribution to achieve the greatest results
c Distributor:
● Traditional distribution system
With the traditional distribution system, the finished product will be distributed to distributors, retail supermarkets (BigC, FiviMart, Co.op Mart ), retailers, then to the end consumer Trung Nguyen has developed an extensive distribution system, helping the company's products to always be available to customers The company has established a system of 121 distributors, 7000 points of sale and 59000 retail stores nationwide and many countries 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 most outstanding feature of G7 mart, according to Trung Nguyen's vision, is to meet the small and retail 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 located between alleys However, G7 mart overcomes the disadvantage of the traditional form
of distribution as grocery stores when the price is low, homogeneous, guaranteed like
1 supermarket and IT application in the management process
- The launch of the G7 mart system demonstrates the strategic vision and ambition to gain a foothold on Vietnam's distribution system
● Supermarket system:
Through the above analysis, we see Trung Nguyen using vertical distribution channels for its distribution system Flow flow in the distribution channel
The distribution of goods will also not go the old-fashioned way If in the past, each manufacturer had its own distribution channels, now G7 distribution centers will be the focal point for supplying goods to the entire G7Mart distribution system including standard G7 Mart stores and member stores This will reduce costs
Costly, with fewer intermediaries and as a result, consumers benefit from reduced product costs In the long run, in this way, all consumer products and services will be rotated on one system, creating a high professionalization
Trung Nguyen is the first unit to apply Franchise to Vietnam since 1998, only two years after appearing on the market Currently, the Company maintains a franchise system including more than 1,000 cafes across Vietnam and 8 overseas ones such as USA, Japan, Singapore,
Trang 5Thailand, China, Cambodia, Poland, Ukraine There is no denying the benefits that franchise brings to Trung Nguyen in terms of economy as well as brand With such a wide distribution system, Trung Nguyen has been present in 63 provinces and cities, over 50 countries around the 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 coffee enthusiasts 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 other regions, because consumers here are trending switching from the traditional drink of pay 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 young people, 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) and old (over 50 years old) groups, the younger groups (15-35 years old) are the groups that tend
to increase consumption strong coffee receptors
Occupation: Technician, management leader, professional, office worker and service industry employee The style and habits of each person when drinking coffee are not the same: Stay awake at work or study
Relax, entertain after hard work
Enjoy the taste of coffee
Come 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 clearly identifying target customers
Solution: Find out the mayor gap, mayor segment, target customer segment
Markets 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 supermarkets and stores with great consumption, Trung Nguyen allows pre-pickup and deferred payment within 45-60 days So Trung Nguyen's inventory is in production warehouses and distributors
f Competitors (Nescafe, Vinacafe)
❖ Nescafe by Nestle
● Advantages:
- A famous and long-standing coffee brand in the world (1938)
- Variety of coffee products
- Know how to adapt and develop products, produce products suitable for Vietnamese tastes
- Distributed throughout the country, so consumers are easy to buy
● Disadvantages:
- 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 idea
of "Vietnamese people using Vietnamese goods" Not using a modern distribution system
Trang 6- Only sell ready-to-drink packaged coffee, but there is no instant coffee shop system.
❖ Vinacafe of Bien Hoa Joint Stock Company
● Advantages:
- Is a long-standing and reputable brand in Vietnam market - Diversified products
- Cheap price, suitable for Vietnamese consumers
- Strong distribution system that makes products accessible to consumers
- Being the exclusive partner to provide products for all flights of Vietnam Airlines
● Disadvantages:
- 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 Trung Nguyen coffee is facing potential domestic competitors such as Thai Hoa, An Thai, Phu Thai, CADA, VICA However, the above 5 brands have become familiar to consumers for
a long time, changing habits is very difficult So the barrier to entry for potential competitors
is not high
g Proposed solutions:
1 Maximize the production process and product consumption, bring automation into the production process
2 Synchronizing stores in franchise chains
3 Sign a commitment with the franchisor
4 Link with shipping and distribution process distributors
5 Save and cut unnecessary expenses
6 Be cautious in expanding the production range Recruitment Good relations with previous sales partners
7 Minimize supplier training costs
8 Expanding more suppliers in 4 famous coffee regions
2 What is a supply chain map?
Trang 7A 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 documents related 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 agreement and purchase input products; forward pricing; Get information about exam prices school
Trang 8Increase 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 in cooperatives; transfer the process to the supplier to achieve uniformity of quality
IV 5 products or services
A Introductionproductionorservice
1 Sugar
Bourbon Tay Ninh Sugar Factory is a sugar factory with large output and supplies for most confectionery 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 Sugar Union SBT currently owns the most modern sugarcane production line according to Bourbon
.Group technology with a fully automatic control and control system
The factory has a pressing capacity of 8,000, the design capacity of phase 2 is 16,000 tons of raw sugarcane per day SBT also actively researched and applied many measures to support farmers
in terms of seeds, capital, fertilizers, etc., investing in in-field irrigation works in large raw material areas to expand the source of raw materials Towards operating
at maximum capacity, reducing costs, increasing competitive advantages in the market Up to now, Bourbon Tay Ninh sugar factory is the largest sugar factory in Vietnam Sugar factory provides a diameter for Trung Nguyen company to produce outstanding instant coffee such as g7 or capuchino, etc In addition, Trung Nguyen company also chooses two other sugar suppliers, QFV Sugar Company - QFV Co., Ltd · HAISONCO Tapioca Starch - Hoa Son Asia 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
Trang 9packaging is the roll film for instant coffee, which has the following effects: preventing external influences from affecting the taste, anti-oxidation, anti-mold to help prolong the shelf life of coffee instant coffee as well as maintaining product freshness After agreeing on the 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 for instant coffee
Instant coffee packaging or any other type of packaging also has its own standards, and for coffee 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 an area of 3 hectares The entire plant's equipment and technology lines are manufactured and transferred directly from FEA s.r.l - an Italian company specializing in manufacturing food processing equipment and instant coffee
Capacity: capacity of 3,000 tons of instant coffee
Total 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 Lak
Capacity 10,000 tons/year
Trang 10This 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 Joint Stock 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 Trung Nguyen'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 coffee factory in Asia[10] The factory is divided into 2 phases, the first phase focuses on processing and packaging G7 instant coffee products The second phase is to invest in a processing technology 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, the place where delicious Robusta coffee beans are born, favored by the global coffee enthusiasts community Dak Lak - The land of sunshine and wind, also known as the "coffee capital" of the country because it has more than 200,000 hectares of coffee growing area Coming to the red basalt land, there are 2 coffee cultural addresses with particularly impressive open spaces that visitors cannot ignore, especially coffee lovers: "Trung Nguyen Coffee Village" and
"Truong Nguyen Coffee Village" Coffee World Museum” for interesting practical experiences From proactively selecting ingredients in the 4 best coffee regions, investing and controlling production activities with the most modern technology, to flexible distribution using both traditional methods and modern, wide distribution network to customers From delicious coffee beans that are processed according to a separate recipe but still retain a