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the international business strategy of highlands coffee

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EXECUTIVE SUMMARY

In the current globalization context, it is not difficult to find a Chinese restaurant or products from Korea or Japan in Vietnam Globalization helps countries exchange cultures with each other, bring their unique features to friends around the world, and at the same time help countries promote each other's economic development to form economic blocs strong Expansion of business in another country offers great potential to promote product development and global economic growth, accelerate investment and strengthen international cooperation And to be able to access a completely new market, in a completely new country, we need to analyze, build and choose the right market entry strategy to minimize risks and achieve our goals

Germany is one of the largest coffee consuming countries in Europe with a long culture Besides, Vietnam is known as a country famous for coffee culture with the leading coffee export volume in the world Highlands coffee is one of the largest and most successful coffee chains in Vietnam with the Vietnamese style from coffee taste to the enjoyment and with the desire to bring our country's coffee culture to other cultures each

other in the world

The research team decided to choose the German market, using the PESTLE MODEL to analyze the strengths and limitations of the Garman coffee market, then building an appropriate business plan so that Highlands Coffee can be successful conquer

this potential market.!

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CHAPTER I: THE INTERNATIONAL BUSINESS STRATEGY OF HIGHLANDS COFFEE

2.1 OVERVIEW OF THE GERMAN COFFEE MARKET

In Europe, Germany is the largest country, in terms of consumption of coffee The strong demand for freshly brewed coffee is driving sales in the market study Furthermore, the consumers demand for specialty coffee is rising, owing to the increasing awareness and knowledge about the product

2.2 PESTLE ANALYSIS

2.2.1 Political issues 2.2.1.1Political system

The Federal Republic of Germany is structured as a federal state and parliamentary democracy The Basic Law stipulates that all government powers emanate from the people The people assign these powers to the parliaments (Bundestag and State parliaments) for the duration of a legislative period

2.2.1.2 Political stability

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Quan hệ đối tác chiến lược Việt Nam - Đức Đức là đối tác thương mại lớn nhất của Việt Nam tại châu Âu và cũng là một trong những nước viện trợ ODA nhiều và thường xuyên cho Việt Nam Quan hệ Đối tác chiến lược song phương đang ngày càng được củng cố Cộng hoà xã hội chủ nghĩa Việt Nam a Vị trí địa lý: Đông Nam Á \ Thủ đô: Hà Nội & Múi giờ thủ đô: GMT + 7.00 “ERA - Cộng hòa liên bang Đức cđ: 5 Ran) yi Múi giờ thủ đô: GMT +1.00 f4 Diện tích đất liền (km2)

= ) Thiét lap quan hé ngoai giao:

Dân số (người)

QUAN HỆ SONG PHƯƠNG

Thiết lập quan hệ đối tác chiến lược 10/2011 rk Diện tích đất liền (km2) - 348.672

Dân số (người)

23/9/1975

90.000.000

Mật độ dân số (người/km2)!

272

bed: scans `

DP TY oi:

Điện thoại cli dộng,

máy tính và linh kiện GDP bình quân đầu người/năm Np 2.028 USD = r) Đồng Việt Nam (VNĐ) Máy móc, thiết bị phụ hoá chất TỔNG XUẤT NHẬP KHẨU- tỷ USD 7,7 7,8 7,63 Năm201 2012 2013 2014 10/2015 (Số liệu năm 2014) *(GDP- tỷ USD) (theo tỷ giá hối đoái chính thúc) Nguồn: Bộ Ngoại giao, CIA, TTXVN Ơtơ 80.854.000 Xuất khẩu Mật độ dân số (người/km2) làng dệt may CI 3.860 tỷ USD* giày dép, đồ da GD >

GDP bình quân đầu người/năm

GDP_ +z74ousp

Dược phẩm

ĐẦU TƯ:

Đức: 26 Ï dự án, tổng vốn đăng ký 1,413 tỷ USD Việt Nam: Ï 7 dự án, tổng vốn 92 triệu USD

CỘNG ĐỒNG NGƯỜI VIỆT Ở ĐỨC ee ©

khoang 125.000 người 92% đã nhập quốc tịch Đức

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2.2.2 Economic issues

2.2.2.1 The consumption of product

Germany is one of the key importers of green coffee beans There is an increase in the demand for freshly brewed coffee, primarily due to the rising preference for specialty coffee and freshly ground coffee pods According to the data published by Beverage Business World in 2020, Germany was the groundbreaker, in terms of consumption of coffee in office spaces The key players prefer to serve freshly brewed coffee, made from whole roasted beans, especially in office spaces, primarily due to the increasing demand for whole roasted coffee The increasing demand for freshly brewed coffee is driving the companies to opt for roasted whole beans According to Kaffeeverband analysis, recorded an increase of around 11% — that is equivalent to an increase of 37,900 tons of roasted coffee in 2020 This is impacting the sales of roasted ground coffee And according to the

forecast of German economists, the demand for coffee will increase in the future

Germany Coffee Market - Share of Organic Coffee, By Sales Volume, Certified Fair Trade Coffee Germany, 2018-2020

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2.2.2.2 Economic factors

Germany is the 4th largest economy in the world With nominal GDP forecasts for 2019 set to the tune of $4.2 trillion, the country looks set for robust economic growth However, a GDP decline in late 2018, coupled with shaky industrial growth, has left a shadow on the economic horizon of the nation Germany boasts of a low unemployment rate of 3.2%, which is arguably one of the lowest worldwide One of the top exporters of the world, Germany has a mixed economy with a budgetary surplus And although the recent refugee crisis has left the country shaken, but with a strong economic foundation, Germany looks set to remain an established economic power

Biểu đồ GDP bình quân đầu người Đức 1970-2020

50.000

45.000

4% 40.000 iS ae Năm 1987: 1,25% 2% 30.000 25.000 0% 20.000 -2% 45.000

10.000

` 0 om ánH II all il | -6%

1970 1975 1980 198 1990 1995 2000 2005 2010 2015 2020 Nguồn: Solieukinhte.com

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GDP per capita over the years 2015 - 2020

Nam GDP/người _- Tăng trưởng" 2020 45.724 53.694 5,07 2019 46.468 55.891 0,33

2018 47.811 54.955 0,96

2017 44.553 52.953 2,22 2016 42.136 50.580 141 2015 41.103 47.610 0,62

Source: Solieukinhte.com

2.2.2.3 Economic relationship with Vietnam

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Xuất khẩu của Việt Nam sang Đức giai đoạn 2010-2020 7.00

6.00

5.00 4.00 3.00 Đơn vị: tỷ 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: trungtamwto.vn 2.2.3 Social issues 111.1 Size of population

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Population structure in Germany Nam Nữ Source: danso.org Germany has a high proportion of the urban population, accounting for 80% of the population Germany has about 70 cities per 100,000 inhabitants Cities with over 1 million inhabitants in Germany such as Berlin, Hamburg, Munich, Cologne, Frankfurt, Stuttgart, Diisseldorf, Dortmund, Essen, etc The major cities are concentrated mainly on the coast,

along the Rhine and the Rua region

Germans are ethnically homogeneous, with 99% of the population being German Germans have a high standard of living which is not only reflected in GDP per person, but also in benefits in terms of salary, working time, and leave; General working conditions are usually regulated under salary contracts and income tax reduction policies

2.2.3.2 People’s attitude with products

German coffee consumption has soared in recent years after a dip according to statistics made available If these figures are to be believed German coffee has sold at the rate of 6.1 kg per head Coffee has made a snazzy comeback in a stylish new avatar as a hot drink with attitude Innovative trends were signaled by espresso and instant versions that gave youa good cup of coffee on the go Out-of-home consumption is estimated to be make up about 25% of the coffee market German coffee has gone gourmet with a vengeance as it becomes almost an accessory to city chic It signals individuality and

confidence, not to mention that awesome caffeine induced bravado that works wonders

German coffee turned into a success story from consumption at the rate of 15,000 tons in the 90s to a whopping 55,000 tons in recent times German roasters together account for about 1.5 billion Euros worth of coffee imports About 2 million bags of green coffee

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are stored in warehouses in Bremen and Hamburg Big cities like Berlin and Hamburg have thriving coffee sales especially at outlets such as Starbucks and Balzac

The world's largest coffee consuming countries in 2020 QC 2 à E> ww Goan Brazil Germany 797.053.6 675,839.8 375,460.9 @ è ở - - - France Italy South Korea 166,435.1 153,629.1 111,905.5 a ở ờ \_4 m = Philippines Poland Japan 110,541.4 108,280.6 108,050.7 ¿ = Russia 107,2771 Source: vietdata.vn

In recent years, coffee consumption in Germany has increased and is expected to grow strongly in the future This opens up market potentials so that Highlands coffee can build its brand in Germany

2.2.4 Technological issues

German industry is very diverse and in many fields Germany is also a world leader in the chemical industry Furthermore, among Germany's most innovative sectors with above-average growth rates are the technology sectors using renewable energy as well as information technology and biotechnology

Germany is also actively researching environmentally friendly materials, such as using straws, paper cups or bamboo to limit plastic waste released into the environment In addition, Germany is also a very developed country in terms of information technology and online commerce services Creative copyrights in Germany are very strongly protected

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by law so Highlands Coffee has an opportunity to improve mobile apps and associated services to achieve more revenue through mobile purchases The company can also improve its supply chain efficiency based on recent technologies used by coffee farmers However, the increasing availability of specialty coffee machines for home use may affect Highlands Coffee's business and growth in the German market

2.2.5 Legal issues

The Federal Republic of Germany uses a civil law system The legal landscape of Germany promotes the establishment of business ventures by both citizens as well as foreign investors An excellent investment environment, together with top-notch infrastructure and structural reforms to the corporate tax rates has made the country an

attractive destination for investors worldwide

The legal stability attracts foreign companies and is to the benefit of investments and entrepreneurial activity in Germany Business-life in Germany is based on the principle of competition To control unfair market behavior is within the responsibility of the Federal Cartel Office in Bonn.Fair competition is also safeguarded by the Act Against Unfair Competition

Trademarks and patents enjoy strong protection in Germany For Germany, the German Patent- and Trademark Office is in charge of these registrations When exporting to Germany, various aspects have to be considered: Customs and taxes, quality and environmental standards, Trademark and competition rules etc

The importer is responsible for clearing the items to put the goods in circulation in Germany Imported goods must be accompanied by a customs declaration, which has to be submitted in writing, and an invoice in duplicate Like most of the member states of the European Union, Germany adheres to the metric standard Quantities and qualities of goods must therefore be quoted in metric units or units derived from them.As consumer protection and information are of fundamental importance, there are precise regulations on labelling products, especially for food, which are bound for the Single European Market For safety

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aspects of several kinds of products, Germany has established the Federal Institute of Risk Assessment Building a business model will benefit from support from the government, but the strict requirements on product quality as well as great competitive pressure may create difficulties certain constraints for Highlands coffee

Germany and Vietnam both apply the civil law system to manage the country, so there will be similarities in the law between the two countries, along with the investment support policies of the German government for businesses Vietnamese businesses are approved in the Eurasian cooperation forums, creating advantages for Highlands Coffee to easily enter the German market

2.2.5 Environmental factors

Germany, along with the rest of the world, faces the threats of global warming and climate change Environmental pollution, together with rapid industrialization and use of fossil fuels has prompted the nation to adopt a policy of encouraging alternative energy sources The country is home to the world’s largest wind farms and wind turbine, as well as the largest solar park, Solarkomplex Senftenberg Germany is working its way towards sustainable resource utilization and plays an important role in international climate cooperation

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2.3 MARKETAUDIT 2.3.1 Market potential

According to information from Mordor Intelligence, Germany is the largest coffee- consuming country in Europe with per capita consumption reaching about 6.5 kg/person/year German consumer demand for specialty coffees is growing due to increasing awareness and knowledge of the product It is expected that Germany's coffee consumption demand in the period 2021-2025 will grow at an average of 3.09%/year Currently, the German market consumes the most light-roasted and high-quality Arabica coffee The Arabica coffee segment is the fastest-growing segment and is forecast to witness major improvements in the coming period In terms of product type, the ground coffee segment holds the largest market share due to convenience in consumption and in line with the preferences of German consumers

2.3.2 Level of competition

Germany is the largest coffee consumer in Europe, so there are many competitors in the region To mention the main competitors such as: Starbuck, Dunkin Donuts, Mc Cafe are familiar names with coffee chains around the world However, Highlands Coffee can completely compete with the above famous brands with the unique coffee culture of Vietnamese people

2.3.3 Sociocultural influences

According to a study done in 2012, 86% of adults in Germany drink coffee regularly, almost every day This is a very high percentage of adults using caffeine quite often, but there is a surprising statistic next The report shows that around 150 liters of coffee are consumed by one person each year in Germany, which makes coffee the most popular drink in Germany, more than beer and even water In general, Germany is the country with the top consumption in the world, German coffee culture has similarities with Vietnamese coffee culture but still has a romantic and polite character Highlands Coffee can rely on this to build a unique cafe in Germany

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