Coca Cola Vietnam''''s business environment is a fascinating subject. The thesis examines issues such as the micro-environment, macro-environment, and global environment. Along with it, there is an examination of the industry''''s evolution and an introduction to Vietnam''''s sub-sectors. Two Coca-Cola Vietnam competitors are also featured in this thesis, with basic data on the products and services they provide, their organizational structure, size, scope, and ability to achieve their vision, purpose, and business goals. These arguments will then be compared with Coca-Cola Vietnam. Finally, the paper examines Coca-Cola Vietnam''''s organizational structure to demonstrate how the internal marketing and finance departments collaborate to accomplish business goals and interrelationships.
1 Abstract Coca Cola Vietnam's business environment is a fascinating subject The thesis examines issues such as the micro-environment, macro-environment, and global environment Along with it, there is an examination of the industry's evolution and an introduction to Vietnam's sub-sectors Two Coca-Cola Vietnam competitors are also featured in this thesis, with basic data on the products and services they provide, their organizational structure, size, scope, and ability to achieve their vision, purpose, and business goals These arguments will then be compared with Coca-Cola Vietnam Finally, the paper examines Coca-Cola Vietnam's organizational structure to demonstrate how the internal marketing and finance departments collaborate to accomplish business goals and interrelationships 2 Table of content I Introduction to Coca- Cola Vietnam Coca Cola first appeared in 1886, with its headquarters in the United States, and is a symbol of American culinary culture Currently, Coca Cola has been present in more than 200 countries around the world, and is known by about 98% of the world's population ( Tạp chí Pháp Lý, 2021) Dr John S Pemberton, an Atlanta pharmacist, came up with a unique tasting soft drink that could be served at soda fountains in 1886 He made a flavored syrup and carried it to his local pharmacy to be combined with carbonated water and judged "wonderful" by people who tried it Frank M Robinson is credited with naming the beverage "Coca-Cola" and creating the patented, distinctive lettering that is still used today( Coca- Cola company, 2021) 3 ( Source: Le, 2019) There are types of legal structure for Business Firstly, Proprietorship- A business owned and managed by one person is known as a sole proprietorship, or proprietorship, and the owner-manager is the proprietor Secondly, Partnership- legally owned by two or more people; common examples include skilled people and professionals such as: dentist, lawyers…Thirly, Private limited company is owned by shareholders who are typically the directors of the business, and cannot be offered to the general public, incorporated Finally, Public limited company is owned by shareholders and run by director limited liability, and often referred to as a PLC Coca- Cola Vietnam is a private limited company Coca Cola in general and Coca-Cola Vietnam in particular both own a large portfolio of other beverage brands, including Schweppes, Oasis, Lives, Kea Oar, Fanta, Lilt, Dr Pepper, Sprite and PowerAde, and are one of the globally recognized brands Coca-Cola's annual revenue in Vietnam has increased by trillions of dong, and in 2015, Coca-Cola had a 48.6 percent market share in Vietnam ( Nguyen, 2020) Coca-Cola still believes its mission is to innovate and make a difference for the world For Coca-Cola's vision, the company creates brands and drinks, and people love being able to inspire customers both 4 physically and mentally At the same time, to develop in a sustainable way and towards a better common future, bringing positive effects in the lives of people, communities, and the whole world (The Coca-Cola Company, 2021) In term of scope and size, there are two types of organizations: for-profit and non-profit For-profit organizations are organized and operated for the benefit of the collective, public, or public benefit society Non-profit organizations are organized and operated for the benefit of the collective, public, or public benefit society Coca-Cola Vietnam belongs to a for-profit organization In terms of size- defined as the number of employees at any particular geographical location is known as organizational size, and it includes the complete corporate organization whether it is at one geographical place or a division of a decentralized firm, coca cola Vietnam is a large business with a huge number of human resources, about 4000 employees and 99% are Vietnamese in Vietnam ( Thị trường - Báo Người lao động online, 2019) Coca-Cola arrived in Vietnam for the first time in 1960 Following that, in August 1995, the Coca-Cola Indochina Pte Company was formally founded in Vietnam Since then, Coca-Cola has a presence in Vietnam, which has been consolidated into a single beverage company known as Coca-Cola Vietnam, with headquarters in Ho Chi Minh City's Thu Duc District II Coca- Cola- business environment The development of the beverage industry Coca-Cola has always been one of the most well-known beverage brands in Vietnam Thousands of direct and indirect jobs have been generated by Coca-Cola factories in Ho Chi Minh City, Da Nang, and Hanoi Coca-Cola has been continually innovating and 5 developing its goods for many years in order to diversify its consumer base Coca-Cola Vietnam, in particular, significantly broadened its high-quality product range in 2017 by marketing juice goods, packaged tea, and canned coffee Beverage industry There are three sectors in the organization's idea The private sector refers to the segment of the economy in which private persons or organizations own and govern the organization, with profit as the primary motivation The government and its institutions control the public sector, where the strafe develops and operates many sorts of organizations for the benefit of its citizens and their general welfare Not-for-profit and non-governmental organizations such as charities, purposeful bodies, and community businesses comprise the volunteer sector Coca-Cola Vietnam, a firm that provides the essential product of beverages as well as a diverse range of products, is a tailor-made corporation that functions practically profitably Profit and revenue generation are at the heart of any business plan This demonstrates that Coca-Cola Vietnam is a privately owned company 2.1 Porter’s five forces of Coca- Cola Vietnam The five forces mentioned in Porter's model can have an impact on Coca- Cola's to service customers and generate a profit in Vietnam The threat of new entrants In Vietnam, Coca-Cola will be able to exploit existing expertise and money flows to shake up the competition, even while new entrants diversify from completely diverse industries into the main business 6 There are several entry hurdles for new entrants that favor Coca-Cola: capital requirements, economies of scale, product differentiation, access to distribution, and customer loyalty to established brands The threat of substitute products or services These alternatives can be direct or indirect: direct substitutes are items from the same category produced by several competitors; indirect substitutes are products from many product categories (Boyce, 2021) that can be used to replace Coca-Cola in Vietnam The cost of switching to direct substitutes is not high for the consumer, moreover the price per unit-volume may be higher or lower, thus making the risk of substitution high There are some distinctions in how comparable or identical goods are utilized from the user's perspective, however many consumer decisions are based on personal preference, making Coca-Cola vulnerable to replacement products Bargaining Power of Buyers Coca-Cola customers in Vietnam appear to be a group of consumers who purchase CocaCola products in Vietnam for distribution, retail, or consumption The primary customers of Coca-Cola in Vietnam are hypermarkets and supermarkets, as well as independent retailers and distribution agencies for end consumers Buyers' purchasing power will be increased through a system of supermarkets, hypermarkets, and a number of specialized food chains Coca-Cola keeps products on hand for purchasers, and shops in Vietnam helped to meet consumer demand Bargaining Power of Suppliers Coca-Cola Vietnam has the highest share of the food and beverage market, with the most supply chains As a result, it is a typical buyer for suppliers No supplier discloses any cost 7 requirements, and bargaining leverage is similarly limited However, Coca-Cola Vietnam is also interested in its suppliers because they believe in long-term partnerships 2.2 Macro environment and Micro environment of Coca- Cola Vietnam 2.2.1 Macro environment Coca-PESTEL Cola's study in Vietnam will assist the corporation in making appropriate strategic decisions that are in accordance with external trends and factors of the external environment (macro environment) so that the beverage sector may grow and succeed Political environment Commercial constraints and political stability are other important elements that will decide Coca-success Cola's or failure in Vietnam Coca-cost Cola's of doing business in Vietnam will be influenced by tax policies An rise in organizational taxes (on business earnings) has the same effect as an increase in costs Companies can pass some of this increase on to customers in the form of higher prices, but it will also have an impact on the company's bottom line A country's lack of political stability has an influence on corporate tasks Political stability is especially important for firms that operate on a worldwide scale, such as Coca-Cola in Vietnam Economic environment Economic factor is one of the most important factors of PESTEL affecting Coca-Cola in Vietnam 8 (Source: Globalvn.biz, 2021) The chart above shows how Coca-Cola in Vietnam has grown from 20016 to 2019 Cocaincome Cola's in 2016 was VND 6,872 billion, which climbed by VND 346 billion to VND 7,218 billion in 2017 According to the most recent data, Coca-Cola Vietnam's revenue in 2019 was VND 9,297 billion, a percent increase over the previous year Successful economic growth will lead to increased customer spending, the potential for large profits, and the ability to expand the company's production and commercial activities A moderate inflation rate will also help Coca-Cola Vietnam develop and have a positive effect on improving consumer confidence and consumer spending trends The pace of 9 inflation can influence the demand for Coca-Cola products in Vietnam However, higher inflation could force Vietnam Coca-Cola to raise prices alongside inflation, leading to reduced brand loyalty and persistent cost-cutting efforts Social Social influences will derive from social components of the macro environment such as consumer behavior and needs as well as social trends in education Higher education social trends have enabled corporations such as Coca-Cola in Vietnam to acquire more competent human personnel Furthermore, Coca-Cola in Vietnam is supposed to prioritize consumers above products Technology environment With the progress of science and technology along with scientific inventions, this has made Coca-Cola's new products perfected continuously Many new technologies have transformed and created a radical substitute for traditional products, and it makes CocaCola Vietnam company very competitive, especially in terms of technological progress Coca-Cola used the Internet as well as social media to reach consumers Businesses in Vietnam, such as Coca-Cola, have begun to use social media for recruiting, highlighting the shift in the business world toward social networking Environmental In terms of environmental effect, Vietnam strives for ecologically benign operations, energy conservation, and natural sediment conservation It is becoming increasingly difficult to verify whether the materials used are recyclable as more and more products are manufactured 10 10 Suppliers: Individuals or organizations that offer inputs to an organization are known as suppliers Some raw ingredients used in the production of Coke not appear to be accessible in Vietnam, thus they must be imported from elsewhere A marketing management contract's job is to ensure that suppliers comply with purchase orders for raw materials and to keep track of pricing fluctuations Suppliers for Coca-Cola Vietnam such as: Dynaplast packaging (Vietnam) Co., Ltd., Stepan Processing Company and KCP Sugar Factory ( Hoang, 2020) Customers: In the business environment, customers are always the top priority for all businesses, not just Coca-Cola Coca-Cola Vietnam always considers customers as god They embrace a variety of strategies for reaching consumers Lots of promotions, and exciting customer-centric activities Competitors: Coca-rivals Cola's are classified as either direct competitors or prospective competitors Direct rivals are companies who have been in the sector for a long time and have an impact on Coca-business, Cola's such as Pepsi, Red Bull, and Tan Hiep Phat Businesses specialized in alternative goods such as coffee, milk, beer, or bottled water are prospective rivals, but their potential is insufficient to compete directly with beverage companies such as Coca-Cola 2.3 Global environment Current global challenges have a significant impact on the Coca- Cola company's operations Environmental pollution: the quantity of gas and industrial waste emitted by businesses into the environment is a major source of worry Natural and ecologically friendly goods are becoming increasingly popular and preferred by many individuals 11 11 Scarcity of raw materials: Because raw materials are becoming increasingly limited, efficient recycling of soft drink cans is required for beverage goods in the industry Energy costs are increasing day by day: Coca-Cola must develop new alternative energy sources, operate more effectively, and reduce manufacturing costs III Analysics of competitors of Coca- Cola Vietnam- Pepsico and Tan Hiep Phat Background of Pepsico and Tan Hiep Phat Pepsico PepsiCo formally entered the Vietnamese market in 1994, when it formed a joint venture with IBC International Beverage Company and introduced the first two brands, Pepsi and Up, following the lifting of the US embargo against Vietnam (Suntory PepsiCo, 2018) This company owns numerous other well-known beverage brands, including Mirinda, UP, Mountain Dew, and Aquafina mineral water, in addition to the billion-dollar Pepsi brand ( Pepsico, 2021) Tan Hiep Phat Tan Hiep Phat, the forerunner of Ben Thanh Brewery and Beverage Factory, was founded in 1994 with the purpose of producing and trading alcohol, beer, and other beverages The head office, which is located in the Thuan An district of Binh Duong province, features a plant with a floor area of more than 110,000m2 and some of Southeast Asia's most advanced equipment, research, and manufacturing technology lines ( Vnr500, 2021) 2.Products and Services Pepsico Pepsico company owns numerous other well-known beverage brands, including Mirinda, UP, Mountain Dew, and Aquafina mineral water, in addition to the billion-dollar Pepsi brand ( Pepsico, 2021) Pepsi goods flourish in a growing culture where individuals are often preoccupied with their jobs and limited time, therefore fast food and accompanying carbonated beverages such as Pepsi are popular In order to grow the market, Pepsico has also created a diet-specific Pepsi Pepsi has created Diet Pepsi, a sugar-free beverage 12 12 Tan Hiep Phat Tan Hiep Phat's products include herbal tea, green tea, squash tea, exercise drink, energy drink, soy milk and purified water Tan Hiep Phat's products have consistently won the title of "Vietnamese High Quality Goods" as voted by consumers, as well as being honored as a National Brand and receiving numerous other prestigious awards Tan Hiep Phat's products are widely trusted due to the assurance of quality management, environmental protection, and integrated ISO standards ( Tập Đoàn Tân Hiệp Phát, 2021) 3 Size and scope PepsiCo Vietnam: Like Coca-Cola Vietnam, PepsiCo is also a for-profit organization, with revenue reaching more than VND 18,3000 billion in 2019 ( VnExpress, 2020) PepsiCo Vietnam also is a large business Suntory Pepsico had facilities, 450 distribution stations, 3000 workers, and goods were distributed through direct and indirect routes to over 1.1 million retail locations in 2017 ( Le, 2017) Tan Hiep Phat: Tan Hiep Phat is a for- profit organization The factory of Tan Hiep Phat Trading and Service Co., Ltd in Binh Duong has a revenue range of 4,500 to 5,800 billion VND each year From more than 600 billion VND in 2016, to approximately 1,000 billion VND in 2019, the company's net profit climbed significantly ( Người đưa tin, 2021) Tan Hiep Phat is a large business with over 4,000 employees and factories for processing and manufacturing products ( VnExpress, 2021) Similarities and difference with Coca- Cola Pepsico Coca- Cola Tan Hiep Phat Pepsico, Tan Hiep Phat, and Coca-Cola are all major players in beverage in Vietnam, and with that comes fierce competition Coke and Pepsi are both carbonated soft drinks that are popular dark drinks with nearly identical ingredients, and both have the same number of calories In each business strategy of both of these tycoons, there is caution and monitoring of the other's moves Similaritie s Taste and Nutritional value Pepsi has a citrus flavor and is generally sweeter than Coca-Cola on the initial drink, although its sweetness dissipates more quickly Pepsi has more sugar, calories, and caffeine than CocaCola, and it contains an acid that balances the acidity in soft drinks ( Nguyen, 2021) 13 13 Coca-Cola is flavored with vanilla, raisins, and will have a milder sweetness Coca-Cola has a higher sodium salt content than Pepsi ( Nguyen, 2021) Tan Hiep Phat avoids carbonated soft beverages in favor of natural tastes such as orange and green tea Tan Hiep Phat also offers a variety of drink products made from natural components that are enriched with vitamin C, minerals, and healthy energy, and are enjoyed by millions Business strategy Pepsico's current business plan is an international one, with diverse tactics tailored to specific interests and cultures in each area Pepsico creates separate subsidiaries or joint ventures with local businesses Coca-Cola's business strategy has been to focus on the greatest markets, rather than the whole world, from its inception CocaCola has long been a staunch supporter of the media industry, and has always focused on increasing the volume of profitable products, seriously managing costs to improve return on investment, and considering the media market as a key driver for their future of local and international customers ( Vietnamnet, 2013) Tan Hiep Phat targets almost all other customer groups, and always puts the safety and nutrition in each of its products first Vision, mission and ojective Vision Pepsico PepsiCo's obligation is to consistently enhance all parts of the society in which we operate - environmental, social, and economic – in order to contribute to a better tomorrow than today (Suntory PepsiCo, 2018) 14 14 Tan Hiep Phat To become Asia's top company in the beverage, quick food, and plastic packaging industries Mission Objective Providing hundreds of beverage products that bring joy to consumers around the world Providing convenience to everybody Pepsi has succeeded in delivering satisfaction to the level of convenience for customers with its conveniently packaged goods and wide distribution infrastructure products Companies, branches, and manufacturing facilities across a variety of areas generate advantageous conditions for employees, investors, partners, and the host country's collaboration, trading, and economic growth (Suntory PepsiCo, 2018) Producing and selling healthy items for consumers that meet international standards and have a good flavor Developing the greatest beverage goods through brands like Number One or Green Tea while avoiding customer contact through a system that stretches across Vietnam Organizasion structure, legal structure and stakeholders Tan Hiep Phat Co., Ltd - Trading Service has the following organizational structure: General Director, Deputy General Director, and divisions, each block in charge of a specific sector and has support for each other to build a different working process by Tan Hiep Phat ( Tan Hiep Water, 2019), so Tan Hiep Phat belongs to function structure In term of legal structure, Tan Hiep Phat Beverage Group is a beverage company in Vietnam Tran Qui Thanh launched the firm in 1994 ( thp group, 2021) It is Vietnam's largest private beverage provider, so it is a private limitted company In term of stakeholders, Tan Hiep Phat has a large number of employees and a number of beverage distributors such as Duc Cuong Co., Ltd., Vietnam Vifotex Co., Ltd., Vietnam Beer Alcohol Beverage Technology Joint Stock Company, ( Nguyen, 2020) 15 15 The legal structure of Pepsico Vietnam is private limitted company PepsiCo's organizational chart is headed by the CEO of the company and below it are managers of departments such as Market Development Service, Marketing, Customer Development, R&D, Operation, HR and Finance PepsiCo is also belong to Function Structure Custumers, Bottlers, Employees, Distributors, and Investors are PepsiCo Vietnam's five key stakeholder groups, which are prioritized by the firm IV Business functions of Coca- Cola Vietnam The formal arrangement of roles inside an organization is known as organizational structure An organization chart is a diagram that depicts an organization's structure, primary job classifications, and reporting connections among its employees ( Resources base, 2020) 16 16 CEO of Coca- Cola Company Traditional Coke Marketing Sales Other Brands Supply chain Finance Legal and Humane foreign resouces Finger: The organization structure of Coca- Cola Vietnam ( Resource: Adapt from Phan, 2015) Types of organization structure of Coca- Cola Vietnam 17 17 IT Organizational structure is divided into main categories: Simple structure Functional Structure, Divisional Structure, Team Structure, Matrix-Project Structure, Boundary less Structure and Learning Structure Simple structure is an organizational architecture with few departments, broad spans of control, power centered in a single person, and minimum formalization A functional structure is an organizational architecture that combines together occupational specializations that are comparable or related A divisional structure is a type of organizational structure that is made up of distinct business units or divisions, and each division has limited autonomy in this organization, with a division manager in charge of his or her unit and accountable for performance A team structure is one in which work groups or teams make up the whole company Matrix is a project management system that distributes professionals from various functional areas to work on projects and then returns them to their original areas after the project is done Boundaryless Organizational structure is not defined or constrained by artificial horizontal, vertical, or external borders; it encompasses virtual and network forms of organizations A learning structure is one in which employees constantly acquire, share, and apply new information From those definitions, it can be seen that the organizational structure of Coca-Cola Vietnam is a Function Organization Pros of Function Organization: Employees are grouped with others who have similar activities, which saves money (economies of scale, minimum duplication of personnel and equipment) ( Bhide, 2018) Cos of Function Organization : The pursuit of functional goals can cause managers to lose sight of what is best for the business as a whole; functional experts can become isolated and have little grasp of what other units are up to ( Bhide, 2018) 52 Function and Task 18 18 Each department is responsible for carrying out its particular activities and tasks, which are overseen by the department head Sales department: Make and implement business plans, as well as build and interact directly with the customer and distributor systems Sales operations generate money for the firm Marketing Department: Research, market and try to understand the mind and psychology of customers This is followed by building a market profile and revenue forecast for the company Segment the market, as well as define the goals and brand positioning for the organization For products, marketers need to manage the product (product cycle) and try to develop and perfect their company's product with the requirements and attributes that the market wants The last task is to create and implement marketing strategies like the 4Ps and 4Cs Technical Department: The main function is to advise the Board of Directors and the General Director on technical, technological, product standards and quality The Technology department's main responsibility is to design, deploy, and supervise technical aspects of products; implement product construction at all stages of production; manage and inspect technology and product quality Financial Accounting: Obtaining capital to satisfy the demands of production and commercial operations, inspecting and evaluating the efficiency of the company's capital and assets, and balancing the primary financial plan Develop and report financial management standards for the firm to the Board of Directors, as well as monthly, quarterly, and yearly financial plans to meet production and business needs Organize accounting, accounting statistics, precisely and completely reflect facts, and the capital flow condition in production and business 19 19 Technology Department: Manage the company's communication system, ensuring that all information is shared and processed in a timely way IT also provide automation with the necessary hardware, software, network, and communication infrastructure for the company Supply Chain: Help with logistical procedures such as new product creation, inventory management, production, shipping and delivery, and product returns Maintain thorough records, create reports, and create presentations to assist management in understanding the logistical viewpoint Managers must be able to read and comprehend legal papers such as import and export contracts or agreements, as well as grasp financial accounting concepts Human resources department: Planning human resource policy, remuneration, and benefits; training, recruiting, and establishing labor relations among employees; and executing programs to develop human resources for the organization In a direct interview with Mr Thinh Huynh - currently an employee at the Sales Department of Coca-Cola Company in Ho Chi Minh City, he said that The Coca-Cola Company's divisions are always connected and collaborated to achieve the company's shared goals Sale department must collaborate and cooperate with other stakeholders such as accounting and distribution in order to provide clients with the best possible service Not only that, the Technology Department has cooperated very well with the Materials Planning Department to monitor and check the quality and quantity of goods and supplies when buying or exporting The Technology Department will also base on the economic contract to make a technical plan, survey, list and supply items to the Sales Department to build the product cost V Conclusion 20 20 This thesis attempts to analyze the business environment of Coca-Cola in Vietnam In the first part of the thesis, we focus on briefly introducing the products, the legal structure of the company and the history of the formation of the Coca-Cola Company in Vietnam in particular and the Coca-Cola Company in general In the second part, the thesis focuses on analyzing in detail the business environment of Coca Cola Vietnam such as the micro, macro and global environment Along with that is an analysis of the development of the industry, and an introduction to the sub-sectors of Vietnam In the next section is a report on two of Coca-Cola Vietnam's competitors in basic details, the products and services they offer, their organizational structure, size, scope and vision., their mission as well as their business goals Then, those arguments will be compared with Coca-Cola Vietnam Finally, the report analyzes the organizational structure of Coca-Cola Vietnam to show how the internal finance and marketing departments work together to meet business goals and how relationships are interrelationships, and analyze and present those advantages and disadvantages The company's worldwide reach, great brand power, increasing presence outside the United States, and good financial position all inspire me Furthermore, the company's acquisition of Coca-Cola Enterprises' bottling operation, as well as its productivity measures, are projected to save money Coke Company, in particular, plays a significant influence in the beverage industry in Vietnam Customers adore their advertising, which is both significant and bright, as well as enticing due to the energetic music To match the need of Vietnamese customers, I believe Coca-Cola Company should generate a lot more advertising in the future VI References 21 21 Boyce, P., 2021 Substitute Goods Definition (11 Examples and Types) - BoyceWire [online] Boycewire.com Available at: [Accessed 30 October 2021] Coca-colacompany, 2021 Trace the 130-year Evolution of the Coca-Cola Logo | CocaCola Australia 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[Accessed 20 October 20 21] Tien, N.H., Vu, N.T and Tien, N.V., 2 019 The role of brand and brand management in creating business value case of coca-cola... of the thesis, we focus on briefly introducing the products, the legal structure of the company and the history of the formation of the Coca-Cola Company in Vietnam in particular and the Coca-Cola... Segment the market, as well as define the goals and brand positioning for the organization For products, marketers need to manage the product (product cycle) and try to develop and perfect their