topic sourcing business strategy analysis of phuc long coffee tea phuc long heritage corporation

1: PESTEL analysisPhuc Long Heritage Corporation, a Vietnamese tea and coffee company, operates in a business environment that is affected by various factors.. Synthesis of findings from

- 🕮 - Saturday, 25 February 2023

• Lecturer: Vo Thi Minh Phuong • Semester: Spring 2023 • Subject code: SCM201

• Student ID: SS160226 Individual Assignment

LIST OF TABLES

Table 1.2 1: Vision, mission, core value and objectives - Phuc Long Coffee & Tea - 3 -

Table 2.1 1: PESTEL analysis - 5 -

Table 2.2 1: Porter’s five forces - 6 -

Table 3.1 1: VRIO analysis - 8 -

Table 3.2 1: Capabilities analysis - 9 -

Table 3.3 1: Competitor analysis - 10 -

Table 5.1 1: SWOT analysis - 13 -

TABLE OF CONTENTS

PART 1: INTRODUCTION - 2 -

1.1 Company overview: Phuc Long Heritage Corporation - 2 -

1.2 Vision, mission, core value and objectives - Phuc Long Coffee & Tea - 2 -

PART 2: EXTERNAL ENVIRONMENT - 4 -

2.1 PESTEL - Phuc Long Heritage Corporation - 4 -

2.2 Porter’s five forces - 6 -

2.3 Synthesis of findings from the external environment - 7 -

PART 3: INTERNAL ANALYSIS - 7 -

3.2 Capabilities analysis - 8 -

3.3 Competitor analysis - 10 -

3.4 Synthesis of findings from the internal environment - 11 -

PART 4: CORPORATE STRATEGY - PHUC LONG HERITAGE CORPORATION - 11 -

PART 5: BUSINESS STRATEGY - PHUC LONG COFFEE & TEA - 12 -

5.1 Swot and Tows matrix - 12 -

5.2 Synthesis of findings from the business strategy - 13 -

PART 6: RECOMMENDATIONS - 14 -

PART 7: CONCLUSION - 14 -

REFERENCES - 15 -

PART 1: INTRODUCTION

1.1 Company overview: Phuc Long Heritage Corporation

Phuc Long Heritage Corporation is a Vietnamese company that was established in 1968 in the Bao Loc tea plateau Since then, it has grown to become a well-known brand in Vietnam, with over 80 stores in major cities across the country Phuc Long's success is built on a commitment to quality, reflected in its slogan "A Passion for Quality" The company's focus on quality has helped it expand beyond Vietnam, with the recent opening of its first store in the United States With its long history and dedication to quality, Phuc Long is poised for continued growth and success both at home and abroad

1.2 Vision, mission, core value and objectives - Phuc Long Coffee & Tea

Table 1.2 1: Vision, mission, core value and objectives - Phuc Long Coffee & Tea

PART 2: EXTERNAL ENVIRONMENT

2.1 PESTEL - Phuc Long Heritage Corporation

Table 2.1 1: PESTEL analysis

Phuc Long Heritage Corporation, a Vietnamese tea and coffee company, operates in a business environment that is affected by various factors From a political perspective, Vietnam has no special consumption tax on sugar beverages (Vietnambiz.vn, 2018), such as tea and coffee, which creates opportunities for Phuc Long to export tea to the world However, the company also faces challenges in competing with other major markets in the world In terms of the economy, inflation rates and GDP growth are important factors that can impact Phuc Long's operations On the social front, the habit of using tea and coffee is prevalent among most Vietnamese people in big cities Phuc Long's brand is associated with safe and quality products, thereby attracting more customers who prefer organic and natural products From a technological standpoint, Phuc Long must keep up with the trend of information technology, which can influence consumer buying habits While there are no institutions or legal documents restricting participation in tea and coffee production and business, natural disasters, floods, and unpredictable weather changes in Vietnam can affect Phuc Long's tea growing areas, directly impacting the company's output and raw material quality

2.2 Porter’s five forces

Table 2.2 1: Porter’s five forces

Phuc Long Heritage Corporation operates in an industry that attracts the investment of many businesses While the company has a strong position in the tea and coffee industry, the threat of new entrants remains at a medium level The bargaining power of suppliers is low, as the raw materials used for tea and coffee production are derived from specific tea hills in Thai Nguyen and Bao Loc, and other ingredients used to make drinks are not too complicated However, the bargaining power of buyers is at a medium level, as Phuc Long targets a diverse range of customers and offers reasonable prices compared to other brands The threat of substitutes is at a medium level, as many affordable and lower-cost replacement products are available in the market Phuc

Long faces high competition with both Vietnamese and foreign brands, with a relatively good quality of drinks and service at reasonable prices

2.3 Synthesis of findings from the external environment

Phuc Long Heritage Corporation, a coffee and tea brand in Vietnam, operates in an industry that attracts investments from many businesses With over 60 years of experience, Phuc Long has established a strong position in the tea and coffee industry and has a certain number of loyal customers However, it faces strong competition from both Vietnamese and foreign brands, with a medium level threat of substitute products The company's bargaining power with suppliers is low, while its bargaining power with buyers is medium Additionally, the company faces challenges in keeping up with the trend of information technology and unpredictable weather patterns affecting its tea growing areas Despite these challenges, Phuc Long has a clear vision and mission to become a pioneer in the industry, develop an outstanding brand, and maintain its commitment to quality and community benefits

PART 3: INTERNAL ANALYSIS

3.1 VRIO analysis

Table 3.1 1: VRIO analysis

Phuc Long's sourcing procedures are valuable, unusual, and difficult to replicate, and the company has a well-established methodology As a result, the brand's sourcing procedures provide a persistent competitive edge and contribute to its overall success in the sector

3.2 Capabilities analysis

Table 3.2 1: Capabilities analysis

In terms of sourcing, Phuc Long Coffee & Tea has significant skills The firm has a established procedure for acquiring high-quality coffee and tea goods, as well as a highly qualified professional workforce and a dedication to ethical and ecological methods Moreover, the organization employs technology to enhance its sourcing process and evaluate the environmental effect of its activities

well-3.3 Competitor analysis

Table 3.3 1: Competitor analysis

3.4 Synthesis of findings from the internal environment

Phuc Long Coffee & Tea has a strong internal ecosystem The firm has a well-established method for acquiring high-quality coffee and tea items, as well as a highly qualified staff of industry experts The company's dedication to ethical and sustainable sourcing procedures offers it a competitive advantage in the market, attracting customers who value environmentally friendly and socially responsible products Moreover, Phuc Long has a strong network of local farmers and cooperatives, allowing it to acquire items directly from the source, assuring freshness and quality In addition, technology is used by the organization to enhance its sourcing process and to analyze the environmental effect of its operations Phuc Long's branding as a premium brand that delivers a distinctive and authentic coffee and tea experience also helps to its success in the market The company's emphasis on innovation and originality has enabled it to distinguish itself from competitors while maintaining a devoted consumer base Overall, Phuc Long Coffee & Tea's strong internal sourcing environment has allowed it to position itself as a market leader in the Vietnamese coffee and tea industry To keep its competitive edge, the firm must continue to innovate and adapt to changing consumer tastes and market trends

PART 4: CORPORATE STRATEGY - PHUC LONG HERITAGE CORPORATION

Phuc Long Heritage Company is Vietnam's big coffee and tea brand The business strategy of the corporation focuses on growing product offerings, gaining market share, and improving brand image in local and foreign markets To do this, the corporation has substantially engaged in research and development to generate new and creative goods that respond to consumers' changing tastes and preferences In addition, to reach a larger audience, Phuc Long has expanded its

distribution channels by building additional stores in strategic places around the country and cooperating with other merchants The corporation has also worked to improve its brand image through marketing initiatives emphasizing its dedication to quality, sustainability, and ethical sourcing procedures Overall, Phuc Long Heritage Corporation's corporate strategy is geared towards building a strong and sustainable brand that is recognized for its high-quality products and ethical business practices

PART 5: BUSINESS STRATEGY PHUC LONG COFFEE & TEA -

5.1 Swot and Tows matrix

Table 5.1 1: SWOT analysis

5.2 Synthesis of findings from the business strategy

Those strengths are potential advantages for individuals and organizations, as well as the coffee chain industry in the Vietnamese market, and is one of the brands with great potential to reach the international market Besides, there are also weaknesses that need to be overcome, in order to limit the risks and damages from external problems The Vietnamese market brings many opportunities for Phuc Long, in many aspects in terms of politics, society, culture of Vietnamese coffee

consumption, and when the GDP of the Vietnamese market is getting higher and higher every year In contrast, the threats in the coffee chain industry are also quite large, so it is necessary to have strategies and innovative directions to match the tastes of target consumers

PART 6: RECOMMENDATIONS

From the analysis of factors affecting Phuc Long coffee & tea, both internal and external, it can be seen that Phuc Long is currently a strong dragon in the F&B industry in Vietnam, with all the factors of a strong brand In order to maintain its current position in the market, Phuc Long must always update, innovate and create to bring consumers the best quality products from the best raw materials In addition, Phuc Long must come up with solutions for the weaknesses that the company is still limited, and develop plans and strategies to improve and develop, minimize the impact on the business, especially is in the strongly developed tea and coffee industry in Vietnam with many competitors in the market From there, we can see potential opportunities in the future, to be able to expand the business to markets around the world, and bring Phuc Long a Vietnamese coffee and tea brand to the world with a image of best value

PART 7: CONCLUSION

In short, with the current position of Phuc Long brand in the tea and coffee industry today, it has proven that this is one of the businesses with good strategies and ways to build in the organizational structure, as well as as in the business structure With a large and competitive market, Phuc Long has built a strong image of quality for consumers, from the source, processing, products and services Those factors have created a brand Phuc Long as it is today Besides the weaknesses of

Phuc Long, the problems that Phuc Long faces, it is an opportunity for this brand to change, to have better strategies in business and organization From there always continue to maintain, and grow stronger

• Chỉ SỐ Giá Tiêu Dùng, chỉ số giá vàng và chỉ số giá đô la MỸ tháng 12 năm 2022 (2022, December 29) Retrieved February 26, 2023, from https://www.gso.gov.vn/du-lieu-va- -solieu-thong-ke/2022/12/chi- -gia-so tieu-dung-chi- -gia-vang-va-chi- -gia-do-so so la my- -thang-12-nam-2022/

• Dân SỐ việt nam Mới Nhất (2022) - cập Nhật Hằng Ngày - danso.org (n.d.) Retrieved February 26, 2023, from https://danso.org/viet-nam/

•

https://vietnamcredit.com.vn/news/phuc-long- -outstanding-example-of-succan ess in- tea-and-coffee-market- -vietnam-part-ii_14146 in

-the-• Socio-economic situation in the fourth quarter and 2022 (2023, January 30) Retrieved

economic-situation- -the-fourth-quarter-and-in

2022/#:~:text=GDP%20per%20capita%20in%202022,622%20USD%20compared%20to%202021)

• Thắng Lợi Kép Khi Kinh tế Tăng Trưởng Cao và Lạm Phát thấp 04/01/2019 17:19:00 448

https://mof.gov.vn/webcenter/portal/vclvcstc/pages_r/l/chi-tiettin?dDocName=MOFUCM144827

-• Vietnam inflation ratejanuary 2023 data - 1996-2022 historical - February forecast (n.d.) Retrieved February 25, 2023, from https://tradingeconomics.com/vietnam/inflation-cpi • VietNamNet News (n.d.) Lo Sức Khỏe Cho Dân: Đánh Thuế đặc Biệt CÀ phê, trà nhiều

đường Retrieved February 26, 2023, from danh-thue-dac-biet-ca-phe-tra-nhieu-duong-422424.html

https://vietnamnet.vn/lo-suc-khoe-cho-dan-• VnExpress (2018, November 06) Những Chuỗi CÀ phê đang Kiếm Tiền NHIỀU NHẤT Retrieved February 26, 2023, from https://vnexpress.net/nhung-chuoi-ca-phe-dang-kiem-tien-nhieu-nhat-3834573.html