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Pathophysiology (Marian University)

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Table of Contents

Introduction......................................................................................................................2

Major Findings.................................................................................................................3

Task 2: The impact and influence which the macro environment has on an organisation
and its business strategies...................................................................................................3

Task 3: An organisation’s internal environment and capabilities......................................8

Task 4: Evaluate and apply the outcomes of an analysis using Porter’s Five Forces
model to a given market sector..........................................................................................11

Task 5: Apply models, theories and concepts to assist with the understanding and
interpretation of strategic directions available to an organisation..................................15

Conclusion.....................................................................................................................20

References.....................................................................................................................20

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Introduction

Established in 1968 in Bao Loc tea plateau,

over half a decade of development, Phuc Long's
tea and coffee are too familiar to Vietnamese
consumers. Up to now, Phuc Long has owned
43 stores in big cities such as Ho Chi Minh,
Hanoi, Khanh Hoa, Binh Duong and Da Nang,
Phuc Long's products not only serve domestic
demand but also exported to the world.
According to Phuc Long's website, the company
only explained about Phuc Long's vision and
mission, other information about goals and
objectives is not updated publicly. So, I will give
some suggestions for businesses about setting goals in the future.

Vision
Until 2019, Vietnam has more than 97 million people (danso.org, 2019), along with the
increasing use of tea and coffee. Standing in such a potential market, Phuc Long has a desire to
expand its market and develop sustainably, striving to become a company specializing in the
production and export of high-value tea and coffee in Viet Nam. Besides, it is the desire to
create a Vietnamese brand with the level and quality, thereby marking its position in the
international market. (Phuclong.com.vn)

Mission

Phuc Long has 4 main missions:

- First, become a leader with innovative ideas pioneering in the tea and coffee industry.

- Secondly, developing brands together, turning ideas into reality with a spirit of cohesion,
listening and mutual respect, motivating each other.
 - Thirdly, to create the happiness and satisfaction of customers, each individual in Phuc
Long must constantly shine, constantly learn and renew themselves.

- Finally, with all the insight, sympathy and real valuable suggestions, Phuc Long creates
the highest value for customers and satisfy their customers.

(Phuclong.com.vn)

Objectives
Standing in a market with great competition, obtaining market share and standing in the tea and
coffee industry is difficult. With over 50 years of operation in the tea and coffee industry, I
believe that Phuc Long has a certain position in the hearts of customers. It can be able to set
out objectives is by 2020 it can be listed in the top 3 brands of pure tea and coffee in
Vietnam.

Goals
With the desire to dominate the market, Phuc Long can set goals to open new stores in
different areas in big cities like Hanoi, Da Nang and Ho Chi Minh City. Specifically, in 2025,
Phuc Long can open 20 more stores in big cities to satisfy the needs of more customers,
gradually creating a stable firm in Vietnam's tea and coffee industry and develop into the world.
Major Findings
Task 2: The impact and influence which the macro environment has on an organisation and its
business strategies.

To analyze the macro environment for Phuc Long, this report will use PESTEL model
Vietnam is a peaceful country with a stable politics, very convenient for
Political the production and business of enterprises in general and Phuc Long
in particular. Regarding tax policies, according to Vietnambiz.vn
(2018), Vietnam currently has no special consumption tax on sugar
beverages, particularly tea and coffee available. Proposals of 10% tax
rates were made but not yet approved. Therefore, up to this point, this
is still a good opportunity to develop with businesses in the tea and
coffee industry in general and Phuc Long in particular. With the trend
of integration, opening domestic and foreign markets, Vietnam's tea
and coffee industry will have many opportunities to develop into
foreign markets. According to the FAO, in the next decade, black tea
production is forecasted to increase 2.2% per year, estimated to reach
4.4 million tons by 2027. Besides, green tea production also increased
significantly about 7.5% per year and will reach
3.6 million tons by 2027.
=> This will create opportunities for Phuc Long to export tea to the
world but it also poses many challenges in competing with other major
markets in the world.
Economic Inflation rate: According to the Price Management Department (Ministry of
Finance), the average CPI of 2018 increased 3.54% compared to 2017, the average
monthly increase of 0.25%. Inflation was controlled, average inflation in 2018
increased by 1.48% compared to the average of 2017 and kept the average
CPI below 4%. (VnEconomy, 2018). In 3 consecutive years from 2016-2018,
CPI is
always stable (<4%). (thoibaotaichinhvietnam.vn, 2019).

GDP: According to the report, in 2018, GDP growth increased to a record (7.08%).
=> Showing people's lives is changing and there will be more demand for food
and services. This is also a good opportunity for Phuc Long to develop
new products and services with a large number of potential
customers.

The economy grows stably, credit growth reaches 17%, businesses are able to
meet capital requirements.

=> Overall, in 2018 Vietnam's business environment was improved, the

political situation was stable, the economic growth was relatively high,
inflation was maintained at a stable level compared to the other new
economies thereby attracting strong investment flows from abroad.
Social Until 2019, Vietnam has a population
of more than 97 million with an
average age of 31 years. (danso.org,
2019). Most Vietnamese people in big
cities have a habit of
using tea and coffee every day.
Moreover, Vietnamese consumers are
inclined to use organic and natural
products. With raw materials taken
directly from Thai Nguyen tea hill,
Phuc Long brand is associated with the
image of safe and quality products,
thereby attracting more customers to
use the product.

Besides, with increasing income and

life, Vietnamese people are
increasingly interested in enjoying.
According to Tuoi Tre online (2018),
food and beverages account for the
highest proportion of consumers'
monthly spending structure with
35%.
=> This can see the cultural and
social factors positively impacting
Phuc Long's development.

Technology Along with the development of information technology, nowadays there are many
businesses are always trying to bring convenience to customers by using
applications on the phone or laptop to support customers shopping or
participating join other types of financial transactions. Mobile applications also
help companies design marketing campaigns such as introducing new incentive
programs, accumulating points, giving gifts, ... Moreover, people tend to use
social media more and more. This has a direct impact on Phuc Long in
focusing on marketing activities more on social media.
=> Keeping up with the trend of information technology is one of the
challenges for Phuc Long, because information technology develops day by
day, this affects consumer buying habits. If Phuc Long fails to update new
information technologies, they will lose a number of their customers.
Environment In Vietnam, natural disasters, floods and some unpredictable changes from the
weather can affect enterprises' tea growing areas. Owning for its own tea
plantation in Thai Nguyen, the processing of tea and coffee is taken from
the input.
=> Therefore, if natural disasters and floods occur, it will directly affect the output
and quality of raw materials, thereby directly affecting the operation of Phuc
Long.

Legal Up to now, there are no institutions or legal documents restricting participation

in tea and coffee production and business. Therefore, there are many
businesses participating in the industry creating competitiveness for Phuc
Long.
 Based on the evaluation of macro environment through PESTEL model, the report will
evaluate opportunities as well as threats affecting businesses.

- Opportunities:
+ Vietnam has a stable and less volatile economy.
+ Vietnam joined WTO, creating opportunities for Phuc Long to expand import and
export markets through other countries.
+ The market for tea and coffee in Vietnam has the potential for development and
expansion. Potential customers and demand for large tea and coffee markets.
+ Increasing per capita income leading to increased demand.
- Threats:
+ Because the tea and coffee market is growing so there are many domestic and foreign
enterprises entering the market, so Phuc Long faces high competition.
+ The government has many changes in tax policy. Since 2019, the Ministry of Finance
has just completed a draft law on proposing the application of special consumption tax
on sweetened drinks (including tea and coffee) (Vietnambiz.vn, 2018), so if it is
approved by the government, and Phuc Long's business and operation will be
significantly affected.
+ Export markets face many risks, psychology of domestic customers likes to use
foreign goods.

The strategies Phuc Long can apply are market development strategies. Because of its
reputation and position in the tea & coffee market with a stable number of customers, Phuc
Long can continue to expand its market not only in Vietnam but also internationally.
Task 3: An organisation’s internal environment and capabilities

Sources: https://www.researchgate.net/figure/Porters-value-chain-model_fig1_312940672

1. Primary activities
- Inbound logistics:
+ Supplier: Suppliers are important links in the supply chain of businesses. With Phuc
Long, tea and coffee are the main ingredients. With tea, the company selected
scrumptious young green tea buds taken from their own tea hill in Thai Nguyen. With
coffee, the company chooses premium Arabica coffee beans to prepare for its products.
Raw materials are selected through strict inspection and handling processes to ensure
consumer quality and health. With the advantage of owning a system of tea plantations,
farms, factories, dispensing places and shops, Phuc Long's raw materials are always
guaranteed in both quantity and quality, helping the company have many advantages.
+ Storage: After the harvest of tea and coffee, the material will be preserved in storage.
In here, a series of strict requirements are made. Employees are required to carefully
inspect the source of raw materials and remove tea leaves that are crushed, withered
and absolutely free of mold, with coffee beans that must dispose of poor quality coffee
beans because it may affect quality of the whole shipment. Tea and coffee must be
 stored in a cool, dry place and the moisture must be checked regularly because if the
humidity is too high, it will make the tea more susceptible to mold quality.

- Operations:
Production of raw materials and conversion of input materials into products is the main
activity of Phuc Long. Tea leaves are grown by Phuc Long in Phuc Long tea hill in Bao
Loc & Thai Nguyen and cared for by a very strict process, ensuring clean requirements
are no pesticides and no growth stimulants. Tea leaves and tea buds are required to be
rigorously selected, harvested according to techniques that are not crushed. After
harvesting the tea leaves will have to go through the drying period to prevent the
fermentation of tea leaves. After being processed, tea leaves will be carefully packed
into aluminum bags or boxes and stored in Phuc Long's storage. The storage process is
strictly inspected to ensure product quality. (Phuclong.com)
Because Phuc Long has 2 fields of activity: producing and exporting packaged tea and
coffee products and catering services at the store system, material tea bags will be
distributed to Phuc Long’s branches and chain store or export according to order
requirements.

- Outbound logistics:
+ When there are orders, Phuc Long staff will prepare orders according to customers'
requests and deliver them directly (when customers buy directly at the store) or indirectly
(when customers buy online, Phuc Long will deliver the goods to the carrier) to the
customer.
+ To ensure product quality, Phuc Long's packaging is designed with a special liner with
one-way valve to drain water and keep the freshness of the product.

- Marketing and Sale:

Phuc Long did not invest too much in marketing before. Phuc Long's brand promotion
channel is mainly word of mouth advertising based on guaranteed raw materials, high
product quality and good customer service. But with the development of the tea and
coffee industry, competition is increasingly fierce, so Phuc Long forces mines to change
and focus more on marketing and sales. Phuc Long focuses on social media marketing
such as Facebook, YouTube, and Instagram with the investment in content in each
article. Besides, in order to serve the needs of customers, Phuc Long also expanded the
 system chain. Specifically, from the beginning of 2019 to the present time, Phuc Long
has opened 3 stores in different districts in Hanoi to serve the needs of large customers
in here. In the opening day, Phuc Long launched a lot of programs to give gifts to
customers, including porcelain cups, red envelopes, multi-purpose shelves ... In addition,
to meet customers' online purchase needs, Phuc Long also cooperates with delivery
applications such as Delivery Now, Grab Food, ... to bring convenience to customers.

- Services:
Phuc Long always strives to bring customers the best service and quality experience.
Customers can exchange with businesses via hotline phone numbers or via Website,
Email or Facebook.

2. Support activities
- The infrastructure of firm: With Phuc Long, infrastructure is always focused. Phuc Long
often selects large & special locations and most of them are located in major roads and
city centers to attract a large number of customers.
 Infrastructure of Phuc Long is always focused and it supports many other
activities in
Phuc Long. With Inbound logistic, infrastructure activities supporting storage of raw
materials by building factories and warehouses and advanced equipment. With
Marketing and sales activities, Phuc Long has started to invest more in advertising
activities. Besides, Phuc Long often selects nice locations in big cities, invests in
uniforms for employees along with a formal training process to bring satisfaction in
service quality for customers.

- Human resource management: Phuc Long has a young and well-trained staff right from
the beginning. Besides, Phuc Long also owns a team of consultants to run and create
the best working environment for employees.
 With an experienced staff and strict management, Phuc Long's employees are
the
main source to support most of the company's activities. With Inbound Logistic
activities, human resources support in receiving and storing raw materials and
managing them according to a strict requirement. During Operations activities,
people play a role in managing processes until the product is formed or managing
different supply chains within the system. Human resources also support Outbound
Logistic through product quality management and distribution channels
 management. With Marketing and Service activities, human resources play a role
in creating ideas and plans to promote the brand and attract more potential
customers.

- Technology development: Information technology plays an important role in helping Phuc

Long manage customer information as well as managing and synchronizing branches.
By using data networks, Phuc Long can synchronize information between branches,
branches can share data to manage a comprehensive supply chain. In addition, Phuc
Long also applies information technology to expand sales channels, customers can put
Phuc Long tea and coffee through food apps or through the company's website.
 Phuc Long uses information technology to support his Operation activities
through
the synchronization of branch chain information, thereby making it easier to manage
branches. Besides, providing free wifi system and order via app or social network
also helps Phuc Long meet customer needs and support their Service activities and
Outbound logistics

- Procurement: Because Phuc Long's material source is taken from their own tea hill in
Bao Loc, so it is easier for Phuc Long to produce, pack, transport and distribute to
branches. Other materials such as sugar, milk, cakes, ... all have abundant domestic
supplies, so finding other materials with Phuc Long is not too difficult.
 Phuc Long should develop its own strategies for partners to improve
relationships
with suppliers to get good prices and products, support for Operating activities.
 After analyzing Phuc Long's value chain, the report will point out Phuc Long's
core competencies to help them turn them into competitive advantages for
businesses.
➢ Modern technology.
➢ Strong financial capacity.
➢ Large distribution channel in big cities.
 From analyzing the value chain of Phuc Long, the report will assess the strengths
and weaknesses of the business, thereby helping businesses improve their
strategy in the future.
- Strength:

+ Founded in 1968, up to now, Phuc Long has spent more than 50 years of
establishment and development, with the motto "A passion for quality" Phuc Long
 gradually marks in the hearts of customers with pictures of pure tea and create a strong
brand image in the tea and coffee industry.
+ With a wide distribution system and having more than 30 retail stores in big cities,
Phuc Long's current stores in Saigon and other big cities are located in prime locations,
most of them are located in the big road, the most central district of big cities helps Phuc
Long attract many customers.
+ With the franchise system in Vietnam, Phuc Long quickly expanded its distribution
system throughout the big cities.
+ The menu is quite diversity, with traditional tea & coffee and ice-blended drinks like
other foreign brands. Besides, Phuc Long sells all kinds of milk tea and other products
such as moon cake, breakfast foods to serve many different needs and many different
customers.
+ Because owning a private tea source in Thai Nguyen & Bao Loc, the raw material
supply for Phuc Long's operation chain is always ensured both in quantity and quality.

- Weakness:
+ The quality of service is uneven between branches in the same system, at some
branches, customer service is not good as well as the quality of drinks varies between
branches.
+ Phuc Long has not focused on developing marketing activities. Although Phuc Long
has been more interested in implementing marketing activities recently, these activities
are not new and there have been many other coffee shops doing it before.

Task 4: Evaluate and apply the outcomes of an analysis using Porter’s Five Forces model to a
given market sector

Threat of
new With good development potential, the tea and coffee industry always
attracts the investment of many businesses. Besides, the institutions that
entrants join the industry are not complicated, businesses can easily join the
industry. This creates great competitive pressure for businesses. However,
with more than 60 years of joining the industry, Phuc Long has made a mark
in the hearts of customers and has a certain number of loyal customers.
This gives Phuc Long a strong position in the tea and coffee industry and
makes it difficult and threatening to join for other competitors.
=> Overall, the difficulty in joining the industry is MEDIUM

Threat of
competitor Until 2019, Vietnam has more than 97 million people together with relatively
rivalry large demand for tea and coffee consumption in Vietnam, Vietnam tea
and coffee market witnessed the strong development of many large coffee
chains. Phuc Long faces great competition with Vietnamese brands like
H Trung Nguyen, Cong Coffee, The Coffee House or Urban Station, ..
i and foreign competitors such as Starbucks or The Coffee Bean & Tea Leaf,
g ... Compared to competitors in the industry, we can see Phuc Long's
h advantage in the menu is quite rich from tea, coffee to fruit juice,
l smoothies, breakfast ... It can be said that Phuc Long currently
a occupying the market in both segments of tea and coffee drinks,
n complementing each other in the very competitive and diverse beverage
d market. Besides, Phuc Long's drinks have very reasonable prices along with
s relatively good quality and service, which creates a competitive advantage
, for Phuc Long.
=> Overall, the level of rivalry between existing competitor is HIGH

Bargaining Nowadays, Phuc Long has a production system that works extremely
power of effectively when the raw materials used for tea and coffee production
processes are derived from tea hills in Thai Nguyen & Bao Loc , which
suppliers owned and managed by Phuc Long. It means that Phuc Long is the
supplier of input materials for his production. Other ingredients used to
make drinks are not too complicated so competitive pressure from suppliers
is not a problem that Phuc Long does face at the moment.
=> Overall, the bargaining power of suppliers is LOW

Bargaining
power of While Starbucks and The Coffee Bean & Tea Leaf locate high-end brands
buyers when targeting high-income office workers and foreigners who are familiar
with the taste of foreign coffee. Trung Nguyen locates a mid-range brand
but clearly identifies customers who love traditional coffee flavor. And the
good thing of Phuc Long is to target more diverse customers, from
employees, tourists to students. The price is suitable with the budget of
the majority of people along with diversified menu of all kinds of drinks
suitable for each customer, making Phuc Long meet a large number of
customers' needs.
Moreover, compared to other coffee shops, the price in Phuc Long is
very reasonable, for example with milk tea, the selling price in Phuc Long is
about 25,000 VND - 45,000 VND / 1 cup, accounting for 50 - 70% of the
price from Trung Nguyen, or 30% - 50% of the selling price of Starbucks and
The Coffee Bean & Tea Leaf, it is clear that Phuc Long's price is somewhat
lower than its competitors. Therefore, it is difficult for customers to put
pressure on Phuc Long's price. However, Phuc Long also needs to build
more advertising campaigns to pull customers back to them and turn them
into their close customers.
=> Overall, the bargaining power of buyers is MEDIUM

Threat of substitutes
W variety of alternative products such as fast food, canned drinks, nut
i milk, drinks available from supermarkets, convenience stores, vending
t machines, ... with transfer costs low exchange consumers can easily
h buy these products instead of using Phuc Long's products. In addition,
many replacement products are affordable and lower cost than Phuc
Long's products. Therefore, the threat of replacement has a strong
a impact on Phuc Long.
=> Overall, threat of substitutes is MEDIUM

 Competitive advantages:

The first competitive advantage of Phuc Long is place. In particular, Phuc Long was placed in
favorable traffic locations, crowded with passersby in the heart of the big cities, so it was easy to
draw people's attention. Moreover, in Ho Chi Minh City, it is not too difficult to identify Phuc Long
brand, it is located near rival stores in the area of District 1 (the central district of the city). By
taking advantage of home turf to choose to compete directly with Starbucks and other foreign
coffee brands, Phuc Long has been up-branding them with these big guys, and has turned to
the international market through visitors to Vietnam.
Secondly, price is also a competitive advantage of Phuc Long. Phuc Long owns available tea
hills in Bao Loc and Thai Nguyen, factories, dispensers so Phuc Long can take initiative in raw
materials, so product costs to consumers are reasonably controlled. Based on the available
strength of tea and coffee, Phuc Long builds a quite extensive menu, with traditional tea and
coffee and ice-blended drinks no different from foreign brands but the price is only about 25,000
- VND 45,000 that customers can still fully experience in a modern and luxurious space. For this
reason, Phuc Long is suitable for a wider customer segment from commuters, tourists to
students, and they can choose to come here regularly with this price instead of big brands that
focus on high-income customer segment. The price suitable for the majority of people can help
Phuc Long to bring its brand to all consumers in the fastest way.
The last advantages are product. Unlike milk tea of other brands, Phuc Long tea does not use
pearls, so there will be no industrial scent. In particular, they are not too many sugar or have
many blue or red hues. The criterion of a delicious glass of milk tea in Phuc Long is the milk-
flavored fat, but still has a strong taste of tea. Thanks to that, the brand's milk tea cups always
leave the user a very unique taste without chemical smell. In addition, Phuc Long's menu is also
diversified by a wide range of products such as specialty teas, coffee, ice-cream coffee, fruit
juices, smoothies and especially milk tea.

After analyzing Porter’s Five Forces, it can be said that, Phuc Long faces high competition in tea
and coffee industry. Not only competing highly with domestic competitors such as Trung
Nguyen, The Coffee House, Highlands Coffee, Phuc Long but also faces competition from
foreign businesses such as Starbucks, The Coffee Bean, ... In order to increase Competitive
advantage and improving its position in the market, one of the strategies that Phuc Long has
successfully applied is Cost leadership strategy. Phuc Long cafe & tea has adopted a cost
leadership strategy and it seems that this strategy has helped Phuc Long to bring its brand to all
consumers in the fastest way. The appeal of Phuc Long coffee brand comes from product
quality, characterized by peach tea and milk tea at an affordable price. Chain stores Phuc Long
is developing in two ways: Take away express to serve ordinary customers with the price ranges
from 28,000-35,000 VND with some common drinks such as iced milk, hot coffee and tea.
dig…; Take away house for customers with higher income, average drink price 40,000 - 42,000
VND. However, this is still the average price and suitable for the majority of people. Moreover,
not because the price is lower than other big brands like Starbucks, Highlands Coffee but Phuc
Long's quality is worse. In fact, the location of most of Phuc Long's facilities is located in
crowded places in large roads, space and modern facilities, customers can fully experience the
architectural space. Luxury with good product quality but with a localized price.
Task 5: Apply models, theories and concepts to assist with the understanding and interpretation
of strategic directions available to an organisation
From the analysis of external and internal factors, the report will use two tools, SWOT analysis
and SPACE analysis, to help Phuc Long develop appropriate and effective strategies.

1. SWOT analysis
Opportunities (O) Threats (T)
O1: Vietnam's economy is T1: High competition. There
stable, less volatile than are many domestic and
Asian countries. foreign enterprises entering
O2: Vietnam joined WTO the market.
creating an opportunity to T2: The government has
expand import and export many changes in tax policies
markets. T3: Customers: Export
O3: The market for tea and markets face many risks,
coffee in Vietnam has the psychology of domestic
potential to grow and expand. customers likes to use
Potential customer base and foreign goods.
large consumption of tea and
coffee.
O4: Per capita income is
increasing => Demand for
consumption increases.
Strength (S) S-O strategies S-T strategies

S1: Has a strong brand name S1, S5 and O2, O3, O4: S1, S5 and T1, T3:
and image in the tea and Thanks to its brand name, With great opportunities and
coffee industry. strong image and available potential for development, the
S2: Wide distribution system raw materials to ensure both tea and coffee markets
with more than 30 retail quality and quantity, Phuc always attract many domestic
stores in major cities. Long can focus on market and foreign enterprises to
S3: Nice location development strategy. invest in. Taking advantage of
S4: Has a franchise system. Specifically, Phuc Long can the brand's reputation, and its
S5:Raw materials are expand branches not only in great position in the tea and
guaranteed because Phuc the country but also abroad, coffee industry along with the
Long owns its own tea hill in to bring the company's image advantage of excellent raw
Bao Loc. to other countries around the materials, Phuc Long can use
world. product development
S1, S2, S3, S4 and O1, O3, strategy to increase its
O4 competitive advantage in tea
From their strengths, Phuc and coffee market.
Long can use brand
positioning strategy by
creating a unique impression
for their products.
Specifically, Phuc Long can
locate based on quality and
value. The brand positioning
will help Phuc Long create its
prestige and attract a large
number of customers in the
domestic and foreign
markets,
Weakness (W) W-O strategies W-T strategies
W1. The quality of service W1 and O1, O3: W1 and T1:
and product is uneven The management of With these inefficient stores,
between franchise cafes in franchise stores needs to be Phuc Long can cut it and
the same system. done more closely to ensure focus on investing in stores
W2: Marketing activities have quality consistency between that operate well, have a
not been focused on stores. competitive advantage,
development. W2 and O1, O2, O3, O4: thereby increasing the
Marketing activities need to effectiveness of competition
be more focused to increase with other competitors in the
the brand identity of domestic industry. Besides, with
and foreign customers. products that customers have
Besides, Vietnam joining not responded well, Phuc
WTO also creates conditions Long should improve or
for Phuc Long to expand its eliminate it to avoid affecting
business to foreign countries, the brand.
Phuc Long can use market
 penetration strategy to
foreign markets.

2. SPACE analysis

Financial Strengths (FS) Ratin

g
Economic scale: Up to now, Phuc Long has developed with more than 44 branches +4
in big cities like Ho Chi Minh, Hanoi, Khanh Hoa, Da Nang, ... Besides, Phuc Long
also exporting tea and coffee products to other major foreign markets such as
Japan, the Philippines, the United States, Indonesia and Cambodia
(doanhnhanonline, 2017). In terms of revenue, Phuc Long has a stable revenue
growth, about 7% a year ( data in 2017) (VnExpress, 2018).
Inventory turnover: Inventory turnover in Phuc Long is at average level, with +3
materials mainly tea and coffee. Regarding tea, the raw materials are taken from
Phuc Long tea hill in Bao Loc & Thai Nguyen, with a wide distribution network both
at Vietnam and foreign markets, so the inventory turnover is not too high. Regarding
coffee, Phuc Long often imports a large amount of coffee from suppliers so it cannot
avoid inventory but due to the long storage time of coffee, Phuc Long always
ensures availability when the demand increases dramatically. About other
ingredients such as fruits, milk, cakes, ice cream are imported during the day and
used in a short time to ensure product quality so there is no revenue on inventory.
+7

Competitive advantages (CA) Ratin

g
Market share: With over 50 years in the tea and coffee industry, Phuc Long has -3
gained a relatively large market share in the tea and coffee industry, only for the milk
tea market, although it is not the main product, Phuc Long has accounting for 13%
of the market for milk tea in the Ho Chi Minh City (Khanh Trieu, 2017). However,
with great competitive pressure from foreign brands such as Starbucks or The
coffee bean,.. as well as from Vietnamese brands like Highlands, The Coffee
House,… it
will be difficult for Phuc Long to quickly expand its market share in the short term.
Product quality: Because Phuc Long's materials are taken from their tea plantations, -1
the quality of raw materials is always ensured with careful processing and unique
recipes that make Phuc Long's products always keep good quality.
Customer loyalty: Not only providing diverse products, good quality and affordable -2
prices, Phuc Long also gives customers the best service through the attitude of
employees as well as policies for customer. Besides, Phuc Long has constantly
launched various products such as moon cake, freeze fruit, smoothie, ... to meet
customers' needs. For that reason, Phuc Long has owned a large number of loyal
customers.
Stable supply: Because of own tea hill in Bao Loc & Thai Nguyen, Phuc Long's -1
supply of main ingredients is guaranteed both in quality and quantity.
-7

Environmental Stability (ES) Ratin

g
Change in demand: Customers' needs are changing and their demands are getting -2
higher. With a variety of products as well as good quality, Phuc Long can fully meet
the needs of customers.
Competitive pressure: Phuc Long faces great competitive pressure from both foreign -5
businesses such as Starbucks, The Coffee Bean, .. and domestic businesses such
as Highlands, Trung nguyen, The Coffee House, ..
Pressure from substitute products: As mentioned in the previous section, Phuc Long -4
faces competition from other substitutes such as fast food, dairy products, ...
-11

Industry Strengths (IS) Ratin

g
Potential growth: The market for tea and coffee in Vietnam has the potential to grow +2
and expand. Potential customer force and consumption of tea and coffee are quite
large. Therefore, Phuc Long has opportunities and high development potential. In
particular, when people's income increases, they will spend more money on their
enjoyment of life, which will bring development advantages for the tea and coffee
industry in general and Phuc Long in particular.
The complexity of entering the industry: With new businesses entering this market, +3
they will face enormous competitive pressure from well-known enterprises such as
Starbucks, Highlands, The Coffee House and Phuc Long, .. So the risk is quite high,
which will help Phuc Long reduce its competitors. Therefore, threats to new
companies are not high.
Profit potential: In addition to supplying to the domestic market, Phuc Long also +4
expands its exports to foreign markets such as Japan, America, Indonesia, ... and in
the future is expanding to many other countries. This will help Phuc Long increase
its profit significantly.
Price stability: Vietnam has a stable economy along with low inflation so the general +4
price for tea and coffee products is stable.
+13

• FS average is 7/2 = 3.5

• IS average is -7/4 = -1.75
• ES average is -11/3 = - 3.67
• CA average is 13/4 = 3.25
 IS + CA = -1.75 + 3.25 = 1.5
 FS + ES = 3.5 + (-3.67) = -0.17

Thus, through the development of the SPACE matrix for Phuc Long, the results show that Phuc
Long has a quite competitive advantage in an unstable development industry, a strategy
suitable for Phuc Long is a competitive strategy, including strategies such as vertical upside
down, vertical downstream, cross-linking, market penetration, market development, product
development. Results from the SWOT analysis also show that Phuc Long can use strategies
such as market penetration, market development and product development. Therefore, it can be
said that the results between SPACE analysis and SWOT analysis are the same.

Conclusion
By analyzing the external influences as well as the internal environment of the enterprise, the
report developed SWOT and SPACE models to help Phuc Long find appropriate strategies and
help PL take advantage Get the advantages to gain opportunities as well as eliminate
weaknesses and challenges. The report is expected to help Phuc Long develop further and
create a better position in the tea and coffee industry in the near future.

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