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Pathophysiology (NSG 211)
Marian University
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Table of Contents
Introduction......................................................................................................................
Major Findings.................................................................................................................
Task 2: The impact and influence which the macro environment has on an organisation and its business strategies................................................................................................... Task 3: An organisation’s internal environment and capabilities...................................... Task 4: Evaluate and apply the outcomes of an analysis using Porter’s Five Forces model to a given market sector.......................................................................................... Task 5: Apply models, theories and concepts to assist with the understanding and interpretation of strategic directions available to an organisation................................. 5
Conclusion.....................................................................................................................
References.....................................................................................................................
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, 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)
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.
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
P olitical Vietnam is a peaceful country with a stable politicsthe production and business of enterprises in gener, very convenient for al and Phuc Long in particular. Regarding tax policies, according to VieVietnam currently has no special consumption tax ontnambiz (2018), sugar beverages, particularly tea and coffee available. Proposals ofmade but not yet approved. Therefore, up to this po 10% tax rates were int, this is still a good opportunity to develop with businesses in the tea angeneral and Phuc Long in particular. With the trend of integration, opening d coffee industry in domestic and foreign markets, Vietnam's tea and cofmany opportunities to develop into foreign markets. According to the FAO, fee industry will have in the next decade, black tea production is forecasper year, estimated to reach 4 million tons by 2027. Besides, green tea ted to increase 2% production also increased significantly about 7% 3 million tons by 2027. per year and will reach => This will create opportunities for Phuc Long to ebut it also poses many challenges in competing with xport tea to the world other major markets in the world.
E conomic Inflation rate Finance), the average CPI of 2018 increased 3% compared t: According to the Price Management Department (Ministo 2017, the average ry of
monthly increase of 0%. Inflation was controlled, avincreased by 1% compared to the average of 2017 and kerage inflation in 2018 ept the average CPI below 4%. (VnEconomy, 2018). In 3 consecutive years fralways stable (<4%). (thoibaotaichinhvietnam, 2019). om 2016-2018, CPI is
GDP => Showing people's lives is changing and there will: According to the report, in 2018, GDP growth increas be more demand for food ed to a record (7%). and services. This is also a good opportunity for Phucproducts and services with a large number of potential custome Long to develop new rs.
The economy grows stably, credit growth reaches 17%, meet capital requirements. businesses are able to
=> situation was stable, the economic growth was relativOverall, in 2018 Vietnam's business environment was improved, the political ely high, inflation was maintained at a stable level compared to the other attracting strong investment flows from abroad. new economies thereby
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, 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: researchgate/figure/Porters-value-chain-model_fig1_
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
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
Threat of competitor rivalry
Until 2019, Vietnam has more than 97 million people large demand for tea and coffee consumption in Vietnatogether with relatively m, Vietnam tea and coffee market witnessed the strong development of maPhuc Long faces great competition with Vietnamese brands like Highlands, Trung ny large coffee chains. Nguyen, Cong Coffee, The Coffee House or Urban Stationcompetitors such as Starbucks or The Coffee Bean & Tea Leaf, ... Compared to , .. and foreign competitors in the industry, we can see Phuc Long's quite rich from tea, coffee to fruit juice, smoothies, breakfast ... It can be said advantage in the menu is that Phuc Long currently occupying the market in bocoffee drinks, complementing each other in the very cth segments of tea and ompetitive and diverse beverage market. Besides, Phuc Long's drinks have vwith relatively good quality and service, which creates a competitive advantage ery reasonable prices along for Phuc Long. => Overall, the level of rivalry between existing competitor is HIGH
Bargaining power of suppliers
Nowadays, Phuc Long has a production system that worwhen the raw materials used for tea and coffee production processes are derived ks extremely effectively from tea hills in Thai Nguyen & Bao Loc , which ownLong. It means that Phuc Long is the supplier of ined and managed by Phuc put materials for his production. Other ingredients used to make drinks arcompetitive pressure from suppliers is not a problem that Phuc Long does face at e not too complicated so the moment. => Overall, the bargaining power of suppliers is LOW
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
Bargaining power of buyers
While Starbucks and The Coffee Bean & Tea Leaf locatetargeting high-income office workers and foreigners wh high-end brands when o are familiar with the taste of foreign coffee. Trung Nguyen locates a mid-identifies customers who love traditional coffee flavor. And the good thing of Phuc range brand but clearly Long is to target more diverse customers, from emplThe price is suitable with the budget of the majorioyees, tourists to students. ty of people along with diversified menu of all kinds of drinks suitable for Long meet a large number of customers' needs. each customer, making Phuc Moreover, compared to other coffee shops, the price reasonable, for example with milk tea, the selling price in Phuc Long is about in Phuc Long is very 25,000 VND - 45,000 VND / 1 cup, accounting for 50 - Nguyen, or 30% - 50% of the selling price of Starbucks and The Coffee Bean & Tea 70% of the price from Trung Leaf, it is clear that Phuc Long's price is somewhaTherefore, it is difficult for customers to put presst lower than its competitors. ure on Phuc Long's price. However, Phuc Long also needs to build more advertiscustomers back to them and turn them into their close custoing campaigns to pull mers. => Overall, the bargaining power of buyers is MEDIUM
Threat of substitutes
With a variety of alternative products such as fastmilk, drinks available from supermarkets, convenien food, canned drinks, nut ce stores, vending machines, ... with transfer costs low exchange consuthese products instead of using Phuc Long's productmers can easily buy s. In addition, many replacement products are affordable and lower cost tproducts. Therefore, the threat of replacement has a strong impact on han Phuc Long's Phuc Long. => Overall, threat of substitutes is MEDIUM
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 stable, less volatile than Asian countries. O2: Vietnam joined WTO creating an opportunity to expand import and export markets. O3: The market for tea and coffee in Vietnam has the potential to grow and expand. Potential customer base and large consumption of tea and coffee. O4: Per capita income is increasing => Demand for consumption increases.
T1: High competition. There are many domestic and foreign enterprises entering the market. T2: The government has many changes in tax policies T3: Customers: Export markets face many risks, psychology of domestic customers likes to use foreign goods.
Strength (S) S-O strategies S-T strategies
S1: Has a strong brand name and image in the tea and coffee industry. S2: Wide distribution system with more than 30 retail stores in major cities. S3: Nice location S4: Has a franchise system. S5:Raw materials are guaranteed because Phuc
S1, S 5 and O 2 , O3, O4: Thanks to its brand name, strong image and available raw materials to ensure both quality and quantity, Phuc Long can focus on market development strategy. Specifically, Phuc Long can expand branches not only in the country but also abroad,
S1, S5 and T 1 , T 3 : With great opportunities and potential for development, the tea and coffee markets always attract many domestic and foreign enterprises to invest in. Taking advantage of the brand's reputation, and its great position in the tea and coffee industry along with the
Long owns its own tea hill in Bao Loc.
to bring the company's image to other countries around the world. S1, S2, S3, S4 and O1, O3, O From their strengths, Phuc 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,
advantage of excellent raw materials, Phuc Long can use product development strategy to increase its competitive advantage in tea and coffee market.
Weakness (W) W-O strategies W-T strategies W1. The quality of service and product is uneven between franchise cafes in the same system. W2: Marketing activities have not been focused on development.
W1 and O1, O 3 : The management of franchise stores needs to be done more closely to ensure quality consistency between stores. W2 and O1, O2, O3, O4: Marketing activities need to be more focused to increase the brand identity of domestic and foreign customers. Besides, Vietnam joining WTO also creates conditions for Phuc Long to expand its business to foreign countries, Phuc Long can use market
W1 and T 1 : With these inefficient stores, Phuc Long can cut it and focus on investing in stores that operate well, have a competitive advantage, thereby increasing the effectiveness of competition with other competitors in the industry. Besides, with products that customers have not responded well, Phuc Long should improve or eliminate it to avoid affecting the brand.
recipes that make Phuc Long's products always keep good quality. Customer loyalty: Not only providing diverse products, good quality and affordable 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.
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Stable supply : Because of own tea hill in Bao Loc & Thai Nguyen, Phuc Long's supply of main ingredients is guaranteed both in quality and quantity.
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Environmental Stability (ES) Ratin g Change in demand: Customers' needs are changing and their demands are getting higher. With a variety of products as well as good quality, Phuc Long can fully meet the needs of customers.
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Competitive pressure: Phuc Long faces great competitive pressure from both foreign businesses such as Starbucks, The Coffee Bean, .. and domestic businesses such as Highlands, Trung nguyen, The Coffee House, ..
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Pressure from substitute products: As mentioned in the previous section, Phuc Long faces competition from other substitutes such as fast food, dairy products, ...
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Industry Strengths (IS) Ratin g Potential growth: The market for tea and coffee in Vietnam has the potential to grow 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.
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The complexity of entering the industry: With new businesses entering this market, 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.
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Profit potential: In addition to supplying to the domestic market, Phuc Long also expands its exports to foreign markets such as Japan, America, Indonesia, ... and in
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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 price for tea and coffee products is stable.
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FS average is 7/2 = 3. IS average is -7/4 = -1. ES average is -11/3 = - 3. CA average is 13/4 = 3. IS + CA = -1 + 3 = 1. FS + ES = 3 + (-3) = -0.
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
- business-strategy-phuc-long 2021 hello
Course: Pathophysiology (NSG 211)
University: Marian University
