TRUNG NGUYÊN LEGEND CASE STUDY

TRUNG NGUYÊN LEGEND

CASE STUDY

NICE GRIL GROUP*

About Trung Nguyên Legend
Trung Nguyên Legend Group is an enterprise operating in the
fields of production, processing of coffee, franchise, distribution,
retail, and tourism services. Trung Nguyen Coffee is one of the
leading famous brands in Vietnam and is present in over 60
countries around the world. Over 23 years, Trung Nguyen Legend
brand image has constantly grown and maintain many impressive
achievements. In 2012, Trung Nguyen was voted as the most
favorite coffee brand by Vietnamese consumers. Trung Nguyen
Coffee is the No. 1 Brand in Vietnam with the largest number of
coffee consumers. There are 11 million / 17 million Vietnamese
households buying Trung Nguyen coffee products. Particularly, G7
coffee products, always keep leading the market share and hold
the most favorite position for many years.
This case study focuses on some various aspects of Trung
Ngyen Legend and the long term brand name maintenance
strategies which have sustained Trung Nguyen’s position as a
market leader for over twenty three years.

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 Content

1 STAKEHOLDERS

2 BUSINESS ENVIRONMENT

3 GLOBAL MARKET

4 BASIC FORMS OFBUSINESS OWNERSHIP

5 MANAGEMENT

6 PRODUCTION& OPERATIONS MANAGEMENT

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 1
Stakeholders
STAKEHOLDERS

The needs of stakeholders for organizations of the 21st century is indisputable. For Trung
Nguyen, stakeholders are so various including owners/managers, suppliers, employees,
distributors, customers, investors and competitor

Suppliers: Trung Nguyen selects from the 4 best raw material areas:Robusta coffee
beans- Buon Ma Thuot, Arabica beans of Jamaica, coffee beans from the original homeland
of coffee -Ethiopia and Brazil
Employees: Trung Nguyen Group has about 2000 employees in Viet Nam and
Singapore.In addition, Trung Nguyen also indirectly creates jobs for more than 15,000
employees through a system of 1,000 franchised cafes across the country.
Distributors: Trung Nguyen has taken advantage of both traditional (supermarkets
and agency) and modern distribution methods (G7 mart system) to achieve the greatest
results.

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 Governments/Regulators: Trung Nguyen Legend has the interests of numerous
governments as stakeholders and is responsible to follow the rules and regulations
Customers: Trung Nguyen Legend ’s customers is plentiful. The interests of this
stakeholder group are high quality service and products. Throughout chain beverage
stores, Trung Nguyên Legend extends culture to customers
Competitors: In each market segment, Trung Nguyen has different competitor. For
example, some famous brand in the domestic coffee market (Highland, Starbuck...), in
the instant coffee market (Vinacafe, Nestle, …) Regarding the international market: the
ability to compete with foreign businesses, especially large corporations and local brand.
Owners/ Managers: Founder/ CEO: Đặng Lê Nguyên Vũ, Executive Director: Đỗ
Đình Đức,Administration, HR Department: Văn Thị Nga. All of them contribute to make
planning, manage strictly to develop Trung Nguyen brand widespread over the world

Outsourcing
About Information Technology, Trung Nguyen Company has partnerships with IBM
and local partner Digi-InfoFabrica to migrate its mission-critical SAP ERP applications to
the IBM Cloud™ in order to modernize the business processes and systems, and to
manage everything from production to their supply chain and distribution through to sales
and finance:
Coffee is one of Vietnam’s key exports, and the country produces millions of tons of
Robusta and Arabica beans each year. Trung Nguyên Legend Corp.’s mission is to bring
Vietnamese coffee culture to the world and become a major global coffee brand.To make
its expansion aims a reality, Trung Nguyên Legend Corp. must be lean and flexible
enough to react quickly to market developments and seize new opportunities. To boost
business agility, Trung Nguyên Legend Corp. chose to migrate its SAP ERP business
applications to IBM Services for Managed SAP Applications.
They rely on SAP enterprise resource planning (ERP) applications to manage
everything from production to our supply chain and distribution through to sales and
finance.They moved from on-premises infrastructure, which was time-consuming to
manage, expensive to maintain and difficult to scale to a cloud model( cloud
computing).They looked at offerings from several cloud vendors and settled on IBM
Services for Managed SAP Applications which is a fully managed service. This means
that, as well as taking care of all the back-end infrastructure, IBM also handles the
application management and maintenance. The longstanding IBM collaboration with SAP
gave Trung Nguyen the confidence to entrust them with their most critical business
applications.IBM also helped Trung Nguyen to migrate their SAP ERP applications to
SAP HANA as part of their cloud modernization project. They worked closely with both
IBM and a local SAP partner, Digi-InfoFabrica, to migrate to the SAP HANA platform
before moving their entire SAP landscape to the IBM Cloud.

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 By migrating from on-premises infrastructure to super-flexible cloud computing, they
have dramatically increased business agility.The beauty of Managed SAP Applications is
that Trung Nguyên Legend Corp. no longer needs to think about infrastructure at all. IBM
takes care of everything. Not only does this save a great deal of time and effort, it has
also significantly reduced costs as the Group no longer needs to buy and maintain
hardware. Trung Nguyên Legend Corp. estimates that, over a five-year period, it will
reduce the total cost of ownership by 43 percent.
Since moving to SAP HANA on Managed SAP Applications, Trung Nguyên Legend
Corp. has also seen a huge boost in performance. SAP applications are now running up
to 30 times faster than they did before and reports are available much faster too, enabling
employees to work more productively.
Trung Nguyên Legend Corp. has received very positive feedback from employees
since it moved to Managed SAP Applications. The dramatic performance improvement
has significantly reduced loading times and gives employees much faster access to the
information they need to get on with their work.Crucially, the move from on-premises IT to
Managed SAP Applications is a major step in Trung Nguyên Legend Corp’s journey to
becoming a lean, agile, digitally-driven enterprise and one of the world’s leading coffee
brands.
Supported by IBM and SAP, Trung Nguyên Legend Corp. is already looking at
augmenting its SAP landscape with big data analytics, artificial intelligence and
blockchain technologies to support innovative new e-commerce and omni-channel
marketing efforts.With Managed SAP Applications, the sky’s the limit for Trung Nguyên
Legend Corp. Supported by IBM and SAP, the Group is very confident that it can make
its global expansion goals a reality.

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 2 BUSINESS ENVIRONMENT
Businesses that create wealth and jobs grow and prosper in a healthy environment. Thus,
creating the right business environment is the foundation for social benefits of all kinds,
including good schools, clean air and water, good health care, and low rates of crime.
Businesses normally can’t control their environment, but they need to monitor it carefully
and do what they can to adapt as it changes. The business environment consists of the
surrounding five factors that either help or hinder the development of businesses

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 Economic
and Legal

Firstly, Viet Nam has stable political

VietNam economy is in the period of
environment, under the regime of a
recovery and development after the
single party- Communist Party,
crisis. At present, it is quite unstable
increasingly affirmed its position on the
because the growth rate increases but
international market. On the other hand,
it is accompanied by an increase in
Vietnamese legal system and laws have
inflation and a devaluation of the
been improved. Administrative
currency, which makes it difficult for
procedures are cut down, tariff barriers
Trung Nguyen's business activities,
are no longer harsh due to the impact of
especially in collecting and buying
integration, however, the tax system and
ingredients.The ceiling interest rate
tax management still have many
policy is promoting well, loan interest
shortcomings. With these regulations,
rate is currently about 7%/year.
Trung Nguyen will be supported by
Infrastructure has not proportionately
government to increase competitive
with the speed of economic
advantages compared to foreign
development.
companies but have to maintain tax
payment.

Competitive
Competitive

Customers: Trung Nguyen has two kinds of customers. Firstly, this is

individual consumers:Their behaviour depends on the culture, the society,
the psychology and themselves… Trung Nguyen Legend has effective
advertising and promotion policies, with reasonable prices suitable for
many people's pockets. Secondly, this is business customers: Trung
Nguyen is the first company to apply franchise business in Vietnam.

Marketing intermediaries: Trung Nguyen has a network of almost 1,000

franchised cafes across the country and 8 foreign cafes, more than 1,000
convenience stores and G7 mart distribution centers nationwide.

Suppliers: The raw materials for the production process originate from
coffee farms, which are applied UTZ standards, invested and managed
by Trung Nguyen. They are on-going program to expand 1,000 hectares
of sustainable coffee in Dak Lak, increasing the total area of raw
materials to 2500 hectares.

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 Science and Technology: Vietnam has a large
network of science and technology
Technical organizations over 1100 research organizations
which are 2% of the state budget annually
Vietnamese technology knowledge is
increasingly advanced, but still some
limitations. For Trung Nguyen, with technical
technology: one of the most modern coffee
processing plant in the world with investment
over $ 40 million

Social
Geography: The Vietnamese climate is tropical monsoon, rainy, diverse
terrain and large basalt area favorable to develop high-quality coffee raw
material. Its coffee planting area is 500000 ha of coffee. However, the
material area is at risk of being narrowed due to aging coffee area. Moreover,
Trung Nguyen has a great advantage of having a factory located in the capital
of coffee plant- Buon Ma Thuot, so that transportation is not a problem.
Besides, Trung Nguyen built its own coffee farm to supply raw materials to
make sure that shipping and purchasing rates are as low as possible.
Culture and society: Vietnamese people are industrious, creative, patriotic
and have a great national spirit. Especially with the factor- "Vietnamese
brand" (home advantage): The national spirit and cultural factor is a huge
"force" in marketing. Trung Nguyen has exerted that strength by gathering
the support of Vietnamese consumers.The use of coffee beans of the
Central Highlands forest land as a Vietnamese-style instant coffee product
has hit the customers' minds :Nobody understands Vietnamese as
Vietnamese themselves

Demographic changes: Vietnam has the speed of population growth

rapidly, high rate of natural increase, high population density and young
population structure. Due to large population size with a young
population structure, it is convenient in developing young human
resources with high quality skills. In addition, this is also a Trung Nguyen
potential market.
Environment: The combination of modern technology and the
secrets of the mysterious East is the unique features in Trung
Nguyen.Trung Nguyen transferred technology which is
environmentally friendly by the world's leading corporations. From a
small coffee roaster factory, Trung Nguyen has now grown into a
corporation with solid infrastructure.

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 The Global
Environment

By Joining WTO, Vietnam's coffee industry has made a

new transformation, especially Trung Nguyen is known
not only in the country but also in foreign markets,
creating more development orientations. These have a
significant impact on the expansion of the market, as well
as attracting investors, increasing sales, access to
advanced technologies, modern production lines,
improving productivity ... of Trung Nguyen.However, these
also are challenges for Trung Nguyen when competing
with similar products of foreign companies imported into
Vietnam.

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 3 GLOBAL MARKET

Strategies for reaching global market

In the beginning, the company established the first coffee shop in Ho Chi
Minh City as the first step for the establishment of the Trung Nguyen system
in all provinces and cities of Vietnam. Trung Nguyen then continued
successful franchising in Japan and Singapore. As of 2010, Trung Nguyen's
products are exported to more than 60 countries worldwide. Trung Nguyen
Legend uses two key strategies including exporting and franchising Each
provides different economic opportunities,along with specific commitments
and risks

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Franchising
Trung Nguyen was a pioneer of franchising system in VietNam.To Trung Nguyen, a
franchisee must always focus on the results of the win-win-win model, in particular, all
three parties will receive benefits, including the seller (Trung) Nguyen) - franchisee (shop
owner) -consumers.Trung Nguyen has a daily consumption system that does not take
capital, while owners who borrow Trung Nguyen's brand can rely on a famous brand to
run more sales, get higher profits.
Facing the fierce battle of the coffee market, Trung Nguyen Legend recently launched
a series of retail coffee shops that follow the E-Coffee franchise model to a franchise and
management fee is 0 dong. This model has created a strong wave of registration from
franchise partners.
In regarding to the global market. Constantly, Trung Nguyen expands the distribution
system through franchising, this is an extremely important business strategy of Trung
Nguyen. In addition, to having successfully covered brands in more than 60 provinces
and cities across the country, Trung Nguyen has strived to bring the brand name of
Vietnamese coffee to a number of major countries in the world.

In 2003, Trung Nguyen was officially present in Roppongi (the most

luxurious district in central Tokyo, Japan) - with a cup of coffee
priced higher than Starbucks, a "giant" brand of coffee in the world
at that time. This is also the first time a Vietnamese brand has
franchised abroad.

Trung Nguyen continues to “approach” Singapore - Asian shopping

paradise, at the most favorable locations such as Marina Bay Sands
resort, Liang Court building, Katong Mall complex, etc

In 2006, Trung Nguyen Coffee Company officially opened the

first franchised coffee shop in China located in Nam Ninh city.
This is the first coffee shop in foreign countries to apply Trung
Nguyen's new franchise standardization system (E-Coffee
system).

In the framework of participating in the International Coffee

and Tea Festival held at Meyden Hotel, Dubai from 12-14
November 2014, Trung Nguyen Coffee Group and Global
Hotels Management LLC (GHM) officially signed and
cooperated on opening coffee chains and distributing Trung
Nguyen's coffee products in Dubai and UAE.

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 Export
After more than 20 years, Trung Nguyen brand has been present in more than 80
countries and territories around the world, such as the United States, Asean, Japan, Canada,
Singapore and China.
Trung Nguyen Legend's coffee products have been selected as "diplomatic ambassadors"
connecting Vietnamese culture to the world. G7 is one of the most popular instant coffee
products.
In Asia, after opening of a representative office in Shanghai in November 2017, Trung
Nguyen Legend continuously promoted promotional activities, bringing Trung Nguyen
Legend's coffee products to sell widely on all large and reputable sales sites such as Alibaba,
Taobao.com, Tmall.com, Yihaodian.com, etc as well as over 1,000 supermarkets in China.
Roasted coffee products are popular in supermarkets and shops. In the US, Germany,
Eastern Europe, France, Russia, with its efforts, Trung Nguyen researched and produced
mink coffee exported to developed countries.

Trade protectionism

Free trade agreement with EU EVFTA

has been signed, which is expected to
be an opportunity to help coffee
export prosper. Because the EU is one
of the important markets of Vietnam.
When EVFTA takes effect, about 93%
of tax lines of the coffee industry will
be reduced to 0

When Trans-Pacific Partnership (TPP) is

officially completed, there are two countries
applying Vietnam's import tax rates of Mexico
(20.0%) and Peru (11.0%). Thus, when joining
TPP, Vietnamese coffee has the opportunity to
reduce taxes to 0%.When joining the TPP, with
the gradual elimination of agricultural
protection, Vietnam will attract many foreig
investors with modern science and technology,
replacing the traditional ineffective ways.

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Forces affecting trading in global markets

Sociocultural Forces
Although the main function of coffee is not for reducing thirsty,
Americans drink it as a beverage. the United States is a large market
and coffee is very important to them, or China tea-drinking trend is
changed. All of these cultural factors will affect the accessibility of
Trung Nguyen coffee to foreign countries.

Economic & financial forces

Through the position and influence of the US- the strongest economy in the world. In 2008
due to the impact of the global economic recession, the US economy was seriously
affected. The situation of US was back to normal in 2010; therefore, it will recover and
providing an opportunity for Vietnam and Trung Nguyen to expand exports coffee. With
the Asian market, Viet Nam has the advantage of being near to Trung Quoc, with many
similarities in culture, Trung Quoc is a crowded market, a young population and its trend is
changed from tea to coffee. Singapore is an Asian gateway to the world, with a strong
financial, economic, political, cultural and technical infrastructure.

Physical & environmental forces

Among the international coffee standards, Europe's UTZ is considered a strict
testing system and has become the target of many businesses. UTZ is a sustainable
development program for agricultural products including coffee, cocoa and tea.
The certificate is awarded to producers who have good farming practices and are
concerned about nature, the environment as well as the next generation. BRC
standards specify more criteria for food safety, storage and packaging. Upon
obtaining this certification, the company and the retailer will be recognized
worldwide. Therefore, Trung Nguyen has reached the international standard for
coffee quality, but still needs to improve many criteria, "quality laissez-passers" to
easily integrate into the global market.

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 4 BASIC FORMS OFBUSINESS OWNERSHIP

In 1992, Dang Le Nguyen Vu started to research on the coffee field. Since,

he created his own special coffee taste. In 16/06/1996, he started to
establish Trung Nguyen Company in Ban me Thuot City just with a little
initial capital but with the intense belief and will of youth and the aspiration to
build a famous coffee brand, bringing Vietnamese coffee flavor spread all
over the world.\nWith the form “sole proprietorship”, his company has some
benefits in the first developing stages. However, there are other
disadvantages when he chooses this form in development Trung Nguyên
Company in the future.

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Because of these shortcomings of “sole proprietorship” form, at that time, Mr. Vu decided
to change the form of sole proprietorship by other form of business ownership:
Corporation. InToday, we have the Trung Nguyên Group (TNG) - the form of corporation,
operate to specializing in fields: produce, process and trading coffee and tea, franchise
and modern retail distribution, and tourism with its chairman and CEO are Dang Le
Nguyen Vu. The founding Trung Nguyên Corporation has many benefits also has some
drawbacks to grow, prosper, and create economic opportunities:

So, this form can bring Trung Nguyên Corporation many challenges in management and
operation. Within the period of 10 years, from a small coffee processing company in Buon
Me Thuoc city, Trung Nguyen has emerged and become a strong corporation with 6
member companies: Trung Nguyen Corporation JSC, Trung Nguyen Instant Coffee
Company JSC, Trung Nguyen Coffee LLC, G7 Commercial Services Company, Đặng Lê
Tourism Company JSC, Trung Nguyên Franchising Company JSC and Coffee
Hypermarket. Nowadays, Trung Nguyen Corporation has quickly created prestige and
become a popular coffee brand name to its nationwide and overseas customers.

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 5 MANAGEMENT

Planning
Leading
Organizing
Controling

Planning
Tactics planning Strategic planning Operational planning
Products
Services

Tactical planning
Products

A highlight of Trung Nguyen's business strategy is that the company participates in

all stages of the global coffee value chain and only focuses on developing its core
strength of coffee and has each marketing campaign specific to each product.

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 The common feature of G7 coffee Passiona instant coffee - this
products is that they come from the
is a new type of coffee for
legendary basalt land of Buon Ma
women with the criteria of
Thuot combining different secrets of
using diet sugar and
fresh coffee and the most modern
production technology. From those
supplementing with collagen,
things, Trung Nguyen brings Vitamin PP and rare oriental
customers delicious and tasty G7 herbs to help beautiful skin,
instant coffee. G7 is the only instant good for health. Therefore, it is
coffee product chosen to serve the a special product only available
heads of state at ASEM 5. in Trung Nguyen.

Services

Trung Nguyen's customers are mainly individual customers, who buy goods at retail
points or enjoy coffee in Trung Nguyen's chain of stores. At Trung Nguyen's high-class
chain system, in addition to roasted nuts, customers can buy a hand coffee grinder so
that when they want, they can only grind the right amount of beans for a coffee filter and
enjoy whole experience as a true barista. Trung Nguyen also built a coffee village in Dak
Lak for tourists to visit and enjoy coffee in a space close to nature.This is a quite unique
model that Trung Nguyen built to create a new image in the hearts of its customers.
Trung Nguyen is always looking for ways to best meet its customers. Besides, for
institutional customers who buy in bulk will receive the company's discounted prices and
other incentives for long-term ones.

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 Strategic planning
The development orientation of Trung Nguyen will become a group of 10 member
companies operating in the fields of planting, processing, exporting coffee, real estate
business, animal husbandry and communication. The Group aims to develop a smooth
network of domestic distribution channels, including about 100 leading domestic
distributors in 64 provinces and cities, but the main area of Trung Nguyen Group is still
coffee. Trung Nguyen Incorporated Company and G7 Trade & Services Incorporated
Company (G7Mart) are making hectice preperations bout a roadmap to the stock
exchanges in Vietnam and Singapore.
Surveys of women who like to drink coffee said that the taste of Passiona is still
bland. Therefore, Trung Nguyen constantly enhances the taste of stronger coffee to
meet the needs of consumers. The line of ready-made canned coffee products is still
new and full of potential in the Vietnamese market. This type of product attracts many
people because it is convenient and suitable for modern life, however, up to now, canned
instant coffee products in Vietnam market are mostly imported products and only some
brands of domestically produced cans are Nestle, Birdy and Vip.Trung Nguyen can afford
to compete with these brands if launching a new line of canned coffee. At least the
famous Trung Nguyen brand can defeat Birdi and Vip to continue competing with its big
rival Nestle. The strategy of product diversification is also a way to expand the market for
Trung Nguyen brand.

Operational planning
Besides, Trung Nguyen has also implemented specific campaigns through community-
oriented programs, thereby contributing to enhance the brand value as well as promote
the image of the company to become more familiar with customers. Including campaigns
that is exploiting free advertising capabilities on virtual social networks such as facebook.
Moreover, Trung Nguyen also chose to buy the copyright of a song that was suitable for
the mainstream value that Trung Nguyen wanted to convey and put into advertising. This
ad will be broadcast regularly during the prime time on television, the melody will become
the soul for the ad as well as the brand and impress the viewers.

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 Advertising activities of Trung Nguyen are not many, the true effect that Trung
Nguyen achieved is thanks to PR - public relations based on the core values that the
company directed to Trung Nguyen has inspired national soul into its logo and slogan,
upholding the national pride in each product. Trung Nguyen has carried out propaganda
campaign to mobilize the spirit and call for the support of agents, distributors and
consumers. The company opened the open letter to consumers with the phrase "Dear
fellow citizens" and the words are very earnest to evoke the national spirit. Therefore,
Trung Nguyen has quickly gained consumers' trust and achieved many significant
successes such as the program "Innovation and Vietnamese Brand" - Trung Nguyen
coordinated with Youth Newspaper, Youth Union Vietnam launched and cooperated with
Vietnam Television to set up the "Innovative source" Investment Fund to finance the
winners of the VTV3 Startup program. This activity aims to encourage and create
opportunities for the young generation of Vietnam to implement innovative business
projects and ideas, thereby contributing to nurturing young business talents for the
country. On the other hand, Trung Nguyen participated in sponsoring programs such as
"Connecting big arms", supporting the victims of Agent Orange Vietnam in the
humanitarian program of TV "We are not insensitive.
In addition, Trung Nguyen also organized the program "G7 Summit" to promote the
brand that has attracted thousands of participants and marked by the blind test to directly
vote for their favorite instant coffee products between G7 and the major coffee brand in
the world. As a result, 89% of people choose G7 as the most favorite product.

Organizing

By department By product By process

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 For Trung Nguyen, chart of organization is divided into four ranks. The first, the leader is
General Director. The second is CEO, they have a high authority after General Director
only. The third, they are some division managers, including Administration - HR Manager,
Planning Manager, Accounting Manager, Technology and Quality Management Manager,
and Production Manager. And the last one, junior to Administration - HR Manager
consists of Administration Department and HR Department. Junior to Planning Manager
have Marketing Department, Sales Department, and Logistics Supply Chain. Next,
Accounting Manager controls Accounting Department, Finance Department. Last,
Technology and Quality Management Manager operate Technology and Quality
Management Department and Production Manager run Production Department.

Moreover, in Marketing Department and Sales Department, Trung Nguyen has different
way to departmentalize. Structures are divided by products and Geographic Location. In
addition, also have a lot of manufacturing system. Trung Nguyen now has nearly 2000
employees working for the company. It also indirectly created jobs for more than 1500
employees across the system 1000 franchised cafes in the country. The management
team of the Trung Nguyen are mostly young people, were trained with the consultants
who have experience working in foreign corporations. They are enthusiastic and dynamic
people.

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21
 Besides that, Trung Nguyen Legend organization structures also divided by products and
by projects, as the diagrams below:

Projects that
Products Chain of coffee shops contribute to
branding

Trung Nguyên 66 Trung Nguyen Establish the Coffee

Legend Legend stores World Museum
Trung Nguyên 36 E-coffee stores Trung Nguyen Legend's
G7 M’drak Paradise Project
Brothers The Heart - Great
Position - Start-up
Coffee Tour Resort

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Controlling
Factories Ingredients Price Distribution

Factories
For production planning, because of the background of Trung Nguyen Legend, they
accumulated a lot of experience in this field of production. In each different stage Trung
Nguyen has carefully planned the construction of factories to ensure the export of each
different product such as Saigon Coffee Factory (My Phuoc - Binh). Duong) is a factory
acquired by Trung Nguyen from a transfer contract with Vinamilk in 2010 with a total
investment of more than 17 million USD. Trung Nguyen instant coffee factory (Di An -
Binh Duong) The factory covers an area of 3 hectares. The entire equipment line,
technology of the factory are manufactured, transferred directly from FEA s.r.l - the
company specializing in manufacturing food processing equipment and instant coffee of
Italy. Trung Nguyen Coffee Factory was inaugurated on May 20, 2005, processing
roasted and ground coffee. Bac Giang Factory, the largest instant coffee factory in Asia
The factory is divided into 2 phases, the first phase focuses on processing and
packaging of G7 instant coffee finished products. The second phase is investment in
processing technology systems to meet the growth of export markets

Ingredients
For Trung Nguyen, coffee beans are the main prerequisite ingredient. Trung Nguyen
selects from the 4 best raw material areas: Robusta coffee beans- Buon Ma Thuot,
Arabica beans of Jamaica, coffee beans from the original homeland of coffee -Ethiopia
and Brazil. With the benefits of being located right on the coffee capital of Vietnam- Buon
Ma Thuot, Trung Nguyen has many advantages in purchasing raw coffee.

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 Price
For the domestic market price of different raw material products is suitable for different
objects to enjoy coffee. Japan is a country that is famous for the traditional tea
ceremony, besides that the Japanese also knew about coffee very early (in 1800).
Therefore, Japan is a quite strict market for "taste" to enjoy. However, Trung Nguyen
franchise agent in Japan has set the price of each cup of Trung Nguyen coffee to be 50%
higher than that of Starbucks and 25% higher than other domestic coffee shops. In
addition, Trung Nguyen has achieved success in Tokyo, creating a miraculous leap for
Trung Nguyen on the way of integration, leveraging to develop the franchise system in a
series of other developed countries.

Distribution
For an enterprise that relies heavily on products, "Distributing" is a vital stage. With the
goal of quickly receiving the market, reconciling risks with the benefits of business
facilitation, Trung Nguyen mainly approaches customers through three main distribution
channels of Franchise (1): Coffee shops, customers. consumption; Tradition (2):
Wholesalers; Supermarkets (3) Retail agents, consumers

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 6 PRODUCTION& OPERATIONS MANAGEMENT

Production process
Trung Nguyen Legend also applies a control system to its production process, such as
testing tools by activity, controlling tools over time by technical horizontal diagram, PERT
technical diagram - critical road. Moreover this company manage their finance and
budget by some tools, for example, balance sheet of accounting, report on business
results, cash flow statement. About the quality control, they follow to manage quality
according to ISO standards, synchronous quality management method.

Mass Customization
To make a unique product or provide a specific service to specific individuals. Trung
Nguyen Legend launched the variety of coffee for example, firstly, WEASEL - King of
coffee: Combined with ripe berries and unique ingredients, creating the world's rarest and
most expensive product, each year produces only 40-50 kg and COFFEE LEGEND is the
special version of the Weasel coffee WEASEL, a diplomatic gift for Heads of state, Kings,
Royal members and Ambassadors. Next, Legend special edition, Legend classic, Trung
Nguyen Legend Passiona, Trung Nguyen Legend Capuchino, Legend milk ice coffee
With many different flavors, these are unique products only in Trung Nguyen and are a
specific characteristics of Trung Nguyen. Specially, Legend Passiona Coffee 4in1 Trung
Nguyen - coffee for women. With low caffeine content, added collagen, anti-aging agent,
along with some oriental herbs and diet sugar, Trung Nguyen created the first and only
special coffee product, with flavors. passionate and captivating for women passionate
about the taste of coffee

Facility Location for Manufacturers

To satisfy the large of quantity demanded products,Trung Nguyen bought Saigon Saigon
coffee factory - the factory has a very advanced technology chain system, based on the
deep technology of Germany and Italy. In addition to the two, this plant also meets the
production development needs of Trung Nguyen itself because the existing factories are
at full capacity. Arranging a reasonable factory, Trung Nguyen buys coffee from the
Central Highlands and provinces in the Southeast → factories located in Binh Duong and
Dak Lak. Both factories use state-of-the-art technology, which increases production
capacity and reduces wastage costs.

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 Purchasing
They purchase through private enterprises, traders and purchasing directly from farmers.
In the first form, when private businesses or buying agents face many difficulties, many
agents default, directly affecting the insufficient supply in both quantity and quality. Trung
Nguyen should restrict the use of this supplier. Instead, the company has found a new
direction for the input material, which is to invest and directly manage farmers' coffee
farms, making coffee farms a part of business, thereby helping the company take the
initiative in strategic raw materials, contributing to strengthening the relationship between
the business and coffee farmers. Trung Nguyen said that the firm's coffee beans were
purchased from small coffee farmers with a certificate of sustainable farming practices
and the company bought preferential prices from these households.

Just-in-time inventory control

In order to cut down the costs related to inventories, Trung Nguyen implemented JIT
in a certain time. For distributors, Trung Nguyen requires payment first and then delivery.
For supermarkets and stores with large consumption, Trung Nguyen allows to pick up
goods and pay slowly within 45-60 days. Hence, inventories in Trung Nguyen are at
production warehouses and distributors. Besides, to achieve maximum efficiency, Trung
Nguyen also applies ERP to have accurate production schedules and excellent
coordination with distributors as well as those who are often connected by the internet so
they know what need and when. These JIT systems help Trung Nguyen to ensure that
the right materials are in the right place at the right time at the cheapest cost to meet the
needs of both customers and manufacturers.
Checking and controlling the activities of distributors: Trung Nguyen has conducted
inspections to regularly evaluate the distribution efficiency through sales. For inactive
distributors for a long time, make reminders or cut contracts. This is a friendly and
necessary measure for the company to meet its distribution goals.

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Quality of products control

Trung Nguyen Company cooperates with a well-known packaging supplier or

machinery company such as Phuong Nam Packaging and Trading Co., Ltd, Vinapackink
Vietnam Packaging and Printing Company, Neuhaus Neotec - the world's leading
manufacturer of coffee processing equipment in Hoykenkamp - Federal Republic of
Germany to ensure the best quality products. The equipment and machines for coffee
production have a wide range of suppliers because businesses can buy from other
countries. However, at present, Trung Nguyen has an extremely efficient production
system. When the raw materials used for the production of instant coffee as well as other
types of coffee, all originate from coffee farms invested and managed by Trung Nguyen
itself. In other words, Trung Nguyen is a supplier of input materials for its production.
Therefore, competitive pressure from suppliers is an issue that Trung Nguyen does not
have to face at present.

With both the love and the passion for coffee, the most original and best coffee
beans in the world have been carefully selected and carefully combined with mysterious
Eastern roasting secrets. Trung Nguyen sends to lovers and connoisseurs more than a
cup of delicious coffee, the most attractive but also a special energy. The source of
energy for the onset of the brain for inspiration of creative ideas and for success. Today,
along with the continuous development of science and technology, the life of the
Vietnamese people is constantly improving, the demand for consumption is increasing. In
particular, the demand for coffee is increasing rapidly. The only modern technology only
in the process of producing instant coffee of Trung Nguyen is the unique extraction ability,
taking only the most delicate parts only in each coffee bean to produce coffee products.
Instant coffee with distinctive, concentrated and captivating flavor. Because of these
specialities, they have been making a difference for instant coffee that no other instant
coffee product on the market has.

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 Nice girls team

Tran Thi Ty Ty Nguyen Phuong Vy Bui Nguyen Mai Thy

BABAIU18240 BABAIU18316 BABAIU18005

Cao Ngoc Anh Duong Cap Thi Huyen Phan Boi Nhi
BABAIU18386 BABAIU18067 BABAIU18389

Vo Thi Kieu Trang Huynh Nhu Ngoc Nguyen Hoan Bao Khuyen
BABAIU18221 BABAIU18136 BABAIU18336

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References
http://www.trungnguyen.com.vn
https://readtoolead.com
https://text.123doc.org
https://english.vov.vn
https://news.zing.vn
http://vffranchiseconsulting.com
https://www.ibm.com
https://www.slideshare.net
http://kinhtevadubao.vn
https://baomoi.com

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