896proceedings The 10th Students Scientific Research Conference

Proceedings the 10th students scientific research conference
Improving risk management at highlands to

increase corporate performance
Group sciences: Lê Ngọc Oanh

Khương Thu Trang
Trịnh Thuỳ Trang
Phạm Kiều Anh
Class: AC2015C
Science advisor: Dr. Nguyễn Phú Hưng
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CHAPTER 1 INTRODUCTION OF RESEARCH

1.1 Rationale of the research
The ongoing development of F & B chains has attracted more and more domestic and
foreign investors. So the war for the market in the chain in this industry is becoming
more intense than ever. So in order to be successful in this area, companies have to
overcome a lot of holy trials and risks, including the change in consumer behavior,
effective employee management, competition with companies. It is true that only few
companies can overcome these challenges, such as Trung Nguyen, Cong coffee,
Highlands coffee because they know the tastes of Vietnamese people, provide quality
products and services. For customers, they also know how to highlight the company in
the market is fierce competition.
The research below will highlight the challenges and risks that businesses may face
when they want to join the F & B market. The appropriate solutions and solutions can
then be set.
1.2 Objectives of study
The ultimate objective of this study is to explore challenges and risk a beverage firm in
general and Highlands in particular has to face and the ways successful companies
have used to overcome these factors.
1.3 Questions of study
● What are the risks and challenges the Highland is facing from the views of
managers and staffs?
● What are the factors affecting business performance of a firm?
● What are potential risks that can be inferred from the customer assessment on
quality of Highlands coffee’s products, services?
● How to enhance the business performance of HL through?
1.4 Scope of the study
Due to limits on financial, time, and human, the research will limit to study in the
Hanoi city only.
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1.5 Methodologies and Data

We first conduct a Literature review, then we conduct a survey to investigate the
current situation. The questionnaire will be use to summerize opinions from sources of
customers, employees and managers.
The research will be implemented by the 5 following stages, including problem
definition, (ii) planning, (iii) surveying, (iv) analyzing results, and (v) discussing
findings and recommendations to Highlands.
1.5.1 Research method
The thesis is going to use Data Collection, Comparison, Qualitative, and Quantitative
Analysis.
● Information are collected to have background; literature review to support
analysis.
● Qualitative analysis: Based on the results of the survey survey, which gives a
high score on the strengths of the highlands, face to face interviews were also
conducted to gain insights from clients, staff, and management on how to work
in Highlands coffee.
● Quantitative analysis: refers to the process of gathering, analyzing and
presenting the information from raw data in any phenomenal issues of the
research that mainly related to numbers. The quantitative inquiry is based
mainly on the theories which can be demonstrated in practice and by subjective
aspect because of the principle in numbers. In this case, the quantitative
research amplified mostly to the closed questionnaire in the survey. The
statistical result is used to test the truly hypothesizes through table, chart, and
graph indications.
1.5.2 Data source
1.5.2.1 Primary data
Primary data is original research data in its raw form, without any analysis or
processing which provides the most useful of information for the specific purpose of
researchers. Beside, the targeted surveyees are peoples living in Hanoi and city.
Data can be collected via 3 ways:
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● In-depth interviews with customers to identify customer demands and customer

impressions on the quality of Highlands coffee.
● Direct interview with internal employees to get overall picture on the match of
current capacity with current and future requirements to Highlands coffee.
● Survey by questionnaire: Use the electronic form sent to a large number of
targeted customers to gather their assessment to Highlands coffee.
1.5.2.2 Secondary data
Secondary data which have been processed and gathered in other reports will provide
further knowledge of the market and competitions. They are cheaper and more quickly
reachable than the primary data and also may be available when primary data cannot
be obtained at all.
1.5.3 Data Collection of the survey
The data was collected by two main channels:
(1) Direct: this channel was used with people in Hanoi which is easy for the printing
question papers and doing the interview as well.
(2) Indirect: The paper was on the cloud; part of the question can be conducted online
through Google Doc for the people who are prefer to answer online.
For the primary data, this paper shall emphasis on doing survey including
questionnaire and interviews survey. With the secondary data, undoubtedly, searching
on the internet by using searching machine is the fastest way for collected secondary
data. The survey will fulfill by surveyees in Hanoi and Ho Chi Minh cities.
1.5.4 Data analysis
Thesis uses Google tool/MS Excel to analyze data collection from investigation.
1.6 Chapter Conclusion
Based on this fact of excellent F&B development, Highlands coffee not only faces
competitive pressures from its major competitors, but also has its place in Vietnam, but
also in the recruitment process. So the following article will outline the risks that
companies in the F & B industry may face in general or Highlands coffee in particular.
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CHAPTER 2
HIGHLANDS BUSINESS ANALYSIS
2.1 Introduction
In this chapter, we are going talk about a well-known coffee in Hanoi, Highlands
coffee which was born out of the pure passion for Vietnamese coffee. We will take a
deep look at several prospective, things like the development of Highlands coffee
chain, markets and customers target, the structure of organization and some
highlightenned performance.
2.2 Overview of Highlands Company
In the late 1980s and early 1990s, David Thai witnessed the rise of the Starbucks
coffee chain from a small company in his hometown of Seattle to a multinational
corporation. This made him had the inspiration behind the founding of Highlands
Coffee, which first began operation in Hanoi in 1998. The company's initial
registration marked the first time an Overseas Vietnamese was able to register a private
company of any kind in Vietnam. In 2000, two years later, the company was registered
as a joint stock company.
Highlands limited itself to produce packaged coffee and be sold through supermarkets,
hotels, restaurants, and cafés in the time of its foundation. In 2002, the first Highlands
Coffee shop was established across from Notre-Dame Cathedral in Ho Chi Minh City.
As of 2009, the company had a strong development, they operated 80 coffee shops in
six cities and provinces across Vietnam: Hanoi, Ho Chi Minh City, Hai Phong, Da
Nang, Vung Tau and Dong Nai.
As of May 2010 the company offered 5 blended roast and ground and whole bean
coffees included Heritage Blend, Traditional Blend, Gourmet Blend, Moka Blend, Culi
Supreme, and 4 espressos in ground and whole bean: Full City Roast, Arabica
Supreme, a water-process DeCaf espresso produced at their in-house water process
decaffeination facility, and Cinnamon Roast espresso. The espresso line also included
ESE-compatible 45mm espresso pods packaged in Malaysia. In December 2009 the
company introduced a Ready-To-Drink (RTD) "Iced Coffee" in an 8-ounce can, in two
versions, one labeled "with Milk" and the other labeled "Black". By May 2010 the
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company stated that the RTD product had been distributed to more than 17 Asian
countries and the USA.
In 2011, Highlands Coffee purchased the pho chain Pho 24 from Ly Qui Trung for an
estimated 20 million USD. The next year, Highlands sold 50% of its shares to Jollibee
Worldwide for 25 million USD. In this affair, Jollibee said, they will add products of
Highlands Coffee in the other systems of the Jollibee restaurants in Asia, besides
continuing to develop this coffee chain in Vietnam. Because Vietnamese coffee has
gained worldwide recognition for top quality, it will help to be a significant added
value for Jollibee.
In March 2012, under a partnership with Philippine Internet café company Digital
Paradise, the first hybrid Highlands/Netopia internet café and coffee shop was opened
in the Philippines. Beside traditional coffee products, Highlands coffee researched and
developed new products such as GreeKe products in 2014 and Tea-Milktea products in
2015 (wikipedia, 2017), (Website, Highlands, 2014), (Lộc, n.d.).
2.3 Organizational structure
The overal organizational structure of the Highlands corporation is presented in the
figure below.
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Figure 2-1: Organizational structure of the Highlands corporation
Figure 2-2: Structure of a local Highlands division
2.4 Performance highlights

After more than 15 years’ operation, Highlands coffee supply chain have been
developing rapidly in recent years with 180 chain stores in Vietnam. The growth of
Highland coffee is proved by a strategic success with stores in key retail locations
(Trần, "Bình dân hóa" - Chiến lược phát triển của Highlands , 2017).
Spending $25 million to buy Highlands Coffee from a Vietnamese boss, Jollibee
Group of the Philippines has taken steps to be considered very in developing this brand
in Vietnam. Besides continuing to develop this coffee chain in Vietnam, they will add
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products of Highlands Coffee in the other systems of the Jollibee restaurants in Asia.
This will be a significant added value for Jollibee, because Vietnamese coffee has
gained worldwide recognition for top quality. The evidence is that after buying
Highlands Coffee, Jollibee also add this coffee brand in its restaurant chain outside
Vietnam. Moreover, Highlands Coffee has taken big steps in the Philippines. After
opening a new shop at Eton Emerald Lofts in Ortigas, more Highlands Coffee shops
will soon be put into operation at Timog and Katipunan Avenues in Quezon City and
Pioneer Road, Shaw Boulevard in Mandaluyong (Nam, 2013).
The Superfoods Group, a joint venture between a subsidiary of the Jollibee Foods
Corporation (JFC), JSF Investments Pte Ltd, and the Viet Thai International Joint
Stock Company (VTI), plans to conduct an IPO and list on Vietnam’s stock exchange.
“We look forward to making Highlands Coffee and Pho 24 true national champion
brands of Vietnam,” Mr. Thai Phi Diep, CEO of Superfoods Group and Highlands
Coffee was quoted as saying (Doanh, 2016).
2.5 Business Analysis
This section is going to analyze the business environment of Highlands to identify
challenges and opportunities facing Highlands.
2.5.1 The environment and competitive forces
This section uses the frameworks below to analyse the environment and competitive
forces of Highlands.
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Figure 2-3: Analytical framework (Kaplan Group, 2015 , p. 22)

2.5.1.1 Macroenvironment analysis
This section is going to use the PESTEL framework to analyze the macro
environment.
• Political: The political environment includes taxation policy, government stability
and foreign trade regulations.
• Economic. The economic environment includes interest rates, inflation, business
cycles, income and energy availability and cost.
• Social. The social/cultural environment includes lifestyle changes, attitudes to work
and leisure, levels of education and consumerism.
• Technological. The technological environment is influenced by government
spending on research, speed of technological transfer and rates of obsolescence.
2.5.1.2 Industry analysis
This section is going to use the Five-force model to analyze industry in which
Highlands is doing business.
Domestic market (Website, Highlands, 2014)
● Large Cities: Highlands coffee chain coverage is quite wide in many cities, so
it's easier to buy than competitors.
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o Ha Noi: 41 locations include Hoan Kien district, Hai Ba Trung district,

Cau Giay district, Ba Dinh district, Hoang Mai district, etc…
o Ho Chi Minh: 72 locations include 1,2,3,5,8,9,10,11 district, Tan Binh
district, Go Vap district, Binh Thanh district, Phu Thuan district, etc…
o Da Nang: 13 locations include Hai Chau district, Thanh Khe district, Hai
Chau district, Hoi An, Son Tra district.
o Hai Phong: 8 locations include Ngo Quyen district, Hong Bang district,
etc...
o Other cities: Binh Duong, Dong Nai, Can Tho, Vung Tau, Nha Trang,
Vinh, Hue, Ha Long, Thanh Hoa, etc…
Work in café industry: In 2006, Highlands Coffee reaching 25 cafeshop
nationwide. This period is also the time to mark change of Highlands Coffee
both of brand identity and theme space. In 2011, Highlands Coffee expands
rapidly with 50 shops. By 2014, this number has raised to 75 shops. By
progressive and pioneering steps, Highlands Coffee has expanded their market
share, proud of Vietnamese brands. From the numbers are 2 shops in 2002, after
15 years of development, Highland has 180 stores in Vietnam, far away from
Starbuck with 34 stores. This numbers show that Highlands Coffee gradually
dominate the market. (style, 2016)
Competitors
● Growing number of competitors between Viet Nam companies.
o Small household café: There are unique spaces to toward specific
customer segmentation such as nostalgia style store, pets coffee store,

vintage coffee store, etc…
o Trung Nguyen: Besides delicious drinks, the space is cozy rather than
other high-class coffee. Trung Nguyen has a great advantage that has a
factory located at Buon Ma Thuat, the transportation is not a problem.
Moreover, Trung Nguyen owns a coffee farm to supply raw materials.
Therefore, they ensure transportation costs and purchase costs are the
possible lowest (Report, 2013).
o Cong: Price and quality of this coffee is not really special, but Cong
coffee is still selected by many people, because of the unique style
unique style memorize the old years by the ways use "đồng nát"
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furniture to decorate. By combination of traditional and old elements are

extremely atrraction for customers (Bowyer, 2016).
o The coffee house: The coffee house concept is every store must be an
integral part of the community. Therefore, in their designing, Coffee
House always tries to bring the localism to each of its stores and make
customers to feel they belong to this place from the first time comming.
● Growing entrants from foreign
o Starbucks: They have an available number of customers who can tap to
become key customers because this client groups know Starbuck before
this brand come to Viet Nam market. This client group includes
foreigners living and working in Vietnam, overseas student, and foreign
tourists who have used Starbucks coffee in foreign. This is not large
group but they have stable income to be easy will become a regular
customer at Starbucks (website s. , 2016).
o The Coffee Bean & Tea Leaf: Carry out the care of your customers in
any way through programs that link and support the image of Vietnam.
Typically, it is the cooperation with Vietnamese designers to change the
costumes for employees in the whole chain, change the menu, suitablefor
more pure Vietnamese, especially with more reasonable price (website T.
c., n.d.) .
2.5.2 Products and Customer segmentation
2.5.2.1 Product lines and their targeted customers
Not only focus on coffee, Highland coffee has diversified the menu, now there are
bread, pho, yogurt shake, ice blender, etc. Expanding international market is one of
strategy step and Highland coffee will keep going in that direction in the following
years.
There are 2 main types of coffee beans: Arabica and Robusta.
● Robusta is the type coffee bean which is planted in Vietnam because of the
features about terrain, weather and altitude.
● Arabica requires being planted in higher places and cooler (about 300->600 feet
above sea level). Arabica need longer time to get ripe, less in quantity but has
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more flavor than Robusta. Therefore, Arabica’s price is twice the price of
Robusta.
Highland coffee has 2 main types coffee: international and traditional flavor. They are
combined by different formula.
● Espresso- Full City Roast;
● Espresso- cinnamon Roast;
● Espresso- Arabica Supreme;
● Espresso- Decaffeinated.
Coffee beans have been tested carefully, preserved in right way. Especially, the
packing process is observed closely, and the product packaging has function to keep
the fresh of coffee (Turkish Coffee Beans, n.d.)
Figure 2-4: Product lines of Highland
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The office staffs and the active young generation are the middle class for the target
customers Highlands coffee because drinking coffee here with the prestigious coffee
brand helps them confirm their status in the society. This is one of reason to help the
research and developing team that can find the appropriate locations for Highland.
Therefore, Highlands Coffee stores are usually located at center of city or famous
shopping malls, which are all crowded areas. When coming to Highlands stores in
luxury buildings such as Vincom, Parkson, customers may notice Highlands Coffee
with wooden floor separate from the surrounding area. The first impression is a luxury
space with two main colors: red and black. The red lanterns which are strongly
attached to Highlands Coffee store network create warmness and orient. In particular,
the indoor stores are also equipped with high tables with swivel chairs like bar, facing
the street, to serve those wishing to contemplate the streets. Besides, Highlands Coffee
brings Western values to their stores through the wooden tables and chairs, large
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armchairs, all of them are extremely modern. Moreover, Highlands coffee always
focuses on creating the comfortable and exciting atmosphere for customers to enjoy
coffee every day. In addition, Highlands also targeting customer group are young
businesses and the foreigner living and working in Vietnam, who used to study and
live abroad so they are familiar with the style of European-American like drinking
coffee at a chic restaurant that impress the style of the place they used to live. After
time on work, this is an appropriate location with the quiet and less luxurious space to
discuss with their friends and enjoy coffee with pastry-the Western style, bring for
them an interesting relax time. With outdoor stores, Highlands Coffee put emphasis on
the big white umbrellas, which reminds of outdoor coffee shops in Italia or France.
They are still wooden and in consistent style with the indoor stores, bring for the
customer a strongly realize about Highland's design. The allocation of different areas
at Highlands Coffee is quite reasonable. The preparation counter is placed at store’s
center with target for customers can easily observe the preparation process, hygiene
etc. As for Highlands’ staff, it helps them to capture customer’s needs and serve
quickly. The preparation counter is equipped with modern coffeemakers, which makes
the area professional. There are also nearby shop windows full of various types of
cakes and other food. Visitors to the restaurant, in addition to the drinks and delicious
food, also receive value from the comfortable, luxurious and highclass space.
2.5.2.2 The value of products and services
The customers come to Highlands Coffee not only to have a drink but also to deal
with their clients, chat with friends, to think about life and to find a quiet space of their
own after a stressful working day. Understanding this customers’need and providing
them with a very good service, Highlands Coffee deserves to be one of the best choice
for its customers.
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2.5.3 Internal resources, capabilities, and competences

Internal resources, capabilities, and competences are showed through the Porter’ value
chain
Figure 2-5: Porter’s value chain (Kaplan Group, 2015 , p. 58)

Porter developed the value chain to help identify which activities within the firm were
contributing to a competitive advantage and which were not. The approach involves
breaking down the firm into five 'primary' and four 'support' activities, and then
looking at each to see if they give a cost advantage or quality advantage (Porter, 2012).
The components of Porter’ value chain model
● The primary activities: is the list of activities including inbound logistics,
operations, outbound logistics, marketing and sales, service.
Inbound logistics – is the process of receiving, storing and handling raw material
inputs. For example, a just-in-time stock system could give a cost advantage. Coffee
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beans are transported from Dac Lac, Lam Dong, and Buon Ma Thuot to the Highlands
coffee warehouse for storage and distribution to small businesses.
Operations - transformation of the raw materials into finished goods and services. The
beans after being imported from the HighLands will be processed through the
production line into coffee powder and grains and discarded for distribution to
domestic chains and partially packaged for export.
Outbound logistics - storing, distributing and delivering finished goods to customers.
Highlands coffee uses a multi-channel delivery method that uses two or more different
distribution systems in parallel to cover the market, targeting the best possible target
customers. Aside from distributing products (coffee powder and caffee bean) to
highlands coffee shops, highlands are also looking to third parties: retail chains such as
Vinmart, Coopmart, Lotte mart. Even more impressive, with the merger of the Jollibee
Group, the highlands have expanded their distribution network not only at home and
abroad.
Marketing and sales:Highlands marketing strategies utilize the edge with other
companies.
● Eye catching decoration:The Highlands coffee shop is decorated in a mixture of
Eastern culture traditional Vietnamese and Western culture to create a sense of
closeness bringing highland breath between the pace of modern cities.
● Merger: Merging with Jollibee has created a highlands attraction for local
media and customer attention.
● Purchasing Vietnamese raw materials: Highlands to the high value and the spirit
of writing using the Vietnamese coffee beans, that has hit the national interest of
the Vietnamese people.
● Service: Provides online ordering through App Deliverynow, a self-service
method that uses a service bell when ordering drinks or food in a restaurant.
● Secondary activities include the following activities such as firm
infrastructure, technology development, human resources development,
procurement.
Firm infrastructure:
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● Finance:With the investment capital, the Highlands are clearly the largest in
the coffee chain. Financial capacity is a great advantage to help the
Highlands occupy beautiful sites and rapidly expand its chain stores.
● Location: The Highlands locations are highly homogenous, all in good
locations or at the foot of office buildings. This helps the customer to clearly
and uniquely identify the brand image of the Highlands.
Technology development : Highlands coffee uses self-service through high technology,
when employees complete the order, the bell will ring and customers will
automatically pick up.
Human resources development : Highlands coffee invests heavily in training
programs for both experienced and inexperienced staff to match the company's unique
work environment.
Procurement: obtaining raw materials, designing products, building manufacturing
facilities, developing co-operative agreements, providing customer service.
Highlands Business Value Chain Analysis offers the following benefits:
● It provides a generic framework to analyse both the behaviour of costs as well
as the existing and potential sources of differentiation.
● Activities that are not adding value can be identified and addressed – for
example, improved so they do add value or outsourced if this is not possible.
● It emphasises the importance of (re)grouping functions into activities to
produce, market, deliver and support products, to think about relationships
between activities and to link the value chain to the understanding of an
organisation's competitive position.
● It makes it clear that an organisation is multifaceted and that it’s underlying
activities need to be analysed to understand its overall competitive position.
● It is an attempt to overcome the limitations of portfolio planning in
multidivisional organisations. Rather than assuming that SBUs should act
independently, Porter used his Value Chain analysis to identify synergies or
shared activities between them and to provide a tool to focus on the whole
rather than on the parts.
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2.5.4 Stakeholders, ethics and culture

In this part, we will seek for some factors effecting to the organization behaviour,
espencially stakeholders, ethics and culture.
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● Stakeholders
The table below indicates the detail aspects of several stakeholders that the
Highlands coffee needs to concern when doing business.
Stakeholders Interest Right Obligation Risks involved and
control
Owners and Income Take Provide If an owner withdraw
investors dividends capital for HL capital, Highlands coffee
to work suffers a lack of capital.
Managers Earning Receiving Maximize Rotation frequently

salary shareholder’s Bonus if doing well,
Command value penalty if fail to meet
and oder objective given by the
staff to tasks of manager.
conduct Career path
tasks
Staffs Income Insurance, Do assigned Not enough money to
remuneration tasks well; make ends meet.
, perform good
service
Vendors Making Bargan Provide
providing money, enough
services to have quality as
HL strategic well as
relationship quantity of
product and
services
Customers Traditional Complaint Qualify of product and
space, any things service is not as good as
favour making them expectable
coffee, high dissatisfied
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qualified
service
Governments Protect Collect tax Provide best Tax evation
and health of payment conditions for
regulatory people HL to
bodies Take tax for develop
the budget
Table 2-1: Stakeholders analysis
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● Ethics
Business ethics is the application of ethical values to business behavior. Depending on
each level, organizations embrace the deep ethic value. There are three main level.
1. Macro level: emphrase the role of business at national and international level and
concerned with assessing the relative virtues of different political/social systems,
e.g. centrally planned ecomomies and free enterprise.
2. Corporate level: focuses on the ethical issues facing individual companies when
formulating and implementing stragegies.
3. Individual level: concerns the behavior and actions of individuals within the
organization.
Benefits of an organisation being ethical.
● Lower risk will create stable earnings and should make cheaper finance
available.
● Attractive to customers.
● Attractive to potential empoyees.
● Less spent on paying fines and damages.
● Less time and cost spent on dealing with regulatory and bodies.
● Culture:
Culture is the set of values, guiding beliefs, understandings and ways ofthinking that
are shared by the members of an organisation and is taught to new members as correct.
It represents the unwritten, feeling part of the organization.The cultural web is
concerned with the manifestations of culture in theorganisation and has six interrelated
elements.
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Figure 2-6 The cultural web (Kaplan Group, 2015 , p. 100)

Routines and rituals – routines are defined as the way things are done around here and
may guilde the orgnaizatio to a beneficial competency way. Rituals imply something
that is especially valued, including events such as award ceremonies for best-
performing salesperson.
Stories and myths- normally, these are told or be word of mounth by employess and
embed the present in its organisational history and demonstrate important events and
personalities
Symbols – things like logos, offices, cars, titles, type of language and terminology
commonly used in shorthand representation of company for raising customer’
awareness.
Power structure – the dominant coalition is the obvious source of power in an
organisation. This may be contigent to management position and seniority but
sometimes organisations power can be assigned to other levels or functions.
Control systems – the system that is responsible for control working environment to
emphasise what is important to monitor and to focus attention and activity upon.
Organisational structure – the formal and informal ways in which the organisation
works. Structures are likely to reflect power.
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2.5.5 Strategic analysis

2.5.5.1 Strategic position
Clearly drawing up the positioning strategy at the very first stage of developing a
business project plays a critical role in enhancing the business success. The positioning
strategy focus on the two important questions: which place the firm is currently on the
customers' mind and which place they want to hold on the market.
Firstly, the place the firm currently holds in customers' mind. Brand positioning in the
mind of customers is very important, Highlands has chosen the chain business strategy
with the synchronous model and expand the branches to reach the potential customers.
The fact is that Highlands coffee shops are always close to each other about 1 to 2 km
apart to increase the ability to identify customers. However, there are many complaints
regarding to the service quality at Highlands coffee 6 Nha Tho, mostly about the long
waiting time or the noise. "The serving is too slow", "I normally have to wait about
half an hour to enjoy my coffee", "This place has the most annoying blender machine
on earth", said the customers. From some information from customers that the
reporters collected during the shop visit and websites, it can be seen that Highlands
Coffee shop is really a special coffee shop to customers, since they offer high quality
core product to customers and has the variable supplementary services, however they
need to professionalize the staff to build better image on customers' mind.
Secondly, the place the shop wants to hold. Highlands Coffee Shop positions itself as a
high price, high quality coffee shop. The shop owners want to emphasize that, the high
price means high service quality as well. Since customers are enjoying a more special
service, so they should also pay a higher price for what they are getting.
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Figure 2-7: The place the shops want to hold

2.5.5.2 Strategic choices
Highlands coffee has clearly identified the segment of customers that it is targeting,
namely the intellectual intelligentsia. So, most Highlands coffee shops are
concentrated in high class or high-rise buildings, populated areas, close to workplaces
or universities. Choosing the location above has made a significant contribution to the
strategy of reaching out to high-end customers.
2.5.5.3 Strategic action
With the warm welcome from Vietnamese consumers, Highlands is expanding its
coffee chain system. Since then, it has gained a large market share in the competitive
beverage industry. Besides, the Jollibee sweepstakes has clearly expressed the
aspirations to reach the international range of Vietnamese coffee. That breakthrough
has helped Highlands not only reach Vietnamese customers but also international
customers.
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2.5.6 Quality issues

Quality control is the traditional approach, concerned with ensuring that actual quality,
as measured, meets the target or benchmark standards that have been set. It is
concerned with maintaining quality standards, rather than improving them and
involves:
• Establishing quality standards for a product or service.
• Establishing procedures and processes that ought to ensure that these quality
standards are met in a suitably high number of cases (in other words, quality
acceptance standards are established).
• Monitoring actual quality.
• Taking control action in cases where actual quality falls below the standard.
• Procedures for inspecting and checking the quality of boughtin materials, and
production output.
Specifically:
● Product quality: Highlands coffee has never stopped to bring delicious coffee
products from premium coffee beans that are grown from Vietnam highland. All
of them carefully selected and are processed in traditional style of Vietnamese.
Highlands coffee is not only a familiar drink but also carry on a cultural mission
reflecting a part of the modern lifestyle of the Vietnamese.
● Services quality: Every time customers come to Highlands Coffee, they will
feel dynamic, friendly and professional of the staffs. Regarding enjoyment
space, it combines between luxurious and cozy blank for indoor space and
many trees in harmony with nature bring bustling dynamic for outdoor space.
All the above factors bring the best service for customers when come to
Highland coffee.
● Hygienic conditions: The whole system of Highlands Coffee applies the
standards of food hygiene and safety which to be issued by the Ministry of
Health and it also has been granted certificates for the whole system. Highlands
Coffee's employees get certificate about health standards and they still update
constantly about international food safety standards.
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● Health: Applying closed process, Highlands brings the products also meet food
safety standards for customers, do not contain toxic chemicals to affect health
of clients.
2.5.7 People
The structure of working positions of Highlands is presented in the figure below.
Figure 2-8 Career development

● Director is the top manager of a store chain, which is responsible for receiving
promotions or training policies for employees from the board of directors and
senior executives. At the same time, ditector is responsible for the division of
work for employees, handling difficult situations during the operation of the
store. This requires high-level management to be highly accountable in the
workplace, requiring skills in the long-term experience.
● Assistant: the person who is responsible for the tasks assigned to the senior
management, and the managerial support in the management of the store.
● Bartender: A bartender is a person who formulates and serves coffee or soft
drink beverages behind the bar, usually in a licensed establishment. Bartenders
also usually maintain the supplies and inventory for the bar.
● The Waiter/Waitress: will take orders and serve food and beverages to Guests in
our restaurant. Always aware of Guest satisfaction to deliver the perfect service
experience. Ensure high quality of food and beverages to Guests. Duties and
responsibilities include, but are not limited to: servicing the Guest in a friendly,
efficient manner while maintaining a clean and safe work environment. Guests
must feel welcome, comfortable and well attended to at all times. Making menu
recommendations, answering questions and sharing additional information with
restaurant patrons. Provide the perfect service experience for every guest.
● Delivery Staff: It is the responsibility of the customer to deliver the product to
the customer with a dedicated customer service attitude. Delivery Staff is
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careful, friendly and agile. Adhere to timing standards for products and
services.
● Securities Guard: It is responsible for protecting assets such as motorcycles,
vehicles of the customer as well as being responsible for protecting the assets of
the shop. Securities Guard is a careful person who is observant, honest and
takes a high responsibility for the job.
2.5.8 Information technology

Use sales app to manage orders.
Use centralized management information system (MIS): all local cafeteria sites are
interconnected through internet.
2.6 SWOT analysis
2.6.1 Strengths
Highlands coffee have many beautiful locations that usually located at center of city or
famous shopping malls, which are all crowded areas. Based on the brand positioning
of the Highlands, the locations of the stores are concentrated in the city center,
commercial center, crownded residential area near the office. The location of HL shops
is very noticeable and easy to impress passersby. The convenient location of the shop
is one of the key factors for the service business in general and the highlands in
particular.
One of the key factors in the success of the highlands is the difference in the service
system. Successfully transformed from a traditional form of service to a modern self-
service form combined with the company's ringing technology called Ecall.Instead of
serving customers in traditional style like regular coffee shops, Highlands coffee
choose the modern service style through the installation of self-service equipment
throughout the system. The introduction of self-service equipment into the operation
model of the chain of Coffee shops Highlands help the customer service continuously
because employees just stand at the counter without having to go to each table to ask
what customers want to drink. Meanwhile, customers will save more time because
guests actively order drinks from entering the restaurant. As for employees, self-
service facilities help employees focus on making drinks, without the time to go to
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each table to serve customers anymore. Guests arriving before will be served before,
later guests will be served after. This solution not only helps highland to reduce the
cost of hiring staff, but also improve the quality of the restaurant service to bring
satisfaction to customers that is considered the key to success of the highland coffee.
The difference in the way of decoration at the shop of Highlands also partly
contributed to the success of this brand. The decoration has conveyed the value of
traditional culture in Vietnam, as well as mixed modern European style in all the shops
of the Highlands coffee. It is a community of cohesion and friendliness. This increases
the brand's ability to brand identity of the Highlands coffee chain. Futhermore, brand
association for businessmen of the Highlands Coffee has been "popular", to serve more
customers. In addition, with the participation of Jollibee, the coffee chain Highlands
was change spectacular by the support of promoting products from Jollibee fast food
chain. By 2014, the Highlands only has 60 stores, as of March 31, 1977 the number
has reached 180, this is a clear demonstration of the success of this strategy (Trần,
Không phải Trung Nguyên hay Starbucks, Highlands mới đang là "bá chủ" chuỗi cà
phê ở Việt Nam, 2016).
Highlands coffee also has a flexible shipper service with app delivery now, if the
number of package is less, Highlands coffee will limit the ship service within 1km but
if ordered in large quantities will agree to expand the scope of shipment. Besides, one
of other success of Highland is combines with the international and traditional flavor
to bring satisfaction for many customers. Furthermorw, they use the main raw
materials which purchase from the coffee farms in Gia Lai Dac Lak, Buon Ma Thuot
and Lam Dong.
Regarding products, Highlands coffee launches regularly new product line, the most
recent time they have launched the Highland freeze with new flavor and it is well
received by customers. Thus, after more than 15- year development, Highlands have
amount of large loyal customers, who often choose Highlands are places to relaxing,
working, study. These strengths have promoted Highlands rank to belong the top 3
high-end coffee chains with the large market share in Vietnam. Other strengths of
Highlands is bargaining power that is the ability of Highlands to exert influence over
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suppliers in a negotiation in order to achieve a deal which is favourable to themselves.(

(Trần, Không phải Trung Nguyên hay Starbucks, Highlands mới đang là "bá chủ"
chuỗi cà phê ở Việt Nam, 2016)).
Highland coffee has a good recruitment policy. David Thai, the founder of Highland
Coffee, shared the company's corporate philanthropy policy: “We do not need to hire
highly experienced people. We do not need to hire people who are trained. We recruit
people who love work, love coffee, show passion for coffee, skill training is a part of
the job”, this is one of the things that are worth to the Vietnamese business’s recruiting.
It will definitely help your business grow strongly.( (Ecall, 2017). Not to mention to
friendly and professional staffs also bring satisfaction to customers. Experienced and
well-trained management team at each level provides high performance when
managing and implementing programs and policies at each highlands coffee shops.
2.6.2 Weaknesses
For young people who always like innovation, creativity, however Highland coffee
shops are similar in format of decoration. When customers want to enjoy another
theme space, despite they come to different location of Highland, it still has a similar
theme. In addition, Highland has been developing in Vietnam for a long time, therefore
their spaces do not have a breakthrough in the decoration when comparing with
competiors.
The other weakness of Highland, they almost do not focus promote campaigns. The
promotion programs still are not diversified enough to attract to customers. Promotion
and sale programs have not really attracted customers, and promoted the brand value.
In addition to these weaknesses, Highlands coffee also makes it easy for many new
customers to misunderstand their product segment. For example, their brand did not
show the full range of their products such as tea, bread, cakes ...
In the past two to three years, more and more farmers have decided to replace the
coffee with other profitable crops such as black pepper, butter, and lemon. good
income. This makes the area of coffee grows drastically, especially in Dak Lak and
Lam Dong provinces, which are the main provinces supplying raw coffee for HL
leading to price changes that can not be controlled stably.
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2.6.3 Opportunities
● Abundant foreign investment
Trading in Food & Beverage chains, especially coffee chains, has experienced a lot
of fluctuations. The development of this market has quickly attracted foreign capital
and domestic investors which offers exceptional opportunities for the industry. In fact,
in 2012, Viet Thai International (VTI) sold 49% of Vietnam's business division and
60% of its Hong Kong business division to Jollibee Group, for $ 25 million. In
addition, Highlands Coffee is also loaned $ 35 million by Jollibee. Expected amount
VTI will use to invest in the future. The deal has helped the coffee chain get more
capital to carry out aggressive expansion, especially in recent years (Thắng, 2011).
Jolibee Foods Corp. and their partner, Viet Thai International, are also planning to list
Superfoods, a unit that manages the Highlands coffee chain on the stock exchange of
Vietnam in 2019. This shows that F & B chain businesses have a lot of potential for
growth. When listed stocks are released to the public, businesses will also have a
stronger access to customers.
● Large and potential markets.
Drinking coffee has long been a habit of Vietnamese people. Most of the 18-30
year olds feel that frequent coffee breaks are a habit in their lifestyle. Catching up on
this trend, the Highlands has quickly developed a market for coffee related beverages.
Moreover, the per capita income of Vietnam is increasing. This means that the quality
of the river day is enhanced and people are ready to spend large sums of money to
enjoy good food and drinks. From there, opening up a potential market for Highlands
to develop and diversify its products to attract more customers.
● Opponents are slow, weak and bad.
Competition is a great opportunity for businesses to make a difference to the brand.
While the F & B industry in Vietnam is booming, many of the imported coffee brands
have made competition in the beverage industry increasingly severe. So many brands
of coffee have to accept to withdraw which are Espressamente Illy, Gloria Jean`s
Coffees, NYDC - New York Dessert Café, However, the fierce competition and the
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withdrawal of some of these brands is the opportunity for highlands to affirm its
position and brand in the coffee market in Vietnam. (Lê, 2017)
2.6.4 Threat (Challenges) Challenges
● Growing competitor
These days, with the great potential of the beverage industry, there are for more and
more domestic and foreign coffee bands which are emerging in the Vietnamese market
that makes business in this area become one of the most intense competition. The
growing of other coffee brands is considered the biggest threat of Highlands coffee
because these brands will attract a large number of potential customers. It can be seen
from the current coffee market, the image of Starbucks (USA), Gloria Jean's Coffee
(Australia), Coffee Bean & Tea (USA), Illy (Italy), Dunkin 'Donuts (USA), or
domestic coffee chain such as Phuc Long, Cong coffee, Trung Nguyen has gradually
replaced a few brands in the country. Highlands Coffee selects the segment of office
workers and businessman to serve, positioning as a luxury coffee brand. However, the
image and the success of Starbucks in other markets is a big threat to Highlands Coffee
when it come into Vietnamese market because Starbuck is a well-know brands in US
and it is also the real competitor in the businessman and office worker segment which
Highlands Coffee is dominating. In Vietnam, although Starbuck is not really popular,
the young have almost heard of the big coffee chain of this world already.
The rapidly development of Cong coffee chain is an illustration for the growth of local
coffee chains. Cong coffee is constantly trying to bring the old spiritual experience
through the unique space, items or corner reflect the subsidy period. It attracts a
number of customers who come here for this style of specific space which is not found
in Highlands coffee. Besides, the growth of Phuc Long coffee chain - a pure
Vietnamese brand is also a challenge of highlands because many customer choose to
come to Phuc Long coffee instead of luxurious brands such as Starbuck, Highlands
(Thọ, 2017).
● Growing entrants
In addition to its long-established and well-known competitor, the Highlands quickly
became competitive by a number of new cafes and restaurants which opened up in a
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similar model. Many young customers with money have more choices when these
startup companies in this industry appear more and more. Some examples for these
new brands are: KAT Coffee, The coffee house, Linh coffee, ... That these new coffee
brands have innovated in style as well as products attract many customers brings a
dareay for Highlands.
● Brand loyalty
The threat to highlands is also the loyalty of the brands of some segments of customers
when they only choose coffee brand which they ussually come to to enjoy because
they are familiar with space as well as products, service here as a habit. It is not
intended to try new products of another cafe brands. For instance, domestic coffee
such as Trung Nguyen is a well-know brands in mind of Vietnamese people for long
period of time.
● Competitive price
Highland coffee brand has competition on price. That a growing number of emerging
coffee brands have decreased their prices to lower prices to attract more customers is
concern for Highlands because of its price which is assessed rather high in some
oppinions.
Table 2-2 The comparisons between the price of KAT coffee and Highlands coffee:
KAT coffee Highlands coffee
Black Coffee VND 20,000 Black coffee VND 59,000
Bac xiu VND 30,000 Esspresso VND 54,000
Freeze Matcha VND 40,000 Freeze Matcha VND 65,000
● Fluctuate of raw material price

Raw materials at Highlands Coffee are purchased from farmers' farms in Gia Lai, Dak
Nong, Buon Me Thuot and Lam Dong. Coffee prices may rise in the coming decades
as climate change will hinder the production of coffee beans or under pressure from
foreign beans price such as coffee beans from Brazil. High coffee prices will affect
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revenue of Highlands as the price of its products are fixed but input prices soared
which causes the ability that the business will benefit less and even the risk of loss.
● Increasing cost of rent
Highlands coffee aim at office workers and businessmen, so most Highlands cafes are
located in big commercial centers and city centers. Choosing the key locations,
Highlands Coffee pays a high rent for a shop from VND 100 to 200 million per month
on Trang Tien Street in the central part of Hanoi. With the current fierce market
competition, that the demand for space rents has increased leads to a rapidly raise in
the cost of renting space which is an intimidation to the revenue of this coffee
brand.Analysts question whether high-end coffee chains can make profits when paying
high rent for retail premises. (Chi, 2017)
● High rate of staff turnover
The highlands challenge is that almost all highlands employees are part-time workers
in their school years and do not intend to be attached to the job. The high rate of staff
turnover is a big challenge to the goal of enhancing the customer service of many
companies because this affects the cost of losses, the cost of staff training
continuously. In particular, Highlands use the form of technology in its service, so it
takes more time to tranning.
● Human resource managing in variety of locations
Highlands is a nationwide chain of coffee, so it faces the challenge of managing people
in a variety of locations and stricter management controls when the staff changes
constantly.
● Alternative challenge
In addition to the increasing number of domestic coffee chains and foreign chains
imported in Vietnam, milk tea brands are increasingly appearing on the market at a
rapid growth followed by the trend of milk tea increase rapidly. There are many
options for drinking milk tea. Many milk tea brands are conveniently located, beautiful
space, good service are attractive to young people. Types of tea imported from Japan,
Taiwan, South Korea with many strange and delicious taste such as Dingtea, Gongcha,
Xingcha Blackball, Mr. Goodtea, Royal tea, Tocotoco, Feeling tea, Bobapop .... This is
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also an alternative challenge for Highlands coffee as the rise of milk tea brands in
domestic market has attracted the young customers segment of the Highlands.
Figure 2-9: SWOT analysis
2.7 Chapter conclusions

From analyzing the operational aspects of the Highlands and using SWOT, we can
clearly see the weak points of the business so as to find ways to overcome and improve
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CHAPTER 3
LITERATURE REVIEWS
3.1 Risk Management concept and definition
It is considered that corporate risk has a significant effect on project and business
performance. Recently, existence of risk is essential in every aspect of business,
identification and understanding of corporate risk. Its influence also play an important
role in developing strategic management (Chapman C and Ward S , 1997). “That
better understand the nature of the risks and can manage them more effectively cannot
only avoid unforeseen disasters but can work with tighter margins and less
contingency, freeing resources for other endeavors , and seizing opportunities for
advantageous investment that might otherwise be rejected as ‘too risky’” (Chapman &
Ward, Project Risk Management: Processes, Techniques and Insight, 1997).
What is the definition of risk? Oxford dictionary define the word “ risk” as: “The
possibility of something bad happening at some time in the future; a situation that
could be dangerous or have a bad result (Oxford Learner's Dictionaries, n.d.) This
definition is also based on the publication of the US Project Management Institute
(PMI) and the UK Association for Project Management (APM). Their definitions are
similar:“Risk - an uncertain event or condition that, if it occurs, has a positive or
negative effect on a project objective”- (Project Management Institute, 2000, p. 127).
“Risk— an uncertain event or set of circumstances that, should it occur, will have an
effect on the achievement of the project’s objectives” - (The Association for Project
Management, 1997, p. 16).
In current years, complicated evolution of business environment has strengthened the
function of risk management on progressive- thinking companies. Risk management is
a key position of business management strategy in making profit and surviving in
marketplace. (Merna & AL-Thani, Corporate Risk Management, p. 1) An efficient is
one of the main elements in success of strategic management.
There are various definitions of the word “corporate risk management” by numerous
researchers and writers. The establishment of corporate risk management in
management strategy is to answer the the following matter: what is the risk, who is
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involved in risk, any available control for those risks any whether these control operate
properly. If there is none of effective controls, there is requirement of actions to reduce
the risk to a reasonable and acceptable level. (Tupa, Simota, & Steiner, 2017, p. 1225)
Generally speaking, risk management is a formal process of identifying, analyzing and
responding to the influence of risk in appropriate way (Merna & AL-Thani, Corporate
Risk Management, p. 2).
A brief view of the phrase “risk management” in “Fundamental of risk and insurance”
(tenth edition):
“Risk management is a scientific approach to dealing with risks by anticipating
possible losses and designing and implementing procedures that minimize the
occurrence of loss or the financial impact of the losses that do occur.” - (M.Vaughan,
1807, p. 16).
Although there are many ways of defying risk management, they all focused on 2
points: the first is that risk management is relevant to risks, and the second is that the
management’s process and management is for evaluating and managing the risks faced
by the enterprise.
Levels within a corporate organization (Merna, Management and Corporate Risk,

Appraisal, Risk and Uncertainty, 2003).
3.2 Risk Management tools
One of the biggest challenges that organizations have to confront in the present is how
to apply any risk managements in effective manner in order to identify, limit, and
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eliminate hazards in business. With the expectation to perform the best risk
managements, many risk management tools are needed.
Tools are described by many different researchers. Tools is illustrated by French
Saward (1983) as an instrument which are known as both manual and mechanical used
to achieve its intention of controlling and managing risk. Also, tools and techniques
have close relationships of each other as states by ( (Merna, F, & Al-Thani, Corporate
Risk Management (Second-Edition), 2008, p. 67)): “the methodology which employs
numerous techniques to achieve its aim” that RMT employs decision tree technique is
typical example . On the basis of this point, tools that organizations use to manage risk
consist 2 main categories: qualitative and quantitative techniques.
Qualitative method is definitely appropriated and used to compare undesirable risk
facing a project from the impacts of them happens on the project outcome. Qualitative
technique is highly recommended in the process of risk analysis and assessment which
based on experience, descriptions and scales. (Thompson & Perry, 1992, p. 68) .
According to (Merna & Al-Thani, 2008, p. 69), qualitative includes: brain storming,
assumption analysis, Delphi , interview, hazard and operability studies (HAZOP),
checklists, prompt lists, risk register, risk mapping, probability-impact tables, risk
matrix chart, project risk management road mapping.
However, quantitative techniques are considered when the capability of the investment
and project obtaining its aims within time and budget is needed for budget
authorization or presentation of the project’s status to the highest of managers (board
of directors) (Merna & Al-Thani, 2008, p. 76) -. This analysis method based on
mathematical formulas and consists 5 main methods: decision tree, controlled interval
and memory technique, Monte Carlo simulation, sensitive analysis, and probability-
impact Grid analysis.
Moreover, some other RMT are also used in some particular cases. These methods
include: soft system methodologies (SM), utility theory, risk attitude and utility theory
(risk neutral, risk seeking, risk averse), nominal group technique, stress testing and
determining analysis, tornado diagrams.
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In research of (science direct), the key in RMs are the decisions on what tools should
be apply suitably and effectively. In this research, researcher also point out the most
common tools are used within today complex economy, they are: brainstorming,
Delphi method, sensitive method, risk matrix, Net work scheduling (PERT, CCM,
CPM), decision tree, artificial neutral network, modeling and computer simulations.
Some most common tools are discussed later on the basis of research of (Merna & Al-
Thani, 2008, pp. 69-84).
In recent decades, brainstormings are used widely and spread for all types of business
and applied by everyone who has issues with desire to be solved. (Chapman, 1998, p.
337) Chapman indicated that brainstorming process consists set of actions: redefining
the issues, listing ideas, so as to find the potential solutions, selecting solutions that
really needed for this problems and conducting them effectively. The basis rules of this
method includes:
● Requirements of time restrictions.
● A comprehensive declaration of the matters.
● A methods of generating ideas.
● Visible space of storing ideas and let them incubate.
● Implementation of the principle that no bad ideas exist.
● Suspension of assessment.
● Inspiration of participants to think and drift around the problems.
● Quantity is considered rather than quality.
● Cross-fertilization by obtaining the team ideas and expanding and developing
them.
Brainstorming typically consists 12 people in one team and the length for idea
generating is from 15 to 45 minutes or can last all day (Sunday Times, 2001).
Second, Delphi method has features of predicting problems in the future that helps
managers make a forecast so as to prevent and eliminate any unnecessary view to
make right decisions. Delphi technique includes following process as identified by
(Merna, 2002):
● The standpoints of the risk impacts related to a project or investment is really
necessary from respondents.
● Then, the chairpersons who have responsibilities to check and compare the
information and declare brief of the findings to the respondents.
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● Finally, a set of steps mentioned above can be done again until either consensus
is reached or no benefit can be found from more reiterating.
Third, risk matrix chart is one of the most useful method which implemented in risk
controlling by discriminating high impact risk from low-impact risk based on the
impacts and the probability of the risk.
Figure 3-1: Risk matrix

This method is explained in more details by using the chart below:
From this chart above, the impact of risk and its probability can be clearly realized.
For instance, the case of unpunctual employee for work would be considered as
KITTENS with low probability and low impact of risk since little attention is needed
with the reason is that employees finish their work in own time. On the other hands, in
drug development of a pharmaceutical product, it is essential for this product to be
tested to bring the final comfortable results. During test, the prohibition of the side
effects of first experiment in person are extremely high and cause significant impacts.
This example of testing pharmaceutical product is classified as TIGERS with both
high probability and impacts. To minimize these reactions by keeping the test down to
a small level such as small samples and ensuring the person take the test are insured
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long-term effects. It can be seen from this chart, TIGERS and ALLIGATORS are both
needed to be lessen before KITTENS and PUPPIES.
In the fluctuation and competition of business, management are regularly confronting
with multiple choices. In general, management face with the options for only one and
this create opportunity costs. To select the most effective option, decision tree methods
developed and used widely. Decision tree is depicted by (PMBOK, 1996) PMBOK
(1996) as diagrams with branches that show the interaction between decisions and
interrelated chance events. This method describes a decision result and expected
outcome under each possible set of circumstances. If the probability and value of
potential outcomes are given that using this method to calculate with the objective of
creating expected value of each choice. The managers will base on the differences of
expected value to make right decisions. The form of decision tree method is depicted
by square note and linked by branches, this method is explained clearly through
example as follow:
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Figure 3-2: Typical decision tree (Merna & Al-Thani, 2008, p. 79)
3.3 Factors affecting the success of RM
For the development and successful enterprise, it should be a strict control system
between the many parts of the enterprise. Successful implementation of risk
management will help the whole system operate smoothly, strictly controlled. And
here are the factors that create the success of the risk management system in the
enterprise.
3.3.1 Control system and risk management:
The performance of RM depends on (i) probability of occurrence, (ii) severity of
impact, (iii) susceptibility to change and degree of interdependency with other factors
of risks.
This model can be used to describe risk situations or events in the modelling of any
investments for risk analysis. The use of a risk model helps reduce reliance upon raw
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judgement and intuition. The inputs to the model are provided by humans, but the
brain is given a system on which to operate:
Figure 3-3: A risk management system

A risk management system is a model, it provides a means for identification,
classification and analysis and then a response to risk. Therefore, the most
important factor in the risk management system is the strict internal control
system.
The development of information risk control is also a major factor in controlling the
risk of information software development is a key factor which must be considered.
Smith (1999) identifies a number of software risks. These include personal shortfalls,
unachievable schedules and budget, developing the wrong functions, wrong user
interface, a continuing stream of changes in requirements, shortfalls in externally
furnished components, shortfalls in externally performed tasks, performance shortfalls
and strained technical capabilities External factor -;Several researchers have studied
the influence of organizational external factors on the company and their relationship
with construction risk management (Merna, F, & Al-Thani, Corporate Risk
Management (Second-Edition), 2008, p. 11).
Internal factor – Human factor
Regardless of the industry, type of organisation or style of management, the control of
risks associated with human factors will affect project and portfolio success. The
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human contribution to project success, or failure, encompasses the actions of all those
involved in the planning, design and implementation of a project.
Obviously there is potential for human failure at each stage of the project life cycle.
Managing the risks associated with human failure remains a challenge for successful
project management.
Identification of the people or groups who influence an investment or project process
or its outcome is crucial. It begins the process of eliciting information about the
potential contribution to the business risks during and beyond the investment’s life
cycle and is the first step in dealing with human factors in risk management.
3.3.2 Culture factor
The culture of the country will affect the personality, habits or behavior of the people
of that country. The grasp as well as understand the culture of a nation in general and
the culture of the society or business in particular will deeply affect the habits of
customer, nature of personality of the people from which the company. From that, the
company will control the employees in the business to fit the culture as well as
understand the habits of customers to develop appropriate strategies in the
development of products or services of the business.
In studies, we have carried out a more in-depth study of the socio- cultural factors of a
country, including the type of economy, ideology (capitalist, social democratic,
democratic or communist), demographic pattern, level of education, social
norms/values/beliefs, social mobility and structure and culture.
3.3.3 Internal control system
Suggests that a company’s chance of success depends heavily on the quality of the
board, senior management and the company’s competitive position. The authors agree
with the above, but also cite the general state of the economy, such as the rate of
interest, inflation and exchange rate, and external environmental factors, such as those
concerned with politics, economics, society and technology, as critical factors in
determining the success of a corporation (Merna, F, & Al-Thani, Corporate Risk
Management (Second-Edition), 2008, p. 188).
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Factors controlled by directors include the board, the chairman and the CEO, board
balance, supply of information, appointments to the board and re-election (Merna, F, &
Al-Thani, Corporate Risk Management (Second-Edition), 2008, p. 192).
▪ Causal factors (Merna, F, & Al-Thani, Corporate Risk Management (Second-
Edition), 2008, p. 262)
▪ Emotional pressure
▪ Feeling tired or unwell
▪ Use of faulty informal/unapproved procedures faulty job and system designs
An organisation’s competitive business strategy is the distinctive approach taken at
business level when positioning itself to make the best use of its capabilities and stand
out from competitors. From the work of Michael Porter (1970–2002), the authors have
developed four key elements that determine the limits of competitive strategy at
business level. These are divided into internal and external factors (Merna, F, & Al-
Thani, Corporate Risk Management (Second-Edition), 2008, p. 224) .
Internal factors include the organisation’s strengths and weaknesses, and the values of
key implementers at the strategic business level. External factors include business
opportunities, threats and technology advances, and expectations of the business
environment within which the organisation operates.
Targets for each major activity will also be required. For example, for the marketing
sec- tor the objective should clearly indicate for each product or service target
sales/volumes and the corresponding sales/price to be achieved over the plan period;
and a study of the environmental factors such as marketing trends, political
developments, technology and general economic factors which are likely to affect the
business (Merna, F, & Al-Thani, Corporate Risk Management (Second-Edition), 2008,
p. 225).
3.3.4 Environmental management systems
A critical factor in this is the synergy required between business operations and
associated information systems and. A further key factor is understanding and dealing
with the legislative, environmental, technological and other changes that impact on an
organisation’s business (Merna, F, & Al-Thani, Corporate Risk Management (Second-
Edition), 2008, p. 254) The greatest change comes at project level. The project strategy
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plans focuses on how all the macro-environmental factors and the micro-effect project
success will be managed in order to meet the goals set by the business unit strategy.
Issues of risk that relate to people are often reclassified as management of ‘human
resources’ and so are ignored as risk factors; consequently, a large element of risk
assessment is excluded from project risk management. The nature of the uncertainty
which people contribute to the project can be divided into two principal areas: human
resource management issues, concerned with effective management competencies and
practices, and the perspectives of stakeholders concerning the project and its attendant
risks (Oldfield and Ocock 1999), (Merna, F, & Al-Thani, Corporate Risk Management
(Second-Edition), 2008, p. 261)Many of the risks identified at the corporate level are
global or uncontrollable risks, often associated with political, legislative, regulatory,
economic and environment factors. If any of these risks are considered too great, then
a project may not be sanctioned for further risk assessment at strategic business or
project levels.
Figure 3-4: Typical risk parameters (Adapted from Allen 1995)

(Source: Merna, F, & Al-Thani, Corporate Risk Management (Second-Edition), 2008)
In summary, the performance of risk management is driven by following factors:
● Control system and risk management
● Internal control system
● Human factor
3.4 KPI key performance management
KPIs can be calculated from a fundamental set of measured quantities, the addition of
these fundamental interdependencies will allow better and more realistic estimations of
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the impacts that disturbances in the production system will have on overall
performance or other indicators.
KPI also to measure the managerial capabilities of object, the KPIs that are most
commonly used by general contractors for measuring the performances of object
should first be identified. The identified indicators were categorized into three main
groups:
● KPIs Affecting General Performance
● KPIs Affecting Experience and Past Relations
● KPIs Affecting Communication Skills.
After identifying and categorizing the KPIs, expert opinions were asked to
management a practical framework with most commonly preferred KPIs.
These KPIs are selected and adapted to the project requirements in such a manner to
reflect clearly the economic, environmental and operational performance of the
processes, thus enabling a direct comparison between the conventionaland the
corresponding proccesses.
3.5 Steps in Risk Management
Now, let’s take a look at the processes by which risk management is undertake
The process of risk management includes (Merna, F, & Al-Thani, Corporate Risk
Management (Second-Edition), 2008).
● Identification of risk/uncertainties
● Analysis of implications
● Response to minimize risk
● Allocation of appropriate contingencies
In many decades, risk analysis and risk management have been researched in many
areas and are being popular used as integral parts of the overall business management
approach and in mostly part of projects; in many cases, they have become an essential
compulsory for financial planning and regulatory approval. Moreover, the clients now
ask for contractors to show potential risks in an investment and to illustrate how
effectively these risks would be controlled should they occur.
To overcome this a number of companies and research authorities have identified ways
to make the risk management process description. Especially, there are a number of
phrases related to this process. Merna (2002) took three processes, namely risk
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identification, analysis and response, and implemente a 15- step sequence to account
for risk management, Boswick’s 1987 paper (PMBOK 1996), Eloff et al showed four
processees. The Bristish Standard BS 8444(BSI, 1996). The Project Management
Institude’(PMIs) Guide to the project Management Body of Knowledge (PMBOK
1996) also illustrates four processes along with project risk management.
In order to outline the risk management process, the PMBOK (1996) system have been
used to give a brief description of the nesessary process, namely
● Risk identification
● Risk qualification and analysis
● Risk response
Now, the main processes engaged in project risk management will be discussed below:
3.5.1 Risk identification
Risk identification measuring which risks properly affect the project and documenting
the characteristics of each one. Both the internal and the external risks will be solved
by risk identification. The primery sources of risk that have the potential to result in a
major effect on the project should also be determined and devided according to their
influence on project cost, time schedules and project objectives. Both historical and
current information are used in the early stage of project appraisal and should happen
before detailed analysis and allocation of risks can take place.
It is also important for risk analysis to be conducted on a regular basis during all stages
of the project. Risk identification should be investigated in a similar aspect at both
corporate and strategic business levels.
Elements of the risk identification process included inputs and outputs. To know what
the risk identification process requires, consideration should be given to its input
requirements and the outputs. Risk identification embraces determination of types of
risk affecting the project and documenting the characteristic of each one. Risk
identification inputs are given as:
● Product or service description
● Other planning outputs, for example work breakdown structure, cost and time
estimate, specification requirements
● Historical information
Outputs are:
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● Sources of risk
● Potential risk event
● Risk symptoms
● Input to other processes
After identification:
● Risk should be validated
● There is a consideration of the risk response options
Risk identification is used for:
● To show and capture the most significant participants in risk management and
to give the subsequent management basis.
● To stablise the groundwork by providing all the essential information to analyse
risk
● To identify the project or service components
● To identify the inherent risks in the project or service.
The risk identification process depends on information, which can or can not be
readily available. This may be in the form of historical data process, often risk
registers of previous projects and operations or information from external sources. The
better the informational foundation of the risk management process, the more precise
its results. Thus, the required information, and the way its collected, and when it is
needed is central to risk identification. This include:
● Collecting available information about the project including its scope,
objectives and strategy
● Covering the gaps in the existing information to reach a clear, unambigous,
shared understanding of the project.
3.5.2 Risk quantification and analysis
Risk quantification and analysis include risk evaluation and risk interactions to assess
the range of possible outcomes. There is a number of available tools and techniques for
the use of risk analysis/quantification and the analysis process. The major output from
risk quantification and analysis is a list of opportunites that should be achieved and
threats that ask for attention. The risk quantification and analysis process should also
document the sources of risk and risk events that the management team has
consciously decided to accept or ignore, as well as the individual who decide to do so.
( Dawson et al. (1995) illustrate that risk management makes up an important part of
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risk analysis. The purpose of risk management is to estimate the balance which exists
between risk and opportunities to assist management resposes to embrace
opportunities and advoid risks. These risks and opportunities could appear different
when be in side of company perspective as opposed to the more usual ‘project’
perspective. Moreover, the identification of risks and opportunities for a project should
be rely on the objectives for starting the venture, and for a company should be rely on
the objectives of company. The two set of objective are not the same but linked; the
objectives of a company might involve, in the short term, whilst the risks to project
linking this to happen might be seen to influence the profitability of the project and the
esteem in which the management is owned. Therefore, to conducting risk management
the objectives must be clearly defined at each organisation level.
There are certain two types of approach used in the risk quantification and analysis
process. These are quanlitative risk ananlysis and quantitative risk analysis.
Quanlitative risk analysis includes a list of risks, and their outcomes description.
Quanlitative risk analysis has evaluations that do not cause a numerical value. Instead,
this analysis pictures the nature of the risk and helps to enhance the awareness of risk.
In this way, analysts can focus their time and efforts on fields that are most sensitive to
the risk.
Quantitative risk analysis often includes the use of computer models exlpoiting
stastical data to conduct risk analysis.
3.5.3 Risk responses
Risk response involves defining enhancement steps for opportunities. Responses to
threates generally fall into one of the following categories.
3.5.3.1 Risk avoidance
Risk avoidance involves the removal of a particular threat by eliminating the source of
the risk within a project or by avoiding projects or business entities which have
exposure to the risk.
By the example of a contractor wishing to avoid the potential liability losses associated
with asbestos, and so never acquiring any project that involves operation with this
material, Al-Bahar and Crandell (1990) illustrate the latter avoidance option .On the
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same way, but this time considered from the client’s perspective, also lends itself as an
example of elimination a source of risk within a project if the risk is avoided by
redesigning the facility so that it uses an alternative material to asbestos.
3.5.3.2 Risk reduction
If it does occur, risk reduction may involve either lowering its probability or lessening
its impact (or both) because the significance of a risk is related to both its probability
of occurrence and its effect on the project outcome.
3.5.3.3 Risk transfer
Since a typical project or business involves numerous stakeholders, it follows that each
should ‘own’ a proportion of risk available in order to elicit a return. Therefor, projects
may be seen as investment packages with associated risks and returns.For instance, if a
project involves the construction of a facility, some risks associated with that
construction should be transferred from the client organisation to the contractor
undertaking the work. In consideration of this risk, the contractor will expect a reward.
Contractual risk allocation will not be dealt with in detail here but the fundamental
consideration are the same for all risk transfers regardkess of the vehicle by which
transfers are facilitated.
The example of the time frame in a construction contract, the best position to manage
this risk is the contractor because they have a greatest control over the completion
date. The way to mitigate any such loss in revenue of the client ,if construction
overruns this date when the facility is not built by a certain date ,the contractor
compensates the client for the loss.The contractor will consider this risk in its tender
and can expect that the contract price will be higher than it would be in the absence of
the clause,that is ,the transferee imposes a premium on accepting the risk. However, if
the revenue loss is likely to be too great for the contractor to compensate for, there is
little sense in transferring the risk in this way.
Insurance is a popular technique for risk transfer in which only the potential financial
consequences of a risk are transferred and not the responsibility for managing the risk.
Financial markets provide numerous instruments for risk transfer in the form of
‘hedging’. This is best illustrated by way of example, the fluctuation in the price of an
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input may be ‘hedged’ through the purchase of futures options so that in the event of a
future price rise, the options soften the effect.
3.5.3.4 Risk retention
Risks may be retained intentionally or unintentionally. The latter occurs as a result of
failure in the risk management process, these being risk identification and risk
analysis. If a risk is not identified or if its potention consequences are underestimated,
then the organisation is unlikely to avoid or reduce it adequately.
As suggested above, a relationship between risk and return exists such that, with no
risk exposure, an enterprise cannot expect reward. Ideally, retained risk should be that
with which the organisation’s core value-adding activities. Finnaly, risk reduction may
only be cost effective up to a point, thereafter becoming more costly than beneficial.
Literature review provides complete information on aspects of risk management,
particularly the steps taken to deal with an enterprise's risk.
CHAPTER 4
SURVEY RESULTS AND FINDINGS
4.1 Introduction
In the next chapter, we will perform surveys at 10 locations of Highlands coffee in
Hanoi and co-supervise online to collect data, analyze to find potential of impicit risk
in Highlands coffee.
4.2 Survey description
The targeted responders include 3 groups: customers, managers, and staffs. We
conducted face-to-face interviews with surveyees, then put answers into survey
questionnaire. The questionnaire is created online and made available to all targeted
surveyees.
The online form for Highlands’ customers group is provided in the link
https://docs.google.com/forms/d/e/1FAIpQLSc4RJM0hzohVYcd-br-
2V05qO0viKFYzPXfn3hte64knFe5mA/viewform.
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The online form for Highlands’ manager group is provided in the link
https://docs.google.com/forms/d/e/1FAIpQLScGZhVQuo61dTswPiBv93LL0ovYwPY
8gebKsMeSSd5lDnz1Ow/viewform.
The online form for Highlands’ staff group is provided in the link
https://docs.google.com/forms/d/e/1FAIpQLSc1JLbFDDQYISKVpTcgoi_evBYSPui6
9pmJbAi03gBAzvvgjA/viewform.
The responses of the online surveya are captured in a excel file available at
https://docs.google.com/spreadsheets/d/1ffkg6L8JlkLOYXl8S7fkGYl-
bLCp8jp9YI6IkfhxeY4/edit#gid=994350797
The research team uses MS Excel to process data of the survey. The output includes
percentage of responses, assessments, and charts to visualize results.
4.3 Survey Results
4.3.1 Customer satisfaction/ assessment
Column
Labels
Total Total
Male Female % Count
Cou Cou
Age interval % nt % nt
< 18 years old 10.00% 1 5.56% 1 7.14% 2
14.29
> 30 years old 30.00% 3 5.56% 1 % 4
18 - 30 years 88.89 78.57
old 60.00% 6 % 16 % 22
100.00 100.00
Grand Total 100.00% 10 % 18 % 28
Table 4-1: Profile of responders
Level Customer satisfaction on Comparative

advantage
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Rush
-
Produ hour
ct Prod Serv servi
divers uct ice ce Promotio
ificati Qual quali quali Themed nal Service
on ity ty ty space activities Price quality
1 0 1 2 2 1 1 3 2
2 5 3 1 3 2 9 3 2
3 11 6 10 13 6 6 10 7
4 7 11 12 5 15 7 7 12
5 1 4 0 0 1 2 2 2
24 25 25 23 25 25 25 25
Table 4-2 Customer satisfaction
Comparative
Customer satisfaction on advantage
Rush
-
Prod hour
uct Prod Servi servi The Promo
diver uct ce ce med tional
sifica Qual quali quali spac activit Service
Level tion ity ty ty e ies Price quality
1 0% 4% 8% 9% 4% 4% 12% 8%
2 21% 12% 4% 13% 8% 36% 12% 8%
3 46% 24% 40% 57% 24% 24% 40% 28%
4 29% 44% 48% 22% 60% 28% 28% 48%
5 4% 16% 0% 0% 4% 8% 8% 8%
100 100 100 100 100 100
% % % % % 100% % 100%
Table 4-3 The proportion of customer satisfaction
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Regarding product diversification, almost

a half (46%) stated neutral (no over no
under-diversified), while 33% says
Highlands have stated that HL has well
diversified its products to match with
customer demands. However, there are
still 21%, or one out of every 5 customers,
state that the products of Highlands are
Figure 4-1: Customers’ assessment on
not diversified enough.
Product diversification
Regarding the quality of the theme of

Highlands area, just under a quarter (24%)
stated neutral, while 64% says Highlands
have stated that HL has well in themed
space. However, there are still a minority
(12%) say that themed space is not
creative enough to attract them.
Figure 4-2: Customers’ assessment on

theme
The bar chart below shows the quality of the product of Highland, slightly more than
fifth (24%) evaluate that is medium level, while 60% appreciate quality in the product
that bring satisfaction for them. Nevertheless, just under a fifth (16%) say that the
product quality is not good. On the other hand, regarding the service quality, the
number of neutral (40%) and the number of high quality (48%) in evaluation are
almost similar. However, a few (12%) customers are not pleased about the service
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quality of Highland. In general, both product quality and service quality get high
standard to bring satisfaction for the customers.
Figure 4-3 Customers’ assessment on product quality
Regarding the rush-hour service quality,

more than a half (57%) stated neutral, while
amount of customers opinion say that quality
of service at rush hour are not good (22%),
which are equal amount of clients evaluate
high in quality service of rush hour.
Figure 4-4 Customers’ assessment on rush-hour service quality
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The bar chart represents the promotional

activities of High land coffee. Slightly
more than fifth (24%) have a neutral
opinion that mean no under no over
standard in promotional activities. Just
over a third (36%)say that promotional
activities are good. As many as 40%
contended that the Highlands is weak at
promotion activities.
Figure 4-5 Customers’ assessment on promotional activities

The bar chart below illustrates the data about the comparative advantage with two
fields are price and service quality. Just under a half (40%) stated neutral (no over no
under-standard), while 36% declares Highlands have stated that Highlands has well
price in comparative advantage, it means their charge match with customer
satisfaction. However, slightly more than a fifth (24%) say that price of Highlands are
exetremely high to associate with the competitors.In addition, regarding service quality
in comparative advantage, just over a fourth (28%) stated neutal ,more than a half
(56%) agree that service quality is better than their rival.However, a minority (16%)
does not evaluate highly the service quality of Highlands when comparing with
competitors.Ịn conclusion, Highlands coffee are still highly regarded in overall.
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Figure 4-6: Customers’ assessment on comparative advantage
Colum
n
Labels
Total Total
Male Female Count %
Age
interval Count % Count %
Never 0% 1 6% 1 4%
Rare 3 30% 5 28% 8 29%
Sometimes 4 40% 10 56% 14 50%
Regular 3 30% 2 11% 5 18%
Grand
Total 10 100% 18 100% 28 100%
Table 4-4 Frequent attendance of customers
4.3.2 Staff satisfaction/assessment
The bar chart below illustrates the compensation policy valuation in two perspectives,
namely salary and wage, bonus and reward, coming from Highlands coffee staffs.
Overall, most staffs in Highlands coffee assess a average or good level of both salary
and wage, and bonus and rewards. Moreover, no one gives one out of five for this two
assessment areas. Besides, the bonus and rewards in Highlands seem quite attractive to
staffs here as they are at good level.
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Figure 4-7: The compensation policy valuation
Thebar chart below shows the relationship between staffs and managers, and colleague
relationship. Overall, the relationships are good in the eyes of most staffs. No one
gives one out of five points for workplace environment, which mean that there is no
dissatisfaction among staffs as well as staffs and their manager. Besides, 22% of staffs
agreed on an excellent their relationship with colleagues and managers.
Figure 4-8: The working environment
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The bar chart describes the

staffs opinion about training
programs in Highlands coffee
across three prospective,
namely training qualification,
training scale, and training
load. In general, we can see
that most of staffs give four
out of five points when they Figure 4-9: Assessment on Training
value training programs in
three different features,
including qualification, scale,
and load. Moreover, all staffs
are likely to satisfy with
training programs as no one
give one out of five points.
The table shows the number of

years staffs work at Highlands
Working
coffee. It is clear to see that half
years Response %
of employees works at Highlands 3-6 months 4 44%
coffee from three months to six <= 3
months. Moreover, around 33% months 2 22%
>= 1 year 3 33%
staffs work at Highlands over a Grand
year. This means that Highlands Total 9 100.00%
coffee does not focuses on Table 4-5 The number of years staffs work at
recruiting full- experienced Highlands coffee
people but those who are interest
and enthusiastic in this area.
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4.3.3 Manager satisfaction

As can be seen from the table below that the rush hours of Highlands in a day is
ranging from 12h to 15h in morning and from 19h to 22h in evening. Both of those
intervals make up 40%. However, the range from 9h to 12h and 19h to 22h account for
20%, a half lower than previous intervals. In sumary, the period of 19h to 22h was the
most overload time.
Row Labels Count %
12-15h, 19-22h 2 40%
19-22h 2 40%
9-12h, 19-22h 1 20%
(blank) 0%
Grand Total 5 100%
Table 4-6 The rush hours of Highlands coffee

The table below illustrates that the majority of time serving in Highlands is from 2
years to 4 years, namely 50%. It is followed by time serving of more than 4 years
which accounted for 33% and are 27% lower than that from 2 to 4 years. Under 2
years makes up a significant proportion with the percentage of 17%. We could state the
time serving of managers intervied n particular tend to be more than 2 years.
Row Labels Count %

Under 2 years 1 17%
2-4 years 3 50%
More than 4 years 2 33%
Grand Total 6 100%
Table 4-7 The majority of time serving
The table below shows that job applications is from 50% to 70% selection with the
percentage of 40%. However, the remain evaluations of 30% to 50%, 70% to 90%
and more than 90% are the same, namely 20%. In conclusion, selecting standardized
job applications rated at 50-70% is more common.
Row Labels Count %

30-50% 1 20%
50-70% 2 40%
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70-90% 1 20%
More than 90% 1 20%
(blank) 0%
Grand Total 5 100%
Table 4-8 The proportion of selecting standardized job application
As is illustrated by the table below, the period of time to take up the management
position from 1 to 3 years and under 1 year are most common. Both periods of time
stand at the same rate of 40%, whereas that it took more than 3 years to get the
management position is made up just 20% of the total.
Table 4-9 Time to take up the management position
Row Labels Count %

Under 1 year 2 40%
1-3 years 2 40%
More than 3 years 1 20%
(blank) 0%
Grand Total 5 100%
The table below shows the rate of trainned satff was kept on working in Highlands
after a period of time working there from evaluation of 6 managers in different
Highlands pots, in that the evaluation of from 50% to 70% level was the highest
percentage and reached the rate of exactly 50%. However, the ramain levels which
are from 10% to 30%, 30% to 50% and 70% to 90% are similar and accounted for
subtatial low percentage at just 17%. In conclusion, there is a tendancy to keep staff
after trial working time.
Row Labels Count %

10-30% 1 17%
30-50% 1 17%
50-70% 3 50%
70-90% 1 17%
Grand Total 6 100%
Table 4-10Select rate of Training staff retain.
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As can be seen from the chart below that the management evaluation of the
Highlands management position training programs is mostly rated at level 4 and 5
which are well-regarded groups. As far as training quality is concerned, both level 4
and level 5 represent a percentage of 50% of the total score. However, the training
scale has a significant difference, level 5 was rated at 67% and it was half higher
than level 4 which accounted for slighly over 30%. That means that the training
scale in the Highlands is relatively professional. Similar to the previous two
dimensions, in terms of training volume, the percentage was at the highest level is
level 4 with approximately 70%, and also 34% higher than the rating at level 5
(33%). There is a common point in these three aspects that there is no assessment
that the highlands management training program is rated at from level 1 to level 3.
In conclusion, the evaluation of the management of the training programs is
extremely good and strict in terms of quality, size and volume.
Figure 4-10 Evaluation of the training program for the management

From the chart below it is clear that remuneration of Highlands was assessed by
managements level was relatively satisfied and mainly at level 4. In terms of payroll
commensurate with responsibility, level 4 represents a significantly high percentage
which reached approximately 83%. Also, there are still some aspects of this
assessment at level 5; however, level 5 is quite low at 17%. There is no assessment at
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level 1 to level 3. Likewise, the bonus based on revenue made up for the highest
percentage at level 4, namely 67% and it is significantly higher than level 3 and level
5. Both level 3 and 5 are at 17%. In contrast, highlands insurance rates are rated at
level 5- extremely satisfied level - with a rate of 67%. Percentages rated at levels 3 and
4 also have similarities, both at 17%. It can be seen that most managers are rather
satisfied with the remuneration of Highlands without any dissatisfactions.
Figure 4-11: Evaluation of remunerations
The chart shows below that the quality of service of Highlands in rush hours, material
preparation and material preparation against demand are all assessed highest at level 4.
In deed, material preparation accounts for by far the greatest percentage with more
than 80% and it is followed by quality of sevice in rush hours and material preparation
against demand respectively as aproximately 70% and 50%. Also, 17% of assessment
of material preparation against demand at level 5. There is no evaluation of these three
aspects at bad level from level 1 to level 2. In conclusion, Highlands are really good at
material preparation as well as assuring sevice quality.
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Figure 4-12: Assessment of the factors affecting the operation of the Highlands coffee
The chart illustrated below that the policies and programs of the Highlands are always
timely and do not take long to adapt. The level of timely response to policies and
programs is highest in percentage 4 with 66% and it was more than half with a rating
of level 5, which accounted for just 33% of the overall assassetment on this aspect.
Figure 4-13:Evaluates the level of adaptation to highlands programs
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4.4 Findings
After surveying at 10 points of Highlands Coffee in Hanoi and applying for 3
objectives: management, staffs, customers we could bring some the following
judgments:
4.4.1 Assessment of customers
According to the Figure 4-1 (page 70), Highlands coffee product development team
has performed well in that about 4 out of 5 customers contend that the products of
Highlands is diversified as expected. Highlands has succeeded in creating the diversity
in its products, which are the combination of Vietnamese style coffee products with the
international flavor products, that are suitable for each group of customers. However,
there are still approximately 1/5 of customers commented that the products of
Highlands are well under-diversified. Most of them are casual female customers. They
stated that they are not attracted to the product menu which is almost exclusively
focused on coffee products. That means Highlands coffee have to reinvestigate the
demands of those customers to understand their actual requirements so that Highlands
coffee can create products in match with.
According to the Figure 4-2 (page 70), the space of enjoyment (decoration, facilities,
material) of Highlands coffee was highly rated with 64% of respondents being
relatively satisfied with spacious, airy spaces and combination of indoor and outdoor
designs. Besides, there are some neutral opinions, which accounts for 21%, assumed
that the theme of Highlands is not so impressed but they do not underestimate the
quality of the enjoyment spaces. Their assessments about the satisfaction level of
Highland space are at medium and Highlands is not their first choice. On the other
hands, there are a small number of customers (12%) who underestimate the space of
enjoyment in Highlands coffee. Most of them are young people who are not impressed
by Highland space’s style. There are some other opinions indicated that Highlands has
no breakthrough in its style despite the fact that it has developed in Vietnam for a long
period of time.
According to the Figure 4-3 (page 71), the quality of material of Highlands products
were assessed at great level. The coffee beans are purchased from the farmers' farms in
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Gia Lai, Dak Lak, Buon Ma Thuot and Lam Dong helps Highlands to provide
customers with high quality coffee products. Besides, the material of products, such as
bread, peach tea and cake ...are also purchased from reputable suppliers such as Metro.
This is also reflected in the customer's assessment with 60% of good level about
Highland products’ quality. In addition, there are still 16% of customers are not really
satisfied with the quality of HL products; however, this made up only small proportion.
For quality service, more than half of customers (60%) surveyed highly appreciates the
service with the professionalism of well-trained staffs.Between the ages of 18 and 25
surveyed, most of them prefer getting their drinks to being served because they can be
more proactive and they want to have privacy space without botheration of employees.
There are still 12% underestimate the quality of service and this belongs to the
customer groups over the age of 30. They often do not prefer getting their drink
themselves because of the habit of being served of most Vietnamese people. In
general, the quality of products and services has consistency and is highly appreciated
by the majority of customers.
According to the Figure 4-4 (page 72), the percentage of customers who assessed
service quality at great level and that of customers not satisfied with service quality in
rush hour are both equal and it means that the rush-hour service quality is very
location-dependent. For example, for Hoang Dao Thuy Highlands coffee is at very
crowned area, intensity of customer coming is very high, thus staffs may often get
overloaded that leads to slow service quality or crowded space which cause annoyance
for customers. On the other hands, with Highlands coffee. Because the density of
population is less, the number of guests at peak time is not overloaded; therefore,
service quality is still stable.
According to the Figure 4-5 (page 72), promotion programs are not highly rated with
the highest percentage of approximately 40% at level 2-dissatisfaction level. The
reason for this dissatisfation is that customers often are not referred to promotion
programs when purchased Highlands products, and they even have to ask employee
for discount vouchers or special offers. The other reason is that promotion programs
are also not diversified with low frequency, it can be explained that Highlands has
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already very good sales, thus promotion is not necessary and sales growth is because
of good place/location/theme rather than because of promoting activities.
According to the Figure 4-6 (page 73) most of customers (about 4 out of 5) claimed
that the Highlands has better comparative advantages on Price and Service quality. It
means that price and quality of service are adequate and customers are satisfied with
the value Highlands bring to them and worthy of the money they spent. There are only
1 for every 5 customers contended that Highlands has lower competitive price or
service quality in comparison to its competitors. For the same products and service
quality, many customers at the group of over the age of 30 often care more about the
value of money they spend. When using Highlands products, they assume that the
quality of service Highlands is more expensive than many other brands of the same
type.
4.4.2 Assessment of staff
After conducting the survey, we have some conclusions as follows:
The work environment in Highland has made the staff feel satisfied and the evidence is
that the relationship between employees and management is assessed mostly at great
level Figure 4-8 (p.70). When asked, the employees said that most of the staffs in the
Highlands were students who were active and it was the reason they felt comfortable
when they worked there. In addition, most of the managers was from employee
position so they can also understand and listen to the opinions of their subordinates
more carefully. In other aspect, the highlands rotation of employees between work
locations (once a year) has both advantages and disadvantages. The advantage is that
employees will be work in a new environment, with new people and different
managers and learn how to manage as well as experience from management policies.
In contrary, the rotation of work place also makes it difficult for employees to travel.
Also, changing the work environment also challenges the staffs and management to
adapt quickly to keep the system running smoothly. In summary, in our opinion that
employee training and professional training programs of Highlands have helped them
succeed in creating the ideal working environment for employees in this competitive
beverage industry. David Thai, the founder of Highland coffee, shared the company's
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corporate philanthropy policy: “We do not need to hire highly experienced people. We
do not need to recruit people who have to be trained. We recruit people who love
work, love coffee, show passion for coffee. The skill training is a part of the work”
Moreover, the remuneration policies for staff were assessed relatively favorable. This
is due to the fact that when the staff serve guests heartily, Highlands will attract more
customers and then raise its revenue so that having better remuneration policies. When
interviewing the average staff for remuneration compensation, there are 2 main
problems. Firstly, for full-time employees, their salaries are not enough for their daily
expenses. Secondly, two part-time employees interviewed at Highlands Coffee Van
Phuc - Ha Dong said that since their location is lack of customers, management had
reduced staff in shift work, which made them had to do all the rest, and they felt their
salary was not worth for their effort. From this we can see that the business situation in
highlands facilities is not uniform because of the wrong location and analysis of
customer habits.
Finally, training programs of Highlands are well evaluated in different aspects. For
instance, new employees will have three days of theory at the company office and then
will be divided into real locations for both learning and practice under the guidance of
management. In addition to basic training courses, staff also has workshops, team
building to learn more from other stores as well as contests for employees such as
Master Barista Championship. This is because Highlands are not strict in recruitment
process, there are many young people who are studious and full of enthusiasm working
in this environment. Besides, training programs of Highlands are highly valuable
which have made staff satisfy. However, it also exits negative sides. Although it
creates a dynamic and comfortable environment for employees, it creates a huge
change in the human resources of the Highlands as young workers are more likely to
get bored. That is the reason why Highlands take time to work on training employee
despite of good remuneration policies. Evidence is that most Highlands employees
work in the facility for 3-6 months Table 4-5 (p.71).
4.4.3 Assessments of managers
● Professional training programs.
● Good remunerations policies (salary, bonus, insurance).
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● Flexible working environment.

● Modern design of coffee but still keep the national culture.
● High promotion opportunities.
First of all, Figure 4-10 (p.74) shows that the training programs of the company for
management level are evaluated at the majority of level 4 and level 5 from 50% to
approximately 70% on the quality of training. The size of the training and the volume
of training, in which the training scale is highly rated at level 5 is considered extremely
good. According to actual survey of Highlands, Highlands will have specific training
programs from 1 to 3 months, depending on the ability of each person to complete the
programs. Some of managers are recruited from the outside with mature and long term
in the same industry and second, the others get promoted from the staffs after a long-
working process with careful evaluation from higher managements as well as
colleagues. From survey data of Table 4-9 (p.73), nearly 80% respondent experiences
from 1 to 3 years in the position of employees, the remaining approximately 20% takes
over 3 years to management positions. That means Highlands coffee has relatively
professional training programs, which are setting clear promotion paths with a
promotion period is not too long which mostly from 1 to 3 years as well as great career
advancement opportunities for employees. According to the survey, managers stated
that promotion opportunities in the Highlands are wide open as the coffee company
expands its branches not only in Vietnam but also abroad. The merger of the company
into the Philippine Jollibee Group is good news for managers and highlands employees
in general as they will have more opportunities to take up higher positions in the
Jollibee Group. In addition, the Highlands also provide many conditions for staff to
quickly level up if they were eligible.
The second factor is remunerations for employee of Highland coffee. After
interviewing 8 managers of 10 Highlands coffee shops, most of them expressed their
expectation to continue with Highland coffee. According to survey results of Table 4-7
(p.72), 17% of managers have worked less than 2 years, more than 30% of managers
have been working for from 2 to 4 years, the remaining 50% have been working for
over 4 years. The important factor for them to work for long period of time is that the
company's compensation policy is really satisfied. In addition to a well-deserved
844
payroll, a pay rise on a regular basis, a pay rise at the managerial level, and a bonus
that matches their efforts of boosting revenue. Besides, the insurance policy for
employees is relatively pleasant. Figure 4-11 (p.75) lists three mains remunerations in
Highlands and these three aspects are majority ratings at level 4 and level 5. That is
increasing responsible wages and bonus based on revenue, insurance policies and other
treatments is undisputed success strategies. It is a cycle of stimulating the productivity
of the whole employees in different positions of Highland coffee. The purpose of
raising salaries relative to responsibility or providing amount of money over revenue is
to raise awareness of effective working for manager. Indeed, working efficiently is the
basis for stimulating sales, driving sales beyond targets and as revenue is boosted, it
will simultaneously increase the financial budget to support for employees. Therefore,
compensation, insurance and other benefits will be promoted higher. In summary,
more remuneration policies will make employees work better and more effectively in
raising revenue, and the higher revenue, the higher remunerations.
Third, in terms of operating process, the rush hours of Highlands are three intervals of
from 9 am to 12 am, 12 am to 3 pm, and 7 pm to 10 pm, in that from 7p.m to 10 pm is
considered highest Figure 4-6 (p.72). In rush hours, human resources and raw material
of drinks and foods are often available for use, only insignificant percentage of about
15% to 20% of the labor shortages in shifts and material preparation. The figure 1-8
illustrates that material preparation, against demand, and the operation of Highlands in
rush hours was assessed mostly at good levels. On the balance of human resources,
management will have the task of dividing all employees into shifts made during the
day and transferring shifts into peak hours to meet the urgent need. In addition, each
Highland store has a separate inventory, and raw materials are processed after each
shift to avoid material shortages in the next shift. If there is a shortage of raw
materials, the store will borrow temporary material in the nearest Highlands stores to
solve the problem immediately. Circulation and borrowing of raw materials is a great
idea in handling with the temporary shortage of materials problems in the Highlands,
which few other coffee chains use by synchronizing the entire supplies of materials of
food and drinks for all stores of Highlands coffee chains, not individual stores. This
845
shows that managers of Highlands are professionally trained to solve problems in a

timely manner and the Highlands has an actually tight and unified management
system.
In addition, for each program that is launched to Highlands stores in a timely manner,
and adaptive time both assessed at level 4 as shown in Figure 4-13 (p.76), it accounts
for nearly 70% of good assessment. When the company launched sales and promotion
programs to the stores, the managers and staff will be guided 1-2 days to understand
clearly about these programs then start trial run of 3 to 5 days before the program is
officially launched. It means that before these programs are put into practice, they have
had a period of time to run for trial and if it rated as good and successful, the programs
will be applied. Running for trial before application indicates that the programs
applied in the promotion and raising revenue are mostly suitable for all customers.
Moreover, Highlands coffee has flexible working environment. Most managers in
Highland coffee will be assigned to different locations which takes place once a year.
The rotation helps them to manage and learn management experiences at various
Highlands stores. Also, rotating workplaces will make managers feel comfortable
working in new spaces, not restricted in a certain space. But this factor is also an
obstacle for managers, because continuous rotation will make managers have difficulty
in travel as well as living.
The final factor is the modern design but still retain the Vietnamese culture. Most
managers in Highlands Coffee are between the ages of 25 to 30 so they love the
highlands style of sales as from form of service to self-service. They feel more
comfortable, and more equal with customers.
After interview of managers in different locations of Highlands, it indicates that
although the chain of Coffee has increased rapidly today, customers coming to
Highland coffee still remain loyal to Matcha products, traditional brown/ black coffee.
In the three age groups surveyed, ages 18-30 occupy as the majority.
The factors we listed above was surveyed on 10 Highlands managers. Among them,
the first element of the training quality was rated highest and assessed 9.5 out of 10. In
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our opinion, if Highland can maintain and continually improve their strengths, they
will be able to reduce the risk of employees dropping out or managing problems.
4.5 Findings from other secondary sources
4.5.1 Market share
Coffee has become a multi-style drinks and can be flexibly modified to suit each
culture and each object. That is the reason why enjoying coffee in daily life has formed
a cultural feature throughout the world.
In Vietnam, Highlands Coffee has made great efforts in asserting its position in
competitive market. Starting with the packaged coffee product in Hanoi in 2000,
Highlands has rapidly grown and expanded into a well-known coffee brand and has
been expanding both domestically and internationally since 2002. In 2002, the first
coffee shop was opened in Ho Chi Minh City, and a week later the first coffee shop in
Hanoi. In years later, Highlands Coffee continued to grow and becoming a prominent
coffee system throughout Vietnam.
In 2006, Highlands Coffee reached 25 coffee shops, this is also the time to mark the
change of Highlands Coffee both in terms of brand identity and its space. In 2011, Viet
Thai International, the owner of Highlands Coffee, sold 49% of its Vietnamese
business and 60% of its Hong Kong business to the Jollibee Group from the
Philippines for 25 million USD and the deal has helped the coffee chain get more
capital to carry out aggressive expansion, especially in recent years. In 2011, the
Highlands only 50 stores but this number has reached 75 shops in 2015. At the end of
March in 2017, Highlands has total 180 coffee shops which mostly in big province in
Vietnam such as Ho Chi Minh city, Ha Noi, Hai Phong, Da Nang with 164 coffee
shops and 16 shops in Philipines.
The market shares of Highlands as follow:
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Figure 4-14 comparative buzz volume and sov of premium coffee chain
From this diagram in 2015 Highlands coffee has the highest percentage of market
share with 28% in comparison with the brands in the same industry. Even, Highlands
also has the market share beyond Starbucks Vietnam and Trung Nguyen Coffee which
are well-known brand in Vietnam.
Highlands Coffee has been expanding its market share and proud to be Vietnam's
brand has more than 100 cafes. This shows that Highlands Coffee is gradually
dominating the beverage market.
4.5.2 Business image
Highlands Coffee is confident of a future sustainable growth and constantly striving to
bring to customers a sense of a dynamic, modern life combined with unique cultural
traditions.
The objects of the Highlands are clearly represented by the "coffee for businessman"
coffee "for office worker". This group of customers is the direction of HL since the
new development and it is a strategic direction clearly for their brand.
848
Clearly targeting to the group of business customers and high income people,
Highlands coffee choose a name in English instead of Vietnamese as Trung Nguyen,
Phuc Long. That brings class, professional, courteous as well as modern, young and
trendy.
One of the highlights of the Highlands is the logo of the brand. The logo reflects the
image of the mountains, the earth and the flow of water in black, red, brown and white
which is also the main color in the space of this brand. This combination brings a sense
of harmony and warmth as well as modern. The image also shows the origin and
quality of the coffee beans of the basalt soil.
The location of the Highlands is in the big cities, central commercial centers. It is not
difficult to find a Highlands shops in t the center of Hanoi. The space of the Highlands
combines the indoor space and the outdoor space with the two main colors of black
and red to reflect the brand's own characteristics. These color that gives the feeling of
warmth, pure Asian style combined with the features of Western Europe in the
armchair, ... Highlands coffee space is designed to convey cultural communication
values Vietnam: it is a community of cohesion and friendliness.
Outdoor space with the two main colors of black and red to reflect the brand's own
characteristics. These color that gives the feeling of warmth, pure Asian style
combined with the features of Western Europe in the armchair, ... Highlands coffee
space is designed to convey cultural communication values Vietnam: it is a community
of cohesion and friendliness.
Based on the real results of customer surveys, staffing and management, we can
extract valuable insights for improving performance at Highlands coffee, as well as
addressing the Difficulties exist in Highlands coffee.
849
CHAPTER 5
RECOMMENDATIONS
5.1 Introduction
In this chapter, we are going to provide solutions to problems that found in the above
chapters.
5.2 Brief summary of findings
The research gets to a number of findings.
1. Finding from customers: Uni format in theme space, rush-hour service quality,,
overloaded parking area in rush hours .These are issues that to be found through
our surveys about assessment of customers and the analysis about weaknesses and
threats of Highlands coffee. All of them impact to satisfaction of customers.
2. Finding from managers and staffs: There are employee rotations frequently, staff
changes. Employees are always important factors that contribute to the success of
the Highlands because they are persons who interact directly with customers.
Therefore, factors affect satisfaction of employees with Highlands that will reduce
productivity in working.
3. Others: Logo, fluctuation in raw material price. There are issues impact directly for
revenue.
5.3 Maps of solutions-problems
850
Figure 5-1 Maps of solution problems
5.4 Recommendations to control risks and enhance business performance

In order to enhance the Highlands coffee performance, we would like to pay more
attention to some significant ares, namely humnan resource department, operation
area, sale department. Each of the areas requires its own solving problems
corresponding to its challenge. Now, we will list some factors effecting to the named
areas, then comment the benefits and risk that those factors have. After that, we would
like to suggest some solution to control risk.
5.4.1 Establish risk management procedures
Highlands has not had risk management procedures. Establishing risk management
procedures would help to control risk in a systematic way, resulting in better results.
851
5.4.2 Human resources risk

As we investigated, most of employees at Highlands coffee work are students working
as a part- time jobs. Thus, Highlands coffee has a source of energetic working
environment. However, this human source though boosts the quality of service but the
difficulty that students tend to change their jobs frequently also takes the Highlands
coffee a lot of time to retrain new employees.
The solution to this risk is that the Highlands coffee should renew their recruitment
policy that constrants the number of part-time employees. To do that, we suppose to
weigh 50% for part- time job and 50% for full- time job in all appliers. with this
allocation the retained employees are full enough to avoid the risk of retraining the
newer to fit both the Highlands coffee and customers’ requirement.
852
Factors Benefit Risk Control risk

Part-time Shorter working Higher Keep part-time staff at 50%
time lead to trainining time balance between quality and
higher quality required sustain.
5.4.3 Operations risk

According to our surveys, Highlands coffee have many beautiful locations that usually
located at center of city or famous shopping malls, which are all crowded areas.
operations risk in Highlands coffee is overloaded parking area in rush hours which
increasing revenue because do not lose customers during rush hours. Thus, Highlands
coffee have some suggestion to problem solving which link with near location to rent
parking areas or taking advantage of underground parking in buildings, commercial
center is the immediate solution to solve the shortage of parking space in the city
center. In addition, Highlands coffee can give free parking ticket or voucher drink if
customers need to go far for parking. In recently, there are a few first search
application units and payment car service charges automatically via iParking mobile
phone at the parking lot on the two streets Tran Hung Dao and Ly Thuong Kiet. The
application of this technology has proven to be advantageous for owners of means to
find parking places, collect fee public and transparent fees supported by the people,
especially the young ones (Mai, 2017).
Besides, food and beverage business always contains a lot of potential risks in that the
risk of fire is a big threat to any restaurants. Because the cooking equipment and
grease which are used mostly at restaurant business are the direct cause of fire and
explosion, it is likely to cause great danger to the lives of both customers and
employees who come there to work as well as use service. In addition, the risk of fire
and explosion do harm to the property of that coffee chain and Highlands have to
spend a lot of money for repairing. The suggestion to solve this problem is that
Highlands have to ensure that the coffee shops are fully equipped with fire protection
equipment to extinguish the fire quickly before spreading and regularly check cooking
devices. Moreover, buying insurance against fire is the best method in reducing the
853
cost of damaged property. By purchasing insurance against fire, when the loss occurs,
Highlands will be compensated by the insurer for the costs of damage and recovery.
Moreover, the food safety and hygiene is an important criterion that company need to
care. If have any customer meets food poisoning or problems related to food hygiene,
it will affect a lot of reputation and image of the company. The company minimizes the
risk of this problem by identifying the areas with the highest unsafe risk. Then,
company decides on the regular inspection densities of the control department for the
operations of the personnel in those areas that have been designated as regulated. This
monitoring program will provide immediate feedback on performance status in areas
of high risk, which will help to ensure better hygiene and safety. Besides, company
continues to train their employees about this issue. The food safety culture grows that
to be learned in all the management as well as the staff to lead to the food safety
standard will become a habit and have great significance for business activities.
Overloaded Increase Link with near location to rent
parking area in revenue parking areas.
rush hours because do not
Present free parking ticket or
lose customers
voucher drink if customers need
during rush
to go far for parking.
hours.
Fire Endanger both Fully equipped fire protection

customers and equipment.
employees live.
Purchase insurance against fire.
Damage to the
property of the
restaurant.
Pay costs to
repair.
854
food-sicked Avoidance
Loss prevention
Buy insurance for customers to

protect against risk
Food safety and Affect a lot of Set up monitoring program that

hygiene reputation and provides immediate feedback on
image of the performance status in areas of
company when high risk.
customers meet.
Training their employees about
this issue.
5.4.4 Sales-related issues

In this part, we show some factors affecting to the sale revenue at Highlands coffee.
Most of these factor comes from the way of Highlands coffee decoration.
Firstly, in fact, it is really usefull for Highlands coffee to apply uniformat as it tries to
raise customer’ awareness in the long term. However, with the fixed decoration,
customers may get bored. Of course, when customers become upset with the theme,
they will not want to go Highlands coffee again. As a result, Highlands coffee meets
risk of decreasing the sale revenue which directly or indirectly influences of the
organizational operation. Therefore, we think that it should be more flexible in the way
Highlands coffee to refesh Highlands coffee stores three time per year. Despite
changed decoration, Highlands coffee had to embrace its identified decoration that is
the intergrate of traditional and modern style. Some changes should be Highlands such
as change the type of ornamental plants, change the arrangement ways of tables and
chairs, pictures.
Secondly, the slogan of Highlands coffee does not convey all the value of Highlands
coffee wanting to bring to customers. In order to attract new customers, who go to the
Highlands coffee first time, Highlands coffee should add some keyword to its slogan
855
to let people know Highlands coffee not only provides coffee but also many stuffs like
cake, bread, etc. By doing that, hopefully Highlands coffee could retain the vistors and
catch newers.

Uni format Raise brand Make boring for Change the ways
awareness. customers in long decorations every 2-
term. 3 months but still
keep identity of
Highlands such as
change the type of
ornamental plants,
change the
arrangement ways
of tables and chairs,
pictures.
Slogan Familiar with Do not cover fully Additional key

customers. product lines. words into slogan to
describe
completeness and
accuracy of product
lines.
5.4.5 Establish the Enterprise Risk Management to control risks

Enterprise Risk Management (ERM) is a comprehensive risk management program
that addresses all risks faced by the corporation-pure risks, speculative financial risks,
strategic risks, operational risks, and other risks.
● Strategic risk refers to uncertainty regarding an organization’s goals and
objectives
856
● Operational risks develop out of business operations, such as manufacturing

● As long as risks are not positively correlated, the combination of these risks in a
single program reduces overall risk
This ERM would help Highlands to get
● Improved risk assessment
● Increased risk awareness
● An integrated response to the full range of risks
● Alignment of the organization’s risk tolerance with its strategies and practices
● Fewer operational surprises and losses
● Increased competitive advantage
● Reduced earnings volatility
● Better compliance with corporate governance guidelines
However, Highlands would encounter a number of barriers in doing so, including:
● Rigid organizational culture
● Lack of committed leadership
● Turf battles between departments over responsibilities
● Lack of a formal process
● Lack of information sharing and transparency
● Technological deficiencies
● Lack of commitment to the design and implementation of the program
This ERM Process has certain advantage versus the Traditional Risk Management
Process, such as (i) Risk identification is broader under an ERM program because
additional risks are considered, and (ii) Risk analysis may involve additional analysis
tools, e.g., catastrophe modeling, (iii) Given the wider range of risks considered, a
wider range of treatment measures can be controlled, (iv) Implementation requires a
commitment to the program and a fundamental change in how the employees view
risk, and (v) The process is continuous and dynamic.
5.4.6 Consider additional Risk Management Tools to enhance risk management
competency
Other risk management tools may include:
● A risk management information system (RMIS) is a computerized database that
permits the risk manager to store, update, and analyze risk management data
● A risk management intranet is a web site with search capabilities designed for a
limited, internal audience
857
● Predictive analytics is the analysis of data to generate information that will help
make more informed decisions
o Insurers’ use of credit scoring is an example of predictive analytics
● A risk map is a grid detailing the potential frequency and severity of risks faced
by the organization
o Each risk must be analyzed before placing it on the map:
● Value at risk (VAR) analysis involves calculating the worst probable loss likely
to occur in a given time period under regular market conditions at some level of
confidence
o The VAR is determined using historical data or running a computer
simulation
o Often applied to a portfolio of assets
o Can be used to evaluate the solvency of insurers
● Catastrophe modeling is a computer-assisted method of estimating losses that
could occur as a result of a catastrophic event
o Model inputs include seismic data, historical losses, and values exposed
to losses (e.g., building characteristics)
o Models are used by insurers, brokers, and large companies with exposure
to catastrophic loss
5.4.7 Establish a unit in the Sales Department specialized at monitoring and
controlling risk
This unit would centralize all efforts to monitor and control the risk. The risk manager
can predict losses using several different techniques, such as (I) Probability analysis,
(ii) Regression analysis, and (iii) Forecasting based on loss distribution.
Probability is a good risk indicator. In Probability analysis, the risk manager can assign
probabilities to individual and joint events. The probability of an event is equal to the
number of events likely to occur (X) divided by the number of exposure units (N).
Reading this indicator would help to understand how likely the risk would occur. Of
course, there is no guarantee that losses will follow past loss trends. However, keeping
knowledge of on risk in the past would help to predict the likeliness.
858
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Proceedings the 10th students scientific research conference

Improving risk management at highlands to

Group sciences: Lê Ngọc Oanh

CHAPTER 1 INTRODUCTION OF RESEARCH

1.5 Methodologies and Data

● In-depth interviews with customers to identify customer demands and customer

Figure 2-1: Organizational structure of the Highlands corporation

Figure 2-2: Structure of a local Highlands division

2.4 Performance highlights

Figure 2-3: Analytical framework (Kaplan Group, 2015 , p. 22)

o Ha Noi: 41 locations include Hoan Kien district, Hai Ba Trung district,

customer segmentation such as nostalgia style store, pets coffee store,

furniture to decorate. By combination of traditional and old elements are

Figure 2-4: Product lines of Highland

2.5.3 Internal resources, capabilities, and competences

Figure 2-5: Porter’s value chain (Kaplan Group, 2015 , p. 58)

2.5.4 Stakeholders, ethics and culture

Managers Earning Receiving Maximize Rotation frequently

Table 2-1: Stakeholders analysis

Figure 2-6 The cultural web (Kaplan Group, 2015 , p. 100)

2.5.5 Strategic analysis

Figure 2-7: The place the shops want to hold

2.5.6 Quality issues

Figure 2-8 Career development

2.5.8 Information technology

suppliers in a negotiation in order to achieve a deal which is favourable to themselves.(

Bac xiu VND 30,000 Esspresso VND 54,000

Freeze Matcha VND 40,000 Freeze Matcha VND 65,000

● Fluctuate of raw material price

Figure 2-9: SWOT analysis

2.7 Chapter conclusions

Levels within a corporate organization (Merna, Management and Corporate Risk,

Figure 3-1: Risk matrix

Figure 3-3: A risk management system

Figure 3-4: Typical risk parameters (Adapted from Allen 1995)

Table 4-1: Profile of responders

Level Customer satisfaction on Comparative

Regarding product diversification, almost

Regarding the quality of the theme of

Figure 4-2: Customers’ assessment on

Figure 4-3 Customers’ assessment on product quality

Regarding the rush-hour service quality,

Figure 4-4 Customers’ assessment on rush-hour service quality

The bar chart represents the promotional

Figure 4-5 Customers’ assessment on promotional activities

Figure 4-6: Customers’ assessment on comparative advantage

Figure 4-7: The compensation policy valuation

Figure 4-8: The working environment

The bar chart describes the

The table shows the number of

4.3.3 Manager satisfaction

Table 4-6 The rush hours of Highlands coffee

Row Labels Count %

Row Labels Count %

Table 4-9 Time to take up the management position

Row Labels Count %

Row Labels Count %

Table 4-10Select rate of Training staff retain.

Figure 4-10 Evaluation of the training program for the management

Figure 4-11: Evaluation of remunerations

Figure 4-13:Evaluates the level of adaptation to highlands programs

● Flexible working environment.

shows that managers of Highlands are professionally trained to solve problems in a