Full name: Phạm Gia Linh

Code: 11213380
Class: BBAEi4A
Turnitin: 0%

Topic: What are the key values or benefits of internal analysis and according
to you how to apply this analysis to a business organization?

Beside external analysis, a successful business organization needs to understand

the role of internal analysis and how to apply this analysis. In this essay, I will show
you the important values of internal analysis in a business and the way that it
expresses itself in Trung Nguyên Coffee.
First of all, what is internal analysis? There are many definitions of "internal
analytics". After studying and self-studying, I think: Internal analysis is the process of
identifying and evaluating factors related to the company without being affected by
the external environment; outline the opportunities and risks of the business. From
there, guide business development and make business decisions.
Why is internal analytics important?
Internal analytics helps businesses understand and focus on their core operations.
In addition, it also plays an important role in making business decisions. Specifically,
internal analysis has the following influence:
Point out the strengths and weaknesses of the business
Internal analysis provides information about the company's internal resources,
determining what are the strengths and weaknesses. From there, leaders can promote
strengths and find solutions to overcome weaknesses. For example, businesses identify
strengths as abundant information and technology resources; The weakness is
personnel training and ineffective use of resources. They will find ways to change
internal training, improve personnel quality to use resources more rationally.

Find opportunities and risks

Internal analysis is also used to identify commercial prospects. Opportunities not
only come from objective external factors, but are also found from resources within
the company. For example, when wood and industrial products businesses realize that
surplus raw materials can be remanufactured into decorative items, they continue to
develop another product line.
Internal analysis helps businesses limit risks. If businesses understand their own
weaknesses, they will have solutions to overcome and deal with possible risks.

Evaluate performance
Based on analyzing business data and information, they can evaluate the
effectiveness of their work. Internal analysis helps businesses keep abreast of their
operations, business results... From there, they promptly control and adjust the
situation.

Make decisions
Internal analysis is an indispensable step before making important decisions for
the business.
In business results, when the set goals are not achieved, the business analyzes
internally to find the internal cause. For example, if the problem lies in the product,
businesses consider solutions to change and reform the product.
Or another example in internal management, when realizing loose and ineffective
management methods, businesses will make adjustments in human resources work.

Internal analysis of Trung Nguyen enterprise has the following advantages,

limitations, opportunities and challenges:
Strength:
- Trung Nguyen is a long-standing brand with great influence on the Vietnamese
market.
- Own a large coffee supply, invest and manage yourself.
- Trung Nguyen has a strong distribution network thanks to the franchise business
model.
Weakness:
- Trung Nguyen is susceptible to imitations or trademark abuse because copyright
laws and trademark protection in Vietnam were not really strong in the past.
- Also because of franchise business, when a store has bad feedback, or errors in
products, management,... it can easily affect the Trung Nguyen coffee brand and other
stores in the same system. like the domino effect.
Opportunity:
- The world increasingly favors Vietnamese coffee and instant coffee.
- Movement "Vietnamese people use Vietnamese goods".
Challenge:
- Compete with big brands.
- Compete with substitute products. Besides coffee, many other drinks have
emerged following trends and are well received. People who follow the eat-clean diet
tend to choose healthy drinks such as juices, smoothies, nut milk, etc. While young
people tend to choose milk tea and soft drinks. instead of coffee.

From SWOT analysis, Trung Nguyen has recognized its advantages and
competitive advantages. They continue to continue their strategy of expanding the
market and store system by franchising from only 50 million. They also research the
product more closely to offer many coffee lines suitable for international markets:
Korea, America, China, ...
 Image: Trung Nguyen Coffee in US.

In addition, Trung Nguyen also realized the shortcomings and challenges for
businesses, so they made adjustments in production and franchising policies.
Previously, like many other coffee brands, Trung Nguyen sourced from farms
and traders in the Central Highlands. However, small suppliers cannot ensure product
consistency, both in quantity and quality, for such a large corporation. Combined with
the general impact of the economy, many suppliers and farms cannot operate, forced
to go bankrupt or change models. Since 2009, Trung Nguyen has switched to self-
investment and supply management. The Group invests capital in coffee farmers,
provides training in growing, harvesting, and processing coffee skills, and directly
manages the quantity and quality of product inputs. Thanks to this, the company
ensures products reach consumers, optimizes input costs, and builds a more
sustainable supply.

Image: The project “Coffee City” and Trung Nguyen’ farm in DakLak.

Regarding franchising policy, although Trung Nguyen has a cheap franchising

model, it tightens operating regulations. Franchise stores must follow strict regulations
on concepts, recipes, management methods, etc. to ensure quality and consistency
throughout the system.

Thus, from internal analysis, Trung Nguyen draws an assessment of the aspects
of the business. From there, they make more reasonable decisions and policies in the
stages of management, operation, and production. That is the reason why this business
develops sustainably and continuously grows.