CASE STUDY
Quality Management at the Highlands Coffee Chain in Vietnam
Introduction
Highlands Coffee was founded in 1999 by David Thai, a Vietnamese American with a profound
passion for coffee and a desire to create a high-quality coffee brand that embodies the rich cultural
identity of Vietnam. Beginning as a small coffee shop, Highlands Coffee rapidly expanded and
emerged as one of the most renowned coffee chains in Vietnam. Today, with hundreds of stores
across the country, Highlands Coffee not only offers coffee but also provides a distinctive cultural
experience through its ambiance and service style. In 2011, Highlands Coffee was acquired by
Jollibee, with the latter investing approximately $25 million to secure a 49% stake in the chain.
This acquisition enabled Jollibee to enhance its corporate value and expand into the coffee market,
an industry recognized for its exceptional quality in Vietnam.
Development and expansion
• Upon its inception, Highlands Coffee set forth the objective of creating a luxurious and
modern coffee experience that blends Western style with the traditional beauty of Vietnam.
• Highlands Coffee concentrated on brand development by emphasizing product quality,
meticulously designed shop spaces, and professional customer service. This strategic
approach enabled Highlands Coffee to swiftly expand, becoming a familiar brand to a
broad spectrum of Vietnamese consumers.
• To date, Highlands Coffee has established its presence in nearly all major and minor
provinces across Vietnam, from Hanoi and Da Nang to Ho Chi Minh City and Can Tho.
Moreover, Highlands Coffee has extended its reach internationally with stores in the
Philippines.
Vietnamese Cultural Experience
• Ambiance: Highlands Coffee stores are designed to blend modernity with tradition,
creating a warm and comfortable atmosphere. The interiors often feature wooden furniture,
adorned with paintings and cultural artifacts from Vietnam, cultivating a sense of
familiarity and belonging.
• Service style: The staff at Highlands Coffee are professionally trained, consistently
welcoming and attentive to customers. The service style at Highlands Coffee goes beyond
merely providing beverages; it is about crafting a pleasant and friendly experience for the
clientele.
OBJECTIVE OF THE CASE STUDY
The objective of this case study is to analyze the concept of quality within the context of the
services provided by Highlands Coffee. This real-world scenario aims to facilitate a deeper
understanding of how the distinctive characteristics of the service meet the needs of customers and
stakeholders, while also proposing enhancements to elevate the quality of service.
KEY CONCEPT
Quality is defined as the degree to which a set of distinguishing characteristics of an entity fulfill
the needs of customers and stakeholders. For Highlands Coffee, quality service encompasses
elements such as product quality, service quality, ambiance, and the overall customer experience.
DETAILED ANALYSIS
Products
A coffee shop offers a variety of products and services, both tangible and intangible, aimed at
satisfying the diverse needs of customers. These products include:
Tangible products
1. Beverages:
o Coffee: A range of brewed coffee options such as espresso, cappuccino, latte,
americano, black coffee, and milk coffee.
o Tea: Green tea, black tea, fruit-infused teas, and various herbal teas.
o Smoothies and juices: Fruit smoothies and fresh juices.
2. Food:
o Pastries: Muffins, croissants, cheesecakes.
o Savory items: Sandwiches, mini pizzas, bao buns.
o Snacks: Potato chips, pistachios, cookies.
3. Souvenirs:
o Mugs and glassware: Coffee mugs featuring the shop’s logo, glass tumblers,
ceramic cups.
o Gifts: Gift boxes, packaged products such as whole coffee beans, and brewing kits.
Intangible products
1. Customer service:
o Service attitude: Friendly, enthusiastic, and attentive staff.
o Consultation: Assisting customers with beverage selection, answering product-
related inquiries.
o Problem resolution: Efficient and prompt handling of customer complaints and
requests.
2. Spatial experience:
o Relaxing environment: A comfortable, quiet setting suitable for work or social
gatherings.
o Decor and design: Aesthetically pleasing decor, with lighting and music that create
a soothing ambiance.
o Amenities: Free Wi-Fi, power outlets for customers to use while working.
3. Promotional programs and customer loyalty:
o Special offers: Seasonal discounts, product combos, promotions during holidays.
o Membership programs: Points accumulation, gift rewards, and exclusive offers for
loyal customers.
Analysis of Highlands coffee's products
Beverages:
▪ Vietnamese drip coffee: Crafted from high-quality coffee beans, Highlands Coffee's
Vietnamese drip coffee embodies the traditional flavors of Vietnam.
▪ Espresso and Cappuccino: Western-style coffees such as espresso and cappuccino are
meticulously prepared to cater to the diverse preferences of customers.
▪ Lotus tea: A signature tea of Highlands Coffee, this beverage is a delicate blend of green
tea and natural lotus essence, resulting in a refreshing and flavorful drink.
Highlands Coffee, one of the most renowned coffee chains in Vietnam, is distinguished by its three
signature drinks: Cà phê sữa đá, Trà sen vàng, and Trà xanh đá xay. These beverages not only
represent the brand but also reflect a harmonious fusion of tradition and modernity, offering
customers a rich and diverse experience. Below is a detailed analysis of each beverage and how
they contribute to the overall service quality of Highlands Coffee.
Cà phê sữa đá:
Cà phê sữa đá is an immensely popular drink in Vietnam, especially in coffee shops like Highlands
Coffee. This beverage consists of robust black coffee, condensed milk, and ice. The coffee is
brewed using the drip method, creating a rich and smooth flavor. Highlands Coffee sources high-
quality Robusta and Arabica beans from renowned coffee-growing regions. The beans are
meticulously roasted to ensure a bold flavor. The coffee is brewed using the traditional drip
method, which optimally extracts the essence of the beans. Condensed milk is added in precise
proportions, ensuring a sweet and balanced taste. This drink not only offers a delicious flavor but
also evokes the traditional coffee culture of Vietnam, creating a familiar and comforting experience
for customers. Highlands Coffee ensures the quality of Cà phê sữa đá by maintaining stringent
control over the selection of ingredients and the brewing process. The consistency in flavor and
quality of the beverage stands as a testament to the brand's commitment to excellence. Highlands
Coffee regularly updates its recipes and brewing methods to maintain high standards and meet
customer expectations.
Trà sen vàng:
Trà sen vàng is a refreshing tea that combines green tea with lotus essence. This tea is distinguished
by its light and elegant aroma and its beautiful golden color. Highlands Coffee uses high-quality
green tea, combined with lotus essence to create a unique flavor. The green tea is sourced from
renowned tea-growing regions, ensuring freshness and quality. Trà sen vàng is prepared by
infusing green tea with lotus essence, creating a light and refreshing flavor. The brewing process
is carefully executed to ensure a perfect blend of the ingredients. This tea not only offers relaxation
but also presents a sophisticated combination of lotus and green tea, providing customers with a
delightful and novel experience. Highlands Coffee pays meticulous attention to every detail in
preparing Trà sen vàng, from selecting the ingredients to the brewing process, ensuring that
customers enjoy a satisfying and relaxing experience. Customers can taste the freshness and
quality of the tea through its flavor and color, reflecting Highlands Coffee's commitment to product
excellence.
Trà xanh đá xay:
Trà xanh đá xay is a popular refreshing drink that combines green tea with crushed ice and
additional ingredients such as milk or syrup, creating a cold and flavorful beverage. Highlands
Coffee uses high-quality green tea, blended with finely crushed ice and carefully selected
additional ingredients. The green tea is processed to retain its freshness and original flavor. This
tea is blended with ice and other ingredients to achieve a smooth texture and consistent flavor. The
preparation process ensures that each serving of Trà xanh đá xay meets the highest standards of
quality and flavor. Trà xanh đá xay offers customers a refreshing and invigorating experience,
especially during the sweltering summer days. This drink also provides an exciting option for green
tea enthusiasts who wish to experiment with a new way of enjoying their favorite tea. Highlands
Coffee manages the quality of Trà xanh đá xay from the selection of raw materials (green tea and
crushed ice) to the preparation and serving processes. This ensures that the beverage consistently
meets the highest standards. This tea also reflects Highlands Coffee's commitment to providing
quality service, from the preparation of the drink to customer service.
Product quality
The characteristics of product quality include flavor, freshness, consistency, and presentation.
1. Flavor and freshness:
o Highlands Coffee uses high-quality coffee beans sourced from local farms,
ensuring freshness and a robust flavor.
o Highlands Coffee's Vietnamese drip coffee is consistently praised by customers for
its rich flavor and smooth finish.
2. Consistency:
o Consistency in product quality is ensured by adhering to standard recipes and strict
brewing processes.
o Whether you visit a store in Hanoi or Ho Chi Minh City, the flavor of the
Vietnamese drip coffee remains unchanged.
3. Presentation:
o Product presentation is also a key aspect of quality. Highlands Coffee pays attention
to details such as the froth on cappuccinos or the decoration on pastries.
o The "Iced Caramel Macchiato" is not only delicious but also visually appealing
with its layered presentation.
Food:
• Sandwiches: A variety of freshly prepared sandwiches with meats, cheeses, and vegetables,
making them an ideal choice for a light meal.
• Pastries: Cheesecakes, tiramisu, and other delectable pastries are presented in an
aesthetically pleasing and appetizing manner.
Souvenirs:
• Mugs and glassware: Highlands Coffee offers a selection of mugs and glassware adorned
with their logo, which are popular among customers who wish to take home a memento or
gift.
• Whole coffee beans: Packaged whole coffee beans allow customers to brew their own
coffee at home.
Customer service:
• Service attitude: The staff at Highlands Coffee are trained to be consistently friendly and
attentive, ensuring that customers feel comfortable and satisfied.
• Consultation: Employees are always ready to provide recommendations on beverages and
food items that align with individual preferences.
• Problem resolution: In the event of a complaint, Highlands Coffee addresses it promptly
and effectively, often offering product exchanges or small complimentary gifts to ensure
customer satisfaction.
Spatial experience:
• Relaxing environment: Highlands Coffee designs its spaces to be comfortable and cozy,
with various seating areas suited for working, studying, or socializing with friends.
• Decor and design: The interior decor blends modern aesthetics with traditional elements,
such as artwork depicting Vietnamese culture, creating a sense of familiarity and
connection.
• Amenities: Free Wi-Fi and power outlets are provided for customers, making it convenient
for those who need a space to work or study.
Promotional programs and customer loyalty:
• Special offers: Highlands Coffee regularly offers discounts, seasonal promotions, and
attractive product combos.
Customer experience:
The overall customer experience at Highlands Coffee is shaped by the integration of product
quality, service excellence, and spatial ambiance.
• Community engagement: Highlands Coffee fosters community connections through
activities such as sponsoring local events and engaging in environmental protection efforts.
They have partnered with a local organization to plant trees in surrounding areas.
• Customer feedback: Highlands Coffee actively collects and utilizes customer feedback to
enhance their services. They conduct regular surveys and encourage customers to share their
experiences through social media platforms.
EVALUATION OF SERVICE QUALITY AT HIGHLANDS COFFEE
Service quality assessment
Highlands Coffee has established a strong reputation among Vietnamese consumers, largely due
to its high-quality products and services. The following is an evaluation of the service quality
provided by Highlands Coffee.
Areas of excellence
1. Product quality:
o Highlands Coffee sources high-quality coffee beans from renowned coffee-growing
regions in Vietnam, such as Lâm Đồng and Đắk Lắk.
o The Vietnamese drip coffee at Highlands Coffee boasts a robust flavor, satisfying
the preferences of customers who favor traditional coffee.
o Beverages and food items are freshly prepared and appealing, catering to the
diverse tastes of the customer base.
2. Ambiance and experience:
o The coffee shop environment is comfortable and cozy, blending modern and
traditional styles to create a sense of warmth and familiarity.
o The design and decor of the shop foster a relaxing atmosphere, making it
convenient for customers to work, study, or meet with friends.
3. Service quality:
o The staff are friendly, enthusiastic, and attentive, trained to meet customer needs
quickly and efficiently.
o The ability to resolve issues and handle complaints is commendable, ensuring that
customers consistently leave satisfied.
Areas for improvement compared to other coffee chains
1. Product variety:
o Compared to Starbucks and The Coffee House, Highlands Coffee may lack
diversity in its international beverage menu, particularly in specialty coffees and
innovative drinks.
2. Loyalty program:
o Highlands Coffee's loyalty program might not be as extensive or appealing as those
offered by Starbucks, where customers can accumulate points and enjoy a broader
range of special perks.
3. International presence:
o Highlands Coffee primarily focuses on the domestic Vietnamese market, whereas
Starbucks and Cộng are expanding into international and regional markets, thereby
building a stronger global brand recognition.
PROPOSED SOLUTIONS
Solution 1: Expanding product diversity
• Enhance product variety by incorporating specialty coffees, innovative beverages, and a
wider array of food options. Place customers at the heart of all product decisions, thereby
developing new drinks and food items that meet their needs and desires.
• Collaborate with expert baristas to craft unique and enticing beverage recipes. Employ the
continuous improvement methodology (Kaizen) to experiment with and refine new drinks,
ensuring consistent quality and appeal.
Solution 2: Improving the loyalty program
• Develop a more comprehensive loyalty program with multiple tiers and exclusive benefits.
Strengthen customer engagement and interaction through the loyalty program, thereby
increasing long-term loyalty and revenue.
• Integrate a mobile application to allow customers to easily track their accumulated points
and redeem offers.
• Utilize customer data to personalize offers and experiences, thereby enhancing satisfaction
and customer retention.
Solution 3: Expanding market reach and brand recognition
• Utilize a SWOT analysis to evaluate strengths, weaknesses, opportunities, and threats,
thereby identifying potential target markets.
• Develop an international expansion strategy based on market research and partnerships
with local entities to mitigate risks and enhance effectiveness.
• Expand into international markets through franchising strategies and international
collaborations.
• Strengthen advertising and marketing campaigns to enhance brand recognition both
domestically and internationally.
Solution 4: Enhancing customer service
• Measure and assess service quality based on five factors: reliability, responsiveness,
assurance, empathy, and tangibles.
• Increase training and skill development for staff, particularly in communication and
problem-solving skills.
• Leverage technology to enhance the customer experience, such as online ordering
applications and automated customer feedback systems.
• Use evaluation results to improve aspects of the service, ensuring that every facet meets or
exceeds customer expectations.
CONCLUSION
Highlands Coffee has achieved significant success in delivering quality products and services,
fostering customer satisfaction and loyalty. However, to compete more effectively with other
coffee chains such as Starbucks, The Coffee House, Cộng and Katinat, Highlands Coffee needs to
focus on expanding product diversity, improving the loyalty program, extending its international
market presence, and enhancing customer service quality. By applying appropriate quality
management theories and strategic approaches, Highlands Coffee can elevate its position and
achieve sustainable growth in the highly competitive coffee market.
