INTRODUCTION TO MANAGEMENT

MGT103
GROUP ASSIGNMENT

TOPIC: CORPORATE-LEVEL STRATEGY

NUMBER NINE
No. NAME STUDENT CODE
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 TABLE OF CONTENTS

TABLE OF CONTENTS....................................................................................................................................................
I. ABSTRACT......................................................................................................................................................................
II. SINGLE - PRODUCT STRATEGY.............................................................................................................................
1. Strength......................................................................................................................................................................
2. Weakness....................................................................................................................................................................
3. Opportunity................................................................................................................................................................
4. Challenges..................................................................................................................................................................
III. RELATED DIVERSIFICATION...............................................................................................................................
1. Advantages of favorable regional conditions.............................................................................................................
2. Tripod strategy (Kiềng 3 chân)..................................................................................................................................
a) COFFEE (Vietnamese Phin Coffee, Espresso Coffee)........................................................................................
b) TEA (Lotus tea, fruit tea & green tea).................................................................................................................
c) FREEZE (Ice blended).........................................................................................................................................
IV. UNRELATED DIVERSIFICATION..........................................................................................................................
1. Food............................................................................................................................................................................
2. Products serve customers far away............................................................................................................................
V. THE SUCCESS OF HIGHLANDS COFFEE.............................................................................................................
1. Factors that create success..........................................................................................................................................
a) Good management and administration ability.....................................................................................................
b) Finance.................................................................................................................................................................
c) Location................................................................................................................................................................
d) Customers............................................................................................................................................................
2. Success of Highlands Coffee......................................................................................................................................
VI. CONCLUSION.............................................................................................................................................................
VII. REFERENCES............................................................................................................................................................

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I. ABSTRACT

Coffee has been one of the most significant contributors to Vietnam's agriculture industry over

the past three decades. Although many domestic and foreign brands have joined the Vietnamese

coffee industry in recent years, it can still be affirmed that Highlands Coffee is still the most

known brand with a nearly 20-year history associated with coffee tradition. Strategic

management is one of the prerequisites for company development. This investigation into the

influencing characteristics of Highlands coffee provides businesses with a number of strategies.

This research focuses on exploring and evaluating the corporate-level strategy of Highlands

Coffee, a leading coffee producer. To achieve this goal, the study utilized a synthesis of

information from various sources, including academic literature, interviews with key company

officials, and detailed analysis of financial reports.

The results of the research reveal that Highlands Coffee has chosen for corporate-level strategy,

concentrating on blending traditional Vietnamese coffee culture with international standards. The

company is diversifying its product portfolio to meet the changing preferences of customers.

II. SINGLE - PRODUCT STRATEGY

1. Strength

a) Having appeared for a long time, it has a pretty good position in the hearts of customers:

Highland is a brand that has been around for a long time and has existed for more than two

decades in Vietnam and around the world. Since the first days of launch, management stages

have been strictly controlled to help build a professional image in the eyes of customers.

(Highlands Coffee, 2018)

b) Prime location:

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 Highland was wise in choosing the store location. To suit target customers who are businessmen,

stores are always located at crossroads, intersections or gathering spots at the foot of office

buildings in big cities. This helps the store have uniformity in its brand, always targeting

businessmen and knowledgeable people with money. (Highlands Coffee, 2024)

c) Understand customer tastes:

What gives Highland an advantage over foreign stores in Vietnam is its customers. Vietnamese

customers especially like to drink strong-flavored coffee, while many European and American

countries like it thinner. In addition, the coffee brewing method and type are also considered by

the store to suit the coffee drinking culture of Vietnamese people.

2. Weakness

a) High prices are not suitable for all customers:

Vietnam is one of the leading countries in coffee exports. Therefore, the price of domestic coffee,

especially in shops, is not too high, about 10,000 to 20,000 VND. While the average price on

Highland's menu is 40,000 VND and the lowest price is about 30,000 VND.

High prices are a weakness of Highland Coffee that greatly affects the business. Although the

store has had a campaign to "popularize" products to expand the market, it still cannot reach

ordinary customers. In addition, the customer segments of Highlands Coffee's competitors and

this brand are quite similar. Therefore, the level of market competition is even more fierce.

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 b) Highland Coffee still serves plastic items and nylon bags to customers:

This was one of the reasons that created some trouble for Highland. Highland has repeatedly

invested and advertised its environmental protection campaigns on social networks, but they still

serve plastic products and nylon bags. Considering the total number of 300 stores nationwide,

they have to serve millions of customers every day, so the amount of plastic waste released into

the environment is quite large. ([Link], 2021)

Besides, nowadays, serving plastic items at large and long-standing stores is considered by many

people to be unprofessional. Customers are looking to use paper or more environmentally

friendly products. ([Link], 2021)

3. Opportunity

The market potential in Vietnam is huge, according to estimates, the Vietnamese coffee market is

worth about 1 billion USD. At the same time, with the development of society, Vietnamese

people also have the pleasure of sitting in cafes to enjoy. Therefore, if you know how to grasp it,

this is a good opportunity to help your brand grow.

Culture or customs are values that are deeply ingrained in the subconscious of local people.

Therefore, this is also a decisive factor in the survival of the business. Understanding the local

culture will help businesses consider product or communication strategies that suit the tastes and

customs of the locality.

As a domestic brand, Highlands has the advantage of understanding local culture better than

foreign brands. Thanks to that, they can offer products suitable for their market.

4. Challenges

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 Because the coffee market in Vietnam is increasingly developing, Highlands has also been

subject to high competition from not only domestic competitors but also other brands. (Minh

Hằng, 2023)

III. RELATED DIVERSIFICATION

1. Advantages of favorable regional conditions

- Distinct Flavor Profile: Vietnamese coffee, particularly from the Central Highlands, is known

for its distinctive flavor profile. The robusta beans, which make up the majority of the region’s

coffee production, are characterized by their bold, strong, and slightly bitter taste. They also have

a higher caffeine content compared to arabica beans. (Kirkland Gee, n.d)

- Ideal Growing Conditions: The Central Highlands region features a temperate climate and rich,

red volcanic soil with high concentrations of basalt. These conditions are perfect for growing

coffee, resulting in a unique flavor that sets Vietnamese coffee apart. (Belvico, 2021)

- Diverse Crop Mix Opportunities: In recent years, there has been growing interest in

transitioning the dominant coffee monocultures in the Central Highlands into a diverse crop mix.

This transition aims to reduce the risk of farmers abandoning coffee altogether due to increasing

climate variability. By diversifying crops, farmers can enhance total crop value, improve drought

resilience, and ensure compliance with international regulations on pesticide residues. Such

efforts also contribute to downstream water availability and sustainable coffee supply chains.

(Iucn, 2022)

2. Tripod strategy (Kiềng 3 chân)

There are 3 main groups:

- Group 1: COFFEE (Vietnamese Phin Coffee, Espresso Coffee)

- Group 2: TEA (Lotus tea, fruit tea & green tea)

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- Group 3: FREEZE (Ice blended)

And in these 3 main groups, there will be 1 product representing each group.

- Phin coffee & condensed milk represents CAFÉ

- Yellow Lotus Tea represents TEA

- Green Tea Freeze represents FREEZE

→ These 3 products account for Highlands' largest revenue, becoming the 3 products that

have brought Highlands' success up to this point.

a) COFFEE (Vietnamese Phin Coffee, Espresso Coffee)

Strategic Fit: Highland Coffee’s existing expertise in coffee products allows them to leverage

their knowledge and resources effectively.

Economies of Scale: By expanding into related coffee products, Highland can achieve cost

efficiencies in sourcing, production, and distribution.

Brand Synergy: Offering a variety of coffee options reinforces Highland’s brand identity and

attracts a broader customer base.

(Rural Sociology 73(4), 2008)

b) TEA (Lotus tea, fruit tea & green tea)

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 Diversification: Entering the tea market diversifies Highland’s product portfolio, reducing

reliance on coffee alone.

Health Trends: Tea is associated with health benefits, appealing to health-conscious

consumers.

Market Growth: The global tea market is growing, providing growth opportunities for

Highland.

The trend is that Vietnamese people often drink tea in the morning.

(Managing Value and Supply Chains (IJMVSC), 2015)

c) FREEZE (Ice blended)

Innovation: Offering frozen products like ground ice diversifies Highland’s offerings and

attracts new customers.

Seasonal Appeal: Frozen products are popular in hot climates, making them suitable for

Highland’s target markets.

Complementary: Ground ice complements Highland’s existing beverage lineup, enhancing

customer experience.

IV. UNRELATED DIVERSIFICATION

1. Food

After drinks comes food, in this product group Highlands divides into 2 main lines: Bread and

pastry. In addition to the popular choice in modern cafes, cakes, the chain also added bread to its

menu as a link product. (Hà Nguyễn, 2023)

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- Bread: It can be seen that bread is considered the "national soul" of Vietnam, it is also the

most popular street food. Bread can be eaten at any time (morning, noon, late afternoon or

evening). This is also a wise product strategy for Highlands, when bread is a dry food and

easily causes thirst. Therefore, every time a customer orders bread, the company can also sell

it with water. (Hà Nguyễn, 2023)

- Pastry: These are cross-sell products to increase order value. Upselling is a sales technique

used to get customers to buy a more expensive product or try to upsell a product to increase

profit margins, possibly buying a product that is related to what was purchased. ([Link],

2023)

In addition, Highlands Coffee also sells packaged products such as chocolate bars, cookies,

almonds, and dried strawberries.

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2. Products serve customers far away

Highland Coffee's products also include canned coffee or roasted ground coffee, helping

customers from far away reach them. (Hà Nguyễn, 2023)

Furthermore, this brand also launches fashionable water bottles and cups to attract young people.

At the same time, encourage customers to bring water cups to reduce waste into the environment.

(Hà Nguyễn, 2023)

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V. THE SUCCESS OF HIGHLANDS COFFEE

1. Factors that create success

a) Good management and administration ability

Entering a coffee shop in Highlands, people clearly see the optimal work of each department and

the very scientific layout. And the uniformity of service quality across the chain is at a very high

level. That shows the management and operation capacity of highlands is very good.

What is proud of Highlands Coffee is that it has been creating a meaningful, creative, and

dynamic working environment. All employees have the opportunity to express themselves, live

in an environment of solidarity and team spirit. With the core values that Highlands Coffee has

been building and pursuing, the right desires and competitive salary and appropriate welfare

policies, Highlands Coffee has provided employees working at the company with a high standard

of living. Stable income, many benefits and promotion opportunities, helping employees feel

secure in their work and long-term commitment. ( CareerViet, n.d)

b) Finance

With the amount of investment capital, Highlands clearly has the largest scale in the cafe chain

segment and in a long-distance race, financial capacity is a great advantage to help Highlands

occupy beautiful premises and quickly expand its chain stores.

Highlands Coffee has invested nearly 500 billion VND to build a coffee roasting factory in Phu

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 My II industrial park - the key economic zone of Ba Ria province. With an area of nearly 24,000

m2, capacity can reach nearly 10,000 tons of coffee per year in the first phase. In the next stages,

capacity can reach 75,000 tons of coffee per year. (Highlands Coffee, 2023)

c) Location

The locations of Highlands are very uniform, they are all beautiful locations or at the foot of

office buildings. This helps customers clearly and consistently identify Highlands' brand image.

Highlands has more than 300 stores spread across 24 provinces and cities in Vietnam. This

brand's chain of stores is located in the most prime locations in the city center, making it

convenient for everyone to reach. (Nhi Thu, 2022)

d) Customers

From the above systems, customers coming to Highlands are middle-to-high-end customers,

willing to pay above the average level and have a high frequency/habit of using the service over

and over again.

Highlands Coffee's coffee price currently ranges from 30,000 to 60,000 VND. This is a price that

is not considered appropriate in the Vietnamese market - the world's 5th largest exporter of

coffee output. Compared to the general level, this price is not low, however, for target customers

who are middle class people with stable income, this is an acceptable price. (Nhi Thu, 2022)

2. Success of Highlands Coffee

Starting its business in the 2000s by packaging coffee products in Hanoi, Highlands Coffee then

developed rapidly and expanded into a coffee chain. In 2002, Highlands opened its first two

stores in Hanoi, and after only 20 years of operation, the number of stores named Highlands

Coffee exceeded 300. Along with the expansion in scale comes rapid growth. high in revenue,

completely overwhelming other competitors in the market with revenue in 2023 equivalent to

about 3,700 billion VND. (Lê Linh, 2023)

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 (Đức Huy, 2023)

VI. CONCLUSION

Highlands Coffee's Corporate Strategy helps determine the long-term direction of the business. It

allows the organization to shape its goals and vision, helping to create a common framework for

all employees to understand and work towards common goals. It helps focus on the

organization's strengths and how to use them to dominate the market and competitors. Corporate

strategy is also concerned with how an organization creates value for customers and maintains

long-term relationships with them.

- Shaping core products: Highlands Coffee has focused on developing and promoting three

main product groups: Coffee, Tea and Freeze.

- Understanding customers: Highlands Coffee's marketing strategy is based on the needs and

tastes of the majority of customers.

- Market segment: Highlands Coffee owns more than 456 stores spanning 28 provinces and

cities across the country. Market segmentation helps businesses grasp customer psychology.

- Do not create too many groups of dishes on one menu: Focus on marketing one core product

(in stages) & create many core products representing each group of dishes (in stages).

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 - Space helps customers have good experiences: Highlands Coffee always focuses on creating a

comfortable and exciting atmosphere for enjoying coffee for customers

- Using franchising: This strategy helps minimize costs to open exclusive stores and quickly

increase the number of stores.

VII. REFERENCES

An, B. (2021), Bảo vệ môi trường theo cách Highlands Coffee: Dùng quai xách tự hủy sinh học,

nhưng giữ nguyên combo cốc, ống hút và thìa làm bằng loại nhựa siêu bền. Available at:

[Link]

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[Link] (Accessed: February 18, 2024)

Belvico, (2021), Vietnamese coffee from the Central Highlands. Available at:

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February 17, 2024)

[Link], (2023), Chiến lược kiềng ba chân làm nên thành công của Highlands Coffee mà bất cứ

ai làm F&B cũng có thể học hỏi. Available at: [Link]

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[Link]#:~:text=T%C3%ADnh%20ti%E1%BB%87n%20l%E1%BB%A3i%20c%E1%BB

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%9Di%20%C4%91i%E1%BB%83m. (Accessed: February 17, 2024)

CareerViet (n.d), Highlands coffee – đích đến làm việc ý nghĩa, tự hào sinh ra từ đất Việt.

Available at: [Link]

[Link] (Accessed: February 17, 2024)

Hà, N. (2023), Phân tích chiến lược Marketing của Highlands Coffee – Thương hiệu cà phê nổi

tiếng. Available at: [Link]

(Accessed: February 19, 2024)

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Hằng, M. (2023), Cuộc chiến khốc liệt trên thị trường chuỗi cà phê Việt Nam: Liên tục kẻ đến

người đi. Available at: [Link]

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2024)

Highland Coffee (2018), Highlands coffee: tự hào sinh ra từ đất Việt, 1999. Available at:

[Link]

(Accessed: February 18, 2024)

Highland Coffee (2023), Đầu tư gần 500 tỷ xây nhà máy rang xay mới chuẩn quốc tế, Highlands

coffee đưa cà phê rang xay Việt Nam lên bản đồ thế giới. Available at:

[Link]

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Highland Coffee (2024), Tìm quán cà phê. Available at:

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Huy, Đ. (2023), Phúc Long vượt Highlands Coffee về doanh thu hàng ngày trên mỗi cửa hàng,

là chuỗi có tỷ suất lợi nhuận cao nhất Available at: [Link]

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International Journal of Managing Value and Supply Chains (IJMVSC) Vol. 6, No. 3, 2015,

VIETNAM TEA INDUSTRY: AN ANALYSIS FROM VALUE CHAIN APPROACH. Available at:

[Link] (Accessed: February

18, 2024)

Iucn, (2022), New study on coffee transition for multiple benefits in the Central Highlands.

Available at: [Link]

[Link]

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(Accessed: February 15, 2024)

Kirkland, G. (n.d), Vietnam Central Highlands Coffee: Origin Guide. Available at:

[Link]

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Linh, L. (2023), Highlands Coffee vươn mình giữ vị thế vững chắc sau hai thập kỷ. Available at:

[Link]

%20c%C3%B9ng%20s%E1%BB%B1%20m%E1%BB%9F%20r%E1%BB%99ng,

%C4%91%C6%B0%C6%A1ng%20kho%E1%BA%A3ng%203.700%20t%E1%BB

%B7%20%C4%91%E1%BB%93ng. (Accessed: February 15, 2024)

Rural Sociology 73(4), 2008, pp. 528–554, Competing for Coffee Space: Development-Induced

Displacement in the Central Highlands of Vietnam. Available at:

[Link]

repid=rep1&type=pdf&doi=3ac5a1ebdeb1df92e7edb4d9f4c1bba96c3cfc3d (Accessed: February

17, 2024)

Thu, N. (2022), Chiến lược Marketing của Highlands Coffee - Vì sao Highlands Coffee thành

công. Available at: [Link]

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2024)

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