starbuck market share in vietnam

(2019). The first Starbucks store is opened in District 1, Ho Chi Minh city in January 2013 and after 5 years, Starbucks Vietnam has more than 30 stores in 4 cities Ho Chi Minh City, Ha Noi, Hai Phong and Da Nang. One of the big players in the game, Starbucks, occupies more than 30,000 outlets around the globe. Customer-oriented marketing-A strategy that guarantees success: Starbucks and McDonald's.Â, The World Bank in Vietnam. Van, A. Therefore, it is more likely to be profitable to serve this market phase. The grand opening of the HCM City store marked Vietnam as Starbucks’ 12th market in the Asia Pacific, and adding up to its chain of some 3,400 stores in the area. ... Vietnam and China. Vu’s focus on specialty beans and roasting includes a variety called “Legendee” created to mimic the flavor of coffee brewed from beans that are recovered from the feces of civets, a weasel-like rodent. The company has strong ethical values and ethical mission statement. This business strategy successfully connects tea and coffee, and cultural conflicts can be transformed into creative advantages. Starbucks also offers Ready‐to‐Drink (RTD) beverages which include Starbucks® bottled Frappuccino® coffee drinks, Starbucks Discoveries® chilled cup coffees, Starbucks Doubleshot® espresso drinks, Starbucks Doubleshot® Energy+Coffee drinks;Seattle’s Best Coffee® Iced Lattes, Starbucks Refreshersâ„¢ beverages, Tazo® bottled iced and juiced teas. Their customers enjoy quality service, an inviting atmosphere and an exceptional cup of coffee. Vietnam has a population of about 90 million and three out of five Vietnamese are under the age of 35. Starbucks will price its products in a premium position that is competitive. They are proud to offer two landmark programs for their partners: comprehensive health coverage for eligible full‐ and part‐time partners and equity in the company through Bean Stock. Thuy further added that expensive coffee is just for the children of government officials, or people who have lots of money. A case study of Starbucks.Â, Nguyen, H. (2017). As Starbucks keeps expanding to new markets and cultures, the company has different types of customers demanding unique. According to the company’s website, the coffee roaster discovered enzymes that mimic civet digestion and developed a process to give the coffee the same “magical flavor. (“Starbucks opens first store in coffee-loving Vietnam”) (“Starbucks has seen mixed reactions in AsiaLIFE HCMC”) John Culver, president for China and Asia Pacific said that Starbucks plans on showing up in a way that doesn’t currently exist in the market in terms of the premium products and the experience they offer. According to research, there is certainly more than enough demand to support this major industry. (“Starbucks Coffee Company”) Starbucks mission is to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. Otherwise, a lower price will have to be charged and the net effect will be zero. The key to all coffee vendors surviving in Ho Chi Minh City may come down to menu offerings. Despite this being a more risky investment than those to which Starbucks shareholders are familiar with, the dollar market shares of the company are steadily rising, showing wide support for this move. Laos, a landlocked country bordered by Thailand, Myanmar, Cambodia, Vietnam and China, has so far reported only 24 COVID-19 infections, according to a tally kept by the Johns Hopkins University. Copyright infringement in Vietnam: recognizing the reasons and suggesting some solutions.Â, Pham, T. (2020). It’s understandable why the US Starbucks decided to set up its first shop in Vietnam in HCM City, a commercial hub. Starbucks take a holistic approach to ethically sourcing the highest quality coffee. Starbucks said it was monitoring the coronavirus situation but is still aiming at an opening in summer 2021. And Nestle instant coffee which is engineered to suit the Vietnamese palette is sold widely in Vietnamese supermarkets. The Vietnam Starbuck has announced the plan to close some stores in the next few years due to poor performance (Vietnam Investment Review, 2018). The face of the country’s coffee culture is changing but back at the busy roundabout, where Cach Mang Thang Tam, Nguyen Trai, and Ly Tu Trong streets meet, one of the local coffee store, Nguyen Phi has no intention of changing his business plan. Starbucks’ stability and expansion in Vietnam will be determined by external sources which include potential entrants which may also want to venture into the Vietnamese market, also by internal and external threats which include pre-existing local brands and industrial rivalries and by threats of substitutes whereby another type of beverage or service may replace Starbucks coffee and beverages. Gross national income per capita was $1,270 in 2011. Retrieved from http://repository.vnu.edu.vn/handle/VNU_123/67911, Qian, Y & Xing, T. (2016) Starbucks VS Chinese Tea—Starbucks Brand Management Strategy Analysis in China.  Retrieved from http://dx.doi.org/10.3968/8197, Rajasekaran, R. (2015). Ralf Matthaes, a regional managing director at market research and consultancy firm TNS said that Local consumers will be drawn by the Starbucks name and young people desire that modern, hip culture. Le Suan, one of Phi’s customers, agrees that while he now lives in the United States, he grew up in Vietnam and defaults to local coffee joints when he returns to his home country for a visit. (“Starbucks Coffee Company”) Today, Starbucks connect with millions of customers every day with exceptional products and nearly 18,000 retail stores in 60 countries. As quoted by Thuy, her family-run cafe in Hanoi offers prices that are affordable for average Vietnamese. The grand opening of the HCM City store marked Vietnam as Starbucks’ 12th market in the Asia Pacific, and adding up to its chain of some 3,400 stores in the area. She confirmed that Vietnam with a population of over 90 million people is a large market and provides opportunities for many coffee brands to develop. His newest cafes in Vietnam are in fact reminiscent of Starbucks, with oversized armchairs, contemporary music and a menu offering coffee drinks, smoothies and snacks. Starbucks is attempting to slowly expand in a market where it was once shunned.. And their master roasters bring out the balance and rich flavor of the beans through the signature Starbucks Roast. John Culver, president of Starbucks China and Asia Pacific, tells AsiaLIFE that Starbucks is deeply respectful of Vietnam’s long and distinctive local coffee culture and they know coffee is a national pride for many Vietnamese and as such, Starbucks look forward to contributing and growing Vietnam’s already vibrant coffee industry. A customer, Nguyen Phuong said many in Vietnam know of Starbucks and want to be fashionable. Free resources to assist you with your university studies! Liu, S. M., & Yang, X. T. (2015). Starbucks wanted to turn all Starbucks employees into partners, give them a chance to share in the success of the company and make clear the connection between their contributions and the company’s market value (Thompson& Strickland, 2009). Starbucks however declined to elaborate on the number of outlets it plans to open in Vietnam. Coffee giant Starbucks takes advantage of a fast-growing economy and a middle class growing in Vietnam.  Businesses are built primarily by importing a business model and adjusting a business model to adapt to local conditions (Fischer & Roy, 2019).  Starbucks uses a similar approach to run its business around the world.  Therefore, there is also an integrated strategy for Vietnam.  Starbucks faces new challenges in constantly launching new stores.  Currently, the company has one store for every 1.7 million people in Vietnam, which is much lesser than other Asian countries like Thailand, Philippine, or Singapore.  Vietnamese coffee chains have a better understanding of the domestic market and are rapidly expanding their network in the local market.  The fastest-growing coffee chain is The Coffee House, based in Ho Chi Minh City. It is well-known that Vietnam is the origin country of coffee.  There is a long history of coffee drinking in Vietnam.  From the past, through many ups and downs of history, coffee still has a place in Vietnamese life.  Coffee has appeared in Vietnamese society since the French colonization turned Vietnam into a colony.  The Central Highlands is the largest coffee area in the country with the best quality coffee.  Arabica and Robusta are the two types of coffee that are most popular in Vietnam.  The steady growth of the coffee industry shows that coffee has become an inseparable part of people's daily lives in Vietnam.  Vietnam is among the top five Asian countries in terms of per capita coffee consumption after Japan, South Korea, and Thailand (Pham, 2020).  According to the World Bank, in 2019, the total population of Vietnam is approximately 97.60 million, which 70% of the population is under 35 years of age. The name evoked the romance of the high seas and the seafaring tradition of the early coffee traders. This will become a weakness when the company expands to other countries including Vietnam. VAT Registration No: 842417633. To export a reference to this article please select a referencing stye below: If you are the original writer of this assignment and no longer wish to have your work published on the UKDiss.com website then please: Our academic writing and marking services can help you! Other internal threats would include the effect of supplier’s power and the buying power of the customer. Looking for a flexible role? They’re a neighborhood gathering place which has become a part of their daily routine. Starbucks believes that China provides an appropriate business opportunity, with economies of scale, increasing human energy spending and coffee culture boom, even although China is a tea-making country. Intention–Behavior Discrepancy of Foreign versus Domestic Brands in Emerging Markets: The Relevance of Consumer Prior Knowledge.Â, Ta, N. (2020). They also offer a selection of premium Tazo® teas, fine pastries and other palatable treats to please the taste buds. The market is heating up due to strong economic growth, especially in the three largest cities in Vietnam. On Wall Street, that is, where its shares have been heading south in recent months, bucking the market trend. In late 2011, the coffee giant also brought out Evolution Fresh, a juice company. Business model development: a customer-oriented perspective.Â, Workman, D. (2020). The people who go into a Starbucks may want to show that they are modern and stylish and a coffee lover will go to them instead. Starbucks is the world's number one brand in coffee and coffee-related products.  The company has 30,626 retail locations around the globe.  Entering the Vietnam market in 2013, Starbuck has brought its dominant coffee culture to the country that is well known for its passion for coffee.  Despite the high expectation of the company's success, Starbucks has also moved slower than expected.  Eight years after its entry, the number of Starbucks stores reaches just 34, which is much lower compared to 4,100 Starbuck stores in China, 326 in Indonesia, and 330 in Thailand.  Local coffee chains are challenging the giant with lower prices, convenience, and localization experience.  The Vietnam Starbuck has announced the plan to close some stores in the next few years due to poor performance (Vietnam Investment Review, 2018).  Starbucks is struggling in a coffee market that worth more than $5.9 billion (USDA Foreign Agricultural Service, 2019).  The purpose of this paper is to examine the challenges that Starbucks is facing in the Vietnam market, learn the company's strategies to overcome difficulty, and analyze factors that influence the company's future business. A first time customer, Nguyen Ngoc Tram, 17 explained to Tuoitrenews that as this is the first time she tasted a US coffee brand name, she was very eager to buy her first Starbucks cup and was willing to queue for more than 30 minutes to be able to sip her Vietnamese Starbucks coffee. No plagiarism, guaranteed! Keywords: Marketing strategy, culture cognition, consumer behavior, brand management, international markets, Foreign brands, global/local identity, customer-oriented marketing. All work is written to order. According to the World Bank, the average local salary is only $148 and presents the most significant proportion of the population. Starbucks' mission statement is "to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time," emphasizing direct experience in daily work, life, and entertainment (Starbucks, 2020).Â. Local chains such as Trung Nguyen Coffee and Highlands Coffee have more experience catering to the Vietnamese love of strong coffee. He said that the company is also considering an initial public offering and the timing has yet to be decided. “Vietnam is one of the most dynamic and exciting markets in the world and we are proud to add Vietnam as the 12th market across the China and Asia Pacific region,” said John Culver, president, Starbucks China and Asia Pacific. Taking Starbucks as an example to explore the marketing strategy of multinational companies in China. Starbucks promoted a campaign based on the Chinese market, which offers custom beverages to fulfill Chinese taste and local approval. Due to a steady growth economy in the last couple of years, a part of the population sees a significate increase in their income. Starbucks think the market demand is high enough to justify its own set of chains, not just an extra few fruit options on the menu at their coffee shops. Company Registration No: 4964706. It is their goal that 100% of their cups will be reusable or recyclable by 2015. Starbucks is also monitoring Vietnam’s rising coffee demand. Copyright © 2003 - 2020 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. And the music you hear in store is chosen for its artistry and appeal. Starbucks’ purchase of Evolution Fresh for US$30 million last year was in line with its strategy to sell a broader range of products through its own cafes, grocery stores and other retail outlets. One commenter even quipped that Starbucks is the new war face of America. If you need assistance with writing your essay, our professional essay writing service is here to help! Well, it has happened – Starbucks has finally. Since the beginning, Starbucks has been a different kind of company. In order to uphold a sustainable competitive advantage, Starbucks must achieve its value activities in a way difficult for competitors to replicate or imitate. Coffee Exports by Country. A competitive advantage is maintained if the cumulative cost of performing the value activities is lower than competitors. He’ll keep doing what he does best and his customers will keep coming as well. Nhận ngôi sao điểm thưởng cho mỗi chi tiêu tại Starbucks. Retrieved from https://www.vn.undp.org/content/vietnam/en/home/countryinfo.html, Baidya, M. K., Maity, B., & Ghose, K. (2019) Innovation in Marketing Strategy: A Customer Lifetime Value Approach.  Retrieved from http://jbm.nccu.edu.tw/pdf/volume/2502/JBM-vol-2502.pdf#page=80, Dao, K., & Heidt, T. (2017). Product attributes and preference for foreign brands among Vietnamese consumers.Â, Lin, E. (2012) Starbucks as the Third Place: Glimpses into Taiwan's Consumer Culture and Lifestyles.  Retrieved from. Highlands Coffee stores, with overhead music and Wi-Fi Internet, are located in prime retail and landmark locations in Vietnam’s largest cities. According to Sara Senatore, a New York-based analyst at Sanford C. Bernstein & Co, prices may still be less than the U.S. because of lower income and operating costs in Vietnam. Retrieved 26 January 2020, from https://www.worldbank.org/en/country/vietnam/overview. (Talpau & Boscor, 2011), Starbucks offers an ultimate customer experience that puts customer feeling at the top of priority and promotes the value of "Starbucks Culture" that provides "third place" experience to consumers (Dollinger, 2018).  Consumers are put at the center of the company's concerns and all decisions and actions consider from the consumer's point of view and focus on the needs of customers.  The company offers a welcoming atmosphere to many young white collars, college students as "a home away from home" (Qian & Xing, 2016).  Starbucks became a fashion symbol in Vietnam in just a few years; It translates more than coffee, but brand and culture.  Many young white collars, university students like to spend time in coffee shops and are passionate about the environment that Starbucks creates where they can work, read, browse the Internet. Cà phê espresso của chúng tôi, latte của bạn. One local coffee store owner, Nguyen Phi whose shop is located in the chaotic traffic in the roundabout just west of the New World Hotel and of Phi’s newest neighbour and competitor, Starbucks commented that they don’t operate on the same battlefield and belong to two different businesses. But he added that he doesn’t expect to become a regular Starbucks patron because he drinks five or six cups of coffee a day, thus regular visits to Starbucks would be too expensive for him. The purpose of this literature review is to examine the challenges that Starbucks is facing in the Vietnam market.  This literature review will present the company's international strategy plan and analyze specific elements that influence the company's future business.  This paper also examines Vietnamese consumers with their perceptions and experiences of Starbucks as a foreign brand.  Lastly, this literature suggests potential improvement for Starbucks in Vietnam. 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