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Highland Coffee Case Study

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BACKGROUND According to Scofield (2011), Vietnam is the second the largest coffee producer in the world which the amount goes up to thousand tons every year. Therefore, it becomes a potential market for any investors and Highlands Coffee is not an exception. Highland is a Vietnamese coffee shop chain and producer and distributor of coffee products, established in Hanoi by David Thai – a Vietnamese American in 1998. The founding of Highland Coffee Company marked the first time an Overseas Vietnamese was able to register a private company within Vietnam.

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In the 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. He later cited this as the inspirations behind the founding of registration marked the first time an Overseas Vietnamese was able to register a private company of any kind in Vietnam. Two years later in 2000, the company was registered as a joint stock company, again a first for an Overseas Vietnamese.

Highland is now having about 668 million dollar for the domestic market size and is growing at double digits.

With the three main kinds of products including Roast and Ground, 3in1 and RTD are served via supermarkets, hotels, restaurants and cafes, Highland Coffee wants to bring to customers feel comforted from the reassurance that comes with traditional and trusted value. Highlands is the only brand in Vietnam which combinesquintessence of the world and traditions of Vietnam, old and new, the East and the West. As of 2009, the company operated 80 coffee shops in six cities and provinces across Vietnam: Hanoi, Ho Chi Minh City, HaiPhong, Da Nang, Vung Tau and Dong Nai.

OVERVIEW SOME DETAIL ABOUT HC David Thai is the founder of Highlands Coffee. He was also the first overseas Vietnamese successfully register a private company on Viet Nam. Highlands coffee (HC) is one branch of Viet Thai International: F&B(food and beverage). Highlands coffee is state enterprise. For more information, Nike and many more famous brands are brought and distributed in Viet Nam by VTI (Consumer Lifestyle). As we know, Highlands coffee has aimed to open more than 70 stores in 2007 and now, they’ve lready had about 80 stores, these usually located in nice view of the big cities- the centre. Highlands coffee stores are located in nice view, in buildings, offices, near supermarkets or outdoors. When customers come to HC, they are served with free, fast, safe parking lots. Via visible and invisible values, HC has shown to their consumers the difference, the luxury and safety. The average price is about 40. 000 VND. This price is suitable because this is evaluated by consumers’ feelings. These places have a great number of officers, young people.

Officers, youngsters, and middle-class are the main target of HC; and in crush time, it is possibly overload to only serve these potential consumers, so it seems that is not really necessary to boost advertising. This is the reason why they can steadily develop and avoid strong competitor until they are ready. HC stores, as we see, have western structure, 2 main colors: red and black combine make such great atmosphere. HC is a combination of the modern and the classic, of East and West. BUSINESS MODEL There are 2 main business models that is Building brand and then franchise_ give franchise to others individual or company. * Another model is no franchise- the companies open their own stores and manage themselves. And Highlands Coffee main business model has been no franchise type until they (executives ) sells its 50 % stocks to Jollibee. And recently, Highlands coffee just have bought Ph? 24. MAIN PRODUCTS and DISTRIBUTION The main export product is roasted coffee beans. They started to launch roasted coffee product via high-class hotels and supermarkets in 2000.

They mainly export to Western Europe, Eastern Europe, North America, and The United States. They only distribute packed product. Their outlets are all around Viet Nam and there are also in countries outside, about 100 outlets in total. ( coffee stores). HC has exported product to USA, Australia, Japan. HC cooperate with Mercure hotel to promote the brands together. Not only focus on coffee, HC has diversified the menu, now there are bread, ph? , yogurt shake, ice blender, etc. Expanding international market is one of strategy step and HC 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 VN 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 more flavor than Robusta. Therefore, Arabica ‘s price is twice the price of Robusta. HC 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 CapheSanhDi? u CapheTruy? nTh? ng Caphe Di S? n Coffee beans have been tested carefully, preserved in right way. Especially, the packing process is been observed closely, and the product packaging has function to keep the fresh of coffee. INDUSTRY ANALYSIS ECONOMIC STATUS: * Vietnamese market: * In 2012, Vietnam became the largest coffee export country in the world (instead of Brazil). However, according to experts Vietnamese coffee export will be experienced a decrease in future.

Because the Government don’t have policies to expand the coffee growing area and they have plan to reduce the coffee growing area from 550 000ha to about 500 000ha in order to replace old coffee trees as well as grow new plants in some areas have low coffee productivity. * Many foreign firms (FDI) have more advantages in our market, they can by raw material with low price and make more difficulties for domestic companies, who lack of good marketing programs to bring Vietnamese coffee styles to the world as well as to reach the customers’ need, which the foreign firms have done very successfully. Vietnam farmers grow Robusta trees more than Arabica ones, which contain much higher caffeine level. However, we have grown Arabica trees in some suitable areas in the Northern Provinces. * World’s market: * Because of climate change, Farmers have many difficulties to have good quality andhigh productivity. Unstable supply source has caused many changes in the coffee price in the world market. * Because of the impact of the world’s economic depression, the demand for Robusta has increased recently, new chances for Vietnamese Producers. Price of 2 main coffee beans, Arabica and Robusta has came more closer, especially in 2012, makes farmers in Brazil and other Arabica growing countries keep their product to wait for new increase in Arabica price. SUPPLY SOURCE:Highlands coffee has the same situation with many domestic company with some difficulties in their supply sources: * Global warming has caused many unpredictable climate patterns in all over the world including Vietnam. According to the forecast of experts, Vietnam coffee productivity will decrease about 15% in 2012-2013 in comparison with 2012.

Coffee trees are very easy to be affected from climate changes. * Coffee appeared in Vietnam 19th century, the coffee trees from 1800s have been kept to produce coffee for our farmers until now. However, those old coffee trees now have very low productivity and farmers need not only a huge amount of money to replace those trees (with120. 000ha of coffee trees over 20 years in 500. 000ha coffee trees in our country) but this process also needs around 3 years to have the best productivity. With the advantages in low rate of loans or strong financial power, foreign companies has collected the raw coffee beans directly from farmers, which against our laws, and domestic companies have to face with high rate of loans, lack of information about the world’s market, big risks…that caused many problems for Vietnamese coffee makers. * Despite the existence of the Vietnamese Government standard for coffee beans quality – 4193/TCVN, our domestic corporations cannot meet that standard, that make our products have lower price than other countries and have low position in the world market. Traditional growing style and lack of effective tools as well as fertilizers are also the causes for our low quality coffee products. DISTRIBUTION FOR SOCIETY: * Because Highlands Coffee was establish by a Vietnamese-American, they have many activities which are include the mixture of Western and Eastern style in order to meet more and more people needs not only Vietnamese but also foreigners. They have been joined in many charity programs and have been sponsored for many programs in Vietnam, which attracted many Vietnamese and foreigners: * American Independence Day * Australia Day * Canada Day * Terry Fox Run International School Charity GOVERNMENT POLICIES Vietnamese coffee industry has experienced many difficulties from the crisis. For example, statistics on the economy of Vietnam is not sufficient and accurate enough to attract investment. Moreover, information about the economy as well as activities of enterprises in Vietnam is inconsistent, unclear and unreliable. But through such difficulties, Vietnamese coffee industry gained a lot of experience to create a suitable orientation for coffee development, conform to the benefit of the world coffee community and bring back great effect on coffee sector of Vietnam.

Therefore, the Government has conducted some policies to encourage innovative investment: * State-owned Enterprise Law 2010 has given many chances to develop a strong explicit and clear business, along with fair competition in the market. To gradually transform to market economy, Viet Nam should renovate and improve the efficiency of State-owned businesses. Renewing policies is the way to manage and monitor State-owned businesses, implement the equitization process of State -owned businesses, ensure efficient usage of State’s capital and increase competitiveness between companies. Central Institute of Economic Management (CIEM)in Vietnam has drawn up The project “Renew the corporate governance under WTO commitments and practices of market economy”, which has been submitted to the Ministry of Planning and Investment (MPI) by CIEM. This project has used the results of the program including international practices of corporate governance; the status of the legal system of corporate governance; the reality of corporate governance through survey results; policy recommendations, adjustment in economic institutional environment, adjustment in behavior of stakeholders in corporate governance. Focusing on raising awareness and demand to improve corporate governance; increasing transparency of information and all business’ activities; issuing decree of information transparency and State-owned businesses’ operation and separating business ownership and administration function of State to improve market economy institution and implement WTO commitments. * Resolution 11/NQ-CP day 24/2/2011 was created to restrain inflation and stabilize the economy. * Decree no. 24/2007/ND-CP has shown preferential policies on enterprise income tax.

Taxes in Vietnam are relatively high, particularly when one factors in Import and Export Duties * On May 4, 2012, the State Bank of Vietnam (SBV) issued Circular 14/2012/TT-NHNN, imposing a 15 percent cap on the lending interest rates for four priority sectors, namely agriculture, exports, supply, small and medium-sized industries. This new policy could have a positive impact on the coffee sector, especially for coffee growers and local coffee exporters as they may be able to borrow money from local commercial banks at a lower rate compared with several years ago.

Especially, there are many favor policies for agriculture products, like coffee: * Strictly control the quality of seedling, provide people with intensive training in applying modern farming method to sustainable coffee cultivation. These will apply modern transaction methods, such as deadline transactions, to prevent market fluctuation risks and put Vietnamese coffee on international trading floors. * Each region has its own policies to strongly encourage production of coffee that receives certifications, such s VietGap, GlobalGap, UTZ Certified, the Common Code for the Coffee Community (4C) Association, and Rainforest Alliance * Allocate credits with preferential interest rate for business loans, purchase and store coffee temporarily if necessary to intervene promptly when coffee’s prices are low or difficult to consume . All these helps to stabilize farmer’s life . * The 4C(Common Code for the Coffee Community ) Association is seeking to unite all coffee stakeholders, which includes the producers, traders, industry, civil society organizations, governmental, research, and standard organizations.

This effort is to improve the economic, social, and environmental conditions of coffee production and processing to build a thriving, sustainable coffee sector. (The 4C Association is the platform that brings together stakeholders in the coffee sector to address sustainability issues in a pre-competitive manner. ) Policy of limiting exporting agriculture products to protect domestic market. * Export – Import policies are changing in ways of compatible with the level of integration of Vietnam’s economy with world economy.

State-owned firms are beginning to open up due to WTO commitments, a desire to acquire new technologies, and in an effort to attract increased foreign direct and equity investment, it might be a good business move in light of Vietnam’s agricultural prowess and its need and desire to expand * Protect national food security by following Import and export duties by National Assembly on 26/12/1991 * In April 2012, Sustainable Development Strategy of Vietnam for 2011-2020 was approved.

Objectives of the program are: to stabilize the macro-economy; to stabilize food security, energy security, and financial security; to transform the growth modality to harmonization development among green growth and low carbon economic development; and effective and economic use of all resources. Among the above objectives, GOV focuses on: food security assurance; transformation of agricultural structure in the direction of industrialization; develop and strengthen the comparative advantages of the rural areas, and a greater appreciation of the linkage between urban and rural areas.

ACHIEVEMENT AND POSITION After 10 years of development, Highlands Coffee has gained many achievements in attaining its position to be one of the top coffee brands in Vietnam. From the first coffee shop in Ho Chi Minh City, Highlands Coffee has now developed to early 100 shops in 6 provinces in Vietnam. It became one of the most favorite places for hanging out with friends, personal business meeting, and so on. In 2008, Highlands Coffee served more than 5 million customers and sold more than 4 million cups of coffee. In a survey (conducted by http://vi. scribd. om/doc/44699742/Highlands-Coffee-G3), Highlands Coffee ranks 2nd in 5 favorite coffee brands, after Trung Nguyen Coffee, although only 14. 3% of people who participated in this survey usually drink Highland coffee. This was thanked to David Thai, CEO of VTI as well as founder of Highlands Coffee, and one of the two Vietnamese awarded Young Global Leader by WEF (World Economic Forum). Highlands Coffee has developed many features of its style in choosing menu and products’ designs and satisfied customer’s various needs. This helps it receive really positive feedbacks from customers.

Allowing diversified forms of payment such as credit cards, cash paying… along with serving fast, the brand has satisfied a large number of customers. Also, having a good scenery is an extreme advantage to Highlands Coffee. By locating many shops in the hearts of very big cities like HCMC and Hanoi, it attracts various types of customers, ranging from officers and businessmen to student to come and enjoy coffee. CHALLENGES * Competitor: Instant coffee brands * Instant coffee is only for home using and gift-giving in special occasions. Instant coffee could be distributed in supermarket, outlets, open market and retailer shops. Vinacafe/ Nescafe/ G7 * Nescafe and Vinacafe have dominated instant coffee market with nearly 70% of market volume. * Nescafe: * more Vietnamese taste * TV Commercials, prints ads in high frequency (edit) * Vinacafe’ sales promotion campaign is rather like Nescafe’s. * G7-instant coffee brand of Trung Nguyen approximately occupy 15-20% of market volume. * G7 instant coffee has launched new slogan “Real instant coffee”. The Number One Competitor: Trung Nguyen Coffee: About location: Highlands Coffee chooses eye-catching background for its main location, while Trung Nguyen prefers many practical places. The headquarter of the Ministry of Industry and Trade is a typical example. * About coffee product: Trung Nguyen offers quite the same high quality as Highlands Coffee’s. Moreover, Trung Nguyen can take advantages of the slogan: “Vietnamese people use Vietnamese goods”. * About price: Because Highlands Coffee targets Vietnam’s younger middle class, its price is higher about 10. 000 VND than Trung Nguyen Coffee. —————————————- * Difficulty: Highlands Coffee * Founded by David Thai, Highlands Coffee targets Vietnam’s younger middle class, with premier-location-based Parisian style cafes offering coffee priced higher on average. Like Trung Nguyen, Highlands puts baristas through extensive training. * Internal Environment: Though not as prolific as Trung Nguyen, Highlands continues to grow, indicating steady access to capital. But its relatively low customer turns suggest that the company must improve operational efficiencies to lower costs.

Due to its narrow focus on premier locations, Highlands’s growth may be limited without a modification in expansion plan. Despite consistent branding across products, Highlands has done little to update its logo/image, and limited work on product development or innovation, hampering its ability to stay fresh and compete with other upscale brands. * External Environment: With few differentiating offerings, Highlands may need to enhance its core competencies of customer service and other aspects of the in-store experience, along with local market knowledge.

Similarly, without trademark protection, the firm is quite vulnerable to imitation. And though Demographic-Social trends such as rising income levels currently favor Highlands’s premium offerings, an economic downturn could be devastating, especially if the firm fails to develop a stronger differentiating factor such as customer service. A. POTENTIAL GROWTH 1. Growth indicators: a. Overview on coffee sector in Vietnam * According to International Coffee Organization, Vietnam’s coffee consumption per capita is currently 0. 7kg per year which is much lower than world average of 1. 3kg. CAGR of domestic coffee consumption of Vietnam is 15% in the last ten years which is much higher than world average of 4%. * Currently Vietnam only uses 9% of its coffee production while other four top 5 coffee exporters (Brazil, Colombia, Indonesia and Ethiopia) use 35% on average. * In 2010/2011, the output of Robusta still dominates total output, accounting for 97%. USDA predicts Arabica output would also increase dramatically due to the extension of cultivated area in some northern and middle provinces of Vietnam. * Vinacafe Bien Hoa remained the leading position with market share of 32. % in 2010, followed by Nestle Vietnam (30. 3%) and Trung Nguyen (18. 2%). * According to Business Monitor International (BMI), Vietnam’s coffee volume consumption increased by 9. 55% in 2011 which nearly equaled to the growth rate in 2010 (10%). Local coffee bean price fluctuated significantly in high price range in 2011. On average, the price saw a 62% increase compared to that of 2010 although it has been in a downtrend since September 2011. The rise of main material has affected negatively coffee processing companies if they did not have an appropriate strategy to purchase and store coffee beans. . Highlands Coffee * As shown in table 1, Highlands Coffee has a dramatic increase in market share, comparing to other chains. While Trung Nguyen dominates the market with a decline in the percentage, Highlands is growing year by year, its share doubles from 3% in 2007 to 6% in 2010. Table 1 –Vietnam Cafe/Bars Market Share by Brand from 2007to 2010 * Highlands is now paying for around 2000 employers, including 25 foreigners doing various tasks, ranging from table service to staff managing, in more than 100 shops across Vietnam. 2008: 50% of the population is under 24, who are increasingly attracted to premium brands and the status accompanying them. 2. Prediction * As the economy is recovering, there is a rise in the nation’s demand for coffee. This also resulted from very good marketing strategies of western style brands such as Highlands, Gloria Jean’s, Coffee Beans & Tea Leaf…, according to an article on www. vietrade. gov. vn. Also, more and more consumers are looking for a brand that offers high quality coffee and service, and consequently, raises their status. This may lead to larger revenue.

Table 2 –Coffee consumption inVietnam from 2005 to 2014 (thousand 60-kilo bags)  | 2005| 2006| 2007| 2008| 2009*| 2010**| 2011**| 2012**| 2013**| 2014**| Coffee consumption | 618| 687| 858| 900| 1,064| 1,101| 1,189| 1,292| 1,420| 1,556| 2009 = 2008-09; Source: USDA, Vicofa, BMI. (*: estimating; **: predicting) * Globalization will bring a myriad of foreign customers into Vietnam, which is the target group of Highlands Coffee. The tourism industry welcomed a total of 5 million international visitors in mid-December 2010, an increase of 1. 32 million international arrivals from 2009, or a 34. percent growth. It is predicted that Highlands Coffee will serve more and more coffee lovers from all around the world, who would like to taste Vietnamese coffee in a western atmosphere. * BMI estimates that Vietnam’s domestic coffee sales volume will be up by 9. 55% in 2012. The market is said to be attractive to investors in future. In July 2011, according to BBC, Starbucks, for the first time, officially announced its plan to enter Vietnamese coffee market in 2013. * According to BMI, Vietnam’s coffee sales are expected to increase by 11. 5% p. a. on average in the next 5 years.

Euromonitor International also expects fresh and instant coffee retail volume sales see a CAGR of 11% over 2010 – 2015 period. * Philippines customers are being more self-aware and acquiring the habit of drinking coffee; for instance, drink coffee after dinner instead of alcohol. As for this market, the situation is rather complicated. On one hand, coffee chains are prospering rapidly across the nation, growing in both size and revenue. On the other hand, Starbucks and other international chains including Seattle’s Best, The Coffee Bean & Tea Leaf and UCC are dominating the market. All considered, Highlands has achieved national reputation, and is having a promising market awaits, urging it to expand outside the country to become an international brand. It is now possessing adequate resources in both capital and labor to aim for higher targets; however, what matters are the strategies: how it allocates them properly in order to achieve its ambition. If the managers are making wise decisions, in the next few years, we would see a Vietnamese coffee brand going worldwide, and maybe challenging other strong contenders. B. STRATEGIES 1. Short-term * In the beginning, Highlands Coffee applied silent strategy.

That is, it did not focus heavily on marketing and promotional campaigns, but instead mostly spent for the rent of shops that are located in giant commercial buildings in big cities. These specific locations brought Highlands such an enormous number of customers that it simply needs no advertisement. Moreover, this strategy helps Highlands avoid rough competitions from other famous coffee brands. * After this, Highlands Coffee continues to claim its position in internal market by upgrading the shops using PDAs in service, regular training for employees, endless effort to maintain and better the coffee quality As the coffee market is getting more and more competitive with the raise of various brands, Highlands Coffee now concentrates on promotion. Consequently, it has proposed many promotional campaigns: * Enjoy Jelly Freeze with Mecure Hotel: From March 14th to May 14th , 2012, buyers of Jelly Freeze at Highlands Coffee shops wereoffered an opportunity to win a three-night stay in a suite at Mercure Hue Gerbera, Mercure Dalat Hotel Du or Mercure Hanoi La Gare. The prizes included breakfast, a round of golf, air ickets and airport-hotel transfers, spa treatment and/or a city tour depending on the Mercure hotel chosen for the winners. * This was a very wise campaign since it benefited both Mercure hotels and Highlands Coffee to further promote their brands and to introduce their products and services to local and foreign guests as well. * Combo bread and coffee: Since September 20th, 2012, customers pay only 49. 000 VND for a set of Vietnamese bread and 2nd Gen coffee. Such tempting breakfast combo has drawn many customers to the shops, especially officers in buildings they are located. Groupon on NhomMua: Customers pay 45. 000 VND for a voucher costs 80. 000 VND. The deal was sold out only after 5 days, attracted approximately 7000 customers to Highlands. * Happy Birthday Highlands Coffee: Coffee lovers only pay 22. 000 VND to enjoy Highlands Coffee. * Free coffee when enjoy Pho 24. 2. Long-term * Minimize its franchise model. Though there has been thousands of businesses want to franchise Highlands Coffee, David Thai still prefers to maintain brand’s image. * Inside Vietnam: Highlands bought Pho 24 to resell to Jollibee simply for money.

In this trade, Jollibee bought 49% of VTI in Vietnam and 60% in HongKong, which cost 25 million USD through Jollibee Worldwide – member of Jollibee Cooperation. Furthermore, VTI also received a loan advance of $35 million to be repaid in 2016 with an interest rate of 5 percent per annum. And from this, Highlands’ intention is believed to be developing more to compete with up-coming rivals from abroad: Starbucks and MacCafe. * Jollibee Foods, known for its fried chicken and hamburgers and also owns bake shops and pizza and pasta restaurant, even outsells McDonald’s and KFC in Philippines.

The company operates a total of 1,931 stores in the country, and 407 outlets abroad. * Bring the brand outside Vietnam: Philippines as the first destination. According to Micheal Lacy, chief executive advisor of Digital Paradise Inc. (DPI), owner and franchise operator of both Highlands Coffee and Netopia internet cafe, this is a potential market for providing non-expensive coffee of high quality with Internet access. For instance, a latte cup is available at the biggest coffee chain for P125 plus another P100 for internet. In the meanwhile,

Highlands’ latte is priced at P99 per cup with free wifi or computer access. Highlands is aiming to give customers in Philippines what they need: the space where they can show up and may also show-off as well as feeling comfortable with free access to Internet. * In Philippines, Highlands Coffee is expected to have about 50 shops by the end of this year, 2012, because DPI has several good locations for it. However, Lacy said, they are not being in places that are too usual or interesting, which avoids competing with other giant rivals like Starbucks. SWOT

Strengths| Weaknesses| Opportunities| Threats| * One of the first brands of special coffee appeared in Vietnam. * Its signature in the flavor of coffee. * Diversification in products * Number of familiar customers. * Good locations * At-the-table service| * Not fit everyone’s taste in Vietnam * Growth is limited without a modification in expansion plan * Limited development or innovation on products * Price and quality unmatched| * People’s raising self-awareness lead to their seeking way to express status. * Young population is attracted to premium brands. Changing style and flavor in drinking coffee. * Growing number of businessmen in Vietnam and from abroad| * Relatively low customer turns * Strong rivals entering the market: Gloria’s Jean; Coffee Beans; Starbucks * Other franchise can expand more shops and outwit Highlands * Imitation (no trademark protection) | RECOMMENDATION According to the data analysis and some observations in the reality, it is obviously that there are three factors that affect the customer’s awareness and the satisfaction level of Highlands Coffee.

Firstly, the expectation of Vietnamese customers and the competitiveness of the other coffee brands, also coffee shops may affect the most. There is one thing very unique of Vietnam coffee market: the suppliers are not simply defined as the seller of the coffee products; they also provide customers with many other services such as beautiful views, internet connection, books, music performance,… In fact, Highlands is not good at providing those kinds of service because it wants to concentrate more on the quality of the products. Obviously, this is a disadvantage for Highlands.

Another concern is that the goal of Highlands is not to impress people just by the “appearance” or the good extra-services, but is to become the most popular coffee chain in Vietnam and to expand to the globe by the best quality of coffee that it have ever provided. Unfortunately, it is definitely not hard for people to find another cup of coffee with the same taste but a lower price in Vietnam. That is the reason why we recommend Highlands should focus more on the promotion programs which help them attract more customers from different occupations and social classes.

For example, “the Happy Hours” when customers can spend less to purchase a product, “the Gift Voucher” by which the customers can be motivated to purchase the next product or “Membership program” and so on, can help a lot. Secondly, occupation obviously has a significant impact on the brand awareness of Highlands coffee. Now, students are the most potential customers, not only the officers. Chatting with friend, studying and relaxing are some activities that they usually do in the coffee shop and Highland can provide a perfect environment for such kinds of activities.

For this reason, we recommend that Highlands should pay more attention to expand their target customer. For example, Highlands should open new stores in universities such as International University, Foreign Trade University, HoaSen University and so on, with more suitable price list. Last but not least, considering about the brand awareness, Highlands also has another problem. Although it can provide customers with coffee in the lower price compared to the other brands such as NYDC, Gloria Jeans, Angel-in-us, many people still describe Highlands coffee as “the upper class person”.

For this reason, to compete effectively with the others, we highly recommend Highlands should pay more attention to their price of products to get more customers’ awareness. For example, Highlands should set a low initial price in order to “penetrate” the market quickly and deeply, so that we can get the awareness of the customers. In addition, other effective ways for Highlands to become more well-known to the customer are advertising on magazine, TV commercials…As the result, these strategies would help Highlands coffee to have strong competitive advantage. CONCLUSION Highlands Coffee is one of the biggest coffee brands in Viet Nam and established in Hanoi by David Thai. It ranks 2nd, only after Trung Nguyen Coffee & now available in Six Big Cities in Viet Nam. Highlands Coffee is also well-known for its contribution to society such as Terry Fox Run and so on. They now attack more foreign customer’s attention as its own brand for the quality and unique. * They aim to keep the brand name go strong with both short-term (Promotion, Silent Strategy) and long-term plan (Diversification Strategy and reach international reputation). Highlands has many strong competitors in both domestic and foreign market such as: G7, Coffee Bean, Gorilla Jeans,…especially Trung Nguyen and also Barriers to entry from World Economic Status, Supply Source where climate, quality and even government policies are involved. * Export – Import policies are changing to be compatible with the economic integration of Vietnam into the world economy. * They should focus more on their promoting activities to spread their brand name to customers at different ages, showing that they are never stop growing on creating new good products, delicious dishes and always be passionate for what they are doing.

Cite this Highland Coffee Case Study

Highland Coffee Case Study. (2016, Oct 01). Retrieved from https://graduateway.com/highland-coffee-case-study/

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