G4 - Trung Nguyen Legend

Introduce the company briefly.

● Founded in 1996 in Buon Ma Thuot City, Vietnam, Trung Nguyen has
expanded to over 60 countries worldwide.
● Trung Nguyen Legend holds the top position in Vietnam's coffee industry,
boasting high-quality coffee production and trading, with approximately 17
million Vietnamese households purchasing their products.
● Beyond manufacturing coffee and tea, Trung Nguyen also provides
coffee-related services through cafes and chain stores across Vietnam and
globally.
● Utilizing a franchise business model, Trung Nguyen Legend has established an
extensive network domestically and internationally, including in the USA,
Japan, Singapore, Thailand, China, Cambodia, Poland, and Ukraine, to promote
its unique beverages.

5 strengths of the company.

● The material is the best strength of Trung Nguyen Legend as Vietnam is the
largest coffee exporting country.
● With the strength of doing business in their own country; therefore, they get the
easy way to buy the good coffee beans.
● To prevent direct influence on supply that does not satisfy both quantity and
quality due to the loss of raw material purchases by buying coffee beans from
other agencies, Trung Nguyen Legend has invested and managed farmers'
farms. As a result, this is the good opportunity for allowing Trung Nguyen
Legend to be more proactive in its raw sourcing.
● Trung Nguyen Legend utilizes the franchise business model by establishing a
vast franchise network both domestically and in international markets such as
​USA, Japan, Singapore, Thailand , China, Campuchia, Poland, Ukraina.
● With this business model, it not only spreads the traditional drinking to other
countries, but it also boosts the brand exposure.

5 weaknesses of the company.

● The franchise system is inconsistent and too noisy: Compare Trung Nguyen
stores in different areas in terms of interior design, menu, and brand image to
see the inconsistency and lack of professionalism in the experience. customer
experience
● Continuous change of personnel: The continuous change of personnel makes
Trung Nguyen gradually lose the stability and trust of the people working in the
company.
 ● Price differentiation, hierarchy customers: The goal of this strategy is to
maximize profits, but this strategy is not suitable for our current widespread,
difficult-to-control franchise system, and the result is uncontrollable. Get your
own chain stores.
● Massive franchise system: Many levels of shops, and many choices for many
customers have created the image of Trung Nguyen without a specific portrait
other than the sign with the Trung Nguyen logo in front of the gate.
● Continuous changes in signage systems, colours, designs, and packaging: Make
the already slow operation of the system even more confusing and as a result,
there are many other forms of identification on the market. each other makes it
impossible for customers to recognize which is Trung Nguyen furniture, which
is fake, which is Trung Nguyen franchise.

IFAS table.

Insights discussion.
● Key strengths
○ Vietnam being the largest coffee exporting country (0.58) gives Trung
Nguyen an abundant supply of high-quality domestic raw materials,
which is crucial for a coffee brand.
 ○ Their proactive investment and management of farmers' farms (0.51)
ensures reliable sourcing of raw materials and potentially higher quality
control.
○ The franchising strategy has been highly effective (0.35) in rapidly
expanding Trung Nguyen's presence across Vietnam and building brand
recognition.
○ Strong brand reputation (0.32) as a famous, prestigious brand with a
long history in the Vietnamese coffee industry.
○ Wide distribution across channels like supermarkets, wholesalers, retail
stores, and franchise outlets (1.54) enables Trung Nguyen to reach a
broad consumer base.
● Key weaknesses
○ The massive franchise system (0.42) can lead to inconsistencies in
product quality, service, and overall brand experience across different
franchise locations if not properly managed.
○ Inconsistencies in pricing, coffee quality, service, and investment levels
(0.33) between different franchise stores can damage brand perception
and customer loyalty.
○ Brand protection issues (0.12) related to copyright registration
challenges pose risks to the brand's identity and equity.
○ Limited innovation (0.2) in product development and marketing may
hinder Trung Nguyen's ability to adapt to evolving consumer tastes and
competition in Vietnam's dynamic coffee market.
● Strategic implications/recommendation
○ Leverage strengths like domestic raw material supply, franchising
success, brand equity, and distribution reach to maintain market
leadership in Vietnam.
○ Address franchise inconsistencies through stricter quality control,
training, monitoring, and enforcement of brand standards across all
franchise locations.
○ Invest in product innovation, marketing strategies, and consumer
research to stay ahead of changing market trends and consumer
preferences in Vietnam's increasingly competitive coffee landscape.
○ Consider expanding franchising and distribution strategically to
international markets, capitalizing on the brand's reputation and
Vietnam's coffee production strengths.
References

● N. L. H. (2022). Potential Distribution of Vietnamese Coffee in the Finnish

Market–Case Trung Nguyen Legend.
● https://mekongsoft.com.vn/tin-tuc/kien-thuc-kinh-doanh/mo-hinh-swot-cua-ca-
phe-trung-nguyen-a1063
● https://careerviet.vn/vi/talentcommunity/nhan-dien-nhung-bat-on-cua-thuong-h
ieu-trung-nguyen.35A4ED7F.html
● https://cafeland.vn/doanh-nhan/doanh-nhan/trung-nguyen-va-nhung-bai-hoc-lo
n-ve-bao-ho-thuong-hieu-24327.html
● https://vneconomy.vn/vietnam-becomes-largest-coffee-exporter-to-spain.htm#:
~:text=Vietnam%20has%20become%20the%20largest,Ministry%20of%20Indu
stry%20and%20Trade.
● https://thanhnien.vn/sieu-du-an-nong-nghiep-ky-3-nguyen-lieu-ca-phe-chuan-q
uoc-te-185453822.htm
● https://trungnguyenlegend.com/lich-su-phat-trien/
● https://trungnguyenlegendcafe.net/san-pham/
● https://trungnguyenlegend.com/trung-nguyen-legend-thuong-hieu-tinh-thuc/
● https://cafeland.vn/doanh-nhan/doanh-nhan/trung-nguyen-va-nhung-bai-hoc-lo
n-ve-bao-ho-thuong-hieu-24327.html