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TRUNG NGUYEN CORPORATION

AND STRATEGY PENETRATE INTO


PHILIPPINES MARKET
GROUP 4
COMPANY BACKGROUND

1996 Establishment of Trung Nguyen Coffee Company

2000 Over 100 Trung Nguyen coffee shops were set up in Vietnam

2002 Trung Nguyen trademark was established in Singapore and


Thailand

The company has establish three factories where manufacture


mixed coffee, drip coffee, and a range of kinds teas with
regional branches at Ban Me Thuot, Binh Duong and Lam
Dong

TN has established the franchised shop system


nationwide and also in Japan, Thailand, Cambodia,
Malaysia, China, and outside of Asia opened in
Germany and US
ANALYZING PHILIPPINES COFFEE MARKET BY
USING 12C FRAMEWORK

1. Country:
- In the Philippines, coffee has a history as
- Philippines is
rich as its flavor. The first coffee tree was
the world's 12th most populous country
introduced in Lipa, Batangas in 1740 by a
- The national language is Pilipino but
Spanish Franciscan monk.
English is both spoken and understood
- The Philippines is one of the few countries
throughout the country, especially in
that produces the four varieties of
business negotiations and in the government
commercially-viable coffee: Arabica,
- The national economy of the Philippines is
Liberica (Barako), Excelsa and Robusta.
the 48th largest in the world, with an
Climatic and soil conditions in the
estimated 2009 gross domestic product
Philippines – from the lowland to mountain
(nominal) of $161 billion
regions – make the country suitable for all
- The economy of the Philippines is the 4th
four varieties
largest economy in South East Asia and the
- Philippines is raked the 15th in 2005 Top
35th largest economy in the world by
twenty green coffee producers (FAO
purchasing power parity according to the
World Bank in 2009 estimate)
ANALYZING PHILIPPINES COFFEE MARKET BY
USING 12C FRAMEWORK (cont)

2. Concentration 4. Choice
- - Philippines domestic market can supply rich
Target Philippine white collar workers –
officer special in call centers 24-7 (Many coffee beans.
- International competitors: STARBUCKS.
foreign enterprises located customer care
center in Philippines) aged between 25 – 40. Starbucks has 2 main products: Coffee shop
- Second target: 18 – 24 young Filipinos and instant coffee
- The Philippine Coffee Board have a lot of
(students and foreign-students)
exotic coffees and that is the way to present
3. Culture our products
- - Competitive strengths and weaknesses
Philippine culture is a combination of Eastern and
• Strengths: Starbucks: penetrate into the
Western cultures. The Philippines exhibits aspects
found in other Asian countries with a Malay market sooner; powerful finance potentiality.
heritage, yet its culture also displays a significant Understand the Filipino’s gourmet coffee (for
amount of Spanish and American influences. small coffee shops of The Philippine Coffee
- Philippines had long had a thriving coffee- Board)
• Weakness: TRUNG NGUYEN has cheaper
drinking culture with a populace that favored
coffee over tea, and this was becoming stronger as coffee input from Vietnam. Starbucks has
society modernized import inputs from Africa and South America
with higher transportation costs
ANALYZING PHILIPPINES COFFEE MARKET
BY USING 12C FRAMEWORK (cont)
5. Consumption 7. Commitment
- Coffee is considered a high-value crop in both - No restriction on trade regulation.
the local and international trade markets . - Low barriers for new entrant
- Most Philippines drink coffee, but it's usually
that freeze-dried instant stuff. So, Demand for 8. Channel
coffee was buoyed by the increased popularity - Specialist coffee shops in the Philippines are
of products focusing on convenience, as the expected to continue growing in coming years.
lifestyles of Filipino consumers are evolving
to become busier and more time-pressed . 9. Communication
- The Philippines today consumes about 65,000 - 2009: Internet users in the Philippines is
tons of coffee a year but is only able to 24,00,000 ~ 24.5 % population (Nielsen)
produce a maximum of 30,000 tons, providing
a huge market opportunity to coffee farmers. 10. Capacity to pay
- Pricing: put the premium price, fluctuate
6. Contractual obligation around: 1,810-1,945 USD/ton
- The Law of obligations and contracts is the 11. Currency
body of rules which deals with the nature and - Philippine Peso PHP/USD = 43.71662
sources of obligations and the rights and
duties arising from agreements and particular 12. Caveats
contracts – Republic Act 386 – Civil Code - Philippine Coffee production in MY 2010
of the Philippines. (which starts in July 2009) is projected to
decline by 2-3 percent as a result of El Nino
CONCLUSION

Philippines market is potential to Trung


Nguyen Coffee’s long term growth
prospects.

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