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The usefulness of the strategy approach recommended for Trung Nguyen Custom Essay

The usefulness of the strategy approach recommended for Trung Nguyen Custom Essay Evaluate the strategy report and its development by your group. This task has two essential components. a. You must discuss the usefulness of the strategy approach recommended for Trung Nguyen (500 words). —————————– “Trung Nguyen Executive Strategic Report” There is good potential business opportunity for invading the US coffee market as well as the global markets, due to high demand, especially for firms that have the knowhow like Trung Nguyen. To build a strong strategy for Trung Nguyen, consideration must be given to important facts about the business within Vietnam and globally. The product is called Black Gold, since coffee is the second most traded commodity in the world and the only commodity exceeding this rank is not in the same industry. In fact, that sole commodity is oil, which highlights just how huge the coffee business truly is. The EU is the biggest importer of coffee in the world, followed by the US. This gives a clear indication of the markets on which to focus. In East Asia the biggest market is Japan. Vietnam is considered a very small player for coffee consumption in comparison. In Vietnam, coffee consumption has been continuously on the rise. In 1990, Vietnam consumed 113,000 bags of coffee growing at about 350% every 10 years. As of 2014, it has continued to grow to 2,025,000 and the forecast is that it will continue to grow by about 350% to 2020. Even with coffee consumption on the rise, Vietnam continues to be in second place behind Brazil in coffee exports with Columbia third. The opportunities, therefore, are vast in the internal, regional and on the global scale. Despite the above, coffee prices are constantly dropping and this is the main reason why big coffee retailers like Starbucks invested in Research & Development and now offer variations of coffee creamer such as hazelnut and french vanilla, which are priced higher and have healthy margins as they are considered an upgrade to the traditional coffee being served. As a strategy building start up, Trung Nguyen must concentrate on its competitive advantage as a focal point. This will ensure a strong base for future business in order to compete with the world leaders in the markets, such as Starbucks etc. The drive should be a combined strategy between Outside–In and Inside–Out which will enhance the position both internally and externally; a blended approach to strategy by incorporating both an environmental and market based (outside-in) focus, as well as a resource based (inside-out) focus towards strategy formulation. The former, outside-in approach, will allow Trung Nguyen to focus on “SWOT”, the strengths and weaknesses of its assets relative to its competitors which will potentially prepare the firm for: threat to new entrants and substitutes, industry rivalry and bargaining power of buyers and suppliers. The latter, inside-out approach, will complement the former by focusing on making the coffee product inimitable, identifying the firm’s unique resources and exploiting them, and deciding in which markets these resources can earn the highest gains. Recommendations: 1. Invest in Research and Development: – The coffee industry is more than just coffee drinkers. People enjoy it for the experience. 2. Leverage Origin & Background: – The Asian Market is loyal and proud of its heritage, and will thereforesupport local brands versus brands from the west, as long as the quality and experience are protected. 3. As a one man decision company, taking decisions and implementing strategies are easier and faster. 4. Since the company is still small, adopting new ways of working and building a strong cultural base that grows as the company expands is achievable. 5. With no major expansions abroad, it should be simple to resolve copyrights issues and clean up existing operations with businesses using the Trung Nguyen name but are not aligned with their strategy and service. 6. Entrepreneurs worldwide are always seeking new concepts and businesses to explore. The advantage exists to choose strong partners when expanding to new regions and countries. 7. The strategic focus is on lowering internal costs to generate margins that are far greater than the industry average. This overall strategy puts emphasis on: • achieving economies of scale • scope and experience • high volume production • close monitoring of all operating costs • establishing parameters within which the operation must function and ensure strict adherence by staff and stakeholders • developing branding –standardize the look of every operation, both inside and outside and withdraw the use of the Trung Nguyen name from operators who use other brands as well • creating vending machines to offer Trung Nguyen’s coffee in hotels and other facilities to expose the brand • providing packaged Trung Nguyen coffee in supermarkets, hotels and small shops at a cost that would make it a viable option for shoppers • TrungNguyen could offer shares, pension and health care benefits to staff as incentive for them to offer optimal customer service Trung Nguyen is strong and has the muscle to work on parallel strategies for specific parts of the expansion project. This supports any business opportunities from dissolving or being acquired by competitors where it becomes even more difficult and more expensive to expand or compete with competition. Therefore our expansion recommendation should be that we expand regionally within 12 to18 months and plan to hit the US Market and EU within the next 24 to 30 months while working in parallel with our strategy.]]>

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