Trung Nguyen Coffee - Innovation

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MODULE ASSIGNMENT COVERSHEET: Business Enterprise and InnovationInnovation Report (Group Project)

MODULE CODE

MBA 411

Student names

Student Numbers

Mr. Bùi Công Trường Mr. Nguyễn Trần Khoa Mr. Nguyễn Xuân Khang Ms. Vũ Thu Huyền Mr. Bùi Hoàng Phước

S 1211959 S 1212356 S 1213548 S 1213544 S 1213786

Module Tutor: Module Title:

Ronald Ainsbury BUSINESS ENTERPRISE & INNOVATION

Submission Date: December 17 , 2012 Word Count: 3,050 words (excluding references)

1

INNOVATION REPORT: TRUNG NGUYEN COFFEE

CONTENTS

I- INTRODUCTON II- INNOVATION SUCCESS OF TRUNG NGUYEN 1- The story of a family business 2- Innovation success III- ASSESSMENT OF INNOVATION MANAGEMENT

3 3 3 5 7

1- SPOTS Analysis 2- Porter’s Five Forces Analysis 3- Some possible solutions

7 9 15

IV- CONCLUSIONS V- REFERENCES

17 18

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I- INTRODUCTION Any organization, although business, social or political, cannot sustain and grow without product, service or process innovation. It is the core value that any organization should not ignore. The assessment of innovation of an organization may reveal the capacity of its survival and growth. The innovation, however, is not only some individual events but also an endless process, from incubating intention, generating ideas , selecting the good ones, implementing them, creating and capturing core value and finally managing them. The process is also from the incremental innovation to the radical innovation (Joe Tidd & John Bessant, 2011). The most important thing is the way to manage the innovation process of an enterprise in order to keep up with any change of the market. Trung Nguyen Group is a best known Vietnamese coffee brand name where the CEO and President has been called “Coffee King” starting up coffee processing business from empty hands. With the above reasons, Trung Nguyên Group has been chosen as a sample enterprise to be assessed through its innovation from start-up stages to perspectives.

II- INNOVATION SUCCESS OF TRUNG NGUYEN 1- The story of a family business In 1996, the student guy Dang Le Nguyen Vu quitted medical college to pursuit his dream of coffee processing business with empty hands. The business aspiration came from his poor student group with great ambition to become rich entrepreneurs in high lands where most nationwide coffee trees have been cultivated (Dang Le Nguyen Vu, 2004). He has ever wondered why Vietnamese coffee farmers for export have still been poor while some foreign 3

entrepreneurs abroad without coffee plantation have got rich from coffee-processing business ? And why Vietnam has just exported raw coffee beans instead of processed coffee beans? (Làng cà phê, 2009). Thus he and his fellow students joined hands to make a business start-up of processed coffee in a high land as a family business with borrowed capital. After two year ups and downs in the home land, they ventured into Ho Chi Minh City market. In 1998, when opening the first coffee shop in Ho Chi Minh City, they made an amazing breakthrough in making a great impression on customers by serving free brewed coffee within first ten days and selling ground coffee in packages under Trung Nguyen brand name. On the new and potential market like Ho Chi Minh City, they made better differences not only in service style but also special taste of their coffee from others. Until now, Trung Nguyen Group includes 10 member companies and over 1,000 coffee shops including franchises in the national network of 123 distributors. They have over 2,000 full-time members of staff and over 15,000 nationwide members in their franchise network. Their products have formally passed rigorous standards to be presented at the leading supermarket systems in America and E-mart in Korea. Trung Nguyen’s products have been exported to 60 countries all over the world and 8 coffee shops opened in the United States of America, Japan, Singapore, Thailand, China, Poland, Ukraine and Cambodia. Globalization...
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