The different strategies employed by Starbucks to enter into Vietnam market

Up to now, the foreign coffee chains actually brought a new stream of wind in Vietnam which have many benefits for coffee industry. Most of experts believe that the key to success are location, differentiation in products, services and strategies. However, until now there is no research whatsover to assess the state of coffee consumption in Vietnam as the average coffee per capita consumption of Vietnam or consumption trend. Thus this report will conduct research about Starbucks brand position in current trend or which flavor does customer prefer thereby developing strategies for Starbucks.

The most detail that this report is going to analyse how Starbucks performs in Vietnam market. In order to evaluate this performance via survey and consider what needs to be improved for the strategies. A good tool for evaluating is SWOT analysis.

Strengths · Entered into Vietnam market with strong brand image · Global supply chain · Expectation of young people · Best quality, rich taste and standarlization	Weaknesses · High price · Products can be imitated · Self-service · Wifi is limited (use in 1 hour)
Opportunities · Products diversification · Cooperation or association with other companies · The majority of young people are willing to absorb new and modern consumption trends · Growth in GDP in Vietnam market	Threats · Compete with some famous coffee brands present in Vietnam · The autonomy demands of coffee shops

According to Megan, it is said that one of the major problems for foreign coffee firms in Vietnam today is the consumption of people. Coffee consumption in the domestic market will increase as GDP and population increase leading to spending on food and drinks like coffee will also increase (Francic, 2018). Understanding the great potential of the coffee business market, more and more domestic and foreign brands appear in Vietnam such as Highlands, Starbucks, Effoc and so on. Traditional Vietnamese-style coffee including black coffee and cafe latte are the most popular choices. By capturing the preference of Vietnamese people, Starbucks has launched more modern choices such as cappuccino, mocha and frappe and are occupying approximately ¼ of coffee segment sales. It is also a small part of strategy when Starbucks enters into Vietnam market.

On the other hand, while Vietnamese coffee chains are expanding rapidly, even in other countries, Starbucks seems to be going at a slower pace than expected. Up to now, the number of Starbucks stores in Vietnam only stops at 38. Meanwhile, there are over 100 business locations in each region in Thailand, Malaysia or Indonesia. A worrying problem for Starbucks when they invest that is afraid to adapt to the culture and lifestyle in Vietnam. The mentality of Vietnamese youth increasingly affirmed themselves with external values such as beautiful cars, new phones and of course enjoying coffee in a global brand store is understandable. In fact, it often take a long time to adapt in Vietnam. The urbanization process and the flourishing development of Western-style cafes are expected to contribute significantly to this trend. In the middle of a series of coffee chains promoted in Vietnam, not every coffee shop is really quality, giving people to enjoy the typical coffee tastes as well as incentives.

Starbucks has penetrated in Vietnam market in 2013 but it being stalled when reached to Vietnamese consumers. Therefore, to compete with the brands that have longer time in Vietnam like Highlands, Phuc Long must gradually change to satisfy the market requirements and customer’s demands. While recognizing the growth potential in Vietnam, it was the time for Starbucks to seek opportunities for developing new products. They need to invest faster and start to set up strategies before global competitors gain the stand in market.