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Challenges in Vietnam
Starbucks had long eyed on the Vietnamese market; after all, Vietnamese were well
known in the world to be coffee lovers. Besides, entry into the Vietnamese market
would mean Starbucks has access to one of the world’s finest coffee beans supply.
However, success in Vietnam will be difficult. Many have predicted that Starbucks
will lose out to Trung Nguyên in the home market even before it enters Vietnam.
Conclusion
For Dang, regional dominance is only the beginning. He is already casting his eye
about the whole world. His company is now negotiating with partners in 15 countries,
including the United States, Germany, Taiwan, Russia, Hong Kong, Australia and
Canada, to offer the franchise, he said.
For the time being, Dang plans to stop franchising within Vietnam
and concentrate instead on setting up 30 larger, luxury cafes in
Hanoi and Ho Chi Minh City which he believes would outshine
Starbucks if, as seems inevitable, the coffee giant arrives in his
country. "We see Starbucks as a potential competitor in Vietnam
and we are not afraid of competing with Starbucks," he said.
Love it or hate it, the trend toward globalization is here to stay.
What seems clear is that Vietnam's economy needs more
globalization. Things are booming here. Vietnam
grew 7 percent last year and similar growth is
expected this year. That means Vietnam is Asia's
fastest-growing economy after China. McDonald’s is
set to enter Vietnam by 2012. An identified source
has said that “It's sure that there will be at least one
McDonald's in Saigon by the end of 2012."
Starbucks will be next. The company seems set to
meet Trung Nguyên in Vietnam. But it seems Starbucks will be in for a tough fight if
it were to enter the Vietnam market.
References :
Tim Larimer, MBA ’04, Chasing Starbucks Dreams: Trung Nguyên and its Global
Expansion, Columbia Business School, Columbia University in the City of New York.
Tini Tran (June 24, 2003), Vietnam Peddles Coffee Chic With Trung Nguyên Cafes,
available at http://www.greenspun.com/bboard/q-and-a-fetch-
msg.tcl?msg_id=00AyR7
William Pesek Jr., (December 2, 2003 ), Starblacks, Not Starbucks, Booms in
Vietnam, Bloomberg.com