Coca-Cola Vietnam: Industry, Competitors, and Business Functions

This report provides a comprehensive analysis of Coca-Cola Vietnam, beginning with an overview of its history both globally and specifically within Vietnam. It delves into Coca-Cola's activities in Vietnam, including its product lines and market performance, supported by financial data and market share information. The report then examines the business environment, including the beverage industry in Vietnam, Coca-Cola's competitors (PepsiCo and Tan Hiep Phat), and the growth of the business environment. It explores the organizational structure, advantages, and disadvantages of the functional structure within Coca-Cola Vietnam. The report concludes with an analysis of Coca-Cola's financial performance, market position, and key business functions, providing a detailed insight into the company's operations within the Vietnamese market. The report also includes information about the vision and mission statements of the competitors and stakeholders.

Pearson Education 2020
Higher Education Qualifications

Pearson Education 2020
Higher Education Qualifications
TABLE OF CONTENTS
1. Introduction ......................................................................................................................
1.1. An overview of the history of Coca-Cola ................................................................... 1
1.2. History of Coca-cola Vietnam ................................................................................... 1
1.3. Coca-Cola’s activities in Vietnam ............................................................................. 1
1.4. Organization sizes and legal forms in Vietnam .......................................................... 4
2. Business environment of Coca-Cola Vietnam ..................................................................................
2.1 The Coca-Cola industry ........................................................................................... 5
2.2 Sub-sector in Vietnam. ............................................................................................. 7
2.3 The growth of Business environment: ....................................................................... 8
3. Two selected competitors of Coca-Cola Vietnam ...............................................................................
3.1 Background details and activity of PepsiCo ............................................................. 11
3.2 Organizations sizes and legal forms of PepsiCo in Vietnam ...................................... 12
3.3 Background details and activity of Tan Hiep Phat ................................................... 13
3.4 Organizations sizes and legal forms of Tan Hiep Phat .............................................. 14
3.5 Vision statement and mission statement. ................................................................. 14
3.6 Information their stakeholder ................................................................................. 15
4. Business functions of Coca-Cola Vietnam ......................................................................................
4.1 Organizational chart of Coca-Cola Vietnam ............................................................ 16
4.2 Advantages of functional structure ......................................................................... 18
4.3 Disadvantage of functional structure....................................................................... 18
4.4 The cooperation between departments .................................................................... 18
5. Conclusion ........................................................................................................................
REFERENCES .....................................................................................................................

Pearson Education 2020
Higher Education Qualifications
TABLE OF FIGURES/PICTURES
Picture 1: Revenue of beverage brands in Vietnam 2016-2019 ........................................... 2
Picture 2: Performance indicators of Coca-Cola Vietnam 2016-2019 ................................ 3
Picture 3: Vietnam beverage market share chart in 2017.................................................... 4
Picture 4: Business activities of Coca-Cola Vietnam (Unit: billion VND) .......................... 6
Picture 5: Beverage market 2017.......................................................................................... 10
Picture 6: The organizational chart of Coca-Cola Vietnam company .............................. 17

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1. Introduction
1.1.An overview of the history of Coca-Cola
Coca-Cola Invented by John Stith Pemberton in 1886. Dr. John S. Pemberton began making
a new non-alcoholic beverage. He came up with a pleasant-tasting syrup that could be blended
with carbonated water and offered as a refreshing drink at a freshwater fountain. Coca-Cola
is one of America's largest corporations and the world's largest beverage manufacturer and
distributor, with over 2,800 products distributed in over 200 countries. The company's
headquarters are located in Atlanta, Georgia (The Coca-Cola company, 2021).
1.2.History of Coca-cola Vietnam
Coca-Cola was first introduced in Vietnam in 1960. After the US lifted the trade embargo, in
February 1994 Coca-Cola returned to Vietnam and started the business. The first joint venture
between Coca-Cola Indochina and Vinafimex was created in August 1995 and was located in
the north. Due to the partnership between Coca-Cola and Chuong Duong in Vietnam, the next
joint venture, Coca-Cola Chuong Duong beverage firm, was formed within a month. Another
joint venture appeared in the Central area in January 1998. This is the last joint venture that
Coca-Cola Indochina in Vietnam, with a partnership with Da Nang Beverage Company. In
June 2001 Coca Cola beverage companies in 3 regions were merged into 1 and have the middle
management of Coca-Cola Vietnam with head office in Thu Duc District, Ho Chi Minh City.
Coca-cola Vietnam is named Coca-Cola beverages Vietnam limited liability company. Coca-
Cola has three manufacturing sites in Vietnam, located in Hanoi, Da Nang, and Ho Chi Minh
City.
1.3.Coca-Cola’s activities in Vietnam
Coca-Cola Vietnam with the orientation to become a comprehensive, consumer-oriented
beverage company, the company constantly improves and provides a variety of quality and
diversified beverages, including product lines. low sugar and no sugar. Coca-Cola, Coca-
ColaLight, Coke Zero, Sprite, Fanta, Minute Maid Nutriboost, Minute Maid Teppy,
Schweppes, Dasani, and Aquarius are among Coca-beverage Cola's brands in Vietnam.

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Capturing the trend of customers in Vietnam, Coca-Cola diversified its products with fruit
juices, teas, coffees and zero-calorie drinks. According to Mr. Sanket Ray, Managing Director
of Coca-Cola Vietnam. Coca-Cola Vietnam had a good year in 2017. Coca-Cola has
completed its $300 million commitment for 2013-2016 and announced a new investment of
$285 million in its manufacturing units in Hanoi, Da Nang, and Ho Chi Minh City for 2017-
2020. Overall, as a total beverage company with new innovations for customers, Coca-Cola
Vietnam has achieved steady growth and is poised to grow even stronger in the coming years.
(Vietnambiz.vn, 21)
Picture1: Revenue of beverage brands in Vietnam 2016-2019

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Coca-revenue Cola's has continually increased by trillions of dollars per year in recent years.
Coca-income Cola's in 2016 was VND 6,872 billion, which climbed by VND 346 billion to
VND 7,218 billion in 2017. Coca-Cola Vietnam's revenue in 2019 was VND 9,297 billion, up
9% from the previous year (Vietnambiz, 2021).
(Vietnambiz.vn, 21)
Picture 2: Performance indicators of Coca-Cola Vietnam 2016-2019
However, this business only recorded a negligible profit. Despite a steady increase in revenue,
this unit's declared profit more than halved to VND 227 billion in 2017. During the years 2018
and 2019, the company earned 549 billion dong and 812 billion dong, respectively. However,

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in 2019, the profit/revenue margin (ROS) was only 7.3 percent, which was much lower than
other companies in the same industry (Vietnambiz, 2021).
1.4.Organization sizes and legal forms in Vietnam
The Coca-Cola Corporation is the largest beverage company, as well as the world's leading
soft drink manufacturer and marketer. To reach the top of the soft drink business, Coca-Cola
used a number of technologies, producing new technologies and paradigms that burst the
status quo like a soda bottle cap. Coca-Cola perfected Coke as a beverage and used technology
to promote it over the world. Over the last decade, the Coca-Cola Company's net operating
revenue and operating profitability have fluctuated. In Vietnam, Coca-Cola entered the
Vietnamese market in 1994. After decades of investment in the Vietnamese market, two
foreign-owned companies, Coca-Cola and Pepsi, now control nearly the entire market for
carbonated soft drinks. Tan Hiep Phat is the only company with 100 percent domestic capital
that is still dominant in the non-gas beverage segment.
(Vietpress.vn, 2018)
Picture 3: Vietnam beverage market share chart in 2017 (Alcohol-Beverage Association)

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According to the Alcohol-Beverage Association, Coca-Cola currently has a market share of
41% in the beverage industry. PepsiCo owns 22.7 percent, Tan Hiep Phat 25.5 percent, and
other small firms control the remaining 10.5 percent. The non-alcoholic beverage industry in
Vietnam is highly interesting to investors, according to the chairman of the Association of
Alcohol - Beverage, because major nations such as France, Japan, and others estimate a 2%
annual growth rate in the home market. In recent years, Vietnam has maintained an
exceptional growth rate of 6-7 percent.
There are three main types of business are: sole trader, limited company and partnership. The
different between the sole trader, limited company and partnership. Sole trader is a sole trader
is a self-employed person who owns and runs their own business as an individual (Johnathan
Korchak, 2021) A limited company (LC) is a type of business entity that restricts the amount
of risk taken on by the firm's stockholders (ADAM HAYES, 2020). A legal agreement
between two or more persons to manage and operate a firm and share profits is known as a
partnership (CAROL M. KOPP, 2021). Based on 3 definitions of sole trader, limited company
and partnership, Coca-Cola Vietnam is a limited company with 100% foreign investment.
2. Business environment of Coca-Cola Vietnam
2.1 The Coca-Cola industry
Coca-Cola is one of the largest beverage industries in the world. The Coca-Cola brand accounts
for about 75% of the Company's total beverage sales.

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(Vietnamnet.vn, 2021)
Picture 4: Business activities of Coca-Cola Vietnam (Unit: billion VND)
Looking at the business performance data of Coca-Cola Vietnam in this period, Coca-Cola
Vietnam's sales has grown at a compound annual growth rate (CAGR) of roughly 23.06
percent.Assuming this business maintains the above growth rate, our estimate in 2014 this
company will achieve revenue of nearly 6,000 billion dongs (TriThucTre, 2015).
• Definition beverage industry: Beverage industry is the production of beverages and
ready-to-drink products e.g energy drinks, bottled water, soft drinks, tea products. This
industry consists of two main categories alcoholic and non-alcoholic. The alcoholic
beverage industry includes wine, wine and beer. Non-alcoholic beverages include
syrup-based soft drinks; soft drinks and bottled water and canned bottled juice....
• Coca-Cola's main competitors: Coca-Cola is a famous brand around the world in the
beverage industry. As society develops and technology becomes more modern, more
and more famous brands in the beverage industry are developing strongly. They are
ready to compete fairly with Coca-Cola. This makes it difficult for Coca-Cola to sell
its products. Coca's direct competitors are Pepsi products of PepsiCo and THP.
• Coca-Cola's target customer: Coca-Cola targets every customer, segmenting them
mainly based on age and income. The main market that Coca-Cola wants to target the

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most is younger people in the 10-25 age group. This is the most potentially lucrative
age group that Coca-Cola wants to target. Perfect segmentation has been the decisive
factor for Coca-Cola's success until now. In addition, the company targets universities
and high schools where many students and students are concentrated. Coca-Cola also
makes products for dieters, addressing the elderly segment, considering people with
diabetes, obesity, people 40 years of age and older. The firm sells its product in a
variety of sizes and packaging at various price points, making it accessible to students,
families, and the middle class.
• Industrial structure of Coca-Cola: When there is a large number of sellers and a
large number of buyers in a market, that market is regarded as a perfectly competitive
market or industry. This is because there are large numbers of buyers and large
numbers of sellers in this market. Coca-cola is a beverage industry in which there are
many competitors such as Pepsi, Neste, Dr.pepper...They compete on products on
strategies and prices to attract customers, generate profits for the company. Although
the ingredients and flavors of their products are very similar, many consumers swear
by one brand over the other. These companies offer their products in a wide variety of
flavors and variants.
2.2 . Sub-sector in Vietnam.
Coca-Cola Vietnam is a private sector. The private sector is the component of the economy
that is operated for profit by individuals and businesses rather than by the government. As a
result, all for-profit firms that are not owned or run by the government are included (Private
Sector Definition, 2021). Coca-Cola Company invests in the Coca-Cola Vietnam system in
order to expand the business, make profits, and construct new infrastructure in order to support
robust, long-term growth and talent development in the area. local. The manufacturing and
distribution capacity of the Coca-Cola Vietnam system has been increased. Local businesses
will benefit from the construction of new filling lines and the installation of new cold drink

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coolers, which will assist improve beverage sales. The voluntary sector is defined as
organizations whose primary goal is to make a positive social effect rather than make a profit.
The volunteer sector differs from the private sector in that it is not governed by local or national
governmentsa. With the public sector being the part of the overall economy of the Country that
is controlled by the Government or various Government agencies. With 3 definitions of the
private, public, and voluntary sectors, it can be seen that Coca-Cola Vietnam is in the private
sector. Coca-Cola regularly invests in sustainable development to grow and generate profits.
It is profit-driven primarily, and it is not owned or operated by the government. The
characteristics of Coca-Cola Vietnam are not suitable for the public sector and voluntary
sector.
2.3 The growth of Business environment:
Microenvironment of coca-cola: The microenvironment refers to the internal elements that
influence corporate operations. Employee interactions, work environment, and motivating
factors are among these elements. Competitors, employees, customers, shareholders, suppliers,
and the media all have a role in the company's microenvironment. Coca-Cola has amassed a
sizable consumer base in a variety of domestic and foreign markets. Coca-Cola has segmented
the market differently to attract customers and increase sales. Regarding the five-force model,
the five force includes 5 factors bargaining power of suppliers, bargaining power of
buyers/customer, threat of new entrants, threat of substitutes, competitive Rivalry. For Coca-
Cola, the two factors threat of substitutes and Competitive Rivalry are the most important.
+ Threat of substitutes: Coca-Cola's main substitutes are beverages produced by Pepsi, fruit
juices, energy drinks and hot drinks. The substitutes are generally of good quality. As a result
of these factors, substitute products pose a significant threat.
+ Competitive Rivalry: Two major players in the soft drink industry are Coca-Cola and Pepsi.
The two major corporations are roughly the same size, and their products and strategies are
similar. Both brands invest heavily in marketing and promotion. The difference between these

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two brands is very low. Therefore, the battle between Coca and Pepsi competing on price and
market share is very fierce
Macro environment of Coca-Cola: A company's macro-environment contains a number of
external elements that influence the organization's policy rules. Government policies, inflation
rates, import and export management, foreign exchange rates, changing demand and supply
conditions, technological and legal considerations are all examples of such factors. Coca-Cola
has reacted positively to a variety of external factors in order to boost its international market
share. Regarding the Pestel model, the pestel model includes 6 factors: Political factors,
Economic factors, Social factors, Technological factors, Environmental factors, Legal factors.
Coca-Cola in PESTEL's analysis of political, environmental and legal factors that have great
influence on the maintenance and development of Coca-Cola in Vietnam.
+ Political factors: Political factors influence not only transnational corporations' investment
decisions, but also companies like Vietnam Coca. The cost of doing business, as well as long-
term viability, is derived by the political environment and other factors.
+ Environmental factors: Coca-Cola is required to follow environmental regulations when
producing its products. If something goes wrong, it could affect how the product is delivered -
or even cause production to stop.
+ Legal factors: What Coca Vietnam needs to do to comply with domestic health and safety
laws. Because different countries have different attitudes towards health and safety, Coca
Vietnam should conduct extensive prior research to entering the market. Coca-Cola past and
future all business rights, including past and future products developed through a patented
process
Growth of industry: