INTRODUCTION TO COCACOLA VIETNAM

TABLE OF CONTENTS
I. INTRODUCTION TO COCA-COLA- VIETNAM.............................1
II. COCA COLA BUSINESS ENVIRONMENT.....................................2
2.1. About Vietnam’s Non- alcoholic drink industry...........................2
2.2. About Coca-Cola Vietnam...............................................................3
2.2.1. Public, private and voluntary sectors..........................................3
2.2.2. Legal forms.................................................................................4
2.2.3. Company’s size...........................................................................5
2.2.4. Coca-cola’s vision and missions.................................................7
2.2.5. Coca- cola’s partnership..............................................................7
2.3. Environmental Factors that Impact Coca-Cola in Vietnam........8
III. INTRODUCTION AND ANALYSIS OF PEPSICO & TAN HIEP
PHAT GROUP................................................................................................9
3.1. Pepsico...............................................................................................9
3.2. Tan Hiep Phat Group....................................................................10
IV. BUSINESS FUNCTIONS OF COCA-COLA Vietnam.......................12
4.1. Organizational chart of Coca Cola...............................................12
4.2. External stakeholders of the Coca-Cola company......................13
V. CONCLUSION.........................................................................................14
5.1. Main points.....................................................................................14
5.2. Recommendations..........................................................................14
REFERENCE............................................................................................16

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I. INTRODUCTION TO COCA-COLA- VIETNAM
Coca-Cola is one of Vietnam's most well-known multinational brands.
Coca-Cola Vietnam's plants in Hanoi, Da Nang and Ho Chi Minh City,
support a diversified number of indirect employment, which are six to eight
times larger, thanks to the company's value chain. Coca-Cola has continually

engaged in product innovation and generated a diverse range of high-quality
beverages, including zero-sugar and lower-sugar product lines, while
diversifying packaging and increasing business coverage in its quest to
become a whole beverage corporation.
The company's portfolio in Vietnam involves Coca-Cola, Coca-Cola
Light, Sprite, Fanta, Coke Zero, Minute Maid Nutriboost, Minute Maid
Teppy, Schweppes, Aquarius and Dasani. Since 2017, to meet consumers'
fast-changing flavors and demands, Coca-Cola Vietnam has proactively
broadened its high-quality portfolio to promote packaged juice and tea
products like Georgia canned RTD coffee, Fuzetea+ and most recently, CocaCola Energy.
In 2020, Coca-revenue Cola's saw a rise of 13 percent to 9.3 trillion
VnDong. It has made long-term improvement a priority in all of its
operations, including creating a safe and healthy working environment and
educating employees. Several sustainable development initiatives have
defined aims of energy conservation, water efficiency, and water balance.
Coca-Cola continues to invest in long-term community development in the
areas where it operates.
Coca-Cola has a 48.6 percent market share in Vietnam in 2015,
according to statista.com. The number of Coca-Cola outlets currently on the
market is 130,000. Soft drink consumption (on average) exceeds 100 million
liters each year. Annual sales are around 19 million barrels on average.
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II. COCA COLA BUSINESS ENVIRONMENT
2.1. About Vietnam’s Non- alcoholic drink industry
Figure 1: Non-alcoholic drink producers' revenues

<Source: Vietnam beverage report 2020>

Although the only two major foreign corporations in the sector, Suntory
Pepsico and Coca-Cola, have a 60 percent market share, Tan Hiep Phat and
Trung Nguyen - two key domestic players - have a 20 percent market share.
The following are the reasons behind this:
 Obsolete manufacturing equipment ( 52% of all firms)
 Small production scale

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Figure 2: Market share of non-alcoholic beverages in Vietnam

<Source: Vietnam beverage report 2020>

Soft drinks accounted for the majority of this segment's revenue,
which reach USD 7.098 million in 2020 and rise at a rate of 6.5 percent
through 2023. Under the favorable effect of consumer choices, per capita
consumption is increasing. The youth under the age of 24 account for almost
40% of the Vietnamese population, indicating that the soft drink industry will
continue to develop. When 83 percent of customers pick nutritious and
healthier items over sugary beverages, the trend toward a healthy lifestyle will
have a big impact on the industry's image.
Soft drink and carbonated soft drink volume sales in Vietnam are
expected to reach 3.5 billion and 1.7 billion liters in 2023, respectively, due to
the fastest growth in the fast-moving consumer goods industry.
2.2. About Coca-Cola Vietnam
2.2.1. Public, private and voluntary sectors
According to TMC Academy, Private sector organisations are usually
set up for personal gain and are funded by shares issued, loans from banks,
overdrafts etc.

The Coca-Cola Company and the non-profit organization, Ocean
Cleanup, have officially partnered to realize a clear common goal: to prevent
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plastic waste from entering the ocean. The first approach is to dispose of the
waste from rivers.
Leveraging Coca-Cola's global scale and network and The Ocean
Cleanup's data-driven technology solutions, this partnership is geared towards
deploying energy-powered Interceptor river cleaning systems. Solar energy,
developed by a Dutch non-profit organization, in 15 rivers between now and
the end of 2022.
Public sector organisations are usually set up in the interests of the
community and are funded wholly or partly by the Government from public
funds and are answerable to a government department or the Treasury.
Voluntary organizations are defined as non-profit, non-statutory,
autonomous, and run by individuals who are not compensated for their work.
In term of Voluntary, Since 2012, the Central Committee of the
Vietnam Red Cross has signed a cooperation agreement with Coca-Cola
Vietnam Co., Ltd in disaster management. From 2013 to 2017, the two sides
expanded the field of community health care cooperation through the
following activities: Free medical examination and medicine for the poor,
training in first aid skills for volunteers in the community.
With the latest donation worth more than 9 billion VND, Coca-Cola
Vietnam has donated more than 16 billion VND to prevent the COVID-19
epidemic through the coordination of the Vietnam Red Cross Society.
Contributing to help the country adapt to the new normal safely and healthily.
2.2.2. Legal forms
The Companies Acts distinguish between:
(a) Public limited companies that are traded on an official stock market.

(Such companies must include the letters 'plc' in their names.)
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(b) Private limited companies (which must include 'Ltd' or 'Limited' in
their title) and whose shares are only transferable by direct contact and
purchase from the shareholders (eg members of a family).
As a Private limited companies, Coca- cola full name is:
COCA-COLA BEVERAGES VIET NAM LIMITED LIABILITY
COMPANY
Registered Name:
CONG TY TRACH NHIEM HUU HAN NUOC GIAI KHAT COCACOLA VIET NAM
Abbreviation Name:
COCA-COLA BEVERAGES VIET NAM LIMITED
2.2.3. Company’s size
The concept of size is problematic. It can be viewed in terms of:
a) Assets employed
b) Profits earned
c) Net worth in real terms.
d) Numbers employed
e) Volume of output
f) Volume of sales
Small business are usually owned and run by one person or by a few
people.
Medium- sized businesses normally employ between 50 and 250 people
and operate either at local or national level
Large businesses normally have factories/ offices and outlets in more
than one city and often in more than one country.
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As a large businesses, Coca Cola Beverages Vietnam Ltd. is a 100%
foreign-invested company. It is a subsidiary of the Bottling Investments
Group (BIG) which is 100% owned and operated within The Coca Cola
Company.
Coca-Cola has 99% of its Vietnamese employees, out of about 4,000
employees in Vietnam. Every year, enterprises invest more than 1.4 million
USD in human resource development activities.
During 25 years of operation in Vietnam, Coca-Cola always has
focused on developing human resources, creating conditions for all
employees to maximize their potential. As a global enterprise, Coca-Cola
considers human resource development as the key to realizing its sustainable
development strategy in all markets.
Figure 3: Total asset, revenue and net- profit of Coca-cola Vietnam

<Unit: Billion dong>

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Coca-Cola Vietnam had a revenue of about VND 7,220 billion in 2016,
up from roughly VND 6,870 billion the year before. By 2019, sales of this
"large man" beverage had reached around 9,300 billion VND.
Coca-Cola Vietnam only had a net profit of VND 500 billion in 2016
owing to cost accounting for more than 60% of revenue and operating
expenditures. Despite an increase in sales, earnings plummeted by 50% in
2017, to little over 225 billion dongs. The company achieved a profit of VND
550 billion and VND 810 billion in 2018 and 2019, respectively.
Coca-Cola Vietnam's total assets increased from VND 7,235 billion in
2016 to VND 9,700 billion in 2019.

2.2.4. Coca-cola’s vision and missions
According to TMC Academy “Vision statements- are seen as
documnets that set out the strategic intentions of the organisation.”
“Mission statements- should outline the specific role that the
organisation plans to fulfill over the long term and therefore limits the scope
of its operations by implicitly areas outside its stated mission.”
Coca-Cola's Vision:
Coca-Cola's Vision is to create brands and beverages that people love
that inspire both people's bodies and minds. At the same time, develop in a
sustainable way and towards a better-shared future, bringing positive effects
to the lives of people, communities and the whole world.
Coca-Cola’s Missions
•

To refresh the world

•

To create value and make a difference

•

To inspire moments of optimism and happiness
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2.2.5. Coca- cola’s partnership
The 17th of October, 2018 in Ha Noi. In Ha Noi, UNESCO established
a new cooperation with Coca-Cola Vietnam and its development partners
with the goal of reducing plastics and solid waste in Vietnam in order to

achieve a "World Without Waste." The event, which is being held at Ha Noi's
Green One UN Building, is a unique opportunity to bring together all active
UN agencies, government entities and important development partners, the
commercial sector, local NGOs, and young Vietnamese activists and students
for collective action.
Coca-cooperation Cola's with the British Council supports social
entrepreneurship and community involvement through the EKOCENTERs
program across Vietnam in 2020, concentrating on environmental awareness
and trash management, in line with the UNESCO initiative, under the
following parameters.
These newly announced collaborations include a wide range of
educational programs, creativity activities and contests, as well as robust
interactions with the public and recognized organizations in order to promote
plastic waste management awareness and actions. They also show Coca-and
Cola's partners' strong commitment and collaboration in addressing Vietnam's
challenges in raising public awareness about plastic waste collection,
segregation, and recycling for shared value in the circular economy, resulting
in new positive changes in the plastic waste management perspective.
2.3. Environmental Factors that Impact Coca-Cola in Vietnam
Social Responsibilities of Corporations Culture is one of the most
important aspects of life. Is Vietnam Coca-current Cola's CSR initiatives
appropriate in the new market, or does it require a fresh initiative to meet the
needs of the potential market?
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Climate Change Effects – How will climate change affect the CocaCola business model and supply chain in Vietnam? If the supply chain is not
flexible, for example, supplies from one region of the world may be delayed
due to a sudden climate change, resulting in bottlenecks.
Waste Management - What is the potential market's waste management

policy, and how can Vietnam Coca adhere to the market's waste management
requirements? Environmental Organizations' Influence and Effectiveness Environmental standards enforcement agencies play a key role in maintaining
norms. However, in many developing countries, these organizations use
delaying tactics to extort bribes. Vietnam Coca should be informed that such
activities exist in the country.
Climate Agreement in Paris and National Government Commitment to
the Agreement – What are the country's commitments under the Paris
Agreement, and what is the country's general degree of agreement on the
Paris Climate Agreement? For example, Trump's failure to honor US
agreements has fostered a climate of uncertainty.
III. INTRODUCTION AND ANALYSIS OF PEPSICO & TAN HIEP
PHAT GROUP
3.1. Pepsico
PepsiCo (now Suntory PepsiCo Vietnam – Pepsi joint-venture) and
Coca-Cola, which have been present in Vietnam since 1994, have quickly
become the two most prominent brands in the non-alcoholic drink market.
In a similar way to the ongoing global war between Coca-Cola and
Pepsi, the two behemoths have been fiercely competing domestically. Pepsi
has recently increased its revenues, which are now two times higher than
Coca- Cola's.

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Coca-Cola and Pepsi both have critical products that are similar in each
segment. If Coca-Cola has Coca-Cola, Nutriboost, Samurai, Aquarius,
Dasani, and other products,... Pepsi offers Pepsi, 7Up, Revive, Mirina,
Aquafina, Twister, and other Pepsi products.
Pepsi and Coca-Cola have both had successful business years in recent
years. Even Pepsi has made a profit of VND2,735 billion ($117 million) after

erasing its losses.
Pepsi had a revenue of VND15 trillion ($645 million) and an after-tax
profit of VND1,427 billion ($61.3 million) in 2017, up 5% and 27%,
respectively, from the previous year.
Figure 4: Suntory PepsiCo Vietnam’s business results

<Source: >

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3.2. Tan Hiep Phat Group
Tan Hiep Phat, which leads the green tea segment with Zero-Degree
Lemon Green Tea and Dr. Thanh products, is Pepsi and Coca-most Cola's
significant local competitor.
According to Euromonitor's report, PepsiCo's non-alcoholic beverage
market share has risen sharply from 27 percent to 33 percent in the last five
years, based on off-trade sales. Meanwhile, Coca-Cola was down around
10%-11%, and Tan Hiep Phat was down from 16.5 percent to 13.1 percent as
a result of the fly-in-the-product scandal.
Figure 5: Tan Hiep Phat annual report 2019

Source: CAFEF, VIRAC

Despite its lower market share, Tan Hiep Phat's profit margin
outperformed Pepsi and Coca-Cola. Tan Hiep Phat's two plants in Binh
Duong and Ha Nam provinces generated nearly VND8.7 trillion ($380
million) in revenue in 2019. Pre-tax profit, on the other hand, was reported at
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VND 3.7 trillion ($77.3 million), representing a profit margin of 36%. In the
two foreign companies, this rate is only about 15%.
According to the reports, Tan Hiep Phat's cost of goods sold accounts
for around 60% of revenue, while it accounts for 70% in the two foreign
companies. Coca-Cola, in particular, has a selling cost that is twice that of
Tan Hiep Phat. Pepsi is four times more expensive, but Tan Hiep Phat's
turnover is only two times higher.
IV. BUSINESS FUNCTIONS OF COCA-COLA Vietnam
4.1. Organizational chart of Coca Cola
According to TMC Academy , In a geographical, regional or territorial
departmentation structure, some authority is retained at Head Office, but dayto-day operations are handled on a territorial basis.
Figure 6: Geographical, organizational Structure of Coca Cola

<Source: juliegilhuly.wordpress.com/>

The advantages of a geographical structure
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A geographical structure can provide a number of operational and strategic
benefits, such as:
 close communication with regional customers
 strong collaborative teams at each location
 the ability to better serve local needs and tailor their approach to the
local market
 the ability to promote positive competition between different
departments
The disadvantages of a geographical structure
The main disadvantage of a geographical organizational structure is the

potential for conflict between central and local management, as individual
divisions often assume a great deal of autonomy. Other drawbacks include:
 potential duplication of works, functions and resources,
 some economies of scale may be failed.
4.2. External stakeholders of the Coca-Cola company
There are three broad types of stakeholder in an organisation:
a. Internal stakeholders( employees, management)
b. Connected stakeholders( shareholders, customers, sumppliers,
financiers)
c. External stakeholders( the community, government, pressure groups)
Bottling partners, customers, consumers, suppliers, industry partners,
governments, and non-governmental organizations (NGOs) are the company's
primary external stakeholders. The company's total number of customers is
difficult to estimate; however, over 1.9 billion servings of its drinks are
consumed each day around the world. The company collaborates with a
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number of bottling partners around the world to get these massive servings to
consumers.
The Coca-Cola Company sells beverage bases and syrups to bottling
partners, who then turn around and sell the finished products to wholesalers,
retailers, independent outlets, restaurants, and movie theaters, to name a few.
The products are then sold to consumers by these organizational customers.
This demonstrates that the company's bottling partners are important
stakeholders. Governments and non-governmental organizations (NGOs) are
also important stakeholders in the Coca-Cola Company.

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V. CONCLUSION
5.1. Main points
The company's recent acquisition of Coca-Cola Enterprises' bottling
business, as well as its productivity initiatives, are expected to save money.
Coke Company, in particular, plays an important role in the beverage industry
in Vietnam. Customers enjoy their meaningful and colorful advertisements,
which are complemented by lively music. Coca-Cola Company should create
a lot more advertising in the future to meet the demands of Vietnamese
customers. To compete with PepsiCo Inc., Coca-Cola must increase its
advertising spending.
5.2. Recommendations
Highlighting on High Worth Services
Recommendations In this case study, the government could support the
establishment of a Center of Excellence in Company, Danger Valuation
Management, Internal Audit, Tax, and Professional Growth and Development
for CFOs through a variety of incentives, including tax breaks. The ownership
of a general public accounting firm would be deregulated, lowering entry
barriers. Small and Medium-sized Practices (SMP) could be updated by the
federal government by providing incentives for company cooperation,
training, and innovation financial investment.
Supporting Accountancy Education and Research
Establishing a Coca-Cola In Vietnam Case Recommendations
Certification Program could benefit accounting education and research (SQP).
It can also create specialization courses for Chief Financial Officers (CFOs)
by enhancing the value of skills such as risk management, internal audit, tax,
professional development, and service valuation through competency
structures, certifications, and certifications.
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Strengthening

the

Accountancy

Infrastructures

and

Institutions
The federal government may be able to persuade the Institute of CocaCola In Vietnam Case Recommendations Chartered Accountants (ISCA), the
country's accounting body, to reorganize internationally. An Accountancy
Sector Advancement Fund (ASDF) could be established to incentivize the
decisions and improve performance, constructability, and regionalization.

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