A Family Story of Business Success: From Vietnam to the World, via Coca-Cola
(1 October, 2018)
"$2.5 billion. That is the amount of money we walked away from in 2012. This was the figure The Coca-Cola Company had offered to acquire a controlling interest in Tan Hiep Phat Beverage Group(THP), the family-owned business my parents founded in 1994,” says THP’s Deputy CEO, Phuong Uyen Tran, the special guest speaker at a series of Asialink Business forums in October.
Business opportunities like this are a once-in-a-lifetime opportunity. But, as this extraordinary tale shows, money isn't always the primary motivator for successful businesses.
During the Asialink Business events, Tran will discuss her new book, Competing with Giants. This part memoir, part business book is a memorable account of a successful family-owned business which rose from the ashes of the Vietnam war to build one of the nation's most innovative companies.
It shows how a local FMCG (fast moving consumer goods) food and beverage business can take on a corporate giant to reach even greater heights. Between 2006 and 2009, THP grew by 400 per cent after diversifying its range of drink products.
As of 2018, the company has more than 5,000 staff members nationwide and holds 15 to 20 per cent of domestic market share, ranking alongside multinationals including Coca-Cola and Japan’s Suntory. It is the epitome of a successful business seeking global expansion from a strong base in Vietnam.
So, why did the Tran family turn down one of the largest foreign acquisition deals in Vietnam's history — surely a once-in-a-lifetime business opportunity? What can its style of business leadership offer in the way of advice for entrepreneurs the world over?
THP’s answer comes down to three things— mission, values and vision.
If THP had agreed to Coca-Cola's terms, it would have been restricted from expanding its market beyond Vietnam, Laos and Cambodia, and from pursuing new product development. However strong the business opportunity may have seemed at first glance, its terms would have undermined THP's vision to compete on the global stage and limited a couple of its core strengths: product innovation and brand development.
Phuong remembers well that memorable day when the family said 'no' to Coca-Cola. Her father, Dr Tran Qui Thanh, Chairman and CEO of THP, said of the decision: “Never show emotion; never show your hand. Proud we stand, as we always have and as we always will. A partnership should be exactly that, a meeting of minds tied together by a shared passion. What we just experienced was not a meeting of minds.”
Asian Family Values that Create Business Opportunities
Phuong believes there are many benefits to globalisation, and that East and West have much to learn from each other. She is clear to point out that THP is “not driven by altruism” and continues to be open to business opportunities such as partnerships with multinationals or other companies, so long as there are rewards for both sides.
“THP is open to working with any company that can help promote our vision. And win-win does not mean a company has to be nice or has to compromise,” she says. “It means the company needs to be clear about its strategic direction and find partners than can enhance or execute that.”
At the core of THP's success is a living breathing code of core values, strongly informed by Asian culture and the Tran family’s own set of values. THP’s seven core values are filtered throughout the organisation and even included as a benchmark for determining employee pay.
These values offer direction on THP’s market-share aspirations, customer satisfaction, innovation, corporate social responsibility, quality assurance and having a can-do attitude, which many successful businesses across the world can naturally relate to.
Yet, what is noticeably different is that ancient values of Asian family culture are deeply enshrined in THP's DNA. For instance, employees and management of all levels are encouraged to act honourably by embracing personal accountability.
“Believe that success and failure is thanks to your own efforts; do not blame external factors” and “In case of failure, show colleagues how they can improve and learn from mistakes, turning a negative into a positive” are just a couple of its core values that demonstrate how this ethos is a foundation of this successful business.
Business Success Comes from Helping Others
Respecting elders and contributing to a team’s success are other key Asian values that are fundamental in the THP workplace and a key to its journey to becoming a successful business.
THP runs meetings differently to most other companies with junior staff speaking first, followed by the manager outlining their solution after listening to everyone else. This demonstrates both the contribution made by all parties to the business’ day-to-day operations and the respect paid to management to frame the right course of action.
Successful business leaders globally are increasingly turning to Vietnam as one of the fastest-growing economies in Asia and a fantastic business opportunity for investors. Phuong says industry leaders could benefit from understanding that ‘teamwork’ is a strange concept in Vietnam and much of the East.
“The Vietnamese find teamwork particularly difficult, because we are such a self-reliant people. History has made it so,” she explains.
“The second reason teamwork is such an alien concept for the Vietnamese relates to issues around face and respect. Asians are renowned for not wanting to lose face and for their attachment to hierarchy. Everyone needs to understand what someone else’s status is.”
‘Teamwork’ is best presented in a different way to a Western definition of teamwork, where a collaborative approach is taken. THP, for example, tries to achieve the same outcomes by encouraging employees to take responsibility for own their own work and feel satisfaction when they help others reach their goals.
These factors create a powerful company culture that creates a motivated, focused and driven workforce who contribute together to creating the foundation for this successful business.”
Generosity at the Heart of the Tran Family
The Tran family and their multi-generational business have carved out their own written code of values to complement the company ones. They focus on making a positive impact, sharing a culture of leadership, commitment, and being bold and selfless.
Interestingly, material wealth does not feature strongly: “hard work means results, not possessions”.
Phuong explains it in this way: “Neither of my parents are motivated by money or lead a lavish lifestyle. They frequently carry no cash around with them. If something catastrophic happened to THP, it would be the loss of the company they would mourn, not the riches that have come with it.”
She and her sister, Bich, who is also a key part of the family-run business, are expected to work hard and earn their achievements rather than assume entitlement just because they are part of the Tran legacy. In turn, their parents have formally committed to understanding their motivations as the unique 'second generation'.
How to Succeed in Business – THP Style
Adding to THP's business intelligence and strong moral code is a strong operational foundation. With the business now exporting to 16 countries including China and Australia, THP has wholeheartedly adopted an outward-facing approach while creating authentic and bestselling products finely tailored to local tastes.
In addition, its longstanding open spirit of collaboration is imprinted within the company's name. ‘Tan’ means new. ‘Hiep’ means to come together and ‘Phat’ means to develop. So, Tan Hiep Phat literally translates to ‘Together we grow’.
A good illustration of how THP embodies this motto is its desire to work with the best, no matter from where in the world.
In its bid to pursue business opportunities and expand to compete with the multinationals, THP has searched the globe for the best production methods, technology, processes, and consultants. While it might seem obvious to do so, it was a bold move, especially early on when Vietnam was still accustomed to operating in a closed economy.
“Confidence is not something my father lacks,” Phuong recalls. “He brims with self-confidence and, as a result, is not afraid to surround himself with talented and successful people. He does not feel threatened by them. He actively seeks them out wherever he can around the world because he knows they will help him achieve his goals.”
Complementing this approach, THP has long aimed to adhere to international standards, seeing this, in fact, as one of the most important business opportunities. In 1997, it became the first company in Vietnam to adopt the ISO (International Organization for Standards), which covers environmental management. At the time, THP was still operating as an alcohol beverage company and as Phuong recalls, it was a hard-cultural change for many within the company to clean up their act.
In recent years, armed with a clear business vision and long-standing history as a successful business, THP has introduced a range of other standards in various fields.
“My family tries to set no limit on our ambitions. We believe the sooner we embark on any journey, the quicker we will arrive at our destination. We have spent one decade putting the right processes in place and digitizing the company. But the next decade will be about people,” says Phuong.
As one of the most successful business enterprises in Vietnam, THP is steadily working through its purposeful agenda. Its pursuit of business opportunities is underlined by hard work, strong company values and an indomitable innovative spirit.
Phuong Uyen Tran is the guest speaker at a series of Asialink Business forums in Melbourne and Sydney. For more information see: https://asialinkbusiness.com.au/events
This article is available for republication with inclusion of the following citation: “Article first published by Asialink Business, https://asialinkbusiness.com.au/news-media"
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