t

os
W34211

NUTRINEST: EXTENDING A NEW SUSTAINABLE PRODUCT LINE

rP
Nguyen Quynh Phuong, Bikramjit Rishi and Sundar Venkatesh wrote this case solely to provide material for class discussion. The
authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised
certain names and other identifying information to protect confidentiality.

This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the
permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights
organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western
University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveypublishing.ca. Our goal is to publish

yo
materials of the highest quality; submit any errata to publishcases@ivey.ca. i1v2e5y5pubs

Copyright © 2023, Ivey Business School Foundation Version: 2023-12-07

On May 7, 2020, Le Danh Hoang was sipping coffee in his office in District 2, Ho Chi Minh City, Vietnam,
and reminiscing about his entrepreneurial journey. Hoang had started NutriNest, Vietnam’s first authentic
bird’s nest farming initiative, in 2005. Birds’ nests were a legendary Asian delicacy, and Hoang was selling
op
bird nest products under different brand names. In 2018, with consumers increasingly concerned about their
health and the environment, and based on consumer insights, NutriNest launched the Green Bird product
line of sustainable products. Green Bird quickly became the company’s best-selling product line. So, Hoang
decided to add new products to the Green Bird product line; he was reviewing a new factory layout to
produce the new products. The new site, expected to be completed in six months, was three times the size
of his current factory and would increase production capacity tenfold.
tC

Hoang faced a crucial decision over how to continue growing the business. Should he focus on the current
portfolio of the Green Bird line or add new products? If he added new products to the line, 10 per cent more
capital would be required to install new machines, which would empty his cash reserve. Besides, would the
additional products cannibalize the existing market share? Would his firm be able to gain further market
share? He looked out the window. The sky had already turned dark, signalling that it would rain shortly.
The future of his business was as blurred as the view, he thought.
No

NUTRINEST: AN OVERVIEW

In 2004, Hoang was in college and working as a tour guide when he met Elisa Nugroho, PhD, and his wife.
The couple taught him the new technique of bird farming and bird’s nest processing. Hoang was living in
a small, rented room, when he formed the entrepreneurial idea to build his own edible bird’s nest farm. But
he did not have the capital to start the business. Therefore, after graduating in 2005, Hoang got a job with
a leading multinational corporation and began to build his start-up—a swiftlet bird’s nest farm.
Do

During weekends and holidays, while peers were getting together for drinks, Hoang worked on his start-
up. At the time, birds’ nests were collected from islands off the coast of central Vietnam, so the nests were
called an island bird’s nest for short. Hoang took numerous buses to coastal island towns to look for the
swiftlet birds that created the nests from their saliva. Whenever he saw a lookalike bird he would run after
it with binoculars. He needed to find the birds and their habitat so that he could start building his farm.

This document is authorized for educator review use only by Akins Ogungbure, Troy University until Dec 2024. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
 Page 2 W34211

t
After months of hard work, Hoang found the birds’ location. He then borrowed VND 200 million1 from his

os
family so that he could import the equipment to build the breeding houses for the farm. Breeding houses
needed at least 85 per cent humidity to keep the nests from drying and falling to the floor, so he needed an
automatic moisture system. And to ensure the continuation of the flocks, eggs and chicks had to be protected
from predators (e.g., harmful insects inside the breeding house).

In the coastal town of Phan Rang City, Ninh Thuận province, Hoang made the first model house to attract

rP
swiftlet birds to nest. Swiftlet birds spent their days in the wild and only went “home” to roost at night.
After many failed attempts at getting the birds to roost, he realized that he had to create a habitat best suited
to the birds’ biological characteristics and one that would protect them from insects and natural enemies.
For birds to nest in his farm, they had to think that an existing flock was nesting there. To recreate the
habitat and get them to roost, Hoang played bird sound recordings over loudspeakers, installed artificial
bird nests, and spread bird droppings to attract birds to the breeding house.

yo
After Hoang introduced the idea that an authentic bird’s nest could be artificially modelled, it took him time
to persuade customers. The island bird’s nest was still considered a luxury food. And NutriNest’s farmed
bird’s nest products had a lower price (VND 5,550,000) for a 100-gram retail price than island bird’s nest
(VND 24,840,000 for a 100-gram retail price by Sanest, NutriNest’s main competitors). Hoang remembered
when the first customer bought one of the products in his shop near Ben Thanh market in Ho Chi Minh
City. He and his brother jumped for joy and yelled, “Yes, we can sell it!”
op
After two years of working for the corporation, Hoang resigned to focus on his start-up full time when
demand for his product started to pick up. In 2015, Hoang transformed the company from a manufacturer
to a Fast-Moving Consumer Goods firm with a distribution network. Hoang patented his innovation in
harvesting birds’ nests after one season with the National Office of Intellectual Property of Vietnam in
2016. His invention allowed him to harvest nests every twenty days, which gave the chicks enough time to
mature and leave the nest. Harvesting the nest too early could risk the chicks’ lives; and by letting them
grow, they would eventually return and nest the next generations.
tC

The quality of farmed birds’ nests had the same nutritional value as the island nest but with a lower price
tag. And the market was increasingly competitive, with many companies offering similar products.
NutriNest’s existing offering, called cleaned birds’ nests, had to be cooked (see Exhibit 1). But Hoang
wanted to provide a new product that would bring convenience to customers and add more value to the
company. NutriNest launched ready-to-eat bird’s nest soups (see Exhibit 2), the bird’s nest was cooked and
sealed in 72 gram glass bottles. They also had the new sustainable Green Bird product line (see Exhibit 3).
No

NutriNest adopted three pillars of quality: deliciousness, nutrition, and convenience. The company made
significant efforts to impart quality pillars in each of its products. To ensure quality, NutriNest sourced
homogeneous materials derived from their advantage of leading the bird nest farming system and applying
the exact construction and operation technologies. The company offered high nutrition with their patented
technique of harvesting their “One Season Nest” for a clean nest with high nutritional value. And customers
easily traced the product labels’ QR code to get information about farming, harvesting, and processing. The
company was committed to the highest standard of food processing with international standards and Hazard
Analysis and Critical Control Point certification.
Do

From a humble start in 2005 of VND 200 million, by 2020, NutriNest was a mid-sized food production company
with a turnover of USD 15 million and a 550 staff in Ho Chi Minh City, Vietnam’s most populated city. NutriNest
produced forty stock keeping units of bird’s nest products. Hoang shared that his company had achieved an average
of 40 per cent sales growth with steady cash flows without a liquidity crisis in the last decade.

1
1 VND = 0.000057 CAD as on November 08, 2023

This document is authorized for educator review use only by Akins Ogungbure, Troy University until Dec 2024. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
 Page 3 W34211

t
VIETNAM’S MARKET AND ORGANIC TRENDS

os
In three decades, Vietnam’s economy had grown from one of the poorest countries in the world to a vibrant
economy with a gross domestic product per capita increase of 4.5 times to USD 3,409 in 2021 from USD
598.9 in 1986.2 Along with economic growth, Vietnam’s population increased to 97.4 million in 2021 from
61.2 million in 1986.3 Vietnam had a relatively young population, with a median age of 30.7 years in 2018

rP
and 50.5 million working-age people in 2021.4 Economic and population growth led to the rise of the middle
class. Vietnam had about 12 million people classified as “middle and affluent” in 2019, which was expected
to reach 25 million in 2026, among the highest growth rates in Southeast Asia.5

Nutritious and healthy drinks with less sugar and caffeine were gaining popularity among the middle class.
Revenue growth for carbonated drinks was 9.3 per cent in 2019, a considerable drop from 27.9 per cent in
2011, and it was expected to shrink further to 5.7 per cent in 2023. Non-alcoholic beverages had an annual
growth of about 10 per cent, reaching VND 28.8 trillion in 2019.6 According to the 2020 Nielsen Global

yo
Consumer Confidence Survey in Vietnam, health was considered the most critical issue followed by income
and job security concerns. The healthier trend was due to the rise of the urban middle class who had higher
disposable incomes and increasing health consciousness.7

The Vietnamese government mentioned the term “sustainable consumption” for the first time in September
2012 in the prime minister’s Decision 1393/QD-Ttg.8 The government called for accelerating organic
certification and raising public awareness about eco-friendly products. A national green growth strategy
op
needed a green lifestyle and sustainable consumption. Thus, in 2017, the Ministry of Science and
Technology announced guidelines for Vietnam Certified Organic. A Google report on Vietnam online users
showed an increase in online organic food searches of 30 per cent year-on-year in 2020.9 Though retail
sales for organic food and beverages were only around $130 million in 2019, the market was growing, with
customers willing to pay a premium price for healthier products.10 A large study by Rakuten Insights in
2021 showed that most people believed that organic products were healthier and more nutritious, followed
tC

by the belief that they were good for the environment.11

2
World Bank Group, “Poverty & Equity Brief, Vietnam,” April 2023,
https://databankfiles.worldbank.org/public/ddpext_download/poverty/987B9C90-CB9F-4D93-AE8C-
750588BF00QA/current/Global_POVEQ_VNM.pdf.
3
The World Bank, “Population, Total - Vietnam,” n.d., https://data.worldbank.org/indicator/SP.POP.TOTL?locations=VN.
4
PriceWaterhouseCoopers, ”The Future of ASEAN: Vietnam Perspective,” PWC Vietnam, 2018,
https://www.pwc.com/vn/en/publications/2018/pwc-vietnam-future-of-asean-vietnam-perspective.pdf
No

5
The World Bank, “Vietnam’s Economy Expanded by 6.8 Percent in 2019 but Reforms Are Needed to Unleash the Potential
of Capital Markets,” World Bank, December 17, 2019, https://www.worldbank.org/en/news/press-
release/2019/12/17/vietnams-economy-expanded-by-68-percent-in-2019-but-reforms-are-needed-to-unleash-the-potential-
of-capital-markets#:~:text=Hanoi%2C%20December%2017%2C%202019%E2%80%94,of.
6
Business Centre of the British Business Group Vietnam, “Vietnam - 2019 Drinks,” 2019, 2, https://britchamvn.com/wp-
content/uploads/2020/12/Vietnam-2019-–-Drinks.pdf.
7
Minh Nguyen, “Vietnam Organic Market,” USDA Foreign Agricultural Service and the Global Agricultural Information Network,
August 10, 2021, 5,
https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Vietnam%20Organic%20Market_
Ho%20Chi%20Minh%20City_Vietnam_08-03-2021.pdf.
8
Nguyen Thi Nhung, Tran Thi Van Anh, and Dao Thi Thanh Huyen, “Current Status of Organic Food Consumption in Vietnam”
Do

[in Vietnamese], Tai Chinh, July 23, 2021, https://taichinhdoanhnghiep.net.vn/thuc-trang-tieu-dung-thuc-pham-huu-co-tai-viet-

nam-d22798.html.
9
Google, "Year in Search 2020: Vietnam's search for tomorrow", Think with Google, https://www.thinkwithgoogle.com/intl/en-
apac/marketing-strategies/search/vietnams-search-for-tomorrow-insights-for-brands/
10
Phong Tuan Nguyen, “A Comparative Study of the Intention to Buy Organic Food between Consumers in Northern and
Southern Vietnam” (master’s thesis, Assumption University, 2010), 101, http://www.assumptionjournal.au.edu/index.php/AU-
GSB/article/view/503/452.
11
Minh-Ngoc Nguyen, “Main Reasons for Purchasing Organic Food among Vietnamese in 2021,” Statista, Dec 16, 2022,
accessed April 22, 2023, https://www.statista.com/statistics/1008391/vietnam-main-reasons-for-purchasing-organic-food.

This document is authorized for educator review use only by Akins Ogungbure, Troy University until Dec 2024. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
 Page 4 W34211

t
The organic market in Vietnam was relatively small because some consumers doubted the products’ origin

os
and feared that organic products were unsafe. However, organic products, including fresh fruits and
vegetables, processed foods, and beverages, became increasingly popular. These products were available
in almost all hypermarkets/supermarkets (Co-op Mart, An Nam, Metro, Big C), specialty stores (mom-and-
-pop stores, pharmacies), convenience stores (FamilyMart, Circle K, 7-Eleven), online retail platforms
(Tiki, Lazada, Shopee), and other distribution channels.

rP
A solid and sizable middle class in Vietnam would shape the prospects of organic products. With a relatively
young population and increasing health awareness, Vietnam had potential future growth prospects for companies
providing healthy food and beverages. The young generation was also sensitive to healthier lifestyles, with a
new culture blended traditional norms and global preferences. Moreover, the need was growing to promote
organic products that provided health benefits to consumers and was friendly to the environment.

yo
COMPETITORS

Sanest

The leading and the earliest edible bird’s nest producer in Vietnam was Khanh Hoa Salanganes Nest (Sanest),
aka Yến Sào Khánh Hoà company, formed in 1970. This state-owned enterprise (SOE) sold island nests with
an annual revenue of about USD 160 million in 2022.12 According to the company’s website, Sanest managed
op
thirty-two salangane or swiftlet bird islands with 169 caves. It had a total of 5,500 staff working in twenty-six
subsidiaries, including two listed companies (Yến Sào Diên Khánh and Sanest Khánh Hoà).13

Hoang shared that Sanest accounted for 75 per cent of the market share in Vietnam. As an SOE, Sanest was the
only company with a licence to excavate island birds’ nests off the coast of Khanh Hoa province. Before
NutriNest successfully produced farmed bird nests, Sanest enjoyed a monopoly with its five brands (Khanh Hoa
tC

Island Bird’s Nest, Savinest Khanh Hoa Bird’s Nest, Sanest Bird’s Nest, Sanna Beverage, and Sanest Food).

For traditional cleaned bird’s nest products (like NutriNest products in Exhibit 1), Sanest charged a premium
price for island bird’s nest products. For example, 100 grams of cleaned island bird’s nest was priced at USD
1.049. Sanest also produced bird’s nest soup and drinks under the Savinest Khanh Hoa and Sanest brands.
Though the Savinest Khanh Hoa brand comprised half of Sanest’s products, the company charged the same
retail price. Under the Sanest line, the company offered a range of bird’s nest soups: Sanest bird’s nest soup,
No

Sanest bird’s nest soup for the elderly, Sanest bird’s nest soup with ginseng, Sanest bird’s nest soup with Isomalt,
Sanest bird’s nest soup without sugar, Sanest bird’s nest soup with collagen, and Sanest bird’s nest soup for kids.
All products were packed in 70 ml glass bottles, with retail prices ranging from VND 222,000 to VND 286,000
for six bottles. Each 70 ml bottle would cost from VND 36,000 to VND 45,000. Both Sanest and Savinest offered
bird’s nest drinks packed in 190 ml aluminum cans with a retail price of VND 9,000/can, VND 58,000 for six
cans, and VND 264,000 for a carton of thirty cans.
Do

12
LDO, Khanh Hoa Salanganes Nest Company Earned More than 4100 billion VND from White Gold” [in Vietnamese] Ngoui
Lao Bong, June 9, 2022, https://nld.com.vn/kinh-te/cong-ty-yen-sao-khanh-hoa-thu-ve-hon-4100-ti-dong-tu-vang-trang-
20220609150354105.htm.
13
Yen Sao Khanh Hoa, “Introduction” [in Vietnamese], n.d., https://yensaokhanhhoa.com.vn/abouts/view/gioi-thieu-
chung_20151225.

This document is authorized for educator review use only by Akins Ogungbure, Troy University until Dec 2024. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
 Page 5 W34211

t
Brand's

os
Dating to the 1830s, Brand’s sold an essence of chicken drink under the founder’s name, Brand. In 1982,
for the first time Brand’s bird’s nest drink was sold in a can. The company also launched the essence of
chicken drink with herbs that same year. In 1990, Brand’s joined Japan’s Suntory group.14 For the Vietnam
market, the products came from its factory in Thailand.15 Imported into Vietnam, the Brand’s had two

rP
product lines: Brand’s essence of chicken drink and Brand’s bird’s nest drink.

For the Brand’s essence of chicken drink, the retail price was VND 36,000 per 42 gram glass bottle or VND
162,000 for a package of six bottles. It had three flavours: original, mild, and chocolate.

The Brand’s bird’s nest drink came in two types, with sugar and without sugar, offered in 42 gram and 70 gram
glass bottles.16 The retail price was VND 84,000 per 42 gram bottle and VND 200,000 per 70 gram bottle. A

yo
pack of six 42 gram bottles was VND 504,000, and six 70 gram bottles were priced at VND 690,000.

Abbott Nutrition

Ensure was one of many brands from multinational corporation, Abbott Nutrition, a Fortune 500 company
headquartered in the United States.17 In Vietnam, Ensure was an imported Abbot Nutrition brand known
for its milk powder, mostly for infants and the elderly. Ensure later launched nutrition drinks. According to
op
Hoang, Ensure nutrition drinks would compete directly with new bird’s nest products.

For the Vietnamese market, Ensure offered nutrition drinks packed in plastic bottles and relatively bigger
sizes than Sanest and Brand’s.18 Ensure Nutrition Shake Original, in 237 ml plastic bottles, had a retail price
of VND 39,000 and VND 232,000 for a pack of six bottles. Ensure Gold Vigor, in 237 ml plastic bottles,
was VND 56,000 and VND 336,000 for a pack of six. Ensure Plus Advance, 220 ml in a plastic bottle, was
tC

VND 75,000, and a pack of six bottles was VND 499,000. Vital 1.5 kcal, 200 ml in the plastic bottle, had
the same retail price as Ensure Plus Advance. 19

THE GREEN BIRD BRAND AND NEW PRODUCT INTRODUCTION

NutriNest offered two product lines: (1) cleaned bird’s nest products in Exhibit 1, which required cooking;
No

and (2) ready-to-eat bird’s nest soup in Exhibit 2 and Exhibit 3. The latter product line was more popular
due to customers’ preference for convenience and affordability.

NutriNest launched the Green Bird brand after studying trends in organic products. The new brand was designed
to focus on sustainability from the product’s acquisition, consumption, and disposal. NutriNest’s bird breeding
houses were chemical free, which ensured that the harvested bird’s nests would meet organic requirements.

The Green Bird brand targeted customers who cared about health and nature. Unlike the usual red and gold
colours on bird’s nest products, Hoang chose green for the Green Bird brand to represent a healthy lifestyle and
Do

14
“aCommerce Leads Brand’s Suntory with Multichannel eCommerce Solution,” aCommerce, December 1, 2022,
https://www.acommerce.asia/acommerce-leads-brands-suntory-with-multichannel-ecommerce-solution.
15
“About Us” [in Vietnamese], Brand’s, n.d., https://www.brandsworld.com.vn/vi-VN/About-Us/History-Heritage#.
16
“Product Categories” [in Vietnamese], Websosanh, n.d.,
https://websosanh.vn/s/n%C6%B0%E1%BB%9Bc+y%E1%BA%BFn+brand+s.htm.
17
“About Abbott,” Abbott, n.d., https://www.abbott.com/about-abbott.html.
18
“Ensure Gold,” Ensure Vietnam, n.d., https://www.family.abbott/vn-vi/ensure/products.html.
19
Data based on field visits to retail stores in Vietnam by the authors in 2023

This document is authorized for educator review use only by Akins Ogungbure, Troy University until Dec 2024. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
 Page 6 W34211

t
an eco-friendly image. The packaging for all Green Bird products was plastic free and biodegradable, and the

os
packs of six glass bottles and gift boxes were all made from recycled paper. When customers purchased any
Green Bird product, they were given plant-based plastic bags. Though the cost of these biodegradable bags was
30 per cent higher than plastic ones, Hoang trusted that it would be consistent with the brand’s sustainability
commitment. The products sold well in supermarkets and the brand took the lead in NutriNest’s sales.

rP
Customers often bought bird’s nest products as gifts for the elderly and children or when someone needed
to recover from an illness. But Hoang wanted to attract another segment—young professionals in the urban
middle class who were 23–35 years of age and cared about work-life balance. Their professions included
office workers, entrepreneurs, salespersons, vloggers, and bloggers. He planned to introduce new products
people could consume daily. He thought that a new product would be a drink and act like a beverage to
relieve thirst while providing its customers an energy boost.

yo
Hoang studied Abbott Nutrition, which offered nutrition drinks under their Ensure brand that was sold in
plastic bottles. Green Bird brand made the environmental commitment not to use plastic in the production
to consumption stages—no other brand in the market had made this commitment. And while Sanest, their
biggest competitor, sold bird’s nest drinks in aluminum cans with less environmental impact, Hoang shared
that canned bird’s nest drinks had a credibility issue because it was too cheap (retail price of VND
9,000/can). So, the Green Bird new nest drinks would not be offered in plastic or aluminum cans.

The company initially planned to offer its Green Bird bird’s nest soups in glass bottles weighing 72 grams.
op
But Hoang’s plan was to increase the bottle’s size and add more water and other ingredients so that it would
be a ready-to-drink rather than a ready-to-eat product. The bird’s nest soups bottles were weighed to show
how much bird’s nest was in each bottle. Hoang thought the bottles should be labelled by volume like any
beverage in the market. And the bottle’s size should also satisfy the requirement for the product to be both
handy and convenient. After many tests and checking with suppliers, his team decided on a 180 ml glass
bottle. This size could increase the possibility of repurposing and reusing the glass bottles.
tC

With more volume in hand (i.e., 180 ml bottles compared with the shorter 72 gram bottles), Hoang
considered adding other nutritious ingredients as well such as chia seeds, collagen, or cordyceps. Chia seeds
were quite popular and viewed as a healthy choice. Young female cosmopolitans were familiar with
collagen and its positive effect on the skin, and cordyceps was seen as a healthy choice for males. Along
with chia seeds, collagen, or cordyceps, the new drinks had to contain enough bird’s nest that customers
could chew the nest and enjoy the taste. The food content in the glass bottle had to satisfy customers when
No

they felt hungry and needed something light and nutritious.

Hoang believed that NutriNest’s quality, built over fifteen years of offering authentic birds’ nests to
consumers, should never be compromised. The new product had to balance the company’s quality
reputation and the need for the right price so that his target customers could consume the product daily. The
new product should be a beverage or health drink that could accompany a meal or a snack meal. His team
thought that a VND 50,000 budget for a snack meal, including a bird’s nest drink, was appropriate and
affordable for their targeted customers’ daily consumption.
Do

As a drink, the new product had to be consumed chilled to give a cooling effect and offer heat relief in
tropical countries such as Vietnam. The bottle’s design had to be sleek and cool so customers would want
to drink it in public. Consistent with the Green Bird line’s green image, the new product would also have
to create zero waste. And consumers had to be able to reuse them for other purposes at home like a small
flower vase or food container.

This document is authorized for educator review use only by Akins Ogungbure, Troy University until Dec 2024. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
 Page 7 W34211

t
NutriNest’s existing distribution network included (1) five stores in Hanoi and Ho Chi Minh City, (2)

os
supermarkets, and (3) grocery stores. Since launching the Green Bird brand, the company had signed deals
with specialty stores such as mom-and-pop and pharmacy chains. Hoang was concerned that the added
products might take over the market share of existing ones. Hoang needed a new distribution channel to
ensure that the products were available to the target consumers: his company had no deals yet to supply to
convenience stores such as Circle K, FamilyMart, and 7-Eleven. If his new products could enter this

rP
channel, it would likely expand NutriNest’s market share.

THE ALTERNATIVES

The new factory layout needed to be finalized as soon as possible to ensure that it would be up and running
in six months. Hoang was required to decide on product development so that the new site could be set up
accordingly. Hoang had two alternatives, and his choice would define NutriNest’s future growth strategy.

Option 1: Stay the Course

yo
If NutriNest chose this option, Hoang could focus the company’s resources on growing current Green Bird
products through a better distribution network and a more visible marketing campaign. NutriNest could develop
distribution channels for existing Green Bird products and offer more promotions to wholesalers and customers
op
to increase market share. Besides that, the cash reserve would be maintained, and the company would continue
to pay its suppliers on time—a trust and a reputation that Hoang built from the beginning.

However, offering a bird’s nest drink could be seen as a me-too product compared with Sanest’s offerings.
Hoang was reluctant because of his pride in being the first mover to introduce bird’s nest farming in
Vietnam, and his patented innovation for harvesting birds’ nests in one season.
tC

However, the market was increasingly competitive. If the company did not offer a new product, it might
lose market share. The customers were evaluating new alternatives and looking for new products. Besides
that, Sanest, the leading company, offered a variety of options to its customers. If NutriNest failed to adapt,
it would be left behind.
No

Option 2: Extend the Product Line

If Hoang decided to add new products to the Green Bird line, he would have to use the cash reserve to
invest in the additional 10 per cent capital required for the new factory. It would be the first time since he
formed NutriNest that the company would have extremely low liquidity, which would undoubtedly carry
some risks. But new products might increase the company's market share and help NutriNest grow.

Hoang shared that to solve the puzzle of market penetration, when the leading company took over 75 per
cent of the market, it was crucial to break the market into smaller segments. New products would have the
Do

combined characteristics of an authentic bird’s nest soup with a nutritious drink. NutriNest could have an
“early mover” competitive advantage.

However, investment in new products would cost time and money. The company would not have enough
capital left for promotion to increase market share. For example, in dealing with a leading pharmacy chain
with 500+ stores throughout Vietnam, NutriNest needed to negotiate a discount rate and payment terms. It

This document is authorized for educator review use only by Akins Ogungbure, Troy University until Dec 2024. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
 Page 8 W34211

t
meant displaying products in their stores and waiting for them to sell. During that cycle, NutriNest still

os
needed cash to pay its suppliers. Investing in product development would almost empty cash reserves. If
payments were late from the sale, the company would not have enough cash to pay its suppliers. It was not
Hoang’s preferred scenario.

Also, new products might have competed with existing products. Instead of earning new market share, it

rP
could offer existing customers more choices. And as the company invested more, hoping for better growth,
they could end up having more costs for the same sales result.

New products with the characteristic of bird’s nest soup and nutrition drinks required a different distribution
channel to reach targeted customers. Hoang believed that expanding to convenience stores would be crucial
and help increase market share. To minimize the risk that new products might cannibalize current ones, a
different distribution network could be a solution. However, developing it would again require more human

yo
resources and capital investment.

THE WAY FORWARD

Hoang was planning to launch new sustainable products under the green brand. The company would
become the first mover in extending the sustainable bird’s nest product line under the Green Bird brand.
He was committed to sales growth, as the new factory was about to open with more production capacity.
op
Hoang was also trying to balance making a profit and getting one step closer to the sustainability goal for
the company. He faced a dilemma: focus on the current portfolio of the Green Bird line or add new
sustainable products? If Hoang added the new product to the product line, 10 per cent more capital would
be required for machine installation in the new factory, almost emptying his cash reserve. But he also had
to determine whether the new launch would cannibalize the existing market share or help him gain more.
tC
No
Do

This document is authorized for educator review use only by Akins Ogungbure, Troy University until Dec 2024. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
 Page 9 W34211

t
EXHIBIT 1: NUTRINEST BIRD'S NEST PRODUCTS

os
Product Price in Price in
VND USD
Cleaned bird’s nest
Cleaned bird’s nest 200 g 10, 900, 000 460
Cleaned bird’s nest 100 g 5,550,000 234

rP
Cleaned bird’s nest 50 g (special) 2,800,000 118
Cleaned bird’s nest 50 g 2,650.,000 112
Special cleaned bird’s nest
Special cleaned bird’s nest 100 g 4,450,000 187
Special cleaned bird’s nest 50 g 2,250, 000 95
Special cleaned bird’s nest 20 g 900,000 38
Bird's nest with feather

yo
Original bird’s nest with feather 100 g 4,200,000 177
Original bird’s nest with feather 50 g 2,150,000 90
Triangle shape bird’s nest with feather 100 g 3,900,000 165
Triangle shape bird’s nest with feather 50 g 2,000,000 84

Note: g = gram; VND = Vietnamese dollar; USD = United States dollar.

Source: Company's website, with a conversion rate of 17686 VND = 1 CAD on November 08, 2023.
op
EXHIBIT 2: NUTRINEST– BIRD’S NEST SOUP

Product Price in Price in

VND USD
Gold – Whole nest
Bird’s nest soup with rock sugar 190 g 4,90,000 21
tC

Bird’s nest soup with rock sugar 190 g x 3 bottles 1,500,000 63

Bird’s nest soup with rock sugar 190 g x 6 bottles 2,990,000 126
NutriNest
Bird’s nest soup with rock sugar 72 g 95,000 4
Bird’s nest soup with rock sugar 72 g x 6 bottles 610,000 26
Bird’s nest soup with rock sugar 42 g 65,000 2.7
Bird’s nest soup with rock sugar 42 g x 6 bottles 380,000 16
No

Babi
Bird’s nest soup for kids 42 g 65,000 2.7
Bird’s nest soup for kids 42 g x 6 bottles 380,000 16
Sugarless bird nest concentrate 195 g 745,000 31

Note: g = gram; VND = Vietnamese dong; USD = United States dollar.

Source: Company's website, with a conversion rate of 17686 VND = 1 CAD on November 08, 2023.
Do

This document is authorized for educator review use only by Akins Ogungbure, Troy University until Dec 2024. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
 Page 10 W34211

t
EXHIBIT 3: GREEN BIRD BRAND WITH ORGANIC BIRD’S NEST AND SUGAR

os
Product Price in Price in
VND USD
Green Bird – Bird's nest soup with rock sugar
Green Bird – Bird’s nest soup with rock sugar 72 g 37,000 1.56
Green Bird – Bird’s nest soup with rock sugar 72 g x 4 bottles 150,000 6.33

rP
Green Bird – Bird’s nest soup with rock sugar 72 g x 6 bottles 225,000 9.5
Green Bird – Bird's nest soup with Isomalt
Green Bird – Bird’s nest soup with Isomalt 72 g 44,000 1.86
Green Bird – Bird’s nest soup with Isomalt 72 g x 6 bottles 275,000 11.6
Green Bird – Bird's nest soup for kids
Green Bird – Bird’s nest soup for kids, strawberry flavour 72 g 42,000 1.77
Green Bird – Bird’s nest soup for kids, vanilla flavour 72 g x 4 bottles 164,000 1.77

yo
Green Bird – Bird’s nest soup for kids, strawberry flavour 72 g 42,000 6.92
Green Bird – Bird’s nest soup for kids, vanilla flavour 72 g x 4 bottles 164,000 6.92

Note: g = gram; VND = Vietnamese dong; USD = United States dollar.

Source: Company's website, with a conversion rate of 17686 VND = 1 CAD on November 08, 2023.
op
tC
No
Do

This document is authorized for educator review use only by Akins Ogungbure, Troy University until Dec 2024. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860