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Contents

I. Introduce: ........................................................................................................... 2
II. Vision, mission and objective: ......................................................................... 3
1. Vision: ............................................................................................................ 3
2. Mission:.......................................................................................................... 3
3. Objective: ....................................................................................................... 3
III.External enviroment analysis: .......................................................................... 5
1. Industry: M.Porter .......................................................................................... 5
2. The PESTEL Analysis of Vinamilk: ............................................................. 8
3. Opportunity and threat: ................................................................................10
IV. Internal eviroment analysis: ..........................................................................11
1. Tangible Resources: .....................................................................................11
2. Intangible Resources: ...................................................................................12
3. Strengths and weeknesses: ...........................................................................13
4. VRIN: ...........................................................................................................14
V. Crafting Strategy: ...........................................................................................15
1. SWOT analysis of Vinamilk:.......................................................................15
2. Combination and matching: .........................................................................17
3. Generic Strategies: .......................................................................................18

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I. Introduce:

Vinamilk is the leading producer of dairy products in Vietnam based on sales


volume and revenue. Vinamilk commits to bring you the nutrition solutions with
international standards, meeting the needs of consumers with delicious and
nutritious products and leading favorite brands in market such as: Vinamilk liquid
milk, Vinamilk yoghurt, Longevity sweetened condensed milk, Southern Star
Sweetened Condensed Creamer, Dielac powdered milk, Vfresh Fruit Juice, etc.

With above 40 years of establishment and development, Vinamilk has become


one of the leading dairy corporations in Vietnam, with its headquarter located at
No. 10, Tan Trao Street, Tan Phu Ward, District 7, Ho Chi Minh City. Vinamilk's
subordinate units, consisting of 3 business branches, 13 factories, 2 warehouses,
5 domestic & oversea subsidairies (2 domestic subsidairies and 3 oversea
subsidairies: Driftwood Dairy Holding Corporation (USA), Vinamilk Europe
Spóstkaz Ograniczona Odpowiedzialnoscia (Poland) and Angkor Dairy Products
Co., LTD (Cambodia)), 1 oversea associate-Miraka Limited Company (New
Zealand) and 1 representative office in Thailand …. Vinamilk has always been
creative and constantly striven to take the brand to new heights. On the upcoming
time, Vinamilk will maximize the local market and focus on seeking &
developing strongly the business opportunities in the international market.

In the position of the leading dairy company in Vietnam with products being
exported to more than 43 countries around the globe, Vinamilk awarded a series
of prestigious prizes from reputable national and international organizations: Top
300 most dynamic Asian companies (Asia 200) (Nikkei); Top 10 of Asia’s Top
1000 Brands (ranked fourth) (Campaign Asia-Pacifc (according to AC Nielsen));
Ranked first in Top 40 Companies with most valuable Brands (Forbes);
Certificate of “Vietnam’s first organic dairy cow farm under EU standard” (The
Control Union – Netherlands); Vietnam’s Top 50 Best Listed Company (Forbes),
Vietnam - ASEAN Best Corporate Governance Award, Top 10 Sustainable
Businesses in Vietnam 2016…..

The principal activities generating revenue and profit for the Company include:

• Processing, producing and trading of fresh milk, packed milk, powdered milk,
nutrition powder, yogurt, condensed milk, soy milk, beverages and other dairy

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products.
• Raising cattle: Growing dairy cows. Raising cattle is for the main purpose of
supplying fresh milk as raw material to manufacture the Company’s dairy
products.

WITH MORE THAN 200 SKUs which are grouped into the following categories:
Liquid milk Yogurt Powdered milk Nutrition powder Oat-cocoa Condensed milk
Ice-cream Cheese Soy milk Beverages

II. Vision, mission and objective:


1. Vision:
“To become the leading Vietnamese trusted brand on nutrient and healthy
products for human life and to be positioned one of 50 biggest dairy companies
over the world“
2. Mission:
“Vinamilk commits to bring the communities the best-quality nutrition source
that conveys our respectability, love and responsibilities for the people, life and
society”
3. Objective:
Goals:
“At Vinamilk, People, Product and Planet are three major pillars of sustainability.
Vinamilk affirms the materiality of these factors and considers them as the
foundation to develop the sustainability strategies and action plans.”

Goals Action Plans of the period 2017-2020

Enhancing the role of Sustainable » To evaluate existing situation of


development in the strategy and sustainable development in the world, in
management of Vinamilk Vietnam and at Vinamilk.
» To define long-term and short-term
goals. To incorporate goals and
implementation plans into annual
operation and business activities.
» To consult guidance from
Subcommittee of Development Policy
and Board of Directors on orientation

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and trend to set up the annual sustainable
development goals.

Doing business in a responsible way, » To incorporate Sustainable


following targets of Sustainable development goals into actual
development manufacturing & trading activities.
» To improve/update management
system and internal procedure to suit the
orientation on Sustainable development
and market trends.
» To set up/assign execution, control and
report groups.
» To propagate about interests, goals and
action programs of Sustainable
Development at Vinamilk to enhance
acknowledgement of stakeholders,
thereby positively affect and encourage
them to act towards Sustainable
Development.

Action matching with Sustainable » To consult feedback from independent


Development orientation of the world in evaluation organizations and
the Vietnam background stakeholders on goals, programmes and
actions of Vinamilk; thereby to adjust
and improve way and resources
accordingly.
» To update constantly the professional
knowledge, to enhance execution
capability for execution, control and
report groups.
» To recognize and evaluate properly the
achievements and failures, strengths and
weaknesses, challenges and
opportunities; hence to make
improvement and overcome for the next
planning work accordingly

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Objective  By 2020 the construction of 30 branches in the major
markets of Asia such as: China, Japan, Korea, India,
Indonesia, Thailand…
 By 2025, construction of 15 factories in China, Thailand,
India, Indonesia.
 2030 to occupy 30% of the Asian market in the field of
nutritional products. Construction of 500 thousand points
of distribution throughout Asia.

III.External enviroment analysis:


1. Industry: M.Porter
a. Micro-scale analysis by model 5 M. Porter forces:
Direct Competitions
- Calculate the market share of the value, Vinamilk and Dutch Lady are currently
the two largest dairy companies in the country, accounting for almost 60% market
share. Imported dairy products such as Mead Johnson, Abbott, Nestle.accounts
for about 22% market share, with mainly milk powder products. The remaining
19% market share belongs to about 20 small-scale dairy companies such as
Nutifood, Hanoi Milk, Ba Vi.
- Powdered milk is currently the most fierce competition segment between
domestic and imported products. On the milk powder market, imported dairy
accounts for about 65% of market share, Vinamilk and Dutch Lady currently
occupy the market share in turn 16% and 20%.
- Market segment condensed milk and water milk mainly due to the domestic
companies holding: only Vinamilk and Dutchlady alone, these 2 companies have
accounted for about 72% market share on the milk market and nearly 100% of
the condensed milk market, the rest is mostly held by other domestic companies.
The competition of dairy products water and imported condensed milk is almost
negligible.
- Currently, domestic dairy manufacturers are under pressure to compete on an
increase due to the reduction of tax for imported milk under the policy of tax cuts
of Vietnam when implementing the CEPT/AFTA commitments of the ASEAN
region and committed to The World Trade Organization WTO.
 Potential opponents
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- The milk processing industry is currently a profitable sector and a high growth
rate. The dairy market is rated as the market has a lot of potential for growth in
the future and this is also the market for profitable margins quite attractive.
- The domestic dairy market can continue to maintain a high growth rate in the
coming years since the top of the human consumption of milk in Vietnam is still
at a low level. Besides, the potential of the dairy market is still very large when
consumers of Vietnam dairy products are still very low. The average dairy
consumption of Vietnam is only about 11.2 kg per year, which is much lower
than that of other countries.
- The dairy industry now has huge growth potential. Industry barriers are also not
small for special companies in terms of capital and processing technology. In the
future, Vinamilk will be able to face many new competitors from abroad due to
the market economy and excellence in technology, capital, and source of input
materials. Therefore, the competitive pressures will rise from potential new
opponents.
 Provider's Negotiate capacity
- Dairy companies have the advantage of a bargain with farmers in the
procurement of dairy raw materials, where Vinamilk is a major buyer, accounting
for 50% of the country's milk production. Besides, the dairy sector also depends
on imported dairy raw materials from abroad. Thus, the trader's negotiate capacity
is relatively high.
- Quantity and scale of the supplier:
List of some of the major suppliers of Vinamilk

Supplier name Products provided

Fonterra (SEA) Pte Ltd Powdered milk

Hoogwegt International BV Powdered milk

Perstima Binh Duong, Box casing

Tetra Pak Indochina Packing carton and


packaging machine

- Vinamilk has 4 dairy farms in Nghe An, Tuyen Quang, Lam Dong, Thanh
Quang with about 10,000 dairy cows providing more than 50% of raw milk
material of the company, the remaining goods purchased from the farmers.

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Vinamilk is actively active in raw dairy material, does not depend on foreign
countries.
- Possibility of replacing suppliers ' products:
 Vinamilk to build 4 dairy farms, self-supply of raw milk. About raw milk
powder, due to the unqualified facilities and the technical current should
remain dependent on foreign supply, the company is not sufficiently
capable of replacing raw milk powder products. In addition, Vinamilk's
supplier replacement capability is also low due to the products of high-
quality suppliers and other suppliers who are not able to achieve the
equivalent quality.
 With all of the branches, suppliers always cause certain pressure if they
have the scale, the collection and the owner of the precious resource. Thus,
the suppliers of small input products will have very little power to negotiate
for the business even though they have a larger number but they lack the
Organization.
 Vinamilk-has restricted was the pressure from the supplier. Vinamilk can
autonomy be fresh milk source material, just depends on the source of raw
material milk powder. Moreover, the company Vinamilk has created
pressure for the supplier of quality materials, ensure the good quality of the
product. Vinamilk is not subject to pressure from suppliers due to the scale
and the owner of the high-quality materials and creates a higher position in
the provider, to ensure fair competition for the small retail supplier but high-
quality products.
 Bargaining power of customers
Customers are a competitive pressure may directly affect the entire
production and business activities of the industry. Vinamilk's clients are
classified into two groups:
 Customers: personal customers
 Distributor: supermarket, dealer.
 Both distributors and consumers all have a high position in the competitive
drivers from their purchase decisions. The company Vinamilk has limited
the pressure comes from the customer by reasonable pricing of its product
line and give the correct information about the product at the same time
made the difference for the rival's products and the other alternative
products.
 The substitutes
-The dairy product is a product of nutritional supplements in addition to the
daily meal, with children, youth and the middle-aged man-milk has major
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impacts on health support. On the market, there are many types of flour,
grain, health-enhancing beverage but the products of quality and nutrient
levels did not completely replace the milk
- Currently, on the market, there are many products competing with milk
products such as green tea, coffee cans, soft. However, due to the cultural
characteristics and the health of people Vietnam, not the products can replace
the milk. On the other hand, the characteristics from the alternative product
are sudden and unpredictable to be so though they are in high positions but
the dairy sector is still facing the pressure of substitute products should
always be trying to improve their products for compliance with consumer
tastes.

2. The PESTEL Analysis of Vinamilk:


The current environment have the huge influence the performance of company.
Therefore, the PESTEL Analysis is very important for company to analyze the
market.
Political Environment: Vietnam is a country with a stable political institutions
that facilitate doing business in Vietnam. Moreover, Vietnam is a peaceful
country without war and terrorism. Top five of happy countries in the world. The
government has many policies to support milk industry for running business.
However, Vietnam is a mixed economy so government stills play the big role in
market. Vietnam government decrease the foreign trade barrier to attract more
investment. Especially the government have more tax policy to support the milk
industry.
Economics Environment: The Vietnam’s GDP trend increased day, it is a great
opportunity for business. It means that the income and life will go up and the
demand to spend money is high. However, the inflation rates is also high that
mean the cost of production will increase. It will effect on the price of Vinamilk
product in market. Vietnam is a member of WTO is a big pressure for local
business to compete other foreign competitor. In addition, it is also help company
to expand the business scales and attract more foreign investment.
Social – Cultural Environment: Vietnam is a young population country; it will
lead the consumption of milk product in market. According WTO, Vietnam's
average income 1300 USD each person in 2010 and the buyer in middle class is
high. Therefore, they are the important customer that company should focus on.
They will buy product not only for them but also for their children. The demand

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for improving the health and beauty increased so they need a product that can
meet their satisfaction such as fresh milk.
Technological Environment: Milk Joint Stock Company Vietnam (Vinamilk)
is still the leading enterprises of the milk processing industry of Vietnam.
Vinamilk leaders always factor in science and technology; depending on funding,
market demand and product structure to convert technology investment timely.
Therefore, customer will have a lot of information about company and company
can build the trust and customer’s satisfaction. It play a big role in business
therefore Vinamilk have a modern system from European countries of advances
technology.
Environment factor: Company should focus on the waste disposal system in
order to reduce the pollution. They need to use reasonable, saving natural
resources, develop clean energy, renewable energy and boosting recycling,
reuse and waste reduction. Company also develop and use the safe and fresh
material.
Legal factor: Vinamilk must ensure the production, which are safety and health
for customer by using modern system. Company should follow the rule of food
safety. Vietnam has many different tax rates so it will make difficult for any
company. It also effect on the price decision of company.

The average GDP growth rate in the period 2004 - 2008 is high. Whereas the
population growth was constrained led to the average level of income per capita
GDP Increase year by year.

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In 2008, the landmark of economic development in Vietnam has moved from the
group of countries with the lowest income to the group of countries low average
income.
3. Opportunity and threat:
a. Opportunity
 The Government’s preferential policies for the dairy sector
 The source of supplied materials are receiving the help of government,
imported raw materials have decreased tax rate:
- Imported tax raw milk is lower as committed to the WTO, this is the
opportunity to reduce production costs while raw milk powder imports
account for 75%
 A high force of prospects and big demands
- Viet Nam has a young population structure (36% of the population) and
population growth of over 1% per year, this is a very attractive market.
- The per capita income increases above 6%/year.
 Competitors are being weakened due to issues related to quality and
perspectives Vietnamese users are being met:
- Competitors are losing consumer confidence, this opportunity for
Vinamilk to expand its section in Vietnam Dairy field exam.

b. Threat
 Vietnam's economy is not yet stable.
 Joining the WTO with the opportunity of foreign milk firms entering
Vietnam market.
 Market involvement of a strong competitor:
- The competitive milk market is drastic when there are many companies
involved, especially the major dairy companies in the world such as
Nestle, Dutchlady, Abbott, Enfa, Anline, Mead Jonhson,...
- The tax cuts that Vietnam has pledged to join the WTO is to reduce the
tax of powdered milk from 20% to 18%, condensed milk from 30% to
25% → This is an opportunity for Vinamilk's competitors to be easier to
enter the Vietnamese market.
 Unstable input Source:
- The current dairy cow breeding in Vietnam is mainly household (95%).
Total raw milk production only meets 20 -25% of the raw milk content

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- The cost of dairy feed accounted for 70% of the sale price This is the
main cause leading to high raw material price, while the entry price of the
dairy companies is low
 Customers:
The export market has many risks and psychological likes to use foreign
goods of the customers
- More than 90% of the export profits come from the Iraqi market – this is
a market that is risky in both politics and economics. As a result,
Vinamilk's export profits have not yet had a solid static.
- The field of sensitive business, directly affecting the health of consumers,
requires businesses to always ensure the quality of products. Food safety
issues can be more consumer-shy and thorough when using dairy products.
- The psychology of using Vietnamese foreign people is a big challenge
for Vinamilk and industry enterprises

IV. Internal eviroment analysis:


1. Tangible Resources:
 Physical resources:
Facilities modern techniques are one of the key factors contributing to ensure
product quality. The company always innovation, investment in equipment
line and modern production technology, the most advanced at the global level
(from countries with technology and equipment developed dairy industry as
Sweden, the US, Denmark circuit, the Netherlands, France, Germany,
Switzerland) to ensure quality and food safety.
After more than 38 years of development, VINAMILK has become one of the
leading companies scale Vietnam and contributed greatly to the prosperity of
the country. The subordinate units of VINAMILK - including 3 subsidiaries,
15 factories, two warehouses and three subsidiaries are creative, relentless
efforts to brand to reach new heights.
 Finacial resources:
Production and business result continues rising with remarkable growth speed
and leading position in its milk marketing. Total revenue in 2009 increase 29%
to the same period in 2008, passing 17% of the plan given by General Meeting
of Shareholders. Profit before tax doubled in 2008. Total property in 2009 is
8.482 billion dong which increased 2.515 billion dong correlatively over 42%
towards to 5.967 billion in the first half of the year. This includes ownership

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fund that is 6.638 billion dong raising 1.876 billion correlatively increasing
39% in the first half of the same year .
 Organizational resources:
Distribution network widen over 240 distributors àn over 140.000 retailers for
all 64 cities in the country.Experienced sale team including 1.787 salespeople
in all over the country
 Technological assets: Vietnam Dairy Factory is equipped with production
lines sterilized milk with modern equipment and advanced production
technology currently leading. The plant operates on an automated production
line, closed, from input to output of products.
Thanks to a combination of factors: advanced processing technology,
technology UHT sterilization and aseptic filling technology, products can
keep fresh flavor for 6 months without preservatives
Operating system-based solutions Plant automation Tetra Master, which
allows connecting and integrating the entire plant from raw material to
finished product for. So that the plant can control all activities that occur in
plants, monitoring and quality control continuously. Tetra Plant Master
System also provides all the necessary data can help plants to continually
improve manufacturing operations and maintenance.

In addition, warehouse management systems Wamas integrated ERP systems


management and automation solution brings Tetra Master Plant seamlessly
smooth operation of the plant in the planning activities from production and
import raw materials to finished products warehouse of the company.
2. Intangible Resources:
 Human assets: Talented, experienced Leaderboard and with a team of
engineers and skilled workers.
 Branding: Reputation has been built through out 15 years and leading
number1 in the milk market .

External relationship:
+ Vietnam Airlines Corporation: Ho Chi Minh city, on August 8th, 2018,
Vietnam Airlines Corporation and Vinamilk Company has officially announced
strategic cooperation program with a target supplying international qualified
nutritious products to worldwide customers and together develop global brand.
Agreement to strategic cooperating between Vietnam Airlines and Vinamilk is
affected in 5 years time(2018-2023). All Vinamilk products will be appeared in
designed packaging in Vietnam Airlines’ flights, ensuring quality to serve for the

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only international 4-star airlines in Vietnam. Total Vinamilk product value
supplying for Vietnam Airlines’ planes is expected to increase 10% each year,
which shows steadfast and productive cooperation between two firms Also on.
+ FPT: October 10th,201 , FPT Retail and Vinamilk has officially signed for
cooperation in order to expand milk retailing system

3. Strengths and weeknesses:


a. Strengths:
Long history and strong foundation is the first and foremost strength to make
Vinamilk become a leader in dairy market of Viet Nam. Thanks to the
completely qualified products, competitive with the market existing goods,
throughout about 34 years operating history, Vinamilk has undoubtedly become a
familiar and trusted trademark in the mind of domestic clients. Moreover, it
has gained a great customer satisfaction andunderstanding as well as the
knowledge of the local market. Another remarkable factor that has actually
strengthened the Vinamilk’s leading positionis that it established wide and
deep distribution system located nationwide and being expanded over time.
The distribution network is not only the essence for long-term periodstrategy but
also the decisive factor for the success of a consumer goods producer. It allows
Vinamilk to bring its core products to consumers in a fast and effective way.
To be more specific, today the company has more than 1500 distributors, over
90000 retailoutlets in the entire country.Along with the solid distribution, in order
to do well Vinamilk always pay attention toinvesting in modern equipment
and factories. At the present, a range of modern factories located along Viet Nam
that helps to reduce transportation expenses and a system of advanced equipment
that helps to ensure the output products meeting the international standards. One
more aspects should be highlighted in the strength of Vinamilk is that its loyal
and cooperative relationships with both local and oversee suppliers allow the
company to have a stable material sources at the reasonable price. Today,
around 60% of all cow milk produced in Viet Nam is consumed by Vinamilk.
Last but not least, a professtional experienced management team in dairy business
and production, a transparent internal management system and tight and detailed
management procedures are other keys to success making Vinamilk a top
business of the Viet Nammilk industry branch.

b. Weaknesses:

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The low-income majority rural population is the first weakness having influence
on the operation of Vinamilk. In case the economy slowing growth in the coming
period, aslower income people will restrict the consumption of output in the
country, reduce profitsand sales revenue of the company. In addition, reducing
the duties for dairy products will be favorable conditions for imported dairy
products. With 50% of raw material to the company’s import and 30% of the
company’s revenues are from exports, the fluctuations in exchange rates affect
theoperation of the Company. Finally, Viet Nam’s WTO accession will create
conditions for foreign company to take part in the domestic market. It will
increase competition among companies in the industryas a result.

4. VRIN:

Resources or Value Rareness Imitability Non- Core Competitive


Capability sustainable competency advantage
Physical
√ √ yes yes
resources:
Finacial
√ √ No
resources
Tangible Organizational
resources √ √ Yes

Technological
√ √ No
assets

Human assets √ √ No
Branding √ √ Yes yes
Intangible Marketing √ Yes
External
√ √ No
relationship

Core Competencies: As one of the leading dairy producers in Vietnam,


VINAMILK rapid and sustainable development, holding the largest market share
in Vietnam milk, liquid milk sector which accounted for 51.3% market share of
the output (more than 45% market share in the domestic milk market, more than
85% market share in yogurt and condensed milk, in which 2 staples sector as milk
and yogurt continuous growth of over 30% each year).

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Competitive advantages:
 Branding: As we can see, Vinamilk is a strong and famous brand. Therefore,
launching a new product into the market and targeting our customers will
bring many advantages to the company
 Economies of scales when Vinamilk is well positioned as a leader in dairy
market of Vietnam.
 Vinamilk is undoubtedly a familiar and trusted brand in the mind of
Vietnamese consumers during the last 34 years.
 An extensive distribution network located nationwide and continued being
expanded over time allows Vinamilk to bring its core products to consumers
in a fast and effective way.
 Vinamilk’s high-quality products are the favourite brand of consumers.
 A range of modern factories located along Vietnam that helps to reduce
transportation expenses and a system of the state-of-the-art machinery and
equipment, being improved and expanded every year, that helps to ensure the
output products meeting the international standards.
 The loyal and cooperative relationships with both local and overseas suppliers
allow the company to have a stable material source at the reasonable prices.
At present, Vinamilk is the purchaser of about 60% of all cow milk produced
in Vietnam.
 Vinamilk owns a management team deeply experienced in dairy business and
production, a transparent internal management system and tight and detailed
management procedures. A strong spirit of self-renovation for improvement
of operation quality is absolutely penetrated from every managers to each
employee.

V. Crafting Strategy:
1. SWOT analysis of Vinamilk:
Strengths (S) Weaknesses (W)
1. Business scale is leading the dairy 1. Marketing is still weak, so it has
market in Vietnam not created an effective message
2. Vinamilk is a familiar brand and to promote consumers the pros
trusted by Vietnamese people in the of the company. The company
past 34 years. has products with 70-99% fresh
3. The distribution system extends milk but there is no way to
throughout the country and is promote that difference.

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continuously expanded over the 2. The company has a variety of
years to help bring the company's products for different
products quickly to consumers consumers, but the packaging
4. Products with good quality and specifications do not make a
consumers’ favorite difference to help customers
5. The chain of factories arranged recognize.
across Vietnam helps reduce 3. Purchasing raw materials has
transportation costs, invested in not made full use of supply from
modern machinery and equipment, farmers
is upgraded and expanded each 4. The company's investment in
year, products ensure international dairy factories in Da Nang is not
standards. effective
6. Long-term relationships with 5. Export market is limited and
domestic and foreign suppliers help unstable
the company to have a reasonable
supply of resources and stable
prices. Currently, the company is
purchasing 60% of fresh milk
produced in Vietnam
7. The management team is
experienced in the field of business
and milk production. The internal
management system is transparent,
the processes are specific and strict.
The sense of self-change to improve
the quality of operations is thorough
from management level to
employee level.

Opportunities (O) Threats (T)


1. Regulate certain prices when 1. The domestic powdered milk
purchasing fresh milk market is facing fierce
2. Have a more centralized source of competition from imported
raw materials, reducing the cost of products
importing raw materials thanks to 2. Opponents always have newer
inheriting the policy of developing products and better marketing
dairy farming from the government

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3. Develop and consume more and 3. Foreign competitors have better
more new product lines in model, ways to access the market and
style and quality. better marketing strategies
4. The income of people is increasing,
the demand for products is higher
and they are more interested in
healthy products.

2. Combination and matching:


SO analysis: Use the company's strengths to capture opportunities
 Vinamilk business scale is the market leader and the brand is trusted by
Vietnamese people for a long time. This is the strength that Vinamilk needs to
maintain and develop Vinamilk into the most prestigious and reliable nutrition
brand for all Vietnamese people through the strategy of applying scientific
research on specific nutritional needs to develop the most optimal product
lines for Vietnamese consumers
 Comprehensive investment in building strong brand, developing new product
system and improving quality of cold distribution system with the aim of
bringing cold products (yogurt, ice cream, pasteurized milk) to become a
commodity that contributed to the company both in terms of sales and profits
 Investing in market expansion of beverage products that are beneficial to
consumers' health through the Vfresh flagship brand in order to meet the fast-
growing consumer trend in the country. Thirst comes from nature and is
beneficial for human health
 Investing in market expansion of beverage products that are beneficial to
consumers' health through the Vfresh flagship brand in order to meet the fast-
growing consumer trend in the country for beverage that comes from nature
ST analysis: Minimize challenges and identify ways to use advantages and
strengths to minimize risks
 The domestic market of powdered milk is a fierce competition from
imported products so Vinamilk needs to exploit the strength and reputation of
Vinamilk brand as the most reputable scientific and trusted nutrition brand of
Vietnamese people to occupy at least 35% market share of powdered milk
market in the next 2 years.

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 Improve the system and quality of distribution to gain more market share in
markets where vinamilk has a low market share, especially in rural areas and
small cities

3. Generic Strategies:
a. Low-cost strategy:
 Vinamilk's goal when pursuing a low-cost strategy is to outperform its
competitors by creating products that cost lower than foreign companies
when there are over 40 active businesses, hundreds of milk brands of all
types, including many multinational corporations, fierce competition,
Vinamilk still stood firm and affirmed its leading position in Vietnam's
dairy market. In the years before Vinamilk's market share was only 17%,
in 2010 it was 25% and continued to grow. The company's milk and dairy
products account for about 50% of the national market share. Vinamilk's
product portfolio includes: key products are fresh milk, powdered milk and
added value products such as condensed milk, food yoghurt and drinking
yoghurt, ice cream and cheese.
 Vinamilk also foresees an increase in prices but the prices greatly affect
consumers because the income of Vietnamese people is not equal to many
other countries, so Vinamilk tries to make it possible for all classes to drink
milk at a reasonable cost (in fact, while in Thailand, each person drinks 23
liters of fresh milk / year, China is 25 liters / year, in Vietnam this figure is
only 14 liters / year)
 In order to bring products with "Vietnamese price" to Vietnamese people,
since 2009 Vinamilk has focused on cutting down the possible costs. In
addition to restructuring the brand, the company has implemented a
business strategy with uniform names and control of retail outlets. Before
implementing this new business strategy, Vinamilk's sales always depend
heavily on wholesalers. The company often has to deal with the situation
of stocking and discharging of big dealers according to the promotion
cycle. This arises unexpected phenomenon, which is price competition.
When applying the retail coverage strategy, sales of Vinamilk is no longer
dependent and thus the Company saves a lot of promotional expenses, this
new strategy not only increases operational efficiency for the Company but
also brings practical benefits to consumers. First of all, it's the freshness of

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the product like some brands with short expiration date: fresh milk, yogurt,
ice cream ...
b. "Differentiation" strategy:
 The goal of the strategy is to gain a competitive advantage by creating
products that are considered unique, unique to customers, satisfying the
needs of customers in ways that competitors cannot. . With Vinamilk, high
quality, reasonable prices and customers must be the center, this is also the
secret to the success of this leading dairy brand in Vietnam. "Product
quality is the best way of PR"
 The image of Vietnamese dairy cow on Vinamilk milk packaging has
become very familiar to Vietnamese people
 From the beginning, Vinamilk has determined that the supply of quality
and stable raw milk is especially important. Therefore, Vinamilk has built
sustainable relationships with suppliers through the company's evaluation
policy. Vinamilk provides financial support to farmers to buy dairy cows
and buy good quality milk at high prices.
 The company also signed annual contracts with milk suppliers and
currently 40% of raw milk is purchased from domestic sources.
Manufacturing plants are located in strategic locations near dairy farms,
allowing Vinamilk to maintain and promote relationships with suppliers.
At the same time, Vinamilk also carefully selected the location of milk
collection centers to ensure fresh and good quality milk. In addition,
Vinamilk also imports powdered milk from Australia and New Zealand to
meet production needs in both quantity and quality.
c. "Focus on differentiation" strategy
The goal is only to meet the needs of a certain market segment determined
through geographical factors, customer segments or product
characteristics. With a long history of being present in Vietnam market,
Vinamilk has the ability to identify and understand consumer trends and
tastes. This helps Vinamilk focus their efforts on developing products for
market segments that can bring high success. Currently, Vinamilk will rush
to rebuild its marketing department, short-term and long-term marketing
strategies with clear criteria, aiming to build a strong brand system. To
implement the business strategy the company has proposed the following
measures:
 The company pays great attention to designing new and suitable
packaging designs. Use media channels to promote brand image.
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 The company focuses on improving product quality, diversifying
product categories and researching new product lines to fully meet
consumer demand and contribute to dispersing risks to the company.
The company has over 200 items of milk and milk products: Condensed
milk, powdered milk, nutritious powder, fresh milk, Cream, yogurt,
Cheese. And other products such as soy milk, fruit juice, cake, instant
coffee, bottled water, tea, chocolate. The company also constantly
improved production technology, the cooperation with the National
Institute of Nutrition also created more consumer confidence for the
product.

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