GROUP ESSAY STRATEGIC MANAGEMENT TOPIC ANALYSIS SFAS TABLE OF TH TRUE MILK

ABOUT TH CORPORATIONTH true MILK full name is TH dairy food joint stock company, under the management of TH Group.. TH true MILK's policy is to place the group's own interests in the com

MINISTRY OF EDUCATION & TRAINING BANKING UNIVERSITY OF HO CHI MINH CITY

Trần Thị Thùy Dương – 050606180073 Nguyễn Đức Huy – 030805170303 Phạm Lê Quỳnh Hoa – 050606180118 Nguyễn Thị Phương Thảo – 050606180363 Nguyễn Trần Xuân An – 030334180002

TABLE OF CONTENTS

ABOUT TH CORPORATION 3

WHAT IS SFAS? 4

1 Finance 8

2 Brand Positioning 9

3 Production Technology 11

4 Products less variety 13

5 Dairy industry still has potential for development 14

6 Market entry barrier 16

7 Substitutes 17

8 Competitors 19

CONCLUSION 22

REFERENCE 23

TABLE OF FIGURES

Table 1 Vietnam dairy market revenue forecast for 2020-2025, source Babuki 15Table 2 Milk nutrition chart, source Brands Vietnam 18Table 3 Dairy industry market share in 2020, source SSI research 20

ABOUT TH CORPORATION

TH true MILK full name is TH dairy food joint stock company, under the management of

TH Group The business was established in 2010 with financial advice from Bac ACommercial Joint Stock Bank

TH true MILK's policy is to place the group's own interests in the common interests of thecountry, not seeking to maximize profits but rationalizing benefits with 5 core values[CITATION THG \l 1066 ]:

For true happiness

For public health

Completely from nature

Environmentally friendly - Out-of-the-box thinking

Harmony of interests

Although only established for more than 10 years, TH true MILK has achieved successand contributed a lot to society with 3 times being honored as National Brand, winningthe Asia-Pacific International Quality Award [CITATION Tha21 \l 1066 ] 2021,becoming the first Vietnamese enterprise to export fresh milk to China [CITATION THG1

\l 1066 ] The Group also cares and contributes to the environment when co-founding theVietnam Business Alliance for the Environment, is a key member of the VietnamPackaging Recycling Alliance (PRO Vietnam) with 18 companies and groups leadinggroups such as Coca-Cola, La Vie, NutiFood, Saigon Co.op, [CITATION Pac \t \l

1066 ]

TH true MILK is still continuing to carry out its mission for public health with productsthat meet the criteria of clean, organic and good for customers health.

WHAT IS SFAS?

The SFAS (Strategic Factors Analysis Summary) Matrix summarizes an organization'sstrategic factors by combining the external factors from the EFAS Table with the internalfactors from the IFAS Table The framework generates an insightful snapshot of theprevailing, holistic strategic equation for each company by identifying, weighing,prioritizing & ranking significant strategic factors present in the internal & externalenvironment

When hear about the definition of SFFAS, we tend to think of the SWOT matrix whenboth refer to the strengths, weaknesses, opportunities and threats that business has faced

SWOT and SFAS both presenting 4 factors very clearly, easy to see and easy tounderstand the results The preparation and completion of these two matrices also doesnot take too much time when mainly based on the subjective opinion

However, this also leads to the fact that the results of SWOT and SFAS are not highlyauthentic when there are not many studies and investigations to verify the factors of theenterprises mentioned At the same time, both do not have a clear analysis betweenstrengths, weaknesses, opportunities and threats without considering the relationshipbetween factors, when a factor can be both a strength and a threat Weaknesses, oropportunities are also challenges of the company

SWOT and SFAS also have obvious differences when:

Do not rank the rating of each element Rating each element

Present all four factors in turn, but do not

summarize the problem

There are comments to help readers easilygrasp the issue after each mentionedelement

The maximum number of factors to be

considered is not specified

Specify up to 10 factors, placing the focusand most important factors on the IFAS andEFAS tables

 SFAS Table

Strategic

Factors Weight Rating

Weighted Score

Duration

Comment Short Intermediate Long

capital mobilization for businesses and ensuring that business and

investment operations are conducted on a constant and continuous manner.

Brand

Assert the product's worth and the

company's clout

Production

Brings tangible benefits to businesses, creating greater profits while still meeting client demands

Products

less variety .10

TH true MILK has only a few basic types of milk

TH true MILK's products have high prices

of the epidemic Export output output

Many are headed for milk

substitutes for various reasons

Products ideas are easily imitated and dumped

1 Finance

Weight – 0.13

In today's business activities, finance helps businesses:

Control the financial flow of all business activities or production of the organization:

Perform currency checks and conduct regular and continuous analysis of financialindicators Specifically, those criteria are: financial structure, solvency, performance anduse of financial resources; specific indicators of profitability

Leverage stimulates and regulates business activities: The distribution function of

corporate finance in accordance with the law will make corporate finance become aneconomic lever that affects productivity growth and profit compared to invested capital

Deciding on investments and funding: Planning is not enough, leaders or financial

managers must decide on effective methods of implementation, and identify investmentsand finance investments in assets, technology, people, etc how to be reasonable Fromthere, profits can be grown appropriately compared to the investment in fixed assets,machinery or from upgrading current production technology to meet market demand

Closely monitor and inspect all aspects of production and business activities of enterprises: Through the form, daily monetary expenditure, financial situation and the

implementation of financial targets Business leaders can generalize and control allaspects of business activities, timely detect problems in business From there, makingdecisions to adjust activities in accordance with actual developments

Rating - 4

The investment in building the largest dairy factory in Southeast Asia helps TH Milk tohave rapid development steps Launched in October 2009, TH quickly left its mark on theVietnamese dairy market with the strategy of "True milk - real milk" This businessaccepts a huge initial investment to build a feed area, build a herd of cows, production,and a distribution and retail system in the market

In addition to capital from shareholders, the group received loans from BIDV andVietnam Development Bank (VDB), Nghe An branch and Hai Phong bank (MaritimeBank).

TH Milk also received investment advice from Bac A Bank, where Ms Thai Huong is theGeneral Director This bank used to be a shareholder, holding 7% shares of TH Food Milkcompany according to a 2014 report

In addition, TH Milk is also supported by the Israeli Government with an investmentpackage worth 100 million USD Among the 3 companies operating the dairy business,

TH Milk Food has the largest charter capital of 3,800 billion VND, the other twocompanies have a charter capital of only a few hundred billion [CITATIONTheLeader2018 \l 1033 ]

It is clear that the IPO plan in the next few years will solve the problem of financialresources for the group's ambitious dairy business both at home and abroad

2 Brand Positioning

Weight – 0.11

In the first step of building, brand positioning aids businesses in identifying competitorsand market trends Following that, brands devise unique tactics for effectively reachingcustomers and ensuring smoother communication operations

In addition, brand positioning is a useful tool for future business expansion You don'thave to invest a lot of money to establish a brand strategy and earn a good reputation withclients

A good positioning signifies that the brand occupies a specific space Customers willalways prefer a respectable brand over one that simply talks about speculative profitmargins As a result, brand positioning will attract loyal customers, providing a strongbasis for future growth

In the later stages of the business process, it is generally easier to expand and segmentitems with a brand that has firmly established itself in the minds of customers Then youwon't have to spend as much money on communication but will still have a goodreputation in the market.

In summary, brand positioning provides a firm basis for organizations at all stages ofdevelopment and expansion

Rating - 5

TH true MILK liquid milk has succeeded in positioning the word "clean" in the minds ofcustomers with the slogan: "Truly natural", "The essence of nature in every drop of cleanmilk"

Before 2008, Vietnamese milk was not yet named on the world map From that startingpoint, TH created the first revolution - it was the clean fresh milk revolution, opening anew path for Vietnam's dairy industry Pioneering the application of high technology inagriculture, Ms Thai Huong and TH Group launched a $1.2 billion dairy farming andmilk processing project After only 5 years- 2015, TH Group has made its mark with thelargest high-tech dairy farm in Asia Before that, Vietnamese dairy products have existedfor decades, but there has never been a fresh milk award From 2010 to now, internationalawards have continuously named TH's fresh milk products such as World Food Moscow(4 consecutive years from 2015 to now), ASEAN Best Food Product 2015, GulfoodDubai 2016, Stevie Awards 2018

TH has pioneered to become a pioneer enterprise that clearly states the origin of inputmaterials on product packaging - the most important factor constituting milk quality.Under the direction of Ms Thai Huong, TH made recommendations to make the dairymarket transparent in Vietnam, proposing that enterprises must clearly indicate the origin

of input materials on product packaging and authorities It is necessary to conduct areview, inspection, and classification of dairy products circulating on the market andstrictly handle violations when there are violations And TH is also the first enterprise in

Vietnam that is allowed to write on the packaging as clean fresh milk [CITATIONBáoTP2018 \l 1033 ]

To maintain its brand position, TH Group has proven it with its products, not justmeaningless brand promises spread on social networks

3 Production Technology

Weight – 0.13

Applying new technological processes and modern technologies in the production processbrings competitive advantages to many enterprises, helping them to assert their position inthe market When new food products are created according to technological standards, thequality meets the standards to serve the maximum needs of users, thereby attracting thenumber of customers to help increase revenue every day Besides that; The application ofmodern technological processes helps businesses reduce labor costs, minimize labor costsand high productivity

The production capacity of an enterprise is not consistent with the size of the enterprisebut is assessed through the efficiency criteria of the production and business process Thatmeans that a small-scale enterprise can be assessed as having production capacity inparallel with a large-scale enterprise Enterprise production efficiency depends on manyfactors in which: machinery and equipment have a direct impact on the productionprocess Therefore, it is important for every business to modernize machinery andequipment or to innovate modern technology, and at the same time, it needs to develop itsown technology innovation plan to survive and develop in the long run

When technology is transferred to help modernize the production process; The operator,the main actor affecting it must apply it according to the previously built technologicalprocess, ensuring in the production process: the applied technological process does notcause any errors to create high quality products, diversifying many new product lines,increasing output, labor productivity, and reducing the cost of buying raw materials,

TH Group is currently investing in many production and business projects in the field offood and beverage Prominent is the project "Milk raising and milk processing focusing

on high-tech application", producing clean fresh milk with TH true MILK brand Theproject operates under a closed production chain, implemented in October 2009 with atotal investment of 1.2 billion USD The project has a total herd of 45,000 cows in Nghe

An, setting the record for the largest concentrated dairy farm in Asia in 2015 [CITATIONBáoTNMT2021 \l 1033 ]

In December 2020, TH farm cluster in Nghe An was confirmed by the World RecordsUnion (Worldkings) as a World Record, which is the record of “Cluster of farms with hightechnology application with closed production process with the largest scale in the world”with a cluster of farms owning large and modern barns with leading advanced standards

in the world, applying 4.0 technology and modern equipment in all stages of a closedprocess (which uses electronic chips to control feed, veterinary medicine, estrus )

TH milk project has been expanded to many provinces, including Ha Giang, Cao Bang,Thanh Hoa, Phu Yen, Kon Tum and now An Giang

The project of dairy farming and high-tech milk processing in An Giang by TH Group,applying high technology, technology 4.0 and the quintessence of management sciencefrom the project of dairy farming and milk processing, achieved a record TH's world inNghe An continues to be applied with a closed process and meticulous care to createinternational standard milk cups TH's farm cluster in An Giang will also be designed andoperated with the world's leading modern technology such as: Breeding process, cow herdmanagement, barns using the advanced dairy cow management system Afimilk (Israel);New Zealand's veterinary and disease management process; Process and equipment forwater and waste treatment of Japan, Israel, the Netherlands [CITATION NDT2018 \l

1033 ]

4 Products less variety

Weight – 0.10

This is one of the important factors affecting the success of the brand and the competitionwith competitors The fact that TH true MILK has only a few basic types of milk such aspasteurized fresh milk and nut milk has led to a lack of choice for consumers.

Rating – 3

With the goal of providing clean and pure fresh milk, good for users' health, TH trueMILK not only focuses on developing and producing milk but also invests heavily inother dairy products to serve the needs of consumers

Therefore, milk products of TH true MILK clearly show a lack of variety and fewchoices TH true MILK's products focus mainly on liquid milk for adult customerswithout a separate product line for children or people with higher nutritional needs withpowdered milk

5 Price

Weight – 0.09

Price is always one of the top concerns of customers when deciding to buy a product Theobvious price difference with competitors has affected the brand that TH true MILK isbuilding Especially, TH true MILK's competitors are more affordable, although they havelong entered and had a large share of the market

Rating – 4

TH true MILK has difficulties when it has a higher price than its competitors from 3,000 dong/product At retail, TH true MILK's organic milk (box of 500ml) costs31,000VND compared to Vinamilk's priced (box of 1litre) at 55,000 VND As for thewholesale price, TH chocolate milk (500ml x 12) is more expensive at retail than 50,000VND with other milks

1,000-The reason is that TH's cows are produced by a closed process, industrial methods andfarmed Moreover, according to an industry source, in addition to domestic raw materials,