Slide vinamilk international business strategy in ghana

2ndfastest growing economy in Africa (2017), with growth of 8.1% GDP per capita: 2363 USD (2021) Doing Business ranking went up 6 places, from 120th in 2018 to 114th in 2019 2ndfastest growing economy in Africa (2017), with growth of 8.1% GDP per capita: 2363 USD (2021) Doing Business ranking went up 6 places, from 120th in 2018 to 114th in 2019

INTERNATIONAL

BUSINESS PROJECT OF VINAMILK IN GHANA

G r o u p 1 1

DAIRY PRODUCT MARKET ANALYSIS

1.1 ECONOMIC ENVIRONMENT

• 2nd-fastest growing economy

in Africa (2017), with growth

1.1 ECONOMIC ENVIRONMENT

• Inflation rate is declining

• Strong position in international

and regional trade

• Trade agreements: Economic

Community of West African

States, AfCFTA, West African

Monetary Zone, Economic

Partnership Agreement with EU

Ghana’s inflation rate from 2000 to

2021

1.2 POLITICAL ENVIRONMENT

• High political stability

• Stable, friendly business environment, predictable market growth trends

• One of the best democratic countries in African continent

⚬ Adhere to democratic principles

⚬ Respect human rights

• Corruption

• Transparent tariffs: Scoring 4 in the index of transparency of tariffs, compared to Sub-

Saharan Africa’s index of 1.6

1.4 CULTURAL ENVIRONMENT

• High-context culture

⚬ Conversations rely on shared

knowledge

⚬ Building strong relationships

is more important than finishing tasks quickly

1.4 CULTURAL ENVIRONMENT

Comparison between Hofstede’s six dimensions of Ghana and Vietnam

1.4 CULTURAL ENVIRONMENT

• Language:

⚬ English is the official language

and language of business

⚬ Many languages spoken in

daily life

• Religion: 95% in an organized

religion (71% Christian, 19%

Muslim)

1.5 SOCIAL ENVIRONMENT

• Population: 33.5 million, with a growth rate of 2.23% (2022)

• More than 70 ethnic groups

• Young, 56% of citizens are under 25

• 40% of Ghanaians currently live in rural areas with limited access to transportation

• Poverty in the northern region

• View on time is flexible

• Prefer face to face interaction, personal visits

• Good coverage levels for rural

water, electricity, and GSM

signals

1.6 TECHNOLOGICAL ENVIRONMENT

• Many ports, can accommodate

containerized, bulk, oil and gas

shipments

• Rail network: within Ghana and through

other countries in the region

• Good road network

• Logistics performance index for quality of

trade and transport-related infrastructure

is 2.98 out of 5

CHAPTER 2:

DAIRY PRODUCT MARKET ANALYSIS

• Milk product consumption in Ghana

• Industry Attractiveness - Porter's Five Forces Analysis

• Competitors

2.1 MILK PRODUCT CONSUMPTION

A LIMITED DOMESTIC SUPPLY OF DAIRY PRODUCTS

The leading milk supplier in Ghana is only able to supply less than half of this quantity

The domestic supply is limited to fresh milk, yogurt, and locally made cheese.

=> opportunity for VINAMILK to expand its business by fulfilling that gap and capturing a larger share of the market

MILK IMPORT SITUATION

• Imports form virtually the entire supply on the Ghanaian market

• In 2021, the Ghanaian dairy import market was worth US$127 million, an increase

in value of 30% from the previous year (2020: US$97 million)

• Some big exporters to Ghana: New Zealand, Ireland, France

Bargaining Power of Suppliers

• low bargaining power

• a few major players

Bargaining Power of Buyers

• moderate bargaining power

• several options

• a few major players

Threat of New Entrants

• medium to low barriers to

entry

• demand is increasing

• demand is much higher than

the domestic supply

Threat of Substitutes

• threat is low

• domestic fresh milk production is underdeveloped

Intensity of Competitive Rivalry

• competitive, with a few dominant players

• the industry is growing, so there is still room for new players

2.2 INDUSTRY ATTRACTIVENESS -

PORTER’S 5 FORCES ANALYSIS

NESTLÉ GHANA

LIMITED

FREISLAND CAMPINA WEST AFRICA LIMITED GHANA LIMITED PROMASIDOR

FAN MILK PLC LIMITED GHANAARLA FOODS

CHAPTER 3:

PROPOSAL STRATEGY & ENTRY MODE

• Overview of Vinamilk

• Strategy & Entry mode

• Strategic plans and targets

3.1 OVERVIEW OF VINAMILK

Background

Vision & Mission

• Vision: "become a world grade brand in the food and beverage

industry, where people put all their trust in nutrient and health

products"

• Mission: "deliver valuable nutrition to the community with respect,

love and responsibility "

• Top 10 "Most valuable Dairy Brands in the World"

• Top 36 "Largest Dairy Companies in the World in terms of revenue"

Core value

Comparative Advantage

• Diversification in form & function

• Modern technology & quality assurance

• High Brand identity

• Large Distribution system

• New market & products research

• Source of raw materials in water

• R&D team investment

• Close production line & distribution system

• Attentive customer service

• High standard products

• Modern infrastructure

• Stable Information system

• Good material management

• Abundant domestic HR

• CSR activities

• Depends on foreign suppliers

• Scarcity of raw materials

• Declining export demand

• Distribution difficulties

• Culture barrier

• First 3 years: International Strategy

• Next 5 years: Regional Strategy

• Last stage: Global strategy

3.3 ENTRY MODE

First 3 years: Direct export

• Previous export to Africa

• Similarity between African countries

Quicker entering process Flexibility to access

Ghanian market Lower cost => Higher profits

Next 5 years: Joint venture

• No partner in Africa yet

• Partnership seeking

Choose potential partner

carefully

Meet local regulations

Create competitive edge

in Ghanian market

3.4 STRATEGIC PLANS & TARGETS

Phase Time

duration Action (OPERATING PLAN)

Entry phase 3 years

- Launching a targeted marketing campaign

- Establishing distribution channels

- Exporting products from Vietnam to Ghana

- Researching the material sources, doing market research, adapting product features, packaging, and branding.

- Marketing Vinamilk products’ benefits and values

- Investing R&D to improve product’s quality

Developing phase 5 years

- Introducing new products

3.4 STRATEGIC PLANS &

• Offter promotion discount

segment

CHAPTER 4:

ESTIMATED PROFITS AND GROWTH

• Budget and resource allocation

• Sources of funding and financing

Proportion (%) Amount (USD)

Budget allocation (in one year) Proportion Amount (USD)

4.1 BUDGET AND RESOURCE ALLOCATION

r e s o u r c e s a l l o c a t i o n

4.2 SOURCES OF FUNDING AND FINANCING

4.2.1 Sources of fund:

• Retained earning

• Ownership and equity financing: Vinamilk’s capital

and stakeholders’ funds

• International green fund

• Green financing instruments

• Government support from Vietnam and Ghana

• Crowdfunding

• Risk management funds and investment

• Debt financing

• Participatng in international fairs, voluntary projects or events in Ghana to present their sustainable values to Ghana and the world.

4.2.2 FINANCING STRATEGIES

Collaborating with partners in

the same industry

• Vinamilk can share the costs and profits with

Ghanaian Import partners, Suppliers, raw

materials sources and Delivery service

partners.

• Vinamilk can also collaborate with Vietnamese

export company that export other types of

agricultural products but have experience in

exporting goods to Ghana

Year 1 Year 2 Year 3 Year 4 Year 5 Total revenue 320.000 440.000 520.000 580.000 650.000 Total expense 191.600 232.900 287.100 382.150 440.600 Net profit before tax 128.400 207.100 232.900 197.850 209.400 Total taxes (10% VAT) 12.840 20.710 23.290 19.785 20.940 Net income 115.560 186.390 209.610 178.065 188.460 Growth rate (%) 0 161,29% 112,46% 84,95% 105,84%

4.3 PROFIT AND GROWTH

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