Midterm report international expansion market strategy for dried jackfruit of vinamit joint stock company

FOREIGN TRADE UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION ---000--- MIDTERM REPORT INTERNATIONAL EXPANSION MARKET STRATEGY FOR DRIED JACKFRUIT OF VINAMIT JOINT STOCK COMPANY Hanoi,

FOREIGN TRADE UNIVERSITY

FACULTY OF BUSINESS ADMINISTRATION

-000 -

MIDTERM REPORT INTERNATIONAL EXPANSION MARKET STRATEGY FOR DRIED JACKFRUIT OF VINAMIT JOINT STOCK COMPANY

Hanoi, May 2022

GROUP MEMBERS

TABLE OF CONTENTS Contents Page

INTRODUCTION 4

CHAPTER 1: SCREENING AND SELECTING EXPORT-ORIENTED MARKETS FOR DRIED JACKFRUIT OF VINAMIT JOINT STOCK COMPANY 5

1.1 Research about Vinamit Joint Stock company and Dried Jackfruit 5

1.2 Screening export-oriented markets for Dried Jackfruit of Vinamit Joint Stock Company 7

1.3 Opting potential foreign markets for Dried Fruit of Vinamit Joint Stock Company 10

CHAPTER 2: INTERNATIONAL-EXPANSION ENTRY MODE FOR DRIED FRUIT OF VINAMIT JOINT STOCK COMPANY 15

2.1 Strategy rationale 15

2.2 Market entry mode for Vinamit Joint Stock Company 16

CHAPTER 3: MARKETING MIX STRATEGIC PROPOSAL FOR VINAMIT JOINT STOCK COMPANY WITH DRIED JACKFRUIT WHEN ENTERING AUSTRALIA 18

3.1 Product strategy 18

3.2 Pricing strategy 18

3.3 Place strategy 18

3.4 Promotion 19

CONCLUSION 21

REFERENCES 22

Vietnam has experienced a high rate of economic growth over the last two decades and that trade has been a major contributing factor in the structural transformation and development of the country’s economy Without the country’s trading partners and foreign direct investment that saw its economic potential, Vietnam would still very much be an underdeveloped agrarian society During these last two decades, Vietnam has earned its status as a country that has become an important exporter in electronics, with electrical and electronic products being the top exporting goods surpassing coffee, textiles, footwear, and rice

Vinamit JSC is a leading company in agriculture processing industry They manufacture

a wide range of Soft Dried Fruits, Vacuum Fried Fruits and Freeze Dried Fruit products using state of art technology With 30 years of experience in dried fruit products, they want

to deliver the finest, natural, organic and healthy dried fruits to our customers around the world Most of the products are natural, no preservative, no SO2 and no additives Now Vinamit’s products are organic products certified by USDA, EU and China Organic For Vinamit, with more than 20 years of experience in doing business in the

market, with carefully prepared planting area and standard processing and packaging, the strict disease control affects the fulfilment progress The European and American markets currently have great demand, creating opportunities for businesses to push into these markets In this report, we tend to focus on Vinamit’s dried jackfruit products after carefully researching competitive advantages and potential of the company and the product The report follows the outline below:

Chapter 1: Screening and selecting export-oriented markets for dried jackfruit of Vinamit JSC

Chapter 2: International expansion entry mode fro dried fruit of Vinamit JSC Chapter 3: Marketing mix strategic proposal for Vinamit JSC with dried jackfruit when entering Australia

CHAPTER 1: SCREENING AND SELECTING EXPORT-ORIENTED MARKETS FOR DRIED JACKFRUIT OF VINAMIT JOINT STOCK COMPANY

1.1 Research about Vinamit Joint Stock company and Dried Jackfruit

1.1.1 Vinamit Joint Stock company:

a Company description:

- Vinamit Joint Stock Company was established in 1988 Through nearly 20 years of constant development, Vinamit JSC has perfected the manufacturing process and increasingly improved the quality of products Vinamit JSC can provide over 50% demand

of raw material through 40.000 hectare Vinamit's farm It also builds purchasing stations and cold storages across the country to ensure that all fruits are always fresh and quality assurance Vinamit JSC constantly innovates and improves the quality of input materials through the investment of laboratory and nursery farms

- Vinamit’s head office is located at 84 Nguyen Du Street, Ben Nghe Ward, District 1,

Ho Chi Minh City, Vietnam, while the main factory is located at No 81/3 Quarter 1, Tan Dinh Ward, Ben Cat Town, Binh Duong Province and also have three factories that are operated by more than 600 highly qualified personnels and 2000 part-time staff

b Vision and mission:

- Product quality is Vinamit’s number one priority, they do not compromise anything for its product quality Vinamit uses state of the art technology for all of its machinery and production line

- With the vision to elevate the values of Vietnam’s agricultural products on international platforms, Vinamit is constantly trying to push Vietnamese agriculture and agricultural products to the next level

- The Mission of Vinamit is to bring forth the spices of life from nature through its products As well as helping farmers in finding possible channels for post-harvest products

c Certification and achievements:

Over the years, Vinamit have gained various awards, certification and global standards of food safety such as:

- Vietnamese High-Quality Good Certification

- Certificate of HACCP

- HALAL Food Certificate

- KOSHER Certificate

- International Standard ISO 9001:2008

- FDA Certificate

- USDA Organic Certificate

- EU Organic Certificate

- Top 10 ASEAN Business in China

- APEA 2019 Corporate Excellence in Agriculture Industry –

d Origin of resources:

- To bring up the values of the local agriculture, Vinamit uses locally scoured material when it comes to third-party sourcing These fine materials are usually sourced in agricultural provinces, which include banana from U Minh forest, Mangos from Hoa Loc, Cocoa from Ben Tre, and many more

- Vinamit had also set up their very own organic farm, namely Vinamit Organic Farm in Binh Duong, with very strict regulations regarding organic farming practices Which covers improving soil, water, air, environment as well as biological factors Vinamit Organic Farm has been fully certified with organic USDA, EU as well as China Organic This farm had enabled Vinamit to have another material source as well as cultivating a new method to improve their products to comply with the international standards

1.1.2 Dried Jackfruit product:

With the goals of creating organic agricultural products and establishing a relationship between the farmers and consumers, Vinamit has been leading in the field of agriculture and the agro-processing industry in Vietnam More importantly, with the advantage of freeze-dried and vacuum-dried technology, Vinamit has turned the fresh organic fruits into delicious dried fruit snacks Fruits are dried at the peak of their ripeness, preserving their flavors, the natural nutrients elements, and the vitamins & minerals Vinamit is proud to deliver our consumers dried fruits that are crisp, light and bursting with flavor and nutrition

“With the best selection of jackfruit from our organic standard farms in addition to the advanced technology, we are able to deliver a dried fruit product that retains the natural color and taste from the freshly picked fruits Our jackfruit chips are made from fresh jackfruit with absolutely no preservatives, no artificial color and no artificial flavor.”

Dried Jackfruit product belongs to the Vinamit Vacuum Fried Fruit product line, inherited modern Vacuum Drying technology, with lots of advantages and benefits for consumers, for processing post-harvested fruit in order to keep the full flavor and retain the natural sweetness of fresh fruit

a Advantages of VINAMIT's Vacuum Sublimation Products

- The oil content in the product is less than 5% while the current snack products on the market have an oil content of more than 15%

- The brittleness and dryness of the product after drying is 5%

- The product does not deform, does not change color, does not caramelize, does not absorb oil, but retains the natural color and taste of food

- The product is dried in a vacuum so it is not invaded by bacteria

b Nutritional content and benefits of Vacuum-dried Jackfruits

- Dried Jackfruit lasts much longer than fresh fruit and is a handy snack on long trips without a freezer

- Dried Jackfruits are rich in fiber, vitamins and minerals

- Dried Jackfruit contains the same amount of nutrients as fresh fruit, but is concentrated

in a much smaller capsule

- Dried Jackfruit contains a lot of fiber and is an excellent source of antioxidants, especially polyphenols Polyphenols help improve blood flow, better digestive health, reduce oxidative damage and reduce the risk of many diseases

1.2 Screening export-oriented markets for Dried Jackfruit of Vinamit Joint Stock Company

Criteria 1: List of top dried fruits importers in the world (Selection criterion)

Businesses always have to take into consideration a variety of factors before penetrating

a new market First and foremost, import value is one of the most important measurements

of a country's attractiveness Those countries with the highest values of dried fruits import can be considered potential markets for businesses

Importers Import value in 2020

Criteria 2: Countries Vinamit has exported dried jackfruits to (Exclusion criterion)

Operating since 1988, Vinamit is considered one of the leading enterprises in the field of dried fruit today and a pioneer in organic agriculture in Vietnam Vinamit owns the entire technology of processing agricultural products, achieving a variety of international certificates such as: HACCP, FDA, KOSHER, HALAL, Organic USDA, Organic EU, Organic China, international standards ISO 9001: 2008

About 65% of Vinamit's products are exported to China, Taiwan, Malaysia, Hong Kong, Thailand, Singapore, Europe, North America Revenue and export turnover is growing at 35-45% per year

Criteria 3: Purchasing Power Parity (National currency units/US dollar)

The concept of Purchasing Power Parity (PPP) is a tool used to make multilateral comparisons between the national incomes and living standards of different countries PPP tries to equalize the purchasing power of different currencies, by eliminating the differences

in price levels between countries The basket of goods and services priced is a sample of all those that are part of final expenditures: final consumption of households and government, fixed capital formation, and net exports This indicator is measured in terms of national currency per US dollar

Criteria 4: Imports value growth of dried fruits from 2019 to 2020 (Selection criterion)

Imports value growth rate indicates how fast the market size is increasing In other words,

it is a key factor to be considered when calculating the development of a market in the international business environment In addition, this index must be taken into account in parallel with the total import value Low import value but high import value growth is preferable to high import value but low import value growth as the latter specifies a slowdown in market development

Rank Market Imports value growth (%)

According to 4 criteria, the top three potential countries are Australia, France, and Japan:

1.3 Opting potential foreign markets for Dried Fruit of Vinamit Joint Stock Company

To choose the most potential market for exporting Dried JackFruit of Vinamit Joint Stock

Company, we choose 5 criteria which are GDP per capita, Import turnover trend, Import

tariff rate, Average times of fruit consumption per day and Demand for healthy foods to analyze and score the criteria on the scale of 0 to 4

For each market:

1 poor

Criterion 1: GDP per capita

GDP per capita measures the economic output of a nation per person It seeks to determine the prosperity of a nation by economic growth per person in that nation Per capita income measures the amount of money earned per person in a nation This metric seeks to evaluate the average per-person income for a given region in order to determine the standard of living and quality of life of a population This index can partly help Vinamit Joint Stock Company

in deciding the selling price for the product The table belows show the GDP per capita of Australia, Japan and France in 2020

This criterion accounts for 20% of the final score

GDP per capita

Criterion 2: Import turnover trend

Import turnover is the total import value of goods (or one) imported into a country (or an enterprise) in a given period, converted into a determined single currency Import turnover trend is the change (increase/decrease/stable/…) in import turnover amount of a country This index can evaluate the economic-trade relationship of the two countries, from that, the firm can consider the potential market for export activities

This criterion accounts for 20% of the final score

According to statistics of the General Department of Customs, Vietnam's goods exports

to France decreased, but imports from France to Vietnam increased, leading to a trade surplus

of Vietnam to France in the third quarter of 2021, down 39.6% compared to the second quarter of this year 2021 and down 58% compared to the third quarter of 2020, reaching

$234.73 million In the first nine months of 2021, Vietnam's trade surplus of goods to France

decreased by 30.6% over the same period in 2020, reaching $986.9 million

Criterion 3: Import tariff rate

Import tariffs are taxes charged by the customs authority on the importation of goods into

a country Usually, the value of the imported goods determines the amount that will be levied

on them In some contexts, import tariffs also means import duties, customs duties, tariffs or import tax This index partly helps the firm in estimating costs, revenue, expenses, …This criterion accounts for 15% of the final score

Tariff rate, applied, weighted

mean, all products (%)

Criterion 4: Average times of fruit consumption per day

The average times of fruit consumption per day will support the firm in determining the demand of customers as well as the amount of money that customers spend for This table below shows the times per day that people in Australia, Japan and France consume fruit This criterion accounts for 20% of the final score

Fruit consumption

(times per day)

Criterion 5: Demand for healthy foods

Demand for healthy foods is one of the most important criteria which decide whether or not this product should be exported Because if we have favorable factors, but the market

does not have demand, everything may be meaningless This criterion we evaluate based on the index of obesity rate

This criterion accounts for 25% of the final score

Australia, France

Figures released by the National Health Reporting Commission to the Council of Australian Governments show that 28% of the total Australian population was obese in 2011-2012 Statistics show that 63% of the total Australian population is currently overweight and obese Statistics show that up to 1/6 of the total French population is suffering from obesity (accounting for nearly 16% of the country's population) This is an alarming level Therefore, the demand for foods containing less fat and cholesterol is increasing and encouraging for consumption

Japan

Japan is considered the thinnest country in the world as only 3% of its inhabitants are obese To get in shape, the Japanese have consistent nutritional principles that have remained for a long time in their lifestyle Less fat and cholesterol products such as Dried JackFruit have potential in the Japan market, however, compared to Australia and France, the demand for products in Australia is still more potential because the obesity problem is being encouraged to be solved urgently

 Summarizing evaluation criteria and scoring:

After considering the score and weights for each criterion, we would like to summarize

in the table below: