quản trị chiến lược công ty Vinamilk (bản tiếng anh RESEARCH ON THE STRATEGIES OF VINAMILK COMPANY)

RESEARCH ON THE STRATEGIES OF VINAMILK COMPANY quản trị chiến lược công ty Vinamilk Phân tích hoạt động sản xuất, marketing, nhân sự , tài chính của Vinamilk Đề ra chiến lược cho Vinamilk I. The company : VINAMILK II. Information about Vinamilk : 1. Vision, mission and core values • Vision : Vinamilk will become a symbol of international stature in the food and dink sector, that everybody can trust in safe and nutrition products. • Mission: Bring commmunities the most nutritiousness in all respects, love and responsibility with the life • Core values : Ethics : Respect established standards and realize ethically Equity : The company is equitable with employees, clients, suppliers and other stakeholder groups Integrity : Integrity, honesty in behaviours and all of the transactions Respect : Respect ourself, colleagues, the company, partners and have a cooperation with respect Compliance : Comply with laws, codes of conduct, statutes, policies and rules of the company Responsibility : We are always conscientious with works and we do with the highest responsibility Stable development : Our business focuses on the foundation of lasting benefits to clients, shareholders and other stakeholder groups Creation : We are very appreciative about innovation and creativity in quality, effective improvement of activitites Human development : Our business focuses on all of the knowledge and skill development for employees Clients at the centre : We always give consumers the best things. We focus on putting the clients at the centre of the business

RESEARCH ON THE STRATEGIES OF

VINAMILK COMPANY

1 Group name : Golden key

2 Members and missions :

I Information about Vinamilk : 4

1 Vision, mission and core values 4

3 The corporate model and subsidiaries, joint – venture company 7

4 Main business sectors 8

5 The list of main products 8

6 Bussiness area and distribution system : 9

7 The position of the company 11

II Societal environment analysis of Vinamilk company 11

1 Economic forces 11

2 Techlogical forces 13

3 Socicultural forces 14

4 Political-Legal forces 15

5 Population forces 16

6 Nature environment forces 17

III Task environment analysis of Vinamilk company 17

1 The current competitors of Vinamilk: 19

2 The hidden opponents : 22

3.Supplier : Number and size of the supplier: 24

4.Customers: 25

5 Alternative products: 26

IV Internal environment analysis of Vinamilk 28

1 Human factors 28

2 Major activities of the company 34

2.1 Financial management 34

2.2.Operations management 44

2.3.Marketing and sale 51

2.4.Service 52

2.5.Bargain 52

2.6.Research and development 53

V.Choose functions, tasks, business purpose of Vinamilk 58

VI Construction, Evaluation and Selection Strategic management for Vinamilk Company 58

1 Space matrix 59

1.1 Space matrix overview 59

1.2 Vinamilk determine the status and trend of strategic actions based on analysis of the matrix Space 61

2 SWOT MATRIX 62

2.1 Swot matrix overview 62

2.2 Analysis of Viet Nam milk joint stock company – Vinamilk with SWOT 62

3 The main strategy matrix 69

4 Conclusions 70

4.1 QSPM quantitative matrix 70

VII Conclusion 72

Documentations 73

I Information about Vinamilk :

1 Vision, mission and core values

Vision : Vinamilk will become a symbol of international stature inthe food and dink sector, that everybody can trust in safe and nutritionproducts

Mission: Bring commmunities the most nutritious in all respects,love and responsibility with the life

Core values :

- Ethics : Respect established standards and realize ethically

- Equity : The company is equitable with employees, clients, suppliers

and other stakeholder groups

- Integrity : Integrity, honesty in behaviours and all of the transactions

- Respect : Respect ourself, colleagues, the company, partners and

have a cooperation with respect

- Compliance : Comply with laws, codes of conduct, statutes, policies

and rules of the company

- Responsibility : We are always conscientious with works and we do

with the highest responsibility

- Stable development : Our business focuses on the foundation of

lasting benefits to clients, shareholders and other stakeholder groups

- Creation : We are very appreciative about innovation and creativity

in quality, effective improvement of activitites

- Human development : Our business focuses on all of the knowledge

and skill development for employees

- Clients at the centre : We always give consumers the best things We

focus on putting the clients at the centre of the business

2 The formation and development

- 1976: Formerly, this is the Southern of milk and coffee company ,

under the Gereral Department Food Industry, with 2 units under ThongNhat milk factory and Truong Tho milk factory

- 1978: The company added more 3 factory, that were Bich Chi mill

factory, Lubico candy factory and Bien Hoa coffee factory The companywas managed under The industrial and food Beside that, it renamed into

“The complex enterprise milk, coffee and confectionary I”

- 1989: Dielac powder milk enter operation, milk powder products

nutritional powder for children launched in Vietnam for the first time

- 1991: The “White revolution” starting formation built program

“fresh raw milk” area First time company introduced UHT milk productsand yogurt in Vietnamese market

- 1992: “The complex enterprise milk, coffee and confectionary I”

officially renamed into “Vietnam milk products company and under themanaged of The ministry of light industry

- 1994: In the strategic of expansion, development and response

market demand in northern of Vietnam, the company decided to buildHanoi milk factory On 7/10/1994, the company established sales branches

in Hanoi, business manager of the provinces in the Northern region

- 1996: The joint venture with JSC Quy Nhon Frozen to establish a

joint venture enterprise “Binh Dinh milk” Milk Factory went intooperation in Hanoi In 5/1996, the company established sales branches inDanang, business management the provinces in the central region

- 1998: In order to expand and develop the business activities in the

southwestern provices, the company established a sales brach in Can Tho

- 2001: Completed and put Can Tho milk factory in westhern came

into operational

- 2003: Officially converted into a joint stock company in November

2003 and renamed JSC Vietnam milk suitable for the active form of theCompany

- 2004 : Acquired Corporation Saigon Milk Increased charter capital

to VND 1,590 billion

- 2005 : Purchase of the remaining shares of the joint venture partners

in Binh Dinh Milk Joint Venture Company, renamed Binh Dinh Milk JointVenture Company to Binh Dinh Milk Factory Nghe An Milk Factoryinaugurated on June 30th 2005

- 2006 : Vinamilk officially traded on the Ho Chi Minh City Stock

Market on January 19th 2006 In June, An Khang Clinic opened in Ho ChiMinh City that provides nutrition consultancy services, pediatricconsultancy and general check-up all specialized centers This is the firstclinic in Vietnam administered by the electronic information system InNovember, startup programs dairy farms starting from the acquisition ofTuyen Quang dairy farm with 1,400 cows This farm went into operationshortly after

The Company makes strategic investments abroad by the joint venture

to build a milk processing plant in New Zealand with a capital of 10million, with 19.3% of charter capital Acquired 100% equity fromVietNam F&N Co., Ltd and renamed to Vietnam milk powder Company.This is a project to build a new 100% the second Milk Powder Factory of

company Acquired 100% remaining shares in Lam Son Milk Join StockCompany to become Lam Son Milk One Member Limited LiabilityCompany Opened and put Beverage Company in Binh Duong came intooperation Vietnam milk Joint Stock Company - Vinamilk was ForbesAsia honored and awarded the Top 200 Best business in Asia in 2012 This

is the first and only a company of Vietnam was Forbes Asia recognized inthis list

- 2007 : Buy 55% controlling shares of Lam Son Dairy Company in

September 2007, based in Le Mon Industrial Zone, Thanh Hoa Provinceand renamed to Lamson milk Join Stock Company

- 2008 : Completed and put Tien Son Milk factory in Ha Noi came

into operational

- 2009 : In September, inaugurated Nghe An dairy farms This is a

modern dairy farm in Vietnam with farm size is 3,000 cows

- 2012 : In June, Danang Milk Factory came into operational and

formal production

- 2013 : On October 21st 2013, the Department of Planning andInvestment in Thanh Hoa issuanced of certificates of business registrationfor Thanh Hoa Unified Dairy Cows Limited liability company Vinamilkheld 96.11% of the charter capital of the holding company and become thedominant power in this business

- On December 6th 2013, the Ministry of Planning and Investmentissuanced of certificate No 663 / MPI-outward investment for theCompany regarding the Company acquired a controlling share (70%) inDriftwood Dairy Holding Corporation, in California , USA

- 2014 : On June 1st 2014, the Ministry of Planning and Investmentissuanced of certificate No 667 / MPI-outward investment to the Company51% of the capital contribution with a foreign partner to establish AngkorDairy Products Company Co., Ltd in Cambodia Operational objectives isbuild dynamic processors of dairy products for the Cambodian market It isexpected that the factory had will go into operation in late 2015 On May

27th 2014, the Ministry of Planning and Investment issuanced of certificate

No 709 / MPI-outward investment for the Company contributed 100% ofthe establish subsidiaries Vinamilk Europe Spostka OrganiczonaOdpowiedzialnoscia in Poland Operational objectives are trafficked liveanimals, raw milk production, milk, dairy products, food and beverages

3 The corporate model and subsidiaries, joint – venture company

 Subsidiaries

 Joint – venture company

Vinamilk

VietNam

Bo sua Viet Nam limited liability company

Sua Nam Son limited liability company

Bo sua Thong Nhat Thanh Hoa limited company

A Chau Sai Gon food material corporation

Internation

Vinamilk Europe Spóstka Z Organiczona Odpowiedzialnoscia

Driftwood Dairy Holdings Corporation

Angkor Dairy Products

Co, Ud

Miraka Limited

Company name Ownership Voting rights

1 A Chau Sai Gon food material

4 Main business sectors

 Main activities make profit and revenue of Vinamilk :

- Process, product and business fresh milk, canned milk, powdered

milk, baby foods, yoghurt, condensed milk, soya milk , soft drink and otherdinks form milk

- Breeding : Breed milk cows, provide animal varieties and farming

techniques, methods

The conpany focuses on breeding to supply fresh milk resource inputsfor products form milk of Vinamilk

They are accounted for more

than 90% of the total sales

of the company

Dairy products include:

- Powdered milk, baby foods

- Condensed milk

- Water milk : Sterilized

milk, pure UHT milk, water

Main products include :

- Soft drink

- Juices : apples, oranges,grapes…

- Teas : Antiso, aloe vera,

- Dinks : Bottled water,daiquiri, …

5 The list of main products

There are more 250 products with main lines :

+ water yoghurt : probi, susu, ozela, vinamilk

+ yoghurt : probi, susu, probeauty, aloe vera, yoghurt from 100% freshmilk

- Powdered milk and baby foods :

+ Powdered milk:

For mother and baby For adults

Dielac MamaOptimum MamaDielac AnphaDielac Anpha GoldDielac Grow

Dielac OptimumDielac Pedia

Nutrition product for oldThe product helps strongbones

The product for diabetesThe product for losingweight

Daily nutrition product

+ Baby foods : Ridielac baby foods

- Condensed milk: Ong Tho, Phuong Nam star

- Icecream and cheese

- Soya milk, soft drink and drinks :

+Soya milk : Goldsoy, goldsoy canxi- D

+ Soft drink: Vfresh, Vfresh Juki, Vfresh smoothie

+ Dinks : ICY bottled water, ICY daiquiri, lincha, antiso Vfresh, aloevera Vfresh

6 Bussiness area and distribution system :

Yogurt, fresh milk and fruit juice have already available on VietNam and international airlines

Vinamilk’s products have available in 650 mid-small scalesupermarkets all over the country

The company have market on whole country and spreading abroad

 Domestic market:

The company have 13 produce factories can meet up to 3 market:Northern, Central and Southern Viet Nam Distribution offices have beenestablished in Ha Noi, Da Nang and Can Tho in order to launch distributionsystem on whole country Below are specific details:

Productive block and storage:

- 13 Produce factories: 3 in HCM city, 3 in Binh Duong, 1 in BienHoa, 1 in Can Tho city, 1 in Da Nang city, 1 in Nghe An, 1 in BinhDinh, 1 in Thanh Hoa and 1 in Tien Son

- 2 storage enterprises in HCM and Ha Noi, in charge of transportationand storage materials, products

- Business block: 3 distribution offices in Ha Noi, Da Nang and CanTho

- Raw material development block: View page 110 for more detail.

- An Khang clinic: 1 clinic in Ho Chi Minh in charge of periodiccheck up for employees and citizen

- 1 subsidiary – Vinamilk Europe Spostka … dealing with liveanimals, raw material to produce milk, milk products, foods anddrinks

 Distribution system prototype

Distributors

Retailer

Supermarkets

Supermarkets

Customers

Vinamilk showrooms

Vinamilk showroom

s ExportExport

Nam mainly gather in big provinces, cities and still developing sosupermarkets only occupy 9% of domestic sales.

This is a chain of Vinamilk showrooms In the end of 2014, the companyhave 74 showrooms on the whole country Planning to have 110showrooms in 2015 and in 2017 it will be 500 showrooms

7 The position of the company

With the boom, the company sets a goal that will reach a totalturnover is 3 billion dollars and ranks in the Top 50 big milk company forthe world in 2017

Vinamilk is Vietnam's largest milk companies continuously for morethan 37 years since it opened in 1976.The company's current market share

is over 50% in the dairy sector in Vietnam The growth rate of total sales,profits before tax and equity by an average of 5 years is 31%, 31% and28% respectively

With the boom, company sets goals,which will reaches total sales is

3 billion dollars and ranks in the Top 50 the world's largest dairy company

in the year 2017

The company was listed on the stock exchange in Ho Chi Minh City

in 2006 The company capitalization value on the market at the time of31/12/2013 was about 5.3 billion dollars and the 2nd largest value onVietnam stock market

II Societal environment analysis of Vinamilk company

1 Economic forces

According to the assessment of experts,the current state of the annualgrowth of the country's steadily increased

Chart 1: Vietnam's GDP growth in recent years

Total domestic product in 2010 was 6.78%, in 2011, GDP grew by5.89% compared to 2010 The average income of the people of Vietnam, as

of the end of 2010 was about $ 1,160, 2011 1300 USD.Demonstrateeconomic growth and incomes of people are on a high But overall, theeconomic growth rate is not high in Vietnam, leading to average incomeper capita is still low and unemployment rates are also high compared toother countries

The pace of growth also affects less to Vinamilk's operations

But now, with the development of economy, people's income levelincreases, improved lives as consumers pay more attention to quality andhygiene food, especially the use of dairy products

With the people's living standards rising, consumer spending ondairy products in households is also growing facilitate Vietnamese dairysector South development

However, in recent years the rising inflation rate, force people to cutback on spending, especially in rural areas, the reduction in consumption ofmilk is employment can take place before, this is the main cause ofproblems for the dairy industry But inflation has fallen over in recent years(2012 and 2013), inflation reduction and slump in the price of rawmaterials such as sugar (reduction of 5-10%), cream powder (50%) Thesemetrics are very beneficial to Vinamilk, because the raw materialsconstitute a large ratio of a company's production costs

The slow growth as people spend on products such as milk anduncomfortable Because of milk is an essential product to impact levels arerelatively low This more or less negative impact on the milk processingindustry in general and our country in particular Vinamilk Thus, the factor

of economic growth is seen as negative impact on business activities ofVietnam Dairy Products Joint Stock Company

b Interest rate factors:

Currently in the world, the interest rate is always the major concern

of the business loans The catch and predictable situation frees increase ininterest rates will help businesses better orientation in the future

In Vietnam, On 17/03/2014, the State Bank announced a series aboutreduced key interest rates Accordingly, the maximum rates applicable toterm deposits and term deposits of less than 1 month decreased from 1.2% /year to 1% / year; The maximum interest rate applicable to deposits withterms from 1 month to less than 6 months decreased from 7% / year to 6% /year Which is pulled by a series of banks to adjust interest rates, othersslightly higher This is a support action from the government enterprise,helping businesses get access to capital at a lower price, promote enterpriseproduction and business recovery

This factor has a positive effect and pretty strong businessperformance of the company The interest rate was gradually reduced,stabilizing the exchange rate, balance of payments improved Depositinterest rate ceiling has been adjusted from 14% to 12%, the interest rate ofcredit fell from a year earlier, this trend is accelerating and directing theflexibility of the market fluctuations and evolutions of inflation This is anopportunity for company to access preferential loans of the bank, maintainand expand production

2 Techlogical forces

Now, Vinamilk joint stock company is still the leading enterprise ofthe dairy industry in Viet Nam Vinamilk’s leadership always attachimportance to science and technology elements The company depends oncapital resources and market demands, product structure to convertinvestment timely technology Vinamilk has implemented threetechnological level assessments of the production Its objective is to knowthe starting point of each priod, that we can compare the company’stechnology level to the technology level of the world After eachtechlogical level assessment, Vinamilk adjusts investment activities oftechnological shifts At present, we can confirm that Viet Nam dairyprocessing sector in general and its Vinamilk in particular has reached theadvance, modern level of the world in both technology and equipment,throught some examples:

- The company invests and innovates the powdered milkproduction technology from “ type” to “ blowers”

- Technologies and equipments for the procurement of thefamer’s fresh milk, the company ensures the purchase of dairy cow andpromotes the dairy farming in the country

- The rapid sterilization technology in high temperature toproduce UHT fresh milk

two- piece cans

- The technological innovation cans extraction of powderedmilk to stabilize the quality of product, improve the preservation durationand ensure labor safety and hygiene…

Vinamilk is applying the equipment and production technology tointernational standard The company uses the modern productiontechnology and packing in all of factories Besides, Vinamilk also importstechnologies from Europe countries, such as: Germany, Switzeland, Italy

to apply the production line Vinamilk is the only company in Viet Namhas the machinery system uses Niro spray drying technology of Denmark,that is the world’s leading manufacturer about industrial drying technology,production Some companies, such as : Dutch Lady ( the company isattached to Friesland Foods), Nestle and New Zealand Milk also use thistechnology and manufacturing process In addition, Vinamilk usesproduction lines to international standard, it is provided by Tetra Pak toproduce dairy products and other valuable products

We can see that technology is one of factors, that impact the success

or failure of the company The above analysis, we can see that thetechnology and science have both good and bad influence to the bussinessactivities of the company So in the last time, we can see that how much thecompany’s leadership focused on this element developing

3 Socicultural forces

For Vietnam, the habit of using these products as well as sweets,canned products or the related milk products is not high This isunderstandable because the conditions of the situation of the Vietnameseeconomy is still difficult, and just get out of the list of the poorest countries

in the world (2008), the majority of people living on less than average ,access to these products is almost very little So this habit only a smallproportion of the urban population, relative living standards start formingthe habit of using dairy products This is one of the impact of the resultschange from the country the innovation, integration and development.Awareness, income, lifestyle, people's thinking changes Access to sources

of information more easily, through loudspeakers, newspapers, television,posters, banners makes people increasingly feel the increasing demandfor care and satisfy physical needs

In addition, the rapid population growth rate (1.5% - in 2015),especially the growth rate of urban population is higher than rural areasshould be aware of health protection is increasingly focused, especiallyissues essential nutrients for children only breastfeeding period gradually

helped form the habit of milk consumption for all ages in the later stages.According to statistics from the National Institute of Nutrition, currentconsumption of the Vietnam Dairy has increased significantly (30.3 gramsper day).

Programs and policies to encourage milk in school meals, offeringfree or very cheap price for the preschool and primary school children werealso mentioned in the government program of national development andpiloted in some areas with favorable conditions Namely the program ''School Milk '' with the state budget is done in Ba Ria - Vung Tau is aresearch highlights need for national replication

Vietnam culture is the culture of 54 ethnic mix ethnic groups, bothinclusive, both characteristic features of each ethnic group But overall, allcultures are very focused on family background, their race Any materialpossessions life savings, most parents are leaving the brothers support eachother, the children honor their parents

Return to the situation of our country, milk and dairy products such

as cheese, coffee, juice is extremely good For many people it hasbecome a habit of daily use Especially when creating confidence in thequality reputation as Vinamilk, it is easy to make loyal customers using thisproduct As one of the set points in the Vietnamese people's perceptionsare often used what I feel comfortable and confident that rarely changes

It should be added that one of the characteristics of Vietnamesepeople with body image and weight is low compared to the height plus thepsychological world want to prove themselves and create the attention ofothers Therefore one of the highlights in the company's advertisementsVinamilk is forming a healthy lifestyle, comprehensive development ofphysical and intellectual, human dynamic, creative, a role model wall Ofcourse, the efficiency gains are tremendous

Vietnamese people are interested in the health capital of the self, thefamily, but not like Japan, Korea which upholds the nation, popular localrestaurant, Vietnamese people tend to prefer foreign goods more domesticgoods by psychology often underestimate the quality of domestic goodsover imported goods But the effects of this problem is not significant for adairy company has built brands such as Vinamilk

Precisely because of these reasons, cultural factors - social alwaysstrong and positive influence on the business activities of Vinamilkproduction in particular and the dairy industry in particular

4 Political-Legal forces

Polictics is one of the factors that effects strongly to the business activities

of a company Goverment always attaches special importance to equalitybetween the different companies, focuses on bettering the enviroment forthe companies to develop

So, polictics has a huge influance to most of business activities ofvinamilk

Imported tax is usually high, so that imported milk is usually moreexpensive than comestic milk, which makes a lot of advantages for thecompanies producing milk in vn

Therefore, this is the factor that has a huge and positive influance tothe development of the companies

The fact that in the developed countries, the percentage of childrenhave access to dairy products very early and quite sufficient concentrationsand activities of scientific entertainment created for the developmentcompleted good weight, height, IQ And this of course created for thesecountries labor force of high quality And so Vietnam is no exception Thepolicy of the State that is desirable for the people have a right to enjoy thebenefits that nature Although our country is not a good competitiveadvantage for the production and processing of dairy products in largequantities The priorities of the Party and the State have for this areathrough the establishment of systems departments, policies issuedguidelines to steer development assistance to businesses

For Vinamilk particular, state support measures now in ensuring thesupply of inputs, infrastructure, experts, credit, marketing support, brandimage promotion Vinamilk

Based on the above analysis we can see the political environment,powerful law and is considered good to operate the business of the VietnamMilk Joint Stock Company - Vinamilk

5 Population forces

The Viet Nam population in particular and the world’s population ingeneral are developing It means the number of children more and more.This is the benefit condition for the dairy industry and products from milk

Besides, in Viet Nam has rapid speed of urbanization anddistribution of population has also changed a lot The econnomic structurehas moved by a reduction in the share of agricultural sector and an increase

in the share of industrial and services sector also change the structure of thepopulation Statistically, the proportion of the population work inagriculture accounted for over 50% of the country’s population, so thedistance can be shortened Not to mention the income of people areincreasing, thí number is more 1000USD/ person/a year The livingstandards of Viet Nam people is improving steadily

The rapidly growing population has strong impact on Vinamilkbusiness situation It is a good impact if the company has a right choice inattracting market and expanding market share

Moreover, the average life expectance of people is gradually beingimproved This also affects much to the business situation of the company

Not only children but also elderly also need nutrients As an increase inquality of life, people gradually invest in the purchase of milk

In the present life, human needs are very diversity, rich This richconsumption demand is a great opportunity for enterprises as Vinamilk

Althought the country has a great demand about dairy products butthe number of consumption per capita is less than the international world,because of limited sources of income

In summar, cultural factors have a great influence on businessoperations of the conpany

6 Nature environment forces

Food, especially in raw food in Viet Nam as well as other tropicalcountries usually has not higher quality than other temperate countries.Tropical vegetation usually has a hydratcacbon content is lignified highlybut low in protein Morover, mineral content is also low, unbalanced,specially lacks phosphorus So, the proportion of digestibility of tropicalvegetation is much lower than temperate vegetation Because theproportion of digestibility of tropical vegetation is low, so cows can not eat.That slows down growth of cows and the quality of milk is not what wewant

Temperature effect to milking cows : temperature affects behaviours,ability to receive and digest food, growth, reproduction and production ofmilking cows

Temperature and humidity affect food source A change in theweather is the cause of the disease in dairy cows

Temperature affects the fermentation of yoghurt Viet Nam is the hotand humid country, so the fermentation of yoghurt is relatively quick

Environment conditions also impact on the preservation of raw milkmaterial and products form milk The country has the relatively hightemperature, so material is easy to go off This affects much thepreservation method of per firm But there is the progress of science, sothat is not the great concern of dairy processing enterprises, including VietNam

Through the analysis , we can see that this is not the good influence

of the company, but the level of impact is not significant, so the compnayneed to have solutions to overcome, control to help business operations aremore efficient, saving input costs, reducing output costs, improving price ofproducts

III Task environment analysis of Vinamilk company

The environment sector (microfinance) are factors, these forces, theinstitutions of the outside of the business micro stature thatadministrators cannot control but they influence the activities and results of

operations of the business Analysis of industry environment can helpbusinesses evaluate the risks and opportunities that a company faces, andlearn how to identify the model as well as mission problems to be solved,and the key processes required for the business model of successfulbusiness These risks can to identify the model as well as mission problems

to be solved, and the key processes required for the business model ofsuccessful business These risks can impact on achieving the strategic goalswill be assessed and plans will be developed to handle this risk

Diagram : The forces that control the contest in the industry

The general situation of the dairy sector in Vietnam :

Production consumption and the growth of the market for milk powder, one

of the main products of the dairy sector in Vietnam :

Chart 1: Predicting the growth of milk powder market in Vietnam

the competitors

in the industry

the hidden opponents

the buyer (customer)

replacement products suppliers

Chart 2: Forecast consumption of milk per capita in Vietnam

In those years, the milk industry is one of the fastest growth ratesachieved in the food industry in Vietnam, with growth of over 20% peryear With a developing country, has the speed of urbanization andpopulation growth as high in our country, the demand for milk

sector in Vietnam still can not develop true potential by input sourcematerial depends too much on the supply of international market with about70% of the milk in the country I come from imports

Impact on the company: Vinamilk is one of the pioneering

enterprise in the dairy sector in Vietnam, so the company had to beadvantages, advantages, namely the leading domestic dairy sector withapproximately 39% of the market in 2013, the strong growth of demand forconsumption of milk is a very good opportunity for the developmentexpand the company in terms of other domestic enterprises in the sector arelow in comparison with Vinamilk

The opportunities and challenges of industry environmental bringsvery strong impact and good influence to the situation of the company'sactivities

1 The current competitors of Vinamilk:

a The competitive structure of the dairy sector:

+ Computer market share according to the value of Vinamilk andDutch Lady is currently the 2 largest milk producing company in thecountry, accounting for nearly 60% of the market Imported milk fromAbbott, Mead Johnson, Nestle account for about 22% of the market, with

to about 20 small scale dairy companies such as Nutifood, Milk, Ba Vi…

+ Milk powder is currently a segment of fierce competition betweendomestic products and imports On the market of milk powder, dairy

imports accounted for about 65% of the market share, Vinamilk and Dutch

Lady is currently holding market share in turn is 16% and 20%

+ At present the domestic dairy maker also is competitive pressure

on an increase due to the reduction in taxes for imported milk under the tax

cut policy of Vietnam when making the commitment to ASEAN's

AFTA/CEPT and commitment to the WTO Trade Organization

+ Market segmentation condensed milk and liquid milk is mainly

due to the domestic companies held: Only Vinamilk and Dutch Lady, 2

companies have accounted for about 72% market share on the domestic

market and nearly 100% of the milk market condensed milk, the rest

mainly by domestic companies hold The competitiveness of domestic

dairy products and milk imports almost negligible

+ The country's milk market is the market has more potential for

growth in the future, and this is also a market that profit margins are quite

growth rate because of the potential the market no longer more profitable at

the same time, the minutes of the special milk products is also relatively

low compared with other milk products

b.Industry structure:

Vietnam's dairy industry is scattered due to the many industry

manufacturers like Vinamilk, Dutch Lady, dairy companies are small as

Hanoimilk, Ba Vi , foreign dairy companies as Abbott, Nestle but the

companies with large market share as Vinamilk, Dutch Lady (nearly 60%

market share) is not enough to dominate the sector which is increasingly

subject to strong competition from other airlines, especially the milk comes

from foreign firms

Table : The strategies of some major competitors:

Strategies and key activities

The slogan: "Good

Food, Good Life"

The vision, "the

investment is

beneficial for the

company and good for

the community where

the company is doing

business."

The goal: "the leader

Direct competition

Market Entry Strategy policy brief by average price, the promotion and higher commissions to agentsbased on the inheritance of the South with consumers Lacogen

& Guigpz products, promote products through the general agent system in Ho Chi Minh City, Hanoi and throughout the

in nutrition, health and

Diversification of products Milkmaid, Milo, Nestcafe, Guigpz, lactogen

The goal: to become

the leading health care

companies in the

world

Direct competition,

confrontation

Market penetration strategy by lightning moderate price policy,the budget for big advertising and promotions

Use Gain leveraging other brands like Ensure,

Similac Focus on marketing activities in hospitals

Dutch

Lady

Slogan: "get ready for

a life"

Strategic vision: "to

improve life for the

people of Vietnam"

The goal: to become a

leading company

Direct competition,

confrontation

Fast penetration strategyThe price is moderate, strong promotion and advertising

Market Entry Strategy slowlyhigher prices, hitting the narrowsegment (good income), fresh milk used as leverage to sell a number of other lines such as yogurt

confrontation

Market entry strategy waged high price, new penetration, first just hitting narrow segments (high income) by distribution channel and aggressive advertising, promotion

Entering the market slowly, positive advertising,

promotion

Cheap, hit on niche segments (soymilk) and currently leading the soy milk segment

c.Barriers retreat:

+ Barrier technology, capital investment: the initial investment cost

of the dairy sector is very high, so when a company wants to withdrawfrom the dairy market will have difficulty in the recovery of investedcapital as machinery and equipment

+ Once entered the industry, the company will be bound by theworkers, bound to the government, relevant organizations, the strategicconstraints, this is the plan create pressure for enterprises intending towithdraw from the sector

+ The Vinamilk operate in a competitive industry as strong as thedairy sector requires companies to constantly invest in R & D, whileenhancing the marketing campaign, promote the image, causing hugepressure to the company in many aspects such as cost, revenue, profit But it is also a positive factor contributing to increased competitiveness andcreate development for Vinamilk

+ We see that the competition factor adversely affecting mostlyVinamilk but also actively contributed to urge Vinamilk rising constantlyevolving

2 The hidden opponents :

a.The pressure of competition from potential rivals depends on the following factors:

 The attractiveness of the sector :

+ Dairy processing industry is profitable rates and high growth,+ Our country dairy market is the market has more potential to grow in thefuture, and it is also profitable market attractive border

+ Domestic dairy market can continue to maintain the high growth rate inthe coming years, due to the consumption of milk per capita of Vietnamstill are low, the average milk consumption levels of Vietnam only reachabout 11.2 kg/year, pretty much lower compared to other Asian countries.+ However lucrative level between the group product has quite a largedifference Chinese milk powder products and is currently a senior productteam lead on lucrative, with effective yields of about 40%, the retail price

of milk, water and yogurt have lyrics about 30% the retail price.Condensedmilk market segment due to the needs and tastes of consumers on adescending should have the lowest response and reached about 12% theretail price

 The barriers to joining the industry:

+ Technical: this is a very important factor because it greatly affects thequality of the product as well as the brand of business Vinamilk inparticular as well as a few other companies in general have constructedsystems of modern production lines, advanced technology, superior

engineering creates a solid barrier to limit the competition to join theindustry.

+ Capital: a production line of milk worth an average of several dozenbillion, which is a small yet not investments to the construction costs, laborcosts, raw material costs so this is considered one of the most effectivebarriers restrict the opponents joined the industry

+ Commercial elements: dairy processing industry includes many channelsinvolved from breeding, processing, packaging, distribution to,

However, I still don't have a clear, specific standards for each stitch,especially the voice of the ministries are still separately led to the planning

of the dairy sector has not been as expected and causing many difficultiesfor the company in the production and distribution of new companyespecially established

+ As for distribution channels, this is a very important department decidessuccess or failure of a large dairy company, a major impact on sales, theCompany delivered over: dealers, small grocery, the supermarket (the mainmarket of the dairy company at this time due to changes in the shoppinghabits of consumers), in addition to other channels such as nutritioncenters, product introduction

creating established brand in the dairy industry will be extremely difficult

to confirm because of the quality of products as well as to compete withlarge companies

+ Material inputs: the majority of inputs to be imported from abroad(80%).While working, the state can not control the input source strict rawmilk.Therefore, the quality of the input of companies is not high,competitiveness with foreign companies lower

=> In sum, the current dairy industry has huge growth potential However,these hurdles are not small industry for companies especially for capitaland processing techniques In the future, Vinamilk will be able to facemany new competitors come from abroad due to the market economy andthe technical superiority, capital and inputs Hence competitive pressureswill increase from potential rivals

b.Impact on businesses:

Dairy industry is a highly profitable, it is both the opportunity and thechallenge to Vinamilk, the more our country deeper into integration,opportunities emerge to develop the market new schools as well ascompetitive pressures righteous home will also increase with each day ofVinamilk and other businesses This requires companies to constantlydevelop and overcome existing constraints and potential to cope with thenew challenges coming from the wave of integration

The potential competitors a strong impact on the situation operation of thecompany, urged the company to take steps to be prepared thoroughly

strategies rooms swift penetration of foreign leading companies in thesector joined the country forward line integration This factor alsoindirectly affect the operation of the company, adversely impact but alsohelp companies continuously improve and develop.

Number and size of the supplier:

Table 2: List of some major suppliers of Vinamilk:

machines

Vinamilk has four dairy farms in Nghe An, Tuyen Quang and Lam Dong,Thanh Hoa with about 10,000 cows provide more than 50% of the raw milk

autonomy in milk raw material, is not dependent on foreign

countries.Besides, the company also has partners who are dairy farms in thecountry

In addition, Vinamilk also import inputs from several other leadingsuppliers in the world

The ability to replace the products of the supplier:

due to material production facilities not yet qualified and technically shouldstill depend on foreign supply, the company has not yet afford milk powderproducts, substitute materials In addition, the ability of alternativesuppliers of Vinamilk also low due to the supplier's products are of highquality, the other providers can not achieve equivalent quality.+ Information about providers: in the current information era is always afactor in promoting the development of trade, information about theprovider have influenced the selection of suppliers of inputs for thebusiness

+ Review of the level of impact, Vinamilk to bear a major impact by thesupplier, especially of milk powder material sources of input, by thecompany dependent on imported resources from abroad.But Vinamilk has

fresh milk source material, just depends on the source of the milk

powder Moreover, the company has created pressure for the supplier ofquality materials, ensure the good quality of the product Is the largest ofthe country's milk procurement should the company have the ability tobargain with farmers.Vinamilk is not subject to much pressure from thescale by the provider and the owner of the high-quality materials and create

a higher position of the supplier

+ Weak impact on suppliers to Vinamilk bargaining power by the response

by Vinamilk is large, the source of the company's milk powder import isgreat but the company have more choice providers should the supplier notmuch influence

+ But directly affect providers, rather good to the quality products ofVinamilk, thanks to imported milk powder which sources quality milkpowder of Vinamilk not inferior to many with other foreign suppliers onthe market

4.Customers:

a.The amount of purchases of customers:

The number of people who buy influence directly to sales.Vinamilk'sclients was 2 groups: the first is the individual client and the second is thedistributors such as supermarkets, dealer

Customer segment:

So many ages, yogurt and fresh milk-sterilized are two sectors have the

two products was the homemaker most choice compared to the othergroups, accounting for 22.9% and respectively 22.1% of respondents andlittle disparity between income groups in the use of this product There areconsiderable differences in the use of dairy products and drinks in Hanoiand Ho Chi Minh.According to the census, the percentage of households inHanoi and Ho Chi Minh using pasteurized milk respectively 47% and 53%,

is the tomato is 55.1% 44.9%, yogurt drink, uh is 52% and 48%.In addition

to occupying a large proportion in the domestic market, the consumer'sconsumption in foreign markets (Australia, Cambodia, Iraq, Philippines,Usa ) also occupy from 10%-20% of the total revenue of the companythrough exporting

b The ability to convert customer purchases:

+ The product line of Vinamilk and other opponents of the current veryvaried, from sour milk, condensed milk, fresh milk to milk powder .Customers have a lot of choice the product line, but overall customerdemand for milk is fairly stable health care products, the company is notrun according to customer tastes as some service industries, fashion + In addition, customers can switch back and forth between Vinamilk andother competitors such as TH True milk, Ba Vi, Long Thanh, these

companies are now eyeing a majority of customer segments for eachcompany the quality and quantity of product lines suit every segment oftheir choice rather than covering all market segments such as Vinamilk,customers can change so many providers to compare suppliers level witheach other, namely TH True Milk Long Thanh and hit the customersegment income and above-average product quality is highly appreciated

by customers

+ Therefore the ability to switch suppliers the current dairy customers isvery high, not as stable as the choice between the product lines Effectsbargaining power of customers will now greatly increased, causingpressure for Vinamilk

c The difference of product quality:

+ Vinamilk is a leading domestic company in the dairy industry, there aremany competitive advantages compared to the competition, so that thecompany strategy is the leading choice of prices also such as marketcoverage, with advantages in capital, technology and many otheradvantages, with a consistent quality that the majority of customersaccepted while the lowest cost market, no business can can "race" now interms of price as well as market coverage with extensive distributionchannels to the retail from the artist

+ The purchasing power of customers is quite large Vinamilk but not sothat bargaining can work force impact and can adversely affect the businessperformance of leading a large company such as Vinamilk

Vinamilk has limited the pressure comes from customers by reasonablevaluation of its product line and launched accurate information about theproducts and create differentiation for those of rival products and otheralternative products

+ By analyzing the purchasing power of the customers strategic impact onoperations of the company, accounting for tastes, brand building successfor Vinamilk

Considering the level of influence, once customers have used to Vinamilk'sproducts, the company will develop, gain profit, even if the customer comeback to the company, the profit will decrease or cause losses, so this factorhas a positive impact, the negative medium companies

5 Alternative products:

+ The competitive element of the replacement product is as follows: Price,quality, culture, tastes, dairy products are the nutritional supplementsbetween meals to satisfy the ages client components.On the market thereare many types of cereal, drinks improve health but these products in

terms of quality and nutrition are not completely replace milk.+ Currently on the market there are many products next compete with dairyproducts such as green tea, coffee cans, soft drinks

+ Due to the culture and the health of Vietnamese people, not products thatcan substitute for milk.On the other hand, are on the rise due, so to meet thedemand constantly increasing in quantity and quality, Vinamilk dairyproducts of the dairy industry in particular and in general are constantlybeing improved so that the impact from the replacement product for theproduct lines of Vinamilk is negligible

+ Due to the nature of the dairy industry, the products are very low impactalternative but a negative impact on the purchasing power of customers aswell as the situation Vinamilk's turnover

Table : Matrix evaluation of external factors (EFE)

Numbe

reaction

weightedGPA

The world market

increasing = > Vietnam have competitive

advantages when exporting products

demand period

The domestic market

The economy

6 The State does not control the market

price of milk float

repeatedly fell

Politics – Law

10 Vietnam is a country with a stable

political system, legal system ventilated

12 rapid population growth rate 0,05 4 0,2

Technology

13 The advanced technology in the world

was born to support the dairy herd

nurture

Quality Management System

overlapping , inefficient

achieve high efficiency

inexperienced management, small farm

size

to put pressure on the dairy sector in

IV Internal environment analysis of Vinamilk

1 Human factors

Mai Kieu Lien chairman has nearly thirty years of experience in the dairy

industry and she holds a key role in the growth and development of the

company The other senior members have an average of more than twenty

years of experience in the field of production, distribution and sale of dairy

products Besides, the company has a team of strong middle management

to support the senior management and add their youth and enthusiasm for

the company development

 Model of organization

- The growth and success of Vinamilk during the past 40 years is the

result of hard work and dedication of all the members of the company,

under the guidance and wise leadership of key personnel - talented people,

bravery and always hard for the common cause of Vinamilk

- Organizational charts and management structure of the joint stock

company Vietnam Dairy



Policy of training and human resources recuitment company

Vinamilk are organized recruitment programs at major universities

across the country This is not just an opportunity for students to

participate in applying but also the opportunity for the students to learn,

discuss Vinamilk through which their professional orientation The

General Meeting of Shareholders

Control Board

Director of Internal Control

of the supply chain

Financial executive s

Project executive s

Marketin

g executive s

Business executive s

Executiv

e Director

of administr ative personnel Director board

General manager

recruitment activities occur porters ran right in school helped thestudents express confidence before the full potential employers There isalso the internship program Not only talent recruitment for the company,the company is interested in contributing to the social benefits in manyrespects Internship program in Vinamilk partly solve the needs rubbingreality of the students in the University Not only that the selection of asuitable job with the capacity, skills and interests are not easy decisionsfor the students So recruiting professionals Vinamilk Companyfacilitates the opportunity for workers, and training more skilled workersfor the company.

country and sent to study abroad

- Company supports 50% of the costs for advanced courses andprofessional qualifications of staff and workers wishing to study

- And in addition to the short-term training programs to raise the level

of professional staff and employees in the company

officials and employees help people learn and absorb new innovations atwork

With today's development strategy, Vinamilk determining factors are themost important people will decide the success or failure of the company.Should companies have policies for remuneration to employees as follows:

improved In addition to income from wages, workers also have moreincome from the profit is divided in proportion to their ownership in theCompany if the Company makes a profit

accordance with the provisions of law

- There timely reward policy for individual and collective contribution

to the Company, may take disciplinary action against those individuals whoact adversely affecting the interests and reputation for the Company

- Support and create favorable conditions for the employees toparticipate in training courses at home and abroad to enhance professionalknowledge and professional

Company increase in quality

appropriate wage policy and competition Deciding the remuneration ofeach board member and executive salaries must be approved through aformal process and transparency No member may themselves decide theirsalaries

- The salary and salary structure:

The level of remuneration should be appropriate to attract, keep andmotivate Board members, executive management board to successfullyVinamilk Part of the salary will be based on the results of operations of thecompany and the individual

- Limitations in recruitment: The company is still recruiting advantage

of people in the neighborhood, so the plant still does not have a staff ofqualified and skilled, so still need to foster and additional training

- Limitations in the training and development of human resourcestraining and professional skills training for employees has not yet beenfully implemented The cause of this is due to a large number of employeesand by the frequent application of technological lines to produce newtechniques should ask a staff team of qualified and skilled always ready toadapt with new technology

measures to motivate employees However, sometimes this work is notreally effective, has not been done thoroughly This requires humanresource management team to oversee the implementation of this work abetter way

 Solutions for human resources

 Focus on training and development of human resources in thecompany:

To achieve business objectives, the company needs to boost training andhuman resource development to create new air to the Company Thetraining and the very necessary but avoid massive training, high cost butlow efficiency Need to maintain the training in recent years Thematicexpansion of economic management to the members of the Company

In order to improve the quality of staff training at the University, theCompany uses the following measures:

the situation, school performance of officials and employees

- Need to schedule a time to study and work reasonable to createconditions for academic staff, but needs to ensure the business plan of theCompany

their training methods

- Companies should be encouraged by supporting training foremployees on time and on a certain terms to stimulate them,simultaneously with the preferential regime with the progress of labor thatresults from self bring the best training and material incentives

administration, the parts departments need to be well trained both inforeign language and computer skills, behavior and communication forlabor work

These salaries, fines, subsidies, insurance is one of the measures tocreate the basic motivation for employees and employee use of companyefficiency Bonus is a supplement to the salary, if appropriate reward willmotivate employees in the company always try our best to create themaximum effect to the Company

Penalty regime: As the company's business is always busy with work, soemployees have to undertake the job done on time by the Companyentrusted So in my opinion, to ensure fair payoff, the Company shall applythe following measures:

- For stealing the theft of assets of the Company, the Companydeclarations in the disciplinary and start completely pay the amount ofdamage

- For the mistake will proceed to the full discipline of the Company.

slowly 3 times in 1 month will be deducted from the salaries Company

- Attributed personal liability for the cases as capital losses or damage

to the property of the company, which must be discussed openly amongofficials and employees

In addition the company should apply 3 methods affect employees

as follows:

the company in order to enhance self-awareness and enthusiasm of thestaff This is the method of applying the rule to the psychological impact ofthe employee

- Econometric methods: using economic methods to create thematerial interest of managers to employees Economic stimulus rightimpact, flexibility in the ability to create and the enthusiasm of the staffbecause working people motivated

relationship management systems and corporate discipline, is the impact ofthe business owner to exercise his subordinates in the definitive decision,bearing binding requires employees to abide by the breaches will behandled Century woman establish order as in the workplace

Spiritual treatment: The use of proper qualifications, work arrangements

in line with the capacity of each school and facility, enabling eachindividual can be a form of enlightened spirit of the Company for officersand employees Companies should express sincere concern to theemployees in the Company as master name, family background, frequentlyvisited motivate subordinates, reduce the distinction between superiors andsubordinates Creating conditions for living together on vacation, fun,entertainment, avoid undue discrimination in the area of remuneration.Improve working conditions, improve the quality of sanitation in thecompany to ensure the health and comfort in the mood to work Lessapplicable flexible working time and proper rest mode Organizations thatfurther phongg emulation movement in business

2 Major activities of the company

2.1 Financial management

Finance analysis of Vinamilk from 2012 to 2014

( Form the annual reporting of Vinamilk from 2012 to 2014 : https://www.vinamilk.com.vn/vi/bao-cao-thuong-nien )