2.2. ANALYSIS OF INTERNATIONAL BUSINESS STRATEGY OF VINAMILK 1. Patterns of Internationalization
2.2.3. Strategic objectives when Vinamilk enters the Italian market
Milk is a fairly popular commodity in Vietnam, from young to old everyone has a need to use dairy products. There are many businesses that choose milk as a product for them to produce and trade. That means that foreign businesses also export imported dairy products to Vietnam. Therefore, the dairy market in Vietnam is extremely diverse in terms of quality, design, and price. Vinamilk's competitiveness with domestic and foreign dairy companies is quite fierce. Therefore, Vinamilk decided to participate in international business activities with the following objectives:
Increase international sales: Vinamilk expands the export of its products to foreign countries to expand its scope micro-market and diversify business activities in new markets where customers from other cultures will also have a better receptiveness to products to increase sales.
Creating prestige and image in the international market: This is something all businesses and companies aspire to because it is an important factor determining sustainable development corporate sustainability. And of course, when creating prestige and image in
the international market, Vinamilk has a solid springboard to go further in developing its career.
Dispersing business risks: When Vinamilk has many markets and many business activities, when 1 market, 1 field, or 1 product is weakened, it will not have a serious impact on the development of the company.
Effectively exploiting comparative benefits to achieve maximum economic efficiency for Vinamilk as well as for Vietnam and the world dairy industry in general.
Develop abundant material areas, improve production quality, control input to the output supply chain.
2.2.3.1. Market penetration method
Vinamilk has chosen the form of collaboration to penetrate the Italian market through alliance strategy. The operation will import dairy products from Vinamilk, which will be marketed and distributed in the Italian market through Auricchio Company - the largest producer of provolone cheese in Italy.
2.2.3.2. Content of strategy implementation
The main content is to release the new milk product line that combines the unique taste of Vinamilk UHT milk and the classic cheese taste. The result is a new yet familiar drink that can surprise and attract Italian attention is what VNM aims for. In order to do that, first Vinamilk must contact Auricchio and offer the collaboration chance. To show goodwill, Vinamilk CEO will visit Auricchio's headquarters and meet the director of Auricchio to conclude and sign the discussed terms of the alliance contract.
2.2.3.3. Business partner information
Auricchio is the world leader in the manufacture of Provolone, as well as the producer of several other great kinds of cheese of the Italian tradition, including mozzarella and Taleggio, Gorgonzola, mild and aged Pecorino, Parmigiano Reggiano, and Pecorino Romano. Exported to more than 60 countries including Europe, North America, Latam, Australia, UAE, China, and Japan.
2.2.3.4. Product development
*PRODUCTION: To produce fresh milk and cheese Auricchio Vinamilk products will include 3 processes:
• Importing Auricchio cheese to Vietnam.
Taking advantage of Auricchio Italy's long-standing cheese recipe, Vietnam will directly import cheese from Auricchio's joint venture company in Italy, with the quantity of 1 Full Container Load.
• Milk processing at VNM factory
The cheese will be transported to the milk factory in Binh Duong - one of 13 Vinamilk's dairy factories. The highlight of Vinamilk's factories is not only in terms of capacity and output but also in the way this enterprise applies 4.0 technology, meeting many standards such as ISO 9001, FSSC 22000, ISO 17025. The machine also has special certifications such as Halal, European Organic, FDA (USA), Chinese standards for international business expansion. Here, Auricchio cheese will be calculated with the appropriate content to mix with Vinamilk's pasteurized fresh milk. Auricchio Vinamilk cheese fresh milk will be packed and put in a paper milk box in the form of 1 liter.
• Export to Italy market
Auricchio Vinamilk cheese fresh milk products will be exported to the Italian market in quantity.
*PRODUCT
• Product describes
Auricchio Vinamilk cheese fresh milk product is a combination of high nutritional value, full of protein, fat, sugar, vitamins, and minerals to help the body grow, stay healthy and prevent disease.
Vinamilk fresh milk 80%
Auricchio 15%
Energy 71.6 kcal
Fat 3,6g
Protein 3,0g
Carbohydrate 6,8g
Calcium 110mg
Phosphorus 90mg
Selenium 7,6mcg
Vitamin A 250IU
Vitamin D3 165IU
Table 2. Nutritional information per 100ml (contents below are indicative only)
• Packaging
Auricchio Vinamilk cheese fresh milk will be packed in paper boxes.
The box design consists of an outer layer of paperboard and plastic, followed by a polyethylene layer and an ultra-thin aluminum foil inner layer that resists the effects of air and light. Helps preserve the vitamin components in milk.
➢ Capacity: 1 liter
➢ Specification: carton of 12 boxes x 1 liter (actual volume: 12 liters)
• Price
According to the survey, the average price of fresh milk in Italy ranges from 1.50 to 2.50 euros per liter, and Vinamilk's products cost about 1.15 euros per 1 liter. In conclusion, it has a competitive price advantage when it comes to the Italian market in the first period of time.
• Distribution
*Italy supermarket
To move closer to the goal of developing the brand of fresh milk and cheese, Auricchio Vinamilk will be distributed in almost all leading retail supermarket channels in Italy:
➢ Conad: Conad is the leading food retailer in Italy in 2020, with a 14.8 percent of market share. closely followed by the cooperative Coop Italia, which had a share of approximately 13 percent.
➢ Carrefour: Carrefour Italia, with a turnover of 4.66 billion euro (2020), operates throughout Italy with over 1,450 stores divided into Carrefour Hypermarkets, Carrefour Market, Carrefour Express, and Cash and Carry (Docks Market and GrossIper).
➢ Esselunga: Esselunga is Italy's largest supermarket chain, with more than three hundred shopping centers located across the country. It has a reputation as one of the cheapest supermarkets in Italy, and its online shopping site allows you to buy everything from food and household items to clothes and furniture - all without leaving your sofa. Esselunga has pioneered online shopping in Italy with its wide range of products from fresh food to homemade organic goods.
➢ Lidl: Lidl Italia S.R.L. operates supermarkets. The Company supplies frozen food, fresh fruits, beverages, baked, meat, general groceries, clothes, and other useful products in low and popular price ranges. Lidl Italia serves customers in Italy.
*Website
Products will be officially posted on the company's own website channel at:
https://www.auricchio.it/en/
* Auricchio Stores
VNM products will also be present in Auricchio stores across Italy and the sale will be under partnership management.