INTRODUCTION 3 1. OVERVIEW OF VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY (VINAMILK) 4 1.1. General information of Vinamilk 4 1.2. Vinamilk’s operation in Vietnam 5 1.3. Vinamilk current internationalization strategy and scope 6 2. ANGOLA’S BUSINESS ENVIRONMENT ANALYSIS 6 2.1. Overview of Angolas Economic 6 2.2. PESTLE analysis of Angola’s market 7 2.3. Porter’s five forces analysis of Angola’s market 12 3. COMPARATIVE STRATEGY AND MODES OF MARKET ENTRY FOR VINAMILK IN THIS BUSINESS PROJECT 14 3.1. SWOT analysis of Vinamilk in Angola’s market 14 3.2. Define the company’s business and mission 17 3.3. Set corporate objectives 19 3.4. Quantify goals 21 3.5. Competitive strategies 21 3.6. Tactical plans Mode of Entry 23 4. PLAN OF VINAMILK FOR DOING BUSINESS IN ANGOLA 27 4.1. Cost structure and Revenue stream 27 4.2. Vinamilks development plan and estimated profit in Angola. 28 CONCLUSION 34 REFERENCES 35 INTRODUCTION Africa’s fastgrowing population and markets present important opportunities for businesses in the context of slowing global growth. At the same time, greater innovation and investment from businesses is essential to meet Africa’s unfulfilled demand for goods and services, close the gaps in its infrastructure, create employment opportunities, and decrease poverty. In Africa, Angola is one of the fastest growing economies, as evidenced by an accelerated growth of estimated 3.5% in 2022. Besides, Angola has a very long and good diplomatic relationship with Vietnam, and this relationship has been established since 1971. Factors of cultural, economic growth, and political environments make this country an attraction for foreign investment.
https://tailieuluatkinhte.com/ FOREIGN TRADE UNIVERSITY SCHOOL OF ECONOMICS AND INTERNATIONAL BUSINESS *** MID TERM ASSIGNMENT Module: International Business INTERNATIONAL BUSINESS PROJECT OF VINAMILK IN ANGOLA Group: Class: KDOE307 Module Instructor: Assoc Prof., PhD.Phan Thị Thu Hiền Hanoi, May 2023 https://tailieuluatkinhte.com/ GROUP MEMBER INTRODUCTION OVERVIEW OF VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY (VINAMILK) 1.1 General information of Vinamilk 1.2 Vinamilk’s operation in Vietnam 1.3 Vinamilk current internationalization strategy and scope ANGOLA’S BUSINESS ENVIRONMENT ANALYSIS 2.1 Overview of Angola's Economic 2.2 PESTLE analysis of Angola’s market 2.3 Porter’s five forces analysis of Angola’s market .12 COMPARATIVE STRATEGY AND MODES OF MARKET ENTRY FOR VINAMILK IN THIS BUSINESS PROJECT 14 3.1 SWOT analysis of Vinamilk in Angola’s market .14 3.2 Define the company’s business and mission 17 3.3 Set corporate objectives .19 3.4 Quantify goals 21 3.5 Competitive strategies 21 3.6 Tactical plans - Mode of Entry .23 PLAN OF VINAMILK FOR DOING BUSINESS IN ANGOLA 27 4.1 Cost structure and Revenue stream 27 4.2 Vinamilk's development plan and estimated profit in Angola 28 CONCLUSION .34 REFERENCES 35 https://tailieuluatkinhte.com/ INTRODUCTION Africa’s fast-growing population and markets present important opportunities for businesses in the context of slowing global growth At the same time, greater innovation and investment from businesses is essential to meet Africa’s unfulfilled demand for goods and services, close the gaps in its infrastructure, create employment opportunities, and decrease poverty In Africa, Angola is one of the fastest growing economies, as evidenced by an accelerated growth of estimated 3.5% in 2022 Besides, Angola has a very long and good diplomatic relationship with Vietnam, and this relationship has been established since 1971 Factors of cultural, economic growth, and political environments make this country an attraction for foreign investment Meanwhile, Vinamilk is the largest enterprise in the dairy industry in Vietnam, consistently at the top of companies with strong sustainable growth in many consecutive years With many indices showing business results reaching records over the years, Vinamilk is proving its development prospects in the region and globally Vinamilk is working out long-term strategies and plans to help raise the brand in the international arena, aiming to reach the Top 30 of World’s Largest Dairy Companies in terms of revenue With the knowledge of international economics, in this research, we put the research on Angola, which is a country on the African continent that would be the most advantageous to the Vinamilk to set up a business The research will have parts: Overview of Vietnam Dairy Products Joint Stock Company (Vinamilk) Angola’s business environment analysis Comparative Strategy and modes of market entry for Vinamilk in this business project Estimated and Growth of Vinamilk https://tailieuluatkinhte.com/ OVERVIEW OF VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY (VINAMILK) 1.1 General information of Vinamilk Vinamilk (VNM), also known as Vietnam Dairy Products Joint Stock Company, was established in 1976 under the name “Southern Coffee Dairy Company '' At that time, VNM was a 100% state-owned enterprise, formed based on taking over milk factories from the old regime: Thong Nhat milk factory (precursor was Foremost factory), Truong Tho milk factory (precursor was Cosuvina factory), Dielac milk powder factory (precursor was Nestlé milk powder factory - Switzerland) Then in 1995, VNM officially launched the first milk factory located in Hanoi Following the first one, VNM continued to establish one more in Can Tho in 2001, more in Binh Dinh and Saigon in 2003 From 2003 until now, VNM has built some more milk factories and milkcow farms all over the country: Nghe An, Tien Son and the most modern and 100% automatic Binh Duong milk factories; Tuyen Quang, Binh Dinh, Nghe An, Thanh Hoa, Lam Dong, Tay Ninh, Ha Tinh, Thong Nhat - Thanh Hoa milkcow farms There are some noteworthy points about the development progress of VNM Particularly in 2003, VNM decided to change their name to Vietnam Dairy Products Joint Stock Company There are maybe two reasons for this In 2010, VNM used to sell coffee besides dairy products Dang Le Nguyen Vu, chairman of the board of Trung Nguyen coffee, pointed out that the problem of each business is focusing all its efforts on developing the “core capacity” in a professional way Therefore, after nearly year of several meetings and discussions, the two leaders finally came to an agreement that VNM would sell the Saigon coffee factory to Trung Nguyen with the price of nearly 40 million VND The second reason is that, the old name was taken from the previous regime, which only focused their production on the southern part of Vietnam, but now they are aiming at the coverage of Vietnam and even exporting to foreign partners Also in the same year, VNM changed from a state-owned company into an equitized entity, and from then on, VNM has seen a drastic increase in charter capital, revenue and profit Not until 2006 was VNM officially listed on Ho Chi Minh Stock Exchange (HOSE), which helped VNM attract foreign investment, and this was a breakthrough that made VNM step closer to an international entity What https://tailieuluatkinhte.com/ is more, in 2013 VNM purchased 70% shares of Driftwood Dairy Holding, and by May 2016, Vinamilk increased its ownership in this company to 100% Explaining the aim of this commercial behavior, Driftwood is one of the oldest milk producers in Southern California, USA with a portfolio of fresh milk, yogurt, ice cream, and juice 1.2 Vinamilk’s operation in Vietnam According to Vinamilk annual report 2018, Vinamilk had 12 dairy farms in Vietnam and partner dairy farm in Xiengkhouang, Laos; they also noted that they had introduced 18 new products, which added up to their massive number of wide range products that appeal to consumers of all ages Vinamilk now has more than 200 products, divided into 12 categories, including organic nutrients, liquid milk, nutrition energy drink, yogurt, powdered milk, beverage, ice cream, cheese, condensed milk, soymilk, special products for adults and cereal With a wide range of products, Vinamilk aims to serve their customers at all ages, from toddlers to teenagers and elderly They have a strong network of distribution with retailers and wholesalers from small to large scale: it isn’t hard for customers to find Vinamilk’s products from the small grocery stores near their home to big supermarkets like BigC or Coop Mart At present, Vinamilk has main branches in Ha Noi, Da Nang, Can Tho and one headquarters in Ho Chi Minh City and 37 Vinamilk stores across the country Vinamilk also export their products to more than 40 countries worldwide, which include the South East Asian, the Middle East, Africa and other countries Their key export products consist of Powder Milk, Condensed product, Cereal, Soya drink, Milk drink and Beverage Vinamilk is a leading nutrition group in Vietnam and generating over USD 1,5 billion/year in revenue Vinamilk has relatively high price compared to their competitors - a pack of boxes of Vinamilk cost 31.000đ on Lotte shelves while Dutch lady’s is lower at the price of 28.500đ However their value proposition is more money for higher quality and they witnessed an increase in market share of 0.9% in 2018 compared to 2017 Their total revenue in 2018 is about 53.000 billion, an increase of 2.9% from 2017, which consolidated 85% from the domestic market and 15% from oversea markets Their total issued and listed shares reach 1.7 billion shares with about 60% of shareholders are foreign https://tailieuluatkinhte.com/ 1.3 Vinamilk current internationalization strategy and scope Vinamilk actively invests in business activities, international marketing, research and development, expanding the scope of production investment and operating branches abroad Vinamilk has invested 22.8% stake in Miraka factory (New Zealand), invested 70% stake in Driftwood factory (USA), held 51% stake in Angkor Milk factory in Cambodia, opened a new factory in Vietnam subsidiary in Poland as the gateway to trade Vinamilk's commercial activities in Europe Vinamilk's products have been present in more than 42 countries around the world and are continuing to seek and expand markets to Europe, Africa, and South America On average, Vinamilk exports nearly US $200 million annually to foreign countries After equitization, Vinamilk has risen to the Top 100 most valuable companies in Southeast Asia, Top 300 enterprises in Asia, Top 50 best listed companies in Vietnam and set its development strategy to become one of the most valuable companies in the world 50 largest dairy enterprises in the world with sales of billion USD in the coming years ANGOLA’S BUSINESS ENVIRONMENT ANALYSIS 2.1 Overview of Angola's Economic The Angolan economy is heavily reliant on oil production, which contributes to approximately 50% of the country's GDP, over 70% of government revenue, and more than 90% of its exports Angola is a member of OPEC and follows oil production directives Additionally, diamonds contribute around 5% to the country's exports Despite employing around 85% of the workforce, the agricultural sector only contributes approximately 9.6% to Angola's GDP The country still relies on importing half of its food requirements annually Angola's agricultural production includes main crops such as bananas, sugar cane, coffee, textiles, corn, cotton, cassava, tobacco, vegetables, forestry products, seafood, palm oil, and livestock The services sector in Angola has experienced significant development, accounting for 24.6% of the GDP The increase in oil production has supported average annual https://tailieuluatkinhte.com/ growth of over 17% from 2004 to 2008 The post-war reconstruction and resettlement of displaced persons have also led to high growth rates in construction and agriculture However, some infrastructure in the country remains damaged or underdeveloped from the 27-year-long civil war (1975-2002) Nevertheless, since 2005, the government has utilized billions of dollars in credit from China, Brazil, Portugal, Germany, Spain, and the EU to aid in the reconstruction of Angola's public infrastructure The global economic downturn starting in 2008 has hindered Angola's economic growth, and several construction projects had to be temporarily halted Decreasing oil and diamond prices resulted in a 0.7% GDP contraction in 2016 Consumer inflation decreased from 325% in 2000 to below 9% in 2014 before rising back to over 30% from 2015 to 2017 Persistently low oil prices, devaluation of the Kwanza currency, and sluggish growth in non-oil GDP have dampened growth prospects, although major international oil companies continue to operate in Angola In terms of foreign relations, Angola actively integrates with regional and global entities It is a member of the UN, African Union, Community of Portuguese Language Countries, Southern African Development Community, Common Market for Eastern and Southern Africa, African, Caribbean, and Pacific Group of States, Organization of African, Caribbean, and Pacific States, World Trade Organization, African Development Bank, International Monetary Fund, World Bank, among others Angola pursues a non-aligned, pragmatic approach and prioritizes relations with Portuguese-speaking countries and regional nations, particularly in Southern Africa It also maintains relationships with traditional friendly countries such as the United States, Western Europe, Japan, China 2.2 PESTLE analysis of Angola’s market Political Factors The political landscape and government policies in Angola exert a significant influence on Vinamilk's operations within the market The formulation and implementation of favorable policies that promote investment, support the agriculture sector, and foster a stable business environment can greatly benefit Vinamilk's https://tailieuluatkinhte.com/ market presence Such policies provide a conducive environment for Vinamilk to expand its operations, enhance production capabilities, and effectively serve the market Moreover, political stability plays a crucial role in ensuring a predictable and secure operating environment for Vinamilk A stable political climate mitigates the risks of disruptions to business operations that may arise from political instability or changes in government By maintaining political stability, Angola provides an environment in which Vinamilk can confidently make long-term investment decisions and plan for sustainable growth The stability and consistency of the political landscape are essential factors that contribute to Vinamilk's success and enable it to navigate the challenges and capitalize on the opportunities presented in the Angolan market Economic Factors The overall economic growth of Angola, as indicated by its GDP, holds significance for Vinamilk's market performance within the country The level of GDP growth directly affects consumer purchasing power and, consequently, the demand for Vinamilk products As the economy expands, consumers tend to have more disposable income, potentially leading to increased demand for dairy products However, high inflation rates and currency fluctuations can pose challenges for Vinamilk Inflation erodes purchasing power and can affect consumer affordability, while currency fluctuations impact Vinamilk's pricing strategy, production costs, and overall profitability Fluctuating exchange rates can introduce uncertainty in pricing decisions and increase the costs of imported inputs or equipment Additionally, economic factors such as income levels, employment rates, and consumer confidence play pivotal roles in shaping consumer spending patterns Changes in these factors can influence consumer behaviors and preferences, thereby impacting the demand for Vinamilk products Vinamilk must closely monitor economic indicators, anticipate changes in consumer spending patterns, and adapt its marketing strategies and product offerings accordingly to maintain a competitive position within the Angolan market Understanding the complex interplay between these economic factors is crucial for Vinamilk to effectively navigate the dynamic economic landscape and align its business strategies with the evolving needs and preferences of consumers https://tailieuluatkinhte.com/ Sociocultural Factors Vinamilk's success in the Angolan market is intricately linked to its ability to comprehend and synchronize with the cultural preferences of the local population concerning dairy products Gaining a comprehensive understanding of the Angolan cultural landscape enables Vinamilk to tailor its offerings to align with local tastes and preferences By acknowledging the diverse flavor profiles, packaging designs, and product formats that resonate with Angolan consumers, Vinamilk can create a stronger connection with its target audience and establish a favorable brand image Additionally, evolving consumer attitudes towards health and wellness present lucrative opportunities for Vinamilk to introduce healthier and functional dairy products As consumers become increasingly health-conscious, there is a growing demand for dairy products that provide added nutritional benefits and align with wellness trends By investing in research and development, Vinamilk can develop and offer innovative dairy products that cater to these evolving consumer demands, effectively positioning itself as a provider of health-enhancing dairy options Understanding the cultural nuances and embracing health and wellness trends is essential for Vinamilk to stay competitive in the Angolan market By adapting its product offerings to local preferences and capitalizing on the growing interest in health-oriented dairy products, Vinamilk can effectively cater to the changing needs of Angolan consumers This strategic approach not only enhances Vinamilk's market presence but also fosters a positive brand perception, fostering long-term customer loyalty and driving sustainable growth within the dynamic Angolan market Technological Factors Embracing technological advancements in dairy production, distribution, and marketing presents a significant opportunity for Vinamilk to enhance its operational efficiency and gain a competitive advantage in the Angolan market Technological advancements play a crucial role in streamlining production processes, optimizing distribution networks, and improving marketing strategies By incorporating state-ofthe-art technologies in dairy production, Vinamilk can enhance efficiency, productivity, and product quality Automated systems, advanced machinery, and precision monitoring tools can enable precise control over production parameters, https://tailieuluatkinhte.com/ ensuring consistent product quality and reducing wastage Additionally, technological innovations can facilitate real-time data collection and analysis, enabling proactive decision-making and process optimization In terms of distribution, technology can contribute to more efficient logistics, inventory management, and supply chain optimization Advanced tracking and traceability systems can enhance product visibility and enable timely delivery, improving customer satisfaction and reducing costs Furthermore, technology-driven marketing strategies such as digital marketing, social media engagement, and ecommerce platforms can expand Vinamilk's reach and target specific consumer segments These digital platforms provide opportunities for targeted advertising, personalized communication, and direct engagement with consumers, fostering brand loyalty and awareness By embracing technological advancements across the entire value chain, Vinamilk can enhance its operational efficiency, reduce costs, and deliver high-quality products to the Angolan market Moreover, technology can facilitate effective market penetration, allowing Vinamilk to reach a wider audience, improve brand visibility, and gain a competitive edge over rivals Staying abreast of technological advancements and integrating them strategically into its operations will position Vinamilk as an innovative and forward-thinking player in the Angolan market, fostering sustained growth and long-term success Legal Factors Adhering to local regulations, food safety standards, labeling requirements, and other legal obligations is of paramount importance for Vinamilk to establish and maintain a successful presence within the Angolan market Compliance with regulatory frameworks ensures that Vinamilk operates in accordance with the legal requirements set by Angolan authorities This includes adherence to food safety standards to guarantee the quality and safety of its dairy products, as well as compliance with labeling requirements to provide accurate and transparent information to consumers By complying with these regulations, Vinamilk demonstrates its commitment to upholding consumer trust, safeguarding public health, and maintaining ethical business practices 10