I. INTRODUCTION 3 1. Background information on the company (Vinamilk) and its current market position 3 1.1. In Vietnam 3 1.2. In the world 3 2. Rationale for expanding into the African market 4 3. Scope and objectives of the project 4 II. MAIN CONTENT 5 1. Business environment analysis 5 1.1. PESTEL analysis 5 1.2. Porter’s Diamond model 8 2. Market entry and competitive strategy 10 2.1. Market segmentation and targeting 10 2.2. Mode of entry 12 2.3. Competitive strategy 14 3. Estimated profit and growth 17 3.1. Market size and growth potential 17 3.2. Revenue projections 18 III. CONCLUSION 21 IV. REFERENCE 22 I. INTRODUCTION 1. Background information on the company (Vinamilk) and its current market position Vietnam Dairy Products (Vinamilk) is the largest food processor in Vietnam. It is a vertically integrated company that controls every step of the production process, from milk supply to manufacture and distribution. Vinamilk is estimated to represent around 50% of the dairy market in Vietnam. The company was founded in 1976 and went public in 2006. It is owned by the government (45%) and foreign investors (49%). With a market value of almost 5.5 billion, it has the secondlargest market cap in Vietnam. Vinamilk has three main goals:
https://tailieuluatkinhte.com/ FOREIGN TRADE UNIVERSITY SCHOOL OF ECONOMICS AND INTERNATIONAL BUSINESS -o0o - MIDDLE TERM ASSIGNMENT BUSINESS PROJECT OF VINAMILK IN MOROCCO – AFRICA Course name : International Business Course Code : KDOE307 Instructor : Group member : Dr Phan Thi Thu Hien Hanoi, June 2023 https://tailieuluatkinhte.com/ TABLE OF CONTENT I INTRODUCTION Background information on the company (Vinamilk) and its current market position 1.1 In Vietnam 1.2 In the world Rationale for expanding into the African market Scope and objectives of the project II MAIN CONTENT Business environment analysis 1.1 PESTEL analysis 1.2 Porter’s Diamond model .8 Market entry and competitive strategy 10 2.1 Market segmentation and targeting 10 2.2 Mode of entry .12 2.3 Competitive strategy .14 Estimated profit and growth 17 3.1 Market size and growth potential 17 3.2 Revenue projections .18 III CONCLUSION 21 IV REFERENCE .22 https://tailieuluatkinhte.com/ I INTRODUCTION Background information on the company (Vinamilk) and its current market position Vietnam Dairy Products (Vinamilk) is the largest food processor in Vietnam It is a vertically integrated company that controls every step of the production process, from milk supply to manufacture and distribution Vinamilk is estimated to represent around 50% of the dairy market in Vietnam The company was founded in 1976 and went public in 2006 It is owned by the government (45%) and foreign investors (49%) With a market value of almost $5.5 billion, it has the second-largest market cap in Vietnam Vinamilk has three main goals: Diversifying portfolio based on consumers' preferences Maintaining leadership within the Vietnamese dairy industry Becoming the top dairy company in Southeast Asia 1.1 In Vietnam Vinamilk is a leading Vietnamese dairy company with a strong presence in both Vietnam and the global market In Vietnam, Vinamilk is the most chosen brand in the dairy and dairy products industry It has a strong market presence due to its high- quality products, commitment to food safety regulations, and wide-ranging distribution network It is estimated that out of 10 Vietnamese families use at least one Vinamilk product 1.2 In the world In the global market, Vinamilk is the only company from Vietnam or https://tailieuluatkinhte.com/ Southeast Asia to rank in the Top 40 largest dairy firms globally in terms of revenue It is also a top food brand globally, ranking 27th in the "Top 100 most valuable food brands worldwide" and 5th in the "Top strongest global food brands." Vinamilk's success in both Vietnam and the global market is due to a number of factors, including its high-quality products, strong distribution network, commitment to innovation, and ability to adapt its products to meet the needs of different cultures and markets https://tailieuluatkinhte.com/ Rationale for expanding into the African market Vinamilk is expanding into the African market due to a number of factors, including: Economic and political stability in many African countries Untapped market potential, with a rapidly growing population, rising disposable incomes, and an increasing urban middle class Economic and trade opportunities, such as favorable trade agreements, government incentives, and potential partnerships with local businesses Growing urbanization in African nations, which is accompanied by changes in dietary preferences and an increase in the demand for processed and convenient foods, especially dairy Scope and objectives of the project Vinamilk has identified Morocco as a target market for its expansion into Africa The country has a number of factors that make it attractive for foreign investment, including a growing economy, a young population, and a rising demand for dairy products Vinamilk's objectives for entering the Moroccan market are to: Enter the market and establish a strong presence Diversify Vinamilk's revenue sources Build brand awareness and position Vinamilk as a leading dairy brand in Morocco Create sustainable partnerships with local businesses Vinamilk believes that the Moroccan market has a lot of potential for growth The demand for dairy products is rising, and Moroccan https://tailieuluatkinhte.com/ consumers are increasingly looking for high-quality, wholesome food products Vinamilk is confident that it can capitalize on these trends and achieve its objectives in Morocco https://tailieuluatkinhte.com/ II MAIN CONTENT Business environment analysis 1.1 a) - PESTEL analysis Political factors Stable government: Morocco has a relatively stable political environment compared to some other countries in the region It has a constitutional monarchy, with King Mohammed VI as the head of state - Government policies and regulations: The government has implemented policies to attract foreign investment, encourage economic growth, and promote sectors such as tourism, manufacturing, and renewable energy - Trade agreements: Morocco has signed several trade agreements, including with the European Union, which provide access to larger markets and promote international trade Morocco has also established strong bilateral relations with several countries, including France, which could potentially facilitate business partnerships and trade opportunities for Vinamilk Morocco has also made considerable efforts to strengthen its foreign policy It has sought to diversify its regional and international alliances, and thus rejoined the African Union (AU), signed bilateral agreements with the Gulf Cooperation Council (GCC) and improved its relations with the European Union (EU) in order to obtain an advanced status - Corruption: This is an epidemic in Morocco and affects the legal system as well However, the government has also introduced a variety of different anti-corruption policies https://tailieuluatkinhte.com/ b) - Economic factors Economic growth: Macroeconomic indicators have improved in Morocco in recent decades Between 2017 and 2019, the inflation rate decreased from 0.8% to 0.7% During that period there was also an increase in GDP, however, at a decreasing rate https://tailieuluatkinhte.com/ Figure Morocco economic indicators 2017 - 2020 Source: BTI 2022 Country Report Morocco - Investment incentives: The government offers various incentives to attract foreign direct investment (FDI) and supports the development of special economic zones The king and his entourage set the framework for economic policies, which are generally in favor of a market economy The Justice and Development Party (PJD) has implemented privatization reforms and public-private partnerships, which have reduced taxes for large companies and introduced incentives for foreign investors - Infrastructure development: Over the years, Morocco has invested massively in infrastructure and increased citizens’ access to services It has built roads, rail lines, high-speed rail lines, tramways, airports and ports It has invested in information and communication technology, and improved access to water, sanitation and irrigation for farmers Access to electricity has also improved To increase sustainable energy production, the country is constructing major solar power stations and wind farms c) Social factors Morocco has a young population, which can contribute to a growing labor force and consumer market Moreover, urbanization and lifestyle https://tailieuluatkinhte.com/ changes have led to shifts in consumer preferences and increased demand for convenience and modern products and services As Moroccan culture and traditions influence consumer behavior, businesses need to adapt their products and marketing strategies accordingly Socioeconomic woes continue to persist, with social inequalities widening between the highest and the lowest classes and between urban and rural areas Unemployment remains a pressing problem, especially among the youth, who are increasingly engaging in emigration