TABLE OF CONTENTS INTRODUCTION 4 CHAPTER 1: MARKET BUSINESS ENVIRONMENT RESEARCH 5 1.1. Economic environment 5 1.2. Political Environment 6 1.3. Legal Environment 7 1.4. Cultural environment 8 1.5. Social environment 10 1.6. Technological environment 12 CHAPTER 2: MILK PRODUCTS MARKET ANALYSIS 13 2.1. Milk products consumption in Ghana 13 2.2. Industry attractiveness Porter’s 5 forces analysis 14 2.3. Competitors 15 CHAPTER 3: PROPOSAL STRATEGY AND MODE OF MARKET ENTRY 17 3.1. Overview of Vinamilk 17 3.2. Strategy 19 3.3. Entry mode 20 3.4. Strategic plans and targets 21 CHAPTER 4: ESTIMATED PROFITS AND GROWTH 25 4.1. Budget and resource allocation 25 4.2. Sources of funding and financing 25 4.3. Costs and revenues estimation 27 CONCLUSION 29 REFERENCES 30 INTRODUCTION With a rich history of success and a strong presence in the Southeast Asian market, Vinamilk has set its sights on exploring new frontiers in the international business arena. This research project aims to delve into Vinamilks strategic decision to enter the Ghanaian market, analyzing the potential for market expansion and the challenges and opportunities that lie ahead.
https://tailieuluatkinhte.com/ FOREIGN TRADE UNIVERSITY SCHOOL OF ECONOMICS AND INTERNATIONAL BUSINESS ………………………………… MIDTERM REPORT INTERNATIONAL BUSINESS PROJECT OF VINAMILK IN GHANA Course name : Class code : Group number Instructor : International Business KDOE307 : Associate Prof, Dr Phan Thi Thu Hien https://tailieuluatkinhte.com/ HANOI, JUNE 2023 https://tailieuluatkinhte.com/ TABLE OF CONTENTS INTRODUCTION CHAPTER 1: MARKET BUSINESS ENVIRONMENT RESEARCH .5 1.1 Economic environment .5 1.2 Political Environment 1.3 Legal Environment 1.4 Cultural environment 1.5 Social environment 10 1.6 Technological environment 12 CHAPTER 2: MILK PRODUCTS MARKET ANALYSIS .13 2.1 Milk products consumption in Ghana 13 2.2 Industry attractiveness - Porter’s forces analysis 14 2.3 Competitors 15 CHAPTER 3: PROPOSAL STRATEGY AND MODE OF MARKET ENTRY 17 3.1 Overview of Vinamilk 17 3.2 Strategy 19 3.3 Entry mode 20 3.4 Strategic plans and targets 21 CHAPTER 4: ESTIMATED PROFITS AND GROWTH 25 4.1 Budget and resource allocation .25 4.2 Sources of funding and financing 25 4.3 Costs and revenues estimation 27 CONCLUSION .29 REFERENCES .30 https://tailieuluatkinhte.com/ INTRODUCTION With a rich history of success and a strong presence in the Southeast Asian market, Vinamilk has set its sights on exploring new frontiers in the international business arena This research project aims to delve into Vinamilk's strategic decision to enter the Ghanaian market, analyzing the potential for market expansion and the challenges and opportunities that lie ahead Ghana, located on the western coast of Africa, has emerged as a promising destination for foreign investors due to its stable political climate, robust economic growth, and growing consumer demand Vinamilk recognizes the potential in Ghana's dairy market and seeks to leverage its expertise and experience to establish a strong presence in the region By understanding the unique dynamics of the Ghanaian market, Vinamilk aims to capitalize on emerging opportunities and contribute to the development of the local dairy industry Our research on Vinamilk's international business project in Ghana covers several key aspects We conducted a comprehensive analysis of Ghana's business environment using the PESTLE framework Additionally, we conducted a detailed market analysis of the milk products sector and developed a proposal strategy for Vinamilk's market entry Furthermore, we considered various market entry modes and estimated potential profits and growth Through our research, we hope to provide valuable insights for Vinamilk's strategic decision-making process, ultimately helping to contribute for sustainable growth and success in the Ghanaian dairy industry https://tailieuluatkinhte.com/ CHAPTER 1: MARKET BUSINESS ENVIRONMENT RESEARCH 1.1 Economic environment The economic stability of a country indicates the country’s financial system characterized by little fluctuations in the macro-economy (output growth) and fairly consistent low inflation (Business Dictionary 2012) Ghana was the second-fastest growing economy in Africa in 2017, with growth of 8.1%, driven by the mining and oil sectors (Macrotrends, n.d.) Ghana’s economic stability can be attributed to factors such as inflation rates, taxes, interest rates, exchange rates, trading regulations and excise duties The economy continued to expand in 2019, with real GDP growth estimated at 7.1% High growth momentum since 2017 has consistently placed Ghana among Africa’s 10 fastest-growing economies Furthermore, Ghana's GDP per capita is … USD with a stable growth rate that results in a growing market for dairy products with large purchasing power In the 2019 ‘Doing Business’ Report published by the World Bank (2019), Ghana has improved its worldwide ranking to 114 out of 190 economies, up six places from being ranked 120th in 2018 The country’s ease of doing business score formerly called distance to frontier has also increased by 2.06 to 59.22 The government has made it easier to trade across borders, by implementing a paperless customs clearance processing system Furthermore, investor confidence has increased due to the government’s prudent fiscal and monetary measures which has resulted in a decrease in the interest rate with a corresponding increase in the banks’ lending rate—which ultimately bolster investor confidence Inflation and exchange rate of the local currency have also seen some fluctuation over the years Inflation has seen a sharp decline of 7.31% from 2014 to 2018 It continues to fall from its peak of 19.2% in March 2016 to 9.4% in December 2018 Additionally, the fluctuations in the exchange rate have had an impact on the economy The Ghanaian cedi has come under considerable pressure over the last decade At the end of 2018, the cedi had depreciated against the US dollar by 8.9%, cumulatively https://tailieuluatkinhte.com/ https://tailieuluatkinhte.com/ Figure 01 Ghana’s GDP per capita and growth rate from 2010 to 2021 Figure 02 Ghana’s inflation rate from 2000 to 2021 (Source: https://www.macrotrends.net/) Ghana's commitment to international trade and market integration has shaped its economic landscape As a member of the World Trade Organization (WTO), Ghana actively pursues trade liberalization and global economic integration Ghana's participation in trade agreements strengthens its position in regional and international trade Membership in the Economic Community of West African States (ECOWAS) provides Ghana with access to a larger regional market, driving economic growth and development Involvement in the African Continental Free Trade Area (AfCFTA) creates new trade opportunities for Ghana with other African nations The AfCFTA aims to establish a single market across Africa, enhancing market access and export potential Ghana's participation in the West African Monetary Zone (WAMZ) reflects its dedication to promoting economic stability and facilitating regional trade, although the implementation of a common currency remains uncertain https://tailieuluatkinhte.com/ Additionally, Ghana's Economic Partnership Agreement (EPA) with the European Union (EU) fosters trade, investment, and development cooperation Through this agreement, Ghana gains preferential access to the EU market, expands its export base, and stimulates economic growth and job creation through technology transfer and foreign direct investment 1.2 Political Environment Generally, high political stability provides a stable and friendly business environment with predictable market growth trends However, when there is political chaos, it deters https://tailieuluatkinhte.com/ investors and harms the stakeholders' trust in economic and consequent organizational performance Ghana was the first in the Sub-Saharan African countries to gain political independence in 1957 The country has experienced the overthrow of the government through a high incidence of various military coup d’états The 1992 election saw the first democratic government elected to office and since then the country has seen a stable governance over the last two decades with successive elections The country is ruled by two main political parties changing hands every two election cycles (eight years) Ghana has been touted as one of the best democratic countries in the African continent due to its strong adherence to democratic principles and respect for human rights This assertion is further collaborated in a global competitiveness report which indicated government instability as the least problematic in Ghana Despite these political gains the country is still plunged with high infrastructure deficits like roads and hospitals, as well as high inflation rate and unemployment (Fox, L., et al., 2011) The country is still battling with high levels of corruption with the country scoring 41% (80th country out of 180 countries) out of a possible clean score of 100 in 2019, according to Transparency International To deal with this, government has put certain mechanisms in place including the establishment of anti-corruption agencies such as the Commission on Human rights and Administrative Justice (CHRAJ), the Audit service, Economic and Organized crime Office (EOCO), Serious Fraud Office (SFO), the Special Prosecutor's Office (SPO) and others 1.3 Legal Environment Recently, Ghana's economy has outperformed the global and sub-Saharan African economies (PWC, 2018), and this has enhanced its profile as an attractive investment destination Ghana’s investment attractiveness has also resulted from government initiatives such as the legal changes that have sought to address the challenges to the country’s development into the business hub of West Africa In Ghana, businesses can operate as either limited liability companies https://tailieuluatkinhte.com/ incorporated under the Ghanaian laws or external companies incorporated in foreign countries (PWC, 2018) The law allows Ghanaians or non-Ghanaians to have the whole or partial ownership of local companies The law considers external companies as corporate bodies that are formed outside Ghana and have established business places in Ghana (PWC, 2018) Companies with partial or whole foreign ownership have to meet some minimum capital requirements (UHY, 2018) In the partially-foreign-owned enterprises, each foreigner has to invest at least USD 200,000, and whollyforeign-owned enterprises must have a capital of at least USD 500,000 (Ghana Investment Promotion Center, 2017) 10