Report Vinamilk Strategic Management.pdf

Vinamilk will focus all resources to become a dairy and healthy food company with the fastest and most sustainable growth in the Vietnamese market with a strategy of building quality pro

MINISTRY OF EDUCATION AND TRAINING

HO CHI MINH CITY UNIVERSITY OF ECONOMICS AND FINANCE

REPORT: VINAMILK STRATEGIC MANAGEMENT Subject name: Strategic Management Management

Instructor: Nguyen Anh DuyClass: 21D1QT09

Group member:

Van Tuyet Nhi - 215014793Pham Ngoc Thanh - 215020283

Ho Gia Ngan - 215010416Giang Thanh Phat – 205180489

Table of contents

Introduction 3

1 Vision, mission, objectives 4

Vision 4

Mission 5

Objectives 5

3 Environmental Scanning 6

a External environmental analysis 6

1 PESTEL 6

2 Porter’s 5 forces 11

b Internal environmental analysis: 15

1 Core Resources 15

2 Core Competencies 17

c Competitive Advantages: (List, analysis of Strategic Capabilities) 21

4.Strategy Formation 23

a.Corporate/ Business strategy: Make use of at least three tools .23

b Competitive strategy 29

C Discuss the Good strategy that companies should take in Short term and in long term Analyze one or two successful implementation of Companies’s strategic moves in recent years (if you have any informations) 31

5 Final Recommendations 43

6 References/ bibliography 43

Introduction

 VINAMILK Dairy Company is the dairy company with the largest market share in Vietnam Established in 1976, based on taking over 3 dairy factories left by the old regime, under the leadership of Ms Mai Kieu Lien

- a talented woman voted by Forbes magazine in the list of 50 female entrepreneurs with rights Asia's strongest

 Vinamilk

Trading name: Vietnam Dairy Products Joint – Stock Company

Logo : Vinamilk consists of two parts, Vina and Milk “Vina” means Vietnam and “Milk” means milk The logo bears the letter M

Headquarters: 10 Tan Trao, District 7, Ho Chi Minh City, Viet Nam

The stages of formation and development of Vinamilk

 Subsidy period 1976 – 1986

- In 1976, when newly established, Vietnam Dairy Products Company (Vinamilk) was named Southern Coffee and Milk Company, under the Southern General Department of Industry and Food, after the

government nationalized three factories Dairy: Thong Nhat Dairy Factory (predecessor of Foremost Dairies Vietnam S.A.R.L factory operating since 1965), Truong Tho Dairy Factory (formerly Cosuvina factory founded by Hoa Kieu in 1972), and Dielac Powdered Milk

 Innovation period 1986 – 2003

- The name Vietnam Dairy Products Company, or Vinamilk for short, was officially introduced in March 1992 In 1994, Vinamilk had a new factory in Hanoi, with a total of 4 factories to dominate the Northern market

- In 1996 Vinamilk entered into a joint venture with Quy Nhon Frozen Joint Stock Company to establish Binh Dinh Dairy Joint Venture

Enterprise in order to penetrate the southern market

- Can Tho Dairy Factory in Can Tho and Logistics Enterprise in Ho Chi Minh City were built in 2000

 The equitization period from 2003 to present

- 2003: The company changed into Vietnam Dairy Products Joint Stock Company (November) The trading code on the stock exchange is VNM Also in 2003, the company inaugurated dairy factories in Binh Dinh and Ho Chi Minh City

- 2004: Purchased and acquired Saigon Dairy Products Joint Stock

Company Increase charter capital of the Company to 1,590 billion dong

- 2005: Purchased the remaining shares of the joint venture partner in Binh Dinh Dairy Joint Venture Company (then known as Binh Dinh

Dairy Factory) and inaugurated Nghe An Dairy Factory on June 30,

2005 with an address located at Cua Lo Industrial Park, Nghe An Province

- Joint venture with SABMiller Asia B.V to establish SABMiller Vietnam Joint Venture Co., Ltd in August 2005 The first product of the joint venture bearing the Zorok brand was launched in early mid-2007

- 2006: Vinamilk was listed on the Ho Chi Minh City Stock Exchange on January 19, 2006, then the capital of the State Capital Investment Corporation had a holding rate of 50.01% of the charter capital of thecompany

- 2007: Purchased a 55% controlling stake in Lam Son Dairy Company

in September 2007, headquartered in Le Mon Industrial Park, Thanh Hoa Province

- 2009: Developed 135,000 distribution agents, 9 factories, and many dairy farms in Nghe An, Tuyen Quang

- 2010 - 2012: Building liquid milk and powdered milk factory in Binh Duong with total investment capital of 220 million USD

- 2011: Put into operation Da Nang dairy factory with an investment capital of 30 million USD

- In 2013: Put into operation Vietnam Dairy Factory (Mega) in My Phuoc

2 industrial zone, Binh Duong, phase 1 with a capacity of 400 million liters of milk/year

- 2017: Inaugurated Vinamilk Organic Dalat farm, the first organic dairyfarm in Vietnam

- Up to now, Vinamilk has not stopped developing and affirming its brand - the company

1 Vision, mission, objectives

Vision

Vision: “To become a world grade brand in food and beverage

industry, where people put all their trust in nutrient and health products.”

The company's guideline is to always uphold credibility in business, provide products that ensure food safety and hygiene, meet international standards, and finally fit the pocket of consumers Vinamilk has the vision

to become a symbol of nutrition and health serving human life Committed

to bringing quality, nutritious and delicious products Operating on the principle of upholding respect, love, and social responsibility Vinamilk will focus all resources to become a dairy and healthy food company with the fastest and most sustainable growth in the Vietnamese market with a

strategy of building quality product lines with advantages for long-term competition by constantly diversifying product lines, expanding distribution territories to maintain a sustainable leading position in the domestic marketand maximize the benefits of the Company's shareholders

Mission

Mission: “To deliver the valuable nutrition to community with our

respect, love and responsibility.”

With this mission, Vinamilk constantly strives to provide consumers with products that ensure the highest quality and food safety and hygiene, but also always aims at the operating motto "Consumer benefits are the goal development of Vinamilk” by the combination of a perfect after-sales service with attentive, dedicated service and always listening to feedback from customers All of these help Vinamilk become the number one trust symbol in Vietnam and Asia in terms of nutrition and health products

serving people's lives

With a commitment to bringing the best quality products to

consumers, Vinamilk has to have a real responsibility to itself, its people, and society Vinamilk always brings nutritional solutions according to

foreign standards, helping the majority of consumers today to solve many

of their requirements for the most nutritious and delicious ingredients Vinamilk's brand is still leading the market with a huge number of people who love it

o Respect: To have self-respect, to respect colleagues To respect the Company and partners To cooperate with respect.

o Fairness: To be fair with employees, customers, suppliers and other parties

o Ethics: To respect the established ethical standards and act accordingly

o Compliance: To comply with legal regulations, the Company’s Code of Conduct, and the Company’s procedures and policies

 Business philosophy

Vinamilk desires to become one of the most favourite brands in everyregion and territory Therefore, we keep in our mind and our heart that the quality and innovation are always our most important companions We act with customer-centered approach and commit to respond to all their needs

 Quality Policy

Always satisfy and be responsible for consumers’ needs by diversifying products and services, assuring quality, food safety with competitive price, respecting the business ethics and complying with laws

3 Environmental Scanning

a External environmental analysis

1 PESTEL

 Political

Vietnam’s political stability plays a critical role of providing a conducive business environment for Vinamilk’s growth and operations In this stable political landscape, the government can effectively implement consistent policies and regulations that foster economic development

As a result, the Vietnamese government has reduced foreign trade barrier

to attract more investment, focusing on the dairy industry in particular According to relevant regulations, milk and most agricultural or health-related products for social purposes are subject to a lower tax rate of 8% Besides, decree 3399 / QD-BCT: Approving the planning for development of Vietnam's dairy processing industry until 2020, with a vision to 2025

As a major exporter of dairy products, Vinamilk benefits from Vietnam’s involvement in various trade agreements, such as the Comprehensive and Progressive Agreement for Trans – Pacific Partnership (CPTPP); the EU – Vietnam Free Trade Agreement (EVFTA) These agreements facilitate access

to new markets, lower tariffs, reduce non – tariff barriers, augmenting

Vinamilk’s export potential and diversification opportunities Vietnam is a member of WTO so they must compete foreign companies but they can attract more investments

 Economic

Vietnam’s consistent GDP growth and overall economic development create

a positive impact on Vinamilk’s business As the economy grows,

disposable income increases, leading to a greater demand for dairy

products across the nation Vinamilk can leverage this economic growth to expand both its production capabilities and consumer reach

In terms of exchange rate, as a leading dairy manufacturer, Vinamilk not only serves the domestic market but also exports products to various

countries worldwide Exchange rate fluctuations can impact the company's profit margins when importing raw materials or exporting finished goods Vinamilk must monitor global currency trends and undertake proactive strategies to minimize negative consequences arising from exchange rate volatility

Inflation and interest rates affect Vinamilk's operational costs and overall financial stability High inflation rates can lead to increased production costs, while high interest rates can affect the company's ability to access

credit for investment and expansion Monitoring and adapting to these macroeconomic variables allow Vinamilk to react accordingly and maintain financial stability.

 Social

Vietnamese people are increasingly interested in health and nutrition

issues Consumers are increasingly looking for food and beverages that support their health goals Vinamilk can capitalize on this trend by offering

a wide range of dairy products with various health benefits such as fortifiedmilk, yogurt and dairy beverages with added vitamins and minerals

Vietnam has a relatively young population with a sizable working-age

segment This demographic shift favors increased consumption of dairy products, as younger, health-conscious consumers seek out nutritious and convenient products to fit their busy lifestyles Vinamilk can target this growing consumer base, offering products that cater to different tastes and preferences while promoting a healthy lifestyle

Vietnamese culture plays a crucial role in shaping consumer preferences, including their openness to consuming dairy products Traditionally, dairy products were not as popular in Vietnam with the majority of the populationhaving a lactose-intolerant disposition However, changing cultural

preferences and a growing acceptance of dairy products, particularly

among younger generations, present growth opportunities for Vinamilk Thecompany can continue to invest in education and marketing efforts to

promote the benefits of dairy consumption in the Vietnamese market

 Technological

Vinamilk heavily invests in modern technology to enhance production

efficiency and reduce costs By utilizing automation and robotics in its

production plants, Vinamilk can increase output, minimize human error and achieve better product quality control, ultimately improving its

competitiveness in the dairy industry

With the rise of digital platforms and social media, Vinamilk adopts various online marketing channels to engage with its customers and promote its products Digital marketing strategies, such as content marketing or social media campaigns, help Vinamilk stay connected with consumers, enhance brand recognition and drive sales

Advanced logistic and supply chain management technologies allow

Vinamilk to optimize its distribution network, reduce transportation costs, track product movement, ensure the timely delivery of goods This results

in a more efficient and cost-effective supply chain, ultimately benefiting both the company and its customers

As online shopping becomes increasingly popular, Vinamilk has embraced e-commerce platforms to make its products available to a broader

audience By utilizing e-commerce strategies and digital sales channels, Vinamilk can easily reach customers in remote areas and expand its marketpresence

Vinamilk invests in R&D to develop innovative dairy products and meet changing consumer needs The company actively explores new

technologies and advancements in dairy processing to introduce unique products that address consumer preferences, ensuring it remains relevant and competitive in the market

 Environmental

With increasing awareness of environmental issues, Vinamilk needs to

prioritize sustainable practices throughout its supply chain This includes sourcing raw materials like milk from farms that use eco-friendly practices and ensuring ethical treatment of animals

Vinamilk can benefit from investing in energy - efficient technologies and processes to reduce its carbon footprint and minimize waste This includes adopting environmentally friendly production methods, recycling waste materials, and reducing water consumption at its facilities

Changes in weather patterns and long-term climate trends can affect the dairy industry, posing challenges for Vinamilk's supply chain and productioncapabilities The company must anticipate and adapt to these changes, ensuring it remains resilient in the face of extreme weather events, such asdroughts or floods, and securing raw material availability.

These environmental factors highlight the importance of incorporating sustainable and eco-friendly practices into Vinamilk's business strategy to ensure long-term success and meet the evolving expectations of

stakeholders and consumers

 Legal

- Food Safety Regulations: Food safety is a primary concern in the dairy industry Vinamilk needs to maintain strict adherence to Vietnam's food safety regulations along with international food safety standards to ensure the quality and safety of its products and avoid any legal issues

- Tax Policies: The Vietnamese government provides a reduced tax rate of 8% on milk and most agricultural or health-related products for social

purposes Vinamilk needs to comply with these tax policies and adapt to any changes in tax laws that might affect the dairy industry

- Vinamilk should adhere to local labor laws and regulations concerning wages, working hours, employee rights Compliance with labor laws not only helps to avoid legal issues but also contributes to maintaining a

positive work environment and company reputation

- Import and Export Regulations: Because Vinamilk exports its products to various countries, it needs to stay updated on import and export

regulations in different markets Ensuring compliance with international trade laws and regulations is essential to avoid penalties or disruptions to the supply chain

2 Porter’s 5 forces

 Threat of New Entrants

In order to have a better view of "Threat of new entrants" – the threat from new competitors to Vinamilk in the dairy industry in Vietnam, we need to analyze based on the following factors:

- Investment capital requirements: The dairy processing industry requires high investment capital to build factories, purchase equipment and ensure

a stable source of input materials The investment to expand production

scale, research and development also requires a large capital Therefore, investment barriers are one of the main factors that make it difficult for new businesses to enter the dairy market.

- Scale and brand: Vinamilk has been present in the Vietnamese market for many years and associated with many generations of consumers They have built a strong brand, prestige and trust from users A new business will face many difficulties to compete in terms of brand and scale with Vinamilk

- Price competition: Thanks to its large production scale, Vinamilk has the advantage of production costs, enabling them to supply dairy products at competitive prices in the market New entrants to the industry will find it difficult to compete on price, when they cannot take advantage of scale

- Distribution and marketing system: Vinamilk has built a nationwide

distribution network, from supermarkets, distributors to convenience

stores The distribution network helps Vinamilk reach consumers more easily and attract purchase demand Besides, Vinamilk also invests in an effective marketing strategy, through advertising, promotion and sales support activities New businesses need to invest a lot of time and

resources to build similar distribution and marketing networks

- Policy and law: The dairy industry in Vietnam must comply with many regulations on product quality, food safety and hygiene, environmental protection, as well as competition law New businesses must ensure

compliance with all of these requirements, while also adapting to changes

in policy and legislation

 The threat from new competitors to Vinamilk is not too great, the barrier to entering the dairy processing industry in Vietnam is quite high However, Vinamilk still needs to constantly improve, improve product quality, expand markets and innovate business strategies to maintain its leading position in the industry

 Threat of Substitute Products

The threat of substitutes is a key element of Porter's Five Forces

Framework For Vinamilk, the dairy and food industries, this threat comes from many sides:

- Diversity of dairy products: In the dairy industry, Vinamilk faces

competition from other domestic competitors such as TH true Milk, Nutifoodand imported dairy companies such as Friesland Campina, Nestlé Each company offers a wide range of dairy products, from fresh milk, yogurt, low-sugar milk, powdered milk, fortified milk and more If Vinamilk cannot meet the changing needs of customers, they can choose competitors'

- Raising environmental awareness leads to a change in product choices: One of the current trends is that consumers are increasingly interested in the environment and sustainability This could lead them to switch to

products with less impact on the environment, like choosing nut milk over animal milk

- Price and quality: The price of a product also affects the threat of

substitutes If the price of Vinamilk is higher than the substitute product butthe quality is not much different, the customer can choose the substitute product Vinamilk needs to continuously improve and optimize the

production process and ensure product quality to retain trust and

customers

 In summary, to deal with the threat of substitute products, Vinamilk needs to grasp market demand, innovate products, improve quality, maintain reasonable prices and build a strong brand

 Bargaining Power of Suppliers

To assess the negotiating power of Vinamilk's suppliers, the following

factors should be considered:

- Raw material supply: Vinamilk depends on milk supply from farms and suppliers If there are a small number of suppliers or an unstable supply, the bargaining power of suppliers may increase However, Vinamilk has

built an autonomous dairy farm system, which minimizes dependence on external suppliers and limits their negotiating power.

- Material monopoly: If suppliers have a monopoly on raw materials or services with no easy substitutes, they may have more bargaining power However, Vinamilk has diversified the source of raw materials, reducing therisk of monopoly and limiting the negotiating power of suppliers

- Quality and price: The quality and price of the materials and services provided also affect the bargaining power of suppliers Vinamilk always focuses on product quality, therefore, they will choose suppliers with stable quality and reasonable price

- Cooperation relationship: Vinamilk can negotiate with suppliers to build a long-term cooperative relationship, assisting them in determining the right quality and price Cooperation between Vinamilk and suppliers can help balance the negotiating power between the two sides

- International market: Vinamilk is one of the leading dairy companies in Vietnam with export activities to many countries The volatility of

international markets, exchange rates and trade policies also affect the bargaining power of suppliers

 Overall, Vinamilk has implemented a series of strategies to ensure a balance between raw material demand and the bargaining power of suppliers This helps Vinamilk maintain good cooperative relationshipswith suppliers, ensure product quality and reduce costs, thereby

improving the company's competitiveness in the market

 Bargaining Power of Buyers

- Characteristics of the local market: The dairy market in Vietnam has manycompeting companies Besides Vinamilk, there are also big brands such as

TH true Milk, Moc Chau Milk, Dutch Lady, Friesland Campina and imported milk manufacturers This competition can increase the bargaining power of buyers because they have a wide selection of products

- Diversified product offering: Vinamilk offers a wide range of high quality products, including fresh milk, yogurt, powdered milk, and related products.This helps meet the needs of diverse customers, from children to adults and can reduce the bargaining power of buyers as they easily find the right product for their needs

- Distribution channel: Vinamilk's wide distribution channel, from

supermarkets, convenience stores to small retail stores, helps bring their products closer to consumers This also contributes to reducing the

bargaining power of buyers, because they can easily access Vinamilk's products

- Pricing strategy: Vinamilk's product prices are usually moderate and

reasonable compared to quality, assisting them in retaining customers At the same time, Vinamilk also regularly implements promotions and

discounts, there by attracting customers and reducing their negotiating power

- Sales and after-sales policy: Vinamilk has a product warranty policy, a return and exchange policy, and customer support through online channels and customer care call centers Maintaining good customer relationships and providing high-quality after-sales service can help reduce the

bargaining power of buyers

 Competitive Rivalry among Existing Competitors

- Number and Strength of Competitors: The dairy industry in Vietnam

consists of numerous large manufacturers with Vinamilk being a leading company holding the largest market share in the domestic market

(accounting for 55% market share by the end of 2021) However, other competitors such as Dutch Lady, TH true Milk, Moc Chau Milk,

FrieslandCampina, Nestlé and importers of dairy products also create

substantial competitive pressure The diversity in the number and sizes of competitors increases competition, forcing companies to adopt strategies

to gain market share

- Product and Service Characteristics: Vinamilk supplies a wide range of dairy-related products and services Vinamilk's offerings include fresh milk, yogurt, milk powder, condensed milk, cheese and confectionery products Providing a diverse product range enables Vinamilk to meet the varying needs of customers from different target groups Nevertheless, competitorsare continuously innovating and launching similar product lines This leads

to fierce competition in terms of quality, pricing, packaging, and marketing strategies

- Barriers to Entry: The dairy industry has significant barriers to entry, such

as substantial upfront investments, economies of scale and established distribution networks Vinamilk has a competitive edge with a strong brand presence and large-scale manufacturing capabilities Thus, while new

entrants may pose some threats, Vinamilk can still maintain its dominant position due to the challenges that new players would face.

- Customer Loyalty: Vinamilk continuously invests in building customer loyalty and strengthening relationships with its customer base through promotional campaigns, special offers and loyalty reward programs

Sustaining customer loyalty is critical in the competitive environment, as competitors also employ similar strategies to attract and retain customers

- Distribution Channels: In a competitive market, effective distribution

channels are vital for ensuring the availability and visibility of products Vinamilk has a solid distribution network, with good relationships with both traditional retailers and modern trade channels, including supermarkets and convenience stores However, competitors also maintain strong

distribution networks, which place additional competitive pressure on

Vinamilk

- Speed of Technological Change: The dairy industry constantly updates technology in production processes, particularly in biotechnology,

packaging and other advanced technologies Vinamilk consistently invests

in technology to ensure product quality, environmental friendliness and cost savings By adopting cutting-edge technologies, Vinamilk differentiatesitself from competitors, gains a competitive advantage and subsequently leads the market

- Government Regulations: Vinamilk, like other players in the industry, has

to adhere to strict government regulations regarding food safety, quality control and environmental standards A rigorous regulatory environment can impact competition by placing additional burdens on competitors and occasionally creating entry barriers for new entrants

 Taking these factors into account, it is evident that the competitive rivalry among existing competitors in the Vietnamese dairy industry isrelentless To maintain its leading position, Vinamilk must

continuously innovate its products and services, apply new

technologies, adjust pricing and promotional strategies and seize market opportunities to expand its business and surpass other

competitors Maintaining relationships with existing customers,

improving distribution networks and collaborating with key partners will also contribute to Vinamilk's success in a fiercely competitive environment

b Internal environmental analysis:

* Resources based Model/ Core competences: List and analyze the Core Resource, Core competences of Companies

1 Core Resources

A) Strong brand reputation

Over the decades, Vinamilk has built a strong reputation and brand name inVietnam and around the world The company has successfully positioned itself as a leading supplier of high-quality dairy products, playing a key role

in winning the trust and loyalty of its users The image of Vinamilk's brand pillars has promoted widespread use of its products among consumers, resulting in increased market share and sustainable profits for the company

in the special milk production sector Furthermore, the company's

reputation has strengthened relationships with suppliers, fostered mutually beneficial partnerships and attracted investors for business expansion

Vinamilk not only cares about product quality but also focuses on research and development, collaborating with international experts to improve

production technology, optimize processes and ensure food biosafety

standards This has helped the company enhance its competitiveness and make Vinamilk one of the leading enterprises in the dairy industry

Additionally, Vinamilk is committed to social responsibilities, implementing numerous programs that support the community, education, health,

sustainable development and environmental protection Due to these

activities, Vinamilk has gained recognition, praise from both domestic, international organizations, affirming the company's position and

reputation on a global scale

B) Extensive distribution network

One of the most notable competitive advantages of Vinamilk is its

extensive distribution network, which spans across more than 250,000 retail outlets throughout Vietnam This widespread network contributes to the company's ability to cater to a diverse range of customer segments, from bustling urban centers to remote rural areas, further solidifying its market dominance

The company's comprehensive distribution has not only cemented its

leadership within the Vietnamese market but also extended its reach on a global scale With distribution channels in over 50 countries, Vinamilk has

managed to capitalize on international opportunities within the dairy sectorand secure a strong foothold in various markets worldwide.

Recognizing the impact of digital technology on consumer behavior,

Vinamilk also embraces e-commerce platforms to provide seamless access

to their extensive product range for both domestic and international

customers This strategic move has facilitated easier access to Vinamilk's offerings, fueling its growth and expanding its customer base

Vinamilk's far-reaching distribution network has played an instrumental role

in driving the company's success, enabling it to maintain a dominant

market share within Vietnam, while simultaneously expanding its global footprint and ensuring continued growth in the competitive dairy industry

C) Modern production facilities

Vinamilk has long been committed to incorporating advanced technologies and state-of-the-art production facilities to streamline its operations and augment its production capacity With a network of 16 strategically located factories throughout Vietnam, the company centralizes production to

optimize resource utilization, reduce costs and maintain a strong

competitive edge in the market

Central to Vinamilk's success is its investment in high-capacity powdered milk plants, which leverage the latest technological advancements to

elevate the company's capabilities in addressing the growing demands of both domestic and international markets These modern facilities not only bolster Vinamilk's competitive resilience but also ensure adherence to international quality standards As a result, the company is well-positioned

to pursue an export-oriented approach, catering to the stringent

expectations of foreign markets and expanding its global footprint

By continually upgrading its production facilities and embracing innovation,Vinamilk remains at the forefront of a rapidly evolving dairy industry This dedication to progress equips the company with the tools to meet the

diverse needs of its customers, reinforcing its prominent position in the sector and paving the way for continued sustainable growth

2 Core Competencies

A) Product innovation

Vinamilk is one of the leading companies in the dairy industry in Vietnam, with investment in research and development, the company has always

focused on improving the product portfolio Vinamilk is strong in

competitiveness mainly because of the following factors:

- Diversity of products and market segments: Vinamilk constantly expands its product portfolio with a series of new products to suit the needs of

customers in all market segments Vinamilk's products include fresh milk, yogurt, condensed milk, powdered milk, low-sugar milk, physiological milk, plant milk, bottled water, infant formula and minerals This diversity makes

it possible for the company to serve all types of customers, young or old, the elderly or children

- Creativity in product formulas: Vinamilk constantly creates innovative products with improved formulas suitable for each characteristics and

needs of consumers Some good examples are milk without preservatives, anti-colic milk, reduced sugar milk, functional milk that boosts immunity or supports better digestion These products not only meet the culinary needs but also bring health protection and nutritional balance benefits to

consumers in daily life

- Quality priority: Vinamilk always focuses on product quality, from the investment in European imported raw materials to the strict quality control process The company has created a line of high quality and premium products such as Oolong milk line, Organic milk line, Nutricare milk line, Grow+ milk line, to meet the increasing demands of customers as well ashelp the company compete in the international market

- Using advanced technology and innovation: Putting into production high quality products also requires a modern and advanced production system, therefore, Vinamilk has invested heavily in updating technology New

technology, improved machinery and modern equipment This helps the company to optimize the production process to achieve the best efficiency, while maintaining product quality at the highest level

Adherence to strict quality control standards: Vinamilk abides by a series ofrigorous national and international quality control standards in order to guarantee that all their products meet the required safety and hygiene

requirements Examples of such standards include the International

Organization for Standardization (ISO), Hazard Analysis Critical Control Point (HACCP), and Food Safety System Certification 22000 (FSSC 22000)

By following these guidelines, Vinamilk demonstrates its commitment to excellence by aligning its products and services with globally recognized best practices

Vinamilk implements quality control measures at every stage of the

production process, starting with the selection and sourcing of raw

materials, through the processing facilities, and finally in the packaging of finished products This comprehensive approach allows the company to detect and address any potential issues early on and ensures that only high-quality products reach consumers This level of vigilance plays a

significant role in maintaining customer trust and brand loyalty

Utilization of advanced technology for quality management: Vinamilk

invests in cutting-edge technological solutions for automated, rapid and precise monitoring of product quality at their production facilities This enables the company to uphold consistency in its product offerings and minimize potential errors or contamination risks By embracing technology and innovation, Vinamilk can maintain a competitive advantage and meet the evolving demands of today's increasingly discerning consumers

Employee training and awareness of quality control procedures: Vinamilk places great importance on education and training, ensuring that

employees are continuously updated on quality control standards and procedures relevant to their roles This focus on personnel development fosters a culture that views product safety, quality as a shared

responsibility and enhances Vinamilk's overall ability to deliver exceptional dairy products to consumers

Close collaborations with suppliers and partners: Vinamilk works closely with its suppliers and partners to ensure that only high-quality input

materials are used in the production process Regular communication, quality audits, and expectations regarding quality standards create a

mutually beneficial relationship, as suppliers align their practices with Vinamilk's values and objectives

Continuous improvement and innovation: Recognizing that maintaining consistency and competitiveness requires ongoing advancements in both systems and processes, Vinamilk constantly reviews and improves its

quality control measures As a result, the company can adapt to emerging trends, enhance manufacturing processes and pioneer product innovations

that cater to the ever-evolving needs and preferences of domestic and international markets.

 These quality control practices have not only reinforced Vinamilk's reputation as a reliable and trusted brand but have also granted the company a significant competitive advantage over other players

within the dairy industry By remaining devoted to excellence in

quality control, Vinamilk is positioned to continue experiencing steadygrowth and success in the coming years

C) Supply chain management

- Collaboration with local dairy farmers and cattle breeders: Vinamilk excels

in forging strong partnerships with local dairy farmers and cattle breeders

to ensure a steady supply of high-quality raw milk This collaboration

includes providing training, technical assistance, and financial support to the farmers Vinamilk also helps to improve breed quality, enhance

productivity, and promote sustainable farming practices, which ultimately results in better quality raw materials for the company

- Vertical integration: Vinamilk is an excellent example of a vertically

integrated company It has established an end-to-end production process encompassing dairy farms, processing plants, transportation, and

distribution channels This integration allows for a greater degree of controland coherence over the production and distribution processes, ensuring consistent product quality, cost optimization and reliable delivery timelines

- Efficient procurement strategy: Vinamilk's procurement strategy

emphasizes the importance of sourcing high-quality raw materials and maintaining strong relationships with reputable suppliers The company works closely with these suppliers to maintain optimal inventory levels and minimize potential disruptions within the supply chain while adhering to thehighest quality standards

- Advanced logistics system: Vinamilk has invested in a comprehensive distribution network to ensure product availability throughout Vietnam, including remote and hard-to-reach locations This enables the company to efficiently deliver products to its consumers and retailers, maintaining a high level of customer satisfaction

- Adaptability and continuous improvement: Vinamilk is dedicated to

identifying areas of weakness and inefficiency in its supply chain

management practices, enabling the company to continually improve its

operations By implementing new technologies and embracing innovation, Vinamilk ensures its supply chain remains resilient, cost-effective and

capable of meeting evolving customer demands

- Quality control and traceability: Vinamilk maintains rigorous quality

control standards and traceability measures throughout its entire supply chain This approach ensures that any issues can be quickly identified, addressed and resolved, further solidifying Vinamilk's reputation for

delivering high-quality, safe and trustworthy products

 In summary, Vinamilk's excellence in supply chain management relies

on building strong relationships with local dairy farmers and breeders,adopting a vertically integrated business model and continuously seeking innovative approaches to improve and optimize its SCM

practices This approach ensures that the company remains

competitive, resilient and capable of delivering high-quality products

to its customers

D)Skilled workforce and employee expertise

- Vinamilk invests in the continuous training and development of its employees, both for new hires and existing staff members This not only improves their skills and expertise but also helps them stay updated withthe latest industry trends and practices

- The company attracts top talent through competitive remuneration packages, a strong reputation and opportunities for career growth

Vinamilk also implements various policies and benefits to retain its

skilled workforce, such as promoting a healthy work-life balance and offering employee wellness programs

- Vinamilk leverages advanced technologies and production techniques

to enhance operational efficiency and product quality Employees are trained to use these technologies effectively, allowing them to contribute

to the company's innovation efforts

- Vinamilk promotes a strong teamwork culture, encouraging

collaboration among employees from different departments and units This enables knowledge-sharing and fosters innovation, which is crucial for the company's long-term success

- Vinamilk adheres to strict quality and safety standards, both for its products and operations Employees are well-versed in these standards

and are encouraged to maintain high levels of quality and safety at all times This commitment to quality ensures that Vinamilk continues to be

a trusted brand among consumers

E) Corporate social responsibility

Vinamilk has demonstrated a strong commitment to corporate social responsibility (CSR) through various initiatives and programs that focus

on community development, environmental sustainability and business ethics Some key CSR activities undertaken by Vinamilk include:

- Community development: Vinamilk actively supports the communitiesthey operate in by creating employment opportunities, funding

education and healthcare programs, and providing assistance for disaster relief efforts They also collaborate on various initiatives

aimed at improving living conditions for people in need, such as

building schools, sponsoring scholarships, and providing support for children and families affected by unfortunate circumstances

- Environmental sustainability: The company is committed to reducing its environmental footprint and strives to promote sustainable

practices throughout its operations Vinamilk has implemented friendly technologies, such as solar energy systems, to promote clean energy alternatives in their facilities They also focus on waste

eco-management, water conservation and efficient use of resources to minimize environmental impacts

- Business ethics and transparency: Vinamilk maintains a high standard

of business integrity and ethical conduct, ensuring that its operations are carried out in a responsible manner The company adheres to corporate governance codes and follows international standards, such

as ISO certifications, to guarantee product safety and quality

- Vinamilk cares for its employees by offering competitive salaries, benefits, and a safe work environment They encourage employee growth through ongoing training and development programs and recognize their contributions through performance appraisals and rewards

 Overall, Vinamilk demonstrates a commitment to CSR by balancing itsbusiness objectives with the well-being of society and the

environment, contributing positively to the communities in which it operates

 In conclusion, Vinamilk's core resources and competencies have

facilitated its emergence as a leader in both the domestic and international dairy markets The synergistic relationship between its brand reputation, vast distribution network, state-of-the-art production facilities, product innovation and commitment to quality, alongside its understanding of the market, efficient supply chain management, employee expertise and CSR endeavors, establish a resilient foundation for future growth and continued success in the dairy industry

c Competitive Advantages: (List, analysis of Strategic Capabilities)

Vinamilk, founded in 1976, has emerged as a market leader in the dairy sector in Vietnam through a combination of strategic capabilities and

competitive advantages that have given it an edge over competitors With

a broad portfolio of dairy products and a strong presence in both local and international markets, Vinamilk demonstrates resilience and adaptability asthe company continuously seeks new opportunities for growth and

expansion Below are the competitive advantages of Vinamilk:

- Strong Brand Reputation and Consumer Trust: Over the past few

decades, Vinamilk has successfully cultivated its brand through

targeted marketing campaigns, a clear focus on quality and safety and a customer-centric approach By positioning itself as a trusted source of high-quality, nutrient-rich dairy products, Vinamilk has

attracted a loyal customer base and garnered a positive public image.Its promotional campaigns often emphasize the health benefits of its products, which further strengthens the brand's image and

encourages customers to believe in its goals of promoting wellness and improving lives through nutrition

- Extensive and Robust Distribution Network: Vinamilk's wide-reaching distribution network is a critical component of its success By

partnering with over 250,000 retail outlets across Vietnam, the

company ensures the availability and accessibility of its products to customers in both urban and rural areas This expansive distribution infrastructure enables Vinamilk to effectively penetrate diverse

markets and secure its position as a leading dairy provider Moreover, the ease of access to Vinamilk's products for consumers helps

facilitate higher sales volume and increased revenue generation

- Modern and Advanced Production Facilities: Technological innovation

is at the forefront of Vinamilk's production process, as evidenced by the company's investments in state-of-the-art production equipment and continuous upgrades to its manufacturing facilities Automation and sophisticated quality control systems enable Vinamilk to optimize its operations, minimize waste and enhance the quality of its final products Moreover, the company's commitment to adopting cutting-edge technologies ensures compliance with industry benchmarks, thus solidifying its position as a reputable producer

- Focus on Innovation and Product Development: To maintain a

competitive edge and adapt to changing consumer preferences,

Vinamilk recognizes the importance of consistently expanding and refining its product offerings By investing in research and

development, the company has introduced a wide variety of

innovative and value-added dairy products that meet the diverse needs of its customer base This strategy not only helps differentiate Vinamilk from competitors but also facilitates the creation of new revenue streams and secures the company's long-term growth

prospects

- Effective Vertical Integration Strategy: Vinamilk's strategic adoption ofvertical integration has enabled the company to establish control overits entire supply chain, from raw material procurement to dairy farm management, processing plants and the final distribution of products Vertical integration offers several benefits, including enhanced qualitycontrol at every stage, protection against market fluctuations, and improved operational efficiency by reducing the reliance on external suppliers Vinamilk's ability to manage its supply chain in-house not only lowers operational costs but also creates a powerful synergy between its various business segments

- Global Expansion and Diversification: With a diversified export

portfolio that includes over 50 countries, Vinamilk has shown a strong desire to internationalize its operations and participate in global

markets By expanding into regions such as the United States,

Canada, Russia, Australia, and several Asian countries, the company has effectively diversified its revenue sources and reduced

dependence on domestic markets This global expansion strategy alsoallows Vinamilk to capitalize on international growth opportunities andestablish itself as a globally recognized brand