Report Vinamilk Strategic Management.pdf

lOMoARcPSD|38183518 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 Duy Class: 21D1QT09 Group member: Van Tuyet Nhi - 215014793 Pham Ngoc Thanh - 215020283 Ho Gia Ngan - 215010416 Giang Thanh Phat – 205180489 Downloaded by mai truong (truongthimai.2902@gmail.com) lOMoARcPSD|38183518 Table of contents Introduction Vision, mission, objectives .4 Vision Mission Objectives .5 Environmental Scanning a External environmental analysis PESTEL .6 Porter’s forces 11 b Internal environmental analysis: 15 Core Resources 15 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 Final Recommendations .43 Downloaded by mai truong (truongthimai.2902@gmail.com) lOMoARcPSD|38183518 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 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 Downloaded by mai truong (truongthimai.2902@gmail.com) lOMoARcPSD|38183518  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 Factory - In 1982, the Southern Milk-Coffee Company was transferred to the Ministry of Food Industry and renamed the Milk - Coffee - Confectionery Enterprise I At this time, the enterprise had more factories under its control, which are the Lubico confectionery factory and Bich Chi nutritional powder factory (Dong Thap)  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 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 Downloaded by mai truong (truongthimai.2902@gmail.com) lOMoARcPSD|38183518 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 the company - 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, 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 industrial zone, Binh Duong, phase with a capacity of 400 million liters of milk/year - 2017: Inaugurated Vinamilk Organic Dalat farm, the first organic dairy farm in Vietnam - Up to now, Vinamilk has not stopped developing and affirming its brand - the company 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.” Downloaded by mai truong (truongthimai.2902@gmail.com) lOMoARcPSD|38183518 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 market and 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 Objectives  Core values: “To become a world grade brand in food and beverage industry, where people put all their trust in nutrient and health products.” o Integrity: Integrity and transparency in actions and transactions Downloaded by mai truong (truongthimai.2902@gmail.com) lOMoARcPSD|38183518 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 every region 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 Environmental Scanning a External environmental analysis PESTEL  Political Downloaded by mai truong (truongthimai.2902@gmail.com) lOMoARcPSD|38183518 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 Downloaded by mai truong (truongthimai.2902@gmail.com) lOMoARcPSD|38183518 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 Downloaded by mai truong (truongthimai.2902@gmail.com) lOMoARcPSD|38183518 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 fortified milk, 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 population having a lactose-intolerant disposition However, changing cultural preferences and a growing acceptance of dairy products, particularly among younger generations, present growth opportunities for Vinamilk The company can continue to invest in education and marketing efforts to promote the benefits of dairy consumption in the Vietnamese market  Technological 10 Downloaded by mai truong (truongthimai.2902@gmail.com)