(Tiểu luận) topic distribution channel of vinamilk

History of establishment and development of Vinamilk Subsidy period 1976-1986 In 1976 , Vietnam Dairy Products Company Vinamilk was established under the nameSouthern Coffee and Milk Com

UNIVERSITY OF ECONOMY - FINANCE HO CHI MINH

GROUP: Star Walkin'

LECTURER: LE THI PHONG HOANG YEN TOPIC: DISTRIBUTION CHANNEL OF VINAMILK

DECEMBER 30, 2022

List of Star Walkin' Groups Subject: Marketing Channel Management

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FINAL REPORT

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COURSE: MARKETING CHANNEL MANAGEMENT

Group topic: Vinamilk's distribution channel

Class Code: 221.MKT1127E.B14E

Group Name: Star

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Report submission date:

December 30, 2022

Group member name:

- Luong Thi Le Quyen

- Nguyen Thanh Duc Hung

- Huynh Dang Quoc Duy

- Huynh Minh Hoang

- Nguyen Lam My Duyen

- Tran Ngoc Xuan

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Semester : 1B School year: 2022-2023

1.5.1 TH-TrueMilk 's SWOT analysis

Chapter 2: Current status of Vinamilk's amniotic fluid distribution

2.1 Industry market in Vietnam, HCMC

2.2.6 IMPACT OF COVID 19 ON VINAMILK:

2.3 Vinamilk's distribution channels

2.3.1 Distribution channel structure of Vinamilk

2.3.2 Vinamilk's distribution channel system

2.3.3 Vinamilk's distribution channel strategy

Chapter 3: Solutions for Vinamilk's distribution channel strategy

3.1 Pros and cons

3.3 Conclusion

Reference document o _ _ _

Extra hex _

46

Chapter 1: Introduction of Vinamilk

Vinamilk is the abbreviation of Vietnam Dairy Products Joint Stock Company, a company thatmanufactures and trades milk and dairy products as well as related equipment and machinery in Vietnam

The trading code on the Ho Chi Minh City Stock Exchange is VNM The company is a leading enterprise in the dairy processing industry, currently accounting for 45% of the dairy market share in Vietnam In addition to strong domestic distribution with a network of 220 distributors and more than 251,000 sales points covering 64 provinces and cities, Vinamilk products are also exported to many countries in the US, France, Canada, Poland, Germany, and the Middle East East, Southeast Asia

After more than 46 years of launching to consumers, so far Vinamilk has built 8 factories, 1 factory and is building 3 more new factories, with a variety of products, Vinamilk currently has over 250 dairy products pasteurized, pasteurized and dairy products

Pictures 1of Vinamilk Farm

1.1 History of establishment and development of

Vinamilk

Subsidy period (1976-1986)

In 1976 , Vietnam Dairy Products Company (Vinamilk) was established under the nameSouthern Coffee and Milk Company, under the General Department of Food, after thegovernment nationalized three private enterprises in the region South Vietnam: Thong Nhat(belonging to a Chinese company), Truong Tho (belonging to Friesland), and Dielac(belonging to Nestle)

In 1982 , the Southern Milk - Coffee Company was transferred to the Ministry of FoodIndustry and renamed the Milk - Coffee - Confectionery Enterprise I

Doi Moi Period (1986-2003)

In March 1992 , Union Milk - Coffee - Confectionery Enterprise I officially changed itsname to Vietnam Dairy Products Company (Vinamilk)

In 1994 , Vietnam Dairy Products Company (Vinamilk) built another dairy factory inHanoi to develop the market in the North, bringing the total number of factoriesunder its control to 4 factories

1996: Joint venture with Quy Nhon Frozen Joint Stock Company to establish BinhDinh Dairy Joint Venture Enterprise This joint venture facilitates the Company tosuccessfully penetrate into the Central Vietnam market

2000: Can Tho Dairy Factory was built in Tra Noc Industrial Park, Can Tho City, aiming

to better meet the needs of consumers in the Mekong Delta Also during this time,the Company also built a Warehouse Enterprise with the address located at: 32 DangVan Bi, Ho Chi Minh City

In May 2001 , the company inaugurated a dairy factory in Can Tho

The Equitization Period (2003-present)

2003: The company changed into Vietnam Dairy Products Joint Stock Company(VNM) Inauguration of dairy factories in Binh Dinh and Ho Chi Minh City Ho ChiMinh

2004: Purchased and acquired Saigon Dairy Products Joint Stock Company Increasecharter capital of the Company to 1,590 billion dong

2005: Purchased shares of Binh Dinh Dairy Factory and inaugurated Nghe An DairyFactory Established SABMiller Vietnam Joint Venture Co., Ltd

2006: Vinamilk was listed on the Ho Chi Minh City Stock Exchange Opened An KhangClinic and acquired Tuyen Quang Dairy Farm

2007: Purchased a controlling share of 55% of Lam Son Dairy Company

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

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

2011: Put into operation Da Nang dairy factory with investment capital of 30 millionUSD

2015: Vinamilk officially launched the Vinamilk brand in Myanmar, Thailand and expanded its operations in the ASEAN region

2016: Marking another 40 years of rising to Vietnam: A milestone marking the year journey of Vinamilk's establishment and development to realize the

40-"Vietnamese dairy dream"

2017: The company pioneered to pave the way for the high-end organic food market

in Vietnam with the USDA USDA-standard Vinamilk Organic Fresh Milk in the United States

2018: Inaugurated the Thong Nhat - Thanh Hoa high-tech dairy farm complex Pioneering to launch the first 100% A2 fresh Sua product in Vietnam

2019: Inaugurated Tay Ninh Dairy Farm, started the project of Organic Vinamilk Jagro dairy farm complex in Laos

Lao-2020: Moc Chau Milk officially becomes a member company of Vinamilk:

2021: Marking the 45th anniversary of establishment: In 2021, celebrating 45 years

of establishment, Vinamilk not only becomes the leading nutrition company in Vietnam but also establishes a solid position of a National Brand in the Vietnamese market global dairy industry

April 2021: The eco-friendly farm model was officially launched by Vinamilk This is the place to supply high-quality fresh milk ingredients to make Vinamilk Green Farm fresh milk products light and pure

1.2 Mission, vision and goals for the future

Mission: Vinamilk is committed to providing the community with top quality and quality nutrition with its own respect, love and high responsibility for human life and society.Vision: "Become the leading symbol of trust in Vietnam about nutrition and health products serving human life"

high-Business philosophy: Vinamilk wishes to become a favorite product in all regions and territories Therefore, Vinamilk always keeps in mind that quality and creativity are the company's companions Vinamilk considers customers as the center and is committed to meeting all needs of customers

Quality policy: Always satisfy and be responsible to customers by diversifying products and services, ensuring quality, food safety and hygiene with competitive prices, respecting business ethics and obey the law

With 5 core values, Vinamilk has become the leading symbol of belief in Vietnam about nutrition and health products serving human life

: Integrity, honesty in conduct and in all transactions

Respect: Respect yourself, respect your colleagues, respect the company, respect your partners, cooperate in respect

Fairness: Be fair to employees, customers, suppliers and other stakeholders.Ethics: Respect established standards and act ethically

Compliance: Comply with the Law, the Code of Conduct and the company's rules, policies and regulations.

Future development direction:

Image 3of Vinamilk's Mission

With the orientation of developing into a food group, Vinamilk is expanding its business into other fields such as coffee (Moment), beer (joint venture with SABMiller) Besides, Vinamilk also increased its scale through financial investment in a number of companies in the industry The highlight of Vinamilk is its stable and steady business activities over the years

The Company's objective is to maximize shareholder value and pursue a business development strategy based on the following key factors:

Consolidate, build and develop a system of powerful brands that best meet the

all Vietnamese people through the strategy of applying scientific research on the specific nutritional needs of Vietnamese people to develop produce the most optimal product lines for Vietnamese consumers.

Invest in expanding production and business through the market of healthy beverageproducts for consumers through the key brand VFresh to meet the rapidly increasing consumption trend of beverage products come from nature and good for human health

Strengthen the distribution system and quality in order to gain more market share in markets where Vinamilk has a low market share, especially in rural areas and small urban areas

Harnessing the strength and reputation of the Vinamilk brand as a nutrition brand with “the most scientific and trustworthy reputation among Vietnamese people” to capture at least 35% of the market share of powdered milk within a short period of time next 2 years

Develop a comprehensive portfolio of dairy and dairy products to target a wide range

of consumers, and expand into value-added products with high selling prices to improve the company's overall profit margin All the people in company

Continue to improve supply system management capacity

Continue to expand and develop an active, strong and effective distribution system.Develop raw material sources to ensure a stable supply of high quality fresh milk at competitive and reliable prices

1.3 Types of product

Vinamilk is currently considered a leading enterprise in the field of dairy products

production in Vietnam Products bearing this brand are widely distributed across the countrysuch as:

accounted for 54.5% market share of liquid milk

accounted for 33.9% market share of drinking yogurt

accounted for 40.6% market share of powdered milk

accounted for 84.5% market share of edible yogurt

accounted for 79.7% market share of condensed milk

Currently, Vinamilk is providing more than 250 product categories with 13 categories including: Ready-to-drink milk powder, Liquid milk, Cereal drinks, Nutrition powder, Cheese, fermented milk Yogurt, Sugar, Drinking milk Fermented Milk, Ice Cream, Condensed Milk, Dairy Drinks, Powdered Milk, Beverages , in which there are 3 main product lines:

Vinamilk liquid milk: includes 100% fresh milk, pasteurized milk with added micronutrients, pasteurized milk, organic milk, cocoa barley drink with brands ADM GOLD, Flex, Super SuSu, rich in healthy nutrients , immune support, for the whole family to be more healthy to always be ready to do the important work every day

Vinamilk yoghurt: Vinamilk has many yogurt product lines such as eating yoghurt, drinking yoghurt with the brands SuSu, Probi, ProBeauty, made from specific yogurt yeast, helping the digestive system to be healthy.

Vinamilk powdered milk: Vinamilk 's powdered milk product line meets the nutritional needs of different ages, with the brands of Dielac, Alpha, Pedia, Grow Plus, Optimum Gold, Ridielac nutritional powder, and powdered milk adults like Diecerna special treatment for diabetes, SurePrevent, CalciumPro, Mama Gold

Besides, Vinamilk also develops many different product lines to serve the needs of consumers There are many types of products that have created their own reputation and have a leading position in the minds of customers

Condensed milk: Phuong Nam and Ong Tho stars are two long-standing condensed milk lines in Vietnam and account for almost the entire market share This product line provides a large amount of calories, has a mild sweet taste and is often used by consumers for coffee and food

Cream and Cheese: Subo, Delight Ice Cream, Ice Cream Kid, Oze Ice Cream Kid, Twin Cows, Cow Cheese with Bow

Beverages: Icy bottled water, Vfresh juice, GoldSoy soy milk

1.4 Achievements of Vinamilk

Pictures 4of Vinamilk's achievements

After 45 years of establishment and development, with creative thinking, bold innovation and unremitting efforts, Vinamilk has become one of the leading enterprises in Vietnam, making positive contributions to the development of the country in general and the dairy industry in particular, bringing the Vietnamese dairy brand to high positions in the global dairy market With those outstanding achievements, the Company was honored to receive the noble titles and awards:

The title of Hero of Labor (2000).

Top 15 companies in Vietnam (UNDP)

Top 200 Small and Medium Enterprises in Asia voted by Forbes Asia (2010).Top 10 brands most loved by Vietnamese consumers (NielsenSingapore 2010).Top 5 largest private enterprises in Vietnam market (VNR500)

Honored in the program "GLORY OF VIETNAM - A mark of 30 years of innovation".Top 50 powerful businessmen in Asia - Pacific region

50 best listed companies in Vietnam (Forbes Magazine)

National trademark granted by the Ministry of Industry and Trade (2012)

Top 10 sustainable development enterprises in 2016

Vinamilk's financial statements

In the first nine months of 2020, Vinamilk recorded positive business and production results.Consolidated net revenue reached VND 45,211 billion, up 7.4% over the same period in 2019and completing 76% of the year plan In which, Vinamilk's domestic net revenue reached VND 38,720 billion, up 8.1% compared to 2019; Vinamilk's net export revenue reached VND4,027 billion, up 11.8% over the same period in 2019; net revenue of foreign branches reached 2,465 billion dong

Unit: Thousand billion VND

Equity 23,873 won 26,290 won 29,731 won 33,647 won 35,850 wonRevenue 51,134 12,131 won 56,400 won 59,722 won 61,012Profit before tax 12,228 won 3,176 won 12,795 won 13,518 won 12,922 wonProfit after tax 10,278 won 2,683 won 10,554 won 11,235 yen 10,632Dividend income 5,805 won 2,176 won 7,836 won 7,927 won 7,523 won

The reinvestment rate is also always at a high level, showing Vinamilk's interest in using cash for reinvestment

The growth rate is always at a high level of about 20%, showing the company's sustainable development year by year Only 2018 marked a slow development, but in

1.5 Competitor

In Vietnam's dairy market today, Vinamilk is facing many different competitors both at homeand abroad These can be mentioned as: TH-Truemilk, Abbott, NutiFood, Mead Johnson, Nestle, FCV But it can be clearly seen in the domestic market that the biggest competitor isstill TH-TrueMilk

1.5.1 TH-TrueMilk's SWOT analysis

Strengths of TH True MILK

1 Starting point advantage:

TH True MILK has been invested methodically from the very beginning, including:

Capital is provided stably from Bac A Commercial Joint Stock Bank

The largest and most advanced factory and farm in Southeast Asia

The production process is coordinated smoothly from mass farming to wide distribution

High brand awareness

Although the dairy market in Vietnam is one of the markets with fierce competition with many imported and domestic brands such as Vinamilk, NutiFood, Nestle, etc., TH True MILK still successfully rose to the top position representing and holding approximately 15% market share in the dairy industry in Vietnam, exporting to China and ASEAN countries.Fresh milk is the main product that TH True MILK focuses on exploiting Therefore, the enterprise was present in the top 3 dairy manufacturers in Vietnam The company also has more than 140,000 retail outlets and traditional sales channels Thanks to the strength in theSWOT matrix of TH True MILK is the advantage of starting point, the business is known as the "dominant" of the Clean Milk market in Vietnam

2 Organizational culture

The strength of TH True MILK is that it has an extremely environmentally and socially friendlyorganizational culture The company's slogan is "True Happiness" - True Happiness , wishing

to bring the best product quality to its target customers

05 core values of TH Group products, bringing consumers closer to them:

For public health

Completely from nature

Fresh - Delicious - Nutritious

Environmental friendliness

Thinking out of the box and harmonizing interests

TH True MILK's statement of 5 core values since its inception has remained the same to this day It is even considered as a recruitment criterion, looking for candidates with a common vision, purpose and enthusiasm for the business At the same time, thanks to the core valuesthat TH True MILk has created a brand with bold humanity and high reliability to users This

is also a strong point in TH True MILK's SWOT matrix, contributing to improving the development within the company and the brand portrait in front of the public

3 Brand for the community

TH True MILK has participated and built charity projects to contribute benefits to the community such as giving calves to alleviate poverty, awarding scholarships to students, establishing farms and factories to help create more many jobs for local people, annual milk donation to areas with many poor households… In its charity activities, TH True MILK often targets unlucky children

Besides, TH True MILK is also a sponsor for other community projects such as the project of sponsoring millions of glasses of milk for voluntary blood donors on Red Sunday,

programming projects to increase Women's values, social ethical standards, TH True MILK's project changes the face of the countryside,

In addition, TH True MILK is a brand that has applied for a proposal to the Government on standardizing different milk lines, in order to develop the dairy market in a healthy and beneficial way for consumers In the SWOT matrix of TH True MILK, businesses have always been on the right track when placing the group's own interests in the common interests of the country Do not seek to maximize profits, but rationalize benefits

Weaknesses of TH True MILK

there are still certain weaknesses.

1 Operating costs

Operating costs in dairy farming can be a major weakness in TH True MILK's SWOT matrix In order to produce the best batch of dairy products, TH True Milk has spent a "super" cost to use modern technology and machinery in the dairy farm In addition, purebred HF dairy cows are imported from abroad Estimated operating costs for TH True Milk's production activities are up to thousands of billions of dong per year

Figure 6Farm operating costs

2 Price

Right from the start, the product price of TH True MILK was much higher than that of other dairy brands This will create a weakness for TH True MILK in competing in the domestic dairy market with other big brands such as Vinamilk, Moc Chau… Besides, the slightly higher price also reduces the ability to reach the target audience in the file of low- and middle-income customers in Vietnam

3 Milk Market

Currently in Vietnam, the dairy industry is developing very strongly, there are many milk brands with different prices for consumers to choose from Further With a huge number of products being sold on shelves at stores or supermarkets from small to large, consumers cannot distinguish different types of milk TH True MILK is just one of many other domestic dairy brands Therefore, TH True MILK must always be ready to find new ways to approach customers At the same time, campaigns to increase brand awareness also need to be more creative

TH True MILK's chance

1 Global development opportunities, market access

TH True MILK's opportunity in the Vietnamese market is to have access to the majority of the consumer market and own a stable loyal customer base The enterprise is recognized for both its brand and product quality That has brought a lot of opportunities for the development and expansion of domestic or international markets

In the domestic market, TH True MILK has been recognized and won many awards such as: Top 10 Strong Brands in Vietnam 2018, National Brand, National Quality Gold Award 2020 The awards have proven the quality product quality, improving trust for consumers of all walks of life

In the international market, TH true MILK products have been continuously honored at dozens of domestic and international awards such as World Food Moscow (4 consecutive years since 2015), ASEAN Best Food Product 2015, Gulfood Dubai 2016, Stevie Awards 2018; The highest award – World class International quality Asia - Pacific 2021… It can be seen that

TH True MILK not only does well in the domestic market but also reaches out to

international markets such as Russia, China or Japan

2 Paying attention to consumers' health

From the very beginning, TH True MILK has had a vision to put consumers' feelings and health first Therefore, the enterprise has created a line of organic dairy products and has been extremely popular with consumers The business estimates that global sales of its organic dairy product line will grow 200% by 2025 Seizing the opportunity, TH True MILK is advancing its strategy of entering this emerging market and has already won many steps vital progress

In 2017, TH True MILK received the award “Best New Product 2017” during the 26th International Food Exhibition (Moscow, September 11-14) At the same time, being present

at the APEC Economic Leaders' Meeting (Da Nang, November) creates more favorable conditions for the expansion of other global opportunities for TH Group in the near future

TH True MILK's challenge

1 High level of competition

The dairy market in Vietnam is considered a market with extremely fierce competition This will be a huge challenge of TH True Milk Moreover, what makes TH Group may fall into a weaker position is the problem that TH True Milk is facing in terms of cost Looking at the general ground, the product price of TH True MILK is somewhat higher than that of other brands In particular, every product idea can be imitated by other brands at a more reasonable price

For example, TH True MILK has long been known as the leading organic milk producer in Vietnam However, after the "old" brand, Vinamilk, also launched another organic dairy product TH True MILK is at a disadvantage when their prices are higher than their competitors A 500ml box of TH True MILK's organic milk costs 31,000 VND compared to a 1Lbox of Vinamilk at 55,000 VND Obviously, if you look at it and follow the buying psychology

of consumers, they will choose products that also have a good reputation in the country but

at a cheaper price

In addition, in international markets, TH True MILK also faces competition from domestic products and product quality review standards are also higher than domestic standards Therefore, TH True MILK will have to carefully consider every step of the brand in the future

2 Competition from alternative products of Th True Milk

TH true MILK's substitutes can be powdered milk, nut milk, etc., or with other drinks such as green tea, oolong tea, fruit juice, etc These are all competitors that TH True MILK will have

to face

3 Commit

Another challenge of TH True Milk's SWOT matrix is facing the same commitment to follow the principles of the Enterprise in the future At the present time, TH True MILK is still constantly developing and expanding the market size of its business With such a large-scale investment plan, it will certainly create many challenges for TH True Milk in terms of its commitments to the community

With the price competition of imported and domestic milk brands, can TH True MILK maintain and improve the quality of the brand's milk lines while maintaining the same benefits and campaigns? Do you contribute to the community?

Or like the allegations of pollution around TH True MILK's factories and farms that directly affect the lives of local people Although TH True Milk's solutions have been offered, not all allegations are well resolved

Chapter 2: Distribution status of Vinamilk

2.1 Industry market in Vietnam, HCMC.

According to statistics, the per capita milk consumption in Vietnam is 27 liters/person/year

It is forecast that the annual per capita milk consumption will continue to increase by 7-8%

In 2018, according to a report from Viet Nam Report, the spending structure of the dairy industry in Vietnam accounted for 34.3% of the total average monthly expenditure structure

Dairy market in Ho Chi Minh City

Ho Chi Minh City consumes up to 78% of dairy products

2.1.1 Market segment.

Demographics: Vinamilk chooses age segments: elderly, middle-aged women,

adults, teenagers and children In addition, the business also classifies milk for

individuals and families

According to customer behavior: The method is based on the health status of

customers such as obese people, malnourished people, normal people, etc

Part Demographic Psychology behavior GeographyChildren Age: 5-14

Gender: Male,

female and others

Lifestyle:

Extroverted, likes to hang out with friends

Occasion: DailyUser mood:

Potential P/dailyusersUsage rate:

Daily

They are all over Vietnam, but they often focus on building factories, distributing retail and promoting

Search benefits:

Provide good nutrition for theirgrowth

products, mainly in 2 bigcities, Ho Chi Minh City and Hanoi.Youth Age: 15-25

Gender: Male,

Female and others

Lifestyle:

Busy life because there are many tasks

Occasion: DailyUser status:

Time users, frequent users, potential usersUsage rate: R normal, dailySearch benefits:

Good for body development, recharge energyAdult Age: 26-44

Sex: Men, women

and others

Lifestyle:

Busy, creative, flexible, outgoing

Vinamilk is tending to focus on children, teenagers and adults more Therefore, liquid

milk lines are often interested in developing and expanding new products to attract

the attention of more potential customers

Vinamilk currently has nearly 250 products of all kinds, especially the liquid milk

industry owns nearly 50 types of products, meeting most of the increasingly diverse

nutritional needs of consumers New products are continuously introduced by

Vinamilk with many unique innovations and cover the mid- to high-end segments

Among the "popular" products such as: 100% fresh milk, Organic fresh milk,

Pasteurized milk containing Nest or recently Vinamilk Green Farm fresh milk

In addition to launching many new products, Vinamilk shows that it focuses on

promoting strong and "branded" product lines such as Vinamilk 100% Fresh Milk by

innovating packaging, diversifying flavors, launching new products low-sugar,

fat-free products… in line with market trends and tastes

2.2 Factors affecting the market of Vinamilk.

Register for protection of corporate intellectual property rights…

Economic: Assessing the influence of the economy on the development of Vinamilk, belowwill be one of the leading factors:

Vietnam's economy is growing, strongly and positively affecting the milkconsumption demand of Vietnamese customers

Vietnam joined the international trade organization WTO, creating certain pressuresfor Vinamilk

Inflation is increasing, gasoline prices are also increasing, significantly affectingVinamilk's input materials

The price of beef cattle also increased, businesses had to push the selling price fortheir products

Social: People's living standards are increasing, leading to an increasing demand for milk.Below is a detailed analysis of the socio-cultural factors affecting Vinamilk's competitivestrategies in the market:

The increasing standard of living creates conditions for the outstanding development

of the dairy market

The demand for health care through dairy products is of great interest to manypeople

The rate of malnourished children in Vietnam is still high, promoting thedevelopment of the dairy industry

Currently, Vietnamese people do not really have the habit of drinking milk, so this isVinamilk's development opportunity

Technology: Below are the effects of technology factors on the development of Vinamilk's

"air blow", which helps to increase productivity when producing milk on the market.The technology of extracting powdered milk cans is increasingly developing, helping

to preserve the product for a longer time

The development of milk pasteurization technology at high temperature helps toincrease product quality and helps to preserve products longer

Quality management of products according to ISO standards helps customers feelsecure when using Vinamilk's milk lines

Environmental: Vietnam is an agricultural country, with a large area of grassland, many hillsand mountains suitable for the cattle industry In the past few decades, dairy cows havebecome familiar to people through many large-scale projects cows as raw materials.Currently in Vietnam, the cattle industry is still in a small state with more than 95% offarmers' farms still having less than 10 cows/farm Farmers lack both capital and technicalskills in livestock production In recent years, the government and dairy companies havefocused on supporting dairy farmers, planning dairy farms, with infrastructure, scale, andliving conditions advanced

Legals : competitive pressure is increasing due to the reduction of tax on imported milkunder Vietnam's tariff reduction policy when implementing CEPT/AFTA commitments in Asiaand commitments with the Trade Organization WTO world

On March 25, 2010, Vietnam Dairy Association was officially established, bringing togethersixty-eight members including organizations, individuals, households vi nationwide

2.2.2 SWOT MODEL

Strength:

1 Brand value and high reputation:

Vinamilk milk brand with more than 40 years of establishment and strong development

Being the largest dairy enterprise in Vietnam with a market share of 37%, of which 45%market share in liquid milk market, 85% market share in condensed milk and yogurt.Therefore, Vinamilk has the ability to set the selling price in the domestic market.Vinamilkwas voted by consumers as "Top 10 High Quality Vietnamese Goods" from 1995 to 2009

2 Product quality:

Diverse products, there are many leading dairy products in Vietnam : Ong Tho condensedmilk, Sao, Dielac, Yogurt Vinamilk High quality products but lower prices than importedproducts of the same type and owns a large market share Vietnam among suppliers ofsimilar products

3 Wide distribution network:

distributors and more than 135,000 points of sale nationwide Multi-channel distributionsystem: Present at all shelves in supermarkets and shops Even users can easily order online

on websites or e-commerce sites

In 2019, Vinamilk raised its ownership in GTNFoods to 75%, indirectly owning 51% in MocChau Milk This job not only expands Vinamilk's dairy market ecosystem but is alsoconsidered a strategic step for the company's development in the context that the growthrate of the largest dairy enterprise in the market is trending slowdown

4 Invest in modern and high-quality equipment and technology:

All Vinamilk's dairy factories are invested in modern and advanced technology, importedfrom European countries such as Germany, Italy, and Switzerland to apply to the productionline Vinamilk is the only company in Vietnam that owns a system of machines using spraydrying technology made by Niro of Denmark, ensuring quality dairy products to consumers

5 Quality natural milk source, international standard farm:

The company invests in building organic dairy farms according to international standards,supporting dairy farmers to take initiative in input materials Besides, the company also has

a project to raise dairy cows in New Zealand (the country that exports the most raw milk tothe Vietnamese market)

Vinamilk's milk factories are located at strategic locations near the farm, allowing Vinamilk,

in addition to maintaining and strengthening relationships with suppliers, also ensures thepurchase of fresh milk of good quality Vinamilk consumes more than half of domesticallyproduced raw fresh milk, this is also a business capable of navigating the price of milk in theVietnamese market

6 Methodical and professional marketing strategy:

advertising programs, PR and Marketing are all very methodical and professional, with highhumanity, touching the hearts of users, such as the School Milk programs, the Rise ofVietnam Dairy Fund, the campaign "Fund of a million Vietnamese green trees" Male"…

be the market leader FMCG with impressive growth Besides, the export segment also grewthanks to the expansion of ASEAN In September 2019, Vinamilk also officially exported tothe potential market of China and received many positive feedbacks

Unable to control the source of raw materials

Due to the increasing demand for fresh milk of users, domestic raw materials only meetabout 30% of production needs, while 70% are imported from New Zealand, the US, the EUand Japan Therefore, input costs increase and product prices also increase However,Vinamilk is also promoting the development of raw material areas to serve the increasingneeds of the domestic people

The market share of powdered milk is not high

With increasingly stricter demands from users along with competition from foreign milkbrands, imported from the UK, USA, Netherlands making Vinamilk milk no longer hold amonopoly position in the dairy market According to a report, in the Vietnamese market,imported milk accounted for 65%, Vinamilk accounted for 16% and Dutch Lady accountedfor 20%

Oppotunities

The source of raw materials is being supported by the government, imported materials have

a reduced tax rate:

Currently, the Government has introduced many preferential policies, reducing the burden

on Vietnamese dairy enterprises in order to promote the development of the domestic dairymarket Strengthen price competition with imported goods Import tax on dairy materials inVietnam is lower than commitments with WTO This is a good opportunity to helpbusinesses reduce production costs Currently, the source of imported milk powdermaterials accounts for 75% of raw milk in Vietnam

High potential customers and great demand:

The demand for dairy products in Vietnam is huge The average milk consumption perperson per year is 14 liters per year This is considered a great opportunity and potential forVinamilk to reach out in the dairy industry In addition, Vietnam is in the period of goldenpopulation, so the demand for milk is very large Vinamilk is currently the No 1 fresh milkbrand in Vietnam, so there will be many opportunities to grow and expand market share.Threats

Market participation of many strong competitors:

The first challenge to mention is the increasingly fierce competition with domestic andinternational dairy brands Vietnamese consumers have more and more choices about dairyproducts when big brands such as Nestle, Dutch Lady, Abbott, etc "landed" in Vietnam.Vietnam has many "open door" policies, cutting taxes on many products, including dairyproducts Reduced tax on powdered milk from 20% to 18%, condensed milk from 30% to25% This is a great opportunity for foreign businesses to penetrate the Vietnamese market,opening up many choices for consumers