group assignment corporate policy and strategy vinamilk

I Introduction Established in 1976, over 45 years of sustainable development, Vinamilk has been making great contributions to the development of Vietnam's dairy industry and successfully

UNIVERSITY OF FINANCE — MARKETING

VINAMILK

Group Member

Contents

1) — Introduction

1 Product diversity

2 Vinamilk’s business strategy activities

2.1 Research and Development

2.2 Technology

2.3 Human Resources management

II) Vission and Mission

I) Introduction

Established in 1976, over 45 years of sustainable development, Vinamilk has been

making great contributions to the development of Vietnam's dairy industry and

successfully established its position in the world Vinamilk has had the beliefs of

customers through 18 million of products consumed everyday, having more than 200

products, distributed to 30 countries Vinamilk is present in nearly 60 countries and

territories, also the only representative of South-East Asia in “World’s top 50 dairy

producers” (36th position) - Leading the top 50 largest listed enterprises in Vietnam

with sales of over $ 2,5 billion per year

1 Product diversity

In its portfolio, Vinamilk has nearly 250 products of all kinds, particularly the liquid

milk category has nearly 50 types of products, meeting nearly all nutritional needs of

consumers Vinamilk concommits to bring you the nutrition solution with

international standards, meeting the needs of consumers with delicious and nutritious

products and leading favorite brands in market such as: Vinamilk liquid milk,

Vinamilk yogurt, Longevity sweetened condensed milk, Southern Star Sweetened

Condensed Creamer, Dielac powdered milk, Vfresh Fruit Juice, cheese , plant-based

milk, sugar, etc Diverse products for all customers: babies, children, adults, pregnant

& infant

2 Vinamilk’s business strategy activities

Regarding Vinamilk’s strategic business activities, this brand has focused on

developing and improving the following activities

2.1 Research and Development

Vinamilk’s research and product development team always updates the latest

knowledge about technology, as well as closely researches domestic and foreign

markets to find opportunities and ideas for product development

Example, the trend of using herbs derived from nature, good for health and beauty, is

the top choice of consumers Understanding that need, Vinamilk has launched a drink

product from Ganoderma combined with honey filtered from natural essence, convenient for customers in health care

In addition, Vinamilk also develops natural beverage products such as apple juice combined with fresh aloe vera, soaked apricot juice that retains traditional Vietnamese flavors,

2.3 Human Resources management

To recruit suitable personnel, Vinamilk has linked with universities to find bright candidates Vinamilk is committed to cooperating with organizations that interview and recruit young people who wish to work at farm facilities after graduation for those studying to be veterinarians or livestock engineers Regarding the working environment, Vinamilk always respects and appreciates the contributions and opinions

Based on the Table 2.1: The Dos and Don'ts:

Effective Elements (Dos):

+ Be graphic: Vinamilk's future vision of becoming "a world grade brand in the food and beverage industry" signifies a brand that is reputable and recognized globally It means that the brand is not only present on the international market

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but is also considered a standard in its industry in terms of quality, innovation,

and reliability

+ Be forward-looking and directional: “Aiming to be "a world grade brand" and

“where people put all their trust in," targeting the international market and

positioning itself as a safe, reliable business where people feel secure in their

purchases and use, reflects the long-term goals and development of the

company

+ Memorable: The vision statement is succinct and clear, and

alongside, the ambition to "reach intemational stature" also

creates expectations and inspiration And the commitment to

gaining the consumers' complete trust makes users feel secure

and confident, leading to a lasting impression — Makes good

business sense

Shortcomings (Don’ts):

+ Be sure the journey is feasible: Vinamilk has only announced future decisions

but has not yet provided specific information about the feasibility of the vision

or the concrete steps the company will take to achieve its goals

2 Mission

To deliver the valuable nutrition to community with our respect, love and

responsibility

Vinamilk's mission statement also succinctly conveys the following ideas:

(1) Identifies the company’s products and/or services:

“valuable nutrition to the community” — nutritional food, not only milk

(2) Specifies the buyer needs that the company seeks to satisfy and the customer

groups or markets that it serves:

“with our respect, love and responsibility’ — Vinamilk is committed to

providing quality nutritional products while focusing on dedicated

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customer service, ensuring that every shopping experience is filled

with respect and responsibility We believe that customer needs

encompass not only product quality but also the shopping

experience

(3) Gives the company its own identity:

With points (1) and (2), Vinamilk has implicitly declared that it is not only a provider

of nutritional food but also a symbol of respect, love, and responsibility in all its

products and services, thereby establishing its unique identity as a trustworthy and

approachable brand for every customer

III) Set an objective

Based on the positive developments of the enterprise, with a 5.2% increase in net

profit in 2023, surpassing 9,000 billion, and regaining 2% domestic market share by

early November 2023, Vinamilk's objective for 2024 is to increase net profit by 11%,

rising from 9,000 billion to 9,990 billion, and to increase its market share in the dairy

industry to 47%

IV) Analysis

1 Macro environment

1.1 Political factors

Vinamilk is significantly impacted by Vietnam's political structure as well Vietnam

joined the WTO and ASEAN in 2007 and 1995, respectively Vinamilk is able to

lower production costs by building processing factories in nearby nations However,

Vinamilk will face even more severe competition and may lose its market share to

global brands

The "Vietnamese use Vietnamese products" campaign and the approval of programs

to raise Vietnam's average height by authorities in 2012 created an advantageous

environment for local companies like Vinamilk to compete against international

brands

The government has also supported Vinamilk directly The National Institute of

Nutrition, Ministry of Education and Training, National Fund for Children of

Vietnam, and other governmental organizations have partnered with Vinamilk to carry

out social programs after politicians approved the company's plan to build a dairy

processing plant in Cambodia.To Vinamilk, it's also an opportunity to partner with

government agencies to carry out social responsibility campaigns and strengthen its

reputation as a conscientious company

The government offers tax incentives and preferential treatment for businesses

Investing in green technologies and environmentally friendly practices Income from

investment in the production of renewable energy, clean energy and waste-to-energy

process is entitled to a preferential tax rate of 10% for 15 years This could benefit

Vinamilk if they invest in energy-efficient equipment, waste management systems, or

renewable energy sources for their production facilities By adopting these

technologies, Vinamilk can reduce its environmental footprint and operational costs

1.2 Economic conditions

1.2.1 GDP According to recently released data from the General Statistics Office, GDP growth in

the first 9 months of 2022 increased by 8.83% over the same period last year, the

highest increase in 9 months This creates a higher purchasing power in the market

and ensures the product's position in the market share of Vietnam's dairy industry

However, customers’ requirements and preferences are increasingly varied as a result

of the more varied income distribution among them When it comes to convenience,

variety, quality, and aesthetics, they could be more demanding or ready to pay more

Consequently, using yogurt and other dairy products became necessary high-quality

water (organic, A2 milk) and plant-based milk substitutes (almond milk, walnut

milk,

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

1.2.2 Exchange rates Exchange rates affect Vinamilk's profits through raw material costs, product prices,

competitive interests and international business If the value of the importing country's

currency increases compared to VND, raw material costs increase, causing a negative

impact on profits If the value of VND decreases compared to the export currency,

product prices increase, which may affect Vinamilk's sales and competitive benefits

Vinamilk has expanded its business to many different countries, so exchange rate

changes can affect revenue and profits from foreign markets

Biểu đồ: Diễn biên tỷ giá USDVND

1.2.3 Inflation

Vinamilk's after-tax profit fell by more than 26%, declining for six consecutive

quarters as inflation impacted purchasing power and input material pressure Vinamilk

stated that high inflation led to a decrease in consumption, with the consumption value

of the entire fast-moving consumer goods industry quickly falling by 2% in the first

five months of the year Meanwhile, competition is increasingly fierce as many new

companies enter the milk market Export activities are still equivalent to the same

period, but direct export activities have declined due to a decrease in the purchasing

power of foreign markets in the short term and freight rates remain high

Kết quả kinh doanh Vinamilk từ năm 2021 đến nay

@ Doanhthu @ Loinhuansauthué -9- Biển lãi gộp

Vietnam is a country located in the Asia-Pacific region, considered a dynamic

developing country, rich in potential, with an important strategic location, abundant

labor force, and average per capita income People increase and participate strongly in

the world market through the signing of free trade agreements An increase in income

causes an increase in purchasing power

A growing number of people are concerned about their health due to factors including

a high birth rate, expanding material life, steadily rising income, and vast population

As a result, this creates chances for the dairy market and Vinamilk to grow and

develop

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Vietnam's age structure (2020)

6.91%

9.55% 22.61%

Since children make up 23% of the nation's population and are the primary drinkers of

liquid milk, Vinamilk is advising this client base to adopt product lines that improve

resistance, typically increase height The target product is liquid milk

Seventy percent of the nation's population is adults (defined as 15-64 years old),

which is a rather high number This set of employees makes selections about what to

buy based on their income and expenses; they are frequently concerned with the

caliber of goods and brands Vinamilk does not restrict the distribution of a specific

product to clients in this age range

Older adults (65 years of age and above) This is a potential target group in this liquid

milk consumption trend in the near future, since just 7% of the population, which is a

relatively tiny number, will consume powdered milk more than liquid milk

Vietnamese people gradually tend to care about environmental issues and sustainable

development Therefore, Vinamilk has launched an organic milk product line,

produced from organic raw materials, without using toxic chemicals and pesticides

Not only does this create a high-quality product, but it also helps protect the

environment by minimizing chemical use and negative impacts on land and water

1.4 Technological factors

The application of automation systems and artificial intelligence (AI) in farm

management and operation has helped Vinamilk's happy cows to be always optimally

and thoroughly cared for

HH

Vinamilk Tay Ninh Dairy Cow Resort pioneers the integration of modern technology

4.0 into dairy farming practices in Vietnam, revolutionizing management and

operational systems within the farm By automating tasks and enabling remote

monitoring, employees can efficiently oversee farm activities from any location

Recognizing the challenges posed by natural conditions, Vinamilk invests in cutting-

edge science and technology to transform Tay Ninh into a sprawling Dairy Resort

adorned with lush grasslands spanning hundreds of hectares with A sophisticated air

conditioning system, an automatic cooling system regulated by internal and external

climate sensors Each cow is outfitted with electronic chips in their necks, facilitating

the collection of performance, health, and milk productivity data, which is then

analyzed centrally The management center employs an automatic analysis system to

evaluate individual conditions, providing specialized care as needed to ensure high-

quality milk production Tailored nutritional solutions are devised by the diet

management system based on individual development stages, with the Lely Juno robot

autonomously dispensing appropriate food rations in each cow barn Juno enhances

the dining experience with soothing music, fostering relaxation and enjoyment for the

COWS

This approach ensures that the ltvestock remains healthy, productive, and yields raw

milk of exceptional quality, meeting stringent standards Utilizing a suite of

management software encompassing areas like ration, nutrition, health, and equipment

management, Vinamilk ensures seamless operations with data stored, analyzed, and

accessed through cloud computing The company's commitment to modernization

extends to its continuous investment in state-of-the-art equipment and regular updates

with the latest global technologies to enhance dairy farming efficiency

1.5 Environmental forces

Vietnam's climate is characterized by a hot and humid windy climate However, there

are places with temperate climates like Sa Pa, Lao Cai, Da Lat , and places with

continental climates like Lai Chau, Son La suitable for growing high-quality grass

Despite the culinary climate, in general, the natural conditions are quite suitable for

developing the dairy farming industry, especially in the provinces of Tuyen Quang,

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Lam Dong, Ba Vi, Nghe An, Son La The construction of Cow farms provide

Vinamilk with cheap raw materials, reducing dependence on foreign supplies Indeed,

Vinamilk is a pioneering enterprise in developing raw material areas in Vietnam

1.6 Legal and regulatory factors

Food safety laws set regulations on product quality, origin and manufacturing

processes to ensure consumer safety Compliance with this food safety law can ensure

that Vinamilk products are highly appreciated for their quality and safety, thereby

creating consumer trust and increasing sales

Product quality control is a Food Safety Act that sets requirements for the quality and

safety of products sold on the market If there is a violation related to the quality or

safety of Vinamilk products, the company may face lawsuits, loss of customer trust

and even product recalls and fines from agencies

Vinamilk must comply with advertising rules and provide accurate information about

its products If a company violates these regulations, it can face fines and loss of

reputation in the industry

Restriction on the use of additives and chemicals places restriction on the use of

certain types of additives or chemicals in food production If Vinamilk does not

comply with these regulations, the company may face inspection, fines and being

banned from doing business for a certain period of time

2 Other factors

2.1 Substitute

Competitive pressures coming from the producers of substitute products

To meet the increasingly diverse needs of consumers, the food market is constantly

changing and diversifying its range of products In the dairy sector, the emergence of

alternatives such as nut milk, soy milk, cereal blends with milk, and milk-infused

beverages all have the potential to compete with Vinamilk's market share These

products are developed to meet consumer demand for weight loss and enhanced

nutrition Although they still provide essential nutrients and maintain low levels of fat,

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they still have disadvantages compared to Vinamilk in terms of short shelf life,

difficulty in use, and inability to fully replace the traditional characteristics of milk

products

2.2 Buyers

Competitive pressures stemming from buyer bargaining power (Customer

bargaining power)

End consumers can exert pressure on Vinamilk regarding the quality of its dairy

products Intense competition in the dairy industry has led to relatively uniform

pricing among various dairy brands If raw material prices rise, companies may

increase product prices while still being accepted by customers, resulting in low

bargaining power for buyers However, consumers can choose to use different dairy

brands to vary flavors or try new ones Moreover, today's consumers can easily search

for information online and compare products before making purchasing decisions,

significantly affecting Vinamilk's revenue While individual customers shopping at

small stores may not significantly impact Vinamilk's retail prices, large customers

such as distributors and bulk purchasers have the leverage to negotiate prices with

Vinamilk Therefore, pressure from distributors and bulk purchasers can directly

affect Vinamilk's total revenue as they can directly influence end consumers'

purchasing decisions through recommendations or product introductions

2.3 New entrants

Competitive pressures coming from the threat of entry of new rivals

According to experts' evaluations, entering the dairy industry nowadays poses

numerous barriers Firstly, the cost of entry into the industry is not excessively high

but still requires sufficient resources to maintain activities such as marketing,

advertising, research, and development Especially in the yogurt and flavored milk

sector, these costs can be substantial Secondly, product differentiation is also a

significant barrier Most major dairy brands worldwide have entered the Vietnamese

market, holding a certain market share and showing minimal changes over time

Therefore, any new entrants wishing to join the industry must invest heavily and have

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the ability to influence consumer loyalty to established brands Thirdly, although

distribution channels in the dairy industry have been extensively exploited, new

competitors still need to convince these channels by offering high commission rates

In conclusion, the pressure from potential competitors of Vinamilk is low because the

barriers to entry into the dairy industry remain quite significant, demanding new

enterprises to have substantial costs to enter this business sector, which 1s not an easy

task

2.4 Rivals

Competitive pressures coming from other firms in the industry (Internal

competition)

In the current Vietnamese milk market, Vinamilk is encountering fierce competition

from both domestic and foreign brands Despite Vinamilk's significant market share, it

still faces major and formidable players such as TH True Milk, Moc Chau, Dutch

Lady, These competitors are reputable with strong marketing strategies and ample

financial resources for product research and development The competitive landscape

for Vinamilk is expected to further escalate as the dairy milk market expands in the

future Apart from its core products, Vinamilk also provides other products like

cheese, sugar, coffee, to meet daily consumer needs However, these additional

products from Vinamilk have not yet made a significant impact, primarily due to their

later entry compared to other prominent competitors in the industry Therefore,

Vinamilk faces substantial pressure due to the high number and capabilities of

competing enterprises

2.5 Suppliers

Competitive pressures stemming from supplier bargaining power (Supplier

bargaining power)

As of now, Vinamilk is no longer heavily dependent on suppliers In addition to

focusing on product quality research and marketing campaigns, Vinamilk is also

actively building high-quality dairy farms in Vietnam, moving towards self-

sufficiency in milk supply With 12 internationally standardized dairy farm systems,

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