essay analysis and suggestions to complete the international strategy of vinamilk

In conclusion, the basic benefits of international strategy that is perfectly help businesses to gain victory in competitive relationship in target market and raise the parent firms’ ima

Lecturer: Truong Thi Minh Ly

Class: IBC-13

Members: 1 Nguyen Hoang Long

2.Tran Thi Anh Thu

3 Nguyen Thi To Van

4 Tran Phi Toan

5 Tran Minh Quang

6 Tran Khanh Duy

7 Nguyen Duc Nhan

TP H Chí Minh – 2019ồ

LIST

I History of developing process of Vinamilk: 3

1 Brief introduction, history of formation: 3

1.1 Company’s overview: 3

1.2 Vision-Mission-Core value: 3

1.3 Organizational structure: 4

2 Vinamilk’s milestones in international business: 5

2.1 Corporation’s product and markets: 5

2.1.1 About firm’s products: 5

2.1.2 About firm’s markets: 6

3 Business snapshots: 6

II International competitiveness and mode of internationalization: 7

1 Vinamilk’s key strengths: 7

2 Market expansion strategy: 9

2.1 Vinamilk's International business path: 9

2.2 Broad idea and global brand goals: 10

2.2.1 Cambodia and Southeast Asia markets: 10

2.2.2 US and European markets: 11

2.3 Solutions to take advantage of opportunities to help Vinamilk achieve its goals: 11

2.3.1 Use of raw materials - materials of countries: 11

2.3.2 Improving the level of technical technology: 12

III Global strategic direction of the firm: 12

1 Location of major activities: 12

2 International strategic direction: 13

3 Advantages & Disadvantages: 14

3.1 Advantages: 14

3.2 Disadvantages: 14

IV Recommendations: 15

1 For Domestic market: 15

1.1.Product development strategy: 15

1.1.1 Focus on developing into high-end product segment: 15

1.1.2 Differentiate the range of product: 15

1.2 Low-cost leading strategy: 16

2 For international market: 17

2.1 Market development strategy: 17

2.2 Strategies for horizontal integration: 18

2.3 Low-cost leading strategy: 18

Reason to choose the topic:

The question: "Why there are enterprises can do business in global and others can ? ",one of the answers is internarional business strategy that each corporation is pursuing

So, what is the role and benefits of building international business strategy?

As the enterprises have developed further out of their local level, they will have ambition to expand their business to abroad They have to get clear who they are? whatthey want to become so that they could regconize their own development direction and make plan for the nest steps in long-term Hereby, they can select suitable and efficient options, then apply them effetively to get what they desire Thereafter, firms are able todistribute their resources optimisticly Further, rely on analysis the internal and externalenvironmental attributes affecting their business, the company could be able to realize opportunities, threatens that they have to face, or strengths and weakness of them compare with rivals in global market Simultaneously, now toward the current environmental business situation is continueously change for both possitive and negetive ways, it is necessary for enterprises to adjust their strategy actively so as to catch up with the globe market In conclusion, the basic benefits of international strategy that is perfectly help businesses to gain victory in competitive relationship in target market and raise the parent firms’ imagine up,

Recognizing the importance of building a business strategy nowaday, we introduce toyou the essay titled "ANALYSIS STRATEGIC OF INTERNATIONAL BUSINESS MANAGEMENT OF VIETNAM DIARY CORPORATION - VINAMILK " Let's look during the past 42 years of operation and development, what valuation and global strategic business Vinamilk has built and how they manage them to obtain present succeed

Research subject:

The essay aims to analyze the business strategies that the company has been pursuingduring the past 42 years of operation from 1976 to 2018 By identifying the factors of the internal and external environment affecting the company's operations as well as affecting the development of appropriate strategies, we have identified the

development strategies and competitive strategies that Vinamilk has been pursuing, thereby evaluating the prospects of strategies on both positive and negative aspects Finally, we give some suggestions on development strategies for both domestic and foreign market to expand the Vinamilk's business

Research Methods:

The essay mainly uses the knowledge learned from International Business II subject

as the research foundation Besides, the search, selection and integration of informationfrom other sources such as articles, images, data on the internet to develop and verify content so that it is best accurate and convincing Therefore, it is necessary to use methods of checking, statistics, collating and comparing figures,… to complete essay content

I History of developing process of Vinamilk:

1 Brief introduction, history of formation:

1.1 Company’s overview:

Vinamilk was founded on August 20, 1976 based on the takeover of Thong Nhat Dairy Factory (formerly known as Foremost Dairies Vietnam SARL factory), Truong Tho Dairy Factory (formerly Cosuvina) and Dielac Powdered Milk Factory (formerly the factory under construction of Nestlé), named the Southern Milk - Coffee Company In 1982, the company was transferred to the Ministry of Food Industry and changed its name to the Union of Milk - Coffee - Confectionery I Enterprises, until March 1992 officially renamed Vietnam Dairy Company (Vinamilk) In November 2003, the equitized company officially became Vietnam Dairy Products Joint Stock Company, with shares listed on the Ho Chi Minh City Stock Exchange on January 19, 2006 with the trading code of VNM

1.2 Vision-Mission-Core value:

Vision: "To become the leading belief symbol of Vietnam about nutritional and health

products for human life" Vinamilk concentrates all resources to build the company into a world-class symbol in the field of food and drink, where everyone puts their trust in safety and nutrition products

Mission: “Vinamilk is committed to bringing top quality nutrition and quality to the

community with its own respect, love and high responsibility for human life and society” Vinamilk has been continuously developing and diversifying its product lines, committing

to bring the most valuable nutrition to the community with all respect, love and

responsibility for life

Core values: From our vision and mission, Vinamilk has set for itself 5 core values:

integrity, respect, fairness, ethics and compliance

1 Integrity: Integrity, Honesty in conduct and in all transactions

2 Respect: Respect ourself, Respect our colleagues, Respect our company, Respect our partners, Cooperate in respect

3 Equity: To be fair to employees, customers, suppliers and other stakeholders

4 Ethics: Respect the established standards and act morally

5 Compliance: Compliance with Laws, Code of Conduct and regulations, policies and regulations of the Company

1.3 Organizational structure:

Vietnam Dairy Products Joint Stock Company VINAMILK

Domestic

branch units subsidiary Domestic

Foreign subsidiary

13 factories

One membership limited company Vietnam Dairy Cow (100%)

One membership limited company Vietnam Dairy Cow (100%)

03 sales office

branch

One membership limited company Thong Nhat Dairy Cow- Thanh Hoa (100%)

Vinamilk Europe Spóstka z Organiczona Odpowiedzial noscia (100%)

02 Logistics

enterprise

Joint Stock CompanyVietn

am Sugar (65%)

Angkor Dairy Products Co.,Ltd (100%)

Cu Chi fresh

milk center

Asian Joint Stock Company of processing coconut (25%)

Miraka Ltd (22,81%)

An Khang

Clinic

APIS Joint stock company

Representative office at Thailand

2 Vinamilk’s milestones in international business:

2.1 Corporation’s product and markets:

2.1.1 About firm’s products:

Having more than 40 years of operation, Vinamilk has been developing 10 categories of products, supplying more than 250 types of products to the market with main products:

1 Water milk: 100% fresh milk, pasteurized milk, organic fresh milk, barley cocoa drink with ADM GOLD, Flex, Super SuSu brands

2 Yogurt: Yogurt, Yogurt drink Susu, Probi, ProBeauty

3 Powdered milk: Dielac, Alpha, Pedia, Grow Plus, Optimum Gold infant formula, nutritious Ridielac powder, adult powdered milk such as: Diecerna diabetes treatment, SurePrevent, CanxiPro, Mama Gold

4 Condensed milk: Ong Tho and Phuong Nam Star

5 Cream and cheese: Subo yogurt, Delight cream, Twin Cows, Nhoc cream, Cow cheese

6 Soy milk, juice and beverage: GoldSoy soymilk, Vfresh juice, Icy bottled water

2.1.2 About firm’s markets:

The company has dominated the domestic market with about 53% market share of liquid milk, 80% market share of yoghurt, 80% market share of condensed milk and at top of all three distribution modes such as wholesale, retail (212,000 points) and direct distribution stores (575 stores) Vinamilk's products are also available in nearly 1,500 large and small supermarkets and nearly 600 convenience stores in nationwide Not only affirming its domestic position, Vinamilk has been exporting its products to 43 countries across 5 continents, including fastidious markets as US, UK, Germany and Canada

3 Business snapshots:

To meet the needs of the market, Vinamilk has focused on investing in a factory system with a capacity up to billions of liters of milk per year Originally established with only 3 factories re-taken were Thong Nhat, Truong Tho, Dielac, Vinamilk has 13 factories across the country and 3 factories in the US, New Zealand and Cambodia To mark the peak of outstanding growth is the birth of the Super Vietnam Dairy Factory (MEGA factory), which

is 20 ha in width at Binh Duong, invested with a total capital of nearly VND 5,000 billion

Besides the factory system, Vinamilk also focuses on investing in improving its supply chain with equipping modern farm systems, supplying raw materials of fresh cow's milk forproduction to meet domestic consumption demand and export The company currently has

10 farms spread across Vietnam which meet Global GAP standards with all breeding cows imported from Australia, the US and New Zealand The total herd of cows provides milk forthe company (including Vinamilk's farms and signed farmers) of more than 120,000, with

an output of about 750 tons of raw

milk per day

Being a leading brand in the dairy

industry, Vinamilk has not only

focused on implementing its business

objectives, but also has a sustainable

development strategy with millions of

Vietnamese households In 2017, the

sustainability development report of

Vietnam Dairy Products Joint Stock

Company has successfully passed 50

reports into the final round and won

the first prize in this content in the

2017 Annual Report Vote In the

report, Vinamilk has provided the public with an overview of environmental, social and economic issues related to the company's production and business activities; review and assess the relationship between the 17 sustainable development goals and specific action strategies in key areas: people, products and nature, creating a solid foundation to build strategy and sustainable planning Thereby, the company has conveyed to the reader a clear message: "Sustainable development is an indispensable part of Vinamilk's business strategy"

In the list of "40 most valuable companies in Vietnam" published by Forbes Vietnam in

2018, the Vinamilk brand stands at No 1 with a value of more than USD 2.2 billion This is the third consecutive year Vinamilk tops this list Compared with the figure of 1.7 billion USD in the list published in 2017, Vinamilk's brand value in the ranking this year increased

by 29% and is 1.5 times larger than the brand value of ranked enterprises second is Viettel 1.4 billion USD This shows the growth of Vinamilk, not only maintaining the No 1 position, but also constantly rising to overcome its own success

-II International competitiveness and mode of internationalization:

1 Vinamilk’s key strengths:

In recent years, Vinamilk has always applied advanced management models in the world

to operate the company in a sustainable way, affirming its position in the country, strongly investing in the international market to deserve Worth the pride of being a national brand ofVietnam In 2016, the 40th anniversary of its establishment, Vinamilk continues to affirm itsposition as the No 1 brand in Vietnam in general and in the dairy industry in particular, with more than 200 types of nutritional products of all kinds, with 7 billion products annually Products are trusted by consumers nationwide According to Phan Minh Tien, CEO of Vinamilk, the company is currently ranked 49th in the world's 50 largest dairy products in terms of revenue (estimated by data from Euromonitor) and the next target is to reach the top 30

Strong brand: Vinamilk is a familiar brand and trusted by Vietnamese consumers over the past 34 years Vinamilk brand associated with dairy products and dairy products trusted by consumers This brand was voted as a "Famous Brand" and one of the 100 strong brands voted by Ministry of Industry and Trade in 2006 Vinamilk was also voted by consumers in the group "Top 10 high quality Vietnamese goods" from 1995 - 2009

Vinamilk owns the leading brands in Vietnam such as condensed milk Ong Tho, Star, Dielac, Yogurt Vinamilk

Marketing is highly effective: Advertising programs, PR, Marketing bring high efficiency

Good experienced leaders and managers: Vinamilk has a good, experienced and ambitiousleadership team proven by sustainable business profits

List of variety products, high quality products but lower prices than imported products of the same type and the largest market share in Vietnam among suppliers of similar products Vinamilk has a diversified product portfolio towards customers, product quality is not inferior to imported goods while prices are very competitive Especially the condensed milkproduct line "Ong Tho and Phuong Nam Star" is a cheap product, suitable to the needs and tastes of the majority of people today

The company has dominated the domestic market with about 53% market share of liquid milk, 80% market share of yoghurt, 80% market share of condensed milk Therefore, Vinamilk is able to determine the market price

Widely distribution network, combining many modern and traditional distribution channels Vinamilk's extensive sales and distribution network is an essential factor leading

to operational success, allowing Vinamilk to occupy a large number of customers and ensure the introduction of new products and strategies and effective marketing across the country Currently, Vinamilk distributes over 64 provinces and cities with 250 distributors and more than 135,000 points of sale nationwide

Good relationship with suppliers, proactive source of raw materials and investment in cowmilk supply Vinamilk has built a strong relationship with suppliers through a financial support policy for farmers to buy dairy cows and buy good quality milk at high prices This helps ensure the supply of raw materials for production activities The company has signed contracts with suppliers of milk and 40% current raw milk is purchased from domestic market Vinamilk's manufacturing plants are located at strategic locations near the farm, allowing Vinamilk to maintain and promote relationships with suppliers, ensuring the purchase of fresh milk with good quality

The company has and has direct projects to raise dairy cows, in addition to supporting dairy farmers, in order to be more active in input materials Besides, the company has a project to raise dairy cows in New Zealand (the country that exports the most raw milk to Vietnam market) in order to be more active in raw materials

Vinamilk consumes more than half of the domestic fresh milk production , which makes Vinamilk have the power of cost of raw milk price on the market

Strong finance: While many businesses are facing difficulties because of interest rates, Vinamilk has a safe capital structure, Debt / Total assets ratio is 16.7% (2009)