research the organizational chart and international business strategy vinamilk

History of formation and development of the company Vietnam Dairy Products Joint Stock Company has the international transaction name: Vietnam dairy Products Joint Stock Company.. The fo

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Pham Khanh Huyén 11182338

Mai Phuong Thao 11186028

Contents

TH ð3 À2 A6 ằằ 2 1.1 History of formation and development of the company 2ì chen Hye 2 I2 cố cố ẽ ố eeaddđA1ăă Ẽ 3 F270, 88h “-:dIốăăắăắăẵẻ 3 75⁄7 nh he (4 3 Z9 .`À n4 3 1.3 Vinamilk — Vietnam's Billion Dollar Milk Brand c2 22th Hy Hye 3

2 The organizational chart of VinamiÌk - c1 2011 2111211211 112111511111 1110112111 011 1k khay 4

2.1.2 Types of Organizational SIructures 0 0c cite kkH kà nh kg 4 2.1.3 Importance oƒ OQrgaHirdtiOHUI SIYHCÍHTFỚY Quà HH kén 8 21,4, Elements Of Structure 00.0 hố an neeeesä.Ả.SAI 8 2.2 The organizatfional structure of VinamiÌE - c1 1 21121 1 211121121111 1111111211 thu 9 2.2.1 The organization Chart Gƒ VŨHQHHHĂ Tnhh HH HH Hà tk k kh khe 9 2.2.2 Factors q̓eCÍHg 0FgqHiGdfiOHAI SÍPHCÍHC ào 11 2.2.3 Advantages and disaddvantages oƒ 0rganizationdl sttucture 0ƒ VNM àà ii cà 12

3 ` 6À ) %ctiiiiiiiiiiiiii 12 3.1 External environmental analysis of VinamiiÌk - 12s «nh Hy 12 SLL PESTEL analysis of VÏHHHHÏĂ Tnhh hà Hà Hàng txu 12 3.1.2 Industry environment ANALYSIS nh HH Hành Hàn Hành yu 13 3.2 Internal environmenfal analysis of VinamiÌE c1 111211211312 1k9 Hye 16 3.2.1 Competitive advantages and specific competencies oƒ the COINQHW: ìà 16 3.2.2 Analysis of the value chain of VINAMILK COTNQHV., à Share 17 3.3 SWOT model of Vinamilk from external and internal environment 00 00.0.000000000 ccc eo 18

` 18 eeada 18 Sổ .nhgằẶằaa aaáa:- 18 6/0), 176866 nen cố 18 BBA THOUS ic Ắ ấ ,.aaaiAĂăĂăăă.ố.ố 18 3.4 Business strategies of VinamiiÌk - 2 1n nh ng 11111111211 11 nành ykg 19 3.4.1 Company -level Strategy “Ả e 19 3.4.2 Business-level srdfeey 0ƒ VÏHQHHÍÏĂ Tình nn Tnhh HT Hà Hà Hàn Hà khu 21 3.4.3 Vinamilk's global business strategy ccc ccc ccc eect tte tetas eee ee tenets eee enieen ieee 22 3.4.4 Functiondl-level DHSIH€CSS SÍT(ÍGỢV HH HH TH tk Hà khu 23

1 Overview about Vinamilk

1.1 History of formation and development of the company

Vietnam Dairy Products Joint Stock Company has the international transaction name: Vietnam dairy Products Joint Stock Company The company was established in 1976

on the basis of taking over 3 dairy factories left by the old regime

Head office is at No 10 Tan Trao Street, Tan Phu Ward, District 7, Ho Chi Minh City The organizational structure includes 17 affiliated units and one Office Total number

of staff - employees: 4,500 people

Main function: Producing milk and dairy products

Over the years, with outstanding efforts, the Company has become one of the leading enterprises in Vietnam in all aspects The Company's achievements have actively contributed to the development of the Company's career Industrialization - Modernize the country

The formation and development of Vietnam Dairy Products Joint Stock Company is summarized in 3 main stages:

e Period 1976-1986

Taking over 3 Milk factories left by the old regime after 1975: Thong Nhat Dairy Factory (formerly Foremost factory); Truong Tho Dairy Factory (formerly Cosuvina Factory); and Dielac Powdered milk factory (Nestle)

e Period 1987 —2005

The company restored the Dielac milk powder factory in 1988 at a cost of $200,000

In August 1993, Hanoi branch was established to deploy business network in Hanoi and Northern provinces and in June 1995, Da Nang dairy branch was established to serve consumers in Central - Western provinces Original In March 1994, Hanoi Dairy Factory was inaugurated and put into operation after 2 years of construction Period 1996 —2005: The company has opened export markets to Middle East

countries, Eastern European countries, European and North American markets In

2003, the company switched to operating under the equitization model to implement the State's policy to create a type of enterprise with many ownerships

From 1996 to 2005: Production and business were constantly improved and

developed, the annual growth rate was from 15-45%, the revenue increased from 1.5

to 2.6 times; payment to the state budget increased from 1.1 to 6.5 times; Vinamilk's market share accounts for 75-90% depending on the product category; exports

increase year by year: from 28 million USD (1998) to 168 million USD (2002); The average annual production output is 220-250 million liters Several new factories were built: Can Tho Dairy Factory (May 2001); Binh Dinh Dairy Factory (May 2003); Saigon Dairy Factory (September 2003); Nghe An Dairy Factory (June 2005); Tien Son Dairy Factory (December 2005) Also in this period, the company established Saigon Logistics Enterprise (March 2003) to ensure transportation services, serving customers consuming Vinamilk products

many initiatives that benefit the State hundreds of billions of dong, typically Dielac Anpha 1,2,3 products; 100% fresh milk products

The company has established raw material areas in the country by building 5 dairy farms: Tuyen Quang Dairy Farm (2007); Nghe An Dairy Farm (2009); Thanh Hoa Dairy Farm (2010); Binh Dinh Dairy Farm (2010); Lam Dong dairy farm (2011); with

a total herd of 5,900 cows In 2008-2009, dairy factories: Thong Nhat, Truong Tho, Saigon were awarded the Certificate of Merit "Green Enterprise" by the Ministry of Natural Resources and Environment for their achievements in environmental

protection

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 Company's charter capital The trading code on the Ho Chi Minh City Stock Exchange is VNM

In 5 years, the Company has invested about VND 4,500 billion to modernize

machinery, equipment and technology for production and to build 2 new processing factories and 2 branches and factories: Lam Son Dairy Factory (Lam Son Dairy Factory) December 2005); Vietnam Beverage Factory (2010); 01 Can Tho Branch (1998); Hanoi Logistics Enterprise (2010), and is promoting the construction of 2 modern fully automated Mega centers in the North (Tien Son) and the South (Binh Duong), 02 factories: Dielac2 powdered milk in Binh Duong and Da Nang Dairy Factory

Overall, during the past 35 years, Vietnam Dairy Products Joint Stock Company with many generations has been cultivated and grown; with the familiar VINAMILK brand, which is well-known at home and abroad, has excellently fulfilled the function

of an economic unit for the State, becoming a very respectable bright spot in the time

- Integrity: Integrity and transparency in actions and transactions

- Respect: To have self - respect and respecting colleagues Company, partners, to cooperate with respects

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

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

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

1.3 Vinamilk — Vietnam's Billion Dollar Milk Brand

In 2016, Vinamilk company was ranked by Forbes as a billion-dollar enterprise in Vietnam with a brand value of more than $1.5 billion, In 2020, despite facing the

Covid-19 pandemic, the company is still determined price increased by 200 million

USD compared to 2019, reaching more than 2.4 billion USD

According to the financial report of Vinamilk company in the second quarter of 2020, net sales of domestic business reached VND 25,456 billion Direct exports reached

VND 2,451 billion, up 7.7% over the same period last year In the first 6 months of

2020, Vinamilk's net revenue reached VND 29,648 billion, up 6.7% compared to

2019

Up to now, Vietnam Dairy Products Company has exported products to 54 countries

and territories with a total turnover of more than 2.2 billion USD Vinamilk's stock is classified as a blue-chip stock in Vietnam, for businesses with stable growth and

revenue

2, The organizational chart of Vinamilk

2.1 Overall of the organizational structure

2.1.1, What Is an Organizational Structure?

An organizational structure is a system that outlines how certain activities are directed 1n order to achieve the goals of an organization These activities can include rules,

roles, and responsibilities

The organizational structure also determines how information flows between levels

within the company For example, in a centralized structure, decisions flow from the

top down, while in a decentralized structure, decision-making power is distributed

among various levels of the organization

Having an organizational structure in place allows companies to remain efficient and

focused

2.1.2 Types of Organizational Structures

i Functional Organizational Structure

One of the most common types of organizational structures, the functional structure

departmentalizes an organization based on common job functions

An organization with a functional org structure, for instance, would group all of the

marketers together in one department, group all of the salespeople together in a

separate department, and group all of the customer service people together in a third

department

Functional Organizational Structure

[Leadership]

[Job Function [Job Function #2 [Job Function #3 ex

#1 ex Developers] ex Marketers] Sales Representatives]

Advantages

The functional structure allows for a high degree of specialization for employees, and

is easily scalable should the organization grow Also this structure is mechanistic in

nature which has the potential to inhibit an employee's growth putting staff in

skill-based departments can still allow them to delve deep into their field and find out what they're good at

Disadvantages

Functional structure also has the potential to create barriers between different

functions and it can be inefficient if the organization has a variety of different

products or target markets The barriers created between departments can also limit

peoples' knowledge of and communication with other departments, especially those

that depend on other departments to succeed

ii Divisional or Multidivisional Structure

The second type is common among large companies with many business units Called the divisional or multidivisional structure, a company that uses this method structures its leadership team based on the products, projects, or subsidiaries they operate

Multidtvisional Structure can be divided into various types:

e Product-Based Divisional Structure

e Market-Based Divisional Structure

e Geographical Divisional Structure

e Process-Based Structure

ii Flat Structure

While a more traditional organizational structure might look more like a pyramid

with multiple tiers of supervisors, managers and directors between staff and

leadership, the flat structure limits the levels of management so all staff are only a few steps away from leadership It also might not always take the form or a pyramid, or

any shape for that matter As we mentioned earlier, It's also a form of the "Organic

Structure” we noted above

This structure is probably one of the most detailed, It's also thought that employees

can be more productive in an environment where there's less hierarchy-related

pressures This structure might also make staff feel like the managers they do have

are more like equals or team members rather than intimidating superiors

Disadvantages

If there's a time when teams in a flat organization disagree on something, such as a

project, it can be hard to get aligned and back on track without executive decisions

from a leader or manager Because of how complicated the structure's design is, it can

be tricky to determine which manager an employee should go to if they need approval

or an executive decision for something So if you do choose to have a flat

organization, you should have a clearly marked tier of management or path that

employers can refer to when they run into these scenarios

iv Matrix Structure

Unlike the other structures we've looked at so far, a matrix organizational structure

doesn't follow the traditional, hierarchical model Instead, all employees (represented

by the green boxes) have dual reporting relationships Typically, there is a functional

reporting line (shown in blue) as well as a product- based reporting line (shown in

yellow)

When looking at a matrix structure org chart, solid lines represent strong, direct-

reporting relationships, whereas dotted lines indicate that the relationship is

secondary, or not as strong In our example below, it's clear that functional reporting

takes precedence over product-based reporting

Matrix Organizational Structure

[Leadership]

[Job Function #3 ex

Customer Support Representatives]

[Product Division #1]

[Product Division #2} - —- - - ene [Product Division #3] ee nee

Advantage

[Job Function #1 [Job Function #2

ex Marketers] ex Developers]

The main appeal of the matrix structure is that 1t can provide both flexibility and more balanced decision-making (as there are two chains of command instead of just one)

Having a single project overseen by more than one business line also creates

opportunities for these business lines to share resources and communicate more

openly with each other things they might not otherwise be able to do regularly

Disadvantages

The primary pitfall of the matrix organizational structure? Complexity The more

layers of approval employees have to go through, the more confused they can be about who they're supposed to answer to This confusion can ultimately cause frustration

over who has authority over which decisions and products and who's responsible for those decisions when things go wrong

2.1.3 Importance of Organizational Structures

The structure not only defines a company's hierarchy but also allows the firm to layout the pay structure for its employees By putting the organizational structure in place,

the firm can decide salary grades and ranges for cach position

The structure also makes operations more efficient and much more effective By

separating employees and functions into different departments, the company can

perform different operations at once seamlessly

In addition, a very clear organizational structure informs employees how best to get

their jobs done For example, in a hierarchical organization, employees will have to

work harder at buying favor or courting those with decision-making power Ina

decentralized organization, employees must take on more initiative and bring creative problem solving to the table This can also help set expectations for how employees

can track their own growth within a company and emphasize a certain set of skills—as well as for potential employees to gauge if such a company would be a good fit with

their own interests and work styles

They define a specific hierarchy within an organization A successful organizational

structure defin h empl 'SỊ how it fits within rall

who does

This structuring provides a company with a visual representation of how it is shaped

and how it can best move forward in achieving its goals Organizational structures are

normally illustrated in some sort of chart or diagram like a pyramid, where the most

powerful members of the organization sit at the top, while those with the least amount

of power are at the bottom

Not having a formal structure in place may prove difficult for certain organizations

For instance, employees may have difficulty knowing to whom they should report

That can lead to uncertainty as to who is responsible for what in the organization

Having a structure in place can help with efficiency and provide clarity for everyone

at every level That also means each and every department can be more productive, as they are likely to be more focused on energy and time

2.1.4, Elements of structure

The best structure for any organization will depend upon who its members are, what

the setting is, and how far the organization has come in its development

Governance

The first element of structure is governance - some person or group has to make the

decisions within the organization

Rules by which the organization operates

Another important part of structure is having rules by which the organization operates Many of these rules may be explicitly stated, while others may be implicit and

unstated, though not necessarily any less powerful

Distribution of work

Inherent in any organizational structure also is a distribution of work The distribution can be formal or informal, temporary or enduring, but every organization will have

some type of division of labor

There are four tasks that are key to any group:

e Envisioning desired changes The group needs someone who looks at the world

in a slightly different way and believes he or she can make others look at things from the same point of view

e Transforming the community The group needs people who will go out and do the work that has been envisioned

e Planning for integration Someone needs to take the vision and figure out how

to accomplish it by breaking it up into strategies and goals

e Supporting the efforts of those working to promote change The group needs

support from the community to raise money for the organization, champion the initiative in the state legislature, and ensure that they continue working towards their vision

2.2, The organizational structure of Vinamilk

2.2.1 The organization Chart of Vinamilk

The organization Chart of Vinamilk is shown in a professional manner in which

departments are divided systematically and reasonably with specific hierarchy of

responsibility for each member and function in the company This structure helps the company to operate in the most effective way and fosters the collaboration among

departments, thus making a strong Vinamilk

&PR evelopment Development

i The General Meeting of Shareholders

The General Meeting of Shareholders, consisting of all shareholders with voting rights (including ordinary shareholders and voting preference shareholders), is the highest

decision-making body of a joint-stock company Shareholders being organizations

have the right to appoint one or several authorized representatives to exercise their

shareholder rights in accordance with law In case more than one authorized

representative is appointed, the number of shares and votes of each representative

must be specified

ii, Board of Directors

The Board of Directors is the management body of a joint-stock company with full

authority on behalf of the Company to decide on all issues related to the purposes and

11

interests of the company, except for matters falling under the authority of the General Meeting of Shareholders The Board of Directors has not less than 3 members, not

more than 11 members, unless otherwise provided for in the company's charter Board members are not necessarily shareholders of the company

iii, The director or general director of the company

The director or general manager is the person who runs the day-to-day business of the company The director or general director of the company is appointed by the Board

of Directors or hires another person, is under the supervision of the Board of Directors and is responsible before the Board of Directors and the law for the perform assigned rights and duties If the company's charter does not stipulate that the chairman of the

Board of Directors is the legal representative, the director or general director is the

legal representative of the company

iv The Supervisory Board

For a joint-stock company with more than 11 individual shareholders or an

organization shareholder holding more than 50% of the total shares of the company,

there must be a supervisory board

The Supervisory Board has from 3 to 5 members unless otherwise provided for in the company's charter; the term of the Supervisory Board shall not exceed 5 years;

members of the Supervisory Board may be re-elected for an unlimited number of

terms The members of the Supervisory Board elect one of them to be the head of the Control Board determined The Supervisory Board must have more than half of its

members permanently residing in Vietnam and at least one member must be an

accountant or auditor

This is a model showing that the structural model of a joint stock company has

changed according to the requirements of modern management

2.2.2 Factors affecting organizational structure

1 Operating characteristics

Specializes in providing milk and dairy products-operating environment

e There are many milk and dairy products on the market with a variety of types

and options for customers

ul Scale of operations

e Large production scale with many dairy factories across the country

111 Development strategic goals

e Build many factories in the country

e In-depth investment, technology innovation, product diversification

e Build a factory to produce new products