international bussiness report vinamilk expanded business market to japan

VIETNAM GENERAL CONFEDERATION OF LABOUR TON DUC THANG UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION ĐẠI HỌC TÔN ĐỨC THẮNG INTERNATIONAL BUSSINESS REPORT VINAMILK EXPANDED BUSINESS

VIETNAM GENERAL CONFEDERATION OF LABOUR

TON DUC THANG UNIVERSITY

FACULTY OF BUSINESS ADMINISTRATION

ĐẠI HỌC TÔN ĐỨC THẮNG

INTERNATIONAL BUSSINESS

REPORT

VINAMILK EXPANDED BUSINESS

MARKET TO JAPAN

LECTURER: TRAN THE NAM

GROUP 4

Ho Chi Minh City, November 2022

TABLE OF CONTENTS

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CHAPTER 1: INTRODUCTION

Milk is an essential nutritional product for every family, because it not only contains many nutrients such as calcium, vitamins, but also is convenient to use and easy

to find in supermarkets or groceries Therefore, some long-standing reputable dairy companies want to develop their businesses by investing in expanding markets in some potential oversea regions And Asia is always in the sights of large corporations because

of the high demand and potential for business In this term, we chose Vinamilk as the successful corporation that will expand their business in Japan, an Asia country which has very high standards in nutritional products

Vinamilk has always been in the top 50 largest dairy companies in the world in recent years This increases the popularity of the brand and gives the company a lot of advantages in bringing products to new markets The company built large production plants, along with that, built a clean raw material area, meeting technical standards, so the company mastered the quality of products to compete with other manufacturers on the market In addition, the variety of products with many products and types of products distributed by the company to the market is a great competitive advantage of the company over the rest of the competitors With more than 200 items, at the same time controlling product quality along with controlling the stages of raw materials, production and consumption, the company's price is very competitive in the market Thus, we can see that Vinamilk has built itself quite perfect competitive advantages in the market

On the other hand, with a population of nearly 126 million people, Japan is a market with great consumption power In recent years, the number of Vietnamese living

in Japan has also increased rapidly in the past decade, leading to an increase in demand for Vietnamese agricultural products and food For agricultural products, it is necessary to ensure food hygiene and safety standards, which are required to be produced and grown according to GAP, HACCP or JAS standards - Japanese Agricultural Standards In fact, if the quality of a product has been approved by the Japanese market, that product can compete well in other markets

CHAPTER 2: ENVIRONMENT FACTORS

2.1 Political Environment

Japanese politics is founded on the foundation of a constitutional monarchy and a representative republic (or parliamentary monarchy) Besides, Japan always upholds collectivism, so relationships and partnerships based on reciprocity and mutual concessions become extremely important for them

According to the Institute for Economics and Peace (IEP), the GPI 2022 report shows a global peace index based on criteria such as: Level of social security and safety, domestic conflict, international According to that, Japan has a peace mdex in the top 10 countries in the world without domestic and foreign conflicts It can be seen that Japan is

a perfectly suitable country for Vinamilk to expand its investment here

Japan is a member of the United Nations and a non-permanent member of the Security Council; one of the "G4" members sought approval for a permanent member position Currently, Japan is also a member of many international organizations including the G8, the Asia-Pacific Economic Cooperation (APEC) and the East Asia Summit (EAS) and is a generous country in its activities International relief and development efforts accounted for about 0.19% of Gross National Income (GNI) in 2004

At the same time, Japan is also a comprehensive economic partner for ASEAN countries Japan supports ASEAN's increased economic integration In addition, the cooperation relationship between Vietnam and Japan in recent years has grown strongly and well in all fields such as strategic partnership in diplomacy - security - defense, trade partner, etc, In 2020 - 2021: Japan has actively supported Vietnam in the fight against Covid by providing equipment, technology, and vaccine support to Vietnam

In addition, the tax reduction commitments in the Free Trade Agreements between Vietnam and Japan such as VJEPA, AJCEP, CPTPP, etc will make it easier for Vinamilk

to penetrate this market

2.2 Economic Environment

Economic growth in Japan:

According to the Asian Development Bank (ADB), the Japanese economy in the second quarter grew by 2.2%, the third consecutive quarter of positive growth Spending

on consumer services rebounded strongly after Covid-19 travel restrictions were lifted at the end of March Increased spending on consumer goods and services, travel and dining helped boost growth recovered in the second quarter Exports in the second quarter increased moderately Consumer price inflation from April to June reached over 2.0% over the same period last year The price increase was mainly due to higher import prices caused by the war in Ukraine and the devaluation of the yen against the US dollar due to the widening interest rate differential between Japan and the US However, inflation in Japan is still much lower than in other countries

The IMF forecasts GDP growth of the Japanese economy at 1.7%, down 0.7% from the forecast made in April 2022

The OECD revised its forecast for Japan's 2022 economic growth forecast from 1.7% to 1.6%

According to Trading Economics, GDP in the third quarter of 2022 of the Japanese economy 1s forecast to increase by 0.5% compared to the second quarter of 2022 and increase by 0.8% compared to the third quarter of 2021

Picture I Extensive strategic partnership

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According to the IMF, GDP is based on purchasing power parity PPP (2022), Japan has the third highest index with a GDP of 4.3 thousand USD after the US and China

Picture 2 IMF DATAMAPPER

Inflation situation:

A survey by Mizuho Institute of Research and Technology shows that, after the outbreak of Covid, social classes were severely affected by the pandemic, along with the influence of high inflation, leading to the gap between rich and poor in Vietnam Japan is getting bigger

Impact of Pandemic on Annual Household Income

2020 2021

Mizuho Research & Technologies Picture 3 Impact of Pandemic on Annual Household Income

Economic relations between Vietnam and Japan:

On the other hand, the economic relationship between Vietnam and Japan is getting better and better, being a comprehensive strategic partner for peace and prosperity

in Asia Japan continues to be Vietnam's top important economic partner, the fourth largest trading partner after China, the US and South Korea and the first G7 country to recognize Vietnam's market economy status South (October 2011) Trade between the two countries has always kept steady growth year by year In 2021, despite the Covid pandemic, the two-way trade turnover still raised 7.8% compared to 2020 In 8 months of

2022, the total trade turnover between the two countries reached 27.3 billion USD, of which Vietnam exported to Japan 13.4 billion USD, imported 13.9 billion USD

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2.3 Legal Environment

Currently, Japan is developing a "three arrows" economic policy mcluding an active monetary policy, flexible finance, and a growth strategy for the private sector In particular, effectively cutting corporate tax to about 20-30% has helped create a better business environment for foreign companies

Foreign companies entering Japan are committed to creating business opportunities, making it easier to access customers when expanding their markets, promoting the dissemination of new technologies, and supporting investment in resources and related knowledge

Japan is also simplifying regulations and administrative procedures to help reduce legal procedures and attract more foreign investment in this market

2.4 Cultural Environment

The fermented yogurt product is highly appreciated by the Japanese and recommended by experts because it contains many beneficial bacteria, helps to balance the intestinal microflora, promotes the digestive system to work better, and prevents many dangerous diseases, including cancer In this country, everyone, especially children,

is encouraged to consume yogurt daily, which helps prevent intestinal diseases and strengthens resistance

In 2007, Vinamilk also researched and launched its own product line of fermented yogurt, which is Vinamilk Probi with the use of strengthening resistance and preventing colds effectively This product is mtroduced to contain billions of the world's leading probiotics and has been clinically proven to significantly reduce the incidence and number of cold days (according to a study by the National Institute of Nutrition in 2016) Therefore, this product is very suitable for the Japanese market - where people are very concerned and focused on health protection

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Sữa chua uống Sữa chua uống men sống Sữa chua uống men sống Vinamilk Probi 3ang Vinamilk Probi Có Đường Vinamilk Probi Ít Đường 65ml 130ml 130mi

Picture 5 Types of yogurt drink live yeast

In addition, Japanese people also have the habit of using soy products such as soy milk in their daily diet To provide energy for a working day, every morning Japanese

people often drink a cup of nutritious soy milk Soy products are very beneficial to health, especially the ability to reduce cholesterol in the blood In particular, soy milk often contains a high amount of calctum, which is good for fast and healthy bone and joint development, so it is recommended, especially for children

Currently, Vinamilk has its own product line of soy milk with many different flavors and ingredients Creating diversity in the shopping process will be one of the advantages to attract customers for Vinamilk when developing in the Japanese market

2.5 Social Environment

Social environment is one of the essential factor in the composition of the marketing environment This element shows that customers show interest and love for the product/brand They can be a group of reference customers - people who directly buy goods at your business

By participating in many large international fairs, Vinamilk had the opportunity to present its products to more and more customers Especially in Foodex Japan, Vinamilk participated in the Japanese fair with the aim of expanding customer segments in potential export markets - mainly in Japan and from there to Asia more widely Currently, Vinamilk exports condensed milk, nut milk and the last one is the condensed coconut milk, which has been very positively received in the market

Picture 6 The products of Vinamilk at Foodex Japan

Vinamilk has successfully explored a number of condensed coconut milks to export to the Japanese market to meet strict standards and meet the growing demand for plant milk, vegetarian or heterosexual milk, cow's milk protein

The product of this company is valued among partners and experts for its efficiency and nutritional standards "Vinamilk is impressed not only by the precise and flexible service quality, but also by the delicious products that meet Japanese standards The new product, condensed coconut milk, has excellent and promising potential in the market," said Japanese partner Jun Hamada

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Picture 7 A number of coconut milks to export to the Japanese market

As in Korean, Chinese or non-English markets, Vinamilk also designs products exported to the Japanese market with its own packaging, using local languages and images, colors according to consumer preferences Although this billion-dollar Vietnamese milk brand has adapted to the local culture, its product packaging still has a prominent "VINAMILK” logo

2.6 Technological Environment

The impact of technological factors on corporate management Companies that have technical and technological conditions and apply them at an early stage of production and business operations will have great advantages in terms of quality and speed of production to exist and develop from there