Final report course name change management lan hao cosmetics co , ltd thorakao vietnam

ABSTRACT This change management report investigates Lam Thao Cosmetic, a prominent company in the Vietnamese beauty industry, and its current position within the market.. Keywords: THORA

HO CHI MINH CITY UNIVERSITY OF FOREIGN LANGUAGES

— INFORMATION TECHNOLOGY FACULTY OF INTERNATIONAL BUSINESS ADMINISTRATION

FINAL REPORT COURSE NAME: CHANGE MANAGEMENT

Lan Hao Cosmetics Co., Ltd - THORAKAO Vietnam

Group members: Duong Hồng Phúc - ID: 20DH120692

Vũ Minh Hiếu - ID: 20DH121069

Kiều Thị Uyên Chi - ID: 20DH120450 Instructor: Doan Gia Au Du

Course: 2022 -2023

HCMC, 05/2023

ABSTRACT

This change management report investigates Lam Thao Cosmetic, a prominent company

in the Vietnamese beauty industry, and its current position within the market The research analyzes the company's goals and evaluates the systems and processes to attain these objectives Additionally, it assesses the company's environmental and organizational audits, determining the significance of both internal and external factors mfluencing its performance and decision-making The report drives into the trigger events that initiate change, the implications of these changes on the company, and the outcomes that arise from them At the same time, it also examines the organizational culture that Lam Thao Cosmetic maintains to facilitate change and adapt to evolving market conditions as well

as discusses the future changes necessary to ensure the company's sustainability and growth in the long term

The major goal of this research is to provide an in-depth analysis of Lam Thao Cosmetic's current state as well as any changes required for its remaining success By assessing the company's objectives, systems, audits, and organizational culture, the report offers valuable insights into the firm's operations and highlights the importance of continuous change and adaptation for long-term success in the competitive beauty industry

Keywords:

THORAKAO, Lam Thao Cosmetic, change management, trigger event, beauty industry, cosmetic industry, marketing, goals

Table of Contents

CHAPTER 1: INTRODUCTION

CHAPTER 2: DISCUSSION AND ANALYSIS

2.1 Goals and specific objectives

2.2 The plan to achieve this objective

2.3 EFE Matrix for Lan Hao Cosmetics Manufacturing Co., Ltd firm

2.4 IEE Matrix for Lan Hao Cosmetics Manufacturing Co., Ltd firm

2.5 The trigger event

2.6 Implications of changes and the outcomes

CHAPTER 1: INTRODUCTION

Lan Hao Cosmetic Company was founded in 1957 and officially registered as a corporation in 1961, with standard items such as pearl skin cream, shampoo, soap, Paraffin & Brilliantine shine liquid Thorakao trademarked Thorakao's goods have gained popularity and consumer confidence On November 15, 1968, it was issued patent number seventeen seventy-nine and was extensively distributed across the Vietnam territory at the time In 1990, the corporation established a branch in Cambodia as well as subsidiaries in other Southeast Asian nations

After encountering difficult and demanding stages, the corporation created a stable market across the entire Vietnamese region with goods that were becoming more and more varied and enriched in terms of brands, lines, and designs Apart from the well- known brand THORAKAO, the firm owns additional well-known trademarks in the international market such as Leyna, Freewoman, Rossé, Onson, Juliet, and so on The company now includes over 70 items, including skin, body, and hair care categories They combine a cutting-edge, unique formulation with extraction from Vietnamese organic plants The firm generates its own trend, which is mostly based on Mother Nature Its professionals carry out investigations on the pharmaceutical properties of plants, then extract and utilize them to make beauty products, increasing women's inherent attractiveness while using limited chemicals

The firm slogan, "Quality is the First Principle,” emphasizes the organization's commitment to delivering exceptional products The company has earned a reputation as

a top-tier Vietnamese brand, securing the trust and loyalty of numerous customers Presently, the enterprise continues to grow, reaching out to domestic as well as international markets like Singapore, Tarwan, Cambodia, Laos, China, Australia, New Zealand, the United States, Saudi Arabia, Russia, and various African countries In order

to stay competitive in the globalized economic landscape, the company built a

state-of-the-art manufacturing facility in Ho Chi Minh City, spanning 50,000 square meters This massive infrastructure has enabled the company to incorporate advanced technology and maintain a GMP (Good Manufacturing Practices) system, ensuring excellence in manufacturing processes and products

Figure 1: Logo of Lan Hao Cosmetics Manufacturing Co., Ltd

There are several compelling reasons why we decided on Lan Hao Cosmetic Company for our change management report The corporate's constant effort in providing high- quality products serves as an inspiration for others in the industry The successful expansion into diverse international markets clearly showcases the company's ability to adapt to various challenges while maintaining its core values Furthermore, the construction of a modern manufacturing unit in Ho Chi Minh City that is constructed to meet strict GMP requirements shows the organization's commitment to staying up to date with the latest technologies and complying with universally accepted standards

In essence, we believe that Lan Hao Cosmetic Company offers a fascinating and relevant case study for change management, illustrating how a business can succeed and thrive by prioritizing quality, embracing innovation, and expanding into new markets

The project paper is divided into three chapters, mcluding a table of content and references:

Chapter I: Introduction

Chapter 2: Discussion and Analysis

Chapter 3: Conclusion and Recommendation

CHAPTER 2: DISCUSSION AND ANALYSIS

2.1.1 Business Goal

Demand for online shopping climbed from 57% in 2019 to 63% in the first half of 2020 Consumers are exposed to the Vietnam cosmetic industry mostly through social media (69%) Followed by their acquaintances and lastly through Beauty Blogs and Brand online shopping pages

The Covid pandemic had an adverse effect on the beauty industry, which saw a decline of 8% in 2020 However, the best year ever for cosmetics was 2021, so things are on an upward trend By 2025, a survey by Howarth anticipated that the total income in the beauty business would exceed $120 billion

According to Nielsen, the Vietnamese Beauty industry has a revenue of 15,000 billion VND On average a Vietnamese consumer will pay 436,000 VND for beauty products, and most are willing to spend around 200,000- quite low compared to other neighboring countries like Thailand or Singapore Despite this, Vietnam still has one of the fastest growths in Southeast Asia

In 2023, environmentally friendly, organic, and naturally produced products are expected

to continue to be popular among consumers Quality, safety, and ingredients are the top three factors influencing the decision to buy beauty products Thorakao's cosmetics are extracted from natural ingredients, without the use of chemicals, in line with the trend of favoring organic products in the global beauty market The company’s situation is stable, although with no mnovation in its product, littke incentive program, and marketing efforts Lan Thao is far from its heyday

While international brands for product images appear everywhere possible: in newspapers, prime time on TV, billboards on high-traffic routes, etc Thorakao does not

pay much attention to advertising The brand believes in the concept of “natural flavor” — that a good product will be known to everyone eventually The brand also tnes not to advertise because that will create costs incurred on the product, which the consumers will pay for by having to spend more money due to the increased prices Inadvertently, this causes the brand to be forgotten

“T believe that Vietnamese cosmetic brands will always have a place in the hearts of Vietnamese consumers if we serve them from the heart expressed through true value, product quality, and reasonable prices” — Mr Huynh Ky Tran, Chairman of the Board of Directors of Lan Hao Cosmetics Production Company — Thorakao

With the brand’s long-standing tradition and formula If Thorakao can create more eye- catching packaging, create more media effects to attract public attention to the product's characteristics At the same time, by applying marketing strategies and enforcing the slogan “Vietnamese use Vietnamese goods”, applying people’s pride in Vietnamese products The proportion of domestic sales has increased to 35% in 2016 and 39% in

2018 and is forecasted to account for 50% of revenue by 2025 (Thorakao, 2018) With that goal set, by focusing on realistic objectives like marketing to expand brand awareness and reach a larger audience, Lan Hao should invest in more marketing efforts This could involve search engine optimization, influencer marketing, email marketing, and social media advertising This way Lan Hao can effectively allocate its organizational resources and bring the brand back to its golden era

The marketing goals for Lan Hao are as follows:

1 Increase brand awareness among the target market by 50% within the first year of operations

2 Increase sales by 25% in the first year of operations

3 Establish Lan Hao Thorakao as a leading brand in the natural and organic skincare market in Vietnam

2.2 The plan to achieve this objective

The objective of this marketing plan is to analyze the current market situation in Vietnam, identify the target market, and propose marketing strategies to increase the company's market share and revenue

2.2.1 Market Analysis:

Vietnam is a developing country with a population of over ninety-seven million people The cosmetic industry in Vietnam has been growing rapidly in recent years, and the demand for cosmetic products is increasing The Vietnamese cosmetics market is expected to grow at a CAGR of 11.7% during the forecast period 2021-2027 (Pham, 2022), driven by factors such as increasing disposable income, changing lifestyles, and growing awareness of personal grooming and hygiene

Consumers have a bias toward international goods mainly from Japan, America, and Korea since these they believe products from these countries are made with cutting-edge technology, have a higher safety standard, and belong to long-standing brands in the cosmetic industry However, products originating from Eastern Asia countries like Malaysia or Thailand are also favored for their affordable prices and their adaptation to the humid climate same as Vietnam’s climate

2.2.2, Competitive Analysis:

The cosmetic market in Vietnam is highly competitive, with a large number of domestic and international players operating in the market The major players in the market include L’Oréal, Unilever, P&G, Shiseido, and Amorepacific These players have a strong market presence and brand recognition, making it difficult for new entrants to establish themselves in the market

2.2.3 Target Market

The first step in developing a marketing plan for Lan Hao in Vietnam is to identify the target market In Thorakao’s case, its branding is not properly invested so a specific

strategy is required The general target market for Lan Hao in Vietnam 1s women between the ages of 18 and 35 who are interested in natural and organic skincare products Consumers who prefer domestic products with affordable prices and from organic, and natural origins

2.2.4, Marketing Strategies

2.2.4.1 Develop a Comprehensive Content Strategy

The first step in any digital marketing strategy is to develop a comprehensive content strategy Lan Hao should create content that resonates with its target audience This content could be in the form of blog posts, social media posts, videos, or infographics The content should be educational, informative, and engaging Lan Hao should collaborate with influencers and beauty bloggers to create content that promotes its products This will help Lan Hao reach a larger audience base

2.2.4.2 Social Network Marketing

According to a study by Gomez (2021), 71% of consumers who have had a positive experience with a brand on social media are likely to recommend it to other people Social networks are still the most popular form of media for young people It is an effective tool for connecting with new clients and increasing company recognition Create social media profiles for Lan Hao on well-known websites like Facebook, Instagram, Twitter, and TikTok To draw potential clients’ attention, the business should frequently post pictures and videos of its items together with intriguing remarks Lan Hao should also hold social media competitions and gifts to boost engagement and engage with its audience and build

a community around its brand It could organize events, post special sale live streams, and share user-generated content to build a stronger relationship with its audience

- Create digital ads and promote them on Facebook, TikTok

- Create live streams, videos, and posts on YouTube, Facebook, and Thorakao.com

- Upgrade the company’s website UX to be more eye-catching

2.2.4.3 Influencer Marketing

Influencer marketing is another effective way to reach out to potential customers Collaborating with Key Opinion Leader (KOL), or Key Opinion Consumer (KOC) is a great way to reach a larger audience Lan Hao should identify mfluencers who align with its brand values and target audience The brand should offer influencers free products or payment in exchange for promoting its products on social media The influencers can create product reviews, tutorials, and other content that will help to increase brand awareness and drive sales

Some popular names like Trmh Pham, Chang Makeup, Lou Le, and Ha Linh have a dedicated, large follower base and can reach the company’s target market with their videos and shorts on social platforms

2.2.4.4, Events and Pop-up Stores

Lan Hao can also increase brand awareness and drive sales by hosting events and pop-up stores in popular shopping centers and malls like Vincom, AEON Mall, and Coop Mart to make itself more well-known throughout the city The company can invite potential customers to take sample products and offer special discounts to those who make a purchase This will give customers the opportunity to experience the products first-hand and increase their confidence in the brand

2.2.4.6 Search Engine Optimization (SEO)

10

Search engine optimization is a critical component of any online marketing strategy Lan Hao should optimize its website for popular, trending, and meta keywords related to natural and organic skincare products in Vietnam This will help the company to rank higher in search engine results pages and attract more organic traffic to its website The brand should also ensure that its website is mobile-friendly and has a fast load time The company should also focus on local SEO to target customers in specific geographical locations The brand should claim its Google My Business listing and ensure that its information is accurate and up to date The brand should also ensure that its website is mobile-friendly and has a fast load time

2.2.4.7 Use Retargeting Ads

Retargeting ads are a form of online advertising that targets customers who have previously interacted with the brand Lan Hao could use retargeting ads to promote its products to customers who have visited its website or added products to their cart but did not complete the purchase Retargeting ads are highly effective because the target customers have already shown an interest in the brand This increases the chances of converting these potential customers into paying customers

2.2.4.8 Retail Partnerships:

We need to partner with retailers to reach a wider audience and increase sales According

to a study by IRI (2018), 75% of shoppers prefer to buy from retailers that offer a wide range of organic and natural products Retail partnerships can help Lan Hao increase its market share and reach a wider customer base The company can partner with pharmaceutical chains or small pharmacies such as Pharmacity, Long Chau, An Khang, and Medicare to distribute its products Additionally, Thorakao is sold in the beauty cosmetic section in most supermarket chains and most general stores Although requiring extensive effort the company can also create exclusive product lines for these retailers specifically to differentiate its products from its competitors We also need to invest in

11

product displays and in-store promotions to increase visibility and attract customers -Im- In-store promotions can increase sales by up to 20%

2.2.4.9, Loyalty Programs:

Loyalty programs can help Lan Hao retain its existing customers and encourage repeat purchases The company can create a loyalty program that rewards customers for their purchases and encourages them to refer their friends and family to the brand This can be

in the form of a point system, most preferably through the company’s application where each purchase translates to several points that can be redeemed for discounts, free products, or to upgrade to VIP

2.2,4,10 Product Innovation

Product innovation is crucial for staying competitive in the market Lan Hao needs to continuously improve their existing products and launch new ones to meet the evolving needs of the market While Thorakao specializes in Turmeric cream and facial cleansers Thorakao should create products that suit the hot and humid climate of Vietnam Products like organic sunscreen or skin whitening cream/ointment are in trend and can be very popular

Another factor that contributed to Lan Hao’s decline is its packaging While the market nowadays is filled with modern, sleek designed products from international manufacturers and competitors, the company still uses out-of-date and unflattering colors for their products Lan Hao should also leverage their product prices for the company’s advantage by utilizing Vietnamese people’s preference for cheap products We must find

a balanced price point to not make consumers believe the products are too expensive or

of inferior quality when keeping the prices low

12