Group 4 strategic human resource managemnt of th true milk

7 Figure 4 - TH Milk Joint Stock Company was honored at the ceremony announcing the products that achieved the Vietnamese National Brand 2022.00.00.... Introduction TH True Milk - also

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V HOA SEN UNIVERSITY

GROUP 4 STRATEGIC HUMAN RESOURCE MANAGEMNT OF TH TRUE MILK

Subject : Strategic Human Resource Management

Class ID: HRM404DE01 - 100 Lecture: Dao Thi Ngoc Mai (Master of Business Administration)

5 Le Tran Khanh Duy 2180464

6 Phan Nguyen Thanh Chau 2180856

Ho Chi Minh City, June 2023

HOA SEN

GROUP 4 STRATEGIC HUMAN RESOURCE MANAGEMNT OF TH TRUE MILK

Subject : Strategic Human Resource Management

Class ID: HRM404DE01 - 100 Lecture: Dao Thi Ngoc Mai (Master of Business Administration)

5 Le Tran Khanh Duy 2180464

6 Phan Nguyen Thanh Chau 2180856

Ho Chi Minh City, June 2023

ACKNOWLEGEMENT

First and foremost, we would want to express our heartfelt gratitude to our

Strategic Human Resources Management lecturer, Ms Dao Thi Ngoc Mai She is

always willing to assist and support us during this semester's course

We would like to extend our heartfelt gratitude to TH True Milk’s Human

Resources Department for providing us with valuable and essential information, and

for their unwavering support throughout the entire report completion process

Despite having some deficiencies in specialized knowledge and theoretical

articulation stemming from this course, we have successfully finished our report using

the knowledge we have acquired Our team eagerly anticipates receiving valuable

feedback and recommendations from the instructors, which will enable us to improve

ourselves and expand our understanding

Sincerely thanks!

ABSTRACT

In the Strategic Human Resource Management course, all significant aspects

such as recruitment, training and development, compensation, and other related

factors hold great importance

TH True Milk, a national company and a source of pride for the Vietnamese

people, was chosen to implement this report, which holds special significance for us

TH True Milk has always regarded people as the decisive factor for success With an

ideal of people and the spirit of the Vietnamese nation, TH True Milk's human

resources strategy is adjusted and revised annually to align with global trends

Vietnam's workforce is increasingly getting younger, with the influx of talent

and learning from other countries Previously, national enterprises like TH True Milk

faced challenges in building effective personnel training strategies, but in the current

era of globalization, foreign talent and long-term personnel within organizations are

becoming increasingly scarce TH True Milk has contributed to the development of

the international market and global products

TABLE OF CONTENTS

1.5 Vision, Mission, Core value, and Business Philosophy sssssosssssoe 8

1.6, Business strategy (SWOT) 9

2.4, Business unit strategy 26

3 Social Responsibility & Human Resource Managemmen . - = =« 28

3.1 Workforce đemographic changes and DIV€T-SÏYV o- S555 28

3.2 Corporate Social Responsibility 31

3.3 The link between HRM strategy and Business strategy sssseesssssssssees 39

4 Án mvestment perspective of HIRÌM on mm mm ng 40

4.1 Theory of Investment Perspective 40

4.2 Investment Perspective of Strategic Human Resources Management in TH

True Milk 43

4.3 TH True Milk has invested in the SAP SuccessFactors solution 45

4.4 The benefits reaped from SAP SuccessFactfors soÏution - - s« 46

4.5 The link between HRM strategy and Business strategy sssccccsssssssees 47

5 Training and Development 49

5.1 Theory of Training and Development 49

5.2 Planning & Strategizing Training 49

5.3 Integrating Training with Performance Management Systems and

Compensation in TH True Milk 50

5.4 Training and Development activities in TH True MIIk 31

5.5 The link between HRM strategy and Business strategy s.ssscccssssssses 535

CONCLUSION 57

REFERENCES 58

TABLE OF FIGURES

lì 1

Figure 2 - Mr Ngo Minh Hai, Chairman of the Board of Directors of TH Group, has

been awarded the title of “National Brand of the Year 2020” eee eee 6

Figure 3 - TH True Milk 0 (ii 8n 7

Figure 4 - TH Milk Joint Stock Company was honored at the ceremony announcing

the products that achieved the Vietnamese National Brand 2022.00.00 ccc 7

Figure 5 - Madam Thai Huong - COB of TH MIIk JSC ác Sài eesre 10

Figure 6 - The project of raising dairy cows in Tn Ton district, An Giang province of

08 0 1 — 11

Figure 7 - TH True Milk price list cee cceceeeeeeeeeeeeeeceeeseeneeseeseesneseecaesneeeeeeeees 14

Figure 8 - TH True Milk's datry farm cece eceececeeeee cesses cneeneenseneeeaeesesneseeneeaes 27

Figure 9 - The TH people, whether in the office or in the fields, in factories, all share

the Jjoy of labor at the “Place of Happy Work” ác 12c 12 1221122112 11811111211 xe 30

Figure 10 - Comrade Bui Thanh Thu, Deputy Head of the Northwest Steering

Committee (left cover), recerves the donation from the representative of TH Group 33

Figure 11 - “Dieu uoc cho em” program, sponsored by TH Group, is armed at children

WN border areas 34

Figure 12 - A customer took a photo while “check in” at TH true mart's orange corner

C1111 11111111 11111111 11 1111111 1111111111111 1111111 1111111 1611111111111 1110111 1111111 111110110 111161111 11 10111 XE 36

Figure 13 - Encouraging customers to adopt a greener lifestyle by replacing plastic

baps with canvas fabrIc bags ác 1201121 11211211 111112111011 101 10111011 1111111 1111 0111k 38

Figure 14 - Human Resource Value Chain by Dyer and Revees - c 2 43

Figure 15 - TH Group has been honored with the title of “Best Workplace in Asia

Figure 16 - TH Group is a pioneering organization that has transformed digitally onto

a world-class modern manàement platforim - ¿+ 2 22222211211 121 1225122122512 122x+2 45

Figure 17 — “TH — Sales Trainee Program 202 Ï” - c2 St 2111111112112 11212 1112 xe 52

Figure 18 - The management team of TH True Milk participated in a training course at

the CEO Vietnam Academyy - L0 00020 10120111011111 111111111 111111 1111111111111 1111 cha 55

1 Introduction to TH True Milk

TH”

Figure 1 — TH logo 1.1 Introduction

TH True Milk - also known as TH Milk Joint Stock Company - 1s a company

that belongs to the TH Group, established in 2009 in Nghe An province, Vietnam

Entering the Vietnamese market in 2010, the company has always aimed to

produce the purest form of “fresh and clean” dairy products Despite being present in

the market for just over 10 years, TH True Milk has shown its superiority in the

Vietnamese dairy segment, surpassing the likes of Vinamilk, Moc Chau, and even

FrieslandCampina, albeit in terms of time rather than development speed and market

reputation

According to retail market measurements as of March 2021, TH True Milk has

achieved a market share of 30% in the fresh milk segment within urban retail

channels Furthermore, TH Milk JSC has solidified its position in the dairy industry,

evidenced by its second-place ranking in the Top 10 Trusted Food Companies of

2020, specifically within the Milk and Dairy Products category

With a commitment to preserving the essence of nature in each product, the TH

Group has equipped itself with advanced technology and a world-class workforce The

company also applies a high-quality management system and a comprehensive and

synchronized production process, from cattle breeding to product distribution to

consumers All of these efforts are dedicated to providing consumers with clean, safe,

fresh, and nutritious products

The product portfolio of the TH Group currently includes TH True Milk, a range of pasteurized fresh milk products The company is also developing the TH True Mart retail system

TH Milk JSC has invested in a high-quality management system and a closed, synchronized process that adheres to international standards This process covers grass cultivation, farm construction, animal feed production, veterinary management,

processing, packaging, and product distribution to consumers

1.2 History of formation and development

In 2009, TH Milk JSC was established as a subsidiary under the management of

TH Group The company officially commenced operations on February 24, 2009,

with financial consulting provided by North Asia Commercial Joint Stock Bank, also known as Bac A Bank It was the first company of the TH Group to invest in

an industrial dairy farm project, modern milk processing technology, and a systematic distribution network Prior to that, the company started its construction

in 2008 The TH True Milk project was initiated in 2009 with the importation of

dairy farming technology from Israel and thousands of cattle breeds from New Zealand Ms Thai Huong serves as the Chairwoman of the Board of Directors and

is also the CEO and Vice Chairwoman of Bac A Bank

In 2010, TH Milk welcomed its first cow, named “Moc” to Vietnam on February

27, 2010 On May 14, 2010, the ground breaking ceremony for the TH Milk Factory took place in Nghia Dan, Nghe An, with a total investment of 1.2 billion USD On December 26, 2010, the official launch of TH True Milk and the introduction of TH True Milk fresh milk products took place, reaching the hands

of consumers During the inauguration ceremony, TH Group also donated 1.5 million glasses of milk, with a total value of 10.5 billion VND, to underprivileged

children in Nghe An province and nationwide

In 2011, TH True Milk inaugurated its first TH True Mart store in Hanoi on May

26, 2011 On August 30, 2011, the first TH True Mart store in Ho Chi Minh City was also opened On September 4, 2011, the project "For Vietnam's Stature - United in Efforts, Nurturing Talents" was launched On October 15, 2011, TH

Muk Joint Stock Company had the honor of receiving the “Golden Trust Supplier 2011” certificate, awarded by the Vietnam Enterprise Institute The “Golden Trust Supplier in Vietnam” certificate is a standard measure for evaluating the quality of products and services of Vietnamese enterprises, aiming to promote and encourage outstanding businesses and help consumers make informed choices In addition to the Vietnam Enterprise Institute, two other important organizations directly involved in the evaluation and certification process are the True Index - Enterprise Credit Rating Center and NQA - Certification Organization - International Quality

Management - the United Kingdom The collaboration among these different

authorities and functions ensures comprehensiveness and objectivity in evaluating and selecting deserving enterprises

In 2012, TH True Milk participated in an international dairy workshop and

launched a new range of fortified pasteurized fresh milk products on November

27, 2012

In 2013, the TH Fresh Milk Factory (Phase I) was inaugurated, featuring the most advanced and largest-scale industrial dairy farm in Southeast Asia, on July 9,

2013 At the same time, TH Milk JSC announced a revenue of 3,000 billion VND

In 2015, TH True Milk established the largest cluster of high-tech concentrated dairy farms in Asia on February 10, 2015 On June 25, 2015, they won the “Best ASEAN Food” award for the TH School Milk-Topkid product line On September

17, 2015, at the World Food Expo Moscow, TH True Milk recetved 3 Gold awards, 3 Silver awards, and 1 Bronze award In late December 2015, TH signed

an agreement with Control Union Vietnam Co., Ltd to implement organic milk

production in Vietnam Within just 5 years since the launch of its first product, TH True Milk became the largest dairy cattle owner in Vietnam, with a herd of 45,000

cows on an 8,100-hectare farm area concentrated in Nghe An

In 2016, TH received three awards at the Gulfood Dubai International Fair on February 21, 2016 From May to October 2016, TH commenced the construction

of the TH Dairy Farm Complex in Moscow and Kaluga provinces, Russian Federation On October 19, 2016, they received the Best Dairy Farm in Vietnam

award presented by Vietstock On December 10, 2016, the TH Farm was awarded the gold cup for organic dairy farming

In 2017, groundbreaking ceremonies were held for the high-tech dairy farming and milk processing project in Ha Giang and Phu Yen provinces in November and

December 2017

In 2018, TH True Milk inaugurated its first TH dairy farm in Moscow, Russian

Federation, on January 31, 2018 On December 20, 2018, they received the National Brand Symbol for the third consecutive time

In 2018, TH True Milk witnessed a growth of nearly 22% in production (while the overall dairy industry showed minimal growth) and a 30% growth in revenue

In 2019, on October 22, TH held a ceremony to announce the first batch of Vietnamese dairy products officially permitted for mainstream export to the Chinese market TH became the first Vietnamese enterprise to receive a transaction code from the General Administration of Customs of China for

exporting fresh milk products to China, marking a significant milestone for the

dairy industry in Vietnam and TH in particular While ten years ago, some Vietnamese businesses imported powdered milk from China for reprocessing, now

a Vietnamese enterprise 1s exporting fresh milk products to this potential market of 1.4 billion people This 1s a remarkable “landmark” change, highlighting the

development of dairy farming and milk processing in Vietnam

In 2020, TH received the National Brand honor for the third time on November 25,

2020 They also ranked second in the Top 10 Trusted Food Companies in 2020, specifically in the Dairy and Dairy Products sector (Vietnam Report)

In 2021, TH True Milk successfully completed the importation of 1,620 high-yield

Holstein Friesian dairy cows from the United States to their cattle farm in Nghe

An, Vietnam, on January 9, 2021 TH also accomplished its plan of acquiring 4,500 cows in 2020

Included in the top 100 trusted and used products with the TH True Milk brand

At the Gulfood International Food Exhibition in Dubai in 2016, the TH Group (owner of the TH True MILK brand) received three major awards

Ranked among the top 10 dairy companies in Asia in 2017

In 2018, the TH Group had four product groups honored as National Brands, which are: TH true MILK, TH true MILK TOPKID formula; TH School MILK;

Figure 2 - Mr Ngo Minh Hai, Chairman of the Board of Directors of TH Group, has

been awarded the title of “National Brand of the Year 2020”

Additionally, TH True Milk has achieved success in building a sustainable business model and developing sustainable agriculture The company has implemented modern technology and processes to create high-quality milk products and has contributed to the development of Vietnam's dairy industry

1.4 Product

After revolutionizing the dairy industry with the TH true MILK brand, TH Group embarked on a revolution in plant-based milk with the introduction of the TH

true NUT brand Currently, TH Group is confidently advancing on the path of healthy

beverages with pioneering products such as TH true WATER, pure water, and TH true

JUICE milk, fruit juice with milk

All products of TH Group strictly adhere to national and international standards throughout the closed production process, showcasing the pioneering role of a leading producer of fresh and clean milk and food

Notably, TH true MILK, as the first product, has obtained official export licenses to the most demanding and potential market in the world, China Currently, TH's fresh milk products have also entered other major and challenging markets with great potential, including the United States and the ASEAN region

So far, TH True Milk has created a total of 13 product categories, which consist of UHT fresh milk, oat milk beverages, formula milk, ice cream, pasteurized fresh milk, Topkid formula products, natural yogurt, beverages food products, butter-cheese, tea bags, nut milk and pure water

Figure 3 - TH True Milk products Among them, there are five product groups that have been awarded the

Vietnamese National Brand 2022, including TH true MILK UHT fresh milk, TH true

ICE CREAM, TH true NUT milk, TH true WATER pure water, and TH true JUICE milk fruit juice

Figure 4 - TH Milk Joint Stock Company was honored at the ceremony announcing the products that achieved the Vietnamese National Brand 2022

1.5 Vision, Mission, Core value, and Business Philosophy

s% Vission:

TH Group aspires to become the leading contract manufacturer in Vietnam for the clean food industry, with products sourced from natural origins Through serious and long-term investments, combined with the latest scientific advancements, we are determined to become a globally recognized food brand trusted by consumers, beloved by enthusiasts, and a source of national pride

“ Mission:

With a deep appreciation for nature, TH Group strives to nurture the physical and spiritual well-being of the Vietnamese people by providing food products that originate from nature - clean, safe, fresh, and nourishing

TH's business philosophy is clear and consistent: the quality of fresh milk must

encompass the entire closed-loop cycle, which is closely monitored and managed The

first factor is the input of raw milk, which must be genuinely fresh and derived from a

clean farming process: clean feeding, clean living, and clean drinking

1.6 Business strategy (SWOT)

“* STRENGHTS

The advantage of the starting point:

Since its mception, TH True Milk has been dedicated to systematically

investing in the organization's construction and development This has involved maintaining investment capital from Bac A Bank, as well as establishing and expanding the largest farm and production facility in Southeast Asia They have also

focused on ensuring a stable production process, starting from general livestock

farming to widespread distribution Another key aspect of their strategy has been to

increase brand recognition on a large scale

Despite facing intense competition in the Vietnamese dairy market from both domestic and foreign brands like NutiFood and Vinamilk, TH True Milk has managed

to capture a significant portion of the domestic market, holding a 45% market share It has also become a representative exporter of dairy products to the Chinese market and ASEAN countries

Thanks to its focus on exploiting the fresh milk product category, TH True Mulk has successfully solidified its position as one of the top 3 milk producers in Vietnam with a scale of over 140,000 retail outlets, distributors, grocery stores, etc Through the SWOT analysis of TH True Milk, the corporation quickly emerged as a

"major player" in the industry, thanks to the advantage of its starting point

The advantage of human resources:

¢ The leadership possesses vision, sharp thinking, and a compassionate heart:

Ms Thai Huong currently serves as the founder and chairman of the Strategic Board of Directors of TH True Milk It is known that she led the introduction of the clean fresh milk product, TH True Milk, into the market

It was also her who brought the technology for producing clean fresh milk to

Vietnam for the first tme and implemented a closed production process from green pastures to the final product, which is a glass of pure, nutritious fresh milk

Under the skillful leadership of Madam Thai Huong, TH True Milk quickly gained a significant position in the hearts of Vietnamese consumers.

Figure 5 - Madam Thai Huong - COB of TH Milk JSC

¢ Highly skilled and professional workforce:

The corporation has a large workforce that is well-trained and professional The

workforce 1s divided into four groups to carry out different tasks and functions,

working together to drive the company's continuous development

¥ Operations team: This group consists of highly skilled technical personnel who have a learning mindset and the ability to quickly absorb new knowledge Their job positions include maintenance staff, technicians, and machine operators

¥ Operations and management team: This group consists of individuals with the ability to coordinate, supervise, and manage various tasks within the company,

including personnel management They hold positions such as sales supervisors,

TH True Milk store managers, and supermarket channel supervisors

¥ Human resource management team: This group consists of individuals with the ability to search for talented candidates for the company and manage HR-related matters Their roles include recruitment specialists and HR development specialists

Y Production team: The corporation currently employs around 900 local workers in

all departments, with a minimum income of 3.2 million VND per worker These workers receive guidance from experts to meet Israeli standards in dairy cattle farming techniques.

Y Not only in Cao Bang, but the project also expanded to the border area of Tri Ton,

An Giang province, with a total investment of 2.6 billion VND Once operational,

this will be the largest closed-loop high-tech cattle farming project in the Mekong

Delta region, with a scale of over 10,000 cows and a clean fresh milk processing plant with a capacity of 135 tons per day

Figure 6 - The project of raising dairy cows in Tri Ton district, An Giang province of

TH True Milk

By implementing large-scale clean livestock farming projects with significant capital investment, the corporation has gained recognition and attracted the attention

of consumers As a result, the company has continuously increased its net profits for

several years From 27 billion VND in 2014, the net profit doubled to 58 billion in

2015 and continued to rise to 130 billion in 2016 The profit further accelerated with

319 billion in 2017 and reached 450 billion in 2018

Infrastructure advantage:

TH True Milk's dairy farm system 1s equipped with and applies Israeli-standard livestock farming technologies in all stages, such as:

Y The use of electronic leg tags in herd management This technology can detect the

estrus cycle of cows, automate the control of the milking system and milk quality Additionally, it helps detect early signs of diseases like mastitis and control illnesses

Y The utilization of advanced Amiad water filtration technology It ensures the constant supply of clean and pure water Furthermore, it is complemented by an automatic milking system with strict control procedures Fresh cow milk, after being milked, 1s transported from the refrigeration pipe system to the bulk tank on the farm and then transferred to refrigerated tankers for transportation to the plant (maintaining a temperature of 2-4 degrees Celstus)

Y The entire system employs state-of-the-art equipment on a leading scale in Asia

The equipment is imported from G7 and European countries and operates

according to ISO 9001 standards The products are produced and managed according to ISO 22000 standards, meeting stringent requirements for food safety and hygiene

Y Establishing a dedicated distribution channel - the TH True Mart Fresh Food Store

chain As of 2021, the store chain has expanded to approximately 290 stores

operating parallel to traditional channels throughout Vietnam The products

displayed in the stores are guaranteed to be stored under safe temperature conditions

Brand advantage in fresh milk:

According to a market research company's report in the dairy industry, TH

True Milk has a top-of-mind awareness index of 27% among customers, a brand

recognition index of 85%, and a loyalty index of 29%

This means that out of 10 people asked about milk, 3 people have TH True MILK as their first brand in mind, 8-9 people recognize this brand, and 3 people are considered loyal customers

Organizational culture advantage:

TH True Milk is renowned for being an environmentally and socially friendly organization The company has successfully implemented its operating philosophy of

"True Happiness," contributing to delivering the best quality products to consumers

In its business operations, the corporation establishes its principles and vision, including:

Y Protecting community health through pure fresh milk sources

¥Y Ensuring a completely natural supply of raw materials

Y Providing products that meet the standards of Freshness - Deliciousness -

Nutritional value

vé Engaging in business activities that are friendly to the domestic economy

¥Y Promoting human values to the community and society

These principles are not only applied in business operations but also considered

important criteria for selecting candidates for the organization They help TH True

Milk seek high-quality, responsible, and passionate human resources

By strictly adhering to these shared principles, the TH True MILK brand has successfully created a fresh milk brand associated with human values in the hearts of

Vietnamese consumers

Brand advantage for the community:

TH True Milk is also actively involved in community-oriented activities For

example, building farms and milk processing plants in local areas has contributed to

job creation for local residents and improved agricultural land efficiency

Furthermore, the corporation regularly organizes sponsorship programs

providing milk to children in highland and disadvantaged areas within the country.

They also initiate projects to renovate roads, restore ancient temples nationwide, and

promote the value of women and enhance social ethics

Moreover, it is TH True MILK that has proposed regulations and standardized various types of milk to the government, aiming to promote the market for clean fresh milk for

consumers

“ WEAKNESS

Despite possessing many strong advantages that allow the brand to compete with its rivals, the corporation still faces several weaknesses that pose challenges in its business operations:

Cost:

Since its establishment, TH True MILK's fresh milk products have had a

significantly higher price compared to other milk brands on the market, such as

Vinamilk and Moc Chau The cost factor itself has somewhat diminished the competitive advantage of the brand

As a result, the selection of target market segments and customer demographics

for the brand has gradually narrowed Customers in the middle and lower-income

segments often hesitate when making purchasing decisions due to the higher price poIt

Figure 7 - TH True Milk price list

Production Operation Costs:

Operating a farm that meets international standards and operates effectively requires significant expenses This 1s a major weakness identified by TH True Milk during the analysis of its SWOT matrix

To successfully produce a batch of high-quality finished products, TH True Mik has invested a tremendous amount of capital The estimated amount reaches

billions of VND per year, including investments in machinery and equipment meeting

Israeli standards, as well as the importation of purebred cattle from foreign countries Incomplete wastewater treatment system around the production area:

It is known that the TH True MILK farm in the Nghia Dan, Nghe An area still has three issues causing pollution to the local residents that have not been addressed Specifically:

» Air pollution: Odors emanating from the cattle breeding areas, feed processing areas, and waste treatment areas spread into the environment Additionally, the air

contains a significant amount of dust from transport vehicles and waste

transportation from the factory

>» Noise pollution: Continuous movement of cargo vehicles and waste, along with the sound of operating machinery, has created loud noise that affects the local residents’ living conditions

> Water pollution: According to reports from local residents, initially, the underground water source in the area was clean and clear, suitable for drinking and daily use However, after the construction and operation of the TH farm, the household water now appears yellowish, turbid, and foamy

The milk market in Vietnam is currently experiencing saturation:

There is an increasing number of brands offering fresh milk products at various

price points and segments This has resulted in a vast array of products displayed on

supermarket shelves, making it challenging for consumers to make decisions

This is a complex issue that TH True MILK needs to dedicate considerable

time to address It requires consistent planning, customer engagement strategies, and

innovative approaches to enhance brand recognition Bottom of Form

*<* OPPORTUNITIES

The impact of external forces on the business has also brought TH new

development opportunities

Opportunity to access the global market:

In Vietnam, TH True Milk has successfully captured a significant portion of the domestic consumer market and built a stable base of loyal customers Furthermore, the brand and product quality of the corporation are recognized and highly regarded

> Domestic market:

The growth rate of milk consumption and dairy products is showing signs of

recovery According to Kantar Worldpanel's market report, this positive trend can be attributed to factors such as the young population structure, average income levels, and people's inclination towards nutritional products and immune system enhancement in response to the impact of the Covid pandemic

Specifically, the estimated revenue of the Vietnamese dairy industry reached

135 trillion VND in 2020 (an 8.3% increase compared to the previous year) Although the proportion of milk consumption remained relatively stable (accounting for 11.9%

of total consumption), there has been an increasing demand for yogurt and fresh milk

to boost immune health during the pandemic period

> Foreign markets:

® China market: TH Group is the first Vietnamese dairy company to meet the requirements for official export to the Chinese market (granted by the General Administration of Customs of China in 2019) for two product categories: pure pasteurized fresh milk and pasteurized fresh milk with natural flavors This is a significant opportunity for the corporation to obtain an official "passport" to

operate in this vast market with a billion people

® Russian market: The corporation has invested in building high-tech dairy farms and processing plants, along with several other food projects, estimated

at over 2.7 billion USD in the Russian market

Under relentless efforts, TH True Milk has established its brand position

through prestigious awards obtained domestically and internationally Specifically, these include the World Food Moscow Award (consecutively for 4 years since 2015),

Top 10 Strongest Vietnamese Brands 2018, National Quality Gold Award 2020, and the World-Class International Quality Award in Asia-Pacific 2021

Focusing on improving consumer health:

The corporation has set a strategic vision from the beginning, with a core focus

on consumer perception and health Therefore, the corporation has conducted research

and developed a line of dairy products that are highly favored by consumers

By 2025, the global revenue of the TH brand's organic milk product line is

estimated to increase by 200% To seize this opportunity, the corporation is building

plans and strategies to expand its presence in this promising new market

In 2017, during the 26th International Food Exhibition held in Moscow, TH True Milk was honored with the "Best New Product 2017" award Additionally, the corporation's participation in the APEC Economic Leaders' Meeting in Da Nang has provided favorable conditions for expanding numerous new global cooperation opportunities in the future

¢* THREATS

Undentably, coexistence with opportunities brings challenges, and this corporation is no exception TH True MILK must face numerous potential risks, including:

Intensifying competition:

In Vietnam, the dairy industry and its products are among the most fiercely competitive sectors in the market, posing a significant challenge for TH True Milk Considering the price segment, TH's products have a slightly higher price compared to

many other brands, which is a disadvantaged for the corporation in market

competition

Furthermore, in the current flat economy, new strategies and product ideas can easily

be "copied" by other brands at more suitable prices

Moreover, apart from domestic competition, TH Group also faces additional pressures in international markets regarding the regulations and quality approval of exported products

Given these challenges, TH True Milk requires a well-defined development roadmap with precise and cautious steps for the future

Competition among alternative products to TH True Milk:

In the dairy industry, the market not only offers fresh milk but also various other types of milk such as powdered milk, plant-based milk, and more Additionally, there 1s a wide range of alternative beverages available, including green tea and fruit tea These new products target specific consumer needs and attract attention, intensifying the competition in the industry

Although TH Group has quickly responded to changing consumer preferences

by introducing unique and delicious product lines like TH True MALT (a malt drink) and TH True Herbal (a herbal drink), this is a positive development for the brand as it partially counters the competitive pressure from alternative products

However, the market is constantly evolving, and the corporation must remain vigilant It needs to swiftly adapt and strive to lead industry trends, diversify its product portfolio, and aim to dominate the beverage market

Pressure regarding future commitments:

Another challenge that TH True Milk Company faces 1s fulfilling the commitments it has made for the future Despite the ongoing development and expansion of the business, there are significant resource and time investments required for such a massive scale, not to mention the uncertainties that may arise in the future These factors create considerable pressure on the corporation

Furthermore, at the present time, the corporation is also entangled in

allegations regarding environmental pollution surrounding its factories and farms

Although solutions have been proposed, they have not been fully implemented and there is still a potential for future risks

2 Strategic management

2.1 Model of strategy

TH True Milk adopts a strategy model that relies on its resources as the

foundation This resource-based model emphasizes that organizational decisions should be guided by the assessment of the organization's resources and capabilities,

rather than being driven by external factors like the environment One crucial resource

within this framework is the human resources of the organization By effectively

acquiring and valuing their resources, organizations can thereby secure a competitive

advantage

2.2 Strategic management process

Mission statement: The quality of fresh milk must include a whole close cycle which

be controlled and maintained strictly

TH True Milk is a typical case of adopting a “perceived quality” brand strategy This 1s one of the key elements of brand value - Brand equity This is divided into three aspects:

e The relationship between actual quality and perceived quality

TH True Milk has done a great job in this area by using the term 'organic’

By emphasizing the public relations promotion of "organic milk", TH True Milk is somewhat different from other dairy brands in the market

® Quality attribute declaration

It has a large cattle farm This is a material foundation that can at least explain the term “organic” used by TH True Milk when describing its products

® Create the most favorable quality in the minds of customers

What TH True Milk does is the so-called 'preconceived proposition’ Real milk comes first

Environmental analysis: TH True milk has always known as an organic industry of product that made from milk And TH True Milk has created a market trends of

“Organic” product TH True Milk has achieved Europe organic standard (EC 834-

2007 and EC 889-2008), more over TH True Milk has planned to achieve the US

organic standard (USDA-NOP) Not just the “Organic” trends that made people know about TH True Milk TH True Milk has made their brand name attached with the word

“Organic” from the very first day of their business

Organization Self-Assessment:

e Tangible asset

TH Group invests heavily in advanced management system and closed production process The largest farm in Southeast Asia has been established in Nghia

Dan district, Nghe An province, with a total investment of US$ 1.2 billion It is

estimated that by 2020, the number of cattle will reach 137 This will be a rich raw material for TH Company's modern dairy processing plant, with an annual output of

500 million liters, meeting 50% of the dairy demand in the domestic market There is

also a sugar factory and a milk processing factory in the company

The company also invested in an automated milking system: an automated milking center managed by Israeli company Afimilk (Isarael)

In order to deliver products to consumers quickly, safely and conveniently, TH has also developed a retail chain store TH True mart

AfiLite milk measuring instrument-an accurate and effective instrument for measuring

yield and milk composition, has passed the animal data storage ICAR of the International Committee

® Personal property

¥ Manager: Mr Tran Bao Minh, General Manager of TH True Milk Company, used

to be the deputy general manager of Vinamilk He is very experienced in the dairy industry and knows very well that TH True Milk's competitor is Vinamilk

Y Production personnel: The company employs about 900 local workers, and experts

and farmers guide the dairy farming technology in Israel

e Skills and techniques

TH True Milk also tried to overcome these shortcomings by hiring a guidance and management recruitment expert with experience in dairy industry

e Achievement

At present, Vietnamese dairy industry must import milk and make it into 72% pure milk, compared with 72% at present And TH's real milk goes on a separate road, which is the process of raising grass, buying cows and buying them to protect the integrity of nature and provide clean milk

e Resource condition evaluation

The above resources should be completely easy to imitate, but not every

enterprise can see these resources and use them for PR to its brand This is the

difference between TH True Milk and other products

Y Before and after active integration;

Y Create a milk brand famous for its quality and put quality standards in the first place;

Y The production of clean and high-quality products is based on modern and advanced production systems

e Different abilities

It can be seen that compared with other competitors in the dairy industry, one

of TH True Milk's current core competencies 1s the ability to produce high-quality and clean products Although the evidence came later, TH True Milk quickly established

its own brand, which aroused the vigilance of other companies

Goals and Objectives:

Goals: As a major part of society, when targeting women and young women as the primary consumers for this product, we expect to spread this milk in people’s daily lives, making it an essential dairy in people’s lives For future goals, UHT Fresh Milk

Added Collagen is expected to bring TH True Milk a high-profit margin and enhance

the existing image of this company - a branded dairy provider whose image 1s easily recognizable among consumers Resulting of the modern production chain of TH True Milk, the clean ingredients and high-quality products are outstanding features that

could help this kind of milk to reach these goals

Objectives:

e Still a young industry

Joining the dairy industry has not been as long as other competitors, so TH True Milk has not accumulated enough experience to cope with unexpected fluctuations in the school

® Debt depends on debt

TH True Milk's capital structure has a relatively high debt ratio, which puts the company under significant interest pressure in the current economic context

¢ Production capacity may not meet market demand

Despite having an advanced and modern farm system with 45000 cows, people are concerned that if TH True Milk relies solely on this material, this supply will not

be able to meet the market's demand for milk Therefore, TH True Milk needs to take measures to increase production, expand farm scale, and increase production if it wants to expand its market share

Strategy:

From the ongoing realities at the company, TH True Milk quickly invests in researching and finding solutions for its human resources issues TH True Milk has

made a significant investment to acquire SAP SuccessFactors, which is an integrated

human resource management solution with collaboration tools and social networking

In addition to that, the company continues to enhance its training management system,

along with recruitment performance management and development for the entire workforce, along with HR indicators

The biggest advantage of the SAP toolkit is its speed, user-fnendliness, and

provision of comprehensive information for managers All the company's strategies, solutions, and tools are integrated together in real-time, which has helped TH have the best management system in its field Thanks to this toolkit, the company quickly acquired a highly qualified workforce

The SAP toolkit has enabled the leadership to accurately monitor the real-time labor performance of each employee using smart mobile devices Moreover, the toolkit integrates employee data with salary, rewards, and benefits systems, all of

which are digitized and reported accurately

TH has demonstrated that its human resources strategy, combined with the SAP

toolkit, significantly supports important HR indicators This has optimized talent

management and increased employee satisfaction, thereby enhancing the company's labor productivity

2.3 Corporate strategy

At TH True Milk, the corporate strategy is centered around “growth” This

approach enables the organization to capitalize on economies of scale, strengthen its competitive position within the industry, and offer greater avenues for professional

growth and progression to its employees

In any business, human resources remain a crucial factor for the success of an

organization TH True Milk has recognized this from the start and understands that a

successful business relies not only on strong finances, modern technology, and advanced processes, but also on a strong workforce in terms of both quantity and quality

The HR department of TH True Milk aims to maximize return on investment

by minimizing financial risks while leveraging human capital The HR management

department of TH True Milk bears various responsibilities, including recruitment and selection, leadership development, incentivization and reward, employee

development, and employee relations with others These activities are carried out

effectively and consistently by HR managers, ensuring that quality and performance standards are maintained throughout rapid growth stages The key strategic functions

of human resources are discussed below

The important strategic functions of the human resources department are as follows:

Y Recruitment and Selection

The recruitment and selection process is key to the success of most organizations TH True Milk has invested significantly in the recruitment process with

the primary goal of finding talents who align with the organizational culture The company seeks diligent employees who share the goals and activities of the business

TH True Milk is committed to providing employees with opportunities for career advancement The recruitment process is designed to specifically select candidates

who are a good fit for the organizational culture The selection process is based on

interviews to assess candidates This recruitment and selection model allows the company to search for and recruit suitable talents to serve the organization's development

Y Diverse and Equal Employment Opportunities

TH provides equal employment opportunities for all individuals regardless of gender, race, ethnicity, or disability status The company also actively recruits individuals from diverse backgrounds, enabling it to attract a talented workforce from different parts of the world, contributing to its continuous success and growth

¥ Employment Benefits and Compensation

TH offers competitive packages to attract talented employees The benefits provided are based on the employment status and geographical location of the workforce The company offers various benefits such as insurance coverage, employee stock purchase programs, and investment and savings plans TH also

provides flexible benefits, allowing employees to choose the options that best align with their lifestyle The company employs a well-maintained strategy of economic rewards, regularly granting stock options to employees as a way to acknowledge their contributions This offers them a valuable opportunity to accumulate wealth and achieve personal milestones after retirement Additionally, TH places a strong emphasis on agility, which significantly contributes to its success and employee retention Employees are encouraged to move from one production department to another The company promotes employees taking ownership of activities as they

prepare for greater things ahead This approach cultivates employee commitment and

dedication to the organizational culture, empowering them to enhance their skills

Y Career Opportunities

TH's recruitment policy focuses on the cultural fit of candidates rather than just their skill level and experience TH creates opportunities for employees to enhance

their skills while working for the organization It provides opportunities for training

and development, and employees are encouraged to learn on the job Additionally, the company provides on-site training to allow employees to enhance their skills within the job

TH also attracts employees through internship programs Interns are provided

with practical learning experiences that allow them to develop in their future careers

The internship opportunities attract the most talented students, who are given the chance to develop skills for future employment At the end of the internship period,

outstanding interns are recruited Moreover, even those who are not fortunate enough

to be hired by the company can find immediate employment, thanks to the genuine

learning experience provided by TH Interns from TH are quickly hired by other companies in the industry

On-the-job training provides lower-level employees with opportunities to

interact with experienced and talented labor forces In this case, they can overcome

challenges they may face in the course of their duties

Y Training and Development

Human capital, known as “Vietnamese intelligence’, is one of the six pillars of sustainable development towards success at TH With the belief that “people create