PHÂN TÍCH CHIẾN lược MANG lại THÀNH CÔNG CHO VINAMILK en

During the development process, after many reforms, Vinamilk becomes the Vietnam milk joint stock company in 2003 and gets the current charter capital of 8,340 billion VNĐ.. Figure 1: Sh

PHÂN TÍCH CHIẾN LƯỢC MANG LẠI THÀNH CÔNG CHO VINAMILK

TABLE OF CONTENT Page

II GENERAL INTRODUCTION OF VINAMILK

1 General introduction……… 3

2 Vision, Mission and core value ……… ………4

III ANALYZE THE STRATEGY BRINGING THE SUCCESS FOR VINAMILK 1 External environment……… 7

2 Internal Environment……….8

3 Marketing strategy…….……… ,10

3.1 Strategy of the price ……… ….10

3.2 Strategy of the products……….11

4 Promotion strategy ….……… 15

4.1 Advertisement.………15

4.2 Sale services……… 16

4.3 Public relationship……… 17

IV CONCLUSION……….18

I PREFACE

In the current general economic crisis phase of the world in general and of Vietnam in particular, many domestic enterprises have encountered the difficulties of the product consuming market of the capital mobilization etc Thus, numerous enterprises have fallen into the reduction status of the growth speed, the severe reduction business profit, even many of them going lost in many years result to the bankruptcy of re-structuring Vinashine, Vinaline etc, especially the small and moderated sized enterprises However, some enterprises, based on the proper proposed strategy, have overcome the crisis and got the stable strength In the scope

of this topic, VINAMILK is chosen as one of the enterprises to continue to gain the successes

by the management board’s long term vision and build up the correct development strategy

II GENERAL INTRODUCTION OF VINAMILK

1 General:

Việt Nam Milk Company (Vinamilk) was established in 1976 under the name of Southern Coffee- Milk company at 10 Tân Trào, Tân Phú ward, district 7, HCM city During the development process, after many reforms, Vinamilk becomes the Vietnam milk joint stock company in 2003 and gets the current charter capital of 8,340 billion VNĐ The transaction name in English is VIETNAM DAIRY PRODUCTS JOINT STOCK COMPANY abbreviated

as Vinamilk

The company has been sealed on Ho Chi Minh city Security transaction Floor on 19 January

2006 (transaction code: VNM) Currently, State capital Investment and Trade Corporation (SCIC) has got the ratio of 45,1% of the charter capital of the company

Figure 1: Shareholders’ structure (Source: Website businessman world, http://s.cafef.vn/ ) Vinamilk is the top enterprise of the milk processing industry accounting for 75% milk market shares in Vietnam Vinamilk products include the fresh milk, yoghurt, condensed milk,

powder milk, nutritious powder, ice- cream, kinds of soft drinks With the diversification of the products, Vinamilk has currently got over 200 items of sterilized milks, pasteurized milk and products made from the milk

On 31/12/ 2013, Vinamilk has the network of 266 exclusive distributors and over 224,000 retail points in Vietnam Vinamilk products have been exported to 26 countries like America, France, Canada, Poland, Germany, Middle-East area, , ASEAN etc

After 37 years since establishment and to 31/12/ 2013, Vinamilk has invested 12 plants, 2 enterprises in which Vietnam Children’s powder milk plant has been operated on 22 April

2013 and the whey plant constructed by Tetra Pak Group – Sweden in Binh Duong has been operated on 10 /09/ 2013 Vinamilk is promoting to construct the milk factory in Cambodia

2014

During 17 years, from 1997 to 2013, Vinamilk is consecutively selected by the Vietnamese

consumers association as the high quality Vietnam commodity Vinamilk joins the charitable

activities, social affairs in the fields: Establishing Vietnam peaking milk fund, providing the milk for all the children under the difficulties; setting up Vinamilk scholarship fund “Fostering the young talented”; building up the fund of 1 million of green plants for Vietnam and financing the solar energy lighting system at the island named Côn Đảo

At present, Vinamilk has got the 68th rank of the world biggest top 100 of the milk enterprises The target of Vinamilk in the next stage is to reach 3 billion USD in the year 2017 and reach Top 50 of the world milk enterprise

Figure 2: Annual turnover (Source: website Vinamilk)

2 Vision, mission and core values

2.1 Vision

It becomes the trust symbol No 1 of Vietnam for the nutritious products and healt serving the person’s health

2.2 Mission

Vinamilk commits to bring the community the best nutrition, quality by the respect, love and the high responsibility to the life of the persons and society

2.3 Core value

* Integrity:

Integrity, honest in the behavior and all transactions

* Respect

Respecting ourselves, colleague; the company, partners and make cooperation in respect

* Fairness

Fair to the staffs, customers, suppliers and other related partners

* Compliance

Comply with the law, the regulation of behaviors and the regulations, policies and the rules of the company

* Conduct

Respect the established standards and make action in the ethics

2.4 Business philosophy

Vinamilk desires to become the favorite products in every area, territory Therefore, we trust that the quality and creation are the friends always together with Vinamilk Vinamilk regards the customers as the center and commit to meet any customer’s demand

2.5 The quality policy

Always being satifsfied and bearing the responsibility with the customers by diversifying the products and services assuring the quality, food sanitation safety with the competitive price, respecting the business ethics and complying the specified law

2.6 Business target

The business target of the company is to maximize the value of the shareholders and pursue to the business development strategy based on the following key factors:

 Strengthen, build up and develop a system of the strong brands to meet the best of the demand and the consuming philosophy of the Vietnamese consumers

 Develop Vinamilk trade mark into the most reliable and prestigious, scientific nutrition brand to the Vietnamese people by the strategy of applying the scientific studies of the specific nutrition demand of the Vietnamese people to develop the best product for the Vietnamese consumers

 Invest and expand the business production by the market of the soft drinks which are healthy to the consumers by the key brand of VFesh to meet the fast increasing consuming tendency to the soft drinks from the nature and be good for the person’s health

 Strengthen the system and the distribution quality to reach the market shares at the markets in which Vinamilk has the low market shares, especially at the rural areas and the small urban areas;

 Exploiting the power and prestige of Vinamilk brand as the “ most scientific and reliable nutritious” brand of Vietnam to account for at least 35% of the market shares

of the powder milk market shares within 02 next years

 Concentrate into the key business as the milk production: Focusing on 04 key items including whey, condensed milk, powder and yogurt At the same time, it is to make expansion to the products of the solf-drinks good for the health and to improve the common profit rate of the whole company like fruit juice, soybean milk etc

 Find the investment opportunity outside to ensure the stability and safety of the source

of the raw materials and develop the export market

 Continue to improve the management capacity of the supply system

Based on the long term master business target as mentioned above, Vinamilk sets

up a specific target to the year 2017 of reaching the turnover of 03 billion USD and reach Top 50 of the biggest milk production companies of the world.

III ANALYZING THE STRATEGY IN BRINGING THE SUCCESS FOR VINAMLIK

1 External environment

 The milk branch is a high stable branch and gets less impact by the economic fluctuation (O1)

 The state supporting policy in encouraging the breeding and procession of the dairies (O2)

 The negotiation capacity of the supplier: The big diary companies are benefitable to the raising person in procuring the milk as the raw materials (O3)

 The negotiation capacity of the purchaser: Once the input raw materials increases, it is possible to increase the sale price accepted by the consumer (O4)

 The demand, psychology of the milk product consuming in Vietnam are stably increased Together with the economic strength, the consumer takes care of the health and use of more products , especially the powder milk, whey and yogurt (O5)

 Vietnam milk branch has the potential of the raw material milk for production

 The income per capita of Vietnam is of the low-average level

 The current consuming tendency takes care for the samples, product packages

 The nutritious demand for the children is cared The consuming demand of the fresh milk will be ever increased together with the ratio of the over- population

 In addition to the factors forming the product prices like the milk price of the raw materials, the production cost, packing, profit of the processors, retail distributor, the tax policies, the taste, the psychology attached by the sale price with the product quality, tendency for choosing the most expensive item of the Vietnamese consumer contribute to increasing the price of the milk product

 The input raw material price is increased ever and always fluctuates and hard to predict ( T1)

 The competition between the companies is high: True Milk, Hanoimilk, Abbott, Mead Johnson, Fieslandcampina…(T2) In 2012, the fresh market share of Vinamilk makes

up to 45,5% of the Vietnam market, taking the first rank Fiesland campina takes the 2nd rank with 20,4% of the market shares As for the powder milk, the market share of Abbott takes the first rank with 24%, Vinamilk accounts for 19% taking the 2nd rank; Mead Johnson and Fieslandcampina together account for 14% taking the 3rd rank etc

 The psychology of the foreign product usage of the Vietnamese consumer is still high ( T3)

 There has not been an efficient management raising model The foreign imported material source causes the price of various milk to increase ( T4)

2 Internal environment

 Vinamilk has confirmed the position in the milk branch as the biggest milk company of the whole country accounting for 37% The plant scale is the biggest in the whole country with the total current capacity of 504 thousand tons/ year getting the output of 70% The position of the branch head of the company is supported by the good construction brand (S1)

 The capital source of Vinamilk is very big In addition, the investment plans are actively carried out by Vinamilk even in the capital source Before, Vinamilk almost has not made any loan because it has the profit and efficient re-investment to withdraw the capital fast (S2)

 The product list is diversified and strong The product list is over 200 items and the products from milk (S3)

 The distribution network and sales appear largely It is to develop and control the retail points The figure is the development of the market shares In the whole country, there are approximately 300,000 retail points in the milk trade Vinamilk has accounted for about 160,000 points The plan for 03 next years of Vinamlik is to cover all 300,000 points (S4)

 Make the sustainable relationship with the supplier ensuring the reliable milk source (S5)

 The study and development capacity follow up the market orientation (S6)

 The good management experience is proved by the the sustainable trade activity (S7)

 The big capacity production plant has the equipment and technology meeting the international standards; Vinamilk has currently got a milk production plant in New

Zealand and 10 modern milk production plants in the country scattered from North to South and run 100% of the capacity In order to serve the strategy for the developing acceleration, Vinamilk will inaugurate 02 world top modern milk processing plants in the beginning of the quarter II – 2013 with the total investment capital of about 4,000 billion VND (equivalent to 200 million USD) the first ” Super-plant ” in Binh Duong at the phase 1 for 400 million of milk liters / year, the capacity equivalent to 9 current plants of Vinamilk; the phase 2 will increase the capacity to 800 million of milk liters/ year This plant is totally auto with the robot operation The second plant specializes in producing the children’s powder milk of Dielac 2 in Việt Nam – Singapore industrial park purchased by Vinamilk from F$N with the capacity of 54,000 tons/ year This is the two modern key projects serving the increasing target of Vinamlik inaugurated into the 38th anniversary ceremony of the country liberation day on 30 April 2013

 With such a big production capacity, Vinamilk has made the big production scale to take advantage of the the economics based on the scale Thanks to it, Vinamilk can reduce the product price, the more consistent quality (S8)

 The input raw material sources have not been active Meanwhile, the input raw materials of Vinamilk include: various milk powders of 100% imported raw materials, the fresh milk with 100% of the domestic raw material, sugar mainly applied for the domestic products; the powder milk imported from Europe, New Zealand, America, Australia and China The so much dependence into the imported raw materials has caused the milk production to encounter many difficulties and the business results are affected when the price fluctuation occurs (W1)

 The manpower source is not stable and fluctuates especially for the intermediate management level (W2)

 The results brought from the marketing has not matched the investment Marketing activities are mainly concentrated in South while North has not got the strong investment (W3)

 The competition from the international investors with the high strength Thus, Vinamilk has to continue to widen the business production activities, marketing etc to ensure the market shares (W4)

3 Marketing strategy

The analysis of the internal and external environmental factos shows that the opportunities are (0), risk (T), strength (s), weakness (W) of Vinamilk Based on the analysis

of these weaknesses, it is possible to see the success of the strategies conducted by Vinamilk

3.1 Price strategy

Vinamlik carries out the police of the long term price stabilization Currently, the market price of Vinamilk as maintained is only to get 1/3 of the foreign milk price and lower compared to the domestic production competitor , especially the first competitor Duthch Lady With the current milk price, Vinamilk accepts the profit reduction or makes offset from the trade of many different product currents to share the burden of expenses with the consumers but it is totally not lost

In addition, the company still carries out some policies of the price as follows:

 The more expensive policy to get the better quality

By improving the milk product which is higher to the nutritional value than the current products when the valuable current products are positioned in mind of the consumers Thus, the positioning of the new product is totally convenient – These products symbolize the higher, more private living style like Dielac to Dielac Alpha with the first milk of colostrums

 The policy to keep the price as it is but its quality is higher Vinamilk applies this policy for the sterilized milk and yogurt product currents

 In the condition of keeping the price as it is for the input raw materials to increase Vinamilk still joins the program of the price stabilization for the consumer of the whole country

In order to carry out the strategy of the price stabilization but ensuring the profit for the shareholders, Vinamilk has negotiated the low price level of the milk purchase in the country (compared to the purchasing price of Duthch Lady) At the same time, Vinamilk has developed the plan of its diary farms To the year 2015, it is to try to ensure about 45-50% of

the raw materials as self-supporting portion and in 10 coming years, the replacement will be done relatively Vinamilk attaches importance of the efficient value chain to balance the price stabilization and the profit for the shareholders The further increasing value by the main operation factors has helped the product value to increase but the product price does not fluctuate so much

3.2 The strategy of product

3.2.1 Product diversification:

Vinamilk products are diversified and abundant to the categories with over 200 milk items and the products from the milk: Condensed milk, powder milk, nutritious powder, fresh milk, yogurt, cheese and other products: Soy bean milk, fruit juice, cakes, soluble coffee, bottled drinking water, tea, soluble chocolate However, Vinamilk also attaches importance to the most used products, rejecting the non-beloved products and improving the product quality

Figure 3: Profit structure, 2012 (Source: Website businessman world, http://cafebiz.vn )

 The fresh milk (whey): Accounting for 34.9% of the turnover Starting from the ever

increasing consumption demand of this product, Vinamilk has centered the development into the fresh milk segment when the increasing speed of this group reaches 39.0%/year in the phase 2006-2011

In the year 2010, the sales turnover of this group of the products reached 5,077.6 billion VND accounting for approximately 1/3 turnover Only in 08 years, the contribution of this group over total turnover has remarkably been increased Since 18,9% (2003), it increases 32.2% (2010)