HOẠCH ĐỊNH CHIẾN lược của DOANH NGHIỆP sữa VINAMILK e

HOẠCH ĐỊNH CHIẾN LƯỢC CỦA DOANH NGHIỆP SỮA VINAMILK PART I: INTRODUCTION OF VINAMILK MILK COMPANY Overview of Vinamilk Vinamilk is the abbreviation name of Vietnam Milk Company Vinamilk was founded based on the Decision No.155/2003 QD-BCN dated Oct 2003 of Ministry of Industry regarding transforming State-owned Vietnam Milk Company into Joint-Stock Vietnam Milk company Vinamilk’s business license is 4103001932 issued by Ho Chi Minh city Department of Planning & Investment dated 20/11/2003 Key summary of the company 2.1 Vision – Mission – Core values of Vinamilk Vision: Vinamilk has focused all of its resources to become the leading milk and nutrient food company By applying the strategy of developing product chains with long-term competitive edge, Vinamilk has enjoyed high and sustainable growth Mission: In order to sustain the leading position in the local market as well as maximize benefits of shareholders, Vinamilk has continuously diversified product chains, extended its distribution network Vinamilk aims to become the company with most-wanted products in Vietnam as well as in the region Quality strategy: “Always meet the needs of customers and be responsible with customers by diversifying products & services, guarantee quality and food safety at reasonable prices, applying business ethics and complying with regulations” (Ms Mai Kieu Lien – CEO of Vinamilk” 2.2 Business fields: + Manufacture and trade of cakes & biscuits, soya bean water, milk, beverage, powder milk, nutrition powder and other products from milk + Manufacture and trade of food, technology, equipment and chemicals + Real estate business, real estate leasing and brokerage + Warehouse services, transportation and logistics services + Manufacture and trade of alcohol, beer, beverages, processed food, tea, coffee, instant coffee + Manufacture and trade of package and printing on package + Manufacture and trade of plastic products 2.4 The company’s objectives Vinamilk has continuously developed manufacturing, trade and services in its business fields to maximize profits for shareholders, increased the company’s values and improved the employee’s benefits and fulfilled its tax responsibilities for the government Besides, by connecting processing industry with material input sources, Vinamilk has become more independent of material sources in present and in the future as well PART II: SETTING THE COMPANY’S STRATEGY Analyze external environment 1.1 Macro and global environment World economy in general and Vietnam economy in particular in 2009 has still been under difficulty due to the aftermath of global economic crisis However, Vietnam government has responded with effective strategy to control inflation and crisis and driven the economy to achieve the growth of 5.2% and keep the inflation at 6.88% Together with economic development, Vietnamese’s living standard has gradually increased Before WTO joining, the quote used to be “enough food, enough clothes”, now after Vietnam joining WTO, the quote is “delicious food, beautiful clothes” Vietnamese people’s needs for milk are stable, the average consuming rate is 14 liters per head per annual, which is lower than that of Thailand (23 liters/head/year) and China (25 liters/head/year) Milk and other products processed from milk have been more popular to Vietnamese Before the year of 1990, there were only 0r manufacturers and distributors of milk and the products were mainly condensed milk and imported powder milk Nowadays, there are about 20 companies in the milk industry sharing a potential market The total amount of milk consuming in Vietnam market has dramatically increased at the rate from 15% to 20% per year It is estimated that the total amount of milk consuming will be doubled in 2010 and continue to be doubled in 2020 Moreover, Vietnam has young population (children accounts for 36% of the total population) and the population growth is 1% per year Income per head increases by 6% per year These are potential factors contributing to the sustainable growth of milk industry 1.2 Import-export and tax policies  Import – Export policies The government’s import - export policies over the recent years have not fostered the development of the milk local market The price of powder milk in the world market has times increased and always fluctuated Milk processing companies like Vinamilk and Dutch lady have paid more attention to developing local material resources However, there is no certainty about the plan of increasing the rate of local milk resources in the coming years Big population, high population growth, sustainable economic growth, increased income, improved living standard, health issue receiving more attention, a favorable natural resources, the supporting policy from the government in encouraging milk cow breeding, government policies in health issue and prevention of malnutrition, policies to stimulate Vietnamese to consume more milk to improve body size, intelligence, bones for everyone especially the elder and the children Those campaigns of free milk drinking and free milk providing have contributed to make Vietnam milk market potential The statistic for Vietnam market of a multinational company has pointed out that Vietnam GDP growth rate is 8% per year and the rate of children malnutrition is above 20% The playing field for mike companies lies on the increasing purchasing power of Vietnamese and the government fund for the policy of reducing the rate of children malnutrition to 15% to 20% within the next 10 years These policies to encourage cow breeding have been fostered which serve to increase the milk input resources for local milk companies Besides, Vietnam joining WTO has brought a big opportunity for Vietnamese to penetrate into the world market and gain experience in breeding and management However, being a member of WTO also poses threats for milk industry Vietnam joining WTO will make small milk producing companies lose its competiveness against big group e.g Mead Johnson, Abbott In addition, we haven’t had an effective breeding model The material resources are heavily dependent on importing, which makes the milk prices in Vietnam remarkably high  Tax policy In accordance with the commitment when joining WTO, import tax rate for powder milk in 2012 is 25% However, until now the import tax rate has been reduced lower than the committed rate which makes imported powder milk more competitive than the local one Import tax rate for material is lower than the committed rate Currently, Vietnam imports 70% of the powder milk for manufacturing since the local source is not enough to meet the demand 1.3 The habit of milk drinking of Vietnamese Vietnam is not a country having strength in manufacturing milk; hence the majority of Vietnamese does not have the habit of drinking milk Children in the breast feeding period have digestive ferment in their body (lactose sugar) After the breast feeding period, the bodies gradually lose the ability to generate this ferment The lactose sugar is not digested, which then causes diarrhea after drinking milk Therefore, there are many adults who cannot drink milk However, this symptom does not appear when drinking yogurt Training the children to have the habit of drinking milk regularly, maintaining the generation of digestive ferment will help to reduce the diarrhea symptom In addition, compared the milk price to the price of other products, milk product price is still high In other countries with higher income, milk is essential in every day’s food In developing countries, the government provides the free milk drinking program for kindergarten and primary schools This not only helps to boost the health of the children but also make the children have the habit of drinking milk 1.4 Milk industry analysis After the cases of Melamine contaminated milk scandal in China and neighboring countries, powder milk with lower protein ingredient than displayed on the package continued to be found out in 2009 have made consumers switch to products of reliable brands Vinamilk considers it as a threat but also a rare opportunity for the company to develop and extend its business Milk industry is a stable one and less vulnerable to the fluctuation of economic cycle According to statistic, world economic crisis over the last years does not affect much to the amount of milk consuming in Vietnam The total revenue in 2009 reached VND18.500 billion, increased by 14% compared to that of 2008 There are main product lines: powder milk, water milk, condensed milk and yogurt Hi-end market niche belongs to the foreign milk brand with imported products, which are mainly consumed in big cities Powder milk is the product line which bears the stiffest competition since the profit margin is the highest – 40% The revenue of formula powder milk in 2009 is VND6.590 billion, which accounts for 35.6% of the total revenue of the whole industry Imported products account for 70% of the market share With the water milk, Friesland Campina and Vinamilk dominate the market In 2008, the market share of Friesland is 26,6% and that of Vinamilk is 25.2% Regarding the fresh milk market and pasteurized milk market, Vinamilk accounts for 55,4% of the market share of the nationwide water milk The total revenue of drinking milk makes up of 43% of the total revenue of the milk industry The market for condensed milk shows the signal of saturation The market share of Vinamilk in this respective market is 79% and that of Friesland Campina is 21% The main consuming market for this product is rural areas The revenue of yogurt in 2009 is VND2,000 billion, increasing by 11% compared to that of 2008 Vinamilk accounts for 80% of the market share of the yogurt market in Vietnam Overall, Vinamilk accounts for 35% of the market share of the milk market; Dutch Lady is at the second position with 24% of the market share According to Dr Vu Thi Bach Nga, the Head of the department of protecting customers – Bureau of competition management – Ministry of Commerce & Industry, “the increasing income and the increasing awareness of the benefit of drinking milk have made the demand for milk go up (20% to 25% per year, in which water milk increase from to 10%) The total output of milk products and milk-originated products increase in both quantity and variety The breakdown of milk consuming also changes, in which water milk consuming increased from 11% in 2000 to 35% in 2009” Vinamilk’s internal environment analysis Vinamilk is the leading company in producing milk and other milk- originated products Currently, Vinamilk has more than 240 distributors and more than 140,000 retail shops selling Vinamilk products nationwide Vinamilk’s market share is 39% Vinamilk products are available in almost supermarket chains The leading position in the market has been built and maintained well Since its foundation in 1976, Vinamilk has made it a strong brand in Vietnam market Vinamilk brand has been used since the company was founded and nowadays it has become a popular brand Vinamilk has dominated the market thanks to setting focus on marketing campaign and continuously strive to improve product quality With long history of presence in the market, Vinamilk is proud to say that Vinamilk truly understand the market and the trend of the customer needs, which helps the company to choose what field to choose to focus on For example, with deep understanding and efforts, Vinamilk Kid has become the best seller milk product for children aged from to 12 in 2007 Product portfolio of the company is very diverse meeting the increasing demand of the customers The company has four main brands but the key ones are Vinamilk and Dielac Vfresh is a new and potential brand The product portfolio is as the following Water milk: • Water milk for household: fresh milk and Flex pasteurized milk • Water milk for children: Milk Kid pasteurized milk Yogurt: • Drinking yogurt • Yogurt • Probi fermented yogurt Powder milk: • Powder milk for pregnant and breast-feeding women: Dielac Mama • Powder milk for children: Dielac Alpha Step 1, Dielac Alpha Step 2, Dielac Alpha 123, Dielac Alpha 456 • Powder milk for malnutrition children: Dielac Pedia • Powder milk for adults: Vinamilk Canxi, Dielac Sure, Dielac Diecerna • Eating powder for children: Ridielac Alpha Condensed milk: • Ơng Thọ condensed milk • Phương Nam Star condensed milk Besides, there are other products such as: ice-cream, coffee, fruit extract water Vfresh Technology process: applying manufacturing and packaging technology for all factories, using technologies of European countries e.g German, Italia, Switzerland Vinamilk is the only country in Vietnam having the spraying dehumidifying technologies from Niro group – Denmark – the leading company in industrial drying industry Other companies like Dutch Lady (under Friesland Foods), Nestle and New Zealand milk also use this technology Besides, Vinamilk also use the assembly line provided by Tetra Pak to provide better products to the market Human resources: until now, Vinamilk has more than 4000 employees Business direction and the company’s objectives a Business direction in the future Key products are water milk and powder milk: from 2000 to 2012, Vinamilk aims to account for 35% market share of powder milk and 55.4% of that of the water milk Customers and the target market: Plan to meet the local demand and export nutrient powder milk to the international market The company always strives to diversify the products to satisfy the increasing demand of customers Competitors: The competitors which have been following Vinamilk closely are Dutch Lady The market of powder milk is currently led by imported brands, of which the imported brands account for 70% of the market share Business philosophy: “core value” (honesty, determined, creative, effective, respect, harmony, open-minded) Motto: “four brands make an enterprise” Main resources to accomplish the objectives • Widespread distribution network: 240 distributors and 140.000 retail shops in 64 provinces Experienced salesman force with 1.787 sales man nationwide • Advanced information technology infrastructure helps make the management of the company smooth • Talented and well-experienced management board and skilled engineers & workers • The reputation and brand of the company b Setting long-term objectives The company’s objective is to maximize the benefits of shareholders The company aims to have VND 20,000 billion revenue in 2012 and target to be the top 50 milk companies with highest revenues in the world in 2017 with annual revenue of USD billion SWOT matrix analysis and setting business strategies Vinamilk’s SWOT matrix: Strengths(S) Weaknesses (W) The biggest and leading company in Marketing activities are not strong Vietnam milk market enough to advertise to customers Vinamilk has been a popular brand in the strengths of Vinamilk products Vinamilk is providing products Vietnam for 34 years now which contains 70% to 99% fresh Distribution network has been milk, but the advertisements have extended nationwide and kept not managed to extending, which helps to quickly 10 bring its products to customers Vinamilk has diverse products for different target customers but the High-quality products and gaining packaging does not point out that trust of customers differentiation, Factories are scattered around Material procurement has not Vietnam, which helps to eliminate transportation cost Factories are utilized supplying resources from equipped with advanced farmers technologies, annually upgraded, Vinamilk’s investment in Da Nang guaranteed to provide international factory is not effective standard products Exporting market is still narrow and Long-term relationship with not stable local and international suppliers, which guarantees a supplying resource at reasonable & stable price Currently, Vinamilk is purchasing 60% of the fresh milk made in Vietnam Extensively experienced leaders in milk industry Internal control system is transparent, processes are clear and good Innovation and a positive attitude toward changing have been practiced at Vinamlk, from management team to employees 11 Opportunities (O) Control the price of input fresh Local powder milk market has milk seen stiff competition from Thanks to the policy of imported products developing milk cow of the Competitors continuously launch government, Vinamilk has new products with good centralized material resources, marketing strategies which helps to reduce material Threats (T) Foreign competitors have better importing expenses marketing and market penetration Develop and achieve strong strategies consuming of new products Higher income of Vietnamese, the need for milk products and their care & attention about health and health-care products increase accordingly Proposed strategies: developing strategies Detailed strategies: • Reinforcing, building and developing a system of strong brand to satisfy the needs of Vietnamese consumers • Developing Vinamilk brand into the most trusted nutrient brand by investing in Research & Development about the nutrient need of Vietnamese people 12 • Extending business products in the beverage market by focusing on VFresh brand in an effort to meet the increasing demand for beverage products which are originated from fresh and natural material and healthy for people • Reinforcing distribution network in order to gain more market share at those markets which Vinamilk has not enjoyed big market share e.g rural areas and small cities • Invest in brand building and developing new products, improving the quality of the distribution network for products which require cold storage with the objective to make cold-storage products (yogurt, icecream, pasteurized milk) to become the product line which mainly contribute for the company’s revenue and profit • Exploit the strength and the reputation of Vinamilk as a reputable and trusted nutrient brand of Vietnamese and aims to account for 35% of the market share of the powder milk market in the next years • Develops comprehensively product lines for milk and milk-originated products aiming for a widespread customer base and extending into high-valued products to increase profit margin of the company • Keeps improving the capabilities of the management system, keeps extending and developing distribution network, strengthening and effectively developing material resources to guarantee stable & highquality input milk resources at reasonable prices REFERENCES 13 In-class document http://viettel.com.vn http://vietteltelecom.vn 14 ... After the breast feeding period, the bodies gradually lose the ability to generate this ferment The lactose sugar is not digested, which then causes diarrhea after drinking milk Therefore, there... Vietnamese consumers • Developing Vinamilk brand into the most trusted nutrient brand by investing in Research & Development about the nutrient need of Vietnamese people 12 • Extending business... Vietnamese to consume more milk to improve body size, intelligence, bones for everyone especially the elder and the children Those campaigns of free milk drinking and free milk providing have contributed