Phân tích SWOT công ty Vinamilk

Quản trị doanh nghiệp và kế hoạch kế nhiệm của môn học quản trị chiến lược.

Corporate Governance and Succession Planning

TRUC THANH NGUYEN Columbia Southern University

The general purpose of this essay is to finish the assignment of Unit II basically There are two parts They are the theory of corporate governance and succession planning; and the SWOT analysis model

Firstly, with the part one, the student used the main references that were Strategic management and business policy book to answer about the responsibilities of top management and leaders in relation to corporate governance and strategic planning, the benefits of strategic management, the roles and responsibilities of the board of directors,

an example of a board of directors that did not meet its responsibilities to the company (the student has used case of HP company for this), explain the Sarbanes – Oxley Act and its impact on corporate governance, a discussion of the ways the strategic audit helps corporate Besides, the student used Decision 12/2007 / QD-BTC dated March 13, 2007

of Vietnam government and Spencer Stuart to answer for the responsibilities of the board

of directors too

Finally, with part two, it was about the SWOT analysis model The student used case

of Vinamilk Joint Stock Company to analyze about strengths, weaknesses, opportunities and threats

PART 1 CORPORATE GOVERNANCE AND SUCCESSION PLANNING

1.1 The responsibilities of top management and leaders

- Getting things accomplished through and with others in order to meet the corporate objectives

- Multidimensional and oriented toward the welfare of the total organization

- Vary from firm to firm, and are developed from an analysis of the mission, objectives, strategies, and key activities of the corporation

- Are divided among the members of the top management team

[CITATION Tho18 \p 92 \l 1033 ]

1.1.1 In relation to corporate governance

- Executive leadership

 Directs activities toward the accomplishment of corporate objectives

 Sets the tone for the entire corporation

- Strategic vision

 Description of what the company is capable of becoming [CITATION Tho18 \p 91 \l 1033 ]

1.1.2 In relation to strategic planning

- Strategic planning staff (include: functional managers, key person…)

 Charged with supporting both top management and the business units

in the strategic planning process

 Strategic planning staff responsibilities include:

 Identify and analyze company-wide strategic issues, and suggest corporate strategic alternatives to top management

 Work as facilitators with business units to guide them through the strategic planning process

[CITATION Tho18 \p 94,95 \l 1033 ]

1.2 The benefits of strategic management

- A clearer sense of strategic vision for the firm;

- A sharper focus on what is strategically important;

- A improved understanding of a rapidly changing environment

- Improve satisfaction

- Specify the vision, mission, objectives

- Recognize the strengths, weaknesses, opportinities and threats

- Suggest and select decisions and actions that are appropriate for the company’s conditions

- Improve organization’s performance

- Get more understanding about change in business environment

[CITATION Tho18 \p 38,39 \l 1033 ]

1.3 The responsibilities of the board of directors

Spencer Stuart has written that a board is responsible for: effective leadership;

strategy of the organization; the balance of risk and initiative; succession planning; and sustainability [ CITATION Spe19 \l 1033 ]

However, laws and standards defining the responsibilities of boards of directors vary from country to country In Vietnam, the boards of directors enforce Decision 12/2007 / QD-BTC dated March 13, 2007: (1) The Board is responsible to shareholders for the Company's operations, (2) The Board is responsible for ensuring that the company's activities comply with the provisions of law and the company's Charter, equal treatment for all shareholders and concern for the interests of rights holders, (3) The Board shall formulate regulations on the order and procedures for nomination, candidacy, election, dismissal and dismissal of members of the Boards of Directors and the order and procedures for organizing the Boards of Directors meeting, (4) The Board develops regulations on the order and procedures for selecting, appointing and dismissing senior managers and processes and procedures for coordinating activities between the Board of Directors and the Board of Directors and Supervisory Board, (5) The Board is responsible for developing a mechanism for evaluating activities, rewarding and

disciplining members of the Boards of Directors, members of the Supervisory Board, members of the Boards of Directors and managers, (6) The Board is responsible for making and reporting at the General Meeting of Shareholders in accordance with this Regulation [CITATION Dec19 \p 8,9 \l 1033 ]

1.4 The roles of the board of directors

The role of the board is to carry out three basic tasks: (1) monitor; (2) evaluate and influence; and (3) initiate and determine [CITATION Tho18 \p 77 \l 1033 ]

1.5 An example of a board of directors that did not meet its responsibilities to the company

Disarray with the HP board of directors is an example of a board of directors that did not meet its responsibilities to the company Lewis Platt who was the fourth CEO, was a long time engineering employee of the company He understood the company’s situation But he was slow to recognize the importance of the internet Carly Fiorina was the new CEO She was looked outside the company She was the first woman to head a DOW 30 company But she did not understand the company’s situation [CITATION Tho18 \p 73,74 \l 1033 ]

“HP had a bumpy road with CEOs but part of the issue isn’t the CEO, it’s the Board,” said Forrester principal analyst Frank Gillett [ CITATION Cal19 \l 1033 ] This is a leadership and a perception problem Specific problem is about behaviors: Dismantling and replacing tradition and symbolic practices; reneging on promises; appearing to play unfairly; un-privileging insiders

1.6 The Sarbanes – Oxley Act

1.6.1 Explain the Sarbanes – Oxley Act and its impact on corporate governance

- In response to the many corporate scandals uncovered since 2000, the U.S Congress passed the Sarbanes – Oxley Act in June 2002

- This act was designed to protect shareholders from the excesses and failed oversight that characterized criminal activities at Enron, Tyco, WorldCom, Adelphia Communications,…

- Several key elements of Act were designed to formalize greater board independence and oversight

- The Act requires that all directors serving on the audit committee be independent of the firm and receive no fees other than for services of the director

- In addition, boards may no longer grant loans to corporate officers The act has also established formal procedures for “Whistleblowers” Firms are prohibited from retaliating against anyone reporting wrong doing

- Both the CEO and CFO must certify the corporation’s financial information

- The act bans auditors from providing both external and internal audit services

to the same company

- It requires that a firm identify whether it has a “financial expert” serving on the audit committee who is independent from management

[CITATION Tho18 \p 87 \l 1033 ]

1.6.2 The ways the strategic audit helps corporate

- A strategic audit provides a checklist of questions, by area or issue that enables

a systematic analysis to be made of various corporate functions and activities

- Note that the numbered primary headings in the audit are the same as the numbered blocks in the strategic decision – making process

- Beginning with an evaluation of current performance

- A strategic audit can help determine why a certain area is creating problems for

a corporation and help generate solutions to the problem

- A strategic audit asks many of the critical questions needed for a detailed strategic analysis of any business

[CITATION Tho18 \p 58 \l 1033 ]

PART II SWOT MODEL

The SWOT analysis of Vinamilk Dairy Joint Stock Company is based on the company's latest annual report:

STRENGTHS

 Strong brand

 Effective marketing

 The largest market share in the

country

 Wide distribution network

 Farm system according to

international standards

 Managing working capital well

 Strong financial potential

 Research and development

activities performed well

 Farm operations are equipped with

modern equipment and technology

 High quality human resources

WEAKNESSES

 Dependence on imported raw materials

 Domestic material purchasing stations have not made the most of their position

 Cooperation strategies with farmers have not been implemented

effectively

 Market share of powdered milk has increased but has not competed with foreign milk yet

 The flow of milk from plants has not been focused on production to meet the increasing market demand

of consumers

 Customer sources in rural areas have not been fully exploited

 The communication department is still inadequate in troubleshooting

 After sales are not highly appreciated by customers

 Security information system is not really good

 Inheritance human resources have not been paid attention to

 Policy to encourage and support the

development of dairy farming

 Policy to develop milk processing

industry

 The young population is high, with

an increase in income, which tends

to improve health and height

 Geographical and climate

characteristics are favorable for

cows to grow well

 Modern technology

 Transportation system is expanded

and improved

 Communication system developed

 Barrier to high dairy industry

 Abundant human resources, low

manpower costs

 Measures to prevent diseases for

cows are focused

THREATS

 The world economic situation is more volatile and challenging

 Export markets face many risks

 Growth of the dairy industry reduced heat

 The competition is fierce due to the tax reduction for imported milk

 Psychology like to use customers' foreign goods

 Change in consumer trends

 Domestic raw materials have not high stability

 Distribution system reduced

 Evaluation criteria and loose milk quality inspection process

2.1 Strengths

2.1.1 Strong brand

- Vietnamese consumers trust to use for over 43 years

- On May 22, 2018, Kantar World Panel published its 6th year Brand Footprint report, in which Vinamilk continues to surpass foreign and domestic brand to keep its position as the No 1 brand Vietnam

2.1.2 Marketing

- Programs of advertising, PR, Marketing combined with social work have high efficiency

2.1.3 The largest market share in the country

- The product portfolio is diversified, targeting a wide range of customers: high-end, special treatment, popular lines for adults and young children

- Vinamilk is the largest dairy company in Vietnam with a market share of 46%, which accounts for 48.7% market share in liquid milk market, 85% market share

for condensed milk and yogurt Show that Vinamilk is able to set selling prices in the market

2.1.4 Extensive distribution network, combining many modern and traditional distribution channels:

- 208 distributors and more than 250,000 retail outlets on nationwide

- Available in most supermarkets and convenience stores on nationwide

- Special customers: hospitals, restaurants, hotels, business

- The chain of "Vietnam Dairy Dream" increased to 426 points

- Customers belong to the school with “Sữa học đường” program

2.1.5 Farm system according to international standards

- Imported purebred breeds directly from Australia, USA and New Zealand

- The dairy farm system is designed according to modern technology in the world such as USA, Sweden and Israel

2.1.6 Managing working capital well

- The company maintains a high level of cash capital value to ensure adequate capital demand for planned production activities

- Accounts receivable from customers accounted for 16% of total short-term assets (2018), inventories accounted for 27% of total short-term assets (2018), short-term liabilities accounted for 10.7% of total capital resources (2018)

2.1.7 Strong financial potential

- While many businesses are facing difficulties because of loan interest rates, Vinamilk has a quite safe capital structure, the debt / total assets ratio is 30% (2018 )

2.1.8 Market research and development activities

- Vinamilk's product research and development department actively conducts research and cooperates with market research companies to understand sales trends and activities, consumer feedback and media as well informed about food and beverage issues From there, provide the most suitable products for customers

- The R&D department also focuses on social responsibility, ensuring that all activities go hand in hand with the business philosophy

- Organize nutrition examination and counseling with the School Milk Program

2.1.9 Farm operations are equipped with modern equipment and technology

- There is a system for detection of estrus and management of cow's health

- There is a center for embryo transfer

- There is Silo system that provides automatic concentrate

- Has automatic cooling system and super soft rubber mattress

- There are solar systems

2.1.10 Leadership and management good and experienced :

- Vinamilk has a good, experienced and ambitious leadership team that is proven

by sustainable business profits with a sustainable development strategy

2.2 Weaknesses

2.2.1 Dependence on imported raw materials

- Account for 60% of input materials Therefore, input costs are so strongly affected from the world milk price and exchange rate fluctuations

2.2.2 Domestic material purchasing stations have not made the most of their position

- Some purchasing points must accept payment policies that are not conducive to the company

2.2.3 Cooperation and cooperation strategies with farmers have not been implemented effectively

- The farmers feel inadequate and pressure on media companies

2.2.4 Market share of powdered milk has increased but has not yet competed with foreign milk

- According to BVSC's latest report, the domestic market for powdered milk products accounts for 65%, Vinamilk accounts for 16%

2.2.5 The flow of milk from plants has not been focused on production to meet the increasing market demand of consumers

- Vietnamese consumers tend to replace animal-based foods and beverages to plants Meanwhile, Vinamilk has only a few dairy products from plants such as soybean walnuts