group assignment introduction to management analysis of task environmental factors affecting vinamilk

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<b>FPT UNIVERSITY- CAMPUS CAN THO</b>

<b><small>NAMEROLL NUMBER1. TRAN KIM YEN </small></b> <small>CS171665</small>

<b><small>2. VO TRONG TIN </small></b> <small>CE170201 </small>

<b><small>3. NGUYEN H. THAI DƯƠNG</small></b> <small>CS170575</small>

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<b>I. Introduction</b>

The dairy sector in Vietnam is growing and putting an increasing amountof emphasis on product quality. There are numerous large-scale, globallyrenowned dairy firms emerging. Vinamilk is the biggest corporation inVietnam's dairy industry and one of the top dairy brands on the list thatconsumers rely on. The high level of brand recognition in the home market andthe propensity to grow more in the foreign market are two of this company'sgreatest achievements. Vinamilk has largely taken over the dairy industrydespite fierce rivalry from other brands because of its comprehension ofconsumer needs, the combination of production models, cutting-edgetechnology, and effective business tactics.

What possibilities and obstacles has Vinamilk faced along the way tobecoming one of the companies with significant consumer influence and strongenterprise competition?

The study report that follows analyzes the macro and microenvironmentsthat have an impact on Vinamilk's businesses, laying the groundwork foridentifying the opportunities and difficulties that companies are currentlyfacing. From there, assess, discuss, and offer suggestions for business goals thatmight improve the governance environment. With the intention of clearlyexamining a company's or firm's strengths and weaknesses as well as the impactof several elements on that enterprise or business.

<b>II. Analytics</b>

<b>1. Overview Vinamilk </b>

Vinamilk is a business that manufactures and trades milk and dairyproducts, as well as related machinery and equipment, in Vietnam. It is a JointStock Company called Vietnam Dairy Products. According to data from the

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United Nations Development Program, this business was the fifteenth-largest inVietnam in 2007.

The Ho Chi Minh City Stock Exchange's trade symbol is VNM. Thecompany currently holds a 75% market share in the Vietnamese dairy sector,making it the market leader. In addition to the enormous domestic distributionsystem, which consists of a network of 183 distributors and almost 94,000 salesoutlets covering the entire country, Vinamilk's products are exported to othernations, including the US, France, Canada, Poland, Germany, and the MiddleEast. 64 provinces Asia-Pacific and the East,… .Vinamilk has created eightfactories, one factory, and is currently constructing three more factories with arange of goods. Vinamilk has more than 200 dairy products and pasteurizedmilk products available now, more than 30 years after it was first offered toconsumers.

<b>2. Task environment </b>

<b>-Customers: </b>

Vinamilk's consumption customers are divided into two types: consumers(who are individual customers); agency and branch (who are customers whobuy and trade to make a profit).

Consumers: Consumers now often pay attention to the quality of milk,and the brand, ... then the price, the price must be reasonable with the sellingprice of the distributors to avoid the situation above price deviation. Currently,consumers pay great attention to their health, they always choose reputable andfamous brands of milk, and consumers always choose healthy nutritionalsupplements such as yogurt, organic milk, walnut milk, and nut milk, ...Consumers are faced with many choices because now there are many types of

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milk on the market, typically TH true milk, Dutch Lady, Nestle, Nutifood, Fami,... With other types of milk, customers consider and compare different milklines to choose the most suitable product.

Agency and branch: Agents and distributors large and small, shoppingmalls and supermarkets, etc. have the ability to influence consumer behavior.Domestic dairy companies and agents in foreign countries are often interested indiscounting commissions and profits when selling products. In order to gaintheir trust, their agency customers can influence the purchasing decisions ofconsumers, by recommending and advising them on products.

According to market research firm Kantar Worldpanel, liquid milk iscurrently less competitive than powdered milk, because domestic firms willhave a supply advantage. In this segment, Vinamilk continues to lead,accounting for 55% of the market share. However, with some potential forecastsof the liquid milk market, especially the fresh milk market, it only meets 35%.Meanwhile, the rest depends mainly on imports, causing other businesses tofind ways to penetrate this segment. Vinamilk's major domestic competitors inthis segment include TH True Milk and Nutifood:

<b> TH True Milk: Right from its inception, TH True Milk has set a goal to</b>

account for 50% of the fresh milk market by 2020. This group has withdrawn$1.2 billion as well as a lot of human resources to build the largest dairy farmproject in Asia and the largest dairy processing factory in Southeast Asia.Focusing on new product lines has helped TH true Milk have manydevelopment steps. Only 5 years after the launch of the first product, as of 2015,TH true Milk is the enterprise that owns the largest dairy herd in Vietnam with a

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herd size of up to 45,000 heads. With a farm area of up to 8,100 hectares,concentrated in Nghe An.

<b>Nutifood: Nutifood has been focused on the liquid milk segment with</b>

numerous audacious ideas in addition to concentrating on the powdered milksegment, following consumer trends and upholding the brand's pedestal.Featuring the constructed a raw fresh milk area with over 120,000 dairy cows,able to produce up to 1.2 million liters of milk per day, in collaboration withHoang Anh Gia Lai (HAGL). However, as of right now, the aforementionedcooperation program has not worked out as planned, which has resulted in arelatively small amount of fresh milk sold by Nutifood. This is because thecompany's cow farming area only has a few thousand cows, which is not verymany compared to other businesses.

Additionally, companies like Coca-Cola, Masan, and others will havelittle trouble competing in the dairy industry in the future because to theireconomic potential, expertise, manufacturing size, and established distributionroutes. They might develop into Vinamilk's rivals.

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farms operating on a very large scale to provide enough supply for the domesticand foreign Vietnamese markets. The farm size is 685 hectares with an initialcapital of 1,200 billion VND

About powdered milk: Vinamilk imports materials from leadingcompanies in the world, Fonterra is the supplier of powdered milk to manyfamous companies in the world. As a result, the quality of Vinamilk's powderedmilk is not inferior to other types of milk in the world

<b>-Substitute Product</b>

Dairy products are nutritional products in addition to daily meals, withchildren, teenagers, and middle-aged people, milk has the effect of supportinghealth.

Low switching costs also make it easy for consumers to switch tosubstitutes for Vinamilk's dairy products. Modern life makes consumers moreand more interested in their taste and health and a lot of milk substitutes havealso been introduced such as nut milk, soy milk, cereal drinks, and other dairyproducts. This product in terms of quality and nutrition cannot completelyreplace milk. This factor can have a strong impact on the company as well asthe dairy industry, but this impact is weak because substitute products are hardlyavailable, and the storage time is short.

Currently, on the market, there are many products that compete with dairyproducts such as green tea, coffee, soft drinks, some types of ice cream, etc.However, due to the cultural and health characteristics of dairy products,Vietnamese people, there is no substitute for milk. The characteristics ofsubstitute products are unexpected and unpredictable, so despite being in a highposition, dairy industries still face pressure from substitutes, so they always tryto improve their products suit the tastes of consumers.

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Substitutes limit the industry's profit potential by imposing a ceiling onthe price at which firms can sell. The more attractive the substitute products are,the greater the pressure on the industry, which is reflected in the followingaspects:

+ Switching costs in using the product

+ The trend of changing substitute goods of customers

+ The correlation between the price and the quality of the substituteproduct

<b>-Pressure from customers</b>

Vinamilk customers include consumers and even wholesale, retail,supermarket, distributor... as milk is an essential commodity needed for youngchildren, mothers, elders, patients... pricing factors are not so important toconsumers. What they are more interested in is quality, flavor, and variety withthe other brands. That's why Vinamilk focused on building image productsassociated with positioning a 100% brand of pure fresh milk. Simultaneously,there were new products that served customers with delicious flavors.

In terms of quality, the firm partnered with the National Institute ofNutrition to study nutrient product lines. This strategy helped Vinamilk gain fullconsumer confidence.

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Together, the two parties will fully utilize one another's strengths in retail,wholesale, and manufacturing in an effort to enhance public health and giveVietnamese consumers safer dairy options.

The first two resellers were formally inaugurated by Ho Chi Minh, FPTRetail, and Vinamilk. After a trial period, both parties sought to nationalize thesystem.

Vietnamese consumers will profit more from the collaboration betweenthe two parties if dairy products are safe.

Over 350 FPT Shops and 63 provinces are served by FPT Retail'sF.Studio by FPT. by placing the retail locations of Vinamilk close to those ofFPT. As a result, it greatly increased both sides' earnings.

<b>Vietnam Airlines</b>

Five years of strategic cooperation agreement between Vinamilk andVietnam Airlines (2018-2023). On Vietnam Airlines' flights leaving Vietnam,Vinamilk products will be displayed in a separately designed package with a co-branded image, ensuring quality to support the country's 4-star airline. VietnamAirlines and Vinamilk expect to cooperate closely, as evidenced by the overallvalue of goods that are expected to increase by 10% per year.

With this agreement, Vinamilk provided not only nutrition products toVietnam Airlines and member units, but the two companies also cooperated inareas such as co-branding, marketing campaigns, co-branding, logistics andoperational experience, data storage mechanisms, market consumer data, andbrand evaluation.

<b>3. What opportunities and threats does the task environment offerVinamilk?</b>

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Strategic partner: The two parties take full advantage of each other inmanufacturing, distribution, and retail with the objective of improving publichealth and providing for Vietnamese customers. Cooperation will serve as abasis for consensus on community and community support initiatives to set upthe widening Vietnamese dreams.

The size of the market and its broad customer enables Vinamilk toincrease its market share more efficiently.

The supply of fresh milk raw materials is not dependent on imported rawmaterials from abroad.

Most Vietnamese have a demand for dairy products. Besides nutritionalsupplements, many also use dairy products for beauty or cooking. Thus, this isthe great opportunity and potential for Vinamilk to continue to grow stronger inthe dairy industry.

Threats:

Customers, including wholesale, retail, supermarket and end customerscan put pressure on the business, especially the end customer, there are manydifferent dairy brands with different patterns, flavors, and perfectionism ofinformation.

And in particular, price, consumers are able to consider items in themarket for comparison and be able to buy the vinamilk product. Just one badjob factor can turn customers away from your business.

There's pressure from alternative products

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Vinamilk's customer segment is diverse so milk quality requirementsmust always be considered without an issue.

Sometimes there are entanglements of false information about the productdue to the existence of fake and fake goods

Competitors put competitive pressure on Vinamilk's milk products in themarket because they are of a high financial scale and their ability to advertisethe product also impressively in consumers' minds.

<b>III. Solution1. Suppliers:</b>

- Building a long-term and sustainable development goal for domestic andinternational suppliers remains Vinamilk's main goal to ensure that the supply ofraw materials is not only stable in high quality but also at very competitiveprices

- Expanding aggressively create relationships with big investors to increasecredibility.

<b>2. Customer:</b>

<b>- Product modification. Product differentiation and diversification</b>

<b>- They're lowering prices.</b>

<b>- Empowering yourself by campaigns that come closer to the community</b>

<b>- Develop the Vinamilk brand into a scientifically prestigious and most</b>

reliable nutritional brand.

<b>- Analyzing and capturing your opponents' strengths and weaknesses</b>

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<b>- Enhancing the quality and character of the firm that captures the weakest</b>

vision of the opponent which strikes past

<b>- Strengthening, building and developing a very powerful brand name</b>

system. Especially make competitors partners.

<b>4.Social pressures:</b>

<b>- Stand up for the brand when the product is scared false information.</b>

<b>- Consumers are more secure than they ever need</b>

<b>- Our wisdom is to distinguish the real and the fake, so that the wrong</b>

rumor will end up with earth.

<b>- Systematic enhancement of distribution quality, characteristic of goods.</b>

<b>IV. Conclusion</b>

Above is an analysis of Vinamilk's environmental work impact east.Analysis helps identify the challenges and opportunities that Vinamilk faces. Inthis way, synthesizing and proposing solutions to address the challenges forbusiness to effectively increase its competitiveness in the dairy market at hometimes the international market.

Although Vinamilk faces many challenges in the process of maintainingand developing the business. However, Vinamilk has also created a competitivegovernance environment. That result is clear, with Vinamilk dairy brands beingdeveloped and exerting influence on the domestic and international milkmarket; Brand recognition also increases over time.

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