Analyzing the internal environment of the Nafoods Group

TABLE OF CONTENTS
A. Introduction 4
B. Content 5
Chapter I. Theoretical basis 5
1. Resources 5
2.Capacity 5
3. Core competencies 6
4. Competitive advantage 7
5. Value chain 9
Chapter II: Introduction of Nafoods Group 10
1.Overview of Nafoods Group 10
Objectives, vision and mission 12
Chapter III: Resources and capabilities of the Nafoods group 13
1. Resources of Nafoods Group 13
1.1. Tangible resources 13
1.1.1. Financial resources 13
1.1.2. Physical resources 13
1.1.3. Human resources 14
1.1.4. Organizational resources 14
1.2 Intangible resources 15
1.2.1. Resources for skills 15
1.2.2. Resources for innovation 15
1.2.3. Reputation, position 15
2. The capacity of the Nafoods Group 16
3. Nafoods' core competencies in the market 17
3.1. Valued 17
3.2. Rarely 18
3.3 Hard to imitate and irreplaceable 20
3.4 Can be exploited 20
Chapter IV. Competitive advantages of Nafoods 21
1. Identify the competitive advantage of Nafoods 21

2. Factors affecting competitive advantage of Nafoods 22
2.1. Productivity 22
2.2. Quality 23
2.3. Innovation and creativity 23
2.4. Customer feedback 24
Chapter V Value chain of Nafoods Group 24
1.Logistics input 24
2. Production 25
3. Logistics output 27
4. Marketing and sales 27
5. Services 29
6. Infrastructure 29
7. Technology development 30
8. Human Resource Management 31
9. Procurement Management 33
C. Conclusion 34


A. Introduction
In the period of economic integration and development, competition is an important factor to
decide the success or failure of an enterprise, it is also the driving force for that business to grow.
Therefore, improving their competitiveness is something that businesses must always strive to
achieve. In addition to broadening their horizons to detect each threat and seek opportunities, strategic
managers must evaluate the strengths and weaknesses within their organizations. As with external
opportunities and threats, an awareness of internal strengths and weaknesses has practical implications
for knowing which corporate goals and strategies are viable. Usually, the process of analyzing the
internal environment begins with identifying and evaluating the resources and capabilities of the
business. This is the basis for strategic managers to identify the core competencies of the business.
These core competencies are the foundation of the company's development strategy as well as
building competitive advantages.

Vietnam is a country with dominant agriculture and that is an important area for the development
of our country. Besides, Vietnam is a country located in the tropical monsoon region - favorable
conditions for growing and developing tropical plants. As of 2011, our country has 832,000 ha of fruit
tree land with a variety of fruits with high nutritional quality, annual output of 7-8 million tons, one of
the countries with growing area. Large fruit trees in the area. Taking advantage of this advantage of
Vietnam, Nafoods Group, with more than 20 years of construction and development, has always
strived to accompany Vietnam's agriculture. Nafoods Group is steadfast in its goal of becoming the
leading economic group in Vietnam and Asia in the field of green agricultural value chain production,
competing globally with a professional, sustainable, and closed development strategy. from seeding,
planting, tending, processing, exporting and distributing - retailing to consumers.
To learn more about the above problem, we researched on the topic: "Analyzing the internal
environment of the Nafoods Group" to better understand the resources and capabilities of the
business. From there, we learned about the core competencies of Nafoods Group. Through that core
competencies, we will know the competitive advantages of enterprises in order to capture strengths so
that enterprises can apply development strategies suitable to their capabilities and current situation.


Chapter I. Theoretical basis
1. Resources
1.1. Concept
Resources are the inputs to the production process of a business organization, including factors
such as capital, employee skills, brand monopoly, finance and management capacity. Moreover,
resources also include individual, social and collective factors.
1.2. Classify
Each business will have its own tangible and intangible resources:
• Tangible resources: assets that we can see and quantify, including 4 groups:
- Financial resources: Equity; loans; ability to create corporate internal funds.
- Physical resources: The sophistication of the equipment or the plant location; control over raw
materials.
- Human resources: Training, experience, judgment, intelligence, wisdom, adaptability, industrial

devotion and the loyalty of individual managers and employees .
- Organizational resources: Structure of official reports, plans, inspection and supervision system,
organizational system.
• Intangible resources: invisible and quantifiable resources, divided into 3 groups:
- Skilled resources: Patents, trademarks, copyrights or business know-how.
Resources for innovation: Technical and skilled labor
- Reputation: Reputation with customers: brand, the acceptance of product quality, durability and
reliability; reputation with suppliers.
2.Capacity
2.1. Concept
Capacity demonstrates the ability to use linked resources purposefully in the areas of activity of
the business in order to achieve the desired goal.
2.2. Capacity formation
• Capacity builds on the complex interactions of tangible and intangible resources.
• Capacity based on the development, collection and exchange of information and knowledge through
human resources in the enterprise.
3. Core competencies
3.1. Concepts and meanings.
Concept: Core competencies or core competencies are the foundation for all competitive
strategies. It refers to a company's expertise or skills in key areas that directly deliver high
performance.
Meaning:
Core competencies reflect the company's competitiveness and distinctive qualities.
Core competencies are formed over time through learning, systematically and organized accumulation
of how different resources and capacities are exploited.
3.2. Characteristic standards of core competencies
The core competencies of the business must ensure at the same time 4 standards: valuable, rare,
difficult to imitate and irreplaceable.
Valuable capacity

Valuable competencies are those that can generate profits for a company by taking advantage of
opportunities and neutralizing challenges from the outside environment → Helping a business
neutralize threats as well. like an opportunity from the outside.
Competencies are rare
Rare features are capabilities that very few businesses have.
Competencies that too many businesses own are not considered the competitive advantage of any
business. Instead, valuable but not uncommon resources and capabilities will be the basis for perfect
competition. At that time, competitive advantage is due to the development and exploitation of
capabilities that other businesses do not have.
Competencies are hard to be imitated
Competence that is hard to be imitated is a criterion for judging whether or not competencies are
core competencies? It is an advantage if our competitors cannot imitate or if we do, it will be very
expensive financially, take a lot of time.
Conversely, a competency will not be considered a core competency of an enterprise if it is easy
for competitors to copy.
Capacity cannot be replaced
Irreplaceable capacities are competencies that do not have a resource or other competencies of
equivalent value.
Two valuable resources of the business are assessed as equivalent when each resource itself,
when used separately, still creates the same strategy.
4. Competitive advantage
4.1. Concept
Competitive advantage is what makes a business stand out, while other competitors don't. As a
result, businesses will perform better than other businesses. This is the factor that helps the company
become successful and long-lasting, different from its competitors.
4.2. Types of competitive advantage
According to M. Porter, there are 3 competitive advantages as follows:
Low cost advantage: when businesses provide similar products / services at lower prices than their
competitors

Differentiation advantages: when businesses provide different products / services compared to
competitors
The advantage of centralization: Requires businesses to focus on the process of responding to a
narrow and exclusive competitive segment to gain a local competitive advantage rather than in the
whole market. big.
4.3. Factors that create competitive advantages


Outstanding quality

Competitive advantage
Satisfy

Outstanding performance

customers with

Low cost
Differentiation

Outstanding innovation
Outstanding performance:
Concept: Efficiency is measured by the number of inputs required to produce a unit of product output
= Output / Input.
Impact: Efficiency means higher productivity and lower cost. Outstanding performance helps
businesses gain a competitive edge through reducing cost structures.
How to achieve outstanding performance:
+ Take advantage of economies of scale.
+ Make use of the road to influence learning.
+ Take advantage of the experience curve.

Flexible production systems and planning.
+ Management of input materials.


+ Focus on R&D strategies, human resource management, information system management and
infrastructure management.
Outstanding quality:
Concept: Outstanding product quality is assessed based on two attributes:
High reliability: Performs all functions designed and durable.
Excellent: Perception by the customer is excellent.
- Affect competitive advantage:
+ Products of outstanding quality are capable of differentiating and increasing the value of products
according to customer reviews.
+ Eliminating product defects helps to avoid waste, increases efficiency and thus reduces cost
structure, making profits increase ...
- How to achieve outstanding quality:
+ Increase the quality of outstanding products based on reliability: apply quality standards such as 6
Sigma, TQM, ISO ...
+ Increase the quality of the product based on excellence: Research which product attributes are most
important to the customer; Design Sp comes with a service to highlight the most important
attribute; ...
Outstanding innovation:
Concept: Innovation is the activity of creating a new product or process.
-

Affect:

+ Create products that can satisfy customers better.
+ Improve the quality of existing products.
+ Cost reduction.

- How to innovate:
a) Forms of renewal:
+ Product innovation: create products that customers find more valuable, and increase the profit
margin for the business.
Process innovation:: creating value by minimizing production costs.
b) Innovation process:
+ Build skills in basic and applied research
+ Select project and conduct management.
+ Consolidation of functional areas.
Use product development teams.
+ Develop parallel complementary processes.
Outstanding customer satisfaction.


- Concept: Outstanding customer satisfaction means identifying and satisfying customers' needs better
than competitors.
- How to satisfy customers:
Innovation and outstanding quality are indispensable to be able to
satisfying customers
+ Customers goods products / services according to special needs
of individual or institutional customers
+ Can enhance customer response through response time
response, design method, after-sale service, customer support ...
→ Outstanding customer satisfaction creates differentiation for the products / services of the business,
thereby creating the customer's loyalty to the brand and the business can achieve the optimal price.
5. Value chain
5.1. Concept
A value chain is a set of activities with vertical links to create and add value to customers.
The value chain includes 9 activities related to the value creation strategy for customers,
including:

- 5 main activities: input supply, production process, product distribution, marketing- sales, service.
- 4 support activities: general management, human resource management, technology development,
purchasing activities.
5.2. Value chain model (M. Porter).
M. Porter has identified 5 basic activities in the value chain of enterprises, including: Input
logistics, operation, output logistics, marketing-sales, services; and supporting activities including:
infrastructure, resource management, technology development and procurement.
Content of activities in the value chain of the enterprise:
- Logistics inputs: Raw materials will be received from the suppliers of the business and preserved
and stored until they are put into the production process.
- Production: Raw materials are put into the production exploitation or assembly process. Single
activities can be hotel room service, book / video packaging of online retailers, etc.
- Logistics output: complete production, finished products stored, packed and transported to the
distribution system.
- Marketing and sales: to provide products and services according to the needs of the target customers
of the business through brand positioning, forms of advertising, ...
- Service: to provide after-sale services and auxiliary services to customers through installation,
inquiry service, training, guidance, ...


Infrastructure: often supports the entire value chain, not just any single activity including general
administration, planning, finance, accounting, legislation, ...
- Technology development: including product manufacturing technology, online marketing activities,
production efforts, ... in order to reduce costs, protect and maintain the competitive advantage of
enterprises.
- Human resource management: To ensure that businesses have a sufficiently skilled workforce to
carry out effective value-creating activities.
- Purchasing management: ensuring the payment of raw materials, services and other physical means
to ensure the lowest possible price for the payments to get the highest level of quality available. can
Chapter II: Introduction of Nafoods Group

1.Overview of Nafoods Group
On August 26, 1995, Thanh Vinh Limited Liability Company - the forerunner of Nafoods Group Joint
Stock Company was established.
Twenty-five years of establishment and development, from the desire to be a business in fresh
water, Thanh Vinh Limited Liability Company has grown to become the leading enterprise in Vietnam
in processing and exporting products. frozen fruit juices, fruits and vegetables, dried fruit, nuts and
fresh fruits; widely known in domestic and foreign markets as Nafoods Group Joint Stock Company
(Nafoods).
With the main business field of production, export and distribution of products for fruit juices and
vegetables. Nafoods specializes in fruit juices / NFC, puree, concentrates, IQF and fresh fruit. It is one
of the pioneering groups to develop green and sustainable agricultural value chains, providing the
world with natural, safe agricultural products and providing a good life for everyone.

Since 1998, faced with fierce competition from foreign brands such as Pepsi, Coca Cola, ... the
company has turned to agricultural products with the establishment of a vegetable and fruit processing
factory in Vietnam. Nghe An province (2003).
Experiencing many difficulties with the development of pineapple products, by 2009, the
company developed passion fruit juice. The product has brought great success to the company in both
domestic and export markets. Since then, the company continuously develops product lines and
expands the market scale, invests in production line technology.
On June 29, 2010, the company changed to joint stock company operation model, renamed to
Choa Viet Food Joint Stock Company. After that, the company was renamed to Nafoods Group JSC


With the successes achieved, in 2019, the company successfully called for 8 million USD of
investment capital in preferred shares from IFC - a member of the World Bank and nearly 500,000
USD of capital investment in stocks. Endurance Capital Vietnam I Limited - in order to improve fruit
processing capacity, expand export markets and further develop the new fruit seed business. Besides,
in 2019, Nafoods marked success in the field of passion fruit seed production when it was the first
company in Vietnam to be granted the right to protect 03 varieties of passion fruit under the Nafoods

brand: Dai Nong1, Que Phong 1 and Bach Huong 1.
From the end of 2019, Nafoods officially tested e-commerce retail in the domestic market. After
months of product introduction, actively surveying customer responses, we realize that this is a very
potential market. Nafoods is constantly exploring to diversify products, providing domestic customers
with natural products with high quality and intact nutritional value.
Up to now, Nafoods accounts for more than 80% of concentrated passion fruit juice produced in
Vietnam with a raw material area of nearly 50,000 ha stretching across regions and neighboring
countries. In the international arena, Nafoods Group's passion fruit products have conquered the most
demanding markets such as Europe, America, Japan, Korea, Australia ... providing about 8% of the
concentrated passion fruit output. is the world and the largest supplier of passion fruit concentrate in
Asia.
2.Objective, vision, mission
2.1. Target:
Nafoods Group aims to reach more than 2,300 billion in revenue by 2022; gross profit margin more
than 25%, EBITDA rate (profit before tax, interest and depreciation) more than 15%, profit after tax
rate is more than 10%, ROE (return on equity) more than 25 %; has more than 1,000 quality
customers, with 70% of direct sales; control 50% of raw materials throughout Vietnam for 5 key
fruits; 5 main warehouses and more than 100 technical transfer points / seed selling agents
nationwide.
In addition to the goal of profitability and efficiency, businesses also focus on investing resources in
R&D and application of IoT as the core technology needed in the near future, which is sustainable
agricultural development under variable conditions. Climate and agricultural land are increasingly
narrowed.


Nafoods aims to apply digitalization comprehensively in the coming time
The Group sets sustainable development goals with the development of safe products; ensure the
working environment and the interests of employees; environmental Protection; supporting
community development and local economic development.
2.2. Vision

Nafoods is a pioneer group in developing digital, green and sustainable agricultural value chains.
2.3. Mission
Provide the world with natural, safe agricultural products and bring a good life to everyone,
especially farmers.
Chapter III: The resources and capabilities of the Nafoods corporation
1. Resources of the Nafoods Group
1.1. Tangible resources
1.1.1. Financial resource
Nafoods group has expanded cooperation relationship with a number of financial and investment
partners, such as IFC - a financial institution under the World Bank. Nafoods is the second agricultural
company in Vietnam, invested by IFC in phase 1 with 8 million USD and commits to continue longterm investment.


IFC's investment helps Nafoods expand the number of farmers involved in the company's cold chain
in line with them receiving the widely recognized ISO: 22000 Food Safety System in the world.
In addition, IFC's investment and technical advice has greatly supported Nafoods in its efforts to
increase the value of its products by applying the principles of safe, sustainable agricultural practices
and improve production facilities. That helps Nafoods dominate over prominent competitors such as
AFIEX, Quang Ngai Agro-Food Joint Stock Company, and Nam Dinh Export Agricultural Food
Processing Joint Stock Company when they have no breakthrough in developing and supplying new
products to the market.
1.1.2. Physical resources
- With the goal of expanding the material area including 30% exclusive material areas, 50% from
subsidiaries and branches and the rest from cooperative farmers, the company has cooperated with
local authorities. an important raw material area in Vietnam, expanding Southeast Asian regions and
investing heavily in R&D for seedlings to develop raw materials.
- Regarding agricultural product procurement: Nafoods raw materials are collected from monopolistic
farms and contract manufacturers, with about 70% of raw materials coming from smallholder farmers
or ethnic minorities.
- Regarding the technological process: in order to reduce production costs, including transporting,

minimizing and handling post-harvest damage to fresh produce, the Nafoods Group has developed its
processing factories close to supply of raw materials. Home processing machines in Nghe An and
Long An are convenient from all directions of Vietnam, Laos and Cambodia.
Currently, Nafoods has a system of modern factories in many localities across the country. Typical
examples are Naprod Nghe An Factory, Que Phong seedling factory, Nasoco Long An factory, and
Northwest preliminary processing factory.


1.1.3. Human resources
The company determines that human resources are one of the most important assets, contributing
to creating a competitive advantage for businesses. Therefore, resource development is paid much
attention by Nafoods through organizing training courses on skills, knowledge and especially attitudes
to ensure quantity, quality suitable for work and inheritance.
Previously, Nafoods applied human resource management according to the traditional method,
the salary and bonus system did not clearly reflect the capacity and results, so the group implemented
a new way: innovative application of BSC & KPI; Clear income policy 3P for the whole organization;
Talent management system and inheritance team to develop Nafoods value; internal pricing system
for efficient operation of the profit centers.
With effective human resources, including many domestic and international experts, with a deep
understanding of the agricultural activities of Vietnam and the world, Nafoods has boldly integrated
information technology (IoT - Internet of Things) into the garden management and control system,
building a centralized database, developing agent and customer management applications; step by step
modernize agricultural activities, asymptotic to smart digital agriculture.
1.1.4. Organizational resources
At factories, the Group strictly applies quality management standards, effectively and rationally
controls food hygiene and safety. Especially, Long An factory complex quickly completed the quality
management system shortly after its inauguration, achieving international standards and passing strict
assessment of customers; Rearranging production planning and raw materials, focusing on centralized
control, to ensure fast, efficient communication and control of the entire chain.
As of June 30, 2019, Nafoods Group had 4 subsidiaries: Nafoods Lime Joint Stock Company,

Southern Nafoods Joint Stock Company, International One Member Limited Company, Tay Nguyen
Nafoods Joint Stock Company and linked with 3 companies: JSC Que Phong Pharmaceutical JSC, La
Giang Agriculture Joint Stock Company, Tay Bac Nafoods Joint Stock Company.
1.2 Intangible resources
1.2.1. Resources for skills
In 2013, Nafoods Group invested in additional IQF product production lines, diversified products
and expanded export markets.
In 2019, Nafoods is the first and only enterprise in Vietnam to create 3 varieties of passion fruit
certified and protected by the Ministry of Agriculture and Rural Development, including Nafoods 1,
Que Phong 1 and Bach Huong. first.
1.2.2. Resources for innovation
Nafoods Group focuses on training skills, knowledge, especially attitude. The Group has trained
1,467 people with 5,205 hours of training. In particular, the outstanding training programs such as:


Responsible cultural training and not blame internally; Training on ISO standards, PRP regulations,
hazards affecting product quality at factories, ... The program content is selectively suitable for each
object to help employees increasingly improve their skills. perfecting themselves to meet the
production and business requirements of the company in the 4.0 era
1.2.3. Reputation, position
Nafoods Group is one of the most innovative vegetable growing, processing and exporting
groups in Vietnam, specializing in fruit juices / NFC, pureed, concentrated, IQF and fresh fruit,
produced on-line. advanced and modern technology line with strict quality requirements, ensuring
international standards such as BRC, ISO 22000: 2500, HACCP, SGF ...
In Vietnam, Nafoods Group is a pioneer and leader in the production of concentrated passion fruit
juice. Currently, the Company accounts for more than 80% of the concentrated passion fruit juice
produced in Vietnam with a raw material area of nearly 50,000 ha spread across regions and
neighboring countries.
In the international arena, Nafoods Group's passion fruit products have conquered the most
demanding markets such as Europe, the US, Japan, Korea, Australia ... The company provides about

8% of the output of coarse passion fruit. concentrate in the world and is Asia's largest supplier of
concentrated passion fruit.
As the only unit in Vietnam successfully producing disease-free Dai Nong 1 passion fruit seedlings on
a large scale, Nafoods Group owns a large-scale seed institute with a capacity of 6 million seedlings /
year, Nafoods Group is proud to be The only unit in Vietnam successfully produced disease-resistant
Dai Nong 1 passion fruit seedlings on a large scale, supplying large areas of passion fruit material in
Vietnam, Cambodia and Laos.
Nafoods Group is also honored to receive international certifications such as GLOBAL GAP,
Rainforest Alliance and Fair Trade, being one of 50 enterprises awarded the title "Enterprise for
farmers" by the Ministry of Agriculture and Rural Development.
In 2016 and 2017, Nafoods Group is honored to be one of 100 businesses selected as a sustainable
development enterprise in Vietnam.
2. The capacity of the Nafoods Group
Management capacity:
Towards the goal of sustainable development, the managers of Nafoods Group are constantly learning,
exploring, developing and diversifying the product industry. According to experience from developed
countries, in order to develop safe agricultural production in the value chain, the application of S&T is
an inevitable trend. With that in mind, Nafoods management actively developed hi-tech agriculture,
helping to create a breakthrough to improve productivity, quality and product competitiveness. At the


same time, actively promote the media, come up with effective strategies that are strong enough to
enhance competitiveness.
Putting food safety as the top principle, Nafoods leaders are always strict in management and quality
control operating according to international standards.
The company defines human resources as one of the most important assets, contributing to a
competitive advantage. Therefore, development of employees and employees is always focused
through the organization of skills, knowledge and attitude training. Nafoods has every day perfecting
and building a corporate culture with its own identity, creating a solid and civilized foundation,
committed to ensuring all the interests of employees in the company. Workers are guaranteed all rights

that are regulated by law, respected, developed, recognized and adequately compensated.
Regarding environmental protection, Nafoods Group is always aware that any cultivation and
production activities have impacts on the surrounding environment. Therefore, all solutions are aimed
at the main purposes: effectively using inputs (materials, energy, water sources) and controlling output
factors to minimize the impact on the environment ...
In addition, Nafoods always strives to participate more broadly and deeply in community support
programs and strives to build Nghe An homeland more and more beautiful and civilized. In all its
activities, Nafoods aims to combine the company's development with the general development of the
local and national economy.
Production capacity:
•

Raw material area:
The material area of Nafoods Group stretches from the Northwest, Central provinces, the
Central Highlands provinces, and the Mekong River Delta region. Nafoods GROUP system
has been working with farmers, cooperatives and partners in all three regions of North,

•

Central, and South and some major partners in Laos and Cambodia.
Production facilities:

Fruit and vegetable processing factory for export in Quynh Chau, Quynh Luu, Nghe An. Capacity:
5,000 tons of product / year of concentration line and 2,900 tons of IQF of product / year.
Export vegetable and fruit processing factory at Hoc Thom 1 hamlet, Hoa Khanh Tay commune,
Duc Hoa district, Long An province. Capacity: Concentration Line 7,500 tons / year and IQF Line
5,000 tons / year.
Plant producing passion fruit juice in Pleiku City - Gia Lai. Capacity 150 tons of fluid / month.
Nursery garden with a scale of 5 ha, capacity of 6 million seedlings / year, in Tri Le commune, Que
Phong, Nghe An. And a number of production and processing facilities are outsourced by Nafoods

Group.
Human capacity:


 For employees and employees: At Nafoods, well aware of the importance of employee
development in terms of building an effective and positive working environment, Nafoods
spends a large part of its budget on Annual employee training activities through internal and
external training programs. The Group wants to create the best opportunities and conditions
for its employees to improve their knowledge, develop themselves and contribute to the
development of the company and the community.
 For partners and experts: Nafoods cooperates with many domestic and international experts
with a deep understanding of Vietnam's agricultural activities. Thereby, Nafoods receives
investment and technical advice as well as other supports that play an important role for the
development and create a competitive advantage for businesses.
3. The core competencies of Nafoods in the market
Apply VRINE rules:
3.1. Valuable
During its business operation, Nafoods Group relies on Vietnam's strengths in tropical fruits and
agricultural products to develop its product portfolio. The diversified product portfolio is divided into
four main groups: concentrated juice, juice / NFC / Puree, fresh fruit and seedling (passion fruit).
While the majority of Vietnamese agricultural products are traded on both domestic and export
markets in fresh, unprocessed form and at low prices due to poor quality compared to other countries.
While the prominent competitors of Nafoods such as AFIEX, Lafooco, ... have no breakthroughs in
the development and supply of new products in the market, the investment and IFC's technical
consultant has greatly supported Nafoods in enhancing the value of their products by applying the
principles of safe, sustainable agricultural practices and improving production facilities. . The Group's
increased production capacity will enable more opportunities for local farmers to increase income and
meet the market requirements of high value export markets.
In cooperation and support relationship: The Company expands the cooperation relationship with
a number of financial and investment partners such as IFC - Financial Institution under the World

Bank. In 2019, successfully calling for USD 8 million of investment in preferred shares from IFC,
IFC advised Nafoods to implement a food safety management system for the company's cold supply
chain in accordance with the system certification. Food Safety System ISO: 22000 is widely
recognized in the world. IFC's investment and technical advisory greatly support Nafoods in their
efforts to add value to their products by applying the principles of safe and sustainable agricultural
practices and improving mechanisms. production department, which helps the group to improve
production capacity, expand export markets and develop a new fruit seed business.
In addition, the company cooperates with Chung Hsing University of Taiwan. The Plant Research
and Breeding Institute was established with a capacity of 6 million plant varieties per year, meeting
domestic demand and exporting to Laos and China.


Nafoods Group has exploited Southeast Asia's competitive advantage in growing specific fruits
including passion fruit, banana, dragon fruit, coconut and citrus fruit to develop material areas of
Nafoods Group. in Vietnam, Laos, and Cambodia.
Along with the convenient location of warehouses and factories near local seaports, more than
5000 tons of the company's fruit products (~ 85% of export losses) are shipped to all over the country
each year.
3.2. Rare
Management's mindset: The different mindset made Mr. Nguyen Manh Hung decide to choose
Que Phong, a poor border district of Nghe An province, to build the Nafoods Seed Institute, which
surprised many people when he was far away. lack of conditions. He has a right mindset and vision
when he sees that Nghe An has a suitable climate, clean soil, low virus infection for breeds, and keeps
technological know-how safe. And so far, passion fruit has become the main crop of Que Phong
district when 1,200ha is planned for this plant.
When Nafoods identified key products, the Company found that many fruit and vegetable products
suffered from great competition from China, Thailand and the Philippines. There are only a few
products such as passion fruit, gac, we have a competitive advantage and other products such as
pineapple, lychee, banana ... we do not have a competitive advantage compared to regional
competitors. Furthermore, we are also at a more tax disadvantage. During the development of passion

fruit trees, the company found that this is the most suitable variety in Vietnam, although passion fruit
appeared first in Taiwan, Thailand, Malaysia, China 30 years ago, but in terms of efficiency. then in
Vietnam is still the most effective.
In 2019, Nafoods is the first and only enterprise in Vietnam to create 3 varieties of passion fruit
certified and protected by the Ministry of Agriculture and Rural Development, including Nafoods 1,
Que Phong 1 and Bach Huong 1.
- Passion fruit seedlings:
The seedling product of Dai Nong 1 passion fruit seedling is produced by Nafoods Seed Institute
in a modern greenhouse system with a closed process, strictly controlling the virus and introduced to
the market since 2014. The launch of the product This product creates a closed circle of a vertical
agricultural value chain at Nafoods Group, not only gives Nafoods Group a significant revenue
structure but also acts as a bridge, a vehicle for Nafoods Group to control. and well manage raw
material areas, ensure stable sources of raw materials for production. Therefore, Nafoods Group has
determined that passion fruit seedling will be an important product contributing to its differentiation
and sustainable development.
- IQF frozen fruits and vegetables:


Including fast frozen processed vegetables, tubers and fruits such as: Banana IQF, Red Dragon
fruit IQF, IQF Coconut, IQF Mango, IQF Pineapple, IQF Passion, IQF Carrot, IQF Ginger ... After the
production complex and fruit processing for export in Long An came into operation in April 2018, the
processing output and sales of these products have increased strongly, contributing more and more to
the revenue structure of Nafoods Group, especially IQF Dragon fruit, IQF Mango and IQF Coconut.
In addition, the company has expanded cooperation with a number of financial and investment
partners, such as IFC - a financial institution under the World Bank. Nafoods is the second agricultural
company in Vietnam, invested by IFC in phase 1 with 8 million USD and committed to continue longterm investment.
3.3 Hard to imitate and irreplaceable
The management's leadership ability for the staff has a great influence on Nafoods Group.
Because in the production and processing of these fruits products can be easily replicated, but people
themselves are the only difference that cannot be reproduced, and then from different people create

products. product difference. For that reason, since its inception, Nafoods has attached great
importance to building staff to create a core competency through organizing training on skills,
knowledge and especially attitudes to ensure that the quantity and quality are suitable for the job and
the inheritance. The Group has organized the training of 1467 turns of people, with 5205 hours of
training. This is the hardest resource to imitate and the company has exploited it well to create
differentiated products, successfully developing in areas where there are many big competitors to
complete its value chain.
3.4 Can be exploited
With existing human resources, including many domestic and international experts, with a deep
understanding of the agricultural activities of Vietnam and the world. Nafoods has boldly integrated
information technology (IoP - Internet of Things) into the garden management and control system,
built a centralized database, developed application for management of agents and customers;
Gradually modernize agricultural activities, asymptotic to smart digital agriculture.
The company also started construction of a factory processing passion fruit, vegetables, fruits for
export; received Global GAP certification for Nafoods passion fruit farm in Moc Chau. The passion
fruit, vegetable and fruit processing factory was built in Bo Bun Industrial Park, Dong Sang
Commune, Moc Chau District, Son La Province on an area of 2 hectares, the total investment for 2
phases is 200 billion VND. .
Nafoods has boldly invested in a chain of frozen fruits and vegetables and is now a reputable
frozen fruit and vegetable producer and exporter to demanding markets such as Europe, Australia,
America, and Korea. National, Japanese. Nafoods products all have achieved prestigious international
certificates such as: International Quality Assurance Control System (SGF IRMA); Certificate of


global food safety and quality standards for retail food KOSHER, HALAL, BRC; Food safety
management system ISO 22000: 2005 / HACCP.
Some typical products of Nafoods have a significant impact on the revenue growth of the
business such as:
- Cashew nuts - value added products
These are the newly tested products of Nafoods Group in Q4 2018, including value-added products

such as cashew kernel, dried mango ... exported to Russia, Middle East ... However, these products
have yielded remarkable and promising sales results in a short time period.
-Fresh fruit
At the end of 2017, Nafoods 'fresh fruit passion fruit product was officially exported to Europe,
marking an important step in Nafoods' business strategy. Following that success, in 2018, fresh fruit
products such as dragon fruit, sour lemon, banana, ... were exported to Asian and Middle East
markets, especially China - Market. the world's greatest potential for fresh fruit demand.
Nafoods core competency assessment
At Nafood group, people are the core values of the business, so the company always focuses on
building a team of human resources with enough talent and virtue to participate and dedicate
themselves in the construction career. business development is more and more successful.
The company determines that human resources are one of the most important assets, contributing
to creating a competitive advantage for businesses. Therefore, resource development is really focused
on by Nafoods Group through training of skills, knowledge and especially attitude to ensure quantity,
quality, suitability and inheritance. . The enterprise has organized training courses for 1,467 people,
with 5,205 hours of training. Including outstanding training programs such as Responsible Cultural
Training and do not blame internally; training on ISO standards, PRP regulations, hazards affecting
product quality in factories ... Selective program content, suitable for each object, helps employees
increasingly raise their hands. career, self-improvement to meet the production and business
requirements of the Company in the 4.0 era.
Chapter IV. Competitive advantages of Nafoods
1. Identify the competitive advantage of Nafoods
Nafoods' competitive advantage is differentiation. Enterprises always aim to differentiate, improve
the quality of existing products while creating new products with added value to meet the
requirements and standards of customers.
2. Factors affecting competitive advantage of Nafoods
2.1. Productivity
Nafoods has complete control over its value chain including: raw material areas (seedlings,
cultivation), harvesting (fresh fruit), processing and production, export and distribution.
Nafoods buys agricultural products from monopolistic farms, 70% of the raw materials come

from smallholder farmers or ethnic minority farmers. The company contracts for all agricultural
production that the farmers co-produce, provides them with high-quality seedlings, assisting them


with agricultural techniques and farming options. Therefore, Nafoods can control the input materials
with high quality and reasonable price.
The company is supported by IFC to advise and invest in the implementation of a food safety
management system for the company's cold chain in accordance with the world's certification.
The company currently owns a system of modern factories in many localities such as: Nghe An,
Long An, Tay Bac, Tay Nguyen, Binh Thuan.
Nafoods has applied the BSC & KPI creatively, with an appropriate salary and bonus regime that
has attracted a team of capable workforce.
Nafoods has applied information technology in many different fields: Building a seedling agent
management application platform; successfully built an online meeting room system to make it easier
for employees to communicate; Research to build a CRM platform for Fresh Fruits and Traditional
Business to focus group database items on a single
With existing human resources, including many domestic and international experts, with a deep
understanding of the agricultural activities of Vietnam and the world. Nafoods has boldly integrated
information technology (IoT - Internet of Things) into the garden management and control system,
built a centralized database, developed the application of agent and customer management; step by
step modernize agricultural activities, asymptotic to smart digital agriculture.
The company has increased productivity. When there are many factories in many places, it facilitates
the quick processing of agricultural production as well as the building of many agents will facilitate
the distribution. Application of science and technology, information technology helps the company to
be more controlled. Reasonable remuneration is also the factor affecting the productivity increase
because employees feel more secure, they will devote themselves to the company, creating more
value.
2.2. Quality
With the control of input quality, Nafoods products are more assured of quality. Processing plants
are located in many provinces across the country to minimize post-harvest damage to fresh produce as

the agricultural products will go directly to factories for processing after harvest.
The company has exported to difficult markets such as the US, Japan, Australia, France; there are
also Korean and Chinese. This shows that the product quality of Nafoods is increasingly recognized
by foreign partners.
In factories, the Group strictly applies quality management standards, effectively and rationally
controls food hygiene and safety. In particular, Long An factory complex quickly completed the
quality management system shortly after its inauguration, achieved international standards and passed
stringent assessments of customers.
The quality of the production line as well as the product has received the confirmation of
organizations around the world, and can be exported to difficult markets to help customers put more
trust in the business.
2.3. Innovation and creativity
In the face of pressing for a way out for businesses, responsibility once again rests on the
shoulders of those who are always dedicated to the survival of Nafoods. "Change or die" is a constant
question in the mind of the collective leaders of the company. The first thing is to accept the pain to
change the pineapple tree as the key material of the turning point in the past with the passion tree.
Starting from here, the story of Nafoods associated with a passion fruit tree has extended a new
chapter.
In 2007, Nafoods contributed to the development of the area of passion fruit in the Central
Highlands. From here, the first batch of Nafoods branded passion fruit concentrate products were
officially present in the EU market. Continuously in the following years, Nafoods has always been the
leading enterprise in purchasing passion fruit output in the Central Highlands, contributing to


stabilizing agricultural output for farmers. In addition to passion fruit, Gac is also a basic choice of
Nafoods to produce Gac Puree for export.
While the products of domestic and foreign competitors are mainly fresh unprocessed fruits,
Nafoods finds its own direction, bringing new products: concentrated passion fruit. (In the early years
this product made up 60% of the company's revenue).
After many experiences, Nafoods is deeply aware that, in order to be determined to pursue and

develop sustainably with the agro-processing industry, the only option is to change the governance
model, which is tissue. globally competitive agricultural value chains. With this core value, Nafoods
is consistent with the target strategy, vision and mission set out. Apply high technology in agricultural
production and manufacturing and processing. According to this model, in recent years, Nafoods has
transformed strongly in both quantity and quality. Up to now, after ups and downs, Nafoods has risen
to become the No. 1 enterprise in Vietnam and Asia in terms of exporting fruit juice products and
natural nutritious drinks. With the model linking four houses: Farmer, Entrepreneur, State and
Scientist, Nafoods was completely active in material areas. Up to now, Nafoods has planned over 900
hectares of high quality passion fruit in Que Phong, 250 hectares Gac in two districts Anh Son and
Quynh Luu (Nghe An), 300 hectares in the southwestern provinces ... Not stopping In some
monotonous products, Nafoods advocates to diversify products. The products with Nafoods brand
name, in addition to concentrated passion fruit juice, concentrated pineapple juice, nutritious drinks ...
there is also a product of Puree Gac (pure Gac oil) and is proud to be the exporter. Gac oil import is
the largest in the world and is the first enterprise in Vietnam to be active in the variety of high yield
disease-free passion fruit varieties.
2.4. Customer feedback
The company always tries to improve the quality of seedlings, selling seeds directly to the
people. Not only selling seedlings, the company also provides fertilizer for agricultural materials to
the purchase of agricultural products when harvested. This is something few companies can do
Chapter V. The value chain of the Nafoods Group
Currently, Nafoods Group has built and developed a solid and efficient ecosystem in the market.
This helps the company form a strong value chain.
1.Logistics input
Regarding agricultural product procurement, Nafoods raw materials are collected from
monopolistic farms and contract manufacturers, with about 70% of raw materials coming from
smallholder farmers or ethnic minorities. The company drafted cooperation contracts with clear
commitments Nafoods purchased all the fruits annually that the cooperative farmers produce.
With the goal of expanding the raw material area, including 30% exclusive material areas, 50%
from subsidiaries and branches, the rest from farmers cooperating with the company who has
cooperated with local authorities in the raw material areas. important materials in Vietnam, expanding

in Southeast Asia and investing heavily in R&D for seedlings to develop raw material areas.
In terms of seedling products, in collaboration with Chung Hsing University of Taiwan, the
Institute for Plant Research and Breeding was established with a capacity of 6 million seedlings per
year. Nafoods owns a high-tech passion fruit seed institute with a greenhouse area of 6 hectares, a
capacity of 6 - 6.5 million seedlings that are free of diseases / year, supplying seeds for a large area of
passion fruit material across the country and exported to your country Laos. Currently, Nafoods Group
has cooperated with local authorities to plant 1500 hectares of passion fruit in Nghe An, 3000 hectares
in Gia Lai and 5000 hectares in Son La.
2. Manufacturing
In order to reduce production costs including transporting, minimizing and handling post-harvest
damage to fresh produce, the Nafoods Group has developed its processing plants close to the raw
material supply. Two factories in Nghe An and Long An are convenient from all directions of


Vietnam, Laos and Cambodia. Therefore, the raw materials are processed shortly after harvest. For
raw material areas, they are invested with a modern irrigation system, synchronous farming
techniques to bring clean fruit and vegetables with quality standards.
Currently, Nafoods has a system of modern factories in many localities across the country. With
the modern European technological line of machinery and equipment, clean fruits, vegetables and
fruits are quickly transported to the factory, classified and put into the production line.
The factory chain of Nafoods Group is evenly distributed throughout Vietnam, including: Nghe
An province, Long An province, Son La province, Gia Lai province and Binh Thuan province. Total
capacity of more than 20,000 tons of products per year, meeting the needs of domestic consumption
and export, creating good jobs for thousands of people across the province.
Naprod Nghe An factory, in Quynh Luu district: includes 1 concentrated juice production line and 1
IQF production line, with an area of 5ha, capacity of 5,000 tons of concentrated juice / year and 2,900
tons of production. IQF products / year.
- Que Phong seedling factory, in Que Phong district, in association with experts from Chung Hsing
University - Taiwan has a greenhouse area of 6ha, capacity of 6 million seedlings / year.

- Nasoco Long An factory in Duc Hoa district includes 1 concentrated juice production line and 2 IQF
production lines with an area of 6.5 hectares, capacity of 7,000 tons of concentrated juice / year, 5,000
tons of products. IQF products / year, consuming 100,000 tons of fruit materials / year.

- Tay Bac Packaging Factory prepares, packaging and preserves fruit for export in Moc Chau,
including a sorting, freezing and preservation system covering an area of 2 hectares (to be expanded
to 4 hectares by 2020). , consuming 50,000 tons of fruit material / year.


- The Central Highlands high-tech complex in Gia Lai covers an area of 13 hectares, including a
research center for high-tech plant breeding and a production factory to classify, separate, pack and
preserve fruit for export.

- The Nafoods Binh Thuan Fruit Packaging Complex in Binh Thuan Industrial Park includes a
packaging factory and a cold storage system with an area of 2 hectares, consuming 60,000 tons of
fruit materials / year.

At the factories, the Group strictly applies quality management standards, effectively and rationally
controls food hygiene and safety. Especially, Long An factory complex quickly completed the quality
management system shortly after its inauguration, achieved international standards and passed
stringent assessments of customers; Rearranging production planning and raw material supply,
focusing on centralized control at the corporate level, to ensure fast, efficient communication and full
chain control.
3. Logistics output


Nafoods Group is one of the most innovative vegetable growing, processing and exporting
groups in Vietnam, specializing in fruit juice / NFC, puree, concentrate, IQF and fresh fruit. The
company supplies more than 13,300 tons of fresh and processed fruit annually from farmers in
different regions in Vietnam including the Central Highlands, Northwest and North Central Coast

regions. The company's products are distributed all over the world especially in Europe, the United
States, Oceania, the Middle East, Japan and Korea. The US and Europe markets, from accounting for
nearly two thirds of sales, have dropped to just one third of sales, replaced by new markets such as
China, the Middle East and Russia.
Nafoods distributes its products to domestic and international markets through both direct and
indirect channels. In which, air transportation is only applied for orders from fastidious markets such
as the US, Australia, France, Korea, Japan and Shanghai (China) due to high air transportation costs. .
4. Marketing and sales
With the aim of expanding markets, customers, and diversifying product lines through marketing
activities of the company, have obtained many positive results. Products after being manufactured,
packed, quickly put into the storage system to preserve and load onto the Container to be transported
to the seaport for export.
Currently, Nafoods has exported products to more than 50 countries around the world, especially
the most difficult markets such as Europe, America, Australia, Japan, ...
- For traditional products such as frozen fruit juices and vegetables: the company continues to well
maintain available markets such as Europe, America, Japan, Korea, ... Diversify its products. of
Nafoods in these markets and continued to attack China, the Middle East and Eastern Europe.
- For seedling products: The Company has continued to improve the quality of existing seedlings,
promoting the sale of seeds directly to people. Continue to increase and promote the sale of seeds to
the Northwest, Central, Central Highlands and Laos markets. Combining with agricultural extension
programs from supplying seeds, fertilizers, agricultural materials to product consumption helps the
company have more revenue from commercial activities.
- For fresh fruit products: In 2018, Nafoods Group, in addition to promoting fresh fruit and passion
products in the European market, also exploited and developed other products with high added value
such as fresh dragon fruit. , sour lemon, banana, purple sweet potato to the Asian, Middle East
markets. In which, especially the Chinese market - the most potential market for fresh fruit demand.
Although only starting to focus on development since October 2018, remarkable results have been
obtained.
- For other new categories: The Company has successfully expanded value-added products such as
cashew kernel, dried mango, ... exported to Russia, Iraq ... similar to fresh fruit products. Only

focusing on development since October 2018 but the results are very positive.
- In the last months of 2018, the company's market expansion has achieved a lot of success with the
continuous successful signing of agreements, memorizing cooperation on agricultural exports with
partners. big products coming from China, Russia, Australia, India,… will open up a huge export
market for the company in the coming years.


Along with that, the group has increased more trade promotion activities by appearing more at
international agricultural trade fairs such as Seoul Food International Food Exhibition, World Trade
Moscow, participating delegation of Ministry of Agriculture and Rural Development in the
Netherlands, International Fair for Food and Beverage (Anuga), Sial Paris Food and Beverage Fair, ...
as well as organizing social programs such as charity and gratitude. customers, stimulating consumer
demand.
Constantly researching and searching for ways to innovate, optimize production and business and
integrate with the world economy, Nafoods believes that changing arguments is the most important
factor. Nafoods focuses on digital solutions and information technology application in all stages to
optimize resources, improve labor productivity and product quality. In particular, the e-commerce
channel will be promoted, in addition to the traditional sales channels up to now. And so, from the end
of 2019, Nafoods officially tested e-commerce retail in the domestic market.
5. Service
During the procurement process of agricultural products, the company drafted cooperation
contracts with clear commitments that the Nafoods Group buys all the fruits annually that cooperative
farmers produce. This ensures farmers benefit in stable quantity and competitive prices, provides
farmers with high quality seedlings that help farmers have better farming options, as well as assists
farmers through talent. major and agricultural engineering.
Regarding research and development with the aim to differentiate, improve the quality of
existing products while creating new products with added value, meeting the requirements and
standards of customers, the company always focus on R&D activities.
Regarding governance: The Group has thoroughly applied the KPI / BSC system to manage
production and business activities and at the same time administer action plans to bring about the

highest efficiency. Prominent ones can be mentioned as the successful construction of an online
collaboration system, which enhances the need for group exchange in the coordination between
remote geographic areas.
6. Infrastructure
For management, IT Application Group - KPI / BSC system manages production and business
activities and action plans to bring about the highest efficiency. Build a seedling / dealer management
application platform. Successfully built the online meeting room system, raising the need for team
exchange in coordination between remote geographical areas (especially Sales and Marketing);
Working with partners, researching to build application platforms, CRM software for Fresh Fruits and
traditional business to Concentrate database items in individuals; Deploying upgrading machine
infrastructure and dividing data in individuals; Deploying and upgrading server infrastructure, in order
to meet infrastructure requirements when deploying and putting into use synchronous enterprise
administration software; Implement an overall monitoring system, aimed at overall monitoring, to
aimlessly monitor key areas of the corporation.
At the factories, the Group strictly applies quality management standards to effectively and rationally
control food hygiene and safety. In particular, Long An factory complex quickly completed the quality
management system shortly after its inauguration, achieved international standards and passed
rigorous customer assessments; Rearranging the Production Planning and Raw Materials Division,


focusing on centralized control at the corporate level, to ensure fast, efficient communication and full
chain control.
Nafoods integrates information technology (IoP - Internet of Things) into the garden management and
control system, builds a centralized database, develops agent and customer management applications;
To step by step modernize agriculture, asymptotic to digital agriculture.
7. Technology development
To minimize production costs, including transporting, minimizing and handling post-harvest damage
to fresh produce. The Nafoods Group has developed its processing plants close to the supply of raw
materials. Two processing factories in Nghe An and Long An are convenient from all directions of
Vietnam, Cambodia and Laos. Hence the raw fruit material is processed shortly after being harvested.

Currently, Nafoods has a system of modern factories in many localities across the country such as
Naprod Nghe An Factory, Que Phong Seedling Factory, Nasoco Long An Factory, …

Research and development, with the aim to differentiate, improve the quality of existing products
while creating new products with added value, meeting the requirements and standards of customers,
operation Research and development are always interested and focused by the Company. And there
are results such as:
+ Select and create 3 new varieties of passion fruit suitable for processing and eating needs, higher
yield and better disease resistance. By 2019, Nafoods has been certified and granted protection rights
by the Ministry of Agriculture and Rural Development for these 3 passion fruit varieties, including
Nafoods 1, Que Phong 1 and Bach Huong 1.
+ Implementing research and perfecting technology for preserving passion fruit by means of gas
modulation (MAP), currently waiting for appraisal by the Ministry of Agriculture and Rural
Development.