BỘ GIÁO DỤC VÀ ĐÀO TẠO

__________________

TITLE
STRATEGIC MANAGEMENT
Topic:
Development and Strategic Management for Vinamilk's Vision 2024–2026
Instructor :
Student :
Class :

Ha Noi, 01/2024
 MỤC LỤC

INTRODUCTION.............................................................................................................1

CHAPTER 1: INTRODUCTION TO VINAMILK COMPANY.................................2

1.1 Overview...............................................................................................................2

1.2 Formation History................................................................................................2

1.3 Vision, Mission, and Core Values.......................................................................3

1.4 Product Categories...............................................................................................3

CHAPTER 2: BUSINESS ENVIRONMENT ANALYSIS............................................4

2.1 External Environment............................................................................................4

2.2.1 Political and Legal Factors................................................................................4

2.2.2 Economic Factors...............................................................................................5

2.2.3 Technological Factors........................................................................................6

2.2.4 Socio-Cultural Factors.......................................................................................6

2.2.5 Environmental Factors.......................................................................................7

2.2 External Factor Evaluation (EFE).........................................................................7

2.4 Internal Business Environment.............................................................................9

2.4.1 Customers...........................................................................................................9

2.4.2 Suppliers...........................................................................................................10

2.2.3 Competitors......................................................................................................12

2.4.4 Substitute Products...........................................................................................13

2.4.5 Potential Competitors.......................................................................................13

2.5 Internal Factors Matrix for Vinamilk (IFME)...................................................14

CHAPTER 3: SWOT ANALYSIS AND VALUE CHAIN OF VINAMILK

COMPANY......................................................................................................................16

3.1 SWOT Analysis......................................................................................................16

 3.2 Value Chain of the Company...............................................................................18

CHAPTER 4: STRATEGIC SOLUTIONS PROPOSAL FOR VINAMILK

POWDERED MILK SEGMENT PHASE 2024 – 2026...............................................25

4.1 Business Canvas Model for Vinamilk..............................................................25

4.2 SWOT Strategic Solutions.................................................................................27

4.2.1 SO Strategies.................................................................................................27

4.2.2 ST Strategies..................................................................................................29

4.2.3 WO Strategies...................................................................................................29

4.2.4 WT Strategies....................................................................................................30

4.2.5 Evaluation.........................................................................................................30

4.2.6 Vinamilk QSPM matrix table............................................................................32

CHAPTER 5: STRATEGIC PLAN AND ACTION FOR POWDERED MILK

PRODUCTS 2024 - 2026 VIETNAM MARKET..........................................................35

SUMMARY......................................................................................................................39

REFERENCES................................................................................................................40
 INTRODUCTION
Strategic management plays a pivotal role in guiding organizations towards
achieving their long-term objectives. This paper delves into the development and
strategic management initiatives undertaken by Vinamilk to realize its Vision 2024–2026.
As a leading dairy company in Vietnam, Vinamilk has established itself as a key player
in the industry. However, the ever-evolving business landscape necessitates a proactive
approach to ensure sustained growth and competitiveness.
Vinamilk's Vision 2024–2026 serves as a guiding beacon, outlining the
organization's aspirations and desired outcomes over the specified period. Effective
strategic management is imperative for translating this vision into actionable plans and
tangible results. This paper will critically examine the strategic development processes
adopted by Vinamilk, evaluating their alignment with industry trends, market dynamics,
and internal capabilities.
Key areas of focus include an analysis of Vinamilk's strategic planning
methodologies, encompassing the formulation, implementation, and evaluation phases.
Attention will be given to how the organization identifies and responds to external
opportunities and threats, leveraging its strengths and addressing weaknesses.
Additionally, an exploration of Vinamilk's approach to innovation and technology
adoption will shed light on its commitment to staying at the forefront of industry
advancements.
Understanding the competitive landscape is integral to strategic management.
Therefore, this paper will assess Vinamilk's strategies for market positioning,
differentiation, and sustainable competitive advantage. An examination of the company's
risk management practices will further underscore its ability to navigate uncertainties and
unforeseen challenges.
By undertaking a comprehensive analysis, this paper aims to provide insights into
Vinamilk's strategic management framework and its implications for achieving the
Vision 2024–2026. As organizations continue to operate in an environment marked by
rapid changes and complexities, the study of Vinamilk's strategic journey serves as a
valuable case study for aspiring managers and industry stakeholders alike.

1
CHAPTER 1: INTRODUCTION TO VINAMILK COMPANY
1.1 Overview
Vinamilk, an abbreviation for Vietnam Dairy Products Joint Stock Company (VNM),
is a leading dairy manufacturer and distributor in Vietnam. Operating in the dairy
industry, Vinamilk engages in the production of various dairy products and related
machinery. According to the United Nations Development Program statistics, Vinamilk
held the 15th position among large companies in Vietnam in 2007. Its stock is traded on
the Ho Chi Minh City Stock Exchange under the code VNM. As a key player in the
Vietnamese dairy processing industry, Vinamilk has established its presence in all 63
provinces and expanded its reach globally, exporting products to countries such as the
United States, France, Canada, Poland, Germany, the Middle East, and Southeast Asia.
With over 30 years in the market, Vinamilk boasts eight existing factories, two
subsidiaries, and ongoing construction of three new facilities, contributing to overseas
investments. With a diverse product range exceeding 200 items made from milk,
Vinamilk caters to various consumer needs.
1.2 Formation History
1976-1986 (Socialist Republic Era):
In 1976, initially named the Southern Milk and Coffee Company under the Food
General Department, Vinamilk emerged following the nationalization of three private
enterprises in South Vietnam: Thong Nhat (owned by a Chinese company), Truong Tho
(Friesland), and Dielac (Nestle). In 1982, the company was transferred to the Ministry of
Food Industry and renamed the United Milk-Coffee-Candy Factory I, incorporating two
additional plants: Lubico Confectionery Factory and Bich Chi Nutrition Powder Factory.
1986-2003 (Renovation Era):
In March 1992, the United Milk-Coffee-Candy Factory I officially became Vinamilk,
under the Ministry of Light Industry, specializing in milk and dairy product processing.
In 1994, Vinamilk expanded its presence by establishing a milk factory in Hanoi,
increasing the total number of plants to four. Noteworthy partnerships, such as the joint
venture with Quy Nhon Refrigeration Corporation, enabled Vinamilk's successful entry
into the Central Vietnam market. The year 2000 witnessed the establishment of the Can
Tho Milk Factory and the Logistics Plant in Ho Chi Minh City, further enhancing
consumer accessibility.
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 2003-Present (Equitization Era):
In 2003, Vinamilk transformed into a Joint Stock Company in November, with its
stock listed on the Ho Chi Minh City Stock Exchange. In 2004, the acquisition of Saigon
Milk Joint Stock Company expanded Vinamilk's market share. Notable ventures include
the purchase of remaining shares in the joint venture with SABmiller Asia B.V, leading
to the formation of SABMiller Vietnam Co., Ltd., and the introduction of the Zorok
brand in 2007. Vinamilk's strategic initiatives also extended to health services with the
opening of the An Khang Clinic in Ho Chi Minh City in 2006.
1.3 Vision, Mission, and Core Values
- Vision: "To become the foremost symbol of trust in Vietnam for nutritional
and health products serving humanity."
- Mission: "Vinamilk commits to delivering the best, highest-quality nutrition to
the community with utmost respect, love, and a profound sense of
responsibility towards human life and society."
- Core Values:
 Integrity: Upholding honesty and truthfulness in behavior and all transactions.
 Respect: Valuing oneself, colleagues, the company, and partners; fostering
collaboration within an atmosphere of mutual respect.
 Fairness: Ensuring fairness with employees, customers, suppliers, and other
relevant parties.
 Compliance: Adhering to laws, codes of conduct, company policies, and
regulations.
 Ethics: Respecting established standards and acting ethically in all endeavors.
1.4 Product Categories
Fresh Milk:
- Pasteurized milk (with sugar, without sugar)
- UHT milk (with sugar, without sugar, strawberry, chocolate)
- High-calcium Flex milk (with sugar, without sugar, low sugar)
- Milkplus fresh milk (with sugar, without sugar, strawberry, chocolate)
Yogurt:
- Eating yogurt (with sugar, without sugar, fruit, strawberry, orange, probiotic,
aloe vera, plus calcium)

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 - SUSU yogurt (with sugar, orange, fruit, strawberry)
- Drinking yogurt (strawberry, orange)
- PROBI live yogurt.
Condensed Milk:
- Ông Thọ brand: Quick open white label, red label twist cap, green label twist
cap, 30g blister pack.
- Southern Star brand: Red label, orange, green label in can, green label in paper
box.
- Milk Powder, Nutritional Powder:
- Dielac milk powder for children, mothers, and the elderly.
- Weight loss milk powder.
- Ready-to-eat nutritional powder: Ridielac (Rice milk, chicken and vegetable,
beef and vegetable, pork sticky rice, pork and carrot).
Ice Cream:
- Chocolate, Strawberry, Taro, Vanilla, Durian, Mung Bean.
Cheese:
- Con Bò Cười brand.
Beverages:
- Soy milk (VFresh brand, with sugar, low sugar, without sugar).
- Refreshing drinks (VFresh brand): Peach juice, Orange juice (with sugar,
without sugar), Apple juice, Tomato juice, Artichoke juice, Lemon tea, Bottled
ICY drinks.
Discontinued Products:
- Instant coffee CAFE MOMENT.
- Ground coffee CAFE MOMENT.
- Zoro beer.

CHAPTER 2: BUSINESS ENVIRONMENT ANALYSIS

2.1 External Environment
2.2.1 Political and Legal Factors
Vietnam is considered to have a relatively stable political environment. The dairy
consumption market is stable, and fixed assets are secure from war, protests, with a stable

4
labor force. The production conditions are favorable, positively impacting productivity
and product quality. State support policies, such as encouraging dairy farming and
processing, provide a substantial supply of raw materials for the industry. Government
initiatives promoting health, combating malnutrition, and encouraging milk consumption
contribute to a potential market for the Vietnamese dairy sector.
The stable and growing milk consumption market, combined with favorable legal
conditions and state policies, minimizes production and investment costs. Regulation
changes, like the Circular No. 39/2009/TT-BTC adjusting milk import taxes, present
challenges and opportunities. With increased import taxes, foreign companies face
barriers in the Vietnamese market, creating a competitive advantage for Vinamilk.
2.2.2 Economic Factors
The proportion of the added value of the digital economy in the GDP for the years
2020-2023 is as follows: 12.66%, 12.88%, 12.63%, and 12.33% respectively. The
average proportion of added value from the digital economy in the GDP for the years
2020-2023 is approximately 12.62%, with a decrease to 12.33% in 2023. In this context,
the core digital economy sector contributes 7.42% (accounting for 60.19%), while the
digitization of other sectors contributes 4.91% (accounting for 39.81%). The diminishing
trend in the proportion of added value from the digital economy in the GDP is influenced
by the reduction in the production of electronic, computer, and optical products,
constituting over 30% of the total added value of digital economic activities due to
reduced global demand.
Additionally, the service sectors with added value generated through the
application of information technology in production and business operations exhibit an
increasing trend. This reflects the government's efforts to enhance information
technology and communication development. The digitization of economic sectors,
particularly the service industries, contributes to the rise in the share of added value from
the service sector in the GDP, increasing from 6.53% in 2020 to an estimated 6.65% in
2023.
Beyond the core digital economy sectors, several sectors with high average added
value from the digital economy during the years 2020-2023 include wholesale and retail
trade, accounting for approximately 13% of the total added value from the digital
economy. The production and distribution of electricity, gas, hot water, steam, and air
5
conditioning, with an average contribution of about 4%, and the production of precast
metal products, constituting around 2%. Sectors like broadcasting and television
activities and financial services each contribute about 2%. Conversely, some sectors with
low digitization and negligible efforts in digitalization, such as veterinary activities,
social assistance activities, concentrated care and nursing activities, the production of
tobacco products, pollution control, and other waste management activities, collectively
contribute around 0.002% to the total added value from the digital economy.
2.2.3 Technological Factors
Most of the current production lines are imported from Europe, and each company
has its own proprietary technology for milk production. Consequently, product
differentiation and milk quality vary among manufacturers.
Challenges:
- Significant upfront investment costs and a prolonged return on investment
period.
- The trend towards technological innovation and modernization, adhering to
specific standards, creates pressure from competitors and customer
expectations.
Opportunities:
- Investing in state-of-the-art technology enables the production of high-quality
and highly productive dairy products.
- Achieving cost efficiency per unit, providing a competitive edge against rivals.
Threats:
- Large initial capital investment and an extended payback period pose financial
challenges.
2.2.4 Socio-Cultural Factors
The increasing demand for milk reflects a growing societal emphasis on
nutritional and dietary safety. As consumers prioritize these aspects, opportunities arise
for expanding product segments and tapping into new consumption markets. The dairy
market, having weathered the "melamine storm," continues to exhibit robust growth.
Opportunities:
Expanding market segments and consumption markets.
Rebuilding customer trust in dairy products, driving increased product demand.
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 Consumption habits surrounding milk have become ingrained, particularly for
target demographics such as children and pregnant women. The cultural norm of
prioritizing milk as an essential item in family expenditures, despite potential cutbacks in
other areas, underscores its significance.
Opportunities:
Milk holds a top-tier priority in family expenditures, especially in a country like
Vietnam with a young population.
Vietnam's current population of 99,235,930 individuals (as of February 1, 2024)
positions it as a promising market, aligning with the country's youthful demographic.
(Nguồn: https://danso.org/viet-nam/)
2.2.5 Environmental Factors
Vietnam's favorable natural conditions for dairy farming receive significant
attention and support for development, ensuring the industry's ability to meet domestic
demand.
Opportunities:
Strategic development of a stable and high-quality supply of fresh milk within the
domestic market.
Reduced dependence on imported raw materials by proactively securing a stable
source of domestic raw materials.
2.2 External Factor Evaluation (EFE)
Matrix Selecting key factors related to opportunities and threats for inclusion in the EFE
matrix:
External Weight Rating Weighted Comments
Factors Score Opportunities
Opportunities
Government 0.1 2 0.2 Leveraging
policies incentives
supporting the
dairy industry
Economic 0.25 .5. 1.25 Expanding
recovery post- production
Covid, rising
7
average income
High growth 0.1 5 0.5 Increasing
rate in the dairy investment
industry
Milk meets 0.05 3 0.3 Impact on
irreplaceable nutritional
nutritional demand
needs
Consumer 0.1 3 0.3 Public relations
emphasis on programs and
corporate social quality policies
responsibility
and
relationships
Threats
Intense 0.02 1 0.02
competition Strengthen and
with dairy Develop a
products Strong Brand
domestically
and
internationallyc
High industry 0.02 1 0.02 Key Success
growth rate Factors
attracting new
entrants
Increasing 0.1 3 0.2 Emphasize
consumer Strengthening
concern about
product quality
and credibility
Unstable 0.1 2 0.2 Product
8
 domestic raw Varieties
materials
Low product 0.1 4 0.4 Brand
differentiation Marketing
primarily
reliant on brand
Growing 0.06 4 0.24 Strategy
consumer Implication:
emphasis on Strengthen and
brand develop a
credibility and robust brand.
product quality
Toal 1 3.63

With a total score of 3.63, averaging to 3, Vinamilk has responded quite

effectively to environmental factors
2.4 Internal Business Environment
2.4.1 Customers
Customer awareness regarding product quality, especially in the food industry,
including dairy, is on the rise.
Opportunities:
- Expanding customer segments and numbers as consumers increasingly
prioritize quality of life and better understand the importance of milk for
health.
- Challenges: Erosion of customer trust due to events such as melamine
contamination or iron incidents in milk, leading to reduced demand and a tendency to
seek alternative products.
As people's income increases, there is a growing tendency to choose branded
products.
Opportunities:
- Attracting a larger customer base as Vinamilk is a reputable brand in the
Vietnamese milk market.
9
 - Challenges: Intense competition, especially in the infant formula segment, due to
consumers' preference for imported brands, posing a challenge for local brands to change
consumer perceptions and guide them towards "High-quality Vietnamese Products."
Dairy products, particularly imported formula milk for children, continue to
receive attention from domestic consumers. However, competition in the formula milk
segment is becoming more challenging due to the perception among consumers that
foreign products are always superior.
Challenges:
- Fierce competition between foreign and local brands, particularly in the
formula milk segment.
- Parental perception that foreign brands are superior, hindering efforts by local
brands to shift consumer perceptions towards "High-Quality Vietnamese
Products."
In today's fast-paced information dissemination environment, effective handling of
situations and minimizing customer dissatisfaction is crucial to avoid significant impacts
on the brand.
Opportunities:
- Vinamilk's strong customer service and marketing teams serve as a substantial
advantage in providing excellent customer service, thereby maintaining
customer trust.
- Challenges: The need to swiftly address and resolve issues to minimize
negative impacts on the brand image.
Currently, the primary target market remains domestic, focusing on various
customer segments, while international markets are considered for future expansion.
Opportunities:
- Tapping into potential opportunities in the domestic market by concentrating
resources on high-potential market segments.
- Challenges: Strategic planning needed to avoid scattered investments with
limited positive outcomes.
2.4.2 Suppliers
Vinamilk relies on two main sources of raw materials: imported milk powder and
domestically sourced fresh milk.
10
 Challenges:
- Milk powder is imported from Europe, New Zealand, the United States,
Australia, and China. Heavy dependence on imported raw materials has
exposed dairy producers to challenges, particularly during the 2007-2009
period when input milk prices experienced unpredictable fluctuations,
impacting production costs.
- Threats: Lack of control over raw material sourcing, vulnerability to non-
competitive exchange rates, and difficulties in competing with foreign
products.
Opportunities:
- Actively managing the supply chain by expanding the network for purchasing
fresh milk domestically, reducing dependence on imported raw materials.
- Expanding the sourcing network to northern regions of Vietnam to enhance
input quality and increase the proportion of domestically sourced fresh milk in
products.
Challenges:
- Dependency on international markets for milk powder exposes the company to
exchange rate fluctuations and unpredictable cost variations.
- Procurement of approximately 44.5% of the annual domestic fresh milk
production under a contract, mainly from Ho Chi Minh City and nearby
provinces.
Opportunities:
- Active control over raw material sourcing, demonstrating commitment to local
farms, leading to reduced susceptibility to price fluctuations.
- Strategic expansion of the fresh milk sourcing network to the northern region,
leveraging proximity to the manufacturing facility for efficient transportation and cost
reduction.
The scale of dairy farming in Vietnam remains relatively small, with farmers
relying heavily on milk buyers and lacking the capacity for vertical integration. However,
by 2022, domestic raw materials are expected to meet about 40% of production needs due
to an increase in the dairy cow population.
Opportunities:

11
 - Proactive sourcing to meet production demands as the domestic dairy industry
grows.
- Caution: Overreliance on the quality of milk supplied by farms without
rigorous quality checks poses potential risks to product quality and customer
trust.
2.2.3 Competitors
Intense focus on advertising by dairy companies; however, advertising costs are
regulated by Circular 134/2007/TT-BTC, stipulating that advertising, promotional, and
other related expenses should not exceed 10% of reasonable costs.
High advertising expenditures by competitors such as Nestle (38%) and Mead
Johnson (42%) have led to consumer concerns as these costs contribute to increased milk
prices.
Threats:
Potential negative consumer reactions to Vinamilk's recent high-profile
advertising campaigns, impacting customer perceptions of costs.
Limited information available about competitors, making it challenging to predict
their strategies and developments, hindering effective strategic planning for the company.
Opportunities:
The dairy industry is experiencing a high annual growth rate of around 20%,
attracting various new entrants.
The rapid growth in the number of competitors might lead to market
fragmentation, making it essential for the company to continuously adapt its strategies.
Challenges:
Low product differentiation, primarily reliant on brand recognition.
Risk: Customers may seek alternative brands due to perceived lack of
differentiation, potentially affecting product loyalty.
Opportunities:
After the Melamine contamination incident, domestic market share could expand
as competitors face challenges related to quality issues.
Increasing market share and trust in imported milk products, seizing opportunities
arising from concerns over the safety of foreign brands.
Threats:
12
 Limited competitiveness of Vietnamese dairy products due to heavy reliance on
imported raw materials, equipment, and technology, especially for powdered milk.
Challenges:
Competitive pricing challenges due to the non-competitive nature of domestic
products.
The industry is susceptible to rapid market entry by foreign brands due to pricing
constraints.
2.4.4 Substitute Products
 Đe dọa: Giảm thị phần và số lượng khách của sản phẩm sữa
Possible decline in market share and customer base for milk products. No direct
substitutes for powdered and condensed milk products.
Opportunities:
Vinamilk maintains a significant market share and customer base.
Threats:
Reduced market share and customer numbers for milk products.
Fresh milk and flavored milk products face competition from carbonated drinks
and energy drinks.
2.4.5 Potential Competitors
Threats:
- Economic scale advantages clearly demonstrated in the industry.
- Minimal costs for consumers when switching brands, potentially impacting
Vinamilk's market share.
Challenges:
- High capital requirements for technology, supplier relationships, distribution
networks, and brand marketing.
- The ease of accessing distribution channels, supply sources, or production
processes may not be a significant barrier.
Opportunities:
Strengthening investment opportunities in new customer segments and markets,
with continuous government support.

13
2.5 Internal Factors Matrix for Vinamilk (IFME)
Number Các yếu tố Weight Coefficient Weighted Score Impact
of Average Positive Negative
Response Impact

1 Vinamilk 0.1 3 0.3 +

maintains a
strong position
in the
Vietnamese
market due to a
well-established
reputation and
market
understanding.
2 Modern and 0.1 .3. 0.3 +
advanced
manufacturing
equipment and
technology
following
international
standards.
3 Diverse and 0.1 4 0.4 +
high-quality
product
portfolio
suitable for
various age
groups.
4 Still dependent 0.1 2 0.2 -
on imported

14
 milk powder
raw materials.
5 Manufacturing 0.05 3 0.15 +
plants
strategically
located.
6 Proactively 0.1 3 0.3 +
secures funding
sources.
7 Proficient and 0.05 4 0.2 -
highly
knowledgeable
workforce
8 Marketing 0.1 2 0.1 -
activities
primarily focus
on the South,
while the North,
representing
two-thirds of
the country's
population, is
not adequately
addressed
9 Low market 0.05 3 0.15 +
share in
powdered milk.
10 Research 0.05 3 0.15 +
and
development
capabilities to
respond quickly
15
 and strongly to
market trends
and consumer
demands
11 Distributors 0.05 3 0.15 +
equipped with
refrigeration
systems
12 Experienced 0.05 3 0.15 +
marketing and
sales team
capable of
consumer
analysis and
identification.
13 Extensive 0.1 4 0.4 +
distribution and
sales network,
enhancing
competitiveness
in the market
Toal 1 3

The total score for VNM is 3, which is higher than the industry average of 2.5.
This indicates that the company is internally strong compared to competitive
counterparts.

CHAPTER 3: SWOT ANALYSIS AND VALUE CHAIN OF VINAMILK

COMPANY
3.1 SWOT Analysis
Using SWOT Analysis to Develop Strategic Options:
Strengths (S) Weaknesses (W)

16
 S1: Leading position in the W1: Heavy reliance on
Vietnamese market due to imported powdered milk
a well-established (over 90%).
reputation and brand W2: Low market share in
understanding of the powdered milk.
domestic market. W3: Limited investment in
S2: Diverse and robust the Northern market.
product portfolio suitable
for various age groups and
meeting different consumer
needs.
S3: Extensive distribution
and sales network with
agents equipped with
refrigerated and frozen
display systems.
S4: Manufacturing plants
strategically located near
dairy farms.
S5: Strong capital
mobilization capabilities.
Opportunities (O) Strategic Options (SO): Strategic Options (WO):
O1: Growing consumer S1+S2+S3+S5+O1+O2: W1+O2:Vertical
demand for milk. Maintain market integration.
O2: Government interest leadership. W3+O1+O2: Invest in the
and encouragement S4+O2: Vertical Northern market.
integration.
S1+S2+S5+O3: Expand
into new international
markets.
S1+S2+S5+O1+O2:
Continue diversifying
17
 product offerings
Challenges (T) Strategic Options (ST): Strategic Options (WT):
T1: Intense competition in S1+T1+T5: Strengthen W1+W2: Maintain the
the domestic and Vinamilk's brand. status quo of current dairy
international dairy product S1+T1: Stabilize prices to product operations.
markets. compete in the current
T2: Unstable local raw market segment.
material supply.
T3: Increasing consumer
concern about product
quality and reputation.
T4: Vietnamese consumers'
inclination towards foreign
milk products.

3.2 Value Chain of the Company

Vinamilk stands as a leading dairy producer in Vietnam, offering a diversified
product portfolio, including primary products like liquid and powdered milk, and value-
added products such as condensed milk, eating and drinking yogurt, ice cream, and
cheese.
In 2023, domestic revenue contributed 83.7% to Vinamilk's total revenue. Among
product categories, liquid milk holds the largest share in total revenue, followed by
yogurt and powdered milk.
In the revenue structure, Q3/2023 witnessed a 3.8% decrease in domestic revenue,
amounting to VND 13,253 billion. For the first nine months of the year, the total revenue
reached VND 37,904 billion, fulfilling 70.5% of the 2023 annual plan.

The domestic revenue decline was attributed to an estimated 4% decrease in sales

volume compared to the same period last year, driven by weakened demand and the
absence of price support factors in Q3/2023 compared to Q3/2022.
On the other hand, export revenue increased by 5.0%, thanks to stability in the
Middle East and Southeast Asia markets. In the first nine months, Vinamilk achieved
18
revenue of VND 6,983 billion from foreign markets. Additionally, strategic agreements
with leading enterprises in the import and distribution of milk signify efforts to penetrate
potential markets.
Vinamilk's value chain encompasses two major segments: primary activities and
support activities.
Primary Activities:
1. Inbound Logistics:
Concerning Vinamilk's supply chain model for inbound logistics, the value chain
commences with meticulous procurement, dairy farming, production, and distribution
processes. This entire sequence is maintained in a closed loop, adhering to Vinamilk's
internal control procedures, certified by reputable domestic and international
organizations.
The raw milk source is kept pure, ensuring clear origin. With a commitment to
delivering top-quality nutrition to the community, Vinamilk maintains transparency
regarding the origin of raw milk used in the production process. The company actively
engages in comprehensive collaboration with dairy farmers. Since the beginning of
Vietnam's dairy farming development in 1990, Vinamilk has been closely associated with
farmers, initiating the raw milk procurement process. The 1991 "White Revolution"
marked the company's first effort to establish a domestic raw material region.
The core solution involves supporting farmers in investing in breeding, livestock
techniques, veterinary medicine, and purchasing milk at competitive prices. Vinamilk
also stands as a guarantor for farmers seeking loans to buy shares, fostering a strong bond
with the company. The value chain model for supply activities, from raw materials to end
consumers, unfolds as follows:
In this model, the milk procurement process from farmers is detailed in the
following steps:
1. Farmers extract milk following proper technical procedures.
2. Transportation to intermediary transfer stations.
3. Specialized tankers transport fresh milk to Vinamilk's Fresh Milk Material
Center.
4. At this stage, Vinamilk's staff analyzes the quality of fresh milk for procurement
and payment purposes.

19
 5. Payment is made to the farmers.
This comprehensive value chain ensures the integrity and quality of raw materials,
contributing to Vinamilk's commitment to delivering high-quality dairy products to
consumers.
2. Operations.
Vinamilk's core business activities encompass the processing, manufacturing, and
trading of various dairy products, including fresh milk, canned milk, powdered milk,
nutritional powder, yogurt, condensed milk, soy milk, beverages, and other milk-derived
products.
3. Outbound Logistics.
Vinamilk Joint Stock Company (Vinamilk, VNM) recently released its financial
report for Q3 2023, revealing a revenue of VND 15.636 trillion, a 3% decrease
compared to the same period last year. However, the cost of goods sold decreased
more significantly by 6.7%, reaching VND 9.082 trillion, contributing to a 3.2%
increase in the company's gross profit to VND 6.555 trillion.
The financial operating revenue of Vinamilk reached VND 484 billion, a 43.2%
increase compared to the same period last year, driven by an increase in interest
income. The financial expenses of the enterprise decreased, while selling expenses
and business management expenses experienced a slight increase.
As a result, Vinamilk achieved a post-tax profit attributable to the parent company
of VND 2.492 trillion, marking an 8.5% increase compared to Q3 2022. Earnings per
share (EPS) rose from VND 985 to VND 1,066. This represents the largest profit
recorded by the company in the past two years and the second consecutive quarter of
positive growth.
4. Marketing and Sales.
Vinamilk has evolved into the most reputable and scientifically trusted nutritional
brand for the Vietnamese population. The company strategically applies scientific
research on the specific nutritional needs of the Vietnamese people to develop optimal
product lines. In 2019, Vinamilk introduced its first Organic Powdered Milk and
Nutritional Powder products in Vietnam. Prior to this, the company had already launched
products catering to children, pregnant women, and the elderly.

20
 Currently, Vinamilk is gradually becoming self-reliant on raw materials to ensure
quality and reduce dependence on imported ingredients. This allows for price
adjustments, aligning with the income levels of consumers. Furthermore, Vinamilk
frequently offers promotions, gifts, and increased product volume at unchanged prices
during special occasions and anniversaries.
Similar to other business entities, Vinamilk intensifies its advertising on various
media platforms, including TV, posters, billboards, social media, and e-commerce
platforms. The company consistently updates content and adopts new advertising
methods to attract and engage consumer attention.
Healthcare community programs, such as the Vietnam Soaring Milk Fund, School
Milk Program, Malnutrition and Stunting Prevention Journey, Elderly Health Care, and
Nutritional Consultation, hold significant social significance.
5. Service.
In the Porter value chain, activities necessary to maintain product performance
after production, including installation, training, maintenance, repair, warranties, and
post-purchase services, are crucial.
With a mission to provide the community with the most valuable nutrition through
reverence, love, and responsibility for life, and a customer-centric philosophy of
"customers are at ease only when we are," Vinamilk places customers at the core.
According to the 2023 annual report, the domestic customer satisfaction index for
Vinamilk is nearly 98.6%, and international customer satisfaction is 100%.
Pre- and during-purchase services: Vinamilk's online sales system is increasingly
refined and convenient, with products available through a wide distribution network of
251,000 retail points, covering supermarkets, convenience stores, and the Dreams of
Vietnamese Milk store network. Customers can easily find Vinamilk's products directly
through the Giacmosuaviet.com website or the Dreams of Vietnamese Milk app. With
these ordering systems, customers have additional purchasing options, making products
more accessible and satisfying, enhancing product value and benefiting the company in
terms of both profit and brand.
Post-purchase services: Customer complaints are received 24/7 by Vinamilk's
customer care department, which then follows specific procedures for handling
complaints to resolve them quickly and provide the highest customer satisfaction

21
possible. Customers can easily file complaints via the hotline: 1900 636 979 (Press 1) or
028 54161271, or email: eshop@vinamilk.com.vn. Vinamilk ensures absolute
information security for customer-provided information. Customer care staff is well-
trained, serving customers with dedication, attentiveness, and listening to their opinions
and feedback. Vinamilk has invested meticulously in the customer care system, including
a dedicated hotline and mailbox to address customer-related issues. Additionally, the
customer care department regularly surveys customer preferences to provide insights into
customer product needs, helping the company develop new product lines. Vinamilk also
conducts frequent surveys to assess customer satisfaction, refining its product value and
building on strengths while addressing areas of improvement.
Support Activities:
1. Procurement.
In terms of scale, since its establishment in 1976, Vinamilk has successfully set up
numerous large-scale dairy plants across central regions spanning from the North to the
South. These include the Thong Nhat, Can Tho, Nghe An, Da Nang, Tien Son, and Lam
Son dairy plants.
With over 30 years of experience in developing dairy farming.
2. Technology Development.
Fresh milk, after undergoing quality checks and measurements, is filtered into
refrigerated storage tanks (150 m3/tank) at the factory. From these tanks, raw fresh milk
goes through processing stages: centrifugal separation, homogenization, pasteurization,
cooling to 4°C, and then transferred to tanks ready for UHT sterilization processing.
The centrifugal separation machine aids in removing harmful bacteria and
microbial spores. UHT Sterilization: The advanced heat treatment system heats the milk
to 140°C, followed by rapid cooling to 25°C, preserving the natural flavor, nutritional
components, vitamins, and minerals of the product. The sterilized milk is then transferred
to tanks, awaiting aseptic packaging.
3. Human Resource Management.
In the current development strategy, Vinamilk recognizes that the "human factor"
determines the company's success or failure.
Policies for employees include:

22
 Ensuring full employment and continuously improving employee incomes. In
addition to salary income, employees also receive profits based on their ownership ratio
in the company if the company is profitable.
Fulfilling rights and obligations according to legal regulations.
Implementing timely rewards for individuals and groups contributing to the
company, with disciplinary measures for those acting adversely to the company's
interests and reputation.
Supporting and creating favorable conditions for employees to participate in
training courses, both domestically and internationally, to enhance professional
knowledge and skills.
4. Firm Infrastructure.
Vinamilk is committed to continual development and enhancement of its industrial-
scale and high-tech dairy farm system. The company has invested in innovative
technologies tailored to the specific environmental and climatic conditions of Vietnam. In
2006, Vinamilk pioneered the development of dairy farms with the most advanced
industrial scale, investing a total of 500 billion VND. The entire farm system is enclosed
and automated, with carefully selected cattle breeds to maximize milk productivity. All of
Vinamilk's dairy cows are of the purebred Holstein Friesian (HF) breed, imported from
Australia, the United States, and New Zealand.
Presently, all dairy farm barns in the company's portfolio are constructed based on
modern design and technology consultation from global leaders like the United States,
Sweden, and Israel:
- The barn system with carefully calculated lying spaces suitable for each stage of
bovine development.
- Ultra-soft bedding imported from the United States.
- Automated drinking trough system.
- Automated back-scratching chain system.
- Manure loss system based on Israeli technology.
- Automatic manure scraping system operating on pre-set cycles, efficiently
separating waste from the feeding area.
- Identification chip system attached to each cattle.

23
 Through herd management software, information on productivity, milk yield, and
movement is monitored. Early warnings regarding the health status and reproductive
cycles are provided:
- A system detecting estrus and managing herd health supports estrus detection to
determine the most accurate mating time.
- Silo system providing automatic feed, invested in all farms. This system stores and
operates entirely automatically, reducing operational time, labor costs, packaging costs,
while ensuring quality unaffected by weather conditions.
- Solar energy system.
Operating as a closed-loop production with an extensive network of factories
equipped with state-of-the-art machinery, Vinamilk adheres to internal processes to
ensure quality according to food safety standards, organic standards, and Halal standards.
Specifically, in 2019, Vinamilk extended Organic standards to seven plants and
registered Halal standards for new products in certain categories such as powdered milk
and beverages. Moreover, Vinamilk has essentially standardized the technological
standards for each product and machinery line across all plants, according to the
company's issued standards. This ensures stable quality and high professionalization.
Additionally, Vinamilk focuses on efficiently utilizing production standards to adapt to
market fluctuations.
Apart from technical standards, in all 13 plants, all personnel entering the production
area must comply with regulations to ensure quality and hygiene. Vinamilk has
implemented the development of the Safety - Health - Environment (EOHS) assessment
at all plants in the year. Constructing documentation systems for fuel control and
management, as well as implementing regular energy audit programs at the plants to
optimize production costs while maintaining quality. Continuously conducting training
programs for employees in safety and environmental protection. Deploying integrated
evaluation programs for ISO 14001, 45001, 50001 systems according to PAS 99.
In tandem with its production capacity development, Vinamilk completed several
capacity-enhancing projects in the year, such as the milk bottling machine to serve the
School Milk Program, expanding production capacity for drinking yogurt, eating yogurt,
condensed milk, and powdered milk products, investing in a new production line for
stirred yogurt products launched in 2019. Furthermore, the new projects completed in the

24
 year also involve additional fresh milk reception systems, expanding storage capacity,
and installing new auxiliary production lines for powdered milk production. Vinamilk
regularly evaluates investment projects to timely plan the most suitable production with
market realities.

CHAPTER 4: STRATEGIC SOLUTIONS PROPOSAL FOR VINAMILK

POWDERED MILK SEGMENT PHASE 2024 – 2026
4.1 Business Canvas Model for Vinamilk
Customer Relationsip Vision & Channels Revenue Streams
Analyzing potential Values The analysis The revenue stream
customer segments for the The proposed of distribution represents the profit
Vinamilk brand is based value of a channels generated by the company. It
on various customer business is the describes the is a crucial consideration for
segments, including the reason why marketing and investors. Vinamilk
mass market, mixed users choose a sales channels currently offers a wide range
market, and niche market. company's that the of product categories such as
Depending on the business product over a company uses fresh milk, powdered milk,
orientation, different competitor's. to reach canned milk, condensed
strategies will be For Vinamilk, potential milk, etc. However, boxed
employed by the the value and customer fresh milk is considered the
management. Vinamilk significance segments. For most lucrative category for
primarily focuses on high- lie in Vinamilk, the Vinamilk due to its
tier distribution agents. providing a primary convenience.
Specifically, the source of distribution This analysis provides an
distribution network high-quality channel overview of Vinamilk's
mainly comprises a chain milk for the remains the business canvas,
of supermarkets with development chain of emphasizing key aspects
dedicated displays for of all supermarkets such as potential customers,
Vinamilk products. Vietnamese and retailers proposed value, distribution
Additionally, Vinamilk people. throughout channels, financial
caters to numerous The brand's Vietnam. resources, and revenue
individual customers with philosophy streams.

25
habits and preferences for aims to be a
its products. quality
Vietnamese
milk source
for the
Vietnamese.
Financial Resources Revenue Stream Key Activities
This factor delineates the The primary revenue stream To operate seamlessly and
principal resources of the represents the profit generated deliver high-quality products
company that support its by the company, constituting a to customers, Vinamilk
business operations. These paramount consideration for engages in a multifaceted
resources encompass investors. Presently, Vinamilk approach. Apart from
material aspects, including introduces a diverse array of product research and
environmental resources, product categories to the development, Vinamilk is
intellectual resources such market, including fresh milk, distinguished by its unique
as patents, the workforce powdered milk, canned milk, marketing strategies. An
of the enterprise, and condensed milk, etc. Notably, integral aspect of analyzing
financial capabilities. boxed fresh milk stands out as Vinamilk's business canvas
Vinamilk currently the category yielding the most model is acknowledging the
commands an immensely substantial revenue for impact of its humanistic TV
robust financial reservoir, Vinamilk due to the commercials.
positioning itself to be a convenience it offers. In ensuring smooth
frontrunner in the market. This delineation provides an operations and providing
insight into Vinamilk's customers with quality
financial resources, products, Vinamilk's
emphasizing its robust commitment to product
financial position, and sheds research and development is
light on the primary revenue complemented by distinctive
stream, with boxed fresh milk marketing strategies.
emerging as the most lucrative Notably, the company's
category. human-centric TV
commercials play a pivotal
26
 role, adding a unique
dimension to its business
canvas model.
Key Partners & Stakeholders Cost Structure
Vinamilk's partnership landscape manifests through four The cost structure
distinctive types of relationships: (i) strategic partnerships encompasses all expenses
among non-competing companies, (ii) partnerships between imperative for sustaining and
competing entities to stimulate the market, (iii) joint managing a business's
ventures fostering innovation for new market entry, and (iv) operations. This includes the
procurement relationships securing inputs for the company. capital from equity
These partnerships underscore the diverse and strategic investors. From an analysis
network that Vinamilk cultivates to fortify its position in the of Vinamilk's sales cost
market. structure, it is evident that
substantial funds are
allocated towards support
activities and commissions
for distributors.
This section delineates the
nuanced relationships in
Vinamilk's partner
ecosystem and elucidates the
cost structure, emphasizing
the significant investment in
support functions and
distributor commissions..

27
 4.2 SWOT Strategic Solutions
4.2.1 SO Strategies
a. Market Leadership Strategy (S1+S2+S3+S5+O1+O2)
Vinamilk, as a prominent brand in Vietnam's dairy industry with a 39%
nationwide market share, is strategically positioned. The company's products are
extensively distributed through over 240 distributors, 140,000 retail points, and all
national supermarket systems. The well-equipped distributors, coupled with Vinamilk's
strong capital mobilization capability, create an ideal environment. With the rising
market demand for dairy products and government encouragement, Vinamilk is poised to
maintain its market leadership in Vietnam. Leveraging its established reputation and
robust presence, Vinamilk is well-placed to capitalize on favorable conditions.
b. Vertical Integration Strategy (S4 + O2)
Vinamilk's commitment to developing livestock for local farmers and producing a
range of milk-based products aligns with government encouragement. The strategic
placement of production facilities near dairy farms aids in gradually transitioning from
imported to locally sourced raw materials. By supporting farmers in livestock
development and continuously expanding the milk procurement network, Vinamilk
reduces dependence on foreign raw materials, enhances milk quality, and lowers
production costs.
c. Market Expansion Strategy (S1+S2+S5+O3)
The widened opportunities for investment and export following Vietnam's WTO
accession are coupled with increased domestic market competition. Exploring less
competitive markets abroad becomes crucial. Vinamilk's initial success in expanding
operations to countries such as the United States, Australia, Cambodia, Laos, the
Philippines, the Middle East, Canada, France, Russia, the Czech Republic, Poland,
Germany, and China demonstrates promising results. This strategy enhances Vinamilk's
international reputation, brand recognition, and import-export activities, aligning with its
goal of achieving a record-breaking $1 billion in import-export turnover by 2023 and
securing a spot among the top 200 outstanding enterprises in Asia.
d. Product Diversification Strategy (S1+S2+S5+O1+O2)
Vinamilk's extensive product portfolio, including various dairy products, positions it
well to meet the increasing consumer demand. With a diverse range, Vinamilk, being a

28
large domestic enterprise, is advantageously positioned to research and develop new
products tailored to specific customer segments. This strategic move minimizes direct
competition within fiercely contested segments and targets smaller, untapped market
niches.
4.2.2 ST Strategies
a. Reinforce the VNM Brand (S1 + T1 + T5):
Vinamilk currently holds a leading position in the Vietnamese dairy industry,
attributed to a well-established brand and reputation. Leveraging this strength, the
company strives to further solidify its brand to enhance competitiveness against both
domestic and international dairy products. Given the increasing consumer caution
following the recent incident involving melanin-contaminated milk products, consumers
are placing more emphasis on the reputation and quality information of dairy products.
Hence, the ongoing reinforcement of the brand's reputation for product quality is a
critical strategy for the company. This aims to achieve the target of an average 30%
revenue growth from 2024 to 2026.
b. Maintain Competitive Pricing in Current Segments (Targeting Middle and Upper-
Middle Income) (S1+T1)
Despite being a leading company in the Vietnamese dairy sector, Vinamilk faces
significant competition from various competitors within and outside the country across
different market segments. Notably, major competitors include Dutch Lady and TH True
Milk. Therefore, Vinamilk's strategy is to sustain stable competitive pricing in its current
market segments to consolidate and increase its market share from 39% to 42% over the
next four years.
4.2.3 WO Strategies
a. Vertical Integration Strategy (W1+O2):
As outlined in the SO strategy group, this approach enables the company to
proactively manage its raw material sources, ensuring stable and long-term production.
By developing domestic raw material sources, gradually reducing reliance on imported
materials, and establishing modern, closed-loop industrial-scale dairy farms, Vinamilk
aims to enhance the stability and sustainability of its production.
b. Investment Strategy in the Northern Market (W3+O1+O2):

29
 To strengthen its distribution system and quality in markets where Vinamilk has
yet to achieve significant market share, particularly in the Northern region, rural areas,
and small urban centers. The goal from 2024 to 2026 is to continually expand and
develop an active, robust, and efficient distribution system. The company aims for an
annual revenue increase of 30%.
4.2.4 WT Strategies
Continuing current operations, leveraging existing business capabilities, and
exploring potential strategic avenues as outlined in the SWOT matrix. These
development strategies include:
Reinforce the VNM Brand:
Enhancing the brand's reputation for quality products to boost competitiveness and
achieve the target of a 30% average annual revenue increase from 2024 to 2026.
Maintain Competitive Pricing in Current Segments (Middle and Upper-Middle
Income):
Sustain stable competitive pricing in current market segments, focusing on the
middle and upper-middle-income groups to consolidate and increase market share from
39% to 42% over the next four years.
Vertical Integration Strategy:
Actively managing raw material sources to reduce dependence on external factors,
stabilize production costs, and facilitate reasonable pricing. This strategy aims to
maintain consistent growth and increase profitability.
Reinforce the VNM Brand:
Improving VNM's image to strengthen the brand and foster customer loyalty.
Enhancing the brand will significantly support VNM in introducing new products
through the "brand umbrella" effect.
Maintain Competitive Pricing in Current Segments (Middle and Upper-Middle
Income):
Given the current income distribution in Vietnam, where a considerable portion of
the population has middle to low income, VNM should continue to offer reasonably
priced products to sustain its presence in this market segment.

30
4.2.5 Evaluation
Upon reviewing the assessment of Vinamilk's opportunities, threats, strengths, and
weaknesses, the team has identified strategic options outlined in the SWOT matrix,
which are not mutually exclusive, except for the "WT" strategy of maintaining current
operations without new investments. The proposed strategic development options
include:
Stabilizing Competitive Pricing in Current Segments (Middle and Upper Middle-
Income Targets
Market Leadership Strategy:
Vertical Integration Strategy
Investment Strategy in the Northern Market:
Product Diversification Strategy:
These strategic initiatives collectively aim to support Vinamilk's ambitious goal of
achieving a 40% annual revenue growth. By focusing on market stability, leadership,
vertical integration, regional expansion, and product diversification, Vinamilk aims to
ensure a resilient market presence and sustained growth within the competitive dairy
industry landscape.
Backwards vertical integration strategy: VNM needs to be proactive in raw
material sources and not depend on raw material prices to be able to offer reasonable
prices. Once VNM can be proactive in raw material sources, production and product
pricing will be more stable and convenient. So the vertical integration strategy backwards
will be a good choice for VNM when it wants to maintain growth and increase profits.
Continue to strengthen VNM brand: Enhancing VNM's image strengthens the brand and
create loyalty for customers. Strengthening the brand will greatly support VNM in
launching new products through the "protective brand" effect.
Stable competitive prices in the current segment (those with middle and upper
middle income): Currently, despite joining the group of middle-income countries, the
majority of Vietnamese people now also have middle and low income levels. The dairy
product market for middle and low income people still has a lot of space, so VNM needs
to keep prices reasonable to be able to maintain this market.
Stabilizing product prices can only be supported by VNM proactively sourcing
raw materials, improving appropriate production and management methods to best save

31
costs. Product diversification strategy: Currently, consumer needs are increasingly
diverse and changing rapidly, so VNM needs to have diverse products to meet this need.
In addition, this strategy can also help VNM focus on serving more customers (customer
segmentation by income and age). Of course, launching new products requires careful
research, exploration and consideration to ensure compatibility between the product and
the characteristics of customer groups.
Market share leader strategy: Currently, VNM's market share in the entire dairy
industry is generally good, but in addition to products such as ice cream, yogurt,
condensed milk, fresh milk... that have a relatively large market share, there is one other
product. For example: powdered milk market share of VNM is still quite modest. VNM
needs to maintain its leading image in the dairy industry in Vietnam in products with
such large market shares that will support other products. Market expansion strategy
abroad: Although, the domestic market The country is still quite large for the dairy
industry, but due to regulations when Vietnam joins the WTO, it will increasingly attract
more and more other manufacturers to participate in the Vietnamese market. Competition
is becoming more and more fierce, so finding foreign markets will be a good choice for
VNM and investing abroad can help VNM exploit more potential markets. In addition,
VNM is also a company with good financial situation, high ability to mobilize capital and
effectively use its capital.
4.2.6 Vinamilk QSPM matrix table
Key Factor Investment in Promotional Activities to Expand the market to
Enhance Powdered Milk Market find supply and demand
Weight AS TS AS TS
Opportunities
High Consumer 0.05 2 0.1 3 0.15
Index
Increasing Per 0.04
Capita Milk
Consumption
The population 0.06 1 0.06 4 0.24
growth rate is
fast
High Economic 0.08

32
Growth Rate
Advanced 0.1 4 0.4 3 0.3
Science and
Technology
Growing 0.06 3 0.18 4 0.24
Consumer Trend
towards Milk
Usage
Vietnam's 0.06 2 0.12 4 0.16
Participation in
WTO
Global Milk 0.04 2 0.08 4 0.16
Market Showing
Significant
Demand Increase
Vietnam in the 0.07 3 0.21 4 0.28
Golden
Population Era
Improved Income 0.05 3 0.15 4 0.2
of Vietnamese
Population

Challenges
Harsh Climate 0.03
Conditions
Increasing 0.04
Incidence of
Diseases in
Cattle Herds
Intense Domestic 0.06 2 0.12 3 0.18
and International
Competition
Rising Demand 0.06 3 0.18 4 0.24
for Imported
Milk
Pressure from 0.04 3 0.12 2 0.08
Substitute

33
Products
Low Import 0.05
Taxes on Milk
Products
Unstable 0.05
Vietnamese
Exchange Rates
World milk 0.06 4 0.24 3 0.18
powder prices are
putting pressure
on the
Vietnamese dairy
industry

Toal 1
Strengths
Sustainable 0.09 4 0.36 3 0.27
Brand Reputation
Dominant Market 0.09 3 0.27 4 0.36
Share
Domestically
Diverse and 0.09 1 0.09 2 0.18
High-Quality
Product Range
Strong 0.08 1 0.08 3 0.24
Competitive
Pricing
State-of-the-Art 0.08 4 0.32 2 0.16
High-Tech
Equipment
Extensive 0.08
Nationwide
Distribution
Network
Well-Structured 0.08 4 0.32 3 0.24
and Professional
Marketing

34
 Strategy
Customer Care 0.07
Services

Weaknesses
Moderate Market 0.07 4 0.28 2 0.14
Share in
Powdered Milk
Unstable Input 0.06 2 0.12 4 0.24
Material Supply
High Advertising 0.07 4 0.28 3 0.21
Costs
The retail and 0.06 3 0.18 2 0.12
distribution
system is not
selective

Toal 1
Toal 2 4.42 4.89

Thereby, it can be seen that the strategy "Expanding the market to seek supply and
demand is attractive and more positive than the strategy of "investing in promotion and
marketing to increase market share of powdered milk", which is indicated by the
attractiveness point. The total lead is 4.89 compared to 4.42

CHAPTER 5: STRATEGIC PLAN AND ACTION FOR POWDERED MILK

PRODUCTS 2024 - 2026 VIETNAM MARKET
In the dynamic landscape of the dairy industry in Vietnam, Vinamilk recognizes
the need for a robust strategic plan to navigate the challenges and capitalize on emerging
opportunities in the powdered milk segment. The following detailed strategy outlines
Vinamilk's approach for the years 2024 to 2026.
Objective:
The primary objective of this strategic plan is to solidify Vinamilk's position in the
powdered milk market, ensuring sustained growth and heightened competitiveness. The
plan aims to achieve this by leveraging market trends, addressing challenges, and meeting
the evolving needs of consumers.Thời gian:

35
Target Customer Demographics:
Infants and Toddlers (0-3 years):
 Develop specialized infant formula with essential nutrients for optimal
growth.
 Introduce toddler-specific formulations focusing on cognitive development.
 Emphasize product safety and adherence to international standards.
Children and Adolescents (4-18 years):
 Create fortified milk powder variants catering to the nutritional needs of
growing children.
 Highlight the role of milk in bone development, immune system support,
and overall well-being.
 Collaborate with schools and educational institutions to promote healthy
milk consumption habits.
Seniors (60+ years):
 Create formulations tailored to the nutritional needs of seniors, addressing
bone density and immune system support.
 Implement packaging designs for ease of use, considering potential
physical limitations.
 Collaborate with healthcare professionals to position products as part of a
healthy aging strategy.
Estimated Costs:
Product Development:
 Initial Research and Formulation: $500,000
 Testing and Quality Assurance: $300,000
 Packaging Design and Materials: $200,000
 Total: $1,000,000
Marketing Campaigns:
 Digital Marketing and Advertising: $800,000
 Collaborations and Sponsorships: $300,000
 Promotional Events and Sampling: $200,000
 Total: $1,300,000

36
 Distribution Enhancements:
 Supply Chain Optimization: $400,000
 Technology Integration for Logistics: $250,000
 Expansion of Warehousing Facilities: $350,000
 Total: $1,000,000
Miscellaneous (Contingency):
 Unforeseen Expenses: $200,000
 Total Estimated Costs: $3,500,000

Profit Margin Projection:

Assuming a conservative revenue growth of 40% as targeted, the estimated
revenue for the strategic plan period can be projected based on historical performance.
Current Annual Revenue: $1 billion
Targeted Growth: 40%
Projected Annual Revenue (2026): $1.4 billion
Profit Margin:
Considering a standard industry profit margin of 15-20%, the projected profit can
range between $210 million and $280 million.
Marketing Strategy:
The marketing strategy revolves around a multifaceted approach, incorporating
both traditional and digital channels. Vinamilk aims to enhance brand visibility,
communicate the unique value propositions of its powdered milk products, and engage
with consumers on various platforms. Strategic partnerships, targeted advertising, and
innovative promotional campaigns will be employed to maximize impact.
Timeline:
- The strategic plan will unfold over the course of three years, from 2024 to
2026. This timeline allows for a phased and well-structured implementation,
ensuring that each stage contributes to the overall success of the initiative.
Market Analysis (2024):
o Conduct an in-depth analysis of the current powdered milk market in
Vietnam.
 Identify emerging trends, consumer preferences, and market gaps.
37
  Evaluate competitors and assess their strengths and weaknesses.
 Gather insights into regulatory changes affecting the dairy industry.
Product Development and Enhancement (2024-2025):
 Invest in research and development to innovate and diversify powdered milk
products.
 Improve existing formulations based on nutritional trends and customer feedback.
 Ensure compliance with quality standards and regulations.
 Collaborate with nutritionists and health experts to enhance product benefits.
Marketing Strategy Rollout (2025):
 Develop a comprehensive marketing strategy tailored to target customer segments.
 Launch strategic advertising campaigns highlighting product uniqueness and
benefits.
 Utilize both traditional and digital platforms for maximum reach.
 Establish partnerships with influencers and key opinion leaders in the nutrition and
health sectors.
Distribution Network Expansion (2025-2026):
 Strengthen and expand the distribution network to reach a wider audience.
 Establish partnerships with retailers, supermarkets, and convenience stores.
 Implement efficient logistics and supply chain management to enhance product
availability.
 Monitor and optimize inventory levels to meet fluctuating demand.
Customer Engagement and Loyalty Programs (2026):
 Implement customer engagement initiatives to build brand loyalty.
 Introduce loyalty programs, discounts, and promotions to incentivize repeat
purchases.
 Gather customer feedback through surveys and reviews to make continuous
improvements.
 Enhance customer service and responsiveness to build lasting relationships.
Performance Evaluation and Adaptation (Ongoing):
 Regularly evaluate the performance of the strategic plan against predefined KPIs.
 Analyze market feedback, sales data, and customer satisfaction metrics.
38
 Adapt the strategy based on changing market dynamics, consumer preferences,
and competitive landscape.
 Continuously refine marketing tactics and product offerings to stay ahead in the
dynamic powdered milk market.

39
 SUMMARY
In conclusion, the analysis of Vinamilk's business strategies reveals a
comprehensive approach aimed at maintaining its leading position in the Vietnamese
dairy market. With a robust financial foundation and diverse product portfolio, the
company strategically leverages its strengths, such as market dominance and financial
capabilities, to exploit opportunities both domestically and internationally.
Vinamilk's commitment to vertical integration by developing domestic dairy
farming and reducing reliance on imported materials underscores its foresight in ensuring
a stable and sustainable production process. The emphasis on reinforcing the VNM
brand, in light of recent product-related concerns, demonstrates the company's proactive
response to consumer sensitivities and its dedication to quality assurance.
Furthermore, the strategies to stabilize competitive pricing in the current market
segments, particularly the middle and upper-middle-income groups, reflect Vinamilk's
recognition of the diverse economic landscape in Vietnam. By addressing specific
consumer segments, the company aims to consolidate its market share and achieve
substantial revenue growth over the next four years.
The investment strategy in the Northern market aligns with Vinamilk's expansion
goals, focusing on areas where it has yet to establish a significant presence. This
approach, coupled with a commitment to enhancing the distribution network, exemplifies
the company's dedication to furthering its reach and ensuring a robust and effective
distribution system.
In navigating potential challenges, Vinamilk's strategies demonstrate a proactive
stance, capitalizing on its strengths to address weaknesses and leveraging opportunities to
mitigate threats. This holistic and forward-looking approach positions Vinamilk for
sustained success and growth in both the domestic and international dairy markets.

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3. Tien, Nguyen Hoang, Nguyen Van Thuy, and Phan Minh Duc. "Vinamilk’s brand
management in the era of 4th In-dustrial revolution." (2019).
4. Dao, Mai. "Applying International Accounting Standard 16 in Vinamilk." (2023).
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expansion." Tạp chí Khoa học và Công nghệ-Đại học Đà Nẵng (2023): 32-40.
6. Ai, Tran Huu, and Nguyen Thi Le Hoa. "Strategy of VIN University to attract
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7. Tong Cuc Thong Ke VietNam, Link: https://www.gso.gov.vn/du-lieu-va-so-lieu-
thong-ke/2023/12/thong-cao-bao-chi-ve-ket-qua-bien-soan-chi-tieu-ty-trong-gia-
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