DEADLINE NỘI DUNG: 5/9/2024 23:59

BUỔI HỌP KẾ TIẾP: 6/9/2024 20:30

CASE STUDY: VINAMILK

I. Strategic development
1. Vision (Minh Ngọc)
- From 1976 to around 2015 and 2017, Vinamilk's brand positioning focused on the value of
"Vietnamese Trust", focusing on the perspective of asserting position and product quality.
- Since 2017, Vinamilk's brand positioning has focused on the value of "Reaching Vietnam" -
focusing on the mission of bringing nutritional solutions to Vietnamese people to reach
higher; and bring Vietnamese quality to the world level.

“To become a Vietnamese world-class brand in food and beverage industry, where people put all
their trust in nutrient and health products.”

● Revenue and Profit

- Vinamilk's consolidated total revenue for Q2/2024 reached 16,656 billion VND, surpassing the
previous peak of 16,194 billion VND in Q3 2021 to become the highest revenue quarter.
- This quarter also marks the highest growth for the company since early 2022, with a 9.5%
increase year-on-year.
- With the acceleration in Q2/2024, the cumulative consolidated total revenue for the first six
months of 2024 reached 30,790 billion VND, up 5.6% year-on-year and completing 48.7% of
the annual plan.

- For the first six months, net profit after tax reached 4,903 billion VND, up 18.6% year-on-year
and completing 52.3% of the annual plan.

● Domestic Market Share

VNM accounts for about 55% of the liquid milk market share in Vietnam, affirming its leading
position in the domestic dairy industry.

● International expansion
VNM has exported products to 60 countries and territories, including demanding markets such as
Japan, the United States and Australia.

● Production Capacity and Technology Investment

VNM owns 13 factories in Vietnam and 3 foreign factories, along with a modern production line
system with large capacity. Invest heavily in advanced technology such as the Mega dairy factory
and high-tech dairy farms, helping to increase productivity and ensure product quality.
● Sustainability Initiatives
Vinamilk is also making significant strides in sustainability, which is increasingly important for
global consumers. The company's commitment to achieving Net Zero by 2050, as demonstrated by
their actions in 2024, such as greenhouse gas inventories and carbon neutrality certifications,
enhances its appeal as a responsible global brand.
 2. Mission (gia Hân)

“To deliver the valuable nutrition to the community with our respect, love and
responsibility.”

Delivering Valuable Nutrition:

- Product Focus: Vinamilk's primary goal is to provide high-quality, nutritious

dairy products to its consumers.
- They committed to improving the health and well-being of its customers.
- Vinamilk is likely focused on understanding and meeting the specific
nutritional needs of its target market.
Respect, Love, and Responsibility:

- Ethical Conduct: They practice ethical business practices, treating employees,

customers, and suppliers with respect.
- The emphasis on love suggests a desire to contribute positively to the
community and society.
- The mention of responsibility hints at a focus on sustainable practices,
minimizing environmental impact.

Implications for Vinamilk's Business Strategy:

- Product Development: Vinamilk likely invests in research and development to create

innovative products that meet evolving nutritional needs and preferences.
- Quality Control: The emphasis on nutrition suggests a strong focus on quality control
to ensure products k”y meet high standards.
- Social Initiatives: Vinamilk may engage in corporate social responsibility activities,
such as community outreach programs or environmental initiatives.
- Customer Engagement: Vinamilk likely strives to build strong relationships with its
customers by understanding their needs and providing excellent customer service.
 3. Core value (Thảo Nguyên)

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CÔNG TY VỚI NHÂN VIÊN

Vinamilk has maintained its leading position in the Top 100 Best Workplaces in Vietnam for
three consecutive years (2017-2020), previously ranking in the top 3.

"At Vinamilk, we deeply value and trust the talent, qualities, and determination of all our
employees, past, present, and future, who have always strived for Vinamilk's growth. To
uphold and promote these values, Vinamilk is committed to putting employee respect at
the forefront and recognizing our employees as our most valuable asset.

Respect
Vinamilk respects the human rights and dignity of all employees and believes that integrity
is inherent in every individual. Respect means valuing our differences and respecting the
viewpoints that arise from those differences.
Information Sharing Vinamilk will always create an open environment for internal
communication to provide employees with timely information about their work,
relationships, and performance. More importantly, Vinamilk always respects constructive
feedback from employees at all levels, especially those related to improving the work
environment or specific job-related issues.

Personal Information Vinamilk respects your privacy. The collection, processing, storage,
and use of employees' personal information will only be carried out when necessary and as
permitted by law."

Fairness
"Vinamilk is committed to treating all employees fairly. This means:

● Fair evaluation: We evaluate employees' performance fairly, regardless of differing

opinions or viewpoints.
● Equal opportunities: Hiring, job assignments, and determining salaries and benefits
for all Vinamilk employees are based on their responsibilities, abilities, performance,
experience, and evaluation results.
● Equal opportunities in other aspects of work:
○ First, we commit to setting appropriate work goals that are both satisfying and
challenging for each employee's abilities.
○ Second, we commit to providing training, coaching, and promotion
opportunities to help employees grow and develop.
○ Third, we conduct performance evaluations to obtain honest and accurate
feedback through open discussions."

Working environment
All employees have the opportunity to discover and showcase their full potential and
achieve their personal goals to grow and contribute to Vinamilk's success.

All employees enjoy the best working conditions, both physically and mentally. We provide
a conducive workspace, necessary equipment, and a comfortable environment for
employees to unleash their potential and contribute their ideas. A mentally supportive
environment also means that every employee feels respected and has the opportunity to
interact and have fun regardless of individual talents or personalities.

All employees are guaranteed safety and health. Vinamilk strictly adheres to safety and
health regulations to ensure the best health for everyone so that they can fully utilize their
abilities.

Company with the outside

Law and state agencies :

Vinamilk is committed to law compliance and business integrity. We will not engage in
illegal activities such as bribery or unethical data practices. Our employees are prohibited
from giving gifts or offering special favors to government officials.

consumer

Vinamilk prioritizes product safety and quality. We ensure our products meet the highest
standards and are competitively priced. We are committed to honest advertising and
customer satisfaction. We value our customers' feedback and protect their privacy.

Customers

Vinamilk always views customers as business partners based on a win-win basis. Vinamilk
will take practical actions such as planning, cooperation terms, and support for its
customer system. Vinamilk does not have behaviors or implications of granting favors to
customers, whether distributors or retailers, in terms of pricing, discounts, promotions, or
support. All of Vinamilk's actions with customers are consistently based on business
fundamentals.

Suppliers

Vinamilk is always committed to ensuring a stable and reliable supply chain based on
sustainable relationships and mutual benefits with suppliers of raw materials and services
at a high standard. Therefore, Vinamilk is committed to building a reputable image as a
trustworthy and honest company to suppliers.

Firstly, Vinamilk commits to complying with all applicable laws and regulations related to
transactions with suppliers.

Secondly, Vinamilk commits to conducting transactions with suppliers based on the

principles of fairness, honesty, objectivity, and mutual benefit. Vinamilk's selection of
suppliers is always based on specific criteria such as price competitiveness, quality, and
other suitable standards and conditions. At the same time, Vinamilk always supports
healthy, fair, and intense competition among suppliers for the common business goal and
takes a firm stance against any illegal or unethical behavior in competition.

In addition, Vinamilk always expects suppliers to respect the Code of Conduct and business
ethics, comply with the law, and ensure that the products and services they provide to
Vinamilk meet the standards.

VINAMILK action

"In addition to our product focus, Vinamilk has been investing heavily in sustainable
practices and community outreach. We've invited people to visit our facilities to see how we
produce our products. Our annual 'Vietnam Rising Milk Fund' and 'School Milk Program'
have been providing nutritious milk to millions of children for years. And during the COVID-
19 pandemic, we launched a campaign to support children's health, donating milk and
funds to a children's vaccine fund.
Partner and investor

At Vinamilk, we value mutual respect and transparency in all our relationships. Whether it's
our partners, investors, or shareholders, we're committed to protecting their interests and
providing them with the information they need to make informed decisions. We believe that
by fostering trust and transparency, we can build long-lasting and mutually beneficial
relationships

We are committed to providing accurate and transparent financial reports that comply
with all relevant laws and regulations. Our financial statements are prepared in accordance
with applicable accounting standards and our internal policies. We conduct regular internal
and external audits to ensure the integrity of our financial reporting. Our annual reports
provide detailed information about our financial performance and are made available to all
shareholders. We believe that transparency is key to building trust with our investors and
stakeholders.

TRIẾT LÝ KINH DOANH

Vinamilk mong muốn trở thành sản phẩm được yêu thích ở mọi khu vực, lãnh thổ. Vì thế chúng tôi tâm niệm
rằng chất lượng và sáng tạo là người bạn đồng hành của Vinamilk. Vinamilk xem khách hàng là trung tâm và
cam kết đáp ứng mọi nhu cầu của khách hàng.

Chính sách chất lượng

Luôn thỏa mãn và có trách nhiệm với khách hàng bằng cách không ngừng cải tiến, đa dạng hóa sản phẩm và
dịch vụ, đảm bảo chất lượng, an toàn vệ sinh thực phẩm với giá cả cạnh tranh, tôn trọng đạo đức kinh doanh
và tuân theo luật định.
Our business philosophy is centered around our customers and their needs. We strive to provide
high-quality, safe, and affordable products while adhering to the highest ethical standards. By
continuously improving our products and services, we aim to exceed our customers’ expectations.
Our commitment to quality is reflected in our strict adherence to food safety regulations and our
dedication to ethical business practices

4. Objective ( Thiên Phú )

Continuing to maintain the No. 1 position in the Vietnamese market and moving towards the
goal of becoming one of the Top 30 largest dairy companies in the world in terms of revenue,
Vinamilk has determined a development strategy with 3 main pillars to be implemented, including:
 - Leading in innovation and high applicability: Focusing on the dairy industry and dairy-
related products, which is the core business that creates the Vinamilk brand.
- Consolidating the leading position in the Vietnamese dairy industry : Focusing on high-end
product segments with high added value, especially in urban areas.
- Becoming the most valuable dairy company in Southeast Asia : Continuing to penetrate new
export markets with a strategy of transforming the traditional commodity export model into
forms of deep cooperation with distribution partners in new key markets.
II. SWOT ( Thiên Phú )

STRENGTH WEAKNESS
● Well-established brand ● Vinamilk has not been able to
● Effective marketing strategy control its raw materials
● Extensive distribution network ● Vinamilk's powdered milk market
● Advanced Technology Application share is not high yet.
OPPORTUNITIES THREAT
● The government is supporting raw ● Competitors
material supply, imported raw
materials have low tax rates.
● High-potential and high-demand
customers
● Customers need to consume quality
and healthy products.

STRENGTH
● Well-established brand
○ Vinamilk has established a strong brand since its inception in 1976.
○ From 1995 to 2009, Vinamilk was recognized by consumers as one of the top 10
high-quality Vietnamese brands.
○ As the largest dairy company in Vietnam with a market share of 37%, including
45% of the liquid milk market, 85% of the condensed milk and yogurt market.
○ The brand has a wide global reach, covering regions such as Asia, Europe,
North America, and Australia.
● Effective marketing strategy
○ The utilization of diverse advertising channels (TV, radio, television, social media, etc.)
has helped Vinamilk reach a large customer base.
○ Establishment of scholarship funds such as the "Quỹ sữa vươn cao Việt Nam" or
"Sữa học đường".
○ Development of a dedicated department for product research and development to
maximize customer satisfaction.
● Extensive distribution network
○ Vinamilk has a distribution network with over 140,000 retail outlets and 240
distributors across 64 provinces and cities.
○ The company has built a multi-channel distribution system encompassing retail stores,
wholesale outlets, supermarkets, and e-commerce platforms.
○ Vinamilk has exported its products to over 40 countries worldwide, including
demanding markets such as Japan, Canada, Australia, and the United States.
 ○ In 2019, Vinamilk increased its ownership in GTNFoods to 75%, indirectly owning 51%
of Moc Chau Milk.

● Advanced Technology Application

○ Vinamilk applies European production technology with international standards such as
ISO 50001:2011 and HACCP.
○ Machinery and equipment at Vinamilk are imported directly from European countries
like Italy, Switzerland, and Germany to ensure product quality and high production
speed.
○ Vinamilk is also the only manufacturer in Vietnam currently effectively applying Niro
spray drying technology imported from Denmark.

WEAKNESS
● Vinamilk has not been able to control its raw materials
○ Domestic raw materials can only meet about 30% of our production needs, while the
remaining 70% is imported from New Zealand, the United States, Europe, and Japan.
 ● Vinamilk's powdered milk market share is not high yet.

OPPORTUNITIES
● The government is supporting raw material supply, imported raw materials have low
tax rates.
○ The government supports the Vietnamese dairy industry through preferential policies
and reduced production costs.
○ This opportunity helps to reduce the cost burden and promote the development of the
domestic dairy industry.
● High-potential and high-demand customers
○ The demand for milk is increasing steadily, driven by its nutritional value and its use in
beauty and cooking.
○ On average, each person consumes 14 liters of milk per year. Vietnam has a young
population, with children accounting for 36% and an average annual population
growth rate of 1%.
 ● Customers need to consume quality and healthy products.
○ Organic products and a commitment to food safety can help build trust and retain
customers.
○ Customers have a demand for high-quality products that are beneficial to their health.

THREATS
● Competitors
○ The growth of new milk brands and imported milk is on the rise.
○ Competitors such as TH True Milk, Nestle, Dutch Lady, Abbott, and other foreign
brands are creating intense competitive pressure in the industry.
○ Potential risks include a decrease in milk product diversity, difficulty in retaining loyal
customers, and losing milk market share to competitors...
III. FIVE FORCES ( Gia Hân, Minh Ngọc)

1. Rivalry among existing competitors

VNM is facing relatively high competition in the dairy industry with internal signals and
exceptional inputs. We can mention a number of competitors that are creating strong
competitive pressure for VNM, including: TH True Milk, FrieslandCampina, Abott, NutiFood,
Mộc Châu Milk,...

Brand TH True Milk Dutch Lady Mộc Châu Milk NutiFood

(FrieslandCampi
na)

Characteristics TH True Milk Dutch Lady has Moc Chau Milk is Nutifood is
focuses on pure a long history in a famous fresh famous for its
fresh milk, with a the Vietnamese milk brand from nutritional
commitment to market with milk the Moc Chau products and
natural quality products for highland, the formula milk for
and does not use children, product is of children and the
growth powdered milk high quality and elderly. The
hormones or and fresh milk. affordable, quality of
preservatives. Dutch Lady's especially Nutifood's
The quality of TH quality is suitable for the nutritional
True Milk's milk considered domestic products is
is highly stable and market. highly
appreciated, meets appreciated,
especially for international with
the freshness standards. international
and naturalness standards.
of the product.

Compared to TH True Milk has Dutch Lady has Moc Chau Milk Nutifood
Vinamilk an advantage in strong has an specializes in the
the premium and international advantage in nutritional
organic fresh experience, but fresh milk product
milk segment, in the domestic quality, however segment, while
but Vinamilk is market, Vinamilk Vinamilk Vinamilk is more
 more diverse in has the dominates in diverse and has
its product advantage of scale and a great
portfolio and domestic product diversity advantage in
dominates more production and from fresh milk, scale.
market a broader powdered milk,
segments. distribution yogurt, to other
network, as well dairy products.
as a more
diverse product
portfolio.

2. Threats of New Entrants

The threat from potential competitors of Vinamilk is very low. Reality shows that the barrier to entry
in the dairy industry is quite high, new businesses need to have huge costs to research product
quality, build brands, establish distribution channels,... so it will not be easy to participate in this
business. Vinamilk can take advantage of economies of scale to reduce production costs and
product prices, thereby putting pressure on competitors.
3. Suppliers Bargaining Power
- Vinamilk also promotes the construction of dairy farms in Vietnam, moving towards
autonomy in liquid milk supply. Currently, the business owns 12 of Asia's largest international
standard farm systems, with a herd of 130 thousand cows. This farm system provides from
950 - 1000 tons of milk to Vinamilk per day.
- However, to ensure the input source of liquid milk, Vinamilk still has to cooperate with small
dairy farmers. These farmers do not have advanced cow care techniques and are mainly
amateurs, so the quality of milk is uneven, putting them at many disadvantages. Therefore,
in this case, the bargaining power belongs to Vinamilk enterprise.
- Vinamilk's raw materials and powdered milk supplies are mainly imported from major brands
in the world. For these foreign suppliers, Vinamilk often does not have much bargaining
power and is under great pressure, in exchange for more guaranteed input quality.
4. Customer Bargaining Power
- End customers have the ability to put pressure on Vinamilk regarding the quality of dairy
products. Fierce competition in the dairy industry leads to price differences between milk
brands. This allows customers to freely choose to use many different brands when they need
to change flavors or want to try a new brand. Consumers today are also becoming more
knowledgeable when it is easy to find complete information on the Internet about products
and compare them to make appropriate choices. This has a significant impact on Vinamilk's
total revenue because of customer considerations.
- However, customers buying goods at small stores will not affect Vinamilk's selling price too
much. Instead, large customers who are distributors, agents, and purchasers in large
quantities will have the right to negotiate prices with Vinamilk. Because distributors and
agents can directly influence the end user's decision to buy milk through advice or product
introduction. This is no small pressure, directly affecting Vinamilk's total revenue.
5. Threat of Substitutes
 - In fact, dairy products always have a fairly solid position in the market with very few other
substitutes due to the characteristics of milk as an essential nutritional supplement. For liquid
milk products, alternative products that are likely to reduce Vinamilk's market share are nut
milk, soy milk, cereal or beverages mixed with milk, etc.
- These products are developed based on the needs of end users with the desire to lose weight
and ensure high nutritional value. However, this impact is weak because substitute products
are not popular with the needs of the majority of consumers.

IV. BCG (Thảo Nguyên )

Step 1: Create a SBU portfolio and evaluate growth opportunities.
SBU : Strategic Business Unit – Đơn vị kinh doanh chiến lược

Step 2: Categorizing Vinamilk's SBUs into the BCG matrix Based on the previous knowledge, we can
classify Vinamilk's three product lines into groups within the Boston Consulting Group (BCG) matrix
as follows:

Question Mark group: Milk powder, Liquid milk Cash Cow group: Condensed milk"
: Step 3: Analysis and solution for each SBU

Milk powder
So, Nielsen found that while Hanoi and Ho Chi Minh City are big markets for milk powder, it's
actually the smaller towns and rural areas that are the real goldmines. I mean, about 50% of all
milk powder is sold there! That's huge! And get this, 70% of our population lives in these areas, with
over 3.6 million kids under 3. More than half of them use milk powder!"
Cause : So, even though Vinamilk has a pretty big 30% share of the milk powder market, most of
their sales are still in rural areas. That's interesting, right? It's like they've got a goldmine out there
that they haven't fully tapped into yet. In fact, if you look at the BCG matrix, milk powder is
actually in the question mark category for Vinamilk
Solution :"So, why is Vinamilk facing challenges in urban areas? It's because people in cities are
more exposed to international brands and tend to prefer foreign products. This intense competition
has forced Vinamilk to think outside the box. By expanding their customer base to include adults,
Vinamilk has been able to maintain its market share.".
LIQUID MILK

"Vinamilk currently boasts approximately 250 products in its portfolio. In the dairy beverage
category alone, the company proudly offers around 50 product lines, catering to the increasingly
diverse nutritional needs of consumers. Within Vinamilk's BCG matrix, dairy beverages are
classified as 'Question Marks'.

According to Phan Minh Tien, Marketing Director of Vinamilk, dairy beverages are the company's
flagship product. In addition to ensuring product quality and high nutritional value, Vinamilk will
focus on diversifying its dairy beverage line to serve customers of all ages and segments in a
selective manner.

"In parallel, Vinamilk will continue to develop its dairy cattle farm system with world-class quality
standards and scale to proactively secure a fresh, nutritious, and high-quality raw material supply.
This is a factor that will enhance Vinamilk's competitiveness in this industry, especially against
imported products," a Vinamilk representative added.
Furthermore, Vinamilk continuously introduces new products with unique innovations, covering all
segments from mid-range to premium. Notable products include 100% Fresh Milk, Organic Fresh
Milk, Fresh Pasteurized Milk with Bird's Nest, and more recently, Vinamilk Green Farm Fresh Milk.

Beyond launching new products, Vinamilk has also upgraded its strong branded products such as
Vinamilk 100% Fresh Milk through packaging innovation, flavor diversification, and the introduction
of low-sugar and skimmed milk products to better suit market demands.

Solution:

Vinamilk needs to focus on investing in and proactively securing raw materials from organic dairy
farms and natural milk sources. Expanding the farm scale, developing cattle herds, building
factories with high-quality dairy products, and adopting new technologies are essential. The brand
image should also be refreshed through marketing strategies, thereby maintaining its reputation
and expanding its customer base."

Condense milk

"According to the Kantar Brand Foot Print 2021 survey conducted in four cities and rural areas of
Vietnam in 2020, Ông Thọ and Ngôi Sao Phương Nam are two of the top 5 most purchased brands
in the dairy and dairy product industry. Both of these condensed milk products fall under the 'Cash
Cow' category in Vinamilk's BCG matrix.

Vinamilk's condensed milk category is one of the first sweetened condensed milk lines to appear on
the Vietnamese market, and even today, it still holds a certain position in the market. For this
category, it's easy to see that the relative market share is high but the growth rate is low, so
Vinamilk needs to have a reasonable investment policy.

Solution:

Vinamilk should continue to invest, promote products targeting the mass market segment, and
expand product distribution channels."

V. New Strategy