The PESTEL Analysis of Vinamilk:

The current environment have the huge influence the performance of company. Therefore, the
PESTEL Analysis is very important for company to analyze the market.

Political Environment: Vietnam is a country with a stable political institutions (thể chế chính
trị) that facilitate doing business in Vietnam. Moreover, Vietnam is a peaceful country without
war and terrorism. Top five of happy countries in the world. The government has many policies
to support milk industry for running business. However, Vietnam is a mixed economy so
government stills play the big role in market. Vietnam government decrease the foreign trade
barrier to attract more investment. Especially the government have more tax policy to support the
milk industry.

Economics Environment: The Vietnam’s GDP trend increased day, it is a great opportunity for
business. It means that the income and life will go up and the demand to spend money is high.
However, the inflation rates is also high that mean the cost of production will increase. It will
effect on the price of Vinamilk product in market. Vietnam is a member of WTO is a big
pressure for local business to compete other foreign competitor. In addition, it is also help
company to expand the business scales and attract more foreign investment.

Social – Cultural Environment: Vietnam is a young population country; it will lead the
consumption of milk product in market. According WTO, Vietnam's average income 1300 USD
each person in 2010 and the buyer in middle class is high. Therefore, they are the important
customer that company should focus on. They will buy product not only for them but also for
their children. The demand for improving the health and beauty increased so they need a product
that can meet their satisfaction such as fresh milk.

Technological Environment: Milk Joint Stock Company Vietnam (Vinamilk) is still the leading
enterprises of the milk processing industry of Vietnam. Vinamilk leaders always factor in science
and technology; depending on funding, market demand and product structure to convert
technology investment timely. Therefore, customer will have a lot of information about company
and company can build the trust and customer’s satisfaction. It play a big role in business
therefore Vinamilk have a modern system from European countries of advances technology.
Environment factor: Company should focus on the waste disposal system in order to reduce
the pollution. They need to use reasonable, saving natural resources, develop clean energy,
renewable energy and boosting recycling, reuse and waste reduction. Company also develop
and use the safe and fresh material.

Legal factor: Vinamilk must ensure the production, which are safety and health for customer by
using modern system. Company should follow the rule of food safety. Vietnam has many
different tax rates so it will make difficult for any company. It also effect on the price decision of
company.

The average GDP growth rate in the period 2004 - 2008 is high. Whereas the population growth
was constrained led to the average level of income per capita GDP Increase year by year.

In 2008, the landmark of economic development in Vietnam has moved from the group of
countries with the lowest income to the group of countries low average income.