PROGRAM TITLE: BTEC BUSINESS

UNIT TITLE: BUSINESS AND BUSINESS ENVIRONMENT

ASSIGNMENT NUMBER: 2

ASSIGNMENT NAME: 2

SUBMISSION DATE: 28/10/2020

DATE RECEIVED: …………………………………………….

TUTORIAL LECTURER: Ms. PHAM HUONG THUY

WORD COUNT: 7,156

STUDENT NAME: NGUYEN MINH NGOC

STUDENT ID: BKC 1935

MOBILE NUMBER: 0394033049

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 I. REPORT INTRODUCTION

II.COMPANY INTRODUCTION

1. Company product/service type

2. Aims & objectives

III. PESTLE ANALYSIS

1. Political factors

2. Economic factors

3. Social factors

4. Technological factors

5. Legal factors

6. Environmental factors

IV. SWOT ANALYSIS

1. Strengths

2. Weaknesses

3. Opportunities

4. Threats

5. SWOT matrix and Recommendations

V. CONCLUSION

REFERENCE LIST
I. REPORT INTRODUCTION
1. General introduction about the topic

The existence and development of any business no matter its size or doing business in different
fields is always a continuous process in a volatile business environment. That environment
brings both favorable conditions and challenges, and potential risks for businesses. The impact of
the business environment will be positive in the sense of creating opportunities or negative in the
opposite sense is negative for the business of the business. Since then, it is required that
administrators must always monitor and research the business environment at all levels, ready to
offer solutions and strategies to promote business development.
2. An introduction to the main topic
This statement is responsible for reporting on Vinamilk's business activities, thereby providing
strategic solutions to boost corporate development. This report includes 3 main parts. The first
part is the type of product or service of Vinamilk, the purpose, and purpose of providing
knowledge about the business and its activities. The second part is to analyze the impact of the
business environment and current trends on Vinamilk's chances of success. In which there are
two main ideas, one is the critical application of the PESTLE model and the other is the critical
application of SWOT analysis. Last but not least are recommendations for the company to
capitalize on strengths and opportunities to help the company overcome weaknesses, mitigate
threats, and achieve business goals from there give conclusions and summarize how Vinamilk
operates.
II. COMPANY INTRODUCTION

Established in 1976, the Vietnam Dairy Products Joint Stock Company (Vinamilk) has rapidly
become a leading producer of dairy products in Vietnam, as well as one of the world’s top
companies. The legal name of the Company in Vietnamese is the Vietnam Dairy Products Joint
Stock Company. The registered name of the Company meeting in English is the Vietnam Dairy
Products Joint-Stock Company. The abbreviated name is Vinamilk.

With a wide range of good quality products namely: milk powder, liquid milk, yogurt, condensed
milk, and so on. Vinamilk has dominated the domestic market for 40 years now. The Dairy giant
Vinamilk penetrates over 45 countries in any region, by merging and export. Vinamilk has
become more familiar with international consumers, a brand that we can see products anywhere.

1. Company product/service type

Vinamilk is the leading nutrition group in Vietnam today, owns a system of 12 international
standard farms spread across the country, and connects to connect with 13 modern factories.
Vinamilk has a rich product portfolio, with more than 220 products on the national market and
exported to America, Canada, Germany, Czech Republic, Poland, China, the Middle East, and
Asia.
- Business areas of the Company:
• Producing and trading in canned milk, powdered milk, nutritious powder, and other dairy
products.
• Producing and trading in cakes, soy milk, and soft drinks
• Trading in food technology, spare parts, equipment, materials, chemicals, and raw
materials.
• Producing and trading in packaging.
• Producing and trading in plastic products (except for recycling plastic waste).

2. Aims & Objectives

- Vision: To become a world grade brand in food and beverage industry, where people put all
their trust in nutrient and health products. (Vinamilk, 2015)

- Mission: To deliver the valuable nutrition to community with our respect, love and
responsibility. (Vinamilk, 2015)

2.1. Aims

Vinamilk sets a long-term goal of maintaining the No.1 position in the Vietnam market and
aiming to reach the Top 30 of the World’s Largest Dairy Companies in terms of revenue,
Vinamilk has identified a development strategy with three main pillars for execution, including:

• Leading in highly applicable innovation

 • Consolidating the leading position in Vietnam’s dairy industry

• Becoming the most valuable dairy company in Southeast Asia (Vinamilk, 2015)

2.2. Objectives

Besides the long-term goals, Vinamilk also outlines short-term strategies such as:

- Property investment plan:

• In the period of 2018 - 2023, the turnover of USD 9 billion is reached.

• Maintaining the annual dividend distribution for Shareholders, with the minimum dividend
rate of 30% of par value.

- Corporate governance:

• Become a business with a recognized professional structure and governance.

• Become a business with a work environment where employees can maximize their
potential, contribute to overall achievement, and become one of the top businesses that
employees consider to be ideal job.

• In addition, Vinamilk connects the processing industry with the development of raw
material areas in order to increase the independence of raw materials in the present and the
future.

- Product development

• Be at the forefront in innovation, creativity, high applicability with the research and
development strategy of many new products to innovate, expand, and diversify the product
portfolio. (quantri123, 2019)

• Strengthen its leading position in the dairy industry in Vietnam. The strategy is to expand
penetration and cover rural areas with mainstream product lines, where growth potential is
still very large. Then continue to build a large and strong domestic distribution system,
 increase market share, and maintain Vinamilk's leading market position. Promote a focus
on high-end product segments with many added values, especially in urban areas.
(quantri123, 2019)

III. PESTLE ANALYSIS

In this part, the PESTLE Analysis will be applied for Vinamilk.

1. Political factors

The first factor is Political Factor. In this factor positive and negative impacts will be
demonstrated.

a. Positive impacts

Vinamilk is the first Vietnamese dairy enterprise successfully registered in the list of
organizations permitted to export milk to the EAEU region - the common market of 5 countries
including Russia, Belarus, Armenia, Kazakhstan, Kyrgyzstan and is a trading region economic
growth is quite a good ratio. Therefore, it is not only a domestic company but also an
international company with higher brand awareness and reputation.

In terms of tax policy, it can be seen that the import tax on milk is between 5% and 10% and will
probably continue to increase in the near future while increasing Vinamilk's competitiveness
with imported milk. This will be an advantage for businesses. In particular, the government has
many tax policies to support dairy enterprises including Vinamilk to overcome difficulties
affected by the COVID-19 epidemic as the government approved VND 2,000 billion for dairy
development projects. up to 2020. In addition to the applied measures, they are to restructure the
repayment term, exempt from interests and fees; to suspend the payment of social insurance
premiums, and exempt unemployment insurance premiums; The price of input materials for
production did not increase in the first quarter and second quarter of 2020. (Bao Dau Tu,2020).
Besides, according to the Law on Value Added Tax 2008, milk and most agricultural products,
All social services have to pay a value-added tax of 8%. (ACAMEDIA, 2020) Therefore,
Vinamilk can easily produce and sell its products, helping the Group to grow stronger.
b. Negative impacts

Vietnam Dairy Products Joint Stock Company - Vianmilk is one of the enterprises determined by
the General Department of Taxation according to strict criteria with taxable collection under the
provisions of the Law on Corporate Income Tax to ensure compliance with the Law on
Enterprises. According to Vinamilk, over the past years, the company has always been in the top
group of enterprises paying the largest corporate income tax in the country. Specifically, in 2017,
the company paid 4,231 billion dongs and in 2018, the company paid 4,258 billion dongs.

Besides, not only Vinamilk but also recently many businesses have been fined for tax violations.
Most of these businesses have submitted additional supplements under the decision because the
delay mainly comes from the error of papers and records. Specifically, in 2017, Vinamilk is
subject to tax arrears through inspection of the amount of corporate income tax amount of 4.8
billion VND. Penalty for incorrect declaration leading to lack of tax amount of 960 million VND.
Due to differences of opinion between the company and the tax authority over deductible
expenses in determining taxable income, additional taxes are incurred.

2. Economic factors

The second factor is Economic Factor. In this factor positive and negative impacts will be
demonstrated.

a. Positive impacts

Despite the difficult times, the Vietnamese economy still has a relatively good resilience.
According to IMF's forecast, Vietnam's GDP in 2020 is estimated at 340.6 billion USD,
surpassing Singapore with 337.5 billion USD and Malaysia with 336.3 billion USD. According
to the Asian Development Bank (ADB), Vietnam's economic growth in 2020 will be 1.8%. (Tap
chi tai chinh, 2020) In the future, the Vietnamese economy may recover faster, continue to grow,
positively impact domestic purchasing power to create favorable conditions for consumption
milk of Vinamilk. In addition, Vietnam is also a member of the WTO, which helps the company
to expand its business and attract more foreign investment. (Prezi, 2017)
In response to the Covid-19 epidemic, the State Bank of Vietnam has lowered the interest rate
for the fourth time in 2020. Specifically, in Decision No. 1728, the refinancing rate has been
reduced from 4.5% / year. year to 4.0% / year. (ForbesVietnam, 2020) In that context, Vinamilk
has received much-needed and timely support, creating favorable conditions for businesses to
have cash flow to restore production.

In terms of inflation, by 2020, Vietnam's GDP will increase by 3%, manufacturing and services
sectors gradually recover; Vietnam's GDP growth in 2019 will reach 7.02% compared to 2018.
(Tap chi tai chinh, 2020) Vietnam's GDP trend is increasing, which is a great business
opportunity. This means that the income will be increasing and the need to spend money will
increase as well as the need for more attention on nutritional health. This will be an opportunity
for Vinamilk to increase its revenue, sales, and increase its market share in the dairy market.

b. Negative impacts

The trend of increasing GDP in Vietnam also means that production costs will increase. It
adversely affects the price of Vinamilk products in the market. Not only that, the problem of not
having raw materials for production and lack of workers during the Covid-19 pandemic also
affected the production process. Because the leading trading partners of Vietnam such as China,
Japan, the US, etc are limited in the supply of raw materials, the consumption market narrows
and stagnates. Therefore, Vinamilk also became more difficult.

In addition, it is forecasted that CPI for the whole 2020 will increase by 3.5% - 4% on average.
(Tap chi tai chinh, 2020) High inflation also means that production costs will increase product
costs, forcing people to cut milk consumption. This greatly affects the price of Vinamilk's
products in the market, and will have to compete on price more than domestic and foreign
competitors.

3. Social factors

The third factor is Political Factor. In this factor positive and negative impacts will be
demonstrated.
a. Positive impacts

Vietnam is a young population country, in 2020, the natural population growth rate is positive
because the number of births is more than the number of deaths to 945,967 of which 1,566,889
children are born and 620,921 people die (Vietnam's population, 2020). This will lead to more
dairy product consumption in the market.

According to the WTO, the average income of Vietnam is 2750 USD / person by 2020 and the
buyers in the middle class are high. Therefore, they are the key customers that the company
should focus on. They will buy products not only for them but also for their children. The need to
improve their health and beauty is so high that they need a product that can meet their needs such
as fresh milk. (ACADEDMIA, 2020).

In addition, Vietnam is still facing challenges such as the rate of stunting (height for age) among
children under 5 years old each year decreases by 1%, but remains high (23.2%). in 2018). The
rate of malnourished children is 28.4% in the Northern Uplands and 32.7% in the Central
Highlands. (D. Ngan, 2020) Parents increasingly care about the health and development of their
children, so the demand for fresh milk increases significantly.

b. Negative impacts

With a growing population of Vietnam, there are also increasing competitors in the dairy
industry for children and the elderly. If Vinamilk's businesses do not expand their products to
those customers, they risk losing a huge market share to competitors.

Besides, the news about milk contaminated with bacteria has affected consumers' psychology.
Since then, consumers will be cautious when buying dairy products, the risk of reducing sales of
Vianmilk products.

4. Technological factors

Next is Technological Factor. In this factor positive and negative impacts will be demonstrated.
a. Positive impacts

Vinamilk's leaders always attach importance to science and technology factors depending on
capital sources, market demand, and product structure to promptly convert technology
investments. Therefore, customers will have a lot of information about the company and the
company can build trust and customer satisfaction. It plays a big role in business therefore
Vinamilk has a modern system from European countries of advanced technology.

Vinamilk uses automatic production line technology in a closed environment to reduce the
number of workers, improve product quality, and work efficiency. The company invests heavily
in modern technology for dairy farming, using safe and fresh materials, fast high-temperature
sterilization technology, powdered milk canning technology, and supporting new equipment.
modernity in the field of product packaging diversification to ensure milk quality and attract
consumers' attention through brands and packaging. This helps Vinamilk increase efficiency in
the milk production line as well as increase its brand recognition to customers.

In addition, ISO-standard product quality management technology helps businesses save costs,
increase profits, have more advantages than other businesses, and meet customer needs. In
addition, businesses have incorporated TPM and used ERP data to streamline business processes.
(ACADEMIA, 2020)

Finally, technology helps the company to check the quantity of sold goods and inventory in stock
to have timely measures to prevent expired products, causing waste.

b. Negative impacts

However, it can be seen that Vietnam is an agricultural country, so technology has not developed
strongly. Modern machinery and equipment need to be imported from advanced countries such
as Korea, the US, Japan, and so on, so the cost is high, with very high investment. Meanwhile, its
competitor, TH True Milk, may boldly invest in machinery and equipment to make a profit
beyond Vinamilk.
5. Legal factors

This section will analyze the legal aspect. In this factor positive and negative impacts will be
demonstrated.

a. Positive impacts

To create its own brand, Vinamilk, when registering a copyright, will be established by the
trademark owner, protected by law from all infringements of other individuals and organizations,
helping consumers to distinguish. are goods and services of various production and business
individuals and organizations. In addition, in order to start a business, an enterprise must submit
a declaration and specific description of owned and intangible assets to the registry. This makes
it easier for owners to use trademarks, to transfer, inherit or contribute capital to, use them.

In addition, the company has a fixed address in Ho Chi Minh to locate its head office. This will
be the office that directly deals with products and services with customers and is listed in the
business registration license, in order to stabilize business activities.

Vinamilk ensures and complies with the standards of safe and healthy production for customers
with a modern system. The company adheres to the food safety rules that maintain the brand of
clean milk not only in Vietnam but also in other global organizations. Decree 3399 / QD - BCY:
Approving the Master Plan for the development of Vietnam's dairy processing industry to 2020,
with a vision to 2025. This policy helps to reduce raw material costs, creating a potential for
livestock farm expansion raising cows, creating a large supply, increasing competitiveness, and
proactively integrating.

b. Negative impacts

In addition, in the business process, there will be many legal problems such as transferring
projects, transferring capital, shares, if you do not understand the provisions of the law, it will be
difficult for businesses to implement and miss out. tax incentives, business land lease.

The change of legal policy poses a series of requirements for businesses. Failure to regularly
update legal standards will lead to violations of the law, causing serious consequences, the most
serious being business suspension. Enterprises will face difficulties in applying laws to maintain
effective labor relations, especially when labor disputes arise and face legal risks such as unfair
competition, infringement of property rights intellectuals, difficulties in commercial disputes, etc.

Vietnam has many different tax rates (the 2020 corporate income tax rate is specified in Article
11 of Circular 78/2014 / TT-BTC accordingly) in 2020 the corporate income tax rate is 20%.
Besides, there are tax rates of 32% to 50%, tax rates of 40% and 50%. Therefore, this will cause
difficulties for Vinamilk. Businesses will be greatly affected by increased costs and reduced
consumer demand. Therefore, the business is still affected directly to revenue and profit, thereby
affecting long-term production and business activities.

6. Environmental factors

Last but not least is Environmental Factor. In this factor positive and negative impacts will be
demonstrated.

a. Positive impacts

Understanding that Vietnam is a tropical monsoon climate, Vinamilk has been choosing suitable
locations for dairy farms. The climate is mostly hot and humid, but also has a cool temperate
climate, which facilitates large livestock production and high-quality grass growing.

Vinamilk towards an environmentally friendly image through the concept of using, reusing and
recycling materials. At the same time the company saves water through harvesting and
recirculating rainwater. At the same time they use powerful technology, renewable energy, to
help limit the adverse effects of climate change through cow farming and milk production.

In addition, consumers are increasingly aware of environmental protection, social communities,

and charity. Therefore, Vinamilk has taken certain actions to demonstrate its environmental
responsibilities such as reducing greenhouse gases and participating in environmental activities.
Not only that, the business also isolates all resources for farm residences, meeting typical
environmentally friendly packaging materials. (Prezi, 2017)
b. Negative impacts

However, with such a volatile natural environment, this is also a challenge for dairy farms. The
impact of a high temperature and high humidity environment leading to a decline in the ability to
absorb and digest feed of the cow causes a lack of nutrients for the milk production process may
not qualify. The hot and humid tropical climate heavily affects the preservation of raw fresh milk,
the fermentation of yogurt and other perishable dairy products.

The production scale is large, so Vinamilk needs to use a lot of water and wastewater discharged
into the environment is also high, so the company needs to pay for wastewater treatment in order
not to affect the environment.

IV. SWOT ANALYSIS

In this section, the report will outline the strengths, weaknesses, opportunities, and threats of
Vinamilk through the SWOT analysis model from which to propose strategies to improve and
promote business operations.

1. Strengths

According to the Vietnam Report, in 2018, the liquid milk segment of Vietnam Dairy Products
Joint Stock Company (Vinamilk) continued to lead the industry with about 55% market share. In
addition, Vinamilk also holds more than 80% market share of yogurt, more than 80% of
condensed milk market share, and more than 30% market share in powdered milk. (Tram Anh,
2019) Thanks to diversified products and widespread distribution system, it is forecasted that in
2020 and 2021, Vinamilk will gain more market share during the pandemic, profit is forecasted
to grow and develop network. strong.

Vinamilk is the leading brand in Vietnam’s liquid milk industry.

• Vinamilk milk brand, with more than 40 years of building and growing strongly,
increasingly affirms its position as the No. 1 fresh milk brand in Vietnam, with fresh milk
products not only trusted by domestic users but also exported. to the most demanding
foreign markets.
 • Being the largest dairy enterprise in Vietnam with a 37% market share, of which 45%
market share in the liquid milk market, 85% market share in condensed milk and yogurt.
Therefore, Vinamilk has the ability to set the selling price in the domestic
market.(MARKETING AI, 2020)

• Vinamilk was voted "Top 10 High-Quality Vietnamese Goods" by consumers from 1995 -
2009.

Model, product packaging

• Along with joining the world and competing domestically, design and packaging always
play an important role in the product marketing strategy. Recognizing this, Vinamilk
always tries to find suitable models with high aesthetics, attracting the attention of
consumers. And to compete during the Tet holiday season Vinamilk did not hesitate to
design and print packages to bring spring messages to consumers. The cost that Vinamilk
spent on packaging changes usually accounts for 10% of the total cost, which is not a small
number, but Vinamilk believes that the eye-catching bags have contributed to a significant
increase in revenue for Vinamilk when newly launched product. (ACADEMIA, 2020)

High-quality milk of international standards.

• Diversified products, there are many leading dairy products in Vietnam: condensed milk
Mr. Tho, Sao, Dielac, Yogurt Vinamilk ...

• Products with high quality but lower price than imported products of the same type and
possess the largest market share in Vietnam among suppliers of similar products.

• Diversified products meet the needs of all subjects. With prices suitable to consumers of
each segment. Especially, the condensed milk product line "Ong Tho and Sao" is a cheap
product, suitable to the needs and tastes of most Vietnamese people today. (MARKETING
Ai, 2020)
Extensive distribution network throughout the country.

• Vinamilk's dairy product distribution network spans the whole country and is also exported
to foreign markets, combining modern and traditional distribution channels.

• Vinamilk has now covered its distribution network in 64 provinces, over 250 distributors,
and more than 135,000 points of sale nationwide. With this large network, Vinamilk can
capture a large number of customers and ensure the introduction of new products and
effective marketing strategies across the country.

• Multi-channel distribution system: Present at all shelves in supermarkets and stores. Users
can even easily order online on websites or e-commerce sites.

• In 2019, Vinamilk increased its ownership in GTNFoods to 75%, indirectly owned 51% in
Moc Chau Milk. This action not only expands the ecosystem of Vinamilk's dairy market
but is also considered a strategic step for the company's development in the context that the
growth rate of the largest dairy enterprise in the market is trending slowdown.
(MARKETING AI, 2020)

Invest in modern and high-quality equipment and technology

• All Vinamilk's garment factories are invested in modern and advanced technology,
imported from European countries such as Germany, Italy, and Switzerland to apply in
production lines. Vinamilk is the only company in Vietnam that owns a machinery system
using Danish spray-drying technology, which ensures quality dairy products to consumers.
(MARKETING AI, 2020)

International Standard Farms

• The company invests in building organic dairy farms according to international standards,
supporting dairy farmers to be proactive in input materials. Besides, the company also has a
dairy project in New Zealand (the country that exports most raw milk to the Vietnamese
market). (MARKETING AI, 2020)
 • Vinamilk's dairy factories are located at strategic locations near the farm, allowing
Vinamilk, in addition to maintaining and strengthening relationships with suppliers, to also
ensure the purchase of fresh milk with good quality.

• Vinamilk consumes more than half of the raw fresh milk produced domestically, this is also
an enterprise capable of adjusting milk prices in the Vietnamese market.

Professional marketing strategy

• Advertising, PR, Marketing programs are very methodical and professional, highly humane,
touching the hearts of users, such as the programs of School Milk, Stand Tall Vietnam Milk
Fund, campaign " Fund of one million green trees in Vietnam "...

• Vinamilk has strong product research and development department. Vinamilk attaches
great importance to market research and user tastes, as well as sales activities of
distributors, listening to consumer feedback in many ways, making good use of the media.
Through social networks to make a brand name and thanks to that, Vinamilk provides the
best and most suitable dairy products for consumers.

• In particular, Vinamilk is managed by an enthusiastic and experienced team in the industry.

Chairman Mai Kieu Lien has 30 years of experience in the dairy industry at the company
and has played a key role in the company's growth and development to this day. The other
senior management members have an average of 25 years of experience in dairy products
manufacturing, distribution, and sales. In addition, the enterprise also has a strong and well-
equipped middle management team to support senior managers while energizing the
company's youth and enthusiasm for the development career. (MARKETING AI, 2020)

In terms of finance, while many businesses are facing difficulties because of loan interest,
Vinamilk has a relatively safe capital structure and good financial autonomy. In addition, the
indirect acquisition of Moc Chau milk also contributes to enhancing and expanding the
company's financial capital. (MARKETING AI, 2020)
2. Weaknesses

Businesses can operate from identifying their own strengths and weaknesses to offering other
solutions to improve and overcome. The same is true of Vinamilk, even though it is known for
its outstanding development in the dairy business, it cannot be without defect.

First, about the brand of Vinamillk. Despite penetrating international markets and having a firm
foothold in the dairy industry, Vinamilk still has not had a strong message confirming its
advantage and prestige to consumers. This leads to customer competition among other firms
losing potential customers, and the consumption deficit of Vinamilk products is not small.

Second, Vinamilk also depends heavily on foreign supplies for 70% of raw materials. Due to
increasing consumer demand for fresh milk, domestic raw materials only meet about 30% of
production demand, while 70% is imported from New Zealand, the US, EU, and Japan.
Therefore, input costs increase and product costs also increase. However, Vinamilk is also
promoting the development of raw material areas to serve the increasing demand of the local
people.

The company's market share for powdered milk is still not high. With increasing demand from
users and competition from foreign milk brands, imported from the UK, US, and the Netherlands,
Vinamilk no longer holds a monopoly position in the dairy market. . According to the report, in
Vietnam, imported milk accounts for 65%, Vinamilk 16%, Dutch Lady 20%. (MARKETING AI,
2020)

Finally, the company's marketing activities are mainly concentrated in the South while marketing
activities in the North of Vietnam are still weak. This can lead to the gradual loss of Vinamilk's
market to competitors such as Dutch Lady, Abbott ... 30% of the company's revenue is from
exports, and the main markets are Iraq, Cambodia, and some countries. other. Unrest in Iraq may
cause export sales to this market to decline. (ACADEMIA, 2020)

3. Opportunities

At the same time, Vinamilk has many opportunities to develop the dairy market and increase
revenue for the company. Government development budget for the dairy industry (2000 billion
approved for dairy development projects up to 2020). In addition, the demand for dairy products
in Vietnam has grown steadily. Along with the development of the specific economy, the per
capita income increased by 6% / year, leading to the increase in purchasing power, consumers
paying more attention to health and using more dairy products.

Stable material supply

• Currently, the Government has introduced many preferential policies to reduce the burden
on Vietnamese dairy enterprises to promote the development of the domestic dairy market.
Strengthen price competition with imported goods. Import tax on dairy materials in
Vietnam is lower than according to WTO commitments. This is a good opportunity to help
businesses reduce production costs. Because currently imported milk powder accounts for
75% of the raw milk in Vietnam.

Large market

• The demand for dairy products of Vietnamese people is huge. On average, the consumption
of milk per person is 14 liters per year. This is considered a great opportunity and potential
for Vinamilk to reach out in the dairy industry. In addition, Vietnam is in the period of
golden population, so the demand for milk is huge, Vinamilk is currently the No. 1 fresh
milk brand in Vietnam, so there will be many opportunities to grow and expand market
share.

Competitors are gradually weakening and Vietnamese thinking about using milk is changing.

• The campaigns "Vietnamese people use Vietnamese goods" contributes to promoting the
competition of domestic brands, including Vinamilk. This is a good opportunity for
Vinamilk to accelerate its breakthrough, affirming the No. 1 brand in fresh milk in Vietnam.
(MARKETING AI, 2020)

Increased barriers to entry reduce competition

• Industry entry conditions include industries that enter costs, product characteristics, and
distribution channels. For the cost of re-joining, there are many different accounts:
 advertising, market research, and development. To attract customers, the newly born dairy
firms have to invest in this large company, which also makes Vinamilk withstand great
pressure if there is no strategy at that time.

• One more point, the new product wants distribution channels to have a strategy to convince
them. Not a big dairy company, the import field will be easier, but the competitive pressure
is still quite large.

4. Threats

Finally, several threats may affect Vinamilk's operations and development.

Vietnam becomes a member of the WTO and the tax rate on dairy products is lower and more
and more foreign brands enter the Vietnamese market.

• The first challenge to mention is the increasingly fierce competition with domestic and
international dairy brands. Vietnamese consumers have more and more choices about dairy
products when big brands such as Nestle, Dutch Lady, Abbott, "landed" in Vietnam.

• Vietnam has many "open door" policies, cutting taxes for many items, including dairy
products. Reducing powdered milk tax from 20% to 18%, condensed milk from 30% to
25%. This is a great opportunity for foreign businesses to penetrate the Vietnamese market,
opening up many choices for consumers.

Fluctuations in raw material prices from foreign sources cause unexpectedly high raw material
costs.

• Although investing in many dairy farms according to international standards, the

company's main raw materials still have to be imported from abroad. Not to mention, the
dairy farmer is no longer salty, but with his current job, due to low profit, being pressed by
the collectors of raw milk, making the domestic source of raw milk significantly reduced.
This forces Vinamilk to compete with many other enterprises that buy other intermediate
milk materials.
Increasing demand for alternate milk and dairy products

• Given the needs of customers as well as the development of dairy technology, whole cow's
milk is no longer a top priority. Dairy companies also research and launch alternative
products such as fruit milk, seed milk ...

• Besides, soft drinks and soft drinks brands are also researching to add milk to the
ingredients. These are the enormous competitive pressures that threaten Vinamilk's
products, forcing the company to diversify and enrich its products.

Pressure comes from suppliers

• In Vietnam, the current supply of cow's milk to the market is 85% from small households;
only 5% is obtained from large farms. This makes the quality of milk of the brands not high.
And to solve this problem, Vinamilk has its own dairy farm.

5. SWOT MATRIX AND RECOMMENDATIONS

SWOT MATRIX

SWOT matrix analysis can be said to be a quite famous model in enterprise analysis and
marketing strategy direction for different large and small businesses. In this section, the report
will provide an analysis of Vinamilk's SWOT matrix model to help businesses plan or strategies
to understand their weaknesses, strengths, risks, and opportunities, from which to Enterprises can
make the most of opportunities, develop strengths and limit weaknesses, and avoid unnecessary
risks.

S W
1. The equipment and 1. Vinamilk is still dependent
production technology of on the import of powdered
Vinamilk are modern and milk materials from abroad.
advanced according to 2. Marketing activities are
international standards. mainly concentrated in the
 2. Vinamilk has a stable South, while the North has
supply and high quality. not been invested heavily.
3. Vinamilk owns an extensive 3. The market share of
factory network in Vietnam powdered milk is not high
and a competitive and cannot compete with
distribution network. imported powdered milk
4. Vinamilk has a Strong products.
brand name, strong finance,
large market share, and a
rapid growth rate over the
years.
5. Vinamilk has A team of
managers capable and a
marketing and sales team
with experience analyzing
and determining
consumption.

O SO WO
1. The Vietnamese economy - The strategy to - Invest in marketing to
has a high growth rate. develop the vending improve the market
2. Vietnam officially joined machine: the company share of powdered
the World Trade will launch the first milk.
Organization. (WTO) automatic milk - Investment in storage
3. Competitors weakened. vending machine in technology transport.
4. Vietnam is a country with a Vietnam.
stable political regime and - Mixed diversification
an open legal system. strategy: Entered the
5. The government has production of
preferential policies for the functional foods.
 dairy industry. - Take advantage of
6. The population is growing finance to expand the
rapidly, potential customers market.
are high, and demand is - Improving product
strong. quality.
7. Advanced dairy - Investing in
development and support communication,
technology. improving consumer
reliability.

T ST WT
1. High inflation, high-interest - Be active in financial - Vinamilk is under the
rates, and rising raw resources to limit the impact pressure of high input material
material import taxes. of both inflation and interest. costs.
2. Unable to take the initiative - Improving the quality of - Vinamilk is at risk of losing
in raw materials. marketing products to market share
3. The appearance of many compete.
competitors leads to - Provide better service,
increased competitive higher product quality to meet
pressure. customer needs.
4. Pressure from customer and - Price stabilization strategy:
supplier needs. limit product price increase.
- Utilize and consolidate the
source of raw fresh milk in the
country.

RECOMMENDATION

To achieve the set targets, Vinamilk needs to work out specific strategies to promote the brand,
product sales, and market share of the business, which are increasingly popular and trusted by
many consumers. Below are some strategies outlined to help Vinamilk improve and promote the
development of the business.

Personnel Strategy

The labor force is the main factor determining the efficiency of production and business of
enterprises. To achieve the above results, Vinamilk needs to have appropriate policies to train a
specific workforce. First of all, Vinamilk needs to recruit skilled workers who have a sense of
learning and creative experiences in product innovation. Encourage employees to strive to
improve their skills and exchange experiences for mutual progress.

Next, the company needs to have a policy of remuneration for employees in a reasonable manner,
in accordance with the qualifications of each employee. The company always ensures salaries,
insurance, bonus holidays for employees as well as celebrates birthdays, parties, or travel for
employees to create bonds and intimacy among colleagues. Doing so will motivate employees to
improve their capacity to improve work efficiency.

In addition, the company needs to regularly open free classes to improve the skills of its
workforce for both new and senior employees. In addition, the company needs the training to
improve the management skills of the company's leaders, especially sales, marketing, etc.
Because when the manager is capable, they will know how to arrange the right people with the
right jobs to work effectively.

Marketing Strategy

For marketing activities, the company needs to expand advertising and marketing in the North,
small urban and rural areas. Vinamilk needs to video ads play on TV, YouTube, Instagram, and
Facebook; put advertising panels in central positions, gathering many people, and hang large
banners at retail stores. There are many stalls to try products in supermarkets and large markets.
At the same time, Vinamilk needs to expand and diversify its products and further innovate in
designs. For example, instead of the regular rectangular paper box, it is possible to do other
shapes like cylinder, square to meet the different needs of customers, thereby gaining more
market share in the dairy market.
Besides, Vinamilk has to continuously measure the fluctuation of sales, purchasing power,
payment level, and satisfaction of customers after each price adjustment to have a suitable price
strategy. Closely monitoring the sales situation, and forecasting the brand's output, to propose
timely assistance in managing common resources, raw materials, etc to serve the general
business situation of the brand. Vinamilk also needs an independent agency to inspect the quality
of milk and announce the quality of milk to consumers. With such an agent, consumers know
which milk is good to buy. When the quality of milk is made public, the price level will be stable.

Product development strategy

In order to improve and diversify the dairy product portfolio, Vinamilk can produce nuts such as
walnut milk, macadamia milk, corn milk, and so on, or banana milk flavor, which is also one of
the currently current favorites. People care more about health these days, so businesses can use
healthy ingredients like diet sugar, oats, whole grains, brown rice, and rye to feed their
ingredients upcoming products. Towards a healthy life and comprehensive development,
Vinamilk will receive increasing attention, attention, and strong development in both the
Vietnamese and international markets.

V. CONCLUSION

In conclusion, this report gives two models of analysis PESTLE and SWOT from indicating
positive and negative factors from the macro-environment; strengths, weaknesses, opportunities,
and potential dangers from a micro-environment can effect and affect Vinamilk's operations from
there, giving solutions and specific strategies to improve negative problems and reduce hazards.
At the same time, taking advantage of the strengths and advantages of existing associations to
promote the business to grow and achieve their goals quickly. The strategies not only help
Vietnam Dairy Products Joint Stock Company - Vianmilk will solve the difficult problem but
also enhance the brand, maintain and maintain its position in the dairy and beverage enterprise
market.
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