porter's five forces of TH True Milk

TH True Milk was born in 2010, and has been operating for more than 5
years now, but the popularity and attractiveness of this milk line is
undeniable. That success is thanks to TH's smart strategies based on the
analysis of the company's industry environment (operating environment).
The industry environment (the operational environment) is the most
complex and also has the most impact on competition. Changes can
happen frequently and it is difficult to accurately report. Unlike the macro
environment, the industry environment is not synthesized from regulations
and rules that are specific to a certain time.

Together these five competitive forces determine the intensity of

competition and the level of industry profitability. The strongest force will
dominate and become crucial from a strategic point of view.
 3. Potential competitors. The entry of new entrants directly reduces the
nature of competitive scale by increasing production capacity and volume
of production in the industry. The appearance of new competitors has the
potential to cause strong shocks to existing businesses because usually the
latecomers often have many bases for decision-making and their tactics are
often unfair. suspect.

With TH True Milk, in addition to "old" competitors such as Vinamilk,

Moc Chau, Dutch Lady, in 2013, TH had to face another new competitor,
Love'in Farm - international quality domestic fresh milk, creating many
high-quality products with advanced nutritional formulas, rich and creative
flavors, thereby bringing inspiration to Vietnamese people to drink milk.

Entering later, their ideas are formed in the process of watching,

witnessing, analyzing the moves and strategies of the previous
competitors. Therefore, Love'in farm also offers very creative and
effective strategies, as in addition to the factors that make consumers feel
secure in terms of quality, price ... the product has hit the psychology.
Ages and direct users - children. By printing on milk cartons very funny
cartoon characters such as superman, farmer, baby ... Each character is
transformed into a Attractive short story, fighting with destructive forces
to protect the farm, this not only attracts children to drink milk but also
teaches them lessons about solidarity, tolerance, and helping each other.
written on milk cartons. This strategy yields good results for Love'in farm.
At retail stores, supermarkets. Love'in Farm's Kun milk has a fairly
balanced market share compared to other brands. This really puts great
competitive pressure on other milk brands including TH.

In order to fight against competitors, TH needs to implement product

differentiation strategies, constantly improve quality, add new features of
products, constantly improve and perfect products to make them better. for
their products to have distinctive or outstanding features in the market, or
strive to reduce production and consumption costs .

4. Pressure of suppliers.
As a supplier of inputs to the production process, the power of the supplier
is expressed through pressure on the price of raw materials.

Currently, TH true MILK has been applying a closed cycle of producing

clean fresh milk of international standards, so from not breeding cows,
only the best cow breeds from New Zealand, USA, Google Canada have
been selected since 2014. singing Log Import all 13 are dairy cows from
New Zealand and Australia. TH choose to import mainly fertilized and
pregnant cows to return to Vietnam after a few months of acclimatization,
the cows can produce milk to give birth to the first generation from now to
the end of the year. true MILK continues to work 3 times 1 combined with
calves born on the farm will increase the total number of herds to 40 years
in 2013. So the problem of dairy cow suppliers for the farm photo greatly
affect the activity of TH True Milk. But in 2011 the government at least
invested 100 million USD in the group's TH True Milk dairy project,
which is a source of TH's supply.

However, in the financial plan of TH true Milk until 2013, this dairy
project will have a record debt of 10 thousand seven hundred billion dong,
equal to 65% of the total investment capital of the whole project. This loan
balance increased by about 4,400 billion national billionaires in 2012. All
data is short-term loans, the ratio of short-term loans to total capital of TH
true MILK from now to 2017 is 42.3% on average. TH true Milk will
gradually reduce this debt to 2472 billion by 2050. This is also the
challenge TH must overcome, besides all the successes, it was previously.
The source of imported cow feed ingredients. Totally now More than two
thousand hectares have been cultivated with sorghum grass and corn
(imported from the US) promising very good results. High technology has
helped to improve the efficiency of farming, making One hectare of land
here previously only yield an average of about 70 million VND per year,
now, thanks to the cultivation of sorghum with the application of high
technology. harvested from 500 million to 1.5 billion dong / year, meeting
enough food sources for the farm's cows . In the future, TH looks forward
to the possibility of providing for his own farm. This will reduce negative
pressures from suppliers, reduce input costs for production, reduce product
costs, and increase competitiveness.

5. Pressure from buyers.

Buyers compete with the industry by forcing prices down, bargaining for
better quality and greater service, and pitting competitors against each
other. All of these damage the profitability of the industry in general and
of enterprises in particular

In the world milk is already a daily necessity, but in Vietnam the number
of children drinking milk every day is very small. Fresh milk consumption
in Vietnam is still very low, about 5.8 liters / person, while Thailand is 30
liters / person Singapore 45 liters Malaysia 44 liters while domestic fresh
milk production only meets about 22-25 %. consumption demand. Thus,
the number of customers for the fresh milk industry is still very large,
which means an expanded market for TH True Milk. TH true milk
currently has a loyal customer base, but there are still many customers who
want TH true milk to have after-sales promotion policies ... TH true milk
understands that desire and has been implementing these opportunity to
get closer to consumers. In the near future TH True MILK will launch a
manga series Conquer the Universe created and designed by a professional
Japanese manga partner. The story book is not a promotional item, but a
meaningful gift for children only. The content of the story is attractive and
suitable for the tastes of young children but contains a deep humanity and
education. It helps children develop their imagination, thinking ability and,
above all, nurtures beautiful and happy dreams and ambitions for peace
and for "Vietnamese stature".

6. The appearance of substitute products

The introduction of substitute products is inevitable to meet the

fluctuations of market demand towards more and more diversified, richer
and more advanced and This in turn reduces the competitiveness of
substitute products. The competitive factors of substitute products are
shown in.
Price,
Quality
Taste
Culture
Dairy products are nutritional supplements in addition to daily meals, for
children, adolescents and middle-aged people - milk has great health
support effects. The pressure on new products in this industry is not much,
due to the peculiarity of milk as an essential nutritional supplement. In the
market there are many kinds of cereal powder, health-promoting drinks ...
but these products in terms of quality and nutrition cannot completely
replace milk. However, there will be competition among the products in
the industry for market share ... yes Dairy products are nutritional
supplements in addition to daily meals, with children, adolescents and
middle-aged people – Milk has great health benefits. In the market there
are many kinds of cereal powder, health-promoting drinks ... but these
products in terms of quality and nutrition cannot completely replace milk.
Currently, there are many types of products that compete with dairy
products such as green tea, coffee cans, soft drinks, etc., which can reduce
the market share of dairy products. However, due to the cultural and health
characteristics of Vietnamese people, no product can completely replace
milk. The characteristics of substitute products are unexpected and
unpredictable, so despite being in a high position, the dairy industry still
faces pressure from substitute products. Therefore, the dairy industry must
always try to improve its products to suit the tastes of consumers

7. Pressure of current competitors in the industry. Determining the current

competitors of TH true milk:
* Competitive structure
● By market share, Vinamilk and Dutch Lady are currently two large dairy
companies in the country, occupying a very large market share. Imported
milk from firms such as Mead Johnson, Abbott, Nestle .. accounts for
about 22% of the market share, with the main products being powdered
milk. The remaining market share belongs to over 20 small-scale dairy
companies such as Nutifood, Ba Vi ...

Powdered milk is currently the most fiercely competitive segment between

domestic and imported products. In the powdered milk market, imported
milk accounts for about 65 % of the market. Vinamilk and Dutch Lady
currently hold 16 % and 20 % market shares respectively.
Currently, domestic dairy companies are still under increasing competitive
pressure due to the reduction of tax on imported milk according to
Vietnam's tariff reduction policy when realizing the CEPT / AFTA
commitments of the region. ASEAN and its commitment to the WTO
trade organization

The condensed milk and liquid milk market segments are mainly held by
domestic companies: Dutch Lady and Vinamilk hold significant market
shares.
In Current
Competitors Vinamilk
Dutch Lady Dairy Company