Issues facing the company

Market entry of many strong competitors

The source of raw materials is not stable

The export market has many risks, customers
prefer to use foreign milk

Difficulty in modern distribution channels

Reasons

Competition is getting fiercer with domestic and

international dairy brands. Vietnamese consumers
have more and more choices of dairy products
when big brands such as Nestle, Dutch Lady,
Abbott.
Vietnam has many "open door" policies, cutting
taxes on many products, including dairy products.
Reduced tax on powdered milk 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.

Despite investing in many dairy farms according to

international standards, the company's main source
of raw materials still has to be imported from
abroad. Not to mention, dairy farmers are no longer
interested in their current work due to low profits,
being forced by buyers of raw dairy cows, causing a
significant decrease in the domestic source of dairy
materials. This forces Vinamilk to compete with
many other companies that purchase intermediate
dairy ingredients.
90% of Vinamilk's export profit comes from
exporting to the Iraqi market. However, this is one
of the most unstable regions in the world, so its
export profit to this market is not as much as
expected.
On the other hand, Vinamilk's main business
product is fresh milk: food has a direct impact on
consumers' health, so the quality and nutritional
content of the product is always what users care
most about. The "foreigner" mentality of
Vietnamese consumers, preferring to use portable
foreign goods over domestic products is also one of
the challenges of Vinamilk in particular as well as
the domestic dairy industry in general.

Vinamilk is still mainly dominating the traditional

trade channels. Meanwhile, modern trade channels
(such as supermarkets, convenience stores, mini
supermarkets, e-commerce) only account for 10%
of Vinamilk's total revenue. Looking back at the
growth rate of modern trade channels in the past
time, it can be seen that if Vinamilk does not
promote distribution through these channels, it will
be easy to lose market share to other brands in the
future.
Possible solutions

Always strive to be a reputable dairy brand and test the

products closely. Avoiding thoroughly some problems
such as food insecurity, poor quality products, causing
discredit for consumer and they decide to return to use
other brands of imported milk and other portable fresh
milk. Organize programs to motivate
customers "Vietnamese people give priority to using
Vietnamese products" to contribute to promoting the
competition of domestic brands so that Vinamilk has a
good opportunity to accelerate its breakthrough,
affirming the leading brand of fresh milk in Vietnam.

The government should offer many preferential

policies to reduce the burden on Vietnamese dairy
enterprises in order to promote the development of the
domestic dairy market. The supply of raw materials
should also be supported by the government, and
imported materials also have a reduced tax rate
Vinamilk should expand and cooperate, invest with other

Vinamilk needs to focus on promoting more modern

distribution channels: supermarkets, convenience
stores, mini supermarkets, e-commerce