TH TRUE MILK

Group exercise 4
1. Finalizing the SWOT model
a. Strengths
- The advantage of starting point: TH True MILK has been invested methodically from the
very beginning, including:
 Capital is provided stably from Bac A Commercial Joint Stock Bank
 They have the largest and most advanced factory and farm in Southeast Asia
 The production process is smoothly coordinated from mass farming to widespread
distribution
 High brand awareness and coverage- The company also has more than 140,000 retail points
and traditional sales channels 
>> T herefore, TH true milk  is known as the "dominant" of the clean milk market in Vietnam.
- Advantages of clean milk brand- bring the best product quality to customer:
 The strength of TH True MILK is that it has an extremely environmentally and socially
friendly organizational culture. The company's slogan is "True Happiness" - True Happiness,
wishing to bring the best product quality to its target customers. 
 05 core values of TH’s products, bringing consumers closer to them:
 For public health
 Entirely from nature
 Fresh – Delicious – Nutritious
 Environmentally friendly. Out-of-the-box thinking
 Harmonize interests
>> Brand awareness of TH is 85% ( 8-9 over 10 people were asked knowing about TH True
Milk)
- Brand for the community:
TH True MILK has participated and built voluntary projects to contribute benefits to the
community such as giving cows to the poor, awarding scholarships to students, establishing
farms and factories to help create more jobs for local people, and annual milk donation to areas
with many poor households… TH True MILK is also a sponsor for other community projects
such as the project of sponsoring millions of glasses of milk for voluntary blood donors on Red
Sunday…
b. Weakness
High Cost 
In order to produce the best batch of dairy products, TH True Milk has spent a "super big” cost
to use modern technology and machinery in the dairy farm. Estimated operating costs for TH
True Milk's production activities are up to thousands of billions of dong per year. 

High Price
Right from the start, the product price of TH True MILK was much higher than that of other
dairy ands. This will create a weakness for TH True MILK in competing in the domestic dairy
market with other big brands such as Vinamilk, Moc Chau…The higher price also reduces the
ability to reach the middle and low-income customers in Vietnam.

There are a lot of dairy brand in the Milk Market 

Currently in Vietnam, the dairy industry is developing very strongly, there are many milk
brands with different prices for consumers to choose from. Further, with a huge number of
products being sold on shelves at supermarkets from small to large, consumers cannot
distinguish different types of milk. TH True MILK is just one of many other domestic dairy
brands, so it’s difficult for TH’s products to reach the consumers.
c. Opportunities
- Global development opportunities, access to large markets:
 Chinese market: On October 22, 2019, the first batch of Vietnamese dairy products was
exported to the Chinese market are the products of TH True milk. TH true milk is also the first
enterprise eligible to export milk to China.
 Russian market: TH Group has a high-tech dairy farming and processing project and a
number of food projects worth $2.7 billion. Specifically, in 2019, TH has a company in 2
districts of Kaluga province with a farm and factory that has started - when inaugurated, it will
be the factory with the largest milk processing capacity in Russia.
 Reaching the large markets is a great opportunity for TH true milk, they will have more
customers and have the opportunity to grow globally.

- The domestic market is still very potential:

The domestic milk and dairy products market is showing signs of improvement in growth. The
market report of Kantar Worldpanel said that the demand for milk and dairy products in
Vietnam is experiencing positive changes due to the young population structure and increasing
average income; trend of using nutritional supplements, enhancing immunity; trend of
consuming convenient, branded products that ensure food safety and hygiene. 
 d. Threats 
More and more powerful competitors:
In addition to familiar domestic competitive brands such as VinaMilk, Nutifood, etc… There
are now "dairy giants" from the US, UK, France and Japan on the market. The more
competitors, the less customers Th has.
Competition from alternative products of Th True Milk
The substitute products of TH true MILK can be powdered milk, nut milk, ... or with other
drinks such as green tea, oolong tea, fruit juice and especially milk tea. The appearance of
substitute products also reduces customer access to TH true milk's products.
Challenges in properly implementing TH's commitments in the future
Faced with strong price competition from imported and domestic milk brands, it is difficult for
TH True Milk to maintain and improve the quality of their products while maintaining the
benefits of contributing to the community.

2. Analyzing, combining swot model. Proposing some recommendations to the

business level strategies of the firm and explain why
Business level strategy: Differentiation strategy
1. Competitive advantages:
- Finance is the first strong point of TH. With the support of North Asia Commercial Joint Stock
Bank, TH True Milk has formed the most modern dairy farm in Southeast Asia.
- Modern infrastructure and equipment that is difficult for any business to imitate
- High-quality human resources and scientific organization

2. Differentiation
- Quality level:
 The brand emphasized producing the product of the best quality. The company has a
37,000 ha farm in Nghe An province which is raising raw materials for TH, with pure
raw seft-supplied materials. The cows are imported from countries famous for raising
dairy cows in the world to ensure the best milk is high-yield, keeping fat protein in the
milk and high fertility and disease immune as well. In addition, cows are listened to
music, fed the best nutrition, drank clean water, and are bathed daily. 
 For manufacturing, the entire farming, veterinary canter, laboratory, and milking system
are well designed using Control Techniques from Israel with annual expert teams
supervision.
- Brand image
They have successfully created an outstanding brand image which is well known for its clean
and safe products with ingredients made of high-quality components through modern and
standard production. From the beginning stage of the firm, this brand is targeted to bring
Vietnamese consumers breakthrough products that assure the highest quality daily milk for
customers.
- Different product design and packaging
 It is also clear that TH true milk has a different product design and packaging which is
easy for buyers to perceive as unique throughout the Vietnamese dairy industry.
 From the main theme of “Truly Nature” and “True Happiness”, TH focuses on the two
basic colors of white and blue and emphasizes simple but high-quality and presentable
products. 
 The packaging materials of TH, which are in creation under high standardization with
safe and friendly environmental materials, are also an example of elegance and high
class. Simple but modern design and packaging are crucial factors that help this brand
attracts its target customers.
- Price
 TH fresh milk is promoted as "100% clean fresh milk" .TH also does not hesitate to form
direct visits to the enterprise's livestock farm and milk production area, promoting trust in
quality to consumers.
 In addition, factors such as taste, packaging, and less sweetness also contribute to TH
True Milk's increasing popularity, worth the higher amount of money given the general
price level.
- Distribution channel (TH True Smart)
TH uses two types of distribution: direct and indirect. Compared to the distribution places such
as normal supermarkets or small retail stores of other competitors, TH True Mart - the direct
selling system of TH True Milk is much more ideal for customers. It is a chain of convenience
stores that provides safe, clean, fresh, delicious, and nutritious, natural-original products
produced by Farm Fresh Dairy TH. Unlike the normal overcrowded supermarkets and stores,
TH true marts bring comfort to shoppers and make the purchase process of them become easier
with smart and scientific designed stores.
Recommendations to TH True Milk 
- Solutions for high costs: Hiring enterprises with external logistics expertise in the transport of
cows, raw materials,... diversified by sea, air, rail transport and having a logistics management
department: this will be the department that captures, monitors and evaluates the transport
activities of partners, thereby promptly handling arising situations. In fact, in the 2015s, TH was
still self-employed in the logistics sector, so in the product price structure, logistics accounted
for 15%. Therefore, in order to reduce costs to less than 13%, TH must rely on professional
logistics partners. In essence, logistics outsourcing is the strategy of excluding non-core
 business functions of the enterprise to focus resources on key business functions of the
enterprise. Because of those reasons: 
- Reducing capital investment and reducing costs: In addition to the lack of investment in the
logistics asset network, logistics outsourcing also helps to reduce logistics costs. Logistics
service providers often have more complete, modern and highly specialized technical facilities
and technology conditions along with a large scale, so if they spend a large amount of money
together, outsourcing will provide more valuable services than investing in their own logistics
activities -> cost savings
- Improve customer service: With the core competence of logistics, they create highly
specialized services, especially flexibility in time and location, diverse types of services due to
their network's large visibility, modern equipment systems, shorter supply times
- Increasing management skills and access to information to the market: The cooperation of
TH with external logistics units is also an opportunity for TH to learn management skills
because logistics service providers are always very responsive to changes in their business
environment >> thereby helping TH adapt to the environment

In addition, continue to diversify the product segment (milk, tea, butter, yogurt, barley,...)
thereby diversifying the customer segment and focusing on quality to always gain the trust of
customers, and this is also the strength of TH to stand out from competitors (especially
Vinamilk)

3. Analyzing, combining swot model. Proposing some recommendations to

Coporate level strategies and explain the nature/ characteristic of this
corporation level strategy
3.1. Nature/ characteristic of some corporate strategy:
a. Stability strategy:
A stability strategy is a corporate strategy where a company concentrates on maintaining its
current market position. A company that adopts such an approach focuses on its existing product
and market. A few examples of this strategy are offering the same products to the same clients,
not introducing new products, maintaining market share, and more.
Usually, a company satisfied with its current market share or position uses such a strategy. Also,
a company following this strategy does not need any additional resources and work using the
existing expertise of the workforce. But, this strategy is useful only if there is a simple and stable
environment.

No-change Strategy
As the name suggests, a company following this strategy does not take up any new activities.
Instead, the company continues with its current business. Companies that are well established
may go for this strategy.

Modest Growth Strategy

Under this, a company strives to achieve the same target as it did in the past. For example, if a
company hit a 5% growth last year, then for the current year also, it targets the same percentage
(making adjustments for inflation). It is the most relaxed approach as the risk is low, and the
company does not need any additional efforts or resources.
Sustainable Growth Strategy
A company follows this strategy if it believes the external environment is not favorable.  For
instance, if the economy is in recession or if there is a lack of financial resources.
Profit Strategy
If the objective of a company is to generate cash, then a company may adopt this strategy. A
company pursuing a profit strategy may be willing to give up some of its market shares to make
cash.
Pause Strategy
A company adopts such a strategy if, in the past, it has enjoyed rapid growth. By using this
strategy, the company wants to take some rest before pushing for growth again. Or, we can say, a
company moves cautiously for some time before pursuing growth. It is a temporary strategy. A
company can use the rest period to make its production more efficient to exploit future
opportunities.

b. Expansion strategy:
A business or a company follows the expansion strategy when it wants to achieve a certain high
growth level compared to the previous performance. When a company plans to achieve a
certain growth level, it employs methods like increasing its business operations to target a more
significant customer market and technological tools.
Expansion through Concentration 
Expansion through concentration is the grand level strategy, and it requires an investment of
a plethora of capital and resources in a specific product line. It’s to satisfy the needs of the target
market with the specific verified technology.
In other words, when a business or a company invests its capital and resources into one or more
product lines and businesses, the purpose is to satisfy the needs and wishes of customers.
However, businesses and companies employ concentration strategy by any of the following
methods;
Expansion through Diversification 
Through diversification, expansion is when a company changes its business type by either
entering into the new market or launching the new product. Businesses and companies follow
the diversification strategy during the economic recession period.
The purpose of a business diversification strategy is to recover the company’s losses by making
a profit from the other business. The economy and market have affected its profit and earnings.
The diversification strategy has two main types;
Expansion through Integration 
Through integration, expansion is when you combine/join various current operations of the
company without changing the target customer market. Businesses and companies use a value
chain system for integration.
The value chain is the process of related activities that a company performs, from the raw
material’s procurement to the finished good. The company increases or decreases the number of
steps in the value chain system and develops the product to satisfy customers’ needs.
Expansion through Cooperation 
When a company agrees with the competitor brand to perform business operations together and
compete with each other simultaneously. The expansion through cooperation has the following
types, and they’re as follows;
Expansion through Internationalization 
Expansion through internationalization is when a company goes beyond the country’s national
border and market. The reason for internationalization is when the company has utilized all the
opportunities in the domestic market. Now the brand expands into the global market to exploit
opportunities in the international market.

3.2. SWOT combination analysis and recomendations:

Currently, TH True Milk is applying Expansion strategy. We see TH True Milk in a lot of F&B
markets in Vietnam, and news of their expansion to other countries and their achievements in
international competitions are all over the Internet. 
a. Strength + Threats: High image but High cost and High price makes it difficult to
compete 
While TH True Milk's strengths lie in their clean products and brand image, the price range for
their products as well as manufacturing costs are very high. With the entrance of overseas dairy
products as well as the general mindset of Vietnamese consumers of liking foreign products. TH
true milk will fall behind on competition with local dairy brands ‘cause of their higher price, but
people who are willing to spend more on quality products will most likely choose brands from
US or EU
>> They should adopt Stability Strategy, more specificity, Profit strategy to maintain quality of
service and products and cut production cost: Milk cows are a significant input into TH True
Milk value chain. TH True Milk could mitigate this price volatility risk by implementing an
effective hedging strategy like future contracts with cow breeders  to lock in their estimated
quantity inputs at a low swing price so that the future costs can be managed to a greater extent.
b. Strength + Opportunities: New international markets: 
- TH True Milk has already made significant inroads into the Chinese market but there still
is a lot of untapped potential growth in these markets.
>> They can apply Horizontal Diversification Strategy which entails entering into new markets
other than the milk markets in other countries:   TH True Milk has a lot of other dairy products
that aren’t as well known in foreign countries like yogurt, butter,… 
>> They can also apply International Strategy: TH True milk timeless and minimalistic
packaging saves them from having to modify it when entering a new international market. Its
management teams should also have the freedom to operate within their overall framework,
introducing local product mix and price points to the needs, lifestyles, and tastes of each
individual market/community.    Under TH True Milk international strategy, it should transfer
its core competencies and capabilities country to country and then gradually build profit drivers
in several countries as it continues its global expansion in an organic way.
- Threats from substitutes products:
>>TH true milk already has their own line of products to substitute for their milk, including nut
milk, teas, ice cream,... They are doing quite well
>> They should also apply Concentric Diversification: Western dairy products such as cheese,
cream cheese, buttermilk,... are becoming more popular with the younger generation, with no
dairy brand in Vietnam manufacturing these types of products, this is TH true milk opportunity
to expand as they currently have the most advanced dairy factory in Vietnam.

c. Weakness + Threats: Lots of Vietnamese dairy brands and the entrance of dairy giants
from foreign countries
>> They should apply Expansion through Cooperation Strategy - This strategy entails working
closely with a competitor (while potentially still competing against them in the market).
Working with the competitor provides both companies an advantage that trumps any advantage
(or disadvantage caused to the competitor) from not working together. Working together will
generally provide operational efficiency to one or both competitors or expand the market
potential for one or both competitors: By working with other big dairy companies in Vietnam
such as Vinamilk, Nutifoods,... which are also facing the same threat, TH True Milk could
launch an awareness marketing campaign “Vietnamese people use Vietnamese products” and
help prevent the oversaturation of foreign dairy products in Vietnam. 

d. Weakness + Opportunity:
High cost and price prevents an exploration of the domestic market, praticularly in rural
areas
>> Aforementioned Stability Strategy to cut costs will also help appeal to customers in rural
areas or customers looking for quality products at lower price points.
>> TH True Milk should build better relationships with big box retailers to get premium shelf
space and increase the efficiency of this distribution channel. (increase product coverage in
supermarket, retailed store or convenience store….)
>> Integrating TH True Milk loyalty program with the mobile application (TH eLIFE) would
also be recommended- helps customer access to more new products and easily get their
feedbacks. Utilizing this application to spread promotions and advertising programs
=> Conclusion: Aside from applying Expansion Strategy to put their products on international
shelfs, they should also apply it to domestic markets as there are lots of potential dairy products
that Vietnam isn’t manufacturing currently and also to discourage the entrance of International
dairy giants. Stability Strategy is also recommended as a way for them to further increase the
competitiveness of their high quality core products, milk.