Professional Documents
Culture Documents
Contents
1. Overview Masan MEATLife............................................................................................................3
1.1. Introduction...........................................................................................................................3
1.2. Vision, Mission, goals and objectives.....................................................................................3
2. Macro environment analysis.........................................................................................................5
2.1. PESTLE analysis......................................................................................................................5
2.2. Key driver change................................................................................................................10
2.3. The Implications for MML’s strategic management decisions.............................................11
3. Industry structural analysis..........................................................................................................11
3.1. Industry analysis..................................................................................................................11
3.2. Industry dynamic.................................................................................................................15
3.3. Competitor groups and segments........................................................................................17
3.4. The implication of the industry structural analysis..............................................................19
4. Internal environment and capabilities.........................................................................................20
4.1. Internal resources and capabilities......................................................................................20
4.1.1. Value chain...............................................................................................................20
4.1.2. VRIO framework.......................................................................................................22
4.2. Analyse the corporate/ organizational structure and stakeholders.....................................26
4.3. Evaluate the internal environment of MML and assess the strengths and weaknesses......27
5. Strategic management plan.........................................................................................................28
5.1. Corporate strategy...............................................................................................................28
5.2. Business strategy.................................................................................................................28
5.3. Strategic direction................................................................................................................30
6. Reference List..............................................................................................................................32
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1. Overview Masan MEATLife
1.1. Introduction
Masan Group Corporation was established and officially ran business activities in
2004 and its stock was listed on HOSE (Ho Chi Minh Stock Exchange). There are
Masan Group controls three subsidiary companies. These include The CrownX,
Masan MEATLife (MML), and Masan High-Tech Materials (MSR) (Masan annual
report, 2020). However, in this report, the author mainly focuses on the business
strategy of Masan MEATLife (MML).
MML was set up in 2011 under the old name Masan Nutri Science then it has
changed since 2015. It was listed on HNX (Hanoi Stock Exchange) in 2019 (Thanh
Thuy, 2019). MML is the largest company in the meat pork industry in Vietnam,
mainly provides meat pork products. The meat value chain is applied for MML from
inputs to outputs which help MML give the higher quality of meat, ensuring food
safety and hygiene and original products which are reasonable prices for all
Vietnamese families. Furthermore, MML applies the 3F model "Feed - Farm - Food,"
from the farm to the dining table (MML, 2021). It is a manufacturing food-safe
hygiene that started from animal feed to raring process in the farm, at last, food meat
processing. Model 3F brings many profits for MML, especially during Covid-19.
The vision of MML is “becoming a leading company in Vietnam meat market”. "To
provide Vietnamese consumers with delicious, safe and affordable meat products
every day, everywhere". It in general and memorable for customers. Furthermore,
MML's vision also states what it desires in the future and have an objective in the
long term. Based on the vision statement, the company will be led to the right way to
become a pioneer company in the meat pork industry. In addition, MML set up
missions in which directions the company should go to achieve success. “MEATLife
for a better life” brings and improves the quality of nutrition for a better life ensures its
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consumers approach high-quality products. Also, MML brings meat products that
have original can be traceable and reasonable for millions of Vietnamese families.
Hence, its mission statement clearly explains why MML exists in the protein meat
industry that brings quality meat products for everyone who wants to use traceable
meat products at a reasonable price. And the relevance to the consumer and market
current demands.
As can be seen, there is a consistent link between the vision and mission of
MML in that it brings high-quality meat products for Vietnamese consumers. These
lead to MML making customers are satisfied and expanding business activities
The goals of MML aim to be a leading company in providing solutions for protein
meat products by value chain for all Vietnamese families every day by improving
performance. In order to achieve goals, MML set up objectives to implement in the
short term. MML has some objectives which desire to achieve in 2022, including
owning a 10% market share in the meat pork industry, valued at 10 billion USD. The
second objective is ranking no.1 in the nationwide meat network system and
combine with flagship store, modern trade, and traditional market. Moreover, the last
objective is 2 billion USD revenue with the most significant contribution from protein
meat which has the brand and profitability from 200 to 250 million USD. It is clear to
see the link between the goals and objectives of MML. The establishment of
objectives based on SMART model is ensured specific, measurable, attainable,
relevant, and time-bound. Details for stakeholders describing all MML's objectives
are easy to understand. Furthermore, MML's objectives can be measurable by
percentages and numbers. In addition, the objectives are attainable, which means
MML can attain them in a specific time. Realistic objectives are essential for MML to
achieve the objectives by its available capabilities. At last, MML also set time-bound
for each objective, specifically in 2022.
In conclusion, corporate value, vision, mission, goals and objectives help MML to
have a clear strategy for the long-term direction to achieve success.
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2. Macro environment analysis
In general, the author uses PESTLE framework to identify factors that bring
opportunities or threats for MML’s strategy at present and forecasting trends in the
future.
Vietnam is a Socialist Republic Nation that has only a party. It has both advantages
and disadvantages impact on the economy. The first advantage is political stability
which positively influences the development business environment. In contrast, the
most Western country is democratic nations that have much more than a party. It
can be led conflicts among parties and maybe civil war. These make the political
instability and negatively impact on the economy, especially business activities. In
addition, the Vietnamese government aims market economy that orient a socialist
republic to develop the economy to improve the infrastructure technique of socialism,
enhancing the population's standard of livings (Dang Quang Minh, 2021). Especially,
Vietnam is one of the emerging economies in Asia. It improves the standard of living
and also creates a sustainable business environment for enterprises.
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Economics
2020 witnessed the growth of Vietnam GDP, although in the context of Covid-19
spread the World and also in Vietnam. When the crisis economy was strictly
predicted, significant economies were profoundly decreased, but Vietnam's economy
maintained a GDP of nearly 2,91% (GSO, 2020). It showed the positive sign of GDP
during many threats for business appeared. In Vietnam, the government noticed that
many stores that sold unnecessary goods should be closed to implement social
distancing to prevent Covid-19 spread. Thus, it impacted the business activities of
almost every industry. However, for the protein food meat industry, it is categorized
into food products necessary for consumers. So, the meat pork companies such as
Masan MEATLife, Vissan, or CP Foods are not much negatively influenced by
Covid-19. In 2020, food processing contributed to GDP increased by 10.9%
compared to at this time in 2019 (GSO, 2020) In recent years, the meat processing
industry has been a potential market for all food processing companies. According to
GSO report (2020), Vietnam ranked 6th in pork production (Chu Khoi, 2020). Meat
pork is the main product in each meal of Vietnamese people, so demand
consumption is high. Thus, meat pork domestics companies desire to extend their
business activities to capture the most market share.
In conclusion, the weak signals in the growth of GDP in this year maintain a positive
index while Covid-19 spreads. The advance for the future signal the boost up of GDP
leads to the consumer index also increase. Especially, the growing up in the meat
pork consumption. It is the opportunity for MML change to improve productivity
productions to ensure the supply source meat pork for the market.
Social
According to GSO report (2020) Vietnam ranked 6 th in pork production (Chu Khoi,
2020). In recent years, the meat processing industry has been a potential market for
all food processing companies. Meat pork is the main product in each meal of
Vietnamese people, so demand consumption is high. The average meat
consumption of Vietnamese was 24.8kg in 2019 (VTC New, 2020) and continues to
increase gradually. Furthermore, the demand for pork meat consumption is higher
than other red meat like beef. Vietnamese consume meat pork approximately 70% in
total of protein in a meal (Nhu Quynh, 2021). In addition, the habit of Vietnamese
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consumers is eating fresh meat pork, so they go to the traditional market every day
to buy fresh meat pork. It is easy to buy meat pork in any traditional market but meat
pork does not guarantee food safety hygiene and is difficult to trace. Thus,
understanding consumer behaviour what they need, and their lifestyle, MML
launched MEATDeli to provide fresh-chilled pork. MML applies 3F models (Feed-
Farm-Food) to control the quality of inputs and outputs. It responses to customer's
desire for the quality of fresh pork meat every day. MML focuses on the consumers
who are living in Hanoi and Ho Chi Minh. The population in Hanoi is over 8.3 million
while Ho Chi Minh is nearly 9 million people (Quynh Nhu, 2021). These are two big
cities of Vietnam and the market for consuming protein meat food is potential. In
addition, the per capita income of HCM is approximately 6.328 dollars/ per/ year
(Ban Mai, 2021) and that of Hanoi is around 5.707 dollars/ per/ year in 2020 (Huy
Nam, 2021).
Thus, MML has opportunities to expand its scope of the organization and have
business strategies that suit the external business environment during Covid-19 and
when the pandemic is commanded.
Technological
In recent years, research and development (R&D) activities in Vietnam have been
improved for developing the economy. R&D activities in Vietnam have some
limitations in technology, modern equipment, and human capability. So, it is
approximately 0.53% lower than other countries in regions such as Thailand,
Campuchia. In spite of having limitations in technology, companies still contribute
64% to the R&D nation (Hoang Giang, 2021).
Food preservation technology is an essential stage in the meat food industry before
providing products for consumers. The principle of meat preservation is applying
solutions to slow down the spoilage of meat due to the case of physicochemical
changes (Lai Manh Toan, 2021) There are many traditional preservation meat foods,
such as salted or dried, which help the meat avoid going rancid for a long time. In
contrast, the quality tasty of meat is changed too much more than in the initial taste.
So, the technology for meat preservation is radical innovation to ensure the taste, the
quality of products for a long time. Most of the companies in protein meat food apply
freezing technology for preservation such as CAS (Cells Alive system) or freezing
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Plasma (Lai Manh Toan, 2021). These replace traditional solutions because of
advantages for ensuring the quality and taste of products.
Legal
In general, there are some limitations in the business establishment in Vietnam. The
complicate of procedure registration make the business is confused despite process
simplification (Pham Nguyet Hang, n.d) The companies must undergo certain
processes required by law to get a business license. In the first stage, they have to
prepare permission papers. Especially, certificates of eligibility for manufacturing
meat food plays an essential role in running a business. According to Decree
08/2018/ND-CP, before delivering meat food products to consumers, the meat food
companies have to ensure the business condition, which belongs to the range of
management of the Ministry of industry and trade (thuvienphapluat.vn, 2021).
They must also comply with the Ministry of Industry and Trade regulation, the
Ministry of Health, and the Department of Livestock because the food product
directly affects consumer health. Furthermore, most meat food companies run the 3F
model (Feed-Farm-Food), so they obey the livestock law. They ensure that the
process of raising and producing meat is safe. In addition, it is difficult for companies
in the exam specification of safety hygiene food. Nowadays, there are inconsistent
standard regulation make companies confused, time-consuming and cost-consuming
to re-apply for safety hygiene certificate (Tran T. M. Nguyet, 2021). In contrast,
although the regulations for business in the meat food industry is strict, it helps the
government to control the quality of food products. Ensuring the quality products are
delivered to consumers. Besides, the meat food companies increase reputation and
innovation the equipment for processing.
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As can be said that, Legal is a threat for MML to expand the scale of economics
and launch new meat food products because of the complicated procedure for
certificate examine the quality of the products and time-consuming
Environment
The sustainable environment has been one of the most factors that many countries
caution to limit pollution. In general, companies have a report about the influence on
the environment before building manufacturing factories. The act of discharging
waste causing environmental pollution will be severely fined. The manufacturing
companies must adhere to the principle "polluter pays principle," which means
compensation for damage caused by acts of environmental pollution (Ms Dao
Nguyen Huong Duyen, 2021) Thus, the meat food companies have to build the
wastewater system before operating factories. It ensures to response national
technical regulations on industrial wastewater in the Decree 127/2007/ND-CP
(vasep.com n.d). However, the cost for operating cost which is high and impacts the
product price. In addition, the government encourages companies to use clean and
renewable energy to reduce greenhouse gas in manufacturing (Tue Van, 2021) So,
the companies install solar panels or using LED bulb lights to save energy. It helps
factories to save cost electricity and protect the environment.
Moreover, MML regularly spends VND 200 billion per year maintaining the
wastewater system (masanmeatlife.com, n.d). However, MML maximum utilizes the
wastewater system and LED bulb lights. In facts that 70% of wastewater can be
reused and provided for farms. In addition, using Bulb lights helps MML to save
energy and reduce costs for electric systems. So, the meat products are a bit higher
than meat are sold in the traditional market. Hence, MML has environmental
responsibility to protect the environment, reduce wastewater, and save energy. It fits
business objectives "MEATLife for a better life" that provide fresh-chilled meat pork,
safety, and reasonable price for improving the quality of consumer's life.
Therefore, the environmental factor is a threat for MML because the higher the
operating cost, the higher the product price. In the future, government will strictly
manage to the environment of each processing company. It will be a difficulty for
MML balance between control wastewater and the operating cost.
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2.2. Key driver change
O: Opportunity T: Threat
From now to the future, all factors in PESTLE model will be maintained except the
legal and technology factor. The Vietnamese government has some proposals to
improve the simplified registration and procedures for meat pork enterprises and
have unified standards in pork quality inspection. So, in the future, many meat pork
new entrants will join to meat pork industry. It will threat directly to MML. In addition,
technology applies for preservation products and processing will be a threat for MML
in its strategy. Because in the future, the fresh-chilled meat pork preserve technology
will become more old-fashioned than rivals.
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2.3. The Implications for MML’s strategic management decisions
Based on the PESTLE analysis model, there are some recommendations for MML
make decisions in the strategic management. Firstly, when the government simplifies
the procedures to encourage new entrants join meat pork industry. MML has enough
capital to implement merger, acquisition or joint venture with small-medium
enterprises. It helps MML can expand its market share in the industry. Secondly,
MML focuses on R&D preservation technology, incremental innovation in technology
helps MML to improve the product quality to compete with rivals. Lastly, MML has
the resource capabilities of Masan Group, so it can implement enter market entry
with the radical innovation of preserve technology by investing in R&D. Thus, It leads
the MML's meat pork products to have the high quality and completely different from
competitors
MML is in the meat pork industry, which has processing meat food products in
Vietnam. Not only MML but also there are many enterprises process the same meat
pork products. It creates a value chain for enterprises. Meat pork is the main product
in the industry. There are three types of meat pork which are divided based on the
preservation technology. These are fresh-chilled meat pork, freezing meat pork and
hot meat pork. Fresh-chilled meat pork technology preserves meat pork from 0
degrees to 4 degrees and can be used for 7 to 11 days, while freezing meat pork is
preserved below 0 degrees in the short-term 1-2 days. In contrast, hot meat pork,
which is preserved at room temperature, should consume in a day because of the
short date, and these have no brand of meat pork and is regularly sold in the
traditional market. In summary, Vietnamese meat pork industry consists of brand
meat pork food that can be traced, preserved in freezing temperature or fresh-chilled
conditions, and no brand meat pork food in the traditional market.
In order to industry structural analysis, the author uses framework Porter’s 5 forces
to identify factors that influence to MML and evaluate the competitive forces in the
market sector for MML
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Supplier power: low
As can be said that food animals for feeding pigs are important for the meat food
companies value chain 3F models. Although many suppliers provide food animals for
feeding pigs, MML has a production line investment for food animals (Hua Van,
2021). It is directly provided for farming. So, the cost for animal food is more saving
than order animals food from the suppliers. In addition, there are many suppliers that
provide product packagings made from PE packages or vacuum-sealed PA/PE. for
MML (meatdeli.com.vn, 2019) These are reasonable prices and common for meat
food companies. Hence, it is not easy for MML can find new suppliers and bargain
the cost for packaging. In addition, the materials for package meat pork are varied,
not only PE, PA packages but also Oxy-fresh package technology for MML to
transform. The cost for changing material meat pork package is the same. Thus,
MML has an advantage when bargaining with package suppliers.
Therefore, the power of suppliers is low. However, in the future, if customers tend
to use and buy meat pork which is put in the "green" package, it will be a threat for
MML because the cost of changing PE/ PA plastic package to friendly-environmental
materials for packing is high. Thus, the supplier power will increase
MML's meat pork products are applied by fresh-chilled meat technology. This is a
strong point that makes MML's meat pork become different from others. Consumers
can be difficult to buy meat pork at a reasonable price and high quality from another
brand store. In addition, most of MML's customers are retailers who buy small
quantity meat food products. So, they cannot bargain with MML.
In contrast, the substitutes for meat pork in the food industry is high. Consumers
have many choices for buying substitutes with a reasonable price and suitable for
their needs. In addition, the cost for consumers changing among different brands
meat food is cheap while the quality products are the same. In the residential areas
in big cities such as Ho Chi Minh City and Hanoi, many meat food stores are located
in the same areas. So, it is not difficult for customers to see price reference and
compare among them. Moreover, the price of meat pork is regularly public on the
Internet, on TV and News or listed prices in the supermarket or store outlets. Hence,
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customers have many choices and make pressure on sellers about the meat pork
price and the meat pork quality.
In conclusion, the power of buyer is high, threat directly for MML’s revenue. In
the future, the bargaining of buyers maintain high because of many substitutes. Also,
they have a lot of information about the product price and the various stores in a
resident area.
Before Covid-19, the meat pork industry was encouraged to invest and expand the
scale of economy by the government. Then, during Covid-19, the meat pork
industry becomes fiercer. It is a potential industry attracts many new entrants so it
will continue having the high competitive rivalry in the future
The substitutes for pork meat are beef and livestock which are breeding for raw
ingredients food. Vietnamese have habits of changing meat food in every meal. So,
It ensures the nutrition is provided enough for people health. Not only has the threat
of different types of meat food but also type of meat food with having different
preservation technology in the industry. In the fact that the competition between
meat pork is sold by household businesses in the traditional markets and fresh-
chilled meat pork is high. They priority buying hot meat pork which is provided newly
every day and they do not trust in the quality of fresh-chilled meat pork and freezing
meat pork. Because most consumers in the middle age, do not understand the
13
definition of fresh-chilled meat pork and do not want to eat freezing meat pork. So,
their substitutes meat pork is in the traditional market.
While the existing meat pork company desire to expand the scale of the economy,
the new entrants want to enter the market (VIBOnline, 2020). Vietnamese
government enact Decree no. 57/2018/ND-CP to support the capital for SMEs to join
and manufacture the brand meat pork (ngkt.mofa.gov.vn, n. d). However, there are
some certain entry barriers for new entrants including technology and capital. Meat
pork companies regularly follow value chain, 3F models. SMEs needs a vast of
capital to invest the technology processing, operating, marketing and selling to
consumers. Not only technology processing but also preservation technology (fresh-
chilled meat) is a need to focus on investing.
MML is a subsidiary of Masan Group which has plentiful capital to invest in the
technical processing and operation. So, the market share of MML accounted for 13%
which is nearly equal to CP (14%) and is quite larger than Cargill (12%) (VIBOnline,
2020). It is illustrated that the consistent position of MML is comparing with big
enterprises. In fact, MML was a pioneer in the market because it invested and
operated the modern preservation technology which was valued at VND 200 billion
in 2018 (annual report, 2020). It helps MML to take market share from the exiting
company and create threats for new entrants.
So, the threat of new entrant impact on MML is medium. In the future, if the
government enacts more policies and banks offer financial investment for SMEs who
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want to join the meat food industry, it will lead to high threats for MML and the threat
of new entrants will be lower
Based on analysis Porter's five forces model shows the increasing competitive
rivalry, so the meat pork industry's market size is maturity. It has strong buyers who
are sensitive to price. They have many choices for choosing other meat pork
products from different brands with lower prices with the same quality products. In
addition, The fierce competition among brands because of product standardization. It
was enacted by the Ministry of Agriculture and Rural Development and the Ministry
of Science and Technology to manage the quality of fresh-chilled meat pork in the
industry (Nguyen Hanh, 2018). The meat pork in this period of the industry life cycle
has the same characteristics, quality, and no differences among brands. In addition,
the barrier for new entrants is from medium to high because the existing company
has a consistent position and market share in the meat pork industry. It is difficult for
new entrants to take market share and directly compete with the existing company.
The cost is the key strategy to take market share from rivals. Thus, the meat pork
industry still attracts more entrants to enter the industry because of the
significant number of consumers in meat pork products and the value in this market.
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Five forces radar plot
Radar plot
Present Future
The radar plot illustrates the five forces level at present and in the future. The power
level is indicated by the low power (4 – 5 points), medium power (2.5 – 3.5 points)
and high power (1-2 points). At present, supplier power has low power because
almost process inputs by itself, and low dependence on provided by suppliers. MML
only buy the plastic package, so the supplier cannot bargain with MML, and the low
cost for changing is the MML’s advantage. However, in the future, when MML will
change the material package from plastics PA/PE to environmental package, it will
increase the cost and reduce the bargaining of MML to suppliers.
In contrast with supplier power, buyers have high power at present. They have many
sources of price information, the various meat pork store in their residential areas
and the low-cost changes between brand meat pork products. Also, meat pork is the
main in Vietnamese family meals, so the buyer power will continue to increase. So, it
will be a threat for MML because it decreases the value of MML’s meat pork
products.
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potential industry, the higher competition. The competitive rivalry will become higher
and create both opportunities and threats for MML. Moreover, the various meat pork
products with the same characteristics and standard of quality products, no
differentiation to attract consumers, increasing the high power in the threat of
substitutes. It will significantly threaten MML from the present to the future. Lastly,
Threat of new entrants is at a medium level at present. Although new entrants have
the capital barrier, the technology barrier to enter the industry, the government also
to have support policies for SMEs. In the future, the government will modify the legal
to reduce the entry barrier for the new entrants in the meat pork industry. Hence,
these a threat to MML.
In conclusion, from present to the future, the meat pork industry is the significant
potential industry for MML and other meat pork enterprise profits to explore in a long-
time because of the high-value industry. and has a huge of consumers in different
market segmentation in the whole country
High
MML
CP Foods
Vissan
Price
Dabaco
Non-brand
meat pork
(traditional
market)
Low
Based on the strategic group map, MML and CP Foods are in the strategic group.
They process the meat pork product line for the middle and high range income
consumers. Their strategy has the opportunity to approach and attract customers
who have the behaviour buying the fresh meat pork, can be origin traced and safety
17
hygiene. In addition, MML and CP Foods has the value chain 3F models and evenly
distribute their capital in feeding, farming and processing food for the target market
segmentation. MML and CP Foods have strategic opportunities in the high
price segment and various meat food products. It is the blue ocean strategy of
MML and CP Foods to create new market spaces with fewer competitors. MML and
CP Foods have various products, fresh-chilled meat pork products, and process the
organ meat pork products. These are preserved by high technology to ensure the
European standard, so the selling price is higher than other rivals.
So, they increase profit and revenue to turn back for investment and expand the
economic scale: the higher the income market segmentation, the higher yield for
firms. Moreover, the Vietnam meat pork industry is valued at 10 billion dollars, the
big drive for all companies to take the market share, which is why the market is
attractive.
Between the high price segment of meat and the middle and low segment, meat food
products have mobility barriers: preservation technology and capital. MML and
CP Foods create the difference between Vissan and Dabaco in preserving meat food
products. The cost for companies to invest in the preservation system is high. In
addition, the capital invests for distributing evenly value chain 3F is higher than
focusing on one or two stages in 3F. In fact, in the low and middle-income
segmentation market, Vissan and Dabaco focus on farming and processed meat
food products more than feeding (Dabaco, 2020). They do not utilize the capability
as much as CP Foods and Vissan to create more profits. So, the turnover invested
for expanding manufacturing meat food is limited. Thus, MML and CP Foods build
the barrier for protecting their attractive position in the strategic group.
Market segment
Based on the strategic groups, CP Food is the direct competitor of MML because it
focuses on the same target segmentation, women consumers who have a medium-
range to high income. They have a high average level of living costs. In contrast,
Vissan and Dabaco are in the indirect competitor groups. Their target is low to
middle range income consumers living in some medium-sized cities like Bac Ninh
and Binh Duong and locations in Ho Chi Minh City and Hanoi. At last, non-brand
meat pork is sold in traditional market also the indirect competitors of MML. Most
18
low-income consumers purchase non-brand meat pork because the meat pork is
much cheaper than brand meat pork.
Furthermore, CP Foods and MML have the similarity in the preservation technology
that is fresh-chilled meat pork. Their meat pork products preserve condition at 0 oC –
4oC. In addition, they have the same distribution channels in the big cities because
the locations match their customer segmentation. In recent years, after MML, CP
Foods innovated the preservation technology. While Vissan and Dabaco have the
same preserve condition meat pork in 0 oC – 8oC, they focus on distributing to
ventures and supermarkets instead of outlet stores. They are located in medium-
sized cities which have low and below-average income consumers. On the other
hand, non-brand of meat pork has poor preserve conditions and only has a
distribution market which is a traditional market. However, it is easy to find anywhere
that has resident areas.
Therefore, CP Foods is a direct competitor of MML because they target in the same
consumers, the same market segmentation. So, they are in the same strategic
group in the meat pork industry.
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4. Internal environment and capabilities
4.1. Internal resources and capabilities
Value chain
Technology MML sets up the MML invests MML applies MML applies MML manages
development animal food (Bio a huge system to the system to service after-
– Zeem) budget for manage the measure the sale for
manufacturing operating number of efficiency of consumers via
factory by itself pork farming inventory meat marketing and the official
instead of systems and pork and the sales website, social
purchasing improving meat pork to campaigns by media, and
animal food from continually distributed the different hotline 24/7
different technology MEATDeli analysis tools (MML annual
suppliers (MML preservation stores, like by Google report, 2020).
annual report, for fresh- franchise Analytics or It brings
2020). It helps chilled meat stores, and Facebook benefits for
MML to reduce pork (MML chain stores advertising MML by
input cost and annual report, Winmart, which analytics. It is improving the
20
bargaining 2020). It are clear for the quality of
power of animal ensures the repurchased managers to customer
food supplier quality output by Masan see the service which
and the Group. It helps overview of can bring
smooth MML to the business satisfaction to
operation in manage the activities consumers. It
organization. delivering through the also improves
However, the process and result of the productivity
high cost for avoid the stock campaign and for customer
operating the out of goods in sale volume service
whole the whole employees.
business system.
activities
21
managed by functional departments and role play in support of all activities in the
value chain.
Thus, the functional organizational structure brings advantages for the company in
management and clarifies each employee's role and tasks in an organization. In
contrast, the disadvantage is the company provide meat pork products in the whole
country, so to manage each region business activities, MML needs to apply
geographical structure to ensure the operation in the value chain smoothly.
In conclusion, as can be seen the value chain of MML, it optimizes value from
different activities to reduce manufacturing cost, input cost and independence to the
animal food suppliers for pig farming. It leads MML to gain the max profits and create
the quality meat pork which have reasonable price for the consumers. MML has the
competitive advantage to compete with rivals. On the other hand, because of the
independent with supplier’s value the invalid with supplier makes their power of
bargaining decrease and less impact on MML. While the value chain of distribution
and consumers will increase and consistent. It builds the relationship with consumers
and partnership of distributors.
VRIO framework
In order to analyse the internal resources and capabilities of MML. The author
applies VRIO framework. It is a useful framework for evaluating the resources and
capabilities of a company to analyse the competitive advantage. VIRO stands for
value, rareness and Imitability, Organization (managementmania.com, n. d). In the
case of MML, the main resources of MML are preservation technology, finance and
human resources.
Preservation technology
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impacts on the taste and quality of meat pork when consumers using. It brings value
of the high-quality products for consumers. Thus, MML has the competitive
advantage in the preservation technology system to compete with rivals. The
preservation technology of MML is costly to imitate because the cost of investing in
the imported technology equipment is high, so it is hard for the rivals to compete
with. Additionally, the preservation method for fresh-chilled meat pork is unique in
the meat pork industry in the Vietnam market. So, it is rare technology
preservation.
Finance
The plentiful of finance of MML comes from the financial supporting from Masan
Group, the finance comes from ancillary business in the animal feed production
industry and initial investment for preservation technology. Firstly, the root finance of
MML comes from the financial support from MASAN Group, a mother company.
Secondly, MML has cash flow from the subsidies companies in the animal feed
production industry. The business of the animal feed sector contributes over 80% of
MML’s revenue (Hua Van, 2021). It ensures the turnover to run the business
operation and expand the business. The plentiful of finance is shown in the MML
annual report in 2020. One thousand billion VND is invested in building the
production processing complex (MML yearly report, 2020). Lastly, the initial
investment for preservation technology also needs a considerable budget to operate.
It is clear that the competitors compete with MML and gain the competitive edge
from MML that they need a huge capital to invest in the process, operation, and
human resources to run a business. Hence, the plentiful of finance brings costly to
imitate for the competitors.
Human resources
The talented employees, top managers of MML roots of MASAN Group (MML annual
report, 2020). It ensures the operation business of MML that is smooth and limits the
risk of wrong making decisions. Furthermore, the young human resources who have
a vision, flexible in solving – problems, and an actualization the business initiatives.
They contribute to the success of MML in the meat pork industry. In addition, the
functional structure of MML makes clearly the task and responsibility of each
employee. And the board of management has the right to make decisions which
23
leads the company to gain the objectives. Hence, MML can capture value from
organized structure from the human resources which help the company to utilize the
other resources and has the capabilities to achieve the succeeds.
Benchmarking
The author applies benchmarking to analyses the strengths of MML and CP Foods
which is the main competitor. Both MML and CP Foods are in the strategic group in
the meat pork industry
MML CP Foods
Resources 1 – 10 point 1 – 10 point
Business MML is a pioneer to apply It behind follows MML in innovating
strategy preservation fresh-chilled meat the preservation technology.
pork in Vietnam meat pork industry. Additionally, CP Food not only
It has the differentiation in the focusing on manufacturing meat pork
technology with the high price but also the processed meat pork
products more than CP foods. It such as sausages and hams. It
targets mainly the young and utilizes the economics of scale for
middle-age customers who want to expanding the various products that
buy fresh-chilled meat pork which it gains more the competitive the
has reasonable price instead of cost. CP Foods following the cost
24
freezing meat pork. For the leadership in the high price
consumer who are not price – segmentation. It has the competitive
sensitive so they have willingness advantage in the product price which
for paying high quality products. compares to MML (9).
Additionally, with the main product
of MML is only meat pork instead of
processed meat pork (9)
Finance MML has abundant finance from CP Food works for a long time in
the support of Massan group and meat food industry. So, it has stable
ancillary business in animal feed revenue. Especially, in the context of
production. Over 80% of the Coid-19, in 2020, the profit of MML is
revenue of MML comes from the approximately 1.000-2.000 billion
ancillary business (Hua Van, 2021). VND (Dong A, 2021) The gross profit
In addition, the gross profit of MML of CP food is nearly the same as that
is 1.234 billion VND in 2020 (MML of MML. Furthermore, CP
annual report, 2021). It shows the manufactures various meat pork
effectiveness of MML, although products like sausages, hams and
Covid-19 happens. Furthermore, meat pork with the reasonable
MML is invested 1 billion VND for prices. It brings the more profits for
building the meat food processed CP Food to compete with MML.
company by Masan group. Thus, Hence, CP Food has the competitive
with the huge of capital for advantage in processing diverse
business activities. MML has the meat pork products instead of
advantage competitive for focusing one type of products. It
expanding business activities to helps CP Food gain more profits (8)
increase scale of economics. (9)
Distributio MML’s meat pork product is not CP Food mainly distributed meat
n channel only distributed in the MEATDeli pork products to supermarkets,
stores but also in supermarkets vendors, and CP Food stores (CP
such as CoopMarrt, Big C, and Food, 2020). CP Food meat pork is
food vendors. MML has the also distributed to retailers to sell in
advantage in the distribution the traditional market. Because the
channel because Masan group price is reasonable with the high-
buys the Vinmart chains. So, MML quality for customers who are
meat porks are priority distributed sensitive with product price. Although
to 2.3000 Vinmart and Vinmart+ CP Food products are distributed in
(Vinmart) chain stores (MML Vinmart and Vinmart+, It does not
25
annual report, 2020). Furthermore, have the advantage like MML’s
it also develops an online products (8).
distribution channel to deliver
products for the customers. It is
clear that, Vinmart and Vinmart+
chain stores bring the benefits for
MML to boost the volume sales and
approach more target customers.
(9)
Least important
Keep informed
Lo
w
Lo Int Hig
w ere h
st
Community stakeholders economic stakeholders
26
political stakeholders
Hence, it ensures to reduce material cost, manufacturing costs while the price of
high-quality meat pork is reasonable for the target consumers segmentation. It not
only helps the owner satisfy their interest but also the consumers are satisfied with
the quality of products.
Strengths Weaknesses
Differentiation of the preservation High operation cost of the value
technology chain of 3F models
Plentiful of finance Lack of various processed
High qualification of human products, MML mainly focuses
27
resources on fresh-chilled meat pork
Wide distribution channel in big High price meat pork products for
cities (MEATDeli stores, Vinmart, target customer segmentation
Vinmart+ and supermarkets)
28
creates differences with other brands. However, the preservation technology of MML
is not gradually new if the competitors have a giant budget to invest. So, to become
the leading company in the Vietnam meat pork industry. MML needs to gain the
market share from CP Foods. That is why MML needs to increase the awareness of
brand image for the target customers and expand manufacturing different types of
meat pork products based on its strengths. Hence, the cost leadership strategy is
necessary for MML.
MML will generally achieve the cheapest cost in manufacturing meat pork
products when these are standardized. These have the same quality will help
MML reduce manufacturing costs and achieve competitiveness in the economy of
scale. It leads the price of products to decrease and make consumers satisfied
with high-quality products, but these are cheap. Additionally, MML also utilizes
the value chain of 3F model that manufactures feed animal food by itself. That
will help reduce the raw material cost of feed animal food for pig farming. The
huge of products that have the same quality by modern product line system also
creates employees' productivity and cuts down on the labour cost. It saves cost
for MML while increasing the business efficiency. Furthermore, a reasonable
price will attract more consumers and expand the target consumer segmentation.
MML will approach many consumers instead of a small group. It leads MML will
be easy to gain the market share of CP Foods. When reducing the product price
and attracting customers. Thus, cost leadership strategy brings the most
advantage of cost for the company.
Tactics
Generally, MML should focus on the brand image to improve awareness brand.
Marketing department needs to prepare a marketing campaign to approach
middle-aged consumers who regularly buy food for family meals. It also needs to
choose suitable channels to promote meat pork products. In facts that the middle-
aged consumers are easy to know about the products through viral word of
mouth and traditional marketing channels. Thus, advertising through TV or poster
is a good way to increase the MEATDeli brand. Image. Additionally, choosing the
right location for the MEATDeli stores that is a good way to approach the right
29
target customers. The traditional market is the primary location that middle-aged
consumers frequently go. So, MEATDeli utilizes the place to set up the big poster
or incentive programs by directly trying out meat food to attract more customers.
Furthermore, the board director and operation department should research the
economics of scale. The manufacturing department needs to have a plan for the
sale volume that they can produce to provide the market. The sale and marketing
department also need to understand the insight of customers. It helps the
company predict consumption and determine the suitable price of products
delivered for the market. Furthermore, the board of directors and product
department set up the quality standard for products. It ensures all products have
the homogeneous quality of each region, including big cities and countryside.
Operation plan
Objectives Tactics
HRM - Increase the qualification of -MML improves the professional skills
employees and knowledge of employees in
- Retain employees monthly and yearly
-Insurance and health insurance that are
paid extra for employees by MML
Operatio - The quality of manufacturing -MML manages the quality of
n activities manufacturing activities by the total
30
- Ensuring the standardized for quality management, which helps to
the quality of new meat pork avoid product defects and reduces
product line cost for defective products
- New products deliver to the -MML controls the quality of the product
distributors that ensures to respond the
government regulation of processed
food
-MML finds potential distributors to
deliver new products for the market
Finance - Cost for research and -The R&D department needs to have a
development of new products budget for R&D activities for new
- Cost for marketing campaign of products then meet with the finance
new products and accounting department to
allocate the budget. MML leaders
also can loan money from the banks
or raise capital from investors and
mother company for R&D activities
effective
-The marketing department needs to
prepare marketing plans and the
budget for marketing campaign then
discuss with the finance and
accounting department to allocate a
budget for promoting new products.
Marketing - Promoting new product - Marketing and sales department
and sales effectively need to carefully research the
- Focusing on the awareness of consumer demand based on survey
brand image and their feedback of products.
- Increase the sale volume of Thus, MML can have an effective
new products marketing campaign for new
products to approach the right target
customers.
- The marketing department needs to
implement marketing campaigns on
different distribution channels to
approach more target consumers
31
and organize events to improve
brand awareness.
- Based on the marketing campaign
for new products, the sales
department can find potential
customers and sell as much as they
can to gain max profits which come
from the physical stores or online
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