Business Strategy Analysis for Vinamilk

Viet Nam National University Ho Chi Minh City
ECONOMICS AND LAW UNIVESITY
ESSAY
Semester 1/2022 – 2023
FINANCIAL ANALYSIS
Supervisor: Hoàng Thị Mai Khánh
Tilte:
BUSINESS STRATEGY ANALYSIS FOR VINAMILK
GROUP 5

Contents
1. Vietnam diary industry analyse.............................................................................3
1.1. Rivalry..............................................................................................................3
1.2. Potential of New Entrants Into an Industry ·..................................................5
1.3. Power of Suppliers ·........................................................................................5
1.4. Power of Customers ·......................................................................................6
1.5. Threat of Substitutes.......................................................................................7
2. Vienamilk’s stategy analyse: Cost leadership.......................................................7
2.1. Economics of scale, scope, and learnings.......................................................7
2.2. Simpler product designs..................................................................................8
2.3. Lower L&D.......................................................................................................8
2.4. Lower costs of input and distribution.............................................................8
2.5. Efficient organizational processes..................................................................9
2.6. Efficient production.........................................................................................9
3. Bussiness analyse.................................................................................................11
3.1. Bussiness overview........................................................................................11
3.2. SWOT analyse...............................................................................................14
3.2.1. Strengths.................................................................................................14
3.2.2. Weak.......................................................................................................14
3.2.3. Opportunity............................................................................................14
3.2.4. Threat.....................................................................................................15
4. Conclusion............................................................................................................15
2

1. Vietnam diary industry analyse
1.1. Rivalry
According to Euromonitor, Vietnam's dairy market reached VND 135,000 billion by
2020, an increase of 8% compared to 2019, thanks to the rapid growth of the yogurt
and milk segment. The commodity industries recorded high growth including water
milk (+10%), yogurt (+12%), cheese (+11%), butter (+10%) and other dairy products
8% While powdered milk only increased by 4% in value.
The water milk segment will achieve a double growth of 7.7% in sales in the period of
2021-2025 thanks to: The increasing demand for water milk due to schools reopened
and the Government promoted the "School Milk Program " - Milk is distributed to
preschools and elementary schools, with efforts to improve nutritional and physical
stature for children.
Vinamilk is still the leader of diary industry in Vietnam thanks to the system of
factories and farms of this unit consisting of 13 large factories and 160,000 dairy
cows, giving this business a difficult production capacity to catch up with.
3

Vietnamese milk market share 2021 Vietnamese milk market share 2020
Although Vinamilk is leading in market share, other competitors are gradually gaining
higher market share over the years. TH True Milk increased from 7.2% to 11% during
2020 to 2021, and promises to be a heavy competitor to Vinamilk in the future. The
success of TH True milk in recent years is thanks to the brand positioning of FRESH
MILK company. The success of TH True milk in recent years is thanks to the brand
positioning of FRESH MILK. TH True milk besides focusing on improving product
quality by enhancing production process with advanced technology instead of cutting
costs, they also succeed in advertising their dairy products with associated with the
image of pure and healthy milk. As income and awareness of health care of
consumers increase, it will lead to an increase in the demand for high-quality milk
products.
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