SUPPORT ACTIVITIES

1.Firm infrastructure

a) In terms of scale:
From three factories specializing in milk
production, namely Thong Nhat, Head of Life Mi
Dielac, Vinamilk has constantly built a distribution
system to create a premise for development. With the
right development orientation, dairy factories: Hanoi,
Binh Dinh, Can Tho, Saigon and Nghe An joint
ventures were born, processing and distributing milk
and milk products covering the domestic market.
Continuously expanding production and building
more factories all over the country (currently 5 more
factories are being built), Vinamilk has become the
leading enterprise of the dairy processing industry,
taking over. most of the market share of milk in
Vietnam, gaining more than 6. 000 billion VND,
paying over 500 billion VND to the state budget.
Vinamilk currently has more than 200 items of milk
and milk products such as condensed milk, infant and
adult milk powder, nutritious powder, fresh milk,
drinking yogurt, soya milk, cream, cheese, Fruit
juice, biscuits, pure coffee, tea. . . All products must
meet international quality standards. | Vinamilk has
also established a deep and wide distribution system,
considering it a backbone for long-term business
strategy. Currently, the Company has over 180
distributors, more than 80, 000 retail outlets
nationwide. Competitive price is also the strength of
Vinamilk because the same products on the market
have higher prices of Vinamilk. Therefore, in the
context of having over forty active businesses,
hundreds of milk brands of all kinds, including many
multinational corporations, fiercely competing,
Vinamilk still stands firm and affirmed its leading
position in Vietnam's dairy market. Regarding
general assessment, infrastructure has a strong and
good impact on Vinamilk. Solid infrastructure is a
strong point for Vinamilk to have a solid foundation
in technology development, thereby building its
image in the hearts of customers, which creating
 competitive advantage with current competitors and
at the same time create a solid barrier against
potential competitors.
b) In terms of financial capacity:
In 2013, VNM's business results were quite good
with revenue of 30, 948 billion, up 17%,
consolidated after tax profit of 6, 534 billion, up 12%
compared to the year. 2012. In 2014, VNM set a
target of total revenue of VND 36298 billion, up
14, 9% y-o-y. However, target EBT is VND 7531
billion and NPAT is VND 5993 billion, down 6% and
8, 3% compared to 2013.

(source: BCTC VNM)

2.Human resources management

a) Personnel structure:
 The company has an enthusiastic and experienced staff
in the industry. President Mai Kieu Lien has over
thirty years of experience in the dairy industry and
plays a key role in the company's growth and
development process. Other senior members also have
an average of more than twenty years of experience in
the production, distribution and sales of dairy
products. In addition, the company has a strong middle
management team that is well equipped to support
senior managers while adding youth and enthusiasm to
the development of the company. Vinamilk has a
research and development team of ten engineers and a
technical staff. The personnel working in the research
work closely coordinate with the marketing
department, the bouncing department to continuously
collaborate with market research organizations to
determine consumer trends and tastes.

b) Recruitment training:
The company also trains a marketing and sales team
with experience in analyzing, identifying consumer
trends and trends, and assisting direct salespeople who
understand the tastes of people. Consumption through
access to rewards with customers at many points of
sale. Vinamilk is considered one because he has a
highly qualified, enthusiastic, dynamic and well-
trained staff. Therefore, the human resource factor
always has a good and strong impact on the success
 and failure of the company in general and the business
activities produced by them in particular.
3.Technology Development

a) Technology development:
Using modern production and packaging technology in
all factories. Import technology from Europe such as
Germany, Italy and Switzerland to apply to production
lines. In 2012, Vinamilk invested in two large dairy
factories in Binh Duong. That is the infant formula
factory 2.000 billion VND, operating from April 2013,
and the liquid milk factory invested 2, 400 billion
VND has just been completed on September 10-9.
Both factories are equipped with modern technology
so that products can meet international standards of
food safety and environment, reduce production costs,
and compete with Famous milk brands in the world.
Vinamilk is implementing equipment and production
technology of international standards. Modern
production and packaging technology are used in all
factories. Vinamilk imports technology from European
countries such as Germany, Italy and Switzerland to
apply here. Vinamilk is the only company in Vietnam
that owns a machine system using spray drying
technology developed by Niro Denmark, the world
leader in industrial drying and manufacturing
technology. Companies like Dutch Girl (a subsidiary
of Friesland Foods), Nestle and New Zealand Milk
 also use this technology and production process. In
addition, Vinamilk also uses international standard
production lines supplied by Tetra Pak to produce
dairy products and other value-added products.
Vinamilk currently has 5 dairy farms in Tuyen Quang,
Thanh Hoa, Nghe An, Binh Dinh and Lam Dong with
about 11,000 cows provide 90 tons of milk / day. In
addition, VNM is also closely associated with more
than 5.000 dairy farmers with 65,000 cows
nationwide, purchasing 460 tons of milk / day.
Meeting 30% of raw materials, 70% of raw materials
and VNM importing New Zealand, US and EU whole
milk powder, Price of whole milk is currently trading
at 4, 8 24 USD / ton, up 24% over the same period last
year. Fluctuations in raw material prices Greatly affect
the business results of Vinamilk.
b) Research and development:
Enterprises already have a transfer department to carry
out research and development work in enterprises.
There is a marketing and sales team with experience in
analytics and identify consumer tastes and trends,
access customers regularly at many points of sale
research and development products from the
perspective of improving product quality and
expanding product lines for consumers. For example,
the understanding of the tastes of children from 6 to 12
years helped Vinamilk successfully launch a marketing
strategy named Vinamilk Milk Kid in May 2007. As a
result of this marketing strategy, Vinamilk Milk Kid
becomes the best-selling dairy in the market segment
for children aged 6-12 years in December 2007.
Successful improvements may also allow the company
to reduce costs per unit of product. The skin on these
assessments is a factor that has both a negative impact
and a good impact on the company's operations and
these impacts are relatively strong. Therefore, in the
process of operation, Vinamilk should closely monitor
the research and market development issues in order to
overcome and limit negative impacts while promoting
positive impacts to help the company. steadily growing
and developing, 4. Procurement of Vinamilk has set a
goal of developing fresh milk material areas to replace
imported raw materials by supporting farmers and
consuming products, constantly developing milk
purchasing agents. If in 2001, the company had 70
agents of fresh milk, so far there are 82 agents across
the country, with the amount of milk purchased about
230 tons / day. The transit agents are organized with a
wide and rational distribution system to help farmers
in a convenient way, in the fastest time. And to ensure
stable purchasing, the company has four large dairy
farms in Tuyen Quang, Lam Dong, Thanh Hoa and
Nghe An with a modern technical equipment system.
Each cow is wearing an electronic chip to check milk
production accurately. dy Vinamilk also invested 11
billion VND to build 60 milk tanks and preliminary
 processing workshops with fresh milk storage
equipment, regular technical staff of Vinamilk to
farms, households for inspection and guidance. Dairy
cow breeding techniques for high productivity and
quality, Bonus money and help poor households to
raise milk to billions of dong. Thanks to reasonable
support and incentive policies, Vinamilk has created
jobs for tens of thousands of rural workers, helping
farmers to stick with the Company and with dairy
farming, contributing to changing the face of rural
areas and improving living standards, bringing the
total number of dairy cows from 3 1. 000 children to
105. 000 children. Overall, this is a reassuring factor
for Vinamilk's executives because it has both a strong
impact and is assessed as good to the production and
business situation.

PRIMARY ACTIVITIES

1.Inbound logistic

In order to meet the demand for production, Vinamilk

purchased milk from dairy farmers. The company has
also encouraged farmers to raise dairy cows by
consuming all fresh milk products at high prices (higher
than the world prices), accepting reduced profits from
processing (each year from 15-25 billion VND). ) to
compensate for the high milk purchase price, at the same
time provide technical support for preliminary
processing, storage and preservation of fresh milk for
farmers. In addition, the company has also formed
domestic material areas by building dairy farms. For
dairy companies, the supply of quality and stable raw
milk is especially important.Therefore, Vinamilk has
built strong relationships with suppliers through financial
policies and financial support for farmers to buy dairy
cows. Manufacturing plants are located at strategic
locations close to dairy farms, allowing the company to
maintain and promote relationships with suppliers. At the
same time the company also carefully select the location
where the milk collection center is located to ensure fresh
and good quality milk. Besides, Vinamilk also imports
powdered milk from Australia and New Zealand to meet
 production needs in both quantity and quality. This is a
very important factor to help businesses stabilize their
business and increase production.

2.Operation
Activities of the company Vinamilk Company
distributes goods through Phu Thai Group to agents
and shops. Agents, stores, supermarkets play a role
in getting milk from distributors and supplying milk
to consumers. The company's agency system is
divided into two categories: a group of dairy
products including goat milk, milk powder,. . . and
ice cream, milk cream and yogurt products. The
dairy product group is the key product of the
company so Vinamilk has set out conditions for
agents to not sell any other products to this product
line. As for ice cream products, this is not the main
product of the company and the competitiveness is
not available, so Vinamilk advocates widespread
sales, does not stipulate strict conditions for agents.
Vinamilk has two main distribution channels
Traditional distribution channels distribute more
than 80% of the company's key products. Vinamilk's
distribution units must also meet certain
requirements and be subject to direct supervision by
Vinamilk. There is also a modern distribution
channel (such as supermarket system, metro.).
Vinamilk has a system of dairy factories across the
country, with more than 5000 agents and 178,000
retailers. This contributes to making Vinamilk able
to supply products promptly and quickly to
consumers. | Besides, Vinamilk also exports to
Australia. Cambodia, Iraq, USA. . . With post policy:
Right product, Right quantity and Right time.
Vinamilk is increasingly creating trust in customers
and occupying a huge market share in our country's
industry. Just like the input factor, the output factor
also strongly affects the business activities of the
company. But it can be seen that one of Vinamilk's
 members is an extensive output. This is the company
with the highest market share in the industry system.
This is the company with the highest market share in
the industry system.

3.Outbound logistic

Vinamilk's distribution network is a competitive

advantage that is stronger than other competitors in the
Vietnamese market. Vinamilk owns a wholesale
distribution system consisting of 220 independent
distributors present. In 64 provinces across the country,
these distributors serve more than 140,000 outlets
nationwide, and the company also sells goods directly to
supermarkets, offices, factories and at consulting points.
nutrition of the company. In addition, the company also
organizes many promotional and marketing activities
with local distributors to promote products and build
brands throughout the country. In coordination, Vinamilk
has opened 14 product showrooms in big cities like
 Hanoi, Da Nang and Ho Chi Minh City. Minh and Can
Tho. Vinamilk is one of the few food and beverage
companies equipped with a refrigerator and freezer sales
system. The investment in the refrigerator and freezer
sales system is a major barrier for competitors who want
to participate in the food and beverage market, by
equipping a refrigerator and freezer sales system r
equires a huge investment. Besides domestic distribution
network, the company also has official distributors in the
United States, Europe, Australia and Thailand. Vinamilk
will also soon establish a distribution network in
Cambodia and other neighboring countries.

4.Marketing and sales

a) Status of marketing and sales of Vinamilk.

Marketing and sales are considered the most important

factor in bringing products to consumers' minds.
Vinamilk in particular and the dairy industry in general
constantly innovate marketing and sales campaigns to
attract market share and dominate the market.

Like most business units, Vinamilk also promotes

advertising on mass media: television, magazines,
internet, and posters. . Vinamilk's advertisements are not
simply the introduction of products, but each ad has its
own meaning. Absorbing the spirit of kindness and
always touching the hearts of viewers, this makes
Vinamilk different from other competitors. For example,
advertising fresh milk with images of green, green and
sunny grass fields attached to it is a fun dancing cow. All
show close proximity to nature full of vitality. The song
"100 percent pure fresh milk" always goes deep into the
minds of customers by grace and humor.

Besides, Vinamilk also has very meaningful

advertisements such as advertising using Trinh Cong
Son's song with the expression of Le Cat Trong Ly quite
strange "living in a life needs a heart, to do what you do
know, let the wind blow away, let the wind blow away
”and wind blows the balloons to bring Vinamilk milk
cartons to poor children, in addition Vinamilk also
conducts product testing programs in public places:
supermarkets, schools. . . and the company also invests
in stores to display products to serve customers.
Moreover, Vinamilk always has promotions suitable for
each product. Especially promotion for students on the
occasion of the new school year. The programs not only
attracted children but also attracted parents, who are
mainly responsible for spending money on Vinamilk
products.

b) Public Relations

Vinamilk has always been one of the leading

companies in activities for the benefit of the
community such as the program "6 million glasses
of milk for poor children", the fund "Vinamilk to
 cultivate young talents", the study promotion
programs and the Nursing Vietnamese Hero
Mothers. . . These social activities not only
contribute to improving the lives of Vietnamese
people but also contribute to building a good image
of Vinamilk in the public.

c) Sales

For good sales, Vinamilk has carefully researched

the purchasing behavior of consumers so that there
are suitable and superior products. With a wide
distribution system, Vinamilk creates the best
conditions for customers to access and select
products. It is undeniable that Vinamilk has
outstanding marketing strategies compared to its
competitors, Vinamilk brand has become satisfied
with Vietnamese consumers. Therefore, this is the
factor very strong impact on the company's business.

5. Service
Vinamilk's business motto: "High quality, reasonable price,
customer-centric" and "Satisfied consumers, we can be
assured". Vinamilk always considers customers as a center
and is committed to meeting all customers' needs, ensuring
products reach consumers by best service and price.

About after-sales service: customers will be answered all

questions, if there are problems while using the product,
customers will receive early response from the
management. Vinamilk also has a telephone support
service to quickly resolve all possible incidents. Vinamilk
also requires distributors to have a data backup system to
simulate the case of a problem system

6) Linkages in the value chain

The linkage in the value chain represents the relationship

between the implementation of the value chain and the
associated costs or other activities. For Vinamilk, the
linkages in the value chain are very diversified, reflected in
many different stages in the process of management,
production and coordination. The first is to mention the
input logistics activity of Vinamilk, the construction of
large dairy farms has helped the company save a lot of
costs for importing milk from abroad. Such as
transportation costs, gender costs, inspection costs,. . .
Besides, the construction of a domestic livestock system
also helps Vinamilk control input supply, the company's
experts can monitor the process of raising cows and
collecting milk, which helps control better quality milk
before putting into production. This combination helps
Vinamilk lower product costs, create a better competitive
advantage than competitors.

To create links requires information between activities.

Therefore, with its position as a leading enterprise in the
dairy industry in Vietnam, Vinamilk soon invested in its
own modern and international standard technology
equipment. This modern machinery system contributes to
help the company operate smoothly, production is
shortened, limit waste products and create quality products
that can compete with big companies like Dutch Lady,
Abbott USA , . . . Employees are also more professional,
less time-consuming, ensuring quality output. | Vinamilk,
with its long-standing reputation and brand name, has
created close relationships with suppliers, and with a
strong financial potential that helps Vinamilk to ensure
input materials, the inspection is followed Strict also
contributes to cost reduction in production stages and
quality control. - In addition to owning a dense distribution
system, factories are installed across the entire country to
help the company ensure supply, ensuring the fastest
response to customer needs and saving time. space as well
as transportation, advertising and marketing costs ....

The links in the value chain of an enterprise are the key to

competitive advantage. When values are closely linked,
this will create brand, reputation, quality and save a lot of
costs. So far Vinamilk is one of the few Vietnamese
companies to do that, which is also the reason for Vinamilk
to exist, develop and become the pride of the Vietnamese
people.