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- Introduction
- Vision mission
- EFE matrix
- CPM matrix
- 5 forces
- Current strategy
- Internal ana

Giới thiệu chung

Introduction: Vietnam Dairy Products Joint Stock Company (Vinamilk)
- Established in 1976, Vinamilk was established under the name Southern Milk - Coffee Company,
- Vinamilk is the leading nutrition company in Vietnam and one of the Top 40 world dairy
producers in the world in terms of revenue, currently dominating 75% milk market share in
Vietnam.
- The brand produces and trades milk and dairy products as well as related machinery and
equipment in Vietnam, was the 15th largest company in Vietnam in 2007.
- The company owns a large distribution network across the country, their products are mainly
consumed in the Vietnamese market and also exported to foreign markets such as Australia,
Cambodia, Iraq, the Philippines and the US.
- Vinamilk's product portfolio includes: main products are liquid milk and powdered milk; products
with added value such as condensed milk, edible yogurt and drinking yogurt, ice cream and
cheese.
- Vinamilk provides the market with the widest range of products, over 200 sterilized and
pasteurized milk products and products made from milk with different flavor and packaging
options,

Core value:
- Integrity: Integrity and honesty in behaviour and in all transactions.
- Respect: To have self-respect, to respect colleagues. To respect the Company and partners. To cooperate
with respect.
- Fair: Fair with employees, customers, suppliers and stakeholders
- Compliance: Comply with the Law, Code of Conduct and company regulations, policies and regulations.
- Ethics: Respect established ethical standards and act accordingly

Phân tích tầm nhìn, sứ mệnh

Vision : To become a world-class brand in the food and beverage industry with nutritional and health
products that are trusted by everyone.
This Concept - based vision statement implies that:
- Vinamilk's ambition to become a "world-class brand" in the food and beverage industry. This
indicates that the company aims to achieve a level of global recognition, reputation, and excellence in its
operations.
- Food and Beverage Industry: The vision statement specifically highlights Vinamilk's focus on the food
and beverage industry, suggesting that this is the core business domain where the company aims to
establish its presence and leadership.
- Providing Nutritional and health products: Vinamilk products not only cater to the basic food and
beverage needs of consumers but also address their health and wellness requirements.
- Trusted by everyone: Vinamilk's desire to build a strong reputation for reliability, quality, and
consumer confidence in its offerings in order to appeal to a variety of customers and become the go-to
option for people looking for dependable, health-conscious food and beverage options.

Overall, the vision statement shows Vinamilk's ambition to become a globally recognized brand in the
food and beverage industry. The brand commits itself to provide nutritional and health products that meet
high standards of quality, healthfulness, and consumer satisfaction.

Mission: To provide the community (1) with topclass nutrition and quality (7) with respect, love and
responsibility for human life and society. (6,8)

Mission Statement Components

1. Customers- Who are the firm’s customers? ✔

2. Products or services- What are the firm’s major products or services?

3. Markets- Geographically, where does the firm compete?

4. Technology- Is the firm technologically current?

5. Survival, growth and profitability- Is the firm committed to growth and

financial soundness?

6. Philosophy- What are the basic beliefs, values, aspirations, and ethical ✔
priorities of the firm?

7. Self-concept- What is the firm’s major competitive advantage? ✔

8. Public image- Is the firm responsive to social, community, and ✔

environmental concerns?

9. Employees- Are employees a valuable asset of the firm?

The mission statement lacks components 2, 3, 4, 5, 9. New mission statement suggested:

To provide the community (1) with top-class nutrition and quality (7) dairy products, (2) we focus on the
innovation of new technologies in manufacturing. (4) We aspire to retain Vietnam's dairy sector (3)
leadership while maintaining respect, love, and responsibility for human life and society. (6, 8) We are
committed to using our competitive advantage to meet our intentions for sustainable development,
innovation, and value enhancement for stakeholders. (5) With a positive work culture and authenticity, we
encourage our team members to be engaged and creative (9)

Phân tích các chiến lược đang áp dụng

1. Integration Strategies
- Horizontal Integration: 2019: Vinamilk completed the acquisition of Moc Chau (One of the
biggest competitor of Vinamilk with the market share of 9%) by buying 75% stock of its Parent
company (GTNFoods)
→ 2024: Moc Chau reported the highest revenue in 65 years, contributing to the revenue of Vinamilk as a
whole.

- Backward Integration:
+ 2014: Vinamilk established Vinamilk Europe Spóstka Z Organiczona
Odpowiedzualnoscia in Poland to purchase high-quality raw materials to serve the milk
production activities of Vinamilk and other subsidiaries.
+ 2017: Vinamilk took over and participated in operating Vietsugar
+ 2018 - Lao-Jagro: Vinamilk officially held 51% of Lao-Jagro's shares and created a new
turning point with the development of the Organic Dairy Farm Complex project in Laos,
aiming to form a milk raw material area to supply to the Vietnamese market and the
Asian region
→ Stabilise the supply of Vinamilk: from owning 8.200 cows in 2012 to 140.000 cows in 2023

2. Intensive Strategies
a. Market Development:
- 2014 - Angkormilk: a 100% subsidiary of Vinamilk was awarded an investment licence to build a
dairy factory in Phnom Penh, Cambodia.
- 2016 - Driftwood: Vinamilk acquired Driftwood to expand the market to California, The United
States.
- 2021: Del Monte – Vinamilk Dairy Philippines, Inc. Joint Venture: Vinamilk has announced its
business partner in the Philippines as Del Monte Philippines, Inc., a leading F&B business in the
Philippines.
→ Expand the market to the ASEAN area and the U.S market.

b. Market Penetration
2019 48%

2020 43.3%

2021 43.7%
 2022 50%

2023 55%
- 2019-2020: COVID-19 pandemic made Vinamilk to cut their spending on marketing
- 2020 - now: Put much effort in Marketing to regain and boost the market share
+ “Bảo tàng tuổi thơ” with Ông Thọ condensed milk
+ Collaborate with VTV to introduce “Việt Nam Vui Khỏe” programme
+ The "Million glasses of milk" strategy is Vinamilk's social activity with the Vietnam Fund
for Poor Children to bring millions of glasses of quality milk to children in all regions of
the world.
+ “40 năm vươn cao Việt Nam”
- 2023: major rebrand in to target
+ Gen Y, Z and alpha customer in Vietnam, who tends to support the interference of
traditional and modern style
+ Gen X and Baby Boomers by recalling memories of a bygone era in memory
- Results:
+ Created a trend among the young generations
+ Some of the elderly, on the other hand, claimed they had not recognised Vinamilk in the
new brand identity, therefore thought they couldn’t find them, leading to a reduction in
buying Vinamilk products.
→ There is still a lot of controversy surrounding the new brand identity. However, it certainly created a
big hit to the young generation and served it purpose to help Vinamilk go global

c. Product Development
- 2018 - 2024: Vinamilk introduce more than 100 new products
- Significant new product:
+ Ông Thọ is the best-selling and top-of-the-mind condensed milk brand in the past half
decade in Vietnam.
+ 2020: Vinamilk introduce the new version of Ông Thọ condensed milk with innovation of
adding vegetable oil to the ingredient
+ 2023: Vinamilk introduce 2 more version of this with new flavour - strawberry and
chocolate
→ Helped Vinamilk to increase the market share of condensed milk to more than 75% in 2023

3. Diversification Strategies
- Related Diversification: Vinamilk introduced infant cereal products (Ridielac) to boost the sale of
infant powdered milk (dielac alpha, optimum, grow plus, etc.).
- Unrelated Diversification:
+ Vilico - a subsidiary of Vinamilk - transformed to become a large unit in the field of
livestock farming and meat product processing in Vietnam.
+ The project is to start in 2024, therefore, there is not any evidence about the effectiveness
of this yet

4. Defensive Strategies
Currently, Vinamilk is the leading enterprise in the field of dairy product production in Vietnam,
accounting for more than 55% of the market share. Therefore, they are not applying any defensive
strategy.

5. Nguồn
- https://vietnamnet.vn/en/vinamilk-completes-acquisition-of-moc-chau-milk-606715.html
- https://baodautu.vn/vinamilk-thau-tom-thanh-cong-driftwood-dairy-hoa-ky-d45224.html
- https://www.dairyvietnam.com/vn/Kinh-te-Thi-truong/Vinamilk-cong-bo-doi-tac-lien-doanh-tai-P
hilippines.html
- https://www.vinamilk.com.vn/vi/thong-cao-bao-chi/1895/vinamilk-lien-doanh-voi-doanh-nghiep-
lao-va-nhat-ban-khoi-cong-xay-dung-to-hop-resort-bo-sua-organic-quy-mo-5000ha-tai-lao#:~:tex
t=C%C3%B4ng%20ty%20Lao%2DJargo%20%C4%91%C6%B0%E1%BB%A3c,tr%C3%AAn
%20cao%20nguy%C3%AAn%20Xi%C3%AAng%20Kho%E1%BA%A3ng.
- https://tapchitoaan.vn/vinamilk-day-manh-dau-tu-va-khai-thac-thi-truong-nuoc-ngoai8715.html#:
~:text=Sau%20Driftwood%2C%20th%C3%A1ng%201%2F2014,v%C3%A0%20an%20to%C3%
A0n%20th%E1%BB%B1c%20ph%E1%BA%A9m.
- https://www.dairyvietnam.com/vn/Kinh-te-Thi-truong/Vinamilk-cong-bo-doi-tac-lien-doanh-tai-P
hilippines.html
- https://www.vinamilk.com.vn/cong-bo-san-pham/
- https://www.statista.com/statistics/1359610/vietnam-market-share-of-major-dairy-brands/
- https://www.statista.com/statistics/1233523/vietnam-drinking-milk-products-companies-market-s
hare/
- https://tapchicongthuong.vn/sau-3-nam-ve-chung-nha-voi-vinamilk--moc-chau-milk--mcm--bao-l
ai-cao-nhat-65-nam-116810.htm
- https://www.kaiza.vn/blog/tin-tuc/phan-tich-bo-nhan-dien-moi-cua-vinamilk-325#:~:text=B%E1
%BB%99%20nh%E1%BA%ADn%20di%E1%BB%87n%20m%E1%BB%9Bi%20th%E1%BB
%83,tr%C3%AAn%20th%E1%BA%BF%20gi%E1%BB%9Bi%20%C6%B0a%20chu%E1%BB
%99ng.
- https://sobanhang.com/diem-lai-4-chien-luoc-marketing-cua-vinamilk-thanh-cong-vang-doi/
- Báo cáo thường niên

Phân tích môi trường bên ngoài

I. pestel
1. Political and Legal Factor:

Evidence

Since the period of renovation, Vietnam officially normalized relations with China in 1992 and with the
United States in 1995, and joined the ASEAN bloc in 1995. Vietnam has established diplomatic relations
with 171 countries. An important turning point was on January 11, 2007, when Vietnam officially became
the 150th member of the WTO. Currently, Vietnam has participated in signing Free Trade Agreements
(FTAs, CPTPP), which bring many advantages to the market for the development of manufacturing and
food processing industries.
Vietnam is traditionally an agricultural country, so the government always encourages dairy industry to
develop such as:

- The School Milk Program, aimed at improving nutrition and enhancing the physical stature of
preschool and primary school children until 2020, was approved by the Prime Minister in
Decision No. 1340/QD-TTg.
- Decision No. 3399/QD-BCT of the Ministry of Industry and Trade: Approval of the Development
Plan for the Vietnamese Dairy Processing Industry until 2020, with a vision to 2025.

On the matter of customs duties, Vietnam imposes a regular import duty of 22,5%, a preferential rate of
15%, and a Value-Added Tax (VAT) of 8% on most goods and services. Special import duties from
countries like South Korea and China can be as low as 0%.

However, some regulations also pose challenges for dairy production and business operations, such as:
- The requirement for each product to have a certificate of food safety conditions or the prohibition
of using terms like "colostrum," "mother's milk," and "fresh milk" (Clause 7, Article 3 of Decree
No. 98/2020/ND-CP)

Assessment

The dairy products industry in Vietnam, much like other sectors, benefits from the country's political
stability as a single-party socialist republic, which has remained steady amidst global economic ups and
downs. This consistency, often more so than in capitalist countries, eases business entry into the
Vietnamese market. Favorable conditions such as low import duties and supportive tax policies, including
a lower Corporate Income Tax (CIT), bolster businesses by reducing competition from abroad and
facilitating capital growth, production, and employment opportunities. These advantages allow foreign
dairy brands to more effectively compete in Vietnam, leveraging the country's integration into the global
market while maintaining economic stability.

-> The dairy industry in Vietnam must comply with regulations regarding technical standards, food safety,
labeling, and advertising set by the government. These regulations are intended to protect consumers'
rights and enhance the quality of domestic milk products.

2. Economic Factor:

Evidence

● GDP:
The Gross Domestic Product (GDP)
for the first quarter of 2024 is estimated
to increase by 5.66% compared to the
same period last year, higher than the
growth rate of the first quarter in the
years 2020-2023.
(According to the THÔNG CÁO BÁO
CHÍ TÌNH HÌNH KINH TẾ – XÃ HỘI
QUÝ I NĂM 2024 by the General Statistics Office).

The potential for industry development:

In 2023, the nationwide output of fresh milk is estimated to reach 1,860.8 million liters, an increase of
7.5% compared to 2022. The output of powdered milk reached 154.8 thousand tons, a slight increase of
0.1% compared to 2022.

● Average Income:
Wages in Vietnam increased to 7.326 VND million/Month in the fourth quarter of 2023 from 7,146 VND
million/Month in the third quarter of 2023.

➔ This indicates that the economic growth rate and people's income are gradually increasing. This
significantly affects the consumption of milk by the company.

● Inflation Rate:
The current inflation rate in the economy is at 3.5 - 4.5% per year. The average inflation rate in 2022 was
3.8%, much lower than the global inflation rate of 5.7% in developed countries and 8.7% in developing
countries.
 ● Interest Rates and Exchange Rates:
- The USD has shown a strong upward trend, with a roughly 13% increase by the end of May 2022
compared to the same period in 2021, resulting in many currencies depreciating significantly against the
USD.
- Faced with continuously increasing pressure on exchange rates and foreign exchange markets, and with
difficulties in balancing supply and demand for foreign currencies, in 2022, the State Bank of Vietnam
actively managed the exchange rate:
Decision No. 1747/QD-NHNN adjusted the spot exchange rate band for USD/VND from +3% to +5% on
October 17, 2022.

-> The State Bank of Vietnam has maintained flexibility in exchange rate fluctuations, suitable for market
conditions, thereby contributing to absorbing external shocks and ensuring the smooth operation of the
market.

● Trade Balance:
Vietnam's trade balance is also showing signs of improvement. The report on the implementation of
Resolution No. 01/NQ-CP, the situation of industrial production, and trade activities in December and the
whole year of 2023, indicates that the total import-export turnover in December reached $63.54 billion,
up 4.7% compared to the previous month and up 12.7% compared to the same period last year. The trade
balance of goods in 2023 is estimated to achieve a surplus of $28 billion. Notably, goods exports have
seen a significant increase, exceeding $30 billion per month in the last 6 months (from July 2023 until
now).

Assessment

Good points:

The strong GDP growth, rising industrial output, increasing wages, and improving trade balance suggest
that the Vietnamese economy is on a steady upward trajectory. These positive trends present favorable
conditions for the dairy industry,creating opportunities for further growth.

Threats:

potentially intense competition with foreign brands

However, it is important to acknowledge that certain challenges remain. Inflationary pressures, fluctuating
exchange rates, and the need to continuously improve technological processes within the dairy industry
itself are all factors that require careful consideration.

3. Environment, Social Factor and Demographic:

● Demographic:

Evidence

According to Research and Markets, milk consumption per capita in Vietnam is approximately 28 liters
per person per year, and it continues to increase steadily each year. This is quite impressive compared to
the average consumption in the Southeast Asia region, which stands at 18 liters per person per year.

- Age: from newborn babies to the elderly, people of all ages are milk consumers. There are specialized
products for newborns such as Nan Optipro, for 6-11 kids such as Friso, Vinamilk, TH,..., and for
grown-ups such as Ensure, Anlene.
- Income:
Higher Income: Individuals with higher disposable income are more likely to afford a wider variety of
dairy products, including imported options.
Lower Income: Price sensitivity may limit milk consumption for lower-income households, who might
prioritize staple foods.
- Location:
Urban Areas: Urban residents generally have higher incomes and easier access to supermarkets and stores
with a wider variety of dairy products, leading to potentially higher milk consumption.
Rural Areas: Access to fresh milk and diverse dairy options might be limited in rural areas, potentially
impacting consumption rates.
- Education Level:
Higher Education: Individuals with higher education levels might be more aware of the health benefits of
milk consumption, leading to potentially higher intake.

Assessment
- Age and Income: Milk consumption is likely highest among children and the elderly, with
higher-income individuals having the potential to consume more due to affordability.
- Location and Education: Urbanization and higher education levels could contribute to increased
milk consumption due to easier access and greater awareness of health benefits.

● Consumption Trends:
The milk market in Vietnam currently comprises approximately 200 businesses, including 40
manufacturing enterprises. Domestic enterprises hold about 75% of the market share, while foreign
enterprises hold around 25%.

Vietnamese consumption habits have been changing in recent years, such as the trend of health
consciousness and regularly using nutritional products as meal replacements. -> The demand for
high-value milk products is forecasted to increase significantly due to the growing young population and
the increasing number of people in the middle class in large cities.
Indeed, Influencer Marketing has significantly impacted
consumer behavior, leading to significant changes in how
Vietnamese consumers make purchasing decisions.
(Spending on Influencer Marketing reaching an
astonishing figure of 64.23 million USD in 2022,
according to a report by AJ Marketing)

-> With an astounding rate of social media participation

(Vietnam being home to 70 million social media
users(71.0% of the total population), according to a report
by Data Reportal), Vietnamese consumers regularly use
social media during their leisure time, making it easier for
them to absorb product recommendations from
influencers. This makes Vietnam an ideal market for
Influencer Marketing strategies.

● Environmental Factor:
Vietnam, with its tropical climate type with air temperatures usually above 25 degrees Celsius and
humidity over 80% poses a significant challenge to dairy farms because cows produce the most milk at
temperatures ranging from 5-21 degrees. Despite the tropical climate, overall there are still suitable areas
for the development of the dairy farming industry, especially in provinces such as Lam Dong, Ba Vi,
Tuyen Quang, Moc Chau (Son La),...:
- Moc Chau, Lam Dong,..: The temperature on the plateau remains cool throughout the year,
typically ranging from 18 to 20 degrees Celsius.
However, Vietnam is prone to frequent natural disasters and floods every year.
 -> It will be easy to obtain raw materials to serve production needs such as fresh milk, sugar... at much
lower costs than importing raw materials from abroad.

-> However, since the raw materials are derived from agricultural products, seasonal issues have a
certain impact on the company's production.

5. Technology Factor:
Vietnam has applied advanced and synchronized technology from countries with developed dairy and
cattle farming industries, such as: incorporating biotechnology to accelerate and increase the rate of calf
breeding, utilizing information technology in processing data collected from chips attached to each cow's
leg, optimizing feed formulation software, applying biotechnology in food preservation and processing,
and farm management technology based on automation models...
Some achievements in milk processing technology:
- According to Dr. Dang Kim Son - Director of the Institute of Policy and Strategy for Agriculture and
Rural Development - Ministry of Agriculture and Rural Development: "The TH true MILK project is a
typical model for the revolution in dairy farming and milk processing."
- A breakthrough step of Vinamilk's new Vinamilk Green Farm product line is the application of dual
vacuum sealing technology. This is a
revolutionary initiative in the milk processing
industry because it has successfully addressed
the challenge of preserving the nutritional value
and fresh taste of milk.
- Some large dairy companies in Vietnam such
as Vietnam Dairy Products Joint Stock
Company (Vinamilk) and TH True Milk
Corporation have been at the forefront of
investing in the Organic Ecosystem, from dairy
farms to factories, developing technology and
R&D, along with introducing consumers to
strict European Organic standards.

6. Competitive Forces:
The fierce competition among domestic and foreign enterprises
- The Vietnamese milk market currently has about 200 active enterprises, of which 40 are involved
in milk production and distribution. Domestic enterprises hold approximately 75% of the market
share, while foreign enterprises account for around 25%.
- Leading domestic enterprises include Vinamilk, TH True Milk, Nutifood, IDP, and Mộc Châu
Milk. Top foreign enterprises include FrieslandCampina (Netherlands), Nestlé (Switzerland),
Abbott (USA), Mead Johnson (USA), and Fonterra (New Zealand).
 ● External Factor Evaluation (EFE) Matrix
From the above analysis, we draw the following opportunities and challenges:
Opportunities:
Political:
- Stable political environment fosters business growth.
- Favourable trade policies like WTO membership and FTAs benefit dairy imports and exports.
- Government support through tax breaks encourages dairy company development.
Economic:
- Strong GDP growth (increase by 5.66%), rising incomes, and improving trade balance indicate a
healthy economy.
Social and Demographic:
- Growing young population and rising middle class create demand for high-value dairy products.
- Social media influence shapes consumer behavior (71.0% social media users of the total
population), potentially favoring Vietnamese dairy brands.
- Increasing milk consumption per capita across all age groups (~28 liters per person per year).
- Higher income and education levels can lead to greater dairy consumption.
Technological:
- Adoption of advanced technologies from developed countries improves efficiency and product
quality.
- Innovations in processing and preservation enhance milk's nutritional value and freshness.
Legal:
- Regulations ensure food safety, labeling accuracy, and consumer rights protection.
Environmental:
- Suitable natural conditions in some regions support dairy farming (Lam Dong, Ba Vi, Tuyen
Quang, Nghe An, Son La,...).

Threats:
Economic:
- Inflationary pressures, fluctuating exchange rates, and need for technological advancements
require attention.
Legal:
 - Strict regulations regarding product names and certifications can hinder production and
marketing.
Environmental:
- Tropical climate requires temperature control for optimal milk production.
- Vulnerability to natural disasters can disrupt production.
Competitive Forces:
- Intense competition in the market with both domestic and foreign players (foreign enterprises
account for around 25%).
- Need to differentiate Vietnamese dairy products to compete effectively.

Table 1.1: EFE Matrix for Vinamilk

Key External Factors Weight Rating Weighte

d
Score

Opportunities

1 Favorable trade policies like WTO membership and 0.10 4 0.40

FTAs benefit dairy imports and exports.

2 Strong GDP growth (increase by 5.66%) 0.20 4 0.80

3 Social media influence shapes consumer behavior 0.10 4 0.40

(71.0% social media users of the total population)

4 Adoption of advanced technologies from developed 0.15 4 0.60

countries improves efficiency and product quality.

5 Regulations ensure food safety, labeling accuracy, and 0.03 4 0.12

consumer rights protection.

6 Suitable natural conditions in some regions (Mộc 0.05 3 0.15

Châu) support dairy farming

7 Increasing milk consumption per capita across all age 0.07 4 0.28
groups (~28 liters per person per year)

Threats

8 Inflationary pressures 0.10 2 0.20

9 Strict regulations regarding product names and 0.03 2 0.06

certifications can hinder production and marketing

10 Vulnerability to natural disasters can disrupt 0.07 2 0.14

production.
 11 Intense competition in the market with both domestic 0.10 3 0.30
and foreign players (foreign enterprises account for
around 25%, FTA)

Total 1.00 3.45

II. Five Forces

1. Threats of new entrants: Low

The dairy industry has high barriers to entry, due to the barriers in economies of scale, capital
requirements, brand recognition, and access to distribution channels.

- Economies of scale

On average, larger farms have lower production costs than smaller farms; the differences are substantial
and hold across a wide range of herd sizes. While herd size is not the only factor that matters for
production costs, these scale-related cost differences are important. As a result, larger farms are more
likely to realize positive net financial returns to milk production.
USDA's Economic Research Service: Average total costs of milk production (expressed in dollars per
hundredweight of production) fell sharply as herd size expanded, from $33.54 per hundredweight among
farms with 10-49 cows, to $27.77 among farms with 50-99 cows, and to $23.68 among farms with
100-199 cows.

ERS also reports on gross and net returns for dairy farms. Despite realizing lower gross returns, lower
costs led to much larger net returns among larger operations than among smaller farms. In 2016, farms
with more than 1,000 heads realized positive net returns, on average, while gross returns per
hundredweight for farms with fewer than 500 heads were well below their average costs.

- Capital requirements:

To set up a standard dairy farm system, businesses need a large amount of investment capital. Most dairy
factories need to invest in comprehensive production lines as well as advanced technology imported from
countries that possess developed technology and dairy equipment such as Sweden, Denmark, and
Germany,...alongside with automatic and semi-automatic self-contained production lines. Enterprises also
need to invest in the automatic control program into the technological line in order to control closely the
technological parameters so the products will have a stable quality.
Moreover, in order to meet the market’s demand, dairy companies depend on imported milk powder
ingredients from reputable partners from countries with strengths in powdered materials, such as the
United States and New Zealand. The sector faces supply and demand imbalances as domestic herds can
only meet about 20-30% of total nationwide demand. Heavy dependence on foreign markets for input
materials creates a risk of margin compression due to fluctuating prices of imported dairy products.

- Consumer loyalty to well-known brands

Statista’s data from 2021 reveals that Vinamilk, a domestic brand, held an impressive 43.7 percent market
share in Vietnam’s dairy market. Following closely behind were TH Food with a 14.1 percent market
share and Friesland with 9.4 percent. The strong presence of well-established domestic brands indicates
that they have already secured a firm foothold and enjoy widespread brand recognition among
Vietnamese consumers.

- Access to supply chain and distribution channels

As dairy products are perishable and the selection of dairy products on the market becomes ever more
diverse, the supply chain has only become increasingly complex, demanding even greater speed and
accuracy throughout. From milking the cows to distributing the product, dairy manufacturers follow strict
processing and handling requirements to ensure that consumers enjoy the freshest and safest milk
possible.

However, the current product distribution channels of the dairy industry have been thoroughly used by
existing businesses. Therefore, new competitors must convince these distribution channels by accepting
high-commission shares.
 2. Threat of substitutes: Medium

In Vietnam, the threat of substitute products in the dairy industry is considered to be moderate. The
Substitutes for Milk Market are diverse:

• Soy Milk

• Almond Milk

• Walnut Milk

• Rice Milk

• Coconut Milk

• Oats Milk

• Others

These products have become increasingly popular among consumers looking for alternatives to cow's
milk. According to Statista, revenue in the Milk Substitutes market amounts to US$83.54m in 2024. The
market is expected to grow annually by 17.84% (CAGR 2024-2028). Large companies such as Vinasoy
have gained market share in the non-dairy milk alternative market, which can impact the sales of
traditional dairy milk producers.

The growing consumer demand for plant-based and non-dairy products derives from concerns about
health, environmental sustainability, and animal welfare.

- More than 60% of the world’s population estimated to be lactose intolerant.

- Plant-based milks often have less overall fat and saturated fat than dairy milk and more healthy
plant phenol antioxidants.
- To produce milk, cows must give birth. If the calves are not needed as replacements for the
milking herd, they are killed, often not humanely. More cows die per calorie of milk production
than cattle for meat production.
- Dairy milk requires 4.2 times more land per half-gallon produced than plant-based alternatives
do. Also, the plant-based beverage production process requires 80% less water and emits 60%
less carbon dioxide per half-gallon than dairy.

Additionally, non-dairy milk alternatives are becoming more widely available, and they are being sold in
many of the same outlets as traditional dairy milk, such as supermarkets, coffee shops, and restaurants,
increasing competition.

On the other hand, plant-based milk contains its fair share of flaws. The taste profile of plant-based milk
is quite different from dairy-based milk. Although plant-based milk has a lower fat content and contains
less cholesterol, cow’s milk has a better nutritional profile than plant milks, with more protein and
micronutrients like calcium. Some consumers still prefer traditional dairy milk's taste, texture, and
nutritional value, which limits the threat of substitute products.

In terms of pricing, plant-based milk generally costs more than twice dairy milk and involves more
expensive blending and bottling procedures and packaging materials.

3. Bargaining power of consumers: High

The dairy industry is also dominated by a small number of large buyers, such as supermarkets and food
processors, which gives them significant bargaining power. For example, large retailers such as Winmart
and BigC have considerable influence over the price and terms of the products they purchase from dairy
companies, which can impact the suppliers' profitability. As buyers are large supermarket chains, for the
most part, they have their own distribution networks which lessen the chance of dairy manufacturers
integrating forward, once again strengthening the buyer’s position.

Considering individual buyers, competition in the dairy industry is very large, leading to a wide range of
options and low price differences in the milk market. In particular, the cost of switching to use products
not only in the same industry but also with substitute products is quite low. Therefore, customers can
choose to use many different milk brands when they need to change the flavor or want to try a different
brand.

In addition, product information has also been published on the Internet, so it is easier for customers to
compare before making a purchasing decision.

Moreover, Vietnam has a growing middle class with increased income. The per capita income of
Vietnamese people has increased to 3,000 USD/year by 2022, allowing them to spend more on imported
and high-end dairy products. Therefore, they increasingly demand for the quality and nutritional value of
milk, especially fresh milk and yogurt. This strengthens the bargaining power of consumers.

4. Bargaining power of suppliers: Medium

Dairy companies in Vietnam purchase raw fresh milk from domestic farms and through association with
local dairy farmers. According to the Vietnam Dairy Association, the country's fresh milk output in 2014
reached about 550 million liters, of which 450 million liters went into fresh milk production, the rest was
used for yogurt, while the total liquid milk supply reaching the market amounted to 914 million liters.
Thus, pure fresh milk only meets nearly half of the market demand.

Most small and medium-sized dairy farmers in Vietnam are part of cooperatives; these cooperatives have
more bargaining power as they have a strong distribution network and can negotiate better prices and
terms with processors and retailers. For example, Ben Tre Dairy Cooperative purchases milk from
members’ farms at a price 5 - 10% higher than the outside market. The total amount of milk the
cooperative sold to Vinamilk in 2022 is about 3,000 tons with an average price of 13,800 VND/kg.
However, many dairy enterprises has invested in developing autonomous farm systems. For example,
since its development until now, Vinamilk has built the 12 largest international standard farm systems in
Asia with a herd of 130,000 cows. Even the source of food for cows is controlled by Vinamilk. TH Group
has so far operated 9 farms with nearly 70,000 dairy cows. Thanks to the optimal feeding, care and
nutrition process, TH farm's dairy cows achieve the highest yield of milk in Vietnam and Southeast Asia.
The average peak season is 35 liters/head/day, equivalent to nearly 11,000 liters/head/305-day cycle. This
has significantly reduced the bargaining power of suppliers.

5. Rivalry among existing competitors: High

- Industry growth

According to VIRAC, the dairy market size is expected to grow from 613.96 billion USD in 2023 to 840
billion USD in 2028, with a CAGR of 6.47% during the forecast period (2023-2028).

There is room to expand in dairy market, as the demand for milk consumption per capita in Vietnam will
reach 40 litres by 2030, along with the middle class and people’s awareness of healthcare increasing. The
report also said that in spite of the high demand, domestic fresh milk production could only meet about
40-50 percent of the domestic demand, with the rest relying mainly on imports.

- Number and diversity of competitors

The dairy market in Vietnam is considered to have developed rapidly with more than 200 dairy
enterprises with hundreds of brands. Of these, medium and large-sized dairies are comprised of 10
enterprises with a total of 26 dairy processing factories (of which Vinamilk alone has 13 factories); the
rest are mainly small and micro enterprises.

In addition, since the accession of Vietnam to WTO, many foreign milk brands such as Abbott, Babysan,
Dumex, Dutch Lady, Meiji, and Nestlé, etc. have entered the market due to Vietnam's tariff reduction
policy when implementing commitments under the CEPT/AFTA and WTO.

- Market concentration

Several major players in the Vietnam dairy industry, such as Vinamilk, TH True Milk, Nutrifood, have a
significant market share in the region. These companies have strong brands and established distribution
networks, which allows them to compete effectively in the market.
In 2020, Vinamilk accounted for 43.7 percent of the total market share of dairy companies in Vietnam.
This was followed by TH Food with a market share of 14.1 percent and Friesland with 9.4 percent. Brand
loyalty emerges as a pivotal factor in this competitive landscape. Major brands have successfully
cultivated a loyal customer base, a feat that relies on long-term engagement and strategic marketing
campaigns. Despite the influx of new product lines and brands each year, establishing customer loyalty is
particularly challenging for smaller brands, which must differentiate themselves and compete against the
dominant players in the industry.
- Production capacity

On the production side, large corporations like Vinamilk and TH True Milk boast established closed-loop
production chain including dairy farms, factories and distribution channels, often resulting in excess
production capacity. This capacity underscores the scale at which these companies operate, contrasting
with the numerous small companies and startups entering the market, which face the challenge of
establishing themselves amidst well-entrenched competitors.

CPM MATRIX

Phân tích môi trường nội bộ

1. Management
- The best measure of the BOD’s effectiveness is through the BOD assessment process. Each
BOD member undergoes evaluation at least once a year to appraise their performance as a
governing body and the overall effectiveness of the BOD’s operations to
facilitate appropriate adjustments.

- Established 04 specialized BOD committees:

+ Strategy Committee: drafting and presenting the company’s business
strategy to the BOD.
+ Audit Committee: reviewing critical financial reporting issues and
judgments to ensure the integrity of the financial statements, internal
control system and internal audit.
+ Nomination Committee: monitoring the implementation of the
succession planning program
+ Remuneration Committee: Developing policies and guidelines, Reviewing and Recommending
salaries, bonuses, and remuneration for members of BOD and BOM
- The BOD has set up the Audit Committee, Internal Audit Department, and Internal Control
and Risk Management Department to establish a robust control environment for the Company.
- Vinamilk’s Code of Conduct is a commitment to uphold integrity, promote respect, ensure
fairness, maintain compliance and value ethics, serving as a guideline for all daily operations and
establishing a standard business culture throughout the Company.
- Continuously develop production, trade and service activities in the fields of business activities to
+ Maximize benefits and enhance the value of the Company in harmony with the interests of
Shareholders.
+ Constantly improve the life, income and working environment of employees.
+ Secure the interests of other stakeholders towards Sustainable and Responsible Development
- The prevention of fraud and corruption and the limitation of conflicts of interest is reflected in
the Regulations on preventing fraud and corruption, which is a top priority for Vinamilk in order
to ensure legitimate interests and maintain a healthy, transparent, equal business
environment and fair competition for partners, suppliers, customers and bring the best benefits to
stakeholders
2. Marketing
- Vinamilk introduced new Fino packaging for existing products
- Vinamilk divides its market segments into two groups:
+ Organization: includes wholesalers and retailers, as well as distributors, supermarkets, and
shops. This segment needs discounts and bonuses based on sales and the number of scheduled
orders.
+ Individuals: include consumers wishing to buy Vinamilk products. This segment is quite
diverse, with good quality, high nutritional value, and various designs.
- Marketing strategy has successfully captured the child customer segment from 5-14 years old.
- Positioning:
+ Vinamilk ranked first in brand recognition (accounting for 40%) and high-value stocks
+ Vinamilk offers a fairly reasonable price, suitable for the income of most Vietnamese people.
● 4Ps Marketing
- Product:
+ Products into five main categories: dairy products, dairy products, fruit juices, tea, and coffee.
+ Committed to providing only products that are good for consumers' health.
- Price:
+ Maintained stable prices for its products in recent years.
- Place:
+ Three main distribution channels: Supermarket, Key distribution channels: schools,
restaurants, hotels, Agents with a scale of more than 220000 facilities nationwide
+ Online stores on sales pages and websites are also developed to support online orders.
+ Expands market share to more than 54 foreign countries and territories.
- Promotion:
+ Advertisement: TVC (VTV1, VTV3), Videos
+ Promtion campaign: lucky draw programs with many great prizes
+ PR: CSR strategies also resonate when conveying meaningful messages and noble ideals.
3. Finance and Accounting
- Before tax profit in 2023: 10,968 billion VND+4.5% YOY
- Net margin in 2023 14.9% +63 BPS YOY
- Vinamilk flexibly leveraged favorable offerings from banks to optimize cash flow and generate
incremental income through deposits and loans.
- Amid exchange rate fluctuations, Opted for the use of derivatives for foreign exchange hedging,
yielding significant benefits through settled foreign currency loan agreements
- The completion of several key digital transformation projects, including the HPM system,
e-invoice upgrade, automated payment solutions, and Power BI, helped Vinamilk enhance
efficiency in internal and customer management.
- Financial Statement 2019 - 2023

4. Production/Operations
- Material Sourcing (Mega Farm Complex, Owned Farms, Raw materials production,... ⇒
Production (Foreign factories, local factories, Moc Chau factory) ⇒ Distribution (Exclusive
distributors, E-commerce, Online shopping,...) ⇒ Customers
 5. Research and Development
- Conducted extensive research on new and improved products, including those for export, to comply with
local and global regulations. Its support extended beyond the Vinamilk brand to include both domestic and
international subsidiaries, such as Moc Chau and Angkormilk (Cambodia)
- Vinamilk’s efforts to align with the world’s highest standards and maintain the commitment
to a noncompromising approach to quality stay unchangeable
- At the national level, Vinamilk provides inputs in perfecting the advanced quality management system
and collaborates with government agencies (such as AOAC SEA, Vietnam Quality Association of Ho Chi
Minh City, Food and Foodstuff Association of Ho Chi Minh City, Vietnam Standards and Quality
Association) to find solutions to help businesses overcome challenges.
- In 2023, the R&D Division contributed opinions on draft decrees, circulars, and laws related to food
safety and hygiene, such as the draft circular on nutrition labeling by the Ministry of Health and various
draft product standards.

IFE MATRIX

Key Internal factors Weight Rating Weighted

Strengths

Efficient supply chain 0.18 4 0.60

Robust Financial Performance 0.13 4 1.00

Investment in infrastructure, machinery and equipment 0.12 4 0.56

Risk management and employee control 0.17 4 0.60

Weakness

Not highly skilled employees 0.15 2 0.50

Not effective marketing to differentiate from competitors 0.12 2 0.40

Imported raw materials 0.13 1 0.12

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