1. Capstone project report
GLOBAL ADAVANCED MASTER OF BUSINESS
ADMINISTRATION PROGRAM
CAPSTONE PROJECT REPORT
FORMULATION BUSINESS STRATEGY OF
EVIALIS VIETNAM IN PERIOD OF 2013-2020
Class: GaMBA01.C0111
Group number: 11
Group members:
- Tran Thanh Son
- Phan Van Thong
- Le Thi Anh Tuyet
- Nguyen Truong Tung
HCM - 2012
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FOREWORDS
1. Necessary of project
Vietnam is a country with long-standing agriculture, and today 70% of the population is
still agricultural laborers. In the context of science and technology rapid development in
general, and the application of science and technology in the agricultural sector is also
increasingly popular; to develop agriculture in the country, Vietnam has called for foreign
investment to introduce advanced technology and produce high quality products.
Particularly in the field of production of animal feed, according to the statistics of
Livestock department the number of FDI firms raising now accounts for about 25% of all
businesses operating in Vietnam; however production and supply products on the market
of FDI enterprises accounted for more than 60% market share. Besides, joining the World
Trade Organization WTO of Vietnam has been and will continue to receive more foreign
enterprises; therefore the level of competition will be more intense in most of the fields ,
including animal feed production.
One of FDI enterprises operating in the feed industry in Vietnam market is Evialis
Vietnam, presented in Vietnam since 1995 and gradually asserted its position in the
market. However, in the face of increasingly strong competition of many large
corporations from many different countries around the world would somehow affect the
business operations of the company in the near future; to find solutions for sustainable
development for Evialis Vietnam the group of authors propose "business strategy for the
Evialis Vietnam in period of 2013-2020 ", and we believe that this project will contribute
for future success of the Evialis Vietnam.
2. Rearch objective
On the basis of the analysis within the enterprise environment and the impact factors of
the external environment to find out the strengths and weaknesses as well as opportunities
and threats; thereby determining the appropriate strategy in order to create competitive
advantage for the future and ensure the sustainable development of enterprises.
3. Objective and scop of research
- Research objective: Evialis Vietnam corporation, and some of its competititors in
animal feed industry in Vietnam market.
- Scop of research: Animal feed in general, and mainly forcus in feed for pig.
4. Research method
The authors apply the research methods, including: integrated approach, system approach,
methods of analysis and logic, ... to analyze and determine the relationships between
problems, consider the movement and changes over space and time; since then, find out
what the impact reasonable method to maximize the opportunities and strengths, minimize
threats and weaknesses on the basis of propose optimal solutions in the process of building
the company's business strategy.
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5. Content structure
Main content structure of project:
- Chapter 1: Theorical basis of business strategy.
- Chapter 2: Analysis business operation of Evialis Vietnam and economic
environments.
- Chapter 3: Formulating business strategy for Evialis Việtnam in period of 2013-2020.
CHAPTER 1: THEORICAL BASIS OF BUSINESS STRATEGY
1.1. The concept of business strategy and the role of business strategy
1.1.1. The concept of strategy and business strategy
The concept of strategy
The term comes from the word strategy Strategos in Greek means "commander" is used in
the military, refers to the science and art of military command. Today, the term strategy is
used extensively in business and in life.
"Strategy is the art of building a solid competitive advantage to the defense," said Michael
Porter.
According to Johnson G. and Scholes K. (1999), "Strategy is the direction and scope of an
organization in the long term, in order to gain competitive advantage for the organization
through the format of its resources in a changing environment, to meet market demand and
satisfy the expectations of our stakeholders. "
Business strategy
According to Alfred Chandler (Harvard University). "Strategy involves the determination
of basic long-term goals of the business, at the same time choose the way or course of
action and the allocation of resources to accomplish that goal."
By Fred R. David th. "Business strategy is the means to achieve long-term goals."
In general, the definition of business strategy although there are differences in wording but
contained 03 following contents:
- The target business that wants to reach.
- Propose and select the solution support to achieve the goal.
- Deploy and allocation of resources to accomplish that goal.
Strategy is a set of goals and policies as well as the main plan to achieve these objectives,
it is clear the company is or will carry out business activities, and active in any field.
Business strategy of a business is an overall program of action towards the realization of
the goals of the business. Not to devise a strategy specifically how to achieve these goals
because it is a task of immense assistance programs, the strategy functions.
Strategy is to create a framework to guide thinking and actions.
1.1.2. The role of business strategy
Business strategy plays an important role for all businesses, specifically:
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- Business strategy plays a decisive role for the existence and development of a business
during the business, particularly in the global business stage for fierce competition.
Business strategy is to help clearly see the business opportunity and risk in the present
and in the future since then, based on the potential of the business to deal with the
uncertainty of the market situation.
- Strategy is the way to avoid the error when stepping into the future, to help businesses
achieve their goals correctly and with better results thanks to the right target.
- Business strategy based on the analysis of the business environment factors, which
help businesses understand and evaluate the correctness and accuracy than existing
competitors as well as potential competitors hidden in the future of the business, know
the elements of the natural conditions, social, political influence how current and future
business. Besides, the business strategy also helps businesses effectively used its
existing resources and allocate them appropriately.
From these roles can show that the business strategy to help businesses determine the
objectives and tasks of the business enterprise and thus maximize your resources and
capture the market opportunity as well as receive know the risks in order to create
sustainable competitive advantage increasingly for business.
1.1.3. Requirements for construction and implementation of business strategy
First, the business strategy is to achieve the purpose of increasing the power of business
and gain competitive advantage.
Second, the business strategy is to ensure the safety of the business enterprise.
Third, the business strategy must determine the scope, objectives and basic conditions to
achieve the objective. The determination of the scope of business in the business strategy
is to ensure that fixes the spread of resources, or avoid the use of not all resources.
Fourth, to predict the future of business environment, predicting how much accurate,
more consistent business strategy much.
Fifth, to have a backup strategy; the reason to do so, is to execute business strategy in the
future, but the future is always unknown. So, when building business strategies, must take
into account the worst possibility that businesses may encounter. And in that situation, the
strategy will be replaced.
Sixth, to combine maturity with opportunities; business strategy is not ripe then surely
businesses will fail. But there is seemingly paradoxically, a number of business strategies
fail because too ripe. The reason is easy to understand that due to perfective thought in
building strategy, it takes too much time in processing information, expect to get a perfect
strategy. That leads to the completion of construction and deployment strategy, the lost
opportunities. So when the business strategy to distinguish between what is ideal strategy
and what is the perfective strategy.
1.2. The process of business strategy formulation
Strategic Planning is the first stage, is crucial in the process of strategic management. This
phase is formed to establish strategic business tasks, investigations to determine the
opportunities and threats from the external environment and the strong and weak points
now, which set out the long term and choose between alternative strategies. The difference
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between strategic planning and strategic management is strategic management including
the implementation and evaluation strategies.
The strategic planning is done by a closed process, this step of the process is always a
close relationship and complement each other. There have been many studies to determine
the strategic planning process, in the context of this thesis, the author uses the strategy
formulation process based on the model of Fred R.David, including the following:
1.2.1. Step 01: Analyze external environments
System point of view, the existence of the business is in a certain environment, this
environment is always changing with the conditions of social tourism and business. So
what is environment of a business? These are the factors, forces, institutions located
outside of the business always have impact on the survival and development of
enterprises.
Organization's environment can be divided into two levels: the macro environment (also
known as the general environment) and micro environment (or a particular environment).
Macro environment affects all sectors of business, but not necessarily in a certain ways.
Micro-environment is defined for a specific industry, with all businesses in the sector
affected by the micro-environment in the industry. And when analyzing the influence of
the environment, we need to identify two factors: one is the complexity of the
environment is characterized by a variety of factors that affect the organization's efforts.
Increasingly complex environment, the more difficult it is to make effective decisions.
Second, the dynamics of the environment, including variations related to environmental
conditions.
1.2.1.1. Macrco environment analysis
Macro environment is composed of the following main factors: economics, politics, law
and government, culture, society, nature, science, and technology. The content of these
elements can point as follows:
- The economic factors: Through impact factors: economic growth, interest rates, the
stage of the economic cycle, fiscal and monetary policies, exchange rates, inflation
levels, foreign investment, etc... have great influence on the business of the enterprise.
- Legal-political factors: Political and legal factors have a more significant impact on
business operations, including: a system of government policy perspective, the current
legal system, the trend of diplomatizing of government, the political developments in
the country, the region and the world. Businesses must comply with the provisions of
the tax law, lending, labor safety, insurance policies, pricing, advertising, where is the
location of plant and environmental protection
- The social-cultural factors: The social-cultural environment including norms and
values are accepted and respected by a society or a particular culture. The impact of the
socio-cultural factors are often more subtle and long-term compared to other factors,
sometimes difficult to identify. However, the socio-cultural environment has strong
influence on the business activities, represented by the following factors: the concept
of aesthetics, ethics, lifestyle, occupation; customs, customs and traditions; social care
priorities; awareness, education of society, ...
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- The natural element: Natural factors including: geographic location, climate,
landscape, land, river and sea, the mineral resources in the ground, sea forest resources,
the purity of the water environment, air ... their impact on policy decisions in business
has long been recognized business. In many cases, the natural conditions are a very
important factor to form the competitive advantage of products and services. The
problem of environmental pollution, poor product quality, waste of resources, along
with the growing demand for limited resources forcing businesses to change their
decisions and measures related activities.
- Elements of science and technology: Characterized by the development of scientific
and technical progress, the advent of new technologies can create new products with
superior features, shorten the product life. This is a very active element, filled with
opportunities and threats to the business.
This is because the elements of the general environment, macroeconomic factors typically
affect all types of businesses, including factors directly impact on this business, but little
impact on business other. Therefore, this is the first general factor that business needs
analysis to identify the factors that will directly impact the business, through which to
identify opportunities and risks affecting the operations of their business.
1.2.1.2. Micro environment analysis
Micro environment consists of the factors in the industry and are the external factors for
enterprises, determine the nature and extent of competition in the business industry.
According to Michael Porter, the micro environment of the enterprise is made up of five
basic elements: competitors, buyers, suppliers, potential new competitors and substitutes.
Figure xxx: Micro-environment analysis
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The competitors
This pressure is often a direct threat to the business, as the pressure of competition
between businesses on the rise, the more threatening position and the existence of the
enterprise.
The customer
Customers are the most important part of the business, customer loyalty is a major
advantage of the business. The trust of customers for business can be the most valuable
asset for businesses. Credibility is achieved by enterprises that meet customer needs and
tastes better than other businesses.
The suppliers
The company must always be associated with the business offers (suppliers) to provide
different resources such as raw materials, equipment, labor, capital, etc. The provider may
cause a pressure in the operation of a business. So the research to understand who provides
resources for businesses is not to be missed in the process of environmental research.
Suppliers of materials, equipment with advantage could profit by increasing prices,
reducing product quality or reduce the level of service associated with it, so analysis
provider is necessary. The provision of financial is a factor to ensure short-term and long-
term loans in each period of the business.
The new potential competitors
For new players to participate in the business may be factors that reduce the profitability
of their business due to put into operation new production capacity, with the desire to gain
market share and the necessary resources.
Although not always businesses also face new potential competitors, but the integration
risk of new competitors in the industry has influenced also affect business strategy.
Besides, the protection of competitive positions in business including the maintenance of
the legal barriers to prevent intrusion from outside is necessary. These barriers are: the
advantage due to large-scale production, product diversification, requires large financial
resources, cost advantages that competitors can not create. Another barrier to prevent the
entry of new potential competitors is strong resisting of the standing organizations.
The alternative products
Pressure due to substitute products limits the potential profit of the industry due to the
high rates controlled. If you do not pay attention to the potential replacement products,
enterprises should narrow market. Therefore, businesses are constantly researching and
checking the potential replacement items.
The majority of alternative products is a result of the technology boom. Want to succeed,
businesses need to pay attention and devote resources to develop or apply new
technologies to their strategies.
1.2.2. Step 02: Internal environment analysis
Every organization has its strengths and weaknesses in certain business sectors. The inner
strengths and weaknesses with external opportunities and threats, and clear tasks that are
the basic points should be considered when setting goals and strategies of business.
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The objectives and strategies are designed to take advantage of the strengths and
overcome the weaknesses inside - the factors that managers can control. In a business itelf
that includes all elements and systems inside of it, to try to analyze carefully the internal
factors in order to identify their advantages and disadvantages; on that basis, measures to
promote the advantages and reduce disadvantages to achieve maximum advantage. The
internal factors mainly include functional areas such as: human resources, research and
development, production, finance and accounting, marketing and leadership, etc...
To understand the significance of the activities of the business, the value chain need to be
analyzed to determine which activities create value for customers, so that the focus on
building activities to create advantage for business.
Figure xxx: The value chain model of Michael E.Porter
1.2.3. Step 03: Determine missions and objectives
Missions
The mission of the enterprise is a statement of long-term value of the business
responsibilities, beliefs and ideas of the participants in the organization. The determination
of the mission is essential to set goals and formulating strategies in an effective manner.
Objectives
The term "target" refers to specific criteria or results to be achieved in the future business.
Objectives usually reflect expected state can be done and should be done at a time or after
a certain time.
Usually the target now divided into two types of short-term goals and long term goals.
Short-term goals have to be very specific and detailed results in a decision cycle. Short-
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term goals are usually a year. The long-term goal is the desired results set out in a
relatively long period of time.
Goal should be set properly because it is crucial in making the business strategy. Common
goals must meet the following criteria:
- The specific objectives.
- The flexibility of the target.
- The measureability of the target.
- The feasibility of the target.
- Consistency of objectives.
- Acceptability of goals.
- The time line of the target.
1.2.4. Step 04: Formation strategies of business
Strategic management process consists of three phases:
Phase of strategy formation
This is the first stage, its a foundation and play a very important role in the whole process
of strategic management. In this phase should define the vision, missions and
organization's strategic objectives, development tasks, identify opportunities and threats to
the organization from the outside, showing the strengths and weaknesses inside, setting
long-term objectives, generating alternative strategies and select specific strategies to
pursue.
Phase 1: Input stage
External Factors Competitive Profile Matrix (CPM) Internal Factors Evaluation (IFE)
Evaluation
(EFE)
Phase 2: Combination state
Matrix of Matrix strategic Boston Matrix Internal Matrix of main
Strengths- position and consulting - External (IE) strategy
Weaknesses- action group matrix
Opportunities- evaluation (BCG)
Threats (SPACE)
(SWOT)
Phase 3: Decision stage
Quantitive Strategy Planning Matrix (QSPM)
Table xxx : Analytical framework for strategy formulation
Implementation strategy phase, or called action stage of strategic management:
This phase is to mobilize resources to implement the strategy has been set up. Including
the setting of annual objectives, policy making, and resource allocation to establish
strategies can be implemented. This period is often considered the most difficult stage in
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the strategic management process. The implementation of the strategy requires discipline,
dedication and self-sacrifice of the individual.
The strategic review stage: Monitoring and review the results of activities and strategic
implementations; including measurement to determine the performance of individuals and
organizations, including the corrective actions needed.
All administrators and staff at all levels in the organization, not just the owner or senior
executive officer, must accossiated with activities of implement and evaluate strategies;
the participation is crucial to achieve adherence to the necessary changes.
1.2.5. Step 05: Selecting optimal strategies
Due to the nature of the long-term strategy is a matter of strategy selection is crucial for
the future of the business. The strategy choice of the enterprise whether on the basis of
intuition or analysis must be based on the actual situation of the enterprise and the
development trend in the future. Therefore, a strategy chosen must meet the following
requirements: in accordance with the mission and business objectives that are pursued;
avoid shock to the process of business operations; consistent with resource capabilities of
the business.
The choice of the optimal strategy is done by the quantitative strategic planning matrix
(QSPM). By the analysis of the results of external elements matrix, the internal elements
matrix, competitive profile matrix and especially the SWOT matrix; QSPM allows
evaluating the specific advantages of each strategies in the same comparison group,
allowing administrators to choose the best strategy for the business.
1.3. The levels of strategy management and type of strategies
Strategic management can occur at many different levels in the organization. Usually there
are three basic levels of strategies:
1.3.1. Corporate level strategy
It’s a pattern of decisions in a company, it identifies and defines the purpose, the
objectives of the company, identify the business operations which the company pursued,
create policies and design the basic plan to achieve the objectives of the company.
In an organization with the size and the level of diversity, "corporate strategy" is often
applied to the entire enterprise. Company strategy set out to identify the business activities
in which the company will compete and distribute resources between business activities.
Company strategy related to the overall objectives and the expected size of the business,
towards the basic long-term goals, development orientation of the organization. By Fred
R. David, strategies for companies with 14 basic strategy, divided into four groups:
- Integration strategy group, including three strategies: Forward integration strategy,
backward integration strategy, and horizontal integration strategy. The strategy of this
group allows companies to gain control over distributors and competitors.
- Intensive strategy group, consisting of three strategies: market penetration, market
development and product development. Characteristics of these strategies require
focused efforts to improve the company's competitive position with existing products.
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- Business expanding strategy group, including three strategies: concentric
diversification activities, horizontal diversification activities and diversify the block
type of activities.
- Other strategy group such as joint ventures, downsizing operations, cut operating,
liquidation or synthetic.
1.3.2. Business units level strategy
Business strategy is planed in order to determine the selection of specific products or
markets for its own business operation, and it determine how the company will compete
with a business with the known position of the company itself among its competition.
Strategic business units of the business to determine how each business unit will try to
complete its goal to contribute to the completion of the company target. If the company is
the industry, the business unit level strategy can be considered as company-level strategy
1.3.3. Funtional units level strategy
Strategic level functional (or operational strategy) is a strategy of the functional parts of
the organization (R & D, production, marketing, finance, ...) This strategy helps improve,
enhance operational efficiency in the company, helping business strategy, corporate level
strategy implementation effectively.
Thus the strategies of three basic levels are not independent but have close relationship
with each other. Strategic level is a precondition for lower-level strategy, and subordinate
strategy should adapt to superior strategy then process of implementation strategy has the
ability to be successful and effective.
In addition to these three basic levels of strategy also have a global strategy, to enter and
compete in the global environment, businesses can use four basic strategies:
- Multinational strategy (multidomestic)
- International Strategy (international)
- Global Strategy (global)
- Transnational strategy (transational)
In summary:
Building business strategy plays a very important role for any business to survive and
improve competitive position in the fiercely competitive market like today, especially on
the livestock feed market. The study of theoretical in general about business strategy to
help businesses to get a comprehensive view of the factors impact and affect to the
business, as the basic platform for the construction of proper orientation, feasibility
strategic planning and propose appropriate solutions.
CHAPTER 2: ANALYSIS BUSINESS OPERATION OF EVIALIS
VIETNAM AND ECONOMIC ENVIRONMENTS
2.1 Status of business situation of Evialis Vietnam
2.1.1 Introduction to Evialis Vietnam
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2.1.1.1 History and development
Established in 1995, EVIALIS Vietnam is a subsidiary of INVIVO NSA group (France)
is a leading group with 60 years experience in the field of nutrition and animal health,
based in 18 countries and over 5.000 employees on the world
The information below are the importation events and achivements of EVIALIS Vietnam
has achieved since first step in Vietnam from 1995 to now.
1995: Establish Representative Office in Vietnam, trade promotion and introduction of
premix and veterinary medicine
1998: Establish Joint Venture Company GUYOMARCH – VCN in Hanoi with National
Rearing Hatchery Institute (NRHI ), the first factory specialized in producing animal and
poultry feed.
2000: Minister of Agriculture & Rural Development awarded certificates of merit on the
contributions and accomplishments join the International Exhibition of Agriculture.
2001: Establish GUYOMARC'H-VN in Binh Duong, No.2 factory specialized in
producing animal & poultry feed.
2003: Building the factory OCIALIS Vietnam in Binh Duong, No.3 factory specializes in
producing aquafeed.
2004: Establish the GUYOMARC'H center in Bien Hoa - Dong Nai, specialislized in
technical support and provide testing services for livestock and poultry.
2006: Establish OCIALIS center in Long Xuyen - An Giang, specialislized in technical
support and testing services for fish. Establish Hung Yen R&D, specializing in research on
poultry nutrition. People's Committee of Hanoi city commendation awarded by the many
achievements in business and contributing to economic development and social capital.
2007: Establish OCIALIS center in Duc Pho - Quang Ngai, specialislized in technical
support and testing services for shrimp. Establish Nha Be R&D in HCM city, specializing
in research on shrimp and fish nutrition
2009: Establish Nha Be R&D in Bien Hoa – Dong Nai province, specializing in research
on pig nutrition. Establish LAREAL Vietnam, No.5 laboratory of EVIALIS on the world
specializing in food and feed analysis, achieving ISO 17025 certification. Establish
Grimaud Vietnam Company. A cooperation projects Evialis Vietnam & Grimaud Group
specializes in producing and distributing Grimaund ducks. Establish OCIALIS center in
Can Tho city, specializing in technical support of shrimp and fish. Establish Dong Anh
R&D in Dong Anh – Ha Noi, specializes in research on poultry nutrition.
2010: Building the factory GUYOMARC'H Dong Thap in Chau Thanh - Dong Thap, No.
4 factory specialized in producing animal and poultry feed. Building a new office
EVIALIS Vietnam in Binh Duong
2.1.1.2 Business field and market
Evialis VN is an expert in the field of manufacturing and trading of animal feed, poultry
and seafood quality, in accordance with the pet's nutritional needs for each stage of
development from small to large. In addition to the above main line of business, the
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company in the field of business analysis to support the animal feed industry. However,
the range of research topics as food for pigs..
Special feeds
Blended scabies and worm Cough mixture for pigs.
treatment for sows and
boars
Piglet feeds
From 7-day-old piglets until From 8 old piglets until the
the weight is 8kg. weight is 15 kg.
Fatten
ing pig
feeds
15-30 kg 30-60kg 60-finisher 15-finisher After
pigs pigs weaning to
finisher
Sow
feeds
Mix Mix Concentrate Concentrate
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2.1.1.3 Organization chart
Evialis Vietnam was established and registered business under the name called
GUYOMARCH, this is the company's brand strategy on the industrial food market.
Evailis VN is to promote the brand image of Invivo NSA Corporation in Vietnam. And in
VN, Evialis VN has established two head offices are as follows:
Diagram of business of Evialis VN in VN market
Animal feed Aqua feed Analyse center Veterinery
Organization Chart the function of Evialis departments VN as follows
2.1.2 Business result
2.1.2.1 Revenue of product groups
Revenue of product groups in the last 5 years is as follows:
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Unit: million dong
Group of products 2007 2008 2009 2010 2011
Piglet feed 46,622 117,067 187,604 178,178 220,526
Fattening pig feed 224,323 391,874 670,345 770,343 1,008,253
Sow feed 40,515 114,742 119,895 118,964 154,064
Special products - - 3,394 2,390 2,281
Total 311,460 623,682 981,238 1,069,874 1,385,124
According to data above we see that company’s revenue was increased well in the
economic situation facing a lot of difficulties. This means that the company's products
gaining the trust of consumers and gradually increase market share.
2.1.2.2 Gross margin of product groups
The company's development process is also reflected in the average gross profit (dong /
kg) of the company tends to increase in recent years, contributing to increased profits for
the company. This achievement shows the R&D department was working effectively,
found materials replace traditional materials in animal feed industry with lower cost while
still ensure the quality standards of the company was committed. In the difficulty
condition of the world economy as well as price of raw materials increasing, this is a
positive as well as the company's strategic aim is to compete with other companies by
creating products with low price but ensure the quality and profitability of the company in
the context of increasing of feed price.
2007 2008 2009 2010 2011
Group of products
VND/kg % VND/kg % VND/kg % VND/kg % VND/kg %
Piglet feeds 1,241 16.26% 2,310 22.64% 2,259 21.50% 2,620 21.59% 2,407 17.76%
Fattening pig feeds 679 15.04% 1,472 22.90% 1,222 17.94% 1,371 17.00% 2,083 22.48%
Sow feeds 914 18.22% 1,617 22.25% 1,270 21.02% 1,427 19.30% 2,023 23.56%
Spaecial feeds 1,367 17.74% 1,740 16.22% 2,345 22.47%
Average 763 15.63% 1,607 22.73% 1,367 19.00% 1,526 18.03% 2,113 21.84%
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2.1.2.3 Financial situation
Key financial indicators of company Evialis Vietnam in recent years as follows:
2007 2008 2009 2010 2011
Performance
1. Return on Equity 33.8% 39.6% 27.5% 14.7% 24.7%
2. Return on Assets 15.3% 14.1% 10.6% 6.3% 11.5%
3. Return on Invested Capital 27.2% 29.6% 20.5% 16.9% 23.8%
4. Profit margin 4.1% 5.7% 4.1% 2.1% 4.0%
5. Gross margin 9.7% 12.9% 12.1% 12.2% 13.9%
Capital management
1. Asset Turnover 3.8 2.5 2.6 2.9 2.9
2. Fixed Asset Turnover 8.0 6.0 6.8 7.1 5.8
3. Inventory Turnover 12.0 5.2 5.6 8.7 8.7
4. Inventory Period 30 70 65 41 41
5. Account receivable
turnover 35.4 25.6 17.2 13.8 27.8
6. Collection Period 10 14 21 26 13
7. Day's sale in cash 11 5 1 4 5
Finance situation
1. Equity - Asset ratio 45.4% 35.7% 38.6% 42.8% 46.6%
2. Debt - Asset ratio 54.6% 64.3% 61.4% 57.2% 53.4%
3. Debt - Equity ratio 1.2 1.8 1.6 1.3 1.1
4. Financial Leverage 2.2 2.8 2.6 2.3 2.1
Solvency
1. Current ratio 1.2 1.1 1.1 1.1 1.0
2. Quick ratio 0.5 0.3 0.3 0.5 0.4
3. Interest ratio 9.3 7.0 6.8 3.5 10.5
According to the above data we can believe that the company will develop stable and
sustainable in the coming years.
2.1.3 Assessment of company’s real situation
Summary of indicators of company Evialis Vietnam has achieved as follows:
Indicators 2007 2008 2009 2010 2011
Total asset 181,997 434,300 553,249 585,597 714,206
Gross sales 684,244 1,079,032 1,444,428 1,717,211 2,055,868
Profit from business activites 30,065 75,183 71,827 46,087 89,951
Other incomes 1,003 239 1,459 4,527 20,396
Profit before tax 31,068 75,422 73,286 50,613 110,347
Copporate income tax 3,133 15,211 14,570 13,749 28,004
Profit after tax 27,935 60,211 58,716 36,865 82,343
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According to above datas we see that:
Total asset: total assets increased due to two main reasons. The first is to increase
inventory to meet the needs of production as well as increasing of volume sale. The
second is to come from investment projects as laboratories LAREAL and new plant
in Dong Thap.
Gross sales: again we see the development of the company through revenue
indicator. Revenue is always higher than the year before. This means that
development of the company is always stable and step by step extend market share.
Each year the revenue always increased by at least 20%.
Profit after tax: the difficult economy in 2009 and 2010 led to the prices of all
commodities are increasing, particularly the cost of fuel and raw materials that has
affected the production cost and make the profit after tax of the business to tends to
decrease slightly in 2009 and decreased very sharply in 2010. However, with the
flourishing of the economy in 2011, the company has overcome difficult to achieve
the highest net profit.
2.2 External environment analysis
2.2.1 Macro environment
2.2.1.1 Economy
Vietnam is a potential agricultural country in Asia and the world. Vietnam is the world's
second largest exporter of rice, coffee, cashew, rubber and a world leader in the export of
pepper. Although the livestock industry didn’t contribute much foreign currency and not
really outstanding but it doesn’t mean no advantage in the process of economic
restructuring. To make livestock industry to really become a key economic sector, it is
necessary to look at the real facts and innovation awareness on this issue.
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In Vietnam, the livestock industry contributed a rate ranges from 22.6% to 25.5% in the
total GDP of the argicultural industry in the period 2001-2011 and is expected to increase
to 25%- 26% in the period 2012-2020 (Department of Livestock).
TT MONETARY INDICATORS FROM 2012-2015
1 Growth in money supply (M2) 15-17%
2 Growth rate of domestic credit 17-20%
3 State budget deficit 4.5-4.9% GDP
4 The trade deficit 5-8% GDP
5 Balance of international payments 3-4 billion surplus
6 Foreign exchange reserves Equivalent to 6-8 weeks of imports
With the economic development, the consumers needs of food is more and more growing,
but livestock industry is still not enough to meet domestic demand. Do not really have a
new approach, high percentage of livestock traditionally with features as small, scattered,
unfocused number large enough to become a commodity product, not the best quality, do
not focus on market planning and accounting for economic efficiency. This farming
method has many disadvantages, but is the essential source of income to improve living
standards of the poor. According to the estimation of experts, income from livestock
industry will be 70% of the income of the poor.
Ten years ago, the demand for meat in Hanoi and Ho Chi Minh City is 500 tons / day.
Today, the daily consumption in HCM is around 800 tons - 1,000 tons, Hanoi needs 300
tons / day. Only pork, annually two cities need nearly 13 million tons equivalent to 7
million - 10 million pigs with weight 100kg/pig, not to mention the needs of 70 million
people in different regions of the country. Obviously, if you do not convert livestock
tranditional methods towards modern method applications, will not meet the demand of
domestic consumption and export.
With the economic conditions mentioned above, we believe that the need of the livestock
industry is extremely large and very important for the development of the Vietnamese
economy.
2.2.1.2 Political - Legal
Livestock really is one of the important methods contribute to poverty alleviation in rural
areas. However, how do farmers access to capital, the best application of the achievements
of science and technology, contributing to the development of animal husbandry in the
direction of industrialization and modernization is a problem with more urgent.
In recent years, many policies of the Party and the Government on economic development,
promote industrialization, modernization of agriculture and rural development, structural
transformation of plants and animals, went into real life, contributing to the development
of the livestock sector. A new mode of production towards sustainable goods in the
livestock industry is gradually formed.
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Farmer excited Decision No. 225/1999/QD-TTg dated 10-12-1999 and Decision 17/2006/QD-
TTg dated 29-01-2007 of the Prime Minister on the variety program, animals and forest trees by
2010. Series of farm cow milk, pigs goods, goat, chicken, duck ... has flourished. Extension
system from the central to the local level has been gradually popularized new advances on the
same techniques, so that technical progress for housing in accordance with the new technology,
new breeds of livestock has people applied, millions of households out of poverty alleviation.
Approved by Decision of the Government of Livestock Development to 2020, "livestock will be
fundamental changes in the direction of industrial productivity, quality, efficiency and
competitiveness; translated controldiseases and hygiene and food safety; meet food needs for
domestic consumption and export-oriented "," increase the proportion of livestock in agriculture:
32% by 2010; 38%in 2015 and 42% in 2020 ". All resolutions and directives of the Party and the
State stand firm to help the livestock industry have a legal basis to develop during the integration.
2.2.1.3 Social culture – Population
Vietnam's population is increasing year by year, an average of 1% per year. Till now there are
currently about 89 million people. Population along with people's lives have been improved,
enhanced educational level. Spend more structure there is a change in the standard of living and
social influence. In addition to food, clothing, housing and more people pay more attention to
other issues such as: education, culture, entertainment, traffic and especially health. So the
demand for meat consumption also increased. Especially in large cities, under the impact of
economic growth problems of nutrition in your diet is more interested. On the other hand with the
rapid population growth of the VN test animal needs very urgent, especially pig pork consumption
habits of the Vietnamese accounting for 46% of the consumption of meat.
2.2.1.4 Science – Technology
So far, the Vietnamese livestock industry itself does not have the production model of
community to be competitive with foreign companies in Vietnam and other countries
around the world. In the legal framework of macro policy is not enough clarity about the
product chain closed (from livestock for meat, dairy, eggs, food, food protein, food
supplements, equipment barn animal husbandry, veterinary medicine, industrial
slaughtering, meat processing, dairy industry and market services).
Not have a long-term policy and planning for the training of scientific and technical staff
as well as technical subjects synchronous breeding, biotechnology, equipment, processing,
veterinary ... qualified expertise. Actually started with the so down on intensive technical
staff, dedicated to the craft not only in livestock but also in many other areas as livestock
development.
Investment in scientific research is spread, the research is not comprehensive and long-
term; yet for improving response at each stage of production and lack of continuity;
technical solutionsnew, specific applications for the development of production; lack of
specific ecological zones, economic zones in the study to develop appropriate; many
subjects non-economic factors, is difficult to apply to production.
Our livestock industry is still a small livestock, livestock households with high percnetage
rate and lack of planning, not sustainable development. According to data published by the
Department of Animal Husbandry, in 2010 there were 8.5 million households livestock
activities but only 70% of these are the livestock barn, the rest are free ranging. Currently
there are over 20,809 the farm, SPCN industry, in which pigs account for 45 - 50% of
poultry from 30 - 35%, livestock food industry reached 53.8%.
Meanwhile, the level of the backward people's livestock productivity is not high with high
price. Economic experts said that the cost in Vietnam is now too high, more than 20%
compared to other countries in the region, while the country also cost more than 20%
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compared to other countries with animal aquaculture development. This is due to increase
in transport costs, high interest rates, yield low livestock farmers, especially high feed
prices.
2.2.1.5 Global environment
Promote strong internal resources, plus more diversified cooperation with the world to
exchange experiences and learn from friends in the trend of globalization, the integration
extensive livestock industry will certainly become an industryimportant fact in the not too
distant future.
Vietnam has joined the AAAP organization, association of producers in Asia and
Australia was established in 1980, since 1992 with the goal of exchanging new
information on animal science, introduced the processtechnology, new products for
livestock.
Besides these advantages, the integration with the world can bring us many challenges for
the livestock sector to import food from abroad into Vietnam. For example, in early 2008,
before the heavy losses of livestock due to disease and malaria, the government has
decided to import tax cut of pork, chicken from 30% to 20% and 12% to cover shortage of
food supply in the country. However, only a few months later, the imported meat was
flooding the market and causing heavy losses to farmers.
The lesson of 2008 is that tax worries import more livestock products cut from the 2012
high. Specifically, the meat of bovine animals decreased from 20% to 14%, frozen pork
from 30% to 15%, meat processing from 40% to 22% ... Mr. Nguyen Dang Vang, former
director of the Animal Husbandry Department, said that the tax on not decrease but also
potential risks. Former Director of the Institute of Commercial Research, Prof. Dr. Nguyen
Van Nam noted, if not urgent measures to promote animal husbandry, improving the
competitiveness of the livestock products, we risk losing their home is being.
The reduction of the livestock products under WTO commitments is force majeure, in
addition to boosting industrial production focus, improve farming technology - according
to Prof. Dr. Nguyen Van Nam, we have the right to do and should do is to set thetechnical
barriers. However, to this point, according to the survey, not many criteria, standards of
food safety and hygiene-product strong enough to prevent, livestock poriducs poor quality
flow into our country.
According to the Economic Research Institute of Central, after more than four years of
joining the WTO, Vietnam's agricultural production was growth of only 5-6% / year, in
2009 only 3.5%. Although there are positive signs from the value of agricultural exports of
VN increased in 4 years, especially some products have a competitive advantage, such as
rice, coffee, rubber, cashew nuts, pepper, vegetables, seafood ... but production capacity
and competitive of these products overwhelmed, such as the livestock products. Noq all
main exported products are the threshold, can not increase the area, productivity increased
only in moderation. Many items have to face the risk of lack of raw materials such as fish,
nuts, wood ... Each year Vietnam has to import nearly 100% soybean oil (about 2-2.5
million tons / year), 1 million tons of corn, 2.5-3 million tonnes of rice bran ... for
processing feed.
2.2.2 Micro environment
2.2.2.1 Customer
When considering the production of animal feed business briefly, we can see that the
dealer is their most important customers, the buying rate at about 41% of the total volume
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of food, followed bythe reseller to buy 26%, other enterprises buy 16% and 12% of
industrial farms. The small farmers are not regular customers of the feed business because
they only buy 5% of the total food.
According to the scale of production, sales strategy small business is completely different
from medium and large enterprises. Small businesses tend to diversify their audience,
selling to dealers, small businesses and farms, while large and medium-sized businesses
primarily sell products to dealers. In general, the larger the scale of production, the
percentage of food sold to dealers as high and the proportion of sales to the lower small
farms.
For current customers of Evialis VN are distributors and farms with 90% of distributors
and 10% farms. With the current animal model, the distribution is still the main channel of
the feed into the hands of farmers.But in the future, when the small animal model transfer
to concentrated animal model (model farms), farm market segment will increase.
Although Evialis VN only distribute products directly to the distributors level I, but the
company is responsible for developping market for distributors level I by supporting
technical support to secondary distributors and small farms that are agent of distributor
level I. Currently, system-level agent I of Evialis Vietnam was opened in the majority of
districts in the provinces of farms.
Different customers will have different needs for products. With the distributors level I,
price and sales policies are more important than product quality factors. However, product
quality is an important factor to keep customers, because if the product quality is not good,
even if the sale price and good sales policies to some farmers will not use this product.
Anh with large farms, the quality of products is top priority.
2.2.2.2 Competitor
Well understading about a competitor is an important requirement for the development of
the company's business strategy. At present, our country has 233 feed factory, of which 58
(24.9%) of the foreign-invested companies (including 100% foreign-owned companies
and joint ventures ). Industrial feed market share of some leading foreign companies such
as CP Vietnam accounts for about 18.1%, Pronco 8.8%, Cargill is 7.1%, and EH is 5%
(Source: Department of Livestock).
According to our assessment, so far the company with 100% foreign investment holds 65-
70% market share. Most corporations producing the world's second most food has been
present in Vietnam; CP Group (Thailand); Cargill (USA), NewHope (China) ... Thanks to
their influence, Vietnamese enterprises also studied the method of production, sales,
market ... so since 1995 and is now a private company and a specialized stock feed
business success as the: VINA company, Drive burned ... But the small market share of
the Vietnamese only 20-30%. The management of VN enterprices is not good, lack of
capital, lack of technology, not strong enough to compete with 100% foreign investment
company.
Some of the strengths and weaknesses of the competitors:
Company Strenth Weak
- Breeding animal - No focus on free market
C.P - Processing program - Limitation of credit
- Competitive Price
- Brands
- No breeding animal
Cargill - Good quality
- Good sales policies
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- Promotional Policy
- Brand goes to the heart
- Limitation of credit
Proconco - Stable quality
- No breeding animal
- Power distribution system
- Low price - Unstable quality
ANT
- Many products - No breeding animal
- Domestic Brand
Lai thieu - Quite quality - No breeding animal
- Domestic Brand
Vina - Quite quality
- No breeding animal
2.2.2.3 Vendor
Dependence on raw materials for the production of aimal feed is one of the challenges that
the livestock industry is facing. Reduced dependence on imported raw materials, toward
autonomy raw materials for industry is an expectation of our agriculture. Raw material
needs are increasing, while today 70% of the raw material that we have to import.
Annual the import value is arround $ 2 billion of feed raw materials. In which, nearly a
million tons of corn; circuit under a million tons of wheat, shot glasses bran, vegetable oil,
animal fat; 2-2.5 million tons of soybean meal from the U.S., India, Argentina, Brazil...;
hundreds of thousands of tons of fish meal from Peru, Chile, Mexico, etc.; bone Meal
meat from Hungary, Poland, maté; Enter hundred thousand ton DCP minerals from
Yunnan China. Additional food additives, types of minerals, vitamins, aroma, color, flavor
... collectively premix are not be manufactured, imported from all continents, 40 countries
and territories around the world.
In recent, one of hot problems that livestock faces tending to increase the price of animal
feed. Large dependence on imported raw materials such as soybeans and corn, high tariffs
and low productivity of this material is considered to be the cause of the domestic feed
prices rise. Price feed industry in Vietnam is about 10-15% higher than other countries in
the region such as Thailand and China. Vietnam imports an estimated 20-30% of the
volume of raw materials used for production of animal feed, equivalent to about 45% of
the total value of raw materials.
InVivo NSA, the parent company of Evialis VN, has agribusiness operations in the world,
so Evialis Vietnam has good relationships with the major supplier of agricultural products
and the prestige of the world such as Cargill, Bunge, Scoular, Dubai oil milk, Adani ... so
always ensure quantity and quality of raw materials according to the needs of the
company. Premix is a vantage point of Evialis the VN because InVivo NSA also has
manufacturing and trading premix acitvity. Therfore, premix is not a matter of concern of
Evialis Vietnam.
2.2.2.4 Substitutive product
With the increase in the price of animal feed led to the increase in the price of meat as well
as consumer fears about food safety issues in the livestock and poultry (blue ear pig
disease, foot and mouth disease anda number of companies produce animal feed use of
growth) has made consumers think of alternative products such as shrimp, fish and more
imported products.
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With the goal of avoiding loss of consumer confidence for pork, the state has issued a
circular 33/2012/TT-BNNPTNT about hygiene regulation, ensure food safety for the
establishmentmeat and edible by-products from animals treated in the form of fresh food.
5 requirements for the conditions and duration of storage of meat and by-products
regulations: "Do not use a chemical to preserve meat and fresh products. And meat
products stored at room temperature only sold within 8 hours after slaughter. Meat and by-
products from the slaughter be stored at 0-5 degrees C only sold within 72 hours after
slaughter. For products is the stomach, small intestine and large intestine stored at 0-5
degrees C only on sale for 24 hours after slaughter.
If we do not solve the problem of pricing and food safety, meat market fades into
alternative products such as shrimp, fish and meat products imported from abroad.
2.2.2.5 Potential competitors
Although the livestock sector in the country is difficult, but the field of investment in
production of animal feed has attracted many investors because demand for animal feed in
the country remains high and tends toincrease in the future.
Feed industry in Vietnam is still many opportunities to grow as the current production
capacity to meet half of the demand.However, the transformation of this potential into
growth and profit is very difficult, especially with the domestic manufacturer.
When developing the livestock sector development strategy, the Ministry of Agriculture
and Rural Development estimates that by 2015, the demand for animal feed (feed) of
Vietnam around 18-20 million tonnes, and will rise to 25-26 million tonnes by 2020.
Domestic supply shortfall close to current production capacity can be viewed as a very
good opportunity for investment and development of feed production in Vietnam.
Some feed companies joined markets:
- On 20/10/2011 Co. Ltd feed Kyodo Sojitz has formally held the groundbreaking
ceremony Plant Project SX feed animal capacity 200.000tan/nam to 3.34 hectares in
Industrial Thinh Phat. The project is expected to formally put into operation in early 2013.
Project SX plant fodder investment cooperation between the two big groups of Japanese
Sojitz and Kyodo corporation with $ 24 million invested.
- On 11/11/2010 at Dong Van Industrial Zone, Ha Nam. Manufacturing And Trading
Corporation Complete Yang held the opening ceremony of the plant feed brands THAI
WAY.
- On 8/9/2011, Tongwei Group (China) officially celebrated the inauguration of Ltd
Tongwei Hai Duong in industrial way Cam Giang District, Hai Duong Province,
specializes in manufacturing and sales of the product linefeed for pigs, chickens, ducks;
using equipment and advanced production technology world. The company has a total
investment of $ 10 million, the plant's design capacity of 200,000 tons / year.
Because of late joined in the market, new feed companies have difficulties in setting up
the big dealers with sales of over 100 tons per month. So how the business of the new
company is aimed at secondary agent in the distribution of other companies and take them
to an agent of the company I own, this is also voluntary responseexpectation level I want
to become an agent with incentives in the sales policy of the agent when level I can not act
as agent of the company that they are acting as agents II for failing to meet sales asneeds
of these companies.
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With the way this has caused difficulties for Evialis Vietnam in strengthening and
developing its market.However, with good quality and stable, Evialis Vietnam still firmly
sustainable development and relatively good image in the animal feed market in Vietnam.
2.2.3 External factor evaluation matrix (EFE)
Weighted
Factors Weights Ratings scores
Macro factors
Opportunities
The average population growth of 1% / year 0.10 3 0.3
Average annual GDP growth of 5-6% / year 0.07 3 0.21
Per capita income being increased 0.10 3 0.3
State policies to support the development of livestock industry 0.05 4 0.2
Threats
Macroeconomic instability 0.02 2 0.04
The varying on feed safety standards 0.03 2 0.06
The complication of disease and weather-climate 0.01 1 0.01
Micro factors
Opportunities
Livstock feed industry development 0.10 4 0.4
Livestock feed demand is expected to grow 5-7% / year 0.05 4 0.2
Livestock feed production technology 0.15 3 0.45
Threats
Many competitors 0.05 1 0.05
Many new companies entrance the industry 0.03 1 0.03
Customers have more choices 0.02 1 0.02
Customers are sensitive to price 0.05 1 0.05
High competition in the market 0.05 1 0.05
Dependence on imported raw materials 0.10 2 0.2
Vietnam still can not produce premix 0.02 2 0.04
1.00 2.61
The total score is 2.61 (compared to the average was 2.50) shows the resilience of Evialis
VN pretty good for the opportunities and challenges from the external environment.
2.2.4 Competitive profile matrix (CPM)
Evialis Vietnam CP Group Proconco ANT Láithiêu
Weighted Weighted Weighted Weighted Weighted
Factors Weights Ratings scores Ratings scores Ratings scores Ratings scores Ratings scores
Financial Position 0.10 2 0.20 4 0.40 4 0.40 3 0.30 2 0.20
Manufacturing technology 0.15 3 0.45 4 0.60 3 0.45 3 0.45 2 0.30
Production capacity 0.15 4 0.60 4 0.60 4 0.60 4 0.60 3 0.45
Product Quality 0.10 4 0.40 4 0.40 4 0.40 2 0.20 2 0.20
Distribution network 0.05 3 0.15 3 0.15 4 0.20 2 0.10 3 0.15
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Marketing 0.03 2 0.06 2 0.06 3 0.09 3 0.09 2 0.06
Market Share 0.02 2 0.04 3 0.06 3 0.06 2 0.04 2 0.04
Price Competitiveness 0.05 2 0.10 3 0.15 2 0.10 3 0.15 4 0.20
Market Expansion 0.02 1 0.02 1 0.02 1 0.02 1 0.02 1 0.02
Alliances 0.02 1 0.02 1 0.02 1 0.02 1 0.02 1 0.02
Customer services 0.05 3 0.15 2 0.10 2 0.10 3 0.15 2 0.10
Customer loyalty 0.02 2 0.04 2 0.04 3 0.06 2 0.04 1 0.02
Management 0.05 2 0.10 2 0.10 1 0.05 1 0.05 2 0.10
R&D 0.05 3 0.15 1 0.05 1 0.05 2 0.10 1 0.05
Business experience 0.05 1 0.05 3 0.15 3 0.15 2 0.10 3 0.15
Human resource 0.04 1 0.04 1 0.04 1 0.04 1 0.04 1 0.04
Innovation 0.05 1 0.05 1 0.05 1 0.05 1 0.05 1 0.05
1.00 2.62 2.99 2.84 2.5 2.15
Not to mention the big rivals such as CP, Cargill or Proconco, picture competition of
Evialis Vietnam also pretty good compared to the remaining competitors in the market.
This is the basis for the Group's continued investment in Vietnam with the opening of
more and more the place of business of the company in the market.
2.3 Internal environment analysis
2.3.1 Internal environment
2.3.1.1 Management ability
With more than 10 years of experience in the field of animal feed in Vietnam, the team
leader of Evialis VN has a deep understanding of the animal feed market as well as the
needs of the dealers and producersfeed for animal feed products in order to develop
appropriate policies for the development of the market.
As foreign companies operating in the Vietnamese market, the company's policy is to
work within the framework of Vietnamese laws, not to rise to the tax fraud cases as well
as other provisions of law. So Evialis $ is always a good image in the eyes of the
authorities.
On the other hand, with links to the Institute of Animal Husbandry for the establishment
of the company LD GUYOMARCH - Powered has created the political and economic
relationship to the board in order to get the information in time to change policyof the state
to make strategic decisions for the company to change this policy.
2.3.1.2 Financial capacity
In terms of production scale, we can see large scale enterprises tend to agents debt, slow
pay more. However, it should be noted that although businesses say they can let the
customer defaults, late payment, but the business market feed current late payment method
is not universally processing of large enterprises for customers.
It should be noted that other services, such as commissions, discounts to resellers and
many large and medium-sized enterprises provide more than small businesses. This result
may reflect the advantages of large-scale capital firms than small businesses.
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For the animal feed market, Evialis VN debt does not advocate for many customers that
the company policy discount to customers for their sales to compete with other businesses
in addition toimprove the quality of products to attract consumers of livestock. Capital of
the enterprise is used for raw material procurement strategy and development of aquatic
food market is facing many difficulties today.
In the current difficult economic conditions, the company promoting the procurement of
raw materials to stabilize the purchase price of raw materials and limit the volatility of raw
material prices on the market for that financial capacityof the company is strong enough to
develop the market and expand the company's investment projects in the future as new
factory in Dong Thap, boring new plant in Henan, as well as plans to build a
factorypremix production and veterinary medicine in the future.
2.3.1.3 Human resource management
Up till now, Evialis VN 700 in labor that labor accounts for 81.67% and Female workers
account for 18.33% and professional workers accounting for more than 70%.The majority
of employees are under 40 years of age, suggesting that human resources of Evialis VN is
a team of young workers should be more ambitious and district heat, this will be the
foundation for the future development of the company.
Evialis Vietnam is a subsidiary corporation of InVivo NSA, a large group of France and
Europe should also attracted many experts around the world such as France, Thailand,
Mexico, Philippines. These experts have contributed a lot to the success of the current
Evialis VN.
Evialis Vietnam always considers human resources as one of the competitive advantages
of the company should have had a lot of policies to retain and motivate workers to work in
order to contribute to the development of the company. Policies such as: create
advancement opportunities for employees, employee training plan for the location
planning, accident insurance 24/24, health insurance has been been deployed in Evialis
Vietnam.
2.3.1.4 Production capacity and operation
Currently the production capacity of Evialis VN is 500,000 tons a year and will feed up to
800,000 tonnes when the new plant to be built in Henan in 2013.
Quality control is now considered one of the weakest points of the feed industry in
Vietnam. In general, the advanced international standards of quality control only foreign
enterprises and joint ventures apply. Most of the foreign companies have quality control
laboratories, while less than half of the firms have this equipment.To affirm its
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commitment to the quality of its products, 2009 Evialis VN has established laboratory
LAREAL $ ISO 17025 standard not only for needs analysis and quality testing of raw
material as well as intoits output, but also expand their business to serve the customer
outside. Currently LAREAL Vietnam has nearly 300 clients with great customer feed as
CP Group, Cargill, JAPFA ...
300
Number of customers
250
200
Food
150
Feed
100
50
0
Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12
For ISO, half foreign business certificate compared to less than a quarter of firms. In 2008,
Evialis Vietnam has achieved ISO 9001 certification.
In terms of ownership, more than 35% of foreign firms have separate production lines for
different kinds of food (chicken, duck, pork), compared with about 23% of businesses in
the country. However, given the scale, only 14% of large enterprises have separate
production lines, significantly lower than the rate of 29% in the group of small enterprises
and 22% for medium enterprises.However, this result may also be due to large enterprises
tend to produce many types of products than smaller businesses.
2.3.1.5 Research and development
The role of research and development is very important in the context of today's business
with tasks such as developing new products, improving product quality, raw material at
the alternatives to reduce the cost ... to createcompetitive advantage for business. Picture
of the livestock sector in Vietnam today in terms of technical backwardness, limited funds,
macroeconomic policies have not stimulated the development of the livestock industry,
environmental pollution, rampant disease, as role of R & D is increasingly important for
the development of the business.
Picture of the livestock Vietnam today, solutions as well as the ambition of the research
and development department of Evialis $ towards ecological farming model with the use
of herbs in animal husbandry to replace antibiotics and additives in animal feed because in
the U.S. there are more than 20,000 species of animals, plants, insects .. shall be
considered as a medicine.
2.3.1.6 Marketing and communication
Advice on nutrition and veterinary service are two main businesses feed provided to the
agent. In terms of ownership, foreign firms tend to offer two services more than domestic
enterprises, but distribution services, transportation not many foreign companies provided
by the domestic enterprises.This may be due to two groups of firms with different
customers. For customers of foreign enterprises are major dealers and farms, they have
their own means of transport should therefore foreign firms focused on advisory services
on pet nutrition and veterinary to them.
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In conclusion we can see that larger businesses sell their products to larger agents and
dealers have their own means of transport. Small businesses are less likely to provide
extension materials for agents than medium and large enterprises.
Not outside the rules above, Evialis has established two technical advisory center and pet
nutrition in Dong Nai and Can Tho to support, advise and provide the knowledge and
technical application of animal new culture for its customers.Besides, the company also
set up a technical team to organize seminars to advise and disseminate technical
knowledge as well as raising the customer, disease treatment and support if anyborn at the
breeding sites of customers.
2.3.1.7 Information system
Internet is the small and medium enterprises selected as the most important source of
information on prices of raw materials, while the majority of large enterprises as suppliers
is the most important source for large companieshave good relationships with suppliers
easy access to information on the status of raw material prices over the medium and small
companies. In terms of price and product market, about a half-scale businesses in the
agency considered the most important source, followed by businesses producing animal
feed. For the price of raw materials, Evialis VN support from corporations and affiliates
around the world to provide the price and information analysis future price trends of raw
materials. At the same time based on the Group's business relationships and branches of
the same system in the world, Evialis VN easily get more information about the changes in
the raw materials market. Based on the above factors help for Evialis VN easy solutions
for strategic purchasing of raw materials.
In terms of information on regulations, laws, most businesses considered information from
government agencies is the most important source, especially for large enterprises.
Newspapers seem to be more important for small businesses versus large businesses. An
advantage for Evialis $ in access to information on regulations and laws in the livestock
sector is headquartered company's first joint venture with the Institute for Livestock
Company was established LD Guyoamrc'h - VCN and in the many of whom are
management staff of the Institute of Animal Husbandry. Thus the information about the
rules or the rules of the livestock sector is Evialis VN approach quickly and accurately.
Have a common middle-scale enterprises in the role of bank credit as a source of
information most important. All businesses in small and large groups as the Internet is the
second most important source of credit information. Evialis Vietnam is no exception in
access to credit information.
Personal relationships is considered to be the most important source of information about
the feed formula. However, small businesses depend on this much-scale enterprises.
Vietnam Animal Feed Association is considered the most important provider of
information about the feed and this is the second most important source of information for
small businesses. A large percentage of businesses mentioned their most important source
of information about the feed is from the parent company, hiring or use their own
knowledge. Evialis VN affiliated company of InVivo NSA (France) should also receive
information on formula feeding from the parent company. With the investment of research
quality formula from the branches around the world and experience of the group, the new
formula feed is converted to a fast for the whole system in the world to deal with
continuous variation of the raw materials market.
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2.3.2 Analyse value chain of Evialis VN
2.3.2.1 Primary activities
2.3.2.1.1 Inbound logistics
InVivo NSA is the leading international experts in the field of pet nutrition and health,
always at the forefront of innovation and quality management daily and maintained since
the operation so far. For Evialis Vietnam too, the quality is not that the benefits and costs
is an important factor in the success.For products to better meet the expectations of
customers, distributors ...
To ensure the quality and stability of the input, as this is the main ingredient in the
product.
Selecting the best input
Ensure ability traceability from supplier until the product is delivered to the market.
The quality control of raw materials to be carried out according to the following process:
The first important step is to determine if our suppliers can meet the quality
standards of content that we set out in the contract. Once fully tested, we classify
suppliers into three levels according to their confidence level (+ + / +, + / -, -), and
mainly work with suppliers the first two items.
Assessment of sensory and rational analysis, compliance with our form, rapid test,
test samples for analysis in the laboratory (physical, chemical and bacterial),
sample storage.
Strict compliance with the sampling process have been identified.
Lots of raw materials put into use only when approved by the quality control
department.
2.3.2.1.2 Operation
Production process of Evialis VN always be tightly controlled:
Check the particle size, smell, color after grinding.
Check the uniformity of mixture of materials.
Monitor and record the votes production of vapor pressure, humidity and
temperature in the molding process.
Check the physical surface: bolus stiffness, durability.
Taking samples at different stages of the production process.
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Compliance with stringent regulations sampling the product as regulation.
Storage samples for three months in a library.
2.3.2.1.3 Outbound logictics
Distribution services, transportation not many foreign companies provide domestic
enterprises.This may be due to two groups of firms with different customers. For
customers of foreign enterprises are major dealers and farms, they have their own means
of transport should therefore foreign firms focused on advisory services on pet nutrition
and veterinary to them.
In conclusion we can see that the large-scale enterprises sell their products to major
dealers and agents have their own means of transport. Small businesses are less likely to
provide extension materials for agents than medium and large enterprises.
2.3.2.1.4 Marketing and Sales
Channel distributor of Evialis Vietnam is agent system and the farms with 90% of
distributors and 10% of farms. With the current animal model, the distribution is still the
main channel of the feed into the hands of farmers.But in the future, when the small
animal model transfer to concentrated animal model (model farms), farm market segment
will increase.
Marketing company focused on the organization of workshops with specialists to process
livestock, nutrition process and it is important to introduce the company's products to
farmers.
2.3.2.1.5 Services
Ensuring customer satisfaction is an important factor in assessing the success of the
business. Therefore Evialis $ tracking system to report customer complaints and take
corrective action and prevent rapid and complete.
In addition, advice on nutrition and veterinary service are two main businesses feed
provided to the agent. In terms of ownership, foreign firms tend to offer two services more
than domestic enterprises, but distribution services, transportation not many foreign
companies provided by the domestic enterprises.This may be due to two groups of firms
with different customers. For customers of foreign enterprises are major dealers and farms,
they have their own means of transport should therefore foreign firms focused on advisory
services on pet nutrition and veterinary to them,.
Not outside the rules above, Evialis has established two technical advisory center and pet
nutrition in Dong Nai and Can Tho to support, advise and provide the knowledge and
technical application of animal new culture for its customers.Besides, the company also
set up a technical team to organize seminars to advise and disseminate technical
knowledge as well as raising the customer, disease treatment and support if anyborn at the
breeding location of the customer.
2.3.2.2 Support activities
2.3.2.2.1 Procurement
Feed ingredients in our country mainly corn, wheat slices, soy. However, there are many
factors affecting the availability of this source for the animal feed industry in the country.
Specifically, with corn and bread slices, the area is difficult to expand. As for soy, low
productivity, no land intensive; winter the area is difficult to expand due to rising rural
labor cost.
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Therefore, over the years, the animal feed industry in our country depends heavily on
imports. According to the Department of Animal Husbandry, in 2011, the country
imported approximately 8.9 million tons of animal feed ingredients, increased 3 times
compared to 2006. In particular, the energy-rich foods such as corn, wheat, wheat bran
was 3.86 million tons (about 43%); rich foods such as soy protein, dried oil, fish meal,
meat and bone meal. .. nearly 5 million tons (about 54%); additional feed about 0.2
million tons (3%). In the first eight months of 2012 the country imported 1.1 million
tonnes of maize and 1.8 million tonnes of wheat.
Computing the Ministry of Agriculture and Rural Development, to meet livestock
development strategy by 2020, demand for food in Vietnam is estimated at 27.4 million
tons (up 1.3 times higher than in 2012). Thus, with the current capacity to meet, we will
have to import more feed materials, especially energy-rich, such as corn, wheat, oil dry.
Procurement of raw materials situation Evialis Vietnam in recent years as follows:
2008 2009 2010 2011
import 46.29% 50.04% 49.92% 35.24%
local 53.71% 49.96% 50.08% 64.76%
According to the figures, we find that by 2010 the rate of domestic procurement of raw
materials and imports are equivalent. But since 2010 the balance of the procurement of
raw materials tends to increase in the domestic market, this in order to deal with the
changes of the prices of the world's agricultural markets is increasing, so Evialis $ instead
policy purchase your materials by limiting the import of raw materials in the U.S. but still
meet quality requirements such as corn and wheat slices. However, the difficulty of this
path is the domestic supply is limited and can only meet the needs of the crop. Because of
this difficulty, should Evialis VN is implementing policies seasonal procurement of raw
materials and supplies, namely purchasing corn in Dak Lak to buy, buying bread slices in
Gia Lai
Material world market, with more and more changes in the world prices of agricultural
products, capturing market information is urgent and important to the company. So,
Evialis Vietnam has established purchasing group common to plants in the U.S. and links
to the parent company as well as other affiliates around the world to exchange information
in order to plan to buy at the right time.
2.3.2.2.2 Technology development
Technology manufacturing compound feed for livestock or poultry used in the world and
in our country in general engineering and manufacturing processes are similar. In our
country most of the factories have adopted the method of mixing, so the equipment used in
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technology often similar in terms of its structure and operating principle. However,
equipment and lines of different manufacturers, have their own characteristics, different
technical characteristics.
Evialis VN production line use of Vanaarsen C600 and CPM7000, this is the line
technology is a combination of many different lines, including:
- Receiving and processing chain material: metal cup to remove the metal samples and
materials. Sieve impurities in order to remove impurities such as: large impurities,
straw, fiber-shaped impurities ... to obtain materials of the same nature, to create
favorable conditions for the next process.
- Dosing and mixing lines: quantitative, for the purpose of determining the extent and
dose of the food components, for each type of feed mixture at the rate specified for
each type of animal, as ensuring theas possible. Mixing: to stir the ingredients have
been mixed into a uniform level to ensure that animals eat enough percentage of the
components in the mixture.
- Members and processing chain: feed generator is responsible for shaping the mixture
after mixing into feed pellets.
- Line weight and packaging of finished products: plant products come in two forms:
powder and tablets. Mixture after mixing if sent packing soon we will have the product
in powder form, if passed through the stages of creating the product we will be tablets.
Our products are packed in 25 kg / bag by automatic weighing and bagging.
All stages of the production line and equipment is controlled from a central computer
system.
With desired product quality is increasingly raising, now Evialis U.S. is investing
quantitative balance system automatically Nutricell to ensure ingredients produce accurate
and thus ensure the quality of finished products.
Besides Evialis VN also trying to reduce production costs by replacing diesel oil-fired
boilers husk fired boiler pressure. This change will help companies reduce the cost of
production and thus can adjust prices to raise the competitiveness of the company.
2.3.2.2.3 Human resource management
Up till now, Evialis VN 700 in labor that labor accounts for 81.67% and Female workers
account for 18.33% and professional workers accounting for more than 70%. The majority
of employees are under 40 years of age, suggesting that human resources of Evialis VN is
a team of young workers should be more ambitious and district heat, this will be the
foundation for the future development of the company.
Evialis Vietnam is a subsidiary corporation of InVivo NSA, a large group of France and
Europe should also attracted many experts around the world such as France, Thailand,
Mexico, Philippines. These experts have contributed a lot to the success of the current
Evialis VN.
Evialis Vietnam always considers human resources as one of the competitive advantages
of the company should have had a lot of policies to retain and motivate workers to work in
order to contribute to the development of the company.Policies such as: create
advancement opportunities for employees, employee training plan for the location
planning, accident insurance 24/24, health insurance has beendeployed in Evialis VN.
2.3.2.2.4 Firm insfrastructure
After more than 10 years of operation, Evialis VN equip a modern infrastructure with 4
factories with modern technology, three research and development centers, two technical
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centers, two sales locationsRecords, one central laboratory analysis to international
standards ... with existing facilities, Evialis Vietnam confident to higher goals in the feed
market in Vietnam.
2.3.3 Internal factor evaluation matrix (IFE)
Factors Weights Ratings Weighted Scores
Strenghts
Brand image 0.05 3 0.15
Product Quality 0.10 4 0.40
Capacity 0.10 4 0.40
Customer Loyalty 0.02 3 0.06
Qualified Work force 0.04 3 0.12
R&D 0.05 3 0.15
Multinational company 0.05 3 0.15
Customer services 0.05 2 0.10
Manufacturing technology 0.15 4 0.60
Management 0.05 3 0.15
Financial Position 0.10 2 0.20
Business experience 0.05 3 0.15
Weaknesses
Market Share 0.02 2 0.04
Sale policy 0.05 1 0.05
Distribution Channel 0.05 2 0.10
Alliances 0.02 1 0.02
Innovation 0.05 3 0.15
1.00 2.99
The total score of 2.99 (compared to the industry average of 2.50) shows that the internal
environment of Evialis VN is quite well.
CHAPTER 3: BUSINESS STRATEGY FORMULATION OF
EVIALIS VIỆTNAM IN PERIOD OF 2013-2020
1.4. The basisses for strategy formulation
The base foundations for building business strategy for Evialis Vietnam in period of 2013
to 2020:
Based on the macro-economic situation, political-social-law of Vietnam
Based on the animal feed industry in Vietnam
Based on the orientation of the development of the livestock sector in Vietnam to 2020
Based on the practical situation of Evialis Vietnam
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1.4.1. Forecasting of market demand
1.4.1.1. Forecasting of animal feed market demand to the year 2020
According to the report of general department of livestock, the demand of animal feed will
be going to increase annually and the total of demand would be at 46,607 thousands tons
in year 2020.
Source: General Department of Livestock
Type of feed Unit 2013 2014 2015 2020
Percent of % 62,9 65,1 67,3 70,1
using
industry feed
Industry 1.000 tons 36.447 38.240 40.762 46.607
feed
Annual % 3,94% 4,92% 6,60% …
increasing
Table xxx: Forecasting of animal feed market demand to the year 2020
1.4.1.2. Forecasting revenue of Evialis Việtnam to the year 2020
Over the past five years since 2007, the revenue of Evialis Vietnam been being grown
significantly.
Source: Evialis Việtnam
Year 2007 2008 2009 2010 2011
(Sequence
(1) (2) (3) (4) (5)
number)
Revenue
(Million 684.244 1.079.032 1.444.428 1.717.211 2.055.868
VNĐ)
Annual
increasing N/A 58% 33,9% 18,9% 19,8%
percentage
Table xxx: The revenue of Evialis Vietnam in last five years
Data revenue of the Evialis Vietnam continued to increase over the years, so we will use
the linear prediction method to forecast revenue of the Evialis Vietnam by 2020 as
follows:
Linear equations: y = a.x + b
Where:
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- Y : revenue of the year x
- x : sequence number of the years (since 2007, x = 1)
- a and b are constant of linear equations.
Figure xxx : Revenue curve (reality and trend)
Based on actual sales data from 2007 to 2011 (x = 1,2,3,4,5) we determine the trend line
with the following equation:
y = 338143x + 381729
From this equation we can provide revenue forecasts for Evialis Vietnam to the year 2020
as follows, with x being the number of the next year (2012, x = 6) to 2020 (x = 14)
Year 2012 2013 2014 2015 2016 2017 2018 2019 2020
(sequence, x) (6) (7) (8) (9) (10) (11) (12) (13) (14)
Revenue(Billion
2.410 2.748 3.086 3.425 3.763 4.101 4.439 4.777 5.115
VNĐ)
Table xxx: Forecast revenue of Evialis Việtnam to the year 2020 (Billion VNĐ)
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