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Similar to A huge diary empire - Vinamilk
A huge diary empire - Vinamilk
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- 2. VINAMILK - STORYOF SUCCESS 1. Nguyen Thi Duc Hanh 2. Nguyen Thai Trung 3. Nguyen Quynh Trang 4. Nguyen Ngoc Toan 5. Fanny Decre
- 3. VINAMILK - STORYOF SUCCESS 1.Introduction 2.Story of success 3.Competitive analysis
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- 5. VINAMILK - STORYOF SUCCESS Produce & Trade beverages Dairy farming, produce raw fresh milk Process & trade milk & dairy products 40% Market leader Revenue 2016 Production volume 47 bil VND 01 mil tones
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- 7. STRATEGIC SEGMENTATION 10 SBUS 200 SKUS 4KEY SBUS 1 2 3 4LIQUID MILK POWDERED MILK CONDENSED MILK YOGURT 30 % Market share 85 % Market share 80 % Market share 53 % Market share
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- 9. HISTORY 2013 Lovemark brand with 94% awareness 2016 > Freetrade ASEAN > Launch of organic products 2010 Start of a global expansion 2007 creation of automated dairy farms nationwide 2003 Privatizatio n of the company 1995 Fierce competitio n: Dutch Lady, Nestle… 1976 Creation of Vinamilk GROWTH (1995 – 2005) MATURITY (2005 – NOW) START (1976 – 1995)
- 10. COMPETITIVE ANALYSIS3 Growth Period(1995 – 2005) Modern Period (2005 – Now)
- 11. GROWTH PERIOD PESTEL ANALYSIS(1995 – 2005) • Government’s plan on human physical & mental development • Government’s protection for Vnese companies against foreign investors after Doi Moi • 167/2001/QD/TT g: Dairy industry improvement Decision from Government • GDPs growing y- to-y • Era of Golden Population • Lack of milk usage habit • High Technological barriers for new comers • Ideal country to breed cows (WB 2011) POLITICAL FACTORS LEGAL FACTORS ECONOMICS FACTORS SOCIAL FACTORS TECHNOLOGI- CAL FACTORS
- 12. GROWTH PERIOD 5 FORCEANALYSIS (1995 – 2005) • Small diary farms: not guarantee quantity & quality of raw material • Imported milk powder ingredients from New Zealand, USA, Netherlands, France • International competitors have a strong supply network Dutch Lady (FrieslandCampina): (1994) joint venture then built factory $1millions/year investment / middle-end powder milk brands Nestlé & Danone (1995) joint venture, then built factory Brought high-end powder milk • Vietnamese consumes more milk because of healthy benefits • Imported powdered milk became popular & took over part of the consuming of condensed milk • Vietnamese people unable afford imported powdered milk • Consumer habit • Homemade product • Functional Food Buyer Supplier New entrant Substitues Supplier New Entrant Substitu es Buyer
- 13. GROWTH PERIOD STRATEGIC MOVE(1995 – 2005) Cost Domination strategy: By lowering the price of its dairy products, Vinamilk made its products affordable for lower and middle class, and thus, grabbed market shares. • Established factories nationwide (Nghe An, Binh Dinh, Can Tho, Saigon, Tien Son) to take economic of scales • Established its own transportation function in 2003 • Condensed Distribution network through General Trade channel
- 14. MODERN PERIOD PESTEL ANALYSIS(2005 - NOW) • Government’s plan on human development • Government’s protection for Vietnamese companies against foreign investors • Changes of VN laws to fulfill the commitments in FTAs • Global Integration (WTO, AEC, FTAs, and coming TPP) • Increase awareness on health and nutrition • High Technological barriers for new comers POLITICAL FACTORS LEGAL FACTORS ECONOMICS FACTORS SOCIAL FACTORS TECHNOLOGI- CAL FACTORS
- 15. MODERN PERIOD 5 FORCEANALYSIS (2005 - NOW) • Liquid milk: bargaining power of supplier is still weak • Powdered:Imported milk powder ingredients from New Zealand, USA, Netherlands, France TH True Milk (2010) - New Local competitor who is very aggressive and acquired 50% market share of Pasteurised Milk Market (2015) General Trade: • Over 80% revenue comes from traditional distribution. Retailers (Small shops) • Because of Fierce Competition and low switching cost -> company has to invest more on Trade marketing activities for retailers Modern Trade • MT is future channel of Vietnam retail Industry. MT developed so fast and has 17% total volume, also with Vinamilk. • Homemade products • Soya milk,… Buyer Supplier New entrant Substitues Supplier New Entrant Substitu es Buyer
- 16. DISTRIBUTION NETWORK DISTRIBUTOR RETAILERS SUPERMARKETS AND CONVENIENT STORES KEYACCOUNT VINAMILK SHOPS EXPORT 243 DISTRIBUTORS 212,000 RETAILERS 870 CONVENIENT STORES 1,609 SUPERMARKETS CONSUMER
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- 18. MODERN PERIOD STRATEGIC MOVE(2005 - NOW) Cost Domination strategy and Differentiation Strategy: Taking advantage of the market dominant position from prior period, Vinamilk continue to expand its business to rural area in Vietnam, established a diversified product portfolio and expanded overseas • Standardize the supply chain: raw material supplies by establishing automated farms and educating current suppliers • M&A/ Joint venture to expand overseas (USA, EU, Australia, New Zealand, South East Asia,…) • Created a diversified product portfolio to satisfy the needs in every stage of the human being life cycle • Change the product structure, aiming at the high-end segment with nutrition- supplemented products (61.3% in 2015), sugar-reduced and low-fat products (13.1%)
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