The case study of mead JOHNSON Vietnam company

1. VIETNAM NATIONAL UNIVERSITY IN HO CHI MINH CITY
University of Science
ITEC
THE CASE STUDY OF MEAD JOHNSON VIETNAM
COMPANY
Group : FAITH
Advisor : NGUYEN HUU DANG KHOA
Ho Chi Minh City, Vietnam
2013

2. 1. INTRODUCTION
a) Background :
- We all know milk is good for people's health,in the
market today there are countless types of milk for all
age,such as Dutch Lady, Vinamilk, Abbott... , and the
most common is milk for children, but with the
current economic situation and competition between
brands, there are some companies report the wrong
concentration of the components in box, such as the
Mead Johnson milk company with Enfagrow A+

3. a) Background :
- Mead Johnson has been known by product line Enfa A
+ , such as EnfaMama A +, Enfalac A +, EnfaPro A +,
EnfaGrow A +, EnfaKid A +. In addition, the company
has also developed specialized products to meet the
special nutritional needs of children
- At the end of the month 6-2008, after the Ministry of
Planning and Investment of Ho Chi Minh City grant a
permit for Vietnam BMS Company, the parent company
of Mead Johnson Nutritionals, Mead Johnson Nutritionals
Vietnam officially became a 100% foreign capital.

4. 1. INTRODUCTION
b) Reasons :
- The reason why we choose this company because this is one
of many famous milk companies in Vietnam. There're many
many mothers who did not hesitate to put a large amount of
money to buy milk for there children because they believe in
the function parameters of milk. The majority of mothers
believe this milk and believe it good for their children. But in
recent times, milk was having a lot of trouble, such as milk
with "super profits" when the price of milk is nearly 2.5 times
the price of capital; arbitrary ad listing price , the appearence
of imitation, ... And, most recently, the company is accused
that they were published wrong concentration of the
components

5. b) Reasons :
- Milk is an important food for young children.
For infants, in addition to breast milk or with
young children, in addition to the main meal,
milk powder can say is that the side dishes,
provide more essential for your baby. But for
action warping function of the company's milk
is an unacceptable action, as it may affect your
baby's health.

6. 1. INTRODUCTION
3. Reaserch question :
- So what is the reason of this action? And
what is the result of this action? And how did
they answered customers about this problem?

7. 2. METHODOLOGY

8. 3. DISSCUSSION :
a) Internal :
i/ Raw material :
- This is raw material after be checked :
Before After
Calcium 560 1.640
Protein 17 2.54
Fat 16 2.72
Fibre 3 0

9. i/ Raw material :
Reasons
__ because depend on resource, high investment
__quantity, quality, price, kind, structure of material
__cut material to reduce capital, save material to reduce
density in business cost
__reduce high price material and increase low price material
__excess or shortage of raw materials in the production of
__material in the water does not meet the terms of quantity as
well as quality

10. i/ Raw material :
Affect
- Bout customer's health : if enough calcium
absorption, baby 's bone will be strong, but if
too much calcium in the body, the body will
not be absorbed as well as to excreted
completely, so will cause kidney stones in
user.
- People will no longer trust, reputable
companies will decline

11. i/ Raw material :
Solution :
- The only way to solve this problem is balance the
concentration of components in the milk properly in
the box to regain the trust of customers. They should
flexible in finding suppliers to ensure quality and
quantity of raw materials required for production, not
to happen stagnant or shortages of raw materials, and
shall minimize the cost of doing business use of raw
materials.

12. a) Internal :
ii/ Business Pressure :
- There are many things that cause a severe
pressure for the business and production:
+ Structure of corporate governance
+ Wage labor
+ Business finance
+ Facilities, engineering and production
technology

13. ii/ Business Pressure :
Affect
- But what consequences ? They will do everything to
meet all that. Cut money to reduce capital costs,
competition, based on customer trust to deceive them,
and sell for theim low-quality products, not required.
Do everything to offset capital, improve the financial
situation of enterprises. In the long run, their
reputation in the market will be affected, and the
amount the consumer will be reduced.

14. ii/ Business Pressure :
Solution :
- Solution of the group that is on the quality assurance of the
production.Can cut costs by reducing the amount of product to
ensure quality. So they will have enough merit to compete
with other dairy companies in the market. In addition, we need
to improve the popular ideology of foreign goods than
domestic goods of the people to relieve pressure on the
company. We need a method reasonably calculated so as most
effective is determined by economic output and cost of inputs
in the business.

15. 3. DISSCUSSION :
b) External:
i/ Community :
- the demand for Vietnam's milk market rising higher by the
effects of income
- the population and the high rate of infant has created a
markethuge milk. But while demand is so big that the supply
does not meet the expectations of consumers and the economy
difficult.
- the idea favored foreign over domestic goods has caused a
high disparity between domestic and foreign goods, causing
pressure on the company.

16. i/ Community :
- unemployment, education, style, culture and
lifestyle also affect the production process. If
people have the choice then surely the cost of the
employer of the company will be higher, but will
reduce the efficiency of production, and vice
versa. But if there are too many unemployed will
lead to source reduction, reducing production
efficiency. Do not stop there, ambushing.
- education is also a major problem, affecting the
ability to train and acquire.

17. i/ Community :
- culture also contributed. If overseas, people
focus on work attitudes, they take care of product
quality. But in Vietnam, people often wait out of
time to go home, company image, product
quality, the superior resolve all. Add as a fear of
losing their jobs that they do not dare publicly
violating the company's ethics.
- the state's economic policies, economic growth,
inflation, the average income per capita is one of
the factors leading to the production process
violations in business.

18. i/ Community :
Solution :
- the company should open online programs in order to solve all the
problems of our customers.
- people's thoughts on the foreign goods and should be changed.
Vietnam State should reduce the burden and pressure in business by
encouraging consumers to use Vietnamese goods, promote domestic
industry, balancing the weight of domestic and foreign goods.
- economically, the policy of the Government to encourage
businesses to expand capital, curbing the inflation rate at a
reasonable level will create conditions for enterprises in general and
Mead Johnson particular company developing productionimprove
production efficiency in the business.

19. b) External:
ii/ Law:
- Vietnam is soft law, not written clearly and
specifically, no criminal sanctions,
administrative enough deterrent for ethical
business object, or change
- the penalty is too low, is not enough to affect
the company.

20. ii/ Law:
- the understanding of law in the business of business
is limited
- Nor outside of the case, knowledge of law, but for
the sake of business, they are willing to break the law,
despite causing severe consequences for consumers,
the economy, and even for the company itself. When
uncovered, prosecutors ethical violations, they remain
silent and refused to explain their mistakes.

21. ii/ Law:
Solution
- We should develop consumer protection
associations in order to protect the rights and
create a voice for customers. It would be
useful to have the text, increase the fine, can
not tolerate all the ethical violations by the
company.

22. 4. CONCLUSION
- So, why the company Mead Johnson, a
company with 100% foreign investment
capital to has this action? It's all for profit.
- Not only that, many dairy products are
competing in the market Viet Nam. So the
company has chosen to cut the high cost of
raw materials, instead promoting the raw
material cost lower to higher profits.

23. 4. CONCLUSION
- The warping content in milk Enfagrow A +
shows unethical behavior in the business of
Mead Johnson Vietnam. There are many
reasons for this action of the company,
objective as well as subjective.But this action
also makes us see the serious consequences it
has caused.

24. 4. CONCLUSION
CONSEQUENCES:
- This action not only affect the company's
consumers, customers, but also affect the
economy and the Vietnamese dairy market.
+ On consumers
+ For buyers
+ To the company
+ To the law

25. 4. CONCLUSION
RESOLUTION
- About the company :
+ should have the meeting to explain clearly about
this issue more and more obvious, not only to
consolidate people's confidence in the product, but
also guarantee the company will not do this unethical
action again
+ do not remain silent or get too general reasons that
explain a problem is serious and affects people's
health

26. RESOLUTION
+ the company should withdraw all products
of administrative violations in the field of
standards, metrology and quality products to
ensure that goods and to avoid more serious
consequences later on
+ companies more flexibility in choosing
investments, calculated that between capital
and profits, output as well as in a reasonable
way, not to exceed the difference.

27. RESOLUTION
- The State :
+ should have a clearer decrees on sanctioning this
behavior, increase fines sufficient deterrent
+ need to reduce the pressure on business by reducing
the pressure, encourage the use of domestic goods, try
to invest and develop the quality of domestic
products, balance the energy consumption of
domestic goods and imported; keeping inflation
reasonably.