introduction to management topic analyze management challenges faced by vinamilk company

In this comprehensive analysis, we will delve into the complex management challenges that VINAMILK has had to face, such as increasing competition as more rivals enter the market, unstab

FPT UNIVERSITY CAMPUS ĐÀ NẴNG

GROUP ASSIGNMENTINTRODUCTION TO MANAGEMENT

TOPIC: ANALYZE MANAGEMENT CHALLENGES FACED BY VINAMILK COMPANY

: Hoang Thanh Hien

CLASS: MKT18D01MAJORS: Digital marketingPERIOD: Spring 2024GROUP MEMBERS STUDENT ID

Huynh Le Nam Giang DS180260Nguyen Nam SonDS180038Hoang Thi NguyetDS180477Nguyen Thao LanDS180228Nguyen Thi Thao Linh DS180034

TABLE OF CONTENTS

1 INTRODUCTION 2

2 CHALLENGES FACED BY VINAMILK COMPANY 2

2.1 Many competitors enter the market 2

2.2 Input raw materials sources are unstable 2

3 SOLUTIONS 3

3.1 Increase brand recognition and customer incentives 3

3.2 Guaranteed quality raw materials 4

3.3 Use reasonable rights, assign authority and responsibility, and create a working environment 5

1 INTRODUCTION

Vietnam Dairy Products Joint Stock Company, also known as VINAMILK, is one of the leading companies in Vietnam in the dairy processing industry, specializing in milk production and milk-based products Established in 1976, VINAMILK celebrated its 45th anniversary in 2021, serving Vietnamese consumers Initially starting with 3 milk factories, VINAMILK now operates 16 factories domestically and internationally, along with 14 dairy farms meeting international standards, managing over 160,000 dairy cows to ensure the growing demand for milk production both in Vietnam and for exports.

With sustainable development over nearly 5 decades, VINAMILK has become the sole dairy enterprise in Southeast Asia listed in the world's Top 40 in terms of revenue It is the most valuablemilk brand in Vietnam and ranks 6th globally in the Brand Finance organization's ranking.However, behind this success is a journey full of challenges and obstacles that have tested the company's management capabilities In this comprehensive analysis, we will delve into the complex management challenges that VINAMILK has had to face, such as increasing competition as more rivals enter the market, unstable input material sources, Vietnamese consumers' preferencefor foreign milk, and propose potential solutions to ensure the company's continuous dominance inthe ever-evolving dairy industry market.

2 CHALLENGES FACED BY VINAMILK COMPANY

2.1 Many competitors enter the market

With the market participation of many strong competitors, Vietnamese consumers have more and more choices with similar product characteristics or alternative products such as: Nestle, Dutch Lady, Abbott,

The tax reduction roadmap that Vietnam committed to when joining the WTO is to reduce taxes onpowdered milk from 20% to 18%, condensed milk from 30% to 25% This is an opportunity for Vinamilk's competitors to easily Easier to penetrate the Vietnamese market.

The current dairy farming industry in Vietnam is mainly based on households (95%) Total fresh milk output only meets 20-25% of milk consumption, the rest must be imported After a number ofyears of overheating development, since 2005 the development of the dairy industry has also slowed down and revealed a number of new difficulties and weaknesses, especially in the issue of macro management organization and organizing production management of livestock facilities This is a challenge to the stability of raw material sources.

In 2010, if the Doha negotiation round is successful, developed countries will reduce or eliminate agricultural subsidies in general and the dairy industry in particular, and raw milk prices will increase.

Dairy cow feed costs account for 70% of the selling price of milk, while this cost in Thailand accounts for only 57%, and Taiwan accounts for less than 43% This is the main reason leading to the high price of raw milk While the price of imported raw materials from milk processing companies is low, dairy farmers are not interested in their work.

Dairy farmers have almost no profit, while raw material buyers are pressuring prices which can reduce the domestic source of fresh milk raw materials, pushing Vinamilk into a competitive buying position with businesses Purchasing other milk.

2.3 In addition, Vinamilk also has some other challenges such as:

The export market still has many potential risks

Exporting vinamilk's products to the Middle East market also has many potential risks For example: The war situation in Iraq and the US greatly affects VNM's revenue.

Powdered milk market share is not high:

Cannot compete with imported powdered milk products from the US, Australia, and the Netherlands According to BVSC's latest report, the domestic powdered milk market is made up of 65% imported milk products, 20% Dutchlady, and 16% Vinamilk.

3 SOLUTIONS

3.1 Increase brand recognition and customer incentives

The Vietnamese milk market is facing difficulties because of the appearance of new and foreign milk brands such as Nutifood, Dutch Lady and TH true Milk, VitaDairy, Nestle, Abbott, These

brands have just entered the market, wanting to quickly reach customers, so they have offered verygood incentives and prices

Nestlé Abbott Dutch Lady

This is very easy to attract customers and can make them forget Vinamilk

To deal with many competitors entering the Vietnamese milk market, Vinamilk needs to expand its brand recognition nationwide Vinamilk is the most known milk brand in the Vietnamese milk market, both urban and rural, but in highland and disadvantaged areas, milk is still a luxury and expensive product Therefore, Vinamilk needs to build campaigns and volunteer activities to make the Vietnamese milk brand completely "cover" the people In addition to measures to increase recognition, Vinamilk also needs to offer promotions and incentives for customers With a long history and the trust that the brand has built over the past decades, it can beat new competitors.

3.2 Guaranteed quality raw materials:

Vinamilk is not yet independent in its raw material sources, mainly depending on imported raw materials, which is one of Vinamilk's weaknesses When domestic raw material sources only meet about 30% of production needs, about 70% of the supply source and the proportion of input materials depend on world supply relationships With raw materials imported from abroad, Vinamilk is still struggling to find a solution Even though there is an organic dairy farm, it still cannot provide enough resources as the demand for milk increases.

Vinamilk and the United States cooperate in milk production

Vinamilk needs to optimize feed costs but still provide enough nutrition to ensure milk quality In addition to expanding natural cow farms for people, Vinamilk needs to have campaigns and incentives for farmers to be able to provide raw materials for domestic production without importing them.

3.3 Use reasonable rights, assign authority and responsibility, and create a working environment

Assigning powers and responsibilities: This is clearly defining who does what, who decides what, and who ensures what responsibilities in Vinamilk 's export activities The purpose of this work is to avoid ambiguity, confusion, and conflict in management, as well as to increase the efficiency and productivity of employees For example, Vinamilk can divide management levels as follows:

Highest level: Export management, including market, legal, business experts, etc., has the authority to make decisions on strategy, planning and budgeting for export activities, as well as monitoring and evaluating the results of the management levels below.

Intermediate level: Department heads, directors, and representatives of Vinamilk in export markets, have the right to implement decisions and plans of the highest level, as well as manage and guide export staff exports in operational tools, such as distribution, sales, customer care, etc.

Lowest level: Export staff have the right to perform assigned tasks, as well as contribute architectural opinions and feedback on issues related to export activities.

Creating a working environment: This is about building a company culture based on respect, trust and mutual support between management levels and employees in Vinamilk 's export activities The goal of this job is to create a comfortable, harmonious, and connected working atmosphere, as well as to improve the morale and capacity of employees For example, Vinamilk can create the following working environment:

Respect: Vinamilk should respect the rights, needs, and opinions of management and employees, as well as respect the differences in culture, customs, and habits of export markets Vinamilk should also respect professionalism, honesty, and fairness in management and work.

Trust: Vinamilk should believe in the capacity, responsibility, and results of management and staff at all levels, as well as believe in the quality, reputation, and value of export products Vinamilk should also believe in the cooperation, support and interaction of departments related to export activities.

Support: Vinamilk should support management and staff levels in implementing export goals, strategies and plans, as well as support difficult issues, challenges and risks in export activities password Vinamilk should also support training activities, meetings and exchange of experience between management levels and export staff.

3.4 - Economical and efficient:

Resource optimization: This is the effective use of energy resources, time, and costs in Vinamilk's export activities, to increase productivity and profits The purpose of this is to reduce waste, increase competition, and protect the environment For example, Vinamilk can optimize resources as follows:

Energy: Vinamilk should apply measures to save electricity, water, and fuel during the production, transportation, and preservation of export products, such as using energy-saving

equipment, using renewable energy, inspecting and repairing electrical, water, and gas systems, etc.

Time: Vinamilk should shorten the production, transportation, and delivery time of export products, such as applying technology and digital transformation, optimizing production processes,and choosing fast means of transportation fast and safe, etc.

Cost: Vinamilk should minimize the costs of producing, transporting, and distributing export products, such as taking advantage of available resources, finding reputable and effective suppliersand partners, and taking advantage of tax incentives and support from trade agreements, etc.

Measuring and evaluating results: This is the use of methods and tools to examine and evaluate the results of Vinamilk's export activities, to promote quality control and find areas for improvement The purpose of this is to improve the efficiency and effectiveness of export operations, as well as to meet customer needs and requirements For example, Vinamilk can measure and evaluate results as follows:

Measurement: Vinamilk should use indicators and data to measure export performance results, such as revenue, profit, costs, market share, response rate, satisfaction rate, etc Vinamilk should also use tools and software to collect, process, and analyze this data, such as Excel, Power BI, Google Analytics, etc .

Evaluation: Vinamilk should use methods and criteria to evaluate export performance, such ascomparison with plans, goals, and standards, comparison with competitors, comments and comments from customers, etc Vinamilk should also use measures and solutions to improve export performance, such as changing strategies, plans, and budgets, training and improving employee capacity, changing suppliers and partners, etc .

4 CONCLUSION

One of the challenges that Vinamilk is facing is fierce competition from competitors in the industry The appearance of many other milk brands has made the market more competitive than ever To maintain its position, Vinamilk needs to maintain product quality and create a difference to attract customers.

In addition, financial management is also an important issue Vinamilk needs to control production costs and save resources to optimize profits At the same time, they need to invest in research and development to not fall behind in the technology race.

Ultimately, building and maintaining your reputation is important Vinamilk needs to maintain its commitment to customers and build a positive image in the hearts of consumers By applying effective management principles, Vinamilk can continue to grow and face future challenges.

4 Chi, L H (2021, June 18) Phân tích ma trận SWOT của Vinamilk Luận Văn Việt

8 Melodylogistics.com (2021, April 14) Xuất khẩu là gì? 6 hình thức xuất khẩu phổ biến Melody Logistics https://melodylogistics.com/xuat-khau-la-gi-vai-tro-va-cac-hinh-thuc-xuat-khau-pho-bien-889.html

9 Biện pháp hạn chế xuất khẩu, hạn chế nhập khẩu (n.d.) phap-luat-moi/vn/thoi-su-phap-luat/tu-van-phap-luat/44444/bien-phap-han-che-xuat-khau-han-che-nhap-khau#google_vignette

https://thuvienphapluat.vn/chinh-sach-10 a280004, & MGM.A-0388.DMHa (2022, April 7) Phần mềm quản trị doanh nghiệp NỀN TẢNG QUẢN TRỊ DOANH NGHIỆP HỢP NHẤT MISA AMIS

https://amis.misa.vn/45040/nguyen-tac-quan-ly-la-gi/

6 APPENDIX

6.1 Appendix 1: Contact details for interviews:

Company's name: Da Nang branch of Vietnam dairy products joint stock company.Address: 7th Floor Post Office Building, 271 Nguyen Van Linh, Vinh Trung Ward, Thanh Khe

District, Da Nang City, Vietnam.

Phone: (84 0236) 358 4848.Fax: (84 0236) 389 72 23.

6.2 Appendix 2: Additional supporting materials

Detailed analysis of Vinamilk's business strategy: This article presents a comprehensive SWOT analysis of Vinamilk, highlighting its strengths, weaknesses, opportunities, and threats in the domestic and international markets.

Hùng, V N (2023b, September 12) Detailed analysis of Vinamilk's business strategy Malu Design - Branding Agency Malu Design - Branding Agency

https://maludesign.vn/en/news/detailed-analysis-of-vinamilks-business-strategy/#:~:text=The%20main%20challenges%20in%20Vinamilk%E2%80%99s%20SWOT%20analysis%20can,health-related%20products%2C%20customers%20tend%20to%20prefer%20foreign%20products.