Issue in Strategic Management in Vietnam - Vinamilk Case

Topics: Milk, Powdered milk, Dairy product Pages: 15 (4176 words) Published: April 29, 2011

In the light of globalization, a well- established strategy makes a great contribution to the success of Vinamilk – the leading dairy company in Vietnam. Vinamilk chooses diversification strategy in order to reduce the risks, meet the customers’ higher demands and increase the competitive strength. The decision of diversification is based on the deep analysis about the company’s resources, value chain, core competencies, performance and product portfolio. As for resource audit, the report looks into both tangible resources (stable and effective financial situation, modern equipment, technology) and intangible ones (efficient human resource, innovation program including R&D, strong brand name). In terms of value chain, Vinamilk has well-organized activities to create more values, from inbound logistics, operations, outbound logistics, marketing & sales to other support activities like procurement, technological development, human resource management and firm infrastructure. Thanks to the company strategy and core competencies, in which of brand name, distribution network , maintaining and developing good relationships with suppliers, human resource management and international technology, Vinamilk has made many progresses since establishment. They have 4 core brands which became very popular to Vietnamese particularly and Vinamilk had earned a huge benefit from these products. In this research, we also want to give some ideas for contributing to the current comprehensive strategy of the company development.


A global economy enables all nations around the world exchange goods, services, people, skills and ideas across geographic borders (Hitt et al, 2007, p.7) [1]. Globalization increases the chances of competition among the companies. Thus, it is of great importance for the managers to have a new mind-set and for the company to develop a strategy at the aim of achieving its competitive advantage in highly competitive landscape. Vinamilk – a big dairy company in Vietnam, gains strategic competitiveness in Vietnamese dairy industry due to its successful value-creating strategy. The purpose of the report is to analyze the Vinamilk company’s strategy with 6 main points: company background and problem identification, resource audit, value chain analysis, core competency analysis, portfolio analysis and performance analysis. Then we recommend a new strategy for Vinamilk by developing a new value-added product “Chocolate”. In this report, we use the information, statistics of Vinamilk for analysis and suggest a new product based on its existing capabilities.


1 Background and problem identification

2 Company background

Vinamilk, the short name of Vietnam Dairy Products Joint Stock company, is the leading dairy company in Vietnam with 37% of market share nationwide (Vinamilk annual report 2008, p.9) [2]. It possesses a broad range of products to meet different customers’ needs with main product lists such as condensed milk, powered milk, fresh milk and other products derived from milk like ice-cream, cheese, yogurts, cheese, fruit juice and cafe. Vinamilk commits to bring the safe, healthy and diverse products with competitive prices and the best services. Vinamilk was initially a state-owned enterprise under the control of the Ministry of Industry in accordance with Decision No.420/CNN/TCLD dated 29 April 1993 (KPMG, 2009, p.1) [3]. Then on 20 November 2003, Vinamilk operated as a joint-stock company according to Registration Certificate No.4103001932 issued by the Planning and Investment Department of Ho Chi Minh city (KPMG, 2009, p.1) [4]. The company was listed on the Ho Chi Minh city Stock Exchange with the symbol “VNM” on 19 January 2006 according to Listing Licence No.42/UBCK – GPNY dated 28 December 2005 issued by the State Securities holding approximately 50.01% of the Company’s shareholdings...
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