Macro-Enviromental Analysis

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Assignment 1
Macro-environmental analysis
Company: The Dairy Farmers Co-operative Milk Co. Ltd
Products: Dairy products
Country: Vietnam


Executive Summary

In recent decades, the Vietnamese economy has experienced an unprecedented growth. Along with the significant development of the economy, the increasing in population and income has led to a rising need for imported dairy products like milk, cheese, yogurt and so on. As the result, Vietnam has become a potential market for dairy exporters of many countries, especially Australia. Moreover, due to the dramatic progression of Vietnamese food industry, the demand of imported dairy ingredients is higher than ever before. Another factor influencing the demand for imported foods is that more wealthy consumers with disposable income tend to spend more on dairy through expenditure from retail outlets and supermarket or dining out. In general, these consumers concentrate in the large cities like Ho Chi Minh city, Hanoi, Danang, Haiphong and Can tho.

Another advantage for Australia, in particular Dairy Farmer to import dairy products into Vietnam market is the geographical advantages. Compared with competitors from the USA and Europe, there is a shorter shipping time from Australia, thereby reducing transport costs and increasing the opportunities of the fresh chilled products, for instance fresh milk, yogurt or custard.

In addition, at the end of 2006, Vietnam became a member of the World Trade Organisation (WTO), thereby reducing investment barriers including investment restriction, tariff, non-tariff barriers and subsidies. Consequently, there is stronger trade framework not only to protect domestic economy but also encourage overseas countries to trade with Vietnam. Due to the reduction of tariff, the Agribusiness Group in Victoria (2009) find out that the performance of most important areas to Australia in past 5 years have significantly developed. However, in next 5 years, it is predicted that the trade between Australia and Vietnam will even become more noticeable.

Additionally, Vietnam is known as a country with a diversified culture. Majority Vietnamese speak Vietnamese; this can be a challenge for Dairy Farmers due to language barrier. In Vietnamese attitude, family and respect play a core role in every relationship. In order to successful run business in Vietnam, Dairy Farmers must understand and classify all aspects in Vietnamese life style.

Nevertheless, supply chain management, import requirements and satisfying customers and/or consumers in delivering the product are key challenges in Vietnam like any other potential market. Exporters have encountered considerable risks in importing goods into Vietnamese market as they have in other developing countries where a fragmented, non-transparent and often fraudulent supply chain exists. The selection of a reputable importer/agent who involves in the transactions that take place can address much of this risk.



Recently, coupled with globalisation, a “borderless economy” is being created. This means that many organisations have more opportunities to be able to overcome the geography boundaries, but they also face increasing challenges due to market forces. Consequently, Balmer (2009) shows that the world economy has witnessed the replacement from the state monopolies to the opening of national economies in association with the introduction of rules which have emerged promote the equal competition in the world market. Therefore, knowledge about international marketing is extremely important to the organisation. According to Czinkota, Ronkainen, Sutton-Brady, Beal (2008), international marketing is defined as the process in which the transactions are planned and conducted across countries’ boundaries to generate exchanges that meet the...
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