Kinh Do Bakery

Topics: Stock market, Confectionery, Environment Pages: 12 (4331 words) Published: March 25, 2013
Executive summary
This report was aimed at analyzing current issues in the organizational environment of KDC and providing recommendation for the company to improve its performance regarding environment. The analysis focuses on the external environment of KDC. Overall, KDC has a quite favorable external environment to a certain extent to make out the most of it. However, each of the factors in its external environment have good and bad effects on its outcome, realizing and understanding all of which can help the corporation to exploit the most from the environment and avoid mistakes reducing its achievements. External environment is divided into general and specific factors. In the general environment, economics is enduring massive fluctuations, making customers cut down expenditure and turn to economically efficient products. The political condition in Vietnam is stable, appropriating for applying in a long time. Whereas, the life styles of people are under a considerable change, they adopt time- saving meals, which is an opportunity for instant foods of KDC. Nevertheless, the instant foods are also proved not to be so good for health. Finally, beside a potential domestic market, which possesses an ideal population structure, as Vietnam joined in WTO, it comes a chance of extending KDC’s market into the world. In the specific environment, because of the significant drop in people’s income comparing to real value of commodity, the purchasing power of customers decreases. The widespread of fake and low quality goods turns out to be an opportunity for KDC as people trust in established organizations. Regard the potentiality of confectionery industry development in Vietnam, it is easy to understand the vast number of KDC’s rivalries in the market, and despite the leading role of KDC, the others have their own considerably outstanding strengths. KDC has a wide variety of suppliers both from domestic and abroad, which bring not only benefits but also disadvantages due to the differences in price and the distance to deliver. Finally, pressure groups always react in case of wrongdoings. With a view to solve the problems and exploit the market, KDC should cut down the price, diversify the products, build development and extend plans. They also should consider more about the responsiveness to the consumers and society I. Introduction

KD is a big corporation which is the combination of many subsidiaries and each of which has the specialized production. However, when it comes to the brand name of KDC, people often associate it with the confectionary production, which is under implement of Kinh Do Bakery. Established in 1993, after 19 years of development, this company has become the leading one in the food industry. KDC is considered to be one of the well-known joint- stock company which is not only dominating in the market of Vietnam but also expanding to the international scope. In the recent years, though the economic recession has put a lot of pressure on the well-being of many companies, KDC still has the good performance and even make the incredibly high profit in the stock market of Vietnam. The annual report of KDC reveals that in 2011, the revenue increased by 32% and on average every SBU achieved the growth level of 2 digits. As food processing is the main production activities and also the base for the development of the whole group, the annual turnover from this section strikingly accounts for nearly 90% of the total revenue for the corporation. The customer that KDC targets at is the Vietnamese one especially children because normally, the confectionary good is more preferred by this group than the adults. Therefore, what the company is producing and providing to the market is of various kinds including candies, cakes, soft drinks, ice cream and other product made from milk. In addition, they have the desire for bringing their products to the world market to consolidate their position and get more profit. No matter...
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