Strategic Management Analysis in Vitasoy

Topics: Soybean, Milk, Soy milk Pages: 9 (2728 words) Published: March 17, 2013

Vitasoy Intentional Holding Limited

Company overview
Vitasoy International Holding Ltd is the biggest Soymilk Supplier in Hong Kong. It is also a listed company which manufacture and sale of food and beverages. The Group operates the following subsidy around the world, Vitasoy Hong Kong, Vitasoy China which produces and sale of Vitasoy (Soymilk) and Vita products (i.e. milk, tea and water). Vitasoy Australia, Vitasoy US produce and sale of Vitasoy (Soymilk) and Tofu in Australia and United States. Singapore Unicurd Food produces and sells Unicurd Tofu in Singapore. Vitaland Services Limited which operate tuck shops and student lunch meal services in Hong Kong primary and secondary school.[i] Hong Kong Gourmet which serves as centralized kitchen for Vitaland’s lunch box services and other catering services

After World War One, founder Dr. K S Lo has a dream to produce high protein milk alternative for Chinese people with affordable price. Vitasoy - a nutritious, high-protein soymilk drink was born on March 9, 1940 in Hong Kong. Because of perishable nature, Dr. Lo sell soymilk and delivered soymilk freshly. With the increasing demand for Soymilk, traditional way of producing Vitasoy could not satisfy customer’s need. In 1953, sterilization technology was included in producing Vitasoy which helps the drinks to be kept without the need of refrigeration. It is the first company to adopt Tetra Pak packing technology for manufacturing soymilk in 1975. (Technology which included UHT (Ultra High Temperature) sterilization, aseptic cartons packing which ensure products can be kept for months without refrigeration) The company became a famous brand name in Hong Kong and they expend their market to overseas markets from 1980s. [ii] Nowadays, it turns into international company which factories located around the world and even listed on the Stock Exchange of Hong Kong.

Vitasoy offers drinks in the following categories: natural soybean, Vita tea, dairy milk, Vita juice, Vita water, Vita Supreme coffee. The famous brands in Natural soybean category includes its best sale product – Vitasoy and with various flavored (malt, rad bean, coconut, melon, chocolate and more), Calci-Plus (soymilk with high calcium and low fats), San Sui Tofu. Vita Lemon Tea, Vita Chrysanthemum tea are the most popular among several types of Vita Tea. For Dairy Milk category, Vita Chocolate milk and Vita fresh milk are the most successful brands in the market. Vita Tsing Sum Zhan is focus on ready-to-drink herbal drink. Industry Analysis

Threat of New Entrants
When talk about the newly entrants which may threaten the Vitasoy’s dominative position, we firstly think about the Retail Owned Brand’s products. A retailer own-brand is a product or service that either carries the brand of the retailer or a separate brand name that is controlled by the retailer.[iii] For example, “No Frills”, “First Choice” are the retail owned brands for Wellcome. This brand usually charge for lower price than other brand. Another major threat is new beverage introduced by Supermarkets. Supermarkets seek for high profit margin beverage from oversea. This motion may increase the rivalry in the market. Competitive Rivalry

The competence of beverages market is very fierce. Vitasoy’s most important rivalry is Coca-Cola. Hi-C, Nestea, Healthworks are some of the brands owned by Coca-cola. Hi-C is the weapon from Coca-Cola to threaten Vitasoy. It produces the similar carton packages of soy drink and tea, targeted teenagers and lower price to against Vitasoy. There is no obvious difference between those brands, many people choose Vitasoy just because it is the flavor of childhood. Supplier Bargaining Power

To produce soymilk, the most important component is soy bean. To reduce the stress of soybean price, the company purchased soybean farm in northeast China to solve the part of demand. Sugar and tea are also the keys to good taste, future options are used...
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