The Influence of Vitasoy on the Issue of Melamine in Milk

Topics: Milk, Dairy product, Brand Pages: 2 (692 words) Published: November 28, 2009
A chemical used to make plastics and tan leather, Melamine, was found in milk products from China's biggest producers and linked to at least four infant deaths in September 2008. The impact of the melamine scandal on the milk industry in China was great. Sanlu is reportedly facing bankruptcy amid the milk scandal as well as domestic companies Mengniu and Yili. (Chao, Sen and Tsai, 2008) It is noted that Beijing-based Sanyuan is the biggest winner in the scandal because its milk was found to be free of melamine. Customers largely abandon domestic powdered milk but foreign brands milk only got limited quota for entering the Chinese market. (Chan, Griffiths, and Chan, 2008) The market confusion caused by the melamine related issue that make people rush to find substance for the milk product. This is an external condition that prompted more consumers to go for soymilk as an alternative to dairy milk. From the case of Vitasoy, it is realized that external condition would influence the management practices that covered the internal resources and capabilities and the strategic actions. Vitasoy has goodwill of branding that offering a wide range of high-quality, nourishing and tasty products. According to the 2009 annual report by Vitasoy, the net sales increased by 7% in Hong Kong and Macau through a successful product innovation programme. Because of the back of effective brand building, distribution network expansion and market penetration, net sales grew strongly by 56% in Mainland China. The development and introduction of new products exclusive to the domestic market also boosted sales growth in Mainland China. By the strong brand equity and product innovation capabilities, the sales performance of the Australia and New Zealand operation was impressive. The growth momentum was able to maintain in the North American market by re-focusing on fast-growing products and penetrating into new alternate business channels.

Vitasoy got rich experience on promoting and...
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