Issue in Strategic Management in Vietnam - Vinamilk Case Essay

4191 Words May 14th, 2011 17 Pages

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
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It sets up its own mission by expanding its existing geographical coverage and product portfolios to maintain its sustainably dominant position in the local market and maximizing its shareholder value. With the clear vision and strategy, Vinamilk creates reputation in Vietnamese dairy market as well as well-known brand in the customers’ mind.

3 Problem identification

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

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