In our last blog, we had elaborated on the SWOT Analysis of one of the largest dairy companies in India, Mother Dairy. This time, we will look into the SWOT Analysis of Vinamilk in detail.
It is the 3rd most valued brand in Vietnam in Forbes list of 50 most valuable brands in Vietnam with a brand value of US$2.1 billion. Vinamilk is listed as the largest dairy company in Vietnam. With over 40 years of experience in the industry, it provides its customers with some of the finest quality products in the market. It caters to international markets like the United States, France, Canada, Poland, Germany, the Middle East, and Southeast Asia.
To market to such a large audience it uses one of the most popular marketing methods which is digital marketing, helping them advertise to customers in different countries. So if you are interested in learning the latest skills in digital marketing – check out our Free MasterClass on Digital Marketing 101 by the CEO and Founder of IIDE, Karan Shah.
Thus this makes us keen to know how Vinamilk has grown exponentially in its field, we have done an in-depth study on the topic SWOT Analysis of Vinamilk. But before we dive into its SWOT Analysis let us first know about Vinamilk as a company, its products, competitors, financials, and more.
Vinamilk stands for Vietnam Dairy Products JSC. It was the first company to be included in Forbes Asia’s 200 Best Under A Billion list from Vietnam. It was established in 1976 which is a joint-stock company and most of its shares are with Vietnam’s State Capital Investment Corporation (SCIC) which is 36% of the total shares.
Vinamilk comes under the food processing industry, specifically, the dairy industry. It manufactures, markets, wholesale trades, and retail distributes dairy products, such as milk of various forms and flavours, including fluid milk, powdered milk, and sweetened condensed milk, along with yoghurt, ice cream, frozen yoghurt, cheese, and infant nutrition flour. Some of its other products are soya milk, rice milk, bottled coffee, sugar, bottled juice, and other non-alcoholic beverages.
Vinamilk also exports several milk-based products to the Middle East, Cambodia, the Philippines, and Austria. It holds a market share of about 47% in the Vietnam dairy industry. It earned a total revenue of VNĐ 59.6 Trillion in 2020. It has a market capitalization of VNĐ 188 Trillion.
Quick Stats About Vinamilk
|Origin||Ho Chi Minh City, Vietnam|
|No. of Employees||9,361 (2020)|
|Company Type||Joint-Stock Company|
|Market Cap||VNĐ 188 Trillion (2020)|
|Annual Revenue||VNĐ 59.6 Trillion (2020)|
|Net Profit||VNĐ 15.71 Trillion (2020)|
Products of Vinamilk
Vinamilk is the largest dairy brand in Vietnam. It provides its customers with a wide range of products with diverse choices. Some of Vinamilk’s products are listed below:
- Nutrient Drinks
- Milk Products
- Infant Cereals
- Ice Cream
Close Competitors of Vinamilk
Vinamilk has its branches in different countries thus this increases the competition for Vinamilk. Following are some of Vinamilk’s competitors:
- Dutch Lady Vietnam
- Nestlé Vietnam
- Abbott Mead Johnson Friso and
- Nutifood Grupo LALA
Now that we know about the company let us start with the SWOT Analysis of Vinamilk.
SWOT Analysis of Vinamilk
SWOT analysis is the study of a companies Strengths, Weaknesses, Opportunities, and Threats in the industry. This helps the company to know where it stands in the market and analyze its strategies.
Let us know about its SWOT Analysis of Vinamilk, starting with its strengths.
Strengths of Vinamilk
Strengths are the positive point of a company that keeps it ahead of the competition. Following are Vinamilk’s Strengths:
- Nationwide Distribution Channel- Since Vinamilk is a long-standing brand its influence spreads all over Vietnam. It has 250 distributors and 200,00 outlets over 64 provinces in Vietnam itself. Using its influence it has taken over almost 75% of the milk industry based in Vietnam.
- Diverse Product Range – Not only does Vinamilk sell fresh milk and milk powder but it also sells different kinds of products like cheese, juices, and other nutritional consumables. Diversity in options for the consumer causes an increase in sales of Vinamilk.
- Familiar Trademark – Vinamilk is a long-standing name in the industry. It has gradually evolved into a household name for Vietnamese people. Familiarity if the brand among the local people results in the people choosing Vinamilk over other brands.
- International standard manufacturing equipment and Technology- Vinamilk uses equipment and technology on par with the global big-name industries. It uses European techniques for manufacturing and Niro Denmark technology for eject desiccation. Using new and advanced technology helps Vinamilk maintain the hygiene and quality outfits products and increase the favorability of the brand.
- Strong Marketing – Vinamilk has started an aggressive Digital Marketing campaign taking over the social media of Vietnam. Since the campaign Vinamilk has seen a nearly 60% rise in sales and launched various schemes to keep up with the demand. Also marketing its use of advanced technology and its new products increases the awareness among the people. Social media marketing is one of the demeaning marketing strategies used by companies. If you wish to learn the latest skills in marketing, check out IIDE’s Social Media Marketing Course now.
- Several subsidiaries – Vinamilk has a large number of subsidiary companies that promote several other products. These subsidiaries operate independently and increase the awareness of the sales of the parent company Vinamilk.
Weakness of Vinamilk
Weaknesses are the internal factors of a company that creates a drawback in the growth of the company. These problems need to be addressed before it becomes more troublesome. Following are the Weaknesses of Vinamilk:
- Raw materials- The raw materials required for manufacturing several products are imported from outside of Vietnam. Nearly 65% of raw materials are imported giving rise to a large capital use. If raw materials are used from Vietnam itself it will give employment opportunities to the local people.
- The decline in export Business- Since the pandemic, the export business of Vinamilk has seen a sharp decline. Export business is fickle and Vinamilk must come up with new schemes and plans to continue the export business sector of the company to keep up with the market at the global level.
- Negative Press- Rumours have always surrounded Vinamilk regarding the various products but none of them has been proven to date. Competitors have always targeted Vinamilk and spread unfounded rumors among the people and caused panic. The company should keep up to its reputation in the market with the latest skills of online reputation management which are crucial for any company. If you are interested in learning this skill, check out IIDE’s Online Reputation Management Course now.
Opportunities of Vinamilk
Opportunities are the positive factors for a company. This helps the company to grow in the market and create more customers for its brand. Following are some of the Opportunities for Vinamilk:
- Rapid Urbanization – The rising quality of life and improving the economy of Vietnam will increase the need for dairy products that Vinamilk can meet. Growing cities and towns increase the demand for products and various other dairy products.
- Government Policies- The Government of Vietnam has started schemes to support industries that boost the nation’s economy. Vinamilk can use the schemes and boost its market. Several areas are being loaned out to such companies to boost the falling economy of Vietnam.
- Demand from China- Being neighbours with China is an advantage for Vinamilk. The rising demand for milk products in China can be sated by Vinamilk and thus increasing its market size. China has the largest market for Vinamilk’s products and using the right plans and ways to enter this huge market can prove beneficial for Vinamilk. This also will accelerate their plan to expand globally.
- Expanding in Sports Nutrition- With globalization, the sports nutrition industry has seen growth. Vinamilk can expand its branches to the sports nutrition industry in Vietnam and see a boom in business. Milk plays a big role in the sports nutrition industry and exploiting this market could be favorable for Vinamilk.
Threats for Vinamilk
Threats are the potential risks that Vinamilk can face in the future. It needs to be aware of such threats and be prepared with proper solutions to tackle such situations. Following are some threats for Vinamilk:
- Price Instability- Since Vietnam is an underdeveloped nation Vinamilk must provide its services at a reasonable cost that can be afforded by the general public at the same time maintaining the quality of its products. Also, the cost of products exported must be on par with the global competitors.
- Alternative for Milk- Vegan has seen a rise in the trend, Vinamilk needs to adjust and produce new products supporting this trend to improve its market size. Soymilk and Vegan milk can be the new products launched by Vinamilk thus gaining the support of the trend followers not only in Vietnam but also on a global level.
- Rising Competiton- Sensing Vietnam’s potential as a large market several global milk-based that in milk brands have entered Vietnam and threatened Vinamilk out of its home territory. Several new companies have emerged due to rapid urbanization and thus prove to be a threat to steal the consumers from Vinamilk. The competitors of Vinamilk include
With this, we have come to an end of the SWOT analysis of Vinamilk. These studies help the company plan strategically and grow its business in all possible ways.
We can conclude that Vinamilk is one of the most valued brands in Vietnam. It has a strong nationwide distribution channel and a strong marketing plan as well as it has opportunities from government policies and the increase in demand from China. Even though it has such a good market hold there are some flaws. There are rumours surrounding Vinamilk products by competitors and the increase in competition from global players in its home country is reducing its market share.
These factors can be tackled by the use of better digital marketing knowledge by improving its brand image and improving its brand reputation as most of the people are on digital platforms it is easy to connect with them. If you are interested in learning more and upskilling, check out IIDE’s 3 Month Advanced Online Digital Marketing Course to know more.
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