Table of Contents PAGE

I. INSTRUCTOR......................................................................................................1
1. Study the problem..............................................................................................1
2. About TH true MILK Company......................................................................1
II. CONTENT..............................................................................................................3
ABOUT PESTLE C...................................................................................................3
1. POLITICAL.........................................................................................................4
2. ECONOMIC.........................................................................................................7
2.1. Level of economic growth...............................................................................7
2.2. Inflation rate....................................................................................................7
2.3. Unemployment rate.........................................................................................7
2.4. Balance of trade..............................................................................................8
3. SOCIAL................................................................................................................9
3.1. Social environment..........................................................................................9
3.2. Demographics.............................................................................................11
3.3. HOFSTEDE model...................................................................................11
4. TECHNOLOGICAL..........................................................................................13
5. LEGAL................................................................................................................ 16
6. ECOLOGICAL.................................................................................................18
7. COMPETITIVE ENVIRONMENT..................................................................21
8. SWOT.................................................................................................................. 26
8.1. Strengths........................................................................................................26
8.2. Weakness.......................................................................................................27
8.3. Opportunity....................................................................................................27
8.4. Challenge......................................................................................................28
III. SUMMARY......................................................................................................29
CONCLUSION.......................................................................................................29
REFERENCES..........................................................................................................30
I. INSTRUCTOR
1. Study the problem
If in the past, finding a glass of milk was quite difficult no matter how
high the customer's ability to pay, now with only a few thousand dongs, every
customer can give themselves a delicious and nutritious glass of milk.
With an economy on the rise, rising incomes along with a better
understanding of the health benefits of dairy preparations as well as the
emphasis and concerns on life health make the demand for milk increasing.
Therefore, the dairy industry is one of the fast-growing markets with many
large domestic enterprises and multinational companies. It's impossible not to
mention TH True milk. The emergence of the TH True Milk brand has created
another bright spot for Vietnam's dairy industry, as a large-scale fresh milk
processing process meets international standards in Vietnam. The appearance of
TH True Milk is warmly received by consumers in the period when the milk
market is facing many fluctuations. Contributing in no small part to the success
of TH True Milk is a professional, logical, and wise business strategy in a
fiercely competitive environment.
In a bustling and competitive economy, the diverse dairy market gives
consumers an overwhelming exposure to countless milk suppliers but TH True
Milk has made a deeply beautiful impression with the image associated with
"CLEAN" milk. From a small dairy company in Vietnam that was marketed by
Vinamilk and Dutch Lady, from where TH True Milk can go beyond the world,
especially TH True Milk has boosted exports to markets such as China,
Australia,... and including South Korea, an extremely fastidious and
competitive market, challenges that it is difficult for any dairy business to
successfully penetrate by domestic companies. So what makes TH True Milk
successful in general and TH True Milk's business strategy in Korea in
particular?
Let’s join with us to find the answer through the topic:
“SOUTH KOREA IS AN ATTRACTIVE MARKET FOR TH True
MILK”
2. About TH true MILK Company
Trading name: TH Joint Stock Company 
Founder : Mrs. Thái Hương - Bac A Bank president
Abbreviation: TH True MILK 
Telephone numbers - Fax: 0388.609018
web: thmilk.vn

1
 TH Group’s  logo
History of formation and development: TH Dairy Food Joint Stock
Company under TH Group was established with the financial advice of Bac A
Joint Stock Commercial Bank. Besides the business of financial services and
social security activities, North Asia Commercial Joint Stock Bank pays special
attention to investing in the dairy and food processing industry.
From that starting point, TH Group is gradually developing to become
the leading producer in Vietnam providing clean food products derived from
nature, including fresh milk, clean vegetables, and vegetables,... international
quality. With the goal of keeping the essence of nature intact in each product,
TH Group has equipped modern technology as well as the world's leading
human resources. TH Group also applies a high-end management system and a
closed and synchronous production process from the stage of cultivation to the
distribution of products to consumers. All aim to serve consumers the cleanest,
safest, freshest, and most nutritious products. In 2010, TH True Milk was
launched and was the largest investment in Southeast Asia, applying foreign
techniques and ensuring to bring clean milk to consumers.
TH Group's product portfolio now includes TH True Milk pasteurized
fresh milk products and dairy products. TH Group is also developing a retail
store system Business lines: Processing and trading pasteurized fresh milk.

TH True MILK's products( source: thmilk.vn)

With high potential and investment from TH True Milk, the group
always sells and distributes products with a vision and mission:
 Vision
   TH Group wishes to become the leading manufacturer in Vietnam in
the clean food industry derived from nature. With a serious and long-term
investment combined with the most modern technology in the world, we are

2
determined to become a world-class food brand that is trusted by everyone,
everyone loves and the country is proud of.
  Mission
       With the spirit of being close to nature, TH Group always makes
every effort to nourish Vietnamese physical and soul by providing food
products derived from nature – clean, safe, fresh, and nutritious.
 Development oriented goals
Proceed to the dairy farming project in the concentration barn and milk
processing with a scale of 1 billion 200 million USD with 137,000 dairy
animals on 37,000 hectares of land. When completed, it will meet 50% of the
mayor's milk product needs in the country, becoming the leading supplier of
clean milk and pasteurized fresh milk in Vietnam. Launching TH True Milk
pasteurized fresh milk products, while expanding the production of products
made from fresh milk; implement the project to provide fresh vegetables and
other clean foods.
2. Milk market share in VietNam
In 2020, the revenue of dairy products in Vietnam reached VND 64.4
trillion, an increase of 10.3%. Revenue from milk and dairy products in
Vietnam is expected to remain at 7-8% per year in the period 2021-2025,
reaching a total value of about 93.8 trillion VND in 2025. In particular, yogurt
is expected to have the highest growth rate. with a CAGR of 12% per year. In
2020, TH True MILK's market share in the dairy and dairy products industry
increased, accounting for about 6.1%; The total awareness of consumers with
the brand is 100%

Milk market share in VietNam in 2020

3
II. CONTENT
ABOUT PESTLE C
PESTEL Analysis is a strategic framework used to evaluate the external
environment of a business by breaking down the opportunities and risks into
Political, Economic, Social, Technological, Environmental, and Legal factors.
PESTEL Analysis can be an effective framework to use in Corporate
Strategy Planning and for identifying the pros and cons of a Business Strategy. 
Political Factors
When looking at political factors, you are looking at how government
policy and actions intervene in the economy and other factors that can affect a
business. These include the following: Tax Policy, trade Restrictions, tariffs,
bureaucracy
Economic Factors
Economic Factors take into account the various aspects of the economy,
and how the outlook on each area could impact your business. These economic
indicators are usually measured and reported by Central Banks and other
Government Agencies. They include the following: Economic Growth Rates,
interest Rates, exchange Rates, inflation, unemployment Rates
Social Factors
PESTEL analysis also takes into consideration social factors, which are
related to the cultural and demographic trends of society. Social norms and
pressures are key to determining consumer behavior. Factors to be considered
are the following: Cultural Aspects & Perceptions, health Consciousness,
populations Growth Rates, age Distribution, career Attitudes
Technological Factors
Technological factors are linked to innovation in the industry, as well
as innovation in the overall economy. Not being up to date with the latest trends
of a particular industry can be extremely harmful to operations. Technological
factors include the following: R&D Activity, automation, technological
Incentives, the Rate of change in technology
Environmental Factors
Environmental factors concern the ecological impacts on business. As
weather extremes become more common, businesses need to plan how to adapt
to these changes. Key environmental factors include the following: Weather
Conditions, temperature, climate change, pollution, natural disasters (tsunami,
tornadoes, etc.) 
Legal Factors
There is often uncertainty regarding the difference between political
and legal factors in the context of a PESTEL analysis. Legal factors pertain to
any legal forces that define what a business can or cannot do. Political factors
involve the relationship between business and the government. Political and
legal factors can intersect when governmental bodies introduce legislature and
4
 policies that affect how businesses operate. Legal factors include the following:
Industry Regulation, licenses & Permits, labor Laws, intellectual Property 
1. POLITICAL
1.1. Characteristics
1.1.1. Government system
South Korea's politics take place within the framework of a democratic
republic of presidential congresses, under which the President is the head of
state, and a two-party system. Based on the nature of the current ruling class of
Korean society, the bourgeoisie, democracy in Korea is now bourgeois
democracy. South Korea's constitution allows for the establishment of political
parties, but their activities and objectives must be democratic. Political parties
in South Korea have been and will be contesting fierce parliamentary elections
to seize state power. To win the election, the most votes must be cast from the
people, another common point in the political party system in capitalist
countries is that although many parties of many classes run for the state power
system, in the end only the party of the bourgeoisie wins. This is the most
principle of politics - only a single pole of power belongs to the bourgeoisie.
1.1.2. Political stability and diplomatic
South Korea has a stable political environment. South Korea is an
important member of global organizations such as the UN, WTO, OECD, and
blocs such as the G20, ASEAN plus three,... In addition, they have good
diplomatic and trade relations with major countries such as the US and develop
friendly relations with Russia and China, Vietnam. The partnership between
Vietnam and South Korea goes far beyond the territory of the two countries.
Hanoi and Seoul work closely to address the security issues of the Asia-Pacific
region, including maritime security,... Therefore, the leaders of the two
countries regularly have contacts even in the context of the ongoing pandemic.
However, relations with North Korea are almost always hostile, with
disagreements also frequent with Japan, largely because of the historical
atrocities that Japan has previously inflicted on South Korea.
1.1.3. Corruption

5
 Global Corruption Index 2021 (source: transparency.org)

Abuse of power, bribery, and corruption are some of the serious

problems south Korea has faced. Some politicians and business individuals
have acknowledged corruption is a serious problem. The public ranks
corruption in the public sector as the country's fourth most serious problem,
ranking only under economic instability, South-North Korea relations, and local
nepotism.
The biggest corruption scandal in the country's political history is the
case of Park, South Korea's first female president, who was ousted in March
2017 over allegations of abuse of power and bribery. Immediately after this
incident, South Korea tightened its anti-corruption laws.
According to South Korean Anti-Corruption and Civil Rights
Commission (ACRC) Chairman Jeon Hyun-heui, South Korea is showing
improvements in integrity assessment indicators and transparency systems.
South Korea scored a record high of 62 out of 100 on the 2021 Corruption
Perception Index (CPI) released by Transparency International (TI) on Jan. 25.
It is the 32nd highest score out of 180 countries and territories.

Korea's participation awareness index from 2012-2021 (Source: statin.com)

6
 South Korea's CPI rating and score rose 1 place and 1 point
respectively compared to 2020, marking the fifth consecutive year of
improvement. It can be said that Korea is moving in the right direction and
succeeding on the path to making the country fair and integrity.
1.2. Challenge and opportunity
a. Opportunity

 As a highly democratic country with stable politics, Koreans are free to

choose consumer products according to their personal will, increasing the ability to be
selected by Korean consumers.
 The relationship between Vietnam and The Republic of Korea has
become increasingly close, especially through the signing of the FTA agreement
creating many incentives for Vietnamese exports through Korea in general and TH in
particular.
 The growing problem of corruption demonstrates that the abuse of power
and money to dominate the economy decreases, small businesses or new entrants to
markets such as TH will not worry about being squeezed by non-transparent forces.
b. Challenge
Because Korea and Vietnam have two completely different political
regimes when entering Korea TH will definitely encounter many surprises, this
requires TH to learn, research, and evaluate the politics of Korea to avoid
making mistakes.
2. ECONOMIC
2.1. Level of economic growth
South Korea's economy grew 1.2 percent in the last quarter of 2021, up
more than 0.9 percent from the previous quarter. Government spending rose 1.1
percent, construction investment rose 2.9 percent, while infrastructure
investment grew at the same pace. Exports increased by 5%. Imports rose 4.3
percent.

South Korea's economic growth rate as of February 2022(Source: Tradingeconomics.com)

7
2.2. Inflation rate
The consumer price index in South Korea increased by 3.7% in
February 2022. The latest figures came close to a decade high of 3.8% in
November 2021 due to soaring energy costs in tight supply and tensions
between Russia and Ukraine. Inflation in South Korea has also remained above
3% since October 2021.

Inflation rate in Korea as of February 2022 (Source: Tradingeconomics.com)

2.3. Unemployment rate

South Korea's unemployment rate was 3.4 percent, down 1.5 percent
from the same month a year earlier. 

The structural unemployment rate fell to a record low of 2.7 percent in

February, down from 3.6 percent the previous month.

South Korea's unemployment rate as of February 202(.Source:Tradingeconomics.com)

The government has allocated a third of the total budget to welfare and
employment. The number of people employed in February 2022 was
27,402,000, the same month increased by 1,037,000 people (3.9%) compared to
the previous month. Of that, about 254,000 jobs were added in health and social
8
 care services, accounting for a quarter of the total number of jobs added, with
about 135,000 jobs added in transportation and warehouses. However,
employment in the wholesale and retail sectors continued to decline, losing
nearly 47,000 jobs from a year earlier.
2.4. Balance of trade
South Korea's trade balance surplus fell to $0.84 billion in February
2022 from $2.33 billion a year earlier, as imports grew faster than exports

South Korea trade balance as of February 2022 (Source: Tradingeconomics.com)

The South Korean government said trade conditions would face a
number of challenges, including high raw material prices and supply chain
instability due to geopolitical tensions; but they planned to implement positive
support measures for exporters. In 2021, the country exported $29.49 billion,
down sharply from $44.76 billion in 2020.
Y Expor Impor
ear t Value t Value
2 604,85 535,20
018 9,657 2,428
2 542,23 542,23
019 2,610 2,610
2 512,49 467,63
020 8,038 2,763
2 644,40 615,09
021 0,368 3,447
Import and export output (US$1000) (Source: Kita.org)
2.5. Challenge and opportunity
a. Opportunity
             From the above analysis, you can clearly see the opportunities
when investing in the Korean market. South Korea's economy is growing
despite the negative effects of the COVID-19 pandemic. Infrastructure is also
focused on investment. Despite the slow growth rate, there is still a certain
attraction for investors.
9
              The inflation rate does not fluctuate too much, mainly because the
rising cost of raw materials comes from geopolitical tensions. Interest rates are
also kept at a stable level by the central bank for sustainable economic
development, creating a more favorable environment for investors.
             Falling unemployment along with government policies on
workers also open up opportunities for investment. Moreover, the trade balance
surplus is also a good sign that the economy is growing and growing.
b. Challenge
              The most noticeable challenge is the negative impact of the
COVID-19 pandemic on economic growth in general and trade activities in
particular such as disruptions in supply. With the current complicated epidemic
situation in South Korea, this will be a major obstacle to investing in the market
in the country.
              Along with that, Russian and Ukrainian war tensions affect prices
and inflation rates in the country.
 

3. SOCIAL
3.1. Social environment
a. Language
Korean is the official language of Korea, which incorporates a large
number of words borrowed from Chinese. In addition to their native language,
most Korean students today have been taught English since elementary school,
becoming the second most popular language in the country (87%). 
b. Status of migration, immigration
According to statistics, the number of migrants in the country in 2021
was 7,213,422, down 6.7% compared to 2020. The main reason is due to the
aging population structure. The population of 20-30 years old is the most
inclined to move, but it tends to decrease. In contrast, the population over the
age of 60 is less likely to increase.

According to statistics, the foreign population in South Korea in 2020

was 5,530,350, down 84.5% from the previous year. The largest proportion of
the population is China and Vietnam.
10
 c. Culture
Korea is greatly influenced by two cultures, China, Japan, and
Confucianism, which have established many of the traditions that can be seen in
Korea today. Koreans also believe in sincerity and loyalty and follow certain
codes of conduct while meeting, eating, praying, and even celebrating. While
many other cultures shake hands when meeting, Koreans bow. That acts as a
sign of gratitude, respect for the person they meet.
Korea is greatly influenced by two cultures, China, Japan and
Confucianism, which have established many of the traditions that can be seen in
Korea today. Koreans also believe in sincerity and loyalty and follow certain
codes of conduct while meeting, eating, praying, and even celebrating. While
many other cultures shake hands when meeting, Koreans bow. That acts as a
sign of gratitude, respect for the person they meet.
d. Education
South Korea is the country with the highest level of education in the
world. According to the Organisation for Economic Co-operation and
Development (OECD), 70% of 24- to 35-year-olds have completed some form
of higher education. Korea also has a top-quality school system. At the
university level, the country is ranked 22nd out of 50 countries in the 2018
National Higher Education Systems Rankings by Universitas' network of 21
research universities.
3.2. Demographics
a. Population
South Korea's population of 51,344,266 as of March 2022 is estimated
to account for 0.66% of the world's population, based on Worldometer
elaboration data of the latest United Nations.
b. Structure by age group
The average age in South Korea is 43.7 as of 2020, increasing gradually
over the years. South Korea has about 71.67% of the population between the
ages of 15 and 64, while the over-64s account for about 15.8. The younger
generation accounts for a smaller percentage of the elderly, partly due to the
declining birth rate year by year. South Korea's current birth rate is 6,902 births
per 1,000 people, down 1.9 percent from 2021.

11
3.3. HOFSTEDE model

a . Power distance
Based on figures with South Korea's power gap at an average of 60,
South Korea is a country that takes rank a bit seriously. In an organization,
there is often a certain inequality that leads to no uniformity in the division of
work.
b . Individualism and collectivism
With a very low figure of 18 in terms of individualism, it can be seen
that Korea is a collective society. This is reflected in attachment to collective
groups such as family, extended family, or other relationships. This is closely
related to confucian culture that is deeply ingrained with the concept of The
Three Gangs-Five Ordinaries, in addition to being expressed in the strict habits
and codes of conduct in society along with the emphasis on harmonious living,
avoiding the face of the collective.
c. Masculinity
With a low score, Korea (39) is classified as a feminine society, which
means that the quality of working life and solidarity are highly
valued. Conflicts are usually resolved by compromise and negotiation. Despite
the fact that Korea is a fiercely competitive society, they compete to live in

12
 harmony with their families, not worry about money or falling
behind. Therefore, it is classified as a female society.
d. Uncertainty avoidance
In terms of avoiding uncertainty, South Korea scored 85 points. This is
one of the highest levels in the world. In a society that is less sensitive to risk,
rules and standards need to be followed. The ability to adapt to unexpected
changes is very low. The fear of change comes with relying entirely on
superiors or preset rules. 
e. Long-term orientation
With maximum scores, Korea is rated as one of the most pragmatic and
long-term-oriented societies. People in this society believe that everything that
happens depends largely on circumstances and time. They show the ability to
easily adapt to real-life situations to invest and achieve long-term results.
f. Level of self-satisfaction
At a low point, South Korea (29) belongs to the social group with high
self-restraint. People in highly self-contained societies often don't pay much
attention to leisure time and satisfy their desires, they realize that their actions
are limited by social norms and feel it's not right to satisfy their own needs.
3.4. Challenge and opportunity
a. Opportunity
              Korea and Vietnam are both influenced by Confucianism. The
codes of conduct or beliefs have been established and rooted in the culture of
the two countries. Therefore, there will not be much disagreement or conflict in
cooperation or management activities when both countries are collective
societies.
              High levels of education, i.e. the possibility of unemployment
decreases or job opportunities for workers increase. Along with that,
productivity also increases. Poverty is declining. Moreover, the decrease in
domestic migration with the subject mainly 20-30 years old helps to ensure the
level of labor.
              There are many similarities in the culture of the two countries
such as the power gap, femininity or collectivism also bring many advantages
for businesses to invest in the market.
b. Challenge
              Language differences are the most noticeable barrier. Vietnam's
writing system belongs to the Latin script, but Korea uses the country's own
writing system. This will affect the communication, management, and stage of
bringing the product to market. Especially for a country that promotes

13
 nationalism like South Korea, it is necessary to consider the use of Korean in
enterprises as well as on products.
              The population structure tends to age and the declining birth rate
affects the structure of the workforce, followed by a decline in labor
productivity and economic growth.
              Major cultural differences such as risk aversion and long-term
orientation also affect the operation of the business. Management strategies and
ways of management also need to be adjusted accordingly, facilitating
investment activities.
4. TECHNOLOGICAL
4.1. Characteristics
South Korea is renowned as a global leader in information and
communication technology (ICT), it is home to the world's leading electronics and
information technology companies such as Samsung, LG, SK, and KT.
South Korea has the fastest Internet speed in the world and leads the world
in internet usage with more than 96% of people using the internet. Nearly 99% of
South Koreans go online at least once a week, spending an average of 14.3 hours a
week on the Internet. More than five million South Koreans aged 60 and over are
browsing the web. South Korea ranks sixth in the world in terms of smartphone
usage, with a penetration rate of 77.7%. Official South Korean sources estimate the
number of smartphone subscribers at 47.4 million. The search engine market is
dominated by local companies, with Naver accounting for 74% of the market share,
Daum accounting for 16%. Google has a 10% market share. In South Korea, 10.4%
of jobs are at high risk of automation

Individuals using the Internet (% of the population) in South Korea from 2010-2020 (sources:
data.worldbank.org)
According to the report "Market analysis and social networking situation
2021" published by DMC media company (Korea) on June 16, South Korea's
social networking rate in January 2021 reached 89.3%, 1.7 times higher than the
world average (53.6%).

14
 The South Korean government has enacted many laws to protect
intellectual property rights, promote cooperation between universities and
industries, support the development of new technologies, create an appropriate
ecosystem, and participate in private companies. South Korea has always been one
of the countries with a lot of patents in the world. It can be said that intellectual
property and intellectual property owners as "national treasures". The introduction
of the Korean Patent Court is also aimed at carrying out the mission of protecting
that treasure. Currently, in the world, South Korea is one of the few countries with
its own court on intellectual property. 

The 10 countries that file the most patents.( Source: WIPO)

South Korea spends tens of millions of dollars annually on R&D, and by

2020 R&D spending percent of GDP is the world's top 4.1 percent.
The consumer habits and consumer trends of Koreans are now tied to
online shopping on e-commerce sites. E-commerce recorded current value growth
of 27% in 2020 reaching US$104.7 billion
Many manufacturing processes have been digitized and robotized here, and
a large number of South Korean companies, both large and small, have stepped up
their use of robots. RPA (robotic automation) technology, first adopted in 2018, is
now able to complete more advanced tasks such as analysis and comparison, based
on AI technology and big data that will replace about 12,000 hours of human labor
per month.
In addition to digitizing regulations in production and business, Korea also
especially promotes the digitization of administrative procedures, provides more
effective services, reduces the number of administrative processes and the number
of necessary papers for the people.
In addition to spectacular breakthroughs in information technology,
electronics, and telecommunications, South Korea's food technology industry has
also been booming in recent years. Researchers in South Korea are constantly
making inventions about new technologies to improve the quality of packaging and
products.
15
 4.2. Challenge and opportunity
 a. opportunity
              With the density of phone coverage, the internet is so large that
th's product advertising communication will be easier to reach consumers.
              The high level of investment in research and development in the
field of technology development will have many opportunities to build a self-
sustaining ecosystem that promotes innovation, then TH will also have the
motivation to motivate itself to innovate.
              The processing and distribution industries have many
replacements of advanced machinery technology that will help reduce labor and
ground costs as well as save time creating products and reaching consumers.
              When entering the food industry, there is always innovation in
technology to improve the quality of TH products, there will also be the
opportunity to learn and transfer the latest technologies.
a.  Challenge
              The Internet, social networks widely covered just TH has small
errors will quickly make consumers know these errors, the risk of the product
will be quickly boycotted and forgotten.
             When the technology is constantly changing but TH does not
adapt in time, it will make its products obsolete, behind and inferior to other
products. 

5. LEGAL
5.1. Characteristics
a. Competition law
The law on competition in Korea is clearly defined in the Exclusive
Regulation and the Fair Trade Act ("MRFTA") which stipulates four main types of
prohibitions:
              Unfair cooperative behaviors (Cartels and anti-competitive
agreements).
              Abuse of dominance.
              Unfair commercial practices.
              Mergers and acquisitions significantly reduce competition in
South Korea.
The aim of the MRFTA is to promote equal and free competition,
encourage innovative breakthrough activities, protect consumers and strive for the
balanced development of the national economy.
b. Tax law
Income tax on foreign companies: Foreign companies established
permanently in South Korea or foreign companies that generate income earned in
Korea without a permanent set in the country are responsible for paying taxes in
the range of 2% to 20%.
Import duties: South Korea also maintains a system of tariff quotas
designed to stabilize the domestic commodity market. Customs duties can be
16
 adjusted every six months, within the limits of the basic tax rate, plus or minus 40
percent. In 2018, the average tax on milk in the country was 33.4%.
Value-Added Tax (VAT): South Korea imposes a 10% fixed tariff on all
imported goods and domestically produced goods.
Excise tax: 10-20% is also levied on the import of some luxury items and
durable consumer goods.
5.2. CLaws relating to food imports
The laws relating to food import procedures of The Republic of Korea's
food import procedures are based on the following laws:
             Food Hygiene Act
             Plant Quarantine Act
             Cattle Disease Prevention Act
             The Foreign Trade Act.
             Laws relating to food labeling
             Other laws related to imports
Customs operations in Korea are really ineffective Imports in Korea have to go
through a lengthy procedure for customs clearance.

5.3. Trademark protection law

The main laws relating to trademarks in Korea are:
              Trademark Act (TMA)
              The Unfair Competition Prevention and Protection of Trade
Secrets Act (UCPA).
              The Patent Act also applies to TMA.
              General provisions of the Law on Pictures
              Civil Procedure Act
              Customs Tax Act
              The Fair Trade Act or the Inland Industry Investigation of Unfair
Commercial Practices and Measures against Injury.
              Fair Trade Commission (FTC) guidelines
In addition, international conventions of which South Korea is a member have the
same legal effect as domestic law.
5.4. Challenge and opportunity
a. Opportunity
              The law in Korea is transparent, frequently changed accordingly,
clearly defined in the laws, articles, and clauses to help TH know what to do
and need to avoid.
              The trademark protection is also strictly done TH will not have to
worry about being stolen or counterfeiting the trademark.
b. Challenge
17
  Since this is a complete entry into another country's market, it is
completely foreign, if not studied carefully, it will be very easy to be flawed and will
be punished according to the regulations. Therefore, the company needs to thoroughly
study the procedures so as not to miss any regulations.
              Administrative procedures still have too many troublesome steps
that take time for businesses
              Korea's food import laws are quite strict and require TH to always
be careful in each of its products.
6. ECOLOGICAL
6.1. Characteristics
In South Korea, high mountains cover 80% of the land, making it unusable
for farming and agriculture. Natural resources in the form of plants and ecology are
much lacking in the country. After 30 years of focusing on economic development
and achieving miraculous development, South Korea's environment deteriorated
severely in the late 1980s and 1990s with many problems of air pollution, water
pollution, waste, and acid rain. Although the situation has improved a lot in recent
years, the environment of South Korea still has many problems.
a. Air pollution

Severe air pollution in Seoul. (Source: THE STRAITS TIMES)

  The process of industrialization, massive urbanization has caused the
amount of smoke, dust, emissions in the air to rise rapidly. Heavy and processed
industries consume 30 percent of South Korea's energy, compared with 20 percent
for Japan and 14 percent for the United States. Air pollution in South Korean cities
is almost the worst of the OECD countries, emissions per capita are up 77% and
South Korea ranks 8th in the world in terms of CO2 emissions volume by 2020.

18
  South Korea is heavily affected by climate change. The temperatures of
South Korea's six major cities have risen to 1.5 degrees Celsius over the past 100
years, while the world average is 0.74 degrees Celsius. Within 40 years sea level in
Jeju Island has risen by 22 centimeters while the world average is 1.8mm. The
damage caused by the floods has increased by 3.2% to an estimated 17.7 trillion
won ($18 billion) over the past 10 years. That's why South Korea recently launched
a green growth strategy, which means economic growth is associated with reducing
carbon emissions.
b. Water pollution

 Water quality is a big problem in Korea. Although the rainfall in South

Korea is 1.3 times more than the world average, the rain is usually concentrated in
the summer. Rapid industrialization and urbanization have increased the amount of
industrial wastewater as well as domestic wastewater. Many rivers, polluted seas,
groundwater sources in many places are also contaminated with heavy metals.
In addition to the excessive use of chemical fertilizers, pesticides are also
the cause of water pollution. According to OECD research, land grown in South

19
Korea has the second-highest nitrogen content among OECD countries. Domestic
waste, industrial wastewater, and waste from agricultural production have polluted
much of South Korea's waters.
c. Solid waste

Finding a place to dump solid waste including construction waste and

everyday household waste remains a dilemma in South Korea. The narrow, densely
populated territory has made South Korea ranked among the countries with the
highest levels of waste in the world.
In addition to ordinary waste, South Korea also always has a headache
about the nuclear waste landfill. In the face of the problem of waste that greatly
affects life and economic development, South Korea has made strong decisions to
address, the goal is to promote enterprises to make environmentally friendly
products of Korea that have turned garbage into resources by promulgating the
Law on Promoting Recycling and Resource Saving (Recycling Law) in
2008; establishing K-Eco (Korea Environment of Cooperation) with the goal of
promoting resource circulation; established KORA: recycling mission execution
center. South Korea is one of the leading countries applying modern, closed-loop
landfill technology. South Korea's SODOKWON landfill carries out safe and
hygienic burying of household waste, thanks to the application of modern
techniques and equipment, not only protecting the environment but also bringing
economic benefits by recovering CH4 gas for power generation. At the same time,
the development project "turns" this landfill into the most extensive "Dream park"
environmental theme park. This is a continuous work of self-contained waste
treatment, bringing economic benefits and creating a play space, ecological culture
with a clean environment serving the community.

20
 "Mountain of garbage" in North Gyeongsang Province, which was cleared in December 2020
(Source: Koreatimes)
6.2. Challenge and opportunity
a. Opportunity
 Korean people are gradually prioritizing the use of organic products is a
great opportunity for TH because TH is also developing many organic products of
good quality these products will have a high chance of being well received by
consumers.
b. Challenge
 South Korea has a strict waste disposal process that requires TH to spend
a large amount of money to solve its waste.
7. COMPETITIVE ENVIRONMENT
7.1. The level of concentrated market
In order to capture market factors, to produce the number of distributions
and the size of sellers in a particular market, it is essential for each business to
study the market concentrate.

Market share of leading companies producing milk and milk products in  South Korea in 2020
(Source: statista.com)

Follow the diagram and apply the centralized rate (CR) formula to the 5
largest enterprises in the industry: CR5= 29,1% + 17,6% + 10,2% + 9,8% + 8,8%
=75,5% (CR5> 66,7%)
21
 Follow the diagram and apply the HHI formula to the South Korean market
share: HHI(5)= 29,12  + 17,62 + 10,22 + 9,82 + 8,82 = 1434,09 (1.000<HHI(5)
<1.800)
=> With the above results, we have the conclusion: The Korean milk
market is a highly concentrated market, barriers to entry into the industry are high,
this market is lowly competitive.
7.2 Five forces model

* The competition of competitors.

South Korea's milk market is a high barrier to entry, concentrated with
the top 5 companies (Seoul Milk, Maeil Dairies, Binggrae, Namyang Dairy
Products, Dr.Chung's Food) accounting for 75.5% market share in the majority
of product segments.
 BINGGRAE- The milk brand is loved.
BINGGRAE is a well-known brand in Korea, founded in
1967. Specializing in the manufacture and distribution of dairy processing
products, the Company's products include chilled food and frozen food. By
2021, the company has achieved a turnover of KRW 1,147,435 million. The
sales growth rate in 2021 is 19.63%.

BINGGRAE’s products
 Seoul Milk
Founded in 1937, Seoul Milk is a leading dairy brand, one of the largest
suppliers of dairy products in Korea. The company has an annual turnover of
$725 million. The company's products are diverse with many different types
and flavors through which it can be seen that Seoul Milk is a "formidable"

22
 competitor not only for domestic enterprises but also for foreign enterprises
such as TH True Milk, Vinamilk ... When entering the market of this country.

Seoul Milk’s products

In addition, competitors are not only domestic dairy brands but also
milk brands that have gone ahead of export such as Vinamilk milk Group...
 Vinamilk
Vinamilk is the leading dairy producer in Vietnam that currently
supplies more than 200 dairy products and dairy products. In 2021, despite
being affected by the Covid 19 pandemic, Vinamilk's total consolidated revenue
surpassed 60,000 billion VND for the first time, an increase of 2.2% over the
same period in 2020. This record revenue is contributed by growth from all
three segments: domestic, export, and foreign branches.

In 2020, Vinamilk successfully signed an export contract worth 1.2

million USD including 85 containers of soy milk and milk tea products to
Korea. Vinamilk's success is the springboard that motivates TH True Milk to
enter this market. At the same time, Vinamilk is a competitor of TH True Milk
in both domestic and international markets.
*Barriers to entry
The Korean market is a potential market, attracting many brands,
creating many competitors for companies to join, with many different industry
sectors, including the dairy market creating competition to enter this market.
To enter this industry, businesses will face relatively large barriers and
to succeed is not an easy thing when the industry is now relatively saturated.
23
 These barriers include:
 Cost of entering the industry:
Investing in the dairy industry requires a lot of costs for seedlings,
cooling systems, barns, automatic milking and processing systems... Depending
on the number, the type that the business chooses will have different cost
levels. If it is water milk and yogurt products, this cost is quite high, because
businesses will have to invest relatively large to research, develop products,
advertise and build an image for the business.
              Distribution channel:
TH True Milk brand has now built a wide and dense distribution
channel system across the country. All supermarkets, dealers, and grocery
stores are fully utilized, so if you want to enter this industry, businesses need to
have a complete strategy to be able to convince these channels to put your
products into the system.
              Make a difference to the product:
The dairy industry now has a lot of brands that are competing with each
other both at home and abroad. Therefore, in order to survive in the market, the
products and brands of the business must create a superiority compared to other
product brands. It's not easy, especially for businesses that come later.
              Advantages in size and absolute cost advantages: The absolute
advantage costs have many differences such as:
+ Production capability: Thanks to the accumulation of past
experiences and long-term development activities, enterprises in the industry
have outstanding production ability and the ability to adapt to higher risks.
+ Capital requirements: A milk production line has an average value of
several tens of billions, which is a small investment not to take into account the
cost of building a factory, labor costs, the cost of input materials at home and
abroad ...
Input materials: Most older companies have access to input materials,
machinery, equipment at a cheaper price that reduces production costs that
contribute to making products cheaper.
+ Human resources: Currently, human resources for the processing of
dairy products are quite abundant from farms, universities specializing in food
processing ... However, the quality of resources is not high and it is also a
barrier for dairy companies.
              Legal barriers: Legal barriers created by the provisions of laws
and state policies including regulations on import duties and import
quotas; technical regulations; conditions and procedures for production and
trading of goods and services; regulations on the use of goods and services; 
professional standards and other administrative decisions of state management

24
 agencies. This causes certain obstacles and difficulties for businesses wishing to
enter this market in general and TH True Milk in particular.
The threat of retaliation: The effectiveness of barriers may partly depend on predicting
which new businesses are likely to be retaliated against by active businesses.
* Threat from alternative goods
The pressure on new products in this industry is not much, due to the
peculiarities of milk as an essential nutrient supplement. However, there will be
competition between products in the industry in terms of market share such as
soy milk, chickpea milk, cocoa, cereal flour ... => Can reduce the market share
of dairy products.
Although TH True Milk clearly defines the participating market
segment as pasteurized fresh milk products. However, there are many similar
types of products on the market today. Even other companies will launch
newer, superior products to compete and replace TH True Milk products.
Domestic competition: In Vietnam, TH True Milk has been competing
with many famous brands such as Vinamilk, Vinasoy, Dutch Lady, Nutifood,
Nestle,...
Competition in the Korean market:
Currently, in the Korean market, there has been the appearance of the
leading dairy company in Vietnam, Vinamilk. That launch marked a very
successful first step for Vietnam's dairy industry when entering this fastidious
and challenging market. Thanks to this, this is also a springboard for TH True
Milk to move forward and rise far from its land to conquer potential
markets. Thanks to the advantage of clean, quality milk and bringing the
characteristic local flavor, TH True Milk can completely make its own mark
and has the potential to stand on South Korean shelves.
Besides, TH True Milk when entering the Korean market also faces
large enterprises with many years of experience such as Seoul Milk, Binggrae,
Maeil Dairies ...
* Bargaining rights of suppliers
For the dairy market in Vietnam, the input raw materials are still mainly
dependent on imported raw materials from countries with 70% leading cow
farming. Meanwhile, the source of raw materials in the country is mainly
supplied from small operating households and the majority have also been spent
by old dairy businesses. Thus, in the early stages of operation without its raw
material area, TH True Milk will have a lot of difficulties to negotiate with
domestic and foreign fresh milk suppliers. If the negotiating capacity is not
good, the unstable raw milk source will seriously affect the production situation
of the company.
However, TH True Milk now has ready sources of raw materials at
dairy farms, their raw material areas as well as dairy farming households

25
 throughout the Central and Southeastern provinces. As a result, the amount of
milk supplied to their market is always stable, meeting the needs of customers
well. Therefore, the possibility of being "overwhelmed", forcing prices by
suppliers is not high. Therefore, the power of the supplier is quite low.
* The client's right to negotiate.
The core factor when entering the milk market of TH True Milk is to
sell its products to consumers. Consumers here can be individual customers,
distributors, agents ... Consumers have a lot of power because products in this
industry are incredibly diverse along with low conversion costs and constant
performance.
Individual customers are interested in quality, price, and
brand. Meanwhile, distributors and agents are interested in consumer tastes,
quality. This puts pressure on TH True Milk to ensure quality and reasonable
prices. 
8. SWOT
8.1. Strengths
              TH True Milk has stable capital from North Asia Commercial
Joint Stock Bank
              Revenues and profits are constantly increasing over the years.
              Large investment, leading modern equipment in Vietnam: the
largest and most advanced factory and farm in Southeast Asia
              Synchronous production process from mass farming to
widespread distribution.
              TH True Milk has a set of principles and visions in business such
as:
Protecting public health through clean milk
+ All-natural sources of raw materials
+ Friendly to the domestic economy
Sharing the public interest: TH True Milk has been involved in many
meaningful projects that contribute to the interests of the community as well as
be a sponsor of social projects
             Clear and specific strategic objectives: To become a market leader
in clean products of natural origin.
              The staff, the board of directors of the company is experienced,
enthusiastic and professional
              The workshops and farms of cows are conveniently and
appropriately located.
              With the extremely impressive slogan "the essence of nature is
kept intact in every drop of clean milk" along with the process of breeding,
caring for each special cow has made a difference, more prominent than the
competitors in the industry. The process is closed modernly, ensuring the

26
 quality of each product when reaching customers, so that attracts and builds
consumer trust in the company.
8.2. Weakness
              Forbig competitors like Vinamilk, there are still many customers
who do not know TH true milk brand.
              The company's factory is small with a small capacity, the product
is not diversified and rich.
              The distribution system has not yet created high coverage.
              Since most of these raw materials are imported, it creates a
dependence on input materials and high costs.
              The cost is high, so the price of TH's products currently on the
market in terms of general premises is considered to be higher than other
brands.
              Mainly doing business and heavily dependent on the domestic
market, the foreign market has not really had a foothold.
              There are still cases of lack of close inspection and supervision of
employees.
              The structure of the capital depends a lot on the loan.

 The cost of operating the milk farming system is high.

8.3. Opportunity
              The government has developed favorable conditions for the
export of goods.
              Opportunities for global development, access to large markets
such as China, Russia, South Korea ...
              According to OEC.World, in 2019, South Korea imported $92.4
million worth of milk, making it the 20th largest importer of milk in the world.
Therefore, this is a very potential market for the dairy industry, Vietnamese
dairy enterprises in general, and TH True Milk in particular.
 The domestic market is also very potent.
8.4. Challenge
              Competitorsare more and more powerful.
              In order to develop the brand in a sustainable way, businesses
such as TH True Milk need to aim to provide more pasteurized fresh milk
products with a longer storage time. This is the most competitive segment in the
market today. Enterprises are currently "racing" to build advanced and modern
production lines, meeting many domestic and international
standards. Therefore, businesses have to spend high investment costs, while
market share has fierce competition.
 The psychology of the majority of consumers is still unclear when
distinguishing the types of milk such as: whole milk, pasteurized milk, pasteurized
27
milk ... Should require businesses to have appropriate, sensitive forms of
communication. This means that large enterprises with capital conditions will have
more advantages

28
III. SUMMARY
Evaluate the level of each internal factor that affects TH True milk’s decisions
when investing in the South Korean market:
The Political Environment: Medium
The Economic Environment: Medium
The Culture and Social Environment: Medium => High
The Technology Environment: High
The Ecological Environment: Medium
The Legal Environment: High
The Competitive Environment: High
CONCLUSION
Foreign market entry always brings opportunities and challenges for
investment corporations. For TH True MILK, the world market brings more
opportunities on all sides. With available strengths, TH can completely
overcome the challenges set by the world market, make full use of
opportunities, increase the ability to promote domestic activities, and overcome
limitations that remain in other countries. Besides, if TH knows how to turn
challenges into a development motivation, the South Korea market can bring
super profits to TH in the future. Therefore, TH should invest in the South
Korea market. We also know that politics has a huge influence on the economy.
If the political relationship between the two countries is not good, the economic
trade between the two countries has become difficult. Therefore, Vietnam
should promote good bilateral relations between the two countries avoid
causing hinging.

REFERENCES
1. Đại sứ Hàn Quốc: Quan hệ Việt Nam –Hàn Quốc lên một tầm cao mới 상세
보기|Các hoạt động của Đại sứ quánĐẠI SỨ QUÁN ĐẠI HÀN DÂN QUỐC
TẠI VIỆT NAM https://overseas.mofa.go.kr/vnvi/brd/m_2169/view.do?
29
seq=759947&srchFr=&srchTo=&srchWord=&srchTp=&multi_itm_seq=0&itm
_seq_1=0&itm_seq_2=0&company_cd=&company_nm=&page=1
2 .Data Catalog
https://datacatalog.worldbank.org/search?fq=geographical_extent%2Fcoverage
%2Fany(geo:geo%2Fname%20eq%20%27Korea,%20Republic%20of
%27)&q=&start=21
3. Sector Trend Analysis – E-commerce market trends in South Korea -
agriculture.canada.ca
https://agriculture.canada.ca/en/international-trade/market-intelligence/reports/
sector-trend-analysis-e-commerce-market-trends-south-korea
4. 2021 Corruption Perceptions Index - Explore the results
https://www.transparency.org/en/cpi/2021
5. South Korea Country Profile
https://www.foodexport.org/export-insights/market-and-country-profiles/south-
korea-country-profile
6. Từ băng rộng đến kinh tế số đưa Hàn Quốc trở thành cường quốc công nghệ
thông tin
https://ictnews.vietnamnet.vn/cuoc-song-so/cuong-quoc-cong-nghe-thong-tin-
han-quoc-400758.html
7. Unctad.org
https://unctad.org/system/files/official-document/der2021_en.pdf
8. 005180.KR | Binggrae Co. Ltd. Annual Income Statement - WSJ
https://www.wsj.com/market-data/quotes/KR/XKRX/005180/financials/
annual/income-statement?
fbclid=IwAR0mKjivxJJRlX9fR9x5V_sEsie1Hi__FZ5Te55YPrzjE64nmrXWIv
NnObI
9.
Milk in South Korea | OEC
https://oec.world/en/profile/bilateral-product/milk/reporter/kor?
fbclid=IwAR1tpBxDt0Sl-
Ql6tJ2UFOwWzFzghG8jGzX1shlTL2EcU0RSPe5Ii3PEO-o
10. Binggrae Co. Ltd. Financials | 005180 | Barron's
https://www.barrons.com/market-data/stocks/005180/financials?
countrycode=kr&mod=quotes&fbclid=IwAR3JDrgaPGLbAMwXq4CM-
SBuWTKgeo1YrDA1JVnzYIvnzXdOC_T1M20b8ew

30
31
 MEMBERS OF GROUP 4

STT Full Name Student code Work part Percentae Percenta

contribution ge
complet
ed
1 Lê Thị Thảo(L) 23A4050326 Political, 20 100
technological,
summary,
edit word
2 Nguyễn Tuấn Anh 23A4050033 Economic, 18 100
social
3 Nguyễn Thị Hường 23A4050191 Competitive 20 100
environment,
swot
4 Hoàng Ngọc 23A4050358 Instructor 12 100
Thương
5 Ngô Thị Ngọc Thư 23A4050352 Legal, 15 100
Ecological
6 Dương Thị Phương 23A4050298 Synthesise 15 100
and edit
word, slide

32