5.

Location strategy
5.1 Factors that determine location:
5.1.1 Saigon Dairy Factory:

Figure 52 - Saigon Dairy Factory1

Consumer market: Saigon is one of the largest and most developed cities in Vietnam. The
location of the dairy factory here can help Vinamilk access a large and diversified
consumer market. Creating products close to where the consumer is located can reduce
shipping costs and delivery times.

Infrastructure: Saigon has good infrastructure, including transportation and electricity.

This can support Vinamilk's production and distribution process.

- Human resources: Saigon has a large and diverse workforce, with many workers with
suitable expertise and skills for the dairy industry.

- Expansion potential: The location of a factory in Saigon can support Vinamilk's market
expansion and meet the growing demand for dairy products and dairy foods in the
southern region.
- Strategy and vision: This decision must also be in line with Vinamilk's long-term
strategy and vision for product development and distribution.

5.1.2 Da Nang Dairy Factory:

Figure 53 - Da Nang Dairy Factory2

-Consumer market: Da Nang has a sizable and growing consumer market, including both
local residents and tourists. The decision to locate the factory in Da Nang can help
Vinamilk access the central and south-central markets.

- Infrastructure: Da Nang has good infrastructure, with seaports and regional railways.
This can support Vinamilk's production and distribution process.

- Human resources: Da Nang has a diverse workforce and can provide workers with
appropriate expertise and skills for the dairy industry.

- Expansion potential: The location of a factory in Da Nang can support Vinamilk's

market expansion and meet the growing demand for dairy products and dairy foods in the
Central region.

- Strategy and vision: This decision must also be in line with Vinamilk's long-term
strategy and vision for product development and distribution.
- Costs and taxes: Financial factors should be considered, including land rental costs,
taxes and initial investments to build a factory in Da Nang.

5.1.3 Tien Son Dairy Factory:

Figure 54 - Tien Son Dairy Factory3

- Consumer market: Tien Son is strategically located near important consumer markets
such as Hai Phong and Hanoi. The location of the factory in Tien Son can help Vinamilk
access the northern market quickly and effectively.

- Infrastructure: Tien Son has developing infrastructure and convenient transport links,
including Hai Phong seaport. This can support Vinamilk's production and distribution
process.

- Human resources: Tien Son has a diverse workforce and can provide workers with
appropriate expertise and skills for the dairy industry.

- Expansion potential: The location of a factory in Tien Son can support Vinamilk's
market expansion and meet the growing demand for dairy products and dairy foods in the
Northern region.

- Strategy and vision: This decision must also be in line with Vinamilk's long-term
strategy and vision for product development and distribution.

- Costs and taxes: Financial factors should be considered, including land rental costs,
taxes and initial investments to build a factory in Tien Son.
5.2 Location selection decisions:
5.2.1 Locations of dairy factories in 3 Northern, Central and South regions

-Location of the North:

Weighted average X = Sum of weighted x / Sum of shipping load

= 63850/4000

= 15.963

Weighted average Y = Sum of weighted Y / Sum of shipping load

= 91300/4000

= 22.825
 Choose Tien Son ( 10; 20 ) because there are numbers close to the result x,y
such as 15,963 ; 22,825 respectively. Son La (15; 25) and Dien Bien (18; 22)
have results closer to x,y but due to the complicated terrain, mainly steep,
rugged mountains and strong divisions, this location is not convenient for
placing factories.
-Location of the Central

Weighted average X = Sum of weighted x / Sum of shipping load

= 102250/6000

= 17,042

Weighted average Y = Sum of weighted Y / Sum of shipping load

= 132400/6000

= 22.067
 Choose Da Nang ( 15; 20 ) because there are numbers close to the results x, y
respectively such as 17,042 ; 22,067.
 -Location of the Southern

Weighted average X = Sum of weighted x / Sum of shipping load

= 49430/5100

= 9,692

Weighted average Y = Sum of weighted Y / Sum of shipping load

= 54510/5100

= 10,688
 Select Ho Chi Minh ( 10; 10 ) because there are numbers close to the results x,
y respectively such as 9.692 , 10.688


5.2.2 Central warehouse problem:

Coordinate Score of X = Total of X Weighted / Total Shipping Load

=21000/2300

= 9.13

Coordinate Point of Y = Total of Weighted Y / Total Shipping Load

= 26000 / 2300

= 11,304

 Choose Ho Chi Minh City (10 ; 10) to place a central warehouse because of the
approximate results with (9.12 , 11.304)