Group 8 Coursework Assignment

FOREIGN TRADE UNIVERSITY HCMC CAMPUS
---------o0o---------
GROUP 8
ANALYSIS OF VINAMILK’S ECONOMIC MANAGEMENT IN THE

DAIRY MARKET
Midterm assignment – Principles of economic management
Academic year: 2023-2024
Course code: DTUE301 - ML 191

Lecturer: MBA. Pham Thanh Dung
Student 1: Le Tran Khanh Ngoc – 2112153110
Student 2: Nguyen Vo Chi Nguyen – 2112153112
Student 3: Nguyen Ngoc Dong Nghi – 2112153105
Student 4: Bui Phuong Nga – 2112153101
Student 5: Nguyen Phuong Ngan – 2112153104
Student 6: Ha Anh Kiet – 2112153071
HO CHI MINH CITY, DECEMBER 10, 2023

EXECUTIVE SUMMARY
The report aims to analyze how Vinamilk effectively manages internal and
external activities, shedding light on strategies to enhance operational efficiency, foster
employee engagement, and navigate external market dynamics for sustained growth and
success.
To that end, the authors provide a detailed investigation into Vinamilk's strategic
management of its internal and external operations. It explores the company's approach
to maintaining operational efficiency, enhancing employee engagement, and navigating
the complexities of the market. The analysis also covers the company's internal
environment, including its organizational structure, culture, and application of various
management theories. Furthermore, the report delves into the company's strategic
planning, organizational methods, leadership styles, and control mechanisms, providing
insights into its sustained market leadership and growth. The scope of this report is
meticulously designed to offer a holistic understanding of Vinamilk's business practices
and strategies, thereby shedding light on its success in the competitive dairy industry.
Vinamilk has effectively managed its internal and external operations in the highly
competitive dairy industry. Key results include the company's strategic management of
its organizational structure and culture, application of management theories, and control
mechanisms which have contributed to its market leadership and growth. Additionally,
Vinamilk's innovative approaches in product development, market segmentation, and
global expansion have been instrumental. Its successful navigation of external market
dynamics and commitment to continuous improvement and innovation are central to its
sustained success in the dairy market.
This report underscores Vinamilk's success in a favorable macro environment,

showcasing competitive advantages. Despite challenges, the organizational structure and
POLC management have been instrumental with a distinctive approach that positions it
as a robust company with the potential for ongoing innovation and growth. To ensure
sustained success, recommendations include constant innovation to immerse into intense
competition, proactive adaptation to market trends, addressing structural problems
through collaboration and agile decision-making, and managing diminishing growth by
diversifying sources and exploring new markets.
ACKNOWLEDGEMENT
For the completion of this report, the authors wish to express sincere gratitude
and appreciation to all of those who gave us the possibility to complete this report.
Specially, the author would also like to show deepest appreciation to the lecturers MBA.
Pham Thanh Dung for her dedicated instruction throughout the process of writing this
report.
Despite the author’s effort, due to limited time and restricted experience, this
report could not avoid errors and mistakes. Hence, the author is grateful for all precious
feedback dedicated to the improvement of this report.
Ho Chi Minh, December 2023

TABLE OF CONTENTS
EXECUTIVE SUMMARY....................................................................... 1
LIST OF FIGURES ................................................................................... i
CHAPTER 1. COMPANY OVERVIEW ............................................... 1
1.1. Introduction to Vinamilk .................................................................. 1
1.2. Product Portfolio and Statistics ........................................................ 1
CHAPTER 2. EXTERNAL ENVIRONMENT ANALYSIS ................. 3
2.1. Macro-environment analysis ............................................................ 3
2.2. Micro-environment analysis ............................................................ 4
CHAPTER 3. INTERNAL ENVIRONMENT ANALYSIS .................. 6
3.1. The overall organization structure of Vinamilk and assumption-

making foundation ............................................................................................. 6
3.2. Organizational culture of Vinamilk ................................................. 7
3.3. Vinamilk’s application of management theories ............................. 9
CHAPTER 4. VINAMILK’S PRODUCT MANAGEMENT

ANALYSIS.......................................................................................................... 14
4.1. Planning function ........................................................................... 14
4.1.1. Quantitative target ................................................................... 15
4.1.2. Qualitative targets ................................................................... 15
4.2. Organizing function ....................................................................... 17
4.3. Leading function ............................................................................ 19
4.4. Controlling function ....................................................................... 21
CHAPTER 5. CONCLUSION ............................................................... 26
CHAPTER 6. RECOMMENDATION ................................................. 28
6.1. Recommendation on the external environment ............................. 28
Intense competition from foreign and domestic brands .................... 28

Adapting to new trends in the market ............................................... 28
6.2. Recommendation on potential structural problems ....................... 28
6.3. Recommendation on managing declining growth ......................... 29
REFERENCE ............................................................................................ a
i
LIST OF FIGURES
Figure 1.1. The product portfolio of Vinamilk ........................................... 2
Figure 3.1. Vinamilk’s compliance control system .................................. 10
Figure 3.2. Vinamilk’s commitment to “enthusiastically strive for
perfection for a growing Vietnam.” ..................................................................... 11
Figure 3.3. The quality control process of Vinamilk ................................ 12
Figure 3.4. Vinamilk’s rebranding campaign ........................................... 12
Figure 4.1. Development strategy of Vinamilk from 2017 to 2021 ......... 14
Figure 4.2. Quantitative Targets of Vinamilk in 2021 .............................. 15
Figure 4.3. Diverse offerings of the fresh milk product line .................... 16
Figure 4.4. Vinamilk’s actual performance towards development during
2017 - 2021 .......................................................................................................... 21
Figure 4.5. Vinamilk’s financial performance during 2012 - 2017 .......... 23
Figure 4.6. Vinamilk’s financial performance during 2012 – 2017 ......... 24
Figure 4.7. Gross profit margin and input milk power price of Vinamilk 24
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CHAPTER 1. COMPANY OVERVIEW

1.1. Introduction to Vinamilk
Vinamilk is the largest Vietnamese dairy producer. They manufacture and sell
liquid, powdered, condensed, and plant-based milk, yogurt, cheese, and ice cream with
13 farms in Vietnam (>160,000 cows); exports to over 50 nations (US, Japan, Australia,
etc.)
Vinamilk is a famous dairy player in Vietnam and worldwide thanks to its

commitment to innovation, quality, and sustainability. Vinamilk has won numerous
awards, including Forbes Asia's "Fabulous 50" in 2015, 2016, and 2018; ASEAN
Corporate Sustainability Award, Top 50 Best Listed Companies in Vietnam for
Sustainability Report (2020) and become one of the top five milk brands worldwide
(Global Food and Beverage Industry Report).
The Vision of Vinamilk is to become a world-grade brand in the food and

beverage industry, where people trust nutrients and health products. The company's
mission is to deliver valuable nutrition to the community with respect, love, and
responsibility (Vinamilk, 2023).
1.2. Product Portfolio and Statistics

Throughout its 47 years of history, Vinamilk has achieved the sixth position
among the Top global dairy companies in terms of brand value - 2.8 billion USD in 2022
(Báo Nhân Dân điện tử, 2022). In the same year, it generated a staggering 60.075 billion
VND of consolidated total revenue (Vinamilk, 2023). Vinamilk also possesses a vast
capacity with more than 146.000 cows and 12 product lines with more than 200 products.
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Figure 1.1. The product portfolio of Vinamilk
Source: Synthesized by the authors (2023)
Vinamilk's product portfolio is diverse and serves many customers, from infants
to adults. Among these lines, UHT fresh milk has always been the company's signature
with the most extended history and impressive performance. From 2016 to 2021, in the
drinking milk sector, Vinamilk consistently ranked first and almost four times the second
company. UHT lines have four main products: Vinamilk Fresh Milk 100%, UHT Fresh
Milk - Vinamilk Green Farm, UHT Fresh Milk - Vinamilk 100% organic, and Vinamilk
UHT Fresh Milk with Bird’s Nest. Besides, Vinamilk also invests in other segments, such
as milk for pregnant women and powdered milk for infants. The prominent brands for
this segment are Dielac and Optimum. Along with milk products, yogurt, ice cream,
cheese, and sugar are also in production, contributing to Vinamilk's aim to expand its
product ranges.
Most of the Vinamilk portfolio is dairy products, but the company also expanded
into non-dairy products to catch up with current demand, especially the plant-based milk
category.
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CHAPTER 2. EXTERNAL ENVIRONMENT ANALYSIS

2.1. Macro-environment analysis
Firstly, regarding the political and legal factors, because Vinamilk mainly
operates in Vietnam's market, the political and legal situation in Vietnam will impact the
formulation and implementation of Vinamilk’s strategies. Vietnam is a politically stable
country without war and terrorism, facilitating business. Moreover, the government has
various policies to support the local milk industry, such as approving the plan for dairy
production development until 2025 and other tax reductions. However, Vinamilk should
pay attention to competition from foreign milk brands because Vietnam is a member of
the World Trade Organization (WTO) and party to free trade agreements such as the EU-
Vietnam Free Trade Agreement (EVFTA) or the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership (CPTPP). This collaboration means that dairy
brands from countries such as Japan, New Zealand, or Singapore are no longer subject to
import tariffs, resulting in lower prices and increased competitiveness.
Turning to the economic factor, Dr. Can Van Luc, Chief Economic Specialist of
BIDV and Director of BIDV Training and Research Institute, believes that the average
CPI for the entire year of 2023 will be around 3-3.5%, lower than the target of 4.5% based
on historical data. This rate will contribute to the stability of the macroeconomy,
providing policy space to promote economic and social recovery and development.
Furthermore, the National Community Investment Fund predicts that by 2025, the
average GDP per capita of Vietnam will be 4.688 USD (upper-middle-income
classification). The upward trend in average income not only generates higher purchasing
power in the market but also leads to various needs and desires of consumers.
Regarding the social factor, a report conducted by Research and Markets on

Vietnam’s dairy industry 2022 - 2031 states that demand for milk consumption per capita
in Vietnam will reach 40 liters by 2030, with an upward trend for people’s healthcare
awareness. Furthermore, according to Vietnam’s General Statistics Office, in 2022,
Vietnam had a population of 99.5 million, forming a large market for milk consumption.
More importantly, the rural areas will lead the market growth of the dairy business as the
urban population has entered a saturation phase.
As one of the input factors in the production process, the technological factor is a
crucial element that determines the efficiency of Vinamilk's production activities. On the
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national level, Vietnam has much room to grow its dairy business, says Hoang Kim Giao,
President of the Vietnam Ruminant Husbandry Association (2022). He also says the
country would prioritize developing a value chain and utilizing more dairy farming and
processing technology. In this aspect, Vinamilk has a competitive advantage as its
production technology devices meet international standards, employing modern
packaging technology and importing technology from renowned equipment suppliers
such as Tetra Pak (Sweden) and APV (Denmark). The synchronized, state-of-the-art
production lines, whether automatically controlled or semi-automated, meet food safety
and quality requirements. Vinamilk utilized advanced technologies to serve dairy
farming, including Ethernet networks, Bluetooth wireless connectivity, Wi-Fi, and
remote radio wave identification technology with RFID automatic identification chips.
Lastly, the environmental factor remains favorable for Vinamilk. Specifically, the
geographical features and tropical climate, juxtaposed with the temperate zone belt in
Vietnam, are highly conducive to developing dairy cattle. Pasturelands such as Ha Tay,
Moc Chau, and Binh Duong, among others, provide abundant, diverse food sources,
fostering optimal conditions for growth.
2.2. Micro-environment analysis

First, regarding supplier power, the impact of the supplier on Vinamilk is low,
thanks to the integration of the supply side. Specifically, the suppliers of Vinamilk come
from domestic and foreign sources. Foreign suppliers only account for a small percentage,
mainly packaging (Egoexpress, 2022). A majority of raw milk is from Vinamilk’s farms.
Specifically, Vinamilk has 15 dairy farms with international standards and is the biggest
in Asia, with 146.000 cows generating 250 tons of raw milk per day (Vinamilk, 2022).
Regarding the sugar supply, in 2017, Vinamilk launched its own sugar company in Khanh
Hoa with a capacity of 6.000 tons of sugar cane per day (Báo Khánh Hòa, 2017).
Concerning buyer power, the level of impact is moderately high due to the size of
the number of customers and the characteristics of the product category. Specifically, the
availability of similar products from competitors has increased thanks to the dense
distribution network of supermarkets, convenience stores, etc. In addition, milk-based
products are functional products with high price elasticity, making customers more
sensitive to price changes. In addition, product differentiation is currently low and based
mainly on sugar, fat, or add-in flavor levels. However, Vinamilk now has substantial
market shares, and customers in Vietnam have a high level of loyalty (Statista, 2023).
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Third, the threat of substitution is high due to the rising demand for alternatives
to dairy products, significantly more healthy products. According to the General Statistics
Office, the milk market’s CAGR was 14% during 2014-2019. Nut milk accounts for 12%
of the total drinking milk sales with 18% CAGR, the highest among all drinking milk
kinds. However, in recent years, Vinamilk has launched a new line of nut milk to catch
up with the trend, but it needs more investment to stay competitive.
Fourth, the threat of new entrants to the dairy industry is moderate due to the high
initial cost and legal standard for the dairy product category and the high industry
attractiveness. The high entrance barriers are because new entrants face challenges related
to capital-intensive nature, technology, equipment, packaging, and distribution. In
addition, all dairy products are strictly controlled by food sanitary and safety standards
and ISO quality management system (Cổng thông tin xúc tiến đầu tư Việt Nam, n.d.).
Last, the level of competitive rivalry is high due to the high number of
competitors. Vinamilk products face competition not only from domestic sellers but also
from foreign ones. Specifically, more than 200 dairy producers are competing on the
market by the end of 2021. Because the Vietnamese dairy market has high potential, many
new players want to enter the industry. According to Euromonitor (2021), the milk
industry of VietNam reached 135.000 billion VND in 2020, increasing 8% compared to
2019, especially the drinking milk category, which grew by 10%. It is forecasted that
liquid milk sales will increase by 7.7% from 2021 to 2025. FrieslandCampina and TH
Food Chain are Vinamilk's two biggest competitors.
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CHAPTER 3. INTERNAL ENVIRONMENT ANALYSIS

3.1. The overall organization structure of Vinamilk and assumption-making
foundation
The organizational structure of Vinamilk includes 10 departments responsible for
different functions:
Organization structure by department of Vinamilk
Source: Vinamilk (2023)

The strategic planning department is responsible for long-term strategic planning,
setting goals and objectives, and ensuring that the company's strategic initiatives align
with its vision and mission.
The IT department oversees the information technology strategy, including the

management of IT resources, maintenance of IT infrastructure, and ensuring data security
and technology advancements that support company operations.
The Sales department is in charge of developing and executing sales strategies,

managing the sales force, and driving the company's revenue through product sales.
The Marketing department focuses on marketing strategies and campaigns, brand

management, market research, and customer engagement to promote the company's
products and brand.
The R&D (Research & Development) department mainly investigates in the

development of new products and the improvement of existing ones, overseeing research
activities, and innovation processes.
The production department manages the manufacturing processes, oversees

production lines, ensures the efficiency and quality of product manufacturing, and
handles operational issues in production.
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The dairy development department focuses on the strategic development of the

dairy product line, possibly including sourcing, product innovation, and market
positioning.
The supply chain department is responsible for the management of the supply
chain, including procurement, logistics, inventory management, and distribution of
products.
The HR (Human Resources), Admin & PR (Public Relations) department

manages human resources policies and procedures, recruitment, training, and
development, as well as administrative functions and public relations activities.
The finance department oversees financial management, including accounting,

budgeting, financial planning, and analysis, as well as investor relations and risk
management.
Even with a prominent brand portfolio, unlike organizations with similar product
diversity, Vinamilk has not divided its departments by individual products but rather by
functional characteristics. With this division, any product goes through and is managed
by various departments throughout its production process. This approach enhances each
function's understanding of the company's products.
3.2. Organizational culture of Vinamilk

The Seven Dimensions of Organizational Culture consist of aspects such as
Innovation, Stability, People Orientation, Team Orientation, Aggressiveness, Outcome
Orientation, and Detail Orientation. Each dimension influences organizational behavior
in the workplace environment and affects decision-making processes. Understanding
these dimensions helps foster a cohesive and effective organizational culture tailored to
specific business objectives and challenges.
To thoroughly comprehend Vinamilk’s culture, the authors go through what has

been known so far about its culture and then analyze it using the seven dimensions of
organizational culture. In fact, at Vinamilk, there are three layers of culture:
Firstly, we analyze the surface of Vinamilk’s culture. These are tangible

expressions, such as the green and white logo and office decor, and a symbolic cultural
boat in the lobby with sails representing values. The traditional song "Vinamilk –
Everyone is a pepper flower" complements the cultural identity. Observable behavioral
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culture spans security, reception, and management, emphasizing professionalism and

orderliness.
Secondly, investigating Vinamilk’s Intermediate Culture, this layer embodies

shared beliefs and values, including a vision to be a trust symbol in Vietnam. Mission
commits to top-tier nutrition with profound responsibility. Core values are Integrity,
Respect, Fairness, Ethics, and Compliance. Emphasizes business philosophy, quality
policy, and crucial leadership behaviors determining 70% of cultural formation.
Thirdly, turning to Vinamilk’s foundational assumptions, this core layer shapes

VINAMILK's entire culture, determining whether agreed values translate into actual
practices. The 6 Supreme Cultural Principles guide everyone from gatekeepers to the
CEO in decision-making and behavior. Fundamental principles include taking personal
responsibility, emphasizing self-supervision for adults, and prioritizing quantitative
communication. These principles, deemed foundational assumptions, are upheld by all,
from gatekeepers to Vinamilk's CEO.
In summary, the six ultimate Vinamilk’s culture are:
• When the event occurs, the first cause is me.

• Adults don't need adults to supervise them.
• My words are myself.
• Let's talk to each other quantitatively.
• Don't say no; always seek two solutions.
• I am an international standard expert in my field.
From our analysis, Vinamilk prioritizes two crucial dimensions within its culture-
attention to detail and people orientation. This emphasis is evident in the meticulous
design elements like the green and white logo, which symbolizes precision and quality.
Furthermore, every reasoning within the organization requires quantification, which
means you can not execute something without having the data or evidence to back it up.
The commitment to becoming a trusted symbol in Vietnam for nutrition and health
products underscores a deep People Orientation, emphasizing respect, love, and
responsibility toward the community. This focus is visible in the company's mission and
permeates the behavioral culture, from leadership to daily interactions. The company
highlights individuals' ability to work independently and be responsible for their actions.
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This culture encourages employees to perform at their best with full acknowledgment of
what they strive for.
3.3. Vinamilk’s application of management theories

There are four main management approaches: classical, quantitative, behavioral,
and contemporary. According to our research, Vinamilk has applied all major
management approaches to maximize its business performance and attain sustainable
development. Such approaches include Scientific management, Administrative Theory,
Bureaucratic Approach, Quantitative Approach, Quality management, Organizational
Behavior, and the System Approach.
Firstly, Vinamilk's organizational strategy aligns with Frederick Winslow

Taylor's scientific management principles. Establishing a sustainability management
structure and outlining specific functions reflects a systematic work approach. In 2021,
the company conducted an impressive 597 training courses with 25,536 sessions,
demonstrating a commitment to employee development in line with Taylor's emphasis.
This extensive training initiative signifies a scientific approach to selecting and training
workers. Vinamilk's dedication to ethical business practices suggests a cooperative
relationship, echoing Taylor's principles of collaboration between management and
workers. These elements collectively reinforce Vinamilk's integration of scientific
management, emphasizing efficiency, responsibility, and sustainability.
Moreover, Vinamilk's Board of Directors oversees the Code of Conduct's

effective implementation and compliance monitoring company-wide. The
encouragement to apply this code to all subsidiaries and affiliates provides evidence of a
structured and coordinated approach, aligning with Administrative Theory - Henri Fayol's
management principles, emphasizing uniformity and efficiency across organizational
functions.
Vinamilk also reflects the principles of Frank and Lillian Gilbreth's theory,
emphasizing productivity through streamlined processes. The Human Resources Division
collaborates across departments to fine-tune job evaluation criteria, subjecting 100% of
employees and managers to regular performance assessments. This commitment mirrors
Gilbreth's focus on optimizing work efficiency. Vinamilk's adaptive operational
standards, conforming to international norms, and innovative product enhancements
across diverse segments exemplify the application of scientific management principles.
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The company's ability to cater to varied market needs while maintaining efficiency
reinforces its strategic alignment with the essence of Gilbreths' theories.
Regarding Max Weber's bureaucratic principles through its structured

organization. The authority hierarchy, division of labor, and dedicated committees align
with Weber's emphasis on rationality and predictability. The company maintains ethical
standards, combats fraud, and ensures compliance, reflecting a transparent chain of
command and technical competence. Vinamilk reinforces its bureaucratic approach
through policies like Codes of Conduct and Anti-fraud measures. The sustainability
structure with defined roles aligns with Weber's principles of efficiency, illustrated by the
Board of Directors Strategy Subcommittee. Vinamilk's adherence to regulations and
structured efficiency strongly indicates the integration of Weberian bureaucracy in its
management practices.
Figure 3.1. Vinamilk’s compliance control system
Source: The author’s screenshot from Vinamilk’s website (2023)
Besides, Vinamilk also applies a quantitative approach to management, focusing

on improving managerial decision-making by applying Statistics, optimization,
information models, and computer simulations. Vinamilk presents career opportunities
for Data Scientists and states that its Strategy & Innovation Office will use technology
and data to help the business create and innovate. A job description for a Data Scientist
published by Vinamilk includes but is not limited to building decision-making models,
proposing solutions for defined business problems, and translating business questions into
analytical ones that can be answered by conducting statistical and machine learning
methods.
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Furthermore, Vinamilk also applies the quality management principle, which

emphasizes continuous improvement and focuses on the customer, accurate
measurement, and improvement in the quality of everything. This application is clearly
shown in Vinamilk’s operating principles - quality first. The business is process-focused,
up to international standards with its production systems, and verified by laboratories with
ISO 17025. Below are two illustrations of how Vinamilk manages its quality and
production systems. Vinamilk commits itself to “enthusiastically striving for perfection
for a growing Vietnam.”
Figure 3.2. Vinamilk’s commitment to “enthusiastically strive for perfection for a

growing Vietnam.”

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Figure 3.3. The quality control process of Vinamilk
In addition, Vinamilk is aware of the external environment, considering itself an

open system as defined by the System Approach to management. Available systems,
theoretically, dynamically interact with their environments by taking in inputs and
transforming them into outputs that are distributed into their environments. After that,
Vinamilk realized the significant contribution of the coordination of separate parts to its
performance and constantly adapts to changes outside its organization.
Figure 3.4. Vinamilk’s rebranding campaign
Source: Ho Dong Thu (2023)

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An example of Vinamilk’s application of the System approach is its repositioning

campaign in July 2023. Realizing that there are new market trends, changes in customer
insights, and competitors' strategies, Vinamilk decided to reposition itself to align with
the new generation of consumers (targeting the younger demographic while preserving
traditional values), expand globally, and differentiate from competitors.
Besides imposing regulations and processes to ensure its business performance,

Vinamilk closely follows the Behavioral Approach of management and understands
organizational behavior, which places people as the most critical asset of an organization.
According to Trinh et al. (2021), five factors that significantly impact the increase in self-
motivation for workers include (1) Self-recognition, (2) Company Relationship, (3)
Working Environment, (4) Job Characteristics, (5) Salary and Bonus. When employees
rate these aspects positively in their work environment, the survey shows a substantial
increase in their effort and loyalty. At Vinamilk, a leading dairy company, all five factors
are highly valued and prioritized (Minh Thi, 2019). In its current dairy industry
development strategy, Vinamilk recognizes that the human factor is crucial to its success.
Therefore, as early as 1993, Vinamilk signed long-term contracts with the Moscow
University of Applied Biotechnology (under the Russian Federation) to send personnel
for education. Thanks to the guidance of these professionals, Vinamilk has achieved
significant success in management and operations, contributing to the development of the
dairy industry and attaining the accomplishments it enjoys today.
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CHAPTER 4. VINAMILK’S PRODUCT MANAGEMENT ANALYSIS

4.1. Planning function
Effective planning is vital for management, providing a roadmap for goal
achievement, addressing issues, streamlining resources, and fostering cooperation.
Thanks to that, proactive decision-making and flexibility are enhanced, promoting
productivity. Furthermore, well-communicated plans inspire dedication, linking
individual efforts to overarching goals. There are four planning approaches: T breadth,
time frame, specificity, and frequency, and provide a comprehensive framework for
businesses to navigate challenges and achieve sustainable success.
At Vinamilk, strategic and operational planning align to provide a comprehensive

view of organizational goals. While the strategic plan outlines the overarching vision, the
operational plan ensures effective execution, harmonizing long-term objectives with day-
to-day activities. Every product follows a consistent vision and mission.
Drawing a picture of what Vinamilk wants to become, the company clarifies their
next steps by developing many five year development strategies. To better illustrate such
a management approach, we analyze Vinamilk's planning from 2017 to 2021.
Figure 4.1. Development strategy of Vinamilk from 2017 to 2021
Source: Vinamilk’s annual report (2017)
To fulfill such objectives, the company has set targets in terms of quantity and
quality to visualize what should be done. This shows that the company has applied a good
pattern in planning, going from the strategic overview of what the company wants to
become to a specific plan for the course of action.
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4.1.1. Quantitative target

The company shows that they are heading towards a particular goal for this period,
which can be shown the below figure:
Figure 4.2. Quantitative Targets of Vinamilk in 2021
To achieve such a goal, the company continues to clarify its plan by offering
targets to be achieved in terms of quality.
4.1.2. Qualitative targets

Persevering as the market leader in Vietnam and aspiring to break into the Top 30
global dairy companies by sales, Vinamilk has outlined a development strategy anchored
on four critical pillars as follows.
Leading in highly applicable innovation
Vinamilk, in its 40-year focus on dairy, prioritizes R&D for diversified offerings
in line with evolving consumer needs. In the fresh product line, quality and variety are
consistently enhanced, introducing innovations like vitamin-enriched milk for immune
support.
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Figure 4.3. Diverse offerings of the fresh milk product line
Holding the leading position in the Vietnamese dairy industry
Emphasizing domestic potential, Vinamilk prioritizes the expanding rural market

where dairy consumption is half that of urban areas, aligning with a 35%/65% urban/rural
population structure.
Market segmentation and product positioning
Vinamilk focuses on the urban middle and high-end market, expanding into rural
areas with famous product lines. Their diverse fresh milk offerings cater to various
customer profiles, from nutritious to organic preferences.
Becoming the dairy company creating the highest added value in Southeast Asia
Vinamilk gears up for dairy mergers, partnerships, and global expansion.

Focusing on brand enhancement, substantial investments, and strategic resource
allocation ensures sustained growth and market dominance.
While the strategies may seem straightforward, planning for each five-year phase
varies. This is because the overall landscape, including macro, micro, and internal factors,
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is constantly in flux. As these elements continually evolve, it becomes challenging to

establish a rigid structure that can be consistently applied. The dynamic nature of the
environment makes it difficult to fully comprehend and predict, introducing an element
of unpredictability into the planning process.
In the context of Vinamilk, the company employs a comprehensive planning

approach that encompasses both strategic and operational dimensions. By integrating
operational planning into its strategic framework, Vinamilk enhances the feasibility and
clarity of its strategic initiatives. This integration establishes a coherent pattern, ensuring
that the company adheres to well-defined objectives in its operational activities. The
synergy between strategic and operational planning at Vinamilk enhances the overall
planning process and contributes to the successful implementation of clear and achievable
business goals.
4.2. Organizing function

The organizing function in management is crucial for arranging resources and
activities to efficiently meet organizational goals. Organizations are thus increasingly
focused on selecting the most effective organizational structure overall and for each
department, aiming to maximize work efficiency and benefits. Key factors influencing
this structural choice include Strategy, Technology, and Environmental Uncertainty.
Strategy of Vinamilk
Maintaining the No.1 position in the Vietnam market and aiming to reach the Top
30 of World’s Largest Dairy Companies in terms of revenue, Vinamilk focuses on product
innovation, market expansion, and clear customer communication. Consequently, a well-
organized, tightly controlled management and operational system is essential for ensuring
product stability and preventing incidents that could harm the brand's reputation.
Technology of Vinamilk
Vinamilk's sterilized milk production utilizes modern technology and automation.

The process spans from raw materials to final products, integrating advanced systems like
Wamas warehouse management and Tetra Plant Master for consistent quality and
packaging. In the FMCG sector, Vinamilk emphasizes continuous technology updates
and stringent quality control, supervised by expert teams and specialized human
resources.
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Environmental uncertainty of Vinamilk
Despite economic fluctuations, Vinamilk has seen substantial growth in the dairy
sector, driven by essential product demand and a strong market presence. Benefiting from
demographic and income growth in Vietnam, the company, known for its quality and
reputation in sterilized milk, has attracted significant investment. To sustain its market
leadership, Vinamilk emphasizes strict management, departmental consistency, and
effective communication of its organizational values.
After analyzing strategy, technology, and environmental uncertainty, a

mechanistic structure emerges as the best fit for Vinamilk. This structure suits the
company's needs for efficiency, consistency, and control, given its large scale and stable
market. Vinamilk has indeed been applying a mechanistic structure to its sterilized milk
operations, incorporating these essential characteristics.
High work specialization and rigid departmentalization
Vinamilk organizes its departments based on their specific functions, currently

employing nearly 10,000 staff members spread across the country from North to South,
working in 10 different departments. Each department has its unique function, and every
member within these departments handles tasks suited to their abilities and aspirations.
This functional division of labor enhances work efficiency by grouping employees with
similar specialties and skills together, fostering deep expertise and collaboration within
departments. Such a structure has made the production and management processes of
sterilized milk products more effective, with each part of the process handled by highly
specialized individuals. Moreover, organizing by function also enhances alignment
throughout the company. This is because, regardless of the department, all employees
need a firm understanding of the product, as well as the company's core values, vision,
and mission, ensuring a comprehensive knowledge of the product across all departments,
avoiding situations where only certain departments are informed about the product.
Clear chain of command and narrow span of control
Vinamilk's management structure is defined by a clear chain of command

consisting of the Shareholders Meeting, Board of Directors, Chief Executive Officer, and
a Supervisory Board. The Shareholders Meeting is the top decision-making body, setting
business strategies. The Board of Directors, appointed by shareholders, manages
19
company affairs, except for those reserved for shareholders. It includes a chairman and
ten members overseeing various departments. The CEO, appointed by the board, manages
daily operations. The Supervisory Board, elected by shareholders and independent from
other boards, ensures legal and careful management, including overseeing accounting and
financial reporting. This structure centralizes decision-making, ensuring consistent and
strategic decisions, particularly in sterilized milk production. The Supervisory Board's
oversight also enhances product reliability. Vinamilk's management also ensures product
quality consistency and a focus on customer needs.
Although this structure suits Vinamilk's strong brand and stable operating context,
the company may face significant communication challenges. In such a structure,
communication is predominantly vertical, moving up and down the hierarchy, which can
significantly impede the free flow of ideas and information across different levels. This
rigidity often hinders cross-departmental collaboration, as employees might become
confined within their silos, unable to easily share insights or innovations with peers in
other departments. This environment can stifle creativity and impede the development of
holistic, company-wide strategies. Moreover, it can lead to delayed responses to market
changes, as the information has to navigate through multiple layers before reaching
relevant decision-makers. Therefore, Vinamilk should come up with solutions to tackle
any communication problem that might occur.
4.3. Leading function

Overall, domestic revenue is affected by the general decline of the entire industry.
However, Vinamilk's results are still better than the entire industry and its market share
continues to recover. The company's recovery in market share is attributed to its
application of leadership theories, particularly from the late 1940s to the mid-1960s.
Vinamilk emphasizes that effective leadership involves both traits and behavior, leading
to the issuance of the Code of Conduct in January 2010, applicable to the Board of
Directors, Board of Management, and all employees. Notably, the recent packaging
change in liquid milk products aligns with the new brand identity from August 2023,
contributing to the development and enhancement of dairy product quality. (Vinamilk
Annual Report, 2022)
Vinamilk managers are also actively applying the Managerial Grid, a research on
Leadership Behaviors. This is demonstrated by leaders who strive to reach a 9,9 style,
showing strong care for both output and people. In terms of output, Vinamilk's automatic
20
production line, overseen by diligent staff, relies on uninterrupted processes to maintain

the high quality of their products. The company has invested considerable effort in
effectively managing these processes, leading to their recognition as one of the top five
Best Managed Companies in the Large Capital Group category. For the employee-
oriented personnel policy and top-tier remuneration regime, talent development and
cultivation is a "key card" for Vinamilk to ensure quality human resources and develop a
team of successors in a new development phase toward the goal of becoming one of the
world's top 30 dairy companies.
Vinamilk's manager appears to apply elements of Charismatic-Visionary

leadership, inspiring teams through vision and charisma. By setting ambitious goals and
articulating a clear direction, this leadership approach may have guided the organization,
contributing to consistent growth in stable markets like the Middle East and Southeast
Asia. The collaboration with key players in China positively impacted Vinamilk's
valuation, increasing by 6% compared to 2022, as reported by Brand Finance. These
indicators suggest successful leadership and strategic decision-making within the
pasteurized fresh milk products in Vinamilk. (Vinamilk Annual Report, 2022)
Managers at Vinamilk prioritize not only operational excellence but also ethical
leadership. The 15-year success of the School Milk program underscores the company's
commitment to community and sustainability. Winning the "Outstanding and Sustainable
Asian Company 2021" award, particularly as the "Most Community-Oriented Company
in Asia," signifies a dedication to ethical practices. Additionally, receiving the highest
Platinum ranking for outstanding community products from the Global CSR Award for
Vinamilk's School Milk product emphasizes the company's commitment to social
responsibility and ethical standards. (Thuyết trình lợi nhuận, 2023)
Managers at Vinamilk appear to apply Hersey and Blanchard's Situational

Leadership Theory, emphasizing the Selling approach. This aligns with the company's
focus on effective communication and guidance, contributing to being recognized as the
top employer in the fast-moving consumer goods industry in 2021. Vinamilk's
commitment to health protection and providing a safe working environment, along with
comprehensive benefits during the Covid-19 pandemic, led to positive business results.
The company is actively fostering a culture of innovation by supporting startup projects
aligned with its growth strategy and investing in conducive working environments and
training programs.
21
4.4. Controlling function

To ensure alignment with Vinamilk's 2017-2021 development strategy, this
section evaluates the effectiveness of its activity management and control in meeting both
quantitative and qualitative targets. An examination of Vinamilk's financial performance
over the specified period offers insights, with comparisons drawn to the preceding 2012-
2017 timeframe, providing a comprehensive overview of the company's achievements
and strategic outcomes.
In terms of qualitative targets, Plimsoll's ranking places Vinamilk as the 36th

largest global dairy company in sales for 2021, signifying a noteworthy ascent of 6
consecutive places. While this falls short of the goal to break into the Top 30, on the home
front, Vinamilk maintains its stronghold as the No. 1 dairy brand in Vietnam.
Impressively, it has secured this position for eight consecutive years, a testament to its
sustained resonance with Vietnamese consumers, as Nielsen and Kantar Worldpanel
reported.
Leading in highly applicable innovation

Vinamilk's unwavering commitment to product focus is reflected in the
introduction of nearly 90 new products during the 2017-2021. This innovation aligns
seamlessly with the strategy to diversify the product portfolio, ensuring alignment with
evolving consumer preferences. The company's emphasis on dairy and related products,
its core business for over 40 years, has resulted in a robust product range that resonates
across urban and rural consumer bases.
Figure 4.4. Vinamilk’s actual performance towards development during 2017 -

2021
Source: The authors (2023)

22
Holding the leading position in the Vietnamese dairy industry

The strategy's goal to exploit untapped potential in rural areas has materialized in
Vinamilk's historic high total consolidated revenue of 61.012 trillion VND in 2021. This
surpassed the initial plan and underscored the company's effective penetration of
previously underdeveloped markets. The success in rural regions with a traditionally
lower consumption rate showcases Vinamilk's ability to prioritize and exploit growth
potential strategically.
Market segmentation and product positioning

Vinamilk's focus on middle and high-end, value-added products in urban areas is
substantiated by its product lines. This strategic approach has contributed to sustained
growth in urban markets while concurrently expanding coverage in rural areas with
famous product lines. The delicate balance aligns seamlessly with the qualitative target
of product segmentation.
Becoming the dairy company creating the highest added value in Southeast Asia
In the pursuit of being the leading dairy company creating the highest added value
in Southeast Asia, Vinamilk has executed strategic investments. Initiatives like the Green
Farm Ecosystem, encompassing three dairy farms adhering to Global G.A.P. standards,
underscore the company's commitment to eco-friendly practices and regional value
creation.
Vinamilk's readiness for mergers and acquisitions (M&A) is evident in

collaborations such as the one with Vilico. The partnership involves investing in and
building a milk processing plant, contributing to the vertical integration of the dairy
supply chain. These strategic partnerships align with the development strategy's goal of
fostering robust partnerships and horizontal, vertical, and combined integration.
Global expansion is substantiated by the notable growth in international business

revenue, reaching 9.717 trillion VND in 2021. Successful exports to key markets like
China and establishing a joint venture in the Philippines signify tangible progress in
exploring and tapping into international markets, aligning seamlessly with the global
expansion targets.
Vinamilk's commitment to brand building is substantiated by various initiatives,

including environmental and community support programs. The contribution of nearly 40
billion VND to support frontline forces during the fight against COVID-19, collaboration
23
with the Vietnam High-Rise Milk Fund, and recognition in global CSR awards all
enhance the brand image. As outlined in the development strategy, these actions
substantiate substantial investments in advantageous areas like distribution, marketing,
and human resources.
In terms of quantitative targets, Vinamilk achieved a substantial revenue of 61.012

trillion VND in 2021, falling short of the ambitious target of 80,000 billion VND. The
average annual growth share in the total dairy market for Vinamilk was approximately
0.57%, not reaching the targeted 1% yearly average growth share. This indicates a
quantitative gap that warrants attention for aligning future targets with achievable
outcomes.
Financial performance
Turning to financial performance, from 2017 to 2021, Vinamilk demonstrated
robust economic performance, with total revenue steadily increasing from 51.135 trillion
VND to an impressive 61.012 trillion VND. Pre-tax profit remained stable, reaching
12.922 trillion VND in 2021, while net profit maintained a solid position at 10.633 trillion
VND. Return on equity (ROE) showed a gradual decline from 44% in 2017 to 31% in
2021, and return on assets (ROA) followed a similar trend, decreasing from 32% to 21%.
Figure 4.5. Vinamilk’s financial performance during 2012 - 2017
Source: Vinamilk annual report (2017)

24
While Vinamilk experienced robust financial growth from 2017 to 2021, but its
key financial metrics, revenue, and profit, decreased from 2012 to 2017. Total revenue
growth slowed from approximately 13.6% to around 4.5% yearly. Pre-tax profit growth
rates dropped from about 12.5% per year to an average of roughly 1.5% yearly. Such a
decline in growth rate can contribute to Vinamilk falling short of its 2021 target of 80,000
Billion VND. Besides, return on investment, measured by ROE and ROA, displayed a
declining trend in the 2017-2021 period,
Figure 4.6. Vinamilk’s financial performance during 2012 – 2017
Figure 4.7. Gross profit margin and input milk power price of Vinamilk
Source: Report of VCBS (2022)

25
One of the main reasons for the diminishing growth in key financial metrics and
market share was that the dairy giant had claimed the majority of the market at 60 percent.
It became more challenging to gain more, reflected in Vinamilk’s profit growth
diminishing during 2017-2021. Another challenge that Vinamilk faces is rising input and
transportation costs. As Vinamilk still has to import milk powder from abroad, VNM
production costs, in general, or raw material costs, in particular, are affected by
fluctuations in international milk prices. Furthermore, Vinamilk was hit with the Covid-
19 pandemic, which disrupted the global supply chain.
26
CHAPTER 5. CONCLUSION
The report has provided a detailed analysis of the story behind the success of
Vinamilk through the examination of the company's economic management policy.
Specifically, three factors have been focused on to gain a deep understanding of the
company’s management system: external environment, internal environment, and four
functions (planning, organizing, leading, and controlling) in product management.
First, the authors use the PESTEL and Peter’s Five Forces Frameworks to analyze
the external environment. After assessing the macro environment, the authors concluded
that the macro environment is favorable for Vinamilk's business operation. The political
climate in Vietnam is stable with government policy to assist domestic dairy products. In
addition, the economic perspective is good with rising average income and buying power,
especially in the healthcare sector. Moreover, Vinamilk can utilize the tropical
environment in Vietnam to develop its supply with the help of modern technology.
However, the market in the rural area has not yet been focused on enterprises' strategies.
It can be challenging for first movers to convert this segment, but it is also an excellent
opportunity to gain new market shares.
Next, the Porter 5 forces analysis is used to understand the opportunities and
challenges the milk industry and Vinamilk face. The research shows that Vinamilk has
substantial competitive advantages in the industry. Thanks to the integration of the
upstream supply chain, specifically raw milk suppliers, the long history, and the famous
brand name, the position of Vinamilk is ascertained. However, Vinamilk faces intense
competition from similar domestic and foreign products and the changing demand for
healthier and non-dairy products. This requires Vinamilk to develop innovations to
continuously achieve higher market adaptability.
Organizational structure and culture also contribute to the maintenance of the

product. The organization is structured into ten departments with different functions.
With this way of organizing, every product is strictly controlled, thanks to a deep
understanding of each function during the process. However, this approach may cause
communication challenges as a response from market changes could be delayed since the
information has to go through multiple layers before reaching relevant decision-makers.
Regarding cultural focus, Vinamilk emphasizes two key dimensions: attention to detail
and people development. These cultural aspects permeate three layers, contributing to the
27
meticulous care invested in every aspect of Vinamilk fresh milk production. This
dedication is evident in the packaging, continuous updates to nutritional content, and
flavor enhancements.
The external and internal environment significantly impacts product quality and
overall production. However, the pivotal factor contributing to the success of Vinamilk
lies in the company's POLC management approach. A comprehensive development
strategy is formulated every five years in the planning phase, providing a roadmap and
clear objectives for future endeavors. However, after each five-year plan, the strategy may
change substantially and make it hard for the company to adapt swiftly. Organizing within
Vinamilk places a strong emphasis on work specialization and departmentalization. This
approach optimizes human resources, ensuring high-quality output. The organizational
structure incorporates a transparent chain of command and a narrow span of control for
effective management. In leadership, Vinamilk prioritizes human development and
inspiration, which is evident in applying management theories such as the Managerial
Grid and Charismatic-Visionary leadership. This emphasis creates a people-oriented
environment, fostering individual growth and autonomy. The controlling aspect involves
revising the results of the five-year plan and making suggestions for the subsequent five
years. This continuous feedback loop ensures adaptability and improvement over time.
Overall, Vinamilk is a robustly established company thriving in a favorable

external and internal environment. The distinctive management style that sets Vinamilk
apart. With a clear vision and mission, every organizational step is meticulously planned,
organized, led, and controlled. However, there is room for improvement and innovation
in the future.
28
CHAPTER 6. RECOMMENDATION
6.1. Recommendation on the external environment
Intense competition from foreign and domestic brands
To compete against foreign dairy brands, Vinamilk should constantly innovate its
products regarding nutrition and flavors. This requires the company to renew itself
frequently, apply the latest scientific achievements in nutrition, and acquire better
technology. Consequently, Vinamilk can create products that meet consumers'
increasingly diverse and demanding needs.
Moreover, Vinamilk must strategically adapt to competitors' successes like TH

True Milk and VPMilk. Conducting a thorough competitor analysis is pivotal. By
scrutinizing competitors' strategies, pricing models, and product offerings, Vinamilk can
gain valuable insights into successful approaches.
Adapting to new trends in the market

Our external environment analysis shows that market trends significantly
influence Vinamilk's business performance. The task is to stay ahead of market trends,
which requires a proactive approach. Vinamilk is gradually expanding into new segments
or diversifying product offerings to be the “first mover” in these untapped markets and
unlock new revenue streams. To execute this strategy, the company should invest in
comprehensive market research to identify emerging trends and unmet consumer needs.
Luckily, Vinamilk already has a dedicated R&D team to monitor industry trends and
emerging technologies. Introducing innovative dairy products or exploring related
markets, such as plant-based alternatives, will position Vinamilk as a dynamic and
responsive player in the evolving dairy industry.
6.2. Recommendation on potential structural problems

Despite its benefits, the mechanistic organizational structure of Vinamilk can lead
to communication challenges across the organization and reduced creativity. Now that we
know innovation and creativity matter to Vinamilk as they can open the door to increased
competitiveness, Vinamilk should encourage cross-functional collaboration to leverage
diverse perspectives and generate creative solutions. For example, the business can form
cross-functional task forces of members from different departments specifically designed
to address market changes swiftly. The company can also implement tools and platforms
such as Co-working spaces and Slack to facilitate seamless communication among teams
29
while conducting regular team-building activities to strengthen relationships and

encourage open dialogue. Additionally, Vinamilk can allocate time for brainstorming
sessions and encourage employees to share their ideas freely.
Furthermore, to address the potential problem of slow market responses, Vinamilk

can introduce agile decision-making processes. This involves empowering lower-level
employees within their areas of expertise. By decentralizing decision-making, the
organization can react more quickly to changes in the market, tapping into the specialized
knowledge of frontline staff to inform strategic decisions. Lastly, establishing a
centralized information hub accessible to employees at all levels and across departments
is crucial. This hub provides real-time updates on market changes, enabling decision-
makers to stay informed and act promptly.
6.3. Recommendation on managing declining growth

Vinamilk can enhance its competitive edge by strategically addressing critical
aspects of its operations. Firstly, to mitigate the impact of fluctuating international milk
prices, the company should consider diversifying its sources of milk powder. Exploring
opportunities to establish partnerships with local suppliers can reduce dependency on
imported raw materials, providing stability in the face of market price fluctuations. In
addition, developing a more resilient and agile supply chain is crucial. Vinamilk should
identify alternative suppliers and establish contingency plans to ensure a steady supply of
raw materials, especially during global disruptions like the COVID-19 pandemic. Lastly,
the dairy giant had claimed the majority of the market at 60 percent, and it became more
challenging to gain more, reflected in the diminishing profit growth. Thus, Vinamilk
should seek market diversification to unlock untapped markets and revenue streams,
resulting in more potential for growth.
a
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years/?lang=en
PART II. LEARNING LOG
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LEARNING LOG || GROUP 8
TABLE OF CONTENT
23/10/2023 ................................................................................................................ 3
1. Definition of economics, politics, culture ........................................................ 3
2. The relationship between economics, politics, and culture .............................. 3
3. Case Study ........................................................................................................ 4
25/10/2023 ................................................................................................................ 6
1. REQUIREMENT FOR MANAGERS ............................................................. 6
2. Distinguish between the manager's job and that of a member. ................... 6
3. Requirements for a manager ........................................................................ 8
30/10/2023 .............................................................................................................. 10
REQUIREMENT: RESEARCH FOR PRESENTATION ................................. 10
06/11/2023 .............................................................................................................. 15
1. REQUIREMENT 1 .................................................................................... 15
2. REQUIREMENT 2 ........................................................................................ 20
15/11/2023 .............................................................................................................. 24
1. REQUIREMENT 1: COST ESTIMATION................................................... 24
2. REQUIREMENT 2: CVP .............................................................................. 26
3.REQUIREMENT 3: CONSTRAINS .............................................................. 28
4.REQUIREMENT 4: BUDGETING ................................................................ 30
29/11/2023 .............................................................................................................. 34
4/12/2023 ................................................................................................................ 35
1.REQUIREMENT 1 ......................................................................................... 35
2. REQUIREMENT 2 ........................................................................................ 35
6/12/2023 ................................................................................................................ 38
REQUIREMENT ............................................................................................... 38
23/10/2023
1. Definition of economics, politics, culture
1.1 Economics
Economics can be defined in a few different ways. It’s the study of scarcity, the study of
how people use resources and respond to incentives, or the study of decision-making. It often
involves topics like wealth and finance, but it’s not all about money. Economics is a broad
discipline that helps us understand historical trends, interpret today’s headlines, and make
predictions about the coming years (“American Economic Association,” n.d.)
1.2 Politics
The activities of the government, members of law-making organizations, or people who
try to influence the way a country is governed. (“Politics,” 2023)
1.3 Culture
Culture refers to the cumulative deposit of knowledge, experience, beliefs, values,
attitudes, meanings, hierarchies, religion, notions of time, roles, spatial relations, concepts of the
universe, and material objects and possessions acquired by a group of people in the course of
generations through individual and group striving.
2. The relationship between economics, politics, and culture
The relationship between economics, culture, and politics is complex and multifaceted, and
it varies across different societies and historical contexts. However, there are some general ways
in which these three aspects interact and influence each other:
2.1 Economics:
• Impact on Politics: Economic factors, such as wealth distribution, employment rates, and
economic growth, often play a significant role in shaping political landscapes.
Governments may implement policies to address economic issues, and public perception
of economic conditions can influence political preferences.
• Impact on Culture: Economic conditions can shape cultural trends and values. For
example, during economic prosperity, there may be a culture of consumerism, while
economic downturns might lead to a focus on frugality and resilience.
2.2 Politics:
• Impact on Economics: Political decisions, policies, and regulations directly affect
economic activities. Tax policies, trade agreements, and government spending can either
stimulate or impede economic growth. Political stability is crucial for fostering a favorable
economic environment.
• Impact on Culture: Political ideologies and decisions can influence cultural norms and
values. For instance, government policies on education, media, and social issues can shape
the prevailing cultural attitudes within a society.
2.3 Culture:
• Impact on Economics: Cultural factors influence consumer behavior, market trends, and
business practices. Preferences, attitudes, and cultural values can shape the demand for
certain goods and services, affecting economic activities.
• Impact on Politics: Cultural considerations often play a role in political movements and
the formation of political identities. Cultural diversity and values may influence the
political agenda and policy making.
3. Case Study
3.1. Historical context:

Russia and Ukraine used to be in the Soviet Union before the dissolution. This shared
history has left a lasting impact on their political institutions, economic structures, and cultural
ties.
The Russo-Ukrainian War is an ongoing international conflict between Russia and
Ukraine, which began in February 2014. Following Ukraine's Revolution of Dignity, Russia
annexed Crimea from Ukraine and supported pro-Russian separatists fighting the Ukrainian
military in the Donbas war.
Recently, Russia invaded Ukraine on February 24, 2022, escalating the previous Russo-
Ukrainian War. The invasion was the most devastating attack on a European country since World
World II. It is estimated that tens of thousands of Ukrainian civilians and hundreds of thousands
of military personnel were killed.
3.2. Analysis of the relationship between economics, culture and politics
From the past, due to the great similarity in the economic characteristics, mode of
production and geographical location, the two country's political regime was greatly affected and
took part in the same Soviet Union. This is how economics influences politics. When the Soviet
Union was established, it affected the economies denoted by the form of production (cooperative
and collective-farm property).
As changes in the political environment begin to occur, specifically with the corruption of
the Soviet Union, the economics of the two countries become independent from each other
theoretically. However, the long history of being in the Soviet Union has made certain economic
relationships that can not be abolished such as energy dependency (gas trade and pipelines),
import/export dynamics, investments or labor migrations.
Furthermore, there is a conflict in the culture and political mindset between the 2 countries.
Regardings the national identity and patriotism, Ukraine has defined itself as an independent
country, which means that the people have a strong sense of Ukrainian national identity and
patriotism. Cultural symbols, historical narratives, and expressions of national pride have played
a role in the resistance against external influence from Russian. However, the Russian government
often emphasizes historical ties and the shared cultural heritage between the 2 countries and they
cannot simply be separated from each other.
Now, with the difference in the political governance between the 2 countries and the desire
for more economic benefits, they have escalated the tension in trade that started in 2014, which
led to the war in both the political and economic environment of the two countries and the world.
1. American Economic Association. (n.d.). Retrieved from
https://www.aeaweb.org/resources/students/what-is-economics
2. politics. (2023, October 18). Retrieved from
https://dictionary.cambridge.org/dictionary/english/politics#google_vignette
3. Culture definition. (n.d.). Retrieved from https://people.tamu.edu/~i-
choudhury/culture.html
25/10/2023
1. REQUIREMENT FOR MANAGERS
1. 1. Definition of a manager.
A manager is an individual who is responsible for planning, directing, coordinating, and
overseeing tasks and operations within an organization or department. They are accountable for
ensuring that the tasks are completed efficiently and effectively.
1.2. The importance of having a manager.
• Helps achieve company’s goals: Managers help to achieve the organization’s goals.
Managers set the vision and strategy of an organization and manage resources and people
in order to successfully reach those goals.
• Ensure smooth operation of daily procedures: Without a manager, we might find that
there is no one accountable for ensuring everyone is pushing in the same direction.
Managers will ensure all staff are working towards a common goal and are following a
clear set of standard operating procedures.
• Optimum utilization of resources: Managers are responsible for the allocation of
resources within an organization. The ability to identify, allocate and manage resources
efficiently is key to a successful business.
• Set The Tone Of The Workplace and act as a motivation for staff: A manager is
necessary for ensuring a workplace retains a professional, productive and collegiate tone.
One of the most fulfilling aspects of being a manager is being able to mentor your staff. A
manager acts as a leader whose job is to get the best out of each staff member.
2. Distinguish between the manager's job and that of a member.
Manager Staff
A manager’s primary challenge is to solve A staff’s primary challenge is to

problems creatively. complete assigned tasks effectively
and within stipulated deadlines.
Manager Staff
1. Planning: Involves setting objectives and 1. Execution:Carrying out tasks and

determining a course of action for achieving those activities assigned by the manager.
objectives.
• Strategic planning: involves analyzing SWOT 2. Feedback: Providing valuable input
of the organization, and then determining how and information to the manager
to position the organization to compete regarding task progress or any
effectively in their environment. challenges encountered.
• Tactical planning: Intermediate-range (one to
three years) planning that is designed to develop 3. Collaboration: Working with other
relatively concrete and specific means to team members to ensure that the task is
implement the strategic plan. completed effectively and efficiently.
• Operational planning: Short-range (less than a
year) planning that is designed to develop 4. Skill Development: Continually
specific action steps that support the strategic improving and honing skills necessary
and tactical plans. for their specific role or tasks.
2. Organizing: Developing an organizational
structure and allocating human resources to ensure the 5. Adherence: Following guidelines,
achievement of objectives. It involves: procedures, and standards set by the
• Job design: how best to design individual jobs organization and the manager
to most effectively use human resources
• Job enrichment and teamwork: strike a
balance between the need for worker
specialization and the need for workers to have
jobs that entail variety and autonomy
3. Leading: involves the social and informal sources
of influence that you use to inspire action taken by
others. Managers must first understand their
subordinates’ personalities, values, attitudes, and
emotions.
Manager Staff
4. Controlling: Ensuring that performance does not

deviate from standards. Controlling consists of three
steps:
• Establishing performance standards
• Comparing actual performance against
standards
• Taking corrective action when necessary.
3. Requirements for a manager
From the above comparison, we can see that not everyone can be a manager. Indeed, in order to
be a manager forces people to meet many of the requirements:
Requirements for Planning:
• An excellent knowledge of Industry: One of the most critical qualifications for a
manager is that of knowledge of the industry. Understanding the best practices in a business
and having a good grasp of overall operations is key to effectively setting goal and vision
for the organization
• Strategic Thinking: This involves seeing the bigger picture, understanding how different
parts of the organization interact, and anticipating future challenges and opportunities.
• SMART Goal Setting: Goals should be Specific, Measurable, Achievable, Relevant, and
Time-bound. This framework helps in creating clear and actionable goals.
• Risk Management: Ability to assess and mitigate risks that might impact the achievement
of goals.
Requirements for Organizing:
• Delegation Skills: The ability to delegate tasks appropriately, considering the skills and
capabilities of team members, is crucial for effective organization.
• Flexibility and Adaptability: The ability to adapt to changes and reorganize resources
and teams as needed is critical in a dynamic business environment.
• Resource Management: This includes understanding and managing physical, financial,
and human resources effectively.
• Technological Proficiency: Familiarity with relevant technologies and tools that can aid
in organization, such as project management software, is increasingly important.
Requirements for Leading:
• Communication Skills: Effective leaders must communicate clearly, persuasively, and
inspire confidence. This includes listening actively and communicating with empathy.
• Emotional Intelligence: Understanding and managing one’s own emotions and those of
others is crucial for building strong relationships and handling challenging situations.
• Motivational Skills: Leaders inspire and motivate their team members, fostering a sense
of purpose and enthusiasm for their work.
• Conflict Resolution: Leaders should be skilled at identifying conflicts, understanding the
underlying issues, and facilitating resolutions.enthusiasm for their work.
Requirements for Controlling:
• Performance Management: Setting performance standards, evaluating employee
performance, and providing constructive feedback.
• Balanced Approach: Striking the right balance between control and autonomy, allowing
team members enough freedom to be innovative and take initiative.
• Process Improvement: Identifying opportunities for improving processes and systems to
enhance efficiency and effectiveness.
30/10/2023
REQUIREMENT: RESEARCH FOR PRESENTATION
THEORY X AND Y
Key Points
• The concept of Theory X and Theory Y was developed by social psychologist Douglas
McGregor. It describes two contrasting sets of assumptions that managers make about their
people:
• Theory X – People dislike work, have little ambition, and are unwilling to take
responsibility. Managers with this assumption motivate their people using a rigid "carrot
and stick" approach, which rewards good performance and punishes poor performance.
• Theory Y – People are self-motivated and enjoy the challenge of work. Managers with this
assumption have a more collaborative relationship with their people, and motivate them by
allowing them to work on their own initiative, giving them responsibility, and empowering
them to make decisions.
Application
• The application of X or Y theory can be diverse based on the characteristics of the job, the
personality and attitude of the employee toward their tasks.
• For instance, if your work is repetitive, theory of X may be preferred as it offers motivation
for the employee through reward or punishment which is a great call for action for them.
• However, if you focus on the quality of the final product which is creative, through
breaking, the autonomy should be given for the employee to allow more space for
teamwork and innovation.
Contributions
Theory X
• Some employees thrive on an authoritative management style
• Focus on achieving the company goals
• No room for ambiguity, which makes roles and responsibilities clear
Theory Y
• Much more appealing management style
• Gives employees freedom and responsibility, which allows them to perform better
• Encourages teamwork, development and creative problem solving
Limitations
Disadvantages of Theory X
• Some employees do not work well under such strict enforcement
• Not everyone is motivated by financial gain, so they might not make much of an effort to
achieve more
• Can be detrimental to employee learning and development
Disadvantages of Theory Y
• Not everyone will be comfortable with undefined working boundaries
• It would be easy to abuse the freedom and trust
• Can be harder to measure success, as there is less focus on quantifiable metrics.
MASLOW’S HIERARCHY
I. Definition
Maslow (1943-1954) proposed a hierarchy of human needs, with physiological (survival)
needs at the bottom and more creative and intellectually oriented self-actualization' demands at the
top.
Maslow stated that survival requirements must be met before an individual can satisfy
higher wants. Because of the interpersonal and environmental hurdles that always irritate us, the
higher up the hierarchy we go, the more difficult it is to meet the requirements connected with that
stage.
The hierarchy includes 5 stages of needs as below:
Physical needs: basic factors for the survival of human
Example: food, water, shelter,...
Safety needs: the things that ensure the safety of human beings. They can come from an
individual, family or community.
Example: Stable income, safe living/working environment, protection from abuse,...
Needs for love and belongings: Love and belonging requirements include a sense of
connection to people, belonging to a group, and having secure relationships
Examples: Friendships, family relationships, feeling accepted by the loved ones
Esteem need: Esteem requires confidence, strength, self-belief, personal and social
acceptability, and others' respect. These desires are shown as one of the critical steps in obtaining
contentment or self-actualization.
Self-actualization: The highest need in Maslow's hierarchy is self-actualization, which
includes knowing oneself, understanding one's full potential, and achieving it.
II. Contribution
Understanding and applying Maslow's hierarchy of need would provide your first
information about your employees. Thus, knowing what they need and want can provide a basis
to bring out policy to increase motivation and engagement for employees by:
Provide basic needs (physical and safety needs) for employees to ensure the stable working
capacity.
The application of Maslow needs hierarchy will provide different information according to
the context and career stages of employees. For example, for the very first stage of a career,
employees may need the physical and safety needs. However, in the mid-stage, they may require
love and belonging such as good relationships with colleagues. For the peak stage, they may want
self-esteem with recognition from other people.
III. Limitation
Sometimes the needs of employees do not strictly follow the hierarchy of Maslow, one
person can have several needs at one time, and this varies from person to person.
It does not cover the difference in the backgrounds of different people such as: culture, social, etc.
EARLY ADOPTERS
I. OVERVIEW
Four people stand out as early advocates of the OB approach. These include Robert Owen,
Hugo Munsterberg, Mary Parker Follett, and Chester Barnard.
1. Robert Owen, a successful Scottish businessman, proposed a utopian workplace.
2. Hugo Munsterberg created the field of industrial psychology—the scientific study of
individuals at work to maximize their productivity and adjustment.
3. Mary Parker Follett was a social philosopher who thought the manager’s job was to
harmonize and coordinate group efforts.
4. Chester Barnard, president of New Jersey Bell Telephone Company, saw organizations as
social systems that required human cooperation.
• He believed that managers’ major roles were to communicate and stimulate
subordinates to high levels of effort.
• He also introduced the idea that managers have to examine the environment and
then adjust the organization to maintain a state of equilibrium.
II. DETAIL
1. Robert Owen
Though Owen is considered to be paternalistic in his view, his contribution is of
considerable significance in the theories of Motivation. During the early years of the nineteenth
century, Owen’s textile mill at New Lanark in Scotland was the scene of some novel ways of
treating people.
His view was that people were similar to machines. A machine that is looked after properly,
cared for and maintained well, performs efficiently, reliably and lastingly, similarly people are
likely to be more efficient if they are taken care of. Robert Owen practiced what he preached and
introduced such things as employee housing and company shops. His ideas on this and other
matters were considered to be too revolutionary for that time.
2. Hugo Munsterberg
Hugo Munsterberg (1863 - 1916) is considered to be the “father of industrial psychology” and
is regarded by students of psychology as an important figure as Frederick Taylor is by students of
management. Munsterberg attempted to develop practical applications of psychology. He argued
that psychologists could help industry in three major areas:
• Finding ways to identify individuals best suited to particular jobs.
• Identifying the psychological conditions for optimum efficiency.
• Finding ways to influence individual behavior to be congruent with management’s
objectives
3. Mary Parker Follett (1868-1933)
Mary Parker Follett brought to management the perspectives of political science and social
work. She identified:
• The importance of the functioning of groups, not just individuals, in organization.
• The principle of “power with” rather than “Power over” in management employee
relations.
• Conflict resolution through integration, i.e., finding a solution to a conflict that would
satisfy both parties.
• The achievement of integrative unity, whereby the organization operates as a functional
whole, with the various interrelated parts working together effectively to achieve
organizational goals.
4. Chester Barnard
Barnard (1938) argued that “willingness of persons to contribute efforts to the
cooperative system is indispensable” (p. 84). Such willingness to contribute may fluctuate
within and among individuals and requires commitment and cooperation between co-workers
to achieve a common goal, even if the organization is informal. The supportive workplace
environment that allows such cooperation would be termed years later by McGregor's Theory Y.
Keeping cooperative spirit can be achieved by management by offering objective incentives
and by using persuasion to change people’s minds (Wren & Greenwood, 1998). The premise is
that employees will contribute if they feel that their personal goals align with those of the company.
The effectiveness of an organization, according to Barnard, depends on the ability of the

organization to satisfy the needs of the individuals in the organization and provide them with
opportunities for cooperation. Organizational failure, thus, is caused by not providing such
opportunities.
Barnard’s revolutionary approach was very different from the Scientific Management
approach common during that time, and it had a strong influence on emerging behavioral
theorists in the decades that followed. Organ et al. (2006) sees the “willingness to contribute”
discussed by Barnard as a determinant of Organizational Citizenship Behavior (OCB), which
they define as “individual behavior that is discretionary, not directly or explicitly recognized by
the formal reward system, and in the aggregate promotes the efficient and effective functioning of
the organization” (p. 3). This willingness is what allows organizations to be more than the sum
of its parts or individual jobs, which is a classical Gestalt concept.
06/11/2023
1. REQUIREMENT 1
1. Using BEA analysis models, what external components might be most important for
managers in movie theater chains to know about? Why?
Using BEA Analysis Model, we divided into 2 more factors as below:
DIRECT FACTOR
a. Customer
Will consumers choose convenience over quality and use mobile devices such as iPads?
Will they trade some quality for convenience and watch at home on surround-sound, flat-screen,
high-definition home theater systems? Or will they go to a movie theater with wide screens, high-
quality sound systems, and the social experience of being with other moviegoers and enjoy the
highest-fidelity experience- even with the inconveniences?
→ Trade-off considerations: Managers should notice technology investments, pricing strategies,
and customer engagement, ensuring movie theaters remain attractive and competitive in a
landscape where convenience and quality are both significant considerations for consumers.
b. Competitor
The number of movie screens in the United States totals a little more than 39,000. Together,
the four largest movie theater chains in the United States have a little over 19,200 screens--and a
lot of seats to fill. The largest, Regal Entertainment Group (based in Knoxville, Tennessee), has
more than 7,300 screens. AMC Entertainment (based in Kansas City, Missouri) has almost 5,000
screens. The other two major competitors are Cinemark (based in Plano, Texas--about 4,400
screens) and Carmike Cinemas (based in Columbus, Georgia--almost 2,500 screens).
→ The number of movie screens: Managers should have strategic acumen to address
competition, market dynamics, and revenue challenges effectively.
INDIRECT FACTOR
According to the case, what external trends do managers at the movie theater chains have to
deal with?
One factor managers wrestle with is the uncertainty over how people want their movies
delivered. Home theater systems are becoming a threat because they offer acceptable quality and
affordable prices.
Another factor managers need to wrestle with is the impression consumers have of the
movie-going experience. A consumer lifestyle poll showed that the major dislike about going to
the movies was the cost, a drawback cited by 36% of the respondents. Other factors noted included
the noise, uncomfortable seats, the inconvenience, the crowds, and too many
previews/commercials before the movie.
Secondly, the growth of entertainment streamed online continues to be double-digit. The

biggest threat so far has been Youtube, but now Amazon and Netflix are flexing their movie
muscles as well. To counter that threat, industry executives have asked for filtering mechanisms
to keep unlawful material off these sites and develop licensing arrangements to keep unlawful
materials off these sites.
2. How do you think these trends might constrain decisions made by managers at the
movie theater chains?
The rise in popularity of affordable home theater systems, providing satisfactory quality,
poses a challenge for traditional cinemas. To counteract this, managers must prioritize enhancing
the movie-going experience by introducing unique features, advanced technology, and luxury
amenities. Simultaneously, negative consumer perceptions, especially regarding the expenses
and inconveniences associated with watching movies in theaters, create a managerial dilemma.
Resolving these issues involves implementing strategic pricing adjustments and an overall
improvement in customer experience, encompassing aspects like comfort, noise reduction, and
convenience. Furthermore, the substantial growth of online streaming platforms like YouTube,
Amazon, and Netflix intensifies the competitive landscape. Managers must distinguish their
offerings, explore exclusive content strategies, and advocate for measures such as filtering out
unlawful material online to protect the industry's interests against formidable digital competitors.
3. What stakeholders do you think might be most important to movie theater chains?
What interests might these stakeholders have?
Movie theater chains have various stakeholders, each with different interests and concerns.
Here are some key stakeholders for movie theater chains and their respective interests:
• Customers:
• Interests: Customers are crucial stakeholders for movie theater chains. Their
interests include a comfortable and enjoyable movie-watching experience, a variety
of movie options, reasonable ticket prices, high-quality audio and visual
technology, and convenient locations.
• Investors/Shareholders:
• Interests: Investors and shareholders are primarily concerned with the financial
performance of the theater chain. They seek a return on their investment through
profitability, revenue growth, and potentially dividends. They may also be
interested in long-term sustainability and market share.
• Film Studios and Distributors:
• Interests: Movie studios and distributors are interested in a successful exhibition of
their films. They want theaters to attract large audiences, leading to higher box
office revenue. Negotiating fair terms for film distribution and marketing is also a
key concern.
• Suppliers:
• Interests: Suppliers of equipment, concessions, and other goods and services are
interested in maintaining positive relationships with theater chains. They want
consistent and timely payments, long-term contracts, and possibly exclusivity
agreements.
• Employees:
• Interests: Theater employees are concerned with fair wages, good working
conditions, job security, and opportunities for advancement. Staff morale and job
satisfaction contribute to the overall customer experience.
• Regulatory Authorities:
• Interests: Regulatory bodies are concerned with ensuring that the theater chains
comply with safety regulations, labor laws, and other legal requirements. They also
play a role in approving licenses and permits for the operation of theaters.
• Competitors:
• Interests: Competing theater chains have an interest in gaining a competitive edge
in terms of pricing, amenities, film selection, and marketing strategies.
Understanding the market and adapting to changing trends are crucial for success.
• Local Communities:
• Interests: Local communities have an interest in the economic and cultural
contributions of movie theaters. Theaters can attract foot traffic, boost local
businesses, and provide entertainment options, contributing to the overall quality
of life in the area.
• Technology Providers:
• Interests: Companies providing technological solutions, such as ticketing systems,
audiovisual equipment, and digital projection, are interested in maintaining
ongoing relationships with theater chains. They may also be invested in the
industry's technological advancements.
• Environmental Groups and Activists:
• Interests: With increasing awareness of environmental issues, these stakeholders
may be concerned with the ecological impact of theater operations, such as waste
management and energy consumption.
Effective management involves balancing the interests of these diverse stakeholders to
ensure the sustained success of the movie theater chain.
2. REQUIREMENT 2
a) Compute the contribution margin for the current year and the projected year, and the fixed
costs for the current year (Assume that fixed costs will remain constant in the projected year)
Sales per unit = 1.500.000/100.000 = $15
Contribution margin = Sales - Selling exp - DM - DL - Admin exp - MO = 1.500.000 -

250.000.40% - 511.000 - 290.000 - 270.000.20% - 350.000.70% = $300.000
Regarding projected contribution margin:
Unit sales increase by 10% next year ⇒ Project unit sales = 100.000 x 1,1 = 110.000 units
Contribution margin for projected year = $1.650.000 - $1.320.000 = $330.000
Fixed cost for current year: 30% MO + 60% Selling exp + 80% Admin exp = $471.000
b) Unit contribution margin = 15-12=$3
Unit contribution ratio = 3/15 = 0.2
BEP (units) = Fixed cost / Unit CM = $471.000/3= $157.000
BEP (sales dollars) = Fixed cost / Unit contribution ratio= $471.000/0.2 = $2.355.000
c) The required sale for the company to meet the target sale:
Required Sale= (Fixed cost + Target Net Income)/ Contribution margin ratio
= (471.000 + 200.000)/(Contribution Margin per unit/ Selling price per unit)
= 671.000/(3/15)= 3.355.000
d) Sale at break-even point
Sale = Fixed cost/ CM ratio
= 471.000/(3/15)
= 2.355.000
Difference between sales at break-even point and required sale
3.355.000-2.355.000=1.000.000
The percentage at which the sale can fall before it operates at loss
1.000.000/3.355.000 = 29.8%
The safety ratio is 29.8%
e)
⇒ The breakeven point has been increased
15/11/2023
1. REQUIREMENT 1: COST ESTIMATION

Equation: y = 21.73 + 12.32*x
Fixed maintenance cost: 21.73 (thousand)
Variable maintenance cost: 12.32 (thousand)
2. The maintenance cost for producing 44000 units:

y = 21.73 + 12.32*44 = 563.81
Besides inflation, there are some doubts concerning the prediction:
- Be affected by outliers/noise
- Require linear relationships of the 2 variables
- Neglect other factors, such as diminishing returns.
2. REQUIREMENT 2: CVP
Total Per unit Unit sold
Sales $2,500,000 $5 500,000
Variable Cost $1,700,000
CM $800,000
Fixed Cost $900,000
a.
Cost per unit = $2,500,000 / 500,000 = $5
Contribution margin Ratio = $800,000 / $2,500,000 = 0.32
BEP in dollars = $900,000 / 0.32 = $2,812,500
b.
3.REQUIREMENT 3: CONSTRAINS
1. Production plan:
Contribution per hour: Contribution margin/Processing hour = (Selling price - Variable
Cost)/Processing hour
ĐK: 16<=20.5-x ⇒ x<=4.5
Constraint:
8.000*2+(6000+1000x)*2=30.000 => x=1 (thỏa mãn)
3. Discussion:
The biggest problem is that Product Y cannot compete with its competitors on the market due
to the fact that they use the penetration pricing which can offer lower price for the product therefore
it's hard for the manufacturer to compete with them. However, with value analysis (VA) there are
certain offers:
• Reducing costs (in all areas such as materials, parts and production), as well as improving
product function therefore it can increase revenue and profit per product.
• Enabling improvements to be made to the product in a variety of areas, such as design and
engineering, material selection, testing, manufacturing, assembly, shipping, installation,
use by the customer, service, maintenance and recycling.
• Increasing the prestige value of the product, therefore making ownership more desirable,
which should help product sales (and indeed the process of marketing and selling it).
To conclude, VA can bring out an all-round better-quality product that is easier and less costly
to produce, assemble, ship, install, use, service and recycle. The result is to reduce all associated
costs throughout the product lifecycle (importantly, including ownership costs for the customer).
This can help product Y become more competitive in both price and quality. Therefore, the
discontinuation of the production can be reconsidered.
4.REQUIREMENT 4: BUDGETING
29/11/2023
4/12/2023
1.REQUIREMENT 1
Standard Quantity = 2 units per Wonders Walkers x 10.000 Wonders Walkers = 20.000 units
Total Materials Variance = Actual unit*Actual price - Standard units*Standard Price
= 22.000*7,5 - 20.000*8=165.000 - 160.000 = 5.000
Materials price variance = Actual unit* actual price - actual unit*standard price
= 22.000*7,5 - 22.000*8 = -11.000
Materials quantity variance = Actual unit*standard price - Standard unit*standard price
= 22.000*8 - 20.000*8 = 16.000
2. REQUIREMENT 2
Financial performance of Vinamilk

To evaluate the significance of financial performance of Vinamilk, we've applied the Horizontal
and Vertical analysis for the year 2022 and 2021:
Horizontal analysis:
Vertical analysis:
6/12/2023
REQUIREMENT
Lambert, Inc. manufactures several types of accessories. For the year, the knit hats and
scarves line had sales of $400,000, variable expenses of $310,000, and fixed expenses of $120,000.
Therefore, the knit hats and scarves line had a net loss of $30,000. If Lambert eliminates the knit
hats and scarves line, $20,000 of fixed costs will remain.
Prepare an analysis showing whether the company should eliminate the knit hats and
scarves line.
Solution:
From this analysis, it is evident that eliminating the knit hats and scarves line would reduce
the net loss from $30,000 to $20,000. Therefore, from a financial perspective, it appears more
beneficial for Lambert, Inc. to eliminate this product line. This decision will decrease the
company's overall net loss by $10,000.
WHICH BRAND DOES
THIS MILK COME FROM?
WHICH BRAND DOES
THIS MILK COME FROM?
GROUP 08
ANALYSIS OF VINAMILK’S
ECONOMIC MANAGEMENT
IN THE DAIRY MARKET

AGENDA
01 COMPANY OVERVIEW
04 POLC ANALYSIS
02 EXTERNAL ENVIRONMENT
05 CONCLUSION
03 INTERNAL ENVIRONMENT 06 RECOMMENDATION

01.
COMPANY
OVERVIEW
COMPANY OVERVIEW
MISSION KEY HIGHLIGHTS

To become a world-grade brand in the food
47 years of history
and beverage industry, where people trust
nutrients and health products Brand value - 2.8 billion USD in 2022
VISION
60.075 billion VND consolidated total revenue
To deliver valuable nutrition to the community
with respect, love, and responsibility
PRODUCT PORTFOLIO
PRODUCT PORTFOLIO
12 product lines with more

than 200 products
Serves a wide range of
customers
Also expanded into non-
dairy products
02.
EXTERNAL
ENVIRONMENT
PESTEL ANALYSIS
E T L
Growing purchasing power Internationally standardized Vinamilk must follow rules
Heightened consumer production technology such as food safety or
demand Highest standards in food health
safety and quality
P S E
Political stability Rising health Favorable geographical
Favorable policies consciousness features and climate
Vietnam is a party to A shift towards increased Some regions provide a
various trade agreements demand in rural areas diverse food supply
BARGAINING POWER BARGAINING POWER
PORTER'S OF SUPPLIERS OF BUYERS
Low Moderate high
FIVE FORCES Low dependence on Availability of distribution
foreign suppliers channels
ANALYSIS High level of backward
integration
High price-sensitive
Low product differentiation
THREATS OF THREATS OF
COMPETITIVE RIVALRY
SUBSTITUTION ENTRANTS
Moderate high Moderate high
Moderate
High number of competitors Raising trend for healthier
High initial cost
200 dairy producers product
Technology challenge
FrieslandCampina and TH Trend of non-dairy
Strict quality requirements
Food Chain products
03.
INTERNAL
ENVIRONMENT
Strategic
ORGANIZATIONAL Planning
IT Sales
STRUCTURE Manage, maintain

Develope and Develope and
execute sales execute sales
IT network, ensure
strategies, strategies,
The organizational structure of data security
managing the sales managing the sales
Vinamilk includes 10 departments force force
responsible for different functions.

The structure helps the company Marketing R&D Production
to work effectively but it is the
culture that can make us work Marketing strategies investigates the Ensures the
and campaigns, to invention and efficiency and
passionately.
promote company's quality of product
improvement of
products and brand.
products operation
Dairy
ORGANIZATIONAL Development
Supply Chain
STRUCTURE Focuses on the Procurement, logistics,

strategic inventory management,
The organizational structure of development of the and distribution of
dairy product line products
Vinamilk includes 10 departments
responsible for different functions.
HR, Admin
The structure helps the company Finance
& PR
to work effectively but it is the
culture that can make us work Human resources Oversees financial
passionately. policies and procedures, management, including

recruitment, training, accounting, budgeting,
and development planning, and analysis,
ORGANIZATIONAL
7 main dimensions
CULTURE
Innovation Aggressiveness
Surface Stability Outcome Orientation
People Orientation Detail Orientation.

Intermediate
Team Orientation
Foundation
VINAMILK’S APPLICATION OF
MANAGEMENT THEORIES
1 2 3
SCIENTIFIC ADMINISTRATIVE BUREAUCRATIC
APPROACH THEORY APPROACH
QUANTITATIVE QUALITY ORGANIZATIONAL SYSTEM

1 APPROACH MANAGEMENT BEHAVIOR 1 APPROACH
4 7
1 1
5 6
SCIENTIFIC MANAGEMENT
Vinamilk's organizational strategy aligns with Frederick

Winslow Taylor's scientific management principles
In 2021, the company conducted an impressive 597 training

courses with 25,536 sessions
➡️ This extensive training initiative signifies a scientific approach
to selecting and training workers.
➡️ Emphasizing efficiency, responsibility, and sustainability
ADMINISTRATIVE THEORY
Vinamilk also reflects the principles of Frank
and Lillian Gilbreth's theory, emphasizing
productivity through streamlined processes.
The Human Resources Division collaborates across
departments to fine-tune job evaluation criteria
100% of employees and managers to regular
performance assessments.
➡️ Focus on optimizing work efficiency

BUREAUCRATIC PRINCIPLES
Vinamilk's adherence to regulations and structured efficiency indicates the

integration of Weberian bureaucracy in management practices.
COMPLIANCE SUSTAINABILITY
CONTROL SYSTEM STRUCTURE
Vinamilk reinforces its bureaucratic Defined roles aligns with Weber's
approach through policies like Codes principles of efficiency, illustrated
of Conduct and Anti-fraud measures by the Board of Directors Strategy

Subcommittee
QUANTITATIVE
APPROACH
Use Statistics, Optimization,

Information Models, Computer
simulations
Business problems are solved
by using statistical and machine
learning methods
QUALITY MANAGEMENT
Vinamilk's adherence to regulations and structured efficiency indicates the

integration of Weberian bureaucracy in management practices.
01 - Continuous improvement
02 - Focus on customers
03 - Accurate measurement
OPEN SYSTEM APPROACH
Open systems interact with environments by taking in inputs and
transforming them into outputs that are distributed into environments
Due to new market trends, changes

in customer insights and strategies
of competitors, Vinamilk decided
to reposition itself to align with
the new generation of consumers.
BEHAVIORAL APPROACH
Vinamilk understands organizational behavior which places people as the most
important asset of an organization
MOSCOW UNIVERSITY OF APPLIED

BIOTECHNOLOGY
Vinamilk highly value 5 factors crucial
to boosting employees’ motivation:
(1) Self-recognition
(2) Company Relationship
(3) Working Environment
(4) Job Characteristics
(5) Salary & Bonus
04.
POLC
ANALYSIS
PLANNING
PRODUCTIVITY
RESOURCE
OPTIMIZATION
GOAL
ACHIEVEMENT COOPERATION
At Vinamilk, their are cooperation between strategic and operational planning
STRATEGIC
Outlines the
overarching vision 5 YEARS
STRATEGIES
➡️ We are going to examine
OPERATION
the period from 2017 - 2021
Effective execution,
harmonizing long-term
objectives with day-to-day
activities
GOAL
SETTING
QUALITATIVE
Innovation
Leading position
Product segmentation Vinamilk aspires to be a
Leading in Southeast Asia
market leader in Vietnam
and break into the Top 30
QUANTITATIVE
global dairy companies.
Sales target
3.3 BILLION USD
Average market share growth
ORGANIZING
Organizations are thus increasingly focused on selecting the most
effective organizational structure overall and for each department,
aiming to maximize work efficiency and benefits. Key factors
influencing this structural choice include Strategy, Technology, and
Environmental Uncertainty.
Environmental
Strategy Technology
Uncertainty
Vinamilk focuses on Vinamilk emphasizes Vinamilk emphasizes strict

product innovation, market technology updates and quality management, consistency, and
expansion, and clear control, supervised by expert effective communication of its
customer communication. teams and human resources organizational values.
A mechanistic structure emerges as the best fit for Vinamilk. This structure suits the company's
needs for efficiency, consistency, and control, given its large scale and stable market.
Work Specialization Departmentalization Chain of Command Span of control Centralization Formalization
High work specialization and rigid Clear chain of command and narrow
departmentalization span of control
Vinamilk's management structure
10,000 staff members spread across the

country from North to South
Shareholders Meeting
working in 10 functional departments
Each department has its unique function, and every

member within these departments handles tasks Board of Supervisory
suited to their abilities and aspirations CEO
Directors Board
LEADING LEADERSHIP
FUNCTION THEORIES
Vinamilk believes effective leadership involves traits and behaviors
CODE OF CONDUCT (2010) is

applicable to the Board of
Directors, Board of Management,
and all employees.
LEADING MANAGERIAL
FUNCTION GRID
Vinamilk strives to reach a 9,9 style, indicating strong care for both
output and people.
OUTPUT HUMAN
Vinamilk's automatic production line,
Talent development and cultivation is a
overseen by diligent staff, relies on
"key card" for Vinamilk to ensure quality
uninterrupted processes to maintain the
human resources
high quality of their products.
➡️ One of the top 5 Best Managed Firms ➡️ One of the world's top 30 dairy
companies
in Large Capital Group category
LEADING CHARISMATIC
FUNCTION VISIONARY
Vinamilk inspires teams through vision and charisma, contributing to
consistent growth in stable markets.
The 15-year success of the School Milk highlights

the company's commitment to community &
sustainability.
➡️ "Outstanding and Sustainable Asian Company
2021" award
➡️ "Most Community-Oriented Company in Asia"
LEADING
FUNCTION
Hersey and Blanchard's
Situational Leadership Theory
Vinamilk focuses on the Selling Vinamilk commits to health protection and

approach. provides a safe working environment and
➡️ The top employer in the benefits during the Covid-19
FMCG industry ➡️ Positive business results
CONTROL QUALITATIVE
FUNCTION TARGET
36TH LARGEST NO. 1 DAIRY BRAND

global dairy company in sales in Vietnam for 8 consecutive
for 2021 years
CONTROL FUNCTION
Vinamilk introduced 90+ products (2017-2021),

LEADING aligning with diversification and 40 years of dairy
INNOVATION expertise for a strong urban-rural consumer appeal.
Vinamilk excels in urban markets with premium

MARKET products, achieving sustained growth, while
SEGMENTATION expanding popular lines for rural coverage.
Vinamilk's strategy to exploit untapped potential in

1ST POSITION IN rural areas resulted in a revenue of 61.012 trillion VND
VIETNAM (2021), highlighting effective market penetration.
HIGHEST ADDED VALUE DAIRY
COMPANY IN SOUTHEAST ASIA
Vinamilk leads in Southeast Asia with the Green Farm Ecosystem,
promoting eco-friendly practices and regional value creation.
Vinamilk's collaboration with Vilico showcases M&A readiness,
contributing to vertical integration and aligning with the
development strategy's partnership goals.
Notable international revenue growth, key exports to China, and a
joint venture in the Philippines highlight Vinamilk's success in
tapping into global markets.
Vinamilk's brand commitment is evident through initiatives like
COVID-19 support, collaboration with the Vietnam High-Rise Milk
Fund, and global CSR recognition.
CONTROL QUANTITATIVE
FUNCTION TARGET
61,012 BILLION 0.57% AVG ANNUAL

VND IN 2021 GROWTH SHARE
Falling short of the target Not reaching the targeted 1%
revenue of 80,000 billion VND average annual growth share
FINANCIAL
PERFORMANCE
REVENUE
Vinamilk demonstrated robust financial
performance, with total revenue steadily
increasing from 51.135 trillion VND to an
impressive 61.012 trillion VND
PROFIT
Pre-tax profit remained stable, reaching
12.922 trillion VND in 2021, while net
profit maintained a solid position at
10.633 trillion VND.
RETURN ON INVESTMENT
ROE showed a gradual decline from 44% in
2017 to 31% in 2021, and ROA) followed a
similar trend, decreasing from 32% to 21%.
Revenue and profit growth slowed down due to market saturation, higher input
costs, and the impact of the Covid-19, compared to the 2012-2017 period.
05. CONCLUSION
01.
02.
EXTERNAL ENVIRONMENT
CONCLUSION
INTERNAL ENVIRONMENT
Macro environment: Micro environment:
Internal Environment are well Stable politics + promising
02 -economics
POLC Strong competitive
Tropical environment for developing its advantages
structured for work and employee
02 - POLC own supply Integration of supply chain
motivation
Challenge for first-movers to rural areas Intense competition
Organizational Structure: 10
departments responsible for
different functions
03.
02 - POLC
Organizational Culture: Attention to POLC ANALYSIS
Detail and People Orientation
Planning phase: a comprehensive development strategy every five years
Vinamilk’s application of 4
Organizing phase: work specialization and departmentalization
management approaches
Leading phase: prioritizes human development and inspiration
Controlling phase: continuous 5-year feedback loop ensures adaptability
Communication Challenges
06. OUR & Reduced Creativity
RECOMMENDATION Encourage cross-functional
collaboration
Form cross-functional task forces
Intense Competition Implement tools like Co-working
spaces and Slack
Innovate in nutrition and flavors
Renewal through latest scientific
achievements Slow Responses to
Thorough competitor analysis
Market Changes
Introduce agile decision-making
processes
Adapting to New Trends
Decentralize decision-making
Proactive approach to market Establish a centralized information hub
trends
Expansion into new segments and
product diversification Managing Diminishing
Invest in comprehensive market
Growth
research
Diversify sources for milk powder,
partner with local suppliers
Identify alternative suppliers,
contingency plans for material
Seek market diversification
THANK YOU !!!
Reference
Bui T. (2021). CHƯƠNG 2 Phân tích chiế n lược nhân sự Vinamilk. Retrieved from:
https://www.academia.edu/50727230/CH%C6%AF%C6%A0NG_2_Ph%C3%A2n_t%C3%ADch_chi%E1%BA%BFn_l%C6%B0%E1%BB%
A3c_nh%C3%A2n_s%E1%BB%B1_Vinamilk
Vinamilk. (n.d.). Vinamilk business strategy. Retrieved from: https://www.vinamilk.com.vn/en/development-strategy
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file/en/THE%20BOARD%20OF%20MANAGEMENT%E2%80%99S%20REPORT.pdf
Vinamilk.(2022). Vinamilk Annual Report . Retrieved from: https://www.vinamilk.com.vn/bao-cao-thuong-nien/bao-
cao/2022/download-file/Vinamilk%20Annual%20Report%202022.pdf
Vinamilk (2023). Thuyế t trình lợi nhuận giai đoạn tháng 9 kế t thúc ngày 30/9/2023. Retrieved from:
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Reference
Vinamilk (2021). Sustainable development report 2021. Retrieved from:
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41ae55e12ed75bb850882ef4ed011f4daca3a27544f0298e20a6ec764b5208a8.pdf
Sài Gòn Online (2020). Ngành sữa chưa lo cạnh tranh với hàng ngoại. Retrieved from: https://www.sggp.org.vn/nganh-sua-chua-lo-
canh-tranh-voi-hang-ngoai-post574126.html
Hoang Ha (2023). Lạm phát năm 2023 có thể kiểm soát ở mức 3-3,5%. Monetary Fiance Market Journal. Retrieved from:
https://thitruongtaichinhtiente.vn/lam-phat-nam-2023-co-the-kiem-soat-o-muc-3-3-5-50202.html
Vinamilk (2023). New Production Technology. Retrieved from: https://www.vinamilk.com.vn/vi/cai-tien-doi-moi/cong-nghe-san-xuat-
moi
General Statistics Office (2022). Infographic social-economic situation 4th quarter and 2022. Retrieved from:
https://www.gso.gov.vn/en/data-and-statistics/2022/12/infographic-social-economic-situation-4th-quarter-and-2022/
Reference
Research and Markets (2022). Research Report on Vietnam's Dairy Industry 2022-2031. Retrieved from:
https://www.researchandmarkets.com/reports/5639690/research-report-on-vietnams-dairy-industry-2022
Báo Nhân Dân điện tử (2022). Vinamilk sixth most valuable dairy brand in the world. Retrieved from: https://en.nhandan.vn/vinamilk-
sixth-most-valuable-dairy-brand-in-the-world-post119682.html
Kim Yế n (2022). Chuỗ i cung ứng của Vinamilk – Vinamilk Supply Chain. Egoexpress. Retrieved from: https://egoexpress.vn/chuoi-
cung-ung-cua-vinamilk/#Mot_cach_tong_quan
Báo Khánh Hòa (2017). Cooperation between Vinamilk and Khanh Hoa Sugar JSC. Retrieved from:
https://www.baokhanhhoa.vn/english/economics/201711/cooperation-between-vinamilk-and-khanh-hoa-sugar-jsc-8061464/
Statista (2019). Market share of leading dairy and cheese product brands in Vietnam in 2019. Retrieved from:
https://www.statista.com/statistics/1233461/vietnam-dairy-and-cheese-product-brands-market-share/
Cổng thông tin xúc tiế n đầ u tư Việt Nam (n.d.). Overview of Viet Nam’s Dairy Industry. Retrieved from:
https://investvietnam.gov.vn/en/nghanh.nghd/27/dairy-industry.html
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Vinamilk. (2017). (rep.). Vinamilk Annual Report 2017. Retrieved from
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T. (n.d.). Văn hóa doanh nghiệp Vinamilk - Sổ tay lãnh đạo - TOPPION. Văn Hóa Doanh Nghiệp Vinamilk - Sổ Tay Lãnh Đạo - TOPPION.
https://toppion.com.vn/so-tay-lanh-dao/van-hoa-doanh-nghiep-vinamilk.html
Vinamilk. (2017). (rep.). Vinamilk Annual Report 2017. Retrieved from
c31c7d599e81153429ac1aae5651da38c69725a442999c2eb2319e32a3abe5fb.pdf
Vinamilk. (2018). (rep.).Vinamilk Annual Report 2018. Retrieved from
ea4e37fe1db29419325178dd843588da6e8234bb730198a6aa961d741128712e.pdf
Vinamiklk.(2019). (rep.). Vinamilk Annual Report 2019. Retrieved from:
e5df6f54f1b460c71648e3b3974c13d41721ed54aaef4e256def7956f8cc7d38.pdf
Reference
Vinamilk.(2020).(rep.). Vinamilk Annual Report . Retrieved from:
f48f48ff7baf40d9af270083a736eaaf0f52a6c5873367d134b4c83f193b0677.pdf
Vinamilk. (2021). (rep.). Vinamilk Annual Report . Retrieved from:
6f22ffdd6ecd4ea5cc133b0046bc3085a10648db1369033c5dfe1daed93f04a7.pdf
Báo Sài Gòn Đầ u Tư Tài Chính. (2019). Retrieved from: https://dttc.sggp.org.vn/vnm-stock-may-not-have-been-victim-to-rumors-
post68679.html
Food Hotel Vietnam. (2022). Retrieved from: https://foodnhotelvietnam.com/2022/04/13/vinamilks-strange-move-low-revenue-
growth-but-drastically-cut-trillions-of-advertising-dollars-after-2-years/?lang=enpdf
CONTRIBUTION ASSESSMENT FORM
Member 1 2 3 4 5 6
1 100 98 99 98 98 99
2 98 100 98 100 98 100
3 100 99 99 100 100 99
4 100 100 98 99 99 99
5 100 99 100 100 100 99
6 100 99 98 100 98 99
Average 100 99 99 100 99 99
Note:
1: Lê Trần Khánh Ngọc 2112153110
2: Nguyễn Ngọc Đông Nghi 2112153105
3: Nguyễn Võ Chí Nguyên 2112153112
4: Nguyễn Phương Ngân 2112153104
5: Bùi Phương Nga 2112153101
6: Hà Anh Kiệt 2112153071

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FOREIGN TRADE UNIVERSITY HCMC CAMPUS

ANALYSIS OF VINAMILK’S ECONOMIC MANAGEMENT IN THE

Course code: DTUE301 - ML 191

HO CHI MINH CITY, DECEMBER 10, 2023

This report underscores Vinamilk's success in a favorable macro environment,

Ho Chi Minh, December 2023

LIST OF FIGURES ................................................................................... i

CHAPTER 1. COMPANY OVERVIEW ............................................... 1

1.1. Introduction to Vinamilk .................................................................. 1

1.2. Product Portfolio and Statistics ........................................................ 1

CHAPTER 2. EXTERNAL ENVIRONMENT ANALYSIS ................. 3

2.1. Macro-environment analysis ............................................................ 3

2.2. Micro-environment analysis ............................................................ 4

CHAPTER 3. INTERNAL ENVIRONMENT ANALYSIS .................. 6

3.1. The overall organization structure of Vinamilk and assumption-

3.2. Organizational culture of Vinamilk ................................................. 7

3.3. Vinamilk’s application of management theories ............................. 9

CHAPTER 4. VINAMILK’S PRODUCT MANAGEMENT

4.1. Planning function ........................................................................... 14

4.1.1. Quantitative target ................................................................... 15

4.1.2. Qualitative targets ................................................................... 15

4.2. Organizing function ....................................................................... 17

4.3. Leading function ............................................................................ 19

4.4. Controlling function ....................................................................... 21

CHAPTER 5. CONCLUSION ............................................................... 26

CHAPTER 6. RECOMMENDATION ................................................. 28

6.1. Recommendation on the external environment ............................. 28

Intense competition from foreign and domestic brands .................... 28

6.2. Recommendation on potential structural problems ....................... 28

6.3. Recommendation on managing declining growth ......................... 29

CHAPTER 1. COMPANY OVERVIEW

Vinamilk is a famous dairy player in Vietnam and worldwide thanks to its

The Vision of Vinamilk is to become a world-grade brand in the food and

1.2. Product Portfolio and Statistics

Figure 1.1. The product portfolio of Vinamilk

Source: Synthesized by the authors (2023)

CHAPTER 2. EXTERNAL ENVIRONMENT ANALYSIS

Regarding the social factor, a report conducted by Research and Markets on

2.2. Micro-environment analysis

CHAPTER 3. INTERNAL ENVIRONMENT ANALYSIS

Organization structure by department of Vinamilk

Source: Vinamilk (2023)

The IT department oversees the information technology strategy, including the

The Sales department is in charge of developing and executing sales strategies,

The Marketing department focuses on marketing strategies and campaigns, brand

The R&D (Research & Development) department mainly investigates in the

The production department manages the manufacturing processes, oversees

The dairy development department focuses on the strategic development of the

The HR (Human Resources), Admin & PR (Public Relations) department

The finance department oversees financial management, including accounting,

3.2. Organizational culture of Vinamilk

To thoroughly comprehend Vinamilk’s culture, the authors go through what has

Firstly, we analyze the surface of Vinamilk’s culture. These are tangible

culture spans security, reception, and management, emphasizing professionalism and

Secondly, investigating Vinamilk’s Intermediate Culture, this layer embodies

Thirdly, turning to Vinamilk’s foundational assumptions, this core layer shapes

In summary, the six ultimate Vinamilk’s culture are:

• When the event occurs, the first cause is me.

3.3. Vinamilk’s application of management theories

Firstly, Vinamilk's organizational strategy aligns with Frederick Winslow

Moreover, Vinamilk's Board of Directors oversees the Code of Conduct's

Regarding Max Weber's bureaucratic principles through its structured

Figure 3.1. Vinamilk’s compliance control system