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BUS 496 - Project 1 - Group 2
BUS 496 - Project 1 - Group 2
BUS 496 - Project 1 - Group 2
1. Comprehensive introduction.
2. Background of the company
3. External Analysis
4. Internal Analysis
5. Critical incidents that affected each company
6. Comparison strategies between two companies
7. Suggestion/Recommendation
8. Conclusion
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Comprehensive introduction.
In this project we will show information about Tuong An company and Vocarimex
Company which are the two biggest cooking oil companies in Viet Nam.
Furthermore to compare the internal and external factors of those companies
and compare the strategies between two companies.
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Background of the company
1. 1. Overview Tuong An Company
In 1997, Tuong An was established with a national security mission in the difficult
years of the country.
In the 1990s, many foreign cooking oil products joined the Vietnam Market and it
made a fierce competition in the cooking oil market.
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Background of the company
1. 2. Mission
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Background of the company
1. 3. History development
Before 1975, the forerunner of Tuong An was a small production facility called
Tuong An Enterprise owned by a Chinese person.
After 1975, the company was taken over by the state and changed its name to the
enterprise of industrial cooking oil management.
In July 1984, the State removed subsidies and assigned the right to take initiative
in production and business for units.
In 1991, Tuong An launched vegetable cooking oil and its sales number increased
dramatically.
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Background of the company
1. 5. Products:
Margarine Horeca
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1. 6. Achievments:
1985-1990: Overcoming the misery of the years after the liberation, Vietnamese family meals in this
period were cared for more and became more diverse.
By 1991, the first bottled vegetable oil Cooking Oil was born in the pride of Tuong An team
In 2003, Tuong An made a breakthrough in the vegetable oil industry in Vietnam when it
successfully researched the addition of micronutrients to products
In 1991, Tuong An launched vegetable cooking oil and its sales number increased dramatically.
In the 2000s, Tuong An has made great strides in technology, invested in expanding the factory to
meet market demand
From 2004 to present: Continuously conquering the hearts of consumers through the periods with
gold quality products, Tuong An brand has constantly risen with strategies and investments
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1. 7. Market Share
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Background of the company
2. 1. Overview Vocarimex
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Background of the company
2. 2. History development
1986 – Southern vegetable oil cooperation was established and operated under
the State management mechanism focusing the subsidy including 5 state-owned
factories.
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Background of the company
2. 2. History development
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Background of the company
2. 4. Product:
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Background of the company
2. 4. Product:
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Background of the company
2. 5. Achievements:
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External analysis
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INTERNAL ANALYSIS
VRIO:
Value · Traditional-valued brand
· Pioneer in integrating updated technology
· Great experience and brand recognition in buyer’s aspect
· Building trust and continual support to wholesalers & local distributors to extend the distribution channel
Organization · Pursuing the culture of recognition and stimulation of enthusiasm, consolidate and creativity
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INTERNAL ANALYSIS
COMPETITIVE ADVANTAGES - TUONG AN COOKING OIL
Being one of the leading companies in the vegetable oil industry in Vietnam in terms of volume and product category.
Tuong An also invests in research and development of products with high nutritional value for Vietnamese consumers.
Tuong An has created a breakthrough in the vegetable oil industry in Vietnam via adding micronutrients to cooking oil
products.
These are products such as: pure soybean oil rich in natural vitamins A and E, supplemented with Omega 3, 6, 9 good for
heart health; ViO cooking oil line for children supplemented with DHA; Season oil supplements vitamins A and D, good for
bones and joints, suitable for the needs of the elderly.
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INTERNAL ANALYSIS
COMPETITIVE ADVANTAGES - TUONG AN COOKING OIL
Being a company that initiates the trend of cooking oil products that protect the health and
nutrition of the community by encouraging people to replace animal fats with vegetable oils.
Vietnam's leading advanced technological equipment: automatic oil refining line, automatic bottle oil
extraction line according to European technology standards.
There is support from Kinh Do Group. Thus, increasingly improving its distribution system with more
than 200 distributors, over 100 industrial customers and 450,000 retail locations nationwide.
Tuong An has export contracts with many countries such as Japan, Taiwan, Philippines, Australia,
Hongkong, Middle East, Poland, Ukraine, etc.
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INTERNAL ANALYSIS
COMPETITIVE ADVANTAGES - VOCARIMEX COOKING OIL
Corporation budget for PR is huge. The company's PR budget is quite large. Vocarimex has carefully
selected ways to differentiate itself from its competitors.
Neptune 1: 1: 1 is a premium cooking oil produced from a mixture of rice oil, canola oil, soybean oil and
premium Olive oil which has been refined under modern technology and hygienic conditions. food
safety. Otherwise, they also provide Simply brand with different types of vegetable oils for
vegetarians.
They also developed different reasonable product price for different product brands which are
widely accepted by consumers.
With more than 13 years of experience in developing and distributing products, Vocarimex has
already had their distribution network throughout the country with more than 300 distributors and
retailers, industrial clients, 200 supermarkets and restaurants, education institutions 25
INTERNAL ANALYSIS
COMPETITIVE ADVANTAGES - VOCARIMEX COOKING OIL
Ensuring accuracy, speed and carefulness during delivery. The company chooses a joint stock transport company Quang
Ninh and other famous agents in the field of transport and export with strict on-time contracts and clear financial terms.
Vocarimex always ensures products are delivered on time, with the best quality and preservation when they reach
distributors and consumers.
Well trained agencies: The company regularly organizes customer conferences, periodically checks their agencies’
performance and organizes to guide agents about product features and best use.
Consulting service: The company has a team of consultants 8 hours/day at all branches and factories to resolve customer
complaints if any or problems caused by competitors and advise agents if they have any problems with the product.
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INTERNAL ANALYSIS
SWOT - STRENGTHS OF TƯỜNG AN
Tuong An is a familiar name associated with all generations of Vietnamese families during the past 40 years and is one of the
largest manufacturers and distributors of cooking oil in the domestic market.
November 2016 marked an important milestone for Tuong An when they officially joined KIDO Group (KDC).
In the 1980s and 1990s, when families still kept the habit of using animal fat to cook, Tuong An was the pioneer in calling for
people to stop using animal fat because of bad impacts to health. At the same time, to propagate to use vegetable oil as a
substitute in daily meals to ensure health.
Tuong An also invests in research and development of products with high nutritional value for Vietnamese consumers. Tuong
An has created a breakthrough in the vegetable oil industry in Vietnam through research on adding micronutrients to cooking
oil products.
Tuong An became a pioneer in investing in modern automatic machinery lines worth hundreds of billion VND, Vinh oil factory
and Phu My oil factory with tens of thousands of hectares can produce more than 800 tons of oil / day.
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INTERNAL ANALYSIS
Weaknesses for both Trường An and Vocarimex:
Supporting the government to expand and develop material zones in the country.
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INTERNAL ANALYSIS
Opportunities for both Trường An and Vocarimex:
Abundant labor force
Vietnam also plans to develop new varieties to meet the needs of the domestic vegetable oil industry. Accordingly,
it will expand the cultivated areas of crops such as soybeans, peanuts, sesame, copra, sunflower and rice bran.
Currently, the Ministry of Industry and Trade and the Ministry of Agriculture and Rural Development has
developed an overall plan and policy for the production of oilseed crops such as soybeans, peanuts, sesame ...
Accordingly, farmers are encouraged to use new varieties. , especially biotech varieties, for mass production in
order to fully satisfy domestic demand.
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INTERNAL ANALYSIS
Threats for both Trường An and Vocarimex:
Cooking oil prices fell due to the US-China trade war.
Cooking oil production technology is not too complicated, mainly mixing ingredients and selling them in bottles.
Therefore, businesses must invest heavily in advertising to sell goods.
The competitive pressure is still very fierce because cooking oil is a replaceable product, the price elasticity of
demand is high, so only a little price fluctuation is needed to lead to a change in consumer behavior.
Competitive pressure from the roadmap to reduce import tax on cooking oil to 0%
Raw material supply pressure. Increased energy costs.
In 2012 - 2013, although the inflation has improved, however, low credit growth leads to a decrease in social
purchasing power .
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INTERNAL ANALYSIS
Threats for both Trường An and Vocarimex:
The Ministry of Industry and Trade has made efforts to help Vietnamese cooking oil enterprises avoid direct
competition with foreign enterprises in the same industry by increasing the import tax on cooking oil so that
Vietnamese enterprises have time to accumulate resources.
However, the safeguard tariff on imported oil has ended since May 2017. This leads to the influx of imported
goods, causing pressure to compete with domestic companies.
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INTERNAL ANALYSIS
BCG Analysis
TUONG AN
Stars: Question Marks
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INTERNAL ANALYSIS
BCG Analysis:
VOCARIMEX
Stars: Question Marks
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Company Performance
Tuong An Company Vocarimex Company
The highlight of Truong An is that profitability ratios such For Vocarimex, net revenue reached 694 billion, down
as ROA and ROE are both significantly higher than the 35.21% over the same period in 2018, due to continued
industry average, showing that the company's assets competition between companies and the decline in oil
and capital are being used effectively. prices in the market.
The company's short-term solvency is guaranteed but is Vocarimex's gross profit in the second quarter of 2019
still lower than the industry average as the company is reached VND 6 billion, decreased 77% compared to the
currently using a fairly high level of financial leverage. same period in 2018 due to lower revenue and high cost
of inventory.
Tuong An with net revenue of VND 869 billion has
experienced a decrease of 14% compared to the same In the second quarter of 2019, Vocarimex achieved VND
period in 2018. 34 billion in pre-tax profit and profit margin from
operating activities reached 5% (equivalent to the same
Tuong An continues to implement the strategy of period in 2018).
reducing the sales volume of this segment when the
efficiency and profit margin have not been improved.
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V. Critical incidents that affected each company
Tuong An Company: The Cooking oil prices plummeted because of the US-China trade war.
On June 14 2019, KIDO Group Joint Stock Company (KDC) held the Annual General Meeting of
Shareholders.
Commenting on 2018, the representative of KDC said that the Fast Moving Consumer Goods market will
grow well with many prospects for all of the group's core industries. However, the reality market is not as
expected.
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V. Critical incidents that affected each company
In 2018, the changes of US trade policy and the recent US-China trade war impacted
many industries, including the cooking oil sector. The oil prices continued to fall and
lasted abnormally.
Specifically, the decline in price of the cooking oil industry from April 2018, the
average price is from 17,000-18,000 VND / kg up to 12,800 VND / kg.
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V. Critical incidents that affected each company
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VI. Comparison strategies between two
companies:
1. Tuong An’s objective strategy:
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VI. Comparison strategies between two
companies:
2. Vocarimex objective strategy:
● The President and also the Chief Executive Officer of Vocarimex reported that:
“With all efforts, the whole Vocarimex has focused on promoting internal
strengths, boosting production and consumption in the domestic market, actively
seeking new markets to increase exports, while tightening spending, investment
capital structure in order to enhance its position as a key economic group of the
vegetable oil industry in Vietnam ".
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VII. Recommendation for Future plans:
1. Tuong An Company:
● Product development strategy: finding the gaps in the market, with little or no
competition. To create such a market, a company must find the differentiation on
its products, because with the similar products of the competitors, the company
has to face a lot of competition.
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VIII. Conclusion:
Both businesses are developing very well, and they have sufficient plans to grow their
Vietnamese and international markets.
Trying to keep up with innovative environmentally concepts.
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