IUT de Toulon

Strategy
Applications
François Lacroux

Summary
Application #1 : History of Vietnam Airlines .......................................................................................... 1
Application #2 : TechComBank ................................................................................................................ 3
Application #3 : KSF ................................................................................................................................. 7
Application #4 : Strategic segmentation ................................................................................................. 7
Application #5 : BCG Matrix .................................................................................................................... 9
Application #6 : Barriers to entry .......................................................................................................... 10
Application #7 : External diagnosis ....................................................................................................... 10
Application #8 : Internal diagnosis ........................................................................................................ 14
Application #9 : strategic moves ........................................................................................................... 18

Application #1 : History of Vietnam Airlines

Strategy – Illustrations

[1]/[20]


QUESTION : Find some illustrations of unvarying strategies in the history of Vietnam Arilines
From The Old Days
History of Vietnam Airlines dates back to January 1956, when the Vietnam Civil Aviation Department
was established by the Government, marking the birth of the civil aviation industry in Vietnam. At
that time, the fleet was small with only five aircraft of IL-14, AN-2, Aero-45… which started to serve
domestic flights in September 1956.
The 1976 – 1980 period witnessed the beginning of the airline’s expansion and efficient operation in

Asian destinations of Laos, Cambodia and China (regular flights) and Thailand, the Philippines,
Malaysia and Singapore (charter services). At the end of this period, Vietnam Civil Aviation became a
member of the International Civil Aviation Organization (ICAO).
April 1993 was a major turning point when Vietnam Airlines was officially established as the
country’s national flag carrier. On the 27th May 1996, Vietnam Airlines Corporation was born with
the gathering of 20 aviation businesses and the airline itself.
Innovation Taking Place
On 20th October 2002, Vietnam Airlines introduced the new logo of the Golden Lotus and corporate
identity that symbolized its dramatic progress towards becoming a world-class airline. The launch
represented a complete repositioning and brand strategy of Vietnam Airlines, coupled with
significant improvements in its infrastructure, operations and fleet.
The delivery of its first own “state-of-the-art” B777 in 2003 also marked a true revolution in the
airline’s fleet modernization. Three years later, Vietnam Airlines became one of the most modern
fleets in the region.
World-class Airline
For 15 years of development with an average annual growth rate of over 10 percent (except 1997
when the Asian financial crisis broke out), the national flag carrier has marked an obvious advance to
become a major competitor in the Asian aviation market, owning a modern fleet of Airbus and
Boeing planes flown by well trained professionals.
Beginning with non-regular services between two domestic destinations, today Vietnam Airlines’
network extends to 20 cities throughout the country and 40 international destinations in the USA,
Europe, Australia and Asia (including code-share services).
In 2006, after being awarded the IATA Operational Safety Audit (IOSA) certificate, a strict safety
standard set by Aviation Quality Services (AQS), Vietnam Airlines joined the International Air
Transport Association (IATA) as an official member, affirming its international standard.
Moving Forward
Positioning its internationally recognized brand as a young and modern carrier, Vietnam Airlines
excelled further when - together with the Vietnam Aircraft Leasing Company of which Vietnam
Airlines was an initiator and founder - signing largest purchase orders of 12 Boeing B787s, 10 Airbus


Strategy – Illustrations

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A350-900, 20 Airbus A321 and 5 ATR72-500 aircraft in 2007. The airline is expected to reach 104 and
150 modern aircraft in 2015 and 2020, respectively, making solid steps integrating into the global
aviation industry as a truly regional carrier of choice, which is fully ingrained with Vietnamese
traditional culture.

Application #2 : TechComBank
QUESTION : Use this document to find the three dimensions of strategy, and to illustrate some of the
functions of strategy

Vision
Techcombank aspires to be the best bank and a leading business in Vietnam.
Missions
1. To be the preferred and most trusted financial partner of our customers, providing them with a full
range of financial products and services through a personalized/customer centric relationship.
2. To provide our employees with a great working environment where they have multiple
opportunities to develop, contribute and build a successful career
3. To offer our shareholders superior long term returns by executing a fast growth strategy while
enforcing rigorous corporate governance and risk management best practices
Core Values
1. Customer first. We treasure our customers and work hard to offer them the products and services
that best meet their needs
2. Innovation. We are good but can always be better therefore we never stop learning and improving
3. Team work. We can achieve our goals by trusting our colleagues and collaborating to deliver the
best to the bank
4. People development. We develop our people to achieve their best potential and rewards our best

performers
5. Accountability. When we commit to do something, we do whatever it takes to get things done

Strategy – Illustrations

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Board of directors

Milestones on the path of development
Vietnam Technological and Commercial Joint- stock Bank - Techcombank was established on September 27th,
1993 with the initial registered capital of VND 20 billion with the aim to become an efficient financial intermediary
bridging the savers with the investors in need of capital for business and economic development in the open-door
era.
The head office was at 24 Ly Thuong Kiet, Hanoi, Vietnam.
1995
The registered capital was increased to VND 51.495 billion. Parallel with this event, the Ho Chi Minh city branch
was established starting the process of fast expansion of Techcombank in the main urban areas.
1996
Thang Long branch and Nguyen Chi Thanh sub-branch were established in Hanoi, together with Thang Loi subbranch in Ho Chi Minh city. The Bank’s registered capital has increased to VND 70 billion.
1998
The head office was moved to Techcombank building at 15 Dao Duy Tu str., Hanoi, Vietnam. With the
establishment of Da Nang branch in the same year the branch network has covered all three main regions: the
North, Central provinces, and the South.
1999
Techcombank increased the registered capital to VND 80.020 Billion. The Sub-branch No 3. at Kham Thien str.
was founded.
2000
Thai Ha sub-branch in Hanoi was established.

2001
The registered capital was increased to VND 102.345 Billion. Signed a contract with a leading software supplier
Temenos Holding NV to implement new banking software GLOBUS over the network of Techcombank to meet
the growing demand from customers.
2002
A number of branches were established: Chuong Duong and Hoan Kiem in Hanoi, Hai Phong branch in Hai
Phong City, Thanh Khe in Da Nang and Tan Binh in Ho Chi Minh City. Techcombank becomes the joint stock
bank with the largest network in Hanoi. The network involves the Head Office, 8 branches and 4 sub-branches at
the larges cities in Vietnam.
The registered capital has increased to VND 104.435 billion.

Strategy – Illustrations

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Preparations are underway for an increase to VND 202 Billion in registered capital. Techcombank reassures its
role as a leading joint stock commercial bank in Vietnam.
2003
Leveraging on the Globus system and the Bank’s alliance with Vietcombank, Techcombank commenced
issuing F@stAccess card on 05 December 2003.
The Bank inaugurate the completion of deployment of the Globus system on the whole network on 16 December
2003. The Bank started the process of developing a new corporate identity.
Techcombank Cho lon was established. Registered capital has increased to VND 180 billion at 31 December
2004.
2004
Inaugurate the new identity of the Bank on 09 June 2004. Registered capital has increased to VND 234 billion at
30 June 2004, VND 252.2 billion on 2 August 2004, VND 262 billion on 20 September 2004 and VND 412.7 billion
on 30 November 2004. The number of branches increased from 15 branches to 25 by December 2004.
2005

Six new branches were established in Lao Cai, Hung Yen, Vinh Phuc and Bac Ninh, Nha Trang, Vung Tau in the
first half of this year. In addition, new transaction offices were opened including: Techcombank Phan Chu Trinh
(Da Nang), Techcombank Cau Kieu (Lao Cai), Techcombank Van Thanh, Techcombank Phu Tho, Techcombank
Nguyen Tat Thanh, Techcombank Quang Trung, Techcombank Truong Chinh (Ho Chi Minh), Techcombank Cua
Nam, Techcombank Hang Dau, Techcombank Kim Lien (Ha Noi).
21/07/2005, 28/09/2005, 28/10/2005: Raised registered capital to 453 billions dong, 498 billions dong and 555
billions dong, respectively
29/09/2005: Launched the new Switching and Card Management System of Compass Plus
2006
Receiving golden cup for “ a better society and stable development” given by Viet Nam General federation of
labor.
In June 2006: Call Centre & Hot line officially operated ( 24/7)
In August 2006: Moody’s, the world top ranking reputed organization has declared reputed ranking for
Techcombank, the first joint stock bank of Viet Nam ranked by Moody’s..
In August 2006: the annual shareholders meeting approved the plan for 2006-2010; Techcombank and Bao Viet
Insurance corporately proving Banc assurance.
In September 2006: Completing the account system with new products: multifunctional savings, period interests
paying savings.
On 15th December 2006: launching the international Techcombank Visa card
2007
Techcombank total asset up to 2.5 billion USD.
Becoming the joint stock bank with the second largest transaction network including 130 branches, TSO at the
end of 2007.
HSBC increases the sharing capital to 15 %, directly and sufficiently support Techcombank’s operation.
Profoundly transforming in structures with the establishment of corporate service department, department of credit
and risk management, completing structure of banking service and individual finance.
Is the blossoming year of card services with the total issued card number up to more than 200.000 cards for all
kinds.
The first and only bank approved the achievement in technological application and leading in market developing
measures.

Implementing the “secret customers” program, in order to access the service quality and attitude to customers
Launching many new products
Receiving award “Top Trade services 2007”- award given by Ministry of industry and Commerce for typical
enterprises, operating in trade services that Viet Nam committed to implement as joining WTO

Strategy – Illustrations

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2008
Receiving award of “ the most satisfied service in 2008” voted by readers of Sai Gon Tiep Thi magazines in
February 2008.
In March 2008: Launching Techcombank Visa Credit card.
In May 2008: Launching Cash Deposit machine( ADM)
Implementing many projects on technological modernization, connecting ATM system with strategic partner
HSBC, opening free Call Centre ( 24/7)
Opening Techcombank AMC ( asset management company) in 8th August 2008.
Receiving Golden Star Award 2008 given by young enterprises association in September 2008.
Increasing the property rate of HSBC to 20 % and raising chattered capital to 3.165 billion dong in September
2008.
In September 2008: Launching Techcombank Co-brand Visa card with Vietnam Airlines.
On 19th October 2008: Receiving award “ reputed securities trademarks and the top Joint stock company of
Vietnam” given by securities committee.
2009
- July/2009: The registered capital was increased to VND 4.337 billions
September/2009:
+ The registered capital was increased to VND 5.400 billions
+ Fund sponsoring contract for purchasing 16 A321 aircrafts with Vietnam Airlines was signed
+ Online saving products were introduced.

+ Reception of the “top 500 largest enterprises in Vietnam 2009” title, awarded by Vietnam report.
+ Reception of the “Global payment Excellence” Award, given by Citi Bank, Wachovia Bank and The Bank of New
York
+ Initiated the transformation strategy with the support from the world’s leading strategic consulting firm McKinsey
& Co.
2010
- Deployed a number of transformation initiatives in general, announced the bank’s Mission, Vision and Core
Values. Simultaneously, the bank implemented its business and management model restructuring and
transforming corporate culture.
- April/2010: Achieved the “International star for Leadership in Quality” award, given by Business Initiative
Directions
- May/2010: Received “The Vietnam values 2010” title
- June/2010: Received the “Global payment Excellence” Award, given by Citi Bank
- June/2010: Increased The registered capital to VND 6932 Billions
- July/2010: Received the “Best Bank in Vietnam 2010” award, given by Euro Money magazine
2011
- April/2011: Ranked in the “500 largest Vietnamese Enterprises in 2011” by the VNR 500 & received the “Credit
product award of the year” from the Vietnamese Financial Times
- From June/2011 to August/2011: Received 8 prestigious awards from a number of trusted international
organizations, including:
+ “The Best Bank in Vietnam”; “The Best Cash Management Bank in Vietnam” and “The Best Trade Bank in
Vietnam” awarded by Finance Asia magazine.
+ “The Best Bank in Vietnam”; “The Best Cash Management Bank in Vietnam” and “The Best Trade Bank in
Vietnam” awarded by Alpha South East Asia magazine.
+ “The Best FX provider in Vietnam” awarded by Asia money magazine
- December/2011: received the “Best domestic bank in Vietnam” from The Asset magazine

Strategy – Illustrations

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Application #3 : KSF
QUESTION : Find 3 to 4 KSF for restaurants (for tourists) in Hanoi. Describe them, and rank them (from
the most important to the less important)

Application #4 : Strategic segmentation
QUESTION : Use the list to identify the different SBUs of VietSovPetro

Divisions of VietSovPetro
Division
AUTOMOBILE
TRANSPORT DIVISION

Tasks
The precedent of Automobile transport division was technological
transport department was established on July 09, 1982. On the first days
of establishment, the Division only had some cars to serve for director,
some big transportation cars for cadre and workers, and other
transportation means had to rent from units outside the Joint-venture
enterprise. With the development of Joint-venture enterprise, the
demand of using transportation means has been increasing.

DRILLING & WORKOVER
DIVISION

Drilling & Workover Division (DWD) is a sub division of JV Vietsovpetro,
was established in june 2nd, 1983, has an international staff, they has
many experience for exploration and production drilling oil & gas wells.
DWD has skillful staffs at technical specialist and management, including

doctors, masters, experts, engineers and technicians. They were trained
in Universities & Institutes in domestic and overseas.

GAS FACILITY MANAGERMENT
DIVISION

The Division founded on August 15th, 1995. Main activities of Gas
Operation Division: Supply high pressure gas for gaslift system on White
Tiger Field ; Treatment, dehydration and pressing petroleum gas been
collected from White Tiger Field and Rangdong Field for Baria-Phumy
Industrial Area.

IT & COMMUNICATION
CENTER

Center of IT and Communication (CITC) is a member unit operating under
the control of Vietsovpetro J/V (VSP), provides IT and communication
servives.CITC was established in 2004 according to the Decision of VSP
Management Commitee to merge IT and Communication department of
VSP

LOGGING & TESTING
DIVISION

Vietsovpetro Logging & Testing Division (L&TD) was established in June
2"d, 1983 by the 3rd Assembly Solution of VietSovPetro Joint Venture.
This is an unique organization of PetroVietnam, which supplies special
service in the petroleum industry for exploration and production
activities.
Marine Transport and Diving Division has a fleet of 17 specialized vessels.


MARINE TRANSPORT &

Strategy – Illustrations

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Division
DIVING DIVISION

Tasks
Apart from Pipelaying and Crane vessels of 1200 tons capacity the
Division has Fire Fighting, Diving, Towing and Transport vessels. The fleet
is capable of carrying out handling large-sized cargoes, towing, diving and
rescue jobs at sea.This ensures the efficient delivery of all offshore
services for petroleum production in White Tiger and Dragon fields, as
well as supplying transportation, salvage, and construction of offshore
structures for other oil companies

MECHANICAL &
ELECTRIC EQUIPMENT
REPAIR DIVISION

Mechanical and Electric Equipment Repair Division has a complex base for
maintenance and repair of mechanical and electrical equipment. The
importance of this Division is defined by total capacity of power units and
drives at sea exceeding 200 Megawatts. The Division is equipped with
modern dynamic, turning and cutting machinery facilities the
prefabrication and manufacture of parts for repair and maintenance

purposes. Its modern dynamic, turning and cutting machinery facilitates
the prefabrication and manufacture of parts for repair and maintenance
purposes.
On July 07, 1982, the Health department was established with
responsibility of caring health for cadres, workers in Enterprise. With the
production increasements, more developed projects, the Health
department was changed into The health board in 1989 and become
Medical services center in 1997.

MEDICAL CENTER

OFFSHORE
CONSTRUCTION
DIVISION

Established in June, 1982, Offshore Construction Division is one of the
leading divisions with large experience of offshore oil and gas facilities
construction. Annually the Division is capable of constructing 2 marine
fixed platforms for 50-60 meters water depths of as well as laying tens of
kilometers of subsea pipeline. The Division satisfies VSP's needs and is
ready to fabricate, construct, repair fixed platforms and lay subsea
pipelines for foreign companies.

OIL & GAS
PRODUCTION DIVISION

Oil and Gas Production Division is a leading J/V Vietsovpetro division.
Using modern equipment and technology the personnel of this Division
recovers, treats and offloads over 1 million tons of oil per month. White
Tiger oil field has operating Water Injection System with pumping units

capacity of 60 thousand m3 per day at pressure of up to 250
atmospheres. The division widely applies gaslift system in wells
operation. Up-to-date methods of high paraffin oil production and
transportation using depressants are developed.

PORT SEVICES &
WAREHOUSES RENTING
DIVISION

The MATERIAL SUPPLY AND PORT SERVICES DIVISION (PSD) is a member
of VIETSOVPETRO Joint Venture Enterprise, was established on
September.13th,1982.

RESEARCH & DESIGN
INSTITUTE

Research and Engineering Institute (R&EI) which is the scientific and
engineering division of Vietsovpetro JV (VSP) has been awarded the
Vietnamese Order of Labor. R&EI was established for research purposes
and conducts scientific, economic and technical studies in the fields of
prospecting, drilling, development, construction and the operation of oil
and gas facilities for VSP.

Strategy – Illustrations

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Division


Tasks

SAFETY &
ENVIRONMENTAL
PROTECTION CENTER

The Division founded on October 01,1988 according to the Resolution of
the 10th Vietsovpetro’s Council. Certification of satisfying requirements
of the management system ISO 9001:2000, approved by BVQI on
September 07, 2004. Certification of capability to maintain and test firefighting equipments and breathing apparatus, approved by Nippon Kaiji
Kyokai, Japan on May 07, 2007

Application #5 : BCG Matrix
QUESTION : build the 2 matrixes below

Case 1
Market Share

Industry 1

Industry 2

Industry 3

Industry 4

Industry 5

Industry 6


Industry 7

60%

40%

50%

20%

20%

30%

80%

20%

20%

25%

25%

50%

20%

10%


10%

10%

10%

40%

10%

15%

8%

10%

30%

15%

5%

10%

15%

2%

10%


10%

20%

of the company
Market share f the
other competitors

Market

10%

14%

3%

6%

15%

18%

13%

Growth rate

12%

15%


10%

7%

15%

19%

14%

14%

13%

11%

5%

15%

17%

13%

6%

15%

18%


12%

% of the SBU in
the turnover

Case 2
Market Share

20%

10%

15%

10%

15%

10%

20%

Industry 1

Industry 2

Industry 3

Industry 4


Industry 5

Industry 6

Industry 7

40%

40%

50%

15%

20%

25%

40%

20%

20%

25%

15%

50%


50%

20%

10%

10%

10%

30%

10%

15%

16%

10%

30%

15%

25%

10%

10%


14%

15%

10%

of the company
Market share f the
other competitors

Market

12%

9%

8%

7%

8%

6%

13%

10%

15%


20%

10%

15%

10%

20%

Growth rate
% of the SBU in
the turnover

Strategy – Illustrations

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Application #6 : Barriers to entry
QUESTION : What are the main barriers to entry foreign companies will face if they enter Vietnamese
market ?

Application #7 : External diagnosis
QUESTION : make a brief diagnosis of mobile and Internet markets in Vietnam

Vietnamese coffee prices decline before main crop
Agra-net.com
Tuesday October 09 2012


COFFEE prices fell in Vietnam on Tuesday, about two weeks before the start of the main harvest that
will boost supplies by early November, but demand remained thin as buyers were gauging
production and waiting for prices to ease further, traders said.
Between 10 and 15% of the coffee crop has ripened in the Central Highlands coffee belt of Vietnam,
the world's largest producer and exporter of robusta, but farmers have not rushed to pick cherries,
traders in the region said.

Coffee exports hit 2.66 billion USD
31/08/2012 | 16:18:35
VNA
Coffee exports in the first eight months of this year are estimated to reach 1.26 million tonnes,
earning 2.66 billion USD, up by 31.9 percent in volume and 26.3 percent in value against the same
period last year. The ‘Hanoi moi’ (New Hanoi) newspaper reports that the two biggest import
markets for Vietnamese coffee, the United States accounting for 12.5 percent of Vietnam’s export
value and Germany, 12.4 percent, are continuing to grow both in volume and value.
Within the reviewed period, exports to Indonesia have risen 9.5 times and to Mexico , nearly 3.5
times more. According to the Vietnam Coffee and Cacao Association, coffee exports may fall in the
future due to supply shortages.
However, exports can expect to see a sharp increase once the next crop is harvested in late 2012.

Civet-cat coffee : the treasure from Vietnam
The Economist, Jan 15th 2012, 22:32 by G.C. | BUON ME THUOT

Strategy – Illustrations

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IN A humid outdoor café surrounded by palm trees, Hung Pham Ngoc launches an attack on his
coffee, pushing aside a cup of pungent black java for a Coke. “Everything is fake!” complains the

professional coffee taster and self-proclaimed snob. “It's all made from artificial flavours. It's
undrinkable.” He fumes on about the problems of the coffee industry, and what he calls a grievous
oversupply of substandard beans.
Vietnam is the world's second-largest coffee producer, but also one of the most obscure. Unlike
coffee exports from countries such as Brazil and Ethiopia, Vietnamese beans are typically used in
cheap instant Western coffee, which earns scant international commendation. His country, he
declares, needs to market a trendy style of coffee drinking—like Starbucks, he adds, but finer. “Civet
dung,” he proclaims. “Civet dung makes coffee good. It's natural, and it makes real coffee.”
Mr Hung is one of a handful of Vietnamese aficionados trying to revive tastes for this epicurean and
elusive beverage. At specialised coffeeshops around the world, this coffee sells for around $30 a cup.
As it happens, civet cats are coffee connoisseurs. With their long noses, they sniff out and eat the
best and fleshiest beans. Their digestive enzymes ferment the beans and break down the proteins.
These beans, harvested from the faeces, then create a coffee that tastes rich and slightly smoky with
hints of chocolate. The beverage is known in Vietnamese as ca phe chon, or civet-cat coffee, and is
also commonly produced in Indonesia and the Philippines. The final cup delivers a smooth, dark
palate that is stronger but, some say, less bitter than typical coffee.
But there is a growing market in fake civet beans. One example widely peddled at
outdoor markets is made with artificial fragrances that bear little resemblance to the
drink's actual bold taste. Larger coffee chains, however, produce a more sophisticated
beverage using biotechnology, isolating an enzyme similar to that in the civet's stomach
that ferments the beans, and then mixing it with chocolate powder to add authenticity to
its aroma. In Buon Me Thuot, the province's capital and the coffee capital of Vietnam,
nearly every market-stall vendor claims to sell the weasel beans, often asking for at least
$100 per kilogram. Local customers, once relentless in their search for the real thing,
now often settle for the knock-offs. “People actually like buying ca phe chon even though
they think it might be fake, because the price is not that expensive,” explains Nguyen
Khanh Van, a university student in Ho Chi Minh City.

Storm puts Vietnam coffee crop at risk
Updated 02:08 PM Oct 06, 2012 ( Reuters

HANOI - Tropical storm Gaemi is forecast to slam into Vietnam's central coast later on Saturday,
dumping heavy rains and strong winds in the Central Highlands coffee belt, which could result in a
decline in output, the government and traders said.
The storm, the seventh to hit Vietnam this year, would be centred near the coastal provinces of Binh
Dinh and Phu Yen, with winds travelling at up to 74 km per hour, a government statement said. It
would weaken after landfall and move further west by Sunday, dumping wind and heavy rains in the
northern part of the Central Highlands while en route to Cambodia, the statement said.

Strategy – Illustrations

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"Rain may not harm coffee cherries now but strong wind can cause young cherries to drop," said a
coffee trader from Daklak, the country's largest coffee growing province and one of the five
provinces in the Central Highlands. The northern part of the region includes the provinces of Kontum
and Gia Lai, which are the smallest in terms of coffee areas among the five, ranking after Daklak, Lam
Dong and Dak Nong.
Around 80 percent of Vietnam's coffee comes from the region, where harvesting of the new
2012/2013 crop will begin in 10 days, with output initially expected to ease 7-10 percent from a
record high 1.6 million tonnes in the previous 2011/2012 season.
A larger decline could tighten supply from the world's largest robusta producer, putting pressure on
prices. Demand for robusta is expected to be strong in the current season, with steady buying seen in
Europe's market this week.
Vietnam, with a north-south coastline, is widely exposed to storms and typhoons. More than 200
people have been killed or missing in the first nine months due to natural disasters including floods
and landslides, government data show.

Vietnam's 2011/2012 coffee production
Reuters

Vietnam's 2011/2012 coffee production HANOI, Sept 8 (Reuters) - Vietnam, the world's secondlargest coffee producer after Brazil, will run out of beans soon and has no stocks to carry forward to
the next 2011/2012 season, an industry official said on Thursday.
Output from the new crop, due to start from Oct. 1, will not be "as high as forecast by others",
Chairman Luong Van Tu of the Vietnam Coffee and Cocoa Association (Vicofa) said but gave no
Figures. Vicofa said in June that the crop would produce 18 million bags, well below market
projections. For ANALYSIS on Vietnam's coffee Following are details of Vietnam's coffee production
and exports. With an output amounting to 14 percent of the world's total in the current 2010/2011
crop, Vietnam is ranked as the second-largest producer after Brazil.
PRODUCTION Vietnam's coffee crop year runs from October to September, starting with a harvest
that peaks in December and ends in January. The previous harvest ended in December 2010, two
weeks earlier than usual as farmers in the Central Highlands coffee belt rushed to pick beans to catch
up with good prices. About 80 percent of Vietnam's coffee comes from the region, which borders
Laos and Cambodia to the west. Vietnamese companies and individuals have also leased land in the
two neighbouring countries to grow coffee. The coffee belt has five provinces: Daklak, Lam Dong, Gia
Lai, Dak Nong and Kontum, with output ranking in that order.
Daklak alone produced around 6.7 million bags of coffee a year, a third of Vietnam's total. Vietnam,
the world's top producer and exporter of robusta coffee, also grows catimor, a variety of arabica.
Catimor output stood at 38,000 tonnes in the 2010/2011 crop, from 37,000 tonnes in the previous
season, Thai Hoa. Vietnam Chief Executive Nguyen Van An said.

Strategy – Illustrations

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PRICING Vietnam's most common coffee export grade is robusta grade 2, 5 percent black and broken
beans. The grade is often quoted at a discount to London robusta futures as buyers want to hedge
against risks in delivery timing and bean quality. Discounts to London's January stood now at
$100/tonne, from $50-$60 a week ago, for shipment from December. Since June Vietnamese coffee
has been quoted at a premium to London's prices for outright contracts due to tight supplies from

both Vietnam and Indonesia, its rival robusta producer. Vicofa has said it would start collecting $2
from exporters for each tonne of their exported coffee as of Jan. 1, 2012 and use the proceeds to
support coffee re-planting, trade promotion and also to finance the stockpiling scheme. Exporters
will likely pass the cost to buyers.
EXPORT MARKETS Vietnam is projected to export between 1.15 million and 1.17 million tonnes of
coffee in calendar 2011, based on latest projections by Vicofa and the Agriculture Ministry. The
country has more than 150 export firms, but 20 companies account for the bulk of the overall export
volume. Vietnam exports coffee to more than 80 countries and territories, with the United States,
Germany, Belgium, Italy and Spain among the top 10 buyers so far in 2011.

Vietnam’s Coffee Crop to Be at Least 25 Million Bags in 2011-12
By Isis Almeida – Bloomberg - Jun 28, 2012
Vietnam, the world’s largest grower of robusta coffee, may produce at least 25 million bags in the
2011-12 season that started in October and may have another good crop next season because of
beneficial weather, according to independent analyst Neil Rosser. The 2011-12 estimate is higher
than the U.S. Department of Agriculture’s forecast of 21 million bags. Rosser, based in London, has
covered the coffee market for more than 20 years and is the former managing director of the
statistical unit at Hamburg-based Neumann Gruppe GmbH, a coffee trading company.
Farmers must have planted more of the crop for this season, Rosser said in an interview at a coffee
conference in Geneva yesterday. ‘There is still coffee held back in Vietnam. Stockpiles in Ho Chi Minh
City went up last month.” Robusta coffee prices on NYSE Liffe have climbed 62 percent since the end
of 2009, encouraging farmers to boost plantings in Vietnam. Prices are up 16 percent this year.
Farmers in Vietnam got an average 43,200 dong ($2.07) a kilogram (2.2 pounds) for their beans in
2010-11, Rosser estimated. That compares to a cost of production of 32,500 dong a kilogram, he
said.
Policy implications for Vietnam agricultural commodities
Coffee and Tea production sector:
- Implementation of seedling programs to create highImplementation high-quality material
areas for processing factories;
- Expanding market to other potential partners ;

- Diversification of production sector with support from government in organizing
international commercial exchange fairs/marketing campaigns;

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-

Reform of stateReform state-owned processing enterprises which have not been
economically efficient;
Enhanced coEnhanced co-operation mechanism between companies and individual growers
based upon spontaneous agreements;
Enhanced role of community organizations in signing agreements.

Application #8 : Internal diagnosis
QUESTION : use documents below to make the internal diagnosis of Vinamilk

Marking off into main market zones
Vinamilk WebSite
We focus our business effectiveness on the Vietnamese market, which comprised 80% of our profits in
the last three financial years. We have also exported our products to such countries as Australia,
Cambodia, Irap, Kuwait, The Maldives, The Philippines, Suriname, UAE and the U.S.A. We divide our
markets into areas as followed:
Area
ASEAN
Middle East
The rest
Total


:
:
:
:

Number of markets
3 (Cambodia, the Philippines and Viet nam)
3 (Iraq, Kuwait, and UAE)
4 (mainly Australia, the Maldives, Suriname and the U.S.)
10

MAIN CUSTOMERS
The following table reveals the customers that comprised more than 5% of the profit in the last 3
financial years (up to December 31 2007)
Name of customer
State Company for Foodstuff
Trading,Baghdad,
Abdulkarim Alwan Foodstuff Trading
(LLC)

%/ turnover
2005
24.2

%/ turnover 2006

-

18.2

-

%/ turnover
2007
0
5.1

Our biggest customer in the two financial years 2005 and 2006 was State Company for Foodstuff
Trading, Baghdad, Iraq, a company working closely with Iraqi Ministry of Commerce. We sold such
products as baby cereal, baby formula and formula to this company.
The relationship with State Company for Foodstuff Trading, Baghdad, Iraq was first set in 1996 when
we took part in the tender for the program « Oil Exchange for Food » held by Iraqi government and
won the bid. Although the program was finished in 2003, our company was requested to continue
supplying products by State Company for Foodstuff Trading, Baghdad, Iraq with ordinary commercial
terms. However, we stopped supplying products to State Company for Foodstuff Trading, Baghdad,
Iraq to supply to Abdulkarim Alwan Foodstuff Trading (LLC) in 2007 when they offered us higher
profits and better brand advertising.

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OUR BUSINESS STRATEGIES
Vinamilk Site
We aim to maximise shareholder value and pursue a business growth strategy based on the following
principal components:
• Expansion of market share in existing and new markets;
• Develop a comprehensive portfolio of dairy products to target a broader consumer base and
expand into higher margin value-added dairy products;

• Development of new product lines to satisfy different consumer preferences;
• Brand cultivation;
• Continuously enhancing supply chain man- agement;
• Development of raw material sources to ensure a reliable and consistent fresh milk supply base.

Deutsche Bank ups stake in dairy giant Vinamilk
29/08/2012 | 15:34:18
Deutsche Bank has acquired 3.55 million shares in Vinamilk (VNM), increasing its stake in the dairy
processor to 5.42 percent, Vinamilk announced on Aug. 28. The transaction was completed on
August 15 with a final transfer of nearly 3.7 million shares worth an estimated 415 billion VND (19.7
million USD).
Prior to the purchase, the German bank held a 4.78 percent stake in Vinamilk. VNM closed up by 1
percent on Aug. 28 to 103,000 VND per share.
-VNA

Farming sector must focus on local market
28/04/2012 | 13:37:00
Agricultural processors should develop their local distribution systems and not just focus on exports
if they wish to develop sustainably, said an official at the Ministry of Industry and Trade (MoIT). Ho
Thi Kim Thoa, deputy minister of industry and trade, said the domestic market for farming goods and
services in 2011 showed a year-on-year increase of 24.3 percent and reached 2,004 trillion VND (95.4
million USD).
She said that if processors only focused on exports and did not expand their share of the local market
they will be vulnerable to global downturns. Meanwhile, she said, foreign firms have expanded their
market share in Vietnam .
Thoa cited the example of Viet Tien Garment, Nha Be Garment, Garment 10, Biti's Footwear and
Vinamilk that had successfully boosted their share of the local market.

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However, numerous processors of farming products have faced difficulties developing their share of
the local market. Manh Quan Dong, director of Phuong Dong Export Vegetable and Fruit Company in
the northern province of Bac Giang, said his company have encountered many challenges in the local
market. Dong said his company was based far from Hanoi and other key economic centres with high
consumption levels, which meant transport costs were high.
Tran Hong Duc, director of Bac Giang Export Farming and Food Processing Factory, said many
processors had limited capital and struggled to meet the costs of warehouse fees. Tran Thi Hong Hoa,
from Hanoi Trading Company (Hapro), said that the supermarket chain set high quality standards on
the products it sold, which many domestic producers could not meet. She also said it is essential to
have a trademark. Thoa said local firms need to invest in a distribution system and promote
themselves better.
She added that the ministry has organised meetings between suppliers and retailers such Hapro and
Saigon Co.op to help sell their products.-VNA

Vinamilk imports 300 cows
17/05/2012 | 12:31:58
Three hundred cows imported from Australia by the Vietnam Dairy Products JSC (Vinamilk) has
arrived in Ho Chi Minh City aboard a Malaysia Airlines chartered flight. The cows were taken to a
company dairy farm in the Central Highlands province of Lam Dong where they will be held
separately for a period before being allowed to join the farm's herd.
A Vinamilk spokesperson said the company has invested more than 700 billion VND (33.5 million
USD) to develop five modern dairy farms in the provinces of Tuyen Quang, Thanh Hoa, Nghe An, Binh
Dinh, and Lam Dong, each of which can accommodate 2,000 to 3,000 heads of dairy cows. Under a
five-year plan Vinamilk, which will have 9,500 cows by the end of this year, will increase that number
to 28,000 by 2016.
For that, it will invest a further 1.5 trillion VND (714 million USD) to set up four new farms in the
provinces of Tay Ninh, Dak Nong, Ha Tinh, and Thanh Hoa. It is also looking at co-operation and

investment opportunities in Cambodia . Vinamilk buys some 450 tonnes of fresh milk from farmers
every day. For sustainable development, it has been helping them improve the quality of their dairy
cows to increase their milking capacity. The company plans to increase its milk purchase to nearly
600 tonnes by 2016. That will meet 50 percent of its fresh milk needs for processing.
-VNA

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Vinamilk purchases 100,000 tons of fresh milk
Wednesday, August 29,2012,21:51 (GMT+7)

HCMC – Vietnam Dairy Products Joint Stock Company (Vinamilk), the country’s leading dairy
processor, purchased a combined 97,584 tons of milk frohm local farmers between January
and July, up 18.5% year-on-year.

By Hong Ngoc - The Saigon Times Daily
Three are nearly 6,300 households rearing a total of 63,000 cows in the country, with about half of
them supplying milk being farmed by households having contracts with Vinamilk. The firm so far has
signed some 5,000 contracts to buy milk materials from farmers, with the daily volume averaging out
at 470 tons.
The company targets to raise the daily material milk supply from farmers to 600 tons by 2016 based
on the policies it has been applying to provide them with high-quality breeder cows.
Vietnam Dairy Cow One Member Limited Co. was established seven years ago as a subsidiary of
Vinamilk and specializes in developing dairy cow farming. The enterprise has constructed and put
into operation modern dairy farms in Tuyen Quang, Thanh Hoa, Nghe An, Binh Dinh and Lam Dong,
with each area farming around 2,000-3,000 cows with investment of some VND140 billion.
From now to 2016, the firm will develop its own supplies to more than 100,000 cows, including

28,000 cows farmed by the company and over 80,000 cows by farmers. The herds are expected to
provide Vinamilk an estimated 292,000 tons of milk a year.

Vinamilk licensed to invest in New Zealand
Monday, September 13,2010,20:42 (GMT+7)
By Thuy Trieu - The Saigon Times Daily

HCMC – The local leading milk producer Vietnam Dairy Products Joint Stock Co. on Saturday received
a license from the Ministry of Planning and Investment to set up its presence in New Zealand, the
company said in a statement on Sunday.
This is the company’s first project outside Vietnam that would pave the way for it to further
penetrate the global milk market, said the milk processor commonly known as Vinamilk. It will buy a
19.3% stake in New Zealand-based Miraka Limited Company which has built a high-class powder milk
factory at the center of North Island in the country, Vinamilk said in the statement sent to the Daily.
Vinamilk said that the factory in New Zealand, costing 121 million new Zealand dollars (some
VND1.62 trillion) and having annual designed capacity of 32,000 tons of powder milk, would officially
operate in August next year. The factory, which uses fresh milk supplied by farmers in New Zealand
as feedstock, will sell its products widely on the global market. The outbound investment project is in

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line with Vinamilk’s plan to expand its processing capacity and to secure more fresh milk material
supplies for its production.
On the home front, Vinamilk has lately developed five cow farms in five provinces of Tuyen Quang,
Thanh Hoa, Binh Dinh, Nghe An, and Lam Dong, with the total herd of 5,000 cattle head. The
company expects to import 1,000 more cows this year.Mai Kieu Lien, chairwoman and CEO of
Vinamilk, told local reporters in a meeting last Friday that the company forecast its demand for fresh

milk in the next five years at 1.3 billion liters annually, but the current local supply was about 200
million liters only. Therefore, the company is developing its own farms.
“We target to secure 40%-50% of fresh milk material demand from our own farms by 2015,” Lien
said.Vinamilk is deploying several projects to enhance its production in the country. The company
will put into operation its US$30-million milk factory in Danang City by August next year, which will
mainly produce yoghurt and liquid milk products.
By late 2012, two more factories of Vinamilk will operate. The first one is a US$120-million liquid milk
factory with an annual designed capacity of 400 million liters in the first phase and 800 million liters
in the second phase. Meanwhile, the other one costing over US$100 million will produce powdered
milk for kids with an annual designed capacity of 55,000 tons, four times higher than the current
capacity of Vinamilk’s factory now.Vinamilk currently has 250,000 distributors and retailers, selling
nearly 10 million milk products a day. It now has a market share of 40% in Vietnam.
Lien said the company’s local sale revenue in this year to date has amounted to about VND9.6
trillion, equivalent to the whole revenue of last year. Besides the local market, Vinamilk is also strong
in export, obtaining about US$80 million in revenue every year. Its main export markets are the
Middle East, Cambodia, the Philippines, and Australia. In related news, Vinamilk is considering to
raise product prices to compensate rising input costs. The company’s CEO said that Vinamilk was
calculating to harmonize product prices with the price of fresh milk purchased from farmers.

Application #9 : strategic moves
QUESTION : use SacomBank’s profile and documents below to define SacomBank’s main strategic
moves

Sacombank to facilitate farm produce import from US
10/8/2010
Saigon Thuong Tin Commercial Bank (Sacombank) has been chosen to draw up the letter of credit
(L/C) for farm produce import from the US under the Export Credit Guarantee Programme, or GSM102.

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The programme covers credit terms of up to 12 months with the total limit of $20 million. The
Commodity Credit Corporation (CCC) under the US Department of Agriculture has picked four banks
in Vietnam for the programme.
The programme will help local farm produce importers gain access to capital sources with
preferential terms and interest rates. This is also a chance for Sacombank's corporate customers to
expand business with prestigious exporters in the US
The bank has also joined hands with the US Department of Agriculture and US Consulate general to
hold a seminar introducing benefits of the GSM-102 transactions to Vietnamese importers.
The Saigon Times Daily

Sacombank enters into strategic partnership with Duc Long Gia Lai Group
6/28/2010
Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) and Sacombank Securities Joint Stock
Co (coded SBS) have officially signed an agreement with Duc Long Gia Lai Group Joint Stock Co
(coded DLG) to set up strategic partnership relations.
Accordingly, Sacombank committed to provide in time credits for each business period of Duc Long
Gia Lai Group. Meanwhile, the group pledged to use the bank's products and services such as
international payment service, trade funding and to cooperate with Sacombank in co-investing in
joint projects.

Sacombank pioneers Platinum Visa Card in Vietnam
4/19/2010
Hochiminh City, 16th April, 2010: Sacombank is the first bank launching the Platinum Visa Card. Any
customer who earns more than VND 60 million per month can apply for this luxury card that provide a
high level of service. The cardholders are granted a credit limit ranging between VND 200 million to
VND 1 billion . Furthermore, the cardholder will shall automatically be insured against personal
accident with claims of up to USD 500,000.

Besides providing services such as cash withdraw, shop now-pay later via Global system or through
Internet, the Platinum Visa Card brings increased convenience to customers such as airflight booking,
hotel booking, luxury car rental as limousine, access to business information such as booking
conference rooms, fax machines, laptop, translators, visa/passport, ATM locations, foreign exchanges
rate, languages.. All services are provided on demand when the cardholder log in to
www.visaplatinum.com or call a 24-hour free hotline 1800 58 58 23.
Platinum Visa cardholders shall be provided promotional information on 5 star hotels, spa services,
beauty salons, fashion shops.. all over the world by Visa Platinum Club and Sacombank Platinum
customer service channel. Cardholders shall have an overview of budget plan for the next year with

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the detail credit balances sent at year end.

USD20 million to support SMES
11/18/2009
Proparco - the subsidiary of the French Development Agency (Agence Française de Développement AFD) and Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) have signed a credit facility
agreement of USD20 million to reinforce the medium and long term lending capacity of Sacombank,
to support its small and medium enterprises (SME) lending activity.
The agreement was signed by Mr. Tran Xuan Huy - CEO of Sacombank and Mr. Jean Michel Severino CEO of AFD, President of Proparco during the Franco-Vietnamese Forum of Entrepreneurs, in
presence of Standing Deputy Prime Minister of Vietnam, Mr. Nguyen Sinh Hung and the Prime
Minister of France, Mr. François Fillon.
As part of this financing, Proparco also participates to the improvement of Sacombank’s
environmental and social practices by assisting the bank to implement a monitoring of the
environmental and social impacts of its lending activities.
Moreover, this dollar financing contributes to the stimulus package deployed by the Vietnamese
authorities, in an environment where the international financial crisis has made long term financial

resources scarcer, illustrating Proparco’s counter cyclical role. Facilitating access to credit for SMEs is
indeed one of the critical aspects of the Government’s plan given the essential role of these
enterprises for the country’s economy.
About Proparco
Proparco is the subsidiary of the French Development Agency (Agence Française de Développement AFD) – France’s main provider of bilateral overseas’ development aid - for the financing of the private
sector. Founded in 1977, Proparco provides long term financing in the form of debt or equity to
private to banks, infrastructure and industrial projects in over 60 emerging and developing countries.
AFD has committed in total in excess of EUR900 million to the public and private sector in Vietnam
since it started its operation in this country in the late 90s.
About Sacombank
Founded in 1991, Hochiminh City-based Sacombank is one of Vietnam’s largest privately owned
banks with about 3% of system assets and total assets of VND 98,243 billion (USD 5,519 million) as at
30 September 2009; its network with nearly 290 branches and transaction offices in 45 out of 63
Vietnamese provinces, a representative office in China, a branch in Laos and a branch in Cambodia.
Sacombank is the first bank to be listed on Hochiminh City Stock Exchange (HOSE) and highly
appreciated by international organizations via prestigious awards including “Best Bank in Vietnam
2008” by FinanceAsia UK; “Best Bank in Vietnam 2008” by Global Finance US; “Best Domestic Bank in
Vietnam 2008” by The Asset Hong Kong; and “Vietnam Retail Bank of The Year 2008” by The Asian
Banking and Finance UK. Sacombank’s largest shareholders are Australian and New Zealand Banking
Corporation and Dragon Financial Holdings.

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