Vinamilk's Internationalization

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- The opportunities and challenges await.

With more than 40 years in milk industry, Vinamilk has built a strong brand in domestic market. They own certain experience and technique required of producing and promoting their products that put an steady footing in the local milk industry. The success at home give chances to Vinamilk to bring out their product overseas. Those advantages is often a prerequisite to fund the R&D and innovation required to penetrate international markets.

Their M&A activities overseas helps them acquired the certain skills, technology or the market share of those merged companies.

- Extended customer base to increase sales opportunities.

- Superior product, service, technology and/or brand to better serve customers.

- Expanded geographic footprint that provides greater access with which goods and services can be sold.

- Diversified product and service offerings that present cross-selling opportunities (increased share of wallet).

- Added distribution and marketing channels that provide opportunities to gain market share.

In addition, the U.S. business that expands overseas can benefit back home from increased cultural sensitivity, competitive intelligence, new opportunities and better management practices

Internationalization offers Vinamilk opportunity to less dependent on domestic economic situation.[…..]

There is fact about perception of customer toward firm brand that Vietnam brands are usually considered as inferior. This is from the country of origin bias, which views Vietnam as developing country with poor technology and young experience in manufacturing. Vinamilk faces the challenge with customer perception compared with other brands. Countries such as New Zealand, Australia are well-known for their milk industry. Their strengths of suppoted weather for the cow or advanted technology in producing milk are their comparative advantage of those country. Consumers’ evaluation of a product is often driven by the product’s country of origin. Consumer use country of origin as a clue to estimate the quality, prestige of the product. Vietnam does not have strength of COE in the milk industry. Vinamilk has to meet huge competition with those country such as New Zealand, USA in developed countries where customers have many high-quality milk choices.

Vinamilk is still a young brand in international market. Developed countries they have high demand in dairy product due to their lifestyle and culture. Those market are potential for huge consumption but customers in these markets are more experienced, they have more choices and higher expectation. Competing is those market is intense in creating and sustaining brand. It is expensive and complex to boost the product in developed market.