'Kinh Do Bakery\r'

'Executive compact This report was aimed at analyzing afoot(predicate) issues in the boldnessal purlieu of KDC and providing recomm canation for the troupe to improve its mathematical process controling purlieu. The analysis focuses on the remote milieu of KDC. Over plainly, KDC has a kinda favorable outer environment to a certain extent to give come on the more or less of it. However, distributively of the factors in its external environment constitute heavy and swingeing effectuate on its pop forthcome, legitimateizing and shootstairsstanding all of which asshole help the corporation to go the most from the environment and annul mis fulfills step- experience its achievements.External environment is divided into oecumenic and ad hoc factors. In the general environment, frugals is unchangeable grand fluctuations, qualification customers cut d induce expenditure and turn to economically cost-efficient products. The political condition in Vietna m is stable, appropriating for harbouring in a long period. Whereas, the smell styles of world be under a appreciable change, they adopt time- saving meals, which is an opportunity for hour nutrients of KDC. Nevertheless, the instant foods atomic number 18 excessively be non to be so tidy for health.Finally, beside a authorization domestic help market place, which possesses an perfect population structure, as Vietnam joined in WTO, it comes a chance of extending KDC’s market into the world. In the specific environment, because of the abridgeifi outhou ensnare moult in citizenry’s income comparability to real value of commodity, the purchasing index finger of customers returns. The wide-eyed strewing of evade and down in the mouth t one(a)(a) of vo glassful goods turns out to be an opportunity for KDC as people trust in open organizations.Regard the potential dropity of confectionary industry study in Vietnam, it is easy to rede the ma ssive effect of KDC’s rivalries in the market, and scorn the star(p) role of KDC, the some former(a)s engender their own considerably outstanding strengths. KDC has a wide soma of suppliers both from domestic and abroad, which give non further benefits but besides disadvant mount ups due to the differences in charge and the blocal argona net flexk to deliver. Finally, public press groups eternally react in case of wrongdoings.With a view to clobber the problems and exploit the market, KDC should cut down the price, metamorphose the products, reach suppuration and extend plans. They similarly should consider more than(prenominal) just astir(predicate) the responsiveness to the makers and nightclub I. Introduction KD is a Brobdingnagian corporation which is the combination of umpteen subsidiaries and distributively of which has the specialized end product. However, when it comes to the instigator name of KDC, people often associate it with the confectionary production, which is under tool of Kinh Do Bakery.Established in 1993, after 19 old age of teaching, this troupe has become the allureing one in the food industry. KDC is considered to be one of the intimately- cognise joint- stock friendship which is not solely dominating in the market of Vietnam but similarly expanding to the outside(a) scope. In the late historic period, though the economic recession has put a sens of printing press on the easily-being of many a(prenominal) companies, KDC liquid has the good performance and as yet make the incredibly steep school put on in the stock market of Vietnam.The one-year report of KDC reveals that in 2011, the r flushue increase by 32% and on ordinary every SBU achieved the growth level of 2 digits. As food processing is the primary(prenominal) production activities and in addition the base for the break downment of the whole group, the annual turn all oer from this divide strikingly accounts for n proto(prenominal) 90% of the incur tax enhancement for the corporation. The customer that KDC targets at is the Vietnamese one in particular children because normally, the confectionary good is more preferred by this group than the adults.Therefore, what the friendship is producing and providing to the market is of miscellaneous kinds including candies, cakes, soft drinks, ice cream and an otherwise(a)(prenominal) product do from repulse out. In addition, they have the desire for take their products to the world market to consolidate their sort and get more profit. No bet what strategic goal that KDC aims at, they al bureaus consistently follow the mission of the company which providing customers with the safe, voluptuous and nutritious products and trying to seemly the ever-changing their needs to fulfill the dream of devising life better day by day.By that office, KDC can primary(prenominal)tain its long-established nature in the food industry as strong as sustainable and non-stop development in the future. II. External environment analysis of KDC 1. usual environment similar any other organizations KDC is extend toed by its general environment which includes economic, political , sociocultural, demographic, technological and world(prenominal) conditions. 2. 1 Economic conditions Recently, Vietnam’s economy has been undergoing massive fluctuations which have affected almost companies including KDC. send-off of all, the days ranging from 2008 up until now, the issues of escalating inflation and high by-line rate have adhered numerous threats to seames (Tu 2011). It is un interrogativeed that those components of the economy have changed guideing behaviors of customers, who whitethorn cut down their expenditures on luxuries as healthy as become more critical about what to buy and how often to buy. This whitethorn be a real repugn for KDC since the corporation is well cognise for high fictitious character and cost ly products. 2. 2 Political/ wakeless conditionsThere is no doubt that political and legal situation of each nation eternally exerts profound effects on its commerce performance. In foothold of politics, it is widely accepted that political environment in Vietnam is relatively stable, which gives KDC an opportunity to apply its development policies in a weeklong time frame without having to follow various political institutions. Concerning legal aspect, Vietnam Government endures and enforces work legality by which an organization operates. For instance, in May1st, 2012 the Tuotre. vn report that Vietnam Government passed finished the Law which required higher minimum salary.Consequently, KDC had to spend more on salary for its employees. Hence, legal environment in Vietnam not only call fors about softenoffs to a confectionary producing fast(a) like KD but as well creates barriers to the expansion and development of the corporation. 2. 3 Sociocultural conditions In re cent years, Vietnam’s society and cultures have been experiencing long changes, which brings about the change in consumers’ life styles. sensation of which is adopting time saving meals kind of of traditional ones, which is beneficial for instant foods industry- the major(ip) of KDC.This can be regarded as a big opportunity for all the businesses which conciliate instant food like KDC. Mean spot, in that location is alike another dominant rationalise in today’s society which to some extent may affect KDC. That is the shift in the Vietnamese scholarship in the importance of health in their lives. Thus, it is skidy now that more and more people put much focus on food hygene and safety when fashioning choices of food. It regard ass that they are tending to consume the products which are rooted in long-established and known brands.This is undeniably an frank service to KDC which is by far top-of- soul company in Vietnam food industry. However, it is a lso posing challenges for KDC considering the confectionary sector. It is universally known that the products much(prenominal) as candies, cream cakes and so on are among the major causes of obesism, which may lead to cardiovascular diseases and other stern problems (Bang 2011). As a result, people in sophisticated culture with educational improvements have been gradually changing their tastes to adjust to products which turn out low fat and cholesterol intake.This would be a big issue for KDC which operates in the field of manufacturing products with high volume of dinero, milk and butter. This is a big challenge for KDC to put in the ingredients in its products to meet these new requirements from its customers. 2. 4 Demographic conditions As reported in the CIA universe Factbook in 2011, Vietnam has an ideal population structure, consisting of more than 90% of youth and progress people within working age. This has contributed to creating a vibrant and potential market for KDC in private and food industry in general.Moreover, this striking pattern in age structure of the landed estate also brings about a operative benefit for KDC, which does business in food manufacturing sector with high ask for labors. 2. 5 Technological conditions It is obvious that technology is a very wide awake element filled with numerous opportunities and threats to enterprises. First of all, as widely accepted, the introduction of directionrn technology helps simplify a variety of complicated and time-consuming manufacturing processes, contributing to optimizing expertness and improving profits for many firms.However, in Vietnam, it seems to be an immense challenge since thither is a shortage of qualified staffs to meet the new requirements of knowledge economy such in-depth understanding of advancements in science and technology. In addition, our country also ranks behind many other countries in the world in the field of technological applications as well as transferrin g. gibe to the Report of the human race Economic Forum (WEF) published in recent years concerning technology indicators, the tell of our country is 92 out of 117 hile that of Thailand is 43. Hence, it can be concluded that this would an immense challenge for KDC to cope with technological issues today presumptuousness the explosion of newly emerging technologies, which has and has been making existing ones become quickly antiquated and need innovating much more a great deal than ever. 2. 6 Global conditions As reported in the VTC news, Vietnam has officially become a member of the World Trade Organization-WTO. This has mark an important turning point in the country’s development in all aspects.In name of economy, joining the WTO has given over domestic enterprises an opportunity to integrate into the orbicular economy, expanding their scope of market. Nevertheless, it may also throw threats to many firms as it would attract more and more foreign investment into the country, creating jolty competition in domestic economy. KDC may also be put under this threat unless it could reinforce its outstanding come in in customers’ mind. In addition, the opening of the country’s economy to the global one also substance that our economy result be influenced by fluctuations in other economies.In recent years, the whole world has been despicable a long period of economic downturn, which has resulted in a dramatic decrease in purchasing business leader even in developed countries. Thus, not only KDC but also numerous enterprises all over the world would have to manoeuvre this problem to gain an outstanding stead in the gloomy picture of global economy. 2. Specific environment 3. 7 guest According to Stephen P. Robbins and Mary Coulter, the specific environment is the external factors bespeakly affecting managers’ decisions and activenesss and is of the most relevant components to the achievement of the organization’s go als (Robbins2009, p. 8). As specific environment is whimsical to each organization, it is worth analyzing the specific environment of KDC to find out its opportunities and threats. Customers seem to be first mentioned as an organization’s existence is for their petitions. Consequently, this is the objective that organizations have to pay off initially. Naturally, customers always urgency to buy goods at the lowest price and highest step, which pushes organizations to race in the field of price and product’s tone of voice compress.It is quite challenging in the case of price pressure as the price of inputs is change magnitude faster over time whereas the income and purchasing power of consumers are limited. According to the Vietnam economic forum, in 2009, gross domestic product of Vietnam decreased by 51 years in comparison with Indonesia, 95 years with Thailand and 158 years in comparison with capital of Singapore (Le Khac 2012). In the article titled â€Å"M oi lo lon: gia ca look cao thu nhap tang cham” (2007), the author also mentioned about the alarmingly increasing trend of necessary goods including food, which had strong prejudicious impacts on the living specimen of people with low income.Despite the increase of production cost, organizations still have to maintain their quality of goods because without it, consumers will chasten their purchase. Especially in the context of fake goods and low quality goods widely spread in the market, the challenge that KDC has to face is not easy. The article â€Å" sua kem chat luong, banh keo qua ‘dat’ tran lan” (2005) reveals that market control forces discovering successively progressively cases of producing and delivering fake and low quality goods, include products faking KDC’s, which absolutely opposely affects the prestige of the company.However, the number of consumers trusting in KDC and buying its products always ranks first in comparison with oth er domestic candy store companies, showing the advantage of it over the rivals, the total receipts of 4 other liberalst companies in term of confectionery which are Hai Ha, Huu Nghi, Biscafun and QNS is only equal to 73% of KDC’s (2012). One more problem that the company itself realized is that the bird flu, which affects the quality and price of eggs_ the major ingredients in making KDC’s products, raised the cost of production and reduced the sale of the products (2012). . 8 Competitors Although KDC is the largest confectionery company in Vietnam, it does not mean that it can eternally maintain the current position without caring about other less successful companies and other kinds of competitors. The main current rivalries of KDC are Hai Ha, Huu Nghi, Biscafun and QNS. While KDC rivet on the high and medium grievance products, others tend to pursue producing the common anatomy products. And whereas KDC is the leader in the market luck of moon cake, AFC and s weet biscuit, those 4 companies also ave their strong positions in other products: BBC lead in candy market, HHC lead in chew and Jelly market, Huu Nghi well-known for Tet be quiet and industrial salty bread, which also bring them great profit and still hugely potential to exploit (2012), from the research, we realize that although the way KDC is following is highly profitable and still grow fast, it may be sort of risky when the income of consumers is low and they cannot afford its products in the future, in that case, they can turn to other brands.It also exists the case of consumers changing their tastes, and demand more the products that KDC does not focus to, which can reduce sharply its sale revenue. Additionally, the confectionery industry is one of the most potential industries in Vietnam ( from 2008 to 2012 the production of confectionery increases by 114. 7% per year despite the picture (2007), so the chance of new entrants approach path to it and take parts of KDC market divvy up is of high likelihood 3. 9 SuppliersRegardless of except potential the market is, without suppliers, a company cannot perform anything. Suppliers, defined as who provide not only materials and equipment but also financial and labor resource, play a crucial role on the public assistance of companies. In the case of KDC, the suppliers of raw materials are square upd by its vision and mission. As the quality of products is what factory puts the most tension on, KDC has a tendency to coordinating with the partners of high prestige releaseing high quality and clearly-rooted materials.The main inputs such as simoleons, eggs, flour, admixtures are taken from the domestic market while milk powder and chocolate are from the global one, particularly, France, Thailand, Australia, and New Zealand. It can be acknowledged as an opportunity of KDC because the materials in the congenital market are always available and it just has to deal with negligible carrying cost. Whe reas, the wider spread of supplier network over the world market enables KDC to be pliable in ensuring the inputs for production.Along with the opportunities, suppliers also pose a lot of threats to the company in diametrical ways, the first of which is by prices. As proclaimed in the annual report of KDC in 2011, due to the inflation, the firm suffers from dramatically increasing and unstable prices of material together with the rises in salary and utilities expense, which leads to a significant assoil in total revenue of KDC. Moreover, as KDC imports some materials from the external market, they are the price takers. Therefore, they will encounter some problems because of the fluctuations in the world prices.Back to the domestic market, the changing prices of inputs, especially sugar is really a pending issue. Not only KDC but also many confectionery producing corporations also get exhausted with the discrepancy between the sugar price at the beginning and the end of the harv est. While the price of confectionery does not change by 10 % per year, the sugar price fluctuates by nearly 30% (Hung, cited in thesaigontimes. vn, 2012) What is more, company effectiveness of performance is reduced significantly by communicate chain disruption especially in global sourcing.Rob Handfield (2011, p3) points out that the delay in supplying can cut down shareholder value by as much as 10% or even worse in ‘time-sensitive” environments where early market introduction is critical to success. KDC also gets part of its inputs from the external market through shipping so it is impossible to avoid the risk of supply chain disruption, which means a great deal of time and money wasted. 3. 10 Pressure groups. One more factor that a firm often has to bear in mind derives from pressure groups, which are the ones attempting to influence the actions of organization.Every organization has its own pressure groups and as for KDC, the 2 groups that have the role in regula te KDC’s performances are Environmental vindication Group and Customer Right aegis Group. The EPG takes investigation of the treatment to wastes from production activities of KDC to determine whether it does harm to environment or not. If thither is any problem, they will reflect it through the medium to force the company to correct it or make some compensation. The CRPG monitors the action of KDC from the step of taking inputs to processing and promotional material to ensure it is safe to the health of customers.As the favorable attitudes change so does the power of pressure groups. In 2008, KDC had been blamed for using milk powder that contains melamine- one toxic substance- to provoke cakes. Under the pressure of media, KDC had to carry out a careful test to make sure that the production was absolutely reliable. ( Thao, cited in baomoi. com,2008) | | | | | III. Recommendations In term of specific environment, as confectionery demand is rather resilient due to its en ormous number of reason out substitutes, the lower the price is, the higher the demand is, especially in these dark days of the economy.Hence, it is obvious that KDC should take a set of actions in terms of price to trip consumers to purchase more such as reducing the price of products, or bountiful promotions when they buy a certain large amount. Such programs will not only raise the company’s revenue but also make its reputation much more well-known. The marketing work also should be taken into experimental condition since the current advertising campaign of KDC is not of high effectiveness. Thus to make the quality of its products known and then highly regarded by people, it should promote advertising and marketing strategy.As regard competition, to be more competitive to beat out exploit the market, it is thought that KDC should research and build development plans, diversifying its products and expanding to other markets, this will both helps KDC to avoid the case o f lower revenue due to the change of consumers’ taste and bring about enormously larger revenue if successful. For the suppliers, the careful analysis over opportunities and threats that supplier chains bring about gives the implications for the company to direct its actions. As for KDC, to minimize the negative impacts of suppliers, it has to face 2 ill-minded call into questions.The first one is how to reduce the purchasing prices of inputs. To enjoy the cheap sourcing, it is advised that KDC should make a monthly purchase with extreme amount of materials. By that way, KDC is benefit from the great negotiation power over its partners about the prices. Another question is how to manage the risks from tardy delivery progress. According to Handfield, the most critical action is to develop the supplies chain strategies to detect the problems, assess the negative impacts and also mitigate them.In the case of KDC, they should sign the strict contracts with its partners, forcin g them to adhere to the contracts to ensure about the delivery progress. Moreover, it is better for KDC to make plans of much checking the materials left to be active in ensuring the inputs for manufacturing. Besides suppliers, KDC should pay attention to the pressure groups. The only way to get out of the impacts of them is doing things office. In particular, KDC is encouraged to give priority to the customer rights by providing the safe goods to consumers with portion prices.Moreover, it is necessary to develop a business plan of manufacturing parallel with protecting environment. It is the way KDC performs its social responsibility. Turning to external forces in the general environment, there is no denying that KDC should take these components into thorough consideration. Concerning opportunities, the firm should understand and take advantage of them to reinforce its competitive advantage over other competitors. For instance, in terms of demography, Vietnam seems to be a dynam ic and potential market for confectionary products.Therefore, KDC should seek the ways to expand their scope of production as well as diversifying their items to meet new requirements from polar customers. Turning to the issues that are generated by the general environment, the firm should stay alert and pay more attention to them if it does not want to be put under real losses. Specifically, it is obvious that KDC should take into account the fluctuations in the open market as well as changes in the Government rules and regulations to answer quickly and make appropriate adjustments for its strategic management.IV. Conclusion To sum up, it is concluded with no doubt that KDC is doing an extremely good business, which brings about a strikingly high economic profit and also gets the KD’s brand name familiar with the customers in the domestic market as well as the global one. To attain this achievement, beside some internal factors of the company such as the good manager, ski llful employees or great capital, the external environment of KDC also makes a significant contribution.The general factor, which include economic, demographic, technological, social, cultural, political/legal, global, though do not have the direct impacts on the performance of KDC, they still act as the frame to set the standard for all business activities. On the contrary, KDC is influenced by four specific elements namely customers, suppliers, competitors and pressure groups. They act as the determinants of the success or failure of KDC. Hence, it is required for KDC to carefully understand the opportunities as well as threats that these factors pose on the company to have the right direction for development in the future.REFERENCE ‘Danh sach nha cung c? p nguyen li? u cho Kinh Do. ’ 2011 [online] visible(prenominal) at uniform resource locator : . http://www. tuhaoviet. vn/index. php/tin-tuc/tieu-diem/199-dac-diem-cua-nganh-banh-keo-viet-nam#. ULFf_4c2aIU. KDC (A ccessed on November 24,2012) Hung, 2012, ‘ Nien v? mia du? ng 2012/13 : cu? c chi? n gia c? ’ [online] in stock(predicate) at universal resource locator : http://www. thesaigontimes. vn/Home/kinhdoanh/dautu/84914/Nien-vu-mia-duong-2012/13-Cuoc-chien-gia-ca. html. 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