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    Political Enviornment

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    Khoai Tây
    The document summarizes the political environment facing Kinh Do confectionery company in Vietnam. It analyzes the threat of new entrants, substitute products, bargaining power of customers and suppliers, and rivalry amongst competitors. The threat of new entrants is high as Vietnam has joined the WTO and reduced import taxes. However, the threat of substitute products is low. While Kinh Do has a nationwide distribution network, higher income customers prefer imported brands. Kinh Do relies on prestigious domestic and international suppliers, giving suppliers high bargaining power. The confectionery market is led by Kinh Do, Haihaco, and Bibica, with Kinh Do having the largest 28% market share.

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    Political Enviornment

    Uploaded by

    Khoai Tây
    147 views8 pages
    The document summarizes the political environment facing Kinh Do confectionery company in Vietnam. It analyzes the threat of new entrants, substitute products, bargaining power of customers and suppliers, and rivalry amongst competitors. The threat of new entrants is high as Vietnam has joined the WTO and reduced import taxes. However, the threat of substitute products is low. While Kinh Do has a nationwide distribution network, higher income customers prefer imported brands. Kinh Do relies on prestigious domestic and international suppliers, giving suppliers high bargaining power. The confectionery market is led by Kinh Do, Haihaco, and Bibica, with Kinh Do having the largest 28% market share.

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    The document summarizes the political environment facing Kinh Do confectionery company in Vietnam. It analyzes the threat of new entrants, substitute products, bargaining power of customers and suppliers, and rivalry amongst competitors. The threat of new entrants is high as Vietnam has joined the WTO and reduced import taxes. However, the threat of substitute products is low. While Kinh Do has a nationwide distribution network, higher income customers prefer imported brands. Kinh Do relies on prestigious domestic and international suppliers, giving suppliers high bargaining power. The confectionery market is led by Kinh Do, Haihaco, and Bibica, with Kinh Do having the largest 28% market share.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    147 views8 pages

    Political Enviornment

    Uploaded by

    Khoai Tây
    The document summarizes the political environment facing Kinh Do confectionery company in Vietnam. It analyzes the threat of new entrants, substitute products, bargaining power of customers and suppliers, and rivalry amongst competitors. The threat of new entrants is high as Vietnam has joined the WTO and reduced import taxes. However, the threat of substitute products is low. While Kinh Do has a nationwide distribution network, higher income customers prefer imported brands. Kinh Do relies on prestigious domestic and international suppliers, giving suppliers high bargaining power. The confectionery market is led by Kinh Do, Haihaco, and Bibica, with Kinh Do having the largest 28% market share.

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    Political enviornment

     Threat of new entrants

    Since Vietnam joined the World Trade Organization (WTO) and import tax for


    confectionery was reduced 20% in 2003, the domestic firms have been under the
    competitive pressure from not only foreign firms but also the import. Many
    organization and enterprises with potential of capital and technology will invest in
    Vietnam market. That is a big challenge for existing firms requiring them to
    continually improve technology.
     The threat of substitute products

    In this case, the threat of substitute products is very low. Confectioneries


    stratify a lot of customer needs such as enjoy needs, nutritional needs or use them as
    gifts… There are very few products which can satisfy the same customer needs to
    meet the demand of customers.
     The bargaining power of customers

    Kinh Do’s distribution channel officially has been nation-wide with more than
    200 distributors and 120.000 retail stores of food products and 65 distributors with
    30.000 retail stores of refrigerated goods. Kinh Do also own retail channel with series
    of Kinh Do Bakery in Hanoi. It has diverse and wide-reaching distribution channels
    by paying attention to not only traditional channels but also to modern and public
    channels including supermarkets, bakeries, canteen in schools and recreational areas.
    So far, the corporation’s products are sales at stores and shops in both urban and rural
    areas.
    Kinh Do now is present all around Vietnam and the brand Kinh Do is well-
    know with everybody with all kind of ages, careers, locations... However, Kinh Do
    has just reach the target customers who has overage income while customers having
    higher income prefers paying for imported or more high-grade products such as Paris
    Gâteaux, Lambezt, Hollanda… The customer of Kinh Do care more about the quality
    more than the price of product. Therefore, buyers have not much particular influence
    on price and the bargaining power of buyers is not high.

     The bargaining power of suppliers

    With the position of a leading foodstuff Corporation in Vietnam, all materials of


    production are selected from the most prestigious domestic suppliers and
    imported from France, Australia,Newzeland, Uru Guay, Thailand... and used for whole
    Kinh Do system including Kinh Do Confectionery, North Kinh Do, Kinh Do Sai Gon,
    Vinabico and cream products, yogurt.. of Kido Company in order to exploit the good
    quality and certified sources of materials. Kinh Do always highly appreciates suppliers,
    who have responsibility, creatively renovation, and continuously improve the material
    quality and maintain competitive price in the market. Such effort will create and maintain
    the win-win and long-term cooperation. Kinh Do has fix suppliers to ensure stability of
    resources as well as stable cost. Hence, the bargaining power of suppliers is quite high.
     The rivalry amongst current competitors in the industry

    Market Share in Confectionary Industry


    Haihaco
    7%

    Others
    38% Kinh Do
    28%

    Import
    20% Bibica
    8%

    Source: Report of Confectionary Industry (Aug, 2010)


    Kinh Do is well on its path to become Vietnam’s leading food conglomerate and
    has the biggest amount of market share in Confectionary Industry (about 28%). Two
    main competitors now are Haihaco and Bibica.

    Bibica Corporation is one of the leading confectionery companies in Viet Nam.


    It has been considered to be “Manufacturer of Vietnamese high quality products” for
    eleven years by local consumers. Bibica has a wide range of products: Biscuits, Cookies,
    Layer Cake, Moon Cake, Snack, Hard and Soft Candy, Jelly, Chocolate, Instant Cereals,
    Glucose Syrup. Besides, there are also a lot of nutritional products, such as: Sugar free
    confectionery and Low GI Instant Cereals, Sugar free Chocolate, Food for baby.
    Especially, Bibica currently is the first manufacturer in Viet Nam that offer sugar free or
    low GI confectionery and beverage that are suitable for diabetics or diet people. All of
    these special products have been clinical tested by Viet Nam Nutritional Institute. 
    Bibica equipments are always being modernized. Most of them are imported from
    well-known manufacturer in Europe to ensure that their products are always delicious and
    able to meet all strictly requirements on food of other countries. Moreover, all of their
    materials for producing are put under control of hygienic and safety standards. At the
    moment, their quality management system is in accordance with the requirements of the
    quality standards Iso 9001:2000.
    Bibica has been exported their products to: The United State, Japan, Singapore,
    Philippines, Taiwan, South Africa,Cambodia… [ CITATION Bib11 \l 1033 ]

    Haihaco Confectionery JSC is one of the top five confectionery companies of


    Vietnam. It is one of the best trademark in Vietnam, succession, its product has been
    chosen “high quality product of Vietnam” by consumer during 1996 to this day.
    Recently, HaiHaCo has been chosen into top 100 powerful trademark of Vietnam.
    HaiHaCo trademark has been registered own industrial protection in Vietnam and some
    Asia countries such as China, Laos, Malaysia, Singapore, Russian, Cambodia.

    Several HaiHa’s products take up market from the first appearance, it has specific
    aromatic flavour as Chew candy, soft candy, Jelly candy. The company attach special
    importance to technology and sole protection for group products such as ChewHaiHa,
    HaiHaPop, Miniwaf, ChipHaiHa, Snack-Mimi and new produc going to come market:
    For example: Long-pie, Long-cake, Hi-pie, Lolie…. For this reason it making HaiHa’s
    producing confectionary field is has gigantic advantage. HaiHaCo’s products are
    diversified type and plentiful style, so it satisfies customer’s demand. Confectionary of
    HaiHaCo always has equal and stable quality so consumers like it very much (special
    North area). Market share of HaiHa on this market are much large. [ CITATION Hai1 \l
    1033 ]

    Competitors are always the main force for association to do their business well because
    their market share could be lost by these rivals. In case of Kinh Do, the rivalry amongst
    current competitors is not high but it still has to be careful in every actions.

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