ASSIGNMENT 1 FRONT SHEET

Qualification BTEC Level 5 HND Diploma in Business

Unit number and title Unit 18: Global Business Environment (530)
Submission date Date received (1st submission)
Re-submission date Date received (2nd submission)
Student name LAM HOANG ANH Student ID GBC18036

Class GBC0701 Assessor name HUYNH PHU TAN

Student declaration
I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I understand that
making a false declaration is a form of malpractice.
Student’s signature:

Grading grid
P1 P2 M1 M2 D1

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Summative Feedbacks: Resubmission Feedbacks:

Grade: Assessor Signature: Date:

Internal Verifier’s Comments:

Signature & Date:

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Assignment Brief 1 (RQF)

Higher National Certificate/Diploma in Business

Student Name/ID

Number:

Unit Number and Title: Unit 18: Global Business Environment

Academic Year: 2020-2021

Unit Assessor:

Assignment Title: ASSIGNMENT 1 – Drivers & challenges for globalization

Issue Date:

Submission Date:

Internal Verifier Name:

Date:

Submission Format:

Format:

 This assignment is an Individual report.

 You must use font Calibri size 12, set number of the pages and use multiple line
spacing at 1.5. Margins must be: left: 1.25 cm; right: 1 cm; top: 1 cm and bottom: 1
cm.
 You should use in text references and a list of all cited sources at the end of the essay
by applying Harvard referencing style.
 The recommended word limit is 2000-2500 words (+/-10%), excluding the tables,
graphs, diagrams, appendixes and references. You will not be penalized for exceeding
the total word limit.
 The cover page of the report has to be the Assignment front sheet 1 (to be attached with
this assignment brief).

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Submission

 Students are compulsory to submit the assignment in due date (slot 18) and in a way
requested by the Tutor.
 The form of submission will be a soft copy posted on http://cms.greenwich.edu.vn/.
 Remember to convert the word file into PDF file before the submission on CMS.

Note:

 The individual Assignment must be your own work, and not copied by or from another
student.
 If you use ideas, quotes or data (such as diagrams) from books, journals or other
sources, you must reference your sources, using the Harvard style.
 Make sure that you understand and follow the guidelines to avoid plagiarism. Failure to
comply this requirement will result in a failed assignment.

Unit Learning Outcomes:

LO1. Analyze the key factors which drive globalization.

LO2. Determine the strategic complexities associated with operating in a global environment.

Assignment Brief and Guidance:

*This assignment guidance is for reference only and can be customized by the tutor to meet
specific needs

Assignment scenario.

Recently, there is a trend that some Japanese firms considered to withdraw their manufacturing
plants from China to establish new ones in other countries like Vietnam. As an intern of an
investment consulting company in Vietnam, you are required to support your team to prepare a
report to a potential Vietnamese client to review the effects of globalisation and its drivers and
challenges toward the Vietnamese company and its industry. This is to convince their potential
Japanese partner to corporate with the Vietnamese company in expanding business to Vietnam
market.

The Vietnamese and Japanese firms can be freely chosen by the student within the industry
that your tutor/lecturer suggested.

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 Structure of the Report:

General introduction: main purposes and structure of the work.

Main contents of the report:

1. Define the concept globalization in terms of different dimensions: economic, cultural,

political and social. Give examples to illustrate your explanation.
2. Discuss key drivers affecting a specific industry to go globalization based on Yip’s
model. Evidences should be provided to justify your argumentation.

Based on your above discussion, analyze the main opportunities and threats for the
companies operating in the chosen industry face because of the globalization process.

In addition to that, you should evaluate with reasonable justification which are the key
opportunity and challenge for a specific company in the chosen industry or the industry
in general.

3. Explain the complexity of strategic challenges faced by organizations when operating

in a global environment (examples should be provided). In specific:

Identify some of the most influential international trade laws and discuss the impacts
of them on MNCs.

Explain how the global economics may impose more risks to MNCs and how MNCs
may respond to this challenge with their diversification strategy of entry modes.

Explain the difficulties for MNCs when managing a global supply chain (including
global sourcing, production and distribution).

To further enhance your work, when discussing each type of strategic complexity, you
should provide specific examples on which MNCs facing that challenge and how they
responded to the challenge.

A conclusion to summarize all the key findings and analysis must be presented. Plus, you can
conclude whether globalization has done better or worse to MNCs and how to encourage the
good side and mitigate the bad side of it to businesses.

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Unit assessment criteria

Pass Merit Distinction

LO1 Analyze the key factors which drive globalization

LO1 & 2

P1 Analyze key factors of M1 Critically analyze the D1 Critically evaluate the

cost, market, environment and impact that key factors have global business environment,

competition that drive global upon the global business including the opportunities

commerce and trade. environment in terms of and challenges faced by

benefits and challenges. organizations.

LO2 Determine the strategic complexities associated with
operating in a global environment
P2 Explain the complexity of M2 Critically analyze
strategic challenges faced by strategic challenges in context
organizations when operating of risk and diversification
in a global environment strategies and the supply chain
supported by specific flow.
examples.

Table of Contents

ASSIGNMENT BRIEF 1 (RQF)............................................................................................................................3

HIGHER NATIONAL CERTIFICATE/DIPLOMA IN BUSINESS .....................................................................................................3

EXECUTIVE SUMMARY.................................................................................................................................................8
I. INTRODUCTION.....................................................................................................................................................9
II. DEFINE THE CONCEPT GLOBALIZATION................................................................................................................9
2.1. Economic dimension......................................................................................................................................10
2.2. Political dimension.........................................................................................................................................12

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2.3. Social dimension.............................................................................................................................................14
2.4. Culture dimension..........................................................................................................................................16
III. YIP’S MODEL......................................................................................................................................................20
3.1. Introduction to the dairy industry..................................................................................................................21
3.2. Industry globalization drivers.........................................................................................................................23
3.3. Opportunities.................................................................................................................................................28
3.4. Challenges.......................................................................................................................................................29
IV. GLOBAL STRATEGIC COMPLEXITIES...................................................................................................................30
4.1. International trade law..................................................................................................................................30
4.2. Diversification strategy of entry modes.........................................................................................................32
4.3. Global supply chain management..................................................................................................................34
4.3.1. Supplier........................................................................................................................................................35
4.3.2. Producer......................................................................................................................................................40
4.3.3. Difficulty of TH True Milk............................................................................................................................42
V. CONCLUSION......................................................................................................................................................44
REFERENCE................................................................................................................................................................ 45

EXECUTIVE SUMMARY

This report will be addressed to the WTO Economic conference, which will strengthen the positive
impact on MNCs, and on all, worldwide, of globalisation. The conference will address drivers and
challenges for globalisation. TH True Milk selected this article as the subject. This is a leading Vietnamese
dairy brand and has excellent annual sales. The head office of the brand in Nghe An. The paper explores
the key factors for globalization in a specific sector, based on the Yip model. The paper also analyzes TH
True Milk's global economy by using the PESTLE model. Based on the SWOT study, TH True Milk

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Company's threats and challenges in the face of globalization are discussed. By way of research, the
competition between well-established and new dairy companies is rising. Moreover, TH True Milk is also
heavily regulated by the government due to its tight laws, which strongly influence the TH True Milk
economy. TH invests in major games to mark its name with strong rivals in the industry to solve these
problems. TH True Milk is also following a plan for the penetration of global markets.

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 I. INTRODUCTION
The goal of this task is to discuss the larger role that certain organizations have in the world. The
students will appreciate the nuances of the operation in an international context and this will make it
possible for them to have a broader and more comprehensive view of the actual or aspiring global reach
of an organization. This will encourage students to bring value to an organization because they can apply
their expertise to advise top - level managers (in large or small organizations) on global issues that they
can not usually take into consideration.
II. DEFINE THE CONCEPT GLOBALIZATION

Globalization is the spread across national borders and cultures of goods, technology , knowledge, and
employment. Economically speaking, it explains the interdependence of free trade-friendly nations
around the world (Carol M. Kop, 2020).

On the one side, globalisation, through the cross - border flow of goods, resources and labour, generated
new employment and economic development. This rise and production of jobs, on the other hand, does
not spread evenly through sectors or nations. Specialized industries in some countries have experienced
significant disruption or failure, as a result of increased foreign competitiveness, such as the textile
manufactures in US or the maize farming industry in Mexico (Carol M. Kop, 2020).

Globalization is a economic, social, cultural, political.

 Socially, the contact between different groups increases.

 Globalization culturally reflects the interchange between cultures of ideas , beliefs and creative
expression.
 Globalization has, politically speaking, shifted attention to intergovernmental organizations, such
as the UN (United Nation) and the World Trade Organisation (WTO).
 In economic terms, globalization has a lot to do with people's economic practices.

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 II.1. Economic dimension
- Definition
As a result of the the scale of cross - border trade in goods and services, the influx of international capital
and the widespread and rapid spread of technology, economic globalization refers to the the
interdependence of world economies. It reflects the continuing growth and shared globalization of the
economy 's borders and, at the turn of the millennium, represents an unavoidable trend for economic
development around the world. The two main drivers of economic globalization are the increasingly
growing importance of information in all fields of productive operation and marketing. In other words, in
recent years , the rapid globalization of the world's economies has primarily centered on the rapid
growth of science and technology, a function of the environment in which the economic structure of the
economy has increasingly grown around the world, and has developed on the basis of a growing cross-
border division of labor that has penetrated to the level of production (definitions.net, nd).

Through a rapid increase in the cross - border movement of goods, services, technology and capital,
economic globalization is an increasing interdependence of national economies around the world. While
globalization focuses on the rapid growth of science and technology and the growing cross - border
division of labor, economic globalization is driven by the growing importance of information in all modes
of production and marketing and the advancement of science and technology. Economic globalization
may be viewed, depending on the setting, as either a positive or a negative phenomenon
(definitions.net, nd).

The globalization of output, markets, competition, technology, and companies and sectors involves
economic globalisation. While economic globalization has taken place over the last few hundred years,
under the General Agreement on Tariffs and Trade and the World Trade Organization, countries have
begun to reduce trade barriers and increase their current accounts and capital accounts at an
accelerated pace over the last 20 to 30 years. This recent boom has been largely attributed to the
integration of developed economies with less developed economies through foreign direct investment,
trade barriers and, in many cases, cross - border migration (definitions.net, nd).

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Globalization has created a fundamental change in human economic activities, changing the nature and
position of the market. In recent years, the pace of life is increasingly fast as well as modern day, the
living needs and living standards of the people are increasing. Globalization is not only about thinking, it
is also about the global markets of services and goods, finance and money, especially electronic
technology. These outstanding developments have helped people improve their living needs, which is
evident in the annual GDP index.

From 2002 to 2018, GDP per capita in Vietnam increased 2.7 times, reaching over $ 2,700 in 2019, with
more than 45 million people out of poverty. The poverty rate fell sharply from over 70% to less than 6%.
In 2019, the Vietnamese economy continues to show a strong foundation and high resilience, thanks to
high domestic demand and export-oriented manufacturing. Preliminary figures show that real GDP
increased by about 7% in 2019, close to the growth rate in 2018 and that Vietnam is one of the countries
with the highest growth rates in the region (worldbank.org, 2020).

GDP INDEX IN VIETNAM FOR 5 YEARS

Years
7.08

7.02
6.81
6.68

6.21

2015 2016 2017 2018 2019

(Source: www.gso.gov.vn)

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Looking at the above data, it can be seen that in recent years, the level of economic growth in Vietnam is
quite high due to globalization as well as the opening to knowledge and technology from the country. In
order to help people improve their knowledge and their living standards are also increasing, that means
GDP increases every year. On the other hand, globalization also brings disadvantages to the economy.
First, because the facilities in Vietnam are not as good as those in the world, so when implementing
development projects, it will face many difficulties. Finally, the quality of human resources is still low, the
rapidly developing and modern society now means that the citizens of that country must have enough
knowledge and strength to be able to return. At present, however, there are still quite a number of
students in Vietnam who still do not have jobs because most of them are not economic enough to
pursue their studies to have enough knowledge for the jobs that companies want.

II.2. Political dimension

- Definition

Political globalization is one dimension of a phase that is multidimensional (not just economic), historical
(in millennial proportions) and transformative (in changing planetary institutional structures). Conceiving
political globalization in evolutionary terms (as one that depends on innovative search and selection
sequences) allows the development of a global policy timetable and the elimination of global priority
issues from the agenda (O’Brien and Williams, 2010).

The amount of political collaboration that occurs between different countries refers to political
globalization. This is related to the assumption that “umbrella” multinational institutions are better
placed to deter conflict than individual states. The League of Nations founded after WW1 was
undoubtedly one of the leaders in this. Global organizations, such as the World Trade Organization
( WTO), the United Nations ( UN) and more regional organizations, such as the EU, have since helped to
increase the level of political globalization (O’Brien and Williams, 2010).

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Economic globalization is the most important aspect of globalization. It is strongly affecting the political
realm. Joining the WTO brings not only many benefits to countries in general but also to Vietnam in
particular. The first is constructive resolution of trade conflicts. As trade increases in volume, the number
of products exchanged, and the number of countries and companies participating in trade, there are
more opportunities for trade disputes to arise. The WTO system helps to resolve these disputes
peacefully and constructive. If left alone, these disputes can lead to serious conflicts. One of the rules of
the WTO is that members are obliged to bring their disputes to the WTO and cannot be resolved
unilaterally. When they bring disputes to the WTO, the WTO settlement procedure is to focus their
attention on the principles. Once the principle is established, countries must focus their efforts to comply
with it, and perhaps then renegotiate the principles - not declare war on each other. Nearly 200 disputes
have been settled in the WTO since its inception. Without a means of resolving these disputes in a
constructive and synchronous way, some of them could have led to more serious political conflicts. Next
is the reduction in the cost of life. The WTO global system has reduced trade barriers through
negotiation and the introduction of the principle of non-discrimination. The result is lower production
costs, lower prices for finished goods and services, and ultimately lower costs of life. So far, the trade
barriers have been reduced a lot compared to before. These barriers continue to be reduced and we all
benefit.

In the WTO, there are not always advantages. On the other hand, there are many conflicts. The approval
of the World Trade Organization (WTO) for the US to annually tax up to 7.5 billion USD on EU exports has
increased the risk of a new tariff war between the US and the EU. the risk of becoming a costly
commercial battle and it is likely that neither side will win. Currently, the business world of both sides is
still closely monitoring the latest developments to prepare for the impact of "tit for tat" between the two
sides. According to trade organizations, if the war between the two sides officially breaks out, it will
become a drag on the world's largest economy. The dispute between the two sides of the Atlantic could
further threaten a 1.300 billion USD trade relationship, which in turn continues to drag global trade
growth further down from 2019. (Anh, 2020).

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 II.3. Social dimension
- Definition
The social dimension of globalization refers to the effect of globalization on people's lives and jobs, on
their cultures and on their societies. Social globalization implies processes that connect a relatively large
number of social links to territorial geography, in such a way that human life is increasingly taking place
as a single place in the world (Garcia - Bresó, 2020).

Concerns and questions about the effects of globalization on jobs, working conditions, salaries and social
security are also discussed. Beyond the field of work, the social dimension includes stability, community
and identity, inclusion or exclusion and the coherence of communities and societies (Garcia - Bresó,
2020).

Social globalization refers to the sharing of ideas and information between and across different
countries. The Internet and social media in today's world are at the center of this. Internationally popular
movies, books and TV shows can provide good examples of social globalization. All over the world, Harry
Potter / Twilight movies and books have become successful, making characters globally recognizable.
However, this cultural flow (i.e. from developed countries such as the USA to less developed countries)
seems to flow from the centre. Economic globalization is often blamed for eroding cultural differences
(Garcia - Bresó, 2020).

Along with economic challenges, globalization is posing to our country great social challenges. The first is
unemployment and underemployment. Since our country started to integrate, the economy has become
more dynamic. The economic sectors have a strong development base, but the competition between
them is somewhat more fierce. It is that competition that has made many production establishments,
many businesses go bankrupt, and many production establishments have to reduce the payroll. That
situation increases the contingent of those who are underemployed or underemployed. According to
data, at present, unemployment in urban areas is still quite high, and underemployment in rural areas is
still very serious.

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In the coming years, the integration process will require a more qualified workforce. If the Vietnamese
workforce is not trained and prepared in terms of technology and management, the unemployment
situation will not only not decrease but also increase the risk. Unemployment and underemployment are
also one of the causes leading to the rich and poor differentiation - the axis of social stratification. In fact,
the rich - poor differentiation is an inevitable result of the market mechanism. Through the results of the
sociological survey in many provinces throughout the country, we can see that the majority of
respondents think that the rich and poor differentiation is a normal phenomenon. Some scholars believe
that the current rich-poor disparity in Vietnam is a consequence of the repeated social justice.

Number of workers in the unemployed age

by level
Quarter 2 - 2019 Quarter 1 - 2019

Vocational elementary school

Vocational schools

Junior college

University

0 20 40 60 80 100 120 140 160 180

(Source: www.gos.gov.vn)

This number is given in Vietnam Labor Market Newsletter No. 22, Quarter 2/2019. Accordingly, in the
second quarter of 2019, the nation had 1,054 thousand unemployed, a decrease of 4.82 thousand
compared to the first quarter of 2019 and a decrease of 7.19 thousand compared to the second quarter
of 2018. This is the fourth consecutive quarter in which the number of unemployed has declined since
the second quarter of 2018. The unemployment rate for working - age employees is 2.16%, lower than in
the previous quarter and in the same timeframe last year. The university-specific unemployment rate

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rose by 0.57% year – on - year and 0.26% year – on - year. The unemployment rate at the college level
rose by 0.07 per cent but decreased by 0.47 per cent from the same period last year. In comparison, the
intermediate unemployment rate decreased by 0.14 per cent and 0.45 per cent respectively. The
unemployment rate in the primary community decreased by 0.01% and 0.28% respectively (gso.gov.vn,
2019).

With the benefits that globalization brings to society such as creating a link for the country, helping the
intersection between more developed countries, promoting import and export, creating jobs for people.
do and have more opportunities to use and learn new things from these. At the same time, the
socialization of globalization also brings many disadvantages to the people because the developed
society needs high knowledge resources to be selected, but currently in Vietnam there are still quite a lot
of people not qualified to work.
II.4. Culture dimension
- Definition
Cultural globalization is a phenomenon that represents the standardization of cultural expressions
around the world through the experience of daily life, as informed by the diffusion of goods and ideas.
Globalization has been seen as a movement towards homogeneity, driven by the productivity or
attractiveness of wireless networking, electronic commerce, popular culture and international travel,
which will ultimately ultimately make human experience the same everywhere. However, this tends to
be an overstatement of the phenomenon. Although there are certainly homogenizing forces, they are far
from creating anything comparable to a single world society (Karl Thompson, 2017).

Food globalization is one of the most evident examples of cultural globalization. Food consumption is a
significant part of culture and diets are unique to most cultures around the world, but fast food
companies such as KFC, Lotteria and Jollibee have encouraged the cultural globalization of food.
Arguably, the spread of these multinational food firms has contributed to the loss of local diets and
eating practices.

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 Figure 1 KFC in Viet Nam

(Source: www.vnexpress.net)

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 Figure 2 Lotteria in Viet Nam

(Source: www.kenh14.com)

Figure 3 Jollibee in Viet Nam

(Source: www.jollibee.vn)

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KFC, an acronym for Kentucky Fried Chicken - is one of the fast-food brands under Yum Brands Group
(USA). Lotteria is a chain of fast food restaurants belonging to Lotte Group - one of the five largest groups
in Korea. Jollibee is a chain of fast food restaurants that was born in 1974 in the Philippines.

Figure 4 Revenue of Jollibee, KFC and Lotteria

(Source: www.brandvietnam.com)
These three brands are also among the top names in the fast-food market share, entering the market at
an early point. In 2019, the combined sales of these three chains amounted to almost 4.300 billion VND,
a rise of more than 11% compared to 2018. However, the growth rate has a large difference, which
progressively reduces the distance between these three brands.

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KFC and Lotteria are the two leading chains with revenue of VND 1.498 billion and VND 1.683 billion
respectively, their positions are partly established thanks to early entry into the market. Compared to
the two leading brands, Jollibee is a bit underdog because partly entered the Vietnamese market later
than KFC and Lotteria, but in general, Jollibee's revenue is not too low but low here see more than the
top two brands.

Due to learning about the culture as well as the eating trends of other countries, nowadays young people
and office workers in Vietnam are gradually eating more fast food because partly it is convenient for
their jobs. they do not spend too much time waiting for a dish to eat and fast food restaurants have
comfortable spaces where you can eat and chat. can even eat while working. But in contrast, fast food
also has disadvantages. Fast food has too many calories, which can easily lead to obesity and health
problems. Currently in Vietnam, children love to eat fast food so obesity in children is increasing, this will
make children carry many diseases in their bodies. Results of a nutrition survey on 17.213 subjects aged
25 to 64 in 64 provinces / cities representing 8 ecological regions nationwide showed that the
overweight / obesity rate (BMI>23) was 16.3%, in which the pre-obesity rate is 9.7% and the obesity rate
of level I and II is 6.2% and 0.4%. The rate of overweight / obesity is increasing with age, higher in women
than men, and higher in urban than in rural areas (32.5% and 13.8%). The rate of belly fat (high waist
circumference ratio) is 39.75% and increases with age for both men and women) (Diep, 2019).

III. YIP’S MODEL

The drivers of business globalization are the fundamental circumstances of any business that give rise to
the opportunity to use a global strategy. The managers of a multinational company need to know when
the complexities of business offer the opportunity to use global policy levers in order to gain the
advantages of globalisation.

Four forms of drivers of globalization can be grouped into these business conditions: market, cost,
government, and competition. The potential use of global strategy levers (global market participation,

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global products and more) is affected by every major factor in the globalization of industry.That is why it
is important to consider how the drivers of the globalization of the market have an impact on the
challenge of entry and competition of existing competitors.

Figure 5 YIP’S MODEL

(Source: www.weebly.com)

III.1. Introduction to the dairy industry

Vietnam's dairy and dairy products manufacturing and processing industries have developed dynamically
in recent years , providing a wide range of products for national economic life, meeting domestic

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demand. Step by step, replace imported dairy products and engage in exports with a range of designs
and styles. In addition, the industry made major contributions to the state budget, created many jobs for
workers, helped to ensure people’s lives and stabilize the social situation, and became an important link
in Vietnam’s agriculture.
Due to being in the group of essential products, even in the gloomy years of businesses in the entire
economy, dairy firms still maintained strong double - digit growth. In the coming years, with population
growth, increasing people’s income leading to more spending, and increasing Vietnamese interest in
health care products, the dairy industry is expected to continue. continue to maintain this growth
momentum. Vietnam’s dairy industry has great potential for development and is being focused by
domestic and foreign investors.

Through the financial advisory of Bac A Commercial Bank, TH Dairy Products Joint Stock Company was
established under TH Group. Business and social welfare programs in addition to financial services.
Special attention is paid to investment in the field of milk and food processing at Bac A Commercial Bank.
Through this point of view, TH Group is gradually transforming itself into a leading supplier of sustainable
food products in Vietnam. Now TH True MILK pasteurized fresh milk is part of TH’s product portfolio. TH
Group also develops TH Group retail systems TH Milk Food has invested in a modern management
system and a closed and synchronous process according to international lawn planting standards.

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 Figure 6 Products of TH True Milk

(Source: www.thmilk.vn)
III.2. Industry globalization drivers
 Market drivers

Pioneering in opening new markets, new ways, with enthusiasm, ceaseless efforts and methodical plans
and strategies, TH has introduced products for public health, international quality, pride of Vietnamese
brand to the world.

The announcement ceremony of the first batch of Vietnamese dairy products allowed to be exported to
the Chinese market on October 22, 2019, organized by the Ministry of Agriculture and Rural
Development, marked a particularly important turning point for the dairy industry of Vietnam in general
and TH Group in particular. If 10 years ago, a number of Vietnamese enterprises imported powdered
milk from China to reconstitute, so far, a Vietnamese enterprise has exported clean fresh milk to this
potential market of 1.4 billion people (An, 2020 ).
TH Dairy Products Joint Stock Company is the first enterprise eligible to be granted a transaction code by
the General Department of China Customs, allowing for official export of two groups of dairy products,
including: pure pasteurized fresh milk and pasteurized fresh milk. and supplement natural flavoring
according to the Protocol on Veterinary Requirements and Public Health for Vietnamese dairy products
exported to China. So TH Group has officially got a “passport” to enter the Chinese market, the market
with the second largest consumption of milk in the world and also a country with a large number of
people.

In the Russian market, after 3 years of presence in this country, TH had a company in 2 districts of Kaluga
province with the farm and the factory started - when inaugurated, it would be a factory with a large
capacity for processing milk. most Russia. In Moscow province, the farm has been and is being built, the
forage storage has also been completed, TH has imported cows from the US into Russia since the

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beginning of 2018. Currently, when TH dairy factory is under construction TH's raw fresh milk line is
ordered by Europe's leading dairy companies

Far East regions of Russia and the Republic of Bashkortostan have invited TH to invest, it is expected that
in early 2020, these project areas will begin to cultivate and build parallel farms. Thus, in Russia, TH has 4
the region is implementing investment plans.
 Cost drivers

TH Group invests heavily in a high quality management system and in a closed, synchronous system for
production of grass, building barns and processed cattle feed in compliance with international standards.
turning and wrapping before items are shipped to customers. A large-scale farm in Southeast Asia has
been established in Nghia Dan district, Nghe An province with a total investment capital of 1.2 billion
USD. According to Ms. Thai Huong - General Director of North Asia Bank is also the first consultant. In the
project finance, the 37,000 hectare farm is currently nurturing and successfully tending fully imported
breeding herds from New Zeanland with nearly 20,000 heads. It is expected that by 2007, there will be
137,000 It will be an abundant source of input for TH's modern milk processing factory to reach a
maximum capacity of 500 million liters / year, meeting 50% of the dairy product demand of the domestic
market. In addition, the company has a sugar factory and a milk processing factory.
The organization has also invested in an automated milking system: the Automated and Machine Milking
Center (Israel, in its Spanish initials Aflimilk). The source of this milk is sorted into waste immediately.
This automatic milking method with modern machines restricts common cow diseases such as mastitis as
well as controls ingredient quality. The ingestion of milk is done in detail. Ther has also developed the
true market retail chain TH in order to deliver products to consumers rapidly, safely and conveniently.

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 Figure 7 TH True Milk farm

(Source: www.thmilk.vn)

 Competition drivers
For investors in the dairy industry, now is a “sensitive” time because the brightest star of the current and
future industry will belong to TH true Milk. According to observations, in the last 2 years, Vinamilk only
grew at 5-6%/year on average, while TH true Milk still grew by tens of percent per year.

Specifically, in 2018, Vinamilk continued to achieve a record revenue of more than VND 52.500 billion, an
increase of 3% compared to 2017, according to Vinamilk's unaudited financial statements. However, the
profitability of the largest dairy company in Vietnam has slowed down after 3 years of double-digit
growth.

In the fourth quarter of 2018, Vinamilk’s after-tax profit increased by 32% year-on-year to VND 2,284
billion, but it did not pull the profit down in the first 3 quarters of the year. The company recorded more
than 10.200 billion VND in after-tax profit, down 1% compared to 2017. Meanwhile, if TH true Milk's
2014 net profit was 27 billion VND, this number would have doubled in 2015 and reached 130 billion in
2016.

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Starting in 2017, TH True Milk continues its rapid growth. Net profit in 2017 reached 319 billion VND and
in 2018 was 450 billion VND. Comparing 2018 with 2014, it can be seen that, after only 5 years, TH true
Milk’s net profit has increased 15 times.

In 2018, TH True Milk reached the revenue milestone of more than 7.000 billion VND, faster than the
roadmap set by Ms. Thai Huong, the Group's founder for TH True Milk.

Experts believe that, if TH true Milk will boldly develop comprehensively through both baby milk powder
and functional milk powder for all ages like Vinamilk and Nutifood. In which, with a strong and
methodical investment strategy as done with fresh milk and yogurt, TH true Milk's position in the next 5-
10 years could completely threaten Vinamilk's No.1 position.

Figure 8 TH True Milk and Vinamilk

(Source: www.f.thuongtruong.com.vn)

26
  Government drivers
- Policy on cattle breeding development
On October 26, 2001, the Prime Minister of Vietnam issued Decision No. 167/2001 / QD-TTg on a
number of measures and policies to develop dairy farming in Vietnam during the period 2001-2010.
2014, the Ministry of Agriculture and Rural Development issued Decision No. 458 / QD - BNN - CN on
policies to encourage and support the development of dairy cow breeding to 2020, with a vision to 2030.
Also in 2014, the Ministry of Agriculture and Rural Development. Rural Development Department issued
Decision No. 984 / QD - BNN - CN approving the project “Restructuring the livestock industry towards
increasing added value and sustainable development”, which sets out the criteria to strive for the
industry. Vietnam dairy farming to 2020. Accordingly, by 2020, the total herd of cows will reach 300,000
heads, the total output of milk will reach more than 0.9 million tons, 100% of dairy cows are raised in the
form of farms and public husbandry. industry, only to develop dairy farming in traditional areas and
capable of investing in high technology (dairyvietnam.com, n.d).

- Policies on developing the dairy processing industry

On June 28, 2010, the Ministry of Industry and Trade issued Decision No. 3399 / QD-BCT approving the
Master Plan on the development of Vietnam's dairy industry to 2020, with a vision to 2025. Specific
objectives are as follows:

Year Yield in milk (billion Milk consumption rate Rate to meet Raw fresh milk Export turnover
s liters) (liter/person) domestic demand (million liters) (million USD)
2015 1.9 21 35 660 90 - 100
2020 2.6 27 38 1000 120 -130
2030 3.4 34 40 1400 150 - 200

Table 1 Target of the dairy industry for 15 years

(Source: www.dairyvietnam.com)

- Policy on managing milk prices

27
Since 2014, the Government of Vietnam has implemented Decision No. 1097 / QD-BTC dated May 20,
2014 on the application of price stabilization measures for dairy products for children under 6 years old.
Besides, milk prices for children under 06 years old continue to be implemented by the Ministry of
Finance to stabilize prices according to regulations. As of November 30, 2015, 787 milk products for
children under 06 years of age have been announced their maximum prices, registration prices, and
declared prices on the website of the Ministry of Finance and the Department of Finance. localities
(dairyvietnam.com, n.d).
III.3. Opportunities
It can be seen that the current globalization helps Vietnam in general and TH True Milk Group in
particular have more opportunities to develop, but also learn knowledge in your country. Firstly, the
globalization helps TH True Milk to have more opportunities to learn as well as bring the secrets of dairy
farming from countries around the world. Next, TH True Milk can bring products of the S - shaped
country to more countries around the world so that they can use products from Vietnam. Finally, people
can take nutritional supplements from many countries. Specifically, it can be seen that thanks to
globalization, after more than 7 years, with the leadership of the Ministry of Agriculture and Rural
Development’s leadership, the close and effective coordination with the Chinese Embassy. in Vietnam,
the Vietnam Embassy in China, the Ministry of Industry and Trade, together with the efforts and efforts
of the Department of Animal Health and other relevant agencies inside and outside the Ministry of
Agriculture and Rural Development, as well as the With determination of the business, Vietnam's dairy
products have officially obtained a passport to enter China, one of the most potential markets in the
world, with a population of more than 1.4 billion people and a huge demand for milk and dairy products.
The fact that China officially allows the import of dairy products from Vietnam shows that Vietnam’s
dairy industry is developing and integrating with the world. Dairy enterprises have built centralized
farming models, applied high technology, 4.0 technology in production and management, closed from
green grasslands to clean milk cups, and ensured dairy products. The production completely meets the
strict regulations and regulations of the Chinese market. Opening the Chinese market will create great
opportunities for Vietnam's dairy industry and dairy production and processing.

28
 III.4. Challenges
The opening of the door also brings many challenges for both the dairy industry and the whole TH True
Milk group. Open as well as globally, many foreign brands will expand the market in Vietnam as well as
overwhelm Vietnamese dairy brands. Nowadays, many parents choose to use imported milk products for
their children instead of their own brands. The rise of “portable” dairy products spreading in the market
is a challenge affecting consumption volume of domestic dairy enterprises. Currently, many domestic
dairy enterprises depend on imported dairy materials, so they will be affected by the price and supply
and demand of raw milk in the world, especially from exporting countries to Vietnam. These are big
challenges for the whole Vietnamese dairy industry in general and for TH True Milk in particular.

About the past 2 months, the monthly necessities of Mrs. Phuong Trinh’s family (Phu Nhuan district, Ho
Chi Minh City) have added a new item, pasteurized fresh canned milk. This is a new product launched
recently by dairy companies with raw materials made from fresh cow’s milk, twice as expensive as
pasteurized canned products due to the absence of preservatives and a much shorter shelf life (less than
10 days. compared with 6 to 12 months). Despite the high price, Ms. Trinh said that milk is an
indispensable commodity for families with small children like her family (Vu, 2020).

According to a recent study by SSI Securities Firm, milk is a product that is less affected by the Covid-19
outbreak, with the first 6 months of the year just a 4 per cent decrease in value compared to a 7.3 per
cent decrease in growth of FMCG (Fast Moving Consumer Goods) products in Vietnam. According to a
survey conducted by a market research firm, the demand for premium milk has been a pattern of
shopping for this sector over the next 3 to 5 years. This pattern can also be seen not only in liquid milk,
powdered milk.

The difference that occurs in liquid milk is that customers tend to choose products with a shorter shelf
life, made from grains to replace animal milk, in powdered milk will be the rise of the special product line
such as calcium supplement, milk for diabetics. Vietnam's per capita income will continue to increase in
the next 5 years, increasing consumer demand will look for products with better quality, natural origin
and better taste.

29
High - end powdered milk segment is the playground of foreign representatives such as Abbott and
Friesland Campina is expected to continue to grow due to welcoming new middle-class customers.
Meanwhile, in the liquid milk segment, which has been an advantage of the domestic group in recent
years, because more competitive prices will no longer be an advantage, when the import tax is 0%. The
bigger challenge is that the quality of imported fresh milk is always valued higher than domestic fresh
milk when consumers can easily compare the protein and fat content in 100 ml, which are two weak
nutritional components. decisive factor to the quality of fresh milk.

IV. GLOBAL STRATEGIC COMPLEXITIES

IV.1. International trade law

International trade law is a complex environment and is being changed day by day. Commercial law
requires laws and regulations to settle trade disputes between countries. Since transnational
transactions between nations are becoming increasingly important in economic growth activities, law is
becoming an important part of the study of many universities around the world. This is far wider than
international economic law, because the scope of international trade law is vast. This legislation often
refers only to the laws of the WTO, but also to the laws governing the international monetary system
and the monetary regulations.

In essence, there is four levels of international trade law: unilateral (national law), bilateral (free trade)
ties, plurilateral and multilateral agreements (GATT / WTO). The international trade law has four levels.
In order to create a trade forum where trade-related issues are discussed and publicly negotiated, the
WTO was created. Individuals, private companies or non-governmental organizations may also engage
indirectly through their government in this global business forum. Efficient discussion and negotiation,
however, where people have a proper understanding of the WTO’s roles and responsibilities. WTO
principles are based on consensus through member-country negotiations. In addition, these values are
ratified by the member states’ parliaments. Understandably, as it is agreed with the consent of the
Member States, the WTO has a direct effect on the policies of a nation.

30
One of the WTO’s principles is that Member States should be encouraged to reduce trade barriers and to
promote free trade. After all, the members themselves profit from increased trade as trade barriers
become smaller. The way they negotiate depends on how they are able to eliminate trade barriers, what
they want to negotiate, and whether they profit from each other.

There are clauses in WTO agreements that concentrate on construction advantages. Both economic
growth and development assistance would be encouraged through free trade. Trade and creation are
mutually encouraging in this context. At the same time , ongoing discussion in the WTO also focuses on
developed countries’ interests. This does not mean that the World Trade Organization. There are several
clauses in WTO agreements that take into account developed countries interests.

The atmosphere is of particular significance to many of the WTO rules. The most important of these are
safeguards (for example, Article 20 of the General Agreement for Tariffs and Trade) which enable a
World Trade Organisation, as well as the conservation of natural resources, to take measures to protect
the lives or health of its children, men, animals or plants. In addition to these basic principles, each
agreement on a specific topic includes detailed provisions on environmental protection. In each of the
WTO agreements on commodity standards, food security, intellectual property rights etc. the
environmental priorities are taken into account in a very precise way.

It is also advantageous, but less, to export countries towards lower water barriers. But domestic
producers and workers in countries with lower barriers (pre - protected), as trade barriers are lower,
have a strong new competitiveness. Due to their competitiveness, some domestic producers have
persisted. Some integrate more easily by finding new workers. The WTO deals in a variety of ways with
this problem. Liberalization in the WTO trade system is slowly occurring, which allows Member States
the time to make the changes needed. Many of the provisions in the agreements permit a Member State
to introduce a variety of measures in order to mitigate import harm. Strict rules and procedures must, of
course, be followed.

31
 IV.2. Diversification strategy of entry modes

Gradually globalization is evolving into a trend. National corporations are also increasingly improving to
the planet. PESTEL is one of the powerful tools before the start of the game to reach a new market. In
order to recognize opportunities and obstacles for entering the new world, analysts will focus on political
(P), economic (E), social (S), technological (T), environmental (E) and legal (L) variables.

- Political: This affects everybody in a territorial region. This is a factor. The viability and
development of any industry may affect institutional and legal factors. If companies work in an
administrative unit, they must comply with the regulatory elements in this field.

- Economic: Every economy is cyclical, the organization can take the necessary decisions for itself
at all points of the economy cycle. Economy-related factors. Example: rates of interest, inflation,
etc. The government's economic policies. For instance: fundamental wage rule, government
economic growth policies and policy choice for all sectors: tax cuts, grants, etc. Example: rate of
growth, GDP growth rate, GDP to invest ratio, etc.

- Technology: New communications technology helped to bridge geographical gaps and

transmission in the field of information technology. Compet with the transfer rates and scopes of
details.

- Environment: This applies to nature, climate change, animals and pollution. This will require
businesses to pay a high cost to safeguard the ecosystem.

- Legal: Each company must comply with international law and national law when entering the
international business climate. These laws protect the company on the one hand, but restrict
growth on the other.

32
Businesses must pay attention both to short-term and long-term economic conditions and to
government economic activity. In order to make investments within industries and regions, companies
will also rely on economic factors.
The economic state: Every economy has a cycle, and the company will take its own decisions in any
certain span of the economic cycle.

- Economic factors: rate of interest, inflation.

- Economic policies of government: minimum wage law, economic growth plans of government,
incentives for industries: tax reductions, subsidies, etc.
- Future economic prospects: growth rates, GDP growth rate, GDP capital ratio.

Advantages Disadvantages
- Relatively low exposure - Tariff and NTBs (Non
to finance. Tariff Trade Barriers)
- Enable radical entry into vulnerability.
the market. - Complexities of logistics.
Exporting
- Acquire local business - Potential distributor
awareness. disputes.
- Escape foreign
investment limits.
Licensing - The financial hazards are - Restricted opportunities
tiny. and income for the
- Low cost approach of market
assessing business - Licensee dependency.
potential. - Potential licensee
- Stop taxes, NTBs (Non disputes.
Tariff Trade Barriers), - Opportunity to build
foreign investment potential rivals.
limits.
- The licensee offers local

33
 business awareness.
- The financial hazards are - Opportunities / profits
tiny. restricted to the market.
- Low cost approach of - Licensee dependency.
assessing business - Potential licensee
potential. disputes.
- Avoid taxes, NTBs (Non - Opportunity to build
Franchising Tariff Trade Barriers), potential rivals.
foreign investment
limits.
- Keep more power than
licensing.
- Franchisee offers
business awareness

IV.3. Global supply chain management

A supply chains is the network of all the operations that have led to the customer's supply of a finished
product.

SCM (Supply Chain Management) covers cooperation and communication with vendors, intermediaries,
third-party service providers and customers channel partners and combines supply and demand
management throughout and within organizations.

Supply Chain Management includes the management and planning of all activities related to
procurement, purchasing, development and all activities related to logistics management. Applicants
shall communicate and work with stakeholders in the same platform as suppliers, agents, service
providers, consumers etc. Supply chain management covers all management practices from logistics
management, production and the organization of marketing , distribution and product design systems,
finance, the IT divisions.

34
 IV.3.1. Supplier
Raw milk material supply TH True Milk has built a closed system of livestock farms, providing itself with a
humus milk processing factory in Nghia So, Nghia Dan, Nghe An.

Figure 9 Suppy chain of TH True Milk

(Source: www.slideshare.net)
 Cows
With the small number of cows originally imported from Israel, now about 45,000 cows are cared for
under a clean process. Cows are fed with clean grass, drink clean water, listen to music, massage, .. the
whole process is managed by machinery to ensure the best and cleanest milk quality.

To ensure the clean milk production process, TH True Milk has a team of experts from Israel who advise
and follow up on the correct way to care for cows, a team of highly qualified engineers are often sent to
learn from experience. The famous dairy producing regions such as New Zealand, Australia, Canada and

35
the workers involved in the management of milk production are strictly trained before entering the farm.
TH True Milk's model and production line are built on its perfect chain. The financial plan creates a
capital of 1.2 billion USD to spend on the phases of a long - term project. The plan in 2014 is to be over
45.000 dairy cows, in 2017 it is 137.000 cows, at present, TH has 45.000 milk cows centrally and 22.000
are lactating. The hiring of top livestock experts and dozens of dairy farmers of the Jewish country come
to Nghia Dan to take care of each cow and hire international financial and management experts.

TH’s dairy breed is a high - yield HF breed and thanks to a well - applied nourishment, care and diet
process applied on the TH farm every day, the yield per cow can reach 30 - 40 liters a day. Current
average milk production is approximately 400 tons of fresh milk / day and will increase rapidly in the
coming years. This high - tech vision has enabled TH to build a centralized dairy farm system in
accordance with international standards of high technology. The only feed for cattle has been delivered
to the Israeli expert team, through the TMR system with dedicated mixing software Rationall and Onel.

This state of the art system can meet the nutritional needs of the dairy cow, to create a high - quality
milk supply and retain essential micronutrients for humans. The management of cows is completely
computerized by TH using the technology of attaching electronic chips to the legs on each cow. This
helps to control cow health, reproductive period and diseases.

Cows are milked in a completely automatic, self - contained system, the milk is cooled directly before
entering the tank to ensure the milk produced always meets food safety and hygiene standards. Then,
cow’s milk is transported to the modern processing and packaging factory to produce fresh, delicious
and nutritious dairy products. All these stages are strictly controlled by a team of leading Irsaelic experts
and the most modern technology in the world.

 TH farm
TH dairy farm in Nghia Dan, Nghe An (currently with a scale of 45.000 heads) started construction in
September 2009, on February 27, 2010, a convoy of large trucks with the slogan “Determination
homeland construction ”carrying 1.500 cows HF from New Zealand landed on the farm in North Phu Quy,

36
Nghia Dan, Nghe An. Rounded after 10 months, on December 26, 2010, TH first fresh milk line entered
the market, creating a real revolution in the production and consumption of fresh milk. At that time, the
Vietnamese dairy market was in a serious imbalance, with more than 92% of liquid milk processed from
reconstituted milk, now that ratio has dropped to 70%.

The application of high technology on the farm has created great breakthroughs in creating fresh milk for
TH. In a closed cycle, cows are fitted with chips to monitor the cycle of reproduction and health. Cows
are carefully calculated for their nutritional content with a diet of 12 dishes per day from ingredients
grown from TH farm, and are bathed and listened to classical music many times a day to produce the
highest quality milk. Milk is squeezed into the tank system, cooled automatically for 30 seconds, enough
to sterilize but still retain almost intact nutritional value. According to agricultural experts, the success of
TH's large - scale medium - sized dairy farm marked a breakthrough in the livestock map in Vietnam, and
the tropical country is still considered not entirely suitable for dairy farming.
 Packaging
After more than 10 years of launching the market, TH True Milk has been selected and highly
appreciated by consumers. Besides the decisive factor is the quality of input materials, the application of
modern production and packaging technology is also an important factor to help consumers the cleanest
and most refined milk cans.

TH true MILK sterilized fresh milk applies UHT sterilization processing technology with ultra-high heat
treatment and ultra fast cooling to help kill bacteria, microorganisms or harmful fungi while keeping
maximize the nutrients and natural taste of the product. The finished milk is then packaged in 6 - layer
sterile paper packaging in a completely sterile environment, in which each layer will have a different
function. TH true MILK pasteurized dairy products are therefore safe and have a shelf life of up to 6
months without the use of preservatives and refrigeration. Currently, TH true MILK sterilized fresh milk
products are using the packaging of Tetra Pak (Sweden) and SIG Combibloc (Germany), both of which are
produced on modern technology lines, the most advanced in the world.

37
Packaging structure consists of 6 layers. The products using these two types of packaging are similar in
terms of image, information content on the package, price, quality of packaging in milk storage, net
volume, product quality is completely the same. fully complying with the standard that TH has
announced to customers and is licensed for circulation by the regulator. However, there is a slight
difference in appearance due to the two suppliers using different machine-made systems.

On the surface, the SIG Combibloc box looks shorter and bigger, but the actual volume inside is
unchanged compared to the Tetra Pak box. It is also easy to see that the back weld of the Tetra Pak
packaging is in the middle, and SIG Combibloc's is on the edge of the milk box. Corresponding to this
back weld, the placement of the two types of straws are also in different positions. In addition, you can
see on the milk box with the logo of the packaging manufacturer, this is the best way to distinguish the
two types of packaging Tetra Pak and SIG Combibloc.

Figure 10 Distinguish between Tera Park packaging and Combibloc packaging

(Source: www.thmilk.vn)
Currently, TH uses SIG Combibloc packaging together with Tetra Pak packaging for all TH true MILK
sterilized fresh milk products 180 ml and 110 ml, including flavors: pure, low sugar, has pure sugar,

38
strawberry and chocolate flavor. In addition, SIG Combibloc packaging is also used for TH true YOGURT
pasteurized drinking yogurts and TH true NUT milk.

Although it is designed with 6 solid layers, the packaging manufacturer also recommends that customers
store, transport and layering according to the instructions to avoid the case of the milk carton being
affected by external mechanics or being affected. rodents damage the packaging, creating a gap for
microorganisms to enter and grow to damage the product.
 Sugar
TH highly bought the sugar factory Tate & Lyle (headquartered in Nghia Dan, Nghe An), this company
decided to sell the sugar factory, Nghe An province has asked this enterprise to sell to enterprises in the
province. Because before that, Nghe An contributed equity capital in land for this enterprise. However,
because at the time of signing the capital contract, Nghe An lacked experience in negotiating with
foreign partners, so it was not allowed to establish any binding conditions. Therefore, Tate & Lyle
ignored the offer of Nghe An and bid with 20 international bidders. However, at that time, TH True Milk
quickly registered the planning of the whole Nghia Dan raw material area, including the sugar cane area.
This means, any partner who buys Tate & Lyle must go through TH True Milk’s hands to have material
areas for production.

This high - profile move resulted in TH winning over 20 international contractors, officially owning Tate &
Lyle. This deal was voted as the merger with the biggest factor in the market in 2011. Although it was in
the hands of the most modern sugar factory in the country, Ms. Thai Huong said that TH absolutely did
not intends to step into the sugar industry and buy this factory for the purpose of TH's milk production.
IV.3.2. Producer

TH Milk Joint Stock Company (TH True Milk) has just opened a modern dairy factory in Nghe An province.
This is considered as the largest fresh milk factory in Southeast Asia. The clean fresh milk factory is part
of TH Group's large-scale industrial dairy and concentrated dairy processing project. This is the largest
private investment project in the agricultural sector in Vietnam with a total investment of up to 1.2
billion USD.

39
After 2 years of construction, the factory officially put into operation phase 1 production line cluster with
a capacity of 200,000 tons a year. The total designed capacity of the factory is up to 500,000 tons a year
in 2017. Ms. Thai Huong, founder of TH Group, said the inauguration of the clean milk factory in Nghia
Dan district, Nghe An, helped the corporation into a chain of value chains from green grasslands to clean
milk glasses including raw material zone planning, feed factories to dairy farms, the largest fresh milk
processing factory in Southeast Asia and the distribution system coordinating TH True Mart with modern
technology standards in the world.

Figure 11 The inauguration ceremony of TH True Milk factory

(Source: www.thmilk.vn)
Fresh milk factory is equipped with modern equipment imported from G7 countries and Europe. The
entire operating system is in accordance with ISO 9001. The factory products are manufactured and
managed according to ISO 22000 to meet strict food safety and hygiene standards.

Especially, the yogurt production line here applies robot technology, which is the first technology used in
Vietnam, to automate all stages to ensure product integrity throughout the process. submit. All

40
production lines are controlled by the latest software in the world in the dairy processing industry,
namely TPM, TQM.

The factory uses the raw materials of TH Milk farm’s fresh milk right at Nghia Dan. All products are made
entirely from 100% pure fresh cow’s milk through the nutritional testing processes such as protein, fat,
antibiotic testing, physicochemical and microbiological criteria.

Figure 12 TH True production line

(Source: www.thmilk.vn)
 Software
The whole production line is controlled by the latest software in the world in the dairy processing
industry, namely TPM, TQM.
IV.3.3. Difficulty of TH True Milk

With the largest dairy farm system in Southeast Asia, TH True Milk brand of TH True Milk from TH Dairy
Food Joint Stock Company has been mentioned as the pride of Vietnam in recent years. . However, few
people know that hundreds of households near the farm are living in an unsecured environment and are
languishing for resettlement and relocation policies.

41
As reflected by some households in Dong Lam village, Tan Lam (Nghia Lam commune, Nghia Dan district,
Nghe An province) located next to cluster 1 (including 3 dairy farms) of TH True Milk, for many years they
have to live in a state of pollution from the stench of sewage, cow manure, insect infecting from TH True
Milk farms. Not only that, the water from the former wells is very clean, can be used for drinking and
daily activities, but since the cow farm was built, the water pumped up is often bubbly, cloudy and has a
fishy smell.

Mr. Tran Van C., (Nghia Lam village) annoyed: “My house is only a few tens of meters from the dairy
farm, so every day, I have to suffer the stench from cow manure in the farms and from the treatment
pits waste management at TH True Milk ”. Mr. C.’s family is also in the resettlement area, more than 2
years ago the units also checked in, but so far this work has not been implemented, and his family is still
waiting for the date to be moved to a new residence.

Talking to the reporter, Ms. Nguyen Thi Thanh Vinh, Chairman of Nghia Lam Commune People's
Committee, said: At the beginning, the factory was working and liquidating the land of the farm, the
equipment was not guaranteed, so there was a situation of direct contamination to the environment.
After the people reflected, the factory partly overcome, now there is a fertilizer treatment plant and
wastewater at the cow farm. On Dong Lam hill (where TH True Milk processes cow manure), according to
Ms. Vinh, the commune also discussed with the enterprise, before giving out cow manure, chemicals
must be treated on the farm.

Currently, TH True Milk’s dairy farm has over 45,000 heads. The leader of TH True Milk said that in order
to solve the environmental problem thoroughly, the company is currently handling the biogas system in
cluster 2. This system has been implemented since 2014 and tries to complete in year 2016.

On the other hand, because during the process of transporting goods, there was a case that the
representative of TH Food Chain Joint Stock Company came to the house to apologize to the customer to
buy a carton of maggots. Nguoi Lao Dong Newspaper on the morning of February 25, Ms. Huynh Thi
Minh Tram, customer care manager - TH Food Chain Joint Stock Company, said that she came to Tran Dai

42
Nghia's family (living in Buon Ma Thuot city, Dak province. Lak) to apologize for the employee's mistakes
in the sales process and the employee’s non - standard attitude when Nghia came to reflect the
damaged product.

According to Ms. Tram, at the meeting, she explained to the client the cause of the organism appearing
in the milk carton. At the same time, it is suggested that Mr. Nghia work with the authorities to take
samples of the damaged products and return them to the company for inspection. At the same time, the
company will take samples of products with the same batch of goods on the market and samples of
products in storage to inspect and verify the cause of the organism in the milk carton. After the results
are available, the company will reply in writing to Mr. Nghia and announce on the media for customers'
peace of mind.

According to Mr. Nghia, after being represented by TH Food Chain Joint Stock Company to work, explain
and apologize, he agreed to apologize. The representative of the company also discussed the handling
direction of the salesperson and the shop manager. However, Mr. Nghia asked the company to give the
staff and the shop manager a chance to correct the mistake.

Regarding the incident, Ms. Vu Thu Hang, Media Director - TH Food Chain Joint Stock Company, said that
through observation, the bag of milk was damaged, the milk was flowing out. The above phenomenon
can occur during transportation, storage and distribution on the market, the product's packaging has
been affected by external forces, causing damage to the packaging, enabling microorganisms to enter. ,
develop gas to cause bloating. When the bulging milk flows out and seeps into the barrel, it is not
detected in time and fresh milk is a nutrient-rich environment, creating favorable conditions for
microorganisms to enter, grow, develop and lead to phenomenon as customers reflect.

V. CONCLUSION

43
The economic factor is most influenced following the study of globalization and four economic, social ,
political and cultural influences. Next is the Yip model analysis. There are 4 drivers who are market
diversion driver, cost driver, competition driver and government driver impacting the globalization of
business. By using the Yip model with TH True Milk, the effect of the four drivers on the growth of the
business can be clearly seen. Finally , the study revealed the world's most relevant foreign trade laws and
addressed how the global economy would place MNCs at increased risk. It also addressed how MNCs
would solve this problem in their diversification strategy for entry mode and how MNCs can deal with
problems in the management of a global supply chain.
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