Unilever Wall's Ice Cream in Vietnam In April 1996, whers first proposal to set up a partnership with the "Vietnam Milk Corporation" to construct a factory was refused by Vinamilk (the govemmental dairy producing corporation), Unilever received approval from the Ministry of Planning and Investment for a US$22 million to set up its own factory to produce and sell Wall's ice cream in Vietnam. Since economic improvements had begun to increase people's incomes in the early 1990s, ice cream sales in Vietnam's cities had been on the rise. The plant, scheduled to open in early 1997, was to be situated in Cu Chi district, 35 kms north west of Ho Chi Minh City, close to the popular tourist attraction of the Cu Chi tunnels and in an industrial zone attracting an increasing number of foreign investors seeking to avoid high land and labor costs in the city. The factory was to be equipped with the latest production technology and designed to have an initial capacity of some 12 million liters annually, expected to rise to around 20 million litres About 80% of the necessary raw and packaging materials would be available locally. In late 1997, it was estimated that Vietnamese ice cream consumption stood at around 0.1 litres per capita annually, or about 10-15 million litres. This level was considerably lower than that of other countries in the region - Thailand and Malaysia, for example, had an annual consumption of 2.5 litres per capita per year (as against over 25 litres in Australia and 20 litres in the United States) However, ice cream consumption in Vietnam was expected to rise to some 50 million litres annually over the next decade, and with its investment of tens of millions of dollars in the
Unilever Wall's Ice Cream in Vietnam
In April 1996, whers first proposal to set up a partnership with the "Vietnam Milk Corporation" to construct a factory was refused by Vinamilk (the govemmental dairy producing corporation), Unilever received approval from the Ministry of Planning and Investment for a US$22 million to set up its own factory to produce and sell Wall's ice cream in Vietnam. Since economic improvements had begun to increase people's incomes in the early 1990s, ice cream sales in Vietnam's cities had been on the rise. The plant, scheduled to open in early 1997, was to be situated in Cu Chi district, 35 kms north west of Ho Chi Minh City, close to the popular tourist attraction of the Cu Chi tunnels and in an industrial zone attracting an increasing number of foreign investors seeking to avoid high land and labor costs in the city.
The factory was to be equipped with the latest production technology and designed to have an initial capacity of some 12 million liters annually, expected to rise to around 20 million litres About 80% of the necessary raw and packaging materials would be available locally.
In late 1997, it was estimated that Vietnamese ice cream consumption stood at around 0.1 litres per capita annually, or about 10-15 million litres. This level was considerably lower than that of other countries in the region - Thailand and Malaysia, for example, had an annual consumption of 2.5 litres per capita per year (as against over 25 litres in Australia and 20 litres in the United States) However, ice cream consumption in Vietnam was expected to rise to some 50 million litres annually over the next decade, and with its investment of tens of millions of dollars in the country,Unilever looked forward to capitalizing on this potential market.
Several factors made Vietnam an ideal market for ice cream. It was a country with a tropical climate and a high population density, of which a large proportion were young - 70% under 30 years old - and who regarded ice cream as a nutritious as well as appetizing form of snack food. "We intend to open up the market," said Unilever's general manager in Vietnam. "I think the market is ripe."
The Competition
Baskin Robbins: the U.S. ice cream maker, had three franchises in Ho Chi Minh City and one in Hanoi at the time of the Wall's launch. In April 1997, it was selling around 100 6kg boxes of ice cream in 31 different flavours per month. It imported all its equipment and ice cream directly from the United States. It claimed its customers preferred American ice cream, which was "real" ice cream. About half its customers were Vietnamese.
Vinamilk: the state-run dairy products company, made around 5.5 million litres of ice cream annually for the domestic market.
Dong was a typical Vietnamese manufacturer, with acerage sales of 150-200 k of of various type of ice cream per day. It imported refrigeration equipment only.
Domestic manufacturers such as Vinamilk and Dach Ding had the grow, with the imported Baskin Robbins 20 times more expetarve, and beyond the reach of many.
Goody ice cream an Italian brand unufactured in Ho Chi Minh City with raw material, technology and machinery imported from Italy, was 20-30% expensive than local brands.
In early 1997, Baskin Robbins reduced the price of a 75g ice cream come from VND 18,000 to VND 15,000. Bach Dang ice cream sold at VND 10,000 - VND 20,000 per cup, and Vinamilk at VND 11,400 per litre
Question:
5. Analyze Wall's ice cream elements of the organization environment with respect to ?
a)natural environment
b).Societal environment
c. Task environment
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