VNU - INTERNATIONAL SCHOOL

International Strategic Management

Group Report

Group members:
1. Nguyễn Thanh Nga
2. Khiếu Phương Linh
3. Bùi Minh Trang
4. Hoàng Thị Thu Thảo
5. Lê Thị Hải Vân

The report on Takitimu Case

Table of Contents

I. GENERAL INTRODUCTION TO ICE CREAM MARKET IN VIET NAM 1

II. 5 FORCES OF TAKITIMU. 2

III. SWOT OF TAKITIMU. 3

IV. STRATEGIES AND BUSINESS MODEL 4

I. General introduction to ice cream market in Viet Nam

Ice cream is a very attractive dish, especially for hot weather. This is an attractive
market, however, Vietnam has not exploited all its potential. In developed countries, each
person consumes 20 liters of ice cream a year. Thailand and Malaysia are 4 lit.
Meanwhile, the average consumption of ice cream by Vietnamese people is only about
0.3 liters. According to a survey conducted by a Singapore-based research company, in
2004, its annual sales reached VND 667 billion. This number shows that it is not a small
market, the annual growth of this item is about 15-20%. (Source: Agriculture and Agri-
Food Canada).
Particularly like Kido's, Monte Rosa, Vinamilk as the growth rate is growing faster. In
2007 Kido's growth was 25%. In 2008, based on the hotter weather all year, Kido's plans
to increase its growth rate to 30% and will continue to roll out 5-7 new models with
endorsements. Marketers forecast that the Vietnamese ice cream market will continue to
grow for a number of reasons.

II. 5 forces of Takitimu.

1. Bargaining power of suppliers: Low

The main materials of Takitimu are fruit and ice-cream. These are very easy to find, so
there are a large number of suppliers who are ready to provide their materials for
Takitimu. Because this is not a differentiated product and the number of suppliers is
large, the suppliers do not hold bargaining power against Takitimu and the ability to
raises prices.

2. Bargaining power of buyers: High

The power of buyers is high to Takitimu. This is because customers have a lot of choices
to eat ice-cream such as Trang Tien ice-cream, NZ ice-cream or ice-cream in
convenience stores and supermarkets. Therefore, it is hard for Takitimu to raise the prices
or forces customers to purchase their products at higher rate. If so, customers will simply
shift to another competitor.

3. Threat of new entrants: High

The food and beverage industry has very few barriers of entry. It is also cheaper to start
up a restaurant or beverage store than any other business. Also the product of Takitimu is
not so unique, new entrants can easily imitate it and compete with Takitimu. Thus,
Takitimu should focus on entry of any new entrant that might become a threat in the
future.

4. Threat of substitutes: High

There are number of substitutes for ice cream and these include fruits, soft drinks, froze
desserts (such as frozen yogurt), confectionery, smoothies, ... All of these industries are
highly competitive.

For example, two large global companies (Coca Cola and Pepsi) and with strong brands
dominate the market for soft drinks. This, combined with low switching costs, makes the
threat of soft drinks high. Besides, Vietnam produces a great variety of summer fruits
(watermelons, pineapples, melons, pears, ... The prices are very low and consumer can
obtained it with a cheaper price compared to ice cream price

5. Competitive rivalry: High

The Vietnamese ice cream market is being received more and more strong investment
from foreign brands, such as: Baskin Robbins, Bud’s, Fanny, Snowee, Haagen Dazs, ...
Brands in the world have entered and increased brand identity through the continuous
expansion of retail store. Meanwhile, domestic enterprises are also expanding (KDF,
Thuy Ta, Vinamilk,)

III. SWOT of Takitimu.

Strength Opportunity
 The beverage sector is a potential sector
 The supply is stable. future development, especially in Hanoi
 Large market demand. with the heat is hot demand for ice cream
 Products are diverse and organic, or drink the higher the drink.
healthy and prices.  Ice cream is a favorite dish of many
 Low entry barriers. people, Ice creams are usually reserved
for gatherings drink of friends, family,..
Weakness Threat
 There are many poor quality ice cream
 It’s new so it has not built the brand
items on the market or other
in the market.
subtitudes.
 Inadequate staff.
 Customers are increasingly
 There are many competitors.
demanding of products and services.
 Source of imports is too far,
 This is a new store started business so
increasing costs.
it has not had many customers and not
 The position of store is not attractive attract potential customers.
and stable.
 Products of the company are not
different from the current products on
the market.

IV. Strategies and business model

So far, although Takitimu has been launched for 2 years, but with the capital of
600 million VND, Takitimu only earned 250 million VND as their profit. The
problem is that Takitimu has to spend a considerable amount of money buying ice
cream machine and raw materials almost completely imported.

There prominent weakness is that they are stuck in the middle. Their ice-creams
are more expensive than that in the retail stores and supermarkets and not
differentiated enough compared to ice-cream restaurant ( such as fanny ice-cream,
Thai taste, Trang Tien ice-cream ,…)
 So, if we acquire the same ice-cream machine from New Zealand to sell ice-
cream , we will not consider our products as tangible products like ice-cream that you
can buy at supermarket, instead, we provide a service and serve customers different
than others. Therefore, our components will be Ice-cream restaurants.

To compete with other ice-cream restaurants, we will choose to best- cost

provider strategy for the following reasons:

 Vietnamese customers are high price sensitive. And if ice-cream are not
noticeably different and deserve high price, they can just try the service for a
short time.
 Ice-cream is a product that receives most love from the young in Vietnam.
Considering their preference, we have to care about price

 We cannot compete with low price ice-cream of big producers such as KDF,
Vinamilk, …

Because to maintain the low price in long run is difficult, we have a different business
model

 Target customers: domestic Travelers, foreign customers who is visiting Dalat or

care about Dalat.
 Distribution/ Channels:
o Main distribution channels: famous fresh fruit farms in Dalat. We will place
one machine in each farm and deliver ice-cream base to each farms with
just in time method to restock. The farmers won’t have to pay for machine
rent and are able to keep their money for selling fresh fruits, but we will
take the rest money of sold ice-cream apart from fruits’ price. Besides, we
will pay cost to marketing for the farms and commit to increase their sales.
We also willing to use our other distribution channels to sell their products
 aside from fruits (fruit syrups which has longer usage time than fruits- of
course).

o Few Small ice-cream truck travel around the central or southern beaches in
Vietnam. Because there are hot and temperate climate in both places, Hanoi
has only 4-5 months hot. Today, ice cream stalls are only available for
selling packaged ice cream from company, so if Takitimu sells ice cream at
beaches, it will also attract more tourists because of the exotic ice cream
made from fresh fruits and made directly by order. We use trucks as a way
of marketing for the ice-cream also. Besides, it’s convenient if we want to
stop at a beach and build a small temporary, flexible stall at some beach in
boiling days. There will be time the trucks traveling to the North of
Vietnam and create a long and fun tour for customers.

 Resources:
To create unique features of the product and to minimize the cost of importing
raw materials, we will corporate with farms in Dalat. Therefore, although we have
many fruits (different flavors), we will focus on strawberry the most. As fruit is
quickly fragile, rotten, stamping if transported for long distance.

And to create cream-base, we also want to use pure milk from Da Lat milk farm, and
build an Ice-cream store and small ice-cream base production near the farm.