VIETNAM NATIONAL UNIVERSITY IN HO CHI MINH CITY

University of ScienceITEC

THE CASE STUDY OF MEAD JOHNSON VIETNAM COMPANY

Group : FAITHAdvisor : NGUYEN HUU DANG KHOA

Ho Chi Minh City, Vietnam2013

1. INTRODUCTIONa) Background :

- We all know milk is good for people's health,in the market today there are countless types of milk for all age,such as Dutch Lady, Vinamilk, Abbott... , and the most common is milk for children, but with the current economic situation and competition between brands, there are some companies report the wrong concentration of the components in box, such as the Mead Johnson milk company with Enfagrow A+

a) Background :

- Mead Johnson has been known by product line Enfa A + , such as EnfaMama A +, Enfalac A +, EnfaPro A +, EnfaGrow A +, EnfaKid A +. In addition, the company has also developed specialized products to meet the special nutritional needs of children- At the end of the month 6-2008, after the Ministry of Planning and Investment of Ho Chi Minh City grant a permit for Vietnam BMS Company, the parent company of Mead Johnson Nutritionals, Mead Johnson Nutritionals Vietnam officially became a 100% foreign capital.

1. INTRODUCTIONb) Reasons :

- The reason why we choose this company because this is one of many famous milk companies in Vietnam. There're many many mothers who did not hesitate to put a large amount of money to buy milk for there children because they believe in the function parameters of milk. The majority of mothers believe this milk and believe it good for their children. But in recent times, milk was having a lot of trouble, such as milk with "super profits" when the price of milk is nearly 2.5 times the price of capital; arbitrary ad listing price , the appearence of imitation, ... And, most recently, the company is accused that they were published wrong concentration of the components

b) Reasons :

- Milk is an important food for young children. For infants, in addition to breast milk or with young children, in addition to the main meal, milk powder can say is that the side dishes, provide more essential for your baby. But for action warping function of the company's milk is an unacceptable action, as it may affect your baby's health.

1. INTRODUCTION

3. Reaserch question :

- So what is the reason of this action? And what is the result of this action? And how did they answered customers about this problem?

2. METHODOLOGY

3. DISSCUSSION :a) Internal :

i/ Raw material :

- This is raw material after be checked :

Before AfterCalcium 560 1.640Protein 17 2.54Fat 16 2.72Fibre 3 0

i/ Raw material :

Reasons __ because depend on resource, high investment

__quantity, quality, price, kind, structure of material__cut material to reduce capital, save material to reduce density in business cost__reduce high price material and increase low price material__excess or shortage of raw materials in the production of__material in the water does not meet the terms of quantity as well as quality

i/ Raw material :

Affect

- Bout customer's health : if enough calcium absorption, baby 's bone will be strong, but if too much calcium in the body, the body will not be absorbed as well as to excreted completely, so will cause kidney stones in user.- People will no longer trust, reputable companies will decline

i/ Raw material :

Solution :

- The only way to solve this problem is balance the concentration of components in the milk properly in the box to regain the trust of customers. They should flexible in finding suppliers to ensure quality and quantity of raw materials required for production, not to happen stagnant or shortages of raw materials, and shall minimize the cost of doing business use of raw materials.

a) Internal :

ii/ Business Pressure :

- There are many things that cause a severe pressure for the business and production:+ Structure of corporate governance+ Wage labor

+ Business finance+ Facilities, engineering and production technology

ii/ Business Pressure :Affect

- But what consequences ? They will do everything to meet all that. Cut money to reduce capital costs, competition, based on customer trust to deceive them, and sell for theim low-quality products, not required. Do everything to offset capital, improve the financial situation of enterprises. In the long run, their reputation in the market will be affected, and the amount the consumer will be reduced.

ii/ Business Pressure :Solution :

- Solution of the group that is on the quality assurance of the production.Can cut costs by reducing the amount of product to ensure quality. So they will have enough merit to compete with other dairy companies in the market. In addition, we need to improve the popular ideology of foreign goods than domestic goods of the people to relieve pressure on the company. We need a method reasonably calculated so as most effective is determined by economic output and cost of inputs in the business.

3. DISSCUSSION :b) External:

i/ Community :

- the demand for Vietnam's milk market rising higher by the effects of income- the population and the high rate of infant has created a markethuge milk. But while demand is so big that the supply does not meet the expectations of consumers and the economy difficult. - the idea favored foreign over domestic goods has caused a high disparity between domestic and foreign goods, causing pressure on the company.

i/ Community :- unemployment, education, style, culture and lifestyle also affect the production process. If people have the choice then surely the cost of the employer of the company will be higher, but will reduce the efficiency of production, and vice versa. But if there are too many unemployed will lead to source reduction, reducing production efficiency. Do not stop there, ambushing.

- education is also a major problem, affecting the ability to train and acquire.

i/ Community :

- culture also contributed. If overseas, people focus on work attitudes, they take care of product quality. But in Vietnam, people often wait out of time to go home, company image, product quality, the superior resolve all. Add as a fear of losing their jobs that they do not dare publicly violating the company's ethics. - the state's economic policies, economic growth, inflation, the average income per capita is one of the factors leading to the production process violations in business.

i/ Community :Solution :

- the company should open online programs in order to solve all the problems of our customers.- people's thoughts on the foreign goods and should be changed. Vietnam State should reduce the burden and pressure in business by encouraging consumers to use Vietnamese goods, promote domestic industry, balancing the weight of domestic and foreign goods.- economically, the policy of the Government to encourage businesses to expand capital, curbing the inflation rate at a reasonable level will create conditions for enterprises in general and Mead Johnson particular company developing productionimprove production efficiency in the business.

b) External:

ii/ Law:

- Vietnam is soft law, not written clearly and specifically, no criminal sanctions, administrative enough deterrent for ethical business object, or change - the penalty is too low, is not enough to affect the company.

ii/ Law:

- the understanding of law in the business of business is limited

- Nor outside of the case, knowledge of law, but for the sake of business, they are willing to break the law, despite causing severe consequences for consumers, the economy, and even for the company itself. When uncovered, prosecutors ethical violations, they remain silent and refused to explain their mistakes.

ii/ Law:

Solution

- We should develop consumer protection associations in order to protect the rights and create a voice for customers. It would be useful to have the text, increase the fine, can not tolerate all the ethical violations by the company.

4. CONCLUSION

- So, why the company Mead Johnson, a company with 100% foreign investment capital to has this action? It's all for profit.

- Not only that, many dairy products are competing in the market Viet Nam. So the company has chosen to cut the high cost of raw materials, instead promoting the raw material cost lower to higher profits.

4. CONCLUSION

- The warping content in milk Enfagrow A + shows unethical behavior in the business of Mead Johnson Vietnam. There are many reasons for this action of the company, objective as well as subjective.But this action also makes us see the serious consequences it has caused.

4. CONCLUSION

CONSEQUENCES:

- This action not only affect the company's consumers, customers, but also affect the economy and the Vietnamese dairy market. + On consumers+ For buyers+ To the company+ To the law

4. CONCLUSIONRESOLUTION

- About the company :+ should have the meeting to explain clearly about this issue more and more obvious, not only to consolidate people's confidence in the product, but also guarantee the company will not do this unethical action again+ do not remain silent or get too general reasons that explain a problem is serious and affects people's health

RESOLUTION

+ the company should withdraw all products of administrative violations in the field of standards, metrology and quality products to ensure that goods and to avoid more serious consequences later on+ companies more flexibility in choosing investments, calculated that between capital and profits, output as well as in a reasonable way, not to exceed the difference.

RESOLUTION

- The State :

+ should have a clearer decrees on sanctioning this behavior, increase fines sufficient deterrent+ need to reduce the pressure on business by reducing the pressure, encourage the use of domestic goods, try to invest and develop the quality of domestic products, balance the energy consumption of domestic goods and imported; keeping inflation reasonably.