1. Intro Team (Vân)
1.1 Intro Team: (Pham Hoang Hai Van) (15 giây)
Hello everyone, my name is Pham Hoang Hai Van, I am from Team 7. My team
consists of 4 members.And today we will bring to you "Strategic Analysis and
Operational Challenges in SABECO's Growth and Market Positioning". The
following will be Thach Bao Minh's presentation on information about
SABECO.
2. Intro SABECO (Thach Bao Minh)
2.1 Introduction information (50 phút)
Today we are discussing SABECO – Saigon Beer, Alcohol, and Beverage
Corporation, the market leader in Vietnam’s beer industry for 148 years.
SABECO now has a very wide spread of networks, with 26 breweries and 11
subsidiaries. As well as beer production, SABECO is famous for brands such as
Saigon Chill, 333 and Saigon Gold. Responsible consumption; contribution to
the society; conservation of local culture are the key words that constitute the
vision of the company in the field of sustainable growth. With SABECO, it’s
more than a business; it’s a legacy in Vietnam’s beverage industry.. 

Scene 1

1. Intro Team (Vân)
1.1 Intro Team: (Pham Hoang Hai Van) (15 giây)
Hello everyone, my name is Pham Hoang Hai Van, I am from Team 7. My team
consists of 4 members.And today we will bring to you "Strategic Analysis and
Operational Challenges in SABECO's Growth and Market Positioning". The
following will be Thach Bao Minh's presentation on information about
SABECO.
2. Intro SABECO (Thach Bao Minh)
2.1 Introduction information (50 phút)
Today we are discussing SABECO – Saigon Beer, Alcohol, and Beverage
Corporation, the market leader in Vietnam’s beer industry for 148 years.
SABECO now has a very wide spread of networks, with 26 breweries and 11
subsidiaries. As well as beer production, SABECO is famous for brands such as
Saigon Chill, 333 and Saigon Gold. Responsible consumption; contribution to
the society; conservation of local culture are the key words that constitute the
vision of the company in the field of sustainable growth. With SABECO, it’s
more than a business; it’s a legacy in Vietnam’s beverage industry.

[Audio] SABECO, the market leader in Vietnam's beer industry for 148 years, is known for its wide range of products, including Saigon Chill, 333, and Saigon Gold. These outstanding products have contributed significantly to the company's growth and success.. 

Scene 2

Some outstanding products of Sabeco
Source: (Sabeco, 2023)
Image of tourists trying Sabeco beer
Source: (Vy Nguyen, 2022)

[Audio] The external environment surrounding SABECO is characterized by several factors. Strict government regulations, including the 2020 Alcohol Harm Prevention Law, restrict sales and prohibit drunk-driving, negatively impacting beer consumption and affecting SABECO's revenue. However, as the beverage industry contributes significantly to the national budget, supportive policies are crucial for sustainable growth. Vietnam's GDP growth of 6.42% has boosted purchasing power, presenting opportunities for SABECO during festivals. Additionally, stable inflation and a predictable USD/VND exchange rate ensure global competitiveness.. 

Scene 3

Product photos of Sai Gon Export Premium beer and 333 Export beer
Source: (Winmart, n.d.)
External Environment
PESTEL (Vân) ( 4 phút )
Political:
Strict government regulations like the Alcohol Harm Prevention Law (2020),
including sales restrictions and drunk-driving bans, have decreased beer
consumption, affecting SABECO’s revenue. However, as the beverage industry
is a major contributor to the national budget, policies supporting sustainable
growth remain essential.
Economic:
Vietnam’s GDP growth of 6.42% boosts purchasing power, creating
opportunities for SABECO during festivals. Stable inflation at 2.63% helps
control production costs, while the relatively stable USD/VND exchange rate
keeps import costs predictable, ensuring global competitiveness.
SOCIAL:

[Audio] Vietnamese people have a strong connection to beer, consuming it during celebrations and festivals. This cultural tie is reflected in marketing campaigns like “Bia Saigon - Về Nhà Ăn Tết”, which emphasizes brand loyalty. However, increasing labor costs pose a significant challenge for SABECO, prompting the company to prioritize operational efficiency.. 

Scene 4

Vietnamese link their culture to beer, they consume it in their gatherings and
festivals. Such campaigns as ‘Bia Saigon - Về Nhà Ăn Tết’ which are based on
culture, are also tied to brand loyalty. However, profitability pressure is rising
labor costs, which forces SABECO to seek operational efficiency.
TECHNOLOGICAL:
4. Technology
According to Vietnamnet.vn (2022), SABECO focuses on improving production
technology to ensure quality and sustainable development. The company
complies with international standards such as:
● ISO 9001: Quality management.
● ISO 22000: Food safety.
● HACCP: Critical control point.
● ISO 14001: Environmental management.
SABECO's factories apply advanced technology in:
● Waste treatment, raw material recycling.
● Using solar energy and biomass to reduce energy consumption and
protect the environment.
Beer Production Process At Sabeco:
Sabeco's beer processing technology includes 12 steps:
1. Grinding Mill
2. Malt Cooker
3. Filter Pot
4. Boiling Pot
5. Scale Separator
6. Quick Heat
7. Fermentation Tank
8. Beer Brewing Tank
9. Long Cooling

[Audio] SABECO prioritizes environmental concerns, focusing on water management. By optimizing resource use and recycling water, the company minimizes waste and reduces emissions. To achieve this goal, SABECO combines solar energy and biomass with its production processes, meeting international environmental standards. Additionally, the company creates biodegradable packaging and reuses byproducts, aligning with customer expectations for sustainable practices.. 

Scene 5

10. Filter in Beer
11. Bright Beer Tank
12. Beer Brew
Beer Production Process
Source: (Sabeco, Beer Production, n.d.)
ENVIRONMENTAL:
SABECO is very much in the front lines when it comes to environmental issues,
particularly water management." The company saves their resources by
optimizing usage and recycling water.
To reduce emissions, SABECO blends solar energy and biomass with its
production processes and meets international environmental standards, ISO
14001. Also, by creating biodegradable packaging and by reusing byproducts,
they are reducing waste, which also fits in with what customers want when it
comes to sustainability.

[Audio] As we anticipate that proposed tax increases on alcohol products may lead to consumers seeking illicit markets, resulting in lost revenue for both SABECO and the government, it is essential to promote balanced taxation that supports public health and fair trade. To achieve this goal, SABECO has shifted its focus towards campaigns showcasing cultural values while maintaining regulatory compliance. Furthermore, removing export barriers enables the company to shorten logistics, reducing costs by 15% and ensuring competitiveness in international markets. In the beer industry, established players like SABECO face significant barriers to entry due to substantial investment requirements for infrastructure and distribution. Strong brand loyalty and nationwide networks also contribute to the dominance of established players. However, shifting trends towards non-alcoholic drinks pose challenges for all industry participants. Price sensitivity is high among low-income consumers, necessitating SABECO to remain competitive. The company must invest in marketing efforts to retain customer interest in a rapidly changing market.. 

Scene 6

LEGAL:
We anticipate that proposed tax increases on alcohol products will have
consumers resort to illicit markets, losing revenue to both SABECO and the
government.” Balanced taxation supporting public health and fair trade are
SABECO’s advocacies.
With strict laws concerning alcohol advertising, however, SABECO has moved
on to campaigns like ‘Bia Saigon – Về Nhà Ăn Tết’ to showcase cultural values
in all regulatory compliance. Removing export barriers, the company shortens
logistics, reducing costs by 15%, complying and keeping their competitiveness
in international markets.
Industry environment ( 5 Forces ) (Hiệp) ( 4 phút )
Threat of new entrants:
The beer industry has high barriers to entry due to significant investment
requirements for infrastructure and distribution. Established players like
SABECO dominate the market with strong brand loyalty and nationwide
networks. Stricter regulations on beer production and advertising further limit
new competitors. However, shifting trends toward non-alcoholic drinks present
challenges for all players.
Bargaining power of customers:
Price sensitivity is high, especially among low-income consumers, making it
critical for SABECO to stay competitive. Imported and craft beers are drawing
younger, urban consumers. While SABECO has brand loyalty, customers can
easily switch to competitors due to low switching costs. Investments in
marketing are necessary to retain customer interest in a changing market.
3. Supplier bargaining power (Average):
SABECO benefits from diverse domestic and international suppliers, keeping
switching costs low. However, reliance on high-quality materials like imported

[Audio] The beer market in Vietnam is dominated by SABECO and Heineken, creating opportunities for suppliers to exert influence over prices, particularly those providing raw materials. Fluctuations in raw material prices and international market conditions pose challenges for SABECO, which can negotiate favorable terms due to its large purchasing scale. The rise of non-alcoholic drinks and other beverages threatens beer consumption, as do spirits and craft beers attracting premium consumers. Competitors employ dynamic pricing strategies, promotions, and flexible product lines, putting constant pressure on SABECO to innovate. To maintain its position, SABECO relies on its cultural ties and distribution network.. 

Scene 7

hops gives certain suppliers leverage. Raw material price fluctuations and
international market conditions add cost pressures, but SABECO's large
purchasing scale helps secure favorable pricing.
4. Threat of substitutes (High):
The rise of non-alcoholic drinks and other beverages like juices and teas directly
impacts beer consumption. Meanwhile, spirits and craft beers attract premium
consumers. Health-conscious trends and low switching costs make substitutes
an increasing threat, challenging SABECO to innovate and adapt.
5. RIVALRY:
Source: (CafeF, n.d)
Beer market in Vietnam is highly concentrated as SABECO and Heineken
together catch 77% out of the pure beer market. Despite this, SABECO’s market
share has halved from 2018 (42%) to 2023 (34%) owing to the strong
competition from Heineken, Carlsberg and Habeco.
Imported beers, and especially craft, serve up premium positioning for the
younger generation, while global brands such as Heineken and Carlsberg use
innovative marketing and premium positioning to attract new consumers.
Moreover, competitors perform dynamic pricing strategies, promotions and
flexible product lines which put constant pressure for SABECO to innovate.
In this competitive environment, SABECO has to continue relying on its
cultural ties as well as a distribution network to defend its position.

[Audio] SABECO faces challenges in its traditional business model due to strict laws regarding alcohol consumption. To address this, the company can offer non-alcoholic and low-alcohol products to cater to changing consumer preferences. Additionally, working with ride-sharing services can help prevent accidents caused by drunk driving. Furthermore, implementing responsible drinking campaigns and labeling products with 'Drink-Safe' tags can contribute to public health agendas. On the other hand, SABECO also faces intense competition, particularly from Heineken's premium strategies. To counter this, introducing craft beers and premium lines targeting specific demographics can be effective. Expanding distribution networks and boosting brand awareness through cultural campaigns can also help.. 

Scene 8

Problems & Solution ( Nhật ) ( 3 phút )
1. Alcohol Laws (1 Minute)
Compared to other Asian countries, Vietnam has very strict laws about alcohol, for example,
no drinking and driving, very limited advertising, and controlled sales hours to shrink the
damage associated with its use. These laws challenge SABECO's traditional business model
and add new risks to doing business.
Solutions:
●
Offer non-alcoholic and low alcohol products in order to diversify products to meet
changing consumer preferences.
●
Work with ride sharing services to prevent consumers from riding around unsafe.
●
The public health agenda should be followed that involves launching responsible
drinking campaigns, and adding necessary ‘Drink-Safe’ labels on the packaging.
2. Market Expansion (1 Minute)
SABECO faces intense competition, with its market share dropping from 42% in 2018 to
34% in 2023, as Heineken adopts premium strategies to gain ground.
Solutions:
●
Introduce craft beer and premium lines targeting young, health-conscious, and
affluent customers.
●
Expand distribution networks to reach rural and urban markets more effectively.
●
Boost brand awareness through campaigns that highlight Vietnamese culture, using
sponsorships and collaborations with influencers.
3. Solar Energy (1 Minute)
SABECO is advancing sustainability by installing solar power systems at nine breweries,
contributing to Vietnam's green growth goals.
Solutions:
●
Expand solar systems across all facilities and offices.
●
Invest in energy storage to maximize renewable energy usage.
●
Collaborate with local governments to promote clean energy adoption and explore
additional renewable sources like wind and biomass.
●
Regularly report environmental progress to build trust and inspire industry-wide
sustainability efforts.
Process design ( Nhật ) ( 50s )

[Audio] The organizational chart of SABECO displays the hierarchical structure of the company, with the Board of Directors and General Director occupying the highest position. Four Deputy General Directors oversee distinct functional areas, including Marketing, Sales/Distribution, Production/Quality, and Finance. Each department concentrates on strategy, efficiency, and quality. Support functions, such as Internal Audit, Legal, and IT, offer advisory roles to the organization. Authority is represented by solid lines, while dashed lines signify cross-functional collaboration, allowing SABECO to operate efficiently and attain its objectives.. 

Scene 9

Sabeco Organizational Chart
Source: (Sabeco, Sabeco Management System, n.d.)
The Board of Directors and General Director (CEO), are the top managements
of SABECO, and four Deputy General Directors are responsible for Marketing,
Sales/Distribution,
Production/Quality
and
Finance
respectively.
The
Departments on strategy, efficiency, quality focus in these departments.
Some think of Support functions like Internal Audit, Legal and IT as being the
type of support roles for which they need advisory roles. While Solid lines
represent authority, dashed lines represent cross-functional collaboration,
marking ways for SABECO to stay operationally excellent and grow
strategically.
Operation dependencies ( hiệp ) ( 2 min )
SABECO's Division of Labor and Impact Analysis
1. Leadership Board’s Impact on Divisions: The Leadership Board at SABECO
sets the strategic direction, making key decisions such as:

[Audio] To achieve its goals, SABECO's production department plays a crucial role in approving annual plans, setting targets, and investing in technology, enabling the company to optimize its manufacturing processes, increase efficiency, and reduce costs. Meanwhile, the sales and marketing department develops strategies, approves budgets, and sets sales targets, ensuring that the company's products reach the right customers at the right time. The logistics department, on the other hand, oversees procurement and supply chain decisions, guaranteeing that products are delivered promptly and stored optimally. These three departments work together seamlessly, sharing data and insights to ensure that SABECO's operations run smoothly. The finance department, meanwhile, manages budgets, costs, and cash flow across all divisions, providing critical oversight and guidance. By working together, these departments enable SABECO to respond quickly to changing market conditions, adapt to new trends, and maintain its competitive edge.. 

Scene 10

● Production: Approving annual plans, setting targets, and investing in
technology.
● Sales & Marketing: Developing strategies, approving budgets, and setting
sales targets.
● Logistics: Approving procurement and supply chain decisions.
2. Interactions Between Divisions:
● Production & Sales: Sales adjusts strategies based on real-time
production updates and inventory levels.
● Sales & Logistics: Coordination on product availability and optimized
storage and delivery.
● Finance: Works with all divisions to manage budgets, costs, and cash
flow.
3. Impact of Support Divisions:
● HR: Ensures staffing, training, and performance management.
● Finance: Manages budgeting, cost control, and investment efficiency.
4. Coordination Mechanisms:
● Reporting & Approval: Regular reports and KPI evaluations ensure
smooth coordination.
● Problem-Solving: Early identification of issues and cross-department
collaboration ensure efficient solutions.
5. Interdependence in Operations: SABECO’s ability to respond quickly to
market demands hinges on the flexibility and coordination between divisions.
For example, sales adjust strategies based on production updates, while logistics
ensures timely deliveries and optimal storage. This collaboration ensures the

[Audio] The company can maintain high product availability and meet customer demands efficiently by adapting its operations to different markets and offering customized products. This flexibility enables SABECO to respond quickly to changes in demand and remain competitive in the market.. 

Scene 11

company can maintain high product availability and meet customer demands
efficiently (Sabeco, 2023).
6. Departmentalization Types:
● Functional: Based on functions such as production, sales, finance and
HR, these departments become specialized in their every respective
function.
● Product: SABECO offers product lines (Saigon Beer) and closely works
with target groups through production and marketing.
● Geographic: As part of the customization, operations adapt to the needs
of particular markets, as in cities and tourist areas, and can be quite
flexible.
POLC Framework ( bảo minh ) ( 1 min )
For SABECO under CEO Bennett Neo, the CEO is responsible for Planning in
the POLC framework, especially. His strategies for long term growth include
market driven innovation, technology adoption and support of the employee.
Key initiatives include:
Product Expansion: Never ceasing to introduce such products like "Saigon
Chill" and "Bia Saigon Gold" they target other consumer segments.
Innovation and Digitalization: Spending in digital tools to increase production
and to know the consumer behaviour.
Employee and Community Support: Throughout the pandemic Neo never laid
anyone off, keeping the ship stable and full of trust.
SABECO’s Process Design: Inputs, Transformation, Outputs,
and External Environment (EE) ( vân ) ( 1min )

[Audio] SABECO relies on various inputs to support its operations. Raw materials such as barley, hops, and water are converted into beer through precise brewing processes. The company also utilizes its workforce, capital, technology, and information to achieve its goals. The outputs of this process are a range of beer products, financial outcomes, and internal growth, reflecting the effectiveness of SABECO's strategies. Moreover, SABECO's operations are influenced by external factors, including regulatory frameworks, economic conditions, and social or cultural trends. These elements shape how the company crafts its products and responds to market demands, ensuring agility and responsiveness to shifting consumer preferences and market dynamics.. 

Scene 12

Source: Conduct by author, 2024; Adapted from Difference Between (n.d.) and
Roman (2016) (Roman, A. G., 2016) (Between., n.d)
Inputs:
SABECO relies on raw materials (barley, hops, water), workforce, capital,
technology, and information to support its operations.
Transformation:
SABECO converts these resources into beer through precise brewing processes,
supported by efficient management and technology.
Outputs:
The result is a range of beer products, financial outcomes, and internal growth,
reflecting the effectiveness of SABECO’s strategies.
External Environment (EE):
SABECO’s operations do not occur in isolation but are influenced by external
factors such as regulatory frameworks, economic conditions, and social or
cultural trends. These elements shape how SABECO crafts its products and
responds to market demands, staying agile and responsive to shifts that impact
consumer preferences and market dynamics.

Presentation môn Complexity

sabeco, the market leader in Vietnam's beer industry for 148 years, is known for its wide range of products, including Saigon Chill, 333, and Saigon Gold. These outstanding products have contributed significantly to the company's growth and success.

avatar

The external environment surrounding sabeco is characterized by several factors. Strict government regulations, including the 2020 Alcohol Harm Prevention Law, restrict sales and prohibit drunk driving, negatively impacting beer consumption and affecting sabeco's revenue. However, as the beverage industry contributes significantly to the national budget, supportive policies are crucial for sustainable growth. Vietnam's G-D-P growth of 6.42% has boosted purchasing power, presenting opportunities for sabeco during festivals. Additionally, stable inflation and a predictable USD/VND exchange rate ensure global competitiveness.

Vietnamese people have a strong connection to beer, consuming it during celebrations and festivals. This cultural tie is reflected in marketing campaigns like “Bia Saigon  Về Nhà Ăn Tết”, which emphasizes brand loyalty. However, increasing labor costs pose a significant challenge for sabeco, prompting the company to prioritize operational efficiency.

sabeco prioritizes environmental concerns, focusing on water management. By optimizing resource use and recycling water, the company minimizes waste and reduces emissions. To achieve this goal, sabeco combines solar energy and biomass with its production processes, meeting international environmental standards. Additionally, the company creates biodegradable packaging and reuses byproducts, aligning with customer expectations for sustainable practices.

As we anticipate that proposed tax increases on alcohol products may lead to consumers seeking illicit markets, resulting in lost revenue for both sabeco and the government, it is essential to promote balanced taxation that supports public health and fair trade. To achieve this goal, sabeco has shifted its focus towards campaigns showcasing cultural values while maintaining regulatory compliance. Furthermore, removing export barriers enables the company to shorten logistics, reducing costs by 15% and ensuring competitiveness in international markets. In the beer industry, established players like sabeco face significant barriers to entry due to substantial investment requirements for infrastructure and distribution. Strong brand loyalty and nationwide networks also contribute to the dominance of established players. However, shifting trends towards non alcoholic drinks pose challenges for all industry participants. Price sensitivity is high among low income consumers, necessitating sabeco to remain competitive. The company must invest in marketing efforts to retain customer interest in a rapidly changing market.

The beer market in Vietnam is dominated by sabeco and Heineken, creating opportunities for suppliers to exert influence over prices, particularly those providing raw materials. Fluctuations in raw material prices and international market conditions pose challenges for sabeco, which can negotiate favorable terms due to its large purchasing scale. The rise of non alcoholic drinks and other beverages threatens beer consumption, as do spirits and craft beers attracting premium consumers. Competitors employ dynamic pricing strategies, promotions, and flexible product lines, putting constant pressure on sabeco to innovate. To maintain its position, sabeco relies on its cultural ties and distribution network.

sabeco faces challenges in its traditional business model due to strict laws regarding alcohol consumption. To address this, the company can offer non alcoholic and low alcohol products to cater to changing consumer preferences. Additionally, working with ride sharing services can help prevent accidents caused by drunk driving. Furthermore, implementing responsible drinking campaigns and labeling products with 'Drink Safe' tags can contribute to public health agendas. On the other hand, sabeco also faces intense competition, particularly from Heineken's premium strategies. To counter this, introducing craft beers and premium lines targeting specific demographics can be effective. Expanding distribution networks and boosting brand awareness through cultural campaigns can also help.

The organizational chart of sabeco displays the hierarchical structure of the company, with the Board of Directors and General Director occupying the highest position. Four Deputy General Directors oversee distinct functional areas, including Marketing, Sales/Distribution, Production/Quality, and Finance. Each department concentrates on strategy, efficiency, and quality. Support functions, such as Internal Audit, Legal, and IT, offer advisory roles to the organization. Authority is represented by solid lines, while dashed lines signify cross functional collaboration, allowing sabeco to operate efficiently and attain its objectives.

To achieve its goals, sabeco's production department plays a crucial role in approving annual plans, setting targets, and investing in technology, enabling the company to optimize its manufacturing processes, increase efficiency, and reduce costs. Meanwhile, the sales and marketing department develops strategies, approves budgets, and sets sales targets, ensuring that the company's products reach the right customers at the right time. The logistics department, on the other hand, oversees procurement and supply chain decisions, guaranteeing that products are delivered promptly and stored optimally. These three departments work together seamlessly, sharing data and insights to ensure that sabeco's operations run smoothly. The finance department, meanwhile, manages budgets, costs, and cash flow across all divisions, providing critical oversight and guidance. By working together, these departments enable sabeco to respond quickly to changing market conditions, adapt to new trends, and maintain its competitive edge.

The company can maintain high product availability and meet customer demands efficiently by adapting its operations to different markets and offering customized products. This flexibility enables sabeco to respond quickly to changes in demand and remain competitive in the market.

sabeco relies on various inputs to support its operations. Raw materials such as barley, hops, and water are converted into beer through precise brewing processes. The company also utilizes its workforce, capital, technology, and information to achieve its goals. The outputs of this process are a range of beer products, financial outcomes, and internal growth, reflecting the effectiveness of sabeco's strategies. Moreover, sabeco's operations are influenced by external factors, including regulatory frameworks, economic conditions, and social or cultural trends. These elements shape how the company crafts its products and responds to market demands, ensuring agility and responsiveness to shifting consumer preferences and market dynamics.