PESTLE OF DAIRY INDUSTRY IN USA
Political factors
As of early April 2021, the United States was the country with the highest number of Covid 19
cases in the world with 25,561,521 cases, 427,588 deaths. This greatly affects the US politics,
Mr. Joe Biden officially became the 46th President of the United States. In the current context,
the new US President will face great challenges. The COVID-19 epidemic is still raging
throughout the United States, the US unemployment rate has increased, the US economy faces
many difficulties, the US is divided, the US "world leader" position is declining. Weakness, many
allies and partners lost confidence in the US government. This difficulty and challenge requires
new efforts of the new US administration to overcome soon to “rebuild better.
Economic factors
When the COVID-19 pandemic struck, the urgent measures needed increased the federal
deficit. The drastic action of the US Federal Reserve (FED), although helping the stock market
recover, but the majority of Americans do not own stocks; The unemployment rate in the US
still shows no signs of falling. The US Department of Labor employment report released on
January 8, 2021 showed that about 140,000 jobs were lost in December 2020. The
unemployment rate remained at 6.7% and not improved in the past seven months (3). Fed
policymakers also forecast that the unemployment rate will be around 5.5% by the end of 2021,
worse than the 4.7% when Mr. D. Trump was elected in 2017. (4). In addition to rising
unemployment and real U.S. gross national product (GDP) of $ 19,012.68 billion in 2019 and
generating COVID-19 wind, it's estimated to drop 8% to about $ 17,491.66 billion. by 2020. FED
Chairman Patrick Harker warned that the US economy could fall into deep recession and
negative growth in the first quarter of 2021. Other challenges such as increasing social
inequality, national debt increase, deteriorating international trade relations ... also put great
pressure on the administration of President J. Biden. Therefore, the dairy industry has faced
difficulties in milk production and transportation due to the closure of restaurants, schools, and
even supermarkets, causing serious consequences for the dairy industry economy.
Social factors
The current population of the United States is 332,549,485 according to the latest figures from
the United Nations. The population density of the United States is 36 people / km2 and 82.66%
of the population lives in cities. The median age in the United States is 38.5 years (World Curve,
2021). The country's median weekly income of 112.1 million full-time salaried workers was $
989 in the first quarter of 2021 (unadjusted) according to the US Bureau of Labor Statistics.
However, due to the daily use of milk by children as well as everyone in the US, the
consumption of milk in the US is still growing, but milk products will be discarded and expired.
With the above income, buying milk in the US will also be easy for US citizens.
Technology factor
In recent years, the use of high technology in dairy production and milk production has been
greatly enhanced, for example the increased integration of computers into daily dairy herd
management. Using computers assists breeders in managing their flocks and allows for better
recordkeeping. Automatic milking systems or "robots" are becoming more and more popular in
BC dairy farms. In a robot shop, cows can be milked at any time. There are also other advanced
technologies. These developed technologies will help the production of milk to be produced
evenly and faster to serve everyone during the Covid 19 period.
Enviroment factor
Environmental pollution is a big problem today, just as in the dairy industry, dairy cows and
their manure create greenhouse gas emissions that contribute to climate change. Poor manure
and fertilizer treatment can deplete local water resources. And unsustainable dairy production
and feed production can lead to the loss of ecologically important areas, such as grasslands,
wetlands, and forests. However, the government has a policy of sharing innovative ideas in the
current environment.
Legal factor
The United States Department of Agriculture (USDA) actively regulates and supports the US
dairy industry. Federal Dairy Marketing Orders aim to provide an orderly system of graded
prices and total farm milk sales. Under the Agricultural Improvement Act of 2018, the Dairy
Margins Insurance program has replaced the Margins Protection Program for Dairy Producers.
Other dairy risk management programs administered by USDA include the Protection of Dairy
Revenue and Livestock Gross Margin for Dairy Cattle. USDA oversees two dairy research and
promotion programs, commonly known as the "milk test" program. USDA buys US dairy
products through food purchase programs. USDA also administers the Milk Contribution Refund
Program, which provides limited reimbursement to eligible organizations that donate liquid
milk to nonprofits. Due to the COVID-19 pandemic, the Federal Government has taken various
complementary measures to support the dairy industry.
MEASURES TO MINIMIZE NEGATIVE IMPACTS OF CHANGE ON ORGANIZATIONAL
BEHAVIOR
SWOT analysis is a good way to minimize the negative effects of threats that cause
changes in the organization's behavior. SWOT analyzes 4 aspects, in which Strengths and
Weaknesses are the company's current capabilities, and Opportunities and Threats are
the drivers of positive and negative change. Based on the above analysis of Vinamilk and
Dean Foods there is a similar threat of increased competition in the dairy market. The
reason is that there are now a lot of famous brands of dairy products outside and in the
iris. This leads to fierce competition in the production and market sale process. Both
Vinamilk and Dean Foods have different strategies to mitigate this challenge. As for Dean
Foods, there are other policies to sell the company and keep the factory.
Vinamilk
After a year of 2020 with many challenges due to Covid-19, the promotion to six consecutive
ranks has shown the firmness in Vinamilk's development strategy. In 2020, thanks to suitable
strategies to cope with Covid-19, Vinamilk has recorded positive business results. Revenue at
the end of 2020 reached VND 59,723 billion, an increase of 5.9% compared to the same period
in 2019 and an increase of 17% compared to 2017. During the epidemic, Vinamilk has
continuously introduced new products to consumers, including many breakthrough products
such as 100% Vinamilk Green Farm Fresh Milk, Fresh Milk containing Bird's Nest, Fruit Love
Premium Fruit Juice, Hero Fruit Milk ... Continuously bringing new products quality, quality,
meeting many nutritional needs have also helped Vinamilk continue to be evaluated by Kantar
Worldpanel as the milk brand chosen by Vietnamese consumers for the eighth consecutive year
and leading the domestic dairy market. in key segments such as liquid milk, powdered milk,
condensed milk ...
Dean Foods
Unlike Vinamilk, which flourished after Covid 19, Dean Foods on May 1, 2020 decided to
liquidate the company to Dairy farmer of America to preserve the factories and products of
Dean Foods. However, there were a few lawsuits against Dean foods that did not pay
employees salaries but that did not affect the production and sale of products.
Both Vinamilk and Dean Foods have a separate strategy for the company. But Dean Foods
chose to sell the company to keep the factory. SWOT analysis is very important in
determining the actions of a business. It identifies the organization's assets and risks,
thereby improving the organization's actions by outlining steps and solutions to minimize
and prevent the changes made by the organization.
METHODOLOGY
This article discusses Covid 19's influence over two major companies, Vinamilk in Vietnam
and Dean Foods in the USA. Ìnformation were taken from articles, reports and interviews
related to the dairy industry in Vietnam and globally. There is also the annual report of
the two companies.
