Capstone project - Luân văn tốt nghiệp - Trương Trung Nghĩa
THE CAPSTONE PROJECTDEVELOPING BUSINESS STRATEGY FOR VIETTEL MOBILE IN VIETNAM FOR THE YEARS 2011-2015 GaMBA.X0510 - Group 9
Introduction Necessary Objective To conduct the complete top-down and competitive analyses, develop alternative strategies and select a prioritized set of strategies that will ensure a competitive advantage for Viettel mobile in the period of 2011- 2015. Subject & Scope of the study - Subject: Viettel group & other competitive companies in the mobile telecommunication industry. - Scope: Basing on specific statistics on the macro environment, industry and organizational environment of the Viettel from 2005 to 2010 and orientation until 2015. Study Approaches Qualitative & quantitative; Statistical & analytical analyses
Structure of the study Chapter 1: Theoretical foundation of strategic management - Concept & role - Stages of strategic management - Models and matrices used Chapter 2: Analysis of business activities of Viettel - Introduction to Viettel Group - Business situation 2005-2010 - Business environment analyze Chapter 3: Strategy selection & Implementation solutions - Vision & mission - Strategic identification & selection - Implementation solutions & processes
Chapter 1: Theoretical foundation1. 1. Concept & role of strategic management1.1.1. Concept There exist many definitions of strategic management It is now understood to be both a scientific definition & is an art and science of planning, organization implementation and evaluation strategies.1.1.2. Roles Help to identify opportunities and threats; Help managers and employees to understand what needs to be done to achieve success Enable firms to match the proposed plan with the external environment; It is in the direction of future actions Consider as the state of art in business administration1.1.3. Types of strategy: Corporate & business
Chapter 2: Business situation of Viettel2. 1. Introduction of ViettelHistory: The first name was Information Equipment Electronics Corporation in 1989, then Military Telecommunication Electronics Company after 5 years & Viettel Telecom Group since Dec. 2009. Headquarter: No1 Giang Van Minh, Badinh, Hanoi Membership units: 14 and 64 branches Own capital: VND 50,000 BillionBusiness areas: Supply of telecommunications services; Telecommunications, Transmission; Post Office; Terminal distribution; Finance investment; Media; Real Estate Investment; Export & Import and Foreign Investment.
Chapter 2: Business situation (cont.)2. 2. Business performance of Viettel (2005-2010) Revenues increased by 200% year-over-year since 2005-2009, ROE: 48.3%, Global expansion (Indochina, Africa, Latin…) Largest mobile network: 42,200 Stations, 120,000km fiber optic net, 17/17 provinces Laos cover 3G, etc. Revenue & profit of Viettel (2005- 2010)
Chapter 2: Business situation (cont.)2. 3. Business environment analysis2.3.1. External environment Macro environment (PEST)- Economics (E): GDP increment, Inflation, VND rate, etc. Year 2005 2006 2007 2008 2009 2010 GDP (USD) 642 730 843 1052 1064 1168 Exports (USD billion) 32 39 48 62 57 71 Import (USD billion) 36 44 62 80 69 84 Remittances (USD billion) 3.8 4.7 5.5 7.2 6.2 8.1 Total retail sales and consumer 480 596 746 1009 1197 1561 services turnover (VND1000 billion) Consumer Price Index CPI (% 8.4 6.6 12.6 19.9 6.5 11.7 change over the previous year)
Chapter 2: Business situation (cont.)2. 3. Business environment analysis2.3.1. External environment Macro environment (PEST)- Politics & Legal (P): Stable environment, Administration procedures & Business law were amended and considerably improved.- Science & Technology (T): Acquiring the advanced technologies (GSM, 3G and 4G testing in progress), Terminal production technology in Vietnam is limited.- Social & Culture (S): Rapidly change in the trend the new lifestyle, Demand of using telecommunication increment, Awareness of Vietnamese improved.- Demography: Population of 87 million, Over 50% under 27 years
Chapter 2: Business situation (cont.)2. 3. Business environment analysis2.3.1. External environment Industry environment (Michael Porter - 5 Forces)- Rivalry: Violent competition, Viettel (36.4%), Vinaphone (28%), Mobifone (28.8%); Many promotion programs from the rivalry.- Threat of New Entrants: Indochina Telecom with MVNO, Winmax 4G and other telecommunication services- Power of Buyers: Many providers, Loyal & Prepaid customers- Power of Suppliers: Financial & Terminal providers- Substitute Products: Voice & Video conferencing services. Evaluation of external environment
Chapter 2: Business situation (cont.) Viettel’s external factor evaluation matrix (EFE) Factors of external environment Weight Impact Mark OpportunitiesGDP increases continuously 0.20 4 0.80Political stability, law is gradually improved 0.10 3 0.30Government’s intervention (restriction for entry) 0.04 2 0.08Technology policy 0.10 3 0.30Large population, big market 0.20 4 0.80 ChallengesCompetitive environment 0.05 3 0.15Slowed market development speed 0.10 3 0.30Pressure from customers 0.15 2 0.30Challenges from new entrants, international integration 0.04 1 0.04Substitutes 0.02 1 0.02 Total 1 3.09
Chapter 2: Business situation (cont.) The CMP matrix compares with several companies Viettel Vinaphone Mobifone Successful factors Weight Rank Mark Rank Mark Rank MarkQuality of products and 0.20 4 0.80 3 0.60 4 0.80servicesAdvertisement 0.15 2 0.30 3 0.60 2 0.40Competitive prices 0.15 4 0.60 3 0.45 2 0.30Financial position 0.10 2 0.20 2 0.20 2 0.20Customer loyalty 0.10 3 0.30 3 0.30 4 0.40Market share 0.15 4 0.60 3 0.45 3 0.45Diversification of 0.10 3 0.30 3 0.30 3 0.30productsGlobalization 0.05 2 0.10 1 0.05 2 0.10 Total 1.00 3.20 2.95 2.95
Chapter 2: Business situation (cont.)2.3.2. Internal environment Resources: Tangible (Finance, Organization, Facility, Technology) and Intangible (Manpower, Ability of innovation & creativity, Reputation)No Target name 2005 2006 2007 2008 2009 2010 1 Revenue (VND billion) 3,200 7,400 16,000 33,000 60,000 91,000 2 Profit (VND billion) 390 1,400 4,000 8,400 10,000 15,500 State budget payment 3 300 800 2,000 4,500 5,200 7,600 (VND billion) Value of investment 5 1,300 2,000 4,800 10,000 16,550 11,450 (VND billion) Average labor in the list 6 4,175 6,200 8,400 12,000 18,000 24,000 (person) Average income 7 2.5 3.8 6.5 9.87 11.5 13 (VND million) Subscribers of services 8 1.0 2.7 5.5 29 44 51.5 (million subscribers)
Chapter 2: Business situation (cont.) Number of mobilephone subscribers (Left table) and marker-share of mobilephone providers in 12 Dec. of Vietnam (Right figure) 3.1% 1.7% 1.4%No Suppliers Subscribers 0.2% 36.4% 28.8%1 Viettel 40,967,3822 Vinaphone 32,026,9153 Mobifone 32,476,5894 Beeline 187,176 28.4%5 Vietnam Mobile 3,543,028 Viettel Vinaphone Mobifone Beeline6 S-Fone 1,860,793 VNMobile S-Fone EVNT7 EVN Telecom 1,629,585
Chapter 2: Business situation (cont.) Internal factor evaluation matrix of Viettel (IFE) Internal environment factors Weight Impact Mark StrengthsNetwork and coverage, the ability to meet 0.15 4 0.60Market share 0.15 3 0.45Finance 0.10 3 0.30Technology 0.05 2 0.10Prestige, brand 0.05 3 0.15Pricing, products and services 0.10 4 0.40 WeaknessesStructure of management organization 0.15 3 0.45Quality of service 0.10 3 0.30Loyal customer 0.05 1 0.05Human Resources 0.10 2 0.20 Total 1.00 3.00
Chapter 3: Strategy selection & solutions3. 1. Vision & Mission3.1.1. Vision Leading telecommunication company in Vietnam & in the Indochina area Providing the best products and services for customers3.1.2. Mission Closed collaboration between economy & defense Investment in infrastructure Customer-oriented business Rapid development, continuous reforms to stabilize Talking human as core factor3.1.3. Core values Practice is the criterion for testing truth; Maturing through challenges & failures; Quick adaptation is competitive strength; Innovation is life; Systematic thinking; East West combination; Tradition & method of soldiers; And Viettel is the public house.
Chapter 3: Selection & solusions (cont.)3. 2. Strategic identification & selection STRENGTHS WEAKNESSESS1-Network & coverage area, its abilities W1-Management & organizationS2-Largest market-share W2-Quality of servicesS3-Strong finance W3-Loyal customersS4-Advanced technology W4-Working staffS5-Reputation, brandS6-Pricing policy, products and services OPPORTUNITIES THREATSO1-GDP continuously grows. T1-Violent competition environmentO2-Stable politics, law being improved T2-Slowdown growth marketO3-Government’s intervention T3-Pressure from customersO4-Technology policy T4-New entrants, Inter. integration;O5-Numerous population, large market T5-Substitutes products
Chapter 3: Selection & solutions (cont.)3. 2. Strategic identification & selection SO strategies: WO Strategies: - Ensuring quality & network expansion; - Reform of the managerial structure, - Policies on price, product, brand…to gain organizational amendments; market-share from rivals; - Improvement of service quality through - Development of new products and services; training - Promotion for subscribers outside the city; - Appropriate in use of labor; Policies to attract & keep talent people; - Specific policies on postpaid customers, prepaid subscribers changing to postpaid;ST strategies: WT strategies:- Maintenance of market-share, Improvement of - Enhancing supervision, management and marketing; administration reform;- Development of new entertainment services on - Strengthening training to improve service mobilephone, PC & Ipad… quality to limit the loss of customer;- Appropriate price to keep & attract customers; - Cutting costs, appropriate prices- Development of new market which is less - Focusing on the loyal customers and competitive, less substitute products…based on development of new ones from the existing; the advantages
Chapter 3: Selection & solutions (cont.)3. 2. Strategic identification & selection Strategy of market penetration & development Strategy of products development Strategy of operations diversification Selecting strategy for Viettel in the period of 2011-2015 The QSPM Matrix for Viettel Group Strategies Weight Market Product OperationImportant factors Penetration Develop. Diversifi. & Develop.Continuously increased GDP 0.20 4 0.80 3 0.60 4 0.80Stable politics, law being improved 0.10 3 0.30 3 0.30 3 0.30Intervention of the government 0.04 4 0.16 3 0.12 3 0.12(restriction of entry)Technology policy 0.10 3 0.30 4 0.40 3 0.30Large population, market 0.20 4 0.80 3 0.60 3 0.60
Chapter 3: Selection & solutions (cont.)3. 3. Implementation solutions Target market and basic policies for the market Continuing maintenance of expansion investment and improvement of coverage quality, customer service capabilities Continuing development of price policies for product package, competition and flexibility for each customer segment Management of human resources for changing the structure and improving the quality of service from the human factor Financial management solutions Marketing solutions
Chapter 3: Selection & solutions (cont.)3. 4. Implementation process Construction of annual goals Construction of policy system and support plan Development of action plans, budgets and implementation processes Allocation of human resources, finance, facilities Selection of organization structure consistent with the strategy Strategic commitment and implementation Strategic inspection control, evaluation and adjustment in the implementation process
Conclusions Development of business strategy for a service business production unit is extremely important, very complicated and not easy to perform Using knowledge from MBA courses & our practices to formulate strategic planning for Viettel for the years 2011-2015, we chosen the best business strategy for the Group in Vietnam. It brings the Viettel leaders a overview of works, contributes to improvement of competitiveness and determines the optimal solutions for stabilization and development of the Group. However, because of limits on theoretical knowledge as well practice of the group’s members ourselves, this study cannot be avoided shortcomings/mistakes We are very happy & looking forward to getting the comments, feedbacks from the teachers & classmates .
Our deeply thanks & gratitudesTo: The lecturer Dr. Vu Thanh Hung and Dr. Tony Sanichara who taught us dedicatedly the course "Strategic Management“, guided and facilitated our group to complete this capstone. The teachers in the ETC Center, National Economics University, VNU, Griggs - Andrews University who taught the knowledge through the courses designed by the MBA program. Advisors, managers and our friends of the class X0510…From: Group 9 - GaMBA X0510 1. Mr. Đỗ Anh Minh 2. Mr. Nguyễn Vinh Thư 3. Mr. Phạm Thành Công 4. Mr. Trương Trung Nghĩa