Capstone project - Luân văn tốt nghiệp - Trương Trung Nghĩa

THE CAPSTONE PROJECTTHE CAPSTONE PROJECT

DEVELOPING BUSINESS STRATEGY FORDEVELOPING BUSINESS STRATEGY FOR VIETTEL MOBILE IN VIETNAM FOR VIETTEL MOBILE IN VIETNAM FOR

THE YEARS 2011-2015THE YEARS 2011-2015

GaMBA.X0510 - Group 9GaMBA.X0510 - Group 9

IntroductionIntroduction

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 studyStructure 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 foundationChapter 1: Theoretical foundation

1. 1. Concept & role of strategic management1. 1. Concept & role of strategic management

1.1.1. 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 administration

1.1.3. Types of strategy: Corporate & business

Chapter 1: Theoretical foundation (2)Chapter 1: Theoretical foundation (2)

1. 2. Stages of strategic management1. 2. Stages of strategic management

External Environment

Strategic IntentStrategic Intent

Strategic MissionStrategic Mission

Internal Environment

Strategy Implementation

Business Level Strategy

Competitive Dynamics

Corporate Level Strategy

Acquisition & Restructure

Internation. Strategy

Corporative Strategies

Strategy Formulation

Corporate Governance

Strategic Leadership

Structure & Control

Entrepre. & Innovation

Strategic Competitiveness Above Average Returns

Input

Feedback

Chapter 1: Theoretical foundation (3)Chapter 1: Theoretical foundation (3)

1. 3. Models & matrices used1. 3. Models & matrices used

STAGE 1: THE INPUT STAGESTAGE 1: THE INPUT STAGE

External External Factor Factor

Evaluation Evaluation (EFE) Matrix(EFE) Matrix

Competitive Competitive Profile Matrix Profile Matrix

(CPM)(CPM)

Internal Internal Factor Factor

Evaluation Evaluation (IFE) Matrix(IFE) Matrix

STAGE 2: THE MATCHING STAGESTAGE 2: THE MATCHING STAGE

Strengths - Weaknesses - Opportunities - Threats Strengths - Weaknesses - Opportunities - Threats (SWOT) Matrix(SWOT) Matrix

STAGE 3: THE DECISION STAGESTAGE 3: THE DECISION STAGE

Quantitative Strategic Planning Matrix (QSPM)Quantitative Strategic Planning Matrix (QSPM)

Chapter 2: Business situation of ViettelChapter 2: Business situation of Viettel

2. 1. Introduction of Viettel2. 1. Introduction of Viettel

History: 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 Billion

Business 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.)Chapter 2: Business situation (cont.)

2. 2. Business performance of Viettel (2005-2010)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-Revenue & profit of Viettel (2005-2010)2010)


2. 3. Business environment analysis2. 3. Business environment analysis

2.3.1. External environment Macro environment (PEST)

- Economics (EE): 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 services turnover (VND1000 billion)

480 596 746 1009 1197 1561

Consumer Price Index CPI (% change over the previous year)

8.4 6.6 12.6 19.9 6.5 11.7



2.3.1. External environment Macro environment (PEST)- Politics & Legal (PP): Stable environment, Administration procedures &

Business law were amended and considerably improved.

- Science & Technology (TT): Acquiring the advanced technologies (GSM, 3G and 4G testing in progress), Terminal production technology in Vietnam is limited.

- Social & Culture (SS): 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



2.3.1. 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


Factors of external environmentFactors of external environment WeightWeight ImpactImpact MarkMark

Opportunities

GDP increases continuously 0.20 4 0.80

Political stability, law is gradually improved 0.10 3 0.30

Government’s intervention (restriction for entry) 0.04 2 0.08

Technology policy 0.10 3 0.30

Large population, big market 0.20 4 0.80

Challenges

Competitive environment 0.05 3 0.15

Slowed market development speed 0.10 3 0.30

Pressure from customers 0.15 2 0.30

Challenges from new entrants, international integration

0.04 1 0.04

Substitutes 0.02 1 0.02

Total 1 3.09

Viettel’s external factor evaluation matrix (EFE)


The CMP matrix compares with several companies

Successful factorsSuccessful factors WeightWeightViettelViettel VinaphoneVinaphone MobifoneMobifone

Rank Mark Rank Mark Rank Mark

Quality of products and services

0.20 4 0.80 3 0.60 4 0.80

Advertisement 0.15 2 0.30 3 0.60 2 0.40

Competitive prices 0.15 4 0.60 3 0.45 2 0.30

Financial position 0.10 2 0.20 2 0.20 2 0.20

Customer loyalty 0.10 3 0.30 3 0.30 4 0.40

Market share 0.15 4 0.60 3 0.45 3 0.45

Diversification of products

0.10 3 0.30 3 0.30 3 0.30

Globalization 0.05 2 0.10 1 0.05 2 0.10

Total 1.00 3.20 2.95 2.95


2.3.2. Internal environment Resources: Tangible (Finance, Organization, Facility, Technology) and

Intangible (Manpower, Ability of innovation & creativity, Reputation)

NoNo Target nameTarget name 20052005 20062006 20072007 20082008 20092009 20102010

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

3State budget payment

(VND billion)300 800 2,000 4,500 5,200 7,600

5Value of investment

(VND billion)1,300 2,000 4,800 10,000 16,550 11,450

6Average labor in the

list (person)4,175 6,200 8,400 12,000 18,000 24,000

7Average income

(VND million)2.5 3.8 6.5 9.87 11.5 13

8Subscribers of

services (million subscribers)

1.0 2.7 5.5 29 44 51.5


Number of mobilephone subscribers (Left table) and marker-share of mobilephone providers in 12 Dec. of Vietnam (Right figure)

No SuppliersSubscriber

s

1 Viettel 40,967,382

2 Vinaphone 32,026,915

3 Mobifone 32,476,589

4 Beeline 187,176

5Vietnam

Mobile3,543,028

6 S-Fone 1,860,793

7 EVN Telecom 1,629,585

36.4%

28.4%

28.8%

1.7%0.2%

3.1% 1.4%

Viettel Vinaphone Mobifone Beeline

VNMobile S-Fone EVNT


2.3.2. Internal environment

Resources

5,0006,279

8,470

14,300

20,837

24,500

0

5,000

10,000

15,000

20,000

25,000

2005 2006 2007 2008 2009 2010

Strengths: - Widest coverage- Largest market-share- Attractive network package,

diversification services- Capital, technicians…

Weaknesses:- Management & operation- Professional degree- Loyal customers- Labor productivity…

Evaluation of internal environment:

Staff of Viettel 2005-2010


Internal factor evaluation matrix of Viettel (IFE)Internal factor evaluation matrix of Viettel (IFE)

Internal environment factorsInternal environment factors WeightWeight ImpacImpactt

MarkMark

Strengths

Network and coverage, the ability to meet 0.15 4 0.60

Market share 0.15 3 0.45

Finance 0.10 3 0.30

Technology 0.05 2 0.10

Prestige, brand 0.05 3 0.15

Pricing, products and services 0.10 4 0.40

Weaknesses

Structure of management organization 0.15 3 0.45

Quality of service 0.10 3 0.30

Loyal customer 0.05 1 0.05

Human Resources 0.10 2 0.20

Total 1.00 3.00

Chapter 3: Strategy selection & solutionsChapter 3: Strategy selection & solutions

3. 1. Vision & Mission3. 1. Vision & Mission

3.1.1. Vision Leading telecommunication company in Vietnam & in the Indochina area Providing the best products and services for customers

3.1.2. Mission Closed collaboration between economy & defense Investment in infrastructure Customer-oriented business Rapid development, continuous reforms to stabilize Talking human as core factor

3.1.3. 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.

STRENGTHS

S1-Network & coverage area, its

abilities

S2-Largest market-share

S3-Strong finance

S4-Advanced technology

S5-Reputation, brand

S6-Pricing policy, products and services

WEAKNESSES

W1-Management & organization

W2-Quality of services

W3-Loyal customers

W4-Working staff

OPPORTUNITIES

O1-GDP continuously grows.

O2-Stable politics, law being improved

O3-Government’s intervention

O4-Technology policy

O5-Numerous population, large market

THREATS

T1-Violent competition environment

T2-Slowdown growth market

T3-Pressure from customers

T4-New entrants, Inter. integration;

T5-Substitutes products

Chapter 3: Selection & solusions (cont.)Chapter 3: Selection & solusions (cont.)

3. 2. Strategic identification & selection3. 2. Strategic identification & selection

SO strategies:SO strategies:- Ensuring quality & network expansion;- Policies on price, product, brand…to gain

market-share from rivals;- Development of new products and

services;- Promotion for subscribers outside the city;

WO Strategies:WO Strategies:- Reform of the managerial structure,

organizational amendments;- Improvement of service quality

through training- Appropriate in use of labor; Policies to

attract & keep talent people;- Specific policies on postpaid

customers, prepaid subscribers changing to postpaid;

ST strategies:ST strategies:- Maintenance of market-share,

Improvement of marketing;- Development of new entertainment

services on mobilephone, PC & Ipad…- Appropriate price to keep & attract

customers;- Development of new market which is less

competitive, less substitute products…based on the advantages

WT strategies:WT strategies:- Enhancing supervision, management

and administration reform;- Strengthening training to improve

service quality to limit the loss of customer;

- Cutting costs, appropriate prices- Focusing on the loyal customers and

development of new ones from the existing;

Chapter 3: Selection & solutions (cont.)Chapter 3: Selection & solutions (cont.)

3. 2. Strategic identification & selection3. 2. Strategic identification & selection


3. 2. Strategic identification & selection3. 2. Strategic identification & selection Strategy of market penetration & developmentStrategy of market penetration & development Strategy of products developmentStrategy of products development Strategy of operations diversificationStrategy of operations diversification Selecting strategy for Viettel in the period of 2011-2015Selecting strategy for Viettel in the period of 2011-2015

The QSPM Matrix for Viettel GroupThe QSPM Matrix for Viettel Group

Important factorsImportant factors WeightWeight

StrategiesStrategies

Market Market PenetratioPenetratio

n & n & Develop.Develop.

Product Product Develop.Develop.

Operation Operation Diversifi.Diversifi.

Continuously increased GDP 0.20 4 0.80 3 0.60 4 0.80

Stable politics, law being improved

0.10 3 0.30 3 0.30 3 0.30

Intervention of the government (restriction of entry)

0.04 4 0.16 3 0.12 3 0.12

Technology policy 0.10 3 0.30 4 0.40 3 0.30

Large population, market 0.20 4 0.80 3 0.60 3 0.60


Competitive environment 0.05 3 0.15 2 0.10 4 0.20

Slowed market development 0.10 3 0.30 2 0.20 2 0.20

Pressure from customers 0.15 4 0.60 2 0.30 3 0.45

Challenges from new entrants, int.

0.04 1 0.04 3 0.12 4 0.16

Substitutes 0.02 2 0.04 3 0.06 4 0.08

Network coverage, ability to meet

0.15 4 0.60 2 0.30 2 0.30

Market share 0.15 3 0.45 2 0.30 1 0.15

Finance 0.10 3 0.30 4 0.40 4 0.40

Technology 0.05 3 0.15 4 0.20 2 0.10

Prestige, brand 0.05 4 0.20 3 0.15 2 0.10

Pricing, products and services 0.10 4 0.40 2 0.20 3 0.30

Management organization structure

0.15 2 0.30 3 0.45 2 0.30

Quality of service 0.10 3 0.30 2 0.20 2 0.20

Loyal customer 0.05 1 0.05 1 0.05 1 0.05

Human Resources 0.10 2 0.20 4 0.40 3 0.30

Total 2.00 6.44 5.45 5.41

The QSPM Matrix for Viettel Group (cont.)The QSPM Matrix for Viettel Group (cont.)


3. 3. Implementation solutions3. 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


3. 4. Implementation process3. 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

ConclusionsConclusions

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 & gratitudesOur deeply thanks & gratitudes

To:To:

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:From: Group 9 - GaMBA X0510Group 9 - GaMBA X0510

1. Mr. Đỗ Anh Minh1. Mr. Đỗ Anh Minh

2. Mr. Nguyễn Vinh Thư2. Mr. Nguyễn Vinh Thư

3. Mr. Phạm Thành Công3. Mr. Phạm Thành Công

4. Mr. Trương Trung Nghĩa4. Mr. Trương Trung Nghĩa

Capstone project - Luân văn tốt nghiệp - Trương Trung Nghĩa

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