HOA NI SHOE COMPANY

CORPORATECORPORATEPROFILE: PROFILE: HOA NI HOA NI

SHOE COMPANYSHOE COMPANY

Established in 1968 as a prefabrication plant to produce exported leather

goods.Joint-stock company,

employees in the company hold 49%

and 51% is holded by the state.

Specializes in producing genuine

and imitation leather products.

Manufactures products for exporting.

PRODUCTS & SERVICES

Manufactures products based on foreign partners

preferences.

Gloves, shoes, briefcases & Men's Wallet, women's sandals & shoes, small key bags

CASE OBJECTIVE

To obtain more control over foreign markets as well as to be successful in domestic markets

are problems faced by the company.

Đổi Mới is the economic

reforms initiated in Vietnam in 1986 with the

goal of creating a "socialist-

oriented market economy"

"Doi Moi"

EFFECTS

Prior Doi Moi, and the opening up of Eastern Europe, business was

very difficult.

HNSC had to seek partners under restricted conditions and somewhat

closed markets.

Collapse of eastern Europe bloc and

introduction of more open market policy in Vietnam, businesses in general and

with HNSC in particular have positively affected.

.

CORPORATE PERFORMANCE

1992exporting to

Italy & Thailand

1996Started to

export South Korea

Recently, developed a

reputation for on time

deliveries and high product

quality.

1998, HNSC

produced

600,000 women's shoes,

500,000 gloves,

600,000 different

bags.

Annual Turnover of 51.5 billion dong in the year 1998.

1 USD = 13,391.33695

3 VND in 1998.

PRICING STRUCTUR

E

Raw materials account for a large proportion (68-75%) of price

structure of footwear.Enterprises

import most of the important materials such as leather,

leatherette, canvas for

upper parts, PVC, PU paint,

fabric, and glue.

Every year, Vietnam spends approximately US$ 300 million on importing leatherette and leather.

VIETNAM'S DOMESTIC FOOTWEAR SECTOR

ANALYSIS

PORTER’S FIVE FORCES ANALYSIS

High cost barrier and low profit

margin.High

Investments as it requires well

setup distribution channels

New Free Trade Agreements

Liberal laws for foreign entrants

THREAT OF NEW

ENTRANTSTHREAT OF

SUBSTITUTES

INDUSTRY RIVALARY

BARGAINING POWER OF BUYERS

BARGAINING POWER OF SELLERS

Except for atheletic,

orthopedic & dancing shoes

sandals, slippers,

croax etc. Are some

substitutes

Switching cost is very

low.

Technological Advancement

s

Buyers are less concentrated, so reduces the buying power.

Don't buy in large volumes

Buyers are more sensitive

to prices.

Any supplier that meets

quality standards for the company will be able to supply these commodity

goods.

Supplier concentration- Fragmented

Highly competitiv

e

Rapid Growing Market

High exit barriers

FORCES TREND ANALYSIS RATING

THREAT OF NEW ENTRANTS

Medium to high 8/10

THREAT OF SUBSTITUTES

Low to Medium 4/10

INDUSTRY RIVALARY High 10/10

BARGAINING POWER OF BUYERS

Medium to High 6/10

BARGAINING POWER OF SELLERS

Low 2/10

10

08

06

04

02

00

10

08

06

04

02

00

10

10

10

08

06

04

02

00

08

0604

02

0806

0402

00

00

THREAT OF NEW ENTRANTS

THREAT OFSUBSTITUTES

BARGAINING POWER OF BUYERS

BARGAINING POWER OF SELLERS

INDUSTRY RIVALARY

CONCLUSION FOR DOMESTIC FOOTWEAR MARKET ANALYSIS

The corresponding market is highly competitive with low entry barriers and high exit barriers.

The footwear market is operating on low profit ranges.

RECOMMENDATIONS

Increase Market penetration pricing.

HNSC should increase marketing activities and try to increase

domestic as well as international consumer awareness about their

products, so that they can compete well in this highly competitive

market.

SWOT ANALYSIS OF HNSC

SO STRATEGIES ST STRATEGIES

WO STRATEGIES WT STRATEGIES

RECOMMENDATIONS

HORIZON PLANNING

THANK YOUTHANK YOUFOR YOUR KINDFOR YOUR KIND

ATTENTIONATTENTION

M V S SAI HEMANTM V S SAI HEMANT

BBA FOREIGN TRADE, SEM VBBA FOREIGN TRADE, SEM V