GLOBAL BUSINESS STRATEGY group assignment report on a business strategy

NATIONAL ECONOMICS UNIVERSITY SCHOOL OF ADVANCED EDUCATION PROGRAMS ~~~~~~*~~~~~~ GLOBAL BUSINESS STRATEGY Group assignment: Report on a business strategy Lecturer : Dr Nguyen Anh Minh Group : Group Class : International Business EEP 61ª Members : Nguyễn Thanh Xuân (11196413) Lê Hà Anh (11190166) Phạm Nguyễn Ngọc Mai (11193310) Đào Lan Nhi (11193964) Nguyễn Thị Minh Châu (11190777) Nguyễn Hương Trà (11195154) HÀ NỘI – 2022 TABLE OF CONTENTS PART A 1.Our company 2.External environment PART B 18 1.A global standardization stategy 18 2.Market 17 3.Entry strategy 23 PART C 26 1.The new industry: kitchen utensils and appliances 26 2.Justification for diversifying by using the five forces model 27 3.Approaches to diversifying into a new industry 28 4.Strategic fit along the value chain 28 REFERENCES 30 PART A Our company “Delicant makes your house a home” – Our brand provides all the households in the world with the new sterilization kitchen cupboard v Strategic vision Aiming to become the prestige supplier of furniture, especially kitchen tools, not only in Vietnam but in Asia and all around the world v Mission statement Delicants distinct target is to provide extraordinary health to people during their meals, especially during the Covid – 19 epidemic, when residents are now aware of the harm of the bacteria which may exist in their bowl Delicants Foundation is a furniture company, so our second aim is to bring a delicate decoration to your kitchen and turn it into a true home v Overview of the product Since we understand thoroughly the demand of having absolute stainless dishes, our company has come up with the brand new idea of a sterilization kitchen cupboard The cupboard is only a fine decoration to your kitchen but also a convenient tool to sterilize bowls, dishes, cutlery and other kitchen tools which involve in cooking v Technical features - Pressure meters for steam; water; medical gases; compressed air and clinical vacuum; and heating ventilation and air conditioning (HVAC) systems - Manometers to measure differential pressure across the filters of HVAC systems, water, steam and pneumatic systems, ventilators, and anesthesia equipment - Flow meters for water; medical gases; medical compressed air and vacuum; and hydraulic circuits - Particulate air meter for monitoring the quality of treated air atmospheres with ventilation systems or conditioned air and other isolated areas - Thermometers or thermocouples for temperature measurement of air, water, and steam at specific points inside equipment or systems - Chronometers to measure cycle times - Chemical products for cleaning, disinfecting, and sterilizing surfaces of equipment - Electrical safety analyzer Our products vary in a wide range, the customers can create their own and unique products by customizing them which fit their home best v Delicants business model • Customer segments - A mass – market business model is what Delicant aims for because the products have a wide price range, size and quality that can satisfy all customer segments • Value proposition - The mission of the company: We offer Technology to customers who care about their health in not only the Covid 19 pandemic but afer that as well, to have a clean living environment - Specialized products: Disinfection machine with the ability to sterilize the kitchen tools and disinfect bacteria for tools before use - Scope of the market: Diversification of products is family – friendly and prioritizes the domestic market during Covid • Channels - Delicant’s main channels are selling through electric retailers (HC, Dienmayxanh,…) and furniture retailers (UMA, JYSK,…) - Delicant also cooperates with many apartment projects from big building companies (Tan Hoang Minh, Hoang Huy, Sun Group, …) to fit up the product in unfinished apartments • Customer relationships - Delicant’s customer relationship is primarily of a long-term nature Customers buy and use our products, they will be consulted and taken care of as well as receive other benefits when purchasing The company’s website provides answers to frequently asked questions and email support for customers’ needs Delicant will provide a warranty for a long time to customers who buy the products • Revenue stream - Income: Selling the products to customers - Outcome: Spending on manufacturing, marketing, labor force, taxes, contingency cost and distribution until the product goes into customer's hands • Key resources - Delicant’s main resources are its human and physical resources We set up different groups to research and operate the machines to best suit the requirements of our customers and together we are toward the goal of building the best products to protect the health of consumers in this epidemic period • Key activities - Delicant’s business model entails are manufacturing the best products for customers and taking care of all customer’s demands and pleasing them with good services Moreover, factories, trucking, materials, warehouse are also important parts that help produce high-quality products that Delicant focus on • Key partners There are main partners Delicant collaborates to promote our products: - Real estate: they will contact Delicant when customers need to buy interiors for their new home or real estate partner can install Delicant’s product inside unfinished houses and we can provide customer services for them - Delicant cooperates with the factory to manufacture and distribute products safely and conveniently which helps save the expenditure on production and shipping for the company - Retailer chains: The retailers will carry goods from the company and distribute genuine and completely independent products • Cost structure Delicant prepare our cost structure into three phases along with product development: o Phase 1: Survival In this phase, the product had just arrived on the market as a newbie and needed to be promoted and advertised - 20% cost for manufacturing - 50% cost for sales and advertising - 30% cost for labor forces o Phase (growth) The product is widely known and has been consumed more in the market, the demand of customers will increase so Delicant will focus on production and development: - 50% cost for manufacturing - 20% cost for sales and advertising - 30% cost for labor forces o Phase (stability) Delicant has owned loyal customers, the sales volume is stable, Delicant will start to conduct research and development on new products - 50% cost for manufacturing (30% for R&D) - 20% cost for sales and advertising - 30% cost for labor forces External environment v PESTLE anslysis • Political Vietnam is a socialist nation with a stable and interactive political climate and a growing legal framework that provides possibilities and circumstances for enterprises to plan production and operations With a generally stable political climate, the legal system has strengthened, providing possibilities and circumstances for businesses to organize their production and operations To protect the interests of consumers and the country of genuine manufacturing enterprises, the government has made provisions of the law on standards, technical regulations, the law on industrial property copyright, and regulations on packaging and labels for electronic and electrical household products This is the basic as well as shaping for Delicants in building the image and brand of the product Sterilization of kitchen cupboard products ensures technical standards as prescribed by law • Economic Since 1986, Vietnam has consistently innovated, adopted economic and political strategies, and evolved into a low-middle-income nation that is no longer backward, rather than a poor country complaining In recent years, there have been complex worldwide variations Vietnam, on the other hand, has maintained a positive growth rate over the years, with a projected growth rate of 1.82 percent in 2020 (due to the negative impact from the COVID-19 epidemic) However, in comparison to other nations in the area, Vietnam's economy has been highly praised and steady in recent years, owing to its strong growth rate Various nations have implemented social isolation measures, limited many activities, and forced many industrial companies to temporarily close as a result of the Covid-19 epidemic, all of which have had a significant impact on consumption a significant reduction However, by implementing excellent illness preventive and response measures in response to Covid-19, Vietnam has been able to stave off a severe economic downturn Vietnam's economy was severely impacted by the COVID-19 epidemic as a result of its deep economic integration, but it also demonstrated remarkable resilience If Vietnam successfully stops the spread of the virus, the economy is expected to increase by 5.64 percent in 2021 At the same time, export-oriented manufacturing industries fared well, and domestic demand recovered quickly During the pandemic, consumers began to be more strict with consumables, careful selection, sure for a good product as well as a reasonable price, can achieve satisfaction Sterilization of kitchen cupboard products is not only an opportunity to prove to consumers about product quality and reasonable prices but also a challenge to products during this time • Social The population of Viet Nam is around 98 million people, with an average age of 32.9 years and 37.34 percent of the population residing in urban areas, according to UN figures As a result, Vietnam has a sizable share of the working-age population The country's predominant religion is Buddhism, and its primary language is Vietnamese Men have a 93-year life expectancy, while women have an 81-year life expectancy The country's middle and upper classes are fast expanding, and their members tend to travel more than in earlier decades This is a great opportunity for Sterilization of kitchen cupboard products to get closer to customers • Technological Sterilization refers to a process that eliminates or kills all pathogens using various technologies and methods that are applied for sterilization of equipment and medical devices in the healthcare infrastructure There is an increase in the demand for sterilization technologies across the globe Patient safety and the prevention of hospital-acquired infections being a major concern lead to an increase in the demand for sterilization technologies in the healthcare sector The sterilization technology market is driven by the increasing occurrences of hospital-acquired infections, increasing number of surgical procedures, growth in pharmaceutical and biotechnology industries, and rising technological advancements in sterilization equipment However, the stringent regulatory framework could hamper the growth of the market during the forecast period The global sterilization technology market is expected to reach a market value of USD 8,142.61 million by 2023 from USD 5,074.58 million in 2017 at a CAGR of 8.20% during the forecast period from 2018 to 2023 In 2017, the Americas held the largest share of the market at 40.1%, followed by Europe and Asia-Pacific with shares of 34.4 % and 17.48 %, respectively The global sterilization technology market has been segmented based on process, type, end user, and region By type, the global sterilization technology market has been classified into ethylene oxide, ionizing radiation, filtration, thermal sterilization, and others Based on process, the global sterilization technology market has been categorized as chemical process, physicochemical, synergetic process, and physical process By end user, the global sterilization technology market has been segmented into hospitals and clinics, the pharmaceutical industry, and medical device manufacturers As a product of Delicant, using advanced sterilization technology combined with heating ventilation and air conditioning systems, Sterilization of kitchen cupboard is the perfect solution, suitable for disinfecting, sterilizing surfaces of equipment and for daily cooking at home • Legal Since 2009, the Ministry of Science and Technology in Vietnam has added 13 categories of household electrical and electronic equipment to the list of goods at risk of unsafety (group 2) that must be controlled according to laws QCVN 4:2009/BKHCN QCVN 4:2009/BKHCN QCVN 4:2009/BKHCN By 2012, the Ministry of Science and Technology will add 07 categories of electrical and electronic items to the list of Group commodities that must be controlled for safety and electromagnetic compatibility, according to QCVN 9:2012/BKHCN The standard for assessing safety for household electrical and electronic equipment is the IEC 60335 Household and similar electrical appliances – Safety set of standards This set of standards has been uniformly applied worldwide, most countries have translated this set of standards into national standards Vietnam has translated the IEC 60335 series of standards into the Vietnamese standard TCVN 5699 • Environmental Vietnam is a sovereign and autonomous country with 54 ethnic groups Despite their disparities in regional identity and culture, the brothers' most striking common ground remains patriotism, familial love, and national unity When customers' attitudes and worries about origin are another component that substantially contributes to the growth of Vietnamese consumers, this is also a factor impacting their purchasing behavior Domestic businesses prioritizing support for national products "made in Vietnam" have developed a significant resonance effect among the Vietnamese people, instilling national pride The reality is that environmental contamination is growing increasingly severe across the world, prompting consumers to become more conscious of their own purchasing habits in order to help safeguard the environment v Porter’s Five Forces • Threats of new entrants Economies of scale are quite difficult to achieve in the furniture industry This makes production costs more expensive for new entrants Product differentiation occurs strongly in industries, where companies in the industry sell differentiated products instead of a standardized product Customers also look for differentiated products Capital requirements in the industry are high, making it difficult for new entrants to set up a business due to the high costs involved Capital expenditure is also high due to high R&D costs This makes it difficult for new entrants to the industry The potential of Vietnam's kitchen equipment industry in the coming time is highly appreciated According to the data of the Ministry of Industry and Trade, consumption in the kitchen equipment industry accounts for 9%, a potential market that makes many domestic and foreign kitchen equipment enterprises also have the desire to join With easy access to distribution channels, new businesses can easily get products onto shelves through just a few retail stores that sell home appliances Government policies in the industry require regulatory requirements: Strict licensing and regulatory requirements must be in place before a company can start selling Therefore, the threat of new entrants is low • Bargaining Power of Suppliers The number of suppliers in the industry in which Delicants does business is much greater than the number of buyers This means suppliers have less control over pricing The products these vendors offer are fairly standardized, have little differentiation, and have low switching costs This makes it easier for buyers like Delicants to switch suppliers Suppliers not compete with other products in this industry This means that there are no substitutes for the product other than that provided by the suppliers Vendors not provide a credible threat to future integration into the industry in which Delicants operates The industry in which Delicants operates is an important customer for its suppliers This means that industry profits are closely tied to suppliers' profits Therefore, these suppliers must offer reasonable prices Therefore, the bargaining power of suppliers is relatively low • Bargaining power of customers The market is quite rich, consumers have many choices Buyers are well informed about the product offerings of sellers (product features and quality, prices, buyer reviews) and the cost of production (an indicator of markup) The more information buyers have, the better bargaining position they are in The mushrooming availability of product information on the Internet (and its ready access on smartphones) is giving added bargaining power to consumers, since they can use this to find or negotiate better deals willing to purchase medical needs to ensure their health For that reason, we provide the essential must-have in this state-of-art, the sterilization, from a more particular aspect in daily meals from your own kitchen - Attracting in-store consumers’ concentration is certainly important for Delicants We focus on ad content that emphasizes our outstanding sterilization feature and also deliberately train for Delicants’s sellers in sales presentations and appearance in order to make the potential buyers aware of the professionalism and gradually realize that Delicants has prestigious customers Signaling value of Delicants is particularly important because first impressions are the decision call when buyers are making a first-time purchase and are unsure what their experience with the product will be 17 PART B A global standardization stategy v Reasons Firstly, Delicants company has a long-term plan to enter the Asian market, which has an increased number of consumers who bought interiors To compete with other international competitors, we have to “think global - act global” Secondly, our company intends to increase our customer base, sell in more overseas markets, and reduce costs via scale and scope economies Thirdly, there are a variety of perks that our company takes from a global standardization strategy: the ability to transfer best practices across markets; the innovation from knowledge sharing and capability transfer; the benefit of a global brand and reputation Fourthly, this strategy also allows Delicants to replicate a successful business model on a global basis efficiently or engage a high level of R&D v Implication Delicants has to understand some of the strategy's components before creating a global standardization strategy for their products They include: • A uniform brand • Uniformity in packaging • Identical products • Standardized methods of advertising • Synchronized sales campaigns • Similar pricing across regions • Concurrent product launches There are eight steps that our company implies this strategy The first step is to settle on a special function of a product Our dishes machine has already had a unique function - Pressure meters for steam; water; medical gases; compressed air and clinical vacuum; and heating ventilation and air conditioning (HVAC) systems The next step is an in-depth understanding of target markets before launching our global standardization strategy Our market is Asian, which has 18 different cultures, traditions and consumer behavior Our company has to pay attention to understanding Asian markets as carefully as possible The third one is to identify the country with business potential Delicants company needs to understand the laws governing businesses, norms and acceptable payment modes in Asia The fourth step is to be aware of Delicants’ foreign competitors: Dewell; Dezen; Freshhome; IKEA and so on We should understand these competitors and the strategies they used The following step is to set a list of specific and realistic goals to achieve by standardizing our marketing approach We have in mind a universal message it intends to deliver to our clients when setting goals The sixth is that Delicants will ensure uniformity in branding Our company settles for branding signifiers to express our standardized message effectively The image, colors, sounds and logos used on the brand should be consistent across the Asian regions The seventh step is to make a marketing plan Our company will celebrate an online competition called “Customize your own” to attract talented designers and customers “Customize your own” is about to design or decorate own dishes washer In this competition, we still spread our slogan - “Delicants makes your house a home” and mission statement - “to provide extraordinary health to people during their meals, especially during the Covid – 19 epidemic, when residents are now aware of the harm of the bacteria which may exist in their bowl.” Through the competition, our company and products can approach a number of customers The final step is to ensure the approach in a practical way We will recognize that what worked in Vietnam may or may not be effective in a foreign country If consumers in all the target regions understand the product's usage the same way, the standardization strategy becomes viable If may not, we should take time to find out the reasons and solutions Market v Market overview The Furniture market is divided into seven segments: Living Room Furniture, Bedroom Furniture, Kitchen & Dining Furniture, Outdoor Furniture, Home Office Furniture, Lamps and Lighting, and Floor Covering Due to rising 19 living standards and a higher income, consumers are replacing their furniture more frequently In 2021, the Furniture market realized total worldwide revenue of US$673 billion, representing an annual growth of 12.2% compared to 2020 The growth of the Kitchen & Dining Furniture segment is driven by improvements in materials and designs which are used to provide consumers with a wider range of products Revenues accruing from this segment reached US$81 billion in 2021; an increase of 11.5% in comparison to 2020 International Organizations publish socio-economic statistics for more than 200 countries Excluding small economies (states with low population density and few inhabitants, developing economies with very low per capita incomes), the new countries have been selected by CSIL on the basis of the size of the economy, and the importance of the furniture sector and its contribution to the world furniture trade The 100 countries constitute almost 90% of the world population and more than 95% of the world GDP Aggregate furniture production for these countries (at production prices, excluding retail markup) is currently about US$ 420 billion This means the inclusion of virtually all countries that are significant to the furniture industry After the expansion, CSIL coverage includes 40 countries in Europe, 18 countries in the Americas, 21 in the Middle East and Africa, and 21 in Asia and the Pacific Table 1: Percentage breakdown of world furniture production, 2016 (Source: CSIL) The main furniture producer is China, with 39% of world furniture production Other major furniture manufacturing countries are the US, Germany, Italy, India, Poland, Japan, Vietnam, the UK, and Canada 20 Table 2: Major furniture exporting countries Exports, 2010-2016 (Current US$ billion) (Source: CSIL processing of United Nations, Eurostat, and national data) The main furniture exporting country is China, followed at a distance by Germany, Italy, Poland, and Vietnam A major new development is a decrease in Chinese furniture exports in 2016 The fastest-growing furniture exporter (from a low base) is Vietnam v Potential market • China After more than 20 years of rapid growth in the furniture industry, China has now become the world’s largest furniture producer and exporter According to information released by the China National Furniture Association (CNFA), there are 50 furniture manufacturing clusters in China, covering the six regions of the Pearl River Delta (PRD), Yangtze River Delta (YRD), Bohai Rim, north-eastern China, central China, and western China The PRD is China’s largest furniture manufacturing base with the highest furniture industry concentration, the highest production output, and the strongest integrated support capability Next come to Fujian, Zhejiang, Jiangsu, Shandong, and Shanghai, which have an edge in product quality and operations management In the YRD region, led by Shanghai, the furniture industry is developing rapidly, with the highest average growth rate in the country The northern and northeastern regions, with Beijing at the center, have a sound furniture industry 21 base and rich wood resources As for the central and western regions, the furniture industry there is actively capitalizing on the opportunities arising from urbanization With the advance of AI, big data, and 5G, smart household items may become mainstream Many countries are demanding reductions in carbon emissions, and smart homes could go a long way to satisfying user needs in this respect Smart furniture can receive signals and make assessments through sensing technologies, adjusting to offer better convenience and comfort Examples of smart furniture include dining tables that can monitor the weight and body temperature of infants and tables that can adjust height automatically in accordance with the height of a user China’s smart furniture industry is increasingly mature, and industrial parks for smart household appliances are its main development mode There are about 115 such industrial parks countrywide, the majority of which are concentrated in Henan, followed by Guangdong, Jiangsu, and Tianjin According to iiMedia, China produced 801 million pieces of smart furniture in 2020, a year in which the market grew 11.4% to RMB170.5 billion It is thought that China’s smart furniture market could exceed RMB200 billion in 2022 • The USA Apart from being one of the world’s largest furniture markets in terms of furniture sales, the USA is a world’s leading furniture manufacturer and one of the largest furniture exporters by value In 2016, the USA exported over US$2.9 billion worth of furniture products to the global market, representing about 3.6% of the world’s total furniture exports in that year, making the USA the world’s 6th largest furniture exporter in 2016 Other major future markets such as Canada, Mexico, China, UK, and Japan were some of the largest importers of USA’s furniture products Furniture and mattresses made in the USA are constructed of durable, safe materials Most USA furniture makers source their wood from local forests, which means that this furniture is also made sustainably Look for furniture made in the USA featuring sturdy hardwood frames and solid wood construction While most imported furniture is made in a factory on an assembly line, furniture made in the USA is often hand-crafted by skilled artisans and craftsmen Take Amish made furniture, for example This beautiful furniture is 22 built by hand using old school, time-tested methods and tools that continue to be used today This furniture is built by craftsmen who have many years of experience Many have had furniture makers in their family for generations Mass-produced products built in a factory overseas don’t offer the character or the same level of quality that handcrafted furnishings The safety standards for furniture in the USA are basically the highest in all over the world Whether it is dangerous chemicals used in dyes or thin materials used to make furniture frames, this can compromise the health and safety of you and your family In the United States, furniture manufacturers are held to rigorous safety checks and standards that are put in place to protect the consumer These standards are put in place to protect the buyer and ensure that customers are getting high-quality furniture that won’t cause harm to the user Aside from the safety of the product itself, American-made furniture matters to the people who make it Entry strategy v Joint venture strategy Delicants believes Joint Venture Strategy is the optimal choice Delicants understands the potential of the company, wants to develop a fast – growing business while not being able to it alone Therefore, Delicants believes that choosing the joint venture strategy is the most reasonable choice at the moment, here are the reasons: - Delicants can benefit immensely from a foreign partner’s familiarity with local government regulations, its knowledge of the buying habits and product preferences of consumers, its distribution channel relationships, and so on - Starting a joint venture is a great way to save money or split costs: By joining forces in producing components, assembling models, and marketing their products, Delicants can realize cost savings not achievable with our small volumes - We can use joint venture partner's customer database to market our product - Upscale production: This is a great opportunity for Delicants to learn and supplement the expertise gained from conducting joint research, sharing technological know-how, studying each other's production methods and 23 understanding how things work Adjust marketing and sales methods to fit local cultures and traditions - Through collaboration with other companies, Delicants can sometimes effectively erect barriers for competitors that make it difficult for them to penetrate the marketplace However, the joint venture strategy also has predictable disadvantages such as: risks when partners have problems, being too dependent on partners for both expertise and necessary competitiveness, … Therefore, Delicants always actively manage resources well, upgrade expertise, build detailed operation plans and create their own reputation and brand Why don’t we choose another entry strategy? An export strategy will require the organization to acquire new capabilities and dedicate organizational resources to properly conduct export transactions Exporting is much more sensitive to tariff and other trade barriers and fluctuations in exchange rates The big disadvantage of licensing and franchising is the risk of providing valuable technological know-how to foreign companies and thereby losing some degree of control over its use Besides, foreign franchisees not always exhibit strong commitment to consistency and standardization, especially when the local culture does not stress the same kinds of quality concerns Rolling out a foreign subsidiary can be an expensive proposition both financially and in time requirements In conlusion, for a new business like Delicants, using a Joint venture strategy is the most appropriate choice This solution is quicker to form and develop, less risky, more flexible to operate and enable stretching financial, managerial and technical resources It is a way to increase sales without too many investments and without a large increase in overhead costs How to implement this joint venture strategy? Choosing the right joint venture partner: The ideal partner in a joint venture is one that has resources, skills and assets that complement our company Select suitable channels for selling into the market: Delicants’s main channels are selling through electric retailers (HC, Dienmayxanh, …) and furniture retailers (UMA, JYSK, …) Besides, our company sells directly via our 24 website and using direct mail or at trade shows and also uses a distribution It could be effective ways to connect directly with our customers which could encourage their brand loyalty A proper and sensible marketing strategy: - According to the survey, Chinese people are very interested in online shopping: - Promote communication on the most used social networking platforms: WeChat; Sina Weibo; Baidu Tieba; XiaoHongShu; Tencent Weibo Special investment in marketing on Xiaohongshu - has become the focus of attention as the crowdsourcing app has attracted brands to urban affluent young people and allowed marketing to go viral It is a platform that combines social media and e-commerce with over 300 million registered users - Use influencers to promote products through live-streaming platforms and engage with consumers in real time Product packaging: Chinese consumers are often attracted to new and attention-grabbing goods, so product packaging is also a factor that needs attention Therefore, the packaging must ensure its uniqueness and novelty 25 PART C The new industry: kitchen utensils and appliances Delicants decide to diversify the business into kitchen utensils and appliances when faced with diminishing market opportunities and stagnating sales, since this industry is closely related to the original ones and it also takes up a great proportion in the market due to the necessity of the kitchen in households Business model: B2C (Business to Customer) and B2B (Business to Business) Delicants uses B2C model to operate the new company and grow revenue The main reason for this is the company's target to sell products directly to the customers from retailer chains, marketplace social media, online platforms Besides, the B2B model will also be applied since we plan to cooperate with the housing project/real estate company/construction industry to equip our products in their apartments Target audience: household/family Target market: Vietnam There is no denial that the kitchen is a vital part of the house, and it is also the key element to make your home “home” In the past, kitchen tools used to be taken for granted and considered very simple and cursory Nowadays, with the development of the economy, the living standard and the demand for cooking is raised, people start to take more care of the kitchen They are increasingly willing to pay for safe and high – quality kitchen tools which enable them to have delicious meals, satisfy their hobby in the kitchen, and become a great decoration in the house With the increasing population and the tendency to move to big cities, the demand for accommodation is soaring, which obviously leads to the demand for kitchen utensils and appliances These are absolutely indispensable in every household Market share: According to Mordor Intelligence, the Vietnamese kitchen furniture market has maintained stability and is expected to rise continuously in 26 2024 Therefore, the market is in the development stage with a lot of potential for future expansion in both inner city and suburban areas Market landscape: Kitchen appliances industry will grow further in popularity among Vietnamese consumers due to the household demands and the expansion of housing projects The kitchen appliances industry in Vietnam has been dominated by the big international furniture brands such as BOSCH, TEFAL, BRAUN,… Justification for diversifying by using the five forces model v Industry attractiveness • The threat of new entrants The kitchen tools market has become more exciting than ever since Vietnam's economic integration Brands race to develop, compete by quality, design to service New companies will have to compete fiercely for market share Therefore, it is required that new products be really special, convenient, easy to use, and reasonably priced That can create great competitive pressure for businesses • Bargaining power of buyers Nowadays, customers have a wide variety of options to choose from when they are buying kitchen tools With the advent of online shopping, this convenience has increased even more, thus creating a problem for firms to maintain their customers The switching costs are low, and people are easily influenced by advertisements and marketing by renowned athletes Thus, the bargaining power of customers is high • Bargaining power of suppliers: The bargaining power of suppliers Delicants is low Delicants is highly price sensitive and has adequate market knowledge Low switching costs and availability of substitutes also help reduce competition • Industry Competitors: Delicants is in direct competition with some international brands such as Bosch, IKEA,… and local brands in selling products like Sunhouse, Nha Xinh The economic switching costs for consumers are high so they can easily compare and choose the best price However, the industry is growing at a fast rate so there will be many opportunities for new entrants to the industry The threat of industry competitors is a moderate force affecting Delicants 27 • Threat of Substitute Products: The availability of substitute products or services makes the competitive environment challenging for Delicants This threat is moderate for Delicant because the psychological switching costs of moving from industry to substitute products are low and a cheaper substitute product/service is available from another industry However, customers cannot derive the same utility (in terms of quality and performance) from substitute products as they derive from the Delicants’s product v The better – off test Diversifying into a kitchen tools industry would offer potential for Delicants because synergies enable business to share resources and technology, creating more value Approaches to diversifying into a new industry Delicants commits to joint venture collaboration to raise the chance of joining the furniture market By forming a joint venture - a common method is to combine the business prowess, industry expertise, and personnel of two companies This type of partnership allows each participating company an opportunity to scale its resources to complete a specific project or goal while reducing total cost and spreading out the risk and liabilities inherent to the task Delicants decides to choose Sunhouse as a partner to create and develop together Entering the domestic furniture market: With the help of Sunhouse can research the condition of the furniture market in Vietnam easily and fastly and start to build our own development strategy By that, the company works and profits are optimized since we are still the beginner Learning from partner’s experiences: Sunhouse already has its own reputation in the furniture market, go abreast with their experiences in production in this field Follow the lead of Sunhouse would benefit both production and business management Strategic fit along the value chain Supply chain: Because of the possibility for transferring skills in sourcing, sharing resources and capabilities in logistics, and engaging with mutual supply chain partners, Delicant and Sunhouse that have a strategic fit in 28 terms of supply chain operations can perform better together As a result, Delicants may take advantage of and create supplier connections Sales and marketing: Joining a new market and having a new range of products show that the company also needs a new strategy to sell the product and promote them Only when perfectly combining sales and marketing can the company maximize profits and minimize costs for its business Related firms' products can be advertised on the same website and media adverts By streamlining order processing and payment, as well as employing common promotional tie-ins, there may be cost-cutting opportunities Customer services: When the number of interior products’ consumption is increasing, the attention to customer care also plays an important role Delicants should take care of customer care services because this is the way to retain its customers as well as attract many new customers and create a competitive edge over competitors R&D and technology: Delicants is a company that basically applies technology inside our products and also the production Hence, our company already has a strategy that fit with R&D and the technology we provide With our tech, the product will be advanced, the expenditure on production will decrease but sales of the products will rise Distribution: Delicants will be benefited from all the distributors that have already cooperated and are still seeking new distributors Manufacturing-related: With our existing capacity for the production and development of items When Delicants applies the joint venture model with the strengths of the two companies, the construction and joint development will be optimized in a short time 29 REFERENCES (2020), How has Covid-19 impacted Vietnamese consumers?, NielsenIQ [ONLINE] Available at: https://nielseniq.com/global/en/insights/analysis/2020/how-has-covid-19impacted-vietnamese-consumers/ (2020), Statista Consumer Market Outlook –Market Report, Statista [ONLINE] Available at: https://www.statista.com/study/55490/furniture/ (2020), Which Places In The World Are Great At Making Furniture, Articles at Sassy Townhouse Living [ONLINE] Available at: https://sassytownhouseliving.com/which-places-in-the-world-are-great-atmaking-furniture/ (2021), Vietnam home furniture market – growth trends, Covid-19 impact, and forecasts (2022-2027), Mordor Intelligence [ONLINE] Available at: https://www.mordorintelligence.com/industry-reports/vietnam-home-furnituremarket (2020), Xu hướng thị trường kinh doanh nội thất 2020!, GOGOX blog [ONLINE] Available at https://www.gogox.com/vn/blog/xu-huong-thi-truong-kinhdoanh-noi-that/ CSIL team (2018), World furniture outlook 2017/2018 [ONLINE] Available at: https://www.worldfurnitureonline.com/PDF/pressrelease/W0_July17_PR.pdf HKTDC Research (2021), China’s Furniture Market [ONLINE] Available at: https://research.hktdc.com/en/article/ Simon Kemp (2020), Digital around the world in April 2020 - We Are Social China [ONLINE] Available at: https://wearesocial.com/cn/blog/2020/04/digital-around-the-world-in-april-2020/ 30 PEER GRADE FORM No Student's Names Nguyễn Thanh Xuân Nguyễn Thị Minh Châu Phạm Nguyễn Lê Hà Anh Ngọc Mai Nguyễn Đào Lan Hương Trà Nhi Nguyễn Thanh - 10 10 10 10 10 10 - 10 10 10 10 10 10 - 10 10 10 10 10 10 - 10 10 10 10 10 10 - 10 10 10 10 10 10 - 10 10 10 10 10 10 Xuân Nguyễn Thị Minh Châu Phạm Nguyễn Ngọc Mai Lê Hà Anh Nguyễn Hương Trà Đào Lan Nhi Average marks 31 ... company takes from a global standardization strategy: the ability to transfer best practices across markets; the innovation from knowledge sharing and capability transfer; the benefit of a global. .. It has qualified package service and customer's buying process: consulting, design, transportation, installation, warranty - Customers can access detailed information and hands -on images about... ventilation and air conditioning (HVAC) systems The next step is an in-depth understanding of target markets before launching our global standardization strategy Our market is Asian, which has 18