Analysis of lalamove’s organizational structure in viet nam

FOREIGN TRADE UNIVERSITY FACULTY OF INTERNATIONAL ECONOMICS

FOREIGN TRADE UNIVERSITY FACULTY OF INTERNATIONAL ECONOMICS -🙣🙣🙣 - PRESENTATION SCRIPT ANALYSIS OF LALAMOVE’S ORGANIZATIONAL STRUCTURE IN VIET NAM Class: KDOE307.1 Guide Teacher: PhD Nguyen Hong Tra My Group: Hanoi, September 2022 1 Table of Contents 2 Introduction 1.1 Overview of Lalamove Lalamove is an on-demand delivery company that uses technology to match users and drivers and offers same-day or advanced order deliveries “Lalamove was born to make on-demand delivery possible for everyone at the touch of a button Through a single app, users could gain access to a wide fleet of suitable delivery vehicles helmed by professional drivers.” Lalamove is a private transportation, logistics and technology company Founded in 2013 in Hong Kong, under the name EasyVan, Lalamove has been known for delivering goods within an hour, and was named as the “Asian Uber.” Lalamove is considered as an unicorn startup and has become one of the world’s fastest-growing Technology companies It now has over million users, 1,500,000 delivery drivers and more than 1400 strong team of diverse and empowered employees Since its humble beginnings in 2013, Lalamove has expanded to more than 30 markets around the world, with robust operation teams across 300 cities in Southeast Asia, China, and Latin America Compared to other competitors, Lalamove possesses some distinguish technological advantages: such as Real-time tracking of drivers and the fleet of vehicles ; Delivery optimisation tools, Adaptable pricing structures, Cashless payments with the Lalamove e-wallet, Multi-stop orders and advanced scheduling, and API integration to automate orders For companies of all sizes, Lalamove has emerged as a strategic partner in resolving their last-mile delivery difficulties Lalamove assists organizations from a wide range of industries to scale and outsource deliveries in accordance with their demands, including independent brick and mortar businesses, restaurants, retail stores, and e-commerce businesses, electronics, Fashion and Cosmetics, Food & Beverage, Manufacturing, Publishing, Retail, Trading and Construction, and Wholesale Lalamove Vietnam Lalamove officially expanded its business in Ho Chi Minh City in 2017, and a year later in Hanoi, 2018 In July 2021, Lalamove started operating in Hai Phong Focusing on clients in urban areas and committing to deliver goods within 55 minutes, Lalamove is forecast to be a potential competitor in the delivery market in Vietnam Core value Passion Grit Humility Execution 3 Love your life, love your work, love Lalamove! - We bring passion, enthusiasm, and positive energy to everything we We act like founders Think of succeeding, think of failing, but never think of giving up - We embrace challenges with When things are going well, look outside; When things aren not going well, look inside - We courage, resilience, actively learn from and never give up our mistakes in order to continuously improve Achieve goals and believe in solutions, not excuses - We endeavor to accomplish every mission, no matter how hard it is Mission and Vision •Mission: to empower our local communities by making deliveries fast •Vision: to make Lalamove synonymous with local delivery 1.2 and simple Overview of delivery market Vietnam is the emerging hotspot of the world with its growing business activities in the country In particular, its express and delivery market is worth USD 0.71 billion in 2021 and is expected to reach USD 4.88 billion by 2030, achieving a compound annual growth rate of 24.1% from 2022 to 2030 Recognizing that the delivery market here has many great opportunities to make a breakthrough after the epidemic, many delivery companies choose to accelerate investment in Vietnam, including Lalamove The e-Logistics competition has the participation of several dynamic players In addition to domestic names such as VNPost, Viettel Post, and AhaMove, international "giants" such as Grab, Gojek or LalaMove have also set foot here In particular, Grab, Gojek, LalaMove, AhaMove and Bee compete with each other in the instant delivery segment In this potential market, there are several key players that are holding the market share International "giants'' such as Grab, Gojek, or LalaMove have also made their way here in addition to big domestic brands like VNPost, Viettel Post With 2,650 post offices and 24,800 delivery routes nationally, VNPost has been in business for 75 years and has more advantages than any of its rivals in the delivery sector In terms of international companies, GrabExpress, Go-Send, GHN, GHTK, DHL eCommerce, Lalamove, and some other names altogether share the market 4 The organizational structure of Lalamove 2.1 Going global structure Lalamove adopts the worldwide area structure as an integrating mechanism Regarding this structure, the global market of Lalamove is divided into autonomous geographic areas, and then each area establishes its own set of value creation activities The worldwide area structure then decentralizes operational authority for those activities The structure helps Lalamove facilitate local responsiveness, but this can result in a fragmentation of the organization where it can be difficult to realize location and experience curve economies 2.2 Organizational structure of Lalamove VietNam 2.2.1 Vertical differentiation Lalamove adopts a more decentralized management but it actually combines both the centralization and decentralization decision making process At the top management level of Lalamove Vietnam, decision making is centralized by which major decisions are made by the country manager and communicated to lower-level managers for implementation At the lower level of management, Lalamove follows decentralized decision making Each brand of Lalamove has its own city director in charge of the brand's operation and making decisions related activities Lalamove as a decentralized organization permits subordinate branches to enjoy a proportionately high-level independence Although it still makes major strategy decisions at the headquarters level, daily operations are left up to subordinate branches to derive and perform The responsibility for operating decisions is pushed down to local units, which have a high degree of autonomy concerning pricing, distribution, marketing, etc 5 2.2.2 Horizontal differentiation Lalamove’s organization structure in Vietnam has a functional structure Lalamove is an organization that helps people to make on-demand delivery possible at the touch of a button through a single app and users could gain access to a wide fleet of delivery vehicles, 24 hours a day, helmed by professional drivers To schedule a delivery like that, Lalamove's operating system also needs to be properly divided to maximize capacity The company is structured as such considering the functions of work, as well as divisions, which can be seen from the functional aspects through titles such as Business Development Manager (BDM), Drive Operations (DOPS), Business Development (BD), Customer Support (CS) Lalamove divides internal operations into different departments with specific functions Each department's workload and skill requirements are different 6 This is the general functional structure of Lalamove in Ha Noi, Hai Phong, Ho Chi Minh City Abbreviation: •BDM: Business Development Manager •DOPS: Driver Operations •BD: Business Development •CS: Customer Support According to the model of Organizational structure of Lalamove as we have research, n the top is the Country manager - which is the host country of Lalamove in Hongkong, followings, we have main headquarters in Vietnam which located in Ha Noi, Hai Phong, Ho Chi Minh City And, each branch has a top manager in charge and manages many smaller teams or departments usually divided into to departments, which are: Business Development Manager (BDM), Driver Operation (DOPS) and Partnership These departments also have team leader in order to keep track of the members and operation activities To be specifically: Organizational structure in Ha Noi: Lalamove's office in Ha Noi has departments: Accountant, Business Development Manager (BDM), Driver Operations (DOPS) And in BDM, there are smaller teams which are: Business Developer, Account Manager, Partnership In DOPS, there are smaller teams which are: Drivers and Operators 7 Organizational structure in Hai Phong Lalamove's office in Hai Phong is slightly different, with only departments: Business Development Manager (BDM), Driver Operations (DOPS); and the division of the team are similar: In BDM, there are smaller teams which are: Business Developer, Account Manager, Partnership In DOPS, there are smaller teams which are: Drivers and Operators Organizational structure in Ho Chi Minh City The headquarter in Ho Chi Minh City is very diversified with departments: BDM, DOPS, Marketing, IT, CS, Accountant 8 The division of the team are also similar: In BDM, there are smaller teams which are: Business Developer, Account Manager, Partnership In DOPS, there are smaller teams which are: Drivers and Operators In addition, the company culture is to respect others - enhance communications among members in a team, which makes it impossible for departments to reach their highest efficiency Lalamove company prefers people to be specialized in their field and position in charge Therefore, employees are receiving the thorough introduction and encouragement from the team leaders to perform better in their tasks Besides, although there are different small teams to take charge of different jobs, there is always a close connection to be able to conduct work effectively and bring the most convenient services to users Issue Analysis 3.1 Vertical differentiation 3.1.1 Top management A disciplined atmosphere is an advantage of centralized decision-making at the highest levels of management The country manager not only oversees key organizational decisions, but also acts as a sounding board for staff members who are having difficulties at work The country manager is the person lower level management personnel can turn to if they have a problem with their job or want some adjustments The decision-making and problem-solving processes are simplified by centralization since it keeps everything in appropriate order and ensures that the higher management authority takes all final choices Lalamove can easily concentrate on realizing its goal when it has a consolidated management structure There are open channels of communication, and the country manager may inform staff members of the organization's mission and direct them toward realizing it 3.1.2 Lower management Advantages •Lalamove applies decentralized decision-making at lower levels Managers at lower levels can make decisions themselves, relieving the burden of making decisions for the country manager or city director •Decentralization is the best solution to quick decision making For a delivery service company like Lalamove, many unexpected situations can happen such as complaints from customers, or during COVID-19 pandemic, the government required all shippers to have a road permit, etc 9 In these situations, if Customer service and HR departments have to inform and ask for solutions from the country manager, it will be time-consuming and may leave undesirable consequences Decentralization, in turn, results in faster and accurate decisions which are well aware of the real scenario •Every section achieves adequate autonomy to use their creative flair under decentralization The top-level management can foster healthy competition among the various divisions in this way Employees even develop managerial skills and help in solving the succession problem which ultimately ensures the growth and continuity of an organization •Decentralization is a key strategy for addressing our fundamental demand for autonomy, dominance, prestige, and status This contentment creates a cadre of contented managers who feel accountable for the advancement of the business Disadvantages • • 3.2 The main disadvantage of a decentralized organization is that top managers lose control over the day-to-day activities Giving lower managers autonomy may backfire, if department managers aren't up to the task, which might lead to friction between managers and personnel When discussing the benefits and drawbacks of decentralization, it is important to keep in mind that each division has a great deal of autonomy In turn, this makes it challenging to organize the entire action Horizontal differentiation Lalamove’s functional structure brings about some advantages as well as disadvantages Advantages •Efficiency and productivity: The functional structure leads to specialization as each profession is divided into different sections, resulting in increased levels of productivity in the work environment Another advantage observed in the functional structure is that all the employees working within a department are experts in their field, which is beneficial for coordination at branch level This facilitates easy accountability for the work •Clear hierarchy & Cooperation: With clearly divided functions and transparent chain of command, the functional structure allows the employees to develop working interactions within their departments, reducing the number of communication channels Moreover, cooperation is excellent within the department when employees know the one manager they are to answer to, instead of multiple people •Loyalty & Morale: The functional structure streamlines communication and reduces confusion among employees Employees can feel confident about what they are doing because it is standardized, which increases the feeling of loyalty to their department and the organization as 10 10 a whole What’s more, this enhances morale and work ethic, as there is more job security Disadvantages •Boredom: Working in specific departments in Lalamove with standardized tasks may lead to boredom as employees repeat the same task over and over and become less enthusiastic over time • No sufficient cooperation: One of the major weaknesses of Lalamove’s functional structure is the fact that there can be insufficient cooperation among different departments and management problems Though they record high efficiency and productivity they lack coordination among functional units or departments, this has a way of slowing down productivity Departments tend to compete against each other hence, putting their department’s interests above the organization’s Competition for resources between product lines can lead to counterproductive results •Limited view of organizational goals: A department can become too autocratic and put its goals above those of the organization as a whole With so many specialists involved in a process, it is difficult to pin the blame for a specific product or service malfunction on any individual Relationship between organizational structure and strategy of Lalamove VietNam In VN, Lalamove organizational structure is functional structures - in which it is structured considering the functions of work, as well as divisions, which can be seen from the functional aspects through titles Lalamove has main product divisions which are Driver Operations, Business Development, Customer Service, Marketing, Accounting and IT Each of these departments is responsible for providing a specific strategy which best fits the VN market Employees working within a department are experts in their field, which is beneficial for coordination at branch level To illustrate, we bring several examples a IT A YouGov Survey conducted from July 16 to 20 in 2021 recorded that the number of users shopping online was at a record level, with an average of 30 million online purchases recorded in Vietnam every day 75% said it was important for retailers to accept digital payments Having realized the needs, on July 13, 2022, SaleMall Joint Stock Company and Lalamove Vietnam Co., Ltd have agreed to sign a cooperation agreement The use of technology in logistics will clearly continue to open new opportunities to improve deliveries and customer service through chatbots 11 11 FCHAT CHATBOT Create a chatbot with Fchat to increase sales, save money on advertising, sell automatically and take care of customers 24/7 And E-Wallets SALEKIT.COM Salekit is a great software to help you manage multichannel sales, integrate Website and Marketing Automation SALEMALL SaleMall is a portal which connects product suppliers and sales websites with millions of potential customers SALEKIT.IO Increase sales through automated multi-channel customer care and management via email, SMS, Zalo ZnS, Webpush, AutoCall, CHECKOUT.VN Unified Online Payment Solution - One Connection To All Payment Gateways LOGISTICS Shipment service nationwide range on 12 12 b Business Development and Customer Services In fact, before the impact of the Covid-19 epidemic, many consumers have changed their consumption habits, shifting from shopping & transacting in person to online According to recent market reports Kantar's survey on Covid-19 conducted from June to 23 2021 said that 62% of Vietnamese consumers confirmed that they have significantly increased the number of online transactions Understanding the demands of the market, Lalamove quickly launched a series of new services, helping to meet the diverse needs of both buyers and sellers Lalamove Traditional delivery Yes Yes Yes No Yes No Online tracking Yes No Cargo insurance Yes No Yes Yes Yes No Yes No On demand, deliver right after customer place orders Multi tonnage Know the price in advance Customer care call center Free VAT invoice Multi node delivery As of August 2021, Lalamove is providing quite diverse service packages, classified by vehicle: LalaNOW – inner-city express delivery by motorbike; LalaTRUCK - Delivery by truck 500kg - tons Parallel to that, the launch of products: LalaPICKUP: delivery by pickup truck & LalaVAN: delivery by van marks Lalamove's breakthrough steps in the inner city forwarding market This unit has left impressive numbers in the field of freight forwarding, with 30,000 driver partners, serving more than 10,000 corporate customers and more than million completed orders The company also came up with an innovative idea of a premium package called “Super speed 2h” which is equipped with a series of accompanying features such as delivery with a thermos box, hand delivery, delivery with collection, return to the pick-up point, night delivery, delivery on holidays and Tet This year, Lalamove has updated features to better support customers, especially corporate customers such as e-wallets, online management & control, optimal delivery of many stops with the best route, special pricing policy special With this approach, every consumer's shopping becomes simpler than ever c Driver Operation In VN, Lalamove uses many measures to deliver safe goods, in which the training of partners and drivers is the top concern With thousands of welltrained, professional and dedicated drivers, Lalamove is driving the breakthrough in the fierce competition In addition, Driver Partners are motivated to work through multiples of Incentive Policies Comparison among Lalamove branches on global range As mentioned above, Lalamove HongKong applies the Wordlwide area structure which divides the world into several geographic areas Within each geographical area, Lalamove owns many subsidiaries that provide products demanded in the area As Lalamove is a large organization with only one product line - delivery, the organization focuses on diversifying the methods of delivery in each location Each area has a high degree of task specialization and a high amount of reporting levels in within An example of this is the difference between shipping strategy in each area In VietNam, Lalamove applies the strategy which focuses on emphasizing the competitive advantage of the company - the shipping time Whichever the goods are, Lalamove can assure to provide the fastest shipping process Furthermore, VN Post Express Joint Stock Company (EMS Vietnam) and Lalamove Vietnam signed a strategic cooperation agreement to deploy a 2-hour inner-city delivery service in Hanoi and Ho Chi Minh City The EMS premium service package that is providing intra-provincial express services will be synchronized and optimized by Lalamove's Lala2H service Thereby, allowing parcels sent via EMS to reach customers in up to working hours In contrast, In Mexico, the strategy made by the local division is the price discrimination, in particular is the peak-load pricing The Mexican Marketing department runs a campaign which includes advertisements and brochures 🙣 Different delivery methods require different vehicles Lalamove uses truck, cargo, SUV, Sedan to delivery in Mexico and Brazil while trucks and motorbikes are mainly used in VietNam Mexico and Brazil VietNam CONCLUSION: As Lalamove employs the Worldwide Area, the company is better equipped with the in-depth information of each area so as to make the best operating decisions that benefits the company 6 Recommendations 6.1 Vertical differentiation The difficulty for the top managers to stay on top of the daily job is a major issue in decentralized organizations The top management must take charge of the effectiveness of each area, especially for Lalamove Vietnam, which is spread throughout three separate regions To lay the groundwork for senior managers to take charge of the entire business, it is essential to have the appropriate and reliable metrics for evaluating the levels of efficiency and effectiveness in each department and area On the other hand, official meetings should be scheduled once a month and once a year so that each department and area can stay informed about the activities and positions of the other departments and areas 6.2 Horizontal differentiation Reduce boredom while working: The boredom of repeated work as a nature of work is inevitable It depends on how each individual responds to the work However, it is the manager's responsibility to establish the most favorable working conditions Regarding each department, they can be adaptable and develop their own work culture based on the traits of each department To accommodate the needs of as many employees as possible, the company as a whole may want to consider investing in better working conditions Additionally, having a rich and fair compensation system aids in keeping staff Activities held by the HR department may also be of great assistance in alleviating employees’ boredom Though Lalamove currently has some bonding events such as monthly parties or annual trips for everyone, there is still some space for other activities namely rewarding top employees, knowledge/experience sharings and so on However, the work-related boredom brought on by the incompatibility of the personnel can be avoided To help new hires get used to the position they are applying for, the organization may offer a trainee program The employer can determine a trainee's compatibility and provide appropriate orientation guidance for future employment based on their performance Additionally, if employees have enough talent, they can develop liberal regulations that permit them to switch to different areas Increase cooperation among departments and enlarge view of organizational goals: Miscommunication, which frequently occurs in organizations with functionally oriented structures, is the main issue The important thing is that each department understands how it fits into the overall business plan and how it works with other departments to get there The answers must be based on this fundamental idea It is essential to have an up-to-date internal information network and a company culture that gives employees the chance to regularly examine the work of the entire organization in addition to getting to know one another Additionally, newcomers' first training is crucial for the long run Even at a lower level, it involves more than simply giving employees an overview of the business; it also involves finding ways to motivate them by helping them recognize the company’s significance In order to prevent needless disagreements across departments, the management must establish a cohesive working method amongst them Additionally, it is essential to organize the work order and operating equipment in the most logical way possible by conducting an analysis of the relationships between the departments  ... Manufacturing, Publishing, Retail, Trading and Construction, and Wholesale Lalamove Vietnam Lalamove officially expanded its business in Ho Chi Minh City in 2017, and a year later in Hanoi, 2018 In. .. bring passion, enthusiasm, and positive energy to everything we We act like founders Think of succeeding, think of failing, but never think of giving up - We embrace challenges with When things... operating in Hai Phong Focusing on clients in urban areas and committing to deliver goods within 55 minutes, Lalamove is forecast to be a potential competitor in the delivery market in Vietnam