Luận văn thạc sĩ quản trị kinh doanh quốc tế MBA (286)

CHAPTER - SUMMARY _ Developing business strategy is crucial and important to any company However, to have a good strategy, specific solutions on human resource, finance, technology development and marketing, etc are needed In this chapter, we conduct SWOT analysis of NTC We develop a targeted strategy and give out proposed implementation solution of the business strategy of NTC on the basis of forecast on economic development growth rate in 20102015 Capstone – Group - GEMBA E01 67 CHAPTER III SOME SOLUTIONS ON IMPROVING BUSINESS STRATEGY OF NTC IN THE PERIOD 2010-2015 3.1 Development direction of the Company in the future 3.1.1 Judgment of Vietnam’s economy in 2010-2015 The Asian Development Bank judges that Vietnam’s economy might drop to bottom/lowest point at the end of the year and will go up since 2010 The newly-emerged East Asia is going to enter in the transition period from crisis to recovery ADS forecasts that Vietnam’s economy will reach 6.5% in 2010, rank the 2nd in the newly-emerged East Asia (including 10 members of South East Asian Nations (ASEAN) and China, Hong Kong, Korea and Taiwan) (By Vn Express) Consultants of Economist Intelligence Unit have some following judgment on development of Vietnam’s economy as follow: Business environment’s prospect Business environment’s prospect of Vietnam in 2009-2013 will be better than the one in 2004-2008, increase to 5.42 from 5.03 of 2004-2008 period However, at global level, Vietnam will not have much improvement on its ranking level In the period 2009-2013, Vietnam ranked 15 out of 17 countries in the region, following Sri Lanka, Indonesia, India and the Philippines and was followed by Pakistan and Bangladesh Economic prospect Capstone – Group - GEMBA E01 68 Real GDP growth rate of 2009 will be lowest in decades and the average growth rate of 6.5% will be sustained in 2010-2013 However, EIU thinks that there will be some obstacles to economic recovery Some economic rescue measures in 2008 and 2009 can lead to higher inflation rate Market opportunity Opportunities in Vietnam’s market will increase along with population growth and income increase though low GDP per capita by regional standard is still an obstacle to potential opportunities Individual expenditure decreased in 2009 and will increase in the period 20112013 Disposable income in the period 2011-2013 will increase sharply and it will lead to higher demands especially for goods and commodities that Vietnam market has not been completely developed for Long-term prospective of Vietnam market Vietnam’s economy will have good growth rate in the coming decades The major reason is good development of private sector, increased competition, more effective allocation of resources Economic reform will lead to improved Capstone – Group - GEMBA E01 69 index of foreign investor’s confidence, FDI growth, improved technology and increases competition According to EIU’s forecast, average GDP per capita in the period 2009-2030 will be 3.9% With the economic growth rate of 8% to 2015 and with the current status of urbanization, big cities like Hanoi, Hochiminh, Da Nang, Hai Phong, etc., have been expanded with satellite cities in order to reduce the immigration of population to big cities In the coming years, more investment will be spent on high buildings, offices, factories and this will create challenges to the Company 3.1.2 Targeted objective of the Company from 2010 to 2015 3.1.2.1Qualitative objective: Vision of NTC “Become the leading Vietnamese company in providing overall technology solutions with NTC brand name Trust of customers is the permanent value that NTC is looking forwards” 3.1.2.2 Quantitative objective: 3.1.2.2.1 Financial indicators: Upon the forecast of Vietnam’s economy in the period 2010-2015, we have developed following financial indicators: Capstone – Group - GEMBA E01 70 Table 3.1: Financial indicators in the 2010 – 2015 period No Indicator Turnover 2010 200 2011 300 2012 420 2103 588 2014 853 2015 1066 (billion VND) Cost price 124 180 247.8 346.92 494.51 607.48 Sale costs 32 45 58.8 76.44 102.31 117.23 Operational 30 48 75.6 117.6 187.57 245.12 costs Interest costs 6.5 7.8 8.58 12.44 14.93 Profit before tax 20.5 30 38.46 55.77 80.99 billion VND) Owner ship 20 24 26 29 32 34 capital (billion VND) 3.1.2.2.2 Market indicators Upon forecasted market growth rate, we have developed indicators of market share development of NTC as follow: Table 3.2: Market Share indicators in the 2010 -2015 period No Market share/ 2010 2011 2012 2103 2014 2015 Business activities Building solutions 50 Telecommunication 25 55 30 60 35 60 35 60 35 60 35 solutions Industrial 13 15 17 20 25 10 automatic solutions Capstone – Group - GEMBA E01 71 Software solutions Professional 15 10 20 15 25 20 30 25 35 25 35 services Industrial design 10 20 25 30 30 30 3.1.2.2.3 Human resource development plan (to 2015) With the above financial and market share indicators, we have made a human resource development plan serving for the strategy’s implementation and achieving stated goals Table 3.3: Human resource development plan in the 2010 -2015 period No Training Sector IT Automation Electric telecommunications Finance, economics Foreign languages Architecture Other Total 3.2 Post Educational level Bachelor graduation 10 18 College, education 60 40 50 20 10 25 30 235 22 SWOT analysis for the future: SWOT analysis is a useful tool in understanding circumstance and making important decisions for any company SWOT provides a strategic analysis tool which is used in making business plan, developing strategy, evaluating competitors, marketing, developing products and services, etc Capstone – Group - GEMBA E01 72 In order to develop appropriate strategies to help the Company to gain stated goals, we have used SWOT analysis 3.2.1 Strengths - NTC shares 50% of building solution provision in Vietnam Almost superior buildings in Hanoi use automatic systems provided by NTC NTC also accounts for about 25% of switchboard provision - Comprehensive solutions from well-known partners in the world - Focusing investment and overcome the industrial barrier - Good brand name recognized by the market NTC was recognized as one among 50 strong brands in Vietnam in 2008 - Intensive customer-oriented strategy - High valued added proportion in all stages Pre sales – Sales – After sales - Active, creative leadership board with great passion for technology - Well-educated young staff with practical experience 3.2.2 Weaknesses: - Resources of investors and strategic partners have not been mobilized due to the model as limited company - Development of capital source can not catch up with business growth rate - No plan for market segment - No comprehensive solution for all business activities Capstone – Group - GEMBA E01 73 - Depends much on some major suppliers - Distribution and dealer system has not been developed 3.2.3 Opportunities: - Potential development of main business activities of the Company (IT, automation, software, etc.) - Opportunities from existing customers - The growth of technology use because of young population - Encouraging development of small and medium enterprise policy of the State in recent years 3.2.4 Threats - Competition and penetration of other companies, big suppliers into Vietnam market - Shortage of high quality human resource - Rapid change of consumption habit - Ineffective information control of the Government Big power of press leads to corona effect in enterprise evaluation - Impacts of financial change and varied exchange rate all over the world to all economic sectors 3.3 NTC’s business strategy development in the period 2010 - 2015 3.3.1 Business strategy selection in the period 2010 to 2015 Capstone – Group - GEMBA E01 74 Upon results of operation analysis and assessment of advantages and disadvantages of existing business strategies of NTC in Chapter II and SWOT analysis, we selected Strategy of Making Differences (for implementing in the early period – Priority Strategy) and Business Diversification Strategy (for the following period when the Company’s capacity has been strengthened) * Reasons for selecting the Strategy of Making Differences - In the past, the Company used cost leadership strategy to defeat/win over competitors in bidding and market expansion However, this strategy is not appropriate because business results in recent years show that profit has not been increased though the company had increased turnover due to increased living index, increased labor cost, inflation, exchange rate, etc Increased costs because of external factors led to decreased profit - In the coming time, therefore, the Company should apply difference creation strategy to create competitive advantage Because of high and various market segments, difference should be made to attract attention of customers The Company’s products can create unique difference - Increasing profit of the company with potential market * Reasons for selecting Diversification Strategy - At the moment, the Company does not have a unit of industrial design which specializes on designing automatic systems for buildings, industrial automation, etc - With fast development of technology and rapid change of consumption habit, products’ long life does not last for long The Company should consider of changing business activities when existing products are not selected by consumers or when they are phased out Capstone – Group - GEMBA E01 75 - In IT sector, the Company should be the one which comes first/earlier to gain high profit in the early period of products - For trade company, an extension of business activities will not require much capital/fund like production company Factor needed for business extension include: partner, human resource, capital, etc Therefore, we recommend the Diversification Strategy For the strategy implementation, we also develop some solutions for diversifying business activities which fit with the company’s capacity 3.3.1.1 Strategy of Making Differences Only companies which continuously strengthen their competition advantages will be successful for long term with their business strategies A basic issue which should be dealt by companies when selecting business strategy is answering following questions: which products or services companies will provide; how to make those products and services and how to deliver those services and products to customers Thus, business strategies of each business unit reflect areas and ways that companies can have competition advantages against their competitors The core of business strategy is “selecting activities which create differences or carrying out different activities against competitors” In order to create difference, from the SWOT analysis results, the Company should apply strategy: S-O Combination (Maxi – maxi strategy): NTC should pursue opportunities which are most appropriate to its strengths and business tendency in the dominant market, diversified development (Attack) Capstone – Group - GEMBA E01 76 increase market share With the Company’s brand name, this is completely possible Market share can be increased with old customers such as: * Ministry of Finance: Working office * PetroVietnam: 18 Ngô Quyền – Hà Nội Building, Petro Tower – Mỹ Đình, * Electricity of Vietnam: Twin tower in Yen Phu, Land Hanoi, Land Hochiminh city, Land Nha Trang, 3G Service * Vietnam Post and Telecommunications: * Mobiphone: upgrading 3G service * Securities Companies, banks, hotels, hospitals, etc 3.3.2.1.2 Increased market share of new customers Research and develop, continue extending market of solution provision to new customers With current economic growth rate and investment plan for basic construction of big cities, there will be many opportunities 3.3.2.1.3 Market segment Doing research of market segment for different business strategies in order to have marketing strategies For different market segments, it is required to have different corresponding marketing strategies The Company should focus on marketing strategies to introduce about unique and great features of technology solutions it provides With technology products, NTC has different market segments and should have different products corresponding to each market segment Capstone – Group - GEMBA E01 78 3.3.2.2Solutions of business activity diversification Establishment of industrial and construction design company Establish a joint-stock industrial design company (extending business activity) which specializes for providing design services to different units of the Company and to other companies in order to increase professionalism of the Company’s solutions and extend its business activity At the moment, industrial design is a potential market in Vietnam because in the past years, more civil construction design service was provided With appropriate and effective investment, this sector can have good profit because it is an intelligence product Business activities of the industrial design company are intended to include:  Systematic electromechanical design of civil and industrial projects  Design of ventilation, heating and air condition system for construction projects  Supervision of electromechanical equipment installation of civil and industrial projects  Execute civil, industrial construction projects; technical infrastructure development; water and electricity projects  Architecture and relevant techincal consultancy  Repairement, maintainance and equipment installation  Wholesale of construction materials and other installation equipment in construction  Trade introduction and promotion  Im-export Capstone – Group - GEMBA E01 79 Intended charter capital: 500,000,000VND contributed by strategic shareholders 3.3.2.2.1 Depth research and investment on 3G The Telecommunication solution business unit should focus on 3G market Provide upgrading solutions to customers who use switchboards provided by NTC before so that customers can provide 3D service According to analysis of Mr Nataley, market analysist of Ovum Australia, in the first year (2010), 500,00 to 600,000 subscribers can be reached At the end of 2010, there will be about to million 3G subscribers or it will be equal to 10% of active subs This number is reachable because Vietnamese people like using new technology and because there are still high demand of Vietnamese people for broadband and high speed connection, especially in rural area 3G and mobile broadband always go together In order to activate 3G, terminal equipment plays very important role In the beginning, therefore, NTC should focus on providing terminal equipment to 3G service providers and only provide data service after 3G service is good (Source: VN Express) 3.3.2.2.2 Establish, extend dealers and distribution companies: After 2011, the economy will be completely recovered Investment for basic construction will develop very fast With great plan of turnover, market share, etc, the Company should establish distribution companies, dealers for equipment provision and installation Then, the mother company will focus only on R&D, solution development Once the market is extended, in order to develop prestige for competition, the Company should create its professionalism 3.3.2.2.3 Development of data services in Software Solution Business Unit Capstone – Group - GEMBA E01 80 Along with investment for software solution development, after stable 3G is established, the Company should have good software programs in order to provide value added service for 3G such as: ringing tune, game online, making friend, forum online, service of seeking for relatives, etc and other services 3.3.2.2.4 Contac center renting service 3.3.2.2.5 R&D and new business activity NTC director board realizes that, the only way for a behind company is the creation of something new, unique and even different to what has been existed to be able to sustain and maintain position in the market While some business activities are tending to be “saturated”, the director board should have a direction of new business activities in order to create its market and high profit 3.3.2.3Financial solutions Financial solution has great impact on all activities of the company Financial status of the company is reflected by some main indexes such as: liquidity, debt, operational index and profit index Financial research is conducted to evaluate strengths, weakness and then make development solutions which minimize risk NTC should implement quite well some following financial solutions: 3.3.2.3.1 Enhancing capital mobilization: It is needed to diversify capital mobilization methods in order to provide adequate financial resource for the Company activities To take back and mobilize capital, the Company should implement following solutions: First, Change type of the company from Limited company to Joint-stock company to be able to mobilize resources from investors and strategic partners Capstone – Group - GEMBA E01 81 Capital is one of important factor for maintain the company’s position in the market, especially in developing market After this change, the Company can mobilize capital from investors by two ways: issue shares for increasing capital and selling some shares held by the Company to the market Second, checking and taking over different parts of projects should be done in order to ask customers for payment and avoid long-term debt Third, maintain good relationship with Banks by paying debt in time in order to maintain prestige for the regular support of Banks Forth, closely cooperate with suppliers to be able to pay after delivery or after advanced payment of investors 3.3.2.3.2 Maximize profits through sectoral comparision and competitors such as: analysis of flexibility index, effectiveness of capital use, profitability, etc 3.3.2.3.3 Debt management, reduce lifetime of accounts receivalbe 3.3.2.4Human resource solutions 3.3.2.4.1 Recruitment staff for industrial construction design company and software solution business units, 3G Products of NTC are solutions Solutions are developed by men Therefore knowledge and intelligenc play important role in products provided by NTC Recuitment of skilled labours and make best use of staff capacity will derive from careful selection and recruitment of staff The human resource unit should select good engineers for value added creation during their work 3.3.2.4.2 Training for existing staff Capstone – Group - GEMBA E01 82 To be in the current position, NTC understands that each sucess of the Company is result of all continous effort of each idividual Therefore, NTC should pay attention to training, human resource development, create active working environment, good competition as well as pay attention to spiritual life of staff NTC should create a working environment where its staff can make best use of their capacity, show theirselves and work for long time for NTC 3.3.2.4.3 Enhancing staff in R&D unit for extending market For production enterprises, R&D is the work to create new products to meet demands of customers and provide to the market For trade enterprise, R&D is the market research, looking for partners, potential customers for extending market share In 2011, as by the economic forecast, fast develop will require more market reseach Therefore, the company should provide and enhance staff in R&D unit 3.3.2.4.4 Development of union/cooperation spirit in NTC Because business activities are related closely to each other, all staff in the Company should have a good cooperation, interaction and support each other In addition to its business operation, NTC should have some other team actitivies such as vacation, parties, etc These are good chances for the closed cooperation and understand each other better for the joint objectives of NTC 3.3.2.5 Other solutions: 3.3.2.5.1 Strengthen and widen cooperation with well-known partners in the world in technology In the past, NTC has mainly provided solutions of Siemens, Motorola, etc In the coming years, NTC should continue to cooperate with well-known Capstone – Group - GEMBA E01 83 suppliers in the world to use best products of suppliers in order to provide better solutions to customers Following are partners for closed cooperation in the period of 2010-2015: Table 3.4: List of well – known partners in the technology No Business activity Automatic building solution Suppliers Siemens, Moeller, Johnson Telecommunication solution Control, IDTECK, ProFace… Tandberg, Siemens ,ASC, Industrial automatic solution Keymile, Kenwood … Schneider Electric, Rockwell automation, +GE+, Asco Software solution Professional service Numatic… VI In, Infosys, COADE Inc Genesys, Avaya, Nortel, IBM… Note: 500 leading technology solution providers as by selection of theForbe magazine 3.3.2.5.2 Increased value added in all stages Pre sales – Sales – After sales Understanding important role of value added in products especially in IT products, NTC had made lots of efforts in developing an appropriate organization to its business activities Different units should support each other to provide comprehensive and effective solutions Sale support and services R&D Sale support and services Business Units Sale support and services Capstone – Group - GEMBA E01 84 Working in the spirit of cooperation, development and mutual benefit With independent account, common costs of supporting units will be allocated to business units This will encourage units to try their best in order to create value for their units Then value added chain in pre sales – sales – after sales will increase value of technology solutions provided by NTC 3.3.3 Business strategy implementation: Development of business strategy is crucial to the success of the Company Implementation of strategy basing on solution is also a factor which has impact on the success of the strategy The implementation should follow principle: strictly follow objective of strategy which is appropriate to external conditions and comprehensive implementation of strategy 3.3.3.1Marketing: 3.3.3.1.1 Product positioning As the above analysis, there has been no concrete market segment plan Therefore, there has been no specific marketing plan For the customerorientation strategy, we have developed a slogan of product positioning as follow: ”Is an excellent choice of successful enterprises NTC always provide outstanding technology solutions to the modern world Convenience of modern world will be by your side with the use of excellent solutions provided by NTC even when you not have depth understanding of technology Your success is our success” 3.3.3.1.2 Product strategy Capstone – Group - GEMBA E01 85 * Core benefit: Optimize customers’ activities * Major product: Automatic solutions for all operation process of customers * Expected product: Environmental-friendly solutions * Augmented product: Comprehensive solution for all sectors provided by the Company Customers can use only one administration solution for all activities * Potential product: Intelligent, active application software programs which best meet demands of customers 3.3.3.1.3 Price strategy In the past year, NTC applied cost leadership strategy and low price is one of advantage of the Company This is not a big issue of concern In the coming period, the Company should apply higher price for the investment in different solution as a competitive advantage of the company and create higher profit Capstone – Group - GEMBA E01 86 In comparison with direct competitors such as FPT and ITD which are similar technology solution providers, price of NTC is always lower 3.3.3.1.4 Promotion strategy Through market research, we realized that workshops, participation in exhibitions, TV shows, e-magazine and forums are best marketing channels for IT products To gain a well-known brand name, quality of services should be the first consideration so that each customer of NTC will be best future dealer by sharing experience in selecting solutions, selecting investment level of enterprises Proposed marketing methods include: - Participating in exhibitions of IT and automation to introduce the company’s products and find partners - Participating in workshops on telecommunication, building automation, software, etc held by suppliers Release comments in workshops and through that give introduction to customers about NTC - Holding workshops on introduction of technology sectors provided by NTC so that customers understand more about operational functions of and effectiveness that technology solutions can give - Advertisements in well-known forums of concerned customers such as thongtincongnghe.com, cuocsongso.com, digilife.vn, echip.com, etc - Developing special pages on introduction of the company and its technology solution in specialized magazines or some popular newspapers such as “Digital life”, “Information highway” - Develop newsletter and send to potential customers - Posting information of the Company in yellow pages for the easy access of concerned customers and this is a way to introduce the Company - Standardizing customer care service, developing information channel to evaluate feedbacks of customers on the Company’s products Capstone – Group - GEMBA E01 87 - Involving in charitable events for the community, for the environment, study encouragement fund, competitions related to IT such as Robocon, etc to make contribution to IT development in Vietnam in the future 3.3.3.1.5 Place strategy - Establish more dealers in big cities such as Da Nang, Ha Long, Nha Trang, Binh Duong, etc., where investments are focused on urban development and industrial zones - It is expected that NTC will transfer its solutions to its dealers or other companies NTC controls only brand name and implementation of solutions 3.3.3.2 Human resource development - Recruitment: Use well-known head hunters such as Ernst&Young, Vietnam Job, recruit staff through Vietnam News, website of the Company, provide scholarship to good students, etc to recruit good students fit with the Company’s vacancies In the coming time, IT engineers and architects should be recruited - Training: Sign contract on training, provide scholarship, contact with suppliers about arrangements for the Company’s staff to involve in their training course of knowledge improvement and new technology - Creation development: Hold examinations (with valued prizes) among internal groups, individuals to develop team work and develop creation of staff Topics of examination can be: INC knowledge, only one idea, 9X smart building, etc These topics can be improved to be participating in national and international champion Capstone – Group - GEMBA E01 88 - Salary: Develop an appropriate and fair salary system with monthly evaluation of leaders to ensure recover of labor and pay reasonably to contribution of staff - Commission: It is a crucial factor for a trade company with the purpose of encouraging staff to work actively Develop appropriate commission programs to different business stages/periods For example: accumulated commission: “more sale, higher commission”, high commission for difficult products, high commission for new products, etc - Evaluation, prizes: This is a method to encourage staff as well as to evaluate staff’s contribution An evaluation system is needed: evaluation by leaders, promotion among staff, etc., to develop appropriate prize options There can be quarterly, annual prizes for individuals or for groups For example: staff with highest turnover, best staff, potential staff, staff with special contribution, etc - Welfare: organize picnic, vacation for staff and these are chances for staff to know each other better Visit staff’s families in special cases Provide gift for children of staff on occasion of full moon festival, st June children’s festival, etc 3.3.3.3 Capital development - Develop good relationship with different banks for capital mobilization when necessary: Techcombank, MB, ABB, etc - Debt management unit in Accounting Division should be active to have best capital use - When there is big movement of exchange rate, converting method or immediate payment should reduce damages by movement of exchange rate Capstone – Group - GEMBA E01 89 - Appropriate capital allocation for marketing, welfare activities, commission, etc - Regular checking of accounting books - Leaders of the Company should have good understanding of accounting books - Develop an appropriate accounting system and accounting software with security CONCLUSION Current changing business environment is creating pressure on enterprises Also, business freedom creates favorable conditions for penetration of new enterprises and creates more fierce competition In that circumstance, it is required that enterprises should have their own business strategy and using their own capacity to create competition advantages Enterprises’ managers should have forecast of macro environment to make good decisions and gain opportunities which helps enterprises reach their objectives With knowledge of strategy management learnt, our group and leaders of NTC have considered seriously and develop a business strategy which fit with demands of market We hope that, results of our research and our recommendations will help leaders of the company have a comprehensive understand of advantages, disadvantages of existing business strategy and thus have solutions for enhancing competition advantages, decreasing risks in order to gain opportunites of potential IT market in Vietnam We believe that NTC will be Capstone – Group - GEMBA E01 90 successful with proposed business strategy and solutions NTC will complete its mission and make great contribution to the country’s development Due to limited time and information of global economic forecast and Vietnam’s economy, our capstone is also limited in providing solution for market risks Our business strategy might be not really comprehensive and appropriate We welcom comment and contributions from teachers and colleagues Thank you IV REFERENCES Vietnames sourse PGS.TS Lê Thế Giới – TS Nguyễn Thanh Liêm – ThS Trần Hữu Hải (2007), “Quản trị chiến lược”, Nhà xuất Thống kê, tr 265 – 312 In English sourse The Concept of Corporate Strategy, 2nd Edition (1980) Kenneth Andrews Dow-Jones Irwin "What is Strategy?" Michael Porter Harvard Business Review (NovDec 1996) Competitive Strategy (1986) Michael Porter Harvard Business School Press G Hamel (2000), Leading the Revolution, Boston: Harvard Business School Press, 71 De Kluyver C.A (2000) Strategic Thingking, Upper Saddle River, NJ: Prentice – Hall, Capstone – Group - GEMBA E01 91 S.F Slater & E.M Olsen (2000), Strategic type and performance: The influence of sales force managemrnt”, Strategic Management Journal, 21 Website - http://www.toquoc.gov.vn - http://www.ictnews.vn Capstone – Group - GEMBA E01 92 ... REFERENCES Vietnames sourse PGS.TS Lê Thế Giới – TS Nguyễn Thanh Liêm – ThS Trần Hữu Hải (2007), ? ?Quản trị chiến lược”, Nhà xuất Thống kê, tr 265 – 312 In English sourse The Concept of Corporate Strategy,... more effective allocation of resources Economic reform will lead to improved Capstone – Group - GEMBA E01 69 index of foreign investor’s confidence, FDI growth, improved technology and increases... in the period 2010-2015, we have developed following financial indicators: Capstone – Group - GEMBA E01 70 Table 3.1: Financial indicators in the 2010 – 2015 period No Indicator Turnover 2010