Luận văn thạc sĩ quản trị kinh doanh quốc tế MBA (2)

Business strategy formulation on Telecommunication service provision of EVNTelecom CAPSTONE PROJECT Topic: BUSINESS STRATEGY FORMULATION ON TELECOMMUNICATION SERVICE PROVISION OF EVN TELECOM COMPANY - ELECTRICITY OF VIETNAM FOR THE PERIOD FROM 2010 – 2015 Group No.1 Business strategy formulation on Telecommunication service provision of EVNTelecom LIST OF ABBREVIATIONS EVNTelecom: EVN Telecom Company 3G: the third generation ARPU: Average Revenue Per User BCC: Bilateral Corporation Contract BTA: Bilateral Trade Agreement BTS: Base Transceiver Station CDMA: Code Division Multiple Access GSM: Global System for Mobile Communication GTEL: Global Telecommunication Corporation FDI: Foreign Direct Investment ID: Identify HANOI TELECOM: Hanoi Telecom Corporation HCM: Hochiminh City MBA: Master of Business Management MPT: Ministry of Posts and Telecommunication MIC: Ministry of Information and Communication MVNO: Mobile Virtual Network Operator NGN: Next Generation Network PR: Public relation R&D: research and deploy SMP: Signified Market Power SMS: Short Message Service SOE: State-Owned Enterprise SPT: Saigon PostTel TECH: technology Group No.1 Business strategy formulation on Telecommunication service provision of EVNTelecom TV: Television VIETTEL Mobile: VIETTEL Mobile Corporation VMS: Vietnam Telecom Mobile Service Company VNP: Telecommunication Service Company VNPT: Vietnam Post and Telecom Corporation WAP: Wireless Application Protocol WTO: World Trade Organization Group No.1 Business strategy formulation on Telecommunication service provision of EVNTelecom LIST OF TABLES Table 2.1.1: Business operation results over the years Table 2.1.2: Number of CDMA subscribers from 2006 to 2008 Table 2.1.3: Results from the consulting, construction and 136 137 137 implementation activities – For the period 2006-2008 Table 2.1.4: Most recent years’ financial and operating results Table 2.2.1: Demographic Indicators, 2005-2030 Table 2.2.2: Rural/Urban Breakdown, 2005-2030 Table 2.2.3: Asia Telecoms Business Environments rankings Table 2.2.4: Key Players – Vietnam Telecoms Sector Table 2.4.1: A comprehensive evaluation of critical success factors 138 138 139 140 141 98 for a telecommunication company Table 3.2.1: EFE Matrix Table 3.2.2: EFE Matrix Table 3.2.3: Strategic matrix analysis Table 3.2.4: Quantitative Strategic Planning Matrix (QSPM) Table 3.5.1: The suggestion action plan for EVNTelecom 111 113 117 120 128 Group No.1 Business strategy formulation on Telecommunication service provision of EVNTelecom LIST OF FIGURES: Figure 1.1-1: The strategy formulation process .18 Figure 1.3-1: Competitive environment factors .22 Figure 1.3-2: PEST Model .23 Figure 1.3-3: Porter’s Forces’ model 26 Figure 1.4-1: Michael Porter’s Value Chain Model .29 Figure 1.4-2: IE Matrix 33 Figure 1.6-1: Basic business strategies 35 Figure 2.1-1: EVNTelecom Organizational Chart 41 Figure 2.1-2: Analysis Chart of the sales proportion in telecommunications services of EVNTelecom in 2008 44 Figure 2.2-1: Population 54 Figure 2.4-1: Vietnam mobile market share in 2008 (Subscribers) 100 Figure 2.4-2: Telecommunication 2008 revenues (in billion VND) .100 Figure 2.2-1: Competitive positioning for the Vietnamese Telecom market 116 Figure 2.4-1: Results of synchronyzing telecommnitcations payment with that of Electricity Bills 127 Group No.1 Business strategy formulation on Telecommunication service provision of EVNTelecom CONTENTS: LIST OF TABLES PREFACE .9 PREFACE THE NECESSITY OF RESEARCH TOPIC .10 OBJECTIVES, CONTRIBUTIONS AND EXPECTED RESULTS 13 SCOPE AND RESEARCH METHODOLOGY 13 MAIN CONTENTS OF THE MAJOR ASSIGNMENT .14 CHAPTER 1: THEORETICAL BACKGROUND ON BUSINESS STRATEGY 15 1.1 CONCEPTS, REQUIREMENTS AND CONTENTS OF STAGES INVOLVED IN A BUSINESS STRATEGY FORMULATION PROCESS .15 1.2 MISSION AND STRATEGIC OBJECTIVES OF THE BUSINESS 21 1.3 EXTERNAL ENVIRONMENT ANALYSIS 22 1.3.1 Macro environment analysis (Pest) 23 1.3.2 Vietnamese Telecommunication Industry Analysis using Michael Porter's forces model 26 1.4 INTERNAL ENVIRONMENT ANALYSIS .29 1.5 SWOT ANALYSIS 33 1.6 BASIC BUSINESS STRATEGIES .35 1.7 QUANTITATIVE STRATEGIC PLANNING MATRIX - QSPM 37 CHAPTER 2: BUSINESS COMPETITIVE ANALYSIS ON THE TELECOMMUNICATION SERVICES AT EVN TELECOM COMPANY - EVN CORPORATION (EVNTelecom) 39 2.1 EVNTELECOM – AN OVERVIEW INTRODUCTION 39 2.1.1 Organizational structure .40 2.1.2 Areas of business 42 2.1.3 Available services 42 2.1.4 Evaluation of EVNTelecom’s operating results in recent years 43 2.2 EXTERNAL ENVIRONMENT ANALYSIS 45 2.2.1 Macro environment analysis for EVNTelecom (Pest) 45 2.2.1.1 Political and Regulatory Environment 45 2.2.1.2 Economic Environment 51 2.2.1.3 Business Environment 52 2.2.1.4 Culture-social Environment 54 2.2.1.5 Technological Environment 55 2.2.1.6 Global business environment 56 2.2.2 Telecommunication Industry Analysis (Porter's forces model) 59 Group No.1 Business strategy formulation on Telecommunication service provision of EVNTelecom 2.2.2.1 Threats from new entrants 59 2.2.2.2 Threats from substitute products 60 2.2.2.3 Supplier’s bargaining power 61 2.2.2.4 Buyer’s bargaining power .61 2.2.2.5 Existing rivalry within the industry 62 2.2.2.6 Overall industry analysis conclusion: 62 2.2.3 Competition Analysis 63 2.2.3.1 Vietnam Posts &Telecommunications (VNPT) 63 2.2.3.2 Viettel 70 2.2.3.3 Vinaphone .74 2.2.3.4 Mobiphone 76 2.2.3.5 S-Fone (S-Telecom) 80 2.2.3.6 VietnamMobile .83 2.2.3.7 FPT Telecom 85 2.3 EVNTelecom INTERNAL ENVIRONMENT ANALYSIS 87 2.3.1 Resources .87 2.3.1.1 Tangible resources 87 2.3.1.2 Intangible resources 90 2.3.2 Network capability – core capability 90 2.3.3 Joint-venture 93 2.3.4 Core competency building 93 2.3.5 The Value chain 94 2.4 INTEGRATED ANALYSIS AND POSITIONING OF COMPETITORS IN THE VIETNAMESE TELECOMMUNICATIONS MARKET .97 2.4.1 A comprehensive overview of the critical success factors of the participants in the Vietnamese telecommunication market 97 2.4.2 Market share .100 2.4.3 Revenue 100 2.4.4 Evaluation EVNTelecom position on the current telecommunications market 101 2.5 EVNTelecom SWOT ANALYSIS .101 2.5.1 Strengths .101 2.5.2 Weaknesses 102 2.5.3 Opportunities 103 2.5.4 Threats 104 2.6 EVALUATION OF THE CURRENT BUSINESS STRATEGY 105 2.6.1 Achievements: 105 2.6.2 Outstanding challenges: .105 2.6.3 Rationale: 106 Group No.1 Business strategy formulation on Telecommunication service provision of EVNTelecom CHAPTER 3: TELECOMMUNICATION BUSINESS STRATEGY FORMULATION FOR THE 2010-2015 PERIOD 108 3.1 VISION, MISSION AND STRATEGIC OBJECTIVES OF EVNTelecom 108 3.1.1 Vision 108 3.1.2 Mission .109 3.1.3 Strategic objectives 109 3.1.4 EVNTelecom Brand value 110 3.2 BUSINESS STRATEGY CHOICE ANALSYS 110 3.2.1 External environmental factors influencing EVNTelecom (EFE Matrix) 111 3.2.2 Internal environment factors influencing EVNTelecom (IFE matrix) .113 3.2.3 Competitive positioning for the Vietnamese Telecom market – IE Matrix 116 3.2.4 Strategy analyzing, strategy formulation and select the optimal strategy 116 3.2.4.1 Strategic analysis 117 3.2.4.2 Strategy formulation 120 3.2.4.3 Quantitative Strategic Planning Matrix (QSPM) and select the optimal strategy 120 3.3 TARGET MARKET SELECTION ANALYSIS AND STRATEGIC PRODUCTS 125 3.3.1 Market segmentation and telecommunication needs for each segment .125 3.3.2 Target market and core product selection 126 3.4 SOME STRATEGY IMPLEMENTATION SOLUTIONS 127 3.4.1 Converting CDMA Technology into GSM through 3G Technology adoption 127 3.4.2 Synchronizing telecommunications payment with that of Electricity bills 127 3.4.3 Segregation of Telecommunication sale forces relatively independent from electricity sale forces 128 3.4.4 Implementation of brand stratification plan .128 3.5 IMPLEMENTATION AND EXECUTION OF STRATEGY 128 3.6 OTHER RECOMMENDATIONS .130 3.6.1 Regarding to macro policies .131 3.6.2 Regarding the business operations of EVNTelecom 131 3.7 CONCLUSION 133 REFERENCES 135 APPENDIXES 136 Group No.1 Business strategy formulation on Telecommunication service provision of EVNTelecom PREFACE PREFACE For fulfilling the requirements under and capstone project completing Master Of Business Administration program, we submit this final capstone project to Griggs University In the first words of the Capstone Project, we would like to express our thankfulness to the great many people We would like to thank all professors of Griggs University, who gave us very useful lectures during past two years For all the support in researching period, we want to express our heartily thanks to our friends in EVNTelecom, our classmates and program co-ordinators who gave us good condition and useful information that made me be easier in researching Group No.1  RESEARCH METHODOLOGY To solve our research issues quoted in the graduation thesis, we adopt a dual approach that combines both quantitative and qualitative analysis, with an emphasis on qualitative discussions - Quantitative study: Applied to areas that calls for numeric illustrations or the calculation of evaluation criteria - Qualitative study: This is the approach that aims at describing and scrutinizing the issues embedded in our research hypothesis in light of the research group’s viewpoints This methodology is very important to the substance of our thesis because it contains unique contributions from the group that could be overlooked by other studies With regards to our evidence collection, the preliminary information is collected through the usage of questionnaires and interviews The other secondary information such as MBA curriculum, newspapers, research journals, internet, statistical data… are collected from well-established studies nationwide, the telecommunication industry, prior researches and other publications by EVNTelecom The collected materials are chosen, evaluated and classified base on the distinct purposes reflected in the sub headings of this thesis THE NECESSITY OF RESEARCH TOPIC In the trend of global economic convergence, Vietnam is gaining importance on an international scale The economy enjoys consistently strong growth rates over the years, and the changes are being recognized by foreign business partners One of the key contributing forces of such success is the Vietnamese Telecommunications sector The industry has undergone considerable changes, leading people to a new Business strategy formulation on Telecommunication service provision of EVNTelecom REFERENCES Documentations: - Prof., Ma Le The Gioi, Ma Nguyen Thanh Liem, Ma Tran Huu Hai – - Strategic Management- Statistics Publisher 2007 Michael E Porter - Competitive Strategy- Youth Publisher Q2/2009; “Effective Business Strategy”; Author: Harvard University, Ho Chi Minh - General Publishing House; EVNTelecom’s Financial Reports of 2006;2007; and 2008; Report of preliminary investigation results of the population and housing - Census on April 1, 2009; BUSINESS MONITOR INTERNATIONAL: BMI Vietnam Telecommunications Report Q3 2009 Websites: - http://www.vfej.vn/en/detail/18806/nearly_50_million_mobile_subscriptions - _are dead _ http://jobfunctions.bnet.com/abstract.aspx?docid=81225 ( What is Strategy? Source: Harvard Business Review) - http://vnexpress.net/GL/Kinh-doanh/2009/11/3BA15B4F/ - http://vzone.vn/ - http://didongcdma.vn/forum - http://beta.xhtt.vn/ - http://www.vfej.vn/en/detail/18806/nearly_50_million_mobile_subscriptions _are dead _ - http://xahoithongtin.com.vn/20090519123232191p278c285/chat-luong-adslkhong-bao-gio-la-cau-chuyen-cu.htm APPENDIXES Appendix table 2.1.1: REVENUE REPORT IN RECENT YEARS Unit: billion VND 127 Group No.1 Business strategy formulation on Telecommunication service provision of EVNTelecom Factors I IT and Communications Telecommunication inside power industry Public communications 2.1 Lease channel service 2.2 E – Tel Phone service 2.3 CDMA service - E – Com phone service - E – phone service - E – mobile service 2.4 National and International Voice IP services 2.5 Internet access and connection 2.8 Other communications services Information technology services II Other products III Other services IV Business of terminal units VI Financial activities VII Other activities Total First half of 2009 1,248 19 1,228 171 716 514 106 96 118 56 162 (0) 2 44 1 1,297 2008 3,559 31 3,528 373 13 1,981 1,537 183 262 321 97 742 220 12 112 3,911 2007 2,403 29 2,375 244 14 1,739 1,324 180 235 302 76 13 1,724 11 12 4,164 Source: EVN Telecom financial report 128 Group No.1 Business strategy formulation on Telecommunication service provision of EVNTelecom Appendix table 2.1.2: NUMBER OF CDMA SUBSCRIBER FROM 2006 TO 2008 Unit: Subscriber No Name of CDMA 2006 2007 2008 Expansion Progression Expansion Progression 35.493 73.517 E-Mobile 7.040 7.040 419.076 426.116 E-Mobile 122 122 1.113 1.235 58.590 64.232 96.514 160.746 7.270 7.270 117.234 124.504 535.273 545.835 108 108 16.201 16.309 646.427 662.631 1.744.431 2.407.062 Post-paid E-Mobile Pre-paid Progression 38.024 Expansion 38.024 services (Basic) Pre-paid (Daily) Post-paid E-Phone Pre-paid 5.642 5.642 E-Phone (Daily) Post-paid E-Com Pre-paid 10.562 10.562 E-Com 1.058.800 1.604.635 (Daily) Total 16.204 16.204 Source: EVN Telecom planning department Appendix table 2.1.3: Result of consulting, designing and constructing business From 2006 to 2008 Unit: million/subscriber No Services Construction and installation Consulting and designing Total 2006 11.182 961 12.143 2007 6.017 1.342 7.359 2008 8.536 1.669 10.205 Source: EVNTelecom financial report Appendix table 2.1.4: Business result of the last years Unit: billion VND Descriptions Sales and services provision Code 129 2006 1,133.85 2007 4,141.21 2008 3,787.65 Group No.1 Business strategy formulation on Telecommunication service provision of EVNTelecom Deducted amounts from revenue 0.88 15.56 Net income from sales and services provision 10 1,132.98 4,125.66 Cost of goods sold 11 828.57 3,009.91 Gross profit from sales and services provision 20 304.41 1,115.74 Revenue from financial activities 21 3.18 10.95 Financial expenses 22 54.43 201.72 Selling expenses 24 190.86 811.20 Management costs 25 54.82 91.46 10 Net profit from business activities 30 7.48 22.32 11 Other income 31 0.37 12.10 12 Other expenses 32 0.01 2.92 13 Other profit (40 = 31 - 32) 40 0.36 9.19 14 Total pre-tax accounting profit (50 = 30+40) 50 7.84 31.51 15 Profit (loss) in joint-ventures 51 16 Current business income tax 52 2.91 11.17 17 Deferred business income tax 53 (0.92) (1.88) 18 Net profit after tax 60 5.84 22.23 Source: EVNTelecom’s Financial reports of 2006, 2007, and 2008 81.99 3,705.66 2,061.71 1,643.95 11.74 350.92 1,143.78 124.37 36.63 111.64 54.37 57.27 93.90 36.56 57.34 Appendix table 2.2.1: Demographic Indicators, 2009-2030 Vietnam population on 01 April 2009 Number Rate Total population 85,789,573 100.00% By gender Male 42,465,839 49.50% Female 43,323,734 50.50% By region Red River Delta 19,577,944 22.82% North-central and central coastal 18,835,485 21.96% Cuu Long River Delta 17,178,871 20.02% Highlands 5,107,437 5.95% Source: Report on preliminary investigation results of the Census on April, 2009 for population and housing of the Vietnam General Housing and Population Census Appendix table 2.2.2: Rural/Urban Breakdown, 2009-2030 2009 29.6 70.4 25,374 60,415 85,789 Urban population, % of total Rural population, % of total Urban population, total, ‘000 Rural population, total, ‘000 Total population, '000 2020f 34.7 65.3 35,230 66,426 101,656 2030f 41.8 58.2 46,123 64,306 110,429 f = forecast Source: UN Population Division 130 Group No.1 Business strategy formulation on Telecommunication service provision of EVNTelecom Table 2.2.3: Asia Telecoms Business Environments rankings 131 Group No.1 Business strategy formulation on Telecommunication service provision of EVNTelecom Source: BMI: Vietnam Telecommunications Report Q3 2009 Appendix table 2.2.4: Key Players – Vietnam Telecoms Sector Company name Ownership 132 Market Group No.1 Business strategy formulation on Telecommunication service provision of EVNTelecom Vietnam Posts and Government (100%) Local, long-distance and Telecommunications international telephony, data, (VNPT) VinaPhone MobiFone Viettel S-Fone internet Mobile Mobile Mobile, local telephony Mobile Vietnam Telecom Services (100%) Vietnam Telecom Services (100%) Ministry of Defense Joint Venture: Saigon Postel and SLD (consortium comprising SK Telecom, LG Electronics and Dong Ah Elecomm) Electricity of Vietnam Local, long-distance and (EVNTelecom) Electricity of Vietnam (100%) international telephony, data, VietnamMobile Joint Venture: Hanoi Telecom, internet and mobile Mobile Hutchison Telecommunications International (HTIL) 133 Group No.1 ... Foreign Direct Investment ID: Identify HANOI TELECOM: Hanoi Telecom Corporation HCM: Hochiminh City MBA: Master of Business Management MPT: Ministry of Posts and Telecommunication MIC: Ministry of... collected through the usage of questionnaires and interviews The other secondary information such as MBA curriculum, newspapers, research journals, internet, statistical data… are collected from well-established... Opportunities T - Threats S-O: Leverage strengths S-T: Using the to catch the opportunities, strengths to combat S - Strengths and to orient the business threats Internal W-O: Environment W Weaknesses - weaknesses