Microsoft Word Thesis (ban chinh sua theo comment hoi dong) docx UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Vo Thi My INEFFICIENT SALES PLAN AT AMANN VIETNAM CO , LTD MA[.]
UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Vo Thi My INEFFICIENT SALES PLAN AT AMANN VIETNAM CO., LTD MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: DR NGUYEN PHONG NGUYEN Ho Chi Minh City – Year 2019 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENTS Executive Summary PART 1: COMPANY BACKGROUND Company introduction 1.1 Overview about Amann Group and Amann Vietnam Co., Ltd 1.1.1 Overview about Amann Group 1.1.2 Overview about Amann Vietnam Co., Ltd 1.2 Industry overview Symptoms 2.1 Negative profit 2.2 Decrease in gross profit margin 2.3 Increase in COGS 14 The initial cause-effect map 14 Updated cause-effect map 20 4.1 Expanding local business by import goods 20 4.2 Recruitment process is not good 21 4.3 Ineffective system management 21 4.4 Inefficient sales plan 23 A discussion to eliminate some potential central problems and focus on a central problem of interest 26 5.1 A discussion to eliminate some potential central problems 26 5.1.1 Expanding local business by import goods 26 5.1.2 Recruitment process is not good 26 5.1.3 Ineffective system management 28 5.2 A discussion to focus on a central problem 28 PART – PROBLEM JUSTIFICATION 30 Problem definition 30 1.1 Definition of “inefficient sales plan” 30 1.2 Measurement to measure the degree of the problem in the organization 31 Problem existence 32 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Problem importance 33 PART - CAUSES VALIDATION AND SOLUTIONS 34 List of real causes 34 1.1 The initial list of causes of the central problem using the literature 34 1.2 List of the new caused obtained from the company (via interviews) 34 1.3 A full list of real causes of the central problem 34 1.4 The relative importance of the real causes 35 1.4.1 Lack of market orientation 35 1.4.2 Lack of middle thread sizes 36 1.4.3 Applying price centralized decision-making structure 37 1.4.4 No factory in Vietnam 38 The set of solutions 38 Action plans 45 References 48 Appendices 52 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com List of Tables Table 1: Export Turnover of Vietnam by Commodity Group in 2016 Table 2: Gross profit margin of AVN in 2017 and 2018 Table 3: Gross profit margin of AVN by month 2018 11 Table 4: Gross profit margin of AVN by product type in 2018 12 Table 5: Gross profit margin of AVN by customer in 2018 13 Table 6: Amann available thread sizes 17 Table 7: Overtime payment for employee in 2018 22 Table 8: Average selling price of AVN from 2016 to 2018 25 Table 9: GKA forecast of AVN from 2020 to 2024 30 Table 10: Competitor list of Amann Vietnam 32 Table 11: Estimated costs for organizing meetings among top managers and junior managers 42 Table 12: Estimated costs for proposal of price decentralized decision making structure 44 List of Figures Figure 1: Sales turnover of AVN from 2015 - 2018 Figure 2: 5-year sales plan 2018-2022 of Amann Vietnam Figure 3: Vietnam export structure of goods in 2016 Figure 4: Segmentation and value proposition Figure 5: Income statement of AVN in financial year 2018 Figure 6: Gross profit margin of AVN in 2017 and 2018 10 Figure 7: Gross profit margin of AVN phasing by month 2018 10 Figure 8: Key garment types of Vietnam Textile & Garment export 2017 29 Figure 9: Sales-Operation-Planning Framework 33 Figure 10: Antecedents and consequences of a market orientation 39 Figure 11: Senior management factors and market orientation 40 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com List of Diagrams Diagram 1: Organizational structure of AVN in 2019 Diagram 2: The initial cause - effect map of Amann Vietnam 19 Diagram 3: Planning outputs by Henry et al 23 Diagram 4: The update cause - effect map 26 Diagram 5: The final cause - effect map 38 List of Pictures Picture 1: Amann headquarter in Bönnigheim Picture 2: Amann Vietnam Sales office in Hochiminh City Picture 3: Amann Vietnam factory LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com List of Abbreviation AVN: Amann Vietnam B2B: Business-to-Business BOM: Board of Management CAGR: Compounded Annual Growth Rate CEO: Chief Executive Officer CFO: Chief Financial Officer COO: Chief Operating Officer COGS: Cost of Goods Sold CS: Customer Service FOB/OEM: Original Equipment Manufacturer GKA: Global Key Account GKAM: Global Key Account Management GPM: Gross Profit Margin HR: Human Resources JIT: Just-In-Time OT: Overtime RFC: Revenue Forecast S&OP: Sales and Operations Planning SAP: System Application Products SMEs: Small Medium Enterprises SOP: Standard Operation Process TAS: Technical Advisory Service LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com EXECUTIVE SUMMARY For manufacturing enterprise, sales plan is very important because it provides operation team with the demand forecast for production, HR department headcount budget, financial department cash flow, etc The thesis indicates the central problem of Amann Vietnam based on analyzing income statement of financial report 2018 and collected data from interviews of all sales members and related departments There are relevant symptoms including increase in COGS, decrease in profit margin and negative profit The central problem is inefficient sales plan that comes from two main causes including lack of market orientation and applying price centralized decision-making structure Two sets of solution are suggested in the thesis, they are: • Narrow the gap between what top managers say and what they • Propose price decentralized decision-making structure Total cost of solutions is estimated at USD16,500 which can brings benefits in terms of both qualitative and quantitative perspective as followings: Ø Qualitative - Enhance communication among chief executives, junior managers and staff - Erase ambiguity of junior managers and other departments in business strategy of the organization - Adapt quickly to the changes at local market - Shorten price approval process to increase service level to customers - Increase work efficiency of sales people - Improve profit margin and profitability - Enhance the competitiveness in local market Ø Quantitative - Improve gross profit margin from 26% to 30% in 2020 - Increase the number of customers from 150 to 200 in 2020 and to 300 in 2023 - Achieve CAGR at 38.5% for the period of 2019 and 2024 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com PART 1: COMPANY BACKGROUND Company Introduction 1.1 Overview about Amann Group and Amann Vietnam Co., Ltd 1.1.1 Overview about Amann Group Amann Group, which was founded by Alois Amann and Immanuel Böhringer in 1854 in Bönnigheim, Germany, is one of the global leaders in the manufacturing and distribution of sewing and embroidery threads for a wide range of industries from clothing and underwear sectors, shoes and leather goods, home textiles and technical applications The Group has been present in more than 100 countries worldwide with over 2,300 employees Its production facilities are located in Europe and Asia, which ensures the basis for maximum flexibility and customer proximity Picture 1: Amann headquarter in Bönnigheim 1.1.2 Overview about Amann Vietnam Co., Ltd Amann Vietnam Representative Office was established in June 2011 and has operated as a trading company since August 2012 Its sales office now is located at LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 1st Floor, Aloha Building, 68 Hong Ha Street, Ward 12, Tan Binh District, Hochiminh City Picture 2: Amann Vietnam Sales office in Hochiminh City Amann Group organized a groundbreaking ceremony for its Vietnam factory covering 45,000 square meters at Tam Thang Industrial Park (Quang Nam) on July 27, 2018 The facility will produce sewing threads for garment, leather and footwear industry with a total annual capacity of 2,300 tons in 2023 Its investment capital for phase one is US$13.8 million and this phase will go into operation in June 2019 with a capacity of 1,000 tons per year Phase two will be in line from 2023 with additional capital of US$6.2 million, raising the total invested capital to US$ 20million The factory in Vietnam will produce high-quality sewing threads in accordance with European standards, which also apply for all other production facilities of Amann worldwide Therefore, Amann’s customers can trust consistent product quality anywhere in the world Amann Vietnam (AVN)’s major customers are famous brands such as Adidas, Puma, Nike, Hugo Boss, Prada, Coach, etc LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Picture 3: Amann Vietnam factory Organizational structure of Amann Vietnam AVN is under the progress of setting up new factory in Tam Thang, Quang Nam Its current Hochiminh office will operate as sales office right after factory construction complementation To build up human resources for AVN when the company is able to produce its products locally, it has recruited new sales team members who have enough qualifications and great experiences in thread manufacturing industry Amann Vietnam (Hochiminh office) currently has departments: sales & marketing department (including Global Key Account Team, Industrial Sales Team, Technical Advisory Services Team, Customer Services Team), HR department, Finance and Accounting, Production Department, and Project Department LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ... forecast for production, HR department headcount budget, financial department cash flow, etc The thesis indicates the central problem of Amann Vietnam based on analyzing income statement of financial... applying price centralized decision-making structure Two sets of solution are suggested in the thesis, they are: • Narrow the gap between what top managers say and what they • Propose price decentralized