Group Assignment 1 Phu Nhuan Gem Joint Stock Company (Pnj).Pdf

+ From 23 - 30 years old 35% of the population: stable job, likes to explore, chooses reputable brands, always innovates, has high aesthetics + From 31-50 years old 35% of the population

FPT UNIVERSITY

INTERNATIONAL BUSINESS ***

GROUP ASSIGNMENT 1

Lecturers: La Thị Kim Khánh Class: IB17B02 Group: 2 Members: Chu Thị Thanh Tâm

Trần Đăng Khuê Ngô Phương Diễm Quỳnh Trần Thảo Vy

Trần Ngọc Nhi

INTRODUCTION 3

I ANALYISIS 3

1 Environmental Analysis 3

2 Five Forces model analysis 5

2.1 Competition in the industry 5

2.2 Potential of new entrants into the industry 5

2.3 Power of suppliers 5

2.4 Power of customers 6

2.6 Conclusion for five forces model: 6

3 Competitor Analysis 6

4 Capabilities Analysis 8

4.1 Value chain: 8

4.1.1 Support activities: 9

4.1.2 Primary activities: 9

4.2 Alignment: 10

4.2.1 Internal: 10

4.2.2 External: 10

4.3 Sustainability 11

4.3.1 Imitation 11

4.3.2 Durability 11

5 Strategy Map 11

6 SWOT Analysis 13

II SYNTHESIS OF FINDINGS & RECOMMENDATIONS FOR COMPANY STRATEGY 14

1 Synthesis of findings 14

2 Recommendations for company strategy: 15

2.1 Youth-Centric Marketing Strategies: 15

2.2 Technology Advancements and Employee Benefits: 15

CONCLUSION 15

REFERENCES 15

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PHU NHUAN GEM JOINT STOCK COMPANY (PNJ) was established in 1988 and has now developed into one of the most prestigious and popular jewelry brands in the country PNJ is a leading jewelry manufacturer and retailer, awarded No 1 Retailer in Asia Jewelry Industry - Retail of the Year 2019 by JNA The system spans the whole country with nearly

400 retail stores PNJ not only operates in the domestic market but also exports jewelry products to many other countries

Since 1988, PNJ has continuously driven innovation, creating jewelry collections with diverse materials and countless gemstones, including diamonds, rubies, sapphires, emeralds and semi-precious stones (colored stones) PNJ's jewelry products always represent a harmonious blend, artistically crafted by skilled jewelers to meet the diverse tastes of customers.The main product of this report analysis is jewelry

I ANALYISIS

1 Environmental Analysis

Political - Legal

- The domestic gold market also depends on the world gold market Currently, our country has to import almost 100% of the gold consumes

- Decision 03/2006/QD-NHNN dated January 18, 2006 allows businesses and commercial banks to trade gold on their accounts to promote international integration

- Regarding tax policy, Decision No 25/QD-BTC reduced the import tax on gold bars from 3% to 1% and the import tax on raw gold from 1% to 0.5%

- Current gold trading and trading activities in our country's market are almost completely spontaneous

- The State Bank of Vietnam established the Vietnam Gold Trading Center to narrow the activities of the free gold market

Economic

- GDP per capita in 2022 increases by 393 USD, equivalent to 4,110 USD

- Regarding GDP usage in 2022, final consumption increases by 7.18% compared to 2021, contributing 49.32% to the overall growth rate

- With a GDP growth rate of 8.02% in 2022, there will be an average impact on PNJ Recorded net revenue reaching 33,876 billion VND (up 73.3% compared

to 2021) and profit after tax reaching 1811 billion VND (up 76% compared to the same 2021)

- Domestic gold prices fluctuate in the opposite direction to world gold prices World gold prices fell as the US dollar increased in value after the US Federal Reserve (FED) increased interest rates to curb inflation (March 2023) Social - Urban people account for 29.6% of the country's population The density of

urban people is high, making it easy to distribute products The proportion of jewelry consumption in rural areas is not high due to the low standard of living

- In Vietnam, the demand for beauty jewelry can be divided by age: + From ages 18-22 (22.3% of the population): income is not stable, focus on

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+ From 23 - 30 years old (35% of the population): stable job, likes to explore, chooses reputable brands, always innovates, has high aesthetics

+ From 31-50 years old (35% of the population): have abundant savings, shop a lot, simple and sophisticated criteria, product quality and brand

+ From 50 years and older (12% of the population): preparing for retirement, less interested in luxury jewelry products

Technological

- All of PNJ's production machinery uses technology from Italy and Germany

- Upgrade retail and e-commerce store models, deploy digitalization of business activities with AWS to expand the system, and promote business on the cloud computing platform."

- PNJ uses Data Analytics, Computer vision, SAP to analyze and optimize inventory and goods on the move, meeting customer needs to provide a better experience

Environmental

- PNJ commits to complying with laws on environmental protection in all production and business activities

- PNJ implements and maintains greenhouse gas inventories with third parties, and develops a reduction roadmap through Energy Saving Initiatives

- Build an appropriate wastewater treatment system and post-treated water quality

(Table 1.1 - Environmental Analysis of PNJ)

2 Five Forces model analysis

2.1 Competition in the industry

In recent years, Vietnam's jewelry industry has achieved remarkable development, with an average annual growth rate of about 10%

Competitive factors in the jewelry industry

Industry growth: In recent years, Vietnam's jewelry industry has an average annual growth rate of about 10%

Product differentiation: Cause product competition, customers are often interested

in diverse designs

Conversion costs: Costs customers must bear if changing from one brand to another

Brand competitiveness: Brand is an important factor that helps jewelry businesses attract customers and build trust

The above factors contribute to increasing competition among businesses in the same industry

market share

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Trademark Strong brand Strong brand Strong brand

Distribution

network

The widest in the country

Large distribution network

Large distribution network

(Table 2.1.1 - Comparative analysis of 3 brands PNJ, DOJI, SJC)

These brands have their own strengths and weaknesses, creating fierce and high level of competition in the market To compete effectively, jewelry businesses need to focus on improving product quality, innovating designs and models, offering competitive prices and building strong brands

2.2 Potential of new entrants into the industry

Business activities Brand loyalty Government regulations

Capital requirement:

Involves high fixed

costs to enter the

industry

Raw Materials:

Precious metal and can

be expensive to

acquire

Labor and Skilled

Workforce to make

jewellery

Distribution and

Logistics,Marketing

and Branding,

Cannot surpass large companies such as PNJ, DOJI, SJC, which are dominating the market

Gold is considered as special goods so there are also many laws to follow when enterprises want to enter the industry

(Table 2.2.1 - Important factors act as key barriers to new entrants)

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industry level Therefore, famous brands still have many opportunities to dominate the market

and gain a lot of profit for themselves

2.3 Power of suppliers

Power of suppliers is considered high when suppliers can impact the jewelry industry in a number of elements

Suppliers may increase the

price of raw materials,

leading to an increase in the

price of jewelry products

Suppliers may supply poor quality raw materials, leading

to reduced quality of jewelry products

Jewelers may be under pressure from suppliers to reduce prices, leading to reduced profits

(Table 2.3.1 - A number of elements that suppliers can impact the jewelry industry) Along with that, there are a number of factors that affect the power of suppliers

(Table 2.3.2 - A number of factors that affect the power of suppliers)

The above factors are all factors that businesses can influence suppliers, which reduces the power of suppliers So the power of Suppliers in the industry is medium, when both brands and suppliers are under certain pressures

2.4 Power of customers

In the gold and gemstone jewelry industry, most customers are consumers with average income or higher Therefore, they are willing to pay switching costs for the products they are interested in As for price-sensitive consumers, they will tend to compare the price per ounce

of gold in jewelry to choose to buy In addition, customer power is also based on other factors such as satisfaction with quality and service, innovation of design

Considering the above factors, customers have relatively high power in this industry

To deal with the power of customers, jewelry companies can implement several strategies such as invest in R&D, invest in marketing and logistic, provide good customer service…

2.5 Threat of substitute products

The threat of substitutes is the possibility of substitute products meeting customer needs and reducing demand for a company's products or services Products that replace gold jewelry include silver jewelry, pearl jewelry, watches, technology accessories, luxury goods,

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Number of suppliers Uniformity Degree of Substitution

There are multiple

suppliers for a product

or service

Products or services are less uniform, companies will have more choices

There are many substitute products or services

instead of spending that amount of money just to buy that piece of jewelry, the customer can think of buying pearl or gemstones jewelry are more reasonably priced

However, in cases where grooming is needed, jewelry still becomes important to women, and no other accessory can replace it So the threat of substitute products is medium

2.6 Conclusion for five forces model:

Competition in

the industry

Potential of new

entrants

Power of suppliers

Power of customers

Threat of substitute products

3 Competitor Analysis

The Vietnamese jewelry industry has demonstrated exceptional recovery capabilities, rebounding vigorously from the challenges posed by the COVID-19 pandemic Projections indicate that this industry still has significant room for substantial growth, with an anticipated average annual growth rate of about 10% in the next decade

However, it's worth noting that this is a specialized and challenging sector to penetrate Therefore, the prominent players in this field can be counted on one's fingers, with PNJ being one of them Alongside PNJ, notable competitors include DOJI and SJC, along with numerous small-scale traditional shops that collectively hold a significant market share

60.00%

8.00%

8.80%

2.00%

21.20%

Market share of jewelry industry in VIetnam 2022

Local PNJ DOJI SJC Other

[Figure 3.1 - Market share of jewelry industry in Vietnam 2022.]

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formidable adversaries, with DOJI standing out as a prominent rival This has led to intense competition between these two major players in the Vietnamese jewelry market

DOJI

DOJI, originally known as TTD Trading and Technology Development Company, was founded on July 28, 1994, by Mr Do Minh Phu In 2007, the company underwent a significant transformation, officially rebranding itself as DOJI Gold Its decisive entry into the domestic jewelry market was marked by the inauguration of Ruby Plaza in Hanoi on June 30,

2007 Presently, DOJI Group operates with a model comprising 14 member companies, 4 capital-contributing affiliated companions, 61 branches, nearly 400 stores, and over 3000 employees across the nation

SJC

SJC, originally known as City Jewelry Company, was founded on September 17, 1988, under the authorization of the People's Committee of Ho Chi Minh City In June 2010, it underwent a name change and became Saigon Jewelry Company Limited Presently, SJC stands as the foremost enterprise in gold manufacturing and commerce within Vietnam, operating an extensive network of gold and gemstone outlets across the country

However, beyond the well-known names of PNJ and DOJI, a substantial presence of local, small-scale jewelry shops prevails These businesses, often family-owned, maintain strong community connections and possess an acute understanding of local market needs While they may not command the same level of brand recognition, their products' quality and services have garnered a sizable and devoted customer base

igure 3.2 - PNJ’s competitors ]

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4 Capabilities Analysis

4.1 Value chain

[Figure 4.1.1 PNJ Value chain analysis]

4.1.1 Support activities

PNJ owns the PNJ Jewelry Factory, investing 120 billion VND with a production capacity

of over 4 million products annually It's one of the region's largest jewelry factories at 3,500 m2, spanning six floors and 12,500 m2 In 2020, it stood among the top professionally managed facilities

Within PNJ, more than 1,000 skilled jewelers work, with a significant stake (70%) in the nationwide Jewelry Artisans group since 2014 The current Creative Director, Ms Vo Ngoc Thuy Anh, earned recognition as a top three style designer in 2017 by Elle magazine PNJ prides itself on being Vietnam's largest jewelry manufacturing factory, eight times the capacity of SJC and Doji combined It utilizes advanced European technology and a skilled workforce, including state-of-the-art Italian and German machinery

Furthermore, PNJ proactively sources materials, holding import licenses for tax-free gold from the State Bank of Vietnam, and directly acquiring gold from customers and domestic sources, ensuring diverse procurement channels

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4.1.2 Primary activities

In 2022, PNJ's inventory reached 10 trillion VND, out of a total asset of 13 trillion VND, largely due to the high cost of gold, their primary product PNJ's top-tier production line, recognized for excellence with the "Manufacturer of the Year'' award in 2020, combines advanced technology and precise manufacturing control With approximately 384 retail stores and plans for further expansion, PNJ maintains its pioneer status in Vietnam's jewelry industry, boasting over 30 years of experience and a stellar reputation Their diverse product range includes gold, diamond, pearl, silver, watches, and decorative pieces PNJ is becoming more actively targeting younger audiences through social media and platforms like TikTok The company prioritizes employee retention and customer satisfaction by offering competitive salaries, particularly for skilled artisans; comprehensive warranties, and exceptional post-sale services

4.2 Alignment

4.2.1 Internal

PNJ's well-managed supply chain ensures high-quality, uninterrupted production, with a relentless commitment to innovation and customer satisfaction Beyond maintaining production capacity, PNJ's major focus is investing in its creative team, the key driver of its profitability and competitiveness Boasting over 50 designers trained by fashion experts and jewelers from their own rigorous training system, PNJ stays at the forefront of trends They actively market on platforms like Facebook, TikTok, and Instagram to offer customers the latest in jewelry Furthermore, their direct distribution network via company-owned retail stores fosters strong customer relationships

4.2.2 External

PNJ has effectively maintained alignment between internal and external forces, bolstering their position in the market They have established a robust after-sales service via company-operated service centers, fostering strong brand loyalty among customers Their continuous investments in design and marketing drive nonstop innovation Over the years, PNJ has skillfully maintained its dominant market position and remains the largest jewelry company in Vietnam to this day

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