building international marketing plan bringing ikea to vietnam market

The IKEA enterprise considers the geographicaladvantages of the market it will enter - Vietnam, as well as economic, legal,technological, and material supply factors, especially about wo

THE FINANCIAL

UNIVERSITY OF FINANCE – MARKETING

FINAL EXAM

INTERNATIONAL MARKETINGBUILDING

INTERNATIONAL MARKETING PLANBRINGING IKEA TO VIETNAM MARKET

Class:International MarketingClass code Section: 2221702031210

HO CHI MINH CITY – 2021

TABLE OF CONTENTS

EXECUTIVE SUMMARY 1

PART 1: IKEA OVERVIEW 2

1.1 COMPANY’S MISSION STATEMENT 2

1.2 PROFILE 2

PART 2: VIETNAM COUNTRY 3

2.1 COUNTRY’S RELEVANT HISTORICAL DEVELOPMENTS 3

2.1.1 Vietnam’s relevant historical developments 3

2.1.2.The evolution of furniture 4

2.2 THE NATIONAL BUSINESS ENVIRONMENT 5

2.7.1 Describe the target segment in Vietnam 21

2.7.2 How Ikea's strategies in Vietnam differ from Europe's 24

LIST OF PICTURE

Picture 1.1: IKEA Home furnishings 2

Picture 2.1: Age’s distribution in Vietnam 6

Picture 2.3: The GDP distribution across economic sectors of Vietnam 14

Picture 2.5: The impact of packaging on the supply chain 27

Picture 2.6: Psychological pricing 29

Picture 2.7: Gifted IKEA’s bag on opening day 31

LIST OF TABLE

Table 2.1: Information about major cities in Vietnam (2019) 11

Table 2.2: Gross domestic product in Vietnam 12

Table 2.3: The State Bank of Vietnam quoted the central rate of VND versus USD on 08/31/2022 13

Table 2.4: IKEA's customer target segments 21

Table 2.5: The differences of IKEA’ strategies between Vietnam and Europe 24

Table 2.6: Element of Creative Brief 30

Table 3.1: Measurement and Control of IKEA’s marketing plan 35

EXECUTIVE SUMMARY

IKEA is the world's largest international retailer of furniture, assemblies, appliancesand accessories IKEA was born in 1943 in Sweden with his father, Ingvar Kamprad,a businessman who started his business at the age of 17 Through many stages ofdevelopment, until today IKEA has quickly dominated the world with 458 stores in60 countries across continents Currently, our student group is developing a newmarketing strategy with the desire to bring IKEA products to Vietnam, morespecifically, to build an IKEA retail store in District 2 in Ho Chi Minh City.Combined with the 4Ps marketing mix, our team has new directions to market thecompany's products in Vietnam The IKEA enterprise considers the geographicaladvantages of the market it will enter - Vietnam, as well as economic, legal,technological, and material supply factors, especially about wood - a primary rawmaterial that IKEA needs in its production process The team came up with amarketing strategy to implement in the first 2 years of operation Using theknowledge gained in the International Marketing course as well as their ownexperience, the team develops innovative strategies The research team hopes thatthese strategies and research will be useful, creative and practical for IKEA business,allowing the brand to successfully penetrate and develop in the Vietnamese market.

PART 1: IKEA OVERVIEW 1.1 COMPANY’S MISSION STATEMENT

IKEA's mission is: To create a better everyday life for the many people To do

that, IKEA provides customers with a wide range of useful, beautifully designedfurniture products at affordable prices.

1.2 PROFILE

Picture 1.1: IKEA Home furnishings

IKEA is an international company specializing in the design of semi-assembledfurniture, home appliances and accessories, it is the largest furniture retailer in theworld IKEA was founded in 1943 by a 17-year-old Swedish man named IngvarKamprad IKEA has quickly become a global leader with 392 stores in 48 countries,scattered across all continents.

IKEA products are designed in a simple way, in line with the spirit of the world's No.1 furniture company: Design for everyone IKEA has both high-end products but stillfocuses on designs that can reach all consumers, whether people with middle incomeor rich can choose to buy their favorite items at the store IKEA products Ikeadesigned each interior part separately and provided instructions for customers toassemble and complete the item in the simplest and fastest way However, dependingon the needs of customers who need help, Ikea company will also offer installationservice packages to help customers save time and effort.

PART 2: VIETNAM COUNTRY

2.1 COUNTRY’S RELEVANT HISTORICAL DEVELOPMENTS 2.1.1 Vietnam’s relevant historical developments

Scale of the economy is growing rapidly

During the past 35 years, Vietnam's economy has achieved an impressive growth rate.People's living standards both materially and spiritually improved markedly, in 1985the average income per capita was only 159 USD/year, by 2020 it will reach about2,750 USD/year.

In 2020, in the context of the Covid-19 pandemic, Vietnam remains a reliabledestination for investors with a total FDI capital of 28.5 billion USD.

With impressive import and export turnover, Vietnam ranked 22nd in the world interms of turnover and export capacity, 26th in terms of international trade.

Develop in harmony with socio-cultural development

Vietnam's poverty reduction has made impressive achievements The poverty ratenationwide has decreased from 58% in 1993 to 22% in 2005; 9.45% in 2010, 7% in2015 and less than 3% in 2020 (according to the multidimensional poverty line).The position of Vietnamese universities has been raised in the Asia and worldrankings, in 2019 ranked 68 out of 196 countries in the world, up 12 places comparedto 2018 For the first time, Vietnam There are 4 higher education institutions in thetop 1,000 best universities in the world.

Deep international integration, increasingly enhanced position

Vietnam has established many strategic economic partnerships; actively build theASEAN Community in 2015 and complete the domestic market more fully accordingto WTO commitments Up to now, 71 countries have recognized Vietnam's economyas a market economy, including Vietnam's major trading partners.

Since joining the WTO up to now, Vietnam has signed 15 regional and bilateral FTAsand is negotiating two FTAs with other partners The FTAs that Vietnam participatesin cover most of the continents with nearly 60 economies with a total GDPaccounting for nearly 90% of the world's GDP, including 15 G20 members and 9 outof 10 economic partners - Vietnam's largest trade belongs to the three largesteconomic centers in the world, namely North America, Western Europe and EastAsia Therefore, the participation and implementation of FTAswill bring greatopportunities for Vietnam, positively impact economic development, improvenational competitiveness, businesses and products

Vietnam is also an active, active and responsible member of internationalorganizations Vietnam has participated in the Association of Southeast Asian Nations

(ASEAN), the Asia-Pacific Economic Cooperation (APEC), and the United Nations'organizations, making active and ongoing contributions becoming a country with anincreasing position and role in the region, respected by the international community.In addition, Vietnam has been trusted to be elected to important UN bodies, such asthe Human Rights Council for the 2014-2016 term, the UNESCO World HeritageCommittee for the 2013-2017 term, and the Council for the 2013-2017 term UnitedNations (ECOSOC) for the 2016-2018 term.

2.1.2.The evolution of furniture

According to statistics of the Vietnam Chamber of Commerce and Industry (VCCI),the average annual consumption of high-end furniture in the country reaches morethan 2.5 billion USD In which, 80% are interior products imported from Europeancountries, 20% are products of Vietnam Along with the average economic growthrate of more than 6%/year, the consumption in the field of interior design ofVietnamese people in the coming time is estimated to increase even more Therefore,European businesses coming to Vietnam this time also come from the assessment thatthe interior design market in Vietnam is very potential.

In the past 10 years, the growth rate of Vietnam's wood processing industry is amongthe most dynamic in the world; become the 7th largest wood and furniture producer,the 2nd largest exporter in the world.

Vietnam's wood and furniture processing industry has had a remarkable growth in thepast 10 years, but in the process of development, it also revealed many limitationssuch as the ability to control raw materials, the quality of machinery and equipment ,labor productivity need to be overcome soon to ensure sustainable development.Domestically, wood exports are also in the group of 10 items with the largest exportturnover, the trade surplus ranks third among items, creating jobs for more than half amillion workers.

Currently, Vietnam also has large artificial wood factories of foreign corporationssuch as Sumitomo (Japan) in Long An or a joint venture between Vietnam RubberIndustry Group and Dongwha Group (Korea) in Binh Dinh Phuoc.

Vietnam's wooden furniture export turnover in 2018 reached 9.3 billion USD rankedsecond in Asia and fifth in the world The domestic wood processing market isextremely vibrant with the presence of nearly 4,500 enterprises Bringing jobs tonearly half a million workers Also according to EVBN's analysis Currently,Vietnam's furniture market is mainly focused on export and leaving the home fieldopen Much of the domestic market is a playground for imported goods originatedmainly from China, Malaysia, Thailand.

According to information from the Handicraft and Woodworking Association of HoChi Minh City (Hawa) In 2018, the total value of furniture consumption of the

Vietnamese market reached about 4 billion USD And according to the statistics ofthe Italian Trade Office in Vietnam, it also shows Vietnam's average demand forwooden furniture is currently more than 21 USD/person/year Calculating, the scaleof domestic furniture consumption in 2018 has reached about 4 billion USD In 2018,Vietnam spent nearly 500 million USD to import furniture It is expected to continueto increase in the coming years.

2.2 THE NATIONAL BUSINESS ENVIRONMENT2.2.1 People

a) Language

Vietnamese, also known as Vietnamese or Vietnamese language, is the language ofthe Vietnamese people and the official language in Vietnam This is the mothertongue of about 85% of the Vietnamese population along with more than 4 millionoverseas Vietnamese.

According to Ethnologue, Vietnam has 110 languages listed, including Vietnameseand two marginal languages, Mandarin and French Of the living languages, 93 arenative languages and 16 are not.

Besides the national language, we have 15 hours of development, 45 hours ofhealth, 42 hours of difficulty and 6 hours of dying Currently dying languages havebetween 20 and 300 speakers.

b) Culture

A culture that upholds traditional family cultural values

The family is the cell of society Traditional family culture: respecting the elderly,loving children, upholding marital love, respecting mother's rights Children must befilial to their parents Brothers and sisters must stick together and help each other intimes of trouble and difficulty Traditional family cultural values are expressed insocial relations such as calling the elderly grandpa, grandma, uncle, aunt, etc., whilethe younger ones are brothers, grandchildren, and children.

A culture that emphasizes the role of women

In Vietnamese culture, the image of women is highly valued and holds a worthyposition in traditional cultural activities, especially in places of worship.

Open culture, adapting to world cultures

Vietnam is located in the western Pacific Ocean, east of the Southeast Asianpeninsula, south of China, north of the Southeast Asian archipelago Shown throughthe diversity in home decoration in the style of the East, the West,

c) Religion

According to the government's 2019 National Population and Housing Census report,there are about 13 million religious adherents, accounting for 14% of the population.In which, Roman Catholics account for 45% of the total number of religiousfollowers in the country, Buddhism accounts for 35% of the total number of religiousfollowers in the country, Protestantism accounts for 7% of the total number ofreligious followers in the country.

d) Population

As of December 31, 2021, the population of Vietnam is estimated at 98,564,407people In 2021, the natural population growth rate is positive because the number ofbirths exceeds the number of deaths by 912,801 people The sex ratio in the totalpopulation of 0.997 (997 men per 1,000 women) is lower than the global sex ratio.Below are the key figures for Vietnam population in 2021:

● 1,545,374 babies born● 632,573 people died

● Natural population growth: 912,801 people● Migration: -82,555 people 49,208,169● Male as of December 31, 2021 49,356,238● Female as of December 31, 2021

(Source: https://danso.org/viet-nam/)

e) Population growth rate

After 10 years, from 2009 to now, the population of Vietnam has increased by10.4 million people The average annual population growth rate in the 2009-2019period is 1.14%/year, slightly down from the previous 10 years (1.18%/year)

f) Age structure

As of early 2017, it is estimated that Vietnam has the following age distribution:

Picture 2.1: Age’s distribution in Vietnam

Blue: Under 15 years oldOrange: From 15-64 years oldyellow: Over 64 years old

Population data by age (estimate)::

● 23,942,527 adolescents under 15 years old (12,536,210 boys / 11,406,317girls)

● 65,823,656 people aged 15 to 64 years (32,850,534 men / 32,974,072 women)● 5,262,699 people over 64 years old (2,016,513 men / 3,245,236 women)

g) Ethnic makeup:Vietnam is a unified nation state, with 54 different ethnic

groups In the territory of Vietnam, the majority of Kinh people (about 87% ofthe population); The remaining 13% is the population of 53 ethnic groups.Each ethnic group has different cultural identities, expressed througheconomic and cultural activities of ethnic groups

h) Education attainment and literacy:

+ The literacy rate of people aged 15-60 in Vietnam reaches 97.85%, ofwhich the age group 15-35 reaches 99.3% fully able to read and write, by2020.

+ According to the rankings published by the EF English Proficiency Index(EPI) (2020), Vietnam ranks 13th out of 24 in Asia, 65/100 countries andregions in terms of English ability The two cities with the highestEnglish proficiency in Vietnam are still Hanoi and Ho Chi Minh City.However, compared to the rest of the world, this score is still in the lowproficiency group.

i) Urban/ rural composition: Urban people account for 37.7% of the total

population, about 37 million people, the majority of Vietnam's population stilllive in rural areas, accounting for about 62.3% of the total population

j) Family Structure: In Vietnam, there are two types of families In today's

digital age, the modern family dominates.

+ Modern family (nuclear family): small family consisting of twogenerations Emphasize individuality and allow each family member arelatively large amount of free space to develop Previous generations donot have much influence on the following generations, increasing the gapwith previous generations both in terms of geography and cohesion + Traditional family: Multigenerational family, families usually have three

generations including grandparents, parents and children Previousgenerations have a great influence on the next generation.

In addition, with great changes in economy, society and international integration,new forms of marriage and family that favor individuality tend to increase Thestudy shows that 38.5% of respondents accept celibacy - this level is higheraccepted in women and social groups with many modern characteristics; 28.4%have the need and desire to cohabit before getting married; 58.3% do not supportcohabitation This ratio shows that in Vietnam, the group of people who still

follow the traditional pattern in marriage, although still accounts for a highproportion, is not nearly as absolute as in the previous traditional society

k) Differences between roles of men and woman:

In Vietnam, by 2020, 70% of women will join the labor force Senior managementpositions held by Vietnamese women account for 27%, higher than the worldaverage However, female workers are still concentrated in low-incomeoccupations And more than 50% of Vietnamese women are still victims ofdomestic violence.

In Vietnam, women make up more than 57% of the country's unemployed adults,according to the NGO CDI Another study by the International Labor Organization(ILO) and Navigos Search Company showed that, out of 12,300 online jobadvertisements between November 2014 and January 2015, one-fifth requiredgender , of which 70% required candidates to be male Men are targeted forspecialized, high-tech jobs or jobs that require a lot of travel While women areoften employed for office and administrative jobs.

+ Prime Minister: Phạm Minh Chính

+ President of the National Assembly: Vương Đình Huệ- Political stability

Vietnam is a country with a stable political background Experts from the EIASInstitute highly appreciated Vietnam's stable political situation as well as itsimpressive economic development in recent years, especially after the Covid-19epidemic was brought under control The maintenance of economic growth in thecontext of the Covid-19 pandemic is an outstanding example of Vietnam's stabilityunder the leadership of the Communist Party of Vietnam and the administration of theGovernment of Vietnam With the unified direction from the central to local levels,the entire political system of Vietnam has stepped in and mobilized the participationof the entire people, creating a high consensus in the whole society to implementstrong anti-epidemic measures, mobilizing large resources in a short time forepidemic prevention and control Under the leadership of General Secretary Nguyen

Phu Trong, Vietnam has achieved healthy economic growth and many achievementsafter the pandemic.

- Economic freedom

According to the Index of Economic Freedom 2021, published by the AmericanHeritage Foundation, the Vietnamese economy belongs to the group of "moderatelyfree" economies Free), an increase of 2.9 points and an increase of 15 placescompared to 2020 Vietnam ranks 17th out of 40 economies in the Asia-Pacific regionand its overall score is higher than the average of the country region and the world.Vietnam's economy has been gradually improving in terms of the free index since2011 Strong GDP growth over the past five years has reflected this improvement,driven by the manufacturing and processing industries export direction.

All land is owned and managed by the state, but since September 2018, thegovernment has issued land use right certificates for 96.9% of land in Vietnam.

The highest personal income tax is 35% and the highest corporate income tax is 22%.Other taxes include value-added and property taxes The overall tax burden is equalto 18.6% of total domestic income Government spending has amounted to 28.3% ofGDP over the past 3 years, and the budget deficit has averaged 4.7% of GDP Publicdebt is equivalent to 57.5% of GDP.

- Legal system/ regulations

Investors are required to meet investment conditions of WTO commitments,international treaties on investment that Vietnam has signed or acceded to anddomestic laws.

Restrictions on the percentage of capital contribution are set for some specificconditional occupations that investors intend to register In addition, there are stillpopular industries with unlimited capital contribution to encourage investment.

Currently, investor nationality is no longer restricted from receiving investment,except for a few nationalities who are not allowed to receive investment because itaffects national defense, security, politics and social order

- Openness to foreign direct investment (FDI)

In 2021, despite the complicated development of the Covid-19 epidemic, FDI inflowsinto Vietnam reached 31.15 billion USD, up 9.2% compared to 2020 Entering 2022,foreign direct investment capital flows Foreigners entering Vietnam are expected toprosper again thanks to attractive investment attraction policies and the policy ofreopening the economy after two years of closure due to the Covid-19 epidemic Thetotal registered foreign investment capital into Vietnam as of March 20, 2022 reached

US$8.91 billion, down 12.1% over the same period last year Thereby, it shows thatforeign investors have considered Vietnam as a safe investment destination, expressedtheir confidence in the business investment environment, continued to expandinvestment in Vietnam, when Vietnam controlled well During the Covid-19pandemic, the economy recovered and grew back to the new normal.

- Currency

The monetary unit of Vietnam is the Dong, issued by the State Bank of Vietnam.According to the General Statistics Office of Vietnam (GSO), the consumer priceindex (CPI) in July 2022 increased by 0.4% compared to June 2022, increased by3.59% compared to December 2021 and increased by 3.14% compared to the sameperiod last year.

- Fiscal and monetary policies

+ Tax exemption and reduction policy: 2% reduction of value-added tax ratein 2022, applicable to groups of goods and services currently applying the10% value-added tax rate

+ Regarding monetary policy, synchronously and flexibly administermonetary policy tools to contribute to maintaining macroeconomic stability,controlling inflation, and ensuring the safety of the system of creditinstitutions; study to stabilize the maximum ratio of short-term capital formedium and long-term loans, reasonably calculate the required reserveratio, perform open market operations, refinance, direct credit institutionscontinue to reduce operating costs to strive to reduce lending interest ratesby about 0.5% - 1% in 2 years 2022 and 2023.

- Financial stability

Vietnam’s economy is projected to grow 6 percent in 2022 and 7.2 percent in 2023.Inflation will rise, but it is still lower than the ceiling set by the State Bank ofVietnam of 4 percent, the IMF representative added.

Vietnam has issued macro-economic and fiscal policies to support households andbusinesses affected by the COVID-19 pandemic, including those on tax reduction andexpansion.

- Social security

Expanding the coverage of the current social protection system is a pressing issue inViet Nam Growth and integration will create new opportunities for wealth and jobcreation, but there will also be those who do not benefit In the upcoming years,improving social protection in Vietnam will be a top priority in order to protect thosewho are most susceptible to the negative effects of market reform and integration,

such as the poor, women, youth, and workers Additionally, policies will need to bestrengthened in order to fully implement and operationalize the unemploymentinsurance system.

- Healthcare

Vietnam is also tending to switch to the production and consumption of green andenvironmentally friendly products.

2.2.3 Geography

Type of surface areas:

- Vietnam is a country located on the eastern edge of the Indochinese peninsula,the center of Southeast Asia The area of Vietnam is 331,212 km².

- Regarding the geographical and territorial characteristics of Vietnam, quarters of the land area is mountainous, but mainly low-lying hills, two largeplains, many rivers and streams, and has a long coastline Mountains andplateaus make up three-quarters of the territory.

three-Major bodies of water:

- Vietnam has an interlaced river system with more than 2,360 rivers with alength of more than 10 km, including 109 main rivers There are 16 large riverbasins with an average catchment area of over 2,500 km2, 10/16 basins withan area of over 10,000 km2.

- Vietnam's two main river basins make up two large deltas, the Red River Deltaand the Mekong River Delta, two important granaries ensuring food securityfor the country.

Ho ChiMinh City

- Along the stretched territory, Vietnam's climate is distributed into 3 regions:the north has a humid subtropical climate, the central region has a tropicalmonsoon climate, while the south is located in the savanna tropics Vietnam'sclimate has an average relative humidity of 84-100% all year.

- Annual rainfall in each region is large, ranging from 120 to 300 cm and insome places can cause floods Almost 90% of the rainfall falls in the summer.The average annual temperature in the plain is generally slightly higher than inthe mountains and highlands.

2.3 MARKET AND SIZE POTENCIAL2.3.1 Economy

Gross domestic product (GDP):

Table 2.2: Gross domestic product in Vietnam

+ The Red River Delta has a total population of more than 22.6 million people,the monthly per capita income is approximately 5 million VND, of whichHanoi is the place with the highest per capita income in the region.

+ The Northern Midlands and Mountains have a total population of about 12.5million people, the monthly per capita income is about 2.7 million VND Theprovince with the highest average income is Bac Giang province.

+ The North Central and Central Coast regions have a total population of morethan 20.2 million people, with a monthly per capita income of about 3.4million VND In which, the place with the highest average income is Da Nangcity.

+ Central Highlands has a total population of 5.8 million people, per capitaincome is 2.8 million VND/month Lam Dong is the province with the highestaverage income in this region.

+ The Southeast has a total population of about 17.9 million people, and the percapita income is approximately 6 million VND/month The province with thehighest average income in this region is Binh Duong province.

+ The Mekong Delta has a total population of 17.2 million people, the monthlyper capita income is about 3.9 million VND In this region, the place with thehighest average income is Can Tho city.

Labor force: total in Vietnam was reported at 56151046 in 2021, according to theWorld Bank collection of development indicators, compiled from officiallyrecognized sources Vietnam - Labor force, total - actual values, historical data,forecasts and projections were sourced from the World Bank in September of 2022.Inflation rate: Annual inflation rate in Vietnam fell to a three-month low of 2.89% inAugust 2022 from 3.14% in July, due to a softer increase in transport prices (8.94%).compared to 15.22%) Prices continued to rise for food and catering services (3.30%vs 2.98%), housing and construction materials (1.40% vs 1.13%) and textiles andfootwear sandals and hats (2.05% vs 1.84%).

Currency exchange rates:

Table 2.3: The State Bank of Vietnam quoted the central rate of VND versusUSD on 08/31/2022

Central rate of VND versus USDExchange rate

Distribution of wealth: The income of population groups increased from 3.1 millionVND/month/person in 2016 to 4.2 million VND in 2020, but the income growth rateof the poorest group is always lower than that of the richest group, so the gapbetween rich and poor increasingly increasing However, income inequality betweenclasses is decreasing as the GINI coefficient decreases from 0.431 in 2016 to 0.373 in2020.

Principal industries:

Picture 2.3: The GDP distribution across economic sectors of Vietnam

Radio of private-to-public industrial ownership and trade restrictions: The added tax on imported furniture is 10% of the value of the first imported goods ofVietnam (CIF value) Furniture import tax will depend on the type of furniture andthe origin of the furniture.

value-2.3.2 Media

a) Social media

The number of social network users in Vietnam is nearly 76 million Social networks,movie applications and messaging are the most popular types of applications thatVietnamese users use.

● Facebook and Youtube are also the two applications that users spend themost time with, accounting for 25% and 12% of the time, respectively,when used on mobile phones.

Picture 2.4: Most used mobile social networks

● For messaging apps: Zalo has overtaken Facebook Messenger tobecome the most popular messaging app, accounting for 6%-7% ofusage time.

● Another social network, Instagram, was even surpassed by Tiktok inthis survey when accounting for 4% of usage.

Social media remains an important channel for discovering a new product Inparticular, the popularity of videos on social networking sites increased by 7%compared to 2020, accounting for 22% of the proportion of online discovery channelsin 2021.

c) Landline phone ownership

According to Newzoo's statistics, Vietnam is ranked 9th in the list of countries withthe most smartphone users in the world Accordingly, in 2021, Vietnam currently has66.9 million smartphone users, with coverage reaching 68.2%.

d) Internet users: The number of Internet users in Vietnam is nearly 70

million, (accounting for more than 70% of the population).

e) Billboard

It is difficult for Billboard in Vietnam to cross the usual safe line to break through andbecome unique because of advertising laws in Vietnam due to legal barriers such as:

● The size of outdoor billboards is clearly regulated by law.

● All statements on advertising need to be certified by an authorized unit● Advertising materials are limited by law

2.3.3 Technology

Technological development level of the industry: Currently, the woodworkingand furniture manufacturing technologies used by Vietnamese companies are tootraditional and outdated Most raw wood materials are brought directly to the shapingstage without any processing technology such as burning wood at a temperaturesuitable for the characteristics of each type of wood Therefore, wooden furniturewhen encountering water, high humidity environment, long time will be easier toexpand and break than imported wood furniture.

Investment by enterprises and the state in the application of science and

technology development: A project to develop a sustainable and effective woodprocessing industry in the period of 2021 - 2030 Formation of 5 industrial forestry

zones high technology, selectively attracting investment, prioritizing projectsproducing products with high added value, advanced technology, saving energy, rawmaterials, fuel, materials, and being environmentally friendly Encourage thedevelopment of research centers to design wooden products in accordance with theneeds, culture and tastes of consumers.

2.4 COMPETITIVE ENVIRONMENT2.4.1 Competitor

Direct competitors

Following the trend of simple but no less sophisticated, luxurious, especially moderninterior design and increasing the utility of the product is what the brand creates.JYSK Furniture first appeared in Vietnam in 2015 and develops more and morediversely with more than 1500 different furniture products.

Jysk's products are special because of outstanding features such as: Minimalistdesign, maximized functionality, increased applicability, reasonable price.

In addition, the company always has many discount programs in batches and seasonsto encourage customers to choose to use products that are both beautiful and multi-functional at extremely reasonable prices.

Nội thất Hòa Phát

Hoa Phat furniture brand is one of the leading furniture brands in Vietnam, is one ofthe large enterprises, leading enterprises in the field of furniture, Hoa Phat's productlines are highly appreciated for their quality product quantity, product design.

Hoa Phat is not only strong in providing a variety of furniture with diverse styles forindustrial and general purposes as well as a large number of home furniture modelswith many prices to suit the needs of customers each customer group.

Customers and consumers can easily access Hoa Phat's products almost anywherewith the enterprise's wide distribution strategy.

Jang In Furniture

Jang In is one of the leading furniture brands in Korea, with a history of more thanhalf a century of existence and development At the same time, this is also a famousfurniture brand with product lines that are good for users' health In Vietnam, Jang Inis still one of the leading furniture brands chosen by Vietnamese consumers.

With the values of nature and people as the core, Jang In's products are alwaysdesigned with an aesthetic design that is suitable for the environment and highlypractical Besides, with the leading brand in furniture technology.

Jang In's customer groups often have mid-range or higher incomes due to the locationof the stores, which are often located in locations such as shopping malls.

Indirect competitors

Retail furniture stores in Vietnam

Shops selling traditional wooden furniture in Vietnam

2.4.2 Positioning

Positioning of the opponent

Products and services that competitors are offering:

- Hoa Phat Furniture is a large corporation in many fields, especially in the fieldof furniture, Hoa Phat furniture has an extremely diverse product portfolio:Hoa Phat Home Furniture Product Line; Hoa Phat School Furniture ProductLine; Product Line of Construction Furniture – Hoa Phat Public Area; MedicalFurniture Product Line Their current positioning in the market: Focused, solidand effective

- Jysk is an international retail chain from Denmark that specializes in providingNordic Living and Interior decoration solutions - Scandinavian Living Theproduct portfolio is diverse: from Shelves / Cafe Table / Table / Dining Chair /Bed Frame to Small Furniture / Shoe Cabinet / Wardrobe Their currentpositioning in the market: Beautiful, Quality, Modern Scandinavian Nordicstyle

- Jang In Furniture is one of the leading furniture companies in Korea, with ahistory of more than half a century of existence and development Wide rangeof products: Jang In sofa / Jang In bed / Jang In wardrobe / Dining table set /Tea table / TV Their current positioning in the market: Aesthetic design issuitable for the environment and highly practical

The opponent's strengths and weaknesses:

- Strengths: Furniture companies such as Jysk, Hoa Phat Furniture or Jang InFurniture are all companies with diverse furniture product lines Like Jysk, theproduct is often Nordic style, both Jysk and Hoa Phat Furniture company havequite reasonable prices for a variety of users; or Jang In Furniture with high-class designs, made from high-quality natural wood or PVC.

- Weaknesses: However, the products of the above competitors are still madefrom metal materials, or the design of Hoa Phat's interior is not eye-catching;and products of Jang In Furniture, because of its high-end design, the pricewill also be higher than the common shops.

IKEA's positioning

IKEA promotes flexible, customizable and composable furniture designs Thecombination of affordability and sustainability is key to this success Ikea's interiorstyle is quite suitable for the consumption needs of young people.

Cost leadership

IKEA CO has its own uniqueness in both design and execution of its cost leadershipstrategy To monitor costs, to win the market competition, IKEA CO developed threeapproaches: a modular approach to furniture design, limited service, and a globallogistics and production management system Modular Interior Design Methodologyand the “Ikea Effect” To save costs, IKEA CO abandoned the popular method bywhich sellers assemble furniture for their customers and came up with their ownmodular approach to furniture design: dividing furniture into designed modules andseparately manufactured and easy to assemble When customers buy IKEA furniture,they should assemble it themselves More importantly, the modules can be assembledinto furniture of different styles and different uses, not only saving costs but alsogiving customers a unique opportunity IKEA will also apply its cost leadershipstrategy when entering the Vietnamese market.

Shopping experience

Products in retail stores of IKEA CO As the product is real, customers can touch andfeel the product directly, helping to promote the customer experience and save onselling costs.