Sao Nam An corporations competitive strategy for Brother printer Vietnam

TRƯỜNG ĐẠI HỌC MỞ TP. HCM UNIVERSITÉ LIBRE DE BRUXELLES HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL MBAVB4 NGUYN TH HỒI TRANG Sao Nam An Corporation’s competitive strategy for Brother printer Vietnam MASTER PROJECT MASTER IN BUSINESS ADMINISTRATION (PART-TIME) Ho Chi Minh City (2011) Page | i DECLARATION This thesis is a presentation of my original research work. Wherever contributions of others are involved, every effort is made to indicate this clearly, with due reference to the literature, and acknowledgement of collaborative research and discussions. The work was done under the guidance of Dr. LE THAI THUONG QUAN, under the framework of the the Master program in Business Management – The join Masters Program between Ho Chi Minh City Open University (Vietnam) and Solvay Brussels School (Belgium). The work was completed in Feb 2012, in Ho Chi Minh City - Vietnam (candidate’s name and signature) NGUYEN THI HOAI TRANG Formatted: Centered, Indent: Left: 8.89 cm, First line: 1.27 cm, Line spacing: 1.5 lines Deleted: December Deleted: 1 Page | ii ACKNOWLEDGEMENT This thesis can’t be completed in solidity. There are many people I would like to thank them for their enthusiastic support throughout my research. Firstly, I would like to express my warmest thank to my supervisor Dr. LE THAI THUONG QUAN for his valuable guidance and advices throughout my study. He was always supporting me with kindness and care. I would like to formally thank Mr Khanh –Sale manager of Sao Nam An JSC, for helping me understand his company’s business and Ms. Thuy - CFO of Sao Nam An JSC for providing me with necessary information. I wish express gratitude to all my classmates MBVB3. I wish to say that the last two years have been quite an experience to me and all of you have made it for me. Next I want to thank to all the members of my dear group 4A and 4B, I want to say that we were always together, supporting each other in our assignments, I feel lucky to be your friend. Moreover, I would like to thank all the members of the Examination Committee for giving me your time and your valuable advices for me to improve my study. On my personal side, I want to express my endless love to my family, who have supported me in all imaginable ways. HCM City, December 2011 NGUYEN THI HOAI TRANG Page | iii TUTOR’S COMMENTS The topic is practical and the author has shown her best effort to finish this project. In current state, both the content and the presentation are still very weak. However, take into account her situation and with the recognition of her efforts, I confirm that I agree for this project to be allowed to go to public presentation. Le Thai Thuong Quan Page | iv EXECUTIVE SUMMARY Sao Nam An is a business company in distributing office equipments, and belongs the Sao Nam Group with major market in Ho Chi Minh City and neighborhoods. Sao Nam An is one of the exclusive suppliers of Brother printers in Vietnam. Besides, it is also the distributor of some other companies such as Konical, Panasonic, SanYo. In the difficult context of economics, and under the pressure of the supplier that Brother want to increase the market share of printer in Vietnam, Sao Nam An need to research and give out a efficient competitive strategy in order to develop market of Brother’s printers and multi-function printers. This is also the major research of the thesis The thesis introduces basically operation, personnel as well as some financial information in order to make readers have a general view of current status of Sao Nam An,. Then the author applies analysis tool “five forces” of M.Porter to analyze not only the industry but also current competitors of Sao Nam An. Besides, the author also analyzes the potential abilities inside as well as advantage of Sao Nam An in order to give out appropriate solutions After analysis, based on specific feathers in business that supplier like Sao Nam An can not change products it distributes in a close market like Southern area, focus differentiation strategy of M.Porter is the optimal solution. It is the strategy to break into the current market, and is to find out how to develop the share of products through marketing solutions. In order to carry out this solution, the author analyze and determine the areas which Sao Nam An need to make different: expanding the distribution channel, improving the quality of services, co-operating with supplier Brother to give out marketing strategy in order to popularize the trade name, to attract the customers and apply ERP system into company management to reduce the cost and bring more benefits. The detail activities needed to deploy the strategy will be presented specifically in functional strategies such as personnel, marketing and advanced technology. Page | v TABLE OF CONTENT CHAPTER 1 : INTRODUCTION 1 1. The need of research 1 2. Scope of the thesis 3 3. Structure of thesis 3 CHAPTER 2 : THEORETICAL BACKGROUND 4 1. What is competitive strategy? 4 2. Industry analysis 4 3. Type of strategies 8 CHAPTER 3 : CURRENT SAO NAM AN SITUATION 12 1. Introduction about Sao Nam Group 12 2. Introduction about Sao Nam An 14 2.1. History 14 2.2. Business function 15 o Wholesale 16 o Retailsales 16 o Project 16 o Warranty: 17 o Maintenance 17 o Equipment renting 17 o Traning/consultancy 18 2.3. Focused product list 18 2.4. Human resource 18 2.5. Distribution channels 21 2.6. Customer Segments 21 a. Wholesales 21 b. Project 22 o Sales 22 3. Industry analysis 25 3.1. Five Porter 25 a. Barries to entry (high) 25 b. Substitue products (high) 26 c. Bargaining power of buyers (high) 27 d. Bargaining power of suppliers (low) 29 e. Rivalry among existing competitors (high) 29 4. Competitor analysis 31 5. Internal factors 35 5.1. Value chain 35 5.2. SWOT 38 6. Product analysis 39 6.1. Secondary data 40 Page | vi 6.2. Concluding 42 7. Customer analysis 42 CHAPTER 4 : COMPETITIVE STRATEGY TO INCREASE COMPETITIVE ADVANTAGES 45 1. Identify strategy 45 2. Choosing competitive strategy 46 2.1. Cost leadership 48 2.2. Differentiation 49 3. Steps in Differentiation 49 4. Function strategies 56 4.1. Strategy towards Customers and Supplier 56 a. Customers 56 b. Brother Supplier 58 4.2. Marketing 58 a. Overall marketing strategies 59 b. Product 59 c. Price 60 d. Place 60 e. Promotion 61 4.3. Human resource 62 4.4. Techonology innovation 65 APPENDIX 68 1. Macro environment 68 1.1. Macro economy 68 1.2. Overview domestic printer market 69 1.3. Analysing financial situation 72 2. Financial items 74 3. Customer list 75 4. Distribution channel 77 5. Product lists 79 PREFERENCES 81 Page | vii Figures Figure 1: Income of categories 2 Figure 2: Five forces Porter model 5 Figure 3: There Generic Strategies 9 Figure 4: Differentiating Features That Raise the Performance a User Gets 11 Figure 5: Structure Organization of Sao Nam Group by area 13 Figure 6: Organization chart of Sao Nam An 19 Figure 7: Percentage distribution of employees 20 Figure 8: Increase of employees in years 21 Figure 9: Sale volumes of Sao Nam An in 2008-2010 23 Figure 10: Sale volumes of product categories in 2008-2010 24 Figure 11: Printer sales distribution by type of business 2010 25 Figure 12: Company organization structure (offered model) 64 Formatted: Left: 3.5 cm, Right: 2 cm, Top: 3.5 cm, Bottom: 3 cm, Width: 21 cm, Height: 29.69 cm Formatted: Heading 3,LV_Chapter, Indent: Left: 0 cm, Line spacing: 1.5 lines Deleted: I. Bi cnh lun vn 2¶ II. Tóm tt lun vn 3¶ III. Lý thuyt áp dng 3¶ IV. Cu trúc ca lun vn 3¶ CHAPTER 1 : Tình hình kinh doanh ca công ty Sao Nam Song Han 4¶ 1. Gii thiu v công ty Sao nam 4¶ 2. Kinh doanh và tình hình tài chính ca chi nhánh à Nng _ Công ty Sao Nam Sông Hàn 8¶ CHAPTER 2 : Tài sn 8¶ CHAPTER 3 : Nhân lc 8¶ CHAPTER 4 : Hình thc vn chuyn 8¶ CHAPTER 5 : Phân tích các yu t tác đng 10¶ 1. Môi trng v mô 10¶ 2. Môi trng kinh doanh 11¶ 3. Ni lc tác đng 12¶ CHAPTER 6 : iu tra nhn thc và hành vi tiêu dùng ca khách hàng l và doanh nghip 13¶ 1. Mô hình kho sát 13¶ 2. Mu kho sát 13¶ 3. Bng câu hi 13¶ 4. Phân tích kt qu 13¶ CHAPTER 7 : Mt s gii pháp nâng cao nng lc cnh tranh ca công ty 13¶ Page | 1 CHAPTER 1 : INTRODUCTION 1. The need of research Sao Nam An is a subsidiary company of Sao Nam Group, operating in office equipments business with the main markets in HCM city and other neighbour provinces. The firm is one of the two official distributors of Brother in printers and multi-function machines in Viet Nam. Moreover, Sao Nam An is also the exclusive distributor of Konical Molnital in Photocopy marchines and of Panasonic, Sanzo in cameras, projectors… Based on the report of IDC, the market share of Brother in printers in Vietnam is still small with approximately 2% by 2010. According to its development strategy for the next time, Brother will especially take care of emerging markets and strive for the position of the second leading vendor in VietNam. Brother hopes that its sale rate in developing countries will go up to 64% by 2015 from the level of 50% by 2008. And for Vietnam, Brother expects that the market share will increase to 20% in future, this increase includes 15% in mono laser printer and 5% in inkjet and multifunction machines. For this reason, Brother is going to invest more capital to raise its market share in Vietnam. In fact, Brother has already established many warranty centers in HCM city, Ha Noi, and a Nang. In order to achieve the goal, Brother requires its two distributors in Vietnam, Sao Nam Group and Silicom, to review their development strategies. Hence, as an official distributor, this is not only an opportunity for Sao Nam An to receive more support from Brother Supplier but also a challenging mission for it if Sao Nam An wants to keep its monopoly distribution position, especially when Brother Products have occupied more than 30% of Soeco’s portfolio of and have average growth rate of 75 percent every year. Formatted: Font: 14 pt Formatted: Font: 14 pt Formatted: Bullets and Numbering Formatted: Heading 5, Line spacing: 1.5 lines Deleted: Bi cnh lun vn Page | 2 0 10 20 30 40 50 60 70 80 90 Máy In, Fax, Da Nang Brother Máy photocopy Konical SanYo CCTV SanYo LCD Project Sn phm khác Billions 2008 2009 2010 Figure 1: Income of categories While the echo of financial crisis in 2008 has not reduced absolutely, Vietnam economy has been facing a lot of difficulties in subsequent years. The current Europe debt crisis with tightening budget policies of European governments and the economic depression of America…have had a significant negative effect on our home market. In addition, inflation, exchange and interest rate are too high bulding up difficulty to firms. The Input costs have been raising whereas the output has been decreasing due to less consuming of customers in recent years. As we can see, internal and external difficulties have surrounded the firms. The factors mentioned above have brought many small companies in capital to the verge of bankruptcy. At this point, the government has promulgated many policies to reduce the governmental budget expense to help the economy go through the difficult situation. According to the Economic Committee report, by the first six months of 2011, there were 30% firms going bankrupt, many other survivers had to reduce their production sizes. Hence, it is necessary for companies to review their internal forces and restructure themselves to overcome this tough period. Under the difficult situation of present domestic economy, along with the critical competitive situation in Vietnam market and Brother‘s heavy requirement, Formatted: Caption, Centered, Line spacing: single [...]... boundary 1 Sao Nam An service commerce Limited Company is responsible for all business in HCM city and South area of Vienam 2 Sao Nam Ha Noi company is responsible for all business in HaNoi and North area of Vietnam 3 San Nam Can Tho company 4 Sao Nam Tien Giang company 5 Sao Nam Song Han Company in Da Nang is responsible for all business in Da Nang and South-Middle area of Vietnam Base on the organizational... DUY BINH Chairman Sao Nam Ha Noi Company Mr inh Thanh Long Director Sao Nam Ti n Giang Company Ms Ph m Trúc Oanh Director Sao Nam An Company MR.Lê Hoàng Thái Director Sao Nam C n Th Company Mr Nguyen Duy Tan Director Sao Nam Sông Hàn Company Mr Tr ng Công Khanh Director Figure 5: Structure Organization of Sao Nam Group by area Page | 14 As we can see in the structure organization of Sao Nam Group above,... organized by area We can also see that, among the Soeco’s subsidiary companies, Sao Nam An company occupies the highest hierarchy And in the scope of this thesis, researcher will focus only on Sao Nam An company’s operation and build a competitive strategy solely for Sao Nam An with its operation market in HCM city and South area of Vietnam Formatted: Bullets and Numbering 2 Introduction about Sao Nam. .. Nam An 2.1 History Sao Nam An company – the first company of Sao Nam Group - was founded in 1997 when most of the indigenous business companies were affected badly by Asian economic crisis However, Sao Nam An has quickly developed and become one of the leading companies in office equipments distribution thanks to the suitable and intelligent development strategies of the company’s managers Sao Nam An. .. from Sao Nam An s warehouse to its branches’ warehouses Besides, it’s only Sao Nam An who binds to the policy of manufactures that is do not sell any product of other manufactures, others in Sao Nam s subsidiary companies don’t have to do such thing Therefore, in case the exclusive products Sao Nam An provides, for example printers of Brother, don’t meet the configuration requirements of contractors, Sao. .. công ty Sao nam Page | 13 has duty to support other companies belonging to Sao Nam group on every business aspect An example showing Sao Nam s parent company role is that whenever a branch obtains a contract which goes beyond that brach’s financial ability, human resource or experience, it will be supported by Sao Nam An to execute the contract Another example is that Sao Nam An pay for its branches... CURRENT SAO NAM AN SITUATION Introduction about Sao Nam Group Sao Nam Group has six subsidiary companies operating in perigraphy distribution business such as copier, camera-assess system, printer, MFC … of many famous manufactures on the nation scale including Brother, Konical Minolta, Sanyo, Panasonic Sao Nam Group has the nationwide agents network with more than 350 companies Up to this day, Sao Nam. .. Warranty - Maintenance - Equipment renting - Traning/consultancy Sao Nam An imports goods and transfers them to the company’s warehouse After that, Sao Nam An will distribute those goods to its branches all around HCM city and the South area Thereafter, each branch will again deliver those goods to the agents in its area For most of the long transferring such as from HCM to DN or from HCM to HN, Sao Nam. .. exclusive distributor for many world renowned organizations From the first days of the company, Sao Nam An was assigned to be the unique distributor of Minolta photocopier which is now known as Konical Minolta after the merging between the two companies Konical and Minota Another famous organization Sao Nam An has been the distributor of is Brother, Brother has entrusted Sao Nam An with exclusive distribution... internal forces as well as its developing strategy In order to exist and develop, each firm has to exploit as fully as possible its competitive advantages The theories that are presented below will be the basement to analyse current situation of Sao Nam An and build competitive strategy to expand Sao Nam An s business market First of all, it is a requirement to understand the strategy concept and the . responsible for all business in HaNoi and North area of Vietnam. 3. San Nam Can Tho company 4. Sao Nam Tien Giang company 5. Sao Nam Song Han Company in Da Nang is responsible for all business. Brother want to increase the market share of printer in Vietnam, Sao Nam An need to research and give out a efficient competitive strategy in order to develop market of Brother s printers and. possible its competitive advantages. The theories that are presented below will be the basement to analyse current situation of Sao Nam An and build competitive strategy to expand Sao Nam An s business