Building business strategy-the case of Viet Long Company limited

VIET NAM NATIONAL UNIVERS1TY, HANOỈ SCHOOL OF BUSINESS —H s B — I ĩ f\.- n I - f • Nguycn Thi Hong Hue BUILDING BUSINESS STRATEGY T H E C ASK O F V IE T LO N G C O M P A N Y L I M IT E D M AS I i:li OK BUSINKSS AD MI NISTRATION IHKSIS A- Ha Noi -2010 /3 TABLE OF CONTKNT AC KNOWL KDGE MENTS i ii ABSTRACT iv I ỎM TẤT vi TABLE OF CONTKNT vii LIST OF CHART, TABLE AND KIGUKK xi INTKODUCTION xiv Problcm statcmcnt xiv Ai 111 and obịcctivcs xiv Scopc o f w o rk XV M c th o d o lo g y XV Research qucstions X V Data collccũon X V Signiíícance xvi L im italion xvi Kindings xvi 10 Thcsis structurc xvi CHAPTKR I: THEOKKTICAI FOUNDATION 1.1 Building husinesscs strategy to cnterprise 1.1.1 An ovcrvicvv of slrategic managcincnt ] 1.1.2 R o le o f stratcgic m a n ag e m e n t to e n tc rp risc s 1.1.3 Business stratcgy altcmalives ] 1.4 Process lo builđ busincss slrategy to cnterprise 1.1.5 Applied modcls to builđ business strategy to cnlerprise 1.1.5.1 PEST Modcl 1.1.5.2 Five Korcos Models 10 viii 1.1.5.3 Value Chain 13 1.1.5.4 SWOT Modcl 15 Kcmarkable points in huildin” busincss stratcgy for Vict 1.2 Long Coinpany Limited 17 1.2.1 Characteristics o f enterpriscs in Vict Nam bicyclc industry 1.2.2 Fragrnentation oCthe bicyclc industry 1.2.3 Transilion to maturity o fV iel Nam bicycle industry 21 1.2.4 Slratcgic group inViet Nam bicycle industry 23 1.2.5 Entry into nevv business through inlcrnal developnicnt 25 18 CHAPTKR 2: EXTERNAL AND INTKRNAL ANALYS1S 26 2.1 Ovcrvicw o f Viel Nam bicyclc induslry 26 2.2 Extcmal analysis 29 2.2.1 Environmcntal scanning and (orccasting - Pest analysis 29 2.2.1.1 Polilical Taclors 29 2.2.1.2 Economic íactors 34 2.2.1.3 Social Taclors 38 2.2.1.4 Technology lactors 42 2.2.1.5 PKST conclusion 45 2.2.2 Industry analysis l;ivc Forces Model 45 2.3 Intcmal analysis 57 2.3.1 Ovcrvicvv o f Vict Long Company 57 2.3.2 Valuc Chain analysis 59 Primary activitics 29 2.3.2.2 Supporting activilies 65 ix CHAPTER3: STRATECỈY KORMl I.ATION AND 69 IMPLEMENTATION Estimation o í dcmand and supply íbr Viet Nam bicycle 3.1 69 industrv 3.2 SWOT analvsis 73 Pormulation oi'strategy tbr Vict Long Company 3.3 79 Limited Implicalions for business stratcgy for Vict Long Company Limited 3.5 Stratcgy implcmentation 85 3.5 ỉ Implemcntation o f dilTerentiationby branding strategy 87 Implemenlation o f diíĩerentiation by customer services 3.5.2 89 slratcgy 3.5.3 Supplicr nctvvork building slrategy implcmenlation Invcstmcnt 3.5.4 5.2.5 on research and development stratcgy implcmcnlalion 91 Investinent onmachinc and equipmcnt stralegy implemcntalion CONCLUSIONS Rclcreiìccs Appendix A: Importcd tax ralc to bike and components Appendix B: List o f intcrvicvvccs X 93 LIST OF FIGURE Kigurel.l: Strategic management process Figurcl.2: Typical business stratcgies Figure 1.3: Strategy íbnnulation process Kigure 1.4: Relationship between environmental, competitive and internal organizational analysis Pigure 1.5: PEST Modeỉ Pigure 1.6: Five forces Modcl 11 Pigure 1.7: Value Chain 14 Pigure 1.8: SWOT Matrix 16 Figure 2.1: Viet Nam bicycle industry Iifecycle 26 Pigure 2.2: Highlight of Viet Nam bicycle industry 28 Figurc 2.3: Strategic group in Vict Nam bicycle industry 47 Pigure 2.4: Viet Long bike production process 60 Figure2.5: Organi/ation structure of Viel Long Company 66 F-'igurc 3.1: Custoincr group analysis 84 xi LIST O F TABLE Table 2.1: Avcrage bike per person by agc group 39 Tablc 2.2: Impact ofPEST íactors on Viet Nam hicycle industry 44 Table 2.3: The numbcr of bicycle manuĩactured and assembled enterprises 45 Table 2.4: Strategic group vvithin Viet Nam bicyclc industry 46 Table 2.5: Product category of industry main players 50 Table 2.6: Comparison oTlransport modes’ bcncfits 53 Table 2.7: Five forces assessment 56 Tablc 2.8: Time consume of bikc assembling proccsscs 61 Tablc 3.1: Estimatcd demand on bicycle in 2009-2014 69 Table 3.2: Opportunities and threats ofViet Long Company 73 Table 3.3: Competitive strength assessmenl for Vict Long Co Ltd 74 Table 3.4: Strenglh and weaknesses ofViel Long Company 77 Table 3.5: SWOT Model ofViet Long Company Limited 78 Table 3.6: Advantage and disadvantage analysis for cach busincss strategy as in thc casc of Viet Long Table 3.7: Kunction stralcgies for Viet Long Company 85 Tablc 3.8: Customer Service activities of industry main players 90 xii LIST O F CIIARTS Chart 2.1: Export value of Viet Nam bicycle industry 32 Chart 2.2: GDP of Vict Nam 34 Chart 2.3: Daily demand of transportation in Vicl Nam 35 Chart 2.4: Daily detnand of transportation in 1la Noi 36 Chart 2.5: Daily demand of transportation in Ilo ChiMinh City 36 Chart 2.6: Viet Nam population and ĩorecast 38 Chart 2.7: Population aging structure and íorecast 39 Chart 2.8: Sale breakdown of Viet Long Company Limited in 2008 57 Chart 3.1: Estimation o f dcmand for Viet Nam bicycle industry (20092014) Chart 3.2: Projection of dcmand for bicyclc by scgments, 2014 70 Chart 3.3: Segments in Viet Nam bicyclc industry (2008 and 2014) 71 Chart 3.4: Markct share of Vict Nam bicycle industry by segments, 2008 72 xiii INTRODUCTION This chaptcr indicates an introduction o f thc research First problem setting will be provided, followed by aim, objectives and scope o f work After that, methodology that is applied in the rcsearch is prcscnted It is followed by research questions, data collection, signiíìcance and limitation, and íìndings of the research Final1y thesis structure will be presentcd in orđer to give readers an ovcrall picture o f thc paper ỉ Problem statemcnt Viet Long Company Limited (Viet Long Co Ltd) is a private-ovvncd entcrprise which manufacturcs bike parts, including axlc-tree, pcdal and tnayor The company has just dcvcloped a nevv product, which is bicycle, since 2008 It’s necessary to build busincss strategy for Viet Long Company to find the way of surviving and growing in Vicl Nam bicycle industry Aims and objectives The aim o f the thesis is lo build an appropriate busincss slrategy for Viet Long Co Ltd, íocusing just only one new product thai is bicyclc in the next five years, from 2010 to 2014 The objectives o f thc thesis are as belovv: s Firstly, providing bctter understanding o f thcorctical íbundation in building business slrategy for enterprises s Secondly, applying theorics into Viet Long Company to fígure ouí thc company opportunities, threats, strengths and wcaknesses Then Viet Long business stratcgy are built, íbcusing on product o f bicycle s Thirdly, drawing out overall implications for strategy implementation in Vict Long Co Ltd xiv Scope of \vork The study íbcuses only on Vict Long Co Ltd, Hnding thc company’s business contexl, opportunities, threats, strengths and vveaknesses Business strategy for Vict Long Company in the C o rn in g fíve ycars, from 2010 to 2014, vvill be íbrmulatcd, focusing on bicyclc Finally, the research draws out implications for stratcgy implementation in Vict Long Co., Ltd M ethodology The sludy íocuses on only Viet Long Co., Ltd, investigate a contcmporary phenomenon within its real-life context and usc multiple sources o f information Thcrclore, case study is choscn as research methodology to makc an in-dcpth investigation Research questions In order to reach aim and objectives, thcsc rescarch questions have been developcd: / What is the way lo huild business stralegy for enterprise? s What is appropriale business strategy forViet Long’s bicycle? S How to implemcnl the strategy? Data collcctiou Duc to rcscarch topic, aim and qucstions, data is collccted via sourccs of documcntation, archival rccord and intcrview Documcntation and archival record obtaincd from public papers, company profilc and annual reports o f relcvant parties supporting analysis o f cxtemal and internal organizational environment Opcn-endcd interviews are conducted directly with industry experts, Vict Long’s director and employees In some cascs, interview is considered as signiíìcant iníbrmation sourcc due to limitalion o f availablc data XV Signiĩicancc The rcscarch contributes signiíìcantiy to the economy and the enterprise: To the economy: The study provides bctter undcrstanding o f building business strategy framework for cntcrprises in Viet Nam bicycle industry In addition, the stu đ y can be a refe rc n c e to fírm s in other Industries To the enterprise: The study finds out business context, opportunities, thrcats, strengths, vveaknesses and appropriate business strategy for Viet Long’s bicyclc In addilion, the rcscarch proviđes implications for stratcgy implementation in Viet Long Company Li mi t at i on The study íocusesjust only on Viel Long Company Conscqucntly, íìndings o f thc rcsearch can not bc applied for other íìrms, but can be good reference to other ones in the same industry In addilion, available data o f mechanics industry, bicyclc industry and íoreign competitors is iimitcd ỉn some cases the author collects information froin most rclevant sources as cxpcrt ideas to solve thc issuc Due to íragmentation o f the bicycle industry, indưstry analysis will focus only on main playcrs who covcr noticeable market share Findings The study finds out appropriate busincss and íunctional strategies lbr Viet Long Company In addition, the study intends to draw out implications for strategy implementation in Viet Long Company 10 Thesis structure Due to topic and research methodology, the thesis is divided into threc main chapters: theorctical íbundation, extemal and intcrnal analysis, and strategy íbrrnulation and strategy implementation íor Viet Long Co Ltd In addition, xvi 3.5 Strategy implcmentation A s choosing busincss strategy o f focus differcntiation and target on the youth group in rural area, S W O T analysis indicates somc functional strategies that V iet Long Com pany Lim ited could follow as prescnting in be!ow table: Table 3.7: Function stratcgics for V ie t Long Com pany: Opportunities - o Threats - T Fragmcntation o f Viel Nam bicycle industry S!ow industry growlh rate Expccted reaction of incumbent firms High possibility o f ncw players from Asia area as tax reduction took eíĩect due to A F T A Tuming attention to domestic market of FD I enterprises Shiíìing between stratcgic groups Prooosed functional strateeies: Hxpansion o f high and medium bike segments in next five years Few main playcrs in cach bicycle segment Customers take interested in brand name, fashion, color and added valuc Strencths - s Good customer Service activities Outstanding Vietnamese engineer Product innovation W eaknesses - w Material control Operation, low quality o f painting Product diversiíìcation Brand-name Finn infrastructurc Procurement DiíTerentiation by customer serviccs (0 , T l , T3, T4, T ,T , S l ) Diíĩcrentiation by branding (0 , T l , T3, T4, T5, T6, W 4) Investment on research and development (S3, S4, W2, W3) Supplier network building ( W l, W6) Investment on machine and equipment (W 2, W5) 85 Five suggestcd functional strategies are differcntiation by customcr Service, diíĩerentiation by branding, investment on rcsearch and development, supplicr network building and investmcnt on machine and cquipment strategies Differentiation stratcgics by customer services and branding help V iet Long Company catch opporíunity No (customers take interestcd in brand name, fashion, color and addcd value) These strategies also hclp V iet Long Company avoid threats No 1, 3, 4, and with threats’ ID s presented In addition, differentiation strategy by customcr services helps V iet Long Com pany catch strcngth o f good customer Service activities V iet Long Company can offer customers wide-rango and distinct services as longer vvarranty pcriod and faster vvarranty activities Differentiation strategy by branding seems to be crucial to V iet Long Company bccause V ict Long Com pany is a weak brand name in the bicycle markct novvadays duc to bcing new DiíTercntiation stratcgy by branding íor V ic t Long Company might get high possibility to bc succccdcd becausc there are a few numbers o f main playcrs in V iet Nam b icycle industry Branding is also a w ay to build custom crs’ loyalty that helps V iet Long Com pany grow sustainable Strategy for investment on research and development helps V ict Long Company exploit strengths o f outstanding Vietnamese cngineers and product innovation In addition, it might help the company improve production a ctivilie s, painting quality and incrcase lcvcl o f product diversification The strategy for invcstm cnt on machine and cquipmcnt w ill hclp V iet Long Company get higher lcv cl o f automation, improve product quality and increase effectiveness o f operation process Hovvever, this stratcgy might need a big resource o f business budget In addition, invcstm cnt on machinc and equipment generally needs supports o f research and development activities because knowhow is still the most important factor that decidcs bicycle quality 86 The strategy for supplier nctvvork building helps V ict Long Com pany overcotne weaknesses o f material control V ict Long Company nowadays produces bicycle components as frame, axle, mayo and vvasher In addition, the company is getting low quality on painting Thereíore, the company currently has to buy íram e, w hich is the most important part o f the b ikc, from T aiw an suppliers in Binh Duong Province AU bike components, w hich are bought from suppliers, arc outsourcing These components are stamped V ict Long's logo on It is clearly that building supplicr netvvork is a crucial task o f the company 3.5.1 Implcmentation of differentiation by branding strategy S W O T analysis indicatcd íhat V iet Long Company should implement focus diíTercntiation strategy via branding and customcr services Customer services are considcred as a part o f branding strategy because customcr Service activities helps V iet Long Com pany to build company image and create intangible tie betvveen V iet Long brand name and the company targct customers In addition, special custom cr services arc the w ay for V iet Long Com pany to make diíTcrentiation in the V ict Nam bicycle market However, customer Service activities are easy lo be copied by competitors It is neccssary to launch branding strategy to achievc sustainable growth and dcvelopment íor V iet Long Com pany In order to implement successful branding strategy, the company should follow these stcps T h e fìr s t s te p - ldentifying esscntial product characteristics that target customcr desires: V iet Long Com pany íocuses on the youth in rural areas T h is group includcs pupils and students who are less than 23 ycars old T h e group consists o f stylist, fashion, and performance-oriented youth vvith strong impacted by brand name o f Products T h e group includes two sub-groups: boys and girls Boys seek speed and differcntiation style M eanw hile, girls seek com íbrt, safe and fashion style V iet Long Com pany should takc into account these things as indentifying essential product characteristics to serve target segmcnt 87 The second s te p - Sctting brand: In this stcp, the company can chosc and develop brand elcments There are many options for brand elements, including: brand namcs, logos and symbols, characters and slogans These elements should be chosen basing on criteria o f memo ability, m eaningíulness, lika b ility, transferability, adaptability and protect ability The brand name should reílect personality that it stands lor It should be unique, memorable and easy to pronounce The logo should be in corýunction with brand namc and tag line Logo with tagline is the primary dcscriptive id entiíicr for V ict Long Company Logo with taglinc should not only represent thc company but also make a statemcnt about w hy bikers should chose V iet Long bike The th ir d s te p - Devcloping and executing brand marketing programs: The company can chosc among advertising, sale promotion, public relation activities, sponsor or web-launch in order to develop brand markcting programs Advertising can be conduct through print advertising, tclcvision, city tours, Online gamcs or íorum s B u ttcríly, one kind o f print advcrtising, can bc sprcad ovcr targct higli schools and univcrsities Hoa Hoc T ro , Muc T im and Sinh Vien are spccial ncvvspapcrs for pupils and students Hoa Hoc T ro newspaper is popular to pupils in thc North M eanw hile, M uc T im nevvspaper is popular to pupils in the South V iet Long Com pany can use thesc ncvvspapers in order lo advertise its products Online gaine is cxpccted to bc one o f the most effective advcrlising tools to the youth by manuĩactures Numerous o f pupils and studcnts, event adults, both boys and g irls, nowadays are crazy about games as Audition, V o Lam Truyen K i, Con Duong T o Lu a and Boom H ow ever, channel o f advcrtising by Online game might necd large amount o f money Thereíore, V iet Long Company should think about th e trad e -o ff betw cen b e n e íìt and loss as c h o osing Online game as advertising tool 88 In addition, the youth is fam iliar to the Internet Therefore, forums and company website arc not only advertising method but also marketing channcl In addition, thc company can consider some other method as advcrtising on tclevision in the process to build brand marketing programs Sale promotion program could be launch in order to altract customers and cncouragc new purchase V iet Long can several special programs as discount, gift and longcr tune-up period In addition, it can offer coupons to customer in various typcs, including discount coupon and design coupon to serve speciíìc sub-groups o f pupil and students Public rclation: T V program, newspapers, Online communities can be V iet Long tools to conduct PR activities The company can donate to charity, scholarship and othcr social-oricntcd activities to promote PR Focusing on Ihe youth, trcnd-settcr might bc eíTective method to promote Products o f V ict Long Com pany Trcnd-setters usually are outstanding pupils or students in the school or a given community T h e y w ill havc great impact on iheir groups Thereíore, offcring hot boys and girls at schools to use the company bikes might rcsult o f numerous o f follow ers T h e fo r th s te p - Tcsting and rining the strategy: II is the íìnal step o f branding stratcgy The company should test and rìne the lcvel o f vvhich the target audiences arc awarc o f the company and its product It could bc measured by customer’ s survcy and salc volume 3.5.2 Implementation of differentiation by customer services strategy Customcr Service activities are provided by many bike manufacturers, both domestic and íoreign companies A s choosing customer Service activities to create different valuc from competitors and build up brand image in customers’ eyes, V iet Long Com pany should follow steps belovv 89 T h e fir s t s te p - Iđentifying customer Service activitics that thc company should oíTcr to custom crs: In the process o f indentifying c u sto m e r Service activities, V ict Long Company must ansvver following questions: what activities customer desire, what activities competitors has offered to customers and w haí activities the company can provide to customers Youth peoplc, especially boys, improve their bikcs after purchasing in order to make their bike become special as pasting picturc or designing on bike frame and changing spoke ỉn addition, most bikes are needed to mainlain periodically Therefore, thesc activities can bc valueadded services that V iet Long Com pany can o ffcr to its customers Freereplacemcnt to somc mistake components, which has applied by V ie t Long C o m p a n y for product o f axle, also can be consider as a cu sto m c r Service activity for product o f bicycle Table 3.8: Customer servicc activities o f industry main playcrs Customcr Service Activitỉes Bikc customi/ation Thong Nhát t: Asama V' ■ Martin 107 Others N2 N N N YVarranty policy • Maintenance N N N N • K ram c w a rra n ty Y Y Y Y/N • C om poncnt Y Y Y Y/N N N N N warranty • Krce-rcplaccment to mistakc componcnts Most existing playcrs apply frame and component warranty Thong Nhat, Asam a and Martin 107 companies nowadays only ofier warranty o f ycar for frame and year for several bike components H ow ever, no firm has offered customcrs services o f bike custom ization, maintenance and frce-replacement to ' Y rcfers to ycs, N rcfcrs to no 90 mistake components V iet Long Com pany can offer its custoiners thcse services crcatc diíTerentiation from ils competitors in addition, the company can dividc a particular Service to sub-services Fo r exam ple, m aintcnance m ighi includes scrvices o f tune-up, scheduled tune-ups, replacemcnt o f bearing surĩaces, repacking o f lubricants, rcpairs for flat tires, broken Chain, brake cablcs and installation o f accessories T h e s e c o n d s te p - Devcloping and implementing customer Service program: A s lìnishing the ĩirst step, the c o m pany should develop cu sto m e r Service program and customer Service policy for customers and agents Training for employees and agents is necessary bcfore launching the customer Service program T he th ir d s te p - M onitoring and cvaluating the customer Service activities: Thcre arc many people as employccs and agents might take participate in launching customer Service activities The cooperation among thcse people is crucial for the com pany’ s success Thcrcíị re, monitoring and cvaluating the program are needed Therc are some keys to successíul diíĩerentiation o f customcr services that Viet Long Com pany should consider The fư st, thc company has to gain understanding on its customers The second, the cotnpany should pick a combination o f differcntiation methods that truly sets V ict Long Com pany in the cyes o f customers The third, thc company should talk about its differentiation in terms o f cuslom er benefits The forth, the company should tell customcrs about difference oi'the company from others And Tinally, the company should keep its continuous differentiation by listening for idcas o f customcrs, requirements, nceds and com plaint 3.5.3 Supplier netvvork building strategy implementation Supply networks are composed of large number of bike-componcnt m anuiầcturers There are hundred components in a b icyclc V iet Long Company 91 can produce only scvcral components Consequcntly, supplicr network building is crucial for the company The stratcgy can bc implemented as following stcps T h e / Irst s íe p R evising current suppliers: The fírm ílrstly builds a list of - currcnt suppliers Current supplicrs should be classined according to products they provide as Steel, iron, coal, oil, íram e, paint, spoke, rim , wheel, etc Base on supplier list, the company can assess supplier network Ít should avoid bưying components from only onc supplier in order to reduce the dependence on a single company In addition, the ability o f each supplier should be calculated bascd on thcir product quality, location, price, and time to delivery, financial status and transaction cxpcrience At the end o f this slcp, thc company managers should dccidc which supplicr the company should change The s e c o n d s te p - B uilding potcntial supplier list: Base on result o f thc first step, thc company might crcate a list o f potential suppliers on particular component or m atcrial The selection o f ncw suppliers can base on criteria, including location, price, producl quality, lìnancial status, experience from working with othcr íìrm s and w illing ncss o f supplier to cooperate with the íìrm T h e th ir d s te p - Pilot order: Pilot order is thc third stcp vvith the purpose to chcck the capabilities o f partners A t the end o f the stcp, the relationship bctvveen thc firm and new supplier can be dcvelopcd or tcnninated The step o f selecting potential suppliers and pilot order might be redonc until when the company can choosc appropriate partners The fo r th s te p - Supplier management: Due to optim izing buycr-suppliers intcractions, supplicr management might bring many benìts to thc company such as cost reduction, reductions in đuplicated effort, shortcr lead-times, more customcr-focused supply chain and continuous improvemcnt on the contract In order to monitor thc rclationship with suppliers, the V ie l Long Company should understand suppliers via supplier study and supply market research o f business 92 p ro íìle , technology, manuíacturing capabilities, cost, pcrformance, motivation, history, dimensions, nichcs or íìnancial issues M oreover, the company should undcrstand the com plexity o f the supplier’ s market and supplier’ s íundamental drivcrs o f cost They might bc keys to nature o f the rclationship with the suppliers It might be explaincd that the supplier relationship should not bc depcndent on being able to influence cost 3.5.4 Investment on rcscarch and development strategy implementation Strategy for investmcnt on research and development (R & D ) could be done follow stcps below T h e / ìr s í s te p D ìning R & D activities: In this slcp, Viet Long Company - should crcate a list o f R & D activities it should in order to makc improvement for the company in the long-term In addition, the company should rank these activities The study on painting is ranked in thc íìrst priority among R & D activities Thự s e c o n d s te p - Planning for R & D activities: The most important issuc that the company has to consider in this stcp is to detcrmine thc size o f R & D budget rcquired to mect V ict Lo n g ’ s desire The costs o f R & D are expenscd in the year thcy are incurrcd Hovvever, the benìt o f that w ill be got in future years T y p ic a lly , R & D spending is identilìed as a perccntage o f sales In addition, the company should prepare human resourcc and time line for research and development activities T h e th ir d s te p - Launching R & D plan and pilot projects: The result o f R & D can be applied as pilot projects for mass production step by stcp Thcsc activities are costly and tim ely but crucial to the com pany’ s long-term dcvelopment T h e /o r th s te p - M onitoring and evaluation R & D activitics: A s other strategies, monitoring and evaluation R & D activities arc nceded Several R & D activities 93 can bc dclaycd i f thcy not bring any expected result The đecision is based on situation o f the company and opinion o f managers 3.5.5 Invcstment on machinc and cq uỉpm ent strategy implementation V ic t Long Com pany sliould create a list o f machine and equipment, w hich the company inlends to buy as in investing on research and dcvelopment Then priority setting o f machinc and equipment should be done Ít is followed by potential supplicr list building and supplier selection The selection process should basc on critcria, including price, product quality, level o f machine automation rcquircd input, capacity, technology transfer, paymcnt term, time to d elive ry, or expcrience o f suppliers from w orking vvith othcrs 94 C O N C L U S IO N Regarding o f thc maturity and ữagmentation o f V iet Nam b icyclc industry, V iet Long Com pany decidcd to enter new business through internal devclopment w ith the mission to become one o f the main industry players w ithin fiv c years It could be a d ifficu!t targel for V iet Long Com pany H o w cver, thc study indicates that there are opportunitics for V iet Long Com pany to entcr the market due to expansion o f high and miđ-quality bike instead o f low quality bike in thc past The study gocs through steps o f scanning extem al and intemal environm ent with P E S T and five forccs analysis, value chain and industry b icycle m odels, íìguring out the company’ s opportunitics, threats, strengths and w eaknesscs Beside opportunities, V ict Long Com pany has to cope with fragmcntation o f bicycle industry, cxpcctcd reaction o f existing firm s and thrcats o f shifting between groups o f existing playcrs Against main playcrs, the company has advanlages o f good custom er Service activities, outstanding Victnam ese engineer and prođucl innovation Hovvever, V iet Long Com pany is not strong on m aterial control, operation, product diversification, brand-name, firm inírastructure and procurement The rcsearch indicates thc most appropriate busincss strategy to V ie t Long is focus diíTcrentiation stratcgy The targct segment should bc m cdium quality bicycles segment The targct customer group should be the youth in rural arcas The study draws out fiv c functional strategies those might assist choscn business strategy and hclp the company increase com petitiveness These strategies arc strategies for diiTerentiation by branding, differentiation by custom er scrvices, supplier network building, invcstm ent investment on machine and equipment A on research and investm ent, and Appendix A: Importcd tax ratc to bike and componcnts Tax Rate Unit of H eading Code Description C om - C ept mon Q uantity R ate MFN Bicycỉes and other cycỉes (including deỉivery 87.12 Iricycles), noi motorized 8712 00 10 00 8712 00 20 00 Unit 7.5 Unit Racing bikc 66 99 Bicyclcs designed to bc riddcn by childrcn 8712 00 30 00 Othcr bicyclcs Unit 66 99 8712 00 90 00 Othcr Unit 66 99 Unit 0 Kg 45 67.5 Kg 41 61.5 Kg 45 67.5 Kg 41 61.5 Kg 45 67.5 Carriages fo r disabled persons, whether or not 87.13 motorized or olherwi.se mechanicaìly pmpeỉìer Parts and accessorìes ịf vehicles tìfhcading 87.1! 87.14 to 87.13 8714 Hrames and forks, and 91 parts thcreof: For bicyclcs o f 8714 91 8714 91 8714 92 00 92 8714 10 90 00 8712.00.20 Othcr Whccl rims and spokes For bicycles o f 10 00 8712.00.20 8714 92 90 00 Othcr Hubs, other than coastcr 8714 braking hubs and hub 93 brakes, and frec-wheel spockct - vvhecls 8714 93 10 00 For bicyclcs o f B Tax R ate n it of Heading Code D escríptíon Q uantity Com MFN C ept mon Rate 8712.00.20 8714 93 90 00 Othcr Kg 45 67.5 Kg 43 64.5 Kg 43 64.5 Kg 45 67.5 Kg 45 67.5 Kg 45 67.5 Othcr Kg 45 67.5 Othcr Kg 45 67.5 Brakcs, including coastcr 8714 94 braking hubs and hub brakcs and parts thcrcof: For bicyclcs o f 8714 94 10 00 8714 94 90 00 8714 95 8714 95 10 00 8714 95 90 00 8714 96 8712.00.20 Othcr Saddlcs Kor bicyclcs of 8712.00.20 Olhcr Pcdals and crank - gcar and parts Por bicyclcs of 8714 96 10 8714 96 90 8714 99 00 00 8712.00.20 Source: Viet Nam Cusloms c Appendix B: List of intcrvicvvecs Nguycn Van Binh, ffic e r , V ie l Nam B ik c and M otorbike Association Mai (M r.), O fficer, V iet Nam B ik e and Motorbike Association; cum V ice Director, Thong Nhat B icy cle Com pany; cum Technical A d viso r, V iet Long Com pany Lim ited Nguycn Thu H icn, Head o f Administration and Accounting, V iet Long Company Lim ited Tran Lam Ho, Director, Viet Long Company Lim ited Nguycn Van Hoa, Head o f Tempering Team , Engineering Department, Viet Long Com pany Lim ited Nguyen Van Lin h , Head o f Dcsign, Engineering Department, V ict Long Company Limited Nguyen T h i Thuoc, V ic c Director o f Business, V iet Long Com pany Lim ited Pham Quang Truong, V ic c Director o f cnginccring, V ic t Long Company Lim tcd Ngo Xuan Sang, Salc Agency for Asama B icy c le D R EFEREN CES Farhad Analoui and Azhdar Karam i, Strategic Management in Sm all and M edium Enterprises, Thom son, 2003 Llo y d L B ya rs, L e slie w Rue, and Shaker A Zahra, Strategic Management, Irvvin Press, U S A , 1996 Jim C o llin s and Jc rry I Porras, B u iit to last - Successful habits o f visionary companies, 1994 Sharon Nelton, “ Put your purpose in \vriting” , N ation’s busincss, Pebruary, 1994 Y in , R K (2003), “ Case study research: design and methods” , 3rd E d , Sagc Publication, Thousand O aks, C A M ichael E Porter, Com petitive Strategy: Techniques for A nalyzing Industry and Com petitors, the Free Press, U S A , 1980 Philip H Thurston, “ Should sm aller companies makc ĩorinal plans” , Harvard Business R evie w , September - October 1983, p 183 Th e W orld Trade Organization, “ A b rie f report on B icy cle s and Motorbikes for thc Poor and Trade Liberalization in Vietnam ” , 2001 Rcport o f the study on transport master plan and ĩeasib ility study in H C M C Metropolitan A rca (Houstrans) Projcct, 2005 V u Ọuang V ie t, “ T h e đevelopment o f population, and pupil in Vietnam ” , The N ew A g e, March 2008 Internet The M in istry o f Finance: w w w m of.g ov.vn The M in istry o f Foreign A ffa irs : w w w m ofa.gov.vn The M in istry o f Statistics: w w w aso.g ov.vn The M in istry o f Training and Education: w w w m oet.gov.vn E ... Competitive strength assessmenl for Vict Long Co Ltd 74 Table 3.4: Strenglh and weaknesses ofViel Long Company 77 Table 3.5: SWOT Model ofViet Long Company Limited 78 Table 3.6: Advantage and disadvantage... casc of Viet Long Table 3.7: Kunction stralcgies for Viet Long Company 85 Tablc 3.8: Customer Service activities of industry main players 90 xii LIST O F CIIARTS Chart 2.1: Export value of Viet. .. in building business slrategy for enterprises s Secondly, applying theorics into Viet Long Company to fígure ouí thc company opportunities, threats, strengths and wcaknesses Then Viet Long business