Developing the competitive strategy for thien hoa’s supermarket system on a retail market of the electronic and electrical appliances in Hochiminh city

Capstone Project Report GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION CAPSTONE PROJECT REPORT DEVELOPING THE COMPETITIVE STRATEGY FOR THIEN HOA’S SUPERMARKET SYSTEM ON A RETAIL MARKET OF THE ELECTRONIC AND ELECTRICAL APPLIANCES IN HOCHIMINH CITY Group number : Student’s name : PHAM MAI LONG HUYNH THI BICH LAN PHAM PHUONG MAI NGUYEN THANH THAO HOCHIMINH CITY, JANUARY 2013 GaMBA01.C0111 – Group Capstone Project Report ACKNOWLEDGEMENTS Firstly we would like to thank you see, there are those who have to teach, impart useful knowledge to us in the past Thanks for the Teachers in the consultancy team and the sisters work in Thien Hoa comments and create favorable conditions so that we can complete your thesis Finally we would like to express my gratitude to the teacher guide: Dr Hoang Lam Tinh dedicated to guide and help us in the process of completing this thesis Dear wishes for good health and work to our teacher and Brothers and Sisters GaMBA01.C0111 – Group Capstone Project Report INDEX ACKNOWLEDGEMENTS TABLE OF CONTENTS LIST OF TABLE IN APPENDIX LIST OF PICTURES & CHART PREFACE 1 Context, the need and importance of the research topic The purpose of research and application capabilities Object and scope of the study Research methodology: Structure of the research topic INTRODUCTION CHAPTER 1: THEORETICAL BASIS OF STRATEGIC MANAGEMENT AND COMPETITIVE STRATERGY 1.1 Strategic management 1.1.1 The concept of strategic management 1.1.2 The strategic levels 1.1.3 Strategic management process: 1.1.4 The role of strategic management: 1.2 Competitive Strategy: 1.2.1 The concept of competition: 1.2.2 The view of competitive strategy 1.2.2.1 The period 1950 - 1970 : Ansoft's market development point 1.2.2.2 The period 1980 -2000 : Michael Porter‟s views on competition 1.2.2.3 The period 2000 to the present: Opinions of W.ChanKim & Renee Mauborgne for “Blue ocean” strategy 1.2.2.4 Competitive characteristics of intergration 1.2.3.The types of competition 1.2.4 Competitive advantage and the origin of competitive advantage GaMBA01.C0111 – Group Capstone Project Report 1.2.5 Core competencies 10 1.2.6 Value chain 10 1.2.7.Model Michael Porter‟s five competitive pressure 11 1.2.8.Specific competitive strategy point of Michael Porter 11 1.2.8.1 Cost leadership strategy 11 1.2.8.2 Service/product differentiation strategy 11 1.2.8.3 The focus Strategy 11 1.3 Set up the strategy 12 1.3.1 Analysis of the external environment 12 1.3.1.1 Macro environment 12 1.3.1.2 Micro environment 12 1.3.1.3 External factor evaluation matrix 13 1.3.1.4.Competative Picture matrix 13 1.3.2 Analysis of the internal environment 13 1.3.2.1 Internal environment 13 1.3.2.2 Internal factor evaluation matrix 14 1.3.3 Conjoint analysis to strategy: 14 1.3.3.1 SWOT matrix 14 1.3.3.2 The strategic position and action evaluation matrix (SPACE) 14 1.3.4 Quantitative Strategic Planning Matrix (QSPM): 15 1.3.5 Goal setting to implement the strategy 15 CHAPTER REALITY OF COMPETITIVE STRATEGY IN THIEN HOA SUPERMARKET SYSTEM IN HOCHIMINH CITY 17 2.1 Introduce the company: 17 2.1.1 Company overview 17 2.1.1.1 Overview 17 2.1.1.2 The achievements 18 2.1.2 Vision and mission 18 2.1.2.1 Vision 18 2.2.2.2 Mission 18 GaMBA01.C0111 – Group Capstone Project Report 2.1.3 Business scope: 19 2.1.4 Company‟s culture 19 2.1.5 Chart of company organization: 20 2.1.6 Bussiness situation and the financial ratios of the company: 20 2.1.6.1 Result of the bussiness 21 2.1.6.2 The financial ratios of the company 22 2.2.Evaluate the effect of external environment to business of ThienHoa supermarket system 24 2.2.1 Macro environment 24 2.2.1.1 Economic environment 24 2.2.1.2 Political and legal environment 29 2.2.1.3 Socio – cultural environment 30 2.2.1.4 Natural environment 31 2.2.1.5 Science and technology environment 33 2.2.2 Micro environment – Evaluation of competitive pressure in the point of view of M.Porter 34 2.2.2.1 Competitor 34 2.2.2.2 The replacing products and services 41 2.2.2.3 The bargaining power of suppliers 42 2.2.2.4 The bargaining power of customers 42 2.2.3 External Factor evaluation Matrix (EFE) 44 2.2.4 Competitive Picture Matrix (CPM) 46 2.3 Analysis of competitive advantages of ThienHoa electronics : 47 2.3.1 Value chain analysis 47 2.3.1.1 Main activities 47 2.3.1.2 Supporting Activities 54 2.3.1.3 Marginal profit of Thien Hoa 57 2.3.2 Analysis the impact of the factor 58 2.3.3 Internal factor evaluation matrix (IFE) 59 2.4 SWOT matrix analysis: 60 GaMBA01.C0111 – Group Capstone Project Report CHAPTER BUILDING COMPETITIVE STRATEGY AND SOLUTION TO IMPLEMENT THE COMPETITIVE STRATEGY 62 3.1 The strategical object of Thien Hoa supermarket system to 2015 and vision to 2020 62 3.1.1 The objective of Thien Hoa supermarket to 2020 62 3.1.2 The specific objectives period 2012 to 2015 62 3.1.2.1 Expanded sales channel system 62 3.1.2.2 Restructure and improve the human resources 63 3.1.2.3 Investment management system with professional application software 63 3.1.2.4 Conducting Equitization company 63 3.1.2.5 Maintain the first position in the 500 largest companies in Viet Nam 64 3.1.3 The spcific objectives from 2016 to 2020 64 3.1.4 Competitive objectives of ThienHoa electronic supermarket system 64 3.2 Combined analysis to achieved the feasible strategies 67 3.2.1 Combine factor of SWOT matrix – Strategic Plan 67 3.2.2 Analyse the SPACE Matrix 68 3.3 Decision the competitive strategies 69 3.3.1 Analyse the Quantitative Strategy Planning Matrix (QSPM) 69 3.3.1.1 Group SO 69 3.3.1.2 Group ST: 71 3.3.1.3 Group WT 72 3.3.2 Decision the feasible strategy 72 3.4 Strategic maps for Thien Hoa sellected strategic groups 74 3.5 Solutions, policies to implement the strategy and implementation roadmap 76 3.5.1 Solutions and policies to implement the strategy 76 3.5.2 The route to implement strategies 85 CONCLUSION 88 REFERENCES 90 APPENDICES GaMBA01.C0111 – Group Capstone Project Report LIST OF TABLE IN APPENDIX Table 1.1 Strategic Management process Table 1.2 Model in competitive pressure in view of Michael Porter Table 1.3 The external factors evaluation matrix contruction steps (EFE) Table 1.4 Competitive picture Matrix contruction step (CPM) Table 1.5 The internal factors evaluation matrix contruction steps (IFE) Table 1.6 SWOT matrix Table 1.7 Steps of quantitative strategic planning matrix (QSPM) Table 2.1 Business situation of Thien Hoa company over the years Table 3.1 Combined the S-O-W-T in SWOT Mattrix Table 3.2 Strategic position and action evaluation matrix (SPACE) GaMBA01.C0111 – Group Capstone Project Report LIST OF TABLES, FIGURES AND CHARTS Number of table Name of table Page 2.1 The financial ratios of Thien Hoa supermarket system 23 2.2 Gross domestic product of VietNam (GDP) 24 2.3 The external factor evaluation matrix (EFE) 45 2.4 The competitive pictures matrix (CPM) 46 2.5 Point of the main competitors in CPM 47 2.6 The internal factor evaluation matrix (IFE) 59 2.7 SWOT Matrix 60 3.1 Strategic plan for Thien Hoa 67 3.2 Score of criteria in SPACE matrix 68 3.3 Group S-O strategic 69 3.4 Group S-T strategic 71 3.5 Group W-T strategic 72 3.6 The route to implement strategy 86 Number of figure Name of figure Page 2.1 Revenue & COGS 21 2.2 Net profit 22 2.3 Diagram of consumer price index to October, 2012 26 2.4 Growth of credit 28 2.5 Compered the competitor in Hochiminh city 40 2.6 Chart of Market estimation 2013 – TV series 43 2.7 Chart of Market estimation 2013 – product family 43 applications 2.8 Chart of Market estimation 2013 – tech product 44 2.9 Chart of advertising and promotion budget of T.Hoa 50 GaMBA01.C0111 – Group Capstone Project Report 2.10 Market share of Thien Hoa supermarket system in 52 Hochiminh city 2.11 Model of Call Center 54 3.1 Speed of develop of Thien Hoa electronics 66 supermarket system (2002 – 2011) Number of charts Name of chart Page 3.1 Strategic map for Thien Hoa strategy of service differentiation in HCM city Strategic map for Thien Hoa strategy of 74 3.2 75 marketshare maintain & stability in HCM city 3.3 Strategic map for Thien Hoa strategy of diverse distribution channels in HCM city 76 GaMBA01.C0111 – Group Capstone Project Report PREFACE Context, the need and importance of the research: In the context of electronic supermarket chains in Ho Chi Minh City facing the challenges of the major competitors in the future, the creation of the own competitive advantages for their satisfactory business and marketing strategies is an opportunity to the company existance and development The competition in the field of the electronic supermarkets are quite sharply during the current tough economic time, and it will actually be the toughest time of screening the market competitors and the most important are the direction, way of doing business, market entry, however, the long-term strategy will decide who goes and who is in In Ho Chi Minh City are now 4-5 brands of the electronic supermarket chain with the well-known names which own the beautiful ground places in a prime location in the center as Thien Hoa, Nguyen Kim, Cho Lon, Phan Khang, Idea and the market would be very difficult to have a place for those new enterprises without the specific strategic orientation with the differentiation and catch in front In a past time, the electronic supermarket chains in Ho Chi Minh City are scrambling to promotions with a total of a large value on the occasion of New Year and date of the event Besides, customers also continued to receive other great promotions though not for special occasions, can say that the promotion is becoming "fashionable" continuously applied in order to attract customers, expand market share Does not stop attacks promotions that enterprises "killing" each other mercilessly in the market and the bankruptcy of the supermarket recently, the electronics supermarkets account for the overwhelming number For many reasons, but to see that the "way" continuous dumping to destroy opponents is an important reason, supermarkets continuous dumping offering low to no profit or even losses to attract customers Can be found easily race through price promotions discounts fierce place and its consequences is the enterprise 'killing" each other, weaken each Page GaMBA01.C0111 – Group ... situation in the retail market in Ho Chi Minh City  Determine the status and position of of Thien Hoa supermarkets in the retail market in Ho Chi Minh City  Analysis of factors affecting the retail. .. differentiation and catch in front In a past time, the electronic supermarket chains in Ho Chi Minh City are scrambling to promotions with a total of a large value on the occasion of New Year and date of the. .. supermarket chains in Ho Chi Minh City facing the challenges of the major competitors in the future, the creation of the own competitive advantages for their satisfactory business and marketing