Improvement the business strategic efficiency of saigon mart supermarket chain

Selection the theme Improvement business strategic efficiency of Saigon Mart supermarket chain” aims to: 1.Analyze the impacts of business environment over the operation of supermarket business. 2.Be aware of opportunities and challenges, the strength and weakness of the company. From these findings, necessary business methods will be proposed to increase the efficiency of business strategies of the Company

THESIS "Improvement the business strategic efficiency of Saigon Mart supermarket chain" TABLE OF CONTENTS FINAL ASSIGNMENT EXERCISES OF STRATEGIC MANAGEMENT PREFACE I REASONS FOR TOPIC SELECTION II Research objectives III Research methodology IV Research scope CHAPTER : THEORETICAL BASIS 1.1 What is strategic business management? 1.1.1 Overview about management 1.1.2 Definition of strategy 1.1.3 Definition of business 10 1.1.4 Strategic business management 10 1.1.5 Pros and cons of strategic business management 11 1.2 Influential factors to strategic business management 12 1.2.1 Company’s business environment 12 1.2.1.1 Macro environment of a business 12 1.2.1.2 Macro economic environment 13 1.2.1.3 Operating environment 14 1.2.1.4 Internal situation of a business 17 1.2.2 Identifying functions, mission and objectives of strategy 18 1.2.2.1 Identifying functions 18 1.2.2.2 Identifying mission 19 1.2.2.3 Identifying objectives 19 CHAPTER : FACTORS INFLUENCING ON THE BUSINESS OPERATONE OF SAIGON MAR 21 2.1 Overview about system of Saigon Mart supermarket…………….……21 2.1.1 History of establishment and development 21 2.2 Organizational structure 21 2.2 Factors influencing on the business operation of Saigon Mart 36 2.2.1 General Development objectives and orientation of the company 36 2.2.2 Overview about socio-economic situation of Vinh Yen city - Vinh Phuc province 36 2.2.3 Competitiveness assessment 44 2.2.4 Study on characteristics and demands of customers 52 2.2.5 Analysis of internal operation of the company 53 2.2.5.1 Analysis of prestige and infrastructure 55 2.2.5.2 Financial factors 56 2.2.5.3 Marketing activities 56 2.2.5.3.1 Assessment of product factor 57 2.2.5.3.2 Assessment of distribution network 59 2.2.5.4 Assessment of human resources 60 2.2.5.5 Assessment on information and technology 63 CHAPTER : STRATEGIC SOLUTION TO IMPROVE EFFECTIVENESS OF BUSINESS ACTIVITIES OF SAIGON MART SYSTEM IV 66 3.1 Optional measures 66 3.1.1 SWOT analysis 66 3.1.2 SPACE Matrix analysis method - Matrix of strategic position and activity evaluation 69 3.1.3 Main strategic matrix analysis technique 70 3.2 QSPM Matrix- Choosing feasible strategies 71 RECOMMENDATIONS AND CONCLUSION 73 I Conclusion 73 II Recommendations 76 PREFACE I REASONS FOR TOPIC SELECTION: Vietnamese supermarket chains have been developed and diversified for recent years with the participation of many enterprises State-owned-Enterprises include supermarkets such as: Hapro, Fivimart, Joint Stock Enterprises include: Citimart, Saigoncoop mart, Vinatexmart, Joint Venture and 100% foreign capital enterprises include BicC, Mertro … Besides, many supermarket chains such as Wallmart…are putting their eyes on Vietnamese market, which create favorable environments for supermarket business development in the international integration tendency In such integration tendency, the business strategies have been playing a more and more important role for the existence and development of any enterprise, including supermarket business enterprises Firstly, the business strategy fosters enterprises to identify their own purposes and guidance; those are the foundation and guideline for all enterprises’ activities Successively, in the variable and rapidly developing business environment, the business strategies will facilitate to catch up and optimize the business opportunities simultaneously, find the solution actively and come over the dangers and perils in competitive markets Furthermore, the business strategies also contribute to advance the resource utilization efficiency and enforce competitive position ensuring the continuous and sustainable development of enterprises Finally, the construction and execution of the business strategy also create sustainable bases to propose policy and rational decisions in line with the ups and downs of the market The actual operation of retail industry shown that, if the enterprises adopt the right business strategy, with broad vision, action thought creation, towards the specific strategic objectives, those enterprises are able to exist and succeed in competition today, on the contrary, those will strand a hard stage, non-efficient operations or go to bankruptcy Therefore, the core issues of enterprises are to give orientation of long-term development through sound business strategies which is set up suitably with current context and adapted to capacity, position of each enterprise in such variable market with more and more server and exciting completion Those are the reasons to select the theme “Improvement business strategic efficiency of Saigon Mart supermarket chain” II Research objectives: Selection the theme Improvement business strategic efficiency of Saigon Mart supermarket chain” aims to: Analyze the impacts of business environment over the operation of supermarket business Be aware of opportunities and challenges, the strength and weakness of the company From these findings, necessary business methods will be proposed to increase the efficiency of business strategies of the Company III Research methodology: The research of this theme is conducted with following methods: Step 1: Collect the data through:  Documents of the researched location (Saigon Mart supermarket)  Reference to the relating documents  Actual observation at the researched location  Or interview directly managers of the researched location Step 2: Analyze the collected data with some of following methods: - Comparative and synthetic methods: compare among different periods of the year then come to conclusions - Inductive method: method that goes from small details to the general conclusion - SWOT analysis method: is the technique to analyze and process the research results on business environment, basing on which a scientific and suitable strategy will be proposed to the enterprise SWOT can show a connection for each couple of factors perfectly or the connection among factors Those connections will help the Enterprise to form the strategies efficiently in order to make full use of outside opportunities, reduce or avoid threats, on the base to optimize the strengths and overcome the weaknesses The connection between SWOT expressed as the below chart: S : Strengths W: Weaknesses O : Opportunities T : Threats  Analysis method by SPACE Matrix (strategic position matrix and activity evaluation): This method shows whether the strategy of attack, discretion, deference or competition is the most adaptable to one organization Accordingly, FS is Financial Strength, CA is Comparative Advantages, ES is Environment Stability and IS is Industry Strength Official strategic matrix method: is also a popular tool to form optional strategies Official strategic matrix is based on aspects to evaluate: competitive position and the market growth Matrix consists of quadrants: The Quadrant I indicates the best strategic position, Quadrant II indicates the necessity to evaluate carefully the current measures for the market, the Quadrant III indicates competition among the low-growth-industries and weak competitive position, and Quadrant IV indicates that Enterprises is at the strong competitive position but lying in the low-growth level industries FS +6 +5 +4 +3 Careful +2 Attack +1 CA -6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6 IS -1 -2 Defense -3 Competitive -4 -5 -6 ES Chart 1.1  Analysis method by QSPM Matrix (Strategic planning Matrix can quantify): This analysis technique will express objectively which the best alternative strategies are QSPM Matrix adopts the input data owing to analysis from EFE matrix, competitive image matrix, IFE matrix Then, receiving the necessary information to set up QSPM matrix from SWOT matrix, SPACE matrix,… IV Research scope: This theme is only studied Sai Gon Supermarket Mart chain Specifically, the research is conducted basing on the figure base, practical situation of the Saigon Mart supermarket, because, currently each Saigon Mart supermarket is under management of a separate company Researches and current figures are only the general data of researched location When this report is accomplished, this chain can be merged into Sai Gon Supermarket Mart Joint Stock Company to complete Southwest Saigon supermarket chain The given solutions in this theme only mentions to current Saigon Supermarket Mart system CHAPTER : THEORETICAL BASIS 1.1 What is strategic business management? 1.1.1 Overview about management: Management is a process to attain desired objectives by cooperating resources of an enterprise effectively From this concept, it can be referred that management is necessary and continuous activity for existence and development of every organization An objective of management is to produce surplus value, i.e to find suitable method to perform tasks the most effectively at the best cost Therefore, the reason for the existence of management is the desire for effectiveness and only when people concern about effectiveness, they concern about management In other word, management in business is a process of planning, organizing cooperation and controlling activities of members, departments and functions of business to mobilize maximum resources in order to achieve preset objectives of organization Hence, management includes four basic functions: planning, organizing, leading (directing), and controlling business process The tight relationship of these functions is shown in the following diagram: PLANNING Set-up objectives and define the best way to carry out these objectives SUPERVISION Inspect and evaluate the activities to obtain the targets ORGANIZATION Allocate determine, and arrange of human resources LEADERSHIP Influence on other people, work together towards the targets of the organizations Chart 1.2 Besides, decision making process contain the following steps: Step 1: Analyzing problem specifically, finding the nature of that problem Step 2: Set up possible approaches Step 3: Compare and select the most feasible approach Step 4: Select the most optimal approach Step 5: Implement selected approach Step 6: Evaluate the implementation of that approach 1.1.2 Definition of strategy: Strategy consists of objectives and policies which are set up in long term on the basis of exploring maximum resources of an organization to obtain development objectives Therefore, a strategy should be in form of a plan or general action diagram directing a company to expected objectives A strategy should include the following factors simultaneously: - A strategy has to be drafted in relatively long term - A strategy has to create development for an organization - A strategy has to explore maximum resources and use current resources effectively After drafting appropriate strategy, it is a must to transfer it into policies, action plans to reach preset objectives via an effective organizational structure Features of strategy implementation are: o All managers are participants of strategy implementation within their scope of power and responsibilities, executors are participants who work under managers’ direction o Strategy execution is considered to be successful when a business achieves its objectives and makes progress in striving for advantages and power in comparison with competitors and predetermined mission o Strategy execution is a combining process between scientific and artistic features of management 1.1.3 Definition of business: According to Article 9, Company Law of Vietnam, issued on February 2nd 2009, “Business is to implement all steps of process of investment into production, product consumption or deliver services on market to gain benefit” As a result, it is possible to understand that: Business includes activities to gain benefits of enterprises on market 1.1.4 Strategic business management: Strategic business management is a process in which managers define long- term objectives and directive approaches to attain objectives on the basis of using the maximum of current resources and resources which are possible to mobilize Specifically, strategic management is a process researching current as well as future environment, planning objectives of a company, drafting, implementing and controlling decision implementation to achieve those objectives in current as well as future environment The aim of one strategy is to search opportunities, in other words, to increase opportunities and grow up to a competitive position Hence, strategic management is a process including three main stages: - Stage of planning and setting strategy - Stage of executing strategy - Stage of controlling strategy To set up a suitable and effective strategy, it is essential to take into accounts influential factors such as: strengths, weaknesses of business, opportunities and threats from external environment, mission and objectives of business 10 customers and to create embarrassment for the customer, caused many unfavorable affects on the performance and reputation of the company From here, one matter of concern is the human resource training For Saigon Mart systems, personnel training are the foundation of development And in recent years companies have tried to create conditions for many staff to improve their expertise to serve client effectively Specifically, 20 staff are trained in training centers of Indochina on business management, marketing, sales, and in which 10% graduated Annually, the company creates favorable conditions for staff to study and improve their professionalism In addition, the company also organizes training courses focused on professional skills for cadres such as on-site training courses and advanced training Also, being aware of the importance of education level, qualification, and to follow the development of the new period, staff of the company also self-training, learning more about English and computing Presently, almost all staff of Saigon Mart can use fluently Microsoft office And by the end of 2008, the company has 61 staff achieved certification of foreign language, accounting for nearly 50% of the total workforce of the company Foreign language university accounts for 20 officers, reaching the level of Upper Intermediate is 31, and Intermediate is 10 Staff Saigon Supermarket Mart has high qualification for foreign languages because the Supermarket is located near the border of China, the number of Chinese customers comes and visit the supermarket is rather high Most of Chinese products are domestic, poor quality, poor design Supermarkets in our country are rich in type, variety of models, and there are many imported goods from Western countries with very good quality To improve the capacity and working spirit of staff, the company has good use of salary, allowance According to business results in years of Saigon Mart, the company has been operating effectively and stably in the last years with average growth Therefore, the company has to maintain steady income for staff through the years Being a business, working and enjoying benefit is based on their capacity, beside the monthly salary and allowances, staff also received bonus for their performance at the end of the fiscal year This bonus is decided by directors of member companies This is the bonus for staff depending on their working effectiveness, working spirit and responsibility And it is also the motivation to promote staff to be more active in the work and tasks for the development goals of the company 62 In addition, to ensure smooth operation of the company, the management activities of the Director of factors is extremely important Management is always a difficult task, because the company directors are aware that the retail business is a competitive business, requires the administrator have deep knowledge and broader vision, ability to analysis and prediction of the situation, understanding practical work in enterprises, from which to give solutions and implementation in the context of open markets and fierce competition today Therefore, the Board of Directors of Saigon Mart system should improve their managerial capacity which is top priority, and to implement good management, it is necessary to clear assignment At the same time, to ensure democracy at work, each year the company should organize staff conferences to report on the business, take care of staff’s life, determine for coming business activities Saigon Mart is a supermarket relatively early new compared with supermarkets in the northeastern region and has the advantage of the expertise and experience in provinces However, the current competitors is also developing rapidly, so companies need to pay attention more in the training of knowledge and expertise to the workforce in the company especially for young generation since retail business requires a dynamic and flexible as well as qualification and experience 2.2.5.5 Assessment on information and technology: Currently, Saigon Mart system is well-equipped with computer system; information between departments is exchanged through the network of computers In addition the company used the Internet system to update information from outside sources The storage of data on general operations of the company are stored and processed on the system through the accounting software, specialized software Now Saigon Mart is using software which is one of the most modern in Supermarkets industry in Vietnam This software is used in most of the large supermarkets system in Vietnam (such as BicC, CitiMart ) Information system will be used by the Director board as source data to draw out the policy and strategic activities in various periods The use of computer systems has made the management easier and more scientific Being aware of the important role of information technology, Saigon Mart has soon driven the practical steps and tools in the management So far all the member companies of the Saigon Mart are equipped with networks of computers At the 63 beginning of 2009 Saigon Mart and An Thinh company (Saigon) contracted for the implementation of phase "Program Management for Supermarket system connection" with the center in Vinh City Yen - Vinh Phuc In recent years, Saigon Mart has applied many management and accounting software, business management, human resources in the company, targeting to meet the most work and still save time and manpower However, because the Saigon Mart system has not established the unified system of supermarkets members, thus the application of modern information system is still not in sync, the level of implementation is uneven because of the following reasons: - The management software is not suitable to users and not practical enough The programmer of the software does not have intensive knowledgeable about the business of supermarkets, so have to edit many times leading increases in the cost and insecure for users - Knowledge on information technology of Cadres and Staffs of Saigon Mart is currently not strong enough And many officers are afraid to switch to new management measures In the future Saigon Mart will focus on setting up data centers in Vinh Phuc, according to the field of activities, individual business lines, each distribution model (wholesale and retail) and other activities To apply information technology at levels (level 1: system level, level 2: member level, level 3: user level) to the management of supply and provision of goods modernization, management against loss, operating through the online network, signed a contract, three-party contract (supplier-banks-supermarkets) In addition the company plans to build a model of payment through POS machines using debit cards of all banks nationwide, shopping online to speed up their transactions, reduce business costs, increase efficiency and gradually expanded services for the customer who is afraid of shopping From assessment and analysis of the general internal situation of system of Saigon Mart, we summarize the table as follows: 64 Table 2.9: MATRIX OF INTERNAL FACTORS Internal factors Importance Classifica Important level tion mark Financial potential 0,06 0,18 Prestige, trade mark 0,08 0,24 Level of customer’s satisfactory 0,11 0,33 Income-oriented expense level and payment ability of the residents 0,12 0,48 Flexible, quick payment profession 0,11 0,22 Service on consulting and guiding customers in selecting products 0,04 0,04 Broad and powerful distribution system 0,10 0,30 Effect of advertisement and propaganda activities 0,07 0,21 Contingent of active and friendly shop assistants 0,09 0,18 Contingent of qualified, experienced and professional staffs 0,09 0,27 Management ability 0,08 0,24 Informatics development in management 0,06 0,12 Total 2.79 Source “Company’s material” Table shows that the important points total is 2.79 which means that Saigon Mart is internal positions of higher than average This makes sales of Saigon Mart increase from 25.21 billion in 2006 to 32.87 billion in 2007 and 45.42 billion in 2008 and the actual profit in 2008 also increased more than double compared with the year 2006 So to have higher internal positions (total points reach more than 3), the company must take measures to speed up response capabilities of the company with the strengths, weaknesses such as: To adapt to the income level and payment ability of different customers Saigon Mart may apply low-cost strategy and flexible price for each market, attracting customers so this is considered as strengths of the company Or not have consulting system to guide customers to choose products to customers which make customer feel difficult to select suitable products to their needs and their ability; this might be a key factor to loose customers in the future 65 CHAPTER : STRATEGIC SOLUTION TO IMPROVE EFFECTIVENESS OF BUSINESS ACTIVITIES OF SAIGON MART SYSTEM In part 2, business situation of the company has been mentioned and analyzed and other factors have been taken into This is also the first stage of establishing general strategy, at this stage, basic and necessary information for strategy establishment has been summarized Part will deal with rearranging this information to offer feasible strategies Critical tools to use are SWOT, SPACE, main strategy matrixes and QSPM matrix 3.1 Optional measures: 3.1.1 SWOT analysis: a) Strengths, weakness, opportunities, and threats of Saigon Mart system: Opportunities: - Vinh Yen city is the gateway to the northeastern provinces and next to Hanoi capital, - Lao Cai is the city meets the conditions for development such as: The city has international border gate with China, an area famous tourist area - Sapa, rich mineral resources (apatit, copper, iron, Crom, ) - Ha Giang is the city bordering with China and has many tourist attractions, the mineral resources (iron, copper ), enjoy many incentives from the state budget - Yen Bai City is the connection of market system members with Thac Ba tourist area, mineral resources, precious stones in Luc Yen, O Long specialty tea, Luc Yen orange, precious stone picture, - Income per capita of the provinces are increasing year after year, so to ensure the necessary needs in life and paying attention to others including shopping, relaxing and entertainment - Increasing literacy results in the increasing awareness of quality goods and services in the residential area - Being supported by government agencies and local government departments (tax, market management, the Department of Health, ) - Many customers are loyal to the Saigon Mart 66 - The circulatory routes connecting China - Vietnam Threats: - Currently the economy is still heavily on agriculture, not industrial development, trade service - tourism development is not adequate to its status and potentiality - Policies to attract investment will appear more competitors in the retail market - The rise of supermarkets is spontaneous, expansion of the system to the provincial market of famous brands such as (Hapro, Intimex, Fivimart) makes the level of competition becomes more critical - Customers are more difficult to satisfy due to the operation of supermarket and increasing awareness of the product, so to attract customers, it is necessary to reduce price, increased promotional costs, and customer care - Expenses for advertising, propaganda, marketing of joint venture supermarkets or 100% foreign capital supermarket are usually very high - Policies for human resource attraction as well as offers of competitors who have strong financial capacity (most of them are foreign companies) Strengths: - Have long-term experience in supermarket business, especially the supermarket business in the province - Built a reputation on the market in provinces - Product is more and more diversified, meet most of customer needs - The price is appropriate to the income and living standards of people - There are distribution network throughout the northwest area and a series of wholesale systems covering area - Management system is improved in quality - Young Staff is dynamic, enthusiasm, and responsible, united with staff have long experience and broad relationship - There are flexible, dynamic and innovative operating mechanisms 67 Weaknesses: - Saigon Mart only focused exploitation of traditional services Not going into entertainment, food, rest, relax services - Payments and after sales service is not as expectation of customers - There has not had a team for consulting and guiding customers choose products - No use thoroughly and effectively the wholesale network in other provinces - Our sales staff is not dynamic, also pay attention to sales - Literacy and expertise of staff is not equally - The development and application of information technology in management is not strong b) SWOT matrix: c) Classification of preferred strategy in SWOT matrix: To create the table of Classification of preferred strategy in SWOT matrix, we need to answer the following questions: Is it easy for competitors to cope with this strategy?, Is it easy for competitor to imitate this strategy?, Problems encountered in implementing this strategy? Concretely the following table: Table 3.1 Seq no If the strategic If the strategic Strategies partner is easy to deal with partner is Difficulty when easy to imitate implementing Total mark Centralized diversification 12 (6*2) Product development 1 market development 1 4 Market entering + Improved training 14 (7*2) + Developing the distribution system 2 12 (6*2) + Improving quality of products, service 2 + Diversifying implemented products 68 Looking at points on the table we can conclude the appropriate strategy to the current situation of the company's strategy is the advanced training, development of distribution strategy to concentrated diversification The reasons to make this choice are: Company is qualified to perform training strategies for improving because currently the company has experienced staff; Saigon Mart has established a center for all the member companies To implement strategies of developing distribution system, the company must have a qualified distribution platform, and fond of the company In the future Saigon Mart will become cheap-price Supermarket system so the diversification strategy is entirely suitable Competitive ability with other retail enterprise is low, because the provincial market is still very potential However, as currently most of the retail business focus in the major markets (such as Hanoi, HCM City, Hai Phong, Da Nang, Hue ) Due to financial capacity of the company is still limited thus it meets with many difficulties in investment activities For the above reasons, the strategies only rank in the strategies ranking table 3.1.2 SPACE Matrix analysis method - Matrix of strategic position and activity evaluation: Strategic position evaluation of Saigon Mart is as in following table: Table 3.2 INTERNAL STRATEGIC POSITION Financial Strength (FS) EXTERNAL STRATEGIC POSITION +4,2 Environment Stability (ES) -2,4 Business capital source +6 Stable economic development -1 Business effectiveness +4 Competitive pressure -3 Payment capacity +5 Changes of needs -4 Investment effectiveness +3 Market barriers -2 Business risks +3 Social and politic security -2 Comparative Advantages (CA) -2,6 Industry Strength (IS) +4 Market share -1 Potential growth rate +6 Product quality -3 Stability of finance +3 Customer loyalty -2 Capital scale +4 Competitive advantages about cost -4 Potential profit level +3 Qualifications and experience of staff -3 Easiness to penetrate into the market +4 69 Basing on the above analysis and mark calculations table, we have the following image: FS +6 +5 +4 +3 +2 (1.,4;1,8) +1 CA -6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6 IS -1 -2 -3 -4 -5 -6 ES Chart 3.1 From the chart, we can see an arrow showing that the strategic position of the company is right Quadrant This means that Saigon Mart is at a good position to make full use of internal opportunity and internal strengths to overcome its weaknesses and avoid outside threats Consequently, Saigon Mart may use its feasible strategies on market penetration, market development, product development, centralized diversification 3.1.3 Main strategic matrix analysis technique: This is a popular technique to establish optional strategy All of organization is located in the one of four quadrants of the main strategic matrix 70 Table: 3.3 TABLE OF MAIN STRATEGIC MATRIX RAPID GROWTH OF MARKET Quadrant II Quadrant I Market development Market development Market penetration Market penetration Product development Product development Horizontal combination Frontward integration Removal Backward integration Liquidation Horizontal combination Centralized diversification Quadrant III Quadrant IV STRONG Expenditure reduction Centralized diversification COMPETITIVE STRONG Centralized diversification Horizontal diversification POSITION COMPETITIVE Horizontal diversification Diversified combination Diversified combination Joint venture POSITION Removal Liquidation SLOW GROWTH OF MARKET From the above table, the main strategic matrix bases on two aspects including competitive position and market growth From the current situation, the retail market is developing rapidly, stably and much potentially At the same time, Saigon Mart is having competitive advantages, thus it is the most suitable and optimal to use strategies in Quadrant I It means that Saigon Mart should pay attention to development of current market and product (market development, market penetration, product development) and expansion of investment (horizontal diversification) 71 3.2 QSPM Matrix- Choosing feasible strategies: In the context of severe competition, it is important to improve competitive position in the market place so that an enterprise can exist and develop Methods to improve can be developing products, developing market, market penetration and focused differentiation Due to current situation, Saigon Mart system can only implement strategies of market penetration and focused differentiation Saigon Mart is a system of member companies which are divided by geographic border and available in many provinces of North east region Thus, to respect others, member companies not usually expand to other different geographic regions However product development and improvement are done by Research and Development Department who work under supervision and management of Board of Director For that reason, Saigon Mart is unable to implement strategy of product development To choose the most feasible solution, we will use QSPM matrix- a matrix to plan possible strategy MATRIX OF QSPM (Table:3.4) Optional strategies Market entering Main element Classification Internal elements Financial potential Management ability Prestige, trade mark Quality of products, services Distribution system External elements Economy growth level Average income per head Intellectual standards of the people Competitiveness pressure Diversification in demand of the residents Total of pull factor marks Centralized diversification TA TAS TA TAS 3 2 4 12 16 2 12 4 3 16 83 1 12 62 Note: TA: pull factor mark; TAS: total pull factor marks According to total score of attraction that we have considered for each strategy, market penetration is more feasible than others with objectives of increasing business activities and improving operation effectiveness of Saigon Mart Consequently, the following business strategy is mentioned to serve for market penetration 72 RECOMMENDATIONS AND CONCLUSION I Conclusion: By researching deeply and analyzing current situation and capturing opportunities, challenges as well as strengths and weakness of Saigon Mart system, it is noticeable that the company is having a relatively good strategy of operation However, there still exist many shortcomings, and then the writer has been trying to recommend some solutions which may increase effectiveness of business activities of Saigon Mart If these solutions are implemented simultaneously, it is believable that the mart system will be more successful in business with predetermined objectives After using a range of analysis tools as well as matrix to choose a strategy, the most feasible strategy complying with current situation of the company is to penetrate market which is also the final option If the market penetration strategy is executed effectively, it will be an appropriate solution to increase market share and revenues as well as effectiveness of business activities In order to so, the following strategies should be done at the same time: 1) Higher training strategy: With an objective to reduce losses for company and customers as well, it is necessary to control and manages risks It requires the company to have a dynamic, knowledgeable and skillful staff Therefore, higher training strategy should be paid attention to and implemented frequently It is specified as follow: Human resources development: - Continues to complete and strengthen organizational structure to meet the demand of business development - Has a plan of staff organization for each period, and then drafts specific training plans - Develops professional knowledge of staffs especially in the process of pricing products, to avoid losses for the company - Trains staff to have good exploiting capabilities to be able to exploit potential customers effectively 73 Improving managerial level - Recruits staffs who have managerial capabilities, implements higher training strategy on professional knowledge and develop personalities, powers to gain knowledgeable managers who are able to predict and solve problems independently - Continues to upgrade qualities of current managers, supervisors - Enhances the use of informatics technology in management to economize time and personnel 2) Strategy of developing wholesales distribution Because selling products via wholesales distribution can not enlarge and develop market, even it helps to control costs and manages risks, the company has set up an objective for the year 2010 in which proportion of direct sales will be converted into indirect sales quickly, mainly at partnership systems, professional and semiprofessional agents If it is possible to develop this distribution channel strongly, it will become an essential condition to keep current competitive position and maintain stable growth Solutions to develop this wholesales distribution include: - Concentrates group of collaborators who are staffs of banks, financial companies, and transportation and tourism companies….These staffs may bring back potential and stable customers However the company should equip them with professional skills - Enlarges system of professional and semi professional agents These agents have advantages of entering different market segments However, these human resources coming to assurance agents from different sources, sectors, hence, they not have similar knowledge and levels To overcome these difficulties, the company should have professional trainers who often support to improve profession and skills of exploiting for indirect distribution system Simultaneously the company should establish a group of managers managing activities of this indirect distribution system To attract employees, there should be policies to motivate, encourage them by using rewarding, allowance… besides tips to ensure incomes for those staffs and maintain their strong commitment to this job 74 3) Product differentiation strategy being implemented at Saigon Mart Since the establishment till now, Saigon Mart has more than 10,000 kinds of products being exploited, but in fact Saigon Mart is only exploiting 6,000 products According to the trend of economic development, while the sense of retail selling activities is improved, then depend on the evolving situation, Saigon Mart should put new products into exploitation such as electronics, computers… with aim to occupy the market and meeting the diversifying demand of the customer At the same time, it is required to continue to enhance the facilities for supermarkets of the same system, as it is the face, the trade mark of company effecting largely on the prestige of the whole system  4) Strategy of Product quality improvement: Mainly improve quality services surrounding products, as follow: - Increases advertising activities for products and brand names - Builds an information system focusing on products, organizes a group specializing in consultation and giving guidance on choosing products suitable with demand, income of customers - Establishes supporting system which is necessary for customers in process of approaching and signing contract - Focuses on customer services, enhances promotion and preferential campaign - Organizes services of quick and flexible payment, minimizes procedures within possible scope - Strengthens supporting activities and risk management for customers- this is also a solution to hedge risks in business activities - Promoting the customer support activities In general, these strategies are drafted to strengthen market exploitation in order to increase revenue proportion towards high economic effectiveness group: goods transportation, construction, installment, fire…as well as to increase controlling and risk management to ineffective group 75 II Recommendations: To enhance strategic effectiveness of Sai Gon Mark, these recommendations have been drawn out: - Policies of developing indirect distribution channel: building the contingent of staffs, workers, professional distribution channel - Policies of strengthening and developing human resources by organizing recruitment, training and solving staff’s benefits - Policies of increasing quality management with a target to improve business effectiveness of the company - Policies to develop indirect distribution channel: builds groups of collaborators, professional and semi professional agents - Policies of product differentiation: exploits new products to meet real demands of customers to retrieve market shares - Policies to improve surrounding services system to boost up reputation of trade mark, product quality to attract customers 76 [...]... business operation of Saigon Mart: 2.2.1 General Development objectives and orientation of the company: Supermartket business is one of service industry to meet the basic consumption of people in the society General objectives of Saigon Mart System is to make the sytem become one of leading retail corporation in the North of Vietnam In the general tendency, the orientation of Saigon Mart is that "Growth,... April 19th 2009, supermarket of Saigon Mart completed Saigon Mart Vinh Yen in Vinh Phuc province with an area of 10000m2 It is the largest supermarket of the Saigon Mart system It operated to provide goods to the whole Vinh Phuc province Simultaneously it was a centre distributing goods to the whole system Supermarket system of Saigon Mart has functions of wholesaling; retailing products of consumption,... electronics, food, cosmetics The main operation field is Hanoi and North East provinces The supermarket system operated in accordance with business law Board of management included directors of other Saigon Mart Supermarket 2.1.2 Organizational structure: The supermarket system of Saigon Mart has direct management model, each manager of member supermarket is in charge of that supermarket Strategic policies,... management model of Saigon Mart system includes the following functional departments: Board of Management: Board of Management is the leader of company, representing for all employees of the company in accordance with Business Law of the state and company’s targeted objectives Manager is elected by company’s members, responsible to the State and employees for business activities of the company Manager... regulations - Counsels the Board of Management on strategic establishment of organization of the company - Counsels the Board of Management to solve problems of Organization- AdministrationHuman Resources - Counsels the Board of Management on building organizational structure and managing company - Counsels the Board of Management on training and recruitment of the company - Counsels the Board of Management... the stage of organizing, controlling and developing this program 20 CHAPTER 2 : FACTORS INFLUENCING ON THE BUSINESS OPERATONE OF SAIGON MART 2.1 Overview about system of Saigon Mart supermarket: 2.1.1 History of establishment and development: A supermarket system of Saigon Mart was ever a small self-selective shop, first established in Lao Cai city in 1999, a province of North East region The founder... activities of supermarket because of geographic conditions In November 2005, supermarket of Saigon Mart in Ha Dong was established to develop business in Ha Dong City, to provide enough goods sufficiently, conveniently for current supermarket system In December 2008, Saigon Mart in Ha Giang was established with an area of 500m2, located in the centre of Ha Giang town to meet the shopping demand of Ha giang... Cat Tien who had been an accountant at the supermarket system of Citimart, one of the first supermarkets in Hanoi In 2002, this self-selective shop was converted into supermarket with an area of 3000m2 in Lao Cai province, at the same time opened the second Saigon Mart in Yen Bai City, Yen Bai province with an area of 500m2 In 2005, due to strong development of supermarket, increasing demand for goods,... management: BOARD OF DIRECTORS DR SAIGON MART HANOI DR SAIGONMART LAO CAI DR SAIGONMART YEN BAI DR SAIGONMART HGIANG Business Accounting Sales Department Marketing Dept Department Financial Dept Development Dept Project Dept Wholesales Dept Retail Dept Chart 2.1 :ORGANIZATIONAL CHART OF SAIGONMART SYSTEM 22 He or she manages systematic actives in compliance with directions and plans of Board of Management... put their vehicles at the right place, delivers tickets and collects them when they takes out their vehicles; helps them to put their vehicles out of parking place - The guard receives letters, newspapers, presents and transfers them to administration department to handle - Helps departments and individuals of the company within permitted time - In case two shifts are assigned at the same place, the