PROPOSAL ON DEVEPMENT STRATEGY FOR VMS mobifone 3g service

Thesis topic PROPOSAL ON DEVEPMENT STRATEGY FOR VMS MOBIFONE’S 3G SERVICE COMMITMENT We certify that the report is our group’s studies Figure and results in the report are of credibility and from reliable sources We also state that all analysis in the report is ours basing on references and learned knowledge The analysis is not private statement of any one of the group as a staff member in the organization where he or she works Hanoi, January 2011 ACKNOWLEDGEMENTS Our first sincere thanks will be extended to the University of Griggs in Vietnam, whose instruction is valuable to our report Besides, we would like to thank Vietnam Mobile Telecom Services Company VMS-MobiFone for their wholehearted support in provision of data, figures and days of working which help us have a realistic look in the formation of the company’s strategy Last but not least, our thanks also go to the professors and doctors for their help, lectures on skills and business administration knowledge during the course Authors TABLE OF CONTENTS LIST OF FIGURES LIST OF TABLES 10 LIST OF ABBREVIATIONS 3G Third generation technology-3G BTS Base Transceiver Station BSC Base Station Subsystem CDMA Code Division Multiple Access EDGE Enhanced Data Rates for GSM Evolution GPRS General packet radio service GSM Global System for Mobile Communications MMS Multimedia message service TDMA Time division multiple access VMS Vietnam Mobile Telecom Services Company VNPT Vietnam post and telecommunication WCDMA WiFi CDMA broad band Wireless Fidelity 11 INTRODUCTION Reason for subject selection In recent years, mobile information market has been flourishing There are now seven mobile information service providers in operation; some others are taking application procedures for market entrance like Indochina Mobile, VTC Telecom However, the market is getting to saturated point Competition is becoming fierce; Growth of revenue, profit is weak, which urges companies to have new strategies for development In this scene, 3G service (a set of international telecommunication standards and technologies promoting mobile phone quality and efficiency) turns out to be a better solution for companies in attracting more customers The Mobile Information Company (hereinafter called VMS) is the first mobile information provider in Vietnam under the trademark “MobiFone” Since its fully operating day, the company’s first ranking in terms of sales, competitive competence and experience in network operation and exploitation in Vietnam has been recognized and will be maintained in the future VMS is a 100% State capital enterprise under the Vietnam Posts and Telecommunications Corporation (VNPT) MobiFone network has covered 62 cities and provinces and 86.64 percent of Vietnam’s population VMS is the first and only mobile information service provider in Vietnam which was awarded with the prize “Information Network of the Year” by Echip Mobile Magazine in three successive years (2005-2007) In 2007, the company was ranked in the Top 20 of the 200 Vietnamese biggest enterprises by the UNDP United Nations Being the leading mobile information service provider, VMS provides various mobile information services and products, including voice and data services In the financial year of 2010, its turnover was VND 36,000 billion With the number of 3,525 competent and experienced officers and workers, the company is always ready to satisfy demands of more than 35 million customers nationwide 12 With desire to put the learned knowledge into practice in the companies where the authors are working, the Capstone Project Report “Development of Business Strategy for VMS-MobiFone’s 3-G service” was chosen for the study Objectives of the study - To re-systemize theories of strategic management, then on that basis recognizing and solving problems in order to build an effective and suitable strategy for product/service development - To apply system of theoretical and practical basics for analyzing and evaluating internal, external environments in order to build 3G business strategy for VMSMobiFone - To recommend solutions, suggestions in order to complete VMS-MobiFone’s selected business strategy Scope of the study Due to time and resource limitations, our group only had deep research in analyzing and building 3G business strategy (one of VMS’s business fields) for VMS during 2011-2016, the key period for the company’s 3G service expansion and development Methods of the study To solve the above issues, the report mostly uses the qualitative analysis method (analyzing facts of the VMS-MobiFone Company) The specific methods of data collecting such as questionnaire, expert interview have been used National statistics, professional information and data, secondary data on strategy and researches, reports previously done by the VMS-MobiFone company have been also utilized Lay-out of the subject The subject is divided into chapters with the main contents as follows: Chapter I: Theoretical basis Chapter II: Study of VMS-MobiFone’s 3G service strategy management issues 13 Chapter III: 3G service business strategy recommendations for VMSMobiFone in 2011 – 2016 period and implementation solutions Conclusion References Index 14 participate in large numbers Technology and management skills in the world is changing; 3G is in danger of lagging behind 0,15 0,45 0,14 0.28 0,15 0.45 Scarcity quality sources 0,09 0,18 0,1 0.2 0,09 0.18 2,79 2.60 of high human TOTAL WEIGHTED SCORE SUM TOTAL WEIGHTED SCORE 5.74 2.77 5.17 5.42 Upon the analysis results above, strategy chosen for 3G service for VMS company to pursue from now to 2015 and 2020 vision is innovation and high quality: Set a new standard of flexibility, coverage, stability and reliability; satisfies customers’ expectations thank to quality and mobile Internet connection speed; attracts high quality human resources to develop high-new services and to diversify services; expands marketing; promotes sales; establish effective distribution channels; improves the quality of customer service SUMMARY OF CHAPTER Chapter analyzes and evaluates the current business activities, core problem, strengths, weaknesses, opportunities and challenges, then VMS’s business strategy for 3G service from 2011-2016 and 2020 orientation have been selected The selection of business strategy is based on company’s principle and standards put for –ward after the comparison of basic strategies is made For each strategy selected, it is necessary to produce solutions to bring effectiveness of real applications into full play 82 This will be made clearer in chapter 83 CHAPTER 3: SOLUTIONS TO DEVELOP VMS’S 3-G STRATEGY IN THE PERIOD OF 2011-2016 3.1 Solutions to implement strategies successfully Through the analysis in Chapter 2, “High quality and innovation” is chosen to become the strategy for VMS’s 3G till 2015 to 2020 To carry out this strategy, it is necessary for the company to implement the following specific solutions: 3.1.1 Charge promotion issues: In the competitive market, to maintain and attract customers to use the services, VMS should provide more charge policies to customers and set up the charge base on the charge differentiation principle: - Charge distribution over the time the customer uses - Charge distribution by region - Charge distribution by characteristics of each customer group Some charge policies of VMS Principles for determining charge of 3G services are similar to 2G services: To encourage use, provide more choice and flexibility, differentiation and ensure ARPU According to the above principles, the policy applies to 3G include: - To provide various 3G services with simple charge, easy for customer to understand - To encourage 3G Internet access service Charge for 2G and 3G voice and SMS services does not change VMS applies the same charge structure as for 2G List of basic charges includes voice, SMS and VAS service Thus customers are using 2G services can easily access and use 3G services List of charges for voice services and SMS service of postpaid and prepaid (MobiGold, MobiCard, Mobi4U, MobiQ, Mobi365) remains the same, it only change the charge of Internet access charges for 3G services Charge based on the quality (QoS) The different charge are determined on the quality, the operators provide mobile Internet access service with competitive charges but lower data transmission speed such as GPRS/ EDGE in Vietnam now With 3G technology, 84 data transmission speed is much higher (download speeds up to 7.2 Mbps downlink), the charge would be correspond to the speed that the customer chooses Basically, the Internet access charge of 3G service will be cheaper than the 2G, it may have contracted the package, this will ensure to increase ARPU In the first phase, charge policies for 3G services will not be complicated because the customer’s adaption might be not high To reduce initial costs and encourage1 customers to use, it should apply charge subsidies policy for Datacard 3G’s charge strategy Voice and SMS VAS - Not distinguish voice, SMS of 2G and 3G - Keeping the charge on voice and SMS as 2G - - Charge packages for post and pre-paid Internet access the same charge for downloading ring music, images as 2G’s - Supporting VAS packages to encourage them to download ring music, images and TV mobile - Applying 2G charge Encouraging to use VAS Referring charges in the countries in the areas Supporting both post and pre-paid packages Supporting to encourage them to use and change from 2G to 3G Charge packages depending on speed and content Charge depending the quality Figure 3-1: 3G’s charge strategy Customers who use broadband services of VMS will be able to choose the package that is the most suitable to needs VMS will provide packages base on the using behavior of customers The inputs are reflected in the charge determining process of VMS: - The current charge - Refer to the charge of some countries in the region (Malaysia, Indonesia, Singapore etc) and in the world 85 3.1.2 Sales promotion issues Recently, VMS has also attached great importance to sales promotion However, it is importance and necessary to create awareness and customer favorite for MobiFone as well as build a good image of company in the eyes of the consumer in the competitive environment of mobile communications market This sets requirements for VMS, how conduct sale promotion to achieve these goals? Advertisement Company’s advertising activities should have changes in content and performance The advertisements should promote customers’ belief in its values rather than advertise promotion - In terms content: Advertisements content should be original, typical and rich in information on company’s superiority - In terms of performance: It is of necessity for the company to make best use of advertisement pattern diversity In fact, the model of TV commercial, radio commercial, papers, posters, leaflets, letters….are all employed by VMS and other companies To enhance the effectiveness of advertisements, VMS should pay more attention to synchrony of the activities Marketing programmers in advertisements is not restricted to marketing department but for all system Every staff in the company can be a good seller The situation of company operators, or staff at sales unaware of promotional programmers should be avoided Besides, VMS should pay more attention to promotion programmers in local TV programmers As it is, in fact, common that central promotions are replaced by local ones It is necessity for VMS to raise the frequency of its promotion in local TV programmers Promotion programmers At the moment, the promotion of the network is conducted regularly and continuously with great promotional value Form of promotion also applies to rich and diverse as the terminal off, offering the product comes, offering simcard; donate money to the account; lucky However, one pattern of offering that VMS should intensively focus on is the offering of terminators and service fee with long- term commitment to use the service Telecommunication charges focused on the solutions for voice services, nonvoice services don’t have large percentage, so VMS should focus more on nonvoice services 86 How to attracting potential customers is very difficult for any business today Price and product promotions are basic conditions for enterprises to access and confirm the names in target market In the telecommunications industry, there are promotion forms that often used: - Package services and Terminal Services/ Datacard: In contrast to 2G market, 3G market will grow However, terminals and 3G Datacard is still more expensive than the 2G terminal While 2G mobile phones less than 20 USD are available, 3G terminals are more expensive than or times Package services including computer terminals / Datacard are combined with subsidies, but increased freight terminals subscription packages to make products more affordable for customers The affordable 3G terminals and Datacard is a key factor to decide for 3G market development - Packages: The implementation of different service packages to diversify the customer's choice For example, packet voice services and SMS is an important factor in the diversification of services and encouraging customers to use SMS services - Charge penetration: penetration policy is used in the first time to stimulate consumption There are several forms of penetration charges are often used for 3G products and services, such as providing free or low price in the trial time After this time, customers may decide to continue using the product or service with the normal price The second penetration charge in 3G businesses is sold at lower prices but with the condition that the customer must sign a contract to commit using the service in a certain time - Price discount: After much 3G products and services offered, pricing discount is a method to encourage customers to use the service Under the provisions of policy discount, the more customers use the price is cheaper - New charge package such as: Charges for family and friends and charge for customer groups, weekend rates and charges for holidays or busy hour / peak hours can diversify and encourage the use of 3G products and services 3.1.3 Services diversification and sales In term of products and services, Mobifone product is more diversify than before, with postpaid subscribers, package prepaid However, most of this package are the parallels with the current package of the network have been provided previously The key point now is MobiFone need to understand the 87 customer demands, design new packaging, different from competitors and attract customers However, it must be realistic that market mobile communications have been exploited and fierce competition between the networks Besides the diversity of products compared to competitors, the company should choose a strategy focused on the differentiation - Product diversification: The Company can design products for students, with high demand for services, especially messaging services and other high-tech applications services, many utilities But this market has been exploited by other company such as Viettel, S-Phone, VMS still can attract customers on price, promotion and other utility services - Product differentiation: Select suitable markets to design appropriate products, products for rural, remote areas, workers - Design richness diversity product: In the condition that the charge is similar and the quality is the same, it is important for convenience, utility and other services will make comparative advantages for the company In addition, current customers are mostly young and middle aged, they are very knowledgeable about services and technology, but the data services on mobile networks is little noticed to develop (MobiFone has changed recently with the promotional rates offered GPRS, network information retrieval service, multi simcard , ) Therefore, we need to consider this issue more that can sustain growth in business (when the telephone density has been increasing, almost everyone will have more than one phone number) - Extended preferences, subjects used in the package, especially the postpaid package For example, for Friends that you can sign up to use at least and no more than people rather limited group, then you should expand the number of groups and the flexibility to change your subscription group Sales organization VMS should be organized to provide 3G services in all provinces 3G services offer products and services required to support 3G terminals and different from 2G services, so the deployment of 3G services will affect the current sales strategy, that required sale staff must be trained, have adequate information to assist in providing the best service 88 Figure 3-2: The differences of 3G service provision Source: Development plan of 3G services of VMS From the difference of the 3G, 3G strategy distribution of VMS to the following basic features: - Use existing sales channels, but more focused on the VMS system stores and specialized agents to meet the requirements of 3G services - Identify the provision of 3G services is a priority to build and enhance the value of the Company - It can apply policies to support terminals to customers comes with a longterm commitment to use in the first phase of deployment services - Implement promotional programs to encourage new customers to use 3G and 2G customers to switch to 3G The highlight to attract customers is the difference in the speed of data and pricing 3G service is generally more complex than 2G so customers will need more advice and support, such as installing computer terminals, using the service To meet these requirements, the intensive training for agents is essential That is reason why these channels are not eligible will not be involved in the distribution in the first time to develop 3G service 89 The package of products, services and 3G SIM card requires a unique, polite, elegant, placed in prominent positions in the store, showing distinctly different class compared to 2G and competitors Sales strategies and corresponding method to ensure the delivery of public services is described in the following table: Figure 3-3: VMS’s strategy and initiative of 3G service sales The deployment of 3G services is an opportunity to further develop the existing sales network To face future challenges, sales network and distribution of VMS should be changed to meet new requirements and VMS should have planned to expand after years According to the distribution channel will be divided into two parts as direct sales and indirect sales Figure 3-4: VMS’s network of sales and distribution in the future 90 Source: Development plan of 3G services of VMS With this approach, customers will be classified in more detail based on their needs The distribution will also be differentiated according to the needs of each different market segments The division of corporate clients and individual customers is necessary because corporate clients will become increasingly important for VMS Along with the explosion of the Internet, means to reach customers via the Internet will keep growing role in providing information and communicate with current customers and potential customers Especially for younger consumers who are knowledgeable about information technology, self management and can resolve their feud over the Internet channel will reduce costs for operators 3.1.4 Customer Care Customer service plays an important role in supporting sales When customers come to VMS, their needs are very diverse and needs are met So VMS access points must have different customers Besides shops VMS system, the hot line will form active support for activities of daily sales Figure 3-5: Customers’ needs and place to access customers Source: Development plan of 3G services of VMS 91 Customer care operations for 3G subscribers will also have similar procedures are applicable to 2G subscribers In addition, the VMS should also have a number of priorities for client care activities as follows: - Building the trust of customers to 3G technology, 3G services as well as services costs through rapid response and precise questions of customer inquiries - Introduce to customer 3G services, ways to use and accompanying utilities - Attract new customers, introduce service information through promotion clips, facilitate them to try 3G and decide to integrate once a customer comes to transaction place - Bring down the proportion of customers’ leaving the network Once working effectively, department of customer care is able to identify the customers group who is likely to abandon the network and then provide them with attractive priority as the way to better meet their needs It is a must to set up an information system of the service products so as to serve customer support activities as well as utilities and application programmers for all call centre MobiFone Experience for this can be drowning from competitors like Vinaphone and Viettel It is surely that the effectiveness of equipment and human resource of all MobiFone Call centre system will be enhanced The diversity of customers who come from all field, economic sectors should be performed together with consolidating the traditional customers on the base of comparison with those of other enterprises in the same place Every effort should be made to shorten the fixing time of the incidents like interruption or network failure Service customers provision procedures should be re-structured into phases at central transaction points to quickly handle and strictly manage all information relating to customer ,such as, provision of document, checking, contract printing, change updating, acceptance, supervising service provision, moving or disrupting the service, carrying out Relating procedures, answering queries, MobiFone’s Call centre expansion intertwining with equipment investing in call centre expansion, operators; service quality need to be improved It is of necessity to connect all call centre to become a network and network routing to neutralize the number of calls among centers, reduce waste of labor force in call-centre, avoiding the situation of redundancy in 92 one place and shortage in others It is necessary to commit to customer’ service quality by decentralizing the power to fix complaints from customers Need to build commitment to customer quality, competence to solve problems arising in the course of providing services, avoid all the complaints about the quality of customer focus only on resolution of complaints department to handle Revenue forecast Revenue from voice call takes the largest part, including VoIP Voice calls However, revenue from data will take bigger role It is expected by VMS that date turn over will reach 831 billion Vietnam dongs in the third year and swell to 2,527 billion in the 5th year and reach 10,025 billion in the last year, four folding against 5th year’s Figure 3-6: VMS 3G service revenue forecast Source: Development plan of 3G services of VMS Total revenue from 3G service in the rd, 5th and 15th year since the time of license granted is as the following: - 2,790 billion Vietnam dongs (3rd year) - 7,942 billion Vietnam dongs (5th year) - 23,814 billion (15th year) 93 3.2 Some recommendations To implement the proposed strategy successfully to maintain stable growth, ensure business efficiency increased competitiveness, increased market shares of the company in the field of providing telecommunications services, some recommendations have been made as the followings - Adopt policies to attract skilled human resources in specialized units to maintain and implement the strategy outlined And organizing job training and specialized training sent the field of new technologies to enhance quality provision of resources for companies in the coming period - Set up strategies for training plans of management and administration staff to meet the requirement of business and production when market expands - Apply synchronous scientific solutions to create products different from competitors’ - Fully decentralize management, ensure legal lobby to be open for units to bring the rights into fall play in the management and administration of business and production, especially the management of cost, Charge and business plan - Quickly implement equitation CONCLUSION - Due to time and sources limitation, mistakes are unavoidable - Capstone Project Report: "Develop business strategy for VMS 3G services" has been researched and developed with the goal to persuade entrepreneurs to practice in the company Base on the references, knowledge are learned in the course, discussion among colleagues, especially with the guidance of the instructor group, that help us to complete this Capstone Project Report - Results of research topics is expected to help company leaders have vision, capture and maximize opportunities and limit the risks of environmental integration stage to compete, contribute to the successful implementation of mission and development objectives for the company until 2015 - It is expected that the report’s results will help the company’s leaders to make a vision, take opportunities, and limit risks in the competitive and integrated environment so as to implement the tasks and goals of company development till 2015 successfully 94 REFERENCES In Vietnamese Nguyen Thi Mo (2005), “selection steps and measures for Vietnam to open the service trade” Publishers of political theory, Ha Noi Bui Xuan Phong (2006), Business Administration telecommunications towards international economic integration, Post Publishing, Hanoi Nguyen Thuong Thai (2007), Basic Marketing, Catholic Academy of Post and Telecommunications, Hanoi Post Office Ordinance - Telecom No 43/2002 / PL - UBTVQH10 were standing committee X National Assembly approved on 25/02/2002 with effect from 01/10/2002 Telecommunications Law Act was Congress 41/2009/QH12 Republic of socialist Vietnam XII session through November 23, 2009, formally entered into force on 01/07/2010 Decision No 158/2001/QD- TTg 18/10/2001 approved development strategy telecommunications Vietnam to 2010 and orientation to 2020 General Agreement on trade in services GATS, WTO Vietnam Trade Agreement - United States (BTA) IN ENGLISH 25 Micheal E Porter (1980), “Competitive Strategy”, the Free Press 26 Philip Kotler (2007), Marketing, Youth Publishing House 27 Goode W (1997), Dictionary of Trade Policy, Center for International Economics Studies, University of Adelaide WEBSITES 28 http://mic.gov.vn/vn/newsdetail/solieuthongke_vienthong/4901/index.mic 29 http://www.mobifone.com.vn/web/vn/ 30 http://www.vinaphone.com.vn/ 31 http://www.sfone.com.vn 32 http://www.vietteltelecom.vn/ 95 33 http://www.echip.com.vn/ 34 http://www.tapchibcvt.gov.vn/news 35 http://www.itu.int/ITU-D/ict/dai 36 http://www.itu.int/ITU-D/ict/statistics/ 37 http://www.oecd.org/dataoecd/34/50/1920287.pdf 96 [...]... administration Department of import Department of administration Department of payment supervision Department of bidding review Department of technology and network development for subscription fee calculation equity Centre for mobile Centre information for mobile Centre region information for Imobile Centre region information forIImobile Centre region information for IIImobile region information Centre... IVCentre for added region value V service Designand factory Source: Website mobifone. com.vn 2.1.4 VMS s service products VMS is the provider of GSM mobile information, applying GMS technology 900/18000/1900 MHz Mobile information service provides kinds of basic services as follows: - Voice service 37 - o Domestic Phone o International phone o Roaming o Caller number display o call transfer Data service. .. company level strategy, business level strategy, and functions level strategy To classify basing on the content of the strategy, French managers state that the business strategy consists of commerce, technology, finance and human strategy And classification upon strategic process gives out orientation and action strategy 1.1.3 Role of business strategy Business strategy has more and more become the... exporting telecommunication materials and equipment for s subsidiaries’ operation - Doing business in other fields within VNPT’s permission and under Vietnam’s Laws 2.1.3 VMS- Mobifone s organization structure Presently, VMS has 14 functioning departments and 9 subsidiaries, including 6 mobile information centers in 6 regions, Value-added Service center (VAS), subscription and liquidation center and a design... consistent policies, strict legislation, its companies can develop healthily and stably - Analysis of economic environment Economic environment is socio-economic situation and economic policy in the country where the company exists and develops Economic environment includes: socio-economic structure, level of economic development and macroeconomic policy - Analysis of techniques and science environment:... segment Inflation rate Rate of personal savings Interest Rate of enterprise savings Trade surplus or deficit GDP Budget surplus or deficit Political and legal Laws on anti-monopoly segment Laws on tax Stipulations decentralization Laws on training Policies and educational trends on 24 Socio-cultural segment Women in labor force Environment concerns Diversity of labor force Changes in job selection Attitude... situation, core matters, strengths, weaknesses, opportunities and threats, making good ground for developing and selecting MobileFone’s 3-G service business strategy in the period of 2011-2016 and 2020 vision 34 CHAPTER 2: AN ANALYSIS OF THE DEVELOPMENT STRATEGY FOR THE 3G SERVICE OF VMS- MOBILE 2.1 OVERVIEW OF VMS- MOBIFONE COMPANY 2.1.1 Establishment and development process Mobile Telecommunication Company... as VMS) is the first provider of mobile communication services in Vietnam with the trademark -MobiFone From the first days of service delivery, VMS has confirmed the leading position in business, competitive advantages, and network operation experience in Vietnam VMS will keep this position in the future as well VMS is a 100% state owned enterprise, a member of Vietnam Posts and Telecommunications... business strategy has character of route and is concretized by strategies with shorter term, so called plan Flexibility, elasticity: business strategy is built on the basic of future market forecast, thus, strategy should be flexible, elastic upon market fluctuations 17 Continuousness: Business strategy is a continuous process from building, implementation organization, checking, supervising to strategy. .. MobiFone * Head office: Urban zone of Dich Vong – Cau Giay - Hanoi * Website: www .mobifone. com.vn VMS Company’s main economic functions activities and business: - Organizing, building, managing, operating, and exploiting the network of VMS mobile information in provinces and cities all over the country - Consulting, surveying, designing, building and maintaining mobile information equipment - Importing and ... internal, external environments in order to build 3G business strategy for VMSMobiFone - To recommend solutions, suggestions in order to complete VMS- MobiFone s selected business strategy Scope of... contents as follows: Chapter I: Theoretical basis Chapter II: Study of VMS- MobiFone s 3G service strategy management issues 13 Chapter III: 3G service business strategy recommendations for VMSMobiFone... questionnaire, expert interview have been used National statistics, professional information and data, secondary data on strategy and researches, reports previously done by the VMS- MobiFone company