Strategy applications ENG 2016

IUT de Toulon Strategy Applications François Lacroux Summary Application #1 : History of Vietnam Airlines Application #2 : TechComBank Application #3 : KSF Application #4 : Strategic segmentation Application #5 : BCG Matrix Application #6 : Barriers to entry 10 Application #7 : External diagnosis 10 Application #8 : Internal diagnosis 14 Application #9 : strategic moves 18 Application #1 : History of Vietnam Airlines Strategy – Illustrations [1]/[20] QUESTION : Find some illustrations of unvarying strategies in the history of Vietnam Arilines From The Old Days History of Vietnam Airlines dates back to January 1956, when the Vietnam Civil Aviation Department was established by the Government, marking the birth of the civil aviation industry in Vietnam At that time, the fleet was small with only five aircraft of IL-14, AN-2, Aero-45… which started to serve domestic flights in September 1956 The 1976 – 1980 period witnessed the beginning of the airline’s expansion and efficient operation in Asian destinations of Laos, Cambodia and China (regular flights) and Thailand, the Philippines, Malaysia and Singapore (charter services) At the end of this period, Vietnam Civil Aviation became a member of the International Civil Aviation Organization (ICAO) April 1993 was a major turning point when Vietnam Airlines was officially established as the country’s national flag carrier On the 27th May 1996, Vietnam Airlines Corporation was born with the gathering of 20 aviation businesses and the airline itself Innovation Taking Place On 20th October 2002, Vietnam Airlines introduced the new logo of the Golden Lotus and corporate identity that symbolized its dramatic progress towards becoming a world-class airline The launch represented a complete repositioning and brand strategy of Vietnam Airlines, coupled with significant improvements in its infrastructure, operations and fleet The delivery of its first own “state-of-the-art” B777 in 2003 also marked a true revolution in the airline’s fleet modernization Three years later, Vietnam Airlines became one of the most modern fleets in the region World-class Airline For 15 years of development with an average annual growth rate of over 10 percent (except 1997 when the Asian financial crisis broke out), the national flag carrier has marked an obvious advance to become a major competitor in the Asian aviation market, owning a modern fleet of Airbus and Boeing planes flown by well trained professionals Beginning with non-regular services between two domestic destinations, today Vietnam Airlines’ network extends to 20 cities throughout the country and 40 international destinations in the USA, Europe, Australia and Asia (including code-share services) In 2006, after being awarded the IATA Operational Safety Audit (IOSA) certificate, a strict safety standard set by Aviation Quality Services (AQS), Vietnam Airlines joined the International Air Transport Association (IATA) as an official member, affirming its international standard Moving Forward Positioning its internationally recognized brand as a young and modern carrier, Vietnam Airlines excelled further when - together with the Vietnam Aircraft Leasing Company of which Vietnam Airlines was an initiator and founder - signing largest purchase orders of 12 Boeing B787s, 10 Airbus Strategy – Illustrations [2]/[20] A350-900, 20 Airbus A321 and ATR72-500 aircraft in 2007 The airline is expected to reach 104 and 150 modern aircraft in 2015 and 2020, respectively, making solid steps integrating into the global aviation industry as a truly regional carrier of choice, which is fully ingrained with Vietnamese traditional culture Application #2 : TechComBank QUESTION : Use this document to find the three dimensions of strategy, and to illustrate some of the functions of strategy Vision Techcombank aspires to be the best bank and a leading business in Vietnam Missions To be the preferred and most trusted financial partner of our customers, providing them with a full range of financial products and services through a personalized/customer centric relationship To provide our employees with a great working environment where they have multiple opportunities to develop, contribute and build a successful career To offer our shareholders superior long term returns by executing a fast growth strategy while enforcing rigorous corporate governance and risk management best practices Core Values Customer first We treasure our customers and work hard to offer them the products and services that best meet their needs Innovation We are good but can always be better therefore we never stop learning and improving Team work We can achieve our goals by trusting our colleagues and collaborating to deliver the best to the bank People development We develop our people to achieve their best potential and rewards our best performers Accountability When we commit to something, we whatever it takes to get things done Strategy – Illustrations [3]/[20] Board of directors Milestones on the path of development Vietnam Technological and Commercial Joint- stock Bank - Techcombank was established on September 27th, 1993 with the initial registered capital of VND 20 billion with the aim to become an efficient financial intermediary bridging the savers with the investors in need of capital for business and economic development in the open-door era The head office was at 24 Ly Thuong Kiet, Hanoi, Vietnam 1995 The registered capital was increased to VND 51.495 billion Parallel with this event, the Ho Chi Minh city branch was established starting the process of fast expansion of Techcombank in the main urban areas 1996 Thang Long branch and Nguyen Chi Thanh sub-branch were established in Hanoi, together with Thang Loi subbranch in Ho Chi Minh city The Bank’s registered capital has increased to VND 70 billion 1998 The head office was moved to Techcombank building at 15 Dao Duy Tu str., Hanoi, Vietnam With the establishment of Da Nang branch in the same year the branch network has covered all three main regions: the North, Central provinces, and the South 1999 Techcombank increased the registered capital to VND 80.020 Billion The Sub-branch No at Kham Thien str was founded 2000 Thai Ha sub-branch in Hanoi was established 2001 The registered capital was increased to VND 102.345 Billion Signed a contract with a leading software supplier Temenos Holding NV to implement new banking software GLOBUS over the network of Techcombank to meet the growing demand from customers 2002 A number of branches were established: Chuong Duong and Hoan Kiem in Hanoi, Hai Phong branch in Hai Phong City, Thanh Khe in Da Nang and Tan Binh in Ho Chi Minh City Techcombank becomes the joint stock bank with the largest network in Hanoi The network involves the Head Office, branches and sub-branches at the larges cities in Vietnam The registered capital has increased to VND 104.435 billion Strategy – Illustrations [4]/[20] Preparations are underway for an increase to VND 202 Billion in registered capital Techcombank reassures its role as a leading joint stock commercial bank in Vietnam 2003 Leveraging on the Globus system and the Bank’s alliance with Vietcombank, Techcombank commenced issuing F@stAccess card on 05 December 2003 The Bank inaugurate the completion of deployment of the Globus system on the whole network on 16 December 2003 The Bank started the process of developing a new corporate identity Techcombank Cho lon was established Registered capital has increased to VND 180 billion at 31 December 2004 2004 Inaugurate the new identity of the Bank on 09 June 2004 Registered capital has increased to VND 234 billion at 30 June 2004, VND 252.2 billion on August 2004, VND 262 billion on 20 September 2004 and VND 412.7 billion on 30 November 2004 The number of branches increased from 15 branches to 25 by December 2004 2005 Six new branches were established in Lao Cai, Hung Yen, Vinh Phuc and Bac Ninh, Nha Trang, Vung Tau in the first half of this year In addition, new transaction offices were opened including: Techcombank Phan Chu Trinh (Da Nang), Techcombank Cau Kieu (Lao Cai), Techcombank Van Thanh, Techcombank Phu Tho, Techcombank Nguyen Tat Thanh, Techcombank Quang Trung, Techcombank Truong Chinh (Ho Chi Minh), Techcombank Cua Nam, Techcombank Hang Dau, Techcombank Kim Lien (Ha Noi) 21/07/2005, 28/09/2005, 28/10/2005: Raised registered capital to 453 billions dong, 498 billions dong and 555 billions dong, respectively 29/09/2005: Launched the new Switching and Card Management System of Compass Plus 2006 Receiving golden cup for “ a better society and stable development” given by Viet Nam General federation of labor In June 2006: Call Centre & Hot line officially operated ( 24/7) In August 2006: Moody’s, the world top ranking reputed organization has declared reputed ranking for Techcombank, the first joint stock bank of Viet Nam ranked by Moody’s In August 2006: the annual shareholders meeting approved the plan for 2006-2010; Techcombank and Bao Viet Insurance corporately proving Banc assurance In September 2006: Completing the account system with new products: multifunctional savings, period interests paying savings On 15th December 2006: launching the international Techcombank Visa card 2007 Techcombank total asset up to 2.5 billion USD Becoming the joint stock bank with the second largest transaction network including 130 branches, TSO at the end of 2007 HSBC increases the sharing capital to 15 %, directly and sufficiently support Techcombank’s operation Profoundly transforming in structures with the establishment of corporate service department, department of credit and risk management, completing structure of banking service and individual finance Is the blossoming year of card services with the total issued card number up to more than 200.000 cards for all kinds The first and only bank approved the achievement in technological application and leading in market developing measures Implementing the “secret customers” program, in order to access the service quality and attitude to customers Launching many new products Receiving award “Top Trade services 2007”- award given by Ministry of industry and Commerce for typical enterprises, operating in trade services that Viet Nam committed to implement as joining WTO Strategy – Illustrations [5]/[20] 2008 Receiving award of “ the most satisfied service in 2008” voted by readers of Sai Gon Tiep Thi magazines in February 2008 In March 2008: Launching Techcombank Visa Credit card In May 2008: Launching Cash Deposit machine( ADM) Implementing many projects on technological modernization, connecting ATM system with strategic partner HSBC, opening free Call Centre ( 24/7) Opening Techcombank AMC ( asset management company) in 8th August 2008 Receiving Golden Star Award 2008 given by young enterprises association in September 2008 Increasing the property rate of HSBC to 20 % and raising chattered capital to 3.165 billion dong in September 2008 In September 2008: Launching Techcombank Co-brand Visa card with Vietnam Airlines On 19th October 2008: Receiving award “ reputed securities trademarks and the top Joint stock company of Vietnam” given by securities committee 2009 - July/2009: The registered capital was increased to VND 4.337 billions September/2009: + The registered capital was increased to VND 5.400 billions + Fund sponsoring contract for purchasing 16 A321 aircrafts with Vietnam Airlines was signed + Online saving products were introduced + Reception of the “top 500 largest enterprises in Vietnam 2009” title, awarded by Vietnam report + Reception of the “Global payment Excellence” Award, given by Citi Bank, Wachovia Bank and The Bank of New York + Initiated the transformation strategy with the support from the world’s leading strategic consulting firm McKinsey & Co 2010 - Deployed a number of transformation initiatives in general, announced the bank’s Mission, Vision and Core Values Simultaneously, the bank implemented its business and management model restructuring and transforming corporate culture - April/2010: Achieved the “International star for Leadership in Quality” award, given by Business Initiative Directions - May/2010: Received “The Vietnam values 2010” title - June/2010: Received the “Global payment Excellence” Award, given by Citi Bank - June/2010: Increased The registered capital to VND 6932 Billions - July/2010: Received the “Best Bank in Vietnam 2010” award, given by Euro Money magazine 2011 - April/2011: Ranked in the “500 largest Vietnamese Enterprises in 2011” by the VNR 500 & received the “Credit product award of the year” from the Vietnamese Financial Times - From June/2011 to August/2011: Received prestigious awards from a number of trusted international organizations, including: + “The Best Bank in Vietnam”; “The Best Cash Management Bank in Vietnam” and “The Best Trade Bank in Vietnam” awarded by Finance Asia magazine + “The Best Bank in Vietnam”; “The Best Cash Management Bank in Vietnam” and “The Best Trade Bank in Vietnam” awarded by Alpha South East Asia magazine + “The Best FX provider in Vietnam” awarded by Asia money magazine - December/2011: received the “Best domestic bank in Vietnam” from The Asset magazine Strategy – Illustrations [6]/[20] Application #3 : KSF QUESTION : Find to KSF for restaurants (for tourists) in Hanoi Describe them, and rank them (from the most important to the less important) Application #4 : Strategic segmentation QUESTION : Use the list to identify the different SBUs of VietSovPetro Divisions of VietSovPetro Division AUTOMOBILE TRANSPORT DIVISION Tasks The precedent of Automobile transport division was technological transport department was established on July 09, 1982 On the first days of establishment, the Division only had some cars to serve for director, some big transportation cars for cadre and workers, and other transportation means had to rent from units outside the Joint-venture enterprise With the development of Joint-venture enterprise, the demand of using transportation means has been increasing DRILLING & WORKOVER DIVISION Drilling & Workover Division (DWD) is a sub division of JV Vietsovpetro, was established in june 2nd, 1983, has an international staff, they has many experience for exploration and production drilling oil & gas wells DWD has skillful staffs at technical specialist and management, including doctors, masters, experts, engineers and technicians They were trained in Universities & Institutes in domestic and overseas GAS FACILITY MANAGERMENT DIVISION The Division founded on August 15th, 1995 Main activities of Gas Operation Division: Supply high pressure gas for gaslift system on White Tiger Field ; Treatment, dehydration and pressing petroleum gas been collected from White Tiger Field and Rangdong Field for Baria-Phumy Industrial Area IT & COMMUNICATION CENTER Center of IT and Communication (CITC) is a member unit operating under the control of Vietsovpetro J/V (VSP), provides IT and communication servives.CITC was established in 2004 according to the Decision of VSP Management Commitee to merge IT and Communication department of VSP LOGGING & TESTING DIVISION Vietsovpetro Logging & Testing Division (L&TD) was established in June 2"d, 1983 by the 3rd Assembly Solution of VietSovPetro Joint Venture This is an unique organization of PetroVietnam, which supplies special service in the petroleum industry for exploration and production activities Marine Transport and Diving Division has a fleet of 17 specialized vessels MARINE TRANSPORT & Strategy – Illustrations [7]/[20] Division DIVING DIVISION Tasks Apart from Pipelaying and Crane vessels of 1200 tons capacity the Division has Fire Fighting, Diving, Towing and Transport vessels The fleet is capable of carrying out handling large-sized cargoes, towing, diving and rescue jobs at sea.This ensures the efficient delivery of all offshore services for petroleum production in White Tiger and Dragon fields, as well as supplying transportation, salvage, and construction of offshore structures for other oil companies MECHANICAL & ELECTRIC EQUIPMENT REPAIR DIVISION Mechanical and Electric Equipment Repair Division has a complex base for maintenance and repair of mechanical and electrical equipment The importance of this Division is defined by total capacity of power units and drives at sea exceeding 200 Megawatts The Division is equipped with modern dynamic, turning and cutting machinery facilities the prefabrication and manufacture of parts for repair and maintenance purposes Its modern dynamic, turning and cutting machinery facilitates the prefabrication and manufacture of parts for repair and maintenance purposes On July 07, 1982, the Health department was established with responsibility of caring health for cadres, workers in Enterprise With the production increasements, more developed projects, the Health department was changed into The health board in 1989 and become Medical services center in 1997 MEDICAL CENTER OFFSHORE CONSTRUCTION DIVISION Established in June, 1982, Offshore Construction Division is one of the leading divisions with large experience of offshore oil and gas facilities construction Annually the Division is capable of constructing marine fixed platforms for 50-60 meters water depths of as well as laying tens of kilometers of subsea pipeline The Division satisfies VSP's needs and is ready to fabricate, construct, repair fixed platforms and lay subsea pipelines for foreign companies OIL & GAS PRODUCTION DIVISION Oil and Gas Production Division is a leading J/V Vietsovpetro division Using modern equipment and technology the personnel of this Division recovers, treats and offloads over million tons of oil per month White Tiger oil field has operating Water Injection System with pumping units capacity of 60 thousand m3 per day at pressure of up to 250 atmospheres The division widely applies gaslift system in wells operation Up-to-date methods of high paraffin oil production and transportation using depressants are developed PORT SEVICES & WAREHOUSES RENTING DIVISION The MATERIAL SUPPLY AND PORT SERVICES DIVISION (PSD) is a member of VIETSOVPETRO Joint Venture Enterprise, was established on September.13th,1982 RESEARCH & DESIGN INSTITUTE Research and Engineering Institute (R&EI) which is the scientific and engineering division of Vietsovpetro JV (VSP) has been awarded the Vietnamese Order of Labor R&EI was established for research purposes and conducts scientific, economic and technical studies in the fields of prospecting, drilling, development, construction and the operation of oil and gas facilities for VSP Strategy – Illustrations [8]/[20] Division Tasks SAFETY & ENVIRONMENTAL PROTECTION CENTER The Division founded on October 01,1988 according to the Resolution of the 10th Vietsovpetro’s Council Certification of satisfying requirements of the management system ISO 9001:2000, approved by BVQI on September 07, 2004 Certification of capability to maintain and test firefighting equipments and breathing apparatus, approved by Nippon Kaiji Kyokai, Japan on May 07, 2007 Application #5 : BCG Matrix QUESTION : build the matrixes below Case Market Share Industry Industry Industry Industry Industry Industry Industry 60% 40% 50% 20% 20% 30% 80% 20% 20% 25% 25% 50% 20% 10% 10% 10% 10% 40% 10% 15% 8% 10% 30% 15% 5% 10% 15% 2% 10% 10% 20% of the company Market share f the other competitors Market 10% 14% 3% 6% 15% 18% 13% Growth rate 12% 15% 10% 7% 15% 19% 14% 14% 13% 11% 5% 15% 17% 13% 6% 15% 18% 12% % of the SBU in the turnover Case Market Share 20% 10% 15% 10% 15% 10% 20% Industry Industry Industry Industry Industry Industry Industry 40% 40% 50% 15% 20% 25% 40% 20% 20% 25% 15% 50% 50% 20% 10% 10% 10% 30% 10% 15% 16% 10% 30% 15% 25% 10% 10% 14% 15% 10% of the company Market share f the other competitors Market 12% 9% 8% 7% 8% 6% 13% 10% 15% 20% 10% 15% 10% 20% Growth rate % of the SBU in the turnover Strategy – Illustrations [9]/[20] Application #6 : Barriers to entry QUESTION : What are the main barriers to entry foreign companies will face if they enter Vietnamese market ? Application #7 : External diagnosis QUESTION : make a brief diagnosis of mobile and Internet markets in Vietnam Vietnamese coffee prices decline before main crop Agra-net.com Tuesday October 09 2012 COFFEE prices fell in Vietnam on Tuesday, about two weeks before the start of the main harvest that will boost supplies by early November, but demand remained thin as buyers were gauging production and waiting for prices to ease further, traders said Between 10 and 15% of the coffee crop has ripened in the Central Highlands coffee belt of Vietnam, the world's largest producer and exporter of robusta, but farmers have not rushed to pick cherries, traders in the region said Coffee exports hit 2.66 billion USD 31/08/2012 | 16:18:35 VNA Coffee exports in the first eight months of this year are estimated to reach 1.26 million tonnes, earning 2.66 billion USD, up by 31.9 percent in volume and 26.3 percent in value against the same period last year The ‘Hanoi moi’ (New Hanoi) newspaper reports that the two biggest import markets for Vietnamese coffee, the United States accounting for 12.5 percent of Vietnam’s export value and Germany, 12.4 percent, are continuing to grow both in volume and value Within the reviewed period, exports to Indonesia have risen 9.5 times and to Mexico , nearly 3.5 times more According to the Vietnam Coffee and Cacao Association, coffee exports may fall in the future due to supply shortages However, exports can expect to see a sharp increase once the next crop is harvested in late 2012 Civet-cat coffee : the treasure from Vietnam The Economist, Jan 15th 2012, 22:32 by G.C | BUON ME THUOT Strategy – Illustrations [10]/[20] IN A humid outdoor café surrounded by palm trees, Hung Pham Ngoc launches an attack on his coffee, pushing aside a cup of pungent black java for a Coke “Everything is fake!” complains the professional coffee taster and self-proclaimed snob “It's all made from artificial flavours It's undrinkable.” He fumes on about the problems of the coffee industry, and what he calls a grievous oversupply of substandard beans Vietnam is the world's second-largest coffee producer, but also one of the most obscure Unlike coffee exports from countries such as Brazil and Ethiopia, Vietnamese beans are typically used in cheap instant Western coffee, which earns scant international commendation His country, he declares, needs to market a trendy style of coffee drinking—like Starbucks, he adds, but finer “Civet dung,” he proclaims “Civet dung makes coffee good It's natural, and it makes real coffee.” Mr Hung is one of a handful of Vietnamese aficionados trying to revive tastes for this epicurean and elusive beverage At specialised coffeeshops around the world, this coffee sells for around $30 a cup As it happens, civet cats are coffee connoisseurs With their long noses, they sniff out and eat the best and fleshiest beans Their digestive enzymes ferment the beans and break down the proteins These beans, harvested from the faeces, then create a coffee that tastes rich and slightly smoky with hints of chocolate The beverage is known in Vietnamese as ca phe chon, or civet-cat coffee, and is also commonly produced in Indonesia and the Philippines The final cup delivers a smooth, dark palate that is stronger but, some say, less bitter than typical coffee But there is a growing market in fake civet beans One example widely peddled at outdoor markets is made with artificial fragrances that bear little resemblance to the drink's actual bold taste Larger coffee chains, however, produce a more sophisticated beverage using biotechnology, isolating an enzyme similar to that in the civet's stomach that ferments the beans, and then mixing it with chocolate powder to add authenticity to its aroma In Buon Me Thuot, the province's capital and the coffee capital of Vietnam, nearly every market-stall vendor claims to sell the weasel beans, often asking for at least $100 per kilogram Local customers, once relentless in their search for the real thing, now often settle for the knock-offs “People actually like buying ca phe chon even though they think it might be fake, because the price is not that expensive,” explains Nguyen Khanh Van, a university student in Ho Chi Minh City Storm puts Vietnam coffee crop at risk Updated 02:08 PM Oct 06, 2012 ( Reuters HANOI - Tropical storm Gaemi is forecast to slam into Vietnam's central coast later on Saturday, dumping heavy rains and strong winds in the Central Highlands coffee belt, which could result in a decline in output, the government and traders said The storm, the seventh to hit Vietnam this year, would be centred near the coastal provinces of Binh Dinh and Phu Yen, with winds travelling at up to 74 km per hour, a government statement said It would weaken after landfall and move further west by Sunday, dumping wind and heavy rains in the northern part of the Central Highlands while en route to Cambodia, the statement said Strategy – Illustrations [11]/[20] "Rain may not harm coffee cherries now but strong wind can cause young cherries to drop," said a coffee trader from Daklak, the country's largest coffee growing province and one of the five provinces in the Central Highlands The northern part of the region includes the provinces of Kontum and Gia Lai, which are the smallest in terms of coffee areas among the five, ranking after Daklak, Lam Dong and Dak Nong Around 80 percent of Vietnam's coffee comes from the region, where harvesting of the new 2012/2013 crop will begin in 10 days, with output initially expected to ease 7-10 percent from a record high 1.6 million tonnes in the previous 2011/2012 season A larger decline could tighten supply from the world's largest robusta producer, putting pressure on prices Demand for robusta is expected to be strong in the current season, with steady buying seen in Europe's market this week Vietnam, with a north-south coastline, is widely exposed to storms and typhoons More than 200 people have been killed or missing in the first nine months due to natural disasters including floods and landslides, government data show Vietnam's 2011/2012 coffee production Reuters Vietnam's 2011/2012 coffee production HANOI, Sept (Reuters) - Vietnam, the world's secondlargest coffee producer after Brazil, will run out of beans soon and has no stocks to carry forward to the next 2011/2012 season, an industry official said on Thursday Output from the new crop, due to start from Oct 1, will not be "as high as forecast by others", Chairman Luong Van Tu of the Vietnam Coffee and Cocoa Association (Vicofa) said but gave no Figures Vicofa said in June that the crop would produce 18 million bags, well below market projections For ANALYSIS on Vietnam's coffee Following are details of Vietnam's coffee production and exports With an output amounting to 14 percent of the world's total in the current 2010/2011 crop, Vietnam is ranked as the second-largest producer after Brazil PRODUCTION Vietnam's coffee crop year runs from October to September, starting with a harvest that peaks in December and ends in January The previous harvest ended in December 2010, two weeks earlier than usual as farmers in the Central Highlands coffee belt rushed to pick beans to catch up with good prices About 80 percent of Vietnam's coffee comes from the region, which borders Laos and Cambodia to the west Vietnamese companies and individuals have also leased land in the two neighbouring countries to grow coffee The coffee belt has five provinces: Daklak, Lam Dong, Gia Lai, Dak Nong and Kontum, with output ranking in that order Daklak alone produced around 6.7 million bags of coffee a year, a third of Vietnam's total Vietnam, the world's top producer and exporter of robusta coffee, also grows catimor, a variety of arabica Catimor output stood at 38,000 tonnes in the 2010/2011 crop, from 37,000 tonnes in the previous season, Thai Hoa Vietnam Chief Executive Nguyen Van An said Strategy – Illustrations [12]/[20] PRICING Vietnam's most common coffee export grade is robusta grade 2, percent black and broken beans The grade is often quoted at a discount to London robusta futures as buyers want to hedge against risks in delivery timing and bean quality Discounts to London's January stood now at $100/tonne, from $50-$60 a week ago, for shipment from December Since June Vietnamese coffee has been quoted at a premium to London's prices for outright contracts due to tight supplies from both Vietnam and Indonesia, its rival robusta producer Vicofa has said it would start collecting $2 from exporters for each tonne of their exported coffee as of Jan 1, 2012 and use the proceeds to support coffee re-planting, trade promotion and also to finance the stockpiling scheme Exporters will likely pass the cost to buyers EXPORT MARKETS Vietnam is projected to export between 1.15 million and 1.17 million tonnes of coffee in calendar 2011, based on latest projections by Vicofa and the Agriculture Ministry The country has more than 150 export firms, but 20 companies account for the bulk of the overall export volume Vietnam exports coffee to more than 80 countries and territories, with the United States, Germany, Belgium, Italy and Spain among the top 10 buyers so far in 2011 Vietnam’s Coffee Crop to Be at Least 25 Million Bags in 2011-12 By Isis Almeida – Bloomberg - Jun 28, 2012 Vietnam, the world’s largest grower of robusta coffee, may produce at least 25 million bags in the 2011-12 season that started in October and may have another good crop next season because of beneficial weather, according to independent analyst Neil Rosser The 2011-12 estimate is higher than the U.S Department of Agriculture’s forecast of 21 million bags Rosser, based in London, has covered the coffee market for more than 20 years and is the former managing director of the statistical unit at Hamburg-based Neumann Gruppe GmbH, a coffee trading company Farmers must have planted more of the crop for this season, Rosser said in an interview at a coffee conference in Geneva yesterday ‘There is still coffee held back in Vietnam Stockpiles in Ho Chi Minh City went up last month.” Robusta coffee prices on NYSE Liffe have climbed 62 percent since the end of 2009, encouraging farmers to boost plantings in Vietnam Prices are up 16 percent this year Farmers in Vietnam got an average 43,200 dong ($2.07) a kilogram (2.2 pounds) for their beans in 2010-11, Rosser estimated That compares to a cost of production of 32,500 dong a kilogram, he said Policy implications for Vietnam agricultural commodities Coffee and Tea production sector: - Implementation of seedling programs to create highImplementation high-quality material areas for processing factories; - Expanding market to other potential partners ; - Diversification of production sector with support from government in organizing international commercial exchange fairs/marketing campaigns; Strategy – Illustrations [13]/[20] - Reform of stateReform state-owned processing enterprises which have not been economically efficient; Enhanced coEnhanced co-operation mechanism between companies and individual growers based upon spontaneous agreements; Enhanced role of community organizations in signing agreements Application #8 : Internal diagnosis QUESTION : use documents below to make the internal diagnosis of Vinamilk Marking off into main market zones Vinamilk WebSite We focus our business effectiveness on the Vietnamese market, which comprised 80% of our profits in the last three financial years We have also exported our products to such countries as Australia, Cambodia, Irap, Kuwait, The Maldives, The Philippines, Suriname, UAE and the U.S.A We divide our markets into areas as followed: Area ASEAN Middle East The rest Total : : : : Number of markets (Cambodia, the Philippines and Viet nam) (Iraq, Kuwait, and UAE) (mainly Australia, the Maldives, Suriname and the U.S.) 10 MAIN CUSTOMERS The following table reveals the customers that comprised more than 5% of the profit in the last financial years (up to December 31 2007) Name of customer State Company for Foodstuff Trading,Baghdad, Abdulkarim Alwan Foodstuff Trading (LLC) %/ turnover 2005 24.2 %/ turnover 2006 - 18.2 - %/ turnover 2007 5.1 Our biggest customer in the two financial years 2005 and 2006 was State Company for Foodstuff Trading, Baghdad, Iraq, a company working closely with Iraqi Ministry of Commerce We sold such products as baby cereal, baby formula and formula to this company The relationship with State Company for Foodstuff Trading, Baghdad, Iraq was first set in 1996 when we took part in the tender for the program « Oil Exchange for Food » held by Iraqi government and won the bid Although the program was finished in 2003, our company was requested to continue supplying products by State Company for Foodstuff Trading, Baghdad, Iraq with ordinary commercial terms However, we stopped supplying products to State Company for Foodstuff Trading, Baghdad, Iraq to supply to Abdulkarim Alwan Foodstuff Trading (LLC) in 2007 when they offered us higher profits and better brand advertising Strategy – Illustrations [14]/[20] OUR BUSINESS STRATEGIES Vinamilk Site We aim to maximise shareholder value and pursue a business growth strategy based on the following principal components: • Expansion of market share in existing and new markets; • Develop a comprehensive portfolio of dairy products to target a broader consumer base and expand into higher margin value-added dairy products; • Development of new product lines to satisfy different consumer preferences; • Brand cultivation; • Continuously enhancing supply chain man- agement; • Development of raw material sources to ensure a reliable and consistent fresh milk supply base Deutsche Bank ups stake in dairy giant Vinamilk 29/08/2012 | 15:34:18 Deutsche Bank has acquired 3.55 million shares in Vinamilk (VNM), increasing its stake in the dairy processor to 5.42 percent, Vinamilk announced on Aug 28 The transaction was completed on August 15 with a final transfer of nearly 3.7 million shares worth an estimated 415 billion VND (19.7 million USD) Prior to the purchase, the German bank held a 4.78 percent stake in Vinamilk VNM closed up by percent on Aug 28 to 103,000 VND per share -VNA Farming sector must focus on local market 28/04/2012 | 13:37:00 Agricultural processors should develop their local distribution systems and not just focus on exports if they wish to develop sustainably, said an official at the Ministry of Industry and Trade (MoIT) Ho Thi Kim Thoa, deputy minister of industry and trade, said the domestic market for farming goods and services in 2011 showed a year-on-year increase of 24.3 percent and reached 2,004 trillion VND (95.4 million USD) She said that if processors only focused on exports and did not expand their share of the local market they will be vulnerable to global downturns Meanwhile, she said, foreign firms have expanded their market share in Vietnam Thoa cited the example of Viet Tien Garment, Nha Be Garment, Garment 10, Biti's Footwear and Vinamilk that had successfully boosted their share of the local market Strategy – Illustrations [15]/[20] However, numerous processors of farming products have faced difficulties developing their share of the local market Manh Quan Dong, director of Phuong Dong Export Vegetable and Fruit Company in the northern province of Bac Giang, said his company have encountered many challenges in the local market Dong said his company was based far from Hanoi and other key economic centres with high consumption levels, which meant transport costs were high Tran Hong Duc, director of Bac Giang Export Farming and Food Processing Factory, said many processors had limited capital and struggled to meet the costs of warehouse fees Tran Thi Hong Hoa, from Hanoi Trading Company (Hapro), said that the supermarket chain set high quality standards on the products it sold, which many domestic producers could not meet She also said it is essential to have a trademark Thoa said local firms need to invest in a distribution system and promote themselves better She added that the ministry has organised meetings between suppliers and retailers such Hapro and Saigon Co.op to help sell their products.-VNA Vinamilk imports 300 cows 17/05/2012 | 12:31:58 Three hundred cows imported from Australia by the Vietnam Dairy Products JSC (Vinamilk) has arrived in Ho Chi Minh City aboard a Malaysia Airlines chartered flight The cows were taken to a company dairy farm in the Central Highlands province of Lam Dong where they will be held separately for a period before being allowed to join the farm's herd A Vinamilk spokesperson said the company has invested more than 700 billion VND (33.5 million USD) to develop five modern dairy farms in the provinces of Tuyen Quang, Thanh Hoa, Nghe An, Binh Dinh, and Lam Dong, each of which can accommodate 2,000 to 3,000 heads of dairy cows Under a five-year plan Vinamilk, which will have 9,500 cows by the end of this year, will increase that number to 28,000 by 2016 For that, it will invest a further 1.5 trillion VND (714 million USD) to set up four new farms in the provinces of Tay Ninh, Dak Nong, Ha Tinh, and Thanh Hoa It is also looking at co-operation and investment opportunities in Cambodia Vinamilk buys some 450 tonnes of fresh milk from farmers every day For sustainable development, it has been helping them improve the quality of their dairy cows to increase their milking capacity The company plans to increase its milk purchase to nearly 600 tonnes by 2016 That will meet 50 percent of its fresh milk needs for processing -VNA Strategy – Illustrations [16]/[20] Vinamilk purchases 100,000 tons of fresh milk Wednesday, August 29,2012,21:51 (GMT+7) HCMC – Vietnam Dairy Products Joint Stock Company (Vinamilk), the country’s leading dairy processor, purchased a combined 97,584 tons of milk frohm local farmers between January and July, up 18.5% year-on-year By Hong Ngoc - The Saigon Times Daily Three are nearly 6,300 households rearing a total of 63,000 cows in the country, with about half of them supplying milk being farmed by households having contracts with Vinamilk The firm so far has signed some 5,000 contracts to buy milk materials from farmers, with the daily volume averaging out at 470 tons The company targets to raise the daily material milk supply from farmers to 600 tons by 2016 based on the policies it has been applying to provide them with high-quality breeder cows Vietnam Dairy Cow One Member Limited Co was established seven years ago as a subsidiary of Vinamilk and specializes in developing dairy cow farming The enterprise has constructed and put into operation modern dairy farms in Tuyen Quang, Thanh Hoa, Nghe An, Binh Dinh and Lam Dong, with each area farming around 2,000-3,000 cows with investment of some VND140 billion From now to 2016, the firm will develop its own supplies to more than 100,000 cows, including 28,000 cows farmed by the company and over 80,000 cows by farmers The herds are expected to provide Vinamilk an estimated 292,000 tons of milk a year Vinamilk licensed to invest in New Zealand Monday, September 13,2010,20:42 (GMT+7) By Thuy Trieu - The Saigon Times Daily HCMC – The local leading milk producer Vietnam Dairy Products Joint Stock Co on Saturday received a license from the Ministry of Planning and Investment to set up its presence in New Zealand, the company said in a statement on Sunday This is the company’s first project outside Vietnam that would pave the way for it to further penetrate the global milk market, said the milk processor commonly known as Vinamilk It will buy a 19.3% stake in New Zealand-based Miraka Limited Company which has built a high-class powder milk factory at the center of North Island in the country, Vinamilk said in the statement sent to the Daily Vinamilk said that the factory in New Zealand, costing 121 million new Zealand dollars (some VND1.62 trillion) and having annual designed capacity of 32,000 tons of powder milk, would officially operate in August next year The factory, which uses fresh milk supplied by farmers in New Zealand as feedstock, will sell its products widely on the global market The outbound investment project is in Strategy – Illustrations [17]/[20] line with Vinamilk’s plan to expand its processing capacity and to secure more fresh milk material supplies for its production On the home front, Vinamilk has lately developed five cow farms in five provinces of Tuyen Quang, Thanh Hoa, Binh Dinh, Nghe An, and Lam Dong, with the total herd of 5,000 cattle head The company expects to import 1,000 more cows this year.Mai Kieu Lien, chairwoman and CEO of Vinamilk, told local reporters in a meeting last Friday that the company forecast its demand for fresh milk in the next five years at 1.3 billion liters annually, but the current local supply was about 200 million liters only Therefore, the company is developing its own farms “We target to secure 40%-50% of fresh milk material demand from our own farms by 2015,” Lien said.Vinamilk is deploying several projects to enhance its production in the country The company will put into operation its US$30-million milk factory in Danang City by August next year, which will mainly produce yoghurt and liquid milk products By late 2012, two more factories of Vinamilk will operate The first one is a US$120-million liquid milk factory with an annual designed capacity of 400 million liters in the first phase and 800 million liters in the second phase Meanwhile, the other one costing over US$100 million will produce powdered milk for kids with an annual designed capacity of 55,000 tons, four times higher than the current capacity of Vinamilk’s factory now.Vinamilk currently has 250,000 distributors and retailers, selling nearly 10 million milk products a day It now has a market share of 40% in Vietnam Lien said the company’s local sale revenue in this year to date has amounted to about VND9.6 trillion, equivalent to the whole revenue of last year Besides the local market, Vinamilk is also strong in export, obtaining about US$80 million in revenue every year Its main export markets are the Middle East, Cambodia, the Philippines, and Australia In related news, Vinamilk is considering to raise product prices to compensate rising input costs The company’s CEO said that Vinamilk was calculating to harmonize product prices with the price of fresh milk purchased from farmers Application #9 : strategic moves QUESTION : use SacomBank’s profile and documents below to define SacomBank’s main strategic moves Sacombank to facilitate farm produce import from US 10/8/2010 Saigon Thuong Tin Commercial Bank (Sacombank) has been chosen to draw up the letter of credit (L/C) for farm produce import from the US under the Export Credit Guarantee Programme, or GSM102 Strategy – Illustrations [18]/[20] The programme covers credit terms of up to 12 months with the total limit of $20 million The Commodity Credit Corporation (CCC) under the US Department of Agriculture has picked four banks in Vietnam for the programme The programme will help local farm produce importers gain access to capital sources with preferential terms and interest rates This is also a chance for Sacombank's corporate customers to expand business with prestigious exporters in the US The bank has also joined hands with the US Department of Agriculture and US Consulate general to hold a seminar introducing benefits of the GSM-102 transactions to Vietnamese importers The Saigon Times Daily Sacombank enters into strategic partnership with Duc Long Gia Lai Group 6/28/2010 Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) and Sacombank Securities Joint Stock Co (coded SBS) have officially signed an agreement with Duc Long Gia Lai Group Joint Stock Co (coded DLG) to set up strategic partnership relations Accordingly, Sacombank committed to provide in time credits for each business period of Duc Long Gia Lai Group Meanwhile, the group pledged to use the bank's products and services such as international payment service, trade funding and to cooperate with Sacombank in co-investing in joint projects Sacombank pioneers Platinum Visa Card in Vietnam 4/19/2010 Hochiminh City, 16th April, 2010: Sacombank is the first bank launching the Platinum Visa Card Any customer who earns more than VND 60 million per month can apply for this luxury card that provide a high level of service The cardholders are granted a credit limit ranging between VND 200 million to VND billion Furthermore, the cardholder will shall automatically be insured against personal accident with claims of up to USD 500,000 Besides providing services such as cash withdraw, shop now-pay later via Global system or through Internet, the Platinum Visa Card brings increased convenience to customers such as airflight booking, hotel booking, luxury car rental as limousine, access to business information such as booking conference rooms, fax machines, laptop, translators, visa/passport, ATM locations, foreign exchanges rate, languages All services are provided on demand when the cardholder log in to www.visaplatinum.com or call a 24-hour free hotline 1800 58 58 23 Platinum Visa cardholders shall be provided promotional information on star hotels, spa services, beauty salons, fashion shops all over the world by Visa Platinum Club and Sacombank Platinum customer service channel Cardholders shall have an overview of budget plan for the next year with Strategy – Illustrations [19]/[20] the detail credit balances sent at year end USD20 million to support SMES 11/18/2009 Proparco - the subsidiary of the French Development Agency (Agence Française de Développement AFD) and Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) have signed a credit facility agreement of USD20 million to reinforce the medium and long term lending capacity of Sacombank, to support its small and medium enterprises (SME) lending activity The agreement was signed by Mr Tran Xuan Huy - CEO of Sacombank and Mr Jean Michel Severino CEO of AFD, President of Proparco during the Franco-Vietnamese Forum of Entrepreneurs, in presence of Standing Deputy Prime Minister of Vietnam, Mr Nguyen Sinh Hung and the Prime Minister of France, Mr François Fillon As part of this financing, Proparco also participates to the improvement of Sacombank’s environmental and social practices by assisting the bank to implement a monitoring of the environmental and social impacts of its lending activities Moreover, this dollar financing contributes to the stimulus package deployed by the Vietnamese authorities, in an environment where the international financial crisis has made long term financial resources scarcer, illustrating Proparco’s counter cyclical role Facilitating access to credit for SMEs is indeed one of the critical aspects of the Government’s plan given the essential role of these enterprises for the country’s economy About Proparco Proparco is the subsidiary of the French Development Agency (Agence Française de Développement AFD) – France’s main provider of bilateral overseas’ development aid - for the financing of the private sector Founded in 1977, Proparco provides long term financing in the form of debt or equity to private to banks, infrastructure and industrial projects in over 60 emerging and developing countries AFD has committed in total in excess of EUR900 million to the public and private sector in Vietnam since it started its operation in this country in the late 90s About Sacombank Founded in 1991, Hochiminh City-based Sacombank is one of Vietnam’s largest privately owned banks with about 3% of system assets and total assets of VND 98,243 billion (USD 5,519 million) as at 30 September 2009; its network with nearly 290 branches and transaction offices in 45 out of 63 Vietnamese provinces, a representative office in China, a branch in Laos and a branch in Cambodia Sacombank is the first bank to be listed on Hochiminh City Stock Exchange (HOSE) and highly appreciated by international organizations via prestigious awards including “Best Bank in Vietnam 2008” by FinanceAsia UK; “Best Bank in Vietnam 2008” by Global Finance US; “Best Domestic Bank in Vietnam 2008” by The Asset Hong Kong; and “Vietnam Retail Bank of The Year 2008” by The Asian Banking and Finance UK Sacombank’s largest shareholders are Australian and New Zealand Banking Corporation and Dragon Financial Holdings Strategy – Illustrations [20]/[20] ... TechComBank QUESTION : Use this document to find the three dimensions of strategy, and to illustrate some of the functions of strategy Vision Techcombank aspires to be the best bank and a leading... established on September.13th,1982 RESEARCH & DESIGN INSTITUTE Research and Engineering Institute (R&EI) which is the scientific and engineering division of Vietsovpetro JV (VSP) has been awarded the... and better brand advertising Strategy – Illustrations [14]/[20] OUR BUSINESS STRATEGIES Vinamilk Site We aim to maximise shareholder value and pursue a business growth strategy based on the following