Chiến lược xâm nhập thị trường của viettel trường hợp của lào và haiti

VIETNAM NATIONAL UNIVERSITY UNIVERSITY OF LANGUAGES AND INTERNATIONAL STUDIES FALCUTY OF ENGLISH EDUCATION THE GRADUATION THESIS Viettel’s market entry strategy : The case of Laos and Haiti Instructor: Dr Nguyen Viet Khoi Student: Nguyen Thi Anh Hong School year: QH2010 Hanoi –2014 ĐẠI HỌC QUỐC GIA HÀ NỘI TRƯỜNG ĐẠI HỌC NGOẠI NGỮ KHOA SƯ PHẠ TI NG NH KHOÁ LUẬN TỐT NGHIỆP Chiến lược xâm nhập thị trường Viettel :Trường hợp Lào Haiti Giáo viên hướng dẫn: TS Ng Sinh viên: Ng Khoá: QH2010 i – 2014 n i t h i n Thị nh H ng In tr ctor: r Ng n i t h i Deputy Head, Department of International Business, FIBE-UEB, Vietnam National University, Hanoi Signature: Declaration I hereby state that I: Ngu h h g Q ), being a candidate for the degree of Bachelor of Arts (TEFL) accept the requirements of the College relati g to the rete tio a d use of Bachelor’s Graduatio Paper deposited in the library In terms of these conditions, I agree that the origin of my paper deposited in the library should be accessible for the purposes of study and research, in accordance with the normal conditions established by the librarian for the care, loan or reproduction of the paper Signature Date: Acknowledgement I would like to take this opportunity to give my deep gratitude to people who always stand by my side and ever-encouraging me when I carry out this thesis I would like to give a big thank to Dr Nguyen Viet Khoi, Deputy Head, Department of International Business, FIBE-UEB, Vietnam National University, Hanoi, who directed me to approach this interesting topic, advised me how to develop the main ideas and corrected my drafts in every research completing step I would like to thank Mr Nguyen Thanh Hung, who is a Viettel‟s staff, for sharing with me his precious working time in Haiti Without the interview with him, I could have not accomplished this study I would like to thank my family for being with me the whole time in which I conducted my paper I owed it to them for getting mad at them when I met troubles I owed it to them for sometime I wanted to give up Despite the fact that how bad-temple I was, they still stood shoulder to shoulder with me Finally, I would like to thank my best friends for bringing me the joyful moments whenever my spirit was down Thank to them, I could keep my heart devotedly to my graduation thesis i Abstract This research is conducted on purpose to propose a personal viewpoint which answers to the question “What makes Viettel successful in international markets?” The second data as published articles and previous researches that related to the thesis topic were employed, along with the primary data as information generated from an interview with a Viettel staff, are employed to support to the observing methodology to analyze the materials First and foremost, the study provides a general picture of each target country‟s economy as well as its telecommunication market situation, which implies either the obstacles or the favorable conditions to Viettel Next, the marketing mix strategy that Viettel applied in these markets will be briefly recalled After that, based on the previous information, the author will draw out factors that brought about Viettel‟s success in its foreign markets ii Table of content cknowledgement …………………………………………… i b tract………… …………………………………………… ii Table of content……………………………………………… Li t of iii ed fig re , table and pict re ……………………… v Li t of abbreviation…………………………………………… vi Part I: Introd ction………………………………… 1 Statement of research question………………………… Research goals/objectives……………………………… Significance of the study……………………………… Scope of the study……………………………………… Organization of the study……………………………… .2 ethodolog …………………………………………………… Part II: Finding ………………………………………………… Chapter 1: Literal View and Theoretical background……………………… 1.1 Literal View…………………………………………… 1.2 Theoretical Background………………………………………………7 1.2.1 Market entry modes 1.2.2 Steps to build international market entry strategy 11 1.2.3 Market mix for entering a foreign market 12 Chapter 2: The overview on iettet Corporation Gro p… 14 2.1 Viettel Corporation Group………………………… 14 2.2 The general situation of Viettel‟s international market entry strategy…………………………………………………… 16 Chapter 3: Viettel in Haiti …………………………………… 18 iii 3.1 Overview on Haiti‟s economy……………………… 18 3.2 Haiti telecommunication market ………………… 22 3.3 Viettel‟s activities…………………………………… 23 3.4 The marketing mix strategy………………………… 24 Chapter 4: iettel in Lao …………………………………… 30 4.1 Overview on Laos‟ economy………………………… 30 4.2 Laos‟ telecommunication market …………………… 31 4.3 Viettel‟s activities…………………………………… 33 4.4 The marketing mix strategy………………………… 34 Chapter 5: nal i on iettel’ market entr trateg …… 37 5.1 The foreign entry mode strategy of Viettel in Laos and Haiti market…………………………………………………… .37 5.2 Analysis on the general strategy that Viettel applies to entering a foreign market………………………………………………………………… 38 Part III: Concl ion………………………………………… 41 Li mita tio n 44 Suggestion for further studies 45 Reference …………………………………………………… 46 Appendix iv List of figures, tables and pictures No Name Page Figure Method of market entry Figure Revenue of Viettel from 2006 to 16 Figures 2012 Picture A mobile selling stand of Natcom 25 in remote area Pictures Picture Natcom‟s products are sold on 26 street Picture Natcom‟s products are sold on 26 street Table Laos – key telecom parameters – Tables 2012 - 2013 v 32 List of abbreviation No Abbreviation words Full form ARPU Average Revenue Per User BTS Base Transceiver Station ETL FY Enterprise of Telecommunications Lao Financial year GDP Gross Domestic Product GSM Global System for Mobile GSMA Groupe Spéciale Mobile Association HTG Haitian gourde IDB Inter-American Development Bank 10 ITU International Telecommunications Union 11 PDNA Post-Disaster Needs Assessment 12 TDMA Time Division Multiple Access 13 VCG Viettel Corporation Group 14 WTO World trade organization vi company to apply its previous experiences in domestic market; how about choosing a poor ones? Telecommunication products are a special kind of goods and services that the more innovative they are, the higher expense the technology connoisseurs are willing to pay As a result, the telecommunication suppliers in the world intentionally focus on upgrading their products‟ quality to target to the rich market whose infrastructures are developed and population‟s demand for hi-tech products are surplus in order to gain huge profit However, Viettel is against this trend They tends to approach to the poor who are technology amateurs or even not familiar to technology at all, sells them the most basic phones, guides them from the start and gradually pushes their development That is reason why VCG is ready to invest in a country that is seriously damaged by disaster as Haiti, ready to rebuild nearly the whole telecommunication network there While other telecommunication suppliers consider outsourcing when operating in a foreign market, Viettel uses its experts and engineers One reason is that in most Viettel‟s target markets, the living standard there is really a challenge to highskilled employees For example, before Viettel, Singtel, Telecom Malaysia, Vodafone also paid attention to Haiti However, no one of their workers wanted to leave behind their adequate life to work one of the poorest countries in the world Viettel‟s staffs, on the other hand, are willing to live and work in difficult situations: 10 people lived together in a rent house VCG employees working in foreign markets were either colleagues or teachers of the native staffs They shared job experiences and tasks, which both created jobs for the native people after the disaster and strengthened the relationship between Vietnamese companies and Haiti government 37 With the motto : “Network comes first, Business goes after”, after getting “the business permission” in a foreign country, Viettel first and foremost concentrates on either reconstructing the local current telecommunication or building its brand new network Especially, company significantly focuses on widening the network to the remote areas even to the poorest and lowest-educated population‟s habitat Therefore, in most of its foreign market, Viettel is known as the telecommunication supplier owning the largest coverage in the whole country which positions company over the other competitors in creating an impressive brand image As a result, the number of Viettel‟s subscribers in these markets continually rises year by year, which is its competitors‟ desire By widening its supplying network to every corners of a new market, Viettel successfully carries out its business slogan: “Popularize technology” – introducing telecom products to the technology amateurs as the poor farmers or the ethnic population, which breaks the stereotype that mobile phones and internet are a flashy kind of goods for the rich men world only Most of Viettel international market is developing countries in which poor population still account for considerable proportion in nation‟s population structure Therefore, approaching this customer segment is Viettel‟s right strategy which not only raises company‟s market shares and profit as well but also creates such a friendly and closed brand image in users‟ mind With the business philosophy: “Business is associated with social responsibilities”, when operating in a foreign country, Viettel usually either sponsors or co-operates social projects aiming at enhancing the native population‟s living standard VCG realizes that once people‟s basic needs as food, clothes, securities, education and health cares are fully satisfied, persons will think of purchasing “luxurious” goods as 38 technology devices That is the reason why company gives credit to take part in projects of building new hospital, improving the army‟s management skills, providing free internet for schools and donating for disasters‟ victims These activities not only shows that Viettel was seriously being responsible for its social duties but also implies that company cares about its customers‟ life prior to its business development Viettel applies its low price strategy as the elementary development policy when operating in a foreign market It is undeniable fact that the way of calculating charge with one second block of Viettel is either new or smart strategy in charging the telecommunication fee This method positioned Viettel over others competitors in each of its target markets; and it also created a trend among these nation‟s telecommunication suppliers Despite the fact that the one second block charging became popular in telecommunication market, Viettel was still more attractive to customers than its colleagues in the same business field due to its low prices: 15% 25% cheaper than that of other suppliers In conclusion, when entering a foreign market there are two aspects to which Viettel significantly pays the most attention: making company‟s products known and used by population of the whole country, and taking use of the low price strategy as the key element to attract and maintain the loyal users In view of socializing the sales, Viettel usually focuses on expanding its telecommunication network, both its transmitting net and delivery channel, which basically guarantees that Viettel‟s companies are widely recognized by all country‟s people Moreover, by hiring the native staffs, Viettel successfully killed two birds by one stone Firstly, company offers jobs opportunities for the unemployed, which is especially highly respected in a disaster damaged nation as Haiti, therefore, company‟s image is regarded as a 39 telecommunication supplier devoted to its customers Secondly, Viettel takes on the native employees for direct selling: they will go to every street and corners, sell company‟s phones and services, or just leave the leaflets and inform customers about company‟s activities This method completely takes full advantages of the native workers‟ knowledge on their hometown‟s customs, languages and interests to get company‟s products actually become a part in customers‟ daily life, rather than a product that can be bought first time in any stores In terms of applying the low cost strategy, Viettel based on their achievements gained in the domestic market to “export” the strategy to their foreign market and this policy worked effectively indeed Not only attracting more customers to buy company‟s products, it helped to low the telecommunication charge in these markets, in Haiti for example, the prices for using phones services was 10 cents before Viettel entered and the prices after that was only cents As a result, telecommunication suppliers in these countries gradually applied this strategy in serving their users; however, Viettel still owned a remarkable number of subscribers Furthermore, Viettel also flexibly offered various range of products and services in order to serve different segments of customers Each target market of Viettel had different features from the others; company understood that and carried out the market research To Laos which had similar telecommunication to Vietnam, Viettel provided almost the same products and services to Laos‟s users Speak of Haiti, whose telecommunication network was terribly destroyed in disaster, Viettel rebuilt its network here Due to developing a huge coverage all over the country, Viettel could approach and notice the demand of even the small ethnic group of population, and therefore, launched the appropriate package to them All the above policies contributed to Viettel‟s success in two outstanding markets as Haiti and Laos, and they somehow took part in company‟s achievements in others markets as well 40 Part III Conclusion Analyzing the international market entry strategy of Viettel helped researchers to have a deeper understanding on how Viettel could achieve such admirable successes in international competitions, which were complimented by both foreign and dome stic reliable newspapers Choosing an appropriate entry mode in addition to applying a suitable marketing strategy greatly contributed to empower Viettel‟s position in global market Through this research, there are some highlight points of Viettel‟s market entry strategy that made up its fruitful results, particular in its two foreign markets: Laos and Haiti First, Viettel employed joint venture as its leading market entry mode to penetrate international exotic markets Jointing with an existing enterprise in the target country not only helped company reduce its beginning cost to set up new oversea subsidiaries, but also somehow positioned company in new market to the local competitors due to its partner‟s current resources (number of customers, equipment , reputation, etc) Secondly, Viettel operated in external marketplace with the motto “Socializing telecommunication products”, which means providing telecommunication products to every social class, even the poorest Therefore, since the very first time running business in new country, Viettel put a lot of effort in building a nationwide network which even reached the most remote areas Its chain of selling stores also appeared in every geographical region Thirdly, Viettel flexibly called for the marketing mix plan to support to its market penetrating strategy; the price plan and the promotion ones were very effective For instance, company seriously took its social responsibilities as well as its business objectives To company, there is no better way to get its brand image close to customers than getting along with their daily life, and the fact proved it right Let‟s take Viettel‟s activities in Haiti as an example Because of the terrible disaster, the population‟s life was driven into the poor condition: economy was stagnant, many people were homeless, the health security was lacked and education system was almost destroyed, let alone universalizing internet among schools Viettel, 41 right after its business contract in Haiti was signed, along with building its telecom network, company donated rice, sponsored for building hospital and strengthening country‟s army with hi-tech; company even created nearly 10.000 job opportunities for the native In terms of the price strategy, Viettel applied its competitive low-price strategy in new markets, which either positioned company over other local providers or helped the country‟s telecommunication products‟ price range cool down Besides, the study also implies potential chance to develop to Vietnamese companies The international market offers a number of opportunities for Vietnamese enterprises in all business sectors, especially for telecommunication operators While globalizing business is becoming a trend among enterprises, in addition to the technology is booming, the competition between mobile service providers has increased continuously and the domestic market has become saturation Telecommunication providers are now required to seek for a new market to develop and maintain their position in the highly tough competition Investing in foreign market is one of the best choices for all enterprises in this time especially for telecommunication enterprises However, it is not easy to penetrate a foreign market because each country has a number of barriers in order to protect their domestic enterprises It seems even harder for Vietnamese companies due to its limited abilities in comparison with other suppliers in developed countries Therefore, choosing a target market is the first key to success that every Vietnamese enterprise should consider For the case study of Viettel, it chose a domestic-similar market and poor ones as the potential development atmosphere This decision provided a promising opportunity to develop but it also brought about a number of difficulties and risk in the process of doing business in these markets In order to exist and develop in the international market, Viettel building a different image of a telecommunication operator from the stereotype ones: it cared about customers‟ social life rather than competitive position, about making telecom products a commodity rather than providing luxurious goods, and so on This dissertation is necessary for improving the effective investment of 42 Viettel In conclusion, the case study of Viettel‟s activities in foreign market provided a great sample for any Vietnamese enterprises considering to internationally expanding their business: in order to succeed in a foreign market, it is necessary to select a right entry strategy, which must be either compatible to the market‟s features or helpful to create a company‟s own image that overweighs other competitors 43 Limitation Despite the fact that the author spent a lot of effort to complete this thesis at the best result, the study still has not fulfilled some related aspects First and foremost, there are altogether five common steps for a company to build its international strategy, however, the research covered three out of five steps only: determine and analyze the target markets, choose a market entry mode and practice the appropriate marketing mix Secondly, the research mentioned only two outstanding foreign markets of Viettel, therefore, there were not many convincible evidences to prove the conclusion on features of Viettel‟s market entry strategy Last but not least, when gathering the needed information, the author took the primary data from the interview with a Viettel‟s staff about company‟s activities in Haiti However, the writer could not take the same information in Laos but extract those materials from the internet As a result, the accuracy about Viettel‟s marketing activities was not ensured 44 Suggestion for further studies As mentioned before, this study still holds some drawbacks; however, they can be the potential matters for the further researches to discuss, for example: A research on the development in Viettel‟s market entry strategy: the writer can use the materials derived from this thesis to compare and draw out the differences in Viettel‟s strategy in future 45 References I Textbook Donald A Ball, Wendell H McCulloch, Jr International Business: The Challenge of Global Competition – 6th ed McGraw-Hill Fakeideas 2008 Revision: Reviewing the Marketing Mix [Online] Available at: http://fakeideas.co.uk/2008/03/07/revision-reviewing-the-marketing-mix Möller, K 2006 The Marketing Mix Revisited: Towards the 21st Century Marketing by E Constantinides Journal of Marketing Management, 22(3) II Previous studies Nguyen Hong Hanh (2013) International market entry strategy of Viettel Telecom Corporation Seinӓjoki University Retrieved from: http://theseus.fi/bitstream/handle/10024/58002/Hanh.Nguyen.pdf?sequence=1 Group 1(2009) Entering International Market Strategy of Viettel Griggs University Retrieved from http://luanvan.co/luan-van/chien-luoc-tham-nhap-thi- truong-quoc-te-cua-tong-cong-ty-vien-thong-quan-doi-viettel-36247/ Group 6, Class CH 7C QTKD(2011) Analyze Viettel’s i ter atio al busi ess strategies University of Foreign Trade Retrieved from http://luanvan.net.vn/luanvan/phan-tich-chien-luoc-kinh-doanh-quoc-te-cua-tap-doan-vien-thong-quan-doiviettel-50516/ 46 Chi l c th h p th tr g Retrieved from http://www.doko.vn/luan- van/chien-luoc-tham-nhap-thi-truong-215879 Chi l c ar eti g i c a Viettel Retrieved from: http://www.doko.vn/tai- lieu/chien-luoc-marketing-mix-cua-viettel-192742 III Articles “Natco : Đi sau hất” Published on Wednesday, 31/10/2012 from http://dddn.com.vn/doanh-nghiep 10 “ thả họa độ g đất đ điều ỳ diệu aiti”, Ha Mai, published on 14/09/2011 from http://www.vietnamplus.vn/ 11 “Unitel - Cho số g trê đất Lào t đẹp hơ ” published on Thursday, 2/08/2012 from www.qdnd.vn 12 “Viettel bi “ ghèo” h l i th cạ h tra h” published on Monday, 15/04/2013 from www.dddn.com.vn 13 “Natco tha đổi mạng vi n thông aiti” published on Monday, 12/11/2012 from www.qdnd.vn 14 “Natcom tạo công cách mạng vi n thông Haiti” published on Thursday, 19/02/2013 From http://viettel.com.vn 15 “Haiti - eleco u icatio : he revolutio NA COM” published on 18/02/2013 From http://www.haitilibre.com/en/news 47 IV: Other websites 16 http://www.fao.org/docrep/w5973e/w5973e0b.htm 17 http://globaledge.msu.edu/countries/laos/economy 18 http://viettel.com.vn/Our_Key_Figures.html 19 http://www.apo-mail.org/20120515ViettelprofileEnglish.pdf 20 http://www.dec.org.uk/haiti-earthquake-facts-and-figures 21 http://globaledge.msu.edu/countries/haiti/economy 22 http://infoasaid.org/guide/haiti/telecommunications-overview 23.http://www.budde.com.au/Research/Laos-Telecoms-Mobile-Broadband-andForecasts.html 24 http://viettelglobal.vn/trach-nhiem-xa-hoi/ket-qua-thuc-hien-chinh-sach-xa-hoicong-ty-natcom.html 48 Appendix The interview transcription Question 1: Could you please describe some features of Haiti market? Like how is the government policy, is there any business barrier that Viettel has to deal with? Answer: When Viettel officially entered Haiti in 2009, the most terrible storm in the last of 2010 knocked down nearly the whole country, thousands of people become homeless, the infrastructure was mostly destroyed, the poor economy was even more gloomy In such a scenario, the Haiti government hardly set up any business restriction on foreign investors Therefore, Viettel did not have to face with many legal problems when operating in Haiti Question 2: How about the local competitors and the market demand? Who w ere the telecommunication providers in Haiti? The storm must have influenced a lot on the market demand for telecom products, must not it? Answer: Before Viettel entered Haiti, there were four main telecom suppliers However, the number was down to providers in 2009; they were Digicel and Voil After that, these two companies merged and this big corporate owned nearly 90% of total market shares This was really a tough competition to Haiti In terms of the market demand for telecom goods, population here was not familiar to such these products even in pre-storm time Enterprises took the biggest account for using telecom services while individuals only took a small proportion in total As a result, the prices of telecom goods were very high; the internet had not universalized yet To access to internet, people needed to go to the internet store, in which the speed was very slow but the price was high, about 12000 or 13000 VND per hour Question 3: As you say, it was very difficult to Viettel to operate in a market whose demand was so low, was not it? Answer: Obviously However, Viettel planned to deal with these obstacles As a matter 49 of fact, Viettel has gained a lot of experiences in doing business in poor economic conditions in Vietnam, so company already had the plans Question 4: So, Which products and services that Viettel offered in Haiti? Were they the same as in Vietnam? Answer: They are not really alike Because, you know, the economic situation and the market demand in two countries were different Natcom classified the Haiti market into four main customer segments: students, youths, enterprises and businessman Besides, company also particularly targeted in the poor population, they were technology amateurs To common customer segments, Viettel provided some of the same goods and services as in Vietnam, as E-learning, E-music Viettel also launched some new products as online Top-up, E-banking – they were really new to Haiti markets And about the poor customers, Viettel offered variety services that suited their technology levels, especially in remote areas For example, customers just needed to pay 3000 VND to text, call and use internet from 0h – 19h every day Haiti was like other foreign markets of Viettel, company sold their own brand phones along with selling famous and familiar brand products as Nokia, Apple… Question 5: Did Viettel develop any differential products, say; they were fit in the market demand? Answer: Haiti telecommunication market had a special feature that different sims of different suppliers would never compatible in one phones Therefore, after penetrating Haiti, Viettel sold a kind of phones that could be used with different network sims Question 6: How about selling products? Where did Viettel sell its products? Answer: There was no selling online store; therefore, Viettel sold its products and serviced mainly at the brick – and – mortar stores on streets There were levels of selling channel of Viettel: stores, showrooms and selling spot Selling spot here was somehow like the form of selling lottery in Vietnam streets There was also a unique 50 way to sell products in Haiti The native employees worked as a vendor, directly welcomed customers across streets and sold the goods We can say that purchasing a telecommunication product here in Haiti is like purchasing normal goods in Vietnam markets There were some groups of Haitian workers came and knocked every house to introduce the company‟s products to customers Question 7: The last question how did Viettel marketing its products? Answer: Interestingly, radio was the most developing media Although television commercials did exist, the cost was very high Therefore, Viettel primarily advertised its goods through radio Sometimes, Viettel‟s staff paraded with cycles and motorcycles across streets, carrying the flags and poster to introduce new products Interviewee: Mr Nguyen Thanh Hung Email: hung.nguyenthanh.12@facebook.com 51 ...ĐẠI HỌC QUỐC GIA HÀ NỘI TRƯỜNG ĐẠI HỌC NGOẠI NGỮ KHOA SƯ PHẠ TI NG NH KHOÁ LUẬN TỐT NGHIỆP Chiến lược xâm nhập thị trường Viettel :Trường hợp Lào Haiti Giáo viên hướng dẫn: TS Ng Sinh... Gro p… 14 2.1 Viettel Corporation Group………………………… 14 2.2 The general situation of Viettel? ??s international market entry strategy…………………………………………………… 16 Chapter 3: Viettel in Haiti ……………………………………... Natcom in Haiti Viettel has invested and traded in three continents such as Asia (Laos, Cambodia), the Americas (Haiti, Peru) and Africa (Mozambique, Cameroon) In particular, in 2012, Viettel launched