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Phân tích chiến lược kinh doanh của công ty VMS e

Phân tích chiến lược kinh doanh của công ty VMS
Chapter 1:
1.1
1.2
1.3
Chapter 2:
Chapter 3:
3.1
3.2
3.2.1
3.2.2
3.2.3
3.3
Chapter 4:

ABOUT VMS COMPANY
About company
Organizational structure of the company
The achievements
CURRENT STRATEGY OF VMS
ANALYZE COMPANY AND ENVIRONMENT

Analyze
Analyze enviroment
External enviroment
Industry enviroment
Analyze competitor
Analyze SWOT about competitive situation of the company
THE PROPOSALS TO IMPLEMENT CHANGES IN

3
3
3
4
7
8
8
8
11
16
16
18
19

STRATEGY
Conclusion
References

20
21

INTRODUCTION
In 2012, Telecommunications sector in Vietnam in general, mobile information
services in particular have witnessed fierce competition between the top three networks
in Vietnam: Vietel, Mobifone (VMS) and VinaPhone. Most prominent in this


competitive trend is powerful rise of mobile subscriber market, network providers
continuously put in to service different strategies in order to attract customers, increase
sales and profits ,occupy market share.
As a staff currently working in VMS-Mobifone, with the practical experiences in
working process in the company as well as the knowledge that was imparted and


collected in strategic management course - PGSM of Dr. Prof. THOMAS Jakobsen, I
choose VMS company to research about strategy, analyze the external industry
environment, company environment as well as analyzing and evaluating current rivals of
Mobifone that are Vietel and VinaPhone , thereby, puting proposals to change strategies
by myself.
Due to limited time and knowledge so do not avoid deficiencies. I would like to
thank Dr. Prof. THOMAS Jakobsen - Specialization in Business Administration and
Economics, University of Aarhus, Denmark who guidanced me and look forward to
receiving comments and contributions from Professor and his colleagues to complete
subject .

Chapter 1: ABOUT VMS COMPANY
1.1. About company
Vietnam Mobile Telecom Services Company - VMS, a state-owend company under
Vietnam Posts and Telecommunications Corporation, was founded in April 16th 1993,
VMS has become the first GMS 900/1800 mobile telephony services provider in the
brand name MobiFone, marking the beginning momentum of the mobile telephony
industry in Vietnam. MobiFone specializes in building, developing network and


providing mobile telephony. According to business perspective, products of MobiFone
is to organize designing, developing network and providing new services on mobile
information with advanced techniques and businessing GSM 900/1800, 3G UMTS
technology mobile communication services nationwide.
-

Official name: VIETNAM MOBILE TELECOMMUNICATIONS
SERVICES COMPANY

-

International Trade name: VIETNAM MOBILE TELECOM SERVICES
CO. (VMS)

-

Headquarters: Mobifone Building, VP1, Yen Hoa Urban, Cau Giay District,
Hanoi

-

Website: http://www.mobifone.com.vn

-

Logo and brand

1.2. Organizational structure of the company

The organizational structure of the company now includes:
-

Chairman

-

Managing Director

-

14 functions departments under the company
 09 other departments include: 06 Mobile telecom services center having
branches in 6 areas:Hai Phong, Ha Noi,Da Nang,Ho Chi Minh city,Bien
Hoa,Can Tho
 Value added services center (VAS)
 Billing and service support center
 Design factory


1.3. The achievements
Mobifone has gained a lot of achievements for 20 years from 1993-2012, especially
the recent three-year period from 2009-2011:
Award in 2011
-

The title "Hero of Labour" awarded by the State.

-

“The most favorite mobile telephony operator 2007” for ICT products voted by
E-Chip Mobile Magazine on July,12th ,2011

Awards in 2010


-

“The Best Quality Telecom Operator” Award in 2010 at VICTA Ceremony by
Vietnam Ministry of Information and Communications.

-

“The Most Favourite Operator 2010” voted by VietnamNet and E-chipMobile
Magazine readers

-

“The Best Services and Customers Care Operator” voted by VietnamNet
readers and EchipMobile Magazine

-

“The Most Favourite ICT Product 2010” for Mobile network voted by PC
World Magazine

Awards in 2009
-

“The Most Favourite ICT Product 2009” voted by PC World – announced in
June 2009

-

“The most favorite mobile telephony operator 2009” voted by readers of
VietnamNet newspaper E-Chip Mobile Magazine - Vietnam Mobile Awards;

-

The Best Customer Care Operator 2009 voted by VietnamNet and EchipMobile Magazine readers

-

The Best Customer Care Operator awarded in VietNam ICT Awards 2009
prize system by Vietnam Ministry of Information and Communications
MobiFone claims " the most favorite trade name"

(Source: http://ictnews.vn/home)
Chapter 2: CURRENT STRATEGY OF VMS
From the good results that achieved in the past 20 years (1993-2012), Mobifone will
accelerate in all business activities to complete the business plan, first of 2013 is more
than 2 billion dollars, and achieve the goal by 2016 is 5 billion dollars. At the same time,


will become the most powerful and reliable partner of the stakeholders in the
telecommunications sector in Vietnam and the world, namely:
-

General business strategy of the Company :
 Provide a full range of mobile communication services
 Provide 3G and 4G
 Promote the exploitation of value-added services for mobile phones

-

Vision, mission of the Company
 Strategic Vision: To become the most powerful and reliable partner of the
stakeholders in the telecommunications sector in Vietnam and all over the
world
 Business Mission: whenever and wherever
All the most advanced telecom technology will be used for the needs of
customers
Always be innovative to bring new value-added services to customers.
All information is shared in a transparent manner
Where to recommend and share the most reliable benefits of staff and
employees, customers, shareholders and the community

-

Core Values of the Company
Transparency
Transparency is expressed from awareness to the actions of each individual in the
company. Transparency management, transparency liability, transparency
interests
Consensus
Promote consensus and cohesion in a friendly and sharing working- environment
to develop Mobifone become the most powerful and reliable partner of the
stakeholders in the telecommunications sector in Vietnam andall over the world.
Prestige
Proud of the superiority of a leading brand in the mobile communication sector in
Vietnam. Customers are interested in service and have many choices. Both
proximity and skill and spirit make up the differences that help Mobifone has a
special position in customer.


Creativeness
Not satisfied with what are having but always dreams to

rise in learning,

creativity, and innovation to satisfy increasing and constantly changing demands
of market.
Responsibilities
The development associated with social responsibility is tradition of MobiFone.
We commit to provide superior mobile communication products and services for
society, share and take social responsibility because of a sustainable future.
Cultural norms of company:

-

 High quality service
 Politeness and fun
 Transparency and cooperation
 Quick and accurateness
 Dedication and creativity
(Source of website: mobifone.com.vn)

Chapter 3: ANALYZE COMPANY AND ENVIRONMENT
3.1 Analyse company

3.1.1 Operations results of VMS from 2010 to 2012
Revenue and profit before tax of VMS
Unit: Billion VNĐ
No.

Section

2010

2011

2012

1

Revenue

35,000

38,000

43,500

2

Profit before tax

5,900

6,260

6,570

(Source: Annual Report of Mobifone)

Revenue increased from 5-10% per year.
Profit after tax increased by more than 5% per year.


3.1.2 Market share
Market share between 3 network: Viettel, Mobifone and VinaPhone
No.

Network

2010

2011

2012

1

Mobifone

36%

31%

29%

2

VinaPhone

27.19%

23%

19,5%

3

Viettel

33.82%

43%

48,5%

(Source: Survey data of VMS)
Comment:
-

Revenue and profits of Mobifone increase steadily over the years, but market
share is declining sharply.

-

Vietel: Revenue and profit growth, market share

is increasing compared to

Mobifone and Vinaphone.
-

Vinaphone: Revenue, profit up slightly but the market share decline

3.1.3 Strengths
Brands
Mobifone is the first company ordering mobile telecom services in Vietnam, after 20
years of development, image of Mobifone has come into the hearts of the Vietnamese
people as a strong, class,trustworthy brand name. So in recent years in Vietnam,
Mobifone has always been voted by the experts and guests:
-

Mobifone is the most popular network.

-

The best customer care network.

-

The best quality products and service mobile network .

-

The best mobile network.

Market share
In 2012 , proportion is 29% and ranked second after Viettel mobile network.
Human resources
With more than 4,500 employees across the country, in which 83.2% have a university
degree or higher and the average age is 32 years old, the labor force is considered young,
dynamic, honest and always work hard for the survival and development of the
company.


Corporation Culture
Mobifone puts corporation culture with the goals, mission and vision in line with the
company's strategy:
-

High quality service

-

Politeness and fun

-

Transparency and cooperation

-

Quick and accurateness

-

Dedication and creativity

Corporation culture has infiltrated every employee, employee contact with
customers, customer care staff to answering customers employee. Every year, VMS
performs

auditing corporation culture and undertake for every customers of

Mobifone.
Infrastructure
Until December,31

st

,2012, Mobifone has set up huge facilities with over 20,000 BTS

(2G) and 15,000 B button (3G) and the core network has been installed in 64/64
provinces.That meet the needs of 100 million subscribers by the end of 2013. In this and
the next time, Mobifone continues to expand and improve radio wave coverage area
across the country.
It takes Mobifone nearly 1 billion dollars and 20 years to build the infrastructure to
service business. Could say this is strength and also a huge barrier for other mobile
network has been establishing and competing lifetime with Mobifone for last years and
the following years.
Distribution channels
Distribution system of MobiFone is established on the basis of three main distribution
channels including Mobifone stores, direct sales network and agency systems of
Mobifone.
Products


With more than 10 products and 50 services, products and services MobiFone are very
diversified, specific for each type of customer, with specific service packages that are
incentives , appropriate and meet the needs of customers:
-

Business: Mbusiness Package

-

The young: Mfriends, Qteen, Mobi4U

-

Family: Mhome, MobiZone

-

Students: Qstudent, Mobi4U

Quality management system
The company has developed and applied successfully the ISO 9001:2008

quality

management system evaluated and released by TUV Nord Vietnam in 2008
3.1.3 Weaknesses
Outsourcing technical infrastructure is more, less redundancy, unsafe for the network,
especially in the backbone transmission network.
-

As a member of VNPT, therefore, MobiFone encounter problems in the
procedures relating to mechanisms such as: policies, scale and management.
Especially privatization.

-

Although the current price of MobiFone is competitive compared to competitors,
or even lower, but low-cost strategy for communication is not good, partly due to
the influence of brand strategy. As a result, the customer feel the cost still high.

Although there is a large network of distributors, retail system but not guarantee,
depends on a large number of agents, intermediate increase costs.
3.2 Analyze Environment
3.2.1 External environment


Analyze 6 elements according to model of Michael Porter

Economics
According to the General Statistics Office of Vietnam: The socio-economic situation of
our country in 2012 continues to be affected by the instability of the world economy due
to the financial crisis and the unresolved debt crisis in Europe . Gross domestic product
(GDP) in 2012 is estimated increased by 5.03% with 2011

according to

1994

compared prices. Rate of growth this year is lower than 5.89 % rate of growth in 2011,
but according to

message of the Prime Minister of Vietnam in early 2013 is: " Be

resolute to overcome weaknesses, to triumpth over difficulties, continue to control
inflation, ensure growth, make country develope sustainably ". Thus, keeping the steady
growth of the domestic economy will help Mobifone continue to ensure the business
development strategy in 2013 in Vietnam.
Demographics
Estimating to 2012,Vietnam's population is about 91.52 million people (by
https://www.cia.gov/libraly). According to the General Statistics Office of Vietnam,
Vietnam has a high percentage of young population from 10-14 years accounting for
8.4%, 15-39 years accounted for 44.9% .This trend will not change much in the period
2013 -2016. This is a dynamic youth force, main labor force in society and have income.
Thus, the younger age groups have the number tantamount 49 million people is still a
potential target customers of Mobifone in the coming years.

Sociocultural


Period 2011 - 2020 will be considered to achieve high speed in the field of
industrialization and globalization in Vietnam. Therefore will improve people's lives;
labor force will increase and diverse in all sectors; increase productivity and work time
etc. Along with industrialization, globalization, the demand for using mobile phone
communication will increase and so will the communication demands.
Technology
With the strong growth of the information technology all over the world, especially
mobile phones are continually released from the firms such as Aple, Nokia, Samsung,
etc. as well as terminal, laptop accessing broadband etc. These equipments mostly using
mobile networks with third-generation technology (3G), fourth one (4G) will grow
strongly and replace the traditional mobile communication services (2G). In addition,
with the improvement in technology in recent years, cheap equipment suitable for all
income subject, therefor,the types of services basing on 3G and 4G that include voice
and non-voice services will grow strongly. This is an opportunity for Mobifone in
developing markets, products and data services basing on 3G infrastructure, 4G, thereby,
increasing market share and revenue, taking up market.
Global
In recent years ,Vietnam has been actively integrating with the international scale
through taking part in

WTO, has been repeatedly calling upon and having many

preferential policies of the government in investing FDI, expanding overseas investment
so will bring both opportunities and challenges for the telecommunications sector in
Vietnam in general and Mobifone in particular. Communicational needs are projected to
grow strongly, it is a chance for Mobifone to increase revenue and subscribers.
Political/legal situation
Political and legal environment in Vietnam is considered to be stable and improve in line
with the trend: Keep political stable; continue to reform administrative formalities to
attract investment. In the telecommunications sector,Ministry of information and
Communications issues strict regulations on the management of the development of
mobile network infrastructure, information of mobile phone users. The above factors
contribute to the stability so that Mobifone can implementate its strategy.
3.2.2 Industry enviroment


Analyze industry environment by five competitive forces model of Michael Porter as
follows:

The Five Forces of Competition Model (Michael Porter)
Threat of new entrants
The appearance of tvirtual network provider will be deemed to be a new
competitor,however, the Ministry of Information and Communications will limit the
license to extend this model.Furthermore, cooperation with the major network providers
is still facing difficulties, as a result, this is not a threat to Mobifone.
Bargaining power of suppliers
-

Equipment and technology: depend on old infrastructure systems, have
difficulties in replacing,, high cost.

-

Material: Sim, card, and other goods for sale must be imported now from
other countries and dependent on foreign technology.

Bargaining power of buyer
-

Suppliers: current sales policy through distribution channels, agents are very
strong, so it can force companies in the field of policy to benefit ,but is not
customers.

-

Customers: Due to having many suppliers with similar quality products
,hence, customers easily select other vendors with low switching cost.

Threat of substitute products:
-

Currently, ADSL technology (Asymmetric Digital Subscriber Line) is often
used to access the internet, it makes difficult for the company to develop
products of mobile data bandwidth. However, in line with trend of technology


world, particularly the flexibility and mobility of 3G mobile networks, mobile
broadband is expected to gradually replace ADSL, so the threat is not great;
-

WiMAX is a new technology that is expected to compete directly with 3G
technology in the future. Development trend of mobile post - 3G is public
LTE technology (long-term evolution). It requires business propose plan
approaching this technology to strengthen . MobiFone has LTE trials license,
however, experts predict that the time for LTE and WiMAX development is
from 2015 onwards;

-

Wi-Fi (Wireless Network) service is in direct competition with a number of
3G mobile Internet services of MobiFone (Mobile Broadband), but under
the current management policy, this service is not exploited, customers can
use without charge.

Rivalry among competing firms
2012 was a year of competition, promotion and harsh sales race. However, the trend of
2013 onwards will reduce sales promotion due to issued policy tightening the promotion
and new prepaid subscribers development of the Ministry of Information and
Communications.
Opportunities
-

The consumer trend of people increases when the economy grows.
Opportunities to develop services basing on 3G and 4G

are high in

developing economies. 3G is the inevitable trend of the mobile
communication industry.
-

Vietnam is still a potential, dynamic market and always receives the new
technology.

-

Customers always have desirabilities to pay more for high quality services
and are more interested in quality than price issues.

Challenge
-

High competitive pressure.

-

Have foreign service providers

-

Depend on foreign technology and techniques while building and developing
telecommunications networks and network

-

Wi-Fi network service management policies


3.2.3 Analyze competitor
Currently, MobiFone, Vinaphone and Viettel are sharing the market and account for
approximately 97% market share of mobile phone market in Vietnam. It can be seen that the
main rival of Mobifone is Viettel and Vinaphone. We will analyze the outline of the business,
the important data, and positioning strategies as well as market price of each main rival of
Mobifone

Viettel is telecommunications service provider fully integrated fixed broadband and
international service with leading market mobile field. Viettel has developed the fastest
mobile network, it affects the competitiveness and growth of mobile phones in Vietnam.
Success of Viettel is based on competing and developing network quickly and perfectly.
Profile of Viettel
Time
Broadban Mobile
d Landline phone

Ability to
provide

Yes

Yes

International
Services

Yes

Main signs
- Provide services in 2004
- Account for 33.82% market share by the end of
2010 and the market share increased continuously
during the years between 2011 and 2012

Strengths
- Good optical transmission network.
- Wide and deep coverage on the whole
territory of Vietnam
- Have many incentive opportunities in
the field of investment and network
development

Strategy and overview
- Viettel is the second supplier
in Vietnam providing fully
integrated
services
in
communications,
such
as
VNPT
- With
the
promotion,
international relations, specific
market segments, Viettel has
accounted for a significant
market
share
of
all
communications
business,
especially mobile phones.
Position in the market and
prices
- Viettel follow low-cost trend
and often boot specific
segment package , such as
families or students packages
- Viettel is considered to be
network service provider with
the cheapest prices and the
widest coverage comparing to
other competitors

Weaknesses
- Brand image is blurred in big cities
- Excessive foreign investment leads to
financial difficulties.


- Low tariff structure
- Flexible sales policies and go into niche
markets.
- Image of brand is famous in the rural
market, low-income audience.
Opportunities
- Nationwide
coverage
ensures
considerable market share in the medium
term
- Granted permit for Wimax and 4 G
testing

Challenge
- Difficulty in connection making
potential customers find substitute
networks.
- The entry of new mobile networks
resulting in price competition.

Vietnamese telecommunications company (VinaPhone)
Vinaphone is the largest mobile network operator in Vietnam relating to subscription and
coverage area and occupies the position of Viettel. Vinaphone’s recent strategy has been
focused on the areas of insurance, marketing, distribution channel expansion and
building strong brands
Prifile of Vinaphone
Line of business
Broadba Mobile Internati
nd
phone onal
Landline
Services

Strategy and overview
- As a subsidiary of VNPT, provide
mobile network in the country with
Vinaphone brand.
-

Ability to
provide

No

Yes

Strategy in 2010 is to focus on
coverage area and brand development.

Yes

Prime time
- Start to provide services in 1996, achieve
advantages in use of available infrastructure of
VNPT to expand nationwide coverage after one
operation year. By the end of 2002, reaching 1.1
million GPC, subscribers accounting for 60% of
mobile phone market
- By the end of 2010, accounting for 27.19% of
market share.
Strengths
- Nationwide coverage
- Strong support from VNPT in the distribution
network and infrastructure.

Price and position in market
- Provide post-paid, prepaid services
SMS and WAP.
- Provide a number of new services in
2007 including EasyTopUp and
VnTopup allowing prepaid subscribers
to recharge by a message.
Vinaphone introduced cost plan
similar with MobiFone.
-

Weaknesses
Bulky mechanism, heavy procedures
The staff is not really dynamic.


Opportunities
- The coverage all over country
ensure a
significant market share in average period.

Threats
- Strong competition
- Open up the new mobile network as a
result of competition.

3.3 Analyze SWOT about competitive situation of company
Strengths
-

One of the largest mobile service provider in Vietnam. This is the first soldier in
the mobile telecommunications service market in Vietnam. Currently, MobiFone

-

has ranked second in 7 Mobile network.
There is a strong brand (good image)in the mobile phone market
There is extensive coverage network in Vietnam (20000 BTS, 15000 Node B on

-

64/64 Town / City).
Extensive international roaming services (nearly 100 countries)
High technology, the latest network equipment to meet the needs of customers.
Abundant and high quality human resources.

weaknesses
-

Some packages, service deployment is relatively high and slow compared to

-

Viettel, Vinaphone.
MobiFone is under the influence of the government, the Ministry of Information
Communications and VNPT. Sometimes, Mobifone can not do what they want

-

even though this decision can bring more benefits to customers.
Not broad and deep coverage of the whole territory in Vietnam.
Depend a lot on infrastructure providers such as leasing installation, transmission
lines providers.

Opportunities
-

The demand of mobile services is increasing: when living standards increase and
communication needs of people is much higher. This is a good opportunity for

-

mobile services.
Economic integration: Mobifone cooperates with a number of mobile networks

-

in many countries to make international roaming services.
Phone users want more added -value but is not only call or send a message.

Challenge
-

Hard to compete: Currently, MobiFone has to deal with a lot of competition in the
telecommunications industry. A large number of competitors have good
technological infrastructure, promotion policy and reasonable and quick customer
care such as Vinaphone ,Vietel.


-

Freight and promotion policy are coordinated by provisions of Ministry of
Information and Communications.

-

The procedure to extend the diversification of industries in companies and
foreign investment.

Chapter 4:

THE PROPOSALS TO IMPLEMENT CHANGES IN STRATEGY

On the basis of analyzing company and corporation environment, analyzing business of
rivals such as Viettel and Vinaphone, to ensure that sales and market share, Mobifone
need to change a number of short and long-term strategies as follows:
1. Restructure company in the direction of stock
Aim to reduce the dominance of the Ministry of Information Communication Vietnam in
the field of business and investing as well as developing network, attracting investment
of the mobile network in the world such as AT & T, Vodafone, etc. so that can increase
strength, brand, share and learn from the success of those company.
2. Promote the expansion of brand and image
With the growth and profitability over the years show that company has secured about
finance. Profit on equity in 2011 and 2012 is more than 49%, so in 2013 the company
can cut down profits, increase costs on promoting expansion of brand and image by
building or leasing the outlets in 64 provinces/ cities and districts corresponding to brand
of Mobifone.
3. Expand sales channels
Through retail, dealer channel, VNPT POST_ Members of VNPT go down to the
village instead of the current direct sales force of Mobifone.
4. Diversify related industries
Immediatly establish companies directly under Mobifone such

as infrastructure

companies, transmission companies etc. in order to use capital well, increase sales,
struggle monopoly of suppliers such as:transmission or leasing basis infrastructure.
5. Expand coverage across the country to ensure 100% of the territory in Viet Nam
(including South China sea) have radio wave to develop business.
6. Promote to expand network investment abroad to potential countries having easy
investment mechanism in Southeast Asia and Africa.


7. Implement low-cost strategy for rural customer groups, low-income students and a
differentiation strategy for the urban , VIP, high income clients
CONCLUSION
VMS is the first business providing mobile service. In the past 20 years,
Mobifone has reaped the many successes, prouded with the location: the best sales and
profit mobile network. However, rivals such as Vietel develops well thanks to the
rational strategy in the field of business, investment and brand promotion ,therefore,in
recent years Vietel always has lead the sales and profits and increase significant market
share .Therefore, Mobifone has consistently lost market share in the telecommunications
market in Vietnam.
To keep market share from 2013 onwards ,simultaneously, develop company
strongly with every passing day, Mobifone needs to adjust the strategy in areas such as:
restructuring the company, promoting investment inland and international, changing
strategies to make a difference by

combinating low-cost

and making differences

strategy suiting market segment.
END.

REFERENCES RESOURCES
-

Strategic Management manual of Dr. Prof. THOMAS JAKOBSEN.

-

Financial statements and annual reports of Mobifone in 2010, 2011, 2012.

-

The photos and some of the content is taken from the pages of the website:
 http/www.mobifone.com.vn
 https://www.cia.gov

 http://www.gso.gov.vn
 http://ictnews.vn/home



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