X01 Group 12 GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT FORMULATION OF BUSINESS STRATEGIES FOR VNPT BACKAN IN THE PERIOD OF 2011-2020 Group No. Do Quang Dao (Captain) 2. Le Thi Lien 3. Ha Thi Le 4.
Le Hoang GaMBA01.X01 Group 12 HANOI, 2010 ACKNOWLEDGEMENT The Group No.12 of Class GaMBA01.X01 would like to express our sincere thanks to lecturers of the Program for their valuable lectures delivered to us during the MBA training program, especially for their enthusiastic and detailed guidance extended to our Group as well as other Groups of our Class to help us complete our last assignment to meet graduation requirement. We would also like to deeply thank the Board of Management of VNPT Bac Kan for facilitating our Group in accessing the data, information and practical situations of the business to prepare the inputs for our capstone research project. Many of our thanks would be sent to the Griggs University and the ETC- Hanoi National University for designing the Global Advanced MBA training program specialized for enterprises’ managers and leaders, for creating opportunities for our access to broad knowledge of business administration and for equipping us the initiative and creative thinking through modern training methods. With the structure of the training program, participants can apply the knowledge and skills accumulated from the training program into their practical working environment and management jobs as long as they are still trainees.
In addition, thanks to the participation in this training course, members of Class GaMBA01.X01 have opportunities to expand and strengthen relationship in business as well as in life. Those are great successes of each member of our Class after finishing the training course. With our sincere thanks! 2 GaMBA01.X01 Group 12 TABLE OF CONTENTS INTRODUCTION.1 OVERVIEW OF BUSINESS STRATEGY.1 Concept of strategy.2 Concept of business strategy.2 The role of business strategy to enterprises.3 Classification of business strategies.1 Corporate- level strategy.2 Business-level strategies.2 PROCESS OF BUSINESS STRATEGY FORMULATION.1 Analysis of the external environment.1 The macro environment.2 Analysis of the internal environment.2 Manufacturing, service supply.5 Research and development (R & D).3 Formulation and Selection of Business Strategies.3 Selection of Business Strategies.22 Conclusion for chapter 1:.1 Introduction about VNPT Bac Kan.1 Foundation and development.2 Functions and duties:.3 Organization and management structure.1 General orientation of the Group.2 VNPT Bac Kan’s orientation.2 Analysis of the business environment of Bac Kan VNPT 31 2.1 Analysis of the macro environment.2 Laws on telecommunication.3 Socio and cultural Environment.4 Science and technology development.5 The natural environment.2 Analysis of the industry environment.3 Analysis of the Internal Environment.1 Analysis of resources.1 Analysis of Opportunities and Threats.2 Analysis of strengths and weaknesses.3 Synthesis of the analysis results on the enterprise’s opportunities, threats, strengths and weaknesses.4 Analysis of core competencies and competitive advantage.5 Analysis of investment portfolio.57 CON CLUSION FOR CHAPTER 2. 62 PROPOSAL OF BUSINESS STRATEGY AND IMPLEMENTATION SOLUTIONS FOR VNPT BACKAN.1 Strategy selection for VNPT Bac Kan.1 Name of strategy.2 Reasons for strategy selection.2 Content of Strategy.1 Focusing on exploiting services of particular advantages.2 Focusing on exploiting, occupying key areas and potential customers.3 Differentiating in service and serving qualities:.2 Solutions for strategy execution.1 Solution on investment.2 Solution on marketing.1 Market research work:.2 Designing the system of distribution channels:.3 Speeding up complex promoting activities.4 Customer care work.3 Solutions on organization.1 Organizing a simple and flexible system.2 Applying Information technology in management work 69 3.3 Fostering corporate culture.4 Solutions on human resources.1 Solution on human resource attraction.2 Solutions on maintaining human resources.3 Solutions for human resource training and development.3 Roadmap for strategy execution.
Recommendations to the Government.1 Recommendations to VNPT Group.74 LIST OF ABBREVIATIONS VNPT: Vietnam Posts & Telecommunications Group MIC: Ministry of Information & Communication SWOT: Strengths, Weaknesses, Opportunities, Threats Matrix BCG: Boston Consulting Group SBU: Strategic Business Unit.X01 Group 12 CDMA: Code Division Multiple Access GSM : Global System for Mobile Communications WTO : World Trade Organization R&D: Reseach & Development BTS : Base Transceiver Station ADSL : Asymmetric Digital Subscriber Line IPTV: Internet Protocol Television CRM : Customer Relationship Management 7 GaMBA01.X01 Group 12 LIST OF TABLES Page Table 1.1: Factors of the macro environment 9 Table 1.2: SWOT Matrix 20 Table 2.1: Structure of economic sectors in Backan in the period of 32 2005-2008 Table 2.2: Some socio-economic targets of Bac Kan province 33 Table 2.3: Market share of different telecommunication networks 36 at the end of 2009.4: Subscribers in Bac Kan 37 Table 2.5: Analysis of key competitors 37 Table 2.6: Quantity of fixed telephone and GPhone service, VNPT BacKan 43 Table 2.7: Fixed assets portfolio 44 Table 2.8: Detail Revenue 45 Table 2.9: Financial indicators 46 Table 2.10: SWOT matrix of VNPT Bac Kan 52 Table 2.11: Bac Kan VNPT transmission line structure 55 Table 2.12: Telecom businesses market share in province 56 Table 2.13: Locate product strategy of VNPT Bac Kan 59 8 GaMBA01.X01 Group 12 LIST OF FIGURES, GRAPHS Page Figure 1.1: Michael Porter five forces 11 Figure 1.2: Main components of competitors analysis 12 Figure 1.3: BCG Matrix 22 Figure 2.1: Organisational Structure of Bac Kan Telecommunication 27 Figure 2.2: Barriers and profit 38 Figure 2.3: Chart of HOST cable network 43 Figure 2.4: BCG matrix 58 Figure 3.1: Gantt chart for strategy execution 72 9 GaMBA01. The necessity of the research. In the current context of international economic integration, Vietnamese enterprises are no longer protected by the State, they have to affirm by themselves their positions in markets of fierce competition. The industry of telecommunication is no exception in that environment.
Vietnamese telecommunication corporations and companies are trying their best to survive and develop in the market. For these corporations to be stronger and stronger, the development of telecommunication branches in provinces throughout is of great importance. To do so, each provincial branch should build their own business strategies based on the overall strategies of their corporation in order to move in the right track in conformity with the general development of the economy and set forth appropriate solutions to compete in the market. Given this reality, our group has selected the topic of “Formulation of business strategies for VNPT Bac Kan (Vietnam Posts & Telecommunications Bac Kan) in the period of 2011-2020 as our capstone research project.
Subjects and scope of the research. Subjects of the research are issues on strategic management such as the formulation and implementation of business strategies, which will be applied to the formulation of business strategies for VNPT Bac Kan. The scope of the research is limited within the business operations of VNPT Bac Can with comparison to some competitors in the telecommunication sector in Bac Kan telecommunication market. Our group has applied the methods and tools, matrixes of analysis, synthesis, comparison and evaluation in combination with the knowledge background on marketing management, business statistics, leadership strategies, strategic management that we have accumulated from the Griggs Global Advanced MBA 10 GaMBA01.X01 Group 12 training program in order to research and build business strategies for VNPT Bac Can in a certain period.
Secondary data are collected from various sources such as reports, documents of VNPT Bac Kan and its competitors. These departments providing data include: Planning Department, Sales Department, Accounting Department, Administration Department of VNPT Bac Can. The reference materials are books, academic textbooks and Internet sources. Structure of the capstone project report Apart from the Preamble, commitment and lists of tables, figures, acronyms, Conclusions, the capstone project report is divided into three chapters: Chapter 1: Theoretical background on strategy formulation Chapter 2: Analysis of the strengths, weaknesses, opportunities and threats of VNPT Backan Chapter 3: Proposal of business strategy and implementation solutions for VNPT Backan.X01 Group 12 CHAPTER I: THEORETICAL BACKGROUND OF STRATEGY FORMULATION 1.1 OVERVIEW OF BUSINESS STRATEGY 1.1 Concept of strategy.
There are many different definitions of strategy, each definition is more or less depending on the different perceptions of each author. In 1962, Chandle defined the concept of strategy as follows: "Strategy is the determination of long-term basic goals and objectives of the business and the application of a series of actions as well as the allocation of resources needed to implement these goals and objectives” In 1980, Quinm raised a more general definition: "Strategy is a pattern or plan to integrate the key objectives, policies, and a series of actions into a tight cohesive complex. " Then, Johnson and Scholes has re-defined the concept of strategy to match with rapid changes in business environment: "Strategy is the definition and scope of an organization in order to achieve long-term competitive advantage for the organization through customization of its resources in the changing environment to meet market demand and satisfy the expectations of its stakeholders. " Strategy is the process of identifying long-term goals of the enterprise, selecting ways or direction of activities and appropriate allocation of essential resources to implement those goals (Alfred Chandler).
Not only involving many different aspects, the definitions of strategy vary according to levels. At least three levels of strategy should be identified: corporate- level strategy, business-level strategy, functional strategies.2 Concept of business strategy. Business strategies concern how businesses can compete successfully in a specific market, involving strategic decisions on the selection of products to meet customer 12 GaMBA01.X01 Group 12 needs, development of competitive advantages compared to competitors, exploitation and creation of new opportunities.2 The role of business strategy to enterprises. Business strategies play critical roles to the survival and development of the business.
A proper business strategy will create a good direction for businesses. Business strategies can be viewed as a guideline for businesses to move in the right direction. Business strategy offers many benefits for business, its importance is reflected in the following aspects: - Help businesses to orientate their activities in the future through analyzing and forecasting the business environment. - Help businesses to grasp opportunities and foresee possible threats to its growth.
the growth of the business. It enables enterprises to exploit and rationally use of resources, maximizing the strength of businesses. - Create a trajectory for business activities, enabling businesses to link individuals with different interests together towards a common goal for business development. It creates a close relationship between individuals and between managers and staff.
- Business strategy is a tool for businesses to compete effectively in the market. Enterprises with good strategies will have the right direction and initiative ness to cope with the intense competition in the market.3 Classification of business strategies.1 Corporate- level strategy Corporate-level strategies determine the actions that the company carries out to gain competitive advantage by selecting, administering a group of various business activities, competing in a number of sectors and products markets. Corporate-level strategies can help companies to achieve above-average income by creating value. It identifies and defines the purposes, objectives of the company to 13 GaMBA01.X01 Group 12 pursue, create policies and basic plans to achieve the objectives of the company.
After all, the value of a corporate- strategy level is determined by the level of profitability of the complex of various business units under the management of the corporate in comparison with the level of profitability of those businesses in other forms of ownership.2 Business-level strategies. "Business-level strategy is the series of commitments and actions to help firms to achieve competitive advantage by exploiting their core competencies in specific product markets. Fombrun, 1990, "Constructing Competitive Advantage: The role of firm - constitute interactions", Strategic Management Journal, 20:691-710). "Business-level strategy reflects the confidence of firms on the location and ways it can win a competitive advantage against their competitors.
Olsen 2000, Strategy type and performance: The influence of sales force management ", Strategic Management - Journal, 21:813 - 829). Business-level strategies are formulated to determine the selection of products or specific types of markets for the enterprise’s business operations. They help to determine how the company competes with other companies. According to the viewpoint of Derek F.