TRAINING COURSE MASTER OF INTERNATIONAL BUSINESS MANAGEMENT Global Advanced Master of Business Administration Theme: FORMULA THE DEVELOPMENT STRATEGY FOR VTC MULTI-MEDIA COMMUNICATION CORPORATION TO BECOME THE MULTIMEDIA COMMUNICATIONS GROUP BEYOND 2015 GROUP 4 - GaMBA. Nguyen Van Trong 2. Bui Viet Anh 3. Vu Ngoc Anh 4.
Nguyen Van Bo (Leader) HANOI, 2011.X0610 Subject: Strategica Management Page 1 TRAINING COURSE MASTER OF INTERNATIONAL BUSINESS MANAGEMENT Global Advanced Master of Business Administration ACKNOWLEDGEMENTS We would like to to sincerely thank the University of Griggs - United States, ETC Center, MBA Program sincerely thank the University of Griggs - United States, ETC Center, MBA Program -– Vietnam National University, of Hanoi, the teachers who were dedicated guide us with all their heart so that we are successfully completed this course. We also wish to thank VTC Multimedia Communication Corporation - Vietnam Multimedia Corporation (VTC) has helped us in the exchange process, working, writting topical reports, and VTC also supporting us with useful information and enabling us to complete this exercise. Hanoi, December 28th 2011 THE AUTHORS Team exersice 4.X0610 Subject: Strategica Management Page 2 TRAINING COURSE MASTER OF INTERNATIONAL BUSINESS MANAGEMENT Global Advanced Master of Business Administration Table of Contents CHAPTER 1: SCIENTIFIC THEORY FOR FORMULA THE STRATEGIES FOR BUSINESS DEVELOPMENT OF THE ENTERPRISE 9 1.1 Primary matters about strategy and business strategy 9 1.1 Some concepts about strategy: 9 1.2 Development strategy Business strategy and type of trategies 9 1.3 Types of business strategy10 1.2 Role of strategy 10 1.3 Process to develop the strategy 10 1.4 Analyse the external environment 11 1.1 Analysis of common environment – PEST model 11 1.2 Analysis of sector environment 11 1.3 External Factor Evaluation Matrix – EFE 12 1.4 Competitive Profile Matrix ( matrix CPM ): 13 1.5 Analysis of internal environment 14 1.3 Ability to research and development of technology (R&D) 15 1.4 Product capacity, infrastructure: 15 1.5 Performance capacity in Marketing, Brand of the enterprise: 15 1.6 Matrix of evaluation of internal factors – IFE 15 1.7 Selection of strategy: 16 1.1 Leading on cost strategy 17 1.2 Product differentiation, diversification strategy 17 1.8 Seclection of Matrix 17 1.1 SWOT Matrix 17 Team exersice 4.X0610 Subject: Strategica Management Page 3 TRAINING COURSE MASTER OF INTERNATIONAL BUSINESS MANAGEMENT Global Advanced Master of Business Administration 1.9 Decide the QSPM Matrix Strategy (QSPM matrix) 19 CHAPTER 2: ANALYSIS THE ENVIRONMENT AND OPERATION OF VTC 1219 2.1 General information about VTC Corporation 21 2.1 Process of establishment and development of VTC development of VTC21 2.2 Main characteristics of business activities of of VTC: 22 2.3 Structure, organization and operation of VTC Corporation from 2005 to 2010: 23 2.4 Current Organizational structure of VTC 25 2.5 Business plan and result from 2005-2010 27 2.2 Analysis of external environment: 27 2.1 Analysis of the general model - PEST analysis 27 2.2 Analysis of the environment of the business: 32 2.3 External oppotunities and challenges for VTC: 37 2.4 Formation of external factor evaluation matrix ( EFE matrix ) 38 2.5 Comparison by competitive profile matrix CPM 39 2.6 Analysis of internal environment of the firm: 40 2.1 Analysis of financial capability: 40 2.2 Human resources analysis: 42 2.3 Technology development and research ability analysis ( R&D): 43 2.4 Productive capacity and infrastructure: 46 2.5 Marketing operation capacity, trade name of company: 50 2.6 Manageable capacity Sources: 51 2.7 Streongth and weakness points of VTC: 51 2.8 Internal factor evaluation matrix (IFE matrix) : 54 CHAPTER III: STRATEGY OF VTC DURING 2012 – 2015 TO DEVELOP AS A MULTIMEDIA GROUP 56 3.1 Vision, and strategic targets for development of VTC 56 Team exersice 4.X0610 Subject: Strategica Management Page 4 TRAINING COURSE MASTER OF INTERNATIONAL BUSINESS MANAGEMENT Global Advanced Master of Business Administration 3.2 Main targets for development of VTC by 2015 56 3.2 Development and selection of strategy of VTC Group by 2015 57 3.3 Selection, strategic decisions Analysis of of strategy: 61 3.1 Strategy 1: Development of IPTV IPTV market for overseas Vietnamese people in Europe; 61 3.2 Strategy to develop new product – 3D TV in the country 61 3.4 Organization Structure of Vietnam Multimedia Group 3.3 Strategy to build VTC into a Multi-media Communications Group to 2015 654 Table of Contents CHAPTER 1: SCIENTIFIC THEORY FOR ESTABLISHING THE STRATEGIES FOR BUSINESS DEVELOPMENT OF THE ENTERPRISE 9 1.1 Primary matters about strategy and business strategy 9 1.1 Some concepts about strategy: 9 1.2 Business strategy and type of trategies 9 1.3 Types of business strategy 9 1.2 Role of business strategy 10 1.3 Process to develop the strategy 10 1.1 Mission and strategic view 11 1.4 Analyse the external environment 11 1.1 Analysis of common environment – PEST model 11 1.2 Analysis of sector environment 12 1.3 External Factor Evaluation Matrix – EFE 12 1.4 Competitive Profile Matrix ( matrix CPM ): 13 1.5 Analysis of internal environment 13 1.3 Ability to research and development of technology (R&D) 14 1.4 Product capacity, infrastructure: 14 1.5 Performance capacity in Marketing, Brand of the enterprise: 15 1.6 Matrix of evaluation of internal factors – IFE 15 1.7 Selection of appropriate strategy: 16 Team exersice 4.X0610 Subject: Strategica Management Page 5 TRAINING COURSE MASTER OF INTERNATIONAL BUSINESS MANAGEMENT Global Advanced Master of Business Administration 1.1 Common competitive strategy 16 1.8 General Matrix SWOT 16 1.9 Boston Consulting Group Matrix (BCG matrix): 17 1.10 Quantitative Strategic Planning Matrix (QSPM matrix) 17 CHAPTER 2: PRACTICAL OPERATION AND DEVELOPMENT STRATEGY OF VTC 19 2.1 General information about VTC Corporation 19 2.1 Process of establishment and development of VTC 19 2.2 Main characteristics of business of VTC: 20 2.3 Structure, organization and operation of VTC Corporation from 2005 to 2010: 21 2.4 Organizational structure of VTC 24 2.2 Analysis of external environment: 27 2.1 Analysis of the general model - PEST analysis 27 2.2 Analysis of the environment of the business: 30 2.3 External oppotunities and challenges for VTC: 35 2.4 Formation of external factor evaluation matrix ( EFE matrix ) 36 2.5 Comparison by competitive profile matrix CPM 37 2.6 Analysis of internal environment of the firm: 38 2.1 Analysis of financial capability: 38 2.2 Human resources analysis: 39 2.3 Technology development and research ability analysis ( R&D): 41 2.4 Productive capacity and infrastructure: 43 2.5 Marketing operation capacity, trade name of company: 48 2.7 Strength and weakness points of VTC: 49 2.8 Internal factor evaluation matrix (IFE matrix) : 51 2.9 Strategy results during 2005-2010 52 CHAPTER III: STRATEGY OF VTC DURING 2012 – 2015 TO DEVELOP AS A MULTIMEDIA GROUP 54 3.1 Vision, and strategic targets for development of VTC 54 Team exersice 4.X0610 Subject: Strategica Management Page 6 TRAINING COURSE MASTER OF INTERNATIONAL BUSINESS MANAGEMENT Global Advanced Master of Business Administration 3.2 Main targets for development of VTC by 2015 54 3.2 Development and selection of strategy of VTC Group by 2015 56 3.3 Analysis of of strategy: 60 3.1 Strategy 1: Development of IPTV IPTV market for overseas Vietnamese people in Europe; 60 3.2 Strategy to develop new product – 3D TV in the country 72 3.3 Strategy to build VTC into a Multi-media Communications Group to 2015 76 ABBREVIATIONS No. Abbreviations Explanation 1 VTC Multi-media Telecommunication Corporation 2 DN The enterprise LIST OF TABLES SWOT EFE Matrix Table 1.1 13 CPMQSPM Matrix Table 1.3 IFE Matrix 16 Table 1.4 SWOT Matrix 18 Table 1.5 BCG Matrix 19 Table 1.6 QSPM Matrix 20 Table 2.1 Business plan and result from 2005-2010 27 Table 2.2 Formation of external factor evaluation matrix ( EFE matrix ) 38 Table 2.3 Comparison by competitive profile matrix CPM 39 Table 2.4 Analysis of financial capability 40 Human resources development situation and qualification standard of Table 2.5 VTC’s employees for a period 2005-2010 42 Table 2.6 Technical and material facilities of VTC up to 31/12/2010 46 Number, standards of the broadcast TV channels of VTC digital TV Table 2.7 station up to 12/2010 48 Table 2.8 Internal factor evaluation matrix (IFE matrix) 54 Economic development indices of VTC Group for 2011-2015TOWS Table 3.1 Matrix 58 Establish the TOWS BCG Matrix Table 3.3 Turnover of year 2010 for 04 typical services of VTC Table Using QSPM matrix to select the best strategy 60 3.43 Table Proposed business criteria of VTC from 2012 – 2015 Team exersice 4.X0610 Subject: Strategica Management Page 7 TRAINING COURSE MASTER OF INTERNATIONAL BUSINESS MANAGEMENT Global Advanced Master of Business Administration 3.54 62Summary list of equipments under estimated investment Table 3.6 Summarize comparison between USA Market and European Market Table 3.7 Expected expense for service investment LIST OF FIGURES Figure 1.1 Process to develop the business strategy 10 Figure 1.2 Five forces Model of Michel E.1 Appendix Organizational structure of VTC Corporation Revenue and Cost in International market is proposed in the first 3 Appendix year as follows: 67 1Figure 2.2 Diagram of VTC’s Business Production growth for a period of 2005 – 2010 Appendix : Proposed initial investment costs on International market 67 2Figure 3.1 BCG Matrix (Relative market in the industry) Proposed initial investment on Local Market for implementing Appendix 3.
strategy to 2015 68 Figure 3.2 General chart Detailed description about new organization of VTC for implementing Appendix 4 strategy to 2015 ( Model at the end of Appendix) 68 Appendix 5 Turnover of year 2010 for 04 typical services of VTC 75 Appendix 6 Density structure of lines of business of VTC 76 Figure 3.3 Development Chart Figure 3.4 Management system Figure 3.5 Density Structure of Lines of Business of VTC Figure 3.6 Organization Structure of Vietnam Multimedia Group PREAMBLE 1. Necessity of the Study The Global economic integration is an inevitable trend and an objective requirement for any country in the development process. This trend is more and more clearly established, particularly in the market economy which is Team exersice 4.X0610 Subject: Strategica Management Page 8 TRAINING COURSE MASTER OF INTERNATIONAL BUSINESS MANAGEMENT Global Advanced Master of Business Administration becoming a common playing field for all countries; it both facilitates the cooperation condition but also makes the competition process becoming severe. For VTC Media Communication Corporation, after 20 years of renovation it has achieved a certain results which contributed to the economic growth such as provision of television services, increasingly expanding and development of digital content and telecommunications therefore attracted customers and partly contributed to the widening social-economic information network and contributed to the country’s growth.
Specification for the domestic market, the accedence of AVG, K + to television section, to Vinagame in digital content section, to FPT in the field of game online. which brought a high revenue for VTC over the past years. The stiff competition has caused revenue and profit of the VTC significantly reduced in 2011. Revenue of 2011 was expected reaching 9,800 billion.
Compared to 10,700 billion of 2010, the growth speed fell 8.4% over the previous year, and the market stocks have been shared. During integration process VTC and other organizations are required to directly compete with each other for surviving and growing. If VTC wants to maintain his profitability and competitiveness it needs to always innovate and develop in all aspects: capital, technology, service, organization, management skill, quality of risk control system as well as constantly improving reputation and brand name. Entering the integration, the VTC Corporation will have to face the increasingly fierce competition Tthus making the continued development strategy for the VTC Corporation in period of 20112012-2015 is a critical problem.
As a group of students whose members are working in many industries such as banking, transportation, oil and gas and particularly one student is now working in the VTC Corporation therefore the team decided to select topic of our study as follows: Team exersice 4.