UNIVERSITY OF ECONOMIC HO CHI MINH CITY International School of Business ------------------------------- Le Thi Hong Huy INEFFECTIVE SALES MANAGEMENT OF JUPITER LOGISTICS VIETNAM JOINT STOCK COMPANY MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City - 2018 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMIC HO CHI MINH CITY International School of Business ------------------------------- Le Thi Hong Huy INEFFECTIVE SALES MANAGEMENT OF JUPITER LOGISTICS VIETNAM JOINT STOCK COMPANY MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Dr. Pham Phu Quoc Ho Chi Minh City - 2018 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com SUPERVISOR’S REPORT ON THE THESIS PROPOSAL SUBMITTED FOR DEGREE OF MASTER of BUSINESS ADMINISTRATION The thesis proposal title: INEFFECTIVE SALES MANAGEMENT OF JUPITER LOGISTICS VIETNAM JOINT STOCK COMPANY Student Name: Le Thi Hong Huy Supervisor: Dr. Pham Phu Quoc 1. General comments: • Remarks on the student’s attitude: …………………………………………………………………………… …………………………………………………………………………… • Remarks on the assignment’s academic quality: …………………………………………………………………………… …………………………………………………………………………… 2.
Overall assessment: Meet requirement for submitting Not meet requirement for submitting 3. Other remarks: − Did the student follow the report schedule? Yes No Other…………………………. − The Turnitin plagiarism percentage: Supervisor’s signature LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CONTENTS EXECUTIVE SUMMARY. Symptoms of the problem.
Proposed solution and plan. The 1st Aspect – Sales team. The 2nd Aspect – Sales support. The 3rd Aspect – Sales manager.
The 4th Aspect – Sales Management. 47 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com EXECUTIVE SUMMARY This thesis is conducted from understanding and approaching the real company Jupiter Logistics Vietnam in order to discover the reasons behind the significant decline in sales in the last three years since 2014. At the same time solutions will be proposed to solve the problem of sales of this business. The net sales of the head office in Ho Chi Minh City was down sharply from 7.29%, respectively, while the remaining two branches Ha Noi and Hai Duong still had a very good growth especially in 2016.
Further investigations reveal that the decrease in sales of forwarding services was the main reason for the problem in the net sales of Head Office. In addition, with the loss of a longtime client and not having any new clients in the last three years, it has been somewhat telling the story behind the company. Based on Problem Solving in Organization, the content of this thesis goes into the underlying cause. This thesis is based on the information collected through: - intake process: in-depth interview with CFO - Mrs.
Le Thi Ha - Financial statement of the stage 2014-2016 - in-depth interview with Sales and Marketing manager - Mr. Yoichi Murata - in-depth interview with Chairman - Mr. Yutaka Kawasaki - online research with company’s customers After the investigation and analysis, Ineffective sales management was identified as a central problem and the five causes were: Problem in company structure, Lack of sales force, Poor sales leadership, Conflict of interest and Limited sales strategy. After carefully reviewing and considering the elements as well as referencing the research and practical examples, the solution for the company is based on four aspects: sales team, sales support, sales manager and sales management.
With each aspect, action plans are launched with the expected time and cost and should be implemented individually to minimize costs as well as to facilitate timely intervention when results are not satisfactory. 5 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com JUPITER LOGISTICS VIETNAM JOINT STOCK COMPANY 1. Background information Jupiter Logistics Vietnam Joint Stock Company was incorporated as a joint stock company under the enterprise registration certificate No.0306355377 initial registration dated 17 November 2008. Actually, Jupiter Logistics Vietnam Joint Stock Company was separated from Jupiter Pacific Forwarding Joint Stock Company which is a subsidiary of Japan Airline.1 demonstrates differences of shareholders between Jupiter Logistics and Jupiter Pacific Forwarding Joint Stock Company.1 Shareholders structure comparison Jupiter Logistics Vietnam Joint Stock Jupiter Pacific Forwarding Joint Stock Company Company Shareholders Shareholders 20% 49% 51% 80% Japanese shareholders Japanese shareholders Vietnamese shareholders Vietnamese shareholders 6 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com The company have one head office and two branches as follows: - Head office is located at No.112 Hong Ha Street, Ward 2, Tan Binh District, Ho Chi Minh City, Vietnam.
- The Hanoi branch is allocated at Group 8, Hau Duong Hamlet, Kim Chung Commune, Dong Anh District, Hanoi City, Viet Nam. - The Hai Duong branch is located at Lot B7, Phuc Dien Industrial Park, Cam Giang District, Hai Duong Province, Vietnam. This branch was set up to conduct operating of business cooperation contract between 3 parties. The principal activities of the company are to provide three kinds of services which are: warehousing, trucking and cargo forwarding services.
About 90% customers are Japanese. Three direct competitors are SAGAWA, ALL NIPON and YUSEN. The members of the Board of Management and company structure are showed in the table 1.1 The Board of Management Position Name Chairman Mr. Yutaka Kawasaki Mr.
Hoang Ngoc Oanh Members Mr. Nguyen Quoc Khanh Mr. Eisuke Sawada Figure 1.2 General Company structure Chairman Sales & Administration Accounting Operation Warehouse Trucking team Marketing 7 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Symptoms of the problem In general, among Head Office and two other branches, Hanoi branch often contributes about 50% of total net sales of the whole company, Head Office takes the next rank with 18% and Hai Duong branch contributes about 11%.
However, this percentage in contribution of each branch has changed considerably recently, especially Head Office in Ho Chi Minh City. The information of percentage of contribution can be found in table 2.1 Percentage of contribution of each branch/office in total net sales from 2014 to 2016 2014 2015 2016 Head Office 21,508,890,365 19,882,801,804 17,836,232,814 (+/-)Compared to previous year net - -7.29% sales Percentage of contribution 17.91% Hanoi Branch 60,117,088,413 62,854,017,348 80,751,904,700 (+/-)Compared to previous year net - 4.48% sales Percentage of contribution 49.04% Hai Duong Branch 12,794,262,539 13,903,633,360 16,195,330,701 (+/-)Compared to previous year net - 8.48% sales Percentage of contribution 10.45% Total net sales 121,637,280,421 117,282,383,992 112,100,488,863 Ha Noi and Hai Duong Branches continue to increase sales in the past three years. In particular, in 2016, the sales growth rate in Hanoi increased rapidly to 28. At the same time, the contribution accounted for 72.04% of the total net sales of the company.
Hai Duong Branch is the smallest of the three branches, but sales growth has not declined. In 2016, sales growth was about 16.48% last year and sales contribution changed from 11. 8 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Only net sales in Ho Chi Minh decreased suddenly in 2015 and 2016 and this led to the decrease in total net sales of Jupiter Logistics Vietnam Joint Stock Company. The decrease in sales of Forwarding services was the main reason for the problem in net sales of Head Office.
The information of sales in detail is showed in table 2. Forwarding services include air export, air import, sea export, sea import and domestics services.2 Total sales of Ho Chi Minh Office (in VND) from 2014 to 2016 2014 2015 2016 AIR EXPORT 3,725,663,906 2,712,482,169 1,858,679,347 AIR IMPORT 10,639,572 11,042,155 14,330,475 SEA EXPORT 11,716,002 0 0 FORWARDING SEA IMPORT 52,811,753 88,763,159 0 DOMESTICS 2,452,159,552 1,939,503,225 1,312,513,393 SERVICES (+/-)Compared to previous year - -24.96% WAREHOUSE 7,903,211,426 7,829,862,054 7,791,322,608 (+/-)Compared to previous year - -0.49% TRUCKING 7,352,688,154 7,301,149,042 6,859,386,991 (+/-)Compared to previous year - -0.05% TOTAL SALES 21,508,890,365 19,882,801,804 17,836,232,814 Figure 2.1 Changes in total sales in Ho Chi Minh (in VND) from 2014 to 2016 FORWARDING WAREHOUSE TRUCKING 9,000,000,000 8,000,000,000 7,000,000,000 6,000,000,000 5,000,000,000 4,000,000,000 3,000,000,000 2,000,000,000 1,000,000,000 0 2014 2015 2016 9 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com It is easy to see that in three types of services, logistics and warehousing have not changed significantly in net sales for the three years since 2014. The only change with rapid sales decline is the forwarding service. Net sales in 2016 for forwarding is only about half that of net sales in 2014.
In the three years since 2014, the company has made a significant change in sales. Trucking and Warehouse services accounted for more than two-third of sales. Forwarding services accounted for about one-third of sales in 2014, but then it dropped dramatically and only fell to 17.2 shows a visual representation of the change in the revenue contribution ratio of the three types of company services.2 The change in the revenue contribution ratio Actual sales of trucking and warehousing in the period 2014-2016 were not large fluctuations, so the contribution of these two objects increased was due to the decline in sales of the forwarding service. This is not a good sign.
10 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Situation Analysis In this section we will have three main analysis areas: problem identification, problem justification, and causes validation. In this analysis, we will go deeper into the situation and analyze the information as well as the data collected through the interview process and the support from the company. However, this information can not avoid certain biases or subjective opinions of individuals interviewed.
So the theories and literature review have been referenced and added to increase the objectivity and persuasiveness of the problem analyzed. The two cause-effect maps drawn in this section give you a more intuitive view of the problem being analyzed. The initial cause-effect map is primarily based on information and data collected from the company. The final cause-effect map is the completed version after performing the problem justification and cause validation.
Problem identification As we know net sales are calculated based on the following formula: Net Sales = Gross Sales - Sales of Returns and Allowances Thus the problem of net sales decreases primarily due to decrease in Gross sales (which is calculated by the number of sales multiplied by the selling price) and increase in Sales of Returns and Allowances. Firstly, income statements in the company's financial statements show that less deductions including sales returns, allowances, and discounts are recorded as zero. So the decline in net sales stemmed from the decline in gross sales, including total unit sold and sale price per unit. However, “There was no significant change in price of each service from 2014 to 2016 so the reason of price could be eliminated from the list of causes of sales decrease.”, said the CFO.
So the price factor is eliminated so the problem is the number of order is reduced or in other words in this case is the number of customers decreased. Up to now, the three types of services that the company provides have a distinct customer base. Generally, warehousing has the highest customer base and is relatively stable. 11 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Trucking service has constant number of customers over the years, the most fluctuating is the forwarding service.
Details of this change are illustrated in Figure 3.1 Changes in the number of customers in Head Office year-over-year 5 The number of customers 4 3 2 1 0 2006 2008 2010 2012 2014 2016 2018 Year Forwarding Warehouse Trucking Table 3.1 The number of customers in Head Office over years 2008 2009 2010 2011 2012 2013 2014 2015 2016 Forwarding 1 1 2 3 3 3 3 2 2 Warehouse 2 2 3 4 4 4 4 4 4 Trucking 3 3 3 3 3 3 3 3 3 Total 6 6 8 10 10 10 10 9 9 According to the CFO, “In 2014, there were total 3 fixed customers using forwarding services. In 2015, the Head Office lost 1 customer and from then the number of customers still has been stopped at 2”. The decline in the number of forwarding customers has marked a sharp decline in sales over the past three years.