Reviewing of 10 research paper about corporate strategies and apply them into Viettel Telecom

Viettel Telecom - International market entry strategy .... The purpose of this paper is to investigate the telecommunication market situations over the world to help Viettel telecom come

MIDTERM EXAMINATION

Subject: Strategy Formulation and Implementation

Lecturer: Dr Nguyen Ngoc Duy Phuong

Reviewing of 10 research paper about corporate strategies

and apply them into Viettel Telecom

Group 12:

1 Lê Thị Thuý Quỳnh – BABAIU19305

2 Trần Nguyễn Nhật Quyên – BABAIU19300

3 Lê Thị Thiên Thảo – BABAIU19323

4 Phạm Thị Thu Thảo – BABAIU19319

5 Nguyễn Thu Thảo – BABAIU19324

Table of Content:

Abstract 3

Introduction 3

Literature Review 4

1 Offensive strategies 4

1.1 Market penetration 4

1.2 Product Development 6

1.3 Market development 7

2 International market strategies 7

2.1 Subsidiary 7

2.2 Foreign market entry 8

2.3 Joint venture 9

3 Outsourcing 10

Apply selected strategies into Viettel Telecom 11

1 Viettel Telecom - International market entry strategy 11

1.1 General overview of Viettel's international market penetration process 11

1.2 Evaluation of Viettel's international market penetration strategy in recent years 12

1.3 Solutions to complete Viettel’s international market penetration strategy 13

2 Viettel Telecom – Offensive strategy 14

Conclusion 15

Reference 16

Abstract

Viettel is a telecommunication company that is very large and popular in Vietnam, so they have to change and apply many new strategies to gain inferiority towards its competitors This review paper intends to bring a better knowledge of two strategies in the telecom industry that can apply to Viettel This review article provides a review of 10 papers dating from 2002 to

2019 that relate to the telecom industry The purpose of this paper is to investigate the telecommunication market situations over the world to help Viettel telecom come up with appropriate strategies that can improve the situation The paper summarizes the definitions and evidences of the offensive strategy, and the international market strategies Concepts of two strategies had been used widely in companies and studied in many papers

• Keywords : Telecom industry, Viettel, the offensive strategy, the international market

strategies, literature review

Introduction

Vietnam is currently integrating into the regional economy as well as the global economy This has resulted in a plethora of development opportunities for Vietnamese businesses However, because of the turbulent economic environment, which provides possibilities as well

as pressure for Vietnamese businesses to survive and grow, companies must adopt business strategies that are appropriate for the current scenario

In terms of telecommunications, it can be noted that existing significant firms in the field, such

as Vinaphone, Mobiphone, and others, all have a slow growth rate and a falling market share, while Viettel Telecom is always expanding and reaching out As a result, Viettel swiftly grew

to become the country's largest telecommunications company after 25 years of existence and development The business tactics that Viettel has established have undoubtedly played a vital role in the company's success However, maintaining its market position in today's fiercely competitive environment is no easy task, necessitating the company's strategy building to be regularly upgraded to match clients' wants However, within the scope of this research, we

only focuses on the entry strategies, offensive strategies and outsourcing strategy of large telecommunications companies in many countries, thereby drawing lessons from those strategies and applying them to Viettel

Literature Review

1 Offensive strategies

1.1 Market penetration

- Personal selling and trade promotions are clearly the most effective promotional techniques

with which Essar Telecom Kenya Limited engages its sales team to make direct contact with clients in order to market the company's products The researcher finds that the company has used both a pull and a push technique as a promotional strategy based on the findings of the study Essar Telecom Kenya Limited has been able to stay up with the competition in the telecommunications industry by employing a variety of market penetration techniques for its products in today's environment of fierce competition

The study says that pricing penetration methods like setting lower prices rather than higher prices to obtain a large and dominant market share have been a successful penetration pricing strategy that has resulted in huge sales volumes and market shares

It goes on to say that one of the company's methods for growing its market share is to use market segmentation Essar Telecom Kenya Limited's differentiation approach is significantly relevant to its marketing goal

- Income Level and Monthly Expenses of Telecommunication Service for Different Age Groups Firstly, with people under 19, they have low income levels So, China Mobile and China Unicom should develop tailor-customized service packages for young people, especially students, who use SMS frequently but seldom make phone calls Senior high school students had a mobile phone but didn‟t have much money to spend on mobile services “SMS” and “Phone Call” became the most important functions They also like cheap mobile services, especially free “SMS” allowance If China Unicom could provide them cheaper service

packages with more free “SMS”, more young customers could be drawn to it Secondly, to the age group of 19-30 : SMS, Phone Call and Internet were used frequently So, providing better service with competitive prices will help China Unicom gain more customers and expand market share The group of 19-30 also have unclear preference in mobile services “SMS” was still the favorite communication method among young people while the use of “MMS” had increased when compared to people under 19 “Internet” usage had been popular among this group of people “Phone call” was also being used often So “3G” network can be an opportunity for China Unicom to chat up China Mobile and expand customer groups through the attractiveness of Internet services.Thirdly, to the age group of 31-60 : China Unicom's market share was beginning to catch up to China Mobile's But the market share of China Mobile was nearly one time greater than the market share of China Unicom The problem for China Unicom was how to raise their attention and interest and motivate customers to buy their product They also are the major labor force and they are responsible for the society’s major productivity They have the most purchasing power but only use the simplest phone calls “SMS” was the second most popular function So, China Unicom should create new service packages that can provide them with useful and economical information services Lastly, to people over 60 who are retired, making phone calls with relatives is the most popular utility They also were phoned by their relatives rather than dialing themselves that generate

no direct expense So China Unicom should find a new consuming pattern and purchasing habit for them

Income Level and Monthly Expenses of Telecommunication Service for different occupations Firstly, “Education” sector is the major group that use “SMS” frequently The second and third largest “SMS” groups were “Economy” and “Industry” China Unicom can provide them with service packages that give free “SMS” than ordinary packages “Phone Call” can be less discounted to balance the package costs and remain competitive pricing And

“MMS” was not popular for customers in Anqing City “Education” were still the major users

of this function Secondly, “Industry” sector and “Economy” sector are the major groups that use “Phone Call” most frequently Due to their occupations, direct and instant phone calls communicate better with their business partners than indirect “SMS” or “MMS” People who were working in “Industry” sector and “Economy” sector preferred using “Phone Call” So,

China Unicom can use some tailor-made service packages which offer phone call discounts with a few free “SMS” to attract business-related people and mid-aged working people Additionally, Students and young working people are the major customers of Internet functions And “Industry” sector and “Economy” sector had stronger purchasing power than students and had similar “Mobile Internet” service requirements, but their expenses on

“Mobile Internet Service” were not as high as that of students So, China Unicom utilizes their advantages in 3G network and standard to get internet users Economical Internet flow volume packages can be added as additional packages to the main service package

1.2 Product Development

- Product development is an important factor determining the success or failure of businesses

in the telecommunications industry Take for example three telecommunication companies in Kenya, namely Safaricom, Airtel and Telkom They all implement product development strategies very well

Safaricom, Airtel and Telkom are all focused on new goods with one goal: optimizing customer fit and reducing time-to-market While these goals may pose conflicting requirements for the organization, there is growing evidence that companies can succeed because of the products they have

Through many surveys, companies have received positive feedback from customers when continuously upgrading products, integrating modern technology when it is launched This allows them to better serve consumer needs, stay ahead of slower competitors, and build brand loyalty Many studies have found a strong positive relationship between the speed and commercial success of new products However, the failure rate of new products is still very high Many R&D projects never produce a commercial product, and between 33% and 60%

of all new product launches do not generate economic returns Therefore, the goal that telecommunication companies in Kenya are aiming for is to reduce time to market by making the product development process more efficient without compromising product or service quality

1.3 Market development

- Through its aspirations to develop a countrywide fiber optic network, KC's offensive strategy focused on spreading its business communications services (through its Torch subsidiary) to leading UK regional business clusters This linked (at least originally) the four major corporate centers of Leeds, London (through COLT), Birmingham, and Manchester

The move of KC into the East Riding of Yorkshire, which is next to its Kingston-upon-Hull base, is the second part of its offensive plan Because of the enormous number of previous inhabitants and commuters to Kingston-upon-Hull, KC has a degree of brand loyalty and familiarity

2 International market strategies

2.1 Subsidiary

- They should improve the partnership with Vodafone by comparing Vodacom's operations against worldwide standards of excellence, in addition to having exclusive access to new product launches and global research and development skills Vodacom's value proposition and growth strategy are built around the advantages of being a Vodafone subsidiary Expertise and experience in communications are shared Firstly, as the business matures, Vodacom will need worldwide competence Secondly, Vodafone has a very inventive and new style of thinking, with access to world-class research and product innovation Third, cost-cutting procurement through global economies of scale Vodacom has reaped the benefits of Vodafone's purchasing power, and is now able to sell certain handsets at significantly lower pricing The next step is to compare your operations to worldwide criteria of excellence The Vodafone deal has given me a lot of confidence in being a part of a global company, and it will be good for business Finally, there is a strong brand association Vodafone has a great brand that will help Vodacom reinvent itself

2.2 Foreign market entry

- After noting that the Rwandan telecom market was a good market with a high degree of demand for telecommunication services, Tigo chose the best entry strategy for effective operations of the firms As a result of what the corporation discovered, bigger returns were expected

According to the findings, Tigo employed a foreign direct investment approach to join the Rwandan telecom industry by opening its branches in all of Rwanda's districts, focusing on new markets, penetrating current markets, and developing new distribution channels Firm specific advantages such as ownership of proprietary products or technology, as well as a desire to decrease administrative overlap and better integrate new product development and launch initiatives, encouraged the company to pursue this method

- Huawei began to standardize advertising when its products entered the European market initially; advertising was often the sole leader and representative This effectively reduces costs, and to a large extent, it can well implement and control overall promotion goals Then they assess the situation in important locations, devise action plans, dispatch individuals to various parts of the country, and prepare for permanent residence To keep information flowing and undertake ongoing product training, product marketers of Huawei and customers actively communicate with one another In addition, the company finds out the difference between the European market and the domestic market and takes advantage of the relationship between the embassies of the market countries in China

Huawei's image is cultivated through the presentation Exhibiting photographs and commercial products is a key way to disseminate them successfully Huawei holds a large exhibition every time it enters a new school The expo can be described as showcasing Huawei's commercial image and a platform for face-to-face meetings The purpose of the operators participating in the exhibition should be to highlight operators' progress and demonstrate high-level strength to the general public and experts at the exhibition Aviation

displays products, services, and applications and is the driving factor behind business growth The competitors are close in proximity, and if they do just a little better, they will create a dramatic contrast against the fake Aviation displays products, services, and applications and

is the driving factor behind business growth The competitors are close in proximity, and if they do just a little better, they will create a dramatic contrast against the fake

- International market strategies are often favored by Chinese, Korean and Italian companies Chinese telecommunications companies like ZTE and Huawei have done a great job of entering the African market

While investing in Africa, Huawei and ZTE are more focused on customer needs and requirements They have established research and development centers in Africa, understand their customers well, then develop specific strategies for R&D, joint ventures, project contracting, mergers and acquisitions, as well as management and operation of telecommunications ZTE and Huawei always work with local telecommunications partners and provide services that make customers happy ZTE, on the other hand, costs 30 to 40 percent less than its European competitors Improved technical capacity, low production costs, access to state funding and state political support give Chinese telecommunications companies

a competitive edge Huawei and ZTE not only have political relations with the Chinese government but also with the host country's government In recent years, China's outward FDI model has really developed Part of that is thanks to their very good implementation of international market strategies, especially export strategies

2.3 Joint venture

- Bangladesh mobile telecommunications market remains attractive for foreign companies, and the optimal entry strategy is a joint venture to enter the attractive industry For the same reason, Grameenphone has used this method to expand enter the market The international shareholder of the company brings technological and business management expertise, while the local shareholder provides a presence throughout Bangladesh and a deep understanding of

its economy Besides, they also use a promotion strategy The company advertises in every available medium, including television, radio, print, the Internet, bus bodies, and billboards Operators spend a lot of money on marketing, and they frequently hire top media producers and performers to direct and act in TV commercials Among our country's telecom companies, Grameenphone has the most aggressive promotional campaign Essentially, Grameenphone employs advertising as a promotional technique to accomplish a communication task with a specified target demographic at a specific time frame GP offers a variety of promos to its subscribers, including bonus talk time for night calls, free SMS, free t-shirt, and cap, among others GP advertised their product using both electronic and non-electronic media In addition, they have launched a new campaign called "Pothe Pothe" to boost sales

3 Outsourcing

- Airtel first delegated management of all business operations to IBM8 It cut capital costs and improved customer experience by leveraging IBM's information technology (IT) infrastructure and standardized business frameworks

It also outsourced telecom networks to Ericsson and Nokia, with the intention of receiving paid for the use of its network infrastructure rather than an upfront payment Airtel's capital expenses were once again cut as a result of this Airtel decreased the service rate for its customers by adding new users without incurring extra fixed costs Arrangements have been struck with software service providers in addition to network infrastructure outsourcing

The payment structure for outsourcing is an important component of the Airtel outsourcing contract Rather than paying for services based on the number of hours done or some other traditional approach, Airtel's outsourcing partners are compensated based on the company's revenue growth, which means that as the company expands and its demands on its service providers grow, so does their income Furthermore, the customer base grows without requiring Airtel, which employs only a few hundred people, to hire more people