Luận văn thạc sĩ quản trị kinh doanh quốc tế MBA (2)

CHAPTER 2: ANALYSIS OF BASIS OF DEVELOPMENT STRATEGY PLANNING FOR GTEL MOBILE .... The successes of the telecommunication industry in general and of the mobile communication industry in

(GAMBA01.X02) l Group No.01

Class: GAMBA01.X02

GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM

CAPSTONE PROJECT REPORT Proposed Development Strategies

For Gtel mobile Period of 2010 – 2015

Group No.01 – GaMBA01.X02 Student: Tran Ngoc Duy (C)

Nguyen Thi Thu Huyen Nguyen Tuan Dung Nguyen Huu Tinh Phan Thanh Tuan

CONFIRMATION

COMMITMENT

To: - MBA program – Griggs University

- ETC – Vietnam national university, Hanoi

We are member of group 1 – Class X02, Griggs University in MBA program, with

We are committed to:

Content in "Capstone project report" is produced by our team We do not copy any material from any earlier These are analyzed separately reflect the views of our team on the issue yet

All data related to Gtel mobile companies are provided and approved by company management

Article cited some of concepts, theoretical models of some scholars, the cited authors have been allowed in many books, magazines, articles or previous studies

Our team has to comply with this requirement is a product that reflected collective spirit and is a product of the whole group

We are committed to all the above are true and complete responsibility for those problems with the program!

Group 1 – GaMBA01.X02

TABLE OF CONTENTS

CONFIRMATION I COMMITMENT II TABLE OF CONTENTS III LIST OF ABBREVIATIONS V LIST OF TABLES VI LIST OF FIGURES VII

INTRODUCTION 1

CHAPTER 1: THEORETICAL BASIS TO BUILD UP STRATEGIES FOR GTEL MOBILE 3

1.1 Concepts and theories 3

1.1.1 Strategies 3

1.1.2 Levels and types of strategy 4

1.1.3 Competition strategies 6

1.1.3.1 Cost leadership strategy 6

1.1.3.2 Differentiation strategy 7

1.1.3.3 Focus strategy 8

1.1.4 Strategic Management 9

1.2 Theoretical model proposed to be applied in the research 11

1.2.1 External Environment Analysis 11

1.2.1.1 Macro environment study 11

1.2.1.2 Study on micro-environment 13

1.2.2 Internal environment analysis 14

1.3 Research tools & methods 16

1.3.1 Matrix of external factor evaluation -EFE 16

1.3.2 Matrix of internal factor evaluation - IFE 17

1.3.3 Internal, external factor evaluation matrix- IE 17

1.3.4 SWOT / TOWS matrix 18

CHAPTER 2: ANALYSIS OF BASIS OF DEVELOPMENT STRATEGY

PLANNING FOR GTEL MOBILE 20

2.1 Overview of Gtel Mobile 20

2.1.1 Company’s history 20

2.1.2 Strategies 21

2.1.3 Brand 21

2.1.4 Social Responsibilities 22

2.1.5 Human resources 22

2.1.6 Service products and cost packages 23

2.2 Results of production and business activities in recent years 24

2.3 Analysis of strategic issues and management in Gtel Mobile 28

2.3.1 Macro environment study 28

2.3.2 Micro environment study 33

2.3.3 Internal environment analysis 47

2.3.4 EFE, IFE, I.E Matrices 56

2.3.5 SWOT Analysis 60

2.4 Shortcomings and their reasons 66

CHAPTER 3: PROPOSED DEVELOPMENT STRATEGIES FOR GTEL MOBILE IN THE PERIOD OF 2010-2015 68

3.1 Proposed development strategies 68

3.2 Proposed strategies, goals and schedule for Dept 74

3.2.1 Network Strategy 74

3.2.2 Marketing Strategy 78

3.2.3 Human Resource Strategy 85

3.3 Limitations of the reports and subsequent research directions 86

CONCLUSION AND RECOMMENDATION 88

REFERENCES 90

APPENDICS 91

List of Abbreviations

List of Figures

FIGURE 1.1: STRATEGIC MANAGEMENT MODEL 10

FIGURE 1.2: PEST MODEL 12

FIGURE 1.3: FIVE-FORCE MODEL 14

FIGURE 1.4: VALUE CHAIN OF MICHAEL PORTER 16

FIGURE 1.5: IE MATRIX 18

FIGURE 1.6: SWOT MATRIX 19

FIGURE 2.1: ORGANIZATIONAL CHART OF GTEL MOBILE 23

FIGURE 2.2: THE COVERAGE MAP OF GTEL MOBILE UP TO 3 / 2010 26

FIGURE 2.3: GROWTH CHART OF SUBSCRIBERS OF GTEL MOBILE 28

FIGURE 2.4: THE GROWTH CHART OF MOBILE SUBSCRIBERS 37

FIGURE 2.5: VIETNAM MOBILE MARKET SHARES 39

FIGURE 2.6: I.E MATRIX 59

FIGURE 3.1: ESTIMATED DEVELOPMENT OF BTSS IN YEARS 75

FIGURE 3.2: ESTIMATED DEVELOPMENT OF NETWORK CAPACITY 76

FIGURE 3.3: MARKET SHARE EXPECTED THROUGH THE YEAR 79

FIGURE 3.4: SUBSCRIBERS PROPOSED TO DEVELOP 79

Although mobile communication is only a new industry in Vietnam with nearly 20 years of existence, it has made great contribution to the national development in both the regional economic crisis (1997- 1998) and the global economic crisis (2008-2009) The success achieved by the industry in the past years has been shown through the increasing telephone density that reached 168.4 units/

100 persons (Source from the Ministry of Information - Communications) This is the rate that no country with the same GDP like Vietnam can be achieve Now, the use of mobile communication services has become too easy, like buying a simple item of goods in the market or in the street

The successes of the telecommunication industry in general and of the mobile communication industry in particular also shows that the market competition

is very big, the speed of development is very hot and therefore; the strategic planning is even more important for the enterprise to identify opportunities, to anticipate difficulties, to prepare resources, overcome weaknesses to successfully make full use of opportunities of the market For Gtel mobile- an enterprise that has just joined the market since 2008, this work needs to be done right from the start However, many conditions and policies have changed since the enterprise joined the market, which requires the enterprise to re-build its strategies in the new situations

As an employee in the company with the hope of applying knowledge learnt, the student Tran Ngoc Duy has suggested that we chose Gtel mobile to apply our knowledge in practice through the article "Proposed strategies for Gtel Mobile in the period 2010-2015

Our purpose of this capstone is applying all knowledge from course to analyzing real situation of company in market Other way we hope our analysis and recommendations may become useful reference for the management of Gtel mobile when building the development strategies for the company!

In this article, our group has used part of the strategic management model by Fred R David to strategic planning proposals In particular analysis, we also used many analysis methods such as PEST, five-forces model, value chain model the results of the analysis were consolidated in matrixes: EFE, IFE, IE, SWOT that helped identify strategies that could be used Our group will select a strategy that is considered most suitable among such strategies to propose and build up solutions for the enterprise

The article is divided into three main chapters:

Chapter 1: refers to a basic of theories and theoretical models used for

analysis in the report

Chapter 2: Applies theoretical basis in analysis of the actual situations in

Gtel mobile enterprise

Chapter 3: Through the analysis in chapter 2, chooses proposed

development strategies for the enterprise

During the implementation, our group has received much help from the enterprise as well as teachers from the program Our group would like to extend our thanks to Gtel Mobile Company, teachers and the management of MBA program - Griggs University for helping us completes this article Since this article was the application of new knowledge learnt to practice We look forward to receiving more opinions in order to better finalize the content of the report!

Group 1 – GAMBA01.X02, Griggs University. 

Nowadays, the term strategy has been widely used in business and life The strategy

is sometimes expressed in the form of development strategy or competitive strategy

It is a combination of orientations and actions for each organization, enterprise, personal to exist and develop in the volatile environment In the more and more fierce integration, competition conditions, it is usually brief in explanation:

"Strategy is a combination of competitive moves and business methods that leaders

use to operate organizations" Due to the special importance of strategy and

strategic management, a number of scientists have concentrated to do research on this issue and introduced various concepts The concept of strategy is usually mentioned along with such concepts as: vision, mission, objectives and policies

Vision

Strategic vision (perspective) shows the highest, the most generalized desires, aspirations that an organization wants to achieve Vision can be considered as a road map of the organization/ enterprise in which the specific destination in the future and the way that the organization will go to reach the intended destination are shown

Mission

Mission or duty is a statement with long-term value in terms of purposes; it helps differentiate this company with that one Such statements are sometimes called business philosophy, business principles, and the company's confidence The mission statement proclaims "reasons of existence" of the company, and according

to Mr.Drucker, it is the answer for the question "what is our business work?” In

fact, the terms mission and vision sometimes make confused in use, some companies have just announced their vision without announcing their mission and vice versa while some companies have just announced their purposes

Goal/ objective

Objective is defined as designated results that an organization tries to achieve when pursuing its primary duties The identification of objectives is very important to the success of an organization since objectives help point out development orientations, evaluate results achieved, provide the basis to make plans effectively, serve as the basis for effective organization, evaluation In fact, the goal can be divided into short- and long term one The goal must reflect the

characteristics generalized through the word S M A R T: S: Specific: exact and

clear, M: Measurable): can be measured, A: Assignable: shows central issues, indicates the priority and the basis for the selection, R: Realistic should be challenging but can be done, T: Timely corresponds to a specific time

Policy

Policy is a tool to implement the strategy, a means to achieve goals Policies include instructions, rules and procedures established to support efforts to achieve the targets set forth

1.1.2 Levels and types of strategy

Previously, the strategy system in the enterprise was divided in 3 levels:

Corporate Strategy:

Among above- mentioned strategic levels, corporate strategy has always been paid attention to and played the most important part in orienting strategies of the next levels The corporate strategy can be classified into three types: Growth strategy, Hold & Maintain strategy, Harvest or Divest strategy

Growth strategy

Among previously mentioned strategies, growth strategy is the most widely used since all enterprises desire to develop more except special circumstances The growth strategy also has a number of levels and types, of which:

Concentrated growth strategy: This is the strategy that any company, product/

service that has newly joined in the market must apply, however, for each different period, various sub-strategies are applied:

Growth strategy through integration: This strategy is widely used in multinational companies or economic groups that want to improve the links in their production- business chains or enhance their competition status, strength in the market, create the new market This strategy consists of three small strategies:

Strategy for diversification of enterprise activities: This strategy is applied when

enterprises want to move into new production- business areas or create extra products and services associated with those in current production- business with the purpose of increasing their revenue This strategy covers strategies:

1.1.3 Competition strategies

Competition: Up to date, many concepts of competition have been introduced by

many scholars and institutions, yet it can be briefly understood as follows: Competition is the rivalry between individuals, organizations operating in the same activity field, to get more, and to win They may get more in terms of markets, customers, sales, profit depending on specific conditions and circumstances

Competitive Advantage: are superior advantages (capabilities) of competing entities

(individuals or organizations) in competition with its rivals

Sustainable competitive advantage: the company must continue to provide the

market with a special value that no competitors can provide

To survive in the market every enterprise must create their competitive advantages The competitive advantage is shown in two basic forms including low cost or product differentiation The combination of the two basic forms of competition with the scope of activities of the enterprise will create three general competitive strategies:

- Cost leadership strategy

- Differentiation strategy

- Focus strategy, this strategy includes two smaller directions: focus on the

cost or focus on product differentiation

1.1.3.1 Cost leadership strategy

Nature: to achieve the lowest total cost (production, administration in the sector, on

the basis of the implementation of policies focusing on the investment for construction of facilities, equipments, series production to make full use of advantages in terms of scale, reducing costs for research and development, marketing, advertisement

Objective: to create products and services with lowest costs to surpass competitors

for existence and development

Advantages:

increase or product prices reduce

materials, the company’s status will be higher when negotiating with suppliers

market

Disadvantages:

cost than competitors do; otherwise the company will lose this advantage Therefore, re-investment of modern equipments, elimination

of defected properties is of necessity

competitors, which is difficult to keep such advantages

invest in more advanced methods to get equivalent or even lower costs

catch up with customer tastes, which will reduce the competitive advantages

1.1.3.2 Differentiation strategy

Nature: To create things the whole sector recognizes "unique." Differentiation is

expressed in many forms: design, quality, labels, brands, manufacture technology, customer service

Objective: to get the competitive advantages through creating the product that is

considered unique, original to customers, satisfying customers’ demands in the way that competitors cannot do The company may fix prices dominantly, increase the revenue, achieving profit rate on the average

Advantages:

cost leadership strategy

forces these companies to create distinctive differences, which is very costly with great expenses

products to have stand

Disadvantages:

in comparison to competitors with low cost, the loyalty to the brand can no longer be kept

information to compare products with each other, hence the company must

be the first, be always ahead of competitors

sometimes customers fail to perceive

1.1.3.3 Focus strategy

Nature: only to meet the needs of a certain market segments through factors:

geography, customer objects or product characteristics

Objective: bases either on product differentiation or on cost leadership or on both

in selected market segments in order to get competitive advantages

Advantages:

grasps changes in customer tastes, makes faster improvements, discoveries than companies

differentiation

threats from alternative products

Disadvantages:

materials

which makes production costs higher

technologies, customer tastes

large-scale differentiation strategy or companies with focus strategy of higher differentiation

1.1.4 Strategic Management

Strategic management: is an art and science to establish, implement and

evaluate decisions related to various functions allowing an organization to achieve its set- forth objectives (Fred R David)

Strategic management consists of three stages:

Strategic planning stage: is the first stage that plays a very important role in the

whole strategy This stage should identify the strategic vision, mission and goals of

the organization, focus on analyzing external, internal environmental factors, identify opportunities, threats, strengths, weaknesses, on which the combination and selection of the appropriate strategy is made

Strategy implementation stage: is the stage in which the strategy is turned into

action to achieve intended objectives

Strategic assessment stage: is the stage that reviews factors to be the basis for the

current strategy, measuring the performance and implement adjusted actions

(Strategic Management Concepts and Cases by Fred R David 12 th )

Figure 1.1: Strategic management model Strategic planning: is the first stage in the three stages of strategic management This stage uses appropriate methods, tools and techniques to determine business strategies of the enterprises and each section of the enterprise in the period the strategy is specified There are many different opinions about the strategic planning procedure, currently there are two quite different concepts of strategic planning procedure:

In this article, we will use the procedure of eight steps of business strategy planning

1.2 Theoretical model proposed to be applied in the research

The strategic planning model indicates steps and the content to be conducted

It involves analyzing the macro environment (including the internal environment, external environment), the microenvironment, analyzing IE Matrix, SWOT matrix Hereinafter we will in turn point out the main academic content of such theories prior to using them to analyze the situations of the enterprises in chapter 2

1.2.1 External Environment Analysis

External environment includes factors, capacities, institutions occurring outside the enterprise It cannot be controlled by the enterprise but affects the operation and performance of the enterprise The external environment includes:

environment that covers activities of all enterprises, have direct or indirect influences on the operation of enterprises

environment It is the environment that is directly associated with each enterprise, almost all of activities and competition occurs directly in this environment

The research of the external environment aims at identifying opportunities, as well

as threats that affect the operation of the enterprise

1.2.1.1 Macro environment study

Macro-environment is defined by macro factors such as: economic, political – legal, cultural - social, natural, demographic, technical and technological conditions PEST analysis is the most commonly used when analyzing the macro environment PEST model includes four factors that have direct impacts on all economic industries These factors are external factors of the enterprise and of the industries; the sector affect to it as an objective factor Enterprises will base on such impacts to make appropriate business policies and operation

- Political environment

- Economic environmental

- Sociocultural environment

- Technological environment

Globalization factor in a macro factor

affecting the sector when making research

on the market

Source: Strategic management, oàn th H ng Vân, 2010

Figure 1.2: PEST model

Political factors: have influences on all business sectors in a territory, institutional,

legal factors can threaten the existence and development of any sectors When doing business on an administrative unit, enterprises must be complying with institutional, legal factors in the region Elements need to be paid attention to:

Economic factors: Enterprises should pay attention to economic factors in both

short term and long term and the intervention of government to the economy Enterprises usually base on economic factors to decide to invest in what sectors and regions Elements need to be paid attention to:

Sociocultural factors: Each country, territory has distinctive cultural values and

social factors that are the characteristics of consumers in such area Apart from the cultural factors, social characteristics also make enterprises pay attention to when

doing research on the market, social factors will divide the community into different customer groups, each of which has different characteristics, psychology, income … Elements need to be paid attention to:

Technological factors: The world is still in the technological revolution, a series of

new technologies have been launched and integrated into products, services Some elements need to be paid attention to in terms of technology in macro environment such as:

Globalization factors: No one can deny that globalization is now the trend, and

this trend does not create opportunities for enterprises, countries in production and business development Globalization has created competitive pressures, competitors that come from all regions Integration process will make enterprises adapt to comparative advantage such as labor division in regions and in the world Upon integration, trade barriers will gradually be removed, enterprises will have the opportunity to do business with partners in distant geographic areas, customers of enterprises are now not only in the domestic market where the enterprises are doing their business but also from all over the world

1.2.1.2 Study on micro-environment

Michael Porter, the world- leading strategy and competition maker today, has provided a theoretical framework for analysis, in which he model business sectors and believed that any business sector was affected by five competitive forces This model is called "five forces of Porter"

- Bargaining power of suppliers

Source: Competitive Strategy, M.E Porter, Free Press, 1980

Figure 1.3: Five-force model

The power of suppliers is shown in the following characteristics: concentration

levels, the number of products provided the difference of suppliers, the existence of alternative suppliers

The threat of substitute products is reflected in: Conversion costs, the trends in

using alternative goods, the correlation between price and quality

Accession barriers are reflected in: cost advantages, the Government’s policies,

and economies of scale, capital requirements, and ability to access distribution channels

The power of customers is reflected in: bargaining position, the number of buyers,

the sensitivity to price, product differentiation, and the level of availability of alternative goods

The level of competition is reflected in: “Exist barriers” from the sector, the sector

growth, the state of capacity redundancy, conversion costs, screening status in the sector

1.2.2 Internal environment analysis

The study on the internal environment is an integral part of strategic management, aimed at identifying strengths and weaknesses of the enterprise, of each functional section in the enterprise in their individual functional aspect The analysis of the

internal environmental also help CEOs, leaders of functional sections, implementing members… have the opportunity to clearly understand whether the work their functional sections are now implementing is suitable to the general activities of the whole enterprise or not They will do better when they understand their importance and its impacts on the operation of the whole enterprise There are two points of view at present when studying on the internal environment, including point of view

of Fred R David, and the point of view on the value chain of Michael Porter

Fred R David’s viewpoint

According to Fred R David, the analysis of the internal environment within the enterprise needs paid attention to operation fields: Management, Marketing, Finance -Accounting, Production, working, research and development, information system The studies of the internal environment according to the analysis of functions, parts

of Fred R David can help determine full strengths and weaknesses of the enterprise However, such analysis costs much time, labor, in fact, the approach in value chain

of Michael Porter is often applied

Michael Porter's value chain

The value chain of the enterprise is a set of activities of the enterprise related to the work to increase the value for customers The effective implementation of activities

in the value chain will determine the overall efficiency and create competitive advantages for the enterprise The value chain of activities of the enterprise is divided into two major groups: primary activities, support activities

Source: Competitive Advantage, Michael E Porter, 2009

Figure 1.4: Value chain of Michael Porter

1.3 Research tools & methods

Analyzed theoretical models give us various results and make us difficult to imagine In order to consolidate and give out the general results that help make strategic decisions, we need to use some assessment tools to help

In this article we use the following main tools:

1.3.1 Matrix of external factor evaluation -EFE

EFE matrix consolidates, summarizes and evaluates major opportunities and threats

of the external environment EFE matrix helps assess the response of the enterprise

to opportunities and threats, give judgment on whether the external environment is difficult or convenient for the enterprise

The building process EFE matrix consists of five steps:

threats

classification levels fixed must be equal to 1

- Step 3: identifying the classification coefficient from 1 to 4 for each factor, the coefficient depends on the response of the enterprise to such elements 4 - good 3 - above average, 2 - average, 1 - weak

determine the score coefficient of the importance

score of the enterprise The total score ranges from 1 to 4 If the total score

is greater than 2.5, it is above average, the enterprise is now responding well to the threats and opportunities from the external environment In contrast, if it is less than 2.5, the enterprises is now hardly taking opportunities as well as hardly avoiding threats originating from the environment outside the enterprise

1.3.2 Matrix of internal factor evaluation - IFE

The matrix of internal factor evaluation- IFE summarizes and evaluates basic strengths and weaknesses of the enterprise IFE Matrix shows strengths that need to promote and weaknesses that need to improve to enhance the performance and the competitive position of the enterprise

The building process of IFE matrix is similar to the building of EFE matrix including five steps, except that the list of important factors is internal factors (strengths and weaknesses) in IFE matrix instead of external factors (opportunities, threats) in EFE matrix The assessment of results of IFE matrix is the same as that

of EFE matrix, with total score ranges from 1 to 4 and the average is 2.5

1.3.3 Internal, external factor evaluation matrix- IE

IE matrix is built on two main aspects: the total importance points of IFE matrix on the horizontal axis and the total points of EFE matrix on the vertical axis This matrix is divided into 9 cells, and 3 big parts:

- If lying in cells I, II and IV, it can be called "Grow & Build." Applied

strategies are focus strategy or combined strategy

be called "Hold and maintain."

Applied strategies are: market

penetration and product development

strategy

section "harvest or Divest"

Source: Strategic management, oàn th H ng Vân, 2010

Figure 1.5: IE Matrix

1.3.4 SWOT / TOWS matrix

SWOT analysis model- also known as TOWS, is a very useful tool for grasping and making decisions in all situations… SWOT is the abbreviation of 4 letters Strengths, Weakness, Opportunities and Threats SWOT provides a strategic analysis tool, review and evaluates the position, orientation of a company or of an enterprise plan SWOT is used in making business plans, building strategies, evaluating competitors, marketing, developing products and services

SWOT analysis model is presented in a matrix with 2 rows, 2 columns, divided into

4 parts: Strengths, Weaknesses, Opportunities, and Threats SWOT model often gives out 4 basic strategies:

company to make use of opportunities of the market

overcome the weaknesses of the company to make use of opportunities of the market

- ST (Strengths - Threats): strategies are based on the company's advantages to avoid threats of the market

or minimize the weaknesses of the company to avoid threats of the market

Source: Strategic management, oàn th H ng Vân, 2010

Figure 1.6: SWOT Matrix

Steps to set up SWOT matrix:

enterprise (O1, O2, O3 )

(T1, T2, T3 )

CHAPTER 2: Analysis of basis of development

strategy planning for Gtel mobile

2.1 Overview of Gtel Mobile

2.1.1 Company’s history

GTel Mobile is a joint venture company that provides voice services and data transmission on GSM/ EDGE technology Gtel Mobile came to being originating from the agreement to establish a telecommunication joint venture in Vietnam signed with Vimpelcom Group in late 2007 GTel Mobile is an enterprise not only operating for economic purposes, but being a combination of international factors in order to bring about new communication trends and styles for people of Vietnam

GLOBAL MOBILE TELECOMMUNICATION COMPANY (Gtel mobile) was established on July 8, 2008 based on cooperation agreement among three companies:

Europe and Central Asia

In this joint venture Gtel (including Gtel Corp and Gtel TSC) holds 60% of voting rights, VinpelCom 40%

Corp was established in November 2007, a company under the Ministry of Public Security In this joint venture, Gtel contributed $400 million USD in the form of license for providing mobile telecommunication services using GSM technology with 1800 MHz band VinpelCome contributed $266.7 million USD in cash This is one of the biggest foreign investment projects in cash in Vietnam

2.1.2 Strategies

Long-term strategies of Gtel Mobile are shown through four major points including:

Mission, Value, Goalss, Vision "source: http://www.beeline.vn"

̇ Mission: To bring about joy to all customers, helping them always feel the

freedom to communicate at anytime, anywhere

̇ Value: To keep upgrading the service quality, to keep improving the quality

of customer service To respect and create trust for employees and business partners

̇ Goals: To become one of the Vietnam’s leading enterprises operating and

developing in accordance with international standards

̇ Vision: To become a supplier of servicer with the world- leading quality in

Vietnam

In addition to the long-term strategies, Gtel Mobile has specific objectives through figures such as: To become the 4th largest mobile network in Vietnam, accounting for 10-15% of the market shares in mobile subscribers

2.1.3 Brand

Beeline Vietnam is entitled to use Beeline brand from VinpelCom, a strong brand which has been confirmed worldwide Beeline brand image with the two alternative yellow-black stripe- circles has become familiar to millions of customers around the world In April 2009, Beeline was viewed as one of 100 the most expensive brand globally Ranking at the 72nd position, Beeline brand value was estimated up to 8.9 billion USD Also Beeline brand is also attached to one of 10 biggest telecommunications brands in the world

With such principles as "friendly", "efficient", "simple", "active" that have completely occupied the hearts of millions of people around the world, Beeline Vietnam believes that it will also become a reliable companion of customers With the slogan "live on the bright side, we wish to bring a new trend and the more beautiful life for everyone We also wish to bring our customers new passion,

helping them connect with one another and with the world Like Beeline brands in other countries, Beeline Vietnam upholds core values as follows:

- Friendly and enthusiastic: Our goal is to meet all requirements of

customers and serve customers with our best efforts

- Simple: our products are simple, easy to understand, easy to use

- Passionating and attracting: We keep moving forward We attract and can

meet all customers' taste

2.1.4 Social Responsibilities

Being a new enterprise in Vietnam's telecommunication market, Beeline is always aware of the importance of the social responsibility for the Government and the society of Vietnam The enterprise not only focuses on business activities effectively, but also always give priority to meet requirements of the Government and the society of Vietnam on social responsibilities as follows:

and ideal career development opportunities for all employees

for all customers At the same time to participate in programs of social activities with an aim to improving the life quality of the community

2.1.5 Human resources

As of mid 2010, Gtel Mobile has now more than 1000 staff with the structure including the headquarter in Hanoi and two branches in Ho Chi Minh City and Da nang Despite a young company, almost all of the employees of Gtel Mobile have many years of experience in the telecommunication sector and have worked in foreign companies operating in Vietnam such as Ericsson, Alcatel, Huawei, Nortel

Source: Induction& Orientation Program, from HR dept, Gtel mobile, 2009

Figure 2.1: Organizational chart of Gtel mobile

2.1.6 Service products and cost packages

Basic services: Entertainment Services

Call Waiting / Holding Service Category lookup service

Conference Calls

Beeline content downloads for mobile phones

International Roaming Service Beeline content downloads for PC

Calling Line Identification

Message & Internet Services Always connected services

GPRS - Internet Missed call informing service

Account & paying-in Packages:

Source: Marketing Dept, Gtel mobile, 3/2010

2.2 Results of production and business activities in recent years

Since Gtel mobile is the new network, in recent years, it has made efforts in developing network infrastructure and services, customer

Development of the network infrastructure

Gtel mobile has met international standards in setting up the network infrastructure: covering the population area of 15 million people in 3 big cities after 8 months (the average time in the world is 16 months), 1 month later expanding the coverage up to

26% of the national population of more than 8 cities and provinces (Source:

Technical report, Technical Dept, Gtel mobile, 12/2009)

Capacity:

Gtel mobile has invested in construction of the completed infrastructure from the start with the network designed intelligently Learning from other networks on the network congestion status in promotional periods or on peak days, Gtel mobile has invested big core network capacity from the start in order to get ready to satisfy any situations In spite of new business, the core network system has been able to meet 6.5 million subscribers and to connect big capacity to all other partners in Vietnam

and roaming to more than 200 partners around the world through Beeline network

of VinpelCom (Source: Technical report, Technical Dept, Gtel mobile, 3/2010)

The transmission system with high capacity of 10Gbps in big cities has been developed More than 1000km of optical fiber deployed with multiple of rings Ring

has ensured the safety for the network system (Source: Technical report, Technical

Dept, Gtel mobile, 3/2010)

IT system

The modern charging network has been built through IBM contractor This is the most synchronous and modern system in Vietnam up to 2010 The system was also invested with high capacity from the start, ensuring to serve 10 million subscribers, minimizing the upgrading afterwards in order not to affect customer services in the future Grasping requirements on the management of prepaid subscribers of the Vietnamese government, Gtel mobile has designed to meet such requirements regarding both capacity and structure This is the step ahead of Gtel mobile as compared to other suppliers

The IT network system of the company is connected to all offices of VinpelCom in the global to ensure the ability to work and to access the system anywhere of Gtel mobile employees Outlets, agents are also connected to the center through private lease- lines or by high-speed Internet

Coverage area

As of March 2010, the network infrastructure of Gtel mobile has more than 2500 BTSs and in June this number has increased up to 3,000 stations, fully covering the area of 50 cities, provinces (including 5 big cities and 45 provinces) In big cities in which a great number of subscribers concentrate, Gtel mobile has the network

system equivalent to other big operators in Vietnam (Source: technical report,

Technical Dept, 6/2010)

Service quality

Right from the start, Gtel Mobile identified this is the focal point for development basis With the network infrastructure that is well prepared, synchronously invested, modern and quality staff, Gtel Mobile has quickly achieved the quality threshold as required by the Government in a short time

Source: Network planning Division, Technical Dept, Gtel mobile, 3/ 2010

Figure 2.2: The coverage map of Gtel mobile up to 3 / 2010

On 20.5.2009, GTEL Mobile was approved by the Government to cooperate with Vinaphone to implement 3G mobile network and information services This is the long-term commitment basis of Gtel mobile with customers that Gtel mobile will provide sufficient services with the best quality to the customers

Marketing:

From lunching network in July, 2009 Gtel mobile has more than 3000 point of sale The Marketing section has constantly offering new service packages with more features for various needs of different customers At first it was the super-cheap Big Zero package which made the turmoil in the mobile market of Vietnam, then the Big Zero * package was the next and a series of added services

Only 2 months 20 days after the introduction of the product, Beeline created a new

“record" on the way to confirm its growth, with impressive numbers of subscribers and customers: more than 2 million Sims distributed to the market, in which 1 million activated as of 26/09 As the first company in Vietnam reached the

"milestone" of one million subscribers only after 2 months while 5 years with Vinaphone and 1 year with Viettel The world's leading market research company- TNS conducted a research in late 2009 According to these results, the level of the Beeline brand awareness reached 76% - a successful level for a new brand with 2 months of appearance, and it was massively voted by consumers as “the most favorite TVC" on Marketing & Thanh Dat magazines in August and September,

2009

Currently there have been over 2.5 million mobile subscribers In 2010 it is expected that Gtel mobile will increase by 3000 TBSs and make full coverage nationwide The switchboard capacity will reach 10 million subscribers There will high capacity fiber optic cable transmission network in the centers of big cities The company will strive to become the 4th biggest mobile provider in Vietnam provider with around 5% of the market shares

Figure 2.3 shows the growth rate of Gtel mobile subscribers is very good since the opening of the network on July 20, 2009

Source: Network monitoring center, Gtel mobile, 1/2010

Figure 2.3: Growth chart of subscribers of Gtel mobile

2.3 Analysis of strategic issues and management in Gtel Mobile

According to the structure as described in chapter 1, our group will apply models of internal, external environmental analysis, setting-up of IE, SWOT Matrices to find out strategies of the enterprise The final optimal strategy will be selected in chapter 3along with solutions

2.3.1 Macro environment study

The macro environment in Vietnam has rapidly changed each day With the opening, integration and seriously implementation of the committed schedule, Vietnam's economy in particular and the society of Vietnam in general are now moving ahead and have achieved specific progress This creates both opportunities and challenges for enterprises in Vietnam in general and for mobile Gtel in particular

Political environment

One thing that investors believe is that Vietnam has a stable political environment Unlike many countries where disputes of parties, religion, terrorism usually occur in

the region affecting business activities For Gtel mobile- a joint venture company and with dominating stock of the State of Vietnam, this is even more meaningful That makes foreign investors and customers feel secure for the long-lasting existence and development of the company

Since mobile communication services appeared in Vietnam in 1993 up till now, Vietnam legal system has also amended and supplemented for many time in this field The first is the Post and Telecommunications Ordinance, then the Post and Telecommunications Law and the Development Orientation of the sector up to

2030, Regulations on prepaid subscriber management, Regulations on service quality, Regulations on promotion, Regulations on BTS Construction, Regulations

on construction permit All are creating a more perfect business environment however this poses both advantages and difficulties for telecommunication enterprises including Gtel mobile The management of prepaid subscribers and limitation of promotion is regulated to increase the fairness in business, helping enterprises compete more fairly whereas the regulations on BTS construction of the MOC have influenced greatly the growth rate of networks of telecommunication enterprises

In the past one year the relationship of Vietnam - Russian Federation has continuously been promoted Both parties have signed many cooperation contracts

in many fields The Governments of Vietnam and Russia have made commitments

to have supportive policies, creating favorable conditions for enterprises of two countries to cooperate This is a good opportunity for Gtel Mobile as this is the first joint venture in telecommunication with huge FDI capital

Economic environment

Vietnam's economy has made great success in recent years By the end of 2009, the per capita income has exceeded 1,000 USD/year, bringing Vietnam to overcome the poverty threshold in the world ranking The annual GDP growth rate of 6-8% has boosted consumption and Mobile Telecommunication is one of the most profitable

services Telecommunication is the basis for promoting the economic development,

is the infrastructure for business information exchange but economic development will in turn bring about the development of telecommunication in both quality and quantity This creates great opportunities for both foreign and domestic telecommunication companies

With Gtel mobile- new enterprise that needs much investment capital in the first stage of construction of the network infrastructure but has not much revenue, problems of interest rates, exchange rates have great impacts on the financial activities of the enterprise During 2009 and in the beginning of 2010, exchange rates, interest rates and inflation of Vietnam's banks have changed many times and tend not to stop, which made Gtel mobile meet a number of difficulties in mobilizing capital for investment in infrastructure networks Additionally, difficulties of the world economy, the fluctuation of USD, Russian ruble and VND have made loan value of Gtel Mobile much change

As a member of the joint venture, the change of the share value of VinpelCom in the USA stock market will also affect the operation of Gtel mobile During the world's economic difficulties in the next few years, the share prices will still much fluctuate; investors will have different orientations and may affect the financial activities of Gtel through the impacts on the parent company This is also the general difficulty of joint venture companies

Sociocultural environment

Vietnamese population statistics as of 4 / 2009 as 85.8 million people, ranking 13th

in the world The speed of population growth on 1% annually and increasing life expectancy due to quality of life is improved This has created capacity for mobile telecommunication market large compared to other countries This is something that all companies are keen to obtain It brings enterprise opportunities for service providers

The population structure of Vietnam is now in ideal with the number of people in working age (15-65 years) constitutes big percentage of 69.4% They are the people that bring the highest service use values, they are the people that bring the most revenue in comparison with children and the elderly that mainly use in family management, therefore; the revenue they make will not be high Vietnam is now a very good market in which many network operators wish to do business

The rate of urban population reaches 30% and is now raising rapidly, the rate of urbanization, industrialization is high This makes the demand of information exchange, the market capacity and the revenue increase through using services more and using multiple subscribers simultaneously

The uneven natural conditions and population distribution is a big problem for telecommunication enterprises With ¾ of the area is hilly, it is difficult and costly for the deployment of network infrastructure in such regions, while the population density is low, the demand for service use is not high, but it is the region where the competition is now occurring at the time when it is close to the saturation of subscribers in urban areas It is more difficult for Gtel Mobile to satisfy such customers All networks now have to cover loss for such regions

The issue of cultural differences can also cause difficulties for enterprises in the implementation of advertisement of their images, sales, marketing With the habit

of using different services, the loyalty of customers is a headache for network providers in Vietnam Some strategies appear suitable in this locality but unsuitable

to that one, which requires correction that wastes money

Technological environment

Telecommunication is a high technology field and keeps changing Due to the particularity of the technological cycle, equipments will be replaced in 2-3 years while their investment value is high, which has increased the pressure for rapid