[Final] Strategic Management.docx

STRATEGIC MANAGEMENT VIETTEL TELECOM GROUP STUDENT ID STUDENT NAME 17 EXECUTIVE SUMMARY Management is a process of manipulating various functions into a big picture of a business A Strategic managemen[.]

STRATEGIC MANAGEMENT VIETTEL TELECOM GROUP

STUDENT ID

STUDENT NAME

EXECUTIVE SUMMARY

Management is a process of manipulating various functions into a big picture of a business A Strategic management requires managers to combine all range of business sectors into a set of identification which

is to identify the strengths to maintain and the weaknesses to improve of an organization This essay is a strategic analysis of Viettel telecom Group into its internal and external environment The result of this essay is to express the suggestion to Viettel managing board the strategic implementation process This process aims to maintain the leading position of Viettel within the domestic and international markets, and improve the management policies for future development

TABLE OF CONTENTS

EXECUTIVE SUMMARY 1

TABLE OF CONTENTS 2

1 INTRODUCTION 4

2 VIETTEL - BUSINESS ANALYSIS 5

2.1 Overview about Viettel - Business nature 5

2.1.1 Vision 5

2.1.2 Mission 5

2.1.3 Structure of the ownership 5

2.1.4 Core competencies 6

2.1.5 Economic objectives 6

2.2 Balanced Scorecard 6

2.3 PESTLE analysis 8

2.3.1 Political factor 8

2.3.2 Economic factor 9

2.3.3 Social factor 9

2.3.4 Technological advance 10

2.3.5 Legal factor 10

2.3.6 Environmental factors 10

2.3.7 Overall discussion 11

2.4 Porter’s Five Forces model analysis 11

2.4.1 Explanation of 5 competitive forces 11

2.4.2 Threat of substitute 11

2.4.3 Industry rivalry 12

2.4.4 Power of buyer 12

2.4.5 Power of supplier 12

2.4.6 Threat of new entry 12

2.5 Strategy implementation method 12

2.5.1 Conduct annual goals setting 13

2.5.2 Conduct policy setting and support plan 13

2.5.3 Development of action plans, budgets and implementation process 13

2.5.4 Allocation of human resources, finance, facilities 13

2.5.5 Strategic commitment and implementation 13

2.5.6 Strategic inspection control, evaluation and adjustment in the implementation process 14

3 Recommendation and conclusion 15

3.1 Recommendation 15

3.1.1 Maintain the investment on expansion and the improvement of customer service quality and capabilities 15

3.1.2 Strategic plan of pricing policies for competitiveness and service flexibilities 15

3.1.3 Improving service quality via human resource strategic management toward changes 15

3.1.4 Financial management solution 16

3.1.5 Marketing solution 16

3.2 Conclusion 16

REFERENCES 17

1 INTRODUCTION

In today's dynamic market economy, the sustainability growth of a business requires a set of strategic management to ensure its presence in the marketplace Literally, strategic management is considered as the process in which the manager formulates and allocate resources in order to achieve a goal of developing competitive advantages within the specific industry (Cox, Daspit, McLaughlin and Jones, 2012) This purpose of strategic management is to help an organization to plan for its future development and fulfill the gaps within the firm’s responsibilities This plan is also considered as the direction for the organization and employees movement The result from implementing the strategic management would

be a greater operational efficiency, market share and profitability

In this report, Viettel Telecom Group is taken into consideration for the strategic management analysis There would be a top down analysis, from external environment analysis to internal environment analysis

in order to figure out the appropriate balanced scorecard and strategic implementation of Viettel Telecom Group

2 VIETTEL - BUSINESS ANALYSIS

2.1 Overview about Viettel - Business nature

In Vietnam, a shift from the command market to the market economy, domestic companies have faced many challenges in important administrative management Organizations need to check and build critical equipment to be flexible enough to respond to market changes Business processes must be identified based on the results of the survey and the strengths, weaknesses, quality and shortcomings of the business must be estimated to help the organization obtain general data about business situations outside and inside the organization

The Vettel Group is one of the effective models for adapting to the market economy In the past, Viettel was a small organization with many troubles and no market-known brands Nowadays, It is currently one

of the leading providers of media telecom services in Vietnam and on its way to the international market

In Viettel's achievements, brand positioning has developed to the extreme

2.1.1 Vision

A pioneer in modern and innovative technology applications, groundbreaking provider of solutions create new high-quality products and services at affordable prices to meet the needs and options of customer expectations (Vietteltelecom.vn, 2019)

Being born in difficult circumstances with the spirit of soldiers, Viettel is not afraid of difficulties to reach out to distant lands, with philosophy "to the death to seek the way to survive" is well aware in the business, along with the attention and deep understanding of customers to continuously improve their products and services, Viettel is introducing its best to the world

2.1.2 Mission

Caring innovator - Creativeness is to serve human beings

2.1.3 Structure of the ownership

Viettel is a defense economic enterprise with 100% state capital and is owned by the Ministry of National Defense The leadership apparatus has included Major General Le Dang Dung the company general manager and 5 deputy general directors with the highest management function of the board of directors of the corporation

There are five deputy directors of the Viettel Telecom Group Vietnam has assigned roles and responsibilities for the four major sectors of the Viettel Telecom Group Master Plan, which is domestic

communications management, global market management, research and development management, and relationship management Its main role is in military status

2.1.4 Core competencies

 Practice is the standard for truth testing

 Mature through challenges and failures

 Quickly adaptive to change is the power of competitiveness

 Creativeness is to survive

 System of reflection

 East-West combination

 Tradition and method of soldier

 Viettel is a shared house

 Business philosophy

2.1.5 Economic objectives

Viettel Telecommunications Group continues to expand aggressively to a larger scale In particular, in

2010, an increase of 16300 2G and 3G stations, accounting for 45% of the total number of existing stations of the total number of other mobile information service providers in Vietnam Moreover, Viettel Telecom Group promises to increase investment in optical networks nationwide This shows that, despite being a state-owned enterprise, Viettel has an effective strategy to become a leader in the telecommunications network infrastructure in Vietnam and in other invested countries

Overall, although Viettel has been a late participator in the telecommunication sector, it has been ranked the first place in domestic, Vietnam market, as well as the winner in terms of telecom subscription in Cambodia and Lao The previous report in 2010 recorded the revenue in Cambodia reached $161 million and $61 million respectively Also in this year, telecom operator Metfone (Viettel's brand in foreign markets) received the award for the best service provider of the year form Frost & Sullivan Following successful strategies and tactics in the international market, Viettel Telecom Group is pushing to invest in new markets over Asia, the Americas and Africa

2.2 Balanced Scorecard

Balanced scorecard is a system of strategic planning and management, used by business, nonprofit and governmental organizations to guide business operations according to vision and strategy of the organization, improve the efficiency of internal and external marketing, track the performance of the business compared to the target (Kaplan and Norton, 1996)

 Financial performance and the use of financial resources

Financial measures include factors such as fixed costs, depreciation expenses, return on investment, profits earned, revenue growth

 Organizational performance from the point of view of the customer

Customer satisfaction is an indicator of business success, because it directly affects both current and future revenue This measure is to answer the question: How are customers seeing the business?

 The quality and efficiency related to our product or services

This scorecard refers to the internal business process The indicators in this scorecard allow managers to understand the business situation, and whether the product or service meets the needs

of customers

Signs of a smooth operating business are gathered from many small indicators such as the growth rate of scale, the increase in the number of employees attached to the work, and the percentage of time for handling official duties are shortened

 Human capital, infrastructure, technology, culture

This scorecard includes staff training and attitudes about corporate culture related to personal and business progress With constantly changing technology, employees must be always ready to learn at any time Indicators can be used to help managers allocate training budgets in the most effective and reasonable manner In any case, the ability to learn and develop creates a solid foundation for the development of the business

The Balanced Scorecard provides a framework that shows the causal relationship between the target elements The result of implementing these target elements is the pieces to create a complete picture of the company’s business strategy

Once the company has a complete strategic picture, it will be easier for the company to implement a business marketing plan, including both external and internal marketing The Balance Scorecard model not only helps the company's partners and employees better understand the strategic content, but also is impressive and easy to remember for each advantage, disadvantage, of the measures it is making

Mission Creative to serve people

Vision A pioneer in modern and innovative technology applications,

groundbreaking provider of solutions create new high-quality products and services at affordable prices to meet the needs and options of customer expectations

strategy Implementing the 5-year plan from 2015-2020 In 2020, become a global

corporation, a production resource group both civil and military

Balanced Scorecard

Element

Target

Finance Growth of 15 -20% in 2019, reaching revenue of 435,000 billion VND

Maintain the growth rate to 2020, striving to reach 450,000 billion VND in revenue

Customer/Stakeholder Bringing information technology into every area of customers' lives

Promote and improve broadband service business to enhance customer experience

Increase market share of domestic customers, dominant market share of international customers

Internal Process Promote acquisition and merger of companies in the field of

telecommunications and information technology Diversified products to attract more customers both civil and military Organizational Capacity Increase investment in research and application of modern technologies to

improve service quality and increase defense capacity

2.3 PESTLE analysis

The macro-environment factors consist of socio-cultural, technological, political-legal, economics and international variables Each impact on the macro environment has potentially impacted organizational strategies Therefore, PESTLE analysis is an effective method that helps companies identify the external risks beyond their control (Rastogi & Trivedi, 2016)

2.3.1 Political factor

 How stable is the government now and in the future

Vietnam is one of the socialist countries led by the Communist Party Recently, under the leadership of the Communist Party of Vietnam, Vietnam has been highly appreciated for stability, ensuring the development of businesses and investors in the Vietnamese market In addition, Vietnam’s legal system is constantly being refined and developed to comply with international agreements that have been successfully ratified in recent years With the warming of international relations, Vietnam’s politics is expected to remain stable in the future

 Diplomatic relationship

Since the successful signing of the WTO accession agreement in 2008, Vietnam has joined regional and international associations, thereby promoting its globalization process In particular, GAT, AFTA, ASEAN, APEC, etc are all international associations that have recently accepted Vietnam

2.3.2 Economic factor

 Exchange rate

Interest rates, inflation, exchange rates and taxes are factors that affect the telecommunications industry

In the case of the Viettel Telecom Group, the exchange rate is a direct impact as it will result in an increase in the cost of building the tower to improve the communication connection For example, in recent days, the trade war between China and the United States has caused market exchange rate fluctuations This has led to difficulties in bargaining international supply materials

 Fiscal policies

After the global crisis of 2007-2008, Vietnam’s fiscal policy has actively and effectively applied some changes in accordance with international agreements and the open economy Although the inflation rate remains at the planned level, Vietnam's GDP still maintains a steady growth of 7% per year In the telecommunications sector, Vietnam encourages domestic suppliers to adopt policies Even during the telecommunications reform period, foreign investors are welcome to join the industry, and domestic service providers are still government-led and subsidized

2.3.3 Social factor

Vietnam's telecommunications growth has soared in recent years The meaning of telecommunication is greater than mobile phones Now it's a combination of mobile phones, the Internet and cable networks and so forth Ten years ago, rural areas had limited access to the Internet and mobile phones, but now they are potential customers for the growth of the telecom business All service providers currently manage internet, mobile and cable network operators Customers prefer these service packages over single services Therefore, communication has become a very important aspect in everyone's daily life

2.3.4 Technological advance

The evolution of telecommunications lies in both needs and requests For example, copper is outdated and

is replaced by fiber optic cables for a better and smoother connection The phone is now smarter and integrates more features to use the phone and internet connection on the same device This leads telecommunications to the wireless business Therefore, people now need an Internet connection anytime,