G1_00226 STRATEGIC DEVELOPMENT OF MOBIFONE PRODUCTS FOR TEENAGE MARKET SEGMENT PERIOD 2011-2015 CHIẾN LƯỢC PHÁT TRIỂN SẢN PHẨM MOBIFONE DÀNH CHO PHÂN KHÚC THỊ TRƯỜNG THANH THIẾU NIÊN GIAI ĐOẠN 2011-2015

G1_00226 STRATEGIC DEVELOPMENT OF MOBIFONE PRODUCTS FOR TEENAGE MARKET SEGMENT PERIOD 2011-2015 CHIẾN LƯỢC PHÁT TRIỂN SẢN PHẨM MOBIFONE DÀNH CHO PHÂN KHÚC THỊ TRƯỜNG THANH THIẾU NIÊN GIAI ĐOẠN 2011-2015

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CAPSTONE PROJECT REPORT

STRATEGIC DEVELOPMENT OF MOBIFONE PRODUCTS FOR TEENAGE MARKET SEGMENT

PERIOD 2011-2015

Group No.:01 Student’s name:

1 Tran Thi Xuan Anh

2 Nguyen Viet Long

3 Lam Nguyen Quoc Nghia

4 Ho Thi Quynh Nhu

5 Dao Thanh Tuyen

6 Le Thi Thanh Xuan

Class: GaMBA01.C609 HCMC, 2011

l

has provided education in Vietnam with conditions for us to

study and complete Global Advanced Master Of Business

Administration Program

We'd like to give thanks to all members of Vietnam Mobile Telecom Services Co — who have facilitated us in investigating useful information for our report Although

we have put our best effort to complete the report, however there will be some unavoidable mistakes, we hope to receive valuable contribution from our lectures and friends

Ho Chi Minh City, June 2008

subscribers, which generate traffic to reach approximately 120 million subscribers

Vietnam market with over 89 million people and Vietnam has stable growing econonly, young population struciure, mobile communication services will have a lot of potentia! and growth opportunities

Today, the exploitation and using of the features on mobile phones have become essential needs, especially among students, students and office people Phrases such as " load game ", " web surfing "," chit chat" and " social networking

" almost become "first phrases " of teenage people

With 7 Mobile Service Providers are working in Vietnam, mobile

communication services become more and more competitive Now no longer worry about coverage network or cost, any business need focuses on the customer, understanding the needs of each customers part to maximize the potential customer's consumption

Vietnam Mobile Telecom Services Company (VMS) is the first operator using GSM 900/1800 technology in Vietnam VMS has provided services since

1994 and operates under the brand name MobiFone

With a country with young population like Vietnam, to help VMS (Mobifone) maintain and dominate the market, the research and development of strategy on teenage market segment is essential Therefore, we has studied the theory of product development strategy, competitive strategy, marketing strategy and

analysed current business of the Company, to build strategy to develop products for

teenage market segment - the period from 2011 to 2015

- Research objective :

The research objective of this thesis is to build Mobifone products development strategy for teenage market segment - the period from 2011 to 2015 This research helps MobiFone choosing a the best strategy to compete against competitors

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to build Mobifone products development strategy for teenage market segment

- Methods of research:

Our team used quantitative and qualitative methods to analyse data based on market research, the predictions by industry experts, forecast of customer demand for mobile services, subscriber growth, as well as the implementation of products

and services for the "teen"

The primary research data provided by Mobifone Besides, we also use the related data sources are published in the mass media with high reliability

The structure of the subject: Thesis consists of 03 chapters :

+ Chapter 1: Theoretical basic and reality about Mobile communication product development strategy for teenage segment

+ Chapter 2: Analysing, environmental assessment & actual situation business sector mobile in general — products for teenagers mentioned in particular in

& out of Mobifone

+ Chapter 3: Building MobiFone product development strategy for teenage segment in the period 2011-2015

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LIST OF TABLES

Table 2.1: External factors evaluation (EEE)) .- << << se se se se sec eez 46

Table 2.2 Internal factors evaluation (E E)) 5< << se xe se SE se sessezsee 49 Table 2.3: Competition picture matrix evaluation of MobiFone 50 Table 2.4: Strategic position matrix and analyze the action (Space) 60

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LIST OF FIG U RES csccessinoncssnsvcssssvaxsssnsssasssocnseogrereerusenreneasenarsenneuenauvansnsuesssansvnnssaneny 5

LIST OF TABL,ES HH HT 1T TT nu nh HH ng 7

CHAPTER 1: THEORETICAL BASIC AND REALITY ABOUT MOBILE COMMUNICATION PRODUCT DEVELOPMENT STRATEGY FOR

TEENAGE SEGME T HH TH gu ngưng II

1.1 Œáeneral SfFdf€ĐIC HLGHGĐ€TNHIÍ G-5 5< sex reeeeeeee I] I.I.I The concept OŸ Strat€gØY - 5+ s24 24132111 1112111111111 1112101111115 1 E150 II

1.1.2 The process of strategic mmanageme€ht - + xxx xxx, II

1.1.3 Classification strategy (this part helps to figure out this topic is a part of

strategic marketing - located in the Enterprise strategy) - -s- 12 1.1.4 Tools- Matrix used into creating strat€Øi€S 5c tt n1 S 12111 crea 13 1.2 Theory foundation on products and market segmentation in marketing: 20 1.2.1 Definition and role of market segmentation in business and preparing the

busincss stratCØY OŸ GICTDFISC 5:5: 5 2212521 E2 E1 115111 111111 x2 20 I.2.2 Market scgmentatiOI 5-5: 252222252121 11 512121 11111111 217121110111 tre Zl I.2.3 Selection oftarget marlKet 2-5-5 seo 1.2.4 Product location for market segmentatio - cà cncn cv te eey 23 1.3 Theoretical Foundations of products and market segments in Mobile

C (OHTITTTLITIÍC i3 ẨÍ(OH]-, À << 5< << SE ESESE SE E3 SE HE HS HT HH gu ve 24 1.3.1 Population statement:Vietnam is a crowded and young population

CONEY > wexers cxsxannoarsenexncesasiess SiR.tASha.ansemnananannnenerseeromnevnvaneen vennwenavereseues tee ees eH 24 1.3.2 The Vietnam economy begins to develop c.cccccccccccsescecsvevevecevseseseseeees 27

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1.3.3 The growth of applying Technology information is very good, especially

HY MODIS SELVIGE LEI sixcssscessssnscisensneaterenennaneesnncenenes semunsnnavaenternestenanseone 27

I.3.4.- Vietnam ¡s opening Telecom MarKet - - 5: 5:52 22222223 12221221222222552 28

ACTUAL SITUATION BUSINESS SECTOR MOBILE IN GENERAL - PRODUCTS FOR TEENAGERS MENTIONED IN PARTICULAR IN &OUT

OF MOBIFONE 1.0 cccscesscsseseesscsesscesssecsscseesscssecssseeseeaceaceaeeaesaseceesteateceeseeesteseteees 32

2.1 Introduction ÀÍObiÏ OHG SG ĂĂ se SE S93 E3 1 gu nu gu 32 2.1.1 The formation process and Development .0 0 0c0cccccccccecseseeseseeseseeseeees 32 2.1.2 Model of organization and management, business field - 5: 37 2.1.3 The main products of Mobifone: . : 5: 22:22 12121111211 37 2.1.4 MobiFone Value Added SerVIC€§: 5 22222 12121212121 1111111811 xe 38

2.1.5 Some basic business r€SuÏ(§ ¿ ¿2222212122222 ErErrrrrerrrrr.re.,2

2.2 Telecom services for YOUNG D€OjĐÏ€ 55c + se sE+EexEsEesEeeeseeere 4] 2.2.1 The products of Mobifone for young peoplÌe 5c sccc xxx csrsre2 4I 2.2.2 Results ofproducts for teenage segment cv rerrreed 43 2.3 Analysis and evaluation of the main causes related to business results of MobiFone for teenage Segment ccsccsccsccsccscerssscssscessncesseseessessensensscesecensess 44 2.3.1 External factors evalution (EFE): .Ẳ s5 xxx vn ngay 44 2.3.2 Internal factors evaluation (IFE): - - Sc cnsn 1S SH ST SH KHE: 48 2.3.3 Competition picture matrix evaluation (CPM): ccc cv cssressse2 49 2.3.4 SWOTT matrix evaluatiOn: - 5-22: 22222121152 112122111 211111211118 11 ng 51 2.3.5 SPACE matrix evaluatIOI: 5-5252 522222 S2 121E1 511121111111 151 1111211512 1e 59

2.3.6 QSPM matrIX: - G1 1S SE E1 T11 1111101111111 ha 60

CHAPTER 3: BUILDING BUSINESS STRATEGY OF VMS MOBIFONE FOR THE TEENAGE SEGMENT IN THE PERIOD 2011 - 2015.00.00 64 3.1 Building development strategic goals for MobiFone products for the (CCHC SCĐHICHH SG nọ 00 0000005 5.0 64 3.1.I Long - term ObJ€CLIV€S: 2 2121212 HH Ha Hà Han ne 64

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CHAPTER 1: THEORETICAL BASIC AND REALITY ABOUT MOBILE COMMUNICATION PRODUCT DEVELOPMENT STRATEGY FOR TEENAGE SEGMENT

1.1 General strategic management

1.1.1 The concept of strategy

The word “Strategy” came from “Strategos” - a Greek word It is a term used

in military “Strategy” is a plan that shows how to manage, organize and dispose one’s force in a rational way to against enemies According to Edward Mead Earle, who was a historian, strategy was an art of control and use force from a country or many countries to protect our own country’s sake

According to Wikipedia, strategic management is the science and art strategy to

develop direction and business targets, extend, and complete plan short and long termon the basis of available resources to help each organization to accomplish their goals

According to John Pearce II and Richard B Robinson, strategic management

is a system of decisions and actions to form and realizes the plans to accomplish firms’ targets

There are many definitions of strategy, but the general definition can supposed

to be “The strategy is a complex serics of actions to mobilize resources an

organization can have to achieve a certain goal”

1.1.2 The process of strategic management

There are 3 steps: strategic creating, strategies application, and strategies valuing Those steps help companies have more good opportunities in competitions and average profits

Strategic creating is the process of creating business responsibilities, doing surveys to know good things and bad things inside and outside, suggesting long- term objectives, and choosing other strategies to replace

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Strategies application is also called the action stage of strategic management,

in order to mobilize administrators and staff to implement the strategy that has been established Three basic activities of the enforcement strategy are establishing annual goals, making policy, and distribution of resources This stage is considered the most difficult stage in the process of strategic management

Strategic valuing is the final stage of strategic management All strategies depend on changes in the future because factors inside and outside change regularly Three main activities of this stage are:

(1) Reviewing the factors is the basis for the current strategy,

(2) Measuring performance,

(3) Implementation of adjustment operations

1.1.3 Classification strategy (this part helps to figure out this topic is a part of strategic marketing - located in the Enterprise strategy)

In an organization, strategic management can proceed in three basic levels: corporate level, business unit level, and department-level functions Strategic management process at every level has the same form of basic stages: environmental analysis identified the tasks and objectives, analysis and strategy

selection, implementation and testing strategies, but the contents of each stage and

the decision that depend on the management are different

1.1.3.1 Company strategy:

Company strategy determines orientations of organizations in a long term to attend and accomplish improved targets, such as concentrated improving strategy (getting into the market, developing the market, and developing products), involved improving strategy (back and front), diversity improving strategy (concentric or mixed), joint-venture strategy Base on company strategy, organizations will

develop their own strategies

1.1.3.2 Function Strategy

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Every company has function sections: marketing, human resource, finance, production, research, and development These functions create strategies to support company level and business unit level For example, marketing has 4Ps strategy Human resource has responsibility to attract good quality people for companies Financial function has strategy to cut down spending, and create a new investing strategy for new products Function strategy is always value in each period

Thus, 3 level are really related together The high-level strategy is the first step, while other lower levels have to adapt to the higher level

1.1.4 Tools- Matrix used into creating strategies

1.1.4.1 Factors affect building up strategies

There are many concepts about strategies and managing strategies to make a base to analyze inside and outside environmental factors of companies From there, companies build up matrixes Base on Fred R David’s concept, Mobifone has created a market for teenagers

a Estimate outside factors of organizations:

Outside environment is hard to control but it affects process of companies There are many opportunities and risks that affect companies with different levels

Estimating outside factors helps to realize important factors that help managers to handle intelligently situations come from business environment If company can’t estimate what might happen out there They won’t be able to deal with emergency

There are two types of outside factors that affect firms: micro-environment

and macro-environment

b Evaluating the situation within the company

Every company has its own strengths and weaknesses, there is no equally in

these aspects Combining the internal strengths and weakness together with the

external opportunities and threats is the fundamental basic of strategic planning for

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businesses By evaluating the situation within company, their capacitics can be examined, thus it help them to uphold their strengths while minimized the weaknesses

With the analysis of the company’s internal factors, their potential strengths lie on the skills, resources and the potential advantages over its competitors is the modern technology, prestige brand name, profuse resources, good public relations

or holds a substantial market shares in the market The weaknesses can be identified

as lack or flaw in the human resources or factors limiting the competitiveness of the

companies, ineffective distribution channels, poor labor relations and obsolete

products compares to other competitors

Understanding the company’s operations is the key goal in analyze the internal situation This inquiry is based on the resources and the capabilities of the company With the effective use of the company’s own resources (trademark, status, brand name, loyalty customers, etc) to create a special ability, the company can give its products an competitive edge over the competitors through the construction of unique features

!.1.4.2 Tools — Matrix applied for strategic planning

According to Fred R David, the necessary techniques to form a strategic planning involves three stages, the tools used in this process can be applied to all organization’s types and scales, it helps the directors to identify, evaluate and choose the strategies, it is expressed in the following stages:

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Opportunities — matrix (SPACE) (BCG) (IE)

a External Factors Evaluation Matrix (EFE)

The external factors evaluation factors allows the strategists to summarize and assess the economic information, society, population, geographic, political, government, legislation, technology and competitive There are five steps in EFE matrix:

Step 1: making a list consists of 10 to 20 opportunities elements and primary threats, which play a major role in the company’s success as identified in the inspection process of external factors

Step 2: classifying the importance from 0,0 (not important) to 1,0 (very important) for each element This classification shows the significant of

the corresponding elements to the company’s success, the sum of all the elements should equal to 1,0

Step 3: categorizing from | to 4 for each element of success shows

how the company’s current strategies respond to these factors, which 4 is a good reaction, 3 is above average, 2 is average and | is low These levels are based on the effectiveness of company’s strategic Therefore, the classification in this step is depended on the company scale, while the classification in the previous step is based on the branch

Step _4: Multiplying the elements importance with its kinds to distinguish the important points for cach elements

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Step 5; Adding the important points of all factors together to identify

the total point of the matrix for the company

The total point of the matrix is not depends on the amount of the elements

available within it, the highest is 4 and the lowest is | If the total is equal to 4, the company Is reaction to external threats and opportunities is good, while 2,5 indicates

an average response and | is weak

b Internal factors evaluation matrix (IFE)

The final step in the analysis of internal situation is to compose the internal factors evaluation matrix (IFE) The tools make up this strategy help to summarize and evaluate the strengths and weaknesses of the business’s functions and it provide

the foundation to identify and assess the interdependence between these functions

There are 5 steps in the IFE matrix:

Step 1: creating a list composes of 10 to 20 factors include the

strengths and weaknesses, which could affect the company’s growth

Step 2: Assign the important for 0,0 (not important) to 1,0 (very important) for each element The importance assigned for the elements indicates how it could influence the company’s successes Excluding the

major elements, which is the internal strengths and weaknesses, factors that are considered to have the most influential effects on the company’s

performance, should be regard as the most important The total of all the critical levels should equal to 1,0

Step 3: classifying from | to 4 for each element will displays the factors that represent the biggest weakness (categorize as 1), the smallest

weakness (categorize as 2), the smallest strengths (categorize as 3) and the

largest strengths (categorize as 4) Thus, this classification is based on the company’s basis while in the previous step, the important levels is set on the branch’s basis

Step 4: Multiplying the factors importance with its kinds to identify the important points for each factors

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c Competition picture matrix (CPM)

Competition picture matrix in comparisons between company with the competition is mainly based on the factors affecting the competitiveness of enterprises, thereby helping administrators to identify strengths and weaknesses in strategy of own as well as strengths and weaknesses of competitors, identify competitive advantages for businesses and business weaknesses that need to be resolved To build the competition picture matrix follow five steps:

Step 1: Make a list of about 10 important factors influence to the

competitiveness of company

Step 2: Sorting the important level from 0.0 (not important) to 1.0 (very important) for each element This classification shows the importance of each factor depends on the degree of influence of factors, the competitiveness of companies, the total importance of all factors to be of 1.0

Step 3: Identify key numbers from | to 4 for each factor, the level of each

factor depends on the ability of company; 4 are good, 3 is above average, 2 is

medium average and | is weak

Step 4: The importance of each factor with its weight to identify the number

of elements

Step 5: Sum of all factors to identify the total score of the matrix

Comparing the total number of companies with the competitors to evaluate competitiveness of companies

d SWOT matrix

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SWOT matrix is used to list all the opportunities, threats, strenpths and weaknesses within the companies, order and appropriate location Based on the rclationship between these factors, the analysis will be conducted to select appropriate solutions through these combinations: strengths - opportunities (S_O), strengths - threats (S_T), weaknesses - threats (W_T), weaknesses - opportunities (W_O) Depending on the field of business, administrators will use one or more matrix to conduct SWOT analysis and select solution

SWOT groups often present four basic strategies:

S_O: The strategy is based on the strengths of the business to exploit opportunities from the outside

S_T: The strategy is based on the strengths of the business to prevent or

limit threats from the outside

W_O: The strategies to reduce the internal weaknesses to take advantage

of opportunities from the outside

W_T: These strategies are essential to reduce die m internally to prevent

or limit the risk from the outside

e Strategic position matrix and evaluation activities (Space):

This matrix uses to evaluate operation of company as well as define

position of company Asises of matrix represent to internal two aspects of

organization are financial strenght (FS) and va competitive advantage (CA) and

external two aspects of company are enviromental strenght (ES) and industry

Step 2: classify internal and external successful clement This is the

similar EFE matrix, IFE matrix

Step 3: Identify the strategies that can replace that business should consider for implementation

Step 4: Determining the number of attractions in each strategy The score shown the fairly attractiveness of each strategy compared with other Strategies, assessment scale trom | to 4: | is not attractive, is slightly

attractive 2, 3 is quite attractive, 4 is very attractive

Step 5: Calculating the total number of attractions, this is the result of multiplying thenumber of classification (step 2) with some interesting

points (step 4) in each row

Total points higher, strategy more attractive

Step 6: Adding some attractive points That is the sum total of the

attractions in the columns of the matrix QSPM strategy Level plus the difference between the total points in a attractive strategy, the higher score shown more attractive strategy

QSPM matrix

The main Classify

important (2) Strategy 1 | Strategy 2 | Strategy 3

factors (1)

Selective strategies

Basis of the number of attractions

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L2 Theory foundation on products and market segmentation in marketing: 1.2.1 Definition and role of market segmentation in business and preparing

the business strategy of enterprise

a Definition of market segmentation

Market segmentation shall be understood as dividing market into different segments, in which each segment will have a certain product for a certain group Those divided segments are called market segmentation, which means that a group

of consumers have the same feedback tc a group of marketing stimulations And the market segmentation is a process which classifies consumers into groups based on the difference in necessity, property or behavior

b Role of market segmentation

The enterprise needs to carry out market segmentation because the market Segmentation requires enterprises to investigate their market more carefully Therefore, the enterprises can divide customers in different groups which have the same behavior to approach a marketing method

The procedure of market segmentation requires enterprises to be aware of the se.ection motivation and favorite factors of customers in the market, and then discovering the foundation of competitiveness advantage

The market segmentation also helps enterprises to find out market opportunities through analyzing the necessity of cach customer group From that point, the products of the same kinds but different uses, different packages and prces In order to serve for different necessity of different objectives

The more important is that the market segmentation is a foundation to set up market strategy of enterprises If an enterprise does good job in market

segmentation and defining a suitable market segment for themselves, the success

wil come because the enterprise market strategy is based on their capacity and acual advantage of the enterprises in line with the market necessity In contrast, if

an enterprise makes mistake in selecting a market, the theory strategy is hard to

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Definition: Market segmentation is a group of consumers who have the same

response to the same marketing stimulations The market segmentation is dividing consumers into groups (segments) based on the difference in necessity, property or

behavior

Thanks to the above definition, after the segmentation the general market

shall be divided into segments in order to help customers of the same market segment to have the same necessity or desire in front of the same marketing

stimulations The market segmentation aims at helping enterprises to select their target market segments

For the market segmentation, it is based on the following standards:

a Segmentation based on geography

b Segmentation based on demography

c Segmentation based on psychology

d Segmentation based on consuming behavior

With the above standards, in order to effectively define a market segment, the

market segmentation needs to meet the following requirements:

» Measurability, which means that the scope and effectiveness of the market segment must be measured

» Accessibility, which means that enterprises must be aware of and can

serve the market segments which were divided in line with certain

1.2.3 Selection of target market

a Analysis of market segments

After assessing various market stages, a company needs to make decision on selecting specific market stages in order to carry out business strategies That is the issue of selecting target market

With the above data, so as to exactly analyse market segments we must

detine the scope and speed of development of market segment, structure and attraction of market stages, business targets, and human resource of enterprise in the relationship with cach those segments Therefore, selecting specific markets

requires the following basics:

> Company’s financial capacity:

» Life circle of product consists of three stages:

b Selection of target market

The market segmentation has open several opportunities for a number of enterprises and targets are an important part of the marketing process

The companies must make decisions on the number of selected and the most attractive market segments

The followings are several target markets which were selected and the most attractive:

» Focus ona market segment

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1.2.4 Product location for market segmentation

In fact, the market location consists of actions which aim at setting up competitiveness for enterprise’s products Therefore, clearly defining enterprises’ location and development trend in the market is to define the image of product in customers’ mind in target market Based on that, it is found out that the location of a product in the market is the level of customer’s thinking about product

Making plan in production location: consists of the following stages:

> Analysis and assessment in current location of a product and competitiveness in the market in main characteristics of products, customers and their adaption:

Prediction in potential necessity combination such as relevant products, competitive products of other enterprises

Selection of product location of an enterprise for developing market

shares, and giving out new products into the markets

The strategic location may be based on customers, competitors or other relevant products

In addition, a company should compete with available products (direct competition strategy) With the strategy the company needs to persuade customers by stressing the outstanding characteristics compared with that

of competitor

Dominating a new location is considered as a strategy applied by various

companies, which brings about high effectiveness in business It is said

that this is a strategy for a company to look for a position in the market without any competitors

After finding out the location strategy, the company must start to prepare marketing- mix system The system must be consistent in building up a image for a company and its label This means that if a company applies a

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For the implementation and penetration into the selected market

segments, enterprises selected 3 kinds of strategies:

Non- distinguish penetration strategy and enterprises are toward the most

customers in the same distribution channel

Distinguished penetration strategy, enterprises select several market segments in order to give out suitable behaviors with various model,

quality, price, and distribution Therefore, it will improve their prestige

and sales in a narrower market

Focused penetration strategy, enterprises focus on every small markets, and taking their market shares and prestige back

The market segmentation initially assists enterprises to define a target market

in order to penetrate into the market in effective way and avoiding risks With the factors in geography, demography, psychology and so on, enterprises may define their position in the market and even find out their suitable market with their products and building up a good image in customers’ mind

1.3 Theoretical Foundations of products and market segments in Mobile

Communication:

1.3.1 Population statement:Vietnam is a crowded and young population

country:

Based on the report of UN ~ World’s population 2010, Vietnam population is

89 milions and tent to be 111.7 milions at 2050 Vietnam currently is the 14" in

Number of population in the world

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The result of project: Mobile insights 2010 the young customer share (145-24

year old) plays very important role in Vietnam cell phone service market This share holds 33% current customer (15-55 year old customer) With the potential customer

(who tends to use cell service in next 6 month) it hold around 59% of entire market

This ts the highest rate compared to other groups However the research also shown that about 50% customer in the range of 15-24 already used cell phone (as picture

below)

to in

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Figure 1.2: The rate of young customer in Vietnam

(Source Nielsen, Mobile Insights 2010)

The Vietnam youth is very dynamic and easyly catch up with new tendency They slowly lead the consuming trend They would want to approach and experiment teh new Technology to update the information, to connect people, to Share the feeling The need of using cell phone has been increased by that, not only

making a call, texting but also chating, going online by cell, sending picture, song,

video clip for thier friend Teenager is not only the the customer who uses the

product, but aslo they could make it becoming a hot trend for thier age

In other hand, the teenager is also the current customer and in the future The brand is preferred by teen customer that will have the loyal customer middle and longterm Especially when the teen customer will be more mature and their afford will be increased by thier independence in finance

Which brand name focuses on teen customer means the manafacturer wants

to plan on the sales in future, they want to build the relationship between customer and company which is the most valuable asset of the firm It can bring the loyal customer to company, who buy the product and introduce it to other customer

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Because of all of above reasons the teen custome is becoming the target cus:comer

of all of cell phone providers in both VN and worl

1.3.2 The Vietnam economy begins to develp

The official report of Stastic department sown about Vietnam’s g-owth

2010 = GDP reached 1.98 milion bilion Vietnam (ongs (approximately 1.98 milion bilion VND) — equivalent to 104,6 bilion USD (caculated on the exchange rete on 28/12/2010), higher than 2009 about 13 billion US)

If we make the comparison to the first pericd — 1994 the growth of Vietnam GDP 20190 got higher 6.78% vs 2009 This figure i better than 0.3% vs the plan that was approved by the Congress at the beginning cf 2010 The growth regulary

increases each 3 months and the highest on the las cuarter (about 7.3%) Arranged

by branch, we can see industry and building got hishest growth: 7.7%, service 7.5%

while agriculture growth is just 2.8%

The period 2011-2020 is considered as inastrilized period of Vietnam, so the the urbanised growth will be increased, living standard will be upgraded, so it would bring some rural resident moving to city to vork for industrial zone It makes

the population density getting more crowded Togeher with developing industralize

and modernize, the demand of using technology nd Tele communication will go

uptrend We can say that the potential subscriber is stil very big

1.3.3 The growth of applying Technolog’ information is very good,

especially in mobile service field

“IT and Telocomunication plays very important role in the growth and

development of our country, to help in explicit of roverment activities, to save the time, to save cost for all society The growth of urnover is double or triple the growth of GDP We expect IT and telecommunicatin will take 8-10%0f GDP

We set the target that we will have the frm, the corporation of IT and

Telecommunication as Asian levelon the year of 2015 and They can run their business on international market (some firms’s turnover is over 10 bilion USD)

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ower 1S billion USD

(Source: Approved project document “How to mild VN to be strong at IT and

Telzcommunication” Number 1175 QD-TTg Sep 2, 2010)

Although Mobile service is still new in Vitnam (the first mobile service on ihe world showed up at 1946) and it hias just bee: developing so far 4-5 years but Mobile technology in Vietnam rapidly develops tozatch up the new Technology

GSM is the first technology using in Vietnam with the lauch of Mobifone in

1993 After 10 year CDMA technology has com since 2003 by the openning of Stone Up to now, there are 5 mobile service wih GSM: MobiFone, VinaPhone,

Viettel, Vietnamobile, Beeline There are 2 compaiies using CDMA is Sfone and E-

M mobile However, GSM is the leader on the mariet.with 98% market share

At the end of 2009, VN has started 3G tehnology and 4 companies have

been granded the license: MobiFone, VinaPhoe, Viettel and coporation EVN Telecom and Vietnamobile

In September 2010, Government, Goveent gave the license for 5

companies: NPT, Viettel, FPT Telecom, CMC ari VTC, they have permistion to test 3 - 4G The newest Technologies: LTE (Lon- Term Evolution), UMB (Ultra Mobile Broadband) also to be tested We have a vry big different on applying the new technology of Telecommunication vs Laos aid Cambodia Recently They are sull the test of 3G but they still havent done yetwhile Thailand hasnt given the license for 3G So we can say that our mobile sevice is getting very much close

with the international level

1.3.4 Vietnam is opening Telecom Market

After 18 year from the born of the first moile service: MobiFone — 1993,

now there are 7 mobile services working: MobiFine, VinaPhone, Viettel, S-Fone,

E-Mobile, VietnamMobile, Gtel There ¿are 147,3 sbscribers Besides Government

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ha, yranded the license for 2 companies to providehe online mobile service: Dong Diong telecom company and VTC We have 89 nlion pepole but there are 147.3 miion subsriber So there are very big amoun of subcribers are unreal As esimated there are around 50 milions, customer crrently using cell phone, while

there are around 30 milion persons still away from 1obile service (70% - 20 milion

pe»ple are potentially using cell phone ) This is a lai chance for the providers to get thir customer before the market is full And there ull be also a big fight among the curent providers in the future

Vietnam's Mobile Cellular Subscners (in millions)

Therefore the Number of subscriber keeps ging but since 2007 the growth

lhas been slower speed However, the growth of 40° puts Vietnam in the top group growrng, eventhought we grow faster thian China

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Website: wy 113g vn Enil: qariba(0g3114g5,80U v

Figure 1.4: The growth of VN cell Subcribers (2002 — 2009)

Source: the stastatic of IT and Telecomnication Department

Besides there are a lot of advantages, w can see that the Number of subscribers have been in upward trend and cell sevice has been getting closer to

everybody, but the hot growth makes Vietnam mrket facing to have too many unrcal subscribers That cause the turnover on persubscriber is getting decreased

So he providers will getting more difficult on gettiz to new market Especially the

new provider will be extremetly to compete with 3 sig men: MobiFone, VinaPhone

Figure 1.5 : Cell Market share tie 2nd Quarter 2010

(Source: Report from VAS)

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XU ae GLOBAL ADVANCED MAS TER OF BUSNESS ADMINISTRATION PROGRAM ( RIC 1( 5 Website: a 1193 Enail nba ULV

Based on the procedure of VN — USA tradecommitment and the commitment

of Vietnam goverment to join WTO, Vietnam wil open for the foreign investors There will be a lot of chances but also there are a It of challenges for VN provider if There will be the very big international names like: arriving.Qualcom, NTTDocomo, when they apprear the comp:tition will be very strong on Technology, customer care, price We believe thi the mobile service will strongly develop

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OF MOBIFONE

2.1 Introduction MobiFone

2.1.1 The formation process and Developmnt

a Introduction of Company

- Official Name: Mobile Telecormmunication Ompany

- International trading Name: VIETNAI MOBILE TELECOM

SERVICES CO

- Headquarters: MobiFone Building Lot VPI, “en Hoa Urban Area, Cau Giay

District, Hanoi City

b The formation process and Development

Vietnam Mobile Telecom Services Comany - VMS, a state-owend company under Vietnam Posts ‘amd Telecommuications Corporation (VNPT) were converted to the type of emterprise from tk date 12/7/2010 Decision No 130/QD VNPT-07.12.2010-HD'TV-DOP on th Group of Vietnam Post and

Telecommunications

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: Ầ GLOBAL ADVANCED MAS;TER OF BUSWEBS ADMINISTRATION PROGRAM ( ;l$]( \( r Website } Era

Establishing in 1993, 16th August, VMS 1 become the first operator of mobile communication GSM with MoibiFone braid marking the beginning of the mobile communications industry in Vietnam

1993: Establish Mobile Telecom Company

1994: Establish Mobile Service Center o Region 1 & II, headquarters in Hanoi and Ho Chi Minh City;

1995: Establish Mobile Service Center of Rgon III - based in Da Nang;

2006: Establish Mobile Service Center of Rgon IV - based in Can Tho:

2008: Establish Mobile Service Center of R:gon V - based in Hai Phong, set

up a Value Added Center;

2009: Establish Billing Center;

7/2010: Transformed into Limited liabilitycunpany, State- owned:

12/2010: Establish Mobile Serwice Center tegion VI - based in Bien Hoa

- First Class Labor Medal awardied by the !resident

- “The excellent ICT business iin 2008” vitel by PC World's readers:

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“The excellent mobile operator” granted by Vietnam Ministry of Information and Communications at Vietnam [CT Awards 2008:

“The best customer care operator in 2008” granted by Vietnam Ministry of Information and Communications at Vietnam ICT Awards

( GLOBAL ADVANCED M/ASTER OF BUSNESS ADMINISTRATION PROGRAM

Website: wv ] Ena

Vision, mission, essence values, cultưra norms aspect of MobiFone

o Vision:

"To become strong and’ reliable parnr of all stakeholders in the

telecommunications field sector in ‘ietnam and International"

Places of sending «amd sharing beieits of the most trusted staff

members, customers;, shareholders aidcommunities

The 6sence value of the Compamy::

1 Transparency

The transparency was showed! from awarensss to action of each individual in

the company The Transparency manag:nent board, the transparency

cooperation, the transparency responsibility.th2 transparency interests

2 Consensus

Promoting consensus and the relationship na friendly work environment,

sharing ideas or supporting each other to ievelop, MobiFone has become

strong and the most rehiable partner ef all stakeholders ¡in the

telecommunications sector im Vietnam and iitenationally

3 Prestige

Proud of the superiority of a leading »rind in the field of mobile

communications in Vietnam The custoner services have always been interested and have many choices Intimacy with the skills and spirits to

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Dissatistied with what t they had and always ceamed of reaching up, learning,

creativity, and innovatition to improve beer the needs of cusomer and

constantly changing in r market

5 Responsibilities

The development assoociated with social rsponsibility is the tradition of MobiFone We are comnmitted to providing scial products and services have

been excellent Vietnamnese mobile commun:ation, sharing and shouldering

the responsibility to soci:iety for a sustainable ature

The cultural norms of Company

1 The quality services

t The courteous and cheeerful

Q3 Transparency and coopoeration

+ Fast and accurate

5 Dedicated and creative

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aw

Prepaid

products

(Customers vant to control their spending

customers ave high level of using:

21.4 MobiFone Value Added

GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM

Music Talk service Live info Service

M-VWorlcd - 6x48 Voice Message

Graph 2.1: Annual Growth in subscribers of MobiFone

(Resources: The report of Company activities result)

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® Mobifone

® Becline

® VNMobile S-Fone EVNT

Graph 2.2: The mobile phone market share

M.arket siare

Revenue

40,000 35,000 Ị 30/000 +

- 25000 |

20000 -

15000 +

10000 + 3.000 1 1/965

2008 2009 2010

Graph 2.3: Recently MobiFone Revenue

GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM

Website: www.grigg Email: gamba@gngqq

10,000 + 7.00

| | 5,119 5,000 4 1965 2.635 3647 of ẫ