Marketing plan for Megavnn service of Ho Chi Minh city VNPT

MBAVB4 HỔ THANH HẢI MARKETING PLAN FOR MEGAVNN SERVICE OF HO CHI MINH CITY VNPT MASTER PROJECT MASTER IN BUSINESS ADMINISTRATION PART-TIME Tutor’s Name: Dr.. The thesis therefore g

MBAVB4

HỔ THANH HẢI

MARKETING PLAN FOR MEGAVNN SERVICE

OF HO CHI MINH CITY VNPT

MASTER PROJECT MASTER IN BUSINESS ADMINISTRATION

(PART-TIME)

Tutor’s Name: Dr LE THAI THUONG QUAN

Student’s Name: HO THANH HAI

Ho Chi Minh City (2011)

COMMITMENT

I hereby committed that the thesis content was prepared and written by myself with information obtained from reliable sources for the partial fulfillment of the requirement for the degree of Master in Business Administration program

Ho Chi Minh City, February, 2012

HO THANH HAI

ACKNOWLEDGEMENT

I sincerely express my thanks to Dr Le Thai Thuong Quan - my advisor who has dedicatedly helped full's me to finish this project

I honorably show my thanks to

- Dr Tran Anh Tuan, Co-Director of Vietnam-Belgium program

- MBAVB faculty members

- The three Coordinators: Mr Serge Bywalski, Ms Hien and Ms Ha – program coordinators

Who have whole-heartedly organized the Vietnam-Belgium management MBAVB4 course successfully

I am appreciated to thank:

- The Director and all of colleagues in Sales Department of Ho Chi Minh City VNPT

- My classmates of MBAVB4

- My family, my friends, my colleagues

Who supported and created excellent conditions for me to complete this project

TUTOR’S COMMENTS

This topic is meaningful and practical in the current context of the ADSL market, where there is fierce competition between suppliers The student has shown that he understands the method and his ability to do the research to produce applicable results The project is approved for public presentation

Ho Chi Minh City, February 23rd, 2012

Tutor’s signature

Le Thai Thuong Quan

ABSTRACT

Ho Chi Minh City VNPT (HCMC VNPT) is the subsidiary of VNPT, one of the leading system telecommunication in Vietnam In Ho Chi Minh City, HCMC VNPT has been operating for many years and providing well service to many customers Given the fact that there are big opportunities as Vietnam is growing fast and more investment in the telecommunications industry is expected, it is necessary for HCMC VNPT to maintain competitive and increase market share The thesis therefore goes deeply into analyzing the internal and external environment of the company for MegaVNN service which is one of key service of HCMC VNPT to find the fittest strategy for the company and then apply to marketing plan

The thesis firstly conducts an external audit of the company environment to figure out opportunities and threats Following the external audit, an internal audit is done to illustrate the strengths and weaknesses Putting altogether, the Quantitative Strategic Planning Matrix is built up to choose the best suitable strategies among four strategic, service development, service diversification, trademark building and development investment strategy To make the study more realistic and objective, one surveys and interview are conducted The result of the surveys and information collected from direct interview are consolidated into the Quantitative Strategic Planning Matrix

Based on main findings from the Quantitative Strategic Planning Matrix, differentiation strategy was chosen then apply to marketing –mix for building marketing plan for MegaVNN service Some recommendations have then been suggested to build marketing plan for HCMC VNPT

TABLE OF CONTENTS

COMMITMENT ii

ACKNOWLEDGEMENT iii

TUTOR’S COMMENTS iv

ABSTRACT v

ABBREVIATION x

LIST OF FIGURES xi

LIST OF TABLES xii

Chapter 1: 1

INTRODUCTION TO THE STUDY 1

1.1 RATIONALE OF THE STUDY: 1

1.2 STRATEMENT OF THE PROBLEM: 2

1.3 OBJECTIVES AND QUESTIONS: 3

1.3.1 Research Objectives: 3

1.3.2 Research question: 3

1.4 RESEARCH DESIGN: 3

1.4.1 Primary data: 3

1.4.2 Secondary data: 3

1.5 SCOPE OF THE STUDY: 4

1.5.1 Space: 4

1.5.2 Time: 4

1.5.3 Objects of research: 4

1.6 STRUCTURE OF THE STUDY 4

Chapter 2: 5

LITERATURE REVIEW 5

2.1 THE CONCEPT AND ROLE OF MARKETING: 5

2.1.1 The concept: 5

2.1.2 The role : 6

2.2 OUTSIDE ENVIRONMENT ANALYSIS: 7

2.2.1 Macro environment: 7

2.2.2 Micro environment 8

2.3 INTERNAL ENVIRONMENT EVALUATION: 8

2.4 MARKETING MIX (4P): 9

2.4.1 Concepts: 9

2.4.2 The components of the marketing mix 10

2.5 SWOT MATRIX: 14

2.5.1 SWOT Analysis 14

2.5.2 The SWOT Matrix 17

2.6 QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM): 18

2.6.1 Define QSPM: 18

2.6.2 Construction of a QSPM: 18

Chapter 3: 21

THE ANALYSIS OF MEGAVNN SERVICE BUSINESS ENVIRONMENT 21

3.1 COMPANY'S PROFILE: 21

3.1.1 Establishment and development history: 21

3.1.2 Mission and target of company: 21

3.1.2.1 Mission of Company: 21

3.1.2.2 Target of Company: 22

3.1.3 Philosophy: 23

3.1.4 Organizational structure: 23

3.1.5 The products and services: 24

3.2 EXTERNAL ENVIRONMENT ANALYSIS: 25

3.2.1 Macro environment: 25

3.2.2 Micro environment: 27

3.2.2.1 Environmental industry: 27

3.2.2.2 Competitors: 30

3.2.2.3 Customers: 33

3.3 INTERNAL ENVIRONMENT ANALYSIS: 34

3.3.1 Internal evaluation: 34

3.3.1.1 Human resource: 34

3.3.1.2 Revenues and Subscribers of MegaVNN Service: 35

3.3.1.3 Research - Development: 35

3.3.1.4 Production - working: 36

3.3.2 Evaluate MegaVNN service of the Company: 36

3.3.2.1 Define MegaVNN Service: 36

3.3.2.2 The facilities at the MegaVNN Service: 37

3.3.2.3 Customer satisfaction with MegaVNN service: 37

Chapter 4: 40

MARKETING PLAN FOR MEGAVNN SERVICE OF HCMC VNPT 40

4.1 SWOT MATRIX: 40

4.2 SWOT STRATEGIES: 41

4.3 BUILDING QSPM MATRIX: 43

4.4 STRATEGIC SELECTION ASSESSMENT: 45

4.5 MARKETING MIX STRATEGY: 45

4.5.1 Develop product and service plans: 46

4.5.1.1 Objective: 46

4.5.1.2 Product/ Service: 46

4.5.2 Price : 49

4.5.3 Develop plans to distribute products and services: 49

4.5.3.1 POS: 49

4.5.3.2 Online: 49

4.5.3.3 Development collaborative sales: 49

4.5.3.4 Contact center: 49

4.5.4 Promotion: 49

4.5.4.1 Advertising: 49

4.5.4.2 Promotions: 50

4.5 BUDGET ESTIMATES: 53

4.6 PLANNING HUMAN RESOURCE DEVELOPMENT: 54

4.7 TIMES CHEDULE: 54

Chapter 5: 56

CONCLUSION AND RECOMMENDATION 56

5.1 CONCLUSION: 56

5.2 RECOMMENDATIONS: 57

5.3 RESTRICTION ON TOPICS /STUDY ORIENTATION IN THE FUTURE: 57

REFERENCES 59

Appendix 1: QUESTIONNAIRE FORM FOR MegaVNN SERVICE i

Appendix 2: METHOD OF SURVEY RESULTS iii

Appendix 3: INTERVEWEE PROFILE iii

Appendix 4: MODEL POSTER FOR ADVERTIZING ON SUMMER 2012 iv

ABBREVIATION

ADSL Asymmetric Digital Subscriber Line

BRAS broadband remote access server

IPTV Internet protocol Television

ISDN Integrated Services Digital Network

MegaVNN Brand name of the ADSL service of HCMC VNPT

PSTN Public Switching Telephone Network

QSPM Quantitative Strategic Planning Matrix

SWOT the Strengths, Weaknesses, Opportunities, and Threats Matrix

VNNIC Vietnam internet Network Information Center

VNPT Viet Nam Post and Telecommunication

Wifi the trade name for the popular wireless technology

LIST OF FIGURES

Figure 2.1.1: Core marketing Concepts 6

Figure 2.4.1: The Four P Components of the Marketing Mix 10

Figure 2.4.2a: Total product Concepts 12

Figure 2.4.2d: Promotional Mix Elements 14

Figure 2.5.1: SWOT Analysis Framework 15

Figure 3.1.4: Organization chart of HCMC VNPT 24

Figure 3.2.2.1a: Internet users in Vietnam 2003-2010 28

Figure 3.2.2.1c: ADSL subscribers In HCMC 29

Figure 3.2.2.2a: Vietnam's ADSL market shares 9/2011 30

Figure 3.2.2b: HCMC’s ADSL market shares 31

LIST OF TABLES

Table 2.6.2: QSPM matrix 20

Table 3.2.1: GDP growth rate of Vietnam since 2004 25

Table 3.2.2.1b: Statistics of Internet subscribers 28

Table 3.3.1.2: MegaVNN revenues period 2007-2011 35

Table 3.3.2.3a: Customer satisfaction with MegaVNN service 38

Table 3.3.2.3b: Customer satisfaction with charge of MegaVNN service 39

Table 4.1: SWOT Matrix 39

Table 4.3: QSPM Matrix 44

Table 4.5: Target of Marketing plan for MegaVNN in 2012 45

Table 4.5.1.2a: Price for Individual-family households 47

Table 4.5.1.2b: Business: Speed from 8M to 10M free static IP address 48

Table 4.5.4.2a: Promotion to customers register MegaVNN with charge calculated by download and upload capacity 51

Table 4.5.4.2b: Promotion to Customers register full package of MegaVNN service 52

Table 4.6: Budget estimates for marketing plan for MegaVNN Service 54

Table 4.8: Time schedule for marketing plan for MegaVNN Service…… 55

Chapter 1:

INTRODUCTION TO THE STUDY

This chapter mentions the rationale of the study, problem statement, research objectives and questions, significance and scope of the study, research methodology and structure of the study

1.1 RATIONALE OF THE STUDY:

In recent years Vietnam has made great achievements since economy has far-reaching integration into the world economy The growth rate averaging 8.5 %, the lives of more and more people are improving, the gap between rich and poor is declined (according to Word Bank), the business activities are increasingly convenient, and they save more costs All the achievements that Vietnam has achieved have support from information communication technology (ICT) However, more specifically Internet is bridge to convey the information from manufacturers to consumers, from business to business, from country

to country around the world

The demand for internet is now very necessary and large, so it opens up a market for service providers The main services that the providers such as VNPT, FPT Telecom and Viettel provide customers access to internet are ADSL and Fiber ADSL service in which direction to individual customers and households, small and medium businesses (B2C) and Fiber towards large enterprises high-traffic use

Currently, the field of internet service, MegaVNN (ADSL) is leading with over 75% market share in Vietnam and 45% market share in Ho Chi Minh City

However, in consecutive years, ADSL market growth has been rated as explosion, growth

in numbers of subscriber after doubling last year In particular, the market is still largely in the hands of the three largest firms is VNPT, FPT Telecom and Viettel

To appeal, throughout the year, the ADSL service providers have launched big promotions Such as free trial / donate modem, free connection fee, monthly subscription-free, even given the charge months of continuous use applied

Customer wait and use promotional free modem, use a few more months of service not worry freight, after that to find the opportunity to continue to be "free" at the other supplier They are willing to cut to cancel service when all benefits are empty

To alleviate this situation, now, companies are researching all incentives Such as the network will not be rushing more promotions that focus on key markets For existing subscribers, although not to the saturation point, but also should be more concerned to retain

And another consideration must also be emphasized; there is pressure to refresh you, from quality issues to the content provider By now, too many choices, users are becoming more demanding with an ADSL service as well as with service providers

In the situation, Market share and sales of telephone and internet services are saturated and shared by competitors such as FPT, CMC, Viettel, Netnam Therefore, VNPT or HCMC VNPT like to promote services to customers and MegaVNN service is very need marketing plan to keep market share and focus on pushing to dominate the market, growth

of revenue in the future

1.2 STRATEMENT OF THE PROBLEM:

Within this topic we will consider to ADSL service (MegaVNN) of VNPT in Ho Chi Minh City market provided by VNPT HCMC

HCMC VNPT is key business and have big market share in telecommunications sector in

Ho Chi Minh City With advanced technology systems, modern and widespread network infrastructure, HCMC VNPT able to fully satisfy the demand of customers for telecommunications services

In recent years in HCMC VNPT also implement marketing plans But all these were planned by VNPT and give the units the criteria and funding that is 2.5% - 3% of sales of unit and divided to perform marketing program for all products and services, perform simultaneously with other enterprises of VNPT The problems are that the marketing programs for products and services MegaVNN the company do not take the initiative,

flexibility, and must comply with general regulations of VNPT In addition, cultural and psychological consumption of people in different regions have difference How to program

a message to them is very difficult, so the program caused many disadvantages and is not highly effective

Solve problems, to help HCMC VNPT have a marketing plan to effectively that is reason I chose this topic "Marketing plan for MegaVNN service of HCMC VNPT" to do for his thesis and hopes to contribute to business efficiency for HCMC VNPT where I am working

1.3 OBJECTIVES AND QUESTIONS:

1.3.1 Research Objectives:

Based on the theory of marketing management, together with analysis of broadband market

in Ho Chi Minh City, this project hopes to provide the marketing plan for MegaVNN

service of HCMC VNPT

1.3.2 Research question:

The research questions are as following:

- What is the customer segmentation?

- What is the industry analysis (competitive analysis)?

- What is positioning statement?

1.5 SCOPE OF THE STUDY:

This project is mainly research on the marketing plan for the service and offers a solution

to implement the plan

1.6 STRUCTURE OF THE STUDY

This research is structured into five chapters Chapter 1 introduces the research including research problem, research objectives, research questions and methodology Chapter 2 provides a literature review of marketing Chapter 3analyze of MegaVNN service business environment Chapter 4 builds marketing plan for MegaVNN service of HCMC VNPT Chapter 5 makes recommendations and conclusion

Chapter 1: Introduction to the study

Chapter 2: Literature Review

Chapter 3: The analysis of MegaVNN service business environment

Chapter 4: Marketing plan for MegaVNN service of VNPT HCMC

Chapter 5: Conclusion and Recommendation

According Prof Philip Kotler: ”We can distinguish between a social and a managerial definition for marketing According to a social definition, marketing is a societal process

by which individuals and groups obtain what they need and want through creating, offering, and exchanging products and services of value freely with others As a managerial definition, marketing has often been described as “the art of selling products” -Philip Kotler "Marketing Management Millennium Edition"

To better understand the concept we must answer the following questions: What is needs? What is wants? What is Demand?

- Needs: describe basic human requirements such as food, air, water, clothing, and

shelter People also have strong needs for recreation, education, and entertainment

- Wants: These needs become wants when they are directed to specific objects that

might satisfy the need An American needs food but wants a hamburger, French fries, and a soft drink A person in Mauritius needs food but wants a mango, rice, lentils, and beans Clearly, wants are shaped by one’s society

- Demands: are wants for specific products backed by an ability to pay Many people

want a Mercedes; only a few are able and willing to buy one Companies must measure not only how many people want their product, but also how many would actually be willing and able to buy it

You can specify the point in the following diagram:

Figure 2.1.1: Core marketing Concepts

2.1.2 The role :

To succeed in business, the business entrepreneurs need to understand the market, the needs and wants of customers, communication skills in business To do this, companies must have a good marketing department to make a bridge between the manufacturers and consumers Through marketing activities, the company will know the needs, wants of customers, so that companies with marketing strategies accordingly to meet more and

better for their customers Since then we have improve the competitiveness of companies

in the market Today, businesses must operate in a fiercely competitive environment and rapid changes in science and technology, the new law, the management of commercial policy, and the loyalty of customers are falling To do this we must know the needs and a wish of “God” is so that there are directions right to meet customer needs in a better way

The scope of marketing is widely used, marketing related to many fields such as price, storage, packaging, branding, sales and administrative management, transportation, charge social responsibility, where retail choice analysis of consumers, wholesale operations, retail assessment and selection of buyers and advertising industry, social relationship, marketing research and service planning products

2.2 OUTSIDE ENVIRONMENT ANALYSIS:

2.2.1 Macro environment:

Macro environment constituted by many factors such as economy, politic, legal system and government, culture, society and population, nature, science and technology

Economic factors always have opportunities and threats for all enterprises in different

industries, and it contingently affected to strategy of the enterprises Economic factors shown by some basic ratios such as: economic growth rate, average income per capita, inflation rate, interest rate, exchange rate, balance of payment, tax system, unemployment ratio, foreign investment, etc

Politic, legal and government factors encompass the point of view, policies of the

Government, current legal system, and diplomatic trend of the Government, stability of politic regime, legal system and Government's macro policy All this factors affect the strategy planning and the operation of the Company, paying attention to these factors will help the Company utilize the opportunities and minimize the risks as well as create favorable environment for Company in its operation

Culture, society and population encompasses standards, valuation, people's education,

customs, consuming habits, population and its growth rate, occupation and income

allocation, longevity and natural birth rate, population allocation Understanding of these factors will help the management to build efficient strategy

Natural factors include geographic position, weather, landscape, land, river, sea, natural

resources underground, sea and forest resources, and the freshness of the environment, air Their impacts to the business decisions have been admitted by the enterprises In many cases, natural factors have become very important elements to the competitiveness of products and services

Technology factor is one of very dynamic factors with opportunities and threats to

enterprises Therefore, enterprises must be careful with new technology as beside the benefit it may make the products become obsolete directly or indirectly

2.2.2 Micro environment

Micro environment is the environment attached to each enterprise and most of the operations and competitions of enterprises are in this environment The main factors of this environment are competitors in the industry, customers, suppliers, implicit competitors and substitutes

The competition pressure in the industry will determine the investment size, competition

intensity and profitability of the industry Once the pressure of any of them goes up, the profit of enterprise will be under pressure of going down and vice versa Thus, the analysis process needs to realize the substance and the impacts of the pressures; it will help the enterprises in defining the appropriate strategy to cope with its competitors

In summary, environment analysis helps to be aware of opportunities and threats, difficulties and challenges for enterprises, strengths and weakness of competitors and other pressures in process of building strategy Those factors need to be summarized and quantified through External Factors Evaluation (EFE) matrix and competitive profile matrix

2.3 INTERNAL ENVIRONMENT EVALUATION:

Internal environment reflects internal strength of enterprise, including human resource, facilities, finance, accounting, production, marketing, research and development, information system and other factors

Internal environment of enterprise is critical in utilizing the opportunities and dealing with threats of the environment Therefore, it's necessary for the process of strategy building to analyze the internal environment factors; it will help to recognize the advantage strengths

of enterprise which need to be maintained and developed as well as the weaknesses need to

be improved

The result of each factor analysis and valuation will be consolidated and quantified in internal factor evaluation matrix Total weighted score will be used to evaluate the capability and ability to response to the environment of the enterprise

2.4 MARKETING MIX (4P):

2.4.1 Concepts:

These four P's are the parameters that the marketing manager can control, subject to the internal and external constraints of the marketing environment, as shown in Figure 2.4.1 The goal is to make decisions that center the four P's on the customers in the target market

in order to create perceived value and generate a positive response

Figure 2.4.1: The Four P Components of the Marketing Mix

2.4.2 The components of the marketing mix

- Warranty

- Accessories and services

We mention four levels of the product:

First: The core benefits of the product, is the service or benefit the customers actually buy

In the specific case of MegaVNN, product is to provide high-speed internet access for customers to use

Second: The specific products that include attributes related to tangible products: such as

design, packaging, quality, characteristics used to distinguish different products on the market The specific part that is the commitment table which designs service quality, speed internet access, leased line connection Internet, the modem, computer, network card

Third: A supplement to the product, including additional attributes to products to attract

customers, often invisible attributes, spare parts, warranty and after sales service, delivery and the trust MegaVNN services support to clients 24/24, installed at home, promotions, providing modem, provide email accounts…

Fourth: product potential, showing the efforts, the manufacturer promises strive to add the

utility of the product in the future For example HCMC VNPT is going to share Internet access to enhance 2Mps/640Kps and increase some services together, such as Internet TV, online gaming, conferencing routing

From the information on the four levels of specific products may be in the figure below:

Figure 2.4.2.a: Total product Concepts

b) Price Decisions

Some examples of pricing decisions to be made include:

- Pricing strategy (skim, penetration, etc.)

- Suggested retail price

- Volume discounts and wholesale pricing

- Cash and early payment discounts

Price is a factor only in the marketing mix to generate income, and other factors it should cost me Price is one of the most flexible elements of the marketing mix, which it can

change quickly, unlike the nature of the product and the commitment of the channel At the same time the price competition is the number one issue is in place for many members in marketing management

The fixing of prices: from past to present value is usually the buyer and seller as determined through negotiation with each other Sellers often bid higher than what they hope to get the car, but buyers usually pay lower prices and they have to spend, after all they're going to face a price they can accept

c) Distribution (Place) Decisions

Distribution is about getting the products to the customer Some examples of distribution decisions include:

- Distribution channels

- Market coverage (inclusive, selective, or exclusive distribution)

- Specific channel members

promotion Explanation

Advertising: Any non personal paid form of communication using any form of mass

Direct mail allows an organization to use their resources more effectively

by allowing them to send publicity material to a named person within their target segment By personalizing advertising, response rates increase thus increasing the chance of improving sales Listed below are links to organization who's business involves direct mail

Internet

Marketing Promoting and selling your services online

Figure 2.4.2.d: Promotional Mix Elements

2.5 SWOT MATRIX:

2.5.1 SWOT Analysis

A scan of the internal and external environment is an important part of the strategic planning process Environmental factors internal to the firm usually can be classified as

strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T) Such an analysis of the strategic environment is referred to

as a SWOT analysis

The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates As such, it is instrumental in strategy formulation and selection The following diagram shows how a SWOT analysis fits into an environmental scan:

SWOT Analysis Framework

Figure 2.5.1: SWOT Analysis Framework

Strengths

A firm's strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage Examples of such strengths include:

• patents

• strong brand names

• good reputation among customers

• cost advantages from proprietary know-how

• exclusive access to high grade natural resources

• favorable access to distribution networks

Weaknesses

The absence of certain strengths may be viewed as a weakness For example, each of the following may be considered weaknesses:

• lack of patent protection

• a weak brand name

• poor reputation among customers

• high cost structure

• lack of access to the best natural resources

• lack of access to key distribution channels

In some cases, a weakness may be the flip side of strength Take the case in which a firm has a large amount of manufacturing capacity While this capacity may be considered a strength that competitors do not share, it also may be a considered a weakness if the large investment in manufacturing capacity prevents the firm from reacting quickly to changes

in the strategic environment

Opportunities

The external environmental analysis may reveal certain new opportunities for profit and growth Some examples of such opportunities include:

• an unfulfilled customer need

• arrival of new technologies

• loosening of regulations

• removal of international trade barriers

Threats

Changes in the external environmental also may present threats to the firm Some examples of such threats include:

• shifts in consumer tastes away from the firm's products

• emergence of substitute products

• new regulations

• increased trade barriers

2.5.2 The SWOT Matrix

A firm should not necessarily pursue the more lucrative opportunities Rather, it may have

a better chance at developing a competitive advantage by identifying a fit between the firm's strengths and upcoming opportunities In some cases, the firm can overcome a weakness in order to prepare itself to pursue a compelling opportunity

To develop strategies that take into account the SWOT profile, a matrix of these factors

can be constructed The SWOT matrix (also known as a TOWS Matrix) is shown below:

SWOT / TOWS Matrix

Opportunities

S-O strategies W-O strategies

Threats S-T strategies W-T strategies

• S-O strategies pursue opportunities that are a good fit to the company's strengths

• W-O strategies overcome weaknesses to pursue opportunities

• S-T strategies identify ways that the firm can use its strengths to reduce its

vulnerability to external threats

• W-T strategies establish a defensive plan to prevent the firm's weaknesses from

making it highly susceptible to external threats

2.6 QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM):

2.6.1 Define QSPM:

QSPM is a high-level strategic management approach for evaluating possible

strategies Quantitative Strategic Planning Matrix or a QSPM provides an

analytical method for comparing feasible alternative actions

2.6.2 Construction of a QSPM:

The left column of a QSPM consists of key external and internal factors The top row consists of feasible alternative strategies derived from the SWOT analysis The first column with numbers includes weights assigned to factors Now let us take a look at detailed steps needed to construct a QSPM

STEP 1

Provide a list of internal factors strengths and weaknesses Then generate a list of

the firm's key external factors opportunities and threats These will be included

in the left column of the QSPM You can take these factors from the EFE matrix and the IFE matrix

Step 2

Having the factors ready, identify strategy alternatives that will be further

evaluated These strategies are displayed at the top of the table Strategies evaluated

in the QSPM should be mutually exclusive if possible

Step 3

Each key external and internal factor should have some weight in the overall

scheme You can take these weights from the IFE and EFE matrices again You can find these numbers in our example in the column following the column with factors

Step 4

Attractiveness Scores (AS) in the QSPM indicate how each factor is important or

attractive to each alternative strategy Attractiveness Scores are determined by examining each key external and internal factor separately, one at a time, and asking the following question:

Does this factor make a difference in our decision about which strategy to pursue?

If the answer to this question is yes, then the strategies should be compared relative

to that key factor The range for Attractiveness Scores is 1 = not attractive, 2 = somewhat attractive, 3 = reasonably attractive, and 4 = highly attractive If the

answer to the above question is no, then the respective key factor has no effect on our decision If the key factor does not affect the choice being made at all, then the Attractiveness Score would be 0

Step 5

Calculate the Total Attractiveness Scores (TAS) in the QSPM Total

Attractiveness Scores are defined as the product of multiplying the weights (step 3)

by the Attractiveness Scores (step 4) in each row

The Total Attractiveness Scores indicate the relative attractiveness of each key factor and related individual strategy The higher the Total Attractiveness Score the more attractive the strategic alternative or critical factor

Step 6

Calculate the Sum Total Attractiveness Score by adding all Total Attractiveness

Scores in each strategy column of the QSPM

The QSPM Sum Total Attractiveness Scores reveal which strategy is most attractive Higher scores point at a more attractive strategy, considering all the relevant external and internal critical factors that could affect the strategic decision

Critical factors Strategies can be selected

Rating (1-4)

Strategy A Strategy B Strategy C Strategy D

Chapter 3:

THE ANALYSIS OF MEGAVNN SERVICE BUSINESS ENVIRONMENT

In this chapter, type of company profile, external, internal environment analysis

3.1.1 Establishment and development history:

- HCMC VNPT was founded according to decision No 482/TCCB-LB dated 14/9/1996 issued by General Department of Telecommunication Until December 2007, Vietnam Post Telecommunication Group was split to Post and Telecommunication in Ho Chi Minh City

- HCMC VNPT is an economic organization - member and dependent unit of Vietnam Post Telecommunication Group-VNPT (Vietnam Post Telecommunication Corporation), operates and provides public services with other dependent member units

in an Post Telecommunication uninterrupted assembly line within the country

- Being the biggest member of VNPT, HCMC VNPT provides telecommunication —IT services accounted up to 15% total revenue of VNPT

- Currently, the Company provides hundreds of telecommunication —IT services with 5,000 qualified staffs and specialists Its philosophy is "Existing and developing by satisfying all customers' demand"

3.1.2 Mission and target of company:

3.1.2.1 Mission of Company: 2

1

HCMC VNPT HR documents

1) Customers: The company determines that the responsibilities to every business customers as well as public benefit ones are the same

2) Products and services: Always come to the users "quickly, safely, conveniently and correctly"

3) Market: to be the leading communication service provider in Ho Chi Minh City 4) Technology: To be the leading communication service provider applying advanced technology in Ho Chi Minh City

5) Philosophy:" toward the future - win a victory in integration and development" 6) For the community: Always share responsibility with society, enthusiastically joining in programs of community development in Ho Chi Minh city

7) Employees are considered as company's property, accompanying with the company

to reach the company goal

3.1.2.2 Target of Company 3 :

Basis of target determination:

- Forecast of broadband development till 2015 and the company's mission

- The results of analyzing business environment and internal conditions of the Company

- Company performance effect in the last years

- Concrete objectives until 2015:

- Developing Ho Chi Minh City telecommunications network is to integrate telephone network (PSTN) with current data transmission network on a common foundation which is new generation network (NGN), using IP protocol

- Fiber network will be built in all districts, broadband television access network and fiber network will be developed in many communes In the urban zones, fiber net will be set up in buildings and residential area

2 Source: HCMC VNPT

3

Source: HCMC VNPT

- To be the best and biggest telecommunications service provider in Ho Chi Minh City

- Obtaining over 1,500,000 broadband subscribers in Ho Chi Minh City

DEVELOPMENT" is the slogan showing the determination of HCMC VNPT to contribute for the development of Ho Chi Minh City as well as of the whole country

05 business units in telecommunication: Western Telephone Company, Eastern

telecommunication Company, Customers Support Center and Charges Management office

- Supporting units: Telecommunication material Company, Telecommunication 1, project management, technique training center

Figure 3.1.4: Organization chart of HCMC VNPT

3.1.5 The products and services:

Setting up network and operating Telecommunication-IT services, including:

- Public Switched Telephone Network (PSTN), Integrated Services Digital Network (ISDN)

- Transmission services (X25, Leased line, ADSL ), Mobile Telephone

- Fixed wireless telephone (Wireless local loop)

- Internet/Intranet services (MegaVNN, FiberVNN)

- Value added services on telecommunication network - Internet

- Consulting, designing, production, construction, assembling, repairing, maintenance

of telecommunication projects and civil projects

- Production of Telephone directory and Yellow pages

3.2 EXTERNAL ENVIRONMENT ANALYSIS:

3.2.1 Macro environment:

Macroeconomic has great impact to all individuals and businesses in general and to each enterprise in specific The impacts could be opportunities, or could be challenge for enterprise in development process The issue is the enterprise needs to build a strategy appropriate with macro environment to utilize the opportunities and overcome the challenges for its solid development; this will affect the existence and development

of the enterprise

- Economic factor:

Gross Domestic Products (GDP): Vietnam economy is in developing period

GDP 2011 forecasted to be 6.3%/year Living standards is improving; poverty ratio in 2011 is down to 9.4% compared to 22% of 2005* However, economic

growth of Vietnam is still low compared to that of other countries in the word and in the region, this due to many factors such as low starting point of the economy, low competitiveness, low living standards, especially in remote or highland areas The economy therefore bellows its potential level In sum up, the development of economy affects seriously the services demands

Table 3.2.1 - GDP growth rate of Vietnam since 20044

Service using level: Like other developed countries, Vietnam is affected by the trend of increasing demand for telecommunication and internet services once the economy develops stably Until now, internet using ratio still low, around 29,268,606 people, with penetration ratio of 32.3%, much lower than that of developed countries

4

Source: department of statistics

Economic area, allocation of productivity forces: also effect as it will reallocate

inhabitants, therefore affecting information exchanging demand

Integration with the world: in next year, broadband markets will be shared with many domestic and international suppliers, however, being an initiator with existing infrastructures, HCMC VNPT will still has more advantages in exploiting this market

- Social and legal factors:

Population: Vietnam has high population density in the region and the world as well, the lowest population growth rate in last 10 years was 1.35% (each year increases 1 million people), with this slowest rate Vietnam will have 94.3 million people by 2015, increased 7 million compared to current That increase is the momentum for all services demands and internet demand as well

Society structure, education: internet demand also depends on society structure, education and position

According to the Vietnam General Statistics Office (GSO), in the first six months of 2011, Vietnam has about 50.4 million people in the working-age group (15 years old and above), an increase of 33,200 people over the average number in 2010

Among the group, 26 million are male, up 72,400, and 24.4 million are female, down 39,200, year-on-year

During the period, the country has 49.2 million employees, up 171,000 people over last year, of whom 48.6 percent are working in the agricultural, forestry and fishery areas, 21.2 percent in industrial and construction areas, and 30.2 percent

in services area

Unemployment rate accounted for 2.58 percent of the working age group, with those in the urban area of 3.96 percent and in the rural area of 2.02 percent