Xây dựng chiến lược kinh doanh dịch vụ 3g cho công ty vinaphone giai đoạn 2013 – 2018 e

Financial resources 1.3.3 Choose the strategy CHAPTER 2: ANALYZE THE BUSINESS SITUATION OF VINAPHONE 2.1 Overview of Vietnam Telecom Services Company 2.1.1 History and development 2.1.2

LUẬN VĂN XÂY DỰNG CHIẾN LƯỢC KINH DOANH DỊCH VU 3G CHO CÔNG TY VINAPHONE GIAI ĐOẠN 2013 –

2018

COMMITMENT

This thesis is a study done based on theoretical research, knowledge learned and thesurvey of the practical situation of Vinaphone Telecommunications ServicesCompany The data model and the results are analyzed in thesis and researchseriously and honestly I make a commitment for this thesis

TABLE OF CONTENTS INTRODUCTION

2 Purpose of the study

3 Object and scope of the study

4 Study method of the topic

5 Structure of the topic

CHAPTER 1: GENERAL RATIONALE ABOUT THE BUSINESS

STRATEGY IN THE ENTERPRISE

1.1 Concept of business strategy and the role of business strategy in the enterprises

1.1.1 Concept

1.1.2 Role of business strategy in the enterprise

1.2Characteristics and classification of the business strategy

1.2.1 Characteristics of business strategy

1.2.2 Classification of business strategy

a Levels of business strategy

b Types of strategy

1.3Process of developing the business strategy of the enterprise

1.3.1 Identify the objective

1.3.2 Analyze the business strategy of the enterprises

1.3.2.1 Evaluate the external environment

a. Macro environment

b. Industrial analysis1.3.2.2 Analyze within enterprise

a Material base, technique and technology

b Human resources

c Distribution channel system

d Financial resources

1.3.3 Choose the strategy

CHAPTER 2: ANALYZE THE BUSINESS SITUATION OF VINAPHONE 2.1 Overview of Vietnam Telecom Services Company

2.1.1 History and development

2.1.2 Brand value of VinaPhone

2.1.3 The organization structure and function

2.1.4 Human resources

2.1.5 Income statement of company

2.2.1 The management of network operators

2.2.2 Maintenance and network optimization

2.2.3 Network development

2.2.4 Subscribers, sales and handing in budget

2.3 Introduction of 3G service of Vinaphone Company

2.3.1 Overview of 3G service

2.3.2 Current situation of 3G services of Vinaphone Company

2.3.3 Business results of 3G services of Company

2.4 Identify mission, vision and business philosophy of the company

2.4.1 Mission

2.4.2 Vision

2.5 Analyze the business environment for 3G services of Vinaphone Company

2.5.1 Estimate the macro environment (PEST)

2.5.1.1Political factors and laws

2.5.1.2 Economic factors

2.5.1.3 Social and cultural factors

2.5.1.4 Technological factors

2.5.2 Analyse five competitive forces

2.5.2.1Competitive forces of suppliers

2.5.2.2 Competitive forces from customers

2.5.2.3 Threats from potential competitors

2.5.2.4 Threats from substitute products

2.5.2.5 Competitive pressure from internal industry

2.5.3 Analyze the internal environment

2.5.3.1Material base, technique and technology

2.5.3.2 Distribution channel

3.2.3.3 Analyse the resources

3.2.3.4 Analysis of financial capability

CHAPTER 3: CONCLUSION AND SOLUTION FOR BUSINESS

STRATEGY FOR 3G SERVICES OF VINAPHONE

TELECOMMUNICATION SERVICES COMPANY, STAGE 2013 – 2018

3.1Identify mission, vision and business philosophy of the company

3.1.1 General objective

3.1.2 Specific objectives

3.1.3 Build, analyze and choose the strategic methods

3.1.3.1 SWOT matrix for 3G services of Vinaphone Company

3.1.3.2 Matrix to estimate the external factors – EFE

3.1.3.3 Matrix to estimate the internal factors – IFE matrix

3.1.3.4 Matrix to synthesize the internal and external factors – I.E matrix3.1.3.5 Choose the strategy

3.2 Implementation solutions

3.2.1.1 Market development

3.2.1.2 Products and services development

3.2.1.3 Human resources development

3.2.1.4 Invest network infrastructure

3.2.1.5 Distribution channel

3.2.1.6 Define strategic control mechanism

3.2.1.7 A number of recommendations to VNPT Group and State agencies

CONCLUSION

References

Appendix

List of tables, charts, diagrams

Table 1.1: Levels of business strategy

Table 1.2: Matrix to estimate the external factors – EFE matrix

Table 1.3: Matrix to estimate the internal factors – IFE matrix:

Table 1.4 Matrix of internal and external factors (IE matrix – Internal – ExternalMatrix)

Table 2.1 Develop mobile phone subscribers, stage 1996 - 2001

Table 2.2 Develop mobile phone subscribers, stage 2002-2007

Table 2.3 Develop mobile phone subscribers, stage 2008-2012

Table 2.4 – Subscribers and sales of mobile phone services from 2008 to 2012 of Vinaphone

Table 2.5 Departments and units

Table 2.6 Departments

Table 2.7 Functional centers

Table 2.8 Functional centers

Table 2.9 Total employees of company

Table 3.0 Information on package of Mobile internet

Table 3.3 Maximum payment limit for ezCom postpaid subscribers

Table 3.4 Tariff of Mobile TV

Table 3.5 Analyze the competitors

Table 3.7 Labor statistics and labor skills of Vinaphone Company from 2009 to 2012

Table 3.8 Ananalyze the financial capability of Vinaphone Company, stage 2008 –2012

Table 3.9 Statistics Dashboard for investment capital of Vinaphone Company, stage

2008 - 2012

Table 4.0 SWOT analysis

Table 4.1: Matrix to estimate the external factors of Vinaphone Company

Table 4.2: Matrix to estimate the internal factors – IFE matrix:

Table 4.3 Matrix to synthesize the internal and external factors of Vinaphone

Company - I.E matrix

Table 4.4 SWOT matrix and combined solutions

Table 4.5 Strategy group

Table 4.6: QSPM matrix on market

Table 4.7 QSPM matrix about products and services

Table 4.8: QSMP matrix about workforce

Table 4.9: QSMP matrix about network infrastructure

Chart 2.1 Market share of 3G

Chart 2.2 Illustrations of sales from customers’ card recharging from monthly data service in 2012

Chart 3.1 Sales of 3G phones increase rapidly as the market trend and popularity of 3G networks around the world

Chart 3.2 Age distribution in Vietnam (statistics.vn)

Chart 3.3 The number of mobile subscribers as of 12/2012

Chart 3.3 Development of ADSL broadband subscribers in the first 5 months of

2013

Chart 3.4: Statistics of all forms of internet access in Vietnam

Diagram 2.1 Organizational diagram

Diagram 3.1 Distribution channel of Vinaphone

ABBREVIATION

ADSL: Asymmetric Digital Subscriber Line

IT: Information Technology

GPRS: General Packet Radio Service

GSM: Global System for Mobile Communications

VNPT: Vietnam Post and Telecommunications CorporationVinaphone: Vinaphone Telecommunication Services CompanyW-CDMA: Wideband Code Division Multiple Access

PEST: Political, Economic, Social and Technological 3G: Third-generation technology

2G: Second-generation technology

1 The need for topic research

From 2009, as the Ministry of Information and Communications licensed 3Goperation, there are three networks of deployment and having business services on3G including Vinaphone, Mobifone, and Viettel Meanwhile, Vinaphone is thepioneer in the deployment of providing 3G service to consumers

In the context that the 2G market have been gradually approaching saturation levels,increasingly fierce competition, low revenue and profit, 3G is really a breath offresh air that helps the telecom enterprises have many security methods in order topromote the business and its development However, after 4 years of deploying 3Gservices, markets and consumer tastes have changed Demand for 3G services hasbecome popular so the service quality of the network is constantly being improved

in terms of area coverage Applications on 3G have grown considerably; thepackage of 3G networks provides the flexibility; smart phones appear much cheaper

in price; 3Gs has changed the habit of using the regular phones of consumers.Currently, 3G services are indispensable for a significant number of customersespecially in big cities The proportion of sales of the 3G network has increased intrend towards and become particularly important strategy of Viettel, Mobifone andVinaphone in the future Therefore, to meet the development requirements,Vinaphone needs to outline a proper business strategy, appropriate capacity ofbusiness and consistent with current market characteristics in Vietnam

With the desire to apply the knowledge that I have learned into practicewhere I am working, I have chosen the topic "Business strategy for 3G service ofVinaphone Telecommunication Services Company, stage 2013-2018" to myresearch

2 Purpose of the study

Build a business strategy for 3G service of Vinaphone TelecommunicationServices Company, stage 2013-2018

- Study object: Theoretical studies and building the business strategies for 3G

services of Vinaphone Company

- Scope of the study: Analyze the current situation and 3G service businessenvironment of the company from 2008 to 2012; propose the solution of 3G businessstrategy of Vinaphone Company from 2013 to 2018

4 Study method of the topic

The research methods of thesis are to use such methods as economic analysismethod, statistical method, comparative method, expert methods and integratedapproach

The methods of data collection of thesis mostly come from secondary materials,textbooks, the statistics, the reports of Vinaphone Company; business summary report

of the year 2008-2013, a summarized report of VNPT; monthly business reports forcompany leaders of Vinaphone 2010 to 2012 and other documents Use the method ofgroup discussions and in-depth interviews of experts, corporate leaders, in charge offinancial business and Vinaphone centers

5 Structure of the topic

Besides the introduction, conclusion, references and table of contents, the content ofthe thesis is divided into three major chapters:

CHAPTER 1: GENERAL RATIONALE ABOUT THE BUSINESS

STRATEGY IN THE ENTERPRISE

CHAPTER 2: ANALYZE THE BUSINESS SITUATION OF VINAPHONE CHAPTER 3: CONCLUSION AND SOLUTION FOR BUSINESS TRATEGY FOR 3G SERVICES OF VINAPHONE TELECOMMUNICATION

SERVICES COMPANY

IMPLEMENT STRATEGY

CHAPTER 1: GENERAL RATIONALE ABOUT THE BUSINESS TRATEGY

The core of the strategy is the strategic measures implementing the resourcesfor target mobilization, which is the optimal method chosen to execute strategy.That is a blink of opportunities, mobilizing resources to meet customer needs, whilecontinuing to develop resources for business in the future, achieving highcompetitive position Strategic management is the process of implementing

"strategic decisions" - decisions that answer the above questions In fact, thestrategic management process includes three main parts described in the followingdiagram:

Diagram 1.1 Strategic management processes

ANALYZE STRATEGY

Source: Lecture

1.1.2 Role of business strategy in the enterprise

In the market economy with intense competition, an enterprise that wants tosucceed should have a strategy That means that business managers must understandthe changing trends in the market and find the key factors for success; exploit theadvantages of the business; be aware of the weaknesses, understand competitors andcustomers desire; know how to approach the market, thus making the creativedecision to deploy more or curtail operations at the time in the certain areas

The above efforts are to provide an optimal strategy; it has the specificadvantage to the basic functions of business:

- Give the enterprise a specific and effective business direction as a guidelinefor all activities of the business functions Help the enterprise promote competitiveadvantage, strengthen the business and market share growth

- Help enterprises limit the risks of uncertainty to a minimum, enablebusiness long-term stability and continued growth

1.2Characteristics and classification of the business strategy 1.2.1 Characteristics of business strategy

Business Strategy of 3G services should ensure the following main characteristics:

- Long-term orientation: Business strategy sets out the objectives anddetermines the direction of business development in the long-term period (3 years, 5

years to guide business activities in a business environment that filled withfluctuations).

- Target: business strategy is often defined basic goals, the business direction ofeach company in each period in order to comply with the policy objectives set out

- Appropriateness: This requires enterprises to build the necessary businessstrategies to assess the true state of the business operations of their production Inaddition, it can review and adjust to fit with the change of environment

- Continuity: business strategy must be reflected throughout the ongoingprocess of the elaboration, implementation, assessment and strategy adjustment

1.2.2 Classification of business strategy

a Levels of business strategy

The business strategy has three levels, as followings:

Table 1.1: Levels of business strategy

Corporate strategy Overall goals of business

Where to compete

Business strategy Related to the specific

Functional strategy Related to each function

of the enterprise

How each function support the enterprise

Source: Lecture on Strategic Management subject of PGSM program

- Corporate strategy relates to the overall goals of the business and scale to meet theexpectations of the shareowners Any change in the business structure of theorganization will be able to change company strategy

- Business strategy: Consider that how the organization conducts the competition inthe specific business or industry It relates to the strategic location of the selectedproducts to meet customer needs, gain competitive advantage over rivals, exploitand create new opportunities

- Functional strategy: the decisions and actions target short-term building of parts of

and each department in the enterprise Thus, functional strategies focus on theissues of resources, processes and people.

b Types of strategy

In the telecom enterprises, the business strategy in the enterprise includes:

- Strategy of cost leadership (low-cost strategy): The company's goal is toperform better (have an advantage over) the competition by doing everythingpossible to produce goods or services at lower cost than competitors do

- Differentiation Strategy: the purpose of this strategy is to achieve a competitiveadvantage by creating products - goods or services that consumers are aware ofunique in their comments

- Focus or emphasis strategy is different from the other two main strategicorientations because it serves the needs of a finite group of consumers in themarket The company pursues a strategy that emphasizes a focus on serving aspecific market segment, that segment can be determined according to geographicalcriteria, customer type, or a branch of the product line

Specifically, the strategies are as below:

- Strategy of development and building to hold and maintain, harvest or remove

- Strategy of following the trend or create product differentiation

- Focus strategy in the key existing markets or market development.

- Strategy of retraining labor recruitment or new personnel from outside

- Strategy of business cooperation or technology purchases from foreigncompanies

1.3 Process of developing the business strategy of the enterprise

1.3.1 Identify the objective

Strategic vision is a future dream that image towards business Strategicvision requires not too specific or too general to answer the question: Who we are inthe future Constitute a strategic vision including core purpose (an ambitious goalfor several decades) and core values (which we share guidance of business activitieswherever)

Mission of strategy is to answer what the enterprise will do or in other words,the major goals to be accomplished such as what, led to where.

The strategic objective is the commitment of the results that enterprises need

to perform at a certain time in the future A strategic goal requires feasible but must

be ambitious on the other hand to evaluate the implementation of the strategicobjectives that must be measurable There are two main objectives that financialobjective and strategic objective

Financial objective is the commitment to the financial results desired forbusiness performance and revenue, capital, profits This goal is often preferredbecause of ease of calculation, easy to understand and weigh but easily lead toirrational actions for the purpose of immediate profit to affect long-term goals

Strategic objectives related to creation of competitive position of theenterprise compared to the others about brand market share This objective is oftenmore significant than financial goals because it gives a competitive advantage tobusinesses

1.3.2 Analyze the business strategy of the enterprises

1.3.2.1 Evaluate the external environment

The main content of external environment is to analyze the macroenvironmental factors such as politics - law, growth of population, natural culture,technology and people often use PEST model to analyze To analyze the industryenvironment, people often use Porter’s five forces model, and then analyze thestrategic groups and give key to the success of the enterprise

a Macro environment

Politics and law factors: These factors have influenced all the businesses on a

territory since institutional factors and the law may endanger the viability andgrowth of any industry When trading on an administrative unit, the enterprise will

be required to comply with the legal institutional factors in that area

Political stability is a very important factor for a developing economy.Institutions that have high stability can create good conditions for business

operations and in the other hands with the institutional instability, conflict willnegatively impact business operations in the territory of that country

The law and policy of the nation directly affect the survival of the enterprise.Specifically, the related laws, investment laws, corporate law, labor law, antitrust,anti-dumping and export tax policies, import, consumption taxes, income tax will affect revenue and profitability of the business

International integration is the trend, and this trend does not createopportunities for enterprises, countries in developing production and business.Globalization creates competition and competitors come from all areas It isimportant for the integration when trade barriers will be gradually removed; theenterprises have the opportunity to trade with partners in distant geographic areas.Under the WTO agreement, the foreign firms can participate in investing in thetelecommunications market

Economic factors: Enterprises should pay attention to the economic factors

in the short-term, long-term and government intervention on the economy.Typically, enterprises will be based on economic factors for investment decisions inthe sector, the area of product development Any economy that also has its cycles, ineach particular phase of the economic cycle factors with interest rates, inflation,GDP growth and wage policies telecommunications companies will haveappropriate decisions for them

Natural and socioeconomic factors: Each country or territory has its

cultural values and specific social factors, and these factors are characteristics of theconsumers in that area These cultural values are the values of a society made up,can foster that social existence and development Therefore, cultural factors aregenerally very protective in scale and tightly, especially the cultural and spiritualfactors Besides culture, the social characteristics also make the telecom enterprisesconcern as market research since the social factors will divide the community intocustomer groups, each group has the characteristics, different psychologicalincome .: The average life expectancy, health, nutrition, diet, average income,

income distribution, lifestyle, educated opinion about the aesthetic, psychologicallife conditions.

Mobile service is info-tech service that requires the user to have certainknowledge so education level as a huge factor affecting the demand for mobileinformation services In addition, the concept of life quality, social movements andthe influence of the culture also greatly affect consumer behavior for high-techservices

Technological factor: The world has been in technology revolution since a

series of new technology was launched and integrated into products and services Inthe past, we used fixed telephone generation and then mobile phone 1G, 2G forvoice only However, with the rapid development of 3G technology, gadgets arepowerfully applied so smart phones are increasingly modern and reasonably priced

A number of countries around the world have begun testing 4G technology andapplications

b Industrial analysis:

The fact that the industry is very different in terms of economiccharacteristics, competitive situation, prospects for future profits Economiccharacteristics of each industry vary with factors such as the size and growth of themarket, the pace of technological change, the geographic boundaries of the market(local or global); the number, scale of buyers and sellers; the size of the productsold, the type of distribution channel… Competitive forces and the focus ofcompetition in the industry are different in price and quality… The administratorscannot form a long-term orientation, or a strategic decision, if they do notthoroughly understand the strategic situation of the company, the competitiveconditions that it faces, how to make a match between resources and capabilitieswith those conditions

For the analysis of environmental factors of the telecommunicationsindustry affecting directly to the company's operations, 5 forces model of Michael

"Competitive Strategy: Techniques Analyzing Industries and Competitors" is themost effective tool The competitive forces model indicates that strongercompetition, the limited ability of existing firms to raise prices and higher profits.The task is set for the managers to be aware of the opportunities and risks that theforces of change will bring, thereby building adaptable strategies.

1- Suppliers: The number of suppliers will decide to competitive pressures, their

negotiating power for industry and enterprises If there are only a few suppliers inthe market, it will create massive competitive pressure, which affects the entireproduction and business activities of the sector In fact, in Vietnam market for manyyears, suppliers from China such as Huawei, ZTE have dominated the market fortelecommunications equipment for mobile networks in Vietnam even though therewere previously only MOTOROLA, NOKIA-Siemen, NEC and ERICSSON

2- Customers: The customer is a factor that can affect directly the entire business

operations of the telecommunications industry Customers can be divided into 2groups: Retail Customers and Distributors Both groups are now pressuring onprice, quality, and service and come as competition controller in the sector throughbuying decision The young client group are customers who use 3G services themost, they surf the web, play games, listen to music, chat, and other utilities on the3G; they require strategic quality services to best meet the wherever they go and theprice is flexible, otherwise they will leave the network This puts pressure on theentire business operations of the company, to improve network capacity, coveragearea, and the purchase of equipment investment, meet financial resources, customercare policy… Therefore, we need to consider the impact on the competitivepressure from clients in the following aspects: size, importance, customer-switchingcosts, customer information Especially when we have to analyze the importance topay attention to them, they can go directly into the internal menace within theenterprise

3- Potential competitors: According to M-Porter, potential competitors are those notcurrently available on the market but can affect the industry in the future As for

potential competitors, their strong or weak pressure will depend on the followingfactors:

The attractiveness of the telecommunications industry: This factor is reflected inindicators such as rates of return, the number of customers and the number ofcompanies in the industry

The entry barriers to the telecommunications industry: those factors make entryinto a sector more difficult and costly

In addition, there are the technical factors, the ability of capital to commercialfactors such as distribution, branding, customer systems

In addition to the telecommunications industry, the specific resources aretechnology characteristics (CDMA or GSM), Frequency, Degree, patents, humanresources, the protection of the government as well as the barriers that enterprisesparticipating in the telecommunications market need to focus

4- Thread from substitute products: Substitute products and services are the products

or services that can satisfy equivalent to the current products and services in theindustry

5- Competition within the industry: Enterprises in this industry will compete directlywith each other to create pressure back on the industry to create a competitiveintensity The current competitors are the factors most directly affect the ability tomaintain the position of the enterprise That is a direct threat forces to the existenceand development of enterprises Every decision to competitor's actions has the mostimpact on the operations and business results of enterprises

Mobile telecommunications market currently has three major networks asViettel, MobiFone and Vinaphone taking to 90% market share Previously, therewas only the biggest rival Viettel, MobiFone and Vinaphone competition stillcompeted within VNPT However, according to the restructuring strategy of VNPT,there did no longer own two mobile brands anymore, which means that in the futureVinaphone will compete fairly with Mobiphone Enterprises always predict theircompetitor's actions to develop strategies proactively, coping strategies tostrengthen and improve its position in the market

1.3.2.2 Analyze within enterprise

The main purpose of the analysis is to clarify the business strengths andweaknesses based on resources as well as intangible tangible to show the ability ofthe enterprises On that basis, choose the ability to form a distinct competitiveadvantage for enterprises Analyzing internal enterprises require consideration oforganizational context, the environmental aspects of external and internalorganization The internal factors of the enterprises are strong or weak; the externalenvironmental factors will be an opportunity or a risk to the enterprise's desireleadership, enterprise value, prestige and competitive advantage.

To understand the situation of the enterprises, it is necessary to analyze theresources:

a Material base, technique and technology

Material base, technique

To get the mobile information services provided to customers, an enterprisethat provides mobile communication services needs to invest, switchboard buildingsince this is the mobile switching center, building the network of base stations ofmobile communication in scope of providing services Then proceed to connect thebase station to PABX switches to form a mobile communication network throughthe complete transmission equipment such as microwave, Viba, optic… As themobile communication network form completely, it is necessary to manage, operateand maintenance to ensure a good service network and provide safe and highquality

Therefore, mobile communication networks can be considered a necessarycondition for providing enterprise mobile information services with high quality.There are large-scale network with qualified management, operation andmaintenance of the system that will create greater competition for the enterprises

Technology

Mobile technology in the world today has undergone rapid development Atpresent, the world is using mobile generation 2G (GSM) and many countries havemoved to generation 2.5G (GPRS, EDGE), 3G generation IMT-2000/UMTSstandards (CDMA) and are testing generation 4G The choice of technology to

provide mobile communications network is crucial to the competitiveness ofenterprises Technology selected to match the resources of the enterprise must beconsistent with the conditions and the business environment In the current businessconditions and future, how technologies promote and how enterprises can makemore dominant than competitors can.

b Human resources

Humans are the key factors determining the survival and development ofenterprises The level and quality of the workforce affect quality of products andservices that provide enterprises People must have qualifications and enthusiasm towork with the new approach and operate the machines with high-tech It is the basisfor creating competitive advantages for enterprises

Criteria for management capacity and business leaders: management

capacity and business leaders to provide mobile communication services aredetermined by the efficiency and effectiveness of the strategies and specificbusiness policies as followings:

- The distribution policy and consumption

- Marketing policies: include promotion policy and trade promotion activitiessuch as advertising, promotion

- Training policy and human resources development

- Investment policy

Criteria for qualification of workers: This criterion is evaluated through the

development of qualified workers and labor productivity

- The development of workers' skills: include the development of knowledgeand skills of workers over time Specific expression for this development is thenumber of employees with college degrees, community or the number of skilledworkers account for the labor structure of the enterprise, evolves over the years

- Labor productivity is the ability to serve the employees of the enterprise Inthe Mobile Telecommunications sector, labor productivity is expressed throughindicators such as number of subscribers / labor turnover / labor, revenue /subscriber

c Distribution channel system

System of sales and distribution channels is to deliver products to customersand best satisfy customers' needs Competitive power is generated by marketing andhigh sales activities Quality of customer service contributes significantly toimproving the quality of products and services It builds good image of theenterprises in the palm of our customers, keep customers loyal to their products Foreach company, the distribution systems are also different Currently, Vinaphone isthe dependent units of VNPT Group so the distribution system depends on the salesnetwork of the telecom units in 64 provinces and cities across the country.

d Financial resources

An enterprise wants to compete must first have sufficient financial capacity Thefinancial situation of enterprises represents the strength of the competitiveenterprises Capital is one of the conditions necessary for enterprises to maintainand expand their operations Therefore, the ability to raise capital and capital useefficiency will make the financial capacity of the enterprises stronger

1.3.3 Choose the strategy

Each strategy has its own characteristics and appropriate for each part of thebusiness development, the current position of the enterprise as well as the specificrequirements Therefore, enterprises need to choose carefully before finallydeciding to choose their own strategies To accomplish that conventional tools suchcalculations: EFE Matrix, IFE Matrix, IE Matrix - Internal - External Matrix,QSPM matrix, SWOT will be used to support decisions of enterprise’s leaders

Table 1.2: Matrix to estimate the external factors – EFE matrix

Main external factors Significance

level Classification

Significance point

Market demand on products

Economic growth, high living standard

Science and Technology

Customer segments

Customers

More and more competitors

Duration of technologies and product cut short

Appeared many alternative products, marketing

is increasingly difficult due to barriers laws

Table 1.3: Matrix to estimate the internal factors – IFE matrix:

e level Classification

Significance point

Qualifications and experience of the leadership

team

Distribution System

Large marketing team

Strong brand and market share

Infrastructure equipment and financial resources

IE matrix is built based on the importance of IFE matrix on the horizontal axis andthe total number of critical points of EFE matrix on vertical matrix

IE matrix includes nine cells and can be arranged according to three different types

of strategies:

Parts in I, II and IV cell are known as development and construction

Parts in III, V and VII cell are called to hold and maintain

Parts in VI, VIII and IX cell are called harvest or remove

Table 1.4 Matrix of internal and external factors (IE matrix – Internal – External Matrix)

SWOT analysis and the combined strategy:

Be used to synthesize the research on the environment inside and outside.Analysis of the external environment is to discover opportunities and threats fororganizations Analysis of the internal environment is to identify strengths andweaknesses, identify resources, capabilities and core competencies of theorganization

Medium2,0 – 2,99

Weak1,0 – 1,99High

3,0 – 4,0

3,0

Medium2,0 –2,99

2,0

Weak1,0 –1,99

1,0

Figure 5.8 IE matrix

SWOT is abbreviated as S:Strength; W: Weaknesses; O: Opportunities; T: Threats

Strength: These capabilities help organizations implement the ability to promote

strength These include capacity value or secret; asset value; valuable humanresources, organizational assets, intangible assets, the basic competitiveness, afactor that could put the company into a market advantage, a coalition to strengthenlinks

Weakness: These points need to be addressed because they prevent organizations

achieve better efficiency when performing work It includes without or lack ofknow-efficient, energy experience and lack of intangible assets and tangible; doesnot have core competencies in the core areas

Opportunities: Trends, dynamics, events and ideas that organizations can take

advantage of

Threats: The events or pressure may occur beyond the control of the organization

needs to decide how to limit influence Opportunities and challenges whenanalyzing the external environment relate to factors: customer, cost pressures,competition, distribution channels, technology, government regulations; suppliers;interest rate environment and politics

In summary, SWOT has an important role, helping to organize the strategicplanning because there are better opportunities, avoid or reduce the externalchallenges, leverage strengths and overcome the remaining weak points

Based on the SWOT analysis, based on goals, direction and businessdevelopment resources, we can make predictions based on the type and combination

of which form the strategic plan

Table 1.8: SWOT matrix SWOT Opportunities: (O): 01, 02… Threats (T): T1, T2…

Strength (S)

S1, S2… S/O: Strategy to take advantage of using the strengths

S/T: Strategy to use strengths to overcome threats

S/T: Strategic use strengths toovercome threats

Weakness (W)

W1, W2…

W/O: Strategy to take advantage

of opportunities to overcome weaknesses

1 The level of leadership

2 Qualified, dynamic and creative

workforce

3 Application level of information

technology

4 3G coverage across the country

4 Awareness of Vinaphone 3G brand

3 Customers confidence in the quality,

products and services 3G

4 Science and technology develop

7 Telecommunications technology

development of the world towards IP

and mobile goods

Total

CHAPTER 2: ANALYZE THE BUSINESS SITUATION OF VINAPHONE

2.1 Overview of Vietnam Telecom Services Company

2.1.1 History and development

The Vinaphone Company was established under Decision No TCCB dated 14/6/1997 by General Minister of General Post Office, which wasformerly known as the national GPC network management board founded in 1996,operating in the field of Nationwide mobile network (VinaPhone), VietnamMessaging Network (Paging), Card-based phone network (CardPhone) VietnamTelecom Services Company is a member unit under Vietnam Post andTelecommunications Corporation, has legal status, dependent accounting ofVietnam Post and Telecommunications Corporation, assigned to manage the assetsand capital consistent with business tasks

331/QĐ-Vinaphone is an integral part of the organization system and operation ofVietnam Post and Telecommunications Corporation

General information:

Full name: Telecom Services Company – Vinaphone

Abbreviated name: Vinaphone

Head quarter: 216 - Tran Duy Hung – Ha noi

Director: Lam Hoang Vinh

Tax code: 0100692876

Website: http://www.vinaphone.com.vn

Since its establishment, Vinaphone has made good role of service providers

in the largest mobile market in Vietnam.The result is shown in exceeding the norms

of the market, products and services delivered by VNPT In 1997, the company hadonly a few thousand subscribers but up to 31/12/2012, there were nearly 28 millionsubscribers, accounting for a large share in the telecommunications market.Subscriber growth figures over the years are as follows:

Table 2.1 Develop mobile phone subscribers, stage 1996 - 2001

Unit: Number of subscribers

1 Develop

subscribers 8,622

25,321

26,53

5 65,527 288,565

354,521

2 Continuous

Annual average 232.5

Table 2.2 Develop mobile phone subscribers, stage 2002-2007

3.137.088

2 Continuous

Annual average

6,021,745

138,6

Source: Summary report of VNP 2012

From the above table, we can see that subscriber growth is high and stable,even there was increase over 200% for many years and the average growth rate inthe past five years was 138.6%.

Sales of the company over the years constantly increased: VND 8,914 billion

in 2008, 28.172 billion in 2012; growth of per capita income in 5 years at 120%,according to the following table:

Table 2.4 – Subscribers and sales of mobile phone services from 2008 to

2012 of Vinaphone

Year Subscribers

(million)

Subscriber 3G (million)

Sales

Sales (billion

Dong)

Growth rate (%)

of the assigned plan Sales from selling terminal products reached 109% of the plan.Consuming sales of customer’s accounts increased almost 20% compared to 2011.Sales from non-voice services rose sharply, reaching over 52% of total freight sale

of Vinaphone (40% in 2011) Vinaphone continues role as a pioneer in thedevelopment of value-added services and applications on the 3G network, withmore than 80 services in operation

2.1.2 Brand value of VinaPhone:

In current modern economy, building the brand and maintaining brand arethe decisive factor in the development of the enterprise to become the marketleader Therefore, Vinaphone knows how to keep building its brand They trust inevery individual’s capacity, in the benefits of teamwork and in the highestprofessionalism They follow the integrity and creativity from their thought andactivity

Mean

The icon of Vinaphone was made of water-drop circles connecting to oneanother softly but closely and meaningfully Water brings life for humankind Thecobalt blue expresses the desire to bring the feeling of gentleness, warmness andfull of confidence to users when they choose VinaPhone for mobile phone services

With the purpose of continuing to perform the commitment for thedevelopment of community, VinaPhone sets a further advance - from customersspreading to mass people in the country, bringing to the world an image ofVietnamese dynamic people with unification and integration spirit

VinaPhone's traditional slogan “never stop reaching far” has been delved into customers' mind From September 2006, VinaPhone's statement “available

everywhere” shows the commitment for developing and reaching far to help

customers more successful in anywhere they go VinaPhone shall not only a bridge

of communication but also a bridge of emotion for millions of customers

Icon: Icon Telecom Services Company (VinaPhone) is the combination of

the peculiar feature and characteristics of typefaces, as well as the official name ofthe company, forming the core of the recognition system

Cube: In term of cube, a peculiar feature of VinaPhone created by the link

from soft but strong unitary three-inspired images of water in the philosophy of theEasterners The water-drops connect to one another express the connectivity andspreading Water presents everywhere; water is soft and lissome but extremelypowerful The image of three connecting water-drops creates a stable and powerfulposture of Vinaphone

Color: Blue color of VinaPhone represents the modern telecommunications

services, high technology, and creates distinct characteristics

2.1.3 The organization structure and function

Apparatus for enterprise management plays a very important role indetermining the survival and development of it Until 2012, the organizationalstructure of the company Vinaphone is as follows:

Table 2.5 Departments and units

- Information Operation Center OMC Ha Noi

- Management and service charge center Ha Noi

- Network development and planning department Ha Noi

Centers and

areas

Vinaphone center 1, in charge of North area Ha NoiVinaphone center 2, in charge of South area Ho Chi Minh cityVinaphone center 3, in charge of Middle area Da Nang

Source: Record by Vinaphone Company

Vinaphone is a state-owned enterprise Director of the company who has theright to manage and operate most of the units, as the legal representative of the unit;

is responsible before the law and operation of the unit in the jurisdiction andobligations specified in its charter and the legislation of the telecommunicationsgroup The vice directors help director handle the company's activities in theassignment of responsibilities and authorization At Vinaphone, board of directorsincluding one director and seven deputy directors; meanwhile including 03 vicepresident and director of three regional centers; in office blocks, including 10departments and clinics; in function center including 05 functional centers and 03regional centers Specifically the following diagram expresses the organizationalstructure of the company:

Diagram 2.1 Organizational diagram

Director

Technical Deputy

Director Business Deputy Director

Investment DeputyDirector

Departments

Functional centers

Regional areas

Deputy director cum

director of the center 1

Deputy director cumdirector of the center 2

Deputy director cumdirector of the center 3

Departments of center

Source: Record by Vinaphone Company

The departments are specialized functional units operating under theassigned task, the advisory, management, performance management and direction ofthe company, as follows:

Accounting and Finance

Assist director to organize and direct the implementation offinance, accounting, statistics and economic accounting ofcompany

3 Business department Assist director to manage the business, marketing, work

rate and growth strategy

4 Planning department Assist director to manage the planning and the whole

company’s supplies

5 Department of personal

and labor organization

Assist the director to research guidelines for theorganization of staff and labor, wage policy, inspectionbonus, labor protection, fire prevention, industrial hygiene

6 Tender department Assist the director to organize procurement of equipment

and materials for the project investment

department Assist the Director in implementing the work after the sale.

9 Trade union department Assist the Director in implementing emulation, reward, and

discipline throughout the company

10 Health department

As basic medical unit: At the same time, the functional unit

of the company is responsible for ensuring managementand primary health care, for the whole employeesthroughout the company

Source: Record by Vinaphone Company

To meet the demand for production, the company established competencecenters, specialist in charge of a production or business of the company, particularly

as expressed in the table:

Table 2.7 Functional centers

1 Project development unit of

3 Management and service

charge center Calculate service charges that customers have used

4 Value-added service center Task of management, business value-added services

5 Network development and

planning department

Study the network planning schemes to ensure optimal network

Source: Record by Vinaphone Company

The regional centers 1, 2 and3 are units that directly manage and operatenetwork, maintaining full operation of the network The centers are fully organizedwith the departments vertically with the company to ensure coordination unit.Management areas of the centers are expressed specifically in the table:

Table 2.8 Functional centers

1 Vinaphone

center 1

Be tasked to manage and operate the networks, business and customercare in Northern region from Ha Tinh back out Organization of thecenters has departments to assist the center director

2 Vinaphone

center 2

Be tasked to manage and operate the networks, business and customercare in Southern region from Ha Tinh back out Organization of thecenters has departments to assist the center director

3 Vinaphone

center 3

Be tasked to manage and operate the networks, business and customercare in Middle region and Tay Nguyen Organization of the centers hasdepartments to assist the center director

Source: Record by Vinaphone Company

2.1.4 Human resources

Characteristics of the telecommunications industry is to have the qualified laborwith high percentage, the company has nearly 80% Vinaphone qualified workersfrom colleges and universities, master's degrees accounted for 6.9%, Ph.D.accounted 0.2%

Table 2.9 Total employees of company

Production: communication, service, support … 1878 86.6%

Source: Vinaphone Company

2.2 Income statement of company

2.2.1 The management of network operators:

Currently, although the network configuration and capacity increase, thenumber of lost contacts increases, while ensuring network security with greaterlevels of 99%; the case of major incidents and lost time contact decreasedsignificantly On the other hand, Vinaphone always interests in the inspection andmaintenance of the network, builds and implements plans to ensure communication;ready to deploy vehicles for mobile communications to use timely, no majorincidents occurred during the holidays, festivals, celebrations, cultural events,political and social events During the rainy season, the complicated weather, withthe intense storm, but by doing good flood and fire prevention, there should nothave any significant damage to equipment, no damage to any person Most of the

involved in talks with the Chinese side on GSM frequencies in the Vietnam - China.The international roaming services obtained encouraging results, in particular:

Successfully tested and put into operation the international roaming GPRSservice with 34 operators in 16 countries around the world

Tested and put into operation the international roaming services with 12operators Total Vinaphone has international roaming with 178 operators in 76countries around the world

Perform conversion from SCCP-Gateway Vietnam International TelecomCompany (VTI) to SCCP Vinaphone for international roaming partners

Up to this point, Vinaphone network of VNPT is provided with seven firstmobile numbers, in which two types with 10 digits and the others with 11 digits.The first numbers are 091 094 125 0123… 0124 0127 0129

2.2.2 Maintenance and network optimization:

Maintenance and improvement of network quality and service have done well, soVinaphone GSM network operation is relatively stable, the equipment system toensure safety; the network quality and service are the only network maintenanceand improved somewhat, although the network size is growing, increasing trafficand adding some new categories of equipment are included in the network.Qualifications of technical forces are advanced a step; the implementation process

is to ensure safety and maintenance of technical facilities throughout the network

2.2.3 Network development

Network development is done on a regular basis and has clear roadmap Thedependent units of Vinaphone have been had many attempts and coordination,rhythm to be able to deploy the installation of equipment in the shortest time, tomeet the communication needs of customers

By the end of 2012, the overall capacity of the network ofVinaphone can besummarized as follows:

Network had over 28,200 radio broadcast receiver stations (in which, 2G hadover 18,700 BTS and 3G had over 9,500 NodeB)

Switches network: the whole network had 45 full switching network systemand packet-switched channel (MSC / TSC, MSS / TSS, SGSN / GGSN)

Ng-HLR with capacity: 63M subscribers

The business support systems include PPS System, System CCBs, IPCC,CRM and CarePlus

The systems provide value-added services: SMSC / FDA, MCA, RBT, SDP,Call Management, VinaPortal

2.2.4 Subscribers, sales and handing in budget

By the end of 2012 as reported business results, the number of subscribersreached more than 33.2 million subscribers with 5.5 million subscribers of 3G,accounting for 30% market share in 3G and also Vinaphone reached 28,172 billion

in sales over 102% of target and 134% higher than the previous year and paid morethan 200 billion budget

2.3Introduction of 3G service of Vinaphone Company

2.3.1 Overview of 3G service

3G (third-generation technology) technology is the third generation communication,allowing transmission of voice and non-voice data (download data, send emails,instant messages, photos ) to access internet speed of up to 14.4 Mbps

3G technology is divided into 2 parts: UMTS (W-CDMA), CDMA 2000

3G has tremendous advantage over 2G

Limitations of the 2G networks are to be built mainly for voice calls and speed data transfer Due to the rapid change of technology, these factors did notmeet the requirements of the wireless revolution

low-Strengths of 3G technology from 2G technology that allows transmission andreceipt of data, audio, image quality for both fixed-line subscribers and subscribersare moving at different speeds With 3G technology, providers can give customersmultimedia services, such as high-quality music, high-quality video images anddigital television, the Global Positioning Service (GPS), E-mail, video streaming,High-ends games

Development of 3G service in the world

Mobile Communication System was the first commercially deployed and inuse since the mid-80s of the 20th century The technology used was the CDMAnetwork or GSM In 1999, the International Telecommunication Union ITUlaunched International Mobile Communication Standards - IMT 2000 later known

as 3G to standardize the digital communication systems in the future and create theglobal connectivity with just one device The two 3G standards are the mostwidely accepted proposal of ITU as CDMA 2000 and W-CDMA (UMTS) - Toupgrade from GSM

company to release a commercial version of the W-CDMA network By 2005,approximately 40% of subscribers in Japan were 3G and 2G networks weredisappearing in Japan Apart from Japan, South Korea was the second country inAsia using popular 3G technology and a number of small territories such as HongKong, Taiwan and Singapore In 2003, 3G services started available in Europe InAfrica, the Wana Company first introduced the 3G network in Morocco in lateMarch 2003 By 2005, there were about 23 networks with 3G across the global;some of which network was only running for test but some networks were put intooperation At the end of 2005, the first 3.5G technology in the world as HSDPA hadbeen deployed in the United States With speeds up to 14.4 Mbps, HSDPA wassatisfying customer needs for speed of any broadband mobile services: Phone with

TV, watch TV online, download movies, downloads music, online Therefore, thetechnology of GSM networks around the world were gradually updated to W-CDMA (3G), HSDPA (3.5 G)

In Asia Pacific, the mobile services market has the world's largest populationand young people account for a huge proportion This is considered as the growingstrongly mobile market and it is where technology high-speed mobile networks arescrambling drastically with 3G By the end of January 2010, there were 90 millionsubscribers using network technology in 3G mobile communications market in AsiaPacific

Telstra Group in Australia completely shut down the CDMA network beforethe end of 2008 to move to a new generation of services using W-CDMA 3Gtechnology

In India, the golden days of CDMA was ending when Reliance applied GSM

as substitute In China, the growth of the Unicom CDMA remained stable based onthe results of the GSM in seven previous quarters

According to market research firm, Pyramid Research estimated that annualgrowth rate of 3G subscribers in the Asia - Pacific region is 58% from now to 2020.According to the research firm, the number of 3G subscribers in developed markets

in Northeast Asia was unbalanced, with 56% in Japan and South Korea in late

2012 However, the number of 3G subscribers will also shift to the emerging

markets in time due to the combination between the government's initiatives, thebenefits of operating costs and average selling price of the device reduced to helpadvance 3G penetrations in Asia-Pacific to nearly 40% in 2014 By 2014, Pyramidestimates that Australia has about 27 million 3G subscribers and account forapproximately 97% of the population China will have about 461.3 million 3Gsubscribers; accounting for 42% of the population rate using 3G In Vietnam, thepredicted number of 3G subscribers in 2014 will be the turn of the 50 million, up42%.

Development of 3G service in Vietnam

On 11 May 2008, the Ministry of Information and Communications released

"dossier for 3G licensing exam set to seven telecom enterprises that already had 2Glicenses set by the Ministry of Information and Communications" Theseenterprises include Vietnam Post and Telecommunications Group (VNPT), VietnamMilitary Telecommunications Group (Viettel), Vietnam Mobile Telecom ServicesCompany (VMS), Sai Gon Post and Telecommunications Services Corporation(SPT), Ha Noi Telecommunications Joint Stock Company (HaNoi Telecom),Electricity of Vietnam Telecommunication and Information Company (EVNTelecom), Ha Noi Telecommunication Joint Stock Company (Hanoi Telecom) andGlobal Telecommunication Joint Stock Company (Gtel) This contest was to choosethe four enterprises, even Partnerships between enterprises in total 7 enterprises sothe Ministry of Information and Communications granted licenses and frequencies

to deploy 3G services in Vietnam

On 18 February 2009, the entry and opening ceremony for 3G contest tookplace at the Ministry of Information and Communications However, with sevenEnterprise, there were only six applications filed since the consortium of EVNTelecom and Hanoi Telecom made records On 2 April 2009, the Ministry ofInformation and Communications announced the enterprises with 3G license asViettel, VNPT, VMS and EVN + Hanoi Telecom, in which Viettel achieved thehighest score with 966 points Even Gtel did not own admission but had

considered that S-Fone has 3G network so it should not necessarily be looking for apartner.

Therefore, Vietnam is among the countries starting 3G applications and hasmany advantages such as no need to fumble navigation since technology is not sonew and the price of hardware devices and software was more comfortable

Besides that, the 3G network deployments have also many risks:

- Investing too much in 3G and almost has to build a new network In fact,demand is still mostly 2G If no user of 3G network, development is not effective

- The project required huge investments, the recoverability of long-term fundsare more likely to be "trap" if we do not carefully calculate the efficiency ofinvestment and development strategy in phases according to market demand,especially when investing in the services market new technologies in a specificmarket like Vietnam

- The number of mobile terminals has had ample quantity with reasonableprice to the majority of consumers

2.3.2 Current situation of 3G services of Vinaphone Company

Vinaphone's 3G services are namely: Mobile Internet, Mobile Broadband(ezCom), Opera Mini, Video Call service, Mobile TV, Mobile Camera However,due to the development of the 3G services market, Vinaphone focuses ondeveloping the following services:

a. Mobile internet

Mobile Internet is a service that helps customers access to Internet directly from mobile phone in anywhere covered by VinaPhone network Customers can usefunctions such as:

- Search information: Read news in e-newspapers or search information in Internet

- Entertainment: Listen to and download music on Zing, watch films or enjoyattractive Video clips in YouTube; Download and play games

- Friends connection: Facebook, Twitter…

- Email and Chat: Receive and send email in YahooMail, Gmail or chat with friends on Yahoo, Ola chat

- And many other utilities

To serve the needs of customers, Vinaphone separates packages asfollows:

Table 3.0 Information on package of Mobile internet

Type Name ofpackage Usageperiod

Tariff (VAT included) Registration

method

Subscription fee (VND) Free capacity Excessive

data charge

Default

-VND 1.5/KB

To register, write SMS:

DK Package Name to 888