Summary of Doctoral thesis in Economics: Solution for business development of mobile phone retail store chain in Hanoi

The research objective of the thesis proposes solutions for business development of mobile phone retail chain in Hanoi until 2025 and orientation to 2030.

VIET NAM INSTITUTE OF INDUSTRIAL

AND TRADE POLICY AND STRATEGY

VU VAN VIET

SOLUTION FOR BUSINESS DEVELOPMENT

OF MOBILE PHONE RETAIL STORE CHAIN

VIET NAM INSTITUTE OF INDUSTRIAL

AND TRADE POLICY AND STRATEGY

-

Scientific supervisors:

1 Assoc Prof, Dr Le Trinh Minh Chau

Institute of Commerce

2 Assoc Prof, Dr Nguyen Hoang Long

Vietnamese Commerce University

Reviewer 1:

Reviewer 2:

Reviewer 3:

Thesis will be defended in front of Committee of Institute at

Vietnam Industrial Policy and Strategy Institute - Ministry of

Industry and Trade

At … hour …., day … month … year 20

The thesis can be found at:

1 National Library

2 Library of Vietnam Industrial Policy and Strategy Institute

INTRODUCTION

1 Rationale of the thesis

Nowadays, the development of modern retail trade has provided a wide range of products to meet the increasingly diverse needs of consumers After more than 25 years of implementing the open – door policy and economic integration into the region and the world, the living standard of the majority of the population has been improved and the demand of consuming goods of the people has become more and more diversified, creating great opportunities for retail trade companies

to develop modern business methods, including of retail chain Chain- store method applied to the distribution of mobile phones has opened

up new opportunities for companies and consumers

Firstly, the mobile phone retail chain model has been at the stage of

developing dramatically Both the "wheel of retailing" theory of professor Malcolm P McNair (1958) and the “retail cycle” theory of Marc Dupuis illustrate the view about the degradation of retail stores on a large scale and

the replacement by rising retail chains focusing on particular goods

Secondly, the services of the mobile phone retail chain has been

increasingly diversified Mobile phone retail chains is a specific trading sector because this is the combination of high technological products constanly changing and modern services meeting the needs on a large scale

Thirdly, Hanoi is one of the leading cities in the mobile phone retail

business In Hanoi, many companies have developed their businesses in the successful retail chains such as: The gioi di dong, Viettel, Telecom

A, FPT Shop whereas other chains are developing mobile phone retail chains spontaneously and synchronously Besides, the service quality of mobile phone retail chains in Hanoi has not been properly considered

Fourthly, so far, there has been quite much research on retail chain

model However, the mobile phone retail chain has gradually been standardized and operated with unification Strategic managing functions, stock preparation, goods supply, sale policy, pricing and so on have been centralized companies, while the stores have mainly carried out sales tasks These shifts set new requirements for reaserch on developing the mobile phone retail chains in the current context Therefore, the study on “ Theoretical issues and experience of developing mobile phone retail chain in big urban areas" has practical significance both in theory and practice This is

an important foundation for carrying out research and analysis on the real situation of mobile phone retail chain‟s development in big cities generally and in Hanoi particularly

2 Literature review

2.1.Domestic research

Up to now, some domestic research has showed different views on retail trade However, there has not been research which directly, systematically and comprehensively approach to development of mobile phone retail chain

in Hanoi Some notable research relating to this thesis includes of research in the potentials for Vietnamese retail market; research in developing business

in foreign currency in international market of Vietnamese trade banks; overview research in current condition of retail market; research in improving competiveness capacity of a chain of Vietnamese businesses‟ retail supermarkets in Hanoi; research in improving business environment to develop Vietnamese wholesale and retail services; research in developing civilized, modern retail method in Vietnam; research in developing a chain

of convenient stores in new urban areas in Hanoi

2.2 International research

Until now, there have been quite much research in retail such as: research in changes in trend of consuming Korean food and effects of this trend on development of retail supply chain as well as replacing traditional retail by modern retail; research in service quality of retail chains; research in opportunities in global retail market based on business sectors and market areas with a focus on rising markets such

as China, India, Brazil and other BRICS nations; research in analysing the pattern of a new retail supply chain, research in development of large – scale retailers with a successful and reputable retail brands

It can be said that those above research relates to the thesis and the author inherited some research results in the implementation of thesis

3 Objective and mission of the thesis

- Objective of the thesis: The objective of the thesis is proposing

solutions to develop the mobile chain business in Hanoi by 2025 and

orientation to 2030

- Mission of the thesis: (1) To study basic theoretical issues, mobile

phone retail chain as a business method and the context of development

of mobile phone retail chain‟s business

(2) To study and evaluate mobile phone market generally, together with analyse the current condition of developing mobile phone retail chain of some companies in Hanoi

(3) To evaluate factors affecting the development of mobile phone retail chain in Hanoi Therefore, success, disadvantages and reasons of those disadvantages in developing mobile phone retail chain in Hanoi (4) To forecast the development trend of the market and mobile phone retail chain and propose solutions for developing mobile phone retail chain

in Hanoi by 2025 oriented towards 2030, including solutions for business environment complement and solutions of businesses

4 Object and scope of research

- Object of research: Object of research are theoretical and practical

solutions for development of mobile phone retail chain in Hanoi

- Scope of research: (1) As for content, the research is focused on

the content of developing mobile phone retail chain of companies and local policy in order to develop mobile phone retail chain in Hanoi (2) As for spatial dimension, the research is about solutions for developing mobile phone retail chain in Hanoi and lessons about developing mobile phone retail chain of companies in Vietnam and on the world

(3) As for time dimension, the research aims at analysing and evaluating the current condition of developing mobile phone retail chain in Hanoi with focus on period from 2007 till now and proposing solutions by 2025 and orientation towards 2030

5 Research method

5.1 Data collection method

- Primary data collection method: Primary data for research was collected

by questionnaire investigation The investigation was implemented step by step: Step 1: Identify the investigation goals and select objects to investigate; Step 2: Design questionnaire; Step 3: Start investigating

- Secondary data collection method: In this research, primary data was collected from internal information, including annual activity reports, financial reports of mobile phone retail chains in Hanoi such as FPT Shop, Viettel Store, Thegioididong, Hoang Ha Mobile, Nhat Cuong Mobile, Binh Minh Mobile Besides, secondary data was collected from magazines, newspapers, domestic and international research on development of mobile phone retail chains generally and in Vietnam particularly These data was

mainly in archive, big libraries and online storage

5.2 Data processing method

- - Statistical inference: Statistical method such as percentage, average was used to analyse data about investigation and study the current condition of mobile phone retail chains‟ development in Hanoi Besides, to consolidate the accuracy of research‟s views and results, inference method was used to illustrate reasoning on the basis of knowledge, experience and legacy from domestic and international research Inference method was mainly used in theoretical and evaluation basis of the current condition of mobile phone retail chains‟ development in Hanoi

- Method of analysis, comparison, generalization: The thesis includes of theories about development of mobile phone retail chains, practical documents of reports on research in mobile phone retail chains

as well as articles of other chains in modern retails Additionally,

software SPSS was used to process data

- Legacy method: Domestic and international materials was used such as official document of the Party and the State, documents of policymaking and management authorities, documents of international organizations, institutes, universities and domestic and foreign individuals

6 New scientific achievements of thesis

Theoretical achievements: The thesis is systemized, added theoretical issues about developing mobile phone retail chains in Hanoi, includes specific lessons learned from experiences of successful mobile phone retail chains to apply for other mobile phone retail chains‟ in Hanoi There will have theoretical framework for analyses of developing mobile phone retail chains in Hanoi

Practical achievements: The thesis generalises the current condition of developing mobile phone retail chains in Hanoi from 2007 to now, evaluates results, limitations, and reasons for those limitations Through the investigation questionnaire with three objects, which are: (1) managers of mobile phone retail chains; (2) specialists and managers of state authorities; (3) customers at mobile phone retail chains, related objects‟ opinions about the current condition of developing mobile phone retail chains in Hanoi was collected On the basis of research results, thesis proposes solutions for development of mobile phone retail chain in Hanoi in 2025 and proposals for developing mobile phone retail chain business in Hanoi

7 Structure of thesis: The thesis has 150 pages, with 14 pages for

introduction, 6 pages for conclusion and 63 pages for appendix and divides into three chapters, which are: Chapter 1: Theoretical issues and experiences in developing mobile phone retail chains in big cities, Chapter 2: Real situations of developing mobile phone retail chains in Hanoi and Chapter 3: Forecast about the development trend of the market and proposals for solutions of developing mobile phone retail chains in Hanoi by 2025 orientation towards 2030

CHAPTER 1 THEORETICAL ISSUES AND EXPERIENCES IN DEVELOPING MOBILE PHONE RETAIL CHAIN IN BIG URBAN AREAS 1.1 Definition, factors and characteristics of developing mobile phone retail chain

1.1.1 Definition, retail chain classification

a/ Definition

Retail: Philip Kotler (2003) said that retail includes all activities relating to goods sales or final direct service for consumers to use for their own purposes, not business ones

Retail store: David Lawrence Gilbert Smith (2006) said that business method of a retail store depends on the mobilization of types

of goods and services that store puts in category list This mobilization includes factors: scale of store, features of types of goods and services that store serves, guideline on price, advertisement, designs that store applies Retail store can be divided into two types: traditional retail store and modern retail store

Retail store chain: Hayward and his co – workers (1922) defined retail store chain as a system of retail stores selling goods following an united standard and managed by parent company with strategic managing functions, preparing source of goods, goods supply, sale

policy, price Therefore, retail store chain can be understood as a

system operating and managing business activities of retail stores in form of flow, in which members as well as system functions are specialized, standardized and tightly connected

Retail chain business: is the method of doing business in the market economy, including all methods, patterns and means that the subject which are companies, business man use to do the business in some of or all stages in the process, from producting to consuming products or providing services in the market for benefits

Developing retail store chain: is understood as the process of moving forward from the low level to higher ones, from simplition to complexity, and reducing weaknesses of a thing

Developing retail store chain business:

retail chain development includes all the methods, forms and means that the economic entity (enterprise, individual) as well as the state uses

to change the quantity and lead to the Substantial changes in retail store chain business

b/ Classification retail store chain

Classification of retail chains may be based on different criteria Specifically: Classification by business method of goods in the chain; Classification by the method to link chain

1.1.2 Factors to make up chain

According to a study by Levy and Weitz (2009), a retail chain in particular wants to success, it should have the following six factors: (1) The number of stores and the location of the chain stores

(2) The goods of the retail chain

(3) Retail price

(4) Information provided to customers of the retail chain

(5) Shop design and display

(6) Retail services provided to customers

1.1.3 Role of developing retail store chain business

The study by Levy and Weitz (2011) [53] indicates that retail in general and the retail chain in particular will endeavor to provide value

to consumers in the following four ways: (i) providing a range of products suitable for consumers; (ii) packaging products based on the demands of each consumer group; (iii) ensuring that inventory is always available at the request of the consumer; and (iv) providing services to consumers

1.1.4 Characteristics of products, markets and mobile phone retail chain

The thesis analyzes the content which includes:

a/ Characterisitics of mobile phone

b/ Characterisitics of mobile phone market

c/ Diverse development of models of mobile phone retail chain business

d/ Characterisitics of mobile phone market in big urban areas which

affect to the development of mobile phone retail chain business

1.2 Factors affecting the development of mobile phone retail chain business in big urban areas

1.2.1 Factors of macro environment ( PEST model)

Since 1960s, factors of macro environment in business development have been analysed by PEST model (Politics, Economic, Social and Technological analysis) According to Francis J Aguilar (1967), macro environments included four factors: economic, technological, politics and social Arnold Brown (1970) developed STEP (Strategic Trend Evaluation Process) based on that model, in order to evaluate strategic effects in business In the 1980s, other factors such as ecology environment, legal environment, ethics and demographic were studied and added to create variants with different names like STEEP, PESTLE, STEPLE However, PEST model focusing on first four factors has been most widely used ones until now These are also key factors determining the success of developing mobile phone retail store chain business

1.2.2 Factors relating to sectors (Porter)

In 1979, Michael E.Porter built and published Five Forces model on Havard Business Review The model reflects factors of sectors affecting working and business activities in companies Five forces were: new entrants, substitute products or services, customers/buyers, suppliers and competitive rivalry Researchers have added some other factors to create variants with six or seven forces after developing processes However, five forces model has still been the most common tool for evaluating economic environment

1.2.3 Internal factors of companies

The internal environment of companies consists of internal factors having direct effects and being under control of companies Johnson and his co – workers (2005) identified factors such as human, finance, technology, products and so on created an internal environment Specifically, internal factors affected on developing mobile phone retail store chain in large localities‟ markets included: human resource, research and development activities; products and services, financial resource, marketing activities, culture of organizing, visible property; invisible property ( brand)

1.3 The content of developing mobile phone retail chain business and proposal for research model

1.3.1 The content of developing mobile phone retail chain busisness of companies

In general, the development of the retail chain business requires the development of many factors The thesis topic focuses on the development

of main retail chain business: a Developing retail chain in the market space; Developing the quantity of customer; c Developing the market for mobile phone retail chain business; d Developing the operational structure

of the mobile phone retail chain; e Developing Retail goods of the chain; f Locating and practicing retail prices; Developing the capacity to provide retail services to customers of the chain; h Developing trade promotion activities of the retail chain; i Developing relationships with commodity suppliers and establishing channels for supplying goods to chain stores; j Developing a business information system in the retail chain; k Building and developing the brand of retail chain; l Developing human resource in the retail chain; m Developing relationships and manage operations in the retail chain; n Developing financial resources and technical infrastructure

of the chain; o Developing relationships with state management agencies

1.3.2 Proposals for research model of the development of mobile phone retail chain business

Based on theoretical basis which was presented in previous parts, the author built a model of developing mobile phone retail store chain business including those contents:

Research method was applied by questionnaire with 3 groups of objects (1), manager of mobile phone retail chain; (2) specialists and state managers; (3) customers in mobile phone retail chain The rating scale used in research is the 5 point Linkert scale To analyse data, SPSS software was used

1.4 Experiences of developing retail store chain of some foreign companies and learned lessons

1.4.1 Experiences of developing retail store chain of some foreign companies

The thesis points out the experiences of some retail businesses on the world, particularly: Wall- mart Stores‟ experiences of developing retail store chain in the U.S.; Tesco‟s experiences of developing retail store chain in the UK; Casino‟s experiences of developing retail store chain in France

1.4.2 Lessons learned from those experiences of developing mobile phone retail store chain

Through this research, the author learned lessons of developing

mobile phone retail store chain, particularly: Firstly, mobile phone

Developing retail chain in the market space

Developing the quantity of customer

Developing the market for mobile phone retail chain business

Phát triển thị trường của chuỗi CHBL ĐTDĐ

Developing the operational structure of the mobile phone retail

chain

Developing retail goods of the chain

Locating and practicing retail prices

Developing the capacity to provide retail services

Developing trade promotion activities of the retail chain

Developing relationships with commodity suppliers and

establishing channels

Developing a business information system in the retail chain

Building and developing the brand of retail chain

Developing financial resources and technical infrastructure

Developing human resource in the retail chain

Developing relationships with state management agencies

Developing relationships and manage operations

Developm ent of mobile phone retail chain business

retail store chains need to standardize modern retail of every store in

every chain, step by step Secondly, mobile phone retail store chains

need to focus on building trade and every activities in mobile phone

retail store chain Thirdly, developing mobile phone retail store chain needs to cross the line of urban districts in large localities Fourthly,

mobile phone retail store chain needs to care more about managing

expenditure Fifthly, mobile phone retail store chain needs a sustainable

goods supply in terms of quantity, quality and price, therefore builds a close-knit relationship with suppliers and builds an efficient logistics

Sixthly, companies need to care more about choosing ground for

business Seventhly, employees‟ levels in mobile phone retail store chains need to be improved Eighthly, management level needs to be

truly professional Managing selling in common way does not bring the professional of stores and is likely to lead to the loss due to not using controlling tools Using information technology in mobile phone retail store chain plays a crucial role in dealing with difficulties in steps such

as selling, report, stock in, reducing loss and helps stores operation be more professional

CHAPTER 2: REAL SITUATION OF DEVELOPING MOBILE PHONE RETAIL STORE CHAIN BUSINESS IN HANOI 2.1 Overview of mobile phone market in Hanoi

2.1.1 Growth and shift in Hanoi’s economic structure

The thesis has generalised the growth rate, the shift in economic structure to be the premise for research in the growth rate of mobile phone retail market According to data of Hanoi‟s Statistics Office, in

2016, Hanoi‟s economy continued to remain good growth rate Gross Regional Domestic Product (GRDP) in 2016 increased by 8.2% in comparison with last year‟s same period ones Although economic growth rate of Hanoi is the highest in the past six years but still lower than the goal of Hanoi‟s average growth rate of GRDP in 2016- 2020 period, which is about 9% Economic structure of Hanoi has had an important shift in a positive way to make capital become industrial and trading- services centre of the nation From 1990 to 2016, the proportion of agriculture has decreased sharply from 38.1% to 3.5% in economic structure, while industry and construction have been increasingly important to the economy, with the proportion increased from 38.6% to 62.4% in the same period Economic structure of Hanoi has owned higher qualities with services as the main proportion

2.1.2 Scale and structure of population in Hanoi

According to statistics data till the end of 2016 of General Statistics Office, the total natural area of Hanoi is above 3.300 km2 and the

population is above 7.3 million Hanoi has a relatively balanced population structure in 2015 with the figure of male is 49.3% and the figure of female

is 50.7% Through analysing data about general investigation on population and houses, General Statistics Office forecasted male population will increase by 0.1% in 2020 Basically, Hanoi‟s population structure based on genders will have few changes in the future

2.1.3 Income and structure of citizen, household (in which spending on mobile phone was mentioned)

People living in Hanoi have increasing demands for shopping at retail store chains at shopping malls with the diversity in terms of types, products and appearances The rise in income and the change in consuming trend of people have been the potentials to develop modern retail models generally and retail store chain in Hanoi particularly

2.1.4 Real situation of using mobile phone of people in Hanoi

Over the past years, Vietnamese mobile phone market has developed dynamically and set a goal of approaching over 80 million customers According to research of GFK, mobile phone accounts for 43% of the proportion of electronic commodities‟ turnover, even more than information technology commodities such as laptops, ipads Cao Thi Thanh (2014) examined the frequency of buying new electronic products of consumers in Hanoi from 2012 to 2014 Three selected products were laptop, ipad and mobile phone The result showed that people frequently bought mobile phone most with an average 2.23 times in two years of examination

2.2 Real situation of factors affecting to developing mobile phone

2.2.2 Real situation of factors relating to sector

Retail distribution market of Vietnam in general and Hanoi in particular have high growth rate and high attractiveness due to the change of lifestyle of population groups The group contributing most

to the growth of retail market is young people, their incomes have been increasing and they have increasingly been moving towards consumption and enjoying life instead of saving for the future They increasingly demand modern distribution services with goods‟ quality that are increasingly advanced and plentiful, in line with their needs and living and working conditions

2.2.3 Real situation of inner factors in companies

In order to develop the mobile phone retail store chain business in Hanoi under the conditions of establishing orientation and developing the target market, companies should always develop the operation management of the mobile phone retail store chain business

2.3 Analyzing real situation of developing mobile phone retail store chain business of some companies in Hanoi

2.3.1 Examining real situation of developing mobile phone retail store chain business of some companies in Hanoi

Typical research in real situation of developing mobile phone retail store chain business of joint stock company The gioi di dong (MWG) and

of FPT company in Hanoi was based on factors in terms of : developing mixed retail items, positioning and applying retail price; developing offer and retail promotion; developing retail distribution channels of retail store chain; developing information system of mobile phone retail store chain business; developing retail methods and customer service; developing retail and chain brand identity; developing marketing human resources and the retail forces of chain; developing relationships and management activities in retail store chain

2.3.2 Illustrating test method to identify practical research model

to develop mobile phone retail store chain business of some companies in Hanoi

2.3.2.1 Illustrating investigation sample using qualitative method and quantitative method

The results showed that there were 162 stores in mobile phone retail store chains in Hanoi among 300 stores joining in answering investigation questions; 62 specialists and managers at state authorities

in districts in Hanoi among 100 ones answered investigation questions;

324 customers at mobile phone retail store chains in Hanoi among 600 consumers joined in doing investigation questionnaires

Among companies joining in investigation, more than 70% were joint stock and limited companies, in which nearly 50% were joint stock ones

Most of specialists and managers at state authorities joining in investigation were experienced people, and people above 40 accounts for 65% More than 95% of the number of specialists and managers at state authorities were senior specialists and managers or have worked in this sector with above five years of researching in mobile phone retail Most of customers joining in investigation were men, accounting for 53% of investigation sample

2.3.2.2 Examination results of the measure, research model to develop mobile phone retail store chain business of some companies in Hanoi