Chiến lược kinh doanh của Viettel

Propose at least two strategic plans The strategy of expanding and developing domestic mobile telecommunications market share of Viettel Military Telecom Corporation in the period of 201

Table of Contents

Introduction

Following assignment 1 and 2, in this assignment 3, I will continue to analyze and report the strategy of my chosen company - Viettel In addition, I will evaluate the company's strategies using various evaluation methods such as SAFe criteria and QSPM matrix

LO4 Apply models, theories and concepts to assist with the understanding and

interpretation of strategic directions available to an organization.

1 Propose at least two strategic plans

The strategy of expanding and developing domestic mobile telecommunications market share of Viettel Military Telecom Corporation in the period of 2015 to 2019 is built on the following foundations:

- Continue to affirm Viettel's position, brand and service quality in the domestic telecommunications market;

- Ensuring to maintain and lead the market of mobile telecommunications in Vietnam with a market share of not less than 40%

- Become one of the 25 largest telecommunications brands in the world in 2019 and achieve the level of operators of developed countries

From the analysis of the business environment in assignment 1 and 2, I proceeded to summarize the external environmental factors that can help administrators choose the appropriate development strategies of Viettel Finally, I apply the quantitative strategy planning matrix (QSPM) to the input data from the aforementioned analyzes to determine objectively which of the above strategies is The most attractive and worthy way for the Group to pursue to successfully implement its

a Market development strategy:

Based on the SWOT matrix combining strengths and opportunities, a market development strategy can be taken advantage of the strengths of parallel coverage, the ability to meet the market to take advantage of the largest market opportunities, namely rural areas villages, mountainous areas and islands to continue developing markets before being saturated and degraded

Market development strategy is a strategy to grow service business, increase the group's position by focusing on developing products and services that are currently the group's strength to attract and dominate the market This is a strategy that requires diversifying products and services in order to take advantage of the strong capital and available human resources and a distribution network across provinces to expand products and services Telecommunications market in Vietnam is growing very strongly, the network operators are currently competing for market share is very fierce With Viettel's market share of 40%, Viettel needs to make efforts to offer cheap information services, support strong advertising marketing to increase the market share of products and services

As of June 2018, the population of our country is about 98 million but the number of mobile subscribers is estimated at 122.6 million (up 5.2% compared to the same period in 2017), thus, the mobile market growth is somewhat slowing down and approaching saturation phase Although the telecommunications market in general and Viettel's mobile market recently have increased, the speed is much slower than the period 2013 to

2016 Therefore, Viettel needs to maintain the existing domestic market and strengthen market segmentation in remote residential areas, targeting poor households who are civil servants, pupils, students, middle and low income classes (DanSo.Org, 2019)

b Product development strategy.

This is a combination of technology strengths, research and development capabilities and wide coverage to offer new and varied products and services to meet the challenges of the existing market

A product development strategy is a new product development strategy for consumption in existing markets As

a company operating in many fields with a diverse product range structure, with a large market, Viettel needs to

research and develop product development strategies that are suitable for customers' tastes with market demand

Diversification of products and services must be carried out in order to take advantage of the Group's strong capital and available human resources and a system of distribution channels throughout the provinces The needs of customers require more attention, better service The opportunity of the developing market is therefore the Group has launched service packages suitable to customer needs while expanding business areas

to take advantage of the Group's ability to dominate the market with pepper leads a number of areas with advantages

Using the strategy to reach customers, Viettel has been searching for new market segments such as customers with a high demand for listening (Tomato package), young people who like to use value-added services (such as Ciao package) And this network has "caught" the opportunity to continually offer new services that bring in great revenue The I-muzik service, after a year, was launched by eight million users In addition, Viettel also offers many types of services such as sharing accounts, receiving and sending email services on mobile phones Among the current carriers, Viettel is currently the provider of basic services and the most added service with more than 18 services The main services that attract 3G are Mobile TV, Imuzik 3G, Pixshare, Yahoo Chat, IM, etc Viettel is researching and adding some additional services such as Video conference, live sport, digital statistics

to continue to support and attract customers

c Strategies to diversify the economic sector

Combining financial strengths, challenges of the market and limitations of Viettel in the SWOT matrix, I realized that I could come up with a strategy to diversify business of Viettel Because the market is about to be saturated internally, there are restrictions on the operating structure and service quality, which is difficult to compete with other companies but has a large financial and network potential business to ensure a higher average profit With this strategy, Viettel will gradually shift its investment to other business sectors First, it is necessary to focus on shifting into relevant fields to take advantage of existing experiences and advantages such as:

- Investment in the production of telecommunications and informatics equipment on the basis of further development of existing factories and technologies;

- Invest in building the retail distribution network of telecommunications and informatics equipment on the basis of the transaction network system;

- Investing in import and export is firstly importing and exporting related products such as telecommunications equipment, switchboards, electronic components for production, investment, etc

- Investing in the development of the postal sector, or gradually taking part in other fields such as contributing capital to banking, real estate, transportation, electricity production, etc

2 Evaluate alternative strategies using various assessment methods (e.g SAFe criteria, Quantitative Strategic Planning Matrix – QSPM) while taking mission and vision of the chosen company into consideration.

“The strategic-management process can be described as an objective, logical, systematic approach for making major decisions in an organization It attempts to organize qualitative and quantitative information in a way that allows effective decisions to be made under conditions of uncertainty Although strategic management is not a pure science that lends itself to a nice, neat, one-two-three approach, the process is widely viewed to consist of three distinct stages: strategy formulation, strategy implementation, and strategy evaluation The QSPM fits into the first stage, strategy formulation, and is an excellent tool for deciding among feasible alternative strategies” (David, 2009)

Matrix of External Factor Evaluation of Viettel (EFE)

Opportunity

Political stability, legislation on competition, telecommunications,

The government restricts the establishment of new mobile

Technology policies on telecommunications and information

Large population (more than 90 million people), large market, one

of the fastest growing telecommunications markets in the world 0.20 4 0.80

Challenge

The competitive environment between mobile telecommunications

Pressure from customers using mobile telecommunications

Challenges from new entrants, international integration in the

With the evaluation point according to EFE matrix, we can see that Viettel is in an attractive environment because of high barriers to entry, substitutes with little or no impact, and Viettel's competitive level is good in the market The economic, political, demographic, technological and financial conditions are all favorable for Viettel's growth in the future However, there is also a great challenge that is the increasing competition of companies in the industry; slowing market growth and customer pressure on costs and service quality

Matrix of Internal Factor Evaluation of Viettel (IFE)

Strength

Network and range coverage, ability to meet 100% of

Mobile telecommunications market share accounts for

Modern technology, well invested, capable of research,

Prestige and brand are affirmed in domestic and foreign

Weakness

The organizational and management structure is heavily

dependent on defense activities, bringing many

administrative features

Loyal customers (postpaid subscribers) are low

Human resources are crowded, hot development has not

From the IFE matrix above, Viettel Group has a total score of 3.00, showing that Viettel is a strong internal corporation This is one of the great competitive advantages of Viettel in the mobile telecommunications market

in Vietnam

Applying quantitative strategic planning matrix (QSPM) to the input data from the above analysis to help quantify to objectively determine which of the above strategies is most appealing and desirable It is worth the Group's pursuit to successfully accomplish its goals The QSPM matrix is built on the basis of:

- List of major external opportunities / challenges and key strengths / weaknesses from the EFE and IFE matrix;

- Integrating and analyzing selected strategies: market penetration & development strategy, product development strategy and operational diversification strategy

QSPM matrix for Viettel

level

The strategy Penetration

and market development

Product development

(Strategies to diversify the economic sector)

GDP increased continuously over 6% in

GDP continuously increased for 10 years

Political stability, legislation on

competition, telecommunications,

information and transmission gradually

improved

establishment of new mobile

telecommunications carriers

telecommunications and information

technology are given priority

Large population (more than 90 million

people), large market, one of the fastest

growing telecommunications markets in

the world

Mobile telecommunications market

The competitive environment between

Challenges from new entrants,

international integration in the mobile

telecommunications market

Products that replace traditional mobile

Network and range coverage, ability to

meet 100% of communes and islands

nationwide

Mobile telecommunications market

Modern technology, well invested,

capable of research, development and

innovation

Prestige and brand are affirmed in

Price policy, suitable products and

structure is heavily dependent on

defense activities, bringing many

administrative features

The quality of service is not uniform and

Loyal customers (postpaid subscribers)

are low compared to Mobiphone and

Vinaphone

Human resources are crowded, hot

development has not met the job

requirements

According to the evaluation data from the above QSPM matrix, we can easily see that the market penetration and development strategy has the highest total score of 6.44; while product development strategy and operational diversification strategy have almost the same score, ranging from 5.45 to 5.41 points As such, the domestic mobile telecommunications business strategy suitable for Viettel in the period 2015-2019 is the penetration strategy and market development This strategy helps Viettel to promote its strengths and take advantage of market opportunities in the period of 2015-2019, with the goal of reaching the end of 2019, Viettel will occupy more than 40% of the market of mobile subscribers with the number of subscribers bags over 50 million

SAFe criteria

When it comes to building a business strategy, it's often difficult to choose the right one, never really implementing and evaluating the usefulness and effectiveness of that strategy So how do we choose? The first thing we need to do is to decide on a criterion to evaluate our options and a helpful approach is to consider the

Suitability, Acceptability and Feasibility (SAFe) of each criterion (Whittington et al., 2017)

Suitability

This is perhaps the most important element in the SAF strategy model, because the Suitability of an option is the key to whether the strategy will do what the company wants it to do or not Suitability is often assessed against

a number of different criteria that are particularly important for a business or company such as conformance

with the environment, expectations, and competence These individual match types should then be further categorized to really reflect the company's specific needs

Acceptability

The acceptable aspect of the SAF strategic model is all about measuring profitability, risk and stakeholder response due to a particular strategy Profits will be measured based on the benefits that stakeholders expect from the strategy and can be both financial and non-financial, depending on what the stakeholders decide Profit calculation can be done by any method such as cost benefit analysis, profit analysis, real option analysis and shareholder value analysis

Feasibility

When it comes to it, the feasible part of the SAF strategy model is actually creating or breaking any chosen strategy Whether the business has the resources, aptitude and ability to implement the strategy is the key to its success, so the financial feasibility should be assessed by forecasting and analyzing cash flow, implementation breakeven analysis and some other financial tests

(Oxford College of Marketing Blog, 2019)

SAFe criteria of Viettel

Suitability

The proposed strategy can address the opportunities and limitations that Viettel faces Because with Viettel's strategy to penetrate and expand the market in the period of 2015 - 2019 based on promoting its strengths to

take advantage of market opportunities, Viettel identifies the market and solution to penetrate and development include:

• Markets in rural areas, remote areas, fishermen, mountainous islands: Statistics show that 80% of the population in rural areas, this is a very large market object because of the growing economy, The cost of using the phone is getting lower and lower With the advantage of coverage and the ability to meet customer needs in these areas, Viettel is very convenient to capture the market Along with the process of rich-poor division is the migration from rural to urban areas Therefore, if these people have used Viettel before, after using it in the city, the usage rate will be very high and contribute to increasing Viettel's market share in urban areas; With this object mainly focusing on low-cost phone products, construction costs only focus on good service of making calls and texting that do not need much for added services

• Urban market focuses on students, pupils and unskilled workers: The most active and prefer to use value-added services such as internet, chat, music, social networks such as facebook, etc Therefore, Viettel needs to focus on low prices for value-added services to keep existing customers who will become loyal customers and bring high benefits

Acceptability

The proposed strategy will probably meet the expectations of the stakeholders (customers) Because Viettel primarily targets the market segment of workers, civil servants, students, students, rural areas, urban areas, etc the middle income class is mainly Based on the analysis and assessment of the business environment, considering the identified goals and tasks, the managers need to choose a development strategy and increase Viettel's position by focusing on developing products and services that are strong as: mobile communication services, Internet Continue to maintain different service packages suitable for many objects in society such as: Parent and child packages; Happy Zone; Tomato; Sumo Sim; Homephone; Sea +

Besides, Viettel's level of risk is at an acceptable level Because Viettel is a company of the Ministry of Defense, it owns 100% of the capital from the state and now the world economy is recovering but it is still very weak and unstable Many difficulties are high inflation, trade imbalance, so the financial risks of Viettel maybe still exist, affecting business activities and expanding domestic and international market share of Viettel

The financial management of the Group during this period should therefore always focus on the ability to mobilize working capital and use capital efficiently, avoiding waste The capital mobilization plan must be consistent with the business and investment programs and not be passive in capital