Tài liệu Strategies for business development of twg chain stores in vietnam

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH --------------------- TRƯƠNG NHẬT HOÀNG STRATEGIES FOR BUSINESS DEVELOPMENT OF TWG CHAIN STORES IN VIETNAM CHIẾN LƯỢC PHÁT TRIỂN KINH DOANH CHUỖI CỬA HÀNG TWG TẠI VIỆT NAM LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH HÀ NỘI - 2018 ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH --------------------- TRƯƠNG NHẬT HOÀNG STRATEGIES FOR BUSINESS DEVELOPMENT OF TWG CHAIN STORES IN VIETNAM CHIẾN LƯỢC PHÁT TRIỂN KINH DOANH CHUỖI CỬA HÀNG TWG TẠI VIỆT NAM Chuyên ngành: Quản trị kinh doanh Mã số: 60 34 01 02 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƯỜI HƯỚNG DẪN KHOA HỌC: TS. PHẠM VĂN HỒNG Hà Nội - 2018 DECLARATION The author confirms that the research outcome in the thesis is the result of author’s independent work during study and research period and it is not yet published in other’s research and article. The other’s research result and documentation (extraction, table, figure, formula,and other document) used in the thesis are cited properly and the permission (if required) is given. The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business and Management, and the laws for above-mentioned declaration. ACKNOWLEDGEMENT I would like to express my deep gratitude to the teachers of the Hanoi school of Business and Management, Vietnam National University, especially the teachers who imparted to me a lot of knowledge and helped me. Carry out this essay. I would like to express sincere gratitude to Dr. Pham Van Hong has spent a lot of time, dedicated guidance, only told me during the course of the topic. I sincerely thank family, friends and colleagues for encouraging and supporting me in the process of study and research. TABLE OF CONTENTS LIST OF ACRONYMS..............................................................................................i LIST OF TABLES.....................................................................................................ii LIST OF FIGURES AND CHARTS ..................................................................... iii INTRODUCTION .....................................................................................................1 1. Urgency of the topic......................................................................................... 1 2. Overview of the study ...................................................................................... 2 3. Research objectives and tasks ......................................................................... 5 3.1 Objectives .......................................................................................... 5 3.2 Tasks ................................................................................................. 5 4. Objects and scope of the study ....................................................................... 6 4.1 Objects of the study ........................................................................... 6 4.2 Scope of the study ............................................................................. 6 4. Methodology ..................................................................................................... 6 5. Organization of the thesis ................................................................................ 6 CHAPTER 1: RATIONALE OF BUSINESS STRATEGY OF ENTERPRISES7 1.1 Rationale of strategy ...................................................................................... 7 1.1.1 Definition ....................................................................................... 7 1.1.2 Role of strategy .............................................................................. 8 1.2 Building business development strategies of the enterprises.................... 8 1.2.1 Definition ....................................................................................... 8 1.2.2 Strategy building process .............................................................. 9 CHAPTER 2: ANALYZE BUSINESS ENVIRONMENT OF TWP IN VIETNAM ...............................................................................................................24 2.1 Introduction about TWG ............................................................................. 24 2.2 Analyze external environment factors ....................................................... 24 2.2.1 Macro factors ............................................................................... 24 2.2.2 Sector factors ............................................................................... 31 2.2.3 Summary of EFE matrix evaluation ............................................ 34 2.3 Analyze internal environment factors of TWG Vietnam ........................ 36 2.3.1 Quality of human resources ......................................................... 36 2.3.2 Products ....................................................................................... 37 2.3.3 Financial capacity ....................................................................... 39 2.2.4 Market research ........................................................................... 39 2.2.5 Marketing activities ..................................................................... 41 2.2.6 Synthetize and evaluate IFE matrix ............................................. 43 2.4 Summarization of opportunities, challenges, strengths and weaknesses in developing TWG tea stores in Vietnam. ..................................................... 44 2.4.1 Opportunities and challenges ...................................................... 44 CHAPTER 3: DEVELOP STRATEGIES FOR TWG CHAIN IN VIETNAM.48 3.1 The objectives for business development of TWG in the next time ...... 48 3.2 Analyze matrix and select strategies for developing chain of TWG stores .................................................................................................................... 49 3.2.1 Develop strategies for developing chain of TWG stores using SWOT matrix ................................................................................................... 49 3.2.2Select the optimal strategic plans through QSPM matrix ............ 53 3.2.3 Process of implementing the strategies ....................................... 66 3.3 Solutions to implement the selected strategies. ........................................ 67 3.3.1. Additional services with TWG tea .............................................. 67 3.3.2. Promote activities of marketing and market expansion ............. 68 3.3.3 Improve the quality of human resources ..................................... 69 3.3.4. Establish marketing department, promote market research ...... 70 CONCLUSION........................................................................................................71 REFERENCES ........................................................................................................73 LIST OF ACRONYMS 1 VNPost Vietnam Post Corporation 2 VNPT Vietnam Posts and Telecommunications Group 3 TCBC Postal finance 4 TCT Corporations 5 CBCNV 6 PTI Officers and employees Post Insurance Joint Stock Corporation i LIST OF TABLES Table 1.1: External factor evaluation matrix (EFE matrix)...................................16 Table 1.2: Evaluation matrix of internal environment factors (EFE) ...................19 Table 1.3: SWOT mtrix model ...............................................................................20 Table 1.4: Summary table of QSPM matrix...........................................................22 Table 2.1: Some economic indexes of our country ...............................................25 Table 2.2: Policies of domestic tea support ............................................................27 Table 2.3: Customer survey result of TWG ...........................................................31 Table 2.4 Comparison of tea TWG with some competitors .................................32 Table 2.5: Summary of EFE matrix evaluation .....................................................34 Table 2.6: Human resources in TWG .....................................................................36 Table 2.7: Characteristics of TWG tea products ....................................................38 Table 2.8: Market research activity of TWG .........................................................40 Table 2.9: Marketing activities of TWG ................................................................41 Table 2.10: Synthetize and evaluate IFE matrix ....................................................43 Table 3.2 : QSPM matrix for group combination of S-O......................................54 Table 3.3: QSPM matrix for group combination of S-T .......................................57 Table 3.5: QSPM matrix for group combination of W-T .....................................63 ii LIST OF FIGURES AND CHARTS Picture1.1: M. Porter’s model of five competitive forces .....................................13 Figure 3.1 Process of implementing the strategies for developing the chain of TWG tea stores till 2027..........................................................................................67 iii INTRODUCTION 1. Urgency of the topic The fact that Vietnam signed the Trans-Pacific Partnership (TPP)– which willofficially come into effect in 2018 - has opened up many opportunities for enterprises to invest and develop their business. Accordingly, as soon as the TPP comes into effect, the export and import tax rate among TPP member countries will be0%. This facilitates the expansion and investment of foreign enterprises in Vietnam. As one of the members of TPP, Japan is currently the country with the largest import-export volume to Vietnam. The number of Japanese enterprises in Vietnam is increasing in quantity. TWG Tea is one of the famous brands of Japan. TWG Tea currently has 55 stores in 16 countries including Singapore, the United Kingdom, Japan, and the UAE. In order to catch the opportunity from TPP, by the end of 2016, TWG officially opened a Salon and Boutiqueselling tea at B2 floor at Takashimaya, Ho Chi Minh City, Vietnam with more than 800 kinds of premium teas and exclusive processed teas. Defining Vietnam as a fast growing and a potential market for premium tea consumption, TWG Tea intends to develop its TWG chain stores in Vietnam in the near future. However, the later entrance to the market than other strong competitors from China, Thailand, Taiwan, etc and the habit of using domestic tea brands of Vietnamese consumers will be a great challenge for TWG Tea when it wants to develop business in Vietnam. So, it can be seen that although TWG Tea’s products have more competitive advantages than other competitors in terms of quality and brandname, but with the difficulties and challenges mentioned above together with new business market, it is necessary to build business strategies when TWG wants to develop the TWG Tea chain stores in Vietnam in the coming time. For those reasons, the author decided to select the topic "Strategies for business development of TWG chain stores in Vietnam" as a master thesis. 1 2. Overview of the study Johnson & Scholes (2000) conducted a study on "Exploring Corporate Strategy: Test and Case". According to them, in an organization or an enterprise, "Strategy is the orientation and determination of an organization’s operation scope over a long term, where the organization must gain advantages through the combination of resources in a challenging environment to best meet the needs of the market and the needs of the agents involved". In particular, in the study, the authors introduced three broad strategies of competition including low cost, differentiation, and focus, which turned strategy positioninginto a structured activity. The research focused on evaluating strategies of competition without going into the details of strategies for developing business of a product. TOPICA Educational Organization (2012), in their lecture of "Overview of strategy development of enterprises", says that the processof building a general corporate strategy consists of 3 phases:Establishing (planning) strategies,deploying (implementing) strategies and evaluatingstrategies. (1) The stage of planningstrategies is understood as a process of establishing vision and mission;conducting investigations to identify opportunities, challenges, strengths and weaknesses of the enterprise,building long-term goals and selectingtacticalplans to achieve them. (2) The stage of implementing strategies is the stage of transforming strategy contents into strategy actions. Deploying strategies involves conducting necessary things to make the strategies done and achieve the goals of the organization. (3) The stage of evaluating strategies consists of three main activities: reconsidering factors which are the basis for the current strategies, measuring achievements and performing corrective actions. Frederick W. Gluck et al. (1980) in "Strategic Management for Competitive Advantage" compared and described the process of strategy 2 development for an organization. The authors called the first stage of development as elementary financial planning. At this stage, the primary concern was addressing financial constraints through rigorous operation monitoring, planning annual budget allocations, and paying attention to operational and financial functions, etc. The purpose of setting up the strategies was to mobilize all resources to build competitive advantages. The planning of strategies answers the four basic questions: (i) Where are enterprises/organizations? (ii) Where do theenterprises/organizations want to go in the future? (iii) How to get there? (iv) How to measure the progress? Le The Gioi (2012) carried out a study on "Introduction to strategy development and mission declaration." The study compared the strategies in military and economic fields. In military, strategies refer to the management skillsof exploiting forces to crush the enemy and create a global dominance system. The basic theoretical point of the strategies is that one party can crush a competitor - even stronger and more crowded - if they can lead the game and put their opponents in a situation which is favorable for their abilities. An organization's strategies are similar to those in militarybecause they are planned to achievethe agreement between the differentiating capacities and the external competitive environment in which the organization participates in. However, compared to military strategies, strategies in business are more complicated. Unlike military conflicts, competition in business does not always come up with a winning or losing result. The competition in the industry sometimes creates opportunities to improve their strengths and skills as competing seeds. The value of differentiating capacities that bring competitive advantagesto the organization can be reduced over time due to environmental changes. Huynh Thi Thien Chung (2009) conducted a study on "Building Decotex’s business strategies for curtains in Vietnamese market to 2015". In 3 the study, the author interviewed 200 customers at supermarkets in Ho Chi Minh City with the questionnaire and conducted discussions with directors, heads of departments and business managers to collect the necessary information to explore the external and internal factors of the enterprise. By using the SWOT matrix to develop feasible strategies and using the QSPM matrix to select the optimal strategies, Huynh Thi Thien Chung proposed solutions for deployingstrategies includingbuilding a table of business tasks, maintaining and developing business advantages,building a new value line for the blue ocean strategy. Le Thai Son (2010) carried out a study on "Building strategies forbusiness development of CaDaSa Joint Stock Company for Dalat ancient villa resort to 2015". The study analyzedthe needs fortaking vacation combining with conferences and the ability to meet the demand in Da Lat in general and atDa Lat villa ancient resort in particular. In addtition to assessing the business development potential of Dalat ancientvilla resort through strategies,the study proposed business development strategies for this resort to develop a new product for CADASA Joint Stock Company in the early stage of business and create the foundation for future development. However, since the study was conducted with the time from 2010 and earlier, the research results did not havea highly practical value. It can be seen that there have been many studies on strategies, strategy management, and strategy development in our countries as well as abroad. However, since TWG Tea is a new product in the market in general and in Vietnamese market in particular, no research has been conductedonbuilding strategies for business development of TWG chain stores. Therefore, based on the theoretical basis of the published research, the author conductedthe study “Strategies for business development of TWG chain stores in Vietnam. On the basis of inheritance, the thesis would continue to clarify the following issues: 4 Firstly, continue to study the theoretical basis so that it can be flexibly applied to the building of development strategy of TWG. Secondly, analyze the macro environment and industry environment in order to identify the opportunities and challenges for the development strategies of TWG chain stores in the coming time. Thirdly,analyze and evaluate the reality of TWG in all aspects: business, human resources, finance, facilities, organizational structure, etc. in order to point out strengths and weaknesses. Fourthly,combine opportunities and challenges with strengths and weaknesses to form strategies for business development of TWG chain stores. Fifthly,declare the mission, vision, and development objectives of TWG;propose to implement the strategies for business development TWG chain stores in Vietnam in the coming time. 3.Research objectives andtasks 3.1 Objectives The study aimed at building strategies for business development ofTWG Tea chain stores in order to help TWG increase its market share in Vietnam. 3.2 Tasks Analyzing external environmental factors including macro environment and industry environment to identify opportunities and challenges for the development of TWG tea chain stores in Vietnam. Finding out the strengths and weaknesses of TWG through theanalysis of internal environment. By analyzing the SWOT matrix,building strategies for business development of TWG chain stores in Vietnam. Usinginstruments and matrices to select the optimal strategies for TWG Tea. 5 Implementing the strategies to help TWG Tea chain stores increase its market share in Vietnamese market. 4. Objects and scope of the study 4.1 Objects of the study Objects of the study were factors from internal and external business environment which formed the basis for building the development strategies of TWG chain stores. 4.2 Scope of the study In terms of time: The data was collected since TWG opened its stores in Vietnam.The end of 2015 to present In terms of space: The study was conducted salon và boutique of TWG is Takashimaya, Ho Cho Minh City. 4. Methodology 5. Organization of the thesis 6 CHAPTER 1: RATIONALE OF BUSINESS STRATEGY OF ENTERPRISES 1.1 Rationale of strategy 1.1.1 Definition There are many definitions of strategy. The difference among those definitions is mainly due to the view of each author. In 1962, Chandler, one of the initiators and theorists of strategic management, defined that strategy is the identification of long-term objectives of the enterprises, the acceptance of a series of actions as well as the allocation of needed resources to achieve these objectives (According to Rudolf Grunig & Richard Kuhn, 2003). In 1996, M.E. Porter defined strategy as the creation of a unique and valuable position that includes different activities. The core of establishing a strategic position is to choose activities that are different from those of competitors (this difference may be different activities with competitors or similar activities but different implementing methods) Nguyen Huu Lam, Dinh Thai Hoang and Pham Xuan Lan (2007) defined strategy as established plans or actions taken to achieve organizational objectives. According to the authors, strategies are considered as plans for the future, includin planned strategies and the taken actions. However, whether those strategies are planned or implemented, they should aim at achievement of organizations’ objectives. Recently, Johnson and Schole have defined that strategy is the longterm direction and scope of an organization to gain advantages through its resources in a changing environment in order to meet the demands of the market and satisfy the expectations of the stakeholders (According to Truong Dinh Chien, 2011) 7 Thus, there are many different definitions of strategy. From above definitions, it is possible to summarize the characteristics of the strategy as follows: - Strategy is always oriented - Strategy always focuses on managers or head of the company to determine the most important issues of the company. - Strategy always builds up the business lines basing on company's traditional specialized business fields and strengths. 1.1.2 Role of strategy Manufacturers who want to approach consumers need to overcome a very big gap which is market. The market is rapidly changing, requiring enterprises to be more energetic to approach the market and make effective decisions. - Strategy is the key tool of the enterprises and is the driving force for the development of business plans of enterprises. Strategy plays a decisive role and controls the coordination between the enterprises’ business activities and the market, ensuring that the business activities of the enterprises can follow market orientation by considering customers’ demands and expectation as the most stable foundation for all business decisions. - Strategy outlines the main features in business activities of the enterprises. Basing on that, the enterprises shall carry out their production and business activities to meet demands of the market. 1.2 Building business development strategies of the enterprises 1.2.1 Definition Building business development strategies of enterprises is to use tools, matrix to establish and choose business strategy suitable to the business environment (internal and external environment) of the enterprises, from which the enterprises can promote the strengths, restrain the weaknesses and 8 make use of every opportunity to deal with the challenges and risks to develop business activities (Nguyen Van Binh, 2009). 1.2.2 Strategy building process 1.2.2.1 Identifying enterprises’ mission and objectives Identifying strategic tasks and objectives is the first step in the process of building business strategies of the enterprises. This activity is basis for developing business strategies. In order to establish the mission and specific objectives, management side of the enterprises can apply the 3C Principles (Company Analysis, Customer Research and Competitor Understanding) to establish the functions, duties and announce business policies and objectives during operation and transaction process of the company. The duties and missions of the enterprises must be developed and sketched into a series of specific objectives. Objectives are achievement or results that the enterprises want to achieve in the future. In other words, objectives can be results from expectations of the enterprises. 1.2.2.2 Analysis of external environment (1) Features of macro environment Macro environment includes the factors outside enterprises’ orientation and affecting operating environment and internal environment, creating opportunities and threats to the enterprises (Nguyen Khoa Khoi and Dong Thi Thanh Phuong, 2007). Legal and political environment - Politic Politic is the first factor that the investors and enterprises’ managers take care to forecast level of safety of the activities in the countries or areas where the enterprises are having trading or investment activities. The factors such as political policies, political stability or fluctuations in a country or region are initial signals that help the enterprises identify the opportunities or 9 threats to make investment, production decisions in the market area within national or international range. - Law: Creating a healthy or unhealthy business environment is entirely dependent on the legal and economic aspects of state management. The promulgation of a quality legal system is the first condition to ensure a fair business environment and force the enterprises to be honest and responsible in doing business. However, if the legal system is incomplete, it will have a considerable impact on the business environment, causing difficulties in the production and business activities of the enterprises. - Government: The government plays a very important role in regulating the economy through its policies of economy, finance, monetary and spending programs. In its relationships with the enterprises, the government both acts as a person who controls, promotes, sponsors, regulates, prohibits, restricts and an important customer of the enterprises (in the spending programs of the government). Finally, government acts as a supplier providing the enterprises with services such as macro information and other public services. Economic environment The economic environment is a very important factor that attracts the attention of all executives. The impact of economic environment factors is more direct and dynamic than other factors. The evolution of the economic environment always contains different opportunities and threats for the enterprises of different industries and has potential impacts on the strategies of the enterprises. There are many economic environment factors but the following factors have a great impact on business activities of the enterprises: - Growth rate of the economy - Interest rates and trends in interest rates of the economy 10 - Monetary policy and exchange rate - Inflationary - Tax system and tax rates Socio-cultural environment Socio-cultural environment includes norms and values which are accepted and respected by a particular society or culture. The change of sociocultural factors is a partly consequence of the long-term impact of other macro factors. Therefore, socio-cultural factors often occur more slowly than other factors. Impact of socio-cultural factors is often more long-term and subtle than others. Even, sometimes it is difficult to identify it. The executives should pay attention to this trait of socio-cultural factors. The dimensions establishing the socio-cultural environment have strong influences on business activities such as ethical, aesthetic, lifestyle and occupational attitudes; traditional customs; Social concerns and priorities; Level of awareness and general education of the society ... In addition, the population, also known as the demographic environment, is also a very important factor influencing other factors of the macro environment, especially social and economic factors. Changes in the population environment will directly affect the change of the socio-economic environment and affect the business strategy of the enterprises. The demographic information provides important data for the executives in building product planning, market strategies as well as marketing, distribution and advertising strategies. Areas of concern for the population include: Total population of the society, population growth rate; structure and trend of population changes in age, sex, occupation, and income distribution; life expectancy and natural birth rate; trends in population movement among the regions, etc… Natural environment 11