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Contents Introduction................................................. 2 Main Content................................................. 3 1. Define the context of GARMENT 10 business strategy: ..................3 1.1. Vision statement’s theory and its application in GARMENT 10 Corporation ...................................3 1.2. Mission statement’s theory and its application in GARMENT 10 ...............................................4 1.3. Value’s theory and its application in GARMENT 10.....5 1.4. Business strategy of GARMENT 10......................6 2. Explain the significance of stakeholder analysis......................7 2.1. Definition of stake holder...........................7 2.2. Influence of stakeholder.............................7 3. External environment and organizational audit of GARMENT 10.........12 3.1. External environment................................12 3.2. Organizational audit................................20 4. Apply strategic positioning technique to the analysis of GARMENT 10.....27 Recommendation.............................................. 30 Conclusion.................................................. 31 References.................................................. 32 1

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ContentsIntroduction .............................................................................................................................. 2 Main Content............................................................................................................................ 3 1. Define the context of GARMENT 10 business strategy: ................................................. 3 1.1. 1.2. 1.3. 1.4. Vision statements theory and its application in GARMENT 10 Corporation ....... 3 Mission statements theory and its application in GARMENT 10 ......................... 4 Values theory and its application in GARMENT 10 ............................................. 5 Business strategy of GARMENT 10 ....................................................................... 6

2. Explain the significance of stakeholder analysis ............................................................ 7 2.1. 2.2. Definition of stake holder ........................................................................................ 7 Influence of stakeholder .......................................................................................... 7

3. External environment and organizational audit of GARMENT 10 .............................. 12 3.1. 3.2. External environment ............................................................................................ 12 Organizational audit .............................................................................................. 20

4. Apply strategic positioning technique to the analysis of GARMENT 10 ...................... 27 Recommendation.................................................................................................................... 30 Conclusion .............................................................................................................................. 31 References ............................................................................................................................... 32


IntroductionKINH DO was established in 1993 and has gone through 17 years of formation and development. Up to now, we, KINH DO has become a system of corporations in the field of foodstuff including: cake, candy, beverage, ice-cream, and products from milk.

From the size of only 70 staffs at the initial establishment, up to now, KINH DO has total staff of over 7,741 persons. Total charter capital of KINH DO Corporation is 3,483.1 billion dong. Total revenue reaches 3,471.5 billion dong, in which the revenue from foodstuff accounts for 99.2%, total profit reaches 756.1 billion dong. Products under the KINH DO trademark are selling in all provinces through a diversified distribution system nationwide including 524 distributors, 31 KINH DO Bakery shops and 200,000 retail outlets as well as franchised distribution systems with a growth rate of 30%/year. The products of KINH DO have been sold to 35 countries; particularly KINH DO has conquered the most difficult customers such as Japan, USA, France, Germany and Singapore, etc.


Content1. Define the context of KINH DO business strategy:A business strategy typically is a document that clearly articulates the direction a business will pursue and the steps it will take to achieve its goals. In a standard business plan, the business strategy results from goals established to support the mission and vision statement of the business.

Value Mission statement Vision statement

1.1. Vision statements theory and its application in KINH DO Corporation 1.1.1. Vision statements theory The vision statement is a form of values statement which is simply an acknowledgment of the inherent worth of the company and the products it produces. In some ways, a vision statement also is intended to be no more than a couple of sentences that clearly outline a specific goal of the company, while not providing the details of how that goal will be reached. (www.wisegeek.com) 1.1.2. Vision statement of KINH DO According to official website of KINH DO, in terms of KINH DO Foodstuff, its vision is specified very simply as: Flavor your life (Source: www.kinhdo.vn)


In the first place, this vision statement sounds like very short and compendious. However, as the requirements of a vision statement, in my opinion, this statement is too equivocal and general. In specific, it has not shown the readers the answer for the question what we want to become. There is no clear position or achievement that we can find out through this vision statement. Moreover, it does not have any figure or time-bound which means it does not transfer enough information as well as the level of working motivation for employees. In overall, with the long operation history and the talents of the founding chairman, Mr. Tran Kim Thanh, KINH DO should have a clearer and bigger vision in the future. Therefore, from the information on KINH DOs official website, as the nearly first company which operating in the field Foodstuff in Vietnam, it is easy to see why KINH DO has a really big vision as quickly enlarge the foodstuff division to become a leading foodstuff group in Vietnam as well as to become one of the leading foodstuff group in the Southeast-Asian region. 1.2. Mission statements theory and its application in KINH DO 1.2.1. Mission statements theory A mission statement is a formal, short, written statement of the purpose of a company or organization. The mission statement will guide the actions of the organization, spell out its overall goal, provide a sense of direction, and guide decision-making. It also provides the framework or context within which the company's strategies are formulated. (www.wisegeek.com) 1.2.2. Mission statement of KINH DO Due to the variety in terms of the number of field which KINH DO has taken part in, there are also specific missions for each field which can help KINH DO to manage organization better and achieve these missions well. However, Foodstuff could be always seen as the first and major field which KINH DO focuses on. Therefore, in terms of Foodstuff, the mission of KINH DO is presented as:


Consumer Mission is to identify and produce affordable staple and packaged foods, snacks, bakery products, beverages and juices, confectionaries and condiments, instant foods, processed meats and health supplements which people want.

Shareholder Mission is to not only maximize investment returns over the long-term, but also to manage risk in order to give surety and confidence those investments can achieve our shareholder's goals.

Partner Mission is to create sustainable value for supply chain partners through creating innovative food products which address consumer demand trends and satisfy or exceed consumer expectations, and provide equitable returns for all.

Staff Mission is to nurture and develop the skills and abilities of our people to meet the professional demands of their work and satisfy their personal needs. In this way we create dynamic, creative, innovative and dependable members of the KINH DO family.

Community Mission is to contribute to the communities in which we operate through sponsorship programs and targeted community development and support activities. (www.kinhdo.vn) Unlike some other companies, KINH DO in general and KINH DO Foodstuff in

particular have specific mission for each position both inside and outside company which are: consumer, shareholder, partner, staff and community. By dividing missions clearly like this, KINH DO can somehow find the best way to manage and achieve them as well as satisfy each kind of stakeholder. 1.3. Values theory and its application in KINH DO 1.3.1. Business values theory "Business value" is a broad term that is used to identify the many different forms or types of value that go into the overall stability of a business over the years. While economic value is accounted for, business value also includes components such as the value of longtime customers to the operation, the talents of employees, the efficiency of management, and even the value of channel partners in the overall structure of the company. (www.wisegeek.com)


1.3.2. Values of KINH DO KINH DO Corporation employs synergies to integrate the creation delivery of Food products and services which make Living Fine and deliver the greatest returns and rewards. Therefore, its values are really obvious to achieve this. Creation and Innovation Dynamism Pioneering and Vanguardism Quality Trust Vision (www.kinhdo.vn) With the overall mission that using state-of-the-art technologies, research and developments, quality raw materials from environmentally sustainable sources and the creativity and innovation of our people and selected external resources to produce and deliver an extensive range of affordable staple and packaged foods, snacks, bakery products, beverages and juices, confectionaries and condiments, instant foods, processed meats and health supplements; KINH DO has set up the list of value which clearly present the aim of bringing about the best convenience as well as products quality for customers. 1.4. Business strategy of KINH DO In a severe competitive environment as well as the demand for consuming food in general and confectionery in particular nowadays, according to the internal and external factors, KINH DO has chosen the general strategy from 2006 to 2011 is hold fast and increase the growth rate annually about 15% and maintain continuously the profitability with ROE ratio from 25% and above by extending the market (locally and globally), take full advantage of production ability, invest in human resources and promote the business corporation with foreign partners. However, in specific, when talking about the most effective strategy which KINH DO has applied recently, it should be mentioned as M&A. The big and first merger between three companies KDC NKD KIDO. This one could be considered as the spotlight of M&A of Vietnam in 2010. In December of 2010, KDC has released more shares to take stock swap 6

NKD and KIDO of shareholders, thereby, KDC owns 100% shares of these companies, and NKD and KIDO will transform into the one-member limited company under the KDC after the swap. (www.atpvietnam.com)


Explain the significance of stakeholder analysis2.1. Definition of stake holder As presented in www.worldbank.org, a stakeholder is any entity with a declared or

conceivable interest or stake in a policy concern. The range of stakeholders relevant to consider for analysis varies according to the complexity of the reform area targeted and the type of reform proposed and, where the stakeholders are not organized, the incentive to include them. Stakeholders can be of any form, size and capacity. They can be individuals, organizations, or unorganized groups. According to BPP Professional Education highlighted, (2004) there are three main kinds of stakeholders: Internal stake holders of an organization: include managers and employers Connected stakeholders: embrace shareholders, customers, suppliers, financiers, and competitors External stakeholders group: the central government, local authorities, pressure group, and community representatives 2.2. Influence of stakeholder The level of effects of stakeholders on an organization could be separate into four parts as the mapping below Low interest/aspirations Low power/influence High power/influence High interest/aspirations

Minimal effort

Keep informed

Keep satisfied

Key players

Figure 01: Stakeholder mapping 1 7

Key players: strategy must be acceptable to them, at least Stakeholders in keep satisfied segment must be treated with care. While often passive, they are capable of being key players Stakeholders in keep informed segment do not have great ability to influence strategy, but their views can be important in influencing more power stakeholders, perhaps by lobbying

Minimal effort is expended on this segment. Stakeholder Mapping Types Stakeholders Key Players Internal Managers Employees Shareholders X X X X X X X X X Keep Satisfied Keep informed Minimal effort


Connected Stakeholders

Customers Suppliers Competitors Central Government

External Stakeholders

Local Authorities Community Representatives

Figure 02: Stakeholder mapping 2 Internal Stakeholders Managers

In company, managers are the one who adopt good verbal communication skills with their team members, so that the goals and targets can be discussed in a useful manner. Besides, managers also have complete understanding of the targets fixed by the organization in order to lead the company accordingly to follow them. In addition, managers exist to motivate the workers, so that they can easily adapt to the prevailing working environment. Furthermore, without the influential management from managers, the growth of the 8

organization as well as the employees is hampered and this can bring the work to a standstill. Their duty is to make arrangement for the growth of the employees through training and constant evaluation process. In terms of KINH DO, they often provide proper benefits, both material and spiritual needs through training and developing opportunities for managers. Thus, it can be seen that management influence is of great importance to keep the organizations working style on the right track. Hence, the role of an influential manager is considered important for a business organization.

Figure 03: KINH DOs managers




If the managers are the leaders, who have a general observation, then employees are the ones who directly do the specific jobs to produce products. Therefore, the ability and the attitude towards jobs of employees strongly influence the operating process as well as the products quality and companys prestige. Therefore, with the vision quickly enlarge the foodstuff division to become a leading foodstuff group in Vietnam as well as to become one of the leading foodstuff groups in the Southeast-Asian region, KINH DO needs to take the satisfaction of its 7,741 employees into consideration. Connected Stakeholders Suppliers

Without suppliers, it would be very difficult for a company to start up. Therefore, the influence of suppliers is obvious. According to BPP Professional Education, 2004; suppliers are the ones who will provide business goods, services or financial capital and if an organization wishes to follow a strategy that improves the working capital management by paying suppliers late, existing suppliers may decide to stop supplying the organization leading to the increased cost of finding new suppliers. In terms of KINH DO, from the start up time until now, they must have taken advantages from suppliers much for the success now. They might be provided raw material, financial capital, technology, etc. However, the suppliers have no rights to participate in the operating or any decision making process of company. Customers

According to the contemporary marketing, satisfying customers is always the main objectives of every company to exist. No customer, no business. Therefore, customers play a very important role in business operation. They could be seen as the output for the products of company in the operating process. Being successful or failing in satisfying customers will result directly to the destiny of company: success or failure. Hence, KINH DO needs to pay attention strongly to satisfy the needs and wants of this kind of stakeholder. And in fact, in the business strategies, KINH DO somehow pays attention to the position of company which is represented by the satisfaction of customer and always has plans to improve it.




As a Corporation which is listed, the role of shareholders in the operation of KINH DO is truly important. Briefly, shareholders can be seen as the ones who give company the essential source of capital for all operating activities. One of the most important shareholder rights is being compensated when a company makes a profit. If a person purchases stock in a company, it is not the companys option to share or to refuse that person a portion of the earnings. A shareholder is legally entitled to a certain portion. The amount that he is entitled to, however, will vary based upon how much stock he owns and the type of shareholder that he is. In case of company delays the time of pay off the dividends, pay less than actual or make loss, it is very easy that shareholders feel unsatisfied and leave. Therefore, the values and rights of shareholders must be considered carefully; especially with big Corporation like KINH DO, satisfying shareholders is the same as maintaining the strength of firms. External Stakeholders Central government

Beside the rules and procedures inside the company that internal stakeholders have to follow, organization must know and understand clearly the legal restriction provided by Central government. Government always encourage and create good conditions for business to operate, however, in return, each company must follow the law given from it to ensure that there is nothing which harms to country as well as citizens.



External environment and organizational audit of KINH DO3.1. External environment 3.1.1.PESTEL model macro environment Economic

Year 2007 2008 2009 2010

GDP (billion USD) 71.4 89.83 92.84 104.6

GDP per capita (USD) 823 1,024 1,040 1,165Figure 04: Vietnamese GDP

Growth rate 8.5% 6.2% 5.3% 6.78%(www.gso.gov.vn)

The world economy in 2010 despite recovering from the global financial crisis and there are positive changes, but generally not really stable and also potentially adverse factors affecting our economy. The table above presents a relatively high growth rate to compare with 2008 of 6.31%, higher than the level of 2009 with 5.32% and exceeding targets of 6.5%. The higher GDP is, the higher income that consumers have. In specific, the GDP per capita of Vietnamese in 2010 is 1,165 USD which is much higher than that on 2009. In particular, confectionery is potential export items. Confectionery sector in Vietnam in recent years have developed by remarkable steps due to a stable consuming demand domestic and foreign. The export turnover of Vietnam's confectionery rose dramatically, accounting for 0.5% of total merchandise exports of the country in 2010. Confectionery products of Vietnam are now available in many countries such as Cambodia, China, United States, Japan, UAE, Hong Kong, Taiwan and so on; in which Cambodia is a stable market, has taken the lead in turnover Export of Vietnamese confectionery. China is just the new market but brings about the highest growth rates. Socio-cultural Life is becoming fast and eventful, KINH DO confectionery has many flavors, and the service is fast and convenient and affordable. Therefore, its product tends to be very 12

popular among citizen. Vietnam is developing and integrating, thus the people do not just feed and clothe themselves properly but even demand for delicious food and good clothes. KINH DO is one of very few companies which can provide variously and uniquely many kinds of confectionery products. KINH DOs Moon cake has the flavor which is innovate year by year and cover from popular to luxury style. For example, KINH DO provides a kind of Pizza which is small with the low price that about from 10,000 to 12,000 VND. Besides, the movement of encouraging Vietnamese people to use Vietnamese goods has been launched and expanded also leads to the development of KINH DOs confectionery. Technology This is one of the factors that are very active, containing many opportunities and threats to businesses. The pressures and threats from technology can be: The introduction of new technologies to enhance the appearance and competitive advantages of alternative products, threatening the traditional products of existing industries. The explosion of new technologies makes existing technology obsolete and creates pressure for enterprises to technological innovation to enhance competitiveness. The born of new technology as creating favorable conditions for the penetration of new and increasing pressures threaten the existing businesses in the industry. The explosion of new technology makes the technology life cycle tends to be short, this feature increases the pressure to shorten the depreciation period than before. From the beginning, the KINH DOs steering committee is clearly aware of the importance of technology if company wants to have a long-term operation, dominate the domestic market and compete with other Foodstuff company in the world. Therefore, KINH DO always catches up with the most modern technologies in the world. Early on, KINH DO was in the right direction with the investment in technology production. In 1996, KINH DO imported the Danish Cookies lines which is worth $ 5 million - Cookies industry was born. Since then, KINH DO succeeded consecutively in terms of bread industry, industrial cake, chocolate, hard candy, soft candy. The most prominent


feature was in 2000, Cracker lines were imported from Europe and the birth of AFC (the name of a product line of KINH DO) has set up brand names KINH DO. Thus, until now, food sales contribute over 90% of total KINH DO Group sales annually. Environmental In recent decades, humanity had to face with environmental pollution is increasing, the depletion and scarcity of resources and energy, the imbalance of ecological environment. In the context of so, the business strategy of KINH DO must meet the following requirements: Prioritize the development of business activities or services in order to exploit the conditions and advantages of the natural environment on the basis of ensuring the maintenance, regeneration and contribute to enhancing the natural conditions if possible. There was a sense of saving and efficient use of natural resources, particularly the needs to make administrators aware of moving away from the use of resources cannot be recycled into using artificial materials. Promote research and development of technology and products help protect the environment, ecology, and minimize the effects of environmental pollution caused by the operation of the business causes. Confectionery market is seasonal. Therefore, consumption increased rapidly in September after the time of the Lunar New Year, in which staples taste of Vietnam as traditional cakes, hard candy, soft, luxury biscuits, assorted jams, nuts and so on being consumed strongly. Legal Since the tariff reductions for confectionery has decreased to 20% in 2003, the domestic firms has been under the competitive pressure from imports to continual innovation in technology. This opens up more opportunities than challenges because lowering trade barriers will create more favourable to the product of Vietnamese enterprise to go into the ASEAN countries. 14

3.1.2.Five Forces analysis

Figure 05: Michael E. Porters five forces Rivalry


In terms of rivalry, KINH DO truly has a lot of competitors. For example: Bibica, Vinabico, or Haiha kotobuki. o Pricing pressure In a market which has many rivalries like Vietnam, KINH DO always has to face the pressure of reducing price to increase the competitive strength of company. By the way, the decrease of products price also leads to many other promotional activities. Therefore, economies of scale really deserves to concern about. o Products quality Due to the big number of companies which are participating in Vietnamese market, the products suppliers are various. Therefore, beside pricing pressure, the products quality is even much more important which could be seen as the determined factor for KINH DO to maintain a stable development. Furthermore, the development of economy brings about the increase in income and demand of customer. In specific, now they will not accept to pay amount of money for a low quality product; indeed, they are willing to even give out a bigger amount of money just for good quality products. Therefore, quality is always the criterion which is focused the most in KINH DO.


o Changing of market scale Vietnam now is having a potential confectionery industry. In 2008, the output is estimated as 476,000 thousand tons with the retail turnover accounted for about 674 million USD. In 2012, the expectation is about 706,000 thousand tons with 1,446 million USD in terms of sales. The current market share in Vietnam could be considered as a competitive advantage for KINH DO. As mentioned so far, KINH DO now is accounting for the biggest market share in Vietnamese market in terms of confectionery industry. However, KINH DO is still suffering a really strong pressure from rivalries, which always use the most modern technologies and be ready to use trickery to topple KINH DO. Power of suppliers In every industry, suppliers always play a very important role. Especially in terms of confectionery industry like KINH DO, suppliers could be considered as the determined factor. Therefore, KINH DO needs to maintain a strong and close relationship with its suppliers to create a stable competitive structure. The suppliers can put pressure to business by many ways. o Pressure from quality of raw material Suppliers can affirm their power just by reducing the quality of raw materials. The objects that KINH DO needs to concern about are: raw material or equipment suppliers, banks or credit agency, human resources. o Price KINH DO uses both domestic and foreign raw materials. However, normally, KINH DO buys by big orders; therefore, its bargaining power is very high. o Deliverys rate of progress KINH DO Company signs the contracts with suppliers very strictly; therefore, the deliverys rate of progress is always ensured. Besides, company usually have good plan of using raw material which lead easily to gain initiative of ensuring enough material for manufacture.


o Number of suppliers The whole suppliers of KINH DO could be divided into some specific group of goods. Flour: suppliers are Binh Dong, Dai Phong Sugar: Bien Hoa sugar factory, Juna, Bonborn. Dairy butter: mainly imported from foreign countries through distributors or agency in Vietnam Aromatic species and adjuvant: also imported from foreign countries: Mane, IFF, Griffit, and Cornell Bros As can be seen from the list of suppliers above, it is easy to see how KINH DO pay attention to the quality of its products by choosing raw material from the sources which were selected carefully. With the corporate vision Living Fine and the food division flavor your life, KINH DOs mission is to supply of safe, delicious, nutritious, convenient and unique foods to consumers. Basing on that mission, we always consider our suppliers as the very important partners, who can help KINH DO to achieve our mission. With the position of a leading foodstuff Corporation in Vietnam, KINH DO always cooperate with both domestic and abroad prestigious suppliers in order to exploit the good quality and certified sources of materials. KINH DO always highly appreciates suppliers, who have responsibility, creatively renovation, and continuously improve the material quality and maintain competitive price in the market. Such effort will create and maintain the win-win and long-term cooperation. Power of customer Normally, businesses will be affected by the scale product demand or current services and potential benefits desired, tastes, the solvency of the customer. KINH DO interested in this information to orient its operation.


o Pricing pressure Even though Vietnamese economy is increasing and brings about the higher income of customer and be willing to pay more for high quality products, however, in case of comparing between two products which have the same quality, customer still prefer the one which has lower price. Therefore, besides concerning about quality of products, KINH DO also needs to find ways to lower its products price; for example, by trying to lower the cost. o Pressure of products quality Vietnam is a young market and be eager to absorb the new ideas from Western. However, Vietnamese consumers have not had the enough bargaining power to force big companies to change themselves and improve. Besides, Vietnamese also have a very vague impression about big firms around them. According to a research of Nielsen, about 60% Vietnamese consumers believe in the sweet advertisements, just after Philippines and Brazil. Confectionery has existed together with Vietnamese culture for a very long time, however, understanding and catching up with the updated confectionery products are still the weak point of Vietnamese. Therefore, somehow Vietnamese customers still put a not so strong pressure on big companies and KINH DO is not an exception. Threats from substitute products The goods can be substituted for each other and lead to competition in the market. As the price of primary products increased, the trend will encourage the use of alternative products and vice versa. Because the highest price is controlled when substitutes appear, therefore, it will limit the potential profit of the industry. Thus, KINH DO must continually research and test potential alternative products. In fact, most substitute products are the result of the tech-boom. Therefore, KINH DO also needs to consider resources for development and application of new technology into business strategy. Confectionery product is not the one of daily consumption, but demands for these products are always changing because of consumer demand. The product requirements may vary according to several trends such as product trends for healthy, convenience... Thus,


substitutes in confectionery industry which KINH DO is facing are products made with different materials that can meet those needs of consumers. Threats of new entrants o Rivalry who has not been in Vietnamese market but will appear in the future and trade the same products as KINH DO Beside potential new entrants who are preparing to break into confectionery industry, KINH DO will face very strong competitors who have long seniority in terms of trading confectionery when Vietnam enter AFTA, WTO such as Kellog, Cookies company from Denmark, Malaysia. o Rivalry who has been in Vietnamese market and traded another products but will trade the same products as KINH DO New competitors entering the business sector could reduce the profitability of their businesses by putting into operation new production capacities, with the desire to gain market share and the necessary resources. The question for KINH DO is to maintain a lawful fence to prevent intrusion from outside. These barriers include economic advantages of scale, product differentiation, access to distribution channels, capital requirements, switching costs. With demand for food increasing, plus the investment incentives of the state and high efficiency in the confectionery business, a growing number of investors are involve in this industry. In terms of food sector, important barriers for new competitors entering the industry are financial resources to the possibility of capital. Since this is a very important factor in the investment product research, technology investments, to promote products to consumers. For KINH DO, financial resources have helped company to make a difference in product diversification, creation of product price and quality of competitiveness through appropriate investment.


3.2. Organizational audit 3.2.1.Core competences of KINH DO Business development: in years past, KINH DO always posted higher annual sales growth than the average rate of the industry. The corporations leading position in the sweets and cake sector is clear evidence. KINH DO always attaches importance to increasing the number of retail points, distributors and salespersons. Diverse and wide-reaching distribution channels: KINH DO pays much attention to not only traditional channels but also to modern and public channels including supermarkets, bakeries, schools and recreational areas. So far, the corporations products are on sale at stores and shops in both urban and rural areas. Professional staff: KINH DO always places human resources at the center of its business plans and the company has invested heavily in providing employees with know-how and skills by organizing seminars and courses for them. The KINH DO training center has been opened to facilitate this purpose as well as to help staff get a better understanding of their jobs and what the others are doing with an aim to enhance coordination among employees and their work efficiency. Management system: KINH DO has been operating successfully and efficiently over the past ten years due to a good system of management. The company has spent much on information technology ERP of SAP as a cost-effective tool to aid in better management, Enterprise Resource Planning (ERP) and Point of Sale (POS) software to support distribution and the planning and market forecast department to help adjust business plans in accordance with market changes. Market share: In terms of total sales, KINH DO accounts for the largest market share in the domestic market with 20% leave behind Haiha kotobuki (7%) and Bibica (3%), which are the biggest competitors of KINH DO in Vietnam. Other small confectionery companies have the total market share of about 30-40%. In overall, with the steady development year by year, KINH DO truly showed the customer a strong and trustful brand name, especially in terms of Foodstuff. Besides, in common with the development of company, the distribution channel is also extended widely


which can bring the brand name of KINH DO throughout the country and raise the awareness among citizen as well. Moreover, with the strictness in terms of recruitment, KINH DO has very active and creative staffs. The leadership style in KINH DO (could be guessed as democratic) also help employees have chances to coordinate and work well with each other. 3.2.2.Value chain Also known as value chain analysis, value chain is a strategy that involves the creation of a systematic set of steps or activities that incrementally add value to the goods or services produced.

Figure 06: Michael Porters value chain VALUE CHAIN logistics


As mentioned so far, suppliers of KINH DO is various and specific for each group of raw material. With the position as the leading confectionery company in Vietnamese market, KINH DO always asks for the best raw materials qualities which mostly are imported from foreign countries. Human resources management In 2009, KINH DO continued to undergo changes in quality. Besides continuously retaining and developing staff via an advanced training mechanism, internal transfers and promotions, KINH DO also paid attention to drawing new labour from outside that possessed the competencies and attributes suiting KINH DO culture.


Infrastructure Owing to a vast and modern network of factories, KINH DO can host and store large

amounts of raw materials to ensure the best quality and do not delay delivery time. Otherwise, KINH DO also carried out a lot of training program for worker which aimed at raising the employees' awareness of work safety, food hygiene and ISO. Especially, in 2009, KTC even organized 3 management training program for over 100 key staffs in order to improve the management capacity of the whole system. From these strengths, the company will easily produce big orders of both domestic and overseas market; ensure both quality and quantity of customer demand. (www.kinhdo.vn) This is the process of transforming inputs into finished products. In this process, KINH DO needs to pay attention more to human resources and modern technology to ensure the quality of products. Human resources management In 2009, KINH DO has continued to invest in training and staff development. KINH DO training centre has organized training for the 3,685 arrivals, increase to 17% compared with 2008. The training programs of KINH DO training center focuses on raising awareness of officials and employees on occupational, hygiene and food safety, thereby raising the efficiency of output quality. (www.kinhdo.vn) Infrastructure KINH DO has factory area about 350.000m2. In particular, the factory in Hiep Binh Phuoc Ward, Thu Duc District, Ho Chi Minh City has an area of 14.000m . In order to serve markets in Hanoi and Northern provinces, a factory was built in Ban Yen Nhan town of Hung Yen with 28.000m . Besides, in 2009, KINH DO moved its head office to a new building at 141 Nguyen Du Street, District 1. This new working environment is expected to promote a more open and dynamic culture for the whole company. (www.kinhdo.vn)


Technology In terms of technology, KINH DO is always up-to-date with the most modern

technology in the world. In specific, KINH DO has invested 10 million USD for modern technologies for operating from Western countries like Italy, Denmark and USA. logistics This is the warehousing and distribution of finished goods. Human resources management KINH DO training help people understand not only their jobs but also to understand other people's work to increase coordination and improve efficiency at work: Receiving orders from the bakery system. Balance inventory, capacity planning and production. Balanced materials inventory, order planning. Inventory control of raw materials. Updates on the use. and sales This is the identification of customer needs and the generation of sales. Marketing activities of KINH DO mainly focus on lunar New Year with slogan: KINH DO is where Tet is; for instance: advertisement on TV or magazines. In 2010, company maintained the growth rate which is quite impressive with 26%, net revenue reached 1,934 billion, and profit after tax reached 674 billion. Distribution channel of KINH DO is considered as one of the most powerful systems throughout the country, can adapt quickly to market fluctuations. Therefore, despite the prolonged economic crisis in the two years 2008 - 2009 that all commercial activities, consumer stagnation, decline, KINH DO still maintained its market, revenue growth of 20%. This achievement is due to many years his company has been created for the core competitive advantage to create the foundation for sustainable development in the company's supply chain.


Infrastructure Through 17 years of development, the products branded KINH DO were present in

the province-wide through the distribution system varied across the country including more than 600 distributors, 31 KINH DO Bakery and 200,000 retail outlets as well as distribution systems franchise. Furthermore, with the desire to make KINH DO the second home where everyone strives to achieve a common objective, KINH DO has, for the past several years, put its effort to build an ideal working environment, promote creativity and encourage innovations to improve performance. (www.kinhdo.vn) Technology KINH DO also applies information technology in terms of selling and marketing such as: shopping online or e-marketing. sales services The support of customers after the products and services are sold to them. KINH DO applies CRM customer relationship management to manage the service activities well. Human resources KINH DO now has about 1,000 retailers nationwide working in store channels of KINH DO to support customers in both buying process and after sales. Furthermore, KINH DO also assigns many staffs for online supporting and this service working 24 hours per day. 3.2.3.Swot matrix


Opportunity (O)

Threat (T)

1. Vietnamese economy has a 1. The market penetration stable development and of foreign competitors citizens income is increasing when Vietnam joins in gradually 2.SWOT matrix

AFTA, WTO confectionery 2. The increase of


market is still big

investment in operation of confectionery

3. Demands for high-grade domestic nutritional food is increasing businesses The

4. Export market is expanding 3.

movements resources

of into

when Vietnam join in AFTA, human WTO

foreign businesses when more and more companies


join in Vietnamese market


Strength (S)

Strategy SO: Use strengths Strategy ST: Use the

1. Strong brand, have to make full use of external strengths to limit and the trust of consumers 2. Have a opportunities avoid the threats from

wide 1- Use the strengths: S1, S2, external environment S3, S5, S7, and S8 to take 1- Use the strengths S3,

distribution channel 3. Have

modern advantage of O1, O2, O3, and S4 and S5 to overcome T1 and O4. (Market development) and T2. (Differentiation


manufacturing system 4. Research

2 - Use the strengths S3, S4 strategy)

and and S5 to take advantage of

development activities O1, O2, O3 and O4. (Products are strongly 5. Strong conducting development) 3 - Use the strengths S5 to capital take advantage of O1, O2. (technology development 4 Use the strengths S6 to take advantage of O4. and


6. Strong management functional strategy) team 7. Suitable price

8. Ensured products (management quality


human resources development functional strategy)

Weakness (W)

Strategy WO: Overcome the Strategy WT: Minimize to catch and the the weakness to avoid take the threats

1. Have not exploited weakness

completely capacity of opportunities machinery

advantage of opportunities 1- Minimize the W3 to avoid T3. (Human

2. Management of raw to limit the weakness

material inventory has 1- Limit the weakness W1 to resources development not been effective 3. take advantage of O1, O2 and functional)

Informal O4. (Manufacturing capacity functional

management style still development exists strategy)



Apply strategic positioning technique to the analysis of KINH DOAnsoff (1987) drew up a growth vector matrix, describing a combination of a

firms activities in current and new markets, with existing and new products. It is a material that helps businesses decides their product and market growth strategy.

Figure 07: Ansoffs matrix From the leading general strategy above, together with the strength, weakness and opportunities, in my opinion, KINH DO has some specific strategies which could mention about: Market penetration

Confectionery market in Vietnam is now considered possibly to achieve revenue growth of up to 20% on average per year. Confectionery consumption per capita is still relatively lower than some neighboring countries in the region. High level of population and low average consumption is the opportunity for companies to continue development. Therefore, KINH DO has launched efforts to provide the product with variety, high quality, and low price, along with strong and effective advertising to increase the market share of products. Specifically, KINH DO increased promoters in many forms: exhibition fairs, newspaper ads, and the ad's delivery truck distributor. Selling activity has been boosted: increased product coverage across the country, expand distribution channels in the provinces and direct delivery to stores and warehouses agent delivery assembly. Competitive strategy of 27

KINH DO is focusing on price and quality with the main items: Cakes, Crackers, Cinnamon bread - Wafer, Cookies. Besides boosting the advertising activities and promotional campaigns, KINH DO also needs to focus on expanding the distribution agent, increasing the number of salespeople. Currently, the KDC has wide distribution network across the country with approximately 200 distributors and 40 KINH DO Bakery stores, more than 75,000 retail outlets and over 1,000 sales people across the country Market development

This strategy refers to finding the market development by participating new market with current or new products. Some features that need to be concerned about in this strategy: + In terms of the domestic market, although KINH DO holds about 45% market share which is a quite high level in context that many confectioneries are operating, KINH DO still leave the remote areas open. This market is really potential due to the increase of citizens income there. Besides, KINH DO still use traditional distribution channel which is distributors. Therefore, KINH DO should re-scheme the distribution channel to cover all the remote areas in Vietnam. Furthermore, more distribution centre also should be built in Central region of Vietnam to resolve the problem of customer-serving space and time because KINH DOs products now only comes from Hanoi and Hochiminh city. Last but not least, KINH DO also should increase the number of distribution channel to some modern ones like supermarket, convenient store or internet. + When it comes to global market, the major ones now are US and Japan. These are very strict market but also very potential. At this stage, KINH DO is trying to maintain market share in these market by ensuring the products quality. Moreover, KINH DO always participates in any international fair to advertise their image and products. Product development

In the trend of modernization and industrialization, everything is changing fast and the demand of consuming is not an exception. Besides, in the development process of any business, products list is not fixed but always changes as well to adjust to the changes of environment or business condition. 28

In terms of KINH DO, product development strategy takes form based on the modern technology, strong research and development activities and the innate ability to sense smells of business owner, strong capital resource combining with opportunities from market. To apply this strategy, KINH DO must follow some steps. Firstly, some surveys should be conducted to identify the trend of food consuming among customers. Then figure out the market segments to find out the opportunities for new products. The next step is collecting the feedback from customer to take them into account to develop products. Last but not least, participating in trading exhibition is an indispensible step to explore the products of competitors. In summary, reasonable growth strategies could help KINH DO expand market size, achieve business objectives and build a strong brand. Owing to those strategies, the brand name KINH DO can be known as good product quality and professional promotional strategies. This will be a solid base for KINH DO to continue to deploy effective business operations in the coming years, thereby, maintain and confirm the leading position in its industry.


RecommendationAfter analyzing the business strategys context, stakeholders influences, external, internal environment factors and indicating strategy from strategic positioning technique application; there are some suggestions that I want to advice KINH DO for further development afterwards. Being determined to continue with the goal of becoming a leading food group in Vietnam. Learning experience in terms of business operation of large food corporation in the world such as Nestle, etc. Invite the industry's leading experts on research, product development, management according to the trend of globalization. Training human resources and better treatment policy is always required to be there. Applying the modern business management software which is consistent with the organizational structure as KINH DO. Continuing to use the mass media to keep the support of all its customers. Searching for suppliers of raw material inputs is abundant and rich. Carrier acquisition or build its own providers to contribute to reducing dependence on price and quality of materials.


ConclusionFacing with challenge and competition about human, capital and raw material resources which are increasing rapidly; in order to meet the requirements in integrated process and globalization, KINH DO Corp needs to have excellent management staffs so as to manage all the risks well to exploit the business opportunities and decrease to minimum the dangers. Moreover, KINH DO Corp also must build a strong Sale channel which can help company to extend its market, improve the products quality. In specific, the products which are no longer effective should be changed; the products which are potential should be invested more and select to have the best suitable project at big center areas.


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