⁄ GRIGG UNIVERSITY GeMBA01 £02 GRIGGS GLOBAL ADVANCED UNIVERSITY MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT TELECOMMUNICATIONS BUSINESS DEVELOPMENT STRATEGY OF HOCHIMINH CITY POWER COMPANY IN THE PERIOD OF 2010-2015 Group Nod: Le Van Minh Nguyen Van Tung Nguyen Thi Thanh Huong Le Thi Minh Nghia — Group leader HOCHIMINH, 2009 (C1 Global Advanced Program Group Master of Business Administration GRIGG Re GeMBA01.E02 Group INDEX CONTENTS PAGES Cover page l Index Catalogue of tables Catalogue of figures, graphs COMMITMENT AND ACKNOWLEDGMENT INTRODUCTION 1- Significance of choosing the topic 2- Purpose of research 10 3- Method of carrying out 10 4- Structure of the topic 10 CHAPTER 1: ARGUMENT BASIS 11 1.1 Concept of business strategy II 1.2 Administering business strategy 1] 1.3 Clasification of business strategy 12 1.4 Classification of business strategy 13 1.4.1 Company-level strategy 13 1.4.2 Strategy of business unit level 14 1.4.3 14 1.5 The strategy of function of building strategy 15 1.5.1- Choosing mission and main objectives of the Company 15 1.5.2- Analysis of internal and external environment 17 1.5.3- Choose business strategy 21 1.5.4- Solutions of business strategy 21 1.6 Strategic planning tool 22 !.6.1 Matrix of external factors evaluation (EFE) ods 1.6.2 Matrix of internal factors evaluation (IFE) 23 (1 The process Global Advanced Program Master of Business Administration Griccs) GeMBAOI.E02 Group 1.6.3 Matrix image competition 24 1.6.4 Tool for planning strategies (SWOT matrix) 25 CHAPTER 29 II: ANALYSIS OF TELECOMMUNICATIONS BUSINESS ENVIRONMENT 2.1 Introduction about the Company and line of telecom business of Ho Chi Minh City Power Company 29 2.1.1 Main points of the Company 29 2.1.2 Business situation in the past time 36 2.1.3 Result of telecom business activity 39 2.2 External environmental analysis 46 2.2.1 Economic factor 47 2.2.2 Political and law factors 48 2.2.3 Population and labor factors 49 2.2.4 Cultural and social factors: 49 2.2.5 Technological factors 50 2.2.6 Natural condition 50 2.2.7 International environment 51 2.3 Analysis of operation environment: 53 2.3.1 Threats of those who join potential telecommunications sector: 53 2.3.2 Negotiation Powers of customers: 53 2.3.3 Negotiation powers of providers: 53 2.3.4 The enterprises’ Competitiveness of the same telecommunications sector: 54 2.3.5 Pressure of replacement products 59 2.3.6 Competitive figure matrix of Power Telecommunications 59 2.3.7 summary of opportunities and challenges 60 2.4 Analysis of internal environment: 63 2.4.1 Analysis of operation scale 63 2.4.2 Analysis of human resources 63 (C1 Global Advanced Program Master of Business Administration ⁄ GrFIGG Vănveserr> GeMB401 E02 Group 2.4.3 Analysis of financial situation: 65 2.4.4 analysis of the service quality 65 2.4.5 Analysis of marketing: 67 2.4.) Analysis of management competence: 68 2.4.7 Competence of research and development: 68 2.4.3 Reputation and prestige of the company: 69 2.4.) Matrix of external factors evaluation 70 2.4.0 summary of strengths and weaknesses: 71 2.5 Conclusion and evaluation on telecom business competence of Ho Chi Minh Power company 74 CHAPTER 3: BUILDING TELECOMMUNICATIONS BUSINESS STEATEGY FOR HO CHI MINH CITY POWER COMPANY 76 3.1 *orecast of telecommunications services demands in HCMC 3.2 Orientations for the telecommunications development of Vietnam 76 Eledricity (EVN) 3.3 Determination of missions, targets and markets of Ho Chi Minh City Pover Company 77 3.3 Mission determination 77 3.3.! Objectives of HCMC Power Company 79 3.3 Target markets of HCMC 81 Power Company 3.4 strategy construction 81 3.4 SWOT Analysis 81 3.4.) Strategies selection 83 3.5.Solutions for business strategies performance 87 3.5 The solutions group of entrepreneur strategies planning and organization 87 3.5.: The solutions group of service quality improvement 88 3.5 The solutions group for the distribution system 93 Global Advanced Program Master of Business Administration / UNIVERSITY GRIGG GeMBA0] E02 Group 3.5.4 The solutions group of finance and charge 95 3.5.5 The solutions group for advertisement and promotion works: 95 3.5.6 Solutions related to human resource development 98 COMMENTS AND CONCLUSIONS 100 REFERENCE 103 MATERIAL Appendix 1: Organization chart of Ho Chi Minh City Power One Member Limited Corporation 104 Appendix 2: Time to implement solutions 105 CG Global Advanced Program Master of Business Administration ⁄ Uarvensiry GRIGG GeMBAO] CATALOGUE E02 OF TABLES CONTENTS Table 2.1: Group PAGES Some of main business targets Table 2.2: Subscriber situation of ceasing temporarily, terminating to 37 40 June 30", 2009 Table 2.3 Situation of performance telecommunication investment 45 project Table 2.4 Figures in age level 49 Table 2.5 Matrix of external factors evaluation (EFE) for HCMPC 52 Table 56 2.6: the total number of mobile phone subscriptions up to the end of 2008 Table 2.7: Revenue and paying the State budget of telecommunications 57 enterprises, 2008 Table 2.8: Competitive image matrix of Electricity Telecommunications 60 Table 2.9 : Vietnam-economic Activity 61 Table 2.10: Matrix of internal factors evaluation 70 Global Advanced Program Master of Business Administration Gric Siereearre RIGG GeMBA0] CATALOGUE E02 OF FIGURES, GRAPHS CONTENTS Figure 1.1: Group PAGES Porter's forces Model 19 Figure 1.2: Plan of building strategic circle 22 Figure 2.1 38 Graph of power revenue growth (2001-2008) Figure 2.2 Graph of developing subscriberin the past years 39 Figure 2.3 4] CDMA service structure at the end of year 2008 Figure 2.4 Current and future head office of HCM Power Company 45 Figure 2.5 Chart of telephone subscriber growth in some years and 48 subscriber growth level per density of telephone in the first months in 2009 Figure 2.6 Phone market share of telecommunications enterprises and 56 trends of development Figure 2.7 Graph on workforce level 64 Figure 2.8 Graph on human resources growth in the period of 2003- 64 2008 Figure 2.9 Telephony activity of EVN telecom 66 Figure 3.1: The interrelation between 84 prices and quality in regard to telecom services in the market is specified as follows Gobal Advanced Program Master of Business Administration / Griscs) ŒeMB401.E02 COMMITMENT AND ACKNOWLEDGMENT To carry out this topic, my training programme, lecturers, Group group Ho Chi is very grateful for the help of Master Minh City Power Company, as well as opinion contributions of our friends, colleagues in the past time We would like to kindly send our thanks to the authors of the research work which this thesis has referred to [ue to our limited time and knowledge, we wish to have constructive opinion: and useful advice to complete this topic, increase feasibility of the chosen topic Ve undertake that this is our group’s research thoughts Sncerely, for our Group Je Thi Minh Nghia Cobal Advanced Program Master of Business Administration GHGGs) GeMBA01.F02 Group INTRODUCTION Sgnificance of choosing this topic Uneer the intergration into the world economy, new competitors ( transnational corporations, Viet Nam Enterprises are facing financial potentially multi-national coryorations, highly competitive technology, experience and competence), have to compete drastically prin:iples competitive in the of commercial ability for new condition institutions Viet Nam and (the global market international Enterprises with laws) in making The the strict increase in the best of available resoirces is to rise for gaining initiative in the period of integration, the increase in competitive ability is the striving criterion of Viet Nam Enterprises Elecricity of VietNam (EVN) is still under this tendency, with the basic advantages of combining in using available infrastructures of electricity power, the number of poteitial customers and over 100.000 staff contacting cusomers directly, frequently In own _ business strategy, teleommunications needs EVN seizes In the diversification the growing strategy commmunity in business, EVN has chosen to invest in telecommunications and has been licensed by the Government to povide domestic and acccdance with Decision the international No public telecommunications 66/CP-CN dated January 19" services ( In 2001 of the Gov:rnment) with the trademark of EVNTelecom Ho *hi Minh City Power Company is a member unit of Electricity of VietNam, assimed with a duty of business in telecommunications Hovever, Ho Chi Minh City Power Company has joined the telecommunications mar:et in 2005, business experience in telecommunications is still young To be exised in competitive environment with a lot of pressure from domestic traditional teleommunications enterprises as well as abroad enterprises to join the market in the iext time under the commitment of joining WTO, the company has to have an Global Advanced Program Master of Business Administration ⁄ GRIGG GeMB401 E02 UNIVERSITY Group effective business strategy Therefore, our group has decided to choose the topic: * Building telecommunications business strategy of Ho Chi Minh City Power Company” as our research topic Purpose of research: Analyzing external environment real situation strengths, of the weaknesses to find opportunities, challenges enterprise in telecommunications of the enterprise, from that point, proposing effectively mobile solutions of the company and anaylzing business, choosing determining strategy and to carry out strategy Method of implementation out: Our group has implemented to research principles of business planning strategy, such as: concepts, process of making strategies, tools for determining strategy Collecting data, analyzing, assessing external and internal environment impacting telecommunicatiosn business Applying the researched theory model to build business strategy for the company up to 2015 Structure of the topic: Starting Part: General Introduction Chapter 1: Argument Basis Chapter 2: Analysis of telecommunicatiosn business environment Chapter 3: Building telecommunications business strategy up to 2015 Solutions to implement strategy, recommendation and conclusion 10/106 Global Advanced Program Master of Business Administration ... trademark of EVNTelecom Ho *hi Minh City Power Company is a member unit of Electricity of VietNam, assimed with a duty of business in telecommunications Hovever, Ho Chi Minh City Power Company has joined... evaluation on telecom business competence of Ho Chi Minh Power company 74 CHAPTER 3: BUILDING TELECOMMUNICATIONS BUSINESS STEATEGY FOR HO CHI MINH CITY POWER COMPANY 76 3.1 *orecast of telecommunications. .. planning strategies (SWOT matrix) 25 CHAPTER 29 II: ANALYSIS OF TELECOMMUNICATIONS BUSINESS ENVIRONMENT 2.1 Introduction about the Company and line of telecom business of Ho Chi Minh City Power Company