MINISTRY OF EDUCATION & TRAINING UNIVERSITEÙ LIBRE DE BRUXELLES
HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BUSINESS SCHOOL

MBMM PROGRAM
HO VAN HIEN BUILDING THANH CONG PHARMACEUTICAL COMPANY’S
COMPETITIVE ADVANTAGES
In
HO CHI MINH CITY (2008-2011)

FINAL PROJECT
MASTER IN BUSINESS & MARKETING MANAGEMENT Tutor: Dr. NGUYEN NGOC HOA
nephew’s Luong who have created favourable conditions and encouraged me in
the work and completion of my study.
My thanks also go to my classmates: Loc, Minh and Chi Anh for their supports
during the courses.
Finally, my special thanks to my beloved wife and my family for their
encouragement and contribution in the completion of this project.

May 10, 2007
Author

TABLE OF CONTENTS

STUDENT DECLARATION
ACKNOWLEDGMENT
REMARKS FROM PROJECT TUTOR
COMMENT FROM PROJECT MENTOR
TABLE OF CONTENTS
ABRIVIATION
LIST OF TABLES & FIGURES

INTRODUCTION CHAPTER

I. Purpose of Study 1
II. Scope of Study 1
III. Methodology and Sources of Information 2
IV. Content of Chapter 2
CHAPTER I: THEORY ABOUT COMPETITIVE ADVANTAGE

World Trade Organization 1
HCMC
Ho Chi Minh city 1
TCC
Thanh Cong Ltd company 1
R&D
Research and Development 5
USD
United States Dollar 6
SWOT
Strengths Weakness Opportunities Threats 8
GPP
Good Pharmacy Practices 9
S.O
Strengths Opportunities 9
W.O
Weakness Opportunities 9
S.T
Strengths Threats 9
W.T
Weakness Threats 9
MVP
Marketing Value Proposal 11
USP
Unique Selling Proposition 12
5T
5T Standards 17
5C
5C Standards 17
5Ñ

LIST OF FIGURES
(pix, charts, figures (decimal: USD ‘000))
Figure Contents Page
Figure 1.1 Three Generic Competitive Advantage 4
Figure 1.2 The Self-Sustaining Nature of Competitive Advantage 5
Figure 2.1 HCMC Pharmaceutical Budget & TCC’s Turnover 7
Figure 2.2 Understanding Customers 15
Figure 3.1 Role & Meaning of Centralized Buying 22 EXECUTIVE SUMMARY
TCC drugstore was one of the top five biggest drugstores in HCMC where
professional and reasonable are encouraged. Its frequent clients are from low to
middle income, and its brand is well-known for reliable and quality medicine and
services at a reasonable price. Currently, the appearance of many fierce
competitors with lots of drugstores, their drugstores are not only big but also
diversified, TCC recedes into the background, it is a medium drugstore, TCC’s
turnover is decreasing from 2004-2006 (from 712,810 USD in 2004 to 620,430

MARKETING MATRIX COMPONENTS
TCC has the competitive advantage of beginning this project. It will be better in
relation to current clients and to attract new clients. TCC’s marketing program will
improve its relationship with customers and to expand its market share.
PROJECTED OUTCOMES
TCC expect to increase its turnover by 737,200 USD in the first year (2008). In
the second year and beyond, we expect to increase turnover by between 25-28
percent per year. The payback schedule for the 112,800 USD is in the end of first
year (2008).
(Please see the appendix)

1
INTRODUCTION OF THE FINAL PROJECT
I. PURPOSE OF STUDY
It is with great opportunities for Vietnam after becoming a 150
th
member of
The World Trade Organization. The country is now to pursue a market-oriented
economy and receiving more and more foreign direct investment from the
foreign investors, especially in the big cities such as Hanoi and Hochiminh City.
Ho Chi Minh city (HCMC) is the big city in Vietnam, has obtained tremendous
achievements since then, thanks to its great potential. There are lot of foreign
investors coming to HCMC to do business therefore it brings to the city a lot of
business opportunities as well as challenges.
The author is a pharmacist with more than ten years experienced services as a
pharmaceutical retails dealer in HCMC. Thanh Cong Limited company (TCC)
is the author’s own company, founded in 1997. It is remarkable to say that TCC
has been successful in the pharmaceutical business, resulted by the annual
increase of 15% in term of turn-over every year. In recent years, the TCC’s
turnover has significant decrease because of the fierce competition from its two

overcome the stated problems in order to success in the market.

Chapter III: Introduction of the competitive advantage in practice which is
including the implementation plan to set up TCC based on the strategy of
centralizing purchasing activities and differentiation in customer services. 1
Internal data

CHAPTER I

THEORY ABOUT COMPETITIVE ADVANTAGE.

1.1 COMPETITIVE ADVANTAGE TYPE 1: COST LEADERSHIP.
1.2 COMPETITIVE ADVANTAGE TYPE 2: DIFFERENTIATION.
1.3 COMPETITIVE ADVANTAGE TYPE 3: FOCUS.
3
CHAPTER I

THEORY ABOUT COMPETITIVE ADVANTAGES

• Achieving Focus means that a firm sets out to be best in a segment or group
of segments.
• Two variants: Cost Focus and Differentiation Focus.
Three generic competitive strategies Figure1.1
: THREE GENERIC COMPETITIVE STRATEGIES

Competitive Advantage
Low Cost Differentiation

Broad Target

Narrow Target Sources
: Michael E. Porter, Competitive Advantage
Sustaining Superior Performance, p.12 ¬ THE BENEFIT OF COMPETITIVE ADVANTAGE

Competitive advantage provides a business with the ability to create a self-
sustaining position. Look at the dynamics of the situation in above exhibit
figure.

1. Cost leadership
3A. Cost focus

several outcomes as below:
Firstly, it will have more satisfy customers than competitors, making customers
less vulnerable to competitors’ offers.
Secondly, the business will gain market share advantage will translate into
larger and better profits, which can be fed back into providing the business with
the resources needed to sustain its position: the funding of R&D for improve
products, and acquiring and improving the human and organizational skills
necessary to produce superior value.
In effect, the competitively advantaged business becomes and has all of the
advantages of an entrenched competitor. It owns the market and earns the
resources that allow it to maintain that position.
Luck
Competitive Failure
Superior Skills
Superior Resources
Competitive
Advantage
Superior Profit
Performance

CHAPTER II

MARKETING ENVIRONMENT ANALYSIS AND
THANH CONG PERFORMANCE.
2.1 HO CHI MINH CITY PHARMACEUTICAL RETAILS SITUATION.
2.2 MARKETING ENVIRONMENT ANALYSIS.
2.3 SUMMARY OF THANH CONG PERFORMANCE.

by themselves, even the people who 2

3
Private research
4
Mai Phng (18/05/2007),

7
has health insurance according to my research over 60% of them have no using
their medical insurance.

• Market growth: from the analysis of market trend, it is considered that the
market will be grown by it volume. The growth rate is expected as 15%-20%
5
.
2.2.2. ENVIRONMENT ANALYSIS
• MACRO ENVIRONMENT ANALYSIS
Ü POLITICAL FACTORS: Stable Policies with clear and unshakeable
development plan for the HCMC by the government in order to striving to
increase its economic growth by 12.2-12.5%
6
.
Ü
ECONOMIC FACTORS: Vietnam economy is growing well, GDP of HCMC
three times than one of average of the country and leader.
The GDP calculating Parity Purchasing Power method (PPP), attained 56 USD
7

0.60
0.70
0.80
2001 2002 2003 2004 2005 2006
USD Million
0
2
4
6
8
10
12
14
16
TCC's Turnover
HCMC Medical's
Budget

8
Ü SUPPLIER POWER
HCMC has 891 Pharmaceutical Ltd Companies
8
, most of medicine has been
distributing by some main firms so medicine’ price is unreasonable.
Ü BUYER POWER
Now, townsfolk’s knowledge of medical is increasing so they pay more
attention to their health, with approximately 4,200 drugstores
9
in HCMC, the
competition is more and more fierce, the more competitive the market the more

TCC’s SWOT ANALYSIS
S.W.O.T
STRENGTHS

Ü Understanding about HCMC market
Ü Good relationship with key customers,
producers, distributors and suppliers
Ü Professional services

WEAKNESSES
Ü Limited Capital
Ü Limited cost budget for marketing activity
Ü Lack of the feasible marketing strategy
Ü Unstable staff
OPPORTUNITIES
Ü HCMC market is huge, attractive and
potential market
Ü TCC leads the GPP drugstores
Ü Patients are more and more paid attention
to professional
S.O STRATEGIES
Ü Develop the market share by set up a chain
drugstores of TCC
Ü Add value to products to be attractive client
Ü Enhancement to staff training
Ü Reinforcing relationship with suppliers
W.O STRATEGIES
Ü Establishing joints-Stock Company to
increase capital to cover HCMC market
Ü Building a comprehensive marketing plan


MISSION
- Generating profit.
- TCC leads into leader in pharmaceutical retailing industry
+ Generating profit
OBJECTIVES
+ Maintaining and developing a chain TCC– “understanding
thorough your desires”
+ Achieving high net profit after tax
+ Target to serve middle and low income segment
+ Set up average 2 new drugstores per year.
+ Building a chain of GPP drugstores
+ Medicare targets to serve high income
segment.
+ My Chau drugstores , Minh Chau
drugstores and A Chau drugstores
target to serve high and middle income
people segments.

10
STRATEGIES
- Improving customer’s services.
- Maximizing Creating marketing and promotion support.
- Expanding TCC network to penetrate potential market.
- Established distribution for centralized purchasing activities.
- TCC value is greater than competitors
- For reducing price some competitors are
selling: counterfeit, medicine without
licenses, import stamp…
- Lack equipment for preserving medicine
11
PRICE

+ Reasonable Price.
+ Having pay attention to four key factors
- Target’s to people who are sensitivity to price
- Profitability
- Positioning
- Competition:
+ High price
+ Be unreasonable price
PACKAGING
- Meticulously, not only careful covering but also sufficient for
information for using medicine.
- Have not recognized to the importance
of packaging
MVP

PROMOTION
+ Direct marketing, promotion (Below the line).
+ Giving to clients some gifts to correspond with events, age,
occupation…

+ Have no or not according to their
business

PERSONNEL
+ A most important part of TCC
+ Recruitment: Careful of recruitment staff, all of them have to
overcome the first examination including written, draw, and
interviewing examination
+ Treated: - Well treated ( High income )
- Consider staff as my siblings.
+ Training: Week tests and training every week giving staff
knowledge, experience and to know how to be human behavior
+ Pay more attention to be professional
but lack for be moral
+ Have not enough initiative in their work
+ Have no the test every week for training
staff or not regular
DELIVERY
- A Destination, TCC - Diversity which satisfying all clients needs.
- Home Delivery: Company, Drugstores, School, Firms, Private
house (Value is over USD 20 ) within 12 hours in the urban of
HCMC
- Have not home delivery 13
SERVICES

10
:
Ü My Chau drugstores is the largest medicine chain in HCMC, its has
been setting up very early over past 30 years, It has 4 drugstores spreading some
urban districts, My Chau drugstores’ market share and turnover are very large,
It’s current leader, It satisfies most of clients needs, Brand and diversity in
products are main advantages of My Chau drugstores .

Ü Minh Chau drugstores is quite large chain, with 4 drugstores in
HCMC, main actions is selling medicine according to doctors’ prescriptions, its
advantages is big market share and diversified goods.
Ü A Chau drugstores is a new chain, established in 2005 with 2
drugstores, it’s market share and turnover are medium, its material facilities is
beautiful and attractive

2.2.4. CUSTOMER ANALYSIS

Information is the raw material of decision-making. Effective marketing
decisions are based on sound information; the decisions themselves can be no 10