CHIẾN LƯỢC KINH DOANH QUỐC TẾ CỦA VIETTEL GLOBAL

INTERNATIONAL BUSINESS STRATEGY
OF VIETTEL GLOBAL

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TABLE OF CONTENTS
Acknowledgements
List of figures, tables & charts...
INTRODUCTION
CHAPTER I: LITERATURE REVIEW ON INTERNATIONAL

Page
9
11

BUSINESS STRATEGY
1.1. Overview of international business strategy
1.1.1. Importance of business expansion to international market
1.1.2. Definition of international business strategy
1.2.
International
business
strategy
Formulation
and

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11

Ventures
1.2.3.5. Foreign direct investment (FDI)
1.3. Marketing mix for international market penetration
1.3.1- Product strategy
1.3.2. Price strategy on international market
1.3.3. Distribution strategy
1.3.4 Promotion strategy on international market
1.4. Some criteria to evaluation an international business strategy
CHAPTER II: OVERSEA TELECOM BUSINESS STRATEGY OF

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VIETTEL OVER THE PAST
2.1. Overview of Viettel Global Investment Joint Stock Company
2.1.1. General introduction about foundation and development:
2.1.2. Organizational structure:
2.1.3. Business philosophy.
2.2. Business performance at current investment markets
2.2.1. General introduction about the Viettel international

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35
35

CHAPTER III: SOLUTIONS TO IMPROVE INTERNATIONAL

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MARKET PENETRATION STRATEGY OF VIETTEL
3.1
Overview of international telecom market during 2011-2015.
3.1.1 Total volume of International Telecom Market
3.1.2 Business environment analysis of foreign markets
3.1.3 Industrial Analysis and competitors of Viettel in

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investment promotion activities
VIETTEL GLOBAL SWOT Analysis
3.2.1 Opportunities
3.2.2 Threats
3.2.3 Strengths
3.2.4 Weaknesses
Select a potential market for market expansion activities of

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3.6.1 Training human resource for a knowledge economy
3.6.2 Strengthen market research activities
3.6.3 Define the right target market

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3.2

3.3
3.4

3.5

3.5.2
3.5.3

3.6

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Global JSC.
To the present time, this is the first topic to be researched. Members of the group no
one has any conflicts of interest to this company

Hanoi, 29 October 2010

GROUP OF AUTHORS
Le Nguyen Tuyen (Leader of the Group)
Phan Truong Son
Nguyen Van Trung
Dang Hoang Tuan
Nguyen Thi Phuong Lan

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LETTER OF THANKS

We would like to say thanks to Viettel Global JSC has enthusiastically supported us
in the process of providing data as well as working sessions to make strategic
business strategy for the company. Besides, we would like to thanks the professors
and doctors - who have given us the skills and knowledge of corporate governance
throughout the entire course. This knowledge is the basic foundation necessary for
us to write this topic as applied in practical work. In particular, we sincerely thank
the Academic Council of Griggs University has guided us in the process of
conducting research.

GROUP OF AUTHORS

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64-67

Mozambican market
Table 3.3: Main objectives to 2015

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Table 3.4: Objectives in 2011-2015

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3. CHART:
Chart 2.1: Market Shares of Cambodia
Chart 2.2: Market Shares about Fixed Phone of Cambodia

39-40
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Chart 2.3: Market Shares about Mobile phone of Laos

43-44

Chart 2.4: Market Shares about Fixed Phone of Laos

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Chart 2.5: Market Shares about Internet of Laos


This capstone researches some theoretical and practical issues of Viettel’s
international business strategy over the past.
This capstone also analyze some oversea markets which are considered highly
potential. Among them, there are some market where Viettel just began negotiation,
research, and project formation. Therefore, the research scope of this capstone
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focuses only on the international business strategy in terms of coverage with some
example of Viettel’s Mozambic market.
4. Research Methodology:
During the research process, the capstone use mainly documentary method
with the analysis and evaluation on secondary statistics. Qualitative method is
conducted by consulting some executives and experts working in Viettel. Besides,
this capstone also uses figures, charts, tables to increase the visual effects and
maintain the details.
5. Research Structure
In addition to the introductory and conclusion, the capstone is presented in 3
chapters:
Chapter I: Literature review on international business strategy
Chapter II: Telecom Business strategy oversea of Viettel Global during the
Chapter III: Solutions to improve Viettel’s international business strategy

CHAPTER I
LITERATURE REVIEW ON INTERNATIONAL BUSINESS STRATEGY
1.1. Overview of international business strategy
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1.1.1. Importance of business expansion to international market

 For country development::
- Benefit from national advantages over other nations in economic
development, improving the country position on international level.
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In economics, the law of comparative advantage refers to the ability of a
party (an individual, a firm, or a country) to produce a particular good or service at
a lower opportunity cost than another party. It is the ability to produce a product
with the highest relative efficiency given all the other products that could be
produced.
- International business greatly contributes to pushing domestic production
and expanding the consumption market
In developing and under developed countries, the average income per capital is
low, which explains the low purchasing power, the domestic market is therefore
limited, not be able to cover the production cost following international standards.
This leads to domestic production constraint. International business is a solution for
these countries if they can take good use of high income level, diversified taste of
consumers in foreign markets to increase demand, and push production and expand
the market then. It can not be avoided to increase export and push commercial
transaction for a nation to have economic development.
In short, international business and global commerce integrations are critical
and natural trends. International business engagement will bring benefits to both
nation and enterprise: benefit from comparative advantage to develop the economy,
expand the consumption market, push production, and enhance competitiveness of
products …
1.1.2. Definition of international business strategy
In most corporations, strategy can be defined with different levels:
- Corporate strategy refers to the overarching strategy of the diversified firm.
Such a corporate strategy answers the questions of "which businesses should we be

- Economics with different living standards. In these economies, there is still a
middle class remaining from the industrialization stage. This class has relatively
high income and formed a relatively diversified market…
- Economies with high living standard, featured by the narrowing distance of living
standards. In these economies, middle class account for a big proportion with high
income. Here, it forms a diversified market with numerous products of all kinds.
In recent years, economic environment experience big changes and
movements due to the economic unification trends at different levels: Free trade
areas, Unified customer regions, common markets, and unified economic zones.
 Cultural envrionment
. When working in the global commercial environment, knowledge of the
impact of cultural differences is one of the keys to international business success.
Improving levels of cultural awareness can help companies build international
competencies and enable individuals to become more globally sensitive. Culture,
alongside economic factors, is probably one of the most important environmental
variables to consider in global marketing. Culture is very often hidden from view
and can be easily overlooked. Similarly, the need to overcome cultural myopia is
paramount
The major elements of culture are material culture, language, aesthetics,
education, religion, attitudes and values and social organisation
 Legal/ political environment
Legal and political environment can be considered in 3 aspects:
- Environment of exporting country.

This environment has influence on the

international cooperation of companies via creating development opportunities,
apply export protection (property right protection at the importing country),
formulate export production zone. Fundamental elements of legal and political
environment of home country and the role of government are illustrated in:

operates may be shaped by a unique combination of forces, including international,
governmental,

nongovernmental

policy,

legislative,

regulatory,

and

legal

frameworks. An organization is affected by the policy or regulatory context that
gave rise to it. This includes specific laws and regulations that support or inhibit the
institution's development.
 Technological environment
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Technological factors include technological aspects such as R&D activity,
automation, technology incentives and the rate of technological change. They can
determine barriers to entry, minimum efficient production level and influence
outsourcing decisions. Furthermore, technological shifts can affect costs, quality,
and lead to innovation.
Figure 1.2: The External Analyses‘ Outcomes

(Source: « Strategic Management: Concepts and Cases: Competitiveness and

can be created to compensate for factor disadvantages.
 Demand conditions in the home market can help companies create a
competitive advantage, when sophisticated home market buyers pressure firms to
innovate faster and to create more advanced products that those of competitors.
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 Related and supporting industries can produce inputs which are important
for innovation and internationalization. These industries provide cost-effective
inputs, but they also participate in the upgrading process, thus stimulating other
companies in the chain to innovate.
 Firm strategy, structure and rivalry constitute the fourth determinant of
competitiveness. The way in which companies are created, set goals and are
managed is important for success. But the presence of intense rivalry in the home
base is also important; it creates pressure to innovate in order to upgrade
competitiveness
 Government can influence each of the above four determinants of
competitiveness. Clearly government can influence the supply conditions of key
production factors, demand conditions in the home market, and competition
between firms. Government interventions can occur at local, regional, national or
supranational level.
 Chance events are occurrences that are outside of control of a firm. They are
important because they create discontinuities in which some gain competitive
positions and some lose.
So, Porter's diamond model suggests that there are inherent reasons why some
nations, and industries within nations, are more competitive than others on a global
scale. The argument is that the national home base of an organization provides
organizations with specific factors, which will potentially create competitive
advantages on a global scale.
1.2.1.3. Analysis of Enterprise’s internal resources


could

include

room

service

in

a

hotel,

packing

of

books/videos/games by an online retailer, or the final tune for a new car's
engine.
Outbound Logistics. The goods are now finished, and they need to be sent along
the supply chain to wholesalers, retailers or the final consumer.
Marketing and Sales. In true customer orientated fashion, at this stage the
organization prepares the offering to meet the needs of targeted customers.
This area focuses strongly upon marketing communications and the
promotions mix.
Service. This includes all areas of service such as installation, after-sales service,
complaints handling, training and so on.
Support Activities.

(Source: « Strategic Management: Concepts and Cases: Competitiveness and
Globalization »’ Micheal Hitt and all, 2010)
The outcomes of above external environment analysis will be considered in
relation with the current resources of enterprises so that enterprises can make the
decision on choice of target markets.
1.2.2. Selecting market – group of target nations/countries.
After external environment analysis and the ability to join the international
market of enterprise, we will list all the potential nations and markets and their
prospects.
This selection process of markets and nations are conducted in 02 steps:
divide the market in terms of geographic consumption or customer. In order to
evaluate an international market, we will follow 5 stages:
+ Evaluating the current potential of each export market
+ Forecasting the future potential of each market
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+ Forecasting the future market share of the enterprise
+ Estimating the cost and profit on each market
+ Evaluating the profitability of each market
Internal Factor Evaluation (IFE) matrix is a strategic management tool for
auditing or evaluating major strengths and weaknesses in functional areas of a
business. IFE matrix also provides a basis for identifying and evaluating
relationships among those areas. The Internal Factor Evaluation matrix or short
IFE matrix is used in strategy formulation. The IFE Matrix together with the EFE
matrix is a strategy-formulation tool that can be utilized to evaluate how a company
is performing in regards to identified internal strengths and weaknesses of a
company. The IFE matrix method conceptually relates to the Balanced Scorecard
method in some aspects
SWOT analysis, method, or model is a way to analyze competitive position of

-

WT strategy: Establish a defensive plan to prevent the firm’s weaknesses

from making it highly susceptible to external threats.
After targeting a nation or export market, enterprises need market
segmentation and come to decision on the target market which the enterprise will
penetrate. The ultimate purpose is to find out particular feature of target market
segments. Enterprise can use geographic, demographic, psychological rules to
segment the market. After segmenting the market according to certain criteria,
enterprise will select a suitable market segment. The enterprise need criteria to
make comparison, evaluation… and then select the most potential market which
match well with the enterprises’ internal resources.
1.2.3. Select a form of international business.
Once a company decides to operate in the global marketplace, it must decide on the
level of involvement it is willing to undertake. Five common forms of international
business activities are importing and exporting, licensing, franchising, strategic
alliances and joint ventures, and foreign direct investment. Each has a varying
degree of ownership, financial commitment, and risk.
1.2.3.1 Importing and Exporting
Importing, the buying of goods or services from a supplier in another country, and
exporting, the selling of products outside the country in which they are produced,
have existed for centuries. In the last few decades, however, the increased level of
these activities has caused the economies of the world to become tightly linked.
Exporting, one of the least risky forms of international business activity permits a
firm to enter a foreign market gradually, assess local conditions, and then fine tune
its product to meet the needs of foreign consumers. In most cases the firm's
financial exposure is limited to market research costs, advertising costs, and the
costs of either establishing a direct sales and distribution system or hiring
intermediaries. Such intermediaries include export management companies,

operation. International franchising is among the fastest-growing forms of
international business activity today. Under this arrangement, a franchisor enters
into an agreement whereby the franchisee obtains the rights to duplicate a specific
product or service—perhaps a restaurant, photocopy shop, or a video rental store—
and the franchisor obtains a royalty fee in exchange. By franchising its operations, a
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firm can minimize the costs and risks of global expansion and bypass certain trade
restrictions
1.2.3.4. International Strategic Alliances and Joint Ventures
A strategic alliance is a long-term partnership between two or more companies to
jointly develop, produce, or sell products in the global marketplace. To reach their
individual but complimentary goals, the companies typically share ideas, expertise,
resources, technologies, investment costs, risks, management, and profits.
Strategic alliances are a popular way to expand one's business globally. The benefits
of this form of international expansion include ease of market entry, shared risk,
shared knowledge and expertise, and synergy. In other words, companies that form
a strategic alliance with a foreign partner can often compete more effectively than if
they entered the foreign market alone.
A joint venture is a special type of strategic alliance in which two or more
firms join together to create a new business entity that is legally separate and
distinct from its parents. In some countries, foreign companies are prohibited from
owning facilities outright or from investing in local business. Thus, establishing a
joint venture with a local partner may be the only way to do business in that
country. In other cases, foreigners may be required to move some of their
production facilities to the country to earn the right to sell their products there
1.2.3.5. Foreign direct investment (FDI)
Foreign investment refers to long term participation by country A into country
B. It usually involves participation in management, joint-venture, transfer of