Tan Hiep Phat – Strategy Analysis Essay Essay
Tan Hiep Phat – Strategy Analysis Essay
As a Marketing student of HCMC Open University, I have chances to access to numerous useful and practical marketing theories. In my studying process, I am very lucky to study with many excellent lecturers who are also good at academic knowledge and latest practical experiences. They are the ones who inspired me and helped me have more faith in my major. One of those lecturers is Mr. Nguyen Dinh Trong, lecturer of my Strategy Management class. Mr. Nguyen Dinh Trong not only brings me and my classmates many useful lessons of Strategy Management but also learning spirit and continuous opening to new ideas. His enthusiasm and caring has helped me a lot in studying this difficult subject. This finished essay is my sincere thanks to Mr. Trong. This is my acquirements from studying Mr.Trong’s lectures. Also, I would like to thank my friends who are working at Tan Hiep Phat Group for helping me so much in the period searching information and completing my essay. Hope that my essay can bring a side of point view about THP Group’s performance. Also my proposed strategy can be useful for company to develop its strategy.
As mentioned above, I have acquired a lot of new knowledge for establishing a reasonable strategy set from the Strategy Management class lectured by Mr. Nguyen Dinh Trong. Meanwhile, I have ability to identify and evaluate the issue in reality. After considering the advertising and promoting activities of THP Group, I figured out some of its problems and opportunities in the national market. That makes me very interested and that is the reason why I choose the essay topic “Business Strategy Of Tan Hiep Phat Group”. By identifying the overall performance of the company, combining with the collection and analysis of information from the social environment, operational environment and internal environment of the company, I manage to find out its opportunities and risks from the external environment affecting its business operations, as well as the strengths and weaknesses of the company in Vietnam. The analysis tool is the SWOT matrix, EFE matrix, BCG matrix… to establish a strategic plan. And my goal is selecting the most reasonable strategy. Besides, my paper recommends a few options to help THP Group solve its problems and implement the right strategy to be the top company in Vietnam soft drinks market. A running man must know his right track to the finish point and the proper strategy is the only track for the running Tan Hiep Phat Group.
We are living in a new century with the globalization and the huge, various and complicated changes, which affects to every nation, every enterprise. In the current developing trend, the Vietnam economics itself has a lot of movements and also is affected by the changes of the global economics. The enterprises are the main part which directly fights against those changes. There are many reasons leading to the risks, bankruptcy or market share decreasing of each enterprise. So, the analysis of business strategy plays a vital role in decreasing the fatality of each business. By the fact that the opening policies of the market economics have pushed the enterprises into a severe competition, businesses have been under hard pressure from many sides of the market. To maintain and develop, the enterprises and administrators, themselves, have to find out the proper solutions to develop their operation, increase the turnover and profit, and also maintain their reputation on the market.
But the first step they need to take is identifying what is their position, which is their key products, which way that they should develop their products?… All those questions are a strategic plan. In my paper, I try out to set up a strategic plan with the title “Business Strategy of Tan Hiep Phat Group in the next three years”. This plan is set up to bring THP Group the method to maintain its competitive edge and also make it to be one of the top companies in Vietnam.
GOAL OF THE TOPIC
Identify the opportunities, risks affecting the business of THP Group by analyzing the external environment. Identify the strengths and weaknesses of the company by analyzing the internal environment to clearly define its main capability and its position on the market. Define the most appropriate strategy for the current state of the company through the strategic planning tools.
PRACTICAL VALUE OF THE TOPIC
This essay might bring up a review of inside and outside factors about opportunities, risks, strengths and weaknesses so that it can help the managers find out the way to operate and stably develop the company’s business in the future. At once, it gives out the comparison between THP Group and other rivals.
RESEARCH RANGE OF THE TOPIC
The research range is setting up a strategic plan set for Tan Hiep Phat Group at the present stage. Implementation time: June, 2011 – June, 2013
Secondary information: newspapers, magazines, television, and internet… CHAPTER 1OVERALL VIEW OF TAN HIEP PHAT GROUP
Tan Hiep Phat Trade and Service Co., Ltd. was founded in 1994 – its predecessor being Ben Thanh Brewery and Beverage Factory – specializing in trading and producing alcohol, beer and beverage. Tan Hiep Phat Trade and Service Co., Ltd. (abbreviated as THP Group) is a member of Vietnam Brewery and Beverage Association. Since its foundation, with more than 16 years in operation to produce trade and serve consumers, the company has gained trust and high assessment from consumers for its product quality and service style. The company is the one in ten years to attain the designation of “Vietnamese high quality product acclaimed by customers” in a survey made by the Saigon Marketing News. THP T & S Co.,Ltd. has technical system insuring safe production in each and every section of the company, adequate equipment for fire prevention insuring safe operation for employees and properties in all production lines.
THP Group is a very prestigious enterprise with its nationwide distribution network in Vietnam including representatives and agents to insure quick and effective distribution of products of beer and bottled beverages to places where they are in demand and with reasonable price. During the past years, THP has made great efforts in investing in construction , in transforming and upgrading production facilities, in buying new and modern equipment for producing and raising product quality. The company has been given commendation certificates and papers as well as souvenir medal for the quality of its products and for its after-sale service.
Information in brief:
– Tan Hiep Phat Trade and Service Co., Ltd.
(TAN HIEP PHAT BEVERAGE GROUP)
– Company’s name: Tan Hiep Phat Trade and Service Co., Ltd. – International trade name: Tan Hiep Phat
– Abbreviated name: THP Group
– Founder: Dr. Trần Quí Thanh.
– Facilities: offices (6.037sq.meters), factory (7.511sq.meters), warehouse (45.552sq.meters), with equipment for production and environment handing control system. – Main office: Located at Thuan An District, Binh Duong province with more than 110.000sq.meters for production. Factories with equipment for industrial production lines and for research are the most modern in South East Asia. – Website: www.thp.com.vn
– Phone number: 0650 755 161
– Email: [email protected] or email@example.com- Business fields: Drinks and foods Vision
“To become a leading Asian group in three main business areas: drinks, instant foods and plastic packaging. Mission
THP Group produces and trades high-quality products for the health of Asian consumers with the proper flavor and international standard.
The objective of the company is to produce the best drinking products with various trademarks: Number One, Laser, Ben Thanh Gold, Ben Thanh… for the consumers through a wide system of distribution covering all 64 cities and provinces of Viet Nam. “To become a leading Asian Group in three main business areas: drinks, stint food, and plastic packaging”.
Business philosophy is to upgrade the quality of the product and service in order to supply consumers with the highest quality products and services and to operate with the above-mentioned guideline “Today surpasses yesterday but is not equal to tomorrow”.
-“Today surpasses yesterday but is not equal to tomorrow”
– “international standard quality”
– “Oriented in the highest spinet of the family”
– Become trustworthy frontier”
– Owner’s spirit in the operation of the company”
Logo of the company
– THP: Initials of the company’s name.
– Two hands: power of vitality and will power.
– Two thumbs: to become Viet Nam’s No.1 Group Supplying drinks with Asian stature. – Navy blue: prosperity, peace.
– Green: development, growth, and diversity.
– Ensemble look: a pyramid full of strength, will power and firmness.
RANGE OF PRODUCT
At present the Ministry of Food Hygiene and Safety Department has granted licenses to more than 29 products to be produced and circulated in the whole territory of Vietnam. There are 37 trademarks produced by THP Group whose right of intellectual ownership has been protected. The products of THP have made a huge sound and gain a lot of success in sales on the drinking bottled product market. These are the drinking bottled products of THP Group:
Number 1 energy drink, Number 1 strawberry, Number 1 chino.
Number 1 Soya with corn, strawberry, green pea and soya flavor Zero-Degree green tea with lemon, honey, sugar free and apple flavor. Barley tea.
Number 1 Juicie with pineapple, lemon, custard-apple and tamarind flavor. Active beverage.
Dr. Thanh tea.
Kinds of beer: Ben Thanh, Gold, Laser fresh beer.
Images of a few THP products
EVALUATION OF COMPANY’S BUSINESS
Company has a few successful products: Dr. Thanh Tea, Number 1 Energy Drink, Zero-Degree Green Tea, Barley Tea, Active beverage and Number 1 Soya. Otherwise, there are many products of the same category that are not well known and bring up high sales, such as: No.1 Soya with corn, strawberry and green pea flavor; No.1 energy drinks with chino flavor; Ben Thanh and Gold beer. Finally, there is one product that is totally defeated on the market and stop producing: Laser draught beer.
EXTERNAL ENVIRONMENT ANALYSIS
Vietnam economics has had many stable and firm developing steps in recent period. The stability of our economics has good effect on the development of civil economic areas, including beverage area, and serves the higher demands of the people and the society. The recent statics show that our economics has good signs, such as GDP index of the first 3 months of 2011 is 5,5%. However, consumption price index (CPI) has risen 6,1% though the government has put effort to control this index (the target is to control this index under 7%). The high growth of the economics has pulled up the average individual income, leading to improving to the higher living conditions for people. For those, demands of living and demands of foods and drinks are much higher. Inflation happened again because of the basic effect and the demand pressure. The government has taken control the currency tightly, also raise the basic interest. So that brings up difficulties for producing, trading and investing. Therefore, the speed of economics development is estimated at the good rate, but there’re signs of slowing down.
POLITICS – LAWS
The stability of politics and the consistency of main policies made the investors have the optimistic view of the market, so this is an attractive factor that made a lot of foreign investors come into Vietnam. On the other hand, the politics’ stability impulses the producing activities of enterprises. The enterprises, not under the pressure of the instability of politics, have good conditions for producing. The stability of politics brings up foreign investment amount and the enterprises can use those investments for developing production, enhancing the market share. In brief, the stability of politics creates many advantages for the enterprises. The law system is improved almost completely that makes a fence of laws for economic activities and also force enterprises to accept the adaption of the government in the Vietnam market economics these days. Whereas, the law system maintains the stability of politics and makes the investors believe in operating their business.
CULTURE – SOCIETY
Vietnam is a developing country, so the demands of essential consumption is still at a high rate in consuming structure (about 50%) and will get a higher rate when people’s living is improved. According to estimation of beverage investors, at this time Vietnamese consumes a large amount of drinking products, about 4,2 billion liters/yr and Vietnam is a strongly developing market. In opposite with carbonated soft drink market, the demand of gas-free beverage, especially fruit juice, rise strongly at VN (about 30%/yr). A research of Asia Panel VN about the using drinks show the trend of using good-for-health beverages is exploding in VN, especially at the large cities. According to Asia Panel, the number of high income households (over 6,5mil/month) has risen over 12% in the total Vietnam households. The same situation happened with the households which has income about 4,5 – 6,5 mil/month. People are changing to choose the products originated from nature, good for health like milk, dairy, fruit juice, ground fruit, bottled drinks… The research on urban households shows that 70% cares about their health more than before, 74% wants to use vitamins and minerals, and 80% want to buy products that have ingredients good for health like ginseng, calcium… Life style:
The hurry pace of Vietnamese living and modern life style makes people not only care of health but also take part in many sport activities, social activities… Therefore, consumers like quick-able using products, with good effect and good for health. Nowadays, people often gather with friends, colleagues at coffee shops. Meeting demands of these objectives will help the enterprise develop properly and bring up profit.
Vietnam is a developing country with the popularity of 85,7 million people (13th in the world). The rising rate per year in 1999 – 2009 period is 1,2%/year. So, this is a potential consuming market, also a large human resource with medium salary. Urbanization makes the living conditions and beverage needs raise. Especially at big cities, due to the crowded centralization, the summer is getting hotter leading to strongly raise demands of beverage on those days. Summary, our country with high popularity, fast urbanization, high rate of youth is a good market with plenty of customers for THP.
Recently, in beverage area, the achievements of science and technology have created new competitive advantage, stronger than current advantage. So, the companies with strong finance that can import advanced equipments, production line will raise the quality, improve nice packaging and reduce price. That will bring a strong competitive edge. Make the most of this factor, THP imported advanced technologies to raise productivity and quality of products. About product packaging: the inheritance in designing made THP different from other rivals in this area. THP made many kinds of PET bottle, recycled glass bottle, Tetra Park paper box and can which are very convenient for consumers. The environment technology is more modern and easily accessed that helps THP solve environment problem the best. The only disadvantage is that technology often cost a lot. However, during the past year, THP invested equipments and technologies in this aspect very much. These days, communication technology in Vietnam has developed strongly, that helps the enterprise promote the image of products easily to customers through many ways: ads on Internet, on television, advertising show… THP has operated their communication campaign pretty well; invest very much in communication to promote the image and usefulness of product brand.
– Natural position:
Vietnam is on the East South point of Indochina. Vietnam has borders with Thailand, Laos, Cambodia, China and Gulf of Tonkin. Vietnam domain has the S-shape and the distance from the North to the South is about 1.650km, with the total length of the coast 3.260km (not including islands). Due to Vietnam’s convenient natural position, THP easily trades with its partners on nationwide range, also in Asia areas and throughout the world by land, by sea and by air. However, the distance North – South is rather huge so the distribution, supplying products for the North market faced many difficulties about transport cost, product promoting which require a suitable strategy.
Vietnam has monsoon tropical climate, with high amount of rain and high level of average temperature. Every year has 100 rainy days with average rain amount 1.500 – 2.000mm. Air humidity is about 80%
Average temperature is 220C – 270C
Sunny hours are about 1.500 – 2.000h/year
Yearly average radiation temperature: 100 kcal/cm2
These climate features made the demand of beverage on the nationwide range is very high, giving THP a large and crowded comsuming market. On the other side, Vietnam climate bring up a huge source of water and diversified natural material sources.