GLOBAL BUSINESS STRATEGY group assignment report on a business strategy

NATIONAL ECONOMICS UNIVERSITY
SCHOOL OF ADVANCED EDUCATION PROGRAMS
~~~~~~*~~~~~~

GLOBAL BUSINESS STRATEGY
Group assignment: Report on a business strategy

Lecturer

: Dr. Nguyen Anh Minh

Group

: Group 2

Class

: International Business EEP 61ª

Members

: Nguyễn Thanh Xuân (11196413)
Lê Hà Anh (11190166)
Phạm Nguyễn Ngọc Mai (11193310)
Đào Lan Nhi (11193964)
Nguyễn Thị Minh Châu (11190777)
Nguyễn Hương Trà (11195154)
HÀ NỘI – 2022


TABLE OF CONTENTS

PART A ............................................................................................................... 1
1.Our company ............................................................................................... 1
2.External environment ................................................................................... 4
PART B ............................................................................................................. 18
1.A global standardization stategy ................................................................ 18
2.Market ........................................................................................................ 17
3.Entry strategy............................................................................................. 23
PART C ............................................................................................................. 26
1.The new industry: kitchen utensils and appliances.................................... 26
2.Justification for diversifying by using the five forces model ....................... 27
3.Approaches to diversifying into a new industry.......................................... 28
4.Strategic fit along the value chain .............................................................. 28
REFERENCES ................................................................................................. 30


PART A
1. Our company
“Delicant makes your house a home” – Our brand provides all the
households in the world with the new sterilization kitchen cupboard.
v Strategic vision
Aiming to become the prestige supplier of furniture, especially kitchen
tools, not only in Vietnam but in Asia and all around the world.
v Mission statement
Delicants distinct target is to provide extraordinary health to people
during their meals, especially during the Covid – 19 epidemic, when residents
are now aware of the harm of the bacteria which may exist in their bowl.
Delicants Foundation is a furniture company, so our second aim is to
bring a delicate decoration to your kitchen and turn it into a true home.
v Overview of the product
Since we understand thoroughly the demand of having absolute stainless

dishes, our company has come up with the brand new idea of a sterilization
kitchen cupboard.
The cupboard is only a fine decoration to your kitchen but also a
convenient tool to sterilize bowls, dishes, cutlery and other kitchen tools which
involve in cooking.
v Technical features
- Pressure meters for steam; water; medical gases; compressed air and
clinical vacuum; and heating ventilation and air conditioning (HVAC) systems
- Manometers to measure differential pressure across the filters of HVAC
systems, water, steam and pneumatic systems, ventilators, and anesthesia
equipment.
- Flow meters for water; medical gases; medical compressed air and
vacuum; and hydraulic circuits
- Particulate air meter for monitoring the quality of treated air
atmospheres with ventilation systems or conditioned air and other isolated
areas

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- Thermometers or thermocouples for temperature measurement of air,
water, and steam at specific points inside equipment or systems
- Chronometers to measure cycle times
- Chemical products for cleaning, disinfecting, and sterilizing surfaces of
equipment
- Electrical safety analyzer
Our products vary in a wide range, the customers can create their own
and unique products by customizing them which fit their home best.
v Delicants business model
• Customer segments

- A mass – market business model is what Delicant aims for because the
products have a wide price range, size and quality that can satisfy all customer
segments.
• Value proposition

- The mission of the company: We offer Technology to customers who
care about their health in not only the Covid 19 pandemic but afer that as well,
to have a clean living environment.
- Specialized products: Disinfection machine with the ability to sterilize
the kitchen tools and disinfect bacteria for tools before use.
- Scope of the market: Diversification of products is family – friendly and
prioritizes the domestic market during Covid.
• Channels

- Delicant’s main channels are selling through electric retailers (HC,
Dienmayxanh,…) and furniture retailers (UMA, JYSK,…).
- Delicant also cooperates with many apartment projects from big
building companies (Tan Hoang Minh, Hoang Huy, Sun Group, …) to fit up the
product in unfinished apartments.
• Customer relationships

- Delicant’s customer relationship is primarily of a long-term nature.
Customers buy and use our products, they will be consulted and taken care of
as well as receive other benefits when purchasing. The company’s website
provides answers to frequently asked questions and email support for
customers’ needs. Delicant will provide a warranty for a long time to customers
who buy the products
2

• Revenue stream

- Income: Selling the products to customers.
- Outcome: Spending on manufacturing, marketing, labor force, taxes,
contingency cost and distribution until the product goes into customer's hands.
• Key resources

- Delicant’s main resources are its human and physical resources. We
set up different groups to research and operate the machines to best suit the
requirements of our customers and together we are toward the goal of building
the best products to protect the health of consumers in this epidemic period.
• Key activities

- Delicant’s business model entails are manufacturing the best products
for customers and taking care of all customer’s demands and pleasing them
with good services. Moreover, factories, trucking, materials, warehouse are also
important parts that help produce high-quality products that Delicant focus on.
• Key partners

There are 3 main partners Delicant collaborates to promote our
products:
- Real estate: they will contact Delicant when customers need to buy
interiors for their new home or real estate partner can install Delicant’s product
inside unfinished houses and we can provide customer services for them.
- Delicant cooperates with the factory to manufacture and distribute
products safely and conveniently which helps save the expenditure on
production and shipping for the company.
- Retailer chains: The retailers will carry goods from the company and
distribute genuine and completely independent products.

• Cost structure

Delicant prepare our cost structure into three phases along with
product development:
o

Phase 1: Survival

In this phase, the product had just arrived on the market as a newbie and
needed to be promoted and advertised.
- 20% cost for manufacturing.
- 50% cost for sales and advertising.
- 30% cost for labor forces.

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o

Phase 2 (growth)

The product is widely known and has been consumed more in the
market, the demand of customers will increase so Delicant will focus on
production and development:
- 50% cost for manufacturing.
- 20% cost for sales and advertising.
- 30% cost for labor forces.

o

Phase 3 (stability)

Delicant has owned loyal customers, the sales volume is stable, Delicant
will start to conduct research and development on new products.
- 50% cost for manufacturing (30% for R&D)
- 20% cost for sales and advertising.
- 30% cost for labor forces.

2. External environment
v PESTLE anslysis
• Political
Vietnam is a socialist nation with a stable and interactive political climate
and a growing legal framework that provides possibilities and circumstances for
enterprises to plan production and operations. With a generally stable political
climate, the legal system has strengthened, providing possibilities and
circumstances for businesses to organize their production and operations. To
protect the interests of consumers and the country of genuine manufacturing
enterprises, the government has made provisions of the law on standards,
technical regulations, the law on industrial property copyright, and regulations
on packaging and labels for electronic and electrical household products.
This is the basic as well as shaping for Delicants in building the image
and brand of the product. Sterilization of kitchen cupboard products ensures
technical standards as prescribed by law.
• Economic
Since 1986, Vietnam has consistently innovated, adopted economic and
political strategies, and evolved into a low-middle-income nation that is no
longer backward, rather than a poor country complaining. In recent years, there
have been complex worldwide variations. Vietnam, on the other hand, has
maintained a positive growth rate over the years, with a projected growth rate of
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1.82 percent in 2020. (due to the negative impact from the COVID-19
epidemic). However, in comparison to other nations in the area, Vietnam's
economy has been highly praised and steady in recent years, owing to its
strong growth rate.
Various nations have implemented social isolation measures, limited
many activities, and forced many industrial companies to temporarily close as a
result of the Covid-19 epidemic, all of which have had a significant impact on
consumption. a significant reduction However, by implementing excellent illness
preventive and response measures in response to Covid-19, Vietnam has been
able to stave off a severe economic downturn. Vietnam's economy was severely
impacted by the COVID-19 epidemic as a result of its deep economic
integration, but it also demonstrated remarkable resilience. If Vietnam
successfully stops the spread of the virus, the economy is expected to increase
by 5.64 percent in 2021. At the same time, export-oriented manufacturing
industries fared well, and domestic demand recovered quickly.
During the pandemic, consumers began to be more strict with
consumables, careful selection, sure for a good product as well as a reasonable
price, can achieve satisfaction. Sterilization of kitchen cupboard products is not
only an opportunity to prove to consumers about product quality and reasonable
prices but also a challenge to products during this time.
• Social
The population of Viet Nam is around 98 million people, with an average age of
32.9 years and 37.34 percent of the population residing in urban areas,
according to UN figures. As a result, Vietnam has a sizable share of the
working-age population. The country's predominant religion is Buddhism, and its
primary language is Vietnamese. Men have a 93-year life expectancy, while
women have an 81-year life expectancy. The country's middle and upper
classes are fast expanding, and their members tend to travel more than in

earlier decades.
This is a great opportunity for Sterilization of kitchen cupboard products to get
closer to customers.
• Technological
Sterilization refers to a process that eliminates or kills all pathogens
using various technologies and methods that are applied for sterilization of
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equipment and medical devices in the healthcare infrastructure. There is an
increase in the demand for sterilization technologies across the globe. Patient
safety and the prevention of hospital-acquired infections being a major concern
lead to an increase in the demand for sterilization technologies in the healthcare
sector. The sterilization technology market is driven by the increasing
occurrences of hospital-acquired infections, increasing number of surgical
procedures, growth in pharmaceutical and biotechnology industries, and rising
technological advancements in sterilization equipment. However, the stringent
regulatory framework could hamper the growth of the market during the forecast
period.
The global sterilization technology market is expected to reach a market
value of USD 8,142.61 million by 2023 from USD 5,074.58 million in 2017 at a
CAGR of 8.20% during the forecast period from 2018 to 2023. In 2017, the
Americas held the largest share of the market at 40.1%, followed by Europe and
Asia-Pacific with shares of 34.4 % and 17.48 %, respectively. The global
sterilization technology market has been segmented based on process, type,
end user, and region. By type, the global sterilization technology market has
been classified into ethylene oxide, ionizing radiation, filtration, thermal
sterilization, and others. Based on process, the global sterilization technology
market has been categorized as chemical process, physicochemical, synergetic
process, and physical process. By end user, the global sterilization technology

market has been segmented into hospitals and clinics, the pharmaceutical
industry, and medical device manufacturers.
As a product of Delicant, using advanced sterilization technology
combined with heating ventilation and air conditioning systems, Sterilization of
kitchen cupboard is the perfect solution, suitable for disinfecting, sterilizing
surfaces of equipment and for daily cooking at home.
• Legal
Since 2009, the Ministry of Science and Technology in Vietnam has
added 13 categories of household electrical and electronic equipment to the list
of goods at risk of unsafety (group 2) that must be controlled according to laws.
QCVN 4:2009/BKHCN QCVN 4:2009/BKHCN QCVN 4:2009/BKHCN By 2012,
the Ministry of Science and Technology will add 07 categories of electrical and

6


electronic items to the list of Group 2 commodities that must be controlled for
safety and electromagnetic compatibility, according to QCVN 9:2012/BKHCN.
The standard for assessing safety for household electrical and electronic
equipment is the IEC 60335 Household and similar electrical appliances –
Safety set of standards.
This set of standards has been uniformly applied worldwide, most
countries have translated this set of standards into national standards. Vietnam
has translated the IEC 60335 series of standards into the Vietnamese standard
TCVN 5699.
• Environmental
Vietnam is a sovereign and autonomous country with 54 ethnic groups.
Despite their disparities in regional identity and culture, the brothers' most
striking common ground remains patriotism, familial love, and national unity.
When customers' attitudes and worries about origin are another component that

substantially contributes to the growth of Vietnamese consumers, this is also a
factor impacting their purchasing behavior. Domestic businesses prioritizing
support for national products "made in Vietnam" have developed a significant
resonance effect among the Vietnamese people, instilling national pride. The
reality is that environmental contamination is growing increasingly severe
across the world, prompting consumers to become more conscious of their own
purchasing habits in order to help safeguard the environment.
v Porter’s Five Forces
• Threats of new entrants
Economies of scale are quite difficult to achieve in the furniture industry.
This makes production costs more expensive for new entrants.
Product differentiation occurs strongly in industries, where companies in
the industry sell differentiated products instead of a standardized product.
Customers also look for differentiated products.
Capital requirements in the industry are high, making it difficult for new
entrants to set up a business due to the high costs involved. Capital expenditure
is also high due to high R&D costs. This makes it difficult for new entrants to the
industry.
The potential of Vietnam's kitchen equipment industry in the coming time
is highly appreciated. According to the data of the Ministry of Industry and
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Trade, consumption in the kitchen equipment industry accounts for 9%, a
potential market that makes many domestic and foreign kitchen equipment
enterprises also have the desire to join. With easy access to distribution
channels, new businesses can easily get products onto shelves through just a
few retail stores that sell home appliances
Government policies in the industry require regulatory requirements:
Strict licensing and regulatory requirements must be in place before a company

can start selling.
Therefore, the threat of new entrants is low.
• Bargaining Power of Suppliers
The number of suppliers in the industry in which Delicants does business
is much greater than the number of buyers. This means suppliers have less
control over pricing.
The products these vendors offer are fairly standardized, have little
differentiation, and have low switching costs. This makes it easier for buyers like
Delicants to switch suppliers.
Suppliers do not compete with other products in this industry. This
means that there are no substitutes for the product other than that provided by
the suppliers.
Vendors do not provide a credible threat to future integration into the
industry in which Delicants operates.
The industry in which Delicants operates is an important customer for its
suppliers. This means that industry profits are closely tied to suppliers' profits.
Therefore, these suppliers must offer reasonable prices.
Therefore, the bargaining power of suppliers is relatively low.
• Bargaining power of customers
The market is quite rich, consumers have many choices.
Buyers are well informed about the product offerings of sellers (product
features and quality, prices, buyer reviews) and the cost of production (an
indicator of markup). The more information buyers have, the better bargaining
position they are in. The mushrooming availability of product information on the
Internet (and its ready access on smartphones) is giving added bargaining
power to consumers, since they can use this to find or negotiate better deals.

8

Up to 50% of the Vietnamese population is under 30 years old. This
generation of young, educated and tech-savvy consumers tends to be open to
new technology, and investing in modern, convenient, family-friendly appliances
is an all-time choice weak for them.
Covid-19 makes a big change in living habits. According to a survey by
Nielsen Global Connect, a global data analysis and measurement company, up
to 62% of Vietnamese people said they would eat at home more often instead
of going out to eat, even after Covid-19 ended. Delicants are closely associated
with people's daily lives, essential and high-quality equipment
Customers are quite price sensitive, as they have the right to bargain and
buy competitors' products.
Therefore, the bargaining power of customers is moderate.
• Threat of substitutes
Faced with many new products that are better in performance, features,
ease of use and lower prices. Delicants are forced to innovate and upgrade
continuously to meet customer needs and expand the market.
The costs that buyers incur in switching to the substitutes are low. Low
switching costs make it easier for the sellers of attractive substitutes to lure
buyers to their offerings; high switching costs deter buyers from purchasing
substitute products.
Therefore, the Threat of Substitutes of customers is moderate.
• Competitive rivalry
Mordor Intelligence forecasts that the period 2020 - 2025 will be a boom
year for the kitchen furniture segment in the Vietnamese furniture market. The
kitchen furniture segment includes kitchen appliances and other wooden
furniture. The reason for the rise of the kitchen furniture segment, analysts have
based on the increase in urbanization and kitchen remodeling as well as the
strong investment from the hotel industry units, manufacturers goods due to the
development of tourism.
Customers have strong brand preferences and high degrees of loyalty to

sellers. In the Vietnamese market, Delicants faces a large number of
distribution, retail and manufacturing businesses. Vietnamese brands account
for 80% of the market share of kitchen appliances: Happy Cook, Sunhouse

9


(accounting for a large market share, stable growth at a high level), Nha Xinh
furniture, …
Besides, there are also many foreign brands such as: Bosch, IKEA,
Munchen, Electrolux (Global group from Sweden)
Buyer costs to switch brands are low. Switching costs include not only
monetary costs but also the time, inconvenience, and psychological costs
involved in switching brands.
Therefore, the competitive rivalry in the industry is high.
• Conlusion
In summary, in the above 5 competitive forces, the threat from
competitive rivalry in the industry is the largest. Besides, it is also necessary to
pay attention to the threat from buyers' bargaining.
v Strategic group Map

Through research, Delicants choose to stand in the middle position of
localities and prices as well as quality for those reasons below.
First of all, the strategic group map displayed the different market or
competitive positions that rival firms occupy in the industry mostly in low prices
and many localities so Delicants found out that we need to avoid that part of the

10

market. Because Delicants know that some strategic groups are more favorably
positioned than others because they confront weaker competitive forces or
because they are more favorably impacted by industry driving forces.
Furthermore, if we set a high price for our product, it’s hard to compete
with IKEA or JYSK when we have built customers’ trust for a long time with their
reputation. It also leads to a conclusion that the middle position can be more
attractive and potential for us to consume our product. Therefore, we would like
to go for the middle position for both.
v SWOT analysis
• Strength
Monopoly: Delicants has its own monopoly on technique so the dishwashing machine has unique and particular functions. Besides, Delicants with
monopoly profit can also use its profit to invest in new products and
technologies
Wide price range: There are various types of dish-washing machines
with corresponding prices. As a result, every consumer in all classes can afford
a Dilecants dishwasher.
Human resources: Delicants workforce is talented, creative and welltrained. Young and qualified employees have a good knowledge of consumers
and the market. They do not hesitate to face and overcome challenges and
provide optimal solutions.
Suitable with global situation: With the outbreak of the Covid 19
epidemic, the demand for cleanliness and safety is focused and concerned by
many customers. Understanding that situation, the disinfecting feature of the
dishwasher can meet the needs of customers as well as be suitable for global
situations.
• Weakness
Weak brand awareness: Due to the fact that Dilecants is a start-up
company, it may not be a recognizable brand in the domestic market.
Lack of loyal customers: Delicants has newly appeared in the furniture
market as well as its coverage is not high, which leads to difficulty to approach
and build relationships with customers.

Inexperience: Although Delicants are young, ambitious and well-trained,
they still have a lack of skills and experience to deal with Marco problems.
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Limited workforce: Dilecants just has nearly 20-40 employees so an
employee has to work fields of stuff. As a result, he/she sometimes can not
handle or finish deadline on time.
• Opportunities
Match the global interest: People have been interested in equipment or
interiors which make their houses clean and safe during the COVID-19
pandemic. Delicants’ product function -the disinfecting feature - can match the
global interest.
Demand for accommodation especially apartments and condominiums:
The demand for housing has increased along with the demand for furniture and
equipment installation. Taking advantage of this, Delicants can cooperate with
housing and real estate service providers to promote its products.
Original dish – washing is already popular: These days, consumers pay
attention and are interested in dishwashers. Capturing this behavioral
psychology, Delicants dish-washing machine can easily attract customers.
• Threats
Be copied by stronger competitors - high price: Although Delicants is a
monopoly company about the special function of dishwashers, product designs
and features can still be conceptualized, imitated and developed by large and
branded companies, which are familiar with the consumers.
Be copied by competitors from China - low price and quality: Some China
companies tend to imitate exactly their competitors’ products. They also have
the capability to significantly undercut prices offered by competitors over a wide
range of products.
Therefore, Delicants needs to concentrate on both R&D and Marketing to

improve its product.
Strength:
Weakness:
• Monopoly
• Weak brand awareness
• Wide price range
• Lack of loyal customers
• Human resources
• Inexperience
• Suitable with global
• Limited workforce
situation
Opportunities
S-O
• Match
the
•
global interest
• Demand
for

W-O
Human resources Suitable with global
situation - Match the

12

•

Weak brand awareness Inexperience - Original

dish-washing is already


•

accommodatio
n
especially
apartments
and
condominiums
Original dishwashing
is
already
popular

global interest
→
Training
and
emphasizing human
resources
to
improve
the
technology
and
implementation
is
required to meet the

practical needs from
customers
•

popular
→ Based on the existing
popularity
that
customers
have
acknowledged in dishwashing
machines,
Delicants should focus
on
the
sterilization
feature to add more
value to it.
Lack of loyal customers
Demand
on
accommodation
especially apartments
and condominiums
→ Delicants should
concentrates
on
building
strong
relationships

among
potential
customers
who are in demand of
purchasing
accommodation.
Collecting data from
real-estate businesses
should be considered.

S-T
•

Threats:
• Be copied by
stronger
competitors high price
• Be copied by
competitors
from China low price and
quality

•

Monopoly
Be
copied by stronger
competitors
→ Delicants should
copyright

registration for the
product after the
W-T
finalizing
product
•
course has been
proceeded.
→ Focus on R&D
resources
to
constantly develop
technology.
human resources be
copied
by
stronger
competitors
→ Delicants should
encourage
fair
bonus
policy
to
ensure bonuses and
benefits to retain
workforce, maintain
healthy
work

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Weak brand awareness be copied by stronger
competitors
→ In-store marketing
should
strongly
influence the customer’s
sight by holding the
experience program at
the
distribution
channels.


environment.

v Competitors analysis
According to the strategic group map, the most direct competitor is Nha
Xinh, which competes with price and geographic coverage.
• Nha Xinh’s Current Strategy
How is the competitor positioned in the market?
Nha Xinh was established in 1999 as a furniture brand under AA
Corporation. It has become an icon of style and quality.
Over the past decade, it has been honored to provide Vietnamese
customers with a wide range of diverse and rich interior equipment.
Nha Xinh always upholds the criterion of focusing on the design of novel
products in order to build and strengthen the brand's top – quality standards
What is the basis for its competitive advantage?
- Nha Xinh has a variety of products. The brand has introduced a new

product per month.
- It has qualified package service and customer's buying process:
consulting, design, transportation, installation, warranty.
- Customers can access detailed information and hands-on images about
living spaces and interiors via Nha Xinh’s Website; Facebook; Youtube or
Instagram.
- It is also was known as a perennial furniture brand in Vietnam.
What kinds of investments is it making (as an indicator of its
expected growth trajectory)?
Currently, Nha Xinh focuses on developing a long-term and sustainable
investment strategy. The company invests in R&D to improve its product’s
meaning and function. Nha Xinh’s interiors will be made from recycled or ecofriendly materials in the near future.
• Objectives
The domestic market is the "blue ocean" that Nha Xinh targets in the
interior. Nha Xinh brand wants to honor Vietnamese goods, target the middle
and high-end segments, and be proud of manufacturing in Vietnam, with a
market share of 60-70% of the domestic market.

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- The core point for the entire development orientation of Nha Xinh is to
always be faithful to paying attention to Nha Xinh’s products.
- The first spreadhead strategy is the design. Nha Xinh follows each
individual collection, sofa, which comes with a table, bed and cabinet so that
consumers entering Nha Xinh can imagine what it would be like to use a set of
furniture to put in their home, creating each different aesthetic taste.
- The other strategy is to spend up to 60% of retail products are
processed from Nha Xinh factories, enhancing the strategic capacity of most of
Nha Xinh's products to be designed and produced by Vietnamese people.

• Resource and Capabilities
• Nha Xinh’s Strengths
- Product quality goes with aesthetics and uniqueness.
- Nha Xinh has a design team who are carefully selected domestic and
foreign employees.
- The store system, which is located in big cities in Vietnam, helps Nha
Xinh create a close relationship with customers and overcome the
disadvantages of distributors through intermediary trade.
- Nha Xinh has good brand strength. Nha Xinh is constantly present in
the top brands in Vietnam voted by consumers.
• Nha Xinh’s Weakness
- Nha Xinh is good at designing and selling products in Vietnam but it
does not manufacture in Vietnam, which makes it difficult for Nha Xinh to
ensure product availability.
- Import tax causes Nha Xinh's products to incur production costs
- Although the number of Nha Xinh stores has increased, it is still very
small compared to the demand of consumers
Which capabilities is it making efforts to obtain?
Nha Xinh is trying to be self-sufficient in materials for its products in
order to minimize production costs.
v Assumption
What do the competitor’s top managers believe about their strategic
situation?

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In terms of Nha Xinh top managers’ belief, the strategic situation is quite
positive with maintaining a strong furniture brand in Vietnam and a big ambition
to conquer the Southeast Asian market.

How will their beliefs affect the competitor’s behavior in the
market?
Nha Xinh’s beliefs will make the competitors falter and confuse.
Therefore, Nha XInh’s competitors will have to research and develop their
products’ features and services to have a good competitive advantage and
differentiate strategies.
• Strategic moves and outcomes
Facing a long-standing and prestigious furniture brand like Nha Xinh, a
start-up company will have to highlight its advantages in products as well as
build a close relationship with loyal customers.
v Competitive strategy: Broad differentiation
• Strive for innovation and technological advances
To meet customers’ needs in a unique way by creating new technology
supplies, Delicants aims to be the first-on-the-market home furniture to master
the art of sterilization in everyday use via family meals.
- Delicants invests an abundant amount in R&D activities and expertises
to innovate and pursue continuous quality improvement. The first version of the
cupboard will be analyzed intensely and carefully executed real experiences in
different processes to bring the best value for the customers. Step by step, will
expand the product range through more updated versions in the future.
Delicants’s products are based on technology to differentiate widely, hence,
investing in technological advances is the first priority.
- Seeking high quality inputs is also a way to develop the quality for
Delicants. From flexible manufacturing systems to imported goods, Delicants is
actively searching for potential investors and contractors to cooperate.
• Increase marketing and brand-building activities
Beside the marketing channels were mentioned, Delicants focuses in
delivering superior value in our way of marketing:
- Highlight the tangible feature - sterilization system and incorporate
intangible features - awareness of the pandemic. Delicants targets the customer

insight that each individual is being threatened by Covid-19, they are strongly
16


willing to purchase medical needs to ensure their health. For that reason, we
provide the essential must-have in this state-of-art, the sterilization, from a more
particular aspect in daily meals from your own kitchen.
- Attracting in-store consumers’ concentration is certainly important for
Delicants. We focus on ad content that emphasizes our outstanding sterilization
feature and also deliberately train for Delicants’s sellers in sales presentations
and appearance in order to make the potential buyers aware of the
professionalism and gradually realize that Delicants has prestigious customers.
Signaling value of Delicants is particularly important because first impressions
are the decision call when buyers are making a first-time purchase and are
unsure what their experience with the product will be.

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PART B
1. A global standardization stategy
v Reasons
Firstly, Delicants company has a long-term plan to enter the Asian
market, which has an increased number of consumers who bought interiors. To
compete with other international competitors, we have to “think global - act
global”.
Secondly, our company intends to increase our customer base, sell in
more overseas markets, and reduce costs via scale and scope economies.
Thirdly, there are a variety of perks that our company takes from a global
standardization strategy: the ability to transfer best practices across markets;

the innovation from knowledge sharing and capability transfer; the benefit of a
global brand and reputation.
Fourthly, this strategy also allows Delicants to replicate a successful
business model on a global basis efficiently or engage a high level of R&D.
v Implication
Delicants has to understand some of the strategy's components before
creating a global standardization strategy for their products. They include:
• A uniform brand
• Uniformity in packaging
• Identical products
• Standardized methods of advertising
• Synchronized sales campaigns
• Similar pricing across regions
• Concurrent product launches
There are eight steps that our company implies this strategy.
The first step is to settle on a special function of a product. Our dishes
machine has already had a unique function - Pressure meters for steam; water;
medical gases; compressed air and clinical vacuum; and heating ventilation and
air conditioning (HVAC) systems.
The next step is an in-depth understanding of target markets before
launching our global standardization strategy. Our market is Asian, which has

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different cultures, traditions and consumer behavior. Our company has to pay
attention to understanding Asian markets as carefully as possible.
The third one is to identify the country with business potential. Delicants
company needs to understand the laws governing businesses, norms and
acceptable payment modes in Asia.

The fourth step is to be aware of Delicants’ foreign competitors: Dewell;
Dezen; Freshhome; IKEA and so on. We should understand these competitors
and the strategies they used.
The following step is to set a list of specific and realistic goals to achieve
by standardizing our marketing approach. We have in mind a universal
message it intends to deliver to our clients when setting goals.
The sixth is that Delicants will ensure uniformity in branding. Our
company settles for branding signifiers to express our standardized message
effectively. The image, colors, sounds and logos used on the brand should be
consistent across the Asian regions.
The seventh step is to make a marketing plan. Our company will
celebrate an online competition called “Customize your own” to attract talented
designers and customers. “Customize your own” is about to design or decorate
own dishes washer. In this competition, we still spread our slogan - “Delicants
makes your house a home” and mission statement - “to provide extraordinary
health to people during their meals, especially during the Covid – 19 epidemic,
when residents are now aware of the harm of the bacteria which may exist in
their bowl.” Through the competition, our company and products can approach
a number of customers.
The final step is to ensure the approach in a practical way. We will
recognize that what worked in Vietnam may or may not be effective in a foreign
country. If consumers in all the target regions understand the product's usage
the same way, the standardization strategy becomes viable. If may not, we
should take time to find out the reasons and solutions.
2. Market
v Market overview
The Furniture market is divided into seven segments: Living Room
Furniture, Bedroom Furniture, Kitchen & Dining Furniture, Outdoor Furniture,
Home Office Furniture, Lamps and Lighting, and Floor Covering. Due to rising
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living standards and a higher income, consumers are replacing their furniture
more frequently. In 2021, the Furniture market realized total worldwide revenue
of US$673 billion, representing an annual growth of 12.2% compared to 2020.
The growth of the Kitchen & Dining Furniture segment is driven by
improvements in materials and designs which are used to provide consumers
with a wider range of products. Revenues accruing from this segment reached
US$81 billion in 2021; an increase of 11.5% in comparison to 2020.
International Organizations publish socio-economic statistics for more
than 200 countries. Excluding small economies (states with low population
density and few inhabitants, developing economies with very low per capita
incomes), the new countries have been selected by CSIL on the basis of the
size of the economy, and the importance of the furniture sector and its
contribution to the world furniture trade. The 100 countries constitute almost
90% of the world population and more than 95% of the world GDP. Aggregate
furniture production for these countries (at production prices, excluding retail
markup) is currently about US$ 420 billion. This means the inclusion of virtually
all countries that are significant to the furniture industry. After the expansion,
CSIL coverage includes 40 countries in Europe, 18 countries in the Americas,
21 in the Middle East and Africa, and 21 in Asia and the Pacific.

Table 1: Percentage breakdown of world furniture production, 2016
(Source: CSIL)
The main furniture producer is China, with 39% of world furniture
production. Other major furniture manufacturing countries are the US, Germany,
Italy, India, Poland, Japan, Vietnam, the UK, and Canada.

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Table 2: Major furniture exporting countries. Exports, 2010-2016.
(Current US$ billion)
(Source: CSIL processing of United Nations, Eurostat, and national data)
The main furniture exporting country is China, followed at a distance by
Germany, Italy, Poland, and Vietnam. A major new development is a decrease
in Chinese furniture exports in 2016. The fastest-growing furniture exporter
(from a low base) is Vietnam.
v Potential market
• China
After more than 20 years of rapid growth in the furniture industry, China
has now become the world’s largest furniture producer and exporter. According
to information released by the China National Furniture Association (CNFA),
there are 50 furniture manufacturing clusters in China, covering the six regions
of the Pearl River Delta (PRD), Yangtze River Delta (YRD), Bohai Rim,
north-eastern China, central China, and western China. The PRD is China’s
largest furniture manufacturing base with the highest furniture industry
concentration, the highest production output, and the strongest integrated
support capability. Next come to Fujian, Zhejiang, Jiangsu, Shandong, and
Shanghai, which have an edge in product quality and operations management.
In the YRD region, led by Shanghai, the furniture industry is developing rapidly,
with the highest average growth rate in the country. The northern and
northeastern regions, with Beijing at the center, have a sound furniture industry

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base and rich wood resources. As for the central and western regions, the
furniture industry there is actively capitalizing on the opportunities arising from
urbanization.

With the advance of AI, big data, and 5G, smart household items may
become mainstream. Many countries are demanding reductions in carbon
emissions, and smart homes could go a long way to satisfying user needs in
this respect. Smart furniture can receive signals and make assessments
through sensing technologies, adjusting to offer better convenience and
comfort. Examples of smart furniture include dining tables that can monitor the
weight and body temperature of infants and tables that can adjust height
automatically in accordance with the height of a user. China’s smart furniture
industry is increasingly mature, and industrial parks for smart household
appliances are its main development mode. There are about 115 such industrial
parks countrywide, the majority of which are concentrated in Henan, followed by
Guangdong, Jiangsu, and Tianjin. According to iiMedia, China produced 801
million pieces of smart furniture in 2020, a year in which the market grew 11.4%
to RMB170.5 billion. It is thought that China’s smart furniture market could
exceed RMB200 billion in 2022.
• The USA
Apart from being one of the world’s largest furniture markets in terms of
furniture sales, the USA is a world’s leading furniture manufacturer and one of
the largest furniture exporters by value. In 2016, the USA exported over US$2.9
billion worth of furniture products to the global market, representing about 3.6%
of the world’s total furniture exports in that year, making the USA the world’s 6th
largest furniture exporter in 2016. Other major future markets such as Canada,
Mexico, China, UK, and Japan were some of the largest importers of USA’s
furniture products.
Furniture and mattresses made in the USA are constructed of durable,
safe materials. Most USA furniture makers source their wood from local forests,
which means that this furniture is also made sustainably. Look for furniture
made in the USA featuring sturdy hardwood frames and solid wood
construction. While most imported furniture is made in a factory on an assembly
line, furniture made in the USA is often hand-crafted by skilled artisans and

craftsmen. Take Amish made furniture, for example. This beautiful furniture is
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built by hand using old school, time-tested methods and tools that continue to
be used today. This furniture is built by craftsmen who have many years of
experience. Many have had furniture makers in their family for generations.
Mass-produced products built in a factory overseas don’t offer the character or
the same level of quality that handcrafted furnishings do.
The safety standards for furniture in the USA are basically the highest in
all over the world. Whether it is dangerous chemicals used in dyes or thin
materials used to make furniture frames, this can compromise the health and
safety of you and your family. In the United States, furniture manufacturers are
held to rigorous safety checks and standards that are put in place to protect the
consumer. These standards are put in place to protect the buyer and ensure
that customers are getting high-quality furniture that won’t cause harm to the
user. Aside from the safety of the product itself, American-made furniture
matters to the people who make it.
3. Entry strategy
v Joint venture strategy
Delicants believes Joint Venture Strategy is the optimal choice.
Delicants understands the potential of the company, wants to develop a
fast – growing business while not being able to do it alone. Therefore, Delicants
believes that choosing the joint venture strategy is the most reasonable choice
at the moment, here are the reasons:
- Delicants can benefit immensely from a foreign partner’s familiarity with
local government regulations, its knowledge of the buying habits and product
preferences of consumers, its distribution channel relationships, and so on.
- Starting a joint venture is a great way to save money or split costs: By
joining forces in producing components, assembling models, and marketing

their products, Delicants can realize cost savings not achievable with our small
volumes.
- We can use joint venture partner's customer database to market our
product.
- Upscale production: This is a great opportunity for Delicants to learn
and supplement the expertise gained from conducting joint research, sharing
technological know-how, studying each other's production methods and

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