Sao Nam An corporations competitive strategy for Brother printer Vietnam

TRƯỜNG ĐẠI HỌC MỞ TP. HCM UNIVERSITÉ LIBRE DE BRUXELLES
HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL

MBAVB4




NGUYN TH HỒI TRANG



Sao Nam An Corporation’s competitive strategy
for Brother printer Vietnam




MASTER PROJECT
MASTER IN BUSINESS ADMINISTRATION
(PART-TIME)

Ho Chi Minh City
(2011)

Page | i
DECLARATION
This thesis is a presentation of my original research work. Wherever contributions
of others are involved, every effort is made to indicate this clearly, with due
reference to the literature, and acknowledgement of collaborative research and
discussions.
The work was done under the guidance of Dr. LE THAI THUONG QUAN, under
the framework of the the Master program in Business Management – The join
Masters Program between Ho Chi Minh City Open University (Vietnam) and
Solvay Brussels School (Belgium). The work was completed in Feb 2012, in Ho Chi
Minh City - Vietnam
(candidate’s name and signature)

NGUYEN THI HOAI TRANG
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Page | ii


ACKNOWLEDGEMENT

This thesis can’t be completed in solidity. There are many people I would like to
thank them for their enthusiastic support throughout my research.
Firstly, I would like to express my warmest thank to my supervisor Dr. LE THAI

THUONG QUAN for his valuable guidance and advices throughout my study. He
was always supporting me with kindness and care.
I would like to formally thank Mr Khanh –Sale manager of Sao Nam An JSC, for
helping me understand his company’s business and Ms. Thuy - CFO of Sao Nam
An JSC for providing me with necessary information.
I wish express gratitude to all my classmates MBVB3. I wish to say that the last
two years have been quite an experience to me and all of you have made it for me.
Next I want to thank to all the members of my dear group 4A and 4B, I want to say
that we were always together, supporting each other in our assignments, I feel lucky
to be your friend.
Moreover, I would like to thank all the members of the Examination Committee for
giving me your time and your valuable advices for me to improve my study.
On my personal side, I want to express my endless love to my family, who have
supported me in all imaginable ways.
HCM City, December 2011
NGUYEN THI HOAI TRANG
Page | iii


TUTOR’S COMMENTS


The topic is practical and the author has shown her best effort to finish this project.
In current state, both the content and the presentation are still very weak. However,
take into account her situation and with the recognition of her efforts, I confirm that
I agree for this project to be allowed to go to public presentation.

Le Thai Thuong Quan
Page | iv


EXECUTIVE SUMMARY
Sao Nam An is a business company in distributing office equipments, and
belongs the Sao Nam Group with major market in Ho Chi Minh City and
neighborhoods. Sao Nam An is one of the exclusive suppliers of Brother printers in
Vietnam. Besides, it is also the distributor of some other companies such as
Konical, Panasonic, SanYo.
In the difficult context of economics, and under the pressure of the supplier
that Brother want to increase the market share of printer in Vietnam, Sao Nam An
need to research and give out a efficient competitive strategy in order to develop
market of Brother’s printers and multi-function printers. This is also the major
research of the thesis
The thesis introduces basically operation, personnel as well as some financial
information in order to make readers have a general view of current status of Sao
Nam An,. Then the author applies analysis tool “five forces” of M.Porter to analyze
not only the industry but also current competitors of Sao Nam An. Besides, the
author also analyzes the potential abilities inside as well as advantage of Sao Nam
An in order to give out appropriate solutions
After analysis, based on specific feathers in business that supplier like Sao
Nam An can not change products it distributes in a close market like Southern area,
focus differentiation strategy of M.Porter is the optimal solution. It is the strategy to
break into the current market, and is to find out how to develop the share of
products through marketing solutions. In order to carry out this solution, the author
analyze and determine the areas which Sao Nam An need to make different:
expanding the distribution channel, improving the quality of services, co-operating
with supplier Brother to give out marketing strategy in order to popularize the trade

name, to attract the customers and apply ERP system into company management to
reduce the cost and bring more benefits. The detail activities needed to deploy the
strategy will be presented specifically in functional strategies such as personnel,
marketing and advanced technology.
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TABLE OF CONTENT
CHAPTER 1 : INTRODUCTION 1
1. The need of research 1
2. Scope of the thesis 3
3. Structure of thesis 3
CHAPTER 2 : THEORETICAL BACKGROUND 4
1. What is competitive strategy? 4
2. Industry analysis 4
3. Type of strategies 8
CHAPTER 3 : CURRENT SAO NAM AN SITUATION 12
1. Introduction about Sao Nam Group 12
2. Introduction about Sao Nam An 14
2.1. History 14
2.2. Business function 15
o Wholesale 16
o Retailsales 16
o Project 16
o Warranty: 17
o Maintenance 17
o Equipment renting 17
o Traning/consultancy 18
2.3. Focused product list 18
2.4. Human resource 18

2.5. Distribution channels 21
2.6. Customer Segments 21
a. Wholesales 21
b. Project 22
o Sales 22
3. Industry analysis 25
3.1. Five Porter 25
a. Barries to entry (high) 25
b. Substitue products (high) 26
c. Bargaining power of buyers (high) 27
d. Bargaining power of suppliers (low) 29
e. Rivalry among existing competitors (high) 29
4. Competitor analysis 31
5. Internal factors 35
5.1. Value chain 35
5.2. SWOT 38
6. Product analysis 39
6.1. Secondary data 40
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6.2. Concluding 42
7. Customer analysis 42
CHAPTER 4 : COMPETITIVE STRATEGY TO INCREASE
COMPETITIVE ADVANTAGES 45
1. Identify strategy 45
2. Choosing competitive strategy 46
2.1. Cost leadership 48
2.2. Differentiation 49
3. Steps in Differentiation 49

4. Function strategies 56
4.1. Strategy towards Customers and Supplier 56
a. Customers 56
b. Brother Supplier 58
4.2. Marketing 58
a. Overall marketing strategies 59
b. Product 59
c. Price 60
d. Place 60
e. Promotion 61
4.3. Human resource 62
4.4. Techonology innovation 65
APPENDIX 68
1. Macro environment 68
1.1. Macro economy 68
1.2. Overview domestic printer market 69
1.3. Analysing financial situation 72
2. Financial items 74
3. Customer list 75
4. Distribution channel 77
5. Product lists 79
PREFERENCES 81
Page | vii


Figures

Figure 1: Income of categories 2
Figure 2: Five forces Porter model 5
Figure 3: There Generic Strategies 9

Figure 4: Differentiating Features That Raise the Performance a User Gets 11
Figure 5: Structure Organization of Sao Nam Group by area 13
Figure 6: Organization chart of Sao Nam An 19
Figure 7: Percentage distribution of employees 20
Figure 8: Increase of employees in years 21
Figure 9: Sale volumes of Sao Nam An in 2008-2010 23
Figure 10: Sale volumes of product categories in 2008-2010 24
Figure 11: Printer sales distribution by type of business 2010 25
Figure 12: Company organization structure (offered model) 64


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III. Lý thuyt áp dng 3¶
IV. Cu trúc ca lun vn 3¶
CHAPTER 1 : Tình hình kinh doanh ca
công ty Sao Nam Song Han 4¶
1. Gii thiu v công ty Sao nam 4¶
2. Kinh doanh và tình hình tài chính ca
chi nhánh à Nng _ Công ty Sao Nam
Sông Hàn 8¶
CHAPTER 2 : Tài sn 8¶
CHAPTER 3 : Nhân lc 8¶
CHAPTER 4 : Hình thc vn chuyn 8¶

CHAPTER 5 : Phân tích các yu t tác
đng 10¶
1. Môi trng v mô 10¶
2. Môi trng kinh doanh 11¶
3. Ni lc tác đng 12¶
CHAPTER 6 : iu tra nhn thc và
hành vi tiêu dùng ca khách hàng l và
doanh nghip 13¶
1. Mô hình kho sát 13¶
2. Mu kho sát 13¶
3. Bng câu hi 13¶
4. Phân tích kt qu 13¶
CHAPTER 7 : Mt s gii pháp nâng cao
nng lc cnh tranh ca công ty 13¶
Page | 1


CHAPTER 1 : INTRODUCTION
1. The need of research
Sao Nam An is a subsidiary company of Sao Nam Group, operating in office
equipments business with the main markets in HCM city and other neighbour
provinces. The firm is one of the two official distributors of Brother in printers and
multi-function machines in Viet Nam. Moreover, Sao Nam An is also the exclusive
distributor of Konical Molnital in Photocopy marchines and of Panasonic, Sanzo in
cameras, projectors…
Based on the report of IDC, the market share of Brother in printers in
Vietnam is still small with approximately 2% by 2010. According to its
development strategy for the next time, Brother will especially take care of
emerging markets and strive for the position of the second leading vendor in
VietNam. Brother hopes that its sale rate in developing countries will go up to 64%

by 2015 from the level of 50% by 2008. And for Vietnam, Brother expects that the
market share will increase to 20% in future, this increase includes 15% in mono
laser printer and 5% in inkjet and multifunction machines.
For this reason, Brother is going to invest more capital to raise its market share
in Vietnam. In fact, Brother has already established many warranty centers in HCM
city, Ha Noi, and a Nang. In order to achieve the goal, Brother requires its two
distributors in Vietnam, Sao Nam Group and Silicom, to review their development
strategies. Hence, as an official distributor, this is not only an opportunity for Sao
Nam An to receive more support from Brother Supplier but also a challenging
mission for it if Sao Nam An wants to keep its monopoly distribution position,
especially when Brother Products have occupied more than 30% of Soeco’s
portfolio of and have average growth rate of 75 percent every year.
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0
10
20
30
40
50
60
70
80

90
Máy In,
Fax, Da
Nang
Brother
Máy
photocopy
Konical
SanYo
CCTV
SanYo LCD
Project
Sn phm
khác
Billions
2008
2009
2010

Figure 1: Income of categories
While the echo of financial crisis in 2008 has not reduced absolutely, Vietnam
economy has been facing a lot of difficulties in subsequent years. The current
Europe debt crisis with tightening budget policies of European governments and
the economic depression of America…have had a significant negative effect on our
home market. In addition, inflation, exchange and interest rate are too high bulding
up difficulty to firms. The Input costs have been raising whereas the output has been
decreasing due to less consuming of customers in recent years. As we can see,
internal and external difficulties have surrounded the firms. The factors mentioned
above have brought many small companies in capital to the verge of bankruptcy. At
this point, the government has promulgated many policies to reduce the

governmental budget expense to help the economy go through the difficult
situation. According to the Economic Committee report, by the first six months of
2011, there were 30% firms going bankrupt, many other survivers had to reduce
their production sizes. Hence, it is necessary for companies to review their internal
forces and restructure themselves to overcome this tough period.
Under the difficult situation of present domestic economy, along with the
critical competitive situation in Vietnam market and Brother‘s heavy requirement,
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Sao Nam An understands that it is neccessary to review the developing strategy and
to consolidate the internal forces in order to keep its sole distribution position and to
expand its market.
In this study, researcher will establish a competitive strategy for Brother
Products containing laser printer to help Sao Nam An complete their mission.
2. Scope of the thesis
The scope of this thesis will be limited to the analysis in current operating
situation of Sao Nam An and its financial capability to propose some competitive
advantage solution in order to increase its competitive competence level in printer
and MFC sector. The main markets of Sao Nam An is Ho Chi Minh city and
neighbour provinces including Binh Duong, Vung Tau, Dong Nai, Tay Ninh, Binh
Phuoc, Ninh Thuan.
3. Structure of thesis
The thesis has four chapters, chapter one introduces why the project becomes an
objective to be researched and the scope of the study. Chapter two brings about the
theoretical background that the researcher applied. The introduction about Sao Nam
An Company and its currency situation are illustrated in chapter three. Finally,
chapter four provided a particular competitive strategy to help Sao Nam An

increased the market share of Brother printer in VietNam market.

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Công ty là nhà phân phi chính thc ca
máy in Brother ( ti Vit Nam có 2 nhà
phân phi chính thc ca Brother) và nhà
phân phi đc quyn máy photocopy ca
Konica molnital. Ngoài ra công ty còn là
nhà phân phi chính thc ca Panasonic,
Sanzo vi h thng camera, máy chiu.¶
Công ty hot đng trên 3 mng : bán s vi
h thng đi lý trãi rng khp c nc ,
bán l và d án
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<#>Tóm tt lun vn¶
<#>¶

 tài lun vn đa ra mt s gii pháp
nâng cao tính cnh tranh ca doanh nghip
ti khu vc min Trung đ t đó giúp nhà
qun tr có c s đ m rng th trng.
Trc tiên là phân tích môi trng v mô (
phân tích s phát trin ca ngành) và môi
trng v mô bng phng pháp phân tích
nm ngun lc ca Giáo s M.E Porter.¶
Sau đó, lun vn gii thiu v công ty,
hin trng kinh doanh và ni lc hin ti
bao gm phân tích các ch s tài chính cho
bit “sc khe” hin ti ca công ty. ¶
 nâng cao đc tính cnh tranh, ta phi
hiu đc nhu cu ca ngi mua và cm
nhn ca ngi dùng cui v công ty cng
nh hiu đc v trí ca công ty trong th
trng. Lun vn s đa ra 2 kho sát :
mt là kho sát ngi dùng cui và mt là
kho sát các doanh nghip. ¶
T kt qu kho sát và các phân tích 
trên, ngi vit đa ra mt s gii pháp đ
nâng cao tính cnh tranh ca doanh
nghip.¶
<#>Lý thuyt chin lc cnh tranh tng
quát ca M.Porter¶
<#>Chin lc chi phí thp¶
<#>Chin lc khác bit hóa¶
<#>Chin lc tp trung¶
<#>Lý thuyt ¶
Deleted: Cu trúc ca lun vn

Deleted: Chng 1: Tình hình kinh
doanh ca công ty Sao Nam Sông Hàn¶
Chng 2 : Phân tích môi trng kinh
doanh¶
Chng 3: Kho sát¶
[1]
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CHAPTER 2 : THEORETICAL BACKGROUND
The reality of the world economy shows that there is an intimate relationship
between the development of a firm and its environment, its internal forces as well as
its developing strategy. In order to exist and develop, each firm has to exploit as
fully as possible its competitive advantages. The theories that are presented below
will be the basement to analyse current situation of Sao Nam An and build
competitive strategy to expand Sao Nam An’s business market.
First of all, it is a requirement to understand the strategy concept and the
importance of strategy planning to a company’s development. After that, the thesis
will proposed which tools to analyse a firm’s situation and how to build an effective
strategy. In this thesis, the reseacher will apply M.E Porter theory as her research’s
basement.
1. What is competitive strategy?
There are a lot of concepts of management theorist to define strategy.
However, strategy is basically about two things: deciding where you want your
company to go, and then how you want to take it there.
According to Dr M.E Porter, competitive strategy is the search for a favorable
competitive position in an industry, the fundamental arena in which competition
occurs. Competitive strategy aims to establish a profitable and sustainable position
against the forces that determine industry competition.
2. Industry analysis

Porter’s theory emphasizes the improtance of industry analysis in the process
of establishing business strategy. Porter developed a model called “Five forces
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strategy.¶
In fact, no industries could be similar to
others in aspects of profitable ability.
Some industries bring low profit like steel
and paper industries while others could
bring high benefits like cosmetic and gas
industries. Some industries are very
difficult to enter such as mining,
petroleum, aircraft manufacture, medicine,
electronics industries because they are
required an initial investment in
technology, experience and a great of
capital. Some industries have few barriers
such as food and fashion industries. This
leads to the fact that the quantity and size
of companies are different in different

industries. Since then, the level of
competition among competitors in each
sector is also different. One of the most
popular theories, the most obvious
analysis of the forces of competition and
industry structure that makes the "5
Forters" by Michael Porter. ¶
According to M.E Porter, there are two
basic types of competitive advantage a
firm can posses: cost leadership or
differentiation. Two competitive
advantages combined with the scope of
activities for which a firm seeks to achieve
them lead to three generic strategies for
achieving above-average performance in
an industry: cost leadership,
differentiation, and focus. ¶
 to ra đc mt li th cnh tranh so
vi các đi th, công ty phi chn la mt
trong ba chin lc trên đ phát trin, to
dng v th trong dài hn và to ra kt qu
kinh doanh vt tri cho mình. Mi mt
chin lc đu có nhng thun li cng
nh ri ro riêng, điu quan trng ti u là
la chn đc mt chin lc cnh tranh
phù hp đ giúp công ty có li nhun cao.¶
[2]
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model” which helps to identify the features of industry that determines the strength
of the competitive forces and hence industry profitability.
This analytical technique will help a firm analyze its industry as a whole and
predict the industry’s future evolution to understand its competitors and its own
position, and to convert this analysis into a competitive strategy for a particular
business.

Figure 2: Five forces Porter model
The five competitive forces are entry, threat of substitution, bargaining power
of suppliers, bargaining power of buyers, and rivalry among existing competitors.
Now let’s look at each of these five forces in more detail.
• Threat of new competition
Profitable markets that yield high returns will attract new firms. This results in
many new entrants, which eventually will decrease profitability for all firms in the
industry. Unless the entry of new firms can be blocked by incumbents, the abnormal
profit rate will tend towards zero (perfect competition).
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The threat of entry into a industry depends on the barriers to entry and coupled
with the reaction from existing competitors that the entrant can expected. There are
six major sources of barriers to entry: economies of scale, product differences,
capital requirements, switching costs, access to distribution channels, cost
disadvantages independent of scale like proprietary product technology, government
subsidies…
• Threat of substitute products or services

The existence of products outside of the realm of the common product
boundaries increases the propensity of customers to switch to alternatives. Note that
this should not be confused with competitors' similar products but entirely different
ones instead. For example, Pepsi is not considered a substitute for Coke but water,
tea, and coffee are.
− Buyer propensity to substitute
− Relative price performance of substitute
− Buyer switching costs
− Perceived level of product differentiation
− Number of substitute products available in the market
− Ease of substitution. Information-based products are more prone to
substitution, as online product can easily replace material product.
− Substandard product
− Quality depreciation

• Bargaining power of customers (buyers)
The bargaining power of customers is also described as the market of outputs:
the ability of customers to put the firm under pressure, which also affects the
customer's sensitivity to price changes.
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¶
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− Buyer concentration to firm concentration ratio
− Degree of dependency upon existing channels of distribution
− Bargaining leverage, particularly in industries with high fixed costs
− Buyer volume
− Buyer switching costs relative to firm switching costs
− Buyer information availability
− Availability of existing substitute products
− Buyer price sensitivity
− Differential advantage (uniqueness) of industry products
− RFM Analysis
• Bargaining power of suppliers
The bargaining power of suppliers is also described as the market of inputs.
Suppliers of raw materials, components, labor, and services (such as expertise) to
the firm can be a source of power over the firm, when there are few substitutes.
Suppliers may refuse to work with the firm, or, e.g., charge excessively high prices
for unique resources.
− Supplier switching costs relative to firm switching costs
− Degree of differentiation of inputs
− Impact of inputs on cost or differentiation
− Presence of substitute inputs
− Strength of distribution channel
− Supplier concentration to firm concentration ratio
− Employee solidarity (e.g. labor unions)
− Supplier competition - ability to forward vertically integrate and cut out the
BUYER

• Intensity of competitive rivalry
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For most industries, the intensity of competitive rivalry is the major
determinant of the competitiveness of the industry.
− Sustainable competitive advantage through innovation
− Competition between online and offline companies
− Level of advertising expense
− Powerful competitive strategy
3. Type of strategies
In fact, no industry can be similar to others in profitibility. Some industries
such as steel and paper industries gain low profit while others like cosmetic and gas
industries have high profit earning. Some industries have high entrance barrier such
as mining, petroleum, aircraft manufacture, medicine, electronics industries because
these industries require the entrants heavy initial investment in technology, a lot of
experience and a great deal of capital. Some other industries have low barriers such
as food and fashion industries. This leads to the fact that the quantity and size of
companies as well as the level of competition differ from industry to industry. Since
then, the levels of competition in different areas are also various from each other.
According to M.E Porter, there are two basic types of competitive advantage a
firm can posses: cost leadership or differentiation. Two competitive advantages
combined with the scope of activities for which a firm seeks to achieve them lead to
three generic strategies for achieving above-average performance in an industry:

cost leadership, differentiation, and focus.
In order to create competitive advantages, a firm has to choose one out of three
general strategies to establish its position in long term and create outstanding
business results. Each strategy has its own advantages and difficulties, the firm’s
mission is to find out the most suitable strategy which helps to gain high profit.
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Figure 3: There Generic Strategies


• Cost leadership strategy
This strategy is to achieve overall cost leadership in an industry through a set
of functional policies aimed at this basic objective. Cost leadership requires
aggressive construction of effcient-scale facilities, vigorous pursuit of cost
reductions from experience, tight cost and overhead control, avoidance of marginal
customer accounts and minimization in areas like R&D, service, sales force,

advertising, and so on.
Having a cost-leadership position yields the firm above-average returns and
defends the firm against all five competitive forces in its industry. Becauses, low-
cost position places the firm in a favorable position vis-à-vis substitutes relative to
its competitors, provides the flexibility to cope with input cost increases and creates
an entry barrier in term of cost advantages.
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A firm that wants to apply this strategy successful often requires a high
relative market share or heavy capital investment and other advantages, such as
favourable access to raw materials.
• Differentiation
In contrast to the cost leadership strategy, implementation of a differentiation
strategy means that value is provided to customers through the unique features and
characteristics of a company's products or services rather than by the lowest price.
Because differentiated products or services satisfy customers' unique needs or
preferences, companies can charge premium prices for differentions.
For the company to be able to outperform its competitors and earn above-
average returns, the price charged for the differentiated product must exceed the
cost of differentiation. In other words, the price charged must exceed total product
cost. Because of this, the differentiated product's premium prices generally exceed
the low price of the standard product.
Companies that follow a differentiation strategy concentrate or focus on
product innovation and developing product features that customers value rather than
on maintaining the lowest competitive price (as is the case for the cost leadership
strategy). In order to successfully application of a differentiation strategy, a
company must consider its value chain of primary and secondary activities and

effectively link those activities as illustrated in Figure 4.
Differentiating Features That Raise the Performance a User Gets
To enhance the performance a buyer
gets from using its product/service, a
company can incorporate features
and attributes that
Provide buyers greater reliability,
durability, convenience, or ease of
Meet the buyer's needs and
requirements more completely,
compared to competitors' offerings.
Give buyers the option to add on or
to upgrade later as new product
versions come on the market.
Page | 11


use.
Make the company's product/service
cleaner, safer, quieter, or more
maintenance-free than rival brands.
Exceed environmental or regulatory
standards.
Give buyers more flexibility to tailor
their own products to the needs of
their customers.
Do a better job of meeting the
buyer's future growth and expansion
requirements.
Figure 4: Differentiating Features That Raise the Performance a User Gets

• Focus
The generic strategy of focus rests on the choice of a narrow competitive
scope within an industry. The focuser selects a segment or group of segments in the
industry and tailors its strategy to serving them to the exclusion of others.
The focus strategy has two variants.
(a) In cost focus a firm seeks a cost advantage in its target segment, while in
(b) differentiation focus a firm seeks differentiation in its target segment. Both
variants of the focus strategy rest on differences between a focuser's target segment
and other segments in the industry. The target segments must either have buyers
with unusual needs or else the production and delivery system that best serves the
target segment must differ from that of other industry segments. Cost focus exploits
differences in cost behaviour in some segments, while differentiation focus exploits
the special needs of buyers in certain segments.
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CHAPTER 3 : CURRENT SAO NAM AN SITUATION
1. Introduction about Sao Nam Group
Sao Nam Group has six subsidiary companies operating in perigraphy
distribution business such as copier, camera-assess system, printer, MFC … of
many famous manufactures on the nation scale including Brother, Konical Minolta,
Sanyo, Panasonic. Sao Nam Group has the nationwide agents network with more
than 350 companies. Up to this day, Sao Nam Group has had more than 50 product
categories distributed and 40 product categories had after-sales policies with above
50.000 units shipping.
Sao Nam Group has four subsidiary companies among which Sao Nam An
was the first subsidiary company to be founded. Each of these subsidiary companies
has its own legal personality, seals, independent economic accountng and self-
control about its finance and operates in limited boundary

1. Sao Nam An service commerce Limited Company is responsible for all
business in HCM city and South area of Vienam.
2. Sao Nam Ha Noi company is responsible for all business in HaNoi and North
area of Vietnam.
3. San Nam Can Tho company
4. Sao Nam Tien Giang company
5. Sao Nam Song Han Company in Da Nang is responsible for all business in
Da Nang and South-Middle area of Vietnam.
Base on the organizational structure, General assembly of shareholder is in
top of Sao Nam Group to control all business of all companies. On the one hand, the
board assigns operating boundary, field and board of directors for each company.
On the other hand, each company has its own financial ability, human resource as
well as development strategies. Sao Nam plays a role of a “parent company” and
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nam
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has duty to support other companies belonging to Sao Nam group on every business
aspect. An example showing Sao Nam’s parent company role is that whenever a
branch obtains a contract which goes beyond that brach’s financial ability, human
resource or experience, it will be supported by Sao Nam An to execute the contract.
Another example is that Sao Nam An pay for its branches all the costs of delivering

goods from Sao Nam An’s warehouse to its branches’ warehouses.
Besides, it’s only Sao Nam An who binds to the policy of manufactures
that is do not sell any product of other manufactures, others in Sao Nam’s
subsidiary companies don’t have to do such thing. Therefore, in case the exclusive
products Sao Nam An provides, for example printers of Brother, don’t meet the
configuration requirements of contractors, Sao Nam An can cooperate with its
subsidiary company in Group to add products of other manufactures like HP or
Canon printers which can satisfy the contractors’ requirements to the bidding
documents. In this case, Sao Nam Ab doesn’t break the rule since the subsidiary
company Sao Nam An cooperates with doesn’t have to bind to the policy of Brother
yet still executes the contracts successfully.

Figure 5: Structure Organization of Sao Nam Group by area
Sao Nam Tin Giang
Company
Ms. Phm Trúc Oanh
Director
Sao Nam Sông Hàn
Company
Mr. Trng Công Khanh
Director
Sao Nam Group (Soeco)
Shareholder
NGUYEN DUY BINH Chairman
Sao Nam Ha Noi
Company
Mr. inh Thanh Long
Director
Sao Nam An Company
MR.Lê Hoàng Thái

Director
Sao Nam Cn Th Company
Mr. Nguyen Duy Tan
Director
Page | 14


As we can see in the structure organization of Sao Nam Group above, the business
is organized by area. We can also see that, among the Soeco’s subsidiary
companies, Sao Nam An company occupies the highest hierarchy. And in the scope
of this thesis, researcher will focus only on Sao Nam An company’s operation and
build a competitive strategy solely for Sao Nam An with its operation market in
HCM city and South area of Vietnam.
2. Introduction about Sao Nam An
2.1. History
Sao Nam An company – the first company of Sao Nam Group - was founded
in 1997 when most of the indigenous business companies were affected badly by
Asian economic crisis. However, Sao Nam An has quickly developed and become
one of the leading companies in office equipments distribution thanks to the suitable
and intelligent development strategies of the company’s managers.
Sao Nam An has been the exclusive distributor for many world renowned
organizations. From the first days of the company, Sao Nam An was assigned to be
the unique distributor of Minolta photocopier which is now known as Konical
Minolta after the merging between the two companies Konical and Minota. Another
famous organization Sao Nam An has been the distributor of is Brother, Brother has
entrusted Sao Nam An with exclusive distribution of inkjet printers, lase printers,
fax machines, MFC multifunction printers and typewriters. What’s more, Sanyo
also highly appraises the deep experiences, the professional distribution, and the
broad service network of Sao Nam An Company that it has chosen Sao Nam An as
its monopoly supplier of Sanyo LCD projector, digital camera and observation

system camera – sound - access controller (CCTV).
Untill this day, Sao Nam An has the capital of 35 billions (Dong) and more
than 165 employees including well-educated managers, engineers and executives
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with deep experiences for more than 20 years. The company is operating in three
fields: wholesale with wide distribution channel, retailsale and project.
Currently,the number of Sao Nam An’s distribution agents in HCM city is above 35
2.2. Business function
Sao Nam An is the exclusive and official distributor of office equipments
manufactures including:
- Camera system – sound – assess control, projector … of Sanyo,
Panasonic
- Printers, fax, MFC Brother
- Photocopy, color photocopy of Konical Minolta
The company operates in three fields involving wholesale, retailsale and
projects in office equipments. Besides, the company also provides related services
such as
- Warranty
- Maintenance
- Equipment renting
- Traning/consultancy
Sao Nam An imports goods and transfers them to the company’s warehouse.
After that, Sao Nam An will distribute those goods to its branches all around HCM
city and the South area. Thereafter, each branch will again deliver those goods to
the agents in its area. For most of the long transferring such as from HCM to DN or
from HCM to HN, Sao Nam An will have goods transfered by train, and, for the

short ones such as from branches’s stores to agencies’ warehouses, or from
branches’ stores to customers, goods will be transferred by private strucks. In some
case, branches will receive goods from manufactures at maritime port.
Formatted
Formatted
Deleted: Công ty Sao Nam đc thành
lp vào nm 1997 trong bi cnh các công
ty kinh doanh đang chu nh hng nng
n bi cn khng hong kinh t Châu Á.
Tuy nhiên vi tm nhìn chin lc và
mong mun cung cp đn ngi tiêu dùng
dòng sn phm chuyên nghip giúp tit
kim thi gian, không gian và quan trng
nht là tit kim chi phí, tp th nhân viên
Sao Nam đã to đc ch đng vng
chc, đa Sao Nam nhanh chóng phát
tri
n, c chiu rng ln chiu sâu, và tr
thành mt trong nhng công ty dn đu
trong lnh vc Nhà cung cp thit b vn
phòng. Sao Nam nhanh chóng phát trin
c v chiu rng ln chiu sâu và tr thành
mt trong nhng công ty dn đu trong
lnh vc này.¶
Ngay t khi mi thành lp, Sao Nam đc
ch đnh là nhà phân phi duy nht dòng
sn phm máy photocopy ca Minolta,
hin nay đc bit vi thng hiu mi
sáp nhp là Konica Minolta
. Bên cnh đó Brother

cng tin tng và trao quyn phân phi
máy in laser, máy fax, máy đa chc nng
(MFC), máy đánh ch cho Sao Nam. Kinh
nghim và h thng phân phi , dch v
ca Sao Nam cng đc SanYo đánh giá
cao và y quyn phân phi duy nht ti
VietNam vi dòng sn phm đin t cao
cp nh Máy chiu SanYo LCD Project,
Máy chp hình k thut s, và H thng
camera quan sát (CCTV).¶
Vi danh mc hn 50 dòng sn phm hin
đang phân phi, và hn 40 dòng sn phm
đang có ch đ hu mãi vi tng cng hn
50,000 đn v sn phm đã đc bán, Sao
Nam group đc ban qun tr quyt đnh
m rng vi s ra đi ca các công ty
thành viên: ¶
Công ty TNHH TBVP Sao Nam¶
Công ty TNHH Thng mi dch v Sao
Nam An¶
Công ty TNHH Thng mi ài Nguyên¶
Công ty Sao Nam ti Hà Ni¶
Công ty Sao Nam ti Cn Th¶
Công ty Sao Nam Công ty Sao Nam Sông
Hàn¶
Page | 16


Business lines
o Wholesale

Being the official distributor of Japanese equipment Manufactures, Sao Nam
An has a wide agents network on the national scale. Its agents will retail electronic
equipments in their stores where customers come and buy products. These agents
buy products from Sao Nam An at wholesale price. Generally, they gain 15-20
percentages the value of orginal price for each product.
Some famous retailers of Sao Nam An are
- HCM : NguyenKim eclectronic suppermarket, Phan Khang supermarket,
Metro Suppermarket, Sang Tao computer company …
o Retailsales
Sao Nam An provides retail services but doesn’t pay much attention to this
field while it is worthy to do so. Retail customers are mostly firms, offices,
government departments whose relationship with Sao Nam An company are
established through bidding projects or created by the company’s sales team. Sales
team have the responsibility to broadcast the company’s image to the public by
sending new letters, quoting price of products or inviting people to company’s
seminars. After getting information of Sao Nam An, organizations as well as
individuals can give Sao Nam An orders for goods. However, this kind of business
is operated in silence because Sao Nam An doesn’t want to lose its credibility as a
distributor in the eye of its suppliers.
o Project
Project line is an important part in the business system of Sao Nam An and
has generated one third of the income of the company. When Sao Nam An company
Page | 17


invited to dender by some organization who has demand for office equipments,
sales team will set up a tender document which includes instructions for tendering,
form of tender, specification, schedule of rate, contract conditions, quality
requirements, presentations. After that, the business deputy director has
responsibility to review and edit that document. The configuration of products and

bid price the company offers are two important factors in winning a contract.
Therefore, it requires experienced and excellent manager.
Service

o Warranty:
Warranty is an after-sale service Sao Nam An offers its customers for every
product. The company has been the first supplier to provide three year warranty
service in VietNam in two forms: directly or through Sao Nam An’s agents.
o Maintenance
In order to help customers be able to use the full capacity of office
equipments they have purchased, Sao Nam An provides customers mainternance
service which is applied only after the warranty time of the product is over. Besides,
customers can make a maintenance contract with Sao Nam An to keep track of the
maintenance process.
o Equipment renting
Sao Nam An provides office equipments renting service by two ways of
calculating price: lump-sum price or time dependent price. The renting equipments
are:
- Photocopier
- Projector