THE BUSINESS STRATEGY AND DEVELOP THE MOBILE INFORMATION NETWORK OF EVN TELECOM COMPANY

FORM THE BUSINESS STRATEGY AND
DEVELOP THE MOBILE INFORMATION
NETWORK OF EVN TELECOM COMPANY


TABLE OF CONTENTS
TABLE OF CONTENTS........................................................................................................................................2
LIST OF ABBREVIATIONS ...............................................................................................................................3
ETC

EVN TELECOM....................................................................................................................................3
SWOT Matrix S: Strengths.......................................................................................................................................4

LIST OF TABLES...................................................................................................................................................4
LIST OF FIGURES, GRAPHS.............................................................................................................................5
PART 1: INTRODUCTION..................................................................................................................................6
1.2- GOAL OF RESEARCH.................................................................................................................................8
1.3. METHOD OF RESEARCH............................................................................................................................8
1.4. SCOPE OF RESEARCH................................................................................................................................8
1.5. TOPIC STRUCTURE....................................................................................................................................8
PART 2: CONTENTS.............................................................................................................................................9
CHAPTER 1: GENERAL REASONING OF PLANNING A BUSINESS STRATEGY............................9
1.1. BUSINESS STRATEGY OVERVIEW..............................................................................................................9
1.1.2. Specific meaning of Business strategy...........................................................................................11
1.1.3. The necessary of Company Business strategy...............................................................................12
1.1.3.2. Non financial benefit...................................................................................................................................12

1.2. BUILDING AND CHOOSING THE COMPANY BUSINESS STRATEGY...........................................................12
1.2.1. Process of Business strategy..........................................................................................................12
1.2.1.1. Phase of Forming strategy..........................................................................................................................12
1.2.1.2. Phase of performing strategy......................................................................................................................13

1.2.1.3. Phase of evaluating strategy.......................................................................................................................14

1.2.2. Analysis of Company Business environment.................................................................................16
1.2.2.1. Factors of Business environment................................................................................................................16
1.2.2.3. Internal environment...................................................................................................................................24
1.2.2.2. Analyzing business environment................................................................................................................26

1.2.3. Some evaluation model..................................................................................................................28
1.2.3.1. Peripheral factor evaluating matrix............................................................................................................28
1.2.3.2. BCG Matrix.................................................................................................................................................29
1.2.3.3. HOPER Matrix............................................................................................................................................30
1.2.3.4. SWOT Matrix..............................................................................................................................................30

CHAPTER 2: CONDITON OF PRODUCTION - COMMERCE OPERATION AND STRATEGY
PLANNING OF EVN TELECOM.....................................................................................................................32
2.1- SUMMARY OF EVN TELECOM...............................................................................................................32
2.1.1. Formation and development process of EVN TELECOM (EVN Telecom)...................................32
2.1.2. Function, mission and organizational structure of EVN TELECOM............................................32
2.1.2.1. Function and mission..................................................................................................................................32
2.1.2.2. Organizing structure....................................................................................................................................34
2.1.2.3. Manufacturing organizing structure ..........................................................................................................38

2.1.3. Technical specification..................................................................................................................42
2.1.4. Labor specification........................................................................................................................43
2.1.5. Production and business situation in recent years........................................................................43
2.1.5.1. Revenue.......................................................................................................................................................43
2.1.5.2. Result of production and business..............................................................................................................44

2.2. CONDITION OF PRODUCTION - COMMERCE OPERATION AND STRATEGY PLANNING OF EVN TELECOM 47
2.2.1. Condition of plan performance......................................................................................................47

2.2.1.1. Difficulties...................................................................................................................................................50
2.2.1.2. Advantages..................................................................................................................................................51
2.2.1.3. Problems......................................................................................................................................................51
2.2.1.4. Reason of problems.....................................................................................................................................52

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2.2.2. Real situation of EVN Telecom business strategy.........................................................................52
2.2.2.1. Target of subscriber development..............................................................................................................52
2.2.2.2. Revenue target.............................................................................................................................................53
2.2.2.3. Target customers.........................................................................................................................................53
2.2.2.4. Evaluate current business strategy..............................................................................................................58

CHAPTER 3: SOLUTION OF BUILDING BUSINESS STRATEGY AND DEVELOPING MOBILE
INFORMATION NETWORK OF EVN TELECOM.....................................................................................59
3.1. GENERAL OF VIET NAM TELECOMMUNICATION....................................................................................59
3.1.1. Vietnamese economy......................................................................................................................59
3.1.2. Market forces.................................................................................................................................61
3.1.2.1. Telecommunication expenditure................................................................................................................61

3.2. PROPOSE ON COMPLETING BUSINESS STRATEGY IN THE NEXT PHASE OF EVN TELECOM.................64
3.2.1. General solutions...........................................................................................................................65
3.2.1.1. Strengthen market study activities..............................................................................................................65
3.2.1.2. Plan to consume products...........................................................................................................................66
3.2.1.3. Consolidate and improve the business strategy process............................................................................67

3.2.2. Specific solutions...........................................................................................................................70
3.2.2.1. A new telecommunication world................................................................................................................70
3.2.2.2. Company target in developing the mobile communication network.........................................................70

3.2.2.3. Propose about the market............................................................................................................................71
3.2.2.4. The imagine and position of company.......................................................................................................72
3.2.2.5. Telecommunication network......................................................................................................................72
3.2.2.6. Prices...........................................................................................................................................................73
3.2.2.7. Solution for distribution channel................................................................................................................73
3.2.2.8. Advertisement and promotion....................................................................................................................73
3.2.2.9. Customer caring..........................................................................................................................................74

3.2.3. Apply strategic theory to build and choose the business strategy of EVN TELECOM.................74
3.2.3.1. Using SWOT matrix...................................................................................................................................75
3.2.3.2. Forming IFE and EFE matrix.....................................................................................................................76
3.2.3.3. Analyze IFE, EFE matrix and combine SWOT.........................................................................................81
3.2.3.4. Using QSPM matrix....................................................................................................................................83

PART 3: CONCLUSION.....................................................................................................................................87
REFERENCES......................................................................................................................................................88
APPENDICES........................................................................................................................................................89

LIST OF ABBREVIATIONS

ETC

EVN Telecom

BCG

Boston Consulting Group

SWOT Matrix

S: Strengths
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O: Opportunities
T: Threats
W: Weaknesses
QSP

Quantitative Strategic Planning

EFE

External Factor Evaluation

IFE

Internal Factor Evaluation

LIST OF TABLES

Table 1.1. The macro environment factors
Table 2.1: Revenue of sales Service
Table 2.2: Number of CDMA Subscriber From 2006 to 2008
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Table 2.3: Result of consulting, Designing and constructing business - From
2006 to 2008
Table 3.1: Telecommunication spending in some countries

LIST OF FIGURES, GRAPHS

Figure 1.1: Strategic business of administration model – Feedback information
Figure 1.2 Business environment factors
Figure 1.3: The relation between factors in the operation environment of a
company
Figure 1.4: Main parts of competitor analysis is presented as follow
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Figure 1.5: Building process of EFE matrix
Figure 1.6: BCG matrix
Figure 1.7: Hoper matrix
Figure 2.1 Organizational structure of EVN Telecom
Figure 2.2: Production organizational structure of EVN Telecom
Figure 2.3: Diagram of organizational business

Chart 3.1: Subscriber development per year
Chart 3.2: Revenue of some telecommunication enterprise in 2008 compared to
2007

PART 1: INTRODUCTION
1.1. Reason of choosing the Topic
Nowadays, Information technology is gradually taking an important part in National
economy. It becomes a huge industry that makes advantages for the other ones.
Telecommunication network is compared to the blood vessel that can penetrate into
every business, organization and people. It is a network to connect enterprises to
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each other and enterprises to customers as well. The demand of information is very
necessary to every people today.
In a background of hard economical competition, a telecommunication enterprise
can not remain passive to the change of business environment if it wants to get
success. It must form a suitable strategy (What they are doing, will do and what the
results will be?). A good business strategy takes a main part in the company success
in the future and helps it to grow up firmly in the market. Besides, business strategy
helps enterprise to quickly catch opportunities and reduce the risk of market
fluctuation.
We can see that the nations of the world try to associate the economical
development with social development to reach a state of balance and stability. Each
enterprise associate not only the economical development with social development
in its range of management but also find the interests from the social and human
matters. Therefore, it is considered that a development strategy of enterprise is a
general strategy that direct to the comprehensive development. And a business
strategy is the basic for it.
In practical business, if an enterprise does not have a business strategy or executes
wrongly, it will be definitely unsuccessful. The world witnessed the Japanese
prediction about the energy source and their effort in manufacturing high-class
electronic goods, cars… This has turned a poor resources Japan into a powerful
country in the world.
EVN Telecom has stepped into the telecommunication market since 2006. It is a
national mobile network (096) that covered 64 cities and provinces in the whole
country. In a severely competitive environment, EVN Telecom has succeeded with
remarkable services, reasonable price and discovered the cordless fixed telephone
E-com. However, with the continuous development of other competitors, it is very
important to choose a business strategy that is suitable to current period. In
particular, EVN Telecom has now been preparing for privatization.
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Originate in the practical requirements of EVN Telecom, we choose the topic:
"Form the business strategy and develop the mobile information network of EVN
Telecom Company"
1.2- Goal of research
Our purpose is to bring out a general knowledge about building a business strategy
in a telecommunication service provider. After that we will propose some solutions
to plan a business strategy in the future for EVN Telecom.
The goal of research is to advance some suitable solutions, improve the business
effectiveness, reduce cost and bring about more benefit for the company.
1.3. Method of research
This topic uses these methods: dialectical materialism, survey, analysis and
illustrated model.
1.4. Scope of research
This topic focuses on researching the planning of EVN Telecom business strategy
in 2009-2010.
1.5. Topic structure
This topic contains 3 parts: Preface, Contents and Conclusion. The main content of
topic has 3 chapters:
Chapter 1: General reasoning of planning a business strategy.
Chapter 2: Real situation of production and business and business strategy planning
in EVN Telecom.
Chapter 3: Solution of building business strategy and developing mobile
information network of EVN Telecom.

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PART 2: CONTENTS

CHAPTER 1: GENERAL REASONING OF PLANNING A BUSINESS
STRATEGY
1.1. Business strategy overview
1.1.1. What is business strategy

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The term “strategy” originated in the art of war in olden times. It is considered as
the art of commanding means to win. Borrowed from military term, the word
“strategy” is used popularly in both macro and micro economy. There are many
conceptions about strategy such as:
- Strategy is an art of creating competitive advantages to defend (M.Porter).
- Strategy is to define the way and means to reach the specific target through
policies (General Aileret).
- Strategy is an art of combining and controlling actions to achieve long term targets
(G.Hirsch).
According to another approach, “Strategy” is a manner that helps company answer
questions: “Were do we want to go? Where and how we can go? What do we have?
What do others have?”
From the above conceptions, the term strategy of a company implies and reflects a
target in a long-term (3, 5 or 10 years). The process of deciding a strategy included
competitive environment, strengths and weaknesses. We can see that a company
strategy is a product. It combines the environment factor and the things that the
company can reach and want to reach.
Through times, the conceptions of strategy have changed. There are now two
popular conceptions:
- Business strategy is a mean to achieve the long-term target. The idea of business
strategy is to attack and to win in competitive market.
- Business strategy is a set of long-term target, policies, production and business

solutions, finance and human factor to develop the company business activities and
reach higher quality.

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In summary, business strategy is an art of optimal organizing and combining
resources. It proposes and implements the decision that is suitable to the variable
trend of environment to win in competitions and reach the long-term target.
1.1.2. Specific meaning of Business strategy
We can see the basic figures of business strategy are:
- Business strategy has to specify the basic target in each phase and be grasped
thoroughly.
- Ensure to mobilize totally and combine optimally the using of human and
financial resources. Take full advantage of opportunity to contend with other
competitors.
- Is reflected during a continuous process from building to evaluating, inspecting
and adjusting strategy.
- Is built and implemented in a long-term period (3, 5 or 10 years).
In the market mechanism, the building and deploying business strategy has an
important meaning to the existence and development of a company.
- It helps the company recognize the target and direction. It is the foundation for
determining the orientation and when the company can reach the specific target.
- The market fluctuation always creates opportunity and risk. To build and
implement business strategy will help the company grasp and take advantage of it
and overcome the market risk and trap.
- To build and implement business strategy will firmly create foundation for
suitable decision.
- To build and implement business strategy will take part in increasing the
effectiveness of using resources. Reinforce the competitive position and ensure an

unshakeable development.
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1.1.3. The necessary of Company Business strategy
1.1.3.1. Financial benefit
The researches show that if a company has a good strategy, it will be successful.
The company that has good financial condition trends to plan for the internal and
external fluctuation.
1.1.3.2. Non financial benefit
With the strategy, the company operation will follow one direction. This will bring
success and high benefit. It helps the company to develop with a stable organization
and relationship… It will raise the productivity and reduce the risk. Besides, it will
bring order and discipline to the company. It is the beginning of an effective
administration system, restore the belief of current business strategy and execute the
correcting activities.
1.2. Building and choosing the Company Business strategy
1.2.1. Process of Business strategy.
The conception of administration appeared for a long time but the administrative
theory that was researched basing on the scientific analysis appeared in late 19 th and
early 20th decade.
Strategic administration is a process of researching environment to set up strategic
targets, policies and solutions. It will help organization to bring out strategies,
policies and give decision of correcting, inspecting, evaluating the business strategy
execution.
1.2.1.1. Phase of Forming strategy
Forming strategy is a process of setting up the business task, surveying the internal
and external factors, proposing the long-term targets and choosing replaceable
strategies. It has 3 basic activities:
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-

Research: collect and handle information about market. This is called “Take a

glance at the business environment”. Basically, it specifies strong and weak points
in the business field. Other surveys could be executed such as employee spirit,
productivity, advertisement and customer loyalty.
-

Combine intuition and analysis: A few companies can develop prosperously

with intuitional genius managers. But most of the company gets benefit from
strategy by combining harmoniously intuition and analysis in giving decision.
Give decision: no organization has infinite resource. Therefore strategists must give
decision about choosing an effectively replaceable strategy. The decisions in this
phase are about product, market, resource and technology.
1.2.1.2. Phase of performing strategy
This is a phase of action. That means to mobilize all administer and employee to
execute the planned strategies. The basic activities are:
- Set up annual targets: they are the milestone that companies have to obtain to
reach the long-term target.
- Policies: they are means to achieve the target. They include the instructions,
regulations and procedures to support for reaching the targets.
- Distribute resources: it is an administrative activity that pays attention to the
strategic execution. Strategic administration allows companies to distribute the
resources. They are established by annual targets. There are 4 resources can be
used:
+ Financial resource

+ Material resource
+ Human resource
+ Technical resource
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In summary, this phase is the most difficult one. The execution requires discipline,
devotion and sacrifice of each staff. It will be successful if the managers can
impulse staffs. It is an art rather than a science.
1.2.1.3. Phase of evaluating strategy
It is very necessary to have this phase in each company. A timely evaluation will
alarm the problems so that administers can interfere before they become more
serious.
Timely feedback information is the foundation of strategic evaluation. Richard
Rurnel has proposed 4 standards of evaluating strategy:
+ Consistency
+ Suitableness
+ Advantage
+ Feasibility

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Figure 1.1: Strategic business of administration model –
Feedback information

Specify the responsibility of target and current
strategy

Control

external factors
to specify
opportunity
and risk.

Set up shortterm target

Inspect
and
evaluate

Reconsider the
business target.

Control
external factors
to specify
opportunity
and risk.

Set up shortterm target

Distribute
production
resource

Choose
strategies

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Propose
policies


1.2.2. Analysis of Company Business environment
1.2.2.1. Factors of Business environment
A good strategic management depends on the knowledge of companies about the
environment that they are coping with. The environment factors have wide and deep
affect to the next step of the strategic management process.
The 3 levels of environment that companies have to face are: macro environment,
operation environment and internal environment.
Figure 1.2 Business environment factors

Competitors

Economy

Providers

Technology

Company

Institution
&
law

Customers

Replaceable products

Society

Nature and
environment

The macro environment includes external factors. It affects to the operation
environment and internal environment. It creates opportunities as well as risk for
companies.
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The operation environment includes external factors. It orients the competition in
the business.
The internal environment includes the company resources.
Macro environment
The analysis of macro environment will help the company answer the question:
“What is it now coping with?”
We have 5 factors mentioned in table 1.1: economy, government and politic,
society, nature and technology.

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Economic
factors

Government and
political factors

Social factors

Natural
factors

Technical
factors

Period of
economic cycle

Regulations of
consumption
lending

Opinion about
living standard

Environment
pollution

Cost of
researching and
developing

Financial
resource

Antimonopoly

policies

Living style

Lack of energy

Cost of internal
research and
development

Trend of GNP

Environment
protection laws

Female labor

Waste of
natural
resource

Technical efforts

Inflation rate

Tax laws

Career
aspiration

Copyright
protection

Interest rate

Regulations in
line of foreign
trade

Active
consumption

Technology
transfer

Currency policy

Special treatment

Birth rate

New products

Jobless rate

Regulations of
lending and
promotion

Increasing

population rate

Using human,
machine

Financial policy

Stability of
government

Shifting of
population

Automation

Price control,
wage
Balance of
payments

Table 1.1. The macro environment factors

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Economical factors
The economical factors take much affect to the company. They are interest rate,
period of business cycle, balance of payments, financial and currency policy. The
company has to select the specific impact. Each factor may be opportunity or risk.
Government and Political factors

The government and political factor impact to the company activities. The company
has to conform to the regulations of tax, loaning, insurance, advertisement,
environment protection… The government activities can create opportunity as well
as risk.
Social factors
The company needs to analysis social factors to recognize opportunities and risk. If
these factors can affect to the company such as: anthropology trend, interest of
entertainment, standard ethics, female labor…
Natural factors
The impact of the natural factors to company has been admitted. However the
company has not paid much attention in maintaining the natural environment.
Technical factors
Most of the industrial business and companies depend on the technology. There will
be more advanced technologies coming out into society. They will create
opportunities and risks to every industrial business and companies.
1.2.2.2. Operation environment
Because the (common) influences of these factors are unavailable for all companies,
the key to setup a successful strategy is analyzing each of these main factors.

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The understanding of competition pressure sources helps company to recognize its
weaknesses and strengths relating to opportunities and risks that company will
encounter.

Figure 1.3: The relation between factors in the
operation environment of a company
Competitor

New competitor risk

Price squeeze
ability of
suppliers

Potential Competitor

Price squeeze
ability of
buyers

Suppliers

Customers

Competition between
companies in the same
line of business
Replacement risk
Replacement

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Competitors
The understanding of competitors has an important meaning for companies because
of many reasons.

Figure 1.4: Main parts of competitor analysis is

presented as follow

What they can do and
will be able to do?

What they want to
reach?

Some questions have to answer
about the competitors
Future
purpose
Multidimension
al management

- Do they satisfy with their present
position?
- What are their ability?
- What are their weaknesses?
- What can help them react in the
most powerful and effective way?

Analytical review
How can it effect
on company and
industry?

Present
strategy
How is the

competitive
ability of the
company?

Potential
Strengths and
weakness

Firstly, competitors determine competition property, competition level and
advantage struggle skills. Level of competition depends on interrelation among
factors, such as number of competing companies, growth rate of sector, fix cost
structure and level of product diversity. Existence of these factors has tendency to
increase demand or expectation of company for achieving and protecting their
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market share. So, that makes competition more severe. Companies should admit
that competition process is not stable.
Beside new competitors, new technology solutions affect property and level of
competition.
Companies should analyze each competitor to master actions and reactions they
may approve.
Customer
Customer problem is not apart from competition environment. Goodwill is the most
valuable property. The goodwill achievement is due to company meets the demand
better than competitors do. Other key problem is bargaining ability of customer.
The buyer has ability of decreasing the benefit of a business sector by mean of price
squeezing or requiring higher quality and more services.
Supplier
Companies have relations with supplying organizations who supply many kinds of

goods such as materials, devices, labor, capital.
- Device supplier
Device supplying organizations has advantages and be able to get much profit by
mean of decreasing product quality or accompany services.
Factors increasing strength of supplying organization are similar to factors
increasing strength of buyer.
- Number of supplier is little
- There isn’t replacement
- There isn’t supplier offering different product

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Supplier selection relies on seller analysis result. Analysis supplying organization
has importance significance for any company. In some certain time, most
companies including well-doing ones, have to temporarily borrow money from
financial market. They can use this capital source by short-term borrowing, longterm borrowing capital issue. Before analyzing capital market, company should pay
attention to define its position in competition with others.
Labor source is a main factor in company’s competition environment. The ability of
attractiveness and hold competence employees is prerequisite to ensuring success of
company. Main factors need analyzing:
Potential competitor
New-started competitor is a factor decreasing benefit of company because it sets
into extraction new production ability with desire to secure market share and
necessary resources.
Buyback other companies in the same business in order to building market share is
normally a manifestation of appearing new competitors. Although company does
not always have new potential competitors at any time, the danger of new
competitors integrating in business has influence on company’s strategy.
A barrier preventing the entering is strong withstanding of well-established

company.
Replacement
The pressure of replacement restricts potential benefit of a business because higher
price is limited. If a company not pay attention to replacement, it may fall behind
with small market share.
Hence, company should incessantly research and check new potential replacement.
Most of replacement is result of technology explosion. To get achievement,

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company need pay attention to using resources to develop and apply new
technology in its strategy.
1.2.2.3. Internal environment
Internal environment includes all factors and systems inside company. It’s
necessary to throughout analyze these factors because it overcomes weaknesses and
promote strengths. Internal environment factors include:
- Human resource
- Production research and development
- Finance and accounting
- Marketing
- Organization discipline
Human resource factors
Human resource takes a very important role in the success of company. Human
provide input data to form target and analyze environment. Although opinions of
general planning system is absolutely correct, it can not bring benefit if lack of
competent man.
Research and development factors
The quality of research and development is a factor which determines company in
the top or behind position in comparison with other leading company in area of

product development, product quality, price control and production technology.
Qualification, experience and scientific ability are not enough foundation for good
research. Research and development department have to closely monitored
environment factors and technology innovation regarding technical process, product
and materials.

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The effective information exchange between research and development department
and other departments take an important role in the success of company.
Production factors
Production is a line of business connecting to produce process. This is the main
business line, so it influences on success ability of company.
There are many positive influences of high quality product with low cost.
Marketing team has advantage of easy selling.
Finance division has advantage of effective production facilities economizing
capital resource. Production section also has big impact on human resource
department.
On the other hand, weak production results on unmarketable product, financial loss
and indifferent attitude of employees.
Financial and accounting factors
Function of finance sector includes analyze, plan and check implementation of
financial plan and financial position of company. Small company can use one
person responsible for finance problem and hold concurrently: accountant, financial
record keeper, manager or financier.
Large company can organize many departments as: financial accounting, inspector
department.
Financial sector has responsibilities relating to resources such as:
- Resource finding including capital resource finding

- Expenditure control
Marketing factors:

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