Distribution Strategy and Sales Network Organization

domestic about 50 USD/ton. 31

4.2. Production stage

In this production stage, there are many measures to reduce costs. Typically, expanding the scale of production. The larger the scale, the more conditions the enterprise has to produce and labor in the direction of specialized division of labor, thereby increasing labor productivity and reducing costs. In addition, the company needs to conduct:

- Review economic and technical standards and indicators, apply advanced standards to production and business. Set savings standards for each member unit and each production stage, requiring units to find measures to reduce consumption of raw materials, fuel, supplies and energy.

- Assign planned norms and targets for saving and reducing costs to each unit based on newly issued economic and technical norms. Quarterly review and apply the reward and penalty mechanism for increasing or decreasing costs from the salary fund.

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- Review and temporarily suspend major repairs that are not really necessary, strictly control repair costs to limit additional costs.

4.3. Materials management

The basic means of material management are purchasing, production, and distribution, which are viewed in a comprehensive manner. In particular, material purchase price management is carried out on the basis of competitive bidding. High-value materials such as steel billets and scrap steel are subject to the parent company's direction. It can be said that the distribution and strict control of material flow allows the company to save costs and reduce inventory.

In particular, managing the inventory system on time and in quantity has a great effect. For this problem, the company can research and apply a modern inventory management method that is increasingly popular in the world, which is the Just-In-Time method. This method can be generally understood as follows: The Just-In-Time (JIT) strategy is encapsulated in one sentence: "The right product with the right quantity at the right place at the right time". In production, each stage of the production process produces a quantity exactly equal to the quantity

31 Data compiled from the Feasibility Report of Tisco's Phase II production expansion project.

that the next stage of production requires. In other words, JIT is a production system in which the flows of raw materials, goods and products in transit during production and distribution are planned in detail step by step so that the next process can be carried out as soon as the current process ends. Thereby, no items are left idle or waiting for processing, no workers or equipment have to wait for operational inputs. This "import just enough to produce" method will significantly reduce inventory. Low inventory has two important benefits: first, saving space and saving costs because capital is not tied up in products remaining in stock; second, large inventories will be a large reserve to overcome imbalances in production, which makes manufacturers rely on not trying to overcome problems in production and leads to increased costs.

To apply this method, a lot of synchronous work is required, in which the most important requirement is to have reliable suppliers. Traditionally, buyers check the quality and quantity of goods delivered. But in fact, checking the quality of goods delivered is considered ineffective because it is not included in the product value. Therefore, quality assurance is transferred to suppliers. Suppliers must ensure the ability to supply at any time, high quality, accurate delivery time. Considering the current input supply situation of Tisco, this requirement is not too difficult to implement. In addition, the JIT system requires a spirit of cooperation between workers, managers and suppliers. If this is not achieved, it is difficult to have a truly effective JIT system.

4.4. Product distribution and marketing

- Implement sales cost allocation for branches, based on specific and detailed sales cost construction such as: saving on fuel costs, reception, conferences, bending, loading, unloading, transportation costs, etc., strengthen inspection work during implementation.

- In marketing, the company can apply undifferentiated marketing strategy. That is, the company does not need to remember different customers with different needs but only needs to apply the method of serving average customers.

sensitive to the price of Tisco products. This strategy is suitable for steel products, because the demand for steel is essentially the same, there is not much distinction between market segments. This strategy will help reduce marketing costs for the company.

4.5. Management

Strictly control business management costs, specifically review each item at the company's units and offices; revise and issue new regulations on savings such as cost allocation, telephone, reception, conferences, regulations on management and use of vehicles for business trips, etc. At the same time, organize and reorganize businesses, and carry out equitization for member units to keep up with the progress of the proposed plan.

5. Strengthen marketing activities

For any business, marketing plays a very important role. Especially in today's fiercely competitive environment, marketing is even more necessary. In order to develop marketing activities, the company needs to pay attention to the following measures:

5.1. Market research

Market research will help the company exploit its full potential as well as satisfy all customer needs if it does not have complete and accurate market information about prices, supply and demand of goods... From there, the company will propose specific strategies and measures to achieve the proposed business goals.

Market research is the process of collecting information and data about the business market, analyzing and comparing that data and drawing conclusions, finding appropriate measures for the company. For market research to be highly effective, Tisco needs to combine both desk research methods and field research methods. The research sequence can be as follows: determining market research objectives, building a system of research indicators, determining and selecting research methods, building a research plan, adjusting the plan and writing a report.

Market research work requires professional staff with good skills. Training such staff is a long-term strategy. During the time

For now, if the company has not yet prepared human resources, it can hire companies specializing in market research. The choice of which company should be noted: domestic market research requires domestic companies, foreign market research requires large reputable companies in the world to ensure the requirements set out. If there is no right choice, the company will incur large costs but the efficiency is not high.

5.2. Distribution strategy and sales network organization

The task of developing a distribution channel must be established and controlled by the highest level of the company. The distribution channel must be invested in terms of money, material and human resources commensurate with the company's goals. The modern management organization today is the vertical distribution channel. The basic idea of the vertical distribution channel system is:

- In the channel there are many different members, the members are linked together into a unified, tight and sustainable system so as not to be broken by any impulse from the external environment.

- In the channel, there must be an organization that plays the role of commander, in this case the company's board of directors. Management between organizations or channel members must be closely ensured to create a smooth flow of goods and other flows in the channel from the manufacturer to the final consumer and vice versa.

To create such a vertical distribution channel, Tisco needs to pay attention to the following specific activities:

- Invest in designing and building a perfect channel system that optimizes length (number of intermediary levels of the channel) and width (number of members at the same level of the channel), number of channels used and proportion of goods allocated to each channel. To do so, it is necessary to conduct a comprehensive analysis of the company's internal factors, factors of distribution intermediaries, customer markets and factors of the macro-environment of business.

- After designing the optimal distribution channel structure, the company must make it a reality, that is, develop the distribution network and take measures to control and manage it. In the process of developing the network, selecting and attracting channel members as well as the process of channel management, the company not only

It is not just about investing money, but also about having wise, persistent, flexible strategies that exploit the cultural and traditional aspects of each locality.

- Tisco needs to promptly and effectively handle conflicts in the channel, resolving conflicts as soon as they arise. To do so, the company must classify them. For each type of conflict, there are appropriate solutions: agreeing on basic goals, establishing a distribution council, using diplomacy, mediation or arbitration.

- The company also needs to regularly evaluate the activities of channel members to have timely and documented management and adjustment of the channel system.

5.3. Advertising and sales promotion.

Advertising and propaganda in the communication and promotion mix must aim at three goals: information, persuasion, and reminder. The main idea of the messages must be based on the origin of the product, drawing attention to something about the product to customers. In addition, the company needs to advertise its reputation and the superiority of accompanying services such as the ability to provide goods quickly, selling according to barcodes to ensure convenience and speed in transactions. In the process of implementing advertising and propaganda, the company needs to note:

- Clearly identify who the target audience is, potential buyers, current users, purchase decision makers or influencers, individuals or organizations.

- Determine the goals to be achieved. The goals to be achieved can be simply to inform or to convince customers to have full awareness and trust in Tisco products and the company's services, or simply to remind customers so that they can remember the company's products.

- Select budget allocation options for communication and promotion activities. There are many methods for determining budgets such as: depending on ability, percentage of sales, competitive parity method, target method, analysis and comparison method.

- In deciding on mixed communication and promotion tools, it is also necessary to choose tools that are highly feasible, suitable for financial capacity and meet the goals and tasks set out in the strategy.

- Organize the implementation of mixed communication and promotion tools. During the organization process, attention must be paid to the laws and regulations of the State in this field such as language, symbols, content and prohibited forms.

- Control, evaluate effectiveness and adjust strategies when necessary. The company needs to pay special attention to pre-, during- and post-sales services such as sales service, product warranty, guaranteed synchronous supply, fast, accurate and thoughtful delivery to consumers according to customer requirements with higher quality than competitors. The company needs to improve the customer service department to handle complaints and adjust, provide customer services in the best way.

II. MACRO SOLUTIONS TO SUPPORT TISCO TO IMPROVE ITS COMPETITIVENESS

1. Perfecting State policies

Perfecting macroeconomic policies is an objective requirement of our country's economy in the context of current economic integration. The Party and the Government have recognized this issue, so in recent times they have always made efforts to implement reform commitments, which are clearly demonstrated in important documents such as the Resolution of the 9th Congress, the socio-economic development strategy 2001-2010. Based on this important orientation, policy makers can implement policies and regulations to build a comprehensive strategy on economic integration with a specific roadmap for sectors, localities and enterprises to promptly reorganize and improve production efficiency, enhance competitiveness, and ensure effective integration.

Institution building

The State promotes the construction of market economic institutions, creating institutions for the development of the market of production factors. It pays attention to all five basic functions of the institution: determining directions, formulating policies, organizing implementation, monitoring and handling disputes, ensuring that the institution is truly effective and seriously implemented.

Perfecting policies, building new laws and new policies

The State needs to continue to raise awareness of innovative thinking, form new synchronous policies on market economy, open up international economic integration. After successfully transforming the market economy, this new stage requires a new policy to accelerate the full and synchronous construction but must ensure the principle: "Transparency, consistency and predictability" to meet the requirements of the WTO:

- There should be policies to support companies as well as steel enterprises in production and business activities to ensure efficiency right from the first step in implementing WTO commitments. Develop support or restriction policies and identify medium-term and long-term development directions for enterprises to build appropriate development strategies.

- Continue to improve trade and investment policies, change import regimes towards modernization and increase transparency of the tariff system and non-tariff barriers. Especially for non-tariff measures, the Government needs to establish a complete and synchronous system of non-tariff measures that allows flexible and harmonious use with protection goals but with a time limit.

- It is necessary to establish most-favored-nation treatment regimes, national treatment regimes, self-defense regimes and establish regulations on goods origin as a basis for developing trade relations with other countries.

- Create conditions for Tisco and steel enterprises to be competitive in terms of scale by accelerating the progress of the State enterprise reform program to promote enterprises to produce and do business effectively, with scale and production capacity appropriate to the leading role in the socialist-oriented market economy.

- Quickly overcome the inadequacies and conflicts between laws, typically the conflicting Commercial Law and Environmental Law has caused great difficulties for Tisco's scrap steel import, or the current Construction Steel Regulations still have many inadequacies, causing disagreement from businesses.

- The current practical situation of our country shows that there is still a lack of new laws and policies. The most urgent thing is to soon complete and promulgate the Competition Law to create a healthy competitive environment that contributes to improving the operational efficiency of enterprises. Competition is an inevitable rule in a market economy, so creating a healthy competitive environment is to promote the advantages and limit the disadvantages of competition, protect the interests of honest businesses, consumers and the entire economy.

Promoting the dynamism of Tisco and steel enterprises

Support businesses mainly through policies that create favorable conditions, minimizing preferential and preferential policies. The more preferential policies are issued, the more awkward the environment is created, the State wastes resources, businesses waste time and effort to run around, negativity and corruption have room to develop. Encourage expanding competition according to the principles of equality and non-discrimination. There needs to be laws to control and eliminate monopoly and expand competition. It is necessary to review and eliminate monopoly factors and stages to create conditions for competition to develop. Be consistent with the viewpoint of developing a multi-sector economy, creating an equal competitive environment, non-discrimination in laws, policies and the attitudes of civil servants when performing their duties.

2. Increase financial support

Finance is an urgent problem for Vietnamese enterprises. Therefore, the State needs to have active measures to support enterprises. But it is also necessary to agree that, with the policy of developing a market economy, it is necessary to ensure fairness among enterprises, ending the mechanism of "asking and giving" with capital allocation from the budget. To do this, macroeconomic policies need to create favorable conditions for enterprises to access different types of capital sources. Therefore, the main solutions are:

* The State needs to soon plan and orient strategies for the development of Vietnamese enterprises. This is very important in encouraging business owners to invest in business. The Government needs to promptly grasp the current situation of enterprises.

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