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Online advertising service development strategy of FPT Telecom Joint Stock Company until 2010 - 2

CHAPTER I: THEORETICAL BASIS AND OVERVIEW OF ONLINE ADVERTISING MARKET IN VIETNAM

1. THEORETICAL BASIS


1.1- - Overview of strategy


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1.1-1. - Concept of strategy


Online advertising service development strategy of FPT Telecom Joint Stock Company until 2010 - 2

There are many different concepts of strategy. Strategy is the determination of the basic long-term goals and objectives of an enterprise, the determination of actions and the allocation of resources to carry out those goals.

1.1-2. - Strategy Classification


Strategies are divided into different types depending on the point of view. According to Fred R. Davis, strategies are divided into 14 types: forward integration, backward integration, horizontal integration, market penetration, market development, product development, concentric diversification, conglomerate diversification, horizontal diversification, joint ventures, retrenchment, liquidation, and combination strategies.

1.1-3. -Research on the industry environment


1.1-3.1- Macro-environmental factors


It is a type of environment that greatly affects businesses in an economic space, the nature and level of impact of which varies depending on each industry and each specific business. This environment includes the following factors:

Economic factors such as bank interest rates, monetary and financial policies, balance of payments, inflation rates, national income trends, etc.

Government and political factors such as price regulations, environmental protection advertising, government programs...

Social factors such as population trends, forms of entertainment, social behavior, consumer mobility, etc.

Natural factors include issues related to environmental pollution, resources, energy, etc.

Technological and technical factors such as new technologies, new technical solutions, technology transfer...

The above macro-environmental factors often interact with each other and affect businesses. Therefore, incorrect interpretation of the macro-environment can lead to errors in strategic planning.

1.1-3.2- Micro-environmental factors


The micro environment mainly includes factors within the industry that directly affect the nature and level of competition in that industry. These industries include:

Competitors or also known as internal industry competition. It is necessary to identify the strengths, weaknesses, potentials, and future goals of competitors. The level of competition will be fierce if the industry has a slow growth rate, excess capacity, standardized products so there is no difference, difficulty in withdrawing from the industry...

Customers : the company needs to survey customer needs. Customer pressure is higher when the proportion of goods they buy from the company is large, the cost of switching to other goods is low, the industry's products are standardized, there is no difference, and the level of forward linkage is high.

Suppliers : are those who provide materials, equipment, and goods to the company, financial communities that can approve loans for businesses, labor sources, and labor unions. The pressure of suppliers is strong or weak depending on the number of suppliers, the number of substitute products, the importance of the company's products to the company's success, and the level of blocking a backward linkage of the supplier.

Potential competitors are those who will enter the industry. The growth of new competitors will be limited by barriers such as economies of scale, high product differentiation requiring high costs if they want to

industry entry, high capital requirements, government policies that limit or remove barriers

Substitute products : are often the business of technology boom. Therefore, businesses need to research and check potential substitute items regularly to respond promptly to maintain the profit potential of the industry. The threat of substitute products appears when: the prices offered by manufacturers of substitute products are more attractive, the cost of switching to other products of buyers is low, there is potential for competition from substitute products.

After analyzing the factors of the micro and macro environment, we next build a matrix to evaluate the environmental factors that have a certain impact on the business's operations. These factors are classified in importance from 0 -1 so that the sum of the classifications for the above factors must equal 1. The classification column shows the level of response of the business to this factor. The response levels are scored from 1-4, increasing according to the company's ability to respond from weak (1) to strong (4). Multiply the importance of each factor by its response level to determine a number of important points. If the important point is greater than 2.5, the company responds well to the environment and vice versa, the response is not good, the average is 2.

One of the basic environmental factors that strongly affects the strategic position of the company is the competitor factor. The competitive image matrix is ​​an extension of the external factor evaluation matrix in which the importance levels, classification and total importance scores have the same meaning. The total importance score of the competing company is compared with the sample company. The factors included in the matrix for evaluation include: market share, price competitiveness, financial position, product quality, customer loyalty. The importance level of a factor shows its importance to the success of the business. The classification level shows the ability of each company to respond to each factor. Poor response will receive a value of 1 and increase to 2,3 until 4 is the best response. Compare the total weighted scores between units, the unit with the highest total score is the strongest unit in effectively responding to external and internal factors.

1.1-3.3- Internal environmental factors of the industry


The company's internal factors need to be analyzed to see its strengths and weaknesses in order to maximize its strengths and overcome its weaknesses. On that basis, the company will be able to take advantage of opportunities and overcome threats from the external environment. Internal factors mainly include the following areas:

Marketing : need to consider the level of marketing activities of the business through the ability to satisfy customer needs of products, services, distribution system, prices, effective advertising and promotion activities...

Production : is the activity of creating products of the enterprise, it is very important and related to many other stages such as marketing, finance, human resources... it is necessary to grasp these activities to be able to control other stages well.

Financial accounting : the financial capacity of a business will greatly affect the development of strategy because it determines investment plans, production costs, promotions, payment capacity, profits...

Research and development (R&D): this is a very important field nowadays, especially in the era of constantly developing science and technology. It will help businesses maintain their pioneering position in product research, prices, and technology. This requires organizations to have adequate machinery, equipment, information, and skilled experts with a lot of experience and creativity.

Management : plays an important role in the organization, especially in strategic management, because of its planning, organizing, controlling and checking functions.

Information system : we are in the information age and information links all business functions together. Information is the basis of management decisions. Information intensity, information technology, and the ability to exploit and use information well will help businesses gain strengths in business and make wise decisions.

After analyzing the above internal factors, we will establish the internal factor matrix (IFE). The total important score of the factors on the IFE matrix is ​​the lowest 1 and the highest 4. The average score is 2. The internal analysis process will help strategists evaluate

the strengths and weaknesses of the business to be more confident in choosing the right strategy that is suitable for your business.

1.2- Competition on added value, positioning and business development 1.2-1. The nature of the concept of competition on added value

Competition is not about eliminating your competitors but about bringing increased benefits to customers, so that customers choose you instead of your competitors.

Competition is a process of constant change: businesses are racing to serve customers well, which means that no added value can remain the same to last forever, but every day there must be something new. In that process, businesses need to master the operational thinking tools to be able to create a continuous movement process, to create a competitive position for themselves or at least not be left passive by the constant attacks of competitors.

1.2-2. Added value and six areas of interconnectedness


There are six areas that businesses can use to increase the external value of the business, thereby creating a competitive advantage for their business. The smooth combination of these areas will create a continuous competitive advantage for the business:

Product quality


Time quality


Spatial quality


Service quality.


Brand quality


Price quality


These six areas must be interconnected and depend on the positioning of the business to create added value that is always superior in the eyes of customers. Each area will have different content, if applied well, it will create a continuous, mutually supportive competitive position.

Product quality: winning/retaining market and exploiting market'


To be able to compete in the current conditions, product quality is an indispensable issue. However, with the advancement of science and technology, product quality is almost the same in each enterprise. To be able to create a decisive competitive advantage for the enterprise, the enterprise must create a superior quality in the sense of 'product innovation' to create a difference compared to the products of competitors.

The innovation process must be carried out continuously. Continuous product innovation is both a way to prove your strength to the market and to discourage competitors.

Continuous product innovation is to stay ahead of competitors, putting them in a state of always chasing after and imitating your products.

There are two completely different types of product innovation: innovation with improving technology and innovation with transforming technology:

Innovation with improved technology: expanding the specialization of product functions, product ranges as well as product service areas. The purpose is to gain and maintain market share.

Product innovation from transformative technology: refers to launching a completely new product to the market. This is a tool used to explore the market. However, launching a product that has never existed before, if successful, will bring huge profits but also a lot of risks. Therefore, businesses need to research carefully before choosing this strategy.

Time quality: stay ahead of market trends and optimize operationsmanufacture

Product innovation is to be one step ahead to create something new, something that has not been seen in the market. But not only to be ahead, but also to be fast. Therefore, time is also an important factor in creating competitive advantage.

Competition based on time has two main processes:

“Just On Time”: means right at the right time of the opportunity in the market. It is also important to note that accelerating to be on time is a race whose purpose is to target customer benefits, to receive higher added value for customers, at least “more” than the added value compared to other businesses, to avoid the case where two businesses compete with each other so that the last one to suffer is the customer.

Launching a product at the right time helps businesses maintain and expand their market. Capturing a market is important, but maintaining a newly opened market is even more important.

“Just in time” means right at the time when production time is needed, which includes organizing a production system that enables businesses to enter the market quickly and with less waste, eliminating everything that is not only unnecessary but also increases the burden and slowness in the production process. This is to shorten production time, meet orders on time, reduce costs, and continuously improve product quality.

The smooth and flexible integration of JOT and JIT creates a unique platform for continuous competitive advantage. Being present in the market according to customer requirements brings much higher added value to businesses, especially businesses operating in fields requiring increasingly high industrial levels.

Spatial quality: impressing location and sparking excitement


If a business wants to have a special competitive advantage over other businesses in the same field, it must focus on customers' purchases, not its own sales.

Service quality: connecting, strengthening and expanding relationships


Service quality is the performance of what a business has promised to establish, strengthen and expand long-term partnerships with customers and markets.

And service is only of quality when customers feel that the fulfillment of those promises by the business brings customers more added value than other businesses operating in the same field.

There are three issues that businesses need to pay attention to: facilities, meeting with employees, and contact with the structure of the business. These are the three interfaces through which customers evaluate the business, these three interfaces must be synchronous and consistent: if one of the three above is missing, the business's service will be unbalanced, and if all three are missing, the business will not exist (except for monopoly businesses).

Brand quality: pride and shared reputation


A brand is any name, shape or symbol used to identify the source of a product or service provided by a business and to distinguish it from those of other businesses.

How can a business brand have within itself a quality that gives the business a unique competitive advantage?

In short, the competitive advantage of a brand does not only rely on the form, design, and packaging, but fundamentally must share with customers and the social environment the pride in personality and life values ​​that are promoted and implemented by the business.

Price quality: reasonable and timely


The value of the products and services provided does not lie in the products and services themselves, but in the added value from the relationship between the service and the buyer. When the business proves that the efficiency brought by the cost that the customer has to pay is suitable for the wishes and time of the customer's request, the applied price list will bring the business a unique competitive advantage.

In short, to increase the competitive position of a business, it is necessary to flexibly apply 6 areas to create a mutually supportive competitive position for the business, thereby maintaining its competitive position compared to competitors.

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