4.8.2.2 Customers:
LOIPHAT is also affected by the scale of current and potential product or service demand, desired benefits, tastes, and payment ability of customers in orienting product consumption. However, LOIPHAT is always the market leader, one of the successful brands in Vietnam and a brand with strong potential for development in the future.
4.8.2.3 Supplier:
Basic materials such as steel pipes, stainless steel, aluminum, glass, etc. are purchased domestically through bidding. Some raw materials and accessories are mostly purchased from domestic enterprises. Packaging is provided by large and reputable enterprises.
4.8.2.4 Barriers to industry entry:
The level of competition in the same industry will increase as barriers to market entry are increasingly reduced and along with Vietnam's roadmap to join the WTO, foreign enterprises with capital and technology potential will invest in Vietnam, more or less increasing the level of competition.
4.9. INTERNAL ENVIRONMENT ANALYSIS:
4.9.1 Production environment:
* Machinery and equipment: modern, specialized equipment such as: arc welding machines, cutting machines, drilling machines, SP polishing machines, plastic injection machines, glass grinding lines.....
* Product quality management:
LOIPHAT is applying the quality management system according to ISO 9001:2000 standard. Product quality inspection is performed by the Quality Control Management Department and the Research and Development (R&D) Department.
* About distribution - delivery: fast distribution and delivery, anytime, anywhere with a delivery vehicle fleet of over 40 vehicles, is one of the criteria to increase the strong competitiveness of LOIPHAT products.
4.9.2 Research and development:
R&D activities in 2010 aim to help LOIPHAT rise to dominate market share in many highly competitive industries. This orientation will be applied to all of the Company's IT products, especially to the main IT product lines of iron, steel, stainless steel tables and chairs of all kinds, anti-theft safes, office chairs, folding chairs, multi-function folding sofa beds....
4.9.3 Marketing (4P)
- Product – SP: LOIPHAT HOME FURNITURE is the leading Vietnamese brand in the furniture industry, with a variety of products that have achieved high recognition with the quality: "High quality Vietnamese goods" at reasonable prices, increasing presence on channels and market penetration.
LOIPHAT's success comes from seizing the opportunity to serve consumers from low-income to middle-class, which is well received and accepted by consumers and society.
- Place – Distribution: The company has a nationwide distribution network through 3 main channels: a system of distributors and agents, a system of LOIPHAT Showrooms and a system of Metro and Bic C supermarkets nationwide.
- Promotion: To grasp the ever-changing tastes and needs of consumers, LOIPHAT regularly conducts market research in many different forms such as: collecting consumer opinions during the sales process, through marketing staff and distributors, collecting through consulting companies, market research organizations... Advertising programs often follow holidays.
- Price: LOIPHAT always has good incentive policies for customers and agents, so maintaining and expanding the distribution network through showrooms is very good. The selling price of each product is always reasonably competitive, with strong market segmentation, suitable for the income and needs of all social classes.
4.9.4 Human resources:
LOIPHAT has a Board of Directors who are all famous in the business world, have good strategic vision, and are able to forecast and adapt promptly to environmental changes.
Most of LOIPHAT's staff are professionally qualified, skilled, trustworthy and have a spirit of solidarity, which is a strength for LOIPHAT to increase its competitiveness.
CHAPTER 5
ASSESSMENT OF LOIPHAT'S CURRENT STRATEGY
5.1 The connection between LOIPHAT's mission and strategy implementation process:
With the development orientation of LOIPHAT, it is always to maintain the pioneering position in the Vietnamese IT market and position LOIPHAT's CL in the DPM diagram with the focus on customers for all LOIPHAT activities, while still paying attention to optimal product solutions and synchronous system positioning. LOIPHAT always connects the mission and the CL implementation process in the business development process.
The success of the LOIPHAT HOME FURNITURE brand after repositioning in 2009, LOIPHAT has achieved a brand awareness level of over 60%, the revenue of the following year is higher than the previous year, achieving quite high efficiency in the context of the economic crisis market of the world in general and Vietnam in particular in recent times.
5.2 The effectiveness of CLKD and factors adapting to the internal and external environment of LOIPHAT:
In the integration trend, Vietnamese enterprises in general and LOIPHAT in particular, still reveal many limitations in quality, design, price, and product features, compared to enterprises in other countries in the region. If they do not regularly follow internal and external environmental factors, they will continue to face risks in business.
Based on the analysis of the macro and micro environment in chapter 4, it shows that LOIPHAT has responded well to the current opportunities and threats in the business environment. However, in the process of implementing the strategies, LOIPHAT encountered many difficulties in the implementation of the strategies. To solve this difficulty, through the use of the SWOT matrix method as a basis, to fully exploit the positive aspects and minimize risks, through combined strategies, specifically as follows:
SWOT MATRIX
Opportunity (O) | Challenge (T) | |
1. The domestic economy is developing steadily and people's income is increasing, consumer demand is increasing. 2. The domestic IT market potential is still large, domestic competitors are still weak. 3. The demand for high-end IT products is increasing. 4. Export market expands because Vietnam has joined AFTA, WTO, tariff barriers are abolished. | 1. Vietnam joined AFTA and WTO, so new competitors are increasing. 2. Difficulties in exporting due to many trade barriers and quality standards of durable and luxurious designs. 3. Many alternative products appear, such as wooden furniture. 4. Brain drain occurs as foreign investment in the industry increases. | |
Strengths (S) | SO: Use your strengths to take advantage of outside opportunities | ST: Use strengths to limit and avoid environmental threats outside |
1. Strong brand, large market share, high customer awareness. 2. Wide distribution network. 3. Modern facilities, machinery and equipment systems and strong financial potential. 4. Strong research and development activities. 5. Diverse products, competitive prices. Quality meets the standard of "High quality Vietnamese goods", voted by consumers for many consecutive years. 6. Experienced management team, skilled staff 7. Good marketing and branding activities. | - S1, S2, S4, S6, S5, S7 to enjoy exploit opportunities O1, O2, O3, O4: Market development strategy. - S3, S4, S5, S6, to take advantage of opportunities O2, O3, O4: Product development strategy. - S2, O4: Forward integration strategy. - S2, S5, O1: Backward integration strategy - S3, O1: Concentric diversification strategy. - S3, O2: Horizontal integration strategy. - Use S3 strengths to take advantage of O1, O2 opportunities. (New technology development strategy) - Use S6 strengths to take advantage of O4 opportunities. (Strategy for developing management capacity and human resource quality) force) | - S1, S2, S3, S5, T1: War Market development strategy (Selecting product lines with advantages to penetrate and develop new markets). - S1, S2, S4, S7, T1: War forward integration strategy - Take advantage of strengths S3, S4, S7 to overcome threats T1, T2. (SP differentiation strategy) |
Weakness (W) | WO: Overcome weaknesses to seize opportunities and take advantage of opportunities to minimize weaknesses | WT: Minimize weaknesses to avoid threats |
1. Not fully exploiting the capacity of machinery and equipment. 2. Not yet built a consistent brand for product lines. | - W1-6, O3: Joint venture and association strategy (to learn from experience) - W6, O4: Integration strategy | - W1, W2, W3, T1 War joint venture strategy - Minimize W3 weaknesses to avoid threatening T3. (War) |
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low. The EF PHB requires a sufficiently large number of output ports to provide low delay, low loss, and low jitter.
EF PHBs can be implemented if the output ports bandwidth is sufficiently large, combined with small buffer sizes and other network resources dedicated to EF packets, to allow the routers service rate for EF packets on an output port to exceed the arrival rate λ of packets at that port.
This means that packets with PHB EF are considered with a pre-allocated amount of output bandwidth and a priority that ensures minimum loss, minimum delay and minimum jitter before being put into operation.
PHB EF is suitable for channel simulation, leased line simulation, and real-time services such as voice, video without compromising on high loss, delay and jitter values.
Figure 2.10 Example of EF installation
Figure 2.10 shows an example of an EF PHB implementation. This is a simple priority queue scheduling technique. At the edges of the DS domain, EF packet traffic is prioritized according to the values agreed upon by the SLA. The EF queue in the figure needs to output packets at a rate higher than the packet arrival rate λ. To provide an EF PHB over an end-to-end DS domain, bandwidth at the output ports of the core routers needs to be allocated in advance to ensure the requirement μ > λ. This can be done by a pre-configured provisioning process. In the figure, EF packets are placed in the priority queue (the upper queue). With such a length, the queue can operate with μ > λ.
Since EF was primarily used for real-time services such as voice and video, and since real-time services use UDP instead of TCP, RED is generally
not suitable for EF queues because applications using UDP will not respond to random packet drop and RED will strip unnecessary packets.
2.2.4.2 Assured Forwarding (AF) PHB
PHB AF is defined by RFC 2597. The purpose of PHB AF is to deliver packets reliably and therefore delay and jitter are considered less important than packet loss. PHB AF is suitable for non-real-time services such as applications using TCP. PHB AF first defines four classes: AF1, AF2, AF3, AF4. For each of these AF classes, packets are then classified into three subclasses with three distinct priority levels.
Table 2.8 shows the four AF classes and 12 AF subclasses and the DSCP values for the 12 AF subclasses defined by RFC 2597. RFC 2597 also allows for more than three separate priority levels to be added for internal use. However, these separate priority levels will only have internal significance.
PHB Class
PHB Subclass
Package type
DSCP
AF4
AF41
Short
100010
AF42
Medium
100100
AF43
High
100110
AF3
AF31
Short
011010
AF32
Medium
011100
AF33
High
011110
AF2
AF21
Short
010010
AF22
Medium
010100
AF23
High
010110
AF1
AF11
Short
001010
AF12
Medium
001100
AF13
High
001110
Table 2.8 AF DSCPs
The AF PHB ensures that packets are forwarded with a high probability of delivery to the destination within the bounds of the rate agreed upon in an SLA. If AF traffic at an ingress port exceeds the pre-priority rate, which is considered non-compliant or “out of profile”, the excess packets will not be delivered to the destination with the same probability as the packets belonging to the defined traffic or “in profile” packets. When there is network congestion, the out of profile packets are dropped before the in profile packets are dropped.
When service levels are defined using AF classes, different quantity and quality between AF classes can be realized by allocating different amounts of bandwidth and buffer space to the four AF classes. Unlike
EF, most AF traffic is non-real-time traffic using TCP, and the RED queue management strategy is an AQM (Adaptive Queue Management) strategy suitable for use in AF PHBs. The four AF PHB layers can be implemented as four separate queues. The output port bandwidth is divided into four AF queues. For each AF queue, packets are marked with three “colors” corresponding to three separate priority levels.
In addition to the 32 DSCP 1 groups defined in Table 2.8, 21 DSCPs have been standardized as follows: one for PHB EF, 12 for PHB AF, and 8 for CSCP. There are 11 DSCP 1 groups still available for other standards.
2.2.5.Example of Differentiated Services
We will look at an example of the Differentiated Service model and mechanism of operation. The architecture of Differentiated Service consists of two basic sets of functions:
Edge functions: include packet classification and traffic conditioning. At the inbound edge of the network, incoming packets are marked. In particular, the DS field in the packet header is set to a certain value. For example, in Figure 2.12, packets sent from H1 to H3 are marked at R1, while packets from H2 to H4 are marked at R2. The labels on the received packets identify the service class to which they belong. Different traffic classes receive different services in the core network. The RFC definition uses the term behavior aggregate rather than the term traffic class. After being marked, a packet can be forwarded immediately into the network, delayed for a period of time before being forwarded, or dropped. We will see that there are many factors that affect how a packet is marked, and whether it is forwarded immediately, delayed, or dropped.
Figure 2.12 DiffServ Example
Core functionality: When a DS-marked packet arrives at a Diffservcapable router, the packet is forwarded to the next router based on
Per-hop behavior is associated with packet classes. Per-hop behavior affects router buffers and the bandwidth shared between competing classes. An important principle of the Differentiated Service architecture is that a routers per-hop behavior is based only on the packets marking or the class to which it belongs. Therefore, if packets sent from H1 to H3 as shown in the figure receive the same marking as packets from H2 to H4, then the network routers treat the packets exactly the same, regardless of whether the packet originated from H1 or H2. For example, R3 does not distinguish between packets from h1 and H2 when forwarding packets to R4. Therefore, the Differentiated Service architecture avoids the need to maintain router state about separate source-destination pairs, which is important for network scalability.
Chapter Conclusion
Chapter 2 has presented and clarified two main models of deploying and installing quality of service in IP networks. While the traditional best-effort model has many disadvantages, later models such as IntServ and DiffServ have partly solved the problems that best-effort could not solve. IntServ follows the direction of ensuring quality of service for each separate flow, it is built similar to the circuit switching model with the use of the RSVP resource reservation protocol. IntSer is suitable for services that require fixed bandwidth that is not shared such as VoIP services, multicast TV services. However, IntSer has disadvantages such as using a lot of network resources, low scalability and lack of flexibility. DiffServ was born with the idea of solving the disadvantages of the IntServ model.
DiffServ follows the direction of ensuring quality based on the principle of hop-by-hop behavior based on the priority of marked packets. The policy for different types of traffic is decided by the administrator and can be changed according to reality, so it is very flexible. DiffServ makes better use of network resources, avoiding idle bandwidth and processing capacity on routers. In addition, the DifServ model can be deployed on many independent domains, so the ability to expand the network becomes easy.
Chapter 3: METHODS TO ENSURE QoS FOR MULTIMEDIA COMMUNICATIONS
In packet-switched networks, different packet flows often have to share the transmission medium all the way to the destination station. To ensure the fair and efficient allocation of bandwidth to flows, appropriate serving mechanisms are required at network nodes, especially at gateways or routers, where many different data flows often pass through. The scheduler is responsible for serving packets of the selected flow and deciding which packet will be served next. Here, a flow is understood as a set of packets belonging to the same priority class, or originating from the same source, or having the same source and destination addresses, etc.
In normal state when there is no congestion, packets will be sent as soon as they are delivered. In case of congestion, if QoS assurance methods are not applied, prolonged congestion can cause packet drops, affecting service quality. In some cases, congestion is prolonged and widespread in the network, which can easily lead to the network being frozen, or many packets being dropped, seriously affecting service quality.
Therefore, in this chapter, in sections 3.2 and 3.3, we introduce some typical network traffic load monitoring techniques to predict and prevent congestion before it occurs through the measure of dropping (removing) packets early when there are signs of impending congestion.
3.1. DropTail method
DropTail is a simple, traditional queue management method based on FIFO mechanism. All incoming packets are placed in the queue, when the queue is full, the later packets are dropped.
Due to its simplicity and ease of implementation, DropTail has been used for many years on Internet router systems. However, this algorithm has the following disadvantages:
− Cannot avoid the phenomenon of “Lock out”: Occurs when 1 or several traffic streams monopolize the queue, making packets of other connections unable to pass through the router. This phenomenon greatly affects reliable transmission protocols such as TCP. According to the anti-congestion algorithm, when locked out, the TCP connection stream will reduce the window size and reduce the packet transmission speed exponentially.
− Can cause Global Synchronization: This is the result of a severe “Lock out” phenomenon. Some neighboring routers have their queues monopolized by a number of connections, causing a series of other TCP connections to be unable to pass through and simultaneously reducing the transmission speed. After those monopolized connections are temporarily suspended,
Once the queue is cleared, it takes a considerable amount of time for TCP connections to return to their original speed.
− Full Queue phenomenon: Data transmitted on the Internet often has an explosion, packets arriving at the router are often in clusters rather than in turn. Therefore, the operating mechanism of DropTail makes the queue easily full for a long period of time, leading to the average delay time of large packets. To avoid this phenomenon, with DropTail, the only way is to increase the routers buffer, this method is very expensive and ineffective.
− No QoS guarantee: With the DropTail mechanism, there is no way to prioritize important packets to be transmitted through the router earlier when all are in the queue. Meanwhile, with multimedia communication, ensuring connection and stable speed is extremely important and the DropTail algorithm cannot satisfy.
The problem of choosing the buffer size of the routers in the network is to “absorb” short bursts of traffic without causing too much queuing delay. This is necessary in bursty data transmission. The queue size determines the size of the packet bursts (traffic spikes) that we want to be able to transmit without being dropped at the routers.
In IP-based application networks, packet dropping is an important mechanism for indirectly reporting congestion to end stations. A solution that prevents router queues from filling up while reducing the packet drop rate is called dynamic queue management.
3.2. Random elimination method – RED
3.2.1 Overview
RED (Random Early Detection of congestion; Random Early Drop) is one of the first AQM algorithms proposed in 1993 by Sally Floyd and Van Jacobson, two scientists at the Lawrence Berkeley Laboratory of the University of California, USA. Due to its outstanding advantages compared to previous queue management algorithms, RED has been widely installed and deployed on the Internet.
The most fundamental point of their work is that the most effective place to detect congestion and react to it is at the gateway or router.
Source entities (senders) can also do this by estimating end-to-end delay, throughput variability, or the rate of packet retransmissions due to drop. However, the sender and receiver view of a particular connection cannot tell which gateways on the network are congested, and cannot distinguish between propagation delay and queuing delay. Only the gateway has a true view of the state of the queue, the link share of the connections passing through it at any given time, and the quality of service requirements of the
traffic flows. The RED gateway monitors the average queue length, which detects early signs of impending congestion (average queue length exceeding a predetermined threshold) and reacts appropriately in one of two ways:
− Drop incoming packets with a certain probability, to indirectly inform the source of congestion, the source needs to reduce the transmission rate to keep the queue from filling up, maintaining the ability to absorb incoming traffic spikes.
− Mark “congestion” with a certain probability in the ECN field in the header of TCP packets to notify the source (the receiving entity will copy this bit into the acknowledgement packet).
Figure 3. 1 RED algorithm
The main goal of RED is to avoid congestion by keeping the average queue size within a sufficiently small and stable region, which also means keeping the queuing delay sufficiently small and stable. Achieving this goal also helps: avoid global synchronization, not resist bursty traffic flows (i.e. flows with low average throughput but high volatility), and maintain an upper bound on the average queue size even in the absence of cooperation from transport layer protocols.
To achieve the above goals, RED gateways must do the following:
− The first is to detect congestion early and react appropriately to keep the average queue size small enough to keep the network operating in the low latency, high throughput region, while still allowing the queue size to fluctuate within a certain range to absorb short-term fluctuations. As discussed above, the gateway is the most appropriate place to detect congestion and is also the most appropriate place to decide which specific connection to report congestion to.
− The second thing is to notify the source of congestion. This is done by marking and notifying the source to reduce traffic. Normally the RED gateway will randomly drop packets. However, if congestion
If congestion is detected before the queue is full, it should be combined with packet marking to signal congestion. The RED gateway has two options: drop or mark; where marking is done by marking the ECN field of the packet with a certain probability, to signal the source to reduce the traffic entering the network.
− An important goal that RED gateways need to achieve is to avoid global synchronization and not to resist traffic flows that have a sudden characteristic. Global synchronization occurs when all connections simultaneously reduce their transmission window size, leading to a severe drop in throughput at the same time. On the other hand, Drop Tail or Random Drop strategies are very sensitive to sudden flows; that is, the gateway queue will often overflow when packets from these flows arrive. To avoid these two phenomena, gateways can use special algorithms to detect congestion and decide which connections will be notified of congestion at the gateway. The RED gateway randomly selects incoming packets to mark; with this method, the probability of marking a packet from a particular connection is proportional to the connections shared bandwidth at the gateway.
− Another goal is to control the average queue size even without cooperation from the source entities. This can be done by dropping packets when the average size exceeds an upper threshold (instead of marking it). This approach is necessary in cases where most connections have transmission times that are less than the round-trip time, or where the source entities are not able to reduce traffic in response to marking or dropping packets (such as UDP flows).
3.2.2 Algorithm
This section describes the algorithm for RED gateways. RED gateways calculate the average queue size using a low-pass filter. This average queue size is compared with two thresholds: minth and maxth. When the average queue size is less than the lower threshold, no incoming packets are marked or dropped; when the average queue size is greater than the upper threshold, all incoming packets are dropped. When the average queue size is between minth and maxth, each incoming packet is marked or dropped with a probability pa, where pa is a function of the average queue size avg; the probability of marking or dropping a packet for a particular connection is proportional to the bandwidth share of that connection at the gateway. The general algorithm for a RED gateway is described as follows: [5]
For each packet arrival
Caculate the average queue size avg If minth ≤ avg < maxth
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low. The EF PHB requires a sufficiently large number of output ports to provide low delay, low loss, and low jitter.
EF PHBs can be implemented if the output ports bandwidth is sufficiently large, combined with small buffer sizes and other network resources dedicated to EF packets, to allow the routers service rate for EF packets on an output port to exceed the arrival rate λ of packets at that port.
This means that packets with PHB EF are considered with a pre-allocated amount of output bandwidth and a priority that ensures minimum loss, minimum delay and minimum jitter before being put into operation.
PHB EF is suitable for channel simulation, leased line simulation, and real-time services such as voice, video without compromising on high loss, delay and jitter values.
Figure 2.10 Example of EF installation
Figure 2.10 shows an example of an EF PHB implementation. This is a simple priority queue scheduling technique. At the edges of the DS domain, EF packet traffic is prioritized according to the values agreed upon by the SLA. The EF queue in the figure needs to output packets at a rate higher than the packet arrival rate λ. To provide an EF PHB over an end-to-end DS domain, bandwidth at the output ports of the core routers needs to be allocated in advance to ensure the requirement μ > λ. This can be done by a pre-configured provisioning process. In the figure, EF packets are placed in the priority queue (the upper queue). With such a length, the queue can operate with μ > λ.
Since EF was primarily used for real-time services such as voice and video, and since real-time services use UDP instead of TCP, RED is generally
not suitable for EF queues because applications using UDP will not respond to random packet drop and RED will strip unnecessary packets.
2.2.4.2 Assured Forwarding (AF) PHB
PHB AF is defined by RFC 2597. The purpose of PHB AF is to deliver packets reliably and therefore delay and jitter are considered less important than packet loss. PHB AF is suitable for non-real-time services such as applications using TCP. PHB AF first defines four classes: AF1, AF2, AF3, AF4. For each of these AF classes, packets are then classified into three subclasses with three distinct priority levels.
Table 2.8 shows the four AF classes and 12 AF subclasses and the DSCP values for the 12 AF subclasses defined by RFC 2597. RFC 2597 also allows for more than three separate priority levels to be added for internal use. However, these separate priority levels will only have internal significance.
PHB Class
PHB Subclass
Package type
DSCP
AF4
AF41
Short
100010
AF42
Medium
100100
AF43
High
100110
AF3
AF31
Short
011010
AF32
Medium
011100
AF33
High
011110
AF2
AF21
Short
010010
AF22
Medium
010100
AF23
High
010110
AF1
AF11
Short
001010
AF12
Medium
001100
AF13
High
001110
Table 2.8 AF DSCPs
The AF PHB ensures that packets are forwarded with a high probability of delivery to the destination within the bounds of the rate agreed upon in an SLA. If AF traffic at an ingress port exceeds the pre-priority rate, which is considered non-compliant or “out of profile”, the excess packets will not be delivered to the destination with the same probability as the packets belonging to the defined traffic or “in profile” packets. When there is network congestion, the out of profile packets are dropped before the in profile packets are dropped.
When service levels are defined using AF classes, different quantity and quality between AF classes can be realized by allocating different amounts of bandwidth and buffer space to the four AF classes. Unlike
EF, most AF traffic is non-real-time traffic using TCP, and the RED queue management strategy is an AQM (Adaptive Queue Management) strategy suitable for use in AF PHBs. The four AF PHB layers can be implemented as four separate queues. The output port bandwidth is divided into four AF queues. For each AF queue, packets are marked with three “colors” corresponding to three separate priority levels.
In addition to the 32 DSCP 1 groups defined in Table 2.8, 21 DSCPs have been standardized as follows: one for PHB EF, 12 for PHB AF, and 8 for CSCP. There are 11 DSCP 1 groups still available for other standards.
2.2.5.Example of Differentiated Services
We will look at an example of the Differentiated Service model and mechanism of operation. The architecture of Differentiated Service consists of two basic sets of functions:
Edge functions: include packet classification and traffic conditioning. At the inbound edge of the network, incoming packets are marked. In particular, the DS field in the packet header is set to a certain value. For example, in Figure 2.12, packets sent from H1 to H3 are marked at R1, while packets from H2 to H4 are marked at R2. The labels on the received packets identify the service class to which they belong. Different traffic classes receive different services in the core network. The RFC definition uses the term behavior aggregate rather than the term traffic class. After being marked, a packet can be forwarded immediately into the network, delayed for a period of time before being forwarded, or dropped. We will see that there are many factors that affect how a packet is marked, and whether it is forwarded immediately, delayed, or dropped.
Figure 2.12 DiffServ Example
Core functionality: When a DS-marked packet arrives at a Diffservcapable router, the packet is forwarded to the next router based on
Per-hop behavior is associated with packet classes. Per-hop behavior affects router buffers and the bandwidth shared between competing classes. An important principle of the Differentiated Service architecture is that a routers per-hop behavior is based only on the packets marking or the class to which it belongs. Therefore, if packets sent from H1 to H3 as shown in the figure receive the same marking as packets from H2 to H4, then the network routers treat the packets exactly the same, regardless of whether the packet originated from H1 or H2. For example, R3 does not distinguish between packets from h1 and H2 when forwarding packets to R4. Therefore, the Differentiated Service architecture avoids the need to maintain router state about separate source-destination pairs, which is important for network scalability.
Chapter Conclusion
Chapter 2 has presented and clarified two main models of deploying and installing quality of service in IP networks. While the traditional best-effort model has many disadvantages, later models such as IntServ and DiffServ have partly solved the problems that best-effort could not solve. IntServ follows the direction of ensuring quality of service for each separate flow, it is built similar to the circuit switching model with the use of the RSVP resource reservation protocol. IntSer is suitable for services that require fixed bandwidth that is not shared such as VoIP services, multicast TV services. However, IntSer has disadvantages such as using a lot of network resources, low scalability and lack of flexibility. DiffServ was born with the idea of solving the disadvantages of the IntServ model.
DiffServ follows the direction of ensuring quality based on the principle of hop-by-hop behavior based on the priority of marked packets. The policy for different types of traffic is decided by the administrator and can be changed according to reality, so it is very flexible. DiffServ makes better use of network resources, avoiding idle bandwidth and processing capacity on routers. In addition, the DifServ model can be deployed on many independent domains, so the ability to expand the network becomes easy.
Chapter 3: METHODS TO ENSURE QoS FOR MULTIMEDIA COMMUNICATIONS
In packet-switched networks, different packet flows often have to share the transmission medium all the way to the destination station. To ensure the fair and efficient allocation of bandwidth to flows, appropriate serving mechanisms are required at network nodes, especially at gateways or routers, where many different data flows often pass through. The scheduler is responsible for serving packets of the selected flow and deciding which packet will be served next. Here, a flow is understood as a set of packets belonging to the same priority class, or originating from the same source, or having the same source and destination addresses, etc.
In normal state when there is no congestion, packets will be sent as soon as they are delivered. In case of congestion, if QoS assurance methods are not applied, prolonged congestion can cause packet drops, affecting service quality. In some cases, congestion is prolonged and widespread in the network, which can easily lead to the network being frozen, or many packets being dropped, seriously affecting service quality.
Therefore, in this chapter, in sections 3.2 and 3.3, we introduce some typical network traffic load monitoring techniques to predict and prevent congestion before it occurs through the measure of dropping (removing) packets early when there are signs of impending congestion.
3.1. DropTail method
DropTail is a simple, traditional queue management method based on FIFO mechanism. All incoming packets are placed in the queue, when the queue is full, the later packets are dropped.
Due to its simplicity and ease of implementation, DropTail has been used for many years on Internet router systems. However, this algorithm has the following disadvantages:
− Cannot avoid the phenomenon of “Lock out”: Occurs when 1 or several traffic streams monopolize the queue, making packets of other connections unable to pass through the router. This phenomenon greatly affects reliable transmission protocols such as TCP. According to the anti-congestion algorithm, when locked out, the TCP connection stream will reduce the window size and reduce the packet transmission speed exponentially.
− Can cause Global Synchronization: This is the result of a severe “Lock out” phenomenon. Some neighboring routers have their queues monopolized by a number of connections, causing a series of other TCP connections to be unable to pass through and simultaneously reducing the transmission speed. After those monopolized connections are temporarily suspended,
Once the queue is cleared, it takes a considerable amount of time for TCP connections to return to their original speed.
− Full Queue phenomenon: Data transmitted on the Internet often has an explosion, packets arriving at the router are often in clusters rather than in turn. Therefore, the operating mechanism of DropTail makes the queue easily full for a long period of time, leading to the average delay time of large packets. To avoid this phenomenon, with DropTail, the only way is to increase the routers buffer, this method is very expensive and ineffective.
− No QoS guarantee: With the DropTail mechanism, there is no way to prioritize important packets to be transmitted through the router earlier when all are in the queue. Meanwhile, with multimedia communication, ensuring connection and stable speed is extremely important and the DropTail algorithm cannot satisfy.
The problem of choosing the buffer size of the routers in the network is to “absorb” short bursts of traffic without causing too much queuing delay. This is necessary in bursty data transmission. The queue size determines the size of the packet bursts (traffic spikes) that we want to be able to transmit without being dropped at the routers.
In IP-based application networks, packet dropping is an important mechanism for indirectly reporting congestion to end stations. A solution that prevents router queues from filling up while reducing the packet drop rate is called dynamic queue management.
3.2. Random elimination method – RED
3.2.1 Overview
RED (Random Early Detection of congestion; Random Early Drop) is one of the first AQM algorithms proposed in 1993 by Sally Floyd and Van Jacobson, two scientists at the Lawrence Berkeley Laboratory of the University of California, USA. Due to its outstanding advantages compared to previous queue management algorithms, RED has been widely installed and deployed on the Internet.
The most fundamental point of their work is that the most effective place to detect congestion and react to it is at the gateway or router.
Source entities (senders) can also do this by estimating end-to-end delay, throughput variability, or the rate of packet retransmissions due to drop. However, the sender and receiver view of a particular connection cannot tell which gateways on the network are congested, and cannot distinguish between propagation delay and queuing delay. Only the gateway has a true view of the state of the queue, the link share of the connections passing through it at any given time, and the quality of service requirements of the
traffic flows. The RED gateway monitors the average queue length, which detects early signs of impending congestion (average queue length exceeding a predetermined threshold) and reacts appropriately in one of two ways:
− Drop incoming packets with a certain probability, to indirectly inform the source of congestion, the source needs to reduce the transmission rate to keep the queue from filling up, maintaining the ability to absorb incoming traffic spikes.
− Mark “congestion” with a certain probability in the ECN field in the header of TCP packets to notify the source (the receiving entity will copy this bit into the acknowledgement packet).
Figure 3. 1 RED algorithm
The main goal of RED is to avoid congestion by keeping the average queue size within a sufficiently small and stable region, which also means keeping the queuing delay sufficiently small and stable. Achieving this goal also helps: avoid global synchronization, not resist bursty traffic flows (i.e. flows with low average throughput but high volatility), and maintain an upper bound on the average queue size even in the absence of cooperation from transport layer protocols.
To achieve the above goals, RED gateways must do the following:
− The first is to detect congestion early and react appropriately to keep the average queue size small enough to keep the network operating in the low latency, high throughput region, while still allowing the queue size to fluctuate within a certain range to absorb short-term fluctuations. As discussed above, the gateway is the most appropriate place to detect congestion and is also the most appropriate place to decide which specific connection to report congestion to.
− The second thing is to notify the source of congestion. This is done by marking and notifying the source to reduce traffic. Normally the RED gateway will randomly drop packets. However, if congestion
If congestion is detected before the queue is full, it should be combined with packet marking to signal congestion. The RED gateway has two options: drop or mark; where marking is done by marking the ECN field of the packet with a certain probability, to signal the source to reduce the traffic entering the network.
− An important goal that RED gateways need to achieve is to avoid global synchronization and not to resist traffic flows that have a sudden characteristic. Global synchronization occurs when all connections simultaneously reduce their transmission window size, leading to a severe drop in throughput at the same time. On the other hand, Drop Tail or Random Drop strategies are very sensitive to sudden flows; that is, the gateway queue will often overflow when packets from these flows arrive. To avoid these two phenomena, gateways can use special algorithms to detect congestion and decide which connections will be notified of congestion at the gateway. The RED gateway randomly selects incoming packets to mark; with this method, the probability of marking a packet from a particular connection is proportional to the connections shared bandwidth at the gateway.
− Another goal is to control the average queue size even without cooperation from the source entities. This can be done by dropping packets when the average size exceeds an upper threshold (instead of marking it). This approach is necessary in cases where most connections have transmission times that are less than the round-trip time, or where the source entities are not able to reduce traffic in response to marking or dropping packets (such as UDP flows).
3.2.2 Algorithm
This section describes the algorithm for RED gateways. RED gateways calculate the average queue size using a low-pass filter. This average queue size is compared with two thresholds: minth and maxth. When the average queue size is less than the lower threshold, no incoming packets are marked or dropped; when the average queue size is greater than the upper threshold, all incoming packets are dropped. When the average queue size is between minth and maxth, each incoming packet is marked or dropped with a probability pa, where pa is a function of the average queue size avg; the probability of marking or dropping a packet for a particular connection is proportional to the bandwidth share of that connection at the gateway. The general algorithm for a RED gateway is described as follows: [5]
For each packet arrival
Caculate the average queue size avg If minth ≤ avg < maxth
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Qos Assurance Methods for Multimedia Communications
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low. The EF PHB requires a sufficiently large number of output ports to provide low delay, low loss, and low jitter.
EF PHBs can be implemented if the output port's bandwidth is sufficiently large, combined with small buffer sizes and other network resources dedicated to EF packets, to allow the router's service rate for EF packets on an output port to exceed the arrival rate λ of packets at that port.
This means that packets with PHB EF are considered with a pre-allocated amount of output bandwidth and a priority that ensures minimum loss, minimum delay and minimum jitter before being put into operation.
PHB EF is suitable for channel simulation, leased line simulation, and real-time services such as voice, video without compromising on high loss, delay and jitter values.
Figure 2.10 Example of EF installation
Figure 2.10 shows an example of an EF PHB implementation. This is a simple priority queue scheduling technique. At the edges of the DS domain, EF packet traffic is prioritized according to the values agreed upon by the SLA. The EF queue in the figure needs to output packets at a rate higher than the packet arrival rate λ. To provide an EF PHB over an end-to-end DS domain, bandwidth at the output ports of the core routers needs to be allocated in advance to ensure the requirement μ > λ. This can be done by a pre-configured provisioning process. In the figure, EF packets are placed in the priority queue (the upper queue). With such a length, the queue can operate with μ > λ.
Since EF was primarily used for real-time services such as voice and video, and since real-time services use UDP instead of TCP, RED is generally
not suitable for EF queues because applications using UDP will not respond to random packet drop and RED will strip unnecessary packets.
2.2.4.2 Assured Forwarding (AF) PHB
PHB AF is defined by RFC 2597. The purpose of PHB AF is to deliver packets reliably and therefore delay and jitter are considered less important than packet loss. PHB AF is suitable for non-real-time services such as applications using TCP. PHB AF first defines four classes: AF1, AF2, AF3, AF4. For each of these AF classes, packets are then classified into three subclasses with three distinct priority levels.
Table 2.8 shows the four AF classes and 12 AF subclasses and the DSCP values for the 12 AF subclasses defined by RFC 2597. RFC 2597 also allows for more than three separate priority levels to be added for internal use. However, these separate priority levels will only have internal significance.
PHB Class
PHB Subclass
Package type
DSCP
AF4
AF41
Short
100010
AF42
Medium
100100
AF43
High
100110
AF3
AF31
Short
011010
AF32
Medium
011100
AF33
High
011110
AF2
AF21
Short
010010
AF22
Medium
010100
AF23
High
010110
AF1
AF11
Short
001010
AF12
Medium
001100
AF13
High
001110
Table 2.8 AF DSCPs
The AF PHB ensures that packets are forwarded with a high probability of delivery to the destination within the bounds of the rate agreed upon in an SLA. If AF traffic at an ingress port exceeds the pre-priority rate, which is considered non-compliant or “out of profile”, the excess packets will not be delivered to the destination with the same probability as the packets belonging to the defined traffic or “in profile” packets. When there is network congestion, the out of profile packets are dropped before the in profile packets are dropped.
When service levels are defined using AF classes, different quantity and quality between AF classes can be realized by allocating different amounts of bandwidth and buffer space to the four AF classes. Unlike
EF, most AF traffic is non-real-time traffic using TCP, and the RED queue management strategy is an AQM (Adaptive Queue Management) strategy suitable for use in AF PHBs. The four AF PHB layers can be implemented as four separate queues. The output port bandwidth is divided into four AF queues. For each AF queue, packets are marked with three “colors” corresponding to three separate priority levels.
In addition to the 32 DSCP 1 groups defined in Table 2.8, 21 DSCPs have been standardized as follows: one for PHB EF, 12 for PHB AF, and 8 for CSCP. There are 11 DSCP 1 groups still available for other standards.
2.2.5.Example of Differentiated Services
We will look at an example of the Differentiated Service model and mechanism of operation. The architecture of Differentiated Service consists of two basic sets of functions:
Edge functions: include packet classification and traffic conditioning. At the inbound edge of the network, incoming packets are marked. In particular, the DS field in the packet header is set to a certain value. For example, in Figure 2.12, packets sent from H1 to H3 are marked at R1, while packets from H2 to H4 are marked at R2. The labels on the received packets identify the service class to which they belong. Different traffic classes receive different services in the core network. The RFC definition uses the term behavior aggregate rather than the term traffic class. After being marked, a packet can be forwarded immediately into the network, delayed for a period of time before being forwarded, or dropped. We will see that there are many factors that affect how a packet is marked, and whether it is forwarded immediately, delayed, or dropped.
Figure 2.12 DiffServ Example
Core functionality: When a DS-marked packet arrives at a Diffservcapable router, the packet is forwarded to the next router based on
Per-hop behavior is associated with packet classes. Per-hop behavior affects router buffers and the bandwidth shared between competing classes. An important principle of the Differentiated Service architecture is that a router's per-hop behavior is based only on the packet's marking or the class to which it belongs. Therefore, if packets sent from H1 to H3 as shown in the figure receive the same marking as packets from H2 to H4, then the network routers treat the packets exactly the same, regardless of whether the packet originated from H1 or H2. For example, R3 does not distinguish between packets from h1 and H2 when forwarding packets to R4. Therefore, the Differentiated Service architecture avoids the need to maintain router state about separate source-destination pairs, which is important for network scalability.
Chapter Conclusion
Chapter 2 has presented and clarified two main models of deploying and installing quality of service in IP networks. While the traditional best-effort model has many disadvantages, later models such as IntServ and DiffServ have partly solved the problems that best-effort could not solve. IntServ follows the direction of ensuring quality of service for each separate flow, it is built similar to the circuit switching model with the use of the RSVP resource reservation protocol. IntSer is suitable for services that require fixed bandwidth that is not shared such as VoIP services, multicast TV services. However, IntSer has disadvantages such as using a lot of network resources, low scalability and lack of flexibility. DiffServ was born with the idea of solving the disadvantages of the IntServ model.
DiffServ follows the direction of ensuring quality based on the principle of hop-by-hop behavior based on the priority of marked packets. The policy for different types of traffic is decided by the administrator and can be changed according to reality, so it is very flexible. DiffServ makes better use of network resources, avoiding idle bandwidth and processing capacity on routers. In addition, the DifServ model can be deployed on many independent domains, so the ability to expand the network becomes easy.
Chapter 3: METHODS TO ENSURE QoS FOR MULTIMEDIA COMMUNICATIONS
In packet-switched networks, different packet flows often have to share the transmission medium all the way to the destination station. To ensure the fair and efficient allocation of bandwidth to flows, appropriate serving mechanisms are required at network nodes, especially at gateways or routers, where many different data flows often pass through. The scheduler is responsible for serving packets of the selected flow and deciding which packet will be served next. Here, a flow is understood as a set of packets belonging to the same priority class, or originating from the same source, or having the same source and destination addresses, etc.
In normal state when there is no congestion, packets will be sent as soon as they are delivered. In case of congestion, if QoS assurance methods are not applied, prolonged congestion can cause packet drops, affecting service quality. In some cases, congestion is prolonged and widespread in the network, which can easily lead to the network being "frozen", or many packets being dropped, seriously affecting service quality.
Therefore, in this chapter, in sections 3.2 and 3.3, we introduce some typical network traffic load monitoring techniques to predict and prevent congestion before it occurs through the measure of dropping (removing) packets early when there are signs of impending congestion.
3.1. DropTail method
DropTail is a simple, traditional queue management method based on FIFO mechanism. All incoming packets are placed in the queue, when the queue is full, the later packets are dropped.
Due to its simplicity and ease of implementation, DropTail has been used for many years on Internet router systems. However, this algorithm has the following disadvantages:
− Cannot avoid the phenomenon of “Lock out”: Occurs when 1 or several traffic streams monopolize the queue, making packets of other connections unable to pass through the router. This phenomenon greatly affects reliable transmission protocols such as TCP. According to the anti-congestion algorithm, when locked out, the TCP connection stream will reduce the window size and reduce the packet transmission speed exponentially.
− Can cause Global Synchronization: This is the result of a severe “Lock out” phenomenon. Some neighboring routers have their queues monopolized by a number of connections, causing a series of other TCP connections to be unable to pass through and simultaneously reducing the transmission speed. After those monopolized connections are temporarily suspended,
Once the queue is cleared, it takes a considerable amount of time for TCP connections to return to their original speed.
− Full Queue phenomenon: Data transmitted on the Internet often has an explosion, packets arriving at the router are often in clusters rather than in turn. Therefore, the operating mechanism of DropTail makes the queue easily full for a long period of time, leading to the average delay time of large packets. To avoid this phenomenon, with DropTail, the only way is to increase the router's buffer, this method is very expensive and ineffective.
− No QoS guarantee: With the DropTail mechanism, there is no way to prioritize important packets to be transmitted through the router earlier when all are in the queue. Meanwhile, with multimedia communication, ensuring connection and stable speed is extremely important and the DropTail algorithm cannot satisfy.
The problem of choosing the buffer size of the routers in the network is to “absorb” short bursts of traffic without causing too much queuing delay. This is necessary in bursty data transmission. The queue size determines the size of the packet bursts (traffic spikes) that we want to be able to transmit without being dropped at the routers.
In IP-based application networks, packet dropping is an important mechanism for indirectly reporting congestion to end stations. A solution that prevents router queues from filling up while reducing the packet drop rate is called dynamic queue management.
3.2. Random elimination method – RED
3.2.1 Overview
RED (Random Early Detection of congestion; Random Early Drop) is one of the first AQM algorithms proposed in 1993 by Sally Floyd and Van Jacobson, two scientists at the Lawrence Berkeley Laboratory of the University of California, USA. Due to its outstanding advantages compared to previous queue management algorithms, RED has been widely installed and deployed on the Internet.
The most fundamental point of their work is that the most effective place to detect congestion and react to it is at the gateway or router.
Source entities (senders) can also do this by estimating end-to-end delay, throughput variability, or the rate of packet retransmissions due to drop. However, the sender and receiver view of a particular connection cannot tell which gateways on the network are congested, and cannot distinguish between propagation delay and queuing delay. Only the gateway has a true view of the state of the queue, the link share of the connections passing through it at any given time, and the quality of service requirements of the
traffic flows. The RED gateway monitors the average queue length, which detects early signs of impending congestion (average queue length exceeding a predetermined threshold) and reacts appropriately in one of two ways:
− Drop incoming packets with a certain probability, to indirectly inform the source of congestion, the source needs to reduce the transmission rate to keep the queue from filling up, maintaining the ability to absorb incoming traffic spikes.
− Mark “congestion” with a certain probability in the ECN field in the header of TCP packets to notify the source (the receiving entity will copy this bit into the acknowledgement packet).
Figure 3. 1 RED algorithm
The main goal of RED is to avoid congestion by keeping the average queue size within a sufficiently small and stable region, which also means keeping the queuing delay sufficiently small and stable. Achieving this goal also helps: avoid global synchronization, not resist bursty traffic flows (i.e. flows with low average throughput but high volatility), and maintain an upper bound on the average queue size even in the absence of cooperation from transport layer protocols.
To achieve the above goals, RED gateways must do the following:
− The first is to detect congestion early and react appropriately to keep the average queue size small enough to keep the network operating in the low latency, high throughput region, while still allowing the queue size to fluctuate within a certain range to absorb short-term fluctuations. As discussed above, the gateway is the most appropriate place to detect congestion and is also the most appropriate place to decide which specific connection to report congestion to.
− The second thing is to notify the source of congestion. This is done by marking and notifying the source to reduce traffic. Normally the RED gateway will randomly drop packets. However, if congestion
If congestion is detected before the queue is full, it should be combined with packet marking to signal congestion. The RED gateway has two options: drop or mark; where marking is done by marking the ECN field of the packet with a certain probability, to signal the source to reduce the traffic entering the network.
− An important goal that RED gateways need to achieve is to avoid global synchronization and not to resist traffic flows that have a sudden characteristic. Global synchronization occurs when all connections simultaneously reduce their transmission window size, leading to a severe drop in throughput at the same time. On the other hand, Drop Tail or Random Drop strategies are very sensitive to sudden flows; that is, the gateway queue will often overflow when packets from these flows arrive. To avoid these two phenomena, gateways can use special algorithms to detect congestion and decide which connections will be notified of congestion at the gateway. The RED gateway randomly selects incoming packets to mark; with this method, the probability of marking a packet from a particular connection is proportional to the connection's shared bandwidth at the gateway.
− Another goal is to control the average queue size even without cooperation from the source entities. This can be done by dropping packets when the average size exceeds an upper threshold (instead of marking it). This approach is necessary in cases where most connections have transmission times that are less than the round-trip time, or where the source entities are not able to reduce traffic in response to marking or dropping packets (such as UDP flows).
3.2.2 Algorithm
This section describes the algorithm for RED gateways. RED gateways calculate the average queue size using a low-pass filter. This average queue size is compared with two thresholds: minth and maxth. When the average queue size is less than the lower threshold, no incoming packets are marked or dropped; when the average queue size is greater than the upper threshold, all incoming packets are dropped. When the average queue size is between minth and maxth, each incoming packet is marked or dropped with a probability pa, where pa is a function of the average queue size avg; the probability of marking or dropping a packet for a particular connection is proportional to the bandwidth share of that connection at the gateway. The general algorithm for a RED gateway is described as follows: [5]
For each packet arrival
Caculate the average queue size avg If minth ≤ avg < maxth
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Vision, Mission, Core Values, Business Strategy of Vib -
America's Strategy Towards a Knowledge Economy -
Improving the effectiveness of Can Tho Insurance Company's business strategy - 1 -
Vietnam's strategy to attract tourists in the context of global economic recession - 13
3. Limited export, not promoted
back | human resources | |
strong brand abroad | - Limit W1 weakness to take advantage | |
4. Big company but still exists | Use opportunities O1, O2, O4. | |
family management style | (Capacity enhancement strategy) | |
5. General sense of team competition | manufacture) | |
low staff | ||
6. Not really proactive about resources | ||
machinery, equipment, raw materials |
5.3 Difficulties arising in the process of linking strategy with the competitive environment:
The rapid change of the international environment leads to impacts on LOIPHAT in two aspects (creating opportunities and risks), changing very quickly, this makes LOIPHAT's forecasting work encounter many difficulties, because the CLs given have aspects that are outdated following that change. As a result, many policies will have to be adjusted more or less.
Although LOIPHAT has tried many times to bring equipment and machinery into production, it is still slow, and technical training to grasp new equipment has not received due attention. Therefore, if we do not accelerate the innovation of technology and technical equipment, it will be difficult to improve the competitiveness of products in the market.
The workforce is mainly from agricultural labor, young, healthy, and determined. However, the level of education, technical expertise, and professional skills are still low, training is not uniform, lacks practicality, self-discipline is not high, the ability to absorb new technology and master equipment operation is still weak, this is a disadvantage in the process of international economic integration.
The recent global economic crisis in general and Vietnam in particular has significantly affected the financial situation of LOIPHAT, such as the ability to borrow working capital and long-term loans to invest in fixed assets, machinery and equipment, production lines being limited, due to the policy mechanism of banks and financial institutions tightening credit during the economic crisis, this also affects the development of LOIPHAT's production scale.
CHAPTER 6
PROPOSAL TO IMPROVE LOIPHAT'S BUSINESS SYSTEM FOR THE PERIOD 2011-2015
LOIPHAT has completely built a very specific mission, goals, and vision for the period from 2010 to 2015, which are published on LOIPHAT's website. However, within the framework of this research project, based on the analysis of LOIPHAT's SWOT matrix in chapter 5, based on the Delta model and CL map, I would like to recommend adding some content to the existing CLs, and at the same time make some recommendations to better meet LOIPHAT's CL positioning, in the DPM diagram. Find a solution to implement optimal products and services and position the system synchronously according to the Delta model based on LOIPHAT's competitive SWOT matrix analysis, as follows:
6.1. Complete the mission, goals and vision suitable for the period 2011-2015
LOIPHAT is always proud to be the supplier of the most advanced, convenient and suitable IT products for all domestic and foreign consumers, affirming "one brand, millions of trusts". Towards the community "LOIPHAT Furniture - for a prosperous Vietnam". From there, LOIPHAT continues its production and business activities "Convenient products develop professionally", not straying from the original roots in the business development process and always believing in the long-term growth prospects in the IT industry. LOIPHAT continues to invest time, machinery, technology, capital and people to strengthen its position in the IT product production and business environment.
The main goal is: increase the market share of products in the central and northern regions. Beat competitors in product quality and customer service. Operational efficiency achieves lower costs than competitors, increasing brand reputation with customers. Achieve a superior position, outstanding technological features for each type of product. Seize attractive growth opportunities. Build a solid position in the domestic and foreign markets, and become the leading IT industry group in Vietnam.
6.2. Diversify products and services according to advantages to enhance competitiveness
6.2.1 Technology solutions :
There is a technical department that regularly monitors and researches new advanced foreign techniques in the IT industry, participates in annual IT industry technical exhibitions around the world to update new technologies, to be able to invest, improve technology, take the lead in creating new, quality products, suitable for domestic needs and orienting for export expansion.
6.2.2 Input material solutions:
Currently, LOIPHAT's input materials are mainly from domestic suppliers, with factories in Ho Chi Minh City, so it is quite convenient. Most of the materials are domestic and some are imported, all through supply bidding, so the price is basically stable.
For the use of raw materials in the production process, it is necessary to build a process, quantify raw materials reasonably for production workers, as well as allocate costs for purchasing small-scale raw materials to create initiative for raw material sources.
6.2.3 Solutions for production and product quality management :
Expanding product lines, having long-term production plans to maximize the capacity of machinery and equipment, increasing investment in machines with the most modern technology from existing asset depreciation sources and development investment sources.
Research to rationalize production stages, minimize input material loss, cut unnecessary stages... to reduce costs.
There is a policy of rewarding and encouraging initiatives to improve production techniques, increase productivity of machinery and equipment, and replace domestic components to reduce costs.
6.2.4 Separate product development strategy:
As analyzed above, LOIPHAT's CL positioning is customers for all activities, targeting customers with many different values. Therefore, LOIPHAT continuously researches and develops new products with high quality value, based on market trend research for the next 3-5 years specifically as follows:
- Improve SP features.
- Quality improvements to increase reliability, durability, or other features of the
SP.
- Improve the aesthetic appearance of the product by changing the color and design.
packaging design, product structure.
- Continuously develop new designs.
6.3. Expanding market – customers
6.3.1. Domestic market development :
Conduct market penetration, find ways to grow the current market with the products and services currently being produced and traded with the following methods:
- Increase market share of the enterprise.
- Increase purchasing power of the company's products and services through customers using the products regularly or using them in larger quantities at a time.
- Attract customers of the other party to buy the company's products through competition in products, prices, places of consumption and promotions.
To implement this strategy, the Marketing department must answer the following questions:
after:
Why do customers buy our products?
Why do customers buy products from our competitors?
What makes customers like our products? What do customers dislike about our products?
On the basis of determining specific marketing measures to achieve market penetration
bigger school..
Looking for new markets to consume the products that LOIPHAT is currently manufacturing,
That is, finding new consumers in unpenetrated markets to boost consumption of products. Specifically, there are 9 ways to create product demand as follows:
EXISTING
IMPROVE | NEW | |
Sell more than the current number of products to LOIPHAT's current customers (Penetration) market). | Improve your current products, and sell more of your existing products to your current customers. (SP Improvement). | Create a new product that can appeal to current customers (New Product Development). |
Penetrate and sell products in new markets (expand in terms of) geographical aspect). | Offer improved products at new markets in terms of geography. | Create new products, in the future sell in new markets geographically |
Sell existing products to | Offer improved products for sale | Create new products and sell them to |
new customer
new customer | new customer |
In order for CL to effectively penetrate the market, LOIPHAT has approved exhibitions, fairs, sponsorship programs, advertisements on newspapers, radio, television, mobile delivery vehicles, distributors, showroom systems and retail stores... to advertise products and LOIPHAT HOME FURNITURE brand image .
6.3.2 International market development:
CL seeks the comparative advantage of LOIPHAT's products compared to the products of competitors in the host country, to boost exports. This is a winning attack when doing business in the international market. To do this strategy, LOI PHAT needs to:
- Product price must create competitive advantage with other products in the market being traded.
- Product quality is significantly higher than other countries.
- Savings through large-scale production, purchasing, supply, and marketing.
- The product is manufactured using the same technology that LOIPHAT holds the copyright for.
- Must penetrate new markets abroad, trying to gain market share from established competitors.
- Invest in new technology to have new products.
- Consider the human resources that can be selected for exploitation and use.
- Establish manufacturing facilities in cheap manufacturing areas of the world.
- Establish good governance systems, ensuring that managers in foreign markets understand the nuances of culture and language in the host country.
- Make global decisions on CL issues for products, capital and research, but leave tactical decisions to local authorities on packaging, marketing and advertising issues.
- Overcome narrow-mindedness, train people with international thinking. Send them out regularly to transfer the latest and most modern technologies.
- In markets that are difficult to penetrate, look for allies.
Currently, LOIPHAT is very successful in the urban market segment with mainly mid-range products, and depending on each product line, LOIPHAT exploits the superior features of the production line, or invests in upgrading technology and product quality to serve the different needs of each customer group. At the same time, LOIPHAT needs to survey and
Research export markets to produce products that suit the needs and tastes of local customers, offer appropriate and flexible prices to compete with domestic products when penetrating different export markets.
* More specifically, LOIPHAT should have solutions to reduce costs and reduce product prices reasonably to be able to exploit the majority of customers in rural areas, accounting for nearly 70% of the country's population with low-middle income.
To have a CL to expand market share, LOIPHAT should pay more attention to the rural market, by researching and developing more product lines with quality, but prices suitable for low and middle income customers in rural areas. To implement CL, price some products at an average level to exploit customer market share.
With low average income but still ensuring profit, LOIPHAT needs specific solutions:
- Make the most of the capacity of currently unused machinery and equipment, be more proactive in finding stable sources of input materials at low prices.
- Improve the skills and qualifications of production workers, minimize the loss of raw materials in production, review and eliminate stages that do not create value.
6.4 Integration CL:
In fact, manufacturing enterprises cannot consume all their products, so they depend on output, and are often forced to lower prices by other enterprises, through demanding high discounts, causing the final profits of manufacturing enterprises to decrease, even losing to consuming enterprises. To solve this problem, enterprises need to use integration strategies. To increase production and business activities through integration strategies, follow the following 3 options:
6.4.1 Business growth through backward integration:
Find every way to grasp the suppliers of input factors such as: Main raw materials, spare parts and equipment, capital, labor supply. To be completely proactive in quantity, quality, type, and time to serve the production and business of the enterprise.
This linkage is also beneficial in shifting the focus from current costs to potential profit.
6.4.2 Business growth through forward integration:
Strategy of acquiring, taking ownership or increasing control over the enterprise's product consumers such as retail and product distribution systems.
Usually, consumers operate independently, so they often put pressure on manufacturing enterprises such as: demanding lower prices, at the same time, products must be of higher quality, better designs, requiring slower payment... This makes enterprises passive in debt collection, and products are consumed slowly.
To solve the above problem, it requires manufacturing enterprises to integrate with consumers to ensure that products are consumed well.
This favorable strategy has the ability to attract consumers of fast-growing products. Besides creating the ability to diversify products and avoid fierce competition from manufacturing enterprises.
6.4.3 Horizontal integration strategy:
Normally, products are supplied in the market by many manufacturing enterprises. This leads to fierce competition, including attracting suppliers of input factors and consuming output products of the other enterprise to their own enterprise. Therefore, it causes difficulties for enterprises in ensuring production and consumption of products. To overcome this difficulty, enterprises carry out horizontal integration by acquiring or taking control of competitors to increase efficiency.
6.5. Risk prevention strategies:
In production and business activities, enterprises often encounter some risks, these risks have a significant impact on production and business. The following are some risks that LOIPHAT needs to have a prevention strategy such as:
6.5.1 Risks related to partners :
- Fraudulent behavior.
- Inability to perform the Contract.
- Partners without legal status, representatives without authority
legal
- Incomplete and incorrect performance of the contract.
- Failure to perform the contract due to force majeure.
-Limited solution :
Carefully investigate the legal status of the partner.
Execute the contract to pay part of the bank guarantee in advance.
Specify the penalty level for breach of contract or take legal action.
List the force majeure events and specify the responsibilities of each party in the event of a force majeure event.
6.5.2 Risks related to negotiation content :
- Lost opportunities with new customers.
- Unable to find a solution that is beneficial to both parties.
- May suffer loss in business efficiency compared to partners.
- Risk of losing customers causing conflicts.
- There is no basis for dispute resolution.
-Limited solution:
Clearly define your goals and carefully prepare your negotiation content.
Carefully consider costs and revenues to avoid losses in business results. Understand your partners and apply flexible negotiation principles.
Discuss the terms of the contract in detail and fully. Have appropriate compensation policies.
6.5.3 Payment risks when exporting :
- The buyer is incapable or intentionally fails to pay.
- Payment is not made according to regulations due to financial difficulties or payment delays by the buyer.
- Buyer refused to receive the goods.
-Restrictive measures: