Professional Documents
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Managerial Economics
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ME-DH42ISB-3
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Ta Le Thuy Duong
Do Ha My
31141023662@student.isb.edu.vn
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11/12/2017
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11/12/2017
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Group 4
Ta Le Thuy Duong
Banh My My
Do Ha My
ME-DH42ISB-3
Abstract
This report will discuss about MWG (thegioididong.com, dienmayxanh, etc) company by
applying theory of managerial economics into report analysis. Specifically, we analyze Internal,
External Factors of company, applying SWOT and Porter Five Forces Model to condense
Introduction
The report concentrates on MWG company analysis, there are five main parts including Internal
Analysis, External Analysis, Five Forces Model, SWOT Analysis and Solution. Retrieving many
evidences, financial or operation indicators, achievements and more to support for report’s
analysis.
Literature Review
Porter Five Forces Model
Porters Five Forces Model identifies 5 competitive forces that managers consider when
analyzing the external environment and formulating strategy. Collectively these forces provide
industry structure – industry structure can work to constrain or enhance firm profitability.
Typically one or two forces will be dominant. As a rule of thumb, the stronger the industry
forces, the lower the industry profit potential, making industries less attractive and vice versa.
Supplier Power
Inputs into production processes include raw materials and components, indirect
materials, labor, and services. There are some indicators for supplier power includes Market
Buyer Power
Buyers (consumers) can suppress the profitability of the industries from which they
purchase by demanding price concessions or increases in quality. When buyers obtain price
discounts, it reduces the firm’s top line and directly reduces profitability. Important factors affect
Buyers power includes Volume Demand, Switching Costs, Backward Integration, Available
Threat of Substitute
Threat of substitute products relates to how easily an industry’s customers can switch to
an alternate product, one typically provided by a different industry. Buyers can suppress the
profitability of the industries from which they purchase by demanding price concessions or
increases in quality. Important indicators for threat of substitutes includes Number of Substitutes,
If the firms in an industry are highly profitable, the industry becomes a magnet to new
entrants. Unless something is done to stop this, the competition in the industry will increase, and
average industry profitability will decline. Know-how can level the playing field and bring
barriers to entry down. There are vital impact of threat of new entrances which is Capital
single firm. For example of MWG retail, there are Thegioididong as mobile phone appliance,
Concentration Industry
Concentration ratios measure how much of the total output in an industry is produce by
the largest firms in that industry. The certain indicator of concentration is market share ratio.
Economics of Scale
Economies of scale exist whenever long-run average costs decline as output increases
Economics of Scope
Economies of scope exist when the total cost of producing two products within the same
firm is lower than when the products are produced by separate firms, that is, when it is cheaper to
Methodology
This report utilized secondary data with transparent information from official reports of
Vietnam listed firm on stock market, MWG. Some information are retrieved from government
website, and trusted data sources. Through critical and logical thinking process to select,
categorize and condense all information about retail industry and MWG to support evidence
Company Analysis
Internal Analysis
Company Background
Mobile World Investment Joint Stock Company is a retailer group in Vietnam, mainly operate in
the mobile phone retailing field. According to MBS report in September 2016, Mobile World
owned 30% of the market share, thus is the leading brand in mobile phone retailing market.
Product line
Mobile World Investment Joint Stock Company operates three retail chains thegioididong.com
Over the past years, the company has continued to explode and despite the situation, economic
advantages or disadvantages.
Thegioididong.com was established in 2004 and specializes in selling retail of mobile digital
products including mobile phones, tablets, laptops and accessories with over 1,000 supermarkets
in 63 provinces and cities across Vietnam:
1. Mobile Products: The company currently offers most of its line of phones
Vietnamese schools from the high-end to the popular. In particular, the product line is under
5 million billion high in sales, over 80% of sales. Only Apple product line is required to
enter products from distributors (FPT and Viettel), all other models are imported directly
from the supplier
2. Accessories: Sales from this segment accounted for 20-30% of total sales of the business
segment thegioididong.com. According to the company's share, the MWG is still not
satisfied about the market share of this business segment and realize the potential growth is
very large, so in the future will continue to push strong increase in sales from this high
margin product line.
3. Networking Products (SIM): currently supplying sims of the 3 largest network in
Vietnam: Mobiphone, Viettel, Vinaphone. This product line will be used by the business to
implement the chapter customer care in the following years.
By the end of 2016, thegioididong.com continue to confirm its leading position with 950
supermarkets across the country.
Dienmay.com chain was launched in late 2010 specializing in retailing consumer electronics
products such as televisions, karaoke machines, refrigerators, washing machines, rice cookers,
vitamins, irons, electromagnetic stoves, microwave vacuum cleaners, and digital products such
as cell phones, tablets, laptops and accessories. On 04/5/2015, the dienmay.com supermarket
system was renamed Green Supermarket with 40 supermarkets in 63 provinces (website
dienmay.com will be replaced. by new website dienmayxanh.com) to help customers easier to
recognize and communicate. 2016 marked the development of overtaking from 70 supermarkets
at the end of 2015 increased up to 250 supermarkets by the end of 2016.
The company has built a distinctive customer service with customer-centered culture in every
thought and action. The company has made efforts to build a dedicated team of customers and
build a customer-centered website thegioididong.com and dienmayxanh.com.
The gioi di dong's efforts and achievements have been recognized by the community as the
number of customers visiting shopping centers has exploded over the years. Mobile World is
also recognized by many prestigious domestic and international organizations as Global Business
Forum, World Top Five Fast Growing Companies, - Pacific Asia 2010 (Euromonitor
International), Top 500 Retailers in Asia Pacific for 6 consecutive years 2010 - 2015 (Retail Asia
Magazine) and many other domestic awards such as House The most trusted retailer, the best
mobile retailer, a mobile retailer with the best customer support ... The development of the
Mobile World is also a good example to be studied, rescued and introduced at leading
universities such as Harvard, UC Berkeley, Tuck Business School (USA).
The department now has breakeven point with a gross margin of 14%, up from 10% at the end of
last year. Profit margins were boosted in part by widening the scale of operations and also by the
fact that most of the goods were purchased directly from producers or farms. The company also
plans to expand into pharmaceutical retailing next year with a modest target of having around 50
or 60 stores in its first year.
MWG 2020 is the most versatile multinational retailer, reigning the No. 1 position in e-
commerce, successfully expanding its business in Laos, Cambodia and Myanmar. MWG is
constantly improving to provide customers with the most enjoyable and satisfying experience
based on the customer-centered and Integrity-based culture.
Development History
Mobile World Co., Ltd. was established in March 2004, the main field of activity of the company
includes: trading and repairing equipment related to mobile phones, digital devices and other
fields related to e-commerce.
After three months of establishment, the company launched the website www.thegioimobi.com
and three small shops at Hoang Van Thu, Le Lai and Cach Mang Thang 8 (Ho Chi Minh City).
In October 2004, the Company decided to replace its retail stores with the opening of a larger
and more complete supermarket at 89A Nguyen Dinh Chieu, Ho Chi Minh City, the original
name of the supermarket is www.thegioimobi.com (later changed to thegioididong.com).
With a size of over 200 m2, this well-built supermarket has been a huge success since it was
completely different with more than 10,000 small mobile phone shops at that time in Ho Chi
Minh City. Customer service and website have been caring and attention since the first day.
In 2007, Mobile World Co., Ltd received the investment capital of Mekong Capital, converted
into a joint stock company to expand its development opportunities.
By the end of 2009, the company has a total of 40 supermarkets across the country.
From 2010 to 2011 marked the rapid development with the success of the supermarkets
thegioididong.com across the country. By the end of 2010, the company doubled the number of
supermarkets compared to 2009; By the end of 2011, the number of supermarkets increased
more than 5 times compared to 2009.
By March 2012, with the opening of the supermarket in Bac Giang, thegioididong.com has
completed map coverage throughout the territory of Vietnam. This is the first and only mobile
retail system available in all 63 cities and provinces across the country.
From then on, Thegioididong.com continues to maintain its position as the number one mobile
retailer in Vietnam, completely different from other retailers.
Growth Strategy
In 2016, thanks to its strong efforts, MWG has achieved sales milestone of over 2 billion
dollars, making MWG the largest retailer in Vietnam. On this growth, MWG continues to
maintain a dominant market position and widen the gap compared to other retail chains.
In 2017, MWG's revenue is expected to grow strongly from all retail channels:
thegioididong.com chain, Điện máy Xanh chain, the online channel from the web site of these
two chains and the Bách Hóa xanh are available and ready to expand. Focus on quality – not
quantity – for the thegioididong.com chain. Increase and maintain the quality and quantity of the
Supermarket chain department Bách hóa xanh completed the testing phase by the end of
2016 and will continue to improve, "winning formula", while expanding to meet the criteria Buy
Online selling is still a strength of the MWG in the coming years. With a technology
platform was invested basically, MWG build a solid foundation for business website online
vuivui.com, ready to take off in the next 2-3 years, is expected to be contributed to the revenue
market share of thegioididong.com phone sales to over 45% through the growth of sales of old
supermarkets and open about 100 new supermarkets in 2017. Maintaining service quality and
promote the expansion of the chain Điện máy Xanh , especially the mini supermarket model with
approximately 200 new stores, aims to occupy 25% market share of electronics in Vietnam in
2017. Moreover, MWG completes the "winning formula" for the Bách hóa Xanh store chain and
enter the expansion phase in 2017 and promotes e-commerce, online sales reached gave a 100%
growth compared to 2016. And finally MWG is looking for opportunities to conduct M & A with
other retailers.
construction. In 2016, MWG has fulfilled its tax obligations, specifically contributing to the state
budget nearly 500 billion. At the same time, MWG regularly promotes activities and campaigns
devices such as recyclable materials, LEDs, and auto-off timer. Since 2013, MWG supermarkets
are equipped with an automatic light sensor that lights up the sign, at 6 pm or when it is dark
enough and turn itself off at 10 pm every day. The company itself designed the system
automatically lights, air conditioning at 7 hours and off at 23 hours a day at the supermarket.
In addition, MWG constantly attract and recruit human resources, creating a favorable
working environment for new employees to integrate and adapt to the fastest work. In 2016,
along with the expansion plan, MWG strengthens the employment of new employees and
improves the promotion of fairness and transparency for former employees to ensure efficient
operation of the supermarket systems. In 2015 and 2016, MWG is honored to receive the "Best
In addition to contract wages, the MWG implements a wide range of salary and bonus
policies to recognize and motivate employees to stay engaged and work more productively.
All employees who work for 6 months at the MWG can either stand for their own
positions or transfer to other departments, as well as other locations in the system. MWG also
Marketing
The Điện máy xanh is the backyard of thegioididong. Being aware of such a business
situation, MWG has decided to spend hundreds of billions of dong on brand building in the last
channels and devotes less effort to promoting social media channels, and became a phenomenon.
Launched in early November, with fun images, catchy melodies, this ad has been well-
known but the explosion and becoming a trend on social media is really an unexpected success. .
Considering the discussion on social media, the advertising of the Điện máy xanh has attracted
more than 400 thousand articles and discussions, more than 3.4 million times interact with more
It can be said that the best thing is that green electricity is not as big as it feels, it's just a
part of it, the rest is largely due to reprocessing it. As a result, it is spreading like a virus across
social networking sites. Although receiving negative feedback, but in view of the original goal is
to spread the message: Everybody wants to buy electrical appliances, the word "Điện máy xanh"
External Analysis
Competitors
It is easy to realized that The gioi di dong now has making up the largest part of market
share in retail market, which means that, The gioi di dong has been being handled Saigon Coop,
Bic C to become the largest and the most powerful retailer in the entire market, according to Top
This is the statistic that implies to the retail company fully embracing all the fields in
retail market. When we say that The gioi di dong has been the biggest retailer in the market, it is
easy to consider The gioi di dong now might not be competed by any competitors.
However, in contrast with the considerably growing revenue from 2014 to 2016, there are
some researches stating that economic growth of The gioi di dong has decreased about 30
percent in 2016, and the downtrend of economic growth is worsen time by time.
Because of both slower economic growth and entry of new companies, The gioi di dong
thinks that this is not only the right time to expand more, but is the time to improve the quality of
In particular, according to The gioi di dong's CEO financial report in October, 2017, The
gioi di dong has opened 599 supermarkets nationwide. This number consists of 116 markets
named Thegioididong.com, 310 markets named Dien may xanh and 173 markets of Bach hoa
xanh. Until 10/2017, there are total 1854 markets is operating to serve customer.
This is the result from entry of new companies in retail market. As we know, the
branching which earns most profit for The gioi di dong in the past and in the present is always
mobile retail market. However, in comparison to 2012 when The gioi di dong is the monopoly,
in 2017, this market has 4 big companies to share the market. These 4 biggest companies is The
gioi di dong (making up the largest part), Viettel in second, FPT Shop in third and Vien Thong A
The below statistic states that The gioi di dong accounts for the largest part in mobile
retail store. However, Viettel and FPT Shop, Vien Thong A is expanding their store network,
whereas the profit of The gioi di dong is continually decreasing, it has no choice but improve
their quality and serivice, insteand of competing with the others by expanding their network.
One of the striking strategies of The gioi di dong to maintain their position in mobile
retail market is that they choose to approach the rural areas, where others’ choice is focusing on
urban areas. The result from this strategy shows that The gioi di dong is now in a great chance to
be the most powerful retailer in rural areas, which will increase again their revenue and then the
profit.
Customers
As we know, The gioi di dong has target customer in all ages, all class in the social.
However, because of the focusing on electronics devices retail (cell phone retail in particular),
the major customer of The gioi di dong is from 18 to 35 years old. This range is the point
customer of The gioi di dong with a view to their strong purchasing power.
To compete with the other competitors, The gioi di dong chooses to approach customer in
rural areas, which means that they have two major groups of customer: customer rural areas and
customer in urban areas. However, owing to the strong purchasing power and strong will to catch
up new trend, customer in urban areas is still the one who bring to biggest profit to The gioi di
dong. In addition, The gioi di dong has been expanding their network in rural areas with the
As a result, despite the slower economic growth, profit of The gioi di dong still
considerable increase in both 2016 and 2017. They reach more than 63 billion Vietnamdong,
population, trend of customer behavior now give a big advantage for The gioi di dong over the
other competitors. Along with brand loyalty which has been growth from the past to now owing
to good quality and customer services, brand awareness is also on expansionary phase give the
assistance to The gioi di dong that makes customer choose them as a prior choice. Likewise, sale
from returning customer plays an important role in increasing The gioi di dong’s total profit as
well.
Suppliers
In the past, not only The gioi di dong but also the other companies in mobile retail market
is essential to import products like mobile, laptop, electric devices from intermediate distributors.
However, this is just a story happened in the past. Nowadays, it is not necessary for any mobile
retail company for importing from intermediate distributors. They have the chance to import
directly products from the vendors that will decrease their cost for distributors and then
This is the result when such big companies as The gioi di dong, Viettel or FPT Shop has
the power to negotiate the market. These powerful companies are able to sell all their products,
gain the large market share and then, they might cooperate with the vendors to increase profit, in
an active manner.
However, this is not a win-win game. Althought The gioi di dong, which is the lead
company to be in this way, can increase their profit by import products directly, they are still at
For example, time for importing directly from vendors is always longer than importing
from intermediate distributors, which will be possible to lead to the high risk of price volatility or
changing in customer behavior. Also, high competition and stock-in-trade maintained in long
time will also be the risk that The gioi di dong must face with.
Thegioididong.com Model 5 Forces
In general Thegioididong is in the perfect competition industry which has many small
smart phone competitive retailers and stores across Vietnam with commodity products
(Samsung, Apple, Oppo etc) and firms are price takers. However, Thegioididong takes the lower
industry forces which leads to the firm’s potential is higher than others.
The most important factor that makes Thegioididong currently is the leading smartphone
retailer in Vietnam is Economy of Scale and Enterprise Resource Planning System from 2004
reducing Cost of Expenditure and increasing the bottom line of the firm drastically.
Smartphone to import directly the products and not going through any intermediaries. Secondly,
the highest penetration, a lot of available stores and popular brand across Vietnam that lead
Thegioididong take the most vital role in increasing revenue for their suppliers (40% smartphone
market share). Win-win cooperating relationship is that, however, Thegioididong has more
Consumer have many choices of Stores, Price Preferences and Promotion with the same Product
high technology smartphone and best service (such as omni-channel, promotion, guarantee
policy). Besides, the lack of high-service mobile phone stores in countryside and provinces in
Vietnam lead to low buyer power. With this combination of situations, Thegioididong is the only
retailer can apply consumer needs because of their economic of scale across country (420 stores
Vietnam mobile phone market growth is approaching saturation threshold which is just
one digit 8% to 9% growth per year. Moreover, Thegioididong is standing toughly in the market
with solid working capacity and ERP system thoroughly many years following with lots of
substitutes outside, it is too hard for new entrants to jump into smartphone Vietnam market to be
The leading mobile phone omni-retailer in Vietnam taking up 40% market share and 80%
of revenue for company parallel with strong capital investment, outstanding ERP to give out the
best service, Wide distribution channels and ultimately economic of scale. The rivalry among
Dien May Xanh has lower competitive strength compared to Thegioididong. There are
some significant factors includes electronic appliance demand is not as high as smartphone, older
current competitors as Nguyen Kim electronic, Cho Lon electronic. However, currently, Dien
May Xanh is growing and hitting up Nguyen Kim electronic toughly with the same revenue at
High Available substitute such as the leading Nguyen Kim, Dienmaycholon or Vinpro.
Dienmayxanh mark the milestone of highest available stores across Vietnam (250 stores) more
than the leading Nguyen Kim. Such that economy of scale attract suppliers by increasing product
penetration in Vietnam.
Diemayxanh faces more challenges than their mobile phone business because of the
consumer electronics lifecycle replacement rates were over 5 years, even over 10 years while this
rate for mobile phone was only 2 years. However, higher penetration in the future with fiercely
investment, dienmayxanh target to be the leading name not only in cellphone but also in
electronic appliances.
The number of electronics retailers is not as much as mobile phone because of heavier
investment. Higher-income of consumer is also increasing with higher facility of life. Besides,
product penetration is currently low in Vietnam provinces. These are opportunities for new
Dien May Xanh is now taking up 16% of market share which is also medium
concentration ratio, creating revenue as the leading Nguyen Kim and increase economy of scale
SWOT Analysis
Strength
Currently leading the Vietnamese phone market share with retailing system running
across the country: MWG now owning more than 30% market share in market phone retailing.
At the same time, the Company has a total of 1771 thegioididong.com branches and 625
supermarkets (updated in 2017). Which, roughly 30% thegioididong.com shop opened in the city
Ho Chi Minh City and Hanoi and over 40% of shops in other major cities in the country.
in the market: MWG imports all products directly from phone vendors (except for Apple
products) and is currently affiliated with the 3 main network providers in Vietnam: Vinaphone,
Enterprise Resource Management System (ERP) efficiency: MWG build ERP system
from the first day of establishment in 2004. The system helps businesses effectively manage
investment organizations: More than 80% of MWG's shares are owned by internal shareholders
and major shareholders. Hence the proportion of stocks retained MWG is relatively low (after
the elimination of shareholder ownership over 5%). In addition, the foreign ownership rate at
MWG hit 49%. According to the share of business, every foreign investors in the MWG
participate in the form of financial investment. In there, there are two investment funds Mekong
Enterprise Fund II (holding 11.4% of MWG shares), CDH Electric Bee Limited (9.4%) invest in
MWG before IPO. According to our estimates, market price (after adjusting dividends and more)
of the MWG has increased more than 100% compared to the time of listing. Therefore, the
shareholders realization of profits will be a risk to take into account the short-term price
Stable online realization level: Through Google keyword research, almost all keywords
thegioididong.com and dienmayxanh.com. At the same time, according to Alexa, the website
ranking service provider, thegioididong.com also ranked the highest traffic relative to websites of
major competitors in the industry. This shows that thegioididong.com is keeping the advantage
of reaching new potential customers. Because, when buying electronics products, customers tend
to seek information on Google before approaching the actual product at the store.
High chances that the company will have to face reduce marginal revenues in the near
future: With the competition of power producers, the price of products is in the decreasing trend.
As a result, the profit margin for retailers might be reduced. At the same time, rivalship in the
field is increasing so the company may have to reduce marginal profit to increase incentives,
Risk from over-reliance on the product: Nearly 90% of MWG's sales are coming from
retailing phone and electronic products so the company’s profit might be plummeted or slow
Fields other than phones has yet to develop a solid position in their respective market:
Currently, thegioididong.com is their best brand name. Dienmayxanh.com has gain relatively
high recognition lately but there are still too many fierce competitors. At the same time,
Opportunities
The phone market is still growing well short term: In 2017, Vietnamese electronics
market, according to GFK data, Vietnam electronics market grew 9.6% in Q3 / 2017 compared
to the same period last year. This includes the strong growth of electronics, telecommunications,
home appliances, refrigeration and digital appliances. In it, the smartphone market in Vietnam
will rank 9 worldwide in sales value growth. Besides, according to market research firm TNS,
the ratio penetration smartphone Vietnam will raised to 50% from the current 36%.
In the retail market of electronic products, there are still plenty of potentials for the new
store chain: Currently, large stores chain such as Nguyen Kim, Chợ Lớn Electronics has not yet
too penetrated into the provincial market. For example: Nguyen Kim just opened Ho Chi Minh
City, Hanoi and 9 southern provinces (mainly East and South West); dienmaycholon.com are
currently available in Ho Chi Minh City and 10 southwestern provinces and two central
provinces. The Cambodian market will replace the deceleration of revenue growth
Thegioididong.com chain in the domestic market: Although less developed than Vietnam,
Cambodian phone market recorded impressive growth in recent years, according to which the
proportion of phone usage is expected to reach 94.5% in 2015, according to the Asia Foundation.
However, the rate of use of smart phones is only 39.5%, suggesting demand of replacing phone
when technology is improved makes multi-smartphones more usable and especially cheaper.
The expansion of Dienmayxanh chain will maintain the revenue growth of Thegioididong
in the next 1-2 years: Better profitability due to advantage from economies of scale will be
Even though coming later, Dienmayxanh is expanding rapidly both in terms of numbers
of stores and sales. Net sales of electronic machine also increased 207% over the same period to
10,129 billion in 10T2016. Market share of the brand also increased significantly to 16% in
We expect more than 3,000 branches Bachhoaxanh in big cities in Vietnam. High probability of
Although Bach Hoa Xanh still facing losses, sales has reached 1 billion/shop/month,
doubling the expected revenue of 500 million VND/shop/month and show more potential
prospects.
Threat
Competitors to increase market share: Brands with similar sale system of MWG are
Phone market growth is progressing about the saturation threshol: In medium and long
term, billion penetration rate of smartphones in Vietnam will advance to the average of
long term, smartphones market grow only one digit, about 8-10%.
Experts in field spectate that Thegioididong and Dienmayxanh will reach a peak in
revenue and will be hard to grow thanks to extension. Therefore, the MWG will have to rely on
Electronic business involves many risks than business phone products: Electrical
products have an average life cycle of 5 years with some products having over 10 years while the
replacement phone product rate is only approx 2 years. Dual retail growth in the period 2013-
2018 of electrical products in the market Vietnamese schools only 3-9% (depending on the
product Products). Profit margin of electronic products business is lower than machine phone
mobile devices field as well as the electronic appliances will decreased significantly. In addition,
potential customers to the technology class is mostly between 15 and 30 years old, is forecasted
to decrease in the proportion of the population, will bring many obstacles to the growth of the
industry.
December 2016, although the Bách Hoá Xanh achieves a revenue of VND 1 billion per store per
month, but the chain of stores still facing losses, this required the company to make changes in
On the other hand, besides the technology products, the FMCG sector of the company, namely
the Bach Hoa Xanh system, faces the same risk. In fact, FMCG items have extremely short shelf
life, such as fresh produce that can only be left for a few days. Thus, inventory management is
considered a decisive factor in MWG' s business strategy.
To solve this problem, along with the planning of market-based procurement and human
resource training, modern management software is the optimal choice. In particular, inventory
stability requires careful monitoring and accurate calculation. Management software will take on
the role of providing accurate and complete data, some advanced functions can also provide
specific suggestions for each commodity status, saving time and eliminating subjective factors in
decision making. In addition, management software is the solution to store large amounts of data
in a uniform way. This will be beneficial in supporting sales in different areas with different
needs. However, the suggestions from the software should only be considered as references,
because the nature of the market is very sensitive and fast-changing.
In addition, for the fast moving consumer goods industry, the role of management software is
less important than human decision making. Simply because food deterioration is more
dependent on environmental factors, which management software will not handle. In addition,
the market demand for these commodities is constantly changing and the ability to address the
situation of employees in the retail system plays an important role. Therefore, staff training and
reward policy should be paid attention and effective investment.
On the other hand, due to the constant development of technology, and the increasing risk
associated with the ever-expanding market, updating the management software also plays an
important and necessary role. The security of using the software is also a priority in the selection.
Loss of goods
As one of the largest retail chains in Vietnam, the loss of goods is unavoidable and one of the
major problems of the MWG. The cause of the leakage is not statistically significant, but two
main causes are human behavior and damage to goods.
Currently, according to information published on the official website of the MWG, the company
is applying the principle First In First Out to sell. In fact, this can be considered as an effective
direction, as the longer the stocking period, the greater the risk of damage and devaluation of
commodities. In particular, if the Last In First Out principle is applied, the company will
facilitate the theft of goods because of the difficulty in controlling the situation of previously
imported products.
In terms of human management, building consciousness can be seen as necessary and effective
prevention. With a large and varied number of employees in terms of age, qualifications, culture,
values, etc., the establishment of a fair, but reasonable punishment and rewarding system can be
viewed as the most effective, having a direct impact on the goal of minimizing losses.
In business, there is a familiar notion that is "allowable loss rates". According to the theory, this
definition is used to indicate the number of products allowed to be lost or damaged on the total
number of products in the store of retail outlets. One way, though somewhat risky, promoting
self-discipline, is to say no to "allowable loss rates".
In addition, every loss in stockpiling of goods requires a person to take responsibility.
Specifically, the recipient of the responsibility can be a collective or an individual, based on the
rules to address the loss situation. In addition, to encourage the protection of property, the
company should also have a policy of rewarding individuals or organizations for good
performance.
In particular, the most effective way to attract customers can be based on customer interest. In
order to create business benefits, strategies need to convey the message of customer interests as a
top priority and a key to business operations.
In fact, the revenue of a business depends on both factors, the turnover of each retail branch and
the number of retail outlets of that business. According to the report by mid-2017, although the
average revenue of retailers has increased rapidly, the number of stores tends to decrease,
affecting the growth of sales of enterprises. Therefore, focusing on the development of retail
points in both quantity and quality will contribute to maintaining revenue and developing the
company effectively.
Macro Risks
In a business environment, macroeconomic risks are one of the threats that any business needs to
take precautions and take timely action. In theory, macroeconomic risks include inflation,
unemployment or changes in currency rates, etc. These are the factors that have a surprising but
powerful impact and can change the market segment. In response to these threats, the MWG can
focus on building and coaching risk management staff.
References
Thegioididong Back Ground. Retrieved from https://vi.wikipedia.org/wiki/Thegioididong.com
MWG Company (2017), CEO Report for first 10 months of 2017. Retrieved from the website:
https://mwg.vn/eng/shareholders-news/
RongViet Securities Corporation, (2016). Mobile World Investment Corporation (MWG) Initial
Report, (2016, May), p.2
Brands Vietnam, Thế giới di động: Thách thức bảo vệ ngôi vương (2015). Retrieved from the
website: http://www.brandsvietnam.com/6465-The-Gioi-Di-Dong-Thach-thu-bao-ve-ngoi-vuong
Cafe F, Thế Giới Di Động, FPT Shop "ngang nhiên" nhập hàng từ hãng, bỏ qua nhà phân phối
(2016, December 12). Retrieved from the website: http://cafef.vn/the-gioi-di-dong-fpt-shop-
ngang-nhien-nhap-hang-tu-hang-bo-qua-nha-phan-phoi-20161212090735863.chn
Anh Hoa (Author), Cuộc chiến giành thị phần giữa FPT Shop, Thế Giới Di Động, Viễn Thông A
(2017, June 27)