INTRODUCTION

Beeline is the trademark of the second largest telecommunication operator, Vimpelcom which its headquarters are located in Moscow.In October 2005, Beeline become the top brand in the ranking of the "most powerful and valuable brand in Russia. And in July, 2009, Beeline has become the online presence and an international venture, No. 7 telecommunications network in Vietnam. Being the first international telecommunication network in Viet Nam, many people have doubts about the competitiveness of Beelines market entry while the "Mr Big" of Vietnam's telecommunications industry is considered that have controlled almost the market. But in fact thatthe success Beeline has made in recent timehave proved the opposite. Applying proper business strategy is one of the key that help Beeline opened the success door in Viet Nam market. And this report will give a specific view about Beeline business strategy and involved issues.

TASK 1: Define the context of business strategy and explain the significance of stakeholder analysis. a. Define the context of business strategy: A business strategy, according to Rapid Business Intelligence Success, is a business plan that takes place long-term in order to help achieve a specific goal or objective. The aim of a business strategy is to strengthen a particular business so that its performance increases and, in turn, the business becomes more profitable. Without a business strategy, a business has no guide to follow and has an increased risk of not succeeding. (http://www.ehow.com/about_6557498_businessstrategies-definition.html). Therefore, in order to define the context of business stategy, we need to know what are the vision, mission, values and goals of the organization. Mission, vision and values are statements that organization that answer questions about who we are. (Why do we exist?), where we are going and what do we want to be, respectively. In detail, mission is organizations reason for being and how it aims to serve its key stakeholders. Vision is the picture of future that the organization wants to create. Values are the beliefs, attitudes of the organization which are created to help the organization reach the vision and mission. Apply to the case of Beeline Viet Nam we can see that at the website of Beeline, there are clearly statements of the Mission, Vision and Values which are: Vision - To become a leading, world class service provider in Vietnam. Mission - We aim to help people to delight in the pleasure of communication as well as always feel free anytime & anywhere. Values - Constant improvement quality of services - Innovations support

- Respect and trust for employees and partners. Goal - To become one of the major players in Vietnam developing business in line with worldwide standards. Look at the vision, mission, values and goals above, we can see that they can support for each other. The values which are constant improvement quality of services, innovation support and respect and trust for employees and partner will help Beeline carry out the mission they have set, build the trust and support from customer and from that gradually achieve the goal as well as the vision. However, the vision and the goal are not very feasible for Beeline since there are a lot of telecommunication networks in Vietnam such as Viettel, Vinaphone, Mobile phone, etc which have existed for a long time and had a large market shares. Therefore, it is very difficult for Beeline to occupy their position and then overcome them. b. Explain the significance of stakeholders analysis. Stakeholder analysis is the process of systematically gathering and analyzing qualitative information to determine whose interest should be taken into account when developing and/or implementing a policy or program (Schmeer, 1999). In other words, it is range of tools used for identifying and analyzing stakeholders in term of their interest, impact related to the operation of company.

Stakeholder analysis is important for the development of knowledge and understanding about other organizations in the firms environment (BPP, Business Strategy course book, p.17). With Beeline, this is a useful tool for managers of company to identify stakeholder and assess their knowledge, interests, power, impact and alliance with others related to the business of company. Moreover, it helps managers in understanding and interacting more effectively with stakeholders. Those acts will support and improve weak points of operation. The more careful of stakeholders analyzing, the higher rate of success which company can get. In Beeline, as many companies, there are three kind of stakeholders influence the operation of company: internal stakeholder, connected stakeholder and external stakeholder. Depend on the interests and power that the stakeholders have over or within the organization, their extent of influences is different.

Internal stakeholders have the direct influence to the organization because it includes people who are from within the company such as managers and employees. a) Managers are the one who run the business and therefore have existence power like originate, change or terminate the mission, vision, values as well as the objectives of organization. In addition, they have the responsibility to manage the organization based on that mission, vision and values in order to bring the satisfaction not only for themselves but also for other stakeholders. b) Employees have a major effect on the success of a business. They are those who directly implement the works in organization. With their good or bad performances which express in the quality of products they produced, services they bring to the customers will have a great impact on the organizations brand, image as well as the reputation and prestige which are very important to the success of organization. Employees objectives are high salary, safe and good working condition, job security, fair treatments. Connected stakeholders a) Shareholders/owners can threaten to the organization by selling their shares. In case the shareholder group together, their votes in the annual shareholders meeting will have a great impact. For example, to the case of Beeline- a big company, the individual shareholder may have a very little influence to the company but if they unite together they will have the ability to influence the objectives and direction of the company. Shareholder interests are typically equated with share price or it can be understood that shareholders always want the prosperity and success for the company. b) Suppliers can influence on the products quality of the company based on the quality of material, the delivery time or they can influence on the price of product based on the changing price of material, their credit term, etc. c) Customers can decide the success or failure to a company. No customer- no business. Customers can affect businesses through the feedback, complaints, suggestions and choosing whether or not to buy. Customers usually look for a low-price but good-quality product or service. Or in other words, they want the worthy value for the money that they spending. External stakeholders

a) The Government can exert influence through taxation, government spending, legal action, the laws and policies. For example, the policies on telecommunication charges can affect to the price of Beelines services. b) Community and pressure group can exert influence by publishing the business activities that they regard as unacceptable, refusing to buy goods from a certain firms and can do some illegal actions to the organization such as sabotage.

By using the stakeholders analysis, Beeline ( BL) can assess the influence level of each stakeholders and from that BL can use the opinions of the most powerful stakeholders to shape their projects at an early stage. Not only does this make it more likely that they will support BL , their input can also improve the quality of BL project. Moreover, gaining support from powerful stakeholders can help BL to win more resources this makes it more likely that BL projects will be successful. In addition, Beeline also know how to satisfy their stakeholders in order to maintain a good relationship which can bring the sustained success for the company.

TASK 2: Conduct an external environment and organizational audit of the company. 2.1The external environment a) Macro environment ( using PESTEL): y Political and Legal environment:

Politics of Vietnam is highly evaluated because of its stability which can ensure the operation of the Beeline is stable and create psychological safety when investing.Joining the WTO and being a member of the United Nations Security Council then the global issues and external trends tend to increasingly open therefore, the glocalization into the world economy is an opportunity for companies involved in global market. Regulations on administrative procedures become more complete, the licensing of business activities is increasingly shorter. Moreover, Government is also very concerned about the removing barriers in business. This is an advantage for Beelinewhen joining the industry. Vietnam legal system has tended to improve, business law is increasingly complete and business Law has a very large impact on all businesses through the legal framework under the management of the state with economic inspections. From that all businesses are operating smoothly. On June 8, the draft of Law on Telecommunications including 6 charters and 66 articles was submitted to the National Assembly for approval. The law specifically covers

telecommunications investment and business, public telecommunication, telecommunication management, telecommunication construction projects, and the rights and obligations of individual organizations and authorities to do business in the telecommunication sector. The law is expected to be enacted by 2010. The content of the draft also focus on reinforcing the competitiveness,and creating equal conditions for all the economic sectors to participate in the telecommunications market in a fair and transparent environment using a market mechanism.Under its WTO commitments, Vietnam is fully opening its telecommunications market by 2012. Accordingly,foreign owned businesses will be allowed to provide telecom services. The deadline for fully opening the domestic telecom market is fast approaching, and the development potential of Vietnams telecom such as

services and building infrastructure is creating big opportunities for both foreign and local investment. (Vietnams Telecommunications Update, Thursday, 22 October 2009-Ministry of Finance). y Economics environment:

Beeline is a telecommunications service company with people's income increasing, access to the Beeline service as much as the opportunity to develop their business. Based economic and social development strategy period 2001 - 2010, the Government has established the targets as follows: - GDP is doubled every eight years. - Ensure internal accumulation of the economy is reached over 30 percent of the GDP. - The proportion of industry in GDP is 38-39% by 2005 and 40-41% in 2010. (Source:http://www.unaids.org.vn/sitee/images/stories/documents_for_resources/socio_economi c_dev_v.pdf) Accordingly, the demand for telephone services and intenet is increasing therefore, it can help Beeline in expanding the scope of their activities and the key service areas. Contracting the Vietnam- America Trade agreement in which agreed to participate in the free trade area under the roadmap of CEPT / AFTA, has opened up the vast markets. Inflation affecting the lives of a large segment of the population with an increase of the consumer price index up to 12.63% in 2007 and as of the end of November 2008, this index is above 23% . Although the inflation in 2009 has reduced but it still greatly affect the operation of Beeline. Monetary policy tightening, credit growth down to stop inflation has caused many difficulties in business operations for many of telecommunication company and Beeline is not an exception.

Recession and world economic crisis from mid 2008 till 2009 had reached the bottom which has greatly affected the operations of Beeline: did not achieve profit objectives of the company (because of the economic crisis has made people limit the spending). Thus, the macroeconomic situation and current trends in the future has brought both opportunities and advantages for theoperations of Beeline. The demand for telecommunications services increase but it also cause difficulties: the requirement of changing technologies, management methods to reduce costs, lower production costs, the customer care and fierce competition, etc y Social-Culture environment:

To be successful in business, enterprises not only towards their efforts in the target market but also harnessing all elements of the business environment, including culture environment factors. About the cultural nuances, it has influenced by traditional, territory and also region. Cultural nuances bold mark on consumer behavior, including the perception and attitudes to goods and services they need to buy. Today, almost everyone from entrepreneurs, farmers, students, civil servants to students are in need of contact, and other service needs. So, this will enable the stimulus of Beelines services. Along with the development of society, the peoples intellectual standard of Vietnam is more advanced now. This will facilitate the company to has managerial and technical labor resources, highly qualified skilled staff. In addition, with the population is86 million people, the percentage of young people are in need of communications services is creating larger demand and a vast market which are considered as an opportunity for company to expend and dominate this potential market. y Environmental &Technological environment:

Today, technological factors have crucial significance for the development of every nation, every business. Technology has impact to two basic elements in creating competitiveness of the business: quality and costs of individual products and services that businesses provide to the market. But changing technology is not an easy mission. It requires businesses to ensure that

other factors such as thedegree of labor (must be consistent), (sufficient) financial capability, (suitable) development policy, the administration and management.With Beeline this is the favorable conditions but also creating difficulties when the development of technology, especially the upcoming 3G technology will help the company in selecting

appropriatetechnology to improve the product quality , service quality and labor productivity. But the difficulty for the company is the huge competition in the industry, along with require of discount for the services. According to a results of a recent survey, Vietnam is lagging in applying information technology and communications (e-mail, software applications, data services, Internet ...) compared to other countries in the area. This is a sad reality of enterprises in Vietnam, but it is considered as a business opportunity for telecommunication companies. Natural factors include location, climate, weather, etc. This factor can affect the quality of Beelines services and also the telecommunications infrastructure investment. b) Micro environment factor ( using Porters five forces analysis):

Figure 1. Porters five forces

Threat of new entrants:

Many people think that communication is a potential rival of telecommunications companies. But in fact, the threat of new entrants in telecommunication industry is not significance at the moment since the number of subscribers to telecommunications services compared to the population (about 86 million people) was at saturation, even over demand, therefore operation in telecommunication industry will be slowed down in 2011 and this is a barrier to entry with a new firm. Moreover, customers are used to use services of existing networks will hardly changing from another new firm, etc. y The power of customers:

The bargaining power of customers is quite high because they can have many choices in using which networks. With a rudimentary counts there are 8 telecommunication network providers in Vietnam such as: Viettel, Mobiphone, Vinaphone, Sfone, Vietnam mobile, EVN Telecom, VTC Telecom, Beeline. Customers also can choose freely products or services which is consistent with their financial ability. y The power of suppliers:

The power of suppliers is quite weak since the telecom companies has many choice of choosing supplier. For example, the vendor finance of Viettel are BIDV, MHB, Vinaconex, EVN but there are many other vendor finance for Viettel such as HSBC, Vietcombank, etc.. However, Also with the material, product suppliers. Vietnam telecom industry is almost depend on the foreign suppliers for the material, products, technology. For example the technology supplier which has the differentiated product such as 3G, 4Gmay have a significan power towards Vietnamese telecom firms. y The threat from substitute products:

Postal, Internet services can be the substitute of telecommunications since people can contact each other through postal mail, email and yahoo messenger, social network sites like facebook, twitter, etc. However, telecommunication still have its competitive advantages of the convinience, simple and compact. With a small tool like the mobile phone, people can connect to

many other people anywhere, anytime without wasting time and spend much effort. Therefore, the threat from substitute products is available but neligible. y The rivalry among current competitors in the industry:

Vietnam's telecommunication networks' market shares

Viettel Sfone EVN Telecom Mobiphone Vietnam Mobile Vinaphone Beeline

4,6% 1,4% 5,1%

1,1%

37% 24%

26,8%

Look at the pie-chart we can see that the Telecommunications market has the fierce competition of telecommunications services companies such as MOBIFONE, VINAFONE, SFONE, BeelineHowever, Beeline has a very small market shares whilst Viettel, Mobiphone and Vinaphone have a very almost the market shares. This fact shows that Beeline will have to cope with many difficulties when operating in this market. But with the suitable strategies Beeline still can bring into play their own competitive advantages an competing with the others.

2.2. The organizational audit: a) Value chain analysis: y Primary activities:

Operating in a specific industry like telecommunications, Beeline primarily provide services therefore, they almost do not have the real operation of inbound or outbound logistics. The operation in the manufacturing sector are far different to those in the service sector. In the manufacturing industry, the operations can take place in isolation of the customers but in the service industry production and usage of the service occur simultaneously. Therefore, we will only mention briefly on the inbound logistics, operations and outbound logistics and focus mainly on the marketing & sales and after sales service. Inbound logistics: Beeline will receiving the materials for the services production such as transmission system like fiber optic, satellites, wireless communication system, etc. from the suppliers then control and protect them in order to prepare ready for the operation. Operations: set up the systems with the materials above. Besides, recruiting or training staff is also include in the operations since people are essential resource in the service industry. Outbound logistics:Beeline will distribute their products (the SIM cards) to the dealers in order to bring the product to the customers. Marketing & sales:These are marketing tactics which Beeline has done and achieved success in its beginning stages in HCM City market: Curious people in the network community by leaking an Ad for a new mobile network services. This may be due to the ads inadvertently leaked or it could be considered as tactic "viral marketing." The leaking of this information was somewhat helpful for the strategy of introducing Beelines products and services. Young people who were familiar with surffing web and easily distribute information are the subjects of Beeline. Fun Ad and easy to access the customers. Characters of the Ad are cute little chickens, playing as a professional DJ and very funny in the hip hop dance moves. Beeline selected media object is young people who are easy to try new things and also is a group of customers which prefer the Big Zero package. But with the ad only Beeline could not get a good result as today. They also used the brand activation programs through a system of retailer stores that sell phones and mobile phones SIM. At that time, there were many mobile phone shops hung the sign of Beeline. In addition to that is

the Beelines mobile cabinets appear near the entrance of a number of universities such as Economics University,Pedagogical University, etc. Accordingly, customers can easily purchase SIM at retail counters across the streets and roads in major cities. Moreover, Beeline had issued free Beeline SIM for customers when they start entering the market. According to Beeline, only 3 weeks before the official launch Beeline had had handed Beeline SIM to 120,000 people. In addition, Beeline also created a separate website for socio-economic new in order to attract the reader and then take the brand further expands on the Internet. In this way, Beeline has also shown that they care and contribute to the development of the community and this has made Beeline become closer to consumers, and often appeared before the eyes of consumers. After sales service: Beeline has put a great attention to the customer caring service. The operator often called to the phone number ofthe customers for consulting and inquiring about service quality. Beeline has offered a subscribers phone number changing service for customers who are using the mobile services of Beeline. Customers can select the subscribers phone number based on their preference and perception with a suitable changing cost. Beside to the costs which are listed on the Beeline website, customers do not have to pay an additional fee for whatever else. In addition, Beeline also launched two additional value-added services with attractive facilities and reasonable charges include GPRS-Internet services and KoolRing-waiting tones of Beeline. Based on the default settings on the machine, all of Beeline customers can use the service without any installation. y Support activities:

Technology development: Beeline has advanced technology: The BTS's Beeline can operate continuously even during a power failure (to work within 8 hours). Time for the installation of BTS equipment prepare for the operation is 7 days.

Beeline has passed the international standards in setting up the network infrastructure: after 8 months it can coverage the area population of 15 million people in three cities (the average time in the world is 16 months), 1 month later expanded coverage to 26% of the national population of over 8 provinces. Human resource management: Professional and enthusiastic staffs with a high team spirit. Currently, Beeline Vietnam has about 500 people who were trained in both Vietnam and abroad with high professional level and over 10 foreign experts are working at the main office and many branches in the Da Nang and HCM City. Firm infrastructure: Beeline has a strong financial resources from the Vimpelcom Corporation. Moreover Beeline also has the unique approach It is the first time in Vietnam, there is a telecom network has a particular and convenient sales channel, which the other networks never have before. That is the using of portable stalls. Pedestrians can easily recognize the small stalls which are designed in Beeline style with the mainstream is black and yellow stripes.

b) SWOT analysis: y STRENGTH

Corporate image: -Beeline is a telecommunication network of international joint ventures. - Inherited the brand name of a brand in the top 10 largest telecom world and the leading mobile brand in Eastern Europe. Financial: - The powerfulfinance is considered as an advantage of Beeline (currently owns 62.7 million subscribers worldwide.) Brand: -In 2009, the brand name "Beeline" is valued around $ 8.9 billion. - Being in the top 100 of the most expensive brand on the planet. - Reaching the top 10 most expensive names in the telecommunications market. Operational capacity: - Type of modern enterprise, style, with streamlined structures and a professional management. - About the technology: Leveraged with new technologies and advanced Has set up a stable network infrastructure. Market shares in the world:

- A strong international brand in the world, with over 16 years experience and more than 60 million subscribers in Eastern Europe and CIS countries. - VimpelCom's shares are listed on the New York Stock Exchange. With ADSS traded under the symbol VIP. y WEAKNESSES

- Being a new company entered the market. - Limited in extent and coverage. - Still have not provided services which can significantly increase the value for customers yet. y OPPORTUNITIES

The market trends: - Currently the mobile market of Vietnam has over 80 million subscribers. (More than 50% is the virtual subscribersand a large percentage of subcribers who using mobile with 2 SIM cards). - Telecommunications market of Vietnam has a great potential with a population of 86 million people and an economy growing strongly. (Review of the VimpelCom CEO). - Beeline have coveraged in major cities, expected that will coverage over the entire territory of Vietnam in the early months of 2010. - Focused on exploiting the youth market - a segment of high growth and consumption which is very important for the telecom networks. y THREATS

The current market: - Preliminary statistics show that there were about 80 million subscribers of mobile networksactive, in which three "Mr.Big" Viettel, MobiFone and VinaPhone accounted for almost absolute market shares.

- At present, thetelecommunications market was almost saturated at the threshold of the development. - The favorable factors for the development of a telecom network such as infrastructure, tariffs, value-added services, terminal ... cellular networks have been fully exploited. The competitors - Market share pie is shared when a new telecom network accedes the market. - The fierce competition between the giant existing telecom networks and a new telecom network will increase the costs. - Three major brands including Viettel, MobiFone, VinaPhone has decided to "lower" opponents charge down by reducing the level of promotion that offers new business. - Three Mr.Big (Viettel, Mobiphone, Vinaphone) also imposed a series of preferential policies for post-paid mobile subscribers as minutes offered in the day, sending gifts, prizes or dial, etc. Customers - The loyalty to a brand of customer is not high. - Target market (young people) are not sustainable and easy to change.

TASK3: Apply strategic positioning techniques to the analysis of the company.

Figure 2. Ansoff matrix Beeline has operated in the telecommunication industry for 2 years but it is still a young company. Beeline need to maintain their position certainty and moreover, because Beelines network quality is still be complained by the customer. Therefore, I think Beeline should not using the diversification strategy since it will cost a lot of time as well as money and have a very high risk, but just focus mainly on the market penetration and the other 2 corners of the matrix above which are product development and market development. Firstly, introducing existing products into existing markets (the first corner: market penetration) means that Beeline should access the market of competitors to win the market share from them. In fact, Beeline has done a very good job in applying this strategy in which the Big Zero package of Beeline has created the intra-network call trend and made the other networks worry about losing their market shares. Moreover, Beeline also had a great focus on their

productsdistribution when having more than 3000 retail outlets and creating the SIM card mobile stalls which appeares across the roads, customer can easily buy Beeline products everywhere. Therefore, the ways to bring products to the customer has been much shorter and more convinient. In addition, Beeline has invested a lot in the marketing campaign in which the level of the Beeline brand awareness had reached 80%. However, during this period,to be able to attract more customers and still retain old customers, apart from the need to maintain good operating (like what Beeline have done), Beeline stil need to strive to overcome their weaknesses. For example, the quality of Beeline network is low therefore, Beeline must focus more on the network quality like using high technology to upgrade the network quality in order to satisfy the customers. Secondly, Beeline can also use the market development strategy to earn more market shares. At the moment, Beeline just focus mainly on the big provinces and major cities. But with the fact that the percentage of mobile phone usage in rural ara has increased a lot, then expending market to the rural area is an opportunity for Beeline to earn more market shares. Moreover, the current Big Zero package with a very cheap charge issuitable for the financial ability of rural people. Finally, I want to mentioned the product development strategy. Beeline has had a great success with service packages Big Zero, however, Beeline have just two packages which is Big Zero and Big&Kool. This will limit the development of Beeline. Other telecom networks like Vinaphone, Mobiphone, Viettel or even Vietnamobile have released a lot of packages which suitable for particular demand of the customers. Although if Beeline want to develop a new products then they need to invest in the research, but with the strength in financial resource then Beeline can easily release a new product to the market and satisfy the customers. For example, Beeline can release the Love package for a couple in which the charge is very low or even free, etc

CONCLUSION Being the first international telecommunications network in Vietnam, operating in a competitive market like the telecommunications market, Beeline has been facing with many difficulties and challenges. However, if Beeline can enhance what they has been achieved and overcome whats not good, Beeline will likely further development, the cellular network is no longer ranked No. 7 as at first appears. With all the analysis above, hoping that Beeline will find out the most appropriate strategy to make the future business operations of Beeline will move up and become the most attractive telecom network in Vietnam.

REFFERENCE: y Internet sources: strategies definition:http://www.ehow.com/about_6557498_business-strategies-

Business

definition.html - Stakeholders analysis: http://www.mindtools.com/pages/article/newPPM_07.htm http://tutor2u.net/business/strategy/stakeholders-interests-and-power.html Strategy for the EconomicSocial development in Viet Nam 2001-2010:

http://www.unaids.org.vn/sitee/images/stories/documents_for_resources/socio_economic_dev_v. pdf -Telecommunication market shares:

http://www.vfr.vn/index.php?option=com_content&task=view&id=1103&Itemid=4 Information of Beeline:

http://www.365ngay.com.vn/index.php?option=com_content&task=view&id=3066&Itemid=13 http://tintuc.xalo.vn/001954299365/Beeline_Viet_Nam_lien_tuc_tang_cuong_vung_phu_song.html?id=1bf376b&o=0 http://vnbusiness.vn/articles/beeline-kh%C3%B4ng-c%E1%BA%A1nh-tranhb%E1%BA%B1ng-m%E1%BB%8Di-gi%C3%A1 http://www.vinasme.com.vn/nd5/detail/doanh-nghiep-dien-tu/tin-tuc-do-day/ong-lon-di-dong-longai-beeline/50879.032042.html http://www.baomoi.com/Tan-binh-Beeline-but-pha-ngoan-muc/76/3691561.epi y Book sources:

BPP Professional Education, 2004. Business strategy course book. 1st ed. London: Aldine House, Aldine Place.