Strategic Management - Final Assignment

Group Members:
Nguyen Thi Thanh Mai (1987)
May. 30, 2012

Nguyen Minh Quyen Bui Quang Thai Vu Duc Thinh

Question Nr. 3:
Description of my product: I plan to market a complete line of bathroom accessories including squeezes, soap dishes, toothbrush holders, coat hooks, and towel bars. The product line will be designed in my home office and manufactured in my shop. To develop this product line and launch it in the market, I will have to evaluate the market and prepare a good condition before starting as listed below: Evaluate targeted market and customers. Study growth trends in this business. Define the competition Pricing strategy Hiring office, production shop and personnel. Financing strategy. E-commerce plans. Marketing plans. Advertising and promotion.

Targeted Market and Customers My customers will be big supermarkets with good credit ratings and reputations for promptpayment. These will include BigC, Metro, FiviMart, and selected others. Growth Trends In This Business The market for household bathroom accessories is growing as population grows and new household formations take place. This is especially true in expanding economies as the standards of living make further gains. Also household purchases are increasingly being made through large chain discount retailers which I plan to focus on serving.

Strategic Management - Final Assignment The Competition My principal competitor is big companies in Vietnam such as: Inax, Tan A Dai Thanh, Fico...and
May. 30, 2012

many other imported brands. I have included a list of all major competitors in this business and a brief sketch including to whom they sell. Pricing Strategy Discount chains will be primarily interested in price. In order to achieve lower costs than my larger competitors I plan to do the following:

Get better pricing costs by finding best supplier for input materials. Maximize the use of high quality machinery, equipment, materials, and facilities Invest in the welfare of workers who are an asset. Practice effective and practical costs management

My ultimate goal is to build a line so unique and promote it so effectively that consumers will be willing to pay a premium. My long-term objective is to build a market that is not entirely based on price. My unique features will include: Special design and best quality of material. Factory location and personnel planning I plan to hire an office near Hanoi with production shop and buy necessary machines. My office criteria will include: Convenience to my home. A short-term lease of 1 - 2 years Lawyer review of the lease. A lease provision that the landlord provide me expansion space as required with a kick out clause if expansion space is not available The use of these location criteria will gain me experience in handling much larger leases for space in the relatively near future. Future growth plans include warehousing of merchandise. Then I will hire many employees for operation such as: worker, designer, accountant Financing Strategy My requirements for start-up capital are include buying supplies, getting a computer, equipment and fixtures, tooling, travel expenses and start-up overhead expenses. These expenses are included in my monthly cash flow projection to indicate the ongoing requirements for cash.

Strategic Management - Final Assignment I am prepared to make presentations to potential lenders. My presentation kit includes this business plan, my personal financial statement and personal tax returns. I will be prepared to be
May. 30, 2012

specific in my needs for financing, the payback program and my sources of repayment. I will furnish potential lenders a cash flow projection showing sources of repayments and I will be conservative in my forecasts. A portfolio of referrals will be prepared for the finance package. E-Commerce Plans A website focusing on business-to-business E-commerce will be an important tool in my overall marketing program. I plan to build and install the www.bathroom.com website to promote the company and my product.

Marketing Plan I plan to focus all initial marketing efforts on establishing a beachhead at one large supermarket. I will personally be responsible for the contacts with the appropriate buyers. My complete line will be presented as a package including display accessories that tie into the merchandising policies of each chain. I will be depending on the combination of fresh styling, quality and price to break into this market. Advertising and Promotion Plans Short Range Plan (6 to 12 months): Initially my advertising and promotion will be done on an entirely personal basis without any budget for paid advertising. My customers require personal visitation by the CEOs of their vendors. It will be my plan to limit my advertising budget to personal travel expenses in making these presentations and follow-up presentations. Mid Range Plan (12 36 months): To establish brand recognition at the retail level, I plan to budget 10 % of my sales to joint advertising with my customers. I will solicit presentations from local advertising agencies. Long Range Plan: I plan to aggressively build brand recognition and loyalty by budgeting 15% of sales, which will be allocated between space advertising in trade journals, appropriate consumer magazines and joint advertising with my customers. It cant be denied that all steps I mentioned above are very important when you consider to produce a product and launch it in the market successfully, in which Marketing plans is the most important. I think that because a good marketing plans will help to keep you ahead of the

Strategic Management - Final Assignment competition and transform your objectives into a strategy that will benefit your company and customers
May. 30, 2012

Question Nr. 2
New product development (NPD) is the term used to describe the complete process of bringing a new product to market. The stages in the strategic new product development process are: Stage 1: Idea generation Lots of ideas for new products may be generated but, it is important to make the selection for right new product opportunities. Stage 2: Concept Development and Selection In this stage, the company has to make concept synthesis, i.e. develop the marketing details, market segmentation, identify customer needs, prepare market analysis, etc. Stage 3: NDP Program Definition The key point in this stage is Organization and program/metrics. Stage 4: Design and Development: A proposed marketing strategy should be written laying out the marketing mix strategy and architecture design of the product. Stage 5: Validity: In this stage, the new product will be experienced verification and risk mitigation. Stage 6: Pre-commercialization and Launch After verification and risk mitigation is completed, the product can be introduced to the market. This stage involves production and marketing, which is very important.

Question Nr. 1
Internal growth strategy is a strategy to develop the base or capabilities of the business itself. In other words, many businesses will reinvest in employee development, departmental restructuring, or enhanced product offerings in the hopes of providing a broader base on which to provide services/products to customers. Internal growth does not produce immediate revenue increases and may actually require an input of revenue to be paid off over time, but internal growth promises the

Strategic Management - Final Assignment potential for future returns on investment. Internal growth strategies do not necessarily increase the size of the business.
May. 30, 2012

External growth strategies develop actual company size and asset worth. External strategies focus on strategic mergers or acquisitions, increasing the number of mutual relationships through third parties, and may even include franchising the business model. The larger the number of business partners and/or franchisees, the greater the network of the company and throughput of cash. The goals of external growth strategies are to provide larger opportunities to increase the worth of the company, and for this reason external growth strategies tend to produce immediate return on investment. Different between Internal and External Growth Strategy. Internal External Involve efforts taken within the firm itself, such Rely on establishing relationships with third as new product development, other product- parties, such as mergers, acquisitions, strategic related strategies, and international expansion. alliances, franchising. From information above we can see that both types of growth strategies are regularly used simultaneously, and have advantages and drawbacks. External growth creates synergies and market power, but it can also destroy value if the management reinvests the firms resources or free cash flows in inefficient projects for their own personal interest. Alternatively, internal growth provides more corporate control, encourages internal entrepreneurship, and protects organizational culture, but it often is a slower way of growth compared to M&As since it requires the development of new resources internally. Therefore, the managerial choice between those two types of growth will have a consequential impact on the firms operational and market performance. The business risk associated with each type of growth varies, and depends on various determinants such as the industry or the economical environment. joint ventures, licensing, and