Game theory

COMPETITIVE POSITIONING IN RETAIL

MARKET

1
1. Introduction

2. Rearranging and solving the problem

3. Conclusion

2
1. Introduction

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Big C
In 1998, Big C opened its 1st hypermarket in
Vietnam, located in Dong Nai province.
April 2016, Big C Vietnam joined Central
Group Thailand, one of the leading retailers in
the South Asia region.
Today, They operate 35 Big C Supercenter
and 31 shopping mall across Vietnam,
proudly run by over 8000 passionate people.

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Vinmart
At over 10,000 square meters, each VinMart
supermarket easily meets the daily consumer
needs of a large community.
More than 40,000 SKUs in all categories,
including foods, cosmetics, housewares,
electronics, garments and toys.
With the slogan "Closer‑Faster", VinMart+
makes its mission to conveniently satisfy all
customer needs anytime, anywhere.

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2. Rearranging and solving the
problem

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 Unit: VND Billion
Big C

Ch
an
y

gin
lic

gt
po

he
he

po
gt

lic
in
ep

y
Ke
Big C : 5.390
VinMart: 3.200 VinMart

No
n
ese

su
cts am

pp prod
du etn

ort uc
pro g Vi

ing ts
in

Vi
ort

etn
pp

am
Su

ese
Big C : 6.300 Big C : 7.700
VinMart: 3.000 VinMart: 1.600

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 2.1 Vinmart between 2 options
If Vinmart choose to support Vietnamese products
Vinmart has to attract more medium and small local enterprises by new
strategies such as preferential discount rate, effective fresh food distribution
and quality control system, etc.
Applying such strategies will help Vinmart to attract a numerous enterprises
in Vietnam and help them build up the trademark “High quality Vietnamese
products”, lead to a revenue of VND3,000 billion for Vinmart. Big C will lost
VND1,400 billion to Vinmart.

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 2.1 Vinmart between 2 options
If Vinmart choose to not support Vietnamese products
If Vinmart choose to not support Vietnamese products, their revenue would
be VND1,600 billion in 2015. Big C will be able to keep their revenue stably
as VND7,700 billion at the end of 2015.

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2.2 Big C between 2 options
In the retail sector, Big C is the main competitor of Vinmart. After the
acquisition with Central Group, Vinmart has a retail system of 32 stores in
Vietnam. In order to expanse their business and increase their market
share, Vinmart will try to improve their services, distribution system. To
prevent the expansion of Vinmart system in near future, Big C will have to
chose between “changing the policy” and “keeping the policy”.

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2.2 Big C between 2 options
Keeping the policy
It means that Big C will buy most of their products from suppliers in
Thailand and do will not accept many kinds of product from Vietnamese
suppliers.
Big C will suffer a big lost from their own policy. In particular, Big C will
lose 30% of their market share to others conpetitors and their revenue for
the coming year will decease to VND5,390 billion. And for Vinmart, their
revenue will increase from VND1,600 billion to VND3,200 billion for the
following year.

11
2.2 Big C between 2 options
Changing the policy
In this case, Big C will decide to change their unreasonable policy for the
medium and small enterprises in Vietnam. If they decide to change their
policy, their revenue for the coming year will be VND6,300 billion due to
the lost of revenue to their competitor, which is Vinmart.

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2.3 Solving the problem
Using backward induction, we can see that Vinmart will gain a revenue of
VND3,000 billion if they chose to support Vietnamese products. If they
chose to not support Vietnamese products, their revenue will be
VND1,600 billion at the end of 2015.

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 2.3 Solving the problem
As the result, Vinmart is going to choose "Supporting Vietnamese products"
(since 3000 > 1600). Vinmart won't miss the opportunity to grasp market
shares. Unit: VND Billion

VinMart

No
ese

n
su
cts m

p
du etna

po rodu
rti
pro g Vi

p
ng ts
n

Vi
rti

c
etn
o
pp

am
Su

ese
Big C : 6.300 Big C : 7.700
VinMart: 3.000 VinMart: 1.600

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 2.3 Solving the problem
Revenue of 2 strategies "Keeping the Unit: VND Billion
policy" and "Changing policy" are
VND6,300 billion and VND5,390 billion, Big C
respectively. Big C will have to try their

Ch
best to protect their market share as

an
gin
y
lic

gt
well as their business advantage. We

po

he
the

po
g
can clearly see that the best response

lic
pin

y
e
Ke
of Big C is to change their policy (since
Big C : 5.390 Big C : 6.300
6,300 > 5,390). VinMart: 3.200 VinMart: 6.300

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 2.3 Solving the problem
=> Vinmart chooses strategy "Supporting Vietnamese products" (since 3000 >
1600) and BigC chooses "Changing the policy" (since 6300 > 5390).
Unit: VND Billion
Big C

Changing policy

VinMart

Supporting Vietnamese products

Big C : 6.300
VinMart: 3.000

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3. Conclusion
Vietnamese companies are losing their competitive positioning
to others foreign owned business. In addition, foreign owned
business seems to have more incentive terms from the
government than local companies. Some policies bring more
advantage competition for foreign owned business

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3. Conclusion
According to Dr. Le Huy Khoi, these are solutions for Vietnamese retail market to grow
better in near future:
Take advantages of the retail store system such as FPT, The Gioi Di Dong, Tran Anh,
etc.
Vietnamese firms can improve their the producing – delivering process for local
consumers.
The government should have preferential policies for businesses such as tax policies,
rental, capital and interest rates, opening mechanisms and policies to encourage
Vietnamese businesses to develop.

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THANK YOU FOR LISTENING

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