The Competitive Strategy for Mbn-gmd Joint-Venture Vietnam

THE COMPETITIVE STRATEGY FOR MBN-GMD JOINT-VENTURE VIETNAM

IN 2011-2015

Instructor: Professor Nguyen Dong Phong Student: Vo Thanh Huong

Main content:

I. The introduction of MBN-GMD Joint-venture and its business situation

II. The competitive situation of MBN-GMD

III. MBN-GMD’s value chain and competitive advantage

IV. The competitive strategy for the joint-venture


I. The introduction of MBN-GMD Joint-venture and its business situation


• 1.1 The foundation

• 1.2 Scope of business

• 1.3 The important of bonded warehouse

1.1 The foundation


Molenbergnatie Belgium(MBN Belgium)

Gemadept Vietnam(GMD Vietnam)+

(July 2001)

MBN-GMD VIETNAM JOINT-VENTURE

1.2 Scope of service


• The role of bonded warehouse in general• Provide financial support for the importer and exporter

sooner.

• Overseas bonded warehouse smoothens the export activity Helps a company to allocate its products near the core

customer

• Bonded warehouse provides security


1.3 The important of bonded warehouse

The tax of importation is suspended for the importer.

In case of temporary import: prevent the trader from having to pay an amount of import tax.

Help the exporter receive their payment from the importer

• The role of bonded warehouse in international coffee trade• A tool for international coffee traders to take part in the

international coffee trade market.

• Bonded warehouse provides a tool for risk management for the importers:Risks come from the local authoritiesPrice risk

• Bonded warehouse provides a financial help for the importers


1.3 The important of bonded warehouse

EX: in case of SICOM: Delivery will be made via acceptable warehouse receipts issued by bonded warehouses in Hochiminh city Viet Nam or Singapore, according to the specifications set by the exchange.

II. The competitive situation of MBN-GMD

• 2.1 Business situation• 2.2 Competitors• 2.3 Competitive profile matrix


2.1 Business situation Annual income of the joint-venture from 2005 to the end of 2009


2.1 Business situation


Instructor: Professor Nguyen Dong PhongStudent: Vo Thanh Huong

2.1 Business situation

2.2 Competitors• Some of the most prominent competitors:

Unicontrol coffee Bonded warehouse Established very soon Is also a well-known bonded warehouse for coffee in Viet Nam Is also warranted by an international bank with high

reputation.

Pacorini coffee Bonded warehouse Is an annoying competitor Offers the lowest price


2.2 Competitors• Some of the most prominent competitors:

Steinweig coffee Bonded warehouse Has gained a reasonable reputation Does not have high capacity

Vinacafe coffee bonded warehouse New and has the highest capacity Is not trustable in the eyes of international coffee traders


2.2 Competitors• Main method of competing:


Low price

2.2 Competitors• Main method of competing:


Flexible rent

- Warehouse fee is calculated

based on the

exact amount of

coffee each day

Fixed

rent:-

Offer customers

a fixed fee for the

maximum

of coffee each year

2.2 Competitors

• The result of competing:Price reducesMethod of calculating the fee changesCustomers have more choice


2.3 Competitive profile matrix


Factors Rate of Importan

ce

Companies Unicontrol Pacorini Vinacafe MBN-GMD

Weight Rate Weight Rate Weight Rate Weight Rate

Reputation 0.17 4 0.68 3 0.51 2 0.34 4 0.68 Scope of service

0.13 3 0.39 2 0.26 2 0.26 4 0.52

Quality of service

0.13 4 0.52 3 0.39 3 0.39 4 0.52

Marketing 0.05 3 0.15 3 0.15 2 0.1 3 0.15 Market share

0.05 3 0.15 1 0.05 2 0.1 4 0.2

Price 0.17 3 0.51 4 0.68 3 0.51 2 0.34 Technology 0.1 3 0.3 3 0.3 3 0.3 4 0.4 Warehouse

space 0.1 3 0.3 2 0.2 4 0.4 3 0.3

Location 0.1 3 0.3 3 0.3 3 0.3 3 0.3 Sum 1 3.3 2.84 2.7 3.41

2.3 Competitive profile matrix


- MBN-GMD is now the market leader

- Leading in terms of reputation, market share and technology

- The price offered by the joint-venture is not as competitive as other competitors

III. MBN-GMD’s value chain and competitive advantage


• 3.1 MBN-GMD Value chain

• 3.2 Cost analysis

• 3.3 Differentiate analysis


1/Infrastructure:

Administration activities, Financial and accounting activities, relationship with relative authorities, quality management etc…

PROFIT

2/Personnel management

Training

Training Training MBN Belgium

Training

3/Technology development

-BEAN -Testing method -Weighing method -Documentary procedure

-BEAN -Warehouse ranking method

-BEAN -Documentary procedure

-Market research

Bank warrant procedure

4/Buying

-Rent warehouse space -Buying new machines

-Market research (buying market information)

-Weighing -Sampling -Tallying -Document preparing

-Ranking in the warehouse -Checking

-Document preparing -Tallying -Trucking -Warrant clearing

-Signing the contracts -Dealing with customers

- Bank warrant

5/Input logistics

6/Operation

7/Output logistics

8/Marketing and sales

9/Other services

3.1 MBN-GMD’s value chain

1. Infrastructure:General administration:

Setting up strategy Human resources management Pricing policy

Financial and accounting activities Predict the annual revenue and profit for each year Identify sufficient budget for the operation of the joint-

venture Set up the policy on expenditure and the use of profit



1. Infrastructure (cont)Relationships:

Relationships with customers: MBN Belgium as it is responsible for the deal with customers

Relationships with local authorities: Most of the relationships with local authorities such as with customs officers are set up by GMD Vietnam

Quality management: Both MBN Belgium and GMD Vietnam have the right to control the quality of services provided by the joint-venture



2. Personnel managementGMD Vietnam has taken care of most of the duties

MBN-GMD is responsible for: Directly manage the staff Identify sufficient salary and other social welfare benefit

for the staff. Motivate the staff



3. Technology development Information system management



3. Technology development (cont)Documentary procedure:

Based on :

Warehouse ranking method: Not kind of technology-intensive



MBN’s experiences in bonded warehouse

GMD Vietnam’s knowledge of Vietnam customs procedure

Cushion method

3. Technology development (cont)Bank warrant procedure: Standard Charter Bank will be

responsible for the warrant of coffee stored



4. Buying:

Renting warehouse space: Rents warehouse space from Galaxy Maritime Corp Enjoys a favorable treatment: Flexible warehouse space

Buying necessary machines: Places order with Nha Trang joint-stock mechanic company Have high quality with lower prices



5. Input Logistics Involves: Weighing Tallying

Document preparing

BEANS software enhance the flow of information

The infrastructure (relationships with local authorities) supports the preparation of documents.



GMD Vietnam

MBN-GMD

6. Operation Involves the ranking and storing of coffee Affected strongly by the development of

technology (The use of BEANS software and ranking method)



7. Output LogisticsPrepare necessary documents

WeighTally Truck the coffee to the seaport



GMD Vietnam

MBN-GMD Vietnam

8. Marketing and salesAre taken place by MBN BelgiumThe joint-venture in Viet Nam is just a small chain link in a

huge chain provided by MBN Belgium.MBN-GMD Vietnam does not have to spend any time or

money





Infrastructure:

Administration activities-Financial and accounting activities-Relationships with coffee roasters, coffee processing companies…-Quality management

PROFIT

Personnel managem

ent

Training

and recruiting the sales force in the exporting countries

Out-sourcing logistics activities

Training and recruiting staff at the importing countries

Training and recruiting staff at the importing countries

Technology

development

Information management

Testing method

Weighing method…



Testing method

Weighing method…

Market research

Buying

Signing

trade contracts with the exporter

Collecting coffee beans from the domestics coffee dealers

Transporting coffee from the exporting countries to the importing countries

Re-testing the coffee

Re-packing the coffee (if necessary)

Store the coffee in warehouse

Selling coffee for the processing company or coffee house

The coffee traders may also take part in the processing procedure of coffee beans. Some of them have their own processing plants

Input logistics

Operation

Output logistics

Marketing and sales

Other services

• Value created for the customers



Value for the customers

Cost-saving value

Direct-cost

saving

Safety value



Infrastructure

GMD Vietnam helps save the cost and time of recruitment and training MBN Belgium support 3000 USD for the board of director Clear financial plan for each year Clear policy on credit for the customers GMD has good relationships with the local authorities help save “under-

table” cost

PROFIT

Personnel management

Does not have to recruit and train staff on its own

MBN Belgium covers all the cost for marketing and sales.

Technology development

BEANS software is supported by GMD without any cost

BEANS software helps save time and cost

Buying

Flexible warehouse space helps save cost All the machines are provided and maintained by a

familiar supplier with reasonable prices

The use of BEANS saves cost on documentary procedure

Well trained staff help save cost

Relationships with local authorities help save under table expenses

Modern

Ranking method helps save warehouse space-> save cost

The use of BEANS saves cost on documentary procedure

Well trained staff help save cost

Relationships with local authorities help save under table expenses

Input logistics

Operation Output logistics Marketing and sells

Other services


• 3.2 Cost analysis Factor that affect cost

The relationships between the joint-venture and the two mother companies

Can not be imitated easily by other competitors

MBN-GMD does have an opportunity for cost advantage



Can not come to a final conclusion about the cost

advantage of MBN-GMD


• 3.3 Differentiation analysis

Infrastructure

The reputation of MBN Belgium and GMD Vietnam Full scope of service provide by MBN Belgium Good feed-back system that tightens relationships with customers

PROFIT

Personnel management Well-selected-and-trained staff

MBN Belgium is responsible for this activity

Standard Charter Bank

(a very famous bank) warrants for the coffee

Technology development

BEANS software helps the customers to follow their coffee effectively

Buying Flexible warehouse space to meet the needs of customers

The location of CFC saves time and cost for the customers

Relationships with local authorities helps save time

Customers have

the right to access their coffee at anytime thanks to BEANS software

The reputation of GMD in handling the coffee

Relationship with local authorities helps save time

Input logistics

Operation Output logistics

Marketing and sales

Other services



Group1: Indirect-cost-saving value Full scope of service Well-trained staff Standard Charter Bank warrants for the coffee stored in

bonded warehouse

Group 2: Safety value The reputation of the two mother companies BEANS software provides a tool for customer to follow their

coffee effectively Relationship with local authorities



The consolidation of the differentiation advantage:

Is the advantage “hard to copy”?

Do the customers keep recognizing the different value provided by the company?

Factors that generate the differentiate advantage: The connections with the two mother companies Time Company’s policy



Is the advantage “hard to copy”?

Consolidated factors

Hard to copy



Do the customers keep recognizing the different value provided by the company?

• Safety• Indirect cost-savingTrue value• The reputation or vision• Customers list• Market share• Price• Years of operation

Aware value

IV. The competitive strategy for the joint-venture


• 4.1 A perspective on the competitive environment in 2011-2015

• 4.2 Orientation for the competitive strategy of MBN-GMD

• 4.3 Competitive strategy for MBN-GMD

• 4.4 Implementation of the strategy

• 4.5 Potential constrains in implementing the strategy


• 4.1 A perspective on the competitive environment in 2011-2015

Current competitors

Potential competitors

BuyersAlternative product

Suppliers

• Low price• Flexible method of calculating

fee

• The business margin is going down

• The barriers for the business is quite high

• Paying more attention at direct cost saving value

• Loosing attention at safety and indirect cost-saving value

• Backward integration trend

• Not available

• Do not have much pressure from suppliers



The position of MBN-GMD Strategy in the hierarchy of strategies of MBN Belgium



The position of MBN-GMD’s strategy in the hierarchy of strategy of GMD Vietnam



Corporation strategy of MBN Belgium Objectives and goals:

Be the market leader in logistics service for agriculture commodities for European Traders.

Especially in coffee trading, MBN Belgium must be the most trustable supply chain managers for the European Traders.

Lead the market with high quality service and a flexible scope of service, not low price.



Business-level strategy (for coffee only): Set up a joint-venture or a subsidiary in Brazil Broaden the business in Viet Nam Compete by high quality and superior value for

the customers. Attract the two largest coffee traders in the world

Volcafe and Neumann Kaffee Gruppe Give the customers a flexible choice of services



The corporation strategy of GMD VietnamFor the next five-year period, the corporation focuses its strategy on

the below business:

Sea port projects

Tan Son Nhat international air terminal

Hoasen-Gemadept Caimep international port

Le Loi Plaza Building



The broadening of MBN-GMD bonded warehouse is also a part of the Caimep project.



The competitive strategy for MBN-GMD Vietnam:Goals and objectives:Ensure a suitable growing pace in revenue and profit: • The revenue at least increases 13,13%• From 2013, the revenue must grow at a higher pace • The growing pace of profit must at least be around 6,91%• The pace for profit from 2013 may remain the same as the investment for a

new bonded warehouse may cost a lot.

Enrich the customers-list of the joint-venture: • Reduce the dependence on some core customers• Pay special attention at Neumann Kaffee Gruppe and Volcafe

Maintain the leader position in the Viet Nam coffee bonded warehouse• Be the top at quality of service• Not the market leader in term of price.


• 4.3 The competitive strategy of MBN-GMD

The main content of the competitive strategy:

Carry out the differentiation strategy for an outstanding position in the market

In the implementation of differentiation strategy, especially pay attention to the cost of differentiation

Safety value Indirect cost-saving value

Recall the aware value in the customer’s mind



Organizational structure for implementing the strategy:

MBN-GMD Vietnam

MBN Belgium Customers

Direct

Indirect



The customer will see the company’s safety value by those aware values:• The reputation of the two mother companies• Its customer list• Its market share• Its year of operation=> In dealing with customers, MBN Belgium has to pay special attention at how to emphasize these points.

Recall the aware values



The joint-venture can do so by:

Hold annual meeting

Hold annual meetings with customers who has representative offices in Viet Nam

Send business profile

Send its business profile in which emphasizes that it is the joint-venture set up by the two very famous mother companies.

Issue magazine

Coordinate with Viet Nam Logistics Review Magazine to issues a report on Viet Nam bonded warehouse for coffee in every 6 months and actively send this report to the customers



In differentiation strategy, the difference is extremely important

There must be comparison between the joint-venture and its competitors

Must demonstrate the risk by actual cases in Viet Nam: Get loss, damage etc…


• 4.4 Implementation of the strategyHas to show all the hidden cost when customer choosing a low-price logistics supplier:• Cost of incompatible services• Cost of risk (lost, damage etc…)

MBN offer 1.45 USD/ton/dayAnother company offers 1.40 USD/ton/day. Þ The difference is 0.05 USD/ton/day. Estimation that the coffee will stay 100 days shippedÞ The difference will be 5USD/ton of coffeeIf just one bag of the coffee is stolen, the traders will loose much more than just 5 USDÞ Choosing another low-price company, the traders save

5USD but loose much more than that.


• 4.4 Implementation of the strategyBe carefull with “full scope of service”

It used to be a signal of safety and indirect cost-saving

But the trend is changing: Customers is following:

Direct cost saving value and Backward integration trend

Be ready for a more flexible scope of service which still ensures cost-saving value



The Joint-venture must demonstrate that: even if

it is not attached with other services of MBN

Belgium, it still helps save cost

State-of-the-art

warehousing procedure

The use of modern

software

Being a part of GMD Viet

Nam


• 4.4 Implementation of the strategyReconfirm the choice of customers:

With differentiation strategy, it is also a must that the customers keep realizing that they are receive something different

Must re-confirm the customers that:- Their choices are correct- The extra amount of money they are paying is really worth-paying.

The joint-venture can:- Actively send the report of coffee stored, shipped and to be shipped each month-Coordinate with Standard Charter bank and release coffee warrant report each month automatically


• 4.4 Implementation of the strategyReaching new customers:

Understand new customers: can MBN-

GMD bring them higher profit

Provide them a “sample”:

6-month contract

NEW CUSTOMERS


• 4.4 Implementation of the strategy• 4.4 Implementation of the strategyCost of differentiating:

All the different value of the Joint-venture comes from its connections with the two mother companies

In implementing the strategy, the company has the help from MBN Belgium

The message sent to customers changes but the method of sending it does not change.

The chance for cost rising is low


• 4.5 Potential constrains in implementing the strategy

The geographic barrier from the joint-venture and its customers

The business-unit autonomy



Date post:	15-Oct-2014
Category:	Documents
Upload:	huong-vo
View:	38 times
Download:	3 times

The Competitive Strategy for Mbn-gmd Joint-Venture Vietnam

Documents