Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
By: Huynh Thi Hong Hanh (Na) Nguyen Xuan Ha Uyen (Joanna) SUD11
June 2012
Da Nang
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2/ Machines and technologies........................................................................................................14
V/ Output Factors....................................................................................................................15 VI/ Plan for production activities............................................................................................16 VII/ Process of making gold jewelry ......................................................................................17 VIII/ Marketing Activities .....................................................................................................18
1. Market research.........................................................................................................................18 2.Advertisement.............................................................................................................................18 3. Public Relations (PR).................................................................................................................18 4. Marketing Online.......................................................................................................................19 5. System development...................................................................................................................19
Appendices...............................................................................................................................21
Appendix1: Brands Logo.............................................................................................................21 Appendix 2: Company Structure..................................................................................................22 Appendix 2: Company Structure..................................................................................................22
References ...............................................................................................................................24
Phu Nhuan Jewelry Joint Stock Company (PNJ), which was formerly a Jewelry Shop in Phu Nhuan District, Ho Chi Minh City was founded on April 28 th 1988 and run by the People's Committee of Phu Nhuan District. In 1990, this shop was improved into Phu Nhuan Fine Arts and Overseas National Currency Exchange Company, managed by Department of Financial Management of Ho Chi Minh city committee of the Party. In 1992, the Company changed its name into Phu Nhuan Jewelry Company. In this year, the company also participated in the founding of Dong A Joint Stock Commercial Bank and carried out the joint venture with Phu Nhuan House Business and Development Company. In 1994, PNJ opened the first branch in Hanoi, which initiated the strategy of developing a distribution network in major provinces and cities nationwide. From 1995 to 2003, PNJ company expanded its operation to the other business line such as trading motorbikes ( an agent of Honda Company), established VINAGAS extraction station (which became independent in 2004), became a distribution agent for Saigon Petrol, began exporting to the first customers in Malaysia, Singapore, the U.S.A and Germany. From January 2004, PNJ officially changed into Phu Nhuan Jewelry Joint Stock Company, expanded its investment to every operation field including technology, systems and human resources development, and expanded its export market to Europeans. From 2005 to 2008, PNJ focused on improving its old brands and introduced the highclass jewelry named CAO Fine. Besides, the company also concentrated on investing and founding others companies and organizations such as Dong A Real Estate Joint Stock Company, Saigon Fisheries Joint Stock Company (S.G. Fisco), Hong Leong Saigon Gas Tank Joint Venture Company and Dai Viet Energy Joint Stock Company. From 2009 to 2011, PNJs share was officially listed on HOSE. In addition, PNJ also started constructing the most modern jewelry factory in Vietnam, invested and upgraded in the distribution systems in the whole country.
During the over twenty years of foundation and development, from a district jewelry shop, up to now, PNJ has became a major brand in the silver and gold jewelry sector and is one of Top 200 biggest enterprises in Vietnam and received many awards from the Government. Nowadays, PNJ Company has the largest retail distribution system with 142 stores in the whole country and becomes the most popular jewelry firm in Vietnam. Type of business
Business activities for gold, silver, precious metals, precious and semi-precious stones, jewelry, precious metal raw materials, souvenirs, handicrafts and fine art, fashion items and fashion accessories Export and import of gold jewelry and fine art in gold, silver and other precious metals, diamonds, precious and semi-precious stones, gold bars, gold material. Export and import jewelry, imitation jewelry Production and processing jewelry, production of ferrous metals and precious metals, gold bars. Sales of machinery and equipment of jewelry sector Diamonds and gemstones testing services, inspection services of gold, silver, other precious metals, semi-precious stones Pawn service Foreign currency exchange, receipt and payment of foreign currency service Trading in real estate Trading in restaurants and other related services Trading in motorbikes, cars and other related services Transporting by road Vocational service * In this report, we only focus on the manufacture and business activities of jewelry brands of PNJ Company
2/ Vision PNJ Company claimed on the Minute of Annual General Meeting of shareholders 2012 of PNJ (p.10) that "We aim to become a leading jewelry producer and retailer in Vietnam, holding the number of position in all market segments that PNJ targets in Vietnam. 3/ Mission Enhancing customers satisfaction by diversifying products and services at highest quality with reasonable price, by advanced management and manufacturing system, and improving artisans' skills is always put in the first line. PNJ take pride to customers by their fine jewelry products with outstanding quality. 4/ Objectives PNJ aims to become a leading jewelry producer and retailers in Vietnams market, to increase the export sales of jewelry four times by the end of the tenure, to achieve the annual growth rate of jewelry sales 20% and to increase the profit of main business 15% per year.
5/ Company Products Logo of PNJs brands (Appendix 1) Phoenix PNJ DongA Bank Gold Bar
Since 1990, PNJ has introduced the gold bar product named Phoenix. However, at that time, PNJ mainly concentrated on the strategy of the jewelry brands' development. Recently, with the change of the world economy and the fluctuation of gold price, investors and consumers pay more attention to gold bar. Due to this situation, this brand is a result of the cooperation between two prestige brands in gold business and banking in Vietnam: Phu Nhuan Jewelry PNJ and The Commercial of Dong A - DAB. Together with the commitment of ensuring the quality of 9999 fine gold (24K), Phoenix PNJ DAB gold bar was launched in April, 2008. PNJ and Dong A Bank specially concentrate on the production and introduction of gold bars with small weights into the market in order to meet the increasing hoarding demands. There are four kinds of Phoenix gold bar one tael (37,50gram), five tenths of a tael, two tenths of a tael and one tenths of a tael which are suitable for the purpose of the consumers such as investing, saving and exchanging. Phoenix PNJ DongA Bank gold bars were formerly sold through the shop system of PNJ, at branches of Dong A Bank and through official distribution agents of International Gold Investment and Trading Company (Inter Gold). However, on May 25th 2012, the Government Decree No.24 on the management of gold trading activities was set to take effect. According to that, only state monopolies are approved to continuously manufacture gold bars/bullion. On this issue, PNJ Company announced to their shareholders in the Annual General meeting: "When the State Bank of Vietnam allows SJC to be the only one company that manufactures gold bullion exclusively to the State Bank in order to control gold market, this has affected to gold bullion business activities with PNJ - DongA Bank brands. However, besides SJC, the other gold bullion brands can trade, but cannot manufacture more. Moreover, with a wide scale network, PNJ is qualified to be a gold bullion company that operates in accordance with the State Bank requirements". (p.22, Minute of annual general meeting of shareholders 2012 of PNJ)
Therefore, it can be concluded that at present PNJ Company no longer manufacture this kind of gold product. PNJ Silver (Silver jewelry)
PNJ Silver brand was created in June 2001 and put into new recognition system based mainly on pink and slogan "Sparkling Dreams" in August 2005. The PNJSilver brand mainly aims at the young generation with ages from 15 25 years old who are fond of fashion. The items of that brand were made from 92,5% pure silver and protected with a Rhodium layer. Total gross profit of PNJSilver in 2011 based on Annual report in 2011 is 164,86 billion VN, 36,82% increase over the same period of last year. PNJ Gold (Gold jewelry)
This brand was officially presented in the market in 1989 when the Company was just founded. The PNJ Gold brand was only promoted since 2004 and was became one of the pioneers of gold jewelry in Vietnam jewelry market. Over the past 20 years, PNJ gold has continuously released hundreds of new collections with breakthroughs in design, style and material to meet the higher in both quantity and quality need of the market. In addition, the gold jewelry is one of the most important parts of a Vietnamese wedding, PNJ has presented the line of wedding jewelry named Golden Happiness such as necklace, pendant, earrings, ring and bracelet. Besides, the other target customers of this brand are women aged 25 45 years old with above average income and expenditure. In the Minute of Annual General Meeting of shareholders (p,23), PNJ also indicated "PNJGold brand focuses on middle class customers and it is the brand which PNJ focuses resources for development". Total revenue in 2011 made of PNJ gold jewelry brand reached 3.541 billion VN, up 20,67% over the same period of 2010. CAO Fine Jewelry
CAO brand was officially launched in 2005 and became one of the subsidiaries of PNJ in 2009. This brand focuses on high-class customers and it affirms on a par with international brands. All items of this brand are considered unique and sophisticated masterpieces, which can compete with the other high-class international jewelry brand presented in Vietnam. Jemma
Jemma brand is a refined product like CAO brand, but has lower value. Jemma is a new choice for young ladies which consists of two main lines: high-class silver jewelry with
gemstones and accessories like handbags. Korean and Italian designers with the oversea raw materials design all products in order to catch up the latest fashion trends. Yabling
Yabling brand has been launched on the market for one year with the main target on the youth. It is still on trial sale, not on all-out release and quite new to the customers. However, PNJ indicates that this product has not been properly named, after discussing with the consultant, PNJ will re-locate this brand. The gross margin on sales of this product line is about 70%.
Shareholders meeting includes all shareholders who are entitled to vote and have the highest jurisdictional authority of the company. The shareholders meeting has the right to decide the annual payment rate of dividends, ratify the annual financial statements, appoint and replace the Board of Directors and Inspection Committee, supplement and amend the charter, decide the type and amount of issued shares, incorporate or convert the Company, reorganize and wind up the Company and other rights regulated by the Company Charter. Board of Directors
The Board of Directors is the highest management authority of the Company during the term between two shareholders meetings and is entitled to represent the Company to decide every issue relating to the benefit and interest of the Company except the issues belonging to the authority of the shareholders meetings. Inspection Committee
The Inspection Committee is voted by the shareholders meeting and is responsible to inspect the business activities and financial statements of the Company. The Inspection Committee operates independently from Board of Directors and the Board of General Director. Board of General Director
The Board of General Director includes General Director and four Deputy General Directors who are appointed or replaced by the Board of Directors. The General Director is not required to be a shareholder of the Company but can be a member of the Board of Directors. Annually, the shareholders meeting will ratify the appointment of the Chairman of Board of Directors cum General Director of Company. The General Director takes direct and main responsibility to the Board of Directors for organizing and managing the whole daily operation of the Company according to Resolutions and Decisions of the Board of Directors. Deputy General Directors are assigned and commissioned by the General Director to manage one or more operation fields of the Company. Deputy General Directors are responsible to the
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General Director and are jointly responsible with the General Director to the Board of Directors within the assigned and commissioned term. 2/ Policy for laborers Total employees of PNJ by April 2012 were 2261 people which equals to 1,31 times compared to 2007. Average growth rate is 7% per year. In which, there are over 1700 employees directly taking part in the process of making and selling products and over 800 people who are postgraduate and graduate. Standard income per person increased from 2.5 million VND per month to 6.1 million VND per month which equals 2.44 times compared to 2007. Average growth rate is 25.76%/ per year. Short term and long term training programs for improving professional skills for workers, salespeople and managers are often carried out in order to improve the effectiveness of the operating system. In addition, the employees sign employment contracts with PNJ according to regulations of the Labor Law, ensuring all social insurance, medical insurance and other requirements as stipulated by law. PNJ always commits work for employees and seeks the optimal solutions to ensure stable jobs and suitable compensation according to their abilities.
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IV/ Input Factors 1/ Raw material Main raw materials of PNJ Company include gold bars, gold, silver, precious stone and diamond. These materials are imported from foreign companies, the rest is supplied by domestic sources.
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2/ Machines and technologies Since 1992, PNJ has continuously improved and renovated its technologies and invested in chain-making machinery from Italy to replace the old manual process. Annually, PNJ imports advanced equipments to serve production and business purposes.
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V/ Output Factors Products: The main output products of PNJ are jewelry and gold bar made from gold, silver and gemstone. Revenue: The target of revenue growth in 2011, particularly PNJ and the target of consolidated revenue growth and affiliates (based on consolidated figures) were generally achieved and exceeded each of its targets. In particular, PNJ revenue increased 32.55% compared to 2010, exceeded 15% of the target. Revenue by brands: Unit: million dong No Revenue Value
1
2011 Density Value 3.541.023 1.858.557 1.585.749 96.717 164.861 15.134 149.727 20,43% 2.934.454 52,49% 1.446.057 44,79% 1.406.190 2,73% 82.208 0,95% 120,497 9,21% 10.269 90,79% 110.228
Increase/Decrease Value 606.567 412.500 179.559 14.509 44.364 4.865 39.499 % 20,67% 28,53% 12,77% 17,65% 36,82% 47,38% 35,31% 103,65% -13,85%
Gold Jewelry + Wholesale + Retail + Export Silver Jewelry + Export + Domestic Gold bar, gold 24K Export (20K)
3 4
32,44% 4.397.208
4.966.948 28,65% 5.765.272 44,08% -798.324 (Source: Summary report of business production in 2011)
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Raw material
The raw materials used in manufacturing are gold, silver and precious stones. Recently, the gold price has fluctuated abnormally which increased the production expenses and reduced the demand for gold from customers. To reduce this risk, the amount of storing gold should be equal to the order. Besides, the gold in stock of company must be always kept balance with the borrowed gold. When there is an order from customer, PNJ may import a correlative amount for sale. This method aims to reduce the threat of raw material price changes. Laborers
There is a scarcity of skilled laborers in processing and crafting jewelry, which causes difficulty for PNJ. The solution for this problem is building a strong workforce since they are still at colleges. By awarding scholarships and giving training opportunities in real conditions, that may create a well-training workforce and meet the need of high-skill laborers. Moreover, extra income from periodic awards and awards for completing plans encourage workers and retain skilled laborers.
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VII/ Process of making gold jewelry Making gold jewelry takes time and artisanship. The process of making many gold products is similar. They start with a design and make a carved wax model with many special tools and techniques: steel wax carvers, files, hand gravers, burs, drills and heat. Then they come to second step. The next step in making gold jewelry is to invest. Firstly, they attach a sprue to the wax. The sprue serves as a channel for melting wax to escape during burn-out and later for molten gold to enter during casting. Then the sprued wax is attached to a round rubber base. An investment flask is placed over the wax and is attached to the rubber base. The investment flask is a round cylindrical steel tube, similar to a tin can open at both ends. Investment begins as a dry fine white powder similar to plaster-of-paris in feel. It is especially formulated to withstand high temperatures and is hold detail during casting. The investment is mixed with water which products slurry to the consistency of cake batter. At this point the air bubbles need to be removed from the investment. This is done by placing the investment slurry in a vacuum where the air is drawn out. This is called debubblizing. The slurry is then poured into the flask surrounding the wax. The flask is then placed into the vacuum chamber for a final debubblizing to make sure there is no air pockets attached to the model that would corrupt the casting. After the investment hardens the rubber, base is removed and the flask goes into the burnout oven. The burnout takes hours at high temperature until all waxes are eliminated. Once the burnout has taken place a hollow replica of the original wax carving remains inside the flask. The mold is ready for casting. The flask is placed in a casting machine and the gold is melted in a crucible with a torch. At the proper casting, temperature the molten gold is thrown by centrifugal force into the hollow mold and held there until it solidifies. Now you have a cast replica of your lost wax. The investment is then broken away from the cast piece. What remains is the rough casting. Now it is time to clean up and polish the casting. The gold jewelry making process is complete!
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VIII/ Marketing Activities The demand of society in jewelry is increasing day by day, thus there are both domestic and foreign companies and brands established to meet the demand expands and diversify the jewelry market. In such a situation, to improve the competitive position in the marketplace, PNJ always makes plan for building the image and developing each brand: CAO, PNJ Gold and PNJ Silver. Based on PNJ Prospectus (2008), PNJ Company has applied the marketing strategies below: 1. Market research PNJ cooperates annually with companies specializing in market research to study behaviors, tastes and shopping habits of consumers. They also study and assess the effectiveness of its advertising and promotion programs. Moreover, the Market Research Department also has periodical programs to study the consumer's behavior with regard to each brand. 2.Advertisement Advertising programs are usually held in the special occasion such as New Year, Valentines Day, International Women's Day, and Wedding seasons to attract more consumers to the latest fashion trends and new collections. PNJ exploits many tools to approach the consumers via various media means: television, press and online marketing. 3. Public Relations (PR) Beside advertisement, PR is also an effective means of promotion, which PNJ often uses. Introductions to the Company and its products, programs of community sponsorship, social activities, etc are carried out by PNJ to increase the good impression to the consumers on the Companys brand and products. PNJ pays much attention to the social communities via practical contributions to charity programs and programs for the poor. In the Miss Universe Contest 2008 held in Vietnam, PNJ was the Official Jewelry Sponsor and the high-class jewelry label CAO Fine Jewelry sponsored the crown for Miss Universe valued at US$ 120,000. This event marks an
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important milestone in confirming the leading position of PNJ in Vietnams silver and gold jewelry sector as well as the design capability of PNJ in the world jewelry industry. 4. Marketing Online Marketing Online via website http://www.pnj.com.vn and other websites like http://www.facebook.com/PNJ.COM.VN and http://forum.pnj.com.vn/forum.php reach the target customers of PNJs brands. The website also provides updated detailed information about new product collections, fashion trends of the year, information on promotions, instructions for buying products online and other useful information to the customers. Online shopping revenue in 2011 was VND 8.2 billion. This is a new area and can be considered as good potential. However, as we can see, there are still some difficulties in online shopping such as the delivery and payment. Some customers are afraid that real product will not be as qualitative as in the picture. Therefore, in parallel with the promotion of this marketing channel, PNJ need to bolster customers confidence about the product and information on these website. 5. System development PNJ builds a professional and consistent image for all brands and PNJ considers it an effective advertising instrument. Customer care programs provide a lot of benefits and preferences for loyal customers of PNJ. Besides, PNJ has also built up a line of professional designers and graphic artists who are responsible for and take charge of this effort, ensuring consistency and professionalism of the Companys image. With its experience in building up brands, the Research and Marketing Department also supports subsidiaries and associated companies to set up strategies for marketing and brand development of Dong A Real Estate, S.GFisco and Dai Viet Energy. These marketing activities are just popular in domestic but not in ASEAN countries. The export market recorded its growth last year but was still passive. The marketing task for export market has not been paid proper attention and PNJ production capacity is also limited. In 28 April 2011, PNJ started building the biggest jewelry factory in Vietnam with the
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production capacity of 4 million units/year. It is expected that the new factory not only raises the export output but also reduces the price of jewelry in domestics market. PNJs competitors on export market are Thailand and China. However, PNJ cant compete with China on cheap goods and with Thailand on luxury goods. Therefore, PNJ needs to focus on the middle class, creates a foothold for these products before developing high-class products to export.
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JEMMA
YABLING
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2,261
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Summary report of business production activities in 2011 <http://pnj.com.vn/pnj_beta/upload/codong/13%20-%20Bao%20cao%20hoat %20dong%20san%20xuat%20kinh%20doanh%20nam %202011%20V6%20_Final_.pdf> Process of making gold jewelry < http://www.jeffreyabeardjewelrydesign.com/making-gold-jewelry.html>
Minute of Annual General Meeting of shareholders 2012 of Phu Nhuan Jewelry Joint Stock Company [online] (2012) < https://docs.google.com/viewer?a=v&q=cache:ZXeHVKpM84J:pnj.com.vn/pnj_beta/upload/codong/Bien%2520ban%2520DHDCD %2520thuong%2520nien %25202012%2520(ENGLISH).pdf+&hl=vi&gl=vn&pid=bl&srcid=ADGEEShEl2d66my 5hmw5_Hcyccj7zQp17kPHL9TmG0gVl5sxVXYa8PtkwACdCYqJz16WgbQKBzAnKX Y_SlDilvSkDyMLi6eo6bfWxrLJvy3ZIgqUJfqBYxdNoJlskRAbeDcMfHW8zguX&sig=A HIEtbQ-P6pjr0_mUb76zlJOBHYyzLrETw&pli=1>
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