UNIVERSITY OF SUNDERLAND

ASSESSMENT COVER SHEET / FEEDBACK FORM

BA (HONS) BUSINESS MANAGEMENT

Student Registration No.: 149082402

Student Name: MAI NGOC LONG

Module Name: Strategic Management

Module Code: SIM336

Centre / College:

Due Date: 16/1/2015

Hand in Date: 16/1/2015

Assessment Title:
Learning Outcomes Assessed:
Learning
Outcomes
Assessed:

Feedback relating learning outcomes assessed and assessment criteria given

to students:

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Table of Contents
Executive summary.......................................................................................................................3
Company background...................................................................................................................4
Main analysis..................................................................................................................................5
I.

Where are we now?..............................................................................................................5

1.

Porters value chain...........................................................................................................5

2.

Porters Five Forces..........................................................................................................9

3.

PESTEL..........................................................................................................................13

4.

SWOT analysis................................................................................................................17

II.

Where do we want to be?................................................................................................19

III.

How do we get there?......................................................................................................19

Recommendations........................................................................................................................21
Conclusion....................................................................................................................................22
Appendix.......................................................................................................................................23
Bibliography.................................................................................................................................30

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Executive summary

The report gives information about how Thien Long Group Corporation can gain the
success and develop the business in competitive market. The strategic management of this
company is analyzed based on the positioning view with three questions
In the first question Where are we now? some tools such as SWOT analysis, PESTEL,
Porters five forces and value chain will be applied upon the real company situation to evaluate
the internal and external factors which influence the strategic management of TLG Company.
The next question Where do we want to be? part will reflect the vision, mission, core
value as well as the objective of the company.
For the last question, Porters generic strategies will be used to identify which strategies
that Thien Long Company can keep on promoting to gain more profit and develop the business.
After that, the recommendations will be proposed for the company to have more success in the
future.

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Company background

Stationery is a forceful and competitive industry around the world. Human needs
instruments to access the knowledge and information in daily lives. Starting from the increasing
demand of consumers, this industry is now developing very fast, especially in some developing
country like Vietnam. It is estimated that Vietnam has spent around 4,000 billion for purchasing
writings instruments and stationery. This huge demand made an appearance of key players in
stationery industry such as Ben Nghe, Hong Ha, Thien Long
Thien Long Group Corporation (TLG) is a local stationery company in Vietnam, which is
considered as a prominent brand in writing instruments and stationery industry. Established in
1981, TLG has achieved the reputation in domestic market and become the leading stationery
brand in stationery industry. With the distribution network embracing 63 provinces and cities
nationwide, the company provides a variety of products, including School supplies, writing
instruments, Office supplies and Art supplies. Not only Vietnam but Thien Longs products are
also popular in oversea market when they are exported to over 40 countries worldwide.

In this report, I would like to present the evaluation of strategic management of Thien
Long Group Corporation, along with the models and concepts applied. Beside the current
situation and strategy of TLG, some models such as SWOT analysis, PESTEL, Porters five
forces and value chain are applied to examine the internal and external audit, as well as the

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current activities of the company, in the following part. After that, the main analysis will close
with recommendations to support Thien Long to gain more success in the future.
Main analysis

Strategic management involves in all top companies presently, which always find the new
strategy to adapt to the environmental change, competitors, the customers need, and to make use
of source in effective way (C Appa et al., 2009, p.26). It is about to make decision for the future,
but we always think strategically to achieve the success. Strategic thinking is considered as a
dynamic process of gaining the success of organization (Publishing, 2009). This process is
defined as simple as the three questions:
-

Where are we now?

Where do we want to be?
How do we get there?

For positioning Thien Long Group Corporation, it is useful to apply this process of strategic
thinking for this company. We probably know the current situation, internal and external audit of
the company, how it work towards the goals and objectives, as well as the current strategy by
giving the answer with evaluations for these questions.

I.

Where are we now?

To give the answer for this question, some models such as SWOT analysis, PESTEL, Porters
five forces and value chain are applied to Thien Long to evaluate the internal and external factors
influencing the strategic management of this company.
1. Porters value chain
Value chain is a useful tool in analyzing organizational audit within organization. It supports a
product line, a market and its customer by processes (Brocke & Rosemann, 2014, p.45). In other
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words, value chain analysis divides companys activities into a chain which presents value-added
in each production link (Sekhar, 2009). There are two kinds of activities in value chain: primary
activities and support activities. Primary activities consist of inbound logistics, operation,
outbound logistics, marketing and sales, and services. Those activities are assisted by
procurement, product and technology development, infrastructure, and human resources
management, as support activities in value chain.

Figure 1: Michael Porters value chain

Primary activities

Activities
Inbound logistics

Description
Thien Long Group Corporation has two factories located in
Ho Chi Minh and Long Thanh combining storages and
producing areas which is ensured about control quality and
standard. The main raw materials in production are plastic,
ballpoint, ink, spring imported directly from foreign

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countries

and

particularly

from

professional

Vietnam

importer. After being delivered by suppliers, the input will be

stored and handled into warehouse and storage.
Materials for product are divided into different categories:
writings instruments, school supplies, art supplies and office
supplies. During manufacturing process, TLG apply SAPERP system to increase the productivity and capacity.
Operations

Assemblies are implemented on semi-automatic assembly

machine with high productivity and accuracy. Products are
printed on film transfer, pad printing, hot-stamping, Flexo
printing machine and full-screen printing machine. The
employee team is well-trained and high-qualified.
Strong distribution channel system spreading out within 63
provinces can help TLG to transport the products to

Outbound logistics
wholesalers, retailers, supermarkets, hypermarkets, shopping
malls, gift shops, bookstores, schools around the country
The company focuses on advertising through promotional
activities and sponsorship. Having gained the trust and loyalty
of customers through wide distribution channel system, TLG
Marketing and sales

continues to hold some events to promote the reputation for

the company: university entrance exam support, exam
consultancy or flood victim support to target students and

Services

their parents mainly.

Thien Long opens some care program for customers to make
impression, organizing some customer gratitude programs for

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loyal customers like Secretary day for officers or Go to

school with you for students. The community activities after
sales are concentrated on education and training environment
to help customers to achieve the opportunities to approach
knowledge.

Support activities
Activities

Description
Beside good relationship with suppliers, Thien Long has
decreased the import rate by researching, capturing and

Procurement

transferring technology to produce its own machinery so as to

minimize the equipment imports. The fund is divided equally
into departments but tends to focus on sales department.
Employee team has knowledge about the Vietnam culture, and
experiences in manufacturing and management. The human

Human Resource

resources management is continued to update following the

Management

standard quality management in the world. Training courses,

health care, bonus and salary policies are ensured to develop
the human resources system
Two factories located in Ho Chi Minh and Long Thanh (Dong
Nai) with manufacturing areas and storage system helps the
company make sure the production with efficiency and

Infrastructure
productivity. The distribution network of TLG covers 63
provinces nationwide with over 135 distributors and more
Technological

than 46 outlets.
Thien Long centers on investing in R&D department which
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takes responsibility for researching and developing new

products. Especially, green technology integrated with
many quality standard of ISO, is applied in manufacturing. In
Development
addition, the company establishes total quality management
(TQM) department to operate the production system
effectively and proactively.

2. Porters Five Forces

Before developing the corporate strategy, the company must understand the forces which may
bring the benefit in the industry. That tool to help company in analysis is Porters five forces
(Ahlstrom & Bruton, 2009, p.131). This tool is very useful for Thien Long in industry analysis
based on 5 forces in the model: suppliers, buyers, substitute, new entrants and current
competitors. Moreover, the Porters five forces support the business think over the competing
rivals and the profitability and growth are also determined through this model ((U.S.), 2006,
p.38).

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Theat of
new
entrants

Bargainin
g power
of
suppliers

Competiti
ve Rivalry

Bargainin
g power
of
customers

Threat of
substitute
s

Figure 2: Porters five forces

a. The threats of new entrants
The stationery industry capital does not require the huge investment, so the barrier to entry this
industry is quite low and the ability to entry of stationery businesses is high. It can be some new
organization specialized in manufacturing products such as pen, ruler, compass However,
businesses which want to enter this industry must face with some big barriers to entry such as
strong position in the market of traditional domestic firms with high market shares, stable quality
of stationery products and the image in customers mind. Nevertheless, the product
differentiation and distribution channel are quite high barriers to the new entrants, as the
competitive advantage of traditional brand like Thien Long, Hong Ha and Ben Nghe. Despite the
appearance of new stationery businesses, TLG has still spread out the foot in the stationery
market by applying price reduction tactics to existing customers.

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b. The threat of substitutes

For stationery products, ballpoint pen is a popular and best-selling supply. It has common
function with other pen such as metal pen or ink pen which is produced in foreign company from
China mostly. These types of pen have entered Vietnam and now they are available in the market,
which created the high competitiveness with ballpoint pen traditional product of domestic
businesses. The development of information technology may make the decrease in demand of
using ballpoint pen. However, in Vietnam, the customers still prefer the ballpoint pen because of
its convenience. For a traditional stationery company like Thien Long, ballpoint pen is main
product which brings the profit for the company. Hence, the company needs to implement
marketing activities to keep the position for its own products, especially ballpoint pen.
c. The power of suppliers
To create stationery products, Thien Long must import the raw material from foreign market; the
main materials are listed as plastic, ink, ball pen, spring, chemical pigments Some material
sources may come directly from oversea companies in Switzerland, Germany or Korea to ensure
the quality standard of product, while some are imported through Vietnam importer. The input
cost is a factor which accounts nearly 70% of the production cost of TLG; therefore, the import
dependence will make the company sustained the fluctuations in global exchange rates. The
increase in input prices from the suppliers may influence the production cost by making the
product cost rise. Currently, Thien Long has used the means of exchange rate insurance, and
developed the export activities, as possible solutions. Additionally, the company also focuses on
manufacturing own machinery and materials in order to reduce the import.
d. The bargaining power of buyers

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In Vietnam, the majority of stationery users are students, schools, businesses, offices, agencies.
Their demands start when the writing instruments are out of ink; and they needs stationery in
education and training, as tools to transact the information and knowledge. During the decisionmaking process on purchasing the product, price and quality of product are two important
factors. For example, a student will care for the price of a ballpoint pen instead of style and
characteristic. He tends to look for a ballpoint pen with cheap price in wide range of stationery
brand in the market. Besides, the consumers also see the brand reputation when purchasing a
stationery product. Thien Longs products have built an image in customers price; furthermore,
the company keeps on the price reduction strategy and continues to release breakthrough
products each year. These advantages bring TLG a huge number of loyal customers and high
level of appreciation from consumers.
e. Competitive rivalry
In Vietnam, stationery is a competitive industry, with two main types of competitors:
domestic brands and international brands.
For domestic brands, Ben Nghe and Hong Ha are considered as two main rivals in producing
writing instruments. (Sees Appendix 1 for competitor analysis of TLG)
Apart from the domestic brands, Thien Long Group Corporation may deal with competitive
foreign brands from China, Thailand, Germany Most foreign products are various in designs
with cheap price, but the quality is unstable and the marketing for those foreign products is
limited. Those foreign brands can be listed out as Pentel, Bic, Hero, Paper Mate In the context
of those foreign brands, Thien Long needs to keep the strong position in the market by
promotional activities to attract more customers, and manufacturing new products to compete
with those competitors.
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3. PESTEL
PESTEL model focuses on evaluating the environmental analysis (Stationery Office, Ruth
Murray-Webster, 2010, p.88). PESTEL is acronym of Political, Economic, Socio-cultural,
Technological, Environmental and Legal. For external analysis, this strategic tool helps to limit
the potential threats and to get benefit from the opportunities to spread out the business. In
addition, PESTEL analysis supports to determine the changes in structure of the industry, which
are indicated in six factors of the model (Zanoni, 2011, p.41).

Figure 3: PESTEL model

a. Political
The politic status of Vietnam is considered as stable when the government committed to reform
the economy by opening up policy. Hence, local businesses are encouraged to develop and to
enrich plausibly. Being a local business, Thien Long might have opportunities to develop and
gain the market share, especially when the company receives the support from government
policy and regulations. Moreover, Vietnam joins WTO, which made a breakthrough for the
stationery industry; thus, TLG can possibly expand the distribution channel and increase the
reputation into oversea market.
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b. Economic
It is shown that the Vietnam economy has a rapid growth in recent years. In 2014, total gross
domestic product (GDP) is estimated to increase by 5.98%, compared to the same period in
2013. To be specific, the first quarter rose to 5.06%, while the rate in the second quarter, third
quarter and fourth quarter reached 5.34%, 6.07% and 6.96% respectively, which is higher than
the GDP growth rate in 2012 and in 2013 (GSO 2014). It illustrates a positive sign about the
growth of Vietnam economy. (See Appendix 2 for Vietnam GDP rates and inflation rates)
Therefore, human life is improved and the income per capita tends to go up significantly over
each year. The higher income people have, the higher demand people get on using stationery to
study and to improve knowledge. It forces stationery businesses like Thien Long to supply the
writing instruments, office products to adapt the customers demand for learning.
Additionally, the income increase may affect the customers brand loyalty in Vietnam.
Vietnamese people who have high income may easily change the brand of stationery which
provides variety of products to meet their needs. Currently, Thien Long has introduced dozens of
new products with 20% of brand new fitting in customers needs. To keep the loyalty of
customers, the company needs to maintain product research and development.
c. Socio-cultural
Education in Vietnam is one of important aspects which is focused and invested more. In
recent year, Vietnam has made remarkable achievements in education and training, especially the
number of student trends to go up considerably. Educational level is improve at high level is the
main cause of the rise in education spending of Vietnamese people. Some stationery products
such as pen, pencil, ruler, and eraser play a key role in transmitting knowledge. Therefore,

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consumers may care for the quality of each writing instrument in choosing a product in wide
range of brand in the market.
TLGs product is concerned about life style and demand of customers. Currently, the life
style of Vietnamese people is more open and modern. It has changed when buyers search for the
more value and comfortable product. Hence, the demand for stationery product rise, and the
requirements for quality are also increasing. Vietnamese people may seek the writing instrument
of popular and famous brand in the market. Thien Long has established for 34 years and had a
strong position in Vietnam market; the standard products like Thien Long ballpoint pen and gel
pen have created a good image in customers mind. With this competitive advantage, it is
recognized as a good opportunity for Thien Long Group Corporation to earn more profit.
d. Technological
Science and technology in Vietnam is recognized as imbalance. While there are many
engineers at redundant level, Vietnam lacks of high qualified engineers in mechanical, chemical
or automation industry. Meanwhile, the development and technology innovation grows very fast
that makes appearance of stationery products imported from foreign business. Local business
like Thien Long must innovate and update the technology in manufacturing process to compete
with oversea brands.
TLG now faces to limitation of engineering team but the company moves to automated
production to solve this problem possibly. In fact, the company has produced own modern
equipment in order to improve the production capacity in effective and proactive way.
Furthermore, with technology standard guarantee, Thien Long has prioritized the adoption and
transfer ink production technology to self-control the input and to reduce the cost.

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e. Environmental
Environment protection is a matter of concern in Vietnam. According to some research
conducted by Vietnamese students, each person consumes two ballpoint pens per month; a
ballpoint pen casing is equal to 0.1 grams CO2 release to environment. On average, a school
with more than 1500 students will be equivalent to 300 grams CO2 emission release to the
environment. Besides, in June 13th 2003, the Prime Minister has enacted the Decree 67/2003
about charging mode with environmental wastewater. Thus, to reduce the CO2 release and cost
for wastewater, TLG needs to use alternative source of material which is suitable for the
environment.
Currently, Thien Long has used the Green Technology to ensure the safety with
environment. New energy-saving and new generation of equipment are applied with quality
standard of wastewater system to manufacture the safe and non-toxic to customers. Increasing
the consciousness of environment protection may help the company gain more appreciations
from customers.
f. Legal
Regulations and law relating to land issuance and land lease is not quite clear and lack of
transparency, in addition to the plan adjustment, which made the land exploitation become more
difficult. This may hinder Thien Long to expand the production scale when the market size tends
to grow. However, Vietnam is on the process of WTO integration, which brings the opportunities
for Thieng Long in material imports. The reduction in imports tariffs helps Thien Long to
decrease the cost of raw material imports, leading to the decline of product cost in Vietnam
market. In addition, the WTO integration process supports the company in export to overseas
market such as France, Switzerland, Denmark, Germany Therewith, TLG can easily approach
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global market without tariff barriers, but the integration also brings the challenges with
appearances of strong foreign competitors such as Hanson, Quiksilver, Bic, Pentel in context
of decreasing import tariff.
4. SWOT analysis
SWOT comprises Strength, Weakness, Opportunity and Threat, which is involved in the
company. It is a useful tool to understand the current situation of the company by analysis in
strengths and weaknesses (internal resources); in addition, the potential problems as well as the
solutions to limit them are reflected by opportunities and threats analysis (external environment).
SWOT analysis for Thien Long Group Corporation
STRENGTHS
1. TLG is well-known brand and the
number one in stationery industry in
Vietnam
2. Leading company in producing writing
instruments in Vietnam with over 30
years of experience (from 1981)
3. Distribution system widely throughout
the whole nation (across 63 provinces)
4. Financial resource has accumulation
and more investments
5. Variety of stationery products with high
quality, durability and safety (20%

WEAKNESSES
1. Raw material (plastic mainly) depends
on import
2. Lack of senior manager when the
company spread the scale production
3. Quite poor marketing activities
4. Limited highly quality human resources
and engineering team
5. Advanced equipment import in addition
to hiring foreign engineers because of
limited human resources may cause the
bulge of manufacturing price, leading
to the increase of selling price.

brand new and well-accredited product

per year)
6. Highly qualified and experienced top
management team
7. Modern equipment in manufacturing
stationery products
8. Gaining trust of stakeholders and brand
reputation
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OPPORTUNITIES
1. Market size goes up due to population
growth, demand of writing instruments

THREATS
1. The high USD rates along with the
input prices (especially plastic)

and office supply tends to grow

2. The growth of Vietnam economic and

continues to rise
2. Strong competitions from other brands

the increase of total retail expenditure

in domestic and foreign enterprises

3. Counterfeit flooded in the market, was

will rise the spending of stationery

3. Education in Vietnam has more
development with the rise of students,
leading to the intension of products in
education
4. Customers care for the quality and
brand reputation
5. Vietnam joins WTO (World Trade
Organization), which create
opportunity for Vietnam business to
develop exports into other markets
6. The government provides policies to

not well-controlled from the authorities

4. The propensity in choosing substitutes
of customers is resulted in the change
of loyalty level of customers towards
stationery brand
5. Strict regulations from the government
for organizations in emission
processing during manufacture
6. Market share goes down in case of
competitive selling price

support Vietnam products.

After pointing out the four factors applied in Thien Long Group Corporation, the link between
internal resources and external environment will be presented to help the company find out the
way to increase the strengths with the opportunities, and to minimize the weaknesses along with
threats. The combination of these factors presents helpful information to see how well the
company can handle the resources and capacities against the influence come from the
environment (Bhm, 2009). (See Appendix 3 for more detailed information)

II.

Where do we want to be?

From the start of the business, Thien Long has set up clear vision, mission and core value for the
whole corporation. The top management and staff team understand deeply and work towards the
objectives for the development of the company. (See Appendix 4 for more information)

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III.

How do we get there?

To achieve the determined objectives, Thien Long needs to implement appropriate strategies.
There are three generic strategies which are identified by Michael Porter (1980, 1985, 1989) as
the functional strategies for every business (See Appendix 5 for Porters generic strategies).
These strategies are considered as generic strategies because businesses and industries can be
equally applied (Sehgal, 2010, p.34). Therefore, after using different models such as SWOT
analysis, PESTEL, Porters five forces and value chain to analyze the influencing factors,
Porters generic strategies are used to evaluate the current strategies of Thien Long Company.
The target customer of TLG is students, officers, schools, agencies who have the demand
of using stationery products. There are different kinds of customers with appropriate product for
each type; for example, flexoffice for officers, Colokit for Art learners or Ten mark for kids. The
different customers with different demand on using stationery, Thien Long does not focus on any
segments in niche market, so the focus strategy cannot be applied to the current strategy of the
company. Instead, cost leadership and differentiation are two applicable strategies for the
strategic management of Thien Long Group Corporation.
With differentiation strategy, TLG can utilize the strengths which mentioned in SWOT
analysis, and develop the R&D department as valuable resource of the company in order to serve
the customers with best quality of stationery products. Being manufactured by modern
equipment and high quality of materials, TLGs stationery products are durable and stable in
quality. Thanks to investment in R&D activities, the feature of products are regularly renewed
and improved to meet the demand of customers. For instance, B-master pen and La Tre pens
(Bamboo Leaves) are two newest products of Thien Long to manufacture following the demand
of customers in studying and writing practice. To be specific, B-master pen is created with a new
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ink and intestine to make a nice stroke and smooth ink in writing; furthermore, La Tre pen is
used to practice writing and the users can adjust the bold or normal stroke. The innovation in
details and features of Thien Longs product contributes to create an impression in customers
minds as well as the increase in satisfaction level toward the brand.
With cost leadership strategy, Thien Long may concentrate on the price reduction tactics
beside the significant improvement in production cost decline. The stationery products of TLG
are set up the reasonable price for customers as students and officers mostly, but the quality is
ensured in each product. For example, a ballpoint pen in different color like red, blue, purple or
black, costs from 1.500VND to 4.500VND a reasonable price for customers, especially
students; TLGs ballpoint pen is considered as smooth writing, different colors, easy to hold and
no clogging. Beside the concentration on low cost product, Thien Long also implements
promotional activities such as discount policy for stationery product on some occasions like at
the end of the year, the beginning of school year or the university entrance. Additionally, the
company promotes the self-manufacture equipment and materials to reduce the import price from
foreign market, which create opportunities to apply cost leadership strategy for a long time to
rise up the reputation and profit for Thien Long.

Recommendations

Although the position is holdup in the market, Thien Long may deal with potential issues when
operating the business in erratic movements of the industry. Currently, the company has
implemented cost and differentiation strategy mainly; however, the increase in price of imports
may make a significant impact on the strategic management, especially to the cost leadership
strategy because the high cost in material import can lead to the rise of product price. Therefore,
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firstly, TLG can keep following the cost leadership strategy in addition to backward integration
strategy. By using backward integration, the company can own the distributors and suppliers for
the product material. The ownership of suppliers can help TLG to control actively the materials;
it creates the corporate capability and the ease to follow the low cost strategy. Next, R&D
activities are maintained to invest to chase the differentiation strategy. Thien Long can continue
to make a difference with other brands by promoting product development strategy with 20%
brand new product each year to adapt the customers demand. In summary, according to the real
situation, some recommendations above are proposed for Thien Long Group Corporation to
develop and to gain more success in the future.

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Conclusion

The report provides information about strategic management of Thien Long Group
Corporation following some models lists out as SWOT analysis, PESTEL, Porters value chain
and five forces applied for the company. In which, Porters generic strategy is the main part in
evaluating the current strategy of the company to achieve the determined objectives. By using
those models, TLG can understand how the business be impacted through the factors in both
internal and external audit during the strategy determination and implementation process.
After the report, I hope that viewers can have a clear overview about the strategic
management of Thien Long Group Corporation, and the useful information will support learners
in following study and research. Finally, I hope Thien Long company can gain more success in
the future.

Word count: 3578

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Appendix

1. Current competitors analysis in domestic market

Firstly, Ben Nghe Company ranks the second position in the stationery industry, which makes a
direct competition with Thien Long in producing the ballpoint pen. The competitive advantages
of Ben Nghe Company are experiences in manufacturing and business due to the early
appearance in Vietnam market (since 1984) and loyal customers. However, Ben Nghe Company
has diversified the businesses into food processing, livestock, helmet production and they do
not focus on the traditional business as stationery. Therefore, the marketing activities for
stationery products of Ben Nghe Company are limited, and it is really a good opportunity for
Thien Long to make a breakthrough to stay further from this competitor.
Secondly, Hong Ha Company is also a competitor in domestic market. This company has started
the business for over 50 years, so experience in manufacturing and business is top competitive
advantage of Hong Ha. However, Hong Ha Company focuses on producing notebook and ink
pen as the main line of products. Ballpoint pen, as main strength of Thien Long, is not a main
product line of Hong Ha, when this product appeared in 1999 and it accounted 2% of the
ballpoint pen market. Hence, it is possible for Thien Long to speed up the business, especially in
producing ballpoint pen market in Vietnam.

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Figure 2.1: Comparison in price and variety of products between Thien Long and Ben Nghe
Hong Ha brand.

2. Vietnam GDP rates and inflation rates

Growth rate at comparative years (%)

Total
Agriculture, forestry and

Year 2012

Year 2013

Year 2014

5,25

5,42

5,98

2,68

2,64

3,49

Contribution to
total growth rate
in 2014 (%)
5,98
0,61

fishery
Industry and construction
5,75
5,43
7,14
2,75
Service
5,90
6,57
5,96
2,62
Figure 3.1: GDP Growth in 2012, 2013 and 2014 (Source: General Statistic Office 2014)

Figure 3.2: Vietnam GDP Statistics in duration of 2006 2014 (Source: Tradingeconomics)

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Based on the chart, we can see that the Gross Domestic Product (GDP) in Vietnam was
forecasted 171.39 billion US dollars in 2014 and the value of Vietnam GDP shows off 0.28 % of
the world economy. The GDP measures the income and output of the economy of Vietnam. It
equalize to the total expenditures of good and services which are produced in the country in a
period of time. As being clearly seen, the GDP of Vietnam has a moderate increase over each
year, presenting the stability of the inputs.

Figure 1.3: Vietnam Inflation rate in 2014 (Source: Tradingeconomics)

The chart indicates the inflation rate in Vietnam recording in 2014, which accounts for 1.84% in
December. According to the General Statistics Office of Vietnam, form 1996 to 2014, the
average rate of Vietnam Inflation Rate counted for 7.16% reaching the top at 28.24% in August,
2008. Otherwise, the low record was noted in July, 2000 with -2.6%. In Vietnam, the inflation
rate measures the increase or decrease in prices that customers are willing to pay for the standard
of products. Inflation rate is important data for TLG to implement suitable strategies.
3. SWOT matrix for Thien Long Group Corporation

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External
environment

1.

2.

3.

Internal
resources

4.
5.

6.
STRENGTHS (S)
1. TLG is well-known
brand and the
number one in
stationery industry
in Vietnam
2. Leading company in
producing writing
instruments in
Vietnam with 30
years of experience
(from 1981)
3. Distribution system
widely throughout
the whole nation
(across 63
provinces)
4. Financial resource
has accumulation

OPPORTUNITIES (O)
Market size goes up due to
population growth, demand of
writing instruments and office
supply tends to grow
The growth of Vietnam economic
and the increase of total retail
expenditure will rise the spending
of stationery
Education in Vietnam has more
development with the rise of
students, leading to the intension
of products in education
Customers care for the quality and
brand reputation
Vietnam joins WTO (World Trade
Organization), which create
opportunity for Vietnam business
to develop exports into other
markets
The government provides policies
to support Vietnam products.

1.

2.

3.

4.

5.

6.

THREATS (T)
The high USD rates along with
the input prices (especially
plastic) continues to rise
Strong competitions from other
brands in domestic and foreign
enterprises
Counterfeit flooded in the market,
was not well-controlled from the
authorities
The propensity in choosing
substitutes of customers is
resulted in the change of loyalty
level of customers towards
stationery brand
Strict regulations from the
government for organizations in
emission processing during
manufacture
Market share goes down in case
of competitive selling price

S+O

S+T

S1, S2, S3, S4 O1, O2, O3, O4:

With a lot of competitive advantage,
Thien Long can build up a better
image in customers mind, and also
widen the sales network through
distribution channel. The advantage in
brand reputation helps the company
gains more credibility from purchasers
towards TLGs stationery products
diversification strategy and market
penetration to keep on growing the
customers satisfaction and loyalty
S2, S5, S6, S7 O1, O3, O4: Thien
Long can take advantage from the
strength in line production and high
technology to develop more products
to adapt the need and demand of
customers. With highly qualified labor

S1, S2, S3, S4, S5, S6, S7 T2, T3,

T4, T6: Strengths in brand
reputation, distribution system,
financial resource and human
resource are competitive advantage
of TLG in competition with Ben
Nghe, Hong Ha
S1, S3, S5, S8 T1, T4, T5: It is
very important to keep good
relationship and attention with the
stakeholders like suppliers,
customers, the government,
shareholders
S2, S6, S7 T3, T4: TLG needs to
supervise the product quality control
and to promote marketing activities
or social activities in order to attracts
more customers as well as to help
27 | P a g e

and more
investments
5. Variety of stationery
products with high
quality, durability
and safety (20%
brand new and wellaccredited product
per year)
6. Highly qualified and
experienced top
management team
7. Modern equipment
in manufacturing
stationery products
8. Gaining trust of
stakeholders and
brand reputation
WEAKNESSES (W)
1. Raw material
(plastic mainly)
depends on import
2. Lack of senior
manager when the
company spread the
scale production
3. Quite poor
marketing activities
4. Limited highly
quality human
resources and
engineering team
5. Advanced
equipment import in
addition to hiring
foreign engineers
because of limited
human resources
may cause the bulge
of manufacturing
price, leading to the
increase of selling

force, the quality of product and

service is ensured to satisfy the buyers
cost leadership strategy
implementation
S1, S3, S8 O5, O6: Being a leading
company in stationery industry and a
reliable brand, TLG probably expand
the business tremendously in foreign
market, especially when Vietnam join
WTO and the company receives
support from the government
market development application

them identify the counterfeit

market penetration and differentiation
applied to build up the image of the
company

W+O

W+T

W1, W5 O5, O6: Vietnam joins

WTO, which creates a golden
opportunity for TLG to expand the
business and import the equipment
and facilities with cheaper price
price reduction strategy
implementation
W3, W5 - O1, O2, O3, O4: raw
material and equipment imported from
foreign countries may enhance the
quality of product to adapt the
customers demand. Therefore, the
company needs to propose new
marketing activities and to stabilize
the product quality differentiation
strategy applied to satisfy customers
needs
W2, W4 O1, O2, O6: the profit
getting from the upward trend of
stationery demand can spend on
training and recruitment

W1, W3, W5 T1, T3, T4, T5, T6:

the product quality control needs to
be supervised closely; in addition,
TLG may maintain the distribution
widely and promote marketing
activities to increase the ability to
compete with other brands market
penetration applied to limit the
threats
W2, W4 T2, T6: Human resource
and quality management are two
aspects to pay attention and to
improve to develop in domestic
market and international market

28 | P a g e

price.

4. Vision, mission, core value and objectives of Thien Long Group Corporation
Vision: Being a stationery market leader in Vietnam and Southeast Asia
Mission: As the slogan the power of knowledge, Thien Long provides stationery and

pens for studying activities and for conquering the top of knowledge
Core value: Pioneering in technology and creativity to serve customers with
breakthrough products, together building a sustainably thriving Thien Long community
of humanity

The objective and goals of Thien Long are also strategically clear with the target and
development orientation for the future.

In short-term:
Specializing and automating manufacturing
Developing all domestic commercial channel and international businesses
Becoming one of the best companies with the best working environment, highest benefit

for customers, and highest profit for shareholders.

Maintaining the position number one in the domestic industry
In long-term:
Becoming a stationery market leader in Asia generally and in Southeast Asia particularly
Developing the international businesses to penetrate into the global market
Diversifying the products categories by co-manufacturing products
Maximizing the market share in domestic market
Improving manufacturing on its own machinery and material to reduce cost and to
increase competitiveness

5. Porters generic strategies

29 | P a g e

In the Porters generic strategies, cost leadership is a strategy which involves the low cost in
product and service for customers in the large market. This strategy depends on the capability of
the business in price reduction in the industry. Meanwhile, differentiation strategy reflects the
unique value of product and service to compete with other brands in the industry. Successful
differentiation strategy is about the ability in marketing and designing, research and product
development. Lastly, focus strategy emphasizes the need of particular segment in niche market.
When the market segment is determined, the cost leadership and differentiation can be applied
(McIvor, 2005, p.116).

30 | P a g e

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