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Assignment 2

Business strategy

Task 1: External and Internal Audit

Mission and Vison


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Bring to a clean water source to serve the people. Enhanced with a large amount of
minerals in the water to nourish the body through the water. Innovative products to create
a rich market these products. Create a famous brand in the country and abroad with
quality products
(www.laviewater.com)
Lavie's vision may be a mineral water is present in all parts of the world in 20 to 30
years. Become a powerful branch of Nestle Water can be supplied worldwide. Constantly
develop measurable success indicators (KPI) that their very strict
(http://www.thienanwater.com/)

External analysis Porters Five Forces:


Threats and Barriers of new entrants
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Lavie is one of the companies that produce bottled water long and owns a production line
of modern Italy. So it is difficult to compete with them, the land that they have a pretty
strong brand in the hands of Vietnam market. Moreover, their competitive advantage is
product price and fit well with consumers. So the new people face many risks when
competing with Lavie

Supplier power
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Lavie's supply of groundwater in nature in Vietnam. Currently they have two factories in
Vietnam can provide enough power market in the country and exported to other
countries. Thus Neslte owner Lavie so should make a pedal and is currently distributed in
65 countries worldwide

Buyer power
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With the support and approval of the customer, Lavie increasingly occupy the hearts of
consumers. Everywhere in Vietnam can also purchase Lavie and 95% of people in
Vietnam known brand Lavie. It has proved very successful when they arrive Vietnam.
Because they have quality, good price products and essential in everyday life.

Threats of substitutes
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One of the biggest challenge and threat of Lavie is Aquafina and Vital. Aquafina is a
bottled water company by Pesi production and Vital is a company in Vietnam by local

production. They are also well-known firms in Vietnam 2 and can compete with Lavie
lose their market share. With Vital, they have cheaper prices than Lavie and Aquafina has
beautifully designed, should have the following risks they can recapture market share in
Vietnam Lavie.
The degree of rivalry
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The level of competition Lavie can be viewed through the opponent's Vital and Aquafina
in major advertising campaigns. They advertise by famous people using their products on
public television. This is a very fierce competition because the market in Vietnam but
also other international markets.

PESTLE Analysis

PEST analysis that is an acronym stands for 'Political, Economic, Social, and Technological
analysis' (wikipedia.org). PEST describes a framework of macro-environmental factors that are
used in the environmental scanning constituent of strategic management (wikipedia.org).
According to that, here is the PESTLE analysis of Lavie:

Political:
These factors determine the extent to which a government may influence the economy or a
certain industry (wikipedia.org).
The Viet Nam economy is an open economy which allows and appreciates foreign/local direct
investments. The Viet Nam comprises the market based / frees market economy with less
governmental control and interventions. The government plays its role as a facilitator rather than
influencer in the business industries and markets

Economic:
These factors are determinants of an economys performance that directly impacts a company
and have resonating long term effects (wikipedia.org).

Economy is suffering from a recession due to global financial crisis. However, in 2 year nearly,
economy in Viet Nam had flourishes and the gobal financial don't affect too much to the business
of company like Lavie.
Social:
These factors scrutinize the social environment of the market, and gauge determinants like
cultural trends, demographics, population analytics, etc (wikipedia.org).
Consumers focus is now shifting towards standardized goods and services are low prices. So
that can be a problem for Lavie choose the pricing when try into the market in Viet Nam which
have a lot of competitor like Vital and Pesico. So, how can they solve this problem?
Technological:
These factors pertain to innovations in technology that may affect the operations of the industry
and the market favorably or unfavorably (wikipedia.org). This refers to automation, research and
development and the amount of technological awareness that a market possesses (wikipedia.org).
Lavie is a big company in bottled water sector. So they always is leader in technology when
product any products.
Environmental:
These factors include all those that influence or are determined by the surrounding environment
(wikipedia.org).
Ethical Standards are high and organizations have to participate actively in the corporate social
responsibilities. The organizational environment in Viet Nam is most diplomatic and more
performance. In Viet Nam, customer care a lot about the responsibility of company with
environment and their contribution with social. The culture of Lavie is both performance
oriented and diplomatic (Lavie.com.vn)

Internal Analysis
VRIN Analysis
VRIN framework can determine if a resource is a source of sustainable competitive advantage
(Barney, 1991). To serve as a basis for sustainable competitive advantage, resources must be:
Valuable: meaning that they must be a source of greater value, in terms of relative costs and
benefits, than similar resources in competing firms (Barney, 1991).
Rare: rareness implies that the resource must be rare in the sense that it is scarce relative to
demand for its use or what it produces (Barney, 1991).
Inimitable: it is difficult to imitate (Barney, 1991).
Non substitutable: other different types of resources cannot be functional substitutes (Barney,
1991).
The criteria of the VRIN Framework clearly rules out best practices as a source of competitive
advantage (Barney, 1991). However, if other firms can easily understand and copy a capability, it
is not a source of advantage (Barney, 1991)

VRIN Framework of Lavie

Lavie's competitive advantage is hitting the confidence of clients and their brands.
Because people in Vietnam are familiar with the brand Lavie. With production costs low
and famous brands, they accounted for the majority of market share is a very easy task.
They just concentrated distribution for good and create more innovative in the market.
Regarding the quality of the product is not to say they were present in over 20 years in
Vietnam and is one of the bottled water company soon appear here. They have a strong
enough power to compete with all kinds of bottled water available in Vietnam with many
types of bottled water products from 0,5l to 18L capacity.

SWOT Analysis
After evaluate the Internal and external of Lavie, there is SWOST of Lavie in Viet Nam market

Strength

Lavie has advantages about social and

Weakness
Packing is old

environmental development with

economic growth.
Fame for creative for new message
Affordable price
Sponsors of major sports events and
teams

Opportunities
Creative new product line, target all

ages which less competitor other sector.


Maintain better standard of product.
Advertising products to the world

Threat

Copy by competitor
Out of supply from natural

Stakeholders analysis
Stakeholder needs and requirements represent the views of those at the business or enterprise
operations level that is, of users, acquirers, customers, and other stakeholders as they relate to the
problem (or opportunity), as a set of requirements for a solution that can provide the services
needed by the stakeholders in a defined environment (sebokwiki.org).
With Lavie, stakeholders includes employees, customers, investors, community, nongovernmental organizations (NGOs), industry and sector bodies, suppliers, regulators and
governments.
Related parties may be individuals or organizations with interests in all aspects or influenced the
activities of the company will lose or gain something. Their influence is very large compared to
the company, such as interest on the project or activity is most shareholders have the same idea
to start for easy operation. About the stakeholders of Lavie, they include owners, managers and
employees, customers and local communities are defined as shareholders offering products and
services directly to customers

Stakeholder

Employees

Engagement approach and their interest

Annual employee engagement survey.


Employee volunteering.
Social network in Facebook which help employees can easier

connect and exchange information.


Training for employees
Trip to help employees more close and therefore, it can help
management discover the ability and potential of each
employee.

Clients and customers

Customer loyalty survey


Evaluate satisfy of customer by feedback and survey, event

by revenue and profit each month.


Customers complaint
Satisfy for customer about product and have a suitable pricing

One meetings broad management can discover the want and

the need of Shareholder


Focus groups
At the end of the month have to payment for equity
Collaboration with multilateral agencies and key NGO

partners to deliver community investment programs


Education of clients and customers
Charity and contribution for community.

Round tables on themes


Participation in NGO meetings, for example. NGO Private

Sector
Contribution and take part in in some organization.

Meetings
Advisory panel participation
Conferences
Meetings
Regular written communication
Active implementation of regulatory requirements and

Investors

Communities

NGOs

Industry bodies
Regulators

Government

involvement in regulatory oversight processes


Meetings
Conferences and speaking engagements
Regular written communication

Task2: Suggestions of business strategies for Lavie.


Generic strategy (Porter)

In this case, Lavie set 18 liters Lavie into the differentiation strategic for their new product.
Although the market for products for men in Vietnam is not really new, as many brands as Vital,
Aquafina exit the market, capacity 18 liters Lavie also select markets for office and that office
has so many competitor products. They put the 18 liter capacity Lavie a higher cost than other
brands. However, Lavie 18 liter capacity production and consumption in Vietnam they prepare a
strategy and major campaign is very bold. And Lavie 18 liter capacity was successfully impress
customers being put to use as a daily drink in public places, especially schools. In particular,
Lavie difference of smell and other prominent features, because their products contain some
minerals featured with other carriers. With the giving consumers access to their products by
approaching from work to play where I'm confident now and later they still hold the majority
share of the market in hand.
Theoretical frameworks
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Companies which want to ensure the long term development need to base on sustainable
competitive advantage to create their business generic strategies. In aspect of generic
strategies, Porter (1980) suggested that there are four strategies such as cost leadership,
differentiation, hybrid and focus strategy. Cost leadership and differentiation strategy is
used to operate in the broad market, serve many segments of customers without any
particular actions for any segmentation while focus strategy is leveraged to achieve
market share in specific segments in which companies have planned their actions serving

particular customers through proposals of differentiation, cost leadership or the


combination of these two strategies.
In pursuit of cost leadership strategy, the company is pushing the economy of scale and
cost of production and sales levels to a minimum. In this strategy, they make profits for
their products and tight cost and some of its competitors can be based. Differentiation
strategy, products and services companies are willing to pay higher prices for the unique
features that can provide customers with the products or services. Leading company for a
reasonable cost, rather than the number of products that can make them at higher prices
of different strategies. Cost leadership and differentiation strategy of choice or a
combination of the two communities in a number of strategic focus of the company on
their activities. The strategy of cost leadership and differentiation strategies focus of the
market means tight to mention.

Strategy Clock (Bowman)

From 'Corporate Competitive Strategy' by Cliff Bowman and David Faulkner.


1997.Reproduced with permission from McGraw-Hill Companies, Inc.
Looking at Porter's strategies in a different way, in 1996, Cliff Bowman and David Faulkner
developed Bowman's Strategy Clock. This model of corporate strategy extends Porter's three
strategic positions to eight, and explains the cost and perceived value combinations many firms
use, as well as identifying the likelihood of success for each strategy (mindtools.com). The
picture above represents Bowman's eight different strategies that are identified by varying levels
of price and value (mindtools.com). In this case, the capacity of 18 liters Lavie create a

breakthrough and competitiveness of small firms in the area. On the other hand this product only
in Vietnam so they can easily be distributed to many places in the area. Lavie make sense for
customers to source quality products with aesthetic that low price, which is something very rare
in developing countries like Vietnam.

Functional strategy
Organic Growth strategy
Organic growth strategy involves strengthening your company using its own energy and
resources (smallbusiness.chron.com). This approach to company growth is slower than others,
but it has relatively low up-front costs, making it an attractive option for small-business owners
who want to expand their companies but dont have large amounts of liquid capital
(smallbusiness.chron.com).
Lavie also have the planning for training for employees and management a lot about their field
and soft skill. After working in Lavie, employees were interviewed and had to pass a lot of hard
exams, also the hard conditional of working in Lavies company. So, the employees of Lavie also
is the good people and the training them also less more time. However, Mr Ho Quoc Viet, Nestle
waters Vietnam Chairman said The needs of training employees is always necessary because
employees are people who directly bring product to the customer, etc. So before implement the
campaign, Lavie have to choose and training more hard for employees. Besides, we can see the
technology of Lavie is develop with apply the highest technology in this time about pray for
bottom water.
All in all the secret of Lavie successful is not only the way they set price or strategy but also the
way they use the nature resources.

Corporate Strategy
Ansoff matrix (1957)

The Ansoff Matrix was first published in the Harvard Business Review in 1957, and has given
generations of marketers and small business leaders a quick and simple way to develop a
strategic approach to growth. Sometimes called the Product/Market Expansion Grid, it shows
four growth options for business formed by matching up existing and new products and services
with existing and new markets in the picture above
(http://www.smartinsights.com/marketing-planning/create-a-marketing-plan/ansoff-model/).
Base on just 1 factors are market and product to evaluate the marketing strategy of Lavie in
Vietnam
First, it is the market that is selected by Lavie. Lavie choose to bottle 18 liter capacity for the
public as a potential market. Lavie understand the potential market and in particular the existing
market (as in Clock strategic analysis above). So, in summary, Lavie apply the product
development strategy of the Ansoff matrix. It applies to new products in existing markets.

Grand Matrix

A strategy matrix is a tool used by businesses to devise alternative strategies .The matrix is
mainly based on four basic elements: the rapid growth of market, market growth slow, strong
competitive position and weak competitive position
( http://jbarcayan.tumblr.com/post/3779166419/strategic-management-papers-page-26-end).
This strategy is based on the market of the product and the company's position to determine the
quadrant of the company. Therefore, Lavie can provide the strategic decision to replace.
First is the product of this Lavie irrespective of the market segment that is growing rapidly and
there are a lot of companies want to invest.
Second, Lavie is one of the major companies of bottled water in the world. In Vietnam, Lavie
also a lot of loyal customers for their high trust in the quality of the product or price matching.
So, Lavie has strong competitive position than other companies.
In short, the product of Lavie is in quadrant 1, but with the rapid growth of the market and strong
competitive position.

Evaluation of generic strategy and corporate strategy suggested to Lavie


For example Thrasher (2013), Lavie has a great brand, great value and well-known competition
is the best bottled water in many countries around the world. In late 2014, the bottled water

market will reach total sales of about 279 million, an average annual growth of 6% / year in the
period 2009 - 2014.As the same time, the total output of the entire market reach 307 million
liters. Comments on bottled water market worldwide, offering MarketLine analysis, though the
expansion slowed for 5 years (2010-2015), but the Asian market - Pacific has achieved growth
rates highest, reaching 12% / year (US $ 35 billion), surpassing the US and European markets.
So Lavie grow day by day. So, Lavie strategic acquirer's share of Asia thanks to the pedal of the
parent company is Neslte to increase sales.
Lavie produce production necessities to people so they will make great promotional strategies to
attract investment and promote their brands internationally. So in the short time they can beat the
competitors on their international market.

Task 3
Hybrid strategy Cost leadership and Differentiation strategy
- Step1: Base on task 1 and task 2, we see Lavie is a major competitive advantage. From

the brand until the opponent cannot be beat Lavie. Therefore, when applying powerful
advertising plan Lavie in revenue can be pushed further by the consumption of consumer
products due to the trust before.
Step2: Focused study a completely new product, capable of doing a lot of work in the
lives of consumers, such as designing new styles can be recycled for use in the other.
Step3: Launching new products in the store chain, announced the new functions and their
effects. Environmentally friendly is a leading indicator of products from water bottles.

Strategies need to choose


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Step1:Roles and responsibilities: Lavie's leaders should pay attention to the


management of investment projects and the assets of the company. For example, stocks,
bonds, and other types of assets in other papers. The leaders of the companies can invest
with organizations such as: '' insurance, pension funds, charities or travel ''.
Here the leaders of Lavie will establish an office of investment projects to assess
appropriate strategies with which they are preparing to launch for future development.
They will receive financial, handling and distribution as appropriate. They will be an
essential part of financial control in the company
Step2: Implementation step: Creating a link between departments within the company
to communicate with each other and exchange information quickly and easily. It is the
meeting between the chief and the director or phone calls. It is for the exchange of
information and sharing of information between employees and managers. It shall
support experience different positions in a large company. That way works best for now.
Step3: resources allocation: Allocation of resources is used to specify the resources
available in a subtle way. They are also a living resources should have a perfect location
to the fullest. In project management, resource allocation is scheduled operational

activities of a large company. So Lavie has been used to apply and take appropriate
personnel according to ability and do the job properly trained. So that managers can work
easier and more useful.
Step4: Key success factors

Activity
New product development

Advertising programmers

Pricing programmers

Critical Success Factor


Research market
Design products with new shapes and beautiful products with
sufficient minerals for health
Cost for advertising
Rating of ads in the social media channel
Price relative to the industry average
Price elasticity

Timeline
duration

Start

Finish

Indifine market

30 days

15/6/2014

15/7/2014

Indifine product

7 days

2/7/2014

10/7/2014

Indifine price, promotion

7 days

2/7/2014

10/7/2014

Indefine culture

5 days

10/7/2014

14/7/2014

Indefine people

3 days

10/7/2014

13/7/2014

Indefine place

5 days

13/7/2014

17/7/2014

Design

16 days

17/7/2014

1/8/2014

Active

3/10/2014

Conclusion
Lavie which is a company producing bottled water is very popular because there is a big brand
Neslte made by the parent company. So lavie huge capital plus a strong brand in the market
should not compete with other firms knocked them out of the market. Besides, they have the
appropriate strategy for the market as SWOT, Generic strategy, Strategy Clock (Bowman), they
will grow in the future and diversification strategies.

Reference
http://en.wikipedia.org/wiki/PEST_analysis
http://www.createadvantage.com/glossary/vrin-framework
http://www.sebokwiki.org/wiki/Stakeholder_Needs_and_Requirements
https://www.laviewater.com/
http://www.marketingteacher.com/bowmans-strategy-clock/
http://www.smartinsights.com/marketing-planning/create-a-marketing-plan/ansoff-model/
http://mattslorick.blogspot.com/
https://www.laviewater.com/index.php/tin-tuc-su-kien/detail/36/nestle-waters-tiep-tuc-dau-tu-taiviet-nam.html
http://dddn.com.vn/dau-tu/cuoc-chien-khoc-liet-cua-cac-ong-lon-20120906090620986.htm
http://www.thienanwater.com