BUSM3311 HoaPhatFurniture India

INTERNATIONAL BUSINESS PLAN
HOA PHAT FURNITURE JSC
RMIT International University Vietnam

Bachelor of Commerce Program
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Subject Code:
BUSM3311
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INTERNATIONAL MANAGEMENT
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RMIT Vietnam – City Campus
Title of Assignment:
INTERNATIONAL BUSINESS PLAN
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Student name:
Pham Thi Hong Anh
Nguyen Minh Hoang
Nguyen Nam Phuong
Doan Thi Ngoc Thanh
Phan Huu Phung
Nguyen Ngoc Duc
Student Number:
S3274928
S3246594
S3256152
S3274998
S3275007
S3245580
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ADRIAN WEE
Assignment due date:
23 Dec 2011
Date of Submission:
23 Dec 2011
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Number of pages including this one: 99 pages
Word Count:(Main Content)
2 INTERNATIONAL BUSINESS PLAN

Executive Summary
Hoa Phat Furniture JSC is one of the subsidiaries of Hoa Phat Group. Its main businesses
are manufacturing and trading home, school and office furniture. Office furniture is the
main product lines which takes a large amount of proposition of sales volume as well as value.
Hoa Phat has got the first position in manufacturing in Vietnam furniture and they are
famous in South East Asia market. The company also has exported the products to other
countries such as French, Russia, Panama, Dubai, Kuwait, Japan and UK. Company provide
a wide range of high quality product which are checked under a quality management system of
environmental standards ISO 14001:2004 and ISO 9001:2000 by BVQI,UK.
The report aims to analyze and plan the situation where Hoa Phat Furniture Company plans to
expand its business into India market.
Firstly, an overview about India country will be analyzed in term of Geography, Population,
Government, economic and some other information including languages, transportation and
Media. Generally, as one of the fastest developed economy countries in the world with the
growth of India economy and demand for the office those are witnessed for the growth rate of
20%. The demand for furniture is expect to growth by 26.4 % in 2015 and it has a stable
Government. Thus, it can be seen as a potential and safety market for Vietnamese Furniture
companies such as Hoa Phat Company join in and make profit.
Secondly, the overview about the Hoa Phat Company itself as well as the current situation of
Vietnamese and Indian furniture industry will be analyzed. While Vietnam is becoming the
largest furniture exporter in South East Asia and being placed at 6 th largest furniture
exporter in the world, India is the 14th largest furniture markets in the world. It is clearly
show that Vietnamese firms have strong capacity to join the potential market. The 4P’s that Hoa
Phat Furniture is using in Vietnam market will be analyzed. Based on that, the 4P’s using in
India will be created to fix with the market’s demand.
Next, the international business environment in India will be studied. First of all, the Business
practice including Hofstede’s dimension and Do’s and Don’ts will help the company understand
more about the culture aspect. Next, Social condition and economic condition in India will be
analyzed in detail. One of the most important tasks needs to be considered when entering the
new market is analyzing the competitors. Godrej and Boyce, Style Spa and Durian are three main
competitors of Hoa Phat Furniture due to their long appearance in the market and owning
extensive distributions systems throughout India. Finally, a SWOT analysis which can be seen as
a summary for the current situation that Hoa Phat will face if they want to enter India market will
be studied.
After that, the report will analyze the Goble Competing strategy. Hoa Phat Furniture Company
will bring their office furniture to enter the market. Its main target customers will be the
service industry such as hospital, hospitality, and building and middle class office who live
in New Delhi, Mumbai and Bangalore. In order to compete with other competitors such as
Godrej and Boyce, Durian and Style Spa, for the 1st year entering the market, cost-based
pricing, product bundle and promotion bundle pricing will be applied. Moreover, the
customization products which allow customers can design their products by themselves will be
offered in India market. An extensive promotion plan with using of internet, print, sales
promotions and especially direct sales and direct marketing will help Hoa Phat Furniture to
make Indian customers aware of and build the good image in the market. While the main
products will be offered to Indian Individual customers are office chair, computer desk and
resistant safes, the company will provide all products that they are offering in Vietnam market
to business customer. Hoa Phat will enter the market by wholly owned subsidiaries. It means
that the company will established its own distribution channel.
Then, the estimated budget for entering the market will be generated. All cost including
operation cost, marketing cost, logistic cost will be included in the financial plan. It will help the
company evaluate whether the plan could bring them benefit or not.
Finally, the International aspect to check the feasibility of the plan will be discussed in detail.

Table of Contents
Executive Summary................................................................................................................................3
1. Introduction.....................................................................................................................................7
2. Country Overview..........................................................................................................................8
2.1. Geography................................................................................................................................8
2.2. Population.................................................................................................................................9
2.2.1. Religious Structure...............................................................................................................9
2.2.2. Age Structure......................................................................................................................11
2.3. Government.............................................................................................................................11
2.4. Economic................................................................................................................................12
2.5. Other Information...................................................................................................................14
2.5.1. Media..................................................................................................................................14
2.5.2. Languages...........................................................................................................................18
2.5.3. Transportation.....................................................................................................................19
3. Furniture Industry- Company Overview and Product Overview...........................................22

3.1. Furniture Industry..................................................................................................................22
3.1.1. Vietnam Furniture Industry:...............................................................................................22
3.1.2. India Furniture Industry......................................................................................................24
3.2. Company.................................................................................................................................27
3.2.1. Company Profile.................................................................................................................27
3.2.2. Vision..................................................................................................................................29
3.2.3. Mission Statement..............................................................................................................29
3.2.4. Organization Structure........................................................................................................29
3.3. Products Overview..................................................................................................................31
3.3.1. Product Description............................................................................................................31
3.3.2. The 4 P’s.............................................................................................................................36
3.3.2.1. Product........................................................................................................................36
3.3.2.2. Price............................................................................................................................38
3.3.2.3. Place............................................................................................................................38
3.3.2.4. Promotion...................................................................................................................41
4. International Business Environment..........................................................................................44

4.1. Business Practices..................................................................................................................44
4.1.1. Hofstede’s 5 Dimensions....................................................................................................44
4.1.1.1. Power Distance Index (PDI).......................................................................................45
4.1.1.2. Individualism..............................................................................................................45
4.1.1.3. Masculinity.................................................................................................................45
4.1.1.4. Uncertainty Avoidance Index-UAI.............................................................................45
4.1.1.5. Long-Term Orientation-LTO......................................................................................46
4.1.2. Dos and Don’ts...................................................................................................................46
4.2. Social Conditions....................................................................................................................48

4.3. Economic Conditions..............................................................................................................50
4.4. Competitors Analysis..............................................................................................................50
4.4.1. Direct Competitors..............................................................................................................54
4.4.2. Indirect Competitors...........................................................................................................57
4.5. SWOT Analysis.......................................................................................................................59
5. Global Competing Strategy.........................................................................................................62

5.1. Marketing Objectives..............................................................................................................62
5.2. Entry Models...........................................................................................................................63
5.3. Segmentation, Targeting and Positioning..............................................................................69
5.3.1. Segmentation......................................................................................................................69
5.3.2. Targeting.............................................................................................................................71
5.3.3. The 4P’s in India Market....................................................................................................75
5.3.3.1. Product........................................................................................................................75
5.3.3.2. Price............................................................................................................................78
5.3.3.3. Place............................................................................................................................79
5.3.3.4. Promotion...................................................................................................................80
5.3.4. Positioning..........................................................................................................................83
6. The financial Plan.........................................................................................................................85

6.1. Financial Marketability..........................................................................................................85
6.2. Projected PNL Statement........................................................................................................89
7. International Aspect.....................................................................................................................91
8. Conclusion.....................................................................................................................................94
9. Reference.......................................................................................................................................95

1. Introduction
Globalization has increased significantly in recent years. It motivates a lot of companies to
expand their business to global market. This is a good opportunity for companies to seek more
customers and increase market share in oversee market and bring more profit back to the
company and help to develop their countries’ economy. Vietnamese Government also has tried
to support the local companies for doing business internationally. By successfully joining in
WTO, Vietnamese companies can reduce the barriers to enter the international markets easily.
As one of the many Vietnamese companies is getting success by doing business globally, Hoa
Phat Furniture join stock company also gets success through exporting their product to outside
Vietnam market such as Lao, Cambodia, French, Russia, Panama, Dubai, Kuwait, Japan and UK.
Its products are being accepted by the international customers. The company is looking for other
potential market to expand their business. With over fifteenth year experience the Vietnamese
market to become the 1st position in local furniture industry and having strong support from the
Hoa Phat Group, Hoa Phat Furniture has enough capacity to look for a new market to expand
their business. As the 14th largest furniture market in the world, India is being considered to be
the market that helps the company making benefits in the future.

2. Country Overview
2.1. Geography
India is a country in South Asia and it is seventh largest country in the world. India is
covering an area of 3.28 million square kilometers. The land of India extend to the north of
the equator between 8°4' and 37°6' north latitude and 68°7' and 97°25' east longitude. India
has a land frontier is 15,200km and the length of the coastline is 7,517km (MapsofIndia
2010).
India is a result in the division of the Indian Ocean –the southwest by the Arabian Sea, and
the southeast by the Bay of Bengal.
India has a great diversity of landforms like as mountain ranges, deep valleys, many
islands, rivers, coastal plain, seas, and ocean along with all majors’ cities of India.
 Capital: New Delhi.

 Major Cities: Mumbai,
Kolkata, Bangalore and
Chennai.
 Area: 1,269,219 square
miles (3,287,263 sq km).
 Bordering Countries:
Bangladesh, Bhutan,
Burma, China, Nepal
and Pakistan.
 Highest Point:
Kanchenjunga at 28,208
feet (8,598 m).
 Coastline: 4,350 miles
(7,000 km).
Figure 1: Reproduced from: Culture-4-Travel 2008-2010

2.2. Population
India is a second biggest population country in the world with over 1.2 billion people.
Currently, the first position is China with over 1.3 billion people. However, with the
population growth rate at 1.58%, India is predicted to take the first position from China by
the end of 2030 with over 1.53 billion people. ‘Poverty, illiteracy, high fertility rate, rapid
decline in death rates or mortality rates and immigration from Bangladesh and Nepal’ are
some reasons for India’s rapidly growing population. (Indiaonlinepages 2011).
Figure 2: Reproduced from: Indiantourismdirect.com 2011
2.2.1. Religious Structure

Population of India is 80% Hinduism and many other religions such as Sikhism,
Jainism, Christianity, Buddhism and Islam (Makar 2008). By having 80% Hinduism,
when entering to India market, Hoa Phat Furniture needs to consider carefully about
the culture of Hinduism than other. The reason is the company’s main customers
would be Hinduism. Therefore, if the company fail to understand their culture, the
company will be difficult to be success in India.

India's Religions 2010

3% 2% 2%
11% Hinduism
Islam
Christianity
Sikhism
Buddhism, Jainism, other
83%
Figure 3: Adapted from: Culture-4-Travel 2008-2010
Figure 4: Reproduced from: Compare InfoBase Pvl.Ltd. 2001-2002 (cited in Culture-4-Travel 2008-2010)

2.2.2. Age Structure

As the chart below, there is about 30% of India’s population is below the age of 15
and over 60% of them are from 15-65. It means India is young. According to CIA
2011, “the age structure of a population affects a nation's key socioeconomic issues.
Countries with young populations (high percentage under age 15) need to invest
more in schools”. It can be seen as a potential market for Hoa Phat exporting school
furniture which is one of its main furniture product lines. Moreover, with more than
half of the India’s population are in working-age. Thus, Hoa Phat can easily to find
the good employees with cheap labor cost in India. It will help the company in saving
cost to keep the price of products affordable for the target market.
Figure 5: Reproduced from: U.S. Census Bureau 2010 (Cited in NationMaster.com 2003-2011)
2.3. Government
India has complex government and that country is known as the Union Government, also
known as the Central Government. India was built by the Constitution of India and
government of India was authority of the union of 28 states and 7 union territories. In
general, India was called by the Republic of India. The capital of India is stayed at New
Delhi (National Portal of India 2011).
Indian Government is run by three branches including the executive, the legislative and the
judiciary. Firstly, the Executive which is a Head of State by the President, and the President
can be supported directly through the officers. Secondly, India has a parliament system and
the legislature is the Parliament. It runs the lower house Lok Sabha, upper house Raiya
Sabha, and they run as well as the president. The last one, the Judicial branch run the
Supreme Court, High Courts, and numerous civil, criminal and family courts at the district
level. Moreover, government of India has a legal system based on the English Common
and Statutory Law (National Portal of India 2011).
President of India: Smt. Pratibha Devisingh Patil Honourable Vice President of India M. Hamid Ansari
2.4. Economic
Currently, India economy is developing with dramatically and attracting the looking of the
people from over the world. Moreover, the condition of India financial has illustrated
significant development in the months and it still stable until these days. According to the
article India Economic Outlook (2011), the financial of country is still stable in many
years, and the inflation has not become a significant problem. However, the inflation rate is
high and it has overshadowed the growth of the economy. As per the reports of Indian
inflation rate 2011, the non-food inflation has come down to 7 percent this year. It was
around 11 percent previously”. In fact, the GDP Indian economic is still improved in the
last few quarters. According to the article “India economy overview” 2011, the growth of
GDP is constant prices with 8.5% in 2010-2011, that is more increase than during 2009-
2010 with 8%. (The monthly economic report released for the month of July 2011 by the
Ministry of Finance.)

Figure 6: Reproduced from: OECD 2011
According to the article “India economy overview” (2011), India was joined in the group of
top 20 exporters of goods and the position of India is among top 10 services exporters in
2010. Moreover, goods exports of India increased by 31% in 2010, that is helped for
improving world ranking up two places to 20 from 22 in 2009. Furthermore, the
millionaires of India will rise from 286,000 to 694,000 during 2011-2020, and the growth
rate of 143%. According to the article “World Investment Prospects Survey 2009-2012' by
the United Nations Conference on Trade and Development (UNCTAD)”, “India become
the second place in global foreign direct investment in 2010 and remain among the top five
attractive destinations for international investors during 2009-2012”.
In addition, to illustrate for the

developed economic of India, the
exchange rate for currency of India is 1
USD = 46.04 INR (as on August 29,
2011).
Figure 7: Reproduced from: VMW-Sift 2010

2.5. Other Information

2.5.1. Media
According to PrinIndia (2011), television, print (magazines and newspaper),
internet and radio are the most popular forms of media in India.
Television:
With over 1,000 TV transmitters covering over
90% of the India population, India television
industry has become one of the largest
television markets in the world. (PrinIndia
2011).
Watching News on television is the activity that

Indian viewers spend on the most. With variety
of channels including International news,
television has reached over 60% of all people in
rural as well as urban.
Figure 8: Adapted from: PrinIndia 2011

According to PrinIndia 2011, Top Five News Channels includes Aaj Tak, Zee News,
NDTV India, IBN 7 and India TV. They are some vehicle that Hoa Phat can consider
for broadcasting the advertising on TV.
Top 5 Indian News Channels
Aaj Tak
24% Zee News
29%
NDTV India
IBN 7
16% India TV
9%
Others
9% 13%
Prints:
According to PrinIndia report, India is the second largest newspaper market in the
world which consumed appropriate 99 million newspaper copies in 2007. The
industry which has over 800 registered publications, published in 18 languages and
reached more than 55% of the population.
Print Media based on languages

10%
Vernacular
46%
Hindi
English
44%
 The Morning Bell (9.7mn readers) has the largest circulation amongst
regional languages

 Dainik Jagran (55.7mn readers) and Rajasthan Patrika (14mn readers)

are two largest read Hindi language newspapers.
 The Times of India (13.3mn readers) and Hindustan Times (6.3mn
readers) are two largest read English language newspapers.
The facts about Indian Print Media especially which newspapers are popular in
India based on languages are really helpful for Hoa Phat Company in deciding what
newspapers they will place the promoting information on.
Radio – AIR :
With 23 stations and 362 transmitters reach around
91.42% of the population, All India Radio (AIR) has
become the largest network of radio stations and
transmitters.
AIR not only serves for Domestic market but also
International markets. It covers 11 Indian as well as
16 foreign languages to others countries outside India.
By having a network of 232 broadcasting centers, it can cover 91.79% of the
geographic area and ability to serve 99.14% of the total Indian population.
With high ability in reaching audiences, radio can be seen as an effective way for Hoa
Phat Furniture’s Promoting campaign. (PrinIndia 2011)
Internet:
According to Saxena 2011, India places the third largest country in term of internet
users with appropriate 100 million of internet users which comprising 8.4% of the
population. As one of the fastest growing “internet nation”, the number of Indian
internet users is expected to growth to 237 million by 2015 accordingly to a BCG’s
report.

Internet Users growth in India ( 2000 - 2015)

250,000
200,000
Thousands of User
150,000
100,000
50,000
0
2000 2010 2015
Figure 11: Adapted from: Saxena 2011
According to Juxt 2009 ( cited in Prabhudesai 2011) , emailing and searching or

buying non-travel products are the most favorite internet activities of Indian users
with 95% and 76% respectively. With the changes of 32% from last years, searching
or buying non-travel products online is new purchasing habit of Indian people. With
the change, Hoa Phat Furniture can consider about operating an e-commerce when
entering Indian market. However, for being successful in e-commerce, Hoa Phat
Furniture need to “ focus on the website design to make it clean, fast and give the user
a great online experience by avoiding pop-ups to register when the user lands on the
site”. (Anandan 2011, cited in Saxena 2011). Anandan also suggests that the e-
commerce company need to offer “cash on delivery as a viable payment option” due
to unfamiliar in using credit cards of almost Indian people.
Figure 12: Reproduced from: Just 2009 (Cited in Prabhuseai)

Along with rapid growth in

internet users, there is an express
increasing in Facebook
Audience. (PrinIndia 2011).
Thanks to the fact, advertising
though Facebook can be one of
the channels that Hoa Phat need
to consider.
Figure 13: Reproduced from: PrinIndia 2011
2.5.2. Languages
There are various languages which are used in India. Hindi is the basic and the
national language which is extensively and widely use all over the country without
any conflict. Hindi can be seen as the mother tongue of almost one-third of Indian
people. Along with Hindi, Urdu is also used by a minor group of people. Besides that,
there are around 20 basic regional languages such as Bengali, Telugu, Marathi, and
Tamil which are also used by Indian.
English is the most prominent foreign language in India. Currently, it has been used
in various fields such as political, national and commercial communication due to
modernization and
globalization. However,
because of the low
literacy percentage
(only 65%), the most of
the languages that are
used in India are
limited. ( Makar 2008)
The fact about Indian

languages is really
useful for Hoa Phat
Furniture when entering
Figure 14: Mallikarjun 2004
to India market. To illustrate, as

Hindi and English are two popular spoken languages in India office, the company will
know what languages they should use in communication correctly. Also, they can
plan the strategy to overcome the communication barriers.
2.5.3. Transportation
According to the World Bank Group 2011, India’s transport system is large and
diverse with the combination of railways, roads, ports and aviation. There is a good
physical connectivity between the rural and urban area which plays an important role
in Indian economic growth.
Railways:
India own one of the largest
railways in the world which carries
around 17 million passengers and
2 million tons of freight a day in
year 2007 is playing a leading role
in shipping passengers and cargo
across India’s vast territory.
However, the system is dueling
with capacity constraint seriously.
Therefore, the freight
transportation costs are much
higher than other country. That is
the challenges for those company
Figure 15: Reproduced from: ProBharat.com 2011
such as Hoa Phat who decide to
use rail as the main transportation method for shipping products. (The World
Bank Group 2011).
Roads:
By carrying around 90 % of Indian passenger traffic and 65 % of its cargo,
roads are the lead mode of transportation in this country. Although India roads
system has a great density of highway network at 0.66 km of highway per km 2
of land comparing to China’s and Brazil’s, now a quarter of them are becoming
congested and poor surface quality. More than 33% of India’s villages cannot
access to all-weather roads. This problem is happening seriously in northern and

northeastern states. (The World Bank Group 2011)
Figure 16: Reproduced from: ProKerala.com 2011
Ports:
With the long coastline of over 7500 km, India has great capacity to develop the
ports system. With 12 major and 187 minor and intermediate ports, the ports are
supporting the country’s growing foreign trade in fuel as well as increasing
movement of containers.( The World Bank Group 2011).

Figure 17: Reproduced from: Embassy of India 2009
Aviation:
With 125 airports including 11 intentional airports, Indian airport have carried
around 96 million passengers and 1.5 million tons of cargo in year 2006-2007.
By having numerous international as well as domestic airports which are
scattered throughout the country, India is take advantages for speeding up the
export and import transaction with other countries in the world.

Figure 18: Prokerala.com 2011
3. Furniture Industry- Company Overview and Product Overview

3.1. Furniture Industry
3.1.1. Vietnam Furniture Industry:
The furniture industry of Vietnam has a long time ago in history and traditional which
is diversity and highly-skilled craftsmanship with quality products. Vietnam furniture
is a big market which attracted in the world such as USA, Europe and Asia.
Moreover, furniture of Vietnam still has a low cost but it is still a huge improvement
quality. Moreover, Vietnam has more than 2000 furniture manufactures with 15%
export-focused and its number still is increasing in the future (Vietnam Furniture
Industry 2011). According to the article “Vietnam furniture industry country report”,
indeed, Vietnam is one of the fastest developing suppliers of wood furniture with an
increase to exceed 250 percent this year based on the first six months. This lead it to
move in the top ten sources of U.S furniture imports this year. In addition, Vietnam
furniture companies are most of them has AutoCAD or another systems to do product
improvement to meet the demands of the customers. Moreover, Vietnam furniture has
ability to respond quickly to support the new design and exporting in successful.
Vietnam’s Furniture exporting
According to the article “Vietnam Furniture Industry” 2011, the statistic of export
furniture of the Service of Trade of Ho Chi Minh City got over 500million USD in
2003 and almost 1 billion USD in 2004. There is a significant increasing in value of
furniture exporting which has made the exporting furniture to be the major driver of
the industry taking out of more than 80% of the total output in 2010. Thanks to the
dramatically growth, Vietnam is becoming the largest furniture exporter in South East
Asia and being placed at 6th largest furniture exporter in the world. (CISL Milano
2011)
Moreover, According to the

article “Vietnam ASEAN’s
leading furniture exporter” 2011,
until now, the statistic of
exporting furniture is over 3.2
billion USD in the first nine
month of 2011; it is becoming
ASEAN’s leading furniture
exporter. And now, in the last
three month of the year, the
furniture of Vietnam is exported
turnover to cross 4 billion USD
(Vietnam’s wood furniture export
turnover to cross $4 billion, Figure 19: Reproduced from: CISL Milano 2011
2011).

In fact, Vietnam furniture products are exported to 120 countries around the world
such as major markets US with 38 percent, EU countries with 44 percent and Japan
with 12 percent (Vietnam’s wood furniture export turnover to cross $4 billion, 2011).
In specially, Vietnam wood product industry has about 2500 domestic company for
domestic consumption and 400 foreign investment companies distributing to roughly
50 percent of the total wood export turnover (Vietnam’s wood furniture export
turnover to cross $4 billion, 2011).
Vietnam furniture industry has some advantages such as the low cost of employees,
low cost of raw material, low price to customers. That is enhancing competitiveness
for Vietnam furniture. For instance, the labor in Vietnam has a skill and they can
fulfill orders for more sophisticated designs without too much increase in cost. So, it
leads to attract many investors who want to find new outsourcing besides China that
is also high labor cost and it is no longer attractive for investors. Moreover, all of
these lead to make more profit for company exporting the furniture because of low
cost, cheap labored. More things are the political social of Vietnam is stability and
location strongly enhances Vietnam position as a major furniture manufacturing
center. All of things are also effect to the exporting the furniture of Vietnam.
3.1.2. India Furniture Industry

According to Euromonitor International 2011, there is an increasing in furniture
and furnishings store by 7 % in current value terms in 2010 and over 374,000 in
value sales Rs million. Moreover, the demand for furniture is expect to growth by
26.4 % in 2015. This is the positive sign to show that there is a rise in demand for
furniture products in India. Therefore, CSIL Milano has ranked India as one of the
14th largest furniture markets in the world.

Value sales of Furniture in India from 2009-2015

500,000
450,000
400,000
350,000
300,000
Rs Million
250,000
200,000
150,000
100,000
50,000
0
2009 2010 2011 2012 2013 2014 2015
Figure 20: Adapted from: Euromonitor International 2011
The “spurt” in real estate activity as well as the rapidly increasing in the information
technology and services sectors has caused the massive growth in demand for
furniture in India. Moreover, by ranking 12th in the world, the Indian construction
industry is experiencing maximum growth which contributed to the huge demand for
furniture products. To be more specific, according to the CSIL Milano’s report 2007 (
cited in HKFA 2008), due to the developing in demand of outsourcing IT service,
‘over the next five years, 55 million m2 of extra office space needs to be completed’.
Moreover, due to the increasing in number of multinational company’s office, ‘it has
boosted the demand for high-end office furniture with prospective gains for both
Indian manufacturers and foreign players’.
Figure 21: Reproduced from: KPMG n.d

In India, the Furniture market are divided into two broad categories namely domestic
furniture which are used by household and commercial furniture which are used by
office and hospitality sectors. Different categories have different key success factors.
To illustrate, Domestic furniture will focus on differentiation of design and price,
while commercial furniture will be evaluated based on strong and reliable brands
(KPMG n.d)
The Indian furniture market can also be divided into three main segments namely
home, office and garden. With the increase in home décor, home furniture segments
takes 65% of the furniture market, the office segment and garden segment take 20%
and 15% respectively. (Euromonitor International 2011)
Furniture Market Segmentation

15%
Home Furniture
20% Office Furniture
Garden Furniture
65%
Figure 22: Adapted from: Euromonitor International 2011
India’s Furniture importing
With the huge Main furniture exporting countries to India

opportunity for getting
profit from Indian
furniture market, many
of foreign companies
from China, Malaysia,
Singapore, Italy and
German have entered
the potential market. Figure 23: Reproduced from: IMRB International 2009
European companies who
have entered the potential market first brought premium products along with them.
The later comers are from Asia countries especially South East Asian countries who
brought cheap products to the market.
The increasing in the number of companies entering India market has provided Indian
customers more choices. However, it increases the competitiveness among the
international and domestic companies. Therefore, when deciding to enter the market,
Hoa Phat needs to define the right target market and understand the direct competitors
in order to be successful in India.
3.2. Company
3.2.1. Company Profile
Company Name HOA PHAT FURNITURE JSC.,
 Office, Home and School Furniture Manufacture

Line of Business  Office, Home and School Furniture wholesaler and
retailer and exporter.
Business Model B2B and B2C
Exporting Market Lao, Cambodia, French, Russia, Panama, Dubai, Kuwait,

Japan and UK.
Head Office B4 Road, B section, phonoi A Industrial Park, Lac Hong-

Van Lam- Hung Yen Province
Representative No 34 Dai Co Viet street, Le Dai Hanh Ward., Hai Ba Trung

Office Dist., Ha Noi.
Tel: (0084)4-39782914 or (0084)4-39782917
Fax: (0084)4-39782918 or (0084)4-39782925
Email: [email protected] or [email protected]
Factory Nhu Quynh Industrial Park, Km 17, National Road No 5
 No 121 Nguyen Cuu Van Street, 17 Ward, Binh Thanh

Dist., Ho Chi Minh City.
Branches  Hoa Phat’s Building, No 171 Truong Chinh, Thanh Khe
Dist., Da Nang City

 No 08 Ngo Qquyen Street, Hai Phong City

 No 17 Mai Hac De Street, Vinh City
http://noithathoaphat.net/
Website
http://www.hoaphat.com.vn/eHome/eproduct_cat.aspx?
catid=87&compid=18
Hoa Phat Furniture join stock company was established in 1995 as a private company
with the primary named Son Thuy limited company which business in importing
furniture.
In 2001, Son Thuy joined and became the second member of Hoa Phat group and
then it was renamed as Hoa Phat Furniture JSC. Its main businesses are
manufacturing and trading home and office furniture.
After 16 years of development, “Hoa Phat is the owner 11 factories which cover the
area of more than 200,000m2 and has value of machinery, equipments of nearly VND
400 billion”. By constantly investing in new machinery and equipment, expanding
the factories as well as increasing the use of domestic raw materials to lower
production cost, improving product’s quality and creating more designs and different
product lines to meet the increasing demand of both local and foreign markets, Hoa
Phat takes the advantages to hold the 1 st position in manufacturing made-in-
Vietnam furniture and to be known in South East Asia market. In fact, Not only
focus on the domestic market, the company has also promoted export activities in
Laos, Cambodia and the countries in Middle East and has captured the heart of
consumers in these markets. The company also has exported the products to other
countries such as French, Russia, Panama, Dubai, Kuwait, Japan and UK. ( Hoa Phat
2010)
The year 2010 can be seen as a successful year of Hoa Phat Furniture JSC in term of
the developing the new products such as high class mesh chair and Royal industrial
wood which mark the change of its products from the medium lines to high class ones
received the positive respond from the market immediately.

With the success from year 2010, the company is continuing to introduce more new
product lines with many outstanding features in order to meet the domestic and
overseas market demand as well.
The company has received many certificates of honor; prestige awards for their
success business including Top 500 Vietnamese enterprises, High Quality
Vietnamese Goods 2010 and especially The Third Class Labor Medal by State
President.
3.2.2. Vision
 To achieve the growth targets set and confirm the 1st position of Hoa Phat
Furniture in Vietnam market.
 To improve product quality as well as enhance customer services to satisfy
customers’ demand.
 To continue to build the flexible distribution policy, pricing as well as product
policy to reach new customers.
 To expand storage capacity to deal with seasonal demand.
 To improve the agency system, remain the market share and promote some
products export in foreign market.
3.2.3. Mission Statement

“Hoa Phat Furniture JSC harmonizes three factors including human resources,
technology and potentiality to create perfect service and product, and the true value of
life”
3.2.4. Organization Structure

Based on the organization chart below, it can be seen as Hoa Phat Furniture Company
has a “high-hierarchy” structure which identifies clearly the responsibilities of each
department. Each General Manager will manage each department and be responsible
with the CEO. Although the structure reduces the complexity in the work load of
CEO, It requires the general manager must be highly qualified in order to solve
problem with the department by themselves effectively. In fact, all general managers
of Hoa Phat Furniture achieve the high level of education- Master degree and have
experience in the industry.
C.E.O
GM- Human GM- GM-Finance &

GM- Sales GM-Operation GM-Marketing
Resources Manufacturing Administration
Sales Manager Accounting

Materials & Products
HR Officer South Vietnam Distribution Manager
Purchasing
Ha Noi Manager Property Manager Manager
Manager
HR Officer Sales Manager

Purchasing Advertising
Middle Vietnam
Hai Phong Officers Domestic Accounting Manager
Distribution Officer
Supervisor Ha Noi IT Services
Manager
HR Officer Schedulers Promotion
Vinh Sales Manager Accounting Manager
North Vietnam International
office
Inventory Distribution
Hai Phong Network
Supervisor
HR Officer Officers
Services R&D
Da Nang Manager Manager
Accounting
office IT Supports
HR Officer Tan Quang Chair Steel Tube Fire Resistant Safe Vinh Manager
HCM Wooden Manufacturing Furniture Manufacturing
Manufacturing Manager Manufacturing Manager
Manager Manager Accounting
office IT Support
Da Nang Officers
Quality Control Quality Control Quality Control Quality Control

Manager Manager Manager Manager Accounting
office
HCM
Plan Manager Plan Manager Plan Manager Plan Manager
Industrial Engineer
Industrial Engineer Industrial Engineer Industrial Engineer
Maintenance Supervisor
Maintenance Supervisor Maintenance Supervisor Maintenance Supervisor
Assembling Manager
Assembling Manager Assembling Manager Assembling Manager
3.3. Products Overview
3.3.1. Product Description

Until now, Hoa Phat Furniture
offers twelve products lines
which meet the demand of all
three market segmentations
including home furniture,
office furniture and school
furniture. However, office
furniture is still the
dominance product of Hoa
Phat Furniture.
Figure 24: Reproduced from: Hoa Phat 2010
Home Furniture Wooden Beds

Bedroom Furniture
Hoa Phat offers the product
lines mainly for their
individual customers. The Wardrobes
category includes bedroom,
living room and dining room
furniture. All products are
designed simply with a small Living room Leather Sofas
Furniture
size and easy to assembling
by customers and affordable
price.
TV Consoles
For the product lines, Hoa
Phat just focuses on
producing the necessary
Dining room Wooden dining tables
product types for each room Furniture
to fulfill the customer’s
physiological needs rather
than décor products. The Steel Dining tables
kinds of products are suitable

for the middle class in
Vietnam who demand for
cheap products with high
Bar-chairs
quality and fit with their
small living space. Also,
They do not spend on décor
products. With the various Outdoor Furniture Tables
designs as well as texture
such as wood and steel, the
company provides more
choices for Vietnamese Chairs
customers. For low-middle
and middle class, steel
furniture can be their choice
due to cheaper prices, while
Beds
wooden furniture can be
chosen by middle-up class.
Office Furniture PU Wooden Office Conference tables

Furniture
This is the main product
lines which takes a large
amount of proposition of
Director tables & Cabinets
sales volume as well as
value. The main customers
that Hoa Phat Target for
the products line is Pedestal
business customers.
Therefore, the company
has developed various
Executive tables
types of products with

different price ranges and

designs. Thus, it allows Hoa
Phat can be the single Office Desks
supplier for the business
customers by providing all
types of needed furniture
Director Cabinets
products.
Thanks to the wide ranges of
products, the company
cannot only supply for small
Office chairs Leather Luxury Chair
organizations but also big
organization.
The companies are
continuing develop new
Meeting Chairs
products for the
segmentation and focus more
on premium products. Their
“New Trend” product line High back office Chairs
just has been released in
Vietnam and received a lot
of positive responses from
the market.
Medium back office Chairs
Guest or visitor chairs
Steel Table and Desk

Cabinet
Cupboards
Filling Cabinets
Locker
Mobile Compact Systems
Shelving Systems
Partition
Fire Resistant Safe

School Furniture Kindergarten

tables & chairs
School Furniture is the
products lines that company
Three level of products
offers for both individual
Desks Student Desks for home use
customers and business
customers.
In the product line, the
company has produced the
products mainly based on the Student Desk for school use
age of users including for
kindergarten, intermediate,
secondary and high school
aging. Therefore, the can
provides the suitable design Teacher Desk
and texture of different

needs. To illustrate, for
kindergarten, the products
are designed colorfully and Furniture for
Library and
appropriate high to help the function rooms
kids studying comfortably.
Library Book
Shelves
3.3.2. The 4 P’s
3.3.2.1. Product

Figure 25: Reproduced from: Kotler et al 2009
To be more specify, the three level of product will be analyzed in detail.

Core benefit: Hoa Phat office Furniture products make the work place become
more well-organized and convenient for officers to work on.
Actual Product:
- Brand name: once again, Hoa Phat Furniture brand which has experience
the furniture market for 16 years is one of the leading trademarks in
Vietnamese furniture industry. Its brand name has gone beyond Vietnam
and being known oversea. In Vietnam, Hoa Phat Furniture is branded itself
by the slogan “ Hoa Phat Furniture light up your space” which make
customers to feel that the products not only fulfill their physical needs of
having a comfortable place to work but also plays as an décor’ stuff to
their space based on the modern design.
- Quality level: Company provide a wide range of high quality product
which are checked under a quality management system of environmental
standards ISO 14001:2004 and ISO 9001:2000 by BVQI,UK. By that way,
the company has created the trust with their customer about the product.
This is reflected by the awards as Vietnamese high quality goods by
consumers’ choose, Vietnam Gold Star Award and numerous gold medals
at fairs and exhibitions not only at home but also abroad.

- Packaging: The products are easy to identify and distinguish from labels,
structure to product packaging, export product standardization. Especially,
with big export projects, goods labels, logo, product origin are paid more
attention. This expresses the profession of the Company and it is received
the customers’ support.
- Design: Company provides a wide range of the product designs, structure
and color which are suitable for each customer’s demand. Company also
offer the customize service for project customers. It means based on the
project’s requirement, Hoa Phat will provide the most suitable products for
the customers.
Augmented Product:
- After sales service: the company creates its own website which is written
in English and Vietnamese. Through the website, all contact detail
including phone number, email address of the company will be display on
the website. Therefore, the company can get the feedback from customers
to improve the products as well as the service. Moreover, the company can
solve the problem more quickly and efficiently when customer complains.
By that way, the company can maintain and build the good relationship
with the customers.
- Warranty: for all furniture products, the company offers the free warranty
within 12 months. Within 24 hours from receiving requirement for
repairing the stuffs from customers, the staff will be there to fix all
problems. All fees for repairing will be free if the problem comes from the
manufacturing. Otherwise, customers have to pay for that but the company
will not including the labor cost.
- Installation: for all products, the company will provide the instruction
guide so that the customer can install the products by themselves easily.
The care and maintenance guide also is included for each type of products.
Therefore, the customers can use the products for longer time. Moreover,
for some products which are complicated in installing such as tables or
cabinets, the company will do the installing job for free.

3.3.2.2. Price
Value-based pricing is the price strategy that Hoa Phat Furniture is applying in
Vietnam market. Due to high quality of products which are continuously being
innovated, extensive distribution system throughout Vietnam and excellent after
sales service with express delivery and warranty policy, Hoa Phat Furniture
charges higher price compare with other brands. As a result, they can
generate more profit due to the pricing strategy.
However, applying some other price strategy during some special periods will
help company attract more customers.
Product bundle pricing

In order to encourage people to purchase various line of product, the company
will combine different products and offer it at a reduced price. To illustrate, it
can be a combination of table and chairs at the lower price compare to buy
individually.
Promotional pricing
In order to create buying excitement and urgency during some special events,
the company will set the price below list price and even below cost
3.3.2.3. Place
With a spreading network of distributors in all 64 cities and province of
Vietnam, Hoa Phat Furniture JSC advantages to affirm the leading brand of
Vietnamese furniture industry. With the appearance of Hoa Phat products
throughout Vietnam, Vietnamese consumers are more familiar with Hoa Phat
Brand. In Vietnam Hoa Phat Furniture is using a ‘hybrid marketing channel’
which is using two or more marketing channels to reach one or more customer
segments.

Figure 26: Reproduced from: Kotler et al 2008
When entering India market also apply the hybrid marketing channel to
distribute the products to customers. To illustrate,
Producer  Consumer: customers can order the products online. They can
pay on cash after delivery or pay online by credit card.
Producer  Retailers  Consumer: Hoa Phat has their own retail stores in
64 cities and provinces through Vietnam, therefore, customers can come
directly to the store for purchasing.
Producer Distributors  Dealers  Business: Hoa Phat also sign
contracts with its dealers who will help them find the business customers.
Producer  Business: for business customers, the sales people of the
company will directly contract with the customer segment. The reason is
the business orders are mostly high value with huge quantity as well as
various requirement for the products. Therefore, sales people can learn
about customer problems and adjust the marketing offer and presentation
accordingly to meet the special needs of each customer.

Wood Suppliers PU Paint Supplier Metal Supplier Steel Supplier Leather Suppliers
Tân Quang Wooden Steel Tube Furniture Fire Resistant Safe Chair Manufacture
Manufacture Manufacture Manufacture
Main Warehouse
(Thanh Tri, Ha Noi)
Warehouse Warehouse Warehouse

(Nghe An Province) (Hai Phong Port) (Vinh City)
Retailers Retailers
Warehouse Warehouse
(Ho Chi Minh) ( Da Nang City)
Retailers Retailers
3.3.2.4. Promotion
An effective marketing mix has brought success for Hoa Phat Furniture JSC in
spreading out the brand’ image and well as equity throughout Vietnam.
Consequently, their sales volume has increased rapidly. Especially as the
shopping products, customer will carefully compare the products on suitability,
brand, quality, price, and style before making any purchasing decision.
Therefore, the available of all products information as well as a good brand
reputation are required to compete with other brands.
3.3.2.4.1. Advertising
Television: with the strong financial support, Hoa Phat has employed
television to broadcast its advertising which consider costly but
effectively in reaching the customers’ attention. Its advertisings have
been broadcasted in VTV3 and VTV1 which are the main Vietnamese
national channels during the prime time which is after the news. As a
result, they can reach customers’ attention throughout Vietnam. Some
local channels such as HTV3. HTV7 which the target audiences are
mainly Saigonese and HN1 and HN2 which the target audiences are
mainly Hanoian.
Figure 27: Adapted from Youtube

Print: it is easily to see the advertising

of Hoa Phat Furniture placing in the
largest reader national newspapers
such as Tuoi Tre, Thanh Nien and
Nguoi Lao Dong.
Internet: with more than 27% of
population is internet user, internet has
become the effective tools for advertising. The company has established
its own website in both Vietnamese and English. Through the
company’s website, all information about products as well as promotion
information such as discount will be displayed. It becomes the main
source for customers who want to search about the company.
The company also places its advertising on other websites as well as
blogs where customers can get the customers’ information as well as
express their opinion about the company’s products. It is one of an
effective way for the “word- of-mouth” effect.
Radio: Hoa Phat Company also places its advertising on Radio such as
VOV channel.
Overall, with the strong financial capacity, all advertising tools have been
utilized to help the company’s image come closer with their target
customers.
3.3.2.4.2. Sales Promotion

In order to encourage
customers in
purchasing the products
during some special
events such as Luna
New Years and

Independent Day (2nd September), Hoa Phat has offered some special
discount for customers.
3.3.2.4.3. Direct Marketing

Based on the customers’ information that the company get through the retail
system and the company’s website, when having any new information about
the products or sales promotion campaign, the company will send those
information to those customers directly. By this way, the company not only
gets response from the customers immediately, but also develops long-term
customer relationships.
3.3.2.4.4. Personal Selling

In Vietnam, The Company is using the method for their business customers
who have higher demand on products’ quantity, design and especially price.
Therefore, having a particular sales person to work with the type of
customers is extremely important to get the big contract. By having 4
branches in Vinh City, Hai Phong City, Da Nang City and Ho Chi Minh
City and representation office in Ha Noi, Hoa Phat is using ‘Territorial
sales force structure’ which means “each salesperson is assigned an
exclusive geographic area and sells the company’s full line of products and
services to all customers in that territory”. (Kotler et al 2009)It helps the
company save sales expense such as lower travel expense and help the
company improve the relationship with the customers and negotiate
effectively.
3.3.2.4.5. Public Relations

In order to build the good relations with the publicity, the company has also
employed various tools of public relations.
As being a young population country, Vietnamese Government is focusing

on investing more on education to have a high qualified employee force
helping on develop the country’s economy. Hoa Phat Furniture also share
their capacity to support that idea by sponsoring their furniture to upgrade
the school’s equipments to help the future generation have the best learning
environment and develop their skills. Moreover, they also share their
inspiration of helping the disadvantage people by sponsoring for “Vu Dieu
Tu Trai Tim” event which its purpose is helping dioxin victims. Thanks to
the meaningful activities, the good company’s image has been built.
In brief, for business customer, Hoa Phat is applying Pull strategy with mean they
send their sales person to the business customers for marketing and generating
sales. In contrast, Push Strategy is being applied for individually customer.
Through advertising, giving out discount, the company can get customers come to
their retail system and make purchasing.
4. International Business Environment

4.1. Business Practices
4.1.1. Hofstede’s 5 Dimensions

Hofstede's 5 Dimension of VietNam-India

80
70
60
50 India
40 VietNam
30
20
10
0
PDI IDV MAS UAI LTO
Figure 28: Adapted from: Geert-hofstede n.d
4.1.1.1. Power Distance Index (PDI)

PDI refers to the degree of in equality which can be accepted in the society.
The countries like India where the PDI is high, society accepts an unequal
distribution of power. Viet Nam is score quietly similar to Indian. This means
that the roles of boss, manager in these two countries are very crucial. Employee
listens to their boss decision and respects them completely. Because of the High
Power Distance, when Hoa Phat has a meeting with a manager of India
Company, Hoa Phat should send the company manager to attend the meeting.
India cares about positions. Hoa Phat cannot send staffs which low position in
the company to talk with manager of India Company.
4.1.1.2. Individualism
Individualism is the degree to which individuals are inte-grated into group. India
scores 48 which is higher than Viet Nam. This shows that Indian people care
themselves rather than other people. On the other hand, Vietnam shows only 20
which very low. This means that Vietnamese people are cohesive in group. In
workplace, Vietnamese employees offend give decisions back to their bosses,
therefore there is opposite between Viet Nam and India workplace. That is the
points which Vietnamese people need to consider carefully when entering India
market

4.1.1.3. Masculinity
Masculinity means the distribution of roles between the males and females
which is another problem for any society. (Kohl 2007)India show a high level of
masculinity which means that there is a high level of male dominance and less
gender equality in MAS workplace. Vietnam scores a little bit low compare to
India. However, this does not show much difference between Viet Nam and
India.
4.1.1.4. Uncertainty Avoidance Index-UAI

UAI refers to unstructured situation and unplanned events. Unstructured
situations are unknown and different from usual. India has a high score in UAI
compared to Viet Nam, people in India work well within a structured
environment, under strict rules and laws. In a high UAI workplace, employee
performs their best and follows standards. (Kohl 2007)It is difficult for Vietnam
to enter India market due to strict laws, rules and guidelines.
4.1.1.5. Long-Term Orientation-LTO

LTO refer to the degree to which the society upholds traditional values. India is
high in this dimension. This shoes that in LTO workplace, long-term
commitments and hard work as a plan for future rewards. (Kohl
2007)Moreover, India have a high LTO which means they care more about
long-term contract tend to value dedication, hard work and thrift, and to focus
on the future. To illustrate, when Hoa Phat works with India first contract, this
is a contract to build relationship and then India will look for other long term
contract later.
4.1.2. Dos and Don’ts
Category Dos Don’ts

Business Attire  Men should wear a light jacket  Wear tight clothes or
with a shirt and pants.
clothes that may expose
 Women should wear slacks and
a jacket or long dresses skin.
 Suits can be fine for both men

and women also.
Greeting  Bow your head, fold your hands  Call someone by their first
and say “Namaste” when name.
greeting.  Shake hands with or to
 Greet people with big smile. touch a woman.
 In business circles, address  Shake hands unless they
each other as Mr., Mrs., Dr., or extend their hand first.
by their Indian equivalents.  Translate business card into
 Use titles wherever possible Hindi
such as “Professor” or
“Doctor”.
 Exchange business card are
exchanged after the initial
handshake and greeting.
 Greet the most senior person
first (age, position).
 Say good-bye to everyone
individually.
Table Manner  The eldest person in the host  Sit down for a meal until
family sits first and starts the told by the host where to
meal. sit.
 Wash hands properly before  Chat unnecessarily with the
starting. people around you.
 Always use your right hand to  Offer anyone food from
eat. your thali (plate).
 Use spoon for food such as  Leave the table until others
soups. have finished or the host
 Leave a small amount of food requests you.
on plate to show you are  Complain about food.
satisfied.  Refuse any food and drink
 Be aware of some common offered to you during
dietary restrictions in India: business meeting.
- Hindus and Sikhs do not eat  Eat food or pass objectives
beef. Many of Hindus are with your left hand.
vegetarians.
- Muslims do not eat pork

and drink alcohol.
Gift Giving  Wrap gifts in green, yellow or  Give frangipani or white

red which are considered flowers.
luckily.  Give a present made of
 Receipt a gift with right hand leather to Hindus.
only.  Give a present make of
 Take some chocolate or flowers pigskin or alcoholic
(A bouquet of roses is the safest beverage to Muslims.
choice across the country), or  Wrap gift in white or black
children’ toys or book when be color.
invited to Indian homes for  Open you gift immediately
dinner. after receiving it.
 Give a gift which is  Give large and expensive
representative of your or a gifts, unless you are very
culture is appreciated. close to the person
Business Meeting  Be on time
 Be open and flexible in
negotiating
 Bring s mall gift from home
country
 Try to go through a third party
introduction. It will give some
credibility for the introduced
person because Indian like to
have relationships with people
who going to do business with
them.
 Make appointments by letter
one or two months in advance.
 The best time for a meeting is
late morning or early afternoon.
 Make sure to reconfirm the
meeting a week before and call
again that morning.
 Engage in some get –to-know
you chit chat because Indians
like to have a social relationship
before doing business
 Send agendas or other
document in advance
 Book a follow-up meeting to
discuss the previous meeting
and talk about the next steps.

Source: Airtrade International (2006-2011), Boike et al n.d

Business etiquettes are one of the problems when the business enters to oversee market.
Therefore, Hoa Phat needs to consider some certain business etiquettes when the company
enters to India’s market. Firstly, in business meeting, it is important to make appointment by
letter in one or two month in advance. Moreover, the agendas as well as other document also
send in advance. Moreover, try to be more open and flexible in negotiating. Secondly, when
Hoa Phat gives gifts to India business partners, do not give a present make of leather to Hindus
or wrap gift in white or black colors because Black and White color is unlucky colors for
Indians. Thirdly, in the table manner, you should not refuse any food and drink offered to
you during business meeting or chat unnecessarily with people around you. Fourthly, it is not
good to call someone by their first name. Finally, Men should wear a light jacket with a shirt
and pants; women should wear slacks and a jacket or long dresses. In short, it is crucial to
understand India business etiquettes clearly in order to help Hoa Phat work smoothly with
India business partners.
4.2. Social Conditions

India is a 5th largest country in term of purchasing power parity. Average income is
$3500 per capita and they are the second large labor force in the world. English is a
secondary official language and play a crucial role in India society. As a part of
globalization, India developed strongly in IT infrastructure and been the outsource
place for accounting work and supporting Call – center for the rest of the world.
The city of Bangalore is a model example of IT infrastructure development in India. This
has lead to the increase of e-commerce, online purchasing and e – procurement before
making a decision to buy a product (EuroMonitor, 2010).
Recover rapidly after the financial crises, with the advantages of labor cost,
government policies towards foreign companies, India is a potential market.
However, the GDP per capita of India people is $3500 (CIA – World Fact book) and the
diversity between rural and urban areas, different ethnic, language and religions also
affects consumer lifestyle and their behavior. Generally, international products were
considerate luxurious and only for upper income.

Another factor to consider when planning entering this market is education. The table
below indicates the recent literacy rate of India:
Figure 29: Reproduced from: Census of India 2011
Although there is some improvement, only 74% of population can read and write,
which can cause some difficulties when Hoa Phat looking for local skilled employees.
Urban areas and male have better education. Furthermore, it also changes the way how
marketing campaign approach to consumer. In general, the cost to set up and operates
business in India may increase more than expected.
Moreover, between India and her neighbor countries exists various conflict along the
border line. The hostage situation with Pakistan and opposite toward Chinese are some
elements that can cause this region to become unstable, in term of politic and peace. For
example, in 2008 there was an attack of terrorists from Pakistan in Mumbai, caused more
than 101 people dead (The Guardian, 2008). In long term, Hoa Phat must take cautious
to avoid or, at least, minimize bad effects from terrorism threat.
4.3. Economic Conditions

According to EconomyWatch (2010), India has become one of the fastest growing
economies in the world. India is offering numerous economic advantages to “its nationals
as well as foreign investors”. Thanks to the developing of information technology as well
as outsourcing business, India’s economic has boomed as an “Asian economic
powerhouse”. Currently, the Indian economic conditions are more favorable for a wider
cross section of people. For more understanding about Indian economic conditions,
several aspects need to be analyzed.
Domestic expenditure:
According to the article “Education – a missing pie in VC/PE action” 2008, the

percentages of food and grocery is the biggest items of household expenditure in
India with 24.5%. After that is education with 8.9% in the percentages of household
expenditure. That is a good point for Hoa Phat Company to sell the office furniture
for many schools in India. Moreover, Hoa Phat should consider specific product
category for the demand of expenditure in India.
Figure 30: Adapted from CLSA Asia-Pacific Markets n.d
Infrastructure:
According to CIA, India has a third biggest road network in the world, it cover about
3.4 million kilometers and getting 65% of freight and 80% of customers in traffic.
India has two-thirds people in urban areas, so they have 806.1 million telephone
subscribers and they have 10.29 million broadband lines in 2010. Moreover, the
public sector produces all of the electricity in India. So, people want to buy their own
power generators to sure that can get electricity supply because power outages are
common. According to the article “Infrastructure Investment in India: Year 2011”
2011, the spending of infrastructure projects increase 23% with targeting from $1.5
trillion to $2.14 trillion in next ten years and the increasing government spending on
infrastructure that will rise the economy further.
Moreover, according to Yeoh Geok Hoon 2011, the core infrastructure industries of
India still growth without caring about climate. The combine of coal, crude oil,
natural gas, refinery products, fertilizers, steel, cement and electricity get 37.9% over
the industrial production index.
Figure 31: Preproduced from Hoon 2011
Regulation/Legal issue:
According to Agarwal 2011, India get higher rank than the South-Asian rank with
117, that is prove that India the business environment can come to ease of doing
business.

Figure 32: Reproduced from Agarwal 2011
Figure 33: Reproduced from Agarwal 2011
Indian has a fairly rank well for access to capital and such as evident from Getting
Credit 40, Protecting Investors 46. That illustrated that favorable things are the
policies governing access to capital and other regulatory policies.

4.4. Competitors Analysis

Along with the increasing of office space in India, the numbers of competitors in office
furniture industry are increasing rapidly. There will be an addition of 50 million square
feet from 2011 to 2012, as mention in the Hindu business online. According to
Worldwide Industry report of Barnes Reports, from 2011 to 2012 the numbers of firm
enter the industry increase to 604 firms. Recently, there was an International India
Furniture Fair with the participation of 93 companies, mostly from Asia and EU,
especially with 2 exhibitors from Vietnam. In general, India is full of opportunities and
threats for international players.
Indian furniture industry is divided into two broad categories namely unorganized and
organized sectors. While the market share of unorganized sectors takes around 90%, that
of organized ones takes only 10% remaining. Within the organized sectors, the main
players are Godrej and Boyce (25%), Style Spa (5%) and Durian (3%)
4.4.1. Direct Competitors
Brand Products Description (IMRP International

2009)
Godrej & Boyce Interior  Home interior According to Furniture Stores India
 Office furniture report, Godrej and Boyce is a leading
 Office interiorfirm in term of stores with 4% of the
solution whole market.
Established from 1897, they provide
solution for workstation and office
furniture in high price segmentation.
Durian Industries  Office furniture One of top five companies in term of
 Modular and value in 2010.
Seating Solution Established in 1981 and they focus in
woody furniture and office solution.
Nilkamal  Office seating Joined the Furniture industry since

solution 1990 until now, their weakness is
 Corner Cabinet they do not focus in Office Furniture
as other big company, but still having
capability to offer good quality

products.
Style Spa  Home Furniture They are a branch of S.K.Poddar
 Limited range of group. Style Spa developed their
Office Furniture private outlets in more than 65 cities
of India. Style Spa concentrates on
the Home décor sector and
distribution network.
Price:
Place:
Since customers want to look up for a nearest stores or showrooms, having dealers in
each city is a good strategy. As stated on Godrej website, they have dealers located in all
major cities of India. Durian Industries also have their show rooms placed in 4 main
regions: the West, the North, the East and the South. The map below is a brief summary
of all stores and show rooms located in large cities of India. (This is only about direct
competitors mentions above, not includes thousand of retailer and independent furniture
manufacturers in every states of India)

Promotion:
Sale Promotion is a crucial tool to attract customers. Discount, Social responsibility,

coupons and gift already used widely by our rivals. Here are some examples of how our
competitor advertise and stimulate their sales:
 Durian Industries

 Godrej & Boyce Interior
Especially, Godrej & Boyce Interior introduces their eco-friendly products to the
market, showing their social responsibility. In strategic term, it is an advantage
since everyone is more and more aware about the environment.
 Style Spa

In general, most seeable sale promotions are focused on home décor and business
to consumer market.
4.4.2. Indirect Competitors

Beside these lead market companies above, there is more than a thousand of small
size firms spread out among India. Because of the low awareness within the
customers and cheaper price that they offer, the customers only purchase from the
nearest outlet.
According to Euro Monitor, there are no foreign competitors’ holds a

remarkable market share. It is because large local firms already built up their
reputation on the market and the dominance of small local manufacturers. Their
flexible size and competitive price compare to other big companies is a huge
advantage. However, the low awareness of customer about branded product creates an
opportunity for any company with an effective marketing campaign that can gain the
attention of Indian people. So there are still more player are going to enter the market
such as:
Western Furniture Manufacturers: according to My Digital FC, Herman Miller

plans to open their facility in India up to 10 show room stores. During the India
International Furniture Fair 2011 there was various numbers of exhibitors from the
US, Uk, Spain and Italy. They have the advantages in innovating design and high
quality products and aim to high end consumers.
Some notable competitors are:
IKEA: Sweden Ready-to-Assemble Furniture Company, rank as the

largest furniture retailer in the world (Reuter)
Herman Miller: an Office equipment manufacturer

in USA. They are famous by their unique and influent the design of modern industrial
design.
Asian Furniture Manufacturers: since there were no foreign company holds a

significant size of the market, there are still rooms for the expedition from Asia. They
are likely to concentrate on the home furnishing segmentation but the growth of office
space and hospitality industry is also an attractive segment that they cannot ignore.
4.5. SWOT Analysis
Strength Weakness
 Low manufacturing cost => more  Have no experience about Indian customers’
competitive price. behaviors.
 Plenty of high quality wood supply  High cost to establish Vietnamese personals

sources from Vietnam Malaysia, oversea. (Training, translation, living fees).

Cambodia, Laos and Indonesia. =>  Non-awareness by Indian customers.
can produce high quality product.  Weak in relation with the India Government
 A well-known furniture Brand in and other organization while having a close
Vietnamese market. relationship with them is an important key to
 Has experience in exporting activity success in the market.
 Ability to generate funds from share  Lack of logistics and supply chain in
market. (Listed on Ho Chi Minh transportation and distribution. As India is a
Stock Exchange as HPG). new market to Hoa Phat, the company still has
not set up a supply chain and distribution
system with local companies. This would take
time to find suitable partners in logistics area.
Opportunities Threats
 Large market with the increasing of  High competitive market
demand in office furniture.  More foreign companies are going to enter the
 No dominance firm. market despite the dominance of small local
 Fragmented market because of low firms.
awareness so an effective marketing  Far distance may increase logistics costs
plan can make large impacts the  High bureaucracy government and corruption

market. may slows the business (however this can be

 Large amount of rivals focus on the turned into an opportunity since Vietnamese
Home interior, office segment is company are familiar with corruption situation
where we should focus on. in Vietnam)
 Government policies support foreign  High inflation (12% in 2010, CIA the World
companies to invest in India. Fact Book)
 English speaking population.  In India, time cannot be controlled and is not
There would be no barriers in absolute. It states an unprofessional working
communication between Hoa Phat style and takes time for a smooth business
and its partners, customers and working cycle.
local staff. - In 2010, the economy  Far distance affect transportation (more difficult
rebounded robustly from the to maintain woody furniture => increase cost)
global financial crisis and GDP  Local competitors already had high network of
grows by 8.5% is a sight of high distribution.
purchase power and potential  In the future other company will improve their
market. marketing ability, so the market will be more
 India is a major producer of iron, fierce and competitive.
bauxite and limestone  Conflict between India and Pakistan create
 Second largest labor force in the unstable situation to general market.
world.
Generally, India is a big and potential market where has a huge demand for office
furniture that provides a good opportunity for Hoa Phat Furniture JSC to enter in this market.
However, it is also a very competitive market with over 600 competitors. In order to compete
with those rival firms, Hoa Phat will focus on the office furniture sector and target the middle
and upper income customers. Company will apply both B2B and B2C strategies in its
marketing plan to reach the target customer.
For the B2B, Hoa Phat will provide the customization to customer such as real estate
investors, construction contractor, décor and architect companies in order to compete with

others office furniture suppliers. That types of customer is price sensitive, therefore, having
a flexible pricing strategy will help the company compete with other competitors.
For the B2C, Hoa Phat will focus on providing premium safe and computer table and chairs
to Indian customers Hoa Phat’s safe was produced in Vietnam so that its price is cheaper
than the price of other suppliers in India. This country has a huge amount young population
and very developed IT industry therefore Indian will has high demand for computer table
and chair.
India is a very big country that will cause many difficulties for the logistics system such as
warehouse system, transportation system of Hoa Phat when company arrives to this market. To
solve that problem Hoa Phat decided to establish its business only in three cities in India those
are New Delhi, Mumbai and Bangalore where has the good infrastructure to support for the
logistics of the company. For the warehousing, company will rent warehouse in the sub-
urban as each city and apply the vendor management inventory strategy and use the third
party logistics for transportation and delivery.
The legal and procedure to establish a business in India is quite complex and take long time,
moreover India government is quite bureaucratic and corrupted. Thus, Hoa Phat is a foreign
company with the limited knowledge about the legal and regulation in this country therefore
company with hire a third party such as a consulting company to help company due with
those issues.
Rival firms have a wide distribution network in India is also a big issue to Hoa Phat. For dealing
with this issue, company will establish its distribution center in three big cities in India as
mentioned above are New Delhi, Mumbai and Bangalore and then company will find more
partners to become the retailers and vendors of the company. Thus, company can cooperate with
the retail system in India to establish its distribution network.
India furniture market has a big amount of foreign companies which have entered to this market
a long time and are the direct competitors of Hoa Phat. To compete with those firms, Hoa Phat
will use its price competitive advantage. Its products are produced in Vietnam with a lower
production cost, labor cost therefore its price will cheaper.

5. Global Competing Strategy

5.1. Marketing Objectives
For the First Year:
- Increase customers’ awareness about the Hoa Phat brand by 10% at the end
of first years.
- Achieve 2% market share in the Indian office furniture industry.
For the Next 3 Year:
- Increase loyal customers by 15% in 3 years. To achieve this objective Hoa
Phat needs to do some strategies. Firstly, the company send birthday card
along with small gift to current customers on their birthday occasion. In
addition, when Hoa Phat enters to India market, the company will design a
website and there is a forum will be created on that website so that the
customers can discuss or give their feedback through that forum. Besides, the
company can also update and share the information about new products,
promotion programs and company activities to the customers. Another way
to gain customer loyal is sending thank you letter to customer when they buy
company’s products.
- Reducing marketing cost by 20% in the next 3 years. Hoa Phat will use
online advertising such as: Yahoo, Facebook, Twitter as a good tool to
replace traditional advertisement. Moreover, the company run banner on
various India websites for people to know about furniture products and
remind the current customers about Hoa Phat product. Furthermore, the
company attend social fair to advertise products. This is a good opportunities
for the company to meet customers directly so the company can introduce
and explain the products to customers easily. By doing that Hoa Phat can
reduce marketing cost and increase the company’s revenue.
- Increase sale revenue by 15% in the next three year. In order to do that,
the company needs to offer diversification products which meet customers’
demand. In addition, the company starts to sell online for some kinds of
products because there is a huge market there. Besides, the company should
offer various payment methods such as: cash, credit card or debit card. The

customers feel convenient and flexible in payment so that will choose to buy
more Hoa Phat products. Finally, the company should increase sale
productivity is one of the way to increase sales revenue.
- Increase customer service and customer satisfaction. Clients will not
spend money with service treat them poorly. It is important for Hoa Phat to
know what customers experiencing by looking at their feedback as an
opportunity to improve customer service. When the company receives
complaint from the customers, the customer service must find the way to
solve the problem quickly and effectively. Customer service plays an
important role in any because the department directly communicates with the
customers so the staff need to be well training in order to satisfy the customer
need. Besides, the company should update new product information along
with discount program such as: Happy Christmas 10% or Golden hour 5%.
- Improve employee development. Human Recourses is one of the most
important part in the company, the company should have a training program
for their staff to increase their soft skills and ability to adapt new business
environments in India. Later, annually training program will offer to staffs.
The staff will be trained on English communication skill, computer skill as
the company start to sell some products online. Also, training cost about
sales, customers service..etc.
5.2. Entry Models

Exporting
According to Mahoney (2001), exporting is the selling of goods or services supplied

from one’s own country for use in other countries. He also thinks it is the simplest
mode of internationalizing a domestic business and is the most common form of
international business activity. As India government’s policy allows foreign companies
to set up its branch offices in India for its exports, Hoa Phat can set up its branch office
in Mumbai to carry out its exporting. The firm can initially contract with local logistics
firms for import documentation, distribution, warehousing and delivery services. Thus,
time for products to arrive the end-use customers is shortened and the firm’s exporting
is smoother.
However, Hoa Phat should consider the followings on a benefits/costs basis when
approaching India through exporting mode.
Advantages Disadvantages ( Hill 2009)

- Substantial costs of establishing - Exporting is not practical when there
manufacturing operations in foreign are other lower cost manufacturers in
country are avoided. the country that the exporter is
- Exporting incurs less financial aiming to sell its products.
exposure than other entry modes. The - Transportation cost may be too high
required dollar amount to the firm and make exporting become more
exporting is the value of the goods or expensive, especially for bulk
services of the transaction and start- products.
up costs. - Exporting firms also have to
- Exporting allows the firm to enter consider trade barriers such as
into the foreign market gradually and import tariff or quotas. Whether
then have chance to access local products cost at the original country
conditions, gain experience and is lower than that in the host country,
adjust its products to satisfy needs of import tax can make the cost much
the host country demand. higher than local substitute products.
Besides that, government can also
limit imports by quotas, thus the firm
may find it dissatisfied when it can
reach its desirable exporting level.
Joint venture
According to Mahoney (2001), joint ventures are created when two or more firms agree
to work together and create a jointly owned but separate firm to promote their mutual
interests. In other words, Hill (2005) clarifies that in joint ventures, a local firm will
provide its knowledge of market, business culture, government regulations, local
manufacturing facilities and trained workforce. Concurrently, its foreign partner
contributes financial equity, technologies, and management expertise to the host
country market. In their book, Delios and Beamish (2004) suggest that joint venture is a
kind of equity alliance in which the foreign firm contributes its technology competence,
meanwhile the local partner share its knowledge of the market. According to Infodrive
India, an Indian leading consulting firm on exporting and importing of wide range
industries, Durian Furniture, a top leading firm in furniture industry that specializes in

home and office furniture is an appropriate for Hoa Phat Furniture to establish joint
venture. With Durian’s experiences in the local market, customer trend, and a wide
distribution channel in Mumbai, time and costs for Hoa Phat to reach Mumbai and
India market are eliminated sharply. In addition, risks of collapse due to poor
knowledge of marketing expertise, customer and competitor analysis can be avoided.
Especially, Durian did practice a joint venture with a Canadian company to established
veneer edge bending plant at Palghar, Maharashtra in 2008. Thus, Durian is considered
as a credible partner for a joint venture of Hoa Phat.
There are also pros and cons for joint venture as the followings by Hill 2009.
Advantages Disadvantages
- A firm can benefit from local - Transferring technologies belonged to
partner’s knowledge of host country the firm that enters into the country to
competitive conditions, marketing its local partners can lead to leaking
expertise, political, economic, and out of business confidential. The
social situations. foreign may lose its competitive
- When costs of establishing a foreign advantages, especially, once the local
business for a firm are high and there partner may later leave the joint
are significant risks that the firm venture and compete against the
might suffer many hardships, in joint foreign company in the same
venture, both partners will share industry.
those. - Joint ventures may not give the
- It also helps the foreign firm reduce foreign firm a tight control over its
adverse government interference and subsidiaries to engage in coordinated
global attacks.
risk of being subject to - Thirdly, shared ownership and
nationalization. Especially, in India, management can lead to conflicts and
whether the government has made battles for control over financial
issues, strategies and objectives
many deregulations to offer a wide
changing.
range of entry modes available to - Profits are shared between partners.
foreign companies, joint venture is
still more preferred.
Wholly owned subsidiaries
In his book, Hill (2005) defines it is when the firm owns the entire stock equity of its
abroad subsidiaries. The firm now can set up its operation in the host country or acquire

a local firm in the same industry to develop its production and business in that country.
As a firm whose financial capacity is stable and competitive in Vietnam furniture
market, it is possible for Hoa Phat Furniture to apply wholly owned subsidiaries when
conducting business in India. The firm can establish new manufacturing plants,
representative offices and hire local labors for its operation there. Innovative
technologies which the firm is practicing in Vietnam can be transferred to India to make
the company distant to local manufacturers. However, Hoa Phat Furniture has to pay
attention to Indian households’ trend and corporations’ taste in furniture consuming.
Design, marketing methods, distribution channel, delivery and documentation are also
factors required for the firm. To deal with those issues, Hoa Phat as planned as the
followings:
1. To explore the market and customer’s trend, Hoa Phat will sign a contract with
Master Mind Network, one of the biggest Indian consultancy firms specializing in
providing market research services to its foreign clients. Due to the corporation,
Hoa Phat will have a market research conducted by its experienced partner.
Obviously, the company will be more familiar with India furniture market and
increase its accessibility to the high demand of furniture consumption in the
nation.
2. To acquire the knowledge about Indian business culture and Indian employment
style, Hoa Phat will corporate with New Star Consulting, a leading recruitment
company in India for the latest 3 consecutive years. New Star Consulting will
suggest Hoa Phat recruitment solutions or become the recruitment representative
of Hoa Phat in Mumbai the to obtain the most skilled labors in furniture design
and manufacturing. Besides that, office and sales staff will be hired to satisfy the
extension of brand offices of Hoa Phat in Mumbai.
3. For distribution channel and delivery, OM Logistics, one of the top 10 logistics
company in India in 2011, according to BestIndiasities.com, with its wide
distribution channel in the whole India and numerous transport means, will
smoothen Hoa Phat Furniture’s delivery to its customers within Mumbai and other
major cities.

4. To deal with documentation and paperwork in setting up its business through

wholly owned subsidiary, Seth Associates legal consulting firm will be the partner
of Hoa Phat Furniture. This helps Hoa Phat cope with government policies, legal
requirements, as well as placement for its business in Mumbai.
Rather than that, as a characteristic of wholly owned subsidiaries, Hoa Phat Furniture
can acquire a local furniture firm whose product mix is partly or entirely fit with that of
Hoa Phat to utilize its available manufacturing facilities and relationships with local in
logistics and supply chain service providers. For example, as a middle furniture
manufacturing firm in India market, Dynasty Modular Furniture Private Limited is
likely the suitable firm for Hoa Phat to acquire. After that, Hoa Phat Furniture can
modify business strategies, corporate structure and adjust the two companies’
technology competences to be more competitive in India market.
Once considering wholly owned subsidiaries entry mode, Hoa Phat Furniture should
take into account its advantages and disadvantages.
Advantages Disadvantages
- As a firm’s competitive advantage is about - Wholly owned subsidiary is the
innovative technologies, wholly owned most costly entry method to a
can help to maintain that competence foreign market from a capital
without losing control over it. investment standpoint.
- Wholly owned subsidiary allows a firm to - Risks when exploring new market
entirely control its operation in different and conducting business in a new
countries. The reason is that the firm now culture by a firm itself without a
becomes the owner on its own. There is no host country partner are higher
share of control or management on the than joint venture or coordination
business. with local enterprises.
Decision making matrix

 Reservation to competence of innovative technologies – business confidential:
Sharing or exchanging technologies due to partnership and coordination can make the
firm’s innovative technologies leaked out to its partner and even likely its competitors.
Market share of Hoa Phat Furniture can decline if its business confidential is leaked out
and arrive at its competitors.

 Low financial investment: whether conducting a business in India by exporting mode

or others, Hoa Phat Furniture has to consider how it would cost the firm and whether
that much will generate a worthy return.
 Accessibility to customer behavior, marketing expertise and government
regulations: either a local manufacturer in the same industry or a consulting firm in
logistics and market research is the expert to the local business environment. It would
reduce time, efforts and mistakes in exploring new market, new culture.
 Time for business establishment: as above, time for paper works, documentation,
setting up manufacturing plant, office and other stuffs for a business in a new country
varies from country to country. The time also depends on which 4 th logistics party the
firm collaborates with to smoothen the paper work process.
 Business control and management: Partnership requires each party to respect the
others in decision making and strategic changes. A share of management and control
power between parties is also obvious.
Criteria Weight Exporting Joint Wholly owned

ventures subsidiary
Reservation of
Innovative
technology 30% 9 (0.3) 4(0.3) 9(0.3)
Low financial
investment/risk
20% 8(0.2) 7(0.2) 4(0.2)
Accessibility to new
business
environment 25% 2(0.25) 9(0.25) 7(0.25)
Establishment time
5% 8(0.05) 7(0.05) 5(0.05)
Business control and
management
20% 5(0.2) 4(0.2) 9(0.2)
Total
100% 6.2 6.0 7.3
In the above decision making matrix, the total output is based on the scale of 10 to
measure how efficiently each mode solves the issues that Hoa Phat Furniture may face
when entering into India market by that mode. Clearly Wholly Owned Subsidiary with
its highest output of 7.3 among the three outcomes is the most appropriate entry mode
for Hoa Phat to practice. As mentioned, by the Wholly Owned Subsidiary mode, OM
logistics, New Star Consulting, Seth Associates, and Master Mind Network will support
Hoa Phat Furniture in distribution, delivery, human resources, legal documentation and
market research respectively. Thus, a weakness of wholly owned subsidiary entry mode
which is a lack of market expertise of the foreign firm is now completely solved.
Moreover, as long as the wholly owned subsidiary mode requires company who
practices it to have significant financial capacity, Hoa Phat furniture can meet this
requirement. According to the Ho Chi Minh Stock Exchange Agency, Hoa Phat Group
which is Hoa Phat Furniture’s parent company, is handling the equity capital of about
1,963 billion VND. This financial capacity is ranked among the top highest financial
equity companies in the stock market, according to the agency. In the period between
2011 - 2015, the company has the strategy to focus to invest on Furniture and other
industries of the group in Vietnam and foreign market, according to Hoa Phat Group.
Once investment to develop in foreign markets is the strategy of the group, major
financial requirements for investment or initial establishment in foreign markets are no
longer trouble to Hoa Phat Furniture. This is the reason why whether practicing wholly
owned subsidiary, Hoa Phat Furniture still can pay no worries to financial investment
issues in Mumbai and India. In other words, financial competence is a significant
strength of the group and Hoa Phat Furniture.
5.3. Segmentation, Targeting and Positioning

5.3.1. Segmentation
Geography segmentation
Region In the first year of entering to India, Hoa Phat will choose New Delhi,
Mumbai and Bangalore cites for establish its business. Those cities are in
top biggest cities of India with the population of 21.72, 19.695 and 7.079
million people respectively (CIA, 2011). Those cities are not only known
as the most active cities of the country with a rapid economic growth rate,
good infrastructures such as roads, railway, airports, port that will help the
company have more choices in transportation and travel for doing
business, but also are the centers of IT (Bangalore cities), BFSI sectors,
banking and real estate industries which have big demand for office
furniture. Hoa Phat sees that is a good opportunity for company to enter in

those cities as potential markets.

Density Urban and suburban areas
Demographic segmentation
Age 22-55 years old. Products that Hoa Phat wants to sell in India are office
furniture; therefore company’s target has to focus on white collars whose
ages from 22 to 55 years old.
Gender Both Male and Female. Classifying the gender in order to help the
company to design and offer suitable products to different genders. For
example, company can offer products with elegant designs to females and
strong design to males.
Income Medium and upper income equal or above $350/month
Life Company decided to divide the range of ages above in to groups which are
cycle 22-35 and 36-55 years old. In different life cycle, people have different
perceptions toward many aspects of live. Thus, company does so to offer
furniture that suit with their ages and perception. For example, with the
group of ages 22-39 are young people who are active and fashionable
therefore company has to offer them office furniture with strong designs
and bright colors.
Psychographic segmentation
Class Middle and upper-middle class who are young white-collars.
Lifestyl White-collars are strivers who seat in front of computer 8-10 hours/day to
e deal with the official jobs. They have higher income and life standard when
compare with other physical jobs.
Persona High education and active

lity
Behavioral segmentation
Occasi People will buy new office furniture when their companies build
ons new offices or buildings.
Benefit Company aims to people who seek for high quality products with
sought affordable prices, good service quality.

Loyalty Hoa Phat will set up police of cash discount to encourage customer loyalty
status and maintain good relationship with customers. Thus, company can apply
the “word of mouth” strategy to the existing customers in order to help it
spread its brand and image to the community.
User Company segments the market to potential customers, first time and
Status regular customers to have suitable strategy and promotion to each segment
of customer.
5.3.2. Targeting
Differentiation marketing strategy will be applied for the company when doing
business in India. Company target focuses mainly on the young white collars from
22 to 35 years old because our products are office furniture and people who have
demand for those things only white collars. Moreover, our products is designed with
fashionable designs and colors that follows the trend of the community therefore
young people will be easier to buy those things when compare with order generations.
As we has mentioned in the SWOT analysis, there are many direct and indirect
competitors of Hoa Phat in the India market. Therefore, in order to help the company
achieves the set goals of gain more market shares by increasing sales volumes and
place in a higher position; the company have to make its products and service
different from other rival firms. Thus, Hoa Phat needs to do a careful market research
report, according to Zikmund, W, 2011, “market research is the systematic and
objective process of generating information to aid in making marketing decision”;
about the strengths and weaknesses of those rival firms in order to prepare plan for
competing with them. Moreover, company also need to research about culture,
attitudes and behavior of Indian toward Vietnamese furniture to help the company
decide which products, designs, colors that suit with the culture and perception of
Indian.
Hoa Phat applies B2C marketing strategy mainly to spread its image and brand
to the Indian community in order to create awareness of Indian customers about
Hoa Phat furniture brand. However, if the company applies only that strategy,
company will not meet its set goal of sales volume because individual consumer has

small demand for office furniture. Thus, Hoa Phat needs to apply another targeting
strategy that is B2B in order to meet its plan.
 Strategy: Hoa Phat will target on construction contractors, Décor and
Architect companies, real estate investors to reach its sales target because the
real estate industry in India is booming due to the rapid increase demand for
commercial and office space. According to BIRD 2009, office space in India grew
20% and will be higher in next few years due to the fast economic growth rate of
India. The rapid increase of office space and real estate industry will lead to a
substantial demand for office furniture. That is a good opportunity to Hoa Phat to
sales directly to those targets; however if company wants to success in this field, it
has to apply other business strategies such as timely delivery, warehouse and
connectivity among its stores and agencies through strong logistics system and
after sales support to take competitive advantages in order to compete with other
brand name in India (Recommended by BIRD, 2009). Thus, Hoa Phat has to build
a strong logistics system to support for its own business.
 Develop logistics system: to build a strong logistics system Hoa Phat needs
to have good warehouses system, vehicles for transportation. However, to
obtain a good logistics system like that it requires company has to invest a
huge amount of money; that will cause a high risk level to company because
to cost of investment is quite high. Thus, company can develop its system by
using other less costly strategies.
 Establish E- Commerce: in order to save operation cost for establishing
wide distribution system, by having a website, Hoa Phat will provide online-
purchasing which also popular in India recently.
 Establish warehouse system:
 Hoa Phat can rent warehouses in the sub-urban areas aground cities
that company wants to establish its business. Form those warehouse
company can deliver products to its office in the cities.
 Using Vendor Management Inventory strategy: Hoa Phat can find
other businesses to become its vendors and then company able to stock
office furniture in warehouses or stores of those vendors.

By applying those strategies company not only can save money but also able to
establish a wide warehouse system.
 Establish transportation system: Hoa Phat can use the third party logistics
to help them deliver products to customers. Thus, company can save both
time and money.
5.3.3. Market Positioning

Based on the competition analysis, the direct competitors of Hoa Phat are Godrej &
Boyce Interio, Durian furniture, Nilkamal and Style Spa. Hoa Phat is a new arrival
firm in India market therefore its Distribution system will be limited which lead to
Hoa Phat get disadvantages when comparing with other competitors based on
distribution system. However, in term of price, and quality, Hoa Phat is positioned
itself as providing cheaper price with high quality of products.

5.3.4. The 4P’s in India Market
5.3.4.1. Product
When entering to India market, Hoa Phat will bring along office furniture
category with them. School and home furniture which are offering in Vietnam
may be considered the few years later when Hoa Phat Furniture brand name
gains the position in India customers’ mind. Due to lack of experience about the
customers’ demand for office furniture, the company will give its customers
customize service which means the customers can design the products by
themselves such as color, textile and dimension. Although It takes time to
produce the customize products, the company can satisfy customers’ demand
and get more ideas about the office furniture trends in India to support for
further innovation in designing new products.
3 level of products in India will be designed the same which that in Vietnam.
However, for packaging and instruction guide will be written in English, Hindi
because, English is the most foreign language speaking and Hindi is seen as the
mother tongue and office language in India.

For B2C segmentation:

Due to lack of warehousing space and expensive transportation cost, the
company will not bring all office products that are being offered in Vietnam
market. Therefore, for the first year entering, only the computer desks, chairs
and fire resistant safe will be brought along with.
Product Line Product Description
Computer Desk
Due to booming in technology As Indian consumers are
and IT service, rate of using prefer wooden furniture
computers for working or ( more than 85% of wooden
entertaining is growth in furniture consuming by the
India. Therefore, it seems to market), the company will
be having a demand for distribute to type of products
computer desk in India which made of wooden and
market. Therefore, the steel to this market. Its special
products will be brought along feature is that it is designed to
with office chair and safe. The contain all stuff including
type of product will focus on computer, printer, some
the simple design but fully decorative stuff, CDs and one
utilize of table’s space with a box for containing the
small size to fix with the important document in small
limited living space in India. size.

Dimension: W1150 x D700 x

H1300
Office Chair High mesh backrest seat frame

As target mainly on the young of plastic.
The products is designed with
white collars from 22 to 35
some special features:
years old who spend long time - The tension of the net can
on working with computer in be adjusted automatically
to ensure the health of
IT services which is booming
consumers.
in India. Spending long time - The cushion of seat is
to sit and work will make covered by mesh fabric.
them get tired and affect their - T- Arms can be adjusted
Dimension: W660 x D
up or down to make the
health especially their backs. 600-770 x H 1140-1260
consumers feel
Therefore, their demand for a comfortable while sitting mm
chair is that can help them on it. Also, it is covered by
soft plastic PU. Therefore,
avoid any health effect and
it can avoid any damages
feel comfortable while for consumers.
working. Catching up the The company also provides
various colors available for
demand, Hoa Phat will
customers.
introduce Indian customers
the newest styles of the office High mesh seat back chair.
The products is designed with some
chair products line which its
special features:
features are helping - The seat back can be reclined
consumers avoid any fatigue to 150 degree. Therefore,
while working. consumers will feel
comfortable during working
Along with these two special and relaxing.
products which are targeted - The high of seat pillow can be
for middle-high income adjusted to avoid fatigue
The company also provides various
class, the company also
colors available for customers.

brings some other styles for

the middle class. The types
of products focus on
providing customers a cheap
one.
Resistant Safe
As the safe for individual use,
‘With the exponential growth
the company will provide the
in banking services due to the
products with the smaller size
Indian economy entering a
(weight appropriate from 40 to
high growth phase, the
60 kg).
demand for physical security
products’. (Safeage Products
n.d)
For B2B segmentation:

For the segmentation, the company will provide all products that the company
is offering in Vietnam market. The sales person will bring the product category
along with them during having the meeting with business customers. Based on
their requirement about size, color, types of product and quantity, the company
will send back the order to Vietnam. Then, the bundle of products will deliver
to India. The reason for doing so is that the company does not need to lease the
larger warehouse for storage in India which helps company saving operation
cost. Moreover, the order from business customers mostly big in value and
wide products ranges. Therefore, if company only provide a limited types of
products, it will limited the competitiveness with other companies who provide
the wide range of products and the company will lose the profit. Finally, for
order from business customers, they do not require the company to delivery
immediately. Therefore, the company has time to deliver products from
Vietnam to India after getting the contract.

5.3.4.2. Price
Although, value-based pricing strategy could bring more profit to Hoa Phat
Company, it will not be the most appropriate pricing strategy when entering to
new market especially international market where Hoa Phat is not experience
enough. Moreover, one of the vital objectives in the first year doing business in
India is to survive. The company will not expect to get much profit from the
market at this time. Getting profit will be objective for years later not now.
Therefore, in order to survive in the market, Hoa Phat Furniture needs to
increase the sales volume and step by step gain the little of the market share to
pay off the expense especially promoting cost in the first entering year. The next
years, the company can start to make profit due to increasing on sales volume
and decreasing on promoting cost.
To do so, cost-based pricing is the price strategy that company will choose
when entering India market. As a new arrival, the company will not understand
Indian customers’ demand deeply as well as the Indian furniture industry.
Therefore value- based or competitive-based pricing seem to not useful for
company for the first time entering the market. The price strategy will be
changed in the future when the company experiences the market enough. Cost
for producing, distributing system and tax are some factors will be considered
when setting the price.
Product bundle pricing and promotional pricing will also be employed to
encourage customer making purchasing.
5.3.4.3. Place
In Vietnam, Hoa Phat Furniture is using a ‘hybrid marketing channel’ and the
channel will be applied in India market. While in Vietnam, by having the wide
range of retail system in 64 cities and provinces, the channel from retailer to
customers is playing an important role in reaching the customers. The company
also focuses on developing the retailers system to reach more customers and
offer them the most convenience to purchase in the closest stores. However, In
India, when the company is just a new comer and does not own the extensive
retailer system, the company will reach the customers directly through online
and personal selling. However, due to the important of having a relationship in
doing business of India customers, the company will focus on finding the best
dealers who can help them in distribute the products to customer.
5.3.4.4. Promotion
5.3.4.4.1. Advertising
Internet
To minimize the advertisement cost, Hoa Phat will decide to focus on online
advertising which is consider lower cost than the traditional methods such
as print and broadcast. India places the 3rd internet user in Asia. Therefore,
there is a good opportunity for the company to advertising online. Yahoo
and Google are the most visited websites by Indian internet users. Thus, the
company strategy for online advertising will be displacing banner on Yahoo
website and employ the paid search marketing which is offered buy Google.
It means Company will pay Google to display search result on the top right
on the first page. Both links which are displayed on Yahoo or Google will
lead the customer visit the Company’s website. Although Hoa Phat
Furniture JSC already has website in English and Vietnamese, It seems to be
complicated for customer. The reason is the website not only displays
information about Hoa Phat Furniture but only other affiliate of Hoa Phat
Group. Moreover, when entering to Indian market, online purchasing which

does not have in Vietnam will be employed. Therefore, a new website
version needs to be design.
Print
According to PrinIndia, India is the second largest market in the world for
newspapers which reach over 55% of the population every day. Therefore,
the first entering to India market, placing advertising in newspapers and
magazines will make the customers aware of the Hoa Phat Furniture brand.
Dainik Jagran and The Times of India are two largest read Hindi and
English language newspaper respectively.

Each newspaper writes in different languages. Therefore, to avoid any

mistake in the content of advertising, Hoa Phat Furniture needs to hire local
people who can use Vietnamese, English and Hindi. If, it is difficult to find
the people, the company also can consider employing one who can use
Vietnamese and English and one who can use Vietnamese and Hindi.
However, the first choice is still better because it will ensure the consistence
of all advertising’s content. When choosing the newspaper as a media tool in
promoting, the company also has to consider which advertising form should
be used. PR article is one of the advertising forms the company should
consider. To illustrate, the company will pay for the reporter from these two
newspapers to write a short article about the company to make Indian
customer aware of the company’s appearance. Once making customers
aware of the company’s brand, a purely advertising which the company will
display the products’ image with more detail about quality, products range
as well as price will be used. After that, coupon advertising will encourage
customers to come to the company and make purchase.

5.3.4.4.2. Sales promotion

Sales promotion is considered as a good
way to encourage purchases or sales of a
product in the short term incentives. As a
new brand entering in the market, offering
coupon and discount will encourage
customers to purchase the product.
5.3.4.4.3. Personal selling

In order to stand out other competitors,
personal selling plays an important role in promotion campaign.
Personal selling will be responsible for directly communicate with
customer in generating sales and building the relationship. Customer
sales force structure will be applied in Indian market. In this structure,
each salesperson will be responsible for each customer segmentation or
industry lines. As a new arrival in Indian Furniture industry, building a
good relationship with customers is really important. Thanks to the
structure, each salesperson for each customer will help the company
understand what that customer needs in detail to deliver the best for
them.
5.3.4.4.4. Direct marketing

Once the company gets customers information based on the list of visitor
access the company’s website, past and current customer, the company
will send online-catalogue or any information about new products as
well as sales promotion to those customers directly. By this way, the
company not only gets response from the customers immediately, but
also develops long-term customer relationships.
According to Makar 2008, “direct selling and direct marketing of consumer

and commercial products are two of the fastest growing industries in India”.
There is a huge numbers of companies rely on direct selling in moving
products as well as services. Moreover, recently, as the demographic trends
becoming younger, young Indian people especially urban Indians are using
electronic media rather than print media. Therefore, direct marketing and
direct selling are two important marketing tools that help the company in
promoting products in India.
5.3.5. Positioning
 Competitive advantages:
Strong Financial support:
Financial support is one of the most important factors that contribute to the
success of a business. Hoa Phat Furniture JSC has a strong support from the
Hoa Phat group; therefore company can use the fund for doing necessary
steps before and after join in India market such as doing market research,
marketing campaigns, promotion, rent show room, employs staffs and R&D.
With the high financial capacity, Hoa Phat able to compete with other rival
firms that have joined in India before and also expands its business in long
run development.
Products:
Hoa Phat provides to Indian customer a wide range of choices many products
categories such as wooden office table and cabinet, steel office table and
cabinet, computer table, office chair, removable partition and solid wood or
steel chair and table. In the market furniture in India where there are many
suppliers so that the consumers will have more bargaining power. In order to
reduce that power level from the buyers, Hoa Phat tries to offer various
products categories with high quality, fashionable design and color and
useful functions to satisfy the demands of customers. Moreover, our company
will offer different products for individuals who have different social statuses
and positions. For example, we will offer the medium products categories to
staffs and premium products to directors of a company.
Service: Hoa Phat provides a full quality service to customers when they
purchase company’s products.
 12 months of Warranty
 Delivery and Installation
 After sales service
Distribution Channel: Company channels of distribution will be located in
New Delhi, Mumbai and Bangalore cites so that company can take
advantages from the location of channel such as easier to reach the target
market because those cities have huge amount of citizens and most of them
are while collars. Furthermore, there is a big port in Mumbai; company can
take advantages from shipping large amount products by using sea route from
Vietnam to India. Thus, company can save cost of transportation. Hoa Phat
applies the cost-based for pricing strategy, when the cost of transportation is
reduced that will lead to the price of products will also decrease. Hence, the
location of the channel contributes to reduce the cost and help company gain
the price advantage.
People: Hoa Phat has worked in the furniture industry for 16 years, company
has experienced and professional staffs for research and develop new
products with attractive designs, colors, sufficient features. Those people can
help the company products differentiation from rival firms.
Based on the competition analysis, the direct competitors of Hoa Phat are Godrej &
Boyce Manufacturing, Durian furniture and Nilkamal. Hoa Phat is a new firm in India
market therefore it has to place in a lower position than other famous brands in the
furniture industry. However, with the existing competitive advantages Hoa Phat will
narrow the gap between company and those rival firms.
6. The financial Plan

6.1. Financial Marketability
Unit Price
Main Product Price Price Estimated Sales

(in VND) (in INR) contribution
Office Tables $ 500.000 $ 1.256 35%
Office Chairs $ 1.000.000 $ 2.512 25%
Cabinet & Steel $ 2.500.000 $ 6.280 10%
Table
Partition $ 4.000.000 $ 10.050 10%
High School Desks $ 500.000 $ 1.256 10%
& Chairs
Conference Table $ 6.000.000 $ 15.073 5%
Other $600.000 to $ 1.507 to $ 3.768 5%
$1.500.000
Sales Volume
The first three years entering India Market will be struggling time. The three show
rooms and team of sale representatives are expected to sale only 200 units. It is
because Hoa phat is new with the market and it takes time to introduce company’s
products to the customers. Thanks to the effective marketing campaign, the sales
number in the next 6 months will increase steadily, due to the rise of office space
demands mentioned in previous sections.
In the following two years, inflation rate will affect the management costs and
increase our product prices by 12%. This time is when the industry is familiar with
our brand and we increase the marketing activities so the sale volume is predicted to
increase up to 7500 unit in total. However in third year, the competitive of the market
will prevent the growth of sales numbers and during this time the main contracts will
come from our loyal customers.
Other Expenses
1. Marketing Activities
 Market Research

Before enter a new region or market that we have not deal with before, market
research is an explorer to discover the demands and behaviour of the future
customer. There are several ways to conduct a research. Buying a report from a
creditable company in this field or, send out the specialist team to work directly
in India. This will cost more than hiring a 3 rd party company, but it can lead to
reveal many key elements of consumer trends and how they react to the
particular product. There for Hoa Phat will spend $15000 to do a research about
India Market.
 Advertising
Advertising is a method of using Broadcast system, Newspaper, Radio or
outdoor to keep customer knowledgeable about the products and service that the
company offers on market.
There are several tools such as Internet, Television, Newspaper & magazine,
Radio broadcast and mouth to mouth. Among these tool, internet and will be
priority because it is very efficient with low cost, together with Radio and
Newspaper.
Since India is rapidly develop it IT infrastructure, the cost to operating one
website is affordable:
Website Content Price (USD)
Small Basic (10 pages) $200
Standard Website (11 to 50 pages) $400 - $1200
Larger websites (more than 80 pages) Can be negotiated

*Source SAI Creative’s Website
Second is newspaper and magazine. During the booming of construction and
infrastructure development, advertising through business newspapers and
engineer or IT magazine could be a good way to make a connection to the
potential customers. Furthermore, the diversification of population and region
make it more costly to use television as a strategic medium, so it is wisely to
appear once a month on advertising section of The Hindu Business Line or else.
The total cost for advertising is estimated about $3000

 Promotion
This is a traditional way to gain customer loyal and stimulate sales. However,
since Hoa Phat concentrate on Business to Business sector, so the promotion
method is quite different than business to Consumer sector.
The most common is discount 10% to 15% when the partners purchase with
high quantity. Moreover, promoter needs to find construction project and
contact with them to promote about Hoa Phat products. They also need to joint
auctions hosts by construction contractor to win package of supplying office
furniture to our company.
Overall, the cost for promotion is $4000, since Hoa Phat determined to face first
6 months with no profits in order to gain relationship and market share.
2. Transportation Expenses
Generally, transit time between Vietnam and India ranges from 8 to 23 days using
ocean carriers, as calculated by DHL in the table below:

The reason to choose DHL is the long distance from Vietnam to India required an
experienced firm to handle maintenance and they also have office in Vietnam. When
the cargos reach India, local transportation firms take responsibility. By outsourcing the
transportation parts to Third-Party logistics companies, they can reduce cost and carry
out the supply chain more efficiently. The transportation cost is 8% of the total income
3. Insurance
Long distance of transportation and working overseas raise many issues about quality
control and health of workers. In order to avoid unexpected events and damage, Hoa
Phat needs to cover insurance for its overseas staffs and also the cargo. This will ensure
the contribution of the employees and the reputation of our brand with the customers.
The insurance will up to $1500.
4. Legal Fees
Since India has a high bureaucracy, therefore Hoa Phat possibly encounter several legal
issues when opening business in India. Project team has estimates it would cost 2% of
the total income.
5. Rent & Utilities
Along with direct marketing, Hoa Phat also plans to open representative office and 3
shows room in three major cities which are Delhi ... and Bangalore. These show rooms
are going to be 100 m2 x 100 m2.The cost is calculated based on market price index of
India which is $1000 for each show room.
The utilities are including basic rent fee (electricity, water, gas...), phone and internet.
Total estimate is accounted 2% of total income.
6. Salary
Only the management team and some specialists are made up from Vietnamese, other
personals and staffs are going to be Indian. It is to take the advantages of low cost
labors and avoid paying high cost for overseas working. Current planning is $2000
management fee and 10% commission from sales.

6.2. Projected PNL Statement



7. International Aspect
7.1. Investment
As long as Hoa Phat Furniture segments the market to focus on middle class customers
and corporations in Mumbai and India, it is considered to be possible to conduct the
market segmentation in India furniture industry. The reason is that whether there are
many furniture manufacturers and importers in India and especially Mumbai, there are
not many companies specializing in middle class. They seem to pay attention to the upper
range and lower market range. Once Hoa Phat Furniture focuses on the middle range in

market, it is significantly potential because there is a high demand of furniture

consumption but fewer competitors in this market range. Moreover, as the Hoa Phat
Group, the parent company of Hoa Phat Furniture has figured out its strategies to invest
more in foreign markets by its strong financial competency, Hoa Phat Furniture now can
be more confident to fund its business establishment in Mumbai. The risks of over debts,
bankruptcy, a lack of money to set up manufacturing plants, to run the business and to
conduct long term advertisement campaign are now eliminated. Thus, as those factors,
Hoa Phat Furniture’s business in Mumbai, India is significantly practical to carry out.
As long as Hoa Phat Furniture becomes successful in India market in gaining desirable
market share and master market expertise in India and the Middle East by its joint venture
with Durian Furniture, Hoa Phat aims to practice wholly owned subsidiary later on. In
this entry mode, the company can decide and manage its business on its own. Hoa Phat
will invest money to build up its own manufacturing plans, representative offices, wide
distribution channel and significant relationships with logistics firms in Mumbai and
major cities of India. The dissociation from the joint venture with Durian is aimed to
process after a period of 3 years when the firm assumes it has significant market share
and financial capacity. Then Hoa Phat Furniture will step into Saudi Arabia furniture
industry, which is approachable from India by crossing the Arabian Sea. The country is
considered to be the heart of the Middle East and is one of the richest nations in the area.
According to CIA (2010) Saudi Arabia economy is an oil-based one. It is the leading oil
exporting country in OPEC with 20% of the world’s proven petroleum, largest capacity
in the world.
Saudi Arabia is encouraging the growth of other industries to diversify its economy and
give jobs to the citizens, according to the CIA (2010). The website also states that the
nation’s GPA per capita of $24,200, GPA growth rate of 3.7% in 2010, and inflation in
2010 is 5.4%. Those figure outs are considered idealist for conducting a business due to
the nation high rankings in those factors compared to the world. In addition, the country’s
economy is quite healthy when it remains public debt of 16.6% of GDP, while the lowest
public debt ration to GDP of the world is Libya with the ranking of 133. Thus, Saudi
Arabia is a quite potential market for Hoa Phat Furniture to extend its investment to the
nation.
7.2. Management
As long as Hoa Phat Furniture aims to enter India markets and further appear in Saudi
Arabia, the company has the plan to set up the board of directors who are entitled to
management and control the business.
Pham Thi Hong Anh: CEO, who is in charge of overall controlling the operations of
Hoa Phat, its brand offices and manufacturing plans in India and conquering Saudi
Arabia market. With her knowledge and experience in running Hoa Phat Furniture –
Hanoi and Ho Chi Minh city in 10 years, she is believed to be the key management
person in establishing Hoa Phat’s business in Mumbai.
Nguyen Nam Phuong: Human Resources Director, who is entitled to hire and train host
country employees. Ms Phuong is the general HR director of Hoa Phat Group since the
group was first established. She also takes part of incorporate Hoa Phat business culture
and Indian management style to come across cross-cultural barriers in employee values
and interests.
Nguyen Minh Hoang: CFO. He firstly worked as the Head of Financial Department of
Citi bank – Ho Chi Minh city. As one of stakeholders of Hoa Phat Group, he is currently
CFO of HoaPhat real estate. He plays role in raising funds for Hoa Phat’s investment
projects in India. The CFO also has to make sure the company activities are profitable
after 1 year attacking India market.
Phan Huu Phung: Marketing Director. Mr Phung is currently the marketing director of
Hoa Phat Furniture – Vietnam. He is also in charge of PR representatives of the group for
nearly 10 years. Besides that, Phung is in charge of figuring out strategies for the
company in India by analyzing market segments, target customers, and any potential for
HoaPhat in India and Saudi Arabia.
Doan Thi Ngoc Thanh: Sales Director. She is currently sales director of Hoa Phat
Furniture – Ho Chi Minh city. As a leader in sales of the company, she has contributed to
make 7 consecutive years peaking up previous years’ sales records. Thanh will carry out
sales promotion activities as long as she incorporates with the Marketing department to

clarify appropriate sales methods. The Sales Director is also in a must to conduct sales
activities to reach annually sales target.
Nguyen Ngoc Duc: Logistics Manager. Duc was firstly the logistics manager of the Hoa
Phat Natural Resources Exploiting Company. He then becomes the logistics manager in
Hoa Phat Furniture – Ho Chi Minh city. In Hoa Phat’s business in Mumbai, he is in
charge of setting up warehouse systems, materials supplement, linking relations with
local logistics services firms to establish distribution method, distribution channel, other
logistics activities to smooth business operations.
8. Conclusion
In conclusion, based on the company’s current situation and deeply research on India Furniture
market, the strategy has been created to help Hoa Phat Furniture be successful in the potential
market. Although, a lot of difficulties and challenges may affect the company negatively, huge
potential benefits can be achieved. However, due to come limitation during creating the plan
such as lacking of help from professional marketing agency and legal agency who understand
more about India market, the strategy will need time to evaluate its ability of success. Overall,
India is a huge potential market for furniture products. Therefore, doing business in India at that
time can be a right decision of Hoa Phat in expanding its business overseas.

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INTERNATIONAL BUSINESS PLAN

HOA PHAT FURNITURE JSC

RMIT International University Vietnam

2 INTERNATIONAL BUSINESS PLAN

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3. Furniture Industry- Company Overview and Product Overview...........................................22

4. International Business Environment..........................................................................................44

4.2. Social Conditions....................................................................................................................48

5. Global Competing Strategy.........................................................................................................62

6. The financial Plan.........................................................................................................................85

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 Capital: New Delhi.

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Figure 2: Reproduced from: Indiantourismdirect.com 2011

2.2.1. Religious Structure

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India's Religions 2010

Figure 3: Adapted from: Culture-4-Travel 2008-2010

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2.2.2. Age Structure

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Figure 6: Reproduced from: OECD 2011

In addition, to illustrate for the

Figure 7: Reproduced from: VMW-Sift 2010

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2.5. Other Information

Watching News on television is the activity that

Figure 8: Adapted from: PrinIndia 2011

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Top 5 Indian News Channels

Figure 9: Adapted from: PrinIndia 2011

Print Media based on languages

Figure 10: Adapted from: PrinIndia 2011

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 Dainik Jagran (55.7mn readers) and Rajasthan Patrika (14mn readers)

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Internet Users growth in India ( 2000 - 2015)

Figure 11: Adapted from: Saxena 2011

According to Juxt 2009 ( cited in Prabhudesai 2011) , emailing and searching or

Figure 12: Reproduced from: Just 2009 (Cited in Prabhuseai)

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Along with rapid growth in

The fact about Indian

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access to all-weather roads. This problem is happening seriously in northern and

Figure 16: Reproduced from: ProKerala.com 2011

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Figure 17: Reproduced from: Embassy of India 2009

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Figure 18: Prokerala.com 2011

3. Furniture Industry- Company Overview and Product Overview

Vietnam’s Furniture exporting

Moreover, According to the

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3.1.2. India Furniture Industry

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Value sales of Furniture in India from 2009-2015

Figure 20: Adapted from: Euromonitor International 2011