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Trần Ngọc Thu Phương
Bùi Thị Vy
Lại Nguyễn Hoàng Phương Vy
Question: Vingroup has a lot of companies, and they do business in different

industries. What are the advantages and disadvantages of this strategy?
In your opinion, Vingroup continues to apply this strategy or stop to apply?
Answer:
 Advantage:
 Market Opportunities:
Vingroup's businesses can leverage each other.Being present in multiple
industries allows Vingroup to capitalize on growth opportunities in various
sectors, increasing revenue potential.
Example: Imagine a customer buying a new Vingroup scooter (automobiles)
and needing a helmet. They can conveniently purchase one at a Vinmart
supermarket (retail) located within a Vincom shopping mall (real estate)
owned by Vingroup. This creates a seamless experience and potentially
boosts sales across different sectors.
 Brand Recognition:
A diversified portfolio enhances brand recognition and loyalty, as customers
associate Vingroup with a wide range of quality products and services.
For instance, a Vietnamese consumer may be familiar with Vingroup through
its high-end real estate developments, such as Vinhomes, which are known
for their luxurious amenities and innovative design. They may have also
shopped at VinMart, Vingroup's retail and grocery chain, and stayed at a
VinHotel during their travels.
 Diversification of Risk:
By operating in multiple industries, Vingroup can spread its risk and reduce
its dependence on any single industry.
For example, if one of its real estate projects faces a downturn, its automotive
or retail businesses may be able to offset the impact.
 Synergies and Cross-Selling:
Vingroup can leverage synergies between its businesses, such as sharing
resources, distribution channels, and customer data. This can lead to cost
savings and increased revenue through cross-selling opportunities.
For instance, Vingroup can offer its retail customers financing options
through its banking subsidiary or insurance products through its insurance
arm.
 Economies of Scale:
Vingroup's large scale and diversified operations can enable it to achieve
economies of scale, leading to cost advantages and higher profitability. This
is particularly relevant in industries like manufacturing, where Vingroup can
benefit from volume discounts and efficient resource utilization.
 Disadvantage:
 Brand Dilution:
Having too many brands under one umbrella can dilute the overall brand
image. Consumers might struggle to understand what Vingroup stands for if
its companies operate in such diverse fields.
 Focus:
Spreading resources thin across many industries can make it difficult for
Vingroup to achieve deep expertise in any one area. Focusing on fewer
industries might allow them to become leaders in those specific sectors.
 Complexity:
Managing a diverse group of companies across various industries can be
complex. Each industry has its own regulations, competitors, and market
dynamics. Vingroup needs strong leadership and operational systems to
ensure all these companies are running smoothly.
For example, Vinhomes (real estate) has different needs than Vinmart (retail),
and both require different regulations and expertise.
 Merger and Acquisition Hurdles:
Vingroup might struggle to integrate new companies acquired as part of their
expansion strategy. Successfully integrating company cultures, operations,
and systems can be a significant challenge.
 Industry-Specific Challenges:
Vingroup might not have the deep industry knowledge or relationships
needed to compete effectively in all the sectors they operate in. This could
put them at a disadvantage compared to more focused competitors.
Example: Vingroup's entry into the automobile industry (Vingroup) faced
initial skepticism due to the immature Vietnamese auto parts supply chain.
While they've partnered with established players like BMW, successfully
navigating industry-specific challenges remains an ongoing process.
 Integration Challenges:
Vingroup might struggle to integrate its various companies seamlessly. This
could lead to inefficiencies, duplicated efforts, and missed opportunities for
collaboration. For instance, Vinhomes (real estate) might not effectively
leverage Vinmart (retail) to offer bundled services to residents.
 Conclusion:
Vingroup employs both related and unrelated diversification strategies to expand
its business portfolio and mitigate risks while tapping into new opportunities.
Related diversification leverages the company's core skills and brand recognition
across sectors like real estate, hospitality, healthcare, education, automotive, and
retail, allowing for cross-selling and synergies. Conversely, unrelated
diversification, such as entering automotive manufacturing with Vingroup,
ventures into new markets beyond Vingroup's core businesses.
Despite seeming unrelated, this move aligns with Vingroup's vision of becoming a
comprehensive conglomerate, enhancing long-term growth and resilience.
So, Vingroup need to continues to improve and apply the diversification
strategy.
But Vingroup might be consider:
- Strategic Review: Regularly evaluate each business unit's performance and
contribution to the overall strategy. Exit non-performing or poorly aligned
businesses.
- Focus on Synergies: Identify and actively pursue opportunities for collaboration
across different sectors.
- Streamline Operations: Standardize processes and systems across the company to
improve efficiency and reduce complexity.
- Targeted Acquisitions/Investments: Focus on acquiring or investing in businesses
that complement existing operations and create clear synergies.
- Clear Communication: Clearly communicate the overall strategy and the value
proposition of diversification to investors and stakeholders.

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Question: Vingroup has a lot of companies, and they do business in different

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