Proposal 1:

In context: Bkav CEO Nguyen Tu Quang has unveiled his first ever Bphone model in 2015,
which has been labeled "unbelievable", "best phone", "best sound" , "fastest data transfer". Even
so, the head of Bkav does not hesitate to compare the Bphone with top products such as the
iPhone 6 Plus or Samsung Galaxy S6. The words that have the brand "made in Vietnam" has
made the Bphone become popular people who want to use this smartphone. However, the
subsequent events of the Bphone (2015) brought the opposite effect. The image used to illustrate
the "advance focus" feature turned out to be obtained on the internet. Screen quality, cameras are
not as advertised. Meanwhile, Bkav also has problems in production that can not reach
consumers in time.

The price of 10 million dong for such a smartphone is also not matched with such shortcomings.
Also, the way online sales are not effective and until BKAV correct mistakes by retail
distribution, then it was too late when the excitement with the Bphone of the Vietnamese market
is almost zero. The failure of Bphone (2015) poses a huge challenge for the upcoming release.

Product development: Since Bphone's failure (2015) Bkav has certainly gained a lot of lessons
from it. And still, there are still a lot of people who have put their faith in the 2017 version
(which will probably be called Bphone 2) here as the technology giant has made a lot of changes.
This new product will be applied new technology as well as care about production. Bkav is very
polished for its products to the smallest detail such as: Bphone 2017 using special milling and
surface treatment technology to completely eliminate the inconvenience of loudspeaker and USB
port hand grip, full navigation keys are designed based on usage habits, so that most comfortable
with the user. The Bphone 2017 is equipped with AI camera technology. The quality of hand-
shake shots is better than comparable phones. The front camera of the B-2017 is also equipped
with natural beauty. No product on the market is so elaborate. It is clear that Bkav should go
slower but rather participate in a race to master the failure with other opponents.

(Bkav, 2017)

Hybrid strategy: Once Bkav have completed the market segmentation and selected their target
market, it is time for marketers to create a distinct value for Bkav products and services. First of
all, the Bkavs should undertake the SWOT analysis to assess the overall ability of the business.

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Bphone can not compete with other phone companies from China if continue to keep the price of
Bphone 2017.Then the strategists can determine and improve about the value for the product or
service. More importantly, the pursuit of the single most common strategy is considered to be no
longer sufficient in today's competitive environment. Increased competition and cost pressures as
a result of globalization and changing customer expectations require companies to adopt a
multidimensional strategic approach. Today, most customers expect to get everything right
away: high quality, distinctive products combined with excellent service at low prices. That is
the buying psychology of Vietnamese consumers. Launching a cheaper version, with a lower
processor but possessing similar design and functionality to the mid-range or high-end line, is the
trend of the mobile manufacturers today. BKAV should apply this policy to expand the product
segment, enabling BPhone to more widely reach the market. In the 2017 version or called
Bphone 2, Bkav can have many different ways to make a difference to gain advantage over the
opponent. Hybrid method based on product and the price. By this method, Bkav can exploit the
characteristics of the product or service to make a difference such as features (durability, heat
resistance, safety for health, environmentally friendly, camera Smile Shutter, 360-degree rotating
camera, 3G, 4G connectivity), performance (good performance, good heat dissipation, high
performance), design (color, style, material. Bkav can learn from Oppo: Oppo has launched the
Oppo N1 with a 360-degree rotating camera. And more important is lower the price of Bphone
2017. With this configuration, users will have a high-performance, best-performing, high-
performance smartphone on the market today that can handle daily tasks such as watching
movies, surfing the web, listening to music, taking pictures, playing games.

Strategic alliance: Bkav has strategies to work with its partners in assembly area, product
distribution approach to customers as well as service modifications to increase sales and
ensure the quality of the product is on par with the competition. While BPhone is launching,
there are two major partners mentioned by BKAV are Qualcomm and Mobile World (TGDD). A
partner to help make the hardware and design the phone, a partner that helps BKAV bring the
phone to consumers and handle issues related to business, distribution, after-sales warranty when
buying Bkav product. Qualcomm has developed Vietnamese-language Vietnamese engineers to
provide technical support to local businesses such as BKAV. They will help manufacturers
integrate the chip into the computer to run as well and the highest performance possible, they
will help fine-tune the chip and software to save battery power, they will help connect and

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calibrate the set. Snapdragon' image processor for better picture quality, integrated fingerprint
sensor with Android, or how to get 4G LTE chip to run it with Snapdragon 625. BPhone 2 also
uses other components provided by Qualcomm for connecting to 4G networks. This is also part
of Qualcomm's strategy to expand its 4G network chips and chips to local-scale technology
vendors. BKAV in 2015 also said it has signed a contract to use Qualcomm's patents on its
smartphones, and it will continue to do in 2017 . This agreement helps BKAV avoid unnecessary
legal troubles and can focus on developing equipment as well as business efficiency (Bkav,
2017).

The Mobile World is a new element in the partnership with BPhone 2017. This year, BKAV no
longer sells BPhone online but instead uses traditional distribution models. 2015 BPhone 2015
for online reservations, but late status has occurred to a lot of people. BKAV brings the BPO
2017 to the store, which if set up own store own Bphone is too expensive, long, time consuming,
then cooperate with a company that already has the widest distribution system is best. No one
better suits the Mobile World to do this task. According to Retail Asia Publishing, Mobile World
is currently the largest retail chain in Vietnam with more than 1500 stores, including about 1100
stores, plus the Green Machine and the Grocery Green. With a wide network, Mobile world can
help bring BPhone to any place where both parties want to sell, not just focus on distribution in
large cities. And while it is in such a complex supply chain, logistics, and sales system,
BPhone will immediately enjoy the benefits of Mobile World, this will help Bkav reduces
the cost of distribution to compensate for the cost of the product (Luan, 2017).

Proposal 2:

Cost leadership: So far over 3 years and under two generations but Bphone is not really
showing signs of success. However, it can be seen that BKAV is trying its best to learn from its
own mistakes. The first generation of handsets has a pretty bad design, and the features are not
really complete so many people are not welcome. Bphone 2 - Introduced in 2017, the design is
good, masculine but quite sophisticated, and the camera quality is relatively good, comes with
large capacity battery and mid-range chip, but the weakness is too expensive price. With what it
brings, so is only a very small part of the user. The most important issue remains in the product,
as if the first Bphone encountered many limitations in design and software, the second-
generation Bphone has overcome the design defect. However, the software and other support

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features are very low compared to the price. With the Bphone 2018, Bkav needs to improve both
the design and functionality and user experience to get better quality products, at least "the best
in Vietnam." Most of all, the selling price must be adjusted to suit the product and suit the
current market competitiveness. Bkav should launch two versions of Bphone 2018 with a
medium range of less than 7 million and a sample of less than 10 million. This segment is
considered the most lucrative segment of the mobile market in Vietnam today. And this is also
the segment with the most intense competition.

Low-cost: When Bkav follows this strategy it means targeting the mass audience and the broad
target environment. In order to do this, Bkav has to optimize the operation process to reduce
costs thereby reducing overall costs. This strategy applies in the case where businesses operating
in the same environment and segment have no obvious differences. If the USP strong enough to
make a difference, Low Cost is the most effective USP.

Manufacturers tend to expand their distribution channels, finding new forms of access to
consumers. Retail telephone distribution chains are no longer the number one choice because of
the high cost of space and the dense distribution in the major cities. Establishing own sales chain
is also a way for Bkav to minimize the cost of distribution so that it can lower phone cost to
attract users. In order to compete well and attract more dealers to cooperate with them, Bkav
needs to offer a reasonable discount for the product to the store. This has to be a strong financial
resource that will last a long time.

Organic development: In the new form, for the first time, the linkage model is applied by Bkav.
Bkav will set up a separate distribution chain to proactively reach customers. Expanding the
foreign market is also a way to penetrate deeper into the middle class. Bphone 3 is expected to
launch in early October and will soon be on shelves later. With the linkage model, the latest
generation Bphone products will be sold simultaneously across all provinces in the country. The
device and features of the Bphone 3 with a midrange phone like the Oppo F9 or the new Xiaomi
Mi A2, will be launched in 2018. So, to compete with other products, the price of the Bphone 3
just around 7-9 million (lower than the price of the same product features of the opponent),
certainly many people are willing to spend money to buy. According to Bkav, the group has set
up a chain of stores linking districts across the country to distribute Bphone 3. On the Bphone
fanpage, Bkav announces that it has about 300 stores. This is the latest change in Bkav's sales

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strategy. Previously, the first Bphone launched in 2015 was only sold online. To Bphone 2, the
makers choose the Mobile World as the distribution system in the hope of reaching the target
customers. However, representatives of the company said that both the first generation Bphone is
not available in many provinces and cities. Establishing this chain could help Bkav overcome the
weakness of the lack of machines, lack of places to experience as the previous launch and reduce
the total cost. Sharing with social media, Nguyen Tu Quang, chairman of Bkav said, each
generation of Bphone has a specific mission. Bphone 3 is to conquer the belief of consumers. As
a result, the cost of the Bphone 3 will be lowered to attract consumers (but the features of the
Bphone 3 will be comparable to the products of Xiao and the same segment), this will be one of
the big advantage for Bkav in this segment of 7 million to 9 million dong.

(Bkav, 2018)

Table to evaluate factors through options

V: Can meet the require

X: Can not meet the require

?: Unclear

Key High quality Price (W) The Distribution The market of

strategic\Strategic product (S) competition channels (S) VietNam (O)
option comes from
rivals from
China (T)
Proposal 1: Price V V V (Can V V
and product compete)
development,
Hybrid strategy,
Strategic alliance
Proposal 2: Cost X V X (Can not V ?
leadership, Low- compete
Cost, Organic directly)

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development

Through the table above, viewers may find that proposal 1 meets more requirements on Bkav's
strengths as well as solves weaknesses from Bphone’s SWOT analysis from assignment 2.
Through which proposal 1 may be able to have more percentage of success when compared to
proposal 2. The way of evaluating the two proposal will be analysis carefully below by SAFe
criteria.

SAFe criteria for proposal 1:

Suitability is considered to be the most important element in the SAF strategic model, as a
suitable option would be a tool that helps the strategy do what the company wants it to do. In the
case of Bkav, suitability will be assessed against the strengths, weaknesses, opportunities and
threats that had identified in the Bkav SWOT model. The quality of the product is considered a
strong point of the Bphone, what's special about this is that the way the media communicate with
the press and the customers. BKAV is very smart when it comes to marketing tactics in the
minds of Vietnamese consumers who prefer domestic goods. It is a proud thing to have a phone
designed and built by Vietnamese people. Bphone has created a hot for public opinion on the
social media channels. In addition to the special Bphone's origin: BKAV's passionate product,
the Bphone is promoted as a high-quality phone, comparable to SamSung and Apple. Hybrid
strategy can meet and maintain the strength of the product that Bphone created through the
marketing process. In proposal 1, Bkav has signed a contract with Qualcomm to use 3G and 4G
technology. Bkav is a Qualcomm partner like Samsung, LG, Sony, HTC. As Bkav chose
Qualcomm's chip for BPhone, Qualcomm also supported Bkav in designing and testing their
chipmaking products. Working with Qualcom as a guarantee of Bkav's product quality as they
marketed it to the social media so users can trust the quality of the Bphone. The second factor is
about the price, this factor is the weakness of Bkav, the Bphone 2 was introduced in 2017, with
a sleek design, but the features were the same as those of competitors at the time, including high
capacity and midrange chips, but were too expensive with what it brings, so it can not attract
user. Proposal 1 have mentioned about the co- operate of Bkav with Mobile World, Mobile
World is a reputable retailer with good service quality and in line with Bkav's product standards.
This strategic cooperation agreement will create favorable conditions for users across the country

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to access and purchase Bkav's phones. This will save Bkav the cost of advertising and online
sales because the mobile world will help Bkav do this. So Bkav can reduce the price of Bphone
products to attract more customers. Thanks to the hybrid strategy, more specifically through the
partnership with Qualcom and the mobile world. Bkav will continue to produce high quality
products (as Bkav has already marketed) and have the distribution channel extended thanks to
the mobile world, thereby reducing the logistics costs to compensate of reduce the cost of
selling products. From the two factors: quality of the product equal to the competition, the price
weakness is overcome, the competition with competitors in the same segment as SamSung or
Xiaomi is possible.

Acceptability: Investors are those who carry out investment activities in different market
segments in different ways in order to obtain expected returns. Investors include both
institutional investors and individual investors. In each economy, investors play a very important
role, because they are the ones who exploit the investment opportunities in the economy, help to
supplement the resources for development investment, thus helping to promote the development
of company. In the financial market of Vietnam, investors are usually people who have savings
and how the allocation of these savings completely depends on their psychological state. Often
investors like to preserve, they do not like risk. In the Bkav case, this hybrid strategy is
absolutely suit to the characteristics of investor. The partnership with Qualcomm and the mobile
world was a success for Bkav in convincing its stakeholders. By partnering with Qualcomm and
the mobile world, Bkav will not have to worry about phone production and distribution, which
will support Bkav in terms of cost and performance, Bkav will not have to put all its costs into
the above activities, so that losses will be negligible unless Bkav operates and distributes itself.
Typically, co-operation will help the company recover capital faster than self-employment, and
the risk of failure is lower. So the acceptant level in proposal 1 is quite high.

Feasibility: On this proposal, in terms of resource factors. The first is technology and system, it
took 5 years to research and perfect the product. The company has designed everything from
internal motherboards, including many internal component manufacturers such as Qualcomm or
Sharp. Bphone Operating System, also known as BOS, is customized Bkav itself from Android
5.1 with many notable applications such as Bchrome and Btalk. In particular, the electronic
components and boards of the Bphone has been ordered by this unit and cooperated with

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international partners who have collaborated with many famous phone companies such as Apple,
Samsung, HTC.

All human resources of Bphone design engineers are trained in Vietnam. These engineers were
interned at the company from their fourth year of college, and then recruited and continued
training at the company. Bkav encourages the company to try to train its own human resources
and should be confident that the company can actively create that human resource. The working
environment in Bkav is very good, meeting the demand for material and workplace safety.

Having a quality product through cooperation with well-known foreign partners, the distribution
process, bringing the product closer to the customer has also benefited greatly from the mobile
world. These two factors will help Bphone increase the number of products sold, thereby quickly
recovers capital and reduced price of the product but the quality of the product will be
guaranteed also help Bkav compete with its rivals by adopting a hybrid strategy. Therefore, the
feasibility of this proposal when applied will be very high.