UEH UNIVERSITY

COLLEGE OF BUSINESS

SCHOOL OF INTERNATIONAL BUSINESS – MARKETING

ESSAY

GLOBAL STRATEGIC MANAGEMENT

Lecture: Dương Ngọc Hồng

Course number: 23D1BUS50313908

Student: Bùi Nguyễn Anh Minh

Specialization: International Business

Batch – Class: K47 – IBC06

ID: 31211023740

Ho Chi Minh City, April 17th, 2022

Contents
Question 1:...................................................................................................................1
a. What is Global Strategic Management?.............................................................1
What does strategic management mean for multinational corporations
(MNCs)?.................................................................................................................... 1
b. Please give your opinion about this statement “Small-scale enterprises do not
need strategic management”....................................................................................3
Question 2:...................................................................................................................4
a. Distinguish between low-cost strategy and product differentiation strategy
(in terms of strategic goals, visions and missions)..................................................4
b. Provide two examples (low-cost strategy and product differentiation
strategy) to support the answer...............................................................................7
Example about low-cost strategy: Ryanair.........................................................7
Example about product differentitation strategy: Tiffany & Co......................9
Question 3:.................................................................................................................10
a. How does the COVID-19 pandemic affect the tourism industry in Vietnam
(transportation, hotels, services…)? Give specific data to illustrate Vietnam’s
tourism industry (before and after the COVID-19 pandemic)...........................10
Table 2.1: Number of passengers.........................................................................11
Table 2.2: Hotel-occupancy rate...........................................................................12
b. What are the main strategies that the tourism industry in Vietnam apply to
survive and recover after the pandemic (both domestic and international
market) to adapt and recover after the pandemic?.............................................14
Reference:.................................................................................................................... 19
 1

Question 1:
a. What is Global Strategic Management?
Global strategic management is a method of managing an organization in the face
of the global business environment's complexity and interconnectedness. Analyzing an
organization's external environment, identifying attack opportunities and threats, and
establishing plans to compete effectively in the global marketplace are all part of it.
Understanding differences in culture and how they affect corporate operations is an
essential element of Global Strategic Management. Organizations need to remain
aware of these distinctions and evolution their strategy accordingly. For example,
because of cultural differences, a product that is successful in a particular part of the
world may not be successful in another.
A global mindset is another essential component of Global Strategic
Management. This requires an in-depth understanding of the global economy and a
capacity to navigate it successfully. Organizations have to be able to operate in a
variety of marketplaces as well as understand how multiple economic and political
issues affect the way they operate.
Global strategic management includes building strong alliances and
collaborations with other organizations. Organizations can share resources,
knowledge, and experience through partnerships to create a more efficient global
business environment. Joint ventures, engagements and acquisitions, and strategic
alliances are examples of this.
In conclusion, in today's global corporate climate, Global Strategic Management is an
important tool for corporations. It entails understanding cultural differences, adopting
a global perspective, and forming alliances to gain an edge over competitors.
Organizations can successfully reach the challenging global economy and achieve
long-term success by employing these strategies.

What does strategic management mean for multinational corporations (MNCs)?

Global strategic management is an important component and has enormous

implications for multinational corporations (MNCs). It refers to the process of
developing, implementing, and assessing strategies to enable the organization to
effectively achieve its objectives. In addition, it is a complex process that involves
 2

dealing with a number of issues that arise as a result of their multinational business,
including managing the cultural, legal, and regulatory environment, fluctuations in
exchange rates, language, and communication barriers, and competition from local
competitors. Moreover, global strategic management supports these organizations in
determining and assessing possibilities, evaluating risks, and maximizing earnings in
multiple locations.
Successful global strategic management strategies will provide multinational
firms with a variety of distinct meanings. The first meaning suggests that multinational
firms will expand globally. This is a crucial component of strategic management
which helps in discovering new markets, the decision-making of appropriate entry
techniques, and developing a market presence over time. This expansion includes
cross-border distribution, acquisition, and alliances, as well as exploiting local
competencies and resources for integration into global value chains. The next meaning
is global integration; strategic management enables multinational corporations to
evaluate their activities across several nations by standardizing corporate procedures
and practices, decreasing redundancy, and optimizing cost efficiency. This
collaboration helps to ensure that their global operations run smoothly and efficiently
across multiple nations. These multinationals maintain their competitive advantage by
recognizing the fundamental capabilities that offer them a competitive advantage in
the market. They can use these advantages to penetrate new markets, develop new
products and services, and increase brand loyalty. Another significant benefit of
incorporating multinational corporations within the global strategic management
process is increased corporate social responsibility. Implementing social responsibility
efforts in line with corporate goals can also strengthen multinational firms' image and
reputation among stakeholders, particularly the local community's direction. Finally,
when a multinational corporation employs good global strategic management, it will
be able to manage risks such as geopolitical threats, disruptions to the supply chain,
currency fluctuations, and so on.
Therefore, Strategic Management is a crucial aspect for multinational
corporations when it comes to carrying out procedures related to their global
operations. Strategic management considers worldwide expansion, global integration,
competitive advantage, corporate social responsibility, and risk management, all of
 3

which contribute to MNC profitability and competitiveness. Given the complexities of

international operations, successful strategic leadership necessitates the capacity to
negotiate with multiple countries' political, cultural, and economic situations.
b. Please give your opinion about this statement “Small-scale enterprises do not
need strategic management”
I completely disagree that small enterprises do not require strategic management.
Many studies have found that long-term adoption of strategic management methods
provides a clear direction on how a company will be conducted and that this has the
capacity to determine the integrity of organizational sustainability. In fact, strategic
management is critical for small firms, and maybe even more so for large
organizations, because only excellent strategic management allows small enterprises to
mitigate risks from uncontrolled economic swings. Furthermore, small enterprises
encounter a lot of obstacles that necessitate strategic management. Among these
hurdles include limited resources, a lack of brand recognition, strong rivalry, and
limited access to funding.
Strategic management can help small businesses overcome these challenges and
succeed in their respective industries. Small businesses have limited resources
compared to large corporations. Therefore, they need to be strategic in how they
allocate their resources, including finance, personnel, and time. Strategic management
enables small businesses to prioritize their resources and enact strategies to maximize
their use and impact. In addition to resource constraints, small businesses often find it
difficult to gain recognition and credibility in their respective industries. Strategic
management can help small businesses develop and execute strategies that improve
their visibility and reputation, such as targeted marketing campaigns, connections, and
partnerships with larger businesses as well as building a strong online presence.
Furthermore, with these organizations operating in a highly competitive and driven
environment, strategic management can assist them to differentiate themselves from
competitors. Strategic management may help small enterprises find their unique
selling characteristics and build plans to capitalize on them. Small enterprises
frequently have difficulties in obtaining cash to fund their operations and growth. They
can benefit from strategic management by identifying finance options such as
microloans, grants, and crowdsourcing.
 4

For these reasons, it is clear that small-scale businesses need strategic

management to succeed in their respective industries. Strategic management enables
small businesses to make informed decisions about their operations, marketing and
branding strategies, finances, and growth. That way, small businesses can effectively
compete with larger corporations and succeed in their respective industries. In
summary, the statement "Small-scale enterprises do not need strategic management" is
wrong and does not reflect the reality of today's competitive business environment.
Question 2:

a. Distinguish between low-cost strategy and product differentiation strategy (in

terms of strategic goals, visions and missions).

The two main strategies in Porter's typology and two broad categories of
competitive strategies that corporations might use to obtain an advantage in their
respective industries are low-cost strategy and differentiation strategy. Both tactics are
viable, with their own set of advantages and disadvantages. The decision between
these strategies will be influenced by a company's resources, goals, and industry
competitive landscape. Despite certain similarities, these two tactics are diametrically
opposed.

Low-cost strategy Product differentiation strategy

The A strategy based on competition A competitive method in which a
definition in which a corporation seeks to corporation seeks to produce
offer lower-cost products or distinctive features, qualities, or
services than competitors while services that distinguish its
maintaining an acceptable degree products or services from those of
of quality. This strategy results in competitors. To make its products
cheaper prices for clients, as well more appealing, a corporation
as high-value propositions that must invest in research and
allow the organization to acquire a development, product design,
competitive advantage. marketing communications, and
branding.
 5

The goals - Increasing market share: can - Unique Products: create

assist the organization to distinctive goods or services to
maximize the profit margin if the set your business apart from the
low-cost strategy's pricing is competition. Companies can
effectively maintained. stand out in the market and attract
Furthermore, the corporation can clients who value exclusivity by
use its position in the market to selling products with distinctive
negotiate better supplier contracts features or traits.
and achieve more advantageous - Expanding the Market: by
raw material terms, resulting in a attracting customers who are
lower cost of goods sold. willing to pay a higher price for a
- Attract a large consumer base: distinctive or high-quality
Companies can attract price- product. A larger consumer base
sensitive customers that value and improve sales and revenue
affordability over quality by may result from this.
offering products or services at - Strong Brand Image:
reduced prices. These clients may Businesses pursuing
be more likely to buy from the differentiation seek to build a
company, resulting in higher sales powerful brand image that
and revenue. consumers will associate with
- Economies of Scale: Companies special attributes or
that use a low-cost approach strive characteristics. Companies can
for economies of scale, which enhance recurring business and
implies that they want to expand long-term profitability by creating
production levels in order to a strong brand that engenders
produce more income while client loyalty.
minimizing costs. This may
contribute to better production
efficiencies, lower unit costs, and
increased margins of profit.

The Adopting a low-cost strategy is to Adopting a product

 6

visions be the lowest-cost producer and differentiation strategy is to

maintain a cost advantage over its create a superior product or
competitors. service that stands out from its
competitors.
The Offer items or services at the The objective is to create and
missions lowest possible cost while provide high-quality products and
retaining a decent degree of services that set them apart from
quality. It focuses on cutting competitors. It focuses on
costs, such as production costs, developing a brand image based
supply chain costs, and other on the distinctive traits or
operating expenses. Companies attributes of the product or
that use a low-cost strategy strive service. This enables businesses
to reduce expenses while to charge higher prices,
increasing efficiency. potentially increasing profit
margins. Superior design, unique
features, great customer service
or quality, environmental
sustainability, or ethical
considerations can all be used to
differentiate a product.
Companies that use a
differentiation strategy spend on
R&D, branding, and marketing in
order to create unique and
distinctive products that will
appeal to customers who value
quality and originality.

Low-cost strategies, such as decreasing overhead, optimizing supply chains, or

outsourcing production, are frequently used in low-cost initiatives. The emphasis is on
increasing operating and manufacturing efficiency while upholding quality
 7

requirements. Product differentiation strategy, on the other hand, entails spending in

R&D, design, branding, and marketing in order to create a distinctive and superior
product or service. The emphasis is on developing a product or service that offers a
distinct value proposition to the customer.
In conclusion, low-cost strategy and product differentiation strategy are two
distinct techniques for gaining a competitive edge in a specific market. Although these
strategies have different aims, visions, and missions, they both attempt to improve the
company's overall profitability and market position. Companies that use either strategy
must evaluate its suitability for the specific competitive climate, market conditions,
and target client categories.

b. Provide two examples (low-cost strategy and product differentiation strategy)

to support the answer.

Example about low-cost strategy: Ryanair

Ryanair, an Irish low-cost airline, became Europe's biggest airline in 2016,

carrier over 130 million passengers per year and serving a greater number of foreign
passengers than any other airline. “Ryanair's "lowest fare/lowest cost" model is
allowed them to sell in large quantities and serve the greatest number of consumers,
including price-sensitive corporate customers. As a result of doing so, Ryanair
increased its revenue and earnings by capturing more consumer excess.
Ryanair's comparative advantage in the airline sector is primarily the trick of
unbundling for basic air travel parts of passengers, in addition to delivering the lowest
airfares feasible. In this regard, rather than rolling out single pricing for all segments,
Ryanair provides a few options for consumers with varying needs. Because consumers'
value proposals vary, even the same customer segment may have distinct value views.
In order to serve its passengers more effectively and efficiently, Ryanair associated
price with value rather than a product.
The strategic pricing approach is founded on value. The term value can be
described as overall consumer satisfaction, which is the usefulness received from the
service. Because value is solely measured in terms of consumer happiness, it is highly
 8

subjective. Value is created and sold through goods that are launched and conveyed in
response to client requests and needs.
Furthermore, product bundling is a common pricing segmentation strategy.
Companies typically elect to sell products or services in a package by combining them
for greater profitability, rather than pricing each thing separately. The majority of
businesses employ the best bundling strategy. In optimal bundling, products are
purchased independently, but the option to purchase them in a bundle at a lower price
than if purchased separately is also accessible. Ryanair shifted from selling a
product/service to a value to customers as a result of value-based pricing attempts and
unbundling strategy.
Ryanair's marketing attempts to offer value to customers are both traditional and
digital. Ryanair has raised its advertising spend in 2014 while shifting the promotional
emphasis from price emphasis to brand-led initiatives. Michael O'Leary, the business's
CEO, stated that while Ryanair's low-cost messages were successful, the company will
now promote additional attributes such as timeliness, improved customer service, and
family-friendly tools through fresh advertising campaigns. Onboard advertising, which
includes adverts on the Aero panels and seatbacks, is one of Ryanair's promotional
techniques for increasing brand recognition. Ryanair, on the other hand, makes good
use of social media marketing. Ryanair has official pages on Facebook, Twitter,
Instagram, LinkedIn, Google Plus, and YouTube, in addition to the official Ryanair
smartphone app. These channels allow Ryanair experts to engage directly with
customers. In addition to publishing advertising campaigns to tell clients about current
Ryanair offers, these social media channels enable passengers to contact the firm in the
event of a flight update, such as cancellation, delay, missing items, damaged luggage,
and so on.
Ryanair explicitly guarantees the lowest fare to passengers, stating that if a
passenger finds a cheaper option from another airline for a given route, Ryanair will
pay "double the difference" (airfare paid to Ryanair plus the airfare quoted by other
carriers). Customers must submit a form within one hour of making their booking in
order to get a "double the difference" payment from Ryanair. Ryanair further states
that "Terms and Conditions" apply to the guaranteed lowest fare. Customers can learn
more about the general terms and conditions of Ryanair carriage by clicking on the
 9

underlined "Terms and Conditions" link. A transparent pricing policy can be thought
of as an effective middleman that fosters a trusting relationship between the customer
and the company.”
Increasing revenues is one of every company's strategic goals. However, increasing
revenues is insufficient because companies rely on profits to survive in a competitive
market. Ryanair's cost-cutting tactics also contribute to the company's goal of long-
term profitability. Ryanair's streamlined fleet of Boeing 737-800 aircraft helps to keep
expenses low. Ryanair was able to teach all employees (pilots, flight crew, mechanics,
etc.) about a single type of plane, which lowered training expenses and saved time for
the company. Furthermore, as with other low-cost carriers, Ryanair employees are
typically at the start of their careers, hence the company pays lower compensation.
Furthermore, Ryanair is a point-to-point short-haul low-cost carrier that mostly
operates in Europe. As a result, the average trip duration is roughly 1.8 hours, allowing
Ryanair to operate its aircraft numerous times per day while saving money.
Furthermore, Ryanair operates at underutilized airports rather than big hubs, allowing
the company to keep expenses low.
Following that, Ryanair's public embrace of a low-cost strategy has aided the
company's establishment as a major participant in the European aviation market.
Ryanair has been able to offer low-cost flights to a wide spectrum of clients by
focusing on cost reduction, efficient operations, and value-for-money products, and as
a result, has dramatically increased its market share. Ryanair's low-cost strategy has
enabled it to gain a competitive advantage over its competitors and preserve
profitability even in challenging economic situations. By providing low-cost flights to
a large number of customers, the airline has been able to broaden its reach, improve its
market share, and boost its earnings. As a consequence, the low-cost approach remains
a key component of the company's long-term profitability and a model for other low-
cost airlines to emulate.
Example about product differentitation strategy: Tiffany & Co
Tiffany & Co. is a globally recognized company noted for its rare, high-quality,
and elegant jewelry. The company is well-known for its distinct product diversification
strategy, which has helped it to establish itself as a top premium brand in the sector.
 10

Tiffany & Co distinguishes itself from other jewelry businesses by producing well-
crafted, timeless items that are both fashionable and high-quality. The materials used
by the company are handpicked for their uniqueness and rarity, including diamonds,
gold, silver, and platinum. Furthermore, their jewelry designs are exquisite and
refined, with meticulous features [details] x that are unique to Tiffany & Co.
Another feature that distinguishes Tiffany & Co from its competitors is its
signature blue box. Tiffany Blue packaging has become synonymous with the
company and is one of the most recognizable in the world. The blue box symbolizes
the company's tradition and dedication to providing great quality and service.
In addition, Tiffany & Co has a solid reputation for ethical sourcing and
production processes. The company only employs conflict-free diamonds and other
sourced materials, which has contributed to the brand's reputation as a responsible and
trustworthy luxury brand.
Tiffany & Co's product differentiation strategy's success may be linked to the
company's ability to create and maintain a strong brand identity that connects with its
target demographic. The corporation has created a distinct and recognizable brand
personality that is connected with luxury, exclusivity, and a dedication to quality. By
focusing on these basic ideals, Tiffany & Co has built a devoted customer base and
maintained its premium status in the market.
Furthermore, the brand has been successful in maintaining the classic and
timeless beauty of its jewelry while keeping up with shifting fashion trends. This has
enabled them to broaden their target market and capitalize on the growing trend of
self-purchasers, who are often younger and prepared to pay a premium for high-
quality, exclusive products.
Finally, Tiffany & Co.'s product differentiation strategy has been effective
because of its famous blue box, superior craftsmanship, ethical sourcing and
production procedures, and ability to develop a strong brand identity that resonates
with its target demographic. The company has been able to preserve its standing as a
top luxury brand and prosper in a highly competitive business by producing distinctive
and high-quality products that are truly unique.
Question 3:
 11

a. How does the COVID-19 pandemic affect the tourism industry in Vietnam
(transportation, hotels, services…)? Give specific data to illustrate Vietnam’s
tourism industry (before and after the COVID-19 pandemic).
The COVID-19 epidemic has had a significant influence on the global tourism
industry, including Vietnam. Vietnam's tourism sector, as a popular tourist destination
in Southeast Asia, has been badly impacted by the epidemic in a variety of ways,
including transportation, hotels, and other tourism-related services.

Table 2.1: Number of passengers

1
Includes both inbound and outbound flights. International visitors accounted for 18.5
million in 2019 and 3.7 million in 2020
[Source: CBRE; CAA of Vietnam; Vietnam’s Ministry of Culture, Sport, and
Tourism]
Vietnam's aviation industry was one of the fastest expanding in Southeast Asia
prior to the COVID-19 outbreak. “According to the Civil Aviation Authority of
Vietnam (CAAV), the country recorded 96 million passengers in the first 10 months of
2019, an increase of 12.9% over 2018. International passengers were 18.5 million, a
10% increase over the previous year. Before the epidemic, Vietnam's airlines,
including Vietnam Airlines, Vietjet Air, Bamboo Airways, and Jetstar Pacific, were
quickly expanding. 
 12

However, the epidemic COVID-19 had a huge impact on Vietnam's aviation

industry. As a result of the epidemic, the number of passengers dropped considerably,
and airlines were forced to cancel or cut their flight schedules. According to the
CAAV, Vietnam served 53 million passengers in the first 10 months of 2020, a 45%
decrease from 2019. International passengers were 3.7 million, an 80% decrease from
the previous year. Domestic passengers accounted for 49.3 million, a 36% decrease.
Vietnam Airlines, the country's main carrier, recorded a loss of VND 10.7 trillion
(USD 464 million) in 2020 due to dwindling passenger numbers and flight
cancellations. Other carriers, including Vietjet Air and Bamboo Airways, have also
suffered huge losses.

Table 2.2: Hotel-occupancy rate

[Source: CBRE; CAA of Vietnam; Vietnam’s Ministry of Culture, Sport and Tourism]
Prior to the COVID-19 outbreak, Vietnam's hotel business was expanding
rapidly. In 2019, the country welcomed nearly 18 million international tourists, the
vast majority of them staying in the country's key tourist sites of Ho Chi Minh City,
Hanoi, and Da Nang. According to the Vietnam National Administration of Tourism
(VNAT), the country has 32,000 lodging establishments and 10.4 million rooms.
Sixty-seven percent of these were classed as conventional hotels, while thirteen
percent were classified as resorts. In 2019, Vietnam's hotel rates of occupancy were
61%. Hotel occupancy rates were 81% in Ha Noi and 69% in Ho Chi Minh City. The
 13

average room rate grew as well, hitting VND 1.44 million (USD 62) per night, an
8.2% rise over the previous year. Hotel revenue per available room (RevPAR) in
Vietnam was VND 1.02 million (USD 44), up 15.3% from 2018.
However, the hotel business in Vietnam, as in many other countries, suffered a
substantial drop as a result of the COVID-19 pandemic. The number of international
tourists coming to Vietnam in the first quarter of 2020 plummeted by 37.8% compared
to the same period the previous year, according to the Vietnam National
Administration of Tourism. Due to restrictions on domestic and international travel,
many hotels in Vietnam had to close or lay off workers, resulting in a major reduction
in hotel occupancy rates. In Ho Chi Minh City and Hanoi, Vietnam's two most popular
tourist destinations, the average room occupancy rate of five-star hotels plummeted to
6% in April 2020, down from 70% the previous year. To survive, several hotels and
resorts across the country were compelled to close temporarily or convert to alternate
enterprises.
During the epidemic, the number of tour guides in the country decreased from
roughly 36,000 to 8,000, according to VietnamNet. The pandemic has resulted in a
78% fall in the number of tour guides in Vietnam. As a result of the pandemic, the
restaurant industry in Vietnam saw a major drop in sales. According to a Q&Me poll,
over 70% of restaurants in Vietnam had to close or limit their operations owing to the
pandemic. Many restaurants that stayed open saw a considerable loss in their client
base as a result of the drop in tourism and the deployment of social distancing
measures. According to the Vietnam National Administration of Tourism, the
restaurant industry's total income in 2020 will be 61.3% lower than in 2019. During
the epidemic, the taxi sector in Vietnam saw a major drop in business. According to
VnExpress, the overall revenue of Vietnam's taxi business fell by half in the first half
of 2020 due to a drop in demand for transportation services.
To further understand how the covid-19 pandemic has affected Vietnam's
tourism economy, we will examine the consequences on Can Tho, a province with a
developed tourism industry. Can Tho is the most modern and developed city in
Vietnam's Mekong Delta area, and one of the five cities directly under the Central
Government of Vietnam. Many favorable circumstances for the effective growth of the
tourism industry can be found in Can Tho. Geographically, it is positioned in a traffic
 14

hub that connects the region's provinces. Can Tho has a variety of tourism resource
advantages, spanning from natural to man-made tourism assets, allowing this
destination to provide a diverse range of tourism experiences to both domestic and
foreign visitors.
Prior to the epidemic, Can Tho had received over 8.8 million visitors, earning
more than VND 4435 billion, accounting for approximately 5% of the city's GDP. Can
Tho City had created more than 200 restaurants and catering enterprises, 275 tourist
accommodation attractions, 22 businesses family-owned tourist attractions, 19
homestays, and 59 international and domestic travel to satisfy tourism demands prior
to COVID-19. Prior to COVID-19, the tourist industry worked to build an appealing
destination image by enhancing tourism infrastructure and diversifying hospitality
companies such as lodging, dining places, sightseeing, tour guides, and so on.”
“Unfortunately, the ongoing COVID-19 pandemic has caused the collapse of
numerous sections of the local tourism system. Tourists visiting Can Tho City were
expected to total 5,605,865 in 2020, a 36.8% decrease from the previous year and
60.9% of the year's target. Accommodation tourists totaled 2,020,145 arrivals, a 32.8%
decrease over the same period in 2019, accounting for 61.4% of the year's target.
International visitors, in particular, were anticipated to account for 111,420 arrivals, a
72.7% decrease from the same period in 2019, reaching 25.3% of the year plan.
Domestic tourists were 1,908,725 arrivals, a decrease of 26.5% over the same period
in 2019, accounting for 67% of the year's target. Outbound tourism packages were
given for 5550 tourists to travel abroad, representing a decrease of 77.6% from the
same period in 2019, reaching 20.6% of the year plan. Total tourism revenue was
anticipated to be more than VND 3169 billion, a decrease of 28.6% from the same
period in 2019, reaching 62.1% of the year plan.”Due to the impact of the COVID-19
epidemic, approximately 45.9% of direct workers in Can Tho City were forced to
leave their positions in the tourism business in 2020. Despite the highly anticipated
2020 tourist targets, the first wave of COVID-19 resulted in a significant decrease in
the number of international visitors, while subsequent waves of COVID-19 put the
local tourism industry under considerably greater strain.
 15

b. What are the main strategies that the tourism industry in Vietnam apply to
survive and recover after the pandemic (both domestic and international market)
to adapt and recover after the pandemic?

The domestic market.

 “Domestic travelers should be prioritized: With the collaboration of local

governments, online travel companies, attractions, hotels, and airlines, local
demand can be rejuvenated by focusing on new destinations. Outdoor tourism,
which includes sun, beaches, mountains, and nature, was a popular choice
among Vietnamese visitors. To further capitalize on the domestic opportunity,
operators must prioritize affordability while maintaining high-quality products
and experiences.
 To reestablish demand, consider new price models: 
Rebuilding demand and increasing volume using discounts and presales.
However, the crisis has compelled businesses to abandon their traditional
commercial strategies. Historical booking patterns and trends, which were
previously regarded as critical reference points for pricing optimization and
yield management, may no longer be as useful. The dilemma in this situation of
diminished demand is that, while price cuts are important, they may also be
detrimental. In this context, businesses should look at options to bundle
products, which can lead to upselling and cross-selling, as well as diversify
their revenue stream and improve premium products and pricing. 
Five-star hotels in Hanoi and Ho Chi Minh City, for example, may offer whole
"staycation" packages for families, including home pickup by luxurious car, a
suite, and meals and drinks discounts. Tourism companies and hotels might
collaborate to offer all-inclusive trip packages that include flights, rail tickets,
limousine and bus services, and lodging. Other businesses could profit from the
growing demand for luxury and outdoor activities such as boat cruises and farm
stays. 
As demand and confidence rise, operators will be compelled to return to a more
dynamic pricing model based on measures such as hotel occupancy and
domestic-air-travel passenger numbers—and how they progress toward pre-
 16

pandemic levels. This will then allow enterprises to fine-tune effective pricing
mechanisms, particularly around significant local holidays such as Tet (the
Vietnamese New Year). Dynamic pricing models and the revenue-management
function will need to be revisited in the future, based on three new axioms:
traveler segments will not be the same for a long time and will be a stronger and
more diverse domestic mix; demand elasticities will be different, with health
concerns playing a more influential role in decision making; and demand will
remain volatile.”

The international market:

 The time has come for digital (truly):

Consumer reliance on digital travel-related bookings had been increasing even

before the pandemic. In 2018, internet travel activity accounted for 19% of the
entire market size for tours and activities. The pandemic has made mobile and
digital tools even more important. Strategic partnerships, such as online travel
firms offering ticket-booking services via instant messaging and social media
platforms, could provide a potential for increasing market penetration. 

“Simultaneously, travel businesses should redesign their web touchpoints and

experiences to the better client experience. This is already happening: the
Vietnam National Administration of Tourism (VNAT) website includes virtual
tours of its most popular places, and some tour guides have scheduled live
online excursions for overseas consumers. Furthermore, in October 2020, a
commercial named "Why not Vietnam" appeared on CNN to boost international
traffic to the website, while on a domestic level, a reality show with the same
name featured weekly online travel photo contests to engage viewers.

Companies may also consider adding digital tools in new locations throughout
the consumer journey. They must acknowledge that variables supporting client
loyalty may have shifted; for example, near-term uncertainty may imply that the
flexibility to cancel a reservation is more important than brand choice or
pricing. Taking this into consideration, businesses might enable customers to
create their own itineraries by utilizing connected digital tools that make it
 17

easier for them to change or cancel their arrangements. Solutions and

regulations that allow for choice and control will assist to foster the long-term
trust and confidence required to get travelers back on the road and in the air.

 Set the stage for inbound demand:

Tracking the emergence of travel bubbles could help travel players capture
early outbound demand. This is especially important for Vietnam, as the bulk of
visitors come from adjacent regions with strong economic linkages and low
transmission rates.
To capture early international-travel demand, travel companies will need to be
adaptable and nimble in this context—and be prepared to establish tight health
and safety measures that meet the requirements of both home and destination
security authorities. However, depending on travel bubbles cannot be a short-
term strategy, as international arrivals are likely to remain low in 2021, and
foreign demand will not rebound to 2019 levels until 2025.

 Reimagine the traveler experience beyond lodging—and redistribute tourism

investments to more unusual and diverse destinations:

Travelers all across the world are personalizing their travels with destination
activities. Tourism spending is trending away from lodging and toward
activities, which is also true in Vietnam. According to research provided by
Vietnam's General Statistics Office, Vietnamese visitors have allocated fewer
budgets for lodging in recent years, accounting for around 15% of travel
expenses in 2019, down from 23% in 2011.

Travelers are saving money for destination experiences rather than spending it
on luxury accommodations. Many tourists book activities before they travel,
implying that the in-destination experience has a greater influence on overall
tourist decision-making. Many adventurous activities, such as cave exploration,
highland hiking, secluded island stays, water sports, and cuisine festivals, have
become the primary motivation for people to visit an area.

In Vietnam, new examples of efforts targeted at establishing a distinct

experience—rather than specialized infrastructures—have arisen, such as the
 18

growth of Ho Chi Minh City's "night economy," and diverse marketing from
the Binh Duong province to highlight its festivals as primary attractions. VNAT
is also involved in this initiative, making farm stays in hilly locations an axis
for the development of more indigenous experiences. Meanwhile, other regions
are marketing unique experiences as well: Dalat promotes hiking and camping
sites, Mui Ne promotes golf and water sports, and Ninh Binh and Phong Nha-
Ke Bang promote natural activities.

Local operators, who frequently trail behind large travel businesses in terms of
resources but are more agile when it comes to planning tailored activities, can
harness increasingly popular internet players to interact directly with customers
and provide these possibilities. International online travel agencies like
TripAdvisor, as well as local players like Traveloka and Triip.me, have been
developing dedicated "experience" platforms to inspire users and allow them to
choose the most suitable tours by offering a variety of appealing options for
destination adventures. Tourism corporations may alter their focus from
building resorts and selling sightseeing tickets to creating extraordinary
experiences and leveraging these platforms to capitalize on travel-experience
trends.”

 Rethink the role of the government in tourism:

In most nations, modernizing the tourism business will require industry

professionals to collaborate with industry associations and governments.
Vietnamese tourism administrators have an exciting opportunity to reimagine
their roles and lead the sector through recovery and beyond—first, by
increasing domestic demand to compensate for lost international travel income,
and second, by promoting Vietnam's image as a country that has managed the
pandemic fairly well. Three things must happen in order for this to happen:

“In the short term, the government and industry organizations must secure
operator survival. The government can try out novel and sustainable financing
solutions like hotel revenue pooling, in which a selection of hotels with greater
occupancy rates share revenue with others. This would enable hotels to
 19

optimize variable expenses while also reducing the need for government
stimulus measures.

In the medium term, government-backed digital and analytic transformation is

required, particularly to level the playing field for small and medium-sized
businesses, which accounted for more than half of all travel suppliers in 2018. It
is vital to encourage and assist local operators in adapting to the need for online
travel services in order for them to remain competitive. The government can
play an important role as a matchmaker, connecting suppliers with distributors
and intermediaries to produce packages appealing to a specific sector of
tourists, and then using tourist engagement to provide more analytical insights
to travel intermediaries. This capability enables online travel agencies to vary
their offers by giving more off-the-beaten-path experiences. The platforms of
the Singapore Tourism Analytics Network (STAN) and Tourism Exchange
Australia (TXA) demonstrate how this mechanism can work at scale.

Finally, Vietnam has a great opportunity to increase its popularity as an

adventure destination. Governments and industry associations can use the
country's overall momentum, as well as the anticipated revival of international
travel, to stimulate demand. According to our research, adventure is the most
sought-after travel trend in the Asia-Pacific area, and Vietnam is ideally
positioned to capitalize on this trend. Similarly, investments are likely to shift
away from large-scale development projects like Phu Quoc and Nha Trang and
toward small- and medium-scale projects and cities that offer specialized
services such as Vietnam sports tourism, medical tourism, and even agricultural
tourism.”

Reference:

[1] BySakshi, P. (n.d.). Concept of global strategic management - talentedge learning

series. Talentedge. Retrieved April 17, 2023, from
https://talentedge.com/blog/concept-global-strategic management/?
fbclid=IwAR1smkpAzq0we27W1hU7XJoQrUCcDtwcIowCyOvUJdb4l8RNxwA2rb
Q53cg
 20

[2] Walton, A. (2023, March 2). When does a low-cost strategy beat differentiation?
Competitive Intelligence Alliance. Retrieved April 17, 2023, from
https://www.competitiveintelligencealliance.io/when-does-a-low-cost-provider-
strategy-beat-a-differentiation-strategy/?
fbclid=IwAR3TCxjdH1FaY2CnSt_EK4WhBERYFDPNR1asHbcJ33IP4PEp4e5bmQ
4eOFU
[3] Tom. (2023, March 22). 10 examples of goals cost leadership companies should
set now. Dividends Diversify. Retrieved April 17, 2023, from
https://dividendsdiversify.com/cost-leadership-companies-goals/?
fbclid=IwAR1T3iO0_aHvui9KpxBmHteQcnbznHagJCHzjmFx4iO-X-ZJPq4J26Lft9c
[4] 13 amazing differentiation strategy examples (in 2022). mktoolboxsuite.com.
(2022, April 15). Retrieved April 17, 2023, from
https://mktoolboxsuite.com/differentiation-strategy-examples/?
fbclid=IwAR3oqfANW_Nb95CfaMIgDFRawD2FpYb2pVdHfbxXWxHJn5dz-
uTW_yX3b1E

[5] Nguyen, M.-N. (2022, April 19). Vietnam: Covid-19 impact on hotel occupancy
rate 2020. Statista. Retrieved April 17, 2023, from
https://www.statista.com/statistics/1227924/vietnam-impact-of-covid-19-on-hotel-
occupancy-rate/?
fbclid=IwAR3TCxjdH1FaY2CnSt_EK4WhBERYFDPNR1asHbcJ33IP4PEp4e5bmQ
4eOFU
[6] Strategic pricing practices: Ryanair example - srce. (n.d.). Retrieved April 17,
2023, from https://hrcak.srce.hr/file/343876
[7] Glevie. (2018, December 19). Tiffany & Co.- strategy, Innovation and increasing
sustainability. MFBrands. Retrieved April 17, 2023, from
https://mostfavbrands.com/2018/12/19/tiffany-co-strategy-innovation-and-increasing-
sustainability/?
fbclid=IwAR1mEU33DYYmydUluK1R6BKdu81yUZ7x0fGnYbVqzo6key5Zfcd7ld-
QRVg
[8] Guest. (n.d.). Tiffany & Co Strategic Management. pdfcoffee.com. Retrieved April
17, 2023, from https://pdfcoffee.com/tiffany-amp-co-strategic-management-pdf-
 21

free.html?
fbclid=IwAR0gS2JE3oUub4I07IcGy88Fu7bilBQPSUGcTfvmMrRpOUxqE0nyqbIw
Q-c
[9] Huynh, D. V., Truong, T. T. K., Duong, L. H., Nguyen, N. T., Dao, G. V. H., &
Dao, C. N. (2021, November 5). The COVID-19 pandemic and its impacts on tourism
business in a developing city: Insight from Vietnam. MDPI. Retrieved April 17, 2023,
from https://www.mdpi.com/2227-7099/9/4/172?
fbclid=IwAR1mEU33DYYmydUluK1R6BKdu81yUZ7x0fGnYbVqzo6key5Zfcd7ld-
QRVg
[10] Constantin, M., Francois, M., & Le, T. (2021, March 19). Reimagining tourism:
How vietnam can accelerate travel recovery. McKinsey & Company. Retrieved April
17, 2023, from https://www.mckinsey.com/featured-insights/asia-pacific/reimagining-
tourism-how-vietnam-can-accelerate-travel-recovery?
fbclid=IwAR3BTVpcZfieFoS_jl3sAcWgxs_U8NK5xNPlLHKiLvfmdPnSvVpOR3qh
zCs
[11] Triển Vọng Phục Hồi Của Ngành Hàng Không Trong Năm 2022. General
Statistics Office of Vietnam. (n.d.). Retrieved April 17, 2023, from
https://www.gso.gov.vn/du-lieu-va-so-lieu-thong-ke/2022/05/trien-vong-phuc-hoi-cua-
nganh-hang-khong-trong-nam-2022/?
fbclid=IwAR13mpICegifeQTcKdKKpzrXdGRYQLq-
o3eYV56Glen87C8Fp77qB9ktVlk
[12] XEM xét Tăng Chuyến Trên Các đường Bay TỪ HÀ Nội, TP HỒ chí minh dịp
nghỉ LỄ 30/4-1/5. CỤC HÀNG KHÔNG VIỆT NAM | Cục hàng không Việt Nam.
(n.d.). Retrieved April 17, 2023, from https://caa.gov.vn/?
fbclid=IwAR13mpICegifeQTcKdKKpzrXdGRYQLq-
o3eYV56Glen87C8Fp77qB9ktVlk
[13] Air passengers near pre-pandemic levels. vietnamnews.vn. (n.d.). Retrieved
April 17, 2023, from https://vietnamnews.vn/economy/1352577/air-passengers-near-
pre-pandemic-levels.html?
fbclid=IwAR2IRhVyyufJxKQKYQA9bHb4odjNRATG0a1FCH__EyHFVko6pPOHif
PJoCA#:~:text=the%20whole%20year.-,In%202019%2C%20the%20number%20was
%20120%20million.,2022%20will%20reach%2055%20million
22