Microsoft word phan thi thanh hieu MBUS8 final thesis

A’s LTCs signed below the target in 2016, 2017 and 2018

To stabilize annual consumption, the parent company mandated that each subsidiary achieve at least 50% of their total consumption output from long-term contracts (LTCs) In alignment with this directive, Company A aimed for a 70% tapping volume for signed LTCs over the past three years However, from 2016 to 2018, the Import-Export department failed to meet this target, resulting in a shortfall where the total natural rubber contracted by customers did not reach half of the expected tapping output, as illustrated in the accompanying tables.

Table 1: A’s report about LTCs signed in 2016

TIEU LUAN MOI download : skknchat@gmail.com

Between 2016 and 2018, the natural rubber production for LTCs fell significantly below the target levels, with yields recorded at 48.90%, 41.17%, and 38.49%, respectively, indicating a downward trend in comparison to the overall tapping volume.

Figure 1: A’s total tons of LTCs over exploitation volume from 2016 to 2018

The importance of the symptom

From company report, the ratio between COGS and revenue increase year by year as illustrated below:

Figure 2: COGS over revenue of A from 2016 to 2018

Over the past three years, Company A has seen an increase in its Cost of Goods Sold (COGS) as a percentage of revenue, rising from 81.25% in 2016 to 87.75% in 2018 This trend is primarily due to high inventory levels resulting from an inability to sell finished goods and a failure to secure long-term contracts with existing customers or develop new sales opportunities Consequently, the remaining inventory depreciates in quality, which is reflected in the COGS for the following year, along with a decrease in sales prices This alarming trend signals an urgent need for Company A to take corrective actions to improve its performance, as continued inaction could lead to significant financial losses in the near future.

To investigate the identified symptom, I conducted interviews with both the Import-Export department and customers to determine if any errors were contributing to the issue The participants involved in these interviews are detailed below.

Table 4: Participants in first interview in March 2019

According to Mrs TNT- Head of Import-Export department:

A's strategy allocates 30% of its resources to spot contracts and 70% to long-term contracts (LTCs) Spot contracts involve various and unpredictable customer sources, allowing customers to reach out at any time throughout the year In contrast, A aims to meet the parent company’s requirements through substantial LTC exploitation, focusing on maintaining existing customers while also developing new sales opportunities This article will primarily discuss LTCs, addressing the challenges A faces in managing this segment effectively and exploring solutions to enhance customer source control.

Through interviewing Import-Export Executives, three existing customers and two potential customers that A is following, the Initial cause-effect map is shown as below:

Figure 3: Initial cause-effect map

Potential problems

Customers diversify suppliers to reduce risks

In an interview with A's executives and existing customers, it was revealed that all three customers source natural rubber from A as well as other producers Goodyear noted, “In the Vietnam market, we purchase natural rubber from multiple subsidiaries and external suppliers that meet our standards This strategy provides us with a variety of choices and a backup plan in case any supplier fails to deliver on time We have faced issues with delayed shipments from suppliers, which have resulted in significant losses Our experience has taught us the importance of diversifying our suppliers to ensure product availability.”

-13- making them suffer lots of costs Therefore, they actively control their purchasing volume by that way so A may not negotiate to increase existing sales, leading A’s LTCs below the target.

Multiple strong competitors with good service

The Vietnam natural rubber market, once dominated by A's group, now faces increased competition from private companies offering high-quality products and excellent service While A's subsidiaries maintain standard quality through advanced technical processes and machinery, the emergence of alternative suppliers has made it challenging for A to boost sales and meet long-term customer targets.

Customers feel not satisfied in business relationship with A

Interviews with purchasing representatives from Good Year, Tong Teik, and Sintex reveal significant dissatisfaction with their business relationship with Company A Despite a long-standing partnership, these representatives expressed that A has caused considerable difficulties during challenging situations, leading to substantial costs for their companies, even when assistance was available This lack of trust has prompted concerns about future cooperation, with some customers considering alternative suppliers Consequently, this dissatisfaction may account for the reduced purchasing volume from A among these clients.

Customer satisfaction is crucial to us, yet after years of collaboration with Supplier A, we find ourselves increasingly dissatisfied Over the past three years, we have felt unappreciated and neglected, leading us to consider alternative suppliers The lack of proper treatment for long-term customers has strained our relationship with A, resulting in a gradual loss of trust.

Sintex expressed dissatisfaction with their long-term relationship with Supplier A, despite the reliability of its products They noted that while other suppliers are improving their offerings and building stronger connections, their partnership with A has not progressed similarly As a result, Sintex is hesitant to commit to a long-term contract with Supplier A, indicating uncertainty about future collaboration.

Tong Teik expressed concerns about the deteriorating relationship with A, attributing it to A's working style Despite a long history of collaboration, there is growing dissatisfaction with A's business practices.

Constraint of state-owned company’s policy

Sintex expressed discomfort in their dealings with Company A due to its stringent business policies They highlighted that private companies tend to have more flexible policies compared to the strict regulations of group subsidiaries For instance, Company A offers deferred letter of credit (L/C) payments, allowing Sintex time to prepare funds, whereas other members require L/C at sight This flexibility is crucial for Sintex, and the rigid policies of state-owned companies are a significant factor in their decision to reduce purchasing volumes.

Customers do not trust in A, no commitment for future shipment

Source: A’s Import-Export department report

Despite ongoing efforts, Company A has been unable to secure long-term contracts (LTCs) with two key customers, Topship and Namazie Feedback from interviews indicates that both customers expressed dissatisfaction with their experiences while working with Company A, leading to their reluctance to formalize agreements.

A Therefore, one of reasons making A fail to achieve LTCs target is that the company could not develop new sales due to dissatisfying potential customers

Based on interviews and company data, a significant potential problem identified is that customers diversify their suppliers to mitigate delivery risks Customers, drawing from their experiences, prefer to purchase from multiple suppliers to ensure timely delivery This choice reflects customer behavior and may not be directly influenced by Company A's efforts to address this external factor Additionally, the competitive landscape and state-owned company policies also represent external challenges that could impact the business.

“customer feel not satisfied in the business relationship with A” and “customers do not

The lack of commitment for future shipments has prompted Company A to reassess its performance in search of underlying issues Addressing these root causes is essential for improving the current situation and enhancing overall operational effectiveness.

Customer relationship quality is a crucial concept in understanding the dynamics between buyers and sellers, characterized by three key elements: satisfaction, trust, and commitment Trust is established when one party has confidence in the reliability and integrity of the other Commitment reflects the willingness to maintain a long-term relationship with the company, while satisfaction conveys the positive feelings a partner experiences based on their interactions with the business Research indicates that these three factors are directly linked to relationship quality, making them vital indicators of a company's performance.

Therefore, The Updated Cause-Effect map is illustrated as below:

Figure 6: Updated cause-effect map

The follow-up interview aims to assess whether A is experiencing difficulties in their customer relationships, as suggested by the literature, while also exploring potential issues in greater depth.

Table 5: Participants in the second interview in March 2019

Findings from the second interview

In an interview, both current and potential customers highlighted that A's products, backed by a reputable brand name, consistently meet high-quality standards due to advanced production processes This reliability has fostered significant trust among consumers Compared to other natural rubber suppliers in Vietnam, A's subsidiaries enjoy a strong competitive edge, maintaining consistent quality over the years As a result, customers often prefer these subsidiaries' products over those from private companies, recognizing them as leaders in the Vietnamese market in terms of both quality and quantity.

Long time working but recently not satisfied in the relationship with A

After nearly a decade of collaboration with Company A, existing customers have expressed growing dissatisfaction despite their long-term relationships Previously, reliable product quality was the primary criterion for rubber buyers, but this has shifted in recent years Notably, Good Year has highlighted these concerns, indicating a significant change in customer expectations.

Recently, several suppliers in Vietnam have shown impressive performance, leading us to feel more valued in our partnerships In contrast, our experience with A has been disappointing, prompting us to reevaluate whether A remains a suitable and acceptable choice for our needs This lack of satisfaction in our collaboration has negatively impacted our relationship, resulting in diminished commitment for future engagements.

Policy constraint is not a big deal compared to feeling bad in business relationship with A

Customers perceive state-owned companies like A as having stricter policies compared to private firms Specifically, Sintex prefers the deferred letter of credit (L/C) payment method over the sight L/C that A mandates, as it provides them with time to arrange payment after shipment delivery Despite their acceptance of A's payment terms due to the high quality of products available in the market, customers often feel demotivated by various issues They express a lack of support from A, leading to reluctance in continuing their partnership.

During an interview, Import-Export executives revealed that existing customers often source natural rubber from multiple suppliers, including A, to mitigate potential risks This strategy is commonly adopted in the Vietnam market, where customers seek to diversify their supply chain to avoid relying on a single key supplier By doing so, they aim to minimize losses and avoid costly delays, as some suppliers have been known to fail to deliver goods on schedule, resulting in significant financial burdens.

Customers do want to establish long-term relationship with suppliers who have not only good quality but also great support

The Vietnam rubber market is becoming increasingly competitive, with private companies enhancing product quality and customer support, unlike Company A, which has been less responsive during challenges Existing customers now have more options and prefer long-term partnerships with suppliers that not only provide high-quality products but also prioritize exceptional customer service Tong Teik noted that Company A needs to improve its customer relations, as clients desire empathy and support, especially in times of trouble Ultimately, strong support fosters sustainable relationships, making suppliers who excel in both quality and customer care more competitive in the market.

We really stress when working with A while the other suppliers try to ease any problems to

-19- keep the relationship grow well That cannot sustain in the long term if A does not change its perception.”

Main problem

Research and in-depth interviews reveal that customers are dissatisfied with A, despite a long-standing relationship, leading to a lack of trust and commitment for future shipments This dissatisfaction stems from unmet expectations, causing customers to either maintain or, more critically, reduce their purchasing volume from A Consequently, A's primary issue is its inadequate customer relationship quality, which is evident from the feedback gathered during the interviews.

- Long time working but recently not satisfied in the relationship with A

- Customers feel not satisfied in business relationship with A

- Customers do not trust in A, no commitment for future shipment

- Policy constraint is not a big deal compared to feeling bad in business relationship with A

- Multiple strong competitors with good service

- Customers do want to establish long-term relationship with suppliers who have not only good quality but also great support

While external factors such as competitors, government regulations, and customer perceptions can pose challenges, the internal issue of poor customer relationship quality is within A's control Customers currently lack trust, satisfaction, and commitment, making it crucial for A to prioritize addressing these internal concerns By focusing on improving customer relationships, A can effectively manage the situation and enhance overall business performance.

Problem definition

Relationship quality, as defined by Barac et al (1), reflects the level of buyer satisfaction with their interactions with sellers at a given moment Smith (2) considers relationship quality a metric for evaluating the strength of a company's connections with its customers and its effectiveness in fulfilling their needs and expectations Additionally, Levitt (3) describes relationship quality as a collection of intangible values that enhance products or services, leading to anticipated exchanges between buyers and sellers.

According to Garbarino and Johnson, relationship quality is a crucial metric that encompasses trust, satisfaction, and commitment between customers and organizations These three dimensions are essential for fostering a strong, long-term relationship between customers and suppliers, benefiting both parties involved.

Problem existence

Customer feedback indicates a lack of satisfaction and trust in A's working style, leading to uncertainty about future collaborations The Vietnamese natural rubber market has become increasingly competitive, with both parent company members and private firms, such as Viet Phu Thinh, Van Xuan, Mai Thao, and Thang Thang Loi, enhancing their appeal through quality products and strong customer support Conversely, A's employees believe that the issues raised by customers are not their responsibility and, therefore, do not prioritize addressing them This disconnect contributes to customer dissatisfaction with A's support services.

In summary, customer dissatisfaction is evident, as A's employees prioritize their tasks over providing timely support to LTC customers This lack of appreciation for customer relationships is concerning, especially in a dynamic market where clients are increasingly discerning about their suppliers Consequently, A's business relationships appear to be flawed, contributing to a shortfall in long-term contracts below the target.

Problem importance

High relationship quality in a company, characterized by trust, satisfaction, and commitment among partners, is crucial for enhancing performance, as noted by Vesel and Zabkar (as cited by Giovanis et al.) Mitrega further emphasizes the strong link between customer relationship quality and company profitability In a real-world example, Company A's failure to meet its long-term contracts (LTC) targets has resulted in a rising cost of goods sold (COGS) relative to revenue over the past three years, indicating poor performance The inability to attract customers for LTCs has led to a higher COGS in subsequent years due to leftover inventory.

The profitability of businesses has been adversely impacted, highlighting the critical connection between customer relationship quality and increased sales, future repurchases, and customer loyalty This suggests that fostering high-quality relationships with customers is essential for business development Companies that excel in building strong customer relationships can achieve significant competitive advantages, while those that neglect this aspect may struggle to attract and retain customers over time.

Related to the above problem, some scholar literatures have discussed about potential causes leading to poor customer relationship quality as below:

Poor service quality

Service quality is crucial for fostering strong business-to-business relationships, as highlighted by Crosby et al (8) Gronroos (7) suggests that service quality is assessed by comparing customer expectations with the actual performance delivered by the company Pepur et al (9) emphasize that demonstrating high service quality is vital for maintaining effective business partnerships Consequently, if a company experiences poor relationship quality, it may stem from inadequate service quality, resulting in customer dissatisfaction and a lack of commitment to future collaboration, as illustrated in case A.

Poor company’s reputation

Research by Barac et al highlights that the quality of a company's relationship with its customers is reflected in their trust, satisfaction, and commitment, which are interconnected factors rather than isolated variables Wulf and Thurau, as referenced by Giovanis et al., emphasize that customers often struggle to differentiate between these dimensions Additionally, Donney and Cannon note that a buying firm is more likely to trust a supplier with a strong market reputation; conversely, an unknown corporate supplier may struggle to gain customer trust, ultimately affecting satisfaction and commitment in business transactions.

-22- relationship between the supplier and customers do not grow well as the case of company

Not long enough relationship

Main cause

Interviews with existing and potential customers, along with current employees responsible for documentation, reveal that customers experiencing shipment issues frequently seek support from Company A However, instead of providing timely assistance, A's employees prioritize their existing tasks, which impacts their performance metrics and leads to prolonged wait times for customers This delay results in customer dissatisfaction, and after repeated negative experiences, many choose to discontinue their relationship with A, ultimately harming the company's performance in long-term contracts (LTC) Despite A's established reputation and long-standing relationships with clients, the overall service quality is perceived as inadequate, with poor service identified as the primary issue.

Main cause definition

Service quality is crucial for a company's success, as highlighted by Heskett et al and researched by Ho et al., indicating that understanding its antecedents and outcomes can enhance customer satisfaction and boost business performance In the B2B market, Gounaris suggests using the INDSERV scale to assess service quality across four dimensions: potential quality, hard process quality, soft process quality, and output quality Potential quality refers to the expectations customers have before engaging with a firm, while hard quality evaluates the effectiveness of the service delivery process Soft process quality focuses on the interactions between employees of the two companies, with the personality of employees being a significant factor in reflecting the overall service quality experienced by the buying organization.

Output quality is assessed by the extent to which the buying organization is satisfied with the service, encompassing both hard and soft processes Consequently, a thorough fourth interview is conducted to determine if A's service challenges align with this measurement scale or if they pertain to different dimensions.

Table 7: Participants in the fourth interview in April 2019

Customers’ complaints about not having prompt help when needed

Customers express frustration with Company A's strict adherence to "right and wrong," feeling their needs are overlooked during challenging times Feedback indicates that employees often fail to listen and provide appropriate solutions, lacking a pleasant demeanor Despite a long-standing relationship, customers have endured subpar service, especially as competition increases and they seek better support alongside product quality A representative from Good Year emphasized the importance of empathetic listening and prompt assistance, stating that a supportive approach fosters satisfaction and strengthens long-term relationships with the company.

Employees’ most care is about their responsibility to solve the problem

The employees who were interviewed answer that because that’s not their faults, they put most care on getting their current tasks done first They opined that they work for

Achievement and recognition are crucial for performance evaluation However, due to A's lack of voluntary support, they must focus on completing their current tasks and assisting customers As an employee, A believes it is not their responsibility to address issues beyond their control.

Every day at work, I strive to complete my tasks effectively to ensure strong performance The company assesses my contributions based on task completion rather than my willingness to assist customers While I genuinely want to help them, I recognize that their issues are not my responsibility, so I must prioritize my assigned duties.

Sub cause

An interview with A's employees revealed that the poor service quality stems from two main issues: the employees' own performance and the shortcomings of the company's performance appraisal system.

Despite facing challenges, employees at Company A failed to provide timely assistance to long-standing customers, resulting in significant costs and difficulties for these clients This lack of support indicates a deficiency in empathy and responsiveness, which are crucial aspects of soft-process quality as outlined by the INDSERV scale Furthermore, research by Iriadi and Susanty, as referenced by Rod and Ashill, highlights the importance of addressing customer issues effectively to maintain trust and satisfaction.

The lack of adequately trained employees with essential skills can adversely impact organizational services and the quality of customer relationships When customers are attended to by staff lacking necessary customer-service skills, their satisfaction diminishes, resulting in a decline in purchasing volume from the organization.

Employees feel demotivated to assist customers because the company’s performance appraisal system overlooks voluntary customer support This lack of recognition makes them less responsible for customer interactions, as they view the appraisal system as a crucial means to identify areas for improvement and earn performance-related rewards Consequently, when customer support is not emphasized in performance reviews, employees may not feel valued for their contributions, resulting in diminished service quality and a decline in customer satisfaction.

-28- their purchasing volume from A to switch to other suppliers or A fails to persuade them to continue sign LTC

Therefore, the Final Cause-Effect Map is illustrated as below:

Alternative solutions

Train employees to strengthen customer-service perception and skills

A's employees have demonstrated inadequate soft skills, particularly in customer service, leading to customer dissatisfaction and decreased work performance When employees fail to empathize with customers' needs, it negatively impacts long-term cooperation and appreciation for the company To address this issue, it is crucial for A to implement training and development programs aimed at enhancing both soft and hard skills among employees, as highlighted by Ibrahim et al (14) These training initiatives will help employees recognize the significance of customer relationships for organizational success and equip them with the necessary skills to provide exceptional service While such training may involve costs, the potential benefits in terms of improved employee performance and customer satisfaction can outweigh these expenses.

• Training-related costs: Total estimated costs: 99 million VND § Register fee: 8 million per employee *9 = 72 million VND § Travel & meal support: 3 million per employee*9= 27 million VND

This cost appears when employees take time to participate in the training course so their current works may be delayed dealing with, affecting to job effectiveness

Employees understand the critical importance of customer service skills and the essential role customers play in business success This awareness drives them to engage with customers wholeheartedly Following training, employees recognize that delivering exceptional service is not just a task, but a fundamental aspect of their responsibilities.

Building strong personal relationships with customers is crucial for fostering long-term partnerships between companies and buying organizations In times of trouble, employees leverage their customer service skills to effectively support and resolve issues, ensuring customer satisfaction and loyalty.

Redesign A’s employee performance scale

In an interview, A's employees revealed that their reluctance to assist customers stems from a focus on maximizing personal performance, as the current performance appraisal system does not recognize voluntary customer support This lack of acknowledgment can lead to a perception that assisting customers detracts from their primary tasks and overall performance Research by Bulto and Markos highlights the positive correlation between employee motivation and a fair performance measurement system, suggesting that standardized evaluations can significantly inspire employees Additionally, Eccles' findings, as cited by Ibrahim, emphasize that effective monitoring and evaluation of performance directly influence organizational outcomes To preserve the crucial relationship between A and its customers, it is recommended that the company revise its performance metrics to ensure that employees feel valued when they assist customers and are held accountable when they do not.

A and their performance is also affected The suggestion of improving employee performance appraisal system has some related costs and benefits:

About costs: No costs incurred

A performance appraisal system that relies on voluntary support fosters employee motivation and engagement, encouraging them to assist customers, particularly in situations where issues arise from the customers themselves As a result, customers develop a sense of appreciation for the service provided by Company A, increasing the likelihood of them signing more long-term contracts (LTCs) in the future.

Combine employees training and adjustment of the performance appraisal system

Another solution suggested is that the combination of employee training and the improvement of employee performance scale Here are some costs and benefits:

The integration of comprehensive training programs equips employees with essential customer-service skills while emphasizing the vital importance of customer satisfaction for the company's success The updated performance system highlights that delays in customer support will lead to criticism, adversely impacting employee evaluations, whereas exceptional support will earn them recognition This framework encourages employees to engage fully in training, ensuring they master customer-service techniques that are crucial for delivering excellent service and achieving optimal performance.

To address the long-standing challenges faced by Company A, it is essential to implement three key solutions First, improving employee performance in customer service is crucial for securing long-term contracts Additionally, the installation of an Enterprise Resource Planning (ERP) system is recommended to enhance management capabilities and streamline administrative procedures As noted by Antonova (16), an ERP system integrates all departmental activities into a single platform, significantly contributing to a company's success through its advanced functionalities and infrastructure While the adoption of an ERP system offers numerous benefits, it is important to also consider the associated costs.

Company A enhances its workflow efficiency, enabling timely solutions and saving departments time in data retrieval, which boosts cross-departmental collaboration The system adeptly manages large datasets, reports, and complex requirements, allowing the Board of Directors to monitor daily activities and make informed management decisions.

Implementing an ERP system is a long-term endeavor that demands significant effort and time from the Board of Management's strategic planning to human resource allocation for seamless operation During the implementation phase, organizations may experience a temporary decline in productivity as employees adapt to the transition from the old model to the new system.

Cost for design and installation from service partner that makes the system fit well to A’s situation

Cost for training employees to adapt with the system

Cost for system maintenance and risk management.

Solution selection

In a cost-benefit analysis of three proposed solutions, I interviewed Mr LVT, General Director of Company A, and Ms TNT, Head of the Import-Export Department, to assess their suitability for the company Mr LVT emphasized the company's commitment to improving service quality by implementing the most effective solution available.

Table 8: Participants in the fifth interview in May 2019

Mr LVT expressed concerns about the effectiveness of the training course, noting that while the company incurs a loss of 99 million VND for employee participation, it does not guarantee that employees will act responsibly with customers He emphasized that if employees fail to engage positively, the company risks losing potential contracts Mrs TNT added that her employees prioritize achievement and financial incentives over theoretical knowledge, leading to a lack of motivation for voluntary training She pointed out that even if participation is mandatory, measuring the training's effectiveness remains a challenge Consequently, both perspectives suggest that the proposed solution may not be viable.

To the alternative 2, Mr LVT said that “this solution has no costs incurred” while he

“prefers paying money rather than paying nothing and gain results” because he thought that

The article emphasizes that monetary compensation holds greater value than non-monetary incentives It highlights concerns about employees providing reluctant support to customers, driven by fear of punishment rather than genuine care, which could lead to dissatisfaction among valued clients Mrs TNT concurs, noting that a lack of clear expectations can result in employees neglecting quality Consequently, both leaders dismiss the second solution, prioritizing a more effective approach to employee motivation and customer service.

Mr LVT emphasized that while the proposed solution addresses costs such as training and productivity loss, its primary aim is to effectively resolve underlying issues Employees at Company A will receive training to enhance their customer-service skills, which will be monitored through a performance appraisal system This approach enables employees to proactively develop the soft-process quality essential for thriving in today’s competitive market, ultimately improving service quality and creating a competitive advantage for Company A Mrs TNT noted that this solution merges the drawbacks of previous options, making it the most feasible choice.

Alternative solution 3 is identified as the most effective approach to address the specific causes of poor customer relationship quality The subsequent action plan outlines the implementation strategy for this optimal solution at Company A.

The action plan, developed in collaboration with the General Director and the Head of the Import-Export Department, aims to address the identified issues by integrating employee training with the refinement of the employee performance measurement scale This strategic approach is anticipated to enhance overall employee performance and effectively resolve the challenges at hand.

The action plan is structured into eight stages, commencing in February 2020, following the Tet holiday, when rubber trees are out of season and employees have more availability This timing allows employees to participate in a training course designed specifically for the Import-Export Department The training program is expected to last approximately six months, concluding in August 2020, and aims to enhance the skills of employees who directly engage in import-export activities.

To enhance customer relations, Company A must prioritize training for its 34 key customers, with the aim of eventually extending this training to all employees to emphasize the vital role customers play in the company's success The integration of employee training with a redesigned performance measurement scale should align with customer needs It is crucial for Company A to monitor the responses of its long-term customers throughout this process Additionally, recognizing that transitioning from training to effective practice requires time, the company must diligently observe employee behaviors and exercise patience If performance does not improve, soliciting customer feedback will be essential to identify alternative solutions that enhance satisfaction and facilitate successful long-term contracts (LTC).

Stages Specific tasks Duration Personnel involved

- Inform employees current situation of A as the analysis in this thesis

- Inform employees the plan to participate in training course

- Make appointment with training partners to register for employees to join

- Choose the most potential trainer based on company profile

- Schedule participant groups for each training session (4 people/session)

Stage 3 The first 4 employees start to join training course 2 weeks Import-Export

- A's leaders have meeting for discussion of improving performance scale, in which the scale is changed as follow:

A group of employees at Import-Export

The dedicated team, consisting of one salesperson, one document staff member, and one logistics staff member, is responsible for managing specific customers If any customer expresses dissatisfaction or ceases to engage with Company A due to support or service-related issues—regardless of fault—the team’s performance is adversely affected, resulting in a one-rank drop in their overall annual performance.

- Head of Import- Export Department

Stage 5 The four remaining will join after the first four come back 2 weeks Import-Export

Hold a meeting between Leaders and all participants in the training course to have feedback, share knowledge

A’s leaders notify employee the changed performance scale and give time for employee adaption by practicing with customers in reality

Stage 8 Review to see customers’ feedbacks and make necessary changes 2 weeks

About action plan for implementing ERP system in long-term period

The timeline for implementing an ERP system can range from 1 to 1.5 years, influenced by the complexity of the business processes involved The implementation process consists of three key stages: pre-implementation, execution, and post-implementation.

The implementation of a new system involves three key stages: pre-implementation, implementation, and post-implementation During the pre-implementation phase, professionals analyze the company's current situation, consult with suppliers, select the appropriate supplier, and negotiate contracts, typically taking around 4-5 months The implementation stage focuses on integrating business processes, documents, and departmental workflows into the new system while providing employee training, which may take up to one year Finally, the post-implementation phase includes evaluating the quality of business processes, making necessary adjustments for alignment with the company’s needs, and managing risks to ensure the system operates smoothly.

Stages Specific tasks Duration Personnel involved

Analysis of professionals to indicate A’s current situation 8 weeks Outside partners

Consultancy from suppliers 6 weeks Outside partners

Contract negotiation 3 weeks BOD & Selected partner

Integrate business processes into the system

Employees training 16 weeks All the company

Quality evaluation on business processes 4 weeks BOD

Any changes for the suitability with the company 12 weeks BOD

Methodology

This thesis utilizes both secondary and primary data to support its research The secondary data comprises business reports from Company A and various online scholarly sources, which offer reliable insights into the company's current situation and essential theoretical concepts Additionally, primary data is gathered through interviews and focus groups centered on a specific topic, enriching the thesis with firsthand perspectives.

The thesis employs qualitative research methods to thoroughly evaluate and analyze the opinions of various respondents, including internal personnel from Company A, such as the General Director, Head of Import-Export Department, and employees, as well as customers like Topship, Namazie, Goodyear, Tong Teik, and Sintex By conducting interviews and analyzing the collected data, the study identifies key problems, reveals their underlying causes, and explores potential solutions, ultimately enhancing the value of the thesis.

Interview transcript

Aim Find out potential problems Time Mar-19

Interviewer Phan Thi Thanh Hieu

Mrs TNT (Age: 38) - Head of Import-Export Department

Mr A (Age:34) - Goodyear's Purchasing Representative

Mr K (Age: 28) - Sintex's Purchasing Manager

Mr J (Age: 29) - TongTeik's Purchasing Representative

Ms N (Age: 34) - Topship's Purchasing Manager

Ms S (Age: 33) - Namazie's Purchasing Representative

Mrs TNT emphasizes that A must adhere to the parent company's strategy, which mandates that all members maximize Long-Term Contracts (LTC) for stable consumption Each member is required to achieve at least 50% of the exploitation volume for signed LTCs Over the past three years, A's strategy has focused on a distribution of 30% spot contracts and 70% LTCs Spot contracts involve diverse and unpredictable customer sources, with no long-term commitments, leading customers to reach out anytime throughout the year for discussions Consequently, to fulfill the parent company's requirements, A aims to significantly increase its LTC exploitation volume.

-38- and actively control the customers’ consumption For LTC, A maintain existing customers and also develop new sales”

Company A has collaborated with five primary customers over the past three years, establishing strong relationships that span nearly a decade or more In 2018, A welcomed a new long-term customer, further enhancing their portfolio of enduring partnerships.

+ Tong Teik Pte Ltd since 2009

Q: Do customers inform the company A to prepare the annual purchasing volume or randomly order when needed?

A: At the beginning of every year, after planning the purchasing volume, customers actively order company A and proceed to sign LTC

Q: As I know, A’s yearly exploitation volume is quite high With the current number of customers, why don’t the company suggest them for increasing the purchasing volume?

A: Customers refuse to increase the purchasing volume although we suggest that

Q: Do you think any reasons why customers do not sign more?

A: Actually, when negotiating price with customers, we know that with the same grades, five customers have purchased 2-3 suppliers besides us

Q: How long they started to purchase multiple suppliers?

Having collaborated with them for a decade, we recognized their shift towards sourcing natural rubber from various suppliers 7-8 years ago Despite our efforts to demonstrate that we could provide similar options from a diverse range of suppliers, they ultimately chose not to alter their purchasing decisions.

Q: Do you guys think any reasons for that decision?

A: There is a thing that in rubber industry, we negotiated the delivery time with customers when signing contract However, sometimes, due to some objective reasons such as the

-39- weather is not as expected, we cannot offer enough quantity as requirements We think customers signing with multiple suppliers want to have many choices in that case

Customers often have specific requirements for product specifications, and our offerings meet only certain levels of these criteria This limitation affects the perceived quality of our products Depending on their own needs or the demands of their customers, clients may choose to source from us or from other suppliers As a result, those seeking a wider range of specifications are likely to place larger orders with competitors.

The annual reports reveal a decline in purchasing volume among key customers, including Sintex, Good Year, and Tong Teik, from 2016 to 2018 This trend raises questions about the underlying factors contributing to the decrease in their purchasing figures.

Based on their demand, it seems they will require a specific quantity, which may be less than previous years However, I am uncertain if this is the primary reason for the decrease in purchasing volume.

Q: What do A usually do to maintain customer relationship during such a long time?

The parent company hosts Rubber Dinner events, providing customers and subsidiaries with opportunities to connect, share experiences, and strengthen relationships These gatherings include factory tours, banquets, and gift exchanges, occurring 1-2 times per year to foster community and engagement among all participants.

Q: So, from your perspectives, can you evaluate what level of these relationships are?

A: I think after such a long working time, we think our relationships are good enough

Q: So, for example, do your company know about the total volume Goodyear buy from all subsidiaries annually?

A: Actually, we do not know But we know that Goodyear is buying from the other 3 suppliers besides us

Q: Can you share a bit about the process of seeking for new customers?

We utilize three primary sources to acquire new customers: referrals from Rubber Dinner, introductions from our Board of Directors, and our own proactive outreach We carefully filter potential customers based on their specifications and grades, sending introductory emails and requesting meetings for further discussions Notably, the likelihood of securing meetings is significantly higher with customers introduced through Rubber Dinner and our Board of Directors compared to those we reach out to independently.

Many customers typically request sample products to assess quality before making a commitment Despite our dedicated efforts over time, numerous clients remain hesitant and have not yet signed long-term contracts with us.

The lengthy decision-making process for customers may stem from the stringent policies imposed by the parent company's business regulations, which often leads to careful consideration Additionally, customers frequently compare products across different suppliers On our end, my colleagues and I have consistently maintained a strong working relationship with our customers.

Hello everyone, it's a pleasure to connect with you I would like to share my personal research on Topic A for my studies Please feel free to contribute your thoughts and ideas.

Through A’s information, I know three of you are purchasing natural rubber from A However, as A shared that you all also bought from another suppliers

Q: So, could you guys please share any specific reasons?

In the Vietnamese market, we source natural rubber from various subsidiaries and external suppliers that meet our stringent standards This diverse supplier network provides us with multiple options and a contingency plan to mitigate risks associated with delivery delays Our past experiences have highlighted the challenges of relying on a single supplier, as we faced significant losses due to shipment delays Therefore, we prioritize purchasing from multiple sources to ensure a consistent supply of products under all circumstances.

Sintex experienced delays similar to those faced by Goodyear, as one of our subsidiaries postponed the shipment of three containers of natural rubber last December Such instances are not uncommon, as suppliers often struggle to meet agreed-upon delivery schedules To mitigate this issue, it is advisable to source materials from multiple suppliers, ensuring that we receive the necessary goods within our required timelines.

To establish a long-term business relationship, it's essential to be a reliable partner for customers Gaining their trust involves having contingency plans for unforeseen circumstances, which is why we avoid relying on a single supplier.

Q: During such working time, can you guys share about A’s working style?

A: Good year: “To us, satisfaction is so important However, despite long time of working, we have not been satisfied when working with A so we are thinking of other suppliers,

Over the past three years, we have increasingly felt unappreciated by A, despite our long-standing trust and commitment to the company When challenges arose, their lack of timely support made us question the value of our long-term relationship Initially, we accepted these shortcomings, but in today's competitive market, suppliers cannot afford to neglect their loyal customers Consequently, our trust in A has diminished, and our relationship has deteriorated in recent years.

Tiêu đề	Poor Customer Relationship Quality At Company A
Tác giả	Phan Thi Thanh Hieu
Người hướng dẫn	Assoc. Prof. Tran Ha Minh Quan
Trường học	University of Economics Ho Chi Minh City
Chuyên ngành	Master of Business Administration
Thể loại	Thesis
Năm xuất bản	2019
Thành phố	Ho Chi Minh City

Định dạng
Số trang	55
Dung lượng	1,95 MB