4. Most of lighting manufacturers are of small and medium size
3.4.2. Rivalry among established companies
As discussed above the lighting industry has been taken up by HAPULICO and Vietnam Schreùder and LUGIACO. Vietnam Schreùder has maintained its market follower after HAPULICO. The remaining competitors are private companies compete unfairly by setting lower price with uncertified and lower quality. The main competitors of Vietnam Schreùder are HAPULICO,LUGIACO, Philips, GE, Thorn, and Sylvania. The below analysis of some main competitors’
characteristics will help the Vietnam Schreùder to identify the threats of competition:
HAPULICO: is a state-owned company in the form of State one member Company, it has been converted from a state-owned company. HAPULICO has its own production equipment dealing with high pressure injection machinery of metal (1.600 tonnes) and composite (450 tonnes) and sand die casting facilities.
High production capacity with large labour force (over 600 staff) with many branches, distribution channels is also its strength. In addition, HAPULICO has subsidy from the State in terms of capital and supports to designers and architects in some extents and HAPULICO has also a design and consultancy professional
staff dealing with design for even poles and lighting fittings for construction projects. Therefore HAPULICO has been able to provide full package solution with the permission certification of public lighting products to European market especially to France. HAULICO’s products categories are also diversified (refer to Table 3.6 below) However, HAPULICO is still a domestic company then the R&D activities are still performed by their own and have no technology transfer from developed countries (meanwhile Vietnam Schreùder has their technology transfer from holding company with their own R&D Company, R-Tech).
Therefore we assess the competition with HAPULICO ishigh.
LUGIACO: formerly, LUGIACO was a joint venture partner with Vietnam Schreùder and now it is a listed company with registered capital of VND 10 billion and the market value of VND 70 billion. LUGIACO has its own production facilities though the capacity is lower. The sales forces and distribution channels are assessed as moderate not intensive like HAPULICO.LUGIACO is considered as market challenger and LUGIACO’s competition with Vietnam Schreùder is considered asmoderate
PHILIPS: This is a very well-known Dutch multinational company with the diversification of lighting products in Vietnam. They had established the 100%
FDI company in Vietnam in terms of indoor lamp production (direct competition with Osram and Dien Quang indoor lamp), however in terms of public lighting products Philips currently has been focusing on providing OEM products to lighting products manufacturers (i.e. HAPULICO, Vietnam Schreùder, Hai Phong Electrical and Lighting Company, etc….) like lamps, ballasts and ignitors and reflectors in some extents. Currently PHILIPS just focuses on home electric appliances and the lighting segment is just focused on electrical components
supply. The lighting products that listed in the Table 3.3 that PHILIPS wants to supply to customers have to be imported and most importantly PHILIPS has maintained no sales forces and distribution channel for lighting fittings. Therefore the competition with PHILIPS in the next 4 years is assessed aslow
GE (General Electric): This is a very well-known US multinational company with the diversification of lighting products. Currently like PHILIPS, GE has also focused on home electric appliances. The GE’s products are distributed by some domestic companies like Hong Bao but at the current stage GE has also maintained its position in supplying OEM components for manufacturers (lamps).
The sales forces and distribution channel of GE through a local company (Hong Bao) is considered weak at the moment. Therefore the competition of GE with Vietnam Schreùder is assessed aslow
Other local distribution companies: Currently the local companies has small distribution channel and has no production or assembling facilities and they have no proactive position in supplying in the large projects. They supply the lighting products based on projects based and in a small quantity for replacement.
Therefore the competition with other domestic companies is assessed aslow.
However, Vietnam Schreùder with the philosophy of “High technology applied in the products, better products quality with approved standards and better services”
constantly strive for better quality, more reliability and competitive pricing. In summary the competition is moderately intensive. The rivalry among established companiescan be assessed by the following matrix in consideration of some circumstances as below:
Rivalry among established companies: Assessment level
• Industry growth High
• Fixed (or storage) costs/value added Moderate
• Intermittent overcapacity Low
• Product differences Moderate
• Brand identity High
• Switching costs Moderate
• Diversity of competitors Moderate
• Exit barriers High
Table 3.4 Rivalry among established companies Assessment
The table below will summarize the strength and weakness between the main competitors:
HAPULICO Vietnam Schreder
LUGIACO Philips, GE
Other local companies Distribution Advanced
Technology transfer inherited from theR&D group company
Listed company, potential for development from public funding
Recognized brand name
Lower price
Mass Production
Good sales forces
Own production Good quality Be able to
supply large quantity of order in quick delivery time
Recognized brand name
Large quantity supplies
Low cost of production
Good quality Lower price Subsidy and
support from State
Special lighting techniques Strengths
Design capability
Support from designers and architects
Full package solution Advanced Technology transfer is limited
Small scale assembling
Weak inR&D activities
No direct distribution
Lower quality
Lighting consultancy is developing
Higher price Distribution channel and low sales forces
High price as imported products
Low distribution channels Delivery
time Weakness
Table 3.5 Summary of strength and weakness of lighting companies.
With the analysis of the competition between the established companies we can depict a strategic mapping among the competitor as follows:
TypesofProducts Suppliers/DistributionChannels
Overall Cost of Products ( low -> high) Hapulico,
Vietnam Schreder,
LuGiaCo
Others
Lien Anh, Tan My A, Lien Anh, Tan My A, Cao Tran,
Cao Tran,ToanToanCau,Cau, HoHoGuomGuom, Duc Son,, Duc Son,
Toan
ToanTan, AC,Tan, AC, EverBright EverBrightLtd.Ltd.
Thorn, Philips, Thorn, Philips, General Electrics, General Electrics,
Siteco
Siteco, Sylvania,, Sylvania, Cooper Cooper
TypesofProducts Suppliers/DistributionChannels
Overall Cost of Products ( low -> high) Hapulico,
Vietnam Schreder,
LuGiaCo
Others
Lien Anh, Tan My A, Lien Anh, Tan My A, Cao Tran,
Cao Tran,ToanToanCau,Cau, HoHoGuomGuom, Duc Son,, Duc Son,
Toan
ToanTan, AC,Tan, AC, EverBright EverBrightLtd.Ltd.
Thorn, Philips, Thorn, Philips, General Electrics, General Electrics,
Siteco
Siteco, Sylvania,, Sylvania, Cooper Cooper
Figure 3.6 The mapping of competitors
Company name Product
types Components
Public Industrial Flood
lights Urban Tunnel Traffic
Lamps/
Ballast/
Igitor
Reflector Pole
Multinational Companies
1 VIETNAM SCHREDER
2 THORN
3 PHILIPS
4 GE
5 SYLVANIA
6 SITECO
7 COOPER
8 YLI
9 Lighting&Equipment Public Company
10 EverBrightLtd. Co.
Local Distributor and Assembing
Companies
11
Hanoi Public Lighting and Urban equipment
(HAPULICO)
12 LuGia Joint Stock Company
13 Tân Mỹ ÁLtd., Co.
14 Minh HửngLongLtd., Co. (PARAGON)
15 Toàn Tấn Electrical andLightingLtd., Co.
16 Hải Phòng Electrical andLighting Co.
17 Hồng Bảo Co.,Ltd.
18 Rạng ĐôngLamp Joint Stock Co.
19 Hoàng Gia PhátLightingLtd., Co.
20
MEGAMAN - Vieọt Hửng ( BCC) Indoor
Lighting and Electric
21 Hoà GửụmLighting Joint stock Co.
22
Bình Taây (BITEXCO) Import-Export Joint
stock Co.
Table 3.6 Products categories of lighting companies in Vietnam.
Figure 3.7 The nationwide market share of lighting products