ASSIGNMENT 2 FRONT SHEET

Qualification BTEC Level 5 HND Diploma in Business

Unit number and title Unit 32: Business Strategy (574)

Submission date 15/4/2021 Date received (1st submission)

Re-submission date Date received (2nd submission)

Student name Nguyễn Võ Ngọc Vũ Student ID GBD191057

Class GBD0802 Assessor name Nguyễn Hữu Nam Phúc

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I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I
understand that making a false declaration is a form of malpractice.

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Table of Contents
Introduction .................................................................................................................................... 5
1. Strategic capabilities of Shopee .............................................................................................. 5
1.1 Benchmarking................................................................................................................... 5
1.2 The value chain................................................................................................................. 7
1.2.1 Primary activities....................................................................................................... 7
1.2.2 Support activities ...................................................................................................... 7
1.3 The value system .............................................................................................................. 7
2. VRIO Framework of Shopee .................................................................................................... 8
3. Strengths and Weaknesses of Shopee .................................................................................... 9
3.1 Strengths ............................................................................................................................... 9
3.2 Weaknesses ...................................................................................................................... 9
Conclusion ....................................................................................................................................... 9
References .................................................................................................................................... 10

Table of Figures
Figure 1 Consumer rating score for e-commerce platform in Vietnam (Vietnambiz, 2020).......... 5

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Introduction
Besides the external analysis, an internal analysis should be also conducted to develop the
organization in the most effective way. In this report, it will use SWOT and VRIO model to study
the strategic capabilities of Shopee.

Shopee is the leading e-commerce platform in Southeast Asia and Taiwan. Launched in 2015, it
is a platform tailored for the region, providing customers with an easy, secure, and fast online
shopping experience through strong payment and fulfillment support (Shopee, 2021)

1. Strategic capabilities of Shopee

1.1 Benchmarking
It should be taken into account two of the leading position in the e-commerce sector in
Vietnam, which are Shopee and Tiki, to compare their performance.

Figure 1 Consumer rating score for e-commerce platform in Vietnam (Vietnambiz, 2020)

According to (Wolfinbarger, M., & Gilly, M. C., 2003), there are four components in the
quality scale of retail via Etail network which are reliability, web design, safety, and
customer service. However, the research showed that this component does not impact
customer satisfaction when shopping online (GIAO, 2020). Also, the Security factor has the

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least impact on customer satisfaction when online shopping. Therefore, it should be used
three components to analyze which are price, customer service, and reliability

Firstly, according to the data from (Qandme, 2021), the price of Shopee is evaluated happier
than Tiki’s with 44% and only 19%. This shows that the price of goods in Shopee is more
affordable than Tiki’s. This puts a huge influence on the performance of Shopee today
because the price factor is evaluated as the factor that customers care about most when
they online shopping in e-commerce (59%) respectively (Vietnambiz, 2020).

Secondly, the customer service of Tiki is appreciated higher than Shopee’s. Research
showed that customers are very interested in Tiki.vn customer service. The transaction
between seller and buyer is completely natural without any intervention from Tiki.vn (C2C).
As a result, the complaints and exchanges of goods, and compensation also took place more
often. The responsibility of the business is to ensure the rights of the buyer and the seller
does not suffer from any disadvantage, thereby enhancing the satisfaction of customers
(GIAO, 2020). While Shopee’s customer service is evaluated to need to be improved
because Shopee PBX does not deal much, mainly the buyers negotiate and contact the
seller (Nhanh, 2020).

Thirdly, reliability or trust when online shopping is one of the key success factors of e-
commerce (Nguyen, 2016). Figure 1 also showed that the diversity of goods factor of
Shopee is much higher than Tiki’s with 53% and only 14% in turn. Shopee offers simple
registration and sellers are not required to prove any documents, they can always create an
account create an online store, and then start to post products on the store, that is the
reason why Shopee was reported to be the highest e-commerce site which has scam rate
relatively high. Another Shopee's policy is sellers can decide a discount number whichever
they 20 want which leads to the problem that the price range of the same products are so
different and buyers can be confused and do not know which product is authentic (Dang,
2021). While Tiki’s policy for registration is quite difficult because the censorship stage is
tight. From that, the quality of Tiki’s goods is always more reliable than Shopee’s. This is the
reason why the reliability rate of Tiki is higher than Shopee’s.

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1.2 The value chain
1.2.1 Primary activities
• Logistics inbound: Like other e-commerce platforms, Shopee is also a platform
that connects customers to customers (C2C). Therefore, there seem to be no
logistics inbound activities.
• Operations: Shopee has several departments such as Business Development and
Partnership, Marketing, Software Engineering,… which are run and managed
rigidly.
• Logistics outside: Unlike other e-commerce platforms, Shopee does not have
direct storage or a delivery system like Tiki.
• Advertising and sales: Shopee offers a lot of promotions for customers not only
the buyers but also the sellers. There are a lot of effective advertising campaigns
namely Shopee Baby Shark, hire Cristiano Ronaldo as KOL, 11.11, 12.12,…

1.2.2 Support activities

• HRM: One of the best factors which contribute to Shopee’s success is the well-managed
human resources. Shopee do well from attracting talents (by Global Leaders Program,
Internship,…), developing ( through Learning and Development Opportunities), to retain
them (through Vibrant & Collaborative Office Environment) (Shopee, 2021).
• Technology: Shopee has an in-house technology team that builds and updates the latest
technology to bring the most comfortable to the customers.

1.3 The value system

Firstly, the organizational value chain or profit pool of Shopee derives from that advertising
and sales value chain because Shopee will earn 2% of the total bill of customers. So the
more customers use Shopee, the more profit it will get. Therefore, Shopee should exploit
more these activities to maximize the profit. Secondly, to maintain and develop the
organizational value chain, it has to be managed and controlled well by the customer value
chain. The value chain of buyers is buying goods with the cheapest price, best quality, and
easiest manipulation. Also, the value chain of sellers is to be able to sell as much as possible.

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Therefore, to balance between them, Shopee has to invest not only on the promotion which
just uses in temporary, but also the technology. Convenience and trust is the factor creating
the customer loyalty.

2. VRIO Framework of Shopee

• Brand image: By the leading position, the brand image of Shopee is one of the key
assets. Shopee seems to be at the top of mind when mentioning “online shopping” in
Southeast Asia.
• International presence: Presented in more than 8 countries especially in Southeast Asia,
Shopee continues to expand around the world.
• Competitive price: Shopee’s pricing strategy is another main factor. By the ease of
registration and the low commission fee, the sellers also provide a competitive price
comparing with the same products on other e-commerce platforms.
• Big and loyal client base: The result of competitive price is the number of goods sold
becoming higher and higher. Therefore, the loyalty of clients or sellers is bigger and
bigger.
• Advertising capabilities: By providing a range of effective and viral marketing campaigns,
Shopee shows excellent capabilities in advertising.
• HR culture: By well-managed human resources, Shopee’s culture is also another
competitive advantage.

Resources Valuable Rare Inimitable Organized

Brand image YES YES YES YES

International presence YES NO NO YES

Competitive price YES YES YES YES

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 Big and loyal client base YES YES YES YES

Advertising capabilities YES YES NO YES

HR Culture YES YES YES YES

3. Strengths and Weaknesses of Shopee

3.1 Strengths
First of all, Shopee has a diversity of products. This can be seen as the most competitive
advantage of Shopee, which makes it different (53%). Secondly, Shopee has the cheapest price
if comparing among three leading positions in Vietnam which are Shopee, Tiki, Lazada (44%).
Thirdly, the application and web design, as well as the attractive promotion, makes Shopee
have the highest happiness rate with 43%. Finally, Shopee has the most number of young users
(44%) who spend most time and finance on online shopping (Vietnambiz, 2020) (Qandme,
2021).

3.2 Weaknesses
Because of the easy registration without control, the trustworthiness of Shopee is still low
(31%). Besides, the luxury products are evaluated to be still low (31%) because there is too
many fake products that need to be controlled in Shopee.

Conclusion
To earn success from the business, internal analysis has to be conducted carefully by the
organization. This helps them to understand the strategic capabilities, from that, create the
most appropriate strategy. This report has analyzed the internal capabilities of Shopee by using
the Benchmarking and VRIO framework.

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References
Dang, T., 2021. IMPROVING E-COMMERCE SERVICE FOR BETTER CUSTOMERS’ SATISFACTION,
s.l.: Tampere University of Applied Sciences.

GIAO, H. N. K., 2020. Customer Satisfaction at Tiki.vn E-Commerce Platform. Journal of Asian
Finance, Economics and Business, 7(4), pp. 178-183.

Nguyen, N. T., 2016. CRITICAL SUCCESS FACTORS AND BARRIERS FOR BUSINESS-TO-CUSTOMER
(B2C) E-COMMERCE: EVIDENCE FROM VIETNAM. University of New England.

Nhanh, 2020. Nhanh. [Online]

Available at: https://nhanh.vn/so-sanh-cac-san-thuong-mai-dien-tu-pho-bien-nhat-hien-nay-
nen-chon-mua-lazada-tiki-shopee-hay-sendo-n61661.html#id46
[Accessed 15 4 2021].

Qandme, 2021. Quandme. [Online]

Available at: https://qandme.net/
[Accessed 15 4 2021].

Shopee, 2021. Shopee. [Online]

Available at: https://careers.shopee.vn/about/
[Accessed 15 4 2021].

Vietnambiz, 2020. Vietnambiz. [Online]

Available at: https://vietnambiz.vn/the-manh-de-canh-tranh-cua-tiki-lazada-shopee-trong-thi-
truong-thuong-mai-dien-tu-viet-20201030165029048.htm
[Accessed 15 4 2021].

Wolfinbarger, M., & Gilly, M. C., 2003. EtailQ: Dimensionalizing, Measuring and Predicting etail
Quality. Journal of Retailing, 79(3), pp. 183-198.

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