Vingroup is reallocating massive resource
Apart from the internal restructuring of its venture capital unit, last year, Vingroup abruptly and continuously declared its retreat from the airline, retail, and agriculture markets, with the exit of VinCommerce, VinEco, and VinPro. Investors well predicted this outcome as they looked at Vingroup’s recent financial reports.
Although being acknowledged as a retail giant with constant year-over-year growth in sales and profits, Vingroup's retail unit witnessed substantial losses in the last six consecutive years.

The airline business intention, which is facing high risk during the pandemic, was also dead in the water.

However, while Vingroup’s healthcare and industrial businesses have constantly made considerable losses, the company continues to place major resources in these sectors.

These two specific fields are being accelerated enormously, especially after the COVID-19 pandemic disrupted the global supply chain and health problems were at alarming levels. Even though the company has not explicitly spoken about this strategy, the future high growth potentials of those industries are said to be able to compensate for the deficits.

McKinsey pointed out that firms that jumped up the power curve also had considerable losses in the first phase. Microsoft, a company in the research of McKinsey, also started operating cloud services as a small part of its business in 2011, but then took an outsized proportion of resources as the manager saw huge potential in this industry. Later, the business grew rapidly from revenues in the hundreds of millions to several billion within several years.
Vingroup might be in the very first phase of implementing this plan with its reallocation plan and seems to start beating the odds soon.
But leadership is not just about big moves

Belinda Wong, chairwoman and chief executive officer of Starbuck China, said that Starbuck placed its people and the local community in the heart of the company’s business model, which explained why it became one of the biggest success stories of an American brand in China.

“We put our people first,” she said, adding that the company gave its stocks for all employees, even the part-timer.

Wong emphasized that Starbuck had also uplifted its farming community in order to produce a “very proud coffee from Hunan that can enter the world’s stage”. “We have to love what we do. That’s how we grow.”

Starbuck and Vingroup and any other leading companies in the world are sharing this same mission.

Vingroup has a long-standing philosophy of improving the lives of the Vietnamese people from childhood through senescence, which is demonstrated through its business umbrella covering from hospital, house, school, entertainment, to transportation and shopping, all are of exceptional quality.
“It’s our mission and responsibility to develop a Vietnamese brand with a world-class reputation,” Vuong said, as Bloomberg described him as “a patriot above all else”.

Whether or not those are marketing stories or business strategies, Vingroup and thousands of successful companies around the world are continually creating intangible value for society, and at the same time, beating the odds to move up the curve of economic profits. It is how they become market leaders./.

(*) Economic profit was calculated by subtracting the capital charge (invested capital multiplied by the weighted average cost of capital, or WACC) from net operating profit less adjusted taxes (NOPLAT).
Tác giả: Bùi Thị Thanh Mai