Technology As Innovator

Nov 18

Business lessons from Keangnam Vina, observed through the Request of Commitment

Category: How Business is done Add comments

The Request that invoke excitement

Vietnamese citizens, especially Hanoians and people in the construction industry, are excited by a recent request for fulfillment of commitment sent to Keangnam - Vina (K) by a group of war veterans and construction experts (R).

The request, as reported on many newspapers, can be summarized as:

The 1000th Anniversary of Thang Long - Ha Noi, the one millennium year-old capital of Vietnam, will take place in 2010.

Keangnam Hanoi Landmark Towe, constructed by Keangnam Vina has been appointed as a tribute to the great event.

(R) believes that (K) will not be able to meet the deadline for the event.

(R) challenges (K) to an agreement:

If (K) can meet the deadline, (R) will reward (K) with VND 100 billion (approximately USD 6.25 million)

If (K) cannot meet the deadline, (K) will then apologize Hanoi citizens and compensate VND 100 billion to (R)

Both sides propose to donate the money to charitable organizations.

Media and observers’ reactions

Almost immediately, the buzz rose throughout Vietnam on this agreement. Two topics are usually exchanged in conversations:

The technical aspect of the agreement “can they (K) make it?”

and who would win the what-they-call wager.

The business lessons

What I am intrigued is I have learned various business lessons from Keangnam Vina’s response to the challenge.

Asset Management

(K)’s offer for the deal includes 11 apartments on the sixth floor and one penthouse whose total value is estimated to VND 1 billion.

It is important to note that during this economic recession, the real estate market is going slower. There has been evidence of downturn on luxury apartments’ price. While it is difficult to predict the price of these assets in 2010, experts agree that the chance these assets will increase in value in the next two years is slim.

Keangnam Vina’s offer can be considered smart in terms of financial values.

Reputation Management

(K) has been very responsive to inquiries regarding the agreement. This has boosted their visibility on the news and the company is now more well-known by Vietnamese people than ever.

(K) also promised to donate the money if they win to charitable organizations, makes it a diplomatic move.

They have done a very good PR pitch on the field.

Project Management and Resource Management

Though this is usually not easy to observe from outside, we can expect more advanced Project Management and Resource Management techniques by (K) to reach the committed deadline.