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FOREIGN TRADE UNIVERSITY=====000=====REPORTCASE STUDY: DIGITAL DIVIDE DATAGROUP 2NAME STUDENT IDLUONG NGOC ANH 1915520002TRAN MINH CHAU 1915520004PHAM THUY DUNG 1915520006NGUYEN KHANH CHI 1915520005TRAN NHU QUYNH 1912520032Ha Noi – 3/TABLE OF CONTENTSOrganization Overview ..............................

Description

FOREIGN TRADE UNIVERSITY =====000=====

REPORT CASE STUDY: DIGITAL DIVIDE DATA

GROUP 2 NAME

STUDENT ID

LUONG NGOC ANH

1915520002

TRAN MINH CHAU

1915520004

PHAM THUY DUNG

1915520006

NGUYEN KHANH CHI

1915520005

TRAN NHU QUYNH

1912520032

Ha Noi – 3/2021

TABLE OF CONTENTS Organization Overview..................................................................................................................2 DDD’s Strategic issues....................................................................................................................3 1. LIMITED FINANCIAL RESOURCES...............................................................................3 2. HUMAN RESOURCES CHALLENGES............................................................................3 3. POOR INFRASTRUCTURE (Battambang office).............................................................3 4. OPERATIONAL CHALLENGES........................................................................................3 SWOT Analysis...............................................................................................................................4 1. STRENGTH..........................................................................................................................4 2. WEAKNESSES.....................................................................................................................4 3. OPPORTUNITIES...............................................................................................................4

4. THREATS........................................................................................................4 PEST Analysis...........................................................................................................5 1. PEST Analysis in the US.................................................................................5 2. PEST Analysis in Cambodia...........................................................................6 3. PEST Analysis in Laos....................................................................................6 4. CONCLUSION................................................................................................7 Strategy Recommendation......................................................................................8 REFERENCES.........................................................................................................9

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Organization Overview Digital Divide Data's mission is to create better futures for disadvantaged youth in developing countries through employment in our financially sustainable business. DDD’s vision is to create a better future for disadvantaged people by providing them with training, a first work experience with a stable income, a scholarship to continue their formal education, and ongoing skills development. Besides that, their Goal in 2008 is to grow its existing operations to 1500 people, while exploring ways for the company to expand globally. DDD has 4 main values which promote this organization being a successful organization. The first value is Delivery Excellence which satisfies customers with innovative technology and superior quality, value and service. The second value is transforming Lives with the responsibility for connecting underserved communities to learning and employment opportunities. The third value is the Sustainable Model which delivers tangible business benefits to clients, and provides a strong social return on investment for clients, donors and investors and the last value is Innovation & Relevance which means technology and employment programs continually evolve to keep pace in an ever-changing sourcing industry and range from 3D digital archiving to handwriting transcription to AWS cloud solutions.

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DDD’s Strategic issues 1. LIMITED FINANCIAL RESOURCES DDD mainly rely on donations and sponsorships to maintain its swelling social programs, training, and operator scholarships, as well as its fundraising and expansion planning. 2. HUMAN RESOURCES CHALLENGES DDD faced difficulties retaining internally-trained managers and high-performing operators. Besides that, DDD faced a human resources challenge in both Cambodia and Laos: skilled managers were hard to find, and expensive because they were in such demand. In addition, To fit well with DDD, an individual moreover needed to not only meet the role’s technical requirements, but also be passionate about DDD’s social mission. 3. POOR INFRASTRUCTURE (Battambang office) Low conditions: road, electricity, transport: The majority of roads were unpaved and no street names. It takes three to five hours to Phnom Penh (in the rainy season, can’t connect to Phnom Penh). Electricity supply was unreliable, broadband connections were limited and expensive. All these difficulties affect the work progress; difficult to transfer skills from the Phnom Penh office (its managerial staff were reluctant to relocate to Battambang). Besides, Battambang has limited private-sector support: no local firms provided computer equipment or basic office supplies. 4. OPERATIONAL CHALLENGES DDD has to compete with much larger IT providers (Aptara, SPI Technologies, Apex Data Services, etc) to win international contracts. The company also has to face capacity imbalances among the three offices. There is not much local demand so DDD rely much on international contracts generated by the U.S.-based sales team. Laotian businesses were only convinced that DDD could deliver on its promises after DDD had demonstrated that its European and Western contracts were successful.

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SWOT Analysis We use SWOT analysis to measure Strengths, Weaknesses, Opportunities and Threats of DDD to identify the underlying causes of the strategic issues. Upon completing the analysis, one of the weaknesses will be systematically and logically dissected in order to come up with an action plan that may eliminate or mitigate the weakness and the possibility to turn it into an opportunity. 1. STRENGTH There are many traits that help DDD gain momentum in Laos, Cambodia and the USA. Among these elements we can mention two main elements which are Social mission and Service. They are solving learning and work problems for disadvantaged young adults and have funding sources and scholarships for students. Beside that, in the service element, headquarters is located in the US where technology is highly developed so that DDD can access the advanced technology. They also provided technology services widely from many organizations and enterprises, including universities and research institutions, cultural heritage organizations, nonprofits and NGOs, and commercial enterprises. 2. WEAKNESSES Having been in the industry for a few years, DDD is striving to keep its success and globally its organization. There are some challenges that are facing DDD in that period and among them we can highlight the following: Financial resources rely on donations and sponsorships and DDD is lower-paying positions because almost all trainees after graduating training from DDD seek a firm that has higher paying positions. Beside the weakness on financial resources, they also have weakness on operational challenges. They lacked a standardized system for project management and the operational processes. This made it difficult to establish best practices across the organization, which in turn might be reducing its potential profitability. 3. OPPORTUNITIES Base on the strength, weakness also the information about Digital divide data given, we identify that DDD could have these following opportunities: The stability of political situation in 3 countries, high number of disadvantaged young adults in Cambodia and Laos, progressive personnel, outsourcing is likely to grow and become even more widespread than it is now, helping businesses improve their overall performance and bottom line quickly, efficiently, and inexpensively. Besides that, Globalization brings opportunities to access new market, increase sales, lower costs. 4. THREATS Despite its success with its social mission, DDD still has to consider the following threats such as the weak legal system of Laos and Cambodia and the IT industry has a high level of competitiveness. Therefore they have to operate effectively to get their goal. Beside that, there are no favorable conditions in the facilities in Laos, Cambodia such as limited electricity,

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stransport; limited private-sector support because no local firms provided computer equipment or basic office supplies. Local demand is low with Internet users are only 2% of Laos’ population; 0.5% of Cambodia’s population. The final threat that we point out is the backward educational system which is lecture-based, rarely interactive, and under -resourced.

PEST Analysis To understand more detailed about Opportunities and Threats of DDD, we use PEST analysis in DDD’s home country which is the US and in its host countries which are Cambodia and Laos.

1. PEST Analysis in the US 

POLITICAL FACTORS

As a democratic republic, the US favors free trade and entrepreneurship. This is a huge advantage for businesses like DDD to international markets. Moreover, The political situation in the US is quite stable, which is an important condition for every company to develop. However, the corporate income tax rate, on the other hand, is very high (around 35% in 2009). This has a negative effect on the company's earnings. Moreover, Federal minimum wage is also an important factor that can affect business. Federal minimum wage increased to $7.25 per hour in 2009 due to the policy of the government to control the Great Recession. This makes the expense increase and directly influences the total net profit of the company.

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ECONOMIC FACTORS

The United States' economy is the largest in the world. However, The Great Recession badly affected the economy. As a result, GDP decreased by 4% in 2009 compared to 2008. The inflation rate was low (-0.36% in 2009). In October 2009, the unemployment rate was about 10%, which was extremely high. Many people lost their job, purchasing power declined and therefore, led to the reduction of sales revenues.

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SOCIAL FACTORS

In terms of social influences, the labor force will be impacted because Millennials have fewer babies or postpone having children. DDD, on the other hand, will benefit from a highquality labor force due to a strong educational system. Furthermore, Americans will have more access to technology, allowing them to learn and master new technology, which is critical for a tech business. Especially, there are a large number of immigrant employees in America, resulting in workplace diversity, which is an important factor in fostering innovation and creativity.

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TECHNOLOGICAL FACTORS

The United States is one of the most technologically advanced nations in the world. As a result, DDD has the potential to profit from technical advancements. Furthermore, since many

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businesses lack adequate internal resources, the market for technology services continues to rise. This is an opportunity for DDD to boost sales revenue. However, the tech industry is more demanding. Many companies want to jump in, so this will pose challenge for DDD coming up with the most optimal solution.

2. PEST Analysis in Cambodia 

POLITICAL FACTORS

Cambodia has a constitutional monarchy in which the King serves as the head of state, and the prime minister is the head of government (1). In 1993, Cambodian government promulgated a constitution which proclaimed a liberal, multiparty democracy in which powers are devolved to the executive, the judiciary, and the legislature (2). The 1993 constitution helped the country for a more stable political environment after past decades of war and internal strife. Besides the internal modification, Cambodia has established diplomatic relations with most countries in the world including the US. This has created favorable conditions for both domestic and foreign enterprises when running their businesses.

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ECONOMIC FACTORS

Cambodia is a developing country with the GDP of 6.2 US$ billions (3) (2009). On 30 April 1999, Cambodia successfully became a member of ASEAN. In September 2004, Cambodia became a member of WTO. Joining these trade organizations has created many opportunities for economic development of this country. Cambodia has been one of the highly dollarized economies since the 1990s (4). Although Cambodian economy had certain development, Cambodia is a heavily aid-dependent country. Poor infrastructure is a barrier for Cambodia’s economic development. SOCIAL FACTORS The population of Cambodia (2008 census) is 13.4 million. 95% of the population have faith in Theravada Buddhism and the rest Islam, Christian, etc Cambodia has a literacy rate (2009) of 76%. (3) Khmer is a first language spoken by 95% of the population and English is increasing as a second language. Police and judicial systems in Cambodia are believed to be corrupt.

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 TECHNOLOGY FACTORS Most of the FDI brought their own technology when entering the country. This creates the possibility of spill-over of the technological knowledge to Cambodia.

3. PEST Analysis in Laos POLITICAL FACTORS Laos is a socialist state country that emphasizes public benefits. The legal systems and regulations were not attached special importance to quality, therefore they were very weak and loose. Trade relations with the United States were normalized in November 2004 through Congress-approved legislation which made the entry of DDD into Laos easier. (5)

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Laos and Cambodia had a lot in common in aspects of economic factors, social factors and technological factors. They both were developing countries. Laos was significantly less developed than Cambodia.

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ECONOMIC FACTORS

Laos was admitted into the Association of Southeast Asian Nations (ASEAN) in July 1999. It also became a member of AFTA ( in 1997) and IMF. In 2005 it attended the inaugural East Asia Summit. Becoming a part of these international organizations, Laos stood a good chance of developing the economy. This also a big opportunity for DDD to expand its operation. Because the main source of income is through the agriculture industry, Laos was still poor with GDP per capita was only US$ 2,260 (PPP) ( in 2008) (6). In its “Ease of Doing Business'' survey, the World Bank ranked Laos 167 out of 183 nations. (3) The strength of Laos was that the unemployment rate was low, only 0,85% of the labor force (6). The same as Cambodia, there was little investment in Laos’s infrastructure.

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SOCIAL FACTORS

The population was 6,047 million ( in 2008) but the urban population just accounted for 29% (6). Buddhism has long been one of the most important social forces in Laos. The official and majority language are Lao, French is used in government and commerce. Although the Adult Literacy Rate was high (77%), the Secondary Enrolment Rate was only 38% (6). DDD found it hard to search for skilled and high-quality employees. Moreover, Laos did not have much demand for outsourcing services as Internet users just accounted for 2,1% of the population (3). This might be the biggest threat to DDD for continuing outsourcing services.

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TECHNOLOGY FACTORS

Last but not least, Technological factors in Laos did not have much of an impression. SMEs were faced with inefficient production technologies. Mostly, FDIs help SMEs develop by facilitating the transfer of technology.

4. CONCLUSION From PEST analysis, we can see a lot of difference between home country and host country. The large disproportion in the level of development as well as the conflict of political, economic and social factors had created many challenges for DDD. These challenges highlighted underlying causes for most of the strategic issues DDD was facing

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Strategy Recommendation We recommend Organic Growth strategy for the following reasons: DDD has a developed platform in IT outsourcing and technological services and the company has had experiences in developing branches in foreign countries. With the Organic growth strategy, DDD will be in complete control of the strategy and management of a new DDD office, which helps DDD stick to the vision and mission proposed. Besides, Organic Growth strategy could be initiated immediately, as DDD would not have to go through the process of vetting and negotiating with potential partners and will have a chance to optimize, reallocate resources, and carry out new product offerings. But when using Organic Growth strategy, it will put a heavy burden on the company's finances which is one of the facing issues. Therefore, before doing this strategy, we suggest: DDD should carry out research to evaluate the market, focus on the countries which receive foreign aid or support from international organizations, and are related to social concerns aligned with DDD’s social mission. DDD should have a standardized system in all branch to have best practices across organization and the company should cut off or merge inefficient operations to reduce costs and take advantages of all resources.

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REFERENCES (1), (2) https://en.wikipedia.org/wiki/Politics_of_Cambodia (3) Case 2 MIT 09-095 Digital Divide Data Lehrich (4) https://link.springer.com/chapter/10.1007/978-3-319-57768-5_2v (5) https://en.wikipedia.org/wiki/Laos (6)https://data.worldbank.org/country/lao-pdr

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