Executive Summary

This report aims to make project plan and to handle project management for launching

the first Cromia store in Vietnam. Some important parts which need to defined as an

important elements of project management are (1) finding project challenges, (2)

defining project scope, (3) establishing project priorities, (4) Work Breakdown Structure,

(5) Cost estimation, (6) Defining Critical Success Factors for the project. This report

highlights project management tools such as Work Breakdown Structure and Cost

estimation tools.

Table of Content

1. Company and Project Introduction............................................................................1

1.1. Background.........................................................................................................1

1.2. Project summary.................................................................................................2

2. Project challenges.....................................................................................................3

2.1. Challenges from external environment:..............................................................3

2.2. Challenges from internal resources....................................................................3

3. Project Scope............................................................................................................4

3.1. Project Objective.................................................................................................4

3.2. Deliverables........................................................................................................5

3.3. Milestones...........................................................................................................5

3.4. Technical Requirements.....................................................................................6

3.5. Limits and Exclusions.........................................................................................6

4. Establish Project Priorities.........................................................................................7

5. Work Breakdown Structure........................................................................................7

6. Cost Estimation.........................................................................................................8

6.1. Method for cost estimation..................................................................................8

6.2. Costing summary..............................................................................................10

6.3. Time phase budget...........................................................................................11

7. Discuss the Critical Success Factors (CSFs) for the project...................................13

8. Conclusion...............................................................................................................14

9. References..............................................................................................................15

1. Company and Project Introduction

1.1. Background

Muchas International Pte is a Singapore based company which specializes on retail

distribution of handbags (CROMIA, Michelangelo, Pratesi) and Jewelry (Muchas J). For

Cromia, Muchas International Pte is a licensee in Asia region and has developd Cromia

counters in three countries such as Hong Kong, Singapore and Russia.

Established in Italy in 1963, Cromia has been known as leather bag brand with

contemporary and complicated shape handbag. Cromia’s specific characteristics are (1)

The Culture of Leather – all items are hand made with the use of leather and (2)

Complicated shape. Some pictures of FW (Fall Winter) 2016 are shown in Figure

Aiming to expand CROMIA into foreign countries, Muchas International Pte decided to

launch the first CROMIA store in Vietnam to adopt the trend: spending more on leather

handbags of Vietnamese consumers. Leveraging the launch of Fall/Winter 2017,

Muchas International Pte launches the first CROMIA store in Vietnam. This report aims

to develop project plan for the launch of CROMIA store and to analyze how project

management can create the project success. To support for project plan and analysis,

this project has used some tools such as (1) Work Breakdown Structure and (2) Cost

Estimation.

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Figure 1: New CROMIA collections – Fall Winter 2016

1.2. Project summary

The project is to launch the first Cromia store in Vietnam, thus handling parts such as:

- Project challenges: Identifying challenges which project management faces when

handling the project

- Project Scope: Defining objectives, deliverables, milestone, technical

requirements, limitations and exclusions and customer review

- Establish Project priorities: Defining the priority matrix of three factors: Time,

Scope and Cost

- Work Breakdown Structure: Breakdown deliverables into stages and sub-

deliverables

- Cost Estimation: Estimating total cost which the project spends on

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- Critical Success Factors for the project: Defining important factors which help the

project avoid challenges and risks

2. Project challenges

The project can face challenges from external and internal resources which are caused

by uncertain and complex environment and the lack of organizational abilities, thus

making project risk management one of the most critical concerns for managers and

executives (Junior and Carvalho, 2013).

2.1. Challenges from external environment:

Highly intensive competition in handbag industry in Ho Chi Minh: Handbag brands such

as FURLA, Braun Buffel, Bonia, Guy Laroche, Morgan, Louis Fontaine, Tocco Toscano,

Tocco Tenero, Carlo Rino, Valentino Creations, etc. have built long term reputation in

Ho Chi Minh market, thus generating big barrier for CROMIA to launch into market.

Challenges from customer demands:

- Market uncertainty is impacted by economic crisis, thus influencing on customer

demand and preference (Cui et al, 2011).

- Impacted by economic crisis, customers spend less money on purchasing

unnecessary goods, including handbags

Challenges from regulations and laws: Business establishment, Corporate Tax Law and

Regulation, Promotion License for any promotion program.

2.2. Challenges from internal resources

Scope, Time and Cost are three critical elements for project success. Thus, issues in

terms of scope, time and cost leads the project to face challenges. The lack of good

project management will make the project delayed, over the budget and inefficient

scope approach.

External and internal challenges for the project – Launching the first CROMIA store in

Vietnam are shown in Figure 2

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Figure 2: Challenges for the project – Launching the first CROMIA store in Vietnam

3. Project Scope

Project scope aims to define (1) project objective, (2) deliverables (what the project

need to implement), (3) milestones (timeline for each deliverable), (4) technical

requirements (standards which need to be satisfied when handling the project), (5)

limitations and exclusions, and (6) customer review

3.1. Project Objective

Launching the first Cromia handbag store in Vietnam has some objectives:

- To build Cromia brand image as Italian genuine leather handbag brand with

classy design & shape and complicated style

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CHALLENGES FOR LAUNCHING THE FIRST CROMIA STORE IN VIETNAM

External challenges

1. Challenges from intensive competition

2. Challenges from uncertain customer demand

3. Challenges from regulations and laws in retail industry

Internal challenges

Challenges from the lack of good project management

- To leverage potential demand of customers on leather good. Previously,

Vietnamese consumers were interested in PU bags which have affordable price.

However, PU bag revenue has been decreased due to low product quality while

demand on leather has been increased, thus encouraging many brands to launch

into Vietnam market.

- Launch Cromia is to fill up opportunity gap – fashionable and functional

handbags, contemporary and classy bags, every occasion bags.

- Preparation time for this project is 5 months from October 2016 to February

2017.

3.2. Deliverables

There are some deliverables which need to be delivered

(1) Survey market demand

(2) Look for location for the first store

(3) Design and set-up store

(4) Making merchandising plan

(5) Marketing plan for the launch event and grand opening

(6) Making staff training plan and execution

3.3. Milestones

To make sure the project is implemented as per the schedule, project management sets

up milestone for each deliverable in Table 1

Table 1: Milestones of the project – Launching the first CROMIA store in Vietnam

No. Deliverables Starting date Finishing date Duration

1 Survey market demand 01 October 2016 31 October 201622 working

days

2Look for location for the

first store01 November 2016

30 November

2016

22 working

days

3 Design and set-up store 15 November 2016 31 January 201756 working

days

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4 Merchandising plan 15 November 201628 February

2017

76 working

days

5 Marketing plan 01 January 201630 February

2017

3.4. Technical Requirements

As the first Cromia store in Vietnam, this project needs to ensure some technical

requirements in terms of store location, store design and concept and branding activity.

(1) Feasible and high traffic flow location is highly required because as the first

launching in Vietnam market, Cromia store needs to be located in good feasibility

to reach customers

(2) Store concept and design: Must follow principle guideline and create good visual

display and selling display

(3) Launching event: Inviting guests and some celebrities for this event

3.5. Limits and Exclusions

For each technical requirement, Cromia project management faces some limitations

and exclusions:

(1) The difficulty in finding good location for the first CROMIA store in Ho Chi Minh

city because Cromia chooses location based on not only good location of

department store/shopping mall but also good tenant mix (category mix) to

position CROMIA in new market

(2) The rush time makes project team pressure and feel challenged to make sure all

of things relating new store are handled as per the schedule

3.6. Customer review

Two persons in Operation Team (Ms. Lan and Mr. Son) will handle customer review on

customer demand on leather handbags, effective communication and distribution

channels.

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4. Establish Project Priorities

Three project priorities such as Time (Schedule), Cost and Scope trade off. For

example, the focus on Scope will increase the Cost (Over the budget) and extend the

Time (Behind the schedule). Therefore, project management needs to make priority

matrix for these factors

Branding is the most important goal for CROMIA to launch in Vietnam because

CROMIA wants to create CROMIA awareness on customers’ mind as the first step

entering to new market. Hence, the scope of this project is the first priority and leveled

as “Constraint”.

Aiming to open counter before Tet holiday to approach highest demand level yearly,

Cromia strictly follow the tight schedule, considering Time really important. Rather, other

deliverables such as merchandising and marketing as well as project scope can be

impacted negatively. Hence, Time needs to be prioritized at “Enhanced”

The last priority of this project is Cost. For the first launch in Vietnam, Cromia prioritizes

on branding, thus focusing on project scope (high customer awareness and reputation).

Hence, even though cost or expenditure is one of important concerns, spending more

money to expand the project scope is much more important than reducing cost.

Table 2: Project Priority Matrix

Scope Time Cost

Constraint

Enhanced

Acceptable

5. Work Breakdown Structure

Work Breakdown Structure (WBS) is used for project management because it divides

the project into stages, deliverables and sub-deliverables, following top-down procedure

(Norman et al, 2008; Siami-Irdemoosa et al, 2015). With six main deliverables as above,

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the project – launching the first Cromia store in Vietnam is detailed with WBS in Figure

3

Figure 3: Work Breakdown Structure for the project – Launching the first Cromia store in Vietnam

6. Cost Estimation

6.1. Method for cost estimation

For estimating cost, project management can use one of two cost estimation methods –

Top Down approach and Bottom-up approach (Larson and Gray, 2011).

Top down approach is the approach in which the information flow starts from the top of

the organization to lower level. Hence, this approach is handled by management and

has some advantages (Rosenau and Githens, 2005). First, with clear vision and much

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Launching the 1st Cromia store in

Vietnam

Survey market demand

Market survey through different

channels

Market segmentation, targeting and

position

Look for store location

Working with retailers to

negotiate location

Get retail license for confirmed

location

Design and store set up

Designing and get approval

Contractor confirmation

Fitting out and inspection

Making merchandising

plan

Merchandising planning

(Colletions, SKUs,etc)

Logistics and import procedure

Merchandising display

Marketing plan

Marketing planning

Online and offline marketing

Activity/Event

Staff training plan

Staff recruitment

Staff training and review

experience, project managers can budget the project in the effective way and determine

effective resource usage. Second, with higher management, the project resources are

controlled more effectively. However, this approach also has some disadvantages such

as (1) need of expertise to allocate resources and estimate cost and (2) difficulties for

handling process because managers are little knowledgeable about lower level’s tasks

(Chapkho et al, 2009).

Bottom Up approach starts from lower level organization with basic components to

higher level to accumulate all budgets. Hence, this approach usually starts from carrying

out research to know each cost and then come up with total budget. This approach has

some advantages. First, this approach facilitates coordination and communication from

all levels, thus generating employee motivation. Second, this approach is suitable for

large project. Third, with the participation from both employees and managers, this cost

estimation approach is accurate with details (Schwalbe, 2007).

Both approaches have advantages and disadvantages but choosing more suitable

approaches depends on some conditions (Figure 4). For the project – launching the first

CROMIA store in Vietnam which is in stable scope and low uncertainty, project

management will choose Bottom Up approach.

Figure 4: Conditions for Bottom Up and Top Down Approach

Source: Adapted from Larson and Gray (2011)

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6.2. Costing summary

There are six main kinds of cost for this project such as (1) survey market demand, (2)

look for store location, (3) design and store set up, (4), merchandising plan, (5)

marketing plan, and (6) staff training plan

Table 3: Cost estimation for the project – Launching the first CROMIA store in Vietnam

Deliverables/Sub-deliverables Cost ($) Cost ratio (%)1.0 Survey market demand 3,000 2.0%1.1 Market survey through different channels 1,500 1.0%

1.2 Market segmentation, targeting and position 1,500 1.0%

2.0 Look for store location 15,000 10.0%2.1 Working with retailers to negotiate location 10,500 7.0%

2.2 Get retail license 4,500 3.0%

3.0 Design and store Set-up 45,000 30.0%3.1 Design and get approval 10,500 7.0%

3.2 Contract confirmation 4,500 3.0%

3.3 Fitting out and inspection 30,000 20.0%

4.0 Making merchandising plan 46,500 31.0%4.1 Merchandising buying 37,500 25.0%

4.2 Logistics and import procedure 7,500 5.0%

4.3 Merchandising display 1,500 1.0%

5.0 Marketing plan 37,500 25.0%5.1 Marketing planning 1,500 1.0%

5.2 Online marketing 6,000 4.0%

5.3 Offline marketing 15,000 10.0%

5.4 Activity/Event 15,000 10.0%

6.0 Staff training plan 3,000 2.0%6.1 Staff recruitment 1,500 1.0%

6.2 Staff training and review 1,500 1.0%

Total 150,000 100.0%

Table 4: Detailed marketing cost

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Cost ($) Cost ratio (%)Online marketing 6,000 4.0%

Website 3,750 2.5%

Social media 2,250 1.5%

Offline marketing 15,000 10.0%

Magazine 6,000 4.0%

TV 9,000 6.0%

Total 21,000 14.0%

6.3. Time phase budget

Time phase budget is considered one of important cash flow management tools (Larson

and Gray, 2011) because it helps project management predict how much they can

spend in each period of project timeline (Stratton, 2006), thus knowing how to control

cost for the project through controlling cost of each deliverable and each activity.

Rather, project management can use Time phased Cost Estimation to understand

future process of expenditures and funding for each phase of the project (Wilson, 2014).

Time-phased cost for the project – Launching the first CROMIA store is shown in Table.

It means that project management does not need the total money of 150,000 in the

beginning of the project but need to know the amount of money for each month. For

example:

(1) October 2016: $3,000 for survey market demand

(2) November 2016: $32,250 for store location seeking, store design and

merchandising plan

(3) December 2016: $40,250 for store set up and merchandising plan

(4) January 2017: $44,000 for merchandising plan, marketing and staff training

(5) February 2017: $30,500 for marketing plan and staff training

Table 5: Time phased cost for the project – Launching the first Cromia store in Vietnam

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Deliverables/Sub-deliverables Cost ($)

Cost ratio (%)

Oct-16

Nov-16

Dec-16

Jan-17

Feb-17

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1.0 Survey market demand 3,000 2.0% 3,000

1.1Market survey through different

channels1,500 1.0% 1,500

1.2Market segmentation, targeting

and position1,500 1.0% 1,500

2.0 Look for store location 15,000 10.0% 15,000

2.1Working with retailers to

negotiate location10,500 7.0% 10,500

2.2 Get retail license 4,500 3.0% 4,500

3.0 Design and store Set-up 45,000 30.0% 9,750 25,250 10,000

3.1 Design and get approval 10,500 7.0% 5,250 5,250

3.2 Contract confirmation 4,500 3.0% 4,500

3.3 Fitting out and inspection 30,000 20.0% 20,000 10,000

4.0 Making merchandising plan 46,500 31.0% 7,500 15,000 24,000

4.1 Merchandising buying 37,500 25.0% 7,500 15,000 15,000

4.2 Logistics and import procedure 7,500 5.0% 7,500

4.3 Merchandising display 1,500 1.0% 1,500

5.0 Marketing plan 37,500 25.0% 8,500 29,0005.1 Marketing planning 1,500 1.0% 1,500

5.2 Online marketing 6,000 4.0% 2,000 4,000

5.3 Offline marketing 15,000 10.0% 5,000 10,000

5.4 Activity/Event 15,000 10.0% 15,000

6.0 Staff training plan 3,000 2.0% 1,500 1,5006.1 Staff recruitment 1,500 1.0% 750 750

6.2 Staff training and review 1,500 1.0% 750 750

Total 150,000 100.0% 3,000 32,250 40,250 44,000 30,500

The difference on the amount of expenditure is shown in Figure 5

Figure 5: Time phase cost estimation for 05 months from October 2016 to February 2017

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Oct-16 Nov-16 Dec-16 Jan-17 Feb-170

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

7. Discuss the Critical Success Factors (CSFs) for the project

As defined by Alias et al (2014), Critical success factors (CSFs) are inputs for project

management practices to lead the project successfully. Time, Cost and Scope are

criteria of project success, thus CSFs helps project management achieve goals in terms

of these three criteria (Walker and Shen, 2002). SCFs which are summarized from

many literature are (1) support from management team (White and Fortune, 2006),

skilled and excellent managers and executives (Chan et al, 2001), good team working

and team motivation (Chan et al, 2001), excellent communication channels (Alias et al,

2014), and good management skills in terms of planning, monitoring and feedback

(Alias et al, 2014).

For the project – launching the first CROMIA store, CSFs will be defined based on

mitigating or avoiding challenges of the project, both external and internal challenges.

- Challenge from highly intensive competition: Some strategies to avoid these

challenges are (1) keep all information in regards to CROMIA’s launch plan

confidential (Tankha and Bout, 2010) and (2) create differentiation for CROMIA

bags. These strategies are well implemented by leveraging CSFs such as (1)

support from management team to protect information and (2) skilled designers

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to create differentiated design and skilled management teams to implement

excellent value chain.

- Challenge from uncertain customer demand: Some strategies suggested are (1)

Adopt flexible strategy for customer demand changes (Zhou and Wu, 2010) and

(2) handling pull marketing tools to generate demand and boost sales (Johnson

et al, 2012). These strategies are implemented successfully under the support of

some factors (CSFs) such as team working and good management level

- Challenges from the lack of understanding on regulations and laws: Some CSFs

for project team to avoid these challenges are skilled legal team

- Challenges for the delay, over the budget and inefficient scope approach: Some

strategies to avoid these challenges are (1) daily review to follow the process and

understand current situation, (2) develop communication channels to follow-up all

activities, and (3) using project management techniques such as Work

Breakdown, Cost estimation, etc. To handle these strategies, CSFs are excellent

managers/executives and good project management.

8. Conclusion

Originating from Italy and expanding to some Asian countries such as Singapore, Hong

Kong, Russia, Cromia leather handbag identified the demand of Vietnamese customers

on leather handbags, thus deciding to launch the first CROMIA store in Vietnam. This

report summarizes challenges of the project (external challenges: competition, demand

uncertainty, regulations and laws), project scope (six deliverables such as Survey

market demand, location seeking, design and store set-up, merchandising plan and

marketing plan), project priorities (Scope is constraint, time is enhanced and cost is

acceptable), Work Breakdown Structure (develop deliverables with sub-deliverables

need to be done), cost estimation (including time phased cost), Critical Success Factors

(good management skills, skilled managers and executives, good team working and

motivation. These CSFs are defined based on challenges of the project, meaning that

they help to avoid challenges leading to project failure.

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9. References

Alias, Z., Zawawi, E.M.A., Yusof, K. and Aris, N.M. (2014). Determining Critical Success

Factors of Project Management Practice: A conceptual framework. Procedia - Social

and Behavioral Sciences, 153 ( 2014), 61 – 69

Chan, A.P.C., Ho, D.C.K. and Tam, C.M. (2001). Design and Build project success

factors; Multivariate analysis. Journal of Construction Engineering Management, 127(2),

93-100

Junior, R.R. and Carvalho, M.M. (2013). Understanding the Impact of Project Risk

Management on Project Performance: an Empirical Study. Journal of Technology

Management and Innovation, 8 (2013), 64 -78

Norman, E.S., Brotherton, S.A. and Fried, R.T. (2008). Work Breakdown Structures:

The Foundation For Project Management Excellence. Canada: John Wiley and Sons,

Inc.

Rosenau, M.D. and Githens, G.D. (2005). Successful Project Management: A Step-By-

Step Approach with Practical Examples. 4th Eds. Canada: John Wiley & Sons, Inc

Siami-Irdemoosa, E., Dindarloo, S.R. and Sharifzadeh, M. (2015). Work breakdown

structure (WBS) development for underground construction. Automation in

Construction, 58 (2015), 85 – 94.

Schwalbe, K. (2007). Introduction to Project Management. 2nd Edition. Cengage

Learning.

Stratton, R.W. (2006). The Earned Value Management Maturity Model. 1st ed Vienna,

VA: Management Concepts

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