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ANALYZING SONY AND BITI'S CASE STUDY

A. ANALYZING SONY’S CASE

1. Introduce the company1


- Sony is a major Japanese manufacturer of consumer electronics products
- The company was founded by Akio Morita and Masaru Ibuka on May 7, 1946, and
is headquartered in Tokyo, Japan.
- Sony’s diverse activities have included films, music, and financial services, among
other ventures
- As a major technology company, it operates as one of the world's largest
manufacturers of consumer and professional electronic products, the largest video
game console company, and the largest video game publisher.

2. The situation of the case


- In the past, the Sony brand was revered as a symbol of innovation, style, and high
quality. It was the world’s largest consumer electronics company
- Because of the failed strategy, Sony lost its leading position. This company lost its
market share to other competitors such as Apple, Samsung.
- Recognizing the problem, Sony tried to turn things around and recovered in a short
period until it was damaged because of economic crisis, disasters

3. Answer the questions in the textbook

1, What microenvironmental factors have affected Sony’s performance since


2000?

- The company: Due to the rigid engineering culture of the company, the
performance of the company is not up to the mark. It failed to adapt to important
changes occurring all around it. Some internal conflicts in several divisions created
many problems. => Some departments in the company such as product
development, and technology, strategic planning.. did not give appropriate
development direction

- Competitors: When new companies began to emerge Sony did not adapt, but
companies such as Apple, Google, Amazon, and Samsung did. Instead, Sony
stayed the route that they had taken and unfortunately, this hurt the company more
than expected. Catching up with market trends, Sony's competitors quickly
surpassed it both in terms of revenue and sales.

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Sony | History, Products, & Facts | Britannica
- Customer: The rapid development of technology changed the preferences of
customers. They tended to use cutting-edge devices such as Apple products. It
resulted in Sony’s declining popularity among consumers.

2, What macroenvironmental factors have affected Sony’s performance during


that period?

- Technological forces: the fast technological advancement had a strong impact on


consumer trends in the market. As compared to other big competitors in the industry
such as Samsung, Apple, and LG, the company management has not integrated with
the modern technological trends. It has been revealed that the company is not in the
limelight in digital entertainment, and it seems the main factor, which impaired the
performance. In addition, the company also faced a hacking attack that invaded its
Internet entertainment services. April 2011, a hacking attack invaded the company’s
Internet entertainment services. In what was determined to be the second-largest
online data breach in U.S history, Sony was forced to shut down the PlayStation
Network.

- Economic forces: the global financial collapse and the yen trading near a post-war
high hindered Sony’s “reborn”. The international economic recession and financial
crises have hit the performance of the company hard, which set Sony back more
than one billion dollars.

- Social forces: Users tend to adopt more modern technologies, use smartphones and
watch online content, which changed the way consumers interact with electronics
and entertainment.

- Natural forces: Some extreme natural disasters such as earthquakes, tsunamis, and
fires caused heavy damage to Sony. Disasters made this company have to shutter
many plants and disrupted the production and distribution of Sony products.

3. What stands in the way of Sony’s success today23?

- Lack of brand evolution: Sony is now a strong example of a brand that survives
on “residual brand equity” rather than actively managing and building it. Sony only
relied on its past laurels and expecting consumers to have continued preference for
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https://martinroll.com/resources/articles/strategy/sony-battle-stay-relevant/
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Sony Corporation's Mismanagement as Decline Factor - 2836 Words | Case Study Example
(ivypanda.com)
the brand in the absence of any differentiated proposition has been Sony’s undoing
in recent years.

- Unrelated diversification: Sony engaged in unnecessary diversification, which


prevented the company from concentrating on its strong areas . Sony’s presence in
numerous businesses (electronics, online music stores, games, movies, and financial
services) has prevented the company from achieving market positioning. A lack of
brand focus undermines a business’s strength in the market since it cannot promote
itself competitively.

- Product-centered mindset: One of Sony’s significant failures was the company’s


inability to shift from a product-centered culture to customer-centered production.
Sony failed to adjust its strategy to suit emerging customer needs, the most notable
being customer experience. Competitors such as Apple’s iPhone jumped onto
emerging technology to offer customers experience-oriented gadgets.

- Fierce competition in the market: Sony is competing with brands that have been
around for many years such as Apple, Samsung, Google, and Amazon, not to
mention Sony now has low-cost competitors such as Haier, Hisense, and TCL.
Because of this Sony is falling by the wayside when it comes to products.
Companies such as Apple and Google have the flashy name and products that
people rely on every day.

- High-cost products: Sony’s success is hurdled by the presence of low-cost


competitors. Because of them, Sony’s market shares are shrinking which could be a
serious concern for Sony in the future. Consumers can easily get good quality
products from other brands in approximately half of the price offered by Sony.

4. Given Sony’s current situation, what recommendations would you make to


Hirai (CEO công ty) for the future of the company?

- Make innovation: Sony should initiate an effective research and development


process to create some breakout products. The importance of innovation for Sony in
its journey back to consumers’ minds has been emphasized before. But for
innovation to make any brand sense, it has to reflect and cater to consumer
preferences. Innovation has to lead to products and services that would enhance the
relationship between the Sony brand and the consumer.

- Focus on its strength: Sony operates in too many lines of businesses, namely,
semiconductors, mobile devices, cable television, stereos, movies, and financial
services among others. One of the disadvantages of over-diversification is the issue
of fighting competition on many different fronts. This situation means that colossal
resources are deployed to manage the overwhelming competition. Thus, it is
important for Sony to minimize the field it operates to focus only on a few
divisions, thus promoting innovativeness and efficiency.

- Understand customer needs: Sony should strive to produce items that are
desirable to customers, including televisions, smartphones, and cameras among
other devices. Sony should build and improve the features that customers are
interested in using. For instance, Sony’s smartphone has too many buttons and dials
that make it unappealing to the user. Instead, the company may incorporate a larger
touch screen with soft buttons. When Sony products meet the needs of customers,
they will still buy the product despite the high price.

4. How the case relates to the theories


a. Microenvironmental factors

- The company: Its organizational culture also undermined communication between


and among divisions within the company. Some internal conflicts in several
divisions created many problems.

- Competitors: When new technology began to emerge, Sony failed to adapt, while
Apple, Google, Amazon, and Samsung succeeded in embracing the changes.
Unable to keep up with market trends, Sony lost market share to competitors

- Customer: Shifting consumer preferences moved towards rival products like those
from Apple and Samsung, leading to an impact on Sony's market share

- 3 microenvironmental factors: Suppliers, Marketing intermediates and Public


is not mentioned in the case study
-

b. Macroenvironment (PESTEL)
- Economic:
+ Global Economic Conditions: The Great Recession and subsequent economic
challenges affected consumer spending on electronics, impacting Sony's sales and
profitability.
+ Exchange Rates: Fluctuations in currency exchange rates, like the strong yen, can
influence Sony's costs and pricing in international markets.

- Social:
+ Technology Adoption: Rapid adoption of digital technologies, smartphones, and
online content consumption altered how consumers engage with electronics and
entertainment.

- Technological:
+ The shift from standalone hardware to interconnected devices and digital content
consumption changed the landscape of the consumer electronics industry, which
Sony was slow to adapt to.
+ Innovations: Sony missed opportunities to capitalize on innovations like MP3
players, smartphones, and e-readers, despite having the technology to do so.

- Environmental: The earthquake, tsunami, and floods in Japan and Thailand


disrupted Sony's supply chain and production capabilities, causing substantial
losses.
- 2 macroenvironmental forces: Politics and Legal is not mentioned in the case
study

c. Sony’s response to marketing environments

Sony was caught in the middle of a perfect storm of environmental forces that
inhibited its growth and success. Facing the effects of microenvironments and
macroenvironments, Sony had 2 kinds of responses: uncontrollable and reactive

- Stage 1 - Uncontrollable response: Many companies view the marketing


environment as an uncontrollable element to which they must react and adapt.
They passively accept the marketing environment and do not try to change it. It
was what Sony do when facing the changes in the market.

+ Sony had everything it needed to create an iPod/iTunes-type world, but it continued


emphasis on its then-highly successful CD business.
+ Sony clung to its Trinitron technology. Meanwhile, Samsung, LG, and other
competitors were moving rapidly ahead with flat screens
+ Sony engineers loaded up the PS3 with pricey technology that produced a loss of
$300 per unit sold.

=> With the fast technological advancement, while competitors are constantly
integrating new technologies into their products, Sony was late to adapt. Facing
great competition from competitors, Sony behaved as though its market leadership
could never be challenged. Sony took its eye off the market and did not try to
change itself.
+ As Sony awoke to the reality of flattening revenues and plummeting profits, CEO
Stringer developed a turnaround plan aimed at changing the Sony mindset and
moving the company into the new connected and mobile digital age and then Sony’s
profits jumped 200 percent to $3.3 billion on rising revenue

=> Only after the crisis took place, Sony passively accepted the shift of technology in
the market and tried to adapt to this trend.

- Stage 2 - Reactive response: Marketing management cannot always control


environmental forces. In this case, Sony must settle for watching and reacting
to the forces of economic, technological, and natural environments.
+ Sony lost a billion dollars because of the global financial collapse and the yen
trading near a post-war high
+ In 2011, Sony had to suffer from many natural disasters: earthquake, tsunami, fire,
flood,... In addition, the company also faced a hacking attack that invaded its
Internet entertainment services.
+ Consequently, Sony had to shutter many plants and disrupted the production and
distribution of Sony products.

=> A series of disasters struck and all Sony can do was watch and react to the
environment by shuttering many plants and disrupting the production and
distribution of products.

d. Sony’s SWOT
- Strengths:
● Historical Innovation: Sony has a history of creating innovative products that
revolutionized industries, giving it a strong foundation of creativity and
engineering expertise.
● Diverse Business Portfolio: Sony has a range of products and services across
electronics, gaming, entertainment, and more, providing a diverse revenue
stream.
● Strong Brand Legacy: Sony was once revered as a symbol of innovation, style,
and high quality, contributing to a strong brand identity.
● Global Reach: Despite its challenges, Sony still has extensive global reach and
a presence in various markets.

- Weaknesses:
● Failure to Adapt: Sony struggled to adapt to changes in technology and
consumer preferences, leading to missed opportunities.
● Lagging in Technology: Sony fell behind in adopting new technologies, leading
to loss of market share to competitors like Apple, Samsung, and others.
● Resistance to Change: The company's culture and mindset often prioritized
hardware over content and services, limiting its ability to embrace new trends.

- Opportunities:
● Convergence of Services: Sony has the potential to integrate its various
businesses (gaming, entertainment, electronics) to offer comprehensive
entertainment solutions to consumers.
● Digital Distribution: Sony can leverage its entertainment content (movies,
music, games) by capitalizing on digital distribution platforms similar to
iTunes.
● Technological development: The Internet and digital technologies are on the
rise, creating a more mobile and connected world

- Threats:
● Competition: Strong competitors like Apple, Samsung, and other tech giants
have overtaken Sony in various markets and continue to innovate.
● Technological Shifts: Rapid technological advancements can continue to
disrupt industries and leave Sony further behind if it fails to adapt.
● External Events: Natural disasters, economic downturns, and hacking attacks
have shown the vulnerability of Sony's operations to external events.

=> In summary, Sony's decline from a once-dominant market position can be


attributed to its failure to adapt to changing technological trends and consumer
preferences. While the company retains strong engineering and design capabilities,
its resistance to change and emphasis on legacy technologies have hindered its
growth. However, opportunities still exist in leveraging its diverse portfolio and
unifying its businesses to cater to today's digital entertainment demands. The
company's future success will depend on its ability to embrace innovation, adapt to
market changes, and effectively integrate its various divisions for a comprehensive
entertainment experience.

5. The lessons learned in the case

- Grasp the opportunity: In this case study, there are plenty of other examples of
Sony’s failure to capitalize on market trends despite having the products to do so.
Sony continued to develop out-of-date products and failed. That’s why, brands
should recognize and seize chances to come up with the right direction.

- Constantly change and develop products: Sony was late to adapt to the
technology trend, which result in a loss in Sony’s market share. In fact, consumer
needs and wants are always changing, and businesses that don’t keep up will
eventually fall behind.

- Do market research before launching new products: Sony failed to sell new
products because of taking its eye off the market. So a company should initiate
effective research about customer preferences, competitor strategies, market trends,
and external factors. Market research helps businesses adapt to important changes in
the market and develop effective marketing strategies.

- Prepare plans and solutions to avoid negative effects of internal and external
factors: Facing the impact of marketing environments, the responses of Sony were
extremely passive, which caused great damage to Sony. The company should
analyze the market, then come up with long-term plans and solutions to be able to
promptly respond when problems arise.

- Understand customer needs: Sony only focused on developing products, instead


of meeting emerging customer needs. That’s why, Sony lost reached catastrophic
levels and market share. Understanding customer needs will help the company
retain existing customers and attract new customers

B. ANALYZING BITI’S CASE

1. Biti’s introduction
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- Vietnamese footwear brand Biti’s was founded in 1982 by Vuu Khai Thanh and
Lai Khiem.
- Biti’s dominated the domestic market with their high-durability sandals in the
late ‘80s and ‘90s.
- In 2016, Biti’s made a turning point in the Vietnamese footwear market by
launching a completely new product, Biti’s Hunter after a period of absence in
the market.
- A distribution system of Biti's products stretching from South to North with 07
Branch Centers, 156 Marketing Stores, and more than 1,500 retail distribution
intermediaries.

4
Về Biti's (bitis.com.vn)
- In China, Biti's has set up 04 representative offices with 30 total sales and more
than 300 sales points to gradually bring Biti's products to dominate this
potential cross-border market. With the potential Cambodian market, Biti's has
an official distributor Cambo Trading Company to distribute Biti's products
throughout Cambodia. Biti's has exported to 40 countries around the world
such as Italy, France, the UK, the USA, Russia, Japan, South America, Mexico,
Cambodia, etc.

2. The situation of the case56


7

● Stage 1 (1990s): Golden Age


In the 90s, Biti's was a brand that everyone was willing to trust and buy. The
reason is that Biti's products are durable, smooth, and true to the message
“Nâng niu bàn chân Việt” that the company always sets. At that time, Biti's
sandals accounted for 70% of the footwear market in Vietnam.

● Stage 2 (2000-2016): Loss of leading position


- By the 2000s, Vietnam's economy was open, and foreign competitors began to
capture the Vietnamese market: Nike, Adidas, Vans, Reebok, and New
Balance. The quality and design of these products far exceeded Biti's at that
time.
- At this stage, many users had xenophile psychology (tâm lý sính ngoại),
preferring to consume international goods with trendy products. At that time,
Bitis's durability advantage had lost its effect
=> Biti's lost its position in the market

- Faced with that situation, Biti's was too passive in product innovation.
Slowness in thinking and coming up with a proper business strategy was the
reason that killed Biti's

● Stage 3 (2016-2019): Successful comeback


- After a long slide for more than a decade, Biti’s began to change its business
strategy and product quality.
- To keep up with the market's sneaker trend, in 2016, Biti's launched the Biti's
Hunter sneaker product line. Compared to previous products, Biti's Hunter was
almost completely outstanding in terms of price and design.

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https://www.brandsvietnam.com/11374-Tu-ngac-ngoai-Biti-s-bong-vuon-minh-troi-day
- In addition, taking advantage of the power of communication, Biti's actively
promoted its products on social networking sites - one of the indispensable
parts of young people's lives. Their advertising campaign went viral on social
media, resulting in a 300% increase in sales.
- In the following years, Biti's profit continued to grow

● Stage 4 (2020 - up to now): Lost again


- The growth chain was broken, and revenue decreased in two years 2020 and
2021
- One of the factors that contributed to this failure was the impact of Covid 19
cause Biti's business activities to suffer many impacts: operating costs were
pushed up, and the retail chain was interrupted continuously.
- During the Covid 19 pandemic, the shopping needs of users have changed.
People don't spend money on fashion items but focus on necessities and food
- The next reason was product quality, after 2020, experts no longer appreciated
the quality of Biti's new products. Meanwhile, users tended to use sustainable
products, and the rigor of quality increased

3. The similarities between the two cases

SONY BITI’S Similarity

Stage 1: SONY was the world’s Biti's sandals accounted Both companies had
Golden Age largest consumer electronics for 70% of the footwear leading positions in
company market in Vietnam. the market

Stage 2: Loss - Competitors: When - Competitors: Foreign Both 2 brands had to


of leading competitors such as Apple, competitors began to be influenced by some
position Google, Amazon, and capture the Vietnamese microenvironmental
Samsung entered the market market: Nike, Adidas, factors and
with new technologies, Sony Vans, Reebok, and New macroenvironment
lost market share to Balance. These foreign forces:
competitors enterprises + Lost market share
- Technological forces: continuously put great to rivals
Rapid technological pressure on Biti's + Changed in the
advancement changed the market share needs of
needs of customers with - Economic forces: customers of 2
technological products Open economy created brands.
- Social forces: Users tended conditions for + Technological
to adopt more modern international brands to forces (Sony) and
technologies, use enter the market economic forces
(Biti’s) facilitated
smartphones, and watch - Social forces: Many entering the
online content users had xenophile market of their
psychology, preferring competitors
to consume
international goods
with trendy products

- With the fast technological - Biti's was too passive in - Facing the problem,
advancement, Sony was late product innovation Sony and Biti’s
to adopt - Did not come up with passively made
- Sony took its eye off the new business strategies innovation
market and did not try to fastly - 2 brands lost their
change itself. - Biti's was "out of date" leading position in
- Sony fell so hard so fast and gradually forgotten the market

Stage 3: - CEO Stringer moved in to - Biti’s transferred power - Both 2 brands


Successful put Sony back on track. from the founder to adapted to the
comeback - The strategy was that CEO Vu Le Quyen. She market trend
move the company into the quickly came up with a - Sony and Biti’s
new connected and mobile proper strategy changed their
digital age - Biti's launched the business strategy
- The company was ready to Biti's Hunter sneaker and develop a new
launch new products product line with a product
- Sony’s profits jumped 200 modern design and - 2 brands bounded
percent to $3.3 billion on affordable price back after failure
rising revenue. - Biti's promoted Biti’s
Hunter sneaker on
social media, which
was viral
- During 3 years, Biti's
profit had always
grown at a high level

Stage 4: Lost - Environmental forces: - Environmental forces: - Sony and Biti’s


again Natural disasters such as With the rapid spread were influenced
earthquakes, tsunamis, and of the Covid-19 heavily by disaster,
fires caused heavy damage epidemic, Biti's faced a pandemic
to Sony. lack of employees as - The economic crisis
- Economic forces: the well as customers. disrupted the
global financial collapse - Economic forces: The business operations
and the yen trading near a epidemic has inhibited of two companies
post-war high hindered the development of the - Both profits of
Sony’s “reborn” world economy, and Sony and Biti’s fell
- Technological forces: a many businesses had to
hacking attack that suspend business,
invaded Sony’s Internet including Biti’s
and entertainment services - Social forces:
+ People spent money on
=> Consequently, Sony lost a necessities and food
billion dollars and shuttering + Users tended to use
many plants, sustainable products,
and the rigor of quality
increased
=> The growth chain was
interrupted, the retail
chain was interrupted
continuously

=> Conclusion: Due to the difference in category, the micro and macro
environmental factors affecting Sony and Biti's are not exactly the same. However,
both brands react in the same way so the results at each stage are totally similar

4. How did Biti’s solve the problem


a. Launch a new product line
- To keep up with the market's sneaker trend, in 2016, Biti's launched the Biti's Hunter
sneaker line.
- Compared to previous products, Biti's Hunter is almost completely different. Although
it still has the appearance of foreign sneaker styles, Biti's Hunter still has its own
characteristics of Vietnam.
- In addition, the price only ranges from 600,000 - 700,000 VND for a quality sneaker,
only ⅓ compared to competitors' products.
- This new line has elevated Biti's to the top of the youth footwear brand rankings,
making it one of the 'must-have' fashion items.

b. Come up with a proper marketing strategy

● Challenge: Biti's needs to overcome a long-standing thinking in the Vietnamese


mindset that only believes in foreign brands.
● Orientation: Learn to change the core positioning of the brand in the customer's mind

=> Strategic: AIAD Model


1. Attention

At the end of 2015, the information that Biti's strongly spent 5 million USD to invest
in technology to produce quality sports shoes "made in Vietnam" was not confirmed.
In 2016, the information was confirmed when the product lines of Biti's Hunter were
born when the brand turned 34 years old. Very quickly, this product brand created a
fever with beautiful design, cheap price. than other products in the same segment
(only about half that of foreign products).

Gradually revealed from April 2016, Biti's Hunter started with campaigns such as:
collaborating with billion-dollar startups in #uberMOVE, marketing program
"Internship Dream" - Young Marketers 5, becoming the subject of a marketing contest
especially creating fierce debates on social networks during the event. Tet, should you
go on a trip or go home?

At the end of 2016, there was a series of controversies regarding whether to return to
family during Tet, or to go to experience more of life out there. This is always an
unending controversy every Tet holiday, when Eastern culture emphasizes affection
and family cohesion, and young people want to be themselves. Specifically, the online
community actively participated in heated debates when KOLs supported two
opposing views as follows:

#teamdi: Family sentiment should be built throughout the year, not just on New Year's
Day. Finding experiences to increase living capital, knowing how to love and
appreciate what you have is completely worth supporting, and "Returning is in the
heart, the footsteps are not fault"

#teamtrove: It's not wrong to go but it's worth going at the right time and Tet is the
time when we need to spend time with our parents and family!

At the height of the controversy, Biti's and Soobin Hoang Son released a video clip
with the message "Di de tro ve", a profound message and convey a very different
definition of "di". Right after that, the explosion of information about Biti's Hunter
was pushed to the climax on New Year's Eve 2017 when Biti's Hunter shoes appeared
briefly in the MV “Lac Troi” by Son Tung - the male singer who always creates a
trend with any music product just released. Biti's shoes of two singers that are causing
fever among young people quickly sold out in both stores and online sales channels of
Biti's, Lazada or Tiki. According to data from Google Trend, 2 hit MVs have pushed
Biti's search to the highest level in the past 5 years.
This strategy has similarities with Nike's Marketing strategy: Michael Jordan -
Basketball Legend. As the 1980s running shoe market slumped, Nike aimed for a
grander goal. They risked their billion-dollar brand to align with a global icon,
Michael Jordan. Initially not famous and facing racial discrimination, Jordan was
hesitant to endorse Nike. After persistent persuasion and a significant contract, Nike's
investment paid off as Jordan's career soared. Nike's revenues reached $900 million,
then surged to $9.19 billion with Jordan's 5th championship. Nike's share of the
basketball shoe market skyrocketed from 0% to 95%, once controlled by Converse,
later acquired by Nike in 2003.

2. Interest

Additionally, Bitis has employed KOLs marketing strategy to stimulate customers'


affection for the product. Having Key Opinion Leaders utilize and provide reviews of
the product will enhance trust and accelerate customer purchasing behavior.

3. Desire

One of the typical ways used by Biti’s to stimulate the desire and consumption needs
of customers is to use the press to communicate.

The first are just PR articles tacitly hitting on patriotism "Vietnamese people use
Vietnamese goods", then there are PR articles directly aimed at products. Bitis has
succeeded in changing the traditional mindset of Vietnamese people towards locally
made products.

4. Action

Bitis has partnered with various e-commerce websites to launch promotional programs
aimed at stimulating customer purchasing behavior. This approach enhances sales
figures by encouraging customers through discounts and special offers, thus creating a
surge in shopping activity within a short timeframe. Furthermore, it boosts demand by
making products more appealing from a value standpoint, generating a desire to own
them.

=> According to Professor Jonah Berger, author of the book The Viral Effect, there are
six factors for an idea or product to get word-of-mouth. It has elements that are easy to
recall, create emotions, have useful value, have a story to tell, a high frequency of
appearances and social recognition... Biti's Hunter is lucky and good enough to have.
get these factors.

5. Recommendations
● Product:
- After 2020, industry experts no longer appreciate the quality of Biti's new products,
although they are quite eye-catching and have a trendy style => Bitis is abusing and
relying on marketing tools, lacking concentration on the core value of the product
- Therefore, Biti's should focus on developing its products before implementing
marketing campaigns. Customer needs are always changing and becoming more and
more demanding. Constantly improving product quality as well as trendy new models
will help Biti's retain existing customers and reach more new audiences.

● Promotion:
- The explosion of "Đi để trở về" has left an enormous shadow for Biti's to overcome.
Biti's subsequent campaigns did not resonate and leave an impression on users. There
are even big controversial campaigns like Flower in the Stone – Biti's Hunter Street X
Vietmax => Biti's recent campaigns are too safe, and there is no breakthrough

- In parallel with product development, Biti's should research and prepare for a strong
media campaign combined with progressive Vietnamese values to have a more
resounding comeback.

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