Introduction Of Knowledge And Knowledge Management Commerce Essay

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Knowledge is the understanding of person about things or situations which are accumulated through experiences, education and study to use it for a specific purpose. Knowledge gained from data and information. Knowledge helps to convert data into information and could be store in human brain or manual or computer. But knowledge differs from data or information in that new knowledge may be created from existing knowledge using logical inference. The information will be combined to make knowledge; it is a process of transformation. Based on experiences and understanding that individual will select the appropriate data and information to apply in each different case. Knowledge is not an opinion or a guess.

Knowledge has created as follow:

Figure 1: The continuum of understanding

Data were generated from outside through facts as: price, temperature, news, and figure…etc…after that data will arrange and present to make information that corresponds with appropriate conditions or situations. Data and information deal with the past. Finally, the information will save and become knowledge, it deals with the present. The knowledge will develop higher than and become wisdom in the future.

Knowledge management is a combination and the deliberate of an organization's people, technology, processes and organizational structure to apply in management through creating, sharing and applying knowledge. In the area of knowledge management, a large part of knowledge is not explicit but tacit. Tacit knowledge is characterized by the fact that it is personal. Sometime, tacit knowledge can't transfer to other persons by mean of writing and it is not easily share therefore hard to formalize and communicate. Explicit knowledge is knowledge that can be articulated or codified and can be transmittable through any systematic language such as: media, magazines, books. "Polanyi contends that human beings acquire knowledge by actively creating and organizing their own experiences. Thus, explicit knowledge represents only the tip of the iceberg of the entire body of knowledge"

Knowledge management requires a continuous knowledge conversion process. It is represented to base on four different modes of knowledge conversion. Those are:

Externalization (tacit to explicit) is the process of receive tacit knowledge through writing note, watching video or photo after that convert to explicit.

Combination (explicit to explicit) is process of receive available knowledge (e.g. books, magazines, report, assessment…etc…) to convert these knowledge to make new knowledge.

Internalization (explicit to tacit) is the process of learning and applying some of explicit knowledge that draw experiences.

Socialization (tacit to tacit) is the process of receive information from outside as form of building relationship , looking for more friends through sharing experience, discussion, team work…etc…

Figure 2 - The Nonaka and Takeuchi model of knowledge conversion

Form of knowledge management application within Pho 24.

Pho 24 noodles restaurant chain is owned by An Nam group which is the largest food in Vietnam, Pho 24 is a famous brand, its has achieved business success through that knowledge management application. Pho 24 outlet first opened in June 2003 and now has more than 60 stores in Vietnam and over 17 stores in abroad, such as: Indonesia, Philippines, Cambodia, Korea, Hong Kong, Australia…etc… Pho 24 makes the plan to open more stores in some cities of Vietnam and foreign countries such as: Japan, Taiwan, Malaysia, Thailand … Pho 24 is business concept; it is quite simple and easily replicates the small space requirement, low investment, operation procedures are the standardization. By capture the interest and need to be enhance in the eating through market survey and customer tastes, Pho 24 has seen the wonderful opportunity to create new business concept to meet high standard of customer but still retain traditional values. After 2 years, market research and especially taste of customer: "there must be fashionable taste, less fat, good eating, full of nutrient…etc…" Pho 24 has created a unique taste by combination 24 kind of spices. And it has attracted many customers everywhere.

Form business franchise help to share capital burden, labor and ability management, Pho 24 has expanded its brand everywhere. When a unit or individual wants Pho 24 brand business, they must do registration table, after that Pho 24 will consider their conditions, and carry on investigation, those steps to be Pho 24 select information about the unit or individual, if the unit or individual meets the requirement of Pho 24, Pho 24 will sign a franchise contract with the unit or individual. When has signed contract, the unit or individual needs to pay the initial franchise fee under the provision of Pho 24, this fee is use for joining and training staffs at Pho 24 chain stores, Pho 24 will offer training programs for franchisee not only in the early stages but also in business processes. The training program includes all the important aspects of business such as cooking methods, quality control, store manager…etc… Pho 24 will also support the evaluation, selection of staffs, building, design consultant, procurement of equipment. In addition, the unit or individual has to pay monthly franchise fee to maintenance of Pho 24 brand, as well as services, including: training staffs, marketing, promotion, original support, and research development of new product.

Pho 24 has given five reasons to buy franchise brand, those are:

Product: Pho noodle is very healthy. It is a wise alternative to fast food. It is delicious, and it has not gluten free. You can not fat with Pho.

Pho 24 is the most successful restaurant chain selling Pho and become the number one brand in Vietnam, with a powerful marketing

The investment is low compare to other form. This will help to lower the risk and quicken the return on capital.

The operation is quite simple, easily training and recruitment. Everything is standardization and presented in our operation manuals.

The business concept can be adjusted or modified to fit into the local cultures and requirement, Pho 24 understands that no concept is right for everyone. However, the taste of the noodle will stay the same for all countries, because they believe the authentic taste is always the winner.

With those reasons, Pho 24 has been successful within expanding their business activities. This is effective through applying knowledge management: investigating market and demand, making the acquaintance of personal taste, set up training…etc… Do not stop there; Pho 24 has been continuously attracting customers to Pho 24 brand by creating convenient for customers with form delivery and distribution of membership card (loyalty, prepaid) and voucher and the same, Pho 24 has associated the groupon that selling vouchers to customer and advertising Pho 24 brand (,, . It attracts many customers to arrive Pho 24 brand.

Pho 24 has orientated their object to be expanding stores; achieve profit growth through management, innovative and world-class technology. Pho 24 hopes to become a fast-food restaurant chain Vietnam World's number one

Competitive advantages through knowledge management.

Form of business franchise of Pho 24 has opened new form of business in Vietnam because of Vietnamese traditional noodle is small business or family business and the recipe will be kept secret while Pho 24 is sharing the recipe for business partners, the sharing is enclosing contract items. Pho 24 is a pioneer who has risen to eat noodle to be new level, those are: high quality service, clean, hygienic, cool space, nice food decorations. The franchise help Pho 24 brand become the chain stores and Pho 24 brand is well known, strong brand, professional management skill. Beside, Pho 24 has staff forces and managers whose have many experiences and expertise to be trained profession. This competitive advantage of Pho 24 beside Pho 24 also has business management and branches are synchronous, all branches were unified in design, service mode, and flavor Pho. Pho 24 also appeal to customers by Vietnamese food culture that this place. All stores are designed a uniform and homogenous, the furniture is painted back simple, not fussy, not decorative. Prominent on tone black and elegance that is white bowls and red lantern. All make the characteristic for Pho 24 brand.

Leadership and managerial skills help to success.

Pho 24 is focused on quality and deep development of business model therefore Pho 24 accepts the speed of model replicate more slowly than the market's needs. This will create a huge risk for the brand; competitor will copy its business model. Due to, Pho 24 has performed the registration of proprietary brand inside and outside country. However, building a strong brand is the key to sustained success, as only brand can not copy.

Pho 24 is build teams hygiene inspection and team quality inspection that they usually check kitchens, extraordinary shops. In addition, Pho 24 also organized a group called "client confidentially", this group would reflect the problems that is not good in the store when they come to eat by answer for the company several questions, that comment is only submit ideas. Of course, the "client confidentially" will be completely unfamiliar to the staffs of Pho 24. Thanks to the management measure and strict quality inspection, should be ensures quality and food safety and hygiene at Pho 24 outlet.

And the success of Pho 24 has proved by awards which Pho 24 has again in many years, such as: 7 consecutive gained "The Guide Award". In 2008, was awarded "International franchiser of the year" recognition by FLA Singapore. In 2010, top ten poll "Saigon - 100 interesting things" by tourists vote.

With the success, it has proved effective management and leadership of Pho 24 to be very good. But against Pho 24 do not enough, they will be continuously improved to make the better than.


Knowledge need for individual as business, if you or companies don't have knowledge you won't design goals or objective that orient activities of companies, don't have knowledge look like "three blind mans and an elephant", everyone have different look at about an elephant. Knowledge or knowledge management will provide information to identify what action they take opportunities to achieve goals and supporting in the creative and innovative process. However, must to choose congruent information as well as congruent knowledge to give right decision making.

Through applying knowledge management, Pho 24 has success when it bring Pho 24 brand as introduce noodle soup to customers. Opening new form of eating noodle soup (Pho), those are: cleaning, sanitation, safety, luxury and specific ensure health. However, this business model is competing fierce because of birth of new brand as well as: Pho Hung, Pho 2000, and oldest noodle soup (Pho) brand as Pho Le, Pho Quynh, Pho Hoa…etc…, birth of new brand require Pho 24 has to improve in service as improve ideas, have to form of promotions or advertising that attract customers. The same, Pho 24 usually must check stores to ensure the best service, the best taste.