fFs CAPSTONE PROJECT REPORT DEVELOP COMPETITIVE STRATEGIES FOR SUNTRAVEL CO., LTD, PERIOD OF 2010-2015 Members of Group No.6: Nguyen Nhu Cuong Nguyen Van Toan Nguyen Anh Tuan Tran Phu Cuong Class GaMBA01.X01 Hanoi, 2010 ACKNOWLEDGEMENTS First of all, the Group No.x01 would like to express our sincere thanks for the Master of Business Administration Program, the Affiliate Programs between Griggs University, USA and Center for Education Technology and Career Development, Vietnam University Hanoi to organize MBA course in Vietnam and facilitate our Capstone Project Report. Secondly, we would like to express our sincere thanks for SUNTRAVEL Directorate and SUNTRAVEL staffs have facilitated our team during the practice time there in collecting enough input information for this Capstone Project Report. Although our group has tried our best to perform this Capstone Project Report within our capacities but it definitely will have unavoidable deficiencies. We are thus hope that we will continuously receive more valuable comments from all of you to complete this report and make it be really useful for both of the Group and the Company.
Once again, thank you very much! Hanoi, July, 2010 The Group No.X01 1 Page TABLE OF CONTENTS ACKNOWLEDGEMENTS.1 TABLE OF CONTENTS.4 LIST OF TABLES. 6 The necessity of topics. 7 Object and scope of the research.8 Composition of the Project Capstone Report.8 CHAPTER I: BASIC THEORY OF DEVELOPING COMPETITIVE STRATEGIES FOR ENTERPRISE. Basic theory of competitive strategy.1 Concept of strategy.
Concept of competitivenss and competive strategy. Basic characteristics of competitive strategy. Develop competitive strategy for an enterprise.1 Formation of cognitiveness. Business enviroment analysis of enterprise.
Choosing competitive strategy. Theory models applied to develop competitive strategy for an enterprise. Five forces of Micheal Porter. External Factor Evaluation Matrix (EFE Matrix).
Internal Factor Evaluation Matrix (IFE Matrix). Internal - External Matrix (I-E Matrix). The basic elements to create successful strategy.22 CHAPTER II: ANALYSIS OF SUNTRAVEL COMPETITIVE ENVIROMENT. Overview about SUNTRAVEL Co.
Foudation and Development. Company products and services. Some results of business operations of the company. Analysis of macro environment of SUNTRAVEL Co.
Natural, socio-cultural environment. Political-legal environment.3 Analysis of micro environment. Intensity of rivalry analysis. Threat of new entrants analysis.
Power of suppliers analysis. Power of buyers analysis. Threat of substitute products analysis.4 Analysis internal business environment of SUNTRAVEL. Analysis of current strategy.2 Analysis competitive edges.
Origin of sustainable completion advantage. Internal – External Matrix (I-E Matrix).64 CHAPTER III: DEVELOP COMPETITIVE STRATEGIES FOR SUNTRAVEL, PERIOD OF 2010-2015. Vision, mission of SUNTRAVEL. Detailed developing targets of SUNTRAVEL.
Develop competitive strategies for SUNTRAVEL. SUNTRAVEL SWOT Matrix. Recommendations with the State and Vietnam Tourism Administration and Stakeholders. Recommendations with Vietnam Union.84 3 ABBREVIATION WTO World Trade Organization ASEAN Association of Southeast Asian Nations Inbound Doing business with foreigner customers in Vietnam Outbound Doing business with Vietnamese customers abroad MICE The Meetings, Incentives, Conventions and Exhibitions CEO Chief Executive Officer FDI Foreign Direct Investment ODA Official Development Assistance GDP Gross Domestic Product VND Vietnam dong USD American Dollar 4 LIST OF TABLES AND FIGURES TABLES Page Table 2.1: Statistics of company’s tourists over the years 29 Table 2.2: GDP by economic sector of whole country 31 Table 2.3: EFE Matrix 54 Table 2.4: Human resource statistics of the company 59-60 Table 2.5: Costs of the company 61 Table 2.6: Costs, revenues and profits of the company 62 Table 2.7: Compare costs, revenues and profits of the company 62 Table 2.8: IFE Matrix 64 Table 3.1: Competitive solutions and estimated time 75-79 Table 3.2: Company’s financial statements 84-88 FIGURES Page Figure 1.1: Five forces of Michael Porter in industry environment 15 Figure 1.2: SWOT Matrix 19-20 Figure 2.1: Structure of international tourists to Vietnam in 2008 32 Figure 2.1: SUNTRAVEL SWOT Matrix 68-69 5 INTRODUCTION The necessity of topics People can say “same business sector but different profit”.
Competitiveness is a comparison, power confronting among businesses; threats or opportunities of an enterprise primarily resulting from this power confronting process. Competitiveness is understood in many ways: Brands - Quality - Design – Price – Market. We are moving toward and building a healthy business environment – the sustainable development for enterprises in particular and the country's economy in general. Tourism business enterprises are not out of that trend.
Currently, tourism is one of the key economic sectors of many countries including Vietnam. Tourism is important for the country's economic development and improving people's incomes, particularly for people in the trade villages of tourist sites in the development strategies of national economy. The most important in the integration period, tourism is the opportunity to exchange, convergence of global tangible and intangible civilizations; create believe, understanding, solidarity among nations. In other words, tourism is a bridge to promote the economy, is the face of a nation.
In orders to promote economic development needs to promote tourism development and to strong tourism development, leaders at level are required to be interested in and make suitable strategies and plans. In reality today, Vietnam tourism although is appreciated with full potential. However, volume of international tourists comes to Vietnam and Vietnamese tourist go abroad are still limited. The main reasons are poor tourism products and services; insufficient management capability of tourism enterprises, activities in lack of synchronous.
The situation leads tourism enterprises to solve series problems for their own existence., Ltd is a state-owned enterprise directly under the Union of Vietnam Transport, participating in travel field from 1998 with the precursor is Travel Center under the Union of Vietnam Transport. It officially established as a company in 2004. The company together with the whole tourism industry has been trying to make tourism position as a key economic sector of the country. With more than 5 years of experience, SUNTRAVEL has continuously success and develop with many significant achievements.
For many years the company received certificate of merit as a good economic enterprise of Hoan Kiem District, Hanoi Capital and is continually ranked in the top 10 sales agents of Vietnam Airlines. However, new context when the world economy initially just has restored after the great financial crisis in 2008; the world faces up with food crisis and hot problem is climate change… creates new pressures for tourism enterprises to force them to method renovation in order to create added values. These require necessary and urgent activities for enterprise in product positioning, business orientation develop competitive strategies… The real-time of the Group at SUNTRAVEL is also the time that SUNTRAVEL is reviewing their strategy and plan in order to build and develop strategies due to the year 2010 is the important year for Vietnam in building Master plan for Socio-economic development strategies, period 2011-2015. All the enterprises therefore review their strategies in 2010.
That’s the reason why we choose topic "Develop competitive strategies for SUNTRAVEL period 2010-2015” for our Capstone Project Report with our desire to apply theory from MBA course to support SUNTRAVEL in developing the company competitive strategies. Research purpose - Research issues on strategic theory to develop competitive strategies in the trend of world economic integration; -Analyze and evaluate the competitive environment of the company SUNTRAVEL; 7 - Develop competitive strategy for SUNTRAVEL Co., Ltd in the period of 2010 – 2015. Object and scope of the research SUNTRAVEL is doing business in many fields such as tourism, trade, printing, training. Among which tourism activities are identified as the company’s core competency that bring major profit.
The other business activities exist just to support this core competency. Within research sphere of the Capstone Project Report, the research objects and scopes of research are in tourism operations. The time proposed to build business strategy is 5 years from 2010 to 2015; the research time is 3 years from 2007-2009. Research methods This Capstone Project Report use synthetic, analysis, statistical comparison, and modernization and critic methods.
This Project Capstone Report also uses some experiences of foreign tourism agencies and uses the scientific basis for management strategies to build business strategies for the company Composition of the Project Capstone Report Besides the introduction, table of contents, conclusions, references, it is divided into three chapters as follows: Chapter I: Basic theory of developing competitive strategy; Chapter II: Company’s business environment analysis; Chapter III: Developing competitive strategies for SUNTRAVEL period 2010-2015. 8 CHAPTER I: BASIC THEORY OF DEVELOPING COMPETITIVE STRATEGIES FOR ENTERPRISE 1. Basic theory of competitive strategy 1.1 Concept of strategy There are many concepts of strategy depends on viewpoint of each author. In Strategy and Structure (1962), Chandler A., one of the first to initiate strategic management theory defined as follows: "Strategy is the determination of the objectives and purposes of the long-term business and the application of a series of actions as well as the allocation of necessary resources to implement these objectives.
In 1980, when strategic management disciplines have become ripe, author Quinn, J. in Strategic Change: Logical Inscrementalism was made to define a more general: "Strategy is series of patterns or integrated plans of major goals, policies, series actions into the whole closely” After that, Johnson, G., Scholes, K in Exploring Corporate Strategy (1999) defined the strategy in the environmental conditions have changed rapidly: "Strategy is the direction and scope of an organization in long-term to gain a competitive advantage for organizations through the format of its resources in the changing environment, to meet market demand and satisfy the expectations of stakeholders " In defining strategy with 5 P letters, Mintzberg gave general aspects of strategic management as follows: (i) Plan: series of actions intended consistently; (ii) Pattern: being consistent behavior over time, may be intended or not intended; (iii) Position: match between the organization and its environment; (iv) Perspective: how to identify deeply about the world; (v) Ploy: how specific to be able to fool rivals. 9 A concise definition that is commonly used today is the definition of strategies in curriculum "strategy is a complex series of activities aimed at mobilizing the resources of an organization may have to achieve a certain goal” 1. Concept of competitivenss and competive strategy Competition is the rivalry between economic entities in the manufacturing, trading goods and services aimed at wresting the favorable conditions in the manufacture, sale or consumption of goods and services from which to obtain more benefits.
Competition can occur between manufacturers, suppliers with consumers (producers, suppliers want to sell expensive, consumers want to buy cheap); between consumers together to buy goods cheaper, better, between producers, suppliers to have better conditions in the production and consumption. There are many measures of competition: competitive price (discounts .) or non-price (advertising). - Competition is an economic rule of production and trade in goods and services because it actually comes from the law of value of production and trade in goods and services. In producing and trading goods and services, the relative isolation between production and the social division of labor inevitably lead to competition to gain more favorable conditions as close to raw materials, cheap labor, near market, good transportation, science and technology development.
to reduce labor consumption level lower than the individual consumption of social labor necessary to gain more interest. Where commodity production and labor distribution, competitiveness has will also be there. Competition is a very important role and is one of the most powerful driving force to boost production and business development. It forced producers to dynamic, responsive and actively improve their skills, technical innovation, applied science and technology, improve management organizations to improve labor productivity, economic efficiency.
That's healthy competition. Where lack of competition or appear monopoly, it seems to be underdevelopment. 10 - Besides the positive-ness, competition also has negative effects demonstrated in unfair competition as the violation or violations of moral law (smuggling, tax evasion, vandalism news release .) or acts of competitive inequality, ecological damage to the environment. All companies compete in any sector offers competitive strategy whether tacit or explicit.
Their strategies can be developed through an explicit process of planning or development can covertly through activities of various departments within the enterprise functions.