vietnam national university, HANOI school of business Nguyen TrungDuc BUILDING 03-YEAR BUSINESS STRATEGY FOR XUAN CAU COMPANY LIMITED IN SCOOTER TRADING BUSINESS Major: Business Administration Code: 60 34 05 Master of business administration thesis Supervisors: Dr. Nguyen Thi Phi Nga Hanoi– 2011 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENTS ACKNOWLEDGEMENTS .iv TABLE OF CONTENTS .vi LIST OF FIGURE .ix LIST OF TABLE. x LIST OF ABBRIVIATIONS. Scope of Works.
Data sources & Processing. 4 CHAPTER 1: LITERATURE REVIEW. 5 vi LUAN VAN CHAT LUONG download : add luanvanchat@agmail. The Role of Business Strategy.
Building Strategy Process. Strategy Implementation and Evaluation. 25 CHAPTER 2: BUILDING BUSINESS STRATEGY FOR XUAN CAU COMPANY LIMITED. Overview of Vietnam Scooter Market – PIAGGIO Market in Hanoi.
Overview of Vietnam Scooter Market. Overview of PIAGGIO Market in Vietnam. Overview of PIAGGIO Market in Hanoi. Characteristics of a PIAGGIO Dealer.
Xuan Cau Limited Company Overview. Xuan Cau Company Strategy Building Process. External environment analysis. Internal environment analysis.
Strategy Formulation and Choices. 75 vii LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Expand distribution network in Hanoi new expanding areas. Improving marketing activities to promote Xuan Cau brand and service.
Improve the Company‘s management. 78 CHAPTER 3: RECOMMENDATIONS FOR STRATEGIC IMPLEMENTATION PLAN. Target of the Strategy. Solution to implement strategy.
85 viii LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF FIGURE Figure 1.1: Building Strategy Process .2: Michael Porter 5 forces model .3: Relationship between Resources, Capabilities, Core Competencies, Distinctive Competencies, and Sustainable Competitive Advantages .4: Value chain model .6: Porter‘s Generic Strategies .1: Sales of Motorbike manufacturers in Vietnam from 2008 to 2010 .2: Sales by Segments of 5 main FDI Motorbike manufacturers in Vietnam from 2008 to 2010 .3: Vietnam Scooter Market from 2008 to 2010 .4: Increasing sales of 5 FDI manufacturers from 2008 to 2010 .5: 5 FDI manufacturers‘ market share from 2009 - 2010 .6: Piaggio Sales increase by Models by the first 6 months of 2011 .7: Year on year Inflation rate in Vietnam .8: Average Sales of Piaggio by month in 03 year (2009-2011) .9: Piaggio Scooter Product Life Cycle .10: Expanding Distribution Network Plan of Piaggio Vietnam2011 .11: Premium Scooter market in 2010 .12: Xuan Cau‘s Value Chain .13: Xuan Cau‘s Organizational Structure .14: Basic Revenue, Cost and Profit of Xuan Cau in billion VND .15: Xuan Cau‘s Sustainable Competitive Advantages Identification. 74 ix LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF TABLE Table 1.1: Piaggio Sales by Models and Region from 2010 to 2011 .2: Hanoi‘s economic targets in 2011 and forecast for 2012 (%) .3: External environment analysis conclusion .4: Price range of some scooter substitutes .5: Compared average turnover per month of a Showroom from 2008 to 2011 .6: Piaggio Dealers in Hanoi .7: Unweight Competitive Strength Assessment.8: Industry analysis Conclusions .9: Xuan Cau and Topcom Comparison.10: Internal environment analysis Conclusion .11: Xuan Cau‘s Competencies .12: Weighted Competitive Strength Assessment .13: Xuan Cau‘s Long-term and Short-term Strengths and Weaknesses .14: SWOT matrix - Strengths, Weaknesses, Opportunities and Threats summary .15: SWOT matrix – Possible chosen strategies .16: Selecting Strategy using GREAT model. 83 x LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF ABBRIVIATIONS Xuan Cau Xuan Cau Co., PVN Piaggio Vietnam SBV State Bank of Vietnam FDI Foreign Direct Investment GDP Gross Domestic Product SWOT Strength, Weakness, Opportunity, Threat GREAT Gain, Risk, Expense, Achievable, Time PEST Political, Economic, Social, Technology POS Point of Sales xi LUAN VAN CHAT LUONG download : add luanvanchat@agmail. The PROBLEM After 10 years in the market, Xuan Cau Co.
has not had an official Strategy for develop and developing business yet. As the first one built up the Piaggio market in Hanoi, at first the company had no competitors. All the business was just importing and selling. Demand was extremely higher than Supply so that success was an easy achievement.
In 2006, Piaggio officially entered Vietnam, developed plants and distribution network. Xuan Cau became one of 74 dealers in Piaggio Vietnam network, not the one and only as it was before. Based on the root of 10 year business, the Company still gain success, but the BODs are sleeping in the glory of the past few years while new dealers learn hard and grow fast. By the time, facilities are downgraded, sales staffs are self-satisfied, the Company‘s competiveness decreased dramatically, losing their leading position in the market, became the second.
Therefore, Xuan Cau Co. needs to have an Official Strategy to increase its competitiveness and market share. Objective / Aims - Aim: Build up an Official Strategy which could help the Company to state who and where they are right now in the market and determine its‘ development orientation for the next 3 years. - Objectives: Analyze the Company present performance to reveal the problems under no Strategy running business.
Analyze Xuan Cau‘s Vision & Mission Statement (if any) to see whether the Company has known who they are or who they want 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com to be or not, to see whether all the factors are enough or wisely mentioned or not. If there are any problems, hopefully I can recommend them a better one. Do External Analysis to find out what the Real Opportunities & Threats in the market. o Do Macro Analysis by using PEST+ model to find out O&T.
o Do Micro Analysis by using 5 Forces model to see the Competitive pressure. Do Internal Analysis by using 2 models: Value Chain & SCA Identification Process to find out the Strengths & Weakness of the Company. Formulate and choose the most suitable Strategy for Xuan Cau in the next 3 years using SWOT & GREAT models. After choosing the Strategy, develop the Strategy Implementation to adapt.
Scope of Works - Size: 1 Company: Xuan Cau Ltd. Research questions - Who are the competitors and who is Xuan Cau now in the market? - What are the S-W-O-T to Xuan Cau now and 3 years later? - What changes can be made after adapting strategy to Xuan Cau? 2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Change in the Company Structure? Change in the Company Operation? Change in the Company Revenue and Productivity? 5. Data sources & Processing - Apply Strategy building theory - Xuan Cau‘s and Piaggio Vietnam internal data. - Internet Sources - General Statistics Office of Vietnam 6.
Methods / Approaches - Market research in Vietnam Scooter Industry. - Interview with some of the Company‘s Key people as the ―Insiders‖ - Aggregate analysis 7. Significance - A chance for me to apply theory in practicing. - Direct Xuan Cau to develop and to do business more effectively in the right orientation.
- Help Xuan Cau to Catch Opportunities and to Use Resources effectively. - With a methodological Strategy, Xuan Cau can run Business more professionally. - Increase the Company Competitive Advantages. - If this thesis is well-done, hopefully it can become a reference for other company.
3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Limitations - Focus only on 1 company. - Collected data may not be accurate and out of date. - Feasibility: the Thesis is just a thesis only, maybe the BODs of Xuan Cau won‘t pay attention about it so that it won‘t be apply in reality.
Expectation Results - Collect Scooter Industry Market research data. - Practice the knowledge learnt in class & Experience in real company. - Propose a suitable Business Strategy to Xuan Cau. - Compare real Changes after & before Company adapt a new Strategy.
Contents I plan to perform the Thesis in this type: Introduction Chapter 1: Literature Review Chapter 2: Building Business Strategy for Xuan Cau Company Limited Chapter 3: Recommendations for Strategic Implementation Plan 4 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER 1: LITERATURE REVIEW 1. Definition Strategy is a long-term action plan designed in which an organization uses its knowledge and other resources to achieve its economic purpose. Strategy is different from tactics. In military terms, tactics is concerned with the conduct of an engagement while strategy is concerned with how different engagements are linked.
In other words, how a battle is fought is a matter of tactics: whether it should be fought at all is a matter of strategy. In order to exist and to develop in the market, a corporation should not only base on short-term action plans, but also base on long-term one so that it can catch opportunities, reduce negative effects from external environment, overcome weaknesses and improve strengths from the internal environment. Strategy is a future plan in which describes the corporation‘s operating model as well as draws up a best future far-sighted. Building on market development and consumer trends, the Companies define their strategies and drivers for growth based on their Vision, Mission and Values to maximize return across the value chain.
In general, top management sets the strategic targets for brands, sales, operations, and finance. Then, senior management evaluates alternatives and works out more detailed plans to achieve these goals: Entering new markets, Extension of the product portfolio to new channels, Improving the existing portfolio in the traditional channels, Or acquisition or selling brands. 5 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Once the overall company plan reflects the desired strategy, an integrated business planning process will links strategic targets with tactical and operative planning on all hierarchy levels of the enterprise. All downstream plans are assigned specific business targets to ensure the adherence to strategic targets.
Classification Generally speaking, there are 4 levels of strategy: (1) Functional-level Strategy answers the question how/what resources the Company has to use/exploit/combine in order to create its Competitive advantages. (2) Business-level strategy or Competitive strategy answers the question how to compete with other competitors: based on Cost leadership; or Differentiation on attribute, image, and customer service; or Focus? (3) Corporation-level strategy answers the question what business and market the Company should jump into. (4) Global-level strategy answers the question what international market to enter, based on what criteria and how to jump into that market. Specific characteristics Strategy defines goals and development direction of the Company in a period from 3 to 5 years.
Business strategy only sketches out long-term sense of directions. In practical business running, it is necessary to combine general long-term objectives with particular short-term objectives. The top manager has a very important role in building, making decision, performing, controlling, evaluating, and adjusting strategy. Building and choosing business strategy is always based on competitive advantages of the corporation.
6 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. The Role of Business Strategy Provide a long-term vision for the Corporation managers. Especially in the case of small and medium enterprises (SMEs), when the Company operates under a long- term plan, it will improve the sustainable development instead of temporary and unstable development. Based on it, the managers can make accurate and timely decision.
The decisions will stick close to the goals of the corporation, helping it to save and use resources more effectively. With a professional strategy, the company can gain advantages from catching Opportunities, improving Strengths, overcoming Threats and reducing Weaknesses so that it can keep or enhance its competitive advantages compared to the others. Building Strategy Process + Figure 1.1: Building Strategy Process Source: Pro. Dang Ngoc Su –Strategy Management Figure 1.1 express the process will be used to build strategy in this thesis.
7 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.