GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION CAPSTON PROJECT REPORT TOPIC: BUILDING BUSINESS STRATEGY FOR VIET NAM I INDUSTRIAL JOINT STOCK COMPANY IN 2010-2015 Prepared by: Group 12 Class: GeMBA01. Full name Note 1 Tran Thai Binh Group leader 2 Tran Bau Ha Group member 3 Pham Vu Long Group member 4 Đao Xuan Tung Group member Ha Tinh, September, 3rd, 2010 GROUP 12 -GEMBA 01.V02 1 TABLE OF CONTENT PREFACE ABBREVIATION PAGE 1. NECCESSITY OF THE STUDY 5 2. PURPOSE AND SCOPE OF THE STUDY 5 2.
Methods to collect data 6 3. SIGNIFICANCES OF THE STUDY 8 CHAPTER I: THEORY BASIS OF BUSINESS STRATEGY 9 1. Definition of strategic management 9 1. Definition of strategic management 9 1.
The role of strategic management 9 1. Classification of business strategy 9 1. Process of building business strategy 10 1. Macro environment of enterprise 10 1.
Operational environment of enterprise 11 1. Internal environment analysis within the enterprise 12 1. Model of strategy choice 13 1. Basic competitive strategies 15 CHAPTER II: REALITY OF CONSTRUCTION STONE TRADING IN VIET NAM I INDUSTRIAL JOINT STOCK COMPANY GROUP 12 -GEMBA 01.
Analysis of external environment. Five-force analysis 24 2. Current competitive opponents 25 2. Threats of new entrants 2.
Analysis of internal environment 28 2. Production, quality management and equipment technology 36 2.2 Equipment and technology 38 2. Financial situation of company 39 2. Research and development 41 2.
SWOT analysis for Vietnam I Industrial Joint Stock Company 41 2. Main strengths 41 GROUP 12 -GEMBA 01. Main threats 43 CHAPTER III: BUILDING BUSINESS STRATEGY FOR VIET NAM 45 I INDUSTRIAL JOINT STOCK COMPANY IN 2010 – 2015 3. Choice of business strategy 45 3.
Application of QSPM model 45 3. Description of leading cost strategy 46 3. Business strategy building 46 3. Vision, mission and goals of the company 46 3.2 Main strategy matrix 51 3.
Choose strategic solutions 52 3. Implementation progress 55 CONCLUSION 56 REFERENCES 57 APPENDIX 58 GROUP 12 -GEMBA 01. NECCESSITY OF THE STUDY After Viet Nam’s integration into WTO, it means that Viet Nam has officially “jumped into” international playground therefore Vietnamese enterprises must cope with violently competitive environment. An enterprise which wants to exist and develop in the market then the most important and necessary thing is to orient company to go on a right way, suitable to constant change of business environment to reach high adapting and ensure enterprise’s sustainability.
Therefore, centre and main problem of enterprises currently including enterprise of producing construction materials is to build up a right and suitable business strategy with competitive environment and how to adapt to conditions and existing capacity of enterprise. In addition, together with common development orientation of the whole nation, in recent years, economic structure of Ha Tinh province has transferred into increase of construction and tourism, reduction of agriculture; Many main projects are implemented then demand of construction materials has been increased highly; this is the opportunity for enterprises in construction sectors including Viet Nam I industrial Joint Stock company. However, big opportunity as well as many threatens have been raise, how to make company exist and develop within the market? Then Viet Nam I industrial Joint Stock company, must have a good business strategy which is suitable to short term period from 2010 to 2015. In study time, via reality of trading and exploiting stone of the company, our group decides to choose the topic “construct business strategy of construction stone in Viet Nam I Industrial Joint Stock Company.
PURPOSE AND SCOPE OF STUDY 2. Study purpose This topic will study business strategy of construction material sector, which is the business strategy of construction stone in Viet Nam I Industrial Joint Stock Company. Studying strategy will help enterprise to discover weaknesses to adjust, GROUP 12 -GEMBA 01.V02 5 promote profit increase, and create prestige of brand name within the market. Based on such spirit, choosing topic “construct business strategy of construction stone in Viet Nam I Industrial Joint Stock Company” is to reach the following targets: Analyze environmental impact on trading activities of construction stone in Viet Nam I Industrial Joint Stock Company.
Realize strengths, weaknesses, opportunities and threatens from environment. Build up a suitable strategy for business activities of construction stone in Viet Nam I Industrial Joint Stock Company based on limiting and adjusting weaknesses and promoting strengths to raise business effect and maintain development of company. Study scope - Survey object: internal and external factors impact on business activities of Viet Nam I Industrial Joint Stock Company. - Study time: within the period from 14/07/2010 to 25/08/2010 - Study space: Viet Nam I Industrial Joint Stock Company - Study limit: Viet Nam I Industrial Joint Stock Company operates in trading construction stones and due to features of construction stones then this assignment will focus on analyzing business strategy of construction stone of Viet Nam I Industrial Joint Stock Company within Ha Tinh area.
In this topic, we will go ton study and analyze some direct competitive opponents within Hong Linh town, Ha Tinh province such as Viet Nam – Czech economic cooperation company; Ha Tinh industrial development Joint stock company, 999 stone exploiting company. Methods to collect data Collect primary data: via following methods: - The method of direct observation of daily activities in the company including mainly working process, communication with partners….in Viet Nam I Industrial Joint Stock Company.V02 6 - Interview leaders and employees in the company (business office, accounting office, administrative office) to understand customers, providers, partners related to business activities of Viet Nam I Industrial Joint Stock Company as well as personnel policies that the company is implementing; Besides, we can interview workers of company to understand their attitude with Viet Nam I Industrial Joint Stock Company. - Interview competitive opponents: with sample size of 3, sampling is the most convenient method which is simple to approach object of interview; Out of which object of interview will be mainly director of divisions and managing cadres of company; interview is done within 14/07/2010 – 20/07/2010 to collect information of activities of company (products, distribution system, operational area…) as well as their definition of influence which impact on construction sector within Ha Tinh… - Interview customers: with sample size of 20 (chosen according to convenient method), quantity of samples will be distributed to customers who buy company’s products (mainly transportation companies to buy stone to provide customers, contractors within the area). Interview is done within 14/07/2010 – 05/08/2010 to get opinions of customers of products (quality, price…) as well as policies to care for customers of Viet Nam I Industrial Joint Stock Company.
Collect secondary data: by recognizing from resources: - Reports and materials of Viet Nam I Industrial Joint Stock Company and competitive opponents of company; providing divisions include: planning office, trading office, accounting and marketing office of the company. - Report of trading results within 2007 – 2009, detailed report of related factors of financial index such as asset structure, capital structure …(accounting office). - Materials of partners of Viet Nam I Industrial Joint Stock Company such as providers, customers, lending units…(trading office). Besides, there are also direct instruction and direct information provision of Mr.
Tran Quoc Huong – Director of the company. - References from materials, papers, manual book of strategic administration GROUP 12 -GEMBA 01.V02 7 edited by Griggs University as well as materials on Internet. Data analysis Method of comparison and synthesis: compared to reached norms of company with norms that competitive opponents have reached in the following conditions: space, time, economic content, measurement unit, estimation method, scale, and business condition. Inductive method: realization from small and detailed problems to common conclusion of analyzed problems.
Analysis of SWOT: it is the main method in building business strategy to find out strengths, weaknesses inside enterprises as well as opportunities and threatens of external environment which can impact on enterprise. Besides, analysis also uses other matrix such as: main strategic matrix,… such methods will be presented in the part “theory basis of strategic construction of enterprise. SIGNIFICANCES OF STUDY TOPIC Studying topic can orient to construction of business strategy in term of construction stone of Viet Nam I Industrial Joint Stock Company, then we hope that the results that topic can bring will be experiences that enterprises in the sector as well as other sectors can study and consider to draw experiences in construction of business strategy of enterprise. At the same time, topic study can prove importance of construction of business strategy in enterprise and then enterprises will clearly realize importance and role of strategy then build up development strategy strictly and scientifically.
CHAPTER I GROUP 12 -GEMBA 01.V02 8 THEORY BASIS OF BUSINESS STRATEGY 1. Definition of strategic management 1. Definition of strategic management Strategic management is the study process of current as well as future environment, define organizational targets, suggest, implement and check implementation of decisions to reach such targets in current as well as future environment. The role of strategic management - The role of defining: Business strategy will help enterprise to see clearly its own purpose and orientation.
It can indicate administrators to consider and define orientation for organization and when to reach expected results. - The role of prediction: In a variable environment, opportunities as well as threatens always appear. In the process of defining strategy, it can help administrators to analyze environment and make prediction to find out suitable strategies. Then administrators can grasp opportunities, make use of opportunities and reduce threatens related to environment.
- The role of controlling: Business strategy will help administrator to use and allocate existing resources in the best way as well as coordinate effectively functions in organization to reach given targets. Classification of business strategy Business strategies are formed within three levels: company level strategy, functional division strategy and business unit strategy; out of which, business unit strategy is the main segmentation with sector’s competition. - Company level strategy: GROUP 12 -GEMBA 01.V02 9 It is to define purposes and targets of the whole company, define business activities that company can pursue, create policies and plans to reach targets, allocate resources among business activities. - Functional division strategy: In the strategy of functional division, we will focus on operational fields, business sectors with outstanding advantage to the company.
- Business unit strategy: It is defined to define product choice or market form for business activities of the company; within business unit strategy, we must define the method that each business unit to implement to contribute to target fulfillment within company level. Process of business strategy building 1. Strategic vision Strategic vision is the instruction diagram to indicate the method that company must implement to develop and strengthen competitive power in business; it will draw a picture of destination and reason to go to such destination. Strategic vision development include development of strategic thought on future development of the company and the change of products – market – technology to increase current position within the market and future prospect of the company.
Development of strategic vision is via analysis of PEST – factors in macro environment and SWOT model of enterprise to find out a suitable vision for enterprise. Macro environment of enterprise 1. PEST analysis Analysis of PEST is to analyze macro environment to answer the questions: with what does enterprise cope? There are four factors which belong to macro environment that enterprise must cope with: legal and political factors; economic GROUP 12 -GEMBA 01.V02 10 factor; social factor; technical and technological factor. Such factors can impact on organization independently which can combine with other factors.
Factors of legality, government and politics: influence of legal, governmental and political factors are high on activities of enterprise; enterprise must follow regulations of leasing, lending, safety, price, advertisement; competition, tax. Economic factor: main influences of economy including: inflate rate; banking interests, periods of economic circle, payment scale, financial and currency policy.