1 Global Advanced Master of Business Administration Capstone project – Strategic management – GaMBA 01M0909 – Group 4 TOPIC: BUILDING BUSINESS STRATEGY FOR NAM DINH TEXTILE JOINT STOCK COMPANY LIST OF CONTENTS Thank you letter. List of contents. List of tables and diagrams. Overview of the capstone project.
Chapter 1: General theory of business strategy management 1. Strategy and business strategy management page 8 1. Define targets and system of strategic targets page 11 1. Analysis of business environment page 12 1.
Distinguish different kinds of business strategies page 18 1. Methods of analysis and choosing strategy page 20 Chapter 2: Analysis of business situation of Nam Dinh Silk Textile Joint Stock Company 2. Overview of textile industry in Vietnam page 24 2. Establishment and development of the company page 30 2.
Name, head office, activity form of the company page 32 2. Objectives, business activity, scope of operation of the company page 33 2. Organizational structure page 33 2. Analysis of business environment page 33 Dao Van Phuong – Nguyen Quy Bang – Nguyen Ngoc Son – Duong Ho Minh 2 Global Advanced Master of Business Administration Capstone project – Strategic management – GaMBA 01M0909 – Group 4 2.
Macro environment page 33 2. Business section environment (textile industry) page 39 2. Internal environment of the company page 42 2. Synthesis of business environment analysis and development strategy of the company page 47 Chapter 3: Building business strategy for the Nam Dinh Silk Textile Joint Stock Company 3.
Foundation for building business strategy page 54 3. Long-term targets of the company page 54 3. Short-term targets of the company page 56 3. The overall business strategy page 56 3.
Growth strategy focusing on textile products page 56 Mixed strategy to remain competition position 3. Integration strategy page 57 3. Mixed strategy to maintain competitive position page 57 for heavy fabrics products 3. Vertical integration strategy in the business page 58 3.
Reduction strategy for fabric KT page 59 3. Functional business strategy page 60 3. Improving the quality of the human resources and page 60 organizational structure 3. Pushing up the marketing strategy page 62 3.
Strengthening the R&D activity page 66 3. Raising the efficiency of the sales activity page 66 Dao Van Phuong – Nguyen Quy Bang – Nguyen Ngoc Son – Duong Ho Minh 3 Global Advanced Master of Business Administration Capstone project – Strategic management – GaMBA 01M0909 – Group 4 3.5 Improve financial management capacity page 67 3.6 Improving the efficiency of managerial information systems page 67 3.7 Program of strategy adjustment page 68 3.4 Forecast of the result of strategy implementation page 68 Conclusion page 72 Apendix page 76 LIST OF ABBREVIATION WTO: World Trade Organization Vinatex: Viet Nam National Textile and Garment Group Company’s strategy business units (SBU) include: - SBU1: Produce and trade yarn (Yarn - abbreviation: Y ) - SBU2: Produce and trade thin fabric (Thin fabric - abbreviation: TF) - SBU3: Produce and trade yarn dyed fabric (Yarn dyed fabric - abbreviation: YDF) - SBU4: Produce and trade heavy fabric (Heavy fabric – abbreviation : HF) Table of Internal factors Environment: IFE Table of External Factors Environment: EFE Dao Van Phuong – Nguyen Quy Bang – Nguyen Ngoc Son – Duong Ho Minh 4 Global Advanced Master of Business Administration Capstone project – Strategic management – GaMBA 01M0909 – Group 4 LIST OF TABLES AND DIAGRAMS Table 2.1: Development goal of the textile industry (source Vinatex.2: The main targets in the strategy development of the Vietnam Textile till 2015 and orientation to 2020.3: Demand for raw materials used Vietnam's garment industry in the 2000- 2005 period and forecasts to 2020 (source Vinatex) Table 2.4: Justifying the common indicators through survey (source Vinatex.5: Situation of labor using through years Table 2.6: Company’s labour structure in 2010 Table 2.7: Equipment being used at the company Table 2.8: Demand for raw materials and energy at the company Table 2.9: Situation of product consumption from 2008 to 2010 Table 2.10: Situation of revenue from 2008 to 2010 Table 2.11: Business results of the company Table 2.12: Balance sheet of the company through years Table 2.13: The financial targets through years Table 2.1: Synthesis of macro environment analysis Table 2.2 : Comparison with the competitors Table 2.15: Synthesis of internal factors of the company Table 3.1: Diagram of changing in product structure of the company.2: Revenue from 2008 to 2010 and forecast number for 2015 Table 3.3: Forecast for the business result of the company Table 3.4: Balance sheet through years Table 3.5: Financial targets through years Dao Van Phuong – Nguyen Quy Bang – Nguyen Ngoc Son – Duong Ho Minh 5 Global Advanced Master of Business Administration Capstone project – Strategic management – GaMBA 01M0909 – Group 4 INTRODUCTION 1. The necessity of the topic Along with the development of the country, especially after Vietnam joining the WTO, the competition for survival and development has been increasingly complex and there contains so much risk. Therefore, for the enterprises to survive and develop, they need to appreciate the business environment, the internal factors within the enterprise from which to build appropriate business strategy to take full advantage of opportunities to minimize risks to ensure the stability and development of sustainable enterprises themselves.
In fact, the enterprises which are able to build their suitable business strategy, will be successful. Whereas running business operations without proper strategic planning, business activity will be moderately active and passive prior to changes in its business environment that can not be developed and they even have to pay expensive price for that wrong decision. Through which we see the importance of business strategy for the business activities of enterprises. Nam Dinh Textile Corporation was formerly known as Nam Dinh Textile Company which was the state-owned enterprise under the Vietnam Textile and Garment Group.
In 2008 it was converted into the joint-stock form. Nam Dinh Textile corporation becomes one of the textile units taking the lead in finding directions to adapt to market economy. Today in the extensive requirements of integration into world economy, Nam Dinh Textile needs to consolidate its efforts of internal resources, and make appropriate steps to overcome the challenges and seize opportunities to stabilize and grow. So to continue to exist and develop on the market Dao Van Phuong – Nguyen Quy Bang – Nguyen Ngoc Son – Duong Ho Minh 6 Global Advanced Master of Business Administration Capstone project – Strategic management – GaMBA 01M0909 – Group 4 and tobe able to adapt to such constant changing in the business environment, it requires companies to build a suitable business strategy.
The subject and scope of the research Applying the reasoning and methodology of the business strategy of the enterprise, our capstone project has made the argument for building business strategy for the Nam Dinh Textile Corporation - Study subject: Our topic is to make deep analysis, evaluation, from which provide direction on building business strategies basing on the general theory of business strategy of the business - Scope of research: Basing on specific data about the macro environment, industry environment and the real business situation of the Nam Dinh Textile Company from 2009 - 2010 and orientation to 2015 with the vision till 2020. Research methodology Research methodology is based with the knowledge learned, the entire process of evaluating business activities of the Nam Dinh textile Joint Stock company. Also using some methods such as statistical analysis, modeling and forecasting to analyze and build business strategy of the company. Capstone project structure Besides the introduction, conclusion and reference list, the contents of the thesis consists of three chapters: Chapter I: The general theory for strategic management Chapter II: Analysis of the current business situation of the Nam Dinh Textile Joint Stock Company.
Dao Van Phuong – Nguyen Quy Bang – Nguyen Ngoc Son – Duong Ho Minh 7 Global Advanced Master of Business Administration Capstone project – Strategic management – GaMBA 01M0909 – Group 4 Chapter III: Building business strategy for the Nam Dinh Textile Joint Stock Company CHAPTER I GENERAL THEORY FOR STRATEGIC MANAGEMENT 1.1 Concept and role of strategic management: Concept of strategic management: Strategic Management is a set of steps that members of the organization making such activities as analyzing the current situation, making decision on the strategy, implementing these strategies, evaluating, making adjustment or changing strategy when necessary. It includes all the basic functions of management: planning, organizing, directing and controlling. Strategic management includes strategy building, implementation and evaluation to achieve the strategic objectives of the organization in the current environment as well as in the future The role of strategic management in business In such changing business environment conditions as today, it often creates new opportunities and unexpected risks, strategic management process helps us identify opportunities and risks in the future. The enterprises clearly define their direction, overcoming the challenges in the market, reaching into the sucessful future by their own efforts.
The perception of the desired results and goals in the future helps the managers and employees understand what they need to do to achieve success. This will encourages both of them to achieve the above-mentioned short-term achievements, to make better improvement in the long-term welfare of the business. Dao Van Phuong – Nguyen Quy Bang – Nguyen Ngoc Son – Duong Ho Minh 8 Global Advanced Master of Business Administration Capstone project – Strategic management – GaMBA 01M0909 – Group 4 Strategic management processes helps the enterprise to associate the proposed plan with the external environment. The greater the volatility in the business environment is, the more proactive the companies should try tobe.
To survive and grow, the enterprises must develop their own strategic management systems which are adaptable to change with market fluctuations. Therefore strategic management moves toward future-oriented action, being unacceptable to follow the market, but to impact the business environment changes In short, strategic management is a product of modern management science- based practices, summarizing the experience of many companies. Yet, the success of every business depends on its capacity of implementation and making control of the system inside and it can be seen as art of business administration. Process of strategic management In process of strategic management, the managers make chain of activities as follow: 1.
Situation analysis: Before deciding on the orientation or making appropriate response, the suitable strategies need to analyze the current situation. Situation analysis requires the consideration of organizational context, the environmental aspects of external and internal organization: - The internal factors within the enterprises: strong or weak. - The factors outside the enterprises: opportunity or threat to business. - The desire of the leadership: business value, reputation and competitive advantage.
Building strategy: Building strategy includes the designation and making selection of appropriate strategies for the organization. To do this, it should be considered from many different levels of the organizations to give out the some different types of strategies: Dao Van Phuong – Nguyen Quy Bang – Nguyen Ngoc Son – Duong Ho Minh 9 Global Advanced Master of Business Administration Capstone project – Strategic management – GaMBA 01M0909 – Group 4 - The overall strategy: Paying attention to the large and long-term issues such as: how to run business activities, which business fields, and what to do in these business fields. Any changes in the structure of the business field can change company’s overall strategy. - Function strategy: Being the decisions and actions targeting the short-term construction of the different functions within an organization such as the production department (manufacturing), card marketing, research and development, human resources, finance and accounting, information technology.
Implementation strategy: Formation or building strategy is not enough for employees of organizations but they need to implement the strategy. Implementation strategy is the process of putting different strategies of the organization into execution. Measures to implement different levels of strategy are closely associated with the strategy building.