CAPSTONE PROJECT REPORT DETERMINING BUSINESS STRATEGIES FOR KINH DO JOINT STOCK COMPANY FOR THE PERIOD 2020 - 2025 1 GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT CAPSTONE PROJECT REPORT DETERMINING BUSINESS STRATEGY FOR KINH DO JOINT STOCK COMPANY FOR THE PERIOD 2010-2015 DETERMINING BUSINESS STRATEGIES FOR KINH DO JOINT STOCK COMPANY FOR THE PERIOD 2010 - 2015 GROUP No 2: Trần Huy Tùng Trần Văn Trà Trần Xuân Trường Phạm Hồng Thái Group No.2: Tran Huy Tung - Leader Tran Xuan Truong Tran Van Tra Pham Hong Thai HANOI, 2009 2 TABLE OF CONTENTS COMMITMENT. The necessity of the research topic. Problems in the research. Scope of research.12 THEORY BASIS FOR ESTABLISHING BUSINESS STRATEGIES IN.
Concepts regarding strategy. Models for establishing strategies. Environment analysis models.1 PEST model- macroenvironment analysis model. Five competitive forces model of Michael Porter- Industrial environment analysis model.
Internal analysis models:. Value chain model of Michael Porter – internal assessment model. 7S model of Mc Kinsey- organizational structure analysis model:. Valuable resources, core competencies and competitive advantages:.
Combined analysis model- SWOT analysis:. General competitive strategies:. Product differentiation strategy:. Cost lowering strategy:.
Niche market strategy:. Flexible and responsive strategy:. Customer value and benefit creation strategy:.35 INTRODUCTION OF KINH DO JOINT STOCK COMPANY AND.35 ITS BUSINESS ENVIRONMENT ANALYSIS, INTERNAL ANALYSIS.General introduction to Kinh Do joint stock company:. Formation and development:.
Main product categories of Kinh Do corporation:. Summary of some achieved targets of Kinh Do in 2007 and 2008.2 Business environment analysis. Microenvironments analysis based on PEST model.2 Competitive environment analysis:. Five competitive forces analysis:.
Life cycle of the industry. Internal analysis based on the value chain:. Internal analysis 7S model:. Core competencies and competitive advantage of company:.
Kinh Do position in the market:.76 DETERMINING BUSINESS STRATEGIES FOR KINH DO JOINT STOCK COMPANY FOR THE PERIOD 2010-2015.1 Development orientation for foodstuff processing industry in Vietnam. Strategic vision and mission:.3 Determining business strategies for Kinh Do JSC in 2010-2015.1: Current business strategy of Kinh Do.2: Main strategies for Kinh Do. Product differentiation strategy:.2 Upward vertical integration strategy.3 Backward vertical integration strategy:.4 Horizontal integration strategy.6 Market penetration strategy:.7 Market development strategy.8 Related diversification strategy:.3 Selection of strategies:.4 Some proposed solutions to implement development strategies of Kinh Do to 2015.2 Solution of finance:. Solution of human resource:.
Solution of production and technology.5 Some proposals to administrative authorities:.1 For the state authorities:. For the industry:. 91 5 LIST OF FIGURES, GRAPHS Exhibit 1.2: Five forces model of Michael Porter.3: 7S model of McKinsey.4: Source of competitive advantages. Logo of Kinh Do Joint Stock Company.36 6 LIST OF TABLES Table 1.2: Targets of Kinh Do in 2007, 2008.3: Summary of microenvironments analysis:.4: The main competitors of Kinh Do.5: Analyzing five competitive forces:.6:Revenues of companies in the food processing industry.7:Profits of Kinh Do Company and Bibica Company.8: Internal analysis based on the value chain.9: Labor structure in accordance with criteria in 2008.10:Internal analysis based on 7S model:.11: Products comparison against competitors’ products.12: Revenue, profit and shareholders’ equity target.13: Summary of WSOT analysis results:.1: Revenues from confectionery of Kinh Do JSC in 10 recent years:.77 7 COMMITMENT We assure that the content of this report has never been submitted to any program of training master of business administration as well as any other training program We are also committed that this report is resulted from our own effort.
All results, analysis or conclusion (except quotation) are our own working results 8 ACKNOWLEDGEMENT The report “Perfecting business strategy for Kinh Do joint stock company for the period 2010-2015” has been completed under the guidance of Dr. Vu Tri Dung – Lecturer at Hanoi National University We would like to express our sincere gratitude toward Dr. Vu Tri Dung for his dedicated guidance and direct assistance to help us complete this report We are also grateful to other professors in Program of Training Masters of Business Administration of Griggs University for their enthusiastic teaching throughout the course to equip us with the necessary knowledge in business administration so that we can finish this report 9 INTRODUCTION 1. The necessity of the research topic Vietnam has successfully joined the World Trade Organization (WTO) and the business environment has undertaken many significant changes.
If relying solely on past advantages and experiences, sooner or later, domestic enterprises will not be able to stand firm and continue to progress in the current trend of regional and international integration. Confronting with current challenges and increasingly fierce competition, to survive and develop further, each business needs to find their own appropriate path to go, to establish a development strategy accordance with external environmental conditions as well as internal factors of the company, in which business strategy is one component parts and represents one of the most important basis for building corporate strategy in order to constantly improve the position of the company in the market Along with the growth of the national economy, Kinh Do has achieved great accomplishments and contributed to upgrade the food and foodstuff processing industry of Vietnam to a higher level With a hope of giving contribution to find the right direction to maintain the position of Kinh Do Corporation in the future as well as to assist Kinh Do in positioning itself as a strong brand in the mind of customer to become one of the leading brand in Vietnam, and simultaneously applying what we have learned from the Program of Training Masters of Business Administration, we have selected the topic for our report as “ Determining business strategy for Kinh Do joint stock Company for the period 2010-2015” 2. Problems in the research -Factors in the international environment that have effects on the process of establishing business strategy -Factors inside the company that have effects on the process of establishing business strategy 10 -Determining business strategy for Kinh Do Corporation based on a combination of theoretical and practical analysis 3. Research objectives - Systematizing some theories on establishing business strategies for enterprises - Analyzing the business environment of the company during the past and in the coming time -Analyzing internal factors and development potentiality -Proposing the appropriate business strategy for the company’s products from now to 2015 and a long-term development direction for the following years 4.
Scope of research Analyzing the business environment of the company’s products from 2005 to 2009 in order to perfect the business strategy until 2015 for products of the company in the domestic market 5. Research methodology This thesis was done by using both primary and secondary data: - Collecting secondary data through sources such as newspapers, internet, distribution channel, internal documents… - Collecting primary data through sources such as: employing the method of qualitative and quantitative data collection such as: + Method of descriptive analysis, data collection, synthesis to analyze the production and business activities of Kinh Do Corporation 6. Report structure - CHAPTER 1: THEORY BASIS FOR ESTABLISHING BUSINESS STRATEGIES IN ENTERPRIESES - CHAPTER 2: INTRODUCTION OF KINH DO JOINT STOCK COMPANY AND BUSINESS ENVIRONMENT ANALYSIS FOR THE COMPANY, INTERNAL ANALYSIS - CHAPTER 3: DETERMINING BUSINESS STRATEGIES FOR KINH DO JOINT STOCK COMPANY FOR THE PERIOD 2010-2015 11 CHAPTER 1 THEORY BASIS FOR ESTABLISHING BUSINESS STRATEGIES IN ENTERPRISES 1. Concepts regarding strategy The term “strategy” was first used and popularized in the military field, according to the Encyclopedia of America “Strategy is the science and art of military command as applied to the overall planning and conduct of large-scale combat operations to achieve the final victory” Nowadays, the term “strategy” is very popular in business filed, “strategy” in business is defined differently as in the following definitions: “Strategy is a model of goals and objectives and plans to achieve such goals” (Kenneth L.Andrew – 1965) ”Strategy includes the determination of basic and long-term goals of the company and the selection of method or action procedure and requisite resource allocation to realize such goals (Alfred Chandler) ”Strategies are ways and transportation means to achieve the set goals through policies” (General Ailleret) ”Strategies are trends or plans in order to coordinate goals, main policies and implementation programs of an organization into an unite system” (Quinn, 1980) ”Strategy is a harmonious combination between operation and resource allocation to achieve organizational objectives.
Organizational strategies are efforts to utilize the maximum capacities and resources of the organization to give 12 the most appropriate responses to opportunities and threats of the external environment” (Bateman and Zeithaml, 1990) ”Strategy encompasses goals, policies and plans” (Dess and Miller, 1993) In spite of differences in words or description manner, all of the above definitions mention about general traits of set objectives, policies and implementation plans of an organization. In 1987, Mintzberg introduced the concept of strategy as: ”Strategy is plan, tactics, trend, position and vision” - Strategy as plan: + According to this concept, strategy is the set objectives, policies and implementation plans of an organization - Strategy as tactics: +Strategy is what an organization intend to do in order to pass its competitors -Strategy as trend: + Even without predetermination or publication, if the actions of an organization follow a common trend, they can be considered strategies -Strategy as position: The position of a company in the environment, particularly in the comparison against its rivals form an essential element in the strategy. According to this concept, strategy is the engagement between internal factors of the company and environmental factors The position of the company can be identified and developed through plans or action trends - Strategy as vision: + According to this concept, first of all, strategies are all about ideas, they exist in the imagination and creativity of the managers. What is important is these ideas must be shared to other members of the company 1.
Strategic management 13 Strategic management is a process of studying the current as well as future environment, setting organizational objectives, planning, organizing, implementing and controlling the implementation process to reach the set goals in both current and future environment 1. Strategy levels: In every company, there are 3 levels of strategy: corporate strategy, operational or competitive strategy and functional strategy - Corporate strategy: + The strategy level that refers to the company as a whole. Corporate strategy normally specifies the list of the company’s products and the direction to diversify this list to best utilize the company’s strengths. In other word, the main question included in the corporate strategy is: ”What field should we compete in?” - Operational strategy: + Also known as product strategy or competitive strategy, since in essence, businesses compete in the market in term of particular product Competitive strategy for each type of product must answer such questions like: What is the objective? Competitive advantages needed to achieve this objectives? Who are the main competitors?.
The core of business strategy are to identify and develop competitive advantages of the company in the market - Fucntional strategy: + Functional strategies such as marketing, finance, human resources management. should be combined to create a competitive edge for competitive strategy The critical things of functional strategy are to clearly defining the added value that each function can bring to customers as well as to higher-level strategies 1. Models for establishing strategies There are many tools to analyze the relationship between enterprises and the market. There also exist many analysis tools to assist enterprises in identifying their strengths and weaknesses as well as opportunities and threats of the business 14 environment from which to find the direction and determine the appropriate strategies.
Such analysis tools are called strategic analysis tools. They are markedly useful in identifying competitive advantages as well as position of the companies in the market, and simultaneously determining the direction and goals to reach 1. Environment analysis models 1.