CAPSTONE PROJECT REPORT FORMULATING BUSINESS STRATEGY FOR SONG DA 5 JOINT STOCK COMPANY IN THE PERIOD 2011 - 2015 Le Ngoc Minh Nguyen Thi Mai Huong Hoang Viet Thanh Nguyen Thi Hien Nguyen Thi Hoa Class GAMBA01 X03 HANOI 2010 TABLE OF CONTENTS TABLE OF CONTENTS. ii LIST OF DIAGRAM. General context and the essence of research topic. Objectives, Scopes and Studying Method of the research.
Structure of the Capstone Project Report.8 CHAPTER 1: BASIC THEORIES OF THE CAPSTONE PROJECT REPORT.1 Definition and classification of business strategy.1 Definition of business strategy.2 Role of business strategy.3 Basic features of business strategy.2 Process of business strategy formulation.1 Mission or Goals of the company.2 Internal and External Environment Analysis.External Environment Factor Analysis.Internal environment analysis.3 Developing matrix to select business strategies for the company.1External Factor Valuation Matrix.2 Internal Factor Evaluation Matrix.3 Competitive Image Matrix.4 Business Strategy Selection.5 Organization and Implementation.6 Evaluating the effectiveness of strategy.3 Conclusion of Chapter I.3 CHAPTER II: ANALYSIS OF BUSINESS REALTY OF SONG DA 5 JSC.1 The formation and development of Song Da 5:.2 Organizational structure of the company.3 Main business scopes.4 Introducing products of the company.2 Business results of Song Da 5 JSC from 2007 to Sep 2010. Analyzing the business reality of Song Da 5.1 External environment analysis.1 Macro environment analysis.2 Sector analysis and competition. Internal environment analysis.5 Competitiveness in market.3 Strategy selection matrixes. Internal – external factor evaluation matrix.
3 Conclusion of Chapter II. 3 CHAPTER III: FORMULATING BUSINESS STRATEGIES AND SOLUTIONS TO IMPLEMENT BUSINESS STRATEGYIN SONG DA 5 JSC IN THE PERIOD 2011- 2015.1 Goals of Song Da to 2015.1 Foundations for setting up goals.2 Vision, mission and core value.2 Proposing business strategy in the period 2011 – 2015.1 Business strategy selection.2 Business strategy of Song Da 5 in period of 2011-2015.1 Business strategy in company grade.3 Solutions to business strategy in the period 2011-2015.1 Solution groups for production management.2 Solution group for marketing management.3 Solution group for human resources management.4 Solution group for financial management .4 Recommendations to Song Da Group and State Management Organs.1 Recommendations to Song Da group:.2 Recommendations to Government and State management organs:.3 Conclusion for Chapter III. The contribution of the topic. Limitations of the Capstone Project Report and following research orientation.
77 iiiiii76 iii LIST OF DIAGRAM Diagram 1.1: External factor matrix 18 Diagram 1.2: Competitive image matrix 19 Diagram 1.3: SWOT matrix 19 Diagram 1.4 : Strategy selection 21 Diagram 2.1: Business results from 2007 to Sep 2009 30 Diagram 2.2: Comparison of competitors 38 Diagram 2.3: List of some vendors supplying major material for Song Da 5 39 Diagram 2.4: External Factor Evaluation Matrix of Song Da 5 (EFE) 47 Diagram 2.5: Internal Factor Evaluation Matrix of Song Da 5 (IFE) 49 Diagram 3.1: SWOT Matrix of Song Da 5 62 Diagram 3.2: Comparison table of implementable strategies 64 Diagram 3.3: GREAT model to select strategy 65 Diagram 3.4: Total cost to manufacture RCC concrete in reality 68 iviv76 iv GRATITUDE To finish the Global Advanced Master of Business Administration Program and conduct this Capstone Project Report, we have received instruction and contribution of many people. Furthermore, we will not gain achievement without their valuable support. First of all, we thank all teachers from Hanoi National University and Griggs University (USA) for their enthusiasm and dedication in teaching; as a result, we have achieved useful knowledge for our current work. We also express our deep gratitude to all members of Global Advanced Program; they are Directorate, Training Bureau, Class Management Bureau and so on.
The program really creates the most favorable conditions for all of us to complete given tasks in current office as well as to ensure the studying quality. Last but not least, we are thankful to relatives in our families. More than anything else, their encouragement is being a great source of inspiration to every single group member to complete the Report in collaboration without any difficulties and barriers. We complete the Capstone Project Report as good as possible with our knowledge and competences.
Nevertheless, we cannot avoid mistakes and we do hope to receive valuable comments from all teachers and students. Members of Group 5 vv76 v PREFACE 1. General context and the essence of research topic The world is gradually overcoming the economic crisis which is considered the worst one in many past decades. During 15 years of integration, construction industry has had many progresses and significantly contributed to the national economy growth rate as well as created an important position and strength to enter the modernization and industrialization of the country.
Furthermore, this is the phase having many noticeable turning points in quality and quantity in the development of construction industry. Corporations and big companies have been established to foster and invest in the depth with the aims of changing technology, increasing production capacity and competitive capacity of products in line as well as making foundation for the regional and international economy integration in following times. Additionally, Vietnamese economy ceaselessly integrates, develops and becomes the central of dynamic economy growth in South East Asia. As a result, construction industry is also facing with huge challenges and potential since this industry plays an important role in national target program in period from 2010 to 2015.
More than 20 years of establishment and development, Song Da 5 Joint Stock Company has strongly developed in organizational scale, functional scale, sector structure and total business value. Currently, Song Da 5 Joint Stock Company has been taking part in many major projects of the country such as hydroelectric power plants, bridges and high-ways, engineering and manufacturing the most advanced construction materials. Therefore, setting up goals and business strategies namely the long-term development trend has the significant contribution in the development orientation of the company in particular and the construction industry in general. As a result, our group chooses the topic in line with the theme “Formulating business strategy for Song Da 5 Joint Stock Company from 2011 to 2015” which is participating in implementation of key hydroelectric power plants in Vietnam as Hoa Binh, Yaly, Tuyen Quang and Son La.
Objectives, Scopes and Studying Method of the research Objectives: - Setting up methodogical foundation of business strategy formulation for Song Da 5 Joint Stock Company. - Analyzing and evaluating micro, macro and internal environment of the company in order to realize opportunities and threats from business environment; strengths weaknesses affecting sustainable development of the company. - Setting up business strategies for the company in the period 2011-2015 and proposing an implementation plan, whereby, the company will achieve sustainable development in the competitive and integrated environment. From our point of view, this is an application of management theories provided in Global Advanced Master of Business Administration Program to practical business problems related to the real-world responsibilities.
Scopes: - -Research Subject: Song Da 5 Joint Stock Company. Nevertheless, in order to carry out the overall analysis and clarification of the research contents, the Report widens the Research Subject to competitors in construction industry. - Research Scopes: All issues relating to business strategy of Song Da 5 Joint Stock Company in field of concrete manufacturing. - The Research refers to statistics data from 2007 to 2009 and factors affecting business operations of the company until 2015 to analyze and evaluate business reality.
Studying Method: Capstone Project Report focuses on researching, analyzing information and secondary data collected through public communication and internal data resources of Song Da 5 in the most basic contents. The research and development of strategy matrixes are conducted by expertise method, it means that we consult ideas of experts who have deep knowledge about CVC and RCC products and market context in Vietnam in order to specify criterion and to evaluate those criterion. The advantage of this method is simply and easily to 7776 7 execute. However, this method also has a limitation due to low rate of accuracy compared with field survey as well as it is the subjective perspectives of experts.
Despite that, this method also meets necessary requirements to formulate a positive business strategy for a company. Structure of the Capstone Project Report Main content of the Capstone Project Report consists of 3 chapters excluding the preface, conclusion and references attached: Chapter 1: Basic theories of strategy and business strategy formulation Chapter 2: Comprehensive analysis of current business reality of Song Da 5 Chapter 3: Formulating business strategies and practical solutions to business strategy implementation in Song Da 5 in the period of 2011-2015. 8876 8 CHAPTER 1: BASIC THEORIES OF THE CAPSTONE PROJECT REPORT 1.1 Definition and classification of business strategy 1.1 Definition of business strategy The definition of strategy has presented for quite long time ago. This is a science of planning and controlling operations.
Nevertheless, this definition used to be applied in military area in the past. The basic theory of strategy is the ones who can defeat a rival that was even stronger in qualitative aspect if they can lead or force rival to their advantage battlefield to deploy the strongest power. When the good exchanging behavior has been more and more developed in society, the strategy is also applied in business with the general model as followings : Diagram 1.1: Business strategy Opportu Strengths nities Applying, Discovering Maintaini ng Inside Strategy Outside Overcoming Preventing Weaknesse Threats s Scholars have had many opinions or outlooks of business strategy from many different points of views. According to Michael Porter (1996), a famous strategy manager of Harvard University, business strategy is considered as the art to compete in market and the development of company since: “Business strategy is the art of building up stably competitive advantages to defend”.
In the aspect of management category, business strategy is a form of planning; G.Arlleret said that “Strategy is to seek ways and find out means to reach the expected goals by policies”. 9976 9 At least, there are three identified business strategies regarding as corporate level aiming at business goals and overall scale of an organization; business-unit level is being commitments and actions to support an industry achieving competitive advantages by exploiting their core resources to specific products and marketplace; and functional strategies assists two above strategies to take effect through components of resources, processes, manpower and essential skills. A quite obvious definition of business strategy stated in Master of Business Administration curriculum of Griggs University is : “An intergrated and cordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in specific product market.2 Role of business strategy Business strategy helps companies to realize the objectives and orientation as a guideline for every business operation and to catch up with and make use of opportunities as well as to formulate proactive solutions to overcome risks and threats in competitive market. Business strategy not only contributes to the using efficiency of resources, but also promotes competitive positions and ensures sustainable development of the company.
Besides, business strategy creates a solid foundation for developing polices and making appropriate decisions adapted to fluctuation of marketplace.3 Basic features of business strategy Business strategy determines clearly major goals and business orientation of the company in a certain period. The orientation of strategy ensures the continuous and solid development in fluctuated business environment. On the other hands, business strategy also ensures the maximum mobilization and optimal combination between exploiting and using resources of the company at present and in the future, promotes advantages and obtains opportunities to hold competitive advantages. With the feature of being reflected in continuous process, business strategy always has a trend of striving and winning in market.
Additionally, business strategy will be established in a long term from 3, 5 and 10 years or further.2 Process of business strategy formulation Diagram 1.2: Process of planning business strategy Mission or Goal of Business Internal Environment External Environment Analysis (S, W) Analysis (O, T) Strategy Selection Strategy Implementation Review and Evaluation of Strategy Implementation Feedback 1.