GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT ESTABLISHING BUSINESS STRATEGIES FOR THIEN PHUC MINH JOINT-STOCK COMPANY PERIOD 2011-2015 Class: GaMBA01. Nguyen Tuan Anh 2. Nguyen Thi Tu 3. Nguyen Pham Huu Duy 4.
Nguyen Quoc Huong HA NOI 2011 GaMBA01.N05 – Group 9 Strategic Management TABLE OF CONTENTS LIST OF ABBREVIATIONS. 3 LIST OF TABLES, FIGURE. Significance of the study. Significance of the study.
Purpose of the study. Capstone Project Report Structure.7 CHAPTER 1: LITERATURE REVIEW. Definition of business strategy. Roles of business strategies.
Types of business strategy. Strategy building process. Deriving from company’s mission and goal. Analyzing and evaluating external environment.3 The business internal environment analysis.4 Strategic management tool: SWOT matrix, IE matrix.21 Chapter 2: THE ACTUAL SITUATION ANALYSIS OF THIEN PHUC MINH JOINT-STOCK COMPANY (TPM).1 The introduction of Thien Phuc Minh JSC.1 Company name, structure, history and development process.
Analysis of Macro environment (PESTLE model). Technology, Social – Cultural, Political - Legislation.N05 – Group 9 Strategic Management 2. Analysis of industry environment (PORTER model). Bargaining power of consumers.4 Bargaining power of suppliers.
Analysis of internal environment. Organization – Human Resource.2 Production facilities & raw material areas.43 CHAPTER 3: PROJECTED BUSINESS PLAN FOR TPM DURING 2011-2015.1 Marketing mix strategy. Human resource strategy.N05 – Group 9 Strategic Management LIST OF ABBREVIATIONS STT Abbreviation Name 01 TPM Thien Phuc Minh 02 VNF1 Vietnam Northern Food Corporation 03 ST Supermakets 04 CH Shops 05 CTCP Joint Stock Company 06 DN Company 07 EFE External effective factor 08 IFE Internal effective factor 09 DNNN State company 10 DNTN Private company 11 TTTM Trade center 12 DT Total profit 13 LN Net profit 14 CF Cost 15 GDP Gross domestic product 16 KHKD Business plan 17 KTTT Market economy 18 KT-XH Economy – Society 3 GaMBA01.N05 – Group 9 Strategic Management LIST OF TABLES Table number Table name Page 01 Profit and loss statement 2009-2010 25 02 Compurgation to domestic retail competitors 32 03 Product structure – Convenience store 38 04 Convenience stores’ location 39 05 Starting product sector- Supermarket 40 06 Location and construction plan- Supermarket 42 07 Swot analysis 43 08 Selected strategies 46 09 EEF martrix of a TPM 50 10 IEF martrix of a TPM 51 LIST OF FIGURE Figure number Figure name Page 01 Five competitive driving forces of M. Porter 14 Combining factors of macro environment and 02 17 micro environment.
03 EFE Matrix 18 04 IFE Matrix 20 05 SWOT Matrix 21 06 IE Matrix 22 07 The company chart 24 I – E martrix, a total martrix of internal and 08 53 external factors of TPM 09 Connection of Evaluation system 56 4 GaMBA01.N05 – Group 9 Strategic Management INTRODUCTION 1. Significance of the study 1. General introduction: Thien Phuc Minh Joint-stock Company (TPM) was established on January 2008 on a footing of 15 founders from Vinafood I joining capital. TPM’s main business activity is to distribute consumer goods and set up a retail chain throughout the northern area of Vietnam, from Hue northwards.
One year after the establishment of TPM, all ordinary shareholders and strategic counterparts were offered to join. With the strategy to mobilize all strength of social resource, TPM set out a target of attracting strategic shareholders that are companies with years of experiences in the field of retail distribution, or those who committed to build a long-term relationship with TPM based on a firm binding to the sustainable development of both side. Significance of the study As a newly established company, TPM hasn’t had a complete strategy for its development. Thus, to be engaged in research into such strategies has a tremendous meaning to the company’s accomplishing its target to build a modernized commercial business model.
A proper research into strategies would facilitate TPM in attaining an up-to- date business model, creating a premise for a sustainable development and a step- by-step assertion of position and brand in the consumer goods retail market. Purpose of the study The purpose of this study is to identify proper business strategies that assists TPM in realizing its vision of standing among the top 10 retail companies in Northern Vietnam.N05 – Group 9 Strategic Management The retail field is truly a business environment with high competitiveness and full of challenges and difficulties. Moreover, it is also an environment in which not many retail companies in the Northern area have been able to gain noticeable success. Rivals are not only just specific companies but also a sizable system of grocery retail outlets pervading every corner with great competitive strength.
Therefore, with the desire to find a proper strategy for the company, after a course of study at Griggs, members of the group have applied their learnings to establish business strategies for TPM Company by logically analyzing, methodically defining problems, focally solving, correctly grasping target customers, threats, and rivals. Thence, appropriate strategies for goods, price, marketing, human resource. have been produced. These strategies play a decisive role in conditioning the company’s growing progressively, effectively and approaching closer to professionalism.
Study methodology The study process had knowledge on strategic management, marketing management, human resource management, economic management, and operation management used. This study was carried out by methods of problem identification, study, analysis and solving. This study utilized following materials: Field survey, documentation of the General Department of Statistics, study reports of retail market of Vietnam, figures from articles reflecting the business situation of internationally renowned retail corporations that have been operating in Vietnam, such as Metro Cash & Cary (Germany), Bourbon (France), Parkson (Malaysia), Zen Plaza (Japan). Analysis tools: PESTLE, PORTER model, SWOT analysis, QSPM With the reasoning basis adopted through MBA training program of Griggs in coordination with practical experiences, survey results, market surveys, and opinions of lecturers, we, in co-operating with the company, have linked theory with practice to complete this strategy report.N05 – Group 9 Strategic Management 4.
Capstone Project Report Structure Introduction Chapter I : Reasoning basis. Chapter II : Analyzing the situation of Thien Phuc Minh Joint-stock company. Chương III : Proposing strategies for Thien Phuc Minh Joint-stock company, period 2011 – 2015.N05 – Group 9 Strategic Management CHAPTER 1 LITERATURE REVIEW Every company after being established and starting its business always sets a development target for itself. Depending on business characteristic, goal, and vision, each company has its own way of approaching and creating a business strategy.
Hereafter, we would like to introduce a popular methodology used to build and select business strategies by companies in their process of creating business strategies. Definition of business strategy. Strategy is a set of activities designed to create sustainable competitive advantage. According to McKinsey (1978), strategy is a plan of controlling and utilizing organizational resources such as finance, personel, risk limitation to measure the business efficiency of particular sector, market, or to mobilize supplement capital from credit organizations or individuals; therefore, it is necessary to work with a plan in order to enhance and ensure the vital rights of a company.
Strategy is everything that an organization has to do based on its strengths and weaknesses in the context of opportunities and threats. A sound strategy will bring effectiveness helping managers define goal, thorough course of action, which creates values for employees and shareholders. Business strategy of a company is that company’s long-term direction and scope with the purpose of achieving competitive advantage through its own resource configuration in the context of changing environment to meet the market demands and satisfy expectiations of all parties. Business strategy does not aim to 8 GaMBA01.N05 – Group 9 Strategic Management point out a specific method to attain those targets because that is the mission of many other supporting programs and functional champagne.
Business strategy only creates frames to guide thinkings about business direction and to act. In business operation of a company, the existence and success depends, first and foremost, on the rightness of the strategy outlined and the properness of strategy enforcement. A company that implements its business strategy well has basis advantages and effectiveness compared to ones that do not: Having a business strategy helps company clearly define its purposes and directions in business activities. Only then can it determine which direction to organize its business structure, what it should do to reap successes, and when the company will be able to achieve the objectives identified.
Roles of business strategies. Role in planning: Business strategy helps a company clearly identify its purpose and direction for the future; orientate long-term businesses, which is a solid basis for the implementation of the operation, helping administrators to know, review and orientate the direction, the method, and the time when outcome is achieved. Role in forecasting: In the globalization trend, business environment always vacillates, hence the analysis of environment and the build of business strategies helps administrations plaintly recognize opportunities as well as threats, recognize strengths and also weaknesses in their company. From that point, they can analyze, evaluate, and forecast future environment conditions to bring out appropriate strategies, make the most of their opportunities and strengths, alleviate threats and weaknesses, and help their company overcome all difficulties, challenges to gain success.
Role of controlling: Business strategy helps administrators utilize and allocate resources reasonably, make decisions appropriate to particular conditions of business environment, increase the close-knit association among employees, strengthen the prevention of jeopardies occurring, avoid financial risks, enhance the 9 GaMBA01.N05 – Group 9 Strategic Management company’s manufacture effectiveness, and bring it a stable, sustainable development. Types of business strategy. - Catergorized by levels: +/ Coporate level: (Overall strategy) is the strategy designed for the whole corporation on all businesses that it participates in. The purpose of this strategy is to show the target that the company wants to achieve is an overall view upon all areas it is operating in.
+/ Business level (sector): is designated for a particular area. If the company only participates in one sector, a business level strategy is then also considered a coporate level strategy. +/ Functional level: is deemed strategy for distincive functions (finance, human resource, marketing…) - Catergorized by strategy content : Based on strategy content, administrators can classify strategies into following groups : +/ Commercial strategy +/ Financial strategy +/ Human resource strategy +/ Technological, technical strategy - Catergorizing by development process: By this method, strategies consist of : +/ Orientaing strategy : strategy that mentions major orientation of business objectives. It is built on results of analysis of business environment and company’s internal situation.
+/ Operating strategy: includes alternative operating plans of the company in particular situations and proposed strategy adjustment.N05 – Group 9 Strategic Management 2. Strategy building process. The process of building a business strategy is as follow : 2. Deriving from company’s mission and goal.
To identify the goal of the company is a very important opening stage. Company is required to determine its mission, target that it pursues in its business area. Simultaneously, business process must clearly indicate the legal validity and business ethics to the society. Once mission, goal, and business area of the company is determined, it is essential that groups of factors affecting them be analyzed as a basis for the formation of business strategy.
Analyzing and evaluating external environment. During the existence and development, companies are affected by many factors : internal factors, external factors… Therefore, when developing business strategies, we need to analyze the effects of these factors on production and business activities of the company. Analizing and evaluating factors from the external environment is for the awareness of opportunities and threats that company will have to encounter during its operation so that company can find out appropriate business strategies, take advantage of opportunities, limit risks to company’s development and sustainable stability. External environment includes microenvironment and macroenvironment.
Macroenvironment includes factors of economic environment, political environment, social and cultural environment, legal environment, technological environment, natural environment, global environment that have impacts on the existence and development of the company. - Economic environment (Economic factor) 11 GaMBA01.