GLOBAL ADVANCED MASTER OF INTERNATIONAL BUSINESS ADMINISTRATION CAPSTONE PROJECT REPORT DEVELOPING BUSINESS STRATEGIES FOR THANG LONG CONSTRUCTION CORPORATION IN THE PERIOD OF 2012 – 2016 Group 7 – GaMBA.X0710 Khuong The Duy Trinh Van Hanh Bùi Van Rang Nguyen Van Trung Ha Noi, Dec 2011 1 TABLE OF CONTENTS INTRODUCTION. The necessity and meaning of the research topic. Subject and scope of the research. Structure of the research topic.
7 CHAPTER 1: LITERATURE REVIEW OF STRATEGY AND STRATEGIC MANAGEMENT. The concepts of development strategy. The role of business strategy. The strategy development process.
Defining mission and main objectives. External environment analysis:. Impacts of macro environment:. Social and cultural environment:.
Political and legal environment. Analysis of industry environment. Bargaining power of suppliers:. Threat of substitutes.5 Existing competitors in the industry.3 Analysis of internal environment influences.
Human resource and organizational factors. Research & Development factors. Financial - Accounting factors. Production and technological factors.
Marketing and sales factors. Identifying sustainable competitive advantage. Strategic analysis tools. EFE Matrix: Evaluation of the company’s external factors.
IFE Matrix: Evaluation of the company’s internal factors. Basic business strategies. Generic competitive strategies. Cost leadership strategy.
Product differentiation strategy. Combination of generic strategies. QSPM model to select the optimal strategies. Implementation and adjustment of selected strategies.
Designing a system of control and evaluation.37 3 CHAPTER II: ANALYZING THE SITUATION BUSINESS STRATEGIES OF THANG LONG CONSTRUCTION CORPORATION. Overview of Thang Long Construction Corporation:. History of development:. Product and market.
Production - business performance. Output – Revenue - Earnings:. Evaluation on some other economic indicators. ANALYSIS OF OPPORTUNITIES AND CHALLENGES FOR THANG LONG CONSTRUCTION CORPORATION.
Analysis of macro-environment. Social-cultural environment:. Legal-political environment. Analysis of industry environment.
Analysis of competitors. Risk of new competitors. The customer groups. Assessment of opportunities and challenges.
ANALYSIS & ASSESSMENT THE STRENGTHS AND WEAKNESSES OF THE THANG LONG CONSTRUCTION CORPORATION. Human Resource Management. Structure of staff. The organization, human resource management:.
The issue of training. Analysis of financial capacity. Analysis of technological capability and equipment. Marketing and PR work.
Analysis of management qualification. Assessing the strengths and weaknesses of Thang Long costruction corporation. Determine the competitive advantage of the Corporation. Reviewing the results of environmental analysis and setting the matrix.
Assessing the external environment, internal use EFE matrix and IFE.68 CHAPTER 3: PROPOSAL OF BUSINESS STRATEGIES AND IMPLEMENTATION SOLUTIONS FOR THANG LONG CONSTRUCTION CORPORATION. Vision, mission and general objectives. Proposed strategies and appropriate strategic choices.2 Selection of priority strategy. Solutions for human resources.
Solutions on finance. Solutions on Marketing and Market. Implementation plan for the strategic solutions and Requirements. Improving the organizational structure and assessment control.78 6 LIST OF FIGURES Figure 1.1: Micro environment Figure 1.Porter’s Five Forces Model Figure 1.3: Fundamental elements to create competitive advantages Figure 1.4: IE Matrix Figure 1.5: Strategy implementation activities Figure 2.1: Organization chart of Thang Long Construction Corporation LIST OF TABLES Table 1.2: Macro-environmental factors.3: The process of identifying sustained competitive advantages Table 1.4: Michael Porter’s Generic Strategies Table 1.5: QSPM Model Table 2.1: Production - business performance Table 2.2 Estimating total demand for construction of traffic work up to 2017 Table 2.3 Financial statement of the Corporations in 2011 Table 2.4 Financial Structure of the Corporations in 2011 Table 2.5 Proportion of qualifications of indirect employees Table 2.6: Proportion of equipment, plant and technology Table 2.7: Opportunities and challenges Table 2.8: The situation of the labor structure of the Corporation Table 2.9 : The structure of equipments & machineries of Thang Long construction corporation Table 2.10:Competitive profile matrix Table 2.11 : Matrix evaluation of external factors Table 2.12 : Matrix evaluation of internal factors Table 2.13 : IE matrix Table 2.14: SWOT matrix Table 3.1: The quantitative strategic planning matrix for optimal strategy seletion Table 3.2: Implementation plan for the seleted strategies 7 ACKNOWLEDGEMENT First of all, the Group No.X0710 would like to express our sincere thanks for the Master of Business Administration Program, the Affiliate Programs between Griggs University, USA and Center for Education Technology and Career Development, Vietnam University Hanoi for organize MBA course in Vietnam and facilitating our Capstone Project Report.
Secondly, we would like to express our sincere thanks to the Leaders and staffs of Thang Long Construction Corporation, who have fully supported our team in providing valuable input information for this Capstone Project Report. Last but not least, let our thanks go to our families whose encouragement has helped us complete the course without having any difficulties. We have tried to complete the assignment in the best way using our best knowledge and ability. However, the shortcomings are inevitable.
We wish to receive valuable comments from teachers and colleagues. The necessity and meaning of the research topic. To harmonize with the country’s industrialization and modernization process, the transport industry must develop more to meet growing good and passenger transport demand, enhance the socio-cultural exchanges and economic integration among economic regions. Moreover, the transport industry must also ensure its role as the bridge for international integration.
It not only plays an important part of social infrastructure which paves the way to develop other industries, but also create big changes in the process of economic restructuring and make great progresses in the social development process in general. To accomplish the above tasks, it is required that traffic construction companies should enhance technical and technological innovation as well as train a highly qualified scientific and technological contingent, administrative staff, businesses, skilled workers, especially expand the relation activities to compete in the domestic and international market. Therefore, enterprises must develop the strategies which go in line with the national development, globalization and regionalization trends in the world. Setting up the business strategies which identify development priorities, specialization, main products for the sustainable development is essential.
In the plan of the strategy, it should consider many external and internal factors, analyze information as a basis for planning business activities in the short and long term, focus efforts and resources on the key objectives to achieve the best results, quickly respond to the uncertain situation and adapt to changes. Like other units in the transport industry, Thang Long Construction Corporation also faces many challenges. Especially after joining WTO, the economic globalization and regional economic integration has become an overwhelming and irreversible development trend, the competitive advantage of some key industries (bridge, tunnel) of the Corporation becomes more fragile than ever, when other business units in the same industry also generate and accumulate competitive advantages as that of the Corporation. 9 In such context, it is really necessary to build a stable solution or a development strategy for Thang Long Construction Corporation.
With these requirements above, our group- group No. 07, class x0710 carried out the research topic: “DEVELOPING BUSINESS STRATEGIES FOR THANG LONG CONSTRUCTION CORPORATION IN THE PERIOD OF 2012 - 2016” with a view to using the knowledge gained at school into practices as well as contributing to the sustainable development of the Corporation in the current situation. Subject and scope of the research - Subject: - Analysis on the business environment of Thang Long Construction Corporation helps us build the business strategies for the Corporation during 2012-2016. - Scope of the research: - Subjects: the business strategy of the Corporation.
- Scope: in curriculum frameworks and in Vietnam market. Research methodology The primary source of data is from the annual report of the Corporation, other corporations in the same industry. From there, we use the research methods such as data analysis and synthesis, logical thinking, deductive methods… 4. Expected results - Improve the knowledge about strategic management in the current environment, - Analyze and judge the impact of external and internal factors on Thang Long Construction Corporation.
- Recommend the appropriate business strategy to improve the competitive advantage as well as to promote the efficiency in business for the Corporation during the period 2012-2016. Structure of the research topic Chapter 1: Theorecal background on business strategy development Chapter 2: Strategic analysis of Thang long Construction Corporation 10 Chapter 3: Proposal of business strategies and implementation solution for Thang Long Construction Corporation 11 CHAPTER 1: LITERATURE REVIEW OF STRATEGY AND STRATEGIC MANAGEMENT 1. The concepts of development strategy - Strategy: Currently, there are different definitions of strategy; the underlying reason of this difference is that there are different systems of concepts of organizations in general and different approaches to organization’s strategy in particular. In terms of ontology, depending on the perspective of the positivism or following the constructivism trend, the nature of strategy is determined by natural laws or significantly influenced by the subject.
In fact, strategy is usually defined according to the practice in order to facilitate the implementation in the organization The definition of William F. Gluek 2 argues that: "Strategy is a unified, coordinate and comprehensive plan designed to ensure that the company’s basic objectives are successfully accomplished. However, the viewpoint is not really complete. In practice, official plans that are formulated specifically, sometimes, fail.
Therefore, there should be responsive plans in the business process. Besides, business strategy or competitive strategy is defined according to the following six factors: product market, investment level, functional strategy, strategic assets and strategic capabilities, resource allocation, synergistic effect between enterprises. In summary, formulated strategies should help businesses achieve the set goals. However, in the process of strategy formulation and determination, goal orientation is not enough.
Strategy development should include implementation roadmap, specific timeframe and locations with certain resources. The role of business strategy In the highly competitive market economy, to be successful, every business should have a strategy. That means business managers must understand the changing trends the market, find out key success factors, exploit the advantages of the business, recognize the weaknesses of the business, understand competitors and the customers’ wants, know how to approach the market. Thereby, the company can make creative decisions to deploy more or cut back operations activities at certain time and areas.
12 The above efforts are to determine an optimal strategy which has specific influences on basic business functions as follows: - Provides an enterprise a specific and effective business direction which is the guideline for every functional activity of the enterprise. This helps enterprises promote their competitive advantages and strengths, as well as increase their market share. - Helps enterprises limit uncertainties and risks to the minimum level, enabling the enterprise’s long-term operations stability and continuous development. Strategy classification - Strategy classification according to strategy levels: In the past, people often divide the strategic system of a corporate into three levels: - Corporate - level strategy - Strategic business unit - level strategy - Functional strategy Currently, with the globalization trend, many companies expand their activities beyond national borders and it refers to the fourth strategy level: - Global Strategy -Classification according to strategic contents: Based on strategic contents, managers can divide strategies into: +/ Marketing strategy, commercial strategy +/ Financial strategy +/ Human strategy +/ Technological strategy - Classification according to the development process: According to this classification, business strategy includes: +/ Orientation strategy: refers to the orientation of the business’s major goals.
It is built based on the results of external and internal environment analysis. +/ Operations strategy: refers to the operations plans of the business in each specific situation and expected strategy adjustments 13 4. The strategy development process Previously, business strategy decisions used to be made once for a long time and this was the job of top executives. Currently, the strategy development process is made more frequently and requires the participation of all members of the business, including the following contents: Functions, duties and strategic targets of the enterprise (1) Internal analysis of the Business environment enterprise (S,W) (3) analysis (O,T) (2) Strategy selection (4) Corporate level strategy (5) Business units and functional divisions Strategy implementation (6) Evaluation of implementation results (7) Feedback Figure 1.1: Business strategy development process 4.
Defining mission and main objectives - Defining the organization’s mission: The first step of the strategic management process is to define the mission and main objectives of the organization.