VIETNAM NATIONAL UNIVERSITY, HANOI SCHOOL OF BUSINESS Nguyen Thi Mai Lan BUSINESS STRATEGY FOR VINH TUONG INDUSTRIAL CORPORATION IN COMPETITING WITH THE BIG FOREIGNER CORPORATIONS MASTER OF BUSINESS ADMINISTRATION THESIS Hanoi - 2007 TIEU LUAN MOI download : skknchat@gmail.com VIETNAM NATIONAL UNIVERSITY, HANOI SCHOOL OF BUSINESS Nguyen Thi Mai Lan BUSINESS STRATEGY FOR VINH TUONG INDUSTRIAL CORPORATION IN COMPETING WITH THE BIG FOREIGN CORPORATIONS Major: Business Administration Code: 60 34 05 MASTER OF BUSINESS ADMINISTRATION THESIS Supervisors: 1. Ha nguyen, MBA Hanoi - 2007 TIEU LUAN MOI download : skknchat@gmail.com TABLE OF CONTENTS ABSTRACT. vi TABLE OF CONTENTS. NECESSITY OF THE THESIS.
KEY RESEARCH AREA. CONTRIBUTIONS OF THE THESIS. 2 CHAPTER 1: THEORY FOUNDATION 1. What is strategy?.
Strategy at different levels of a business. How strategy is managed – strategic management. Analysis tools in building a strategy. Five forces model.
Value chain analysis. 23 vii TIEU LUAN MOI download : skknchat@gmail. Value and vision. 31 CHAPTER 2: CASE STUDY OF VINH TUONG INDUSTRIAL CORPORATION 2.
Overview of grid ceiling and gypsum board marketing in Viet nam 34 2. Five forces analysis in 2007. Introduction of Vinh Tuong Corporation. History story of VTI.
Introduction of La Farge and BPB. Value chain analysis. 57 viii TIEU LUAN MOI download : skknchat@gmail. SWOT matrix to form strategies.
The strategy of developing new products. The strategy of integrating back. The strategy of integrating forth. The strategy of growing market.
The strategy of reorganizing the business. The strategy of differentiation in competition. Researching and developing. Information system management.
Time table of implementation. 84 ix TIEU LUAN MOI download : skknchat@gmail.com LIST OF TABLES CHAPTER 1 Page TABLE 1. Sources of competitor data .1 Organizational structure of VTI .2 Organizational structure of Southern area .3 Organizational structure of Northern area. 66 x TIEU LUAN MOI download : skknchat@gmail.corporations LIST OF FIGURES CHAPTER 1 Page FIGURE 1.
A thorough strategic management process .2 The matrix for strategic choice .3 The four strategies .4 Michael Porter's Five Forces Model .1 The consumption of gypsum board in some ASEAN countries .2 The consumption of gypsum board in Viet Nam (a+b) .3 Turnover of VT2 of the years of 2000 -2005 .4 Quantity and Qualification of Employees of VTI .5 Qualification of Employees of VTI .1 Annual objects of VTI for the period of 2007 – 2010 .corporations xi TIEU LUAN MOI download : skknchat@gmail.corporations LIST OF ILLUSTRATIONS CHAPTER 2 Page ILLUSTRATIONS 2.1 Gypsum Division locations of Lafarge in the world .2 Market share of Gypsum board in Vietnam .1 Turnover percentage of geographic areas of market .corporations xii TIEU LUAN MOI download : skknchat@gmail. NECESSITY OF THE THESIS Strategic management is a necessary job of all managers. In business operation, strategy is a tool to support the corporation gain it objects, mission, and vision. Especially in competition, strategic management even keeps an important role in conducting the companies.
It has a main effect on existence, growing, and developing of an enterprise. A company can win lots of success, if it has right strategies for its situation. Vinh Tuong Industrial Corporation (VTI) is a Vietnamese business. At the time, it is facing to the stressful competition with two big international corporations.
To keep strongly the position of leader in domestic market as well as to gain the purpose of growing and developing the business, the company must set up the suitable strategies in the new challenge period. Through the working time at VTI, I am interested in joining to contribute the business strategies for company. Therefore, I decide to the topic: “Business strategy for Vinh Tuong Industrial Corporation in competing with the big foreign Corporations. PURPOSE - Research the issues about strategic management of business including the analysis tools, the strategic chosen, and the strategic implementation.
- Research the real situation of the company of VTI at the moment. - Apply the issues of strategic management for building up the right effective strategies for the company in practice.corporations 1 TIEU LUAN MOI download : skknchat@gmail. KEY RESEARCH AREA Research and apply the strategic management in business is the main topic. Thesis only concentrates on using the tools to analyze the current situation of VTI.
By the way, it sets up the strategies chosen. Then, it presents the ways to implement the strategies in practice operation. METHODOLOGY First, the thesis bases on the real issues of the case study of Vinh Tuong Industrial Corporation in competing with two big foreign groups. Second, thesis is used methodology of descriptive analysis, logic reason combination materialistic history.
The data is drawn from the primary and secondary sources. The methods of collecting data are taking researches, and expert advices from theory foundation and personal experience. Finally, thesis is also used statistic, formula illustration, interpreting the issues means. CONTRIBUTIONS OF THE THESIS - Introduce all process of setting up the strategic management for a business.
- Apply the issues in the real situation of VTI to analyze the information, bring out the strategic chosen, and present the ways to implement the strategies in practicing conduction of the company. OUTLINE Topic: “Business strategy for Vinh Tuong Industrial Corporation in competing with the big foreign Corporations.corporations 2 TIEU LUAN MOI download : skknchat@gmail.corporations The content of the thesis includes: Preface Introduction Chapter 1: Theory foundation – Strategy and analysis tools Chapter 2: Case Study of Vinh Tuong Industrial Corporation Chapter 3: Recommendations and Conclusions - Business strategy for Vinh Tuong Industrial Corporation in competing with the big foreign Corporations. Conclusion Reference (LUAN.corporations 3 TIEU LUAN MOI download : skknchat@gmail.corporations CHAPTER 1: THEORY FOUNDATION STRATEGY AND ANALYSIS TOOLS 1. WHAT IS STRATEGY? 1.
Definition Overall Definition: Johnson and Scholes (Exploring Corporate Strategy) define strategy as follows: "Strategy is the direction and scope of an organisation over the long- term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations". In other words, strategy is about: * Where is the business trying to get to in the long-term (direction)? * Which markets should a business compete in and what kinds of activities are involved in such markets? (markets; scope) * How can the business perform better than the competition in those markets? (advantage)? * What resources (skills, assets, finance, relationships, technical competence, facilities) are required in order to be able to compete? (resources)? (LUAN.corporations 4 TIEU LUAN MOI download : skknchat@gmail.corporations * What external, environmental factors affect the businesses' ability to compete? (environment)? * What are the values and expectations of those who have power in and around the business? (stakeholders) 1. Strategy at different levels of a Business Strategies exist at several levels in any organization - ranging from the overall business (or group of businesses) through to individuals working in it. Corporate Strategy - is concerned with the overall purpose and scope of the business to meet stakeholder expectations.
This is a crucial level since it is heavily influenced by investors in the business and acts to guide strategic decision-making throughout the business. Corporate strategy is often stated explicitly in a "mission statement". Business Unit Strategy - is concerned more with how a business competes successfully in a particular market. It concerns strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc.
Operational Strategy - is concerned with how each part of the business is organized to deliver the corporate and business-unit level strategic direction. Operational strategy therefore focuses on issues of resources, processes, people etc. How strategy is managed – strategic management In its broadest sense, strategic management is about taking "strategic decisions" - decisions that answer the questions above.corporations 5 TIEU LUAN MOI download : skknchat@gmail.corporations In practice, a thorough strategic management process has three main components, shown in the figure below: Figure 1.1 – a thorough strategic management process Strategic Analysis This is all about the analyzing the strength of businesses' position and understanding the important external factors that may influence that position. The process of Strategic Analysis can be assisted by a number of tools that will be presented in the next part.
Strategic Choice The process involves understanding the nature of stake holder expectations (the “ground rules”), identifying strategic options, and then evaluating and selecting strategic options. Normally, the business can use the matrix of strategic choice to decide what its best strategies are.corporations 6 TIEU LUAN MOI download : skknchat@gmail. Entry new market 1. Entry new market 2.
Penetrate current market 2. Penetrate current market 3. Develop the product 3. Develop the product 4.
Integrate in horizon 4. Integrate back The competitive position of the business 6. Integrate in horizon 7. Diversify in focus a centre Strong 1.
Diversify in focus a Weak centre 2. Diversify in focus a centre 2. Diversify in horizon 3. Diversify in horizon 3.
Diversify in combining 4. Diversify in combining 4. Liquidating Slow The growing rate of market Figure 1.2 - The matrix for strategic choice. Strategy Implementation (LUAN.corporations 7 TIEU LUAN MOI download : skknchat@gmail.corporations This is often the hardest part.
When a strategy has been analyzed and selected, the task is then to translate it into organizational actions. They include the action plans of administrative management, marketing, finance, R&D, information system management. ANALYSIS TOOLS IN BUILDING A STRATEGY 1. Competitive advantages Competitive Advantage - Definition A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices.
Competitive Strategies Following on from his work analysing the competitive forces in an industry, Michael Porter suggested four "generic" business strategies that could be adopted in order to gain competitive advantage. The four strategies relate to the extent to which the scope of a businesses' activities are narrow versus broad and the extent to which a business seeks to differentiate its products. The four strategies are summarized in the figure below: (LUAN.corporations 8 TIEU LUAN MOI download : skknchat@gmail. – The four strategies The differentiation and cost leadership strategies seek competitive advantage in a broad range of market or industry segments.
By contrast, the differentiation focus and cost focus strategies are adopted in a narrow market or industry. Strategy - Differentiation This strategy involves selecting one or more criteria used by buyers in a market - and then positioning the business uniquely to meet those criteria. This strategy is usually associated with charging a premium price for the product - often to reflect the higher production costs and extra value-added features provided for the consumer. Differentiation is about charging a premium price that more than covers the additional production costs, and about giving customers clear reasons to prefer the product over other, less differentiated products.
Examples of Differentiation Strategy: Mercedes cars; Bang & Olufsen (LUAN.corporations 9 TIEU LUAN MOI download : skknchat@gmail.corporations Strategy - Cost Leadership With this strategy, the objective is to become the lowest-cost producer in the industry. Many (perhaps all) market segments in the industry are supplied with the emphasis placed minimizing costs. If the achieved selling price can at least equal (or near) the average for the market, then the lowest-cost producer will (in theory) enjoy the best profits. This strategy is usually associated with large-scale businesses offering "standard" products with relatively little differentiation that are perfectly acceptable to the majority of customers.
Occasionally, a low-cost leader will also discount its product to maximize sales, particularly if it has a significant cost advantage over the competition and, in doing so, it can further increase its market share. Examples of Cost Leadership: Nissan; Tesco; Dell Computers Strategy - Differentiation Focus In the differentiation focus strategy, a business aims to differentiate within just one or a small number of target market segments.