GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT BUSINESS STRATEGY OF KINH DO JOINT STOCK COMPANY TO 2015 CLASS: GAMBA01, N03 HANOI, JUNE 2010 TABLE OF CONTENTS FOREWORD 1. Objective of research 3. Scope of research 4. Method of research 5.
Structure of report CHAPTER 1: THEORETICAL BACKGROUND OF THE ENTERPRISE STRATEGIC PLAN 1 1. CONCEPT OF STRATEGY AND STRATEGIC PLAN 1. Concept of strategy 1. Role of strategy for the enterprise 1.
BUSINESS STRATEGIC ADMINISTRATION PROCEDURE 1. Step 1 - Agreement on strategic plan, determination of mission and orientation objective of the enterprise: 1. Step 2 - Environmental analysis 1. External environmental analysis 1.
Macro environmental analysis 1. Micro environmental analysis 1. Internal environmental analysis 1. Step 3 - Determination of long-term objectives and establishment of enterprise development strategy 1.
Step 4 - Determination of action plans and development of strategic implementation solutions 1. Step 5 - Inspection and adjustment 1. TOOLS USED FOR ASSESSMENT AND ESTABLISHMENT OF BUSINESS STRATEGY 1. External factor evaluation matrix - EFE: 1.
Internal factor evaluation matrix - IFE: 1. QSPM matrix: CONCLUSION ON THE CHAPTER 1 CHAPTER 2: ANALYSIS OF EXISTING CONDITIONS OF BUSINESS AND PRODUCTION AT KINH DO JOINT STOCK COMPANY 2. INTRODUCTION ABOUT KINH DO SYSTEM 2. Formation and development 2.
Organizational diagram of the system of Kinh Do companies (Kinh Do Group) 2. Production and business result 2. Main groups of products of Kinh Do Joint Stock Company 2. Revenue of each group of products through years 2.
Gross profit of each group of products through years 2. Summary of some achieved targets of Kinh Do Joint Stock Company in 2006-2009 2. ANALYSIS OF PRODUCTION AND BUSINESS ENVIRONMENT OF KINH DO - EXTERNAL ENVIRONMENT 2. Political, policy and law environment: 2.
Cultural and social environment: 2. Sector penetration obstacles: 2. ANALYSIS OF INTERNAL ENVIRONMENT 2. Human resources management 2.
External factor evaluation matrix - EFE: 2. Internal factor evaluation matrix - IFE: CONCLUSION ON THE CHAPTER 2 CHAPTER 3: BUSINESS STRATEGIC ORIENTATION AND KINH DO DEVELOPMENT SOLUTIONS TO 2015 3. FORECAST ON MARKET DEMAND 3. OBJECTIVES OF KINH DO JOINT STOCK COMPANY: 3.
BUSINESS STRATEGIC PLAN OF KINH DO JOINT STOCK COMPANY TO 2015 3.1 Analysis of main strategies 3. Forward combination strategy: 3. Backward combination strategy: 3. Horizontal combination strategy: 3.
Concentrated growth strategy based on product development: 3. Concentrated growth strategy based on market penetration: 3. Concentrated growth strategy based on market development: 3. Central operation diversification strategy: 3.
SOME SOLUTIONS TO IMPLEMENTING KINH DO JOINT STOCK COMPANY DEVELOPMENT STRATEGY TO 2015: 3. Establishment of marketing strategy for each line of product 3. Solution to cost reduction for exploitation of rural market: 3. Human resources solution 3.
Quality management solution 3. For the State: 3. For the sector: CONCLUSION ON THE CHAPTER 3 CONCLUSION 4 LIST OF TABLES No. Sign Name Page 01 Table 2.1 Revenue of each group of products through years 22 02 Table 2.2 Gross profit of each group of products through years 23 03 Table 2.3 Some achieved targets in 2008 and in 2009 24 04 Table 2.4 Account receivables 26 05 Table 2.5 Account payables 26 06 Table 2.6 Some main financial targets 27 08 Table 2.7 GDP growth rate of Vietnam in the period 2006-2009 28 09 Table 2.8 Average GDP per capita from 2006 to 2009 28 07 Table 2.9 Average population classified by sex, urban area and rural area 31 10 Table 2.10 Main competitors of Kinh Do 33 11 Table 2.11 SWOT matrix 42 12 Table 2.12 External factor evaluation matrix for Kinh Do Joint Stock 43 Company 13 Table 2.13 Internal evaluation matrix for Kinh Do Joint Stock Company 44 14 Table 3.1 Estimated capacity of Vietnam confectionery market to 2015 47 15 Table 3.2 Revenue of Kinh Do Joint Stock Company over the past 10 years 48 16 Table 3.3 Forecast equation formulation 48 17 Table 3.4 Forecast revenue of Kinh Do Joint Stock Company to 2015 49 18 Table 3.5 Some targets of Kinh Do Joint Stock Company to 2015 16 23 Figure 2.1 Logo of Kinh Do Joint Stock Company 18 24 Figure 2.2 A Kinh Do Bakery in Ho Chi Minh City 4 25 Diagram 1.1 Strategic administration procedure 6 26 Diagram 1.2 Micro environment (Michael Porter) 8 27 Diagram 1.3 Model of competitive advantage by Michael E.4 Internal environment 12 29 Diagram 1.5 SWOT matrix 16 30 Diagram 2.1 Member companies 19 31 Diagram 2.2 Organizational diagram of Kinh Do Joint Stock Company 22 32 Diagram 2.3 Revenue proportion of products in 2009 24 5 33 Diagram 2.4 Gross profit proportion of products in 2009 FOREWORD 1.
Topic rationales: - Vietnam is shifting to the socialism-oriented market mechanism under the State management in the context of the international and regional economic integration. Faced by the increasingly changing and fierce business environment at present, each enterprise should find a proper direction to keep pace with new trend and keep increasing its position in the market. - Together with the national economic growth, Kinh Do has achieved a great deal of successes, contributing to leading the food processing of Ho Chi Minh city in particular and Vietnam in general to a new height. However, Vietnam has just joined the World Trade Organization (WTO), business environment is likely to have many changes.
If depending only on the past advantages and business experiences, Kinh Do will not stand firm and continue development. With a view to finding out direction in order to maintain the position of Kinh Do in the future, concurrently applying the knowledge acquired from the master program, we have chosen the research topic "Business strategy of Kinh Do Joint Stock Company to 2015" 2. Objective of research Based on the analysis of micro environment, macro environment, production and business situation of Kinh Do, find out suitable business strategy to help Kinh Do maintain its position and keep growing to become an economic group of Vietnam in the future. Scope of research - Research space: Confectionery market in Ho Chi Minh city and other provinces and cities throughout the country.1 - Research time: The topic focuses on researching production and business situation of Kinh Do Joint Stock Company in the period 2006-20092 1 Kinh Do is a group consisting of many subsidiaries specialized in many sectors (confectionery, beverage and real estate, etc.
Here, we only focus on confectionery. Method of research: - We have adopted the following method to carry out the topic: Description, collection of figures, summarization and analysis of production and business situation of Kinh Do Joint Stock Company. Structure of report Apart from the foreword, conclusion and annex, the report is structured into 3 chapters: - Chapter 1: Theoretical background - Chapter 2: Analysis of production and business situation of Kinh Do Joint Stock Company. - Chapter 3: Strategic direction and development solutions for Kinh Do Joint Stock Company to 2015 With limited knowledge, condition and capability, the report can't help avoiding errors.
Your consideration is highly appreciated. 2 For the purpose of information confidentiality, we could access only financial information of only two financial years, namely 2008 and 2009. 7 CHAPTER 1: THEORETICAL BACKGROUND OF THE ENTERPRISE STRATEGIC PLAN 1. CONCEPT OF STRATEGY AND STRATEGIC PLAN 1.
Concept of strategy Concept of strategy has appeared for a very long time, starting from military sector. At present, there are many different concepts of strategy: According to Pred R. David: "Strategy includes means to achieve long-term objective". According to Haroid Kooniz and other authors in the work titled "Key issues in management", strategy is an action plan aimed at achieving specific objectives.
Main strategies of an organization contain objectives and commitments on the resources to achieve such objectives and main policies to be complied with while using these resources. According to Alfred Chandler: "Business strategy covers the assignment of basic long-term objectives of the enterprise, concurrently choosing action method or process and distributing resources to carry out such objectives". According to Dr. Nguyen Thi Lien Diep: "Strategy is a general action plan towards carrying out the set objective.
Strategy is not aimed at outlining specific way of achieving objectives because this is the task of numerous assistance programs and other functional strategies. Strategy only creates frame to guide the thinking and action". Strategic administration - Strategic administration is the process of researching present and future environments, planning objectives of the organization, putting forth, organizing, carrying out and checking the implementation of decisions to achieve such objectives in the present environment as well as in the future environment. Role of strategy for the enterprise - Strategy determines the existence and development of the enterprise, thus enabling the enterprise to develop in a sustainable manner.
- Strategy is a basis to determine specific production and business targets and measures such production and business result. - In general, strategy includes three groups of factors: 8 + Group of factors related to environment + Group of factors related to reality and implementation method of the organization + Group of factors related to the activities of the organization - Corresponding to these three groups of strategy, according to Dr. Nguyen Thi Lien Diep in the work titled "Strategy and business policy", we have three different approaches in strategic administration: + Environmental approach: Strategic administration is a determination process to connect internal ability of the organization with opportunities and threats of the external environment. + Objective and method approach: Strategic administration is part of long-term decisions achievement administration activities for the organization.
+ Action approach: Strategic administration is the consideration in the present and future environment, creating objectives of the organization, making decisions, carrying out such decisions and controlling the decision implementation, achievement of objectives in the present and future environment. BUSINESS STRATEGIC ADMINISTRATION PROCEDURE 9 Diagram 1.1: Strategic administration process Determine vision and mission of the organization Analyze external Analyze internal environment environment Determine strategic objectives Formulate strategy: At Company level At business level Functional level International business Plan and allocate resources Put strategy into action Structure organization and achieve the integration and control 1. Step 1 - Agreement on strategic plan, determination of mission and orientation objective of the enterprise: - Agreement on strategic plan: Means the mutual cooperation and assistance between strategists and the persons involved in strategic implementation so that: + The persons involved in strategic planning will understand more clearly about the established strategies and can carry out easily. 10 + It will be possible to increase feasibility of the set strategies.
- Determination of mission of the enterprise: Mission is defined as the reason for existence, significance of the appearance and existence of the enterprise. Mission of the company is the declaration of the company towards the society. Normally, such mission includes such contents as customer, product or service, market, technology, philosophy, concern in the community and staff. Mission shows the future panorama of the company.
Mission is the important basis for the proper selection of objectives and development strategies of the enterprise. - Determination of objective of the enterprise: Objective is the content concretization and the means to succeed in the declaration on the mission of the enterprise. Step 2 - Environmental analysis Operating environment of the enterprise includes internal environment and external environment. It exerts direct or indirect effects on the existence and development of the enterprise.
Therefore, the research on the internal and external environment is of great necessity in planning strategy for the enterprise. External environmental analysis 1. Macro environmental analysis The analysis of external environment allows us to identify opportunities and threats whereby the enterprise can work out appropriate strategy. External environment is analyzed through the following environments: - Economic environment: Gross domestic product, average income per capita, monetary policy, international economic integration.
- Government, politics and law environment: The enterprise should grasp political and external trends, policies of the Party and the State that affect the development of the enterprise.