Business strategy Viglacera AAC joint stock company stage 2011-2015 2011 │GLOBAL ADVANCED MBA PROGRAM │ (GaMBA X05.10) Group No: 8 CAPSTONE PROJECT REPORT BUSINESS STRATEGY OF VIGLACERA AUTOCLAVED AERATED CONCRETE JOINT STOCK COMPANY STAGE 2011 TO 2015 Dang Minh Tam- Team leader. Vu Thanh Nhung. Le Thi Hoai Thu. Nguyen Trong Nghi Class:GaMBA X05.10 HA N O I 2011 Page 1 Business strategy Viglacera AAC joint stock company stage 2011-2015 GRIGGS UNIVERSITY GOLBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT Business strategy of Viglacera Autoclaved Aerated Concrete joint stock company stage 2011 to 2015 Dang Minh Tam- Team leader.
Vu Thanh Nhung. Le Thi Hoai Thu. Nguyen Trong Nghi Page 2 Business strategy Viglacera AAC joint stock company stage 2011-2015 HANOI, 2011 Acknowledgement We owe profound indebtedness to many people for their invaluable help during the conduct of our research. Initially, We would like to express our deepest gratitude to our supervisors from Griggs University and Vietnamese Universities for their helpful lectures and guidance.
Owing to them, we have gained a lot of precious knowledge during our study at Grigg University. As well, we send our sincere thanks to examination committee for their practical recommendations to the thesis. Last but not least, we are grateful to our leaders and collegues at Viglacera Autoclaved Aerated Concrete Joint Stock Company as well as our classemates for their support , helpful suggestion and constant encouragement during our data collection. Without their help, we could not complete this paper.
Page 3 Business strategy Viglacera AAC joint stock company stage 2011-2015 TABLE OF CONTENT Page VERIFICATION AND ASSESSMENT OF VIGACC. 3 ACKNOWLEDGEMENT 3 TABLE CONTENT 4 LIST OF TABLES AND DIAGRAMS 9 INTRODUCTION 11 1. Overview and importance of the study 11 2. Objectives and scope of the study 12 3.
Methodology of the study 13 4. Structure of the study 13 CHAPTER 1. THEORETICAL BACKGROUND ON THE 14 DEVELOPMENT OF THE BUSINESS STRATEGY 1.1 Theories on business strategy 14 1.2 Principles of a strategy 14 1.3 Roles of business strategy 15 1.4 Types of business strategy 15 1.2 THE PROCESS OF PLANNING BUSINESS STRATEGIES 17 1.1 Analysis of effects from external factors 17 1.1 Macro-environmental analysis –PEST model 17 1.1 Polictical and legal factors 18 1.3 Socio-cutural factors 19 Page 4 Business strategy Viglacera AAC joint stock company stage 2011-2015 1.2 Micro-environmental analysis-Micheal Porter’s five 20 forces model 1.1 Vendor's pressure analyst 21 1.2 Threats of substitutes 21 1.3 Threats of new entrants 21 1.4 power of customers 22 1.5 Intensity of competitive rivalry 22 1.3 Analysis of internal factors 23 1.1 Inter-enterprise environment 23 Analysis of production performance and 1.2 Analysis of Marketing competence 24 Analysis of human resources of Viglacera AAC, 1.2 Enterprise Financial capacity 24 1.2 Asset structure and financial resources 24 1.2 Finacial management and allocation 24 1.3 TOOLS TO DEVELOP A STRATEGY 25 1.1 External Factor Evaluation Matrix (EFE) 26 1.2 Internal Factor Evaluation Matrix (IFE) 26 1.3 External-Internal Matrix (IE) 27 1.4 Competitive Profile Matrix (CPM) 28 1.5 SWOT Matrix 29 Page 5 Business strategy Viglacera AAC joint stock company stage 2011-2015 1.6 Quantitative strategic planning matrix (QSPM) 30 CHAPTER 2: ANALYSIS OF BUSSINESS ENVIRONMENT OF 32 VIGLACERA AAC, JSC 2.1 GENERAL INTRODUCTION ABOUT VIGLACERA AAC, JSC 32 2. The process of formation and development of the company 32 2.
The organizational structure of the Company 32 2. Vision, mission, core values of the Company 32 2. The functions and business tasks 32 2. The process of manufacturing technologies 34 2.
Characteristics of business activities 36 2.2 ANALYSIS OF EFFECTS FROM EXTERNAL FACTORS 38 2.1 Analyzing the impact of political- law factors 38 2.2 Analyzing the impact of economic factors 39 2.3 Analyzing the impact of sociocultural factors 39 2.4 Parse technology element's impact 40 2.5 Parse geographic factor's impact.2 Micro-Environment (Michael E. Porter’s five forces model ).1 Analyze the Power of supplier 42 2.2 Analyze the Threats of subsitute products 42 2.3 Analyze the Threats of new entrants 43 2.4 Analyze the Power of customers 43 2.5 Analyze the Intensity of competitive rivalry 44 Conclusion 47 Page 6 Business strategy Viglacera AAC joint stock company stage 2011-2015 External Factor Evaluation Matrix (EFE) 48 2.3 ANALYSIS OF EFFECTS FROM EXTERNAL FACTORS 51 2.1 Analysis of the internal environment of Viglacera AAC, JSC 51 Analysis of production performance and technological 2.2 Analysis of Marketing competence 54 2.3 Analysis of human resources 63 2.2 Analysis of financial capacity of Viglacera AAC, JSC 64 2.2 Asset structure and financial resources 68 2.3 Finacial management and allocation 68 Conclusion 68 Internal Factor Evaluation Matrix (IFE) 71 Internal-External Matrix (IE) 72 Competitive Profile Matrix ( CPM) 72 CHAPTER 3: SELECTION OF STRATEGIC SOLUTIONS FOR 73 VIGLACERA AAC, JSC STAGE 2011 TO 2015 3.1 STRATEGY AND VISION OF THE COMPANY 73 3.2 SWOT MATRIX FOR VIGLACERA AAC, JSC 73 3.1 Summary of SWOT matrix for the company.2 Formation of options 76 3.3 SELECTION OF STRATEGIC OPTIONS FOR THE 78 COMPANY Page 7 Business strategy Viglacera AAC joint stock company stage 2011-2015 3.1 Selection of strategic options through QSPM Matrix 78 3.2 The schedule on implementing strategic options 80 3.4 STRATEGIC SOLUTIONS OF VIGLACERA AAC, JSC 80 3.5 RECOMMENDATIONS AND SOLUTIONS 81 Conclusion 82 Reference list 83 Page 8 Business strategy Viglacera AAC joint stock company stage 2011-2015 LIST OF TABLES AND DIAGRAMS No. Names of tables and diagrams Page 1 Figure 1.1: The process of planning a strategy 17 2 Figure 1. Porter’s five forces Model 21 4 Figure 1.4: Model of developing a strategy 25 5 Figure 1.5: Diagram of Internal-external Matrix 28 6 Figure 2.1: A picture of Viglacera AAC, JSC 32 7 Table 2.2: The structure of joint-stock capitals at 31/12/2010 34 8 Figure 2.3: Outline of production technology 35 9 Figure 2.4: Approximate analysis of ingredients 36 10 Figure 2.5: Management apparatus map 37 11 Figure 2.6: Personnel apparatus 38 12 Table 2.7: Output of building materials from 2010 to 2020 40 Table 2.8: OEvaluate on opportunities and threats of macro 13 41 environment.Opportunities- Threat 14 Table 2.9: Companies with the same products in Vietnam 45 Table 2.10: Producers of Autoclaved Aerated Concrete in 15 46 Hanoi and nearby provinces.11: Evaluation on five forces 47 Table 2.12: OEvaluate on opportunities and threats of micro 17 47 environment.Evaluation on opportunities and threat 18 Table 2.13: EFE Matrix 48 Page 9 Business strategy Viglacera AAC joint stock company stage 2011-2015 Table 2.14: Production output of the company in two years 19 51 2010 and 2011 20 Table 2.15: Types of products 52 21 Figure 2.16: The image of the product 53 Figure 2.17: Image of the products used in Coteccons – Cau 22 54 Giay 23 Table 2.18: System of distributors of Viglacera AAC JSC 56 24 Table 2.19: Summary table to compare AAC and burntbrick 58 Table 2.20: Summary table to compare the cost when using 25 59 AAC and burnt brick Table 2.21: Summary on the use of AAC in regions in Viet 26 61 Nam Table 2.22: Forecast about demands for AAC from 2010 to 27 62 2020 28 Table 2.23: Summary table of AAC usage at present.24: Balance sheet of Viglacera AAC, JSC in the first 63 and second quarters of 2011 Table 2.25: Business results of Viglacera AAC, JSC in the 30 66 first and second quarters of 2011 31 Table 2.26: Financial indicators of Viglacera AAC, JSC 67 32 Table 2.27: Internal factor eveluation Matrix IFE 71 33 Table 2.28: Internal-external matrix IE 72 34 Table 2.29: Competitive profile Matrix CPM 72 35 Table 3.1 : Summary table of SWOT Matrix 73 36 Table 3.2: QSPM Matrix 79 Page 10 Business strategy Viglacera AAC joint stock company stage 2011-2015 GENERAL INTRODUCTION 1.
Overview and importance of the study: On the way to realize its pledge from World Trade Organization entry, Việt Nam has opened retail outlets. Therefore, the country needs to develop and consolidate its commercial infrastructure appropriately as well as promote competitive advantages and ability for enterprises. The development of Vietnamese building materials has met the increasing demands of society. Experts define that it is high time for the field to develop sharply as the needs for building materials will raise rapidly in the next few years.
Moreover, manufacturing expansion of baked materials will encounter obstacles such as Government policy on production restriction and shortage of lands. The latest production technologies have been greatly advanced, which enables producers to make light materials with ratio 0.2, foamed concrete and aerated concrete with compressive strength 4-10 MPA. These products are popularly applied in multi-storeyed construction projects because of their features such as lightness, durability and good appearance. 121/2008/QĐ-TTg on 29/8/2008 about approval of General planning the development of Vietnamese building materials until 2010 stated a route: the production volumes of non-baked materials as a replacement for baked ones would occupy 10-15 % in 2010; 20-25% in 2015 and 30-40% by 2020.
Some strong points of aerated concrete: - Light weight. - Good sound-proof. Page 11 Business strategy Viglacera AAC joint stock company stage 2011-2015 - Good heat insulation and energy saving - High accuracy - High rigidity. - Resistance against many insects - Environment friendly Due to the global economic recession and crisis which greatly affected Vietnam in 2011, Vietnamese Construction faced a lot of difficulties.
2011 could be regarded as the year of frozen real estates. Government finance tightening, unsound policies and real-estate bubbles worried investors and consumers of indeed needs. Non-baked brick is a new product line with many technological and quality advantages and brings the country benefits of environment and resources. However, it is hard to popularize the product in the market as consumers do not really know about the new product and have been familiar with traditional bricks for a long time.
Because of a changeable business environment, with knowledge about business management and market opportunities, our group No. 8 of Class X0510 decided to choose this topic. We aim to analyze and select business strategies, give solutions to implement these strategies in the period of 2011-2015 as well as improve competitiveness and business effectiveness for the sustainable development of the company. Objectives and scope of the study: 2.
Objectives of the study: Studying principles and process of developing strategies, as well as analysis and selection of best strategies so as to help the enterprise choose the most suitable business strategy Clarifying and applying theories on business strategy planning into reality to develop and select best business strategies for Viglacera AAC, JSC in the period of 2011-2015. Page 12 Business strategy Viglacera AAC joint stock company stage 2011-2015 Suggesting groups of solutions to implement selected business strategy successfully 2.Scope of the study Because of limited time and resources, researchers only focus on studying selection of business strategies for Viglacera AAC, JSC in the period of 2011-2015 3. Methodology of the study: The company’s data and minor data on building materials are used. Besides, analysis, statistics, comprehensive analysis, comparative statistics are employed to assess the situation, as well as synthesize strengths, weaknesses, opportunities and threat.
Then, solutions and recommendations about selection of business strategies would be given to implement those strategies between 2011 and 2015. This aims to improve competitive power and business efficiency for the sustainable development of Viglacera AAC, JSC. Structure of the study: Apart from Introduction, Conclusion and Reference list, the study includes three chapters: Chapter I: Theoretical background on the development of business strategies Chapter II: Analysis of business environment of Viglacera AAC, JSC Chapter III: Selection of business strategies for Viglacera AAC, JSC stage 2011-2015 Page 13 Business strategy Viglacera AAC joint stock company stage 2011-2015 CHAPTER 1: THEORETICAL BACKGROUND ON THE DEVELOPMENT OF THE BUSINESS STRATEGY 1. Theories on business strategy 1.
“Strategy” definition “Business strategy” is the guideline for an enterprise’s activities. It defines types of products or service, business scale, production resources, profitability and developmental prospects of the enterprise.