CAPSTONE PROJECT REPORT FORMULATING BUSINESS STRATEGY OF THE NATIONAL PHARMACEUTICAL COMPANY No 2 (CODUPHA) IN PERIOD 2012-2016 Group Number: 8 Class: Gamba01.x0310 Group members: Mr. TRAN HUY THONG Mrs. TRAN THI VIET HONG Mr. NGUYEN TIEN TRUNG Mr.
NGUYEN NGOC TU HANOI 2011 CHƯƠNG CHƯƠNGTRÌNHTRÌNHĐÀOĐÀOTẠO TẠO THẠC SĨ THẠC SĨQUẢN QUẢN TRỊ KINH TRỊ KINH DOANH DOANHQUỐC TẾ TẾ QUỐC Global Global Advanced Advanced Master Master of of Business Business Administration Administration ACKNOWLEDGEMENT We would like to express our thanks to the Center For Educational Technology & Career Development (ETC) – Vietnam National University, the teachers and staffs of Global Advanced Master of Administration Program – Griggs University for dedicated teaching, guidelines and creating the best conditions for us during studying time in class GaMBA01.X0310 as well as for our course completion. Studying time in Global Advanced Master of Administration Program – Griggs University for us is not forgettable, from where we have been acquiring newest knowledge and updated courses, exchanging bilateral time between students through extracurricular activities as well as appreciating the group working methods, improving the collectiveness in each individual. We would like to thank the enthusiastic help of the board of directors and executive officers of the National Pharmaceutical Company No 2 (CODUPHA) and its Hanoi branch for supplying and explanation of use of the company’s documentations. A lot of thanks to collective GaMBA01.X0310 and to our families for encouraging us in completion of this Capstone Project Report.
We warrant that the materials used in this Capstone Report were getting from clear sources in accordance with regulations. Thank you and best regards! The Authors Capstone Project Report Page 1 GaMBA01.X0310 - Group 8 CHƯƠNG CHƯƠNGTRÌNHTRÌNHĐÀOĐÀOTẠO TẠO THẠC SĨ THẠC SĨQUẢN QUẢN TRỊ KINH TRỊ KINH DOANH DOANHQUỐC TẾ TẾ QUỐC Global Global Advanced Advanced Master Master of of Business Business Administration Administration TABLE OF CONTENT LIST OF ABBREVIATIONS.4 LIST OF TABLES. 5 LIST OF FIGURES, GRAPHS. 10 THEORETICAL BASIS FOR FORMULATING BUSINESS STRATEGIES OF ORGANIZATION.
Business strategy of the organization. Concepts of Business Strategy. Nature of Business Strategy. Characteristics of Business Strategy.
The difference between strategy and tactics, policy, planning and plan. 10 elements of strategic management. Necessary of formulation of business strategy of the organization. The process of formulation of business strategy.
Assessing the external environment and inside the enterprise. Designing options of business strategy. Implement, evaluate and improve business strategy. Tools for analyzing and choosing the business strategy of the organization.
The Input Stage - Collecting data and systematizing information. Competitive profile matrix (CPM). The Matching Stage - SWOT matrix. The Decision Stage - a Quantitative Strategic Planning Matrix (QSPM).
22 ANALYSIS OF THE BASES OF FORMULATION OF BUSINESS STRATEGY FOR CODUPHA. Brief about the National Pharmaceutical Company No 2 (Codupha). The process of establishment and development:. Functions and tasks of Codupha:.
The mission of Codupha:. The organizational structure of Codupha. Analyzing the external environment of the organization. Analysis of macro environment.
Political and legal environment. Socio-cultural environment. Analyze micro environment.40 Capstone Project Report Page 2 GaMBA01.X0310 - Group 8 CHƯƠNG CHƯƠNGTRÌNHTRÌNHĐÀOĐÀOTẠO TẠO THẠC SĨ THẠC SĨQUẢN QUẢN TRỊ KINH TRỊ KINH DOANH DOANHQUỐC TẾ TẾ QUỐC Global Global Advanced Advanced Master Master of of Business Business Administration Administration 2. Matrix evaluates external factors (EFE matrix).
Analysis of internal environment of the enterprise. Warehousing system at headquarters and branches. Products and Partners. The financial capability.
Internal Factor Evaluation matrix (IFE matrix). Competitive Profile Matrix (CPM). 62 CHOICE OF BUSINESS STRATEGY AND IMPLEMENTATION SOLUTIONS. The long-term development of Codupha.
Determining the position and the common goal of Codupha. Choice of business strategy for CODUPHA in period 2012-2016. Quantitative Strategic Planning Matrix (QSPM). Choice of business strategy.
Estimated Budget for chosen strategies. Strategy implementation solutions. Market Development Strategy. 79 Human resource management.
83 LIST OF REFERENCES.87 APPENDIX 1: List of distributed by Codupha pharmaceiticals and medicaments.87 APPENDIX 2: Income Statement and Balanced Sheets of CODUPHA in 2010.87 Capstone Project Report Page 3 GaMBA01.X0310 - Group 8 CHƯƠNG CHƯƠNGTRÌNHTRÌNHĐÀOĐÀOTẠO TẠO THẠC SĨ THẠC SĨQUẢN QUẢN TRỊ KINH TRỊ KINH DOANH DOANHQUỐC TẾ TẾ QUỐC Global Global Advanced Advanced Master Master of of Business Business Administration Administration LIST OF ABBREVIATIONS CODUPHA The National Pharmaceutical Company No 2 (La Compagnie Du Pharmaceutique) EFE External Factor Evaluation GSP Good Storage Practice GDP Good Distribution Practice GLP Good Laboratory Practice GMP Good Manufacturing Practice GPP Good Pharmacy Practice IFE Internal Factor Evaluation SWOT Strengths; Weaknesses; Opportunities; Threats WHO World Health Organization BMI Business Monitoring International CPC 1 The National Pharmaceutical Company No 1 Foripharm The National Pharmaceutical Company No 3 Vinapharm Center of Pharmaceuticals and Cosmetics Sapharco Saigon Pharmaceutical Company Capstone Project Report Page 4 GaMBA01.X0310 - Group 8 CHƯƠNG CHƯƠNGTRÌNHTRÌNHĐÀOĐÀOTẠO TẠO THẠC SĨ THẠC SĨQUẢN QUẢN TRỊ KINH TRỊ KINH DOANH DOANHQUỐC TẾ TẾ QUỐC Global Global Advanced Advanced Master Master of of Business Business Administration Administration LIST OF TABLES No List of tables Page 1 Table 1. Matrix SWOT 20 2 Table 2.1: GDP growths of Vietnam 29 3 Table 2.2: Comparison of advantages of Codupha with some major 35 competitors 4 Table 2.3: External factor evaluation matrix for pharmaceutical 41 industry 5 Table 2.4: Number of staff and income level in period 2006-2010 43 6 Table 2. Results and effectiveness of business operations at the 44 National Pharmaceutical Company No 2 in period 2006-2010 7 Table 2. Sales revenue of the 100% state-owned companies under 47 Vietnam Pharmaceutical Corporation in period 2009-2010 8 Table 2.7: Drug warehouses of Codupha 49 9 Table 2.8: Summary of transportation means 51 and logistics staff of Codupha 10 Table 2.9: Turnover of the Codupha by product groups in period of 52 2006-2010 11 Table 2.10: Capital structure of Codupha by sources in period 2006- 53 2010 12 Table 2.11: The ROE indicators of the company from 2006-2010 55 13 Table 2.12: Internal Factor Evaluation matrix (IFE matrix) 55 14 Table 2.13: Statistics of the proportion of drug supply into the 57 treatment blocks of some leading drug distributors 15 Table 2.14: The Competitive Profile Matrix 60 16 Table 3.
The business goals of Codupha in 2012-2016 63 17 Table 3. Summarized SWOT matrix 67 18 Table 3. The Quantitative Strategic Planning Matrix 75 19 Table 3.4: Estimated Budget for chosen Strategies 77 Capstone Project Report Page 5 GaMBA01.X0310 - Group 8 CHƯƠNG CHƯƠNGTRÌNHTRÌNHĐÀOĐÀOTẠO TẠO THẠC SĨ THẠC SĨQUẢN QUẢN TRỊ KINH TRỊ KINH DOANH DOANHQUỐC TẾ TẾ QUỐC Global Global Advanced Advanced Master Master of of Business Business Administration Administration LIST OF FIGURES, GRAPHS No List of figures, graphs Page 1 Figure 1. Process of formulating and implementing of business 16 strategy 2 Figure 2.
Organization chart of the CODUPHA 26 3 Figure 2.2: Annual expenditure for drugs per capita (USD/person/year) 32 4 Figure 2. The coverage of Codupha 50 5 Figure 2.4 – Capital structure of Codupha in period 2006-2010 54 Capstone Project Report Page 6 GaMBA01.X0310 - Group 8 CHƯƠNG CHƯƠNGTRÌNHTRÌNHĐÀOĐÀOTẠO TẠO THẠC SĨ THẠC SĨQUẢN QUẢN TRỊ KINH TRỊ KINH DOANH DOANHQUỐC TẾ TẾ QUỐC Global Global Advanced Advanced Master Master of of Business Business Administration Administration INTRODUCTION 1. Reasons of choice of the researched topics: Pharmaceutical industry is an industry with high specific characteristics, which impacts significantly on the social life, directly affects the health and lives of peoples, is a state-controlled sector, tightly regulated to ensure adequate supply of medicament needs to protect the health of society. Pharmaceuticals also are goods bringing high revenue and having strong mobility on the domestic and the world markets.
Together with the development of the pharmaceutical market is fierce competition among domestic pharmaceutical companies, between domestic and foreign pharmaceutical companies, especially after Vietnam joined the World Trade Organization (WTO). To survive and develop, Vietnam pharmaceutical companies are forced to study and apply innovative business strategies in real conditions of each enterprise. Health care needs of people are very big, parallel with the economic development of the country and society, the number of incurable diseases is increasing. In addition, when the life has improved to higher values, peoples are more conscious in protecting their health.
According to the statistics of the Ministry of Health, the expense for drugs takes almost 60% of total hospital charges, also according to Ministry of Health, the drugs manufacturing in Vietnam ensure about 36.7% of needs [2], besides, Vietnam currently can not produce a wide variety of brand-name drugs. Expenses for drugs are very high but drug prices on the market are being pushed up and make people more difficult in getting required medicines. Happened cases that peoples bought counterfeit and very poor quality drugs Supplying right types, adequate and good quality of common drugs to proprietary medicine is main task of pharmaceutical industry in general and the pharmaceutical companies in particular. Pharmaceutical industry also is responsible for stable drug prices in the market, contributing to lower inflation for society.
Capstone Project Report Page 7 GaMBA01.X0310 - Group 8 CHƯƠNG CHƯƠNGTRÌNHTRÌNHĐÀOĐÀOTẠO TẠO THẠC SĨ THẠC SĨQUẢN QUẢN TRỊ KINH TRỊ KINH DOANH DOANHQUỐC TẾ TẾ QUỐC Global Global Advanced Advanced Master Master of of Business Business Administration Administration The National Pharmaceutical Company No 2 is a large state-owned enterprise responsible for: + Direct import of pharmaceutical products, cosmetics, functional foods, raw materials, medical equipment. + Direct and nationwide distribution to hospitals, health centers, pharmacies, pharmaceutical companies. + National reserves of medicines and national circulation reserves of medicines to ensure supplying a full range of preventive and treatment drugs in all circumstances according to the Ministry of Health’s directions. Willing to contribute to the development of the organization, better meet the duties and responsibilities assigned, taking advantage of opportunities, overcoming challenges of the new development process, we have selected the topic for Capstone Project Report of Strategic Management course as Formulating Business Strategies of the National Pharmaceutical Company No 2 (CODUPHA) in period 2012 to 2016 year.
Study subjects: Study subjects in Capstone Project Report are "Specific strategies" to improve efficiency in production and business activities of the National Pharmaceutical Company No 2 in particular and contribute to development of the pharmaceutical industry of Vietnam in general, better serve the needs of society. The purpose of the research: Analyze and clarify the basis for formulating business strategies to improve business efficiency of the National Pharmaceutical Company No 2 in period 2012- 2016 years. Thereby, other enterprises working in the pharmaceutical industry can refer and apply to their organizations. Research Methodology: To be able to build the business strategy of the organization, we have used the relevant theoretical basis, analyze the internal and external environmental factors of the organization, summarize existing information and input into the Capstone Project Report Page 8 GaMBA01.X0310 - Group 8 CHƯƠNG CHƯƠNGTRÌNHTRÌNHĐÀOĐÀOTẠO TẠO THẠC SĨ THẠC SĨQUẢN QUẢN TRỊ KINH TRỊ KINH DOANH DOANHQUỐC TẾ TẾ QUỐC Global Global Advanced Advanced Master Master of of Business Business Administration Administration SWOT matrix to evaluate, from where select the chosen business strategies and business solutions as well as implementation route.
Scope of study: Focusing on assessment of the actual situations of production and business activities of the National Pharmaceutical Company No 2, comparing with a comparable units with production and business activities in the pharmaceutical industry, studying impact factors such as economic, cultural, social and technological environments of pharmaceutical industry of Vietnam and the world, studying the competition factors through five competitive forces of Michael Porter, studying human factors, ability, business situation, the distribution system. of the organization. In this Capstone Project Report we have used a number of documents and statistics of the Ministry of Health, Vietnam Drug Administration, and the National Pharmaceutical Company No 2, a number of magazines, books and information on the internet. Contributions of the Research: * Summarizing numbers of theoretical issues related to business strategy.
* Analyzing and assessing a full range of environmental factors affecting the business strategy of the National Pharmaceutical Company No 2 in particular and pharmaceutical industry of Vietnam in general.