Formulating Business strategies of Quang Hanh Coal Company Ltd 2010 - 2015 GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT FORMULATING BUSINESS STRATEGIES OF QUANG HANH COAL COMPANY LTD (2010 – 2015 PERIOD) Students: Dao Ba Tung Ta Quang Tuan Nguyen Thi Cam Nhung Nguyen Huu Nghi CLASS: GaMBA01.X01- GROUP 5 Hanoi, 2010 GGro 1 Formulating Business strategies of Quang Hanh Coal Company Ltd 2010 - 2015 TABLE OF CONTENTS TABLE OF CONTENTS.5 LIST OF FIGURES AND TABLES. Name of the Capstone Project. Rational of the Capstone Project. Purpose of the Capstone Project.
Objects and scope of the Capstone Project. Methods of study. Contribution of the Capstone Project. Structure of the Capstone Project.
10 CHAPTER 1: THEORICAL BACKGROUND OF BUSINESS STRATEGY.1 Definitions of business strategy.2 Concepts of strategic management.3 Strategic management tasks.1 Selecting mission and main objectives.2 Analyzing external environment.3 Analyzing internal environment.3 Techniques of analyzing strategies.1 Internal Factor Evaluation (IFE).2 External Factor Evaluation Matrix (EFE).3 Competitive Photos Matrix.4 Tools for adopting business strategy.2 I-E Matrix: Combination of internal and external factors.31 GGro 2 Formulating Business strategies of Quang Hanh Coal Company Ltd 2010 - 2015 1.3 The Quantitative Strategic Planning Matrix (QSPM).32 CHAPTER 2: ANALYSIS OF THE COMPANY’S INTERNAL AND EXTERNAL ENVIRONMENT FOR FORMULATING BUSINESS STRATEGIES.1 Introduction of the Company.2 Functions of the Company.3 Organization chart and human resources.4 Company’s Business results.5 Specific characteristics of the Company’s operation.6 Vision and mission.2 Analyzing external environment.3 External Factor Evaluation Matrix (EFE).3 Analyzing internal environment according to functions in the 56 2.2 Finance and business results of companies.4 Production and exploitation technologies.7 Internal Factor Evaluation Matrix (IFE).66 CHAPTER 3: ADOPTING BUSINESS STRATEGIES FOR THE COMPANY, SOLUTIONS AND CONCLUSIONS.2 Analysis of I-E Matrix.72 GGro 3 Formulating Business strategies of Quang Hanh Coal Company Ltd 2010 - 2015 3.3 Analysis of Quantitative Strategic Planning Matrix (QSPM).4 Adopting business strategies for Quang Hanh Coal Company Ltd.5 Solutions to implementing strategies.1 Solutions to management and development of human resources.3 Solutions to cost management.4 Solutions to safety and labour safety.6 Strategy implementation itinerary.7 Recommendations to Governing Bodies.88 GGro 4 Formulating Business strategies of Quang Hanh Coal Company Ltd 2010 - 2015 ACKNOWLEGEMENT In completing this capstone project, we have been receiving precious individual and collective support. We would like to express our gratitude to all the staff of VINACOMIN - Quang Hanh Coal Company Limited, who have given us good conditions and highly valuable support in providing documentation as well as studying conditions in our completing this project. We would like to undertake that the contents of this assignment are fulfilled with our best efforts in studying, finding and choosing the topic for analyzing of all the members of the group and with reference to a number of documents (as quoted hereafter). We would also like to commit that, this project has not been submitted to any other studying or training programs.
Hanoi July, 2010 Group of Authors GGro 5 Formulating Business strategies of Quang Hanh Coal Company Ltd 2010 - 2015 SOME CONVENTION PROVISIONS: - Notes documents: [X/Y]: Document X, Page Y LIST OF FIGURES AND TABLES No Name of Figures Page Figure 1.1 Five tasks of strategic management 11 Figure 1.2 Five competitive forces model by Michael Porter 18 List of Tables No Name of Table Page Table 1.1 Internal Factor Evaluation Matrix (IFE) 276 Table 1.2 External Factor Evaluation Matrix (EFE) 287 Table 1.3 Competition Photos Matrix 29 Table 1.4 SWOT Matrix 31 I-E Matrix – Combination of internal and external Table 1.6 The Quantitative Strategic Planning Matrix (QSPM) 33 Table 2.1 Organizational structure of the Company 35 Results of implementation of key indicators from Table 2.2 36 2007 - 2009 The growth of GDP and GDP per capita of Vietnam Table 2.4 Strengths, weaknesses of competitors in the industry 4849 Table 2.5 Competitive Matrix Photos 4950 Table 2.6 Summary Table of Opportunities and Threats 5253 GGro 6 Formulating Business strategies of Quang Hanh Coal Company Ltd 2010 - 2015 No Name of Table Page External Factor Evaluation Matrix of Quang Hanh Table 2.7 54 Coal Company Ltd. Competitive Photos Matrix of Quang Hanh Coal Table 2.8 55 Company Ltd Table 2.9 Labour structure of Quang Hanh Coal Company Ltd.10 Labour quality of Quang Hanh Coal Company Ltd.11 Business results 2007 - 2009 58 Table 2.12 Summary Table of Strengths and Weaknesses 654 Internal Factor Evaluation Matrix (IFE) of Quang Table 2.13 66 Hanh Coal Company Ltd.1 SWOT Matrix of Quang Hanh Coal Company Ltd 68 I-E Matrix – Combination of internal and external Table 3.2 73 factors Quantitative Strategic Planning Matrix (QSPM) of Table 3.3 73 Quang Hanh Coal Company Ltd. Adopted strategies for Quang Hanh Coal Company Table 3.5 Strategy implementation itinerary 84 GGro 7 Formulating Business strategies of Quang Hanh Coal Company Ltd 2010 - 2015 OPENING 1. Name of the Capstone Project Formulating Business strategies of Quang Hanh Coal Company Ltd in 2010 – 2015 periods 2.
Rational of the Capstone Project Today most of enterprises have to cope with the changing and challenging environment: global financial crisis and economic recession, climate changes, globalization and international integration worldwide. Operated in coal production and exploitation, Quang Hanh Coal Co., Ltd always faces more and more rapidly changing socio-economic environment and rival competition in the field of business. In this complicated changing condition, how does the Company survive, develop sustainably and effectively? This leads to the emphasis on the function of strategic management in the Company. For the above reasons, the group of authors has chosen the topic: “Formulating Business strategies of Quang Hanh Coal Company Ltd.
In 2010-2015 period” to study and complete this capstone project for the group as well as for the Company. Purpose of the Capstone Project Based on the findings from studying theory of business strategy to analyze the components of the environment which affect the Company to identify strengths, weaknesses, opportunities and threats in order to specify the vision, goals and propose solutions, strategies for effective and sustainable business development in the next period. Objects and scope of the Capstone Project Objects: Quang Hanh Coal Company Ltd Address: No 302 Tran Phu Street, Cam Pha, Quang Ninh Province. Scopes: Using some theories of business strategy and strategy management to focus on analyzing the real situations and main issues which are having and GGro 8 Formulating Business strategies of Quang Hanh Coal Company Ltd 2010 - 2015 going to have impact on the Company’s business in order to formulate feasible and effective business strategies for the operation of the Company.
Methods of study The following methods are applied in studying: - Systematizing - Logical reasoning - Processing and analyzing statistics. - Synthetizing, comparing based on statistics (Sources of statistics: Quang Hanh Coal Company Ltd. Contribution of the Capstone Project - This capstone project is as a meaningful overview of the real situation of production and business activities of companies and a proposed strategy for sustainable development in the future. - Based on analysis of the external and internal environment of the Company, this project provides a number of strategies for sustainable development and enhancing competitiveness of the company during the year 2010-2015.
Structure of the Capstone Project The structure of the capstone project is as follows: In addition to the Forewords and Reference, this capstone project includes three chapters: Chapter 1: Theoretical background of business strategy Chapter 2: Analysis of the Company’s internal and external environment for formulating business strategies Chapter 3: Adopting business strategies for the Company, solutions and conclusions GGro 9 Formulating Business strategies of Quang Hanh Coal Company Ltd 2010 - 2015 CONTENTS CHAPTER 1: THEORICAL BACKGROUND OF BUSINESS STRATEGY 1.1 Definitions of business strategy There are several definitions of business strategies depending on conceptions of different authors. In 1962, Alfred Chandler – one of the first economists initiating the theory of strategic management defined: “Strategy is the determination of basic long-term goals and objectives of an enterprise and the adoption of the course of action and the allocation of resources for carrying out these goals”. In 1980s, as the strategic management became a major subject, James B. Quinn gave a more general definition: “Strategy is the pattern or plan that integrates an organization’s major goals, policies and action sequences into a cohesive whole.
Although there are a large number of strategy definitions, business strategy can be understood as the art of organizing and assimilating resources in an optimal manner, proposing and executing decisions to adapt to changing trend of the environment for business success and achievement of long-term objectives.2 Concepts of strategic management Strategic management is a set of managing decisions and actions with determination of an enterprise’s long-term performance. Strategic management includes ongoing activities: Evaluating and monitoring the environment (internal and external environment); formulating strategies; implementing strategies, assessing and controlling strategies. Therefore, studying strategy focuses on GGro 10 Formulating Business strategies of Quang Hanh Coal Company Ltd 2010 - 2015 monitoring and assessing external opportunities and threats in the context of internal strengths and weaknesses.3 Strategic management tasks According to Assoc. Le The Gioi; Dr.
Nguyen Thanh Liem, MA. Tran Huu Hai (Strategic Management, Statistics Publisher, 2009), strategic management has five tasks in close relation: - Developing a vision: Describe the future image of the enterprise; specify its goals and how it will become. This provides long-term orientation, clarifies the future vision of the enterprise and gives the enterprise a feeling of acting in a purposive way. - Setting objectives: Convert the mission into specific performance targets.
- Formulating a strategy to achieve performance targets. - Implementing and executing the strategy which has been chosen effectively. - Evaluating performances, reviewing the situation and initiating corrective adjustments on the vision, long-term orientation, objectives, strategies or practice based on experience, changing conditions, ideas and new opportunities.1: Five tasks of strategic management Developing Developing aa Developing Developing aa Developing Developing aa Developing Developing aa Developing Developing aa vision vision of of strategy strategy vision vision of of strategy strategy vision vision of of strategy strategy vision vision of of strategy strategy vision vision of of strategy strategy and and and mission mission and mission mission and and mission mission and and mission mission and and mission mission Repairing Repairing Adjustments Adjustments Improvements/ Improvements/ Improvements/ Improvements/ Restoring Restoring 1,2,3,4 1,2,3,4 ifif necessary ifif necessary Modifications Modifications Modifications Modifications ifif necessary necessary necessary necessary ifif necessary necessary ifif necessary necessary (Source: Le The Gioi, Strategic Management, Statistics Publisher, 2009) GGro 11 Formulating Business strategies of Quang Hanh Coal Company Ltd 2010 - 2015 1.2 Formulating strategies The process of formulating strategies can be divided into five steps, including: (1) Selecting the mission and main objectives of the company; (2) Analyzing the external environment to identify opportunities and threats; (3) Analyzing the internal environment in order to identify strengths and weaknesses of the organization; (4) Selecting strategies based on finding the resources, capabilities and core competencies and develop it to neutralize the risk, take advantage of opportunities from the external environment; (5) Implementing strategy. Environmental analysis tasks inside and outside the company and then selects the strategy.
Implementation strategies will include designing organizational structures and control systems appropriate to put the strategy into practice [5/31].1 Selecting mission and main objectives The first step of the strategic management process is to define the mission and main objectives of the organization. A mission and main objective of the organization provides a context for building strategies. A mission demonstrates reasons of the organizations’ existence and instructs the organization what to do. The major objectives determine what the organization hopes to meet within the medium and long term.
Mission statement is a key imperative of how an organization's perception of the demands of stakeholders.