Synthesis Proposal Business strategy of PHALAMI in the period 2012-2016 (The Business Strategy of Autoclaved Aerated Concrete Brick in the period 2012-2016) PHALAI MINERAL ADMIXTURE. Doan Trung Tinh 2. Luong Hong Phong 3. Dang Hai Anh 4.
Nguyen Thi Thu Huong TABLE OF CONTENT Item Page INTRODUCTION 5 I. Reasons for choosing this theme 5 II.The research objective 6 III.The research methodology 6 CHAPTER 1: THEORETICAL FRAMEWORK OF STRATEGIC 8 MANAGEMENT 1. The definition of strategic management 8 1. The significance of strategic management 8 1.
The process of strategic management 9 1. The determinants of constructing strategy 10 1. Analysis and evaluation of external environment 10 1. The general environment 11 1.
The industrial environment 12 1. Analysis and evaluation of internal environment 13 1. Tools to construct strategy 20 1.1 The External Factor Evaluation Matrix (EFE) 20 1.2 The Internal Factor Evaluation Matrix (IFE) 21 1.3 The Strengths Weakness Opportunities Threats matrix 22 (SWOT).4 The Quantitative Strategic Planning Matrix (QSPM). 23 CHAPTER 2: AN ANALYSIS OF BUSINESS ENVIRONMENT IN 27 PHALAMI.
The external environment analysis by using PEST Matrix 28 2. Political and legal issues 30 2. The industrial environment (An analysis of five factors in 34 competitive model of Michael Porter) 2. The bargaining power of suppliers 34 -2- 2.
The bargaining power of buyers 34 2. The threat of new entrants 35 2. The threat of subsitude products 36 2. The competitive pressure among rivalries 37 2.
The matrix of external environment evaluation EFE 40 2. The internal environment analysis 41 2. The financial capacity and economic indicators 42 2. State management advantage 46 2.
The specification of product advantage 46 2. Evaluation of rivals’ competition 48 2. Checking and monitoring 53 2. Production and operation 54 2.
Management and governance capacity 55 2. Internal environment evaluation matrix (IFE) 55 CHAPTER 3: Construction and selection of business strategy for Phalami 58 3. The orientation of development of PHALAMI. The objectives of PHALAMI.
Estimating the demand for ACC brick 59 3. Value Chain Analysis 60 3. Strategy selection- Analysis of strengths and weaknesses of 65 strategic alternatives. Alternative strategy- QSPM 67 3.
PHALAMI’s strategy implementation 70 3. Solutions of human resource 71 3. The general recommendations about the strategy of PHALAMI.,jsc 71 CONCLUSIONS 73 REFERENCES 74 APPENDICES BUSINESS INCOME STATEMENT IN 2009, 2010, 75 2011; BALANCE SHEET Some pictures of the company 85 -4- INTRODUCTION I. Reasons for choosing this theme: Vietnam has joined into World Trade Organization.
In the trend of globalization, firms are facing a lot of opportunities as well as challenges to develop. To survive and develop, firms must establish appropriate orientations and strategies of business on the basis of research and analysis of external and internal environment, thereby being able to take advantage opportunities when they come, minimizing threats in business environment, stimulating their own strengths and limiting their own weaknesses as well. Deriving from this fact, the construction of business strategy is very necessary for each firm. It helps firms have clear orientations and objectives of business, driving divisions and individuals in the firms to common ultimate goals, preventing resource dispersion, which can weaken the firms, from happening.
The business environment nowadays varies quickly; the competitiveness on the global level requires the firms to be continuously changing and creative to adapt with these changes. Phalami JSC is a new company, which was established in 2008. Its business is to produce and trade Autoclaved Aerated Concrete Brick (AAC brick) in the construction material market. This is a new type of material in Vietnam, friendly with the environment, and having several better functions than traditional bricks.
And this is appropriate with the orientation of development of the government in the constructional material industry. Along with opportunities coming from the market, the government policies, the firm also faces many challenges and difficulties. The establishment of a business strategy, which is appropriate with the actual market conditions, taking advantage of opportunities, and minimizing adverse impacts from the market and competition of rivals, is an important work of the company’s leaders. -5- To link between theory and practice in these issues, the theme “Establishing business strategy for Autoclaved Aerated Concrete Brick in the period 2012-2016” is chosen.
PHALAMI evaluates and decides AAC brick will be their strategic product during 2012-2016. The company will focus on developing this product and agreed that its success in market will be the company’s success. Therefore, we choose “Business strategy of PHALAMI” as our title for this presentation, which once again highlight the important role of the AAC brick in PHALAMI’s business strategy during this period. The research objective 1.
Identifying the growth rate of the market demand and the capacity to meet this demand. Based on the survey results, statistical methods and building matrixes will be employed to establish the detailed business strategy for Phalami JSC in the period 2012-2016. The achievements, limitations in the process of establishing and implementing annual business and production plan will be also evaluated on the basis of these results. Then, by combining the actual data and theoretical framework of human resource management, production and operation management, marketing, and finance, several solutions to implement the strategy of the Company effectively and feasibly are shown.
Identifying the determinants of market demand for concrete block. Based on the analysis of the factors which have direct and indirect impacts on the market of this product, difficulties and challenges faced by the company, the strengths and weaknesses of the company, several appropriate business strategies are shown. Identifying a specific business strategy in the period 2011-2016, and some main solutions to implement the strategy successfully are also given. The research methodology The main methods used in this thesis are statistical method; analyzing and evaluating situations on the basis of strategic management theories introduced in the course of GaMBA of Hanoi National University and Griggs University.
The data are collected from Pha Lai JSC - the manufacturer of Concrete Additives. The operation of strategic -6- management in Phalami is briefly reviewed and described. Several criteria will be used to compare and evaluate, and on this basis, a business strategy and some solutions to improve the performance of the company’s strategic management are given. -7- CHAPTER I THEORETICAL FRAMEWORK OF STRATEGIC MANAGEMENT 1.
The definition of strategic management The strategic management has attracted many attentions of the economists as well as the managers. Because the contents of strategic management are broad in both theory and practice, each individual can give different points of view about the definition of strategic management. Of course, each view cannot cover all aspects of the strategic management; however it helps us have a better insight. Several definitions of strategic management are given below.
- Strategic management is a collection of decisions and actions of strategic management, which determines the success of the company in the long run. - Strategic management is a collection of decisions and action methods to plan and implement several strategies to attain the objectives of the organization. - Strategic management is the process of researching the present and future environment, planning about the objectives of the organization; establishing, implementing these decisions and monitoring the implementation of these decisions in the present and future environment. - Strategic management is the art and science of establishing and evaluating the comprehensive decisions in order to help each organization attain its objectives.
Following this definition, strategic management puts more focus on the strategy of coordination of many aspects such as governance, marketing, finance/accounting, production/operation, research and development of information system to bring about the success of the company. The significance of strategic management In the context of ever-changing business environment on current time, only one thing that firms can assure is the change. The strategic management is one way to help organizations get over difficulties in the business environment, achieving success by -8- their own efforts and capacities. This is the result of researches on the basis of business performance of many firms.
This is a product of management science. If the process of governance is established well in organizations, the managers can have a better fulcrum to move forward. However, the success also depends on the capacity of implementation, which will be discussed in the application of strategy. The view of strategic management is that firms will continuously monitor events occurring inside and outside of the firms as well as trends to make an adjustment timely.
Bothe the amount and level of change which have large impacts on the firms has been increasing so rapidly recently. In order to survive, all organizations must have a good ability to change and adapt to the new environment. The process of strategic management is established to help the firms concentrate on the ability to adapt to changes in long run. The strategic management helps one organization be more active rather than passive in designing and clarifying its future.
It allows that organization to go forward firstly and put impacts on the surrounding environment rather than weakly responding to these changes. More and more organizations put focus on the process of strategic management and perceive the importance and necessity of the involvement of lower levels of management as well as workers. The personnel plan established from the top has been replaced with the personnel plan of division managers. The performance now is not restricted by the will of the board of governance.
Thanks to contribution into this process, managers at all levels in the company have become the real designers of this process. The co-ownership of this strategy is the key to success. The process of strategic management The main contents of strategic management can be classified into three stages: planning strategy, implementing strategy, and evaluating strategy. - The stage of planning strategy: Identifying the statement concerned with the long term objectives, evaluating external environment factors, establishing strategic alternatives, and selecting the most appropriate project.
-9- - The stage of implementing strategy: Identifying the short term objectives, allocating resources and organizing implementation. - The stage of evaluating strategy: checking, evaluating, and modifying the strategy. The diagram of three stages of strategic management is as follows. Planning Strategy → Implementing Strategy → Evaluating Strategy 1.
Planning strategy As mentioned above, planning strategy is to show works must be done in the firm, major factors both inside and outside of the firm, and long term objectives. One the side of the firm, the research must clear the strengths and weaknesses of the company in each function. Implementing strategy The process of strategic management is not only limited at establishing the strategy but also how to implement strategy, i. the specific works must be done to materialize this strategy.
Implementing strategy is normally called as the process of actions in strategic management, to turn the strategy from a declaration into specific actions. This is considered as the toughest period in the process of strategic management. It not only requires the sensitivity, decisive character but also the sacrifice. One well planned and designed strategy, but if not implemented, is valueless.
Evaluating strategy The final stage of strategic management is to evaluate strategy. Because of ever- changing in conditions of environment both inside and outside of the firms, then all strategies can be varied in the future. There are three major works in strategy evaluation: (1) reconsidering the environmental factors both inside and outside of the firms, which are employed to be the basis for planning current strategy, (2) evaluating the level of implementation, and (3) undertaking some necessary adjustments. Strategy evaluation is very necessary due to the variations of environment in which the firms operate.
The factors influencing strategy construction - 10 - 1. Analysis and evaluation of external environment 1. Analysis and evaluation of international environment The international business environment is also called the global environment. The purpose of this evaluation is to clearly and correctly identify the opportunities and threats that each factor creating the environment has impacts on the strategic operation of each firm.