VIETNAM NATIONAL UNIVERSITY, HANOI SCHOOL OF BUSINESS NGUYEN DINH DUY BUSINESS STRATEGY FOR GATEXCO 20, PERIOD 2013 - 2018 Major: Business Administration Code: 60 34 05 MASTER OF BUSINESS ADMINISTRATION THESIS Supervisors: Dr. Nguyen Thi Phi Nga Hanoi - 2012 TIEU LUAN MOI download : skknchat@gmail.com ABSTRACT BUSINESS STRATEGY FOR GATEXCO 20, PERIOD 2013 - 2018 Nguyen Dinh Duy MBA candidate, 2008-2010 Viet Nam National University, Ha Noi. School of Business Supervisors: Dr. Nguyen Thi Phi Nga December, 2012, 102 pages The strategies of the company show the future of the company on doing its businesses.
They analyze the industry segment of which the company is operating; determine the target market and customers segment for medium and long term; and the competitive advantages must build up and maintain. The development of business strategies, however, is a complex task that requires a lot of attentions from BOD and the company‟s resources. The research begins with a brief introduction on business strategy management definition and the process of strategic planning. To develop a strategic planning complied with sustainability, the company needs to apply fundamental analysis or namely tool box of strategic planning such as industry segment analysis, value chain analysis, generic business strategies, and network success factors and resources analysis.
To make all theories above to be practical, the author will use the case of GATEXCO20 and assess the current business strategy of the company. The assessment bases on the ii TIEU LUAN MOI download : skknchat@gmail.com results achieved during the interview with managers of GATEXCO20. Then, I will conduct some conclusions and recommendation. The author has been working in GATEXCO20 for more than six years and it is an interesting field that the author loves to work for.
With significant knowledge and experience after the years working as well as the author‟s role in company, the author does believe that this research would also be a valuable fundament for the author‟s career development in the years coming. iii TIEU LUAN MOI download : skknchat@gmail.com TABLE OF CONTENTS ACKNOWLEDGEMENT. iv TABLE OF CONTENTS. vi LIST OF FIGURES.
ix LIST OF TABLE. Background and Rational. Scope and Limitation. 3 CHAPTER 1: FOUNDATION THEORY FOR STRATEGIC MANAGEMENT.
The definition of business strategy. The definition of business strategic planning. The business strategic planning process. Tools used in business strategic planning.
Porter‟s Five Forces Model. 11 vi TIEU LUAN MOI download : skknchat@gmail. Value chain analysis. 13 CHAPTER 2: EXTERNAL AND INTERNAL ANALYSIS.
Summary external analysis. Summary internal analysis. 60 CHAPTER 3: SELECTED STRATEGIES FOR GATEXCO 20 AND INPLEMENTATION PLAN. Choosing functional strategies.
Performing components of strategy implementation. Systems and structure. Activities functional strategy 1 - Product quality management. 82 vii TIEU LUAN MOI download : skknchat@gmail.
Activities functional strategy 2 – Build-up the raw material system. Activities functional strategy 3 – Product diversification. Action plans for five years strategies. Recommendations to GATEXCO20 for strategies implementation.
Recommendations to the Government. 100 viii TIEU LUAN MOI download : skknchat@gmail.com LIST OF FIGURES Figure 1: Business strategic planning process – sample 1. 6 Figure 2: Business strategic planning process - sample 2. 6 Figure 3: Business strategic planning process - sample 3.
7 Figure 4: SWOT Matrix. 8 Figure 5: Porter's Five Forces Model. 9 Figure 6: Value chain analysis model of Porter (1980). 14 Figure 7: Porter‟s five forces model.
32 Figure 8: Value chain analysis model. 43 Figure 9: The process of receiving input materials. 45 Figure 10: The operation process of GATEXCO20. 46 Figure 11: Images of some major products of GATEXCO20.
48 Figure 12: The distribution system of Viet Tien Garments Company and Nha Be Garments Company. 51 Figure 13: Organization structure of GATEXCO20. 54 Figure 14: Five stage of building-up the raw material system. 68 Figure 15: 8 key successful factors for TQM.
69 Figure 16: Seven-S Framework. 76 Figure 17: The business strategy process. 96 ix TIEU LUAN MOI download : skknchat@gmail.2018 LIST OF TABLE Table 1: World internet usage and population statistics 2011. 30 Table 2: Opportunities and Threats to Gatexco20.
39 Table 3: Import and Tariff on Fuels (%). 49 Table 4: GATEXCO20 employees in 2010 and 2011. 55 Table 5: Production capacity in 2011 of some garment and textile companies in the domestic market. 58 Table 6: Strengths and Weaknesses of GATEXCO20.
60 Table 7: SWOT matrix for functional strategies. 64 Table 8: Ranking order of functional strategies. 75 Table 9: Trait models by John Gardner (1989) and Zaccaro (2004). 82 Table 10: Six Sigma system.
84 Table 11: International trade shows. 88 Table 12: Action plans for five years strategies.2018 TIEU LUAN MOI download : skknchat@gmail. Background and Rational Garment and Textile is one of the traditional industries in Vietnam and plays an important role of the economy development and reducing the unemployment rate in poverty area. In recent years, Vietnam‟s economic development has evolved rapidly and has been changing to integrate with regional and world economies and garment and textile industry is determined as one of the focused industry of Vietnamese Government that helps the country to reduce the trade deficits.
The evidence for the important of garment and textile can be found lot of public resources (i. newspaper, television, talk-show, etc) of which these resources stated that garment and textile industry has contributed a lot in the total GDP as well as creating more jobs in the economy. However, the author identifies that the garment and textile industry is facing many challenges from both of internal and external environment. The internal problem is rising due to the low skills of major labors and low technology applied in manufacturing while the external problem is coming from the rush competition with strong competitors such as China, India, Indonesia, Pakistan, Korea.
Furthermore, most of the enterprises operating in garment and textile industry do not take into account the business strategic planning and view it as one of the vital part on the continuous development. The fact is that every enterprise needs to apply business strategy that is help to respond quickly to changes in the market. In each period, the company can adopt one or many strategies which are based on analyzing and predicting the company‟s strength or weakness and the market‟s opportunities or threats. The business strategy is 1 (LUAN.2018 TIEU LUAN MOI download : skknchat@gmail.2018 built on the basis of analyzing and predicting the opportunities, risks, strengths and weaknesses of enterprises that help the enterprise obtaining the general information on external business environment as well as internal resources of the enterprise.
Based on the mentioned problems, they plan the strategic objectives, select the best strategy and formulate policies to achieve those objectives and simultaneously inspect and adjust the strategy to face with the change of business environment. The business strategy helps enterprises not to fall into a defensive situation, but to always stand on the offensive side to be ready to face all changes of the business environment. GATEXCO20 is not the exceptional case in terms of issues related to the business strategic planning. Currently, GATEXCO20‟s business strategy is limited to the short term planning without a long term vision.
The company sometimes deals passively with the change in the market and adjusts planning. Therefore, the need to plan and implement long-term business strategy is very important and urgent for the survival and development of the company. Therefore, in the respect of the important role of business strategic planning for the orientation development of Vietnam‟s garment and textile industry and the long-term development of GATEXCO20, the author decides to choose “Business Strategy for GATEXCO20, period 2013 - 2018” as the name of the research. By driving concentration to the macro-economic factors and the tools of business strategy formulation, the research will help the top managers of GATEXCO20 to understand and to adopt comprehensive long term business strategies to ensure the sustainability in development.
Objectives The objectives of the research are stated as follows: 2 (LUAN.2018 TIEU LUAN MOI download : skknchat@gmail.2018 Provide the analyses on the production and business operation of GATEXCO20 and the potential of Vietnam garment and textile industry Find out the advantages, weaknesses, opportunities and threats which will be used to formulate a development strategy for GATEXCO20 Assess the garment and textile market by collecting the Expert Advises from The Ministry of Trade and Vietnam Textile Association Provide the formulation and solution for business strategies for GATEXCO20 as well as program of action and contingency plans C. Scope and Limitation This research examines the activities of GATEXCO20 from the business strategic planning perspective. The research uses the secondary data which come from the annual reports of GATEXCO20 as well as collecting from books, journal and news together with the expert advices from Ministry of Industry & Trade and Vietnam Textile Association in the internet in terms of the garment and textile industry which are cited in the reference section. The limitations of the research are the study just concentrates on GATEXCO20‟s business.
Other limitation relates to data gathering. A lot of the information was from GATEXCO20‟s sources and data. Moreover, the study given might not represent the general thinking of company and there are some language barriers for the author. The strategy for GATEXCO 20 is built for the period 2013-2018 and if the implementation process will be success, this strategy will be extended for the long term.2018 TIEU LUAN MOI download : skknchat@gmail.2018 CHAPTER 1: FOUNDATION THEORY FOR STRATEGIC MANAGEMENT 1.
The definition of business strategy Rumelt (1980) defined business strategy as the combination of goals, objectives, missions and action plans in order to help the firm to run its businesses successfully. Quinn (1998) defined business strategy as the plan in order to integrate all business activities and to align them with the goals, objectives of development of firm. Mathur and Kenyon (1997) identified that when firm provides its products and services in multiple, it will have a number of different business strategy, so each business strategy has the different scope of work and application. Favaro (2012), in addition, defined business strategy as a result of selection in order to maximize firm‟s values for long term.
However, Favaro (2012) advised firm management should takes into account the value in short term as well as risk factors existed in the market. The definition of business strategic planning Strategic Planning Handbook (2001) stated that strategic planning Is described as a road map which is designed to help firm reaching to expectations. Tapinos (2005) defined business strategic planning is the combination of importance steps that helps firm to formulate business strategies. When performing business strategic planning, Tapinos suggested that firm should takes into consideration of four factors: long horizon, utilization of planning tools, formality, and frequent monitoring the planning process.
Hodgetts and Kuratko (2001) addressed the importance of business strategic planning as it can reduce significantly the uncertainty or the failure of a business strategy. Gibb and Scoot (1985), business strategic planning also helps to increase the perception and awareness of the importance of business 4 (LUAN.2018 TIEU LUAN MOI download : skknchat@gmail.2018 strategy in the executive managers‟ mind as well as in the employees. However, business strategic planning also has a lot of risks. First, the road map may not bring the right expectation to firm as the result of the changes in the market and customers behaviors.
Second, the success of business strategic planning is depended on the planning process. If the planning process is weak (e. lack of control and monitor), the achieved results may not satisfactory to firm‟s executive managers. (Strategic Planning Handbook, 2001) Additionally, Evans identified that the business strategic planning just focuses on the most significant issues and does not take into account all critical issues of firm.