CAPSTONE PROJECT REPORT DEVELOPING BUSINESS STRATEGY FOR VIETNAM TRADE UNION HOTEL IN HANOI FOR THE PERIOD FROM 2011 – 2020 GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT DEVELOPING BUSINESS STRATEGY FOR VIETNAM TRADE UNION HOTEL IN HANOI FOR THE PERIOD FROM 2011 – 2020 Group Number: 4 Student’s name: Dinh Gia Dung Nguyen Quang Thien Nguyen Hoang Long Nguyen Thi Anh Thu Nguyen Thi Dung HANOI 2011 Capstone Project Report Group 4 - Class: GaMBA01.M0809 ACKNOWLEDGEMENT The authors would like to gratefully acknowledge the numerous individuals, tourism companies, hotels that have contributed in one way or another, to help the authors conduct this Capstone Project. First of all, the authors would like to express sincere thanks to all faculty members of the Global Advanced Master of Business Administration Program at the Griggs University where the authors, over 18 months, have studied and accumulated valuable knowledge and expertise. Especially, the author would like to express the deep gratitude to Professor, Doctor Ngo Kim Thanh for her enthusiastic guidance and encouragement that inspired the authors a lot during the process of writing this project. The authors’ special acknowledgment is due to the managers and staffs of the following organizations, companies and hotels whose various contributions helped make this project possible: Vietnam Trade Union hotel in Hanoi, Hanoi Administration of Culture - Sport and Tourism, Institute for Tourism Research Development.
Finally, the authors’ thanks go to the friends, colleagues, and family members who encouraged and helped the authors during the writing time. Capstone Project Report Group 4 - Class: GaMBA01.M0809 TABLE OF CONTENT INTRODUCTION 1. Rationale of the study. Research scope and limitation.
Structure of the thesis.03 CONTENT CHAPTER I:BASIC THEORY ON BUSINESS STRATEGY. Types of strategies. Michael Porter’s Generic Strategies. Strategy building process.
Setting business mission. Key external Forces. The process of performing external assessment. Keys internal forces.
The process of performing internal assessment. Strategy Analysis and Choice. The input stage. The matching stage.11 Capstone Project Report Group 4 - Class: GaMBA01.
The decision stage. Tools to build business strategies. Collecting and systemize information. Competitive profile matrix.
The Internal-External (IE) Matrix. Characteristics of Hotel industry.18 CHAPTER II: ANALYSIS AND EVALUATION OF BUSINESS NVIRONMENT AND ACTIVITIES OF VIETNAM TRADE UNION HOTEL IN HANOI 2. Introduction about Vietnam Trade Union hotel. The foundation and development.
Facilities and services. Hotel organization chart:. Vietnam Trade Union Hotel External Assessment. Socio-cultural Environment.37 Capstone Project Report Group 4 - Class: GaMBA01.
Potential Entry of new competitors. Potential development of Substitute products. Evaluation of Opportunities and Threats. EFE Matrix for Vietnam Trade Union Hotel in Hanoi.
Vietnam Trade Union Hotel Internal Assessment. Financial and accounting. Research and Development. Information Technology and Information System.
Evaluation of Strengths and Weaknesses. Developing SWOT matrix for Vietnam Trade Union Hotel in Hanoi. Developing IE Matrix for Vietnam Trade Union Hotel in Hanoi.52 CHAPTER III: BUSINESS STRATEGIES FOR VIETNAM TRADE UNION HOTEL IN HANOI FOR THE PERIOD FROM 2011 – 2020 3. Analysis of possibly feasible strategies.
QSPM Matrix analysis. Strategies for Vietnam Trade Union Hotel from 2011 – 2020. Solutions for applying strategies. Turning the hotel into a green hotel.58 Capstone Project Report Group 4 - Class: GaMBA01.
Building Positioning statement. Distribution and Yield Management. Developing Human resources. Setup job description and performance standard.
Calculating number of employees for the hotel. Establishing source of labor. Restructure the organization. Timeline for implementing solutions.
Provision for unexpected situations:.75 Capstone Project Report Group 4 - Class: GaMBA01.M0809 LIST OF TABLES, CHARTS AND FIGURES Table 1. Example of a blank EEF Matrix. Example of a blank IEF Matrix. Example of a blank CPM Matrix.
Example of a blank QSPM Matrix. Vietnam Trade Union Hotel in Hanoi Room Tariff. Vietnam Trade Union Company Business results from 2006 to 2010. Vietnam Trade Union Hotel in Hanoi Business results from 2006 - 2010.
Hotel market in Hanoi in 2010. The development of tourists to Hanoi from 2005 – 2010. EFE Matrix for Vietnam Trade Union Hotel in Hanoi. The increase in Revenue and Income before tax of Vietnam Trade Union Hotel in Hanoi.
IFE Matrix for Vietnam Trade Union Hotel in Hanoi. QSPM Matrix for Vietnam Trade Union Hotel in Hanoi. Timeline for solutions. Organization chart of Vietnam Trade Union Company .2 Organization chart of Vietnam Trade Union Hotel in Hanoi.
The increase of tourists to Hanoi from 2005 - 2010. Example of a blank IE Matrix. SWOT Matrix for Vietnam Trade Union Hotel in Hanoi. IE Matrix for Vietnam Trade Union Hotel in Hanoi .52 Capstone Project Report Group 4 - Class: GaMBA01.
Rationale of the study Tourism is an economic, environmental and social force of global proportions. Developing a strong and sustainable tourism industry has become a priority of great importance of many countries. In Vietnam tourism has been recognized as a leading industry providing a huge source of income and job creation for the country. Along with the development of tourism industry in Vietnam, tourism in Hanoi has also been developing very fast creating huge demand for hotels and hotel rooms.
However, this fast development is very tempting to new entry to this industry and thus can create very fierce competitions. In addition, the fluctuation of tourism and hotel industry can create problems for development of hotels. For that reasons each hotel needs clear strategies for development. The hotel is also the main financial and revenue source as well as the head quarter of Vietnam Trade Union Company.
The health and development of the hotel will greatly affects the health and development of the company and thus a good strategy for the hotel is vital. Vietnam Trade Union Hotel in Hanoi is working with positive business results and having great potential for development. However, the period form 2011 to 2020 is posing a lot of changes and challenges for tourism industry in Vietnam in general and in Hanoi in particular while the hotel has not a specific strategy for the new period. To prepare for this, the hotel should have matching strategies.
For all these reasons, it is urgent that there is a study to develop business strategies for Vietnam Trade Union Hotel for the period from 2011 to 2020. Research objectives This research project aims to achieve the following objectives: To provide an overall picture of Vietnam Trade Union Hotel’s business activities with regard to strategy development. 1 Capstone Project Report Group 4 - Class: GaMBA01.M0809 To analyze and evaluate the internal and external factors affecting Vietnam Trade Union Hotel To identify possibly feasible strategies for the hotel for the period from 2011 - 2020. To propose some solutions for applying strategies for the hotel.
Research methodology The method of studying is using internal and external audits along with EFE and IFE matrixes with the 5-force model. The results of the analysis of the matrixes and the model will then be matched with SWOT and IE matrixes to identify possible strategies to apply. The QSPM matrix is then used to identify the suitable strategies to apply. When the strategies are identified, a set of solutions to realize strategies are proposed.
In terms of data collection and analysis, in this project qualitative research method was used intensively. The data were collected from secondary and primary sources. Qualitative method will be applied to analyze and evaluation about business activities and strategies at Vietnam Trade Union Hotel along with other internal and external factors. The following sections present in details the methods to gather and to analyze the data sources used in this project.
Secondary data sources For theory framework, textbooks on Tourism, Hotel Management, Strategy Management and Hotel Marketing are selected as sources of reference. For external evaluation, reports, articles and other data will be collected from VNAT, ITDR, Hanoi Administration of tourism, Vietnam Trade Union Hotel and other sources. The data from secondary sources provide information regarding to an overall picture of tourism in Vietnam and Hanoi; the demand for and supply of hotel room; the business results of Vietnam Trade Union Hotel. 2 Capstone Project Report Group 4 - Class: GaMBA01.M0809 Primary data sources Primary data source were collected using qualitative method as follow: In-depth interviews will be conducted with General Manager of the hotel and other heads of department Besides interviews, observation will be applied to evaluate the other related fields of business and operation of the hotel 4.
Research scope and limitation The research focuses on the business activities and results in Vietnam Trade Union Hotel and tourism and hotel industry in Hanoi in the period from 2005 to 2010. Other supporting research, data collections are limited to Hanoi area. Structure of the project This project includes 3 main chapters: Chapter 1: Basic theory on business strategy Chapter 2: Analysis and evaluation of Business environment and activities of Vietnam Trade Union Hotel in Hanoi Chapter 3: Business strategies for Vietnam Trade Union Hotel in Hanoi for the period from 2011 – 2020 3 Capstone Project Report Group 4 - Class: GaMBA01.M0809 CHAPTER I: BASIC THEORY ON BUSINESS STRATEGY 1. Concepts In order to develop business strategy it is necessary to have a clear definition on strategy to serve as guidance for study and analysis.
There are several definitions of strategy such as the definition by Chandler “the determination of the basic long- term goals and the objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals. From all the definition it can be seen that strategy aims at identifying how a business or organization reach its goals and objectives. In application, there are 3 levels of strategies. The first one is Corporate Strategy which is concerned with the overall purpose and scope of the business to meet stakeholder expectations.
The second one is Business Unit Strategy with more regard on how a business competes successfully in a particular market. This type of strategy puts more emphasis on choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc. The last one is the Operational Strategy with the concern on organization of each part of a business to deliver the corporate and business-unit level strategic direction. In this study, more emphasis is placed on the strategies at strategic business level than other levels.
However, other types of strategies are also paid attention to as they are very closely related and interacted. 4 Capstone Project Report Group 4 - Class: GaMBA01. Types of strategies It is necessary to have a pool of choices of strategies to see which one or ones could be suitable of a business. For that reason the different types of strategies are briefly described here.
They are integration strategies, intensive strategies, diversification strategies, defensive strategies and lastly Michael Porter’s Generic Strategies. Integration strategies A company can use integration strategies to improve the efficiency and effectiveness of its business activities and to save cost and to be independent from its suppliers or distribution channel or to change its competitors into parts of its operation to increase strength and reduce competition. A company can apply Forward integration by gaining ownership or control over distribution channels. In the opposite way, the company can gain the ownership or control of its suppliers.
This is called Backward integration. The company can also apply Horizontal integration by getting ownership or control over competitors by mergers, acquisitions, and takeovers. These strategies can be applied when it is more profitable to do and the company has enough resources and ability to do. Intensive strategies When a company wants to improve its competitive position with existing products, intensive strategies are to be applied.
Intensive strategies include strategies like market penetration, market development, and product development.