CAPSTONE PROJECT REPORT “BUILDING AND SELECTING BUSINESS CORPORATION STRATEGY FOR SON HA INTERNATIONAL JOINT STOCKS COMPANY TILL 2020” 1. NHU VAN HOAN 2. DINH THI THUY 3. NGUYEN DUC DUONG 4.
PHAN THANH NGỌC 5. VƯƠNG QUOC THANG Class: X0610 HA NOI, 2011 1 TABLE OF CONTENTS LIST OF ABBREVIATED WORDS LIST OF TABLES – FIGURES INTRODUCTION CHAPTER 1: GENERAL BASES OF ARGUMENT ABOUT BUSINESS STRATEGY FORMULATION 1.1 Theories about strategy and strategic management.2 Strategy formulation process.3 Strategic management and strategic management process.2 Business Strategic planning tools.1 Period for information collection and systematization.2 Period for combinationError! Bookmark not defined.Error! Bookmark not defined.3 Decisive period – GREAT model.22914 CHAPTER 2: CURRENT SITUATION OF BUSINESS ENVIRONMENT OF SONHA INTERNATIONAL JOINT STOCKS COMPANY 2.1 Overview of Sonha International Joint Stocks Company.2 Analysis of environmental factors.1 Analysis of external environment factor.2 Analysis of internal factors of Sonha International Joint Stocks Company 25938 CHAPTER 3: BUSINESS STRATEGY OF SONHA INTERNATIONAL JOINT STOCKS COMPANY TILL 2020 AND SOLUTIONS FOR IMPLEMENTATION 3.1 Business target of Sonha International Joint Stocks Company till 2020.1 The Company’s vision.3 Analysis of SWOT matrix.2 Selecting the best strategy for Son Ha:.3 Solutions to strategy implementation.1 Solution to human resource development.2 Solution to Marketing plan.3 Improve the effecciency of the management information systems.4 Improve the enterprise culture.5 Improve financial management capacity.28057 3 LIST OF ABBREVIATED WORDS Son Ha: Son Ha International Corporation The Company: Son Ha International Corporation GREAT: Gains – Risks – Expenses – Achievability – Timing PEST : Politics, Economy, Society, Technology SWOT: Strength, Weakness, Opportunity, Threat GDP: Gross Domestic Products LIST OF TABLES – FIGURES TABLE 1.1 SWOT MATRIX MODEL.ERROR: REFERENCE SOURCE NOT FOUND FIGURE 2.1 THE VIETNAMESE ECONOMY IN KEY FIGURES. PORTER’S 5-FORCE COMPETITIVE MODEL.ERROR: REFERENCE SOURCE NOT FOUND FIGURE 2.4/ EVALUATION OF OPPORTUNITIES FOR SON HA.5/ EVALUATING IMPACT OF THREATS TO SON HA.6/ SUMMING UP OPPORTUNITIES AND THREATS FOR SON HA COMPANY.7/ BALANCE SHEET OF SON HA (2007 – 2010).ERROR: REFERENCE SOURCE NOT FOUND FIGURE 2.8/ SUMMING UP STRENGTHS AND WEAKNESSES OF SON HA .1/ OVERALL SWOT MATRIX FOR SON HA COMPANY:.2/ GREAT MODEL FOR CHOOSING THE OPTIMUM SSTRATEGY FOR SON HA. The necessity and meaningreasons for of building up development strategy for Son Ha International Corporation during the period of 2011 - 2020: 2.
During recent time, the world economy has experienced great changes, especially the financial crisis in the US has affected almost all the nations in the world including Vietnam. After this economic crisis, we now can look back to find out the internal shortcomings and weaknesses of our economy. At present, the Vietnamese economy in particular and the world economy in general tend to start recovering and developing. It is important that each economic organization must find out a suitable direction for its own to enable the stable development in the future.
From establishment, Son Ha has never written a businesscorporation strategy for long term business plan, just only annual business plan. Almost twelve year passed, many things have been changed a lot, and today the company has been many times bigger than it at beginning of period. Any change of internal and external environment will affect to the company business. However, due to not having a unique strategy, the Company has faced a lot of difficulties and challenges such as high cost, but low productivity.
Selling expenses and administrative overheads continue to increase yearly (from approximately 29.3billion VND and 25.8 billion VND to 69.5 billion VND and 26.7 billion, respectively in 2011), that effect to the Company’s profit. Besides, Son Ha usually invest too widely, in any area that may not related to their current business activities. As a result, the corporation’s business result was sometime not good, the total benefit declined. To have the sustainable development, it is necessary for the 1 company to have a business strategy, not only for coming year, but also for coming 9- 10years The purpose of business strategy is to set up targets for company in specific time and to choose general direction and to build detail plan for company and its department to achieve the targets.
Purpose and scope of research: Researching the basis for setting up development strategy, strategy process and the way to select the optimum strategy in order to help Son Ha identify a suitable strategy of production and business in the current business circumstance. From there, Son Ha can take on proper actions for expanding, reducing business cost, using capital effectively, having profit as well as enhancing the competitiveness for the enterprise. From the above-mentioned research, putting forth proposals for solutions to improve the process of building up Son Ha’s strategy in the current business circumstance. Scope of research: This capstone project focuses into analyzing the strengths and weaknesses of Son Ha’s current strategy.
From that basis, building up and selecting corporate business strategy for Son Ha during the period of 2011-2020. Implementation method: Qualitative method: Applying theories of business strategy, bringing the models of corporate business strategy setting up and selecting into the practical situation of Son Ha. Research methodology: Statistics, survey, analysis, comparison, synthetizing data. Data: Primary and secondary.
Data collecting method: Depending on data publicized on mass media and Son Ha’s capability portfolio. Structure of capstone project: The capstone project consists of forewords and 3 chapters. The main content of each chapter is presented as follow: CHAPTER 1: THEORETICAL BACKGROUND ON STRATEGIC MANAGEMENT THEORIC FUNDAMENTALS CHAPTER II: ANALYSIS OF CURRENT SITUATION OF THE SON HA CORPORATIONINTERNATIONAL JOINT STOCK COMPANY. CHAPTER III: SOLUTIONS, PETITIONS AND CONCLUSION LIST OF REFERENCE DOCUMENT 3 CHAPTER 1: THEORETICAL BACKGROUND ON STRATEGIC MANAGEMENT GENERAL BASES OF ARGUMENT ABOUT BUSINESS STRATEGY FORMULATION 1.1 Theories about strategy and strategic management 1.1 Strategic definition There are some definitions of strategy.
According to David (Exploring Corporate Strategy) strategy is definedas “a coordinated series of actions which involve the deployment of resources to which one has access for the achievement of a given purpose.” According to Johnson and Scholes (Exploring Corporate Strategy) define strategy as follows: "Strategy is the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations". Other definition considers Strategy as an action that managers take to attain one or more of the organization’s goals. Or Strategy can also be defined as “A general direction set for the company and its various components to achieve a desired state in the future. Strategy results from the detailed strategic planning process”.
In general, strategy is about: Where is the business trying to get to in the long-term (direction) Which markets should a business compete in and what kind of activities are involved in such markets? (markets; scope) 4 How can the business perform better than the competition in those markets? (advantage) ? How can the business perform better than the competition in those markets? (advantage) ? What resources (skills, assets, finance, relationships, technical competence, facilities) are required in order to be able to compete? (resources) ? What external, environmental factors affect the businesses' ability to compete? (environment)? What are the values and expectations of those who have power in and around the business? (stakeholders) 1.2 Levels of Strategy at Different Levels of a Business Strategies exist at several levels in any organization - ranging from the overall business (or group of businesses) through to individuals working in it. Corporate Strategy - is concerned with the overall purpose and scope of the business to meet stakeholder expectations. This is a crucial level since it is heavily influenced by investors in the business and acts to guide strategic decision-making throughout the business. Corporate strategy is often stated explicitly in a "mission statement".
Business Unit Strategy - is concerned more with how a business competes successfully in a particular market. It concerns strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc. 5 Operational Function Strategy - is concerned with how each part of the business is organised to deliver the corporate and business-unit level strategic direction. Operational strategy therefore focuses on issues of resources, processes, people etc.2 Strategy content formulation process Vision Statement to open a mission for the plan and strategy is the foundation for a vision of the company.
Statement of mission or may be a motivating employees when transmit the purpose and value of the company to customers and communities. A statement of vision is a report about a company where you hope to achieve. Universal Declaration vision needed for strategic planning because it outlines the future of your company as you achieve goals and your goals. The statement of vision may be different between different lengths, can be a short, can be a paragraph long, but must identify the final destination of you.
Vision of your company is an important statement to guide the process of planning strategies. A statement of vision will determine the best results for the current initiatives and your potential. Mission: Mission is to answer the question why? Mission will be the business and will lose the business no longer exists or switch to a business other. Statement of mission is a documentation purposes informing the existence of a company.
A mission statement identifies the values and rules governed by the company and is a dominant part in the planning strategy. The mission may be different in length, 6 can be from 1 to 1 of questions and should talk about business, purpose and values. Mission of the company which is why the company exists on the market, who you are and you will bring to customers and communities in these types of products and services do. Decisions in the process of planning and strategy of the dominant company must always harmonious with the statement of mission.
Strategy formulation refers to the process of choosing the most appropriate course of action for the realization of organizational goals and objectives and thereby achieving the organizational vision. The process of strategy formulation basically involves six main steps. Though these steps do not follow a rigid chronological order, however they are very rational and can be easily followed in this order. Setting Organizations’ Strategy objectives: The key component of any strategy statement is to set the long-term objectives of the organization.
It is known that strategy is generally a medium for realization of organizational objectives. Objectives stress the state of being there whereas Strategy stresses upon the process of reaching there. Strategy includes both the fixation of objectives as well the medium to be used to realize those objectives. Thus, strategy is a wider term which believes in the manner of deployment of resources so as to achieve the objectives Policies.
Policies are the means by which anuual objecties will be achieved. Policies includes guidelines, rules, and procedure to support effort to achieve objecties Organization Structure The firm’s formal reporting relationships, procedures, controls, and authority and decision-making processes 7 The work to be done and how to do it, given the firm’s strategy or strategies It is critical to match organizational structure to the firm’s strategy. Action plan The plan of action in implementing strategies selected Evaluating the Organizational Environment - The next step is to evaluate the general economic and industrial environment in which the organization operates. This includes a review of the organizations competitive position.
It is essential to conduct a qualitative and quantitative review of an organizations existing product line. The purpose of such a review is to make sure that the factors important for competitive success in the market can be discovered so that the management can identify their own strengths and weaknesses as well as their competitors’ strengths and weaknesses. After identifying its strengths and weaknesses, an organization must keep a track of competitors’ moves and actions so as to discover probable opportunities of threats to its market or supply sources.