2011 | GLOBAL ADVANCED MBA PROGRAM (X0510) | Group No11 CAPSTONE PROJECT FORMULATION OF BUSINESS STRATEGY FOR MAYHAI JOINT- STOCK COMPANY BUSINESS STRATEGY 2011 - 2015 Group 11 - GaMBA X0510 Nguyen Thi Huong Giang To Thi Giang Nguyen Van Ha Nguyen Hoang Long HANOI 2011 GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CONTENT CHAPTER 1. BASIC THEORIES ABOUT STRATEGIC MANAGEMENT 6 1. Concept and role of strategic management.Fundamental characteristics of business strategy.3 The role of strategic management.4 Strategic managerial hierarchy in the enterprise.1- Level of strategies 8 Figure1. 2 – Strategic Management Process 8 1.2 Strategic management process 8 1.Applying the matrixsmatrixes to analyze 10 Figure 1.2Porter’s Five – Forces Model: Competitive Analysis 11 Figure 1.4 – Michel Porter Five-Forces Model 1.3The Competitive Profile Matrix (CPM) 12 1.4The Internal Factor Evaluation (IFE) Matrix 12 1.5The Boston Consulting Group (BCG) Matrix 12 1.6 The Strengths – Weaknesses – Opportunities – Threats (SWOT) Matrix 12 14 1.7The Quantitative Strategy Planning Matrix (QSPM) CHAPTER 2.ANALYZE THE BUSINESS AND PRODUCTION SITUATION 17 OF MAYHAI JOINT-STOCK COMPANY 2.1 Introduction about Mayhai joint-stock company.1 Fact and history 17 2.3Market and customer 2.5Vision and mission 20 2.2 Business environment analysis.1 External environment analysis 22 2.2Industrial environment 26 Figure 2-1(EFE)External factor evaluation matrix of MAYHAI 30 Figure 2-2 (CPM) Competitive Profile Matrix 30 2.3 MAYHAI internal environment 31 2.4 Research and development 34 Figure 2-3 Internal Factor Evaluation Matrix (IFE matrix) 35 2.4 SWOT matrix of MAYHAI.
37 Figure 2-4 SWOT matrix 38 2.1 Market development strategy 38 2.2 Product development strategy.3 Strategy to diversify MAIHAI’s activities. RECOMMENDATION AND SOLUTION 41 3.1Foundations to build the strategies: 41 3.1Mission and goals 41 3.2Building and selecting the strategies. 42 Figure 3-1 Quantitative Strategy Planning Matrix QSPM 42 3.3 Solutions to implement the strategies.3 Financial and accounting solutions 47 3 1.Foreword Garment and textile industry plays an important role in the development of the national economy aiming at ensuring domestic consumption need and export, extend international trading, bring back source of revenue for the country with the growth rate of 21% compared with the same period last year, making up 15% of the total turnover. Vietnam ranks in top ten of garment and textile export countries in the world.
However, that Vietnam entered more and more deeply into the regional economy and the world economy (Vietnam is now official member of WTO, ACFTA) has many advantages. On the other hand, Vietnam has to face up with great threats and cutthroat competition from other processing countries such as Bangladesh, the Laos, Myanmar, and China. MAYHAI JSC is known as the leading enterprise in garment and textile outward processing industry with over 20 years of experiences; also one of 6% of the enterprises in the whole industry with the number of laborers more than 2000. Together with the speedy changes caused by the globalization trend and the incessant movements of the market, the Company re-structures, and re-builds its business strategies in this new development period.
Within the scale of this Individual Assignment, we focus on studying, analyzing and building “strategies to develop MAYHAI JSC in the period of 2011-2015” on the basis of applying studied knowledge in the Global Advance Master of Business Administrative Program – Griggs University, the US in association with Hanoi National University. Research target Set up MAYHAI JSC’s development strategy in the period of 2011-2015 on the basis of analyzing and applying theoretical foundation about strategic management. The subject and the scope of the study. The topic is analyze the strategic planning operations of MAYHAI JSC in garment and textile processing market in Vietnam and in the world with the target to propose strategic solutions in the coming periods Data have been collected during the past years, mainly in 3 recent years 2008- 2010.
At the same time, this topic also puts forward some forecasts about the development of garment and textile industry in coming time. The topic is based on knowledge withdrawn from the subject Strategic Management and other subjects in Global Advanced Master of Business Administration Program, which helps evaluate the overall business operation process of MAYHAI JSC. Some qualitative and quantitative methods are combined together; for example, general, comparative and statistical analysis methods and economic analysis method. Theoretical basis of strategic management - Chapter II.
Analyze business operations of MAYHAI JSC - Chapter III. Proposed strategy and Solutions solutions 5 6 CHAPTER 1. BASIC THEORIES ABOUT STRATEGIC MANAGEMENT 1. 1 Concept and role of strategic management.
“Without a straterystrategy, an organization is like a ship without a rudder, going around in circles. It’s like a tramp, it has no place to go” So “what is strategy?” and “Why has to manage the strategy”? Benefits of strategic management toward an organization in today’s fluctuant competitive environment and more and more obvious globalization trend. How does strategic management process happen? In addition, what is called “strategic thinking”? 1.1Concept Strategy is a range of complex actions to mobilize the whole human resources that an individual/organization can do for the purpose of obtaining a certain goal. According to the opinion believing that business strategy is an art, Alain Threlart said that “strategy is an art which the enterprise uses to fight against competition and win”.
According to the opinion about managerial category, business strategy is a type of comprehensive and general plan that is designed to ensure the achievements of organization’s objectives. Via above viewpoints, “business strategy is an art of designing and organizing means in order to reach long term objectives of the enterprises, ensuring the adaptation to the change of business environment and competition.Fundamental characteristics of business strategy. Business strategy determines clearly basic goals and business trends of the enterprise in each period to ensure the continual and sustainable development of the enterprise in fluctuant business environment. Business strategy ensures the maximum mobilization and optimal combination of exploiting and using resources of the enterprise at present and in the future, making the most of advantages, and grasping chances to gain priority in 7 competition; business strategy must be reflected during a continual process and built in a long period of time: 3 years, 5 years or 10 years.3 The role of strategic management.
Strategic management helps the enterprises understand clearly their purposes, and directions; from then on, the enterprises take these things as the foundation and the guideline for all business and production activities of the enterprises with the target to grasp and make use of business chances as well as have proactive solutions to overcome risks and threats in the competitive market. Strategic management helps make contribution to increase the efficiency of resources, strengthen competitive position, ensure the sustainable development of the enterprises. Corporate management is the foundation of proposing policies and decisions about business and production that are suitable with the fluctuations of the market.4 Strategic managerial hierarchy in the enterprise. Strategies exist at several levels in any organization - ranging from the overall business (or group of businesses) through to individuals working in it.
In the large firms, there are actually four levels of strategies: corporate, divisional, functional and operational. In the small firms, there are three levels of strategies: company, functional and operational. May be in some firms, there are two levels of strategies: company and functional. Corporate Strategy (Company 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". BusinesBusiness level strategy - is concerned with the overall purpose and scope of the divisional business. 8 Functional 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. It is important to note that all persons responsible for strategies planning at the various levels ideally particupateparticipate and understand the strategies at (Source: Page 170 – Strategic the other organizational Management - Fred.David) levels to help ensure coordination, facilitation and Figure 1.1- Level of strategies commitment.2 Strategic management process 1.1 Stages of strategic management process The strategic management process consists of commitments, decisions, actions that the enterprise needs to obtain strategic competitive advantages, sustainable competitive advantages and return on average. The strategic management process consist of three stages: strategy formulation, strategy implementation and strategy evaluation. It shows by following diagram: 9 Figure1.
2 – Strategic Management Process Strategy formulation includes developing a vision and mission, indentifying an organization’s external opportunities and threats, determining internal strengths and weaknesses, establishing long-term objectives, generating alternative strategies, and choosing particular strategies to pursue. Strategy implementation requires a firm to establish annual objectives, devise, motivate employees, and allocate resources so that formulated strategies can be executed. Strategy implementation includes developing a strategy supportive culture, creating an effective organizational structure, redirecting marketing efforts, preparing budgets, developing and utilizing information systems, and linking employee compensation to organization performance. Strategy evaluation is the final stage in strategic management.
Managers desperately need to know when particular strategies are not working well; strategy evaluation is the primary means for obtaining this information. All strategies are subject to future modification because external and internal factors 10 are constantly changing. Strategy evaluation is needed because success today is no guarantee of success tomorrow.3 Applying the matrixsmatrixes to analyze In this project, we base on the Strategy- Formulation Analytical Framework to choose best strategies. It is showed by below diagram: STAGE 1: THE INPUT STAGE External Factor Internal Factor Evaluation (PEST) Competitive Profile Matrix Evaluation (IFE) Matrix (CPM) Matrix STAGE2: THE MATCHING STAGE StrengthdStren gths - Weaknesses - Opportunities - Threats (SWOT) Strategic Position Action Boston Consulting Matrix Evaluation (SPACE) Matrix Group (BCG) Matrix STAGE3: THE DECISION STAGE QuatitativeQuantitative Strategic Planning Matrix (QSPM) 11 1.1 The Macro Environment–PEST Model The PEST model is decision making model used to measure a market, including competitors from the standpoint of a particular proposition or a business.
When used as a tool, is works well to understand market growth or decline, such as potential and direction for a business. It is a model Figure 1.3 – PEST Model used to measure business, in terms of (P)olitical, (E)conomic, (S)ocial, and (T)echnological factors. Like SWOT, it can be used in matrix format, and are can be used to review direction of a company, it’s strategy or position within it’s market, or a specific proposition or idea. Factors such as Ecological, Legislative, and Industry should be included within the four quadrants, where applicable.2 Porter’s Five – Forces Model: Competitive Analysis According to Porter, the nature of competitiveness in a given industry can be viewed as a composite of five forces: - Rivalry among competing firms.
- Potential entry of new competitors. - Potential development of substitute products. - Bargaining power of suppliers.4 – Michel Porter - Bargaining power of consumers. Five-Forces Model 12 The fllowingfollowing three steps of using Porter’s Five-Forces Model can indicate whether competition in a given industry is such that the firm can make an acceptable profit: - Identify key aspects or elements of each competitive force that impact the firm.
- Evaluate how strong and important each element is for the firm. - Decide whether the collective strength of the elements is worth the firm entering or staying in thsthis industry. The Competitive Profile Matrix (CPM) The CPM identifies a firm’s major competitors and its particular strengths and weakness in relation to a sample firm’s strategic position. The weights and total weighted scores in both a CMP and EFE have the same meaning.
However, the critical success factors in a CPM include both internal and external issues; therefore, the ratings refer to strengths and weaknesses. the critical success factors in a CPM are not grouped into opportunities and threats as they are in an EFE.