GLOBAL ADVANCED MASTER OF INTERNATIONAL BUSINESS ADMINISTRATION CAPSTONE PROJECT REPORT BUILDING DEVELOPMENT STRATEGY FOR COTTO BRICK OF VIGLACERA TIEN SON 1 ACKNOWLEDGEMENT First and foremost, Group 12 would like to convey our most sincere thanks to the management, professors, and lecturers of the Employment system and Training technique Center (ETC) of the Hanoi National University and the Griggs University of the USA for creating the most favorable conditions for students during the learning process and especially the completion of this research. We are also grateful for enthusiastic support and provision of necessary data to our research by the management of Viglacera Tien Son company in general and its departments in particular. Though the group have endeavored endless effort to complete the research on schedule with the most sufficient content, it may still contain mistakes. We, therefore, would highly appreciate any recommendations and advice from lectures so that the research can contribute better to reality.
2 TABLE OF CONTENTS INTRODUCTION. Purposes of the research. The purpose of research. Scope and Methodology of research.
Structure of the report.10 LITERATURE REVIEW OF STRATEGY AND STRATEGIC MANAGEMENT. Overview of strategy and strategic management. Definition of strategic management. Role of strategic management.
Levels of strategic management. Content of strategic management. The enterprise’s vision and mission determination. External environment analysis.
External Factor Evaluation (EFE). Internal environment analysis. Evaluation of functional departments. Internal Factor Evaluation (IFE).
Strategy formulation process. Selection of strategic plans. Strategy evaluation and control.34 CURRENT STATUS OF BUSINESS OPERATION AND SALES OF COTTO BRICK. Overview of Viglacera Tien Son Join Stock Company.
History and development of Viglacera Tien Son JSC. Organization structure of the company. Business performance of Viglacera Tien Son JSC. Introduction of cotto brick and its investment process.1 Introduction of cotto brick and manufacturing technology.
Differentiation of cotto brick in comparison with other materials. Investment process of cotto brick production in Viglacera Tien Son. Analysis on business environment of cotto product of Viglacera Tien Son JSC. Mission and Development trend of the company.
Analysis of factors affecting on operations of Viglacera Tien Son. External factors evaluation (EFE) matrix. Analysis on real business performance. Internal factor evaluation (IFE) matrix.
Overview of current strengths, weaknesses, opportunities and challenges of Viglacera in production of cotto brick.69 SOLUTION TO BUILDING OF DEVELOPMENT STRATEGY FOR COTTO BRICK OF VIGLACERA TIEN SON IN THE 2010 – 2015 PERIOD. Developing objectives of Viglacera Tien Son JSC 69 3. Misison and vision confirm of the company. Using SWOT Matrix to making strategy of Viglacera Tien Son JSC.
Choosing developing strategy. Solutions to build development strategy for Viglacera Tien Son JSC in the period 2010 – 2015. 80 4 LIST OF FIGURE Figure 1.1 Five-force model of M.1: Organization structure of Viglacera Tien Son:………………. GDP growth of Vietnam over years:………………………….43 LIST OF CHART Chart 2.
Turnover of Viglacera Ten Son Joint Stock Company (2009):……. The real situation of supply and demand:…………………….3: The selling price of Viglacera Tien Son:………………………. Market shares of Viglacera Ten Son JSC (2009):………………….: The direct production cost:…………………………………….7: The rate of returns product quality:…………………………….57 5 LIST OF TABLES Table 1: SWOT Matrix:……………………………………. The real of business operation:……………………….The financial real of Viglacera Tien Son JSC:……………….
Physic-mechanical features of cotto brick in comparison with other products in the sector:……………………………………………………………. The local consumption of tiling products:………………. SWOT analysis of competitors:…………………………. Five-force analysis model:………………………………….
EFE of Viglacera Tien Son JSC :…………………………. The result of production:…………………………………. The selling price of Viglacera Tien Son and competitors:…………. The selling price of cotto brick of Viglacera Tien Son:………….
IFE matrix of Viglacera Tien Son JSC :……………………….1 SWOT analysis of cotto brick of Viglacera Tien Son:………….70 6 ABBREVIATIONS ASEAN: Association of Southeast Asia Nations CICA: Ceramic Industry Club of Asean Dept: Department EFE: External Factor Evaluation GDP: Gross domestic product HR: Human resources IFE: Internal Factor Evaluation JSC: Joint stock company MIS: Management information system SWOT: Strengths, weaknesses, opportunity, threats WTO: World trade organization 7 INTRODUCTION I. The reason of the research The Viglacera Tien Son is a member of the Viglacera Corporation and one of the leading calcined clay brick and tile manufacturers in Vietnam. Owning concessions for the clay resources in Que Vo – Tien Du, a contingent of dynamic and experienced staff, and advanced technology, the company is providing the market with high quality products. More than that, it has achieved good business performance in recent years and experienced a high growth rate and significant proportion of turnover and profit.
The company’s products are different from those of other manufacturers in the sector. Among its products, the tile (or cotto) is new and has prominent features such as flatness, equal color and high physic-mechanical level. The company considers cotto as its key product which brings high economical benefits and competitiveness. However, as Cotto brick of Tien Son has just penetrated the market for three years, the demand for this product is still less than manufacturing capacity.
Therefore, it is essential to build a business strategy for cotto brick in order to increase sales to meet the plant’s manufacturing capacity as well as to promote Viglacera Tien Son’s cotto product in the market place. The position and operation of the company thus will also be enhanced. The purpose of research The project focuses on the following issues: - Basic theories on strategy and strategic management; - Useful analysis models for the formation and selection of strategies; - The real situation in implementing strategy of cotto brick business operation in Viglacera Tien Son Joint stock company - Analyze factors of the external and internal environment which affect on the Company’s strategy 8 - Appropriate solutions to build the development strategy for the cotto brick of Viglacera Tien Son. Scope and Methodology of research This research only studies cotto brick product of the Viglacera Tien Son Joint stock company.
Research methodology: The research uses two main forms data, include secondary and primary date for analyses. Secondary data were collected from Viglacera Tien Son Joint stock company and from the Vietnam Association of Pottery and Porcelain. - In theory: The research uses standard theory on strategic management such as marketing management by Philip Kotler for this specific product of the company. - In reality: To serve as a foundation for business development and competitiveness enhancement of cotto brick of Viglacera Tien Son Joint stock company.
Structure of the report Chapter 1: Literature review of strategy and strategic management Chapter 2: Current status of business operation and sales of cotto brick of Viglacera Tien Son Joint stock Company Chapter 3: Solutions to building of development strategy for cotto brick of Viglacera Tien Son JSC in the 2010 – 2015 period Conclusion 9 CHAPTER I LITERATURE REVIEW OF STRATEGY AND STRATEGIC MANAGEMENT 1. Overview of strategy and strategic management 1. Definition In order to exist and grow, an enterprise has to take care of not only short-term operation plan but also long-term issues such as taking advantage of opportunities, minimizing negative external impacts, promoting strengths and fixing weaknesses of the company. Those long-term thoughts are called strategic thoughts, which is a plan and policy to guide the enterprise in achieving targeted business goals.
Business strategy is an art of creating competitiveness to gain advantage over other enterprises. It can be said that, strategy provides a vision for development process and the consistence for implement solutions. Strategy also can be basics for overview developing plan in long term and short term or can be general awareness of related people about prospects and willingness and challenges in a specific period” There are many definition of “strategy”. David (2003), strategy includes numbers of method to reach long term target.
Porter (1996), strategy is the creation of special and valuable positions include variable activities. In the market economy, each enterprise sets a number of targets in order to realize missions and affirm its position in the market place. Though strategies are sometimes interpreted differently, they in general include basic objectives as follows: To identify short and long-term objectives of the enterprise. To present and to select options.
10 To implement and allocate resources in order to achieve those objectives. So as to accomplish the above three objectives, the enterprise needs to build and implement their business strategies in an appropriate way. An enterprise’s strategy is divided into three levels, including corporate strategy, business strategy and functional strategy. Basic features of business strategy: Business strategy specifies objectives and development trend of the enterprise in a long-term period, from 5 to 10 years.
Business strategy only drafts long-term guiding trends; in reality, the enterprise has to combine strategic objectives with goals for each actual situation. Every important decision during the process of building, deciding, implementing, checking, assessing and revising strategies must focus on the top manager of the enterprise. Business strategy is always set up, selected and implemented based on comparative advantages of the enterprise, which requires it to evaluate accurately its business operation when building strategies. Business strategy is foremost and mainly set up for business areas, specialized business fields and the enterprise’s tradition and advantages, which forces enterprise to prepare well before building business strategies.
Definition of strategic management Besides understanding concept of strategy managers of company also need to know the way to manage these strategies and make right decisions to reach company’s target, this process is called strategic management. I can be generally said that: “Strategic management is defined as a set of decisions and actions expressed via results of planning, implement and evaluating strategies, created to reach corporation’s long-run targets” 11 Strategic management is the art and science of formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its objectives. It involves the systematic identification of specifying the firm's objectives, nurturing policies and strategies to achieve these objectives, and acquiring and making available these resources to implement the policies and strategies to achieve the firm's objectives. Strategic management, therefore, integrates the activities of the various functional sectors of a business, such as marketing, sales, production etc., to achieve organizational goals.
It is generally the highest level of managerial activity, usually initiated by the board of directors and executed by the firm's Chief Executive Officer (CEO) and executive team. Strategic management hopes to provide overall direction to the company has ties to the field of organization studies. Strategic management includes these following specific steps: Strategic planning Strategic implement Strategic checking and evaluation. Role of strategic management It can be said that business strategy plays a vital role that decides the success of enterprise: - It provides the enterprise’s management with a long-term vision.
- Based on it, the enterprise’s management can give accurate and timely decisions. - It helps the enterprise take use of available strengths and future opportunities to cope with and restrict challenges, fix weaknesses, maintain and improve the position of the enterprise. Levels of strategic management 12 In most (large) corporations there are several levels of management. Strategic management is the highest of these levels in the sense that it is the broadest - applying to all parts of the firm - while also incorporating the longest time horizon.
It gives direction to corporate values, corporate culture, corporate goals, and corporate missions. Under this broad corporate strategy there are typically business-level competitive strategies and functional unit strategies. - Corporate strategy: Corporate strategy refers to the overarching strategy of the diversified firm - Business Strategy: Corporate strategy refers to the overarching strategy of the diversified firm - Functional Strategy: Functional strategies include marketing strategies, new product development strategies, human resource strategies, financial strategies, legal strategies, supply-chain strategies, and information technology management strategies Process of forming strategy can be summarized in the following diagram: 13 Defining vision, mission and objectives Analyzing external environment and Analyzing internal environment evaluating opportunities and and evaluating strengths and challenges weaknesses Specifying strategic objectives and duties of the enterprise Setting up strategic plans Selecting the most appropriate strategy Implementing the strategy Evaluating the strategy Figure 1.1: Process of forming strategy 1.