GRIGGS UNIVERSITY Global Advanced Master of Business Administration CAPSTONE REPORT BUSINESS STRATEGY DEVELOPMENT OF MANGANESE MINERAL JOINT STOCK COMPANY PERIOD 2011 - 2020 Group: 9 Members: 1. Phan NguyÔn Quèc Kh¸nh (Group Leader) 2. Hoµng Quèc Trêng NGHE AN, 2011 Griggs University Global Advanced Master of Business Administration Capstone project peport - Group: 9 - Class: GAMBA 01.V03 ACKNOWLEDGEMENTS In the process of completing this capstone project, we would like to express our sincere thank to our lectures of Global Advanced Master of Business Administration – ETC – VNU and Griggs University for not only the valuable knowledge but also the mental support they have provided us during the past period. We would like to express our gratitude to the Management Board and other executives of Manganese Mineral Joint Stock Company and its parent company – Ha Tinh Mineral and Trading Corporation for supporting us as well as providing us with useful comments during the process of completing this project.
Due to the limitations of time and our knowledge, it is inevitable that our report - “Business Strategy Formulation of Manganese Joint Stock Company for 2011 – 2020” may have some limitations. We hope to continuously receive support and advice from our lectures of Global Advanced Master of Business Administration –ETC – VNU and Griggs University as well as the Management Board and other executives of Ha Tinh Mineral and Trading Corporation ; Manganese Mineral Joint Stock Company; sothat we can improve our captone report. Best Regards and Many Thanks! Business Strategy Development of Manganes Mineral Joint Stock Company – Period 2011 – 2020 - 1/ 53 - Griggs University Global Advanced Master of Business Administration Capstone project peport - Group: 9 - Class: GAMBA 01.V03 TABLE OF CONTENTS CONTENTS Page COVER ADKNOWLEDGEMENT TABLE OF CONTENTS ABBREVIATIONS LIST OF TABLES INTRODUCTION 7 1. The importance of the research 7 2.
The aim of the research 8 3. Objectives and the scope of the research 8 4. The methods of the research 8 5. The structure of the research 8 Chapter 1: THEORETICAL FOUNDATION OF STRATEGY FORMULATION 1.
Basic concepts of business strategy 9 1. Strategic levels of the business 9 1. Strategy developing process 10 Chapter 2: OVERVIEW AND ANALYSIS OF BUSINESS ENVIRONMENT IN MAGANESE MINERAL JOINT STOCK Business Strategy Development of Manganes Mineral Joint Stock Company – Period 2011 – 2020 - 2/ 53 - Griggs University Global Advanced Master of Business Administration Capstone project peport - Group: 9 - Class: GAMBA 01. Analysis of the Manganese Mineral Joint Stock Company’s business 18 environment 2.
Macroeconomic analysis: 18 Economic Factors Political and Legal Factors Technological Factors Socio-cultural Factors Natural Factors 2. Analysis of MMC’s industry environment 21 Bargaining Power of customers Bargaining Power of suppliers Competitive rivalry among existing firms Threat of new entraints Substitute Products 2. MMC’s Internal Analysis 23 2. Resources Analysis 23 Human Resource Finance Facilities Technology and Equipments 2.
MMC’s management capacity assessment 29 2. MMC’s brand name assessment 29 2. MMC’s core business analysis (Investment Porfolio) 30 Business Strategy Development of Manganes Mineral Joint Stock Company – Period 2011 – 2020 - 3/ 53 - Griggs University Global Advanced Master of Business Administration Capstone project peport - Group: 9 - Class: GAMBA 01. Building SWOT matrix 33 2.
Building Internal - External factor matrix of MMC’s business lines. 36 Chapter 3: DEVELOPING A BUSINESS STRATEGY FOR MANGANESE MINERAL JOINT STOCK COMPANY PERIOD: 2011 - 2020 3. MMC’s vision, mission and strategic objectives: 43 3. MMC’s vision to 2020 43 3.
MMC’s mission statement 43 3. MMC’s strategic objectives 43 3. Solutions to implement the strategy in period 2011 – 2020 44 3. Restructuring the company 45 3.
Restructuring the proportion of products 45 3. Developing high quality human resource 46 3. Building effective information management system 47 3. Developing brand name and building corporate culture 48 3.
Building standard operating procedure 49 3. Limitations of the research and research orientation in the future 50 CONCLUSIONS 52 REFERENCES 53 Business Strategy Development of Manganes Mineral Joint Stock Company – Period 2011 – 2020 - 4/ 53 - Griggs University Global Advanced Master of Business Administration Capstone project peport - Group: 9 - Class: GAMBA 01.V03 ABBREVIATIONS ABB MEANING EBIT Earnings before interest and taxes EFE External Factor Evaluation IFE Internal Factor Evaluation IE Internal – External Matrix MGR Market Growing Rate MMC Manganese Mineral Joint Stock Company RMS Relative Market Share SWOT SWOT Matrix Business Strategy Development of Manganes Mineral Joint Stock Company – Period 2011 – 2020 - 5/ 53 - Griggs University Global Advanced Master of Business Administration Capstone project peport - Group: 9 - Class: GAMBA 01.V03 LIST OF TABLES Table Contents Page Table: 2.01 Summary of opportunities (O) and threats (T) 14 MMC’s productivity index compared with the average level Table: 2.02 15 of sectors in 2009.03 Operating results during 3 years.04 Balance sheet on September 31th (Unit: Dong) 17 Table: 2.05 Financial Index Analysis 18 Table: 2.06 Strength (S) and Weakness (W) Analysis 25 Table: 2.07 MMC’s SWOT matrix 26 Table: 2.08 Table of analyzed industries’ symbols 27 Table of external factor evaluation (EFE) of exploitation Table: 2.09 28 and trade of unprocessed minerals (A) Table of external factor evaluation (EFE) of deep – Table: 2.10 29 processed products (B) Table of internal factor evaluation (IFE) of exploitation and Table: 2.11 29 trade of unprocessed minerals (A) Table of internal factor evaluation (IFE) of deep – Table: 2.12 30 processed products (B) Table of profit to sales ratios between unprocessed products Table: 3.01 32 and deep- processed products. Table of estimated time, expenses and priority order in Table: 3.02 implementing strategic solutions over the period 2011 – 40 2020. Business Strategy Development of Manganes Mineral Joint Stock Company – Period 2011 – 2020 - 6/ 53 - Griggs University Global Advanced Master of Business Administration Capstone project peport - Group: 9 - Class: GAMBA 01.V03 Business Strategy Development of Manganes Mineral Joint Stock Company – Period 2011 – 2020 - 7/ 53 - Griggs University Global Advanced Master of Business Administration Capstone project peport - Group: 9 - Class: GAMBA 01.
The importance of the research In the competitive environment of the business community, some companies make the leap but others do not. This phenomenon has been observed and brought into question for years; and the answer seems to lie in the business strategy of a company. To survive and rise to prominence, every company has to propose an appropriate business strategy that goes in line with the current trend of integration and the general development of the economy. In other words, the future of an enterprise mainly depends on the management, the formation, and the implementation of a business strategy.
Manganese Mineral Joint Stock Company (MMC), a joint stock company that has been effectively operating in the last few years, is a subsidiary company of Ha Tinh Minerals and Trading Corporation. However, its business environment has undergone major changes, putting significant pressure on its activities, thus leading to the reestablishment of its overall strategy. Some tremendous pressure for MMC includes: First, the core business activity of MMC is mineral exploiting, whereas deposits of manganese and iron ore in Ha Tinh, its main area of exploitation, have been worryingly exhausted. If no immediate measures are taken, MMC may experience difficulties in doing business from this point onwards.
Second, changes made by the state in natural resources management in the legal system have regulated that the grant of mineral mines to individuals and organizations shall be replaced with the introduction of bidding for the exploitation of mines in the upcoming years. That has imposed considerable pressure on MMC. Third, the vigorous growth of the economy in Vietnam in general and in Ha Tinh in particular, along with the economic cooperation with neighboring countries like Laos, Thailand, China, and other nations have brought about both opportunities and challenges for businesses based in Hanoi, including MMC in Ha Tinh. Business Strategy Development of Manganes Mineral Joint Stock Company – Period 2011 – 2020 - 7/ 53 - Griggs University Global Advanced Master of Business Administration Capstone project peport - Group: 9 - Class: GAMBA 01.V03 Under the circumstances, MMC not only needs to focus on strategic measures, but also has to pay due attention to building, implementing, and controlling its long-term strategy in order to maintain its growth rate, take advantage of its opportunities and strengths accordingly to the existing economic and legal environment and Mitraco’s assistance in decision-making process.
Therefore, it is advisable that MMC build and apply its overall strategy for the period 2011-2020 based on Mitraco’s development strategy so as to maintain its position and put stable stepping stones for the future. The aim of the research The goal of this thesis is to formulate a business strategy for MMC with a view to answering two key questions: (i) how MMC should transform in order to sustain its growth rate as core business activity is narrowed down and (ii) how to achieve the maximum capacity in business. Objectives and the scope of the research To evaluate the business activity of the enterprise. To identify activities that it will maintain, apply, or eliminate, if any.
To define and assess strategic choices and necessary measures to sustain or expand its strategic business activities. The methods of the research To do this research, we use popular research methods in economic research such as analytical, synthetic, statistical, and comparison-and-contrast methods. Others include macroeconomic analysis, industry analysis and business analysis. In addition, SWOT and IE matrixes are built, then MMC’s strategy is formulated.
The structure of the research This research is divided into three chapters: Chapter I: Theoretical foundation of strategy formulation Chapter II: Overview and analysis of MMC’s business environment Business Strategy Development of Manganes Mineral Joint Stock Company – Period 2011 – 2020 - 8/ 53 - Griggs University Global Advanced Master of Business Administration Capstone project peport - Group: 9 - Class: GAMBA 01.V03 Chapter III: Developing a business strategy for MMC – Period 2011-2020 CHAPTER I: THEORETICAL FOUNDATION OF STRATEGY FORMULATION 1. Basic concepts of business strategy One of the most popular concepts of business strategy is one 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”. Alain Threlart acclaims that “Strategy is an art which the enterprise use to fight against competition and win”. Indeed, a business strategy help enterprises define clear goals and plans so that it can make the most of its resources and opportunities, thus giving it a competitive edge over other counterparts.
Also, businesses can broaden its vision and take precise actions when it comes to challenges and threats in a competitive environment, therefore nourishing its sustainability. Strategic levels of the business Every company has numerous different strategies in respect to their organization structures, varying periods and specific goals. Corporate strategy Development strategies Segmentation growth strategies: Market- infiltration strategy; Market development strategy; Product development strategy. Integrative growth strategies: Merger strategy; Acquisition strategy; Strategic alliance strategy; Diversification strategy; Concentric diversification strategy; Horizontal diversification strategy; Mixed diversification strategy.
Stability strategies Exit strategies Business Strategy Development of Manganes Mineral Joint Stock Company – Period 2011 – 2020 - 9/ 53 - Griggs University Global Advanced Master of Business Administration Capstone project peport - Group: 9 - Class: GAMBA 01. Competitive strategies There are three fundamental competitive strategies: cost leadership, differentiation, and segmentation strategy. Functional strategies Include Financial strategies; Marketing strategies; Human Resources strategies; Technology strategies; Production strategies, etc. Strategy developing process According to established theoretical foundations, existing economic situation, and future tendency, this thesis will examine internal business environment analysis with respect to industry environment and macroeconomic environment.
It employs SWOT analysis, competitiveness analysis, and business activity analysis to come to the conclusion.