CAPSTONE PROJECT REPORT BUILDING VINACOMIN’S BUSINESS DEVELOPMENT STRATEGY OF CEMENT PRODUCT IN THE PERIOD 2011-2015 1. Nguyen Trung Long 2. Le Thi Minh Ha 3. Nguyen Khac Lam 4.
Le Duc Tai Class: GaMBA 01.Group11 Capstone Project Report TABLE OF CONTENT LIST OF TABLES. 4 LIST OF FIGURES. The necessity of the theme:. Object and scope of research.9 CHAPTER I: THEORETICAL BASIS TO BUILD VIACOMIN CEMENT DEVELOPING STRATEGY.
The concepts relating to strategy. Concept of business strategy:. Concept of strategy management:. Duties of strategy management:.
Build the business strategy. Analyze the external environment:. Analyze the internal environment:. Techniques for strategy analysis.
Internal factor evaluation matrix (IFE):. External factor evaluation matrix (EFE):. Tools for strategy selection. I-E Matrix, Internal and External Matrix:.Group11 Capstone Project Report CHAPTER 2: ANALYZE THE INTERNAL ENVIRONMENT, THE EXTERNAL ENVIRONMENT TO PLAN THE VINACOMIN CEMENT DEVELOPING STRATEGY.
General introduction about VVMI. General introduction about the 3 cement manufacturing companies of VVMI. General introduction about La Hien Cement Joint Stock Company - VVMI:. General introduction about Tan Quang Cement Joint Stock Company:.
Vision, mission, objectives. Common brand of three cement companies of VVMI. Vision and Mission:. Analyze the business environment:.
Analyze the macro-environment:. Analyze the industrial environment:. External Factor Evaluation Matrix (EFE):. Analyze the internal environment according to the function at Vinacomin Cement.4 Vinacomin cement’s competitive advantages.5 Internal factors evaluation matrix (IFE):.54 CHAPTER III: SELECT VINACOMIN CEMENT DEVELOPING.57 STRATEGY AND SOLUTIONS TO IMPLEMENT THE STRATEGY.1 Analysis of SWOT matrix.2 Analysis of I-E matrix.Group11 Capstone Project Report 3.3 Selecting the strategy for Vinacomin.4 Solutions to deploy strategies:.3 Strategy of investing development.4 Developing the human resource.
Investment in information technology infrastructure.6 Schedule to implement the strategies:.Group11 Capstone Project Report LIST OF TABLES Table 1.1: Internal Factor Evaluation Matrix (IFE).2: External Factor Evaluation Matrix (EFE). Results of production and business of VVMI in the period of 2006-2010.2: Results of production and business of La Hien Cement Company - VVMI in the period of 2006-2010.3: Development object of Vinacomin Cement in the period of 2011-2015.4 Retailer – Sales market share according to the cement brand (% annual revenue).5: Competitive Matrix Photos.6: Opportunities and Threats (O-T).7: EFE Matrix of Vinacomin Cement.8: Result of business operations in 2010.9: Result of production and business by each main product of VVMI .10: Summary of Strengths and Weaknesses (S-W) of Vinacomin cement.11: Internal factors evaluation matrix (IFE) of Vinacomin cement.1: Table of analysis of SWOT matrix of Vinacomin cement.2: Table of selected strategies for Vinacomin.Group11 Capstone Project Report LIST OF FIGURES Figure 1.1: Basic Model of Strategy Management .Porter’s Five Forces.1: Organizational Structure of VVMI. Organizational Structure of Vinacomin Cement.3: Supply and Demand Situation of Cement in the period of 2005 – 2020 and prediction to 2015.4: Supply and Demand at the regions in Vietnam from 1997-2020.5: Distribution of revenue and preference of Hoang Thach at the regions.6: Distribution of revenue and preference of Ha Tien at the regions.7: Distribution of revenue and preference of Chinfon at the regions.8 : Retailers – Total annual revenue of cement at regions (billion ton). Porter’s model applied into Vinacomin Cement.10 BCG matrix of VVMI.1: I-E matrix, combining the internal and external of Vinacomin Cement.2: The distribution channel of La Hien Cement Corporation.3: the distribution channel of Quan Trieu cement corporation and Tan Quang cement corporation.Group11 Capstone Project Report ACKNOWLEDGEMENTS To complete this capstone project report, we have received the precious helps of the people and individual.
We sincerely thank the teachers at Master of Business Administration (GaMBA), University of Griggs (USA) and ETC under National University of Hanoi, who enable us to study and enhance management skills and experience in both theory and practice. We would like to thank the staff of workers and employees at the Viet Bac Mineral Industries Corporation – Vinacomin, and the other members of the Corporation who have created the good conditions and precious assistance in terms of materials and research condition for us to complete this report. We also would like to thank the student at the class: Gamba01.N05, thank for the support and encouragement from our families and relatives, who have motivated us to overcome the difficult and challenging periods in our lives and works to attend and complete this program. We commit that the content of this assignment is the effort during the process of researching, looking for and selecting the topic for analysis of the members in the group of authors.
We also commit further that this assignment has not been submitted to any research program or the other training program. Hanoi, April 16th, 2011 Group of authors Nguyen Trung Long Le Thi Minh Ha Nguyen Khac Lam Le Duc Tai 6 GaMBA01.Group11 Capstone Project Report GENERAL INTRODUCTION 1. The necessity of the theme: In the context of world economy having many difficulties, the financial crisis and global recession, climate change, the trend of globalization and international integration is taking place all over the world. Although the internal forces are not strong, Vietnam's economy has developed in a positive direction, recovered relatively fast in the condition of the world economy continues to overcome the recession.
Vietnam's economy in 2010 achieved growth rate at 6. GDP in 2010 achieved by all sectors was higher than that at the same period last year including the construction industry. Cement is one of the basic materials for the construction sites and is one of the industries playing important role in the economic growth of Vietnam, an average of 10 % - 12% of GDP. According to the Ministry of Construction, in 2011 there will be about seven cement projects putting into operation and the excess amount will increase by 22 million tons.
Therefore, the cement manufacturing companies are facing with the difficulties and challenges, fierce competition for their survival and development. Vinacomin - Viet Bac Mining Industry Holding Corporation Limited (VVMI) is a member of the Vietnamese Coal and Mineral Industries Group, which has 16 members (of which there are 03 cement manufacturing companies), the main business lines are Coal and Cement. However, according to the map of coal resources, in 2015 coal mines of VVMI will be reduced. Coal production will have many difficulties in compensating for the land clearance, the utilization of waste rock from coal production as input material for cement production can save the cost, lower the costs of cement, thus contributing to reducing waste dump area, minimizing the environmental pollution in the process of coal mining.
Therefore, the leaders of VVMI have chose to develop concrete as the long-term development strategy of the Corporation. From 2011 ÷ 2015, VVMI will produce approximately 3 million tons of cement each year. VVMI production capacity, while Vietnam will face with a surplus in supply of cement, especially in Northern and Central Areas.Group11 Capstone Project Report Without a good cement developing strategy, the Corporation will face with many difficulties in finding the markets for its products and face with the fierce competition on the market price. For these reasons, by the research method of using strategy analyzing technique, our group has chosen the theme: "Building Vinacomin’s business development strategy of cement product in the period of 2011-2015".
Research purposes: The main purpose of this research is to select a long-term development strategy for Vinacomin’s cement based on assessing and analyzing the environment, the internal and external prospects of Vietnam’s economy and cement industry in the period of 2011 - 2015. The specific purposes of the research are: Define strengths, weaknesses, opportunities and threats of Vinacomin’s cement. Evaluate the current situation of Vinacomin’s cement to develop the competitive programs. Build the development strategy in the period of 2011 - 2015 for Vinacomin.
Object and scope of research - Object of research: Vinacomin - Viet Bac Mining Industry Holding Corporation Limited Add: No. 1 Phan Dinh Giot, Thanh Xuan District – Hanoi City. - Scope of research: The Corporation has many production and business operations, but this theme just focuses on analyzing cement production and business of the La Hien Cement Company, Tan Quang Cement Company, Quan Trieu Cement Company, 3 members of VVMI. When building the cement developing strategy of VVMI, the product of these three companies is generally called Vinacomin Cement.
Research Method: In building the cement developing strategy at Vinacomin, the group of authors uses strategy analyzing method as follows: 8 GaMBA01.Group11 Capstone Project Report + PEST: Analyze 5 external environmental factors; + Model of 5 competitive pressure of M. Porter; + SWOT, IFE, EFE, IE, BCG. Data sources Use the secondary data of VVMI, the annual reports of joint stock companies: La Hien cement, Tan Quang cement, Quan Trieu cement and the data of Vietnam Cement company and Vietnam Cement Association, the articles published in the magazines, websites,. Structure The assignment includes 3 chapters: Chapter I: Theoretical basis.
Chapter II: Analyze the internal environment, the external environment to plan the cement developing strategy. Chapter III: Select cement developing strategy at Vinacomin and solutions to implement the strategy. Although there have been many efforts in the research process to complete this assignment, but because the authors have the limitations on knowledge, information sources, so the data analysis, comparison. still has inevitable shortcomings and limitations.
Therefore, the authors would like to receive the feedback from teachers, scientists, friends and colleagues to continue completing this theme, enhance the practicalities of strategy above aimed at serving the business development of Vinacomin - Viet Bac Mining Industry Holding Corporation Limited more and more sustainable.Group11 Capstone Project Report CHAPTER I: THEORETICAL BASIS TO BUILD VIACOMIN CEMENT DEVELOPING STRATEGY 1. The concepts relating to strategy. Concept of business strategy: There are many definitions of what strategy is depending on the concept of each author. In 1962, Alfred Chandler, one of the first persons initiating the theory of strategy management defined: "determining the basic and long-term objectives of the company, or choosing the operation direction or method, and allocating the necessary resources to implement these goals".
Later, Johnson and Scholes redefined the strategy in the condition that the environment has a lot of rapid changes: "strategy is a direction and scope of an organization in a long-term to gain competitive advantage for that organization through the format of its resources in a changing environment, to meet market’s demand and satisfy the expectations of the stakeholders "[10 / 6]. Although there are many definitions of the different authors on the strategy, it is generally understood that the business strategy is the art of organizing, coordinating and optimizing resources, proposing and implementing the appropriate decisions with changing trends of the environment to gain the competitive advantage to achieve the long-term goals in business. Concept of strategy management: Strategy Management is a set of management decisions and actions determining the long-term performance of a company. Strategy management includes the continuous actions: review the environment (both internal and external), build the strategy, implement strategy, and evaluate, control the strategy.
Therefore, strategy research focuses on monitoring and evaluating the external opportunities and external threats in the context of the internal strengths and internal weaknesses.Group11 Capstone Project Report 1. Duties of strategy management: In the opinion of the authors: Ass. Le The Gioi, Dr. Nguyen Thanh Liem, Master.
Tran Huu Hai in the research: "Strategy Management" (Statistics Publishing House, HN-2009), the duties of strategy management consists of five duties, which are closely related to each other: - Create a strategy prospect: descript the future image of the company, show clearly where the company wants to direct to, like what the company wants to become? This will provide the long-term orientation, show clearly the image that the company wants to be, pass the company the sense of purposeful action. - Set up the goals: Convert the strategy prospect into detail implementation results the Company has to achieve. - Develop the strategy to achieve the desired objectives. - Implement and operate the selected strategies effectively.
- Evaluate the performance and conduct the adjustment of prospect, the long- term direction, objectives, strategy or execution based on experience, changing conditions, new ideas and opportunities.