a GROUP PROJECT STRATEGIC MANAGEMENT TOPIC: “A development strategy on ECOMART organic vegetable products of ECO-LINK Company” CLASS: GamBA01.X0810 GROUP: 9 LIST OF GROUP MEMBERS: ĐÀO THỊ ÁNH TUYẾT NGUYỄN THỊ ÁNH TUYẾT NGUYỄN XUÂN VINH ĐỖ QUANG VIỆT Hanoi December 2011 1169 1 INDEX INDEX. 2 LIST OF TABLES.6 General context, necessity and meaning of the research project.6 Objecs and scope of the research. 8 Structure of the project. THEORITICAL BACKGROUND OF THE RESEARCH PROJECT.1 CONCEPTS AND CLASSIFICATION OF BUSINESS STRATEGIES.1 Concepts on strategies.2 Classification of business strategies.2 Management of business strategies.1 Identification of functions, duties and goals of a business strategy:.2 Assessment, analysis of factors that have impacts on a company and identification of goals of a company.1 Analysis of the external environment:.2 Analysis of the internal environment in a company.3 Development and selection of strategies:.1 Tools for development of strategies.4 Organization and implementation of a strategy.
ANALYSIS OF REAL SITUATIONS OF THE COMPANY.1 OVERVIEW OF THE COMPANY.1 Establishment and development.2 Situations and outcome of its business activities from 2008 to 2010.3 A general direction for development of Ecolink.4 Techniques for organic agricultural production.2 ECOMART AND ANALYSIS OF ITS REAL SITUATIONS.1 Analysis of the external environment.2 Analysis of the industrial environment and competition.2 Analysis of the internal environment.2 Assessment on core capacity of the company. DEVELOPMENT, SELECTION OF STRATEGIES AND SOLUTIIONS FOR IMPLEMENTATION OF STRATEGIES.1 Development of possible strategies for Ecomart:.2 Selection of a strategy:.3 Target and strategies function of A strategy on market expansion and occupation.1 Target of A strategy on market expansion and occupation:.2 A strategy for sustainable development of material-growing areas:.3 Solutions for human resource management:.4 Solutions for financial management:.67 3369 3 LIST OF TABLES Table 1.2: A matrix for assessment on internal factors (IFE matrix) 20 Table 1.1: A simplified SWOT analysis framework 20 Table 1.2: QSPM matrix 21 Table 2.1: Labor structure of Ecolink 27 Table 2.2: Business and production outcome for 2008, 2009 and 2010 27 Chart 2.2 b: Before tax profits structure of Ecolink 29 Table 2.1: A matrix on assessment of external factors (EFE) 36 Table 2.1: A matrix on competitive images 39 Table 2.1a: Business and production outcome 46 Table 2.1b: Structure of assets and capital sources 47 Table 2.2: IFE matrix of ECOMART 50 Table 3. QSPM matrix 55 Illustration 1.2 A process of strategic management 11 Illustration 1.2: Companies and their influential factors 12 4469 4 ACKNOWLEDGEMENT For completion of the master program and the graduation project, we have been provided with guidelines, assistance and comments from many people without whom we would not have received such a result like we have today. First of all, we would like to thank organizers of the Master program on International Business Management for successful MBA courses for us.
The courses in the program have provided us with new knowledge and improved our knowledge in business administration. The program has created conditions for us to accomplish our work and to ensure our learning quality. We would like to express our sincere thanks to teachers from the Vietnam National University and the Griggs University for their enthusiasm and devotedness while teaching for the program. We would also like to convey our gratitude to the leadership and the Vietnam Ecology Link Limited Liability Company for providing us with documents and enthusiastic support for accomplishment of this project.
Our sincere thanks also go to everyone who has supported and encouraged us while we were working on this project. We have been trying out best with this project using our own knowledge and capacity. Still, shortcomings are unavoidable and we look forward to valuable comments from our teachers and friends. Members of Group 9 5569 5 INTRODUCTION General context, necessity and meaning of the research project At present, there are significant demands for healthy food in Vietnam, given in a context that increasing attention has been given to food safety and harm from chemicals used in production of food and vegetables.
While organic food has been popular in the world and in the region, this market still remains undeveloped in Vietnam. There is limited supply of healthy food and food health is only sold at very high prices in some high qualify restaurants in hotels and supermarkets. Vietnam Ecological Link Limited Liability (Ecolink Co. Ltd) was established in 2003 and is a leading country in development of its internal control system (ICS) for an international organic certificate for its export of products to the markets in Europe and America.
In addition to stability in export of organic tea, since 2009, Ecolink has gradually developed its trademark of Ecomart with its outstanding product of organic vegetable. In addition, Ecomart has distributed fresh organic food and GAP fruits that are naturally ripen as well as dry food that have been raised and processed naturally. According to a study on the industry’s development cycle, Ecomart has been in its process of changing from a creation stage to a development stage. Ecomart’s products have gained a certain position in production and distribution of organic food products in Hanoi.
Goals in plans and action strategies for Ecomart’s long term development direction play a really important role in its development direction, which creates a competitive advantage for Ecomart in the coming period. Therefore, our Group 9 has decided to select a project “A development strategy for ECOMART organic products of ECOLINK Company from 2012 to 2015” for our 6669 6 graduation paper. This project has proved the importance and meaning of development of a business strategy if the company really wants to experience sustainable development. Also the project has provided the company with a standard process for development of strategies, with analysis and assessment on real situations of the company’s production and business; analysis of various objective and subjective elements that have impacts on production and business of the company.
Then we will make recommendations on selection of the most suitable business strategy for the company for the period of 2012 – 2015. Objecs and scope of the research Objectives: - Development of a theoretical foundation for creation of a development strategy of ECOMART organic products of the ECOLINK Company from 2012 to 2015. - Analysis and assessment on macro and microenvironment and the internal environment of ECOMART organic vegetable products for recognition of opportunities and threats from the business environment; strength and weakness that affects the development of the Company. - Development of strategic targets for production and business of ECOMART organic vegetable products from now to 2015 and proposal of a plan for achievement of strategic targets which helps the Company with its sustainable development in its competitive environment and integration.
- For us, the group that is responsible for this project, this is the application of theories on business management/administration that has been provided through the MBA program for application in settlement of Ecomart’s practical issues. Scope of the research: - The object of the research: Vietnam Ecology Link Limited Liability Company (Ecolink Co. Ltd), with a focus on Ecomart’s organic 7769 7 vegetable products. However, for analysis and clarification of research issues, the project may expand its research on competitive companies that also produce and distribute organic food products.
- The research scope includes issues related to the Development Strategy of ECOMART organic vegetable products. - The research is based on data taken during the period of 2009 - 2011 and impacts on production and business of the Company by 2015 for analysis and assessment on situations of production and business. Research methodology Step 1: Data collection Primary data is collected through observation, interviews with leaders and employees and surveys. Secondary data is taken through summary of accounting balance sheets, financial statements, with references to related data in the Internet, newspaper, books, magazines, the General Statistics Office… Step 2: Methods for processing data (1) Comparison, analysis, synthesis of data: data is taken from financial statements, accounting balance sheets over years for comparison and analysis for reasons, as well as summary for comments, conclusions on the company’s operation, with assessment on strength, weakness of the company.
(2) Statistics, analysis, combination of theories and practice for development of a matrix for selection of suitable strategies for Ecomart, as well as development of plans for implementation of strategies. Structure of the project Apart from the introduction, conclusion, the project is divided into three chapters and the summary of each chapter is as follows: 8869 8 Chapter 1: Theoretical background on strategies and development of business strategies: This part briefly presents basic concepts on business strategies and a process for development of a business strategy. At the same time, it provides matrixes for selection of a business strategy. Chapter 2: Analysis of real situations: This part provides an overview on creation and development of Ecolink and Ecomart and an introduction on general development directions of the Ecolink.
It then focuses on analysis of real situations of Ecomart including: analysis of an internal environment and creation of an EFE matrix; analysis of the internal environment, assessment on strength, weakness, and core capacity of the company and creation of IFE matrixes. Chapter 3: Development of a possible strategy for Ecomart, selection of a strategy and development of a solution for implementation of the strategy for Ecomart during the period of 2012 – 2015: Development of a possible strategy for Ecomart, select the most appropriate strategy, the goals of that strategy and some recommendations for improved efficiency of the company’s production and business. THEORITICAL BACKGROUND OF THE RESEARCH PROJECT 1.1 CONCEPTS AND CLASSIFICATION OF BUSINESS STRATEGIES 1.1 Concepts on strategies Chandler 19621 defines « Strategies are to identify major long term goals and objectives of a company and application of a series of action as well as allocation of essential resources for implementation of those goals”. However, previously, this concept is often related to military or army.
When behaviors of goods exchange have developed in the society, strategies have been applied in business. The main argument of strategies is that one party can crush its competitors – or even strong ones if it can lead the fighting situation and take the competitors to a convenient situation for promotion of its capacity. In today’s context, the term of strategies in military strategies used in management refers to business strategies.2 Classification of business strategies Corporate strategies They refer to specific action of a company to gain a competitive advantage through selection and management of a group of various business activities and competition in certain industries and market segments for certain products. They aim at goals and overall scope of the organization.
Strategies on business areas Each business unit in a big company selects its own strategy at its department level and considers it a tool for competition in a certain market. It is the commitment and action that help a company gain its competitive advantages through exploitation of core capacity in specific market; 1 Chandler, A. (1962), Strategy and Structure. MIT Press 101069 10 Functional strategies They are strategies that help effectively implement strategies at the department level and the company level thanks to its components of resources, process, human resources and essential skills Global strategies They are ways for invasion in a foreign market to gain a competitive advantage and maximize the core capacity of a company.
A clear concept of business strategies stated in the textbook for the master program on business administration by the Griggs University is that: “a series of commitment and action that a company uses to gain a competitive advantage through exploitation of core capacity in a certain market.2 Management of business strategies Illustration 1.2 A process of strategic management Identification of vision, missions, duties and current strategies of the company Analysis of the Analysis of the industrial Analysis of the macro environment environment micro environment Identification of goals for the company Development of strategic selection Allocation of Budget Policy organizational resources planning development structure Straetgic control, assement, adjustment 111169 11 1.