CAPSTONE PROJECT REPORT BUILDING STRATEGY FOR VIETNAM NATIONAL TEA CORPORATION IN THE PERIOD OF 2021 TO 2025 GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT BUILDING STRATEGY FOR VIETNAM NATIONAL TEA CORPORATION IN THE PERIOD OF 2011 TO 2015 Group Number: 7 Student’s name: Nguyen Thanh Binh Dao Viet Dung Nguyen Quang Duc Nguyen Thuy Nga HANOI 2011 ACKNOWLEDGEMENT On be half of the group, I would like to thank to Centre for Educational Technology and Career Development – Higher Education – Vietnam National University, America Griggs University, especially all professors in the Board of Director of Faculty who have always supported and given us a very suitable condition to study and grow up for two years at the university. We also would like to express our best respect and sincere thank to our instructor who has instructed and helped me a lot when doing research and completing this capstone project. And please allow us to say thank to all the librarians in Library and Information Center, related sections of Vietnam National Tea Corporation for helpful materials and documents. Finally, we thank to friends and family who always stand by us and become our encouragement in studying.
Despite of our trying best in researching and collecting materials, our thesis still has some limitation on data and knowledge. We really expect to receive the comments and guidance from teachers and friends to make this thesis more meaningful. Our group commit that this is our special work. Data and figures in this thesis are accurate, our analysis and conclusions have not been announced in any other scientific research.
i TABLE OF CONTENT LIST OF ABBREVIATIONS.iv LIST OF FIGURES AND TABLES. 6 CHAPTER 1: OVERVIEW OF STRATEGIC PLANNING AND STRATEGIC MANAGEMENT. Definitions and roles of strategy and strategic management. Definitions of strategy and strategic management.
Roles of strategy and strategic management in the context of open market. Steps to study strategic planning. Internal environment analysis. Supporting tools for defining and choosing strategies.
Internal Factors Evaluation matrix (IFE). External Factors Evaluation (EFE). SWOT matrix and Great matrix. Strategy building and choosing key strategy.24 CHAPTER 2: ANALYZE PRODUCTION AND EXPORTATION REALITY OF VIETNAM NATIONAL TEA CORPORATION.
Introduction of Vietnam National Tea Corporation. Establishment and development process. Functions and missions. Over view of tea market.
The world tea consumption. The world tea supply. Analyze production and exportation reality of Vietnam National Tea Corporation. External environment analysis.
Internal environment analysis. SWOT analysis for Vietnam National Tea Corporation. Some assessments about tea production and exportation of Vietnam National Tea Corporation. Some limitations and reasons.56 CHAPTER 3: SOME SOLUTIONS TO IMPLEMENT BUSINESS STRATEGY FOR VIETNAM NATIONAL TEA CORPORATION IN THE PERIOD OF 2011 TO 2015.
Vietnam National Tea Corporation development objectives from 2011 to 2015. Promote tea production. Choosing key strategy for Vinatea till 2015. Choosing strategy by using SWOT matrix.
Choosing strategy by using G. Solutions to implement business strategy for Vinatea. Attracting capital solutions. Solutions for agricultural techniques to improve productivity and quality in tea regions.
Processes to implement Vinatea’s production and exportation strategies. 74 iii LIST OF ABBREVIATIONS ADB Asia Development Bank EFE External factors evaluation FAO Food and Agriculture Organization FAS Food and Agriculture Services FTA Free Trade Agreement HACCP Hazard Analysis and Critical Control Points IFE Internal factors evaluation ISO International Standard Organization MARD Ministry of Agriculture and Rural Development SBU Strategic business unit VINATEA Vietnam National Tea Corporation UNIDO United Nation Industrial Development Organization USDA United State Department of Agriculture WIPO World Intellectual Property Organization iv LIST OF FIGURES AND TABLES 1. List of figures Figure 1.2: Michael Porter’s Five Forces.1: Organization structure of Vinatea.2: Import volume of main imported tea countries.3: Share ration of tea products in the world market.4: Average domestic tea consumption.5: Some main related and supporting industries for Vinatea.6: Productivity of employed population in Agriculture and Forestry.7: Tea planting area in Vietnam. List of tables Table 1.1: Price of main tea production countries in the world market.2: Planting area and production of tea from 1995 to 2010.3: External Factors Evaluation matrix.4: Main accounting indexes of Vinatea from 2000 to 2010.5: Internal Factors Evaluation Matrix.6: Total capital for tea industry.7: Export volume and value of Vinatea to main markets.1: Tea area target up to 2015.2: Vinatea’s Strategy choice – SWOT matrix.3: Vinatea’s Strategy choice – GREAT matrix.4: Attracted capital for tea regions from 2006 to 2015.5: Summary of procedure to implement strategies.
Necessity of project In the context of globalization and integration, comparative advantages and absolute advantages are fully salvaged. To maintain and expand profit level, each company needs a suitable strategy to control the world market. Foreign market brings the company many profits it also contains number of challenges. If the company wants to be success in the world market it needs to examine its internal factors, external factors and competitors and give out a sound strategy.
Studying the process which a company set up its strategy become a very imperative topic attracts many economic researchers. Drinking tea is a long standing tradition of Vietnamese. Tea industry not only plays an important role in satisfying domestic consumption but also contribute millions USD into GDP. Tea is mainly cultivated in mountainous and highlands and it plays important role in daily life of people in these areas.
Tea cultivation and production contribute about 50% to 70% their income. To raise living standard for farmers in mountainous and improve contribution in GDP companies which produce tea need to find out foreign markets for exportation. There have been many researches which studied about tea cultivation and exportation: They are: - “Orientation and solutions to promote tea production to 2010”, implemented by Dr. Nguyen Kim Phong, Director of Vietnam Tea Association in 2005.
In this article, the author proposed some petitions for operation and management in tea industry and policy to promote exportation as well. - “Tea production and exportation, reality and solution”, studied by Dr. Nguyen Sinh Cuc, Ministry of Agriculture and Rural Development in 2001. Nguyen Sinh Cuc brought out comprehensive solutions for tea production and exportation.
However, from 2001 to present, with integration 6 trend of the world economy, Vietnam economy has got many big changes. So some of these solutions have not been suitable any longer. - “Modernize equipment and technology for tea production” implemented by Vietnam Tea Association. The project shown out the importance of improving quality of tea products to compete in the world market.
- “Tea - Current market situation and middle term out look” implemented by FAO in 2005. By using econometric method, the research gave out some predictions about the development of the world market. These theses bring meaningful contribution to development of tea industry and also orient strategic managements for managers of tea producing companies. However, economic context has changed much so far so data and analysis in these researches cannot cover these changes.
Moreover, these works concentrate on studying operation of the whole industry and tea market generally. We really need a research which study operation of a specific company in a specific market. With all these above reasons we decide to choose study production of Vietnamese Tea Corporation and its strategy in the context of globalization from 2010 to 2015. Purposes of project By using practical experiences when working in tea industry and study about strategic management.
We would like to give out a real picture of operation of Vietnamese Tea Corporation the period from 1995 to 2010 and prediction to 2015. The project will focus on some potential and new market such as: Pakistan, Russia, and EU. Through study and analyze operation of company we also give out some short term and long term solution for the company to orient and built up sound strategies when working with global market. Scope of project The project aims at analyzing operation of Vinatea when building up strategies for Vinatea in general and its operation in the world market.
From this analysis the company will get judicious decisions for operation. 7 Data and information in this capstone project were collect from production and exportation of company form 1995 to 2010. Methodologies of project The project uses qualitative and quantitative method in studying. These methods are: - Collecting and analyzing method - Comparative analysis method - Specialist analysis method - Economic statistic method The project also use kinds of models for analyze such as: SWOT matrix, GREAT matrix, etc.
A wide variety of academic researches, market report, journals are utilized to bring out the best understanding of the subject. The sources of data are listed clearly in the reference. Structure of project Besides forewords, conclusion and list of table and abbreviation the capstone project includes three chapters as following: Chapter 1: Overview of strategic planning and strategic management in Vietnam National Tea Corporation Chapter 2: Analyze production and exportation reality of Vietnam National Tea Corporation Chapter 3: Orientations and solutions to implement business strategy for Vietnam National Tea Corporation in the period of 2010 to 2015 8 CHAPTER 1: OVERVIEW OF STRATEGIC PLANNING AND STRATEGIC MANAGEMENT 1. Definitions and roles of strategy and strategic management 1.
Definitions of strategy and strategic management The term strategy has a long history and it originated from military field and from the ancient Greece. The strategy was born and developed along with conquests of imperial countries and it was considered as the art of winning in the battle. The military origination of the strategy has been shown in its oldest definition: According to the dictionary of American cultural heritages, strategy has been defined as a “science and art of commanding military, it is applied to make master plans and carry out the big – scale campaigns”. In the economy field, after the Second World War, global economy has recovered rapidly, business environment have been changing so vigorously.
The second revolution of science and technologies have promoted industrialization and modernization process more strongly, competition more fiercely. That situation has forced companies to have long-term business production and operation. This requirement matches the nature of strategy definition from military field applying into the economy. Over the periods of development, “strategy” definition has some certain changes and not come to agreement, therefore remains many different definitions.
Based on competition point of view of Michael Porter, strategy definition understands as: “Strategy is the study of finding a suitable position to compete in the industry, a scope of operation where competitive activities occur”. Generally, “strategy” was understood as trend and method to resolve long term and overview mission. According to UNIDO definition: “Generally, a development strategy can be described as an outline of developing process to reach intended 9 targets for a period from 10 to 20 years, it instruct strategic managers in attracting and allocating resources. 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 some differences in expression of concepts and definitions of strategy. They still have some common content: - Define company’s short term and long term targets - Bring out solutions and methods to choose these solutions - Deploy and allocate resource to implement these targets. 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. It 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”.
Strategic management includes these following specific steps: - Strategic planning - Strategic implement - Strategic checking and evaluation. Roles of strategy and strategic management in the context of open market Characteristics of business environment have a big affect to existence and development of company.