Capstone project Global Advanced Master of Business Administration Program STRATEGIC MANAGEMENT Topic: BUSINESS STRATEGIC MANAGEMENT IN NO 319 COMPANY 1 TABLE OF CONTENT INTRODUCTION 1 1 The necessity of the study 1 2 Object and scope of the study 1 3 Methodology of the study 2 4 Structure of the capstone project CHAPTER 1: RATIONALE OF BUSINESS STRATEGY 3 1.1 CONCEPT, CHARACTERISTICS AND ROLE OF BUSINESS 3 STRATEGY IN ENTERPRISE 1.2 Characteristics of business strategy 3 1.3 Role of business strategy 3 1.2 PROCESS OF MANAGING BUSINESS STRATEGY 4 1.5 Requirements on building business strategy 6 1.3 DETERMINING MISSIONS AND SYSTEM OF STRATEGIC 6 GOALS 1.2 System of strategic goals 6 1.3 Rules when determining goals 7 1.4 BUSINESS ENVIRONMENT OF THE ENTERPRISE 7 1.1 Macro-environment analysis 7 1.2 Analyzing sectorial environment (operational environment) 9 1.3 Analyzing internal environment of enterprise 11 1.5 DIFFERETIATING TYES OF BUSINESS STRATEGY 12 1.1 General business strategy 12 1.2 Functional-level business strategies 13 1.6 METHODS OF ANALYZING AND SELECTING STRATEGY 13 1.1 Boston Consulting Group Matrix (BCG) 13 1.3 SWOT analysis and strategy combination 17 CHAPTER 1 EXECUTIVE SUMMARY 19 CHAPTER 2: ANALYSIS OF STRATEGIC FACTORS OF 20 THE NO 319 COMPANY 2.1 ANALYZING AND EVALUATING PRODUCTION AND 20 BUSINESS ACTIVITIES OF NO 319 COMPANY 2.1 Foundation and development process of the company 20 2.2 Business sectors, goals and scale 21 2.4 Kinds of product of the company 23 2.5 Trading results of the company in 2010 23 2.2 BUSINESS ENVIRONMENT ANALYSIS 29 2.3 Internal environment factors 41 2.3 RESULTS OF ENVIRONMENT ANALYSIS AND MATRIX 54 FOUNDATION 2.1 Market share growth matrix BCG 54 2.3 Mc Kinsey matrix 58 SUMMARY OF CHAPTER 2 61 CHAPTER 3: SOME STRATEGIES ORIENTATION AND 62 SOLUTIONS FOR THE BUSINESS OF THE No 319 COMPANY 3.1 THE FOUNDATION FOR SETTING UP STRATEGY 62 3.1 Long term target of the company 62 3.2 Short term targets of the company 63 3.2 GENERAL BUSINESS STRATEGIES 64 3.1 Concentrated growth strategy 64 3.2 High quality product strategy 67 3.3 Strategic solution for product groups 68 3.3 FUNCTIONAL DEPARTMENT STRATEGIES 71 3.1 Improving human resource quality 71 3.2 Promoting marketing implementation 78 3.3 Promoting research and development 83 3.4 Investing for technological innovation 84 3.5 Improving capacity to mobilize capital 84 3.6 Improving effectiveness in management information system 85 CONCLUSIONS 87 REFERENCES 89 APPENDIX ACKNOWLEDGEMENT 3 Studying at a university with enthusiastic teachers, well –equipped facilities and infrastructure, a number of subjects and curricula are suitable with learners who are civil servants and entrepreneurs. With the knowledge learned from the Global Advanced Master of Administration Program, practical experiences in working process, permission from Management Board of No 319 Company, and real data from its research division, our group has given our opinions in building business strategy for the Company. An overall strategic plan will assist the company leaders to have a clearer view of their work, improve competitiveness and select an appropriate solution to the company’s goal. Content of this capstone project focusing on the following issues: - Systematizing basic knowledge in developing business strategies.
- Applying basic theories of business strategy in analyzing overall business environment, strengths, weaknesses and strategic analysis models to identify affecting factors on the company’s business. - Based on scientific arguments in developing business strategy and implementation solutions, under the scope of this capstone project, the group has introduced some basic theories on business management and given our viewpoints on building business strategies for No 319 Company. The capstone project has been discussed at the workshop and highly appreciated in the process of development and building short and long-term strategies of the Company. During the implementation of this capstone project, due to limited time, lack of the information and documents, so the strategies mentioned in this capstone project are mainly based on the current situation and the latest forecast on the macro and micro-environment.
In the next stage, these strategies need to be adjusted when the macro and micro-environment are changed, so that the Company can develop and compete effectively in the market. 4 With limited knowledge about theory and practice, the capstone project is impossible to avoid mistakes and shortcomings; we look forward to receiving recommendations and comment from teachers and readers. Finally, the group would like to express our sincere thanks to Hanoi National University, Griggs of University - USA, Center for Technology Training and Employment System (ETC), Management Board and Departments of No 319 Company and our teachers for helping us to complete this capstone project. The group commits that all the data in this capstone project is provided by Departments of the Company.
In the process of implementation and completion of this capstone project, all group members have participated actively (not copy) and we will take full responsibility for the authenticity of this capstone project. The necessity of the study Enterprises’ operations in the market economy are investing, using resources and competing with rivals to gain the market share. The goals of enterprises’ operations in the market economy are to achieve the best performance and develop sustainably. The work performance of enterprises is the results of comparing the gained interests from the enterprise’s operation with the resources and expenses used for generating those interests.
To enterprises, building an appropriate business strategy has a very significant implication and the timely and reasonably, orientation and adjustment of strategy often bring about great benefits. In the globalization of the market, technology is always changed, competition becomes tougher and above all, strategy has become a more and more important factor. Along with the increasing scarcity of resources, the demand and consumption taste of the society always change, making the business environment of enterprises be more complicated and contain a lot of risks. To exist and develop, enterprises need to build a strategy for themselves.
Strategy is a type of special plan and every organization makes operation plans. To enterprises, planning is the first function in the system of management function to achieve the set goals of organization. The planning of business strategy needs to take into account many objective external factors and subjective internal factors of enterprises, analyze information systematically to set the base for planning enterprises’ operations in the long-term and short-term, focus efforts and resources on major goals to make them most effective to cope with uncertainties and adapt to changes. No 319 Company is one unit in construction industry and the Company is searching for the way to adapt to the market economy.
In the first years of the market economy, the Company had to undergo many trials with both success and upheavals to attain current achievements. This is also an evidence to prove the role of business strategy. The reality has proved that, unless defining a correct development strategy, enterprises will easily fall in traps and cannot get out of them, resulting in a slowdown in business and even a bankruptcy. Therefore, to keep the 6 firm foothold in the market and adapt to the ceaseless changes in business environment, the Company needs to build a suitable business strategy.
Object and scope of the study Applying the learned knowledge in strategic management to build and evaluate business strategy for No. - Object of the study: The study analyzes, assesses and gives orientation for building business strategy based on general theories on building business strategy of enterprises. - Scope of the study: bases on the specific data about the production and business situation of No 319 Company. Methodology of the study Based on the knowledge learned from GaMBA Training Course of Griggs University, the group uses analyzing and evaluating techniques learned from the program combined with the data collected from No 319 Company, data of the industry and outside companies to build, plan, analyze and assess all business strategies of No 319 Company.
Besides, the group also uses such methods like statistics, analysis, making model and forecast to analyze, assess and work out business strategies for the Company. Structure of the capstone project: Apart from the introduction, conclusion and references, the main content of the capstone project consists of three chapters: Chapter I: Rationale of business strategy. Chapter II: Analyzing strategic factor of No 319 Company. Chapter III: Some strategic orientations and solutions for the business of No 319 Company.
7 CHAPTER I: RATIONALE OF BUSINESS STRATEGY 1. CONCEPT, CHARACTERISTICS AND ROLE OF BUSINESS STRATEGY IN ENTERPRISE 1. Characteristics of business strategy Business strategy is the determination of available resources allocation with the purpose of changing the balance positions of competition & turning the advantages to oneself. According to Mr.
Michael Porter - a leading strategic professor of Harvard: Business strategy to cope with competition is the combination of the expected goals with the means that enterprise needs to find to realize those goals. Business strategy can be classified by level: - Strategic vision - Strategic mission - Strategic objective/goal Business strategy can be classified by time: - Short-term strategy (lasts for 2-3 years and is often functional strategy). - Mid-term strategy (lasts for 5-10 years and is often relatively important strategy including many activities and projects). - Long-term strategy (lasts for over 10 years, strategy becomes an orientation and forecast for enterprise in the future).
Business strategy can be classified by function - Functional-level strategy (Marketing strategy, human resources strategy, sales strategy, etc.) - Business-unit level strategy (sector 1, sector 2, sector 3) - Corporate-level strategy (Strategy for the whole enterprise, corporation) 1. Role of business strategy - Business strategy helps enterprises identify their purpose and orientation to set the base and guideline for all business activities of the enterprises. - Business strategy helps enterprises catch and make use of business opportunities; at the same time have active measures to overcome challenges and threats in the competitive market. - Business strategy contributes to raising efficient use of resources, enhancing competitive position of enterprises to ensure their sustainable development.
- Business strategy creates firm basis for the formation of policies and decision on suitable production and business with the changes of the market. PROCESS OF MANAGING BUSINESS STRATEGY 1. Analyzing situation Strategic management helps organizations and enterprises well define their goals and orientation to work out the reasonable roadmap and allocate resources in the optimal way to reach the goals in the time limit. Goals of organizations are determined based on prudent and scientific analyses of the market, customers, consumer trend, competitors, changes in technological and legal environment, socio-economic situation, internal strengths and weaknesses, possible opportunities and threats from outside; therefore, they will be challenging but feasible goals, meeting the expectation of shareholders, managers and employees.
Goals of organizations and enterprises also start from the missions, visions, expectations and core value of organizations and enterprises. The combination between “expected things” and “affordable things” via scientific analysis will keep organizations from falling into baseless illusions or missing opportunities to develop due to setting too low development goals right at the beginning. Building strategy Strategy building includes determining missions, setting goals, mapping out strategies and building policies. The determination of missions is to answer the question about the purpose of existence for organizations and enterprises.
The message about the missions needs to cover three main contents: purpose of organizations, business lines and the possible values. The process of building business strategy is specified as follows: - Building functional strategies, missions, functions and strategic goals of enterprises - Analyzing business environment - Analyzing the internal of enterprises - Selecting strategy - Corporate-level strategy - Business-unit level strategy and functional-level strategies - Organizing the deployment of strategy - Checking and assessing the results 1. Implementing strategy The tasks of deploying, assessing and supervising are also very important. A good strategy is a correct step, but if is not deployed well, it will not bring any result.
Many strategies have failed in implementation stage rather than in planning stage. Many managers think that a good strategy will certainly lead to the 9 destination.