Capstone Project - GaMBA01.N05- Group 2 GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT BUILDING BUSINESS STRATEGY OF PHATECO TECHNICAL SERVICE JOINT STOCK COMPANY PERIOD 2011-2015 Group number: 02 Trinh Van Ngu Nguyen Thi Thuy Nguyen Duc Tien Vu Danh Tuyen Dinh Thi Thu Huong HA NOI 2011 Page 1 of 67 Capstone Project - GaMBA01.N05- Group 2 ACKNOWLEDGEMENT This capstone project would not have been possible to be successfully completed without the guidance and the help of many people. Those people who in one way or another supported and contributed their valuable knowledge, time and effort in the whole process from the beginning of the MBA course to the completion of this research. First of all, we would like to show deepest gratitude to our Teachers because of their untiring effort, commitment, encouragement, guidance and support which helped us greatly in the understanding and writing of the study. Secondly, we are sincerely appreciative to the invaluable support of all the Managers and Staffs of the MBA program created by the conjunction of Educational Technology & Career Development and Griggs University.
With the well organizing of the program, we have learned academic knowledge as well as practical method to apply that knowledge to our business. We also thanks to the Board of Managers and Staffs of PHATECO Technical Services Joint Stock Company who helped in providing indispensable information and data of the company for the analyzing and building of this project. Last but not least, we highly esteemed the encouragement and the sharing of our families and classmates who gave us invisible but essential support in our studying, researching as well as in our life. The final aim of this project is to implement the study to the real business.
When working on the academic point of view, we have also thought about how to carry out this study when it finished. Although we have made the best effort into the working of this project, due to the limitation of the time and knowledge, the deficiencies are inescapable. We truly hope to receive many comments from our supervisor, lecturers and classmates to develop this project. Members of group 2 Page 2 of 67 Capstone Project - GaMBA01.N05- Group 2 TABLE OF CONTENT ACKNOWLEDGEMENT.2 LIST OF ABBREVIATION.
5 LIST OF TABLE.6 LIST OF FIGURE.6 LIST OF APRENDIX. 7 THEORETICAL BASIS OF BUILDING STRATEGY.1 Overview of Business Strategy.1 Definition of business strategy.2 The importance of strategic management.3 Model for formulating optimal business strategy.2 Business Environmental Assessment.1 The External Assessment.2 The Internal Assessment.3 Strategy Formulation and Selection.1 SWOT analysis model.3 GREAT model and the selection of strategy.26 BUSINESS ENVIRONMENT ASSESSMENT for.26 PHATECO TECHNICAL SERVICE JSC and.1 General Introduction of PHATECO Jsc.2 The key milestone in the development process.4 The key business achievement in the development process.5 The successful projects.6 The widely recognized quality certificates.2 Analyzing External Environment of PHATECO JSC.1 Analyze external environment according to PESTLE model.2 Analyze external environment according to 5-FORCES model.3 Analyzing Internal Environment of PHATECO JSC – Value Chain Model.4 Market Competition Analysis.5 Assessing the Internal Factor Matrix and the External Factor Matrix 46 Page 3 of 67 Capstone Project - GaMBA01.1 Assessing the External Factor Matrix of PHATECO.2 Assessing the Internal Factor Matrix of PHATECO. 53 BUSINESS STRATEGY SELECTION of.53 PHATECO TECHNICAL SERVICE JSC and.54 SOLUTION TO IMPLEMENT THE STATEGY.1 Building Strategies for PHATECO.1 Summary of SWOT analysis.2 Identifying the strategies.3 Strategy selection according to GREAT model.2 Vision, Mission and Business Target of PHATECO.3 Solution to Implement the Strategies and Meet the Targets.1 Solution for Developing Services and Products.2 Solution for Developing Human Resource.3 Solution for Developing Markets.4 Attracting Finance Capital for Investment and Development.5 Business strategy implementation controlling.65 Page 4 of 67 Capstone Project - GaMBA01.N05- Group 2 LIST OF ABBREVIATION ABS American Bureau of Shipping Alpha NDT Alpha NDT Company APAVE Apave Vietnam & South East Asia Co., Ltd ASME The American Society of Mechanical Engineers ASNT The American Society for Nondestructive Testing ASNT The American Society for Nondestructive Testing BV Bureau Veritas CSWIP Certification Scheme for Personnel DNV Det Norske Veritas GL Germanisher Lloyd HwC Vietnam-German technology transfer and training center KR Korea Register of Shipping LR Lloyd’s Register NDT Non-Destructive Testing NK Nippon Kaiji Kyokai QIS Quality Inspection Service Company RINA Registro Italiano Navale Setsco SETSCO Services Pte Ltd SGS VietnamSGS Vietnam Ltd Talon NDT Talon Nondestructive Testing Ltd TWI TWI Ltd (Training & Welding Institute) UTM Ultrasonic Thickness Measurement VR Vietnam Register Page 5 of 67 Capstone Project - GaMBA01.N05- Group 2 LIST OF TABLE Table 1.1: The key milestone in the development process.2: Business performance in 2008, 2009 and 2010.4: Percentage of Level of Degree over to Total Employees.5: Percentage of Level of Management to Total Employees.7: Value Chain Model.8: Assessing external factors of PHATECO and its main competitors.9: Assessing internal factors of PHATECO and its main competitors.10: EFE and IFE Matrix Combination.3: PHATECO Road Map.4: Geographic market distribution. 61 LIST OF FIGURE Figure 1.1: Three steps of strategic management.3: Five Forces Model.1: PHATECO Revenue and EBIT from 2008 to 2010.2: Market share in the High Technical Service Industry.3: IFE – EFE matrix.49 LIST OF APRENDIX Aprendix 1: The key certificates that PHATECO has received.
65 Aprendix 2: Non-destructive testing service of PHATECO. 66 Aprendix 3: PHATECO Organizaiton Structure.67 Page 6 of 67 Capstone Project - GaMBA01. GENERAL CONTEXT OF THE RESEARCH PROJECT Along with the strong competition in Southeast Asia and the international economic integration, Vietnam is entering the period of industrialization and globalization and process of building infrastructure and developing socio-economy. Therefore, Vietnam’s construction sector plays a very important role in the country development process, at the same time; it is also facing great challenges and potentials in the regional and world’s economic integration in the following stages.
International economic integration creates conditions for Vietnam’s industrialization and along with it is the high technical services industry. Facing the new stage in the country development, it can the unique opportunity for technical service companies to grow up and transform or it also can be the threats if the company can not change to catch with the new era. Concerning with that issue, the members of group 2 which especially has one member is the leader of PHATECO has decided to select this project. OBJECTIVE AND SCOPE OF THE STUDY 2.
Objective Establish theoretical base for creating the business strategy of PHATECO Technical Service Joint Stock Company. Analyze and assess external environment as well as the internal environment of the company in order to realize opportunities and threats from business environment; advantages and disadvantages affecting the development. Build strategic business objectives for the company from 2011 to 2015, propose the plan to implement the strategic objectives in order to help the company develop strongly in that 5 year period. Scope of the study The project study on the competence and competitiveness of PHATECO, in order to do that it study on PHATECO’s competitors to understand the position of the company in the market.
Page 7 of 67 Capstone Project - GaMBA01.N05- Group 2 The project study on the history of PHATECO since its established and study to compare with competitors from 2008 to 2010. METHODOLOGY OF THE STUDY The research method used in this project is applying synthetically a lot of qualitative and quantitative research methods, including: Method of dialectical materialism and historical materialism to study and understand of business status of PHATECO and its competitors The statistical and analytical method combines theory and practice to build matrices in order to select the appropriate business strategy for PHATECO. STRUCTURE OF CAPSTONE PROJECT Apart from the introduction, conclusion, the capstone project consists of three chapters and the summary of each chapter is presented as follows: Chapter 1: Theoretical basis of building business strategy This chapter presents most basically the definition of business strategy and process to program a business strategy, at the same time, present matrices to help select the business strategy. Chapter 2: Business environment assessment of PHATECO and competitiveness analysis Introduce the establishment and development of the company, key services and make brief assessment about the business of the company.
Analyze external environment as well as internal environment, analyze SWOT: opportunities, threats, strengths and weaknesses. Establish IFE, EFE matrices and the visual combination of these two matrices. Chapter 3: Business strategy selection of PHATECO and solution to implement the strategy Assessing the business strategies and made selection for company business strategy in the next five year period. Determine the vision, mission and solutions to deploy the strategy and enhance business effectiveness of PHATACO in the coming time.
Page 8 of 67 Capstone Project - GaMBA01.N05- Group 2 CHAPTER I THEORETICAL BASIS OF BUILDING STRATEGY 1.1 Overview of Business Strategy 1.1 Definition of business strategy Some decades recently, scholars have done a lot of researches to develop the academic aspect of business management as well as to enhance the practical implement aspect. One of the leading issues is the making of business strategy and strategic management. Chandler is one of the first people to initiate strategic management theory which defines strategy as “Determining targets, basic long-term purpose of enterprise, the applying a sequence of actions as well as allocating necessary resource to complete these targets”. Quinn presented a more general concept: “Strategy is a pattern or a plan that integrates major targets, policies, and a sequence of actions into a closed united combination”.
“Strategy is an organization’s long-term orientation and scope to gain competitive advantages through identifying its resources in a changing environment to meet market’s needs and satisfy related stakeholder” is the definition for strategy from Johnson and Scholes. Mintzberg has generalized all aspects of strategic management by 5P to get a multi- approach definition of strategy including: Plan: a sequence of actions which were consistent intended. Pattern: The consistent of action according to time, either intended or not. Position: The matching between organization and its environment.
Perspective: A way of thorough awareness of the world. Ploy: A specific way to cheat opponent. Page 9 of 67 Capstone Project - GaMBA01.N05- Group 2 According to Michael E. Porter “Strategy is the art of making competitive advantages” or “Strategy is a range of sophisticated actions to mobilize resources that an organization may have in order to gain a certain goal”.(GaMBA, 2009, Strategic Management Textbook) In addition, strategy is defined by the nature.
There are at least three levels of strategy: strategy at company level; strategy at business unit level and functional strategy. Currently, with the trend of globalization, companies are quickly diversifying their activities beyond national borders. Therefore international strategy is the choice to face with international business issues. In conclusion, the term “strategy” is used in three meanings: - Identifying enterprise’s long-term targets - Setting out General action programs - Selecting of plan for actions, allocating resources to achieve the targets.
Business strategy is a coordinated series of actions by a company which involve the deployment of resources to which one has access for the achievement of a given purpose. In conclusion, business strategy has the key aim is to gain competitive advantages. Business strategy can just be successful by putting attention to changing external and internal conditions and the formulation and implementation of insightful adaptations to those conditions. Superior business strategy formulation and implementation can overcome and opponent’s superiority in numbers and resources.2 The importance of strategic management Strategic management is not only a science but also an art, through which the executive plans, organizes, controls and evaluates business decisions in order to achieve the determined organization targets.
Strategic management includes continuous actions of environmental internal and external assessment, strategy formulation, strategy implementation and evaluation. Page 10 of 67 Capstone Project - GaMBA01.