GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM TABLE OF CONTENT ACKNOWLEDGEMENT 4 LIST OF TABLE AND FIGURES 5 CAPSTONE PROJECT REPORT OVERALL 6 FORMULATING BUSINESS CHAPTER I: THEORIOTICAL STRATEGIES BACKGROUND TO FORMULATEOF THE BUSINESS STRATEGY. 8 VINCOM JSC COMPANY 1.2 Concept of strategic management 8 1.3 Task of strategic management 8 Group:THE 1.2 FORMULATE 06 BUSINESS STRATEY 9 1.1 Choose the mission and target 9 Students: 1.3 Hoang Van Tuyen Internal assessment 11 Mai 1.3 TECHNIQUES TO Ba Kieu ANALYSE Phuong BUSINESS STRATEGY 13 1.1 Vu Ngoc Minh Internal factor evaluation matrix (IFE) 13 Hoang Thi Tuyet Mai 1.2 External factor evaluation matrix (EFE) 13 1.3 Competitive Profile Matrix 14 1.4 Quantitative strategic planning Matrix 15 1.4 TOOLS FOR ADOPTING BUSINESS STRATEGY 16 1.2 I – E Matrix: Combination of internal and external factors 17 HA NOI 2011 1.3 Quantitative Strategic Planning Matrix (QSPM) 18 1 TABLE OF CONTENT ACKNOWLEDGEMENT 4 LIST OF TABLE AND FIGURES 5 OVERALL 6 CHAPTER 1: THEOREOTICAL BACKGROUND TO FORMULATE THE BUSINESS STRATEGY.1 Concept of business strategy 8 1.2 Concept of strategic management 8 1.3 Task of strategic management 8 1.2 FORMULATE THE BUSINESS STRATEY 9 1.1 Choose the mission and target 9 1.3 TECHNIQUES TO ANALYSE BUSINESS STRATEGY 13 1.1 Internal factor evaluation matrix (IFE) 13 1.2 External factor evaluation matrix (EFE) 13 1.3 Competitive Profile Matrix 14 1.4 Quantitative strategic planning Matrix 15 1.4 TOOLS FOR ADOPTING BUSINESS STRATEGY 16 1.2 I – E Matrix: Combination of internal and external factors 17 1.3 Quantitative Strategic Planning Matrix (QSPM) 18 CHAPTER II: INTERNAL, EXTERNAL ASSESSMENT TO FORMULATE THE BUSINESS STRATEGY FOR VINCOM JSC 20 2.1 Founding and developing 20 2.2 Task and function of the company 20 2.4 Organizational chart and human resource 22 2.5 Company’s current business situation 23 2.7 Vision and Mission 24 2.3 External factor evaluation matrix (EFE) 45 2.4 Technology and safety job 54 2.5 Internal factor evaluation matrix (IFE) 56 CHAPTER III: ADOPTING THE BUSINESS STRATEGY 57 3.1 SWOT MATRIX ANALYSIS 57 3.3 QSPM MATRIX ANALYSIS 61 3.4 ADOPTING THE BUSINESS STRATEGY FOR VINCOM JSC 64 3.5 IMPLEMENTATION THE STRATEGY 64 3.1 Human resoure solution 64 3.3 Marketing and Pr solution 65 3.6 SUGGESTION 67 CONCLUSION 68 REFERENCE 69 4 ACKNOWLEGEMENT In completing this capstone project, we have been receiving precious individual and collective support. We would like to express our gratitude to all the staff of VINCOM JSC Company, especially Ms. Nguyen Thi Thu Thuy – Assistant of General Director , who have given us good conditions and highly valuable support in providing documentation as well as studying conditions in our completing this project.
We would like to undertake that the contents of this assignment are fulfilled with our best efforts in studying, finding and choosing the topic for analyzing of all the members of the group and with reference to a number of documents (as quoted hereafter). We would also like to commit that, this project has not been submitted to any other studying or training programs. Hanoi, September 2011 Group of Authors 5 LIST OF FIGURES AND TABLES No Name of Figures Page Figure 1.1 Five tasks of strategic management 9 Figure 1.2 Five competitive forces model by Michael Porter 12 List of Tables No Name of Table Page Table 1.1 Internal Factor Evaluation Matrix (IFE) 13 Table 1.2 External Factor Evaluation Matrix (EFE) 14 Table 1.3 Competition Photos Matrix 15 Table 1.4 SWOT Matrix 17 I-E Matrix – Combination of internal and external Table 1.6 The Quantitative Strategic Planning Matrix (QSPM) 19 Table 2.1 Organizational structure of the Company 22 Table 2.2 Financial data of Vincom from 2008 to 2010 23 Table 2.3 Vietnam inflation from 5/2008 – 5/2011 27 Table 2.4 Strengths, weaknesses of competitors in the industry 35 Table 2.5 Summary table of opportunities and threats 37 Table 2.6 Competitive Photos Matrix 43 Table 2.7 External Factor Evaluation Matrix of Vincom JSC 45 Table 2.8 Balance sheet of Vincom JSC from 2008 – 2010 48 Table 2.9 Operation result of Vincom JSC from 2008 – 2010 49 Table 2.10 Key financial indicator of Vincom from 2008 – 2010 49 Table 2.11 Summary table of strenths and weakness 55 Table 2.12 Internal factor Evaluation Matrix of Vincom JSC 56 Table 3.1 SWOT of Vincom JSC 57 Table 3.2 IE Matrix of Vincom JSC 61 Table 3.3 QSPM matrix 62 6 OVERALL 1. The necessity to do the capstone.
In the trend of globalization, Vietnamese businesses are having huge opportunities to build up their business but also facing many threats which can push the companies to a broke. To exist and develop, all companies need to formulate the right business strategy in order to use the opportunities and minimize the threat from external environment. From the demand, the formulating a business strategy is a necessity for each company. This will help company to have a clear target, guide each department in general and staff in particular to act for the general target of company.
Business environment today is changed quickly, global competition requires company always move to adopt the changes. Real estate is a specific field, require many factors like abundant finance fund, fund raising ability, good relationship with authorities, good vision of management. Real estate is a field with much big risk but can create huge benefit. Therefore the field attracted many company to invest in Vietnam.
Vietnam is on the developing paths; the demand of real estate like apartment, office building, and trade center is still high. This is the opportunity and the risk of each company in this field. Purpose of Capstone Based on the findings in the studying to identify the strengths, weaknesses, opportunities and threats in order to formulate the business strategy in real estate field of Vincom. Objects and scope of the Capstone Project Object: Vincom JSC Scope: The business environment of Vincom in Hanoi and HCMC to formulate the business strategy in real estate filed for Vincom from 2012 to 2017 7 4.
Method of study We have collected the information from reference books, data from Statistic Department and real estate consultant services, annual report of Vincom from 2008 to 2010. Structure of the Capstone Project The structure of the capstone project is as follows: In addition to the Forewords and Reference, this capstone project includes three chapters: Chapter 1: Theoretical background of business strategy Chapter 2: Analysis of the Company’s internal and external environment for formulating business strategies Chapter 3: Adopting business strategies for the Company, solutions and conclusions 8 CHAPTER 1: THEORETICAL BACKGROUND OF BUSINESS STRATEGY 1.1 Definitions of business strategy In 1962, Alfred Chandler – one of the first economists initiating the theory of strategic management defined: “Strategy is the determination of basic long-term goals and objectives of an enterprise and the adoption of the course of action and the allocation of resources for carrying out these goals”. After that many other people give many definitions about strategy like James B. Quinn, Johnson and Scholes.
Although there are a large number of strategy definitions, business strategy can be understood as the art of organizing and assimilating resources in an optimal manner, proposing and executing decisions to adapt to changing trend of the environment for business success and achievement of long-term objectives.2 Concepts of strategic management Strategic management is a set of managing decisions and actions with determination of an enterprise’s long-term performance. Strategic management includes ongoing activities: Evaluating and monitoring the environment (internal and external environment); formulating strategies; implementing strategies, assessing and controlling strategies. Therefore, studying strategy focuses on monitoring and assessing external opportunities and threats in the context of internal strengths and weaknesses.3 Strategic management tasks According to Assoc. Le The Gioi; Dr.
Nguyen Thanh Liem, MA. Tran Huu Hai (Strategic Management, Statistics Publisher, 2009), strategic management has five tasks in close relation: - Developing a vision: Describe the future image of the enterprise; specify its goals and how it will become. - Setting objectives: Convert the mission into specific performance targets. 9 - Formulating a strategy to achieve performance targets.
- Implementing and executing the strategy which has been chosen effectively. - Evaluating performances, reviewing the situation and initiating corrective adjustments on the vision, long-term orientation, objectives, strategies or practice based on experience, changing conditions, ideas and new opportunities.1: Five tasks of strategic management Developing Developing aa Developing Developing aa Developing Developing aa Developing Developing aa Developing Developing aa vision vision of of strategy strategy vision vision of of strategy strategy vision vision of of strategy strategy vision vision of of strategy strategy vision vision of of strategy strategy and and and mission mission and mission mission and and mission mission and and mission mission and and mission mission Repairing Repairing Adjustments Adjustments Improvements/ Improvements/ Improvements/ Improvements/ Restoring Restoring 1,2,3,4 1,2,3,4 ifif necessary ifif necessary Modifications Modifications Modifications Modifications ifif necessary necessary necessary necessary ifif necessary necessary ifif necessary necessary (Source: Le The Gioi, Strategic Management, Statistics Publisher, 2009) 1.2 Formulating strategies The process of formulating strategies can be divided into five steps, including: (1) Selecting the mission and main objectives of the company; (2) Analyzing the external environment to identify opportunities and threats; (3) Analyzing the internal environment in order to identify strengths and weaknesses of the organization; (4) Selecting strategies (5) Implementing strategy 1.1 Selecting mission and main objectives 10 The first step of the strategic management process is to define the mission and main objectives of the organization. A mission and main objective of the organization provides a context for building strategies. A mission demonstrates reasons of the organizations’ existence and instructs the organization what to do.
The major objectives determine what the organization hopes to meet within the medium and long term. Mission statement is a key imperative of how an organization's perception of the demands of stakeholders. Most of the mission statements are created with three main elements: Vision statement or mission of the company; Sum of the values of the basic philosophy that administrators must commit to and affect their decisions; The coupling of the fundamental goals that the administrators believe it must take to achieve the vision or mission and its association with the values they have committed. Objective is state in the future which the company is trying to make or end result of the planned actions.
The purpose of setting objectives is to determine exactly what to do if you want to achieve the mission. To be meaningful goals, there must be four target characteristics: - A target set is considered good if it's accurate and measurable. - A good goal is set to have the direction to the important issues. - A good goal is set to have challenging but can be made (actual).
- A good goal should be built with a determined period of time (sometimes correctly) can be achieved. - A good goal needs to provide tools to evaluate the performance of managers.2 Analyzing external environment In practice, all sectors and enterprises are allocated in the environment of each industry and in a wide macro environment. All decisions of the enterprise are 11 influenced strongly by such factors as: Political and legal environment, economic environment, socio-cultural environment, technological environment. Changes in the macro environment may have direct effects on any resources in the industry, varying the attractiveness of an industry.
+ PEST analysis in analysis of macro environment PEST analysis studies influences of issues in the macro environment. Those issues are: o Political/Legal issues o Economic issues o Socio-cultrural issues o Technological issues Those four issues have direct influences on economic sectors and they are external issues of the enterprise and the industry. Enterprises base on the influences to implement suitable policies and activities. + Analyzing the industry environment According to Across.
Le The Gioi, Dr. Nguyen Thanh Liem, MA. Tran Huu Hai (Strategic Management, Statistics Publishers, 2009), analyzing industry and competition is a set of concepts and techniques to clarify key issues on: - Outstanding economic characteristics of the industry.