CAPSTONE PROJECT REPORT Group 8 - Class GaMBA01.V02 GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT Analysis of strategic definition and enterprise’s administration in Viet–Lao company and recommend solutions to raise quality of business strategy definition Class : GaMBA01. Lê Phúc Ân 2. Nguyễn Anh Thắng 3. Võ Hồng Sơn Vinh, 10/2010 CAPSTONE PROJECT REPORT Group 8 - Class GaMBA01.V02 TABLE OF CONTENT Page List of abbreviations 1 List of tables 1 Preface 3 Chapter I: theory basis of business strategy and business strategy 6 defining of enterprise I / Definition, role and level of business strategy 6 1.
Definition of business strategy and strategic administration 6 2. The role of business strategy for enterprise’s development 6 3. Strategy levels 7 II / Construct business strategy of enterprise 7 1. Requirements and basis in constructing business strategy 7 2.
Viewpoints of business strategy construction 8 3. The process to construct business strategy 8 4. Introduction of strategic analysis models 11 Chapter II: Assess reality of defining strategy and enterprise 15 administration in Viet–Lao Ltd. General view of Viet–Lao Ltd.
Formation and development of Viet–Lao Ltd. Basic factors impact on strategic construction in Viet–Lao Ltd. Analysis of strategic task and enterprise’s administration in Viet– 21 Lao Ltd. Analysis of business environment 21 CAPSTONE PROJECT REPORT Group 8 - Class GaMBA01.
Solutions to implement targets 35 III. Reality of strategic administration machine 36 IV. Reality of experts of strategic construction 37 V. Achieved results and limitations in defining strategy and 37 enterprise’s administration in Viet–Lao Ltd.
Reason of limitations 39 Chapter III: some recommendations to raise quality of business 41 strategy in Viet–Lao Ltd. Orientation for business strategy construction in Viet–Lao Ltd. Some recommendations to raise quality of business defining in Viet– 43 Lao Ltd. Improve the process to build up business strategy 43 2.
Improve strategic management machine 58 3. Raise quality of cadres of planning. Limitations of the process and future study 59 Conclusion 61 List of references 62 Some images of Viet–Lao Ltd. company 63 CAPSTONE PROJECT REPORT Group 8 - Class GaMBA01.V02 LIST OF ABBREVIATIONS No.
ABBREVIATIONS SIGNIFICANCES 1 AFTA Asian Free Trade Association 2 B2B Business to businesses 3 B2C Business to customers 4 CO Company 5 ETC Centre for educational technology and career system 6 LTD Limited liability 7 USD United state of America dollar 8 WTO World Trade Organization 9 VILACO Viet-Lao limited company 10 VND Viet Nam dong LIST OF TABLES No. NAME OF TABLE Page 1 Table 2.1 Organizational diagram of Viet–Lao Ltd.2 Current human resource of Viet–Lao Ltd.3 Machine for exploiting, processing raw plaster 19 4 Table 2.4 Financial data of Viet–Lao Ltd.5 Opportunities and threatens of the company 27 within 2010 – 2015 6 Table 2.6 Financial norms of Viet–Lao Ltd. Company 29 1 CAPSTONE PROJECT REPORT Group 8 - Class GaMBA01.7 Competitive profile matrix 32 8 Table 2.8 Strengths and weaknesses of Viet–Lao Ltd.9 Economic norms within 2007 – 6/2010 of Viet- 38 lao Ltd.1 Process to construct business strategy 43 11 Table 3.2 Synthesis of external factors evaluation (EFE) 45 12 Table 3.3 Internal factor evaluation (IFE) 46 13 Table 3.4 BCG matrix of Viet–Lao Ltd.5 MC Kinsey matrix of Viet–Lao Ltd.6 Attraction of business sector 50 16 Table 3.7 Competitiveness of the company 50 17 Table 3.8 SWOT matrix of Viet–Lao Ltd.9 Marking strategic alternative 54 19 Table 3.10 Some annual targets of Viet–Lao Ltd. Company 57 within 2010 – 2015 2 CAPSTONE PROJECT REPORT Group 8 - Class GaMBA01.
Reason for topic choice Since 1986, the Party and the State have got big policy to transfer subsidized -economy into market economy according to socialism orientation, reduce protectionism policy and give many preferential treatments for individuals and organizations doing business and developing self-control economy. Apart from innovation of domestic economic policy together with worldwide fast development of informatics technology and globalization…,Vietnamese economy has many positive changes. However, Vietnamese economy in general and Vietnamese enterprises in particular just make use of advantage from 3 factors which are favorable business ground, material and cheap labor price; apply incomprehensively administration and management science in business administration. Vietnamese economy has deeply integrated into global economy via unilateral, multilateral treaties, commercial organizations such as AFTA, WTO,.
therefore, Vietnamese enterprises must not only compete with each other within domestic and foreign markets but also bear violent competition from worldwide enterprises with long term experiences of finance, personnel administration as well as defining long term development strategy. To exist and develop in such environment, enterprises must apply administration and management sciences into business production which is also an urgent requirement of Vietnamese enterprises. Via learning and studying global executive master of business administration program organized by Griggs University of the US and ETC of Ha Noi National University; via collecting information and data of business activities of Viet–Lao Co., combining with knowledge of administration and management science that the program has provided, our group has realized that activities of the company recently have been rather good, however defining right long and medium term orientation with prediction of business environment… is the necessary thing to do 3 CAPSTONE PROJECT REPORT Group 8 - Class GaMBA01.V02 in current time. With achieved knowledge via the program, via realistic analysis of business production of Viet–Lao Co., our Group has studied and chosen the topic “analysis of strategic definition and enterprise’s administration in Viet–Lao company and recommend solutions to raise quality of business strategy definition” to prepare capstone project report of Group 8.
Study purposes Applying common theory basis on defining strategy and business strategy we can analyze and assess reality of strategic definition and enterprise’s administration in Viet–Lao Co Ltd., within the period of 2007 until 6/2010. Based on common theory of strategic definition, enterprise’s administration and appliance of such theories into Viet–Lao Co Ltd., Group 8 will go to study and suggest scientific solutions to apply into the company in defining business strategy within the period of 2010 – 2015; at the same time, we can also draw experienced lessons for ourselves.1 Data collection Collect primary data: directly work in the company; interview leader, main cadres; implement market survey such as investigation slip, realistic visiting of customers, and competitive opponents of the company. Collect secondary data: from reports, materials of the company, professional agencies; statistical directory, information on papers, TV, internet, books and related materials… 3.2 Comparison and synthesis Compare a norm with the basis (planning norm, previous year, sector, .) for business data, common parameters of the market, average norms, other compared norms; comparison condition is that data must be suitable to space, time, economic content, measurable units, estimation method, scale and business condition .3 Statistical method by tables We can use synthesis data via statistical tables to find out trend or common feature 4 CAPSTONE PROJECT REPORT Group 8 - Class GaMBA01.V02 of directly analyzed factors.4 Appliance of models: PESTLE, SWOT, BCG, Five forces Porter, IFE,. Study scope Analyze the task of strategic definition and enterprise administration in Viet–Lao company last time and give some recommendations to raise quality of business strategy definition within 2010 – 2015.
Capstone Project report of Group 8 has three chapters: Chapter I: Theory basis of business strategy and business strategy defining of enterprise Chapter II: Assess reality of business strategy defining in Viet–Lao Co., Chapter III: Some recommendations to raise quality of business strategy defining in Viet–Lao Co Ltd. 5 CAPSTONE PROJECT REPORT Group 8 - Class GaMBA01.V02 Chapter I: Theory basis of business strategy and business strategy defining of enterprise I. Business strategy and strategic levels 1. Definitions There are many different definitions of business strategy and strategic administration, but the current popular definition is that: “business strategy is the total long term targets, big policies and solutions of business and production, finance and human factor to make enterprise’s business develop to a higher quality status”.
"Business strategy is a kind of commitment and action that a company uses to get a competitive advantage by exploiting essential capacity within a defined market ". "Strategic administration is the process to study present and future environments as well as define organizational targets, find out, implement and check the implementation of decisions to reach such targets in present and future environment; strategic administration is supposed to be an art as well as a science". The role of business strategy for enterprise’s development. Firstly, the main function of business strategy is to create a consistent orientation for long and short term plans in the enterprise; in other words, business strategy can help enterprise to realize clearly purposes and orientations for all business activities.
Secondly, together with the fast change and development of business environment, opportunities and threatens will appear within the market; then business strategy can help enterprise to grasp and make use of business opportunities, find out adjusted solutions to overcome threatens. Thirdly, business strategy can raise effect of using resources of enterprise, increase competitive position, and ensure constant and sustainable development of the enterprise in long term. 6 CAPSTONE PROJECT REPORT Group 8 - Class GaMBA01.V02 Fourthly, construction of business strategy must create firm basis for enterprise to find out suitable policy and decision with market’s changes. Strategy levels In each market with each kind of product, customers have relative independence; each enterprise often has different strategies for different operational levels; as usual there are three strategy levels: 3.1 Strategy in enterprise level This strategy will define operational sector of enterprise, position of enterprise in business environment and the role of each business sector in enterprise.2 Strategy in unit level It will define position of business sector in the enterprise, position of sector in environment and define how to compete effectively in each sector.3 Strategy in functional level It is the strategy to support implementation of strategy in unit level and in enterprise level, including the following strategies: research and development, production, marketing, personnel, finance.
Each enterprise should have three distinctive strategy levels; however implementation of strategy must be comprehensive in three levels; at the same time, due to strategic orientation then strategy in higher level will play more important role. Construct business strategy of enterprise 1. Requirements and basis to construct business strategy .1 Requirements When constructing (defining) business strategy, we must care for the following requirements: - Increase advantage of enterprise and occupy competitive advantage within the market. 7 CAPSTONE PROJECT REPORT Group 8 - Class GaMBA01.V02 - Enterprise must define target market; then define safe area in business and business scope and risky level.
- Define clearly core targets and basic conditions to implement such targets. - Grasp information and build up information system of market, customers, providers and competitive opponents. - Define standby strategies to use in urgent cases to avoid passiveness to confuse system when strategic implementing gets stuck. - Grasp opportunities with determination.2 Basis Important basis for constructing business strategies including: - Customers: understand who is customer, what customer wants?.
- Competitive opponents: strengths, weaknesses of opponents ,… - Enterprise: strengths, weaknesses, competitive advantage of enterprise. Economic experts suppose that enterprise must base on these three strategies to construct business strategy for itself. Viewpoint of business strategy construction - Business strategy construction must be based on exploiting essential factors of enterprise to get success ; - Construct business strategy based on promoting advantages and comparing advantages; - Business strategy is constructed based on exploiting new factors and creative factors ; - Construct business strategy to exploit surrounding factors and essential factors. Process for business strategy construction 3.1 Define vision, mission and strategic targets 8 CAPSTONE PROJECT REPORT Group 8 - Class GaMBA01.V02 Leader of enterprise must define vision, mission and strategic targets of enterprise in long term then implement activities to analyze business environment, give strategic options and choose strategies to reach long term targets.2 Study and predict external environment of enterprise Analysis of external environment can realize opportunities and threatens for business activities of enterprise .