Capstone Project Report BUILDING BUSINESS STRATEGY GRIGGS UNIVERSITY & INTERNATIONAL ACADEMY GLOBAL ADVANCED MBA PROGRAM CAPSTONE PROJECT REPORT BUILDING BUSINESS STRATEGY FOR CONSTRUCTION & INVESTMENT JOINT STOCK COMPANY 492 GROUP NUMBER: 10 STUDENT NAME: - Doan Quang Thuoc - Nguyen Dinh Duc - Nguyen Quang Linh - Nguyen Quoc Khanh CLASS: GaMBA01. 10 1 Capstone Project Report BUILDING BUSINESS STRATEGY TABLE OF CONTENT ACKNOWLEDGEMENT.3 PREAMBLE: GENERAL INTRODUCTION.4 CHAPTER I: THEORETICAL BASIS FOR BUILDING BUSINESS STRATEGY IN THE ENTERPRISE.1 Concept of Business Strategy.2 Basic Characteristics of Business Strategy.3 Roles of Business Strategy.6 Process to Build a Business Strategy in an Enterprise.7 Analysis Tools and Techniques.2 Five Forces of Competitive Position Model by Micheal Porter.15 CHAPTER II: BUSINESS SITUATIONS OF COMPANY 492.1 Introduction on Company 492.2 Main Lines of Business.5 Strategic Vision and Objectives.6 Business Situation in Three Years from 2008 to 2010.2 Analyzing the External Business Environment.1 Analyzing Macro Environment.2 Five Force Analysis.3 Summary of the Company’s Oppurtunities and Challenges.3 Analysis of Company Internal. 10 2 Capstone Project Report BUILDING BUSINESS STRATEGY 2.2 Technology and Equipment.5 Summary of Strengths and Weaknesses.4 Summary of SWOT Matrix.41 CHAPTER III: BUSINESS STRATEGY BUILDING AND SOLUTIONS FOR COMPANY 492 IN THE PERIOD 2011-2016.1 Orientation for Future Development.2 Objectives and Tasks.2 Selection of the Company’s Business Strategy for the Period 2011 -2016.1 Solutions on Human Resource.2 Solutions on Finance.3 Solutions on Technology.4 Solutions on Investment.5 Solutions on Marketing.49 Appendix 1: Equipment owned by the Company.50 Appendix 2: The Company’s Typical Works. 10 3 Capstone Project Report BUILDING BUSINESS STRATEGY ACKNOWLEDGEMENT We, the research team, would like to express our most sincere thanks to the dedicated lecturers in the MBA program of Griggs University, leaders of Construction and Investment Joint Stock Company 492 and ETC Center for teaching, guiding, suggesting and helping us in the process of studying as well as completing this project.
Although our team has made great efforts to perfect the theme of this capstone project report, it will have inevitable gaps in the process of completion so we hope to receive the valuable contribution of the lecturers and colleagues to enable us to continue completing this capstone project report in the best manner. Once again on behalf of Group 10, I would like to send my deep thanks and wish good health and success in life to all lecturers, colleagues and their families. COMMITMENT We hereby commit that this is our own research. Data and results contained in the capstone project report are real with clear origin.
10 4 Capstone Project Report BUILDING BUSINESS STRATEGY PREAMBLE: GENERAL INTRODUCTION Building a sound business strategy is the key leading an enteprise to success, particularly in the present time when competition among enterprises is increasingly severe. Most Vietnamese enterprises in general and state-run enterprises in particular during their operation pay their attention only to the solution for sight issues but taking no due care to long-term business strategy building which is decisive to the sustainable development of the enterprises. This became a path of business thinking of the enpterprise leaders. In the requirements of the integration trend development, business strategy building becomes a legitimate request for the prosperity of the enterprise, especially for such enterprises under group of industries with high competition as Construction and Investment Joint Stock Company 492 (Company 492).
Thefore, we - Group No. 10 - selected the project named “Building Business Strategy for Company 492 in the period between 2011 and 2016” to bring knowledge of scientific theory into the business practices of the company. The objective of the project is to advise the leaders of the company, bringing them a general, deep, broad and long-term strategic vision, enabling them to give the right decisions in a scientific schedule which is suitable with actual conditions to promote business activities to achieve good results and high efficiency. Within the scope of this capstone project, we will study in depth the theory of business strategy, review the state of Company 492 and offer solutions and recommendations for building business strategy of the Company during the period 2011-2016 based on primary analysis methods and techniques as SWOT, PEST and 5 Forces of Competitive Position Model given by Michael Porter.
The structure of our project includes: 1. Chapter I: Theoretical basis for delevoping business strategy in the enterprise CLASS: GaMBA01. 10 5 Capstone Project Report BUILDING BUSINESS STRATEGY 3. Chapter II: Business situations of Company 492 4.
Chapter III: Business strategy building and solutions for Company 492 in the period 2011-2016 5. 10 6 Capstone Project Report BUILDING BUSINESS STRATEGY CHAPTER I: THEORETICAL BASIS FOR BUILDING BUSINESS STRATEGY IN THE ENTERPRISE 1.1 Concept of Business Strategy "Strategy" is a term that has emerged from a long time and is understood as the means to achieve long-term goals. Strategic business is adhered to the economic field and is understood in different ways. Alfred Chandler says that strategy is to identify basic and long-term objectives of an enterprise and set forth a course of action and distribution of resources needed to achieve the objectives.
According to James B. Quinn, strategy is a pattern or a plan to coordinate the main objectives, policies and action sequences into a cohesive overall. David mentions in his book “Strategic Management Notes” that strategies are the means by which long-term objectives will be achieved. Business strategies may include geographic expansion, diversification, acquisition, product development, market penetration, retrenchment, divestiture, liquidation, and joint venture.
It can be generalized that strategy is a general program of action to achieve specific objectives. Talking about the strategy of an organization, people often think that the organization must determine which objectives to achieve, what actions to carry out and what resources to be ensured. Business strategy will include a combination of competitive moves and business approaches that managers want to use to operate the company aiming to attract and satisfy customers, occupy a market position, ensure successful competition, ensure growth in business, make products and achieve goals. A strategy of the enterprise is made partly by analysis and management options and partly by the need to adapt and learn.
Changing circumstances and continuous management effort to improve business strategies for time- to-time competition and development is a condition to bring the strategy CLASS: GaMBA01. 10 7 Capstone Project Report BUILDING BUSINESS STRATEGY into operation throughout the business process, not only temporarily in nature. A successful strategy will be the one that conforms to the conditions and circumstances both within and outside the enterprise, creating sustainable competitive advantage and improve business activities.2 Basic Characteristics of Business Strategy - Business strategy clearly identify the basic objectives and business direction of the enterprise in each period. - Orientation of the strategy to ensure continuous and sustainable development in the business environment which is constantly fluctuating.
- Business strategy to ensure maximum mobilization and optimal combination of the exploitation and use of enterprise resources in the present and future, to promote the advantages and seize opportunities to gain competitive advantage. - Business strategy of the enterprise is continuously reflected throughout the process. - Business strategy has always thought of advancing and winning in the business marketplace. - Business strategies are often developed for a long period (3, 5 or 10 years).3 Roles of Business Strategy - Business strategy helps the enterprise identify its purpose and direction as a basis and guideline for all business activities.
- Business strategy helps the enterprise to capture and take advantage of business opportunities, and take proactive measures to overcome the risks and threats in the competitive market. - Business strategy takes part in enhancing the efficiency of resource use, strengthening the competitive position of the enterprise to ensure the sustainable development. 10 8 Capstone Project Report BUILDING BUSINESS STRATEGY - Business strategy is to create a solid basis for working out policies and decisions on business activities in line with market fluctuations.4 Vision Strategic vision of the enterprise usually refers to the future business direction of the enterprise and answers the question "Where are we going?". That is especially important for any administrator to create criteria and long-term benefits to achieve good performance.
A clear vision will provide the foundation for creating a strategy and all business activities are guided by that vision. Creating a vision is the first step in strategic building.5 Mission The mission statement of the enterprises focuses on current business activities and is to answer the question "Who are we and what are we doing?". Mission often provides an overview of current business goals and reasons to exist, it shows enterprises are focused on what products and services, customers, using what technology.6 Process to Build a Business Strategy in an Enterprise To build a business strategy for a company, IDENTIFICATION OF we need to make major steps: ISSUES (1) identify the issues the company faced and needed to be solved, (2) do environmental analysis including internal environment and external External Environmental environment which will help us understand what is Internal going Environmental on and how it Analysis Analysis affects the company's operations in the short term and long term, (3) set the vision, mission and long-term goals for the company, (4) selecting the most appropriate strategy for Combination the company, (5) and of External the last step is the actual Internal Environment application.6 will show the model of the process. Setting Vision/Mission/Goal Strategic Selections Strategy A Strategy B Strategy C Strategy D CLASS: GaMBA01.
10 9 STRATEGY IMPLEMENTATION Capstone Project Report BUILDING BUSINESS STRATEGY Graph 1.6 Process to Build a Business Strategy in an Enterprise 1.7 Analysis Tools and Techniques 1.1 PEST Analysis Political, Economic, Social and Technological (PEST) analysis is the market analysis model and potential assessment through external factors in terms of politics, economics, society and technology. PEST analysis is the analysis of the macro environment for our local answer to the question: What are enterprises dealing with? There are four factors of macro environment that enterprises face: political-legal factor, economic factors, social factors and technological factor. These factors impact the organization both independently and in combination with other factors. Polical-legal Factor: The factors of political-legal environment strongly govern business activities of enterprises.
Political stability was identified as one of the most important premise for the business activities of enterprises. The change of CLASS: GaMBA01. 10 10 Capstone Project Report BUILDING BUSINESS STRATEGY political environment may affect beneficial to a business group but inhibit the development of other business groups and vice versa. A perfect legal system having no bias is one of the out-of-economic premises in business.
Perfection, changes and law enforcement in the economy have a great influence on the building and implementation of business strategies of enterprises. Political-legal environment directly impact business performance of enterprises because it affects products, industries and business methods of the enterprises. Not only that it also affects the costs: the cost of production, circulation cost, transportation cost, tariff levels. In short the political-legal environment has great influence on improving the business performance by impacting the business operation through a system of legal instruments and macro economic regulating instruments.
Economic Factor: The economic factors have great influence to the enterprises. As these factors are relatively large, enterprises need to make right selection to identify specific and most directly impacts. Main economic impacts often include the following factors: - Interest rate: interest rate may affect demand for the operation of the enterprise. Interest rate would affect costs and thus affect the competitiveness of the enterprise.
- Exchange rate: exchange rate is a comparison between the value of domestic currency and foreign currencies. The change in exchange rates also affect the prices of export and import commodities of the company. - Rate of inflation: the inflation rate may cause disturbance to the economy which make economic growth slow and the volatility of the currency unpredictable. So, investment activities become the work of chance and the future of business becomes difficult to predict.