Luận văn thạc sĩ quản trị kinh doanh quốc tế MBA (19)

GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT “BUILDING BUSINESS STRATEGY FOR VIETTRUST JSC TO THE YEAR 2030” ACKNOWLEDGMENTS We would like to express our thankfulness to the lecturers, facilitators and experts of the GaMBA between Griggs University and Education Training Center (ETC) for your enthusiastic provision of very important information and knowledge which help to equip us with new style and skills of management The changes in thinking and management style of ourselves and our colleagues, especially the effectiveness of the management work at our office during the recent time, are wonderfully crystallized from this important course Due to limited time, there are still some mistakes in the Project, even we commit that this capstone project is result of our real study and practice in VIETTRUST JSC We would therefore like to welcome all recommendations and comments to perfect our Capstone Project on “BUILDING BUSINESS STRATEGY FOR VIETTRUST JSC TO THE YEAR 2020” Thank you very much! TABLE OF CONTENTS ACKNOWLEDGMENTS .1 TABLE OF CONTENTS LIST OF TABLES, FIGURES AND CHARTS .4 CHAPTER I THEORETICAL BASIS OF BUSINESS STRATEGY BUILDING .5 The concept and role of strategy 1.1 The concept of strategy 1.2 The role of strategy 1.3 The content of strategy .7 1.4 Strategic management process The technical analysis strategy 2.1 PEST Analysis 2.2 Analysis the five competitive forces of M Porter 11 2.3 SWOT analysis 14 2.4 Tools of building strategy and selecting strategy 16 2.5 Tools of strategy selections .19 CHAPTER II 21 BASIS FOR THE FORMULATION OF BUSINESS STRATEGY FOR VIETTRUST JSC 21 2.1 Overview of VIETTRUST JSC 21 2.2 Analysis macroeconomic of VIETTRUST JSC 25 2.2.1 PEST analysis of VIETTRUST JSC 25 2.2.2 Industry environmental analysis 31 2.3 Analysis of internal environment of VIETTRUST JSC 37 2.3.1 Human resources 37 2.3.1 Financial resource 39 2.3.3 Technical – material facilities resources 41 2.4 Core Competitiveness 42 2.5 The BCG matrix 42 CHAPTER III 45 SELECTION OF BUSINESS STRATEGY FOR VIETTRUST JSC IN THE PERIOD 2011 – 2020 45 3.1 Oriented development 45 3.2 Objective of VIETTRUST JSC 45 3.3 Generate strategy 45 3.3.1 EFE Matrix of VIETTRUST JSC 45 3.3.2 IFE Matrix of VIETTRUST JSC 46 3.3.4 SWOT matrix of VIETTRUST JSC 48 3.4 Selecting strategies for VIETTRUST .50 3.4.1 Differentiation strategy 50 3.4.2 Market development strategy .50 3.4.3 Enhance competitiveness strategy 50 3.4.4 Joint venture Strategy 50 3.4.5 Selecting Strategy for VIETTRUST JSC .50 3.5 Strategic solutions 51 3.5.1 Human resources solutions 51 3.5.2 Financial solutions 52 3.5.3 Marketing solutions .52 3.5.4 Investment solutions 53 3.5.5 Organization solutions 53 3.6 The road map for implement strategy of VIETTRUST JSC .53 CONCLUSIONS 56 REFERENCES 57 LIST OF TABLES, FIGURES AND CHARTS Figure 1: A comprehensive strategic-management model Figure 2: PEST model 10 Figure 3: Five forces model of M Porter 14 Figure 4: Organizational chart of VIETTRUST JSC 22 Figure 5: Comparing logo of TONMAT and LONG GIANG .32 Chart 1: Market share of 3-layer soundproof and heat-resistant industry 34 Figure 6: The BCG Matrix of VIETTRUST JSC with two division through year period 2008-2010 43 Table 1: SWOT MATRIX 16 Table 2: Model of IE Matrix .18 Table : QSPM - Quantitative Strategic Planning Matrix 19 Table 4: Market share of VIETTRUST JSC through 2008-2010 .23 Table 5: Vietnamese GDP rate in recent years 26 Table 6: List of companies in industry 33 Table 7: Competition images of major companies 34 Table 8: Opportunities and threats of industry analysis 37 Table 9: Employes qualification of VIETTRUST JSC .37 Table 10: Strengths and weaknesses of human resources 38 Table 11: Summary of and business results of enterprises 39 Table 12: Strengths and weaknesses of financial sources 40 Table 13: Strengths and weaknesses of technical and material facilities 41 Table 14: Sales of TONMAT in period 2008-2010 .42 Table 15: Sales of TONMAT Logistics in period 2008-2010 42 Table 16: VIETTRUST JSC portfolio with two divisions 43 Table 17: EFE Matrix 45 Table 18: IFE Matrix 46 Table 19: The road map for implement strategy of VIETTRUST JSC 53 CHAPTER I THEORETICAL BASIS OF BUSINESS STRATEGY BUILDING The concept and role of strategy "Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations” Strategy of a business was formed to answer the following questions: How long will business activities take place? Which market will business activities compete in? What is the scope of activities? How business will be conducted better than competitors in the market? Which resources are needed to create competitive advantage? How factors in the external environment affect the competitiveness of the business? 1.1 The concept of strategy Business strategy is the overall strategies of business identifying goals and direction in a long period of or 10 years, and be thoroughly grasped in all business activities of enterprises to ensure sustainable development of enterprises Business strategy only outline the long-term orientation, but in practice business have to make the combination of strategic objectives with the goals in specific situations, a combination of strategy and tactics, between short and long term From that ensures business efficiency and overcome the bias caused by strategy All important decisions in the process of building, decision, implementation and testing, assessment and adjustment strategy must focus on the highest leaders of the business This ensures the accuracy of long-term decisions, for the confidentiality of information Business strategy is always built on the basis of comparative advantage This requires in formulation process, the enterprise must correctly assess their current status of production and business to find out the strengths, weaknesses and regularly review the internal factors when implementing strategy Business strategy first and foremost, is built for business, specialized business area and the traditional strengths of the enterprise This puts companies in the situation to build, to choose 1.2 The role of strategy Business strategy plays an important role in the process of the company's existence anddevelopment Strategy is a tool to summarize all the long-term goals of the company Business strategy plays an important role in the process of the company's existence and development Strategy is a tool to summarize all the longterm goals of the company The company's goal is a specific purpose that the company wants to achieve in the course of business Specifically, through all the strategic documents of the company to help members of the company to know where they will come, what they need, what they should This helps the companies to complete the objectives obviously The strategy also contributes to ensuring the consistency and direction of the company's operations In the history of the existence and development, the strong trends of labor allocation in both width and depth, all the works are being done in many different parts That is the specialization which improves performance of the job, however, each department is only care of improving business operations by itself without regard to other departments and the entire companies Therefore, some activities can be an obstacle for others and caused severe impact to the company's objectives The strategy will provide a practical comprehensive and systematic in problem solving, to create synergy of the whole industry and all members of the company From this it goes in one direction is the goal of the company 1.3 The content of strategy Business strategy firstly represents the views and thoughts to exist and develop of business The views of existence and development confirms the role and tasks of the business It answers the question: Enterprise exists for what purposes? In which area businesses exist? And what is the orientation of the enterprise? The basic objectives are: revenue, profit, budget, the average income of workers etc A reasonable objective of the proposed strategy must fit both on the basis of enterprise needs (derived from the requirements of the environment - the opportunity, and the enterprise itself - the problem), and on the basis of what the business might have (potential and resources) Strategic solutions answers the question: How to achieve enterprise's objectives? How to determine the structure of the apparatus? Where to get budget to implement the objectives? How to allocate and manage most effectively? Strategy tools help us answer the question: How achieve enterprise's goals? Business strategy includes three main contents, such as: The point of ideology, objectives, solutions and tools And must meet requirements such as: - Increase the power of the business and gain competitive advantage To achieve this while formulating strategies, enterprises must fully exploit their comparative advantage Ensure the safety business for enterprise Business strategy has to determine the safety zone, business scope and to identify the acceptable levels of risk To meet these requirements enterprise's must conduct research and forecast the business environment in the future The more accurate prediction, the higher rate of safety for enterprise is This requires enterprise's to have an amount of information and specific knowledge - Clearly define the objectives and the basic conditions to achieve the objective - To build reserving and alternating strategies The reason to so is because of ever-changing environment, while strategy is the decision of the future, the reality in the future may differ from the predictions of the strategy - To combine the opportunity and maturity That means a business strategy is built and implemented with the right times Even a perfect strategy will be meaningless if it is set out when the opportunity has passed - The ways of business: The mission of the business impacts the objectives of strategy Business strategy have to be developed and implemented base on the policy of the business, and must focus on the implementation of the supreme goal of the business - Defining the enterprise's business strategy must also be based on the capacity of the enterprise, because it it relates to the feasibility of the strategy Business strategies are only implemented on the basis of what the business might have It is the capacity of enterprises on the capital, people and technology - The main elements of the business environment: in the current conditions of competition, business activities of enterprises are depending more and more closely on the environment Business decisions not only based on their qualifications but must consider the relationships between environmental impact and businesses themselves - Customers are the basis of survival of the business, so is crucial to the business strategy of the enterprises In order to develop business strategy, enterprises have to research the number of customers for its products, tastes and income of customers On that basis, enterprises will segment the market and build targets to meet market needs, sales to be achieved, adjust the list and sizes of products etc - The competition: Every business has competitors While building the business strategy, strategic planner must also study and compare the performance of the business with the competitors to find out the advantages, and make full use of those advantages LOGISTIC 2010 35 11% 2.5 8% (Source: VIETTRUST JSC, 2011) Figure 6: The BCG Matrix of VIETTRUST JSC with two division through INDUSTRY SALES GROWTH RATE (percentage) year period 2008-2010 High RELATIVE MARKET SHARE POSITION Medium 1.0 0.5 Low High +50 Medium Low -50 As we can see on the BCG matrix, TONMAT division located in the STARS, which means the division has strong growth potential It seems that TONMAT division was dominated market share in the period 2008 - 2010 In fact, although the market share of TONMAT division was decreased, its the revenue increased significantly due to the strong development of the market In addition, the competitors of TONMAT division has increasing in recent years Logistics division is located in the Question Marks and began to develop, indicating a need for greater investment to help LOGISTIC division to move into the STARS 43 CHAPTER III SELECTION OF BUSINESS STRATEGY FOR VIETTRUST JSC IN THE PERIOD 2011 – 2020 3.1 Oriented development Market growths are good If it is in Taiwan to 80% who use 3-layers soundproof and heat-resistant in Vietnam are currently only 8% used the roof base on three layers soundproof and heat-resistant 3.2 Objective of VIETTRUST JSC VIETTRUST JSC goal of becoming a private corporation in 2020 While ensuring maximum benefits to employees, shareholders and consumers 3.3 Generate strategy 3.3.1 EFE Matrix of VIETTRUST JSC According to the analysis of external environment of VIETTRUST JSC above, we have EFE matrix as follows: Table 17: EFE Matrix No Major external factors Importance Weight Total Weight Tax reform 0.1 0.4 Lower rate 0.1 0.4 Stabilizing the exchange rate 0.1 0.3 Technological change 0.1 0.2 Demographic changes in family structure 0.1 0.3 Market after downturn cyclical 0.1 0.4 Competition intensifies 0.1 0.4 44 Consumer cultural change 0.1 0.3 Regional factors 0.1 0.3 10 Degree of international integration 0.1 0.3 Total: 3.3 With the total mark of 3.3, VIETTRUST JSC is having rather good reactions to opportunities and challenges from external environment 3.3.2 IFE Matrix of VIETTRUST JSC VIETTRUST JSC strengths and weaknesses are put into the following matrix of internal factors evaluation Table 18: IFE Matrix No Major internal factors Importance Weight Total Reduce breakeven 0.15 Weight 0.6 Increase product life and reduce the rate of 0.1 0.3 errors Increase the productivity of each worker 0.1 0.3 Restructuring mechanism, helping to make 0.1 0.3 0.1 0.4 0.09 0.18 0.09 0.09 appropriate decisions After-sales services better than competitors in the industry Budget for R & D investment increased to 80 billion in the year help improve the image, design and quality of publications Ratio of debt / increasing capital 45 Putting the new factory into production to 0.09 0.09 0.09 0.09 0.09 0.36 help reduce input costs by 20% Reduce the number of managers and workers from 100 to 80 10 Reduce product price Total: 2.71 With the total mark of 2.71, VIETTRUST JSC has much strength in the respect of internal factors though there are still weaknesses 3.3.1 IE Matrix of VIETTRUST JSC From the two tables above, we have the I.E Matrix as follows: THE MARK OF IFE Strong Medium 3.0-4.0 2.0 - 2.9 Weak 1.0 - 1.9 High THE MARK OF EFE 3.0 - 4.0 Medium 2.0 - 2.9 Low 1.0 - 1.9 The matrix of internal and external factors shows that appropriate strategy for VIETTRUST JSC is focus growth (market penetration, market development, product development) 46 3.3.4 SWOT matrix of VIETTRUST JSC From the aforesaid analysis, we have the following SWOT matrix: SWOT Matrix Opportunities ( O) Strengths ( S) Threats ( T) O1: Stable economy and T1: Possibility to lag politics, developing behind in attracting science and technology human resources of good O2: Potential market quality due to a great O3: There are many State number of competitors preferential policies for T2: Fast increasing the industry number of competitors O4: Consumer demand T3: Inflation and global towards more quality economic crisis in 2009 products affect costs O5 Pressures from customers, suppliers, substitution products are not high SO STRATEGIES ST STRATEGIES S1: The first trade mark in S1+S2+ O1+O2+O3+O4: S1, S2 + T1, T2: market and most popular Building more factory, Introduction of new company in the recent expand local business => products, meet more needs years Market Development of customers S2: Have a good image to Strategy => Diversification of consumers S2+S4+ O2+O4: business strategy 47 S3: Have products with Devoloping new high quality products S4: Flexible in financial matters Weaknesses ( W) WO STRATEGIES WT STRATEGIES W1: Workers not yet have W1,W2,W3 + O1, O2, W1, W3, W4 + T1, T2, high skills; management O3, O4: Improve the T3, T4: staff has not yet reached organization and training Joint venture with foreign desired qualifications of human resources => partners to implement the W2: Slowly in R&DS and Enhance competitiveness project => Joint venture strategy investment to advanced Strategy machinery and technology W1: Workers not yet have high skills; management staff has not yet reached desired qualifications 3.4 Selecting strategies for VIETTRUST Through analysis and combining elements of the SWOT matrix, there are strategies for VIETTRUST JSC to 2020 as bellow: 3.4.1 Differentiation strategy With stable and good potential market VIETTRUST JSC has make more R&D to increasing range of products, not only 3-layer soundproof and heat resistant 48 roof are more products with same character Depends on capital they can increasing invest to TONMAT Logistics to improve abilities transportation part 3.4.2 Market development strategy VIETTRUST JSC are first company on this market, they have the trust and loyalty of customers So they need to expand the area of operation, at the northern and central provinces of Vietnam 3.4.3 Enhance competitiveness strategy 3-layers soundproof and heat resistant is developing with greater and greater demand but workers are not yet skillful enough Science and technology is developing but VIETTRUST JSC not yet invests a lot in advanced machinery and technologies to meet the environmental requirements for full automation The capacility of analysis, making plans to effectively use capital is not high In oder to limit these weaknesses and take advantage of opportunities, it takes a lot of time 3.4.4 Joint venture Strategy Joint ventures with foreign partners and to build new factory in Central and South of Vietnam The joint ventures with foreign companies will help VIETTRUST JSC increase management and leadership skill more successful 3.4.5 Selecting Strategy for VIETTRUST JSC Based on the criteria by Board of Directors has determined, based parameters evaluated elements inside, outside, model SWOT Matrix, the authors have table as follows: Factors Gain Risk Expense Appropriate Time bound Rate 0.2 0.3 0.2 0.2 0.1 Market development Strategy 4 1.2 0.8 0.6 0.5 Enhance competitiveness Strategy 4 3 49 0.8 0.9 0.8 0.6 0.3 Diversify business Strategy 2 0.6 0.4 0.6 0.4 Joint venture Strategy 5 0.8 0.6 0.4 0.5 Total marks 4.1 3.4 3.3 Thus VIETTRUST JSC should give priority to market development strategy in period 2011-2016: Expanding geographically: expanding network of dealers and distributors to South of Vietnam Even possible to open more factories in the neighboring countries like Laos and Cambodia Reaching into new market segments: Create new products based on technology that VIETTRUST JSC are And that's specific factories, workers, raw material production (steel and polyurethane) Strategy priority no.2 is enhance competitiveness strategy, in this strategy the company should revise the structure to improve its competitive position in comparison with other competitors 3.5 Strategic solutions To develop with the current opportunities and threats, VIETTRUST JSC needs to use strengths to take advantage of the opportunities 3.5.1 Human resources solutions To provide training courses to improve workers’ skills and qualifications To provide refreshment courses on management quality and operation improvement To build up the company a learning organization with an open working atmosphere to create a good working environment to attract and maintain talented staff To enhance capacities of staff, from management level to workers so that they can directly import from the stage, to transportation, manufacturing, sales and after sales operation 50 3.5.2 Financial solutions To focus on capital sources, efficiency of capital sources spending To make plans for expenditures, and effective circulation of cash To strictly manage over input costs, corporate management costs in order to push up turnover for more profits 3.5.3 Marketing solutions Create marketing department to make marketing operation become more professional Marketing activities should always be a step forwards The acknowledgement and making use of this concept is of extreme importance, especially for big investments activities such as the building new factory to expand local area of business of VIETTRUST JSC To ensure sufficient conditions and sources for marketing management at all levels in the professional and modern manner To regularly evaluate the efficiency of marketing management in order to find out strengths to develop and weaknesses to overcome To carry out market studies in the whole country To study the population, social issues, geographical characteristics, habits, traditions, economic characteristics and development tendency of each locality To make short-term and long-term financial and operation plans 3.5.4 Investment solutions Further investment in manufactoring machine systems Additional investment in computer systems, software, in order to help expanding business area Investment in building new factory in areas such as Southern Vietnam or neighboring countries like Laos, Cambodia 51 3.5.5 Organization solutions Establish more professional working team, in order to help the CEO reduce unnecessary things Establish internal audit department 3.6 The road map for implement strategy of VIETTRUST JSC Table 19: The road map for implement strategy of VIETTRUST JSC Strategy Goal - Continue to develop heat and sound Timeline 2011 insulation roof and panel products to maintain the largest market share in the North and Central - Roofing and TONMAT Panel Market development TONMAT sales objectives reach $ 10 strategy million in 2011 - Construction of Roofing and Panel Factory in Da Nang city to meet the market needs of Central and South Enhance competitiveness strategy Central - Scaling LOGISTICS services reach $ 2012 million target in 2012 Continue to develop markets and 2011 increase market share to 65% -70% Keep the first rank in heat and sound insulated panel and roofing market, in Joint venture Strategy the Northern and Central regions - Invest in research and provide market Differentiation strategy products using heat and soundinsulated brick wall with "COOL BRICK" brand 52 2012 - Invest in research and manufacture of 2012 chemicals and chemical blending technology to provide enterprises in Vietnam for use as heat and sound insulation material, gradually replacing imported raw materials - Investment in construction of the 2012 most advanced and modern factories, production lines, machinery and manufacturing equipment in the northern region to produce zinc plated roof and colour plated roof products, to gain the ability to compete with imported products with the brand EUROTON - Expand the investment in real estate 2014 sector by establishing the company with the brand LAND TONMAT follows the form of joint stock companies that TONMAT account for Differentiation strategy the dominant share - Establish financial companies Become a private corporate TONMAT with brand TONMAT FINANCE Become a private business group multisectoral mandate based on the strength on the field of thermal and sound insulation is key to the development 53 2015 2020 CONCLUSIONS Along with the growing international integration, Vietnam market is growing very fast and strong The investment in these new industries or expansion of production is a right step which suits the trend of the market VIETTRUST JSC board of directors had the vision, mission and orientation to establish a corporation in 2020 It's a long and difficult way But with the orientation for development, the enterprise has identified their target in the future TONMAT roofing is actually very useful in tropical countries like Vietnam where the rain can fall for several days or very hot in summer season Base on the properties of material like polyurethane, VIETTRUST JSC can research and produce many more products Together with the development of Vietnam, VIETTRUST JSC needs a continuously investment and development to maintain its leading position in this industry Along with the desire to become in 2020 the group now have strategic VIETTRUST JSC personnel for 10 years they can achieve the goals set out Group would like to thank the teachers, the ETC center, Griggs University and everyone were helps our group that we can complete this course As well as providing all the knowledge to fully contribute to society itself and grow 54 REFERENCES Strategic management concept and case (2006), Fred R David, Statistical Publishing House Strategic management concept and case, twelfth edition, Fred R David Michael E Porter (2008), Competition Strategies, Youth Publishing House Garry D Smith, Danny R Arnold, Bobby G Bizzell (2003), Business Strategies and Tactics, Statistics Publishing House Rudolf Grunig and Richard Kuhn (2003), Building Strategy, Science and Technology Publishing House The World Fact Book, provides information on the history, people, government, economy, geography, communications, transportation, military, and transnational issues for 266 world entities - Websites: http://www.vnexpress.com http://tonmat.com.vn http://www.adb.com 55 ...ACKNOWLEDGMENTS We would like to express our thankfulness to the lecturers, facilitators and experts of the GaMBA between Griggs University and Education Training Center (ETC) for your enthusiastic provision