Luận văn thạc sĩ quản trị kinh doanh quốc tế MBA (200)

2011 | GLOBAL ADVANCED MBA PROGRAM (X0110) | Group No1 CAPSTONE PROJECT DELTA CIVIL AND INDUSTRIAL CONTRUCTION COMPANY BUSINESS STRATEGY 2011 - 2015 Group - GaMBA X0110 Nguyen Thị Hien Minh Nguyen Thị Oanh Nguyen Thi Luong Phong Nguyen Tien Thanh HANOI 2011 GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CONTENT EXECUTIVE SUMMARY PREFACE Overview global and Vietnam economic Reason of choosing this project Objective and Method of this project 10 Structure of capstone project 10 CHAPTER BASIC STRATEGIC THEORY 11 Business strategy concept and classification 11 1.1 Strategy - Business strategy concept 11 1.2 Level of business strategies 11 Strategic Management Process 12 2.1.Defining Strategy Management 12 2.2 Strategic Management Process 12 2.3 Applying the matrixs to analyze 14 2.3.1 The macro environment - PEST Model 14 2.3.2 Porter’s Five - Forces Model 15 2.3.3 The Competitive Profile Matrix (CPM) 15 2.3.4 The Internal Factor Evaluation (IFE) Matrix 16 2.3.5 The Strategy Position and Action Evaluation (SPACE) Matrix 16 2.3.6 The Strengths - Weaknesses - Opportunities - Threats (SWOT) Matrix 17 2.3.7 The Quantitative Strategy Planning Matrix (QSPM) 18 CHAPTER CURRENT SITUATION OF DELTA CIVIL AND INDUSTRIAL CONSTRUCTION COMPANY Introduction 20 1.1 History 20 1.2 Organizational structure 21 1.3.Vision - Mission - Objectives 21 1.4 Business function 22 1.5 Product 22 1.6 Situation and business performance of companies 23 Business situation analysis and strategy choices 25 2.1 External environment 25 2.1.1 Macro environment 25 2.1.2 Industrial Environment 32 2.1.3 The direct competitors 37 2.2 Internal environment analysis 41 2.2.1 The Delta business situation 41 2.2.2 Environmental assessment matrix 51 CHAPTER PROPOSE STRATEGY AND SOLUTION 55 3.1 Analyze company’s business by SWOT, SPACE, BCG matrix 55 3.1.1 SWOT matrix analysis 3.1.2 SPACE matrix analysis 3.2 Strategical Selection 3.2.1 QSPM matrix 3.2.2 Selection of development strategy for Delta Co from 2011-2015 3.3 Solutions 3.3.1 Ranks No in the underground construction scale 3.3.2 Make sure the objective of increasing annual revenues > 15% 55 56 57 58 59 60 60 60 3.4 Roadmap 3.4.1 Research, product development and advanced technology 3.4.2 Management, operation, corporation and controlling system 3.4.3 Marketing developing 3.4.4 Investment 3.4.5 Reform of management and administrative systems of the company: 3.5 Recommendations CONCLUSION 67 REFERENCE 68 LIST OF TABLE AND FIGURE Figure - Cross - sectional construction site model Figure - Ground piles, barette piles, diaphragm wall Figure 3- Barrette piles, diaphragm piles, leading wall Figure - Leading wall construction Table - Competitors’s information of Delta Company Table - Reports of production and business results in the last 03 years 10 Table - Accounting Balance Sheet 10 Table - The financial ratios 11 61 61 62 63 63 64 66 SUMMARY EXECUTIVE Delta civil construction and industry company was founded in 1993 by a group of construction university in Hanoi The objective is teaching, research, development and application of building products in practice Business scope of the company is civil construction, industrial, transportation works, works of urban infrastructure and interior and exterior works depend on the construction industry Especially the underground construction of the big ones After 18 years, the company focused on construction of underground section and has achieved highly as Kangnam building - 70 floors, Bitexco building - 68 storey tower, Vincom twin Tower - 191 Ba Trieu, now it is considered one of the leading companies in Vietnam in the construction of underground section During 18 years working with the executive leadership, the company has grown from a small team member to big team with many engineers who are highly qualified Company has developed stable for 18 years, please see data business results in 03 recently years: Yearly value 2008 2009 2010 Revenue 1.264,9 1.856,4 2.109,0 Net revenue 1.006,6 1.234,4 1.476,6 Cost of good 935,6 1.120,2 1.339,0 Gross profit 71,0 114,2 137,6 Revenues from financial activities 0,9 2,2 0,9 Financial expenses 1,4 2,5 Enterprise Cost Management 10,8 12,7 19,7 Income before tax 59,7 103,7 116,4 Income Tax 16,7 25,9 29,1 Net income 43,0 77,8 87,3 Interest expenses (allocated to Z works) 36,1 24,0 58,3 It is not easy to maintain leading position in the construction sector in Indicators economic conditions of Vietnam and the world, the company need to have appropriate and effective strategies The our group with the knowledge which we have learned to build strategy of Delta company during 2011 - 2015 based on the actual situation of the company's business combined with the impact external factors we identify areas strengths, weaknesses, opportunities and threats, so as to work out appropriate strategies for the development of the company By using the matrix analysis, we proposed 03 strategies: The first strategy : Focus on developing the main product The second strategy: Become a general contractor The third strategy: Become a corporate company After analyzing each strategy to find the advantages and difficulties, our group decided to choose the first strategy with the following objectives: - Investment in research and advanced technology in the underground construction and successful application - Ranking No on the domestic market in underground buildings sector - Growth in output, revenue and profits more than 15% To implement the strategy, we offer solutions: * Keep position in the construction of an underground collage Continuing to invest in research and advanced technology of underground construction -piles to find alternative materials to ensure quality and cost savings * Ensure annual profit growth > 15% - Marketing strategy : market diversification - Price strategy: reform of institutions and administrative leaders to limit unnecessary costs, improve their professional capabilities and management leadership and expertise, using the maximum power equipment machinery, increasing labor productivity, using appropriate financial capacity to optimize use of funds PREFACE Overview global and Vietnam economic Since 2000s, world economy status has experienced many fluctuations, started with the bankrupt of WorldCom in 2003, the 65 billion USD swindle of Madoff in 2005, and the biggest incident is American crisis crunch in 2007 and global economy crisis in 2008-2009 In 2010, although the effect of the world economy crisis is temporarily reduced but there are still many fluctuations, for example, that is Greece 's public debt crisis, European countries such as Spain, Italy and Portugal are also facing with the same risk Chinese property bubbles Not stopping there, the public debt situation in America-the greatest economy in the world has great impact on the global economy Despite the raising in public debt ceiling ( on 08/02/2011) and financial cutbacks, the U.S stock market and the world is still falling Bad reaction in the stock market and economic problems of the U.S public debt is clearly a concerned sign for the global economy, especially the situation in Europe when public debt bond yields in Spain, Italy to increase at a record level In financial institutions, securities markets is reflected most clearly the volatility of the economy, so the understanding of the economic situation is very important, since it helps the investors make right decisions Vietnam, which is in the group of developing countries, although not directly affected by the collapse of world financial system, but after joining the WTO and becoming an inseparable part of the world economy, Vietnam still badly suffers the indirect consequences of economic downturn Every change in Vietnam's economy in recent years is closely correlated with world economic fluctuations Vietnam's stock market is always in parallel with changes in the domestic and foreign economy Fund is the main engine of economic growth Despite being affected by the global economy, Vietnam was identified as a country with political stability, economic potential and abundant human resources so it will continue to attract investment However, Vietnam also needs to solve disadvantages such as changes in regulations, government policies, limited skilled labor and competitiveness in the region is not high Vietnam's economy also has fluctuated in recent years with inflation increased significantly and gold prices rised Economic growth in first half 2011 slower than the same period in 2010, in which the investment area most affected Tighten fiscal policy was used to curb inflation and stabilize the economy Therefore it affected the real estate market, made the real estate market downturn, reduced public investment to make the construction market in Vietnam have tended to settle To make companies survive and grow in today economic conditions, the leaders of the 10 3.1 Analyze company’s business by SWOT, SPACE, BCG matrix: 3.1.1 SWOT matrix analysis From the conditions outside and inside of company, we overview the company through the SWOT, which helped us to mention the strategy for the development of the company during the period 2011 to 2015 Table 3.1 – SWOT Matrix 3.1.2 SPACE matrix analysis 57 SPACE Matrix Financial Position (FP) Earnings on invested capital in 2008 and 2009 is 5%, in 2010 only 4% Leverage: debt/capital index increased from 0.88 in 2008 and 0.93 in 2010, but remained 10% Top quality products, confirmed the quality by big constructions Customer loyalty Advanced digital technology, combined with applied research center - Hanoi Construction University Controling suppliers ( 400 suppliers) Total Stable Position (SP) Inflation, inflation is expected to rise in 2011 was 12.6% Changing technology Financial stability, growing demand for national reconstruction Competitive pressure , market compells many companies to penetrate Competitite price Total Industry Position (IP) Potential growth, currently deposited Potential profit Technological know-how The scale of capital Barriers to market entry, there are regulations but not too hard Total Table 3.2 – SPACE Matrix Average of FP = 4.4 Average of SP = -2.8 Average of CP = -2.2 Average of IP 24/6 = 58 Score 4 22 -2 -2 -2 -2 -3 -11 -3 -3 -2 -3 -3 -14 20 By definition, the CP and IP value in the SPACE matrix are plotted on the X axis FP and SP dimensions of the model are plotted on the Y axis From SPACE matrix, we can determind type of strategy: aggressive After analysis by SPACE matrix, Delta is a strong financial and gained competitive advantage in developing construction is relatively the industry stable This is the picture offensive Figure 3.1- SPACE Matrix Cons Cotec Company is the largest company in 2010 by Vietnam Vote Vnr.500 business results six months of 2011 (revenue: 1,948 billions, 149 billions of gross profit) (resource:http://www.coteccons.vn) Delta Company has business results in months of 2011 (revenue: 1,711 billions and 156 billions of gross profit) Through analysis data in section 2.13 – analysis competitors and result in months of 2011 showed that Delta should focus on underground collage is the best strategy 3.2 Strategical Selection: 59 3.2.1 QSPM matrix 60 Table 3.3 - Matrix QSPM Planning for the development of enterprises, there are many strategies outlined, the strategy chosen to achieve high efficiency for businesses, let's analyze the matrix QSPM After analysis by QSPM matrix, the first strategy has score more than second and third strategy 3.2.2 Selection of development strategy for Delta Co from 2011-2015 After adjustment for factors outside of the company and the situation of Delta Co., our group has identified opportunities, threats, strengths and weaknesses of the company With the combination of vision, mission and objectives of the company, our team develops the basic strategy for the Delta Co from 2011 to 2015 * Analysis and recommendation stratergy for the company First stratergy: Development of the Delta’s main products (underground construction) Second stratergy: Development of Delta Co to become a general constractor Third stratergy: Development of Delta Co to become a corporation (investor) * In the proposed strategy for the development of Delta Co in the period 2011 2015, we found that the biggest challenge for the company is how to change and reform to match and respond with the development strategy, the Delta Co should the following: - The company must change not only adjust To be awared of the production process is an innovative performance in general, not just a matter of any division Changes shoud be consistent from top to bottom, the identification and direction from senior levels of the company - To raise the standard values and beliefs of employees in enterprises - To break down organizational boundaries rather than reinforce it causes people feeling not in peace, not challenging and not pleasant If you want to be smooth not reform anymore - Anticipation of obstacles and barriers to overcome them is the responsibility of the company management levels 61 - Requiring the direct participation of business leaders, not only hand over the responsibility for lower levels since the work of leadership has all of its implications Through the above analysis, we decided to choose the first strategy with our objectives: - Investment in research and advanced technology in the underground construction and successful application - Rank number on the domestic market of products of underground buildings - Growth in output, revenue and profits more than 15% 3.3 Solutions 3.3.1 Ranks No in the underground construction scale Investment in advanced technology research in the construction of underground Currently: - Colaboration with Research Centers and High-tech Applications of the University of Contrustion in Hanoi - Establishment of subsidiaries in the field of research and development in 2010 and has invested billion Future: - Continued investment in research and development, it is proposed to invest increasingly from 2011 - 2015 in the machinery and technology for human development (detailed in the itinerary) Objectives: - Find products with other materials cheaper while ensuring functionality, high strength, load, - Look at the construction methods provide highly effective 3.3.2 Make sure the objective of increasing annual revenues > 15% 3.3.2.1 Market Development Strategy 62 - Increasing market share in particular focusing on markets in Hanoi The Prime Minister has approved the planning, and increase state investment, the economic sectors in the construction industry in 2030 - Development of pile product into the field of construction such as transport, roads and bridges (this work is primarily invested by the state budget) 3.3.2.2 Reasonable price strategy - Although the product is different in the current period but this will be more competitive To be able to achieve earnings growth above 15%, the company needs to reform the leadership and management to achieve high efficiency, rational use of power machinery to create substeinable products - Improving the leadership and administrative changes from First ship operating model to Crab model, equally division of tasks and responsibility for each department Set up internal control systems, information systems, operationnal relations between divisions Reforming gradually, implementing effectively the quality management system ISO 9001 in the company - Capacity building of the leadership team and staff with regards to professional and management - Planning to maximum use of power equipment, increasing of labor productivity, couplings progress of construction plans, use of machinery and equipment between the sites to avoid the machine does not use and has to move away again and again increase the cost of shipping and installation - Finance: drafting a plan to use capital periodic weekly, monthly, quarterly and use the funds to reinvest every day to improve the efficiency of capital use It is also needed to efficiently use of funds advanced by the investors, suppliers, and affiliates and subcontractors 3.4 Roadmap 3.4.1 Research, product development and advanced technology - Investment Funds: Year Total fund (Unit: bil VND) 2011 15 2012 20 63 2013 25 2014 30 2015 35 Equipment Human resource 12 16 20 25 30 Table 3.4 – Plan to develop and research new product of Delta company - Equipment: purchase of equipment from the leading country in the underground collage construction techniques to equip the laboratory under estimated cost - Applying new technology: promoting the study of new materials and technology applications inconstruction techniques subsidiaries and Research Center of Hanoi Construction University - Manpower: send the engineers from department of research and development to participate in courses abroad to learn the scientific and technical progress 3.4.2 Management, operation, corporation and controlling system With the offensive strategy of the Delta to avoid the mistakes need to: Building and improving the management regulations, administration and contril system: - Applying effective management procedures ISO 9001 – 2008, improving the organizational structure - Inplementation survey, control, internal audit, creating fortum for improving comminucation process, evaluating individual performance and operation working of each department within the company - Improving regulation and the implementation operation in manufacturing management process - Construction sites and offices to have cooperate better for using effective of human resource, machinery, equipment, materials and techniques and mobilize appropriate resources outsourcing For each construction site, model with organazational structure consists of a chief of the construction site or more field commanders comply with each item or task, with a field commander of the apparatus which is assisting the commander and supervisory structure of the company including acounting and statistics, warehouse keepers, technicians, supervisors and guards It is flexible when the company has 64 many of the construction sites, many commanders will be adjusted to draw the most appropriate commander to other sites and vice versa when the transfer is notsuitable and low performance, while ensuring the control system Organization training courses and focus on quality personnel Application of information technology and other computer softwares, such as personnel management, accounting and estimates construction from the office to the construction site 3.4.3 Marketing developing * First stage: focus on Hanoi market - Planning to expand Hanoi in the future and have approve by Prime Ministry - Have many advantages in management, supervisory, limited loss asset and other resources - Have good relationship and reputation with investors who have constructions the Delta are - Have good suppliers - Saving cost to transfer equipment and machines from construction site to other sites compare with other markets * Second stage: expanding market to Ho Chi Minh and other provinces surrounding Hanoi - According to Implementation value by area market in 2008, 2009 and 2010 - Marketing plan (have contract with investors by competitive bidding, choosing with each customers and customers group) - Vietnam construction forecast and industry cycle life (2.1.2 Industrial Environment) Marketing strategy to expand market in Ho Chi Minh and other cities (level and level 2) base on government policies in each stage It is necessary to expand market in Ho Chi Minh and other cities, it optimizes Delta’s resources (machines, equipments, experiences, technique, ) although it 65 takes cost more than construction in Hanoi Dellta need improve management system to catch company’s strategy 3.4.4 Investment Now the company focuses on projects which create benefit more than company’s products, Delta constributes capital by it’s products Business construction equipments and materials to control input factors to avoid change of market 3.4.5 Reform of management and administrative systems of the company - Management and administrative reform of the company need to have a process and perform specific tasks in each phase The following chart will be an overview of the implementation phases  Phase I Assessment of the Status STAFF STAFF REVIEW REVIEW AND AND RESOLVE ISSUES RESOLVE ISSUES EMERGENCY EMERGENCY REVIEW REVIEW AND AND RESOLUTION RESOLUTION OF OF THE WORK THE WORK PHASE II Find out why -Identify the problem PHASE III Solutions and implementation  ISSUES DETERMINATIO N HANDLING HANDLING (Reward (Reward and and discipline, resolve discipline, resolve all all issues and problems) issues and problems) DRAFT DRAFT OF OF THE THE LEGAL LEGAL DOCUMENTS DOCUMENTS    TRAINING, TRAINING, VMONITOR, VMONITOR, EVALUATION EVALUATION  Figure 3.2 - The phases and steps to implement reforms 66 - For the phase (I), the resolution of the backlog to be addressed now to meet with current job requirements After identifying the true cause, the key problem (step 3) will be an ultimate and long-term solution Similarly, phase (II) only deal with emergency cases - For each phase, we further subdivided into different implement levels base on the unit level, functional level with "the Reform Committee" of the company (eg the review of the work, list of current job that they are expected to implement, any existing difficulty at a certain point and their solution before the Reform Com-mittee reviewing) Each phase has different techniques and methods of implementation flexibility but it need to be consistent with the actual situation Recruitment process, replacing the needed position, to be carried out in parallel from the stage (I) or in the drafted phase of the legislation - Phase (III) is very important Basically, we find the causes of the problem, determine the correct cause for a new rational solutions In order to determine the correct problem it is needed to have objective views on a variety of angles (ie going through (I) and (II) - At the end of each phase, it is time for summarization and and holding a signature between the groups End of the third stage, we hold a prenary meeting to release the psychological stress - Regularly monitor and capture the psychology of each person for taking a appropriate measures Six-step method on the psychological level will vary according to the above chart STRESS PSYCHOLOGICAL LEVEL normal    67   STAGE ĐỘ DIỄN BIẾN TAÂM Figure 3.3 - Evolution psychological changes during the reform After the upheaval and revolutionary change, there have often been a long period of stability In the stable stage, only small changes, gradual made to reinforce the new strategies and increase consistency between strategy, organizational structure, practices and human factors 3.5 Recommendations * For Company: - Increasing charter capital of the company: to ensure investments of owners increases with the size of the company, the financial indicators consistent with growth, to ensure the interests of other partners (shareholders) in each period - Specific provisions on the distribution of profit after tax: the use of after-tax resources of the company's undistributed to the cost, investment and development, expansion has not been clearly stated in writing may have important disagreements or disputes will occur between members in the company and the company in the future * For the government: - There should be standard quality assessment indicators of products of underground works and buildings - To improve the system of legal documents on construction and construction management - To need a master plan and detailed planning of cities and public planning * For construction sector: - Develop a system of work item shall be applied the price unit for the job, equipment, labor - Develop the system of legal documents and guidances on time when there are a changes and price fluctuations 68 CONCLUSION In any stage, any period of market economy, the strategy is always necessary and indispensable to the production and business activities, the existence and development of enterprises It is also similar to Delta Co., the business strategy has always played an important role in determining survival, the failure of the company Through a system of objectives, key strategic model that identified a whole picture of measures that the company will have to in order to reach the future Today, with the development of global economy, unpredictable fluctuations of the market environment increasingly fierce competition, therefore the planning of business strategy is essential Therefore, businesses in the construction industry as well as other sectors of national economy to have sustainable development is also needed for strategic business properly and always complete business strategy that corresponds with each period Through the business strategy, we develop an action plan in a scientific way, anticipate opportunities and risks may be encountered and the solutions Especially for the Delta Co., working on the construction sector, may face many difficulties and risks in the future The complete business strategy will help company to be able to cope with any situation anywhere, at any time since we want to affirm the Company's position in the marketplace We hope that “the Strategy of Delta Company, period 2010 - 2015" prepared by our team will help the Board of Directors has the overall look, the right mindset in the construction, selection of appropriate strategical business and offer a good solutions to implement strategies All of these will enhance the competitiveness of the Delta Co., and bring the company growing stronger and stronger 69 References: * Vietnamese documents: - State management for economy & business administration in contruction-Pro.Dr Nguyen Van Chon contruction publsishing house asscociate professor - Dr Doan The Tuong – Vietnam institute for building science & Technology (IBST) Tournal of building science and technology - Master Nguyen Van Khanh & Master Tran Nhat Thanh – construction department – univercity of civil engineering - Trang Website: http://www.vnr500.com.vn , http://www.deltacorp.vn - Internal documents, Financial statement of Delta Company * English documents: - Strategic Management (Concept and Cases) – Fredr David – 13th Edition - Marketing Management – Phillip Koler and Kevin Lane Keller – 13th Editio 70 ... limit for the banks such as BIDV, Agribank well as commercial banks such as Military bank and Techcombank Therefore the credit granted by several banks to Delta Co always balance and/or even more