Luận văn thạc sĩ quản trị kinh doanh quốc tế MBA (7)

GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT BUSINESS STRATEGY OF HOANG ANH TECHNOLOGIES JSC IN PERIOD 2011-2015 Group Number: 03 Student’s name: Cao Van Thang Vo Anh Trung Tran Thi Phuong Linh Nguyen Thi Thanh Hang HA NOI - 2011 CONTENTS CONTENTS LIST OF TABLES LIST OF FIGURES The need for research Purpose, scope of the study, applicability Research method 4 Document structure .4 CHAPTER I RATIONALE OF BUSINESS STRATEGY .6 1.1 Concept 1.2 External environment analysis 1.3 Internal environment analysis 11 1.4 Synthetize, evaluate internal and external factors by IE Matrix: .11 1.5 SWOT analysis .12 1.6 Evaluate, select strategies by QSPM Matrix 13 CHAPTER II: BUSINESS SITUATION ANALYSIS 15 2.1 An overview of the process of formation and development of Hoang Anh Technologies JSC 15 2 Results of the company operation from 2008-2010 17 2.3 External environment analysis of Hoang Anh Technologies JSC 18 2.4 Analysis of internal environment of Hoàng Anh Technologies JSC .36 2.5 Synthetize, evaluate internal and external factors by IE matrix: .43 2.6 SWOT analysis .43 CHAPTER III: RECOMMENDATIONS FOR BUSINESS STRATEGY OF COMPANY FROM 2011-2015 .49 3.1 Economic context and problems posed when developing business strategy of the company in period 2011-2015 49 3.2 Vision and mission of Hoang Anh JSC 51 3.3 The recommendations on business strategy of the company 52 3.4 Proposed solutions 58 CONCLUSION .64 LIST OF TABL Table 1.1: IE Matrix 11 Table 1.2: SWOT Matrix 12 Table 2.1: The competitiveness of Hoang Anh Technology JSC and its rivals in the IT industry 29 Table 2.2: The competitiveness of Hoang Anh Technology JSC and its rivals in the Telecommunication industry .33 Table 2.3: Assessment EFE matrix 35 Table 2.4: IFE Matrix 42 Table 2.5: Synthetize, evaluate internal and external factors by IE matrix .43 Table 2.6: SWOT Matrix of Hoang Anh 43 Table 3.1: QSPM matrix 52 Table 3.2: Estimated growth of the business .62 APPENDIX: RESULTS OF COMPANY OPERATION FROM 2008-2010 65 Table 4.1: Balance Sheet at 31/12 Year 2008, 2009, 2010 65 Table 4.2: Income statement at 31/12 year 2008, 2009, 2010 68 Table 4.3: The sum of financial indicators at 31/12 year 2008, 2009, 2010 69 LIST OF FIGURESY Figure 1.1: Strategic management process Figure 1.2: M.Porter’s Five Forces Model 10 Figure 2.1: average return from 2008-2010 of Hoang Anh JSC 16 Figure 2.2: Stock market index VN-Index until 26/10/1011 .26 Figure 2.3: Stock market index HNX-Index until 26/10/1011 26 Figure 2.4: Table showing chain of functional departments of the business .38 INTRODUCTION The need for research A business which wants to develop needs a proper business strategy in the long run In the long term, strategic is the basis for the development, success of the business Information technology and telecommunications is an industry with growth rate is very high, fierce competition Therefore, for the information technology and telecommunications enterprises, business strategy takes an important role Thus, group has decided to choose the topic of business strategy at Hoang Anh Technologies JSC, an information technology and telecommunications company Purpose, scope of the study, applicability The research purpose is through theoretical research on business strategy, assessing the business situation in period 2008-2010 based on studied theories to propose business strategies for the firm in the period 2011 -2015 Group hopes through this research topic, it helps business to have information to evaluate objectively on the status of the enterprise, strengths, weaknesses and an additional basis for assessing the suitability of the company's strategy Research method The study is conducted by studying the theoretical documents presented on the class by teachers, reading materials, through the practical data of Hoang Anh Technologies JSC in the period 2008-2010, macro data, sector index Document structure The structure of this dissertation consists of: Introduction, Chapters and Appendix Chapter I - Rationale for business strategy summarizes the basic theory of business such as Michael Porter's five forces model, SWOT analysis … Chapter II - Business situation analysis, present an overview of Hoang Anh Technologies JSC, results of the company operation for 2008-2010, assess the company’s performance Chapter III - Recommendations on business strategy of the company in 2011-2015, make recommendations on business strategy of the company for this period set in the context of general economic CHAPTER I RATIONALE OF BUSINESS STRATEGY 1.1 Concept 1.1.1 The concept of business strategy According to Fred R.David, business strategy is “the means to achieve longterm goals.” According to strategic management syllabus of Griggs University "strategy is a series of commitments and actions to take to be a competitive advantage by exploiting core competencies in a certain market” 1.1.2 The role of business strategy Business strategy creates a unified direction for all types of business plan Business strategy helps enterprises to realize its purpose, direction, is the guiding principle for all actions of business enterprises Along with changes and rapid development of business environment, the market will always be the opportunities and threats Business strategy helps businesses understand and take advantage of business opportunities, actively seek solutions, overcome dangerous pitfalls of the market Business strategy contributes to improve the efficiency of enterprise resources, strengthen competitive position, and ensure the continuous development and sustainability of long-term business The formulation and implementation strategy create a solid base to work out business policies and decisions in accordance with market fluctuations There are kinds of strategy: functional strategy, business strategy, corporate level strategy Orientation of building strategy may make the difference, low price or a mixture 1.1.3 The process of developing strategies The process of building basic strategies include the following basic steps: Step 1: Environmental Analysis: This includes analyzing the external environment (the general environment, industry environment) and internal environment analysis Step 2: Analysis Combination Step 3: Strategy selection After selecting strategy, company moves to implementation phase and finally, examines and evaluates the strategy implementation to amend or build the new strategy Internal environment Input Strategic meaning Strategic tasks Strategic management process External environmen t Building stratiegies Strategy implementation Strategic actions Busines s level strategy Dynamic competiti on Corpor ation level strategy Merger and Restruc turing Internati onal Strategy Cooper ation Strateg y Company management Leading Strategy Strategy Result Competitive strategies Bảng 1: Quy trình quản trị chiến lược with above-average Sources: Slide lecture Management - Griggs profit Strategic rates Feedback Figure 1.1: Strategic management process Structure and Control Start a business and innovation 1.2 External environment analysis 1.2.1 Analysis of general environment by PESTLE model General environment analysis helps businesses identify and evaluate: Opportunities of the environment in which enterprises can exploit and Threats which enterprises may face Since then, enables enterprises to build business tasks clearly, define long-term feasible goals and design strategies consistent with business objectives It can be used PESTLE model to analyze the general environment This model uses elements: - Political - Economics - Sociocultural (Culture - social) - Technological - Legal - Environment These factors have a direct impact to the economic sectors; they are the external factors of business and industry The industry must be suffered the effects of them as objective factors Businesses must analyze and evaluate the impacts to devise policies and business activities in accordance Political factors: They take important role; represent the way and the extent to which a government influences the economy and a certain business They include the stability of government, labor law, tax policy, tariffs, trade restrictions and even environmental law This factor has an impact on all businesses on a region, regulation factors, laws which can be very powerful influence on survival and development of any other industry When trading on an administrative unit, enterprises must comply with the legal institutional factors in that region Economic factors: the growth rate of the economy creates new demand for the development of the economic, inflation rate affects interest rate, the interest rate of investment, unemployment rate impacts on business hiring and firing workers; exchange rate influences interest rates, fiscal policy, wage control, balance of payments Enterprises should be based on economic factors to decide to invest in sectors and regions Sociocultural factor: each country or region has its cultural values and social factors characteristics, these factors are characteristics of consumers in that area These cultural values are the values create a society, can foster that society develop and exist The cross-cultures of different cultures and countries in changing consumer psychology, lifestyle, and create prospects for the industry Technological factors: this is the kind of factors that have significant influence, directly to the business strategy of enterprises In this era of technological development like storm nowadays, the appearance and changes of new technologies always create opportunities but also many other potential threats to the survival and development of the business Enterprises need strategic application of science and technology in a flexible way to avoid being passive and underdeveloped Legal factors refer to all the laws directly connected to a business/company and its area of activity, including consumer law, antitrust law, discrimination law and health and safety law Environment factors, including factors such as natural resources, environmental pollution, lack of energy Integration factor: beside the basic factors of PESTLE model mentioned above, globalization factor (integration factor) becomes into a macro factor affecting the industry in modern times Globalization is the trend, and this creates opportunities and challenges for businesses, governments in developing production and business 1.2.2 Analysis of sector environment by Michael Porter's Five forces model: According to M.Porter, five forces of competition, within the sector are: (1) the risk of new entrance, (2) the degree of competition among existing firms in the industry, (3) bargaining power of buyers, (4) bargaining power of suppliers; (5) threat of substitutes M.Porter showed that the more powerful these forces being, the more limited ability of existing businesses to raise prices and earn higher profits The tasks set for administrators is aware of opportunities and risks that changes of the forces will bring, from that developing adaptation strategies, shifting the power of one or many competitive forces for their advantage Potential Entrants Rivalry among existing firrms Threat of Substitute Products, Service power of Buyers Figure 1.2: M.Porter’s Five Forces Model Source: Strategic management syllabus, Lê Văn Tâm, p.45 1.2.3 Synthetize, evaluate the impact of external factors on businesses by EFE Matrix: 10 ning Bargaining power of Suppliers build Hoang Anh staff to be able to implement most of the services based on equipment solutions of major IT and telecommunications equipment solution providers, with international quality Service activities of Hoang Anh JSC will be developed both in width, and depth The company will proceed to undertake the entire telecommunications project of VNPT as well as other telecommunications network operators in Vietnam market and regional markets Hoang Anh JSC objective is within the next one or two years, a number of high technical services such as network optimization (RNO), the services on the NGN / IMS, core network, the added value services which currently hire the foreign experts to perform will be perform by Hoang Anh technical staff, to export its products to some experts in the region 3.4.5 Financial solution To enhance the quality of debt management; Reducing the administrative costs (paperwork, meetings) through the application, reducing costs associated with providing products or services on the basis of the principle of ensuring product quality Solution of cutting unnecessary administrative costs are consistent with macro-economic context, this factor requires enterprises to implement solutions to reduce prices The reduction of administrative costs is also consistent with the implementation of production processes under CMMI standards (implementation of this process will enable the production processes of the enterprise is standardized, organizations reasonable than) Focus on improving the efficiency of assets and capital for production; Increase charter capital (estimated to 100 billion VND) 3.5 Implementation schedule Period 2011-2012 Implementation of financial solutions for debt management, reduce unreasonable costs in order to lower prices, cost savings in terms of inflation, macroeconomic is in difficulty Implementing management quality process according to CMMI standard to improve product quality Investment in human resource training in the form of training to gradually penetrate new markets such as processing software for export, and expert service of telecommunications, building factories for production of telecommunications equipment, creating new road for the company Period 2013-2015 Based on the results of period 2011-2012, perform the development of new markets such as processing software for export, and expert service of telecommunications, creating new road for the company 3.6 Some expected results from deploying strategy It is expected that strategy deployment will bring the expected results with the following criteria: Table 3.2: Estimated growth of the business Conten No t 2011 2012 2013 2014 2015 Growth Growth Growth Growth Growth 1% 5% 8% 15% 25% 93,469 98,142 105,994 121,893 152,366 9,346 9,814 10,599 12,189 15,236 Sales of goods and services Gross profit from sales and services Unit: billion VND CONCLUSION With Vietnam's integration deeply into the world economy and gradually integrate comprehensively, business environment, especially with information technology - telecommunications enterprises, it always has very rapid fluctuations The business strategy is very important for the development of enterprises, especially in the years 2011-2015, beginning with a lot of difficulties for businesses With the knowledge imparted, on the basis of theory, group has analyzed, built business strategy for Hoang Anh technologies JSC in 2011-2015 and proposed to implement The group hopes to provide a good reference for the company in developing its strategy to meet the requirements to overcome the problems and sustainable development, contributing to the prosperity of the company Hà nội, November 2011-Group - X0510 APPENDIX: RESULTS OF COMPANY OPERATION FROM 2008-2010 Table 4.1: Balance Sheet at 31/12 Year 2008, 2009, 2010 BALANCE SHEET Items/Year Assets 31/12/2008 28,367,60 A Current assets 2,116 I Cash and cash equivalents Cash and cash equivalents II Short time financial investment Customer receivables Advance payment 31/12/2010 30,963,99 7,592 1,053,21 34,596,310,2 72 1,157,67 1,009,645,7 1,653 1,053,211,653 6,312 1,157,676,312 12 1,009,645,712 - - - 15,790,92 III Short-term receivables 17,361,55 19,274,243,1 4,751 6,137 24 8,145,612,746 9,712,642,711 10,412,777,482 for 7,645,3 7,648, 8,861,465 suppliers 12,005 913,426 ,642 11,523,46 12,444,76 14,312,421,4 IV Inventories Inventories Provision 31/12/2009 for 5,712 11,523,465,712 5,143 12,444,765,143 36 14,312,421,436 - - - 31,245,300,000 27,773,600,000 24,301,900,000 - - - lowering value of inventories V Other current assets Short-term prepaid expenses Deducted VAT tax Taxes and other receivable accounts from the State Other current assets B Long-term assets I- Long-term receivables Customer receivables Capital from shareholders Internal long-term receivables Other long-term receivables Provision for bad long-term receivables 31,245,30 II Fixed assets 0,000 Tangible fixed assets 27,773,60 0,000 00 31,245,3 00,000 24,301,900,0 27,773, 600,000 24,301,900 ,000 34,717, - Original price 34,717,000,000 - Accumulated depreciation 000,000 34,717,000 ,000 (6,943,4 (10,415,10 (3,471,700,000) 00,000) 0,000) - - - - - - - - - investment Investment in subsidiary - - Leasing Fixed Assets - Original price - Accumulated depreciation Intangible fixed assets - Original price - Accumulated depreciation Costs of construction in progress III Real estate investment - Original price - Accumulated depreciation - Depreciation IV Long-term financial companies Investment in jjoint-venture companies Other long-term investment Provision for impairment of long-term financial investments V Other long-term assets - - - Long-term prepayment Deferred tax assets Other long-term assets 59,612,90 Total assets 2,116 58,737,59 7,592 58,898,210,2 72 Capital 16,742,53 A Liabilities 3,590 I Short-term liabilities Loan and 8,349 16,742,53 3,590 Short-term liabilities Long-term 16,297,76 01 16,297,76 8,349 15,471,972,5 01 7,926,5 86,500 15,471,972,5 7,195, 310,537 7,911,557 ,461 liabilities maturity Payments for suppliers II Long-term liabilities B Capital Capital investment Profit after tax undistributed Total Capital 7,926,586,500 7,195,310,537 8,815,9 7,911,557,461 47,090 9,102,457,812 7,560,415,040 - - - 42,870,368,5 26 42,439,82 9,243 43,426,237,7 71 39,000, 39,000,000,000 000,000 39,000,000,000 3,439, 3,870,368,526 59,612,902,116 829,243 58,737,597,592 4,426,237,771 58,898,210,272 Table 4.2: Income statement at 31/12 year 2008, 2009, 2010 INCOME STATEMENT Item/Year 31/12/2008 2009 Turnover of goods and 80,154,87 services Revenue Deductions 7,455 86,412,754,612 31/12/2010 92,543,549, 746 - Net revenue from sales and services 7,455 Cost of goods sold 92,543,549,74 80,154,87 86,412,754,612 (83,001,546, 8,015,487, -78,908,606,696 759) 7,504,14 9,542,002,98 9,709) Gross profit from sales (72,139,38 and services 746 Revenue from financial 7,916 activities (1,426,78 Financial expenses 5,570) - Of which: Interest expense profit 6,213) from 13 Other profit 14 Profit before tax Current 5,570) 492) 39,175) (1,582,311, 492) (1,347,8 41,145) (1,544,784, 689) (237,5 (513,256, 28,605) 445) 5,375,511, 4,586,43 5,901,650,36 842 8,991 - - - 5,375,511, 842 corporate 4,586,43 8,991 income tax expense 17 Profit after corporate (1,146,6 (1,475,412, 09,748) 590) - - 3,870,368, 526 5,901,650,36 (1,505,14 income tax expense 3,316) 16 Deferred corporate income tax (1,582,311, (1,332,3 (211,54 business activities 11 Other income 12 Other expenses 15 (1,426,78 4,121) Management Cost Net 39,175) (1,001,64 Cost of sales 10 (1,332,3 3,439,82 9,243 4,426,237,77 Table 4.3: The sum of financial indicators at 31/12 year 2008, 2009, 2010 RATIOS SHEET Item/Year 31/12/2008 Liquidity index 2009 31/12/2010 Immediate repayment capacity (time) Current 0.13 0.16 0.13 1.69 1.90 2.24 (time) 0.55 Net working 0.67 0.74 Liquidity ratio (times) Solvency capital (absolute value) Index of activities The average number 11,625,068,526 14,666,229,243 19,124,337,771 of inventory days 58 The average 58 41 37 41 27 (days) 95 The number 99 68 45 42 33 0.02 1.34 0.02 1.47 0.02 1.57 number of collect days Business cycles of days to pay the seller Effective cost management (time) Effective use of assets (times) Debt management indicators Liabilities / Total Liabilities (%) Long-term 28% 28% 26% 0% 0% 0.24 0.20 0.28 68% 64% 75% 2.77 2.44 2.73 0.39 0.38 0.36 19% 20% 4% 8% 6% 5% 10% 8% 9% 10% Liabilities / Capital (%) 0% Ability to pay liabilities (Times) Ability to repay shortterm liabilities (%) Ability to pay interest (times) Financial leverage (time) Interest / Average liabilities (%) 18% Profitability Indicators ROS (%) 5% ROE (%) 9% ROA (%) 6% Gross profit / Net sales (%) 10% Profit before interest and tax / net profit (%) 8% Profit before tax / 7% 8% 5% 6% 12% 18% net profit (%) 7% Profit after tax / Fixed Assets (%) 12% Growth Index Net revenue (absolute value) Revenue 80,154,877,455 Growth (%) Growth in net 92,543,549,746 108% 107% 89% 129% 99% 100% 97% 95% profit (%) Growth total 86,412,754,612 in assets (%) Growth of liabilities (%) Analysis of performance indicators: The number of days of inventory was 41 days which lower than the number of days of inventory - 58 days two years ago In addition, the number of days of receivables was reduced from 41 days to improve the day in 2009 to 28 in 2010 Thus, through the index can see that ensuring inventories (ensuring inputs) was pretty good, it could also maintain regular levels fỏ business activity (at about 28 days) ensuring the effectiveness of capital funding that is not too much inventory Debt management is also impressive as the number of days of receivables was at about 27 days (approximately month), this suggests that although sales grew but maintaining receivables at a stable level Through that, it can assess sales department have had good customers and the reputation in payment This leads to the business cycle reduced from 90 days in two years ago to about 68 days in 2010 The business cycle reduction made faster capital turnover, increased the efficient use of assets The increase in effective property embodied in the efficiency index of assets in 2009 rose at 1:47 to 1:57 in 2010 Capital structure analysis: Enterprises are active in capital nature First, when comparing the structure of capital over assets structure, it may see the entire fixed assets were invested in equity - long-term funds Secondly, over times, short-term debts of the business always remained stable, only payables to suppliers varied, but compared to firm size, the degree of change was small In terms of ratio, debt / total capital rate decreased from 28% in 2009 down to 26% in 2010, so that repayment ability has increased from 64% to 75%, ability to pay interest was increased from 2:44 (2009) to be 2.73 times (2010) Interest/ average loans rate increased 1% compared to two years ago This is understandable when the bank loan interest rates in 2010 also tended to increase more than two years ago However that also can evaluate that this company has been active in capital which will also be a competitive advantage in the future for business as it is less affected by interest rate when it rises Analysis of profitability index: The profitability indicators have generally improved However, it may find that ROA had the most impressive growth ROE in 2010 despite increased 2% compared to 2009 but remained increased 1% compared to 2008 ROA in 2010 increased 2% compared to two years ago Additionally, since ROA is an indicator to reflect the effective use of assets, so an increase in this index shows that businesses have used assets more efficiently, while assets are intrinsic elements of the enterprise An increased ROA demonstrates the intrinsic nature of the business is good and the long-term business growth can be sustained Review: Overall, the profitability indicators show profitability of business was good and capable of sustainable growth with effective use of assets policies Overall assessment of the company’s financial situation: Basically, the financial situation of the business was pretty good Revenues and profits increased over time The use of assets and debt policy were good which led to maintain inventory and receivables reasonable This increased capital turnover, efficient use of assets, improved activeness of cash flow in the business To be more active on the cash flow make the solvency of the business being improved, maintaining short-term debt, reducing the impact of loan and financial costs, contributing to improve profitability of the business REFERENCES  Vietnamese syllabus:  GRIGGS - MBA Program (2010), Human Resource Management, GRIGGS University  Strategic Management, Prof Dr As the world - Dr Nguyen Thanh Liem MSc Tran Huu Hai (2010), Statistics Publisher  Textbook references in foreign languages:  Fred R David (2011), Strategic management - Concept and cases, 13th Edition, Pearson International Edition  Michael E Porter (1998), Competitive Strategy: Techniques for Analyzing Industries and Competitors, 1st ed Free Press  Online:  Vietnamnet: http://vietnamnet.vn  Weekly e-news of Vietnamnet: www.vef.vn  Saigon Economic Times  BBC News: www.bbc.co.uk\vietnamese  Hoa Lac Hi-tech Centre website  Quang Trung Software Industry Center website  Electronic Portal of the Ministry of Information and Communications www.mic.gov.vn  State decisions:  Decision No 1075/QD-BKHDT on 26/7/2011 by Minister of Planning and Investment on IT applications for state statistics to 2015, Decision No 2094/QD-BKH dated 01/12/2010 of Minister of Planning and Investment on IT application plan in the activities of Ministry of Planning and Investment in 2011-2015  Decision No 49/2010/QD-TTg dated 19/7/2010 approved the list of hightech prioritized to invest and develop and the list of high-tech products are encouraged to develop  Decision No 1605/2011/QD-TTg of Prime Minister approved IT applications in state management activities for the period 2011-2015  Decision No 1755/QD-TTg dated 22/9/2010 by Prime Minister approved the project " Bringing Vietnam becomes strong in information technology and communications soon”  Decision No 698/QD-TTg dated 01/06/2009 by Prime Minister approved a master plan to develop IT human resources to year 2015  Decision No 63/QD-TTg dated 13/01/2010 on planning for safe development of national digital information to year 2020 ... Company management Leading Strategy Strategy Result Competitive strategies Bảng 1: Quy trình quản trị chiến lược with above-average Sources: Slide lecture Management - Griggs profit Strategic... power of Buyers Figure 1.2: M.Porter’s Five Forces Model Source: Strategic management syllabus, Lê Văn Tâm, p.45 1.2.3 Synthetize, evaluate the impact of external factors on businesses by EFE Matrix:... in Vietnam are not subject to bear value added tax 2.3.1.2 Economic  General economy Dr Le Dang Doanh, former Director of Institute of Central Economic Management thought that "Vietnam's economy