Luận văn thạc sĩ quản trị kinh doanh quốc tế MBA (266)

CAPSTONE PROJECT REPORT BUILDING BUSINESS STRATEGY OF AN PHAT PLASTIC AND GREEN ENVIRONMENT JOINT STOCK COMPANY - PERIOD 2012-2016 Group 2: Khuc Dinh Dung Nguyen The Vinh Bui Quang Hai Nguyen Hoang Nguyen Xuan Truong Class: GAMBA01.X0710 H A N O I 1 GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE TITLE “BUILDING BUSINESS STRATEGY OF AN PHAT PLASTIC AND GREEN ENVIRONMENT JOINT STOCK COMPANY - PERIOD 20122016” Group Members: Khuc Dinh Dung Nguyen The Vinh Bui Quang Hai Nguyen Hoang Nguyen Xuan Truong Ha Noi, 2011 19th December 2011 To whom it may concern Subject: Comments of An Phat Plastic and Green Environment Joint Stock Company on the project of Group 2, GAMBA01.X0710 Class Griggs University The Research Team have closely followed up the current situation of the organization structure and the business activities of An Phat Plastic and Green Environment JSC to implement the project; The content of "Building business strategy of An Phat Plastic and Green Environment Joint Stock Company - period 2012-2016" project mentions the goals that An Phat JSC is trying to reach, and has high feasibility; The content of the project is excellent For and on behalf of An Phat Plastic and Green Environment JSC Nguyen Le Trung General Director COMMITMENT We, the research team, would like to commit that this Capstone project is our own research which is accomplished thanks to various sources of documents and real situation The Capstone project is not copied from any other available documents We undertake any legal responsibilities for the contents contained within this report Hanoi, December 2011 ACKNOWLEDGEMENT The Research Team would like to express our deep gratitude to: The lecturers of the MBA training program of Griggs University - who provide and share knowledge; Managers and staff of the Centre for Educational Technology and Career Development - Hanoi National University (ETC) - who are enthusiastic and indispensable helpers in the process of learning; The Research Team would also like to thank the Managers and staff of An Phat Plastic and Green Environment Joint Stock Company - who are main supporters in the process of studying about the situation of the Company and create the opportunity, provide the support of time so that members of the group can complete the project Finally, we would like to send the most sincere thanks to families, colleagues and classmates - who are the solid basis of spirit for members of the group during the participation of Griggs University MBA program and the process of completing the Capstone Project "Building business strategy of An Phat Plastic and Green Environment Joint Stock Company - period 2012-2016" TABLE OF CONTENTS Chapter I 1.1 1.1.1 1.1.2 1.2 1.2.1 1.2.2 1.2.2.1 1.2.2.2 1.2.3 1.3 1.3.1 1.3.1.1 1.3.1.2 1.3.1.3 1.3.2 1.3.2.1 1.3.2.2 1.3.3 Chapter II 2.1 2.1.1 2.1.2 2.1.3 2.1.4 2.1.5 2.1.6 2.2 2.2.1 2.2.1.1 2.2.1.2 2.2.1.3 2.2.1.4 PREAMBLE The reason for topic selection Purpose and scope of the study Implementation method Capstone Project Report’s structure THEORY BASIS OVERVIEW OF BUILDING BUSINESS STRATEGY Concept of strategy Role and significance of strategy PROCESS OF BUILDING STRATEGY The enterprise’s vision and mission determination External environment analysis Macro-environment analysis Environmental analysis of industry Internal environment analysis STRATEGY SELECTION AND ANALYSIS TECHNIQUE Analysis and Information collection phase EFE matrix IFE matrix Competitive profile matrix Combination phase SWOT matrix SPACE matrix Strategy Decision and selection phase Page 1 2 3 3 7 10 11 ANALYSIS OF DEVELOPMENT STRATEGY FORMATION BASIC OF AN PHAT PLASTIC AND GREEN ENVIRONMENT JOINT STOCK COMPANY OVERVIEW OF AN PHAT PLASTIC AND GREEN ENVIRONMENT JOINT STOCK COMPANY The Company’s formation and development history Major information of the Company The Company’s organizational structure The company’s human resource structure Business Operating result form 2008 to 2010 Mission and vision EXTERNAL ENVIRONMENT ANALYSIS Macro Environmental analysis Political environment: (P) Economic environment: (E) Social environment: (S) Technological environment: (T) 24 11 12 13 15 16 17 19 21 24 24 25 28 30 31 33 33 33 36 38 39 41 2.2.2 2.2.2.1 2.2.2.2 2.2.2.3 2.2.2.4 2.2.2.5 2.2.3 2.2.3.1 2.2.3.2 2.2.3.3 2.2.3.4 2.3 2.3.1 2.3.1.1 2.3.1.2 2.3.1.3 2.3.1.4 2.3.1.5 2.3.1.6 2.3.1.7 2.3.1.8 2.3.2 2.3.3 2.4 2.4.1 2.4.2 CHAPTE R III 3.1 3.1.1 3.1.2 3.1.3 3.2 3.2.1 3.2.2 3.2.2 Industry environment analysis The potential competitors The current competitors The customer’s power The supplier’s power Substitution products Opportunities and Threats evaluation of An Phat JSC Opportunities and their ranking Threats and their ranking External Factor Evaluation (EFE) matrix of An Phat JSC Competitive Profile Matrix of An Phat INTERNAL ENVIRONMENT ANALYSIS Internal Environment analysis of An Phat JSC Equipment resource, infrastructure capacity The company’s position in industry Technological level Production Management level Marketing activities Trademarks, patent and copyright Human Resource Management activities Finance and Accounting activities Summary of internal environment analysis for An Phat Internal Factor Evaluation (IFE) matrix of An Phat FORMATION AND SELECTION OF THE OPTIMUM STRATEGY FOR AN PHAT SWOT synthesis matrix The optimum strategy selection for An Phat SELECTED STRATEGIES FOR AN PHAT AND IMPLEMENTATION SOLUTIONS DIFFERENTIATION STRATEGY OF PRODUCTS The content of strategy Strategic solutions Strategic Road map COST LEADERSHIP STRATEGY The content of strategy Strategic solutions Road map CONCLUSION REFERENCES APPENDIXES 43 43 43 44 45 46 48 48 48 49 50 51 51 51 52 53 53 59 60 61 61 62 63 64 64 67 70 70 70 70 71 74 74 74 75 79 80 81 LIST OF ABBREVIATIONS In this document, the abbreviations are interpreted as follows: An Phat An Phat Plastic and Green Environment Joint Stock Company EFE External Factors Evaluation IFE Internal Factors Evaluation QSPM Quantitative Strategic Planning Matrix HDPE High-Density Polyethylene LDPE Low-Density Polyethylene PP Polypropylene PE Polyethylene PVC Polyvinyl chloride WTO World Trade Organization FDI Foreign Direct Investment GDP Gross Domestic Product LIST OF FIGURES Figure 1.1: Figure 1.2 Figure 2.1 Figure 2.2 Michael Porter’s Forces Model of Competition Diagram of major activities and support activities An Phat’s organizational structure chart Production of plastic of Vietnam during the period Figure 2.3 Figure 2.4 Figure 2.5 Figure 3.1 Figure 3.2 2000-2010 Consumption of plastic products per capital in Vietnam Main Machineries and Workshop of An Phat SWOT synthesis matrix to An Phat Implementation plan of Differentiation strategy Implementation plan of Cost leadership strategy Page 10 10 28 35 39 51 66 72 76 LIST OF TABLES Table 1.1: Table 1.2: Table 1.3: Table 1.4: Table 1.5: Table 1.6: Table 1.7: Table 2.1: Table 2.2: Table 2.3: EFE Matrix IFE Matrix IE Matrix Competitive Profile Matrix SWOT Matrix SPACE Matrix QSPM Matrix Labour structure of the Company Business result from 2008 to 2010 of An Phat Summary of the general environment analysis of An Table 2.4: Table 2.5: Table 2.6: Table 2.7: Table 2.8: Table 2.9: Table 2.10: Table 2.11: Table 2.12: Phat Analysis of five competitive forces to An Phat EFE Matrix of An Phat Competitive profile matrix of An Phat List of some of the major material suppliers of An Phat Cost structure of An Phat from 2008 to 2010 Some financial ratios of An Phat from 2008 to 2010 Summary of strengths and weaknesses of An Phat Internal Factor Evaluation (IFE) matrix of An Phat QSPM matrix of An Phat Page 13 14 14 16 17 19 22 31 31 42 47 49 50 54 56 62 63 64 68 LIST OF APPENDIXES Appendix 1: Quality Management Certificate of An Phat Page 81 PREAMBLE The reason for topic selection: Vietnam's economy is gradually integrating into the economy in the region and the world, the business environment of the enterprise has been extended, but the competition is becoming harder This both has created business opportunities and contains potential risks threatening the development of enterprises In order to take advantage of the oppotunities and get rid of the threats, based on the strengths, each company must have a clear business strategy in each period of time so as to keep the company ever-growing An Phat Plastic and Green Environment Joint-Stock Company is the leading company in Vietnam in the plastic bag manufacturing industry Plastic industry of Vietnam is now having many oppotunities (incentives for plastic industry development, evergrowing demand for plastic products, ) as well as facing with many threats (tax for environment protection, high interest rate, ) How An Phat have to build the business strategy to have competitive advantages over competitors and thus to develop its businesses? This is the reason why our group select the title “Building the business strategy of An Phat Plastic and Green Environment Joint Stock Company - period 2012-2016” to study in our capstone project Purpose and scope of the study: The Purpose: Researching strategy building basis, strategy building process and the way to select the optimal strategy in order to help An Phat Company to identify their best suitable business strategy From there, making proposal and solutions to improve the business strategy development process for An Phat Company in current conditions At the same time, giving the selected strategic roadmap from 2012 to 2016 Scope of the study: Going into detail of business strategy building process of An Phat Company for the period 2012 -2016 Table 2.12: QSPM matrix of An Phat Major factors Internal factors Classific Chosen strategies Strategy Strategy Strategy The solidarity and loyalty 0.1 AS - TAS - AS - TAS - AS - TAS - of employees Modern equipments and 0.1 0.40 0.30 0.20 technologies Product and Service quality Development and research 0.1 0.1 0.30 0.40 0.20 0.30 0.10 0.20 0.1 0.08 0.08 0.30 0.24 0.14 2 0.20 0.16 0.21 1 0.40 0.08 0.07 ation activities Customer’s confidence Healthy financial situation Qualifications and skilled Information system of the 0.07 3 Company Human resource training 10 Marketing activities 11 Management works 12 Suitable organization 0.05 0.1 0.07 0.05 - 0.15 0.10 - 2 - 0.10 0.20 - - 0.05 0.30 - structure 1.00 External factors Tax incentive of the State Investment Policies Raw material source Changes Science and Technology 0.1 0.1 0.1 0.1 0.10 0.20 0.40 3 0.30 0.30 0.30 2 0.20 0.10 0.20 Development GDP Growth Export market share changes Environmental Protection Tax 0.05 0.1 0.05 0.10 0.10 0.20 0.05 0.30 0.10 0.1 0.1 0.1 0.05 0.05 - 0.10 0.20 0.15 3.38 - 0.30 0.10 0.10 3.32 2 - 0.10 0.20 0.10 2.70 increase High inflation Raw material price changes 10 High Interest rate 11 The income level increase 12 Competitive pressure Total 69 The above analysis results show that the most appropriate strategy for the present condition of the An Phat is strategy and strategy Strategy 1: Differentiation strategy Strategy 2: Cost-leadership strategy These selected strategies are suitable with the development of the An Phat in the future 70 CHAPTER III CHOSEN STRATEGY FOR AN PHAT COMPANY AND IMPLEMENTATION SOLUTIONS 3.1 DIFFERENTIATION STRATEGY 3.1.1 Strategy contents: Because An Phat Company products according to the orders and mainly is processing, implementation of product differentiation will be different from other normal consumer goods producers Differentiation strategy that An Phat Company implemented mainly relates to meeting all customer’s requirements, including: - Orders require high quality and high technical factors, - Orders require a large volume of products in short time This creates the difference between An Phat Company and other manufactures in Viet Nam This is an advantage of An Phat With the modern machinery and equipment system, the manufactures cannot meet orders with large volume in short time Meanwhile, An Phat Company can meet this requirement and that is why orders consecutively come to An Phat Company and revenue incessantly increases over years An Phat’s main market is export to EU, Japan 3.1.2 Strategic solutions: To achieve product differentiation strategy as above mention, the Company needs to have solutions to implement, the solution includes:  Machinery solutions: Continue to promote the creativity of the technical staff of the Company based on the existing machineries and equipments to produce products with high technical requirements Further investment in advanced machinery to produce products with high difficulty level such as folding bags that Japan market is in great demand 71  Finance and Investment Solutions: To serve for plan of supplying folding bag products for Japan market, the Company will invest about $ million to buy about 100 bag folding machines The company plans to issue to rise capital of 99 billion to get funds for investment in these machineries, the rest will increase working capital  Marketing Solutions: Actively participating in the fairs on domestic and aboard plastics industry and popularize the advance technologies that An Phat has, introducing the full capacity of An Phat so that the customers can see the real capacity of An Phat and thence order for An Phat Organizing customer conference (both domestic and aboard) to popularize the capacity of An Phat and increase the current customer’s loyalty to An Phat Company  Human Resource solutions: Stepping up training for staff to be able to acquire new technologies  Operation and production solutions: Continue to implement working productivity management according to IMPACT program 3.1.3 Implementation Roadmap: Strategic implementation plan will be assigned and planed implementation solutions, starting and ending period, implementation person and implementation result evaluation 72 Figure 3.1: Implementation plan of Differentiation strategy The person responsible Strategic solutions Continue to promote the creativity of for implementation technical staff of the Company based on Vice General Director in existing machinery to produce charge of technical Expense Period VND billion customers according to 2012-2016 existing technologies Further investment in advanced machinery level such as folding bags that Japan Evaluation standards Meet the requirements of the with high technical requirements to produce products with high difficulty Implementation $ million New investment in 100 bag General Director market is in great demand The company plans to issue to rise capital 2012 folding machines VND 100 issue and of 99 billion to get funds for investment in Board of Administration these machineries, the rest will increase and Director depend on stock market in working capital Actively participating in the fairs on General Director and VND 7,5 2012 Participate in a fair of plastic domestic and aboard plastics industry and Business Department and billion industry in EU, Japan and popularize the advance technologies that Marketing Department An Phat has, introducing the full capacity of An Phat so that the customers can see 73 million Successfully achieve at least 99 billion Viet Nam each year 2012 2012-2016 the real capacity of An Phat and thence order for An Phat Organizing customer conference (both domestic and aboard) to popularize the General Director and capacity of An Phat and increase the Business Department and current customer’s loyalty to An Phat Marketing Department Company Stepping up training for staff to be able to acquire new technologies Continue to implement Department working productivity management according to IMPACT program Head of Human resources Production Vice general Director 74 VND billion VND 7,5 billion Organize a domestic and aboard conference Error, damaged 2012-2016 products rate decrease gradually over 2012-2016 years VND billion Productivity is higher than in previous years 2012-2016 3.2 COST LEADERSHIP STRATEGY 3.2.1 Strategic contents: Through the analysis of internal factors of the Company in Chapter II, we can see that, to achieve the cost leadership strategy, An Phat Company has to focus on the following contents: - Maximize the capacity of the existing machinery and new investment equipments - Gradually reduce interest costs by access to export preferential credit source with low interest rates or issue shares to increase registrar capital - Gradually replacing imported raw materials by domestic raw materials when petrochemical filter factories come in to operation… - Using CaCO3 products produced by Yen Bai factory in order to reduce product cost - Continuously improve the skills of workers to meet the requirements of high technology machinery, hence, reduces the costs errors and damaged goods… 3.2.2 Strategic solutions: To implement the cost leadership strategy as the above mention, the Company needs to have implementation solutions The solution as following:  Technology and Machinery solutions Exploit maximum capacity of existing machinery and new investment machinery  Finance Solutions On the basis of Decree No 75/2011/ND-CP August 30, 2011 of the Prime Minister on the export credit loans, the Company needs to work with the Viet Nam Development Bank (VDB) to access and mobilize capital source with low interest rates 75 Issue to increase registrar capital by VND 99 billion for machinery investment and adding working capital  Human Resource solutions: Continuously training to improve skills for workers to reduce errors, damaged goods  Operation and production solutions: Using the method of inventory management to reduce inventory costs, especially when starting using main raw materials from local manufactures 3.2.3/ Implementation Roadmap: To implement this strategy, Board of Director of the Company will be assigned and planned implementation solutions, starting and ending period, implementation person and implementation result evaluation 76 Figure 3.2: Implementation plan of Cost leadership strategy The person responsible Expense Maximize the capacity of the for implementation Vice General VND billion existing Director in charge of Solutions machinery and new investment equipment Gradually reduce interest costs by technical Board of access to export preferential credit Administration and source with low interest rates Director Issue shares to increase registrar Board capital Administration Director Gradually replacing imported raw Head of materials by materials when filter factories domestic VND 100 million Gradually replace trade loans by Successfully issue and achieve at least and 99 billion depend on stock market in Business 2012 Gradually reduce weight of export raw VND 500 million raw Department in Meet the requirements of the Period 2012-2016 2012-2016 export preferential loans 2012 2013-2016 materials and replace by domestic raw petrochemical come Evaluation standard customers about time of delivery VND billion of Implementation materials to operation Using CaCO3 products produced Head of production Using 100% CaCO3 of inputs from by Yen Bai factory in order to Department Yen Bai factory 77 2012-2016 reduce product cost Continuously improve the skills Head of workers to meet of Human VND 7,5 billion the resources Error, damaged products rate decrease 2012-2016 gradually over years requirements of high technology Department machinery, hence, reduces the costs errors and damaged goods… Using the method of inventory Production Vice VND 500 million Inventory value at periods is gradually management to reduce inventory general Director low, especially since 2013 when costs, especially when starting starting using domestic raw materials using main raw materials from local manufactures 78 2013-2016 The implementation of these two above-mentioned strategies will help An Phat Company to have more steady position on the domestic market as well as export market In the domestic market, with cost leadership strategy implementation, An Phat Company can produce low cost products with relatively good quality and thus increasing competitiveness with other domestic manufactures And strict markets as EU and Japan, the implementation of these two strategies will increase satisfactory ability of An Phat Company to orders with high quality requirements, large volume and in short time and other manufactures in Viet Nam cannot meet these requirements, on the other hand, An Phat Company can increase price competitiveness of their products and hence, can have advantages for manufacturers from countries such as: Indonesia, Pakistan,… 79 CONCLUSION To succeed in business activities, the mission of the enterprise in general and plastic industry enterprise particular is not only making business strategy target but also analyzing, exploring advantage factors that having from the environment One hand, to seek business opportunities, on the other hand, detecting risks, threats to survival of the enterprise to actively respond, ensure survival and sustainable development of the enterprise, strengthen and expanded the market share, improve competitiveness With desire of making certain contribution in development of An Phat Plastic and Green Environment Joint Stock Company, this report show clearly the necessary of building business strategy using thorough analysis and understanding from a member of the group who have been performing audit service to An Phat for long time, however, the research is in narrow range and limited time frame, although with desire of studying many different aspects, our group has just reached basic ideas Therefore, this report is unavoidable defects, omissions or not full analysis of mentioned issues Therefore, our group looks forward to receiving the comments of the Committee and all students of Global Advanced Master of Business Administration Program for better report Our group would like to thank the lectures and staff of ETC centre – Viet Nam national University has created favorable conditions for us to approach with advanced business administration knowledge and complete well Business Administration program that organized by ETC centre Ha Noi, December 2011 80 REFERENCES Fred R.David, Strategic management: concepts and cases, Thirteenth Edition, Pearson Education Publishing House Strategic syllabus, by Dr.Ngo Kim Thanh, University of National Economic puplisher, 2011 Concept of Strategic Management, Fred R.David, Statistics Publisher, 2006 Strategic Management, Dr Le The Gioi, Dr Nguyen Thanh Liem, MBA Tran Huu Hai, Statistics Publisher, 2007 Effective Business Strategy (Harvard Business Handbook), HCM synthesis publisher, 2006 Strategic Management, Dao Duy Huan, Statistics Publisher, 2004 Strategy and Business strategy, Garry D Smith, Danny R Arnold and Boby R Bizzel, Statistics Publisher, 2003 Scientific research method, Janes Williams, Prentice Hall Publisher, 2004 Competitive strategy - Michael E.Porter , Ha Noi Scientific and Technical Publisher 81 Appendix 1: Quality Management Certificate of An Phat 82 ... Comments of An Phat Plastic and Green Environment Joint Stock Company on the project of Group 2, GAMBA01.X0710 Class Griggs University The Research Team have closely followed up the current situation... ACKNOWLEDGEMENT The Research Team would like to express our deep gratitude to: The lecturers of the MBA training program of Griggs University - who provide and share knowledge; Managers and staff... the solid basis of spirit for members of the group during the participation of Griggs University MBA program and the process of completing the Capstone Project "Building business strategy of An