Luận văn thạc sĩ quản trị kinh doanh quốc tế MBA (21)

Global Advanced MBA Program TABLE OF CONTENTS Page ACKNOWLEDGEMENTS INTRODUCTION The reason to choose the research topic: The object and scope of research: .5 The purpose of the research topic: Research Methodology: The report’s structure CHAPTER I THEORETICAL BACKGROUND .7 1.1 The concept of strategy 1.1.1 The concept of strategy, business strategy and strategic management 1.1.2 The role of business strategy 1.1.3 The classification of business strategy .8 1.2 Analysis for business strategy development .8 1.2.1 Analysis of business environment: 1.2.1.1 PEST Model 1.2.1.2 External Factor Evaluation Matrix (EFE) .9 1.2.1.3 The model of five competitive forces 10 1.2.2 Analyzing the internal environment: 11 1.2.2.1 Resources .11 1.2.2.2 Internal Factor Evaluation Matrix (IFE) .12 1.2.3 Strength-Weakness-Opportunity-Threat Matrix (SWOT) 13 1.2.4 Internal - External Matrix 14 1.2.5 Quantitative Strategic Planning Matrix (QSPM) 15 CHAPTER 16 ANALYSIS OF TRAPHACO COMPANY’S BUSINESS ENVIRONMENT 16 2.1 Introduction about TRAPHACO Company 16 2.2 Analyzing the external environment 19 2.2.1 General environmental 19 2.2.2 Industrial environment 25 2.2.3 Assessing the direct competitors 29 2.2.4 Assessment of opportunities and threats 36 Global Advanced MBA Program 2.3 Analysis of internal environment .37 2.3.1 Human Resources 37 2.3.2 Finance 39 2.3.3 Technology 42 2.3.4 Management 44 2.3.5 Marketting activities 45 2.5 Assessing the strengths and weaknesses of the company 47 CHAPTER DEVELOPING BUSINESS STRATEGY OF TRAPHACO COMPANY IN THE PERIOD 2011 - 2015 48 3.1 Selection of business strategy 48 3.1.1 External Factor Evaluation Matrix .48 3.1.2 Internal Factor Evaluation Matrix 51 3.1.3 SWOT matrix analysis 54 3.1.4 Internal - External Matrix 56 3.1.4 Strategy selection 57 3.1.5 Quantitative Strategic Planning Matrix 59 3.2 Recommended Solution .61 3.2.1 Human resources 61 3.2.2 Technology 62 3.2.3 Planning and production of medicinal herb plant 63 3.2.4 Research & Development (R&D) 64 3.2.5 Marketing activities .65 3.2.6 Management 65 3.2.7 Finance 67 CONCLUSION 69 REFERENCES 70 Global Advanced MBA Program LIST OF FIGURES Content Figure Page Figure 2.1 - Organizational chart of the company .19 Figure 2.2 - GDP forecast of Vietnam 20 Figure 2.3 - Forecast on Vietnam’s population growth 23 Figure 2.4 - Drug expenditure forecast per capita and drug spending per GDP 27 LIST OF TABLES Content Table Page Table 2.1 List of suppliers of raw materials 28 Table 2.2 Assessment of the direct competitor 30 Table 2.3 Evaluation summary table 34 Table 2.4 Opportunities and risks of TRAPHACO .36 Table 2.5 Financial situation of TRAPHACO 39 Table 2.6 Strengths and weaknesses TRAPHACO .47 Table 3.1 - External Factor Evaluation Matrix 48 Table 3.2 - Internal Factor Evaluation Matrix .51 Table 3.3 - SWOT Matrix 54 Table 3.4 - Planning and criteria for recruitment to 2015 61 Table 3.5 - Plan on capital source and costs for the years 67 Global Advanced MBA Program ACKNOWLEDGEMENTS First of all, our group would like to deeply thank Global Advanced Master Training Program in Business Administration, Griggs University that has successfully organized courses for our GaMBA.M0909 class The courses have been provided and completed us with the knowledge and experience in all important areas of business administration Especially via the course of Strategic Management we have been receiving a lot of tools to analyze and develop the strategies for enterprise as well as the management trend of modern international strategy These tools and knowledge are really useful in our work We would like to express our sincere thanks to Professor Tony Sanichara and Professor Associate - Dr Ngo Kim Thanh who directly guided and taught us enthusiastically and responsibly In addition, we also would like to thank TRAPHACO Joint Stock Company that has provided materials for our research as well as has helped arrange interviews with key managers and officials of the company Also, great thanks should be sent to the class managers, class management board that have helped and coordinated during preparation and approval of the capstone outline of the group and have always encouraged the group in the process of writing this capstone project report Global Advanced MBA Program INTRODUCTION The reason to choose the research topic: Pharmaceutical industry is highly specific industry which has direct impact on people's health, labor force of society and under the strict control of the government In recent years, thanks to economic development, people's living standard has been improved and therefore spending for the health care of the people has also increased significantly This is an opportunity for pharmaceutical industry’s development, but simultaneously, it is a challenge for the industry to meet the growing demand Besides, Vietnam is on the integration process to World Trade Organization (WTO) along with opportunities and challenges To be able to compete effectively, the companies of the different industries and business areas, including the pharmaceutical industry will need careful preparation in all aspects TRAPHACO Joint Stock Company is headquartered in Hanoi, was established in 1999, performing the business and production of medicine, food, chemicals and medical equipment, as well as providing technical consultation service Over 10 years of operation, the company has built a reputable brand in the pharmaceutical industry and has gained trust among its partners and consumers However, in the context of increasingly fierce competition in pharmaceutical market, especially when Vietnam joins the WTO, the re-evaluation of the business environment as well as internal resources of the enterprise and the development of an appropriate business strategy is essential for TRAPHACO to survive and develop That is why the group has decided to choose the topic “Developing the business strategy of TRAPHACO Joint Stock Company for the period 2011 - 2015" The object and scope of research: Studied object: Activities of TRAPHACO JSC Scope of research: Research focuses on the company's operations nationwide Global Advanced MBA Program The purpose of the research topic: The research topic is aimed at re-evaluating the business environment of TRAPHACO Joint Stock Company Basing on these evaluation and analysis, the business strategy for the company in the new context is developed Solutions to implement strategies effectively are also recommended Research Methodology: To achieve the mentioned objectives, the group has used the following research methodologies: dialectical materialism, analysis and correlative comparison, collection, statistics, theory and practice combination The report’s structure This report consists of three chapters: - Chapter 1: Theoretical background - Chapter 2: Analyzing the business environment of TRAPHACO JSC - Chapter 3: Developing business strategy of TRAPHACO JSC for the period of 2011 – 2015 Global Advanced MBA Program CHAPTER I THEORETICAL BACKGROUND 1.1 1.1.1 The concept of strategy The concept of strategy, business strategy and strategic management The initial concept of strategy is associated with military activities This term is derived from "strategos" in Greek which refers to the role of generals in the army However, as using in the business, scholars have ascribed that term with new meanings and contents Strategy is defined by Chandler (1962) as "the determination of the basic, long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of measures necessary for those goals " Business strategy is "a series of commitments and activities that a company uses to win a competitive advantage by exploiting core competencies in a specific market." Business strategy management according to Wikipedia is science and art on the strategy to develop the business direction and objectives, to implement the short term and long term plans on the basis of available resources with the aim at helping the organization to achieve its long-term goals 1.1.2 The role of business strategy Business strategy plays the orientation role for the enterprise’s business activities, identifying the major objectives of the firm and how to achieve that goal Business strategy gives out development trends, identifying the basic resources and suggestions about how to combine these resources in order to make the maximum exploitation of available resources and of the firm’s potential The strategy will also help the enterprise be more proactive in dealing with the evolution of the market, seize opportunities as well prepare to overcome the risks based on the enterprise’s resources Global Advanced MBA Program 1.1.3 The classification of business strategy - Based on different criteria, the business strategy is divided into several categories In the framework of this writing, the author group only mentions the types of business strategy divided by strategy hierarchy in the enterprise Accordingly, three are three levels of business strategy as follows: - Corporate level strategy takes a view at the overall scope of a company/organization with the aim at working out its missions and objectives Corporate level strategy is primarily interested in choosing the types of business which the enterprise should run and in building and coordinating the portfolio of the firm - Business unit level strategy is positioning strategy The purpose of this level strategy is to enhance the value for the firm by increasing the awareness of brand and value received by customers Business unit here can be a division or a production line that is able to plan independently At this level, the strategy is mainly concerned with developing and maintaining competitive advantage of products or services of the enterprise - Operational level strategy is concerned with successful implementing the strategic decisions made at corporate-level strategy and business unit level strategy by the optimizing resources and capabilities of enterprise This strategic level mentions the business process and value chain Operational strategies include marketing strategies, research and development strategies, human resources and financial strategies This strategy level has an important role for the success of other strategies as they contribute to the development and combination of resources, designing processes and activity network of the firm 1.2 1.2.1 Analysis for business strategy development Analysis of business environment: Analyzing the external environment is always necessary for all enterprises to build business strategy as well to make adjustments when needed The purpose of business environment analysis is to help the enterprises identify opportunities to grasp as well as the challenges and difficulties to avoid or have solutions The tools are commonly used in these analysis are PEST model and EFE matrix Global Advanced MBA Program 1.2.1.1 PEST Model PEST model is applied for analyzing and evaluating the political, economic, cultural, social and technological factors which have certain impact on the enterprise‘s performance - Political environment refers to the political stability and policies of the government to intervene in the economy in general and industry/business sector in particular Political decisions can affect the important areas for the firm such as health, education and infrastructure In addition, the enterprise needs to analyze the policies as tax policy, labor law, environmental law, trade barriers and assesses the impact of these policies on the firm’s activities - Economic environment is analyzed via the information on interest rates, economic growth, inflation and exchange rates These factors have a major impact on operations and income of the firm Interest rates affect the enterprises' capital costs, exchange rates affect the cost of importing and exporting goods, economic growth reflects changes in customers’ spending and inflation has influence on the stability of the economy through its impact on all the three factors - Socio-cultural environment is related to aspects such as population, age, social attitudes Trends in the society may affect the demand on the firm’s products and services as well as available labor force in the fields of the enterprise Population structure can also increase the demand for these products, while narrowing it for other products - Technology reflects advances in technology applied in production and business practices Technology can help reduce costs, improve quality, and create new products and processes The role of technology in the enterprises is increasingly larger and its impact could change the competitive structure in any business industry or sector 1.2.1.2 External Factor Evaluation Matrix (EFE) EFE matrix is one of the strategic management tools which are commonly used to assess current business conditions Via the matrix the opportunities and threats of the external environment which affect the firm can be identified The factors evaluated in the EFE matrix are often political, economic, social, legal factors and other external factors EFE matrix is set as follows: Global Advanced MBA Program - Make a list of external factors affecting the firm These factors are divided into two groups of Opportunities and Threats - Classification of importance for each factor by assigning a weight for each factor The value of each weight is from to Score means that factor is not important and score means the factor has significant impact on the firm Total weight must be - Assign a rating from to to each factor Rating reflects the response of firm for each factor Rating means poor response, is below average, is above average and is good response - Multiply the weight of each factor with its rating to get the weighted score for each factor - Add all scores of the factors to determine the total weighted score for the firm Assessment: Total highest points in the EFE matrix is 4.0, the lowest is 1.0 and average is 2.5 - If the total score is 4, the enterprise is responding very well for the opportunities and threats from external environment The enterprise has effectively utilized the opportunities from the external environment as well as reducing minimum of damages caused by the external environmental threats - If the total score is 2.5, the enterprise’s response is of average level for the opportunities and threats - If the total score is 1, the enterprise’s response for the opportunities and threats from external environment is weak The strategies the enterprise set out not take advantage of the opportunities and cannot avoid the threats from the external environment 1.2.1.3 The model of five competitive forces The model of five competitive forces was developed by Michael E Porter since 1980 and has become an important tool for the industry environment analysis These five competitive forces include the power of suppliers, threat of substitute products, threat of new entrants, power of buyers and rivalry among existing competitors These forces determine the level of competition, also the profitability and attractiveness of the sector Based on the analysis result of five competitive forces, managers can determine the impact or exploitation for a 10 Global Advanced MBA Program Opportunities (O) Vietnam's population is large and young, drug spending increases more and more particularly in the average segment Market share of domestic drug production only meets 50% of the treatment needs of the people of Vietnam Southern region market is still not paid enough attention and marketing effort Entry barriers to industry are currently high Government has many policies to support industries such as financial support and ensure the output of industrial production for medicine and encourage the increased production of raw materials The people of Vietnam have paid more attention to health protection and a growing tendency to return to herbal medicine use Opportunity to choose suppliers of raw materials at reasonable prices, good quality when Vietnam joins the WTO SO: S1, S2, S3, S5, O1, O2, O6 - Market penetration strategy: Increase market share of the company's products to meet 50% demand now not met by the people of Vietnam WO: W1, W3, W5 + O1, O2, O7: Investment for development for resources such as personnel training, Investment in technology to improve product quality; More S1, S2, S3, S4, S5, O1, O3, O6 - focus on promoting the brand, to Market development strategy: maintain and expand the Market development and product southern market left open distribution systems in areas of South Vietnam S1, S3, S4, S5, O1, O2, O7 – Product development strategy: Improving product quality or develop new product to enhance and differentiate the product to compete with businesses in the area 57 Global Advanced MBA Program Threats (T) Pharmaceutical product prices are under tight control of the State while the input price increase due to continuous inflation Most raw materials are imported so it is affected by exchange rates Competition in local industry and with foreign enterprises in the WTO route is increasingly fierce Manpower in pharmaceutical industry today is not enough, especially undergraduate and post graduate pharmacists with good English level Counterfeit drugs accounts much on the consumer market Not yet built packaging factory ST S3, S4, S5, S8 + T1, T2, T3: Take advantage of manpower, modern technology and quality management system standards to improve the quality of products and services, reduce costs products, enhance branding promotion to provide information and products to customers, thereby maintaining and expanding markets WT W1, W2, W3 + T3, T4, T5: To enhance the control and improve the distribution system; to enhance promotion of products and continuously improve quality; to provide full information to customer and offer qualified products; Investment in skills training, foreign language expertise as well as employees to pursue the opportunity and to prepare competition when Vietnam joins the WTO 3.1.4 Internal - External Matrix From IFE and EFE matrixes above, we have: - Score from the EFE matrix - marked on the y axis is 3:38 - Score from the IFE matrix - marked on the x-axis is 3.3 58 Global Advanced MBA Program EFE score I II IV V VII VIII III 3.38 VI IX 3.3 IFE score On the IE matrix, TRAPHACO's EFE and IFE score has intersection point in the quadrant I which mean Grow and Build area The strategies should focus on market penetration, market development and product development may be appropriate to apply to the company 3.1.4 Strategy selection - Analysis by IE matrix shows TRAPHACO Company is located in the Grow and Build area TRAPHACO should adopt the focus strategy (market penetration, market development, product development) and integration (backward, forward and horizontal) Thus from the SWOT matrix, we can identify the SO strategies that can be applied for TRAPHACO as follows: - Market Penetration Strategy: Increase market share of the company with the aim at increasing market share of domestic medicine production to meet the meet needs of the people of Vietnamese - Market Development Strategy: Market development and product distribution systems in areas of Vietnam South - Product Development Strategy: Improvement for products to improve quality and make a difference for the product to compete with businesses in the area 59 Global Advanced MBA Program Investment and development for resources of the business like human resources, material resources, and financial resources should be made in order to take advantage of opportunities, advantages and limitations are difficult to maintain and expand domestic and foreign markets for old products and new products The promotion of branding should be enhanced to maintain the leading pharmaceutical brand in Vietnam The growth target in the southern market should be maintained and increased to account for larger proportion of revenue of the company High growth rates should be maintained, including revenue and profit increases gradually making the value of the firm as premise for implementation of strategies from 2011 to 2015 Vision TRAPHACO will become a powerful economic group in the field of health care with research capacity and development of high technology products that made from natural resources TRAPHACO Group will include pharmaceutical manufacturing factories which meet international standards and are friendly environment, strong power distribution system, research and development institutes and medical and pharmaceutical training school Goal by 2015 - Reach the revenue of 2,300 billion VND by 2015 and profit of 210 billion Maintain stable financial ratios at the average growth rate: 2530%: + Net profit after tax / net sales (ROS): 8.5% - 12% + Net profit after tax / shareholders equity (ROE)): 20% - 25% + Net profit after tax / total assets (ROA): 14% - 17% + Earnings per share (EPS): 5200-7000 e / cp - Establish drug distribution center with 25 sales branches across the country - Increase in the market share of the South, to raise its contribution to total sales across the country - Own 02 factories of GPs (GMP, GSP, GLP, and GDP), ISO 9001: 2000, and ISO 14001: 2004 - Invest in improving human capital, technological innovation, and modern equipment to boost production and expand markets 60 Global Advanced MBA Program - Focus on research and development of high-tech products to maintain market share of medicine, diversify product lines, and expand international markets to ensure sustainable development - Plan and construct the natural medicinal plant TRAPHACO is a pioneer in business acquisition and application of advanced technologies from planting to processing, pharmaceutical production and packaging - Maintain quality control following advanced quality management standard GPs (GMP, GSP, GLP, and GDP), ISO 9001:2008, ISO 14001:2004 and 5S - Develop distribution system, improve the capacity of the domestic distribution system and expand the coverage, form a system of branches to replace agents Focus on building sales team - Continue to affirm and promote TRAPHACO brand Brand reputation and quality of the business is to serve consumers for the purpose of public health care - Apply a comprehensive ERP system, paying special attention to the completion of the job evaluation system and work allocation - Continue to promote the culture of TRAPHACO of "honest, sharing, commitment and real commitment" to build business image of Prestige - Quality Efficiency 3.1.5 Quantitative Strategic Planning Matrix Strategic Alternatives Factors Market Product Market Weight penetration development development AS TAS AS TAS AS TAS Internal factors Strong personnel: experienced, professional and well trained 3 16 12 Investment in technology 16 12 Fully exploit domestic medicinal materials 12 Marketing activities become more professional with nationwide distribution system 12 9 61 Global Advanced MBA Program Strategic Alternatives Factors Market Product Market Weight penetration development development AS TAS AS TAS AS TAS Reputable brand 3 9 Health finance with high annual growth rate Products are easily imitated or faked 4 16 16 16 2 6 No packaging factory 8 4 4 3 8 3 9 3 12 16 16 12 12 12 Penetration of other companies 12 12 12 Impact of weather on herbal sources 9 External factors Economic stability Impact of law and regulations High growth rate of population Increasing spending for drug per capital People’s awareness of health care Development of technology Total attractiveness score 136 170 155 Conclusion: The Product Development Strategy is selected to implement because it has the highest TAS in QSPM 3.2 Recommended Solution 62 Global Advanced MBA Program 3.2.1 Human resources - Human resources are the most important and valuable resource of the company The human resource management is increasingly paid more and more attention The company sees this as a core management function which plays an important role in the implementation process of the development strategy of the company - All activities of the company are involved in human Therefore is necessary to have a professional staff team, to improve human resources in professional qualifications and experienced managers In the context of competitive markets, any company that has good human resources of high responsibility will support to overcome difficulties of non-favorable business context So the company needs to have specific and consistent policies in the recruitment, training and use of managers and employees Recruitment Policy: To have a staff team who meets the growth target of the company, a plan for recruiting and training personnel to ensure sufficient personnel is made The company prioritizes recruitment and training of pharmacist and skilled workers to undertake its core business strategies as follows: Table 3.4 - Planning and criteria for recruitment to 2015 Year Post graduate Under gradute Intermediate Worker 2011 28 200 225 270 2012 30 230 240 290 2013 33 265 270 300 2014 33 335 300 320 2015 35 380 320 350 + Developing fair and timely recruitment process with appropriate standards for the stages and the functional units + Recruiting excellent students graduated from the School of Medicine and other universities in order to train and build the core workforce of the company in future + Appoint employees to suitable professional tasks Trust among managers and employees should be developed and maintained When assigning employees, their proactiveness and initiative is highly appreciated 63 Global Advanced MBA Program + Develop measurement criteria on work assignment and evaluation of the performance Training policy: In addition to policies to attract talent, TRAPHACO has paid great attention to the training of human resources Funding for the training increased over the years, and is expected to account for 0.6% - 0.9% on total revenues of the Company in coming years + To offer training on for sales staff to equip them with communication skills, sales skills, foreign language + To organize training for pharmacists on presentation skills to introduce pharmaceutical products and sales skills + To encourage executive managers to improve their qualification via participation in training courses or professional conference (pharmacy, tax, management and administration) + Identify prospective employees to have a policy on training and developing their capacity, in order to build a team of high qualification and extensive expertise The trained staff is one of the resources to create value for the company Policies of wage, reward: Building an appropriate and fair system of salary, bonus and allowance for employees to prevent brain drain Wage policy basing on sales, product line and profits should be developed Reward should be made for employees who have the initiative to improve the value of the business This can encourage creativity, dynamism and desire of promotion among staff Reward should also be made to encourage employees who complete their tasks 3.2.2 Technology - Invest in upgrading the infrastructure and distribution systems: upgrade office at 75 Yen Ninh, Office of stock in Nam Dinh, Thanh Hoa, Nghe An, Hai Phong, Vinh Long to meet standard GDP, and continue to prepare for establishing sales branches across the country - Invest in upgrading the machinery and equipment systems of TRAPHACO SAPA - Expand and develop the area of growing raw material of TRAPHACO 64 Global Advanced MBA Program SAPA - Cooperate with JSC-Tech TRAPHACO to meet up need of TRAPHACO products and ensure product quality - Propose to merge with TRAPHACO High-tech Company to expand production and business activities of enterprises, ensuring optimization and transparency - Establish TRAPHACO Hung Yen Company Limited with 100% TRAPHACO’s capital to implement investment project of high-tech plant of 4.6 hectares in Tan Quang - Van Lam - Hung Yen - Invest in a packaging factory with suitable capacity to meet the need of packaging of the whole company 3.2.3 Planning and production of medicinal herb plant - Expand the area for growth herb in SAPA from hectares up to 10 hectares - Continue to expand the area of medicinal herbs in Lam Dong (zoning, leasing land from farmers to grow medicinal herbs, and then hiring them to take care of planting and harvesting The company will purchase all herbal material; provide auxiliary machinery production, seeds and cultivation techniques.) By 2015 the target is that the raw material areas in Lam Dong will meet with GAP standard as raw material areas in Sapa and will supply about 25% input for the company - Support the farmers of the regions with precious herb to exploit and plant - Goals by 2015 is to meet the relatively demand of raw material inputs for production and a part of it will be sold to other businesses in the country - Build and develop the value chain of Research - Manufacture - Market to ensure sustainable growth with below solutions: + Develop the cooperation model of factors (the farm – the government – the local business – the scientist) for the development of medicinal herb and medicinal products + Develop the GreenPlan Project (the project studies sustainable development for TRAPHACO’s medicinal herb sources) with the aim of ensuring the quality and quantity of raw material inputs to stabilize production 3.2.4 Research & Development (R&D) 65 Global Advanced MBA Program - Focus on research and development of new products which has been registered, maintain the market share of traditional products, diversify product lines and ensure the sustainable development - Promote research, production and trading of functional food - Implement Green Plan Project to plan and develop sustainable supply of medicinal herbs - Invest 3-5% of revenue each year in R & D activities - Invest in human resources development by promoting new forms of training, refresh training and advanced training for qualified research staff - Attract human resource of high expertise by working with scientists, experts, advisors in themes and projects at scientific and technological levels - Continue to develop cooperation and receive research results of companies and research institutes - Establish research institutes and develop below centers : + Dosage Technology Development Center + Center for Development of medicinal herbs and natural products + Center for Biotechnology – Pharmaceuticals + Center for knowledge and herbal medicine development + Center for research, forecasting and strategic planning - Investment in research and development of new products to create unique and different products, especially pharmaceutical products from Vietnam which has already many advantages 3.2.5 Marketing activities - Marketing activities may affect the success or failure of the implementation phase of the development strategy of the company The company needs to make long-term solutions of marketing to implement the business objectives Development of distribution system - Continue investment in building offices - branches in the provinces of Khanh Hoa, Gia Lai, and Quang Ninh of GDP standard Maximize exploitation of efficient distribution channels in the North, conduct projects in CRM (customer care) for intermediate customers Develop distribution channel in the South to achieve growth rate of 50% in 2011 Perfect the mechanism of branch 66 Global Advanced MBA Program management Continue to establish more branches in major provincial cities - Actively promote exports to ASEAN countries (Laos, Myanmar and Cambodia) and Eastern Europe (Ukraine) while still ensures financial safety Product Development: Product strategy plays a very important and crucial role for the success of the company in a competitive market To survive and develop corporate strategy must identify the right product strategy + Diversify the type and ensure the quality of pharmaceutical products Focus more on researching the needs of consumers in Vietnam because there are diversified needs of categories, quality and need change is very fast + For new drug, research and survey should be conducted to gather information to identify the needs of consumers Branding promotion: Continue to build the TRAPHACO culture with focus on company image of prestige - quality - efficiency Announce and use of new logo in the company and sales branches 3.2.6 Management Management capability is one important factor to decide the capacity and performance of each company This capacity depends on capability of forecast and timely settlement for arisen situation, making full use of opportunities and overcoming challenges Therefore the leaders are required to have strategic vision and experience as well as flexibility in strategy development and implementation - Continue to apply the ERP (Enterprise Resource Planning) in business administration - Apply advanced management tools to promote and make full use of their strengths to achieve the best performance - Define clearly and consistently pursue the objectives and tasks of the company's strategy Identify specific targets annually to plan effective implementation strategies + Apply the management model of Just-in-time good selling and purchasing The model is applied with purpose to provide goods in accordance with real demand of customers in the shortest time and to minimize inventory costs To achieve this, information processing and communication are crucial factors Timely and accurate information can help reduce storage of unsold goods 67 Global Advanced MBA Program + Outsourcing the activities which the company can make as efficiently as outsourced companies These activities include internal repair works the information technology management software + Review, analyze and eliminate unnecessary procedures, simplify the entire process of the company's operations to create the basis of promoting the dynamism of its departments, create a flexible working environment to catch up with the market changes + Apply information technology in almost management activities and operation of the company Take full advantage of applied software for accounting, inventory management and quality of pharmaceutical products, sales activities, and information provision system via internet Computerization of the management will help to conduct strict management, quick and efficient drug distribution Continue to improve the management, develop an appropriate information system of efficient mechanisms of information organization internally and externally Apart from internal information, information of market, economy and customer should also be exploited This helps assess the situation changes, forecast the development trend and recognize the situation changes Improve the quality of the internal control and monitor the implementation of strategies to make adjustment in time 3.2.7 Finance Table 3.5 - Plan on capital source and costs for the years Unit: million VND No Contents Chartered Capital 2011 349,5 2012 375 2013 400 2014 450 2015 500 Total sales 1.000 1.200 1.420 1.830 2.300 Cost PR, 0,6-0,9%/ 0,6-0,9%/ 0,6-0,9%/ 0,6-0,9%/ 0,6-0,9%/ 68 Global Advanced MBA Program Marketing R & D costs Revenue Revenue Revenue Revenue Revenue 3-5%/ 3-5%/ 3-5%/ 3-5%/ 3-5%/ Revenue Revenue Revenue Revenue Revenue Training expenses - - - - - Total cost 715 830 970 1.400 1.650 Dividends 20 -25% 20 -25% 20 -25% 20 -25% 20 -25% Conclusion: To implement the strategy of Traphaco Joint Stock Company the above solutions of personnel, R & D, the source of raw materials, technology, marketing is suggested Also plans of capital and revenue costs and dividends for coming years is made as a basis for the company to achieve its given business objectives Because the selected strategy is product development, solutions for expanding and upgrading growing areas of medicinal herb, medicinal material collection and extraction are emphasized Apart from its exploitation of the valuable natural medicinal materials, the company has made more investment in research and development activities Previously only 5-7% of management cost was spent for R&D Since 2011, 3-5% of total revenue has been invested in this activity Recruitment of professional pharmacists who are well-educated and experienced has made contribution to the success of the activity in order to implement research for inventing new medicines Regarding finance, analysis of financial situation of the company over recent years proves that TRAPHACO is financially sound with low liability rate, good cash flow, and gross profit of about 31% and annual dividend of 18-22% To ensure the financial source for implementing selected strategy, apart from its internal resources, TRAPHACO can also mobilize capital easily via issuing shares or getting loan from banks based on its specific business plans 69 Global Advanced MBA Program CONCLUSION With the development and global integration trend of the Vietnamese economy, the pharmaceutical industry is having many opportunities for development The results of above research and analysis show the great potential of the pharmaceuticals market in Vietnam while currently about 50% demand of consumers is met Over the past 10 years of operation, TRAPHACO has made remarkable progress and assertion of its brand However in the context of constantly changing business and fierce competition of the market mechanism, regular reviews and adjustments in the business will help company operate efficiently, not only maintain market share but also further develop Through research and evaluation of the actual business environment as well internal resources of the company, the group has built the business strategies in the period 2011 - 2015 for TRAPHACO With certain capabilities, the group has also proposed the solutions for implementing effectively the strategies to 2015 The group has received the support of the managers of TRAPHACO and the valuable advice of the teachers at Griggs University to complete this report Our group would like to express great thank to them for their support In a short time and with limited knowledge and experience in the pharmaceutical sector, it is unavoidable for the report to have shortcomings Group would receive sympathy from readers for these limitations 70 Global Advanced MBA Program REFERENCES Vietnamese: Le The Gioi - Nguyen Thanh Liem - Tran Huu Hai (2007), Strategic Management, Statistics Publishing House, Hanoi Nguyen Thanh Hoi (1999), Human Resource Management, Statistics Publishing House, Hanoi Vu Trong Khai (editor), Lam Ngoc Diep (1996), Corporation Organization and Management, Statistical Publishing House, Hanoi Traphaco JSC: financial statements in 2007, 2008, 2008, 2010 Traphaco JSC: Quality Management System ISO 9001:1400, 2000, Hanoi SSI Securities Company (2009), Rong Viet Securities Company (2010), SME Securities Co (2010) Websites: Website of Traphaco JSC www.traphaco.com.vn Website of General Department of pharmaceuticals www.dav.gov.vn Website of General Department of Statistics http://www.gso.gov.vn English: Chandler, A (1962), Strategy and Structure Cambridge, Massachusetts MIT Press Charles, Hill Garth, Jone (1995), Strategic Management, Washington J David Hunger & Thomas L.Wheelen (2001), Essentials of Strategic management M.E Porter (1980), Competitive Strategy, Free Press New York 71 ... 48 Global Advanced MBA Program exchange rate 49 Global Advanced MBA Program ... 69 REFERENCES 70 Global Advanced MBA Program LIST OF FIGURES Content Figure Page Figure... source and costs for the years 67 Global Advanced MBA Program ACKNOWLEDGEMENTS First of all, our group