Luận văn thạc sĩ quản trị kinh doanh quốc tế MBA (127)

Development strategy for HOMAC the period 2010-2020 GENERAL INTRODUCTION The urgency of the topic In recent years, Vietnam's economy has been growing very fast GDP increased by 7.8% from 2000 to 2006, 8.47% in 2007, 6.3% in 2008 and 5.3% in 2009 The industrial output in 2007 and 2008 increased by 10.3% and 11% respectively The production of industries using much labor has been expanded, new cities have developed and there have been more investment projects in various localities throughout the country In 2009, Vietnam's economy continued to be influenced by the instability of the world economy, especially the financial crisis dragging the decline of the economy However, Vietnam government has continued to direct taking groups of solutions including restraining inflation, stabilizing macroeconomy, ensuring social security, maintaining reasonable and sustainable growth Cement is one of the most basic and important materials for construction projects, and also one of the earliest industries which have been formed and developed in Vietnam (along with coal, textile and railway industries) It plays an important role in industrialization and modernization process of Vietnam, which has contributed 10-12% to GDP and stepped up the growth rate of Vietnam During last three decades, since Vietnam became united, the production ability of Vietnam cement industry has developed rapidly Vietnam had 02 cement manufacturing plants with the capacity of 1.2million tons/year in 1977 We now have more than 97 cement production lines with a total output capacity of 58 millions tons/year[ 1] Vietnam now is one of the top countries in ASEAN in terms of production ability and consumption per person[2] Most cement plants in Vietnam have latest advanced and modern technology Realizing the role of the industry, Prime Minister of Socialist republic of Vietnam promulgated Decision No 108/2005/QD-TT dated 16 may 2005 which approved master plan for the development of cement industry until [] Socialist Republic of VietNam government web potral date 06/1/2010 [] The data is taken from the report of Vietnam cement association, 2008 Development strategy for HOMAC the period 2010-2020 2010 and determined the development of cement industry is the strategy to support development of our economy Hoang Mai Cement Joint-Stock Company (HOMAC), with a capacity of 1.5 million tons per year, is one of the major suppliers in the North Centre region However, the operation of HOMAC has not been effective yet in the relation with huge assets (about 2500 billion VND) and annual revenue of more than 1300 billion VND in 2009 In fact, there are still so many obstacles to HOMAC’s business Firstly, HOMAC has not built a vision, mission and strategies for the future yet Secondly, there are many other brands of all economic sectors in the market and each company builds a distinct distribution system, which leads to the fierce competition Thirdly, the inflow resources and spare parts, which contribute to the increase in price, have not been allocated effectively Fourthly, HOMAC’s profit on sales and return on equity (ROE) have been much lower than the others’ Moreover, most of the capital mobilized from domestic and foreign sources also contributes to the increase in the cost Finally, the lack of internal policies is also attributed to the inefficiency in developing human resources and catching up with the development rate of producing technology and business management Thanks to the market-oriented policy leading to Vietnam’s economic development, the demand for cement has increased dramatically However, the attraction of cement industry has encouraged investors to establish more cement companies recently, which leads to the excess of supply in the market As a result, the amount of cement supplied is abundant and HOMAC will soon have to face with the fierce competition For those reasons mentioned above, building a strategy for the future is crucial to the development of HOMAC Through research, we have boldly built the development strategy for Hoang Mai cement joint-stock company in the period from 2010 to 2020 to maintain the sustainable development Development strategy for HOMAC the period 2010-2020 Objectives and applications of the topic The main goal of this research is to select the long-run developing strategy for HOMAC, based on analyzing and assessing the environment, internal and external prospects in Vietnam’s economy and cement industry in the next 10 years The specific objectives of the research are :  Reviewing the best model of the development strategy of cement industry all over the world  Identifying the strengths, weaknesses, opportunities and threats of HOMAC  Assessing the present situation of HOMAC in order to build the competition program  Building the development strategy for HOMAC the period 2010-2020 Object and scope of research The object of this topic is Hoang Mai Cement joint-stock company, a company directly under Vietnam Cement Industry Corporation, located in Nghe An Province The scope of this research is the present production, business activities and the external factors affecting HOMAC in working weeks The statistics using in this topic have been collected from 2004 up to now Method of the research There are main methods in building the long run developing strategy: Observation research: analyzing the statistics for the research from many sources such as annual reports of HOMAC and the data of Vietnam cement Industry Corporation and Vietnam Cement Association, some articles in magazines… At the same time, we will some case study, including case study in HOLCIM – the world 2nd largest cement corporation Besides, the authors have also considered the general orientation of Vietnam Cement Industry Corporation until 2020 Development strategy for HOMAC the period 2010-2020 Interview method: the authors have directly interviewed some key administrators, workers as well as have had direct discussion with the senior leaders of HOMAC on its current situation and orientations in the following years Theory models include: PEST analysis, Michael Porter’s five forces model, SWOT analysis The structure of the research There are chapters: General introduction Chapter 1: Theoretical and practical bases to build strategies for HOMAC from 2010 to 2020 Chapter 2: Summary and analysis of HOMAC’s business environment Chapter 3: The selection of a development strategy for HOMAC period 2010-2020 and the implement plan of the strategy Recommendations and Conclusion Development strategy for HOMAC the period 2010-2020 CHAPTER THEORETICAL AND PRACTICAL BASES TO BUILD STRATEGIES FOR HOMAC FROM 2010 TO 2020 This chapter refers to the theoretical bases for building the developing strategies for HOMAC, from theoretical research to a case study on the best practice of strategic management in the cement industry all over the world The theoretical bases mentioned in this chapter include:  The definition of strategy and business strategy  PEST analysis and Michael Porter’s five forces analysis  Analysis of the company’s internal functions  General matrix of internal and external environment  SWOT analysis for choosing the suitable strategy Finally, we will look into the best practical case of effective strategic management in cement industry, HOLCIM in Switzerland 1.1 The definition of strategy In terms of history, the term “strategy” used by the military is the long-term plan based on the confidence what the opponents will or not It is part of the four levels of warfare: political goals, strategy, operations and tactics There are various definitions of “strategy”, each of them have some differences, which depend on the author’s concept In 1962, Chandler defined “strategy” as “the determination of the basis long-term goals and objectives, the adoption of courses of action and associated allocation of resources required to achieve goals”[ 3] Chandler is one of the first who launched the strategy management theory [ ] Chandler, A (1962) Strategy and Structure Cambridge, Massachusettes MIT Press Development strategy for HOMAC the period 2010-2020 Until 1980, when strategic management became mature, Quinn gave a more general definition: “a pattern or plan that aligns goals, policies and actions into a cohesive whole” After that, Johnson and Scholes redefined “strategy” in the variable environment: “ Strategy is the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations” We have already known that all of the definitions of “strategy” contain the phrases expressing different aspects concerned In his definition of “strategy” with Ps, Mintzberg generalized the aspects of strategic management as follows:  Plan: series of actions intended consistently  Pattern: the consistency of action in terms of time, maybe intended or unintended  Position: the compatibility between organization and environment  Perspective: the way to perceive the world  Ploy: the specific gimmick to trick the opponents The definition not only includes various aspects but also differs from each other in levels Defining precisely “strategy” depends on different opinions At least, there are necessarily levels to be referred to: corporation strategy, business unit strategy, business strategy At the moment, strategy is commonly used and considered the factor that increases the likelihood of success and minimizes the chances of failure of the enterprise In conclusion, in spite of various definitions of “strategy”, in this research, the authors state that “strategy is a series of long-term goals, policies and solutions towards the business, financial and human factors in order to stimulus the operations of the firm up to the higher level Development strategy for HOMAC the period 2010-2020 1.2 PEST analysis and Porter’s five forces model 1.2.1 PEST analysis PEST analysis and Porter’s five forces model are aimed at identifying the opportunities and threats to the firm PEST analysis and Porter’s five forces model are the analysis of the external factors to the firm The basic external factors of the firm are illustrated in the following graph: The environment of national economy Economic factors Customers Political and legal factors Internal environment Current rivalries Customers Suppliers Suppliers Internal environment Current rivalries Enterprises Substitute goods Potential rivalries Potential Rivalries Substitute goods Technological and factors Social and cultural factors Figure 1.1 Factors in the external business environment In order to analyze the national business environment, this research uses PEST theory, including assessment of political factors (P), economic factors (E), social factors (S) and technological factors (T) to identifying opportunities and threats for the firm in that environment Economic factors: play the most important role in affecting the business operations of the firm They include some factors such as economic growth, exchange rate, inflation, interest rate policy, economic policy… if there are a high economic Development strategy for HOMAC the period 2010-2020 growth, a high exchange rate, a stable inflation rate, reasonable economic policy, that will be the good chance for firms Political and legal factors: are the basis for other factors of the business environment, which means that the political and legal bases determine the business environment These factors are the legal institution, legal system A stable legal system and explicit policy raise the chance for firms and vice versa Social factors: slowly affect the business environment , however, they have strong effect by affecting the market demand such as the change in custom and usages, consumption habits Technological factors: play a more and more important role in determining the business environment of the firm We are in the era of global technological revolution, mass of new technologies integrated in services, products Therefore, investigating the technological factors affects the areas of firms in the technological development rate, government investment… (Political) Stability Labor policy Tax policy Legal system Legal environment (Social) Population, Demography Income distribution Lifestyle Intellectual standard Customs and usages (Economic) Changes in GDP Economic growth rate Interest rate, inflation Unemployment Economic circle (Technological) New technological discovery Technology transfer speed Government spending on land and field Technological product market Figure 1.2 PEST analysis model Development strategy for HOMAC the period 2010-2020 Integration factors: are becoming the macro factors in the industry The globalization is undeniable, and this trend is the challenge for firms in their business development 1.2.2 Analyzing Michael Porter’s forces model Michael Porter’s force model is useful in analyzing the industry environment This model refers to forces, including (1) the supplier, (2) existing rivals, (3) potential rivals, (4) customers, (5) substitute products Each of them is also affected by many other factors, which should be researched to create a fulfilled picture of the rivalries in one industry The interaction between these forces raises opportunities and threats for firm in an industry, as the following graph New market entrants The threats of new market entrants Suppliers The bargain power of suppliers The intensity of competitive rivalry The bargain power of buyers Buyers The threats of substitutes Substitute goods Figure 1.3 M.Porter’s force Model Existing competitive rivalry between suppliers When referring to the rivalry among existing suppliers, the intensity of competitive rivalry in an industry must be counted In an industry with high intensity of competitive rivalry, the probability of reducing prices to get the temporary Development strategy for HOMAC the period 2010-2020 advantage is higher, which drives the profits to drop and causes a threat to the firm The factors determining the intensity of rivalry in an industry include: its market growth level, number of firms and theirs relative scales, the height of exit barriers and the product differentiation The threats of new market entrants This threat could be determined by “the height if the barriers to entry” If the barriers to entry are high, the threat from potential rivals decreases and the firm has more chance of success The factors determining barriers to entry are: the economies of scale, the product differentiation and the loyalty to brand, the distributing channels, the absolute cost advantage The bargaining power of buyers In the interrelation between firm and consumers, if consumers are “weak”, firms have more chance of raising prices to obtain more profit On the contrary, consumers are more “powerful” than firms The bargaining power of suppliers The suppliers have the ability to increase prices or reduce product quality, which means they are stronger than firms In particular, the suppliers are stronger when there are not many substitute products in the industrial market, which forces firms to choose them; when the firms’ business lines are not important to the suppliers; when the suppliers have the advantage in specializing in supplied products, making it difficult for the firms to choose another suppliers; when the suppliers can participate in the firms’ business to compete directly with the firms The threats of substitutes According to M Porter, substitute products are the products of the rivalries in the other industry, which have the same function of meeting consumers’ needs The existence of products outside of the realm of the common product boundaries increases the propensity of customers to switch to alternatives: the buyer propensity 10 Development strategy for HOMAC the period 2010-2020 Vietnam Growth strategy - Diversifying types of products related to cement such as concrete commodities, cement aggregates, etc Situations of cement markets shall still have many changes next time due to massed and skyrocked investment rate into outputs, leading to great surplus of cement quantity for a long time Moreover quantity of enterprises participating in cement markets is numerous, making competition harsher and harsher To ensure sustainable and stable development, HOMAC needs to carry out promptly overall strategic plan proposed There are some main works, which HOMAC needs to carry out in the period 2010-2012 as follows:  Communication of HOMAC's mission  Functional strategy: Restructure of main support functions is to aim at good operation of the apparatus so that HOMAC is getting bigger and bigger, and has competitive advantages on the markets  Strategy of market expansion: this strategy is performed basing on 03 principles viz maintenance of HOMAC's existing position on target markets and increase of HOMAC's potential market shares, flexible distribution organization between markets, regulating of the outputs in order to optimize supply and demand in the current background  Growth strategy: HOMAC needs to pay attention on some relevant fields in order to diversify types of products in orientation of cement as core business In summary, period 2010 -2012 is the time for HOMAC to strengthen and restructure functions in order to support business and production activities achieving the highest level, concurrently to carry out program of diversifying types of products in order to satisfy different demands of customers 71 Development strategy for HOMAC the period 2010-2020 Almost works are simultaneously executed, and many works have to be lengthened for many years, so t it needs to control continuous execution schedule, ensuring completion of given targets Thus HOMAC needs to mobilize human resources and establish a strong strategy management unit, who has capacity and carry out execution according to strict process of system with the highest unity form the high to low levels 72 Development strategy for HOMAC the period 2010-2020 RECOMMENDATION AND CONCLUSION RECOMENDATION To execute proposed general strategies in order to make HOMAC become the company with international stature in the cement field yielding practical benefits to the country, we recognize that HOMAC still meets a lot of difficulties and challenges immediately Thus authors would like to have some recommendations to ensure success of HOMAC during process of implementation of strategies as well as contribution to sustainable development of Vietnam Cement Industry In management and administration of HOMAC’s business and production it is necessary to pay much attention on management of production costs, use rate of economic and technical norms, labor productivity, and budget distribution to research and development Good management of above mentioned costs helps cost price of cement production to reduce considerably; and this is very importantly competitive advantage on the market At the same time HOMAC also needs to consider, study to carry system of information technology into application Recommendations to Vietnam Government Not to make supply and demand balance more serious, Vietnamese Government should reconsider general planning for development of cement industry It shouldn’t license investment in to more manufacturers nationwide till 2020 As quantity of cement factories is too numerous and they are not equally distributed Government shouldn’t require VICEM to stabilize cement prices on the markets causing impact on business effectiveness of whole VICEM in general and subsidiary companies of VICEM in specific, of which there is HOMAC; while prices of input factors for cement production such as coal, electricity, petroleum, input materials increase continuously; yet cement selling prices of companies of VICEM are not permitted to adjust without permission of Government Hence 73 Development strategy for HOMAC the period 2010-2020 companies of VICEM have to bear many disadvantages when competing on the markets Government needs to speed up development of financial markets, especially currency market so that companies can diversify investments as well as select capital mobilizing modes With developed currency market, company can invest his temporary idle/unused capitals effectively and can mobilize capitals easily when necessary Recommendations to Nghe An province HOMAC is located in Nghe An province, yearly it participates actively in payment to budget, and in social activities, making contribution to more and more development of Nghe An province Annually HOMAC is considered and elected as one of typical enterprises in above mentioned activities Accordingly it would like to propose leaders of Nghe An province paying more attention and support to HOMC in development of markets, materials for cement production so that HOMAC is getting more and more stably developed and can continue more contribution to the homeland province Recommendations to Vietnam Cement Corporation About prices and promotion regulations: Prices for selling cements should be completely adjusted by market mechanism and VICEM should assign Management Board and director of HOMAC to have full power/ right of decision on the foundation of preserving State’s capitals, increasing Return on Equities and Operating Margin so as to create the attractiveness to investors and shareholders, to satisfy index of return on investment and stable competition on the markets About finance: Within period of 2010 – 2012 and later years, HOMAC’s capital demand for expansion of production is relatively big, so Vietnam Cement Corporation should consider and can support or facilitate HOMAC to approach loans with preferential interests and in long time for loan return in order to execute strategies and targets defined 74 Development strategy for HOMAC the period 2010-2020 Cement Corporation needs to build quickly overall development strategy, then used as foundation so that subsidiary companies of VICEM can build their development strategies suitable to overall/general strategies CONCLUSION To execute policies and guidelines of Communist Part and State in arrangement, innovation and improvement of effectiveness of State’s company in order to create ones with regional great stature, high competition, and prestigious trademark, HOMAC needs to study seriously construction of general strategies for sustainable development to 2020, in orientation of next years, with consideration of cement production and business as the core ones, concurrently with diversifying of professions and industries to be suitable to potentials of the company In the background of that companies of Vietnam are integrating deeply and insensitively in to international economy, companies are required to arrange innovation and be ready to receive and apply many knowledge and experience of state of the art management methods, company’s structure suitable to ensure development of production, business of effectiveness, increase of competition capacity in the country as well as in the region In the period 2010-2020 HOMAC need to focus on consolidation and maintenance of his position on target markets, concurrently expansion of the markets, construction of selected trademarks in Central and South Vietnam in order to prepare strategies of investment into expansion of production capacity and diversification of products Authors would like to express gratitude to helps and attention of sections, units as well as leaders of Hoang Mai Cement Joint Stock Company, who facilitate us to penetrate into the reality; to learn about situations of the company’s action, production and business; and to have useful discussion and works 75 Development strategy for HOMAC the period 2010-2020 We are very thankful to teachers of Postgraduate Training Center – Ha Noi National University, International Master of Business Administration Program of Griggs University, who equip us with useful knowledge for daily works Although we try a lot during process of this assignment completion, but knowledge, and information sources of authors are still limited; data analysis and comparison are not really deep We need to study more in order to perfect this topic On the other hand, due to subjective limits from authors, this assignment still has many shortcomings and limits Accordingly authors expect to receive contribution opinions from scientists, lecturers, friends and colleagues for continuing to perfect this topic and expect this topic completed to be taken into construction of strategies for future sustainable development of Hoang Mai Cement Joint Stock Company We believe that if overall strategy plan is executed, HOMAC shall become quickly one of leading cement manufacturers in Vietnam, and reach regional level, yielding benefits to shareholders and Vietnam Thus HOMAC needs full supports from local and higher authorities, management units and Vietnam Government during process of executing its overall strategy plan 76 Development strategy for HOMAC the period 2010-2020 LIST OF REFERENCES Michael E Porter: Competitive Strategy Science & Technology Publishing House Hanoi 1996 Philippe Lasserre and Joseph Putti: Business strategy and management National Political Publishing House, Hanoi 1996 Le Bac Son (Eds.): Analysis of business strategy Publishing House, 2001 National Political Phan Thi Ngoc Thuan : Business strategy and planning of Science & Technology Publishing House, 2003 enterprises Management of organization behavior (MBA training programs of Griss) Strategic management - Authors PhD Le The Gioi , Dr Nguyen Thanh Liem, Mr Tran Huu Hai - Statistics Publishing house 2009 The portable MBA in marketing - Author Charles D Schewe and Alexander Hiam The report of HOMAC’s production and business results the period from 2004 to 2009 The report of VICEM’s production and business results 10 The annual report of the Vietnam Cement Association 11 Strategy (1967) BH Liddell Hart Basic Books 12 Strategic Planning (1979) Strategic Plan (1979) George Steiner George Steiner Free Press Free Press 13 "What is Strategy?" Michael Porter Harvard Business Review (Nov-Dec 1996) 14 Competitive Strategy (1986) Competitive strategy (1986) Michael Porter Harvard Business School Press 15 Top Management Strategy (1980) Benjamin Tregoe and John Zimmerman Simon and Schuster 16 Strategy: Pure and Simple (1993) Strategy: pure and simple (1993) Michel Robert McGraw-Hill Robert McGraw-Michel Hill 17 Decision No 108/2005/QD-TTg of the Prime Minister on May 16, 2005 : Vietnamese government approved of the development plans of cement in Vietnam until 2010 and orientation until 2020 77 Development strategy for HOMAC the period 2010-2020 APPENDIX Interviewing some key/leading managers and staffs of HOMAC Interviewees  Director of the company  Vice director in charge of business  Vice director in charge of technology  Leaders/managers of some units: finance, sale, production techniques and materials  Market staffs Interview time: December 2009 Interview contents 3.1 Situation of production and business activities Overall evaluation of HOMAC's production and business from 2005 to 2009 concentrate on following main contents:  Ability of being master of production equipment and technology  Current capacity of clinker and cement already reaches maximal limit  Cement markets are greatly promising, demand tends to increase highly  HOMAC's capacity of expansion and development meets many advantages 3.2 Capacity of labors  They have suitable experience and capacity to meet demands of works  There is phenomenon of moving labors to some other economic sectors with higher incomes 78 Development strategy for HOMAC the period 2010-2020 3.2 Policies of training and development of human resources  Policies of training and development of human resources are not competitive  Salaries, bonus, and treatment policies are not satisfactory to the labors with high professional level  HOMAC is on the process of building and perfecting policies for development of human resources, encouragement of labors according to market mechanism 3.3 HOMAC's development orientations in the future  HOMAC's development orientations in the future are suitable to general ones of Vietnam Cement  HOMAC shall carry out investment in construction of production lines with capacity expended to million tons of cement per year, 12,000 tons of Clinker per day, increasing HOMAC's capacity to 6.5 million tons of cement per year And it shall be the cement manufacturer with biggest capacity in Vietnam  HOMAC shall study and develop diversification of some types of products with core capacity of cement production 3.4 Quality of products  Basic features of HOMAC's products  Comparison with present rivals 79 Development strategy for HOMAC the period 2010-2020 TABLE OF CONTENTS Items Contents Pages The cover page Achnowledgement List of abbreviations Hoang Mai cement joint stock company HOMAC Viet Nam industrial cement Corporation VICEM External factors evaluation EFE Internal factors evaluation IFE Reseach and Development R&D List of tables Table 1.1 External factors evaluation matrix table 12 Table 1.2 Internal factors evaluation matrix table 13 Table 1.3 SWOT matrix 15 Table 2.1 Business sale of VICEM from 2005-2009 19 Table 2.2 Data on production and business of HOMAC from 2004-2009 24 Table 2.3 Report on production and business result in 2009 25 Table 2.4 Balance sheet 30 Table 2.5 The prices of compatitors in 2009 32 Table 2.6 Table of Vietnamese economic indexes from 2000-2008 38 Table 2.7 HOMAC’s share in some main markets 43 Table 2.8 Matrix of external factors environments 49 Table 2.9 Matrix of internal factors environments 51 Table 3.1 SWOT matrix 58 Table 3.2 HOMAC’s plan of output to the year 2020 60 Table 3.3 Estimated schedule for HOMAC development strategy in the period 2010-2012 71 80 Development strategy for HOMAC the period 2010-2020 List of Figures and chart Figure 1.1 Factors in the external bussiness environment Figure 1.2 PEST analysis model Figure 1.3 Porter’s five forces model Figure 2.1 The oganization chart of HOMAC 23 Figure 2.2 Consumption chart of the factory and the central region from 2004-2009 28 Figure 2.3 Diagram shows the productivity of labor in the cement industry 35 Figure 2.4 The Porter model applied for HOMAC 49 Figure 3.1 Model of distribution chanel 65 81 Development strategy for HOMAC the period 2010-2020 Items Contens Pages INTRODUCTION The urgency of the topic Objectives and application of the topic 3 Object and scope of research Method of research The structure of capstone Theotetical and practical bases to build strategies for Hoang Mai cement joint stock company Charpter from 2010-2020 1.1 The definition of strategy 1.2 PEST analysis and Porter’s five forces model 1.2.1 PEST analysis 1.2.2 Analysis Porter’s five forces model 1.3 Analysis funtions 11 1.4 General matrix of external and internal factors evaluation 11 1.4.1 General matrix of external factors evaluation (EFE) 11 1.4.2 General matrix of internal factors evaluation (IFE) 12 1.5 SWOT matrix 13 1.6 HOLCIM-The strategic development model of the world 2th biggest cement corporation 15 1.6.1 Building the strategic plan in Asia 15 1.6.2 Development strategies in Asia 16 1.6.3 Some products oriented by market types 16 82 Development strategy for HOMAC the period 2010-2020 Charpter The summary and analysis of Hoang Mai cement joint stock company’s Business environment 18 2.1 Introduction about Vietnam Cement Industry Corporation (VICEM) 18 2.2 The summary of Hoang Mai Cement joint stock Company 20 2.2.1 History of origin and development 20 2.2.2 Funtions and duties 21 2.2.3 The personnel structure 22 2.2.4 State and result of production and business 2004-2009 24 Analysis of the internal encironment of HOMAC 26 2.3.1 Production and technology 26 2.3.2 Marketing and sales 27 2.3.3 Financial Analysis 29 2.3.4 Organizational structure and funtion analysis 33 2.3.5 Humant Resource Analysis 34 2.3.6 Research & Development and technology & information activities 36 Analysis of External Factors 36 PEST Analysis 36 2.4.1.1 Polictical and legal factors 36 2.4.1.2 Domestic and international economic factors 38 2.4.1.3 Cultural, social and geographical factors 40 2.4.1.4 Factors in ther development of Science and Technology 40 Industry analysis by Porter model 42 2.4.2.1 Threat of new entrants 42 2.4.2.2 Rivalry among established companies 42 2.4.2.3 The bargaining power of byers 47 2.4.2.4 The bargaining power of supplies 48 2.4.2.5 The threat of substitute products 48 2.3 2.4 2.4.1 2.4.2 83 Development strategy for HOMAC the period 2010-2020 Matrix of total factors of internal and external environments 49 2.5.1 Matrix of total external factors environments 49 2.5.2 Matrix of total factors of internal enviroments 51 2.5 Charpter 3.1 Selection of development strategies for HOMAC in the period 2010-2020 and implementation plans in the period 2010-2012 54 S.W.O.T Analysis 54 3.1.1 Strength and weakness 54 3.1.2 Opportunities and Threats 55 Selection of strategies for HOMAC in the period 2010 – 2020 56 3.2.1 Mission declaration of HOMAC 56 3.2.2 Selection of strategic alternatives for HOMAC in the period 2010-2020 57 3.2.2.1 Growth Strategies 60 3.2.2.2 Strategies of market expantion 62 3.2.2.3 Funtional strategies 64 Stategies excuting plans for years: 2010 – 2012 71 RECOMMENDATION AND CONCLUSION 74 LIST OF REFERENCES 78 APPENDIX 79 3.2 3.3 84 ... higher cement consumption levels than the rate of investment to expand cement plants Due to the imbalance, cement factories in the northern area are very difficult to find markets, hence they need