Luận văn thạc sĩ quản trị kinh doanh quốc tế MBA (168)

BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT CAPSTONE PROJECT REPORT BUILDING BUSINESS STRATEGY FOR 12/9 BUILDING BUSINESS STRATEGY 12/9 PETROVIETNAM CEMENT JOINTFOR STOCK PETROVIETNAM CEMENT COMPANY IN PERIOD OFJOINT 2010 - STOCK 2020 COMPANY IN PERIOD OF 2010 - 2020 Group: 12 -VO110 Students: Group: 12 -VO110 Nguyen Thi Le Tram (Group leader) Students: Phan Sy Thang Nguyen Thi Le Tram (Group leader) Tran Nghia Hoa Phan Sy Thang Bui Thai Truong Tran Nghia Hoa Ngo Van Toan Bui Thai Truong Ngo Van Toan HA NOI 2011 HA NOI 2011 TABLE OF CONTENTS , 2011 V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 ABBREVIATIONS INTRODUCTION General background and rationale of the assignment topic Purpose and object of the study Methodology The assignment is divided in to main chapters as follows .6 CHAPTER 1: THEORETICAL BASIS TO BUILD CORPORATE’S BUSINESS STRATEGY 1.1 The concept and the role of corporate strategy: .7 1.1.1 Corporate Business Strategy concept: .7 1.1.2 Role of business strategy to the corporate 1.2 How Strategy is Managed - Strategic Management .10 1.2.1 Determining the function, mission and the strategic objective of the corporate 11 1.2.2 Assessing the external environment 13 1.2.2.1 Macro environment – National business environment (using PEST model) 13 1.2.2.2 Micro-environment 14 1.2.3 Analysis of internal business 16 1.2.3.1 Resource analysis of a corporate 16 1.2.3.2 Analysis of competition competence of businesses 18 1.3 Developing strategic planning .18 1.4 Analysing and selecting stategy 20 1.4.1 Selecting corporate strategy 21 1.4.2 Selecting product strategy - business base strategy 22 1.5 The specific characteristics of building business strategy of PVC 12/9 .24 CHAPTER II: BUSINESS ENVIROMENT ANALYSIS AND INTERNAL ANALYSIS OF 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY 25 2.1 History of establishment and development 25 V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 2.1.1 Functions and duties: 26 2.1.2 Organizational Structure .27 2.1.3 Vision and Strategic Mission of the Company .27 2.1.4 Business philosophy .28 2.1.5 The major business areas: 28 2.2 Analysis of elements affecting business performance of 12/9 PetroVietnam Cement Joint Stock Company 28 2.2.1 Law – Political elements .28 2.2.2 Economic factor: 29 2.2.3 Social factors 30 2.2.4 Natural factor 31 2.2.5 Technological factors .31 2.3 Sector environment analysis 32 2.3.1 Pressure of suppliers .32 2.3.2 Pressures of customers 32 2.3.3 Threat of potential rivals .33 2.3.4 Threat of substitute products 33 2.3.5 Analysis of competition intensity of the current rivals 34 2.4 Analysis of internal PVC12/9 35 2.4.1 Resource analysis of PVC 12/9 35 2.4.1.1 Staff and management: 35 2.4.1.2 Finance 37 2.4.1.3 Material and Technical facilities: .38 2.4.2 Analysis of PVC 12/9 ‘s competition ability 42 2.5 SWOT matrix 44 2.5.1 Strengths, Weaknesses, Opportunities and Threats of PVC 12/9 44 2.5.2 SWOT matrix of PVC 12/9 46 Chapter III: PROPSING STRATEGIES AND PERFORMANCE SOLUTION OF THE COMPANY 49 V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 3.1 Developing strategy of PVC 12/9 from 2011-2015 and orientation to 2020 49 3.2 Selection of strategies 50 3.2.1 General strategy of an enterprise from SWOT matrix 50 3.2.1.1 Expanding marketing strategy 50 3.2.1.2 Strategies to promote the competitiveness 51 3.2.1.3 Exporting strategy 51 3.2.1.4 Strategy to diversify industries and businesses .52 3.2.2 Selection of a specific business strategy .53 3.2.2.1 Product and services strategy 53 3.2.2.2 Distribution channel development strategy 54 3.3 The strategic solutions 55 3.3.1 Product and service solution 55 3.3.2 Financial Solutions 56 3.3.3 Science and technological solution .57 3.3.4 Organizing structure and controlling production 58 3.3.5 Human resource development 58 3.3.6 Distribution channels and market development solution .59 3.4 Itinerary .59 CONCLUSION .60 REFERENCES 62 APPENDIX 63 V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 ABBREVIATIONS Order Abbreviation PVN PVC 12/9 CP CP PX1 10 11 12 CBNV UBND ROA ROE WTO AFTA HĐQT BGĐ Meaning Vietnam Oil and Gas Group PetroVietnam Cement Joint Stock Company Share Share of PetroVietnam Cement Joint Stock Company Staffs People’s Committee Return on Asset Return on Equity World Trade Organization ASEAN Free Trade Area Board of Directors Board of Managers INTRODUCTION General background and rationale of the assignment topic The globalization and international economic integration, with the strong development of science and technology have created huge opportunities, however; V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 also pose many challenges for enterprises Enterprises always face with competitions which are severe and have the sense of “internalization”, therefore, to survive and develop in this context, each enterprise is required to have its own business strategy to exploit advantages and to turn international commitments into their actions, to promote internal resources combining production and business closely, to renew continuously technology, and improve the product quality and the competitiveness to strengthen its position in global economic integration Participating in production and business activities in the cement industry and construction material manufacturing industry- an industry currently is facing with the severe competitive pressure, not only among domestic enterprises but also competition with exported cement- this fact requires enterprises in cement and construction material industry in general as well as PVC12/9 in particular have to a reasonable business strategy to keep their positions stably and develop Starting from the above fact, the group 12-VO11 has chosen the topic: “Building up business strategies for PVC 12/9 in the period of 2011-2020” to research with the aim of building a reasonable business strategy for PVC 12/9, to help the company be active in business, perform well short-term goals as well as be more successful in the future Purpose and object of the study * Purpose of the study: - To analyze and assess the state of the whole production and business of PVC 12/9 - To select and propose business strategies for the company in the period of 2011-2020 * Subject of the study: Internal and external environment of PVC 12/9; business strategies of the company in the period of 2011-2020 Methodology V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 This study uses qualitative research methods including observation, interview, group discussion to synthesize, analyze and compare the primary sources as well as secondary sources about business environment and operation condition of PVC 12/9 - The quantitative methods such as statistical analysis, comparison, and synthesis, etc are based on the analysis of primary data and secondary data The secondary sources are collected from various source such as PVC 12/9, PVN, Minister of Construction, Minister of Industry and Trade, Minister of Planning and Investment, Nghe An Statistic Department and reports of Anh Son district (Nghe An), press information The primary sources are collected from the meeting, interviewing of the PVC 12/9‘s leaders, and staffs to learn more about those information which is not released in annual reports and about some strategic orientation of the company in the following years The assignment is divided in to main chapters as follows Chapter 1: The theoretical background to corporate’s strategy Chapter 2: An Analysis of business environment and internal environment of PVC 12/9 Chapter 3: Recommendation of strategy and solutions for PVC 12/9 CHAPTER 1: THEORETICAL BASIS TO BUILD CORPORATE’S BUSINESS STRATEGY 1.1 The concept and the role of corporate strategy: V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 1.1.1 Corporate Business Strategy concept: In economics, there are now many definitions of strategy which are different depending on each author’s conception In 1962, Chandler defined “Strategy is the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.[1] Chandler is one of the first to initiate strategic management theory Until 1980 when the subject of strategic management has become ripe, Quinn gave a more general definition: "a strategy is the pattern or plan that integrates an organization's major goals, policies, and action sequences into a cohesive whole Then, Johnson and Schole define strategy as follows: "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" In other words, business strategy is: - Where is the business trying to get to in the long-term (direction) - Which markets should a business compete in and what kind of activities is involved in such markets? (Markets; scope) - How can the business perform better than the competition in those markets? (advantage)? - What resources (skills, assets, finance, relationships, technical competence, facilities) are required in order to be able to compete? (resources)? - What external, environmental factors affect the businesses' ability to compete? (environment)? - What are the values and expectations of those who have power in and around the business? (stakeholders) * Features of a business strategy: [] Chandler, A (1962) Strategy and Structure Cambrige, Massachusettes MIT Press V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 - A business strategy defines the purpose and the development direction of an enterprise in a relatively long period (three years, five years, even more…) to ensure the business of this enterprise to develop continuously and steadily in volatile business environment of the market economy - A business strategy only outlines a long-term and oriented direction while in practice, business has to implement the principle of combining the strategic objective with the situation objective, combining strategy with tactic and plans of operational business Building up a strategy is to outline the framework for longterm business activities of an enterprise in the future on the basis of information collected through the process of analyzing and forecasting - All decisions of important strategies in the process of building, deciding, organizing to implement, evaluating, and controlling strategies are focused on the highest leaders of an enterprise However, the development/construction of an enterprise’s strategies is by the staff of consultants participating in providing information, but making important decisions belongs to the leaders of that enterprise - A strategy is guaranteed the secrets of business information in the market economy - A business strategy firstly and mainly is built up for businesses, specialized busisness fields, tradition, and strengths of an enterprise That makes an enterprise to develop, select and implement strategies as well as participating in business on the marketplace with preparation and strengths 1.1.2 Role of business strategy to the corporate In any filed of management, a business strategy is still confirmed the important role in the following sides: - To orient long-term activities and to be a solid foundation for the implemetation of operational activities Lack of strategy or unclear strategy will make activities lose direction, only see in the short term but cannot see in the longterm, only see a part without seeing the whole V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 - To create a solid foundation for activities of research and development, investment, training human resources; to strengthen the competitive position of enterprises, and to ensure the sustainable development of enterprises In fact, most of negotiation mistakes of investment, and implementation research are derived from lack or mistakes in determining strategic objectives - To provide the foundation for enteprises to actively develop aprropriate business directions to environment on the basis of making use of opportunities, avoiding risks, and promoting the advantages of enterprises in business Strategy at Different Levels of a Business Strategies exist at several levels in any organization - ranging from the overall business (or group of businesses) through to individuals working in it Corporate Strategy - is concerned with the overall purpose and scope of the business to meet stakeholder expectations This is a crucial level since it is heavily influenced by investors in the business and acts to guide strategic decision-making throughout the business Corporate strategy is often stated explicitly in a "mission statement" Business Unit Strategy - is concerned more with how a business competes successfully in a particular market It concerns strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc Operational Strategy - is concerned with how each part of the business is organized to deliver the corporate and business-unit level strategic direction Operational strategy therefore focuses on issues of resources, processes, people etc 1.2 How Strategy is Managed - Strategic Management In its broadest sense, strategic management is about taking "strategic decisions" - decisions that answer the questions what the business strategy is In V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 Laos customers This is a feasible strategy in the context when the markets in the country are saturated; the ability to expand domestic markets is relative low Together with the exporting strategy, it is necessary for PVC 12/9 to invest in technological lines of brick production to diversify manufacturing industries, and businesses 2.5 Selection of a specific business strategy 2.5.1 Product and services strategy a The projects implemented in the period of 2011 -2015 and oriented to 2025 - Enhancing the production capacity, improving the technological line - Promoting the strategy to export products - Promoting the strategy to diversify industries and businesses b The proporation of the economic structure With the strategy to diversify industries and businesses in the period of 20112015, PVC 12/9 will have changes in the economic structure, specifically: - Cement production makes up 70% of productivity and revenue - Brick production makes up 20% - Supply of executing and constructing services makes up 10% In 2025, the economic structure will change with the direction of gradually reducing the proportion of production, and increasing services proportion, specifically : - Cement production makes up 50% of productivity and revenue - Brick production makes up 30% - Supply of executing and constructing services makes up 20% 2.5.2 Distribution channel development strategy To business effectively, together with the production process, the company will perform its business model with selling through the main distributors and the project distributors A, Sales through the main distributors: 56 V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 It is a method of choice in each area of one or more individuals, units to meet the criteria as the main distributors The main distributors are people who directly purchase the company’s products through representative offices or order forms; the delivery can be registered via fax or directly The prerequisite condition of the method of the main distributors is that money is paid before delivery The main distributors are responsible for organizing the registered retail agents in the area to manage the transport and avoid dumping in the region B, Sales through the project distributors: To supply timely the amount of cement for the key constructions of State, the company selects the project distributor model, which is the company contracts to provide directly types of cement for the construction contractors The advantage of this model is that cement products of PVC 12/9 are provided directly according to the demand of the constructions which consume the large amount of structural materials, including cement such as hydroelectric projects, bridges, commercial centers, and high buildings, etc The nature of selling-through-main distributor model is the harmony establishment of interests between producers and distributors This model allows the company to make use of the social competence in the consumption, save selling costs but it requires that the main distributors are really qualified, especially finance Based on the amount of consumption and the payment possibility of each main distributor, and project distributor, the company makes sales support policy by agreeing with paying lately through bank guarantee to each specific unit with the value equivalent to the payment in each time The strategic solutions 3.1 Product and service solution - The company has to diversify cement products: producing Portland cement, black cement, white cement to serve the needs of the market 57 V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 - The company has to increase products’ value through packing and labeling system - The company has to diversify service products: building bricks, stone and gravel - The company has to enhance the quality testing, control strictly the production process to ensure product quality in accordance with the needs of the domestic market and export markets Testing the quality of input material and fuel before storing, sampling, analyzing, evaluating; controlling strictly/closely the quality of finished products; collecting customers’ feedbacks to have advisors, and timely adjustments - Signing economic contracts with partners supplying materials, input/raw materials/fuel to ensure the timely response of quality and quantity as required Selection method of suppliers complies with the current regulations of the State, competing both quality and price Because the source of raw materials, equipments have constantly the changes of price, but the leadership of functional departments promptly negotiated/talked and agreed with the most favorable price for the company 3.2 Financial Solutions - On 12/2010, the company officially joined in transactions on Vietnam’s stock market with code PX1 Therefore, when participating in this playing-field, with many changes and risks, the company is required to regularly review, evaluate the financial situation to make timely decisions Besides, the company also has to conduct openly and explicitly information about the financial situation - The company needs to take advantage of support from the member units of PetroVietnam National Corporation; use effectively and flexibly funding support - The company continually improves the image and prestige, thereby contributing to enhance the efficiency of the production and business activities 58 V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 - The company needs to continue to consider and rearrange the management and production organization in order to exploit resources efficiently and save the cost of business management - The company plans to exploit and use the customers’ capital source properly in order to increase the index of monetary balances - The company has to consider the ability to sales or quality, types of inventory materials to gradually increase the speed of turnover of goods - Increasing rapidly the rotation of capital use, avoiding appropriating capital much It is also necessary to see more sales methods of the company such as lowpayment sales, preferential policies to customers, or strategies of expanding markets and business partners However, the company needs to control the time to collect debts properly, avoiding appropriating a large amount of capital, affecting the business capital of the company and business results generated by the loans’ interest - One of the decisive solutions is to control the progress of performing construction contracts, to install a new factory and operated as planned in order to promote the efficiency of investing capital to guarantee the payment of bank debts, and the interests of shareholders If the project is delayed, it will affect largely the company’s finance, with high amount of initial capital, interest arising daily will not be effective if the time to construct is lengthened 3.3 Science and technological solution - Applying technology to rationalize production: applying technological advance, rationalizing production such as installing variable frequencies for the motor of fans, or controlling unnecessary gas, fitting heat exchangers, collecting condensed water to make use of materials for production is the top priority in the cement factories today That the low investing capital brings high efficiency both increases productivity and save electricity - Improving the production line: to renovate and upgrade the equipment line in order to increase the kiln’s productivity up to 10%, improve the product quality 59 V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 while the cost of fuel, electric power consumption rise very little, thus the energy cost is reduced and fuel consumes over ton of products Processing materials and uniforming the distribution of materials: using round warehouse instead of long ones, using grinding equipment of the new generation to grind materials and coal The stage of burning by two-platform instead of three –platform kiln reduces the consumption of refractory materials, the equipment’s weight, and the cost of construction, establishment and maintenance; using the five-floor tower, Calcinner high capacity system Cement grinding technology: using roll grinding mill 2+2, 3+3, Horomill to grind cement reduces 20-30% the consumption of energy compared with a roll grinding mill (Horomill consumes 24kWh/ton cement, a roll grinding mill is 20kWh/ton cement) and improves the fineness of cement up to 3600cm2/g The packing stage: using silo containing cement with automatic high capacity packing machines ensures the accuracy of the weight of the cement bags below 0,25kg/bag, using cement bag or clinker exporting equipments with accurate testing equipments., - Applying the technology of waste heat recovery to generate electricity: in the process of production, large amount of waste and dust with high temperature (about over 3000 C), mainly in the basic dry/heat tower PH and cooled clinker are eliminated to pollute environment, waste energy and nature resources, and reduce the efficiency of production, cement factories need to be equipped with electric system making use of exhausted heat Specifically, a cement factory with the capacity of 20,000 tons/day will have generating capacity of about 23,000KW This is a large number for the industry with high energy consumption capacity as the cement industry Taking advantage of this power, the energy problem in the cement factories will be solved significantly, not only bring economic benefits but also contribute to protect environment Therefore, the technology which makes use of exhausted heat to generate electricity is considered as power saving solution and highly interested in the cement industry over the world as well as in Vietnam 3.4 Organizing structure and controlling production 60 V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 - Assigning tasks and responsibility for the members in the leadership of the company to direct and monitor specifically each field, to check and re-arrange departments, factories from management to allocation of jobs - Deploying scheme, orientation of human resource to guide, cultivate and replace the lead positions in the near future Building plans to evaluate officers’ standards, transferring and appointing work in order to suit and improve working efficiency - Strengthening the management: assets, finance, products, material and equipment are more and more improved closely 3.5 Human resource development - Building recruitment plans, attract experienced and qualified (high level) staff in the fields: mechanics, automated electricity, silicate,etc; organizing training to improve skills for employees to ensure the adequate conditions operating new technology lines from/since the first day of working - Building plans of organizing a tour to study technology lines of some factories, contracting to train human resources to meet the qualifications to operate the production in new factories stably, ensure the intensiveness of technology and machine - Re-arranging the company’s structure properly, allocating human resource reasonably to operate effectively - The company always focuses on the management of workers‘safety in production, ensures labor protection equipments, improves working environment, maintains a safe shift-eating diet, and checks officers’ health periodically 3.6 Distribution channels and market development solution Kinds of products are manufactured based on the demands and the maturity of the market Maybe in this market, cement is sold under the form of packet, but in other market, it is sold bulk cement or other forms such as ready-mix concrete Distribution market from this market to other one is not the same/similar For bagged/packed cement, or bulk cement, the most suitable selling method is 61 V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 distributors/exclusive retailers But for ready-mix concrete, producers can sell product directly to the last user In terms of high transport cost, the best way to enter the market in the international business environment is set up local establishments/agencies/offices Continue to export cement to Laos market In the current situation that supply exceeds demand in national market, this solution can be seen as a long-term strategic solution Itinerary Year 2011 Content - Stabilize production activities on the old production line to ensure job and living standards for labors in the company - Building up and approving business strategy of PVC 12/9 by 2015 and orientation by 2020 - Finish the project to construct production line with capacity of 1500 tons clinker/day with total invested capital of 1000 billion dong - Organize training workers to operate the new production line - Construct product distribution system of the new line 2012 - Building up and approving business strategy of PVC 12/9 - Focus on accounting expenditure of the project to define asset value in business - Operate the line to ensure designing capacity and output cement product quality - Operate distribution channel: + Via agency system and distributors in Nghe An province, Ha Tinh province and Quang Binh province … + Consume products in project of petrovietnam sector according to policy of PVN - Researching more about Laos market and export cement to this 62 V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 market 2013-2015 - Construct financial plan to pay original debt, interest - Constantly organize checking, evaluating operational situaiton of the project and product distribution system to improve constructed option - Increase charter capital and post to HASTC - Study feasibility of project to construct heated brick production line with material from cement of the company 2015-2020 - Promote cement export to Laos - Focus on product consumption and capital withdrawal to pay debt for first phase investment; evaluate investment effect to expand investment - Invest in unheated brick production line and raise capacity of the factory to 2,4 million tons cement/year - Developing cement and brick distribution channels in the Middle region and in Laos - Expand some trading sectors such as construction…based on self-provided materials to optimize effect and create more jobs 2020 for labors - Summarizing and assessing the business strategy of PVC 12/9 CONCLUSION 63 V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 Solving the supply – demand problem is the concern of many cement companies at the present Without the authorities’ timely intervention, this will be the problem of Vietnam cement companies The abundance of cement leads to unfair competition of cement companies Because of abundant supply which leads to the increasing inventory, some companies reduce the lower price than the market price They accept to break even or sell at a loss to pay money to the bank It is clear that in the long-term, that will cause serious outcome to the cement industry However, in order to overcome the difficulty, the cement companies should not wait for the policies of the Government, the Ministry of Construction and Vietnam Cement Corporation, they should positively face with the real condition and find right solution to survive and develop According to our group, the strategy to diversify products and increase exportation is a good way for PVC 12/9 Our group hopes that the Study to build up business strategy for PVC 12/9 in the period of 2011 – 2020 will have great reality value to the company We would like to express our great thank to the Board of Directors, Board of Managers and staffs of PVC 12/9 who helped us to finish this study Moreover, our warm and sincere thanks are due to all of the teachers who devotedly to teach and instruct us from accumulating knowledge, selecting topic, methodology to finishing the study Due to the real experience and limited knowledge, our study also has some mistake and we would appreciate you to give advice and recommendation 64 V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 REFERENCES Vice-Professor & Dr Ngo Kim Thanh, Vice-Professor & Dr Le Van Tam (2009), Strategic Management, National Economic Publisher Vice-Professor & Dr Nguyen Thanh Do, Dr Nguyen Ngoc Huyen (2002).Business Strategies and Corporate Development Strategy – Socialist Labor Publishing House Dr Le Van Tam (2000).Strategic management Statistics Publishing House Nguyen Huu Lan (2001) Competitive status strategy management Statistics Publishing House GRIGGS University, Strategic Management Textbook Michael E Porter: Competition Strategy Scientific and Technical Publishing House Hanoi 1996 Annual Report of Vietnam Cement Association Decision Number 108/2005/QĐ-TTg dated May 16th 2005 of Vietanm’s Prime Minister on approval of Vietnam’s cement industry development plan to 2010 and orientation to 2010 Decision Number định 115/2001/QĐ-TTg on approval of General development of Vietnam’s construction material sector plan to 2010 10 Report of cement sector, Habubank Security Comapany (2011) 11 Y Nhung (18/6/2010), Cement sector and the question that supply exceeds demand, Vietnam Economy 12 Minister of Labour, War Invalids and Social Wellfare (6/2011), SocioEconomy Condition in the first six months 13 Financial report in 2010 of PetroVietnam 12/9 14 website: http://www.ximanganhson.com/ of PetroVietnam 12/9 15 website: http://www.moc.gov.vn Minister of Construction 16 website: http://www.pvn.vn PetroVietnam Oil and Gas Group 17 Website: http:// www.vicem.vn Vietnam Cement Industry Corporation 65 V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 APPENDIX BALANCE SHEET OF PVC 12/9 (31/12/2010) A Current asset (100=110+120+130+14+150) 100 I Cash and the cash equivalent 110 Cash 111 Cash equivalent 165,551,212.089 41,604,301,588 1,296,691,632 -40,307, 112 609,956 119,171,356,573 33,744,787,231 1,207,084,049 32.537.703.182 II Short-term financial investment Short-term financial 120 6,000,000,000 56,000,000,000 investment III Receivables Customer receivables Prepaid for sale Internal receivables Other receivables Standby for difficult 121 130 131 132 133 138 6,000,000,000 84,010,788,229 13,160.499,266 68.804.392.082 2,045,896,881 56,000,000,000 15,542,153,469 13,194,287,047 794,127,254 5,498,018,475 required receivables(*) IV Inventory Inventory V Other current assets Short cost prepaid Taxes and other State 139 140 141 150 151 12,842,272,002 12,842,272.002 21,093,850,270 2,419,899,655 (3,944,279,307) 11,955,157,304 11,955,157,304 1,929,258,569 - accounts receivable Other current assets B Fixed assets I Long-term receivable Internal long-term 154 158 200 210 17,337,113,945 1,336,836,675 268,034,425,331 12,000,000 1,917,258,569 51,932,175,229 receivables Other long-term receivables II Fixed assets Tangible capital assets - Original cost of fixed 213 218 220 221 222 267,712,922,207 17,555,669,984 72,812,641,956 51,646,707,389 24,721,169,665 78,053,036,179 66 V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 assets property - Accrued depreciation (*) Fixed assets leasing Intangible capital assets - Original cost of fixed 223 224 227 (55,256,971,972) 118,235,446 (53,331,866,514) 87,505,284 139,04 assets property - Accrued depreciation (*) Incomplete cost of capital 228 229 179,047,619 (60,812,173) 7,619 (51,542,335) construction III Real estate investment III Long-term financial 230 240 250.039,016,777 - 26,977,080,059 - investments V Other fixed assets Long-term prepaid cost Other long-term assets Total assets 250 260 261 262 321,503,124 170,067,744 151,435,380 285,467,840 142,879,200 142,588,640 (270 = 100 + 200) LIABILITIES & OWNER’S 270 433,585,637,420 171,103,531,802 EQUITY A Liabilities (300 = 310 + - - 330) I Current liabilities Short-term borrowings and 300 310 239,535,514,617 23,680,512,422 28,236,238,655 28,053,833,292 liabilities Trade account payable Advances from customers Taxes and amount payable 311 312 313 13,510,000,000 5,103,314,974 165,237,500 13,909,851,343 5,911,734,654 147,478,000 to the State budget Payables to employees internal payables Other payables 10 Short-term provision II Long-term liabilities Long-term trade payables Long-term loans and 314 315 317 319 320 330 331 55,272,013 2,842,682,858 914,183,035 4,897,509,377 215,924,244,363 - 4,327,903,402 182,405,363 - liabilities Provisions for severance 334 215,750,379,000 allowance 336 104,551,195 67 104,551,195 V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 Long-term provisions Bonus and welfare funds B Equity (400 = 410 + 430) I Equity 1.Legal capital Share premium Other legal capital Treasury shares Investment and 337 338 400 410 411 412 413 414 72,000 69,242,168 193,980,880,635 193,980,880,635 200,000,005,538 - 72,000 77,782,168 142,867,293,147 142,867,293,147 149,000,005,538 - development funds Financial reserve funds Other owner’s fund 10 Retained earnings 11 Basic investment and 417 418 419 420 881,097,594 125,871,084 (7,026,093,581) 881,097,594 125,871,084 (7,139,681,069) construction capital II Other cost and funds Total liabilities and 421 430 equity Off balance sheet items Leasehold assets Materials and goods kept 440 433,585,637,420 - 171,103,531,802 - or processed for others Goods sold deposited by - - others Bad debts already treated Foreign currencies Estimates of operating cost Current capital - - depreciation - - APPENDIX 2: THE TECHNOLOGICAL LINE OF PVC 12/9 Numbe r Technological equipments Kiln Technical Standards - The size of 4.5m x 70m with Cyclon heat exchanging system branches and floors and Canciner system with the typical type, easy to operate 68 V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 and adjust temperature, Kiln capacity of 4,400T Clinker/day (in 2006, it is improved to increase capacity of 4,400T clinker/day) The kiln is designed to use multi-channel coal nozzeles of PILAR to provide 100% burning Anthracite coal, oil is only used in cases drying and the kiln is not stable - This is the most modern burning nozzle in the world today with preminent features: easy to operate, fuel easy to catch fire, and burning well The quantity of fuel burned in Canciner is 55/60% of the total amount of fuel, the rest is burned in the kiln Clinker after out of the kilnis put on the cooling rig-the type of BMH SA High productivity of heat recovery (air temperature 3>9000 C), high efficient of heat recovery (Air temperature 3>9000 C), the ability of cooling quickly make the quality of Clinker always stable Cement - Cement out of grinding mill is fed into marble grinding mill grinding mill together with gypsum and additives The cement grinding mill is a two-section (marbale) grinding mill operating according to the close process with the highly separated system of productivity 240T/h, the fineness of cement reached 3.200cm2/g Finished cement products are transported to the four silos containing powdered cement with a total capacity of x 10,000 T by the automatic tray system and lift System of bucket - From the bottom of the silo container, through the fuel packing and releasing door, cement is moved to the storage tanks of 69 V0110.Group12 BUILDING BUSINESS STRATEGY FOR 12/9 PETROVIETNAM CEMENT JOINT STOCK COMPANY IN PERIOD OF 2010 - 2020 shipping the packing machine or the parts exporting bulk cement - The system of exporting cement consists of two spouts exporting for automobile with the productivity of 150T/h.The packing system includes packing machines BMH which have spinning spouts with automatically quantitative scale, the productivity of 120T/h The cement bags are moved by the conveyor system System of - With the QCX quality management system, managing and materials, fuel is used to produce as well as production testing exported out of the factory, sampled automatically and production’s periodically by the system, and brought to laboratory quality with the analyzing system by Xray machine, the continuous spectrum analyzer of the latest generation of the company ARL9800-XP produced in Switzerland with quick analysis results, high accuracy combined with a variety of other devices such as stoves, electric laboratory kilns, thermal analysis equipment, chemicals, the quantitative equipments, measuring equipments, sample testing equipment, supplied by the FCB contractors with high sensitivity and accuracy according to the international standards provides the most rapid and accurate analysis results 70 V0110.Group12 ... Total assets Rate of contributed capital recovery (ROE) = Doanh thu shareholders Net profits of public Total shares of public shareholders 17 Doanh thu V0110.Group12 BUILDING BUSINESS STRATEGY FOR