Luận văn thạc sĩ quản trị kinh doanh quốc tế MBA (218)

GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM TABLE OF CONTENT ACKNOWLEDGEMENT LIST OF TABLE AND FIGURES OVERALL CAPSTONE PROJECT REPORT FORMULATING BUSINESS STRATEGIES CHAPTER I: THEORIOTICAL BACKGROUND TO FORMULATEOF THE BUSINESS STRATEGY 1.1 RELATED CONCEPTS VINCOM JSC COMPANY 1.1.1 (2012 – 2017) Concept of business strategy 1.1.2 Concept of strategic management 1.1.3 Task of strategic management Group:THE 06 BUSINESS STRATEY 1.2 FORMULATE 1.2.1 Choose the mission and target 1.2.2 External assessment 10 Internal assessment Hoang 11 Students: Van Tuyen Mai Ba Kieu Phuong TECHNIQUES TO ANALYSE BUSINESS STRATEGY Vu Ngoc Minh 1.3.1 Internal factor evaluation matrix (IFE) Hoang Thi Tuyet Mai 1.2.3 1.3 9 13 13 1.3.2 External factor evaluation matrix (EFE) 13 1.3.3 Competitive Profile Matrix 14 1.3.4 Quantitative strategic planning Matrix 15 1.4 TOOLS FOR ADOPTING BUSINESS STRATEGY 16 1.4.1 SWOT Matrix 16 1.4.2 I – E Matrix: Combination of internal and external factors 17 1.4.3 Quantitative Strategic Planning Matrix (QSPM) 18 HA NOI 2011 TABLE OF CONTENT ACKNOWLEDGEMENT LIST OF TABLE AND FIGURES OVERALL CHAPTER 1: THEOREOTICAL BACKGROUND TO FORMULATE THE BUSINESS STRATEGY 1.1 RELATED CONCEPTS 1.1.1 Concept of business strategy 1.1.2 Concept of strategic management 1.1.3 Task of strategic management 1.2 FORMULATE THE BUSINESS STRATEY 1.2.1 Choose the mission and target 1.2.2 External assessment 10 1.2.3 Internal assessment 11 1.3 TECHNIQUES TO ANALYSE BUSINESS STRATEGY 13 1.3.1 Internal factor evaluation matrix (IFE) 13 1.3.2 External factor evaluation matrix (EFE) 13 1.3.3 Competitive Profile Matrix 14 1.3.4 Quantitative strategic planning Matrix 15 1.4 TOOLS FOR ADOPTING BUSINESS STRATEGY 16 1.4.1 SWOT Matrix 16 1.4.2 I – E Matrix: Combination of internal and external factors 17 1.4.3 Quantitative Strategic Planning Matrix (QSPM) 18 CHAPTER II: INTERNAL, EXTERNAL ASSESSMENT TO FORMULATE THE BUSINESS STRATEGY FOR VINCOM JSC 20 2.1 COMPANY INTRODUCTION 20 2.1.1 Founding and developing 20 2.1.2 Task and function of the company 20 2.1.3 Company’s resources 21 2.1.4 Organizational chart and human resource 22 2.1.5 Company’s current business situation 23 2.1.6 Company’s characteristic 24 2.1.7 Vision and Mission 24 2.1.8 Developing target 25 2.2 EXTERNAL ASSESSMENT 25 2.2.1 Macro environment 25 2.2.2 Industrial environment 30 2.2.3 External factor evaluation matrix (EFE) 45 2.3 INTERNAL ASSESSMENT 46 2.3.1 Human Resource 46 2.3.2 Finance 48 2.3.3 Administrative activity 53 2.3.4 Technology and safety job 54 2.3.5 Internal factor evaluation matrix (IFE) 56 CHAPTER III: ADOPTING THE BUSINESS STRATEGY 57 3.1 SWOT MATRIX ANALYSIS 57 3.2 I-E MATRIX ANALYSIS 61 3.3 QSPM MATRIX ANALYSIS 61 3.4 ADOPTING THE BUSINESS STRATEGY FOR VINCOM JSC 64 3.5 IMPLEMENTATION THE STRATEGY 64 3.5.1 Human resoure solution 64 3.5.2 Financial solution 65 3.5.3 Marketing and Pr solution 65 3.6 SUGGESTION 67 CONCLUSION 68 REFERENCE 69 ACKNOWLEGEMENT In completing this capstone project, we have been receiving precious individual and collective support We would like to express our gratitude to all the staff of VINCOM JSC Company, especially Ms Nguyen Thi Thu Thuy – Assistant of General Director , who have given us good conditions and highly valuable support in providing documentation as well as studying conditions in our completing this project We would like to undertake that the contents of this assignment are fulfilled with our best efforts in studying, finding and choosing the topic for analyzing of all the members of the group and with reference to a number of documents (as quoted hereafter) We would also like to commit that, this project has not been submitted to any other studying or training programs Hanoi, September 2011 Group of Authors LIST OF FIGURES AND TABLES No Figure 1.1 Figure 1.2 No Table 1.1 Table 1.2 Table 1.3 Table 1.4 Table 1.5 Table 1.6 Table 2.1 Table 2.2 Table 2.3 Table 2.4 Table 2.5 Table 2.6 Table 2.7 Table 2.8 Table 2.9 Table 2.10 Table 2.11 Table 2.12 Table 3.1 Table 3.2 Table 3.3 Name of Figures Five tasks of strategic management Five competitive forces model by Michael Porter List of Tables Page 12 Name of Table Internal Factor Evaluation Matrix (IFE) External Factor Evaluation Matrix (EFE) Competition Photos Matrix SWOT Matrix I-E Matrix – Combination of internal and external Page 13 14 15 17 factors The Quantitative Strategic Planning Matrix (QSPM) Organizational structure of the Company Financial data of Vincom from 2008 to 2010 Vietnam inflation from 5/2008 – 5/2011 Strengths, weaknesses of competitors in the industry Summary table of opportunities and threats Competitive Photos Matrix External Factor Evaluation Matrix of Vincom JSC Balance sheet of Vincom JSC from 2008 – 2010 Operation result of Vincom JSC from 2008 – 2010 Key financial indicator of Vincom from 2008 – 2010 Summary table of strenths and weakness Internal factor Evaluation Matrix of Vincom JSC SWOT of Vincom JSC IE Matrix of Vincom JSC QSPM matrix 18 19 22 23 27 35 37 43 45 48 49 49 55 56 57 61 62 OVERALL The necessity to the capstone In the trend of globalization, Vietnamese businesses are having huge opportunities to build up their business but also facing many threats which can push the companies to a broke To exist and develop, all companies need to formulate the right business strategy in order to use the opportunities and minimize the threat from external environment From the demand, the formulating a business strategy is a necessity for each company This will help company to have a clear target, guide each department in general and staff in particular to act for the general target of company Business environment today is changed quickly, global competition requires company always move to adopt the changes Real estate is a specific field, require many factors like abundant finance fund, fund raising ability, good relationship with authorities, good vision of management Real estate is a field with much big risk but can create huge benefit Therefore the field attracted many company to invest in Vietnam Vietnam is on the developing paths; the demand of real estate like apartment, office building, and trade center is still high This is the opportunity and the risk of each company in this field Purpose of Capstone Based on the findings in the studying to identify the strengths, weaknesses, opportunities and threats in order to formulate the business strategy in real estate field of Vincom Objects and scope of the Capstone Project Object: Vincom JSC Scope: The business environment of Vincom in Hanoi and HCMC to formulate the business strategy in real estate filed for Vincom from 2012 to 2017 Method of study We have collected the information from reference books, data from Statistic Department and real estate consultant services, annual report of Vincom from 2008 to 2010 Structure of the Capstone Project The structure of the capstone project is as follows: In addition to the Forewords and Reference, this capstone project includes three chapters: Chapter 1: Theoretical background of business strategy Chapter 2: Analysis of the Company’s internal and external environment for formulating business strategies Chapter 3: Adopting business strategies for the Company, solutions and conclusions CHAPTER 1: THEORETICAL BACKGROUND OF BUSINESS STRATEGY 1.1 Related definitions 1.1.1 Definitions of business strategy In 1962, Alfred Chandler – one of the first economists initiating the theory of strategic management defined: “Strategy is the determination of basic long-term goals and objectives of an enterprise and the adoption of the course of action and the allocation of resources for carrying out these goals” After that many other people give many definitions about strategy like James B Quinn, Johnson and Scholes Although there are a large number of strategy definitions, business strategy can be understood as the art of organizing and assimilating resources in an optimal manner, proposing and executing decisions to adapt to changing trend of the environment for business success and achievement of long-term objectives 1.1.2 Concepts of strategic management Strategic management is a set of managing decisions and actions with determination of an enterprise’s long-term performance Strategic management includes ongoing activities: Evaluating and monitoring the environment (internal and external environment); formulating strategies; implementing strategies, assessing and controlling strategies Therefore, studying strategy focuses on monitoring and assessing external opportunities and threats in the context of internal strengths and weaknesses 1.1.3 Strategic management tasks According to Assoc Prof Dr Le The Gioi; Dr Nguyen Thanh Liem, MA Tran Huu Hai (Strategic Management, Statistics Publisher, 2009), strategic management has five tasks in close relation: - Developing a vision: Describe the future image of the enterprise; specify its goals and how it will become - Setting objectives: Convert the mission into specific performance targets - Formulating a strategy to achieve performance targets - Implementing and executing the strategy which has been chosen effectively - Evaluating performances, reviewing the situation and initiating corrective adjustments on the vision, long-term orientation, objectives, strategies or practice based on experience, changing conditions, ideas and new opportunities Developing Developing aa vision vision of of strategy strategy and and mission mission Repairing Repairing ifif necessary necessary Developing Developing aa vision vision of of strategy strategy Figure Five and mission and 1.1: mission Adjustments Adjustments ifif necessary necessary Developing Developing Developing aa Developing aa vision vision vision of of strategy strategy vision of of strategy strategy tasks of strategic and mission and and mission management and mission mission Improvements/Mo Improvements/Mo difications difications ifif necessary necessary Improvements/Mo Improvements/Mo difications difications ifif necessary necessary Developing Developing aa vision vision of of strategy strategy and and mission mission Restoring Restoring 1,2,3,4 1,2,3,4 ifif necessary necessary (Source: Le The Gioi, Strategic Management, Statistics Publisher, 2009) 1.2 Formulating strategies The process of formulating strategies can be divided into five steps, including: (1) Selecting the mission and main objectives of the company; (2) Analyzing the external environment to identify opportunities and threats; (3) Analyzing the internal environment in order to identify strengths and weaknesses of the organization; (4) Selecting strategies (5) Implementing strategy 1.2.1 Selecting mission and main objectives The first step of the strategic management process is to define the mission and main objectives of the organization A mission and main objective of the organization provides a context for building strategies A mission demonstrates reasons of the organizations’ existence and instructs the organization what to The major objectives determine what the organization hopes to meet within the medium and long term Mission statement is a key imperative of how an organization's perception of the demands of stakeholders Most of the mission statements are created with three main elements:  Vision statement or mission of the company; 10 level T (1) Financial Capabilities Applying Modern technology and 10  technique Experienced and high capability human resource Quality of product and services Management ability and strategic vision Company’s prestige Working attitude Partner relationship Management system Marketing and Pr activities Total (3) (4) 1.2 0.1 0.4 0.1 0.3 0.1 0.4 0.1 0.3 0.05 0.05 0.05 0.05 0.1 3 0.2 0.15 0.15 0.1 0.1 3.3 (2) 0.3 Comments: With a total score of 3.3 rated as higher than average point, by analyzing the internal environment, it could be stated that the strength of Vincom lies in the level in finance, application of modern technology and reputation Vincom needs to consider a number of weaknesses such as promotion strategy or capability to mobilize funds Furthermore, Vincom should also focus on the organizational structure as well as training and human resources development in the long run for the Company The establishment of internal factors evaluation matrix (IFE) based on the analysis of important internal strengths and weaknesses within the functional departments of Vincom helps the Board to evaluate the capability of the Company CHAPTER III: CHOOSING STRATEGY FOR VINCOM JOINT STOCK COMPANY The strategy selection is determined on the basis of the application and analysis of SWOT matrix, I-E Matrix, and QSPM matrix 55 (quantitative strategic planning matrix) These matrices allow us to evaluate strategies and strategic positions objectively and subsequently, to choose the most appropriate strategy 3.1 Analyzing SWOT matrix Table 3.1: SWOT matrix of Vincom JSC 56 OPPORTUNITIES (O) THREAT (T) O1 Economic developing leads to the expanding of T1 High inflation rate the high-end apartment demand T2 The change of interest rate O2 Vietnam has a stable politic environment whichT3 The fluctuation of exchange rate creates good condition to attract foreign investment T4 The liquidation of real estate O3 Many regulations about real estate transaction T5 Increasing price of material were issued This makes the market more healthy, T6.Competition of local and international rivals, O4 New technology in construction and housing Many new projects in Hanoi and other areas were management increased, approved and implemented O5 Wave of foreign investment in Vietnam has T7 Global economic crisis increased push the demand of office building andT8 Law system is not sync, especially in apartment to a high level construction management O6 Vietnam is ranked at 4th in the attractive placeT9 Real estate market now is the market of buyer scale for real estate inverstor in 2011 (AFIRE) T10 Lack of huge and long term fund O7 Real estate is considered as a safety investment field with high benefit and less risk SWOT MATRIX O8 Real estate price in Vietnam is in top 20 in the world O9 People’s taste changing leads to the demand of high quality and service product with international standard 57 STRENGTH (S) S1 Reputation in the market S1,S3,S4,S5; S7+O2,O3,O6,O7: Build luxury, high level apartment with high qualities in golden location -> New product strategy S2 Healthy finance fund S2,S5,S6+T1,T3,T4: Bring to the market new real estates which can meet the requirement of customers -> Product specializing strategy S3 Good knowledge in legal S1,S2,S5,S7+O1,O2,O3,O4,O6: Increase the investment and implement projects in other resource provinces which has developing economies -> S5.Land resource in many attractive Market development S4.Experienced and qualified human location S6 Have good quality of service S7 High tech equipment, applying information technology in management S8 High implementation process helps to catch the opportunity S9 The consensus and believes in BOM’s members to aim at the same objectives of the company S10 Has strength and prestige to cooperate with other groups 58 WEAKNESS (W) Combine W - O W1 Staff expanding cannot catch the W1, W5; W6 +O2,O3,O4: build a management speed of company expanding system more completed, improve the training W2 The loan is quite big so company system -> Cost management strategy will have difficulties when the interest W3, W7 + O5, O7, O9 Make use all oportunities to expand the market to other developing provinces -> rate increases W3 Company’s segment is focusing on Combine W – T W2, W3, W4 + T4, T5, T6, T10: Cooperate with partners to implement projects-> Cooperation strategy Market development stategy the high-end real estate It is estimated that will be meet many difficulties in the near future W4.Lack of long term capital investor W5 R&D activities is not really effective W6 The un-effectiveness in the cooperation of each step (such as planning, design, construction, project management , marketing, after sales) W7 Market of company mainly focuses in hanoi and Ho Chi Minh city 59 3.2 I – E Matrix Through the total score of the aforesaid IFE and EFE matrix, we build the I-E matrix to define the strategic position of the Company The total score of IFE matrix in the horizontal axis is 3.3 and the total score of EFE matrix in the vertical axis is 3.4 By joining two points, we can determine the strategic position of the Company in table 3.2 Table 3.2: I E Matrix of Vincom JSC 3.3 EFE- 1 3.4 YẾU TỐ MÔI TRƯỜN G BÊN NGOÀI The IE matrix shows that the strategic position of the Company is situated in the green zone, therefore, the Vincom JSC should using development strategy Combining with the SWOT matrix already analyzed above, the Company should choose the W-O strategic solution and cost control to enhance the competitiveness strategy 3.3 Analyzing QSPM Matrix Selecting strategy through the QSPM matrix for W-O group: 60 Table 3.3: QSPM matrix of Vincom JSC STT 10 Factors Classification Internal factor Company financial capabilities Applying modern technology and technique Qualified human resources Quality of product and services Management abilities and strategic vision Company’s prestige Working attitude of staff Partner relationship Management system Marketing and PR activities External factor Vietnamese average income increasing Housing demand of Vietnamese people Location of apartment buildings Applying technology Alternative strategy Cost Market management development AS TAS AS TAS 4 16 16 3 9 3 12 12 12 3 12 4 12 12 3 9 12 3 9 12 12 16 Foundation of attractive mark in construction 61 STT Factors Classification Alternative strategy Cost Market management development AS TAS AS TAS Foundation of attractive mark Opening market and joining WTO create opportunities for 6 2 4 6 6 2 4 2 competitors to join market Interest rate of house buying loan Regulation and guidance of Government in house and apartment business (selling or leasing) 10 Regulation of project implementation Real estate market is the cyclical market Tourist increase Total attractive marks 204 232 Comments: Through the QSPM matrix, we have combined the internal and external factors in the process for deciding strategy, with the total number of administration strategy of 204 points and the total number of market expansion strategy of 232 points, we decide to choose the cost control to enhance the creativeness ability strategy for short-term purpose and the market expansion strategy for long-term purpose 3.4 Adopting the business strategy for Vincom JSC 62 By analyzing and combining factors of the SWOT matrix, the I-E matrix and the QSPM matrix, the group of basic strategy for Vincom by 2017 is as follows: Strategy Cost control to enhance the competitiveness Market development Content -Effective cost management to survive and development in economic crisis, especially focusing on the decline the loan in capital structure - Research and expand the market to potential cities 3.5 Implementation the business strategy 3.5.1 Human resources solution In the real estate business, human resources plays a very important role in shaping the value of the company Therefore, in addition to the aforesaid solutions, Vincom should develop a plan for establishing and improving the human resources in order to ensure its sustainable development The recruitment job is implemented professionally by Vincom In fact, the Company has established a system of job descriptions for specific positions in each department and division The recruitment information is published widely in mass media, and the Company always gives priority to candidates nominated by its employees and staffs The candidates have to go through interviews and are recruited on a transparent and fair basis Training and human resources policy Training programs on management skills, especially personnel management skills are important with respect to managers, while training courses for improving qualifications and acquiring understanding on new technologies of construction, building, engineering, project management… and specialized seminars are dedicated to employees and staffs The company should develop a detailed and comprehensible training and personnel scheme enabling all employees to join in The recruitment and training of human resources is not an easy task, and the training and development jobs as well as the long-term commitment and continuous contribution of the employees in favor of the company are far more difficult 63 Beside the salary regime, allowances in accordance with capacity and performance of the employees, the proper use of incentives, rewards, encouragement is also a crucial factor The policies should ensure the fairness among all employees Furthermore, the Company should pay attention to the spiritual life of the employees, for example: to organize outdoor trips, family parties each year, this will undoubtedly make them feel more comfortable and confident in their works 3.5.2 Financial solutions To develop quarterly, monthly and weekly plans for the use of funds to manage and effectively use the capital flows, to implement proper cost control and management policy for improving the competitiveness, Flexible fund mobilization to implement the projects All real estate projects of Vincom are grade-A projects, therefore, the total investment amount is huge In the past, Vincom used only equity capital and bank loans for implementing projects, however, in the coming times, Vincom should consider applying other fund-raising channels such as bond issuance, stock issuance Furthermore, Vincom could also form joint venture or cooperate with international financial groups to develop major projects To use efficiently funds advanced by customers To implement projects quickly, following timely schedule to avoid huge costs of delayed projects, upon being put into operation, the projects is significantly profitable 3.5.3 Marketing and public relation solutions At present the main market of Vincom is Hà Nội and HCMC, but it can be seen that these markets has the saturating trend And the golden land location in these markets has became smaller and smaller and the compatitiveness is more strictly All these required Vincom to find other market in other provinces The company needs to choose the province and city which has high social development ratio To remain the high level image in reputation and product, Vincom need to keep the way when exporing the new market in other provinces However, the quantity of product needs to be researched carefully To cope with such situation, Vincom develops a market development strategy in surrounding 64 provinces such as Dong Nai, Binh Duong, Vung Tau…: They’re both fast developing provinces, where the average income of inhabitants and the purchase power of customers are growing steadily in recent years The improvement of recruitment, training and market expansion is a critical factor As a leading domestic company in the real estate sector, Vincom needs to develop its brand further - To build the reputation in the real estate market by ensuring the high quality, welltimed construction schedule of its real estate products and making payment in full and on time to suppliers - To regularly improve the interface and update latest information on the activities of the company on the website Such job will be undertaken by the marketing department The projects or events of the company should be publicized in the articles of the website in order to reflect the growing development of the company Just like what the faith and the will of Vincom aim to in favor of the community: to create a new lifestyle for Vietnamese people - To develop good relationship with the media to timely address the feedbacks or false and misleading information about the company We can say that now beside the financial source needs special attention in the field of construction, land resources as well as require high attention in in the real estate industry’s operation To cope with the shortage of land in the future, and implement market development strategies, Vincom has to build up a land bank in potential provinces For example: Vincom has bought an area of 12,000 hecta in Lang Co – Hue province with a special price as a huge investor at that time but the project can be implemented after 2010 Beside of Hue, many provinces like Binh Duong, Nha Trang… it has the same plan This is one kind of land source building project To implement the plan, Vincome needs to have partners who have long term financial fund due to the banking system in Vietnam just provide short term fund for real estate investment so the plan is a very important strategy in the future 65 3.6 Recommendations for the State: To develop and improve the standards systems for construction, fire prevention and firefighting of large-scale projects that have never been in Vietnam such as high buildings, underground parking, basement… To develop complete system of legal documents on the management of construction investment to avoid the actual legislative overlap between legal documents which causes a lot difficulties and inconveniences to real estate companies To propose solutions for reducing the number of procedures and implementation costs as well as meeting the needs of the market CONCLUSION The business strategy defining the development orientation, long-term basic objectives of a company, at the same time determining the method and the schedule for the implementation of such projects and proper allocation of limited resources of the company By developing strategy for the real estate business of Vincom), the thesis has analyzed and evaluate the business environment and the real estate market in Hanoi and Ho Chi Minh City, as well as the business situation of the company in recent times Aiming to be the leading domestic company in the real estate business sector, the period of 2012-2017 is identified as a critical transition phase with respect to the sustainable development of Vincom By analyzing the SWO matrix, the thesis has developed a development strategies and specific solutions to implement such strategies Specifically: • Market expansion strategy; • Restrain for competitiveness improvement strategy; Since the real estate business environment is volatile and periodical, all strategies and measures dedicated to the implementation of such strategies should be selected in accordance with actual situation of Vincom at that time The thesis on “Developing strategy for the real estate business of Vincom” for the period of 2012- 66 2017 is an objective and essential practice, helping the Board of Vincom to have an overall, comprehensive vision and proper conception on the development and selection of appropriate business strategies, as well as developing measures to carry out such strategies, enhancing the competitiveness of Vincom, building the reputation, contributing to the steady development of the company as the leading and pioneering domestic company in the real estate industry in Vietnam REFERENCES No AUTHORS WRITING PUBLISHERS YEAR PLACE 67 Nguyen Thi Lien Diep, Pham Van Nam Strategy and Labor and Society Business Policies Publisher 2006 Hanoi Nguyen Thanh Do, Nguyen Ngoc Huyen Business strategy and Enterprise Development Textbook 2002 Hanoi Michael E.Porter What is Strategy Michael E.Porter Competitive Strategy Le The Gioi Nguyen Thanh Liem Tran Huu Hai Strategy Management Hill, M., Ireland, R., and Hoskinsson Le Van Tam Ngo Kim Thanh Doan Thi Hong Van 10 Vincom JSC Company 11 Strategic Management: Competition Globalization Strategy Management Textbook Harvard Business Review Hanoi Science and Technique Publisher Statistics Publisher Thomson and Southwestern Strategic Management Textbook Strategy Management Internal reporting statistics Land Law 2011 Labor and Society Publisher Statistics Publisher National Economic University Publisher Statistics Publisher 1996 Hanoi 2009 Hanoi 2007 Hanoi 2000 Hanoi 2009 2010 Hanoi 20082010 2011 68 ... Construction JSC Corporation has announced the construction of the 102-storey and 528m tall building - Kinh Bac Group has also announced the project of 100-story building in Pham Hung street Hanoi -