Luận văn thạc sĩ quản trị kinh doanh quốc tế MBA (273)

CAPSTONE PROJECT REPORT A BUSINESS STRATEGY OF THE 189 ONE MEMBER LIMITED LIABILITY COMPANY FOR THE PERIOD OF 2012 -2015 Nguyen Thi Van Anh Nguyen Thanh Chung Pham Thanh Hai Vu Minh Hai Bui Thanh Thuy GaMBA01.X0810 H A N O I 1 GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT A BUSINESS STRATEGY OF THE 189 ONE MEMBER LIMITED LIABILITY COMPANY FOR THE PERIOD OF 2012 -2015 Group Number: 01 Student’s name: Nguyen Thi Van Anh Nguyen Thanh Chung Pham Thanh Hai Vu Minh Hai Bui Thanh Thuy HA NOI 2011 A business strategy of the 189 One Member Limited Liability Company for the period of 2012 -2015 ACKNOWLEDGMENTS In each path of education, there cannot lack the appearance of teachers who have provided generations of learners with enormous knowledge With the valuable knowledge transferred from our teachers, we have completed this graduation research project This graduation project is completed with the support from the teachers of the MBA program provided by the Griggs University – the ETC Center of the Vietnam National University This is the result of what we have learned from this course Our special thanks go to local and international teachers who have participated in teaching the course of Strategic Management and provided us with knowledge and directions for our completion of this graduation project We believe and hope that this project will be highly valued because of its application and feasibility of the strategy that we have studied because we know “once we have our belief, certainly we will be successful” Thank you very much i A business strategy of the 189 One Member Limited Liability Company for the period of 2012 -2015 TABLE OF CONTENT Page Cover page Acknowledgement i Table of content ii List of Tables v List of figures vi Confirmation of the 189 Company vii INTRODUCTION CHAPTER 1: THEORITICAL BACKGROUND FOR RESEARCH, DEVELOPMENT OF A BUSINESS STRATEGY FOR THE 189 ONE MEMBER LIMITED LIABILITY COMPANY 1.1 Concepts on strategies and roles of business strategies 1.1.1 Concepts on strategies and strategic management 1.1.2 Process for development of strategies 1.1.3 Roles of business strategies 1.1.4 A strategy for market invasion 1.2 Business environment analysis 1.2.1 Macro environment analysis 1.2.2 Industrial environment analysis 12 1.2.3 Internal environment analysis 14 1.3 Tools for identification of positions and development of business 16 strategies 1.3.1 SWOT Matrix 186 Foundation for selection of strategies (TOWS) 18 1.3.2 A model for selection of business strategies 1.3.3 Methods for assessment of strategic options (QSPM) 1.4 Identification of duties and strategic targets 19 1920 2021 1.4.1 Development of options for strategies ii A business strategy of the 189 One Member Limited Liability Company for the period of 2012 -2015 1.4.2 Selection of strategies 1.4.3 Organization for implementation of the strategy 201 CHAPTER 2: ANALAYSIS OF THE ENVIRONMENT AND REAL 210 SITUATIONS OF BUSINESS AND PRODUCTION OF THE 189 ONE 2122 MEMBER LIMITED LIABILITY COMPANY 2.1 Overview of the companyGeneral introduction on the company 2.2 Main business areas of the Company 2422 Functions and duties 2423 2.3 Organization and management structure 2423 2.4 Vision, missions, core values of the Company 2526 2.4.1 Mission 2526 2.4.2 Vision 2526 2.4.3 Core values 279 2.5 Analysis of impacts of the business environment on the Company 3227 2.5.1 Political factors 3227 2.5.2 Economic factors 3331 2.5.3 Social-cultural factors 34 2.5.4 Technological factors 34 2.5.5 Geographical factors 3635 2.6 Analysis of the five competitive force in the model provided by 36 Michael Porter in the 189 One Member Limited Liability CompanyAnalysis of the five-force model of M Porter 3736 2.6.1 Competition among companies in the industry 3839 Pressure from suppliers 3940 2.6.2 Competition from potential competitors 3940 Pressure from alternative products 4341 2.6.3 Alternative products 4351 Pressure from potential competitors entering the industry 5145 2.6.4 Pressure from customers iii A business strategy of the 189 One Member Limited Liability Company for the period of 2012 -2015 2.6.5 Pressure from suppliers 5245 2.7 Analysis of the matrix of external elements (EFE) Pressure from competition among direct competitors 49 2.78 Internal analysis of the 189 One Member Limited Liability 54 Company 2.78.1 Real situations of business and production the 189 One 564 547 Member Limited Liability Company for the period of 2007 – 2010Analysis of areas in Corporate management 557 2.87.2 Analysis of real situations of development of business areas at the 189 One Member Limited Liability CompanyAnalysis of core capacity 595 and competitive advantages 6056 2.87.3 Competitive advantages of the company based on its core value 6159 5962 2.98 Summary of strength, weakness, opportunities, threats of the Company 620 2.89.1 Opportunities 6163 Strength 6168 2.98.2 ThreatsWeakness 6268 2.98.3 OpportunitiesStrength 2.98.4 WeaknessThreats CHAPTER 3: SELECTION OF A STRATEGY AND SOLUTIONS FOR IMPLEMENTATION 63 6470 6670 72 3.1 Development of goals 73 3.2 The SWOT matrix and selection of a strategy 73 3.3 Strategic solutionsSolutions for implementation of the strategy 75 3.3.1 Investment capital solutions Financial and investment solutions 3.3.2 Solutions for market development iv A business strategy of the 189 One Member Limited Liability Company for the period of 2012 -2015 Human resource solutions 3.3.3 Solutions for development of products and trade marks Technological solutions 3.3.4 Solutions to human resources Marketing solutions 3.3.5 Technical and technological solutions Organization solutions 3.3.6 Management solutions 3.4 A roadmap for implementation of strategic solutions CONCLUSION REFERENCES LIST OF TABLES Page Table 2.1: Table on overall assessment on strength and weakness of the five 39 competitive forces v A business strategy of the 189 One Member Limited Liability Company for the period of 2012 -2015 Table 2.2: Report on business outcome 39 Table 2.3: Main financial ratios 40 Table 2.4: List of contracts with big value that are on going 4650 Table 2.5: Matrix for assessment of internal elements (IFE) 56 56 Table 3.1: The SWORT matrix 58 Table 3.2: Selection of strategic option Table 3.3: A roadmap for implementation of strategic solution 6474 18 Table 3.31: A roadmap for implementation of strategic solution LIST OF FIGURES Page vi A business strategy of the 189 One Member Limited Liability Company for the period of 2012 -2015 Figure 1.1: An overall strategic management model Figure 1.2: General environment 10 Figure 1.3: The five-competitive-force model of Michael Porter 13 Figure 1.4: S.W.O.T matrix 17 Figure 1.5: A model for selection of strategies of MC Kinsey Figure 1.6: QSPM matrix 2119 20 23 Figure 2.1: Organizational chart of the company 30 Figure 2.2: GDP grow rates and CPI over years 59 Figure 2.3: Baltic Dry Index vii A business strategy of the 189 One Member Limited Liability Company for the period of 2012 -2015 viii A business strategy of the 189 One Member Limited Liability Company for the period of 2012 -2015 * Strategic assessment from the QSPM matrix In the QSPM matrix in the table below, we can see that the 189 Company should focus on Market Development with its key competitive products But also, the company needs to have strategies to maintain its current market for stable and long term development 22 A business strategy of the 189 One Member Limited Liability Company for the period of 2012 -2015 Table 3.2 QSPM matrix Class ificat ion Important elements Internal elements Capable leadership Technical infrastructure Experienced workers/human resources Capacity for development of products with differentiation Market shares Supply of materials Demands for investment and development External elements Monetary policies Government policies on operation of the ship building industry High inflation rates Habits in using products and services of waterway transportation Technological changes Competitors Competition in the market Human resources for the ship building industry Total Strategy on market developmen t Backward integration strategy Strategy on development of new products Low-cost – based strategy Strategy on maintenance of the current markets Strategy on human resource management and training Scor Total e of score attrac of tion attra ction Scor e of attra ctio n Total score of attra ction Scor e of attrac tion Total score of attra ction Scor e of attrac tion Total score of attra ction Scor e of attrac tion Total score of attra ction Scor e of attrac tion Total score of attra ction 4 16 16 16 16 16 2 12 12 12 12 3 3 2 2 2 4 2 2 2 3 2 4 2 4 2 4 12 12 12 12 12 12 3 6 3 16 4 3 6 6 3 6 2 3 6 2 6 106 12 102 12 105 16 125 3 16 6 121 95 23 A business strategy of the 189 One Member Limited Liability Company for the period of 2012 -2015 From the SWOT matrix above, what we need to is to provide strategies based on combination of such factors in a suitable way to promote the internal capacity of the company for its strong development The S – O strategy is the combination of strength and opportunities of the company That is the promotion of internal capacity of the company in ship building to attract investment and to speed up the transfer of technology with application of advanced techniques in the production process The S – T strategy is to overcome difficulties and threats that come from the external environment to minimize impacts on the company, using its internal capacity In this Company, it is the concentration on development of two main areas in the current period which not require much investment capital namely ship repair and leasing warehouse This is a suitable direction in the period of economic recession with many bad impacts at present The W – O strategy is the combination of weakness and opportunities This combination provides the company with opportunities to overcome weakness using opportunities Based on the investment policy of the Government in the company which is to develop supporting industries in the ship building, the Company will gradually stabilize its sources of materials and change from imported ones to domestic one which helps reduce production costs The W – T strategy is the combination of weakness and threats from the company This combination requires the company to reduce weakness and avoid threats through development of preventive measures This is one of the most difficulty strategy to implement But sometimes, weakness becomes strength Above are combined business strategies that are combined based on real activities of the company Development of suitable business strategies is to increase competitive capacity of the Company in the market in Vietnam Along with the strategies are solutions for implementation so as to achieve the strategic targets that the company has developed * Selection of a strategy: 24 A business strategy of the 189 One Member Limited Liability Company for the period of 2012 -2015 The above analysis shows that the Company mainly has strength and is capable of overcoming weakness It has many opportunities and threat that can be solved and turned to be opportunities when we understand the real nature of the issue and its rules in order to develop a plan to overcome weakness Based on the above analysis, the groups of strategies for target achievement area: Group 1: Strategies for invasion in the current market Group 2: Strategies on backward Group 3: Strategies on low costs Group 4: Strategies on development of new products Selection of a suitable business strategy based on principles and standards provided by the Company after comparing main strategies is for the purpose of implementation of strategies and is applied with a 10-score scale for assessment on groups of strategic options which are selected based on criteria that may affect the Company including profits, costs, investment, risks, profits in a direction that the more profits the company can earn, the higher the score is Table 3.2: Selection of strategic options Criteria for No comparison and Strategic options Group Group Group Group selection Profits Implementation 7 7 6 costs Investment 7 efficiency Risks 7 Total score: 33 28 28 25 The analysis of strategies using the scoring method with a 10-score scale based on selected criteria helps identify the most suitable strategy for the Company which is the group of strategies – Strategies for invasion in the current market 3.3 Solutions for implementation of the strategy Based on the core capacity of the Company’s production technology and 25 A business strategy of the 189 One Member Limited Liability Company for the period of 2012 -2015 equipment, with the selected strategy on “Development of the current markets with key products ” and the strategy on “Maintenance of the current markets”, we have provided some solutions for implementation of the selected strategy as follows: 3.3.1 Investment capital solutions The Company needs to focus on maximum mobilization of capital sources for investment in infrastructure to upgrade its machine and equipment and to have capital for research and development This solution requires a budget of VND 300 billion for investment in the period of 2012-2015 Increase capacity in mobilization of investment capital For effective allocation of capital, first of all, we need to see if we have had sufficient capita as required or not This is the most important for expansion of production and investment in techniques and technology and corporate management Therefore, we need to use many ways for maximum mobilization of capital sources Mobilization of capital from various sources as recommended by the Ministry of Defense is to provide more capital for implementation of assigned duties or for access to preferential loans The Company should also allocate capital gained from business outcome The Company should take advantages of all available potentialities to attract investment capital from foreign companies However, in the current economic recession, FDI attraction for the ship building industry is not optimistic and thus, the company needs to provide solutions to attract and make the best of available internal resources in the country Suitable and effective capital investment Saving costs in the production process is essential When we have had capital, a requirement is that we have to invest the capital suitably After capital is mobilized, we need to ensure our investment will generate the most profits through which we can achieve the strategic targets that have been set up by the company and stabilize 26 A business strategy of the 189 One Member Limited Liability Company for the period of 2012 -2015 financial situations of the company including interest payment to investors and banks, and performance of duties to the state Therefore: The Company needs to avoid widespread and ineffective investment Investment should follow plans with targets to ensure high efficiency Investment should be made in ship repair to increase capital turnover It is important to make a suitable plan for supply and reservation of materials and reduce impacts from changes of the market, increase competitive capacity of the company in comparison with its competitors 3.3.2 Solutions for market development Market development is understood as to retain the current market shares and study and expand to potential markets of the company They are the two most important duties for a company because meeting demands of the current market is to help stabilize the production and business situations of the company and it is a foundation for development of potential markets Potential markets are what companies aim at because for companies, they are markets for profit generation but they are not touched on or there are few competitors In those places, the advantages of the company will be further promoted Retain traditional markets The Company needs to retain its traditional market and long term customers It should implement some marketing plans and conduct research and development activities for market expansion in potential markets Seek for potential markets It should seek for more domestic ship building customers and aim at building ships for exporting key products aiming at customers of navy forces, sea police and border soliders in regional countries It should seek for potential partners in terms of technology and finance for investment cooperation in ship building and development of production factories Along with promotion of ship building and repair, the company should focus on expansion and management of business activities for import, export What the 27 A business strategy of the 189 One Member Limited Liability Company for the period of 2012 -2015 Company should focus in the coming years are materials, equipment for the ship building industry With this solution, the company needs to spend about VND billion for implementation for the whole period of 2012-2015 3.3.3 Solutions for development of products and trade marks Trademarks of a company refer not only to the image of its products in the mind of consumers but also the image of quality of products and services and the company’s treatment and behaviors towards customers More importantly, trademarks play a special role in development of a company, trade promotion and creations for the company to occupy a market and expand its market Thus, it is essential to create and develop a trademark of a company The company should develop its images and trademarks clearly in the eyes of customers including reputation in small and medium-sized ship building and repair with rapidness and accuracy, to ensure delivery time and to provide customer care and maintenance services, regular maintenance of machine for closed customers It should participate in trade fairs and exhibition and specialized workshops of the industry in the country and in the world for advertisement of the trademarks and for creation of relations with domestic and international partners It should focus on development of marketing plans, business plans on waterway transportation and a development direction for the company Attention should be given to customer care and quotation should be monthly sent to long term customers for development of suitable marketing programs With this solution, the company needs to spend about VND billion for implementation for the whole period of 2012-2015 3.3.4 Solutions to human resources Improvement of the organization and management system of the company It should improve its organization and management system that should be suitable with current business and production scale of the company, specifically: 28 A business strategy of the 189 One Member Limited Liability Company for the period of 2012 -2015 It should review and organize the system of departments, workshops and production teams It should also rearrange its staff that indirectly involve in production and improve professional capacity for those people to ensure they can meet requirements at work Effective allocation of human resources It is vital for a company to have quality human resources Human resource shortage will not result in smooth production and business It may even lead to some difficulties when there are sudden changes in production demands Thus, the company needs: To recruit more skillful workers for its production process In this current economic recession, to get adaptive to a situation with fewer orders, it is important to gain trust and make customers feel confident at work The Company needs to minimize unemployment and losses of jobs through cutting down the number of aging workers and providing them with good treatment, working shifts for equal allocation among workers Improvement of human resource quality This is an urgent requirement and a long term one for the company With its real situations of its aging workers, investment for improved qualification and recruitment of new workers for gradual labor force replacement are to meet the demands of the market in the current period of integration The company should develop policies that encourage its employees to improve their profession and qualification, with partly financial support and creation of conditions for people to learn and continue working for the company With this solution, the company needs to spend VND 10 billion for implementation of training and retraining activities for managers and skillful workers for the whole period of 2012-2015 3.3.5 Technical and technological solutions 29 A business strategy of the 189 One Member Limited Liability Company for the period of 2012 -2015 Technological and technical solutions are greatly decided by the production and business scale of the company Thus, there must be uniform cooperation of such solutions and solutions on investment capital Investment for renovation of production technology Out-of-date equipment, machinery and technology are obstacles for the company’s integration and its competitive capacity in comparison with its competitors This has great impacts on product quality and helps reduce production costs In the ship building industry, techniques and technology are the key to success Accordingly: The Company should upgrade some production lines and its machine with modern ones from within the country and imported from other countries It should increase exchanges and learn experience from foreign countries It should also speed up the transfer of technology when it imports machinery from foreign countries like Japan, South Korea and China The Company should focus on investment in research and development activities (R&D) It should create a separate fund for research and apply research results in production through pilot tests This is a long term process for efficiency because it is to increase the capacity of the company, improve skills and techniques of workers Also, the Company should manage its internal information technology system to improve qualification and capacity of its employees It should apply information technology in design of shells and machine so as to increase accuracy for its products It should standardize the quality management system to meet international standards before launching a ship This helps develop a trade mark and reputation for the company’s products With this solution, the Company needs to spend about VND 200 billion for implementation for the whole period of 2012-2014 3.3.6 Management solutions 30 A business strategy of the 189 One Member Limited Liability Company for the period of 2012 -2015 Smooth cooperation between leaders and departments in the company will help the company operate more effectively Administrative procedure reform It is important to reduce unnecessary cumbersome administrative procedure so that production and business activities will be accomplished quickly It should apply information technology in management of departments and management between departments and the board of directors for timely and less costly management Also, the leadership should pay more attention to workers’ life and listen to their opinions for suitable management methods Renovation of planning and forecasting activities It is essential for the company to renovate its planning and forecasting activities The Planning Department should operate more effectively and cooperate with the leadership for improved quality of plans including marketing plans, production plans, plans on supply and reservation , especially long term plans for directions Forecasting activities should be paid attention to, especially in the current situation, to minimize risks that the company may encounter With this solution, the company needs to spend about VND billion for its new ISO development in 2012 * So, with the above solutions, the total required budget for implementation is VND 519 billion Anticipatively source financed as follows: VND 300 billion for Dinh Vu port infrastructure consummation from Ministry of Defence's capital investment (was browsed); VND 100 billion used from Company's capital source dedicates to business action; remaining capital mobilize from staff in Company and borrow bank 3.4 A roadmap for implementation of strategic solutions Table 3.1: A roadmap for implementation of strategic solutions 31 A business strategy of the 189 One Member Limited Liability Company for the period of 2012 -2015 No Solutions Requirements Time Ensured financial resources for 2012-2013 investment in modern equipment; Finance to complete infrastructure in the Dinh Vu Industrial Zone with a total amount of capital of VND 300 billion - All workers will have to be 2012-2013 provided with retraining courses - Implementation of the plan for Human resources recruitment of young workers for training for improved skills who will gradually replace aging workers who are reaching their retirement age - Ensured the most modern 2011-2015 technology in the region Technology - Ensured at least 70% of automation in stages A marketing Maketing Organization all production strategy should 2012-2015 ensure at least 40% occupation of the market shares in the North and the Center regions Restructure 2012- 2013 Table 3.3: A roadmap for implementation of strategic solutions 32 A business strategy of the 189 One Member Limited Liability Company for the period of 2012 -2015 CONCLUSION It is extremely important for a company to develop a business strategy in a market economy with severe competition Such a strategy decides the success of each company in the market Therefore, it is vital to develop a suitable business strategy for the overall power of a company Development of a business strategy is also the most attractive and essential topic for each company For its survival and development, it is essential for a company to improve its business strategy With this research project “A BUSINESS STRATEGY OF THE 189 ONE MEMBER LIMITED COMPANY FOR THE PERIOD OF 2012-2015”, we hope that we can reinforce and improve our knowledge and make some contribution to development of a business strategy for the Company This is a difficult project which requires broad knowledge in terms of theories and practice Therefore, despite out efforts, with time constraints and geographical 33 A business strategy of the 189 One Member Limited Liability Company for the period of 2012 -2015 distance from the Company, with the situation that all members of the group are officers in other business areas with limited knowledge and experience in the ship building industry, surely, this project still contains shortcomings We look forward to contribution from teachers and friends Thank you very much / 34 REFERENCES Vietnamese: As Prof Dr Nguyễn Thị Liên Diệp, MSc Phạm Văn Nam (1999), Business strategies and policies, Statistics Publishing House Fred R David (2000), Theories on strategic management, Statistics Publishing House As Prof Dr Lê Thế Giới, MSc Trần Hữu Hải, Dr Nguyễn Thanh Liêm, (2009), Textbook on Strategic Management, Statistics Publishing House Michael E Porter (1996), Competitive strategies, Scientific and Technological Publishing House Rowan Gibson (2002), Rethinking the future, translated by Vũ Tiến Phúc, Dương Thủy, Phi Hoành, Youth Publishing House, Ho Chi Minh City English: Arthur A Thompson, Jr & A.J.Strickland III (1997), Strategic ManagementConcept and Cases, The McGraw-Hill Companies, Inc ... research project This graduation project is completed with the support from the teachers of the MBA program provided by the Griggs University – the ETC Center of the Vietnam National University