Some concepts and definitions related to strategy
Before conducting a deep understanding of strategic management, we need to learn some basic concepts related to strategy and strategic management.
Strategy is defined as a comprehensive set of actions designed to effectively mobilize an organization's or individual's resources to achieve a specific objective According to Fred R David, strategy serves as the pathway to attaining long-term goals.
Strategic management is defined by Fred R David as both an art and a science that involves the establishment, implementation, and evaluation of decisions related to functions that enable an organization to achieve its goals.
Strategists, including roles such as strategic executive directors, presidents, owners, chief financial officers, and chief strategy officers, play a crucial role in organizations by developing and implementing effective strategies to drive success.
Objective: according to Fred R.David, that is “the determined achievements which an organization finds the way to obtain while pursuing its main mission” [VIE 1, page.19].
Policy is the guidelines for making decisions and demonstrate the situations are often repeated or cyclical situations"[VIE 1, page.22]
A vision represents the future aspirations of an organization, serving as a guiding image of what it aims to achieve It reflects the desire and motivation driving corporate activities, illustrating the direction and purpose behind the organization's efforts.
Opportunity is a condition in the general environment that if a company knows how to exploit, it will achieve strategic competitive advantage.
Challenge is a common environmental condition which can interfere with a company in the process of gaining a strategic competitive advantage.
Process of building strategy
Strategic management process includes the following stages of implementation: + Analysis of the organization (including external and internal) and building strategy. + Implementing the strategies outlined
+ Reviewing implementation of strategy and controlling system to make necessary adjustments
The analytical models used to build strategy
The models analyzing the factors outside the Enterprise
The PEST model (Political, Economic, Socio-cultural, and Technological factors) is a framework used to analyze the influence of macroeconomic elements on business and industry operations It focuses on external factors, such as political and legal issues, economic conditions, socio-cultural trends, and technological advancements, that can impact a business's performance and strategy.
Political and legal factors encompass the laws and regulations that organizations must adhere to, including enterprise law, investment law, labor law, and tax policies Additionally, import and export regulations, trade policies, and government support play a significant role in influencing business operations Compliance with these legal frameworks is essential for successful organizational functioning.
Economic factors play a crucial role in shaping the current state of the economy, encompassing elements like interest rates, inflation, recession, growth rate, and GDP per capita These variables significantly influence business strategies and decision-making processes Understanding these economic indicators is essential for businesses to adapt and thrive in a changing market landscape.
Social and cultural factors encompass demographic elements like population size, average lifespan, and education levels, as well as customs, practices, lifestyles, trends, and social movements These factors play a crucial role in identifying and distinguishing customer groups that align with the products and services offered by a business.
Technological advancements have significantly propelled the growth of the manufacturing sector, creating a favorable environment for development in various countries Supportive policies that encourage research and the application of science and technology serve as a driving force for producing higher quality goods.
Figure 1 1 Product Life Cycle [Eng 2]
The product lifecycle consists of four key stages: Introduction, Growth, Maturity, and Decline Each stage is characterized by distinct features that every product must navigate throughout its existence.
In the introduction stage of a product's lifecycle, it is crucial for manufacturers to prioritize research to align their offerings with consumer preferences, as the market is still unfamiliar with these new products Focusing on effective production and branding strategies will help establish a strong presence and attract potential customers.
During the growth stage, the product experiences significant expansion, necessitating increased production to capture a larger market share As competitors recognize the market's appeal and enter the field, the demand for the product surpasses its supply.
In the saturation stage of maturity, the market is flooded with an abundance of products, leading to declining prices and a shift in favor of consumer demand As profits per product diminish, businesses must focus on research and innovation to enhance value and differentiate their offerings in order to remain competitive.
During the decline stage of a product's lifecycle, it becomes less appealing, leading to a rapid decrease in profit margins To combat this, manufacturers should prioritize research and development to introduce innovative products, initiating a new cycle of growth They face two strategic options: either enhance the existing product to elevate its market position or gradually phase out underperforming products to streamline their offerings.
The product lifecycle model enables manufacturers to develop effective operational strategies tailored to each production stage, ultimately maximizing profits and minimizing risks in their production activities.
The model, introduced by Michael Porter in 1979, is renowned for its effectiveness in analyzing the factors that drive profitability for companies Furthermore, it offers valuable strategies aimed at fostering business growth.
The influence of suppliers on businesses is significant, as the number and scale of suppliers directly impact competitive pressure and negotiation power When there are few large suppliers in the market, they hold greater negotiating power over businesses, creating competitive challenges Conversely, a higher number of suppliers shifts the negotiation advantage to the businesses, allowing them to exert more control in their partnerships.
The influence of customers on businesses is significant, as they create competitive pressure that directly impacts operations Customers can be categorized into retail consumers and distributors, both of which exert pressure on pricing, product quality, and service standards The power of buyers increases when there are fewer customers or when large customers dominate the market Additionally, if substitutes are readily available and affordable, buyers hold substantial sway over sales, enhancing their overall power in the marketplace.
The competitive pressure from substitute products poses a significant threat when consumers can easily switch without incurring high costs, and when these alternatives offer lower prices or superior quality As a result, industries face increased competition unless they provide unique products that are highly valued by customers, which can mitigate the impact of substitutes.
SWOT model
The SWOT analysis model is an essential tool for organizations to understand their business environment and make informed decisions It encompasses four key components: Strengths, Weaknesses, Opportunities, and Threats This strategic analysis framework aids in evaluating a company's position and direction, allowing for a comprehensive review of internal and external factors that can impact its success.
Enterprise strengths lie in its competitive advantages, including superior operational efficiency, innovative business practices, and a robust resource allocation strategy The business excels in delivering high-quality products and services that meet customer needs effectively Essential resources for the enterprise include skilled personnel, advanced technology, and strong supplier relationships Additionally, stakeholders often recognize the enterprise for its market leadership and adaptability, which further distinguishes it from competitors in the industry.
Identifying weaknesses is crucial for any enterprise, as it highlights areas for improvement and actions to avoid Companies must assess both internal and external challenges to understand their shortcomings Additionally, analyzing why competitors may outperform them can provide valuable insights for strategic enhancement and innovation.
- Opportunities: Identifying opportunities that the business may have Opportunities arise from external factors such as policies, industry development, market potential
Understanding the threats that can negatively impact enterprise operations is crucial Issues such as overdue debt and cash flow problems can pose significant risks Additionally, identifying any weaknesses that may threaten the company is essential This thorough analysis enables businesses to pinpoint their challenges effectively.
The SWOT analysis model effectively evaluates a company's current status by examining its internal strengths and weaknesses alongside external opportunities and threats This structured approach simplifies information processing, making it both clear and accessible for decision-making.
TOWS matrix model
The TOWS matrix offers a contrasting approach to the SWOT matrix by prioritizing the external environment in strategic development It focuses on identifying challenges and threats before leveraging opportunities, thereby creating competitive advantages and improving market positioning against rivals The process involves pairing external opportunities with internal weaknesses first, followed by strengths, to formulate effective strategies that address both internal and external factors.
Based on the information about the weaknesses, strengths, opportunities and treats and application of TOWS matrix, we can identify strategies appropriate to each feature of the business.
SPACE matrix
The SPACE Matrix assists companies in selecting the most suitable strategies, including Aggressive, Conservative, Defensive, or Competitive approaches It evaluates two internal factors, Financial Strength (FS) and Competitive Advantage (CA), alongside two external elements, Environmental Stability (ES) and Industrial Strength (IS) These four critical factors collectively determine the overall strategic position of an organization.
To determine the score for Space Matrix, select a set of variables that represent financial strength (FS), competitive advantage (CA), environmental stability (ES), and industry strength (IS) Assign numerical values from +1 (worst) to +6 (best) for FS and IS variables, while assigning values from -1 (best) to -6 (worst) for ES and CA variables Sum the assigned values for each group and divide by the number of variables to calculate the average scores for FS, IS, ES, and CA Finally, plot these average points on the appropriate axes of the SPACE matrix.
Y, mark the results on axes X, Y Mark the intersection of two new point on the axis X, Y;Draw the direction vector from the origin of the SPACE Matrix through the new intersection This vector represents the types of strategies that the organization should select: attack, competitive, defensive, or cautious.
The types of strategy for a Company
Corporate-level strategy
Corporate-level strategy encompasses the overarching goals and long-term objectives of a company According to Fred R David, these strategies can be categorized into 14 distinct types, including backward integration, forward integration, horizontal integration, market penetration, market development, and product development Each strategy comprises specific activities; for instance, a market penetration strategy may involve enhancing the sales force, boosting advertising expenditures, and implementing promotional efforts to expand market share in a particular geographic region.
A successful business strategy encompasses the competitive approach an organization adopts, its market positioning for gaining a competitive edge, and the tailored strategies relevant to its industry context Michael Porter identifies three primary strategies: the low-cost strategy, the product differentiation strategy, and the focus strategy, which targets specific market segments.
1.4.3 Functional or departmental – level strategy
Functional Strategy, often referred to as departmental strategy, focuses on the strategic planning of various functional units such as Production, Marketing, and Finance By enhancing operational effectiveness within the company, these strategies play a crucial role in the successful implementation of both Corporate-level and Business-level strategies.
To enhance competitive ability and operational effectiveness, it is essential for the company to develop a comprehensive strategy system that supports its functional departments and meets customer and market demands.
ANALYZING THE SITUATION OF VINACONEX ADVANCED
Overview of Vinaconex advanced compound stone joint-stock Company
Name of Company: Vinaconex advanced compound stone joint stock company Trading name: Vinaconex advanced compound stone joint stock company
Address: Hoa Lac high-tech Industry Zone, Thach That Commune, Thach That District, Hanoi
Name of stock: Shares Corporation Vinaconex Advanced Compound Stone
The number of listed shares: 21,066,600 shares at the Hanoi Securities Trading.
2.1.2 Mission, vision, strategy [VIE 2, page.2].
Our mission is to establish ourselves as a leading manufacturing company in the artificial stone and advanced eco-materials sector, both regionally and internationally We aim for rapid and stable growth while ensuring effective business operations that maximize shareholder benefits Additionally, we are committed to continuously enhancing the material and spiritual well-being of our employees and actively engaging in social work and charitable initiatives.
Our vision is to lead in the application and development of innovative technologies and environmentally friendly materials We aim to specialize in producing advanced eco-materials, establishing a long-term competitive advantage while ensuring a sustainable environment.
The industrial production of new materials serves as the core business strategy, with eco-materials playing a pivotal role Additionally, trading in the mining and real estate sectors provides essential supply-demand support and financial leverage, facilitating the development and expansion of various industrial fields.
- Investment in housing development, new urban areas, infrastructure and industrial zones;
- Business in real estate; technology transferring, trading machinery, equipment and raw materials for producing packaging;
- Consult about training in production, investment consulting (not including legal advice, financial, tax and accounting);
- Production and processing agricultural, forestry, soil and marine products;
- Handicraft production handicraft, garment export;
- Paint manufacture and production of printing inks and mastics;
- Producing, processing of wooden products, leather products;
- Producing and trading of paper packaging, PE plastic, cosmetics, soaps, detergents;
- Leveling and construction of electric voltage to 35 KV;
- Sale of materials and equipment and slow-moving payment processing;
- Trading import and export of materials, machinery, equipment, spare parts and capital goods, consuming-goods materials, materials for production and consumption;
- Construction of civil works, industrial, interior and exterior;
- Mining, mineral processing, production and trading of construction materials [VIE
VICOSTONE specializes in the production of high-quality artificial stones using advanced technology exclusively sourced from Breton SPA in Italy, boasting an impressive integrated capacity of over 2 million m² per year across three production lines The company's strategic focus is on becoming a leading exporter, with the export market projected to constitute 95% of the total value of its industrial products, thereby enhancing its industrial leverage.
2010, VICOSTONE have stepped up their operations in two business areas are mining and minerals processing and real estate [VIE 2, page.16]
VICOSTONE utilizes advanced "Compaction by Vibrocompresion Under Vacuum" technology to manufacture its artificial stone products This innovative process bonds dry aggregate particles with specialized adhesives, resulting in artificial stones that possess exceptional technical and aesthetic properties, unmatched by those produced through other manufacturing methods.
The production of rock sheets utilizes advanced, automated equipment to ensure precision and efficiency Raw materials are automatically measured and mixed according to a carefully calculated formula, maintaining consistency before being transferred to the forming tool Once the stone sheet mass is quantified, it is placed into a vibropress, where vibration pressing occurs in a vacuum environment, resulting in exceptionally compact stone sheets After a 24-hour curing period, the stone sheets are sharpened to achieve the desired finish and quality.
The producing process consists of:
Figure 2 1: The process of producing artificial stone
The shaping of rock sheet is done on the system with modern equipment, high level of automation Raw materials are automatically metered according to a formula of
The process of charging and metering the input materials by automatic weight batcher
The process of mixing and putting the mixture in forming tool
Vibration pressing in the vacuum environment
The production of semi-products and products involves meticulously calculated matching materials, ensuring a consistent mixing system of original raw materials before they are transferred to the forming tool Once the mass of stone sheets is automatically quantified, the mold is placed in a vibropress, where vibration pressing occurs in a vacuum environment, resulting in stone with near-absolute compactness After a 24-hour setting period, the stone sheet is sharpened to achieve the desired product perfection.
VICOSTONE's Compozite materials are an innovative type of unburned paving that offers numerous benefits, including energy savings due to the absence of high-temperature burning and zero emissions during production The manufacturing process is highly efficient, utilizing circulating heat transmission oil and modern control systems for optimal power savings Additionally, VICOSTONE's advanced artificial stone incorporates adhesive quartz aggregate with plastic polyester resin, making some of its products rare and produced by only a select few factories globally.
2.1.4.1 There is no companies holding over 50% shares of VICOSTONE
2.1.4.2 The subsidiaries (VICOSTONE holding over 50% shares)
Vietnam Stone Work – Top Fabrication Joint Stock Company (STONE VIETNAM)
- Trading name: Vietnam Stone Work-Top Fabrication Joint Stock Company
- Address: High-tech Industry Zone, Thach That Commune, Thach That District, Hanoi
Charter capital: 40,000,000,000 VND (Forty billion VND) equavelents with
Vico Investment and Mineral Joint Stock Company (VICOSTONE MINE)
- Trading name: Vico Investment and Mineral Joint Stock Company
- Address: 137 Le Quang Dinh Street, Ward 14, Binh Thanh District, Ho Chi Minh City
VICOSTONE holds 10,200,000 shares, representing 51% of the total charter capital of 200,000,000,000 VND (Two Hundred Billion VND), which is divided into 20,000,000 shares This ownership equates to 102,000,000,000 VND (One Hundred and Two Billion VND).
Tan Phuoc Real Estate Joint Stock Company (TAN PHUOC Re JSC)
- Trading name: Tan Phuoc Real Estate Joint Stock Company
- Abbreviated name: TAN PHUOC Re JSC
- Address: 137 Le Quang Dinh, Ward 14, Binh Thanh District, Ho Chi Minh City
- Charter capital: 200,000,000,000 VND (Two Hundred billion VND) equivalents with 20,000,000 shares The number of shares owned by VICOSTONE: 9,000,000 shares equivalent with 90,000,000,000 VND (Ninety billion VND), Accounting for 45% of charter capital.
Style Stone Joint Stock Company
- Trading name: Style Stone Joint Stock Company
- Address: High-tech Industry Zone, Thach That Commune, Thach That District, Hanoi
- CCharter capital: 150,000,000,000 VND (One hundred and fifty billion VND) equavelents with 15,000,000 Shares
- The number of shares owned by VICOSTONE: 7,400,000 shares equivalent with 74,000,000,000 VND (Seventy-four billion VND), Accounting for 49.33% of charter capital
December: Increased the capital to 210.666 billion VND
September: implemented and applied the system for enterprise resource planning
June: Implemented the investment project of the production line of artificial stone
No.2; increasing the total capacity up to about 1.600.000m2/year since the end of 2011.
VICOSTONE has been honored with the third-class Labor Medal by the State and has achieved numerous prestigious certifications for its products These include the NSF certification for safe materials in contact with food, the GreenGuard certification for indoor safety, and the Microbial Resistant certification for uncontaminated materials Additionally, VICOSTONE holds the CE certification, confirming that its paving materials comply with the European standard EN 15285:2008 The company has also pioneered the research and application of laboratory technology to produce artificial stone using bio-resin and vegetable oil-based adhesives, promoting environmental sustainability and marking a significant step towards an ecological materials program and a new product strategy.
December: issue individually convertible bonds worth165 billion VND for two strategic partners as Red River Holding Fund and Tien Phong commercial Bank.
July: VICOSTONE officially changed operating-form into the parent - subsidiary company
May: Issued individually convertible bonds worth 100 billion VND for a strategic partner as Beira Limited
April: Established Vico Investment and Mineral Joint Stock Company - VICOSTONE
MINE by VICOSTONE hold controlling shares.
On 05 th December, 2007: VICOSTONE posted shares at Hanoi Stock Exchange Center (HASTC) On 17 th December, 2007, VICOSTONE officially opened the first session marking a new stage of development Contributed capital to establish new joint venture company STONE STYLE (now Style Stone JSC) and Vietnam Stone Fabrication JSC.
2006: The first year when VICOSTONE made profit
2005: Completed the capitalization of Vinaconex Advanced Compound Stone Factory into Vinaconex Advanced Compound Stone Joint stock Company.
2004: Exported the first consignment to Australia on 1 st September, 2004.
In September 2003, Vinaconex launched its Advanced Compound Stone Factory, featuring two state-of-the-art production lines: the Terastone line, which utilizes mould technology, and the Bretonstone line, employing organic adhesives This facility boasts an impressive total production capacity of 920,000 square meters annually.
Analyzing the status of Vinaconex advanced compound stone joint-stock Company
2.2 Analyzing the status of Vinaconex Advanced Compound Stone Joint Stock Company
2.2.1 The common conditions in Vietnam
The content of this part mainly mentions the issues outside the Enterprise This part uses noticeable aspects listed in P-E-S-T model which was theoretically mentioned in chapter 1.
2.2.1.1 The Political environment in Vietnam
In recent years, Vietnam has experienced a dynamic political and legal landscape, with government policies focused on economic development and social stability The Vietnamese government is actively pursuing partnerships with nations worldwide, emphasizing its commitment to openness and collaboration.
Establishing the association has enabled Vietnam to enhance its access to foreign investment and technology transfer This has led to significant growth in various sectors, particularly in the construction and construction materials industries, which have experienced rapid development in recent years.
The Vietnamese Government has implemented vital policies to foster development across various industries, particularly in the construction sector Key legislations passed by the National Assembly, including the Land Law (2003), Housing Law (2005), Investment Law (2005), Law on Real Estate Business (2006), and Law on Urban Planning (2009), have played a significant role in shaping the industry's growth.
State policies are actively promoting the growth of the construction and building materials industry, fostering an environment conducive to investment projects from both domestic and international sources in this sector.
2.2.1.2 The Economics environment in Vietnam
In the first half of 2011, the Vietnamese economy faced significant challenges due to global issues such as the European debt crisis, Japan's economic stagnation, and rising inflation worldwide These factors led to a slowdown in economic growth, increasing inflation, high interest rates, and fluctuations in exchange rates and gold prices Additionally, a sharp decline in foreign exchange reserves and adverse weather conditions in the North and North Central regions negatively impacted agricultural production and the livelihoods of farmers Consequently, Vietnam grappled with the risks of higher inflation, macroeconomic instability, and the need to ensure social welfare, posing major challenges for the economy.
The administration has executed a cautious and flexible monetary policy, prioritizing credit capital for production, agriculture, rural development, and small to medium enterprises While lending rates have begun to decrease, they remain high, creating challenging conditions for businesses, particularly in terms of capital access The focus has shifted away from non-manufacturing sectors, further complicating the operational landscape for enterprises.
2.2.1.3 The socio-cultural, population environment
Vietnam is currently recognized for its significant opportunities and challenges, characterized by a golden demographic model, where the percentage of children aged 0-14 is below 30%, and the elderly population aged 65 and above is under 15% This demographic trend indicates a plentiful workforce potential for the country.
The situation of an average income of a household member per month has increased over the years in both urban and rural areas:
Table 2.1 Average per capita income for years [VIE 4, page.1]
Table 2 2 Percentage of urban population of the region for years [VIE 8, page.42]
Vietnam's population is predominantly young, and the rapid pace of urbanization presents significant opportunities for the job market This demographic shift is expected to drive increased consumer demand in urban areas and lead to a rise in construction and housing developments in the near future.
Technology plays a crucial role in enhancing production efficiency and boosting labor productivity for manufacturers By implementing advanced technology, companies can achieve higher output and lower costs per product In line with national development goals, the Vietnamese government actively promotes the integration of new technologies, including information technology and biotechnology, into the production process to foster growth and innovation.
Vietnamese enterprises face significant challenges in technology transfer and application, with investment in science and technology remaining low compared to global standards The government allocates only about 0.5% of GDP to these activities annually Additionally, many micro and small enterprises prioritize survival in the market over investing in scientific advancements, limiting their capacity for technological investment.
Therefore, those enterprises which promote the application of new technologies in production will create a huge advantage in competing with the general background.
2.2.2 Business development in advanced stone products
2.2.2.1 Market of advanced stone products in Vietnam
The use of stones for paving in Vietnam dates back thousands of years and has evolved into a significant industry in recent years Production has surged from 0.2 million m² in 1990 to 6.5 million m² today, marking a remarkable 32-fold increase Key mining and processing centers have emerged in provinces such as Thanh Hoa, Nghe An, and Khanh Hoa, contributing to both local use and exports With 325 mines across various regions, estimated reserves stand at over 4 billion m³, although market supply was limited in 2009 The demand for high-grade paving stones is rising, driven by urbanization and an expanding real estate market, particularly for residential and commercial buildings As living standards improve, investors increasingly favor stone as a building material, leading to an anticipated annual growth rate of 20 to 25% for the paving stone industry in Vietnam, highlighting its promising market potential in the years to come.
2.2.2.2 The company supplies advanced stone products on the Viet Nam market
The majority of advanced stone products available in the market are sourced from small private establishments, with only a limited number of businesses and organizations involved in large-scale mining operations Most companies focus on producing and supplying natural stone by either exploiting local quarries or importing materials from abroad In Vietnam, a few companies are engaged in mining and stone production on a relatively larger scale.
Vinavico Joint-stock Company[VIE 10]:
Established in 2006 and rebranded as Vinavico Corporation in 2009, the company initially had a charter capital of 30 billion VND, which was later increased to 92 billion VND in 2010 Vinavico Corporation specializes in a diverse range of business activities, with a primary focus on mining and mineral processing, particularly in granite production The company manages several mining projects, including Tham Then, Pha Xum, and Khau Ca, and offers key products such as granite, stone blocks, and paving stones for roads and public works.
Our development strategy aims to establish our company as the leader in Vietnam's mining sector We prioritize sustainable economic growth by implementing modern technology and advanced management practices in our operations Additionally, we are committed to diversifying our business lines to seize new opportunities for development and enhance our production capabilities.
To foster sustainable development in the mining industry, it is essential to prioritize the integration of innovative technologies This strategy encompasses market expansion, product development, and the trading of both natural and artificial stones Companies should focus on the processing and importation of materials such as white marble and slate, ensuring efficient exploitation and processing of these valuable resources.
Strengths, Weaknesses, Opportunities and Threats of business
With analysis of chapter 2, we can build SWOT matrix for Vicostone as follows:
Table 2 11 SWOT Matrix of Vicostone
- Time to provide stone is quick
- High quality products, diverse models, types and friendly to environment
- Good qualification of the staff
- Have little experience in supplying products
- There is no domestic distribution system
- Cost price is quite lower than that of imported product with much lower quality
- Exclusive technology of producing artificial stone in Vietnam
- Risk of lacking of materials when expanding the scale
- Forecast the lack of human resource when developing in Vietnam market
Real state, strong migration situation
- The State supports to the application of technology in production
- Competitive level is not very high in
- Inconvenient economics situation has influence on construction market in recent years
- Prestige level in Vietnam market
- High competitive on the world
CHAPTER 3: PROPOSE STRATEGY AND SOLUTIONS TO IMPLEMENT STRATEGY FOR ARTIFICIAL STONE PRODUCT-LINE OFFOR VINACONEX ADVANCED COMPOUND STONE JOINT-STOCK
COMPANY 3.1 Developing direction of Viscostone [VIE 2, page.38-39]
Closely following the strategic direction of all business activities of the company:
The industrial production of innovative materials serves as the foundation of the business, with eco-materials playing a crucial role Additionally, trading in the mining and real estate sectors provides essential supply-demand support and financial leverage, facilitating the growth and expansion of industrial sectors The investment in Line No 2 is expected to be completed and operational by the third quarter of 2011.
Style Stone Joint Stock Company is undergoing a restructuring process to achieve full ownership of its charter capital This strategic move aims to facilitate investments that will expand the company's production capacity significantly By 2015, the company plans to increase its total capacity to 4.5 million square meters per year, enhancing its operational scale and efficiency.
Modernizing corporate administration through the implementation of enterprise resource planning (ERP-SAP) systems enhances management efficiency By adopting a more responsive and dynamic approach, businesses can swiftly capitalize on opportunities and effectively prioritize key elements for growth.
- Continuing to improve the system of legal documents of the company: the system rules and regulations, operational process; system of management reports and management information.
- Enhancing risk management in order to monitor, forecast and prevent and treat in time to difficult problems arising in order to maintain and develop business production.
Enhancing operational capabilities involves leveraging cost-effective capital sources, advancing production technologies, and elevating the quality of human resources and products These improvements are essential for boosting competitiveness and achieving sustainable development goals.
To enhance domestic market sales, the focus will be on projects with strong financial viability while also continuing to explore and expand in the Australian market Efforts will be intensified in marketing within the USA and EU, alongside the strategic development of new markets in Brazil and across South America.
- Increasing use of domestic raw materials in order to reduce costs and increase competitiveness of the Company.
- Allocating and balancing the budget reasonably; directing conservation and development capital; diversifying the supply of financial sources to ensure targets,developing direction of the Company.
- Providing information to investors, shareholders quickly and promptly, fully and transparently, complying with the provisions of the law on information disclosure.
To enhance the well-being of staff and improve their living conditions, it is essential to engage in social work and charitable activities These initiatives not only contribute to the sustainable development of the corporation but also demonstrate a commitment to community, environmental, and social responsibility.
3.2 Analysis of strategies and decisions to choose strategy for Vicostone
In the second chapter, the project team conducted an analysis of the current status of Vinaconex Advanced Compound Stone Joint Stock Company, commonly known as Vicostone Before exploring the strategies and strategic options available for Vicostone, we will first summarize the company's current information.
The advanced paving stones market in Vietnam presents significant potential for both exports and imports While exporting has been primarily dominated by Vicostone, the rapid growth in real estate development and urbanization has fueled increasing demand for these products However, companies within the industry are struggling to meet market needs in terms of design, pricing, and quality, indicating a gap that could be addressed to enhance productivity and competitiveness.
Vicostone is one of the largest manufacturing companies in Vietnam, specializing in advanced paving stones, distinguished by its significant capital compared to competitors Over the years, Vicostone has consistently developed its strategic orientation and plans, solidifying its position in the industry.
Vicostone specializes in the production of high-quality artificial stone, distinguishing itself as the sole company with an exclusive production line for these products This unique capability sets Vicostone apart from competitors, offering superior quality, faster turnaround times, competitive pricing, and a diverse range of models, types, and colors.
Vicostone that very few businesses have been This is the biggest competitive advantage that Vicostone has This is the key to success of the Business.
Vicostone faces significant challenges in entering the Vietnam market, including the absence of representative offices and branches in various provinces, a shortage of skilled personnel, and difficulties in sourcing raw materials amid rising global prices To address these issues, strategic recommendations have been proposed for Vicostone's successful market penetration in Vietnam.
3.2.1 The strategies can be implemented by Vicostone
The advanced paving stones market in Vietnam is currently in the Introduction phase of the product life cycle, indicating significant potential for growth As the market has not yet entered the growth phase, opportunities for expansion are substantial Vicostone stands out as the primary player in the artificial stone sector, boasting advantages such as an expanding scale, stable finances, and a well-trained technical team.
Artificial stone products offer several advantages over natural stone, including a wider variety of colors, customizable sizes, and faster production times To enhance these benefits, Vicostone should focus on research and development while simultaneously accelerating efforts to rapidly expand its presence in the domestic market The TOWS matrix, derived from the SWOT analysis presented in Chapter 2, will guide these strategic initiatives.
Table 3.1: Build the TOWS matrix of Vicostone
1 Time to provide stone is quick
2 High quality products, diverse models, types and
1 Have little experience in supplying products
2 There is no domestic distribution system friendly to environment
3 Good qualification of the staff
4 Cost price is quite lower than that of imported product with much lower quality
7 Exclusive technology of producing artificial stone in Vietnam
3 Risk of lacking of materials when expanding the scale
4 Forecast the lack of human resource when developing in Vietnam market
Opportunities - O Strategy SO Strategy SW
Real state, strong migration situation
3 The State supports to the application of technology in production
5 Competitive level is not very high in Viet
- - Open branches and deploy Marketing activities and product research (S6, S3, S5, O2, O5)
- Improve the productivity of production line serving the domestic market besides export (S6, S3, O4, O3) The market development strategy in the old markets (S3, S4, S5, O2, O5)
- The market development in Vietnam (S6, S3, S5, O4, O3)
- Attract the investment capital in typical technology for producing artificial stones(W3, W5, O4)
Threats -T Strategy ST Strategy WT
1 Inconvenient economics situation has influence on construction market in recent years
6 High competitive in the world
- The product diversification strategy- Reduce the proportion of exports from 95% to about 80% orienting to serve the domestic market initially (S5, S6, T2, T4)
- The conservative strategy, continue production but not do business in Vietnam- Doing research and detailed assessment on the segments of market
Continue using the SPACE matrix to define strategy for Vicostone by first building the table of the elements of matrix SPACE as follows:
Table 3 2 Space matrix of Vicostone
INTERNAL STRATEGIC POSITION EXTERNAL STRATEGIC POSITION
Financial strengths (FS) Score Environmental stability(ES) Score Investment earnings
Ease to withdraw from the market
Variation of demand Competitive pressure The price elasticity of demand
Competitive Advantages(CA) Industrial strengths (IS)
Highly potential growth Ease to entry market Scale of operating capital Human Resources
The power of production capacity
We have average FS values of 3.33; average ES is -2.4; average CA is -3; average IS is 3.6 FS + ES = 0.93 CA + IS = 0.6.
From the values table of Space matrix, we built the following vectors:
Figure 3.1: Vector built from SPACE matrix of Vicostone
Vicostone is a leading company in the industry, boasting significant competitive advantages To enhance its market position, the company should implement an offensive strategy focused on expanding production activities and its distribution network, while also strengthening its presence in the artificial stone products market.
Using QSPM model to quantify relatively the attractiveness between the strategies can be replaced We build QSPM matrix based on factors analyzed in IFE and EFE matrix as follows:
Strategies can be replaced Rating
The development market in Vietnam
Develop in the old markets
Time to provide stone is quick
High quality products, diverse models, types and friendly to environment 0.11 3 0.33 3 0.33
Good qualification of the staff
Cost price is quite lower than that of imported product with much lower quality
Exclusive technology of producing artificial stone in VN
Have little experience in supplying products 0.05 1 0.05 3 0.15
There is no domestic distribution system 0.07 1 0.07 2 0.14
Risk of lacking of materials when expanding the scale 0.07 2 0.14 1 0.07
Forecast the lack of human resource when developing in VN market 0.06 2 0.12 1 0.06
Real state, strong migration situation 0.08 2 0.16 1 0.08
The State supports to the application of technology in production
Competitive level is not very high 0.12 4 0.48 3 0.36
Inconvenient economics situation has influence on construction market in recent years
Prestige level in Vietnam market
High competitive in the world 0.06 4 0.12 2 0.24
3.2.2 Selecting the main strategy for Vicostone
Based on the analysis of section 3.2.1, our group propose Vicostone to choose the following strategy: “The development market strategy in Vietnam”
To effectively penetrate the advanced paving stone markets in major urban areas, specifically targeting Hanoi, Danang, and Ho Chi Minh City, our strategy aims to establish and dominate the market within five years This approach aligns perfectly with Vicostone's objectives for several compelling reasons.
- Vietnam markets is being evaluated as potential Requirements for using stones to pave are increasing.
PROPOSE STRATEGY AND SOLUTIONS TO IMPLEMENT
Analysis of strategies and decisions to choose strategy for Vicostone
In the second chapter, our project team conducted an analysis of the current status of Vinaconex Advanced Compound Stone Joint-Stock Company (Vicostone) Before exploring strategies and strategic options for Vicostone, we will first summarize the company's existing information.
The advanced paving stone market in Vietnam presents significant potential for both exports and imports While Vicostone has primarily focused on exporting to foreign markets, the growing demand driven by real estate development, population growth, and urbanization highlights the need for increased production Currently, companies in the industry struggle to meet market demands in terms of design, pricing, and product quality, indicating a gap that can be leveraged for future growth.
Vicostone stands as one of the largest manufacturing groups in Vietnam, specializing in advanced paving stones, thanks to its substantial capital compared to other companies in the sector Over the years, Vicostone has continuously evolved its development strategies and plans, reinforcing its position in the market.
Vicostone specializes in artificial stone, distinguishing itself as the sole company with an exclusive production line for these products This unique capability sets Vicostone apart from its competitors, offering superior quality, quicker turnaround times, competitive pricing, and a diverse range of models, types, and colors.
Vicostone that very few businesses have been This is the biggest competitive advantage that Vicostone has This is the key to success of the Business.
Despite numerous opportunities to enter the Vietnam market, Vicostone faces significant challenges, including the absence of representative offices and branches in various provinces, a shortage of skilled personnel, and difficulties in sourcing raw materials amid rising global prices To address these issues, the group has proposed strategic recommendations for Vicostone's successful entry into the Vietnamese market.
3.2.1 The strategies can be implemented by Vicostone
The advanced paving stones market in Vietnam is currently in the Introduction phase of the product life cycle, indicating significant growth potential Vicostone stands out as the primary player in the artificial stone sector, benefiting from an expanding scale, stable finances, and a well-trained technical team.
Artificial stone products offer several advantages over natural stone, including a wider range of colors, customizable sizes, and a quicker production timeline At this stage, Vicostone should prioritize research to enhance these product benefits while simultaneously accelerating efforts to rapidly expand its presence in the domestic market The TOWS matrix developed from the SWOT analysis in Chapter 2 will guide these strategic initiatives.
Table 3.1: Build the TOWS matrix of Vicostone
1 Time to provide stone is quick
2 High quality products, diverse models, types and
1 Have little experience in supplying products
2 There is no domestic distribution system friendly to environment
3 Good qualification of the staff
4 Cost price is quite lower than that of imported product with much lower quality
7 Exclusive technology of producing artificial stone in Vietnam
3 Risk of lacking of materials when expanding the scale
4 Forecast the lack of human resource when developing in Vietnam market
Opportunities - O Strategy SO Strategy SW
Real state, strong migration situation
3 The State supports to the application of technology in production
5 Competitive level is not very high in Viet
- - Open branches and deploy Marketing activities and product research (S6, S3, S5, O2, O5)
- Improve the productivity of production line serving the domestic market besides export (S6, S3, O4, O3) The market development strategy in the old markets (S3, S4, S5, O2, O5)
- The market development in Vietnam (S6, S3, S5, O4, O3)
- Attract the investment capital in typical technology for producing artificial stones(W3, W5, O4)
Threats -T Strategy ST Strategy WT
1 Inconvenient economics situation has influence on construction market in recent years
6 High competitive in the world
- The product diversification strategy- Reduce the proportion of exports from 95% to about 80% orienting to serve the domestic market initially (S5, S6, T2, T4)
- The conservative strategy, continue production but not do business in Vietnam- Doing research and detailed assessment on the segments of market
Continue using the SPACE matrix to define strategy for Vicostone by first building the table of the elements of matrix SPACE as follows:
Table 3 2 Space matrix of Vicostone
INTERNAL STRATEGIC POSITION EXTERNAL STRATEGIC POSITION
Financial strengths (FS) Score Environmental stability(ES) Score Investment earnings
Ease to withdraw from the market
Variation of demand Competitive pressure The price elasticity of demand
Competitive Advantages(CA) Industrial strengths (IS)
Highly potential growth Ease to entry market Scale of operating capital Human Resources
The power of production capacity
We have average FS values of 3.33; average ES is -2.4; average CA is -3; average IS is 3.6 FS + ES = 0.93 CA + IS = 0.6.
From the values table of Space matrix, we built the following vectors:
Figure 3.1: Vector built from SPACE matrix of Vicostone
Vicostone is a leading company in the industry, boasting significant competitive advantages To enhance its market position, the company should adopt an offensive strategy focused on expanding production activities and distribution networks while strengthening its business in artificial stone products.
Using QSPM model to quantify relatively the attractiveness between the strategies can be replaced We build QSPM matrix based on factors analyzed in IFE and EFE matrix as follows:
Strategies can be replaced Rating
The development market in Vietnam
Develop in the old markets
Time to provide stone is quick
High quality products, diverse models, types and friendly to environment 0.11 3 0.33 3 0.33
Good qualification of the staff
Cost price is quite lower than that of imported product with much lower quality
Exclusive technology of producing artificial stone in VN
Have little experience in supplying products 0.05 1 0.05 3 0.15
There is no domestic distribution system 0.07 1 0.07 2 0.14
Risk of lacking of materials when expanding the scale 0.07 2 0.14 1 0.07
Forecast the lack of human resource when developing in VN market 0.06 2 0.12 1 0.06
Real state, strong migration situation 0.08 2 0.16 1 0.08
The State supports to the application of technology in production
Competitive level is not very high 0.12 4 0.48 3 0.36
Inconvenient economics situation has influence on construction market in recent years
Prestige level in Vietnam market
High competitive in the world 0.06 4 0.12 2 0.24
3.2.2 Selecting the main strategy for Vicostone
Based on the analysis of section 3.2.1, our group propose Vicostone to choose the following strategy: “The development market strategy in Vietnam”
To effectively penetrate the advanced paving stone markets in major urban areas such as Hanoi, Danang, and Ho Chi Minh City, our strategy aims to gradually establish and dominate this market within five years This approach aligns perfectly with Vicostone's strengths and capabilities, ensuring a successful market presence.
- Vietnam markets is being evaluated as potential Requirements for using stones to pave are increasing.
Hanoi, Da Nang, and Ho Chi Minh City are the three largest urban centers in Vietnam, experiencing rapid urbanization and vibrant growth in construction and real estate These cities represent key target markets for Vicostone's sales campaigns, capitalizing on their dynamic development.
The company boasts a streamlined production process that ensures consistent output and quality, along with quick delivery times and a variety of shapes Its artificial stone products are not only aesthetically appealing but also cost-effective, making them a top choice for investors focused on competitive advantages.
Vicostone difference is, while other firms not currently or have only given the new production of artificial stone just for future plans.
Vicostone's current production capacity is primarily focused on exports, limiting its ability to meet the domestic market demand in Vietnam To address this, the company is actively seeking funding to expand its plant and increase production capacity This expansion aims to enhance Vicostone's market share both in the domestic and international markets over the coming years.
- The current labor force of Vicostone has not yet been capable of wide spreading even in national scale In order to implement the expansion of markets in Hanoi,
Da Nang, Ho chi Minh City, there is a need to recruit more employees to implement business activities The shortage of labor is inevitable.
- The company has experience in transporting products to markets around the world. Therefore, the supply to Da Nang and Ho Chi Minh markets would not be a problem for Vicostone.
Therefore, the only selection of Hanoi, Ho Chi Minh, Da Nang as the immediate target markets of Vicostone is appropriate.
Propose some measures to implement after choosing strategy for Vicostone
To effectively implement a strategy that sustains exports to global markets while leveraging the domestic market, our group proposes several solutions for Vicostone.
To achieve its strategic objectives, Vicostone faces a critical challenge regarding capital management The company has accumulated significant debt, notably borrowing 554.91 billion VND in 2010, which underscores the importance of addressing its financial structure for future growth.
- Vietnam Joint Stock Commercial Bank For Industry and Trade (VietinBank): 200 billion VND
- Bank for Investment and Development Ha Tay: 100 billion VND
- Joint Stock Commercial Bank For Foreign Trade of Vietnam (Vietcombank): 150 billion VND
- ANZ Bank of Vietnam: 2.6 million USD
To enhance production capacity, it is essential to attract external investment by securing loans from national credit institutions, issuing bonds for capital mobilization in the stock market, and selecting foreign strategic partners for additional funding.
Additionally, there is a need of adjust the budget by increasing cost of Marketing and training in order to developing the national market.
Continue maintaining the stability of solvency at high level and safe debt indicators for Enterprise.
3.3.2.1 Segmentation at initial stage of penetration
Vicostone primarily targets customers in three key cities: Hanoi, Da Nang, and Ho Chi Minh City The main focus is on large-scale real estate projects, including urban developments, office buildings, significant apartment complexes, hotels, major constructions, and commercial centers, while not supplying products for residential housing projects.
Vicostone is strategically positioned in the market alongside competitors such as Vinastone, Rich Stone, and Vinavico, all of which offer high-quality paving stones Notably, Vinastone and Rich Stone present similar products and scale to Vicostone Leveraging its technological advantages, Vicostone is poised to compete effectively against these established companies.
Vicostone's artificial stone products are crafted using a state-of-the-art production line unique to Vietnam, setting them apart from domestic offerings that primarily rely on natural stone extraction.
- Production time in comparison with mining and processing from natural stones is much faster.
- The quality of artificial stone is no less, even better than natural stone.
Vicostone provides a vast array of products featuring thousands of unique colors and shapes, achieved through the innovative mixing of its own materials This approach contrasts with traditional natural stone mining, where colors are limited by the specific raw materials sourced from quarries.
- Cost prices of products are lower than the exploitation of natural stones because of reducing a lot of transport logistics and crafted.
- Vicostone can produce products with various sizes:
Vicostone offers a variety of finished stone sheets in sizes including 1.2 x 3.0 m (1 cm and 1.2 cm thickness), 1.4 x 3.0 m (2.0 cm and 3.0 cm thickness), and 1.65 x 3.34 m (2.0 cm and 3.0 cm thickness) Additionally, final cutting stones are available in sizes 30x30 cm, 40x40 cm, 50x50 cm, and 60x60 cm, with thicknesses of 1.0 cm and 1.2 cm, as well as intermediate sizes of 30x60 cm and 40x60 cm With these exceptional features, Vicostone products boast a strong competitive edge in the market, catering to the diverse and demanding needs of customers.
Products are divided into two groups including finished stone sheet and finished cutting stone
Vicostone offers competitive pricing for its products, significantly lower than many competitors in the industry However, the final cost is influenced by the order quantity and the negotiation skills of both parties involved.
Method of payment: Payment can be made on deferred payment, depending on financial ability and negotiation between Vicostone and partners.
We are establishing representative offices in Da Nang and Ho Chi Minh City to oversee activities in these regions, with a long-term goal of expanding to surrounding areas and eventually nationwide Our focus is on supplying products to companies in the industry, including Vinastone, Phu Quy Stone, and Vinavico We aim to directly supply large manufacturing, construction, and real estate businesses such as PetroLand and Vinaconex, ensuring they receive high-quality materials to support their projects.
Method of promotion for these products is to sign contracts to supply artificial stone products directly to the projects:
+ Make a list of enterprises to conduct directly offering.
+ Evaluate accurately the demand for products from customers.
+ Carry out customer care operations.
+ Sign the cooperation agreement with partners using the product for long term + Build the show room of products at the representative offices.
+ Organize seminars related to the industry, both to research on the industry as well as competitors and to introduce products in the seminars.
+ Advertise in the mass media.
3.3.3 Solutions in technology, research and development
To successfully expand the market and attract new customers while enhancing productivity, it is essential to increase the demand for raw materials, particularly for artificial stone Therefore, the company must prioritize research and development activities to optimize input sourcing and improve overall efficiency.
- Take advantage of the use of domestic raw material.
- Research to find out quartz resources in the country to identify alternative material resources.
- R & D center needs to enhance research to find out alternative products for sources of raw materials imported from abroad (high prices).
- Continue to exploit exclusive technology production line of artificial stone in Vietnam to create competitive advantages.
- Organize creative activities and initiatives within the company to find innovative techniques to help improve productivity, quality and reduce costs for companies
Encourage creative work in production to contribute to improving technical processes. 3.3.4 Human resource orientation
To effectively penetrate the Vietnamese market, Vicostone should consider establishing agents or representative offices in its three largest cities: Hanoi, Da Nang, and Ho Chi Minh City This strategic move will enhance brand visibility and facilitate better customer engagement in these key urban centers.
To effectively implement the project in Da Nang and Ho Chi Minh City, it is essential to organize the labor structure in these locations The draft plan outlines the involvement of approximately 10 key participants to ensure successful execution.
Thus, in coming time, Vicostone will need about 20-30 new staff In the initiative time a number of experienced staff may be appointed to build the apparatus to operate in
Da Nang and Ho Chi Minh It is expected that approximately 60-80% of the initial staff recruited are local workers.
In addition, training also needs to be more organized The training activities will have to be done as following:
- Training new employees on product knowledge, professional skills in line with the development direction of the company.
- Training on marketing skills because target market is the domestic enterprises in three cities: Hanoi, Da Nang, Ho Chi Minh.
- Technical training for staff in implementing new production techniques and when expanding production and establishing new production parts.
Internal training and short-day training programs are essential for addressing immediate operational needs Once stable operations are established in the offices located in Da Nang and Ho Chi Minh City, long-term training plans will be developed and implemented.
- Organize visits to plants of the same products in foreign markets so as to learn professionalism, diversity in shape and managerial experience abroad.
To enhance operational efficiency, companies should invest in long-term management training programs, such as MBAs and courses in accounting, finance, and quality management, for their intermediate-level staff This strategic approach equips employees with essential knowledge, fostering a scientific, effective, and professional work environment that directly benefits production processes.
3.3.5 Solutions in the process of managerial organizing and production
To achieve the proposed strategy, it is necessary to implement changes in managerial organization as follows:
Organization chart of Vicostone
To enhance compliance with evolving conditions, the Company has restructured its organization to boost specialization within its divisions, thereby optimizing production and business activities for maximum effectiveness.
To enhance organizational efficiency, the company will establish a dedicated Export Department, along with separate Marketing, Sales, and Purchasing Departments Additionally, a distinct unit for Safe-Sanitation Workers will be created, along with an Environment and Legal Division that will operate independently from the Administration Office, leading to the formation of a Legal Department and a PR and Safety Committee Furthermore, a separate Production Board will be established to oversee the creation of Production Plant No 1, which will focus on Bretonstone production lines and Terastone workshops, as well as a Crushing-Screening workshop.
- Establish a new factory No.2 on the basis of production lines Bretonstone 2
On the other hand, to prepare sufficient resources for business expansion, in 2010,VICOSTONE has recruited 04 masters, 46 engineers, 93 graduates and workers with college level [VIE 2, page.51]
As of December 31, 2010, Vicostone employs a total of 490 individuals, contributing to a broader workforce of over 1,000 across its entire system The labor structure is categorized based on various qualifications.
Table 2 5 The labor structure of Vicostone [VIE 2, page.68]
Order Level Quantity (person) Percentage (%)
Regimes and policies for employees, such as social assurance, health insurance, unemployment insurance, maternity regime, shift, health-care service The Company has always been fully implemented and timely.
Despite challenges from the economic recession, the company ensures that all workers are consistently employed, with average incomes significantly exceeding those of local competitors In 2010, the average monthly income reached 8,293,000 VND per person, reflecting a 15.46% increase compared to 2009.
Table 2 6: Average incomes for years [VIE 2, page.69]
Vicostone staff possesses extensive experience and continuously enhances their knowledge, contributing to a steady increase in average income over the years The overall morale among employees remains stable, fostering a productive environment that drives business success and boosts individual earnings.
Based on annual reports in 2010, our group has selected data relating to assets of
Vicostone as follows: Unit: Billion VND
Figure 2.2: Value of total assets over years [VIE 2, page.18]
Figure 2.3: Charter capital and Equity over years Table 2.7: Value of assets at the end of 2010 [VIE 2, page.80-81]
At the beginning of year (01 st Jan, 2010)
At the end of year
2 Long-term asset 285.159.575.931 466.623.260.037 181.463.684.106 TỔNG CỘNG
The asset index of Vicostone has been growing over the years The company is expanding its manufacturing operations in a sustainable manner.
Table 2 8 The basic financial indicators over the years [VIE 2, page.18-42]
VND Billion VND Billion VND
Bi Bi lli on VND Billion VND
9 Earnings per share(EPS)EPS VND 5.911 6.249 6.244 7.007
10 Rate of Rreturn before tax/Net revenue
11 Rate of rReturn % 20,11 17,96 14,08 after tax/Net revenue
12 Rate of rReturn before tax /Total asset
Figure 2.4: Revenue, Pretax Profit, after tax profit over years [VIE 2, page.19] Table 2.9: Estimated profit distribution of the parent company in 2010
II Pretax accounting profit in 2010 122.235.315.763
VI The remaining profits have not yet been distributed 77.713.662.947
Vicostone has demonstrated consistent growth and stability in its business results over the years The company's financial indicators remain at a secure level, enabling it to effectively carry out production and business operations while safeguarding the interests of both employees and shareholders.
2.2.3.4 The administrative capacity of business [VIE 2, page.42]
Current leaders possess professional qualifications and strong management skills, often backed by years of experience in construction, building materials, and administration, which equips them with extensive knowledge in production management.
In 2010, to enhance professionalism, transparency and timely data in decision- making business plans, the Board of Administration has decided to invest in applying ERP systems-SAP stage 1
ERP (Enterprise Resource Planning) is a comprehensive system comprising various software modules designed to assist organizations in managing their resources and operations efficiently ERP-SAP solutions empower business managers to effectively oversee financial accounting, materials management, production, distribution, project management, service management, customer relations, and human resources By implementing an ERP-SAP system, companies can modernize their management processes in line with international standards, enhancing both leadership capabilities and employee productivity.
The advantages outlined will enhance the discipline and transparency of the Company's operations while optimizing raw materials and productivity In today's challenging business environment, these benefits are crucial for improving the Company's competitiveness Stage1 was officially launched in September 2010, with the system implemented with the support and consultation of CSC experts.
From part 2.2.3 we built IFE matrix on the strengths and weaknesses of the Business:
Table 2.10: IFE Matrix of Vicostone
Internal Factors Evaluation Weight Rating Weighted Scores
1 Time to provide stone is quick 0.14 4 0.56
High quality products, diverse models, types and friendly to enviromentfriendly to environment
3 Good qualification of the staff 0.08 2 0.16
4 Cost price is quite lower than that of imported product with much lower quality 0.1 3 0.3
7 Exclusive technology of producing artificial stone in VN 0.15 4 0.6
1 Have little experience in supplying products 0.05 1 0.05
2 There is no domestic distribution system 0.07 3 0.21
3 Risk of lacking of materials when expanding the scale 0.07 3 0.21
4 Forecast the lack of human resource when developing in VN market 0.06 2 0.12
The result is of 2.88 > 2.5 shows that the current strategy of the business is promoting well the strengths and limiting its own weaknesses.
2.3 Strengths, weaknesses, opportunities and threats of the business
With analysis of chapter 2, we can build SWOT matrix for Vicostone as follows:
Table 2 11 SWOT Matrix of Vicostone
- Time to provide stone is quick
- High quality products, diverse models, types and friendly to environment
- Good qualification of the staff
- Have little experience in supplying products
- There is no domestic distribution system
- Cost price is quite lower than that of imported product with much lower quality
- Exclusive technology of producing artificial stone in Vietnam
- Risk of lacking of materials when expanding the scale
- Forecast the lack of human resource when developing in Vietnam market
Real state, strong migration situation
- The State supports to the application of technology in production
- Competitive level is not very high in
- Inconvenient economics situation has influence on construction market in recent years
- Prestige level in Vietnam market
- High competitive on the world
CHAPTER 3: PROPOSE STRATEGY AND SOLUTIONS TO IMPLEMENT STRATEGY FOR ARTIFICIAL STONE PRODUCT-LINE OFFOR VINACONEX ADVANCED COMPOUND STONE JOINT-STOCK
COMPANY 3.1 Developing direction of Viscostone [VIE 2, page.38-39]
Closely following the strategic direction of all business activities of the company:
The industrial production of innovative materials is central to our operations, with eco-materials playing a crucial role Our activities in the mining and real estate sectors provide essential supply-demand support and financial leverage, facilitating the growth and expansion of various industrial fields We aim to complete investments in Line No 2 to ensure it becomes operational by the third quarter of 2011.
Style Stone Joint Stock Company is undergoing a restructuring to achieve 100% ownership of its charter capital, which will facilitate investments aimed at expanding production capacity This initiative is expected to increase the total output of the complex to 4.5 million square meters annually by 2015.
To modernize and professionalize corporate administration, implementing enterprise resource planning (ERP-SAP) systems is essential for improving management efficiency By fostering a more responsive and dynamic approach to corporate governance, businesses can swiftly capitalize on opportunities and effectively prioritize key elements for success.
- Continuing to improve the system of legal documents of the company: the system rules and regulations, operational process; system of management reports and management information.
- Enhancing risk management in order to monitor, forecast and prevent and treat in time to difficult problems arising in order to maintain and develop business production.
Enhancing operational capabilities involves leveraging cost-effective capital sources, advancing production technology, and investing in human resource quality By improving product quality, businesses can boost their competitiveness and achieve sustainable development goals.
To enhance domestic market sales, it is essential to focus on projects with strong solvency while continuing to explore and expand in the Australian market Additionally, boosting marketing efforts in key regions such as the USA and the EU, along with developing new opportunities in Brazil and the broader South American market, will be vital for growth.
- Increasing use of domestic raw materials in order to reduce costs and increase competitiveness of the Company.
- Allocating and balancing the budget reasonably; directing conservation and development capital; diversifying the supply of financial sources to ensure targets,developing direction of the Company.
- Providing information to investors, shareholders quickly and promptly, fully and transparently, complying with the provisions of the law on information disclosure.
To enhance the well-being of employees and foster a supportive work environment, our corporate social responsibility initiatives focus on social work and charitable activities These efforts are aimed at ensuring sustainable development while positively impacting the community, environment, and society at large.
3.2 Analysis of strategies and decisions to choose strategy for Vicostone