Luận văn thạc sĩ quản trị kinh doanh quốc tế MBA (109)

GRIGGS UNVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM CAPSTONE PROJECT REPORT THE GENERAL DEVELOPING STRATERY FOR VICOSTONE IN PERIOD OF 2012 - 2013 VIETNAM MARKET PENETRATION STRATEGY OF ARTIFICIAL STONE PRODUCTS OF VINACONEX ADVANCED COMPOUND STONE JOINT STOCK COMPANY (VICOSTONE) Group number: Student’s name: Nguyen Viet Dung Nguyen Chu Son Nguyen Trung Dung Doan Ngoc Dung CLASS: GaMBA01.N06 HANOI, 2011 TABLE OF CONTENTS Table of content .I List of charts ii List of figures iii List of tables iv INTRODUCTION CHAPTER I: THREORICAL FOUNDATION OF MARKET PENETRATION STRATEGY 1.1 Some concepts and definitions related to strategy .3 1.2 Process of building strategy 1.3 The analytical models used to build strategy 1.3.1 The models analyzing the factors outside the Enterprise .4 1.3.2 Internal Factors Evaluation matrix (IFE) .87 1.3.3 SWOT model 1.3.4 TOWS matrix model 109 1.3.5 SPACE matrix 110 1.3.6 Quantitative strategic planning matrix model (QSPM) 11 1.4 The types of strategy for a Company 12 1.4.1 Corporate-level strategy 12 1.4.2 Business-level strategy 12 1.4.3 Functional of departmental-level strategy 12 CHAPTER II: ANALYZING THE SITUATION OF VINACONEX ADVANCED COMPOUND STONE JOINT STOCK COMPANY (VICOSTONE) .143 2.1 Overview of Vinaconex advanced compound stone joint-stock Company 143 2.1.1 General information 143 2.1.2 Mission, vision, strategy 143 2.1.3 Field of activities, technologies, products .154 2.1.4 Relating Companies 175 2.1.5 The important milestones 186 2.2 Analyzing the status of Vinaconex advanced compound stone joint-stock Company 2018 2.2.1 The common conditions in Vietnam .2018 2.2.2 Business development in advanced stone products 231 2.2.3 Factors inside the Enterprise 297 2.3 Strengths, Weaknesses, Opportunities and Threats of business 374 CHAPTER III: PROPOSE STRATEGY AND SOLUTIONS TO IMPLEMENT STRATEGY FOR ARTIFICIAL STONE PRODUCT-LINE OF VINACONEX ADVANCED COMPOUD STONE JOINT STOCK COMPANY .385 3.1 Developing direction of Vicostone 385 3.2 Analysis of strategies and decisions to choose strategy for Vicostone 369 3.2.1 The strategies can be implemented by Vicostone 4037 3.2.2 Selecting the main strategy for Vicostone .4442 3.3 Propose some measures to implement after choosing strategy for Vicostone 454 3.3.1 Financial solutions 454 3.3.2 Marketing solutions 464 3.3.3 Solutions in technology, research and development .487 3.3.4 Human resource orientation 497 3.3.5 Solutions in the process of managerial organizing and production 5048 3.4 Propose roadmap for implementing strategy of Vicostone 510 CONCLUSION 543 REFERENCES APPENDIX LIST OF CHART Chart 2.1: Organization chart of Vicostone .297 LIST OF FIGURES Figure 1.1: Product Life Cycle Figure 1.2: Example of EFE matrix 86 Figure 1.3: Example of IFE matrix 98 Figure 1.4: TOWS matrix 110 Figure 1.5: SPACE matrix .110 Figure 1.6: Quantitative strategic planning matrix model 11 Figure 2.1: The process of producing artificial stone 164 Figure 2.2: Value of total assets over years 3129 Figure 2.3: Charter capital and Equity over years 320 Figure 2.4: Revenue, pretax profit, after tax profit over years 314 Figure 3.1: Vector built from SPACE matrix of Vicostone 440 Figure 3.2: The implementation roadmap for Vicostone 52 LIST OF TABLES Table 2.1: Average per capita income for years .2219 Table 2.2: Percentage of urban population of region for years 220 Table 2.3: Situation of business result of Vinanvico in 2010 274 Table 2.4: EFE matrix of Vicostone Company 286 Table 2.5: The labor structure of Vicostone .3028 Table 2.6: Average income for years .3129 Table 2.7: Value of assets at the end of 2010 320 Table 2.8: The basic financial indicators over years 320 Table 2.9: Estimated profit distribution of the parent Company in 2010 341 Table 2.10: IFE matrix of Vicostone 353 Table 2.11: SWOT matrix of Vicostone 374 Table 3.1: Build the TOWS matrix 4138 Table 3.2: SPACE matrix 4340 Table 3.3: QSPM matrix 41 Table 3.4: The implementation roadmap for Vicostone 51 INTRODUCTION The existence of stable and sustainable development is always a top concern for every business In the context of competition and globalization are increasingly fierce as today, businesses need to take clear and solid steps to ensure the success achieved in the market Strategic management is an important key to help the corporate determine the most appropriate way to develop Therefore, the understanding of the principles and how to conduct strategic management in forming policy for the business is very important Vinaconex Advanced Compound Stone Joint-stock Company (abbreviated name is Vicostone) is an enterprise specializing in producing advanced artificial stone for export Therefore, for companies, Vietnam market is a market with great potential but to being ignored Vicostone is planning to research in order to develop the brand and Vicostone’s products in Vietnam market Based on the needs of Vicostone, the group has conducted to research topic of building "Vietnam market penetration strategy of artificial stone products of Vinaconex Advanced Compound Stone Joint-stock Company (Vicostone)“The general developing strategy for Vicostone in period of 2012-2013”" The purposes of the research team to implement the project are: • Giving a number of methods and models used for building strategy for a business • Analyzing and evaluating the operation status of Vicostone with artificial stone products manufactured by company • Proposing strategies and solutions needed to help Vicostone bring advanced artificial stone products gradually to penetrate Vietnam market Object of the research is Vinaconex Advanced Compound Stone Joint-stock Company (Vicostone) with artificial stone products manufactured by using advanced Composite materials Currently this product is provided in the world market by the company However, the domestic market is of great potential to being ignored In that context, the building a strategy to penetrate Vietnam market is an appropriate decision Based on the data collected within the scope of research, project mainly gives the comment and assessment, forming market penetration strategy of advanced stone products of Vicostone in period of 2012 - 2013 The research is based on the theoretical basis of the Marketing subject, human resources management and especially based on the theory of Strategic Management In addition to some traditional methods of research such as synthesis, comparison and analysis on the basis of data collected, the authors use some methodological characteristics of strategic management as a model SWOT analysis, TOWS, PEST, QSPM and many some other models Besides an introduction, conclusion, appendices, tables, table abbreviations, the capstone project report is presented in 03 chapters  Chapter I: Theoretical foundation of market penetration strategy  Chapter II: Situation analysis of factors and features works from the inside and outside of Vicostone  Chapter III: Strategy options for Vicostone and measures to implement that strategy Our group would like to send sincere thanks and deep gratitude to the teachers of training program of Master of Business Administration GaMBA - Grigss University organized by ETC - Hanoi National University Additionally, our group would also like to thank the whole class, management board of class GaMBA01.N06, who has many comments and are dedicated to helping groups this research CHAPTER I: THEORETICAL FOUNDATION OF MARKET PENETRATION STRATEGY 1.1 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 What is Strategy? According to the slide lecture, the strategy is "a complex series of actions to mobilize as many the resources as an organization / individual can to achieve a specific purpose." According to Fred R David, the strategy is "the means to achieve longterm goals." [VIE 1, page.20] What is strategic management? According to Fred R David, that is "an art and science establishment, implementation and evaluation of decisions related functions allowing an organization to achieve these goals [VIE 1, page.9] Strategists, who are they? The strategy builders may be strategic executive directors, president, owner, chief financial officer or some companies have titles of chief strategy officers They are responsible for developing strategies for the organization 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] Vision: can be understood as the picture that the organization wants to reach and achieve in the future We can see the desire and motivation of corporate activity based on the vision Opportunity is a condition in the general environment that if a company knows how to exploit, it will achieve strategic competitive advantage Competitive Advantages(CA) Product quality -2 Industrial strengths (IS) Highly potential growth Speed of supplying products -1 Ease to entry market Production technology -2 Scale of operating capital Product cost prices -2 Human Resources Distribution System -5 The power of production The prestige in market -5 capacity Raw materials resources -4 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 This is strong and outstanding company in the industry and having many competitive advantages in the market The strategy applied in this case is offensive strategy Vicostone should promote the expansion of production activities and distribution network and developing strongly business of artificial stone products on the market 45 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 The development Develop in the The factors Rating The internal factors Time to provide stone is quick High quality products, diverse models, market in Vietnam old markets AS TAS AS TAS 0.11 0.33 0.33 imported product with much lower 0.1 0.3 0.2 quality Stable finance capacity Large scale Exclusive technology 0.07 0.05 0.21 0.1 0.14 0.05 0.05 0.05 0.15 0.07 0.07 0.14 0.07 0.14 0.07 0.06 0.12 0.06 0.08 0.16 0.08 0.11 0.22 0.22 types and friendly to environment Good qualification of the staff Cost price is quite lower than that of of producing artificial stone in VN Have little experience in supplying products There is no domestic distribution system Risk of lacking of materials when expanding the scale Forecast the lack of human resource when developing in VN market Operation cost increases The external factors Speed of developing construction, Real state, strong migration situation Highly potential market The State supports to the application of 46 technology in production Strong investment into Vietnam Competitive level is not very high Inconvenient economics situation has influence on construction market in recent years Prestige level in Vietnam market High interest rate Available material resources High cost of technology High competitive in the world Total 0.12 0.48 0.36 0.05 0.1 0.05 0.15 0.3 0.3 0.06 0.12 2.7 > 0.24 2.39 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” First exploit markets of advanced paving stones in the big urban, target markets are Hanoi, Danang, Ho Chi Minh Gradually assert and dominate the market in years In view of our group, this strategy will suit Vicostone most because of following reasons: - Vietnam markets is being evaluated as potential Requirements for using stones to pave are increasing - In perspective market, the three largest cities: Hanoi, Da Nang, Ho Chi Minh are three cities having high speed of urbanization, the development of construction and real estate of the most vibrant in the country So this will be the main target markets for Vicostone to focus on sales campaign - Currently, the Company has had production process, regular output, ensuring quality, quick time for supplying and diversity in shapes The artificial stone products bring high effectiveness in aesthetics and production costs This is the project investor and are interested in competitive factors largest and most 47 Vicostone difference is, while other firms not currently or have only given the new production of artificial stone just for future plans Current production capacity mainly for export and therefore can not cover the - whole market power in Vietnam Currently Vicostone continue to seek funding to conduct plant expansion, its capacity for expansion of production scale for the following year and gradually the rate of change of market share in domestic and - export business exported to foreign countries for 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 3.3 Propose some measures to implement after choosing strategy for Vicostone In order to implement the strategy in which maintains its export to world markets as well as exploits the domestic market, our group has some suggestions on solutions to Vicostone as follows: 3.3.1 Financial solutions To implement the objectives with the new strategy, a key issue of Vicostone is the capital Currently, Vicostone has borrowed a large amount of capital, especially in 2010 with a total limit of 554.91 billion VND, in particular: - Vietnam Joint Stock Commercial Bank For Industry and Trade (VietinBank): 200 billion VND - Bank for Investment and Development Ha Tay: 100 billion VND 48 - HSBC Bank: 2.78 million USD - Joint Stock Commercial Bank For Foreign Trade of Vietnam (Vietcombank): 150 billion VND - ANZ Bank of Vietnam: 2.6 million USD However, it is in need of continuing to attract investment resources from outside to implement projects of expanding production scale by borrowing from national credit organizations, issuing bonds to mobilize capital through the stock market, carrying out choosing foreign strategic partners to mobilize capital 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 Marketing solutions 3.3.2.1 Segmentation at initial stage of penetration In term of customers: Target customers of Vicostone are customers in three major cities, Hanoi, Da Nang, Ho Chi Minh City The main target customers are real estate projects, urban projects, office buildings, large apartment buildings, hhotels, major works, commercial centers, and not supply products for housing projects Location positioning in the market: According to existing information gathered, the companies providing high-grade products of paving stones on the market are Vinastone, Rich Stone, Vinavico among of those Vinastone and Rich Stone have scale and similar products with Vicostone With advantages about technology, Vicostone will compete directly with products of these enterprises 3.3.2.2 Product Positioning Artificial stone products of Vicostone are produced on technological production line which is modern and exclusive in Vietnam, so there are many differences compared to 49 domestic products (currently mainly extracted from natural stones, not artificial stone products) - 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 - The shapes and colors are diverse, the color is caused by mixing own colors Contrary to the mining of natural stones is that the colors are dependent and raw material quarries Vicostone can offer products with thousands of different colors - 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: + Finished stone sheet: Size 1.2 x 3.0 m with a thickness of and 1.2 cm Size 1.4 x 3.0 m with a thickness of 2.0 and 3.0cm Size 1.65 x 3.34 m with a thickness of 2.0 and 3.0 cm + Final cutting stone: Size 30x30cm; 40x40cm; 50x50cm; 60x60cm with 1.0 and 1.2cm thickness The intermediate sizes are 30x60cm; 40x60cm with above thickness With all the outstanding advantages as above, it makes sure that the products of Vicostone have huge competitive capacity in the market, meeting the most austere needs of customers 3.3.2.3 Marketing strategy – Marketing Mix  Product Products are divided into two groups including finished stone sheet and finished cutting stone  Price Pricing: The cost prices of products of Vicostone are surely much lower than those of other companies in the same industry However, the price is also dependent on the quantity of each order, negotiation ability of each party 50 Method of payment: Payment can be made on deferred payment, depending on financial ability and negotiation between Vicostone and partners  Place Establishing a representative office in Da Nang, Ho Chi Minh These two units will be responsible for activities in these areas Long-term orientation is to expanse to the surrounding areas In the future is deploying throughout the country.Providing for companies in the industry if they demand: vinastone, Phu Quy stone, Vinavico Directly supply products to the large manufacturing, construction and real estate businesses such as: PetroLand (Oil and Gas Properties), Real Estate Vinaconex  Promotion 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 In the process of expanding the market, looking for new customers, improving productivity involve increasing demand for raw materials For artificial stone, the input is very important Hence the research and development activities, the company should implement the following: - Take advantage of the use of domestic raw material 51 - 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 Since the target markets as three largest cities are Hanoi, Da Nang and Ho Chi Minh City, it is advisory for Vicostone to promote to opening agents or representative offices in Da Nang and Ho Chi Minh City To implement this work, there is a need of organizing the structure of labor at the locations above According to draft plan, there are about 1015 people at each offices 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 52 - Technical training for staff in implementing new production techniques and when expanding production and establishing new production parts Other forms of training can be internal training, short-day training to meet the needs of the immediate requirements Then, when there are stable operations at the offices in Da Nang, Ho Chi Minh, the training plans for the longer term will be taken account - Organize visits to plants of the same products in foreign markets so as to learn professionalism, diversity in shape and managerial experience abroad - Continue to send intermediate-level staff for training in long-term management programs such as MBA, programs in accounting, finance, quality management to manipulate back into the actual production of company These are important steps to equip companies with the knowledge to operate scientifically, effectively and professionally 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: - Establishing representative offices in Ho Chi Minh (HCM), Da Nang and organizing structure of personnel in two locations For the Hanoi area, the main address at the headquarters in Hoa Lac Hi-tech Zone – Thach That Commune The identification of the target markets does not mean that the products are not provided for projects in other provinces when partners are in need It is necessary to comply flexibly with requirements to provide products from other regions - Conducting new employee recruitments, training for these employees - Deploying the application of extensive ERP - SAP system to improve operational management of the business On the organization of production, there is a need to the following: 53 - Putting into operation the factory No.1, on the basis of separating the Board of production and progress of projects including the production line Bretonstone - Implementing quality control procedures in manufacturing operations to improve operational efficiency of enterprises - Based on the immediate needs of the market, Enterprise can carry out assigned shift, overtime producing to meet the production shortfall - Implementing research of investment, or self-studying of automated machines to be taken into the stages of the production process to improve the performance of the manufacturing process - Implementing well real estate projects of the company to put the products of Vicostone into use - Developing the plan for the transportation of products nationally, signing transportation contracts with partners Actively building up domestic transportation force, first to build a fleet for transport in the north to transport stone products to the projects 3.4 Propose roadmap for implementing strategy of Vicostone We can propose the work with the following schedule for Vicostone to implement Conducting in Da Nang, HCM City to research market (about 10 days) for each group to perform → Implementing procedures to establish representative offices in Da Nang, HCM City (Duration months) then recruiting staff for the offices → Carrying out activities to promote Vicostone advertising on mass media → Increasing plant capacity planned Putting the offices into operation early in 2011 → Implement training staff in the office, send staff on training and working in Danang, HCM → Complete line technology, the plant Set up more factories to make separate production units → Conduct promotion for Vicostone Recommending activities, product promotion, search for cooperation contracts Expected in 2012, Vicostone will start selling the product to market 54 TableFigure 3.24: The implementation roadmap for Vicostone Activities Research market in Month 2011 10 11 12 Month 2012 10 Month 2013 11 12 HN, Danang, HCM City Establish Offices in Danang, HCM City Recruit staff Conduct activities ` ` in Marketing Promotion Improve productivity Put the offices into operation Build plant for line BreatonStone 55 10 11 12 Exploit the market in Danang, HCM Restructure of StyleStone Develop the transport force Evaluate the operations Evaluate strategy 56 CONCLUSION Market for advanced paving stones in Vietnam is a promising potential market, potentially higher profits for manufacturers Paving stones of Vicostone are artificial stone products groundbreaking in the market Vicostone has a product with many advantages compared to other industry rivals Vicostone is a business that has many advantages in exporting advanced stone products to overseas markets The world situation changes which increase costs and tend to reduce profits Vicostone have turned to their available market but untapped that is domestic market Our group step by step analyzes Vicostone status, strengths, weaknesses, opportunities and threats With these available researching tools, our team has grounds to propose for Vicostone penetration strategy of artificial stone products in Vietnam market, namely: The development market in Vietnam "Firstly, exploit market of advanced paving stones in large urban areas, the target markets are Hanoi, Danang, Ho Chi Minh Gradually sure to enter and claim a place in the Vietnam market in two years " Our group supposes that this would be the most appropriate strategy for the development of Vicostone in Vietnam market Vicostone in the current context 57 REFERENCES Vietnamese (VIE): The authors Truong Cong Minh, Tran Tuan Thac, Tran Thi Tuong Nhu (2006), "Concept of Strategic Management" translation of the original Fred R David, Statistics Publishing House, Hanoi Vicostone (2010) Annual Report 2010 Securities Corporation MHB (2011), "Report on Macroeconomic Analysis & Vietnam's stock market in early 06 months of 2011) General Statistics Office (2010), "Some main results from the survey of households living in 2010" - Income Section Giang Thanh Long (2010), "Taking advantage of golden population opportunities in Vietnam, opportunities, challenges and policy implications", Report of the United Nations Population Fund UNFPA Veronique Marx and Katherine Fleischer (2010), "Migration - Opportunities and challenges for socio - economic development in Vietnam", Report of the United Nations Population Fund UNFPA 2010, http://truyenthongkhoahoc.vn/vn/Khuyen-khich-doanh-nghiep-dau-tu-congnghe-Cai-thien-nguon-von-va-hanh-lang-phap-ly-c1026/Khuyen-khich-doanhnghiep-dau-tu-cong-nghe-Cai-thien-nguon-von-va-hanh-lang-phap-ly-n723 Adrian C Hayes, Nguyen Dinh Cu, Vu Manh Loi (2009), "Population and Development in Vietnam: towards a new strategy from 2011 to 2020", Report of the United Nations Population Fund UNFPA Tran Van Huynh (2009), "Market of paving stones in Vietnam, Investment Opportunities and Development", article in http://stonevina.com/?mod=news&view_news_id=94 10 Vinavico Corporation (2010), "Annual Report 2010" 11 Vinastone.com.vn English (ENG) Fred R.David (2011), “Strategic Management, Concepts and cases” QuickMBA.com, http://www.quickmba.com/marketing/product/lifecycle/ 58 http://www.mba-tutorials.com, http://www.mba-tutorials.com/strategy/76-the-efematrix-external-factor-evaluation-matrix.html Mba-lectures.com (2010), http://mba-lectures.com/management/strategic- management/988/internal-factor-evaluation-matrix-wal-mart.html Berifar.com, http://www.berifar.com/matrix.html Mba-lectures.com (2010), http://mba-lectures.com/management/strategic- management/1102/space-matrix-of-coca-cola-company.html Phụ lục 59 ... Administration GaMBA - Grigss University organized by ETC - Hanoi National University Additionally, our group would also like to thank the whole class, management board of class GaMBA01.N06, who... number: Student’s name: Nguyen Viet Dung Nguyen Chu Son Nguyen Trung Dung Doan Ngoc Dung CLASS: GaMBA01.N06 HANOI, 2011 TABLE OF CONTENTS Table of content .I List of charts