Luận văn thạc sĩ quản trị kinh doanh quốc tế MBA (183)

TABLES OF CONTENTS LIST OF ABBREVIATIONS LIST OF FIGURE chart AND TABLE .9 ASSERTION 11 ACKNOWLEDGEMENT 12 ABOUT THE AUTHORS 12 INTRODUCTION .13 I Justification of the necessity of the capstone project 13 II Research objectives and applicability 15 III Scope of the research work 15 IV Research methodology 16 V Structure .17 CHAPTER I - THEORETICAL BACKGROUND 18 I Fundamental issues of strategy and modern business strategy 18 1.Viewpoints about strategy 18 2.Typical features of a strategy 19 3.Types of business strategy 20 1.1 Classification of business strategy by levels 20 1.2 Classification of business strategies by content 21 1.3 Classification of business strategies by process 21 VI The role of business strategies in modern business environment .22 1.Description of the formulation process of a strategy .22 4.Identification of corporate mission and objectives 23 1.4 Identification of corporate mission 23 1.5 Identification of strategic objectives 24 5.Analysis of business environment of a firm (external environment) .25 1.6 Impacts of external environment on business strategy 25 1.7 Evaluation of the environmental impacts 29 6.Internal analysis of an enterprise 29 1.8 Analysis of the value chain of an organization 30 1.9 Analyses of financial situation 31 7.Strategy formulation and selection 32 8.Formulation of strategy by level 34 1.10 Business strategy 34 1.11 International business strategy 34 CHAPTER II – BUSINESS DEVELOPMENT STRATEGIC PLANNING FOR Hanoi Urban Investment and Construction JSC 34 I Overview of the Hanoi Urban Investment and Construction Joint Stock Company (UCIC) .34 1.Company profile .34 1.History and development 35 9.Organizational and management structure of the company 36 VII Analysis of corporate strategy and governance 36 1.External environment analysis .36 1.12 Macro environment 36 9.1.1 The economic environment 36 9.1.2.Technological environment 39 9.1.3.Social and cultural environment 39 9.1.4 Political and legal environment 40 9.1.5.Global environment 44 10.Analysis of sector environment 45 1.13 Analysis of the construction sector from the post global financial crisis period to recently (2010) 45 1.14 Architecture management and plan: 47 1.15 Urban and urban infrastructure development 47 1.16 Construction management .48 1.17 Summaries of opportunities and challenges in the construction business environment for UCIC .49 11.Five competitive forces 50 1.18 Threat of current competitors 50 1.19 Threat of new market entrants 51 1.20 Company’s clients 51 1.21 Suppliers 52 1.22 Substitute products 53 12.External Factor Evaluation 53 13.Internal environment analysis 55 13.1.Vision, mission statement, business principles and objectives of Hanoi Urban Investment and Construction Joint Stock Company 55 13.2.Business performance results of the most recent three years 57 1.23 Analysis on some financial criteria 58 1.24 Key product and service analysis .60 1.1.2 Civil construction activities: 60 1.1.3 Industrial construction activities: 61 1.1.4 Infrastructure works 61 1.1.Labor policies 63 13.2.2.Situation of human resource .63 13.2.3.Recruitment, training and human resources attraction 64 13.2.4.Salary, bonus and allowance policy 65 13.3.Technological equipment 66 13.4.Analyses of sustainable comparative advantages 67 13.5.Internal Factor Evaluation 69 14.UCIC’s key business strategies using SWOT matrix 72 CHAPTER III STRATEGIC SOLUTIONS AND RECOMMENDATIONS 77 I Strategic solutions 77 1.Strategic options .77 1.Objectives of the strategy .79 15.Strategic solution implementation 81 4.1 Capital mobilization strategy .81 Given the company’s critical capital need, the 2010 – 2015 capital mobilization roadmap is described below 81 Table 2.17: UCIC’s capital mobilization roadmap 2010 – 2015 81 Roadmap 81 Description .81 Amount (billion VND) .81 Total owner’s equity (billion VND) 81 12/2010 81 Issue convertible bonds 81 - For current shareholders 81 - For strategic shareholders 81 - For staff 81 20 81 10 81 81 81 22.9 81 6-12/2012 81 IPO 81 10 81 32.9 81 5/2013 81 Issue additional shares 81 Diffrences from shares issued .81 Dividend paid in the form of shares 81 10 81 81 81 42.9 81 44.9 81 45.9 81 6/2014 81 Dividend paid and bonus shares 81 1.1 .81 47.9 81 7/2015 81 Issue additional shares (ratio 2:1, estimated price at 15,000 VND/share) 81 44 81 91.9 81 Total 81 91.9 81 First, the company does not face constraints in terms of policy framework, in particular the Decree on private placement of shares which limits share transferring Liquidity of this debt tool is low, potentially fading the company’s attractiveness 82 Second, according to the Securities Law, the company is not eligible for IPO as this requires charter capital of 10 million VND at registration date Issuance of convertible bonds will not be restricted by the Securities Law 82 And last, the company’s interest rate has to be 0% when issuing convertible bonds 82 Accordingly, the company needs to establish a capital mobilization strategy by the end of 2010 by issuing 200,000 convertible bonds at face value of 100,000 VND/share In particular, 60% of bonds are issued for current shareholders, 30% for strategic shareholders and 10% for staff After one year (or longer), these convertible bonds will be converted into shares at the ratio of 1:10 (10 shares per bond) As a result, there will be million shares, equivalent to 20 billion VND in face value 82 In order to materialize this strategy, it is necessary to engage a financial company which provides consultations on issuing convertible bonds Besides, the company has to look for and set up a list of strategic partners to whom these bonds are issued as these partners will be the company’s large shareholders, providing long – term partnership and laying a firm ground for the company’s future development in various aspects 83 As 2012 turns, the company will be eligible for listing in the stock exchange market The company can be ready for an IPO of 10 billion VND and apply for public listing in the Hanoi Stock Exchange This listing will foster the company’s business advantages as well as generate transparency, reputation, and liquidity of its shares, especially ease the company’s capital mobilization 83 According to the roadmap of the following years (i.e 2013, 2014 and 2015) in table…, the company will continue to issue additional shares and pay dividends in the form of shares Total owner’s equity by 2015 is estimated at 91.9 billion VND, excluding price differences and accumulated profits of the previous years 83 With this strategy, the company can basically resolve capital issues, particularly the capital mobilization roadmap However, the company should keep in mind that high consensus is critical so as to avoid any conflicts that may arise during the implementation process It is also essential that partner seeking should be objective and on a mutual – benefit basis, particularly, a strategic partners should have the following criteria: 83 (i) Being Vietnamese or foreigners, domestic or foreign enterprises who have wealthy financial capability .83 (ii) For individuals, it is essential to provide proof of capital source, whether it is legal or not, and if such partner has internal relationship with the company’s major shareholders or management .83 (iii) Enterprises should: .83 Be capable of corporate management This can be proved by annual reports; 84 Have no internal benefit conflict; 84 Be capable of transferring new technology .84 Have products that are favored by the market and enjoy an optimistic consumption trend 84 (i) These partners need to commit long – term relationship with the company This can be made by to – year term shareholding commitments 84 In order to engage one of the above mentioned partners, the company should establish a steering committee specializes in this matter; in particular, the committee is in charged of the followings: 84 Prepare the company’s capability statement and related matters .84 Make announcement on strategic partner seeking 84 Make a list of strategic partners This list can use information collected from ministries and departments’ websites or introduced by these government bodies 84 Facilitate meetings with these partners through various channels, depending on the nature of the relationship and partner’s typical characteristics 84 Officially negotiate with partners 84 Ratify general agreements 84 4.2 Cooperation strategy in the installation and construction activities 84 15.1.1.Shake hands with large industrial construction corporations 85 15.1.2.Form joint venture in infrastructure works 85 15.1.3.Main estimated criteria for 2010 – 2015 .86 16.Research, training and human resource attraction strategies .87 4.3 Research .87 4.4 Training 87 4.5 Human resource attraction 88 17.Marketing Strategy .89 4.6 Marketing intelligence (MI) .89 4.7 Formulation of market dossiers and sales projection 89 4.8 Studies of customers’ behaviors 90 4.9 Market segmentation and location goal .90 4.10 Follow-up steps 90 II RECOMMENDATIONS 91 1.Reform of the administrative structure 91 2.Proper assessment and allocation of resources .92 3.Improvement of the steering information system for the implementation of the strategy 93 3.1 Management information channel: 93 3.2 Feedback channels: 93 4.Strict inspection 94 III Obstacles in the course of the studies and future orientation 94 1.Data 94 2.Research time 95 3.Cooperation with some companies in the sector 95 CONCLUSION 96 I.Books 97 Vietnamese 97 II.Other publications 98 III Websites 98 Appendix 100 I Projects of UCIC 100 II Names and Responsibilities of Group's Members .107 III List of other organizations and individuals, who joined in the research process 108 LIST OF ABBREVIATIONS AS Attractiveness Scores TAS Total Attractiveness Scores CA Comparative Advantage ECA Equally Comparative Advantage CD Comparative Disadvantage IPO Initial Public Offering IFE Internal Factor Evaluation EFE External Factor Evaluation QSPM Quantitative Strategic Planning Matrix MI Marketing intelligence UCIC Hanoi Urban Investment and Construction Joint Stock Company SWOT Strengths, Weakness, Opportunities, Threats GDP Gross Domestic Product VND Vietnam Dong LIST OF FIGURE CHART AND TABLE FIGURE Figure 1.1 – Business strategy formulation procedure 20 Figure 1.2 – Michael Porter's model of five competitive forces 24 Figure 1.3 – Value chain of an organization 27 Figure 1.4 – Internal – External Matrix 67 TABLE Table 2.1 – Analysis of SWOT matrix 29 Table 2.2 – Changes in concentrated growth strategy 29 Table 2.3 – Changes in integrated growth strategy 31 Table 2.4 – Some major indicators in 2010 as against 2009 37 Table 2.5- External Factor Evaluation (EFE) 55 Table 2.6 –Asset and financial statement of three most recent years 58 Table 2.7 – Key financial indicators of the most recent three years 60 Table 2.8– The constructed civil works 63 Table 2.9 –The constructed industrial works 67 Table 2.10– Finished infrastructure works 68 Table 2.11– Assigned weighted score 73 Table 2.12– Comparison between technology equipment of UCIC 74 and four other companies in the sector Table 2.13– Outcome of combination of UCIC’s sustainable criteria 76 Table 2.14- Internal Factor Evaluation matrix 79 Table 2.15– SWOT matrix application for UCIC 80 Table 2.16– QSPM matrix 84 Table 2.17 - UCIC’s capital mobilization roadmap 2010 - 2015 88 Table 2.18–Structure of installation and construction works in 2010- 92 2015: Table 2.19–Main estimated criteria for 2010 - 2015 93 CHART Chart 3.1 –Structure of UCIC’s groups of activities 68 Chart 3.2.–Number of employees by qualification level as at 70 1/2010 10 projects of other companies in the sector, we have been unable to obtain a complete set of internal data for our comprehensive analysis and assessment on each future competitor’s competitive advantages Research time As the research team consists of members and most are managers of various companies, there is time constraint in researching and investigating each model as well as in surveying specialists and other companies in the sector By the end of the research, the team could survey only 20 companies to make comparisons and seek their consultations This number is small compared with the total number of installation and construction companies Cooperation with some companies in the sector The surveyed companies provided responses However, due to time constraint, sensitivity of the information, and their cautiousness against competitors, some companies were reluctant in sharing information and experience, as well as their strategic planning and business plan This is another challenge in collecting and summarizing precise data on the sector’s external environment in general and competitors within the sector in particulars 95 CONCLUSION In an open economy, stability and growth are any companies’ objectives in their development strategies In order for this strategy to come true, companies have constructed business development strategies to empower their strengths and win market share This is a positive and inevitable locomotive However this also reflects a win – lose situation where there are companies who will “stand up” while others will “lie down” Some companies might become stronger and others may fact more challenges of being lagged behind and eliminated from the market Having entered construction market in less than half of a decade, UCIC is considered a late comer and lags behind in terms of both market situation and capability The company’s distribution channel is narrow, owner’s equity is small while the turnover ratio of financial leverage is high All of these have posed certain financial risks on the company Besides, the global financial crisis has significantly weakened the company’s internal forces which have been minimal, pushing the company into dilemma and business activities are hindered With the business strategy model using modern analysis approaches, the growth strategy through external cooperation (joint venture) has partly resolved the company’s difficulties in terms of capital, distribution channel, product and market share in the current context Especially, the company aims at fulfilling the mission of harmonizing basic interests of the owners and the labors – a theory of shared success 96 BIBLIOGRAPHY I Books English Andrew S Grove (Chairman of Intel Corp.), Only the Paranoid Survive: How to Exploit the Crisis Points that Challenge Every Company, Currency Doubleday paperback, 1999 Charles W.L Hill, Gareth R Joines (2002), Strategic Management: An Integrated Approach, 5th, Ed Houghton Mifflin David A Secenzo, Stephen P Robbins (2002), Human Resource Management, 7th John Wiley & Son, Inc Jack W Calhoun (2004) Fundamentals of financial management, 10th Thomson Lawrence R Jauch and William F Gluek(1989)Business Policy and Strategic Management M.E Porter, Competitive Strategy (New York: Free, Press, 1980 Porter,M.E (1981) The contribution of Industrial Organization to Strategic Management New York: Wiley Quinn, J., B (1980) Strategy for change: Logical Inscrementalism Homewood, Illinois, Irwin R Lubit, 2001 “Tacut knowledge and knowledge management: The keys to sustainable competitive advantage”, organizational Dynamics, 29(3):164- 10 11 178 Rap and Tom Collins, Maxi Marketing, New York: Mc Graw-Hill, 1987 Richard Hall,(1992), The Strategic Analysis of Intangible Resources, page 12 135-144, John wiley and Sons William C Finnie, Hands-On Strategy: The Guide to Crafting Your Company’s Future, Second Edition, Grace & Co., 2000 Vietnamese Le The Gioi, Associate Professor, PhD., (2007), Strategic Management, page 166, Statistical Publishing House 97 Đoàn Thị Hồng Vân, (2009), Strategic Management, Page 266-366, Statistical Publishing House II Other publications Annual Report 2007, 2008, 2009 of Hanoi Urban Investment and Construction Joint Stock Company Financial Statement of UCIC 2007, 2008, 2009 and The first of month in 2010 Decree No 52 on issuance of corporate bonds; Decree No 01/2010/NĐ-CP dated 04/01/2010 on private placement of shares Ministry of Construction (2010) Report on the implementation of 2009 plans; direction and key tasks of the construction industry in 2010 Hanoi: Ministry of Construction gateway J.E Barriers to New Competition (Cambridge, Mass: Harvard University Press, 1956) For a review of the modern literature on barriers to entry, see R,J Gilbert, “Mobility barriers and value on Incumbency” in R Schmalensee and R.D Willing, Handbook of Industrial Organization, (Amsterdam,, Holland 1989); Report of the Working Division on Vietnam WTO admission /Part II – Figure of commitments on services, the list of MFNS exemptions as provided for in Article I; Report of General statistics office of Vietnam (2009); Hanoi Urban Investment and Construction Joint Stock Company Board of 10 11 Management (2010) Annual Report 2009 Hanoi; UCIC’s 2009 planning report and 2010 plan; Securities Law of Viet Nam No 70/2006/QH; III Websites http://www.mot.gov.vn/ http://www.mof.gov.vn/portal/page/portal/mof_vn http://www.undergroundconstructionmagazine.com http://www.sciencedirect.com/science http://epress.anu.edu.au 98 10 http://www.moc.gov.vn http://www.ssc.gov.vn/portal/page/portal/ubck http://www.strategy-business.com/ http://www.gso.gov.vn/default_en.aspx http://www.moc.gov.vn 99 APPENDIX I Projects of UCIC Table 2.8 The constructed civil works Value No Time (Unit: Name of project Investor billion Begin Finish dong) Villa lot 15A Nguyen Duc Canh – Hoang Mai – Ha Noi Housing and textiles 3.214 2004 2006 investment and development Ltd Co Build apartment A1, A2 for the site Project clearance of Phu Thuong Ward, Tay 10.947 2004 2006 Ho, Ha Noi Board Villa Lot A1- lot No.2- Nghia Do new 2.675 2004 2006 urban area-Dich Vong Tay Ho trading No.3 Company - Natural resources and environment of land Banquette embanking, downstream feedback repairing of district House Management the voltage, Yen Vien dyke roof (K8 +850- K9 +200) Ta Duong – Project: 0,724 2005 2005 20.177 2005 2007 Restoring dykes regularly in Hanoi 2005 Build Block pattern M2- Project management Resettlement apartment lot No.27 of Board of Nga Nam new Nga Nam new urban area -Cat Bi urban area - Cat Bi 100 Airport - Hai Phong The Vietnam Build the friendship house-105A 1.511 2005 2006 Quan Thanh, Ba Dinh-Ha Noi Union of Friendship Organizations Song Da urban and My Dinh new urban area – Me Tri-Tu 10.107 2005 2006 Liem-Ha Noi industrial zone investment and development JSC Renovate and expand 3.967 2006 2006 Hospital of Traditional Medicine Hospital of Traditional Medicine, Ministry of Public Security Build apartment building No - Doi Nhan - Ba Dinh-Ha Noi 29.689 2006 2007 110.426 2008 2010 Ba Dinh construction investment JSC Project High-rise building at Lot E-Yen Hoa Board new urban area budget 10 Project KPV reinforce the dyke bodies of the left side of Hong river K66 +830- funded Management 1.327 2006 2006 flood prevention in Hanoi 11 1.500 showroom of Board of dykes and K70 +500 Build management and 2006 2006 Quang Do Ltd Co automobile 101 repair workshop Build high-rise apartment, M4A, M4B 12 Nga Nam new urban area-Cat Bi 53.400 2006 2010 Airport- Hai Phong Project management Board of Nga Nam new urban area - Cat Bi Project 13 Building reception and administrative Board 0,742 2006 2006 procedures solution room of Tay Ho management of Tay Ho District Dist Project management Board of Thanh Xuan 14 8.329 2006 2009 53.817 2006 2009 Build Ha Dinh secondary School - District Thanh Xuan, Ha Noi Invest in buidling houses for sale in Me Tri Commune - Tu Liem - Ha Noi 15 - Item: apartment (9 +15) floor CT3A Construction agricultural and rural development Co 16 17 The operator – Hong Ha Stationery JSC Working office for Police of Tu Liem District, Hanoi 1.149 2006 2006 11.170 2006 2009 1.002 2009 2009 Hong Ha Stationery of Tu Liem of Tu Liem JSC Police district The entire construction of the project: 18 Renovate the working house hall, the support works for the old police Headquarter of Tu Liem district Police district 102 The entire construction and equipment installation and trading (including 19 Project Management termites and fire prevention) of the 12.982 2009 2010 Board of Tay Ho project: Building Tay Ho High School district phase Construct the foundation, foundation treatment, the house body, lightning protection, termite prevention, supply 20 and install the fire protection system, water pumps of two blocks of pattern Project 34.827 2009 2010 Management Board of resettlement housing investment and No.01 of M1A and M1B – Viet Hung construction new urban area, Long Bien district, Construction Hanoi Department - Hanoi Build the Tower of project: Construct 21 Commercial Center and products launching at 25 Ly Thuong Kiet, Hoan 116.274 2009 2011 Kiem, Hanoi Hong Ha Stationery JSC Build the houses used for the site 22 clearance and policy subjects of Hanoi at lot OCT1 point X1 of Bac 85.353 2009 2011 Project management Board of funded budget Linh Dam urban expansion area – Hanoi Construction Department Construct the experimental pile of 23 project: Build Commercial Center and products launching at 25 Ly Thuong 0,906 2008 2008 Kiet, Hoan Kiem, Hanoi 24 Renovate and expand Hospital of Traditional Medicine Hong Ha Stationery JSC 1.107 2007 2007 Hospital of Traditional Medicine, Ministry of 103 (The adjustment and supplement of technical design) Public Security Construct the crude body of block A under 25 the project: SKY CITY 120.47 TOWER 2008 2009 HANOTEX Ltd Co 701.81 Total Table 2.9 The constructed industrial works Value No Name of project Time (Unit: Investor billion Begin Finish dong) Build the packaging pen workshop, and the external 5.821 2005 2006 Hong Ha Stationery technical infrastructure Workshop for the production of exported products JSC 2.159 2006 2007 Hong Ha Stationery JSC Sai Leveling the Trang Due 9.495 2007 industrial zone - Hai Phong 2007 Phong Leveling the Trang Due industrial zone - Hai Phong - Hai Industrial zone JSC Sai Gon 2.463 2007 Gon 2007 Phong - Hai Industrial zone JSC 104 Construct the central route (32m) Trang Due industrial 8.153 2007 2007 zone - Hai Phong Sai Gon Phong The office building of Trang 19.451 2007 Kho Dai Thanh producing operation building - Hai Industrial zone JSC 0,945 2007 Hanoi Power 2007 Company Sai Industrial Gon 2007 Phong Due industrial zone Hai zone JSC Sai - Leveling Trang Due industrial 9.036 2007 Gon 2008 Phong zone - Hai Phong - Hai Industrial zone JSC 56.57 Total 8 Table 2.10: Finished infrastructure works Value No Name of works Time (Unit: billion Start Finish 2.282 2006 2006 Project of Upgrading Xuan 17.982 2006 2007 Investor dong) Construct the substation 110kw My Dinh La road, Tay-Ha Noi Hanoi Power Company Project Management 105 Board of Tay Ho district Construct the roads N2 from node A6 to A7 Trang Due industrial zone - Hai 12.794 2008 2009 Phong ) - Que Vo Bac Ninh Industrial 19.725 2008 2009 Zone Kinh Bac urban development JSC Project Construct the new Phong Insdustrial zone JSC Drainage channel ( Sai Gon - Hai Substation 110KV My Dinh 6.436 2008 2009 Management Board of Hanoi grid Construct the items of roads, traffic organization, drainage, trees from pile 35 Project (Km3 +975.72) to pile (Km6 project: +216.68) of Upgrade the 27.969 and expand routes linking the highway to 2010 2010 Management Board of urban transportation Hapro industrial zone (phase 1) Total 87.188 106 II Names and Responsibilities of Group's Members Full name Nguyễn Duy Thắng Implemented work • Delegation of assignment and review general work (Team Leader) • Outline the preliminary draft • Contribute in building the Main estimated criteria for 2010 – 2015 • Check the work contents of the members Provide comments on the detailed draft • Draft Chapter and analyze the external • Lê Anh Tuấn environment • Contribute in collecting financial and accounting documents, and other relevant documents • Lã Quang Minh • Provide suggestions to another writings Write the introduction, synthesize Chapters and to write Chapter and Conclusion, Bùi Quang Đạo • Design the Powerpoint Presentation; • Analyze the financial situation of the • company Directly contact UCIC to agree the contents of writing subject and requesting for provision of relevant materials • Contribute to write contents of macro 107 environment • Collect illustration images • Contribute to analyze Resources and potential competences III • Collect materials of macro environment • Provide comments on the detailed draft List of other organizations and individuals, who joined in the research process No NAME Contents Exposing the orientation for the subject; Academic Council of Griggs University Instructing the volume of the subject, preliminarily offering their suggestion to the detail contents of the draft Evaluation council of Griggs University in Vietnam Hanoi Urban Investment and Construction Joint Stock Company Evaluating the content, method and the group representative’s presentation in front of the Board Suggesting indispensable about issues the of the enterprise and industry Providing the relevant data for the working group Offering the suggestion on 108 strategical solutions Commenting and evaluating the subject and the group’s working process in the company Hanoi Housing Investment and Development Joint Stock Company No 22 Generally commenting on the real situation of the construction industry Hanoi Housing Investment and Development Joint Stock Company Providing some general data of the company No HUD1 Investment and Construction Joint Stock Company Industrial Construction Joint Stock Company 109