Business strategy for greenwood corporationfrom 2012 to 2017

TRƯỜNG ĐẠI HỌC MỞ TP HCM HO CHI MINH CITY OPEN UNIVERSITY Tai Lieu Chat Luong UNIVERSITEÙ LIBRE DE BRUXELLES SOLVAY BRUSSELS SCHOOL MBAVB3 TRINH HUU KIEN BUSINESS STRATEGY FOR GREENWOOD CORPORATION FROM 2012 TO 2017 MASTER PROJECT MASTER IN BUSINESS ADMINISTRATION (PART-TIME) Tutor’s Name: Dr Nguyen Van Ngai Student’s Name: Trinh Huu Kien Ho Chi Minh City (2012) i WARNINGS “The Joint Master Program between Ho Chi Minh City Open University and Solvay Brussels School is not responsible for any arguments, data, or statements contained in this thesis These are only binding upon the author” ii ACKNOWLEDGMENT I would like to express my deep gratitude to many people that have given me support, assistance and guidance to complete this project The undertaking of this project may not be possible without the following people First and foremost, I would like to thank my advisor on this thesis, Dr Nguyen Van Ngai for his valuable guidance and useful advices for the project I am thankful to the top managers and the staff of all the functional departments of Greenwood Corporation for their support during the time of data collection for this study Thanks are also due to The Joint Master Program between Ho Chi Minh City Open University and Solvay Brussels School for providing me opportunity to pursue master degree in this MBA course Finally, on a more personal note, I would like to thank my wife and my parents for their deep love and persistent support iii ABSTRACT Greenwood Corporation is operating in Medium Density Fiberboard (MDF) Industry which has been developing rapidly in recent years due to the strong growth of the wood processing and construction sector Greenwood is now facing fierce competition from existing rivalries and many new entrances So, building a business strategy is Greenwood’s utmost issue This research aims to develop a business strategy for Greenwood in order to compete with many of competitors then to achieve its missions, vision & goals The research starts by reviewing the theories relating to business strategy Then, a framework of the research is designed to follow The study continues with the analysis of the internal and external environment to find out its opportunities, threats, strengths and weaknesses The external analysis consists of macro environment, industry and customer analysis Macro environment factors are analyzed through PEST analysis theory Porter’s Five-force Model is used to carry out industry analysis to indicate the company’s opportunities and threats To make the external analysis more realistic, an individual in-depth interview is firstly conducted to know expert’s ideas about the Five-Forces affecting firms in MDF industry In the internal analysis, the Michael E Porters’ value chain theory is used to analyze company’s value activities to identify its strengths and weaknesses that enable its competitive advantages This helps to locate company’s present competitive positions which define Greenwood's strategic capability To make the research more realistic, a customer survey is conducted to know customer requirements & needs, behaviors and expectations and their perception about Greenwood’s product compared to competitors in the markets It is used to identify Greenwood and competitor’s current position in the market The result of the surveys and information collected from in-depth interview are consolidated into the SWOT analysis to place strategic actions for Greenwood iv Finally, the research goes deeply into developing business strategy for Greenwood First, Greenwood’s missions, vision & goals are reviewed SWOT Analysis & SWOT strategy are used to place strategic actions that fit company’s resource and capabilities to the demand of the market This study focuses on designing a strategic approach for Greenwood Corporation to compete with rivalries and to develop sustainably in the MDF Industry And this business strategy is just the first step to help Greenwood to achieve its missions, vision & goals Any recommendations are highly appreciated and useful for Greenwood to apply the business strategy successfully v PROFESSOR’S COMMENTS I confirm that student Trinh Huu Kien has fully finished the thesis “BUSINESS STRATEGY FOR GREENWOOD CORPORATION FROM 2012 TO 2017” I certify that I have read this project and that, in my opinion, it is fully adequate in scope and quality as a thesis for the degree of Master of Strategic Management Dr Nguyen Van Ngai vi TABLE OF CONTENT Title Page Cover Page i Warnings ii Acknowledgement iii Abstract iv Professor’s comments v Table of Content .vi List of Abbreviations ix List of Figures x List of Tables .xi CHAPTER INTRODUCTION 1.1 Rationale of the study 1.2 Problem statement 1.3 Research Objectives 1.4 Research Methods 1.4.1 Research Framework 1.4.2 Information Need 1.4.3 Data collection method & research tools 1.4.4 Sampling 1.4.5 Data Processing 1.5 Scope and limitations of the study 1.6 Structure of the study CHAPTER LITERATURE REVIEW 2.1 Strategy & Business strategy 2.1.1 Strategy definition 2.1.2 Corporate strategy 2.1.3 Business strategy 2.1.4 Functional strategy 2.2 Competitive advantage 2.2.1 Definition 2.2.2 Generic building blocks of competitive advantage 10 vii 2.3 Strategy formulation process 11 2.3.1 Visions, Missions and goals 12 2.3.2 External analysis 12 2.3.3 Internal analysis 16 2.3.4 Strategy formulation and strategic choice 18 2.3.5 Strategy implementation 20 CHAPTER 22 SITUATION ANALYSIS 22 3.1 Company Introduction 22 3.2 PEST Analysis (External Analysis) 23 3.2.1 Political factor 23 3.2.2 Economic factors 24 3.2.3 Social, cultural factors 26 3.2.4 Technological factors 27 3.3 Industry analysis (External Analysis) 27 3.3.1 Vietnam Wood Processing Sector Overview 27 3.3.2 MDF Industry analysis 29 3.3.2.1 MDF Industry Overview 29 3.3.2.2 Domestic MDF production 31 3.3.2.3 Imported MDF 34 3.3.2.4 Supply/Demand MDF of Vietnam 35 3.3.2.5 Overview of International MDF Market 37 3.3.3 Porter's Five-Forces analysis 38 3.4 Customer analysis (External analysis) 44 3.5 Greenwood’s Value Chain Analysis (Internal analysis) 47 3.5.1 Primary Activities 47 3.5.2 Support Activities 50 CHAPTER 52 DEVELOPING BUSINESS STRATEGIES FOR GREENWOOD 52 4.1 Greenwood's Mission, vision and goals review 52 4.2 SWOT analysis 52 4.3 SWOT strategies 53 4.3.1 SO or BASE strategy 53 4.3.2 WT or SURVIVAL strategy 53 4.3.3 WO or EXPANSION strategy 54 4.3.4 ST or DEFENSIVE strategy 54 4.4 Greenwood’s Strategy Developing 54 4.4.1 Marketing 54 viii 4.4.2 Financial 56 4.4.3 Human Resource 56 4.4.4 Research and Development 56 4.4.5 Production and Quality Management 56 4.4.6 Integration 57 CHAPTER 58 CONCLUSION AND RECOMMENDATION 58 5.1 Conclusions 58 5.2 Recommendations 58 BIBLIOGRAPHY 60 APPENDICES 62 ix LIST OF ABBREVIATIONS MDF: Medium Density Fiberboard BMI: Business Monitor International Ltd BPB: Bargaining Power of Buyer CPI: Consumer Price Index CRM: Customer Relationship Management FDI: Foreign Direct Investment GDP: Gross Domestic Product GSO: General Statistics Office of Vietnam CPV: Communist Party of Vietnam ISO: International Organization for Standardization KPI: Key Performance Indicator PEST analysis: Political, Economic, Social, and Technological analysis SWOT analysis: Strengths, Weaknesses, Opportunities and Threats analysis WTO: World Trade Organization UNCTAD: United Nations Conference on Trade and Development UN: United Nations 61 International Forest Industries: http://www.internationalforestindustries.com Vietnamese academy of forest sciences: http://www.fsiv.org.vn Vietnam General Statistics Office website: http://www.gso.gov.vn Vietnam Agricultural News: http://www.agroviet.gov.vn Vanachai Public Group Report 2010: www.vanachai.com Wood Based Panels International: http://www.wbpionline.com 62 APPENDICES Appendix Questions for In-depth Interviews Appendix Respondent Information of the In-depth Interview Appendix Results of In-depth Interview Appendix Questionnaire Appendix List of Respondent of the Customer survey Appendix Customer Survey Reports 63 Appendix Questions for In-depth Interviews Question 1: How you assess the Threat of new entrants in MDF Industry? - Question 2: How you assess the Threat of substitute services in MDF Industry? - Question 3: How you assess the Bargaining power of buyers in MDF Industry? - Question 4: How you assess the Bargaining power of suppliers in MDF Industry? - Question 5: How you assess the Rivalry among existing competitors in MDF Industry? - Thank you for your cooperation! 64 Appendix Respondent Information of the In-depth Interview No Company name Interviewee Position Hải Tâm Co.ltd Ms Tam Vice Director Tín Việt Co.ltd Ms Thuy Director Satimex Wood Processing Enterprise Mr Dung Production Manager Ba Thanh Co.ltd Mr Loc Director Sai Gon MDF Co.ltd Mr An Director Yen Lam Co.ltd Ms Hai Specialist GỖ HẠNH PHÚC Corporation Mr Ngan Technical Manager LONG BÌNH Co.ltd Mr Tuan Director NGỌC HUỆ Co.ltd Mr Lan Director 10 DANH TÙNG Corporation Ms Trang Purchasing Manager 11 Nam Nghĩa Thành Co.ltd Mr Nam Vice Director 12 Dai Phong Phu Co.tld Mr Toan Director 13 Anh Tý Co.ltd Mr Ty Director 14 Hoan Minh Tai Co.tld Mr Minh Director 15 Hiep Thanh Co.tld Mr Hiep Director 65 Appendix Results of In-depth Interviews Question 1: How you assess the Threat of new entrants in MDF Industry? - Capital Requirement is big; - Switching cost is low Threats of new entrants are high Question 2: How you assess the Threat of substitute services in MDF Industry? Threats of substitute are low There is no suitable substitutable product Question 3: How you assess the Bargaining power of buyers in MDF Industry? There are many buyers and single buyer does not purchase large volume relative to sellers’ sales MDF Product is standard and not much differentiated Brand Identity is low Switching cost is low Bargaining power of buyers is at Medium-High level Question 4: How you assess the Bargaining power of suppliers in MDF Industry? The main suppliers are common chemical and Wood and there are many of these suppliers in the markets Switching cost is low Suppliers have a low-medium bargaining power Question 5: How you assess the Rivalry among existing competitors in MDF Industry? - There are many equally balanced competitors - Wood processing sector and MDF industry growth fast - Low level of Differentiation and low Switching Cost - High Exit Barriers Competition among existing firms is fierce 66 Appendix Questionnaire QUESTIONNAIRE Dear Sir/Madam, Greenwood Corporation is MDF Manufacturer in Vietnam The purpose of this questionnaire is to understand customer requirements & needs for the MDF product To know customer perception about Greenwood MDF product compared to competitors on the markets To know customers’ behaviors and expectations; For the success of the survey, Please answer the questions in this questionnaire (please tick x to one box appropriate to you) Question 1: Are you, in general, satisfied with MDF Supplier in the market? □Yes □No Question 2: Do you compare the Technology and Machinery of MDF Manufacturer when you choose their MDF product? □Yes □No Question 3: Do you consider that the product Price is the most important factor when you choose a MDF supplier? □Yes □No 67 Question 4a: How you assess the Product Quality of MDF Suppliers on the market? □ Excellence (5) □ Good (4) □ Fair (3) □ Normal (2) □ Bad (1) Question 4b: How you assess Quality of Greenwood’s MDF? □ Excellence (5) □ Good (4) □ Fair (3) □ Normal (2) □ Bad (1) Question 5a: How you assess the Customer Services of the MDF Suppliers on the market? □ Excellence (5) □ Good (4) □ Fair (3) □ Normal (2) □ Bad (1) Question 5b: How you assess Greenwood’s Customer Services? □ Excellence (5) □ Good (4) □ Fair (3) □ Normal (2) □ Bad (1) Question 6a: How you assess the Delivery Service of the MDF Suppliers on the market? □ Excellence (5) □ Good (4) □ Fair (3) □ Normal (2) □ Bad (1) Question 6b: How you assess Greenwood’s Delivery Service? □ Excellence (5) □ Good (4) □ Fair (3) □ Normal (2) □ Bad (1) Question 7: You choose the MDF supplier based on (please tick x to box appropriate to you) Factor A-Quality B-Price C-Delivery D-Customer Services E-Band Name Not important Less important Normal Important Very important 68 Question 8: According to you, referring to Quality of MDF product, which factors is the most important? □ Color □ Density □ Surface Thank you for your cooperation! □ Others, please specify: 69 Appendix List of Respondent of the Customer survey No Company name 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 KHUÊ TUẤN GỖ AN VIỆT Frama Group Shangwood Thompson Nhật Minh Công ty Hiểu Đức Anh Thành Đạt Mộc Phát Yên Lâm Tín Việt Hải Tâm Hoàng Minh Tài Hùng Đại Phát Thiên Mộc Mỹ Khang Phú Bình Bình Đức ĐỨC LỢI Cty TNHH FUSHIN FURNITURE Sóng Âm Thanh Tâm Trường Thịnh Cty Satimex Cty Đồ Gỗ Quốc Tế HIẾU LINH Ba Thanh, HSING YUAN VN Công ty TNHH Gỗ Ván Đông Dương Vạn Danh Hoàng uy Thịnh Việt Nam Nghĩa Thành Hoàng Lâm DNTT Vĩnh Lục DNTN Sao Vàng DNTT Đại Phong Phú DANH TÙNG SÀI GÒN MDF GỖ MỸ PRODUCT VINA G7 70 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Đại Hoàng Mỹ Thịnh Việt Gia Hưng Minh Tiến Tản Viên Thành Trang Minh Long Anh Tý Dương Trâm Anh Tấn Á Kim Long Dũng PU Thanh Thùy Hoàng Hà Gỗ Lê Hồng Minh Châu Đồng Tâm Hịa Bình Hiệp Thành Mộc Phát 71 Appendix Customer Survey Reports 72 73 74 75