Business strategy for greenwood corporationfrom 2012 to 2017

TRệễỉNG ẹAẽI HOẽC Mễ TP. HCM UNIVERSITE LIBRE DE BRUXELLES HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL MBAVB3 TRINH HUU KIEN BUSINESS STRATEGY FOR GREENWOOD CORPORATION FROM 2012 TO 2017 MASTER PROJECT MASTER IN BUSINESS ADMINISTRATION (PART-TIME) Tutors Name: Dr. Nguyen Van Ngai Students 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 1 1 INTRODUCTION 1 1.1. Rationale of the study 1 1.2. Problem statement 2 1.3. Research Objectives 2 1.4. Research Methods 2 1.4.1 Research Framework 3 1.4.2 Information Need 5 1.4.3 Data collection method & research tools 5 1.4.4 Sampling 6 1.4.5 Data Processing 6 1.5 Scope and limitations of the study 6 1.6 Structure of the study 6 CHAPTER 2 8 LITERATURE REVIEW 8 2.1 Strategy & Business strategy 8 2.1.1 Strategy definition 8 2.1.2 Corporate strategy 8 2.1.3 Business strategy 9 2.1.4 Functional strategy 9 2.2 Competitive advantage 9 2.2.1 Definition 9 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 3 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 4 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 5 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. [...]... competition strategy for Greenwood is the vital task for the company This strategy will help the company determine the direction and steps in the next five years from 2012 to 2017 for existing and sustainable development This project is to develop business strategies for Greenwood from 2012 to 2017 1.2 Problem statement From 2012 onwards there is a fierce competition among domestic MDF manufacturers to grab... while imports from foreign sources continue to flow in Greenwood has lost many customers to competitors, while the decrease of MDF price influents to the profitability of the company The company is very confused to determine what has to do to compete with the competitors in order to survive and sustainably develop In present, the company does not have a long-term strategy which is needed to orient the company's... company's activities for competition and sustainable development 1.3 Research Objectives The objective of the research is to analyze overall the current market and condition for MDF industry in Viet Nam It is also to analyze Greenwood s business performance in this industry Finally, the research aims to develop a business strategy for Greenwood in order to compete with competitors, and become one of... MDF product compared to competitors in the markets - Customers’ behaviors and expectations; 1.4.3 Data collection method & research tools Secondary data on PEST factors, Wood Processing Sector, MDF Industry, Greenwood s existing competitors & customers is gathered from business and industry journals, internet and other sources via desk research method Information about company’s business and operation... literature review of the topic being considered This will encompass the fundamental ideas on strategy, business strategy, competitive advantage and competitive strategy, strategic management, strategy formulation process including models for external analysis (PEST & Porter’s Five Force Model) and internal analysis (Potter’s Value chain theory), strategy formulation & strategic choice and strategy implementation... business strategy and action are chosen to implement Chapter 5 Conclusion and Recommendation This chapter encompasses the conclusions and practical recommendations on the implementation of the selected business strategy for Greenwood Corporation 8 CHAPTER 2 LITERATURE REVIEW 2.1 Strategy & Business strategy 2.1.1 Strategy definition According to the Traditional Approach there are some definitions of strategy. .. - Differentiation strategy refers to strategy to deliver uniqueness and superior value to buyers in terms of product quality, special feature, or after sales services Unique product enables firms to charge higher price for its product Differentiation is viable for above-average profit - Focus strategy: focus strategy can be cost focus or differentiation focus This strategy focuses to serve only specific... responsiveness is customer respond-time, which is the time require company to bring a product to customer hand 2.3 Strategy formulation process Strategy formulation process refers to the process by which managers choose a set of strategies for an enterprise This process can be broken down into five major steps: (1)- Selection enterprise’s vision, mission and goals; 12 (2)- External environment analysis to identify... such as Law of Foreign Investment, Business Law, Law of Private Business, etc This has formed a quite favorable environment for doing business Vietnamese government has promoted progress in simplifying administrative procedures and laws, to create better conditions for enterprises 24 To be one of the most important export sectors in the coming years, the wood processing for export sector always has... As perspective, strategy referred as strategic intent Any firm can consider three level of strategy: corporate strategy, business or competitive strategy, and functional strategy 2.1.2 Corporate strategy Corporate strategy is primarily about the strategic choice of direction for the company as a whole It raises three key issues facing the corporation: (1) the firm’s overall strategy toward growth, stability . It is also to analyze Greenwood s business performance in this industry. Finally, the research aims to develop a business strategy for Greenwood in order to compete with competitors, and become. 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,. TRINH HUU KIEN BUSINESS STRATEGY FOR GREENWOOD CORPORATION FROM 2012 TO 2017 MASTER PROJECT MASTER IN BUSINESS ADMINISTRATION (PART-TIME) Tutors Name: Dr. Nguyen