Building business strategies in Minh Hieu Construction and Trading Joint Stock Company for period 2013-2017, with vision to 2020

anemone sir pase Soiree ae e ns y creer pee GRIGGS UNIVERSITY GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION CAPSTONE PROGRAM PROJECT BUILDING BUSINESS STRATEGIES IN MINH HIEU CONSTRUCTION AND TRADING JOINT STOCK COMPANY FOR PERIOD 2013 -2017, WITH VISION TO 2020 Intake Gba.M0310, Group 01 Names of Students: 1- Le Duy Hieu | 2- Ngo Xuan Ha .: 22-xscseeqE=©>Spescse pone Nt eS Oa Ts : 3- Nguyen Xuan Huy 4- Chu Thanh Nam HA NOI, JULY 2012 Building Business Strategies in Minh Hieu Construction and Trading Joint Stock Company SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness CERTIFICATION Attention: This is to certify Administration - ETC Management - Peer Review Council that Program Group of 1, Intake Center Development (ETC) - Viet Nam United for Gba.M0310, the Education Master Technology of Business and Career National University and Griggs University - the States is permitted by Minh Hieu Construction and Trading Joint stock Company to use its materials and data as inputs for the thesis titled “Strategic business planning at Minh Hieu Construction and Trading Joint stock Company in the period 2012-2015” [Koni VN, C "GA July 2012 7, coDIRECTOR _ Group M0310 60 Building Business Strategies in Minh Hieu Construction and Trading Joint Stock Company TABLES OF CONTENTS INTRODUCTION Background and the necessity of the Capstone Objectives, Scope and Applicability Methodology CHAPTER | THEORIES OF BUSINESS STRATEGIES DEVELOPMENT 1,1 DEFINITION AND ROLE OF STRATEGIC MANAGEMENT 1.1.1 Definition 1.1.2 The Role of Strategic Management 1.2 STRAREGIC MANAGEMENT AND PLANNING PROCESS 1.2.1 Strategic Management Process 1.2.2 Business Strategy Classification 1.2.2.1 Overall Corporate Strategy 1.2.2.2 Business Unit Strategy 10 1.2.2.3 Divisional or Functional Strategies 10 1.2.3 Overall Environment Analysis using PEST Model 10 1.2.3.1 Economic Factors 1] 1.2.3.2 Cultural and Social Factors 11 1.2.3.3 Political and Legal Factors 12 1.2.3.4 Global Factors iz 1.2.3.5 Technological Factors lệ 1.2.4 Industry Environment Analysis using Michael Porter’s Forces Model 13 1.2.4.1 Buyers 14 1.2.4.2 Suppliers 13 1.2.4.3 Existing Rivals 15 1.2.4.4 Potential Entrants 16 1.2.4.5 Substitute Products and Services 16 1.2.5 Corporate Internal Environment Analysis 16 1.2.5.1 Corporate Culture 16 1.2.5.2 Productive and Trading Capacity L7 1.2.5.3 Finance and Accounting Capacity lý Goup1.MO31I0.0 Building Business Strategies in Minh Hieu Construction and Trading Joint Stock Company 1.2.5.4 Management Capacity 18 1.2.5.5 Information Systems 18 1.2.6 SWOT Matrix 19 1.2.7 Quantitative Strategic Planning Matrix (QSPM) 19 CHAPTER BUSINESS ENVIRONMENT ANALYSIS OF MINH HIEU CONSTRUCTION AND TRADING JOINT STOCK COMPANY S 2.1 OVERVIEW zi OF THE COMPANY 2.1.1 Development History 2] 2.1.2 Business Areas, Tasks and Functions, and Core Competencies 2) 2.1.3 Organizational Structure có 2.1.4 The Company’s Business Performance for 2009 -2011 23 2.2 THE COMPANY BUSINESS ENVIRONMENT ANALYSIS 2.2.1 Macro Environment (PEST) Analysis 24 24 2.2.1.1 Economic Factors 24 2.2.1.2 Political and Legal Factors 26 2.2.1.3 Cultural and Social Factors 28 2.2.1.4 Technological Factors 28 2.2.1.5 Global Factors 30 2.2.2 Industry Environment Analysis using Michael Porter’s Forces Model 33 2.2.2.1 Buyers (Investment Owners) 33 2.2.2.2 Suppliers 34 2.2.2.3 Existing Rivals a3 2.2.2.4 Potential Entrants 36 2.2.2.5 Substitute Products and Services nơ 2.2.3 Matrix of External Factor Evaluation (EFE) 38 2.2.4 Analysis of Internal Factors a9 2.2.4.1 Corporate Culture Ee 2.2.4.2 Available Resources and Productive Capacity 40 2.2.4.3 Accounting and Finance Capacity 42 2.2.4.4 Human Resource Management 43 2.2.4.5 The Company’s Existing IT System 45 2.2.4.6 The Company’s Internal Factor Evaluation (IFE) Matrix 45 Group M0310 Building Business Strategies in Minh Hicu Construction and Trading Joint Stock Company CHAPTER SELECTION OF STRATEGIES AND MEASURES 47 3.1 Strategic Objectives to 2015 47 3.1.1 The Company’s Targeted Strategy 47 3.1.2 Implementation Roadmap 47 3.2 Formulating and Selecting Optimal Strategies 48 3.2.1 SWOT Matrix 48 3.2.2 Selecting an optimal development strategy for Minh Hieu in the period 2012-2015 ° 3.3 Measures io realize selected strategies es fs 3.3.1 Measures on organization and human resource administration ae 3.3.1.1 Organizational Structure a2 3.3.1.2 Human Resource Management 54 3.3.2 Business Management Measures 3.3.2.1 Strengthening Monitoring 54 and Supervision on Works and 54 Service Quality 3.3.2.2 Enhancing Business Management Efficiency a 3.3.2.3 Applying Science and Technology Xã 3.3.3 Financial Measures 30 3.3.4 Strategy Implementation Planned Budget 56 3.4 Implementation Issues and Corrective Actions 56 CONCLUSIONS 58 REFERENCES 59 CERTIFICATION OF MINH HIEU COMPANY 60 APPENDICES 61 a Group M0310 Building Business Strategies in Minh Hieu Construction and Trading Joint Stock Company LIST OF TABLES AND FIGURES Figure | Corporate Strategic Planning Process b2 Figure Michael Porter’s Five Forces Model Figure Minh Hieu Construction and Trading JSC’s Organizational Structure Table Summary of the Company’s Key Financial Indicators for 2009 — Table GDP Growth Rates and Inflation Kates for 2005-2011 Table - List of technological properties currently used in the Company es Table Summary of the Company’s Business Environment Table The Company’s Competitive Profile Matrix (CPM) = Py 2011 Table The Company’s Opportunities and Threats 10 Table The Company’s EFE Matrix 11 Table The Company’s Completed Projects 12 Table The Company’s Invested Equipment and Machinery as of 30/6/2012 13 Table 10 The Company’s Business Operation Growth Rate for 2009-2011 14 Table 11 List of the Company’s key technical staff and executives 15 Table 12 The Company’s Internal Factor Evaluation (IFE) Matrix 16 Table 13 The Company’s SWOT Matrix 17 Table 14 The Company QSPM Matrix Group M0310 Building Business Strategies in Minh Hieu Construction and Trading Joint Stock Company ACKNOWLEDGEMENTS We would Center National like to convey our since thanks to lecturers, tutors and staff of the for Education Technology and Career University as well as the Management Development of Minh (ETC) - Viet Nam Hieu Construction and Trading Joint stock Company for their creating favorable conditions to the study and completion of this graduation thesis Group M0310 Building Business Strategies in Minh Hieu Construction and Trading Joint Stock Company INTRODUCTION Background and the necessity of the Capstone 1.1 National and global context In Viet Nam, since the launch of the State’s open-door policy in 1986, marked by the country’s WTO admission in 2007, the national economy has achieved rapid and of growth substantial country’s pace GDP continuously average 6-8% in 2001-2010 and integration achieved high with and the global sustainable economy growth The rate of the Even during the global early economic recession in 2008, Viet Nam economy sustained its growth rate of 6.5% Since 2009, however, as the global economic picture has been marked with varied patterns such as the record high unemployment rate in the US and the public debt crisis in the Euro zone countries, the country economy was pulled into the world-spread recession The country’s economic growth rate for the first half of 2012 stood at modest 4.38% The imports of input materials for the key commodities in the country’s export turnover such as garment, footware declined sharply in the early 2012, which reveals the difficulty in finding markets for the exports in the coming period Notably, the gloomy picture of local firms’ 2012 performance is spreading throughout the country In each locality, the number of firms in various dissolution, business temporary areas and of different sizes, holdup in operations or facing with difficulties, operations without turnover, operations at a loss, bankruptcy, etc is on dramatic increase Many of these firms are in huge debts and have to downsize their operations with huge inventories while the export markets become common duties, that many which have narrower and their domestic market shares shrunk It is firms commit tax evasion, or cannot afford to pay taxes and cast adverse impact on both the macro and micro socio- economic situation of the country 1.2 The necessity of the Capstone Group M0310 Building Business Strategies in Minh Hieu Construction and Trading Joint Stock Company To overcome such crisis, it is essential that each firm take the correct and appropriate actions in their operations to flexibly adapt to the changing business environment Minh Hieu Construction and Trading Joint Stock Company, a small local private firm is no exception Objective, scope and applicability The Capstone’s objective is to study and “Build business strategies in Minh Hieu Construction and Trading Joint Stock Company for period 2013-2017” to put forth measures and recommendations business to strategies overcome the to the Company immediate to seiect the best-fit obstacles, and maintain its sustainable operations and growth in medium and long terms Methodology - Data: use the Company’s financial figures for period 2008-2011; - Use a methodology mix of analytical, statistical, synthetic, comparative and selective approach Group M0310 Ễ Building Business Strategies in Minh Hieu Construction and Trading Joint Stock Company CHAPTER 1.1 THEORIES OF BUSINESS STRATEGIES DEFINITION AND ROLE OF STRATEGIC DEVELOPMENT MANAGEMENT 1.1.1 Definition Strategic management is a set of management decisions and actions to determine long-term business efficiency of a firm Business strategies steer a firm’s operations, and determine the products or services that it deals in, its business scope, productive resources, profitability and growth prospects 1.1.2 The Role of Strategic Management Business strategies are vital to the existence and operations of a firm They define the goals to be achieved by mobilizing appropriate short and long-term resources They ensure that the business plans not deviate from the set direction Well-designed business strategies will gain a Company more profits, sustainable operations, and make it highly responsive to the external business environment A business strategy is considered a comprehensive and unified plan of a firm that provides long-term development orientation, confirms the firm’s goals, outlines its major resources and suggests measures to tackle the unexpected changes that it may face in the competitive environment Thus, a business strategy is foundation to determine (identify) and unify resources, and concentrate these resources on the corporate goals and utilize the firm’s power to achieve them Competitive strategies enable commercial firms to grasp market opportunities by utilizing their constraint resources and high outcome to achieve their set goals These strategies also assist firms to select the right direction of their operations Business strategies help firms make better use of the available opportunities, reduce their risks and deter those threats associated with their business environment Business strategies get firms better prepared to tackle and control market developments Group M0310 ... study and “Build business strategies in Minh Hieu Construction and Trading Joint Stock Company for period 2013-2017” to put forth measures and recommendations business to strategies overcome the to. .. planning at Minh Hieu Construction and Trading Joint stock Company in the period 2012-2015” [Koni VN, C "GA July 2012 7, coDIRECTOR _ Group M0310 60 Building Business Strategies in Minh Hieu Construction. .. comparative and selective approach Group M0310 Ễ Building Business Strategies in Minh Hieu Construction and Trading Joint Stock Company CHAPTER 1.1 THEORIES OF BUSINESS STRATEGIES DEFINITION AND ROLE