Building business strategies in 2010 - 2015 of LICOGI 16 JSC

Trang 1

G Global Advanced MBA Program (GaMBA)

CAPSTONE PROJECT REPORT

Trang 2

Grice) GeMBA.E03 - Group 5 Capstone Project Report

TABLE OF CONTENTS

Page FORE W GIR sccseusms t.smensemenishcnens tactician ton mn Oona 893083002 55 CeRRERER IONE H9 0I6'3RBG2EG/E9'N l CHAPTER ki THEORETICAL FOUNDATIONS scree cucssmesonsenes om ovs exnosienavos oes od 4

1.1 Conceptions about strategies and strategic business management 4 1.1.1 Conceptions about the Dusiness SÍFQÍCBIGS ee<sseSSSSSSSsSseseeeeesse 4 1.1.2 ConcepfS 0ƒ te síFdf€gIC H-HAĐGHNIGHÍ àà G999 99 111955 3 1.2 Procedures of building strategies « :0.ssorececssorerersnnsesensonsererssasersesvsones 5 1.2.1 Building and selecting the Strategy .csssesvcsseseerserssesssrseserrooseveseusenvasoess 6 1.2.2 Analyzing the operational environment of the enterprise 7 1.2.2.1 Analyzing the MAcCrO CAVIFONMENL 0.0.0 ccc ccc eee t ttt han 7 1.2.1.2 Analyzing the industry CAVIFONMENL cccccceccecc cece eee nteteee 10 1.2.2.3 Analyzing and assessing the internal enIeFDFÌS€ I] 1.2.3 Tools for plan buildihHg qH(l sÍFf€BIC CHỌC€ e<s< sec eese 15 1.2.3.1 IFE - ImernalL Factors FnvironmeHt AnaÌWSlS 15 123.2 BFE - External Factors Environment HH VÂN cac iu tán eaxu lĩ để đuơi (00T CÀ, TVẪN HN vui c«i 62s G0282 xEx 241 seulẫu sac nhơlã3?ĐgfaŠ ải SÚ8 dua Sề kRđ TẤN Ơng Chea L? {.2304 '(UDWRPGITHGETE ĐPGIIIG, TH (ni bobnhie cơng phơng tưỞ ng warm ae warmed wn aww ondass 18 1.23.5 Quantitative SALE GIO PIGMHIRS INQIIIK « cssiasiscces xin cos vis oxi ore noes nà nai 18 CHAPTER 2: ANALYSING THE ACTUAL SITUATION OF LICOGI 16 JSC 19 2.1 Actual situation of Vietnam’s COnstructiOn cccecssescsssreesssreeseses 19 2.1.1 General overview 0oƒ` Viet 'S COHSÍFHCÍÏOHH e<< 555cc << =ssseee+ 19

PT NN(L naẽaẮeeee< ố an 19

2.1.1.2 In industrial production and construction malerials 20 đuuếy ly (VI HRLSEICHÍ DfĂNBIHÏN sacaasucsndisdáx Gia 8Ehsebg6i8n0005580551566i1088065860ã81S88.635888848 20 2.1.2.1 The total value oƒ production and ĐW$iH€SS ằà 2 ccSc: 20 chủ uuuên (GHI DYNHGĂÍDÏđ tuong wit wien 8 ae neasitedin vom oun xe-xeodB6 lao vế NỘI cạn BE 380148 BI Xa 20 2.1.2.3 ManuƒacIuring industries and construction materiqÌs a 2.1.3 Orientations to develop the COHSfFHCÍÏOH So 22 2.2 Status of Licogi 16 Jọint Stock CompAany «s55 ee 22 2.2.1 Process of formafioH qHd €V€ÏODHICHI c5 S091 9 8 a2

Ừủá i

Trang 3

Gricos) GeMBA.E03 - Group 5 Capstone Project Report

DAE, BEFIPC COPIA OTE oo se i tase ore 5 vers cha HẠ Sh UR Ba oe we act Ws om 22 De dB: AAPUEP COU AIZOION wae ies ec ss wc sm van wa Wes ck ae Ee wu ens enw 2 me wR tế 24 2.2.2 Function and main duties of the COMPANY cscecsesseersscececcesessneneeeeeens 25 2.2.3 Organizational structure 0ƒ HH€ COHIQH' e s55 S955 26 2.2.4 The confrol oƒ LICOGI 16 ƒor the HHÌ€FÍl@S c5 s55 << s*+ss + 28 LedeS, BUSINESS FESULIS 1 2008 Geeinssmsenoedimeestersdrndrrreassrsrenrnnskrvirnssrstsseve 29 2.2.6 Consolidate the brands into one braHdl ""Licogi TỐ ””, ««e«-«<<sss<+ 31 2.3 Production and business characteristics of the COMPANY cceseeereeees 32 2.3.1 Characteristics of the market, the company's Product .ssseseeeeeeeees 32 2.3.1.1 Characteristies 0ƒ eonstrucHon pFOdlHCÍS «à cà cŸ Sa 32 2.3.3.2 About company's market executed in the pas{ IỈMG - 33 2.3.2 Business reSHIfS Oƒ [H1€ COHIDQHJ c9 1119919855111 34 2.3.3 Character of human resource Of the COMPANY rssscccceccessserereccseesseees 35 2.3.4 Production and Business Plan of Licogi 16 in the period 2010-2015 36 2,J Large Of the Compatiy (0 201 Dessssicnacescismemsisemnes sce cnunmmnawnann 37 2300s LÊ: DFDJGCIS RƠ 2Š thuaanagseinyanbigivioiaaiiGG449XiXSSKESSSSEVGGSHES46E0688/705860/158 38 2.4 The building business policy plan assignMent .ssecccssseseersseeseeeeseees 40

2.4.1 Plan building process at Licogi 6 JoIHI Sf0Ck COHDQHJ -«<- =‹ 40

2.4.1.1 Base on result of researching market demand 40

LA1S2 Base on current sources Of Le COMPANY 0 wx cer wnewra vse vas Ghế ng roretreieds 4]

2.4.1.3 Base on situation of implementation plan in previous years 41 2.4.1.4 Situation of building and implementing business strategy

Trang 4

Griccd GeMBA.E03 - Group 5 Capstone Project Report

24,36 Aetivilies Gf Research aid Developments vs sà nà tà tà tàng vê oes ma vanernvee 50 2.4.3.7 The capacity of technical sciences - equipment 50 2.4.3.8 ManagemeHnt 0ƒ ÌHDUI ÍQCÍOFS: à à cv 1S SE khéo 51 2.3 E.valHdte CaDADHIV 0T LÁCUBT TẾ seeeeeeeeveeeensddeenrraaseesseseeasessrssnssisas 51 dcdule THE GCHICVEH FEST Sis cesncennnsscevivsstnesnerccenraureneensaneunsece sxanernveneoannnsannnonses 51 2.5.2 SHOFÍCOHHIHS Go nọ nọ nọ Tu gọn gu TT n0 00 94 52 2.5 3 TÍH€ SÍPCHĐ(ÏHS- on Họ TY gu TT T08 6 vế 53 ee hE CO TRIES eee nce screenees ennmcesnnnenen unre ites ip reieenssener censor romenmnnreenne 54 2.6 Selecf business stratèy by matrix metho( c3 11s rree 55 2.6.1 Develop EFE matrix (assessment of external environmental factors) 55 2.6.2 Establishing [FE Matrix (Evaluating Internal Environmental

FACIOPS) sciscccusnussnussaxsanaacrsansintsnmesnnansann as nannies hoon EN TNT CAN NNNNNSN reeNenEsERRCEN® 56 2.6.3 Establishing the comjpetIfiVe pFOfÏÏ€ HI(IEFLX c5 7c 5s eee 58 216.38 SWOT Mair ite conrscvaxscsiancsnessitnixessstaeaeesserivssnmraisornanssenennneanesieesrsnannies 60 xi hiển (NI TT, LMẾ RE T sexoussxaesssasteuaiovlleiosssbsugsiloebxsusiebsblioeeobkiiaesyeoufellugganeestrsEielpfussovvn 62 2.0.5 (SØÏ@CfIOH Oƒ SÍFQf€ĐÏCS o0 0 t0018 0 0 67 CHAPTER 3: BUILDING BUSINESS STRATEGIES IN 2010-2015

E TL IHG II | vài nan dưant basmaniesrrboloinar bài hš bemmtld8 ni smesassbesgiruitlesertrnpuengtusfiaom bỈs gugqm ng 48 70 3.1 General Oren ta tiOis cisscssinisisesssasasccssnossassuksteysnssavsennsnnessdiooueveesiveesiedotenevas 70 3.3.1 The strategy Of LiCOBL 16 JSC sssisiasevissssevavnivsneticnnenenastevseuenstoeievarenssensns 72 3.1.2 Investment and market expansion strategy Of Licogi ÏỐ - 73 3.1.2.1 For construction, the core line oƒthe COMPQHWV - 73 3.1.2.2 For the trade of materials and eqHÌDIH€HHS: à.à cà Sài 74 3.2 Establish a vision-mission for LicOgi 16 .: csscessssceesrscessescesseseeseeeees 74

3.2.1 Establish a mission - vision, identify common goals and objectives 74

Trang 5

3.3.1.4 Commumications qnd PẨ S1 hheo te 3.3.1.5 Marketing strategy implementation supervision and adjusment 78 3.3.1.6 Market SOlUtions ccccccccccc cece eee eeecveteeeeeeeeeesuttsteteeeeseniees 78 3.3.2 SOLULIONS f0 OD€FdfÏOHS HIHAĐGHICHÍ con n9 33 se ee &0 3.3.2.1 Input expenses F€dHC[ÏOH àĂ Ăn Tnhh HH ven 80

3.3.2.2 Well-implementation oƒ biddÌÏng cành kệ 80

3.3.2.3 Strengthening the management of changes during the stratey

TMPLOMENIALION o.oo cccccccce ccc eve c vce tee t eet e cece eeeeeeeeeeeeeeeeeeeteeeeeeeeennetenttntee 82 Ÿ.Ÿ.ÿ HHHIAH F€SOHFC€S SỌHÍÏOHS 30 n0 9 1n ng 03 sự 82 3.3.3.1 TrQIning WOPK ccc e eee tte e eee eeeeeeeeeeeeeeeeeeeeeeenney 83

nẲeeem B5 ố 85

3.3.3.3 The SAIAIV nan 86 < 8 PO HC HE SGĂHĂTHỆ san «an in LáLAENAxuSàN GHSENGG495881618).69085254538818185016003818886066058 88 3:4 SOME FECOMMENADALONS se sang nỶa012118185656651561345568108853ã6403654w6565885846 89 3.4.1 FOF MACPOCCONONIE POLICIES vi siusiscnasaciixacssussnassandstnvvawenpaessavexsssevasioserieve 89 3.4.2 For business and production OD€F(fÏOHS co G5555 ve 89 NCL SIONS maaegeisaeiunork lịe mưnpgSlfeotgsarlkc6hð vùiblspilagesert Senfi ans Gestunsiampann ton cngnenanniercentcoen 90

_— iv

Trang 6

LIST OF ABBREVIATIONS

ASEAN: The Association of Southeast Asian Nations EFE: External Factor Evaluation

EVN: Electricity of Viet Nam FDI: Foreign Direct Investment GDP: Gross Domestic Product IFE: Internal Factor Evaluation

LICOGI 16: Licogi 16 Joint Stock Company ODA: Official Development Assistance MOC: Ministry of Construction

MPI: Ministry of Planning and Investment PVN: Petro Viet Nam

QSPM: Quantitative Strategic Planning Matrix

R&D: Research and Development

Song Da 9: Song Da Construction Joint Stock Company No 9

SWOT: Strengths, Weakeness, Opportunities and Threats

Trang 7

Griccs) GeMBA.E03 - Group 5 Capstone Project Report

DIAGRAM

Diagram 1.2 Procedure of building the strategy for the enterprIse - 6 Digram 2.1 Management mechanism structure of Licogl l6 : -: 26 Diagram 2.2 Organizational Structure of LIcogl Ì6 ị cà sec 28

TABLES

Table 2.1 Revenue — profit of the Company before capitalization 23 Table 2.2 ChanelinE Caprtal PrOG6S6._ ncn: wn crennversanemnemanid ie wns ani 86 4844380836 108 00 KĨNM 24 Table 2.3 Capital structure on 17/2/2009 (denomination 10.000 VND/share) 25

Table 2.4 Productivity and Revenue of the LICOGI 1ĩ system 30

Table 2.5 Result of business activity in three years 2006, 2007, 2008 34

Table 2.6, Méehanist 0 t6 GOHIYWÍẨV ; ¿ca sạc nhung Ha n00813/2003 46L 1N Si T3 1G gã 388/01380 188 ÿ 35

Table 2.7 Tarpel øfti£ndøvéf ad iTl6rest.tO 2Q Loa s cos ng enà bạ gu Bà sả dỗ Cũ nang ni DSã: 37

Table 2,8 EFE Matrix gÍ LICOGT lổ Joibt Stock Company’ ccccsas esi ses css cass cxsxeoes ead 55 Table 2.9 IFE Matrix of LICOGI 16 Joint Stock Company c7 Table 2.10 Competitive profile matrix of LICOOI l6 ằ sành 29

Table 2.11 SWOTT Matrix oF LICOGT Ï6 2 nh Hành Hee 60

Trang 8

ACKNOWLEDGEMENTS

We would like to express our sincere thanks to lecturers in the Global Master of Business Administration Program - Vietnam National University-Hanoi and Griggs University and International Academy - the United States, who have taught and

instructed valuable knowledge with the whole heart during the course

We would like also to deeply thank lecturers in the graduation thesis jury for

offering practical comments for this thesis

Our high appreciation to leaders and officials of LICOGI 16 Joint Stock Company

and classmates for supporting us information and practical comments during the

Trang 9

CAPSTONE PROJECT REPORT SUBJECT: STRATEGIC MANAGEMENT

Tittle: BUSINESS STRATEGIES IN 2010 -2015 OF LICOGI 16 JSC

FOREWORD

Modern business environment has been daily changing To date, Vietnam has been

considered as one of the fastest growing economies, not only in Asia, but in the

world as well Since the 1986 economic opening policy start, Vietnam has undergone nearly 30 years of striving toward a real market economy An important landmark in the integration process of Vietnam in the global economy is the event when the nation was admitted to World Trade Organization (WTO) Such a lot of changes have been achieved and are expected to be implemented in 2010-2015 period Under the general assessments of Ministry of Planning and Investment

(MPI), Vietnam’s socio-economic conditions and situations in six first months of

2009 have been under the positive changes with the GDP growth rate of 3.9% Value of industrial production is estimated to be about VND342.2 trillion (16.5%), higher than that of the same year with 4.8% increase Some localities such as Quang

Ninh, Ba Ria-Vung Tau have high industrial growth rates of 11.5% and 10.6%

respectively

Agricultural, forestry and fishery industries have overcome difficulties to reach good results with the estimated value of VND96.6 trillion in first six months, a year-on-year 2.5% increase

Despite a mount of economic difficulties, decreased consumption demands, the

combined retail value and turnover from services in June have still gained the

growth rate of 2.3% (to VND94 trillion) from that of May, raising the total flow of goods and social services in first six month up to VND547 trillion, a 20% increase compared with the same period

—= ]

Trang 10

Volume of export in first six months of 2009 is estimated to be up to USD$27.6 billion, a 10.1% decrease from the same period However, according to Ministry of

Industry and Trade, if calculated by the quantity (volume of exporting crude oil and

minerals is decreased) and absolute value due to the exclusion of sudden increases

in oil price of the year 2008, the export turnover of first six months of 2009 is still increased from the same period of the year 2008

For import, import value in June of 2009 is estimated to be USD$5.9 billion, a 4.1% increase from that of May 2009 Combined import value of first six months is USD$29.7 billion, a fall of 34% from the same period of the previous year

However, June also is the third consecutive month when Vietnam restarted the

overbalance of import after three first months of export surplus MPI forecast only for June in import excess can be up to USD$ 1 billion and combined for six moths up to more than USD$2 billion

State collection computed under the progressive calculation since the early year till first half of the year is estimated to be about VND171 trillion, accounting for 49.3% of the general estimate of the year This is evaluated to the good turnover level Necessity of building strategies, objectives and applications

a Proposal

In 2008 and first half of 2009, we have witnessed the global economic crisis in which many large-scaled and world leading groups have fallen into the bankcrupcy, etc However, experts forcecast that the economic recovery will start in the year 2010

Afterwards, the 2010-2015 period may be the time for the economic growth and Vietnam is

also in this general circulation of the global economy Starting to kick of a business strategy for 2010-2015 period right now is the top necessity that the Company leaders shall be aware to promote the company to develop together with the market economy

Being aware of the importance of working out business strategies for five coming years, executive officials of Licogi 16 Joint Stock Company should propose development orientations, operational principles for the company

GF Global Advanced Master of Business Administration

Trang 11

We, as consultants of planning strategies, do hope to propose orientations, operational solutions and business strategies for the 2010-2015 period for Licogi 16 Joint Stock Company

b Objectives of the research project

The project is designed to define strategies and business development for the 2010-

2015 period Then, Licogi 16 can properly operate to expand its scale, reduce the

business expenses, effectively use capital, bringing the profits for the enterprise as well as increasing the competitive edges

In this paper, we also propose some solutions that Licogi 16 can implement its strategies and business strategies in the 2010-2015 period

c Case study methods

In order to carry out this project, we have applied methods of statistics, survey and

analysis

d Scope of study

This report shall focus on considering the current strategies of Licogi 16 Joint Stock Company, available achievements and shortcomings Moreover, it also studies strategic planning and business development of Licogi 16 in 2010-2015

e Structure of the report

Our report consists of the three chapters: Chapter 1: Theoretical foundations

Chapter 2: Analyzing the status quo of LICOGI 16 Joint Stock Company

Trang 12

GRIGGS UNIVERSITY GeMBA.E03 - Group 5 Capstone Project Report

CHAPTER 1

THEORETICAL FOUNDATIONS

1.1 Conceptions about strategies and strategic business management 1.1.1 Conceptions about the business strategies

The scholar Dao Duy Anh said in the Vietnamese Dicitionary: Strategy is plans set out to win in one or multiple battlefields

From 1960s of the previous century, strategies were applied to business and the term “business strategy” was born With different time and approach, there are various business strategies:

In 1962, Chandler defined the strategy: is seen as the determination of the basic long-term goals and objectives of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals and objectives

In 1980, Quinn issued a more general definition "the pattern or plan that integrates an organization's goals, policies and action sequences into a cohesive whole A well-formulated strategy helps to marshal and allocate an organization's resources into a unique and viable posture based on its relative internal competencies and shortcomings, anticipated changes in the environment and conligent moves by intelligent opponents"

Johson and Scholes defined the strategy under the environment with rapid changces: "Strategy is the direction and scope of an organization over the long term: ideally which matches its resources to its changing environment"

In spite of any approach, the nature of approaches is still to illustrate the future enterprise image in the operational field and capacity of exploitation Accordingly, the term “business strategy” is used with three major meanings:

- 4

Trang 13

- To determine the long-term objectives and goals of the enterprise - To work out general action plans

- To select action plans, allocating resources to implement such objecticves It can be said that the construction and implementation of real strategies have become the top tasks and an important functional content of the business management and widely applied in the enterprises The current popular viewpoints are that “Competitive strategy is the art of combining activities and controlling them in order to reach the long-term objectives of the enterprise”

1.1.2 Concepts of the strategic management

Garry D.Smit said that “Strategic management is the process of studying current environments as well as environments in the future, planning goals and objectives of the organization; setting out and inspecting the implementation of decisions to achieve objectives in the current and future environments "

1.2 Procedures of building strategies

In order to buil up strategies for the organization with high feasibility, it is required to determine competitive advantages, strengths, weaknesses of the enterprise, in

which the competitive edge is the core factor for analyzing and building the

strategy Competitive advantages may be capacity in the strategic vision of enterprise leaders, leadership competence, financial capacity, personnel, researches and development of products, production technology and lines, network of sales, relationships with partners and compatibility with the changing environment, etc

Process of establishing the strategy shall be implemented by the following steps:

Trang 14

GRIGGS UNIVERSITY GeMBA.E03 - Group 5 Capstone Project Report Diagram 1.2 Procedure of building the strategy for the enterprise Mission vision Extemal - Determining objectives Here Environment Environment

Analysis - Building the strategy Analysis

~ Opportunities - Selecting the strategy — - Strengths

- Threats - Weaknesses

When building the business strategy, depending on the business situation, enterprises can flexibly implement steps of establishing the business strategies The organization can determine goals and objectives before analyzing the environment and setting out strategic objectives and goals Depending on viewpoints, it 1s possible to apply various strategies,

1.2.1 Building and selecting the strategy

Objectives of building and selecting strategies are to establish long-term goals and alternative strategies and select some of them for pursuit Building and selecting the strategy aim at setting out a string of actions which can help the enterprise to reach its mission as well as goals and objectives Based on the current strategic foundations of the enterprise, goals, objectives and misisons shall be combined with evaluation internal and external environments to have support strategies

The enterprise cannot respectively select every alternative strategy because it will cost a lot of time and not be effective Therefore, it is necessary to select a set of strategies considered as the optimal ones for development and we should consider and assess favorable conditions, disadvantages, costs and benefits which can come from this strategy; at the same time, it is imperative to master methods and ways of application, especially the use of models to select appropriate business models for

Trang 15

its business and production operations such as analyzing strategies on the SWOT

matrix, SPQM, etc

Strategic management is divided into three major phases of planning, implementing and assessing the strategy

The focus of this paper shall be on the first phase: Planning the strategies for the enterprise and we will deeply analyze this process, including the analysis of business environment, external environment such as macro environment, branch environment, internal factors of management, personnel, marketing, finance- accounting, production and operation, research and development (R&D), information system, etc

1.2.2 Analyzing the operational environment of the enterprise

Analyzing the business environment is the process where strategists inspect,

consider various environmental factors such as socio-economic, cultural,

technological factors, suppliers, distributors, etc, then seek for opportunities and detect challenges

1.2.2.1 Analyzing the macro environment

1) Economic environment

The economic environment points out nature and orientation of the economy in which the enterprise operates Effects of the economy on an organization can change the capacity of creating values and incomes Four important factors in the

macroeconomic environment are the economic growth rate, interest rate, foreign

exchange rate and inflation rate

Economic growth rate can lead to the increase in the customer spending And thus, companies shall have chances to expand activities and get higher profits On contrary, the economic downturn shall result in the fall in spending and thus, it shall

increase the competitive pressure

——— 7

Trang 16

Interest rate can affect the demand for products of the Interest rate is an important

factor when the customer must borrow to support his purchase operations for these

categories of products

Foreign exchange rate defines the value of currency among nations The shift of the foreign exchange rate has direct effects over the competitiveness of organizations in the global market

Inflation can reduce the sustainability of the economy; the economy will slowly grow; interest rate is higher and shifts in the foreign exchange rate shall not be

stable When the inflation is increased, we will face difficulties in exactly

forecasting real values of projects in the five years Therefore, working out investment plans shall become risky, unstable and consequently, organizations shall invest in contendation or not dare to invest and then economic activities shall be reduced and finally, the economy shall be pushed into the stagnant status It is the threat for the company

2) Technological environment

Nowaways, the scientific and technological development has undergone a strong development This is a factor with great and direct effects on the business of fields and industries as well as many enterprises Therefore, analyzing and predicting technological changces are extremely important Technological changes have affected the life cycle of products and services They can impact the height of barriers when accessing and re-shaping the branch structure to the grassroot

3) Socio-economic environment

During the process of implementing the medium and long term strategies, this is the factor with the most changes Lifestyles which have automatically changed in the directions of accepting new lifestyles are always opportunities for many producers Enterprises must also pay close attention to attitude of the consumers, changes in the age tower, role of women at the workplace and in family, geographical distribution, community of ethnic groups and distribution of income The higher

— 8

Trang 17

people’s cultural standard is, the greater the diversity becomes for the

manufacturers

4) Natural environment

Clever strategists are often concerned about the climatic and _ ecological

environment Threats due to the unpredictable changes of climate should be

considered and paid attention by enterprises producing and supplying seasonal goods and services

5) Governmental, legal and political environment

Governmental, legal and politcal factors have impacts over the enterprise according different directions They can create chances, obstacles, even risks for an enterprise because the Government is the largest consumer in the economy Political stability, consistence in policies are always attractive to investors Complete lawful and legal system is the solid foundation for a stable business Decisions about the issue of advertising shall be threats for some enterprises (for the case of cigarette manufacturers, alcohol producers, etc) Decisions about taxes and other fees can create opportunities or obstacles to the enterprise Labor law, regulations about

recruitment, appointment, allowance, retirement, unemployment are issues that the

enterprise should pay close attention to

6) Global environment

Trang 18

GRIGGS GeMBA.E03 - Group 5 Capstone Project Report

Participation in the World Trade Organization shall help Vietnam to expand the export market, enjoy the most favored nation status and discrimination in the international trade However, threats from global competition shall be stronger 1.2.1.2 Analyzing the industry environment

Industry is a group of companies supplying similar or the same goods or alternative products Ananlyzing the industry environment shall help strategists to define chances and challenges for their organizations According to Michael Porter, there are five competitive forces including threat of entry, bargaining power of suppliers, bargaining power of buyers, availability of substitutes and competitive rivalry 1) Analyzing current competitors

Threat pressure from competitors are frequent and direct to the existence and

development of the enterprise Factors effecting the competitive level among current competitors in the industry are competitive structure, number of competitors, competitive scale, growth rate in the industry, fixed costs, storage

costs, differentiation in products and variable expenses, barriers to accession into

and exit out of the industry 2) Analyzing the potential rivals

Potential rivals can be factors reducing the profit of an organization when it operates and exploit new production capacity with the hope of taking over the market share and necessary resources In order to prevent the penetration of new entry rivals, an enterprise should maintain legal barriers to prevent outsiders

3) Analyzing suppliers

Suppliers include suppliers of materials, fuel, capital, labor, etc Suppliers can be considered as threat pressure when they can raise price of oil or reduce quality of goods or services The enterprise can change its strategies toward the suppliers by using the power of buyers in a proper manner

a 10

Trang 19

4) Analyzing customers

Customers are integral part of the enterprise Confidence from customers is the most valuable asset of an organization Another important issue related to buyers is the bargaining power They can make the profit reduced by laying pressure on the price, requiring the sellers to improve quality of products, services, supply of more goods and can cause rivals to face each other However, we can change their power by applying the market segment

5) Analyzing substitutes

Substitutes are other products which can satisfy demands of the consumers Its basic

features are often superior to others in special characteristics This threat forces the

enterprise to regularly monitor advances in technology and science directly related to improvements in technology and product Moreover, the change in the market demand is also the important factor causing this change

6) Competitive strategies in the industry

Enterprises in the same industry often have different markets, distribution channels,

product quality, technology, price and advertising programs However, some enterprises in the same industry have been pursuing similar or the same strategies Meanwhile, some others pursue and implement the same basic strategy These enterprises with the same strategy shall form the strategic groups in the same industry

1.2.2.3 Analyzing and assessing the internal enterprise 1) Evaluating the management operations

Management consists of basic functions: planning, organizing the implementation, encouragement, arrangement of personnel and control

Function of planning includes all management activities related to the preparation for the future such as predicting, establishing targets, setting out strategies, developing policies and building the business schedules

Trang 20

Function of organizing the implementation consists of alll management activities in which results are the set of tasks and close relations in duties Special models area to design the business models, centralizing tasks, describing tasks, distance in control, consistence in making decisions, cooperation, designing and separating tasks

Function of encouraging is the encouragement implied in the efforts directly targeting on shaping behaviors of people Main subjects will be: leadership capacity, information exchange, teamwork, changes in behaviors, empowering, raising knowledgement about the tasks, satisfaction of demands, changes in organization, spirit of laborers and spirit of the director

Function of arranging personnel is activities of arranging work forces centralized into personal management or human resources management Issues under the same consideration are management of wages and salaries, rights of laborers, interview,

recruitment, dismiss, training, development of management and labor safety;

activities assuring the justice in recruitment, relations with trade unions, development of employment future, personal studies, regulations on principles and

social relations

Function of controling mentions management operations toward assuring practical

results gained in accordance with the targetted plan Major fields in this task are to

control quality, manage finance, sales, assets, expenditure, to analyze variables and

commendations

2) Analyzing the marketing activities

In order to analyze and assess marketing operation in an organization, we will focus On issues such as analyzing customers, sales and purchase, plan on products and services, issue of pricing, distribution; marketing research; to analyze opportunities

and social accountability Based on the current analysis, we must consider whether

the persons in charge of this task demonstrates a market outlook in the future or not, with trends in consumption as well as future markets, supply markets, new trends in consumption and what trend shall dominate, trends in the psychology of the

_ 12

Trang 21

consumers and other impacts of the environment in addition to considering scientific foundations and ways of illustration

3) Status quo of finance and accounting

First of all, we will evaluate the good implementation of tasks of the finance-

accounting department During the past time, do staffs have any act due to personal benefits, impacting the general benefits of the enterprise? If employees are dishonest and we fail to illustrate issues arisen from this operation, it shall affect the existence of the enterprise due to the sensitive native of this task

How about the support for finance and accounting operations? Accuracy of targets shall have great impacts over the process of making decisions and objectives in strategic management If, at this part, financial information is wrongly demonstrated, the enterprise can change from the positive earnings to heavy loss On what basis do financial norms are built and on what method of analysis? In the system of norms, it is necessary to carefully review whether norms have mistake or not Firstly, it is the factor of liquidity During the past time, is the factor of liquidity

reduced or increased? Have financing and accounting operations pointed out such

issues? The liquidity factor demonstrates the capacity of converting financial resources into strong amounts, which can be used for the direct payment If the

financial operations fail to compute this issue, fail to propose timely warnings to the

enterprise, they can lead the company to the state of failure in payment, an extremely risky state The second norm which should be considered is the debt leverage The question is that has the debt leverage of the company been increased for the past time or not?

- Assurance of financial safety for the organization

- Level of satisfying the requirements for financing and accounting

- Causes and factors having effects on financing and accounting What

changes are needed?

- How about the strengths and weaknesses in the financing and accounting?

ss 13

Trang 22

4) Production and operations

Production and operations include all activities aimed at converting input into goods and services The production process consists of two functions: designing the production system (designing production process, selecting technologies, planning the output, selecting the location, arranging the premise, etc) and operating the production system (comprehensive planning, inventory, demands for fuel, materials, production schedule, etc)

5) Analyzing Research and Development (R&D)

Research and Development not only helps the enterprise to enhance the current foot-hold, but also to reach to higher posts in the future Research and development is aimed at developing new products before the rivals, improving the product quality, well-monitoring price or improving the production process to reduce price The research can be carried out in the internal or outsourced Quality of research efforts and development of enterprises can help the enterprises maintain leading position or lag behind in comparison with leading industry competitors

Qualifications, experience and science do not have enough bases for good research

and development Hence, the environmental conditions, information related to technology, products and materials should be regularly inspected

6) Information system

Information links all business functions together and provides the basis for administration decisions The information system improves the quality of administration decisions The information system is an important source of strategic because it receives the raw data from both environments inside and external the organization, tracks the changes of the environment, recognize the threat of competition, support the implementation, evaluation and control strategies In addition, the effective information systems allow the enterprises with special ability

in areas such as low-cost, customer satisfaction service, etc

— 14

Trang 23

Griccs) GeMBA.E03 - Group 5 Capstone Project Report

The information system includes: management information system (provides the internal information of company) and strategy information systems (provides external information: competition, customers, suppliers, | macroscopic environment )

1.2.3 Tools for plan building and strategic choice

Important techniques to the formation and selection of feasible strategies for the enterprises include three phases: The phase of exploring the environment inside and external the enterprise, the phase of analyzing the strengths and weaknesses of the enterprise and the phase of deciding the strategy selection for business

1.2.3.1, IFE - Internal Factors Environment Analysis

Matrix of Internal Factors Environment (IFE) summarizes and evaluates the important strengths and weaknesses of the functional business departments IFE matrix was developed in five steps:

- Step 1: Making the list of critical success factors as identified in the internal evaluation process This list includes from 10 to 20 elements, including the strengths and weaknesses

- Step 2: Classifying the importance from 0.0 (not important) to 1.0 (very important) for each factor The classification shows the relative importance

of the factors for the success of company in the field Total levels of

importance must be 1.0

- Step 3: Classifying from 1 to 4 for each element, including: the first

represents the greatest weakness, the second is the smallest weakness, the

third is the smallest strength, the forth is the greatest strength Thus, the classification based on the company

- Step 4: Multiplying the importance of each factor with its’ classification (step 2 multiply step 3) to determine the points of importance

- Step 5: Totalizing the score of the importance for each factor to determine the total important score to the organization

— 15

Trang 24

Griccd) GeMBA.E03 - Group 5 Capstone Project Report

Whether how many factors in the inside elements matrix there are , the total highest importance score that a company can achieve is 4.0, the lowest is 1.0 and average is 2.5 Total score greater than 2.5 indicates the company's internal strengths, smaller 2.5 indicates the company's internal weaknesses

1.2.3.2 EFE - External Factors Environment Analysis

Matrix of External Factors Environment helps us summarize and quantify the effects of environmental factors to the enterprise The development of an EFE matrix consists of 5 steps:

- Step 1: Making the list of factors with determinants for success as identified in the process of evaluating the macro environment This list includes from

10 to 20 factors, including the opportunities and threats affecting the company and business

- Step 2: Classifying the importance from 0.0 (not important) to 1.0 (very important) for each factor The classification shows the relative importance of those factors for success in the business of the company Appropriate level

of classification can be determined by comparing between the successful

companies with the unsuccessful ones in the field or discussing and reach the agreement of strategies building team Total classification levels must be 1.0

Thus, the classification based on the field

- Step 3: Classifying from 1 to 4 for each critical factor of success to show how the current strategy of the company response to these factors Where: 4

is a good response, 3 is above average, 2 is medium and 1 is weak These

levels are based on strategies effective of the company

- Step 4: Multiplying the importance of each variable with its classification level (equal to step 2 multiplied with step 3) to determine the score of importance

- Step 5: Totalizing the scores of the importance of each variable to determine the total score of importance

ee 16

Trang 25

Wheather how many factors in the matrix there are, total highest importance scores that the company can get is 4,0, lowest is 1,0, average is 2,5 Score of 4.0 Total importance score is 4,0 that indicates the company strategy of well taking outsode oportunities and minimize negative the external nagative impacts on the company

1.2.3.3 SWOT Matrix

SWOT is an abbreviation of four words: Strengths, Weaknesses, Opportunities, and Threats

SWOT matrix is a matrix allows us to evaluate the strengths and weaknesses of the

company and estimate the opportunities, risks of external business environment and thence coordinate the company ability with the environment

SWOT matrix can help us develop four types of strategies:

The strategies of strengths - opportunities (S-O): Use the internal strengths to take advantage of the external opportunities

- The strategies of weaknesses - opportunities (W-O): Improve internal weaknesses to take external opportunities

- The strategies of strengths - threats (S-T): Use strengths to avoid or reduce

the external threats

The strategies of weaknesses - threats (W-T): Improve the internal weaknesses to avoid or reduce the impact of external threats

The following is a SWOT matrix model: Opportunities (O) Threats (T) S+O + Strengths (S) sự

Use the strengths to take the | Use the strengths to limit or opportunities avoid the threats

W+O W + T

Explore the opportunities to | Overcome the weaknesses ro Weaknesses (W) fill the weaknesses limit the threats

Overcome the weaknesses to

take the opportunities

Trang 26

1.2.3.4 Competition profile matrix

Competition profile matrix identifies the major competitors with their advantages and disadvantages This matrix includes both internal and external factors with the determinant importance to the success of the enterprise In addition, in the competition image matrix, the competitors are also considered and score the importance Total evaluated score of the competitive company is compared to the researching company The comparison gives us more important strategy information Building the image matrix is the same as building external elements 1.2.3.3 Quantitative strategic planning matrix

QSPM Matrix aims to evaluate and rank the strategy plans, thenceforward we have

basis of selection of the best strategies This matrix uses the information invested in

all introduced matrices (IFE, EFE, competition image, SWOT, major strategy, etc) To develop a QSPM matrix we should:

- Step 1: Listing the external important opportunities / threats and the internal strengths / weaknesses of the company Matrix should include at least 10 external important success factors and at least 10 internal important success factors

- Step 2: Classifying each of the internal and external success factor

- Step 3: Listing strategy plans which the company should consider to implement Collecting the strategies into specific groups if possible

- Step 4: Determining the attractive score (AS) of each strategy Only strategies within the same group will be compared with each other The

attractive score are classified as follows: 1 - not attractive, 2 — little attractive, 3 - attractive, 4 - very attractive If the successful elements do not

affect the strategies choice, the attractive score are not graded for the

strategies in this strategy group

———— 18

Trang 27

Grice) GeMBA.E03 - Group 5 Capstone Project Report

CHAPTER 2

ANALYSING THE ACTUAL SITUATION OF LICOGI 16 JSC

2.1 Actual situation of Vietnam’s construction 2.1.1 General overview of Vietnant's construction

Construction of our country started its integration process with the region and the world since the early 90th century of the last decades The integration of technology is done pretty quickly; the technical standards system of materials, design and construction has been innovated and added gradually in accordance with international common standards The measurement, survey and design works used various modern equipments, most clearly expressed the advancement in the construction of bridges, hydroelectric plants and thermal power, transmission line, cement plants, oil and gas rigs and high buildings Institutional integration has focused on the application of international practices for managing ODA and FDI projects and projects of all other economic sectors in accordance with the market mechanism In people integration, the whole construction industry has made great efforts in training and complementing the human resources with 1.9 million workers who have the

capacity to control technology and implement new institutions After 20 years of

innovation and integration, due to the positive solutions and conditions for economic development, our country has maintained a high GDP growth, the production value of all construction - industry achieves the average growth speed of 16%

This growth of development is demonstrated in the business production value in the

first eight months of 2009 reached about 74,840 billion VND, equal to 63.3% over

the year plan, to 109.5% over the same period in 2008 Where:

2.1.1.1 In Construction

Construction value of the units of Ministry of Construction (MOC) in first 8 months of 2009 reached about 33,596 billion VND, equal to 63.9% over the year plan and to 111.2% over the same period in 2008

_—— — 19

Trang 28

In the field of erection, despite many capital difficulties, the increase of some materials price and the slow payment in some works but the construction units took initiative in improving the efficiency of construction equipment, speed up the implementation process of priority constructions and the construction as an investor as Dung Quat, Nhon Trach | ., especially the Son La hydropower construction

completed on schedule over 1.3 million m3 of roll compaction concrete, creates

conditions for generating set of machinery | at the end of 2010, completed the handover of Tuyen Quang Hydropower, Pleikrong Hydropower, generators in quarter 1, etc Some construction units who have the erection productivity in August

2009 increased over the same period in 2008 includes: Song Da Corporation

reached 6803 billion VND, increased by 23%; No 01 Construction Corporation a

reached 2.619 billion, increased by 30,4%; Housing and Urban investment and development company reached 1.193 billion, increased by 54% , etc

2.1.1.2 In industrial production and construction materials

Industrial production and building materials value of the units under the Ministry of

Construction (including Vietnam Cement Industry Corporation) in the first eight

months of 2009 reached about 24,850 billion VND, equaled to 61.7% over the year

plan, by 108.6% over the same period in 2008 2.1.2 Statistical parameters

2.1.2.1 The total value of production and business

Value of business production estimated to reach 11,095 billion in August, May 8, 2009 to reach about 74,840 billion VND, equaling 63.3% over the year plan, by

109.5% over the same period in 2008

2.1.2.2 Construction

Value of construction and installation of the units under the Ministry of

Construction estimated to reach 5710 billion in August, May 8, 2009 to reach about

Trang 29

In the field of construction and installation despite many difficulties in capital, a material cost increase and the principal payment in some works but slow units were active capacity building equipment, files high speed up the implementation of key works and works made by the unit owner

2.1.2.3 Manufacturing industries and construction materials

The value of industrial production and construction materials of the units under the

Ministry of Construction estimated to reach 3254 billion in August, May 8, 2009 to reach about 24,850 billion VND, equaling 61.7% over the year plan, by 108.6% over the same period in 2008

Cement production is estimated the whole industry in August reached 3.75 million

tons, May 8, 2009 to reach about 29.140 million tons, with 66.2% of the annual

plan

Conclusion

However, standing before the whole of the process of international economic integration, the construction industry is facing new challenges, first as capital Of

state-owned enterprises construction is very low Bad debts in the construction

lasted reduce the competitiveness of capital, technology and technology compared to foreign companies; The competition is overwhelmed by international contractors have the experience, level, superior technology; Thirdly real estate market time has expressed them, many investment projects have difficulty in compensation and clearance has been slow, affecting progress and effectiveness of projects, thereby making the production and business activities and accumulation of investment by enterprises degradation of other investment projects have affected the market prices of domestic and international sliding price increases were large bidding packages, increasing the total investment to adjust to the project and procedures for construction investment was long; A number of enterprises producing construction materials have increased more production costs due to input costs such as gas, petroleum import prices of clinker inflated their prices and the products, affecting

21

Trang 30

the competitiveness on the domestic market soon Moreover, quality, product design building materials is limited compared to imported products Some solutions to promote the development of Vietnam's construction sector will be policy makers, researchers and enterprises together made through discussion and analysis of issues such as Review integration process of the construction industry our country;

Construction Industry Vietnam with WTO accession; Functions and economic

management in the construction of the economic integration international e- commerce transactions - new direction Vietnam to build the integration process; opportunities and challenges for Vietnam's construction business while participating in the World Trade Organization; potential and orientation solutions for the development of industry building materials and sectors

2.1.3 Orientations to develop the construction

Right now, the construction businesses need to renovate management mechanism,

apply new management models to improve quality and efficiency of their production business; priority invest in human resource, equipment, advanced technology; seriously improve the quality of products Simultaneously, renovate the research works; organize the exploitation and expansion the market, etc

Government should facilitate for enterprises to access land and premises of

production simplify loans and mortgages procedures; support enterprises in research

and development stage to help them improve competitiveness; train and develop the

technical working team, research to innovate the content, etc Hence, Vietnam

construction can develop and integrate powerfully to the world economy 2.2 Status of Licogi 16 Joint Stock Company

2.2.1 Process of formation and development 2.2.1.1 Before capitalization

Licogi 16 Joint Stock Company previously known as No 16Construction Company which is a state enterprise belongs to the Construction and_ Infrastructure

=——— 22

Trang 31

Development Corporation (Licogi) established by Decision No 427/QD-BXD on 08/3/2001 Ministry of Construction based on the branch reorganization of the Construction and Infrastructure Development Corporation in Ho Chi Minh

Right after establishment, the company has focused on attracting, building technicians, skilled workers; investing modern machinery and equipment to improve capacity and affirm its position in the market The beginning of establishment, with little initial capital of 1.9 VND billion, the company was only assigned to undertake the small-scale works as a subcontractor, but the company confirmed the brand and created a big resonance through the quality of the completed and handover works Only in a short time, the company is believed and assigned by the investor as the primary contractor in executing several constructions that have great value and require high technology progress such as: Di An water pumping station, Viglacera float glass plant, Cotto brick factory (Binh Duong), Sasco office building, Phu Tho Stadium, Saigon marine industry and shipyards (District 7), Tan Tao tunnel (Binh Chanh district), etc In addition, 16 Licogi also

undertakes national stature construction such as A Vuong, Ban Chat, Dong Nai 3,

Ba Ha hydropower, etc, in which Licogi 16 plays the number one role, be responsible for important items of the Ban Chat hydroelectric with the concrete dam

RCC 1.6 million m’, etc

Table 2.1 Revenue - profit of the Company before capitalization

Trang 32

GRIGGS UNIVERSITY GeMBA.E03 - Group 5 Capstone Project Report 2.2.1.2 After capitalization

In implementing the State’s policy on the conversion of State enterprises into joint-

stock companies, in 2005 the company carried out capitalization and in 2006 the

No 16 Construction Company converted to the Licogi 16 Joint-Stock Company by the Decision No 327/QD-BXD on February 28, 2006 and Decision No 844 / QD- BXD on May 31, 2006 the Ministry of Construction The company officially received the certificate of business registration issued by Ho Chi Minh Planning and

Investment Department on June 02, 2006, with capital of 12 VND billion

Full trading name in Vietnamese: CONG TY CO PHAN LICOGI 16

Foreign trading name: LICOGI 16 JOINT STOCK COMPANY

Short name: LICOGI 16

Trading head office of the Company: 49B Phan Dang Luu, Ward 7, Phu Nhuan Dist Ho Chi Minh

Tel: (84.8) 38 411 375 - (84.8)2445477; Fax: (84.8) 38 411 376 Email: info@licogil6.com Website: www.licogil6.com

General: Mr Le Van Nga

Capital: 136,000,000,000 VND (One hundred thirty six VND billion)

Process of changing the capital and capital structure on 30/7/2008:

Table 2.2 Changing capital process Time Capital Added value Methods (VND) (VND) 30/12/2006 12,000,000,000 13,000,000,000 Offer in public 30/06/2007 56,500,000,000 31,500,000,000

Sell to the employees, strategic shareholders, separately to the big

investors by the Resolution on 07/02/2007

Offer in public by the offer

Trang 33

GR GeMBA.E03 - Group 5 Capstone Project Report Table 2.3 Capital structure on 17/2/2009 (denomination 10.000 VND/share)

No Organization, individual name Quantity of Quantity of Gravity Shareholder holding shares (%)

A State shareholder 1 1,584,000 11.65

B Shareholder in Company 82 1,887,851 13.88 l Shareholder in administration board 06 875,785 6.44

2 General Director Board 01 10,000 0.073 3 Controller board 01 11,167 0.082 4 Chief Accountant 01 3,848 0.028 5 Treasury stock 01 216,500 1.59 6 Employees 72 770,551 5.66 C Shareholder outside of Company 242 10,128,149 74.47 1 Domestic shareholder 215 6,196,108 45.56 Individual 200 2,829,314 20.80 Organization 15 3,366,794 24.76 2 Foreign shareholder 27 3,932,041 28.91 Individual 16 512,347 3.77 Organization 11 3,419,694 25.14 Total (A+B+C) 325 13,600,000 100

Target: annual report in 2008

2.2.2 Function and main duties of the company

The company implements economic accounting in financial independence and autonomy has the legal entity in opening account in the state bank; use its own seal in accordance with official state regulations

Major business scopes:

Building constructions of civil, industry, transportation, irrigation,

hydropower, airport, port, transmission line and transformer station; constructions of water drainage and supply, environment sanitation and

works foundation

Producing, trading materials, equipments, spare parts and other building materials, concrete pipes, commercial concrete

Processing, manufacturing construction mechanic products; the formwork,

Trang 34

- Trading, demising engineering equipments; consulting investment

- Servicing repair and installation of machinery, equipment, mechanical products and shaped structures

- Investing and trading houses, new urban areas, technical infrastructure of industrial zones, the small and medium hydropower projects Trading machinery and construction materials

- Testing construction materials, mining out stones, mining out stones using industrial explosives

- Training vocation and educating professional intermediate, training college, educating secondary school

2.2.3 Organizational structure of the company

Current organizational structure of the company management mechanism illustrated

by the following diagram:

Digram 2.1 Management mechanism structure of Licogi 16 GENERAL ASSEBLYSHAREHOLDERS r 4 1 Control Board re TÊN vn ng vong Administration Board 4 General Director | _ Bì

Chief Accountant Deputy General Directors

Organization Economy Finance

Administration Department Account

Department Department

+ x:

Member companies; Construction Executive

Underlying branches; Board; Project Management

Trang 35

Functions and responsibilities of each department: 2.2.3.1 General meeting of shareholders

General Assembly of shareholders is the highest authority agency of the Licogi 16 Corporation General Assembly of shareholders is responsible for ratifying Administration Board's report on the business operation; deciding the plans, the business production and investment responsibilities; conducting ratified discussion, supplement, amendment of the Company’s Regulations; ratifying the development strategies; electing and removing of Administration Board, Control Board; and deciding the Organization Mechanism of the Company and other tasks in accordance with the regulations

2.2.3.2 Board of Directors

Board of Directors is the highest organization of the Company managed by the General Assembly of shareholders Administration Board is on behalf of the company to decide all issues related to the Company’s purposes and benefits

2.2.3.3 Inspection Board

Inspection Board is an organization to supervise, check reasonability, legal in the

business management, in the recorded accounting books and company’s finance in order to ensure the legitimate interests of the shareholders

2.2.3.4 Executive Board:

Executive Board of the Company includes one General Director and four Deputy General Directors The General Director appointed by the Administration Board, is main and only responsible for all business operations of the company in front of the Administration Board

2.2.3.5 Professional Departments

Trang 36

Economy Department: is responsible for planning the production and business, implementing marketing works, promoting the business plan; establishing quality management system of the company; monitoring, maintaining and improving the service quality management system: monitoring and supervising the quality of construction works invested by the Company and other bidding works; planning the tender documents and exploiting works for the whole Company

Finance — Account Department: is responsible for organizing accounting, finance management mechanism of the company; planning records, accounting and reporting the accounting data

The Member companies, Underlying branches; Representative offices, Project Management Board have different functions and responsibilities depending on the scale, features of the work and business scopes

2.2.4 The control of LICOGI 16 for the underlies

Diagram 2.2 Organizational Structure of Licogi 16 Licogi 16 Joint Stock

Company

Ư` Ỷ v Ỷ | | Ỷ Ỷ Ỷ Ỷ

Licogi 16 | Licogi Licogi Licogi Licogi Nghi Son Dien |Licogi 16.8| Licogi Lai doint doint doint doint doint and Building, |Investment| Joint |Branch Stock Stock Stock Stock Stock |Development! Trading, |Joint Stock} Stock

Company | Company | Company | Company |Company} Joint Stock |Servicing} Company |Company Company | LtdCo

Where:

Trang 37

- Licogi 16.1 Joint Stock Company is a subsidiary; Licogi 16 Joint Stock Company holds 40% of capital

- Licogi 16.2 Mechanic Joint Stock Company is a subsidiary; Licogi 16 Joint Stock Company holds 40% of capital

- Licogi 16.5 Mechanic Joint Stock Company is a subsidiary; Licogi 16 Joint

Stock Company holds 49% of capital

- Licogi 16.6 Mechanic Joint Stock Company is a subsidiary; Licogi 16 Joint Stock Company holds 40% of capital

- Nghi Son Infrastructure Investment & Development is a subsidiary; Licogi 16 Joint Stock Company holds 45% of capital

- Dien Phuoc Building-Trading-Servicing Limited Company is_ subsidiary; Licogi 16 Joint Stock Company holds 95% of capital

- Licogi Investment Consult Joint Stock Company is a subsidiary; Licogi 16 Joint Stock Company holds 40% of capital

- LICOGI 16.9 Consult Joint Stock Company is a subsidiary; Licogi 16 Joint Stock Company holds 47.22% of capital

2.2.5 Business results in 2008 Business results in 2008

The implementation of the major plan targets:

Trang 38

GRIGG: UNIVERSITY

GeMBA.E03 - Group 5 Capstone Project Report

(Because 2008 is the 2™ year that the company operates as a joint stock company,

it’s free from corporate income tax Summiting corporate income tax is the income

tax from transferring of land use rights in 2008)

- Rate of profit after tax / capital of VND 136 billion is 98.07%

Quote of the funds under the provisions:

+ Business Development: 10% Profit after tax

+ Provision for financing: 10% Profit after tax

+ Commendation welfare: 10% Profit after tax

- The expected rate of dividend in 2008 is 25% in cash and 50% in stock In 2008, the Administration Board asked for shareholders' comments through adjusting the plans of the revenue target and private profit of the LICOGI 16 Joint Stock Company: revenue value decreased from 830 billion VND to 600 billion VND, the profit value increased from 100 billion VND to 120 billion VND

Table 2.4 Productivity and Revenue of the LICOGI 16 system

II | Subsidiaries Million VND 466.954 326.090 | 29.926

1 | CP Licogi 16.1 Joint Stock Million VND 121.800 98.822 5.000 Company

2 | Licogi 16.2 Joint Stock Company Million VND 80.000 59.000 6.000 3 | Licogi 16.5 Joint Stock Company Million VND 30.359 18.971 6.500 4 | Licogi 16.6 Joint Stock Company Million VND 74.750 54.222 6.250 5 | Licogi 16.8 Joint Stock Company Million VND 7.000 6.590 829 6 | Licogi 16.9 Joint Stock Company Million VND - 5.900 - 7 | Licogi 16 Mechanic Joint Stock Million VND 123.000 82.285 5.347

Company

8 | Nghi Son Infrastructure Million VND 16.469 300 _

Investment & Development

9 | Dien Phuoc Building-Trading- Million VND

a we 13.576 - -

Servicing Limited Company

Trang 39

Profit result in 2008 of only LICOGI 16 Joint stock company is over the plan to 11.1% compared with the adjusted plan, if compare with profit plan of 100 billion at the beginning of year, the made profit is over 33, 37%

For member units and subsidiaries of LICOGI 16, most of the company has the revenue target and profit reach and exceed the planned targets; however some companies do not complete the plan and the revenue target Although, the profit target of the subsidiaries is still guaranteed for dividend in 2008 from 14 to 20% of capital

2.2.6 Consolidate the brands into one brand "Licogi 16"

Not only brings the cost reducing ability - including the costs of research and development - but also the consolidation of brands in the Licogi JSC help the subsidiaries in transferring advantages to each other, for example, object, class or customers’ support In the long term, focusing on creatively combining the advantages of the parties through the consolidate strategy between the brands can generate extremely large value for the companies and consumers as well, ete Particularly, they become more useful when the environment is increasingly requiring its members and companies in cost saving

In terms of opportunities, a product of the subsidiary can be accepted by customers if the customers know that product from such a reputation company as Licogi 16 Hence, if the consolidation between the brands can create extremely large value for the subsidiaries and their consumers, the potential brought by this initiative in combining the strengths of each party is also not small In the current economic environment, with the requirements in cost saving, the consolidation become important tools that can help the companies create additional value to their own brand Not only brings the cost reducing ability - including the costs of research and

development — but also the consolidation of brands help both brands in transferring

Trang 40

it can quickly improve most significant marketing from the creation of initial recognition to the building of loyalty

Therefore, in order to make the best choice decisions, the company needs to find down four main forms of brand name consolidation Each form will vary depending on the level of creating value for customers, length of negative balance expectations and most importantly the risks that the company may suffer These risks include lost investment, brand asset shrinking and part of value lost due to lack of focusing Coordinate the brands through advertising/sponsorship At the most basic level, the subsidiaries joint in activities to link their images with the special events in the consumers’ mind

2.3 Production and business characteristics of the company 2.3.1, Characteristics of the market, the company's products 2.3.1.1 Characteristics of construction products

- Products of the construction mainly that are constructions (constructions union, constructions categories) are combination of many products from the

produce industries They are used in regulated places and often distributed

over many parts of the territory Therefore, in strategy planning, combined strategies should be analyzed to choice

- Building products highly depend on natural conditions, with many individual characteristics, using a variety of ways of structuring and building methods Due to this characteristic, in planning strategies, the company should plan the

time, special characteristics of each construction, each locality — where the

constructions are Sometimes, the constructions are not completed by the plan due to sudden unexpected weather, hence, finding out the weather in planning year is very important, it greatly influences on the work of strategic planning - Building products usually have large size, complex structure, difficulties in manufacture and repair, high quality requirements, high production cost and long using time

G Global Advanced Master of Business Admunistration

Định dạng
Số trang	99
Dung lượng	57,4 MB