Business development strategies of H.A.I Agrochem Joint Stock Company from 2013-2017 and its vision to the year 2022

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GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM

CAPSTONE PROJECT REPORT

BUSINESS DEVELOPMENT STRATEGIES OF H.A.f AGROCHEM JOINT STOCK COMPANY

FROM 2013 TO 2017

AND ITS VISION TO THE YEAR 2022

CLASS: GaMBAO01.C0510 Members of Group No 7:

l Lé Thi Thanh Loan

Z Vu Thi Thu Huong

3 Nguyễn Thị Mai Phượng

4 Tran Cao Dinh Tuyên

Ho Chi Minh Citv_ 2012

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CỘNG HÒA XÃ HỌI CHỦ NGHĨA VIỆT NAM

TP.HCM, ngày I2 thang 8 năm 2012

DON XIN XAC NHAN

(w⁄w: Được phép sử dụng các số liệu của Công ty Cổ phân Nong duoc H.A.1) Kính gửi: Ban Giám Đốc Công ty Cô phần Nông dược H.A.I

Tôi tên : Lê Thị Thanh Loan

Hiện đang công tác tại Trường Trung cấp Đông Dương Là đại điện cho nhóm gồm các thành viên dưới đây:

k¿ Lê Thị Thanh Loan

2 Vũ Thị Thu Hường

x Nguyễn Thị Mai Phượng

4 Trần Cao Đình Tun

Nhóm chúng tôi hiện đang theo học Khóa Đào tạo Thạc sĩ Quản trị Kinh doanh Quốc tế của trường Đại học Andrews_ Griggs (Hoa Kỳ), lớp GaMBA 01.C0510 Hiện tại

chúng tơi đang trong q trình làm bài tập lớn đề tốt nghiệp khóa học

Đề tài tốt nghiệp của nhóm chúng tôi là: “Chiến lược kinh doanh giai đoạn

2013-2017 và tầm nhìn đến năm 2022 của Công ty Cỗ phan Nong Dược H.A.I.” Trong

Thay mặt nhóm, tơi làm đơn này kính mong Ban Giám đốc Công ty Cô phần Nông dược H.A.I cho phép chúng tôi được sử dụng các số liệu của Công ty để hồn thành đề tài Kính mong được sự chấp thuận của Quý Công ty

Thay mặt nhóm, tơi xin gửi lời cảm ơn sâu sắc nhât đên Ban Giám đôc Công ty

Trân trọng kính chào,

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Griccd STRATEGIC MANAGEMENT Class GAMBAOL C0510 Group No 7

Acknowledgement

First and foremost we would like to express our sincere gratitude to our professors and advisors for continuous support to our study and research, and for the invaluable academic guidance and enthusiastic encouragement throughout our capstone project report

Our special thanks also go to the Board of Directors of HAI Company for offering us the opportunity to work on such exciting project

We would like to thank our parents our sisters and brothers for their endiess support throughout our lives

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Griccd STRATEGIC MANAGEMENT Class GaMBAO1 C0510 Group No 7

TABLE OF CONTENTS

LAST OF ABBREY 14 TON enone manners inti saidierpeererennerenenemEmEsTR I

LIST OF TABLES wsssccussge nr eemern ener erereeconeRNEEENE 2

LAST UF FIGURES nraorneaendterrseerrererrnnrritidrnsvorotpAg810011896806890036930855566039emsnvevessse 3 PREC Á Cả eeedveenndoptnrnrirttitrgii0IG01360680<cervErseeagvprsrvigneinirnr9VA1916)0180001300080003301000010860003.6ecsisrens 4

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3 Qb/ective and scope 0ƒ the r€S€@FCH SG TS vn HH key 2

4 Tools and Methods Jor t1iS PESCGPCM: oo cccuscocicanesnsasnsiaisninen maenneerencrreerrenvencceets 6

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CHAPTER 1: GENERAL THEORY OF STRATEGIC MANAGEMENT 7

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!.2 Levels and theoretical models oƒ SIFqf€gÌC H„4HqĐ€IN€HI - Š

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Lai TU HỮNG LHIE } PYÊT GITH ÏSNWT ceieeeeeeeniesiirseereRrrOTEDHEEROSENGEEESETRGHIGHESS 10 1.2.2.1 Cost leadership stfategy: — II

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Griccd) STRATEGIC MANAGEMENT Class GAMBAO1 C0510 Group No 7

1.2.3 Functional level strategy maaan wees

1.2.3.1 Marketing Strategy: a "“-.°ˆ)

1.2.3.2 Manufacturing Operation Strategy KH Xe 98404 5556:8095 n0 Lab

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1.4 Tools and method for StFdI€BIC ĐỈA4H 55523 S323 S33 14

1.4.1 Analysis of external environment ác nh uye 14

1.4.1.1 Factor Qƒ HACFO Ê@HVIPOHI€HÍ .àQ SS SH He 14

š *€ [ó TUêClosd NITENY[TGHHNGHỈ e«eeneaurnrrdudtrirtrdtrassnaeoeereen 14

L42 Analysis Of interfial environment 0 00 cccnsrneronces ena cence memes 15

14.3 Toöls for strafegøl€ ĐBlännifiB:;s‹s- eeeseesrierrernddirrvrsrniioosassri Lf

1.4.3.1 External Factor Evaluation Mfatrix (EFIE) 18

1.4.3.2 The competitive profile matrix (CPM) sò s22 sss3 18

1.4.3.3 The Internal Factor EvaluaHon Miatrix (IFE) 18

TAIN, TAS I nnn pm ER EES ERROR AE 18

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Griccs) STRATEGIC MANAGEMENT 21 to to t2 to to VO to 5

Class G€AMBAOI] C0510 Group No 7

Introduction Of HAL COMPANY: cccccccccececcccccessvsesseessssenssseseescsecuaceesensneseseesees ae 1.1 Formation and development process 2l 1 IntroducHon of HAI CöIiDäHV e caersaaoi.iieiierrsrrxssrmre 21 1Ð : : 5 ÔỎ Pe

1.4 Company’s organizational Structure: 00 00c ccc cecte eee eceeeeteeeeseeeees 26

Business Qperation oƒ H.A.I Company in the Ìqst 3 VeđFS: 28 Business Environment /1ssessMeHt Qƒ Hu{l C`OH<DANV 25555355253 34 34.l External Environment Assessment: 34

2.3.Ll Macro EHVIYOHIH€HÍ: QQ TS HS x12 1112 x6 34

2.3.1.2 External Factor EvaluaHon Mlatrix (EFE MÍqtri): 4I

eM ES, | 42

2.3.1.4 The Competitive Projfile Matrix (CPM) .- - 52s 50

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2.3.2.6 Internal information system qCtiVI[i€S: c2 ve 6]

2.3.2.7 Internal Factor FYyaluaHon ÀÍqtFIX: 62 2.3.2.8 Identifv weakness and shortcomings in the business strategies of

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Grice) STRATEGIC MANAGEMENT Class GaMBAO1 C0510 Group No 7

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2.3.2.10 Main risks of pesticide business industry: ce 64

CHAPTER 3: BUSINESS STRATEGY OF HLA COMPANY FROM 2013 TO 2017 AND ITS VISIONS TS THE VEAR TH ssisttcceecervnemnnreresmnneenon 66

3.1 Mission and Strategy ObfeCHVES: .ccccccccceccc cece cccetetseeeceeseecesessesseteeesnsseeesenenes 66

3.1.1 Vision to the year )2 66 3.1.2 Strategy Objectives from 2013 to 2017 ÓÓ

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Bl TE WRIT, ceorcxreerrrcenroe meee HIE I TSE werrenermemmmcerencee 68

3,2 Business Strategy of H.AdA Compariy from 2013-201 T secccxxccvcescaceressaneeaeswnesis 69

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SAAD, BGT MII scccsasixrsenraaanimastciiticcanennivisnn ne ries 1 8H e EE AAS IS RESIN ESR 69

3.2.1.2 The Strategic Position and Action Evaluation (SPACE) Matrix: .73 đu uếnm, TÌN IRUWNE ĐKHYỨY seoerreseennsnnitrÐtintoitiedtiae=sss=eesereeesseremere TÔ 3.2.2 Selection of the Company development strategies through the

Quantitative Strategic Planning Mairi (OSP MY occccscavcorciaxaevessvesesamanonemnanneas T5

33 Comi?any Strategies for the COHIIHĐ V€QFS: Ăn si srisseicee 81

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Died, Wintel PEnCirallOn DURE BY qc ncnmnciemsnemnnramessinnivenmmenmcmeremenent 82

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| angaaesnseesearraote<———-esiisbdeioorEttstRdoosiiSGAnNOYEOIOGGHEBGNGISSREGUUNRTSSSSI 82

SAS TIUGDGLIOHSRD ÔD6TBLDTLITIBHBEĐTHNGITE .c»csằeeesersmrrmssrnrnaronnae 88

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Griccs) STRATEGIC MANAGEMENT Class GA€MBAO1 C0510 Group No 7

ee ee 90)

3.5.1 To the State: Government hte eeoceeemenc enn eecuareerereancureencac! 90

3.5.2 The company should ưng sirrerrdsarztrrerrtemi zeg25.009138 0012 PDD,

CÔNG, NHƯ NG _.—eeieễcierrernrenerreiinnoodniisriodiisG015124/053ssesissisieotmretrommreversrrtrprrrtsnrsyrtrrre 90

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Grice) STRATEGIC MANAGEMENT ClassGaMBAUL C0510 Group No 7

LIST OF ABBREVIATIONS “* AS» Attractiveness Scores

“* CPM: Competitive Profile Matrix

s* EFE: External Factor Evaluation Matrix “* IFE: Internal Factor Evaluation Matrix

“ QSPM: Quantitative Strategic Planning Matrix “* ROA: Return on total assets

“* ROL: Return on common equity

“* SPACE: Strategic Position and Action Evaluation Matrix

“* SWOT: Strengths -Weaknesses — Opportunities — Threats Matrix

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Grigcd STRATEGIC MANAGEMENT Class G€A€MBAO] C0510 Group No 7

LIST OF TABLES

Table 2.1 — The Registered Trade Mark 23 Table 2.2— Compare business effectiveness from 2010 to 2012 29

fo ee mẽ Ẳ 43

Table 2.4 —Basic Information of HAI Company and its direct competitors 4]

ee »›„ mẽ Ô.Ô 50

Table 2.6 - Human resourcee and workforcestructure a

(Cc ee es _ %eotrpva te irxevrrirgotnshrrtersanttmurmrre 62

Table 3,1 ~ Business Objectives 1romt 2013) 06 200 F ccccmwxomasniaesxnacarsisieaiivemuenerssmennnes 67

Re A TI crores eer rs reir cS 70

F'., KK Ẻ6 nan na +3

Table 3.4 —QSPM of intensive strateøy ørOUp àà co nhe 75

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LIST OF FIGURES

Figure |.1- A comprehensive strategic management model (Fred R David, 2006) 17 [ipure ] 2 — The Strategy- Formulation AnalytilealFrameworK 28

[igure 2.3 — Graph to compare financial ratIOS c2 nhe 3l

Figure 2.4 —Graph to compare business effectiveness between HAI Company and its

ee a3

Figure 2.5 - Market Share of the agricultural chemical busines companies 48 Figure 2.6 — Material Supplying Source of H.A.I Company 58 Figure 3.1 - Demand of plant protection drugs in Việt Nam 67 Figure 3.2 — Determine strategy position of HAI Company through SPACE Matrix 74 Figure 3.3 — Derisity oF plant prtectionh DF WS conc creo ercenmemnsxenersenesaansiinainenememen 84 Figuref 3.4 — Position of the price and the quality of Companies’ products 85

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Griged) STRATEGIC MANAGEMENT Class GAMBA01 C0510 Group No 7

PREFACE

Vietnam is an agricultural country and one of the world’s leading producers and exporters of agricultural products such as rice, and coffee The importance of fertilizer and chemicals in agriculture has long been recognized; for thousand years, it's been the rule of thumb among Vietnamese farmers that "First Water, Second Fertilizer, Third Hard Work, Fourth Good Seeds" and new requirements for clean agricultural practices have made agricultural chemicals even more important in Vietnam agriculture Plant protection drugs especially high quality products still are necessary for argricutural development

The world is different than it was and Vietnam macro economy's fluctuation affects badly most of enterprises therefore it is essential to form a business strategy to determine the vision and target of each enterprise in order to utilize their limited

resource and achieve maximum outcome

The question now is how the H.A.I Company can find a better solution to use

For an enterprise strategy is a system of decisions to establish targets or milestones that company has to meet It sets out policies and plans for implementation It identifies the type of business and business ideas, the nature of the economic and non-economic contribution that business can make for the benefit of its members and of the society in the future

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Grice) STRATEGIC MANAGEMENT ClassGaMBAOI CÓOSI0 Group No 7

the coming years

2 The goal of the research and applicability:

2:1 The goal of the research:

Based on the basic theoretical knowledge system of strategic management as a basis for the analysis and formulation of business strategy for the company include:

e Analysis, assessment and forecast of market factors affecting agricultural

e lo provide analysis, comprehensive assessment of favorable and unfavorable factors, strengths and weaknesses of not only H.A.I Company but also other competing companies in the existing markets as well as domestic and foreign companies expected to participate in the future market

e To formulate business strategies to ensure the company can gain desired targets and help the company become one of the leading companies in the agricultural chemical market in Vietnam

2.2 Applicability:

With a team of leaders having great expertise, good experience and enthusiasm for the development, the success of the Company in particular and of Vietnam's Agriculture in general

With adequate effort invested in the analysis and assessment of potential markets;

3 Objective and scope of the research

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Go STRATEGIC MANAGEMENT Class GA€MBAOL C0510 Group No 7

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Tools and Methods for this research:

Based on data from multiple data sources such as books newspapers the Internet internal information Our group employed a system of methods for the analysis of factors affecting business situation in order to determine business targets and propose solutions for HAI Jomt Stock Company The methods used in the research are:

e The predictive statistics method

e Method of survey

e Methods of matrix analysis including SWOT analysis; SPACE analysis;

construct an Internal Factor Evaluation (IFE) matrix; construct an External Factor Evaluation (EFE) matrix ete

Structure of the research: e Preface

e Chapter |; General theory of Strategic Management e Chapter 2: Situational analysis of H.A.1 Company e Chapter 3: Solutions, recommendations

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Grice) STRATEGIC MANAGEMENT Class GA€MBAOL C0510 Group No 7

CHAPTER I: GENERAL THEORY OF STRATEGIC MANAGEMENT 1.1 Definitions of strategic management

There are different definitions of business strategy According to Fred R.David, a business strategy is the means to achieve the long term goals (Fred R.David, 2006) According to Alfred Chadler (Harold Koontz, 1993), a business strategy 1s the determination of basic and long term objectives of an enterprise as well as outline and selection of a method, piaii of action and distribution of resources in order to obtain ihose objectives

However, In general, we can define: a strategy is the long-term direction and scope of action of an organization to achieve business advantage through identifying existing resources which can be used in business environment in order to meet market’s demand and ensure the interest of all concerned stakeholders

Strategic management can be viewed as an art and science to initiate, implement and evaluate decisions involving many functions and resources allowing an organization to achieve the proposed objectives Strategic management focuses on combining management, marketing, accounting and finance, manufacturing, research, development and information systems to ensure the success of an organization

The basic objectives of strategic management are to put the enterprise in the best

« Achieve the long-term business objectives in a sustainable way

e Determine the market or market segment that the company will trade, and the trading tactics will be applied

« What can the company do to dominate in comparison to its competitors in such market for specific customers?

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e Determine external risks that can affect the implementation of strategy: environment, competition, politics natural resources, etc, and even the plan to prevent risks

e [he values that the enterprise will bring for the owner and the society in which the enterprise 1s a member

The first component of business strategy is the objectives which are the interest of managers However in addition to determine the objectives, construct and decide the business strategy each strategy shall offer actions for specific target

Secondly, business strategy is not a single action It is a set of actions closely related to each other, the coordination of resources to focus on specific issues in order to achieve the target

Thirdly, through analysis and assessment of strengths and weaknesses together with opportunities and threats from the environment, the strategy will help managers find competitive advantages of the company against competitors

Therefore, managers need to build detailed strategy for each specific phase, adjust quickly to changes in dynamic business environment

It can be said that the business strategy includes 3 main components as follows:

e Identify the vision, mission, long-term, and basic objectives of an enterprise

e Offer the general operating programs for each period

e Decide the method for implementation, and allocate resources to achieve

the proposed objectives

1.2 Levels and theoretical models of strategic management

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aR) STRATEGIC MANAGEMENT Class GA€MBAOIL C0510 Group No 7

1.2.1 Corporate level strategy

This is the general overall and the highest-level strategy related to long-term nain issues critical to the future of the company The corporate level strategy directs fie purpose and overall scope of an organization It is the specific action that the company implements to obtain competitive advantage by selecting and managing a coup of different business activities and competition in certain market sectors and yroducts

3ecause corporate level strategy is often associated with iong-term and basic (bjectives there are corporate level strategies with different names According to Fred I David, corporate level strategy is classified into 4 groups as follows:

1.2.1.1 Integrated strategy group:

The development of company is based on the establishment and expansion of the relationship with suppliers, intermediate distributors and consumers of products, or

©mpetitors Joint venture and integration will create a level with new scale which yermits the enterprises to take initiative in trading from the first stage to the consuming

se Forward integration strategy Gaining ownership or increased control over

distributors or retailers

¢ Backward integration strategy Seeking ownership or increased control of a firm’s supplier

¢ Horizontal integration strategy: Seeking ownership or increased control over competitors

1.2.1.2 Intensive Strategy Group:

It consists of general characteristics of products and stable market factor With tIIS strategic group companies often focus on the potential in familiar areas in order to ceate sustainable competitive advantage in the market This group includes the

fillowing strategies:

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SpiQo9 STRATEGIC MANAGEMENT Class GAMBAO1 C0510 Group No 7

¢ Market penetration strategy |= Seeking increased market share for current products or services in present markets through greater marketing efforts such as policy of price, distribution promotion in order to increase the available purchasing power of customers and attract new customers

@ Market development strategy introduce available products and services to new markets find ways for development by entering new markets in order to promote products currently tn production

e Product development strategy: Seeking increased sales by improving current

products or services or developing new ones for consumption in the markets that company is operating These new products may be produced by the company or by contract, or imported from foreign countries, by merging or acquiring

1.2.1.3 Other strategy group:

Other than integration strategy, intensive strategy, companies can adopt joint ‘enture strategy, narrow operation strategy, liquidation strategy or combined strategy

e Joint venture strategy: \t is a popular strategy It occurs when two or more companies form a limited partnership for the purpose of cooperation or

exploitation of a certain opportunity

e Retrenchment strategy Regrouping through cost and asset reduction to reverse declining sales and profit

1.2.2 Business Unit Level Strategy:

Business unit level strategy is the overall commitment and action assisting the eiterprises to gain the competitive advantage by exploiting their core competences for secific product markets

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3g/oo3 STRATEGIC MANAGEMENT Class GAMBAOL C0510 Group No 7

siccess and help the company to operate more efficiently than other companies in the

came sector

1.2.2.1 Cost leadership strategy:

To provide products and services with the lowest cost in relation to all competitors with features accepted by the customers The purpose of the person who 1s pllowing the leading cost strategy is to do better than its opponents so that the cost of oducts or services 1s lower than its opponents

1.2.2.2 Differentiation strategy:

This strategy creates exclusive products and = services in the market Pitferentiation of products can be in any form: unique design or image of trademark, tchnology, customer service, etc

1.2.2.3 Focus strategy on certain market segments:

This strategy focuses on a group of purchaser, a segment or a specific regional narket

1.2.3 Functional level strategy:

This is the lowest strategy level of a company, a collection of short-term oriented decision and action (often under Ol year) of different functions in the company Finctional level strategy concentrates on the best management and use of resources of tie company and each member unit The functional level strategies include:

1.2.3.1 Marketing Strategy:

Marketing is the process of determination, prediction, establishment and s.tisfaction of the customers’ needs and desires for products or services Based on the bisiness unit level strategy to determine the following components: product psitioning: product, price; distribution, advertisement, promotion

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3RiGc) STRATEGIC MANAGEMENT Class GAMBAOI C0510 Group No 7

1.2.3.2 Manufacturing/ Operation Strategy:

Manutacturing/ operation management is the input management, process of tanstormation and output These factors are different depending on the line of tusiness and environment

Based on business unit level strategy to determine the following components: sale of manutacturing; category of product: product design; technological chain; skills

ad employees: stages of investment

1.2.3.3 R& D Strategy:

The research and development department must have the capacity to offer kiowledge in technology and science, exploit such knowledge and manage risks in

lation to innovation, products, services and requirements for production

1.2.3.4 Financial Strategy:

The objectives of financial strategy are to establish and construct an appropriate

fnancial structure, help companies to achieve the proposed targets Based on the

1.3 The process of Strategic Management:

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Strategy Formulation Strategy EựalusHod

Implementatior

Figure 1.1: A comprehensive strategic management model (Fred R David, 2006)

1,3,1, Strategy Formulation

The preparation of strategy is the process of setting business mission, ‘vestigation and research to determine the internal and external factors, proposing the lmg-term objectives and selection of alternative strategies Strategic management icludes both the establishment and assessment of strategy The preparation of strategy icludes three basic activities: the research, combining intuition and analysis, making dicisions

Implementation of research is the internal analysis which identifies the strengths aid weaknesses, analyzes the external environment to determine the opportunities and teats

e Use of matrixes: the strategists combine intuition and analysis in offering

and selecting feasible alternative strate

13

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súc) STRATEGIC MANAGEMENT Class GAMBAOL C0510 Group No 7

e The strategists shall make decisions related to the selection of alternative

strategies, which bring the best benefit for company

1.3.2 Strategy Implementation:

It is the action phase of strategic management Three basic activities of the inplementation of strategy are: setting annual objectives, policies development and alocation of resources This 1s the most difficult stage of strategic management

1.3.3 Strategy Evaluation:

All strategies subject to changes because the external and internal factors often qange Three main activities of this stage are:

e Review of factors used as the basis of current strategies e Measures of achievement

e Implementation of corrective actions

The analysis of strategy is the necessary stage for the current success, but not for tie future success Success always creates other new issues

1.4.Tools and method for strategic plan

1.4.1 Analysis of external environment

1.4.1.1 Factor of macro environment

The macro environment includes: factors of economic, politics, culture- society, n.ture, technology- techniques, etc each environment factor may cause influences on tle organization independently or in connection with other factors

The analysis of macro environment helps the company to answer the question: “What ithe Company facing?”

1.4.1.2 Factors of microenvironment:

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3g/o3 STRATEGIC MANAGEMENT ClassGaMBAOLI C0510 Group No 7

srengths and weaknesses in relation to opportunities and threats that such line of lusiness faces

eCompetitor: during its operation, the company faces many types of competitors So, the identification and understanding of competitors are very important aid vital to the company Typical types of competitors are:

» Direct competitor: are companies which manufacture products having the same usage, providing for the same target customers with similar price

» Indirect competitor; are companies which manufacture alternatives

providing for the same target customers

>» Potential competitor: are companies established at some point later with new technologies to produce new products and replace current products of the company and direct competitors

X Competitors in the same budget division of target customer: these are

companies which produce other products of different usage, but they approach the money of company’s target customer

e Purchaser (Customer): The confidence of customers is a valuable asset of the cmpany However, the purchaser advantage is the bargain power that may reduce the sctor profit by price pressure, demanding higher quality or more services

e Supplier: Suppliers include: the sellers supply materials, equipments; financial cmmunity, workforce When the suppliers gain advantage, they can pressure and ceate disadvantage to the company

1.4.2 Analysis of internal environment

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3810) STRATEGIC MANAGEMENT Class G€AMBAOI C0510 Group No 7

jmpany includes main factors such as) management marketing, finance- accounting nanufacturing, research and development (R and D) human resources and information

stem

Management includes Planning Organization, Leadership, and Inspection Human resources play an important role for the success of a company No matter how good the strategy 1s, it does not bring the efficiency if the company doesn’t have good human resources Therefore, the company shall select, organize its human resources so that they can maximize their potential, and prepare sufficient human resources to achieve the proposed targets

Marketing activity: “Marketing 1s a form of human activity in order to meet their needs and desires through exchange” (Philip Kotler, 2001) However, to complete the exchange process, it takes efforts and qualification in: “analysis, planning and implementation of that plan, pricing, promotion and distribution of goods, services and ideas to create the exchange with target group and meet the targets of customers and organizations, which is marketing management” (Philip Kotler, 2001)

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Gricas) STRATEGIC MANAGEMENT Class G€A€MBAOI C0510 Group No 7

it is critical to be able to keep up with new information on technological innovations for timely development of applications

e Information system is an important strategic resource that helps a company to track changes in environment, identify the threats in competition, and support implementation, assessment and control! of strategy Additionally an effective information system offers the company special capability in other areas such as: reducing cost, smproving consumer service

1.4.3 Tools for strategic planning

Important techniques to form a strategy, which can be incorporated into a dicision- making process, consist of 03 stages The tools used for this process may hip managers to determine, assess and select the strategy According to Fred R Lavid, the process of formation and selection of strategy include 3 stages:

STAGE 1: INPUT STAGE

E:ternal Factor | Competitive Profile Matrix | Internal Factor Evaluation

Evaluation Matrix (EFE) (CPM) Matrix (IFE)

STAGE 2: THE MATCHING STAGE

Srengths- Strategic Boston Internal Grand

waknesses- Position and | Consulting and strategy

oyportunities- threats | Action Group Matrix | External matrix mitrix Evaluation (BCG) Matrix

(WOT) Matrix (IE)

(SPACE)

STAGE 3: THE DECISION STAGE

Figure 1.2 — The Strategy-Formulation Framework

Source: Fred R David, 2006

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Because the resources of a company are always limited, we cannot implement all f:asible strategies but instead select some best strategies for implementation

1.4.3.1 External Factor Evaluation Matrix (EFE)

External factor evaluation matrix (EFE) helps us to summarize and quantify the fluences of environmental factors on the company

1.4.3.2 The competitive profile matrix (CPM)

The Competitive Profile Matrix identifies a firm's major competitors and its puticular strengths and weaknesses in relation to a sample firm's strategic position Tus matrix is the expansion of the external factor evaluation matrix, because it ucludes internal and external factors, which are very important for the success of ompany In addition, in competitive profile matrix, competitors will be analyzed and ealuated for total key scores Total score assessed by competition will be compared to tle company in research The comparison gives us a lot of important strategic formation

[he way to build the competitive profile matrix 1s similar to the way to build

e:ternal factor evaluation matrix

1.4.3.3 The Internal Factor Evaluation Matrix (IFE)

Internal factor evaluation matrix (IFE) summarizes and assesses the main

stengths and weaknesses of business departments

1.4.3.4 SWOT Matrix (SWOT)

SWOT matrix helps us to develop 4 strategic types:

e Strategies of strengths and opportunities (SO): these strategies use internal strengths of the company to utilize external opportunities

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GRICE STRATEGIC MANAGEMENT Class GAMBAOL C0510 Group No 7

e Strategies of strengths and threats (ST): these strategies use strengths to overcome or reduce the influences of external threats

e Strategies of weaknesses and threats (WT): these strategies improve the internal weaknesses and avoid or reduce the influences of external threats The purpose of SWOT matrix is to propose feasible strategies but does not identify which one 1s the best Therefore, of those developed alternatives trom the SWOT matrix some best strategies will be selected for implementation

1.4.3.5 The Strategic Position and Action Evaluation Matrix (SPACE)

Based on 2 internal aspects of an organization - the financial power and competitive advantage, and 2 external aspects - the stability of environment and srength of the business sector to determine the general strategic position of an o ganization

Subject to each organizational type, many variables can be used to determine the fnancial power and competitive advantage, the stability of environment and the srength of the sector

1.4.3.6 The Grand Strategy Matrix:

It is also a common tool to form feasible strategies

The grand strategic matrix 1s constructed on the basis of 2 aspects: competitive

psition and growth of the market

1.4.3.7 The Quantitative Strategic Planning Matrix (QSPM)

The QSPM matrix uses the input information from the EFE matrix, the IFE matrix, the competitive profile matrix, the SWOT matrix and the grand strategic matrix

tc perform objective assessment of the best alternative strategies

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Grice) STRATEGIC MANAGEMENT Class GaMBA0LI_ C0510 Group No 7

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Go STRATEGIC MANAGEMENT ClassGaMBAOLI C0510 Group No 7

CHAPTER 2: BUSINESS OPERATION OF H.A.I COMPANY 2.1 Introduction of HAT Company:

2.1.1 Formation and development process

On March 3" 1986, following the decision of 94 NN TCCB/QD of Ministry of Agricultural and Food Industry, the Southern Pesticide Supply Company was established and controlled by Bureau of Cultivation and Plant Protection of Ministry of Agriculture and Food Industry At that time, its main duty was to distribute agricultural chemicals to the southern provinces from Khanh Hoa to Minh Hai based on quotas allocated by the department with the price determined by the government

In 1993, the government handed over capital and gave the Company independence in bookkeeping, operating according to the free market

On February 7" 2005, H.A.1 Agrochem Joint Stock Company was established with business license No.4103003108 issued by Ho Chi Minh City Department of Planning and Investment in accordance with the decision of 2616/QD/BNN TCCB signed by the Minister of Agriculture and Rural Development on August 30", 2004 changing Pesticide Supply Company from a State-owned company to a Joint stock company

2.1.2 Introduction of HAI Company

- Name of Company : H.A.I Agrochem Joint Stock Company - Transaction Name: H.A.1 Agrochem Join Stock Company - Short Form Name: H.A.I1 Company

- Chartered Capital: 174 Bil VND

- Vision: H.A_I’s vision ts to be the clients’ first choice for agricultural materials by its quality and endless contribution to society and communities

- Mission: HAI's mission is always work towards the well being of community and society continuously apply science and most advanced technologies to deliver

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Griacs) STRATEGIC MANAGEMENT Class GAMBAOI C0510 Group No 7

high quality products which do not pollute the environment and are not harmful to public health at competitive prices to help farmers reap the success On such basis employees, shareholders, and partners will get the best benefits for working together with the company and the company will ensure its success and sustainable development

- H.A.I’s Logo:

Uy I:E.WI

- Logo Meaning:

H.A.I’s logo has a crown shape meaning ~’King’ of plant protection” The three green highly - rising leaves represent strongly growing rice fields supported by 3 letters of “HAT” implying the foundation for such growth “HAT” 1s familiar abbreviation of the Company’s name often used by its customers and partners In 2005, when the Company was equitized, the name was changed to H.A.I Agrochem Joint Stock Company with the purpose of preserving the brand name’s meaning Company’s English name ts “Hightech Agrochemical Industry”

- Target market of H.A.I Company:

° Target market of H.A.I Company is Mekong River Delta_ the biggest rice

basket of the country Therefore Company always tries to maintain market share in this region

+ However from 2013 to 2017 Company will try to increase its market share in

the following present markets: Ninh Thuan, Binh Thuan, Ba Ria- Vung Tàu

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Giúo3 STRATEGIC MANAGEMENT ClassGaMBAOLI CÓSI0 Group No 7

as rubber cashew, coffee, black pepper ete which are very high value export products

Tride Mark: Currently the Company is using product trade marks trom two different

po:sessive sources for business transaction:

¢ The possessive source of the suppliers: H.A.f Company as their distributor is authorized and monopolized to use these trademarks in Viet Nam

e The possessive source of 11.A.1 Company: these trademarks are directiy traded or distributed by H.A.| Company These trademarks are also franchised to other companies with strict quality control to ensure the brand name's prestige

- At present, Company has 26 trademark certificates issued by the Plant Pretection Department under the Ministry of Agricultural and Rural Development

- Table 2.8 — The Registered Trade Mark _ Strategic products

Active Ingredient Registered

Neo | Trade name Notes number

I Pesticide

l Cyper 25EC Cypermethrin 722/05 RR

2 suco SOND Fenitrothion 719/05 RR

3 Toppecin SOEC | Fenobucarb 54/04 RR

Fenobucarb 30% + Phenthoate 4 Jopsan 75ND 154/04 RR 45%

5 | eva 1OFC 721/05 RR

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Griccd)

3 | Carbebda 50 EC 194/99 RR

F5 | Ridozeb 72WP | Metalaxyl 8% + Mancozeb 64% | 168/99 RR

6 | Helan 25WP Pencycuron 147/04 RR

7 | Cezol Z50EC Propiconazole 174/04 RR

122/99 RR

8 | Top 7OWP Thiophanate Methyl 31/04 RR

9 | Top S5OSC 158/04 RR

10 | Coben 25SEC Triadimefon 150/04 RR

11 | Vali 3DD Validamycin A 148/04 RR 12 | Vali SDD 149/04RR 13 | Ramat 80WP Zineb 151/04 RR

II Herbicide

4 | Fenothyl 7.5EW | Fenopxaprop — P - Ethy! 111/02 RR

5 | Dream 480 SC 153/04 RR

Glyphosate Isopropylamine salt

6 | Dream 360 SC

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Some of Company's products Eertilize

Pesticide:

2.1.3 Operation Fields include:

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e Manufacturing, processing, trading, import and export of agricultural materials e Plant protection services supplying plant seeds planting technique consulting e Manufacturing selling and buying agricultural chemicals and seeds

e Warehouses, offices, machines agrochem manufacturing equipments, trucks rental

e Trading in other fields permitted under company’s business license and allowed by laws and regulations

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Grice) STRATEGIC MANAGEMENT Class GaMBAOI COS10 Group No 7

Figure 2.1 —Diagram and ognizational structure (Source: HAI Company)

2.2 Business Operation of H.A.| Company in the last 3 years:

e Business Operation of HAI Company: All agricultural chemicals of H.A.I are produced and divided into 3 main types:

The Company buys finished products in packages ready for retail sale from suppliers and sells directly to customers such as Dekamon 22.43 L with 100 ml packings, Lannate 40 SP with 1O00gr and 500gr packings,

CC es:

The Company buys finished products in large packings of 200 liter drum, 70 kg package then repacks and bottles at factories and launches onto the market as finished products such as Roundup 480SC in 200 liter

packing would be resold in | liter bottle, 480ml bottle, 100ml1 bottle,

The Company buys main raw materials including active elements and additives and then formulates and applies its own technology/formula or receives technology transfer from suppliers to produce finished products such as: Fastac SEC, Hopsan 75 ND, Applaud 10 WP, etc

Revenue and profit in the last 3 years:

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Co) STRATEGIC MANAGEMENT Class GAMBAO1 C0510 Group No 7

- Revenue and Profit:

893 881 900,0 800,0 732 684 700,0 | 600,0 500,0 400,0 300,0 136 123 137 m¬ 79 50

| Bes

Totat Revenue Net Revenue Gross Profit Net Profit

200,0

100,0

Figure 2.2 — Revenue and Profit Graph

Source: Summarized by group 7 based on information of H.A.1 Company

Estimated business results in 2012 compared to 2011 as follows:

because the company made a number of promotions and due to disease

However, profit fell 4.27 billion VND (equivalent 9%) because in the first 06 months cost of goods sold increased (interest rates, exchange

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Grice) STRATEGIC MANAGEMENT Class Ga4MBAOL C0510 Group No 7

- Other financial ratios:

45,00% 41% 40,00" \

35,00" 33%)

15,00 12% 11%

ROA ROE Net Profit Ratio Gross Profit Debt-to-asset

Ratio

Figure 2.3 — Graph to compare financial ratios

Source: Summarized by group 7 based on information of H.A.1 Company o The ROA figure gives investors an idea of how effectively the company is

converting the money it has to invest into net income The higher the ROA

number, the better, because the company is earning more money on less

1%

© Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested The higher this index the more attractive the company is to investors ROE of 2012 1s 12% if compared to 2011 (13%) it decreased by

1%