setting business strategy of an phuoc garment company in local market pdf

CAPSTONE PROJECT REPORT SETTING BUSINESS STRATEGY OF AN PHUOC GARMENT COMPANY IN LOCAL MARKET Group No.:     Nguyen Duy Phuong Pham Quang Tien Lam Quang Tuan Trinh Anh Duc Ho Chi Minh City TABLE OF CONTENT Acknowledgement Abstract Introduction 14  Statement of the Problem  Objectives of the Study  Research Methodology  Research Scope and Limitations  The Conceptual Framework of Study  Structure of Research Study Chapter 1: The literature of business strategy and strategic management 18 1.1 An overview on strategic management literature 18 1.1.1 Concepts of strategy 18 1.1.2 Strategy at Different Levels of a Business 19 1.1.3 Strategic management 20 1.1.3.1 Strategic Analysis 22 1.1.3.1.1 PEST analysis 22 1.1.3.1.2 Porter's Five Forces 24 1.1.3.1.3 The EFE (External Factor Evaluation) Matrix 25 1.1.3.1.4 The IFE (Internal factor evaluation) Matrix 27 1.1.3.1.5 The SWOT (Strengths, Weaknesses, Opportunities and Threats) Matrix 28 1.1.3.1.6 Strategic Position & Action Evaluation (SPACE) Matrix 30 BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET 1.1.3.1.7 CPM (Competitive Profile Matrix) 32 1.1.3.2 Strategic Choice 33 1.1.3.2.1 Quantitative Strategic Planning Matrix (QSPM) 33 1.1.3.3 The literature on strategy implementation 34 1.1.3.3.1 Operational management 35 1.1.3.3.2 Marketing management 35 1.1.3.3.3 Human resource management (HRM) 38 1.1.3.3.4 Financial management 40 1.1.3.3.5 Research and development (R&D) 40 1.1.4 Models of strategic planning and strategy implementation 42 1.2 Types of strategy 42 1.2.1 Intensive strategies 42 1.2.1.1 Market Penetration 43 1.2.1.2 Market Development 43 1.2.1.3 Product Development 44 1.2.2 Diversification strategies 45 1.2.2.1 Concentric Diversification 45 1.2.2.2 Conglomerate Diversification 45 1.2.2.3 Horizontal Diversification 46 Chapter 2: Analysis and assessment on current operations situation of An Phuoc company CAPSTONE PROJECT REPORT 47 GROUP -2- BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET 2.1 About company 47 2.1.1 Establishment and development 47 2.1.2 Operations, Domestic and Foreign market, Production capacity 48 2.1.2.1 Company operations 48 2.1.2.2 Domestic market 49 2.2.1.3 Foreign market 49 2.1.2.4 Capacity of production 49 2.1.3 Trading, Retailing and Awards 51 2.1.4 Company obligations 53 2.1.5 Company goals 53 2.1.6 Organization Structure 53 2.1.6.1 Board of directors 53 2.1.6.2 Functional departments 54 2.1.6.2.1 Personnel and administration department 55 2.1.6.2.2 Sales department 55 2.1.6.2.3 Import export department 55 2.1.6.2.4 The Planning department 55 2.1.6.2.5 Accounting and financial department 55 2.1.6.2.6 Quality control department 56 2.1.6.2.7 Product and R&D Department 56 2.1.7 Manufacturing Process and Technology 57 2.1.8 The current production information of An Phuoc company 59 2.1.8.1 Technology 59 CAPSTONE PROJECT REPORT GROUP -3- BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET 2.1.8.2 Segmentation and target market 60 2.1.8.2.1 To Men 60 2.1.8.2.2 To Women 61 2.1.8.3 Product 62 2.1.8.4 Price 69 2.1.8.5 Promotion 70 2.1.8.6 Distribution 71 2.1.8.7 Marketing and sales 73 2.1.8.8 Materials Management 74 2.1.8.9 Research & Development (R&D) 74 2.1.8.10 Human Resource Management 76 2.2 The necessary of building the business strategy in local market of An Phuoc 77 2.2.1 The competition situation of garment in local market 77 2.2.2 The necessary of building the business strategy in local market of An Phuoc company 78 Chapter 3: Building – proposing solutions for deployment business strategy of An Phuoc company in local market 79 3.1 Macro Environment Analysis 79 3.1.1 Markets of Vietnam's garment and textile products 79 3.1.1.1 The export market 79 3.1.1.1.1 Market share of Vietnam in the world garment and textile industry 79 3.1.1.1.2 Vietnam Textile & garment export turnover 80 CAPSTONE PROJECT REPORT GROUP -4- BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET 3.1.1.1.3 The property structure of Vietnamese export companies 81 3.1.1.2 Domestic market 82 3.1.1.2.1 The consumption value of local garment market 82 3.1.1.2.2 The sources of supply to local garment market 83 3.1.2 Analysis of macro - economic factors affecting the production and trading of garment - PEST matrix 85 3.1.2.1 Economic factors 85 3.1.2.1.1 Gross Domestic Product (GDP) 85 3.1.2.1.2 Inflation rate 86 3.1.2.2 The socio-cultural and demographic factors 88 3.1.2.3 Technology factors 89 3.1.2.4 The political and laws factors 91 3.1.2.5 The environmental factor 91 3.1.3 Five forces of Michael Porter - Analyzing the competitive pressures to garment industry and An Phuoc company 92 3.1.3.1 Pressure from customers 92 3.1.1.2 Pressure from distributors 94 3.1.1.3 Pressure from substitute product 95 3.1.1.4 Pressure from Suppliers 95 3.1.1.5 Pressure from local and foreign Competitors 96 3.1.4 EFE Matrix 100 3.2 Micro- Environment Analysis 104 3.2.1 Current micro – environment analysis in An Phuoc company 104 CAPSTONE PROJECT REPORT GROUP -5- BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET 3.2.2 IFE Matrix 104 3.3 SWOT Matrix in An Phuoc company case 106 3.4 SPACE Matrix in An Phuoc case 108 3.5 CPM (Competitive Profile Matrix) 109 3.6 QSPM Matrix – Strategies are selected based on priorities and timing requirements 109 3.7 Fundamental solutions and proposals to business strategy implementation of An Phuoc company 111 3.7.1 Capital 111 3.7.2 Human resource 112 3.7.3 Marketing solutions 113 3.7.3.1 Products 113 3.7.3.2 Price 115 3.7.3.3 Distribution channels 115 3.7.3.4 Promotion- Marketing organization 116 3.7.4 Information Technology 117 CONCLUSION 118 REFERENCES 122 CAPSTONE PROJECT REPORT GROUP -6- BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET LIST OF FIGURES Figure 1.1: Levels of strategy Figure 1.2: A thorough strategic management process Figure 1.3: A graphical representation of Porters Five Forces Figure 1.4: SWOT matrix Figure 1.5: Space matrix model Figure 1.6: CPM model Figure 1.7: The Selling and Marketing Concepts Figure 1.8: The Marketing Management Process Figure 1.9: Model of strategic planning and strategy implementation Figure 2.1: Head office of An Phuoc Garment - Embroidery - Shoes Co., Ltd Figure 2.2: Network of factories of An Phuoc garment company Figure 2.3: Pictures of factories & production procedure of An Phuoc Figure 2.4: Pictures of award and cup of An Phuoc company Figure 2.5: Organization structure of An Phuoc garment company Figure 2.6: Manufacturing Process of An Phuoc Company Figure 2.7: Some product lines of Men‟s collection of An Phuoc Figure 2.8: Some product lines of Women‟s collection of An Phuoc Figure 2.9: The Trade Mark of An Phuoc Products CAPSTONE PROJECT REPORT GROUP -7- BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET Figure 2.10: Price list of An Phuoc‟s product line in 2010 Figure 2.11: The Distribution of shops of An Phuoc Figure 3.1: SPACE Matrix of An Phuoc Figure 3.2: Suggested Structure of the Marketing Department LIST OF CHARTS Chart 2.1: Proportion of consumption in local market Chart 2.2: Revenue structure of An Phuoc Chart 2.3: Revenue structure of An Phuoc in 2010 Chart 2.4: Proportion of production capacity of An Phuoc in 2010 Chart 2.5: Proportion of turnover of An Phuoc in 2010 Chart 2.6: Proportion of consumption between An Phuoc and Pierre Cardin brand name Chart 2.7: Proportion of consumption in market among product lines of An Phuoc Chart 3.1: Market share of Vietnam garment industry in the world in year 2010 Chart 3.2: Vietnam Textile & garment export turnover (USD ml) (period of 2007-10 first months of 2011) Chart 3.3: The property structure of Vietnamese export companies in 2010 Chart 3.4: The consumption value of local garment market from 2004 to 2100 and estimate to 2015 Chart 3.5: The sources of supply to local garment market Chart 3.6: GDP Vietnam in the period time of 1998-2011 Chart 3.7: Vietnam GDP Growth Rate chart from 1996 to 2011 Chart 3.8: Inflation rate of Vietnam in the period time of 1999-2011 Chart 3.9: Vietnam GDP per capita in the period time of 1998-2011 Chart 3.10: Structure of market segment in local market CAPSTONE PROJECT REPORT GROUP -8- BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET LIST OF TABLES Table 2.1: Sales Revenues of Garment Sector of An Phuoc Table 3.1: Strengths and weaknesses of key competitors in local market CAPSTONE PROJECT REPORT GROUP -9- BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET An Phuoc company has the competitive advantages in the local market So, An Phuoc should select competitive strategy 3.5 CPM (Competitive Profile Matrix) Due to the limitation of time, the researcher cannot collect completely and exactly information of competitors However, thanks for help of four factory managers, the researcher have rated the competitors at the accepted accurate level No Competitive criteria Average NHA BE AN PHUOC VIET TIEN Rate 0.13 Score Weight 0.39 Score Weight 0.26 Score Weight Market share 0.57 0.29 0.43 Capacity of price 0.14 competition Capacity of finance 0.15 0.46 0.31 0.62 Quality of product 0.17 0.50 0.67 0.67 Product diversification 0.13 0.39 0.39 0.39 Reputation of company 0.15 0.46 0.62 0.62 Reliability of customers 0.12 0.24 0.36 0.36 1.00 21 3.02 20 2.89 25 3.61 Total Weighted Score 0.52 Based on the above CPM, An Phuoc is a strong competition company get total weight score at 2.89>2.5 However, in local market, with total weight score of 2.89, An Phuoc is weaker than Nha Be company (3.02) and Viet Tien company (3.61) 3.5 QSPM Matrix – Strategies are selected based on priorities and timing requirements QSPM Matrix is a tool which is used to quantify all information analysed in early stages It helps strategic manager choose the optimal strategy The differences in total attractiveness score among strategies indicate that the higher the attractiveness score is, the more optimal the strategy is Thanks for support of four factory managers, the appraisal forms are sent to them to collect their attractiveness score to external and internal factors affecting to the four business strategies of company include Market penetrating, Market development, Product development and Low cost strategy CAPSTONE PROJECT REPORT GROUP - 105 - BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET Market development strategy Total A.S AS Product development strategy Rate Market penetrating Strategy Total A.S AS A.S Total AS A.S Total AS 3.00 2.25 6.75 2.75 8.25 2.25 6.75 2.75 8.25 3.50 2.75 9.63 2.25 7.88 2.75 9.63 2.50 8.75 3.75 2.00 7.50 2.50 9.38 2.00 7.50 2.25 8.44 3.25 2.50 8.13 2.75 8.94 2.50 8.13 2.50 8.13 2.50 3.00 7.50 2.75 6.88 3.00 7.50 2.25 5.63 3.00 2.25 6.75 2.75 8.25 2.25 6.75 2.25 6.75 2.50 2.50 6.25 3.00 7.50 2.50 6.25 2.25 5.63 2.25 3.25 7.31 3.00 6.75 3.25 7.31 2.75 6.19 3.25 3.75 12.19 2.50 8.13 3.75 12.19 3.25 10.56 3.25 2.25 7.31 3.00 9.75 2.00 6.50 2.25 7.31 3.00 3.25 9.75 3.00 9.00 2.50 7.50 2.50 7.50 After sales service The understanding about customers The management ability of managers 3.50 3.75 13.13 2.50 8.75 3.25 11.38 2.50 8.75 3.25 3.00 9.75 3.00 9.75 3.25 10.56 3.50 11.38 3.00 3.00 9.00 2.25 6.75 3.00 9.00 3.25 9.75 2.25 3.25 7.31 2.50 5.63 3.25 7.31 2.75 6.19 16 Experience The well-known company 2.50 3.00 7.50 3.25 8.13 3.00 7.50 2.75 6.88 17 The suitable salary and reward policy 2.25 3.25 7.31 2.75 6.19 3.25 7.31 2.50 5.63 18 The capital source 2.50 2.50 6.25 3.25 8.13 3.00 7.50 2.00 5.00 19 Level of staff 2.50 Ability of research and development 3.25 3.25 8.13 3.00 7.50 2.75 6.88 2.50 6.25 3.25 10.56 3.00 9.75 2.00 6.50 2.50 8.13 No 10 11 12 13 14 15 20 Factors GDP development ratio is of increasing tendency The stability of current political system Vietnam entering the AFTA, WTO The open-door policy of government The development policy for garment industry The taste of customer to fashion The substitute product in the same industry The technology in producing The dependence upon suppliers The competition of competitors in same industry Information of market development tendency Low - cost strategy of TOTAL 168 161 160 151 Attractiveness Scores – AS As the results from QSPM, the total attractiveness scores of different strategies as below CAPSTONE PROJECT REPORT GROUP - 106 - BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET  Market penetrating strategy (168)  Market development strategy (161)  Product development strategy (160)  Low-cost strategy (151) In general, we should choose the following strategies for carry out due to high attractiveness score:  Market penetrating strategy (168)  Market development strategy (161)  Product development strategy (160) Using various tool for developing strategy enables An Phuoc company to recognize, consider, decide and choose proper strategy which is the combination of three above strategies: Market penetrating, Market development, Product development strategy 3.7 Fundamental solutions and proposals to business strategy implementation of An Phuoc company 3.7.1 Capital Exploit effectively government supports in terms of capital, technology renovation, technology transfer and looking for new market At present, government has received the important role of textile-garment industry and created many conditions to support businesses developing through the favorable loans with low interest, consultant services, and providing information related to market of textilegarment products and manufacturers Businesses are given opportunity by taking part trade fairs and machinery equipment fairs of textile-garment industry Company should exploit these government supports to implement their technology renovation in order to strengthen technology and competitive position An Phuoc is a private garment company, so it is difficult access of bank favorable credit to invest product Thus, the situation of lacking capital for investment will happen to An Phuoc rather strongly To development and become CAPSTONE PROJECT REPORT GROUP - 107 - BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET the leader in high-class garment products, An Phuoc need a big amount of finance Now, An Phuoc has faced with the high interest rate around 22-24 percent per year for any loans from bank Therefore, the cost of capital will increase fast and product price will also rise accordingly Under the circumstance, An Phuoc can transfer from the current private company model to joint stock corporation to draw attractive investment sources from local and foreign by selling the shareholders With the famous brand name, reputation company image, high quality product, broad distribution channel and high skill workforce, An Phuoc can take advantage to improve the capital source to develop strongly and fast in fierce competition environment of local market This is also the good investment tendency which has been happening in Vietnam market strongly in recent years 3.7.2 Human resource Policies related to human resource must be considered The company salary and reward system of managers should be more adhere to responsibility beside the position and working time as now It should concern career development through standardizing the requirements for each manager position and organizing the examination of upgrade skill degree for workers to stimulate the working ambition and company loyalty Use financial government supports to upgrade worker‟s educational level It still exits a majority of employees having low educational degree Company training courses just aim to equip employee operate skills rather than upgrade their educational degree This is a great huddle for company in terms of using effectively advance machinery It is necessary to change the common concept that there is no requirement of high educational degree when using advance equipment due to the operate simplicity Though having the simple operation, this machinery needs the high educational level to master Therefore, company technological capability is enhanced partly through the upgrading employee educational degree Government has financial support policies for textile-garment companies to increase CAPSTONE PROJECT REPORT GROUP - 108 - BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET technological capability This is a change for company to take opportunity to enhance their worker‟s educational level 3.7.3 Marketing solutions The company should pay more attention to improve and enhance marketing activities with a view to differentiate itself from others and explore new opportunities to expand its market An Phuoc company has large-scale production, it is not logical for the company only to serve a small group of customers Furthermore, the company has the full competency to produce the high quality product, which is still underutilized The marketing objectives of company should be: - To increase customer base thorough better awareness of the company - To expand its products lines into new segments - To consolidate and increase its market share in current markets and expand into new markets 3.7.3.1 Products An Phuoc Company should continue to maintain and consolidate its core competence in making shirt, vest, pant At present, according to sales manager of An Phuoc‟s sales department, there are only two companies which can be considered to be strong in making shirts, Vest and pant They are Viet Tien and Nha Be Once the reputation is established, the company can entice customers to try its other products The survey results reveal the weakness in designing of the company Enhance design skill to create more patterns suitable for Vietnamese customers Foreign garment products have some advantages of color, physical characteristics but limit the number of pattern Though patterns of company garment products still get the Vietnamese customer supports, this advantage may disappear due to the progress of competitors and the changes of customer‟s taste Thus, company must CAPSTONE PROJECT REPORT GROUP - 109 - BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET exploit their strength of design skill by enhancing it to create more patterns suitable for Vietnamese customers before their competitors The strongest market segment of An Phuoc now is the men‟s collection for entrepreneurs To enhance its competitiveness An Phuoc should expand its products lines, create more variation beautiful design for women and children Women entrepreneur segment market is also the very potential market for An Phuoc invest more considerably to explore This requires a overall product development strategy In addition, the company needs the policy for human resource, finance, even production organization because the company cannot use mass production in fashion garment making The children segment also represents another potential market The requirement for material used to make children clothing is not so high, so the company can use domestic materials The problems here are the variety and suitability with the variety of garment types which suit each group of junior customers Cooperation with other organizations should be established to collect the data about Vietnamese body size which significantly helps the company overcome the un-fitness of ready-made garment The market research also should be conducted in other main provinces in order to better serve the local customers with different needs and preferences Update database and product standard regularly to find the most appropriate technology and to increase product quality in order to compete effectively to foreign garment products Database is very important and effect greatly to the search process of technology transfer Company just competes effectively the foreign products through producing products which quality is similar or higher Therefore, the update database regularly will help company find the most appropriate technology to produce fabric products with the desire quality The update and revise of product standard are very necessary in order to provide better products and to satisfy day by day the higher requirements of customer CAPSTONE PROJECT REPORT GROUP - 110 - BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET Do regularly market research to know clearly customer‟s taste and changes Though Vietnamese customer‟s taste has not changed greatly in the present, it does not mean that there are no significant changes of customer requirements in the future With the increase of income and effected by the foreign fabric products and fashion trend, customers will become strictly day by day for diversification of pattern as well as product characteristics Therefore, the implementation of market research to know clearly customer‟s taste and changes is one of the prerequisite conditions to assure the long-term development of An Phuoc company 3.7.3.2 Price Keep setting the price policy according to product-quality leadership objective However, the company will offer many kinds of product in the future, so it should apply product-mix pricing and at the same time try to keep its position in the market An Phuoc produces high quality garment products Due to the extensive use of the technology and modern equipment that makes company difficult to reduce the production cost, the company should set the position as premium price for high product quality 3.7.3.3 Distribution channels The company should consolidate the existing distribution channels in HCMC, make them more effective and efficient in serving customers The company‟s inspection should be taken periodically in the city to eliminate the false products and ineffective shops Up to now, An Phuoc is the unique garment company which has no any agency in distribution An Phuoc has not used agency for distribution An Phuoc now has owned and managed the nationwide network of 70 shops at Hochiminh city, Hanoi, Haiphong, Danang, Cantho, Nhatrang, Vungtau and so on All shops are designed, decorated and managed by An Phuoc company with the unique signboard, inter-decoration, color, staff uniform upon the regulations of company CAPSTONE PROJECT REPORT GROUP - 111 - BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET All sales staffs will be recruited, trained and operated under management of company With this kind of distribution development policy, An Phuoc can supply the products directly to customers, listen and response the demands of customers accurately and effectively The An Phuoc company should continue to expand the distribution channels in the North and the Center At present, the company only has agencies in Hanoi and one in Central because they are the big consumption market for high quality products Under the difficult circumstance in finance and fierce competition, instead of investing big amount of finance of one shop, An Phuoc can step by step use the agency in distribution to save the cost and can exploit the advantage competitive points of home based agencies The key matter is that how An Phuoc can co-operate and manage properly and effectively to protect the reputation of An Phuoc brand name and mutual benefit 3.7.3.4 Promotion and Marketing organization A full-fledge and separated marketing department should be established and including a sub-function in the sales department of the company as depicted in the following figure Also there should a marketing research function and a geographical management to support its focus activities As a result, marketing and promotion activities of An Phuoc will be more effective and can boost the sales volume of product better and better especially in the current fierce competition environment of local market CAPSTONE PROJECT REPORT GROUP - 112 - BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET DIRECTOR V.Director of Production Product Design and Development V Director of Marketing Marketing Department Promotion & Advertisemen  Ads t  Trade fairs  Fashion shows  Merchandisi ng  Show room Sales Department Marketing Development Sales office Distribution  Marketing research  Long-term planning  Business development  Customer relations  Sales data  Agencies  Retailers  Factory Outlets Channels Southern region Northern region Central region Figure 3.2: Suggested Structure of the Marketing Department 3.7.4 Information Technology To support and enhance operational management, it is necessary for An Phuoc to apply information technology to management activities, production management as well as operation ERP (Enterprise Resource Planning) Computerized system is a useful and efficient tool to support operational management by managing areas such as business process implementation, accounting, managerial accounting, risk management, production management, inventory management, customer relationship management, etc Currently, not every company has had the ability to apply the ERP system into operational management For one reason, it is costly to deploy ERP system Furthermore, the business themselves have to make significant changes in terms of operational procedures according to international standards Besides, changes in terms of the company staff may happen An Phuoc has confidently invested on the CAPSTONE PROJECT REPORT GROUP - 113 - BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET system from the early days of its establishment and continued developing the system each year according to the growth of the corporation CONCLUSION Due to growing competition in garment industry from other low-cost suppliers, Vietnamese garment companies, which were formerly strong having advantages in subcontracting has to start to seek potential in the domestic as a way for survival Indeed, the local market can provide the Vietnamese garment manufacturers with sufficient demand, given all the advantages of a home maker and the capacity to satisfy the growing demand of the local customers from the existing wellequipped enterprises However, although having the strength in scale, technology, finance position and the support from government, they have faced many difficulties in serving local market The importation of the foreign clothing, smuggled products, and a lot of household tailors posed the problem for the garment companies in their attempt for survival and development Ten years ago, An Phuoc is a very strange name But at this time, An Phuoc is the number one choice of people who are officer in Ho Chi Minh city An Phuoc is associated with a product completely “West name”: Pierre Cardin From only a unit of processing for Pierre Cardin, An Phuoc has come a long way when get the franchise from Pierre Cardin Not only produce this product in Vietnam, An Phuoc also benefit in learning the secret of a leading brand of apparel and brought the application of An Phuoc company The important thing is standing next to the giant Pierre Cardin, An Phuoc has a strong position in the hearts of consumers with a sense is very Vietnamese In numerous garments of both Vietnam and abroad, the name of An Phuoc is a Vietnam did not make it worse in the selection of Vietnamese consumers We dream of and want to build habits of Vietnamese people use Vietnamese goods first Vietnamese enterprises themselves have a great sense of "Vietnam" The CAPSTONE PROJECT REPORT GROUP - 114 - BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET existence of a name is "West" is not decisive To honor the Vietnamese Vietnamese goods similar to the story of South Koreans in business at least our country would be given the honor Vietnamese users If just going to take care of the foreign service users have complaints banana style, delicious potato that they bring to the market, which is not good to stay home as rural people's psychology is not the foreign market, show only open the domestic market for the goods of other countries overrun Europe there is also the firms should consider In this time period, An Phuoc has asserted itself and achieved some significant improvements in Vietnamese textile industry It shows the ability of Vietnamese garment companies in terms of producing fabric products which quality are similar to the foreign ones with the reasonable price Along with other Vietnamese high product quality, kinds of garments made in An Phuoc have created customer belief and scrambled market from the foreign garment products As a result, it is formed the trend of using domestic high quality goods in Vietnam The typical success of An Phuoc has proved that a small company can use effectively and efficiently its limit resources to get competitive advantage through the grasp of opportunity and setting the right strategy to achieve its goals An Phuoc is a specific case It is a garment company with significant advantages in finance, technology, capacity and experience in making shirts, pants… The company enjoys many opportunities to develop in the domestic market because of the increasing disposable income and the trend of using ready-made garment of people The company is located in a big city in Vietnam where a large number of people are working at offices and other educational institutions who are likely to use ready-made garment However, An Phuoc lacks the capability and flexibility in designing new garment styles and an effective distribution channel Furthermore, like many other private garment companies the marketing activities of An Phuoc are still limited or not fully focused The competitive advantage that An Phuoc gains is just temporary due to the CAPSTONE PROJECT REPORT GROUP - 115 - BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET increase number of competitors producing similar high class products as An Phuoc Competitive pressure comes from not only private companies but also stateowned ones, which have the strength of capital As a result, it makes the time gap of launching new products between An Phuoc and their competitors shrinking day by day Therefore, it is necessary to have the suitable strategic changes to help company maintain their competitive advantage in the fierce competition Due to the limitation of time and scale of research, the shortage of information, the study can finish the setting business strategy in local market for An Phuoc company at corporate level, not for the business and functional units The researcher has solved the following points:  Analyze the marco and micro environment for An Phuoc company  Use the appraisal form with factory manager to collect related information and rate to evaluate the influence of external and internal factors affecting to the development of company  Use the IFE, EFE, SWOT to evaluate the influence of external and internal factors to company This is also the basement to plan a set of strategies of An Phuoc company  Use the CPM, SPACE, QSPM matrix to define the proper and attractive strategy among the feasible strategies for An Phuoc company They are the combination of three most effectiveness strategies include Market penetrating, Market development and Product development strategy This dissertation is the result of a researching process based on literature and management models included in the course of Global Advanced Master of Business Administration, which is provided by Griggs University (U.S.A) and Ha Noi National University; and on the real business context of An Phuoc company The analyses are provided by the current business information system and other related referencing materials which have been collected and selected during the process of completing this thesis Accordingly, the dissertation asserts that the conducted CAPSTONE PROJECT REPORT GROUP - 116 - BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET analyses have fulfilled the researching objectives set by the thesis‟ requirements In addition, the research findings are expected to provide practical business implications for the company for the coming business development phase CAPSTONE PROJECT REPORT GROUP - 117 - BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET REFERENCES David, F R (2003) Strategic Management, Concepts and Cases (9th Edition), New Jersey, Prentice Hall Espedal, B (2005) ‘Management Development: Using Internal or External Resources in Developing Core Competence‟, Human Resource Development Review, Vol.4, Iss 2; pg 136, Hannagan, T (2005) Management Concepts and Practices (4th edition), Harlow, Prentice Hall Johnson, G., Scholes, K., and Whittington, R (2005) Exploring corporate strategy, Text and cases (7th edition), Harlow, Prentice Hall Johnson, R L (2006) „Strategy, Success, a Dynamic Economy and the 21st Century Manager’, The Business Review, Vol.5, Iss 2; pg 23, pgs Luffman, G., Lea, E., Sanderson, S., and Kenny, B (1996) Strategic management, an Analytical Introduction (3re Edition), Oxford, Blackwell Thompson, J and Martin, F (2005) Strategic Management, Awareness and Change (5th Edition), London, Thomson Gratton, L, and Hailey, V H, Stiles, P and Truss, C (1999) Strategic Human ResourceManagement, Oxford: Oxford University Press Hendry, C and Pettigrew, A (1990) 'Human resource management: an agenda for the 1990s', International Journal of Human Resource Management, 1, 1, 17-44 Michael, A (2000) Strategic Human Resource Management: A Guide to Action, London: Kogan Page Kotler, P et al., Marketing Management: An Asian Perspective, Prentice Hall, Inc., 1996 Kotler, P., Marketing Management: Analysis, Planning, Implementation and Control, 8th edition, Prentice-Hall, Inc., 1994 CAPSTONE PROJECT REPORT GROUP - 118 - BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET McKitterick, John B., “What is The Marketing Management Concept?” The Frontiers of Marketing Thought and Action, Chicago: American Marketing Association, 1957, pp 71-82 Website: http://vietnam.vn/vietnam-enters-golden-population-structure-periodc1069n20110617114303468.htm http://tutor2u.net/business/strategy http://www.mindtools.com/pages/article/newTMC09.htm http://www.mindtools.com/ http://www.mba-tutorials.com/strategy/76-the-efe-matrix-external-factorevaluation-matrix.html) http://www.soopertutorials.com/business/strategic-management/478-how-todevelop-internal-factor-evaluation-matrix-ife-matrix.html) http://www.stfrancis.edu/content/ba/ghkickul/stuwebs/btopics/works/swot.htm http://www.maxi-edia.com/SPACE+matrix+model+strategic+management+method http://www.maxi-media.com/CPM model http://www.thepathfinder.com.vn http://www.tradingeconomics.com http://www.anphuoc.com.vn http://www.vinatex.com.vn CAPSTONE PROJECT REPORT GROUP - 119 - [...]... the company needs to develop a comprehensive strategy to compete and develop in the domestic market CAPSTONE PROJECT REPORT GROUP 8 - 13 - BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET INTRODUCTION Statement of the Problem Garment industry has always played an important role in supplying the clothes demand for mankind This industry has high speed change in technology and is labor intensive... UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET Objectives of the Study  To assess the opportunities and threats regarding the possibility of expanding market for the An Phuoc company  To assess the strengths, weaknesses, competitive competence, current sales and marketing activities, the target market and customer of An Phuoc  Based on the practical figures and data analysis, a proper business. .. Identification MATRIX ANALYSIS  Findings  Analysis RECOMMENDATIONS TO IMPROVE BUSINESS STRATETY TO IMPLEMENTATION Structure of Research Study CHAPTER 1: THE LITERATURE OF BUSINESS STRATEGY AND STRATEGIC MANAGEMENT CHAPTER 2: ANALYSIS AND ASSESSMENT ON CURRENT OPERATIONS SITUATION OF AN PHUOC COMPANY CHAPTER 3: BUILDING – PROPOSING SOLUTIONS FOR DEPLOYMENT BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET CAPSTONE... UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET CHAPTER 1: THE LITERATURE OF BUSINESS STRATEGY AND STRATEGIC MANAGEMENT 1.1 An overview on strategic management literature 1.1.1 Concepts of strategy Johnson and Scholes (Exploring Corporate Strategy) define strategy as follows: "Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation... want-satisfying products to target markets to achieve organizational objectives.” (Stanton, 1994) CAPSTONE PROJECT REPORT GROUP 8 - 34 - BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET “Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating, offering, and exchanging products of value with others” (Kotler, 1994) “Marketing... - BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET 1.1.3.1 Strategic Analysis This is all about the analyzing the strength of businesses' position and understanding the important external factors that may influence that position The process of Strategic Analysis can be assisted by a number of tools, including: 1.1.3.1.1 PEST analysis PEST Analysis is a simple but important and widely-used... according to its function  Constructing a system of supportive policies and plans of actions  Managing organizational resources in the long term: establishing and allocating resources basing on corporate demands, developmental stages, and levels of rarity, priority and recyclability CAPSTONE PROJECT REPORT GROUP 8 - 33 - BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET  Selecting and... 1.1.2 Strategy at Different Levels of a Business Strategies exist at several levels in any organization - ranging from the overall business (or group of businesses) through to individuals working in it Corporate Group Corporat e level Business Unit level Functional level Business Unit Business Unit Business Unit Operational management Human Resource Management Research and Development Marketing Research... long-term business planning on production time and venue, managing product quality and quantity, controlling implementation process, providing prompt adjustments if necessary, evaluating the outcomes, and enhancing systematic procedures 1.1.3.3.2 Marketing management There are many definitions of marketing: “Marketing is a total system of business activities designed to plan, price, promote, and distribute... the local company- made garment  An Phuoc has wide range of garment products, but only some kinds of them (shirts, trousers, kaki pants, vest) are chosen as representative for this research CAPSTONE PROJECT REPORT GROUP 8 - 16 - BUILD UP BUSINESS STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET The Conceptual Framework of Study COMPANY MISSION and GOALS EXTERNAL ANALYSIS Opportunities, threats INTERNAL ANALYSIS ... STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET Analyzing marketing opportunities Researching and selecting target market Designing marketing strategies Organizing, implementing, and controlling marketing... STRATEGY OF AN PHUOC COMPANY IN LOCAL MARKET “Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating, offering, and exchanging... strategy in local market of An Phuoc 77 2.2.1 The competition situation of garment in local market 77 2.2.2 The necessary of building the business strategy in local market of An Phuoc company 78 Chapter