BUSINESS STRATEGY OF ALPHANAM PAINTS FOR THE PERIOD FROM 2010 TO 2015

INTRODUCTION6CHAPTER 1: THEORETICAL BASIC OF BUSINESS STRATEGY81.1. OVERVIEW81.1.1. Definitions of strategy81.1.2.Strategic management processes91.2ENVIRONMENTAL ANALYSIS111.2.1. External environment analysis111.2.2 Internal environment analysis151.3. SWOT ANALYSIS231.4. DECISION OF STRATEGIES25CHAPTER 1: THEORETICAL BASIC OF BUSINESS STRATEGY81.1. OVERVIEW81.1.1. Definitions of strategy81.1.2.Strategic management processes91.2ENVIRONMENTAL ANALYSIS111.2.1. External environment analysis111.2.2 Internal environment analysis151.3. SWOT ANALYSIS231.4. DECISION OF STRATEGIES25CHAPTER 2: ACTUAL SITUATION ANALYSIS27OF ALPHANAM PAINTS272.1. INTRODUCTION272.1.1.General information of company272.1.2.Alphanam paints312.2. ACTUAL SITUATION ANALYSIS342.2.1. Macro environment analysis342.2.2. Industry environment analysis382.2.3. Competitor environment analysis422.2.4. Internal environment analysis452.3. PART CONCLUSIONCHAPTER 3: DECISION ON BUSINESS STRATEGY ANDRECOMMENDATIONS FOR THE PERIOD 2010 TO 2015

BUSINESS STRATEGY OF ALPHANAM PAINTS FOR THE PERIOD FROM 2010 TO 2015 ACKNOWLEDGEMENT We also would like to express our thanks to the people who has helped and supported us during completion of this report, especially to ALPHANAM’s leaders and business department of paints who freely and warmly provided us the trust information of company Finally, we would like to commit that, the capstone project report stated below had been honestly completed by all of our group’s members TABLE OF CONTENTS INTRODUCTION .5 Rationales Objectives of research Limitation and methodology of research Significance of the research Report structure CHAPTER 1: THEORETICAL BASIC OF BUSINESS STRATEGY .8 1.1 OVERVIEW .8 1.1.1 Definitions of strategy .8 1.1.2 Strategic management processes .9 1.2 ENVIRONMENTAL ANALYSIS 11 1.2.1 External environment analysis 11 1.2.2 Internal environment analysis 15 1.3 SWOT ANALYSIS 23 1.4 DECISION OF STRATEGIES 25 CHAPTER 2: ACTUAL SITUATION ANALYSIS OF ALPHANAM PAINTS 26 2.1 INTRODUCTION 26 2.1.1 General information of company 26 Organizational structure 28 2.1.2 Alphanam paints 31 31 2.2 ACTUAL SITUATION ANALYSIS .34 Page - 2.2.1 Macro environment analysis 34 2.2.2 Industry environment analysis 38 2.2.3 Competitor environment analysis 42 LIST OF REFERENCES .62 Table 2.2.a: Market size and Players on decorative paints .44 2.2.4 Internal environment analysis 44 2.3 PART CONCLUSION 47 CHAPTER 3: DECISION ON BUSINESS STRATEGY AND RECOMMENDATIONS FOR THE PERIOD 2010 TO 2015 .48 3.1 SWOT ANALYSIS 48 3.2 COMBINATION STRATEGIES 48 3.2 RECOMMENDATIONS FOR THE PERIOD 2010 TO 2015 50 3.2.1 Actual market analysis 50 3.2.2 Redefine the target and strategies: 55 3.2.3 Corporate-level strategies: .58 CONCLUSION 60 Page - LIST OF ABBREVIATIONS Abbreviations AFTA ASEAN APEC ASEM CEPT CPI GDP GREAT JSC PEST SWOT WTO Full names ASEAN Free Trade Area Association of South-East Asian Nations Asia – Pacific Economic Cooperation Forum The Asia-Europe Meeting Common Effective Preferential Tariff Consumer Price Index Gross Domestic Product Gain – Risk – Expense – Achievable – Time Joint Stock Company Politics – Economy – Society – Technology Strengths – Weaknesses – Opportunities – Threats World Trade Organization Page - LIST OF TABLES No 1.1 1.2 1.3 2.1 2.2.a 2.2.b Names Example of SWOT analysis Combination strategies GREAT model Finance situation [source: ALPHANAM] Players and locations of Paint industry Market size and Players on decorative paints Page 24 25 26 29 43 43 3.1 3.2 Types of paint and market forecast Price lists of competitors 49 53 3.3 Time Table 58 LIST OF FIGURES and GRAPHICS No 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 Name of figures, diagrams, graphs Three main achieves of strategic management process Model of strategic management processes Model of strategic management processes Five forces Model General components of internal environment analysis Model of Discovering Core Competences The value chain model Generic building blocks of competitive advantage 2.1 2.2 2.3 2.4 2.5 2.6 2.7 3.1 3.2 Capital circulation chart General organization Chart of finance characters Paint factory Paint industry’s chain Five forces Model Market share of players Purchasing decisions of paint Prices Decorative paint ranges Page 10 11 12 13 16 16 19 22 28 29 30 31 37 40 44 54 58 INTRODUCTION Rationales Nowadays, the economy of Vietnam is generally joining to globalization, strategic management plays an important and undisputable role in creating value for stakeholders Due to the competitive environment of rapid change and aligned Page - constant need for growth and development, companies have to exploit organic sources of expansion as well as external ones in order to compete As our group has a member who is a manager of ALPHA NAM JSC, the selected subject of the report is: “Business Strategy of Alphanam paints for the period 2010-2015” Objectives of research The report aims to introduce international standards and practices in strategic management and apply them into business strategy of Alphanam paints in order to provide a better understanding with following objectives:  Providing theoretical basic of business strategy  Providing the scientific analysis of actual situation of the firm  Providing the evaluations and solutions for developing business of the firm for the period of 2010 to 2015 Limitation and methodology of research With a limited duration for preparing and completing the report, the subject only focused on the matter of “business-level strategy” for ALPHANAM Paints The methodology practiced in the report is a combination of deduction approach, qualitative method, case study strategy with the following methods:  Surveying and collecting data provided by firm’s managers and staffs  Analyzing scientifically the environment according to the knowledge acquired from MBA course Page - Proposing, comparing and suggesting some solutions and recommendations Significance of the research The report has made some certain contributions to the economy in generally and the enterprises in particularly  To the economy: the study shows nature of strategic management and its influences to the overall economy in terms of creating value  To the enterprises: the study provides them a better understanding of why they should take strategic management process, how it occurs and how managers can effectively manage it in order to make the strategies successful Report structure The report is divided into four main parts including introduction, content and conclusion parts  Introduction  Chapter 1: Theoretical basic of business strategy  Chapter 2: Actual situation analysis of Alphanam paints  Chapter 3: Solutions and recommendations of business strategy for the period 2010 to 2015 Page - CHAPTER 1: THEORETICAL BASIC OF BUSINESS STRATEGY 1.1 OVERVIEW 1.1.1 Definitions of strategy Strategy is a word with many definitions and all of them are relevant and useful to those who are charged with setting strategy for their corporations, businesses, or organizations Some definitions of strategy as offered by various writers are briefly reviewed below  Alfred D Chandler, Jr defined in 1962: “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 for carrying out these goals”  Kenneth Andrews defined in 1980: “the pattern of decisions in a company that determines and reveals its objectives, purposes or goals, produces the principal policies and plans for achieving those goals, and defines the range of businesses the company is to pursue, the kind of economic and human organization it is or intends to be, and the nature of the economic and non-economic contribution it intends to make to its shareholders, employees, customers, and communities.” In 1980, Michael Porter defined competitive strategy as “a broad formula for how a business is going to compete, what its goals should be, and what policies will be needed to carry out those goals.”  In 1994, Henry Mintzberg, provided definitions of strategy in five Ps: Plan, Ploy, Pattern, Position and Perspective  In 1980, Johnson, G and Scholes, K defined strategy as “the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources Page - within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations" Finally, after MBA course, a provisional definition of strategy has been simply found out as: “a coordinated series of actions which involve in the deployment of resources to which one has access for the achievement of a given purpose.” 1.1.2 Strategic management processes Academically, strategic management process involves the full set of: Figure 1.1: Three main achieves of strategic management process [Source: Slide No.3 of - session 1: GU’s program – Strategy Management] Actually, strategic management process requires a firm to achieve:  Strategic Competitiveness: Achieved when a firm successfully formulates and implements a value-creating strategy  Sustained Competitive Advantage: Occurs when a firm develops a strategy that competitors are not simultaneously implementing and provides benefits which current and potential competitors are unable to duplicate  Above-Average Returns: Returns in excess of what an investor expects to earn from other investments with similar risk Page - The flow chart of process defines three main stages as below: Figure 1.2: Model of strategic management processes [Source: Slide No.5 - session 1: GU’s program – Strategy Management]  Input: Analyzing the environment and defining mission and goal  Strategic actions: Including strategy formulation and implementation  Strategic outcomes: Above-average returns The mission statement describes how a company intends to incorporate stakeholders’ claims into its strategic decision making and thereby reduce the risk Page - 10 CHAPTER 3: DECISION ON BUSINESS STRATEGY AND RECOMMENDATIONS FOR THE PERIOD 2010 TO 2015 Internal Factors 3.1 SWOT ANALYSIS Positive Negative Strengths Weaknesses S1: Strong Finance W1: Non reputable brand name in S2: Stable Organization paint market – New entrant S3: Good Infrastructure W2: Poor distribution network in the S4: Modern production line big cities S5: Good logistics system W3: Weak marketing External Factors S6: Good Management Opportunities Threats O1: Supporting rule from T1: CPI is high and exchange rate is government to local manufacture moving immeasurably O2: Market is booming T2: Threat from new entrant is high O3: Threat from substitute T3: Competitors are strong with products is low reputable brands and involved into paint market for a long time Table 3.1: SWOT analysis 3.2 COMBINATION STRATEGIES The combination strategies are stated in the below matrix Page - 48 Company Environment Strengths Weaknesses S1: Strong finance W1: Non reputable brand S2: Stable organization name in paint market – New S3: Good infrastructure entrant S4: Modern production W2: Poor distribution line network in big cities S5: Good logistics system W3: Weak marketing S6: Good management Combine SO strategies Speed up marketing O1: Supports from programs, approach government to local customers to enlarge the manufacturers market share O2: Market is booming Invest into R&D and increase the production O3: Threat from capacity with high quality substitute products is low products Opportunities Threats Combine strategies Speed up marketing programs, approach customers to enlarge the market share Reduce the EXW cost for competitive discount on distribution price scheme and use costleadership strategy T1: CPI is high and exchange rate is moving immeasurably T2: Threat from new entrants is high T3: Competitors are strong with reputable Combine WO strategies Speed up marketing programs, approach customers for higher market share Employ more skilled sales managers and staffs Implement more training programs Combine WT strategies Speed up marketing program, approach customers for better market share 2.Employ more skill sales managers and staffs Reduce the EXW cost for competitive discount on distribution price scheme and use cost-leadership strategy brands and involved into paint market for a long time Table 3.1: SWOT analysis matrix Page - 49 From above-mentioned results, it is easy to find out the strategies of the firm as belows:  Speeding up marketing programs and effectively approaching customers for higher market share  Improving resources for a short-term cost-leadership strategy 3.2 RECOMMENDATIONS FOR THE PERIOD 2010 TO 2015 As shown on Table 2.2 (Market survey report 2008- Pacific Paint), ALPHANAM paint is ranked at the 8th place of the players in Vietnam paint market and the nd place of local players (equivalent to Dong Tam) But the considerable matter is that the market share is nearly 3% of the total market With the firm’s strengths and weaknesses, the opportunities and threats from external environment analyzed above, we would like to propose following main recommendations for the market development as below 3.2.1 Actual market analysis The purpose of this section is to study how the firm defines and implements their marketing strategies in order to gain more market shares, make more profits and achieve higher level of customer loyalty For paint products, marketing is a key of success Thus, the core objective of marketing strategies for Alphanam paints is to gain a higher market share Page - 50  Market structure and market size forecast: Segments Decorative Enamel Emulsion Marine and Protective coatings Industrial coatings Traffic coatings Others TOTAL (MT) 2006 2007 2008 2009 2010 (f) 2015 (f) 25,000 121,00 16,500 30,000 150,00 20,000 35,000 177,00 25,000 38,500 194,70 27,500 42,350 214,17 30,250 55,055 278,42 39,325 42,000 11,500 4,000 220,000 49,000 16,000 5,000 270,000 58,000 19,000 6,000 320,000 63,800 20,900 6,600 352,000 70,180 22,990 7,260 387,200 91,234 29,887 9,438 503,36 Rate % 66% 8% 18% 6% 2% 100% Table 3.2: Types of paint and market forecast [Source: ALPHA NAM Paint / marketing report 6-2009] We are going to apply the 4Ps mix marketing strategy model to analyze Vietnam paint and coatings market as follows:  Products:  Availability of a wide range of colors with computer soft wares can help customers mix colors on virtual houses before they make choice  More than 200 brand names are available; most of them are decorative paints (more than 60%); with a variety of product ranges Many types of paints from average quality (mostly Oranges) to high quality (ICI) are available for all types of customers Hence, ALPHANAM paint has to position its quality of products at the middle of their range  Marketing staffs are available to consult on color  Alphanam paints are environment-friendly targeted  Research and Development has to improve products’ quality and find out new colors Page - 51 Three strategies for products:  Alphanam paints are in a variety of brands in order to meet the needs of different market segments  Alphanam paints are attached to good quality products  Alphanam paints brings diversifying features to the end-users The outcomes are benefits offered that customers have a variety of brand choice and different functions meeting the needs of different individual consumers  Price:  A wide range of products varying from premium to high quality are available on the market; price is also diversifying (Refer to price list of selected products below)  End-users usually get a discount of VND5,000 to VND10,000 per pack (USD0.3 to USD0.6) (Refer to Table 3.3 below)  Retailers receive commission on the total units they have sold to end- users Strategies for pricing:  Pricing generates turnover for paint companies It covers the costs to produce, distribute and promote the coating products Discount policy in the paint industry is very important Usually updating and adjusting several terms of the price list is an important strategy  For short term to entry the market: Leading on price is a key of competitive strategy  Place and Time:  Retailing stores are available nationwide Page - 52  Each store specializes in selling a kind of product supplied by a particular manufacturer (e.g Expo, Dulux etc.); besides, other brands are also displayed, but in smaller quantities  Customers come to the stores to select and have the products delivered to their homes/ construction sites  Information of products can also be collected on websites mentioned in the previous parts; and customers can also order the products through telephone Strategies: Paint & coatings products in Vietnam is indirectly distributed, so Alphanam paints are mainly delivered from manufacturers to end-users through retailers and painters  Promotion: Mix marketing  The firm will launch big advertising campaigns on TV with celebrities and well-designed, interesting clips, on newspapers and on the internet  The firm will also offer sales promotion including discount and commission policies  The firm will implement public relation activities including sponsoring significant events and doing social and charity works Price list of competitors: BRAND PAINT TYPE Exterior – Premium Exterior – Premium Exterior - Mid range AKZO BRAND NAME SANDTEX SANDTEX SANDTEX PACKING LTR/KG 1 PRICE/PACK VND USD 350,000 21.88 125,000 7.81 145,000 9.06 LEVIS LATEX 99,000 6.19 LEVISTEX-EXTRA LEVIS SATIN 5 200,000 417,000 12.50 26.06 Page - 53 Interior – Premium Interior - Mid range Alkyd Exterior Primer WB Interior Primer – WB Primer - Oil base Fungi treatment Exterior – Premium Exterior - Mid range Interior – Premium Interior - Mid range Alkyd ICI Exterior Primer WB Interior Primer WB Exterior – Premium Exterior - Mid range Interior – Premium JOTUN ORANGES Interior - Mid range Alkyd (wood and metal) Exterior & Interior Primer - WB Interior Primer WB Alkyd primer Exterior - Mid range Interior - Mid range Alkyd (wood and metal) Primer LEVISSILK LEVISLUX LEVISMUR EXTRA LEVIS FAMY LEVIS LEVIS ALKYD MATT 5 5 3 370,000 289,000 169,000 103,000 156,000 157,000 23.13 18.06 10.56 6.44 9.75 9.81 LEVISFIX in 305,000 19.06 LEVISFIX CK LEVIS FIXING PRIMER LEVIS ANTIMOSS Weathersheld 5 5 216,000 295,000 114,000 420,000 13.50 18.44 7.13 26.25 Weathersheld-Waterproof 440,000 27.50 Maxilite Exterior Dulux in Dulux Easy Clean 18 5 580,000 390,000 210,000 36.25 24.38 13.13 Maxilite Interior Maxilite (Colors) Maxilite (White) Satin 18 3 440,000 150,000 160,000 180,000 27.50 9.38 10.00 11.25 Weathershield – Ex Weathershield – In 5 260,000 195,000 16.25 12.19 Jotashield Jotashield Flex Jotatough (White) Jotatough (Colours) Strax Matt Majestic Majestic Optima Jotaplast (White) Jotaplast (Colours) 5 18 5 5 18 454,000 570,000 760,000 237,000 239,000 415,000 510,000 464,000 149,000 28.38 35.63 47.50 14.81 14.94 25.94 31.88 29.00 9.31 Gardex Jotashidle Primer 07 Cito Primer 09 5 441,000 290,000 433,000 27.56 18.13 27.06 Jotasealer 03 Alkyd Primer Viniguard SG 88 (wood) 5 220,000 405,000 319,000 13.75 25.31 19.94 Expo Ex Expo In Expo Easy 18 18 18 450,000 280,000 250,000 28.13 17.50 15.63 Expo Lucky 18 150,000 425,000 9.38 26.56 Page - 54 Alkyd - Oil based Nippon Tilac Nippon Bilac Nippon Matex NIPPON Acrylic Copolymer Emulsion Modified Acrylic Emulsion Acrylic Plastic Elastomeric Nippon Vatex Nippon hitex Nippon Super Matex All in Soft Matt Super Easy Wash 0.9 3.5 5 18 17 2.72 9.97 3.50 16.31 6.94 28.88 4.53 16.28 5.31 25.94 18 18 5 43,500 159,500 56,000 261,000 111,000 462,000 72,500 260,500 85,000 415,000 1,425,0 00.00 192,000 632,000 72,000 350,000 175,000 17 609,000 38.06 89.06 12.00 39.50 4.50 21.88 10.94 Table 3.3: Price lists of competitors [Source: ALPHA NAM Paint / marketing report 2009] 3.2.2 Redefine the target and strategies:  Redefine the mission for the period 2010 to 2015 The target should be focused accordingly to the company’s mission and should be defined in volume of market share: “ALPHANAM PAINT SHALL BE IN THE ST RANKING OF LOCAL MANUFACTURERS AND GAIN 15% MARKET SHARE IN 2015”  The specific matters of paint industry should be considered: Purchasing decision of paints in Vietnam market: Page - 55 Figure 3.1: Purchasing decisions of paint [Source: Market survey report 2008 - Pacific Paint] Specific Consumer Behaviour  Typical repainting cycle is about years and most of the painting is done in cold weather because painting season is influenced also by events like Tet holiday  Painters are key influencers in buying paint (but for big projects a contractor are signed for specified paints) That means, the end-user is not buyer  The market is more price conscious than quality conscious (SOP is also a big factor in getting big projects)  Old ways of painting are still being observed by painters  Gloss of the paint is a measure of quality for painters  Distributors purchase by cash and have no capacity to get big projects in order to have low capitalization Page - 56 Competitive Advantage: Cost leadership  Detailed Strategies are suggested: Marketing:  Creation of Painter’s Pool Program  Product Presentations for Painters  Marketing Coverage for Specialists – Architects and Engineers o Get specifications o Product information dissemination o Build good rapports  Market Coverage for Institutional Accounts like: Hospitals, Commercial Establishments, Schools, Malls, Hotels, Private Companies Sales:  Chanel and dealers setting should be geographically-based  Sales department of firm should only take care of big projects  Pricing Scheme (Incentive and Discount Schemes)  Product Information Dissemination for dealers – Product Presentations  Active Coverage of Dealers’ Concerns  Sales Return Policy  Sales Credit Terms and Policy  Update of technology (Mix and Match)  Sales Support Logistics: The firm will look for more suppliers of express services like the existing one -DHL Production: The firm will share technology to distributors in colorant mixture machines Page - 57 3.2.3 Corporate-level strategies:  ALPHANAM paint division should be separated into an independent company In that case, company could get the finance supports from preferential policies for investment such as cost of land, income and other taxes …These advantages will bring to the company a more flexibility in pricing  The positions such as executive managers should be internationally employed  The firm will hasten the process of Pacific-ALPHANAM joint venture  The firm will increase the capacity of production line accordingly to the market share  The product ranges should be fully covered (See details in the below figure) Figure 3.2: Prices of decorative paint ranges [source: Pacific Paint] Page - 58 Targets Year 2010 Set up an independent paint company Start Market share (%) 2011 2012 2013 2014 2015 5% 7% 9% 11% 13% 15% Ranking in market 8 Ranking in domestic players 2 1 1 Joint venture company in operation 15% market share 1st ranking on local players Time table: Start Table 3.4: Time table Page - 59 CONCLUSION Strategic management is an immense business science For the limitation duration of research and working together, our group has strived to complete the capstone report with many passions Do hope that, our capstone report could meet requirement of program and may give some useful ideas to the managers of firm studied Page - 60 Page - 61 i LIST OF REFERENCES Strategic Management course book, HR Management, Financial Management, Marketing Management by Advanced Global Master of Business Administration The "Strategic Management" by PGS.TS.Le The Gioi; TS Nguyen Thanh Liem; Th.S Tran Huu Hai - Publisher of Statistics, 2007 The Executive Guide to Strategic Planning, Below, P J / Morrisey G L / Acomb B L., Jossey-Bass Inc Publishers 1987 Business Policy and Strategic Management Glueck, W F / Janch L R., , International Student Edition, 1986 Strategic Management Greenley G E., Prentice Hall, 1989 "Effective Business Strategy " - Harvard Business Handbook - Publishing House of Ho Chi Minh City MBA for Leadership, author Steven Silbiger, General Publishing House of Ho Chi Minh City Articles, opinions of respected experts on the Intenet and other sources Some study themes about business strategy of the MECOJSC Company Internet Alphanam Joint Stock Company Homepage (2009), [on-line] Available: http://www.alphanam.com.vn [2009, October] ALPHA NAM Paints documents [...]... a position to demand low prices from the company or when they demand better service which can increase operating costs The bargaining power of suppliers: Suppliers can be viewed as a threat when they are able to force up the price that a company must pay for its inputs or reduce the quality of the inputs they supply, thereby depressing the company’s profitability The force of supplier to make demands... competitors  Customer responsiveness: A company must be able to do a better job than competitors of identifying and satisfying the needs of customers Achieving superior quality and innovation is an integral part of achieving superior customer responsiveness Another factor that stands out in any discussion of customer responsiveness is the need to customize goods and services to the unique demands of individual... opportunities, but also a lot of risks Board of directors of the company decided to invest into manufacturing division for a long term business according to recommendations of big stock-share holder from Japan At the same time, a reputable manufacturer – Pacific Boysen invited the company to involve in a joint-venture manufacturing construction paints But that was a long Page - 32 story, the project was bared... materials The trend for expenditure on paint and coating products is forecasted to be on the rise as demand for construction is significantly increasing In 2000, Vietnam’s paints consumption was 62,000 tons and has been surging to reach the estimated amount of about 300,000 tons in 2010  Technological factor: In the era of new media and cutting-edge technology, there are more channels from which customers... itself from its less responsive competitors that enables a company to build brand loyalty and to charge a premium price for its products Page - 22 Together, these four factors – efficiency, quality, innovation, customer responsiveness – help a company to create more values by lowering costs or differentiating its products from those of competitors, which enables the company to outperform its competitors... can affect the height of barriers to entry and, as a result, radically reshape the structure of an industry Page - 12  Demographic factor: The changing composition of the population is another factor in the macro-environment that can create both opportunities and threats  Global factor: In the globalization context nowadays, the competitiveness is increasingly tighter A firm has to change to suitable... Entry of potent new competitors Loss of sales to substitutes Slowing market growth Adverse shifts in exchange rates & trade policies Costly new regulations Vulnerability to business cycle Growing leverage of customers or suppliers Shift in buyer needs for product Demographic changes Table 1.1: Example of SWOT analysis To develop strategies that take into account the SWOT profile, a matrix of these factors... important factors in the macro economy are the growth rate of the economy, interest rates, currency exchange rates, and inflation rates  Social environment consists of customs, lifestyles, and values that characterize the society in which the firm operates Social components of the environment influence the ability of the firm to obtain resources, make its goods and services, and function within the society... considered for the strategy of firm: Page - 24  S – O strategy: pursues opportunities that are a good fit to the company’s strengths  W – O strategy: overcomes weaknesses to pursue opportunities  S – T strategy: identifies ways that the firm can use its strengths to reduce its vulnerability to external threats  W – T strategy: establishes a defensive plan to prevent the firm’s weaknesses from making... individual customers or customer groups An aspect of customer responsiveness is customer response time, which is the time it takes for a good to be delivered and a service to be performed Besides quality, customization, and response time, other sources enhance customer responsiveness including superior design, superior service, superior after-sale service and support All these factors allow a company to differentiate