LUẬN văn hoàn thành chiến lược kinh doanh của công ty PC VIGLACERA thăng long

THESIS COMPLETION BUSINESS STRATEGY FOR VIGLACERA THANG LONG J.S.C PERIOD FROM 2015-2020 TABLE OF CONTENS CONCLUSION 72 INTRODUCTION The theme of Topic “Completion Business Strategy of Viglacera Thang Long Ceramic tiles Joint Stock Company in period of 2010- 20015” The reason for choosing the Capstone With achievements through over 20 years innovating and integrating, Vietnam’s Economics has many changes, We are merging with international Economics step by step, contracting economical agreement, bilateral and multilateral trade with countries in the world and area, participating in AFTA, ASEAN, APEC, ASEM, WTO…Now, Vietnam belongs to group of development Economics with highest growth rate in the world Vietnam is one of investment places where global businessmen are very interested Government gives many polices to encourage and support Vietnam business in order to raise competition ability, merger and development Especially, Government encourages the group of sectors have potential development and export such as branch of farming, handicraft, maritime products, building material production… Beside advantages of our country development trend and merger, Vietnam Businesses have to face with difficulties because the change is faster and faster of socio-economic environment, international competition, and global economic crisis Viglacera Thang Long is a company which produces and carries on business building material In the past time, beside big efforts to maintain and develop, Viglacera Thang Long Ceramic tiles JSC also meet not few difficulties in global finance – economic crisis from 2008 – 2009 Proceeding from that practice, we can realize that planning for perfecting business strategy with purpose using resources effectively to explore opportunities, limit risk in present period and next years With the reasons, the group of authors chose theme: “ Completion of business strategy of Viglacera Thang Long ceramic tiles Joint Stock Company in period of 2010- 20015” in order to make the theme Capstone for both group and Viglacera Thang Long Ceramic tiles JSC Aim of research Basing on elementary theory about strategy management, through the results from analyzing outside factors which influence to company, thanks to identify opportunities, risk; combine to analyze actual situation inside factors company to find strengths and weaknesses The group of research hopes to give aim and proposal strategy to develop business production so that more suitable for Viglacera Thang Long Ceramic tile JSC in period of 2010 – 2015 Since setting up methods to carry out strategy effectively Method of research Basing on researching inside and outside environment which influence to company, also assessing practical results of business production in period of 2006 – 2009, the group of research analyses present strategy and give a more suitable strategy that base on perfecting strategy of Company in present period, When international Economics has many complex changes, inside practice company also has many difficulties Data resource of research Using primary and ancillary data from reports which assess business production of Viglacera Thang Long Ceramic tile JSC Using secondary data of the reports of Viglacera Corporation and It’s Branches, Sources Data from Vietnam building ceramic association (VIBCA) and Ministry of Construction Using information from the internet, newspapers and other valuable resources Meaning of the Capstone In the environment of integration economic at present market, the Vietnam enterprises face many difficulties and challenges vital Building a strategy for each company to survive and develop is a practical demands and inevitable Capstone “Completion business strategy of Viglacera ThangLong JSC in the period from 2010-2015” is made on the basis of survey and assessment practices and by responsible persons will surely have practical and useful value for company in the near future Structure of the Capstone The Captsone include The Introduction and three main chapters : Chapter I: The theoretical basis to etablish business strategy for the Company Chapter II: Analyze of the real situation and business strategies of Viglacera Thanglong JSC in the period from 2006-2009 Chapter III: Completion Business strategies for Viglacera Thang long JSC in period of 2010-2015 - The conclusions - recommendations: We have tried to the best to complete this thesis but surely it can’t avoid certain deficiencies cause the limit of time and scope So we look forward to receiving the comments of your sincere teachers and students to perfecting this thesis, aims to help companies build the right strategy and to operate effectively the business strategies in the next period CHAPTER I: THE THEORETICAL BASIS TO ESTABLISH BUSINESS STRATEGY FOR THE COMPANY 1.1 The nature of business strategy 1.1.1 The concept of the strategy Business strategy had been long time ago and has the meaning as “Science on definition and management of corporate operations” (by Webster’s New World) This term has resource from military Day by day when economy has been developed military term is used more in business We can introduce some of definitions of strategy as followings: - “Strategy is a long trend and a long scope of work of corporation in order to seize competitive opportunity for corporation by determining its resources in changeable environment in compliance with market demand and in satisfaction of concerned parties’ hopes ” (Johnson G , Scholes K , 1999, Exploring Corporate Strategy 5th Ed Prentice Hall Europe) - “Strategy is one of complicated actions in order to mobilize corporate resources to achieve a determined target” (GaMBA, 2009, Text Book on business strategy, Definition of strategy, Page 1) - “ Strategy is to determine long –term corporate targets , to select method or plan of implementation and distribution resources necessary for achieving that target” (Harvard University definition) There are a lot of such definitions because strategy has a large concept with complicated meaning However, strategy can be recognized by certifying its character and by distinguishing strategy and tactics • By characters, strategy has main following contents: + Long-term missions that company wishes to achieve + Setting-up and selecting the solutions for achieving mission + Implementing and distributing resources for mission achievement Corporate business strategy is master action program to focus on mission achievement Strategy does not define exact method to achieve the mission, because this is the target of other supplemented programs Strategy makes only the frame of guidance on mind and action for corporate management leaders • By level, in any business corporate, strategy has some different levels:, + Corporate strategy : is at corporate level to focus on master mission with whole corporate scope , satisfying expectations by owners of capital contribution + Business strategy: is in relation with how corporation can compete successfully in the market + Organization strategy: is strategy supported to corporate and business strategy achieving the mission based on recourses, procedures, personnel and other necessary skills + World-wide strategy (international business) – is a selection, facing to international business when corporate operates multiple business outside its border In this capstone project it is used other concept “ strategic management”: How strategy should be managed ? We would like to explain more in the Figure.1.1 as below : Determine Mission and Vision External Analysis (Opportunities & Threats) Internal Analysis (Strengths & Weaknesses) Determine the Main Targets Set-up strategy on levels of - Corporate leader - Marketing network - Government authority - Global worldwide Define and Distribute the sources Implement the strategy on actual business to reach the integration Corporate Structural organization & internal control Figures 1.1: Process of managing the strategy 1.1.2 The meaning of establish the business strategy Setting up business strategy is one of the most important activities managed by the corporate leaders This gives to corporate the best benefits, such as: - Define exactly the corporate mission in every business period; Support - corporate to have a future trend for achievement of targeted mission Help corporate leaders to see opportunities and challenges from outside, to know the corporate strong & weak point , to forecast the changes in the future and to have possible solutions for competing and satisfying with new - business conditions Help corporate to control and use effectively all resources , to promote the - most of corporate abilities for development Help corporate to distribute reasonable resources in every period, to improve - corporate business result Improve the corporation and agreement between company leaders to get the - targeted mission Help corporation to increase human resource productivity, increase sales revenue , improve corporate management, and minimize the risks and stop difficulties may occur with corporation We can conclude that business strategy can help corporate leaders to define the mission and vision also ability to set up stable competitive opportunity 1.1.3 Process of establish the business strategy Setting up business strategy is a procedure of business definition It’s summarized definition of business strategy as Figure 1.2 below : Define the Strategy Determine the functions and tasks Evaluate external environment Macro Environmen t Industry Environme nt Evaluate Internal environment Analyze and choose the Strategy Figures 1.2 : Procedures of determining strategy * Definition of corporate tasks and functions Firstly, this is to define corporate task and function , including mission and goal Mission: define exactly corporate problems and show how to - Vision: it’s mission detailed by general goal , having trust on corporate future - Strategic target: define the corporate tasks , and other goals that corporate hopes to achieve in medium and long term plan Based on determining corporate mission, we should have overall general review of concerned issues and separate them by group as mentioned in this below Figures : Figures 1.3: Corporate and factors related Econom y ScienceTechnol ogy Human resoure Manuf acturin g Politica l Marke ting Corpor ation Natural conditio n manage ment Culture -Social finacial R&D Interna tional Law Populat ion Factors that can effect to corporate business are defined in two groups: (i)environment outside corporation and (ii) environment inside corporation * Determination, Analysis of outside environment : The second group of procedures of setting up business strategy is to analyze environment outside corporation The goal of this analysis is to certify opportunity and risk from outside , including analysis of environment macro and micro and industry environment in which the corporation has business * Determination, Analysis of inside environment: The third group of procedures of setting up business strategy is to analyze environment inside corporation in order to find strengths and weaknesses We 10 • Experience and skillful labor force • Capability of research and development, creativity • Effective quality management • Good relationship with suppliers and buyers • Good distribution network, capability of exporting W – Weaknesses • Strategy is not suitable and flaxible • High products’ cost price • Machines and equipments are still not running at maximum capacity • Not yet professional analysis on market • Sale promotion not effective yet • Low averages selling price Low profit • Pending Receivable are too high • Weak finance background • Fairly low production scale and low market share Core capabilities are : - Advanced production technology and high quality and differentiated products Brand name reputation - Experience and skillful, Capability of research and development, creativity labor force - Good relationship with suppliers, good distribution network Core value is: - Quality and differentiates in Products 61 CHAPTER III: COMPLETION BUSINESS STRATEGY FOR VIGLACERA THANGLONG IN THE PERIOD 2010-2015 3.1 Vision, mission and objectives 3.1.1 Vision : Sustain the company’s position among Vietnamese top 10 manufacturers of materials for construction 3.1.2 Mission : - Constinuously update and innovate production technology in order to - insrease products’ quality Atemp to lift up the company’s image and reputation - Commit to supply high quality products at reasonable prices to provide more value to customers 3.1.3 Objectives : a) Long-term objectives - Increase market share from 3% currently up to 5% in 2013 by increasing - production output to 12 million m2/year Increase revenue up to approximately 550 billion VND/year in 2013 by both increasing of sale volume and re-structuring selling price 62 - Change all production to high class products by 2015 b) Sort-term objectives : - Increase the volume of high-ranked products from about million m2/year currently up to 1.5 million m2/year in 2010 and to million - m2/year in 2011 Reduce the pending receivables to 45 million VND by the end of 2010 - and to 38 million VND by the end of 2011 Recover the rate of equity in total assets back to about 25% by liquidate the ineffective assets and commercialize the existing real estate, such as staff’s dormitory below: No Items Capacity (1,000 m2/year) Sale volume (1,000 m2/year) Revenue (Mill Vnd) Profit (Mill Vnd) Labor force (person) Labor Income (ill Vnd/person) 2010 8.000 2011 8.500 2012 10.000 2013 2014/15 12.000 12.000 8.000 8.500 10.000 12.000 440.000 12.000 470.000 560.000 700.000 700.000 18.000 24.000 30.000 50.000 50.000 630 630 750 870 870 3.0 3.5 4.2 4.5 4.8 Figure 3.3: Viglacera ThangLong Objectives, period 2010 - 2015 3.2 Selecting business strategy Through the environmental analyses in Chapter with determination of opportunities, threats from the external environment and strengths, weaknesses of the company, we found that: - The current strategy of the company is not reasonable as lack of concentration on exploit of its strengths These strengths could help the company to differentiate its products, while the company recently spends - almost its resources to produce common products with low value Exporting was not concerned appropriately in comparison with domestic sale 63 - Therefore, the company’s business strategy in this period should be formulated and selected basing on its current competitive position and development trend of the industry 3.2.1 SWOT analysis and generic strategies From the environment analyses, we have SWOT analysis summary as below S – Strengths W – Weaknesses S1: Advanced production technology (e.g double firing) W1: Strategy is not good S2: High quality and differentiated products (e.g roof tile) W3: Machines and equipments are still not running at max Capacity S3: Brand name reputation W4: Not yet professional analysis on market W2: High products’ cost price S4: Experience and skillful labor force S5: Capability of research and development, creativity W5: Sale promotion not effective yet W6: Low averages selling price Low profit S6: Effective quality management S7: Good relationship with suppliers and W7: Pending Receivable high buyers W8: Weak finance background S8: Good distribution network, W9: Fairly low production scale and capability of exporting low market share O – Opportunities T – Threats O1: Vietnam economy growths fastly with open integration with global and regional economies Thus bring flavor condition for expansion of market T1: Supply much over demand in the industry O2: National economy is recovering Fastly development of urban area involves increasing of consumption demand T3: Pressure of increasing of input factors T2: Intensive competition on products’ quality and buyers’ satisfactory T4: Export’s recession causes trade unbalance O3: The Government’s supporting policies for investment and development T5: Many of substitute products T6: Risk in finance due to 64 unreasonable capital structure Figure 3.1: SWOT analysis summary for Viglacera ThangLong The above SWOT analysis summary allows us to consider generic business strategies as follows: S – O Strategy (1): Strengthen production and sale of high quality and differentiated products (2): Invest to technological innovation (3): Maximize production capacity, reduce products’ cost price (4): Increase export in both volume and market expansion W – O Strategy (1): Deeply investment in technological innovation (2): Maximize production capacity, reduce products’ cost price (3): Develop human resource (4): Increase promotion activities for improving reputation of brand name and company’s image S – T Strategy (1): Concentrate into production and sale of high quality and differentiated products (2): Increase export in both volume and market expansion W – T Strategy (1): Concentrate into production and sale of high quality and differentiated products (2): Maximize production capacity, reduce products’ cost price (3): Reduce receivables, tightening inventory, reduce financial costs (4): Restructure capital with orientation of increasing of the equity 65 From those generic strategies, we can see that the applicable strategies for the Company could be: Strategy 1: Focused Cost Leadership Strategy Strategy 2: Integrated Cost Leadership / Differentiation Strategy Strategy 3: Focused Integrated Cost Leadership / Differentiation Strategy 3.2.2 Selecting business strategy by using GREAT matrix Because Financial and small production scale are weakness, so the Company only reduce the ex-work prices of products with management solutions in production, that may not allow Company reduce product selling prices as low as some other competitors In other factor, domestic market in this period suply too much more than demand, so export market should be good solutions for Company to focus and develop to increase selling volume average prices For choosing the best strategy, We use the quantitative GREAT matrix to make more clear the situation of the company and select a most suitable business strategy for the company Selection criteria: Score the criteria with a ranking from to scores: Gain: More score if the strategy helps to gain more Risk: Less score if the strategy contains more risks Expense: If the strategy requires more expenses, its score is lower Accessibility: If the strategy is more accessible, its score is higher Time: More score if more reasonable timing schedule Determination of weigh – value for the criteria: Criteria Weigh value Gain 0.3 Risk 0.15 Expense 0.15 The quantitative GREAT matrix application: 66 Accessibility 0.2 Time 0.2 Weigh value Criteria Column Gain Risk Expense Accessibility Time Total Strategies Strategy Strategy Strategy Primary Score Final Score 4=2x3 Primary Score Final Score 6=2x5 Primary Score i Final Score j=2xi 0.3 0.15 0.15 0.2 1.5 0.3 0.45 0.8 3 1.5 0.3 0.45 0.6 1.5 0.45 0.6 0.6 0.2 0.4 3.45 0.4 3.25 0.8 3.95 As we can see, the company may choose strategy (Focused Cost Leadership / Differentiation strategy) as optimal business strategy in the period 2010 – 2015 In which: Focusing on production and sale of high quality ceramic wall tiles, big-size ceramic floor tiles, luxury decorative border tiles and ceramic rooftiles which the company is more capable to deal with in comparison with its rivals Emphasize the products’ differentiation to satisfy the consumers Target customers: The company’s target customers are in cities with medium and high income and export market 3.3 Strategic solutions and Implementation plans 3.3.1Product direction Solutions Divisions in 67 Timing charge Restructuring the product by increasing high- Production, Schedule 2010 - 2011 ranked ceramic wall tiles to million then sale division million m2/year Increase product output of high quality ceramic Production, rooftiles up to 600.000 m2/year 2010 sale division Maximize production of luxury boder tiles to Production, 100.000 then 200.000 m2/year 2010 - 2011 sale division Research and develop new generation of Production, products 2010 – 2012 R&D division Invest to expand production capacity with a new Planning, 2011 - 2012 plant with most advanced technology and finance equipment division Develop human resource: Personnel Training in abroad for technological and division management Training in Vietnam for management Additionaly recruiment of qualified staffs Self training and vocational traning for workers Annually 3.3.2 Solutions for increasing productivity and production capacity Solutions 68 Division in Timing charge schedule Maximize equipment capacity for increasing Production 2009-2010 production output and reduce fix costs per division product unit Analyze job descriptions in order to optimize Whole staffs‘ operation, increase productivity the Continuously / company Increase effectiveness of the preparation for Production, Periodicaly 2010 production Produce in big lots in order to limit sale division the “death time” of equipment, also stabilize products‘ quality 3.3.3 Solutions for upgrading products‘ quality The company’s leaders commit products‘ quality Board of as core factor of the company director Re-formulate the products‘ quality criteria system in orientation of increasing of quality Technical 2009 2009 division requirements so that equal that of products for exporting and for domestic market Tightening the control of input raw materials, suppliers‘ apparaisement and improve relationship with them Tightening the technological Production, Oftenly planning division procedures‘ performance in all the production stages, thus Production Oftenly division helps to stabilize the products‘ quality Change the currently products‘ quality control Production periodically to continuous control that performed division by workers directly 69 2009 - 2010 3.3.4 Solutions for reducing production costs Maintain the continuous operation of equipment Production and optimize workers‘ operation in order to division 2009 minimize loses in the production stages Tightening control of expenses in the principle of Production, disclosure so that every one knows and is planning, responsible These could be supported by sale division Weekly relevant formed records and new regulations Concentrate to research for using local raw R&D materials to substitute for imported ones so that division Oftenly to avoid affectiveness of exchange rate Reduce raw material inventory and coordinate Planning with suppliers in order to reduce the usage of division Oftenly working capital but stabilize the supply Tightening the management of materials Production Oftenly / division Periodically Increase sale volume with orientation of more Sale and Continuously high-ranked products to match with new market marketing consumption for increasing materials‘ usage effectiveness and reduce consumption 3.3.5 Solutions for increasing sale effectiveness segmentation division Strengthen marketing activities to promote Sale and products and brand name Marketing 70 2010-2015 Division Improve cooperation with distributors with more Sale division Continuously effective and flexible sale solutions This aims to increase sale volume and reduce receivables Develop export market to increase sale volume and earn foreign curency Export 2009-2015 Department 3.3.6 Financial solutions Reduce credit cost by increase effectiveness of Finance capital usage, find low cost credit sources, step division 2009-2015 by step restructure the dept by reduce sort-term loans Increase sale volume and benifit of Company Sale and with orientation of more high-ranked products to Marketing match with new market segmentation division Reduce selling costs by reduce selling low price Sale and products in the farewell regions that have high finance transportation product costs division Reduce receivables as much and soon as Finance and possible sale division 71 2010 – 2015 2010 - 2015 2009 - 2015 Restructure capital by increasing proportion of Shareholders equity, making plan to reduce the Capital ratio 2010 – 2011 board that manage of State from 51% to 28% on stock market Making plan to use and sell the unusing Real Shareholders estate of Company 2010 - 2012 board Liquidate the ineffective assets Finance 2009 -2015 division CONCLUSION Through the condition of the company in the current context is still difficult and from the knowledge gathered by studying at school, learned from friends, colleagues, especially wishing to build a strategy to give practical benefit to the company, we boldly declare this business plan Cause of the limit of time and scope, the thesis can’t avoid certain deficiencies Sincerely hope the teachers and scientists help us to guide and supply to the plan complete with highly effective 72 REFRENCES Vietnamese Lê Thế Giới,… (2009), Quản trị chiến lược,NXB Thống kê, Hà Nội Vũ Trọng Hùng (2003), Philip Kotler “ Quản trị marketing”, NXB Thống kê, Hà Nội Nguyễn Hữu Lam,…(1998)”Quản trị chiến lược: Vị cạnh tranh”, NXB Giáo Dục Nguyễn Thanh Thảo, “Chiến lược thương hiệu theo lý thuyết Micheal Porter.” GaMBA (2009), Giáo trình quản trị chiến lược Tổng cục thống kê – niên giám thống kê 2008 VnExpress(23/9/2009),“ADB lạc quan kinh tế Việt Nam.” Số liệu cáo bạch, báo cáo nội Công ty CP Viglacera Thăng long 2003- 2009 Thông tin nội Hiệp hội Gốm sứ xây dựng Việt Nam 2009 10 Các báo cáo nghiên cứu thị trường 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T.M.,(1990), Competing Agains Time, Free Press, New York ……………………………………………………………………………… 74 75 [...]... opportunity Stable competitive opportunity - Capability is quite better than competitor Long- term is competitive with stable competitor 19 Most ability When ability is better than competitor’s It’s the most ability Basic ability When basic ability makes a success, - Intangible a/s: trade mark, commercial opportunity - Tangible: assets, capital Material base, human resource, financial Ability Resources... REAL SITUATION OF BUSINESS STRATEGIES OF VIGLACERA THANG LONG JSC, 2.1 Introduction Thang long Viglacera Join Stock Company (Trade name: Viglacera Thang long ceramic tiles joint – stock Company, abbreviates as TTC), which has office address at Phuc Thang Ward, Phuc Yen Town, Vinh Phuc Province 2.1.1 History of development The company is a member company under Viglacera Corporation which is established... opportunity of service for customer and group of customers Instead of it, price is used by customer to recognize product and competitive opportunity is belong to the company that can supply product with low price *Decision of special ability The third issue of corporate business strategy is to pursue indentified special ability in order to satisfy consumer needs and market sector Indentified special ability...defines the method how the corporation can achieve competitive opportunity , certify ability of other power, other resource and capability of setting up and maintain the competitive opportunity It is requested corporation to achieve successful result, quality, modernization and customer service * Analysis and selection of strategy: Finally is to define some cases... strategies in Viglacera ThangLong Company SWOT analysis can be summarized as below: Table 1.1 SWOT Analysis minimalist frameworks Environment analysis Internal S strength External Environment O - Opportunity T - Threat S-O: Deploy sthengths to S-T: Encourage strengths exploy oppoturnity, to neutranlize threats define business policy W-O: Exploit W-T: Improve weakness 20 Environment W opportunity to improve... identifying stable competitive opportunity When satisfying 4/5 items mentioned below, most ability can be stable competitive opportunity: (1) Valuable, (2) Rare, (3) Costly to imitate, (4) Distance is big enough, (5) The same as successful factor Internal Analysis a Company is to realize current and potential resources that can make the competitive opportunity for the company (strong point); and recognize... market sector Indentified special ability is company facility that it can use well to satisfy consumer needs of customer group Every company defines its position in the industry by its current opportunities Michael Porter said that company opportunity is clarified in 2 issues: cost opportunity and product difference Applying this opportunity, company pursues 3 policies: top of cost minimize, product... Developing special ability, an important mission for lower cost company is to develop all available abilities for increasing efficiency and minimizing cost Lower cost company make all selections of product or market or special ability to have an unique mission of cost minimum to set up an competitive opportunity All solutions , helping the company to achieve lower cost opportunity will change or adjust... product factors, service quality and technical cycle * Opportunity and threat when using lower cost strategy Oppoturnity of every basic strategy can describe well in model of 5 forces by Porter 5 forces include threat from competitor, powerful buyer, replaceable products and new comer into industry Lower cost company can attack industry competitor by its lower cost opportunity Lower cost product can minimize... market share Finally, opportunity of lower coat company is to make a barrier for new comer because other company cannot enter into industry , or to set up cost and price reasonable with the best lower cost company Lower cost company can be safety if it can maintain its opportunity of lower cost and product price lower for customer Threat of lower cost policy can be in ability of other competitors who