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

• Negotiation ability of supplier can have some features, such as: Suppliers can be a warning force when they can increase input price or reducequality of product and service to be supp

COMPLETION BUSINESS STRATEGY

FOR VIGLACERA THANG LONG J.S.C PERIOD FROM 2015-2020

TABLE OF CONTENS CONCLUSION 72

INTRODUCTION

1 The theme of Topic

“Completion Business Strategy of Viglacera Thang Long Ceramic tiles Joint Stock Company in period of 2010- 20015”.

2 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 internationalEconomics step by step, contracting economical agreement, bilateral andmultilateral trade with countries in the world and area, participating in AFTA,ASEAN, APEC, ASEM, WTO…Now, Vietnam belongs to group of developmentEconomics with highest growth rate in the world Vietnam is one of investmentplaces where global businessmen are very interested Government gives manypolices to encourage and support Vietnam business in order to raise competitionability, merger and development Especially, Government encourages the group ofsectors 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, VietnamBusinesses have to face with difficulties because the change is faster and faster ofsocio-economic environment, international competition, and global economic crisis.Viglacera Thang Long is a company which produces and carries on businessbuilding material In the past time, beside big efforts to maintain and develop,Viglacera Thang Long Ceramic tiles JSC also meet not few difficulties in globalfinance – economic crisis from 2008 – 2009

Proceeding from that practice, we can realize that planning for perfectingbusiness strategy with purpose using resources effectively to explore opportunities,limit risk in present period and next years With the reasons, the group of authorschose theme: “ Completion of business strategy of Viglacera Thang Long ceramictiles Joint Stock Company in period of 2010- 20015” in order to make the themeCapstone for both group and Viglacera Thang Long Ceramic tiles JSC

3 Aim of research

Basing on elementary theory about strategy management, through the resultsfrom analyzing outside factors which influence to company, thanks to identifyopportunities, risk; combine to analyze actual situation inside factors company tofind strengths and weaknesses The group of research hopes to give aim andproposal strategy to develop business production so that more suitable for ViglaceraThang Long Ceramic tile JSC in period of 2010 – 2015 Since setting up methods tocarry out strategy effectively.

5 Data resource of research

Using primary and ancillary data from reports which assess businessproduction of Viglacera Thang Long Ceramic tile JSC Using secondary data of thereports of Viglacera Corporation and It’s Branches, Sources Data from Vietnambuilding ceramic association (VIBCA) and Ministry of Construction

Using information from the internet, newspapers and other valuable resources

6 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 practicaldemands and inevitable

Capstone “Completion business strategy of Viglacera ThangLong JSC in theperiod 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

7 Structure of the Capstone.

The Captsone include The Introduction and three main chapters :

- The conclusions - recommendations:

We have tried to do the best to complete this thesis but surely it can’t avoidcertain deficiencies cause the limit of time and scope

So we look forward to receiving the comments of your sincere teachers andstudents 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 ondefinition and management of corporate operations” (by Webster’s New World).This term has resource from military Day by day when economy has beendeveloped 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 toseize competitive opportunity for corporation by determining its resources inchangeable environment in compliance with market demand and insatisfaction of concerned parties’ hopes ” (Johnson G , Scholes K , 1999,

Exploring Corporate Strategy 5 th 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 orplan of implementation and distribution resources necessary for achievingthat target” (Harvard University definition)

There are a lot of such definitions because strategy has a large concept withcomplicated meaning However, strategy can be recognized by certifying itscharacter and by distinguishing strategy and tactics

• By characters, strategy has 3 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 missionachievement Strategy does not define exact method to achieve the mission,because this is the target of other supplemented programs Strategy makes only theframe 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 capitalcontribution

+ 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 andother necessary skills

+ World-wide strategy (international business) – is a selection, facing to

international business when corporate operates multiple business outside itsborder

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 :

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 thecorporate leaders This gives to corporate the best benefits, such as:

- Define exactly the corporate mission in every business period; Supportcorporate to have a future trend for achievement of targeted mission

- Help corporate leaders to see opportunities and challenges from outside, toknow the corporate strong & weak point , to forecast the changes in the

Determine Mission and Vision

External Analysis

(Opportunities & Threats)

Internal Analysis (Strengths & Weaknesses)

Determine the Main Targets

Set-up strategy on levels of

on actual business to reach the integration

Define and

Distribute

the sources

Corporate Structural organization

& internal control

future and to have possible solutions for competing and satisfying with newbusiness conditions.

- Help corporate to control and use effectively all resources , to promote themost of corporate abilities for development

- Help corporate to distribute reasonable resources in every period, to improvecorporate business result

- Improve the corporation and agreement between company leaders to get thetargeted mission

- Help corporation to increase human resource productivity, increase salesrevenue , improve corporate management, and minimize the risks and stopdifficulties may occur with corporation

We can conclude that business strategy can help corporate leaders to define themission 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’ssummarized definition of business strategy as Figure 1.2 below :

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 goalMission: define exactly corporate problems and show how to do

- Vision: it’s mission detailed by general goal , having trust on corporate future

Define the Strategy

Determine the functions and tasks Evaluate external environment

Industry Environme nt

Macro Environmen t

Analyze and choose the Strategy Evaluate Internal environment

- 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 ofconcerned issues and separate them by group as mentioned in this below Figures :

Figures 1.3: Corporate and factors related

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 analyzeenvironment outside corporation The goal of this analysis is to certify opportunityand risk from outside , including analysis of environment macro and micro andindustry environment in which the corporation has business

* Determination, Analysis of inside environment:

The third group of procedures of setting up business strategy is to analyzeenvironment inside corporation in order to find strengths and weaknesses We

Econom y

Corpor ation

Manuf acturin

Human resour e

Politica l

Culture -Social

Populat ion Law

Natural

conditio

n

Technol ogy

Science-Interna tional

defines the method how the corporation can achieve competitive opportunity ,certify ability of other power, other resource and capability of setting up andmaintain the competitive opportunity It is requested corporation to achievesuccessful result, quality, modernization and customer service.

* Analysis and selection of strategy:

Finally is to define some cases of strategy in compliance with corporatestrengths and weaknesses, opportunities and threats This analysis is made bySWOT method Through SWOT, the corporation defines the strategy that can orient, realize the nature of competitive opportunity to find out resource, ability andpower that can be the basis to develop the selected strategy

1.2 Analyze the external environment of the company

Environment outside corporation is the factors outside corporation thatmanagement officers cannot control , but they affect so much to goal achievement

by the corporation, and to corporate development and profitability Analysis ofenvironment outside corporation includes analysis of environment macro and micro.This analysis can help the corporation to define its position and age of its living,form all effects by outside environment to the corporation and to conclude thereasonable decision related to business strategy

1.2.1 Analysis of macro environment

Any changes of macro environment can effect to any corporation of theindustry , can change power and industry challenge Macro environment includes 6economic sectors: economy, technology, culture-social, demography, political andlaw

* Economy environment

State of economy environment defines the healthy and prosperous of theeconomy It always effects to corporations and industries Economy environmentcertifies the nature and trend of the economy in which corporation involves Theeffects caused by economy environment can change profit and earning abilityoperated by the corporation 4 factors are important in macro economy: ratio ofeconomy development, foreign exchange rate, and interest and inflation rate

- Economy decline often triggers price wars in saturated sectors such as ceramic industry in Vietnam

- Interest rate changes will impact business performance of companies, because most companies in Vietnam bank loans at a high level.

- Exchange rate fluctuations will impact business performance of companies importing raw materials and export products

- High inflation is also a threat to the company, as market prices increase,

decrease business efficiency of the company

* Culture-social environment

This is included social manner and culture value; social change can set upopportunity and challenge The corporation that wishes to be alive forever withtime and partners and wish to be recognized by social environment shouldappreciate business culture; that’s why it can lead some changes of technology,political, law, economy and demography Society culture In Viet Nam also set uphabit uses people's building material product kinds

* Demography environment

This is related to population, age structure, geography distribution andincome distribution Opinion of goods and service consume in different geographyarea and point of view of consumes in different age or male/female or job can effect

to the market and to corporation business strategy Living style can effect to goods

& service demand , including product grade, quality, and form Population increasecan effect to the content of corporate business strategy

of the invested area , its effect to local Government and vise versa Whenanalyzing this environment we should focus on : economy innovation,administrative reform, changes related to the industry, tax regulations, safety andenvironment protection, issuance and adjustment of regulations

Nowadays, corporation should pay more attention to Government regulations

on using and protection of natural resources Good environment protection is anessential condition for stable development

1.2.2 Analysis the industry environment

An industry is group of companies or corporations, supplying products or servicesthat can replace by each other closely The close replacement dedicates thatproducts or services satisfying customer requirement are the same

Industry analysis and competition are a complete set of technical conception toclarify the main content of:

+ Main industry economic particularity

+ Competitive forces in the industry, nature and power of each force

+ Motive power causing the change of industry and its effective

+ Companies that have the most strong or weak position

+ Who can make the next movement of industry?

+ The main factors of success or fail in competition

+ Industry attractiveness of average profit recovery

Industry environment is impacted by the followings (The 5 competitive forces inthe industry Model by M Porter):

(1) Risk of new company entering into it;

(2) Level of competition between the industrial companies;

(3) Power in negotiation with buyer;

(4) Power in negotiation with seller

(5) Risk of product replacement

M Porter indicates that these forces are stronger, minimize its ability in priceincreasing and high earnings The task setting for corporate managers is torecognize the opportunity and challenger , we can see the model as figure 1.4below:

Figures 1.4: Model of 5 competitive forces by M Porter

(Source: Le The Gioi, …, 2009, Strategic Management, Model of 5 competitive forces by Mr Porter, pg.106)

• Challenge of new company enters can represent in these facts:

In nature this force concludes the companies that have no competition in industry,but they can enter in because they have implicit of competition, and industryattractiveness and other entering barrier Entering barrier is the most difficult forother competitive corporations Sponsor for competitive position of the companyincludes the maintaining of legal barrier and the current opportunity of thecompany It consists of:

- Faithful to trade mark: it is a customer’s love of company current product

- Absolute cost advantage: the best operation through experiences; control ofinput, labor cost, material, equipment, management skill,…approach to capitalwith low interest When industry companies have absolute advantage thethreatening of current companies may decrease

Industry Competitors

Threats of new Entrants

Bargaining

power of

Supliers

Bargaining power of Customers

Threat of Substitutes

- Economical scale: effective for company with many experiences when scaleincreases.

- Cost of movement appears when customer changes his shopping from thiscompany to another

- Government barrier regulations

- Retaliatory measure of other industry companies

- Becoming a member and other competitive barrier

• Negotiation ability of supplier can have some features, such as:

Suppliers can be a warning force when they can increase input price or reducequality of product and service to be supplied and company profit can be decreased.Level of effective depends on supplier’s focus, quantity of sold goods, anddifference between suppliers, effective of input to company cost or differencebetween products, cost movement of industry companies, existence of replaceablesupplier, a merger of suppliers, supplying cost

• Negotiation ability of customer can have such features:

Buyer as threatening when they ask lower price or better service Level ofeffective depends on: position in negotiation, quantity of buyers, informationthat buyer can have, character of product trade mark, essential level to price,product difference, existence of replaceable product, customer needs, ability ofbuyer when he can use another supplier

• Risk of replaceable product can have such futures:

Industry products to be supplied to the customers with the same product ofindustry analyzing Level effective depends on : cost of movement of productusing, trend of using replaceable product, relation between price and quality

• Competitive intensive of industry can have such futures:

Competition in economical market , hard competition between companies causing

by position change of other company Tools to be used in this competition are price,quality, product difference, service, distribution, promotion, improvement andsatisfaction to customer needs Level of effective depends on : industry structure,need requirements, industry barrier, industry development, overload, productdifference, cost movement, character of trade mark, multiple suppliers, and industryselection

1.2.3 Analyze generally the internal environment

Through analyzing the macro-environment and industry environment, wefind and give some general evaluations about external factor affecting to activities

of the enterprise in producing ceramic tiles Analyzing and summarizing the factors

in the past and at current time can give future forecast ; it can help corporation todefine business strategy, fail risk and achieve the targeted mission

Viglacera ThangLong Company should know competitor about: Who iscompetitor? What is their corporate business ? What is their mission? What is theirstrong and weak point? How is their action? We can review these informationwhether they can support so much to corporation in definition of corporate businessstrategy

Basing on appraisal of opportunity and challenge, corporate business strategycan be determined Opportunity is conditions of the general environment wherecompany can have good opportunity if it knows and exploit well Challenge is theconditions of the general market that can block company to achieve competitiveopportunity

1.3 Analyze the internal environment of the company

Inside environment consists of internal factors that company can control.Analysis of environment inside corporate determines the strong and weak point ofthe company ; this is support to definition of mission system and business strategy

to exploit maximum the strong and weak points The main factors are corporatevalue chain and internal corporate capability, such as: production, Marketing,management activities, accounting-financial, research and development, systemrecovering and resolving information

1.3.1 Producing activities

Analysis of production operation is to review product manufacturing cycle incompliance with corporate business policy or not and give comment forimprovement if necessary

- Analysis of production capability: production capability is ability to produce theproducts in compliance with technical norms regulated in that time It canpresent ability of production factors , such as equipment and technology.

- Analysis of raw material, energy and spare part supply: this is to analyze mainlyquality, trust and prompt supply by supply sources

- Analysis of reasonable production : it’s mainly to analyze productionorganization and operation manual, continuous and technical equipment abilitysatisfied with product change

- Analysis of quality control: it’s mainly to analyze role of quality control systemand its efficiency

Role of customer service is to provide service or support after sales It canmake good impression by customer after they bought product

Corporate organization is a set of human resources Reasonable organizationhas united instruct, un-coincidence, conflict in instruct, chaos in informaticssystem .Corporate operation is a living subject Management leaders shouldanalyze its mission and results , compliance between responsibility and power,relationship between corporation and departments, functions of corporateemployees Through this analysis, we can know problems to be resolved oradjusted.

*Raw material management

This mission is material movement from buying to distribution So , cost can

be minimizes and operation can be more effective Using strict control of inventoryfrom store house to customer, company can reduce stocks on hand, minimize costand have added value

* System recovering and resolving information

System recovering and resolving information is a group of technology staff

to recover and resolve information related to product, customer, product distributionsystem, trade mark and logo, human resource management in order to provideresolved information to corporate leaders, helping them to analyze and set –upbusiness strategy This system is more important for company in current period

* Corporate financial management

Financial resources are the most basic and the first for other resources Analysis of financial resources and appraisal of corporate financial potentiality arethe conditions for investment capital This a basic factor for setting up feasiblebusiness strategy

1.3.4 Research and development (R&D.)

Research and development can make production more effectively, minimizecost R&D can improve product quality and make it more attractive to customer Atthe current time when technology has developed too fast, research and developmentactivities can support corporate to hold modern technology , applying in companyoperation

1.4 Analyze generally the internal environment through value chain

1.4.1 Value Chain

Value chain is an idea that company is a chain of activities , changing frominputs to value product for customer Flowchart of changing from inputs to valueproduct for customer has a main activity and additional activities Every activitycan increase value of product

Support

activities

InfrastructureInformation systemHuman resourceMaterials managementResearching and developingBuying and collectingMajor

activities

Customerservices

Marketing

& selling

Externalsupply

Manufacture Internal

supply

(Source: Le The Gioi, …, 2009, Strategic management, Value chain, pg.184)

Figures 1.5: Model of value chain of M.PorterValue of corporation is equal volume that buyer can buy & pay for product.Achieving competitive opportunity, company groups and departments should make

a value with lower cost compared competitor Or another way, company groupsmake product quite different from competitor’s product

Value chain has main activity (organizational activity) and supporting activities.The group that can produce product is production group Group that implementsgoods public relation, distribution and customer service is marketing group.Supporting activities are: material and infrastructure , research and development.Value chain can give us a general picture of company business to show the strongand weak point

Finally, after analyzing company internal factors we should remember that thefactors cannot dependent , but they have close relation

1.4.2 Definition of stable competitive opportunity

Stable

competitive

opportunity

- Capability is quite better than competitor

Long-term is competitive with stable competitor

Figures 1.6: Procedures of identifying stable competitive opportunity

When satisfying 4/5 items mentioned below, most ability can be stable competitiveopportunity:

(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 canmake the competitive opportunity for the company (strong point); and recognizedifficulties for maintaining opportunity (weak point) Based on it we can select thebest business strategy that promote strong point and eliminate weak point

1.5 Establish and choose the business strategy

1.5.1 Analyze SWOT matrix

SWOT is abbreviation of English words : Strengths; Weaknesses; Opportunities;Threats This is an effective tool for more understanding or making decision related

to corporate organization and business management This model is that authors useanalysis tools and establish business strategies in Viglacera ThangLong Company

SWOT analysis can be summarized as below:

Table 1.1 SWOT Analysis minimalist frameworks

S-T: Encourage strengths

to neutranlize threats

W-O: Exploit W-T: Improve weakness

Environment W

weakness

opportunity to improve weakness

and prepare carefully to overcome external threats

1.5.2 The basic business strategies in the practice

A company, focusing on market and customer is in the centre, can concentrate more

on customer development during defining business strategy

(1) Customer needs , What they should be satisfied with;

(2) group of customers, Who will be satisfied;

(3) other special ability, How customer’s need can be satisfied

This is the main issue for selecting corporate business strategy, because it is basisfor definition of business opportunity and of competitive method

* Customer’s needs and multiple differences of products.

Customer’s need is wish or requirement to be satisfied by product character

or by service The difference of product can make a competitive opportunity byproduct design or service that can satisfy customer’s needs The product difference

of this company in comparison with other companies can make a basis of companycompetitive opportunity

Company that do not select or cannot define by the product difference, willhave low selling price and this price is indentified that company’s product Othercompany tries to make special type of its product in order to satisfy customer’sneeds

* Group of customers and market definition

Market definition is considered as method used by company to select group ofcustomer basing on the difference of their needs or habit , then to achievecompetitive opportunity Reasonable business strategy can be defined based on it.Generally, there are 3 different strategies of market definition

- Firstly, market is considered with high identity and application of this strategy is for all the markets This applied strategy is high cost strategy.

- Secondly, market can divide into some different parts (“market area” or

“market sector”) and product should be developed in accordance withthat area or sector Strategy applied for market sector is strategy focusing

on product difference

- Thirdly, even market has many sectors, but service is for some only This

strategy applied for market sector is policy focusing on important issue.Product supply is decided for many market parts, so company can satisfy betterservice Although, customer’s needs of all company products is increased and salesrevenue is more bigger , that’s better if company can supply only one product Butindustry nature or product character do not allow big difference In case, if there is alittle of opportunities for product difference and market sector , so there is a fewopportunity of service for customer and group of customers Instead of it, price isused by customer to recognize product and competitive opportunity is belong to thecompany that can supply product with low price

*Decision of special ability

The third issue of corporate business strategy is to pursue indentified specialability in order to satisfy consumer needs and market sector Indentified specialability is company facility that it can use well to satisfy consumer needs of customergroup

Every company defines its position in the industry by its currentopportunities Michael Porter said that company opportunity is clarified in 2 issues:cost opportunity and product difference Applying this opportunity, companypursues 3 policies: top of cost minimize, product difference and concentration Theyare called master strategy because they do not depend on any company or anyindustry We can explain more about M Porter’s strategy as below:

Table 1.2: General Strategies of M.Porter

(Source: Nguyen Thanh Thao, “Trade mark strategy by Michael Porter’s theory)

a, Cost Leadership strategy

* Identities:

Company goal of low cost strategy is better operation (better opportunity)than other competitor , so that company tries the best to have low price product orservice

This strategy has 2 basic opportunities At first, with lower cost the companycan give lower price comparing with other company, but they can get profit thesame as other competitor’s Secondly, if industry competition is increased andcompanies compete by lower cost, so the company with lowest cost can stay anddevelop than other company

*

Strategy on solution:

Low cost companies select the product difference They ignore markersectors They often pay attention to the global market generally; in fact they cangive lower price comparing with other company to attract customer to their 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 specialability to have an unique mission of cost minimum to set up an competitiveopportunity

All solutions , helping the company to achieve lower cost opportunity willchange or adjust according to every industry and industry structure It’s from largescale of product manufacturing, 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, replaceableproducts and new comer into industry Lower cost company can attack industrycompetitor by its lower cost opportunity Lower cost product can minimize affective

of high price input from powerful supplier and of lower price product frompowerful buyer

If replaceable product is entered into market , the lower cost company canreduce product price in comparison with new entering product and can maintain itsmarket share

Finally, opportunity of lower coat company is to make a barrier for newcomer because other company cannot enter into industry , or to set up cost and pricereasonable 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 try tomanufacture its product with lower cost and that competitor can attack the lowercost company by its strong point of lower cost Ability of fact copy by competitor is

a big threat to lower cost company

Finally, lower cost policy can make a risk for lower cost company that theythink only about reduce cost , do not see changes of consumer taste So thatcompany can focus too much on investment or improvement internally and do notreinforce its market

Willing of lower cost policy does not ignore ability of specialization Theimportant that company product should be accepted by customer when theycompare it with the same product So that, lower cost can be competitive ifcompany ensures a quite difference of its product that can make clearreorganization accepted by customer

In the ceramic industry, the investment company recently completed a largecapacity can lead to pursue strategic cost advantage due to scale But the fact alsothat the company has little strategic interest in quality to low trade mark position

b, Product Diffirentiation Strategy.

* Particulars:

Particulars of difference strategy are to achieve competitive opportunity bymanufacturing product or service that customer can recognize the best

Ability of company who has policy of product difference that competitor cannothold can allow them to give product price higher than average industry price Opportunity of sales revenue increasing by high price (not by lower cost input)allows lower cost company to operate better its business and get profit higher thanaverage industry profit , and customer can pay with such price because they believeproduct quality is different and the difference already in this price.

* Solutions of strategy

Product difference company can select high difference product to achievecompetition Product difference can achieve by three ways: quality, renovation andsatisfaction by customer The renovation is very important for product with hightechnology , and new particular is base for difference When difference is based onlevel of satisfaction by customer , manufacturer and seller should ensure to provide

a good service after sales

Product challenge for customer hope can be a base of difference Thechallenge can be a factor related to position or pride of customer Product differencecan be suitable with age group and social-economic group

Company with product difference policy can divide market into some parts.Product supply department designs product specialized for every market part.Company can decide business in a large market , but they can serve for somemarket part only where they have difference opportunity

After decision of product difference policy , company should focus oncorporate organization and product supply to set up competitive difference for itsproduct

Product difference policy requires company to set up competitiveopportunity by selection of product/market/specialized ability to make added valuefor its product or service recognized by customer

However, company with product difference policy should focus oncommunication or public relation activity to supply information on unique anddifferent character of its product in comparison with other companies

* Opportunity and disadvantage for product difference policy application

Product difference protects company from other competitor if customer isfaithful to company product Product faithfulness is an intangible asset because itprotects company in all respect

Product difference and trade mark faithfulness can make a barrier for thecompany that wishes to enter into the industry New companies must set up newindentified abilities to compete with current companies and this way is tooexpensive

Finally, threat of replaceable product can be minimized depending on ability

of product difference and trade mark faithfulness

Product difference policy can make some disadvantages For example,competitor can easy produce the same product , or product price cannot be remainedhigh When a difference is started from product design and product physicalcharacter that product may have a risk and the difference can be made easily

The product difference does not allow company to fail cost The costdifference must be bigger than cost added to setting up product difference If thisissue is not assured, company can lose competitive opportunity When setting upproduct difference , company should focus on achieving cost the same or equivalent

Recently, the changing of technology in the production line, the developing

of flexible product’s technology have made the selection between two strategies ofexpenditure and difference of products become unclearly However, to developingtechnology, companies recognize that it is easier to make profit from bothstrategies The reason here is firms can follow characterized products’ strategy with

lowest costs basing on flexible technologies, mean taking the lead of expendituresand difference of products.

In the tradition, in order to making the characterized products we need tospend very high, because we have to create various type of products for differencestages of market, mean the firms have short period of products and it will increasethe costs of production Moreover, the firm which wants to make the characterizedproducts have to spend for marketing much more than the lead of firms causedserving many stages of market Therefore, the firm which follows strategy ofcharacterized products has higher expenses than the lead of expenditure of firmswhich produce huge lots of standard products However, the flexible of product canallow the firms carry out the difference of products to produce much more productswith reasonable costs in comparison with the lead of expenditures

Another effective way can be done for the manufacturer to characterize theirproducts according to the scale of production is standardize many parts of its finalproducts

A firm may reduce costs of products and marketing if it limited the quantities

of sample in the product – chains by selling set of product plans, but not be decided

by the consumers

Just In Time system (JIT) could also help reduce the costs, improve qualityand trusting on the products’ firm This is also very important for the characterizedproduct firm in which quality and trusting are basic elements of attractiveness ofproducts Some Firms are achieving benefits simultaneously from leading of coststrategy and difference of product strategy by making use of the developing newproducts and marketing methods The firms can get profits at least balance with orhigher than other firm which follow only one strategy, because it can make higherprice for their products in comparison with firms which only pure appliedcharacterized product strategy

Following combination strategies are the best way and the most effective.The firms promptly make use of advantages from new products, materialsmanagement and marketing methods.

In the ceramic industry, pursuing different strategies of products requirecompanies to have a team of technical and management experience in the sametime, the company must be strictly controlled to reasonable for costs to ensuringsustainable competitiveness

c Focused Strategy.

* Features

Difference with two above strategies, the third pure competitive strategy,concentrated strategy mainly meet demand for group of limeted consumers or onepart of market in order to make use of competitive advantages of small company tocompete with other strong competitors

The firm pursue patiently concentrated strategy focus on serving one part ofconcreted market The target market can be determined in term of geology,customers, or one part of product chain

A concentrated firm have a lot of chances to develop its private activities andcompete with other firm which having lower costs and differentiation in the trend ofgrowing up

Concentrated strategy opens a chance for firm to meet all the necessarydemands of customers The firm concentrate competing with characterized firms inone or some parts of market The firms which pursuing concentrated strategy,develop definitely quality of charaterized products successfully because they havegood knowledge of a set of customers or areas

Moreover, the concentration chains of products sometimes allow theconcentrators give out renovations more quickly than other big characterized firms.However, the concentrator does not try to serve overall market because it willcompete directly with characterized firm Therefore, the firm pay attention to

establish share in part of market and it can start to serve many parts of market andthe competitive advantages of other characterized firms will be lost if it success.

* Strategic solution

A concentrated firm has a lot of ways to develop competitive advantages

A firm can pursue concentrated strategy either characterized products or lowcosts In substance, concentrated firm is a characterized firm or the lead ofspecialized cost Some of concentrated firm can simultaneously pursue the lead ofcost and characterized products because of their small sized If the concentratedfirm applies only low cost strategy, it has to compete with the lead of cost firm inpart of market where it has not cost advantages If the concentrated firm pursuecharacterized-products strategy in order to compete with the lead of cost firm, allthe methods of characterized product is opening for concentrated firm

The characterized product may high or low depends on the firm whichpursues low cost or characterized product strategy With reference to group ofcustomers, concentrated firm find only the way to compete in each part of market,not overall market as the lead of cost firm, or meet demand some parts of market ascharacterized product

The concentrated firm may pursue a private ability base on low costadvantages or characterized product Therefore, the firm may look for costadvantages and develop higher effectiveness in production in the area Or it candevelop better abilities in adaptability with customers, basing on the ability ofmeeting area customers’ demand as the characterized firm in the nationwide

* Advantages and disadvantages

Competitive advantages of concentrated firm proceed from its private effectiveness, quality, renovation, or the adaptability with customers The firms canovercome the competitions of competitors till they can supply goods and serviceswhich other competitors cannot It also brings about strengthening with customers

ability-for the concentrated firm because the customers cannot find the same products fromany other competitors.

However, the concentrated firm will be at a disadvantage with the strongsuppliers because they buy small quantity of materials Therefore, the powerbelongs to the suppliers The more they have the right to increase price (price ofmaterials) toward the loyal customers (final price), the more this disadvantage is notthe big problem

The potential competitors have to overcome the faithfulness of customerswhich created by the concentrated firm, and having the faithfulness of customerscan decrease the risks from replaced products

Concentrated strategy allows the firm reaches near the customers and reactspromptly with their changing demands The difficulties of management ofcharacterized firm for some stages of market are not problem for concentrated firm.Unlike the characterized product firm, the concentrated firm can change easily intonew stage of market by concentrating all their resources and abilities to one or somestage of market

As the concentrated firm produces small quantity so its production cost washigher than the lead of cost firm High cost will decrease profit if the concentratedfirm has to invest much into developing private ability – for example innovatinghigh price product – in order to compete with characterized firm

The second problem is stage of market of concentrated firm may disappearsuddenly because of changing technology or hobby’s consumers The disappear ofstage’s market is the reason why many small firms were unsuccessful Finally, there

is a risk that many lead of cost and characterized firms will reinforce a competition

to scramble for stage’s market of concentrated firms

d Integrated Cost Leadership/Diffirentiation Strategies

The common strategies are not always compatible with each other If abusiness tried to take action to achieve superiority in all fields, the results will notachieve any advantage For example, a company trying to make themselves

outstanding than their rivals by launching the very high quality products will have

to accept risk of reduced quality of their goods, if that company still want to try to

be a low cost leading unit Even in cases where product quality is not reduced, thecompany has inadvertently created an inconsistent image in the eyes of customers.Thus, Michael Porter argued that to succeed in long term, the enterprise mustchoose only one of three common strategies mentioned above If greedily pursue ofthree objectives, the company will be fall into the embarrassing situation and willnot get any competitive advantage

Also according to Porter, the enterprises those can be successful in applyingvarious strategies often have to establish separate business units, each unit pursued

a strategy By separating strategies for different units of policy or even culture, abusiness can reduce the risk of falling into stagnation unable to develop

However, there is also the view that pursuing a strategy is not only the rightchoice, because with the same product, customers often find satisfaction in manycombined aspects of quality and style, convenience and price In fact, there aremanufacturers loyal to only one strategy and then suffered losses more severe whenanother firm entered the market with lower quality products but satisfy customerneeds better in other ways

e strategy in the context of five overall competitive forces

Table 1.3: Compare the characteristics of the general strategies

Customers' loyalty can upset new joined competitors

The focus that create specialization of the company has the effects

as a barrier prevent joining

Powerful customers have Powerful customers have

ability of

customers

Ability to introduce low price to

powerful customers

less advantages in negotiation because they can’t find substitute products

less advantages because there are few choice

Negotiating

ability of

suppliers

Better protection ability against powerful suppliers

Easily transfer the increase price of suppliers into customer

Lower position in negotiating with suppliers, as the company has low output, but businesses pursuing focus strategy on differentiating products can transfer the

increased price in to customers

Risk of

substitute

Able to use lower price to protect products from being substituted

Customers become attached to the distinguished characteristics of products, thereby reduce the risk of substitute

Products with high specialization and superiority protect company against substitution

Competitive

intension Better

competitiveness in price

Customers' loyalty protect company from losing customers into other competitors' hands

Competitors cannot supply the needs of customers as the company pursuing focus strategy of

differentiating products

(Source: Nguyen Thanh Thao, "Brand strategy by theory, Michael Porter)

These common strategies can be applied to protect enterprises againstcompetitive forces Diagram above is to compare the characteristics of the overallstrategies in the context of the environment of five competitive forces

1.5.3 Selection of the best business strategy

Company should select the best business strategy, because at the same timeyou can not apply all or some policies uncounted and you can loose time , power ,

human and money So it’s necessary to select one set of policies that are the bestand to consider opportunity or loss if any.

Based on a set of policies, defining the combination between Opportunity, Strength-Threat, Weakness-Opportunity, Weakness-Threat, you canuse GREAT model to make the base of business selection :

Strength-Table 1.3: Quantitative matrix according to the GREAT criteria

Item Essen

tial

Strategy Strategy 1 Strategy 2 … Strategy n Appraisal

Score

Equivalent score

Appraisal score

Step 1: Recognize main content to be analyzed or belong to column 1

Step 2: Appraise efficiency of factors to general strategy ; use ratio dedicatingimportance and efficiency to strategy (ratio counting from 0 to 1 with total equal 1)Step 3: Appraise and mark every factor of strategy Mark counting from 1 to 5 :weak, normal, over normal, good, best

Step 4: Convert ratio as result of column 2, then summarize results as in last column

Finally, highlight from one to three best numbers and that is the focus

strategy which should be focused on implementation

1.1.4 Strategy Implementation

a) Ogranization Structure

Depend on the scale of the Coporate and operation , it is organization structure must

be match with selected business strategy mean that the management mechanismand process of decision making must be suitable with strategic contents

b).Strategic Control and evealuation

Strategic inplementation must not be separated from strategic control and evaluation.These activitiesc are necessary for understanding if the selected strategy is rightand its implementation is effective

CHAPTER II:

ANALYZING THE REAL SITUATION OF BUSINESS STRATEGIES

OF VIGLACERA THANG LONG JSC, 2.1 Introduction

Thang long Viglacera Join Stock Company (Trade name: Viglacera Thang longceramic tiles joint – stock Company, abbreviates as TTC), which has office address

at Phuc Thang Ward, Phuc Yen Town, Vinh Phuc Province

At present, Company is expanding its business area but main focus is still producingceramic tiles to feed construction industry Beside this, company has its business ininfrastructure investment; construction; industrial and civil interior decoration;designate consultation; provide training and hand over in construction materialproduction technology;

Charter captital:

• At its equitization time ( 29/01/2004): VND 12.5 billions

Stakeholders struture:

State owns 51%, and Private owns 49%

( Source :Thanglong Viglacera Join Stock Company)

Visions:

To become a leading company in ceramic tiles and building material industry inVietnamese territories

2.1.2 Oganizational structure of the company:

The organizational stucture of the company is ontlined as below (Figure 2.1)

Shareholder General Assembly

Director

Vice Director

The Company’s Orgnizational Chart – ( Source: ThanglongViglacera J.S.C )

2.1.3 Operational status of company bunisess.

Table 2.3: Key achievement from 2006 to 2009

From the 3rd Quarter of 2009, the production and business operational of thecompany has shown an positive improvement, start making profit to the company.However, the profit level hasn’t shown the stability for a long term development forthe company There still are many certain difficulties need to be solved both frominternally and externally of company business environment

2.2 Products and services

2.2.1.General characteristics of the products

Products of Thanglong Viglacera Join Stock Company are mainly wall tilesand floor tiles which is produced by double and triple firing technology withmultiform, plentiful, and luxurios designs

Wall tiles:

Tiles products with different designs such as marble, cloud, wooden, opaque Mattglaze, glaze style and high quality smooth edge style with common sizes of300x600mm, 250x500mm, 300x450mm, 200x250mm, etc

Bathroom tile products synchoronous with anti slippery wall using double firingtechnology which have popular following sizes: 200x200mm, 300x300mm

The synchonorous decorative tile products using double and triple firingtechnology

Floor tiles:

Floor tiles with gravel, stone, wooden styles; garden tiles which produced usingsingle firing technology with sizes 600x600mm, 400x400mm, 300x300mm ,250x250mm

Ceramic Roof tiles

This is a new developed produc.Launch in this yesr, the product shows that it metits met the high-end market segment demand

2.2.2 Summarizing manufacturing technology: