Xây dựng chiến lược phát triển của công ty cổ phần đầu tư bất động sản ninh bình

LUẬN VĂNXÂY DỰNG CHIẾN LƯỢC PHÁT TRIỂN CỦA CÔNG TY CỔ PHẦN ĐẦU TƯ BẤT ĐỘNG SẢN NINH BÌNH RESEARCH SUBJECTMAKING DEVELOPMENT STRATEGY OF NINH BINH REAL ESTATE INVESTMENT JOINT STOCK COMPA

LUẬN VĂN

XÂY DỰNG CHIẾN LƯỢC PHÁT TRIỂN CỦA CÔNG TY CỔ PHẦN ĐẦU

TƯ BẤT ĐỘNG SẢN NINH BÌNH

RESEARCH SUBJECTMAKING DEVELOPMENT STRATEGY OF NINH BINH REAL

ESTATE INVESTMENT JOINT STOCK COMPANY

1

Hanoi, October 21st, 2009

INTRODUCTION ……….……… 2

I REASONS TO CHOOSE THE TOPIC ……….………… 2

II PURPOSES AND RESEARCH QUESTIONS ……… 3

2.1 Research matter ……….……… 3

2.2 Research question ……….……… 3

II REPORT STRUCTURE ……… ….……… 4

CHAPTER I - GENERAL THEORY OF PLANNING BUSINESS STRATEGY OF ENTERPRISES 5 I OVERVIEW OF BUSINESS STRATEGY………… ……… 5

1 What is business strategy? ……….………. 5

2 Meaningful features of business strategy? ……… 7

3 Meanings of business strategy toward enterprises …… 8

3.1 Fiscal benefits ……….……… 8

3.2 Non-fiscal benefits ……….……… 8

II SET AND CHOOSE BUSINESS STRATEGY OF ENTERPRISES 9 1 Strategy management process……….……… 9

1.1 Strategy formation process ……….……… 9

1.2.Strategy implementation process ……….……… 10

1.3 Strategy assessment process ……….……… 11

2 Analysis of the business environment of the enterprise ……… 13

2.1 Factors of the business environment ……….……… 13

2.1.1.Macro-environment ……….……… 14

2.1.1.1 Economic factors ……….……… 16

2.1.1.2 Governmental and political factors ……….…………. 16

2.1.1.3 Social factors ………….……… 17

2.1.1.4 Natural factors ……….……… 17

2.1.1.5.Technology factors ……….……… 17

2.1.2 Operation environment ……….……… 18

2.1.2.1 Competitors ………….………. 19

2.1.2.2 Customers ……….……… 20

2.1.2.3 Suppliers ……….……… 20

2.1.2.4 Potential competitors ……….……… 21

2.1.2.5 Substitution products ……….……… 22

2.1.3 Internal environment ………….………. 22

2.1.3.1 Human resource factors ……….……… 22

2.1.3.2 Development Research factors ………….………… 23

2.1.3.3 Production factors ……….……… 23

2.1.3.4 Fiscal-accounting factors ……….……… 24

2.1.3.5 Marketing factors ……….……… 24

2.1.3.6 Organizational discipline ……….

……… 24

2.2 Business environment analysis of enterprise 25 2.2.1 Information collection ……….………. 25

2.2.2 Planning summary ……….……… 25

2.2.3 Planning reactive strategy……….………. 26

3 Some assessment models……….………. 27

3.1 Assessment matrix of outer factors……….…… 27

3.2 BCG matrix ……….……… 28

3.3 HOPER matrix……….………. 29

3.4- SWOT matrix ……….……… 29

3

CHAPTER II - CORPORATE STRATEGY ANALYSIS FOR

NINH BINH REAL ESTATE INVESTMENT JOINT STOCK

COMPANY

31

I OVERVIEW OF NINH BINH REAL ESTATE INVESTMENT JOINT

1 History of foundation and development, function and tasks 31

2 Organizational structure……….……… …… 33

2.1.Current organizational outline……….………… 33

2.2 Labor structure……….………. 34

3 State of land and assets……….……….…… 35

4 State of business and production (2006 - 2008) ………. 36

II CONFIRMATION OF MISSION AND VISION……….………. 37

III EXTERNAL ENVIRONMENT ANALYSIS……….……… 38

3.1 Macro-environment analysis……….……… 38

3.2 Sectoral environment analysis……….……… 41

IV INTERNAL ENVIRONMENT ANALYSIS 44 4.1 Advantages ……….…………. 44

4.2 Disadvantages……….………… 46

V ANALYSIS OF STRATEGIC TARGETS……….….… 50

VI DETERMINATION OF STRATEGIC SELECTIONS……….…… 52

VII ASSESSEMENT OF STRATEGIC SELECTIONS……….… 53

CHAPTER III PROPOSAL OF CORPORATE BUSINESS STRATEGY FOR THE COMPANY IN 2010-2013 55 I CORPORATE STRATEGIC TARGETS FOR THE COMPANY 55 II CORPORATE STRATEGIC METHODS OF THE COMPANY 60 1 General strategy……….……… 60

2 Portfolio strategy……….……… 61

3 General administration strategy……….……… 61

III SOME BASIC FUNCTIONAL STRATEGY METHODS TO SUCCEED IN

1 Marketing ……….……… 62

2 Finance……….……… 63

3 Human resources……….……… 64

4 Production……….………. 64

5 Research & Development (R & D)……….………… 64

IV SOME PROPOSALS FOR SUCCESSFUL STRATEGY ORGANIZATION 65 CONCLUSION……….………. 67

REFERENCES……….……… 68

5

In this document, the abbreviations are understood as follow:

UBND People’s Committee

INTRODUCTION

I Reason for choosing the theme:

Vietnam’s economy is in the development momentum thanks to rightpolicies of the Party and Government in orienting development and managingthe economy, bravely abolishing old mechanism, creating an economy with itsown character, suiting conditions of the country Vietnam is an official member

of the World Trade Organization, creating many challenges and opportunitiesfor domestic businesses Businesses must recognize which opportunities thatneed to be caught and which challenges that need to overcome in a multi-dimensional competitive world: “bigger fish eat smaller ones” Over the lasttime, we have realized clear influences of foreign economic organizations,groups on our country’s economy Foreign economic organizations, groups havepotentials in terms of capital, management competence and will become bigcompetitors of domestic businesses

Although the State have intervened with economic policies for foreignorganizations to protect domestic businesses, integration roadmap in long-termmust base on inner strength of domestic businesses themselves, as joiningcommitment is required to go according to a certain roadmap, the State cannotintervene forever Thus, the problem for businesses is how to build for themselves astrategy to exist and develop To solve this problem, businesses must haveintelligent coping ability to changes of the market, know to exploit theiradvantages, understand their strong as well as weak points of competitors’, knowhow to approach the market to find out about business opportunities and correctway for themselves Thus, businesses are absolutely necessary to build a long-termdevelopment strategy for themselves

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Ninh Binh Real Estate Investment Joint Stock Company was establishedaccording to License No 4485/GP – TLDN dated March 06th, 2006 issued byNinh Binh Province People’s Committee Business registration No.0364027/GPĐKKD dated March 12th, 2006 issued by Department ofInvestment and was officially put into operation from March 15th, 2006 In thepast three years, the Company has built plans to orient its development in certainperiods At the same time, it also met a lot of difficulties in 2008, when beingaffected by global economic crisis So far, standing in front of the process ofinternational integration, globalization, the application of short-term plans are nolonger suitable, it is required that the Company build strategy in accordance withthe requirement of developing business production in the new period.

The enterprise clearly determines the emphasis on the implementation ofinvestment in real estate business projects This is a specific business withextremely severe industry and business competition pressure, thus, building aright strategy for the Company is very necessary

Standing in front of such opportunities and challenges, making a clear,correct strategy is the key factor, premise for the development and statusaffirmation of the Company in the business world This shows objectivenecessity of the research of the theme: “Making business Strategy for Ninh BinhReal Estate Investment Joint Stock company”

II Objective, issues and questions of research:

2.1 Issues need to be studied:

- Studying real state and result of the implementation of plans of theCompany in 2006, 2007, 2008

- Making development Strategy of Ninh Binh Real Estate Investment JointStock company in the period of 2010-2013

How was Ninh Binh Real Estate Investment Joint Stock companyestablished and how did it operate and develop? What are differences betweenorganizational structure and business professions of the Company and othersimilar enterprises? What are business results of the company in three years(2006, 2007, 2008)? What are opportunities and challenges, strong and weakpoints of the Company? Mission and visibility of the Company? Strategicobjective of the Company? Determination of strategic choices? (Chapter 3)

What contents does the project of development strategy of the Companyfor the period of 2010-2013 contain? Systems of controlling the strategy andbasic functional solutions to ensure the implementation of the developmentstrategy of the Company? (Chapter 4)

What are conclusions and petitions given to leaders of the Company,sector and the Government? (Chapter 4)

III Chapter structure of Report:

Chapter 1: Introduction

Chapter 2: General reasoning on business strategy making of the enterprise Chapter 3: Analyzing business strategy for Ninh Binh Real Estate Investment

Joint Stock Company

Chapter 4: Proposing business strategy for the Company for the period of

20102013

CHAPTER I

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GENERAL REASONING ON BUSINESS STRATEGY MAKING OF

THE ENTERPRISE

I OVERVIEW OF BUSINESS STRATEGY

1 What is business strategy?

The term “strategy” originates from military art from the old days, it wasconsidered as the art directing means to win Being borrowed from militaryterms, the word “strategy” has been used quite commonly in economic life inboth macro and micro scale in which there are many notions on strategy such as:

- Strategy is the art of building firm competition advantages to defend(M.Porter)

- Strategy is determination of ways and means to reach determinedobjectives through policies (General Aileret)

- Strategy of enterprises is total decisions aiming to obtain importantpositions, defend and create exploitation results which can be used immediately(F.J.Gouillart)

- Strategy is the art of combining actions and controlling them to reachlong-term objectives (G.Hirsch)

- Strategy of enterprises is the outlining of firm and long-termdevelopment orbits, we may arrange accurate decisions and actions of theenterprise around those orbits This is conception of Alain Charles Martinet,author of the book “Strategy”, who was granted with big award of Havard I'Expansion in 1983

According to another approach, “Strategy” is a tool for enterprise toanswer questions: where do we want to go? Where can we go and how to gothere? What do we have? What do others have?

From some conceptions above, the term strategy contains and reflectsobjectives of strategy, in the long-term time (3 years, 5 years, 10 years), the

process of making decision on strategy depends on competition environmentfactor, advantage, weak points of the enterprise in general and according to eachactivity in particular So, we can see that the strategy of enterprise is a productcombining what the environment has, can do and expects.

Through the development of time, conceptions on strategy also changestowards rising Up to now, there are a lot of notions on business strategy,however, two of them are considered to be common as follow:

- Business strategy is the plan of making and controlling businessactivities of the enterprise including objective determination of business strategy(3 years, 5 years, 10 years, etc); the process of making decision of the enterpriseand analysis of business climate; or in other words, business strategy is a

“product” which can combine what the environment has, can have and wants tohave Thus, real nature of business strategy is the tool to reach long-termobjectives, and idea of business strategy aims at attacking to win victory incompetition and in the market

- Business strategy is set of long-term objectives, big policies andsolutions about business production, finance and solving human factor to putbusiness activity of the enterprise to a new state of business activity which ishigher in terms of quality

In short, business strategy is the art of organizing to combine optimallyresources, proposing and implementing decisions in conformability to changingtendency of the environment to obtain success in competition to reach long-termobjectives in business

2 Specific meaning of business strategy

From the above comception, we can clearly see basic features of businessstrategy, which are:

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- Business strategy must clearly determine basic objectives which need to

be obtained in each period and grasp thoroughly in every aspect, every level inbusiness production activity of the enterprise

- Business strategy must ensure maximal mobilization and optimalcombination of exploitation and use of resources (human and tangible andinvisible assets) At present and in the future must uphold advantages, catchopportunities to get advantages in competition

- Business strategy of the enterprise is reflected in a whole continuousprocess, from building strategy to implementing, evaluating, checking andadjusting the strategy

- Business strategy is built for implementation in a quite long time(usually 3 years, 5 years, 10 years, etc)

With those features, it can be said that in market mechanism, theconstruction, implementation of business strategy have particularly importantmeaning to the existence and development of enterprise, as:

- It helps enterprise realize its objective, heading which is basis todetermine what tendency the enterprise must follow in business production andwhen it can reach certain objectives

- Changing of the market always creates opportunities and risks, buildingstrategy helps enterprise hold, take advantage of opportunities to overcomerisks, traps of the market

- Building strategy creates firm basis for enterprise to propose decisionssuitable for the development of the market

- Building and implementing strategy makes decisive contribution toincreasing efficiency of using resources, enhancing competition status, ensuringsustainable development of the enterprise

3 Necessity of business strategy to the enterprise.

3.1 Financial benefits

Studies show that if companies have good and clear strategies, they willget high benefit and success in business In practice, companies with goodresults reflect a strategic orientation and emphasizes more on long-term.Companies getting better financial results tend to plan systematically to makepreparation for future changes in inside and outside operating environment andbring about outstanding financial results in their business profession

II BUILDING AND CHOOSING BUSINESS STRATEGY OF THE ENTERPRISE

1 The process of strategic administration

Administration conceptions have existed for a long time but until late 19thcentury and early 20th century, administration theories consisting of ideas whichwere arranged systematically and studied on the basis of scientific analysisactually appeared, formed with administration school according to science,quantity in accordance with competition requirement in modern businessactivities

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Strategic administration is the process of studying the environment toestablish strategic objectives, policies and solution on business of the enterprise,

to organize to put strategy, business policies into practice to make decision onadjusting, checking, evaluating the strategy and business policy implementation

1.1 Strategy forming stage

Forming strategy is the process of setting up business tasks, implementingresearch investigation to determine inside and outside factors, proposing long-term objectives and choosing alternative strategies Sometimes the process offorming strategy is called: “making strategy plan” Strategy forming consists ofthree basic activities:

- Carrying out study: related to collection and treatment of information onmarkets and business professions of the company This process is called

“considering perfunctorily business climate” In nature, carrying out study is todetermine strong, important and weak points in functional business area.Different investigation forms can also be developed and implemented to surveyinside factors such as staff’s spirit, production efficiency, advertising efficiencyand customers’ faith

- Harmonizing intuition and analysis: some administrators and owners ofenterprises declare that they have special gift in using intuition when givingexcellent strategies Although at present, some organizations can exist anddevelop prosperously thanks to intuition geniuses in management, however, themajority is not as luck as that Most of organizations can make profit fromstrategy on capital based on harmonious combination between intuition andanalysis in decision making

- Making decision: as not any organization have limitless resources,strategists are compulsory to make decisions related to selecting whichalternative strategy will bring about most benefit to the company Decisions in

the process of forming strategy will fix organization to specific products,markets, resources and technology in a long time.

1.2 Process of implementing strategy

Implementing strategy is often called action stage of strategyadministrators Implementing means mobilizing administrators and staff toimplement established strategies Basic activities of this stage are:

- Establishing annual abjectives: are landmarks that organizations mustreach to come to long-term objectives It is a must that annual objectives can bemeasured, have quantity, challenging, practical, conformable and are givenpriority These objectives are often proposed in company level, division andfunction level in a big company Annual objectives should be proposed underthe form of achievements on management, marketing, finance, accounting,administration, information study and development A series of annualobjectives is necessary for each long-term objective Annual objectives areparticularly important in strategy, it is the basis for resources distribution

- Policies: Policy is a tool to reach objective Policy consists ofinstructions, principles and procedures which are established to support efforts

to obtain set objectives Policies are instructions for making decision and showrepeated or cycle situations Policies, as anuual objective, are particularlyimportant in implementing strategy because thay can embrace expectations ofstaff and administrators in the organization Policies allow cooperation andinternal consistency between departments of the organizations

- Distributing resources: distributing resources is a central administrationactivity paying to the implementation of strategy Strategy administration allowsresources to be distributed according to priorities which are established due toannual objectives There is nothing causing more harm to strategyadministration process and success of the organization when resources aredistributed in unsuitable ways to priorities pointed out by approved annual

15

objectives All the organiations have at least 4 types of resources which can beused to reach objective.

+ Financial resource

+ Material resource

+ Human resources

+ Technological technique resource

In short, the strategy implementing stage is considered as the mostdifficult one Implementation of strategy requires discipline, devotedness andsacrifice of each individual Success strategy implementation turns around staffpromotion ability of administrators, which is an art other than science Ifproposed strategy is not implemented, it will not serve any useful purpose

1.3 Strategy evaluation stage.

Most of strategy makers agree that strategy evaluation is necessary toreach prosperity of the organization, timely evaluations can alert administrationabout difficulties before a situation become severe

Sufficient, timely feedback is the basis of strategy evaluation which is notdifferent from current information Too much pressure from leadingadministrators can affect lower administrators in discovering data that they think

to be satisfied

Although one or more strategies maybe right, this type of reasoningmaybe wrong as strategy evaluation includes both short term and long termobjectives Stategies do not often affect short term operation result until too late

to make necessary changes We cannot prove a typical strategy to be the best orensure that it can work However, people can evaluate it through severe errors.Richard Rumel recommends 4 standards to evaluate strategy, which are:

+ Consistency

+ Advantage

+ Feasibility

2 Analyzing business climate of the enterprise

2.1 Business climate factors

Good strategy management depends much on the understanding ofenvironment conditions that the enterprise is facing Environment factors havedeep influence as they affect total subsequent steps of the strategy managementprocess Final strategy must be made on the basis of anticipated environmentconditions

17

Implementin

g external control to determine opportunitie

s and threats

Implementin

g external control to determine opportunitie

s and threats

Reviewing business objectives

Establishing short-term objectives

Proposing policies

Distributing production resources

Establishing short-term objectives

Choosing strategies

Chec king and evalu ating

General environment that the enterprise faces can be divided into threelevels: macro environment, operational environment and internal circumstance.Macro environment affects all the business professions, but not absolutelynecessary in a certain way Operational environment is determined to a certainindustry, to all firms in the sector being affected by operational environment inthat industry Many times macro and operational environment combine to eachother and is called external environment or environment beyond control of thecompany Internal circumstance consists of immanent factors in a certainenterprise In practice, enterprise is the synthesis of its internal circumstancefactors Sometimes internal circumstance is called internal environment orcontrollable environment Macro environment contains factors lying outsideorganization, shapes and has influences on operational and internalenvironments, creating opportunities and risks to the organization.

Operational environment consists of factors outside the organization,orienting competition in the sector

Internal circumstance contains internal resources of the organization

2.1.1 Macro environment

Enterp rise

Econo my

Institution

&

legislation

Techn ology

Societ y Nature and

environment

Figure 1.2 Business climate elements

Analyzing macro environment helps enterprise partially answer thequestion: what is enterprise facing?

Although many different matters of macro environment can be discussed,

we choose matters mentioned in table 1.1: economic factor, governmental andpolitical factor, social factor, natural and technological factor Table 2 will givespecific examples on factors that we choose Each factor of macro environmentabove can affect the enterprise independently or in a link to other factors

Table 1.1 Macro environment factors

Economic

factor

Political and governmenta

Viewpointabout livingstandard

Environmenta

l pollution

Cost forresearch anddevelopmentfrom NSNNMoney

funding

source

Regulations

on monopoly

anti-Life style Energy

deficiency

Cost forresearch anddevelopment

in the sectorTendency of

GNP

Laws onenvironmentalprotection

Femalelaborers

Naturalresourceswaste

Focus oftechnologicaleffortsInflation rate Decree-laws

on tax

Aspirationabout career

CopyrightprotectionBank interest Regulations in

foreign tradearea

Consumptionpositiveness

NewtechnologytransferCurrency

policy

Specialbehaviorregulations

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nt rate

Regulationsonemploymentand promotion

Population increase rate

Human,machine use

Financial

policy

Stabilitydegree ofgovernment

Populationdisplacement

2.1.1.2 Governmental and political factor

Governmental and political factors have bigger and bigger influences onoperation of enterprises Enterprises must conform to regulations on tax,lending, insurance, advertising, factory location and environmental protection.Meanwhile, operation of the Government can also create opportunities or risks.For example, some programs of the Government (such as tariff of competitiveforeign goods, tax exemption policy) create growth or existence opportunity forenterprises In contrast, tax increasing in certain industries (such as electronicgame) can threaten profits of the enterprise

2.1.1.3 Social factor

Enterprises need to analyze extensively social factors to identify possibleopportunities and risks When one or more factors change, they can affectenterprises such as: human racism tendency, entertainment taste, ethicalstandard and conception on life style, business community and female laborers

Sociology factors above often change or develop slowly, thus, sometimes

it is difficult to identify them Other changes develop faster if they are caused byany external interruption in social ethical behavior and standard

2.1.1.4 Natural factors

Influences of natural conditions to policy making have been recognized

by enterprises for a long time However, to now, factors about remaining naturalenvironment are hardly paid attention to Attention of enterprises throughbusiness policy-making increases more and more as the public care more aboutthe quality of natural environment

2.1.1.5 Technological factors

There are few industries and enterprises not depending on technologicalbasis that becoming more and more sophisticated Surely, more advancedtechnologies are coming into being, creating opportunities as well as risks to allthe industries and certain enterprises Leading technology development researchand transfer in general are rushing to study new technical solutions to solveproblems and determine current technologies that can be exploited in the market

New implicit competitors

Buyer Supplier

Alternative products

Risk of having new competitors

Price squeeze capacity of good

s supplier

Price squeeze capacity of the buyer

Risk due to alternative products and services

Figure 1.3 Relationship between factors in operational

environment

As the general influence of these factors is often real reluctance to allenterprises, the key to propose a successful strategy is to analyze each of thosemain factors Understanding of competition pressure sources helps enterpriseidentify its strong and weak points related to opportunities and risks that thebusiness faces.

2.1.2.1 Competitors

Understanding of competitors has a special meaning to enterprises due tomany reasons Firstly, competitors decide the nature and level of competition orskill of gaining advantages in the sector depending on competitors Fiercecompetition level depends on the interaction between factors such as the number

of enterprises joining the competition, the growth level of the sector, fixedexpense structure and level of goods diversification The existence of these

factors tends to increase demand or expectation of enterprises to get and protecttheir market share Thus, they make competition more severe Enterprises need

to recognize that competition process is not stable In addition, new competitorsand technological solutions often make competition level and nature change

Enterprises need to analyze each competitor to understand reactionmeasures and actions that they can approve The major parts of analysis ofcompetitors reflect in the following figure:

Current strategy

At present, how

is the enterprise competing?

Figure 1.4 Analyzing competitors

enterprise knows to satisfy customers’ demand better than competitors do.Another key matter is bargaining capacity of customers Buyers can makeprofits of the sector decrease by squeezing price or ask for higher quality andmust do more service job.

2.1.2.3 Supplier

Business enterprises need to have connection to supply organizations ofdifferent goods such as materials, equipment, labor and finance

- Materials and equipment supplier

Materials, equipment-supplying organizations having advantagecan “press” profits by reducing quality of the product or accompanied servicedegree Factor that can increase the strength of supplying organizations issimilar to factors increasing strength of product buyers Specifically:

+ Number of suppliers is few

+ There is no alternative product

+ There is no supplier ordering different products

Choosing supplier bases on analysis data of the seller Need to analyzeeach supplying organization according to factors having important meaning toeach enterprise In certain times, most of enterprises, even effective enterpriseshave to lend capital temporarily from financial community This source can belent in short term or long term or issued in stock When enterprises carry outanalysis of financial community, firstly they need to pay attention todetermining their status compared with other members in the community

Labor source is a main part on the competition environment ofenterprise Ability of attracting and holding competent employees is premise toensure success for enterprise The main factors that need evaluating are laborally, including training and professional qualification, relative attraction level ofenterprise as labor and common salary user

2.1.2.5 Alternative product.

Pressure as alternative product limits the profit potential of the sector asthe sector has controlled high price If we do not pay attention to implicitalternative products, enterprise maybe dropped back with small market share.Thus, enterprises need to continuously study and check implicit alternativecommodities Most of new alternative products are results of technologicalexplosion To gain success, enterprises need to pay attention and spendresources to develop or apply new technologies in their strategy

2.1.3 Internal environment

Internal environment of enterprises consists of all internal factors andsystems of enterprises Enterprises must try to analyze carefully those internalfactors to reduce weak points and uphold strong points to get maximaladvantages Internal factors include:

- Human resources

- Studying and developing production

- Financial accounting

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- Marketing

- General organizational order and discipline

2.1.3.1 Human resources factors

Human resources play an extremely important role in the successfulimplementation of the enterprise Human provides input data to make objectives,analyze environmental context of the enterprise Although viewpoints of generalplanning system are correct to some degree, they cannot bring about efficiencywithout people working effectively

2.1.3.2 Development research factor

Quality of development research efforts of enterprise holds leadingposition in the sector or in contrast, makes enterprise lag behind compared withleading enterprises in areas such as new products development, product quality,and cost price control and production technology Qualifications, experiencesand scientific competence are not enough bases for good research Functionaldivision on research & development must regularly monitor environmentalconditions and vice versa, information on technology innovation related totechnological process, product and materials Effective information exchangebetween development research division and other operation areas has extremelyimportant meaning, ensuring the success of the enterprise

2.1.3.3 Production factors

Production is the operation area of the enterprise closely connecting toproduct making This is one of the main operation areas of the enterprise andthus, it has strong influences on possibilities to reach the success of theenterprise in general and other operation areas

We will consider positive influences of product making with relativelyhigh quality at relatively low cost price Marketing division is profitable as highquality product with relatively cheap price will be more easily sold Financial

division will reduce burden as effective production means to create conditionsfor saving financial sources In contrast, if production is poor, goods may not besold, which will certainly leads to financial loss, causing indifferent attitude tothe staff.

2.1.3.4 Financial accounting factors

The function of the financial division includes analysis, plan making andchecking of implementation of financial plan and situation of the enterprise.Small enterprises can use an employee to take charge of total financial issuesand hold concurrently position of an accountant, who keeps accounting book,administrator or financial administrator; big enterprises can organize manydepartments such as department of finance, accounting, budget checkinginvestigation, etc

As other areas, finance area has main responsibilities related to resourcessuch as:

- Seeking of resources including cash flow seeking

- Control of financial spending system under responsibility of financialdivision

2.1.3.5 Marketing factor.

Functions of marketing division include analysis, plan making,implementation and checking of programs, in which, focus is put on training toremain relationship and exchange to customers according to principle of mutualprofit Thus, in general, mission of marketing administration is adjusting degree,time and nature of demand, helping organization reach set objectives and makeeffective strategies on product, evaluate communication and distribute inconformability to the market that enterprise looks forward to it

2.1.3.6 Organizational order and discipline.

27

Each enterprise has an organizational order and discipline orienting formost of jobs in enterprise It affects way of approving decision making ofadministrators, their viewpoint to strategies and environmental condition ofenterprise That order and discipline maybe a weak point preventing strategymaking and implementation or a strong point enhancing those activities.Enterprises having strong, positive order and discipline have more opportunities

to succeed than ones having poor or negative order and discipline do

Enterprise is as a living body – it is human that makes enterprise operateand form meaning and purpose for operation of the enterprise Order anddiscipline of organization is synthesis of experiences, atmosphere of enterpriseand when they combine, they form a “mode where we finish job” In nature,order and discipline of organization, enterprise is the mechanism interactingwith the environment

2.2 Analyzing the business climate of enterprise

2.2.1 Collecting information

The purpose of information collection is to monitor business climate todetermine direction, level, speed and amplitude of change in influences of theenvironment Identification of these environmental factors helps us determineinfluencing capacity of environmental change to enterprise and strategic effort

of the enterprise

It is noted that Steering Committee often disregards informationcollection above after it is implemented Enterprise can collect information in aday, a week or specific time that depends on each type of information needs to

be collected An important thing is overloading of information amount today,extremely important thing is that information collection must know whichinformation is necessary with a correct form

This table is a useful tool for analyzing macro environment, competitionenvironment and enterprise internal situation Synthesis table of business climatesynthesizes factors and evaluates influences and meaning of those factors toenterprise Basic form of synthesis table of business climate is as following:

Table 1.2 Synthesizing business climate

Influences to enterprise Influence

nature

Point offactors

of each factor:

3= high, 2=

medium, 1= low

Classifying influencingdegree of each factor to

enterprise:

3= many, 2= medium,0= no influence

Describin

g natureofinfluence

- Column 1: List most important business climate factors and theircomponents

- Column 2: Classify environmental factors according to their totalimportance degree to the sector

- Column 3: Classify real influence of each factor

- Column 4: Describe influence of each factor

- Column 5: Point for each factor

Through synthesis table above, we can see how each factor affectsenterprise Positive influencing factors will bear positive mark and negativeinfluencing factors will bear negative mark To evaluate nature of factors, wewill have to compare final cumulative result to evaluate

2.2.3 Proposing reaction strategy

29

Here, leaders have had enough conditions to propose decisions, strategicmeasures reacting to opportunities or risks arising in business climate There aremany strategic reaction methods and enterprises can also choose the way of notreacting if opportunities and risks are insignificant Strategies are put forwardbasing on forecasting about business climate and in fact, we may not meet anyenvironment as forecasted In case forecast is not correct, enterprise needs tohave a strategy with high flexibility Need to propose strategies with specificnature.

3 Some evaluation models

3.1 BCG matrix

The main objective of BCG technique is helping strategy administratorknow to identify requirements of different SBU (market share of each strategicbusiness unit) in the category of investment capital BCG consists of 3 steps:

- The company is divided into different SBU, each SBU has prospectevaluated

Comparing SBU on a square matrix of level 2, pointing out prospects

Question mark Star

Profit making cow Dog

Figure 1.6 BCG matrix

Question mark: poor SBU

Profit making cow: SBU working in business have low growth but gethigh market share

Dog: SBU in low growth sector, narrow market share

3.2 HOPER matrix.

Choosing strategy at enterprise level bases on 2 factors which are:competition status and stages in the business life circle Combination of the twofactors helps enterprise determine best strategies corresponding to eachdevelopment stage of the sector

Figure 1.7 Hoper matrix

3.3- SWOT matrix

S (strengths) : Strong points

O (Opportunities) : Opportunities

T (Threats) : Threats

W (Weaknesses) : Weak points

Fluctuation Increasing market

Concentratingmarket or cuttingproperty

Reversing situation orliquidating anddissolving

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Busine

ss

stages

To build SWOT matrix, firstly, we need to tell strong, weak points,opportunities and threats established by the matrix classified according topriority order Next, carry out systematic comparison of corresponding levelbetween factors to create co-ordination level.

Combining S/O collected from the combination between strong points andopportunities of enterprise Enterprise need to use its strong points andopportunities to compete to other enterprises, continuously expand market

Co-coordinating W/O is the combination of weak points of enterprise andopportunities This combination opens to enterprise ability of overcoming weakpoints by taking advantage of opportunities

S/T co-ordination is combination of strong points and threats; it needs topay attention to the use of strong points to overcome threats

W/T co-ordination is the combination between weak points and threats ofenterprise This combination establishes requirement to the enterprise that itneeds to have measure to reduce weak points, avoid threats by setting updefensive strategies

CHAPTER II ANALYSE BUSINESS STRATEGY FOR NINH BINH REAL ESTATE

INVESMENT JOINSTOCK COMPANY

I General introduction about Ninh Binh real estate invesment joinstock company (Ninh Binh REIJC):

1 Foundation, development and function of the company:

Ninh Binh REIJC was established under license No 4485/GP - TLDN date06/3/2006, issued by Ninh Binh People’s committee Business regislation No0364027/GPĐKKD date 12/3/2006 issued by Planning and InvesmentDepartment and officially active since 15/3/2006 Its main function is to:

- Set up, administer and carry out constructional invesment projects: New urbanareas, industrial plant, technical infrastructure, residental quarters, offices for rent,public services;

- Construct civil and industrial projects, urban technical infrastructure,traffic, irrigation, sport, culture and entertainment works;

- Execute building and joining electric wire network and transformerstation, electricity for light and civil (electric line up to 35KV, transformerstation up to 2500KVA);

- Trade in real estate business and hotel; cultural and sport, entertainingservices

- Offer professional advices about constructional invesment, real estateand tourism;

- Trade in other legal businesses

During operation process, the company had constructed many civil,industrial, cultural, sport, medical, infrastructure, traffic and irrigational projects.All of those are highly appriciated by investors and provincial committee Thecompany is also an investor of Housing and Urban Development projects inNinh Binh Such projects can be named as:

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+ Residental quarter at Canh Vo – Sourthest of Dong Thanh Ward– NinhBinh city.

Investor: Ninh Binh real estate invesment joinstock company

Area: 50.000 m2

Total investment capital: 18.29 million VND

+ Residental area at Center Quarter- Ninh Khanh Ward- Ninh Binh cityInvestor: Ninh Binh real estate invesment joinstock company

Area: 97.500 m2

Total investment capital: 48 million VND

+ Residental area at Tan An –Tan Thanh Ward –Ninh Binh city

Investor: Ninh Binh real estate invesment joinstock company

Area: 62.300 m2

Total investment capital: 37.9 million VND

+ Dyke project at Hoang Long river – Nho Quan district

Investor: people’s committee of Ninh Binh provinceTotal investment capital : 30 million VND

+ Spilway project at Dong Truong river – Nho Quan district

Investor: people’s committee of Nho Quan districtTotal investment capital : 15 million VND

+ Binh Minh 2 coastal dyke project- Con Thoi commune – Kim Sondistrict

Investor: irrigational project management board

Total investment capital : 25 million VND+ Ninh Binh Conference center for welcoming Great Festival 1000 years

of Thang Long – Ha Noi

Investor: culture, tourism and sport department

Total investment capital : 100 million VNDAnd many other join-venture projects with other companies.

2 Company’s framework of organization:

2.1 Current organizing diagram:

Organisational model of the company is as follow:

Source: productive project of the company

WORKF

ORCE DISTRI

BUTION

OFFICE

FINANC

E AND ACCOU NTING OFFICE

TRADI

NG OFFICE

CONST RUTIVE ADMINI STRATI

ON OFFICE

PFOJEC

T ADMINI STRATI

ON BOARD

ROOM

OF GENER

AL PLAN

Construction enterprise No 2

Construction enterprise No 4

Construction enterprise No 3

GENERAL ASSEMBLY OF SHAREHOLDES

- Board of manager: 3 people

- Board of director: 4 people

- Supervising board: 3 people

- Company’s office including:

Workforce distribution office: 3 people, administrative office: 5 people,Finance and accounting office: 6 people, constructive administration office:5people, room of general plan: 3 people, trading office: 8 people, projectadministration board: 5 people

- The directly undet units (administrative staffs only) including:constructuring enterprise No.1: 7 people, constructuring enterprise No.2: 5people, constructuring enterprise No 3: 08 people, constructuring enterprise No4: 06 people

According to the organization diagram, it is clear that the company is run

by central administrative mechanism, which means the Company’s directordirectly guide other function offices and smaller units

Company’s offices have the function of assisting and supporting theGeneral Director Manufactures operate under the administration of company’sleaders and have dependent account

Thanks to an orderly and suitable mechanism of a model joint stockcompany, the leaders can assess information flexibly, so that they can have intime direction and adjustation The company are working more and moreeffective at current time as well as in the future

2.2 Labor structure:

 Classification according to age and level of ability: (until 01/01/2009)

Table 2.1 Company’s labour distribution

High quality workforce

General workforce

3 Real estate situation.

Total land area of Ninh Binh Real Estate Investment Joint-stock Company

is administrated and used as follow:

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