Lựa chọn chiến lược kinh doanh cho công ty cổ phần may sông hồng

LUẬN VĂN Lựa chọn chiến lược kinh doanh cho công ty cổ phần may Sông Hồng BUSINESS STRATEGY SELECTION FOR SONG HONG GARMENT JOINT STOCK COMPANY 1/75 TABLE OF CONTENTS 2/75 LIST OF PHOTOS, LIST Chapter Figure 1.1: Steps in planning strategy Figure 1.2: Companies and other factors affecting business Figure 1.3: Model of five competitive forces of M Porter (Source: Le The Gioi , 2009, Strategic Management, five forces model of competition Porter, tr.106) Table 1.4: SWOT Framework Analysis minimalist Table 1.5: The general strategy by Michael Porter (Source: Nguyen Thanh Thao, "Brand Strategy by Michael Porter theory) Chapter Figure 2.1: Information logo of the Song Hong Garment Joint Stock Company (Source: The Song Hong Garment Joint Stock Company) Figure 2.2: Diagram the organizational structure of the company (Source: The Song Hong Garment Joint Stock Company) Table 2.3 Proportion of products through the year on total revenue (Source: The Song Hong Garment Joint Stock Company) Schedule 2.4: The proportion of products through the years (Source: The Song Hong Garment Joint Stock Company) Table 2.5: List of contracts by supplier (Source: The Song Hong Garment Joint Stock Company) Table 2.6: Summary of business activity indicators (Source: The Song Hong Garment Joint Stock Company) Table July: The key financial indicators (Source: The Song Hong Garment Joint Stock Company) 3/75 Table 2.8: Profit Planning and organization 2008 - 2009 (Source: The Song Hong Garment Joint Stock Company) September Import table textile materials 2002-2007 Figure 2:10 Map of cotton price fluctuations, fabrics Source GSO VN Figure 2:11: Market share (Source: According to statistics of the General Department of Statistics) Figure 2:12 The number of industrial enterprises garment business (2000-2007) Source GSO, in the Yearbook 2008) Figure 2:13 Competitiveness of Vietnam and some countries Source: WEF, The Global Competiveness Report (2007) Figure 2:14 Competitiveness of Vietnam with some countries (Number of ratings 2006: 125, 2005: 116, 2004: 104) (Source: WEF, The Global Competiveness Report (2007) Figure 2.15 Price index for domestic consumption (Source GSO U.S.) Figure 2:16: SXCN value and density of industrial GDP (Source: Ministry of Industry and Trade) Chapter Table 3.1 Location map bedding products buffer the Red River in the market Table 3.2: Structure of employees by level of labor (Source: The Song Hong Garment Joint Stock Company) Figure: 3.3: Structure of the company’s human (Source Song Hong Garment Joint Stock Company) 4/75 FOREWORD Reason for topic choice: The Vietnam’s economy is gradually intergrating with economies of the region and the world, and the business environment for enterprises is also expanded However, the competition is becoming more fierce This creates both business opportunies and potential risks threatening the development of enterprises At present, the Vietnam garment industry plays a role as a principal industry in the process of integration and economic development in the World In the changeable market, ignoring the random element, the main issue affecting the success of the enterprise is selecting a right direction, defining a timely and reasonable business strategy the Song Hong Garment Joint Stock Company is a young enterprise which continuously applies strategic management methods in the real business process in the enterprise and that brough good results Being aware of the importance of planning business strategies which play the pivotal role in the production process of the enterprise; Group of GaMBA01.02 chose the topic: “The business strategy of the Song Hong Garment Joint Stock Company” in order to put the knowledge after studying and research into the business practice Purpose of this topic research is: To clarify some primary theories and methodology on building and implementing the business strategy the Song Hong Garment Joint Stock Company on basis of analyzing and evaluating the situation of production and business as well as the business environment of the Company during the past time Methods and scope of research: 5/75 Researching the business and production activities of the Song Hong Garment Joint Stock Company during the past time and the business strategy for the enterprise in the period of 2010-2012 3.1 Data gathering method: Primary data gathering: by studying, observing the actual operation of the company, personal interviews (with staffs and officers in the company), sending emails, etc Secondary data gathering: from reports, documents, Statistical Yearbooks, information on newspapers, on televisions, internet and previous researches 3.2 Comparison and synthesis method: comparing one figure with the original figure applied to figures of business results, market parameters, average figures, and other comparable figures Comparison conditions are that figures must fit the space, time, economic contents, measurement unit, calculation method, scale and business conditions 3.3 Statistical method in tables: to find out the trend or common characteristics of the analyzed elements 3.4 SWOT method: to find out strengths and weaknesses inside the enterprise, opportunies and threats outside the enterprise This is the key method in strategy planning Research scope: Researching the business and production activities of the Song Hong Garment Joint Stock Company during the past time; building business and production development strategy of the Company in the period of 2010-2012 Contents and structure of topic: Structure of this topic includes three parts: Chapter 1: Basic theories on the business and production development strategy Chapter 2: Real situation of the business and production development strategy of the Song Hong Garment Joint Stock Company 6/75 Chapter 3: Business strategy of the Song Hong Garment Joint Stock Company till 2012 and solutions We would like to express our sincere thanks to .for wholehearted help during implementing this topic CHAPTER BASIC THEORIES ON THE BUSINESS AND PRODUCTION DEVELOPMENT STRATEGY 1.1 CON CEPT AND ROLE OF STRATEGY 1.1.1 Concept: According to Micheal Porter “Strategy is the study to find out a suitable competitive position in an industry, a scope of main activities where competitiveness occurs.”According to William F.Gluek: “Strategy is an united, overall and coordinated plan and designed to ensure that basic targets of the enterprise are achieved successfully” The term “strategy” is often used with three common meanings: The first: being general operation programs and deploying principal resources to achieve targets The second: being targets of the organization, resources used to achieve such targets, operating policies for collection, use and arrangement of such resources 7/75 The third: determining long-term targets and selecting ways for operation and allocating necessary resources to achieve such targets Strategic management: is the science and art of the strategy in order to build the direction and business targets, deploying and implementing short-term and longterm plan based on available resources to help each organization to achieve its longterm targets Due to different approaches to the strategy, then there are also different concepts about the strategy Thus, so far there has not been a united and general concept about the strateg Here are some concepts: - M.Porter said: “Strategyis the art of building strong competitive advantages for defence” - Alain Threatart said in the “Strategy of the Company” that: “Strategy is the art of the enterprise to fight against competitiveness and to win the victory” - “Strategy is to sketches long-term and sold development orbits, of which decisions and exact actions of the enterprise can be arranged” It is the concept of Alain Charles Martinet, the author of the “Strategy”, who won the prize of Havard L’expandsion in 1983 … In general, the above mentioned concepts about the term “Strategy” includes and reflects the following issues: + Target of Strategy + Implementation duration + Process for making the Strategy + Competitive environment + Advantages and weaknesses of the enterprise in general and for each activity in particular + Measures and the way to achieve the target Thus, we can see that the Strategy of the enterprise is a “product” combining what the environment has? What the enterprise can? And what the enterprise want? 8/75 1.1.2 The role of the business strategy in the enterprise’s operation Strategic management is a direction to help these organizations overcome challenges in the market, reach the future by their efforts and ability It is really a management science, because if organizations develop a good management process, they will have a good base to go forward Strategic management helps an organization be more active instead of being passive in planning its future It allows an organization to be proactive and to influence the environment in which it works, and thus it makes use of its ability to control variables Strategic management creates important awareness for each person Both the directorate and employees understand and are committed to implementing the targets of the enterprise Once everyone in the enterprise understands what and why the enterprise is doing, then they feel that they are a part in the enterprise and they will commit to supporting all activities of the enterprise 1.1.3 Strategy levels: In any organizations, strategies have existed in several different levels – expanding from the entire enterprise (or a group of enterprises) to each individual working in it + Enterprise strategy : is a company-level strategy serving the purpose and overall scope of the organization to meet expectations of capital contributers + Business strategy – More related to how an enterprise can compete successfully on a specific market + Function strategy – are strategies supporting the business-level strategy to be implemented effectively thanks to components in the aspects of resources, processess, human resources and necessary skills + Global strategy (international business) – is the choice to face with international business issues when the enterprise diversifies its operation beyond the national border 1.2 Building the business strategy of the enterprise Process of building the business strategy 9/75 The process of building the business strategy is also the process of planning the business strategy, summarized in the following diagram: Figure 1.2 : Steps in planning the Strategy * Identify functions and tasks of the enterprise The first step is to indentify functions and tasks of the enterprise In fact, it is to define the mission, vision and strategic targets of the enterprise Mission: Mission of the enterprise is a concept to define purposes of the enterprise, reasons for the establishment of the enterprise and basis for its existence and development Mission of the enterprise is the manifesto of the enterprise for the society It proves the usefulness and significiance in the existence of the enterprise for the society Vision: Vision is the main purposes which the enterprise wants to achieve in the long-term period ( usually from 1- years) Strategic targets: Targets are understood as the goal which should be achieve Each enterprise as well as its parts has its own target The target of the enterprise can be defined for the whole process of existence and development but can only add to each stage of development The system of strategic targets are goals which the enterprise defines in a certain period 10/75 - Meeting consumers’ demands: studying and defining customers’ demands for basis of increasing the ability of satisfying customers’ demands Since then the company pay attention to after-sale services, promotion, etc The company gives out the following methods for meeting customers’ demands: + Applying modern technique and technology, seeking best sources of materials to ensure the product quality + Training sale profession for staffs, pay much attention to sale and after-sale services Target customers are classified into two categories: High income customers and customers are middle income: Material mainstream 100% cotton with colorful fresh and elegant pattern includes several enhancements: blankets summer collection, winter collection blanket, pillow pair, pillow menu, pillow title, knee bolsters - For the group of high-income customers: 2009, the Song Hong Garment Joint Stock Company launched three product lines include Luxury, Home, Classic and consistent with many subjects and ages In each line of quality products and still be useful to maintain and ensure the category of rich colors and impressive than in previous years, especially product line Luxury class shows remarkable With other materials meet European standards, protection of health and environment friendly This is a special collection of carefully refined in every detail of style and design Accordance with the furniture, expresses the aristocratic, elegant, refined • Use cotton print fabric, solid cotton, satin cotton, soft cotton, Poly jacquard is imported, high quality color graphics are more elegant, harmonious • Applying modern technology delay embroidery, rich style • Texturized embroidery unique, luxurious, with aesthetic, furniture suitable for all families 61/75 - For group customers have average income: The company continues to maintain and continuously improve the quality of the product line Home and Classic Continuous improvement models while saving money to meet the needs of the customers agree Target market products blanket, pillow cushion focus on the North and North Central Vietnam Especially the Red River Delta Market share of the blanket, pillow cushion of the Song Hong Garments joint stock company, According to a report summarizing the company's annual Red River from may 2006 to 2009, the company's market share may account for the river rose between 14% to 17% Reason for selecting the combination of two strategies for beddings : - From external view: In Vietnam, there are not many companies specializing in beddings Most of the market shares are of Chinese and Korean products The strategic direction is to focus on investing in these products to boost the movement “The Vietnamese use Vietnamese products” In order to compete with cheap products of China and of other countries, the company must have a right direction In addition to product differentiation, the company must meet the price requirement for its products - From internal view: the Company invests in modern technology line to serve for the production and also staff team With large scaled production, automatic production, big quantity of inputs, the company enjoys price preferences for inputs It is able to combine the two above strategies for beddings 62/75 Big differentiation Song Hong Normal Korea China No differentiation Low price High price Diagram for locating Song Hong beddings on the market Solutions: * Solution groups for cost reduction: - Seeking and using on-spot sources of materials At present, the company studies to produce materials with low price and substitutes of imported materials Song Hong company is located in Nam Dinh province, the cradle of the textile industry of Vietnam In recent years, Nam Dinh knitting factory changes production technology to improve product quality Thus, instead of importing foreign mateials, we signed contracts with Nam Dinh Knitting Factory for supplying garment materials of which quality meet the EU standard Utilizing source of materials in the local, the company saves a great amount of cost for importing and delivery that lead to the decrease of product price and contribute to the product competitiveness - Automatic production helps reduce labor forces and reduce cost for labor forces - Applying clean production solutions to save inputs, reduce cost, 63/75 - Complete organization mechanism in the company * Solutions to product differentiation: - Investing in developing teams of designers - Conduct market research to study customers’ taste - Designing and building logo, brand which are easy to remember and product differentiation (gaining the EU standards) and must be written on product labels so that customers easily remember, easily understand and believe in product differentiation - Brands for products and materials must be hard to imitate to keep the product differentiation in a long time Competitive advantages of the Company when combining these two business strategies : - Ability to design products to increase product efficiency, such as making one more small part to shorten the assembly process - Well qualified in production - Efficient distribution channels - Ability to research and approach leading scientific achievements - Product research and development (R&D) which is skilled and creative - Ability of expressing strength of products to customers successfully - Reputation about quality and renovation ability of the enterprise 3.1.3 Regarding FOB products, the company use Product differentiation strategy combined with delivery-time Strategy in foreign markets Reasons for selecting the combination of the two above costs for FOB products : - From external view (industry prospects) : The Vietnamese textile industry is in the ninth position of top 10 garment exporters in the world but the growth speed is much lower than other Asian countries It is about 20-30% due to many processing goods (China is 80%, Indonesia is 48%) 64/75 This situation requires the Vietnamese garment enterprises must improve the export value of FOB goods in order to reduce the processing rate and increase the export value This is also the solution to overcome difficulties caused by the global economic depression At present, Song Hong company is still making FOB goods but at primary level Strategy of the Company is to improve the implementation of FOB to a new stage, not only processing but also developing products of good quality which are accepted by the world leading companies The company is determined to fight against the price reduction from exporters - From internal view: The company has been implementing different for products But to be able to compete with goods from companies in the FOB as well as those of other countries, it requires more advantages with superior competitive advantage The company invests in modern technology line to serve for the production and also staff team With large scaled production, automatic production, big quantity of inputs, the company enjoys price preferences for inputs Product differentiation strategy : FOB products of the company are of high quality serving for well-paid customers, officers and high-ranking officers in the society Currently the company is production FOB for famous fashion of the world such as GAP, Old Navy, Timberlands, JCPenny, Diesel, Spyder, Champion, Sag Harbor, Liz Claiborne, Reset, Cabela's, Benetton, C & A Target customers: The contract from the well-known fashion, with the FOB contract with the long-term Current FOB in Vietnam New-only beginning, not the self must still purchase materials as directed So the goal towards which the company is production level higher Target market: EU and Japan: this is a market of high income customers, strategies differ from the chemical company are applied to products of high quality, nice design For this market price is not a worrying issue Therefore need to focus 65/75 the design and quality Consumer psychology of foreign customers are also very different: + Loving high quality products + Consuming unique products to confirm personal characters To implement this strategy, the company must: + Focus on inputs of scientific projects, improving product quality + Establish a marketing team, a team of well qualified and professional designers + Select distribution channel to be suitable with the class in order to build the product brand + Diversify models and designs through collecting information and studying consumption psychology + Apply sale methods and after-sale services - Foreign market: this is the market for high income customers, the product differentiation strategy of the Company is mainly applied to products of high quality and good design In this market, price is not a problem Thus, the company must focus on designs and quality: In order to implement this strategy, the company must: + Boost the market research + Select the brand, build and develop it + Have flexible equipment and machinery for many different product forms + Improve customer services + Invest in building the product image Besides, the company combines the delivery-time strategy in foreign markets This is the strategy to struggle for the foreign markets, especially EU, the USA, Japan, etcl 66/75 With the business and production capacity, the company can meet all conditions for completing orders with soonest delivery time This is the strong point in comparison with other competitors, even Chines ones To implement this strategy, the company must: + Study and apply technology in large scaled production, invest in modern machinery of famous suppliers, etc + Boost and advertise products + Implement programs on production management + Focus on developing the management in business and production Competitive advantages of the Company when combining these two business strategy : - Ability to design products to increase product efficiency, such as making one more small part to shorten the assembly process - Product research and development (R&D) which is skilled and creative - Ability of expressing strength of products to customers successfully - Reputation about quality and renovation ability of the enterprise Solutions: * Solutions to product differentiation: - Investing in developing teams of designers - Conduct market research to study customers’ taste - Designing and building logo, brand which are easy to remember and product differentiation (gaining the EU standards) and must be written on product labels so that customers easily remember, easily understand and believe in product differentiation - Brands for products and materials must be hard to imitate to keep the product differentiation in a long time 67/75 3.2 Solutions to implementing business strategy of the song hong garment joint stock company 3.2.1 Regarding time : 3.2.1.1 Long-term: - Study and develop new customers, new markets - Plan for new products: - Using capital in efficient way - Enterprise location and development 3.2.1.2 Medium-term: - Plan for product sale: completing the regulations for the product consumption system nationwide - Production pland and budget estimate: more channels for capital loans: bank loans, raising capital from shareholders, etc - Arrange personel in each department so that it is suitable for management - Analyse action plan 3.2.1.3 Short-term: - Entrust tasksc (based on item 4.2 of ISO 9002) - Invest in renovating technology - Cooperate with Vietnamese Garment and textile association, better the website for advertisement - Register brands and designs in accordanc with international regulations 3.2.2 The internal of the company 3.2.2.1 Market policy : * Strenthening to expand the market The market of each enterprise operating in business and production is really important It decides the existence and development of an enterprise Thus, the first leading task of enterprises is to maintain traditional markets and expand the new ones The company needs to use the following methods: - Product introduction and advertisement on public media 68/75 - Train marketing team and sale team who are able to attract customers with products - Develop the network of shops and agents * Boost the market research - The company must establish a team in charge of the market research Product quality Must meet requirements The company must implement the following issues to conduct the product strategy: - Applying the international quality control system as TQM, ISO, TPS - Managing inputs efficiently - Invest in modern techology lines -Organize the strict quality control - Determine the product structure suitably - Put new products of high quality on the market Beddings are consumer products so they must meet the liking and taste of customers Thus, design is very important The company has to train a team of good designers 3.2.2.3 Policy for researching and developing new products - Develop FOB products - Put new products of high quality on the market Beddings are consumer products so they must meet the liking and taste of customers Thus, design is very important The company has to train a team of good designers 3.2.2.4 Quality control The quality is the golden key to the success of all enterprises in general and of the Song Hong Garment Joint Stock Company in particular All management activities and production process must obey the standard ISO 9001: 2000 Song Hong company always implements: - Invest in and repair equipment to improve the productivity 69/75 - Train employees - Balance materials, sample making to ensure the time for making products and ensure the delivery time - Test the specifications, size, structure and color of 100% of cloth, materials and accessories - Control product quality in all stages - All products must be put under the metal finding machine to ensure that there are not metal on products 3.2.2.5 Marketing activities To expand the market, the Song Hong Garment Joint Stock Company focuses on the following marketing activities: - Program on promoting new products: promotion with products, etc - Sale supporting program: advertisements on tivi, newspapers, public media, and brochures, etc - Assembling billboards and locating showroom in nice positions 3.2.2.6 Price policy To have a suitable price policy, the company must base on production costs, market demand, competitiveness, law, etc Thus, the company needs to have the following measures: - Calculating product cost exactly - Building promotional programs for customers - Setting a price level, which is both suitable with the enterprise’s cost and the price level of competitors 3.2.2.7 Strengthening to raising capital To raise capital for development and investment in the next time, the Song Hong Garment Joint Stock Company needs to implement the following measures: - Boost the relationship with banks and foreign organizations to borrow capital for development and investment - The company should equitize its attached units 70/75 - The company needs to boost the flow of working capital 3.2.2.8 Solution for human resources Total staffs in the Company till 31/12/2008 is 6,200 persons, of which the working knowledge is structured as follows: Table: Labor structure according to working knowledge No Working knowlege Quantity Rate (%) Graduated and postgraduated 178 2,87 % Undergraduated 386 6,22 % Unskilled labor 5.636 90,90 % (Source: the Song Hong Garment Joint Stock Company) Knowledge structure of human resources of the company (Source: the Song Hong Garment Joint Stock company) * Regarding employees: The company must - Improve the knowledge of employees to meet requirements of the science and technique - Organize skill examinations for employees - Implemente labor protection rights as regulated by laws - Take care of the working environment of employees - Ensure the working time and stable salary level 71/75 * Regarding managers: In addition of general requirements, to work efficiently, the company must: - Organize and arrange managers in positions which are suitable with their knowlege and capacity - Arrange the tasks clearly, avoiding the overlaping to cause difficulties when implementing tasks - regularly send young and prospective officers to pregious training centres in and out of the country for training Through this training, they have new viewpoints about the market, catching and treating the information on the market, and new business methods - Annually, the Company organizes profession supporting courses by signing contracts with big universities as the National Economic University, the University for Foreign Trade or foreign professional organizaitons as the US, Japan, Korea, etc Especially, for officers in charge of planning strategies, the company needs to select well-qualified persons who are knowledgeable about the company and the market and have practical ideas for planning feasible strategies 72/75 CONCLUSION The theory and reality prove that the business strategy plays an important role in the enterprise’s operation in the modern economy Operating in the severely competitive industry, the Song Hong Garment Joint Stock Company needs a right business strategy on the way of integration It will help the company to fight against changes in the business environment flexibly and timely Through building the business strategy, the Song Hong Garment Joint Stock Company shall determine exactly the system of targets, policies and methods for the future implementation However, in the changeable business environement, in order to improve the efficiency of applying the strategy into the real business operation, the company should be “flexible”, it means select the most feasible methods to achieve the proposed target Thus, applying the strategy in the real business operation of the Song Hong Garment Joint Stock Company in the next coming time is very important, which needs the determination of all officers and employees This topic cannot avoid mistakes due to limitations of research and time Group of GaMBA 01.M02 would like to express our sincere thanks to opinion of teachers! 73/75 REFERENCES Vietnamese Le The Gioi (2009), Strategic Management, Statistics Publishing House, Hanoi Vu Trong Hung (2003), Philip Kotler "Marketing Management", Statistical Publishing House, Hanoi Nguyen Huu Lam, (1998) "Strategic management: competitive position," Education Publishing House) Nguyen Thanh Thao, "Brand Strategy by Michael Porter theory" Gamba (2009), the Catholic strategic management, www.coe.edu.vn/ / textile Vietnam six months of 2009 and forecast Data, reports of the Song Hong Garment Joint Stock Company Internal Information garment industry of Vietnam 10 Sources on the Internet, magazines Finance magazines Trade magazines Foreign Trade, Vietnam's economy English: Chankim W., Mauborgne R (1997), “Value Innovation: The Strategic Logic of High Growth”, Havard Business Review Dess G.G., Picken J.C., (1999), Beyond Productivity, Amacom, New York Fahey L., Narayanan V.K., (1986), Macroenvironmental Analysis for Strategic Ghemawat, (1991), Commitment the Dynamic Strategy, Free Press, New York John C.H.St, Harrison J.S., (1999), “ Manufacturingbased relatedness, synergy, and coordination”, Strategic Management Journal Johnson G , Scholes K ,(1999), Exploring Corporate Strategy, Prentice Hall Europe 74/75 Makadok R., (1999), “Interfirm Differences in Scale Economies and The Evoluntion of Market Shares”, Strategic Management Journal Porter M.E., (1980), Competitive Strategy, Free Press, New York Porter M.E., (1985), Competitive Advantage: Creating and Sustainabling Superior Performance, Free Press, New York 11, Porter M.E., (1996), “ What is Strategy?”, Harvard Business Review 12, Stalk G., Hout T.M.,(1990), Competing Agains Time, Free Press, New York 75/75 [...]... structure, geographic distribution, community of peoples and income distribution The viewpoint about consumption of goods and services of inhabitants in areas, and the viewpoint about consumption of the sex, age, occupation affecting the formation of the markets and the business strategy The lifestyle affects the demand for goods and services including: types, quality, style and design Population growth rate... Nguyen Duc Thuan Str., Nam Dinh city, Vietnam Nam Dinh Textile- Fashion Producer, exporter 29/75 2.1.2 Organization structure: DIAGRAM OF ORGANIZATION STRUCTURE OF THE COMPANY CONTROL BOARD MANAGEMENT BOARD GENERAL DIRECTOR DEPUTY GENERAL DIRECTOR DEPUTY GENERAL DIRECTOR DEPUTY GENERAL DIRECTOR VP SH2 Admin Dept Org./Labor/ Salary Dept Import-export plan Dept Security guard Dept Accounting Dept Technical... and thus limits the profitability of the enterprise In contrast, if the product of an enterprise has few substitutes, the enterprise may have chance to increase the price and get greater profit Especially, subsitutes may appear inside the enterprise * Price pressure caused by customers Customers become competitive threats when they require cheap price but better quality of products and services that... quality, change payment terms, and delivery conditions, etc affecting the price and product quality that affect the profitability of the enterprise Enterprises must have relationships with suppliers of goods and other inputs such as labor forces, materials and equipment, and finance Elements increasing pressure caused by suppliers are similar to those caused by customers: 16/75 - Small quantity of... of letting customers decide which products they need 24/75 Just-in-time storage system (JIT) can also help reduce cost, improve the quality and reliability towards the Company’s products This is important to differentiated products where the quality and reliability are basic components of the product attraction Taking advantage of development of new products and marketing measures, some companies are... exchange rate and inflation * Science and technology environment Technological changes impact on many parts of the society, mainly through products of the technology process The change of technology environment brings both opportunity and threat The opportunity is to improve the ability to create new 12/75 products of high competitiveness; the threat is to make the life cycle of products depressed directly... structure + Debt coefficient/ Total assets + Debt coefficient / equity 3 Norms on operation capacity Year 2006 1,46 Year 2007 1,40 Year 2008 1,40 1,04 0,90 1,10 0,91 12,67 0,89 9,72 0,84 5,67 34/75 + Net sales/ Total assets 2,0 2,37 4 Norms on profitability + After tax profit coefficient/ net sales 0,009 0,01 + After tax profit coefficient / equity 0,27 0,26 + Profit coefficient from business 0,0095 0,012... the industry * Culture and society environment This environment includes social attitudes and cultural values, social changes also create the opportunities and threats An enterprise wants to exist together with time, with partners and be accepted by the society, then it must highly appreciate business culture Cultural and social values create the foundation of the society, thus it often lead to changes... culture and society, demography, politics and law, and the global * Economy environment Status of the macroeconomic environment determines the healthiness and prosperity of the economy, it always makes impacts on enterprises and the industry The economy environment shows the nature and direction of the economy, in which the enterprise works Impact of the economy on a company can change the ability to create... differentiation may be high or low depending on whether the company focuses on the cost leadership strategy or the product differentiation strategy For a group of customers, the company of focus finds the way to meet each market segment, not meet the whole market as of the cost leader or meet most of market segments as of the company of differentiation The company of focus may pursue a particular ability depending