Luận văn thạc sĩ lựa chọn chiến lược tối ưu cho công ty CP vận tải toàn cầu

Thesis MBA SELECTING THE OPTIMAL STRATEGY FOR GLOBAL LOGISTICS COMPANY COMMITTMENT We commit that this capstone project report is our actual work of research on strategy of Global Logistics Service Co ,ltd From experience of the members in the group and one member who used to work at the Global Logistics Service Co.,ltd Data and result mentioned in the capstone project report are true The taken solutions contain many features of learning, rise from actual experience and have not ever been public MAKERS TABLE OF CONTENTS COMPETITIVE STRATEGY FOR GLOBAL LOGISTICS SERVICES COMPANY LIMITED STAGE 2010-2014 Page Cover page Acknowledgements i Committment ii Table of contents iii List of abbriviated words iv List of spreadsheet v List of figures CHAPTER OVERVIEW OF THEORIES IN SELECTING AND vi 12 BUILDING BESINESS STRATEGY 1.1.OVERVIEW OF CORPRORATE STRATEGY 12 1.1.1 Concept 12 1.1.2 Classification of corporate strategy 14 1.1.3 Factors affacting the corporate strategy 16 1.1.3.1.External environment 16 1.1.3.2.Internal environment 19 1.2 STRATEGY FORMATION AND BUILDING 20 1.2.1 Analysis of Strength-Weakness-Opportunity-Threat (matrix 20 SWOT) 1.2.1.1.Basic factors of SWOT matric 21 1.2.1.2 Strategy development procedure base on SWOT 21 analysis method 1.2.2 Role of coporate stratey CHAPTER OVERVIEW OF CURRENT SITUATION IN GLOBAL LOGISTICS COMPANY IN THE STAGE OF 2007 – 2009 26 2.1 INTRODUCTION TO REALITY OF THE GLOBAL LOGISTICS 26 2.1.1 History of formation and development of the Global Logistics 26 2.1.2 The system of organization - management - operation at the 26 company 2.1.3 Technical - material facilties of the company 28 2.1.4 Business scope 28 2.1.5 Customers 30 2.2 ANALYSIS OF EXTERNAL ENVIRONMENT OF GLOBAL 30 LOGISTICS 2.2.1.Marco enviroment 30 2.2.2 Micro enviroment 43 2.2.3 Evaluation matrices 45 2.3 ANALYZE THE INNER ENVIRONMENT OF GLOBAL 53 LOGISTICS COMPANY 2.3.1 Internal factor 53 2.3.2 Maxtrix evaluating internal factors of Global logistics company 56 2.4 ACTUALITY OF CONSTRUCTION OF STRATRGY OF GLOBAL 58 LOGISTICS IN THE STAGE 207-2009 2.5 RESULTS FROM IMPLEMANT OF THE DEVELOPMENT 58 STRATRGIES 2.6 GENERAL EVALUATION ON ACTUALITY OF 61 CONSTRUCTION OF STRATEGIES OF GLOBAL LOGISTIC 2.6.1 Achievements 61 2.6.2 Drawbacks CHAPTER SELECTING THE OPTIMAL STRATEGY FOR GLOBAL LOGISTICS COMPANY IN 2010-2014 3.1.ORIENTATION AND OBLIGATIONS FOR THE COMPANY’S DEVELOPMENT FOR PHASE OF 2010 - 2014 3.1.1.Orientation of the company for phase of 2010-2014 61 63 63 63 3.1.2 The development obligations of the company for phase of 2010-2014 64 3.2.ANALYSIS OF EXTERNAL ENVIRONMENT OF GLOBAL LOGISTICS 64 3.2.1.Matrix analyzing the strength – weakness, opportunity – threat 64 (SWOT) for Global Logistics, 3.2.2.Choosing the development strategy for global logistics 65 company in stage 2010 –2014 3.3 SOME SOLUTIONS FOR CARRYING OUT THE DEVELOPMENT STRATEGY FOR GLOBAL LOGISTICS COMPANY IN PERIOD 2010 – 2014 3.3.1 Solution group on operating procedure 69 3.3.2 Market solution group 71 3.3.3 Customer solution groups 71 3.3.4 Human resource solution groups for development 71 CONCLUSION REFERENCES REFERENCES LIST OF ABBREVIATIONS 3PL Third-party logistics ADSL Asymetric Digital Subcriber Line ASN Adavance Shipping Notice BMI Business Monitor International Ltd CBM Cubic Meter CFS Container Freight Station CL Contract Logistics EDI Electronic Data Interchange f Forecast FDI Foreign Direct Investment FF Freight Forwading FMCG Fast Moving Consumer Goods FOB Free On Board GDP Gross Domestics Product GFF Global Freight Forwarding ICD Inland Clearance Depot ILMS Inbound Logistics Management System JBIC Japan Bank for International Corporation JIT Just In Time NVOCC Non – Vessel Operarting Common Carrier R&D Research and Development SDR Special Drawing Right SWOT Strength-Weakness-Opportunity-Threat TEU Twenty – Equivalent Unit TMS Transporation Management System USD United States Dollar VICT Vietnam International Container Terminal: In Logistics Development Joint Venture Company Number VIFFAS Vietnam Freight Forwarders Association VNĐ Vietnam Dong WMS Warehouse Management System WTO World Trade Organisation XML The Extensive Markup Language LIST OF TABLES AND FIGURES Table 1.1: Strategic viewpoints of Porter Table 1.2: Common points of active and inactive strategies Figure 1.3: SWOT-based strategy development procedure Table 1.4: Logistics services Table 1.5: Governing law on transport Table 1.6: Capital investment structure for sectors of national economy Table 1.7: Reality of exploiting terminals Table 1.8: Information system of some seaports of Vietnam Table 1.9 : Assessment of service infrastructures intended for logistics activities Table 2: Vietnamese, local and global logistics market base on value and growth rate Figure 2.1 : Outsourcing percentage base on industry and form of company Table 2.2 : Matrix of external factors Table 2.3: Operation procedure Table 2.4 : Operation results of the company Table 2.5: Matrix of internal factors Table 2.6: SWOT matrix of global logistics Table 2.7: Quantitive assessment of endogenous growth strategies INTRODUCTION Materials Management of the company strategy is a continuous and active process Thus, revaluation of human resource and core capacity of the company will assist it to keep and its comparative advantages when the environment changes Being a member of the Global Group and having just been established for three years, with its effort, the company has reached some remarkable points as follows: its revenue reaches USD million, the headquarter in Hanoi in initial time, presently, the company has develop a system from Lao Cai, Lang Son, Hai Phong, Thanh Hoa, Quang Binh and Ho Chi Minh City To achieve some results above, the company has had solid steps in the initial strategy suitable with development and renovation of the market However, the author remarked that management of the company strategy brings the tactical, short-term and interrupted features Thus, construction, execution and control of long-term strategy have become necessary for the company, because: • Maintain growth speed and find out new model of development in stage of 2010 – 2014 • Expanding domestic and oversee market with quick speed • Being suitable with change of the open policies of Vietnam for logistics service • Supporting the company in process of investment decision-making to keep its competitive position in long term Therefore, the material is that it is necessary to establish a long-term strategy for the company to maintain its current advantage and catch chances from the Vietnam logistics market Target and research task Orienting goal of the thesis is to construct and take a strategy to the company in the next stage of 2010 - 2014 To implement this task, the important step of the thesis is construction and selection of a standard model of strategy administration for analysis Based on the model, the thesis will evaluate advantages and disadvantages in construction process of the company strategy in the stage of 2007 – 2009 Finally, the thesis must take proposal of development strategy in long-term for the global Logistics in the next stage of 2010 – 2014 on the standard model and results from the actuality of the enterprise Object and range of research Object of research of the thesis is to construct a strategy for the Global logistics • Concentrating only into the strategy in stead of the whole strategy-management process including construction, implement and control of the strategy • Only concentrating into the Global logistics in stead of concentrating into the whole Global group • On time, it is to evaluate the strategy actuality in the stage of 2007-2009 and propose development strategy in time of 2010 – 2014 Method of research The thesis uses the following methods to propose a development strategy of the company • The system method: the thesis uses this method to evaluate all factors which are able to influence the strategy of the company By this method, evaluating the factors to influence the strategy of the company includes internal and external markets of the company • The analysis method of secondary data: is used to research reasoning basis to lay the foundation for establishment of the development strategy of the company 10 • In respect of development strategy The company has gradually formed ideas on development strategies and initially construct the basic factors of the strategies such as development targets, SWOT matrix and development model of the company through development of business plans This is the very important premise in construction of the general five-year strategy of development in the next stage of the company, the stage of 2010-2014 • The factors ensure long-term stability development of the company o In respect of management thinking: the board of directors of the company has understood that deficits and weakness on modern thinking of management Thus, continuous learning, recruitment for high-qualified staffs are one of the focuses of the company in the next stage o In respect of material - technical facilities The company signed a co-operative contract with a prestigious partner in providing services Before that, there was only one official exchange office in Hanoi, until 2009, the company has been expanded in offices These offices are placed at the strategic positions, the commercial centers and large seaports of Vietnam o In respect of human resources and structure The company has established all required divisions for operations of the company o In respect of customers The company has found out and had 20 customers who usually use the company’s services and a large number of customers from the system of oversee agencies o In respect of group of products - services From only providing international marine transportation services, until now, the company has added custom services, domestic distribution o In respect of financial effectiveness First, the business proves to be productive; the capital is preserved Although the growth rate is negative, interests are still generated 57 With the analysis above, Global Logistics has achieved good results in execution of business plans in the stage of 2007 - 2009 The company has got its targets including expansion of customer network, expansion of economic centers, international border gates and large seaports Further, the company has gradually set up the necessary factors for success in the future such as model of operation, human resource and structure of organization, customers, logistics services and strategic partners 2.6 GENERAL EVALUATION ON ACTUALITY OF CONSTRUCTION OF STRATEGIES OF GLOBAL LOGISTICS 2.6.1 Achievements • Gradually setting up strategic ideas and SWOT matrixes through establishment and execution of the annual business plans These are the important premises for construction of a general strategy for the company in the future • Gradually establishing basic operations and business fields in logistics service This makes material foundations for the company’s development in the next stage • Setting up a system of the customers, system of offices in the whole country • Establishing a global agency system • Building strategic relationships for development strategy’s purpose that have not depended on most fixed assets, but using “outsourcing” strategies 2.6.2 Drawbacks However, in the strategy establishing process, the company has met some difficulties as follows: • In the stage of 2007 - 2009, the development strategy of the company has not been made yet, but most annual business plans, which brings more tactical features than stable and long-term growth • There is little strategic thinking in the organization because most of the staff implement tactical tasks 58 • The staff who are competent, confidential, and have vision and try to construct long-term development plans are not found This is expressed through a high ratio of job-changing staff • Growth rate of revenue increase is negative; growth rate is negative • It is difficult to develop the domestic market because strategic partners are short of professional factors in cooperation Logistics market in Vietnam is new Basic services and infrastructure in Vietnam used for logistics activities are weak It is said that, after three operation years, the brand name Global Logistics Service Co., Ltd has got some certain achievements on strategy and efficiency in operation However, in long term, it is possible that the company will not reach the same successes because logistics market in Vietnam has been changing more in open trend causing more critical competition, decrease of profit-to-sales ratio because of pricereducing pressure of customers Therefore, it is necessary to revaluate and construct a long-term strategy for the company to keep achievements when external environment has been changing quickly 59 CHAPTER SELECTING THE OPTIMAL STRATRGY FOR GLOBAL LOGISTICS COMPANY IN 2010-2014 3.1 ORIENTATION AND OBLIGATIONS FOR THE COMPANY’S DEVELOPMENT FOR PHASE OF 2010 - 2014 3.1.1 Orientation of the company for phase of 2010-2014 Global group is a group of companies using the same global trademark, in which its members operate independently on aspects of the organizational structure and finance Its members are only using the same trademark, network systems and support each other during their operations Each company has its own goodwill relating to each field of services though trading in the same industry • • • • Global maritime service co., ltd specializes in shipping brokerage; Global logistics and trading co., ltd specialized in airway; Global logistics service co., ltd specialized in services of seaway; Global railway logistics specialized in rail transport In the future, with the development orientation to become on group of supplying logistics services in Vietnam, relying on the goodwill of every member, Global group shall develop its defective services; gradually improve its service system in order to provide the best services to its customers Together with the orientations of development and become the supplier of value- added logistics services in Vietnam, Global logistics defines the following orientations for its development: Continuously widening its network all over the country, especially from Quang Ngai to the North; Focusing on the development, enhancing the quality of supplied service; Expanding the defective services in the supplied chain; Building targeted markets and strategic markets; 60 Building and developing the relationships with suppliers, exporters and local manufacturers so as to not only enhance the human resource utilization but also create the potential customers in Vietnamese market 3.1.2 The development obligations of the company for phase of 2010-2014 With the above-stated orientations, Global Logistics wishes: • Achieving the growth on revenues and profits with rate of around 15-20% per year during the phase of 2010-2014 With this rate, the company hopes to gain the • revenues and profits of 83 billion VND and 8.3 billion VND respectively in 2014 Further supplying and opening services of value-added logistics with the good competitive position, especially from Quang Ngai to the North This allows the company to improve its profits from domestic customers and avoid any risks • subject to profits from foreign customers Becoming the supplier of package logistics services in Vietnam by using the information technological system and global network 3.2 SELECTION OF CORPORATE DEVELOPMENT STRATEGY IN THE PERIOD OF 2010 – 2014 3.2.1 Matrix analyzing the strength – weakness, opportunity – threat (SWOT) for Global Logistics From the analysis of external and internal environments of global logistics company, it is possible to build up a matrix of strong point – weak point, opportunity – threat for the company as follows: Table 2.6: WSOT Matrix of Global Logistics Company 61 Strong point Weak point - High flexibility in operating activities - Lack of resources such as capital and - Leader with long-live experience in management technology field of operation - The allocation of resources is not - Available at economic centers, concentrated seaports, big border gates in Vietnam - Has not consistent in the operation process - Monopoly at some economic centers - The professional skill of staffs is still weak - Network of agent system on the - Working procedure is not scientific abroad is large and professional - Easy to be volunteered on the whole - The culture of the company is open system due to impact of financial resource and friendly - Has not build up target customer - The age of staff is young and active - Budget for advertising is low - Clear viewpoint about trading - The knowledge of local culture Opportunities Challenges - Large market during the time for - Foreign logistics group is granted license integration into the international to operate in Vietnam economy - The competitors are more and more - The high specialization in trading - The information are more and more public, environment of customer is improved transparency, therefore the competitors have - Many newly emerging markets are opportunities to grasp the information more lacking companies working in field of quickly and sufficiently logistics - Suppliers have more options from the - The development of information market, therefore the risk of breaking up technology, therefore, withdraw the commitments are increasing time of information transfer - The change of workforce quite high, - The volume of goods is highly therefore, it costs more time for the increasing workforce task 62 - Investment of the State on developing - Many expenses on expanding and and trading the logistics services is maintaining the network system highly increasing - The qualification and professional skills at the network systems are still low Source: Summarized 3.2.2 Choosing the development strategy for global logistics company in stage 2010 –2014 Combine with orientations, target and model of current business strategies, global logistics will carry out the strategy of growing from the inside with the base on maintaining external renting for basic logistics services, expanding the system of customers and network Table 2.7: Evaluating orientations of internal growth strategies Class Important factors ificat ion Replacement Internal strategies Most growth investments Attracti Total Attracti intoTotal on of on point of point points External factors Vietnamese economy Basis for points of attraction points is in high growth Investments into infrastructure allow the company to utilize the growing rate of economy 63 Risks of the economy 4 2 Internal growth assists the is high company to avoid risks System of the law will when the economy declines Internal growth will reflect be changeable weaker when the changed laws is in better condition System of 6 infrastructure is in weak and backward Human resource is development Internal growth allows the lack in logistics company to use limited Increasing human resource better Internal growth will make competitiveness of the company not catch competitors growth of competitors when they are focusing on most investment Foundation of 3 9 3 1 important client Awareness on logistics is low Most investments is into capacities and new services while there is no customer This is a risk Establishing some 4 16 strategic suppliers Internal growth allows the company to use resources of the suppliers better It is foreseen that 12 Investments into logistics will be in infrastructure allow the high growth company to use the growing rate of the industry 64 Logistics is new in 12 Vietnamese market Internal growth allows the company gradually expand its services to meet the demand Market of the industry 6 12 is not concentrated Price and factors to select a supplier Investment allows to reduce cost because of its scale Internal factor Operation process is 3 9 12 12 3 managed and controlled closely Results of process management is evaluated in accordance with the quality standards Researching logistics market Determining segments Investment is required to research more 3 9 3 2 of the market and the target customers Carrying out Investments are required to marketing activities strengthen marketing and development activities more business Business staffs 3 execute selling Investments are required to develop personnel more 65 12 Investments are required to have a staffs who are expert in logistics in order to run labour market which has not been completely supplied 6 Vietnamese economy is in high growth Risks of the economy 3 9 is high Repurchasing allows the company to expand products/offering services System of the law will be changeable Good faster investments allow its 3 12 revenue to increase more quickly System of infrastructure is in Good investments will allow 2 weak and backward Human resource is development the company to grow more quickly lack in logistics 8 Increasing Investments are required competitiveness of more assistance of the competitors information technology division Total 195 184 Source: Self-summarized Therefore, during the period 2010 – 2014, Global logistics should continue to choose the model of internal growth strategy in stead of investing into the infrastructure and/or 66 new services capacity Moreover, the logistics services market in Vietnam is still in its early stage of development, whereas the demand of services is still basically and the awareness of benefit from outer logistics services are still little However, in order to improve the capacity of providing its services, global logistics may use its strategic partner to utilize their current strong points on the market and avoid scoping with the investment too much in to infrastructure – inherently accounts for a large part of fixed costs 3.3 SOME SOLUTIONS FOR CARRYING OUT THE DEVELOPMENT STRATEGY FOR GLOBAL LOGISTICS COMPANY IN PERIOD 2010 – 2014 In order to achieve the target and carry out the development strategy of Global logistics Company during period of 2010 – 2014, it is possible to divide in four main solutions as follows: 3.3.1Solution group on operating procedure Continue to provide logistics services which are beyond the expectation of customers via the serious implementation of the operating procedure Find opportunities that improving the competence and operating capacity to meet the procedures/implementing development steps demand which need of the customers improvement, and Define remove procedures/implementing steps which not bring value added for customers And finally, measure the effectiveness of operation base on the specific factors 3.3.2 Market solution group Determining target customers Establish the strong sales workforce with professional skills; combine with the sales workforce of the unit transporting container to offer the package product Change to think more about customers in stead of just doing what the customers arrange Develop the network, services of warehouse/ domestic delivery Improve the capacity of the marketing personnel and sales support workforce Reconsider the mechanism/price strategy And 67 finally, find the investment opportunities which can be approved via joint-venture, strategic partner or purchasing/merging 3.3.3 Customer solution groups Continue to increase the co-operation relations with current customers Provide services of electronic documents Introduce and offer some basic logistics, such as supporting at the plant, verifying the quality Develop the strategic customer management program Finally, develop the logistics services program for producers/exporters in Vietnam 3.3.4 Human resource solution groups for development Change to think more about customers and offering the services within the organization Establish the strategic management group and improve the qualification in managing customers Continue to train and develop staff; especially concentrate in the recruitment process Adequate wage scale for the capacity and the work effectiveness; improve the skill of personnel management for those who managing the customers In order to achieve the high and stable rate of growth and get the competitive advantage against the competitors, global logistics should carry out many works in the period of 2010 – 2014, from ensuring the best process of operation to the development of human resources for logistics The expanding and developing competence/services/operation region/customers will be based on the core capacities of the company, which have been establishing in the last years and the development orientation of the group 68 CONCLUSION Establishment of the company’s a strategy is a process of continuous operations Continuity comes from awareness of the board of directors and all persons of the organization Each person will, at his/her position, by his/her personal approach, have important contributions in planning of a strategy of the organization Moreover, in an quickly changing environment as present, evaluation, amendment or even construction of a new strategy is extremely essential For Global Logistics, a company has been operating in field of logistics on global, changes from the external environment will influence the company strongly Entrance into WTO in 2007 by Vietnam and the economic crisis in over the world in 2008- 2009 have affected deeply and entirely on all operations of the company These effects require the company must implement construction of a long-tern and more stable strategy of development in the future to achieve competitive advantages in long term With this opinion, the thesis has achieved some results as follows: • Selecting a model of strategy construction as the foundation of analysis • Evaluating the performance process of the strategy of the company in the stage of 2007-2008 systematically This evaluation shows actuality in construction of the company’s a strategy, including strengths, weaknesses, opportunities and threats in construction of the company’s a strategy • Taking a development strategy of the company in the stage of 2010-2014, i.e internal growth in instead of investments into material and technical basis Planning a general strategy of the company is a part in the strategy management process Successfully applying a strategy is subject to members of the company, operating process, and external environment 69 It is expected that, with the highly academic and real analysis, in the future, the thesis will contribute its tiny part in the development process of the Global Logistics Company 70 REFERENCES Sources: Michael.E.Porter, What is Strategy? Havard Business Review, Nov-Dec 1996 Sources: Pun and et al, Determiants of manufacturing strategy formulations: a longtitudinal study in Hong Kong, Technovation,Vol 24 No.2 Member of global loistics service company.2008 Sources: Logistics manegement.2008 Sources: Minstry of Transport 8/2009 Sources: The Straits Times,2007 Sources: Datamonitor, Global Logistics, 5/2006 Source: Interna of global logistics- 9/2009 Sources: 12th Annual Third-Party Logistics Study 2007 (Capgemini, Georgia Institute of Technology, SAP, DHL) Sources: Frost & Sullivan.8/2007 Sources: SCM- supply chain Insight, October 2009 Sources: Personnel Management - Nguyễn Hữu Thân quarter III/2008 71 [...]... comparison above, Porter thinks that strategy is a creation of compatibility between activities of the company If this compatibility is unavailable, there is no distinct strategy and it is hard to keep the competitive advantage alive Using the definitions above, it can be deduced that the strategy of the company is a general entity of decisions and activities relating to the selection of means and allocation... consumption tendency of people (2) Social factors deal with believes, values, attitudes, viewpoints, and life styles of people in a society where the company operates (3) Legal and political factors: During creation of strategy, companies often make an assessment about orientation and stability of the legal and political system in which companies operate These factors comprise regulations to which companies... barriers, namely scale advantage, production distinction, capital demand, cost advantage, possibility of access to distribution system, and specific regulations of the Government (2) Strength of provider: provider may influence a specific sector through increased price or decreased quality of provided service/commodity Strength of provider 18 may be achieved by means of monopoly in a sector, uniqueness of... including activities making input fuel and materials output commodities and services Normally, this function includes factors such as process, capacity, inventories, direct labors, and quality This is the core function of an enterprise, so strategists put priority on other activities • Marketing and sales/business development: including activities from researching and defining demands of customers to satisfying... railway transportation, inner-city and suburb railway to take an important role in public passenger transportation, at first, to implement in Hanoi capital and Ho Chi minh City + Seaway: To develop the national seaport systems including International transit port at Van Phong, international gateway ports, deep-water ports at three key economic zones with receiving capability of new-generation container... focus on the investment into international air ports within region of Hanoi capital and Ho Chi Minh city; to study, develop the investments into new international air ports with service scope and quality being equal to great international air ports within region so as to push the exploitation capability of air ports to 3.0-3.5 times in 2020 Resource: Ministry of transport of Vietnam - 2008 The above... companies must consider tham as external factors affecting their business activities Ecological issues are global warming, biodiversity disappearance, air, water, and soil pollutions Micro-environment: Micro-environment proposed by Michael E Porter, a professor of Harvard Business School, becomes popular for strategy planners of companies According to Michael E Porter, there are five factors creating competition... competition becomes more and more vigorous in markets 1.2.1 Analysis of strength-weakness-opportunity-threat matrix (SWOT matrix) This is a traditional approach, which is still useful and popular to strategy managers This approach is based on the project of Andrew and Christiansen made in 1960s at Havard Business School Through one-way approach method, these two authors proposed a series of steps in order,... companies making full use of its strengths and opportunities and reducing weaknesses and risks 1.2.1.1 Basic factors of SWOT matrix Including four key factors: strength, weakness, opportunity, and threat • Opportunity: Including conditions in operating environment having good influences over the company Main tendencies always create opportunities for the company Besides, assessment of markets that the... the company operates in other ways because companies own individual capacities from combination between tangible 23 assets, intangible assets and organization capacity, which they do not have To be considered as resource making core capacity for the company, it requires: o Play an important role in satisfying demand of customers better than other replacement resources o must be rare, meaning that there