Luân văn thạc sĩ chiến lược phát triển thảo dược tại công ty cổ phần traphaco

Luân văn thạc sĩ chiến lược phát triển thảo dược tại công ty cổ phần traphaco Luân văn thạc sĩ chiến lược phát triển thảo dược tại công ty cổ phần traphaco Luân văn thạc sĩ chiến lược phát triển thảo dược tại công ty cổ phần traphaco Luân văn thạc sĩ chiến lược phát triển thảo dược tại công ty cổ phần traphaco Luân văn thạc sĩ chiến lược phát triển thảo dược tại công ty cổ phần traphaco Luân văn thạc sĩ chiến lược phát triển thảo dược tại công ty cổ phần traphaco Luân văn thạc sĩ chiến lược phát triển thảo dược tại công ty cổ phần traphaco

ACKNOWLEDGEMENTS 1

OVERVIEW 2

CHAPTER I: 6

GENERAL THEORY OF BUSINESS STRATEGY 6

1.1 The concept and the role of the business strategy to the enterprises: 6

1.1.1 Some concepts of business strategy: 6

1.1.2 Kinds of strategy 7

1.1.3 The role of business strategy 8

1.1.4 The models of business strategies: 9

1.1.4.1 Linear strategy model: 9

1.1.4.2 Adaptation strategy model 9

1.1.4.3 Interpretive strategy model 9

1.2 The process of planning the overall business strategy 10

1.2.1 Strategic planning (choosing missions and major targets of the enterprise) 10

1.2.1.1 Vision: 11

1.2.1.2 Mission: 12

1.2.1.3 Business goals: 12

1.2.2Analysis and evaluation 12

1.2.2.1 External environment: 12

1.2.2.2 Analysis of the enterprise's internal environment: 12

1.2.3 Choosing the business strategy: 14

1.2.3.1 - BCG method: 15

1.2.3.2 - SWOT analysis method: 15

1.2.3.3 – SPACE matrix method 16

1 3 The stage of checking the strategy 16

1.4 Using the strategy analysis techniques to Analysis the current situation of the enterprise 17

CHAPTER II: 19

THE CURRENT BUSINEES SITUATION OF TRAPHACO HERBAL MEDICINE 19

2.1 Overview of Traphaco joint stock Company: 19

2.1.1 General introduction about the company 19

2.1.2 Development process 20

2.1.2.1 Major lines of business: 20

2.1.2.2 Operational status: 20

2.1.2.3 Facilities 22

2.1.3 Summary results of operations TRAPHACO 23

2.1.3.1 Business situation 23

2.1.3.2 Public investment 24

2.1.3.3 Work Management 25

2.1.3.4 The listing and share issuance 25

2.1.3.5 Other work 25

2.2 Status of active pharmaceutical product development east of the Corporation Traphaco 26

2.2.1 Current situation of Marketing: 26

2.2.2 Development of herbal medicines: 26

2.2.2.1.Phamaceutical products portfolio: 27

2.2.2.2 Product category 28

2.2.2.3 Quality and Indications of the product: 28

2.2.2.4 Packaging, labels 29

2.2.3 The advantages and difficulties in product development activities of large pharmaceutical companies shares Traphaco: 29

2.2.3.1 Advantages: 29

2.2.3.2 Difficulties: 30

2.3 Facility development strategy of herbal medicines Corporation Traphaco: 30

2.3.1 Analysis of external environmental factors: 30

2.3.1.1 Macro environmental analysis PESTLE model 30

2.3.1.2 Environmental sector analysis 32

2.3.1.3 Competitive Analysis of internal branches in the model of Michael Porter 35

2.3.2 Analysis the internal environment according to the model of value chain: 41

2.3.2.1 Human resource Management 41

2.3.2.2 Infrustration 43

2.3.2.3 Research and development 43

2.3.2.4 Technology: 44

2.3.2.5 Trademark and Marketing activities 45

2.3.2.6 Analysis of financial resource 48

2.3.2.7 Strengths and weaknesses 53

2.3.3 Analysis the model of SWOT, BCG and Space matrix: 54

CHATER III:STRATEGY DEVELOPMENT HERBAL MEDICINES OF TRAPHACO JOINT STOCK COMPANY 2015-2020 60

3.1 Strategy for the development of herbal medicines at Traphaco in the period of 2015-2020: 60

3.1.1 Choose the strategy 60

3.1.2 Strategic target and orientation 63

3.1.2.1 Vision and strategic target of TRAPHACO 63

3.1.2.2 Strategic orientation 65

3.1.2.3 Solutions to implement the strategy 67

3.1.2.4 Deploying route 73

3.2 Recomendation 75

3.2.1 For the Traphaco Corp 75

3.2.2 For the Vietnam Pharmacy Management Department 76

CONCLUSION 77

REFERENCES 78

List Figure and table

Figure

Figure 1.1:Three levels of strategy in the business 7

Figure 1.2: The process of planning 10

Figure 1.3: The process of planning business strategy 11

Figure 1.4: Four blocks create competitive advantage 13

Figure 1.5: Macro environment 14

Figure 1.6: BCG matrix 15

Figure 1.7: SWOT Matrix 16

Figure 1.8: Space matrix 16

Figure 1.9: Basic stages of strategic administration 18

Figure 2.1:EPS and Growth of revenue at Traphaco 25

Figure 2.2: Revenue of consuming the pharmaceuticals and average 34

Figure 2.3: Traphaco's market share in Vietnam's pharmaceutical industry 37

Figure 2.4: Traphaco's market share in Vietnam's pharmaceutical industry 37

Figure 2-5 Model of value chain 42

Figure 2.6: Structure 43

Figure 2.7:Revenuse structure by products 49

Figure 2.8: Cost price structure and the average gross profit of products 50

Figure 2.9: BCG MATRIX 58

Figure 2.10: Space Matrix 59

Figure 3.1:Structure of Gross Profit according to the product 66

Table Table 2.1: Remarkable Achievements: 22

Table 2.2: Growth speed 2006-2010 24

Table 2.3: Products portfolio: 27

Table 2.4: Brands of expanded category 28

Table2.5: System of quality standard applied at TRAPHACO 29

Table 2.6: The product groups brand extension 30

Table 2.9: Effective criteria 2006-2010 51

Table 2.10:Operation capacity 2006-2010 52

Table 2.11:Capital structure 2006-2010 52

Table 2.12: Solvency 2006-2010 53

Table 2.13: Profitability 2006-2010 53

Table 2.14: Analysic SWOT 55

Table 2.15: External Factors Environment (EFE) of Traphaco Company in comparison with competitors (in the Herbal medicine) 58

Table 2.16: Internal Factors Environment (IFE) of Traphaco Company in comparison with competitors (in the Herbal medicine) 59

Table 3.2: Specific business plan of the herbal medicine to 2015 65

To complete our Capstone Project Report, Group 5 – Class M0709 would like

to send our sincerely thanks to:

- The professors, and the doctors of the master training program in Master ofBusiness Administration (MBA), held by Griggs University collaborating with theETC, who taught and guided us during the training process

- The academic staff of the Griggs University who guided us in the process ofdoing the research;

- The officers and staff of the ETC belonging to the Postgraduate Department,Hanoi National University;

We also would like to send our sincerely thanks to Traphaco Corporation, theleader board of the Corporation, especially Ms Vu Thi Thuan, Chairman ofManager Board and CEO of Traphaco Corporation who enthusiastically supported

us in the process of implementing the Capstone Project Report

Group Members:

1 Nguyen Thi Muoi

2 Le Thanh Ha

3 Tran Dinh Dong

4 Tran Huong Giang

The 21st century marked the changing of the world in the fields of economy,society, politics, science and technology many new technologies has continuouslylaunched, the regulations on controlling the quality are becoming tighter and tighter,the environment has many unexpected changes, the impact of the spread financialcrisis causing severe consequences in many countries, Besides, the economy ofthe world is shifting to the trend of global integration, so the operations of theenterprises must be suited to the trend of the global economy, and the regional andinternational integration by searching and promoting comparative advantages to win

in an increasingly fierce and intensive competition in the nation, international andglobal

In that context, each enterprise has new opportunities to exploit; at the sametime they have to face much risk should be prevented and limited Therefore, toadapt to business environments with high efficiency and long-term successrequiring Vietnamese enterprises in general and the pharmaceutical corporations inparticular must have a strategic thinking, which means to have a long-term vision toensure the survival and development of the enterprises

Besides, the enterprises trading in the pharmaceutical sector - a particular type

of enterprise, doing business in the health and safety of the community must meet aseries of GMP - WHO requirements (standard manufacturing medicine asrecommended by the WHO) To overcome these challenges and take advantage ofopportunities well require the enterprises in the pharmaceutical industry to choosethe right orientation, to define an appropriate and timely business strategy

Before the general reality of the pharmaceutical manufacturing enterprises inVietnam, and with the desire to offer a highly practical business strategy helping toeffectively take advantage of the opportunity to bring the pharmaceuticalmanufacturing industry of Vietnam to grow and expand to the world With the help

of the staff in Traphaco Corporation, after a process of doing the research, gatheringdocuments, studying and analyzing, the members of group 5 decided to choose and

do the research topic:

“STRATEGIC DEVELOPMENT HERBAL MEDICINES OF TRAPHACO JOINT STOCK COMPANY 2015-2020”

1 Subject of the research:

There currently are two major kinds of medicine on the market; those are herbalmedicine and western medicine However, the proportion of people using the westernmedicine is much higher The lower proportion of herbal medicine does not means itstreating effect is not as good as that of western medicine, but it mainly dues to themedicine using habits of the people, the orientation of the doctors to patients, (becausemost of doctors can enjoys the commissions from the patient's prescription from theforeign pharmaceutical corporations) Besides, the herbal medicines of the domesticpharmaceutical corporations are limited and lack diversity that does not meet therequirements of the patients

According to the survey of WHO for seven groups of common western medicineused in Vietnam, based on the criteria of the type, the name of specific medicine,producer and supplier showed that medical prices in Vietnam are higher from 5 to 40times compared with the general prices in the world (according to online dantri on the26th of June 2010)

Besides, at present, the domestic medicine is only about 652/1.563 of activeingredients, and according to the World Health Organization (WHO), Vietnamesepharmaceutical industry is in development levels between 2.5 to 3 (in theclassification scale from 1 to 4), that means it only produces some of certain genericmedicines and exports some pharmaceuticals, the pharmaceutical enterprises mainlyinvest in manufacturing the common and simple pharmaceuticals only, with muchoverlapping, do not pay attention to invest in production of specialty medicines, orspecial dosages, and generally the enterprises meeting the requirements of ASEANGMP and GMP-WHO are low

With orientation to create breakthrough in technology to apply the products fromnature into the production creating higher value products with good effect from whichdiscovers and exploits the medicinal resources to serve the protection of publichealth The Traphaco Corporation - with 39-year experience in the pharmaceuticalsector has chosen the main business direction is to trade and manufacture the herbalmedicines

Through understanding the overview of the pharmaceutical industry of Vietnam,the achievements and limitations of the pharmaceutical corporations in general, andTraphaco Corporation in particular, the subject of this research is to focus on activities

as well as strategies for developing the herbal medicine at Traphaco Corporation

2 Scope and Objectives of the Research:

This Capstone Project Report Analysis deeply the current status of TraphacoCorporation by positioning the enterprise with the theoretical model to identifyweaknesses and strengths, opportunities and challenges of the enterprise from whichhelp Traphaco Corporation not only have the strategic business plans, but also havesolutions to implement those strategies the most effectively

For this purpose, Group 5 - Class M0709 would like to focus on buildingstrategies for development of the herbal medicines in the period of 2011-2015 atTraphaco Corporation

Through the matrix model of SWOT, our group confirms that the strategy of SO(the combination of strengths and opportunities) is the optimal strategy for theproduction of herbal medicines at Traphaco Corporation What is the objective of thestrategy? What is the content of the strategy? What solutions are placed for theprocess of building the strategy? Will these issues be addressed in this CapstoneProject Report?

3 Research Methodology:

To implement the topic: “STRATEGIC DEVELOPMENT HERBAL MEDICINES OF TRAPHACO JOINT STOCK COMPANY 2015-2020”, our group agreed to use the method ofdata survey, then based on theories studied to Analysis and offer comments, reviews,recommendations to build the strategies for development of the herbal medicines inthe period of 2011-2015 at Traphaco Corporation

General principle for making any decision, or in other words, to make aconclusion on any issue, we must be based on actual surveyed results combined withthe academic theories

This Capstone Project Report mainly uses method of collecting secondary dataincluding:

- Internal data of Traphaco Corporation;

- Sources from books, internet;

- Using some references, documents specialized in domestic and foreign StrategicManagement.

In addition, our group also uses the method of statistical sample, survey, andanalyzing the questionnaires

4 Structure:

Beside the introduction and the conclusion, the Capstone Project Report includes

3 main chapters:

Chapter I: General theory of business strategy

Chapter II: The current business situation of Traphaco herbal medicine

Chapter III: Strategy development herbal medicine of Traphaco Joint Stock

Company 2011-2015

CHAPTER I : GENERAL THEORY OF BUSINESS STRATEGY1.1 The concept and the role of the business strategy to the enterprises:

1.1.1 Some concepts of business strategy:

The term of "strategy" comes from the military field In military, the strategy isknown as: the art to coordinate the military, political, spiritual, economic forcesmobilized to win the enemies, and the basic argument is one can crush its opponents,even a bigger and more powerful one, if one can lead the game and put the opponents

on the favorable battle-field for deploying the capabilities (advantages) Today, thebusinessmen consider the market as the battlefield, so the term of "strategy" has beenused so much in business

Although the term of business strategy has appeared for a long time, there has noreally an accurate and complete concept According Michael E Porter professor ofHarvard University: "Business strategy is the art to create the competitiveadvantages" Thus, business strategy is one of the means to compete among theenterprises, it is a measure for the enterprises to achieve business goals by creatingand building the competitive advantages meaning to create or build up the strengths,opportunities, risks and challenges then find out appropriate solutions to win in thebusiness (Source: Curriculum of Strategic Management, MBA, Griggs University).But according to the consulting staff of Boston Consulting Group (BCG): "thebusiness strategy is the allocation of available resources for the purpose of changingthe balance of available resources of the enterprise, and gain the competitiveadvantage", that means the enterprises from analyzing their resources, and theirdepartments to allocate the resources the best from which give out the goals, andmeasures to achieve goals with the highest efficiency creating the competitiveadvantage (Source: Curriculum of Strategic Management, MBA, Griggs University)

In the definition of Mintzberg's 5 Ps generalizing the aspects of StrategicManagement as follows:

+ Plan: series of the consistently planed actions

+ Pattern: Consistency of behavior over the time, it may be planned or not

+ Position: Match between the organization and its environment

+ Perspective: the ways to be aware of the world deeply

+ Ploy: specific way to assess the opponents

Quinn introduced the concept: "strategy is a pattern or a plan integrating the majorobjectives, policies and sequence of actions into a closely cohesive group" (Source:Quinn J B (1980)

Thus, the strategy is aimed at outlining the future image of the enterprise, and toachieve that firmly, the enterprises need to have the appropriate decisions and theconsistent actions to achieve fixed goals In other words, the business strategy is an art

to coordinate activities and control them to achieve long-term goals of the Company

1.1.2 Kinds of strategy

Classify the strategy according to the level of strategy

There are three levels of strategy in the business those are: the strategy or generalstrategy; corporate strategy and competitive strategy

Figure 1.1:Three levels of strategy in the business

(Source: Text book of “Strategic Management”- Global Advanced Master of Business Administration, Hanoi, 2010)

- Sort by strategic-level strategy:

+ Corporate strategies (general strategy) level strategy towards corporateobjectives and overall scope of the organization The objective of this strategy is thatthe targets that the company wants to achieve a quick overview of the entire areawhere the company operates

+ Competitive strategy: regarding how to successfully compete in specificmarkets

+ Functional strategy (or operational strategies) is strategies to help thecompetitive strategies and implement the company offers an effective way toremember the components in terms of resources, processes, the people and the skillsneeded

So, though there are many definitions and classifications of strategies, in generalall of them are in 4 main categories: plans, models, position and perspective To say inother way, the strategy is:

- Where the enterprise tries to achieve in long-term (the orientation)

- What are the markets in which the enterprise has to compete and the operationsthe enterprise carries out in those markets (market, scale)

- How the enterprise operates better than the competitors in those markets(advantages)?

- What are the resources (skills, properties, finance, relationships, technology,facilities) the enterprise needed to compete effectively (resources)?

- Which of the external environment factors affect the competitiveness of theenterprise (environment)?

- Which value and expectations the bosses in and out of the enterprise need(investors)?

1.1.3 The role of business strategy.

Business strategy identified means that the enterprise has to locate itself in theindustry map by answering the questions:

Where is

the enterprises

?

Through this, the enterprise can find its strengths and promote them to create theadvantages and also find the weaknesses to reduce and overcome By locating wherethe enterprises currently, planning the business strategy will tell us where theenterprise wants to get to and how will the enterprise get there The business strategyoffers goals and orientations for the enterprise to operate effectively

if we start a strategy with the offering of the future perspective on the basic of correctassess of the internal, identifying advantages and potentials to locate the enterprisecorrectly and how to achieve the goals with a carefully planned strategy With thefeatures of business strategy reflected in the process, business strategy always has thespirit of offensive and winning in the market and usually planned in long term of 3, 5,

10 years or more, the decision to choose a suitable model will mark the changes fromthe starting steps to success

1.1.4 The models of business strategies:

1.1.4.1 Linear strategy model:

Linear strategy model focuses on the planning activity This model is called linearbecause it consists of the scheduled, oriented operations which follow logical order inthe planning process

Linear model is less used since the strategic factors become increasingly complex,not only because these factors relate to many different management aspects but alsobecause of the changes of technology, economy, and information variables

1.1.4.2 Adaptation strategy model

Adaptation strategy model is defined as focusing on the ability to combineopportunities and threats of the business environment with the enterprise's resourcesand ability of the enterprise to exploit those opportunities

Adaptation strategy is base on suppositions The relation between the enterpriseand the enterprise is closer and stronger than in the linear model Adaptation strategymodel is used more popularly than linear model

1.1.4.3 Interpretive strategy model.

Interpretive strategy model is mainly based on factors of social relations.According to this view, the social relationships consider the business as a combination

of commitment of individuals to cooperate with the spirit of volunteerism Theexistence of businesses depends on their ability to attract personnel with appropriatebenefits for all parties

The strategy in the interpretive model can be identify as a metaphor withorientation or instructing frame allowing the important elements of the organization tounderstand the organization and the surrounding environment On this basis, the

Functions, missions and strategic goals of the enterprise (1)

Analysis of the business environment (O, T) (2)

Analysis of the internal

environment(S, W) (3)

Select the strategy (4)

Strategy of the whole enterprise level (5)

Strategy of business and functional departments

Deploy the strategies (6)

Chec

k an

d as ses

s t

he res ult

s ( 7)

important elements are encouraged to believe and operate in the direction of creatingbeneficial results for the enterprise

A notable difference between interpretive model and adaptation model is theapproach of each in complexity The adaptation strategy tries to solve the complexproblem in the aspect of structure; most notable are the conflicts and changes ofdemand for the enterprise's products The interpretive strategy emphasizes thecomplex problem in the aspect of attitude and awareness of relating parties to theenterprise

1.2 The process of planning the overall business strategy

Business strategy is planned base of the vision of the enterprise, and orienting forall of the enterprise's operations and thus is long-term strategic It consists

Figure 1.2: The process of planning

(Source: Text book of “Strategic Management”- Global Advanced Master of Business Administration, Hanoi, 2010)

1.2.1 Strategic planning (choosing missions and major targets of the enterprise)

The enterprise's missions and major targets offer a context to build the strategy.The missions describe the reason to exist of the organization and points out what itwill do The major targets identify what the enterprise hopes to offer in medium andlong term

The process of planning business strategy above can be summarizing in thisfigure:

STRATEGIC CHOICE

STRATEGIC

ANALYSIS IMPLEMENTATIO STRATEGIC

N

10

Figure 1.3: The process of planning business strategy

(Source: Text book of “Strategic Management”- Global Advanced Master of BusinessAdministration, Hanoi, 2010)

1.2.1.1 Vision:

Vision is a message embodying the corporate core value Represents what is important to the company, and the contribution in terms of business and life, the corporate business principle, corporate position in the world and commitments which

the company will comply

1.2.1.2 Mission:

Mission is a message specifying the Mission as an encouraging target It

describes necessity of the survival improvements for the corporate, creating the

corporate future confidence and orienting to make the impossibility become

possibility

1.2.1.3 Business goals:

The identification of goals was developed from the mission of the enterprise, but

is set up separately and in more detail Goals are identified in medium-term, long-term

1.2.2Analysis and evaluation

1.2.2.1 External environment:

The goal of analyzing the external environment is torealize the opportunities and challenges from the externalenvironment to the enterprise The three types of externalenvironment linked together are: micro-environment,national environment and industry environment in whichthe enterprise is operating

The enterprise identifies the opportunities andchallenges through the analysis of data about changes in the environments where theenterprise is operating or intending to enter Opportunities are market developmentpotential, market space, close to material resource, cheap and qualified humanresource, etc Challenges are narrowed market, fierce competition, policy changes,political instability in major markets or the new technology development making theenterprise's facilities and production line become out-of-date

1.2.2.2 Analysis of the enterprise's internal environment:

The goal of analyzing the internal environment is to find the strengths andweaknesses of the enterprise

The analysis of internal environment is for identifying the basic of competitiveadvantage and explains why in an industry there are some corporations which operatebetter than the others Competitive advantage is the result of one of these factors: thesuperiority in effectiveness, quality, improvement and customer satisfaction Toachieve the superiority the enterprise has to develop the abilities to create the

favorable differences Abilities to create the differences are the result of resources andcapacity of the Corporation

The four blocks create competitive advantage are: Effectiveness, quality,improvement and customer satisfaction

Figure 1.4: Four blocks create competitive advantage

(Source: Text book of “Strategic Management”- Global Advanced Master of Business Administration, Hanoi, 2010)

Abilities to create the difference of an organization are formed from its resourcesand capacity Resources consist of: financial properties, material, personnel,technology and organizational structure The analysis of the enterprise's internalenvironment and the strengths and weaknesses helps the enterprise to identify thebasic capacity to promote and the limits to overcome So the enterprise can built thesuitable strategies to its capacity, to develop its strengths and overcome itsweaknesses, exploit the different ability

General summary: The results of the analysis of internal and external

environment of the enterprise are the results which study and evaluate the businessenvironment on a whole They include the geographical (or political, economical,social, environmental, cultural) business environment, trend of the industry (ortechnology, science, supply source), the situation of the market (demand,consumption, trend forecasting), the situation of the competition (major opponents,potential opponents, advantages and disadvantages, current position and the pursuingstrategy)

satisfaction

Competitive advantagelow cost different

Superior improvementSuperior quality

Figure 1.5: Macro environment

(Source: Text book of Strategic Management PGS.TS Lª ThÕ Giíi, TS NguyÔn Thanh“Strategic Management”PGS.TS Lª ThÕ Giíi, TS NguyÔn Thanh ”PGS.TS Lª ThÕ Giíi, TS NguyÔn Thanh

Liªm, ThS TrÇn H÷u H¶i-Statistical Publishing house 2009 Page 97)

1.2.3 Choosing the business strategy:

The enterprise's strategy is to orient the development and to build the competitiveadvantage base on the studies and evaluations done above The enterprise can chooseone of M.Porter's three groups of strategies:

- Cost leading (lowest cost)

- Centralization ( Focus in a specific market sector or in a specific group ofproducts)

- DistinguishingThe choice of strategy can be done through one of the following methods axis isthe relative market share

1.2.3.1 - BCG method:

The criteria to evaluate an enterprise's attractiveness are the relative market shareand the market's ability to grow Each operation will be located base on these criteria.This matrix has two axes: the column is the market's ability to grow and the horizontalaxis is the relative market share

Bargaining power

of suppliers

Bargaining power of consumers

Rivalry among competing firms

Potential entry of new competitors

Potential development of substitute products

society Global

Figure 1.6: BCG matrix

(Source: Text book of “Strategic Management”- Global Advanced Master of Business Administration, Hanoi, 2010)

Base on the BCG figure with each position we have the following strategies:

Group 1: The enterprise in this group has the leading advantage of market share

and has high growing ability so that it has opportunity to grow well and has stablehigh profitability

Group 2: The enterprise has potential and good competitive ability The solution

for the enterprise is to regularly strengthen the investment efforts to maintain theleading position

Group 3: The enterprise has slow grown speed but still has the advantage of

market share The solution is to avoid investing too much and to predict when toretreat

Group 4: The enterprise has no advantage in market share and grows speed The

solution is to quickly retreat by avoiding using resources or resell to the otherenterprises

BCG's approaching has many advantages so that it's used popularly

1.2.3.2 - SWOT analysis method:

The basic aim of SWOT analysis is to identify the strategies it orients, bringingrelevance or proportionality between the enterprise's resources and capabilities withthe demand of the environment in which the enterprise is

SWOTmatrix

Opportunities(O)

Threats (T)

(S/O)

Combination(S/T)

Weaknesses(W)

Combination(W/O)

Combination(W/T)

Figure 1.7: SWOT Matrix

(Source: Text book of “Strategic Management”- Global Advanced Master of Business Administration, Hanoi, 2010)

The strategy combining S/O is the result of the combination between the mainstrengths and the opportunities The important thing is that the enterprise has to use itsstrengths to exploit the opportunities

The strategy combining ST is the result of the combination between the mainstrengths and the threats In this strategy the enterprise uses its strengths to overcomethe threats

The strategy combining OW is the result when the enterprise uses theopportunities to improve its weaknesses

The strategy combining WT is the result when the enterprise tries to improveweaknesses to avoid threats

Moreover, we can combine using this method with scoring to assess strengths,weaknesses, opportunities and threats of the enterprise correctly

1.2.3.3 – SPACE matrix method

Figure 1.8: Space matrix

(Source: Text book of “Strategic Management”- Global Advanced Master of Business Administration, Hanoi, 2010)

1 3 The stage of checking the strategy

Checking the strategy is the last stage of the strategy management process.Strategy management is the process in which the managers supervise the operation ofthe organization as well as its staff to assess the operations that whether they arecarried out continuously and effectively or not, from which the enterprise will haveadjustment decisions to improve for better efficiency The management contentsinclude: Effectiveness management, quality management, improvement management,and customer satisfaction management

1.4 Using the strategy analysis techniques to Analysis the current situation of the enterprise

Because time is limited so that in the analysis of the enterprise's currentsituation group 5 - M0709 will use some of the models and methods mentioned above

in the process of analyzing the situation, locating the enterprise and planningmanagement strategy for Traphaco Corporation, specifically are:

- PESTLE model in analyzing the macro environment

- Michael Porter's five competitive factors in analyzing the business industryenvironment

- SWOT matrix in summary analysis of internal environment ( strengths andweaknesses) and external environment (opportunities and threats) of the enterprise(using score)

- Analysis the basic value chain so that the enterprise can locate its position andidentify the means usable to deploy the business strategy

- BCG matrix to assess the enterprise attractiveness (relative market share andthe grow capacity)

- SPACE matrix method.

In short, the process of strategic management consists of the basic stages like in the following figure:

goals

Deploy and administrate the chosen strategies

Assess, supervise, improve

Change if

necessary

Change/

improve if necessary

Change/

improve if necessary

Change if necessary

Redo 1,2,3,4 if necessary

Figure 1.9: Basic stages of strategic administration.

(Source: Text book of “Strategic Management”PGS.TS Lª ThÕ Giíi, TS NguyÔn ThanhStrategic Management”PGS.TS Lª ThÕ Giíi, TS NguyÔn ThanhPGS.TS Lª ThÕ Giíi, TS NguyÔn

Thanh Liªm, ThS TrÇn H÷u H¶i-Statistical Publishing house 2009 Chapter I)

Conclusion: A good strategy is a strategy which has high feasible Each enterprisewith different organizational structure has the different strategy deployment, but theimportance is that whether the enterprise can administrate well the chosen strategyand deploy effectively the strategy and bring high values

- Base of the function and mission as well as the analysis of the factors of theinternal and external environment, the enterprise can choose the suitable strategy toitself The analysis process use various analyzing models, tools and predictions willhelp the enterprise to realize the strengths, opportunities, weaknesses, threats, andthen have the right strategic solutions

-In the process of deploying strategy, the theoretical basic of strategy will beapplied in reality, but because of the usual change of the environment and otherhidden factors which cannot be predicted, assessed and Analysis So, mistakes willoccur in the process of planning strategy Then, we have to change and improve tosuit the real situation

CHAPTER II:

THE CURRENT BUSINEES SITUATION OF TRAPHACO HERBAL

MEDICINE2.1 Overview of Traphaco joint stock Company:

2.1.1 General introduction about the company

􀂾 Name: Traphaco Company

􀂾 English name: Traphaco Joint Stock Company

􀂾 Abbreviation: TRAPHACO

􀂾 Charter capital: 102,000,000,000VND

􀂾 Headquarter: No 75 Yen Ninh, Ba Dinh Dist, Hanoi

Board of directors and executive directors

Members of board of directors:

1- Ms Vu Thi Thuan: Chairman of the board

2- Ms Nguyen Thi Mui: Deputy of chairman

3- Mr Nguyen Huy Van: Committee member

4- Mr Tran Tuc Ma: Committee member

5- Mr Hoang Thi Ruoc: Committee member

6- Mr Nong Huu Duc: Committee member

Member of executive directors:

1- Ms Vu Thi Thuan: General Director (awarded KOVALEVSKAIA)2- Ms Nguyen Thi Mui: Deputy of general director

3- Mr Nguyen Huy Van: Deputy of general director

4- Mr Tran Tuc Ma: Deputy of general director

5- Ms Hoang Thi Ruoc: Deputy of general director

6- Ms Pham Thi Phuong: Deputy of general director

Members of supervisors:

1- Mr Nguyen Tat Van: Head of supervisor

2- Ms Nguyen Thi Hau: Committee member

3- Ms Nguyen Thi Kim Hoa: Committee member

Traphaco Company formerly was medicine producing department belonging tothe Railway Medical Company founded in 1972 with the capital of 278 million dongonly, after more than 39 years of operation, TRAPHACO has continuously grown andbecame one of the top 10 pharmaceutical companies in Vietnam, offering jobs for1,000 workers The company is traded on the HOSE with the charter capital of102,000,500,000Vnd

The company has three strategic shareholders those are State Capital InvestmentCorporation, Vietnam Azalea Fund and Bao Viet Fund of Securities with thepercentage of ownership in turn is 36,67%, 5% and 6,16%

Ownership structure of the company includes 36.67% of state ownership, 12.85%

of foreign ownership and 50.48% of the other ownership

2.1.2 Development process

2.1.2.1 Major lines of business:

- Producing and trading in medicine, food, cosmetics, chemicals and medicalequipments;

- Consulting and producing the scientific and technical services, technologytransfer in the medical, pharmaceutical, cosmetics;

- Researching, collecting, growing and processing medicinal herbs

- Trading in, importing and exporting the medicines, the products of medicine;

- The other lines of business as registries

2.1.2.2 Operational status:

TRAPHACO formerly Medicines production Group belonging to the RailwayHealth Service was established on 28.11.1972, with the task of producing plasma,fluids, distilled water for Railway Hospital in the period of resistance againstAmerican

- 01/06/1993, Pharmaceutical Factory Railway (trading as Raphaco) was born,has legal status, own seal, its own account, and operates independently under theGovernment's Decree 388 Number of initial capital is 278 million VNĐ and a team ofover 100 employees Enterprises began to invest and implement policies to attracthuman resources with high quality; labor recruitment is pharmacist Universitygraduate with good, well at the Hanoi University of Pharmacy, along with the signing

of many contract technical staff, collaboration in scientific research, exploration ofmarket research and business organizational structure

In 1994, the organizational structure of medical Railways Department was convertedinto the Health Department of Transport, Rail pharmaceutical factory was renamedpharmaceutical company and medical equipment, supplies and Transport Ministry(name transaction is TRAPHACO) The company added functionality, increasing the

sales counter in the center of Hanoi and began building a distribution system in theNorthern provinces

After years of preparation workshops as well as personnel training, in 1998, theCompany completed pharmaceutical factory in Phu Thuong, Tay Ho, Hanoi and DrugAdministration recognized ASEAN GMP (Good Manufacturing Practice ASEAN) -the first line in the north GMP ASEAN

- 27/09/1999, the Company received Decision 2566/1999/QD - BGTVT of theMinister of Transport transfer State-owned enterprises - Pharmaceutical companiesand medical supplies and equipment into TRAPHACO-stock companies After 3months of preparation, on 01/01/2000, Pharmaceutical Corporation and EquipmentMedical Equipment TRAPHACO officially began operations in the form of joint-stock company with 45% state

-05/07/2001, Pharmaceutical Corporation and Medical Equipment supplies.TRAPHACO renamed TRAPHACO Joint stock company( TRAPHACO)

-01/2004, TRAPHACO completed construction of pharmaceuticalmanufacturing plant in Hoang Liet , Hoang Mai, Hanoi and Drug Administration isrecognized as the standard system of GMP / GSP / GLP -ASEAN

-01/2007, Hoang Liet plant was officially recognized GMP-WHO standards 27/11/2007, TRAPHACO was the 35th anniversary of establishment of the companyand proud to receive second-class Labor Medal by the President of Socialist Republic

Table 2.1: Remarkable Achievements:

2009

The most famousbrand name in thepharmaceutical industry

Young Entrepreneur Association

of Vietnam

2007

Top 100 leadingbrand names of high-quality products ofVietnam

Consumers vote

Economic Block

(Source: Traphaco.com.vn)

+ JSC tech TRAPHACO (TRAPHACO CNC)

+ Company Limited Traphaco Sapa in Lao Cai

- Branches:

- Ho Chi Minh City Branch: 3 / 2 Street, District 10 - Dist Ho Chi Minh

- Da Nang Branch: No 255 Ton Duc Thang - Lien Chieu - Da Nang Branch - Nam Dinh Truong Han Sieu Street, urban Hoa Vuong Str Nam Dinh, NamDinh province

- Thanh Hoa Branch: Lot K1 + K2, Zone 4, New Town North Avenue Le Loi, DongHuong, Thanh Hoa

- Nghe An Branch: Urban Tan Vinh, Ward Tan Vinh, Nghe An City

2.1.3 Summary results of operations TRAPHACO

Traphaco is the pharmaceutical business with many years of experience in theindustry and is one of the leading companies in the popularization and development ofmedicine in Vietnam Traphaco be circulated more than 230 licensed products,distributed in various groups such as the nervous system, liver and gastrointestinal,cardiovascular, analgesic - antipyretic, ear, nose and throat, eyes The products aredistributed Traphaco wide distribution throughout the country

Traphaco are factory management drug GMP in Hanoi and is a shareholder of afactory manufacturing GMP other drugs in Hung Yen Traphaco factories built bymodern design, with systems installed in most advanced equipment imported fromGermany and South Korea, Italy and China

Table 2.2: Growth speed 2006-2010

(Source: Annual Report of Traphaco Joint stock Company 3/2010)

EPS and Growth of revenue at Traphaco

Figure 2.1:EPS and Growth of revenue at Traphaco

(Source: Annual Report of Traphaco Joint stock Company 3/2010)

2.1.3.2 Public investment

- In Business:

We adjust the project to build 75 Yen Ninh offices under the plan to repair thethree-tiered distribution system in Hanoi, convenient for the investors Finished office and warehouse in Nam Dinh went into operation in April 01/2010 Investment decisions offices and warehouses in Nghe An, Thanh Hoa, home officeand warehouse to form the Southern branch sales Carried purchase land in Hai Phong

to prepare construction branch in Hai Phong Total investment is 36.6 billion VNĐ

Have carried out the procedures for land allocation and implementation ofcompensation and leveling of land 4.6 ha in Tan Quang, Van Lam, Hung Yen to beinvested to expand production scale

Company has deployed applications internal network system Initially used formanagement and exchange of documents within companies Ongoing updates tostandardized data sharing in production systems

Investment in infrastructure and technical facilities for the distribution systemand the Vietnam Drug Administration certification practice good medicinedistribution (GDP)

- Outside the enterprise

Performed transfer of SAPA TRAPHACO Co Ltd a member of SAPA onTRAPHACO July of 2009, charter capital is 3.35 billion VNĐ

Revenue

ue

2.1.3.3 Work Management

In 2009, the Board has made the administration as closely supervise theactivities of the General Manager in the implementation of the resolutions of theboard of directors, supervisory work directing and managing activities estate business,

to ensure they reach planned targets in 2009

Also, the Board and Board of Directors also have research and application ofmore advanced management methods in the operations of the Company

2.1.3.4 The listing and share issuance

In 2009, the Board has conducted the company consulted the General Council

on plans for shareholders to issue shares to increase charter capital-funded fromretained earnings The plan was adopted by the shareholders through bonus shares at arate of 25% Under the authorization of the Shareholders, the Company Board hascompleted the procedures for issuing shares, and additional listing and registration ofadditional securities to the number of shares issued.Implementation of treasury stock bonuses to workers and excellent staff in 2008,namely: completed 32,480 bonus shares distributed to officials and employees from25/09/2009 until 02/10/2009 The company has a chartered capital 102.000.000.000VND on 31/12/2009

2.1.3.5 Other work

Successfully organized the 10th anniversary ceremony of equalization is amilestone model evaluation activity of the company after 10 years of equalization, theopportunity for members to understand the TRAPHACO herbal companies

2.2 Status of active pharmaceutical product development east of the Corporation Traphaco

2.2.1 Current situation of Marketing:

- Product Policy: High quality, differences

- Pricing policy: prices high

- Policy distribution: Distribution by the width and depth in the provinces with highincome

* Promotion Policy:

+ Join-sponsored conferences, construction facilities for hospital

+ Participate in ad, introducing products, the company specialized magazines,television and fairs

+ Apply the discount policy stability and reasonable for intermediate distribution + Apply policies for Hospital - Medical Center

+ Looking to expand markets to countries in the region and the world

2.2.2 Development of herbal medicines:

Herbal medicine plays an important role in the business strategy of Traphaco Thecompany is currently focusing the main resources to develop this product line, takeadvantage of Vietnam is available divertive species of herb

2.2.2.1.Phamaceutical products portfolio:

Table 2.3: Products portfolio:

(Source: Website of Traphaco Joint stock Company: Traphaco.com.vn )

(including VAT)

1 Ampelop, blister of

10 soft gels

Box blister of 10 soft gels *box of

9 blisters* package of 48 boxes

72.000

8 Boganic, box of 5

blisters Box 5 blisters* package of 60 boxesblister of 20 soft gels *box of 45.000

9 Boganic, box of 5

film coated tablet Box 5 blisters* package of 60 boxesblister of 20 soft gels *box of 45,000

5 blisters* package of 60 boxes

10 blisters* package of 27 boxes 145,000

42 boxes

45,000

21 Hoat huyet DN,

5 blisters Box 5 blisters* package of 60 boxesblister of 20 soft gels *box of 55,000

without sugar Bottle 48 bottlesBottle of 100ml * package of 23,500

2 blisters* package of 132 boxes 12,000

2 blisters

Box blister of 20 soft gels *box of

2 blisters* package of 132 boxes

36,000

false ginseng, 10

blisters

Box blister of 15 soft gels *box of

10 blisters* package of 46 boxes 60,000

le 48 bottlesBottle of 100 ml * package of 17,000

10 blisters

45,000

2.2.2.2 Product category

Strategy of expanding the category: This strategy is applied by TRAPHACOregularly with the reputed brands and high profit Application of category expandingstrategy is used to diversify kinds of chemist from the initial products of those brands,

as the result in the table below.

Table 2.4: Brands of expanded category

(Source: Marketing of Traphaco Joint stock Company)

tablet, Soft capsule

Film coated tablet

2.2.2.3 Quality and Indications of the product:

Quality and indication of the products are good and supervised strictly according

to the following system of quality management

Table2.5: System of quality standard applied at TRAPHACO

(Source: Traphaco Joint stock Company)

products, materials and ancillary materials

TRAPHACO is currently applying the standard of GMP ASEAN for the factoriesmanufacturing tablet, capsule, powder, atopic, liquid, for the kinds of products do notbelong to the group of beta lactam GMP ASEAN has been applied by TRAPHACOsince 1997 (as the first enterprise in the North)

The company is planning and applying the ISO 9001:2000 for the system ofquality management

2.2.2.4 Packaging, labels

The design and management packages are always focused and companies willing

to invest, especially the packaging, though high cost but good quality and nice design.Use of trade names (also known as names of specific drugs) is applied to theproducts that companies want to develop the brand within a brand Traphaco Trademark protection is used to shape the overall protection of designs, styles, colorsand forms of packaging with the product name Trademark protection to combat thecounterfeit design forms causes confusion to consumers Traphaco used to expand the

brand to a group of products with the same group action Using brand newapplication for new drug effects new headings.

Table 2.6: The product groups brand extension

(Source: Marketing of Traphaco Joint stock Company)

1 Amorvita

Amorvita soft: Tonic contains Vitamin more

Amorvita ginseng: Tonic contains Vitamin andGinseng

Amorvita Hải sâm: containing acid amin, vitamin

3 Tranausea TranauseaTranausea plus

2.2.3 The advantages and difficulties in product development activities of large pharmaceutical companies shares Traphaco:

2.2.3.1 Advantages:

- The company achieved growth at a high level is sustained for many years

- Brand and product business reputation and consumer confidence

- The company is financially sound, low-interest loans to

- Production capacity of the enterprise together with a good quality managementsystem and system manufacturing practices of the business is completed over theyears to apply continuous improvement

- The company has high credibility with its partners

With the strength of the medicine known brand, production capacity, researchand development, independent source of herbs, extensive distribution systems tocustomers and especially the continuous trend of using medicine use, Traphaco willhave the opportunity to strong revenue growth in the coming years and become apioneer in the medicine market in Vietnam

2.2.3.2 Difficulties:

- Be the joint impact of the economy and markets pharmaceutical products inVietnam, making goals, strategies, planning requires coordination with the overallsituation and the enterprise itself

- As the leading enterprises of Vietnam's pharmaceutical industry, especially anEastern brand of medicine, TRAPHACO always chasing the target of acts of unfair

competition such as counterfeit goods, which appeared under the tail edge productscompetition with new products, the effectiveness of TRAPHACO

- The South is a potential market but is not interested TRAPHACO trade promotion

- Distribution system depends on the distribution intermediary should recover debts

2.3 Facility development strategy of herbal medicines Corporation Traphaco: 2.3.1 Analysis of external environmental factors:

2.3.1.1 Macro environmental analysis PESTLE model

a/ Law

Pharmaceutical industry is one of the sectors affected the strongest by themanagement of the state The government has promulgated many legal documents tomanage the pharmaceutical industry including documents relating to the issues suchas:state policy in the field of pharmacy, state management of drug prices, conditionsdrug business, medicine management under the specially controlled list, qualitystandards of drugs, drug-testing facility

On 19/04/2007, Ministry of Health issued Decision No 27/2007/QD- MOH onthe schedule on the principle of "Good Manufacturing Practice (GMP) and" GoodStorage Practice"( GSP) carried out According to this decision, since 01/07/2008, themanufacturing enterprises do not meet the GMP as recommended by the WorldHealth Organization (GMP WHO), and the import-export enterprises andpharmaceutical trading enterprises do not have the storage as the standard of GSP willhave to stop producing, importing and exporting directly Besides, there are alsoregulations such as GLP: "Good Laboratory Practice” of vaccines and biological,"GDP: "Good Distribution Practice" of medicine, GPP "Good Pharmacy Practice” ofmedicine management Those enterprises that meet the standards can exist anddevelop These regulations will make increasing trend of purchasing and merging thesmall pharmaceutical companies into larger companies from which enhance thecompetitiveness of the pharmaceutical companies in Vietnam through focusing ondeveloping under deep way to compete with the multinational companies

The international commitments when integrating into WTO also affect thepharmaceutical industry of Vietnam such as: the tax will reduce from 0 to 0.5%compared with the tax rate from 0 to 10% as before After 5 years, when Vietnambecame an official member of WTO, the tax rate will drop to 2.5%;

b/ Economy

Vietnam is one of the countries with high GDP growth rate in the world (GDPgrowth rate average period from 1990 to 2010 reached 7.38%) and per capita incomeincreased more than 6 % per year from 1991 to level 123USD/person 1200 USD perperson in 2010 put Vietnam ranks of middle income countries Additionally,Vietnam's population of over 86 million people, the average growth rate is quite high,1.25% per year in health spending per capita is lower 18.5USD/person/year again,rising an average 7.4 % years (average expenditure of developing countries topharmaceutical and medical 40USD/person each year) and health care needs of thepeople of Vietnam have been increasingly interested in forecasting the pharmaceuticalindustry so much potential ability to grow

Foreign pharmaceutical firms to manipulate the domestic pharmaceuticalmarket, drug prices, especially the kind of brand-name drugs can not be produceddomestically are pushing prices up and make difficult to control the lives of thepatients even more difficult more difficult

On the other hand, despite the global financial crisis and high inflation rate inVietnam recently has strongly influenced the economy of Vietnam, especially theprocessing industry import and export, financial banking, real estate investors makepeople more cautious and in investment and consumption However, thepharmaceutical industry is one of the less affected by the crisis than most otherindustries, because drugs are considered one of the essential commodities to thepeople

in rural areas, who have a habit of using folk medicines as the tradition On the otherhand, in the world currently, the trend to come back to the nature through using theherbs and drugs derived from the herbs in the health care Therefore, this is a good

opportunity for the development of pharmaceutical industry not only in Vietnam, butalso reaching out to the world.

2.3.1.2 Environmental sector analysis

Scale pharmaceutical Vietnam today are small, industry growth rate is alwayshigh In the period 2000-2009, industry average growth rate of 16% and is forecast tocontinue growing revenue strongly Growth speed of the pharmaceutical industry isestimated to grow 17% per annum during from 2010 to 2015 In 2008, sales ofpharmaceuticals at 1:36 billion, accounting for 1.78% of GDP, up 22% compared to

2007 In particular, domestic production value reached 749 million, up 33.8%compared with 2007, 50.3% meet national needs Estimates for 2009, sales ofpharmaceutical products can reach over 1.6 billion dollars, up 17.6% over 2008 Drugexpenditure per capita increased from 3.16 dollars to 18.05 dollars

Figure 2.2: Revenue of consuming the pharmaceuticals and average

(Source: Vietnam Pharmaceutical Association)

As assessed by the World Health organization (WHO), Vietnam's pharmaceuticalindustry in the developing world Vietnam has a domestic pharmaceutical industry,but most have to import raw materials Like neighboring countries, the pharmaceuticalindustry of Vietnam is subject to poverty Health insurance is not enough and peopleshould not have patients pay more for the drugs they need So until 2009, healthspending in Vietnam is only 1.6% of GDP

Under WTO commitments, the end of 2010 Vietnam's pharmaceutical enterprises arerequired to meet WTO standards on product quality (GMP-WHO), after that periodthe enterprise does not meet standards will be forced to stop production As at the end

of 2008, there were 52% of pharmaceutical companies (including new and medicine)

to achieve GMP-WHO standards, in which some enterprises achieve GLP and GSPstandards, respectively, 51% and 63%

In recent years, the number of domestic pharmaceutical production is increasing,demonstrating growing industry has invested heavily Most pharmaceutical companieshave accumulated large funds from the rise in consumption and partly from theissuance of shares to raise capital, so that domestic enterprises can afford to continuethe private production capacity

Country currently has about 180 pharmaceutical manufacturing companies, 84pharmaceutical manufacturing companies, 89 drug export business, 900 bases of drugdistribution and retail stalls 57.000 Vietnam's pharmaceutical businesses operations

Revenue of consuming the pharmaceuticals and average drug money per person

and production in three major segments: production of pharmaceuticals, medicine,import and export

Medicines are including generic and brand-name drugs Generic drugs are interms of value for 11% of Vietnam's pharmaceutical market and the output of 35%.What about brand of drugs is, Vietnam is hardly produced because of lack of capital,technology and prestige Vietnam's pharmaceutical market tones divided into 15 maingroups In particular, five major groups are accounting for nearly 70%, includingnutrient metabolism, antibiotics, cardiovascular, nervous and respiratory Mostdomestically produced drugs are antibiotics, vitamins and other supplements Vietnammarket drugs only accounted for 50% of total drug consumption, while thepharmaceutical industry in Vietnam is about 90% of the raw materials used inproduction Improving manufacturing, compliance with international quality standardsand partnerships with multinational companies is essential for companies to ensurethat Vietnam plans to offer 60% demand in the domestic market in 2010

Array herbal medicine: is only 0.5% - 1.5% of total output There are about 30%

of the patients were examined and treated by herbal medicine Forecast medicinemarket segments will grow in the future partly because of the habit of using themedicine of Vietnam, partly because the trend back to products originating in thenatural world Medicine is one of the strengths of Vietnam because the country'sNational Medicine has a long history of development, people still preferred herbalmedicinal products derived pharmaceuticals Department of Health has granted aregistration number for the 2000 preparations in herbal medicine production andcirculation in the market

Import and Export: Market share of the imported drugs account for 60% of totalindustry revenue In that group of drugs, nutrition metabolism, cardiovascular,gastrointestinal, anti-inflammatory - analgesic - antipyretic are groups largeproportion of imported and mainly imported from France (the proportion of 19%),Korea ( ratio of 12%), India (11% weight) But drug export market of Vietnam is verysmall, mainly to Russia and Eastern Europe Currently the domestic pharmaceuticalsaccount for only 40% of total sales Objectives to 2010, drug production in thecountry will meet the 60% of the people and demand to 2015 is 70%

2.3.1.3 Competitive Analysis of internal branches in the model of Michael Porter

Pharmaceutical industry is one of the branches in the internal environment of highcompetition When Vietnam joined the WTO, all items are subject to fiercecompetition Pharmaceutical product is special, so competition in the pharmaceuticalmarket is fierce and the attention of the entire society Previously, domesticpharmaceutical enterprises can only manufacture drugs usually compete together in asmall market, now the WTO, foreign enterprises to participate in Vietnam'spharmaceutical market more and more Nowadays, foreign pharmaceutical companiescan not produce and distribute them in the domestic market, but when the timeprotected the pharmaceutical industry will have a competitive environment At thattime, domestic pharmaceutical companies faced with multi-national corporations havemodern technology, high productivity.

Substitutes:

Demand for pharmaceutical products is an essential need therefore unlikely to havealternative products for this item

TRAPHACO POSITION IN VIETNAMESE PHARMACEUTICAL INDUSTRY

a/ Position - market share and competitors:

Traphaco Corporation was assessed as 1 of the 10 leading pharmaceuticalcompanies and has the fifth revenue in medicine manufacturers The companycurrently accounts for 2% pharmacy market and 4.5% domestic medicinemanufacturers