ESTABLISHMENT OF BUSINESS STRATEGY OF THANH HOA MEDICAL MATERIALS PHARMACEUTICAL JOINT STOCK COMPANY (THEPHACO)

Capstone project DISSERTATION MBA ESTABLISHMENT OF BUSINESS STRATEGY OF THANH HOA MEDICAL MATERIALS PHARMACEUTICAL JOINT STOCK COMPANY (THEPHACO) Hanoi, August 2011 TABLE OF CONTENTS ACKNOWLEDGEMENT LIST OF ABBREVIATIONS LIST OF TABLES AND GRAPHS Capstone project FOREWORD I Necessity of the topic II Purpose of research of the topic III Object, scope and method of research IV Structure of the topic CHAPTER 1: THEORETICAL BASIS OF BUSINESS STRATEGY 1.1 Concept of business strategy 1.1.1 Concept of business strategy 1.1.2 Classification of business strategy 1.2 Role of business strategy 1.3 Business strategies in reality 1.4 Process of establishing business strategy 1.4.1 Environmental research 1.4.1.1Analysis of macro environment 1.4.1.2Analysis of micro environment 1.4.2 Analysis inside the enterprise 1.4.2.1Analysis and evaluation of resources: 1.4.2.2Analysis of operation of functional divisions of the Company 1.4.2.3Internal factor evaluation matrix (IFE) 1.4.3 Establishment and selection of strategy CHAPTER 2: ANALYSIS OF BUSINESS ENVIRONMENT OF THANH HOA MEDICAL MATERIALS PHARMACEUTICAL JOINT STOCK COMPANY 2.1 General introduction about Thanh Hoa Medical Materials Pharmaceutical Joint Stock Company 2.1.1 Formation and development 2.1.2 Organizational structure of Thephaco 2.1.3 Operation result of Thephaco over the past years 2.1.3.1 Business result and market share 2.1.3.2 Growth 2.2 Analysis of external environment impact on the operation of Thephaco Capstone project 2.2.1 Analysis of macro environment 2.2.1.1 Political and law factor 2.2.1.2 Socio-cultural factor 2.2.1.3 Economic factor 2.2.1.4 Natural factor 2.2.1.5 Inhabitant factor 2.2.1.6 Technological factor 2.2.2 Operation environment of the company (micro) 2.2.2.1 Economic characteristics of the industry 2.2.2.2 Pressure from the suppliers 2.2.2.3 Customers 2.2.2.4 Competitors 2.2.2.5 Pressure and threat from potential competitors 2.2.2.6 Substitute products 2.2.3 Competitive image matrix 2.2.4 External factor evaluation matrix (EFE) 2.3 Analysis of internal environment impact on the business activities of Thephaco 2.3.1 Analysis of Management Model 2.3.2 Analysis of human resources 2.3.3 Marketing activities 2.3.4 Financial - accounting analysis 2.3.5 Manufacturing 2.3.6 Technology 2.3.7 Market research and development 2.3.8 Internal factor evaluation matrix (IFE) CHAPTER 3: ESTABLISHMENT OF BUSINESS STRATEGY OF THANH HOA MEDICAL MATERIALS PHARMACEUTICAL JOINT STOCK COMPANY (THEPHACO) IN THE PERIOD 2011 - 2015 3.1 Establishment of development objective to 2015 Capstone project 3.1.1 Determination of position, vision and objective of Thephaco 3.1.2 Basis for objective determination 3.2 Analysis of business strategies 3.2.1 According to SWOT matrix 3.2.2 According to strategic posturing and action evaluation (SPACE) 3.2.3 According to internal - external factor matrix (IE) 3.3 Preliminary selection of strategy schemes 3.4 Quantitative strategic planning matrix (QSPM) 3.5 Follow-up of strategies 3.5.1 Thephaco market development strategy 3.5.2 Product development strategy 3.5.3 Marketing and communication strategy 3.5.4 Human resources management strategy: 3.5.5 Capital source development strategy 3.5.6 Production technology strategy CONCLUSION REFERENCES Capstone project ACKNOWLEDGEMENT! First of all, our group would like to present our most sincere thanks to the Program Leadership, lecturers of the Center for Educational Technology and Career Development, Postgraduate Faculty - Vietnam National University - Hanoi; USA Griggs University for creating favorable conditions and helping us during the course as well as completing our Graduation assignment with the assigned research topic to the best result At the same time, we are also thankful to the Leadership and related Departments of Thanh Hoa Medical Materials Pharmaceutical Joint Stock Company for enthusiastically providing necessary figures and creating all favorable conditions for us to this topic However, due to limited time, shortcomings in the analysis of the topic are inevitable For this very reason, the group 11 does wish to receive contributive ideas from the Lecturers so that our topic is better and applied effectively in the reality of the Company We hereby undertake that this topic is our independent research The figures and results included in the Assignment are true and of clear origin GROUP OF AUTHORS Capstone project LIST OF TABLES - CHARTS Table 1-1 Chart 1-2 Phases in the strategy construction process SWOT matrix Table 1-3 Table 2-1 Table 2-2 Table 2-3 Space matrix Management apparatus diagram of Thephaco Analysis of financial targets through years Competitive image matrix in the field of pharmaceutical products of Chart 2-4 Chart 2-5 Chart 2-6 Chart 2-7 Chart 3-1 Table 3-2 Table 3-3 Chart 3-4 Table 3-5 Table 3-6 Table 3-7 Thephaco External factor evaluation matrix of Thephaco Product distribution market ratio Production capacity of groups of products of Thephaco Internal factor evaluation matrix of Thephaco Objectives for each year in the period 2011 - 2015 SWOT matrix of Thephaco Space matrix of Thephaco Overall shape of Space matrix Internal - external factor matrix (IE) Strategy proposals in each matrix QSPM of pharmaceutical products - Centralized growth strategy group LIST OF ABBREVIATIONS In this work, terms are understood as follows: Thephaco Thanh Hoa Medical Materials Pharmaceutical Joint Stock Company Capstone project DN Enterprise IFE Internal factor evaluation matrix EFE External factor evaluation matrix SPACE Strategic posturing and action evaluation matrix QSPM GMP Quantitative strategic planning matrix Good Manufacturing Practice GLP Good Laboratory Practice GSP Good Storage Practice GDP Good Distribution Practice GPP Good Pharmacy Practice WHO World Health Organization TRAPHACO TRAPHACO Joint Stock Company PHARBACO Central Pharmaceutical Joint Stock Company No - PHARBACO DHG Hau Giang Pharmaceutical Joint Stock Company Capstone project FOREWORD I Necessity of the topic Vietnam has approached the market economy for more than 20 years, a sufficient period for the enterprises to adopt management methods of market mechanism Strategy management has been regarded as one of the important business philosophies that help the enterprises to gain successes in the long term However, the adoption of this theory must still be considered with most Vietnamese enterprises Thanh Hoa Medical Materials Pharmaceutical Joint Stock Company (Thephaco) was formerly known as Thanh Hoa Pharmaceutical Company, established in 10/4/1961, designed to produce, trade, import and export medicine all over the province and the country For many years of formulation and development, with the motto of highlighting product quality, Thephaco has invested and built the factory to the standard GMP - WHO, GLP and created confidence in the national market The trademark THEPHACO is increasingly firm in the pharmaceutical market, some articles have been exported to Russian and Laos Yet, in the present competitive context, especially the participation of foreign companies, Thephaco realizes that it is necessary to prepare necessary resources to adapt to change and sustainable development With such significance, the topic “Business strategy in the period 2011 - 2015 of Thanh Hoa Medical Materials Pharmaceutical Joint Stock Company” is selected the group 11 for the graduation assignment of Master of Business Administration We hope to receive contributions from the Lecturers in the council and all of classmates so that the strategy is actually persuasive and can be applied into real life II Purpose of research of the topic The topic focuses on researching the following issues: - Basic theories about strategy and strategy management - Useful analysis models for strategy formation and selection - Actual performance of strategy of Thephaco Capstone project - Analysis of internal and external environment factors that impact the strategy performance of the company - Appropriate solutions to establish development strategy of Thephaco III Object, scope and method of research - Object and scope: The thesis focuses on researching present strategy management activities for the products of Thephaco and putting forth solutions in the coming time - Method of research: The thesis uses two main types of information, namely primary information and secondary information Secondary information is collected from various sources, remarkably reports on operation and marketing supplied by Thephaco Besides, secondary information coming from open sources in the Internet is also used in the report IV Structure of the topic Chapter 1: Theoretical basis about business strategy Chapter 2: Analysis of business environment of Thanh Hoa Medical Materials Pharmaceutical Joint Stock Company Chapter 3: Establishment of business development strategy of Thanh Hoa Medical Materials Pharmaceutical Joint Stock Company in the period 2011 - 2015 Capstone project CHAPTER 1: THEORETICAL BASIS ABOUT BUSINESS STRATEGY 1.1 Concept of business strategy: 1.1.1 Concept of business strategy: There are many different definitions of strategy, each of them has many different points depending on the viewpoint of each author According to traditional viewpoint, “Strategy is the direction and scope of an organization in the long term: strategy will bring about advantage to the organization through optimal arrangement of resources in a competitive environment in order to meet the market demand and expectation of the capital contributors” According to Alfred Chandler (1): “Strategy includes long-term basic objectives of an organization, concurrently choosing way or process of action, allocating essential resources to carry out such objectives” According to Fred R David (2): “Strategy is defined as means to achieve long-term objectives Business strategy may include geographical development, activity diversification, ownership, product development, market penetration, cost reduction, liquidation and joint venture” According to Michael E Porter (3): “Strategy is the art of establishing stable competitive advantages for defense” 1.1.2 Classification of business strategy: There are many kinds of strategies used in an organization, yet basically, there are three applicable levels of strategy: - Strategy at company level: Putting forth objectives and business activities of the company, creating basic policies and plans to achieve objectives - Strategy at business level: Determining business market of the company, dividing segment and product for each type of market - Strategy at functional level: Determining solutions and plans for each field of business 1.2 Role of business strategy: The management of business strategy will enable the Enterprises: ... ANALYSIS OF BUSINESS ENVIRONMENT OF THANH HOA MEDICAL MATERIALS PHARMACEUTICAL JOINT STOCK COMPANY (THEPHACO) 2.1 2.1 General introduction about Thanh Hoa Medical Materials Pharmaceutical Joint Stock. .. the Chairman of the People''s Committee of Thanh Hoa province on changing Thanh Hoa Medical Materials Pharmaceutical Company into Thanh Hoa Medical Materials Pharmaceutical Joint Stock Company from... (IFE) CHAPTER 3: ESTABLISHMENT OF BUSINESS STRATEGY OF THANH HOA MEDICAL MATERIALS PHARMACEUTICAL JOINT STOCK COMPANY (THEPHACO) IN THE PERIOD 2011 - 2015 3.1 Establishment of development objective