BUILDING BUSINESS STRATEGY FOR TOAN PHAT CONSTRUCTION INDUSTRY JOINT STOCK COMPANY

REPORT BUILDING BUSINESS STRATEGY FOR TOAN PHAT CONSTRUCTION INDUSTRY JOINT STOCK COMPANY (TOPACO) VISION TO 2020 VERIFICATION AND ASSESSMENT OF TOAN PHAT CONSTRUCTION INDUSTRY JOINT STOCK COMPANY (TOPACO) Contribution of the research project The research project of group 10 - class GaMBAM0709 not only introduces suitable scientific theoretical points but also makes practical contribution to building business strategy of Topaco Scientific implication: In the market economy, business strategy has a decisive role to the success or failure of an enterprise Business strategy is important to all enterprises rather than a typical one If wanting to exist and develop, first of all, there must be a good and effective business strategy There are many approaches to build business strategy for an enterprise The research project has a scientific implication that is summarizing the existing theories from many different sources to form a process of building business strategy for an enterprise in the most basic, easy-to-understand and easy-to-use manner Practical implication: Rooting from the formation of business strategy that is vital to an enterprise, the research project contributes to assert the importance of building business strategy, providing enterprises in general and Topaco in particular an approach on building business strategy In the current market economy with fierce competition, building a successful business strategy will be a difficult and complicated task There are many approaches to build business strategy; however, building an appropriate and effective business strategy is not simple This research project has introduced a new approach to establish a process of building suitable business strategy to the current situation in Vietnam, not only applicable to Topaco but also has implication to the formation of business strategy for many other enterprises Basic factors involved in the process of building business strategy include: Identifying the goals of the enterprise; evaluating environmental factors to the enterprise; finding opportunities and threats to the operation of the enterprises combining with the assessment on the strengths and weaknesses of the enterprise to form matrix for selecting strategy and form a full business strategy To Topaco, this research project is very valuable to the Company’s Board of Leader in making business strategy, especially in reinforcing and promoting the brand image via raising productivity and effectiveness of sales and customers care services, bringing about high effectiveness for Topaco Shortcomings of the capstone project and orientation for later researches Because the conclusion of the research is drawn from the real situation at Topaco, so according to Topaco, the application of these measures and conclusions into other companies will need further researches On behalf of Topaco’s Board of Leaders, I would like to express our sincere thanks to members of group 10 for the research project./ GENERAL DIRECTOR OF THE COMPANY Nguyen Ngoc Vinh ACKNOWLEDGEMENT To help us complete the capstone project of Global Advanced Master of Business Administration Program (GaMBA), members of group 10- class GaMBA.M0709 has received a lot of support and contributed ideas of the lecturer and staff of GaMBA Program ad Board of Leaders of Toan Phat Construction Industry Joint Stock Company We would like to express our sincere thank to the Board of Leaders, Teaching and Study Managing Department, Class Management Division, etc of GaMBA Program We are very grateful to the Board of Leaders and the staff of center for Educational Technology and Career Development (ETC) - Vietnam National University, Hanoi and Griggs University (USA) Thanks to your support, we can study in the most favorable conditions We are grateful to lecturers of GaMBA Program and Griggs UniversityUSA Thanks to your enthusiasm and conscience in teaching, we have gained useful knowledge for our current jobs Last but not least, we are in debt to our families’ members and classmates in M0709 class Thanks to their support and encouragement, we have finished the course without encountering any obstacles Although the group has tried a lot but due to the condition of work-study, the quality of the capstone project is still limited We hope and will try to study and develop the research project both in theory and in application in the real situation of Topaco with the expectation to make a small contribution to the sustainable success and development of Topaco in competing in the coming integration environment We have tried to complete the capstone project in the best way with our knowledge and capacity; however, shortcomings are unavoidable, we hope to receive valuable contributions from our teachers and classmates./ MEMBERS OF GROUP 10 TABLE OF CONTENT Page VERIFICATION AND ASSESSMENT OF TOPACO COMPANY ACKNOWLEDGEMENT LIST OF TABLES LIST OF FIGURES AND GRAPHS PREFACE General context, the necessity and implication of the research project Objective and scope of the study Methodology of the study Structure of the capstone project Chapter BASIC RATIONALE OF THE REAEARCH PROJECT 1.1 CONCEPT AND CLASSIFICATION OF BUSINESS STRATEGY 1.1.1 Concept of business strategy 1.1.2 Role of business strategy 1.1.3 Basic characteristics of business strategy 1.2 PROCESS OF BUILDING BUSINESS STRATEGY 1.2.1 Analyze internal and external environment 1.2.1.1 Analyze internal environment 1.2.1.2 Analyze external environment 1.2.2 Building matrix to select business strategy 1.2.2.1 External Factor Evaluation Matrix 1.2.2.2 Internal Factor Evaluation Matrix 1.2.2.3 Competitive Profile Matrix 1.2.2.4 SWOT Matrix 1.2.3 Select business strategy 1.2.3.1 Organization and implementation 1.2.3.2 Evaluate the effectiveness of the strategy Chapter ANALYZING REAL SISTUATION OF PRODUCTION AND BUSINESS OF TOAN PHAT CONSTRUCTION INDUSTRY 9 10 11 11 13 13 13 14 14 15 15 19 2 24 25 JOINT STOCK COMPANY 2.1 GENERAL INTRODUCTION OF THE COMPANY 2.1.1 The process of establishment, organizational structure and apparatus 2.1.2 Situation and business performance from 2008 to 2010 2.2 ANALYZING SITUATION ANG BUSINESS SITUATION OF TOPACO COMPANY 2.2.1 Analyze external environment 2.2.1.1 Macro environment 2.2.1.2 Sectorial and competitive environment 2.2.2 Analyze internal environment 2.2.2.1 Resources 2.2.2.2 Strengths 2.2.2.3 Weaknesses 2.2.2.4 Competition in the market 2.2.3 Matrix to select business strategy 2.2.3.1 External-Internal factor evaluation matrix 2.2.3.2 BCG matrix 2.2.3.3 SWOT matrix Chapter RECOMMENDATIONS, SOLUTIONS 3.1 GOAL FOR 2015 AND VISION TO 2020 OF TOPACO 3.1.1 Targets by 2015 3.1.1.1 Strategic target 3.1.1.2 Specific target 3.1.2 Vision to 2020 3.2 SOME SOLUTIONS AND RECOMMENDATIONS FOR TOPACO TO COMPLETE BUSINESS STRATEGY 26 26 28 31 31 3 42 4 9 52 5 5 64 65 65 6 66 67 3.3 3.2.1 3.2.2 Building business strategy Selecting business strategy 3.2.2.1 Bases for selecting 3.2.2.2 Defining business strategy SOME SOLUTIONS FOR IMPLEMENTATION 67 70 7 75 3.3.1 Some solutions to production management 3.3.2 Solutions to marketing management 3.3.3 Solutions to human resource management 3.3.4 Solutions to finance management SOME RECOMMENDATIONS TO THE STATE 75 77 79 81 82 3.4 CONCLUSION REFERENCES 83 84 LIST OF TABLES Table 1.1: External factor evaluation matrix ………………………………… Table1.2: External factor evaluation matrix ……………………………… Table1.3: Competitive Profile Matrix ……………………………………… Table 1.4 SWOT Matrix …………………………………………………… Table 1.5 Table of selecting strategy ……………………………………… Table 2.1: Performance of Production and Buisness in 2008, 2009, and 2010 Table 2.2: List of main supplier of material for Topaco …………………… Table 2.3: Table of comparison of competitors …………………………… Table 2.4: External Factor Evaluation Matrix of Topaco (EFE) …………… Table 2.5: Topaco’s matrix of internal factor evaluation (IFE) …………… Table 2.6: Several socio-economic targets ………………………………… Table 3.1: SWOT matrix of Topaco……………………………………… Table 3.2: comparison of feasible strategies ……………………………… page 20 21 21 22 23 29 40 50 52 53 61 67 71 Table 3.3: GREAT Model to select strategy ……………………………… Table 3.4: Total production cost of 1m3 of concrete construction 72 76 ………… LIST OF FIGURES AND GRAPHS Figure 1.1 Business strategy ……… ……………………………………… Figure 1.2 Process of building business strategy …………………………… Figure 1.3 Macro environment …………………………………………… Figure 1.4 Five forces model ……………………………………………… Figure 2.1: Model of Organizational structure ……………………………… Figure 2.2: Chart of Revenue, Profit Target ………………………………… Figure 2.3: Chart of density structure of products and service as per revenue Figure 2.4: IFE – EFE matrix ……………………………………………… Figure 2.5: BCG Matrix …………………………………………………… page 13 15 16 18 27 30 41 55 56 PREFACE GENERAL CONTEXT, THE NECESSITY AND IMPLICATION OF THE RESEARCH PROJECT Following the quick recovery of the world economy after the economic crisis that is rated as the worst one for many decades Along with the strong competition in Southeast Asia and the international economic integration, Vietnam is entering the period of industrialization and globalization and process of building infrastructure and developing socio-economy Therefore, Vietnam’s construction sector plays a very important role in the country development process, at the same time; it is also facing great challenges and potentials in the regional and world’s economic integration in the following stages International economic integration creates conditions for Vietnam’s construction enterprises to have a more dynamic business environment Vietnam also becomes a new market to foreign enterprises When foreign enterprises invest in Vietnam, there will be a competitive environment; therefore, Vietnam’s enterprises need to build a concrete and long-term business strategy Toan Phat Construction Industry Joint Stock Company (Topaco) is a newly established Company which has ceaselessly developed in organizational scale At present, Topaco has been participating in constructing many key industrial projects of the country such as hydroelectric power plants, bridges and roads, civil construction, etc Therefore, setting targets and plans as well as operating strategies for the Company to set the long-term development orientation really plays an important role in the development orientation, creating competitive advantages to the Company in the coming time More importantly, the leader of Topaco is also a member of group 10 – that is the Chairman of Management Board and General Director of the Company – Mr Nguyen Ngoc Vinh Therefore, we, group 10 decided to select the topic "Building the business strategy of Topaco from 2011 to 2015, Vision up to 2020" as a capstone project The topic will demonstrate the importance and practical significance of building a business strategy if the Company really wants to have sustainable development At the same time, the subject also provides businesses and business owners with strategy-building process, analysis and assessment of the real situation of current business of the Company, analyses of both objective and subjective impacts on the production and business activities of the company Since then, we will make recommendations to choice the best business strategy to the Company in 2011 2015 period and vision toward 2020 OBJECTIVE AND SCOPE OF THE STUDY 2.1 Objective - Establish theoretical base for programming the business strategy of Toan Phat Construction Industry Joint Stock Company - Analyze and assess macro-environment, micro-environment as well as the internal environment of the Company in order to realize opportunities and threats from business environment; advantages and disadvantages affecting the development of the Company - Build strategic business objectives for the Company from date to 2015, vision up to 2020 and propose the plan to implement the strategic objectives in 10 that lead the cost to deal with the challenges from competitors such as: Licogi13 Company, Vinaconex, Song Da Holdings This is not Topaco’s core strategy; However, Topaco does not tend to carry out the low-cost - Supply management strategy: Formed by the combination of group S1, S4 with T2: This combination enables the company to improve the situation of weakened cost accounting as now - Strategy of human resource management: formed by a combination of S2, with T1, T3: This is one of the leading strategies of the business at present with the determination the highly-qualified human resources to be the foundation of the company’s development which would contribute to overcome constraints on financial capability, equipment Recently, company’s Board of Directors has encouraged staffs who are excellent at work and commit in a long time with the company to participate in overseas training courses, such as: Developing leading skills, MBA, building up strategy Besides, the company has also organized training courses in the country: Training wage raising for workers, as well as analysis skills, job evaluation and job performance; Advanced training of Topaco human values; business strategy of creating money rain of a Singapore young billionaire- Adam Khoo Moreover invested money for the company personnel involved courses CEO, CFO, etc In the future, company leaders also pledged to continue investing in basically training staff of the company On the other hand, the company will also implement a program "option of human resources" in which they can find outstanding individuals who are enthusiastic for the job, and have the same direction with the Board of Directors The Human resources will surely become key officials, and help the leaders to implement best production practices in units 3.2.2 Selecting business strategy 3.2.2.1 Bases for selecting By using SWOT analysis model combined with inside factors (strengths, weakness) and external elements (opportunities, challenges), Our team recommended Topaco the strategic plans: market expansion strategy, competitive 70 strategy with differentiation, competitive strategy with low-cost, supply management strategy; and human resource management strategy On the basis of the possible strategic plans, we used a comparison of feasible strategies and set up a GREAT model to choose the best plan to Topaco for a period of 2011-2015: Table 3.2: comparison of feasible strategies Target Benefits Expanding market Dominate the market, increase market share, strengthen sales, raise profitability, and expand the development of new construction, particularly in remote areas Competitive Strategy Production Differentiation development Meet the needs, wants of customers Create the difference, but not too hard to imitate, copy Risks Not dominate the Differentiation is market due to difficult to recognize, competition with and implement other competitors Cost Relatively high Feasibility Time Very feasible Ongoing Improve product quality to build up the trust, satisfaction of customer and improve competitiveness with other firms: especially in the field of transport infrastructure Topaco does not tend to make a priority for competing with low cost, but match cost with a good quality, which attract customers on price to dominate the market Create a price Have to overcome competition, reduce barriers in terms of turnover and awareness, a change of profitability of the producing process Company Cost is high, but the adjustment is Enormous cost relatively easy Feasible Feasible Done in a long time, time-consuming It’ll Long time take long time to modify and overcome (Source: Topaco) 71 Low Cost Low Less feasible Ongoing Table 3.3: GREAT Model to select strategy Feasible strategies Market expansion Point Point of of convers assess ion ment 0,9 Differentiation Point Point of of assess convers ment ion 0,9 Production development Point Point of of assess convers ment ion 0,6 Low cost Point Point of of convers assess ion ment 0,3 Criteria (G) Benefits Weights 0,3 (R) Risks 0,1 0,3 0,2 0,2 0,2 (E) Cost 0,25 0,5 0,5 0,25 0,75 A) Feasibilit y 0,2 0,6 0,4 0,4 0,2 (T) Time 0,15 0,3 0,15 0,45 0,3 Total Points 2,6 2,15 1,9 1,75 (Source: Topaco) With the evaluation: point for the worst strategy and point for the best strategy based on each criteria and weights of criteria as in the GREAT above summary - Market expansion strategy (leading cost) which achieved the highest score with 2.6 is the best strategy in the current context of Topaco Base to select market expansion strategy is strategy of choice for Topaco in the current point because of some following reasons:: + Currently, Topaco’s main revenue is from construction of hydropower projects However, up to now, the big hydropower projects in Viet Nam has basically been planned and constructed, expected to complete the construction of hydropower development in the coming 15 years Therefore, the company now has to expand the market, look for new potential job such as: infrastructure, transportation, civil construction, investment into other areas, etc 72 + With experienced staffs and workers, together with processing the number of vehicles and equipment, the company can undertake the major projects of construction as well as EPC general contractor of projects such as transport, infrastructure, the civil construction, etc + The financial situation of company in the coming period will be relatively stable Revenues and profits have risen year over year and now production plans in 2011 (400 billion) could be achieved completely In particular, with plan of stock listing in the stock market in 2012, the company could fully mobilize the large capital upon the real needs investment to expand production and business + To maintain output and annual revenue in business development strategy in the period of 2011 - 2015 set up by Board of the Company, it is necessary to seek and expand the market which is the urgent requirements of Topaco at present + Currently, in most Northern provinces, management capacity, the quality of human resources, etc of the construction company is very weak Promote the strengths; Topaco fully dominates the market expansion in the local construction in a short time - Key competitive strategy under differentiation is offering a number of construction technologies which has distinct characteristics Topaco is now manufacturing and executing dam and hydroelectric constructions, which require technical nature, special construction equipment: using conveyor systems to pour concrete, while ensuring quality just speed up again, on the other hand, researching market for new products, the technology of the future: RRP, RHB road- technology for the system of rural roads which are fast construction , lightness, progress, and friendly with environment, etc so the choice of key competitive strategy under differentiation is in line with the current stage in the development of the country, especially in remote areas, and areas in the border provinces - Production development strategy requires huge cost, takes a long time and faces a series of barriers such as restructuring the organization, changing working methods, equipping equipment and technology, training technicians to 73 access and master the technology Meanwhile, with a strong and experienced force of officers and employees, with available modern equipments, Topaco completely enable to undertake the most difficult and important projects and additionally, accomplish business development strategy Phase 2: 2011 - 2015 - Competitive strategy with low cost: This strategy ranks No and is also very important but at present, low price is meant with the conception of low quality products, slow progress, and no commitment of product Topaco does not pursue this goal and has built a strong brand for the construction of hydropower, construction for the new product: transportation, infrastructure Implementation of cost reduction for construction of hydro power is not required because Topaco has been appointed contractor of majority of hydropower projects The cost reduction will sharply affect the revenue and profit of the company However, it is also necessary for the Company to think about until the period of gradually removed appointment of contractors and assigning procurement rejected 3.2.2.2 Defining business strategy From the target and the market situation, the situation of Topaco and the above analyzed matrix in the previous section, production strategies of Topaco in the period of 2011-2015 as follows: * Business strategy for company Topaco has confirmed its position and brand in the field of hydropower construction The company’s direction in the next few years will be to maintain and develop the hydropower construction During this time, the company will expand production into the field of transport infrastructure on the basic of its available strengths which are consistent with the general development trend of the industry * Strategies for departments Business strategy for companies is the overall strategy to achieve business goals To successfully implement the general strategy, the company must develop strategies for departments and provide solutions to done well these As stated 74 above, the reason Topaco selected market expansion strategy, competitive strategy to differentiate its products is that the company determined its position in the market, realized strengths, weaknesses and opportunities, challenges from the external environment Business strategy to expand markets, competitive strategy to differentiate the products also require solutions, as well as the highly- qualified human resources as the key to success 3.3 SOME SOLUTIONS FOR IMPLEMENTATION 3.3.1 Some solutions to production management - Managing the supplies of raw materials: Recent years, because of the financial crisis and global recession, prices of raw materials have irregularly fluctuated, additionally, exchange rates have risen sharply, which have affected not only Topaco’s business plan but also reduce the performance, due to the material accounting to 73% product cost of the unit Slow Work of test, capital income led to slow capital turnover which affected the payment of materials The solution given: With a relatively large number of suppliers of Iron, Steel, Cement, the company can negotiate to buy the materials with the lowest price to lower production cost On the other hands, TOPACO should build budget plan close to reality to buy the materials and meet production requirements Budget plan should be from the product consumption plan, then build up the suitable plan of production and raw materials - Good Manufacturing Management: Competing with low cost (cost leader) is optimized production costs it’s the fact that the raw material can not much lower, but we can minimize losses due to optimizing loss of optimal levels and reducing product defects thank to the managing system Optimization mainly is thanks to productivity management in order to reduce fixed costs per unit of product This decision is very big on competitiveness and ability to win contracts 75 Table 3.4: Total production cost of 1m3 of concrete construction No Rate Target Material costs Labor costs Equipment (8%) Common cost (6%) Total Price/unit 760,000 100,000 80,000 60,000 1,000,000 (%) 76.0 10.0 8.0 6.0 100 The summary of construction costs of producing m3 of concrete in actual structure Topaco shows the cost of materials (the main materials and auxiliary materials) accounted for 73% of total production costs Therefore, the solution of cost optimization will focus on optimizing the cost of raw materials - Reduce material wastage of raw materials: Cost of materials includes cost of main materials (iron, steel ) and sub-materials costs (welding ) Prescribed by the State’s regulations for materials used for fabrication of structural steel products, the wastage norms as 2.5% -5% for raw materials The company reduced the loss rate by 0.8 - - 1%, while ensuring product quality through measures of management under strict supervision from the transport processes to producing Concrete and handover in the construction which optimized concrete transportation equipment, volume for each block of poured concrete It is meant of saving of 1% wastage + Products ensure the highest quality and minimize product fault to go to work again In case, making good the fault must comply with the following procedures: strictly comply with ISO 9001-2000 processes on checking product quality; Process of controlling inappropriate products; Process of preventing The process of overcoming, acceptance of state: acceptance process 209/204/ND-CP on December 16, 2004 and 27/2009/TT-BXD on 31/7/2009 guiding the implementation and construction quality management - Reduce labor costs: Organizing appropriate production through the rational layout of the production premises, location of equipment, combination 76 chain, made possible preparation of materials, spaces for worker to avoid waste, reducing the emission of unreasonable production From reducing labor costs will increase labor productivity, and output in a certain period of time which reduces fixed costs on a product unit (For example: Installation of concrete formwork needs people under the state regulation but could be reduced to three people but ensuring the technical process) - Solution of using new technologies: The Company needs to explore solutions to research new construction technology, based on available strengths to increase labor productivity to reduce the cost of construction equipment In recent years, the company’s leaders has really interested in this solution to reduce costs, increase labor productivity, etc Anyone who have arrived the Nam Chien Hydropower II and Bac Giang might have known Topaco’s new construction technology solutions that utilized equipment and available human resources such as: the solution of pouring concrete by trough, concreting equipment by irregular Conveyor belt, no sliding formwork system These solutions have saved tens of billions for the company last period 3.3.2 Solutions to marketing management - penetrate the market: TOPACO implemented the mixed Marketing strategy (with new advertisement campaigns, promoting the Company; increase sales network; etc ) to attract potential customers, expand market share, and attract customers of competitors TOPACO will penetrate the market of urban transport infrastructure in the local areas, focus more on social policies for poor people in localities where the company is operating, create and maintain the relationship of local people and administrators - Product development: Topaco’s current products always get the best quality, fastest progress thanks to improving professional skills of workers and modern technology application TOPACO carried out researching new technologies to improve the quality and progress to meet the demand customers 77 + RRB and HRB Construction technologies used to execute rural roads are to make road in the future with spermatorrhoea techniques outstanding with the faster, cheaper and environmentally appropriate nature + Block ultra-light Ceramic technology and block unburned brick: that is ceramic technology in the future with more advantages than burned brick At present, the government is encouraging businesses to experience block brick - Product Diversification: At present the company's major product is the production of concrete and construction of hydropower projects, the Company, on the basis of available resources, have diversified their product as: transportation Execution, infrastructure, civil construction, and real estate investment and hydropower projects - Customer Care: Since Topaco’s establishment until now, manufacturing and construction of concrete is one of its traditional business areas which have proved a surplus value for the company This is considered the available strength of TOPACO during operation As the main contractor of the constructions of the dam and the plant, together with the investor who are the traditional customers (such as Song Da Corporation, Electricity Corporation of Vietnam, the Son La project management board and some other related agencies ), TOPACO has always been regarded the highly- qualified hydraulic concrete construction unit and keeping the work schedule - Product development: With the available advantages on producing and taking on construction of concrete dams, hydropower factories, and roads, TOPACO is continuing to develop and expand market in this area in order to improve enterprise value, develop product, particularly pay more attention on transportation projects, infrastructure Besides focusing on improving the quality of existing products, to develop its reputation in the market, TOPACO need to have specific policies on bidding marketing bidding in the shortest possible time, take the opportunity Marketing, procurement of major projects should be included in the 78 resolutions of the Board in business development strategy combined with establishment of a marketing plan to reach the project 3.3.3 Solutions to human resource management In the situation of the economy, with the strong fluctuations of the business environment, fierce nature of competition and increasing demand have been pressures with the enterprise in general Especially, in Topaco’s context, human resources is one of the difficulties and threats to the development of the business Currently, Topaco not really a strong brand, widely known in the construction industry, thus attracting the knowledge and experienced workforce has faced many difficulties Period 2011 - 2015, to address thoroughly the issues of personnel, the Company should implement a number of the following: - Recruiting and training human resources: To ensure a stable human resources for the development strategy by 2015, the company should always focuses on recruitment to choose the candidates who have skills and appropriate professional qualifications, work experience, heart and mind, have a common direction with the leaders; accepts to pay higher (salary), to meet current needs and development to prepare for the future strategies Besides, it should pay more attention on training for staff, especially key staff to create personnel force to help leaders deploy effective business operations of the Company Investment in hiring consultants who are experienced Professor, doctors in the personnel field of in the country and abroad TOPACO also needs to have reserved human resources to compensate for human resources fluctuations and to meet the needs of business expansion - Policy of encouraging employees: If recruitment is to select candidates with appropriate qualifications, training and development is to aim to equip them with the necessary skills to serve now and then, Policy of encouraging employees is to maintain stable human resources to meet business’s needs Motivating the employees is represented by elements of finance and non finance as income 79 distribution, commendation and discipline regimes and satisfaction with the work environment million per capita incomes in 2010 of TOPACO is not low compared to other companies in the same size The reason is blamed for the brain drain caused by working conditions of the marine field electricity in the remote, work environment not really professional Besides the internal communications of the Company is not good, many guidelines and policies of the company were not disseminated to each employee, resulting in misunderstanding and lack of cooperation in the work of department staffs On the other hand, the distribution of income is not really fair, commendation and discipline regimes were inadequate or improper objects so not motivating and encouraging the employees develop their capacity Therefore, TOPACO should improve treatment regime for employees in the following directions: - Improve income distribution for workers: The primary concern of the employees is income, so in order to motivate the employees to promote the work, TOPACO should improve income distribution, including: + Income of workers must be increased each year and made sure to cover the level of inflation of consumer goods and the inflation rate in the market On the other hand, TOPACO’s income should be higher than the average income of the other company in the same size, same industry to avoid brain drain and attract talent from competitors + Regulation of income distribution must be based on results done by the employees, the positions, the coefficient of responsibility to ensure fairness for employees to raise the sense responsibility, self-discipline and develop their capacity - Develop reasonable reward and discipline: including the deserved reward for the individuals, groups with high performances making benefit to TOPACO, reward by the services and reward quarterly and annually, etc to encouraging staffs 80 to promote in their work Besides, it is needed to have disciplines to deter any action making harm to TOPACO - Creating a good working environment: Work environment is increasingly important and is one of the two most important factors to decide the closeness, productivity, quality and efficiency of employees (along with elements of salary) Therefore, the creating of the professional working environment should be put on top in the strategies of Topaco Together with creating a professional work environment, such as getting on time, making uniforms, fully equipping with equipment, building solidarity Company should well the following tasks: + Layout spacious, clean, safe, scientific workspace for employees to work + Create a friendly working atmosphere, close to the leadership staff, between departments and between employees At the same time, create conditions for employees to share thoughts, their aspirations to create the most comfortable ideas, maximize their own power + Making work environment for healthy competition to motivate the development by increasing the capacity of workers - Ensure the regime for employees: The Company should pay attention to the regime for workers such as social insurance, health insurance, the allowances, etc 3.3.4 Solutions to finance management Despite difficult financial resources, TOPACO built for itself a secure financial structure, little risk but high business efficiency This is a core element for TOPACO to overcome steadily difficult period of financial crisis and economic slowdown and maintaining growth momentum over year However the company needs to implement some solutions to heighten financial ability as follows: - Reduce the value of goods in stock: The company needs to focus on checking before acceptance at the end of third quarter and at the beginning of fourth 81 quarter annually, avoid the urgent situation at the end of the year like the years, which caused stress and lack of capital payment to suppliers and banks + Periodic meetings should have been granted to review the acceptance of payment and debt collection, the measures for the following period + Do not let the situation completely constructed long but still approved due to happen out the design + To maintain the inventory as current materials does not have the situation that existed sacrificing quality goods without the need to use, if there happens to be liquidated and processed immediately - Improved debt collection: in order to achieve early capital recovery, it is needed to make an exact delivery stage, checking and putting into use, to record payments to where it closed to investors, including for debt records - Restructuring capital: now the proportion of loans in total capital is big and the company is still very good use of financial leverage (expressed in ROE> 21%), but in the next stage the company should restructure the proportion of equity to ensure the safety of the payment process - Increase authorized capital: TOPACO has not become a public company now Therefore, issue stock market to increase authorized capital has a difficulty With the plan of business and producing from 2011 to 2015 in connection with using financial lever well, authorized capital in 2011 will increases by 30 billion dong average, to 150 billion in 2015 3.4 SOME RECOMMENDATIONS TO THE STATE - Speed up the development of energy and transportation, push up the implement of project investment: thermo- electricity, nucleic electricity, highway projects and so on for businesses to have opportunity in expanding the market 82 - Continue to have aid on the market, resource and tax through aid form for business such as lending with prior rate, using 0% tax for import materials and drag the time of free business income tax against the moment - Suggest government through consul, foreign embassy aid businesses in implementing project in South East Asia CONCLUSION From the target and market situation, present situation in TOPACO and matrix of strategy option, the group implement to compare strategies and use GREAT model to choose the best strategy for TOPACO from 2011 to 2015, expand market strategy Besides, the group gives solutions to produce administration, marketing administration, human resource administration and financial administration to get over the shortcoming and highlight the strong points to implement successfully the common strategy The core element in business strategy and building TOPACO steady development, it is necessary to connect the best strategy and change solutions to produce administration, marketing administration, human resource administration and financial administration and so on with the view to achieve the target most efficiently It is vital for TOPACO to build a long term strategy for its existence and development in background of upheaval market However, like the other strategies the expand market strategy from 2011 to 2015 is not invariable Depending the upheaval of surroundings as well the inside potential, the leaders of TOPACO needs to adjust flexibly in every period in accordance with the development tendency of society and guarantee achievement of the target All the change is difficult, we believe that with glorious tradition, long year experiment ,social responsibility and labors themselves, the leaders and staff of TOPACO will overcome all the difficulties, implement the business strategy from 2011 to 2015, stretch a Viet Nam top construction corporation in 2020 83 REFERENCES 1.TOAN PHAT Construction Industry Joint-Stock Company (Topaco), Statistic reports, Financial accounting report from 2008 to 2010 Ho Nghia Dung (January 14th, 2011), Specially focusing on transportation development at big urban areas (http://www.baomoi.com/Home/Thoisu) Griggs University (2011), Textbook of Strategic Management- Training Program on Master of Global Business Administration, Hanoi Le The Gioi (2009), Strategic Management, Statistic Publishing House, Hanoi General Statistics Office, data of socio-economic development target of Viet Nam during the years of 2006 - 2010 (http://www.gso.gov.vn) 84 ... Corporation The company renamed as Toan Phat Construction, Industry Joint- Stock Company on November 18th, 2007 International transaction name : TOAN PHAT CONSTRUCTION INDUSTRY JOINT STOCK COMPANY, Abbreviation:... Minh Design Consulting, Construction and Trading Joint- Stock Company is the predecessor of Toan Phat Construction Industry Joint- Stock Company, set up on August 3rd, 2005 The company is founded by... of operational environment and build business strategy for Toan Phat Construction Industry Joint- Stock Company (Topaco) 25 2.1 GENERAL INTRODUCTION OF THE COMPANY 2.1.1 The process of establishment,