XÂY DỰNG CHIẾN lược PHÁT TRIỂN bền VỮNG KINH DOANH NHÀ GIÁ rẻ của CÔNG TY MINH TRANG eng

THESIS BUILDING BUSINESS STRATEGY FOR SUSTAINABLE DEVELOPMENT AT MINH TRANG COMPANY: THE CASE OF LOWPRICED HOUSING STATEMENT OF AUTHORSHIP The author commits that the thesis “Building business strategy for sustainable development at Minh Trang: the case of low-priced housing” is the individual work of the author All of the data, results, analyses and evaluations in this research are collected by the author; the author applies learnt knowledge and communicates with supervisor to accomplish the research i ACKNOWLEDGEMENT TABLE OF CONTENTS ACKNOWLEDGEMENT ii TABLE OF CONTENTS .iii LIST OF ABBREVIATIONS .vi LIST OF TABLES .vii LIST OF FIGURES viii INTRODUCTION CHAPTER 1: THEORETICAL BASES OF BUSINESS STRATEGY .4 1.1 Overview of business strategy and strategic management .4 1.1.1 Definitions 1.1.2 Role of strategy and strategic management 1.2 Business strategy for sustainable competition and development .7 1.3 Introduction of some business strategies 1.3.1 Low-cost strategy .10 1.3.2 Differentiated strategy 10 1.3.3 Centralized strategy 11 1.3.4 Competitive strategies based on competitive position 11 1.3.4.1 Market leading strategy 11 1.3.4.2 Market challenger strategy 12 1.3.4.3 Market follower strategy .12 1.3.4.4 Nestle strategy 13 1.4 Process of creating strategies 13 1.4.1 Analysis of bussiness environment 13 1.4.2 Creation of strategies 14 1.4.3 Implementation of strategies 15 1.4.4 Evaluation of strategies 15 1.5 Tools used in analyzing and creating business strategies 15 1.5.1 Analysis of external and internal business environment 15 1.5.1.1 Analysis of external environment 15 1.5.1.2 Internal environment analysis .22 1.5.2 Strategy planning tools .23 1.6 Research methodology 24 1.6.1 Qualitative analysis for primary data .24 1.6.2 Object selection of survey and interview 24 1.6.3 Secondary data analysis 26 1.7 Conclusion 26 ii CHAPTER : CURRENT BUSINESS SITUATION AND STRATEGY OF MINH TRANG COMPANY .28 2.1 Business situation of Minh Trang Company 28 2.1.1 Introduction 28 2.1.2 Vision, mission and objective 30 2.1.3 Housing products and consumption market .31 2.1.4 Business Performance 33 2.2 Macro and micro environment analysis of Minh Trang Company 35 2.2.1 Macro environment analysis 35 2.2.1.1 Economic environment .35 2.2.1.2 Politic and legal environment .36 2.2.1.3 Cultural and Social Environment .37 2.2.1.4 Technological Environment 39 2.2.1.5 External Factor Evaluation 40 2.2.2 Micro environment analysis .42 2.2.1.1 Competition in the industry 42 2.2.2.2 The threats of new entrants 46 2.2.2.3 Customers 47 2.2.2.4 Suppliers .47 2.2.2.5 Internal Factor Evaluation 48 CHAPTER 3: BUSINESS STRATEGY OF MINH TRANG COMPANY IN THE PERIOD 2013-2018 50 3.1 Vision, mission and objective 50 3.1.1 Vision .50 3.1.2 Mission .50 3.1.3 Objectives 50 3.2 Business strategy for sustainable development .51 3.3 Solutions for strategy implementation .55 3.3.1 Searching, developing constructional land resources .55 3.3.2 Seeking construction units with high capacity and quality .56 3.3.3 Optimization in management and production process 57 3.3.4 Assuring capital mobilization and optimizing capital structure 58 3.3.5 Policies of price adjustment and marketing 58 REFERENCES 62 APPENDIX 64 iii LIST OF ABBREVIATIONS PEST Political Economic Social Technological EFE External Factor Evaluation IFE Internal Factor Evaluation VND Viet Nam Dong iv LIST OF TABLES Table 1.1 External Factor Evaluation matrix 21 Table 1.2 Internal Factor Evaluation matrix .22 Table 1.3 SWOT matrix 23 Table 2.1 Basic Information about Minh Trang Company .29 Table 2.2 Low-priced housing products of Minh Trang Company 31 Table 2.3 Income statement of Minh Trang Company in period 2010-2012 34 Table 2.4 Summary of macro environment factors 40 Table 2.5 EFE matrix of Minh Trang Company .41 Table 2.6 Business performance of Minh Trang compared to other competitors 44 Table 2.7 Comparison of important criteria of Minh Trang with competitors 45 Table 2.8 IFE matrix of Minh Trang Company 48 Table 3.1 Changes in objectives of Minh Trang Company .51 Table 3.2 SWOT analysis of Minh Trang Company 54 v LIST OF FIGURES Figure 1.1 Michael E Porter’s five competitive forces model 19 Figure 3.2 Strategy creation process of Minh Trang Company in 2013-2018 52 vi INTRODUCTION Necessity of research In Vietnam, real estate now is one of markets which attract many individuals and businesses participation This is also the field which has received many cares from the government and policymakers due to its importance and influence to the political and economic situation of society Vietnam real estate market is potential but also risky Thrive development of this market in the early years of the 21st century has demonstrated its attractiveness However, the current global financial crisis in 2008 has negatively impact the real estate market as well as other businesses operating in this field Nevertheless, the reality has proved that even when there is crisis, customers not disappear, the only thing that changes is the customer's needs Business that identifies this at the very early days will get the opportunities more easily and possess the advantages of being first mover The lack of lowpriced housing supply to meet the customers’ demand is a major defect Great difference between the redundant of high-level housing and the lack of low-priced housing leads to the imbalance of real estate market Therefore, low-priced housing will become a very attractive market in the upcoming period Based on the reality of the above situation, the author decided to choose the topic "Building business strategy for sustainable development at Minh Trang company: The case of low-priced housing" and hope to find out the appropriate business development strategies for company Objectives of research Research for sustainable development strategies, creation of strategy development process and analysis to obtain the optimal strategy help company choose the most appropriate business strategies Clarifying and applying the theories into practice help Minh Trang Company create and select the optimal business strategy in the period from 2013 to 2018 Proposing development and application solutions for the chosen sustainable development strategies help Minh Trang Company strongly develop and thrive in the market Subjects and scope of research Subjects of the research topic: Based on the theory of strategic business planning, the thesis focuses on research and situation analysis of real estate market in Vietnam considering the impacts of macro and micro factors on business activities, particularly "Building business strategy for sustainable development at Minh Trang Company: The case of low-priced housing" in the period from 2013 to 2018 Scope of the research is business strategies model used at Minh Trang International Commercial Company Ltd in real estate market - low-priced housing There will be comparison between the company business activities and other competitors in same industry to the year 2018 and solutions to conduct those strategies Research methodology The thesis uses methods of analysis, synthesis and matrix tools like: strategic management, human resource management, marketing management and decisionmaking management etc in doing research and creating business development strategies for the company Besides, the thesis also uses qualitative research method in which primary research data was collected based on questionnaires, interviews and expert methods Authors selected the ones who work at the company and in various positions ranging from Director to Head the department The candidates chosen for interview are the ones who create strategic planning and monitor the implementation of strategy can clearly understand the strategy of Minh Trang In addition, the authors also used secondary analysis methods to gather information for the theoretical basis The secondary data collected also helps author get assessment and evaluation basis for the impact of the macro and industrial environmenst as well as Minh Trang company’s capabilities in planning strategies Reputation on market Utilizing the recovery in Effectiveness of real estate market and resources (capital, increase in demands for equipment, low-priced housing to properties…) enhance company’s Marketing activities reputation, expand are not properly business and marketing concerned activities Strategies of using strengths to overcome challenges (S/T coordination strategies): Since the low-priced housing segment has a great deal of potentials, many enterprises would like to engage in exploiting this segment Low-priced housing segment does not require a too large amount of capital so there will also be a lot of competition Therefore, Minh Trang should maximize their strengths to establish a secure position in the competitive environment Maintaining good relations with government agencies will be of great help for Minh Trang to solve the problem of premises and construction land A very important quality of the lowpriced housing segment is the construction location In the current situation, there is absolutely fierce competition in acquiring premises and construction land 3.4 Propose solutions for strategy implementation Once outlining the business strategies for the company in the near future, the author jumps into specific operational measures aimed at resolving limitations and difficulties in all units and supporting the implementation of the overall strategy of the company 56 3.3.1 Seeking sources of construction land Constructional land resource plays a pivotal role in competitive strategy of development of low-priced housing segment Land location is one of the competitive elements of low-priced housing since customers always want to purchase houses in urban area, near transportation, schools, hospitals or shopping centers Price competing certainly cannot be sustainable as competitors always can find lower-cost material suppliers or better-quality constructional execution teams than Minh Trang Thus, Minh Trang needs to coordinate all the competitive factors to create an overall competitive advantage, not just simply compete in some fundamental elements Therefore, Minh Trang should continuously looking, exploiting land resources from project land, purpose-converted land, discharged land of organizations, corporative or purchasing from households The job of finding and exploiting this source is not easy since many other competitors also have the same strategy Information plays an important role in this process Minh Trang needs to develop the information networks with the purpose to have the fastest possible approaches to those sources The company can assign information finding tasks to or employees, who have extensive relationships and the ability to quickly capture information 3.3.2 Seeking construction units with high capacity and quality Technology and construction equipment are significant factors which decide labor capacity, construction quality and competitive advantage over other enterprises In the coming years, in order to improve construction capability, the company should seek high quality construction units, which constantly adopt modern technology and equipment with the aim of improving labor capacity and reducing production costs In addition, looking for creative design teams who regularly capture the 57 latest changes in construction technology and interior architecture is also very important Housing products of Minh Trang are always finished when customers move in Therefore, beside construction quality, interior furniture does play an important role in attracting customers Particularly, due to the increase of living standard, customers will concern more about the aesthetic aspect of the interior furniture design besides the convenience Thus, Minh Trang should focus on looking and exploiting young, dynamic and creative design human resource in the market 3.3.3 Optimization in management and production process In the current competitive environment, the key measures needed are optimization of the available production capacity, efficient organization and management of the production process and incentive policies for the employees Particularly in the matter of personnel, the company should make more relevant changes; including maximizing the capacity of existing human resources and cutting the inefficiently-allocated costs For example, previously it takes people to plan a project (by the time the company does not have enough experience), but now the company only needs one person for the project planning activities This method not only helps the company reduce costs but also makes opportunities for individual creativity in the projects In addition, Minh Trang also needs to apply information technology in their management and administration, assuring timely and precise internal communication system and saving costs Enhancing the management of construction quality, establishing the optimal construction methods, supervising the construction process and the documentation of construction quality acceptance and balance sheet are also important activities that should be concerned more, along with establishing quality management system for the company products and assuring all the criteria of safety, quality, schedule and competitive price Salary and rewards policies of the company also need changes Rather than 58 rely solely on profitability criteria and seniority, salary and rewards policies should consider employee advancement The company continues to improve and manage salary in the way that tight work outcomes with company and personal income Ensure employee salary to settle down their lives and take care of their family Besides, the company also needs timely, appropriate and proportionate reward policies for employee contribution, especially junior employees who will play pivotal role in maintaining sustainable development of Minh Trang in the future 3.3.4 Assuring capital mobilization and optimizing capital structure Addressing the capital demand and optimizing the capital structure under the current situation is a very critical issue, which has great influence on the business performance of the company Therefore, the company needs to carry out these following measures: First of all, Minh Trang recognizes that their main source of funds in the coming years is accumulated equity The company will continue to maintain and strengthen their established relations with banks currently offering credit Meet the requirements for collateral and settlement of working capital to maintain stable production and business activities The mobilization of loans and increase of owner’s equity should be calculated in detail to assure proper use of funds with lowest costs with the aim of improving business performance Besides, the method of mobilizing capital from subcontractors also deserves attention Selecting suppliers is an important issue in the current situation and even years to come The selection of construction subcontractors will help improve the capability to complete the projects, gather additional working capital from subcontractors, enhance the efficiency of the project management system, save project management expenditures and reduce prices 3.3.5 Policies of price adjustment and marketing Price is currently one of the competitive instruments of Minh Trang By offering reasonable prices for the quality housing products, the company has gained 59 more success than its competitors However, in recent times, the competitors of Minh Trang are also making changes in their pricing strategy in order to improve the product competitiveness Therefore, Minh Trang needs to catch up with the changes in the price of the competitors, balance with construction costs and offer the most competitive prices to obtain market share and customers Along with maintaining relationships with traditional materials suppliers, Minh Trang should look for new suppliers with more competitive price and better quality So that Minh Trang not only can have sustainable supplier sources but it also can extent and diversify supply sources for the company In addition to price adjustment policies, Minh Trang should develop more information channels for its products Previously, customers knew low-priced housing products of Minh Trang mostly by word of mouth Old customers introduced to potential customers This is the traditional channel of the business Because this channel is still effective so Minh Trang is almost not pay attention to other channels, thus, marketing activities of the company is not being concerned much With the development in information technology like nowadays, the application of modern media is an inevitable trend of almost every marketing activity of businesses Minh Trang should concerns more about this and should create its own website, in which will publish pictures, information about its products so customers can get to know more about Minh Trang With good quality, competitive price and appropriate marketing activities, the operating activities of Minh Trang will develop further and further 60 CONCLUSION In this general conclusion, the author mentions about contributions as well as restrictions of this research and learnt lessons In terms of research contributions, after analyzing current strategy of Minh Trang Company, this research has had some certain contributions Firstly, the analytical result obtained is an important rationale for Minh Trang in particular and for the real estate in general The analytical result of real estate is rather specific, in which would help businesses in the same industry and policy makers have a more multi-dimensional view about the market Secondly, the author has contributed to shape a new concept, the concept of “low-priced housing” In the real estate market, the concepts, which are often referred to are restaurants, hotels, high-quality apartments or social houses Currently, there is no official definition of low-priced housing However, in this research, the author has offered a definition for lowpriced housing – is a product that satisfies criteria: has reasonable price, suitable with low to medium income and purchasers will get certificates right after having the house In addition to the contributions above, this research still contains certain restrictions The use and application of theory only applied for some businesses, so the universality of this research is not high Besides, although in this research, the author has used tools and necessary equipment for analysis in order to reach expected target, but because only studied in small sample, the author did not receive expected outcomes The author wants to study bigger sample to collect more accurate outcomes but cannot conduct due to some limitations in term of time and researching conditions The author wants to make a more sophisticated, specific research but because time boundary is only months so the author cannot study deeper For author personally, this research topic is very meaningful This research is an important milestone that highlights the completion of the course and has brought 61 back lots of useful knowledge for the authors Other subjects such as marketing, production management, and human resource management are also the foundation help author to complete this course Furthermore, as a co-founder of the company, the conducting this research is also a desire of the board of directors to look once again at the development process, compare, and evaluate vision and mission of the company Research result once again confirms the accuracy of strategy that company is applying, which shows the suitability and adaptability of vision and mission with the changes in Vietnam real estate market The obtained results are the basis for managing, operating and implementing the strategy confidently and effectively, help Minh Trang ultimately preserve the current position and reach sustainable competitive position in the market Due to time constraints and requirements of the course, the author attempt to study to make the research more diversified and most efficiency Hopefully, this research can create interests to experts, teachers The author really wishes to receive feedbacks from teachers and friends to make this research better and better 62 REFERENCES In Vietnamese Hoang Minh Duong, Nguyen Thua Loc (2008), Commercial Enterprises Management, Social Labor Publishing House, Hanoi Le The Gioi, Nguyen Xuan Lan, Nguyen Phuc Nguyen, Nguyen Thi Loan, Ngo Xuan Thuy (2007), Management, Financial Publishing, Hanoi Ngo Kim Thanh (2012) Enterprises Management, National Economic University Publishing House, Hanoi Ngo Kim Thanh, Le Van Tam (2009), Strategic Management, National Economic University Publishing House, Hanoi Nguyen Ngoc Huyen, Doan Thi Thu Ha (2008), Management, Transportation Publishing House, Hanoi Nguyen Ngoc Huyen (2009), Competitive Strategy in Global Economy, National Economic University Publishing House, Hanoi Michael Porter (2009), Competition Strategy, Youth Publishing, Hanoi Annual Financial reports of Minh Trang in 2010-2012 Southern Bank, Report of Macro economic situation, June 2013 10 National Congress (2006), Real Estate Law, National Political Publishing House, Hanoi 11 National Financial Supervisory Commission, Economic situation in July and first months of 2013 In English 12 Alex Miller (1998) Strategic Management 3rd Ed Irwin/McGraw-Hill 13 Barney (1991), Firm Resources and Sustained Competitive Advantages, Journal of Management, USA 63 14 Daft Richard L., New Era of Management (2012) International Edition 10 th edition, South-Western Cengage Learning USA 15 Daft, R.L (2003) Management, 6th edn, South-Western, USA 16 David, Fred R (2001), "Strategic Management: Concepts & Cases", 8th Edition, Prentice Hall 17 Philip Kotler (2011), Marketing Management, 14th edition, Prentice Hall 18 Thompson, Arthur A Jr and Strickland, A J III (2001), “Strategic Management: Concepts and Cases”, 12th edition, McGraw Hill international edition 19 World Commission on Environment and Development (1987), Our Common Future, Oxford University Press Online materials 20 Vu Chi Dung (2013), Sustainable Development: A new business culture, http://tinnhanhchungkhoan.vn, Accessed date 26/08/2013 21 Ngoc Van (2013), “Hot” management of gold and real estate, http://www.tienphong.vn/, Accessed date 28/09/2013 22 Song Minh (2013), Real Estate will flourish in 2013, http://laodong.com.vn/, Accessed date 08/08/2013 23 Tue Minh (2013), A new strong germ of real estate appears ", http://www.baomoi.com, Accessed date 26/09/2013 24 Nguyen Van Duc (2011), Hanoi – Thousand-year capital of Culture, http://kienviet.net, Date accessed 21/07/1013 64 APPENDIX QUESTIONNAIRE “EVALUATING FACTORS AFFECTING SUSTAINABLE DEVELOPMENT STRATEGY OF REAL ESTATE BUSINESS (LOW-PRICED HOUSING) IN HANOI Hello Mr /Ms “Low-priced house” is built and sold out to the market with a price ranging from 500 million to billon VND This questionnaire is conducted by the author with the aims to understanding factors that affecting the strategy of the company in the competitive environment I hope that you can spend a little time to fill out in this anonymous questionnaire below I sincerely thank you for helping us to complete this research Further information, please contact: Duong Xuan Dong Email: aloaloalo@vnn.vn Mobile number: 0916 55 66 55 General information Current working agency: ………………………………………………… Current working unit (office/ department): …………………………………………… Seniority at current agency: years Current job: Other: Officer □ Position (if has): Manager □ Manager of office/ department □ Gender: Male □ Female □ Age: 20-30 □ 30-40 □ 40-50 □ > 50 □ Please circle or tick in the appropriate boxes according to your evaluation 65 Table 1: Survey on external environment of Minh Trang No 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 Criteria Totally agree Stable political environment Recovery of real estate market after freezing period Potential low-priced housing segment Increasing income per capita Advances in construction technology Increasing competition due to more entrants High loans interest rates Appearance of foreign companies due to integration process Increase in investment of Government in housing segment Regulations and law relating to land, houses and real estate Sources of construction land 66 Agree Not sure Disagree Totally disagree 5 5 5 5 5 Table : Survey on business in the same industry 2012 No Criteria Minh Thien Trung Trang Nhu Duc 10 11 12 Strategic vision of leaders Competitive environment Planning capacity Responsibility Distributor Competitiveness Company position Customer relations Technology Innovation Market share Profit Legal assistance Total mark Rank Notes: mark according to criteria: 1-lowest and 10- highest 67 Bluehouse Table 3: Survey on current capacity of Minh Trang No 3 3 3.8 Criteria Totally agree Agree Not sure Disagree Totally disagree Price dealing ability Distribution extending ability Investment corporation ability Experience in real estate Experienced, enthusiastic staff Company has reputation in market 5 5 Has financial ability and can raise capital from various sources Effectively use of capital, equipment and business assets Leader has strategic vision 68 Table 4: Interview questions for experts No Interview questions What is your assessment about business performance of Minh Trang in recent years? Which achievements should be remained and which drawbacks need to be improved? What is your assessment about the current development strategy of the company, what is the development orientation of the company in the future? In your opinion, can the current development orientation help the company to develop sustainably? Why? What is your assessment about Hanoi real estate in general and low-priced housing segment in particular this period and in the future? How you assess about the target customer of the company? In your opinion, what should the company next to gain the market share and profit? What is the influence of the business in the market for the next years? 69 Summary of opinions List people interviewed working at Minh Trang: Experience No Full name Position Dao Tuan Anh Chairman 20 Nguyen Van Hoa Sale Director 15 Nguyen Thi Kim Oanh Nguyen Hoang Long Head of Technical Tran Xuan Kien Head of Project 10 Head of Financial and Accounting 70 (Years) 16 ... Business situation of Minh Trang Company 2.1.1 Introduction Minh Trang international trade limited liability Company was established in 2003 by three shareholders Initially, Minh Trang was a retail... potential Table 2.1 Basic Information about Minh Trang Company Company name Minh Trang International Trade Limited Liability Company Abbreviated name Minh Trang Company Establishment year 2004 Head... competitors 45 Table 2.8 IFE matrix of Minh Trang Company 48 Table 3.1 Changes in objectives of Minh Trang Company .51 Table 3.2 SWOT analysis of Minh Trang Company 54 v LIST OF FIGURES