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SWOT Analysis of Dai Phat Company I An Introduction about Dai Phat An overview of Dai Phat Dai Phat Co Ltd specializes in producing cast iron and steel products of which nodular cast iron ones becomes the enterprise’s strength thanks to the application of the latest technology in the casting industry Its major products including manhole covers, decorative lamp posts, ovens, etc have been strongly consumed in the domestic market as well as in U.K, Germany, Italia and Spain (with the outputs of approximately 500 tons/month) Although the enterprise has been recently established and entered the market in 2001, Dai Phat’s prestige and its product quality are appreciated by inland and foreign partners Organization chart: BOARD OF MANAGEMENT BOARD OF DIRECTORS Quản trị hoạt động Sales Department HR Department Accounts Department Manufacturing factory Engineering & Design Department Lab − Board of Management: is responsible for making major policies and general orientations for the company operation, financing its main programs, etc − Board of Directors: is in charge of managing general operations of the enterprise, making decisions with reference to the proposals from relevant departments − Sales Department: take responsibility of developing markets and establishing relationships with customers, polling their tastes and comments on the company products and submitting reports and proposals of adjusting products at the Engineering & Design Department to the Board of Directors Besides, Sales Department coordinates with Accounts Department to track debts, estimate and purchase materials under the approval of the Board of Directors − HR Department: recruit, train and manage the company workforce, check the compliance with the company regulations on working disciplines, work safety and ensure that employees enjoy sufficient benefits and rights required by the country labor laws Quản trị hoạt động − Accounts Department: counts operations and sales practices, coordinates with Sales Department to track customers’ debts and cooperates with other departments at the company to check staff’s attendance and productivity − Engineering & Design Department: Check and adjust product specifications, ensures product quality for production stages, provide new designs to meet customers’ demand, etc − Lab: Checks product quality before transporting products from the factory, tests products’ chemical components, load, tensile resistance, issues factory certificates, etc − Manufacturing Factory: produces products and coordinates with Sales Department to deliver goods subject to customers’ orders II Market and competitive advantage analysis Assessing business environment: − Government policies and laws: The nation issued a number of policies which have encouraged and facilitated iron and steel industry Therefore, exporters of iron and steel end-products have enjoyed favors in fund raising, tax-reduction and exemption, export procedures, etc − Privileges when exporting to foreign nations: EU nations and Japan facilitate the penetration of Vietnamese cast products into these markets EU creates a number of favors in policies on taxes, quota, etc for imports from Vietnam This is a quite big advantage for Vietnamese enterprises against Chinese ones as Chinese exporters must incur higher tax rates and quota than Vietnamese ones − Consumption markets: markets’ demands become increasingly higher although the demand remained stable in 2008 and 2009 due to impacts of Quản trị hoạt động the international economic crisis However, long-term demands for high quality cast iron products, particularly those used in the power and postal industries are not lowered and their prices remain relatively stable To Dai Phat’s export market, traditional customers’ demands range from 800 to 1000 tons of products/month which cannot be met by the enterprise − Material market: sources of materials as production inputs are stable in both prices and capacity Dai Phat’s suppliers of materials are so various that the enterprise can have a variety of choices of material sources In case iron materials (including cast iron types and 4) change in price or capacity, steel type CT3 can be used as an alternative without any changes in the product quality This type of steel is available in the market Advantage and competitiveness analysis: − Geographic location: The company’s headquarter is favorably located at Dai Dong Industrial Zone, Hoan Son, Bac Ninh Province Products are favorably exported to foreign countries or transported to provinces in Vietnam’s Middle and Southern Regions through Hai Phong Port, to big cities in the North Region by road or by railroad through Yen Vien Railway Station Therefore, expenses are dramatically lowered and durations for transporting and delivering goods are significantly shortened − Technology: Despite of being a newly-established and not being a state-owned enterprise, Dai Phat is among few master the entrepreneurs most that advanced technology of nodular cast iron Quản trị hoạt động today For the traditional technologies, it takes 24 hours for the products to be heated in the heating furnace before taking out for mechanical process Thanks to the advanced cast technology, products can be processed after only hours heating Therefore, production duration is shortened and product quality is higher − Prices and Quality: Thanks to its capability to apply advanced technologies, Dai Phat’s product quality is superior and product prices are also much lower since the production duration is shortened and costs for materials are saved - Price and Quality: Thanks to modern technology, the company’s product quality are now better than those by old technology with much cheaper cost as it can shorten production time and save materials - Mechanism of production and administration management: In comparison with SOEs such as Mai Lam Casting Company, Tran Hung Dao Mechanical Casting Plant, etc., besides better product quality, Dai Phat also has more flexible management and operating mechanism This helps the company to make decisions more quickly and timely Weaknesses: - Like most of other private companies, capital is the biggest weakness of the company Due to limited budget, activities of product promotions, public relations have not been investigated sufficiently In addition, due to limited funds, materials import encountered some difficulties The company cannot import a large number of raw materials to ensure stable production but import them in batches On the other hand, the expansion of production and investment in machinery and equipments, training and retraining staff and technicians also faced many Quản trị hoạt động difficulties The company needs to consider carefully before making new investment decisions - Another challenge for the company is unstable, low skilled workforce supply Then they need to be trained before being able to work independently III Selecting operational strategies based on SWOT analysis: Based on the analysis of strengths, weaknesses and business environment above, we can see there are still a lot of business opportunities The company, hence, needs to take every advantage to promote the development of production for supplying the market The Company’s General Strategies: - General Strategy: To promote the production and supply of high quality cast iron products which are cheap with good design, meet the market needs, and have short delivery time to improve capital turnover - Identifying market segments: High-end cast iron products with ability to withstand large load and compression - Defining target customers: Those who are companies supplying construction, power, postal services, and water Selecting Strategic Products: Communication Cable Manhole Cover Based on the analysis of the company’s strengths and weaknesses, markets and competitors, Dai Phat selects strategic products to promote their development They are communication cable manhole cover with the following detailed specifications: - Customers: Power companies, Telecommunications companies - Sub-series: Wing, Wing, and Wing - Marking product load: focus on high-grade ones including C-250 and D-400 Quản trị hoạt động The Reasons for Selecting Communication Cable Manhole Cover To Be the Strategic Product: - To take advantage of modern casting technology as the communication cable manhole cover product have strict requirements of quality in order to protect the underneath cable system The company’s competitors often have nodular level of or while that of Dai Phat is generally stable at the level - The demand of the domestic market and export market for this commodity is always stable as the products need to be replaced regularly to ensure that communications cable systems are secure - The nature of the product requires high accuracy, large load, and complicated casting techniques so little casting business invests in this product line Meanwhile, Dai Phat has advantage of casting technology and engineering staff that have been trained methodically in the former Soviet Union Therefore, it could be able to quickly access this product line IV Management of Operating Strategies for Communication Cable Manhole Cover Products Identifying operating strategy - Competitive strategy: Dai Phat will compete with its rivals on price, quality, transporting and after sales services + In terms of Price: the products will be discounted 5-10% in comparison with the same ones from the company’s competitor, thanking to the upgrading of nodular level and reducing material costs Quản trị hoạt động + In terms of Quality: the product will be reinforced in the sample to be able to withstand greater loads than the requirement For example, required load of the product C-250 is 25 tons Dai Phat products can withstand the load ranging 30-32 tons + In terms of After-sales services: Dai Phat provides and is willing to freely replace defective products beside technically advises and supports installation at the site + In terms of transporting: freely ships to its customers’ site within a radius of 100km from the company headquarter - Analysis of market demand: the market demand for communication cable manhole cover is about 300-350 tons per month, focusing primarily on 4-wing type D-400 product line - Strategy of production: Given the products’ nature of various design and size, it is not allowed to have high inventory level The company only produces and stores 30-50 tons of cargo Deploying Operating Decision - Capacity Management: Due to the market’s needs and the enterprise’s capabilities, arranging 6/10 groups specializing in manufacturing communication cable manhole cover; the remaining four groups will produce other commodities Those producing communication cable manhole cover are required to be skillful, preferably those with carefulness and seniority in the industry The company will construct production norm and assign each product line to each groups (2, 4, or wing) according to each group’s performance In case of there’s a need for urgent delivery under a signed contract, the manager Quản trị hoạt động of workshop will layout the groups in shifts to ensure both delivery time and workers’ health - Quality Management: All batches of products must be closely monitored by QC department from the mold making process to the smelting process Each batch must be checked according to BS EN 124:1994 standard and the European standard of ductile cast iron 500-7 on chemical composition In addition, QC department also check about internal structure, nodular level, compression, and withstandable load of from to products to ensure product quality Only the products with tested specifications being satisfactory are given factory certificate - Management of general plan and reserved materials: + Every Monday, Sales Department is responsible for summarising and reporting of the company management about the quantity of contracts signed, the sold quantity, and the amount still needs to be produced so that the workshop can coordinate its production + HR Department regularly monitors and has adequate preparation of human resources needed for the company’s continuous production and quality assurance + Technical Department closely monitors production shifts and promptly detects and resolves technical problems + On the basis of consumption of materials and cast gate, waste, purchase department under the Business Department prepares to import about 550 tons of materials including cast iron and steel CT per month, about tons of nodularizing substance together with other materials such as powdered coal, glass sand, cinder creator, NaOH, etc Quản trị hoạt động - Distribution network management: Due to the characteristics of the product, the distribution is done directly to customers So the company assigns staff of Sales Department to manage relationships with customers, contact them and coordinate with the Department of Delivery of the workshop to deliver the cargo to them - Supply Chain Management: Due to specific quality requirements and associated services, to create the company’s reputation; its units have a close coordination mechanism under the regular and strict supervision of QC Department, which are leaded by laboratory and the company managers The process of finishing contract with customers complies strict and strict procedures, form input material quality control at the Laboratory to mold making, smelting, machining, quality control product before release, etc Besides, the provision of accompanying services such as installation support, free transport services and other services are closely monitored and properly coordinated according to the contracts by sales persons V Conclusion: The initial success of the selection of communication cable manhole cover to be the strategic product has shown that this choice is entirely correct In domestic market, Dai Phat’s communication cable manhole cover is initially replacing products by Mai Lam Casting Plant, Tran Hung Dao Casting Company, and Viet olDai Casting Company Dai Phat products have been supplied to many domestic famous enterprises such as VNPT, Viette, etc In foreign markets, communication cable manhole cover’s annual export quantity usually increases 5-8% each year However, there are still some business partners of Dai Phat’s traditional competitors still in doubt or not interested in the company’s products So in the coming time, Dai Phat will 10 Quản trị hoạt động towards these objects to further confirm its reputation and its communication cable manhole cover products’ quality 11 Quản trị hoạt động ... before being able to work independently III Selecting operational strategies based on SWOT analysis: Based on the analysis of strengths, weaknesses and business environment above, we can see there... difficulties The company needs to consider carefully before making new investment decisions - Another challenge for the company is unstable, low skilled workforce supply Then they need to be trained before... have encouraged and facilitated iron and steel industry Therefore, exporters of iron and steel end-products have enjoyed favors in fund raising, tax-reduction and exemption, export procedures, etc
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