Tại phải xây dựng chiến lược cho doanh nghiệp Content There have been many big companies in the world and Vietnam suffering from failure According to statistics, now only 16/100 big enterprises have existed since previous centuries Hence, which are reasons that made big companies which ever had a heyday with miraculous success to fail? Through the analysis of companies, causes leading them to failure include: - Can not escape from the glorious past (can not escape from its own shadow) - At the age of heyday, all enterprises ' desires can be achieved easily - They are satisfied with all outcomes even if they are not really worth - There are too many redundant resources - Only based on material resources and using these resources instead of creativity - Maintain the system was successful from before so there is no any initiative for future - No business optimization system is upgraded regularly - Business process too rigid, vulnerable with the business environment change - The strategy is too short with past successes - Glorious giving to leaders, to make them lack motivation - Always optimistic / unrealistic optimism Therefore, a business wants to survive and develop needs to have an appropriate strategy So what is strategy? There have been many definitions of business strategy which many economists brought out through collection and I see: Strategy is a concatenation, a series of activities designed to create long-term competitive advantages compared with rivals In the operatation environment of a company, including market and competitors, strategies outlined a consistent conduct for a company Strategy shows a selection, a swap of the company which professionals often call strategic positioning Company operates without strategy like a person going on the road without determination of where to go, where to come back, letting the crowd (market and Page of 10 competition) push in any direction and then they move in that direction If continue to go on like that, he will be only a mediocre in the crowd forever A talented leader will not want to consign the future of his business for competitor and market To that, he must proactively set out a direction and try to influence and lead the market to this direction which his company has prepared, therefore, it will get more advantages than others In any confrontation, rivals who can impose their game on the opponent will have better chance of winning So with such concept, the strategy for a business or an organization has what role and benefits? Benefits of Strategic Management Strategic management allows an organization to be more proactive than reactive in shaping its own future; it allows an organization to initiate and influence (rather than just respond to) activities—and thus to exert control over its own destiny Small business owners, chief executive officers, presidents, and managers of many for-profit and nonprofit organizations have recognized and realized the benefits of strategic management Historically, the principal benefit of strategic management has been to help organizations formulate better strategies through the use of a more systematic, logical, and rational approach to strategic choice This certainly continues to be a major benefit of strategic management, but research studies now indicate that the process, rather than the decision or document, is the more important contribution of strategic management.Communication is a key to successful strategic management Through involvement in the process, in other words, through dialogue and participation, managers and employees become committed to supporting the organization Figure illustrates this intrinsic benefit of a firm engaging in strategic planning Note that all firms need all employees on a mission to help the firm succeed Figure Benefits to a Firm That Does Strategic Planning Page of 10 The manner in which strategic management is carried out is thus exceptionally important A major aim of the process is to achieve the understanding of and commitment from all managers and employees Understanding may be the most important benefit of strategic management, followed by commitment When managers and employees understand what the organization is doing and why, they often feel they are a part of the firm and become committed to assisting it This is especially true when employees also understand linkages between their own compensation and organizational performance Managers and employees become surprisingly creative and innovative when they understand and support the firm’s mission, objectives, and strategies A great benefit of strategic management, then, is the opportunity that the process provides to empower individuals Empowerment is the act of strengthening employees’ sense of effectiveness by encouraging them to participate in decision making and to exercise initiative and imagination, and rewarding them for doing so Strategic planning is a learning, helping, educating, and supporting process, not merely a paper-shuffling activity among top executives Strategic-management dialogue is more important than a nicely bound strategic-management document The worst thing strategists can is develop strategic plans themselves and then present them to operating managers to execute Through involvement in the process, line managers become “owners” of the strategy Ownership of strategies by the people who have to execute them is a key to success! Although making good strategic decisions is the major responsibility of an organization’s owner or chief executive officer, both managers and employees must also be involved in strategy formulation, implementation, and evaluation activities Participation is a key to gaining commitment for needed changes An increasing number of corporations and institutions are using strategic management to make effective decisions But strategic management is not a guarantee for success; it can be dysfunctional if conducted haphazardly Financial Benefits Research indicates that organizations that use strategic-management concepts are more profitable and successful than those that not 16 Businesses using strategicmanagement concepts show significant improvement in sales, profitability, and productivity compared to firms without systematic planning activities High-performing firms tend to systematic planning to prepare for future fluctuations in their external and internal environments Firms with planning systems more closely resembling strategic-management theory generally exhibit superior long-term financial performance relative to their industry High-performing firms seem to make more informed decisions with good anticipation of both short- and long-term consequences In contrast, firms that perform poorly often engage in activities that are shortsighted and not reflect good forecasting of future conditions Strategists of low-performing organizations are often preoccupied with solving internal problems and meeting paperwork deadlines They typically Page of 10 underestimate their competitors’ strengths and overestimate their own firm’s strengths They often attribute weak performance to uncontrollable factors such as a poor economy, technological change, or foreign competition More than 100,000 businesses in the United States fail annually Business failures include bankruptcies, foreclosures, liquidations, and court-mandated receiverships Although many factors besides a lack of effective strategic management can lead to business failure, the planning concepts and tools described in this text can yield substantial financial benefits for any organization Nonfinancial Benefits Besides helping firms avoid financial demise, strategic management offers other tangible benefits, such as an enhanced awareness of external threats, an improved understanding of competitors’ strategies, increased employee productivity, reduced resistance to change, and a clearer understanding of performance–reward relationships Strategic management enhances the problem-prevention capabilities of organizations because it promotes interaction among managers at all divisional and functional levels Firms that have nurtured their managers and employees, shared organizational objectives with them, empowered them to help improve the product or service, and recognized their contributions can turn to them for help in a pinch because of this interaction In addition to empowering managers and employees, strategic management often brings order and discipline to an otherwise floundering firm It can be the beginning of an efficient and effective managerial system Strategic management may renew confidence in the current business strategy or point to the need for corrective actions The strategicmanagement process provides a basis for identifying and rationalizing the need for change to all managers and employees of a firm; it helps them view change as an opportunity rather than as a threat Gordon Greenley stated that strategic management offers the following benefits: It allows for identification, prioritization, and exploitation of opportunities It provides an objective view of management problems It represents a framework for improved coordination and control of activities It minimizes the effects of adverse conditions and changes It allows major decisions to better support established objectives It allows more effective allocation of time and resources to identified opportunities It allows fewer resources and less time to be devoted to correcting erroneous or ad hoc decisions It creates a framework for internal communication among personnel It helps integrate the behavior of individuals into a total effort 10.It provides a basis for clarifying individual responsibilities Page of 10 11.It encourages forward thinking 12.It provides a cooperative, integrated, and enthusiastic approach to tackling problems and opportunities 13.It encourages a favorable attitude toward change 14.It gives a degree of discipline and formality to the management of a business With the analysis in above benefits that are most important and most basic of strategic management? My personal opinion 03 benefits as follow: Sets the strategic direction to the firm - Understanding the changing environment Strategic management process clearly defines what is the desired level of performance (mission/goals/objectives) and it sets the direction so that everyone in the organization knows where are they heading towards Strategic management act as a road map to everyone in the organization and it clearly defines the way to get to the final destination/desired level of performance Strategic management predicts the future changes that can take place Predicting future changes that can take place will help the organization to be proactive and take necessary steps to manage change with contingency planning and change management strategies Focus on critical factors of the organizationStrategic management identifies the critical factors that are strategically important to the organization When critical factors are identifies company can analyse and take relevant measures to ensure satisfactory performance in those areas Obtaining sustainable competitive advantage - Ensure the long term survival in the market place This is the most important and the most critical benefit of strategic planning By a successful strategic management process company should be able to build a competitive advantage over other competitors which can be sustained overtime without being imitated or outperformed by its competitors Strategic management identifies the competitive advantages that can be generated through strengths of the organization and take necessary steps to effectively obtain it Strategic management identifies opportunities and threat that influence the organizational performance It make use of opportunities and minimize threat to make sure that company can survive in the market by outperforming its rivals This point of view has been demonstrated through the following example: NatSteel Holdings Singapore was established in August 12, 1961 in Singapore Since its establishment with the first name of the National Steel Company (National Iron - Steel Page of 10 Mill - NISM), the strategic direction for its products is to produce all steel products for the construction industry of Singapore and Malaysia In September 16, 1962 at Jurong industrial park (the first and largest industrial zone in Singapore) Dr Goh Keng Swee, (later become the Finance Minister of Singapore) put the first brick for building plant After the process of building refining and rolling mill with the continuous rolling technology of 21 rolling stands - the most advanced at that time designed and installed by Italian manufacturers Pomini and Danieni By January 31, 1964 the first batch of steel of NISM was brought to the market After going into the stable production process and continuous growth in sales, revenue and profit, NISM did not stop there but continued to invest into pulling and cold rolling to serve the production of welding steel which was determined as new products which would be in great demand in future From 1965 to 1988 along with regular survey and hiring strict evaluation survey agency to examine indicators of macroeconomic, identify business environment, competition, capacity factor, determined competitors in the short -term and long-term to establish and adjust development strategies that plant capacity was expanded from the first line MBM1 in 1964 to 1988 - the inauguration of MBM6 Besides that, the ancillary works for lines above were also built synchronously as steel scrap store, treatment areas to clean steel scrap and whalf For increase in plant productivity, not only increasing product yields to Singapore market but also expanding to a new market - Malaysia Through exporting to Malaysia, in addition to maintaining the capacity of new lines when Singapore market is not growing up with plant capacity and account for the first position but not the exclusive position in the steel industry These are one of things new investors still hesitate to propose ideas of investing in steel industry in Singapore At the same period, in 1982 NISM built a completed steel processing plant which was the first large-scale in Asia This is the company having full of machinery and equipment to perform machining processes steel for construction, see illustration below: Page of 10 Together with the growth of the international science and technology, NISM always caught up and kept the initiative Till 1985, the first computer system was used in the control system of the production by NISM and by 1990 all system of the plant was controlled by computer control system 1990 was also the year marked a turning point of NISM by renaming itself to NatSteel (National Steel) and besides that is expanding investment in the chemical industry, electronics technology, resort and real estate Investing in technical industries mostly based on experience and qualifications of available NatSteel staffs who regarded as one of NatSteel partners in serving activities to enhance production capacity and trading of NatSteel Until 2013, NatSteel capacity in Singapore reached 900 000 tons of rolled steel/year and capacity of steel processing plant reached 650 000 tons/year Also in 1990, a joint venture with the Southern Steel Behard to become a steel manufacturing plant with a capacity of 300 000 tons/year located at address: Lorong Perusahaan 12, Prai Industrial Zone Penang, Pinang states, Malaysia Its capacity was continuously upgraded in periods and till 1997 capacity reached 900 000 tons/year and 1.3 million tons year by 2012 Continuing its strategy, in 1993 NatSteel continued joint venture with Vietnam Steel Corporation VNSteel, then established NatSteelVina Co., Ltd After the construction of the plant in Thai Nguyen Iron and Steel industrial zone, it was completed in 1995 with a capacity of 120 000 tons/year (upgraded to 200 000 tons/year in 2011) specializes in the production of hotrolled steel products serving the construction industry in northern Vietnam The coverage of products in 2013 is 17 provinces in Northern Vietnam with market share of 6% In 1993 NatSteel Xiamen factory was established in Xiamen City, Fujian Province, Page of 10 China with a capacity of 350 000 tons/year (reserved capacity of 150 000 tons/year) which formally inaugurated by Prime Minister Ly Quang Dieu in December 1997 In Fujian Province, in 2012 and 2013 NatSteel continued to take overs more corporations of Xinhai Group at Fuzhou, China – of largest cities in Fujian Province, increasing capacity of NatSteel Xiamen up to 1,15 million tons/year Besides increasing steel production capacity, NatSteel invested a steel processing plant in Xiamen city with a capacity of 250 000 tons year in 2011 and started bringing product to market in 2013 During this period, NatSteel opened a fabrication plant in East Philippine located in Iba – Bagbaguin St, Brgy 171 Dist, Metro Manila , Luzon - Manila Philippines with a capacity of 350 000 tons/year In 1999 NatSeel continued to penetrate Thailand market Steel factory in Thailand is prestressed steel cables placed in 160Moo.11T.Nonglalok SIW , A.Bankhai , Rayong 21120 , Thailand with a capacity of 200 000 tons/year and expanded its influence further in Thailand market by building the second factory of prestressed steel cable TSN Wires Co., Ltd in 199 Moo 11 T.Nonglalok Bankai Rayong 21120 Thailand inaugurated and brought products to market in 2013 with a capacity of 250 000 tons Continuing its strategy by investing into NatSteel Australia steel processing plant in Sydney in 1999 and took over Best Bar Australia in 2000 With this strategy NatSteel has put their products in the most developed areas of Australia like Sydney, Melbourne and Perth then increasing its capacity in Australia to 250 000 tons/year In Indonesian market, by a joint venture with Indonesia 's largest steel company Krakatau to invest in the construction of steel processing plant in Jakarta in 2013 with Phase capacity of 200 000 tons expected for products in the first quarter 2015 As of 2013 the total rolling capacity of the whole NatSteel group reached 3.9 million tons Processing capacity cutting, bending steel mesh reached 1.35 million tons Production capacity of high -strength steel products reached 450 thousand tons (See details in the chart below) Along with improving the production capacity are management strategies, effectiveness evaluation of business operations applied ISO 9000 – 94 system which took effects in 1996 The process of strategic planning and management changed in 1998, applied ISO Page of 10 14000 in 1999, Real Time Customer Service Information System YESS in 1999, online customer satisfaction survey measuring system in 2002, the Working Safety ( Safety first ) in 2005 , professional sales team ( Salefore ) in 2006, Corporate social responsibility (CSR) programs 2007, improving green environment of rolling mill ( Mill green ) 2010 With all efforts and thorough plan defined and adjusted annually in accordance with the changes of the business environment, NatSteel Holdings has continuously developed for over 50 years of operation In addition to its strategies NatSteel was highly appreciated and acknowledged with awards by organizations in Singapore From example of the development of NatSteel, it can be seen that: Since establishment, NatSteel strategy has been always consistent and development is determined through an understanding of manufacturing and trading steel products serving construction industry Always forecast future needs, including the need for new products and types, as evidenced by the establishment of steel processing plants before real demand growth for nearly a decade NatSteel concentrates on its important factors like its highly qualified staff, working environment which provides opportunities for all individuals and they are respected in a united team with high spirit of cooperation Thus, in its own strategy, NatSteel has identified the core values from which to create the advantages of development and achieve the set out strategic objectives NatSteel always creates sustainable competitive advantage and ensures long-term survival in the Singapore steel market by increasing steel capacity, productivity to take every advantage to offer products with competitive price, highl quality and continuously improved service so NatSteel sustainably has a market share of 40% in Singapore market, 45 % market shate in Fujian Province In addition, to ensure the sustainable development, NatSteel strategic staffs continuously analysis to Page of 10 identify opportunities and challenges, potential threats to adjust strategies suitable with the constantly changing market Therefore, since it was found with production of only 12 thousand tons/year, after 50 years, until now total capacity of NatSteel reaches 4.75 million tons/year for all types of steel products To achieve this NatSteel must have a good strategic appropriate with the trend and the increasing demands of the market Notes: Rolling: In steel production technology, after smelting and hot rolling hot-rolled products are taken and drawn then cold-rolled as raw materials Pulling and cold rolling technology are used to improve the physical and mechanical target Welded Mesh: Products used for palisade with meshes made from steel have a diameter ≤ 6mm Products used for pouring concrete reinforced floor have diameter ≥ mm Due to small area of Singapore, to minimize phases in construction, from 1989 all the buildings in Singapore are not processed as cut and bend, crack to make structural columns and beams at site All these phases are done in steel processing plants then delivered to the site to assemble and concrete Documentation: - - Strategic Management Curriculum - Prof.Dr Vu Thanh Hung - Strategic Management Concepts: A Competitive Advantage Approach - Fred R David - - NatSteel Holdings historical markers Page 10 of 10 ... in 20 13 is 17 provinces in Northern Vietnam with market share of 6% In 19 93 NatSteel Xiamen factory was established in Xiamen City, Fujian Province, Page of 10 China with a capacity of 35 0 000... in Jakarta in 20 13 with Phase capacity of 200 000 tons expected for products in the first quarter 2015 As of 20 13 the total rolling capacity of the whole NatSteel group reached 3. 9 million tons... 20 13 During this period, NatSteel opened a fabrication plant in East Philippine located in Iba – Bagbaguin St, Brgy 171 Dist, Metro Manila , Luzon - Manila Philippines with a capacity of 35 0