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Strategy management

Strategic management is a set of management decisions and actions for defining long term efficiency of a company. + Choose suitable strategy to promote strong points, take advantages as well as recover weak points and anticipate threatens.

Role of a business strategy

Tool, Models of strategic analyzation and evaluation 1. Analyze the business environment

INTRODUCTION ON ENTERPRISE 1. Formation and Development process

Analysis on effects of business environment as per “PEST” mode 1 Political and legal factors

60/2006/QH11 on November 29th, 2005 passed by the National Assembly of Socialist Republic of Vietnam and came into effect as important legal document for stable operation of enterprises, especially private and joint stock companies. Along with development of regional and global economy, Vietnamese economy is presently in a stable growth with relatively high rate for many continuous years, being a strong motivation for development of food in general and beer - Alcohol - beverage in particular. Many macro-economic policies are applied by the government for deficit spending its economy for sustainable development, but not avoid arising shortcomings because its fledgling economy as integrating the international economy.

Economic integration creates conditions for most of big names in the world to appear in Vietnam but SABECO also create its separate beer of Vietnam, conquered the Vietnamese consumers at first and a number of countries in the region and the world. Dong Xuan alcohol factory has been in Vietnam since the 70s of last century, thought it was not constructed from massive equipments or scale, modern technologies, its trade name of Dong Xuan has gradually come to human hearts, bringing flavors of Vietnamese countryside from agricultural products. Vietnam is hot and humid tropical climate and a lot of rain, geologic structure is diversified and complex which is very favorable for raw materials of production, but difficulties in the preservation of semi-products and finished products.

Analysis of five competitive forces as per model of Michael Porter .1. Pressure from suppliers

Alternative products are numerous and available, however every lines of such products has individual favour creating taste of consumers which is not easily to change therefore we assess pressure of alternative products at average level. Approaching capacity of input factors of this sector is without difficulties, especially materials, therefore this pressure is rather strong, investors finds that advantages on profits shall purchase technologies and carry out business of products. Information which the purchasers have towards this group of products becomes increasing due to development of information technology and communications resulting in a lot of choice and decision as buying goods for purchasers.

Sensitiveness towards prices of this group of products is not much, just affecting in low-level group of products such as “rượu quốc lủi” (a Vietnamese distilled spirit made from rice), and “bia cỏ” (kind of beer manually procedure), etc. According to assessing report of Diageo Inc (the owner of brand Sminoff, Johnie Walker) in June 2010 on Vietnamese wine market: in 2010, products of Hanoi Liquor Joint Stock Company made 60% of market share on industrial alcohol production all over the country (estimated to gain 25 million liters, various turnover of 1,117 billion dongs), fermented Vodka was 3 million liter making 7% of output (actual turnover of around 200 billion dongs), Zelka achieved approximate 1.5 million liters, turnover was estimated to gain 100 billion dongs. In situation of internationally economic integration at current, many newly alcohol manufacturing companies are established in the recent years that have promoted powerful investment in technologies, product quality, models, etc leading to the market competition become more and more eventful and fierce.

Internal analysis of DOLICO (Strength and weakness) .1According to aspect of enterprise administration

Input logistics, the company builds a system of suppliers with adequate number (around over 20 suppliers in materials, and raw materials), materials for production of Saigon beer shall be provided by SABECO, the other shall be based on assessment on high qualified suppliers satisfying specific evaluation criteria, giving priority to traditional customers. We could find that the current assets of the company has accounted for higher density in asset structure (39% in the end of 2009 and 64% in the end of 2010) because the company has enhanced sales operation to increase liability receivables and inventories in 2010. Effectiveness of used fixed capital: In 2009, the company has completed investment in fixed assets from 2008 for purpose of increasing beer-processing capacity in the brewery, to 2010 the company has promoted the business and production efficiency, the said long-term liability has completely paid in 2010.

Coefficient on general payment capacity at the end of 2009 was 1.63 and the one at the end of 2010 was 1.99, this indicated that assets of company were bigger than the liability payables, or in other words, the payment capacity of company was greater than 1 and at the end of 2010 increased 22% more than in 2009. The company presently owns the production line of pure alcohol that is the main input materials for manufacturing Vodka alcohol of the company and some direct competitors is the important to regulate the market rate and also the leading enterprise in the middling alcohol market. The company standing in the market has some great reputation such as Vodka Hanoi, vodka men, foreign-imported alcohol, self-brewery alcohol is relatively disadvantageous, it is required much afford in the development of brand name, maintain the available market and addtionally expand.

SWOT Matrix, set up the strategic plan groups .1 Strength (S)

There are too many investors newly established or improve the capacity; the inconsiderate existence of institutions or individuals who consume the alcohol magnate, trafficking counterfeit goods. Take use of some method of giving mark with mark scale 10 to valuate the selected strategic plans through items affected the enterprise potentiality (capacity of profits, expenses, investment, risk), in the direction that the more benefits for enterprise to receive, there higher mark for enterprise to receive. The plan of Group 3 has the highest selection point due to the low cost but potential changes for the enterprise in all aspects of business operations from marketing management, production management and creating synergic strength of this enterprise.

The plan of group 4 has highest selection point due to the limited capacity for profits, much dependent on external factors influenced level to the strength of the business is not urgent. The plan of group 2 has the second-rank selection point because this is the available strength of the enterprise, however, in order to carry out this strength, it should be dependent on high-level personnel and large amount of implementation. The plan of group 2 has the third-rank selection point because of the great expenses, great pressure from outside as well as much dependent on the group of high- level officers of the enterprise.

Strategic implementing solutions

Enhancing recruitment of middle-level personnel with high quality from domestic and foreign sources (It is necessary to hire qualified foreigners in the position of marketing managers). Building systems to identify product quality of the company so that consumers easily identify and distinguish them from other products with low quality or existing counterfeit goods in the market. Promoting communication information about the danger and harmfulness of fake wine and alcoholic products with inferior quality, supporting technique and technology to overcome and prevent them from the harmful effects of fake wine on.

Restructuring the organization, reviewing the functions and missions of the departments and individuals in the enterprise under the sophisticated, refined and effective principle in production and business. Adding more technological departments and developing products under the management to meet the requirements of renovation and development of new models, comprehensive quality management of the Corporate products. Revising and completing the system of regulations on business and business of the entire company so that activities are not overlapped, reducing the internal force and promoting the creation and activeness of each part, effectively coordinating functions of the enterprise towards the customer, ensuring smooth operation of high performance of the entire management machine.

Roadmap for implementing strategic solutions N

Estimation on derivational situations and implementation solutions

The big brewers expand advertisement to promote the market

World food crisis causes economic crisis in Vietnam and higher food prices. Shortening the production of refined alcohol to focus on the production of

Alcohol companies promote the advertisement to expand market share of mid-level wines. Diversifying products with the existing capacity of

Institute for Management Research and Training (2007), Constructing and implementing Business Strategies to success, Social – Labor Publishing House. Materials for production: alcohol, sugar, acid, additive, coloring, flavors, empty bottle, board cases, label, bottom cover,…. +Beer Saigon 333: is produced from malt, rice, flowers and flavors,..to form canned beer 333, which is strictly controlled by SABECO in all aspects, from materials, technologies, output to product consumption work.

+ Saigon Bottle beer 330 Special: is produced from malt, flowers and flavors,..to form bottle beer 333, which is strictly controlled by SABECO in all aspects, from materials, technologies, output to product consumption work. + Henninger Draught Beer: purchasing copy right from Federal Republic of Germany since 1996s, which is produced from malt, rice, and flavors,..that the Company actively produces and consumpts the products. + Vodka Wine group: in glass or ped bottles; which is mixed from the commercial alcohol of the Company and flavors.