Luận văn thạc sĩ quản trị kinh doanh quốc tế MBA (2)

For these reasons, the orientation of business strategy consistent with thespecific characteristics of each company to survive, develop and improvecompetitiveness is the most urgent need

We certify that the content of this capstone project report has not been offered toany training program We undertake that this report is the effort of the four people inour group, which is not copied from others’ meanwhile the data and materials used inthe research is true and correct to the original, unless otherwise we may bear fullresponsibility

       SIGNATURES OF STUDENTS IN GROUP

GRATITUDE

We would like to express our gratitude to all teachers and lecturers of Griggs

University, United State of America, under the ETC Centre of Vietnam National University,who have will all their heart guided and provided us the theoretical researching approach to

analyse the current real situation of Sai Gon- Dong Xuan Beer Alcohol Joint Stock

Company Our group has presented some solutions in both macroscopic andmicroscopic aspects and all solutions have much closely referred to the necessity ofchanging and perfecting the business strategies of the company Due to the limitedperiod of research, in addition, these are the subjective ideas of our group, it is possible

to meet some shortcomings in the graduation thesis We do hope to receive the opinionand suggestion from our teachers and colleagues for our more complete and perfectgraduation capstone project report

Thank you very much for helping us to complete this thesis

LIST OF FIRGURE AND TABLE

INTRODUCTION

ANALYSIS

CHAPTER 1: ARGUMENT BASE OF BUSINESS STRATEGY

1.1 Concept of strategy and role of business strategy

1.1.1 Concept of strategy

1.1.2 Strategy management

1.1.3 Role of a business strategy

1.2 Tool, Models of strategic analysis and evaluation

1.2.1 Analyze the business environment

1.2.1.1 Analyze the micro environment - PEST model:

1.2.1.2.2 Michael Porter's competition model1.2 Analyze the industry

environment – M.Porter’s five forces model

1.2.2 Analyze the company’s internal environment:

1.2.2.1 Analyze as per management field

1.2.2.2 Analyze as per key capacity and competitive advantage

1.2.4 SWOT Matrix1.2.3 Tools for positioning the strategic position and

orientation : SWOT Matrix

CHAPTER II: BUSINESS ENVIRONMENT ANALYSIS OF

SAIGON-DONGXUAN BEER, ALCOHOL JSC

2.1 INTRODUCTION ON ENTERPRISE

2.1.1 Formation and Development process

2.1.2 Vision, mission, core values of main business lines of the Company

2.1.3 Organizational structure of the Company

2.1.4 Structure of products

2.1.5 Business function and responsibility

5 6 9 9 9 9 11 12 12 12 12 15 19 19 19 20 24

24 24 24 25 26 27 29

2.2 Analysis on effects of business environment as per “PEST” mode

2.3 Analysis of Michael Porter’s five force model

2.4 Internal analysis of enterprise

2.4.1 According to aspect of enterprise administration

2.4.1.1 Analysis on Production capacity

2.4.1.2 Analysis on Logistics Capacity

2.4.1.3 Analysis on Financial Capacity

2.4.1.4 Analysis on Capacity of Marketing

2.4.1.5 Analysis on Personnel Capacity

2.4.2 Analysis on Competitive advantage and essense capacity

2.5 SWOT Matrix, set up the strategic plan groups

CHAPTER III: STRATEGY SELECTION AND SOLUTION FOR

IMPLEMENTATION

3.1 Strategy Selection

3.2 Strategic implementing solutions

3.2.1 Solutions for finance and investment

3.2.2 Personnel Solutions

3.2.3 Technological Solution

3.2.4 Solutions to marketing

3.2.5 Solutions to organization

3.3 Roadmap for implementing strategic solutions

3.4 Estimation on derivational situations and implementation solutions.

CONCLUSION

REFERENCE DOCUMENTS

LIST OF DIAGRAMS AND TABLE

37 37 37 38 38 41 43 44 45 49

49 50 50 50 51 51 51 52 53 54 55

Figure 1.1.2 Process of strategy amnegement 11

Table 2.3 Assesment on strengh and weakness, five pressures of

Dolico

37

INTRODUCTION

1 Necessity and meaning of the research topic:

Vietnam's economy, a centrally planned economy, where the economicactivities of enterprises are allocated from the top down instead of following theprinciple of supply and demand, so the market is divided clearly without competition

factor in business The companies was originally formed from family base in which,businessmen promptly recognize opportunities and take their good advantages todevelop successfully up to now

However, whether these factors have helped our enterprises to gain success inthe past should be still suitable to new market conditions when Vietnam joins WTO.Whether the situation of an abundant capital remains or not in a market with suchfierce competition and a playing field where competitors are foreign companies,multinational corporations with decades of experience Obviously, to play in the newmarket environment effectively, it is necessary for the businessmen to be equippedwith the knowledge to understand the new rules, the general business strategy andcompetitive strategy in line with the requirements of new markets

In the condition that our country has been involved deeper into the worldeconomy, generating many opportunities and challenges for Vietnam enterprises ingeneral and for beverage industry in particular Currently, the enterprises in the sector

of manufacturing and trading beverage to take the maximum advantages ofopportunities and to overcome challenges to raise competitive strength in the newbusiness environment, optimizing performance

For these reasons, the orientation of business strategy consistent with thespecific characteristics of each company to survive, develop and improvecompetitiveness is the most urgent needs today

This thesis focuses on the construction, analysis and selection of businessstrategy options and offer practical solutions to implement strategies for Saigon - DongXuan Beer Alcohol Joint Stock Company in the period 2011 - 2015, to improvecompetitiveness and business efficiency to help the company gain the sustainabledevelopment

2 Purposes of the dissertation research

Pointing out the business strategy for Saigon - Dong Xuan Beer Alcohol JointStock Company in the period 2011 – 2015;

Being aware of core competencies, strengths, weaknesses, opportunities andchallenges of Saigon - Dong Xuan Beer Alcohol Joint Stock Company at present;

Construction, analysis and selection of business strategies and making necessarymeasures to implement the strategies in the period 2011 - 2015, to improve

competitiveness and business efficiency to help Saigon - Dong Xuan Beer Alcohol Joint Stock Company gain the sustainable development;

Improve the ability to apply theory on construction of the business strategy in a specific enterprise;

Making the guideline for companies to implement the production - businessplan, to achieve the Corporate goal to become a sustainable developed enterprise inSABECO in particular and in the industry in general

Method of processing and analyzing data: Analyzing, generalizing and making acomparison

The main method in the research is to describe, make statistics combined withthe analysis, generalization and making a comparison,… to clarify and specify thecontent of the dissertation research

4 Structure of the dissertation

The object of capstone project report is the strategic development of Dong Xuan beer alcohol joint stock company (DOLICO) from 2011 to 2015 Thecompany has experienced many periods together with the economic growth ofVietnam Up to now, the company has gained some remarkable achievements inbusiness activities but it is potentially lagged behind by other competitors Besides, thedevelopment of the company is not equivalent to its potential The capstone projectreport will mention some opportunities and challenges as well as strengths andweaknesses of DOLICO in order to propose appropriate guidelines to boost the growth

Saigon-of the company in the field Saigon-of revenues, prSaigon-ofits and scope Saigon-of influence in the period Saigon-of

2011 to 2015

CHAPTER 1: ARGUMENT BASE OF BUSINESS STRATEGY

CHAPTER 2: BUSINESS ENVIRONMENT ANALYSI OF DONGXUAN BEER, ALCOHOL JSC

SAIGON-CHAPTER 3: STRATEGY SELECTION AND SOLUTION FOR IMPLEMENTATION

CHAPTER I.

ARGUMENT BASE OF BUSINESS STRATEGY

1.1 Concept of strategy and role of business strategy

1.1.1 Concept of strategy

“Strategy” term is originated from the word “strategos” in the ancient Greek,with a basic theoritical point that one party can crush opponent, even if the opponent issuperior in number, stronger, if they can lead the status and trick the opponent into thebattlefield favourable for implementing its capacity (advantage) In the competitivebusiness world nowadays, the concept of strategy is studied and developed more,mainly concentrated in 4 major categorys: plan, model, position, and vision According

to these viewpoints, the strategy means::

“A united, comprehensive and cooperative plan, is designed to ensure the basictarget of a company is carried out successfully” (Lawrence R Jauch & William F.Gluek (1989) Business Policy and Strategic Management)

“A model or plan of an organization for cooperating decisive targets, policiesand orders of action in a united block” (Quinn, J., B (1980) Strategy for change:Logical Inscrementalism Homewood, Illois, Irwin.)

“Research for a suitable competitive position in an industry, a major operationscope occuring competitive activitities” (Porter, M.E (1981) The contribution ofIndustrial Organization to Strategic Management New York)

“Define long term basic target of a company, action program with thedistribution of necessary resources to carry out those targets(http://www.news.harvard.edu/gazette/2007/05.17/27-chandler.html January 10th,2010)

In general, setting up a strategy must meet concurrently the following factors:

Be map out in a long time and define clearly basic targets and businessorientation of a company

Create the growth for the organization, ensure the continuous and sustainabledevelopment of a company in a competitive business environment

Use all resources of an organization in the most effective way;

Create the best competitive position for the organization in the future

So, it can say that, strategy “are series of long term activities built up to bring anorganization from the current position to a desired position in the future viaestablishing the competitiveness in comparison with advantages of other organizations

on the market.” (Michael E Porter (1996) What is strategy?, Harvard Business

Review) The operation of an organization in long term is to achieve the businessadvantage in defining the available resources to use in a defined business environment,

in order to satisfy the market demand and ensure benefits for all relating agents(stakeholder)

In almost business environment, the “strategy” term is derived as per level andthere are three ordinary ways for using it: Corporate strategy, Business unit strategy(business strategy) and Function strategy.1.1.2 The basic of strategy

Corporate strategy represents the correlative relationship between general targetand corporate scope to meet expectations of the capital contributors It is affected much

by the investors in the company and it plays the role of instructing the process ofmaking decision on a strategy in the whole company Corporate strategy is oftenpresented clearly in “Mission Declaration”

Business strategy shows how a company can compete successfully in a specificmarket It relates to strategy decisions in choosing products, meeting customerdemands, gaining the competitive advantage over opponents, exploiting and creatingnew opportunities, etc

The function strategy shows how each component in a company can beorganized to carry out the strategic orientation at company level and each component in

a company Therefore, the function strategy concentrates on matters of resources,handling process and human, etc

1.1.2 Strategy management:

Strategic management is a set of management decisions and actions for defininglong term efficiency of a company

Strategic management includes:

+ Define mission and target of an organization

+ Analyze the internal and external environment of an organization

+ Choose suitable strategy to promote strong points, take advantages as well asrecover weak points and anticipate threatens

+ Organizational structure and control system for carrying out a chosen strategy The strategic management process is illustrated as per the following diagram:

Figure 1.2.1 Macro environment1.1.2 Process of strategic management

5

The Strategic Management

Process

The Strategic Management

Process

Internal Environment

External Environment

Acquisitions &

Restructuring

Corporate Governance & Control Structure

Strategic Leadership

1.1.3 Role of a business strategy

From above conceptions, we can see that a business strategy plays a veryimportant role in the business and production activities of a company, it gives out big,long-term targets for a company, since then, the company must mobilize resources tocarry out Besides, it contributes to forecast changes of the environment, so that thecompany can control better its activities

In a market economy nowadays, a good business strategy will increase thecompetitive strength, help the company to develop sustainably, gain many profits, etc

1.2 Tool, Models of strategic analyzation and evaluation

1.2.1 Analyze the business environment

1.2.1.1 Analyze the micro environment - PEST model:

PEST is a model of researching impacts of four main factors in a macroenvironment Those factors are:

objective factor Those companies will base on the impacts to give out suitable policiesand business activities.

The P.E.S.T model now is widen to P.E.S.L.T (supplement the Legal factor)

1.2.1.1.1 Political - Legal environment:

This is the factor that affects to all business lines on a territory, regulations, law,may overwhelm the capacity of existing and developing of any industry When trading

on a non-business unit, the companies will have to abide by legal regulations in thatregion

The stability: The stability considered here are factors of political conflicts,foreign affairs of a legal framework The framework with high stability will be able tocreate favorable conditions for the business activities and vice versa, those frameworksnot having high stability will occur conflicts and cause bad impact to business activities

Situation of the economy: Any economy also has cycle, in every define phase

of an economic cycle, the company will have suitable decisions for itself

Factors affect to the economy: interest rate, inflation

Economic policies of the government: Law on basic salary, economicdevelopment strategies of the government, incentive policies for industries: taxreduction, subsidy

Economic prospect in the future: growth speed, GDP increase level, GDP ratio

on investment capital

1.2.1.1.3 Social cultural environment:

Every nation, territory has its own typical cultural values and social factors, andthese factors are characteristics of the consumers in such regions

Cultural values are those set up a society, which can look after such society to exist anddevelop Therefore, ordinary cultural factors, customs, practices are protected veryclosely within a scope, especially the spiritual culture However, we can not also denycultural interferences of other cultures into nations These interferences will change thepsychographics, lifestyle, and create prospects for industries

Besides the culture, social characteristics also receive much care fromcompanies when they research the market Social factors will divide the communityinto groups of customers, each group has different characteristics, psychology, income,etc:

Average life expectancy, health status, nutrition regime, diet

Average income, income distribution

Style, lifestyle, education level, aesthetic viewpoint, psychological factor

Living condition

1.2.1.1.4 Technological environment:

The world is in the revolution of technology, a series of new technologies havebeen come out and integrate in products and services

Developments in fields of information technology, communication information,transportation have shortened geographic distances, transshipment means; reducingloads for the saving process, reducing expenses for communication information,archive and transport activities.

The investment policy of the government, the company develops transportinfrastructure, technical infrastructure, studies, applications of technological science

Speed, cycle of the technology, ratio of backward technology

Impact of information technology, internet to business activities

1.2.1.1.5 Geographic environment:

Besides basic factors mentioned above, for the time being, when researching themarket, companies must account for the globalization factor which is a macro factorimpacting on the industry

No one can deny the trend of globalization, and this trend does not createopportunities for companies, nations in developing production and business

Globalization create the competitive pressure which opponents come from allregions The integration process will cause companies to adjust to suit withcomparative advantages, labor division of the region and the world

It is important when integrating that, trading barriers will be removed gradually,companies will have opportunities for trading with partners in a far way distance,customers of the company at that time will not only from the domestic market but alsofrom many other places

1.2.1.2.2 Michael Porter's competition model1.2 Analyze the industry environment – Michael Porter’s five force model:

“Michael Porter’s five forces” are considered as useful and effective tools forunderstanding the origin of profits More important, this model provides competitivestrategies for the company to remain or increase profits

Figure1.2.1.2: M Porter’s five forces model

According to Michael Porter, the competitive intensity on the market in anyproduction industry is impacted by 5 following competitive forces:

1 Power of suppliers: Express the pressure of supplier on the company, of the

suppliers impact much to the output and profit of the company, they have strong effect.Strength of the supplier is expressed in following characteristics:

Concentration level of suppliers

The importance of products quantities on the suppliers

The difference of suppliers

Impact of input factors to the expenses or the product differentiation

Expenses for converting of companies in same industry

Existence of substitute suppliers

Risk of merging increase for suppliers

Supply expenses in comparison with total income of the industry

2 Power of buyers: If buyers impact much to the output and profit of the

company, they have strong effect which is expressed in:

Bargain position

Number of buyers

Information got by buyers

Feature of goods marks

Sensitivity for price

Product differentiation

Concentration level of customers in same industry

Availability of substitute goods

Motive of customers

3 Availability of substitute goods: expressed in:

Conversion cost in using product

Trend of using substitute of customers

Correlation between price and quality of substitute products

4 Potential competitive opponents: these are opponents which the company will

meet difficulties in evaluating and the industry integration barrier will bring a betterlook for the company

Absolute expense advantage

Knowledge of the market fluctuation cycle

Access of input factors

Policies of the government

Economy as per scale

Requirement of capital

Feature of goods mark

Expense for converting business industry

Access to distribution channel

Ability of reprisal

Proprietary product

5 Competitive opponent: express the competitive strength among companies in same industry

Barriers for “escaping” from industry

Concentration level of the industry

Fix expense/added value

Growth status of the industry

Status of output surplus

Difference among products

Conversion cost

Characteristic of goods mark

Diversification of competitive opponents

Screening status in the industry

And Pressure from closely relevant parties, this is the pressure not mentioned

directly in the matrix but in the book of "Strategic Management & Business Policy" ofThomas L Wheelen and J David Hunger, has noted about pressures from closelyrelevant parties They are: the Government, Community, Associations, Creditors,Sponsors, Shareholders, Complementary (meaning the suppliers of supplementaryproducts of one or many other industries)

Companies often use this model to analyze whether they should enter a market

or operate in a market However, because the business environment nowadays has the

“activeness”, so this model is also applied in searching a define industry in the areaneeded to be improved to generate more profits

1.2.2 Analyze the company’s internal environment:

1.2.2.1 Analyze as per management field: Analyze the relation of management ,emphasize on awareness of interactive and managing ways of competitive forces andexternal cooperation

Analyze as per fields of: logistics material; Production; Personnel; Finance Accounting; Marketing; Investment, etc, then evaluate the strong points and weakpoints of the company

-1.2.2.2 Analyze as per key capacity and competitive advantage:

Besides expanding vision to the outside to find out threatens and searching foropportunities, strategists also have to evaluate strong points and weak points in theirorganization

As well as outside opportunities and threatens, the awareness of internal strongpoints and weake points having a real meaning to know what targets and strategies ofthe company are most feasible and most auspicious

So, what are strong points and weak points of a company or a division? Is thecompany able to expand its access to the market or not? What is the communicationchannel of R & D projects (Research and Development” and how is the horse-tradingcapacity of the staff ?

Answering such above questins are tasks of analyzing internal environment, or

in other words, is to analyze internal factors The purpose of analyzing internalenvironment is to identify existing and potential resources, key capacity, createcompetitive advantage of the company; as well as identify barriers in remaining thecompetitive advantage sustainably

So that, create the difference or key capacity is the origin of the sustainablecompetitive advantage The key capacity of a company “identified” base on thefollowing factors: ability of bringing values that impact soundly on the choice ofproducts/services; providing products/services better than compeitive opponents and

always have innovative solution when the opponents catch up with them; penetrate intobig potential markets SWOT analyzing is an important technique that often be used toanalyze the internal environment of a company

1.2.31.2.4 SWOT Matrix Tools for positioning the strategic position and orientation

SWOT matrix and choice of business strategy:

Analyzing SWOT is one of five steps to form business strategy of a company, itincludes: establish the guiding principle of a company, analyze SWOT, define strategictarget, form strategic targets and plans, define strategic control regime It is not onlymeaningful for the company in forming domestic business strategy but also veryimportant in forming international business strategy to meet the demand ofdevelopment, gradually create prestige, brand name firmly and sustainably, analyzingSWOT is an indispensable part in defining the business strategy of a company

So, analyzing SWOT is to analyze external environment factors which thecompany has to cope with (having opportunities and risks) as well as factors from theinternal environment of the company (strong points and weak points)

The company defines opportunities and risks via analyzing data of changes ineconomic, financial, political, legal, social and competitive environments and competition

in markets where the company is operating or having intention to enter Opportunities mayinclude potentiality of market development, market clearance, near the material resources

or cheap labor resources with suitable skills Risks for the company may be the narrowmarket, fierce competition, changes in policies which may happen at anytime, instabilities

of politics in key markets or development of new technology cause means and productionlines of the company be threatened to be backward

With analyzing the internal environment of the company, strong points oforganization may be skills, resources and advantages which the company had earlierthan its competitive opponents (key capacity of the company) such as having many

talent managers, dominant technologym, cash on hand, good image in the public eyes

or gain big market share in key markets Weak points of the company are expressed indefects or infirmities and skills, resources or factors limiting competitive capacity ofthe companies It may because of less effective distribution network, bad relationshipsamong labors, lack of managers with international experience or backward products incomparison with competitive opponents

Figure 1.2.3: S.W.O.T matrix

* Strengths: Strong point of a company includes resources and ability of usingsuch as the base, foundation for developing the competitive advantage, for example::

Patent,

Famous brand,

Good prestige by evaluation of the customer,

Advantage of low expense due to private production know-how,

Ability of easy accessing to high-grade natural resources ,

Ability of easy accessing to distribution network

* Weaknesses: Not having strong points is considered as weak point Thefollowing characteristics can be considered as weak points:

Not having copyright protection,

Brand is less popular

Be considered as bad fame by customers

Operating structure requires high expenses,

Less capacity of approaching to natural resources,

Less capacity of approaching to main distribution channels

In serveral cases, weak points may be strong points, if considering from anotherviewpoint Let learn about the case which a production unit have large productioncapacity, we can see this point clearly Although large cpapcity can be considered asstrong point which opponents of this company do not hve, but it is also considered asweak point if the invest too much into capacity will make the company hardly to adjust

to suit with the environment changes

* Opportunities

Analyzing of external environment may disclose new opportunities to createprofits and development, for example:

Customer demand has not been fulfilled sufficiently,

New technology comes out

Regulations are not tight

Removal of international trading barriers

New legal regulations

International trading barrier is tighter

A company is not necessary to pursue best opportunities In stead of that, it cancreate the ability of developing competitive advantage by studying the appropriate

degree among its strong points and forthcoming opportunities In several cases, thecompany can recover its weak points to gain interesting opportunities.

In order to develop the strategy base on SWOT analyzation, the companies need

to design a matrix of factors, which is called as SWOT matrix (or TOWS matrix) aspresented below

Figure 1.2.4: Analyze of S.W.O.T

CHAPTER II BUSINESS ENVIRONMENT ANALYSIS

2.1 INTRODUCTION ON ENTERPRISE

2.1.1 Formation and Development process

General Information

 Tel : 0210.3885029 Fax: 0210.3885605

Summary of formation and development process

The Company was formerly Dong Xuan alcohol factory established on 15/09/1965

in Phu Tho, the state economic unit managed Phu Tho Department of Industry

Comply with policy to change the economy, the company equalized to model ofjoint stock company with controlling capital of the State Business registrationcertificate No 1803000486 issued by Department of Planning and Investment of PhuTho province on 22/03/2007

2.1.2 Vision, mission, core values of main business lines of the Company

Vision: Be in tune with and harmony with SABECO vision 2025 shall become

leading drink industrial group of the nation, having position in the region and theglobal; of which Saigon- Dong Xuan Beer Alcohol Joint Stock Company is a member of

SABECO and hopes that trade name of Dong Xuan alcohol shall become a trusted productall over the country bringing cultural character of Viet nation.

Mission: Production of Saigon beer, Heninger beer of German is the only in

Vietnam with high quality, alcohol products have trade name of Dong Xuan alcoholensuring quality and strongly bringing cultural character of Vietnam, all ensure quality,food hygienic safety as legal regulations

Core values: Equipment, Production technologies of products

2.1.3 Organizational structure of the Company

Diagram 2.1.3: Organizational and operating apparatus of DOLICO

Director

Consumption and market development department

Accounting Financial Department

Technol ogical and technica l division

Labor

planningdivision

Board of Control

Board of Directors

Transaction address:

 Head office:

Area 6, Thanh Ba town , Thanh Ba district, Phu Tho province

Tel: 0210.3885029 Fax: 0210.3885605

Saigon- Me Linh beer factory is in Quang Minh town, Me Linh district, HanoiTel: 04.38840392 Fax: 04.38865188

Key business lines:

Key business lines of Saigon- Dong Xuan Beer Alcohol Joint Stock Company are asfollow:

Produce, trade in food alcohol, alcohol of all kinds, beer and carbonated soft drink;Trade in materials, equipment, raw materials, appliances and goods, products servingproduction and consumption;

Charter capital and capital structure

Charter capital: VND 30,000,000,000 (Thirty billion dong)

Rate(%)Saigon Soft drink, Beer Alcohol

a Alcohol is made from dried cassava and additives etc to create 960 alcohol which

is used to make up alcohole for company but the turnover is not considerable

b Beer products include:

+ Saigon beer 333 is made from malt, rice, flavors This product is controlledclosely by SABECO in all the aspects from ingredients, technology, output toconsumption

+Henninger beer: the copyright is bought from the Federal Republic of German

in 1996 It is made from malt, rice and other kinds of flavours etc and is activelyproduced and consumed by the company

2.2 Analysis on effects of business environment as per “PEST” mode

2.2.1 Political and legal factors.

Vietnam politics is now stable and micro-management policies are always paidattention for integrating its economy with the region and the world Vietnam joined theWTO creating an international market with significant effects to strategies ofcompanies specializing in beer – alcohol and beverage in the country

Law on enterprise No 60/2006/QH11 on November 29th, 2005 passed by theNational Assembly of Socialist Republic of Vietnam and came into effect as importantlegal document for stable operation of enterprises, especially private and joint stockcompanies.

Production and business of beer, alcohol industry is particular industryaffecting human behaviors, as a result, it is governed by such legal tools as policies onconsumption tax with very high tax rate (Decree No 40/2008/ND-CP dated April 07th,

2008 2, Commercial law ratified by the National Assembly through Resolution No.36/2005/QH11 dated June 14th, 2005) Regulations on prohibiting alcohol drinking insome sectors; restrictions, advertisement, promotion of products (law on specificconsumption tax No 27/2008/QH12 on November 14th, 2008 by the 12thNational Assembly, fourth session; Decree No 26/2009/ND-CP on March 16th, 2009

by the Government; Circular No 64/2009/TT-BTC on March 27th, 2009) etc

2.2.2 Economic factor

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 deficitspending its economy for sustainable development, but not avoid arising shortcomingsbecause its fledgling economy as integrating the international economy

Unpredictable uncertainties with regard to prices; management policies ofexchange rates and inflation are always evergreen topics leading to difficulties againstmanagement and control of expenses for reduction of product costs

2.2.3 Social and cultural factors:

Vietnam is an Asian country being under the influence of Oriental culture with alot of customs, religious rites from wet rice agriculture which have a profound impact

on culture of alcohol drinking of almost people

There are annually many festivals in Vietnam over the lunar months in almostregions which is chance for consumption of Beer-Alcohol-Beverages

Vietnam population is relatively high, structure of young population that is largemarket for trading in Beer-Alcohol-Beverages

2.2.4 Technological factor:

Currently, technology of beer production in the world seems to reach pinnacle

of quality and meet the needs of man Economic integration creates conditions for most

of big names in the world to appear in Vietnam but SABECO also create its separatebeer of Vietnam, conquered the Vietnamese consumers at first and a number ofcountries in the region and the world

Saigon- Dong Xuan Beer Alcohol Joint Stock Company is proud to be amember of SABECO, absolutely complying with technological process to preservetrade name of Saigon Beer and protect its technological secret

There are currently many alcohol manufacturers in Vietnam from varioustechnologies from large scale to wine brewery with small scale which the State is notable to control

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 ofVietnamese countryside from agricultural products Every worker here has preservedVietnamese cultural characters through their products with long-standing technologies

of wine production and very close to Vietnamese people

2.2.5 Geological factor:

Vietnam is hot and humid tropical climate and a lot of rain, geologic structure isdiversified and complex which is very favorable for raw materials of production, butdifficulties in the preservation of semi-products and finished products Geographic structure is in long range under north - south transport axis facilitatingtransport of consumption distribution of products across the country

Long coastline with many deep-water ports on the international maritimetransport route facilitating transport and consumption of export goods

2.3 Analysis of five competitive forces as per model of Michael Porter

2.3.1 Pressure from suppliers

In respect of instruments and equipment, technology for production, Dong Xuan Beer Alcohol Joint Stock Company is available technologies, supply ismainly alternative equipment, instrument for normal repair that can be purchased onmarket at any time, therefore, influence of suppliers is not significant

Saigon-In respect of supplying special transport services, the company is available suchforces, thus pressure from such supplier is also not much

Raw materials serving production are chiefly agricultural products which areavailable in the area with plentiful supplies, though in accordance with some forecasts,

it seems to happen food crisis in the world impacting on food prices, so influence ofsuch suppliers are insignificant, and in threads of increasing effects

Material supply capacity of the main suppliers of raw materials for beermanufacture of the company for 30 million liters of beer per year is over 50,000 tons ofmalt and 80-10 tons of flowers of all types, in which specific capacity of suppliers ispresently as following

Corporation (importing from many

sources)

16.000.000- 20.000.000 4.000.000

Company Limited (Address: Thanh

Xuan, Hanoi)

Address: Tu Lien, Hanoi

(domestic production in Tien Son,

Thuy Phu Tho

Thuy Phu Tho

Other auxiliary materials are very easy for purchase from domestic supplierssuch as carton packages, nylon bags, adhesive tapes, labels and stamps

No Name of unit Address Supply

Yamamura Company Limited

17A Ngo Quyen, HaiPhong

Glass bottle

recovery bottles from local

people

materials across the area

2.3.2 Pressure from alternative products:

At present, in the market, there are relatively many alternative products ofSaigon- Dong Xuan Beer Alcohol Joint Stock Company In respect of beer, it is Hanoibeer, Halida beer, Tiger beer, etc In respect of wine, there are Hanoi vodka, fermentedvodka, types of vodka originated from Russia, etc and especially there are manyinvestors who bring various types of new soft drinks such as lemon green tee, etc