Building multi sectoral business strategy for ha tinh trading and mineral corporation within the period of 2010 2020 g1 00103 compressed

Building multi sectoral business strategy for ha tinh trading and mineral corporation within the period of 2010 2020 g1 00103 compressed Building multi sectoral business strategy for ha tinh trading and mineral corporation within the period of 2010 2020 g1 00103 compressed

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GRIGGS UNIVERSITY

GLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM

CAPSTONE PROJECT REPORT

BUILDING MULTI-SECTORAL BUSINESS STRATEGY

FOR HA TINH TRADING AND MINERAL CORPORATION WITHIN THE PERIOND OF 2010 - 2020

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Univereity Grigys GRIGGS Global Advanced Master of Business Administration Global Advanced UNIVERSITY Capstone project peport - Group: 11 - Class: GeA{BA O1.V02

By studying the report "Building the multidisciplinary business strategy of HaTinh Minerals and Trading Corporation" by the Group 11 — Gemba V02 class, the Management board of Hatinh Minerals and Trading Corporation commented assessed as follows:

During the time of working in the Corporation we found 04 group members have a serious, enthusiastic working attitude, hard to document research findings Besides the main activities of the group is collecting data and documents in the Corporation, visit review the business process , the group also consulted the leaders, staffs and workers in the operation, the operating procedures and _ corporate

management processes, manufacturing processes of products, marketing, promotion regimes, training policies, human resources and treatment regimes, payment, especially the aspirations and ideas of each individual to build the corporation’s development

This report is based on data and information from other specialized divisions and units belong to the Corporation provided and the documents, policies and related information directly to the Corporation

After studying, reviewing and hearing group's final report, Our corporation find that the team’s assessment and reality analysis are very real and deep The fundamental solution of the Group proposed also really helpful for the development of the Corporation in the next period

Through this, we would like to thank the group who has proposed solutions to develop business strategies for the Corporation We will study to apply these solutions into practice for developing production and business activities of the Corporation increasingly effective We also thank the Training Program International Master of Business Administration from the U.S University of Griggs cooperation with the Technology centers and employment systems - Hanoi National University has been equipped with the knowledge to students, contribute the Corporation offers solutions that are practical and useful /

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TABLE OF CONTENT

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Chater 1: THEORY BASIS FOR STRATEGIC CONSTRUCTION +

1.1 Basic definition of business sfrafeøy HH re 4

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120,3„.1590EHEEPSVETIDUHNITHIHXF ND oeeseenserereennnoeeoosoenninoOittgktoSnofieginothiexiDG00600131003 56 +

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1.3 Method for business strafteøy consfruction in enferpFise 5

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1.3.3 Analysis of internal environment of enferprise - - 7

1.3.4 Analysis of trading sectors of enterprise (portfolio) - 8

Chapter 2: COMMON INTRODUCTION AND ANALYSIS OF

BUSINESS ENVIRONEMNT OF HA TINH MITRACO 13

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Build up multisectoral business strategy of Mitraco for the period of 2010 - 2020

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lá Guáo KHHEÊFHTOÍSESN:NGNEE:uosccocistoitotoiEtogs0s0001600010165:060566380058602.2GBXEGG8S 8s 13 pia vik: PAU ONS Es nscnvrvsonssnanessnswasianesesnniescanussinsatessveseuesiseesttsigeessaesddeumueleemeiiiils 13 acta, AU Paleeceecenrrnenceme-osianses tuN800nEAE01:0000000000001107002800530000nn39908100001030001402030100012001109710000- 13 2.1.4 | ee 13 2.1.5 Trading Sectors: .cccccccccceseessseesecesseceseeeeseceseeccseceesscessecscensceaseneeass 13 2.1.6 Organizational diagram: .cccccsceseeesceesceesccessesscesecenscssseseeseenens 14 2.2 Analysis of external business environment of Mitraco 15 2.2.1 Analysis of macr0 enVÏr0IIN€HÍ: .- 5555 51533211 s2 15 Š.2,1;1,.E/Eðfi0ffi1G 6ïIVIFðHTNEHE cuc 2c G gái 16026611165450668.04603866SG4018888218e 15 2.2.1.2 Legal and political environmienf: ‹- 15 2.21.3 Technological oniViFDIMHEE is cccssscsoasciáicaaie06161046656410835.68 15 2.2.1.4 Cultural and social environment : .- -‹55 5< <<<<<<sc°+ 16 22.1.8 Netra) Savi ONO sa cccsicsssxssscescescessusenss viene tawaavaveuvoasanvansacnige 16

2 dvks: AMBLYSIS OF SECLOT CNVITONIIONEG csicsessscesssonsizesssoceavevrndesecessverscenenansss 16 2.2.2.1 Pressure Írom €USÍOINI€FS: - n1 111 3S cư l6 2.2.2.2 Pressure from pFOVÏ€FS: - QQ Q SH no Ly 2.2.2.3 Currenf compefifive 0pponenfs : Ă S2 17 2.2.2.4 Potenfial competifive 0pponenfS : - ĂẶSSSccssscss2 20 2:5: REÙHECG BE 00G lang 2Q g2 asklll4ássasfsslasessa-gsses 20 2.3 Analysis of internal environment of Mitraco - c5 c2 c2 22 25.1: ARGIVSIS 0Ề FEROHT CC taaddœaqdGiadaoaibaggissstaaoliosaded@bissusosas

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213 Technical MIP Aste etre’ caiissccscssscscesicvssvensscewerensvgncsssevessosayeoceieusns 31 2.3.1.4 Technology, machine and equipmenfS: 555552 32 2.3.2 Supplentented SINH VN co cccccnniennnaang nh gg414402100142101460014564)442148420 14455 32 2.3.2.1 Management and administration in Mitraco: 32 Pedder AUER NEYUEEUTFE xu eneendruoeneesidrieitieinieiaensioktOI0/60930012/660160290016401/00638 33

mu ii TRHNRHLNEEIE HỆ, SHHIPHCH-sverneeeeoeroeoboablueraiiooesnuEnip21E01000106064380480003050 34

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Global Advanced Master of Business Administration G Global Advanced

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LIST OF ABBREVIATIONS

DTDH Long term investment

DTNH Short term investment

EBIT Pre-tax interest and lending interest

EFE External factors evaluation

IFE Internal factors evaluation

Iz Matrix for internal — external factors evaluation

MGR Market growth rate

Mitraco Ha Tinh mineral and trading corporation

NH Short term

NNH Short term debt

NVNH Short term capital

NVTX Constant capital

RMS Relative market share

SBU Business unit

SWOT Strengths (S), weaknesses (W), opportunities (O), threatens (1) SWOT matrix is the most typical model in building business

- vil-

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KHONG Capstone project report - Group: 1] - Class: GEMBA 01.02 ee

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GRIGG Global Advanced Master of Business Administration G Global Advanced

Table : 2.01 | Table of opportunities (O) and threatens (T) 20

Fhe BC Table to compare some index of labor productivity of 33

Mitraco in 2008

Table: 2.04 | Balance sheet on 31/12 of every year 23

Table: 2.06 | Table of strengths (S), weaknesses (W) 40

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PREFACE:

1 The need of topic study

Vietnamese economy is operating according to market economy under State’s management and global economic integration; to exist and develop, each enterprise must have suitable strategy with integration and common development of the market; Enterprise without business strategy will be like a boat without boatman and if the strategy is not suitable or not well implemented then enterprise cannot reach success In other words, the destiny of enterprise will depend much on administration, strategy construction and strategy implementation

Ha Tinh trading and mineral Corporation (Mitraco) is a strong State-owned

enterprise which has reached many achievements in recent years; However,

operational background of Mitraco has got many changes which creates high pressure to force Mitraco to build up general strategy for itself; High pressure for Mitraco including:

Firstly: core traditional trading sectors of Mitraco (mineral exploiting, especially Ilmenite) at traditional area (Ha Tinh) has coped with limited development due to exhausted reserves This can make business effect of Mitraco reduced in the coming times; If there is no timely adjustment, then Mitraco can get

financial difficulties in the future

Secondly: Development of market economy and global economic integration

as well as innovation trend of State-owner enterprise have created high pressure for

Mitraco

Thirdly: Strong development trend of Vietnamese economy in general and

HA Tinh in particular, especially in associated international relation with Laos and other partners have created opportunities and threatens for enterprises within Ha Tinh province including Mitraco — the currently biggest enterprise within Ha Tinh province

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In such background, Mitraco cannot just focus on tactics solution but focus

on building, implementing and monitoring long term strategy to maintain growth rate, make use of advantages and core capacity which are suitable to economic and legal environment and support Mitraco in making investment decision; Therefore, Mitraco must build up and implement general strategy from 2010 to 2020, to maintain position and basis for development in the coming periods

2 Study purposes

Study purpose of the topic is to build up general strategy of Mitraco to anser the question: (1) Which sector should Mitraco join in? (11) And how to make brain agency of Mitraco manage business activities of member units in the most effective way?

3 Study object and scope

Assess business activities of enterprise: define business activities that enterprise will maintain, newly establish or remove; define and assess strategic choice and necessary methods to maintain or expand business activities

4 Study methos

In study process, we have use main study methods in economic study such as method of analysis and synthesis, method of statistics and comparison; analysis of macro environment, sector environment and reality of enterprise; Then we build up SWOT matrix, IE matrix, BCG matrix combine theory and reality to make up strategy of Mitraco

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UNIVERSITY Capstone project report - Group: 11 - Class: GEMBA 01.V02

The assignment is divided into three chapters:

ChapterI: Theory basis for strategic construction

Chapter II: common introduction and analysis of business environment of Ha

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Chater 1: THEORY BASIS FOR STRATEGIC CONSTRUCTION

1.1 Basic definition of business strategy

Strategy is understood as compound action to exploit and mobilize resources

in an enterprise to reach a defined purpose; There are many different definitions of business strategy but the most common definition currently is: Strategy is: “a series

of complex actions to mobilize all resources of an organization to reach a defined purpose” [6, page.1]

Chamdler considered strategy as including stability of long term targets of enterprise, choice of methods or action process as well as allocation of necessary resources to implement such targets [4, page.2]

Alain Threlart supposed that “Business strategy is an art that enterprise uses

to cope with competition and win” [4, page.2] Business strategy can help enterprises to realize targets and orientation to promote and make use of all resources, opportunities to have the best competitiveness with other enterprises at the same time have methods and large vision for enterprises to overcome threatens

on competitive market then help enterprises to exist and develop

1.2 Strategic system of enterprise

With regard to each enterprise, there are many strategies which are suitable

to each type, period and different targets, including:

1.2.1 Strategy in company level

1.2.1.1 Growth strategy:

= Strategy of focused growth

- Strategy of market penetration

- Strategy of market share development

- Strategy of product development

= @z

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« Growth strategy by integration:

1.3 Method for business strategy construction in enterprise

Based on above theory, in current economy and future trend, the topic will analyze internal environment of enterprise in sector environment, acro environment with SWOT analysis, analysis of competitive capacity, portfolios

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Model of macro environment

Technological environment economic environment

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UNIVERSITY Capstone project report - Group: 11 - Class: GEMBA 01.V02 ia

1.3.3 Analysis of internal environment of enterprise

As we have known, within enterprise, there are many factors that can impact

on activities of enterprise; then we can go on analysis of enterprise’ resource

including: human resource, finance, technical infrastructure, technology and

machine, equipments; indicate strengths and weaknesses of enterprises, then have solutions to promote strengths, limit and adjust weaknesses

on

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¥ SWOT matrix

To build up SWOT matrix we must implement the following eight steps:

Step 1: list main opportunities from external environment ( O1, O2 )

Step 2: list main threatens from external environment ( T1, T2 )

Step 3: list main strengths of enterprise ($1, 82

Step 4: List main weaknesses of enterprise ( W1, W2 )

Step 5: combine strengths with opportunities to form strategies ( SO)

Build up multisectoral business strategy of Mitraco for the period of 2010 ~ 2020

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« Step 6: combine weaknesses with opportunities to form strategies ( WO)

« Step 7: combine strengths with threatens to form strategies ( ST)

» Step 8: combine weaknesses with threatens to form strategies ( WT)

da

- Minimize threatens and avoid threatens

Y JE matrix:

Source: [4, page 9]

Put different business units/sectors of an enterprise into a table of 9 squares

This matrix will be based on two main aspects:

- g-

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FSS point SP: on horizontal axis

- If total point is from 1.0 — 1.99 then it is internal factor

- If total point is from 2.0 — 2.99 it is mean

- If total point is from 3.0 — 4.0 it is strong

* Total point of EFE on horizontal axis

- If total point is from 1.0 — 1.99 then capacity to cope with external

environment of enterprise is low

- If total point is from 2.0 — 2.99 | then capacity to cope with external

environment is on mean level

- If total point is from 3.0 — 4 then capacity to cope with external

environment is high

IE matrix Internal factors evaluation (IFE) of sectors

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- If business unit/sector 1s located in squares i, II, 1V: 1t must be developed

and constructed

- If business unit/sector is located in squares iii,v,vii: it must be maintained

If business unit/sector is located in squares vi, viii, 1X: it must be harvested

and removed

Y BCG matrix:

This matrix is given by the leading administration consultancy company of the

US (Boston) to help bog companies to assess activities of strategic business units Then it will help administrators to allocate capital to SBUs and assess financial situation of the company This matrix is a table of 4 squares:

* Horizontal axis: relative market share of SBU is defined by the rate between revenue of SBU with revenue of leading opponent or the secondly ranked

opponent

- If SBU does not have leading revenue then relative market share of SBU will be equal the rate between revenue of SBU with revenue of leading opponent within the sector

- If SBU has leading revenue then relative market share of SBU will be equal the rate between revenue of SBU with revenue of the secondly ranked opponent

= Vertical axis: indicates annual growth of market of products that SBU trading by percentage; if SBU has percentage higher than 10%, it will be considered as high level

- đa

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GNIVEREITY Capstone project report -Group: 11 - Class: GEMBA 01 V02 PẾNG

such SBUs to increase market share

- SBUs located in star square often have leading market share in the sector with high growth rate, but must cope with violent competition then company must invest much capital; according to time, if such SBUs can keep high market share then such sector will go on stability with reduced growth rate, SBUs will transfer to milk cow square

- SBUs located in milk cow square is the financial source of the company; then

if SBUs cannot keep the first position then they will transfer to dog square

- SBUs located in dog square have less capacity to bring profit to company then company should consider whether to get or remove such SBUs

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Chapter 2 MMON INTRODUCTION AND ANALYSIS OF BUSINESS ENVIRONEMNT OF HA TINH MITRACO

2.1 Common introduction:

2.1.1 Enterprise’s name:

2.1.1.1 Funll name: HATINH MINERALS AND TRADING CORPORATION

2.1.1.2 Abbreviated name: MITRACO

2.1.2 Address: 02 —Vu Quang street—Ha Tinh city— Ha Tinh province

2.1.3 Tel: 039.3855603; Fax: 039.3855606

2.1.4 Website: http://www.mitraco.com.vn

2.1.5 Trading sectors: Ha Tinh Mitraco is the State-owned enterprise directly under Ha Tinh Provincial People’s Committee established according to Decision No 61/2003/QD-TTg of Prime Minister The corporation is operating and trading according to model of parent company — subsidiaries on many sectors including:

- Exploit and process minerals

- Trading supermarkets, hotels, restaurants, tourism, informatics technology, transportation service, labor export

- Produce and trading construction materials

- Exploit and trading hydroelectric

- Raising and processing raising foods

- Repair machines and equipments

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2.1.6 Organizational diagram:

Administration council

and labor office [4 Ñ mineral — stock

enterprise

ine office Lg Thach Anh —*> material JSC :

ị - mineral company

Technical office Ligh Thach Khe

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PA Analysis df external business environment of Mitraco

2.2.1 Analysis of macro environment:

2.2.1.1 Economic environment:

Ha Tinh Mitraco is trading in common economic environment which is

developing; trading products of Mitraco are mainly exploiting and processing

minerals; consumption market including both domestic and foreign market then it

can get much troubles; but it also has many advantages: our nation is in the first

period of market economy which in on growth rate then there are many products to

be used; especially Ha Tinh is implementing many big projects such as: Thach Khe

iron mine exploiting; Formosa project; Vung Ang economic zone; This is the

Opportunity for Mitraco to diversify sectors and expand production; common

assessment: Vietnamese economic environment in general and Ha Tinh province in

particular is the opportunity for Mitraco but also opportunity for other enterprises

2.2.1.2 Legal and political environment:

Trading sectord of Mitraco are adjusted by law including corporate law,

labor law, environmental law, land law, investment law besides, Mitraco also

implements some regulations according to sector; in general, Viet Nam is assesses

to have stable social political environment compared to other nations in the area;

After giving many policies for innovation, Viet Nam has reached stable growth rate

of GDP Political and economic of macro economy is maintained: Viet Nam is

assessed to be a safe place for investment; besides, currently Ha Tinh province also

has some big policies to create good condition for development of Mitraco, such as

policy of issuing mine, supporting investment This is really an opportunity for

Mitraco

2.2.1.3 Technological environment:

Sector of mineral exploiting and processing in Viet Nam is in lower level

than the world with low technology; then Mitraco get much difficulties, especially

s FFs

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technology to process deeply minerals Meanwhile minerals are non-recycled resources then deep processing, effective using, exploiting mineral are very important for the development of Mitraco and the nation This is also a threaten that requires Mitraco to transfer quickly advanced technology in the world to raise capacity of deep processing, raise capacity and business effect and meet the policy

of the Party and the State

2.2.1.4 Cultural and social environment :

Mitraco is trading within Ha Tinh province which is an area of fondness of learning tradition, hard working and couraged in revolution; high self-respecting,

sacrificed for common development of society, long term culture and healthy

traditions and custom This will be an advantage for business development of

enterprise; However, economic innovation thought is limited due to undeveloped economy

2.2.1.5 Natural environemnt:

With trading sectors of Mitraco we must consider processing environment according to right requirements to reduce environmental pollution; on the other

hand, Mitraco is located in Northern Central area with unfavorable climate, high

rainy quantity, influence of Laos wind then it will be not good for exploiting minerals as well as other trading sectors This is threatens for Mitraco

2.2.2 Analysis of sector environment:

2.2.2.1 Pressure from customers:

Products of Mitraco are mainly consumed in international markets then it must follow international standards of techniques as well as price and other trading conditions; However, Mitraco has advantage in which there are many traditional

customers who have attached to Mitraco in recent years and Mitraco also has prestige with domestic and foreign customers then it will get sharing of difficulties with each other

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In term of materials of mineral processing, Mitraco is —self-exploiting but

content is lower and reserves are exhausted then the lack of materials can happen;

Then it requires Mitraco to quickly exploit in nearby provinces and have policy to buy materials of domectic and foreign units for providing materials or deep processing of minerals; This is a great threaten for Mitraco, which needs a concrete route to implement

Besides, fuels and power also increase price which forces the unit to accept then it is a high pressure for business effect of enterprise

2.2.2.3 Current competitive opponents :

a, Minerals: there are many domestic and foreign units of exploiting and processing minerals such as: Quang Tri, Thira Thién - Hué, Quang Nam, Quang

Ngai, Binh Dinh

- Ilmenite: nationwide, there are about 30 companies that officially have

exploiting mine and trading products of Ilmenite Most of such companies are private companies or joint stock companies; to assess opponents of Mitraco, we will consider norms of technology — machine, equipments, exploiting quantity,

consumption, revenue; according to such norms, there are only three units with

competitiveness with Mitraco including: Quang Tri Mineral company; Hue Mineral one member Ltd Company and Binh Dinh mineral JSC; currently, in term of Ilmenite exploiting, Miltrraco is the enterprise with highest competitiveness

- Zircon: Currently, nationwide, there are 7 units of producing Zircon, but

we can assess that Mitraco is the unit with the modernist machine and equipment which is the only unit to have Zircon products of 5 micro met max meeting demand

of Ceramic sector, and hygiene porcelain in Viét nam With regard to this product, within the nation Mitraco has no competitive opponents; with regard to foreign

a T's

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UNIVERSITY Capstone project report - Group: 11 - Class: GEMBA 01 \ 02

companies, Mitraco can strongly compete in price due to high import price of other

units

Other Zircon products (45 micro met max and 75 micro met max) are exported to China, India and Japan; three strong competitive opponents of Mitraco

nationwide are: Hue Mineral one member Ltd company; Binh Dinh mineral JSC;

Hai Tinh Joint Venture company But Mitraco is still in leading position due to stable products quality

Common assessment of mineral sector of Mitraco, in term of

competitiveness, then Mitraco has higher competitiveness than other units; on the other hand, demand of market on such products is high which is favorable for Mitraco

b, Construction materials:

- Plaster: currently, in Viet Nam apart from Mitraco, there are only 2 units producing and trading plaster which are Hue Plaster and Cement JSC and Military zone 4 Mineral development company Currently in term of market share then Hue

Plaster and Cement JSC ranks the first, Mitraco ranks the second, but in term of

reserves, Mitraco has higher reserves and Mitraco has dominant qualification, experiences, machines and equipments

- High quality Tuynel brick and tile: within Ha Tinh province there are 11 units of producing tuynel brick and Tile with industrial scale but there are only 3 opponents which are joining in the same market as Mitraco which are: Ky Giang

Brick enterprise, Cau Ho Brick and Tile JSC, Thach Vinh Brick enterprise; such

units have no tile products; In term of scale, technology and equipments of the

factory, Mitraco ranks the first of Central area In term of market demand, in the

future demand of Ha Tinh market will be still high; competitiveness of product quality of tuynel brick and tile, Mitraco ranks the first compare to other units within the area of Nghe An, ha Tinh and Quang Binh; however in current period competitiveness of price of Mitraco is lower because the factory has just come in

a Jabs

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which are: Lac An JSC, Western JSC, Central Cosevco JSC In term of

competitiveness, Mitraco ranks the first

c, Seaport exploitation: Vung Ang port of Mitraco has private advantage which is the unique port in Northern Central receiving vessels of 45.000 tons

Products via port for providing Vung Ang economic zone, exporting to Laos and Northern east of Thailand are very plentiful

d, Agriculture:

- Super-meaty pigs: according to Ha Tinh statistical agency, within Ha Tinh province there are about 25 centres for raising according to industrial model;

however with current scale of thousands of sow in Mitraco, we can say that super-

meaty pig products of Mitraco will have no opponents within Ha Tinh province

However, nationwide, Mitraco cannot compare with big raising centres in Thanh

Hóa, Thái Bình, Đồng Nai, within the market then market share of meaty pig

Mitraco is very low

- raising food: in term of competitiveness of raising food, Mitraco has lower

competitiveness than othes units in Viet Nam due to unstable product quality;

Competitiveness of price of raising food of Mitraco is low because Ha Tinh is not

material area for producing raising food which has low labor productivity and low

technical qualification

e Service and trading: current competive opponents in the same market as

Mitraco is stronger; activities of service and trading of Mitraco has small scale,

unfocused, weak competitiveness, inconsiderable market share

X.

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University Griggs

Griccd Global Advanced Master of Business Administration

G Global Advanced

Program

2.2.2.4 Potential competitive opponents :

Currently there are some unit investing in processing minerals such as Binh Dinh minerals JSC .and some private companies invest in Central area which requires Mitraco to invest in improving technology and consolidating organization

of production to lower price to compete better within the market

province and nearby provinces have

created many choices for new trading

sectors

.Ha Tinh has many preferential

treatments for investment attraction

Ha tinh also has big policy of

training human resource to meet the

demand of enterprises investing in

Ha Tinh and policy to attract high

Competition

which is mineral trading has come to critical point will have less capacity for development in long term due to exhausted reserve of mines that

Mitraco have been issued

among private enterprises, Central State-owned companies or companies from nearby provinces is more and more violent

¿ 3Ø:

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DPD 1-Co+rrrpressor-E

JIU + Fee vers St

quality human resource Sng

enterprises which attract talented

people will enjoy _ preferential

treatments

HA Tinh has private policy and

regulation to provide mineral mines,

mines for

construction materials, metal

procesisng for Mitraco as well as

support Mitraco to expand trading

sector to be the main enterprise of the

province to attract investment

Requirements of enterprise

innovation on forcing State-owned

enterprises to operate according to

corporate law, and new management

model will create an opportunity for

Mitraco to adjust operational model

and new management methods

.Ha Tinh people has revolutional

tradition, high awareness of national

and provincial common development

then they are ready to support

policies of the Party and the State

which creates good condition for

enterprises to invest and develop

Legal

in many sectors (from mineral,

construction materials, infrasrcuture,

services )

regulations of mineral management has created new burdens for Mitraco which can create pressure in investment in deep processing of mineral

Technological qualification of deep processing of Viet Nam is low then it can create much difficulties for Mitraco

.In the future there will be some

corporations to come to Ha Tinh to

invest in the same sector Mitraco

Rigid climate condition can create

much troubles for Méitraco in

business and production process Available labor force; but tradining workers is limited because they are famers Especially in area that Mitraco invests, labor force has low qualification then training and using labors can get much difficulties

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2.3 Analysis of internal environment of Mitraco

2.3.1 Analysis of resources

2.3.1.1 Human resources

Currently, Mitraco had 2.670 labors Average income per capita is about 2.1 million dong/person/month Density of popular labor occupies 58%, and labor has rather high age Density of cadres with college qualification upwards is 18%, which

is not so low; however, this number cannot reflect the essence of management

qualification of the whole corporation; out of 18% cadres with college qualification upwards, only 1/3 are in official training; the remaining is on the job training and distance learning

Number of people really have high qualification and professional technique

is low; Mitraco is bearing violent competition of human resource, especially in the background of more and more domestic and foreign investors investing in HA Tinh

as well as attracting cadres with high management skills from companies to work

Current operational mechanism of Mitraco cannot promote the contribution

of qualified cadres, especially cadres in medium level for implementing plans of company Mitraco has not formed a mechanism to create motivation for cadres to improve and raise capacity, active in working and improving business activities of corporation; management activities still bear steering quality downwards which cannot create gap for cadres to make economic decision and bear responsibility for

such decisions

Mitraco also lacks of a plan for human resource training in long term to attract qualified labors It has not built up regulations for recruitments, training, using labors which can stimulate creation, learning spirit and long term attachment

to company

= aos

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University Griggs Global Advanced Master of Business Administration Capstone project report - Group: 11 - Class: GEMBA 01.V02

Labor productivity of Mitraco reaches low level compared to average level

of other State-owned enterprises, average level of private sector and foreign enterprises

Table to compare some norms of labor productivity in Mitraco in 2008

Total labors (people ) 2.670

Average income per labor

FDI they are 522 million dong and 56,6 million dong Then in term of business

effect, mean labor productivity of each cadre of Mitraco is lower than other enterprise in the same economic area and lower than enterprises in FDI area

„#8.

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University Griggs Global Advanced Master of Business Administration

2.3.1.2 Finance :

¢ Brief report and financial norms of Mitraco in 2007, 2008 va 2009

Report on business results within 03 years

provision

6 Revenue from

21 29,523,588,772 7,391,168,594 3,730,946,772 financing

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University Griggs Global Advanced Master of Business Administration Capstone project report - Group: 11 - Class: GEMBA 01] V02

15 cost for CIT 5] 8,917,250,919 | 6,842,143,511 5,467,950,862

16 post-tax

60 37,757,371,710 | 43,313,367,684 | 30,861,607,307

(Source: financial reports in 2007, 2008 and 2009 of Mitraco provided by financial

accounting offi ce) Balance sheet on 31/12 every year

I cash and

110 30,538,847,902 | 30,184,412,848 | 29,186,217,775 equivalent items

II Short term

120 74,430,350,928 | 50,024,219,250 1,900,000,000 financial

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University Griggs Global Advanced Master of Business Administration

IV Inventory 140 176,450,921,059 | 134,384,157,565 | 126,397,455,982

V Other short

150 27,104,504,575 | 23,908,073,657 | 16,841,655,739 term assets

B LONG

200 | 447,240,139,667 | 350,434,624,555 | 338,531,827,512 TERM ASSET

V Other long

260 19,371,220,198 | 15,122,858,115 | 10,520,683,931 term assets

TOTAL ASSET 270 | 963,645,117,579 | 730,198,720,866 | 614,800,648,826

A PAYABLE

300 | 384,384,998,168 | 273,318,378,317 | 238,020,910,503 DEBT

I Short term

310 | 293,442,780,062 | 214,237,015,151 | 178,523,755,619 debt

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UNIVERSITY Capstone project report - Group: 11 - Class: GEMBA 01.V02 iil

Il Long term debt | 330 90,942,218,106 | 59,081,363,166 | 59,497,154,884

B OWNER

400 | 579,260,119,411 | 456,880,342,549 | 376,779,738,323 CAPITAL

structure

and long term

revenue Ratio of asset

structure and Fixed asset and long

(constant capital = revenue/constant

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University Griggs Global Advanced Master of Business Administration Capstone project report - Group: 11 - Class: GEMBA 01 V02 1G Global Advanced

PDkL-Compresser Eree Version

Mobile asset and Ratio of mobile

short term

revenue/short term term capital

PAYMENT CAPACITY

Current index

Mobile asset/total

short term debt capacity)

(quick payment times | inventory/total short 1.16 115 0.84

Short term index

Cash capital/ total

short term debt payment capacity)

ASSET MANAGEMENT CAPACITY Inventory circle times | Revenue/inventory 3.99 5.75 4.81

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Global Advanced Master of Business Administration Capstone project report - Group: 1] - Class: GEMBA 01.V02

Total asset circle | TOUNdS | Revenue/total asset 0.73 1.06 0.99 |

LOAN MANAGEMENT CAPACITY

Interest payment Times

EBIT/interest 35.64 capacity

General payment | Times | Total asset/payable

PROFITABILITY

on revenue ROS) shareholders/revenue

Net interest of popular

shareholders/total asset

Net interest of popular

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UNIVERSITY Capstone project report - Group: 11 - Class: GeMBA 01.\ 02 3

¢ Comment:

- From table 2.03 and 2.04 we can see that: compared to the year 2007,

owner capital in 2009 has increased 1,4 times Total asset also increases from 615

billion in 2007 to 963 billion in 2009 All of this index can show the rather high growth of scale of Mitraco in recent time However, the scale growth cannot improve effect of business activities and investment; post-tax profit has not increased highly; This means Mitraco has done more but got lower profit; this is an attentive point in the coming time

- From table 2.03 we can see that: In 2009, sales reached only 91,1% and

profit after tax reached 87,2% compared with 2008 The main cause is, in the first 6

months of the year 2009, the government prohibited the export of ilmenite raw ore, since July 2009 the government permitted again some units to export ilmenite raw ore including Mitraco, therefore the revenue in 2009 is lower than in 2008 In 2009, because of still being affected by the world economic crisis, therefore the price of ilmennite reduced, although Mitraco saved on selling expenses and administrative costs but the reducing of ilmenite content in licensed mines led to the increasing of exploiting costs (especially diesel oil and electricity costs), led to the rate of profit

after tax on sales in 2009 is lower than in 2008

- From table 2.05 we can see that: ROE (profit ration on owner capital) is low which proves the low business effect of Mitraco Similarly, ROA (profit ration

on total asset) is also low which indicates low capacity to create profit; in the years

of , 2007, 2008 and 2009, 100 dong asset can create 4 to 6 dong profit In some companies, especially in the sector of raising cattle and Thién Y JSC, ROA just

reaches 0,2% and 0,6% This is a really low level

According to data of financial report then two companies have highest investment of Mitraco which are Viet Nam — Laos Ltd.Company and Mangan mineral JSC; the most common point between two companies is that they operate in

core trading sector of Mitraco (minerals) and management as well as administration

-

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30-University Griggs

F Compressor Free Version ,

qualiieniion dt company are also higher than common level of the whole corporation

Current and quick payment capacity of Mitraco are good, however short term payment capacity is not high

Rate of financial leverage of Mitraco is very low, Mitraco should borrow loans from the banks to invest in projects to bring higher profit However, it must

also be careful in this orientation; if looking at all current portfolios of Mitraco and

profit of subsidiaries of Mitraco, just few companies can bring higher profit than banking interest; decision to increase lending capital from the bank to expand investment and production must be based on effect of invested projects; This is one

of principles in strategic investment, expanding portfolios of Mitraco; Using financial leverage carefully, especially ensure effect of invested capital; use ineffectively and wrongly financial leverages is one of main reasons leading to scattered investment of many economic corporations currently

Common assessment: current financial situation of Mitraco is still balanced and safe

2.3.1.3 Technical infrastructure:

Main products of Mitraco (mineral and construction materials) are mainly produced by machine; production line is closed from input materials to output products

With the distinction of enterprise to exploit, process minerals including Ilmenite, Rutile, Zircon and Zircon then arrangement of ground, production workshop is suitable with convenient operation; large ground, ventilation and lighting system can be ensured according to regulation, especially system of vacuum cleaner; common assessment: Mitraco has rather good technical

infrastructure; this is the strength of Mitraco

i: BP

Tiêu đề	Building multi-sectoral business strategy for Ha Tinh Trading and Mineral Corporation within the period of 2010-2020
Trường học	Griggs University
Chuyên ngành	Business Administration
Thể loại	Capstone project report
Năm xuất bản	2010
Thành phố	Ha Tinh

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Số trang	91
Dung lượng	15,02 MB