CAPSTONE REPORT BULDING STRATEGIES FOR HUU HUNG VIGLACERA JOINT STOCK COMPANY TO YEAR 2015, VISION TO 2020 BÁO CÁO CAPSTONE XÂY DỰNG CHIẾN LƯỢC CÔNG TY CỔ PHẦN HỮU HƯNG VIGLACERA ĐẾN NĂM 2015, TẦM NHÌN ĐẾN NĂM 2020

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CAPSTONE REPORT FULDING STRATEGIES FOR HUU HUNG VIGLACERA JOINT

STOCK COMPANY TO YEAR 2015, VISION TO 2020

Group 6 Tran Xuan Hoa ( C) Dau Minh Thanh Nguyen Huu Chinh

Le Van Thu

Hanoi 26" August 2009

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CHAPTER 3: ANALYZING ON CURRENT SITUATION OF HUU HUNG

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Building Business strategies for Huu Hung Viglacera JSC Group 6

3.4 INTERNAL ANALYSIS OF HUU HUNG VIGLACERA JOINT STOCK COMPANY 43

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REFRENCE

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CHAPTER 1: INTRODUCTION

1.1 Reason for choosing topic

In recent years, along with the strong development of competitive market, more and more state owned enterprises have been equitized These enterprises gradually

gained the market share and affirm their positions in the fields of business

Viglacera Huu Hung Joint Stock Company is a company operating business in the field of producing and trading construction materials in a competitive market with strong competition from many other companies

A successful enterprise must have good direction and flexible changes which is well-matched with the business environment To this end, they have to build suitable business strategies towards sustainable development of the company in a competitive market A good business strategy will help that company to leap at the chance, make the best use of its advantages to mitigate the risks from doing business

As for a company with limited financial capacity and narrow business fields,

building business strategies is of importance especially in a severe competitive

market

However, due to different reasons, this problem is not given attention One of the main reasons is the fact that this company used to be a member company of Viglacera Corporation Most of production plan is assigned by the Corporation

Therefore, marketing research works are not taken care Business strategies are

simply implementing quarterly and annual business strategies; other middle and long term plans are simple and unscientific Another reason is the lack of

understanding about theories and skills of applying theories into actual conditions Also, there is no evaluation of impacts from internal and external factors, evaluation

of potentials, strengths and weaknesses of the company and the opportunities and

challenges of the market.

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From the actual demand and desire to apply what we have studied in a company whesiyq0{nIfeSE01PETeesiönworking we have chosen Research topic

“Building business strategies for Huu HungViglacera Joint Stock Company to

2015 and vision to 2020”

1.2 Research objectives

- Basing on theories to apply into the actual conditions of the company to increase the business effectivenees, lower the cost and bring more profits for comany and benefits for the whole society

- To apply system of theories and models to analyze and evaluate the internal and external enviroment fo build business strategies for Huu Hung Viglacera Joint Stock Company To analyze theories on building and implementing business strategies and selecting effective models to implement business strategies

- To give recommendations for the company to immlemtn is selected business strategies

1.3 Research scope

Due to limited time and resources, our group will focus on analyzing and building business strategies in the field of “* Production and trading of construction materials from baked clay” - acore business of Huu Hung Viglacera Joint Stock Company

1.4 Research methods

1- To solve the above problems, this reseach mainly use quanlitative reasearch method

( case study)

2- Methods of collecting secondary statistics: Reports and research of Viglacera

Corporation and Huu Hung Viglacera Joint Stock Company as well as information

about business strategies for Vietnam construction materials industry and financial reports of its members

1.5 Research structure

This report is composed of 4 chapters

Chapter 1: Introduction ( as stated above)

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Chapter 2: Theories

- S0IPqyeord$p Bed$ ðSIéẽ WW@ftSEdgỹ such as definitions, natre and features of

business strategies

- Some models of analyzing external business environment in building business

strategies : 6 external factors and 5 competitors

- Some models to analyze internal factors of the company in building business strategies : value chain, sustaiable competitive advantages and SWOT model

Chapter 3: Analysis on current situation of Huu Hung Viglacera Joint Stock Company

To give brief introduction about the company, business strategies to 2015, vision to

2020 To analyze 6 external factors and 5 forces affecting the companies nad construction materials industry To apply value chain model and sustainable

competitive advantages to analyze internal factors of the company To apply SWOT

model to evaluate the strengths and weaknesses, opportunities and weaknesses of the company

Chapter 4 — Recommendations and Conclusion

Some solutions to successfully implement selected business strategies Some

remaining problems and solutions to solve those problems

Conlusion, list of reference and appendix

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CHAPTER 2: BACKGROUND THEORIES

2.1 Theories on business strategies for enterprises

2.1.1 Some definition of “Strategy”

Nowadays, the concept of strategy has been widely and popularly used and it has

been considered as an important foundation for company’s activities There have

been a variety of ways to define strategy:

- Strategy is the art of building competitive advantages to defense (M Porter)

Strategy is the model concluding options, missions and plans built to achieve these objectives (Kenneth, 1965)

Strategy is defining ways and means to achieve set targets througn policies ( G Aileret)

“Strategy is a red thread lining through all of organization’s activities (Ansoff, 1965)

According to Kenneth Andrews with the definition ‘Strategy is the plan for

controlling and utilizing the organization's resources like human, assets, finance with the aim to ensure and increase its own essential benefits” Strategy is all what an organization need to do basing on its own strengths and weaknesses in a situation of having both opportunities and threats

To apply definitions of strategies into operation of domestic enterpriseas, strategies can be simply understood as follows:

+ Business strategy is collection of long term goals and policies as well as

solutions in terms of doing business, finance, people to boost operation of

enterprises to a higher form both in terms of quantiy and quality

+ Business strategy actually is one of the means so that enterprise can achieve long term goal and is plan to monitor activities of the enterpries in following years

An enterprises which knows how to make the best use of resources to give

aopproriate decision will surely succeed during competition and achieve long term goals in doing business This is a common goal that all enterprises want to

achiedve

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2.4.2 Nature of business strategies

BRAK Camp resno thE Hee Oe H84AMof company Therefore building a business

strategy is a crucial task for the development of each company

v Business strategies are long term plan, mostly 3 years, 5 years, 10 years or more depending on each industry

Business strategy is a creative activity in management Basing on the set objectives to arrange and create a new effective and highly competitive

management system

Enterprises themselve have to make the best use of resources both tangible and intangible , both in the past and in the future to leap at the chance and gain advantages in competition

Building business strategies must be originated from actual conditiosn of each company If business strategies are in line with human resources, these Strategies will be more likely to be successful

Business strategy is the action plan of company, building a business strategy

is a crucial task but implementing it is considered to be more essential As a

matter of fact, in Vietnam implementing the business strategy is quite easy

for many enterprises, but implementing, supervising and evaluating

Strategies is forgotten or inadequately implemented If there is a strategy but this strategy is not implemented, it will become worthless To implementing the business strategy, all members of the company must know and clearly understand it, it then must be broken down to detail feasible objectives for

each year for each department and specified tasks for each individual Of

course, the strategy must be feasible enough to be successful

2.1.3 Features of business strategies :

s* Business strategies must be overall, visionary, foreseenable and the most important feature is stability:

- Business strategies is the overall direction for the development of enterprises The overall features of business strategies must be:

+ In line with the general trend for development of enterprises

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+ In line with the development trend of the nation ( economy, society, ):

PDFIG@ Gnepvessoe taiee Of énsi@ating into the global economy especially the

competition trend of the 21st century

- To build successful business strategies, enterprises must forecast the development

trend (economy, society, ) A successuf strategy is often based on a good

forecast

- An other important feature is that business strategies has stability (comparatively)

in a certain period However it can be adjusted to match with each situation

** Business strategies must indicate Competitiveness

Competition is evaluated as the most fundamental factor of any business There is no

firm running business without competitors So a business strategy must be able to show how to achieve the competitive advantages to win their competitors

Business strategies must show riks and solutions to remove them

Business strategy is future development plans for the company and it is a difficult

task since future market environment is unpredictable and changeable The longer

strategy’s period, the more changeable environment factors and the riskier the strategy will be Therefore to reduce potential future business risk, company must develop business strategy on the foundation of good vision, unbiased and cautious

observation and prediction

Experience shows that where there are more risks, there will be more chances for

sucess The fluctuation of market always bring both opportunities and risks for enterprises If enterprises have appropriate business strategies, they will avoid the

risks and get success

** Professional and creative:

+ Select a suitable roadmap

+ Each enterprise must actively study the modern technology to apply in the current situation of itself

+ Appriciate human resources in all plans

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2.2 Strategy formulating and selecting process

StrlÐïfc Ganapeensn ipibrees Viediaties analyzing Company’s external environment

to determine opportunities and threats; analyzing company’s internal environment

to determine strengths and weaknesses Basing on the company’s vision, mission,

opportunities, threats, strengths and weaknesses, each enterprise will select suitable strategy, implement, supervise and assess the implementation of strategies

The strategic management process is described as below:

Figure 2-1 Strategic management process model

Vision Mission

Focus

External environment

+ Macro analysis:

external macro environment

+ Micro analysis: Five

forces model + Conclusion:

10

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2.2.1 Vision

The MbsGaiporianonn de foY Vitiaihg and selecting a strategy is the vision of

the team and individual participating in building strategies Vision depends on the intuition of each individual

Basing on intuition and analysis are important backgrounds for setting a strategy, which is consistent with the business environment Doing business in the constantly changing environment, the company’s manager must have a good intuition and vision to accurately analyze business environment and find out the actual

advantages as well as disadvantages that have large impacts on the company

Moreover, it will help to make a high feasible strategy, which fits with the

business’s environment and the company’s vision

2.2.2 Enterprises’s mission

Each organization has its own mission and responsibility Most of company’ leaders

believe that their business will be highly appreciated by customers The earliest step

of strategic management is to set objectives and strategy And after a period of time joining the fluctuated business environment, the manager will see the need to

review the original objectives

2.2.3 Objectives and responsiblities to build vision and mission

To build mission and vision to enterprises, we have to consider following criteria as objectives and responsibilities

s* To ensure the unification in objectives of the company

s* To set standard or benchmark to allocate resources

s* To establishing same communication language or corporate culture

** To provide support in creating work flow to determine tasks and

responsibility for each position in the company

** To set clearly the company’s measurable objectives in term of cost control, time and other variables

2.3 External environment analysis model

2.3.1 Factors of business environment

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Building and managging strategies depend much on the knowledge and

undBikndiagxpfiessapctsree \V@lŸSkOtbnditions which enterprises are now facing

Factors of environments have big influence because they affect the following

process of strategy management process Final strategy must be based on the environmental conditions which are most likely to the fact

Business environment that enterprise often get exposure to can be divided into 3 levels: macro, professional and internal

Figure 1-2 Factors of business environment

2.3.2 External environment analysis

Macro analysis will help answer the question: “What does enterprise have to face with?” Macro analysis is used to analyze macro environment - enterprise’s external

environment which has impacts on the operation and development of enterprises The enterprise has to identify opportunities and threats in the external environment;

Macro environment’s factors are showed as following model Each factor of macro

environment can affect the enterprises independently or in combination with other

factors

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Figure 2-2 External environment

Source: The strategic management lecture

** Politics and legal environment analysis

Politics and legal environment have big influence on business activities

Y Political environment: is political factors and environment that impacts the business activities They consist of political system, parties, union,

Government direction and motto, government policies and_ political

atmosphere

VY Legal environment: is legal system, the mechanism for creating, interpreting and enforcing the laws related to business area, it comprises the legal norms and rules that govern business activities

The influcne of politics and laws on the operation of enterprises is very deep, somptimes even becomes decisive factors A country with stable poilitical

13

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conditions, unified polity and laws will creat favorable conditiosn for the

PDkwlopnpwessOunEneesWersion

** Economic environment analysis

The economic environment is defined as the economic policies, socioeconomic

circumstance of the country in which company do business These factors have big impacts on the development of enterprises Macro economic environment includes factors that affecting consumer’s buying power and spending patterns, including:

the socioeconomic structure, economic development level, economic regime and macro-economic policies

Y¥ Socioeconomic structure analysis: socioeconomic structure is the structure of the national economy, it includes: industrial types,

distribution, consumption, technology, property Because the industry

development strategy is considered as the most crucial element, company’s manager has to carefully study the development and future tendency of the industry which covers the company’s business activities

Y Economic regime analysis: economic regime is the model of the national

economy It governs the relationship between government and business,

business and business, business and industry by applying certain methods

in managing and adjusting the scale, content and mode of the economic

activities

Y Economic growth analysis: economic growth is the economy-scale, the economic growth of a country, a region The indicators of economic growth: GDP, national income, national income per capital, economic growth rate By analyzing the economic growth, company could understand the economic development trend and anticipate the future trend, base on that to build a suitable business strategy

¥ Government economic policies analysis: economic policies are the

economic development objectives in a particular period and approaches

as well as strategy of government to achieve these objectives Economic policies of a nation include national economic development, commercial policies, salary polices, financial and monetary policies

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Macro economic strategy regulate scale and regulations for the operation

PDF Gpunparesser, eeeldenskomelations among enterprises and sectors to

ensure the development of national economy

Cultural and social environment analysis

Social environment: includes establishment and changes of social classes,

population structure, immigration, social power distribution and schedules of people’s daily activities and working in society

Cultural environment; consists of philosophy, region, language, literature and art The impacts of these elements on business activities are often indirect, but can not be underestimated

However, factors of Cultural and social environment is changing very slowly and difficult to be idenfied Each enterprise has to study and analyze social

factors to define risks and challenges

Demographic analysis

Population size: observation of rapid population growth is a global challenge

in the 21st century but could bring great business opportunities

Age structure of population: shows the potentiality for the elderly-care and

insurance service However, it is also a threat for company in term of labor

resources

Geographic distribution: can create advantages for telecommunication

technology enterprises For example, with computer, people could stay at home and work, contact or communicate with others through telecommunication network

Science and technology environmental analysis

Nowadays, more and more technology are coming in to people’s life which create both opportunities and challenges for all industries and enterprises Studying polices on science and technology will help enterprises build good

business strategies when facing with both opportunities and difficulties

Global environment

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The global environment consists of global market of company’s business activities,

currPH)$' Ganvipyesackek reepVausidmernational political events, basic

irstitution and culture of countries or regions Macro- environments analysis helps

us evaluate macro-economic factors which influence company’s business activities and major changes in competition

Macro- environments analysis is shown as below:

* Inflation rate * Household’ s savings

* Interest rate * business’ s savings Economic ¢ Deficit/ surplus balance of ¢ GNP

Social and cultural

Female proportion in labor

force

Labor force diversity

Environmental concerns

* Renovating products ¢ Government budget Technological * Knowledge application for R&D

communication technology

¢ Important international ¢ New industrialized Global political events countries

Segmentation * Key global markets * Cultural differences

Source: Strategic Management Text Book -Statistics publishing house

2.3.2 Five forces model — Industry analysis

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Sectors in the national economy are classified basing on the features of goods

or s&WVikeC oni pesessles ihithe Nevt6haNeconomy

In any sector, enterprises have to face up with the competition pressure including

Competition pressure from new entrants, Competition pressure from same products

providers, Competition pressure from substitutes, Supplier bargaining power and Buyer bargaining power

The effects of these factors are inevitable for all enterprises so the key for successful business strategies is careful analysis of each factor Mastering five force

of competition will help enterprises identify their strengths and weaknesses

The five forces model of competition provided by Michael E Porter is shown as below:

Figure 2-3 Industry competitive models

| Potential Entrants |

Threat of new entrants

| Substitutes |

Source: Strategic Management Text Book- Sstatistic publishing house

LÝ

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Competition from new entrants

Und ran Ginagoress Gti MG eoY @¥S40 Mmportance to each enterprise Competitors

are able to decide the characteristics and level of competition The level of

competition depends on the number of competitors, sector growth rate, fixed cost and the variety of goods and services The newcomers will increase the industry capability but demand their own market share; therefore the competition is more

severe

Each enterprise considers competition unstable process because the competition

pressure is big or small depending on level of the expenses occurred for the new suppliers join in the market and the reaction of other existing suppliers; and the low

or high industrial barrier

Enterprises need to analyze each competitor to figure out solutions The main tasks for analyzing competitors are described in diagram as below:

Figure 2-3: Main parts of competitor analysis

What they want to : What they can do and

Multidimensi - Do they satisfy with their strategy

- What are their weaknesses? ability of the

- What can help them react in camnanu?

the most powerful and

review : Strengths and

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_ PDF Compressor Free Version Ộ

Threats from potential competitors: New Company in a sector can reduce the profit of current ones when the new companies exploit new resources with the desire to gain market share Noticeably, buying of other companies in a sector with the intention to gain market share is the signal of new entrants Although,

not all the times enterprises have to compete with new entrants, the newcomers

often have big impacts on the development of enterprises

These enterprises bring new production capacity for the whole sector, but

at the same time require certain market share A barrier to prevent the entrance of the new ones will be a strong prevention of current companies

Threats from substitutes: Substitute goods are products that offer the identical uses, bring the similar benefits to customer If the profit of substitute goods is large, the pressure will be high (in term of producing cost and selling price);

the company will fall into passive position The competition pressure from substitutes will control the sector with high price If enterprises do not pay attention

to potential substitutes, they can be fall behind with a small market share Most of

new substitutes are results of technological breakthrough Therefore, to achieve

success, enterprises need to pay attention to resources and apply new technology in production

Customers: This matter cannot be separated in competition The trust from

customers is the most valuable possess This trust can be gained when enterprises can satisfy the demand of customers better than competitors Customers can be direct consumers who demand lower price, better quality and better after sale services

which are also the pressure for each enterprise

Another important thing is bargaining power of customers Customers can reduce the profits of the sectors by bargaining or requiring higher quality and more services

Suppliers’ capacity:-

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Builcing Business strategies for Huu Hung Viglacera JSC Group 6

- Erterprises should pay attention to negotiation with suppliers so as to gain

requllithEr€sœnth œssqœxiEcedoWewsäity, quantity price and capital return

- Swopliers can increase or decrease the quality of products or at the same time increase the price and lowering the quality of products

- Seection of supplier is basing on analysis of sellers It is necessary to analyze eacl supplier according to level of importance to the enterprise

2.4 — Business’s internal analysis model

2.4.1 Value chain

Value of products is measured by price that buyers are willing to pay to purchase

the »roduct Company would have profit if the total cost is smaller than the total revenues Hence, to obtain the competitive advantage, company has to lower its

tota cost comparing to competitors or differentiate their products or services to achieve higher sale volumes

Miciel Porter analyzes that “Each company is the combination of activities to design, produce, sell, deliver and support products” Each activity has contribution

to ircrease the products and service’s value “Value chain” could be divided into the

primary activities, such as internal logistics, production, external logistics,

mar<eting, sale and after sale services and supportive activities such as material maragement, research and development, human resource management and infrastructure (see Value chain mode— Figure 2-5)

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Figure 2-5 Value Chain mode

Source: The strategic management lecture Primary activities

In order to achieve the objectives of efficiencies, quality, innovation and customization of products and services, company has to build specific strategies that are closely linked to activities creating the products differentiation These mentioned objectives could be seen as cross- objectives which make contribution to company value chain

2.4.2 Stable competitive advantage

The stable competitive advantages of a company have four main attributes:

Firstly, valuable to help the company creates value, reduce cost, and boost the

biusiness activities’ efficiencies

Secondly, uniqueness to combine with company’s other resources in an unique way

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Thirdly, Internal reproduction, which is the result of internal coordination between

com Pda¥ CGadiyidteskoanll iiei Mens through the combination and organization of

technical resources to create the company‘s main capability

Fourthly, The competitive advantages are formed through the studying and experience accumulation process It could not be bought or imitated

2.5 SWOT analysis

Objective environment of enterprises keeps changing and bring enterprises potential

activities Only when enterprises have certain subjective conditions can those

opportunities be realized As a matter of fact, some enterprises have favorable

objective environment but they lack of some subjective conditions, and then miss the opportunities Vice versa, some enterprises who have uneasy objective

conditions but they know how to promote their outstanding features and get success Therefore, analyzing objective and subjective conditions of enterprises is of great

importance

SWOT analysis: Strengths, Weakness, Opportunities and Threats SWOT analysis

is the key for development for building business strategies, internal strengths, identifying weaknesses, opportunities as well as threats

TO build matrix SWOT, first of all we have to identify strengths, weaknesses, opportunities and threats in order of priority Then, we compare each factor respectively

S/O is the combination of main strengths and opportunities of enterprises Enterprises need to make the best use of strengths to compete with others to gain

more market share

W/O is the combination of main weaknesses and opportunities of enterprises This

combination helps enterprises to overcome difficulties by leap at opportunities

S/T is combination of strengths and threats because it is necessary to make use of strengths to overcome threats

W/T is combination of weaknesses and threats of enterprises This combination

requires enterprises minimize the weaknesses to avoid threat by setting defense strategies

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SWOT analysis model can be illustrated as follows:

sfrehgth5 Weakhesses Opportunities Threats

breaking down

Backward R&D Little products line

Little

advertising budget

¢ Larger customers segments

* Geographic expansion

* products line expansion

* Launching new products

* Backward and forward integration

* Expanding to gain market share’ rivals

* Taking over rivals

* loint-venture or partnership to increase market share

* Expanding to taking advantages of potential opportunities

* Expanding to make brand name more popular

* More new entrants

* Decrease sales due to

substitutes

¢ Slow demand growth

* Unfavorable exchange rate movement

* New costly regulation

* Positive relationship with business cycle changes

- Strong bargaining power with buyers and

suppliers

¢ Shifts in customers’

demands

* Demographic changes

Enterprises follow strategies to gain competitive advantages, to gain higher profits

Enterprises often choose three main strategies namely cost leadership, product differentiating and focus

2.6.1 Cost leadership strategy

This is the strategy that can produce goods or services with lower cost in comparison with competitors This strategy has two basic advantages Firstly, with lower cost, cost

leadership enterprise can impose the lower price than competitors but achieve profit as competitors If enterprises in one industry achieve similar value for their products, cost

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leadership enterprise can achieve higher profit because it has lower cost Secondly, if

indudt) Botan jimessoredseemd/emeiprises compete with each other by price, cost

leadership enterprise is able to stand better than other enterprises because of its lower

CCSI

Advantages: In the most general, solutions to achieve cost advantage depend on each

industry and industrial structure Advantage may come from production scale,

technological monopoly, favors on materials, product’s structure, service level, technological process

Disadvantages: The main threats of cost leadership method are that competitors

find ways to produce with lower cost and attack the cost leadership enterprise to its own strong point Competitors’ imitative ability with cost leadership enterprise’s

method is one of threats with cost leadership strategy Cost leadership enterprise

may only think of decreasing cost but it they cannot track changes in customer’s the

demand will be affected dramatically

2.6.2 Differentiation strategy

The differentiation strategy seeks to produce a competitive edge by producing products or service that buyers consider valuable and worth to purchase The

company’s ability to differentiate their products to satisfy demand of the buyers in a

unique way that the competitors can not offer, enables them to put a remarkable

higher price than the industrial average one Earning higher revenue by setting

higher price (not lower the cost like the case of the cost leadership) allows the product differentiation company to operate better and receive higher revenue

2.6.3 Focus strategy

What makes focused strategy be different from Cost leadership strategy or broad

differentiation strategy is the concentrated attention on a particular customer group

or market segment The targeted segment or niche can be defined by geography, by

a specific group of customer, or by a branch in the whole product line through

differentiation or cost leadership In nature, a focused company is a cost leader or a

differentiator

Another point is that a focused company competes with a differentiator in only one

or several chains of the product by successful differentiation as they have

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knowledge at only a small group of customers or areas Moreover, the focus on a

smalP DIG ah proekhsoraloes Vettsiofiacus to bring out new ideas than a broad

differentiator

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CHAPTER 3: ANALYZING ON CURRENT SITUATION OF HUU HUNG VICRAIC ERM pOIsTISF CCK OGMRANY

3.1 Overview on Huu Hung Viglacera Joint Stock Company

3.1.1 Establishment and Development

Name: CONG TY CO PHAN VIGLACERA HUU HUNG

International transaction name: VIGLACERA HUU HUNG JOINT - STOCK COMPANY

main business of producing baked clay bricks and tiles

In 1971, Huu Hung brick factory was separated from Tu Liem Brick Factory under Decision No.21/BXD dated 09/01/1971 of Minister of Architecture

Im 1978, Huu Hung brick factory was combined again with Tu Liem Brick Factory

in the name of Tu Liem Brick Factory , with headquarter in Huu Hung Village, Dai

Mo Commune, Tu Liem Dist., Ha Noi under the Decision No.1195/BXD-TCCB diated 07/07/1978 of Minister of Construction

Im 1978, Dai Thanh Tile and Brick Factory was combined with Tu Liem Brick

Factory under Decision No 297/BXD-TCCB dated 20/03/1979 of Minister of

Construction

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In 1980, Dai Thanh Tile and Brick Factory was separated to establish Dai Thanh

TilecBMHSGouqiwegany Free Version

In198§ Huu Hung brick factory was separated to establish Huu Hung brick company under Decision No 83/BXD-TCCB dated 21/01/1981 of Minister of Construction

In Februrary/1995, name of this company was changed to Huu Hung construction pottery under Construction glass and pottery corporation The production line is very modern with baking system and former system of Poland and Italy

On19/05/1998, Ministry of Construction made Decision No 283/BXD-TCLD on intergration of Huu Hung Brick Company and Ngai Cau Brick facoty under Hanoi Brick company into Tu Liem Construction Pottery Company and change name to Huu Hung Construction pottery company under Decision No, 284/BXD-TCLD

dated 19/05/1998 At this moment, the Comany was monitoring two factories and one firm producing bricks, tiles from baked clay

On restructuring enterprices sine 01/10/2003, Huu Hung Construction pottery

company separate Tu Liem Brick Factory to become an independent joint stock

company

Under Decision No.1642/QD-BXD dated 03/12/2003 of Ministry of Construcion on transforming Huu Hung Construction pottery company to Huu Hung Viglacera Joint Stock Company In 01/01/2004, this company officially became Huu Hung

Viglacera Joint Stock Company with certificate for business registration number

0103003512 given by Department of Science and Investment of Hanoi, changed

registration for the second time on 05/02/2007

In 05/02/2007, in buiding Viglacera trademark manual to promote Viglacera

trademark, once again this company was named Huu Hung Viglacera Joint Stock

Company

At present, the company is implementing project to move Huu Hung Brick factory

to hand over the site for construction investment projects At the same time, the

company is investing tuynel kiln in Ngai Cau Brick Factory with capacity of 80 miliion bricks /year

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3.1,2 Core business of company

Undergoing 50 years of establishment and development , at present , Huu Hung Viglacera Joint Stock Company is producing and providing a large number of

products and services which can be classified into 5 groups as follows:

( According to certificate for business registration number 0103003512 dated 05/02/2007 given by Department of Science and Investment of Hanoi)

Y Producing and trading baked clay construction materials

Y Producing and trading machenical products

Y Installation and building works in civil and Industrial projects: Consultancy, technology transfer of baked clay construction materials

Transportation;

Trading and investing in real estate ;

Tourism, inbound and outbound travel

Exploitation and processing construction materials

Doing other business allowed by the Laws matching with the development goals and direction of company

In general, the revenue of the company continuously increase : In 2006, total revenue was 26,212 million VND , in 2007 was 24,147 million VND (due to stop of one factory for removal), in 2008 was 42,126 million VND and 7 first months of

2009 reached 32,074 million VND and expected revenue in 2009 is 60,000 million

VND , of which coming from baked clay construction materials

3.1.3 Organization of the company

Organization of the company is shown in the chart below:

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Eui/ding Business strategies for Huu Hung Viglacera JSC Group 6

Figure 3-0 Organization chart of Huu Hung Viglacera Joint Stock Company

GENERAL SHAREHOLDER

COUNCIL

TY RẺ EAI0k OF ECONOMY DEPARTMENT FACTORY

Market& agents of company have been extended in most of provinces in the North,

especially in Hanoi and neighboring province

Achievements over the past few years:

- Emulation flag and certificate from the Government for many years

- Emulation flag of Vietnam Labour association

- Vietnam Quality Award year 1999

- Golden Ball Award year 2000

Applied quality management system: ISO 9001-2000

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Year Year Year First 07 | Plan’ in

No | Description 2006 | 2007 2008 months | 2009

5 | Profits after tax -6,625 779 4,129 4,008 7,500

7 Rate Profit /Owner capital 10 55 53 100

Source: Report of Huu Hung Viglacera Joint Stock Company July-2009

3.2 Vision, missions and targets of company to year 2020

3.2.1 Vision

To be in Top 10 in the market of construction materials especially in the market for

traditional products — bricks for construction works in Hanoi and some special

products such as tiles and decoration bricks with currently limited output capacity 3.2.2 Mission

To promote the tradition of the company undergoing 50 years since establishment, company staff is determined to develop the company to contribute to the process of modernization and industrialization of the nation With a strong determination towards higher business efficiencies, better prestige and higher competitiveness, the

company has raised the life quality of staff, ensured the profit for shareholders and

contributed to national budget

3.2.3 Strategic goal to 2015 and 2020

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“* Period of 2009 + 2015: To stable production of company so that in the end of PDXH € empputesSbuslieee Vedusioull reach more than 100 billion VND The rate of construction materials is 90% of total output capacity The

productivity will be 150% of the current one To invest in a baked bricks and tiles factory in Luong Son, Hoa Binh with output capacity of 80 million bricks per year, invest in in a bricks and tiles factory in Hiep Hoa, Bac Giang

with output capacity of 80 million bricks per year of which 50% is baked

clay productions and the rest 50% is unbaked

To invest in technology and human resources for mechanical firms to

achieve a goal of becoming a professional mechanical firms producing machines and equipments To change the design and increase the quality of

some new products (tiles, decoration bricks ) to raise the output capacity and

values for these categories of products To finalize legal procedures, invest

and prepare to invest in new projects

Period of 2015 + 2020:

To increase the business capability of the company in the fields of

construction materials To make the best use of newly built factories

including technology transfer

To set the goal for growth rate of annual business value which is ranging from 15 to 55 % In 2020, the total revenue will be as three times bigger than

2010 and reach 300 billiion VND To ensure the annual profits of company increasing by 10% per year with following rates for each sector: revenue from construction materials accounts for 70-80%, revenue from mechanicals

is 5-10% and other sector is 5%-10%

3.3 External environment analysis of Huu Hung Viglacera Joint Stock

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Y Structure of Labor in 2008:12% is civil servants; 15 + 18% labor is working

PDR Lom@resd entEipeéseasdomivate enterprises; others are farmers and in

accommodation for low income people

In the population structure, the rate of people under 30 years old and people in working age is highest In addition it is needed to raise people’s awareness of construction

industry among the citizens when they demand for modern infrastructure system The

rate of population per square meter is still very low comparing to the standard level of

region and of the world At present, the Government has policies to support low-

income people in terms of accommodations

Political and legal environment:

“ Politics:

- Stability of politics can be seen in stability in business environment

- Acceptance of multispectral economy, of which the State economy plays the main role

- Acceptance of the independence of market entities including individuals and enterprises with autonomy in deciding economy, self responsibilities,

building highly competitive market, building effective macroeconomic regulation mechanism under the guidelines, supervision of Laws system to

ensure the legal corridor for economic activities

%* Legal environment:

- Laws system has been gradually improved to create favorable conditions

for business environment

Laws on Enterprises, Laws on Construction, Laws on Investment, Laws on Tender,

and Laws on Competition come into full force and other regulations create an equal

play ground for all enterprises Our laws system is near to international practices to

attract more investors to Vietnam The open door policy is boosting investment in

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construction in Vietnam As a matter of fact, more and more projects have been

invesbÐ knŒđ oœmg0resedrhielerÈstRionhi gher demand for construction materials

Economic development level :

Over the past few years, despites difficulties caused by financial crisis, there have

been positive changes for the development of market and construction of industrial

zones and urban areas In addiotion., State owned enterprises after restrtucrimg

operate more effectively; private enterprises have achieved highest growth rate, foreign invested sectors have relatively high growth rate contrbuting in the national

economic growth

Globalization is an inevitable process and the economic development of Vietnam in

the past few years are results of open door policies for economic intergration

However, besides the opportunities , there are also challenges for domestic

enterprises in terms of capital, technology and managment capability when competing with foreign companies in all industries and sectors

Related economic policies in few years‘ time

Development Strategy for Construction materials in period 2004-2010, vision

to 2020 has been approved by Prime Minister under Decision No QDTT-

2004-0109-3/VLXD with some main points:

Y Focusing on production of construction materials to meet the demand of the construction works

Y Removing hand made production of construction materials from baked clay

with hard working conditions, causing environmental pollutions and natural resource wastefulness

Vv Making the best use of advanced technology to increase the quality of

products and minimize the impacts on the environment

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Tiêu đề	Capstone report building strategies for Huu Hung Viglacera Joint Stock Company to year 2015, vision to 2020
Tác giả	Tran Xuan Hoa, Dau Minh Thanh, Nguyen Huu Chinh, Le Van Thu
Trường học	Griggs Global Advanced University
Chuyên ngành	Master of Business Administration
Thể loại	Capstone report
Năm xuất bản	2009
Thành phố	Hanoi

Định dạng
Số trang	66
Dung lượng	9,35 MB