G1_00177 Business Strategy of Nghia Nippers Corporation in Period 2011-2015 Chiến lược kinh doanh của Công ty Cổ phần Kềm Nghĩa giai đoạn 2011-2015

G1_00177 Business Strategy of Nghia Nippers Corporation in Period 2011-2015 Chiến lược kinh doanh của Công ty Cổ phần Kềm Nghĩa giai đoạn 2011-2015

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GRIGGS UNIVERSITY

¢LOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION

CAPSTONE PROJECT REPORT

Business Strategy of Nghia

Nippers Corporation in Period

2011-2015

Group number

Student’s name

: 8 : Hoang Ngoc Bich Pham Thi Ngoc Diep Phan Hung

Dang Phong Luu Tran Ngoc Quang

HO CUE SMEENEECTES 2001

FNC France Nippers Corporation

GNC Germany Nippers Corporation

HOVG High Quality Vietnamese Goods

NNC Nghia Nippers Corporation

SBV The State Bank of Vietnam

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rh J COMBS ROK Ea of typical basic business strateples 7

Table 1.2: The process of decision-making to form a comprehensive strategy 16

Table 2.1: Overview of Viba Nippers Company 28

Table 2.2: Overview of Balli Nippers Company 29

Table 2.3: Overview of Antoine Nippers Company 30

Table 2.4: Overview of Dovo Nippers Company 30

Table 2.5: Global economic situation and that insome areas 35

Table 2.6: GDP growth of some big economies in quarters of 2009-2010 35

Table 2.7: Situation of assets and capital resources in 2008-2010 45

Table 3.1: External Factor Evaluation Matrix (EFE) 53

Table 3.2: Internal Factor Evaluation Matrix (IFE) ò5 22c 54 Table 3.3: Competitive Profile Matrix - domestic competitors SỐ Table 3.4: Competitive Profile Matrix - foreign competitors 22122 56 Table 3.5: Strength — Weakness - Opportunity - Threat Matrix (SWOT) 59

Table 3.6: Internal - External Matrix (IE) te —- 6l Table 3.7: Strategic Position and Action Evaluation Matrix (SPACE) 62

Table 3.8: Selection Matrix of Market Development, Product Development and Market Penetration Strategies 0 12122 2 run 64 Table 3.9: Selection Matrix of Marketing, Human Administration and Equipment, technology Investment Strategies - 22T nu 66 Table 3.10: Action plan to maintain and develop the traditional markets 76

Table 3.11: Action plan of penetration and development of new markets 77

Table 3.12: Action plan of strengthening finance and technology 78

Table 3.13: Action plan of building marketing and communication capacity .79

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Figure 1.1: Comprehensive strategic management Model by Fred R.David 13 Figure 1.2: Model of five competitive forces by Michael Porter si8 S0) X0 d0 00G 15 Figure 1.3: Total revenue of nails market in the U.S from 2006-2010 20

Pee: cos Deve OT PIRI crcececsoscrncrss cena cca 22 Figure 2.2a: Organizational chart of Nghia Nippers Corporation (NNC) — old

Figure 2.2b: Organizational chart of Nghia Nippers Corporation (NNC) — new

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Figure 2.6: Monthly inflation change in 2010 .0 0:.0c.ccccccceeseseeeseseseeeseeeeee 34 Figure 2.7: Quarterly GDP growth in period 2008-2010 252225255: 36 Figure 2.8: VND/USD exchange change in 2010 2-2 22222 2222222252122555 37 Figure 2.9: Scale development in 2008-2010 22-2222 2222223525525 525255 4I

Figure 2.10: Developme#nit rate 11 2008-20 TÔ co cgaaaoaoaddutaddvdliovsedeeoasaa 42

Figure 2.I [: Situation of business performance in 2008-2010 43

Figure 2.12: Comparison between average collection period and average payment period in 2008-2010 Ty vvi TH g1 1110111111111 1111111111011 111 E111 111 cv 11c Ho 44

Figure 2.13: The correlation between inventory and short-term loans 45

Figure 2.14: Relation between fixed assets and long-term loans 46 Figure 2.1S: Situation of payment ratio in 2008-2010 S21 212212212 47

Figure 2.l6: Situation of leverage ratio in 2008-2010 222222 22222226 47 Figure 2.7: Situation of equity and long-term debt 48

Figure 2.18: Relation between long-term loan capital and equital capttal 48 Figure 2.19: Domestic market share by revenue of Nghia Nippers Corporation 49

Figure 2.20: Foreign market share of Nghia Nippers Corporation 50

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3 Composition of the thesis 5 CHAPTER 1: THEORETICAL FOUNDATION OF BUSINESS STRATEGY

1.1.5 Business strategy manapemenI - S1 221112211 112111 2011122112811 eg 10 1.1.6 Role of strategic management In enterprise 1]

12 Process of business strategy planning of enterprise .0.0 0 0.00 000000 1] 1.2.1 Analysis of enterprise`s environment 13

I.2.1.1 Analysis of enterprise”s external environment 13 1.2.1.2 Analysis of enterprise’s internal environment — 15 1.2.2 Building matrix to choose business strategy 2 c2 15 1.2.2.1 External Factor Evaluation Matrix (EFE) .0.0 00.0 000.0-.200c00ceee này 16

|.2.2.2 Internal Factor Evaluation Matrix (IFE;) Tu nha l6 1.2.2.3 Competitive Proflle Matrix AT 1.2.2.4 Strength-Weakness-Opportunity-Threat Matrix (SWOT) l7

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I.2.2.7 Quantitative Strategic Planning Matrix (QSPM) 17

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13 C)verview of makeup demand and nail industry 18

L4 Necessity of business strategy planning tor Nghia Nippers Joint Stock KIEN suagagaggyt tro dtond060GGASGASSIGHUGHGAGERGNGIQQG2ANVGuanetdssisi 21 CHAPTER 2: ANALYSIS OF FACTORS INFLUENCING MANUFACTURING AND BUSINESS OF NGHIA NIPPERS CORPORATION = seville 2.1 Introduction of Nghia Nippers Joint Stock Corporation .0 0.0 22

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2.5 Analysis of production and business situation of the NNC 41

2.3.1 Production and business outputs tn 2008, 2009, 2010 : 4]

2.3.1.1 Growth im overall production and business scale 4I 25.4.2: Growth in production and BusiiESS SDEEU cccociceibieessiaocieo 4] 2.3.1.3 Growth In production and business efficiency — 43

2.3.2 Situation of management of accounts receivable and payable 44

2.3.3 Correlation between inventories and short-term loans 45

2.3.4 Correlation between fixed assets and long term loans 46

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2.3.5.3 Situation of correlation of equity capital and long-term assets / other long- term capItaÏ reSOUTC€S 2 2 2 222221122112221 121112111121 1221212122 111 2xx ng 47

2.3.6 Market, market share and distribution system ¡n 2010 49

2.4 General evaluations 2 222222 SĨ CHAPTER 3: STRATEGIC PLANNING, SOLUTIONS, ACTION PLAN, RECOMMENDATIONS, CONCLUSION 52

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3.3.1.1 External Factor Evaluation Matrix (EEE) S2 nen nàn ye 52 3.3.1.2 Internal Factor Evaluation Matrix (IFE) 00000.00.000 0000ccocccccccccceeeeeeeeeees 54 3.3.1.3 Competitive Profile Matrix and analysis of the core competitive advantage i hi CS i SSNS SS UE A CWI RCAC eC 55 3.3.1.4 SWOT analysis Matrix Q Q2 1112211221112 2111221122111 re 59 3.3.1.5 Intermal-Extermal Matrix (TE) 0.000 000ccccccccccccccccceeeeeceeeceeeseveceeeeeveveeeeeees 61 3.3.1.6 Strategic Position and Action Evaluation Matrix (SPACE) 62

3.3.1.7 Quantitative Strategic Planning Matrix(QSPM 64

3.4 Solution of strategic implementation of Nghia Nippers Corporation in the PRE DIE — D5 succeaienniuekeeiissatikoiuiooasgoilgotGi46000020v6009428608460/034300000 69 341 Solution offirmly holding and developing traditional markets 69

3.4.2 Solution ofpenetrating and developing new markets 70

3.4.3 Solution ofstrengthening finance and technology 71

3.4.4 Solution of building marketing and communication capacity 72

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3.5 Action plan of implementing business strategy in period 2011-2015 74 3.5.1 Action plan of firmly holding and developing traditional markets 7S 3.5.2 Actuion plan of penetrating and developing new markets 7S 3.5.3 Action plan of strengthening finance and technology đo 3.3.4 Action plan of building marketing and communication capacity 75

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1 Thank you letter of implementation group

Our Group 8 would like to express our sincere thanks to Training Program of Master of International Business Administration of The Griggs University and Center for Training Technology and Employment System that has created more

favorable conditions for us work together during the past time of the study and

research, the group also wants to give the deepest thanks to all the teachers who willingly impart valuable knowledge and have been devoted and tried their best in order to impart for us rich and practical knowledge Such knowledge would be

extremely valuable luggage giving strength to us to live and work on each our

Please accept our sincere and deep thanks

MEMBERS OF GROUP 8: BICH — DIEP - HUNG — LUU - QUANG

2 Commitment of implementation group

Our group 8 including five members commits that the Thesis of Business

Administration Master Program of The GRIGGS University is the research work

carried out by our group

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SENTENCE, (upstone Progect Report-C0110-Group &

THEO) Sune see day ETH are implemented by us and partially consulted

from sources such as textbooks, textbooks and other reference materials in Vietnamese and English as well as trom magazines media, internet, etc Actual data

is collected directly at Nghia Nippers Joint Stock Corporation From document sources and based on the approved draft of fundamentals, our group has completed

this thesis

Solutions of business strategy tor Nghia Nippers Joint Stock Company are made on

the basis of theoretica! foundations as well as of intuition and experience of group members And also through this thesis, group members have accumulated valuable experience for the establishment of a practical strategy for a company

3 Purpose and significance of the topic

Along with the increasing development of the economy, life demand of human has

increased day by day, not only “eat to be full, wear clothes to be warm” but also

“eat delicious food, wear beautiful clothes” Each individual makes up beauty for himself, improving himself and contributing to make the world more beautiful and more perfect In particular, the demand for beauty is through the nail industry that women like now

_ Ka = , Therefore, nail art salons have emerged

fe Rs YA asf } / increasingly detailed, sophisticated,

` sợ ; ex Making tiny paintings with beautiful

+ - Ay Elite | Ase names on ten tiny fingernails

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Cdihay940Ðẻ@1i⁄4hjJ 8Ên:@Ã8f9fđuring and business ¡n nippers and many tools

nail and beauty materials that is well-known

In spite of production of beauty products for women, Nghia Nipper ts still laid in the list of engineering industry If Nghia Nipper’s revenue is compared with the

"giants" in engineering, it is rather small However, if standing "independently" in

small industry of manufacturing and business industry of nail industry products,

Nghia Nipper becomes the unit with the average annual growth rate of over 30% and accounting for up to 80% of domestic market share In particular, export

revenue makes up over 30% of sales and early accessing to its products to bring

them into world market

An enterprise belongs to the very new field of business (without industry classification in industry system of the General Statistics Office of Vietnam) but has made remarkable achievements: 18 trademarks, five industrial designs with over 60 products such as nippers, scissors, file, brush, tweezers, etc of Nghia Nipper that

have been present in major markets like USA, Australia, France, Canada, China,

Thailand, etc Currently, Nghia Nipper has continued to expand its network in

Korea, Philippines, Cambodia, etc For over eight years in succession, Nghia Nipper

has been voted by Vietnamese consumers to be High Quality Vietnamese Goods In

addition, Nghia Nipper has entered the Top 100 Strong Brand in Vietnam, the Top

500 fastest growing enterprise in Vietnam in 2010 and had one of few Vietnam

engineering products that many foreign consumers know, trust and choose to use most Nghia Nipper is one of few Vietnam enterprises with engineering products of high quality, this is outstanding value in business strategy of a company Although

scale of the Company is not large, it is very successful not only in the country but

also reaching out to the world, competes well with products of the same category at the leading industrial countries of the world

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of the products but also of the voice of a Vietnamese enterprise in world market l'rom these matters, our group has chosen the research topic and given business strategy of NNC in the period of 2011 - 2015

4+ Methodology, limited research scope of the topic

The methodology used to implement the topic is the observation, based on the

theoretical foundation of the subject of strategic management, our group has raised

matter of the research focusing selection of enterprises that have over three-year

operation, production and business efficiency, typical products, are well- known,

have a certain position at home and abroad, business owner with good capability of

business management in order to determine research object conformable to oriented subject of training program The hypothesis of the study is the demand of beauty

care as well as nail industry that covariates (changes in the same direction) with people's income Information collected about the objects used to consider includes

the primary information: from the financial statements of the company, direct

interviews of the Board of Directors, information from the media, newspapers, pictorial magazine, and voice magazine The secondary information is_ the information that has been processed by our group, estimated from the primary Information to make the analysis problem appropriate, compatible, clear and understandable Enterprises selected satisfy most requirements of the topic suggested of training program The main tool used in the selection of strategy is theory of SWOT analysis and classic analysis matrices, analysis and evaluation of

current situation to find relevant factors with feasible positive effects in order to

bring enterprises to achieve medium-term objectives until 2015 In particular, based

on the research of group, each participating member have made strategic projects then the group has conducted analysis, aggregation, criticism and selection of solutions to help enterprise implement optimally feasible strategy

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Lim dd Gea PTA Sey SEPIGHning comprehensive business strategy of Nghia

Nipper Corporation (NNC), focusing on analyzing basic factors affecting on building business strategy From there we have determined key strategies and proposed solutions to implement business strategy of the company in 2011-2015 so

as to achieve business objectives of business owner set out in the same period correlatively Because the duration and information to access to company remain limited, this thread should be in our group not to mention deep implementation and evaluation of business strategy, which proposed new measures and action plans

from 2011 to 2015

5 Composition of the thesis

Including preface and three chapters:

CHAPTER |: THEORETICAL FOUNDATION OF BUSINESS STRATEGY MANAGEMENT

CHAPTER 2: ANALYSIS OF REAL SITUATION OF MANUFACTURING AND BUSINESS OF NGHIA NIPPERS CORPORATION

CHAPTER 3: STRATEGY PLANNING, SOLUTION, RECOMMENDATION, ACTION PLAN AND CONCLUSION

Business strategy is in the condition of market economy, based on objective and

subjective conditions, based on enterprise’s resources to determine stratagem, way, measures to ensure the survival, stable and sustainable development according to the objective of long-term development set out by the enterprise

1.1.2 Basic features of business strategy of enterprise:

1.1.2.1 Global property:

- Conforming to the general trend of development of the enterprise, being a creed

to direct all the operation of enterprise;

- Conforming to policy, nation’s development trend of economy, engineering and society in a certain period;

Conforming to globalization trend

1.1.2.2 Visionary property:

Need to have vision for many years;

Need to have scientific and valid prediction;

Need to have decision in selection of correct way and implementation solution 1.1.2.3 Competitiveness:

Need to have competitiveness because competition is the driving force for development,

Thanks to operation in a competitive environment, enterprise must research how to have a more competitive advantage than rival, helping to win in the competition

I2 Professionalism and creativeness:

Based on real strength to choose the way, fields: allocating resource appropriately

for short and long-term objectives

1.1.3 Typical basic classification of business strategy of enterprise:

Table 1.1 Typically basic classification of enterprise's business strategy

— Group | Strategy Definition | Illustration sample

| Forward —_—| Increasing ownership | NFL accepted Liggett Group

integration or control right over | to distribute official football

distributors and} cards in shops around the

Backward - Seeking ownership or | Apple Computer bought integration control right of the| shares in Adobe Systems

company's suppliers | Company that is = main

supplier of software and

Intensive | Market |Bringing — existing | Hilton Hotel planned to open |

strategy | development products and services

oft Busatess AUUIHUSEHfEOE = 7 -

I2 luxury hotels around the

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Adding new prod ucts |

or services but related

Philip Mortis” = offered a |

|

variety of new tobaccos without nicotine but with

Nestlé developed iced coffee

drink called Nescafe Frappe for age from13 to 24

Ford owned financial

department of Paramount Communications with 3.35 billion US dollars Ford's strategy was to make up for the cyclical nature of

automobile sales

—

Aggregate 7 activity

Rubok bought Boston Whaler |

to 80 million households and

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companies acting as sponsors form an independent company

| activity through cost and asset | total of 1,400 hourly jobs and

cutting to save sales | closes two factories

and profits that are| Campbell Soup cut down

declining 2,800 jobs ¡in order to strategy

increase efficiency

Retrenchment Selling an branch or a| RJR Nabisco sold its five

of activities | part of company food companies in Europe

with 2.5 billion USD for

BSNSA and a French food

company

Liquidation Selling all assets} John's Antique, a_ small

separately with | company, closed on October tangible value of 1990 after — selling

inventory assets remaining Aggregation Pursuing two or more | Placing head office in Kyoto,

strategies at the same | Japan, Nintendo Company is

| time diversifyin domestic |

shopping activity, |

strategy implementing —_ joint-venture

with U.S firms such = as

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such as modems and,

(Source: Concepts of strategic management by Fred R David, Statistics Publishing

House 2006, chapter 2, page 51 & 52)

1.1.4 Michael Porter’s opinion about typical strategies:

According to Michael Porter, specific strategies allow companies to get competitive

advantage from three different foundations:

- Towards the cost price (low cost strategy): producing standardized products with low unit cost price for cost-sensitive customers

- Differentiation: a strategy aiming at producing products and services considered particular in the industry and aiming at customers who are relatively insensitive to

price

- Focusing on the key: producing products and services to meet the demands of small groups of customer

- One reason of pursuing forward, backward or horizontal integration strategy is to

achieve the benefits of directing towards cost price

- Product development is a specific strategy with many advantages for product differentiation (differentiation) Successful product differentiation means higher flexibility of products, the greater ability of aggregation, lower cost, and improved

services, less maintenance, more comfortableness or more specific characteristics Strategies like market penetration, market development offer more advantages of

concentration

1.1.5 Business strategy management:

Strategic Management according to Chandler Alfres of Harward University: the process of determining the long-term objectives, selecting methods or modes of action to allocate the essential resources to implement the objectives determined

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implementation and evaluation of decisions related a lot of functions allowing an organization to achieve objectives set out Strategic management includes

continuous actions: review of environment (both inside and outside); formation of

strategy implementation of strategy and evaluation of strategy Therefore, strategic management research emphasizes on monitoring and evaluating external opportunities and threats in the context of internal strengths and weaknesses

Basic functions of management: planning, organization, promotion, personnel and

control

1.1.6 Role of strategic management in enterprise:

- Playing a key role in helping enterprises obtain long-term objective scientifically

and effectively

- A firm foundation for enterprises to identify and take full advantage of market opportunities or market segments in which the company will deal in, business strategies will be applied

- Feasible management tool system to help enterprises to do what so as to prevail over competitors in those markets with specific customer objects? Need to use what

resources (human, skills, assets, finance and technological know-how, etc ) in

order to achieve that objective

- Helping enterprises avoid many risks of damage: determining the potential risks

from the outside that can affect on the implementation of the strategy: environment, competition, politics, resources, etc.; thereby, preparing risk prevention plans to

cope with accordingly

1.2 Process of business strategy planning of enterprise

According to Fred R David, Strategic management process includes 03 stages: Forming strategy, implementing strategy and evaluating strategy (Figure 1.1)

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- Implementation strategy: also known as the stage of action of strategic management aiming to mobilize managers and staff in order to implement strategies

established Three basic activities of strategy implementation is establishing annual

targets, making policies, and distributing resources This stage is considered the most difficult stage in the process of strategic management

- Evaluating Strategy: the final stage of strategic management All strategies

depend on future changes because internal and external factors change regularly

Three main activities of this stage are: (1) reviewing the factors acting as the basis

for current strategies, (2) measuring performance, and (3) implementing activities of adjustment

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1.2.1 Analysis of enterprise’s environment

1.2.1.1 Analysis of enterprise’s external environment

External environment is all factors outside enterprise that managers cannot control but have strong influence on the implementation of enterprise’s target, affect on growth and profitability of each company Analysis of external environment includes analysis of macro environment and industry environment (micro) The

analysis of these factors helps enterprises to identify their position and

environmental specific characteristics, age in which enterprises exist, to shape

effects of external environment on the enterprise and hence making appropriate decisions in strategy planning

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- Entry risk of new companies

- Degree of competition between existing companies in the industry

- Buyer power of bargaining

- Seller power of bargaining

- Threat of substitutes

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1.2.1.2 Analysis of enterprise’s internal environment

To survive and develop all organizations must conduct activities: management,

finance, accounting, manufacturing, business, operation, research & development,

marketing, information system, etc In every field of activity each organization has

its own strengths and weaknesses

Internal environment analysis 1s an important and indispensable part of strategic management If do not analyze internal environment, do not recognize rightly

strengths and weaknesses of the organization, it will be impossible to build perfect Strategy

1.2.2 Building matrix to select business strategy:

According to Fred R David, the process of decision — making to form strategy

consists of three stages: input stage, matching stage and decision stage

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External Factor Competitive Profile Matrix Internal Factor

| (EFE)

Phase 2: Matching stage (Combination stage)

The Strengths- | The Strategic | The Boston |The |Grand |

_ Weaknesses- Position and Consulting Internal- Strategy

| Threats (SWOT) Evaluation Matrix (IE) Matrix

Phase 3: Decision Stage

| The Quantitative Strategic Planning Matrix (QSPM)

Table 1.2: Process of decision-making to form a comprehensive strategy

(Source: Concepts of strategic management, Fred R.David, Statistics Publishing

House 2006, chapter 2, page 260)

From real situation of NNC, our group mainly focuses on the EFE Matrix, IFE

Matrix, competitive Profile Matrix (CPM-Competitive Profile Matrix) in the input

stage, and SWOT matrix and SPACE matrix in the matching stage (Combination

Stage) to form strategies for NNC, the QSPM Matrix in the decision stage choosing

appropriate strategy for NNC

1.2.2.1 External Factor Evaluation Matrix (EFE):

External Factor Evaluation Matrix (EFE) allows the strategists to summarize and evaluate factors: Politics, Economics, Social, Technology, Legal, and Environment -

(PESTLE)

1.2.2.2 Competitive Profile Matrix

Competitive Profile Matrix helps the Company to identify the competitors along with their strengths and weaknesses, hence to help the Company have appropriate business strategy

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1.22 (ñ\EHMiY9EGF%vifii6n Matrix (IEE)

This matrix summarizes and evaluates major strengths and weaknesses affecting on functional business departments and affecting on production and business activities

of enterprise

1.2.2.4 Strengths-Weaknesses-Opportunities-Threats Matrix (SWOT)

SWOT Matrix is an important matching tool helping to develop four types of strategies as below:

- Strengths-Opportunities strategy (SO)

- Strengths-Threats strategy (ST)

- Strengths-weaknesses strategy (SW)

- Weaknesses-Threats strategy (WT)

1.2.2.5 Internal-External Matrix (IE)

To identify current position of a business based on a matching evaluation of internal

and external factors

1.2.2.6 The Strategic Position and Action Evaluation (SPACE) Matrix

SPACE Matrix is used to work out enterprise’s position or SBU related to factors:

financial strength, competitive advantage, environmental stability, industry strength SPACE matrix is used to select aggressive or defensive strategy

1.2.2.7 Quantitative Strategic Planning Matrix (QSPM)

QSPM (Quantitative Strategic Planning Matrix) is used to evaluate and rank

strategic plans, from there we have foundation to select the best strategy for enterprise

This matrix uses all information, data from the above - mentioned matrices: EFE Matrix, IFE Matrix, SWOT matrix, IE matrix, SPACE matrix This is a tool

allowing objective evaluation of replaceable strategies, firstly basing on internally and externally critical success factors already identified

1.2.3 Choice of business strategy

1.2.4 Process of implementation

1.2.5 Evaluation of strategy’s effectiveness

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1 3P DE CARTER SF ee nail care industry

AS society increasingly grows, economy develops, living standard 1s higher, and in modern society women no longer stay at home to do housework, most women work outside and need to communicate much more Accordingly, culture develops, festives are held more, beauty need of women becomes necessary Making beauty helps women to be happy and love life more and be more confident in communication Indeed, in a study financed by the Kanebo cosmetics company

(Japan), scientists said that they found the relationship between the makeup and the mechanism of human brain After conducting the experiment with a group of girls aged 20 to 30, experts found that when the girls look at their faces made up, their brains have reaction almost as in the case that they look at another face Since then, science group concluded makeup helps women assess themselves objectively and this may increase their ability of communication, helping them feel more confident

to face the crowd

In addition, entertainment industries also develop and the stars always have beauty demand to keep good image in the audience and_ fans Not only

women, men today are interested in outward form and beauty needs

Today, beauty is an essential service for everyone in the society Beauty is a popular

branch of study serving demand for overall beauty of human including both women

and men

Social development makes the need for beauty becomes necessary, it seems that people are interested in all parts of the body that can be shown off and expressed to others watching Accordingly, Nail (art of painting, decorating nails) also appears and develops as a unique beauty profession

The need of making beauty for nails is increasing along with the development of society A set of nails that is beautiful and cared carefully and properly would make

a good impression in communication and also expresses the personality of every

human being

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In 1879, American Hairdresser Magazine was the first edition later renamed American Salon, and the first publication specializing in Nail is NAILS magazine in

1983

Cosmetic industry developed in the United States 100 years ago In California State

alone, domestic industry has brought profit of billions of dollars Overseas Vietnamese who has also developed this industry are quite large; particularly nail

workers (manicurist) are significant

According to 2010 general statistics of Nails Magazine, total revenue in 2010 of nail market was 6.27 billion USD and price of making nail increased 4.3% on average

NAIL SALON SERVICES MARKET SIZE

Figure 1.3 Total revenue of nail market in U.S from 2006-2010

(Source: extracted from Nails Magazine)

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AbBlthc0faP§fã30hbfôiÌ 6EVWEhuon does not reduce in the US market This is clearly proven That is in 2008 when the U.S economy is most severely affected nail profession continues to increase Up to 2009 nail industry decline slightly by 3%, but only one year later it regains its position Also based on statistics of Red

Book 2010, the number of customers aged 36 or older accounts for more than 50%, clearly, there are large numbers of existing and future customers Although Red Book does not indicate, the woman at the age of 36 and above have stable jobs and

the need to keep the beauty, so they will continue to spend money to make beauty

In Vietnam, nail industry has appeared since the 60s After the date of national liberation dated April 30" 1975, for the first time woman has no longer made nails

Up to 1978, the nail began to grow back but not much Since 1985, times have changed, nail profession in Vietnam started developing popularly again However, development of nail industry in Vietnam is under the type of sudden outbreak and is

not now controlled tightly from the training to measures to protect the interests of

consumers when making nails In Vietnam there is not a separate committee for

cosmetic industry as in the U.S to control issuing of practice certificates as well as business activities in the industry

Along with the development of the nail industry, industry of manufacturing nail

tools and accessories, products included also very develops

1.4 Necessity of business strategy planning for Nghia Nippers Corporation

In 2010, NNC entered the top 500 fastest growing enterprise in Vietnam, Vietnam

Fast 500 announced by Vietnam Net online newspaper and Vietnam Report

Company However, to maintain the position and develop business production

capacity of NNC in the coming years and to meet the requirements set by

shareholders that are growing revenue and profits reached 30% annually ts really a not small challenge, requiring NNC to have to orientation in choosing suitable business strategy in the medium- term That is the reason and necessity of business strategy planning for NNC in the period of 2011 - 2015

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MANUFACTURING AND BUSINESS OF NGHIA NIPPERS CORPORATION

2.1 Introduction of Nghia Nippers Corporation (Joint Stock Company) 2.1.1 History of establishment

In 1985, Mr Nguyen Minh Tuan - founder of Nghia

| Nipper brand- began intending to producing nippers when

he found that although Vietnam has had production base nail tools but with poor quality To turn an idea into a

t finished product, Mr Tuan has worked for six years In

1992, Nghia Nipper’s products started to be introduced on

the market with the name of Saigon Nghia Together with

impetus of the common development of market economy,

*% on September 2000, Nghia Nipper officially came into

operation under the mechanism of limited liability Figure 2.1: Mr Nguyen

Minh Tuan, Chairman ©2™P™Y with transaction name of Kem Nghia or Nghia

of the Board of Nippers Up to January 17" 2008, the Company officially Management (photo registered its operation in the form of Joint Stock

provided by Mr Nguyen Company with registration No: 4103009129 and

hak Tuan) abbreviated name of Nghia Nippers Corp and

headquartered in 10/20 Lac Long Quan, Ward 9, Tan Binh

District, Ho Chi Minh city With thickness of experience, along with staffs with high technical skills, Nghia Nippers is now a leading enterprise in production and

business of nail tools in Vietnam In addition to its head office and workshop in Lac

Long Quan street, Tan Binh District, the Company has invested in new two factory

premises in Hoc Mon district and Cu Chi Northwest Industrial zone (until the end of

2010, this workshop will officially put into operation, increasing the total area of 3 workshops up to 20.000m2 and more than 2,000 direct employees)

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I3rÄiNhH.C@NÐBEPSSðH ies KESHER so Nghia Nippers particularly attach special

I nportance to investment in image building and brand promotion Since 1993, the C’ompany has thought of overall trademark registration Up to now, the Company has had 18 trademarks and five industrial designs granted certification by [Department of Intellectual Property In addition, the company has also registered

trademark in several countries such as USA, Australia, Philippines, Cambodia, and Thailand

With over 120 dealers and distributors, in recent years company's revenue has increased steadily by over 30% / year Nghia Nipper products account for 80%

market share in Vietnam Sales in 2010 reached VND 273 billion with over 12 million products sold in which average export portion reached 30% of total sales In particular, Nghia Nippers brand has been on the market of countries such as

America, Canada, China, Korea, Japan, Australia, Thailand, Cambodia, and some European countries

2.1.2 Business fields

Business fields registration: Producing household engineering Purchasing and

selling cosmetics, household electronic goods Producing cosmetic products

Purchasing and selling machinery, equipment, tools for hairdressing and manicure

Manufacturing tools and accessories for making nails-hair, paper filings; mousse slippers, toe-separate and products made of mousse (except for waste recycling, mechanical processing, and electrical plating), vocational training

Main business product: nipper, scissor, pincer, tweezers, etc manufactured and

traded in from the first days of operation

Auxiliary business products: dated September 2008, NNC introduced to the market

Nghia Beauty brand specializing in distributing cosmetic and beauty products

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polish for users that 1s certified by international standard bodies in Europe

America

Within the scope of the topic, we only analyze and plan strategies for product group

of nipper and nail tools

2.1.3 System of production management and operation

Nghia Nippers has had adjustments on reorganization of operation management apparatus in early 2011 to meet the demand of the market and scale exceeding over

2000 employees, by concentrating business activity performance on the basis of reorganizing the old organizational apparatus (see Figure 2.2a) and new

organizational apparatus (see Figure 2.2b):

Secretary to Personnel Assistant

General Duector to General Durector

Director of Human Duector of Business Dnrector of Fmance Erectơr of

Manager of HR | Manager of ||Manager of |} Manager of Manager of | | Manager of [Lòsuc: |Managerof|Shop =| Actmg

Management LM arketing ||Intemanonal!| Dormeste | | Accounting Procurement {Department |Planrang Foremane Manager of Department | Department ||Sales Sales | | Department Department Department Techmcal R &

| {Department |] Department | D Department

Figure 2.2a Organizational chart of Nghia Nippers Corporation — old model

(Source: Board of NNC management)

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According to the old model, General Director has to cover a lot of work, therefore

there should be some assistants and secretary to help him Because the model gathers many works and has to solve many problems, making General Director

overcharged leading the operation and decision in major issues affected, making

the process of business management inefficient Board of Directors has conducted

recrganizing apparatus according to the model of decentralization and authorization

to subordinates General Director directly manages two Deputy General Directors and two key blocks including the production - technology and market One permanent Deputy General Director is in charge of three blocks (Logistics and Trade, Finance, Administration-Human Resource) Under this new model, to some extent it is possible to reduce the work for the General Director, hence improving operation performance

ORGANIZATION CHART

(According to unified operation system — applied as from May 2011)

(Charman of the Board of Management of Nghia Nipper Cor}

(Nguyen Minh Tuan) Member of the Board of t | | Member of the Board of

Management of NNC Management of NNC

(Nguyen Thu Thu Huong) | (Nzuven Thị Dong)

General Director

(Nguyen Minh Tuan)

Deputy General Durector | Permanent DGT)

(Nguyen Tan Minh Tnet) [ † | (Nguyen Th Dong)

—”H——

7 oard of c ountert ecton oO}

of Technology ~ | _ Dưector of , Logstics Darector of Durectos of

Production FORE HOR CES (Ta) Market ( ) pane construche tang Board Procurement (Hung) Bnance( ) Ï ng „ ederanastratson

Ariaget ẨM anager PO CuNE et oMM araget Jeputy eputy buef ef eputy anager of

of anager O@M arketung fof h Manager offM anager of Account PccountantM anager of FA dmarasts ation cuahty Practory Pechrecal Departmen @internatio Pome ctac opetce Procuremengant of Ngpf KN umar epartment

ontrol Hung [R&D al Sales lepartmentepartment [Chanh) Pruan) esource inh)

}igoza,

Figure 2.2b Organizational Chart of Nghia Nippers Corporation — new model

(Source: Board of NNC management)

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CohDttrp'\MNWNSMIS AES izational chart of the apparatus ts applied by

NNC with model Porter's value chain (Figure 2.3) we find:

5 | Product and Product and process design production

$' technology engineering market testing R & D

) | development

J} eo anemem

| Procurement Supplier management funding subcontracting specification \

©) Quality control, Manufacturing — Finishing goods: Customer Warranty;

> | receiving packaging: order handing: management, maintenance

g (aw materials production dispatch order taking; education

,.| control, control, quality detvery promotion, and training

= | Supply schedules control, invoicing sales analysis upgrades

Indirect business activities (Support Activities):

- Administrative management, finance, infrastructure: Block Financial,

administrative block management, construction department, the Anti-

Counterfeiting

- Human Resource Management: Human Resource Department

- Operational management, support production and technology development technology and mass production, synthetic-Planning, Quality Management, Factory Manager, Technical Department and Research (There is no testing market section)

- Supply Management Shopping: Department purchasing, warehousing,

Inspection

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Unenmeity ( apxtone Project Report-CO110-Group &

Dire e HUSHeG HAVES PMY Activities):

- Providing input (Inbound logistics): Check the quality and origin of ceramics Supply plans A manager in charge

- Operations: production, packaging, control and production planning Deputy Manager of manufacturing technology handle

- Distribution (Outbound logistics): Complete, quality control, packaging and consumption Handle by a manager

- Sales and marketing: customer management, order management, sales analysis and market research Sales Manager handle

- Customer Care (Servicing): Warranty, maintenance, training and career enhancement (No one handle)

Comments:

Structure of management and operational comparison with the standard model of

Michael Porter, NNC has seen relatively complete, but now the operation of the company's operational and is_ still heavily dependent ondecision of the CEO, making busy CEO with the small, less important Sine there was _ suppression

coordination and self-management movement of the intermediate level, has reduced the effectiveness of the system.On the other hand tohave these outstanding developments on foreign markets, NNC should complement and strengthen coordination among thearray of production support and business, between the parts In pieces, making the flow of business value chains smooth and high efficiency Additional capacity to implement development strategies oriented to

export key products on the market officially has targeted customer base, increase

sales customer base, increase sales network, supply chain, production capacity, set

up some missing parts support: Market testing, marketing, customer care, training 2.1.4 Suppliers

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CuFluý.°MRC°S§A§ lEERISRFSVNR several partners of provision of materials

supplies, equipment, machinery with high professional competence in order to

ensure the highest and most stable goods and product quality

By-product Paper nail file, pusher, pedicure, slipper, toe —separate,

ancillary materials of nail industry

(Capstone Proyect Report-C0O110-Group &

OPEV BHA MBSE Company

| DUY TAN MANUFACTURING AND TRADE

| JOINT STOCK COMPANY

Main product Nail nipper and cuticle nipper, nails polis

By-product Paper nail file, pusher, pedicure, slipper, toe —separate,

ancillary materials of nail industry, hair, body (NAILS

BALLI)

Consumption market Vietnam, the U.S., Canada, Korea, China, Cambodia,

some European countries

' Strategic orientation desire to become one of the leading companies | a

providing best beauty supplies in the market at home

(Source: http://kemballi.com.vn)

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ladle 2.3 Overview of Antoine Company

Current name of | Antoine de Paris |

_ company

_ Headquarter — | P.O Box 1 310, Solvang, CA 93464,USA -

| Operation

Main product Nail and cuticle nippers, shears, knife, pincer, clipper,

etc

2010 capacity _ _ About 3.000.000 products

Strategic orientation

Dominant quality and durability

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2.2 Analysis of external environment (based on PESTLE factors)

Political factors (Politics)

Monetary tightening policy of the government to control inflation The policy that executed currency markets, kept inflation by administrative measures (cap rates)

with severe political conservatives did not bring the desired results of government

but also harm the businesses and markets because the currency circulation is stuck, capital price (interest rate, bank loans) are distorted, causing great difficulties for enterprises, markets and state management agencies

Economic factors (Economics)

- Global economic crisis: causes decrease of purchasing power and increase of un-employment

Despite the recovery of world economy in 2010, global unemployment in 2010 has escalated Unemployment in 2010 was 205 million, essentially unchanged

compared to the number of people unemployed in 2009 and increased 27.6 million

over 2007 Global unemployment rate in 2010 was 6.2% versus 6.3% in 2009 and

5.6% in 2007

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