G1_00181 Business strategy of VViglacera Autoclaved Aerated Concrete joint stock company stage 2011 to 2015 Chiến lược kinh doanh của Công ty cổ phần Bê tông khí chưng áp VViglacera giai đoạn 2011 - 2015

G1_00181 Business strategy of VViglacera Autoclaved Aerated Concrete joint stock company stage 2011 to 2015 Chiến lược kinh doanh của Công ty cổ phần Bê tông khí chưng áp VViglacera giai đoạn 2011 - 2015

GRIGGS UNIVERSITY GOLOLOOLBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM

CAPSTONE PROJECT REPORT

Le Thi Hoai Thu

Nguyen Trong Nghi

HANOI, 2011

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We Viglacera Autoclaced Aerated Concrete Joint Stock Company confirm that,

we agree the research group including the members mentioned below to be allowed to get access to the internal documenis, data as well as contact with the operation fact to study about the strategic orientations of VIGAAC, serving the research purpose of the group to

complete the MBA course:

1 Dang Minh Tam

2 Nguyen Trong Nghi

3 Vu Thanh Nhung

4 Le Thi Hoai Thu

Hanoi, November 22” 2011 REPRESENTATINES OF COMPANY

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K/T GIÁM ĐỌC PHÓ GIẢM ĐÔ c

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As well, we send our sincere thanks to examination committee for their practical recommendations to the thesis

Last but not least, we are grateful to our leaders and collegues at Viglacera Autoclaved Aerated Concrete Joint Stock Company as well as our classemates for their support , helpful suggestion and constant encouragement during our data collection Without their help, we could not complete this paper

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TABLE OF CONTENT VERIFICATION AND ASSESSMENT OF VIGACC

Overview and importance of the study

Objectives and scope of the study

Methodology of the study

Structure of the study

CHAPTER TL THEORETICAL BACKGROUND ON THE

DEVELOPMENT OF THE BUSINESS STRATEGY

1.1.1.3 Roles of business strategy

l.I.I.4 Types of business strategy

THE PROCESS OF PLANNING BUSINESS STRATEGIES

Analysis of effects from external factors

1.2.1.1 Macro-environmental analysis -PEST model

1.2.1.1.1 Polictical and legal factors

1.2.1.1.2 Economical factors

1.2.1.1.3 Socio-cutural factors 1.2.1.1.4 Technological factors 1.2.1.1.5 Geographic factors

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1.2.1.2 Micro-environmental analysis-Micheal Porter’s five

20 forces model

1.2.1.2.5 Intensity of competitive rivalry 22

Analysis of production performance and

1.2.3.1.1 23

technological capacity 1.2.3.1.2 Analysis of Marketing competence 24

15414 Analysis of human resources of Viglacera AAC, 34

1.3.2 Internal Factor Evaluation Matrix (LFE) 26

1.3.6 Quantitative strategic planning matrix (QSPM) 30

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VIG ACEKERA AAC, ESC

2.2.1 Macro-environment (PEST model)

2.2.1.1 2x5» Lư 2 2.2.1.3 2.2.1.4 2.2.1.5

Conclusion

2.2.2 Micro-Environment (Michael E Porter’s five forces model )

2.2.2.1 2.2.2.2 2.2.2.3 2.2.2.4 (2u 2.Š

Conclusion

Analyzing the impact of political- law factors Analyzing the impact of economic factors Analyzing the impact of sociocultural factors Parse technology element's impact

Parse geographic factor's impact

Analyze the Power of supplier Analyze the Threats of subsitute products Analyze the Threats of new entrants Analyze the Power of customers Analyze the Intensity of competitive rivalry

External Factor Evaluation Matrix (EFE)

2.3 ANALYSIS OF EFFECTS FROM EXTERNAL FACTORS

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2.3.1 Analysis of the internal environment of Viglacera AAC, JSC 51

2311 Analysis of production performance and technological 5]

capacity

2.3.2 Anaiysis of financial capacity of Viglacera AAC, JSC 64

2.3.2.2 Asset structure and financial resources 68 2.3.2.3 Finacial management and allocation 68

VIGLACERA AAC, JSC STAGE 2011 TO 2015

3.2.1 Summary of SWOT matrix for the company 73

COMPANY

3.3.1 Selection of strategic options through QSPM Matrix 78

Ÿ.J.2 The schedule on implementing strategic options 80

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3.4 STRATEGIC SOLUTIONS OF VIGLACERA AAC, JSC 80

No

LIST OF TABLES AND DIAGRAMS Names of tables and diagrams Figure |.1: The process of planning a strategy

Figure 1.2: P.E.S.T Model

Figure 1.3: Analysis of M Porter’s five forces Model

Figure 1.4: Model of developing a strategy

Figure 1.5: Diagram of Internal-external Matrix

Figure 2.1: A picture of Viglacera AAC, JSC

Table 2.2: The structure of joint-stock capitals at 31/12/2010

Figure 2.3: Outline of production technology

Figure 2.4: Approximate analysis of ingredients

Figure 2.5: Management apparatus map

Figure 2.6: Personnel apparatus

Table 2.7: Output of building materials from 2010 to 2020

Table 2.8: Opportunities and threats of macro environment

Table 2.9: Companies with the same products in Vietnam

Table 2.10: Producers of Autoclaved Aerated Concrete in Hanoi

and nearby provinces

Table 2.11: Evaluation on five forces

Table 2.12:Opportunities and threats of micro environment

Table 2.13: EFE Matrix

Table 2.14: Production output of the company in two years 2010

and 2011

Table 2.15: Types of products

Figure 2.16: The image of the product

La Figure 2.17: Image of the products used in Coteccons — Cau Giay 54

23 Table 2.18: System of distributors of Viglacera AAC JSC 56

24 Yable 2.19: Summary table to compare AAC and burntbrick 58

` Table 2.20: Summary table to compare the cost when using AAC 56

and burnt brick

26 Vable 2.21: Summary on the use ot AAC in regions in Viet Nam 61

27 Table 2.22: Forecast about demands for AAC from 2010 to 2020 62

28 Table 2.23: Summary table of AAC usage at present 62

29 Table 2.24: Balance sheet of Viglacera AAC, JSC in the first 63

and second quarters of 2011

Table 2.25: Business results of Viglacera AAC, JSC in the first

and second quarters of 2011

31 Table 2.26: Financial indicators of Viglacera AAC, JSC 67

32 Table 2.27: Internal factor eveluation Matrix IFE 71

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GENERAL INFRODUCTION

1 Overview and importance of the study:

On the way to realize its pledge from World Trade Organization entry, Viét Nam has opened retail outlets Therefore, the country needs to develop and consolidate its commercial infrastructure appropriately as well as promote competitive advantages and ability for enterprises

The development of Vietnamese building materials has met the increasing demands of society Experts define that it is high time for the field to develop sharply as the needs for building materials will raise rapidly in the next few years Moreover, manufacturing expansion of baked materials will encounter obstacles such as Government policy on production restriction and shortage of lands

The latest production technologies have been greatly advanced, which enables producers to make light materials with ratio 0.3-1.2, foamed concrete and aerated concrete with compressive strength 4-10 MPA These products are popularly applied in multi-storeyed construction projects because of their features such as lightness, durability and good appearance

Decision No 121/2008/QD-TTg on 29/8/2008 about approval of General planning the development of Vietnamese building materials until 2010 stated a route: the production volumes of non-baked materials as a replacement for baked ones would occupy 10-15 % in 2010; 20-25% in 2015 and 30-40% by 2020

Some strong points of aerated concrete:

- Resistance against many insects

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Because of a changeable business environment, with knowledge about business

management and market opportunities, our group No 8 of Class X0510 decided to choose this topic We aim to analyze and select business strategies, give solutions to implement these strategies in the period of 2011-2015 as well as improve competitiveness and business effectiveness for the sustainable development of the company

2 Objectives and scope of the study:

2.1 Objectives of the study:

Studying principles and process of developing strategies, as well as analysis and selection of best strategies so as to help the enterprise choose the most suitable business strategy

Clarifying and applying theories on business strategy planning into reality to develop and select best business strategies for Viglacera AAC, JSC in the period of 2011-2015

Suggesting groups of solutions to implement selected business strategy successfully

2.2 Scope of the study

Because of limited time and resources, researchers only focus on studying selection of business strategies for Viglacera AAC, JSC in the period of 2011-2015

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3 Methodology of the study:

The company’s data and minor data on building materials are used Besides, analysis, statistics, comprehensive analysis, comparative statistics are employed to assess the situation, as well as synthesize strengths, weaknesses, opportunities and threat Then, solutions and recommendations about selection of business strategies would be given to implement those strategies between 2011 and 2015 This aims to improve competitive power and business efficiency for the sustainable development of Viglacera AAC, JSC

4 Structure of the study:

Apart from Introduction, Conclusion and Reference list, the study includes three

CHAPTER 1: THEORETICAL BACKGROUND ON THE DEVELOPMENT OF THE BUSINESS STRATEGY

1.1.1.2 Principles of a strategy

As can be seen Business strategy is a combination between what the environment has and what an enterprise can do In general, in an enteprise’s life, strategy is an art of designing and organizing means to reach the long-term targets (economic targets) as well as obtain relationships in a changeable and competitive environment

More specifically, strategy aimed at:

¢ Outlining a general plan for the whole enterprise

¢ Giving trends of development in a long term and affirming main goals of the an enterprise

¢ Brainstorming basic resources of an enterprise and suggesting measures to deal with common unexpected changes of the enterprise in the competitive environment

¢ Defining outlets or outlet segments on which an enterprise will focus as well as business techniques which it will employ

¢ Defining How an enterprise gains competitive advantage over its rivals in those markets with specific target consumers

¢ Defining necessary resources (human, skills, asset, finance and technological

secrets) to reach those goals

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¢ Defining external threats such as environment, competition, politics and resources which may exert impacts on the implementation of strategies

¢ Values brought to Owners and Society of which the enterprise is a part

1.1.1.3 Roles of business strategy

- Planning role: a business strategy helps enterprises to clarify their goals and directions in future as well as re-orient activities in a long term It is also a reliable base

for enterprises to carry out business activities, as well as realize, consider and orient the

direction, the method of implementation and the expected time of success

- Forecasting role: In the globalization, business environment is changeable Therefore, analyzing business environment and developing business strategies would help managers to define opportunities, threats, strengths and weaknesses of their companies Then, it is necessary to analyze, evaluate and forecast environment conditions in the future so that suitable strategies can be given to utilize opportunities, promote strengths, minimize threats and overcome weaknesses As a result, enterprises can get over challenges to gain expected achievements

- Controlling role: Business strategies help managers to use and allocate resources soundly, make suitable decisions for different conditions of the business environment, improve the attachment inside the personnel system, strengthen risk defense, prevent potential threats, as well as increase business and production efficiency As a result, enterprise would develop sustainably

1.1.1.4 Types of business strategy

- Corporate Business strategy

By analyzing external and internal environment of enterprise, managers outline this strategy to clarify strengths, weaknesses, opportunities and threats Then, kinds of combination are formed:

+ Using strengths to exploit existing opportunities in business (SO)

+ Utilizing strengths to lessen coming threats in business (ST)

+ Making use of opportunities to overcome weaknesses (OW)

+ Minimizing weaknesses to limit coming threats (WT)

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- Business strategy in general:

The strategy refers to the most important long-term and decisive matters for the existence of an enterprise It includes four groups:

+ Contraction: Focus on core competences and decisive activities for business and production

+ Competitive advantage: analyze its competitive advantage over its rivals and define comparative advantages to develop business and production

+create new product or service

+Exploit capacities of the environment to seek out key factors

- Other business strategies:

+ Backward, forward, vertical and horizontal integration strategy

+ Market entry and development, product development

+ Diversification strategies

+ Threat defense strategies

After studying definition of business strategy and its role to enterprises, we can see the importance of building and selecting a suitable business strategy for different enterprises It decides the existence and development of enterprises Therefore, it is very vital to define and develop a suitable strategy as well as decide its starting point and ending point To give a deeper insight into this matter, researchers are studying the process of developing business strategies

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1.2 THE PROCESS OF PLANNING BUSINESS STRATEGIES:

1.2.1 Analysis of effects from external factors:

1.2.1.1, Macro-environmental analysis -PEST model

PEST is a research model on impacts of main factors in the macro-environment

These factors are:

Figure 1.2: P.E.S.T Model These four factors exert direct effects on economic sectors They are external factors of enterprises and fields, and fields are objectively affected by these factors

1.21 1.1 Political and legal factors:

+ Stability: stability is examined in term of political and diplomatic conflicts of legal institutions

+ Tax policies: policies on import-export tax, consumption tax or income tax will affect enterprises and their profits

+ Other relevant acts of laws: investment laws, enterprise laws, labor laws, anti-

trust laws and anti-dumping laws

+ Other policies: Government’s policies have influences on enterprises by creating either profits or challenges They include trade policy, policy on developing sectors, policy on economic development, interest rate policy, policy on regulating competition

or policy on protecting consumers

+ Ability to implement regulations of organization apparatus, foreign organizations’ intervening the political and legal system as a result of joining international conventions, bilateral and multi-sided agreements as well as international organizations such as WTO or IMF

Normally, enterprises rely on economic factors to decide which sectors and sections to invest in

+ The state and actual situation of economy: Any economy has cycles In each particular period of an economy cycle, enterprises must make a suitable decision for themselves This is flexibility in a strategy of enterprises

+ Factors which exert great impacts on economy include: Interest rate and inflation

+ Economic policies of the Government: laws on basic salary, the Government’s strategies of economic development, sector incentive polices: tax reduction or subsidy, orientations and plans, guidelines on industrial sector and regional economic development, period plans (5 years or 10 years), and strategic vision

+Future economic prospects : growth rate, growth rate of GDP, ratio of GDP over investment, Attracting foreign investment, economic openness and integration, routes

of reducing taxes, and investment incentive

+ Average longevity, health state, nutritious diets and ingesting

+ Average income, income distribution

+ Life style, academic qualifications, Aesthetic standpoints, psychological factors + Living conditions

+ Gender and race

Theretore, different segments of customers will surely help enterprises to have a deeper insight into consuming behaviors Then, they can make a right decision on selecting options in the strategy

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Loo EAL Pechnological factors:

The whole world is on the technological renovation with births of many new technologies which have been integrated in to products and services

The achievements in Information Technology, communication, transportation and traffic have shortened geographic distances and means of transmission, reduced time of storing process, as well as lessened costs of communication, storing and transportation + Government’s and enterprises’ policies and investment in development of traffic infrastructure as well as scientific technological study and

+ Speed and cycles of technology, rate of out-of-date technology

+ Influences of information technology or Internet upon business activities

+ Studying and developing new technology and materials as well as applying them into business and production

+ Ability to update and renovate technology, environment-friendly technologies I.2.1.1.5 Geographic factors:

In addition to foregoing factors, enterprises must regard globalization as a macro factor which greatly affects the industry of building materials

Ít is not denied that globalization is a current trend and it does not create opportunities for enterprises to develop their production and business

+ Globalization creates competitive pressures as competitors come from all regions Intergration forces enterprises to adapt to comparative advantages as well as regional and international labor allocation

+ More importantly, integration means that trade barriers are gradually lifted Therefore, enterprises have chances to cooperate with partners in a far distance In other words, their customers come from all over the world in stead of the national territory + Exploiting advantages of geographical location is a great chance for enterprises

to make full use of trade freedom to expand its large market

1.2.1.2 Micro-environmental analysis Micheal Porter’s five forces model

Micheal Porter’s five forces model

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“Micheal Porter’s five forces” are seen as useful and effective tools to study origins of profits Most importantly, this model provides enterprise with competitive strategies to maintain and raise profits

Five Forces Analysis

Adapted from M.E Porter, Competitive Strategy, Free Prees, 1980

Figure 1.3: Analysis of M Porter’s five forces Model According to Michael Porter, competitive intensity within any industry is affected

by these five forces:

|.2.1.2.1 Power of suppliers

- Supplier’s concentration

- Importance of volume to supplier

- Differentiation of inputs

- Impact of inputs on cost or differentiation

- Switching costs of suppliers in the industry

- Presence of substitute suppliers

- Threat of forward integration

- Cost relative to total purchase in the industry

1.2.1.2.2 Threat of substitutes

- Switching costs

- Buyers’ inclination to substitutes

- Price- quality trade-off of substitutes

¬

| t y Phreat of new entrants,

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- Absolute cost advantage

- Proprietary learning curve

And pressure from intimately relevant parties which are not directly mentioned

in the matrix However, they are shown in the book "Strategic Management & Business Policy" co-written by Thomas L Wheelen and J David Hunger:

1.2.2.1.) Analysis of production performance and technological capacity:

Analyzing and assessing production performance of an enterprise by anlysis and eveluation about production plans, factory capacity, production scale, effeciency of applying technological lines into production, performance of labor forces, quality of products, production costs and unit price, an enterprise can find out its strengths and

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weaknesses in production Moreover, it can evaluate whether production technology

is suitable and satisfies demands of customers or not

* 1.2 Analysis of Marketing competence:

Analyzing and assessing marketing competence means to analyze and evaluate Marketing chain, plans on products and services, purchases, cusotmer analysis, price policies, marketing effectiveness This help the enterprise to define marketing situation

of an enterprise as well as strengths and weaknesses so as to develop a suitable

2 al

|

| 3 Analysis of human resources:

Human resources is quite important as it goes along with existence and development of an enterprise Management of human resources is recruiting, training, arranging, appointing, switching and personnel policies Analysis of human resoucres can help an enterprise to define strengths and weaknesses in personnel management to give a suitable strategy

1.2.2.2 Enterprise financial capacity:

1.2.2.2.1 Solvency:

By examining solvency of an enterprise, we can know about rates of debts and cash, ect

1.2.2.2.2 Asset structure and financial resources:

Analyzing and assessing these factors by examining material infrastructures such as warehouses, machines and equipments, material sources, moderness of applied technologies, current assets, and working capitals such as inventory volumes

|.2.2.2.3 Financial management and allocation:

Defining debt indicators, rates of asset increase, use of borrowed capital or own capitals to outline a specific plan on financial effective use and exploitation

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1.3 TOOLS TO DEVELOP A STRATEGY:

According to Fred R David, important techniques in developing a strategy consist of three stages Tools used in this process can be employed in any model and organization They help managers to define, assess and select strategies and are presented as follows:

External Factor Competitive Internal Factor Evaluation Matrix Profile Matrix Evaluation Matrix

Strengths- Boston Consulting External — Grand

Weaknesses- Group Matrix Internal Matrix Strategy

Source: Fred R David, Strategic Management Concepts and Cases, Figure 6-2, P.222

Figure 1.4: Model of developing a strategy

Stage 1: input into EFE, IFE and CPM This phase sums up basic input information which is very necessary to form a strategy

Stage 2: The matching stage This stage presents pratical strategies which can

be selected by arranging and combining important external and internal factors In this stage, we choose one of matrixes such as SWOT, CG, IE and SPACE

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Stage 3: The decision stage This stage only include one technique which is using QSPM (Quantitative StrategicPlanning Matrix) This matrix uses input information in the first stage to objectively evaluate and select possible strategies in the second stage, and then choose a suitable strategy in the third stage

1.3.1 External Factor Evaluation matrix (EFE matrix)

EFE matrix lets strategy planners to summarize and evaluate competitive, technological, legal, government, political, geographic, demographic, cultural, social and economic information There are five steps to develop an external factor evaluation matrix:

Step 1: List down 10 to 20 key external opportunities and threats which are defined as decisive factors to the firm’s sucess in the external audit process

Step 2: Assign weights to each factor that ranges from 0,0 (not important) to 1,0 (most important) The total weights must sum up to 1.00 It should be noted that the importance of weights depend upon the probable impact of factors on the strategic position of the company

Step 3: rate each factor (ranging from | to 4) on the basis of company’s response to that factor (Here, | shows poor response, 2 shows average response, 3 shows above average respons and 4 shows superior response) These rates are based on effectiveness of business strategy To sum up, classification in this step is relied on the company’s scale while that in step 2 is based on the industry

Step 4: Caculate the weighted scores by multiplying the each factors weight by its rating

Step 5: Finding the total weighted score by adding the weighted score for each variable The toal weighted score ranges from | to 4 regardless of the total unmber of opportunities and threats If the total weighted score is under 2.5, the company is internally weak On the contrary, if it is over 2.5, the company is internally strong

1.3.2 Internal Factor Evaluation matrix (IFE matrix)

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The final step in analysis of internal situation is to build a internal factor evaluation matrix This strategic tool summarizes and evaluates strengths and weaknesses of functional areas of business It also provides principles to define and assess evaluate relations among those areas There are five steps to develop IFE matrix:

Step I: List key internal factors as identified in the internal audit process Use a total of from ten to twenty internal factors, including both strengths and weaknesses

Step 2: Assign a weight that ranges from 0.0 (not important) to 1.0 (all important) to each factor The weight assigned to a given factor indicates the relative importance of the factor to being successful in the firm’s industry Regardless of whether a key factor is an internal strength or weakness, factors considered to have the greatest effect on organizational performance should be assigned the highest weights The sum of all weights must equal 1.0

Step 3: Assign a | to 4 rating to each factor to indicate whether that factor represents a major weakness (rating = 1), a minor weakness (rating = 2), a minor strength (rating = 3), or a major strength (rating = 4) Note that strengths must receive a

4 or 3 rating and weaknesses must receive a | or 2 rating Ratings are thus company based, whereas the weights in Step 2 are industry based

Step 4: Multiply each factor’s weight by its rating to determine a weighted score for each variable

Step 5: Sum the weighted scores for each variable to determine the total weighted score for the organization

The toal weighted score ranges from | to 4 regardless of the total unmber of strengths and weaknesses If it is over 2.5, the company’s internal position is better

1.3.3 Internal-External matrix (IE matrix)

Evaluate internal and external factors

Use this matrix along with Swot matrix to prove its more quantitativeness than

that of Swot matrix

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- If the company’s position falls under cells I, If and IV regions grow rapidly

- If it falls under cells HI, V and VII, region of selected growth and stragies is stable

- If it falls under cells VI, VII and IX, the company had better to give up

The IFE total weighted scores

Figure 1.5: Diagram of Internal-External Matrix

Source: Fred R David, Strategic Management Concepts and Cases, Figure 6-9, P.234

1.3.4 Competitive Profile Matrix (CPM)

Competitive profile matrix is an essential strategic management tool to compare the firm with the major players of the industry Competitive profile matrix show the clear picture to the firm about their strong points and weak points relative to their competitors There are five steps to build CPM:

Step 1: List down 10 key decisive factors to the competitiveness of the firm

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Step 2: Assign a weight that ranges from 0.0 (not important) to 1.0 (all important) to each factor The weight assigned to a given factor indicates the relative importance of the factor to being competitive in the firm’s industry The sum of all weights must equal 1.0

Step 3: rate each factor (ranging from | to 4) on the basis of company’s competitiveness to that factor (Here, | shows weak, 2 shows average, 3 shows above average and 4 shows good

Step 4: Multiply each factor’s weight by its rating to determine a weighted score for each variable

Step 5: Sum the weighted scores for each variable to determine the total weighted score for the organization Compare the total weighted score of the firm with that of competitors to assess competitiveness of the firm

1.3.5 SWOT Matrix

SWOT matrix is used to list down all opportunities, threats, weaknesses and

strengths in the enterprise internal in an approrpriate order Basing on relations among factors, analysts select suitable strategic solutions by combining: Strengths Opportunities (S_O), Strengths Threats (S_T), Weaknesses Threat (W_T), Weaknesses Opportunities (W_O) Depending on the business field of the firm, managers use one or many SWOT matrixes to analyse and select solutions SWOT model includes 4 main groups of strategy:

S_O: Base on strengths of the firm to exploit external opportunities

S_T: Base on the firm’s strengths to prevent or limit external threats

W_O: Reduce internal weaknesses to make use of external opportunities

W_T: Minimize internal weaknesses to prevent or limit external threats

Strategy planners never study all possible strategies becuase there are numberless pratical strategies and ways to implement them Therefore, only a group of the most attractive strategies is selected and developed According to FERD R DAVID (8), it takes eight steps to set up SWOT matrix:

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|) List down external opportunities of the firm

2) List down important external threats of the firm

3) List down important internal strengths of the firm

4) List down internal weaknesses of the firm

5) Match internal strengths with external opportunities and type the appropriate S_O strategy in the S_O cell

6) Match internal weaknesses with external opportunities and type the appropriate W_O strategy in the W_O cell

7) Match internal strengths with external threats and type the appropriate S_T strategy inthe S_ T cell

8) Match internal weaknesses with external threats and type the appropriate W_T strategy in the W_T cell

1.3.6 Quantitative Strategic Planning Matrix (OSPM)

The QSPM incorporates earlier stage details in an organize way to calculate the score of multiple strategies in order to find the best match strategy for the organization According to Ferd R David, it takes six steps to build QSPM:

Step 1: List down all key external threats and internal weaknesses of the firm Step 2: Assign weights to each key external and internal factor These weights are identical to those in the EFE Matrix and the IFE Matrix

Step 3: dentify alternative strategies that the organization should consider implementing

Step 4: Determine the Attractiveness Scores (AS), defined as numerical values that indicate the relative attractiveness of each strategy in a given set of alternatives The attractiveness score ranges from | to 4: 1 = not attractive, 2 = somewhat attractive, 3 = reasonably attractive, and 4 = highly attractive

Step 5: Caculate Total Attractiveness Scores Total Attractiveness Scores are defined as the product of multiplying the weights (Step 2) by the Attractiveness Scores

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(Step 4) in each row The higher the Total Attractiveness Score, the more attractive the strategic alternative

Step 6: Sum Total Attractiveness Score Add Total Attractiveness Scores in cach strategy column of the QSPM he magnitude of the difference between the Sum Total Attractiveness Scores in a given set of strategic alternatives indicates the relative desirability of one strategy over another

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Chapter 2- ANALYSIS OF THE BUSINESS ENVIRONMENT VIGLACERA AUTOCLAVED AERATED CONCRETE JSC

AERATED CONCRETE JOINT STOCK COMPANY

2.1.1 The process of formation and development of the company:

General Information

# Name: Viglacera autoclaved aerated concrete JSC

+ International Name: Viglacera Autoclaved Aerated Concrete Joint Stock Company

# Short name: VIGAAC

Address: Yen Phong Industrial Zone, Yen Phong district, | Bac Ninh province

Figure 2.1: JSC Viglacera autoclaved aerated concrete

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Summary of the formation and development

In the world, awareness of the negative effects of the clay brick production on resources and habitats, it has been applied using most of the adobe brick on building activities Adobe brick is not only promoting the role of replacement bricks but also showing many outstanding features compared with traditional _ bricks Implementation of Decision 121/2008/QD-TTg dated 08/29/2008 of the Prime Minister on approving development of VI.X unbaked program, Decision 567/QD-TTg dated 28/4/2010 on approving development of building materials are not cancined program to 2020.On 22/02/2010 at Yen Phong Industrial Zone, VIGLACERA Corporation, VIGLACERA autoclaved aerated concrete conducted the ceremony VIGLACERA Ground Concrete VIGLACERA autoclaved aerated concrete Block Factory Ceramic with capacity of 200,000 m3_ follow Germany technology 2.1.2 The organizational structure of the Company

JSC Viglacera autoclaved aerated concrete is held and operated in compliance with:

Enterprise Law 60/2005/QH11 dated November 29, 2005 of Socialist Republic of

Vietnam’s National Assembly

2.1.3 Vision, mission, core values of the Company

- Vision: modern production management system and_ business, and offer sustainable value to the company and customers

- Mission: Manufacture of high quality, lightweight, friendly with environment, suitable for the objectives of development of construction materials are not heated by the Government in the near future For the purpose of replacement brick products which cause environmental pollution and destruction of natural resources and to meet the growing demand of the construction market Becoming the number one manufacturer supply environmentally friendly bricks in Vietnam is the goal of the company in 2015

- Core values: production technology, brand value, for the environment

2.1.4 The functions and business tasks:

# Business area:

According to the Business Registration Certificate No 20.04.001298 by Bac Ninh Department of Planning and Investment for the first time February 1, 2010, company’s main business area: Produce and supply of Block autoclaved aerated concrete with any

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size,

# Charter capital: 21,1 billion VND

# Structure of share capital

Table 2.2: Structure of equity at 31.12.2010

Total number of shares 2.110.000 21.100.000.000 100

( Resource: JSC Viglacera autoclaved aerated concrete)

2.1.5 The process of manufacturing technologies:

The main process of manufacturing technologies as follows:

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The technological process:

Picture 2.3: Diagram of production technology

Ingredients are as follows:

The amout The amout | Theamout | The amout

used for each

(Source: JSC Viglacera autoclaved aerated concrete)

Picture 2.4: Table of ingredients

2.1.6 Characteristics of business activities:

Management structure held as company stock model as follows:

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Picture 2.5: JSC Viglacera autoclaved aerated concrete’s Management struture

Management apparatus:

Picture 2.6: Structure of management apparatus

2.2, ANALYZING IMPACTS OF SURROUNDINGS TO VIGLACERA

AUTOCLAVED AERATED CONCRETE:

2.2.1 Macro Environment (PEST model)

2.2.1.1 Analyzing the impact of political- law factors:

According to the trend of recent years, demand for brick products for the high construction projects increased However, in developed countries with high labor costs, the government repeatedly made such policies preserve environmental resources, energy security Before this situation, the Government has already had the plans and schedule for phasing out products with baked bricks polluting and destroying natural resources to use adobe brick However the implementation of this route has not been thorough This leads to competition ability and consum products meet difficulty when faced with consumer’s habits

+ Production cost increases due to raw materials, fuel and labor continually rising

+ The China government is implementing policies to adjust macro-economic to cool off the economy grows too hot, narrow comprehensive banking, exchange rate policy affect adversely on the real estate sector, tightening capital of building materials

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industry

In the past year, the government has advocated policies to promote social housing, housing for low-income, expand capital Hanoi created huge demand for building materials products in general and brick products ¡in particular

+ It is the policy of the Government Decision No 121/2008/QD-TTg dated 29/08/2009 of the Prime Minister approving the master plan to building materials in

2020

+ Policy promotes unbaked construction materials

2.2.1.2 Analyzing the impact of economic factors

Construction industry is important in the economy Under the impact of the global economic crisis, the economies of the world have been influenced, reduced power consumption sharply However, many experts say, may be the worst period has passed, the world economy and Vietnam’s one had the signs of prosperity But from the third quarter in 2011 effected of the world economy and the Government

of Vietnam tighten credit (higher interest rates, reducing loan balance property) make real estate property is really dificult, most of the big projects is postpone constructing, which makes building materials manufacturing industry is also affected, including brick has large proportion

Besides, Vietnam has a huge advantage in the producing construction materials industry due to low labor costs, young labor forces

2.2.1.3 Analyzing the impact of sociocultural factors

The company is unique representative get Viglacera branded in construction and concrete tiles products (environmentally friendly products)

Because of the history and culture should not be replaced immediately "habit" is use bricks in people

The designes still have shied change the habit of using red bricks (bricks) With a stratege focus on market segments of construction, Viglacera aerated concrete has created his own image, brand Viglacera aerated concrete has prestigious domestic market

Master Plan of construction materials producs have been approved by September /

2008 design capacity and output to 2020 (in table)

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Table 2.7: Production building materials from 2010 to 2020

Kind of production Unit

bricks Uncalcined construction | Billion

~ (Source: Decision No 121/2008 / QD- dated29/8/2008) 7s

2.2.1.4 Parse technology element's impact

Technology is one of the most element decideautoclaved aerated concrete building brick product's cost price, yield resolution, quality

Autoclaved aerated concrete technology was applied absolutely at advanced countries, and in our neighboring countries like China have begun to take on more and their route is in 2015 will stop the entire production of bricks

Technology and production equipment will choose a number of plant geochemical intransitive and china's technology to detract from cost price

According to analysts, building brick market place's an inevitable trend, big buildings hads chapter master give autoclaved aerated concrete products to replace brick for this product had many good point dominated overed as light, big, flatness, had calculate chemico-physical myoplasm well

At present in Viet Nam have very little factories produce this product due to it has inkstone new technology with us where chiefly busy depend on project A number

of units had product but not already reach quality and quantitative production

2.2.1.5 Parse geographic factor's impact

Viet Nam is one of country there is big capacity and materials high quality source,especially this product is usable materials sources is industrial junk Beside of quicklime here, sand fuel, it be either a Viet Nam's strong force, especially in Northern C2 Global Advanced Master of Business Administration

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