G1_00203 BUSINESS STRATEGY BUILDING FOR HADO GROUP JOINT STOCK COMPANY (2011-2015) CHIẾN LƯỢC KINH DOANH TÒA NHÀ CÔNG TY CỔ PHẦN TẬP ĐOÀN HADO (2011-2015)

G1_00203 BUSINESS STRATEGY BUILDING FOR HADO GROUP JOINT STOCK COMPANY (2011-2015) CHIẾN LƯỢC KINH DOANH TÒA NHÀ CÔNG TY CỔ PHẦN TẬP ĐOÀN HADO (2011-2015)

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Griccd) Business strategy Building of Ha Do Group JSC (2011 — 2015)

GRIGGS UNIVERSITY SLOBAL ADVANCED MASTER OF BUSINESS ADMINISTRATION PROGRAM

CAPSTONE PROJECT REPORT

HA NOI 2011

Acknowledgement

Topic “Building the business strategy of Ha Do Group Company in the period of 2011 — 2015” is the study of capstone project in business administration from the University of Griggs associated with Center for technology Training and employment system (ETC) of the Hanoi National — University

During the implementation of this topic, we get a lot of help and guidance of the teaeher, teacher of ETC Besides, the cooperation and provision of the figures

of leadership Ha Do Group Company and the staff helped us a lot in the process of implementation of this assignment report

Through this, we would like to sincerely thank everyone who has guided us

to this great exercise, thanks to ETC, the valuable cooperation of the leaders, staff

of Ha Do Group Company

Due to our limited experience and knowledge, the project certainly can not avoid certain shortcomings, the glass would teachers consider, evaluate and make suggestions on ways to better our

We are very grateful to our friends, colleagues, relatives for their encouragement during this course

Gricc) Business strategy Building of Ha Do Group JSC (2011 — 2015)

TABLE OF CONTENTS Acknowledgement 0 Sera 9 es ee te a es pene ees ee net os en od eo wre ene I TABLE OEF CONTENTS 2.22 222222202122 n ai il LIST OF ABBREVIATION Q 2.2222 22220 nà nhu rye Vil LIST OF TABLES 2 022220202212 12 1n nà nà nà nàn HH nà ng H reo LIST OF FIGURES, GRAPHS Q2 nung uya IX INTRODUCTION ooo ccccecee cesses scesstussustsessscasevavsrsasvissaveavseveveaseveresees |

1 Rationale Of Study oct ccc cccccceccscescsscesessceecssveusrevrevavseveveeeitestessteaes os |

2 Objectives and scope 0Ÿ StUdY 2 c2 1 nh nh nh HH neo 2 Sta OE I bungunngassdissssouyetigsiokoXtonttiotldtrtfaiordoteEAĐotifiEEefaSS0a3223491:5u 4m xiV0psgretdSgiZ00i Zz 2.2 SCOD€ O SỈUY Q1 TT HT HT HT ngu 2

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BASIC THEOTY OF BULDING BUSINESS STRATEGY OF BUSINESS IN MARKET ECONOMY QQ22 22.2020 02nnnnn HH HH HH ng 4 1.1 DEFINITION OF BUSINESS STRA TEG Y .- 5-55 5s sscsceees 4 1.1.1 Definition of business strategy .0.0.00 00ccccccccccscescescscesesessesceeeeeseeeees 4 1.1.2 Definition of strategic management 0 0.0 0.cccceccecesceseseeeeseeeeeees 4 1.1.3 Duties of strategic management .0.0 00.0 0ccccceccceccececesceseeseeeseesees 4 1.2 CONTENT OF PROCESS OF BUILDING BUSINESS STRATEGY FOR A BUSIINESS HH H00 H0 HT HT ng nu 5

1.2.1 Strategic vision, mission, Objectives 0 0.ccccccccccesceccseeeeseeeseseesesees 5

1.2.2 Analysis the external environment .0.0 0 000ccccccccccccsececseeeceeeseeseeseeees 5 1.2.2.1 Analysis general environment - PE-ST che 5 1.2.2.2 AHdlsiS s€CfOF ÌS £HVỈFOHHICHE 5 5 5 S121 E1 Ha Ha nu neo 6

1.2.2.3 External Factor Evalwation Matrix (EFIE) S1 1212 ssxea 8 1.2.2.4 Competitive Profile Matrix (CPM) .000 0cccccccccccccscccssccsceseccsscsseeseeseee 9

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1.3.2 Internal — External matrix(IE) S1 S SE 1k ST nh n nhe 14

1.3.3 SPACE Matrix icc ccccecesccsccseesensscsscvssesscssevssesievssssentenseeets 15 1.3.4 Quantitative Strategic Planning Matrix 00 00.00cccccccceceeeeeeeeeeeeee 16 0.9403 2211144 I8 ANALYSIS OF HA DO GROUP JOINT-STOCK COMPANY’S FACTUAL SITUATION Q.11 nàn nà nà nà Hà Ha net 18 Pls MVP OM DCHON sercsanssesasnevasunswnemanesvsasaveneansceswesasccte tee séevees exrerrenaeeronsecemenaraneninanes 18 PNN, an 18 2.1.2 The company)s functions and missi0n: - ác sexy 20

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PC N | C02, n6 665 21 2.1.2.4 COHSHÍTÏHE S€FVÏC€ - SE 1111111111511 1111511111 xxx al 2.1.3 Ha Do Group ”S Stru€fUF€ c1 c1 111191 1 ng nhiệt 22 2.1.4 Company’s ceurrent position ch nyneesecovo, 22 2.1.5 HDG’s position in real estate S€€fOF 2c 2 2n He 23 2.2 External environmenf arnÌYSÌS - <5 cv nu cv ceke 24 2.2.1 PEST analySiS 2 2212212211221 nà nh HH HH re 24 2.2 I.I Potitical aHl legdl €HVỈFOHHIGHE SE nh tha akg 24

Gricod Business strategy Building of Ha Do Group JSC (2011 — 2015)

2.2.1.2 Economic environment Analysisy o.0 0000.00.cccccccccccceccceeveeeeeveseeseeree 25

2.2.1.3 Socio-cultural CHVTUOHINHOHE 26

2.2.1.4 Technological envirOnment 0 00 000cccccccccccccccccccceseevsecveceseccsevseees 26 2.2.2 Five-force model anaÌySiS 222 2n HH nhu na 27 2.2.2 COHIDẨÏfOFS 522 5225221121121 1121 11111121111 T1 HH ty HH nà na 27 C00) 0n ố ốẽe 29 MJ7N)'.) nnh ốố.ốa 30 2.2.2.4 SMbsfifHf€ pFO(ÏHWCÉ 5-2522 S2<c2cscsxea fen cme unemuntntc a oh ne sat pean 32 2.2.2.5 CUSTOMER o.oo ccccceccecccce eee e ieee cesses ceeceecesetvsssetstessvstvstvssvrsvsevivisvseevsteaes 32 2.3 Internal environment analySis .ccccccccsesssscsscsscscsscscsscsssscssescsseseeseceeeecs 36 2.3.1 HUMAN PeSOULCeS 02 ce ccescsscsececcecssestsecssvsesecseecasvaviveevseeseeeeass 36 2.3.2 Fimancial capability 2.0.00 ccccccccescescvsccsccsecseesenseesvssesttaeaeseeans 38 2.3.3 Managemen( - S211 1S Hy nh HH HH HH xe 43 2.3.4 TechnolOgy c c1 21212211 1H11 HH HH HH HH HH xe 43

2.3.6 COIIẨFOÌ L2 2120122120111 112111111111 1 11111 11T TH TH HH HH kg 44 2.4 Evaluation matrix elements inside (IFE) of the HDG 45 CHAPTER 3 sscsnscns s1isiics iss tntsceraensnknaonen nen coneenens eve enorseesey yupservens ens exevesewanees aan waa expannaienns 47 SELECTION AND CONSTRUCTION OF STRATEGIC BUSINESS FOR HA

DO GROUP COMPANY 2 S21 12121221221 n HH HH Hee 47

“SAU nh ố ố ố ốốốwa 47 3.2 The goal of the eompany in 20 Í I-2/( Í 5 << 5-5 < se sex ssessse 47 3.3 S€l€CfÏOI OŸ SÉTA{€ĐØ: HH TT HT TH nu ng 48 3.3.1 Analysis On SWOT HIAfFẲV 5-5 2521151158 8 HH tk 48

Ÿ.3.2 The inferndl and evferHal mafFiv: (EE): à E2 2x22 sei 49

Ÿ 7 Andlysis 0H SPAICE HIẠfFÍX: à 5 525111111211 211 nang Ha tu tei 50 Ÿ.Ÿ.4 Analysis on QSPM HIẠfFÏX: 5 525 neo, 52 3.4 The forming of strategy for Ha Do Group Joint Stock Company 54 3.4.1 The strategies on the product development and the market expansion:54

3.4.2 The (000/20/0802, ((00., 0n n6 37 3.4.3 The diversified virdfeg\+ ee ST 3.5 SOLUTIONS tO the ĐHSỈH€SS SÍP(1ÍCÏCS* SG S333 vs eeke 57 BST BUSiness SỌHÏOHW: 4Q 2.1 211111 n1 HH nh na nha 57 BiS.2 FINANCIAL SOLUTIONS ooo 0S 252112111112 HT HH HH HH HH nung 58 3.5.3 HÏHIHAH F€SOHFC€ SỌHÍÏOH- 3 5S SE 151 1n nhung 58 X2, 2.0 n6 6 6n 59 3.5.5, COHIEHHHCAẸOH SÊT(IÍCEĐ} 5< 5-55 S2 S3 vs ESES SE EeEsseesevee Wtionawas 59 COncÏUSIOR 2 20 2212202201121 121 112112211 nh Hà na nh na 6] 02/00 ooo cece cee ceeeeccseecsecesseesssevstensseasevieesesrestieeiestitesatesstseeesevane, 62

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Gnlo) Business strategy Building of Ha Do Group JSC (2011 — 2015)

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LIST OF TABLES

Table 2.1: Vietnam's economic growth rate over several years

Table 2.2 Ha Do Group in comparison with others in the same business field

Table 2.3: Matrix of external environmental assessment of the HDG

Table 2.4 Competitive Profile Matrix of HDG

Table 2.5: Human resources data of the company in three years

2008, 2009 201Ú 12.2121 12101 12111111121 12111 81T nàn nà ng HH ru

Table 2.8 Revenue structure in term of company’s portfolio -

Table 2.9 Cost structure in term of company°s portfolio - sssscs s52

Table 2.10- The key financial indicators 0 0 0.ccccccccccecsesescsseseeecseeseseeseeseseeees

Table 2 11 Evaluation matrix elements inside (IFE) of the HDG

Table 3.1 : SWOT matrix of Ha Do Group Joint Stock Company

Table 3.2 The internal and external matrix (IE) ccccccccccscesceceeesceseececesseseees

Table 3.3: SPACE matrix’s factors 0.0.0cccccccccccccsscseseseescssesvssecsevsceevsveceacseaees

Table 3.4: QSPM matrix for Ha Do Group Joint Stock Company

Business strategy Building of Ha Do Group JSC (2011 — 2015)

LIST OF FIGURES, GRAPHS

Figure 1.1: Model of 5 competitive ÍOrC€S c1 n1 1221112 ng 5 Figure 1.2 Main content of competitor analysis .ccccccccccsscscssseveseeveseeeeveseseeess 7

Figure 1.4 [E MtIX 2Q 2 21 1n TH HH HH HH nhe re 14

Figure 1.5: SPACE MAHIX 0 1211212 n1 HH HH HH Hung 15

Figure 1.6: QSPM Matrix c.ccccccccccccccccsecscevsevsesevevsevstsessessvetsvasvevsevessevseesees 17 Graph 2.1: Company’s organizing Structure .0.ccccccccecccscecscseeeesesseeveveesevees 21

Chart 2.1: Human resource quality of the company in three years 2008, 2009, 2010 37

Figure 3.1: SPACE matrix of Ha Do Group Joint Stock Company 5] Diagram 2.1: Labor structure of joint stock companies of Ha Do 36 Corporation (2010)

INTRODUCTION

1 Rationale of study

When our country's economic developed under the centralized planning mechanism, the business has produced as targets from top to bottom Accordingly, the product consumption has a fixed address Thus, firms do not care development strategy in the strict sense of the word

However, strategic issues have begun coming into existence and development of enterprises the market economy under the management of the State Businesses want to survive and develop in the volatile market and fierce competition in both domestic and abroad markets; they have to determine the long- term goals Ha Do joint stock group company is trading real estate, mainly in Hanoi,

Ho Chi Minh City and some neighboring provinces of Ha Tay, Over the years , the company has business strategic business objectives, analyzed current operations and the potential for business Furthermore, Ha Do Group Joint Stock Company also initially analyzes and forecasts the business environment in order to determine the chance for investment, production, consumption and anticipates the risks and threats from the external environment However, the building housing business strategy of Ha Do group joint stock Company still has many disadvantages for us to research and resolve Sales department of the company is not organized reasonably that leads to restriction of business performance Our country is on the first stage of WTO participation, the economic changes in market economy will affect more or less to the business

Therefore, it is necessary to assess situation correctly and find out effective business strategic solutions to make housing business performance effective This problem is essential for company in both the present and future Starting from the practical knowledge, our group has chosen the topic: "Building the business strategy

of Ha Do group joint stock Company (Hado group joint stock Company) for the period 2011-2015” to reach

CG Global Advanced Master of Business Administration Group 11 ~ X0410

Gnf6os) Business strategy Building of Ha Do Group JSC (2011 — 2015)

wv Objectives and scope of study

of the construction, transportation, irrigation but from the beginning, the company has identified the real estate business is a key field To make the company grow, the proper attention to real estate is indispensable Moreover, each field of the company has the separate independence This topic focuses on real estate business

3 Methodology

3.1 Analysis of data

The reports and documents of the company and its competitors Report of business performance in 2008 -2011, (Planning — Sales department) Statement of

Ha Do joint stock group company in 2010, (Finance — Accounting department)

Introduction of capacity profile in Ha Do group joint stock Company (Planning — Business department)

The report detailed about the financial ratios, such as asset structure, capital structure (Finance — Accounting department)

Materials of planning and direction for operation of the company since 2009,

GS Glohal Advanced Master of Business Adin station t`) ernie thls =S3NID

(planning department - Sales, Marketing department)

The document about provider partners sponsors, (Department of Business Planning, Marketing department)

Finding information on the press, television, the Internet Mostly on internet, with websites: http://hado.com.vn, stockbiz.vn

- Method of induction: the problems are identified from small details to general conclusion of problem to be analyzed

- Methods of analysis matrix:

SWOT Matrix is mainly used in developing strategies to build a set of strategies which can chosen from a combination of strengths and weaknesses in the business as well as opportunities and risks from external environment These have great impact on businesses

Besides some other matrixes are used: External factors evaluation matrix (EFE), internal factors evaluation matrix (IFE), SPACE matrix, main strategic

matrix, QSPM matrix The tools, "sensitivity of price / interest level of the

difference, matrix" The number of competitiveness and value of them which will be used in the formulation process In addition, our group also uses the competitive profile matrix CPM, internal and external matrix (IE) to analyze the company

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Gries Business strategy Building of Ha Do Group JSC (2011 — 2015)

CHAPTER 1 BASIC THEOTY OF BULDING BUSINESS STRATEGY OF BUSINESS IN

MARKET ECONOMY

1.1 DEFINITION OF BUSINESS STRATEGY

1.1.1 Definition of business strategy

Business strategy is the art of coordinating activities and managing them in order to reach long-term objective of organization Thereby, we can clarify the basic characteristic of strategy as follow:

Business strategy is built based on organization competitiveness to maximize mobilize and associate exploit and use resources (human resources, tangle and entangle asset), with a view to catch opportunities and advantages in competitiveness

Business is reflected in a continuous process from building to organizing, evaluating, testing, adapting strategy

1.1.2 Definition of strategic management

“Strategic management is the art and science of building, carrying out and

assessing all decisions to reach its target.”

According to Fred R David: “Strategic management is defined as art and science of formulating implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives As we can see from this definition Strategic management focus on the combination of administration, marketing, finance — accounting, production, research and development, information system, fields of businesses to gain organization’s achievement “

1.1.3 Duties of strategic management

The process of strategic management should be an orientation supporting organization to overcome the difficulties in business and reaching to a future by its

effort and ability

The process of strategic management should support the company to best adapt the long-term changes

Strategic management must collect the collective strengths so that company hecomes more active instead of positive in defining its future, helping the organization to take the lead and have major impact in its working environment

(instead of weak reaction)

1.2 CONTENT OF PROCESS OF BUILDING BUSINESS STRATEGY FOR

A BUSINESS

1.2.1 Strategic vision, mission, objectives

Strategic vision: including all objectives which need to in the future An enterprise, an administrator, who hope its company to grow in a new generation should have a wide vision That is the prediction of threats and opportunities in the future This will help the organization to avoid bad things, fine a suitable way as well as use chances for development

Strategic Mission: the function, duties, mission of organization is a statement which has a long term value on mission it helps in distinguishing among companies Such statements are considered business philosophy, business rules, and company’s belief

The statement clarifies the existence reason of the company According to Drucker, the statement of business mission is the answer for the question: “what is our business task? What should we do to reach the vision statement?”

In fact, vision term like mission and vision is used confusingly, company just states vision, not mission and vie versa, and some companies only state the aims

Strategic objectives: is the expected target of the enterprises It is the connection of business objectives on strategy, size, structure, the process of implementing over time In market economy, enterprise follows three major objective including existence, development, and diversity

1.2.2 Analysis the external environment

1.2.2.1] Analysis general environment - PEST Political environment (Political): such factors like government, law, policies have different impact on enterprises They can bring opportunities, threats

and even the risk of loss for business

Gries Business strategy Building of Ha Do Group JSC (2011 — 2015)

Economics environment (Economics) : reality of economy and orientation

in the future has an effect on the success and strategy of business major factors which many enterprises analyze are the different growth of economy in period of best development, recession, recovery, which affect the consumption indicators When the economy in the period of high growth, where will exist many opportunities for investment and enlargement of business activities In contrast, when the economy depresses that leads to cutting expenditure as well as increasing competitive messes

Socio-cultural environment (Socio-cultural): in period of middle and long term strategies, we can consider it is the greatest change High qualification of people

is the challenge to manufacturers

Technological environment (Technological): it is the most effective direct factor in business strategies of enterprises In fact, the world sees many changes which affect the disappearance of many fields and the arising of new prefect business fields

1.2.2.2 Analysis sector’s environment According to Michael Poster: each sector get pressure of 5 competitive forces:

Figure 1.1: Model of 5 competitive forces

Including these internal and external factors to the company, that can help to

C2 Global Advanced Kacter of E mơ lui ¬ 6 rowp lI- XU410

determine the characteristics and competitiveness in that business

There are five basic elements are: - competitors - buyers - suppliers - new potential competitors - replacing (product)

General impact of these factors is the acceptance to the company, in order to appropriate strategies to analyze each factor to have correct quality

Figure 1.2 Main content of competitor analysis

\

Competitor’s Response Profile

- Is the competitor satisfied with its current position?

- What likely moves or strategy shifts will the competitor make?

- Where is the competitor vulnerable?

- What will provoke the greatest and most

effective retaliation by the competitor?

Held about itself (competitor)

Both st oth strengths & ths &

Grid Business strategy Building of Ha Do Group JSC (2011 — 2015)

1.2.2.3 External Factor Evaluation Matrix (E FE)

PPE Matrix is used to synthesize, summarize and evaluate the major opportunities and threats from external environment which have impacts on the company EFE Matrix helps strategists evaluate the response of the company to opportunities and threats, giving assessment of external environment which creates advantages or difficulties to companies There are five steps to conduct an EFE Matrix:

- List 10- 20 factors of two groups:-opportunities and threats which play a decisive role to the organizational success or risk

- Assign a weight for each factor, ranging from 0.0 (not important) to 1.0 (very important) This classification shows the correlative important level of each factor to the success of the company Weights are identified based on comparison with competitors or expert method and group discussions Opportunities often receive higher level than threats The total weight must sum to 1.0

- Rate from | to 4 to each critical success factor to indicate how effectively the company’s current strategies respond to the factor In which, 4 shows superior response, 3 shows above average response, 2 shows average response, and | show poor response These ratings are identified based on the performance of the company Thus, the weights of the second step are based on the industry whereas the ratings of this step are based on business responses

- Multiply each factor’s weight by its rating to identify total weighted score

- Add the weighted score for each variable to identify the total weighted score

of the company (The highest possible total weighted score of a company is 4, the lowest possible total weighted score is 1, and the average total weighted score is 2.5)

The total weighted score of 4 shows that the company is flexibly responding to opportunities and threat from external environment It means that the current strategies of the company have effectively taken advantages of opportunities from external environment and successfully avoided the external threats On the contrary, the total weighted score of | shows that the company is poorly responding to external

impacts, and the organizational strategies did not effectively take advantages of opportunities as Well as avoid threats

1.2.2.4 Competitive Profile Matrix (CPM)

Competitive Profile Matrix is used to compare a company to its main competitors, based on the factors which have influences on competitive capacity of businesses in the industry Competitive Profile Matrix helps strategists to identify main competitors and their strengths & weaknesses In addition, this matrix also helps the company define its competitive advantages and disadvantages which need adjusting There are five steps to conduct Competitive Profile Matrix:

- Gather a list of 10 factors which have great influences on competitive capacity of companies in the industry

- Assign a weight for each factor, ranging from 0.0 (not important) to 1.0 (very important) The weight of each factor depends on the level of its influence on competitive capacity of companies in the industry The total weight must sum to 1.0

- Rate from | to 4 to each critical success factor to indicate how effectively the company’s current strategies respond to the factor In which, 4 shows superior response, 3 shows above average response, 2 shows average response, and | show poor response These ratings are defined by expert method based on the performance

o° the company

- Multiply each factor’s weight by its rating to identify total weighted score

- Add the weighted score for each variable to identify the total weighted score o° the company (The highest possible total weighted score of a company is 4, the Icwest possible total weighted score is 1, and the average total weighted score is 2.5)

1.2.3 Internal environmen analysis

1.2.3.1 Human resources

Human resources are the most important resources of an organization

Generally understanding, human resource management contains the activities of personnel recruitment, arrangement, training and appointment The objective of

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Gries Business strategy Building of Ha Do Group JSC (2011 — 2015)

strategic management of human resources is to develop an appropriate plan for personnel management in accordance with both the short-term and long-term strategic requirements of the company

1.2.3.2 Finance Financial potential is considered as the method to evaluate the best competitive position of the enterprise It is also the most important factor to attract investors In order to effectively conduct strategies, the firm needs to identify the strengths and weaknesses of organization finance The financial factors often have influences on changing current strategies and implementing plans The functions of finance contain the ability of capital mobilization; financial risk management and profitability

1.2.3.3 Administration Administration has five following basic functions:

- Planning consist of all the administrative activities regarding future

preparation The specific missions are forecasting, establishing objectives, exploring strategies, developing policies and setting goals

- Organizing contains all the administrative activities which build up the structure of the relationship between rights and responsibility The specific tasks are designing organizational structure; specializing and detailing job; unifying orders: coordinating, arranging, designing and analyzing tasks

- Encouraging contains all the efforts to orient human activities such as leading, connecting working teams; changing operation; delegating; improving the quality of work; satisfying jobs; meeting the demand; changing organization; raising staff and manager spirit

- Controlling related to management activities in order to ensure the appropriate performance conforming to the result which has been planned The specific tasks are examining quality, inspecting finance, selling products and inventory, analyzing the changes, etc

1.2.3.4 Property resources

Property and technical facilities is one of the important factors to production and business process It is the factor which ensures the condition for production and business operation is performed Every industry, every sector of production and business operation require appropriate systems of material and technical facilities It also emphasizes the compatibility between material and technical facilities with

characteristics of each industry, each sector

1.2.3.5 Research & Development resources Research and development activities includes developing new products ahead of competitors, improving product quality, controlling cost prices or reforming production process to reduce costs The quality of the company’s research and development efforts can help it maintain the leading position or lag it behind strong competitors in the industry

1.2.3.6 Trade mark First of all, trade mark is a term which is often used in marketing It is the image

of a production and business base (known as an enterprise) or an image of a type or a group of goods and services It also is a set of signs which is used to distinguish the goods or services of an enterprise to the goods and services of others These signs can

be letters, numbers, pictures, icons, colors, sound or a combination of those factors When we mention trade mark, we do not just consider it in the perspective of legal terms More importantly, in the condition of international economic integration of Vietnam, we need to consider it from the perspective of corporate management and marketing Therefore, trade mark is a term of broad meaning First of all, it is the image

of the goods (products) or the enterprise However, trade mark is not only an icon with name and logo Deep inside, trade mark contains the quality of products and services; corporate behaviors to customers and community; the effectiveness and truly convenience for consumers thanks to its goods and services This is how the trade mark leave customers with deep impression

1.2.3.7 Internal Factor Evaluation Matrix (IFE)

IFE Matrix is used to synthesize, summarize and evaluate basic strengths and

oe Global Advanced Master of Business Adnunstration II Group I~ X0-410

Gricod Business strategy Building of Ha Do Group JSC (2011 — 2015)

weaknesses of companies This matrix shows the strengths which need to promote and weaknesses which need improving to enhance its performance and competitive advantages

The process of conducting IFE matrix also contains 5 steps:

Step I: Gather a list of 10 - 20 factors which have great influences on the development of companies

Step 2: Assign a weight for each factor, ranging from 0.0 (not important) to 1.0 (very important) The weight of each factor depends on the level of its influence on the organizational success or failure in business activities Regardless of strengths or weaknesses, the considered factors which have the greatest influences on organizational activities will be classified at the highest level The total weight must sum to 1.0

Step 3: Rate each factor ranging from | to 4, the rating of each factor depends

on the strengths and weaknesses of companies In which, 4 shows major strength, 3

indicates minor strength, 2 shows minor weakness, and | show major weakness These

ratings are identified by expert method, based on the result of internal factor evaluation

Step 4: Multiply each factor’s weight by its rating to identify total weighted

score

Step 5: Add the weighted score for each variable to identify the total weighted score of the company

The highest possible total weighted score of a company is 4, the lowest possible

total weighted score is 1, and the average total weighted score is 2.5 The total

weighted score of 4 shows that the internal environment of the company is strong It also means that the current strategies of the company have taken effect, improving strengths and overcoming weaknesses from internal environment On the contrary, the total weighted score | shows that the company does not improve strengths as well as overcome internal weaknesses

1.3 TOOLS FOR STRATEGIES SELECTION

1.3.1 SWOT matrix

Strengths — weaknesses — opportunities — threats matrix an important integrated tool which can help the administrators develop of the following strategies: SO strategies use strengths from internal organization to take advantage

of external opportunities: WO strategies are used to improve internal weaknesses by taking advantage of external opportunities; ST Strategies use the organizational strengths to avoid or minimize the impacts of external threat; WT strategies are the defense strategy which are used to reduce internal weaknesses and avoid threats from external environment The integration of the key internal and external factors

is the most difficult task when conducting a SWOT matrix It requires the company

to an ability of judge, or it can not draw up the best integration

Figure 1.3 : SWOT Matrix

3 List all the threats of the | 3 Use strengths to take | 3 Overcome the weaknesses

3 List all the threats to the | 3 Take advantages of

company | strengths to avoid threats |

Gries Business strategy Building of Ha Do Group JSC (201 I - 2015)

1.3.2 Internal — External matrix(IE)

If matrix is conducted based upon: total weighted score of IFE matrix on the horizontal axis and total weighted score of EFE matrix on the vertical axis

IE composed of nine cells It can be arranged into 3 different types of strategies:

- The divisions that fall under cell I, II and IV are considered in growth and

1.3.3 SPACE Matrix

SPACE matrix show which strategy a company should choose: Aggressive,

C onservative, Defensive or Competitive This matrix’s axis mean that

Figure 1.5: SPACE matrix

In order to establish this matrix, we need to go through the following steps

- Step 1: Choose a set of variables to define competitive advantage (CA), industry strength (IS), environmental stability (ES), and financial strength (FS) Assign a numerical value ranging from +1 (worst) to +6 (best) to each of the variables of FS and IS dimensions; -1 (best) to -6 (worst) to each of the variables of

ES and CA dimensions

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Griccd) Business strategy Building of Ha Do Group JSC (2011 - 2015)

- Step 2: Compute an average score for FS, CA, IS

Step 3: Plot the average scores for FS, IS, ES and CA on the appropriate axis inthe SPACE matrix

- Step 4: Add the two scores on the X-axis and plot the resultant point on X Then do the same on X After that, plot the intersection of the new point on XY

- Step 5: Draw a directional vector from the origin of the SPACE matrix through the new intersection point This vector reveals the type of strategies recommended for the organization: aggressive, competitive, defensive or conservative

1.3.4 Quantitative Strategic Planning Matrix

This matrix allow companies to select business strategy QSPM uses the input information from the analysis all the above matrices, thereby helps the strategist to objectively decide which strategy in the feasible strategy is the most attractive and appropriate strategy to pursue in order to successfully achieve its goals QSPM conducting process contains 6 steps:

- List the firm’s key external Opportunities/Threats and the firm’s key internal Strengths/Weaknesses at the column (1) of QSPM These factors can be directly collected from EFE and IFE matrix

- In column (2) assign weights ranging from 0.0 (not important) to 1.0 (very important) to each factor The total weight of strengths and weaknesses must sum to 1.0

- Examine SWOT, BCG, SPACE matrix and define the alternative Strategies

which the organization need to consider before implementing, Write down these strategies on the first cell of QSPM matrix Gather specific strategies into different

groups

- Calculate the Attractiveness Score (A column): Attractive Score is 1 = not attractive, 2 = somewhat attractive, 3 = reasonably attractive, 4 = highly attractive Attractive Score shows the relative attractiveness of each strategy compared to different strategies Calculate the total attractiveness score of each strategy according to each critical success factors in column (1) by multiplying rating with

c3 Global Advanced Master of Business Admurstraton 16 Group IT ~ X0410

attractiveness score in each cell (writing down in B)

~ Calculate the Total Attractiveness Score of each strategy by adding the attractiveness scores (Consider all the appropriate internal and external factors affecting the strategy decision) The higher the Total Attractiveness Score is, the worthier the strategy is

| (2) Strategy | Strategy2 | Strategy 3

| AS | TAS! AS | TAS| AS | TAS

Gnl6o) Business strategy Building of Ha Do Group JSC (2011 — 2015)

affirming the appropriate business orientation during the period of industrialization

and modernization of Vietnam

After 20-year development, Ha Do Group joint-stock company has successfully developed into a multi-industry company and being recognized as a State enterprise of class I The organization has nearly 400 employees In which, employees with university and college level accounted for 65%, post-graduate level accounted for about 5%, intermediate and primary level made up for 30%

The formation and development phases of Ha Do group joint stock Company

In 1990: HDG was formerly known as Construction Firm of the institute of military technique under the Ministry of Defense It was founded in 09/10/1990 by

Mr Nguyen Trong - Director The enterprise's mission is to meet the objective of studying military science, serve the economy, improve living standard of the staff, and contribute to improving the process of national reform

In 1992: In term of the demand of development, Ha Do Construction Company was established under Decision 75B/QD/QP on 12/12/1992 and switched

3 Global Advanced Master of Busi A hon 18 Group IT — X0410

In 2004: Implementing equitization process of enterprises, the minister of Defense issued Decision No 163/2004/QD-BQP on 09/12/2004 on the transformation of Ha Do Company into Hado Joint Stock Company towards the corporation trend It can be considered as the basis moving the company to a new period of development, confirming that Ha Do Joint Stock Company is strong and it has appropriate business strategies conformed to the period of industrialization - modernization of Vietnam

In 2005: After the completion of equitization process, the company decided

to switch into the operation model of parent - Son Company The company has implemented the process of transferring the subsidiary firms into joint stock companies, in which Ha Do Joint Stock Company holds 0% of shares The firms include Ha Do Joint Stock Company 1, Company Ha Do 2, Ha Do Joint Stock Company 4 Also in 2005, the Company established Za Hung Joint Stock Company, constructing Za Hung hydro power plant in Dong Giang district, Quang Nam;

In 2008 Ha Do Joint Stock Company has continuously moved three remaining firms into joint stock companies, including Ha Do Joint Stock Company

3, Ha Do Joint Stock Company 5, Ha Do Construction Consulting Company,

established Ha Do Commercial Joint Stock Company and transferred the

construction project of Nam Pong hydro power plant in Quy Chau, Nghe An Province to Za Hung Joint Stock Company

By May 2008, Ha Do Joint Stock Company has owned 8 member firms

- Ha Do Joint Stock Company |

- Ha Do Joint Stock Company 2

- Ha Do Joint Stock Company 3

Griccd) Business strategy Building of Ha Do Group JSC (2011 — 2015)

- Ha Do Joint Stock Company 4

- Ha Do Joint Stock Company 5

- Ha Do Construction Consulting Company

- Joint-stock commercial Ha Do

- Za Hung Joint Stock Company

In 2009: Officially received the certificate of Management System of Standard ISO 9001 - 2008 of WQA international organization

In 2010: Officially listed on stock exchanges in Ho Chi Minh City.(HOSE) with the HDG stocks: company officially changed its name to Ha Do Group (referred to as Ha Do Group): establishment of the Investment Company International City and Hanoi representative office in Vieng chan - Lao People's Democratic Republic done Noong Tha urban project in Vieng Chan - Lao People's Democratic Republic

In 2011: Establishing of Khanh Ha Investment Joint Stock Company to implement the projects of Bao Dai luxury resorts and Hon Thi islands in Nha Trang, Khanh Hoa, establishing Ha Phu Joint Stock Company and Thanh Thuy Mineral Water Joint Stock Company to implement the projects of Thanh Thuy luxury resorts with hot mineral spring in Thanh Thuy district, Phu Tho province

2.1.2 The company’s functions and mission:

Successfully implementing the registered business sectors

2.1.2.1 Real estate Doing business in the field of real estate business

Investing in infrastructure development and apartment building

Providing real estate services

Providing eco-services such as hotels and restaurants

2.1.2.2 Construction Implementing construction of industry, civil and transportation, etc

Installing, repairing machinery and technical equipment, automatic control systems, refrigeration, civil power, hydro power, etc

lò me I 20 Group i 10410

Installing computer systems, network, communications and telecommunication Producing and trading construction materials, exploiting quarry

Producing and trading computer components, communication and telecommunication equipment

2.1.2.3 Industrial production Manufacturing and trading electricity, machinery and equipment;

Designing, producing mechanical equipment: industrial machinery and equipment; providing investment -advice, transfer of technology and related scientific and technical services:

Producing and trading of construction materials, exploiting quarry;

Producing; trading; constructing; installing; maintaining systems of tracking, fire-fighting and preventing, intrusion preventing and anti-lightning

cameras;

Producing, trading computer components, communication and telecommunication equipment

2.1.2.4 Consulting service Construction Consulting: Construction inspection; project conduction; construction and investment management; bidding consultancy, construction quality inspection

Consulting and supervising the implementation of civil and industrial construction;

Designing and planning the overall surface of the civil and industrial construction;

Designing the overall surface, architecture, interior and exterior decorations for the civil, industrial, cultural, technical construction in urban infrastructure:

Design the construction of roads an airport:

Grigcd Business strategy Building of Ha Do Group JSC (2011 — 2015)

i EXECUTIVE BOARD

Department of Finance- of Planning Technology of of Department

2.1.4 Company’s current position

Favorable location of land: Ha Do Group (HDG) was formerly an enterprise belonging to National Defense Ministry HDG had a great advantage of exploiting the land resources of the Ministry which scatters in many provinces, especially in

Ho Chi Minh and Hanoi city Currently, HDG is the investor of some projects in these two economic centers Regarding to the total land, HDG was provided about 2

CG Global Advanced Master t`) tO Group 11 — V0410

million square meters to develop new urban areas all over the country HDG has been developing the technical infrastructure over | million square meters and is on the process of finishing investment documents for approximately | million square meters left HDG has the outstanding advantage which not any real estate company

can get

Experience in investing in urban area and skyscraper construction: With 15- year experience in investing in real estate, HDG has succeed in many projects of urban construction in Hanoi and Ho Chi Minh city such as housing prejects in Dich Vong, My Dinh, X3 housing residence in Tu Liem, Trung Hoa Nhan Chinh project, 'hach My Loi project in District 2 of Ho Chi Minh city These experiences will help HGD carry out investment projects favorably in the future

Quality of products: HDG’s product quality has been highly evaluated by the Ministry of Construction and customers Buildings constructed by HDG meet the quality standards, nice designs and become customers’ favorite

Management capacity: The Company has the engineers, staff with extensive experiences The regular cooperation with foreign expert consultants in terms of construction and real estate business also helps the company’s staff have the professional style, enhance the technical skills

Financial ability: The financial ability brings the great competitive advantage for a real estate company HDG currently has a sound financial system with the leverage

at 0%, the loans are mainly covered by the prepayment of the customers Moreover, the regular cooperation and credibility between HDG and Vietnam as well as foreign credit institutes create favorable conditions for the company to mobilize the capital for medium and long term projects

2.1.5 HDG’s position in real estate sector

With the 15-year experience in conducting business in real estate field, HDG

is one of the prestige enterprises and has the competitive advantage and effective business operations in the construction field In the future, HDG will implement the strategy of shifting dramatically to operating the business of real estate for rent

Gries Business strategy Building of Ha Do Group JSC (2011 — 2015)

when the skyscraper and hotel projects are accomplished

2.2 External environment analysis

2.2.1 PEST analysis

2.2.1.1 Political and legal environment Over a long period in Vietnam, real estate business activities were not seemingly mentioned in law In that period, the economy is administrated by the centralized-planned mechanism in which the State became a center for direct administration and regulation to all the business activities as well as the product distribution The enterprises did not have the autonomy to choose the business field and develop the business plans Each business process was performed following the

“directing stick” of the State The comprehensive reform process has paved the way

of the real business for all types of enterprise including investing and real estate enterprises The legal system includes nearly all the normative documents needed

for all production, investment, business activities including the real estate business

This favorable policy has helped HDG to operate it own real estate business

The market economy has created favorable conditions to develop the real estate business activities In order to complete uniformly the market institutions, the State has built uniformly and managed the “input” market including: capital, labor, real estate and science-technology markets The state has also built and completed the legal framework of the market economy (including legal system for real estate business) to adjust and direct the market activities The real estate business law building was marked by the emergence of the Land Law 1993 with new regulations such as empowering the land use right to the households, persons with long run settlement; transferring the land use right, etc A series of laws relating to real estate business were in turn issued, for example: Tax Law on Transfer of Land Use rights 1994 (amended and supplemented in 1999): Civil Code 1995 (amended and supplemented in 2005); Law on Construction 2003; Investment Law 2005: Enterprise Law 2005; Commercial Law 2005; Housing Law 2005; especially the Real Estate Law issued in 2006 directly regulates the real estate business activities

2.2.1.2 Economic environment analysis:

Macroeconomic indicators used to evaluate the economic development of a country include GDP growth, inflation, interest rate, foreign exchanges, etc The fluctuations of these indicators often have a systematic impact on the economic participants

Vietnam’s economic growth rate:

Table 2.1: Vietnam’s economic growth rate over several years Year 2000 |2001 |2002 |2003 |2004 |2005 |2006 |2007 |2008 |2009 | 2010 Gross Domestic

402 | 416 | 441 | 492 | 561 | 642 | 730 | 843 |1.052|1.064| 1.168 (USD)

GDP growth rate

(% comparing to} 6,8 | 6,9 | 7,1 | 7,3 | 7,8 | 84 | 8,2 | 8.5 | 62 | 53 6,7

previous years)

(Source: General Statistics Office of Vietnam)

The economic growth rate of Vietnam over the past 10 years is relatively high, GDP in 2010 (actual price) increase 3.2 times comparing to 2000 The economic growth affects the Real Estate sector in various aspects:

- Other manufacturing activities and services grow by the same rate with the overall economy of Vietnam That leads to the increasingly high demands for office houses, residence housing On the other hand, the development of the Banking sector creates favorable conditions in terms of mobilizing capital for housing investment and purchase As a result, the Real Estate business also develops

The increase in personal income leads to the increasing demand for selling,

Grigad Business strategy Building of Ha Do Group JSC (2011 ~ 2015)

purchasing and using housing, offices

¢ Inflation and exchange rate:

- Inflation is on the upward trend: 2010's inflation rate was 11,75%, 2009°’s was 6,88%, 2008's was 22%

- The exchange rate grows dramatically: The increase by 10,9% of exchange rate in 2010 put a negative impact on the business activities of many enterprises, including HDG

- - For HDG ~ a corporate operating mainly on real estate sector, most of its demand for foreign currency only comes from the payment activities towards the foreign contractors Because these activities occur irregularly, HDG can cut the risk

by establishing specific plans so that it can choose the appropriate time to make payment activity with the foreign contractors

2.2.1.3 Socio-cultural environment

The socio-cultural factors have great affect on the real estate enterprises

Hanoi and Ho Chi Minh City have high population growth rate According to the data of General Statistics Office, Hanoi’s population in 2010 was estimated to be 19,77 million of people with the population density of 1939 people/ square kilometer Ho Chi Minh city’s was 7,23 million of people with the population density of 3458 people/ square kilometer And the mechanical growth of population

in these two cities remains high annually which leads to high pressure on the housing demand, education and health service in Vietnam This creates a chance for

HDG

2.2.1.4 Technological environment Regarding the global economic integration trend among countries, Vietnam has grabbed the chance to learn and apply new technologies in construction so that

it can shorten the construction time, improve the quality and reduce the constructing cost The application of new technologies such as top-down technology in many construction works help to shorten the construction time, the approaches of construction on basement, diaphragm wall, foundation, technology for corrosion

r3 Global Advanced Master of Business Adannistratien 26 Group I~ X0410