G1_00290 ĐỀ TÀI: CHIẾN LƯỢC PHÁT TRIỂN CỦA CÔNG TY CỔ PHẦN DU LỊCH ĐỒNG THÁP TỪ NAY ĐẾN NĂM 2020 TOPIC: DEVELOPMENT STRATEGY FOR DONGTHAP TOURIST JOINT STOCK COMPANY FROM NOW TO 2020

G1_00290 ĐỀ TÀI: CHIẾN LƯỢC PHÁT TRIỂN CỦA CÔNG TY CỔ PHẦN DU LỊCH ĐỒNG THÁP TỪ NAY ĐẾN NĂM 2020 TOPIC: DEVELOPMENT STRATEGY FOR DONGTHAP TOURIST JOINT STOCK COMPANY FROM NOW TO 2020

Huynh Tan Gia Thanh

On behalf of the whole member of the group 8, we would like to

send to teachers the deepest gratitude Our group 8 has studied

the lectures and documents of the Teachers and have researches

additionally a lot of different practical document resources to

write the capstone Thank Dong Thap Tourist Joint Stock

Company's board of directors for being enthusiatic for providing

data and documents for us to complete this capstone

We hereby commit this is capstone written by our group and this

is first time for publishing

CHAPTER |: THEORETICAL BASIS OF STRATEGIC MANAGEMENT

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I.6 2 Composition of services en 53

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I.6 3 Characteristics of' Vietnam tourism services and tourism s4

CHAPTER 2: EXISTING SITUATION OF STRATEGY MANAGEMENT IN DONG THAP TOURIST JOINT STOCK COMPANY -à- 536 2.1 The situation of organization, structure and formation and

development history of Dong Thap Tourist Joint Stock Company 2.1.1 Foundation history and development of the company 56

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CHAPTER 3: BUILDING DEVELOPMENT STRATEGY FOR DONG THAP TOURIST JOINT STOCK COMPANY FROM NOW TO 2020 0068 83 3.1 Building development strategy for Dong Thap Tourist JSC from now

3.2 Development orientation of Dong Thap Tourist JS <5<5< <<

3.2.2 Management strategies of the company from now to 2020 85

3.2.2.1 Proposal of management and business strategies for Dong Thap Tourist JSC based on analyzed reality of EFE and [FE matrices 85

32 22 Competitive profile matrix sö)EE6ýf44603509560348i4066446x39466Eg945v30gaE 87 3.2.2.3 Strategic plan onentation for Dong Thap Tourism Joint Stock Company based on SWOT and TOWS analysis 87

3.2.2.4 Developing business strategies for the company based on QSPM matrix

: Strategic Management

3.2.2.5 Building the company's organizational structure in accordance with joint

stock company in the market economy 95

3.1.2.6 Stratepies to build a professional travel staffteam 97

3.2.2.7 Differentiation strategy for products and types of tourist service 97

3.2.2.8 Diversification strategy for the tourist business products 07

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3.3.2.3 Proposal of brand construction, logo and slogan for the company 104

3.3.3 Fimancial solutions hố ẽẽẽẽẽẽ adjHĂẰAñAĂŒƠ: 105

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3.4.1 Recommendations to the province and the relevant departments of Dong Thap

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INTRODUCTION

Tourism business industry in the today era is considered green industry, contributing to significant revenue for the countries and as the motivation for socio- economic development for countries, especially the countries with the advantages of tourism development, but few resources and minerals In the development strategy

of Vietnam tourism by 2020 tourism will focus on the pressing issues, namely:

- The development and planning implementation organization, improving the management efficiency of State over tourism and boosting the tourism product development and upgrading tourism infrastructure development of the provinces and facilities for tourism, focusing on the protection of natural resources and environmental hygiene; standardizing and improving the quality of human resources

for tourism; market development, tourism advertisement and promotion, community

education on tourism development and tourism resource protection

- Vietnam's tourism sector is facing problems: How to attract visitors, create

the image, the brand of tourism? Need to focus on planning and construction investment for infrastructure of tourist areas, spots, building cultural habit and tourist civilization like?

Tourist development must be linked to the development of tourism services,

attracting and creating jobs for many workers in the locality Besides, for

sustainable development tourism must have the participation of the State, the people Strata, and simultaneously the levels and industries need to have close and

synchronic coordination with the tourist industry in ensuring environmental

hygiene, security order, community awareness education on development and protection for tourist resources

Natural landscape, cool climate, ecological forests are often concentrated in

the Vietnam southern delta provinces, namely the provinces of Mekong Delta It has

a rich ecosystem, much rainfall, intertwined rivers and canals system, convenient water and road transportation combined with the cool climate all year round, four seasons have fruits, humans bearing the characteristics of Northern farmers Nam

have created a very own identity creating a rich and attractive potential for foreign

and domestic travelers increasingly

Dong Thap province is a province in the Mekong Delta, as the province has

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potential for tourism because the external conditions of climate, scenery, primary ecological forests, Dong Thap also owns the cultural relics which are associated with the struggling history of the country Besides, the major cultivated crops are rice and indigo bringing very distinctive landscape tor Dong Thap These distinctive

features has become potentials to diverse forms such as: ecotourism, travel to visit the old battlefield, cultural tourism and spirituality, festivals, sport tourism, resort,

Exploiting and promoting the advantages of tourism, in the past years, Dong Thap province has issued the Resolution, the master plan for tourism development,

while there are many mechanisms and policies to create favorable conditions to

attract investment for the tourism

In fact, it also reveals the limitations in the planning work, especially it has not

correctly predicted primary development targets and needs of the Dong Thap tourism in the construction and implementation organization of tourism development project by 2020 Because of the necessity and urgency of outlining the tourism development strategy for Dong Thap province, our group has bravely

selected the topic: DEVELOPMENT STRATEGY OF DONG THAP TOURIST JOINT STOCK COMPANY FROM NOW TO 2020 as graduation capstone

1 Necessity of the project

Along with the rapid development of economy, Vietnam has quickly

integrated into the international market GDP growth rate is increasingly high, the

fields of import, export and services have developed with amazing speed; international tourists to Vietnam increases fast each year, reaches millions, bringing Vietnam huge income Unfortunately, along with the development of tourism — Vietnam’s green tourist industry has developed almost spontaneously, everyone make tourist by himself and it hasn’t had a long-term and comprehensive development strategy in order to attract domestic and foreign tourists So our group sees the necessity and importance of the tourist topic, to guide strategy development for Dong Thap Tourist Joint Stock Company to contribute to the development of Dong Thap province in particular and the country in general

2 Objectives of the project

This capstone is not apart from purpose to clarify the theory on tourism

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development, tourism strategy orientation for a Vietnam business on_ the international integration and competition market

3 Objects and scopes of the project

The primary object which the capstone is focused on the research 1s Dong Thap Tourism JSC In addition, the thesis also refers to the tourism situation the world and Vietnam tourism development prospects trom now to 2020

4 Methodology of the project

The principal method used to study the topic is dialectical materialism methodology, experienced statistical methodology, method of analysis - synthesis and interpretative - inductive methods; method of comparison - collation, logical method, general described method

5 The layout of the thesis

In addition to the introduction and conclusion, the layout of the thesis consists

of three chapters:

CHAPTER | THEORETICAL BASIS OF STRATEGY MANAGEMENT

FOR BUSINESS CHAPTER 2 EXISTING SITUATION OF MANAGEMENT STRATEGY

IN DONG THAP TOURISM JOINT STOCK COMPANY CHAPTER 3 SOLUTIONS ON MANAGEMENT STRATEGY FOR DONG

THAP TOURISM JOINT STOCK COMPANY FROM NOW

1.1 Theoretical basis on strategy management

/.1.1 Concept of strategic management

Business strategy management is the general activities of planning, implementation and test, adjusting business strategy which occurs repeatedly follow

or not follow the cycle time to ensure that businesses always take advantage of every opportunity, chance as well as limitation or eliminating the threats and traps

on the way to implement their goals

Strategic management helps the companies clearly orient their strategic vision, mission (task) and goals Indeed, to strategic management is effective, organizations

must manage information systems and business environment Pursuant to this,

managers can predict the trends of changes of business environment and identify where the business needs to go in the future, what needs to be done to achieve long results

The perception for desired results and future goals helps managers as well employees understand what needs to be done to achieve success, creating mutual understanding between managers and employees and working together to achieve the desires Hence, this will encourage both above objectives in achieving short-

term achievements, to improve better long-interests of the enterprise

1.1.2 The importance of business strategy management

Strategic management helps companies achieve higher efficiency than

businesses that do not apply strategic management The research works have shown that which businesses use strategic management, the results are much better than results they achieved earlier and the results of the businesses do not use strategic

management Of course, that does not mean that businesses use strategic

management, will not sometimes encounter the insolvable problems, may even go bankrupt but we can confirm: Applying strategic management will reduce the risks

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of facing serious problems and increasing the ability of businesses tn taking advantage of opportunities in the competition and globalization environment as today

Besides, the business strategy management will give us to see clearly goals, and make efforts and implement to help enterprises proactively adjust strategies in accordance with the business environment, the practical situation Enterprises will

actively invest in product development, services, business units, knowing the strengths,

opportunities to utilize and promote, Knowing the risks and weaknesses to overcome in

order to build businesses as more powerful on the market, increasing competitiveness

of enterprises

1.2 Strategic planning and implementation process

/.2.1 Strategic planning process

As we know: Corporate management experts have to master the process of planning and implementing strategies to be active in planning strategies and adjusting the strategy Strategic planning process is modeled by the following diagram:

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MODEL OF STRATEGIC MANAGEMENT PROCESS

In the process of strategic management, people often pay attention to three key stages including: strategic formation, strategic implementation and testing, strategic evaluation, in which:

Strategy formation: Is the process of establishing business tasks, performing research investigations to determine the internal strengths, weaknesses and external opportunities and threats, setting long-term goals, construction and selection of alternative strategies Three basic operations during the formation of this strategy

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—— —— ¬=———~

Research implementation: related to the collection and processing of information on markets and business sectors of the business to identify key strengths and basic weaknesses in the business field Decisions in the business strategy formation stage will connect the enterprise with the products, markets, resources and technology

Intuition harmony: there are many techniques of strategic management which allow strategists integrate intuition with analysis in making and selecting feasible alternative strategies

Decision-making: because no organization has unlimited resources managers must make decisions in connection with the selection of which alternative strategies

will benefit the company most The strategic decisions have lasting or better or worse impact for the business The strategists should have far vision, wide looking

to understand the ramifications of the formation of decisions

1.2.2 Strategic implementation

Strategic implementation: Is the action phase of strategic management The basic operations in this period are to set short term goals, offer policies and distribution of resources The strategy implementation phase is often considered the most difficult stage in the process of strategic management The strategy implementation requires discipline, dedication and sacrifice of all the members in the business At this time, the role of manager is ver big, showing leadership art, ability to motivate staff to implement the strategy to achieve success

The strategic implementation includes financial policies, programs and

cultural environment, preferential policies, reward encouragement for employees The challenge of the strategic implementation 1s how to stimulate the managers and staff throughout the enterprise to be utterly dedicated to work with the pride and

enthusiasm towards achieving the ultimate goal which the enterprise has set out Strategic testing and evaluation: The final stage of strategic management 1s to test and evaluate strategies Strategic testing and evaluation 1s to monitor the results

of establishment and strategy implementation operations This is essential work because the current gained results do not necessarily ensure success in the future

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The main activities of this phase are:

+ Reviewing the factors is the basis for the current strategies

+ Measuring obtained results

+ Performing necessary adjustment activities

Although making good strategic decisions is the main responsibility of the

manager, both managers and executive staff also have to contact with the activities

of strategic setting up, implementing and testing and evaluation That participation

is crucial factor for the success of the company, simultaneously also to achieve adherence for the necessary changes

1.3 Strategy classification

Want to strategic management of any business, we first must understand what

strategy is, classifying, applying them in practice First of all, the term Strategy originates from the field of military with the significance is the science of planning and controlling military operations A company's strategy includes objectives,

guarantees on resources to achieve key policies and objectives in fact, it exists a

wide variety of strategies, but we only focus on studying some key following strategies of the company, those are the concentration strategy, the strategy of vertical integration, diversification strategy

COMPANY STRATEGY Phase |: Strategy focuses on a single business activity on the domestic market (to optimize revenue, the company has to lower costs, specialize products and focusing on target segment) Product, market, business line, size and technology

Phase 2: Vertical integration strategy to create competitive advantage in main

business activities (the company has been strong, can expand the market)

Phase 3: Diversification strategy to invest profit in many different industries

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CONCENETERATION Products \larket Business Sector fechnologs

Market Penetration Existing Existing Existing — Existing Existing

Development

New product New Existing Existing — Existing Existing developing

(Summary table of the concentration strategy)

1.3.2 Vertical integration strategies

When researching the company's strategy, we need to master the strategies of vertical integration to put into practice, namely:

1 Backward vertical integration growth: the Company itself manages and

produces fabrics and materials to avoid pressure from suppliers

2 Forward vertical integration growth (Forward): the Company itself manages

and organizes its distribution network

3 Full integration, when the company stands out managing the input and output, even the distribution and retail

4 Taper integration means the company only concerns a portion of the input and output

5 Internal integration - setting up subsidiaries

6 External integration - taking over or acquiring other company

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2 Restructuring (Acquisition of businesses)

3 Transferring skills - skills transfer is to utilize their skills as acquiring

a business

4 Sharing functions - sharing function, sharing resources, means of

production, distribution, advertising

In the diversification growth strategy of the company, existing correlation or connection diversification; non-correlation or non-connection diversification

Besides, four diversification traps are needed to grasp:

+ Diversifying in order to isolate the risk;

+ Diversifying for growth;

+ High-levelled diversification;

+ Miscalculation of benefits and costs

1.4 Specific strategy in the view of Michael Porter

1.4.1 The importance of the principle 3C

For manufacturing, trading and service enterprises in the market, it is essential

to master the principle 3C, those are:

| Existing resources and potential of the business (Company it self)

to _ Needs and dynamics of the customer (Customers)

ae _ The competitors in the market (Competitors)

Thus to plan strategy for a business we must necessarily consider the

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competition model of Michael Porter

1.4.2 Michael Porter's competitive strategy

In the view of Michael Porter, it exists five competition forces within the industry, namely:

| Entry threats of potential entrants,

2 Rivalry among existing firms:

3 Bargaining power of buyers:

4 Bargaining power of sellers:

5 Threat of substitute products

- The stronger the competitive forces, the more limiting the ability for existing companies to raise prices and get higher profits

- Strong competitive forces can be seen as a threat, from which would lower profits

- The power of the five forces can change over time, as the industry’s conditions change

- Should be aware of the opportunities and threats from changes of five forces

will bring to construct adaptive strategies

+ Competitors:

As the people who share customer quantity of each other Direct competitors are rivals who meet customer needs in the same industry, one way Competitors compete indirectly with different forms The intensity of competition depends on:

the number of competitors; growth speed of the industry; fixed costs in investment, industry transfer costs; uniformity or differentiation of the products, the diversity of

the sector Managers must recognize all the competitors and identify their advantages, disadvantages, capabilities, games, threats, goals and _ strategies

Collecting and evaluating information about competitors is crucial to be able to

draft successful strategy Identifying the major competitors need to know:

* What competitors want to achieve

* What competitors are doing and can do

* Opponents are satisfied with the current position or not

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* How the ability of opponents shifts and changes the strategic direction

* The weakness of the opponents

* What makes the opponent retaliate strongest and most effectively

+ Customers:

Customers are objects that enterprises serve, and can consider the customers are ones who decide the existence and development of the company Loyal customers are an advantage of the Company The Customers’ loyalty 1s created by the prestige and brand of the company, as meeting satisfaction for customer needs and expectations that the companies wiil serve them better Other issue related to customers is with their advantages they can put their pressure on the sellers by

their bargaining ability and the choice of their suppliers, can make the profits of the

industry decrease by forcing down prices or demanding higher quality and must do more service works, the high bargaining pressure of customer causes difficulties for businesses Signs appear bargaining pressure:

* The buyer claims discount

* Requiring the conditions on higher service, quality

Causes make bargaining pressure of customers increase:

* The more number of selling people, less customers

* Products are not distinct and are basic products

* Customers have full information

* In the case, customers have the ability to integrate backwards

Enterprises should establish existing and future customer classification table The information obtained from this classification table is an important orientation

basis for the formulation of plans, especially direct plans related to marketing The

main variables need to consider are geographic, demographic, psychological, + Suppliers:

As the organizations or individuals who ensure supply of essential factors for the enterprise to produce goods or services The change in suppliers has great influence to production and business activities of enterprises Suppliers can exert a Strong pressure for the operation of the businesses Theretore enterprises cannot

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ignore the research on suppliers in the environmental research process Conditions

increase provision pressure:

* There are too few suppliers

* The input products have high difference and bring their own characteristics

* Buying companies are not important for providers

* When the supplier can integrate forward

* Labour resource: is also a key component in the competitive environment of business The ability to attract and retain qualified employees is a precondition for ensuring successful business The main factors need to evaluate including the level

of training and qualification of workers, the relative attractiveness of the business

with the status as the user of labor and popular wages

Potential rivals:

As the not important present rivals, but will have competitive ability in the future Competitive ability of potential competitors is assessed by the notion of barrier preventing the entry into the business line This barrier implies the meaning

a business needs to be at great expense to be able to participate in a certain business line The higher the costs, the higher the barrier, and vice versa For new rivals, joining the business in the sector can be factor that reduces the profits of the business because they put into operation of new production capacities, with the desire to gain market share and resources needed

Substitute products:

As products which have the utility, functionality, lower cost than existing

products Most new substitute products are the result of the technological explosion Due to appearance later utility, price is better This can make the old

company fall into the loss of profits, cost deficit, often associated with potential competitors and entry pressure Enterprises should pay attention and gain resources

to develop or apply new technologies to their strategies

/.4.3 Analysis of the model of 5 competitive forces Michael Porter's in the field

of tourism

_——— ————— = = == = = = = == ——————

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or services

Substitutes |

1 Competitive pressures of the provider (bargaining power of the seller): The

number and size of suppliers in the tourism industry decides to the industry competition pressures In the tourism business operation, the large suppliers are Tourism Companies with domestic and international brands will be ready to launch tourism products and services of good quality, cheap price, diversfied travel products and having a strong connection among companies in the supply chain such as transport, restaurants, hotels, organization of tours Also, they have a policy

of marketing, promotion which are ready to compete with small companies and

normally, large companies dominates

2 Competitive pressure from customers (bargaining power of buyers): Customers are the Travel Agents and direct customers who use travel services, they decide to purchase behavior, so they cause direct pressure to the tourism business enterprise through price, quality of travel services

3 Competitive pressure trom potential rivals: Tourism 1s an industry which ts

always attractive to potential rivals as that is less capital industry and high profits,

no need of investment much in infrastructure, easily attracting customers , being encouraged business by the countries and very few barriers so entry of the tourism

Is easy

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4 Competitive pressure from substitutes’ because of the unique tourism 1s

5 Competitive pressures within the industry: Companies who are trading in the industry market that will compete directly with each other, with the characteristics of the tourism industry are fragmented, no business has ability of domination monopoly for the market because the toursi, markets are diversified on products and services, spread to many regions, countries Companies are ready to enter the industry due to low capital characteristics, high returns, easy to find and develop market share, on the other hand barriers on withdrawing from the sector are very large due to its commitments to employees, business strategies, so competitive pressure in the tourism sector is very high

Core competitive strength of a tourism company depends on two main

features follows:

First of all, the largest the tourism company has market share, the higher competitive and profit position, as major market share, customers tend to be more loyal and have more solutions of travel service business

Besides, the uniqueness and advantages easily make the tourism company Stand out, the company’s easy to serve customer, easy to create the sharpest competitive advantage Of course, the relative competitive position of the company will be stronger and profitability of the overall strategy will be higher as long as competitors has not caught up the company in expertise capacity in developing new products, in marketing skills, in the prestige of the brand

Clearly, two features are just mentioned in the competition will make the company more and more develop: The outstanding ability makes the tourism product more unique, boosting demand for travel products increases and as having the large market

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share, the tourtsm company has great strength to invest in the development and

completion of outstanding abilities.1.4.3 Analysis of the model of 5 competitive forces Michael Porter's in the field of tourism

1 Competitive pressures of the provider (bargaining power of the seller): The

number and size of suppliers in the tourism industry decides to the industry

competition pressures In the tourism business operation, the large suppliers are

Tourism Companies with domestic and international brands will be ready to launch

tourism products and services of good quality, cheap price, diversfied travel products and having a strong connection among companies in the supply chain such as transport, restaurants, hotels, organization of tours Also, they have a policy

of marketing, promotion which are ready to compete with small companies and normally, large companies dominates

2 Competitive pressure from customers (bargaining power of buyers):

Customers are the Travel Agents and direct customers who use travel services, they

decide to purchase behavior, so they cause direct pressure to the tourism business enterprise through price, quality of travel services

3 Competitive pressure from potential rivals: Tourism is an industry which is always attractive to potential rivals as that is less capital industry and high profits,

no need of investment much in infrastructure, easily attracting customers , being encouraged business by the countries and very few barriers so entry of the tourism

Is €asy

4 Competitive pressure from substitutes: because of the unique tourism is

that customers always want to explore new services, new forms of tourism so it

always has the replacement pressure in the tourism product To want to meet customer demand increasingly due to the increasing quality of life, the tourism business companies are always pressured by the alternative products so the companies always improve the quality of services, searching new products and types of services

5 Competitive pressures within the industry: Companies who are trading in the industry market that will compete directly with each other, with the characteristics of the tourism industry are fragmented, no business has ability of

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domination monopoly for the market because the tours!, markets are diversified on

products and services spread to many regions, countries Companies are ready to enter the industry due to low capital characteristics, high returns, easy to find and develop market share on the other hand barriers on withdrawing from the sector are very large due to its commitments to employees, business strategies, so competitive pressure in the tourism sector ts very high

Core competitive strength of a tourism company depends on two main features follows:

First of all, the largest the tourism company has market share, the higher competitive and profit position, as major market share, customers tend to be more loyal and have more solutions of travel service business

Besides, the uniqueness and advantages easily make the tourism company stand out, the company’s easy to serve customer, easy to create the sharpest competitive advantage Of course, the relative competitive position of the company will be stronger and profitability of the overall strategy will be higher as long as competitors has not caught up the company in expertise capacity in developing new products, in marketing skills, in the prestige of the brand

Clearly, two features are just mentioned in the competition will make the

company more and more develop: The outstanding ability makes the tourism

product more unique, boosting demand for travel products increases and as having

the large market share, the tourism company has great strength to invest in the development and completion of outstanding abilities

1.5 Tools and matrices of Strategic Management

1.5.1 External Factor Evaluation matrix EFM

External environment analysis focuses on the identification and evaluation of

trends with events beyond the control ability of the company, such as growth of national economy, Overseas competition, explosion of information technology, will show the important opportunities and threats that an organization experiences tor the manager can draft the strategy to take advantage of the opportunities and

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avoid or reduce the impact of those threats External environment includes the

1.5.2 Internal Factor Evaluation Matrix (IF E):

Internal environment analysis aims at finding out the strengths and weaknesses of the Company Internal strengths and weaknesses of the company are trom the operations which can be controlled The management, research and development, manufacturing operations and business operations and information system of the company are the areas where the strengths and weaknesses will

appear The process of identifying and evaluating strengths and weaknesses in the

functional areas of a company is an essential strategic management activitiy On that basis, the Company will endeavor to pursue strategies which take advantage of the strengths and improve internal weaknesses

Value chain analysis:

Value chains are factors associated with the production and business of the

enterprises Analysis of the value chain will find the basic strengths and

weaknesses of the business

+ Support activities:

1 Infrastructure: workshops, equipment and tools coordinated and used have a strong influence to the operation of the business The main activities cannot Operate properly if the infrastructure 1s poor

2 Human Resource Management: The key factor brings success for the company is keeping talented people and attracting many talents

3 Technical Technology Management: The technology is associated with

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all value activities mm a business

4 Procurement control Procurement refers to procurement functions of the inputs used in production and business lines of the enterprises According to Statistics, the cost for inputs ts about 60% of sales of most businesses So, saving a small percentage of these costs can have major impacts on the profit capacity of the businesses

+ Other activities:

1 Input activity: Connecting with the supply, control of inputs, pace, time

of supply The poor supply ability impacts significantly on the output

2 Production activities: In relation to processing operations, plans and implementation of plans; capacity utilization; inspection of product quality;

maintenance, repairing, equipment and machinery, These factors will affect the

the businesses

5 After sales service: This is also an important factor in the market economy, as one of forms of promoting, attracting customers It greatly influences the prestige and the brand of the company

Managers increasingly recognize the importance of organizational culture in achieving competitive advantage Corporate culture is related to people, to the treatment and behavior, as a fundamental element to exploit the capabilities from human resources Corporate culture has an important influence to their strategic objectives and policies it also creates or prevents the implementation of a selected

— Strategic Management

evolution of corporate culture to the overall strategic direction of the business John Kotter - a great expert on leadership - considers leadership as the capacity to create large changes in the whole organization through sharing vision with a large number of individuals in the whole organization The values and beliefs of leaders

often form the culture for the organization

Corporate culture and leadership art are very difficult to quantify, difficult to analyze, difficult to identify but it importantly influences the performance of tasks and the success of the company

Organizational structure:

An appropriate organizational structure helps the work be done quickly,

consistently, smoothly from leaders to staff In addition, it also facilitates the

design of information systems in the business and control systems of the organization

Research and development:

The company’s quality of research and development efforts can help it keep

steady leading position in the industry or making it lag more than other businesses

in the areas such as developing new products, quality of products, controlling

prices and production technology Qualifications, experience and _ scientific capability is not sufficient basis for the good development research which this

functional department must regularly monitor the environmental conditions, information on technology innovation related to the process of technology, products and materials The effective information exchange between the research

development and the other activity field, namely marketing is extremely significant

to ensure the success of the company

Information systems:

Information connects all business functions and is a prerequisite for all

management decisions In the era of information explosion today, the function of

information systems is increasingly critical An effective information system will collect, encode, store, synthesize and provide results to help managers plan and build strategy close to the real situation It is an indispensable resource, to monitor

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environmental changes to recognize the threats of competition and support for strategic implementation, evaluation, control will facilitate the company complete their good business production task

Internal Factor Evaluation Matrix (IFE):

Internal factor evaluation matrix allows strategists to summarize and evaluate

important strengths and weaknesses of the functional business departments, and it also provides the basis to identify and assess the relations among these parts

1.5.3 SWOT Matrix

SWOT and TOWS analysis follow the steps:

4+ Step 1: List of main opportunities

4 Step 2: List of the major threats outside the company

+ Step 3: List of the major strengths

4 Step 4: Combination of the typical weaknesses within the company

4 Step 5: Combinination of the internal strengths with the external

opportunities and proposal of appropriate strategy plan SO This strategy

promotes strengths to take advantage of opportunities

4+ Step 6: Combination of internal weaknesses with external opportunities and proposal of appropriate strategy plan WO This strategy overcomes

weaknesses by taking advantage of opportunities

4 Step 7: Combination of internal strength iwith external threats and proposal

of appropriate strategy plan ST This strategy takes advantage of their

strengths to deal with external threats

4 Step 8: Combination of internal strengths with external threats and proposal

of appropriate strategy plan WT This strategy aims to minimize the effects

of weaknesses and defense against external threats

Reasons for using SWOT and TOWS: Although SWOT and TOWS distinction is relative, it’s still based on the foundation basis of 4 basic factors as

Strengths, weaknesses, challenges and opportunities of SWOT and TOWS will give us looking at two different angles:

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+ SWOT gives us to identify internal factors first external factors later Based

on the results of the analysis steps we will consider the tourism service business company's SWOT and, in which focuses on analyzing what the company has strong points? Which weaknesses should be overcome?

+ TOWS gives us to know external factors first, internal factors later TOWS analysis is to consider the threats and risks in the tourism business which comes from outside? Who are the competitors? Competition by what the advantages

and methods?’SWOT and TOWS analysis follow the steps:

Step 1: List of main opportunities

Step 2: List of the major threats outside the company

Step 3: List of the major strengths

Step 4: Combination of the typical weaknesses within the company

Step 5: Combinination of the internal strengths with the external opportunities

and proposal of appropriate strategy plan SO This strategy promotes strengths

to take advantage of opportunities

Step 6: Combination of internal weaknesses with external opportunities and

proposal of appropriate strategy plan WO This strategy overcomes weaknesses

by taking advantage of opportunities

Step 7: Combination of internal strength iwith external threats and proposal of appropriate strategy plan ST This strategy takes advantage of their strengths to

deal with external threats

Step 8: Combination of internal strengths with external threats and proposal of

appropriate strategy plan WT This strategy aims to minimize the effects of weaknesses and defense against external threats

Reasons for using SWOT and TOWS: Although SWOT and TOWS distinction is relative, it’s still based on the foundation basis of 4 basic factors as

strengths, weaknesses, challenges and opportunities of SWOT and TOWS will give us looking at two different angles:

+ SWOT gives us to identify internal factors first external factors later Based

on the results of the analysis steps we will consider the tourism service business

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company's SWOT and in which focuses on analyzing what the company has strong points’? Which weaknesses should be overcome”

+ TOWS gives us to know external factors first, internal factors later TOWS analysis is to consider the threats and risks in the tourism business which comes from outside? Who are the competitors? Competition by what the advantages

and methods?

Strenzth - weakness opportunity - threat matrix is an important combination tool that can help managers develop the kinds of following strategies: SO Strategies use the internal strengths of the organization to take advantage of external opportunities WO strategies aim at improving internal weaknesses by taking

advantage of external opportunities ST strategies use the strengths of the

organization to avoid or lessen the impact of external threats WT strategies are

defensive strategy to reduce the internal weaknesses and avoid the threats from the

external environment The combination of internal and external important elements

is most difficult task of developing a SWOT matrix, it requires a good

predictability, and timely adjustments to suit the practice

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| nvironmental analysis F,XỈ nal ( nvironment

Weaknesses W-O: Overcome W-T: Overcome internal

weaknesses to take difficulties and need to be

advantage of prepared carefully to overcome

a external challenges

opportunities,

1.5.4 TOWS Matrix:

TOWS analysis technique helps us understand periphery before TO, then

analyzing —in-situ after WS, from which we have accurate view on business development strategy and creating competitive advantage in the market

Distinguishing SWOT and TOWS is only relative, we’ve studied in depth of

their differences are as follows: DIAGRAM 1.3

SWOT AND TOWS DISCRIMINATION

e SWOT analysis tells us those elements in the business first Considering the favorable factors first, and then considering the external factors and opportunities and risks later

e TOWS analysis means we analyze external factors first, then analyzing the external elements later Creating competitive advantage in the market

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/.5.5 Competitive Profile Matrix (CPM) Dong Thap Tourist Joint Stock (‘ompany

In all events, and environmental trends can affect the strategic position of a company, the tmpact of competition ts often considered the most important Competition profile matrix identifies the principal competitors along with their

particular advantages and disadvantages

To set this matrix aims at offering the comparative evaluation of the company with major competitors in the same industry, the comparison is based on the factors

affecting the competitiveness of the company in the industry Thereby it gives the

Manager recognize the strengths and weaknesses of the company with the

competitors, identifying competitive advantages for the company and weaknesses

should be overcome To build a competition profile image matrix, it should be taken

through the 05 steps:

e Step 1: Make a list about 10 major factors that affect critically the

competitiveness of the company in the industry

e Step 2: Classify the importance from 0.0 (not important) to 1.0 (very important) for each element The importance of each factor depends on the affecting

level of the factors for the competitiveness of the company in the line Total scores

of the importance of all factors must equal 1.0

e Step 3: Determine the weight from | to 4 for each factor, the weight of each factor depends on the ability of the company with the elements, of which 4 is good,

3 is above average, 2 is average, | is weak

e Step 4: Multiply the importance of each factor with its weight to determine

the score of elements

e Step 5: Sum score of all elements to determine the total points of the matrix Evaluation: Compare the total points of the company with major competitors

in the industry to assess the competitiveness of the company

The company's illustration example table of some competitive evaluating

criteria for with rivals 1, 2

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The tourism company which has core competencies can make a difference for its

products or achieve lower costs than rivals Dong Thap Tourism Joint Stock

Company takes its advantage of low cost based on available natural resources to exploit the tourism business which has created more value than competitors and achieve rates of returns higher than the industry average

Core competencies is capacities that Dong Thap tourism company can perform better than other capabilities within the company, that capacity is the center for

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the competitiveness of the enterprise Core competence ts integration of all the technology and expertise of the company into a focus, a consistent edge Expressed through understanding of customer needs, attitudes of thoughtful dedicated service and high adaptability to changing of business environment The core competencies which must be different by Dong Thap Tourism company are distinctive compentencies), those are capacities that Dong Thap tourism company can perform better than competitors it allow businesses to create competitive advantage Dong Thap Tourist Company discovers exploition

of wild lands, wildlife, building the cultural festival programs which are distinctive and difficult to imitate

Core competencies are special factors that Dong Thap tourism company considers as its core competencies:

-Those abilities bring benefit for the travel customers;

-Those possibilities that competitors are very difficult to imitate;

-Can use that ability to expand to more products and tourism markets

Core competencies are demonstrated by technical know-how in_ business, relationships with customers, connection with localities, travel agent system, strong brand enterprises in the Mekong Delta Core competencies create competitive advantages for the enterprise in the business operation, from which forming the core competitiveness advantages of the enterprise

In summary, the core competitive advantage of Dong Thap Tourism Company

in business is based on its core competencies to create competitive advantage, ie

the existing strengths to create diversified products services and high quality to

satisfy customer demand, low prices This is considered a top priority for many businesses when considering the decisions of developing new products and

services which are complementary for available tourism products, services Core

competencies will make Dong Thap tourism company competitive advantages, Creating core competitive advantages which help reduce risk and achieve success in establishing goals and strategic planning to develop the tourism by

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2020.Core competencies (Core Competencies) in Dong Thap tourism Joint Stock Company's competitiveness includes the following basic points:

Core competency (ability to make a difference) 1s the unique strength that allows the tourism company to achieve superior performance, quality, innovation and customer meeting thereby creating outstanding value and achieving competitive advantage

The tourism company which has core competencies can make a difference for its

products or achieve lower costs than rivals Dong Thap Tourism Joint Stock

Company takes its advantage of low cost based on available natural resources to exploit the tourism business which has created more value than competitors and achieve rates of returns higher than the industry average

Core competencies is capacities that Dong Thap tourism company can perform better than other capabilities within the company, that capacity is the center for the competitiveness of the enterprise Core competence is integration of all the technology and expertise of the company into a focus, a consistent edge Expressed through understanding of customer needs, attitudes of thoughtful dedicated service and high adaptability to changing of business environment The core competencies which must be different by Dong Thap Tourism company are distinctive compentencies), those are capacities that Dong Thap tourism company can perform better than competitors, it allow businesses to create competitive advantage Dong Thap Tourist Company discovers exploition

of wild lands, wildlife, building the cultural festival programs which are distinctive and difficult to imitate

Core competencies are special factors that Dong Thap tourism company considers as its core competencies:

-Those abilities bring benefit for the travel customers;

- Those possibilities that competitors are very difficult to imitate,

-Can use that ability to expand to more products and tourism markets

Core competencies are demonstrated by technical know-how in_ business, relationships with customers, connection with localities, travel agent system,

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strong brand enterprises in the Mekong Delta Core competencies create competitive advantages for the enterprise in the business operation, from which forming the core competitiveness advantages of the enterprise

In summary, the core competitive advantage of Dong Thap Tourism Company

in business ts based on its core competencies to create competitive advantage, ie the existing strengths to create diversified products services and high quality to satisfy customer demand, low prices This is considered a top priority for many

businesses when considering the decisions of developing new products and

services which are complementary for available tourism products, services Core

competencies will make Dong Thap tourism company competitive advantages,

creating core competitive advantages which help reduce risk and achieve

success in establishing goals and strategic planning to develop the tourism by

2020

1.5.6 BCG Matrix (Boston Consulting Group)

This matrix is offered by the leading management consulting firm of the U.S

as Boston to help large companies evaluate the operation situation of strategic

business units

Since then helping the managers decide to allocate funds for the SBUs and

assessing the financial situation of their company

BCG Matrix is a table consisting of four squares in which:

Horizontal axis: to show SBU's relative market share is defined by the ratio

between the SBU's sales with sales of leading rival or the second rival The case the SBU is not leading in the line in relative share market sales of the SBU equals the

ratio between the SBU's sales with sales of industry leading competitor

The case the SBU is leading the industry in the relative share market sales of

the SBU equals the ratio between those sales of the SBU with the sales ranked missed rival in the industry

Vertical axis: Shows the annual export growth of the market of product line

that this SBU trades calculation by the percentage If the SBU is greater than 10%

percent considered as high the high MGR level (MGR: Market Growth Rate)

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(RELATIVE MARKET SHARE)

GE Matrix shows the competitive position of a company in the market We

can consider the GE matrix in the way of the following explanation:

This is a two dimensional matrix:

+ Vertical axis characterizes the attractiveness of the industry

+ The horizontal axis shows the power of business

The attractiveness of the tourism, the service is built from the following factors:

- The scale and capacity of the tourist, service market is very great;

- The growth of the industry is very high, based on the needs of traveling, visiting by the people nonstop grows according to the impetus of the society;

- Profitability of tourist service industry is relatively high;

- The level of competition is fierce because many organizations participate in business

- Seasonality of tourism and services

The business power of the company ts shown in the following elements:

- The company’s market share tn the marketplace:

- Sold price of services, tours

- The quality of tourist products and services are always guaranteed,

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- The number of acquainted customers 1s relatively large and faithful,

- Always be active in financial resources and hotels, motels

- Annual business efficiency always obtains at relatively high level,

- Geographical location of the company ts always rational

| High Investment for Investment | Growth or

|

¡ The attractiveness Medium Selective Growth or | Harvest

| of the industry investment for | withdrawal

- FS: Financial Strength

- CA: Competitive Advantage

- ES: Environmental Stability

- 1S: Industry Strength

To establish a SPACE Matrix should perform the following steps:

* Step |: Choose a set of variables to be used to gauge the competitive advantage (CA) industry strength (IS), environmental stability (ES) and financial

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strength (FS) Here are some of the criteria used to present on the SPACE matrix

axes

¢ Step 2: Fix the value +! (Worst) to +6 (best) for each element of FSva IS, fix

the value -1 (best) to - 6 (Worst) for each element of ES and CA

¢ Step 3: Calculate the average score for FS by adding the fixed values for the elements, and divide by the number of elements selected to present in the FS Similar to the calculation way with the IS, ES and CA

* Step 4: Plot average scores of the FS, IS ES and CA on the appropriate axes

of the SPACE matrix

* Step 5: Add the scores on the X axis and plot the result point on the X axis,

similar to the Y axis and then determine the intersection point of two new points on

XY axis

¢ Step 6: Draw the vector with direction from the original point of the SPACE Matrix through the new intersection This vector gives the strategy type for the

business: aggresive, competitive, defensive or conservative?

1.5.9 Quantitative strategic planning matrix (OSPM)

Using the input information from the matrices IFE, EFE, the SWOT and the main strategy to objectively evaluate the best alternative strategies Six steps to

develop a QSPM matrix to overcome disadvantages of the mentioned-above

method, businesses can choose the product strategies according to analysis technique, selecting strategies by using the Quantitative Strategic Planning Matrix -

QSPM

QSPM Matrix uses the input data from the analysis in the above steps to help the strategists decide objectively which strategy in the alternative strategies is most attractive and worthy for the business to pursue with the aim at successfully implementing its goals QSPM matrix development process includes six steps (see the table):

- List the external opportunities/threats and the internal important

strengths/weaknesses in the column (1) of the matrix These factors are taken

directly from the EFE Matrix and IFE Matrix

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- In column (2) of the matrix, fill up the numbers corresponding to each element in the classified columns of the EFE Matrix and IFE Matrix

- Study the matrices of SWOT, BCG, Hofer and identify possible alternative strategies that the organizations should consider to perform, record these strategies

on the top row of the QSPM matrix The strategies are classified into separate groups (if any)

- Determine the attractiveness score (column A): Not attractive = 1 less attractive = 2, quite attractive = 3 very attractive = 4 hese numeric values present the relative attractiveness of each strategy compared with other strategies in the Same group of alternative strategies

- Calculate the total attractiveness score of each strategy separately considered

for each critical success factor listed in column (1) by multiplying the classified

score with attractiveness score in each row (put into column B)

- Add cumulatively attractiveness score, it gives us the total attractiveness

score of each strategy (taking Into account all the appropriate internal and external

factors could affect the strategic decisions) The higher total score, the more

appropriate this strategy and the more significant for choosing

In principle, a QSPM matrix can include any number of groups of which

alternative strategies and in a certain groups can include any number of which

Strategies, but there are only the strategies in the same group just being evaluated together For example, a diversification strategy group may include the concentric diversification strategy, conglomerate diversification, while other different strategy might include the vertical connection strategies (forward or backward) and horizontal connection These strategy groups are different and the QSPM matrix only evaluates the strategies in the same group

Be noted that the QSPM matrix indicates relative attractiveness of the Strategies which can choose and more importantly, it provides an objective basis to

consider and decide the most appropriate product quality choice However, the

QSPM matrix also has limitations and must have certain conditions to be used in practice One of the biggest limitations is that during construction, the matrix requires the intuitive judge to score the attractiveness of elements - although it has

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been based on the information of the environmental analysis before Therefore, 1f you want to use the QSPM matrix effectively, it requires the strategists to thoroughly discuss and agree about each figure in the matrix by adding bases for scoring into the basic column of attractiveness score

1.6 Typical implementations of strategic management in the tourism

Tourism is a smokeless industry which develops diversifiedly and

complicatedly, so there are many different definitions of tourism, but the definition is most widely accepted as: Tourism is a set of positive activities

of people to carry out a journey form, as an affiliate industry to satisfy the needs of tourists Tourism is the journey that a party who is departure one for the pre-selected purpose and other is the tools to meet their needs

Characteristics of tourism service, Tourism: is activities related to travel of man outside of his habitual residence place in order to meet the needs of visiting, learning, leisure, outdoor recreation in a certain time

The concept of tourism includes three factors:

- Space: trips outside place of residence:

- Duration: Short term, temporary (usually greater than 24 h and not more than | year);

- Purpose: visiting, learning, leisure, resort

(Note: the trip to practice and receive income is not considered as tourism)

Accommodation, food services, food and drinks;

Sightseeing and entertainment services;

Consumer goods and souvenirs;

Other services for tourists:

Suppliers of tourism products: are business units providing tourism products for visitors The business units of tourism products may include the services

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